AG Mortgage Investment Trust Inc. Reports Full Year and Fourth Quarter 2023 Results
Book Value per Share: Decreased to $10.46 as of December 31, 2023, from $11.39 as of December 31, 2022.
Adjusted Book Value per Share: Decreased to $10.20 as of December 31, 2023, from $11.03 as of December 31, 2022.
Net Income: Reported $1.68 per diluted common share for the full year 2023.
Earnings Available for Distribution (EAD): $0.39 per diluted common share for the full year 2023.
Dividends: Declared $0.72 per common share in dividends for the full year 2023.
Investment Portfolio: Grew to $5.9 billion as of December 31, 2023, a 25% increase following the acquisition of Western Asset Mortgage Capital Corporation.
Liquidity: Total liquidity stood at $112.3 million as of December 31, 2023.
On February 22, 2024, AG Mortgage Investment Trust Inc (NYSE:MITT) released its 8-K filing, detailing its financial results for the full year and fourth quarter ended December 31, 2023. The year was marked by strategic moves, including a significant merger and acquisition (M&A) transaction that increased MITT's market capitalization by nearly 50%. Despite these efforts, the company faced a decrease in book value per share, reflecting the challenges in the real estate investment trust (REIT) sector.
AG Mortgage Investment Trust Inc is a REIT that specializes in residential mortgage assets, real estate-related securities, and financial assets. The company's focus on residential mortgage-backed securities (RMBS) issued or guaranteed by a government-sponsored enterprise is a critical component of its investment strategy.
Financial Performance and Strategic Developments
The past year was transformational for MITT, as highlighted by CEO TJ Durkin. The company completed the acquisition of Western Asset Mortgage Capital Corporation, which increased its market capitalization and investment portfolio significantly. This strategic move is expected to yield annual expense savings of $5 million to $7 million and be accretive to earnings in 2024. The acquisition also led to a more independent and strengthened board of directors.
MITT's investment portfolio expanded to $5.9 billion, with the company purchasing $1.2 billion of Non-Agency and Agency-Eligible Loans during 2023. The financing profile included $5.6 billion of financing, with a mix of non-recourse and recourse financing. The company's GAAP Leverage Ratio was 10.5x, and the Economic Leverage Ratio stood at 1.5x as of December 31, 2023.
Despite these strategic initiatives, MITT faced a decrease in book value per share, which dropped from $11.39 to $10.46 year-over-year. Adjusted book value per share also saw a decline from $11.03 to $10.20. The company reported net income of $1.68 per diluted common share for the full year and $0.39 per diluted common share for Earnings Available for Distribution (EAD).
Challenges and Outlook
While MITT has made significant strides in repositioning its equity and de-risking its leverage exposure, the decrease in book value and adjusted book value per share indicates the challenges faced in the current economic environment. The company's performance is crucial as it reflects the health of the residential mortgage market and the effectiveness of MITT's investment strategies.
Looking ahead, MITT remains confident in its ability to build on the momentum from the past year. The focus will be on driving earnings power and enhancing general and administrative (G&A) efficiencies to position MITT as a more scaled and profitable investment vehicle for stockholders.
For a detailed analysis of AG Mortgage Investment Trust Inc's financials and strategic outlook, readers can access the full 8-K filing.
Explore the complete 8-K earnings release (here) from AG Mortgage Investment Trust Inc for further details.
This article first appeared on GuruFocus.
