Angel Oak Mortgage, Inc. (AOMR): Business Model Canvas [Dec-2025 Updated]

You're trying to get a clear, no-fluff read on the engine driving Angel Oak Mortgage, Inc. (AOMR) right now, especially following Brookfield Asset Management's majority acquisition in October 2025. Honestly, their entire operation boils down to sourcing high-quality, non-QM loans and efficiently packaging them into RMBS deals, like the recent $274.3 million issuance, all while managing a target asset portfolio of $2.5 billion as of September 30, 2025. With Net Interest Income reaching $30.2 million for the first nine months of the year, the spread between what they earn and the interest paid on their debt-like the 9.750% Senior Notes-is where the real money is made and lost. It's a specialized credit play, plain and simple. Check out the Canvas below to see the key resources, like their $707.4 million in undrawn financing capacity, and the cost structure that keeps this machine running.

Angel Oak Mortgage, Inc. (AOMR) - Canvas Business Model: Key Partnerships

You're looking at the core relationships that power Angel Oak Mortgage, Inc. (AOMR) as of late 2025. These partnerships are critical because AOMR relies heavily on its affiliates for deal flow and management expertise, so understanding them is key to seeing how the whole machine runs.

The structure is heavily integrated, which provides control over the collateral but also creates dependence on these specific partners. Here's a breakdown of the key players that make the Angel Oak Mortgage, Inc. model work.

Brookfield Asset Management

The biggest recent shift is the strategic partnership closing on October 2, 2025, where Brookfield Asset Management acquired a majority stake in Angel Oak Companies. This move immediately plugged Angel Oak into Brookfield's massive global credit platform, which manages approximately $332 billion of assets globally as of August 6, 2025. Angel Oak itself is a premier alternative asset manager with over $22 billion in assets under management. This relationship is designed to accelerate Angel Oak's growth by leveraging Brookfield's reach.

To give you a sense of the scale Angel Oak brings to this partnership, consider its history:

• Originated over $32 billion in residential mortgage loans over the past decade.
• Issued more than 65 securitizations to date.

Angel Oak Capital Advisors Affiliate

Angel Oak Mortgage, Inc. is externally managed and advised by an affiliate of Angel Oak Capital Advisors, LLC. This affiliate is the engine driving the investment strategy and capital markets execution for AOMR. They are a leading alternative credit manager specializing in structured credit and mortgage-backed assets. This relationship is defintely central to AOMR's operations.

The affiliate's track record in capital markets is substantial, as shown by their securitization activity:

Metric	Value/Count	Context
Total Non-Agency Securitizations (as of Sept 2024)	50th issuance	Reflects consistency as an issuer in the space.
Total Non-QM Loans Securitized (since 2015)	Approximately $18.5 billion	Via the AOMT shelf.
Total Individual Loans Securitized (since 2015)	More than 42,000	Demonstrates broad collateral aggregation.

Angel Oak Mortgage Lending

The proprietary platform, Angel Oak Mortgage Lending, is the primary source for the Non-QM loans that Angel Oak Mortgage, Inc. seeks to acquire. This vertical integration gives AOMR enhanced transparency and control over the underlying collateral, which is a key differentiator. The origination arm, Angel Oak Mortgage Solutions, LLC (AOMS), is crucial for feeding this pipeline.

While AOMR acquires assets from the secondary market too, the proprietary sourcing is key. For instance, in one AOMT securitization in May 2025, AOMS originated 17.18% of the pool balance, with the remaining 82.82% coming from unaffiliated third-party originators. As of March 2023, AOMS's servicing portfolio stood at approximately 26,891 loans, totaling about $11.6 billion in aggregate principal balance.

Global Investment Banks

Angel Oak Mortgage, Inc. relies on relationships with global investment banks to secure the necessary financing lines to acquire its target assets. While the specific current capacity of these lines is not publicly stated as $1.1 billion in late 2025 filings, the company's activity shows active engagement in debt markets to fund its portfolio growth.

