NYMT - New York Mortgage Trust Reports First Quarter 2024 Results | Benzinga

May, 01 2024 08:10 PM New York Mortgage Trust Inc.

NEW YORK, May 01, 2024 (GLOBE NEWSWIRE) -- New York Mortgage Trust, Inc. (NASDAQ:NYMT) ("NYMT," the "Company," "we," "our" or "us") today reported results for the three months ended March 31, 2024.

Summary of First Quarter 2024:
(dollar amounts in thousands, except per share data)

Net loss attributable to Company's common stockholders
$
(68,340
)

Net loss attributable to Company's common stockholders per share (basic)
$
(0.75
)

Undepreciated loss ⁽¹⁾
$
(62,014
)

Undepreciated loss per common share ⁽¹⁾
$
(0.68
)

Comprehensive loss attributable to Company's common stockholders
$
(68,336
)

Comprehensive loss attributable to Company's common stockholders per share (basic)
$
(0.75
)

Yield on average interest earning assets ^{(1) (2)}

6.38

%
Interest income
$
83,892


Interest expense
$
66,029


Net interest income
$
17,863


Net interest spread ^{(1) (3)}

1.31

%
Book value per common share at the end of the period
$
10.21


Adjusted book value per common share at the end of the period ⁽¹⁾
$
11.51


Economic return on book value ⁽⁴⁾

(7.96
)
%
Economic return on adjusted book value⁽⁵⁾

(7.50
)
%
Dividends per common share
$
0.20

⁽¹⁾

Represents a non-GAAP financial measure. A reconciliation of the Company's non-GAAP financial measures to their most directly comparable GAAP measure is included below in "Reconciliation of Financial Information."

⁽²⁾

Calculated as the quotient of our adjusted interest income and our average interest earning assets and excludes all Consolidated SLST assets other than those securities owned by the Company.

⁽³⁾

Our calculation of net interest spread may not be comparable to similarly-titled measures of other companies who may use a different calculation.

⁽⁴⁾

Economic return on book value is based on the periodic change in GAAP book value per common share plus dividends declared per common share, if any, during the period.

⁽⁵⁾

Economic return on adjusted book value is based on the periodic change in adjusted book value per common share, a non-GAAP financial measure, plus dividends declared per common share, if any, during the period.

Key Developments:

Investing Activities

Purchased approximately $297.6 million of Agency RMBS with an average coupon of 5.8%.
Purchased approximately $305.7 million in residential loans with an average gross coupon of 10.7%.

Financing Activities

Completed a securitization of business purpose loans, resulting in approximately $223.2 million in net proceeds to us after deducting expenses associated with the transaction. We utilized a portion of the net proceeds to repay approximately $136.6 million on outstanding repurchase agreements related to residential loans.
Redeemed a residential loan securitization with an outstanding balance of approximately $147.6 million at the time of redemption and completed a new securitization of residential loans, resulting in approximately $273.7 million of net proceeds to us after deducting expenses associated with the transaction. We also utilized a portion of the net proceeds to repay approximately $60.3 million on outstanding repurchase agreements related to residential loans.

Management Overview

Jason Serrano, Chief Executive Officer, commented: "The March 2024 U.S. GDP report surprised the market with a lower-than-expected growth rate of 1.6%, signaling potential late-stage cycle conditions in the U.S. economy. Without further depletion of U.S. consumer savings in the first quarter, GDP could have been 100 bps lower. We expect slow-to-moderate growth for the rest of the year with an increasing risk of recession. In response, we continue to take a balanced approach to opportunities by intentionally lowering credit exposure or by avoiding identifiable risks. We believe that fixed income investments, particularly short-duration mortgage credit and Agency RMBS, continue to provide compelling returns in this economic backdrop.

In the first quarter, we continued to reduce our exposure to multi-family joint venture equity investments ("JV Equity"), which represents less than 5% of the Company's capital allocation at the end of the quarter. Divestment of the JV Equity portfolio has been a challenge in a higher rate environment alongside unfavorable market conditions, which has negatively impacted valuations. The impairments in the JV Equity book are the primary driver of the -9.08% decline of Adjusted Book Value in the first quarter. However, as our exposure to JV Equity approaches zero and our allocations to Agency RMBS increase, we expect book value volatility to subside. With the Company's current liquidity, we are excited to prudently grow the Company's balance sheet for income growth in the year."

