New York Mortgage Trust, Inc. (Nasdaq:NYMT) (“NYMT,” the “Company,”
“we,” “our” or “us”) today reported results for the three months
ended March 31, 2017.
Summary of First Quarter 2017:
- Net income attributable to common stockholders of $16.0
million, or $0.14 per share, and comprehensive income to common
stockholders of $18.9 million, or $0.17 per share.
- Net interest income of $13.9 million and portfolio net interest
margin of 270 basis points.
- Book value per common share of $6.08 at March 31, 2017,
delivering an economic return of 2.4% for the quarter and an
annualized economic return of 9.8%.
- Declared first quarter dividend of $0.20 per common share that
was paid on April 25, 2017.
- Completed the issuance of $138.0 million aggregate principal
amount of Convertible Notes due 2022 that resulted in net proceeds
to the Company of approximately $127.0 million at an all in cost to
the Company of approximately 8.24%.
- Sold pools of distressed residential mortgage loans with a
carrying value of approximately $50.9 million for aggregate
proceeds of approximately $62.6 million, which resulted in a
net realized gain, before income taxes, of approximately $11.7
million.
- Purchased CMBS securities, including a first loss PO security
issued by a Freddie Mac-sponsored multi-family K-Series
securitization, for a gross purchase price of approximately $112.5
million.
- Purchased Non-Agency RMBS backed by re-performing and
non-performing loans for a gross purchase price of approximately
$41.1 million.
Management Overview
Steven Mumma, NYMT's Chairman and Chief
Executive Officer, commented: "The Company delivered a solid 2.4%
economic return for the first quarter, or 9.8% on an annualized
basis. Overall, markets generally rallied during the first quarter,
with credit spreads tightening for many higher-yielding assets,
including for our multi-family and distressed residential assets
where we saw significant improvement in credit spreads from the
fourth quarter of 2016. The Company was also able to take advantage
of greater buy-side demand for distressed residential assets during
the first quarter, completing the sale of approximately $51 million
of distressed residential loans during the quarter for a realized
pre-tax gain of $12 million. Collectively, these developments
helped the Company generate GAAP net earnings of $0.14 per share
and comprehensive income of $0.17 per share for the first
quarter.
As previously announced, the Company received
approximately $127 million in net proceeds from its convertible
debt offering in January 2017. The Company has utilized those
proceeds to help fund its acquisition of its targeted assets during
the quarter, which included approximately $113 million of CMBS
securities and approximately $41 million in distressed
residential securities. Of significance, included in the CMBS
investments during the first quarter was a $29 million investment
in a first loss Freddie Mac K-Series securitization, which marks
our first new investment in a K-Series securitization in over three
years. These new investments had very little impact on first
quarter results though, as approximately $104 million of the new
investments settled toward the end of the first quarter. We
anticipate these investments will provide a greater contribution to
the Company’s earnings in the second quarter, which should more
than offset the interest expense associated with the convertible
debt.
Consistent with the Company’s previously stated
intentions, the Company continued to transition its portfolio to
one focused increasingly on residential and multi-family credit
assets and continues to believe that a portfolio increasingly
focused on these types of credit assets is well-suited to deliver
sustainable positive economic returns over the longer term.”
Capital Allocation
The following tables set forth our allocated
capital by investment type at March 31, 2017, our interest
income and interest expense by investment type, and the weighted
average yield, average cost of funds and portfolio net interest
margin for our interest earning assets (by investment type) for the
three months ended March 31, 2017 (dollar amounts in
thousands):
Capital Allocation at March 31, 2017: |
|
Agency
RMBS |
|
Agency IOs |
|
Multi-Family
(1) |
|
Distressed
Residential (2) |
|
Residential Securitized
Loans |
|
Other
(3) |
|
Total |
Carrying Value |
$ |
420,124 |
|
|
$ |
61,836 |
|
|
$ |
733,383 |
|
|
$ |
645,455 |
|
|
$ |
91,711 |
|
|
$ |
40,555 |
|
|
$ |
1,993,064 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Callable |
(361,792 |
) |
|
(35,114 |
) |
|
(215,926 |
) |
|
(262,010 |
) |
|
— |
|
|
136 |
|
|
(874,706 |
) |
Non-Callable |
— |
|
|
— |
|
|
(28,528 |
) |
|
(119,084 |
) |
|
(87,918 |
) |
|
(45,000 |
) |
|
(280,530 |
) |
Convertible |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(127,319 |
) |
|
(127,319 |
) |
Hedges (Net) (4) |
2,725 |
|
|
2,758 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
5,483 |
|
Cash (5) |
4,213 |
|
|
32,520 |
|
|
6,762 |
|
|
35,393 |
|
|
— |
|
|
60,850 |
|
|
139,738 |
|
Goodwill |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
25,222 |
|
|
25,222 |
|
Other |
2,886 |
|
|
6,135 |
|
|
5,442 |
|
|
|
(17,267 |
) |
|
709 |
|
|
(26,111 |
) |
|
(28,206 |
) |
Net Capital
Allocated |
$ |
68,156 |
|
|
$ |
68,135 |
|
|
$ |
501,133 |
|
|
$ |
282,487 |
|
|
$ |
4,502 |
|
|
$ |
(71,667 |
) |
|
$ |
852,746 |
|
% of Capital
Allocated |