The May 2025 public offering of Senior Notes illustrates the type of financing activity these relationships support:

Financing Instrument	Aggregate Principal Amount	Over-Allotment Option
Senior Notes due 2030	$40,000,000	Up to an additional $6,000,000

Underwriters

The execution of public debt offerings requires established relationships with major financial institutions acting as underwriters. For the $40,000,000 Senior Notes offering priced in May 2025, AOMR utilized a syndicate of major banks to bring the securities to market.

The key firms involved in that offering were:

• Joint Book-Running Managers: RBC Capital Markets, LLC, UBS Investment Bank, Wells Fargo Securities, LLC, and Piper Sandler & Co.
• Co-Managers: B. Riley Securities, Inc. and Janney Montgomery Scott LLC.

Angel Oak Mortgage, Inc. (AOMR) - Canvas Business Model: Key Activities

You're looking at the core actions Angel Oak Mortgage, Inc. (AOMR) takes to run its business as of late 2025. It's all about buying loans, packaging them up, and managing the resulting assets and funding.

Acquiring and Investing

Angel Oak Mortgage, Inc. focuses on buying first lien Non-QM (non-qualified mortgage) residential loans. This is the engine of the whole operation. They are actively deploying capital into this space, which is their core asset class.

Here are some key figures from the third quarter of 2025:

• Purchased $237.6 million worth of newly originated non-QM residential mortgage loans and HELOCs in Q3 2025.
• The weighted average interest rate on the residential whole loans portfolio stood at 7.98% as of September 30, 2025.
• The CEO noted a consistent pace of acquisitions, stating they have been buying $200-$300 million a quarter.

You can see the asset base they are building:

Asset Category (as of September 30, 2025)	Fair Value (in millions)
Residential Whole Loans	$425.8
Residential Mortgage Loans in Securitization Trusts	$383
RMBS and Investments in Majority-Owned Affiliates	$201

Securitization

Structuring and issuing Residential Mortgage-Backed Securities (RMBS) is how Angel Oak Mortgage, Inc. converts illiquid whole loans into tradable securities, freeing up capital. They executed a major transaction shortly after the third quarter ended.

The AOMT 2025-10 transaction is a prime example of this activity:

• Issued in October 2025, AOMT 2025-10 was an approximately $274.3 million scheduled unpaid principal balance (UPB) securitization.
• This was the 12th non-QM RMBS transaction issued in 2025 under the AOMT program.
• The collateral pool for AOMT 2025-10 consisted of 608 residential mortgages.
• Proceeds from this securitization were used to repay outstanding debt of approximately $237.4 million.

They also actively manage the existing portfolio through refinancing actions, such as calling and re-securitizing legacy deals:

• In September 2025, calling AOMT 2019-2 and AOMT 2019-4 resulted in $19.4 million of cash released.

Portfolio Management

Managing the combined loan and RMBS portfolio is critical for achieving accretive growth. This involves monitoring performance metrics like net interest income and overall asset size.

For the nine months ending September 30, 2025, net interest income reached $30.2 million, up from $27.1 million in the prior year period. For Q3 2025 specifically, net interest income was $10.2 million. The total target assets for Angel Oak Mortgage, Inc. stood at $2.5 billion as of September 30, 2025. That's a big book to manage, so you defintely want to see that net interest income ticking up.

Key financial metrics as of September 30, 2025, include:

Metric	Value
GAAP Book Value Per Share	$10.60
Q3 2025 GAAP Net Income	$11.4 million
Q3 2025 Distributable Earnings	$0.5 million

Capital Raising

To fund asset purchases and operations, Angel Oak Mortgage, Inc. actively taps equity and debt markets. A recent example involves senior unsecured debt issuance.

