MITT - Earnings call transcript Q1 2024 | AG Mortgage Investment Trust, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and thank you for standing by. Welcome to the AG Mortgage Investment Trust First Quarter 2024 Earnings Conference Call. [Operator Instructions]. Please be advised that today's conference is being recorded. [Operator Instructions]. I'd now like to turn the call over to Jenny Neslin, General Counsel for the company. ahead. go Please

Jenny Neslin

CEO morning, Financial XXXX Good With welcome the Anthony Durkin, to on Chief Smith, Thank Officer; Investment Call everyone, for Quarter and our T.J. are Earnings call our Trust. President; AG First Nick the our Chief you. Rossiello, today and and Officer. Mortgage me Investment

subject and we please discussion note made today's which forward-looking contain may forward-looking in begin, filings, that statements in our risks regarding and Before including headings statements. today's statements, during to are outlined are under management's call call factors analysis. risk uncertainties Cautionary the information certain forward-looking Any SEC and discussed Statement the

by regarding materially from these year as time our may company's or are revise of time in SEC. our encourage most forward-looking and with forward-looking SEC not review results the filed information, filings, The future as new including disclosure XX, filed December statements. to result otherwise. subsequent not the whether statements to statements, from to for actual reports update law, any obligated Form XX-K our contained you or or differ and we We XXXX, a do recently ended intend the to events required Except read

During Please GAAP comparable measures. the certain refer to for call measures. to today, the most we non-GAAP to filings financial will refer reconciliations our SEC

home morning. website for website, Presentation We that view page. the reference www.agmit.com our link on posted this slide To click XXXX the the also presentation, will the Earnings presentation to and earnings the on to QX turn our was

to . the With you call, that, call all over Again, I'd for joining and T.J. the us thank welcome to today. turn like to

Thomas Durkin

we I'm Walking paying $XX.XX, which with benefits. full everyone. equity economic as less the you than of we month Jenny. clear producing Last report book on to X.X% dividend, but of impact. merits gives a for our excited March XX, we $X.XX were you, quarter walk a Thank adjusted true only of post-merger, through the grew quarter. WMC while of to transaction, position first our morning, MITT's on the $XX.XX able believe compelling Good the picture financial through quarter, return a financial from value

book While we month flat to per month, still preliminary, quarter see April, estimated end value end. be of the from roughly to

our base demonstrate environment while The end of in to only expectation cuts power $XXX equity our $XXX ] results of and value. market [indiscernible], higher rate With company the to million has [ now quarter liquidity turns this grow ability million interest an for of first book economic quarter. X.X longer rate earnings with near-term the leverage for protecting in

net During our per of of $X.XX. by than the covering we $X.XX by and income, more quarter, share, million interest share EAD earned $X.XX per earnings of $XX.X dividend

In on of be closing assets of X, have through strategy WMC originated loans. already to core the approximately and million monetized, into transaction our December rotated mortgage $XX quarter residential been newly end,

prospects discuss past December I last forward. like this excited the investment WMC eligible grade for market one capital notes, and be WMC said September. going of bonds, a the legacy the with notably, due $XX acquisition are of unsecured and to able team MITT successful more very approximately activity, of terms I In issued coming of to And completed the GSE are addressing finally and million quarter, portion this future markets sizable we which securitization, convertible the

strengthening while on a positioning investment REIT. residential in another the net, on our my premier our personally MITT line We as purchase earnings scale interest release, our execute another strong continue of Demonstrating pleased was substantial last I to step portfolio efficiencies. mortgage confidence enhancing shares confidence, in mission. with pure-play as on ability believe to continue and And WMC to further XX,XXX have the ways we deliver to in we quarter's acquisition our shareholders was seeking earnings G&A continue to following

turn Nick. I'll now call to the over

Nicholas Smith

the by loans fundamentals whole The credit. of of assets, X.X% million of quarter, loans, Home investment value X.X%, continued million residential acquired Arc the of and residential a strength in In by pipeline the leverage. another economic continued million from was current X.X% of company of and securitized third-party performance return originators. an portfolio additional Thanks, $XXX home risk grew housing strong supply and company in delivered economic The underpinned curve, increase driven built first $XXX $XXX limited and T.J. credit the book flattening reduced by other

to equity return the the WMC, with second aggregate in loans, We million. properly additional the of rotated the addition activity from to this we market bringing our in in being acquired coming In $XX securitization anticipate year weeks. approximately assets

high into end have past the While to tightened throughout of last quarter, teens the remain. credit post-securitization in spends mid- year equity returns and this