8.0 |
% |
|
8.0 |
% |
|
58.8 |
% |
|
33.1 |
% |
|
0.5 |
% |
|
(8.4 |
)% |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest Income- Three Months Ended March 31,
2017: |
Interest Income |
$ |
1,897 |
|
|
$ |
717 |
|
|
$ |
12,953 |
|
|
$ |
7,764 |
|
|
$ |
726 |
|
|
$ |
396 |
|
|
$ |
24,453 |
|
Interest Expense |
(1,113 |
) |
|
(232 |
) |
|
(2,211 |
) |
|
(3,830 |
) |
|
(336 |
) |
|
(2,813 |
) |
|
(10,535 |
) |
Net Interest
Income |
$ |
784 |
|
|
$ |
485 |
|
|
$ |
10,742 |
|
|
$ |
3,934 |
|
|
$ |
390 |
|
|
$ |
(2,417 |
) |
|
$ |
13,918 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio Net Interest Margin - Three Months Ended March
31, 2017 |
Average
Interest Earning Assets (6) |
$ |
441,013 |
|
|
$ |
88,472 |
|
|
$ |
457,943 |
|
|
$ |
661,738 |
|
|
$ |
97,480 |
|
|
$ |
22,892 |
|
|
$ |
1,769,538 |
|
Weighted
Average Yield on Interest Earning Assets (7) |
1.72 |
% |
|
3.24 |
% |
|
11.31 |
% |
|
4.69 |
% |
|
2.98 |
% |
|
6.92 |
% |
|
5.53 |
% |
Less: Average Cost of
Funds (8) |
(1.16 |
)% |
|
(1.77 |
)% |
|
(4.55 |
)% |
|
(3.71 |
)% |
|
(1.49 |
)% |
|
— |
% |
|
(2.83 |
)% |
Portfolio Net Interest
Margin (9) |
0.56 |
% |
|
1.47 |
% |
|
6.76 |
% |
|
0.98 |
% |
|
1.49 |
% |
|
6.92 |
% |
|
2.70 |
% |
|
(1) The Company through its ownership of certain securities
has determined it is the primary beneficiary of the Consolidated
K-Series and has consolidated the Consolidated K-Series into the
Company’s consolidated financial statements. Average Interest
Earning Assets for the quarter excludes all Consolidated K-Series
assets other than those securities actually owned by the Company.
Interest income amounts represent interest income earned by
securities that are actually owned by the Company. A reconciliation
of net capital allocated to and interest income from multi-family
investments is included below in “Additional Information.”
(2) Includes $447.8 million of distressed residential mortgage
loans and $190.2 million of Non-Agency RMBS backed by re-performing
and non-performing loans.
(3) Other includes investments in unconsolidated entities
amounting to $11.7 million and mortgage loans held for sale and
mortgage loans held for investment totaling $27.7 million. Mortgage
loans held for sale and mortgage loans held for investment are
included in the Company’s accompanying condensed consolidated
balance sheets in receivables and other assets. Other non-callable
liabilities consist of $45.0 million in subordinated
debentures.
(4) Includes derivative assets, derivative
liabilities, payable for securities purchased related to our TBAs
and restricted cash posted as margin.
(5) Includes $26.9 million held in overnight
deposits in our Agency IO portfolio to be used for trading
purposes. These deposits are included in the Company’s accompanying
condensed consolidated balance sheets in receivables and other
assets.
(6) Our Average Interest Earning Assets is
calculated each quarter based on daily average amortized cost of
the interest earning assets in our investment portfolio.
(7) Our Weighted Average Yield on Interest
Earning Assets was calculated by dividing our annualized interest
income for the quarter by our Average Interest Earning Assets for
the quarter.
(8) Our Average Cost of Funds was calculated by
dividing our annualized interest expense for the quarter by our
average interest bearing liabilities, excluding our subordinated
debentures and convertible notes, which generated interest expense
of approximately $0.5 million and $2.0 million, respectively, for
the quarter. Our Average Cost of Funds includes interest expense on
our interest rate swaps.
(9) Portfolio Net Interest Margin is the
difference between our Weighted Average Yield on Interest Earning
Assets and our Average Cost of Funds, excluding the weighted
average cost of subordinated debentures and convertible notes.
Prepayment History
The following table sets forth the actual
constant prepayment rates (“CPR”) for selected asset classes, by
quarter, for the quarterly periods indicated.
Quarter Ended |
|
Agency ARMs |
|
Agency Fixed-Rate RMBS |
|
Agency IOs |
|
Residential Securitizations |
|
Total Weighted Average |
March 31, 2017 |
|
8.3 |
% |
|
10.6 |
% |
|
15.9 |
% |
|
5.1 |
% |
|
12.6 |
% |
December 31, 2016 |
|
21.7 |
% |
|
12.3 |
% |
|
19.4 |
% |
|
11.1 |
% |
|
16.9 |
% |
September 30, 2016 |
|
20.7 |
% |
|
10.0 |
% |
|
18.2 |
% |
|
15.9 |
% |
|
16.1 |
% |
June 30, 2016 |
|
17.6 |
% |
|
10.2 |
% |
|
15.6 |
% |
|
17.8 |
% |
|
14.6 |
% |
March 31, 2016 |
|
13.5 |
% |
|
7.9 |
% |
|
14.7 |
% |
|
14.8 |
% |
|
12.7 |
% |
December 31, 2015 |
|
16.9 |
% |
|
8.5 |
% |
|
14.6 |
% |
|
31.2 |
% |
|
14.7 |
% |
September 30, 2015 |
|
18.6 |
% |
|
10.5 |
% |
|
18.0 |
% |
|
8.9 |
% |
|
15.1 |
% |
June 30, 2015 |
|
9.2 |
% |
|
10.6 |
% |
|
16.3 |
% |
|
11.1 |
% |
|
13.3 |
% |
March 31, 2015 |
|
9.1 |
% |
|
6.5 |
% |
|
14.7 |
% |
|
13.7 |
% |
|
11.5 |
% |
First Quarter Earnings
Summary
For the quarter ended March 31, 2017, we
reported net income attributable to common stockholders of $16.0
million, an increase of $6.3 million from the fourth quarter of
2016. The increase is primarily due to an increase in other income
in the first quarter as a result of increased sales activity in our
distressed residential loan portfolio and an increase in net
unrealized gains on multi-family loans and debt held in
securitization trusts primarily due to the tightening of credit
spreads during the quarter.