Capital Allocation

The following table sets forth, by investment category, our allocated capital at March 31, 2024 (dollar amounts in thousands):


Single-Family⁽¹⁾

Multi- Family

Corporate/Other

Total
Residential loans
$
3,103,105


$
—


$
—


$
3,103,105

Consolidated SLST CDOs

(582,627
)


—



—



(582,627
)
Investment securities available for sale

2,241,340



—



—



2,241,340

Multi-family loans

—



91,905



—



91,905

Equity investments

—



102,478



35,465



137,943

Equity investments in consolidated multi-family properties ⁽²⁾

—



189,530



—



189,530

Equity investments in disposal group held for sale ⁽³⁾

—



22,310



—



22,310

Single-family rental properties

149,060



—



—



149,060

Total investment portfolio carrying value

4,910,878



406,223



35,465



5,352,566

Liabilities:







Repurchase agreements

(2,512,008
)


—



—



(2,512,008
)
Residential loan securitization CDOs

(1,605,735
)


—



—



(1,605,735
)
Senior unsecured notes

—



—



(98,299
)


(98,299
)
Subordinated debentures

—



—



(45,000
)


(45,000
)
Cash, cash equivalents and restricted cash ⁽⁴⁾

156,560



—



219,846



376,406

Cumulative adjustment of redeemable non-controlling interest to estimated redemption value

—



(36,489
)


—



(36,489
)
Other

93,454



(3,642
)


(35,997
)


53,815

Net Company capital allocated
$
1,043,149


$
366,092


$
76,015


$
1,485,256









Company Recourse Leverage Ratio ⁽⁵⁾






1.7x
Portfolio Recourse Leverage Ratio ⁽⁶⁾






1.6x

⁽¹⁾

The Company, through its ownership of certain securities, has determined it is the primary beneficiary of Consolidated SLST and has consolidated the assets and liabilities of Consolidated SLST in the Company's condensed consolidated financial statements. Consolidated SLST is primarily presented on our condensed consolidated balance sheets as residential loans, at fair value and collateralized debt obligations, at fair value. Our investment in Consolidated SLST as of March 31, 2024 was limited to the RMBS comprised of first loss subordinated securities and certain IOs issued by the securitization with an aggregate net carrying value of $151.2 million.

⁽²⁾

Represents the Company's equity investments in consolidated multi-family properties that are not in disposal group held for sale. See "Reconciliation of Financial Information" section below for a reconciliation of equity investments in consolidated multi-family properties and disposal group held for sale to the Company's condensed consolidated financial statements.

⁽³⁾

Represents the Company's equity investments in consolidated multi-family properties that are held for sale in disposal group. See "Reconciliation of Financial Information" section below for a reconciliation of equity investments in consolidated multi-family properties and disposal group held for sale to the Company's condensed consolidated financial statements.

⁽⁴⁾

Excludes cash in the amount of $16.9 million held in the Company's equity investments in consolidated multi-family properties and equity investments in consolidated multi-family properties in disposal group held for sale. Restricted cash of $163.8 million is included in the Company's accompanying condensed consolidated balance sheets in other assets.

⁽⁵⁾

Represents the Company's total outstanding recourse repurchase agreement financing, subordinated debentures and senior unsecured notes divided by the Company's total stockholders' equity. Does not include non-recourse repurchase agreement financing amounting to $90.7 million, Consolidated SLST CDOs amounting to $582.6 million, residential loan securitization CDOs amounting to $1.6 billion and mortgages payable on real estate, including mortgages payable on real estate of disposal group held for sale, totaling $970.4 million as they are non-recourse debt.

⁽⁶⁾

Represents the Company's outstanding recourse repurchase agreement financing divided by the Company's total stockholders' equity.

The following table sets forth certain information about our interest earning assets by category and their related adjusted interest income, adjusted interest expense, adjusted net interest income, yield on average interest earning assets, average financing cost and net interest spread for the three months ended March 31, 2024 (dollar amounts in thousands):

Three Months Ended March 31, 2024


Single-Family ⁽⁸⁾

Multi- Family

Corporate/Other

Total
Adjusted Interest Income ^{(1) (2)}
$
75,426



$
2,665


$
—



$
78,091


Adjusted Interest Expense ⁽¹⁾

(48,762
)



—



(3,134
)



(51,896
)

Adjusted Net Interest Income (Loss) ⁽¹⁾
$
26,664



$
2,665


$
(3,134
)


