Since its inception, the Company has utilized variable interest entities (“VIEs”) for the purpose of securitizing whole mortgage loans to obtain long-term non-recourse financing. The Company evaluates its interest in each VIE to determine if it is the primary beneficiary.

The Company entered into securitization transactions where it was determined that the Company has the power to direct the activities that most significantly impact the VIE’s economic performance. The Company was the sole entity to contribute residential whole mortgage loans to these securitization vehicles.

The retained beneficial interest in VIEs for which the Company is the primary beneficiary is the subordinated tranches of the securitization and further interests in additional interest‑only tranches. The following table summarizes the key details of the Company’s loan securitization transactions for which the Company is the primary beneficiary currently outstanding as of June 30, 2025 and December 31, 2024:


As of:	June 30, 2025			December 31, 2024
	($ in thousands)
Aggregate unpaid principal balance of residential whole loans sold	$	1,949,994		$	1,781,311
Fair value adjustment for residential mortgage loans in securitization trusts	(47,273)			(84,316)
Residential mortgage loans in securitization trusts, at fair value	$	1,902,721		$	1,696,995

Outstanding amount of Non-recourse securitization obligation, at amortized cost	$	1,786,393		$	1,630,083
Fair value adjustment for the portion of Non-recourse securitization obligation, at fair value option	(18,464)			(36,471)
Non-recourse securitization obligation, collateralized by residential mortgage loans in securitization trusts	$	1,767,929		$	1,593,612
Weighted average coupon rate for residential mortgage loans in securitization trusts	5.80		%	5.56		%
Weighted average fixed rate for Non-recourse securitization obligation issued	4.14		%	3.86		%


For the period ended:	June 30, 2025			December 31, 2024
	(in thousands)
Aggregate unpaid principal balance of residential whole loans sold, at deal date	$	2,611,290		$	2,326,980
Face amount of Non-recourse securitization obligation issued by the VIE and purchased by third-party investors, at deal date	$	2,464,868		$	2,194,774
Face amount of Senior Support Certificates received by the Company, at deal date	$	146,422		$	132,206
Cash received, at deal date	$	297,972		$	273,266

During the three months ended June 30, 2025, the Company and its affiliates issued and sold bonds with a current face value of $261.3 million to third-party investors for proceeds of $271.7 million, before offering costs and accrued interest. The bonds sold during the period ended June 30, 2025 are included in “Non-recourse securitization obligation, collateralized by residential mortgage loans in securitization trusts” on the Company’s condensed consolidated balance sheets.

As of June 30, 2025 and December 31, 2024, as a result of the transactions described above, securitized loans with outstanding principal balance of approximately $1.9 billion and $1.8 billion are included in “Residential mortgage loans in securitization trusts” on the Company’s condensed consolidated balance sheets, respectively. As of June 30, 2025 and December 31, 2024, the aggregate carrying value of bonds issued by consolidated VIEs was $1.8 billion and $1.6 billion, respectively. These bonds issued are disclosed as “Non-recourse securitization obligation, collateralized by residential mortgage loans in securitization trusts” on the Company’s condensed consolidated balance sheets. The holders of the securitized debt have no recourse to the general credit of the Company, but the Company does have the obligation, under certain circumstances, to repurchase assets from the VIE upon the breach of certain representations and warranties with respect to the residential whole loans sold to the VIE. In the absence of such a breach, the Company has no obligation to provide any other explicit or implicit support to any VIE.

The Company concluded that the entities created to facilitate the loan securitization transactions are VIEs. The Company completed an analysis of whether each VIE created to facilitate the securitization transactions should be consolidated by the Company, based on consideration of its involvement in each VIE and whether its involvement reflected a controlling financial interest that resulted in the Company being deemed the primary beneficiary of each VIE. In determining whether the Company would be considered the primary beneficiary, the following factors were assessed:

The Company sponsored or participated along with other affiliates and entities managed by Angel Oak Capital in the formation of various entities that were considered to be VIEs. These VIEs were formed to facilitate securitization issuances that were comprised of secured residential whole loans and/or small balance commercial loans contributed to securitization trusts.

These securities were issued as a result of the unconsolidated securitizations where the Company retained bonds from the issuances of securitizations issued by a depositor that the Company does not control. The Company determined that it was not then and is not now the primary beneficiary of any of these securitization entities, and thus has not consolidated the operating results or statements of financial position of any of these entities. The Company performs ongoing reassessments of all VIEs in which the Company has participated since its inception as to whether changes in the facts and circumstances regarding the Company’s involvement with a VIE would cause the Company’s consolidation conclusion to change, and the Company’s assessment of these VIEs remains unchanged.

The securities received in the securitization transactions for which the Company is not the primary beneficiary are either classified as “available for sale” upon receipt and are included in “RMBS - at fair value”, or are classified as “Other assets” and held at amortized cost on the condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024, and details on the accounting treatment and fair value methodology of the securities can be found in Note 9 — Fair Value Measurements. See also Note 4 — Investment Securities, for the fair value of Angel Oak Mortgage Trust (“AOMT”) securities held by the Company, and Note 13 - Other Assets, for investments in majority-owned affiliates (“MOAs”), as of June 30, 2025 and December 31, 2024 that were retained by the Company as a result of these securitization transactions.