In May 2025, the company priced an offering of its 9.750% Senior Notes due 2030:

• The initial offering was for $40,000,000 aggregate principal amount.
• Underwriters had an option to purchase up to an additional $6,000,000.
• As of September 30, 2025, total Notes payable stood at approximately $342.6 million (or $342,608 thousand).

The proceeds from the May 2025 offering of $42.5 million in 2030 Notes were used for general corporate purposes, including loan acquisitions.

Risk Hedging

Managing interest rate risk associated with their assets and financing is a constant activity, often involving derivative contracts like swaps. The financial impact of these hedges shows up in realized and unrealized gains/losses.

Looking at the Q3 2025 results, the difference between GAAP net income and distributable earnings highlights the impact of these instruments:

• $5 million in unrealized gains on hedge contracts contributed to the difference between GAAP Net Income of $11.4 million and Distributable Earnings of $0.5 million for Q3 2025.
• The net realized gain (loss) on mortgage loans, derivative contracts, RMBS, and CMBS for the three months ended September 30, 2025, was $(6,557 thousand).

Finance: draft 13-week cash view by Friday.

Angel Oak Mortgage, Inc. (AOMR) - Canvas Business Model: Key Resources

You're looking at the core assets Angel Oak Mortgage, Inc. (AOMR) relies on to execute its strategy in the non-QM space. These aren't just line items; they are the engines driving the business.

Investment Portfolio

The scale of the asset base is a primary resource. As of September 30, 2025, the target assets for Angel Oak Mortgage, Inc. totaled $2.5 billion. This portfolio is actively managed, with residential mortgage whole loans held at fair value amounting to $425.8 million on that same date. The total assets on the balance sheet were reported at $2.63 billion as of the end of Q3 2025. The portfolio carried a weighted average coupon of 7.98% across the total residential whole loans portfolio at quarter-end.

Here's a quick look at the asset and financing structure as of September 30, 2025:

Resource Metric	Amount as of September 30, 2025
Target Assets	$2.5 billion
Total Assets	$2.63 billion
Residential Whole Loans (Fair Value)	$425.8 million
Aggregate Loan Financing Lines	Up to $1.1 billion
Drawn Loan Financing	$342.6 million

Secured Financing Capacity

Liquidity and the ability to fund asset purchases are critical. Angel Oak Mortgage, Inc. had approximately $707.4 million in undrawn loan financing capacity as of Q3 2025. This capacity is derived from existing financing lines, which aggregate up to $1.1 billion, with $342.6 million drawn at that time. To bolster this, following the quarter end, on October 6, 2025, the company executed a new $200.0 million repurchase facility with a global investment bank. The recent AOMT 2025-10 securitization, valued at approximately $274.3 million, also helped release cash for redeployment.

Proprietary Sourcing Platform and Intellectual Property

The origination engine is key to feeding the investment pipeline. The affiliated Angel Oak Mortgage Lending origination channel serves as the proprietary sourcing platform. This channel feeds the company's focus on non-QM assets. The intellectual property here is embedded in the underwriting models used to manage credit risk for these Non-QM loans. The company's focus on this segment is evident in its portfolio composition, with 40% of loans made to bank statement borrowers and 36% being investor loans as of Q3 2025.

External Management Expertise

The strategic direction and credit oversight come from outside the REIT structure. The specialized credit management team from Angel Oak Capital Advisors provides this external management expertise. This affiliate is noted as a leading alternative credit manager with market leadership in mortgage credit, covering asset management, lending, and capital markets. The team's focus is on generating attractive risk-adjusted returns across interest rate and credit cycles.

The platform's operational efficiency is also a resource, as demonstrated by expense management. Excluding noncash stock compensation and securitization costs, operating expenses for Q3 2025 were $2.8 million, a 13% decrease compared to Q3 2024.

• GAAP Book Value per share as of September 30, 2025: $10.60.
• Q3 2025 GAAP Net Income: $11.4 million.
• Q3 2025 Net Interest Income: $10.2 million.
• Total portfolio 90-plus days delinquent rate as of Q3 2025: 2.2%.