$
26,195





















Average Interest Earning Assets⁽³⁾
$
4,798,871



$
95,382


$
1,000



$
4,895,253


Average Interest Bearing Liabilities ⁽⁴⁾
$
3,895,156



$
—


$
219,298



$
4,114,454





















Yield on Average Interest Earning Assets ^{(1) (5)}

6.29

%


11.18
%


—




6.38

%
Average Financing Cost ⁽¹⁾ ⁽⁶⁾

(5.03
)
%


—



(5.75
)
%


(5.07
)
%
Net Interest Spread ^{(1) (7)}

1.26

%


11.18
%


(5.75
)
%


1.31

%

⁽¹⁾

⁽²⁾

Includes interest income earned on cash accounts held by the Company.

⁽³⁾

Average Interest Earning Assets for the period include residential loans, multi-family loans and investment securities and exclude all Consolidated SLST assets other than those securities owned by the Company. Average Interest Earning Assets is calculated based on the daily average amortized cost for the period.

⁽⁴⁾

Average Interest Bearing Liabilities for the period include repurchase agreements, residential loan securitization CDOs, senior unsecured notes and subordinated debentures and exclude Consolidated SLST CDOs and mortgages payable on real estate as the Company does not directly incur interest expense on these liabilities that are consolidated for GAAP purposes. Average Interest Bearing Liabilities is calculated based on the daily average outstanding balance for the period.

⁽⁵⁾

Yield on Average Interest Earning Assets is calculated by dividing our annualized adjusted interest income relating to our portfolio of interest earning assets by our Average Interest Earning Assets for the respective periods.

⁽⁶⁾

Average Financing Cost is calculated by dividing our annualized adjusted interest expense by our Average Interest Bearing Liabilities.

⁽⁷⁾

Net Interest Spread is the difference between our Yield on Average Interest Earning Assets and our Average Financing Cost.

⁽⁸⁾

The Company has determined it is the primary beneficiary of Consolidated SLST and has consolidated Consolidated SLST into the Company's condensed consolidated financial statements. Our GAAP interest income includes interest income recognized on the underlying seasoned re-performing and non-performing residential loans held in Consolidated SLST. Our GAAP interest expense includes interest expense recognized on the Consolidated SLST CDOs that permanently finance the residential loans in Consolidated SLST and are not owned by the Company. We calculate adjusted interest income by reducing our GAAP interest income by the interest expense recognized on the Consolidated SLST CDOs and adjusted interest expense by excluding, among other things, the interest expense recognized on the Consolidated SLST CDOs, thus only including the interest income earned by the SLST securities that are actually owned by the Company in adjusted net interest income.

Conference Call

On Thursday, May 2, 2024 at 9:00 a.m., Eastern Time, New York Mortgage Trust's executive management is scheduled to host a conference call and audio webcast to discuss the Company's financial results for the three months ended March 31, 2024. To access the conference call, please pre-register using this link. Registrants will receive confirmation with dial-in details. A live audio webcast of the conference call can be accessed via the Internet, on a listen-only basis, at the Investor Relations section of the Company's website at http://www.nymtrust.com or using this link. Please allow extra time, prior to the call, to visit the site and download the necessary software to listen to the Internet broadcast. A webcast replay link of the conference call will be available on the Investor Relations section of the Company's website approximately two hours after the call and will be available for 12 months.

In connection with the release of these financial results, the Company will also post a supplemental financial presentation that will accompany the conference call on its website at http://www.nymtrust.com under the "Investors — Events and Presentations" section. First quarter 2024 financial and operating data can be viewed in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, which is expected to be filed with the Securities and Exchange Commission on or about May 3, 2024. A copy of the Form 10-Q will be posted at the Company's website as soon as reasonably practicable following its filing with the Securities and Exchange Commission.

About New York Mortgage Trust

New York Mortgage Trust, Inc. is a Maryland corporation that has elected to be taxed as a real estate investment trust ("REIT") for federal income tax purposes. NYMT is an internally-managed REIT in the business of acquiring, investing in, financing and managing primarily mortgage-related single-family and multi-family residential assets. For a list of defined terms used from time to time in this press release, see "Defined Terms" below.

