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What changed in TPG Mortgage Investment Trust, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of TPG Mortgage Investment Trust, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+467 added−478 removedSource: 10-K (2026-02-25) vs 10-K (2025-03-04)

Top changes in TPG Mortgage Investment Trust, Inc.'s 2025 10-K

467 paragraphs added · 478 removed · 347 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

32 edited+10 added−15 removed52 unchanged
Biggest changeHome Equity Loans that are structured as revolving lines of credit generally have an initial draw period of 3 to 5 years, and after the initial draw period ends, the loans generally convert to 15- or 25-year amortizing loans. Non-Agency RMBS (2) • Non-Agency Residential Mortgage-Backed Securities ("RMBS") represent fixed- and floating-rate RMBS issued by entities other than U.S.
Biggest changeNon-Agency RMBS (2) • Non-Agency Residential Mortgage-Backed Securities ("RMBS") represent fixed- and floating-rate RMBS issued by entities other than U.S. GSEs or agencies of the U.S. government. Non-Agency RMBS are primarily secured by Non-QM, Agency-Eligible, Home Equity, and Prime Jumbo Loans.
TPG Angelo Gordon considers the following factors, among others, when assigning investment opportunities among us and its other clients: • Capital available for new investments; • Existing ownership and target position size; • Investment objective or strategies; • Risk or investment concentration parameters; • Supply or demand for an investment at a given price level; • Cash availability and liquidity requirements; • Regulatory restrictions; • Minimum investment size; • Relative size or "buying power;" • Regulatory and tax considerations, including the impact on our status under the Investment Company Act and REIT status; and • Such other factors that may be relevant to a particular transaction.
TPG Angelo Gordon considers the following factors, among others, when assigning investment opportunities among us and its other clients: • Capital available for new investments; • Existing ownership and target position size; 8 • Investment objective or strategies; • Risk or investment concentration parameters; • Supply or demand for an investment at a given price level; • Cash availability and liquidity requirements; • Regulatory restrictions; • Minimum investment size; • Relative size or "buying power;" • Regulatory and tax considerations, including the impact on our status under the Investment Company Act and REIT status; and • Such other factors that may be relevant to a particular transaction.
Under Section 3(a)(1)(C) of the Investment Company Act, a company is deemed to be an investment company if it is engaged, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire "investment securities" having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis, (the "40% test").
Under Section 3(a)(1)(C) of the Investment Company Act, a company is deemed to be an investment company if 9 it is engaged, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire "investment securities" having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis, (the "40% test").
Repurchase agreements typically have a term of up to one year for loans and a term of 30 to 90 days for securities. Repurchase agreements are generally mark-to-market with respect to margin calls and recourse to us. 7 Our financing arrangements generally include customary representations, warranties, and covenants, but may also contain more restrictive supplemental terms and conditions.
Repurchase agreements typically have a term of up to one year for loans and a term of 30 to 90 days for securities. Repurchase agreements are generally mark-to-market with respect to margin calls and recourse to us. Our financing arrangements generally include customary representations, warranties, and covenants, but may also contain more restrictive supplemental terms and conditions.
Our qualification as a REIT depends upon our ability to meet on a continuing basis, through actual investment and operating results, various complex requirements under the Code relating to, among other things, the sources of our gross 9 income, the composition and values of our assets, our distribution levels and the diversity of ownership of our shares.
Our qualification as a REIT depends upon our ability to meet on a continuing basis, through actual investment and operating results, 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 diversity of ownership of our shares.
These relationships enable us to compete more effectively for attractive investment opportunities. Despite certain competitive advantages, we may not be able to achieve our business goals or expectations due to the competitive risks that we face. Human Capital Resources 10 We have no employees.
These relationships enable us to compete more effectively for attractive investment opportunities. Despite certain competitive advantages, we may not be able to achieve our business goals or expectations due to the competitive risks that we face. Human Capital Resources We have no employees.
Our Manager reports on our investment portfolio at each regularly scheduled meeting of our 8 Board of Directors. Our independent directors do not review or approve individual investment, leverage or hedging decisions made by our Manager made in accordance with our investment policies.
Our Manager reports on our investment portfolio at each regularly scheduled meeting of our Board of Directors. Our independent directors do not review or approve individual investment, leverage or hedging decisions made by our Manager made in accordance with our investment policies.
To the extent that we fail to comply with the covenants contained in these financing arrangements or are otherwise found to be in default under the terms of such agreements, the counterparty has the right to accelerate amounts due under the associated agreement. As of December 31, 2024, we are in compliance with all of our financial covenants.
To the extent that we fail to comply with the covenants contained in these financing arrangements or are otherwise found to be in default under the terms of such agreements, the counterparty has the right to accelerate amounts due under the associated agreement. As of December 31, 2025, we are in compliance with all of our financial covenants.
ITEM 1. BUSINESS Our company AG Mortgage Investment Trust, Inc. (the "Company," "MITT," "we," "us," and "our") is a residential mortgage REIT with a focus on investing in a diversified risk-adjusted portfolio of residential mortgage-related assets in the U.S. mortgage market.
ITEM 1. BUSINESS Our company TPG Mortgage Investment Trust, Inc. (the "Company," "MITT," "we," "us," and "our") is a residential mortgage REIT with a focus on investing in a diversified risk-adjusted portfolio of residential mortgage-related assets in the U.S. mortgage market.
Our Exchange Act reports filed with, or furnished to, the SEC are also available at the SEC’s website at www.sec.gov and can also be found on our website at www.agmit.com. The content of any website referred to in this Form 10-K is not incorporated by reference into this Form 10-K unless expressly noted.
Our Exchange Act reports filed with, or furnished to, the SEC are also available at the SEC’s website at www.sec.gov and can also be found on our website at www.mitt.tpg.com. The content of any website referred to in this Form 10-K is not incorporated by reference into this Form 10-K unless expressly noted. 10
When acquiring residential mortgage loans and other assets, we finance our investments using repurchase agreements or similar financing arrangements, which we refer to collectively as "financing arrangements." Upon accumulating a targeted amount of residential mortgage loans, we finance these assets utilizing long-term, non-recourse, non-mark-to-market securitizations as market conditions permit.
When acquiring residential mortgage loans and other assets, we finance our investments using repurchase agreements or facilities used to finance residential mortgage loans, which we refer to collectively as "financing arrangements." Upon accumulating a targeted amount of residential mortgage loans, we finance these assets utilizing long-term, non-recourse, non-mark-to-market securitizations as market conditions permit.
All of our officers, and our dedicated or partially dedicated personnel, are employees of TPG Angelo Gordon or its affiliates. We are highly dependent upon TPG Angelo Gordon’s employees and, in turn, TPG Angelo Gordon’s ability to create a respectful and inclusive firm culture to attract and retain the necessary talent to provide services to our company and its assets.
All of our officers, and our dedicated or partially dedicated personnel, are employees of TPG or its affiliates. We are highly dependent upon TPG’s employees and, in turn, TPG’s ability to create a respectful and inclusive firm culture to attract and retain the necessary talent to provide services to our company and its assets.
As of December 31, 2024, our investment portfolio consisted of the following Residential Investments and Agency RMBS: Asset Class Description Residential Investments Non-Agency Loans (1) • Non-Agency Loans are loans that do not conform to the underwriting guidelines of a government-sponsored enterprise ("GSE"). Non-Agency Loans consist of Qualified mortgage loans ("QM Loans") and Non-Qualified mortgage loans ("Non-QM Loans").
As of December 31, 2025, our investment portfolio consisted of the following Residential Investments and Agency RMBS: Asset Class Description Residential Investments Non-Agency Loans (1) • Non-Agency Loans are loans that do not conform to the underwriting guidelines of a government-sponsored enterprise ("GSE").
Government such as Ginnie Mae. (1) These investments are included in the "Securitized residential mortgage loans, at fair value" and "Residential mortgage loans, at fair value," line items on the consolidated balance sheets. 5 (2) These investments are included in the "Real estate securities, at fair value" line item on the consolidated balance sheets.
(1) These investments are included in the "Securitized residential mortgage loans, at fair value" and "Residential mortgage loans, at fair value" line items on the consolidated balance sheets. 5 (2) These investments are included in the "Real estate securities, at fair value" line item on the consolidated balance sheets.
Arc Home is a multi-channel licensed mortgage originator and servicer primarily engaged in the business of originating and selling residential mortgage loans while retaining the mortgage servicing rights associated with certain loans that it originates.
Through our ownership in Arc Home, we also have exposure to mortgage banking activities. Arc Home is a multi-channel licensed mortgage originator and servicer primarily engaged in the business of originating and selling residential mortgage loans while retaining the mortgage servicing rights associated with certain loans that it originates.
Our management has significant experience in the mortgage industry and expertise in structured credit investments. We are able to leverage our Manager, along with our ownership interest in Arc Home, a vertically integrated origination platform, to access investment opportunities in the non-agency residential mortgage loan market.
We are able to leverage our Manager, along with our ownership interest in Arc Home, a vertically integrated origination platform, to access investment opportunities in the non-agency residential mortgage loan market.
Subject to maintaining our qualification as a REIT and our Investment Company Act exemption, we utilize derivative instruments in an effort to hedge certain interest rate risk associated with the financing of our investment portfolio.
The redemption date for the February 2029 Senior Unsecured Notes is February 15, 2026 and the redemption date for the May 2029 Senior Unsecured Notes is May 15, 2026. 7 Subject to maintaining our qualification as a REIT and our Investment Company Act exemption, we utilize derivative instruments in an effort to hedge certain interest rate risk associated with the financing of our investment portfolio.
This strategic advantage has enabled us to grow our investment portfolio and remain active in the securitization markets, utilizing TPG Angelo Gordon's proprietary securitization platform to deliver non-agency investments to a diverse mix of investors. WMC Acquisition On December 6, 2023, (the "Closing Date") we completed our acquisition of WMC.
This strategic advantage has enabled us to grow our investment portfolio and remain active in the securitization markets, utilizing the TPG Credit platform's proprietary securitization platform to deliver non-agency investments to a diverse mix of investors.
Our strategies Our investment strategy We rely on the experience of our Manager’s personnel to direct our investments. Our Manager’s investment philosophy is based on a rigorous and disciplined approach to credit analysis and is focused on fundamental in-depth research.
Our Manager’s investment philosophy is based on a rigorous and disciplined approach to credit analysis and is focused on fundamental in-depth research.
For more information, refer to the "WMC Acquisition" section below. Our investment portfolio (which excludes our ownership in Arc Home) primarily includes Residential Investments and Agency RMBS. Currently, our Residential Investments primarily consist of newly originated Non-Agency Loans, Agency-Eligible Loans and Home Equity Loans, which we refer to as our target assets.
Our investment portfolio (which excludes our ownership in Arc Home) primarily includes Residential Investments and Agency RMBS. Currently, our Residential Investments primarily consist of Non-Agency Loans, Agency-Eligible Loans, Home Equity Loans and Non-Agency RMBS collateralized by these loan types, which we refer to as our target assets.
GSEs or agencies of the U.S. government. Re- and Non-Performing Loans (1) • Performing, re-performing, and non-performing loans are residential mortgage loans collateralized by a first lien mortgaged property. Agency RMBS (2) • Agency RMBS represent interests in pools of residential mortgage loans guaranteed by a GSE such as Fannie Mae or Freddie Mac, or an agency of the U.S.
Agency RMBS (2) • Agency RMBS represent interests in pools of residential mortgage loans guaranteed by a GSE such as Fannie Mae or Freddie Mac, or an agency of the U.S. Government such as Ginnie Mae.
For additional information regarding TPG and its human capital resources, see TPG's public filings with the SEC. Available information Our principal executive offices are located at 245 Park Avenue, 26th Floor, New York, New York 10167. Our telephone number is (212) 692-2000. Our website can be found at www.agmit.com.
Available information Our principal executive offices are located at 245 Park Avenue, 26th Floor, New York, New York 10167. Our telephone number is (212) 692-2000. Our website can be found at www.mitt.tpg.com.
Operating and regulatory structure REIT qualification We have elected to be treated as a REIT under Sections 856 through 859 of the Internal Revenue Code of 1986, as amended (the "Code").
TPG could in the future decide that it is advisable to adjust or fully remove the information barrier. Operating and regulatory structure REIT qualification We have elected to be treated as a REIT under Sections 856 through 859 of the Internal Revenue Code of 1986, as amended (the "Code").
TPG Angelo Gordon operates its business as a platform within TPG, a leading global alternative asset management firm, founded in San Francisco in 1992, with $246 billion of assets under management (as of December 31, 2024) and investment and operational teams around the world.
TPG is a leading global alternative asset management firm, founded in San Francisco in 1992, with $303.0 billion of assets under management (as of December 31, 2025) and investment and operational teams around the world. For additional information regarding TPG and its human capital resources, see TPG's public filings with the SEC.
We finance our acquired loans through various financing lines on a short-term basis and utilize Angelo, Gordon & Co., L.P.'s ("TPG Angelo Gordon") proprietary securitization platform to secure long-term, non-recourse, non-mark-to-market financing as market conditions permit. Through our ownership in Arc Home, we also have exposure to mortgage banking activities.
We obtain our assets through Arc Home, LLC ("Arc Home"), our residential mortgage loan originator in which we own an approximate 66.0% interest, and through other third-party origination partners. We finance our acquired loans through various financing lines on a short-term basis and utilize TPG Inc.'s ("TPG") proprietary securitization platform to secure long-term, non-recourse, non-mark-to-market financing as market conditions permit.
Our Manager and TPG Angelo Gordon We are externally managed by AG REIT Management, LLC, a Delaware limited liability company (the "Manager"), a wholly-owned subsidiary of TPG Angelo Gordon, a diversified credit and real estate investing platform within TPG Inc. ("TPG"). TPG (Nasdaq: TPG) is a leading global alternative asset management firm.
Our Manager and TPG We are externally managed by AG REIT Management, LLC, a Delaware limited liability company (our "Manager"), a wholly-owned subsidiary of TPG (NASDAQ: TPG), a leading global alternative asset management firm. Pursuant to the terms of our management agreement, our Manager provides us with our management team, including our officers, along with appropriate support personnel.
Our objective is to provide attractive risk-adjusted returns to our stockholders over the long-term, primarily through dividends and capital appreciation. We focus our investment activities primarily on acquiring and securitizing newly-originated residential mortgage loans within the non-agency segment of the housing market.
Our objective is to provide attractive risk-adjusted returns to our stockholders over the long-term, primarily through dividends and capital appreciation.
QM Loans are residential mortgage loans that comply with the Ability-To-Repay rules and related guidelines of the Consumer Financial Protection Bureau ("CFPB"). Agency-Eligible Loans (1) • Agency-Eligible Loans are loans that are underwritten in accordance with GSE guidelines and are primarily secured by investment properties, but are not guaranteed by a GSE.
Non-Agency Loans consist of Qualified mortgage loans ("QM Loans") and Non-Qualified mortgage loans ("Non-QM Loans") which are collateralized by a first lien mortgaged property. QM Loans are residential mortgage loans that comply with the Ability-To-Repay rules and related guidelines of the Consumer Financial Protection Bureau.
Our Manager is at all times subject to the supervision and oversight of our Board of Directors and has only such functions and authority as our Board of Directors delegates to it. Our Manager has delegated to TPG Angelo Gordon the overall responsibility with respect to our Manager’s day-to-day duties and obligations arising under our management agreement.
All of our officers are employees of TPG or its affiliates. We do not have any employees. Our Manager is at all times subject to the supervision and oversight of our Board of Directors and has only such functions and authority as our Board of Directors delegates to it. Our Manager has delegated to Angelo, Gordon & Co., L.P.
TPG Angelo Gordon is a registered investment adviser under the Investment Advisers Act of 1940, as amended. Through our relationship with our Manager, we benefit from the expertise and relationships that TPG Angelo Gordon has established which provides us with resources to generate attractive risk-adjusted returns for our stockholders.
Through our relationship with our Manager, we benefit from the expertise and relationships that TPG's Credit platform has established which provides us with resources to generate attractive risk-adjusted returns for our stockholders. Our management has significant experience in the mortgage industry and expertise in structured credit investments.
We also operate our business in a manner that permits us to maintain our exemption from registration under the Investment Company Act.
We also operate our business in a manner that permits us to maintain our exemption from registration under the Investment Company Act. We are externally managed by AG REIT Management, LLC, a Delaware limited liability company (our "Manager"), a wholly-owned subsidiary of TPG (NASDAQ: TPG), a leading global alternative asset management firm.
Although these loans are underwritten in accordance with GSE guidelines and can be delivered to Fannie Mae and Freddie Mac, the Company includes these loans within its Non-Agency securitizations.