Finance: draft 13-week cash view by Friday.

Angel Oak Mortgage, Inc. (AOMR) - Canvas Business Model: Value Propositions

You're looking at the core value Angel Oak Mortgage, Inc. (AOMR) delivers to its various stakeholders, grounded in its late 2025 operational data. This isn't about what the company hopes to do; it's about the hard numbers from the third quarter and October 2025.

Access to Non-QM Credit: Angel Oak Mortgage, Inc. provides financing to creditworthy borrowers who don't fit standard agency guidelines. This is evidenced by the composition of the loans they originate and securitize. For instance, in the AOMT 2025-10 deal, the collateral pool reflected a focus on these specific segments.

Borrower/Loan Segment	Portfolio/Securitization Detail (as of Q3 2025 or AOMT 2025-10)	Financial Metric
Bank Statement Borrowers	40% of residential whole loans portfolio	Loan Segment Percentage
Investor Loans	36% of residential whole loans portfolio	Loan Segment Percentage
Investor Loans (AOMT 2025-10)	45.66% by pool balance	Collateral Composition
New Loan Purchases (Q3 2025)	$237.6 million purchased	Origination Volume
Whole Loan Portfolio Coupon	Weighted average coupon of 7.98%	Yield

The company purchased $237.6 million of newly-originated non-QM residential mortgage loans and HELOCs during the third quarter of 2025. The non-QM portion of the whole loan portfolio carried a weighted average coupon of 7.37% as of the end of the quarter.

Attractive Risk-Adjusted Returns: The objective for stockholders is realized through earnings and book value appreciation. The company delivered a GAAP diluted earnings per share of $0.46 for the third quarter of 2025. Furthermore, the GAAP book value per share stood at $10.60 as of September 30, 2025, which was a 2.2% increase from the previous quarter. The economic book value per share was $12.72 at the same date.

Efficient Securitization: Angel Oak Mortgage, Inc. demonstrates its ability to efficiently convert its loan assets into cash flow through securitization. A prime example is the AOMT 2025-10 transaction, which was executed in October 2025. The company acted as the sole contributor of loans in this deal. The scheduled unpaid principal balance of this securitization was approximately $274.3 million. The proceeds were used to repay outstanding debt of approximately $237.4 million, releasing $22.1 million of cash for new loan purchases and operational purposes.

Dividend Income: A direct return to stockholders is the declared dividend. Angel Oak Mortgage, Inc. declared a common dividend of $0.32 per share in Q3 2025, payable on November 26, 2025, to shareholders of record as of November 18, 2025. This is part of a consistent payout structure, with four payments per year expected.

The net interest income for the third quarter of 2025 was $10.2 million, representing a 13% increase versus Q3 2024 net interest income of $9.0 million.

Angel Oak Mortgage, Inc. (AOMR) - Canvas Business Model: Customer Relationships

You're looking at how Angel Oak Mortgage, Inc. (AOMR) manages its connections with the various groups that keep its business running, from the people who own the stock to the institutions that fund the loans. It's less about a traditional retail customer and more about a network of financial counterparties and partners.

Dedicated Investor Relations

The relationship with public stockholders and institutional investors centers on transparency regarding performance and capital returns. Angel Oak Mortgage REIT, Inc. declared a dividend of $0.32 per share of common stock, which was scheduled to be paid on November 26, 2025, to stockholders of record as of November 18, 2025. As of September 30, 2025, the GAAP book value per share stood at $10.60, while the economic book value was $12.72 per share. The company's market capitalization as of November 26, 2025, was $0.21B. The forward dividend rate is listed at $1.28 annually.