We generated net interest income of $13.9
million and a portfolio net interest margin of 270 basis points for
the quarter ended March 31, 2017. The change in net interest income
of $0.9 million from the fourth quarter of 2016 was primarily
driven by:
- An increase in interest expense of $2.0 million related to the
issuance of $138.0 million principal amount of convertible notes in
January 2017.
- An increase in net interest income of $0.6 million from our
Agency IO portfolio in the first quarter due to a decrease in
prepayment rates in the first quarter of 2017 from the fourth
quarter of 2016.
- An increase in net interest income of $0.5 million from our
Agency ARMs and Agency fixed-rate RMBS portfolio due to a decrease
in prepayment rates and decrease in average liabilities in the
first quarter.
- An increase in net interest income of $1.1 million from our
multi-family portfolio due to an increase in average interest
earning multi-family assets during the first quarter. The increase
in average interest earning multi-family assets can be attributed
to new multi-family CMBS investments made during the first quarter,
which includes a first loss PO security issued by a Freddie
Mac-sponsored multi-family K-Series securitization. In addition,
average cost of funds decreased during the first quarter.
- A decrease in net interest income of approximately $1.2 million
from our distressed residential portfolio due to a decrease in
asset yields as well as an increase in financing costs in the first
quarter.
For the quarter ended March 31, 2017, we
recognized other income of $16.7 million, primarily from the
following:
- Net unrealized gains amounting to $1.4 million recognized on
our multi-family loans and debt held in securitization trusts for
the first quarter.
- Realized losses of $2.4 million and unrealized gains of $1.5
million on our investment securities and related hedges, related to
our Agency IO portfolio, for the first quarter.
- Realized gains of $1.2 million on our investment securities
related to our sale of CMBS securities during the first
quarter.
- Net realized gains of $12.0 million from the sale of pools of
distressed residential mortgage loans during the first
quarter.
- Other income of $2.8 million, which primarily included income
from our multi-family investments in unconsolidated entities during
the first quarter.
The following table details the general,
administrative and other expenses incurred during the first quarter
of 2017 and the fourth quarter of 2016:
|
|
Three Months Ended |
General, Administrative and Other Expenses |
|
March 31, 2017 |
December 31, 2016 |
Salaries, benefits and
directors’ compensation |
|
$ |
2,835 |
|
$ |
2,030 |
|
Base management and
incentive fees |
|
3,078 |
|
1,303 |
|
Expenses on distressed
residential mortgage loans |
|
2,239 |
|
2,382 |
|
Other general and
administrative expenses |
|
2,052 |
|
1,505 |
|
Total |
|
$ |
10,204 |
|
$ |
7,220 |
|
|
Total general, administrative and other expenses for the first
quarter of 2017 were approximately $10.2 million, up from $7.2
million for the fourth quarter of 2016. The increase can be
primarily attributed to incentive fees earned on our distressed
residential loan strategy due to increased sales activity during
the first quarter of 2017. The increase in salaries, benefits and
directors' compensation can be attributed to an increase in
estimated bonus compensation as well as an increase in stock based
compensation expense due to the increase in number of employees
from the internalization of RiverBanc and the issuance of
restricted stock to these employees.
Analysis of Changes in Book
Value
The following table analyzes the changes in book
value of our common stock for the quarter ended March 31, 2017
(amounts in thousands, except per share):
|
Quarter Ended March 31, 2017 |
|
Amount |
|
Shares |
|
Per Share(1) |
Beginning
Balance |
$ |
683,075 |
|
|
111,474 |
|
|
$ |
6.13 |
|
Common stock issuance,
net |
614 |
|
|
369 |
|
|
|
Balance after share
issuance activity |
683,689 |
|
|
111,843 |
|
|
6.11 |
|
Dividends declared |
(22,369 |
) |
|
|
|
(0.20 |
) |
Net change in
accumulated other comprehensive income: |
|
|
|
|
|
Hedges |
164 |
|
|
|
|
— |
|
Investment securities |
2,756 |
|
|
|
|
0.03 |
|
Net
income attributable to Company's common stockholders |
15,957 |
|
|
|
|
0.14 |
|
Ending
Balance |
$ |
680,197 |
|
|
111,843 |
|
|
$ |
6.08 |
|
|
(1) Outstanding shares used to calculate book value per share
for the ending balance is based on outstanding shares as of
March 31, 2017 of 111,843,236.
