TPG Mortgage Investment Trust (MITT) Q2 2024 earnings summary

Executive summary

• Book value per share was $10.63 and adjusted book value was $10.37 as of June 30, 2024, both down about 2% from March, with a 5.6% dividend increase to $0.19 per share and EAD per share of $0.21 covering the dividend.

• Net loss available to common stockholders was $(0.02) per diluted share; net interest income for Q2 was $17.4 million.

• Investment portfolio grew to $6.9 billion, with significant loan and RMBS purchases, and total assets reached $7.1 billion.

• Successful integration of the WMC acquisition, with $57 million of assets monetized, $41 million of equity rotated into core strategy, and a $30.2 million bargain purchase gain in Q4 2023.

• Arc Home sold nearly all of its MSR portfolio post-quarter, generating liquidity and contributing to EAD growth.

Financial highlights

• Book value per share was $10.63 and adjusted book value was $10.37, both down about 2% from March; economic return on equity was (0.2)% for the quarter.

• EAD per share was $0.21; net interest income was $16.4–$17.4 million; dividend declared was $0.19 per share.

• Total equity stood at $533.5 million; liquidity was $180.2 million, including $120.9 million in cash and $59.3 million in unencumbered Agency RMBS.

• Economic leverage ratio was 2.5x; GAAP leverage ratio was 12.2x.

• Weighted average yield on the investment portfolio was 6.1%; cost of funds was 5.4%.

Outlook and guidance

• Management expects to remain active in securitizations, focus on risk-adjusted returns, and maintain sufficient liquidity and leverage.

• Anticipates returning to historical leverage levels after repaying convertible notes in September and targeting mid-to-high teens gross ROEs on new originations.

• Forward-looking statements highlight scaling as a pure-play residential mortgage REIT and opportunistic capital rotation.

• Market conditions remain volatile, but recent economic data supports the potential for Federal Reserve rate cuts later in 2024.