Key metrics for investor assessment as of late 2025 include:

• GAAP Net Income (Q3 2025): $11.4 million
• Net Interest Income (9 months ended 9/30/2025): $30.2 million
• Target Assets (as of 9/30/2025): $2.5 billion
• Weighted Average Interest Rate on Residential Whole Loans (as of 9/30/2025): 7.98%

Transactional: Relationship with Capital Providers

The relationship with capital providers is highly transactional, focused on securing financing lines and executing securitizations to fund the acquisition of non-qualified mortgage (non-QM) loans. This involves negotiating terms on repurchase facilities and debt offerings.

Here's a look at the financing structure as of late 2025:

Financing Metric	Value as of September 30, 2025	Context/Event
Aggregate Borrowing Capacity (Loan Financing Lines)	Up to $1.1 billion	Three existing loan financing lines
Drawn Amount on Financing Lines	Approximately $342.6 million	Leaving capacity of approximately $707.4 million
New Repurchase Facility Added	$200.0 million	Entered into on October 6, 2025, with a global investment bank
Recourse Debt to Equity Ratio	Approximately 1.9x	As of September 30, 2025
Senior Notes Issued (May 2025)	$42.5 million aggregate principal amount	9.750% Senior Notes due 2030, yielding net proceeds of $40.6 million

Furthermore, the terms of these relationships are actively managed. For instance, on October 10, 2025, Angel Oak Mortgage REIT, Inc. amended a loan financing facility with Global Investment Bank 2, reducing the interest rate pricing spread from a range of 1.75%-3.35% to 1.65%-2.40%.

Indirect Servicing

Angel Oak Mortgage, Inc. relies on third parties for the day-to-day servicing of the loans it holds or securitizes. This is evident in the structure of its securitizations. The company's operational strengths include active servicer oversight processes.

The use of third parties for quality assurance is explicit:

• Independent vendor used for post-funding Quality Control (QC) reviews for at least 10% of originated loans.
• Third-party due diligence providers reviewed 100% of the loans in the AOMT 2025-10 pool.
• The AOMT 2025-R1 pool included loans previously securitized in transactions like AOMT 2019-2 and AOMT 2019-4.

The company also uses third-party tools to verify borrower and loan information, supporting data integrity in the overall process.

Automated/Digital

For its origination partners, the relationship is facilitated through digital channels, specifically broker portals linked to the affiliated lending platform. While specific transaction volume through these portals isn't public, the focus on technology is clear in the broader operational context.

The company's approach involves digital infrastructure to support its core business:

• Continuous focus on automation improvements, with recent projects targeting optimization and data integrity.
• Use of third-party tools to verify borrower and loan information.

The platform is centered on non-QM loan aggregation and securitization, meaning the digital relationship with brokers is key to feeding the asset pipeline. For example, the AOMT 2025-10 securitization was backed by a pool with a scheduled unpaid principal balance of approximately $274.3 million.

Angel Oak Mortgage, Inc. (AOMR) - Canvas Business Model: Channels

You're looking at how Angel Oak Mortgage, Inc. (AOMR) gets its assets and capital to the market, which is really the engine of a mortgage REIT. It's a multi-pronged approach, blending proprietary origination with public market execution. Here's the quick math on how they move product and raise funds as of late 2025.

Affiliated Wholesale Channel

The primary feed for Angel Oak Mortgage, Inc.'s assets comes through its affiliated wholesale channel, specifically via Angel Oak Mortgage Lending. This is where they source the non-qualified (Non-QM) loans that form the core of their investment portfolio. You see this activity reflected in their quarterly purchases. For instance, in the third quarter of 2025, the company purchased $237.6 million worth of newly originated Non-QM residential mortgage loans and Home Equity Lines of Credit (HELOCs). Management has signaled an intent to keep this flow steady, targeting a quarterly loan purchase volume between $200 million and $300 million. This channel is key because it feeds the assets they eventually securitize or hold on balance sheet.

• Q3 2025 newly originated Non-QM/HELOC purchases: $237.6 million.
• Q2 2025 Non-QM/HELOC purchases: $146.6 million.
• Targeted quarterly purchase volume range: $200 million to $300 million.