Conference Call
On Thursday, May 4, 2017 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, 2017. The conference call dial-in number is (877)
312-8806. The replay will be available until Thursday, May 11, 2017
and can be accessed by dialing (855) 859-2056 and entering passcode
11950880. A live audio webcast of the conference call can be
accessed via the Internet, on a listen-only basis, at the Company's
website at http://www.nymtrust.com. Please allow extra time, prior
to the call, to visit the site and download the necessary software
to listen to the Internet broadcast.
First quarter 2017 financial and operating data
can be viewed in the Company’s Quarterly Report on Form 10-Q for
the quarter ended March 31, 2017, which is expected to be
filed with the Securities and Exchange Commission on or about May
10, 2017. 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 for federal income tax purposes (“REIT”). NYMT is
an internally managed REIT in the business of acquiring, investing
in, financing and managing mortgage-related and residential
housing-related assets and financial assets and targets residential
mortgage loans, including second mortgages and loans sourced from
distressed markets, multi-family CMBS, direct financing to owners
of multi-family properties through mezzanine loans and preferred
equity investments, other commercial and residential real
estate-related investments and Non-Agency RMBS. The Midway Group,
L.P. and Headlands Asset Management, LLC provide investment
management services to the Company with respect to certain of its
asset classes. 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 in this press release: “RMBS” refers to residential
mortgage-backed securities comprised of adjustable-rate, hybrid
adjustable-rate, fixed-rate, interest only and inverse interest
only, and principal only securities; “Agency RMBS” refers to RMBS
representing interests in or obligations backed by pools of
residential mortgage loans issued or guaranteed by a federally
chartered corporation ("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”); "Non-Agency RMBS" refers to RMBS backed by prime
jumbo mortgage loans including re-performing and non-performing
loans; “Agency ARMs” refers to Agency RMBS comprised of
adjustable-rate and hybrid adjustable-rate RMBS; "Agency fixed-rate
RMBS" refers to Agency RMBS comprised of fixed-rate RMBS; “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; “Agency
IOs” refers to an IO that represents the right to the interest
component of cash flow from a pool of residential mortgage loans
issued or guaranteed by a GSE, or an agency of the U.S. government;
“POs” refers to mortgage-backed securities that represent the right
to the principal component of the cash flow from a pool of mortgage
loans; “ARMs” refers to adjustable-rate residential mortgage loans;
“residential securitized loans” refers to prime credit quality ARMs
held in securitization trusts; “distressed residential mortgage
loans” refers to pools of performing, re-performing and to a lesser
extent non-performing, fixed-rate and adjustable-rate, fully
amortizing, interest-only and balloon, seasoned mortgage loans
secured by first liens on one- to four-family properties; “CMBS”
refers to commercial mortgage-backed securities comprised of
commercial mortgage pass-through securities, as well as IO or PO
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; “multi-family securitized loans” refers to
the commercial mortgage loans included in the Consolidated
K-Series; “CDO” refers to collateralized debt obligation; “CLO”
refers to collateralized loan obligation; and "Consolidated
K-Series” refers to six separate Freddie Mac-sponsored multi-family
loan K-Series securitizations in which the Company owns certain
securities.
Additional Information
We determined that the Consolidated K-Series
were variable interest entities and that we are the primary
beneficiary of the Consolidated K-Series. As a result, we are
required to consolidate the Consolidated K-Series’ underlying
multi-family loans including their liabilities, income and expenses
in our condensed consolidated financial statements. We have elected
the fair value option on the assets and liabilities held within the
Consolidated K-Series, which requires that changes in valuations in
the assets and liabilities of the Consolidated K-Series be
reflected in our condensed consolidated statements of
operations.
A reconciliation of our net capital allocated to
multi-family investments to our condensed consolidated financial
statements as of March 31, 2017 is set forth below (dollar
amounts in thousands):
Multi-family loans held
in securitization trusts, at fair value |
$ |
8,441,230 |
|
Multi-family CDOs, at
fair value |
(8,052,428 |
) |
Net carrying value |
388,802 |
|
Investment securities
available for sale, at fair value |
160,671 |
|
Total CMBS, at fair
value |
549,473 |
|
Mezzanine loan,
preferred equity investments and investments in unconsolidated
entities |
157,764 |
|
Real estate under
development (1) |
18,741 |
|
Operating real estate
held in consolidated variable interest entities, net |
62,322 |
|
Mortgages and notes
payable in consolidated variable interest entities |
(54,917 |
) |
Financing arrangements,
portfolio investments |
(215,926 |
) |
Securitized debt |
(28,528 |
) |
Cash and other |
12,204 |
|
Net Capital in
Multi-Family |
$ |
501,133 |
|
(1) Included in the Company’s accompanying condensed
consolidated balance sheets in receivable and other assets.
A reconciliation of our net interest income in
multi-family investments to our consolidated financial statements
for the three months ended March 31, 2017 is set forth below
(dollar amounts in thousands):
|
Three Months Ended |
March 31, 2017 |
Interest income,
multi-family loans held in securitization trusts |
$ |
61,304 |
|
Interest income,
investment securities, available for sale (1) |
2,510 |
|
Interest
income, mezzanine loan and preferred equity investments (1) |
3,071 |
|
Interest expense,
multi-family collateralized debt obligation |
53,932 |
|
Interest income,
Multi-Family, net |
12,953 |
|
Interest expense,
investment securities, available for sale |
1,513 |
|
Interest expense,
securitized debt |
698 |
|
Net interest income,
Multi-Family |
$ |
10,742 |
|
|
(1) Included in the Company’s accompanying condensed
consolidated statements of operations in interest income,
investment securities and other.