Although these loans are underwritten in accordance with GSE guidelines and can be delivered to Fannie Mae and Freddie Mac, we include these loans within our Non-Agency securitizations. Home Equity Loans (1) • Home Equity Loans consist of revolving lines of credit and closed-end loans secured primarily by second liens on residential mortgaged properties.
Removed
We obtain our assets through Arc Home, LLC ("Arc Home"), our residential mortgage loan originator in which we own an approximate 44.6% interest, and through other third-party origination partners.
Added
Effective as of December 16, 2025, we changed our name from "AG Mortgage Investment Trust, Inc." to "TPG Mortgage Investment Trust, Inc." We focus our investment activities primarily on acquiring and securitizing newly-originated residential mortgage loans within the non-agency segment of the housing market.
Removed
In December 2023, we acquired Western Asset Mortgage Capital Corporation ("WMC"), an externally managed mortgage REIT that focused on investing in, financing and managing a portfolio of residential mortgage loans, real estate related securities, and commercial real estate loans. Through this acquisition, we increased our investment portfolio by $1.2 billion, which primarily consisted of Securitized Non-Agency Loans.
Added
Agency-Eligible Loans (1) • Agency-Eligible Loans are loans that are collateralized by a first lien mortgaged property and are primarily secured by investment properties. These loans are underwritten in accordance with GSE guidelines, but are not guaranteed by a GSE.
Removed
Home Equity Loans (1) • Home Equity Loans are revolving lines of credit or closed-end loans secured primarily by a second lien on a residential mortgaged property which provide borrowers access to the equity in their home without the need to pay off their existing mortgage.
Added
These products provide borrowers with access to home equity without requiring the payoff of an existing mortgage. Revolving lines of credit generally feature an initial draw period of 3 to 5 years, after which the balances convert to 15- or 25-year amortizing loans.
Removed
On November 1, 2023, TPG acquired TPG Angelo Gordon (the "TPG Transaction"), pursuant to which TPG Angelo Gordon, including our Manager, became indirect subsidiaries of TPG. Pursuant to the management agreement with our Manager, the closing of the TPG Transaction resulted in an assignment of the management agreement.
Added
Closed-end home equity loans are primarily fixed-rate obligations where the full principal amount is funded at origination and repaid through a fully amortizing schedule with original terms to maturity ranging from 10 to 30 years. Re- and Non-Performing Loans (1) • Performing, re-performing, and non-performing loans are residential mortgage loans collateralized by a first lien mortgaged property.
Removed
The independent directors of our Board of Directors unanimously consented to such assignment on July 31, 2023 in advance of the TPG Transaction closing. There were no changes to the management agreement in connection with the TPG Transaction and the assignment of the management agreement became effective upon the closing of the TPG Transaction.
Added
("TPG Angelo Gordon"), an affiliate of TPG, the overall responsibility of its day-to-day duties and obligations arising under our management agreement. TPG Angelo Gordon is the direct parent company of our Manager and is a registered investment adviser under the Investment Advisers Act of 1940, as amended.
Removed
Pursuant to the terms of our management agreement, our Manager provides us with our management team, including our officers, along with appropriate support personnel. All of our officers are employees of TPG Angelo Gordon or its affiliates. We do not have any employees.
Added
WMC Acquisition In December 2023, through a subsidiary, we completed our acquisition of Western Asset Mortgage Capital Corporation ("WMC"), a residential mortgage REIT (the "WMC Acquisition").
Removed
On the Closing Date, WMC merged with and into AGMIT Merger Sub, LLC, a Delaware limited liability company and our wholly owned subsidiary ("Merger Sub"), with Merger Sub continuing as the surviving company (the "Merger").
Added
The WMC Acquisition grew the market capitalization of our company by 45% and was accretive to our earnings as a result of the $1.2 billion of investments acquired and substantial cost synergies realized. 6 Our strategies Our investment strategy We rely on the experience of our Manager’s personnel to direct our investments.
Removed
As contemplated by the Agreement and Plan of Merger, 6 dated as of August 8, 2023 (the “Merger Agreement”), the certificate of merger was filed with the Secretary of State of the State of Delaware, and the Merger was effective at 8:15 a.m., Eastern Time, on the Closing Date (the "Effective Time").
Added
We may also finance our business through public and private offerings of our equity and debt, including common and preferred stock issuances, senior and convertible debt instruments, depending on market conditions and other factors.
Removed
Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, at the Effective Time, each outstanding share of WMC common stock, par value $0.01 per share (“WMC Common Stock”), was converted into the right to receive the following (the “Per Share Merger Consideration”): (i) from us, 1.498 shares of our common stock; and (ii) from our Manager, a cash amount equal to $0.92 (the “Per Share Additional Manager Consideration”).
Added
There is an information barrier between the historical TPG business and TPG's Credit platform and certain TPG Real Estate products, including TPG Angelo Gordon and our Manager.
Removed
No fractional shares of our common stock were issued in the Merger, and the value of any fractional interests to which a former holder of WMC Common Stock was otherwise entitled was paid in cash.
Added
While information barriers are designed to restrict the flow of information between certain businesses, such barriers may be breached, inadvertently or otherwise, including with respect to information regarding certain investment opportunities, deal pipelines and strategy, which could result in greater restrictions to our investment activities.
Removed
In connection with the Merger, we and our Manager entered into an amendment (the “MITT Management Agreement Amendment”) to our existing management agreement, pursuant to which (i) the base management fee will be reduced by $0.6 million for the first four quarters following the Effective Time, beginning with the fiscal quarter in which the Effective Time occurs (i.e., resulting in an aggregate $2.4 million waiver of base management fees), and (ii) our Manager will waive its right to seek reimbursement from us for any expenses otherwise reimbursable by us under the management agreement in an amount equal to approximately $1.3 million, which is the excess of $7.0 million over the aggregate Per Share Additional Manager Consideration paid by our Manager to the holders of WMC Common Stock under the Merger Agreement.
Removed
Pursuant to the Merger Agreement, approximately 9.2 million shares of our common stock were issued in connection with the Merger to former WMC common stockholders, and former WMC common stockholders owned approximately 31% of the common equity of MITT as the combined company following the consummation of the Merger.
Removed
In connection with the WMC acquisition, one of our subsidiaries assumed, and the Company guaranteed, $86.25 million aggregate principal amount of senior unsecured indebtedness, represented by WMC's 6.75% Convertible Senior Notes due 2024 (the "Legacy WMC Convertible Notes").
Removed
During the first quarter of 2024, we repurchased $7.1 million of principal amount of the Legacy WMC Convertible Notes and paid off the remaining $79.1 million principal amount outstanding at maturity in September 2024.
Removed
The redemption date for the February 2029 Senior Unsecured Notes is February 15, 2026 and the redemption date for the May 2029 Senior Unsecured Notes is May 15, 2026.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

150 edited+39 added−30 removed459 unchanged
Biggest changeRisks Related to our Management and our Relationships with our Manager and its Affiliates • We are dependent upon our Manager, its affiliates and their key personnel and may not find a suitable replacement if the management agreement with our Manager is terminated or such key personnel are no longer available to us, which would materially and adversely affect us. • The management agreement was not negotiated on an arm’s length basis and the terms, including the fees payable to our Manager, may not be as favorable to us as if the agreement was negotiated with unaffiliated third-parties. • Our governance and operational structure could result in conflicts of interest. • We may enter into transactions to purchase or sell investments with entities or accounts managed by our Manager or its affiliates. • Our Manager's fee structure may not create proper incentives or may induce our Manager and its affiliates to make riskier or more speculative investments, which increase the risk of our portfolio. • Our Manager will not be liable to us for any acts or omissions performed in accordance with the management agreement, including with respect to the performance of our investments. • Termination of our management agreement would be costly and, in certain cases, not permitted. 12 Risks Related to Taxation • Our failure to qualify as a REIT would result in higher taxes and reduced cash available for distribution to our stockholders. • The failure of assets subject to repurchase agreements to be treated as owned by us for U.S. federal income tax purposes could adversely affect our ability to qualify as a REIT. • Our ownership of and relationship with our TRSs will be limited, and a failure to comply with the limits would jeopardize our REIT status and may result in the application of a 100% excise tax. • Uncertainty exists with respect to the treatment of TBAs for purposes of the REIT asset and income tests. • New legislation or administrative or judicial action, in each instance potentially with retroactive effect, could make it more difficult or impossible for us to qualify as a REIT. • Complying with the REIT requirements may limit our ability to hedge effectively. • The tax on prohibited transactions will limit our ability to engage in transactions, including certain methods of securitizing mortgage loans, that would be treated as sales for U.S. federal income tax purposes. • We or our TRS may not be able to fully utilize our respective net operating loss or net capital loss carryforwards.
Biggest changeRisks Related to Taxation • Our failure to qualify as a REIT would result in higher taxes and reduced cash available for distribution to our stockholders. • The failure of assets subject to repurchase agreements to be treated as owned by us for U.S. federal income tax purposes could adversely affect our ability to qualify as a REIT. • Our ownership of and relationship with our TRSs will be limited, and a failure to comply with the limits would jeopardize our REIT status and may result in the application of a 100% excise tax. • Uncertainty exists with respect to the treatment of TBAs for purposes of the REIT asset and income tests. • New legislation or administrative or judicial action, in each instance potentially with retroactive effect, could make it more difficult or impossible for us to qualify as a REIT. • Complying with the REIT requirements may limit our ability to hedge effectively. • The tax on prohibited transactions will limit our ability to engage in transactions, including certain methods of securitizing mortgage loans, that would be treated as sales for U.S. federal income tax purposes. • We or our TRS may not be able to fully utilize our respective net operating loss or net capital loss carryforwards.
The Dodd-Frank 24 Act grants enforcement authority and broad discretionary regulatory authority to the CFPB to prohibit or condition terms, acts or practices relating to mortgage loans that the CFPB finds abusive, unfair, deceptive or predatory, as well as to take other actions that the CFPB finds are necessary or proper to ensure responsible affordable mortgage credit remains available to consumers.
The Dodd-Frank Act grants enforcement authority and broad discretionary regulatory authority to the CFPB to prohibit or condition terms, acts or practices relating to mortgage loans that the CFPB finds abusive, unfair, deceptive or predatory, as well as to take other 24 actions that the CFPB finds are necessary or proper to ensure responsible affordable mortgage credit remains available to consumers.
The ability of a borrower to repay a loan secured 27 by an income-producing property typically is dependent primarily upon the successful operation of the property rather than upon the existence of independent income or assets of the borrower. If the net operating income of the property is reduced, the borrower's ability to repay the loan may be impaired.
The ability of a borrower to repay a loan secured by an income-producing property typically is dependent primarily upon the successful operation of the property rather than upon the existence of independent income or assets of the borrower. If the net operating income of the property is reduced, the 27 borrower's ability to repay the loan may be impaired.
Our Manager and TPG Angelo Gordon and their respective employees also may have ongoing relationships with the obligors of investments or the clients’ counterparties and they or their clients may own equity or other securities or obligations issued by such parties.
Our Manager, TPG and TPG Angelo Gordon and their respective employees also may have ongoing relationships with the obligors of investments or the clients’ counterparties and they or their clients may own equity or other securities or obligations issued by such parties.
TPG Angelo Gordon or our Manager and their respective employees may make investment decisions for us that may be different from those undertaken for their personal accounts or on behalf of other clients (including the timing and nature of the action taken).
TPG, TPG Angelo Gordon or our Manager and their respective employees may make investment decisions for us that may be different from those undertaken for their personal accounts or on behalf of other clients (including the timing and nature of the action taken).
Specific factors that may have a significant effect on the market price of our common stock include, among others, the following: • Our actual or anticipated financial condition, performance, and prospects and those of our competitors. • The market for similar securities issued by other REITs and other competitors of ours. • Changes in the manner that investors and securities analysts who provide research to the marketplace on us analyze the value of our common stock. • Changes in recommendations or in estimated financial results published by securities analysts who provide research to the marketplace on us, our competitors, or our industry. • General economic and financial market conditions, including, among other things, actual and projected interest rates, prepayments, and credit performance and the markets for the types of assets we hold or invest in. • Changes in our dividend policy. • Proposals to significantly change the manner in which financial markets, financial institutions, and related industries, or financial products are regulated under applicable law, or the enactment of such proposals into law or regulation. 46 • Reactions to public announcements by us. • Sales of common stock by us, our Manager, members of our management team or significant stockholders. • Other events or circumstances which undermine confidence in the financial markets or otherwise have a broad impact on financial markets, such as the sudden instability or collapse of large financial institutions or other significant corporations (whether due to fraud or other factors), terrorist attacks, natural or man-made disasters, the outbreak of pandemic or epidemic disease, or threatened or actual armed conflicts.
Specific factors that may have a significant effect on the market price of our common stock include, among others, the following: • Our actual or anticipated financial condition, performance, and prospects and those of our competitors. 46 • The market for similar securities issued by other REITs and other competitors of ours. • Changes in the manner that investors and securities analysts who provide research to the marketplace on us analyze the value of our common stock. • Changes in recommendations or in estimated financial results published by securities analysts who provide research to the marketplace on us, our competitors, or our industry. • General economic and financial market conditions, including, among other things, actual and projected interest rates, prepayments, and credit performance and the markets for the types of assets we hold or invest in. • Changes in our dividend policy. • Proposals to significantly change the manner in which financial markets, financial institutions, and related industries, or financial products are regulated under applicable law, or the enactment of such proposals into law or regulation. • Reactions to public announcements by us. • Sales of common stock by us, our Manager, members of our management team or significant stockholders. • Other events or circumstances which undermine confidence in the financial markets or otherwise have a broad impact on financial markets, such as the sudden instability or collapse of large financial institutions or other significant corporations (whether due to fraud or other factors), terrorist attacks, natural or man-made disasters, the outbreak of pandemic or epidemic disease, or threatened or actual armed conflicts.
Notwithstanding the opinion of counsel, if the IRS successfully challenged WMC's REIT status prior to the Merger, we could face adverse tax consequences, including: • succeeding to WMC's liability for U.S. federal income taxes at regular corporate rates for the periods in which WMC failed to qualify as a REIT (without regard to the deduction for dividends paid for such periods); • succeeding to any built-in gain on WMC's assets, for which we could be liable for U.S. federal income tax at regular corporate rates, if we were to recognize such gain in the five-year period following the Merger; and • succeeding to WMC's E&P accumulated during the periods in which WMC failed to qualify as a REIT, which we would be required to distribute to our stockholders in order to satisfy the REIT 90% distribution requirements and avoid the imposition of any excise tax as a result, we would have less cash available for operations and distributions to our stockholders, which could require us to raise capital on unfavorable terms or pay deficiency dividends.
Notwithstanding the opinion of counsel, if the IRS successfully challenged WMC's REIT status prior to the acquisition, we could face adverse tax consequences, including: • succeeding to WMC's liability for U.S. federal income taxes at regular corporate rates for the periods in which WMC failed to qualify as a REIT (without regard to the deduction for dividends paid for such periods); • succeeding to any built-in gain on WMC's assets, for which we could be liable for U.S. federal income tax at regular corporate rates, if we were to recognize such gain in the five-year period following the Merger; and • succeeding to WMC's E&P accumulated during the periods in which WMC failed to qualify as a REIT, which we would be required to distribute to our stockholders in order to satisfy the REIT 90% distribution requirements and avoid the imposition of any excise tax as a result, we would have less cash available for operations and distributions to our stockholders, which could require us to raise capital on unfavorable terms or pay deficiency dividends.
This resolution, however, may be altered or repealed in whole or in part at any time. • The "control share" provisions of the MGCL provide that a holder of "control shares" of a Maryland corporation (defined as shares which, when aggregated with all other shares controlled by the stockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in the election of directors) acquired in a "control share acquisition" (defined as the acquisition of "control shares," subject to certain exceptions) has no voting rights with respect to those shares except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding votes entitled to be cast by the acquirer of control shares, and by our officers and our directors who are also our employees.
This resolution, however, may be altered or repealed in whole or in part at any time. • The "control share" provisions of the MGCL provide that a holder of "control shares" of a Maryland corporation (defined as shares which, when aggregated with all other shares controlled by the stockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in the election of directors) acquired in a "control share acquisition" (defined as the acquisition of "control shares," subject to certain exceptions) has no voting rights with respect to those shares except to the extent approved by our stockholders by the affirmative vote of at least two-thirds 44 of all the votes entitled to be cast on the matter, excluding votes entitled to be cast by the acquirer of control shares, and by our officers and our directors who are also our employees.
We rely on our Manager to continuously monitor and develop our information technology networks and infrastructure to prevent, detect, address and mitigate the risk of unauthorized access, misuse, computer viruses and other events that could have a security impact, and our Manager's ability to monitor our service providers' information systems may be limited or more difficult because our Manager may not have direct access.