Securitization Market

Moving those loans off the balance sheet and into the hands of institutional investors happens through the Residential Mortgage-Backed Securities (RMBS) market. Angel Oak Mortgage, Inc. actively issues these securities under the AOMT program. They were busy in the third and fourth quarters of 2025 executing these transactions. In October 2025, they issued AOMT 2025-10, which had a scheduled unpaid principal balance (UPB) of approximately $274.3 million. Just prior to that, in September 2025, they executed AOMT 2025-R1, which involved re-securitizing loans from older trusts and resulted in $19.4 million of cash released. Earlier in the year, they were the sole contributor to AOMT 2025-4 in April, a $284.3 million UPB deal.

The securitization activity is clearly a major component of their asset management, as evidenced by the scale of these deals. They use the proceeds to pay down debt and free up cash for new acquisitions. For example, the AOMT 2025-10 proceeds were used to repay approximately $237.4 million of outstanding debt.

Securitization Event	Date	Approximate UPB	Angel Oak Mortgage, Inc. Role/Impact
AOMT 2025-10	October 2025	$274.3 million	Sole contributor of loans; used proceeds to repay $237.4 million in debt.
AOMT 2025-R1	September 2025	$228.13 million (Collateral Cutoff)	Re-securitization of seasoned loans; released $19.4 million in cash.
AOMT 2025-6	May 2025	$349.7 million (Total)	Contributed loans with a scheduled principal balance of $87.2 million.
AOMT 2025-4	April 2025	$284.3 million	Sole participant in the securitization.

Public Capital Markets

Angel Oak Mortgage, Inc. accesses public capital markets both for equity and debt financing to fund its operations and asset purchases. The common stock trades on the New York Stock Exchange (NYSE) under the ticker AOMR. As of late November 2025, the market capitalization hovered around $207.28 million or $214.26 million, with 24,914,035 shares outstanding as of September 30, 2025. The company also issues senior notes, such as the 9.750% Senior Notes due 2030, trading under the symbol AOMD. This specific offering in May 2025 raised an aggregate principal amount of $40,000,000, yielding net proceeds of approximately $40.6 million. The company declared a quarterly dividend of $0.32 per share, with a forward annual payout of $1.28.

The overall asset base supporting these channels was reported at $2.5 billion in target assets as of September 30, 2025.

Secondary Market

The secondary market is used opportunistically for asset acquisition when pricing is right, which complements the flow from the affiliated originator. The intent to use the secondary market was explicitly stated when the company planned the use of proceeds from its May 2025 Senior Notes offering. Furthermore, the September 2025 re-securitization activity, where they called and retired older trusts (AOMT 2019-2 and AOMT 2019-4) to create AOMT 2025-R1, shows an active management of existing assets, which is a form of secondary market engagement to recycle capital into higher-yielding assets.

The company's residential mortgage whole loans portfolio, held on the balance sheet as of September 30, 2025, had a fair value of $425.8 million.

Angel Oak Mortgage, Inc. (AOMR) - Canvas Business Model: Customer Segments

You're looking at the core clientele Angel Oak Mortgage, Inc. (AOMR) serves as of late 2025, which is heavily skewed toward the non-qualified mortgage (non-QM) space, a segment where traditional underwriting falls short.

Institutional Investors/Stockholders represent a key segment, as AOMR operates as a real estate finance company focused on acquiring and investing in first lien non-QM loans. As of September 30, 2025, the company had 24,914,035 shares of common stock issued and outstanding. These investors are looking for the yield generated by the portfolio, which had a weighted average coupon of 7.98% on its residential whole loans as of the end of Q3 2025. The GAAP book value per share stood at $10.60 as of September 30, 2025.

The primary focus is on the borrowers themselves, who fall into distinct categories based on their financial profiles. The company's strategy involves deploying capital into high-quality income-accretive opportunities, evidenced by the $237.6 million of newly-originated non-QM residential mortgage loans, second lien mortgage loans, and home equity lines of credit (HELOCs) purchased during the quarter ended September 30, 2025. The weighted average credit score for the residential loan portfolio at origination was 757 as of Q3 2025.

