Angel Oak Mortgage REIT, Inc. (NYSE:AOMR) has entered into a Sales Agreement with several financial institutions to initiate an "at the market" equity offering program. Under this agreement, the company may sell common stock up to a total gross sales price of $75 million.
The Sales Agreement, dated August 8, 2024, involves B. Riley Securities, Inc., BTIG, LLC, Piper Sandler & Co., RBC Capital Markets, LLC, and Wells Fargo Securities, LLC. These entities will act as sales agents or principals in transactions. The offering is intended to be made on the New York Stock Exchange or through other methods consistent with federal laws and NYSE rules.
The sales agents will receive a commission of 2.0% of the gross sales price for each share sold. The agreement allows for sales to be made through ordinary brokerage transactions, to or through market makers, or on the NYSE, among other methods. Angel Oak Mortgage REIT retains the flexibility to negotiate transactions with the agents directly.
The shares offered will be issued pursuant to the company's existing shelf registration statement and an accompanying prospectus supplement filed with the Securities and Exchange Commission.
In other recent news, Angel Oak Mortgage has been the recipient of a series of significant financial developments. The company reported a 26% year-over-year increase in net interest income for the first quarter of 2024, supported by a $300 million securitization deal.
Additionally, Angel Oak Mortgage successfully closed a $50 million offering of 9.500% Senior Notes due 2029, with the proceeds anticipated to be used for general corporate purposes, including investments in mortgage-related assets.
The company also extended its loan financing facility with "Multinational Bank 1" through December 2024, a strategic move that comes with a reduced interest rate pricing spread. This could potentially lower borrowing costs and ensure continued access to capital for its operations.
In terms of growth, Angel Oak Mortgage aims to acquire $150 million to $200 million in loans in the second quarter and plans to issue another securitization in the third quarter. These are part of the company's strategic approach to portfolio growth and capital management.
BTIG recently initiated coverage on Angel Oak Mortgage with a Buy rating, citing potential for significant total returns and a stable dividend outlook. The firm's positive outlook is further reinforced by the expectation of valuation improvements and potential net asset value growth, should interest rate volatility decrease. BTIG's analysis underlines Angel Oak Mortgage's strategic positioning in the non-qualified mortgage lending space and its potential to deliver substantial returns to investors.
InvestingPro Insights
Angel Oak Mortgage REIT, Inc. (NYSE:AOMR) is navigating the financial landscape with strategic capital raising initiatives, as reflected by their recent "at the market" equity offering program. Investors monitoring AOMR may find the following InvestingPro data and tips insightful in understanding the company's current financial position and market performance.
AOMR is currently trading at an attractive earnings multiple with a P/E ratio of 6.19, which is lower than the adjusted P/E ratio for the last twelve months as of Q2 2024, indicating a potentially undervalued stock. The company has also demonstrated a robust revenue growth of 202.62% over the last twelve months as of Q2 2024, showcasing significant expansion in its financial capacity. Furthermore, the generous dividend yield of 10.35%, as of the latest data, is a testament to AOMR's commitment to returning value to its shareholders.
InvestingPro Tips highlight that while analysts have revised their earnings downwards for the upcoming period and anticipate a sales decline in the current year, AOMR still pays a significant dividend. Additionally, the company's liquid assets exceed its short-term obligations, which bodes well for its financial health. For those looking for more detailed analysis and additional tips, InvestingPro offers a comprehensive list of insights, including 6 more tips for AOMR, available on their platform.
As of the last closing, AOMR's stock price was $12.37, approaching its 52-week high, and has experienced a large price uptick over the last six months, reflecting a 25.87% total return. These metrics, combined with the upcoming earnings date on November 5, 2024, may influence investor decisions in the context of the company's equity offering program and overall investment strategy.
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