Angel Oak Mortgage, Inc. (AOMR): Marketing Mix Analysis [11-2024 Updated]

In 2024, Angel Oak Mortgage, Inc. (AOMR) continues to carve its niche in the competitive mortgage landscape with a focused marketing mix that drives growth and stability. With a strong emphasis on non-QM loans and a strategic approach to securitization, AOMR is well-positioned to cater to credit-sensitive borrowers. Discover how their innovative product offerings, strategic placement, targeted promotion, and competitive pricing strategies are shaping their success in the market.

Angel Oak Mortgage, Inc. (AOMR) - Marketing Mix: Product

Focus on acquiring and investing in first lien non-QM loans

Angel Oak Mortgage, Inc. primarily focuses on acquiring and investing in first lien non-qualified mortgage (non-QM) loans. The company emphasizes credit-sensitive investments, catering to borrowers who do not fit traditional lending criteria.

Target assets include residential mortgage loans and RMBS

The target assets for Angel Oak include residential mortgage loans and residential mortgage-backed securities (RMBS). As of September 30, 2024, the company's portfolio consisted of approximately $2.2 billion in residential mortgage loans, RMBS, and other target assets.

Emphasis on credit-sensitive investments

Angel Oak’s investment strategy places a strong emphasis on credit-sensitive investments. As of September 30, 2024, the portfolio's weighted average FICO score at loan origination was 754. This focus enables the company to target higher-quality borrowers while managing associated risks effectively.

Securitization of residential mortgage loans enhances liquidity

Securitization plays a crucial role in enhancing liquidity for Angel Oak. The company has participated in various securitization transactions, including the issuance of AOMT 2024-4, which was approximately $299.8 million backed by a pool of residential mortgage loans. As of September 30, 2024, the fair value of residential mortgage loans in securitization trusts was approximately $1.45 billion.

Average interest rates on loans range from 3.63% to 11.88%

The average interest rates on the loans within Angel Oak’s portfolio range from 3.63% to 11.88%. This range reflects the diverse risk profiles of the loans and the varying credit quality of the borrowers.

Portfolio weighted average FICO score at loan origination is 754

As previously mentioned, the portfolio’s weighted average FICO score at loan origination is 754. This high credit score indicates a preference for quality borrowers, which is a critical aspect of the company’s investment strategy.

Invests in both newly-originated and secondary market loans

Angel Oak invests in both newly-originated and secondary market loans. During the quarter ended September 30, 2024, the company purchased $264.8 million of newly-originated, current market coupon non-QM residential mortgage loans, with a weighted average coupon of 7.74%. This dual investment approach allows for flexibility and responsiveness to market conditions.

Angel Oak Mortgage, Inc. (AOMR) - Marketing Mix: Place

Operates primarily through a national wholesale channel

Angel Oak Mortgage, Inc. (AOMR) predominantly utilizes a national wholesale distribution channel. This approach enables the company to reach a wide array of mortgage brokers and lenders across the country, enhancing its market penetration and customer accessibility.

Leverages a proprietary mortgage lending platform for originations

AOMR employs a proprietary mortgage lending platform designed for efficient loan originations. This platform facilitates streamlined processing, enhancing the customer experience while improving operational efficiency. As of September 30, 2024, the total aggregate unpaid principal balance of residential whole loans sold was approximately $1.51 billion.

Engages in securitization transactions to manage asset exposure

The company actively participates in securitization transactions to mitigate asset exposure. Notably, during the nine months ended September 30, 2024, AOMR issued and sold bonds with a current face value of approximately $274.8 million. This strategy not only provides liquidity but also diversifies funding sources.

Geographic diversification in loan portfolio mitigates risk

AOMR’s loan portfolio benefits from geographic diversification, which helps in risk mitigation. As of September 30, 2024, the fair value of residential mortgage loans in securitization trusts amounted to approximately $1.45 billion. This diversification strategy protects the company from regional economic downturns by spreading risk across various markets.

Utilizes a variety of financing facilities for operational flexibility

To maintain operational flexibility, AOMR utilizes a range of financing facilities. As of September 30, 2024, the company had non-recourse securitization obligations totaling approximately $1.37 billion. These financial arrangements provide the necessary capital to support ongoing operations and growth initiatives.