Here is the breakdown of the residential loan portfolio by borrower type as of the third quarter of 2025:

Customer Segment Type	Portfolio Percentage (Q3 2025)	Key Product/Focus
Bank Statement Borrowers	40%	Non-traditional income verification
Investor Loans	36%	Real Estate Investors (including DSCR products)
HELOCs and Closed-End Seconds	17%	Securitized second lien/equity products
Full Documentation and Other Loans	7%	Traditional or miscellaneous borrowers

The segment categorized as Real Estate Investors, making up 36% of the portfolio, is served through investor loans, which are a core part of the non-QM strategy. You see the company actively managing this by calling and retiring legacy securitizations to re-allocate capital toward higher-yielding investments.

The Non-QM Borrowers segment is the largest single component, represented by the 40% attributed to bank statement borrowers, who typically have self-employment or 1099 income structures. These borrowers are accessing credit with a weighted average combined loan-to-value ratio (CLTV) at origination of 69.1% across the residential loan portfolio.

The data does not explicitly detail the volume or percentage attributed to Foreign Nationals as a distinct segment in the publicly released Q3 2025 portfolio statistics.

• Target assets totaled $2.5 billion as of September 30, 2025.
• The company's recourse debt to equity ratio was approximately 1.9x as of September 30, 2025.
• The weighted average coupon on purchased non-QM residential mortgage loans and HELOCs in Q3 2025 was 7.74%.

Finance: draft the capital deployment plan for Q1 2026 based on the $22.1 million of cash released from the AOMT 2025-10 securitization by next Tuesday.

Angel Oak Mortgage, Inc. (AOMR) - Canvas Business Model: Cost Structure

You're looking at the expenses that drive Angel Oak Mortgage, Inc.'s operations as of late 2025. For a mortgage REIT, the cost of money-interest expense-is almost always the dominant factor, but the operational costs around creating and managing assets are also critical to watch.

Interest Expense: Major Cost

Interest expense is your single largest cost component, directly tied to the financing used to acquire the loan portfolio, including repurchase agreements and outstanding notes. For the third quarter of 2025, the total interest expense reached $26.5 million. This was a significant jump, representing a 44% increase compared to the $18.4 million reported in Q3 2024, reflecting higher financing costs across the funding sources used by Angel Oak Mortgage, Inc.

Operating Expenses

Angel Oak Mortgage, Inc. has been focused on cost rationalization, showing positive trends in its core operating overhead. For the third quarter of 2025, total reported operating expenses were $3.2 million. However, when you strip out noncash items like stock compensation expense and securitization costs, the core operating expense figure was $2.8 million. Year-to-date through the first nine months of 2025, the total operating expenses were $11.3 million, while the adjusted figure (excluding those items) was $8.5 million.

Here's a quick look at the Q3 2025 operating expense breakdown:

Expense Category Component	Q3 2025 Amount (Millions USD)
Total Reported Operating Expenses	$3.2
Operating Expenses Excluding Noncash/Securitization Costs	$2.8
Implied Cost for Stock Comp and Securitization Costs	$0.4

Management Fees

Angel Oak Mortgage, Inc. is externally managed and advised by an affiliate of Angel Oak Capital Advisors, LLC. This relationship involves management fees paid to the external manager for overseeing the asset management, lending, and capital markets activities. The specific dollar amount for Q3 2025 management fees is not explicitly itemized separately from the general operating expenses in the latest reports, but the fee structure is a key part of the cost base.

