AG Mortgage Investment Trust, Inc. (NYSE:MITT) Q2 2020 Earnings Conference Call - Final Transcript

Aug 10, 2020 • 08:30 am ET

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AG Mortgage Investment Trust, Inc. (NYSE:MITT) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Welcome to AG Mortgage Investment Trust Second Quarter 2020 Earnings Call. My name is Sylvia, and I'll be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded.

I will now turn the call over to Raul Moreno. Mr. Moreno, you may begin.

Executive
Raul Moreno

Thank you, Sylvia. Good morning, everyone, and welcome to the second quarter 2020 earnings call for AG Mortgage Investment Trust, Inc.

Before we begin, please note that the information discussed on today's conference call may contain forward-looking statements. Any forward-looking statements made during today's call are subject to certain risks and uncertainties, which are outlined in the risk factors and MD&A sections of our most recent SEC filings. The Company's actual results may differ materially from these statements. We encourage you to read the disclosure regarding forward-looking statements contained in our earnings release, in our earnings presentation and in our SEC filings.

During the call today, we will refer to certain non-GAAP financial measures. Please refer to our SEC filings for reconciliations to the most comparable GAAP measures. We will also reference the earnings presentation that was posted to our website this morning. To view the slide presentation, turn to our website, www.agmit.com and click on the Q2 2020 Earnings Presentation link on the home page.

Again, welcome, and thank you for joining us today.

With that, I would like to turn the call over to our CEO, David Roberts.

Executive
David Roberts

Thank you, Raul. Good morning to everybody. As we discussed last quarter, our immediate goals have been to reduce leverage, increase liquidity and begin to restore book value. I am pleased to report that our book value per common share increased to $2.75 as of June 30, compared to an estimated range of $1.80 to $1.90 as of April 30.

In terms of leverage, we reduced our mark-to-market non-recourse financing to about $280 million this quarter -- I'm sorry, our mark-to-market recourse financing to about $280 million this quarter from $1.2 billion last quarter. This $900 million reduction came mostly from asset sales and paydowns, although we also were able to shift about $200 million of financing from mark-to-market recourse to non-mark-to-market non-recourse.

As of quarter end, our total investment portfolio was $1 billion. Our economic leverage was 0.8 times, and we had cash of nearly $70 million on hand. Our mortgage originator affiliate, Arc Home, had by far its best quarter in its history. We continue to see substantial opportunity over the longer-term for MITT in residential origination, both through Arc and our other channels.

In terms of dividends, as previously announced, we did not pay common or preferred dividends this quarter. Based on current conditions for our Company, we do not anticipate paying dividends on our common or preferred stock for the foreseeable future.

Thank you for listening. And I'll now turn the call over to T.J. Durkin, Chief Investment Officer.

Executive
T.J. Durkin

Thank you, David, and good morning, everyone. Turning to our presentation on Page 5, we walk you through our high-level