We rely on our Manager to continuously monitor and develop our information technology networks and infrastructure to prevent, detect, address and mitigate the risk of unauthorized 20 access, misuse, computer viruses and other events that could have a security impact, and our Manager's ability to monitor our service providers' information systems may be limited or more difficult because our Manager may not have direct access.
If AG REIT Management, LLC ceases to be our Manager or one or more of our Manager’s key personnel are no longer servicing our business, it may constitute an event of default, and the depository institution providing the arrangement may have acceleration rights with respect to outstanding borrowings and termination rights with respect to our ability to finance our future investments with that institution.
If AG REIT 38 Management, LLC ceases to be our Manager or one or more of our Manager’s key personnel are no longer servicing our business, it may constitute an event of default, and the depository institution providing the arrangement may have acceleration rights with respect to outstanding borrowings and termination rights with respect to our ability to finance our future investments with that institution.
In particular, the outbreak or spread of any highly infectious or contagious disease may impact our financing strategy and liquidity. We finance many of the mortgage loans and real estate related securities we acquire with borrowings under 18 repurchase facilities and other financing arrangements and, as market conditions permit, refinance these assets through securitization transactions.
In particular, the outbreak or spread of any highly infectious or contagious disease may impact our financing strategy and liquidity. We finance many of the mortgage loans and real estate related securities we acquire with borrowings under repurchase facilities and other financing arrangements and, as market conditions permit, refinance these assets through securitization transactions.
Our investment portfolio is primarily comprised of residential mortgage loans and RMBS. An investment in such assets will generally decline in value if interest rates increase, particularly long-term interest rates. Declines in market value may ultimately reduce earnings or result in losses to us, which may negatively affect cash available for distribution to our stockholders.
Our investment portfolio is primarily comprised of residential mortgage loans and RMBS. An investment in such assets will generally decline in value if interest rates increase, particularly long-term interest rates. Declines in market value may 18 ultimately reduce earnings or result in losses to us, which may negatively affect cash available for distribution to our stockholders.
In evaluating asset acquisition and other management strategies, the opportunity to earn an incentive fee based on adjusted net income may lead our Manager to place undue emphasis on the maximization of adjusted net income at the expense of other criteria, such as preservation of capital, maintaining liquidity, and/or management of credit risk or market risk, in order to achieve a higher incentive fee.
In evaluating asset acquisition and 37 other management strategies, the opportunity to earn an incentive fee based on adjusted net income may lead our Manager to place undue emphasis on the maximization of adjusted net income at the expense of other criteria, such as preservation of capital, maintaining liquidity, and/or management of credit risk or market risk, in order to achieve a higher incentive fee.
Such subsidiaries are subject to corporate level income tax at regular rates. Any of these taxes would decrease cash available for distribution to our stockholders. The failure of assets subject to repurchase agreements to be treated as owned by us for U.S. federal income tax purposes could adversely affect our ability to qualify as a REIT.
Such subsidiaries are subject to corporate level income tax at regular rates. Any of these taxes would decrease cash available for distribution to our stockholders. 40 The failure of assets subject to repurchase agreements to be treated as owned by us for U.S. federal income tax purposes could adversely affect our ability to qualify as a REIT.
Such ownership may create, or may create the appearance of, conflicts of interest when these directors and officers are faced with decisions that could have different implications for such entities than they do for us. We may enter into transactions to purchase or sell investments with entities or accounts managed by our Manager or its affiliates.
Such ownership may create, or may create the appearance of, conflicts of interest when these directors and officers are faced with decisions that could have different implications for such entities than they do for us. 36 We may enter into transactions to purchase or sell investments with entities or accounts managed by our Manager or its affiliates.
If we are unable to obtain sufficient short-term financing or our assets are insufficient to meet the collateral requirements, then we may be compelled to liquidate particular assets at an inopportune time and at distressed sale prices. These conditions could adversely impact our business. Valuations of our investments may at times be unavailable or unreliable.
If we are unable to obtain sufficient short-term financing or our assets are insufficient to meet the collateral requirements, then we may be compelled to liquidate particular assets at an inopportune time and at distressed sale prices. These conditions could adversely impact our business. 17 Valuations of our investments may at times be unavailable or unreliable.
The servicer also has a contractual obligation to obey all laws and regulations (including federal, state, and local laws and regulations) and to act in accordance with applicable servicing 21 standards; however, as we do not control these servicers, we cannot be sure that they are acting in accordance with their contractual and legal obligations or applicable law.
The servicer also has a contractual obligation to obey all laws and regulations (including federal, state, and local laws and regulations) and to act in accordance with applicable servicing standards; however, as we do not control these servicers, we cannot be sure that they are acting in accordance with their contractual and legal obligations or applicable law.
Our Manager is not under any obligation to reimburse us for any part of the incentive fee previously received as a result of unrealized gains that are ultimately not realized. 37 Our Manager will not be liable to us for any acts or omissions performed in accordance with the management agreement, including with respect to the performance of our investments.
Our Manager is not under any obligation to reimburse us for any part of the incentive fee previously received as a result of unrealized gains that are ultimately not realized. Our Manager will not be liable to us for any acts or omissions performed in accordance with the management agreement, including with respect to the performance of our investments.
We may be required to make distributions to our stockholders at disadvantageous times or when we do not have funds readily available for distribution, and may be unable to pursue otherwise attractive investments in order to satisfy the source-of-income or asset-diversification requirements for 39 qualifying as a REIT.
We may be required to make distributions to our stockholders at disadvantageous times or when we do not have funds readily available for distribution, and may be unable to pursue otherwise attractive investments in order to satisfy the source-of-income or asset-diversification requirements for qualifying as a REIT.
These risks may be more pronounced during times of market volatility and negative economic conditions. 15 We engage in securitization transactions relating to residential mortgage loans which exposes us to potentially material risks. A significant part of our business and growth strategy is to engage in securitization transactions to finance newly-acquired residential mortgage loans.
These risks may be more pronounced during times of market volatility and negative economic conditions. We engage in securitization transactions relating to residential mortgage loans which exposes us to potentially material risks. A significant part of our business and growth strategy is to engage in securitization transactions to finance newly-acquired residential mortgage loans.
See "— Risks Related to our Management and our Relationships with our Manager and its Affiliates — Our governance and operational structure could result in conflicts of interest." for further information. 17 In addition to existing companies, other companies may be organized in the future for similar purposes, including companies focused on purchasing mortgage assets.
See "— Risks Related to our Management and our Relationships with our Manager and its Affiliates — Our governance and operational structure could result in conflicts of interest." for further information. In addition to existing companies, other companies may be organized in the future for similar purposes, including companies focused on purchasing mortgage assets.
If the new party does not guarantee these Agency RMBS, we are subject to credit loss on the Agency RMBS which could negatively affect liquidity, net income and book value. 29 Mortgage loan modification and refinancing programs may adversely affect the value of, and our returns on, mortgage-backed securities and residential mortgage loans.
If the new party does not guarantee these Agency RMBS, we are subject to credit loss on the Agency RMBS which could negatively affect liquidity, net income and book value. Mortgage loan modification and refinancing programs may adversely affect the value of, and our returns on, mortgage-backed securities and residential mortgage loans.
The related agency or rating agencies may suspend rating notes at any time. Rating agency delays may result in our inability to obtain timely ratings on new notes, which could adversely impact the availability of 32 borrowings or the interest rates, advance rates or other financing terms and adversely affect our results of operations and liquidity.
The related agency or rating agencies may suspend rating notes at any time. Rating agency delays may result in our inability to obtain timely ratings on new notes, which could adversely impact the availability of borrowings or the interest rates, advance rates or other financing terms and adversely affect our results of operations and liquidity.
Furthermore, since predictive models are usually constructed based on historical data supplied by third-parties, the success of relying on such models may depend heavily on the accuracy and reliability of the supplied historical data and the ability of these historical models to accurately reflect future periods. All valuation models rely on correct market data inputs.
Furthermore, since predictive models are usually constructed based on historical data supplied by third-parties, the success of relying on such models may depend heavily on the accuracy and reliability of the supplied historical data and the ability of these historical models to accurately reflect future periods. 16 All valuation models rely on correct market data inputs.
Further, if any of the foregoing events were to occur, the value of our investment in Arc Home may also be adversely impacted. An economic slowdown or a deterioration of the housing market could negatively impact Arc Home's lending and servicing businesses. Adverse economic conditions or a deterioration of the housing market could negatively impact Arc Home's lending businesses.
Further, if any of the foregoing events were to occur, the value of our investment in Arc Home may also be adversely impacted. 22 An economic slowdown or a deterioration of the housing market could negatively impact Arc Home's lending and servicing businesses. Adverse economic conditions or a deterioration of the housing market could negatively impact Arc Home's lending businesses.
Our business is subject to extensive regulation by federal and state governmental authorities, self-regulatory organizations, and securities exchanges. We are required to comply with numerous federal and state laws. The laws, rules and regulations 23 comprising this regulatory framework change frequently, as can the interpretation and enforcement of existing laws, rules, and regulations.
Our business is subject to extensive regulation by federal and state governmental authorities, self-regulatory organizations, and securities exchanges. We are required to comply with numerous federal and state laws. The laws, rules and regulations comprising this regulatory framework change frequently, as can the interpretation and enforcement of existing laws, rules, and regulations.
In the event of a breach of a representation or warranty, we may be required to repurchase affected loans, make indemnification payments to certain indemnified parties or address any claims associated with such breach. Further, we may have limited or no recourse against the seller from whom we purchased the loans.
In the event of a breach of a representation or warranty, we may be required to repurchase affected loans, make indemnification payments to certain indemnified parties or address any claims associated with such breach. Further, we may have limited or no recourse against the 32 seller from whom we purchased the loans.
For example, these restrictions limit our and our subsidiaries’ ability to invest directly in 43 mortgage-related securities that represent less than the entire ownership in a pool of mortgage loans, debt and equity tranches of securitizations, certain real estate companies or assets not related to real estate.
For example, these restrictions limit our and our subsidiaries’ ability to invest directly in mortgage-related securities that represent less than the entire ownership in a pool of mortgage loans, debt and equity tranches of securitizations, certain real estate companies or assets not related to real estate.
The terms we receive on such financings are influenced by the demand for similar funding by our competitors, including other REITs, specialty finance companies and other financial entities. Many of our competitors are significantly larger than us, have greater financial resources and significantly larger balance sheets than we do.
The terms we receive on such financings are influenced by the demand for similar funding by our competitors, including other REITs, specialty finance companies and other 31 financial entities. Many of our competitors are significantly larger than us, have greater financial resources and significantly larger balance sheets than we do.
In addition, many loan servicing activities are not permitted to be done through a remote work setting. To the extent that shelter-in-place orders and remote work arrangements for non-essential businesses continue in the future, loan servicers may be materially adversely impacted.
In addition, many loan servicing activities are not permitted to be done through a remote work setting. To the extent that shelter-in-place orders and remote work arrangements for non-essential businesses 21 continue in the future, loan servicers may be materially adversely impacted.
Congress to pass spending bills or address the debt ceiling at any point in the future would increase the risk of default by the U.S. on its obligations, the risk of a lowering of the U.S. federal government's credit rating, and the risk of other economic dislocations.
Congress to pass spending bills or address the debt ceiling at any point in the future would increase the risk of default by the U.S. on its obligations, the risk of a lowering of the 23 U.S. federal government's credit rating, and the risk of other economic dislocations.
As the investment programs of the various entities and accounts managed by our Manager and its 36 affiliates change over time, additional issues and considerations may affect our Affiliated Transactions Policy and our Manager’s expectations with respect to such transactions, which could adversely affect our operations.
As the investment programs of the various entities and accounts managed by our Manager and its affiliates change over time, additional issues and considerations may affect our Affiliated Transactions Policy and our Manager’s expectations with respect to such transactions, which could adversely affect our operations.
While there were modest interest rate decreases in 2024 and volume origination has been increasing, the Federal Reserve could determine to leave rates at current levels or even increase rates further should inflation become elevated.
While there were modest interest rate decreases in 2024 and 2025 and origination volume has been increasing, the Federal Reserve could determine to leave rates at current levels or even increase rates further should inflation become elevated.
Any of the foregoing could adversely affect Arc Home’s business, which in turn would have a negative impact on our results. 22 Arc Home is subject to extensive licensing requirements and regulation, which could materially and adversely affect us.
Any of the foregoing could adversely affect Arc Home’s business, which in turn would have a negative impact on our results. Arc Home is subject to extensive licensing requirements and regulation, which could materially and adversely affect us.
Our inability to generate sufficient cash flow to satisfy our debt service requirements or to refinance our obligations on commercially reasonable terms may adversely affect our cash flows, ability to make distributions to our stockholders, financial condition, and results of operations.
Our inability to generate sufficient cash flow to satisfy our debt service requirements or to refinance our 30 obligations on commercially reasonable terms may adversely affect our cash flows, ability to make distributions to our stockholders, financial condition, and results of operations.
Our Required Credit Risk could subject us to the first losses on our securitizations and is illiquid, which may make it more difficult to meet our liquidity needs, which may materially and adversely affect our business and financing condition.
Our Required Credit Risk could subject us to the first losses on our securitizations and is illiquid, which may make it more difficult to meet our liquidity needs, which may materially and adversely affect our business and financing 15 condition.
We are not required to offer any such shares to existing stockholders on a preemptive basis. Therefore, it may not be possible for existing stockholders to participate in future share issuances, which may dilute existing stockholders’ interests in us.
We are not required to offer any such shares to existing stockholders on a preemptive basis. Therefore, it may not 45 be possible for existing stockholders to participate in future share issuances, which may dilute existing stockholders’ interests in us.
Further, as of December 31, 2024, we have $93.2 million of 8.000% Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (the "Series C Preferred Stock"), which transitioned to a floating rate on September 17, 2024.
Further, as of December 31, 2025, we have $93.2 million of 8.000% Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (the "Series C Preferred Stock"), which transitioned to a floating rate on September 17, 2024.
It is possible, however, that the 40 IRS could assert that we did not own the assets during the term of the sale and repurchase agreement, in which case we could fail to qualify as a REIT.
It is possible, however, that the IRS could assert that we did not own the assets during the term of the sale and repurchase agreement, in which case we could fail to qualify as a REIT.
As our reliance on technology has increased, so have the risks posed to our information systems, including those provided by the Manager and third-party service providers (including, without limitation, affiliates and third parties with which we and our Manager do business, such as Arc Home and other mortgage originators, due diligence firms, pricing vendors and servicers, or that facilitate our business activities, including clearing agents or other financial intermediaries we use to facilitate our securitization transactions).
As our reliance on technology has increased, so have the risks posed to our information systems, including those provided by the Manager and third-party service providers (including, without limitation, affiliates and third parties with which we and our Manager do business, such as Arc Home and other mortgage originators, due diligence firms, pricing vendors and servicers, or that facilitate our business activities, including clearing agents or other financial intermediaries we use to facilitate our securitization transactions, valuation firms and law firms).
In addition, the physical condition of non-owner-occupied properties can be below that of owner-occupied properties due to lax property maintenance standards, which can have a negative impact on the value of the collateral 25 properties.
In addition, the physical condition of non-owner-occupied properties can be below that of owner-occupied properties due to lax property maintenance standards, which can have a negative impact on the value of the collateral properties.
The appointment of the FHFA as conservator of both Fannie Mae and Freddie Mac allows the FHFA to control the actions of the two GSEs. Shortly after Fannie Mae and Freddie Mac were placed in federal conservatorship, the Secretary of the U.S.
The appointment of the FHFA as conservator of both Fannie Mae and Freddie Mac allows the FHFA to control the actions of the two GSEs. 28 Shortly after Fannie Mae and Freddie Mac were placed in federal conservatorship, the Secretary of the U.S.
Computer malware, viruses, computer hacking, phishing 20 attacks, ransomware attacks, attacks enhanced or facilitated by artificial intelligence and other machine learning techniques, and other electronic security breaches have become more frequent and more sophisticated.
Computer malware, viruses, computer hacking, phishing attacks, ransomware attacks, attacks enhanced or facilitated by artificial intelligence and other machine learning techniques, and other electronic security breaches have become more frequent and more sophisticated.
Operational policy changes could adversely affect the market value of our common stock and our ability to make distributions to our stockholders, such as reduction in the size of our GAAP investment portfolio.
Operational policy changes could adversely affect the market value of our common stock and our ability to make distributions to our stockholders, such as reduction in the size of our investment portfolio.
These concerns have also resulted in increasing governmental and societal attention to ESG matters, including attempts to expand mandatory and voluntary reporting, diligence, and disclosure on topics such as climate change, waste production, water usage, human capital, labor, and risk oversight, could expand the nature, scope, and complexity of matters that we are required to control, assess, and report.
These concerns have also resulted in increasing governmental and societal attention to sustainability matters, including attempts to expand mandatory and voluntary reporting, diligence, and disclosure on topics such as climate change, waste production, water usage, human capital, labor, and risk oversight, that could expand the nature, scope, and complexity of matters that we are required to control, assess, and report.