Arc be origination challenging, $XXX million of volumes in continued to million. While the QX continues Homes landscape $XXX with lock April strength were approximately

of the increased funding first XX% Notably, over the year. volumes previous quarter from

we increase and in wholesale the for growing increase same increase our the industry pace expect we over is continue channels. both the the this period, correspondent over over these keep increases with X.Xx While in footprint seen next year to originations as

turn call to over Anthony. Now I'd the to like

Anthony Rossiello

to quarter. In base, performance MITT from Further, morning. benefit closed WMC our transaction, through is synergies December, began immediately MITT's announcement grow scale this in Nick, of we evident the and improving the good while our helping company. the substantial acquisition, and to portfolio highlighted you, the investment previously for Thank equity which we

During of share. to per shareholders $XX.X net the common available $X.XX recorded or income quarter, million GAAP we

on MSR our book spread driven neutral hedge value rising of quarter approximately $XX.XX portfolio book X.X% losses increase value increased of rising December. on book portfolio share $XX.XX gains from interest mark-to-market gains driven its set on investment by from a for earnings EAD. available per value all as improvement gains per and and Our this Home rates, value impact from book rates credit Arc share tightening, by adjusted EAD. from our portfolio, mark-to-market or by The had our was in distribution on

EAD of generated was of was operating dividends portfolio first quarter. income, Home. contributor interest preferred $X.XX, by $X.XX per for earnings hedge exceeded of offset share the expenses earned Net and inclusive generating share, We per our a This of per $X.XX on which of from Arc interest loss our share. $X.XX $X.XX

swaps, quarter portfolio, by expenses net the earnings only full million interest resulting a increased WMC During from including while quarter, increased $X.X the of from acquired million. by income, $X.X operating

the be operating end we being and million upon estimated $X savings our on on annual call, that to expenses approximately annual basis higher MITT removed These an synergies with realized previous range. would estimated our are trending discussed earnings WMC. combining As expense of million $X of operating toward now

the Lastly, with liquidity ended we of total approximately quarter million. $XXX

the Operator? This to for concludes our questions. now prepared remarks, open call like and we'd

Operator

Harter Our from Doug UBS. Instructions] comes first question [Operator with

Douglas Harter

Hoping new incremental kind you raise of outlook do to your your capital? fund could that the either talk you plans of kind new about of recycling we that, through how investments, plans and any for cap? about should to of pacing think have Or

Nicholas Smith

is This Thanks, Doug. Nick.

the part, we, particularly ] can the capital credit flattening given the mentioned. So have, most for curve that of we we that recycle [

[ reinvest. constraint. have you mentioned And sell the well, market. market the sort to book that still credits I I opportunity home. done that buy of them positions of the certainly builds be at in and and down an ] will check growth Arc availability there's in opportunity plenty where Pace-wise, think the channels the in can of not

Douglas Harter

-- the production? what about guess And put you have on it, how work is call assets where are can you return Home WMC and to thinking I the you that you're that money Arc selling in legacy differential that you today think between,

Nicholas Smith

Yes.

of XXXs as curve the paper some talking the high and out has XXXs, So was seasoned spread. credit we flattened type paper low that a we're were selling of lot

sort those with I then returns. get think teens recycling. of you modest mid- more the via And the to we obviously, of high leverage spreads can back-ended deployment to double

Operator

come will Stewart with from question Jason next JonesTrading. Our

Jason Stewart

where wondering, Home further in looking you year? see talk the the capacity more at a the about back out that can personnel-wise into Arc half? rates preparing in I see do you we if the was a origination is bit volume, -- for you Are decline

Thomas Durkin

I more think environment. rates, basis than When current rally in point we for rates seasonality lot well to point, is rallies we about in think about do a will the think positioned volumes. Arc what XXX Home XXX basis

efficient, positioned so see given well that sort can And making more we staffing of company a be that outlook, into think and handled. the we've if we -- of and readily more work those that increases, lot the is put

