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AG Mortgage Investment Trust Inc (NYSE:MITT) reported first-quarter 2025 earnings per share of $0.21 and increased its quarterly dividend by 5.3%, according to the company’s Q1 earnings presentation released on May 6, 2025. The residential mortgage REIT continued to execute its securitization strategy while expanding its home equity loan portfolio.
Quarterly Performance Highlights
MITT reported earnings per share of $0.21 for Q1 2025, an improvement from $0.18 in the previous quarter. Earnings Available for Distribution (EAD) came in at $0.20 per share, fully covering the quarterly dividend of $0.20 per share. The company’s book value per share increased slightly to $10.65, up from $10.64 at the end of 2024.
"Our first quarter results demonstrate continued execution of our residential mortgage investment strategy," said T.J. Durkin, Chief Executive Officer and President. "The 5.3% increase in our common dividend reflects our confidence in the sustainability of our earnings profile."
The company’s investment portfolio yield stood at 6.0%, while its cost of funds was 5.3%, resulting in a Q1 economic return on equity of 2.0%.
As shown in the following financial position summary:
Net interest income for the quarter was $19.6 million, supporting the company’s dividend coverage. MITT continued its loan acquisition activity, purchasing $366.8 million of agency-eligible loans and $128.2 million of home equity loans during the quarter.
The following slide details the company’s Q1 performance metrics:
Securitization Strategy and Portfolio Growth
AG Mortgage has positioned itself as a programmatic issuer of non-agency securitizations, having executed 24 securitizations since 2021. During Q1 2025, the company securitized $915.1 million in unpaid principal balance (UPB) of loans. The company’s strategy involves acquiring loans, securitizing them, and retaining bonds to generate attractive equity returns.
"Our securitization pipeline remains robust," noted Nicholas Smith, Chief Investment Officer. "In April, we completed a securitization of $423.3 million UPB of agency-eligible loans and partnered to co-sponsor a securitization of $491.8 million UPB of home equity loans."
The company’s securitization activity has driven significant portfolio growth, as illustrated in this chart:
Loan Portfolio Quality and Composition
MITT maintains a high-quality loan portfolio with strong credit metrics. The non-agency loans in the portfolio have an average FICO score of 765 and a current loan-to-value ratio of 59%, indicating substantial equity cushions. The home equity loan portfolio features an average FICO score of 750 and a combined loan-to-value ratio of 63%.
The company’s loan portfolio composition is detailed in the following slide:
The home equity loan segment continues to grow, with an additional $52.4 million purchased in April. This aligns with the company’s strategic focus on expanding in the non-QM and home equity markets, which management identified as growth areas in previous communications.
Financial Position and Outlook
AG Mortgage maintained a strong financial position with total equity of $543.9 million and liquidity of $132.5 million at quarter-end. The company operates with a conservative economic leverage ratio of 1.6x, significantly lower than its GAAP leverage ratio of 12.4x due to the non-recourse nature of its securitized debt.
"Our financing profile is primarily composed of term, non-mark-to-market securitized debt, which provides stability to our balance sheet," explained Anthony Rossiello, Chief Financial Officer. "This approach allows us to navigate market volatility while maintaining our growth trajectory."
The company’s investment portfolio totaled $7.1 billion at quarter-end, with securitized loans representing the largest component at $6.4 billion. The portfolio is financed primarily through $5.9 billion in recourse debt and $0.8 billion in non-recourse debt.
The following slide provides a detailed breakdown of the company’s investment portfolio:
MITT’s proprietary origination channel, Arc Home, continues to contribute to the company’s performance. Arc Home’s lock volume increased 48% year-over-year to $1.0 billion in Q1 2025, with funding volume of $715.9 million. MITT purchased $61.0 million in loans from Arc Home during the quarter.
The performance and contribution of Arc Home is illustrated in this slide:
In premarket trading on May 6, MITT shares were up 0.9% to $6.69, continuing a positive trend that has seen the stock trade between $5.625 and $7.948 over the past 52 weeks.
With its continued execution of its securitization strategy, growth in the home equity loan portfolio, and improved earnings performance, AG Mortgage appears well-positioned to navigate the current mortgage market environment while delivering returns to shareholders.
Full presentation:
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