Further, when there are turbulent conditions in the real estate industry, distress in the credit markets or other times when we will need focused support and assistance from our Manager, the attention of our Manager’s personnel and executive officers and the resources of TPG Angelo Gordon will also be required by the other funds and accounts managed by our Manager and its affiliates, placing our Manager’s resources in high demand.
Further, when there are turbulent conditions in the real estate industry, distress in the credit markets or other times when we will need focused support and assistance from our Manager, the attention of our Manager’s personnel and executive officers and the resources of TPG will also be required by the other funds and accounts managed by our Manager and its affiliates, placing our Manager’s resources in high demand.
An increase in 34 interest rates will increase the cost of the Series C Preferred Stock, refinancing of our existing borrowings or the issuance of new variable rate debt.
An increase in interest rates will increase the cost of the Series C Preferred Stock, refinancing of our existing borrowings or the issuance of new variable rate debt.
Our ability to successfully execute this strategy, grow our business, and achieve attractive risk-adjusted returns for our stockholders are dependent upon our Manager's ability to source, acquire and finance on our behalf a large volume of desirable residential mortgage loans and other target assets on attractive terms, and our Manager may be unable to do so for many reasons.
Our ability to successfully execute this strategy, grow our business, and achieve attractive risk-adjusted returns for our stockholders is dependent upon our Manager's ability to source, acquire and finance on our behalf a large volume of desirable residential mortgage loans and other target assets on attractive terms, and our Manager may be unable to do so for many reasons.
If major lenders stop financing our 31 target assets, the value of our target assets could be negatively impacted, thus reducing net stockholders’ equity, or book value.
If major lenders stop financing our target assets, the value of our target assets could be negatively impacted, thus reducing net stockholders’ equity, or book value.
In addition, we may issue additional shares of common stock to participants in any direct stock purchase and dividend reinvestment plan we may establish and to our directors, officers, and employees of our Manager under any employee stock purchase plan we may establish, our equity incentive plan, or other similar plans, including upon the exercise of, or in respect of, distributions on equity awards previously granted thereunder.
In addition, we may issue additional shares of common stock to participants in any direct stock purchase and dividend reinvestment plan we may establish and to our directors, officers, and employees of our Manager and its affiliates under any employee stock purchase plan we may establish, our equity incentive plan, or other similar plans, including upon the exercise of, or in respect of, distributions on equity awards previously granted thereunder.
Pursuant to our management agreement, our Manager is obligated to supply us with our senior management team, and the members of that team may have conflicts in allocating their time and services between us and other entities or accounts managed by our Manager and its affiliates, now or in the future, including other TPG Angelo Gordon funds.
Pursuant to our management agreement, our Manager is obligated to supply us with our senior management team, and the members of that team may have conflicts in allocating their time and services between us and other entities or accounts managed by our Manager and its affiliates, now or in the future, including other TPG funds.
Summary Risk Factors Risks Related to our Company, Business, and Operations • Our ability to grow our business is dependent upon our Manager's ability to source, acquire and finance a large volume of desirable residential mortgage loans and other target assets on attractive terms. • Disruptive, exogenous geopolitical or other macroeconomic events or large-scale conflicts, including warfare among countries could materially and adversely affect our business. • The mortgage loans we acquire or that underlie our RMBS expose us to significant credit risk that could negatively affect the value of those investments. • We engage in securitization transactions relating to residential mortgage loans which exposes us to potentially material risks. • Our Manager’s due diligence of potential investments may be insufficient, which could lead to investment losses. • Our Manager’s investment models may be incorrect due to inaccurate models or incorrect third-party data, which could lead to investment losses. • We operate in a highly competitive market. • We may experience periods of significant illiquidity for our assets, which could adversely impact our business. • Valuations of our investments may at times be unavailable or unreliable. • The outbreak of highly infectious or contagious diseases could adversely impact or cause disruption to our financial condition and results of operations. • Increases in interest rates could adversely affect the value of our investments and cause our interest expense to increase, which could negatively affect our profitability and our ability to make distributions. • We may be adversely affected by risks affecting borrowers or the asset or property types in which our investments may be concentrated at any given time, as well as from climate change or other unfavorable changes in the related geographic regions. • Climate change, climate change-related initiatives and regulation and environmental, social and governance (ESG) issues, may adversely affect our business and financial results and damage our reputation. • Cybersecurity risks may cause a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively impact our business. 11 • The failure of servicers to effectively service the mortgage loans in our portfolio may materially and adversely affect us, and market disruptions may make it more difficult for the loan servicers to perform a variety of services for us, which may adversely impact our business and financial results. • If Arc Home's ability to sell loans in the secondary market is impaired, it could affect its volume and margins, which adversely affect its business and, in turn, would have a negative impact on our results. • Arc Home is subject to extensive licensing requirements and regulation, which could materially and adversely affect us. • An economic slowdown or a deterioration of the housing market could negatively impact Arc Home's lending and servicing businesses.
Summary Risk Factors Risks Related to our Company, Business, and Operations • Our ability to grow our business is dependent upon our Manager's ability to source, acquire and finance a large volume of desirable residential mortgage loans and other target assets on attractive terms. • Disruptive, exogenous geopolitical or other macroeconomic events or large-scale conflicts, including warfare among countries could materially and adversely affect our business. • The mortgage loans we acquire or that underlie our RMBS expose us to significant credit risk that could negatively affect the value of those investments. • We engage in securitization transactions relating to residential mortgage loans which exposes us to potentially material risks. • Our Manager’s due diligence of potential investments may be insufficient, which could lead to investment losses. • Our Manager’s investment models may be incorrect due to inaccurate models or incorrect third-party data, which could lead to investment losses. • We operate in a highly competitive market. • We may experience periods of significant illiquidity for our assets, which could adversely impact our business. • Valuations of our investments may at times be unavailable or unreliable. • The outbreak of highly infectious or contagious diseases could adversely impact or cause disruption to our financial condition and results of operations. • Increases in interest rates could adversely affect the value of our investments and cause our interest expense to increase, which could negatively affect our profitability and our ability to make distributions. • We may be adversely affected by risks affecting borrowers or the asset or property types in which our investments may be concentrated at any given time, as well as from climate change or other unfavorable changes in the related geographic regions. • Climate change, climate change-related initiatives and regulation and sustainability-related issues, may adversely affect our business and financial results and damage our reputation. • Cybersecurity risks may cause a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively impact our business. • The failure of servicers to effectively service the mortgage loans in our portfolio may materially and adversely affect us, and market disruptions may make it more difficult for the loan servicers to perform a variety of services for us, which may adversely impact our business and financial results. • If Arc Home's ability to sell loans in the secondary market is impaired, it could affect its volume and margins, which adversely affect its business and, in turn, would have a negative impact on our results. • Arc Home is subject to extensive licensing requirements and regulation, which could materially and adversely affect us. • An economic slowdown or a deterioration of the housing market could negatively impact Arc Home's lending and servicing businesses. • We may utilize artificial intelligence, which could expose us to liability and affect our business.
As a result, future sales by these individuals or our Manager could negatively affect the market price of our common stock. 45 We have not established a minimum distribution payment level and we cannot assure you of our ability to pay distributions in the future.
As a result, future sales by these individuals, our Manager or the Holders could negatively affect the market price of our common stock. We have not established a minimum distribution payment level and we cannot assure you of our ability to pay distributions in the future.
We may also co-sponsor a securitization where we are the party obligated to comply with the Risk Retention Rules.
We may also co-sponsor a securitization where we believe we are the party obligated to comply with the Risk Retention Rules.
Employees of our Manager and its affiliates may also invest in other entities managed by other TPG Angelo Gordon entities which are eligible to purchase target assets. See Part I, Item 1 "Business - Investment Policies" for additional information related to target assets.
Employees of our Manager and its affiliates may also invest in other entities managed by other TPG entities which are eligible to purchase target assets. See Part I, Item 1 "Business - Investment Policies" for additional information related to target assets.
Moreover, even if a "protective" election were to be effective, we cannot assure you that we would not fail to satisfy the requirement that not more than 20% of the value of our total assets may be represented by the securities of one or more TRSs.
Moreover, even if a "protective" election were to be effective, we cannot assure you that we would not fail to satisfy the requirement that not more than 25% of the value of our total assets may be represented by the securities of one or more TRSs.
Moreover, a geographic concentration of our investments in an area which has been or may become adversely impacted by climate change (including flooding, drought, wildfire, tornados, and other severe weather) may negatively impact the performance of those investments.
Moreover, a geographic concentration of our investments in an area which has been or may become adversely impacted by climate change (including flooding, drought, wildfire, tornadoes, and other severe weather) may negatively impact the performance of those investments.
Further, significant physical effects of climate change including extreme weather events such as drought, wildfire, tornados, hurricanes or floods can also have an adverse impact on real estate assets that secure our residential mortgage loans.
Further, significant physical effects of climate change including extreme weather events such as drought, wildfire, tornadoes, hurricanes or floods can also have an adverse impact on real estate assets that secure our residential mortgage loans.
Government Programs The federal conservatorship of Fannie Mae and Freddie Mac and related efforts, along with any changes in laws and regulations affecting the relationship between these agencies and the U.S. government, may adversely affect our business.
Risks Related to U.S. Government Programs • The federal conservatorship of Fannie Mae and Freddie Mac and related efforts, along with any changes in laws and regulations affecting the relationship between these agencies and the U.S. government, may adversely affect our business.
We depend upon a limited number of financing counterparties to fund our investments. The aggregate number of our financing counterparties was six as of December 31, 2024. The limited number of financing counterparties may reduce our ability to obtain financing on favorable terms and increases our counterparty credit risk.
We depend upon a limited number of financing counterparties to fund our investments. The aggregate number of our financing counterparties was six as of December 31, 2025. The limited number of financing counterparties may reduce our ability to obtain financing on favorable terms and increases our counterparty credit risk.
Arc Home's lending and servicing business activities is subject to extensive regulation by federal, state and local governmental and regulatory authorities, including the CFPB, the Federal Trade Commission, the U.S. Department of Housing and Urban Development, the U.S.
Arc Home's lending and servicing business activities are subject to extensive regulation by federal, state and local governmental and regulatory authorities, including the CFPB, the Federal Trade Commission, the U.S. Department of Housing and Urban Development, the U.S.
In addition, TPG Angelo Gordon, either for its own accounts or for the accounts of other clients, may hold securities or obligations that are senior to, or have interests different from or adverse to, the securities or obligations that are acquired for us.
In addition, TPG and TPG Angelo Gordon, either for its respective own accounts or for the accounts of other clients, may hold securities or obligations that are senior to, or have interests different from or adverse to, the securities or obligations that are acquired for us.
More recently, anti-ESG sentiment has gained momentum in the United States, with the Federal government and many states having enacted or proposed "anti-ESG" policies, legislation or issue related legal opinion.
More recently, anti-ESG sentiment has gained momentum in the United States, with the Federal government and many states having enacted or proposed "anti-ESG" policies, legislation or issue related legal opinions.
In accordance with our management agreement, we are externally managed and advised by our Manager, and all of our officers are employees of TPG Angelo Gordon or its affiliates. We have no separate facilities, and we have no employees.
In accordance with our management agreement, we are externally managed and advised by our Manager, and all of our officers are employees of TPG or its affiliates. We have no separate facilities, and we have no employees.
In addition, claims may be assessed against us because of our position as a mortgage holder or property owner, including assignee liability, environmental hazards, tax and other liabilities. In some cases, these claims may lead to losses exceeding the purchase price of the related mortgage or property. Enhanced Non-QM Loan Risks .
In addition, claims may be assessed against us because of our position as a mortgage holder or property owner, including assignee liability, environmental hazards, tax and other liabilities. In some cases, these claims may lead to losses exceeding the purchase price of the related mortgage or property. Enhanced Second Lien Loan Risks .
In addition, recent increases in mortgage rates have generally not led to lower housing costs (including due to a possible "lock-in" effect), which has led to significantly lower home affordability and thus adversely impacted the cost of owning a home, which could lead to an increase in defaults on the mortgage loans underlying many of our investments.
In addition, the current elevated mortgage rates have generally not led to lower housing costs (including due to a possible "lock-in" effect), which has led to significantly lower home affordability and thus adversely impacted the cost of owning a home, which could lead to an increase in defaults on the mortgage loans underlying many of our investments.
If we are unable to adequately address such ESG matters or we fail or are perceived to fail to comply with all laws, regulations, policies and related interpretations, it could negatively impact our reputation and our business results.
If we are unable to adequately address such climate and sustainability matters or we fail or are perceived to fail to comply with all laws, regulations, policies and related interpretations, it could negatively impact our reputation and our business results.
These requirements can and do change as statutes and regulations are enacted, promulgated, amended, and interpreted, and the recent trends among federal and state lawmakers and regulators have been toward increasing laws, regulations, and investigative proceedings concerning the mortgage industry generally; however, the current administration may implement changes in regulatory oversight.
These requirements can and do change as statutes and regulations are enacted, promulgated, amended, and interpreted, and trends among federal and state lawmakers and regulators historically have been toward increasing laws, regulations, and investigative proceedings concerning the mortgage industry generally; however, the current administration has sought to and may implement changes in regulatory oversight.
As of December 31, 2024, 35% of the total fair value of our residential mortgage loan portfolio was secured by properties located in California, which are particularly susceptible to natural disasters such as fires, earthquakes and mudslides.
As of December 31, 2025, 30% of the total fair value of our residential mortgage loan portfolio was secured by properties located in California, which are particularly susceptible to natural disasters such as fires, earthquakes and mudslides.
In addition, as of December 31, 2024, 11% of the total fair value of our residential mortgage loan portfolio, was secured by properties located in Florida, which are particularly susceptible to natural disasters such as hurricanes and floods.
In addition, as of December 31, 2025, 10% of the total fair value of our residential mortgage loan portfolio was secured by properties located in Florida, which are particularly susceptible to natural disasters such as hurricanes and floods.
Our ability to use WMC's historic NOL carryforwards is limited by a Section 382 ownership change that occurred with respect to WMC at the time of the Merger.
Our ability to use WMC's NOL carryforwards is limited by a Section 382 ownership change that occurred with respect to WMC at the time of the WMC Acquisition.
Furthermore, our Manager has the sole discretion to hire and fire employees, and our Board of Directors and stockholders have no authority over the individual employees of our Manager or TPG Angelo Gordon, although our Board of Directors does have direct authority over our officers who are supplied by our Manager.
Furthermore, TPG has the sole discretion to hire and fire employees, and our Board of Directors and stockholders have no authority over the individual employees of our Manager, TPG or its affiliates, although our Board of Directors does have direct authority over our officers who are supplied by our Manager.
Sales of shares of our common stock by our directors and officers are generally required to be publicly reported and are tracked by many market participants as a factor in making their own investment decisions.
Sales of shares of our common stock by our directors and officers, and greater than 5% stockholders, are generally required to be publicly reported and are tracked by many market participants as a factor in making their own investment decisions.
The amount of such indebtedness could have material adverse consequences for us, including: • hindering our ability to adjust to changing market, industry or economic conditions; limiting our ability to access the capital markets to raise additional equity or refinance maturing debt on favorable terms or to fund acquisitions or emerging businesses; • limiting the amount of cash flow available for future operations, acquisitions, dividends, stock repurchases or other uses; • limiting our ability to deduct interest under Section 163(j) of the Code; • making us more vulnerable to economic or industry downturns, including interest rate increases; and • placing us at a competitive disadvantage compared to less leveraged competitors. 30 Moreover, we may be required to raise substantial additional capital to execute our business strategy.
The amount of such indebtedness could have material adverse consequences for us, including: • hindering our ability to adjust to changing market, industry or economic conditions; limiting our ability to access the capital markets to raise additional equity or refinance maturing debt on favorable terms or to fund acquisitions or emerging businesses; • limiting the amount of cash flow available for future operations, acquisitions, dividends, stock repurchases or other uses; • limiting our ability to deduct interest under Section 163(j) of the Code; • making us more vulnerable to economic or industry downturns, including interest rate increases; and • placing us at a competitive disadvantage compared to less leveraged competitors.
Revisions in U.S. federal tax laws and interpretations thereof could cause us to change our investments, commitments and strategies, which could also affect the tax considerations of an investment in our stock. Complying with the REIT requirements may limit our ability to hedge effectively. The REIT provisions of the Code may limit our ability to hedge our assets and operations.
Revisions in U.S. federal tax laws and interpretations thereof could cause us to change our investments, commitments and strategies, which could also affect the tax considerations of an investment in our stock. 41 Complying with the REIT requirements may limit our ability to hedge effectively.
In connection with the closing of the Merger, we received an opinion of counsel to the effect that WMC qualified as a REIT for U.S. federal income tax purposes through the time of the Merger. However, we did not request a ruling from the IRS that WMC qualified as a REIT.
