Executive Summary

Q2 2025 delivered mixed results: EAD per diluted share was $0.18, below consensus $0.23, while GAAP EPS was $(0.05) on a modest 2.4% book value decline to $10.39; the common dividend was raised 5% to $0.21 *.
The company expanded its vertically integrated model by acquiring an additional 21.4% stake in Arc Home, taking ownership to 66.0%; management expects the transaction to be accretive to EAD in 2026 with ~2% book value dilution .
Financing remained conservative: Economic Leverage Ratio fell to 1.3x (from 1.6x in Q1) with $89.7mm liquidity and largely term, non-mark-to-market securitized debt, helping absorb April spread volatility .
Near-term stock catalysts: dividend increase, Arc Home consolidation/accretion trajectory, continued programmatic securitization and home equity loan investment pipeline ($1.2bn UPB) .

What Went Well and What Went Wrong

What Went Well

Dividend increase underscores confidence in earnings power: common dividend raised 5% to $0.21 per share in Q2 2025 .
Strategic consolidation: ownership in Arc Home increased to 66.0%; management highlights enhanced collateral sourcing and accretion to EAD in 2026 with minimal (~2%) book value dilution .
Execution in securitizations and loan purchases: $331.4mm UPB of agency-eligible loans securitized in Q2; $301.3mm UPB of home equity loans securitized in July; Q2 loan purchases of $444.9mm fair value; investment pipeline of $1.2bn UPB .

What Went Wrong

Earnings vs estimates: EAD per diluted share of $0.18 missed Wall Street consensus ($0.23); revenue ($15.0mm) missed consensus ($21.0mm) amid April spread volatility and legacy commercial headwinds * *.
Book value compression: book value per share declined 2.4% QoQ to $10.39, yielding a quarterly economic ROE of (0.5)% .
Legacy WMC commercial loans continued to suppress EAD; hotel loans matured in May and remain on non-accrual, with resolution targeted by year-end .

Financial Results

EPS and Revenue vs Prior Periods and Estimates

Metric	Q2 2024	Q1 2025	Q2 2025
GAAP EPS (Diluted) ($)	$(0.02)	$0.21	$(0.05)
EAD per Diluted Share ($)	$0.21	$0.20	$0.18
Primary EPS Consensus Mean ($)*	—	$0.2009*	$0.2298*
Primary EPS Actual ($, S&P)*	—	$0.20*	$0.18*
Revenue Consensus Mean ($USD) *	—	$19,112,310*	$21,021,910*
Revenue Actual ($USD) *	—	$20,398,000*	$15,039,000*

Notes: Values with an asterisk were retrieved from S&P Global.

Observations: Q2 2025 EPS and revenue both missed consensus. Bolded in implications below.

Net Interest Income and Margin

Metric	Q2 2024	Q1 2025	Q2 2025
Net Interest Income ($USD Millions)	$16.38	$18.85	$17.75
Net Interest Margin (%)	0.7%	0.7%	0.6%

Segment Breakdown (Fair Value and Yield)

Segment	Q1 2025 FMV ($mm)	Q1 2025 Yield (%)	Q2 2025 FMV ($mm)	Q2 2025 Yield (%)
Securitized Non‑Agency Loans	$6,399.1	5.7%	$6,510.7	5.7%
Securitized RPL/NPL Loans	$143.2	6.0%	$138.3	6.0%
Home Equity Loans	$228.0	9.3%	$323.9	8.8%
Non‑Agency RMBS	$165.7	9.7%	$161.7	9.8%
Agency RMBS (IO)	$18.0	9.9%	$18.0	9.5%
Legacy WMC Commercial Loans	$65.5	9.8%	$64.9	3.0%
Legacy WMC CMBS	$54.3	17.2%	$56.2	16.8%

KPIs

KPI	Q2 2024	Q1 2025	Q2 2025
Book Value per Share ($)	$10.63	$10.65	$10.39
Investment Portfolio ($bn)	$6.9	$7.1	$7.3
Liquidity ($mm)	$180.2	$132.5	$89.7
GAAP Leverage Ratio (x)	12.2x	12.4x	12.8x
Economic Leverage Ratio (x)	2.5x	1.6x	1.3x
Common Dividend Declared ($/share)	$0.19	$0.20	$0.21

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance/Action	Change
Dividend per Common Share	Q2 2025	$0.20 (Q1’25)	$0.21	Raised
Arc Home Ownership & EAD Impact	2026	44.6% ownership as of Q1’25	Ownership increased to 66.0%; expected EAD accretion in 2026; ~2% BV dilution	Increased stake; accretive (longer‑dated)
Preferred Dividends (Series C)	Ongoing	Fixed‑to‑Floating switch known; SOFR + 6.476% effective 9/17/24	Continues at floating formula; update reiterated	Maintained

