Company: AOMN
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001766478-25-000099
Chunk: 39

Company: Angel Oak Mortgage REIT, Inc.
Filing Date: 2025-11-06
Form: 10-Q
Item: Item 1
Chunk 39
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 meeting, bringing the current federal funds rate to 3.75% - 4.00%. The dovish approach was a welcome development for prospective homebuyers, as mortgage rates decreased in line with Fed rate expectations. Current projections are for two more interest rate cuts in 2025, though the recent government shutdown has cast uncertainty on the future rate path. Securitization markets, in particular, demonstrated resilience with robust activity and a continued tightening of execution spreads.

As expected, Treasury yields decreased across two, five, and ten-year terms in the third quarter of 2025. The two-year Treasury yield decreased by approximately 11 basis points since the end of the second quarter of 2025 to 3.62% at the end of the third quarter of 2025, the five-year Treasury yield decreased by approximately 6 basis points since the end of second quarter of 2025 to 3.75% at the end of the third quarter of 2025, and the ten-year Treasury yield decreased by approximately 8 basis points since the end of second quarter of 2025 to 4.15% at the end of the third quarter of 2025.

30 year fixed residential conforming mortgage rates decreased by 47 basis points over the course of the third quarter of 2025 to 6.30% as of the end of the third quarter of 2025 from 6.77% as of the end of the second quarter of 2025. These rates, alongside federal funds rate and Treasury yields, are key benchmarks for the valuation of our portfolio, and a decrease is generally expected to drive a corresponding positive impact to our newly originated asset pricing, consistent with what we observed in the third quarter of 2025. We observed an approximately 63 basis point increase through the end of the third quarter of 2025 versus the second quarter of 2025 in the weighted average price of our residential whole loans portfolio, inclusive of home equity lines of credit (“HELOCs”). This increase in valuation was accompanied by a 78 basis point increase in the third quarter in the weighted average price of our loans in securitization trusts portfolio versus the prior quarter. We expect to continue to purchase newly originated loans and HELOCs, which should continue to support overall portfolio valuations and securitization execution going forward.

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Our investment performance 

Net Interest Margin (“NIM”). We generated a 12.9% increase in net interest income in the third quarter of 2025