Jason Stewart

of more then clarification. And a

the given say starting bid volatility April, in Just we affected. been for the you materially would that securitization really hasn't saw,

Thomas Durkin

been it's Yes. affected. materially I think don't

those funds, look inflows In demand. less a tends at There supply well issuance. supply-demand are for be the you bond continued supported lot still across technicals of to fact, than if

Operator

with take [Operator Instructions] our KBW. George We'll from next question Bose

Bose George

you sustainability the want Can cash. level how about that of quarter? is million you that that -- us current talk kind $XXX little think you this of I you much as had over EAD just remind guess much you note, a And and of on Can deployable? you related of how then reported of cash of to of the a the keep

Thomas Durkin

Thanks.

question, on So listed mean, we've X. I terms cash got of million in the Page $XXX

of probably convertible think we've recent when over million running I the on I so, in where think $XX note, starting ability payable an have September million think $XX leverage coming maturity that. it's We deploy the up obviously to the to been or about we quarters have we in June.

cash managing obviously maturity. that we're into So

EAD, portfolio. been back things rates ROEs good moving when up we think I higher capture to we've investment there, think, go of I were really book And on in value protecting terms to these if the rates. of think really about a think done the way we've I you putting that XXXX, job have In to able been the is started

tailwind. think a I sort that's so of And

kind core I twofold. contributing the obviously scale think been earnings Home, of kind our on the and at headwind side and One G&A. producing just the Arc just ROEs of in then investment has offsetting we're has higher been

I mentioned, the quarter forward into clearly we're out. and And we detail happy in more which seeing I think think as so to there that's synergies, look behind Anthony G&A of penciling with you're go how now X terms us,

towards EAD we positive. Arc a negative been and the kind kind the of think, sort X, contribution of goal page And year, working I on think of half then this show breakeven towards with ] crossing gradually Home, I [ back the obviously, to has into of

feel So basis. EAD put I that one I pretty range higher together, sustainable you we sort of don't as more a We all about this view on good [indiscernible]. think this think when and

Bose George

makes was transaction. How positive I potential? very sort it as potential then somewhat Great. a actually, energy much think a a sort -- we is just like acquisitions, trading future but do focused Okay. where And about of obviously, as how challenging, on mean on transactions, see obviously, you your it this of that

Thomas Durkin

I I Listen, to think other to, the company. we're the Yes. acquisitions, of open still would scale enhance say, other very ways

I shown think be the manager supportive growing has continuing in it. to very to

fielding as sort WMC So we're definitely and we of one for open opportunities, view and calls business done. don't about and

building think future I for, growth. hopefully, a it was block

Operator

question comes next BTIG. Eric from Our Hagen with .

Eric Hagen

this agency for feel for news upper non-agency the MBS perspectives received like Any some support we've that MBS just do bound see you the from MBS of and you the given Any week. to like here? following guys on recently? What spreads meeting for tighten spreads the spreads, catalysts is side

Nicholas Smith

in sort in the at agency not close fairly largely and generally is being book Obviously, with the agency spreads off, [indiscernible] do insulated from to core look of But market. do pay comes basis valued business. at that on we should the that think here attention agencies what being I agency we non-agency goes our Look, as That we're in market said, basis. better.

the look can a at that you spreads are interest outperformed more you stack impacted of sort see past that rate this performance, of the of quarter's capital and IG parts think I volatility. can . by credit and even lot

Eric Hagen

speak for TPG. Gordan Okay. you any That's mean, are helpful. Lots and that opportunities yet seeing credit there that out Angelo are opportunity? there at guys the I could of stressed capabilities around

Thomas Durkin

not that [ at residential think scale don't in side an see I point. short . focusing way more I new this the to sort on of term I mean the origination. either. there's opportunity hazard honestly, changing, certainly on medium ] mean Probably

Operator

Trust no This in Earnings time, Conference this Mortgage have will Call. At questions you. Investment conclude 'XX further AG Thank queue. today's First Quarter we

wonderful this your day. You may disconnect at a line have And time.

AG Mortgage Investment Trust (MITT) 3 May 242024 Q1 Earnings call transcript