Defined Terms

The following defines certain of the commonly used terms that may appear in this press release: "RMBS" refers to residential mortgage-backed securities backed by adjustable-rate, hybrid adjustable-rate, or fixed-rate residential loans; "Agency RMBS" refers to RMBS representing interests in or obligations backed by pools of residential loans guaranteed by a government sponsored enterprise ("GSE"), such as the Federal National Mortgage Association ("Fannie Mae") or the Federal Home Loan Mortgage Corporation ("Freddie Mac"), or an agency of the U.S. government, such as the Government National Mortgage Association ("Ginnie Mae"); "ABS" refers to debt and/or equity tranches of securitizations backed by various asset classes including, but not limited to, automobiles, aircraft, credit cards, equipment, franchises, recreational vehicles and student loans; "non-Agency RMBS" refers to RMBS that are not guaranteed by any agency of the U.S. Government or any GSE; "IOs" refers collectively to interest only and inverse interest only mortgage-backed securities that represent the right to the interest component of the cash flow from a pool of mortgage loans; "POs" refers to mortgage-backed securities that represent the right to the principal component of the cash flow from a pool of mortgage loans; "CMBS" refers to commercial mortgage-backed securities comprised of commercial mortgage pass-through securities issued by a GSE, as well as PO, IO or mezzanine securities that represent the right to a specific component of the cash flow from a pool of commercial mortgage loans; "multi-family CMBS" refers to CMBS backed by commercial mortgage loans on multi-family properties; "CDO" refers to collateralized debt obligation and includes debt that permanently finances the residential loans held in Consolidated SLST and the Company's residential loans held in securitization trusts that we consolidate or consolidated in our financial statements in accordance with GAAP; "Consolidated SLST" refers to a Freddie Mac-sponsored residential loan securitization, comprised of seasoned re-performing and non-performing residential loans, of which we own the first loss subordinated securities and certain IOs, that we consolidate in our financial statements in accordance with GAAP; "Consolidated VIEs" refers to variable interest entities ("VIE") where the Company is the primary beneficiary, as it has both the power to direct the activities that most significantly impact the economic performance of the VIE and a right to receive benefits or absorb losses of the entity that could be potentially significant to the VIE and that we consolidate in our financial statements in accordance with GAAP; "Consolidated Real Estate VIEs" refers to Consolidated VIEs that own multi-family properties; "business purpose loans" refers to (i) short-term loans that are collateralized by residential properties and are made to investors who intend to rehabilitate and sell the residential property for a profit or (ii) loans that finance (or refinance) non-owner occupied residential properties that are rented to one or more tenants; "Mezzanine Lending" refers, collectively, to preferred equity and mezzanine loan investments; "Multi-Family" portfolio includes multi-family CMBS, Mezzanine Lending and certain equity investments in multi-family assets, including joint venture equity investments; "Single-Family" portfolio includes residential loans, Agency RMBS, non-Agency RMBS and single-family rental properties; and "Other" portfolio includes ABS and an equity investment in an entity that originates residential loans.

Cautionary Statement Regarding Forward-Looking Statements

When used in this press release, in future filings with the Securities and Exchange Commission (the "SEC") or in other written or oral communications, statements which are not historical in nature, including those containing words such as "will," "believe," "expect," "anticipate," "estimate," "plan," "continue," "intend," "could," "would," "should," "may" or similar expressions, are intended to identify "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, as such, may involve known and unknown risks, uncertainties and assumptions.

Forward-looking statements are based on estimates, projections, beliefs and assumptions of management of the Company at the time of such statements and are not guarantees of future performance. Forward-looking statements involve risks and uncertainties in predicting future results and conditions. Actual results and outcomes could differ materially from those projected in these forward-looking statements due to a variety of factors, including, without limitation: changes in the Company's business and investment strategy; inflation and changes in interest rates and the fair market value of the Company's assets, including negative changes resulting in margin calls relating to the financing of the Company's assets; changes in credit spreads; changes in the long-term credit ratings of the U.S., Fannie Mae, Freddie Mac, and Ginnie Mae; general volatility of the markets in which the Company invests; changes in prepayment rates on the loans the Company owns or that underlie the Company's investment securities; increased rates of default, delinquency or vacancy and/or decreased recovery rates on or at the Company's assets; the Company's ability to identify and acquire targeted assets, including assets in its investment pipeline; the Company's ability to dispose of assets from time to time on terms favorable to it, including the disposition over time of its joint venture equity investments; changes in relationships with the Company's financing counterparties and the Company's ability to borrow to finance its assets and the terms thereof; changes in the Company's relationships with and/or the performance of its operating partners; the Company's ability to predict and control costs; changes in laws, regulations or policies affecting the Company's business; the Company's ability to make distributions to its stockholders in the future; the Company's ability to maintain its qualification as a REIT for federal tax purposes; the Company's ability to maintain its exemption from registration under the Investment Company Act of 1940, as amended; impairments in the value of the collateral underlying the Company's investments; the Company's ability to manage or hedge credit risk, interest rate risk, and other financial and operational risks; the Company's exposure to liquidity risk, risks associated with the use of leverage, and market risks; and risks associated with investing in real estate assets, including changes in business conditions and the general economy, the availability of investment opportunities and the conditions in the market for Agency RMBS, non-Agency RMBS, ABS and CMBS securities, residential loans, structured multi-family investments and other mortgage-, residential housing- and credit-related assets.