No formal quantitative guidance ranges for revenue, margins, OpEx, tax rate; management emphasized programmatic securitization and capital rotation instead .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024 and Q1 2025)	Current Period (Q2 2025)	Trend
Home Equity Loan strategy	Q4: Integrated HEL into mix, supportive of profitability ; Q1: Purchased $128mm HEL; co‑sponsored $492mm closed‑end seconds securitization; HEL pipeline building	Purchased $99.5mm HEL in Q2; securitized $301.3mm in July; $85mm equity allocated delivering mid‑to‑high‑teens ROEs	Strengthening deployment and securitization
Securitization markets/functioning	Q4: Programmatic execution, 6 deals in 2024 ; Q1: April volatility widened spreads 50–75 bps, markets reopened by late April	Q2: Strong execution gains partially offset mark‑to‑market losses from April; 5 YTD transactions in 2025	Resilient, spreads wider but functioning
Arc Home performance	Q4: Profitable in Dec; expected contribution improvement ; Q1: Breakeven; lock volumes +50% YoY; gain‑on‑sale margins up	Lock volume +23% QoQ; MITT increased ownership to 66%; EAD accretion expected in 2026	Improving and strategically integrated
Legacy WMC commercial resolution	Q4: May/Aug 2025 maturities; forbearance likely; payoffs expected 2025	Hotel loans matured in May; borrower pursuing sales; targeting resolution by year‑end; retail loan current; 9% unlevered yield	Progress toward exit, still a headwind
Leverage and financing posture	Q4: Economic leverage ~1.4x ; Q1: 1.6x, low warehouse exposure	1.3x economic leverage; majority non‑recourse term securitized debt	Lower leverage, conservative financing
Macro/spreads	Q1: April macro volatility; equity, rates; agency basis moves; no forced selling	Q2: April volatility impacted marks; net interest margin 0.6%	Volatility fading, margins slightly lower

Management Commentary

“We are pleased to report second quarter results... highlighted by a 5% increase to our common dividend and a modest 2.4% book value decline. We... acquired an additional 21.4% of Arc Home... we see strong earnings accretion potential... positioning MITT as a leading, vertically integrated platform in residential mortgage” — T.J. Durkin, CEO .
“Securitized over $2 billion of UPB in 2025 YTD across 5 transactions... generating strong equity returns in the mid to high teens... immediately reinvested capital returned from legacy WMC re‑financing” .
“Net interest margin 0.6%, cost of funds 5.36% including swaps... Economic Leverage Ratio 1.3x” .

Q&A Highlights

Legacy WMC loan resolution: management expects a negotiated forbearance and ultimate payoff in 2025 (~$16mm equity capital tied up) .
Capacity to fund acquisitions: runway over next 2–3 quarters via capital rotation and leverage capacity, including roll‑off of inefficient WMC financings .
Securitization market health: markets closed briefly in early April, reopened by late April; spreads ~50–75 bps wider, but functioning .
HEL market durability: lock‑in effect supports durable addressable market even if rates rally; originators ramping production .
HEL securitization execution: retained non‑IG stack advances ~95% of market value; funding “~200 bps context” .

Estimates Context

Q2 2025 vs consensus: EAD/Primary EPS $0.18 vs $0.23 consensus (miss); Revenue $15.0mm vs $21.0mm consensus (miss). Primary EPS estimates based on S&P “Primary EPS” appear to track MITT’s EAD per share, while GAAP diluted EPS was $(0.05) *.
Q1 2025 was in line to slightly above: Primary EPS/EAD $0.20 vs $0.20 consensus; Revenue $20.4mm vs $19.1mm consensus *.
Estimate breadth: 5 EPS ests and 5 revenue ests for Q2 2025; 4–5 ests for Q1/Q3 2025, implying moderate coverage*.

Notes: All values with an asterisk were retrieved from S&P Global.

Key Takeaways for Investors

EAD and revenue missed consensus for Q2 2025 as April spread volatility and legacy commercial assets pressured results; monitor for normalization into 2H’25 and potential estimate cuts. Bold misses: EPS and revenue misses*.
Dividend raised to $0.21; conservative leverage (1.3x economic) and predominately non‑recourse term financing provide resilience through spread cycles .
Strategic Arc Home stake increased to 66% with expected EAD accretion in 2026 and minimal (~2%) book value dilution, reinforcing vertical integration and asset sourcing advantages .
Continued momentum in home equity loans with mid‑to‑high‑teens ROEs and active securitization cadence; pipeline stands at $1.2bn UPB, supporting earnings power growth .
Legacy WMC commercial remains a manageable headwind with hotel asset resolution targeted by year‑end; potential capital release provides redeployment opportunity .
Near‑term trading: dividend support and structural catalysts (Arc Home consolidation, securitizations) vs. the Q2 miss and lower NIM; watch spreads, securitization pricing, and EAD trajectory.
Medium‑term thesis: vertically integrated mortgage credit platform, disciplined leverage, and programmatic securitizations should compound EAD as HEL and agency‑eligible strategies scale, with Arc Home accretion in 2026 .

Values with an asterisk were retrieved from S&P Global.

AG Mortgage Investment Trust, Inc. (MITT)·Q2 2025 Earnings Summary