TPG Mortgage Investment Trust reported fourth-quarter and full-year 2025 results that management said reflected continued execution of its core strategy despite a challenging macroeconomic backdrop. On the call, executives highlighted stable book value, dividend growth, and ongoing rotation of capital into what they described as higher-returning residential credit strategies, alongside improved performance at portfolio company Arc Home.
Book value stability and dividend coverage
CEO and President T.J. Durkin said fourth-quarter book value per share was “stable,” rising to $10.48 from $10.46. The company generated earnings available for distribution (EAD) of $0.25 per share for the quarter, which covered the most recently declared $0.23 dividend. Including the newly declared dividend, Durkin said the company produced an economic return on equity of 2.4% for the quarter. He added that book value was “approximately flat” for January, though he cautioned it was too early to comment on the process for February.
For the full year, management said EAD totaled $0.86 per share, covering annual dividends of $0.85. Durkin said the company increased its quarterly dividend three times during 2025, for a cumulative increase of more than 21%.
Portfolio growth and securitization activity
Chief Investment Officer Nick Smith said the investment portfolio grew 27% versus 2024 to $8.5 billion, driven by more than $3 billion of total loan purchases during 2025. In the fourth quarter, Smith said the company securitized more than $1.3 billion of residential mortgage loans across three transactions.
Smith said the company completed 10 securitizations in 2025 totaling $4.2 billion. He described the company as a “programmatic issuer” in home equity, noting $2.4 billion of home equity securitizations across five transactions during the year. In the fourth quarter, MITT partnered with mortgage originators on two home equity securitizations totaling $960 million and retained $55 million of securities.
Durkin and Smith emphasized that the company maintained what they described as a conservative leverage profile. Durkin said economic leverage ended the year at 1.6 turns, which he characterized as low compared to peers.
Smith said the home equity expansion that began in late 2024 scaled rapidly, with the home equity portfolio totaling $1.1 billion of loans plus $107 million of non-agency RMBS, representing 35% of total equity allocation. He also noted the company held about $70 million of HELOCs unlevered. In the Q&A, management explained that “unlevered home equity loans” are held as a cash substitute against favorable financing capacity that is not currently utilized, intended to help offset cash drag.
Arc Home turnaround and early 2026 momentum
Management repeatedly pointed to improving results at Arc Home. Smith described 2025 as a “tale of two halves,” saying Arc Home reached an inflection point in the second quarter when it achieved breakeven earnings, followed by a consistent second half that generated a 10% annualized ROE. Smith said MITT acquired an additional 21.4% ownership interest in Arc Home in August and that, following the purchase, the company achieved record lock volumes with 34% year-over-year growth.
Smith said Arc Home’s growth was driven by a 42% increase in non-QM mortgage fundings versus the fourth quarter of 2024, and he added that Arc Home originated more than $3.4 billion in 2025. Rossiello said Arc Home contributed $0.02 per share to EAD in the fourth quarter and contributed $1.9 million to EAD for full-year 2025, compared with a $3.3 million loss in 2024. He noted Arc Home’s 2025 contribution was recognized in the second half of the year.
Management also discussed early 2026 performance. Smith said January was Arc Home’s strongest month since returning to profitability, generating monthly earnings in excess of $1 million. In response to an analyst question, management clarified that figure referred to Arc Home’s standalone profitability rather than MITT’s share of EAD. Executives said Arc Home has continued to gain market share and cited tailwinds from a “CP yield curve,” tighter credit spreads, and improved liquidity supporting healthy margins.
Capital rotation, legacy assets, and call rights
Durkin said the company was able to raise its dividend in part by optimizing legacy WMC financings, including refinancing an 11.5% structured repo in July, which he said unlocked $55 million of equity proceeds to reinvest in the core securitization strategy. He added that the company continued to carry legacy WMC commercial real estate loans on non-accrual status while working with lender groups toward dispositions, and he estimated the company had about $28 million of equity remaining in those assets.
Looking ahead, Durkin outlined three objectives for 2026:
- Resolve the legacy WMC CRE loans in the first half of the year and reinvest proceeds into higher-ROE strategies.
- Continue building Arc Home’s earnings momentum from the second half of 2025.
- Increase earnings power and rotate capital by focusing on legacy deals that become callable in 2026.
Smith said the company sees embedded value in 2022 and 2023 vintage issuances and intends to be “aggressive” in exercising call rights on in-the-money securitizations during 2026. He noted that in the fourth quarter, MITT exercised an optional redemption on a 2022 vintage non-QM securitization with $316 million in unpaid principal balance, then sold roughly $277 million of collateral. Smith said management sees EAD upside from rotating approximately $35 million of equity this year through call activity.
During the Q&A, management said two targeted transactions could free up about $35 million of equity, with a portion expected “in this quarter” and additional proceeds potentially in later quarters. On the legacy WMC commercial loans, management said the assets have modest financing and are on non-accrual, characterizing the current return as negative due to financing costs; executives estimated that rotating the full $28 million of equity could be worth about $0.20 on an annualized basis.
Financing conditions and liquidity
Executives also addressed market conditions in securitized financing. In response to a question about tighter spreads, management said call economics can benefit from lower nominal yields and a flatter credit curve, but also noted that faster prepayment speeds and lower nominal yields can pressure certain assets such as interest-only residuals, particularly compared with conditions when earlier collateral was originated at wider spreads.
Rossiello said the company ended the quarter with total liquidity of about $109 million, including $58 million in cash, $50 million of committed financing available on unlevered home equity loans, and $1 million of unencumbered agency RMBS.
About AG Mortgage Investment Trust (NYSE:MITT)
AG Mortgage Investment Trust, Inc is a publicly traded, closed-end management investment company that primarily focuses on investing in U.S. residential mortgage assets. The firm seeks to generate current income for its shareholders by acquiring a diversified portfolio of mortgage loans and mortgage-backed securities. As an externally managed mortgage real estate investment trust (REIT), AG Mortgage Investment Trust aims to deliver attractive risk-adjusted returns through active portfolio management and interest rate hedging strategies.
The company’s investment portfolio is concentrated in adjustable-rate residential mortgage loans, including so-called “jumbo” prime ARMs, as well as Agency and non-Agency residential mortgage-backed securities (RMBS).