These and other risks, uncertainties and factors, including the risk factors and other information described in the Company's reports filed with the SEC pursuant to the Exchange Act, could cause the Company's actual results to differ materially from those projected in any forward-looking statements the Company makes. All forward-looking statements speak only as of the date on which they are made. New risks and uncertainties arise over time and it is not possible to predict those events or how they may affect the Company. Except as required by law, the Company is not obligated to, and does not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

For Further Information

CONTACT: AT THE COMPANY
Phone: 212-792-0107
Email: InvestorRelations@nymtrust.com

FINANCIAL TABLES FOLLOW

NEW YORK MORTGAGE TRUST, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollar amounts in thousands, except share data)

March 31, 2024

December 31, 2023

(unaudited)


ASSETS



Residential loans, at fair value
$
3,103,105


$
3,084,303

Investment securities available for sale, at fair value

2,241,340



2,013,817

Multi-family loans, at fair value

91,905



95,792

Equity investments, at fair value

137,943



147,116

Cash and cash equivalents

226,939



187,107

Real estate, net

1,154,221



1,131,819

Assets of disposal group held for sale

146,363



426,017

Other assets

344,999



315,357

Total Assets ⁽¹⁾
$
7,446,815


$
7,401,328

LIABILITIES AND EQUITY



Liabilities:



Repurchase agreements
$
2,512,008


$
2,471,113

Collateralized debt obligations ($1,079,768 at fair value and $1,108,594 at amortized cost, net as of March 31, 2024 and $593,737 at fair value and $1,276,780 at amortized cost, net as of December 31, 2023)

2,188,362



1,870,517

Senior unsecured notes

98,299



98,111

Subordinated debentures

45,000



45,000

Mortgages payable on real estate, net

850,743



784,421

Liabilities of disposal group held for sale

122,318



386,024

Other liabilities

110,751



118,016

Total liabilities⁽¹⁾

5,927,481



5,773,202





Commitments and Contingencies







Redeemable Non-Controlling Interest in Consolidated Variable Interest Entities

20,128



28,061





Stockholders' Equity:



Preferred stock, par value $0.01 per share, 31,500,000 shares authorized, 22,164,414 shares issued and outstanding ($554,110 aggregate liquidation preference)

535,445



535,445

Common stock, par value $0.01 per share, 200,000,000 shares authorized, 91,231,039 and 90,675,403 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

912



907

Additional paid-in capital

2,289,452



2,297,081

Accumulated other comprehensive loss

—



(4
)
Accumulated deficit

(1,340,553
)


(1,253,817
)
Company's stockholders' equity

1,485,256



1,579,612

Non-controlling interests

13,950



20,453

Total equity

1,499,206



1,600,065

Total Liabilities and Equity
$
7,446,815


$
7,401,328

(1)

Our condensed consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs") as the Company is the primary beneficiary of these VIEs. As of March 31, 2024 and December 31, 2023, assets of consolidated VIEs totaled $3,829,183 and $3,816,777, respectively, and the liabilities of consolidated VIEs totaled $3,192,392 and $3,076,818, respectively.

NEW YORK MORTGAGE TRUST, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except per share data) (unaudited)

For the Three Months Ended March 31,


2024



2023

NET INTEREST INCOME:



Interest income
$
83,892


$
57,136

Interest expense

66,029



39,335

Total net interest income

17,863



17,801





NET LOSS FROM REAL ESTATE:



Rental income

Full story available on Benzinga.com

Company Name:	New York Mortgage Trust Inc.
Stock Symbol:	NYMT
Market:	NASDAQ
Website:	nymtrust.com

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