MITT Q3 Loss, Book Value Decline Offset Home-Equity Growth

TPG Mortgage Investment Trust reported a third-quarter GAAP loss and a 7.3% decline in book value as unrealized portfolio losses outweighed higher net interest income. The residential mortgage REIT continued expanding its home-equity investments and securitization activity while pursuing a proposed merger with Cherry Hill Mortgage Investment Corporation.

For the three months ended Sept. 30, 2026, MITT recorded a net loss available to common stockholders of $15.7 million, or $0.49 per diluted share, compared with net income of $14.6 million, or $0.47 per share, a year earlier. The latest result included $19.9 million of net unrealized losses, while the prior-year quarter included $13.2 million of net unrealized gains.

Book value per common share fell to $9.27 from $10.00 at the end of the second quarter. The change reflected $0.62 per share of unrealized losses, $0.13 per share of transaction-related expenses and the $0.24 quarterly common dividend, partly offset by earnings available for distribution and realized gains.

MITT generated non-GAAP earnings available for distribution, or EAD, of $6.6 million, equal to $0.21 per diluted share. That compared with the $0.24-per-share dividend declared during the quarter. EAD excludes items including certain realized and unrealized investment gains and losses and transaction-related expenses, and may not be comparable with similarly named measures used by other companies.

Home-equity investments drive portfolio activity

GAAP net interest income increased to $20.7 million from $19.5 million in the year-earlier period. MITT attributed continued investment-portfolio earnings to reinvestment in home-equity loans and slower prepayment speeds, which supported an expansion in net interest margin despite what the company described as a challenging interest-rate environment.

The company invested in $1.2 billion of home-equity loans through securitizations and loan acquisitions during the quarter. It purchased $317.4 million of home-equity loans and securitized $326.5 million of unpaid principal balance using term, non-mark-to-market debt. MITT also completed two securitizations totaling $895 million of unpaid principal balance and retained $45.8 million of non-agency residential mortgage-backed securities.

At quarter-end, the investment portfolio had a fair value of $7.56 billion, a 6.1% weighted-average yield and $7.09 billion of related financing. Securitized non-agency loans represented the largest component, with a fair value of $5.78 billion. The portfolio also included about $1.05 billion of securitized home-equity loans and $284.9 million of non-agency RMBS.

MITT’s loan portfolio included $6.2 billion of non-agency loans with a weighted-average current loan-to-value ratio of 61%, a weighted-average FICO score of 751 and a 90-day-or-more delinquency rate of 1.4%. Its $1.2 billion home-equity loan portfolio had a 64% combined loan-to-value ratio, a weighted-average FICO score of 751 and a 0.6% serious-delinquency rate.

Liquidity, leverage and Arc Home

MITT ended the quarter with $84.7 million of liquidity, comprising $56.7 million of cash and cash equivalents and $28 million of committed financing availability. Its non-GAAP economic leverage ratio was 2.0 times. Approximately 85% of GAAP financing consisted of securitized debt, which is non-recourse to the company, and the total quarter-end cost of funds was 5.4%.

Arc Home, MITT’s proprietary mortgage-origination channel, originated $1.0 billion during the quarter and recorded $1.5 billion of lock volume, up 5.5% from the third quarter of 2025. MITT held a 66% ownership interest valued at $45.7 million. Its share of Arc Home’s third-quarter EAD was a loss of $39,000.

Commercial asset resolution and merger remain key variables

MITT is seeking to release capital from legacy WMC commercial loans, which had a fair value of $44.1 million and $27.6 million of equity at quarter-end. The company said sale processes covering two hotel properties were targeting fourth-quarter closings, while the sale of a retail property was targeting a first-quarter closing. Other hotel assets are being positioned for potential exits in 2027.

Management expects sale proceeds to be used first to repay financing, which it estimates would add $0.03 per share to EAD. The company also sees potential additional EAD from redeploying approximately $28 million of equity into investments targeting returns on equity of 15% to 20% in 2027. However, the affected commercial loans are on non-accrual or cost-recovery status, and MITT cautioned that the proposed sales may not close within the anticipated periods or at all.

During the quarter, MITT entered into a merger agreement with Cherry Hill Mortgage Investment Corporation. Completion remains subject to stockholder approvals and other closing conditions. The presentation also identified integration challenges, transaction costs, potential litigation, management distraction and the possibility that expected benefits may not be realized as material merger-related risks.

Other uncertainties include changes in interest rates, credit spreads and asset values; defaults or delinquencies in the underlying loan portfolio; access to financing and securitization markets; prepayment behavior; and Arc Home’s profitability, liquidity and origination volumes.