But again, like right now, there’s nothing necessarily in the pipe. We’re just — we’re messaging, much like we’ve done in previous quarters, and saying things around, “If we do choose to raise capital, it’s going to be an accretive move for us versus a refinance of debt, especially a refinance of the lower cost of capital debt with a higher cost of capital.”
Douglas Harter: I appreciate that, Brandon. I guess just how do you think about the maturity or the duration of any debt that you could raise versus the duration of the assets you’d be putting on and your comfort with those 2 figures?
Brandon Filson: I think the current securitization execution — again, with the average life of those senior bonds or the bonds we hold, would be somewhere kind of really close to the duration of a typical debt being like a 5-year instrument — 5- to 7-year instrument. So I think it would be a pretty good match in terms of what we issued and then what we would use that capital for.
Operator: [Operator Instructions] Our next question is from the line of Don Fandetti with Wells Fargo.
Donald Fandetti: Can you talk more about your loan acquisition targets for Q2? I mean Q1 was a little light at $43 million. Obviously, some seasonality there. But if you contributed $300 million to the new securitization, the balance of residential whole loans, it’s pretty low. And then you’re talking about raising potentially some debt. I mean are you just originating from Angel Oak? Or would you look at portfolios? Just trying to get a sense on how you’re feeling about the pipeline of new acquisitions.
Brandon Filson: Yes. Our — you’re right. Q1 was a little lighter than we had been in the past, and that was some seasonality. And it was also as we’re preparing and getting into ’24-4, which closed just after quarter end.
Since that deal is closed, we have essentially now used all of that capital to buy loans or to, in the case of reduce some warehouse — sorry, repo debt on some retained bond position. So we’ve essentially used that $40 million of capital already from an unlevered basis. We’ll be working on levering that throughout this quarter to get us in a position where we’ll issue another stand-alone current coupon securitization in most likely Q3 — early Q3.
So I would say, this quarter, we’re targeting $150 million to $200 million worth of acquisitions. And then obviously, we can toggle that back and forth. That number is probably going to be about 1/2 to 2/3 from our affiliated originators, but we’re starting to see decent opportunities in third-party originated loans as well with credit profiles similar to our own origination that we can use to fill the remaining pieces of the bucket.
Donald Fandetti: Okay. And I guess if I just look at NII, minus your expenses, it’s below the dividend. I guess do you feel like you’ll just grow into that?
Brandon Filson: Yes, that’s exactly right. And this quarter was a little lower growth in that metric than it has been in a couple of other quarters since we started buying loans in earnest in Q3 of ’23. This quarter with — again, with ’24-4 going off, we’re saving about 99, 100 basis points off of financing right there.
Buying $40 million already kind of unlevered loan positions, that was worth 8% loans thereabouts. So you can kind of back into the math. And then on the expense side, year-end was a little higher just because as we went through the final audit. It was our first year with SOX compliance.
We had a more expensive audit than it had been in the past and then also just the K and proxy and annual meetings and things like that. Those expenses will go in moderate through Q2, Q3, Q4, et cetera, and we’ll get back a little bit where we were in terms of like a Q4, Q3 expense load as well as continuing to grow that net interest margin.
Operator: [Operator Instructions] As there are no further questions, I would now hand the conference over to Brandon Filson for his closing comments. Brandon?
Brandon Filson: Thank you, everyone, for your time and interest in Angel Oak Mortgage REIT. We look forward to connecting with you again next quarter. In the meantime, if you have any questions at all, please feel free to reach out, and have a great day.
Operator: Thank you. The conference of Angel Oak Mortgage has now concluded. Thank you for your participation. You may now disconnect your lines.