In connection with the closing of our acquisition of WMC in 2023, we received an opinion of counsel to the effect that WMC qualified as a REIT for U.S. federal income tax purposes through the time of the acquisition. However, we did not request a 42 ruling from the IRS that WMC qualified as a REIT.
To the extent such other investment vehicles acquire or divest of the same target assets as us, the scope of opportunities otherwise available to us may be adversely affected and/or reduced. We have broad investment guidelines, and we have co-invested and may co-invest with TPG Angelo Gordon funds in a variety of investments.
To the extent such other investment vehicles acquire or divest of the same target assets as us, the scope of opportunities otherwise available to us may be adversely affected and/or reduced. We have broad investment guidelines, and we have co-invested and may co-invest with funds managed by TPG and its affiliates in a variety of investments.
Uncertainty about the effect of the acquisition of TPG Angelo Gordon with TPG on employees, clients and business of TPG Angelo Gordon, as well as time and attention required by our management team and other personnel of our Manager to integration and other matters related to the acquisition or TPG, may have an adverse effect on TPG Angelo Gordon and subsequently on us and the other funds managed by TPG Angelo Gordon.
Uncertainty about the effect of such acquisition on employees, clients and business of TPG Angelo Gordon, as well as time and attention required by our management team and other personnel of our Manager to integration and other matters related to the acquisition or TPG, may have an adverse effect on our Manager and subsequently on us and the other funds managed by our Manager and its affiliates, including TPG Credit funds.
TPG Angelo Gordon and its affiliates may at certain times simultaneously seek to purchase or sell the same or similar investments for clients or for themselves. Likewise, our Manager may on our behalf purchase or sell an investment in which another TPG Angelo Gordon client or affiliate is already invested or has co-invested.
TPG and its affiliates may at certain times simultaneously seek to purchase or sell the same or similar investments for clients or for themselves. Likewise, our Manager may on our behalf purchase or sell an investment in which another TPG client or affiliate is already invested or has co-invested. Such transactions may differ across TPG clients or affiliates.
While the implications and any actual changes to current regulatory regimes are currently unknown, such uncertainty may result in increasing the economic and compliance costs for participants in the mortgage origination and securitization industries, including us. We invest in Agency-Eligible Loans, which expose us to an increased risk of loss.
See "—Our business is subject to extensive regulation." While the implications and any actual changes to current regulatory regimes are currently unknown, such uncertainty may result in increasing the economic and compliance costs for participants in the mortgage origination and securitization industries, including us. We invest in Agency-Eligible Loans, which expose us to an increased risk of loss.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeTPG has informed us that it also conducts annual assessments of our cybersecurity program using industry standard cybersecurity frameworks, such as the NIST Cybersecurity Framework, as benchmarks to perform its evaluation. This does not imply that TPG, its affiliates or we fully meet any particular industry standards, specifications, or requirements.
Biggest changeTPG’s cybersecurity team itself performs both automated monitoring on a continuous basis and manual reviews of key controls. TPG has informed us that it also conducts annual assessments of our cybersecurity program using industry standard cybersecurity frameworks, such as the NIST Cybersecurity Framework, as benchmarks to perform its evaluation.
The Chief Information Security Officer reports at least annually to our Board of Directors, including the Audit Committee, and such report may address overall assessment of the Company’s compliance with this and other cybersecurity policies, including topics such as risk assessment, risk management and control decisions, service provider arrangements, test results, security incidents and responses, and recommendations for changes and updates to policies and procedures.
The Chief Information Security Officer ("CISO") reports at least annually to our Board of Directors, including the Audit Committee, and such report may address overall assessment of the Company’s compliance with this and other cybersecurity policies, including topics such as risk assessment, risk management and control decisions, service provider arrangements, test results, security incidents and responses, and recommendations for changes and updates to policies and procedures.
We, in conjunction with our Manager and its affiliates, have adopted processes designed to identify, assess and manage material risks from cybersecurity threats. These processes include assessments of internal and external threats to the confidentiality, integrity and availability of the Company’s data and systems along with other material risks to its operations.
We, in conjunction with our Manager and its affiliates, have adopted processes designed to identify, assess and manage material risks from cybersecurity threats. These processes include risk assessments of internal and external threats to the confidentiality, integrity and availability of the Company’s data and systems along with other material risks to its operations.
In addition, the Audit Committee of our Board of Directors (the “Audit Committee”) oversees the management of systemic risks, including cybersecurity, in accordance with its charter. The Audit Committee engages in regular 47 discussions with management regarding the Company’s significant financial risk exposures and the measures implemented to monitor and control these risks.
In addition, the Audit Committee of our Board of Directors (the “Audit Committee”) oversees the management of systemic risks, including cybersecurity, in accordance with its charter. The Audit Committee engages in regular discussions with management regarding the Company’s significant financial risk exposures and the measures implemented to monitor and control these risks.
Operational responsibility for ensuring the adequacy and effectiveness of our Manager's risk management, control and governance processes is assigned to TPG’s Chief Information Security Officer ("CISO"), who periodically reports, among other things, potentially material cybersecurity incidents to the ORC and reports to the ERC at least annually.
Operational responsibility for ensuring the adequacy and effectiveness of our Manager's risk management, control and governance processes is assigned to TPG’s CISO, who periodically reports, among other things, potentially material cybersecurity incidents to the ORC and reports to the ERC at least annually.
TPG also has policies and controls in place designed to detect and respond to cybersecurity events, including an incident response plan, an incident response team with dedicated roles and responsibilities for assessing and responding to a cybersecurity event, system logging and ongoing monitoring, and periodic training exercises simulating cybersecurity events that are designed to raise awareness and test the team’s response readiness capabilities.
TPG also has policies and controls in place designed to detect and respond to cybersecurity events, including an incident response plan, an incident response team with dedicated roles and responsibilities for assessing and responding to a cybersecurity event, system logging and ongoing monitoring, and periodic training exercises simulating cybersecurity events that are designed to raise awareness and test the team’s response readiness capabilities. 47 T he nature, scope and effectiveness of these controls are regularly reviewed through a series of internal and external processes.
In addition, independent reviews of our cybersecurity control effectiveness are conducted by TPG’s internal audit team on a periodic basis. We also engage external providers to conduct periodic external assessments, including penetration testing.
This does not imply that TPG, its affiliates or we fully meet any particular industry standards, specifications, or requirements. In addition, independent reviews of our cybersecurity control effectiveness are conducted by TPG’s internal audit team on a periodic basis. We also engage external providers to conduct periodic external assessments, including penetration testing.
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T he nature, scope and effectiveness of these controls are regularly reviewed through a series of internal and external processes. TPG’s cybersecurity team itself performs both automated monitoring on a continuous basis and manual reviews of key controls.
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When we engage service providers who will have access to sensitive data or TPG's systems and facilities, TPG's cybersecurity team assesses each service provider’s administrative and technical security controls.
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In addition, as appropriate, the Company seeks to include provisions in its service provider agreements that address its and TPG's requirements as well as industry best practices related to data and cybersecurity, as well as the rights of the Company and TPG to assess, monitor, audit and test such service providers’ cybersecurity programs and practices.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES As of December 31, 2024, we did not own any real estate or other physical property materially important to our operations. Our principal executive offices are located at 245 Park Avenue, 26th Floor, New York, New York 10167. Our telephone number is (212) 692-2000.
Biggest changeITEM 2. PROPERTIES As of December 31, 2025, we did not own any real estate or other physical property materially important to our operations. Our principal executive offices are located at 245 Park Avenue, 26th Floor, New York, New York 10167. Our telephone number is (212) 692-2000. 48

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAs of the date of this report, we are not party to any litigation or legal proceedings, or to our knowledge, any threatened litigation or legal proceedings, which we believe, individually or in the aggregate, would have a material adverse effect on our results of operations or financial condition. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 48 PART II
Biggest changeAs of the date of this report, we are not party to any litigation or legal proceedings, or to our knowledge, any threatened litigation or legal proceedings, which we believe, individually or in the aggregate, would have a material adverse effect on our results of operations or financial condition. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 49 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeYear Ended December 31, 2024 Year Ended December 31, 2023 High Sales Price Low Sales Price High Sales Price Low Sales Price First Quarter $ 6.60 $ 5.62 $ 7.05 $ 4.96 Second Quarter 6.99 5.44 6.33 4.91 Third Quarter 7.95 6.27 6.89 5.35 Fourth Quarter 7.65 6.59 6.53 4.82 Year Ended December 31, 2024 Year Ended December 31, 2023 Declaration Date Record Date Payment Date Cash Dividend Per Share Declaration Date Record Date Payment Date Cash Dividend Per Share 3/15/2024 3/29/2024 4/30/2024 $ 0.18 3/15/2023 3/31/2023 4/28/2023 $ 0.18 6/13/2024 6/28/2024 7/31/2024 0.19 6/15/2023 6/30/2023 7/31/2023 0.18 9/16/2024 9/30/2024 10/31/2024 0.19 9/15/2023 9/29/2023 10/31/2023 0.18 12/16/2024 12/31/2024 1/31/2025 0.19 10/24/2023 11/3/2023 11/8/2023 0.08 11/20/2023 11/30/2023 1/2/2024 0.05 12/15/2023 12/29/2023 1/31/2024 0.05 Total $ 0.75 Total $ 0.72 Although we intend to continue to declare quarterly dividends, no assurances can be made as to the amount of any future dividend.
Biggest changeYear Ended December 31, 2025 Year Ended December 31, 2024 High Sales Price Low Sales Price High Sales Price Low Sales Price First Quarter $ 7.91 $ 6.02 $ 6.60 $ 5.62 Second Quarter 7.95 5.63 6.99 5.44 Third Quarter 7.97 6.86 7.95 6.27 Fourth Quarter 9.07 6.92 7.65 6.59 Year Ended December 31, 2025 Year Ended December 31, 2024 Declaration Date Record Date Payment Date Cash Dividend Per Share Declaration Date Record Date Payment Date Cash Dividend Per Share 3/17/2025 3/31/2025 4/30/2025 $ 0.20 3/15/2024 3/29/2024 4/30/2024 $ 0.18 6/17/2025 6/30/2025 7/31/2025 0.21 6/13/2024 6/28/2024 7/31/2024 0.19 9/15/2025 9/30/2025 10/31/2025 0.21 9/16/2024 9/30/2024 10/31/2024 0.19 12/15/2025 12/31/2025 1/30/2026 0.23 12/16/2024 12/31/2024 1/31/2025 0.19 Total $ 0.85 Total $ 0.75 Although we intend to continue to declare quarterly dividends, no assurances can be made as to the amount of any future dividend.
As of December 31, 2024, approximately $1.5 million of common stock remained authorized for future share repurchases under the 2022 Repurchase Program. On May 4, 2023, our Board of Directors authorized a stock repurchase program (the “2023 Repurchase Program”) to repurchase up to $15.0 million of our outstanding common stock on substantially the same terms as the 2022 Repurchase Program.
As of December 31, 2025, approximately $1.5 million of common stock remained authorized for future share repurchases under the 2022 Repurchase Program. On May 4, 2023, our Board of Directors authorized a stock repurchase program (the “2023 Repurchase Program”) to repurchase up to $15.0 million of our outstanding common stock on substantially the same terms as the 2022 Repurchase Program.
The 47 holders of record include Cede & Co., which holds shares as nominee for The Depository Trust Company, which itself holds shares on behalf of the beneficial owners of our common stock. Such information was obtained through our registrar and transfer agent, based on the results of a broker search.
The 40 holders of record include Cede & Co., which holds shares as nominee for The Depository Trust Company, which itself holds shares on behalf of the beneficial owners of our common stock. Such information was obtained through our registrar and transfer agent, based on the results of a broker search.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market and dividend information Our common stock is traded on the New York Stock Exchange ("NYSE") under the symbol "MITT." As of March 3, 2025, there were 29,658,830 shares of common stock outstanding and approximately 47 registered holders of our common stock.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market and dividend information Our common stock is traded on the New York Stock Exchange ("NYSE") under the symbol "MITT." As of February 17, 2026, there were 31,735,457 shares of common stock outstanding and approximately 40 registered holders of our common stock.
As of December 31, 2024, the full $15.0 million authorized amount remains available for repurchase under the 2023 Repurchase Program. See Note 11 of the “Notes to Consolidated Financial Statements” for details on our purchases of common stock pursuant to our stock repurchase programs during year ended December 31, 2024. 49 ITEM 6. RESERVED
This authorization is in addition to the amount remaining under the 2022 Repurchase Program. As of December 31, 2025, the full $15.0 million authorized amount remains available for repurchase under the 2023 Repurchase Program. We did not repurchase any shares of our common stock during the years ended December 31, 2025 and 2024.
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See Note 11 of the “Notes to Consolidated Financial Statements” for additional details related to our repurchase programs. ITEM 6. RESERVED 50

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYear Ended December 31, 2024 compared to the Year Ended December 31, 2023 The table below presents certain information from our consolidated statements of operations for the years ended December 31, 2024 and 2023 (in thousands): Years Ended Change December 31, 2024 December 31, 2023 Statement of Operations Data: Net Interest Income Interest income $ 408,495 $ 260,329 $ 148,166 Interest expense 342,603 212,500 130,103 Total Net Interest Income 65,892 47,829 18,063 Other Income/(Loss) Net interest component of interest rate swaps 7,617 6,680 937 Net realized gain/(loss) (2,918) 7,697 (10,615) Net unrealized gain/(loss) 16,956 1,450 15,506 Bargain purchase gain — 30,190 (30,190) Total Other Income/(Loss) 21,655 46,017 (24,362) Expenses Management fee to affiliate 7,533 7,711 (178) Non-investment related expenses 10,732 10,077 655 Investment related expenses 13,522 9,808 3,714 Transaction related expenses 3,164 11,076 (7,912) Total Expenses 34,951 38,672 (3,721) Income/(loss) before equity in earnings/(loss) from affiliates 52,596 55,174 (2,578) Equity in earnings/(loss) from affiliates 3,141 (1,390) 4,531 Net Income/(Loss) 55,737 53,784 1,953 Dividends on preferred stock (19,353) (18,344) (1,009) Net Income/(Loss) Available to Common Stockholders $ 36,384 $ 35,440 $ 944 Interest income Interest income is calculated using the effective interest method for our GAAP investment portfolio.
Biggest changeOur primary source of net income or loss available to common stockholders is our net interest income, inclusive of our cost or benefit of hedging, which represents the difference between the interest earned on our investment portfolio and the costs of financing and economic hedges in place on our investment portfolio, as well as any income or losses from our equity investments in affiliates which includes operating income/(loss) from Arc Home. 55 Year Ended December 31, 2025 compared to the Year Ended December 31, 2024 The table below presents certain information from our consolidated statements of operations for the years ended December 31, 2025 and 2024 (in thousands): Years Ended Change December 31, 2025 December 31, 2024 Statement of Operations Data: Net Interest Income Interest income $ 480,330 $ 408,495 $ 71,835 Interest expense 403,797 342,603 61,194 Total Net Interest Income 76,533 65,892 10,641 Other Income/(Loss) Net interest component of interest rate swaps 3,447 7,617 (4,170) Net realized gain/(loss) (11,083) (2,918) (8,165) Net unrealized gain/(loss) 20,853 16,956 3,897 Total Other Income/(Loss) 13,217 21,655 (8,438) Expenses Management fee to affiliate 9,266 7,533 1,733 Non-investment related expenses 10,819 10,620 199 Investment related expenses 15,625 13,522 2,103 Transaction related expenses 7,305 3,164 4,141 Total Expenses 43,015 34,839 8,176 Income/(loss) before equity in earnings/(loss) from affiliates 46,735 52,708 (5,973) Equity in earnings/(loss) from affiliates 2,821 3,141 (320) Net Income/(Loss) before Income Taxes 49,556 55,849 (6,293) Income tax expense 888 112 776 Net Income/(Loss) 48,668 55,737 (7,069) Dividends on preferred stock 21,242 19,353 1,889 Net Income/(Loss) Available to Common Stockholders $ 27,426 $ 36,384 $ (8,958) Interest income Interest income is calculated using the effective interest method for our GAAP investment portfolio.
Our presentation of EAD may not be comparable to similarly-titled measures of other companies, who may use different calculations. This non-GAAP measure should not be considered a substitute for, or superior to, Net Income/(loss) available to common stockholders or Earnings/(loss) per diluted common share calculated in accordance with GAAP.
Our presentation of EAD may not be comparable to similarly-titled measures of other companies, who may use different calculations. This non-GAAP measure should not be considered a substitute for, or superior to, Net Income/(loss) available to common stockholders or Net income/(loss) per diluted common share calculated in accordance with GAAP.
