AG Mortgage Investment Trust, Inc. (NYSE: MITT)

AG Mortgage Investment Trust, Inc. (MITT), a company that trades under the symbol MITT, is a residential mortgage real estate investment trust (REIT) operating in the U.S. mortgage market. Its primary objective is to deliver attractive risk-adjusted returns to its stockholders through dividends and capital appreciation.

MITT's main business activities revolve around investing in a diversified portfolio of residential mortgage-related assets. These investments are spread across various segments, including non-agency loans, agency-eligible loans, and non-agency residential mortgage-backed securities (RMBS). The company's investment strategy is built on rigorous credit analysis, focusing on fundamental in-depth research. MITT's Manager, AG REIT Management, LLC, makes investment decisions based on a variety of factors, including expected risk-adjusted returns, yields, relative value, credit fundamentals, and market trends.

The company generates revenue through net interest income from its investment portfolio, changes in the fair value of its investments or hedge portfolio, and income from its investment in Arc Home, a vertically integrated origination platform. Its customers include a diverse mix of investors, such as institutional investors, high-net-worth individuals, and other mortgage REITs.

MITT's competitive advantages lie in its experienced Manager, its diversified investment portfolio, and its ability to leverage its relationships with TPG Angelo Gordon and Arc Home to access investment opportunities in the non-agency residential mortgage loan market. The company competes with other residential mortgage REITs and private equity firms that invest in the mortgage industry.

In December 2023, MITT expanded its investment portfolio by $1.2 billion through the acquisition of Western Asset Mortgage Capital Corporation (WMC), an externally managed mortgage REIT. This acquisition diversified MITT's assets and added to its residential mortgage loans, real estate-related securities, and commercial real estate loans.

MITT's non-agency loans are divided into Qualified Mortgage (QM) loans and Non-Qualified Mortgage (Non-QM) loans. The agency-eligible loans are underwritten according to guidelines set by government-sponsored enterprises (GSEs) but are not guaranteed by them. These loans are primarily secured by investment properties. The non-agency RMBS are fixed- and floating-rate securities issued by entities other than U.S. GSEs or agencies of the U.S. government.

MITT's financing strategy involves using leverage to increase potential returns to its stockholders and to fund the acquisition of its investment portfolio. The company uses repurchase agreements and similar financing arrangements to finance its investments. It also utilizes long-term, non-recourse, non-mark-to-market securitizations to secure financing as market conditions permit.

MITT's risk management strategy is based on a disciplined adherence to risk-adjusted return, concurrent evaluation of interest rate and credit risk, active hedging and rebalancing of its portfolio, and a strategic approach to increased risk. The company's investment policies and procedures are approved by its Board of Directors and implemented by its Manager.