Cautionary Statement Regarding
Forward-Looking Statements
When used in this press release, in future
filings with the Securities and Exchange Commission (“SEC”) or in
other written or oral communications, statements which are not
historical in nature, including those containing words such as
“believe,” “expect,” “anticipate,” “estimate,” “plan,” “continue,”
“intend,” “should,” “would,” “could,” “goal,” “objective,” “will,”
“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 ("Exchange Act"), and,
as such, may involve known and unknown risks, uncertainties and
assumptions.
Forward-looking statements are based on the
Company’s beliefs, assumptions and expectations of its future
performance, taking into account all information currently
available to it. These beliefs, assumptions and expectations are
subject to risks and uncertainties and can change as a result of
many possible events or factors, not all of which are known to the
Company. If a change occurs, the Company’s business, financial
condition, liquidity and results of operations may vary materially
from those expressed in its forward-looking statements. The
following factors are examples of those that could cause actual
results to vary from the Company’s forward-looking statements:
changes in interest rates and the market value of the Company’s
securities; changes in credit spreads; the impact of the downgrade
of the long-term credit ratings of the U.S., Fannie Mae, Freddie
Mac, and Ginnie Mae; market volatility; changes in the prepayment
rates on the mortgage loans underlying the Company’s investment
securities; increased rates of default and/or decreased recovery
rates on the Company's assets; the Company’s ability to borrow to
finance its assets and the terms thereof; changes in governmental
laws, regulations or policies affecting the Company’s business;
changes in the Company's relationships with its external managers;
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; and risks associated with investing in real
estate assets, including changes in business conditions and the
general economy. These and other risks, uncertainties and factors,
including the risk factors 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 it 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.
FINANCIAL TABLES FOLLOW
NEW YORK MORTGAGE TRUST, INC. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(Dollar amounts in thousands, except share
data) |
|
|
|
|
|
March 31, 2017 |
|
December 31, 2016 |
|
(unaudited) |
|
|
|
|
|
|
ASSETS |
|
|
|
Investment securities,
available for sale, at fair value (including $44,512 and $43,897
held in securitization trusts as of March 31, 2017 and December 31,
2016, respectively, and pledged securities of $618,657 and
$690,592, as of March 31, 2017 and December 31, 2016,
respectively) |
$ |
834,037 |
|
|
$ |
818,976 |
|
Residential mortgage
loans held in securitization trusts, net |
91,711 |
|
|
95,144 |
|
Distressed residential
mortgage loans, net (including $160,999 and $195,347 held in
securitization trusts as of March 31, 2017 and December 31, 2016,
respectively) |
447,834 |
|
|
503,094 |
|
Multi-family loans held
in securitization trusts, at fair value |
8,441,230 |
|
|
6,939,844 |
|
Derivative assets |
114,653 |
|
|
150,296 |
|
Receivables for
securities sold |
1,301 |
|
|
— |
|
Cash and cash
equivalents |
73,033 |
|
|
83,554 |
|
Investment in
unconsolidated entities |
72,970 |
|
|
79,259 |
|
Operating real estate
held in consolidated variable interest entities, net |
62,322 |
|
|
— |
|
Mezzanine loan and
preferred equity investments |
96,475 |
|
|
100,150 |
|
Goodwill |
25,222 |
|
|
25,222 |
|
Receivables and other
assets |
188,798 |
|
|
156,092 |
|
Total Assets
(1) |
$ |
10,449,586 |
|
|
$ |
8,951,631 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
Liabilities: |
|
|
|
Financing arrangements,
portfolio investments |
$ |
702,309 |
|
|
$ |
773,142 |
|
Financing arrangements,
residential mortgage loans |
172,397 |
|
|
192,419 |
|
Residential
collateralized debt obligations |
87,918 |
|
|
91,663 |
|
Multi-family
collateralized debt obligations, at fair value |