We define GAAP leverage as the sum of (1) GAAP Securitized debt, at fair value, (2) our GAAP Financing arrangements, net of any restricted cash posted on such financing arrangements, (3) Senior unsecured notes, and (4) the amount payable on purchases that have not yet settled less the financing remaining on sales that have not yet settled.
We define GAAP leverage as the sum of (1) Securitized debt, at fair value, (2) Financing arrangements, net of any restricted cash posted on such financing arrangements, (3) Senior Unsecured Notes, and (4) the amount payable on purchases that have not yet settled less the financing remaining on sales that have not yet settled.
The AG Mortgage Investment Trust, Inc. 2021 Manager Equity Incentive Plan (the "2021 Manager Plan"), which became effective on April 7, 2021 following the approval of our stockholders at our 2021 annual meeting of stockholders, provides for a maximum of 573,425 shares of common stock that may be subject to awards thereunder to our Manager.
Manager Equity Incentive Plans The AG Mortgage Investment Trust, Inc. 2021 Manager Equity Incentive Plan (the "2021 Manager Plan"), which became effective on April 7, 2021 following the approval of our stockholders at our 2021 annual meeting of stockholders, provides for a maximum of 573,425 shares of common stock that may be subject to awards thereunder to our Manager.
Accordingly, our failure to qualify as a REIT could have a material adverse impact on our results of operations and our ability to pay distributions, if any, to our stockholders. Even if we qualify for taxation as a REIT, we may be subject to some U.S. federal, state and local taxes on 75 our income or property.
Accordingly, our failure to qualify as a REIT could have a material adverse impact on our results of operations and our ability to pay distributions, if any, to our stockholders. Even if we qualify for taxation as a REIT, we may be subject to some U.S. federal, state and local taxes on our income or property.
Specifically, we may seek to hedge our exposure to potential interest rate mismatches between the interest we earn on our investments and our borrowing costs caused by fluctuations in short-term interest rates. We may utilize interest rate swaps, swaption agreements, and other financial instruments such as short positions in to-be-announced securities.
Specifically, we may seek to hedge our exposure to potential interest rate mismatches between the interest we earn on 68 our investments and our borrowing costs caused by fluctuations in short-term interest rates. We may utilize interest rate swaps, swaption agreements, and other financial instruments such as short positions in to-be-announced securities.
The 2022 Repurchase Program does not obligate us to acquire any particular amount of shares and may be modified or discontinued at any time. As of the date of this filing, approximately $1.5 million of common stock remained authorized for future share repurchases under the 2022 Repurchase Program.
The 2022 Repurchase Program does not obligate us to acquire any particular amount of shares and may be modified or discontinued at any time. As of the date of this filing, approximately $1.5 million of common stock remained 70 authorized for future share repurchases under the 2022 Repurchase Program.
We currently have several subsidiaries that rely on the exclusion provided by Section 3(c)(7) of the Investment Company Act, each a "3(c)(7) subsidiary." In addition, we currently have several subsidiaries that rely on the exclusion provided by Section 3(c)(5)(C) of the Investment Company Act, each a "3(c)(5)(C) subsidiary." While investments in 3(c)(7) subsidiaries are considered investment securities for the purposes of the 40% Test, investments in 3(c)(5)(C) subsidiaries are not considered investment securities for the purposes of the 40% Test, nor are investments in subsidiaries that rely on the exclusion provided by Section 3(a)(1)(C).
We currently have several subsidiaries that rely on the exclusion provided by Section 3(c)(7) of the Investment Company Act, each a "3(c)(7) subsidiary." In addition, we currently have several subsidiaries that rely on the exclusion provided by Section 76 3(c)(5)(C) of the Investment Company Act, each a "3(c)(5)(C) subsidiary." While investments in 3(c)(7) subsidiaries are considered investment securities for the purposes of the 40% Test, investments in 3(c)(5)(C) subsidiaries are not considered investment securities for the purposes of the 40% Test, nor are investments in subsidiaries that rely on the exclusion provided by Section 3(a)(1)(C).
Lenders also issue margin calls as the published current principal balance factors change on the pool of mortgages underlying the securities pledged as collateral when scheduled and unscheduled paydowns are announced monthly. We experience margin calls in the ordinary course of our business.
Lenders also issue margin calls as the published current principal balance factors change on the pool 69 of mortgages underlying the securities pledged as collateral when scheduled and unscheduled paydowns are announced monthly. We experience margin calls in the ordinary course of our business.
The weighted average yield represents an effective interest rate on our cost basis, which utilizes all estimates of future cash flows and adjusts for actual prepayment and cash flow activity as of quarter-end. The calculation of weighted average yield is weighted on amortized cost at year end.
The weighted average yield represents an effective interest rate on our cost basis, which utilizes all estimates of future cash flows and adjusts for actual prepayment and cash flow activity as of quarter-end. The calculation of weighted average yield is weighted on amortized cost at quarter-end.
Critical accounting estimates We prepare our consolidated financial statements in conformity with GAAP, which requires the use of estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period.
Critical accounting policies and estimates We prepare our consolidated financial statements in conformity with GAAP, which requires the use of estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period.
Our risks associated with our involvement with these VIEs are limited to 74 our risks and rights as a holder of the security we have retained as well as certain risks which may occur when we act as either the sponsor and/or depositor of and the seller to the securitization entities.
Our risks associated with our involvement with these VIEs are limited to our risks and rights as a holder of the security we have retained as well as certain risks which may occur when we act as either the sponsor and/or depositor of and the seller to the securitization entities.
On February 22, 2021, our Board of Directors authorized a stock repurchase program (the "Preferred Repurchase Program") pursuant to which our Board of Directors granted a repurchase authorization to acquire shares of our Series A Preferred Stock, 69 Series B Preferred Stock, and Series C Preferred Stock having an aggregate value of up to $20.0 million.
On February 22, 2021, our Board of Directors authorized a stock repurchase program (the "Preferred Repurchase Program") pursuant to which our Board of Directors granted a repurchase authorization to acquire shares of our Series A Preferred Stock, Series B Preferred Stock, and Series C Preferred Stock having an aggregate value of up to $20.0 million.
The liabilities of the securitization vehicles, which are also consolidated on our consolidated balance sheets, are non-recourse to us, and can only be satisfied using proceeds from each securitization vehicle’s respective assets. The assets of securitization entities are comprised of residential mortgage loans.
The liabilities of the securitization vehicles, which are also consolidated on our 75 consolidated balance sheets, are non-recourse to us, and can only be satisfied using proceeds from each securitization vehicle’s respective assets. The assets of securitization entities are comprised of residential mortgage loans.
For a reconciliation of our Investment portfolio to our GAAP Investment portfolio, see the GAAP Investment Portfolio Reconciliation Table below. Book value per share The below table details book value per common share. Per share amounts for book value are calculated using all outstanding common shares in accordance with GAAP as of year-end.
For a reconciliation of our Investment portfolio to our GAAP Investment portfolio, see the GAAP Investment Portfolio Reconciliation Table below. 54 Book value per share The below table details book value per common share. Per share amounts for book value are calculated using all outstanding common shares in accordance with GAAP as of year-end.
As a result, in reacting to market conditions and taking into account a variety of 59 other factors, including liquidity, duration, and interest rate expectations, the mix of our assets changes over time as we deploy capital.
As a result, in reacting to market conditions and taking into account a variety of other factors, including liquidity, duration, and interest rate expectations, the mix of our assets changes over time as we deploy capital.
Earnings Available for Distribution One of our objectives is to generate net income from net interest margin on the portfolio, and management uses EAD, as one of several metrics, to help measure our performance against this objective.
Earnings Available for Distribution One of our objectives is to generate net income from net interest margin on our portfolio, and management uses EAD, as one of several metrics, to help measure our performance against this objective.
(3) Maximum loss exposure from our involvement with VIEs pertains to the fair value of the Certificates retained from the VIEs. We have no obligation to provide any other explicit or implicit support to the securitization trusts.
(3) Maximum loss exposure from our involvement with VIEs pertains to the fair value of the Certificates retained from the VIEs. We generally have no obligation to provide any other explicit or implicit support to the securitization trusts.
Before we pay any dividend, whether for U.S. 67 federal income tax purposes or otherwise, we must first meet both our operating requirements and debt service on our financing arrangements and other debt payable.
Before we pay any dividend, whether for U.S. federal income tax purposes or otherwise, we must first meet both our operating requirements and debt service on our financing arrangements and other debt payable.
Although our estimates contemplate conditions as of December 31, 2024 and how we expect them to change in the future, it is reasonably possible that actual conditions could be different than anticipated in arriving at those estimates, which could materially affect reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the periods presented.
Although our estimates contemplate conditions as of December 31, 2025 and how we expect them to change in the future, it is reasonably possible that actual conditions could be different than anticipated in arriving at those estimates, which could materially affect reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the periods presented.
Differences between taxable income and GAAP net income include (i) unrealized gains and losses associated with investment and derivative portfolios which are marked-to-market in current income for GAAP purposes, but excluded from taxable income until realized or settled, (ii) temporary differences related to amortization of premiums and discounts paid on investments, (iii) the timing and amount of deductions related to stock-based compensation, (iv) temporary differences related to the recognition of realized gains and losses on sold investments and certain terminated derivatives, (v) taxes, (vi) methods of depreciation, and (vii) differences between GAAP income or losses in our TRSs and taxable income resulting from dividend distributions to the REIT from our TRSs.
Differences between taxable income and GAAP net income include (i) unrealized gains and losses associated with investment and derivative portfolios which are marked-to-market in current income for GAAP purposes, but excluded from taxable income until realized or settled, (ii) temporary differences related to amortization of premiums and discounts paid on investments, (iii) the timing and amount of deductions related to stock-based compensation, (iv) temporary differences related to the recognition of realized gains and losses on sold investments and certain terminated derivatives, (v) taxes, and (vi) differences between GAAP income or losses in our TRSs and taxable income resulting from dividend distributions to the REIT from our TRSs.
As of December 31, 2024 and December 31, 2023, no event of termination of the management agreement had occurred. Expense Reimbursement Our Manager uses the proceeds from its management fee in part to pay compensation to its officers and personnel, who, notwithstanding that certain of them also are our officers, receive no compensation directly from us.
As of December 31, 2025 and December 31, 2024, no event of termination of the management agreement had occurred. Expense reimbursement Our Manager uses the proceeds from its management fee in part to pay compensation to its officers and personnel, who, notwithstanding that certain of them also are our officers, receive no compensation directly from us.
For example, these restrictions limit our and our subsidiaries’ ability to invest directly in Agency RMBS that represent less than the entire ownership in a pool of mortgage loans or debt and equity tranches of Non-Agency RMBS (in each case to the extent such interest are not retained interest in securitizations consisting of mortgage loans that were owned by us and such securitizations were not sponsored by us in order to obtain financing to acquire additional mortgage loans), certain real estate companies and assets not related to real estate.
For example, these restrictions limit our and our 3(c)(5)(C) subsidiaries’ ability to invest directly in Agency RMBS that represent less than the entire ownership in a pool of mortgage loans or debt and equity tranches of Non-Agency RMBS (in each case to the extent such interest are not retained interest in securitizations consisting of mortgage loans that were owned by us and such securitizations were not sponsored by us in order to obtain financing to acquire additional mortgage loans), certain real estate companies and assets not related to real estate.
For additional information on our commitments as of December 31, 2024, refer to Note 12 of the "Notes to Consolidated Financial Statements." We do not expect these commitments, taken as a whole, to be significant to, or to have a material impact on, our overall liquidity or capital resources or our operations.
For additional information on our commitments as of December 31, 2025, refer to Note 12 of the "Notes to Consolidated Financial Statements." We do not expect these commitments, taken as a whole, to be significant to, or to have a material impact on, our overall liquidity or capital resources or our operations.
Stockholders’ Equity, for purposes of calculating the management fee, could be greater or less than the amount of stockholders’ equity shown on our financial statements. The below table details the management fees incurred during the years ended December 31, 2024 and 2023 (in thousands).
Stockholders’ Equity, for purposes of calculating the management fee, could be greater or less than the amount of stockholders’ equity shown on our financial statements. The below table details the management fees incurred during the years ended December 31, 2025 and 2024 (in thousands).
The annual incentive fee will be payable in cash, or, at the option of our Board of Directors, shares of common stock or a combination of cash and shares. During the years ended December 31, 2024 and 2023, we did not incur any incentive fee expense.
The annual incentive fee will be payable in cash, or, at the option of our Board of Directors, shares of common stock or a combination of cash and shares. During the years ended December 31, 2025 and 2024, we did not incur any incentive fee expense.
Refer to the "Liquidity risk – derivatives" section of Item 3 below for a further discussion on margin. Cash Flows The table below details changes to our cash, cash equivalents, and restricted cash for the years ended December 31, 2024 and 2023 (in thousands).
Refer to the "Liquidity risk – derivatives" section of Item 3 below for a further discussion on margin. Cash flows The table below details changes to our cash, cash equivalents, and restricted cash for the years ended December 31, 2025 and 2024 (in thousands).
If we are determined to be the primary beneficiary of these securitization transactions, we consolidate the respective VIE created to facilitate the transaction and record "Securitized residential mortgage loans" and "Securitized debt" on the consolidated balance sheets in accordance with U.S. GAAP. However, as noted above, our equity at risk represents certain Certificates from each securitization which we retain.
If we are determined to be the primary beneficiary of these securitization transactions, we consolidate the respective VIE created to facilitate the transaction and record "Securitized residential mortgage loans" and "Securitized debt" on the consolidated balance sheets in accordance with U.S. GAAP. However, our equity at risk represents certain Certificates from each securitization which we retain.
We typically use cash to repay principal and interest on our financing arrangements and senior unsecured notes, to purchase loans, real estate securities, and other real estate related assets, to make dividend payments on our capital stock, to repurchase our capital stock, and to fund our operations.
We typically use cash to repay principal and interest on our securitized debt, financing arrangements and senior unsecured notes, to purchase loans, real estate securities, and other real estate related assets, to make dividend payments on our capital stock, to repurchase our capital stock, and to fund our operations.
Refer to Note 5 to the "Notes to Consolidated Financial Statements" in Part II, Item 8 of this Annual Report on Form 10-K, for additional information on our assets and liabilities accounted for at fair value at December 31, 2024, including the significant inputs used to estimate their fair values and the impact the changes in their fair values had to our financial condition and results of operations.
Refer to Note 5 to the "Notes to Consolidated Financial Statements" in Part II, Item 8 of this Annual Report on Form 10-K, for additional information on our assets and liabilities accounted for at fair value at December 31, 2025, including the significant 74 inputs used to estimate their fair values and the impact the changes in their fair values had to our financial condition and results of operations.
We expect to either hold the Legacy WMC Commercial Investments until maturity or opportunistically exit these investments. • Our "GAAP Residential Investments" refer to our Residential Investments excluding investments held within affiliated entities. • Our "GAAP Investment portfolio" includes our GAAP Residential Investments, Agency RMBS, and Legacy WMC Commercial Investments and Other Securities.
We expect to either hold the Legacy WMC Commercial Investments until maturity or opportunistically exit these investments. • Our "GAAP Residential Investments" refer to our Residential Investments excluding investments held within affiliated entities. • Our "GAAP Investment portfolio" includes our GAAP Residential Investments, Agency RMBS, and Legacy WMC Commercial Investments.
See below for further terms used when describing our investment portfolio. • Our "Investment portfolio" includes our Residential Investments, Agency RMBS, inclusive of TBAs, and Legacy WMC Commercial Investments. • Our "Residential Investments" refer to our residential mortgage loans and Non-Agency RMBS. ◦ "Residential mortgage loans" or "Loans" refer to our Non-Agency Loans, Agency-Eligible Loans, Home Equity Loans, and Re/Non-Performing Loans (exclusive of retained tranches from unconsolidated securitizations) and Land Related Financing. ◦ "Non-Agency RMBS" refer to the retained tranches from unconsolidated securitizations of Non-Agency Loans and Re/Non-Performing Loans issued under the GCAT shelf, as well as Non-Agency RMBS issued by third-parties. • "Real estate securities" refers to our Non-Agency RMBS and Agency RMBS, inclusive of TBAs, as well as Legacy WMC CMBS and Other Securities that were acquired in the WMC acquisition. • Our "Legacy WMC Commercial Investments" refer to the commercial loans and CMBS that we acquired in the WMC acquisition.