Securitization Costs and Underwriting/Issuance Costs

Costs associated with capital markets activity are substantial. This includes expenses for issuing new Residential Mortgage-Backed Securities (RMBS) deals and fees for public debt offerings. The May 2025 issuance of the 9.750% Senior Notes due 2030, totaling $40.0 million in principal, resulted in estimated issuance costs of approximately $1.8 million, based on reported net proceeds of $38.2 million. Furthermore, the servicing component of securitization is a recurring cost; for the AOMT 2025-10 deal, the weighted average gross administration fee rate was approximately 43.1 basis points.

The key cost drivers for Angel Oak Mortgage, Inc. are summarized below:

• Interest Expense (Q3 2025): $26.5 million.
• Total Operating Expenses (Q3 2025): $3.2 million.
• 9.750% Senior Notes Principal Issued (May 2025): $40.0 million.
• Estimated Senior Notes Underwriting Cost: $1.8 million.
• AOMT 2025-10 Securitization Size: $274.3 million.
• Weighted Average Servicing Fee Rate (AOMT 2025-10): 43.1 bps.

Angel Oak Mortgage, Inc. (AOMR) - Canvas Business Model: Revenue Streams

You're looking at the core ways Angel Oak Mortgage, Inc. (AOMR) brings in money, which is heavily reliant on its mortgage asset portfolio. The primary driver here is the spread between what the assets earn and what the funding costs. This is the essence of their business.

Net Interest Income (NII): This is the spread between interest earned on assets and interest paid on debt. It's the key profitability metric for a finance company like Angel Oak Mortgage, Inc. (AOMR).

• Net interest income for the nine months ended September 30, 2025, was $30.2 million.
• For the third quarter of 2025 specifically, NII reached $10.2 million, marking a 12.9% increase versus Q3 2024 NII of $9.0 million.
• This nine-month NII figure represents an 11.6% increase compared to the $27.1 million reported for the nine months ended September 30, 2024.

Interest Income: This is the gross revenue generated from the interest-earning assets Angel Oak Mortgage, Inc. (AOMR) holds. It's a direct reflection of the size and yield of their portfolio.

• Total interest income was $104.6 million for the first nine months of 2025.
• In the third quarter of 2025 alone, total interest income surged to $36.7 million, a 34% increase from $27.4 million in Q3 2024.
• As of September 30, 2025, the weighted average interest rate of the residential whole loans portfolio was 7.98%.

The components driving this interest income are detailed in the asset structure. You can see how the income breaks down across the portfolio.

Revenue Component Detail	Q3 2025 Amount	Year-over-Year Change (vs Q3 2024)
Total Interest Income	$36.7 million	34% increase
Interest Income from Residential Loans in Securitization Trusts	$26.5 million	Increase from $18.6 million
Net Interest Income (NII)	$10.2 million	12.9% increase

Gains/Losses on Investments & Investment Income: Beyond the core NII, Angel Oak Mortgage, Inc. (AOMR) realizes income from managing its asset base, including sales and fair value adjustments. This is where the impact of strategic asset redeployment shows up.

• For the third quarter of 2025, GAAP net income was $11.4 million, or $0.46 per diluted share.
• Distributable earnings for Q3 2025 were $0.5 million, or $0.02 per diluted share.
• The difference between GAAP net income and distributable earnings in Q3 2025 was driven by impacts like $4.3 million of unrealized gains on residential loan portfolios.
• The company declared a dividend of $0.32 per share, payable on November 26, 2025.

The management team is actively working to enhance these streams. For example, subsequent to September 30, 2025, in October 2025, they issued AOMT 2025-10, an approximately $274.3 million scheduled unpaid principal balance securitization. They used proceeds to repay about $237.4 million of debt, releasing $22.1 million in cash for new loan purchases and operational purposes. If onboarding takes 14+ days, churn risk rises, but here, capital deployment is the focus. The total target assets stood at $2.5 billion as of September 30, 2025.

The recourse debt to equity ratio was approximately 1.9x as of September 30, 2025, but factoring in the October securitization, the estimate was closer to 1x. This is a key element of managing the cost side of the NII equation, which is defintely important for profitability.

Finance: draft 13-week cash view by Friday.