8,052,428 |
|
|
6,624,896 |
|
Securitized debt |
147,612 |
|
|
158,867 |
|
Convertible notes |
127,319 |
|
|
— |
|
Mortgages and notes
payable in consolidated variable interest entities |
54,917 |
|
|
1,588 |
|
Derivative
liabilities |
359 |
|
|
498 |
|
Payable for securities
purchased |
141,894 |
|
|
148,015 |
|
Accrued expenses and
other liabilities |
64,687 |
|
|
64,381 |
|
Subordinated
debentures |
45,000 |
|
|
45,000 |
|
Total
liabilities (1) |
$ |
9,596,840 |
|
|
$ |
8,100,469 |
|
Commitments and
Contingencies |
|
|
|
Stockholders'
Equity: |
|
|
|
Preferred stock, $0.01
par value, 7.75% Series B cumulative redeemable, $25 liquidation
preference per share, 6,000,000 shares authorized, 3,000,000 shares
issued and outstanding |
$ |
72,397 |
|
|
$ |
72,397 |
|
Preferred stock, $0.01
par value, 7.875% Series C cumulative redeemable, $25 liquidation
preference per share, 4,140,000 shares authorized, 3,600,000 shares
issued and outstanding |
86,862 |
|
|
86,862 |
|
Common stock, $0.01 par
value, 400,000,000 shares authorized, 111,843,236 and 111,474,521
shares issued and outstanding as of March 31, 2017 and December 31,
2016, respectively |
1,119 |
|
|
1,115 |
|
Additional paid-in
capital |
749,209 |
|
|
748,599 |
|
Accumulated other
comprehensive income |
4,559 |
|
|
1,639 |
|
Accumulated
deficit |
(68,949 |
) |
|
(62,537 |
) |
Company's stockholders'
equity |
$ |
845,197 |
|
|
$ |
848,075 |
|
Non-controlling
interest |
$ |
7,549 |
|
|
$ |
3,087 |
|
Total equity |
$ |
852,746 |
|
|
$ |
851,162 |
|
Total
Liabilities and Stockholders' Equity |
$ |
10,449,586 |
|
|
$ |
8,951,631 |
|
|
|
|
|
|
|
|
|
(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, 2017 and December 31, 2016, assets of
consolidated VIEs totaled $8,895,294 and $7,330,872, respectively,
and the liabilities of consolidated VIEs totaled $8,372,324 and
$6,902,536, 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 EndedMarch
31, |
|
2017 |
|
2016 |
INTEREST
INCOME: |
|
|
|
|
|
|
|
Investment securities and other |
$ |
9,801 |
|
|
$ |
8,434 |
|
Multi-family loans held in securitization trusts |
61,304 |
|
|
63,532 |
|
Residential mortgage loans held in securitization trusts |
1,242 |
|
|
837 |
|
Distressed residential mortgage loans |
6,038 |
|
|
8,823 |
|
Total
interest income |
78,385 |
|
|
81,626 |
|
|
|
|
|
INTEREST EXPENSE: |
|
|
|
Investment securities and other |
5,569 |
|
|
3,849 |
|
Convertible notes |
1,975 |
|
|
— |
|
Multi-family collateralized debt obligations |
53,932 |
|
|
57,200 |
|
Residential collateralized debt obligations |
336 |
|
|
303 |
|
Securitized debt |
2,115 |
|
|
2,131 |
|
Subordinated debentures |
540 |
|
|
501 |
|
Total
interest expense |
64,467 |
|
|
63,984 |
|
|
|
|
|
NET INTEREST
INCOME |
13,918 |
|
|
17,642 |
|
|
|
|
|
OTHER INCOME
(LOSS): |
|
|
|
Recovery
of loan losses |
188 |
|
|
645 |
|
Realized
(loss) gain on investment securities and related hedges, net |
(1,223 |
) |
|
1,266 |
|
Realized
gain on distressed residential mortgage loans, net |
11,971 |
|
|
5,548 |
|
Unrealized gain (loss) on investment securities and related hedges,
net |
1,546 |
|
|
(2,490 |
) |
Unrealized gain on multi-family loans and debt held in
securitization trusts, net |
1,384 |
|
|
818 |
|
Other
income |
2,839 |
|
|
3,073 |
|
Total
other income |
16,705 |
|
|
8,860 |
|
|
|
|
|
Base
management and incentive fees |
3,078 |
|
|
3,526 |
|
Expenses
related to distressed residential mortgage loans |
2,239 |
|
|
3,194 |
|
Other
general and administrative expenses |
4,887 |
|
|
2,640 |
|
Total
general, administrative and other expenses |
10,204 |
|
|
9,360 |
|
|
|
|
|
INCOME FROM OPERATIONS
BEFORE INCOME TAXES |
20,419 |
|
|
17,142 |
|
Income tax expense |
1,237 |
|
|
191 |
|
NET INCOME |
19,182 |
|
|
16,951 |
|
Net income attributable
to non-controlling interest |
— |
|
|
— |
|
NET INCOME ATTRIBUTABLE
TO COMPANY |
19,182 |
|
|
16,951 |
|
Preferred stock
dividends |
(3,225 |
) |
|
(3,225 |
) |
NET INCOME ATTRIBUTABLE
TO COMPANY'S COMMON STOCKHOLDERS |
$ |
15,957 |
|
|
$ |
13,726 |
|
|
|
|
|
Basic income per common
share |
$ |
0.14 |
|
|
$ |
0.13 |
|
Diluted income per