See below for further terms used when describing our investment portfolio. • Our "Investment portfolio" includes our Residential Investments, Agency RMBS, inclusive of TBAs, and Legacy WMC Commercial Investments. • Our "Residential Investments" refer to our residential mortgage loans and Non-Agency RMBS. ◦ "Residential mortgage loans" or "Loans" refer to our Non-Agency Loans, Agency-Eligible Loans, Home Equity Loans, and Re/Non-Performing Loans (exclusive of retained tranches from unconsolidated securitizations). ◦ "Non-Agency RMBS" refer to the retained tranches from unconsolidated securitizations of Non-Agency Loans and Re/Non-Performing Loans issued under the GCAT shelf, as well as Non-Agency RMBS issued by third-parties. • "Real estate securities" refers to our Non-Agency RMBS and Agency RMBS, inclusive of TBAs, as well as Legacy WMC CMBS that were acquired in the WMC Acquisition. • Our "Legacy WMC Commercial Investments" refer to the commercial loans and CMBS that we acquired in the WMC Acquisition.
Our principal sources of cash consist of borrowings under financing arrangements, principal and interest payments we receive on our investment portfolio, cash generated from our operating results, proceeds from the sale of investments, and proceeds from capital market transactions.
Our principal sources of cash consist of borrowings under securitized debt and financing arrangements, principal and interest payments we receive on our investment portfolio, cash generated from our operating results, proceeds from the sale of investments, and proceeds from capital market transactions.
We intend to maintain a level of liquidity in relation to our assets that enables us to meet reasonably anticipated margin calls but that also allows us to be substantially invested in the residential mortgage market.
We intend to maintain a level of liquidity in relation to our borrowings that enables us to meet reasonably anticipated margin calls but that also allows us to be substantially invested in the residential mortgage market.
Accordingly, we generally will not be subject to U.S. federal income taxes on our taxable income that we distribute to our stockholders as long as we maintain our intended qualification as a REIT, with the exception of business conducted in our domestic taxable REIT subsidiaries ("TRSs") which are subject to corporate income tax.
Accordingly, we generally will not be subject to U.S. federal income taxes on our taxable income that we distribute currently to our stockholders as long as we maintain our intended qualification as a REIT, with the exception of business conducted in our domestic taxable REIT subsidiaries ("TRS") which are subject to corporate income tax.
GAAP and non-GAAP cost of funds are weighted by the outstanding financing arrangements on our GAAP investment portfolio and our investment portfolio, respectively, and the amortized cost of securitized debt and senior unsecured notes at year end.
GAAP and non-GAAP cost of funds are weighted by the outstanding financing arrangements on our GAAP investment portfolio and our investment portfolio, respectively, and the amortized cost of securitized debt and senior unsecured notes at quarter-end.
Our reimbursement obligation is not subject to any dollar limitation; however, reimbursements are subject to an annual budget process which combines guidelines from the management agreement with oversight by our Board of Directors and discussions with our Manager. 71 The below table details the expense reimbursement incurred during the years ended December 31, 2024 and 2023 (in thousands).
Our reimbursement obligation is not subject to any dollar limitation; however, reimbursements are subject to an annual budget process which combines guidelines from the management agreement with oversight by our Board of Directors and discussions with our Manager. 72 The below table details the expense reimbursement incurred during the years ended December 31, 2025 and 2024 (in thousands).
We focus our investment activities primarily on acquiring and securitizing newly-originated residential mortgage loans within the non-agency segment of the housing market. We obtain our assets through Arc Home, LLC ("Arc Home"), our residential mortgage loan originator in which we own an approximate 44.6% interest, and through other third-party origination partners.
We focus our investment activities primarily on acquiring and securitizing newly-originated residential mortgage loans within the non-agency segment of the housing market. We obtain our assets through Arc Home, LLC ("Arc Home"), our residential mortgage loan originator in which we own an approximate 66.0% interest, and through other third-party origination partners.
(i) Cash and cash equivalents may include a portion of cash invested in money market funds. The yield represents the interest earned on money market funds as of period end. (j) Interest rate swaps represents the sum of the net fair value of interest rate swaps and the margin posted on interest rate swaps as of period end.
(j) Cash and cash equivalents may include a portion of cash invested in money market funds. The net interest margin represents the interest earned on money market funds as of period end. (k) Interest rate swaps represents the sum of the net fair value of interest rate swaps and the margin posted on interest rate swaps as of period end.
See the "Financing activities" section below for more detail on our leverage ratio. 60 Investment portfolio The following table presents a summary of our investment portfolio, inclusive of net interest margin and leverage ratios, as of December 31, 2024 and a reconciliation of these metrics on our Investment Portfolio to their respective metrics on our GAAP Investment Portfolio ($ in thousands).
See the "Financing activities" section below for more detail on our leverage ratio. 62 Investment portfolio The following table presents a summary of our Investment Portfolio, inclusive of net interest margin and leverage ratios, as of December 31, 2025 and a reconciliation of these metrics on our Investment Portfolio to their respective metrics on our GAAP Investment Portfolio ($ in thousands).
Our most critical accounting policies include (i) Valuation of financial instruments, (ii) Accounting for loans, (iii) Accounting for real estate securities, (iv) Interest income recognition, (v) Financing arrangements, (vi) Investment consolidation, and (vii) Accounting for business combinations.
Our most critical accounting policies include (i) Valuation of financial instruments, (ii) Accounting for loans, (iii) Accounting for real estate securities, (iv) Interest income recognition, (v) Financing arrangements, and (vi) Investment consolidation.
Investment consolidation An entity is a variable interest entity ("VIE") if the equity investors (i) do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support, (ii) are unable to direct the entity’s activities or (iii) are not exposed to the entity’s losses or entitled to its residual returns.
An entity is a VIE if the equity investors (i) do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support, (ii) are unable to direct the entity’s activities or (iii) are not exposed to the entity’s losses or entitled to its residual returns.
Legacy WMC Commercial loans See Note 3 to the "Notes to Consolidated Financial Statements" for information on the coupons, weighted average life, geographic concentration, collateral characteristics, LTV, and maturities of the loans we include in the "Commercial loans, at fair value" line item on our consolidated balance sheets. 63 Non-Agency RMBS and Legacy WMC CMBS The following table presents the fair value, coupon, and weighted average life of our Non-Agency RMBS and Legacy WMC CMBS portfolios as of December 31, 2024 ($ in thousands).
See Note 3 to the "Notes to Consolidated Financial Statements" for information on the status of the Legacy WMC Commercial loans, as well as coupons, weighted average life, geographic concentration, collateral characteristics, LTV, and maturities of the loans we include in the "Commercial loans, at fair value" line item on our consolidated balance sheets. 65 Non-Agency RMBS and Legacy WMC CMBS The following table presents the fair value, coupon, and weighted average life of our Non-Agency RMBS and Legacy WMC CMBS portfolios as of December 31, 2025 ($ in thousands).
As of December 31, 2024 and 2023, we recorded a reimbursement payable to our Manager or its affiliates of $1.7 million and $1.5 million, respectively. The reimbursement payable to the Manager or its affiliates is included within the "Due to affiliates" line item within the "Other liabilities" line item on the consolidated balance sheets.
As of December 31, 2025 and 2024, we recorded a reimbursement payable to our Manager or its affiliates of $2.1 million and $1.7 million, respectively. The reimbursement payable to the Manager or its affiliates is included within the "Due to affiliates" line item within the "Other liabilities" line item on the consolidated balance sheets.
As of December 31, 2024, there were no shares or awards issued under the 2021 Manager Plan.
As of December 31, 2025, there were no shares or awards issued under the 2021 Manager Plan.
As of December 31, 2024 and 2023, we recorded management fees payable of $2.3 million and $1.5 million, respectively. The management fee payable is included within the "Due to affiliates" item within the "Other liabilities" line item on the consolidated balance sheets.
As of December 31, 2025 and 2024, we recorded management fees payable of $2.3 million and $2.3 million, respectively. The management fee payable is included within the "Due to affiliates" item within the "Other liabilities" line item on the consolidated balance sheets.
Undistributed taxable income is based on current estimates and is not finalized until we file our annual tax return for that tax year, typically in October of the following year. As of December 31, 2024, we had estimated undistributed taxable income of approximately $0.38 per share.
Undistributed taxable income is based on current estimates and is not finalized until we file our annual tax return for that tax year, typically in October of the following year. As of December 31, 2025, we had estimated undistributed taxable income of approximately $0.12 per common share.
Unfunded commitments See Note 12 of the "Notes to Consolidated Financial Statements" for details on our commitments as of December 31, 2024. 72 Off-balance sheet arrangements Our investments in debt and equity of affiliates primarily consist of real estate securities and our interest in AG Arc.
Unfunded commitments See Note 12 of the "Notes to Consolidated Financial Statements" for detail on our commitments as of December 31, 2025. Off-balance sheet arrangements Our investments in debt and equity of affiliates primarily consist of real estate securities and our interest in AG Arc.
In connection with the closing of the Merger with WMC, the MITT Management Agreement Amendment became effective, pursuant to which (i) our Manager’s base management fee was reduced by $0.6 million for the first four quarters following the Effective Time, beginning with the fiscal quarter in which the Effective Time occurred (i.e., resulting in an aggregate $2.4 million waiver of base management fees), and (ii) our Manager waived its right to seek reimbursement from us for any expenses otherwise reimbursable by us under the management agreement in an amount equal to approximately $1.3 million, which was the excess of $7.0 million over the aggregate Per Share Additional Merger Consideration paid by our Manager to the holders of WMC Common Stock under the Merger Agreement.
In connection with the closing of the WMC acquisition, the MITT Management Agreement Amendment became effective, pursuant to which (i) our Manager’s base management fee was reduced by $0.6 million for the first four quarters following the Effective Time, beginning with the fiscal quarter in which the Effective Time occurred (i.e., resulting in an aggregate $2.4 million waiver of base management fees), and (ii) our Manager waived its right to seek reimbursement from us for any expenses otherwise reimbursable by us under the management agreement in an amount equal to approximately $1.3 million, which was the excess of $7.0 million over the aggregate per share additional merger consideration paid by our Manager to the holders of WMC Common Stock under the merger agreement. 71 Management fee The management fee is calculated and payable quarterly in arrears in an amount equal to 1.50% of our Stockholders’ Equity, per annum.
We finance our acquired loans through various financing lines on a short-term basis and utilize Angelo, Gordon & Co., L.P.'s ("TPG Angelo Gordon") proprietary securitization platform to secure long-term, non-recourse, non-mark-to-market financing as market conditions permit. Through our ownership in Arc Home, we also have exposure to mortgage banking activities.
We finance our acquired loans through various financing lines on a short-term basis and utilize TPG Inc.'s ("TPG") proprietary securitization platform to secure long-term, non-recourse, non-mark-to-market financing as market conditions permit. Through our ownership in Arc Home, we also have exposure to mortgage banking activities.
Financing arrangements are generally recourse to the Company whereas securitized debt used to finance our Non-Agency VIEs and RPL/NPL VIEs is generally non-recourse to the Company. In addition to disclosing GAAP leverage, we also disclose Economic Leverage, which excludes non-recourse financing.
As discussed above, financing arrangements are generally recourse to the Company whereas securitized debt used to finance our Non-Agency VIEs, Home Equity VIEs, and RPL/NPL VIEs is generally non-recourse to the Company. In addition to disclosing GAAP leverage, we also disclose Economic Leverage, which excludes non-recourse financing.
Typically, if interest rates increase or if credit spreads widen, then the prices of our collateral (and our unpledged assets that constitute our liquidity) will decline, we will experience margin calls, and we will need to use our liquidity to meet the margin calls.
Typically, if interest rates increase or if credit spreads widen, then the prices of our collateral (and our unpledged Agency RMBS that constitute a portion of our liquidity) will decline, we will experience margin calls, and we will need to use our liquidity to meet the margin calls.
Hedging activities Subject to maintaining our qualification as a REIT and our Investment Company Act exemption, to the extent leverage is deployed, we may utilize derivative instruments in an effort to hedge the interest rate risk associated with the financing of our portfolio.
(2) Financing arrangements and senior unsecured notes are recourse to the Company. Hedging activities Subject to maintaining our qualification as a REIT and our Investment Company Act exemption, to the extent leverage is deployed, we may utilize derivative instruments in an effort to hedge the interest rate risk associated with the financing of our portfolio.
(g) We expect to either hold the Legacy WMC Commercial Investments until maturity or opportunistically exit these investments. (h) As of December 31, 2024, there are Legacy WMC CMBS with an unpaid principal balance of $23.5 million and a fair value of $6.0 million which are on non-accrual or cost recovery status.
(g) We expect to either hold the Legacy WMC Commercial Investments until maturity or opportunistically exit these investments. (h) The Legacy WMC Commercial Loans are on non-accrual or cost-recovery status (i) There are Legacy WMC CMBS with an unpaid principal balance of $23.5 million and a fair value of $6.3 million which are on non-accrual or cost recovery status.
During the year ended December 31, 2024, the Company declared common stock dividends of $0.75 per share. During the same period, the Company declared and paid preferred stock dividends on its Series A Preferred Stock, Series B Preferred Stock, and Series C Preferred Stock of $2.06252, $2.00, and $2.233117, respectively.
During the year ended December 31, 2025, the Company declared common stock dividends of $0.85 per share. During the same period, the Company declared and paid preferred stock dividends on its Series A Preferred Stock, Series B Preferred Stock, and Series C Preferred Stock of $2.06252, $2.00, and $2.784149, respectively.
December 31, 2024 December 31, 2023 Stockholders' Equity $ 543,423 $ 528,368 Less: Liquidation preference of preferred stock (227,991) (227,991) Book Value 315,432 300,377 Common shares outstanding 29,640 29,437 Book value per common share $ 10.64 $ 10.20 53 Results of Operations for the Fiscal Years 2024 and 2023 Our operating results can be affected by a number of factors and primarily depend on the size and composition of our investment portfolio, the level of our net interest income, the fair value of our assets and the supply of, and demand for, our investments in residential mortgage loans in the marketplace, among other things, which can be impacted by unanticipated credit events, such as defaults, liquidations or delinquencies, experienced by borrowers whose residential mortgage loans are included in our investment portfolio and other unanticipated events in our markets.
December 31, 2025 December 31, 2024 Stockholders' Equity $ 560,734 $ 543,423 Less: Liquidation preference of preferred stock (227,991) (227,991) Book Value $ 332,743 $ 315,432 Common shares outstanding 31,744 29,640 Book value per common share $ 10.48 $ 10.64 Results of Operations Our operating results can be affected by a number of factors and primarily depend on the size and composition of our investment portfolio, the level of our net interest income, the fair value of our assets and the supply of, and demand for, our investments in residential mortgage loans in the marketplace, among other things, which can be impacted by unanticipated credit events experienced by borrowers whose residential mortgage loans are included in our investment portfolio, such as defaults, liquidations or delinquencies, and other unanticipated events in our markets.
Currently, our Residential Investments primarily consist of newly originated Non-Agency Loans, Agency-Eligible Loans and Home Equity Loans, which we refer to as our target assets. In addition, we may also invest in other types of residential mortgage loans and other mortgage related assets.
Currently, our Residential Investments primarily consist of Non-Agency Loans, Agency-Eligible Loans, Home Equity Loans and Non-Agency RMBS collateralized by these loan types, which we refer to as our target assets. In addition, we may also invest in other types of residential mortgage loans and other mortgage related assets.
The following table summarizes our Securitized residential mortgage loans and Securitized debt, as well as the economic interest on retained Certificates related to our Non-Agency VIEs (in thousands).
The following table summarizes our Securitized residential mortgage loans and Securitized debt, as well as the economic interest on retained Certificates related to our Non-Agency VIEs and Home Equity VIEs as of December 31, 2025 (in thousands).
(3) Cash provided by financing activities for the years ended December 31, 2024 and 2023 was primarily attributable to the issuance of securitized debt, offset by principal repayments on securitized debt, net repayments of repurchase agreements, and dividend payments.
(3) Cash provided by financing activities for the year ended December 31, 2025 was primarily attributable to the proceeds from the issuance of securitized debt, offset by principal repayments on securitized debt, net repayments of repurchase agreements, and dividend payments.
To the extent that we fail to comply with the covenants contained in these financing arrangements or are otherwise found to be in default under the terms of such agreements, the counterparty has the right to accelerate amounts due under the associated agreement. As of December 31, 2024, we are in compliance with all of our financial covenants.
To the extent that we fail to comply with the covenants contained in these financing arrangements or are otherwise found to be in default under the terms of such agreements, the counterparty has the right to accelerate amounts due under the associated agreement.
Contractual obligations Management agreement The management agreement, as amended, provides for payment to the Manager of a management fee, an incentive fee, and reimbursements of certain expenses incurred by the Manager or its affiliates on behalf of us. Pursuant to our management agreement, the closing of the TPG Transaction resulted in an assignment of the management agreement.
Contractual obligations Management agreement The management agreement, as amended, provides for payment to the Manager of a management fee, an incentive fee, and reimbursements of certain expenses incurred by the Manager or its affiliates on behalf of us.
The below tables summarize the components of the "Equity in earnings/(loss) from affiliates" line item on our consolidated statements of operations (in thousands).
