Company: AOMN
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001766478-25-000080
Chunk: 37

Company: Angel Oak Mortgage REIT, Inc.
Filing Date: 2025-08-06
Form: 10-Q
Item: Item 1
Chunk 37
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 purposes commencing with our taxable year ended December 31, 2019. Commencing with our taxable year ended December 31, 2019, we believe that we have been organized and operated, and we intend to continue to operate in conformity with the requirements for qualification and taxation as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”). Our qualification as a REIT, and maintenance of such qualification, depends on our ability to meet, on a continuing basis, various complex requirements under the Code relating to, among other things, the sources of our gross income, the composition and values of our assets, our distribution levels, and the concentration of ownership of our stock. We also intend to operate our business in a manner that will allow us to maintain our exclusion from regulation as an investment company under the Investment Company Act. Our common stock commenced trading on the New York Stock Exchange on June 17, 2021.

We expect to derive our returns primarily from the difference between the interest we earn on loans we invest in and our cost of capital, as well as the returns from bonds, including risk retention securities, that are retained after securitizing the underlying loan collateral.

Trends and Recent Developments

Overall macroeconomic environment and its effect on us

The second quarter of 2025 began with “Liberation Day”, on which significant tariff increases were announced on goods imported into the United States.  This announcement sparked sharp selloffs in both equity and fixed income markets, as the potential increases in the costs of many goods drove renewed concern around increases in inflation. Temporary pauses to the tariff increases were announced shortly after Liberation Day, and the extent to which the originally announced tariffs will be enacted remains uncertain. The selloff associated with the original Liberation Day announcement moderated throughout the remainder of the second quarter, and equity markets finished the quarter in positive territory as of June 30, 2025 compared to March 31, 2025. Despite the uncertainty, securitization markets remained stable and constructive throughout the quarter. Inflation slowed in April and May 2025 before increasing from 2.4% in May to 2.7% in June, likely reflecting the impact of announced tariffs. The Federal Reserve Bank (“Fed”) maintained its wait-and-see approach and held interest rates steady at 4.25 - 4.50% through the second quarter of 2025. Current projections are for the Fed to begin cutting interest rates in 2025