common share |
$ |
0.14 |
|
|
$ |
0.13 |
|
Weighted average shares
outstanding-basic |
111,721 |
|
|
109,402 |
|
Weighted average shares
outstanding-diluted |
126,602 |
|
|
109,402 |
|
|
|
|
|
|
|
NEW YORK MORTGAGE TRUST, INC. AND
SUBSIDIARIES |
SUMMARY OF QUARTERLY EARNINGS |
(Dollar amounts in thousands, except per share
data) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
March 31, 2017 |
|
|
December 31, 2016 |
|
|
September 30, 2016 |
|
|
June 30, 2016 |
|
|
March 31, 2016 |
|
|
$ 13,918 |
|
$ |
14,814 |
|
$ |
15,518 |
|
$ |
16,664 |
|
$ |
17,642 |
|
Total other income |
16,705 |
|
|
5,675 |
|
|
16,632 |
|
|
10,071 |
|
|
8,860 |
|
Total general,
administrative and other expenses |
10,204 |
|
|
7,220 |
|
|
8,705 |
|
|
9,936 |
|
|
9,360 |
|
Income from operations
before income taxes |
20,419 |
|
|
13,269 |
|
|
23,445 |
|
|
16,799 |
|
|
17,142 |
|
Income tax expense |
1,237 |
|
|
375 |
|
|
163 |
|
|
2,366 |
|
|
191 |
|
Net income |
19,182 |
|
|
12,894 |
|
|
23,282 |
|
|
14,433 |
|
|
16,951 |
|
Net loss (income)
attributable to non-controlling interest |
— |
|
|
3 |
|
|
(14 |
) |
|
2 |
|
|
— |
|
Net income attributable
to Company |
19,182 |
|
|
12,897 |
|
|
23,268 |
|
|
14,435 |
|
|
16,951 |
|
Preferred stock
dividends |
(3,225 |
) |
|
(3,225 |
) |
|
(3,225 |
) |
|
(3,225 |
) |
|
(3,225 |
) |
Net income attributable
to Company's common stockholders |
15,957 |
|
|
9,672 |
|
|
20,043 |
|
|
11,210 |
|
|
13,726 |
|
Basic income per common
share |
$ |
0.14 |
|
|
$ |
0.09 |
|
|
$ |
0.18 |
|
|
$ |
0.10 |
|
|
$ |
0.13 |
|
Diluted income per
common share |
$ |
0.14 |
|
|
$ |
0.09 |
|
|
$ |
0.18 |
|
|
$ |
0.10 |
|
|
$ |
0.13 |
|
Weighted average shares
outstanding - basic |
111,721 |
|
|
109,911 |
|
|
109,569 |
|
|
109,489 |
|
|
109,402 |
|
Weighted average shares
outstanding - diluted |
126,602 |
|
|
109,911 |
|
|
109,569 |
|
|
109,489 |
|
|
109,402 |
|
|
|
|
|
|
|
|
|
|
|
Book value per common
share |
$ |
6.08 |
|
|
$ |
6.13 |
|
|
$ |
6.34 |
|
|
$ |
6.38 |
|
|
$ |
6.49 |
|
Dividends declared per
common share |
$ |
0.20 |
|
|
$ |
0.24 |
|
|
$ |
0.24 |
|
|
$ |
0.24 |
|
|
$ |
0.24 |
|
Dividends declared per
preferred share on Series B Preferred Stock |
$ |
0.484375 |
|
|
$ |
0.484375 |
|
|
$ |
0.484375 |
|
|
$ |
0.484375 |
|
|
$ |
0.484375 |
|
Dividends declared per
preferred share on Series C Preferred Stock |
$ |
0.4921875 |
|
|
$ |
0.4921875 |
|
|
$ |
0.4921875 |
|
|
$ |
0.4921875 |
|
|
$ |
0.4921875 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Allocation Summary
The following tables set forth our allocated
capital by investment type as well as the weighted average yield on
interest earning assets, average cost of funds and portfolio net
interest margin for our interest earning assets for the periods
indicated (dollar amounts in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agency RMBS |
|
Agency IOs |
|
Multi-Family |
|
Distressed Residential |
|
Residential Securitized
Loans |
|
Other |
|
Total |
At March 31,
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying
value |
$ |
420,124 |
|
|
$ |
61,836 |
|
|
$ |
733,383 |
|
|
$ |
645,455 |
|
|
$ |
91,711 |
|
|
$ |
40,555 |
|
|
$ |
1,993,064 |
|
Net
capital allocated |
$ |
68,156 |
|
|
$ |
68,135 |
|
|
$ |
501,133 |
|
|
$ |
282,487 |
|
|
$ |
4,502 |
|
|
$ |
(71,667 |
) |
|
$ |
852,746 |
|
Three Months
Ended December 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
interest earning assets |
$ |
441,013 |
|
|
$ |
88,472 |
|
|
$ |
457,943 |
|
|
$ |
661,738 |
|
|
$ |
97,480 |
|
|
$ |
22,892 |
|
|
$ |
1,769,538 |
|
Weighted
average yield on interest earning assets |
1.72 |
% |
|
3.24 |
% |
|
11.31 |
% |
|
4.69 |
% |
|
2.98 |
% |
|
6.92 |
% |
|
5.53 |
% |
Less:
Average cost of funds |
(1.16 |
)% |
|
(1.77 |
)% |
|
(4.55 |
)% |
|
(3.71 |
)% |
|
(1.49 |
)% |
|
— |
% |
|
(2.83 |
)% |
Portfolio
net interest margin |
0.56 |
% |
|
1.47 |
% |
|
6.76 |
% |
|
0.98 |
% |
|
1.49 |
% |
|
6.92 |
% |
|
2.70 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31,
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying
value |
$ |
441,472 |
|
|
$ |
87,778 |
|
|
$ |
628,522 |
|
|
$ |