The below table breaks out the components in the "Equity in earnings/(loss) from affiliates" line item on our consolidated statements of operations (in thousands).
We finance our acquired loans through various financing lines on a short-term basis and securitize the loans to obtain long-term, non-recourse, non-mark-to-market financing as market conditions permit. We may also invest in Agency RMBS to utilize excess liquidity.
Our investment activities primarily include acquiring and securitizing newly-originated residential mortgage loans. We finance our acquired loans through various financing lines on a short-term basis and securitize the loans to obtain long-term, non-recourse, non-mark-to-market financing as market conditions permit. We may also invest in Agency RMBS to utilize excess liquidity.
Weighted Average Fair Value CPR (1) Coupon Life (2) Agency RMBS Interest Only $ 20,996 5.2 % 4.32 % 6.55 (1) Represents the weighted average monthly CPRs published during the year for our in-place portfolio. (2) Weighted average life is based on projected life. Typically, actual maturities are shorter than stated contractual maturities.
Weighted Average Fair Value CPR (1) Coupon Life (Years) (2) Agency RMBS Interest Only $ 16,358 8.4 % 4.57 % 5.17 (1) Represents the weighted average monthly CPRs published during the year for our in-place portfolio. (2) Weighted average life is based on projected life. Typically, actual maturities are shorter than stated contractual maturities.
As of December 31, 2024, there were four securitizations with an unpaid principal balance of $561.9 million that met the criteria for an Optional Redemption. Securitized residential mortgage loans and Residential mortgage loans The following table presents information regarding collateral characteristics of our residential mortgage loans as of December 31, 2024 ($ in thousands).
As of December 31, 2025, there were 9 Non-Agency securitizations with an unpaid principal balance of $2.0 billion that met the criteria for an Optional Redemption. Securitized residential mortgage loans and Residential mortgage loans The following table presents information regarding collateral characteristics of our residential mortgage loans as of December 31, 2025 ($ in thousands).
The Economic Leverage Ratio excludes any fully non-recourse financing arrangements and includes any net receivables or payables on TBAs. The leverage ratio on our GAAP Investment Portfolio represents GAAP leverage as defined below in the "Financing Activities" section. (f) Substantially all of our Non-Agency Loans were sold during January 2025.
The Economic Leverage Ratio excludes any fully non-recourse financing arrangements and includes any net receivables or payables on TBAs. The leverage ratio on our GAAP Investment Portfolio represents GAAP leverage as defined below in the "Financing Activities" section. (f) The financing arrangements on Non-Agency Loans includes financing arrangements on other assets.
Management fee to affiliate Our management fee is based upon a percentage of our Stockholders’ Equity. See the "Contractual obligations" section of this Part II, Item 7 for further detail on the calculation of our management fee and for the definition of Stockholders’ Equity.
See the "Contractual obligations" section of this Part II, Item 7 for further detail on the calculation of our management fee and for the definition of Stockholders’ Equity.
Our financing strategy is designed to increase the size of our investment portfolio by borrowing against the fair value of the assets in our portfolio.
Leverage We use leverage to increase potential returns to our stockholders. Our financing strategy is designed to increase the size of our investment portfolio by borrowing against the fair value of the assets in our portfolio.
The following table presents a summary of the weighted average financing balance and the weighted average financing rate for the years ended December 31, 2024 and 2023 ($ in millions).
Additionally, there was an increase in the weighted average financing rate. The following table presents a summary of the weighted average financing balance and the weighted average financing rate for the years ended December 31, 2025 and 2024 ($ in millions).
Upon evaluating our retained interest in the securitization trusts, we determined we were not the primary beneficiary and, as a result, did not consolidate the securitization trusts and recorded an investment of $69.1 million of Non-Agency RMBS.
Upon evaluating our retained interest in the securitization trusts, we determined we were not the primary beneficiary and, as a result, did not consolidate the securitization trusts, which resulted in us recording an investment in Non-Agency RMBS.
(2) As of December 31, 2024, the fair value of our investment in Arc Home was calculated using a valuation multiple of 0.95x book value, which increased from 0.89x book value as of December 31, 2023. As of December 31, 2022, the fair value of our investment in Arc Home was calculated using a valuation multiple of 0.94x book value.
(4) As of December 31, 2025, the fair value of our investment in Arc Home was calculated using a valuation multiple of 1.025x of book value, which increased from 0.95x of book value as of December 31, 2024.
Years Ended December 31, 2024 December 31, 2023 Management fee to affiliate (1) $ 7,533 $ 7,711 (1) For the years ended December 31, 2024 and 2023, the Manager agreed to waive its right to receive management fees of $1.8 million and $0.6 million pursuant to the MITT Management Agreement Amendment executed in connection with the Merger.
Years Ended December 31, 2025 December 31, 2024 Management fee to affiliate (1) $ 9,266 $ 7,533 (1) For the year ended December 31, 2024, the Manager agreed to waive its right to receive management fees of $1.8 million pursuant to the MITT Management Agreement Amendment executed in connection with the WMC acquisition.
(2) Represents the fair value of real estate owned within Non-Agency VIEs. We record real estate owned at the lower of cost or fair value less estimated costs to sell. As of December 31, 2024, we recorded real estate owned within our Non-Agency VIEs at $1.1 million.
We record real estate owned at the lower of cost or fair value less estimated costs to sell. We recorded real estate owned within our Non-Agency VIEs at $2.1 million as of December 31, 2025. For Home Equity VIEs, represents cash held in reserve accounts within the Home Equity VIEs and included within our restricted cash.
Dividends on Preferred Stock Holders of our Series A Preferred Stock, Series B Preferred Stock, and Series C Preferred Stock are entitled to receive cumulative cash dividends at their respective rates per annum on the $25.00 per share liquidation preference for each series.
During the year ended December 31, 2024, tax expense represented minimum state and local tax filing fees. 59 Dividends on Preferred Stock Holders of our Series A Preferred Stock, Series B Preferred Stock, and Series C Preferred Stock are entitled to receive cumulative cash dividends at their respective rates per annum on the $25.00 per share liquidation preference for each series.
We also operate our business in a manner that permits us to maintain our exemption from registration under the Investment Company Act. We are externally managed by our Manager, an affiliate of TPG Angelo Gordon, pursuant to a management agreement. Our Manager has delegated to TPG Angelo Gordon, a diversified credit and real estate investing platform within TPG Inc.
We also operate our business in a manner that permits us to maintain our exemption from registration under the Investment Company Act. We are externally managed by our Manager, a wholly-owned subsidiary of TPG, pursuant to a management agreement. Our Manager has delegated to Angelo, Gordon & Co., L.P.
(2) During the year, we co-sponsored two rated securitizations collateralized by $729.9 million of Agency-Eligible Loans. As the co-sponsor, the Company retained an "eligible vertical interest" to comply with risk retention rules which consists of at least 5% of each class of securities issued in the securitizations.
As the co-sponsor, the Company retained an "eligible vertical interest" to comply with risk retention rules which consists of at least 5% of each class of securities issued in the securitizations.
Years Ended December 31, 2024 December 31, 2023 Sales of residential mortgage loans and loans transferred to or sold from Other assets $ 5,254 $ (12,079) Sales of real estate securities 12,710 (1,558) Settlement of derivatives and other instruments (20,882) 21,334 Total Net realized gain/(loss) $ (2,918) $ 7,697 55 Net unrealized gain/(loss) The following table presents a summary of Net unrealized gain/(loss) for the years ended December 31, 2024 and 2023 (in thousands).
Years Ended December 31, 2025 December 31, 2024 Sale of residential mortgage loans and loans transferred to or sold from Other assets $ (4,722) $ 5,254 Sale of real estate securities 549 12,710 Loan purchase commitment (61) — Settlement of derivatives and other instruments (6,849) (20,882) Total Net realized gain/(loss) $ (11,083) $ (2,918) Net unrealized gain/(loss) The following table presents a summary of Net unrealized gain/(loss) for the years ended December 31, 2025 and 2024 (in thousands).
These costs are nonrecurring and may include underwriting fees, legal fees, diligence fees, and other similar transaction related expenses. Recurring expenses, such as servicing fees, custodial fees, trustee fees and other similar ongoing fees are not excluded from earnings available for distribution.
Recurring expenses, such as servicing fees, custodial fees, trustee fees and other similar ongoing fees are not excluded from earnings available for distribution.
In each securitization transaction, we transfer a pool of loans to a wholly-owned subsidiary and the loans are deposited into a newly created securitization trust. The securitization trust issues various classes of mortgage pass-through certificates backed by the cash flows from the underlying residential mortgage loans (the "Certificates").
In each securitization transaction, a pool of loans is transferred into a newly formed securitization trust. The securitization trust issues various classes of mortgage pass-through certificates backed by the cash flows from the underlying residential mortgage loans (the "Certificates").
The following table presents the fair value and the Constant Prepayment Rate ("CPR") experienced on our Agency RMBS portfolio as of December 31, 2024 ($ in thousands).
The following table presents the fair value, constant prepayment rate (“CPR”), coupon, and weighted average life of our Agency RMBS portfolio as of December 31, 2025 ($ in thousands).

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeSome hedging strategies involving the use of derivatives are highly complex, may produce volatile returns and may expose us to increased risks relating to counterparty defaults. Interest rate effects on fair value Another component of interest rate risk is the effect that changes in interest rates will have on the fair value of the assets that we acquire.
Biggest changeOur Manager accomplishes this through the use of interest rate derivatives. Some hedging strategies involving the use of derivatives are highly complex, may produce volatile returns and may expose us to increased risks relating to counterparty defaults.
The following table quantifies the estimated percent change in GAAP equity, the fair value of our assets, and projected net interest income should interest rates go up or down instantaneously by 25, 50, and 75 basis points, assuming (i) the yield curves of the rate shocks will be parallel to each other and the current yield curve and (ii) all other market risk factors remain constant.
Interest rate sensitivity The following table quantifies the estimated percent change in GAAP equity, the fair value of our assets, and projected net interest income should interest rates go up or down instantaneously by 25, 50, and 75 basis points, assuming (i) the yield curves of the rate shocks will be parallel to each other and the current yield curve and (ii) all other market risk factors remain constant.
Change in Interest Rates (basis points) (1)(2) Change in Fair Value as a Percentage of GAAP Equity (3) Change in Fair Value as a Percentage of Assets (3) Percentage Change in Projected Net Interest Income (4) 75 (4.6) % (0.4) % (2.6) % 50 (3.1) % (0.2) % (1.8) % 25 (1.6) % (0.1) % (0.8) % (25) 1.6 % 0.1 % 0.2 % (50) 3.1 % 0.2 % 0.3 % (75) 4.7 % 0.4 % 0.2 % (1) Includes investments held through affiliated entities that are reported as "Investments in debt and equity of affiliates" on our consolidated balance sheet, but excludes AG Arc.
Change in Interest Rates (basis points) (1)(2) Change in Fair Value as a Percentage of GAAP Equity (3) Change in Fair Value as a Percentage of Assets (3) Percentage Change in Projected Net Interest Income (4) 75 (1.8) % (0.1) % 0.3 % 50 (1.2) % (0.1) % 0.3 % 25 (0.6) % — % 0.3 % (25) 0.6 % — % (0.4) % (50) 1.2 % 0.1 % (0.8) % (75) 1.8 % 0.1 % (1.2) % (1) Includes investments held through affiliated entities that are reported as "Investments in debt and equity of affiliates" on our consolidated balance sheet, but excludes AG Arc.
Many of these risks have become particularly heightened due to sustained inflation, rising mortgage rates, the Federal Reserve's monetary policy actions, and market uncertainty from geopolitical risks. 76 Interest rate risk Interest rate risk is highly sensitive to many factors, including governmental monetary, fiscal and tax policies, domestic and international economic and political considerations and other factors beyond our control.
Many of these risks have become particularly heightened due to sustained inflation, rising mortgage rates, the Federal Reserve's monetary policy actions, and market uncertainty from geopolitical risks. Interest rate risk Interest rate risk is highly sensitive to many factors, including governmental monetary, fiscal and tax policies, domestic and international economic and political considerations and other factors beyond our control.
Real estate value risk Residential property values are subject to volatility and may be affected adversely by a number of factors outside of our control, including, but not limited to, national, regional and local economic conditions (which may be adversely affected by industry slowdowns and other factors); local real estate conditions (such as an oversupply of housing); natural disasters, the effects of climate change (including flooding, drought, wildfire, tornados and severe weather) and other natural events; construction quality, age and design; demographic factors; and retroactive changes to building or similar codes.
Real estate value risk Residential property values are subject to volatility and may be affected adversely by a number of factors outside of our control, including, but not limited to, national, regional and local economic conditions (which may be adversely affected by industry slowdowns and other factors); local real estate conditions (such as an oversupply of housing); natural disasters, the effects of climate change (including flooding, drought, wildfire, tornadoes and severe weather) and other natural events; construction quality, age and design; demographic factors; and retroactive changes to building or similar codes.
(2) Does not include cash investments, which typically have overnight maturities and are not expected to change in value as interest rates change. (3) Changes in fair value as a percentage of GAAP equity and assets are inclusive of forward purchase commitments to acquire Non-Agency Loans and Agency-Eligible Loans as of December 31, 2024.
(2) Does not include cash investments, which typically have overnight maturities and are not expected to change in value as interest rates change. (3) Changes in fair value as a percentage of GAAP equity and assets are inclusive of forward purchase commitments to acquire Non-Agency Loans and Agency-Eligible Loans as of December 31, 2025.
The base interest rate scenario assumes spot and forward interest rates existing as of December 31, 2024. Actual results could differ materially from these estimates. Agency RMBS and Agency-Eligible Loan assumptions attempt to predict default and prepayment activity at projected interest rate levels.
The base interest rate scenario assumes spot and forward interest rates existing as of December 31, 2025. Actual results could differ materially from these estimates. Agency RMBS and Agency-Eligible Loan assumptions attempt to predict default and prepayment activity at projected interest rate levels.
In addition, while the table below reflects the estimated impact of interest rate increases and decreases on a static portfolio as of December 31, 2024, our Manager may from time to time sell any of our investments as a part of the overall management of our investment portfolio.
In addition, while the table below reflects the estimated impact of interest rate increases and decreases on a static portfolio as of December 31, 2025, our Manager may from time to time sell any of our investments as a part of the overall management of our investment portfolio.
(4) Interest income includes trades settled as of December 31, 2024. The information set forth in the interest rate sensitivity table above and all related disclosures constitute forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act.
(4) Interest income includes trades settled as of December 31, 2025. The information set forth in the interest rate sensitivity table above and all related disclosures constitute forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act.
When combined with the fact that the income we earn on our fixed interest rate investments will remain substantially unchanged, this will result in a narrowing of the net interest spread between the related assets and borrowings and may even result in losses.
When combined with the fact that the income we earn on our fixed interest rate investments will remain substantially unchanged, this will result in a narrowing of the net interest spread between the related assets and borrowings and may even result in losses. 77 In an attempt to offset the increase in funding costs related to rising interest rates, our Manager may cause us to enter into hedging transactions structured to provide us with positive cash flow in the event interest rates rise.
In general, our assets have higher duration than our liabilities. In order to reduce this exposure, we use hedging instruments to reduce the gap in duration between our assets and liabilities. We calculate estimated effective duration (i.e., the price sensitivity to changes in risk-free interest rates) to measure the impact of changes in interest rates on our portfolio value.
In general, our assets have higher duration than our liabilities. In order to reduce this exposure, we use hedging instruments to reduce the gap in duration between our assets and liabilities.
Removed
In an attempt to offset the increase in funding costs related to rising interest rates, our Manager may cause us to enter into hedging transactions structured to provide us with positive cash flow in the event interest rates rise. Our Manager accomplishes this through the use of interest rate derivatives.
Added
Interest rate effects on fair value Another component of interest rate risk is the effect that changes in interest rates will have on the fair value of the assets that we acquire.
Removed
We estimate duration based on third-party models. Different models and methodologies can produce different effective duration estimates for the same assets.
Removed
We allocate the net duration by asset type based on the interest rate sensitivity. 77 The following chart details information about our duration gap as of December 31, 2024: Duration (1)(2) Years Agency RMBS (0.06) Securitized Residential Mortgage Loans 2.95 Real Estate Securities 0.42 Hedges on securitized investments (0.53) Securitized investments subtotal 2.84 Residential Mortgage Loans (3) 0.61 Hedges on Residential Mortgage Loans (0.57) Residential Mortgage Loans subtotal 0.04 Commercial Loans (0.01) Senior Unsecured Notes (0.25) Total 2.56 (1) Duration related to financing arrangements is netted within its respective line items.
Removed
(2) Duration does not include our investment in AG Arc LLC. (3) Residential Investments are inclusive of forward purchase commitments to acquire Non-Agency Loans and Agency-Eligible Loans as of December 31, 2024.

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