Angel Oak Mortgage, Inc. (AOMR) - Marketing Mix: Promotion

Maintains communication through investor relations and public disclosures.

As of September 30, 2024, Angel Oak Mortgage had total stockholders' equity of approximately $265.1 million. The company actively engages with investors through regular updates, which include disclosures of financial performance and strategic initiatives. The last earnings report indicated a net income allocable to common stockholders of $31.2 million for the three months ended September 30, 2024.

Engages in public offerings to raise capital for growth.

On July 25, 2024, Angel Oak Mortgage completed a public offering, issuing $50 million in aggregate principal amount of 9.500% Senior Notes due 2029. Additionally, the company launched an At Market Issuance Sales Agreement to sell up to $75 million in common stock, from which it raised approximately $2.3 million by issuing 188,456 shares.

Promotes investment strategy focused on risk-adjusted returns.

Angel Oak Mortgage emphasizes a strategy targeting non-QM (Qualified Mortgage) borrowers, which is reflected in its portfolio composition as of September 30, 2024. The company reported a weighted average coupon of 7.74% on newly-originated non-QM residential mortgage loans totaling $264.8 million. The weighted average loan-to-value (LTV) ratio was 70.0%, with a weighted average credit score of 754.

Utilizes marketing strategies to attract non-QM borrowers.

In the most recent quarter, Angel Oak Mortgage participated in securitizations, including AOMT 2024-4, which had an approximate scheduled unpaid principal balance of $299.8 million. The company has been actively marketing its products to attract non-QM borrowers, leveraging the growth in this segment of the mortgage market.

Highlights strong performance metrics in earnings reports.

The earnings report for the third quarter of 2024 showed a basic earnings per share of $1.31, compared to $0.33 for the same period in 2023. The net interest income for the quarter was reported at $9 million, marking an increase from $7.4 million year-over-year. Additionally, the company reported total comprehensive income of $33.9 million for the three months ended September 30, 2024.

Angel Oak Mortgage, Inc. (AOMR) - Marketing Mix: Price

Competitive interest rates for non-QM loans in the market

The weighted average coupon of newly-originated, current market coupon non-QM residential mortgage loans purchased by Angel Oak Mortgage in the third quarter of 2024 was 7.74%, with a weighted average loan-to-value (LTV) ratio of 70.0% and a weighted average credit score of 754.

Securitization proceeds used for debt repayment and new investments

In October 2024, Angel Oak Mortgage executed the AOMT 2024-10 securitization, issuing approximately $316.8 million in face value of bonds. The proceeds were utilized to repay outstanding debt of approximately $260.4 million, with retained cash of $39.4 million for new loan purchases and operational purposes.

Issued 9.5% Senior Notes to finance operations and growth

On July 25, 2024, Angel Oak Mortgage closed an underwritten public offering, issuing $50 million in aggregate principal amount of its 9.500% Senior Notes due 2029. These Notes bear interest at a rate of 9.500% per annum, payable quarterly.

Pricing strategies adjusted based on market conditions and asset valuations

The company has continuously evaluated its lender base and made amendments to its loan financing facilities. For instance, in October 2024, it amended its facility with Global Investment Bank 2 to reduce the interest rate pricing spread to a range from 1.75% to 3.35%.

Focus on maintaining a strong net interest margin through effective asset management

As of September 30, 2024, Angel Oak Mortgage reported a net interest income of $9.0 million for the quarter, up from $7.4 million in the same quarter of 2023, primarily due to higher net interest income from its residential mortgage loans portfolio.

In summary, Angel Oak Mortgage, Inc. (AOMR) exemplifies a strategic approach within the competitive landscape of the mortgage market through its focused product offerings and innovative marketing mix. By specializing in first lien non-QM loans and leveraging a national wholesale channel, AOMR enhances its operational efficiency and risk management. The company’s promotional efforts highlight its commitment to risk-adjusted returns, while its competitive pricing strategies ensure its position remains strong amidst market fluctuations. This comprehensive strategy not only fosters growth but also attracts a diverse borrower base, positioning AOMR for continued success in 2024.

Updated on 16 Nov 2024

Resources:

1. Angel Oak Mortgage, Inc. (AOMR) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Angel Oak Mortgage, Inc. (AOMR)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Angel Oak Mortgage, Inc. (AOMR)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.