671,272 |
|
|
$ |
95,144 |
|
|
$ |
32,215 |
|
|
$ |
1,956,403 |
|
Net
capital allocated |
$ |
59,846 |
|
|
$ |
76,880 |
|
|
$ |
394,401 |
|
|
$ |
257,903 |
|
|
$ |
4,371 |
|
|
$ |
57,761 |
|
|
$ |
851,162 |
|
Three Months
Ended December 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
interest earning assets |
$ |
462,229 |
|
|
$ |
100,573 |
|
|
$ |
377,751 |
|
|
$ |
673,639 |
|
|
$ |
102,280 |
|
|
$ |
19,481 |
|
|
$ |
1,735,953 |
|
Weighted
average yield on interest earning assets |
1.36 |
% |
|
0.49 |
% |
|
12.36 |
% |
|
5.48 |
% |
|
2.88 |
% |
|
5.98 |
% |
|
5.44 |
% |
Less:
Average cost of funds |
(1.22 |
)% |
|
(1.70 |
)% |
|
(5.54 |
)% |
|
(3.64 |
)% |
|
(1.26 |
)% |
|
— |
% |
|
(2.81 |
)% |
Portfolio
net interest margin |
0.14 |
% |
|
(1.21 |
)% |
|
6.82 |
% |
|
1.84 |
% |
|
1.62 |
% |
|
5.98 |
% |
|
2.63 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At September
30, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying
value |
$ |
479,359 |
|
|
$ |
86,343 |
|
|
$ |
561,207 |
|
|
$ |
679,873 |
|
|
$ |
99,426 |
|
|
$ |
27,415 |
|
|
$ |
1,933,623 |
|
Net
capital allocated |
$ |
59,482 |
|
|
$ |
87,845 |
|
|
$ |
413,943 |
|
|
$ |
258,659 |
|
|
$ |
4,192 |
|
|
$ |
38,959 |
|
|
$ |
863,080 |
|
Three Months
Ended September 30, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
interest earning assets |
$ |
491,843 |
|
|
$ |
118,945 |
|
|
$ |
341,637 |
|
|
$ |
686,122 |
|
|
$ |
108,641 |
|
|
$ |
14,184 |
|
|
$ |
1,761,372 |
|
Weighted
average yield on interest earning assets |
1.55 |
% |
|
4.11 |
% |
|
12.55 |
% |
|
5.48 |
% |
|
2.62 |
% |
|
5.95 |
% |
|
5.49 |
% |
Less:
Average cost of funds |
(0.58 |
)% |
|
(3.98 |
)% |
|
(6.55 |
)% |
|
(3.45 |
)% |
|
(1.24 |
)% |
|
— |
|
|
(2.67 |
)% |
Portfolio
net interest margin |
0.97 |
% |
|
0.13 |
% |
|
6.00 |
% |
|
2.03 |
% |
|
1.38 |
% |
|
5.95 |
% |
|
2.82 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At June 30,
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying
value |
$ |
507,294 |
|
|
$ |
114,007 |
|
|
$ |
519,341 |
|
|
$ |
655,968 |
|
|
$ |
106,173 |
|
|
$ |
24,015 |
|
|
$ |
1,926,798 |
|
Net
capital allocated |
$ |
69,961 |
|
|
$ |
92,471 |
|
|
$ |
431,084 |
|
|
$ |
256,619 |
|
|
$ |
4,320 |
|
|
$ |
12,588 |
|
|
$ |
867,043 |
|
Three Months
Ended June 30, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
interest earning assets |
$ |
522,651 |
|
|
$ |
132,453 |
|
|
$ |
315,531 |
|
|
$ |
595,455 |
|
|
$ |
116,258 |
|
|
$ |
9,196 |
|
|
$ |
1,691,544 |
|
Weighted
average yield on interest earning assets |
1.62 |
% |
|
8.18 |
% |
|
12.35 |
% |
|
6.11 |
% |
|
2.58 |
% |
|
5.39 |
% |
|
5.80 |
% |
Less:
Average cost of funds |
(0.71 |
)% |
|
(2.51 |
)% |
|
(6.73 |
)% |
|
(3.90 |
)% |
|
(1.13 |
)% |
|
— |
|
|
(2.59 |
)% |
Portfolio
net interest margin |
0.91 |
% |
|
5.67 |
% |
|
5.62 |
% |
|
2.21 |
% |
|
1.45 |
% |
|
5.39 |
% |
|
3.21 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31,
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying
value |
$ |
531,572 |
|
|
$ |
188,251 |
|
|
$ |
473,745 |
|
|
$ |
555,233 |
|
|
$ |
113,186 |
|
|
$ |
18,899 |
|
|
$ |
1,880,886 |
|
Net
capital allocated |
$ |
78,387 |
|
|
$ |
101,895 |
|
|
$ |
383,733 |
|
|
$ |
350,150 |
|
|
$ |
4,295 |
|
|
$ |
(43,452 |
) |
|
$ |
875,008 |
|
Three Months
Ended March 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
interest earning assets |
$ |
573,605 |
|
|
$ |
137,546 |
|
|
$ |
286,051 |
|
|
$ |
563,001 |
|
|
$ |
121,152 |
|
|
$ |
5,420 |
|
|
$ |
1,686,775 |
|
Weighted
average yield on interest earning assets |
1.71 |
% |
|
10.58 |
% |
|
12.09 |
% |
|
6.30 |
% |
|
2.46 |
% |
|
5.83 |
% |
|
5.79 |
% |
Less:
Average cost of funds |
(0.95 |
)% |
|
(2.48 |
)% |
|
(7.29 |
)% |
|
(4.18 |
)% |
|
(1.05 |
)% |
|
— |
|
|
(2.46 |
)% |
Portfolio
net interest margin |
0.76 |
% |
|
8.10 |
% |
|
4.80 |
% |
|
2.12 |
% |
|
1.41 |
% |
|
5.83 |
% |
|
3.33 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For Further Information
CONTACT:
AT THE COMPANY
Kristine R. Nario
Chief Financial Officer
Phone: (646) 216-2363
Email: knario@nymtrust.com
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