New York Mortgage Trust, Inc. (Nasdaq:NYMT) (“NYMT,” the “Company,”
“we,” “our” or “us”) today reported results for the three and six
months ended June 30, 2017.
Summary of Second Quarter 2017:
- Net income attributable to common stockholders of $11.1
million, or $0.10 per share, and comprehensive income to common
stockholders of $14.9 million, or $0.13 per share.
- Net interest income of $15.7 million and portfolio net interest
margin of 312 basis points.
- Book value per common share of $6.02 at June 30, 2017,
delivering an economic return of 2.3% for the quarter and an
annualized economic return of 9.5% for the six months ended
June 30, 2017.
- Declared second quarter dividend of $0.20 per common share that
was paid on July 25, 2017.
Management Overview
Steven Mumma, NYMT's Chairman and Chief
Executive Officer, commented: "The Company delivered a 2.3%
economic return for the second quarter and a 9.5% annualized
economic return for the first six months of the year. The Company
had GAAP earnings of $0.10 per share and comprehensive earnings of
$0.13 per share for the second quarter. The Company’s net interest
margin improved to 312 basis points from 270 basis points in the
first quarter, largely due to improved net margin in our distressed
residential loan portfolio and increased average interest earning
assets in our CMBS multifamily portfolio.
The credit markets continued to improve in the
second quarter with spreads in many markets tightening to levels
not seen in many years. This has benefited our current residential
and multi-family portfolios, both in our securities investments as
well as our direct lending. We expect to profitably exit several
multi-family JV equity investments that were made over the last two
years in the third quarter. We will continue to participate in the
Freddie Mac K Series multi-family program and expect an additional
opportunity to invest in a first loss security in 2017. Our
portfolio margin will benefit in the third quarter from the $26.3
million preferred equity investment we closed in July. This
investment has an expected return of over 12%. While the
consummation of these types of credit investments continue to
involve significant lead times, they remain an attractive use of
capital that we will continue to pursue with vigor.
While competition for certain credit assets
continues to be crowded, our diverse portfolio investment strategy
allows us to seek other attractive opportunities and monetize
previous investment decisions. Given the prevailing market
conditions for the sourcing of new investments in credit assets, we
will also consider new investments in non-credit assets that we
believe will compensate us appropriately for the risks associated
with them. We believe that our portfolio is well-positioned to
adapt to changing market and economic conditions."
Capital Allocation
The following tables set forth our allocated
capital by investment type at June 30, 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 June 30, 2017 (dollar amounts in
thousands):
|
|
Capital Allocation at June 30, 2017: |
|
Agency RMBS |
|
Agency IOs |
|
Multi-Family (1) |
|
Distressed Residential (2) |
|
Other (3) |
|
Total |
Carrying Value |
$ |
397,213 |
|
|
$ |
52,224 |
|
|
$ |
749,643 |
|
|
$ |
568,273 |
|
|
$ |
133,488 |
|
|
$ |
1,900,841 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
Callable |
(346,318 |
) |
|
(30,083 |
) |
|
(218,588 |
) |
|
(225,827 |
) |
|
(10,395 |
) |
|
(831,211 |
) |
Non-Callable |
— |
|
|
— |
|
|
(28,735 |
) |
|
(81,237 |
) |
|
(127,313 |
) |
|
(237,285 |
) |
Convertible |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(127,799 |
) |
|
(127,799 |
) |
Hedges (Net) (4) |
2,595 |
|
|
6,185 |
|
|
— |
|
|
— |
|
|
— |
|
|
8,780 |
|
Cash (5) |
3,984 |
|
|
23,167 |
|
|
5,133 |
|
|
6,740 |
|
|
66,332 |
|
|
105,356 |
|
Goodwill |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
25,222 |
|
|
25,222 |
|
Other |
(8 |
) |
|
4,917 |
|
|
615 |
|
|
19,086 |
|
|
(25,071 |
) |
|
(461 |
) |
Net Capital
Allocated |
$ |
57,466 |
|
|
$ |
56,410 |
|
|
$ |
508,068 |
|
|
$ |
287,035 |
|
|
$ |
(65,536 |
) |
|
$ |
843,443 |
|
% of Capital
Allocated |
6.8 |
% |
|
6.7 |
% |
|
60.3 |
% |
|
34.0 |
% |
|
(7.8 |
)% |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest Income- Three Months Ended June 30,
2017: |
Interest Income |
$ |
1,726 |
|
|
$ |
278 |
|
|
$ |
14,687 |
|
|
$ |
9,192 |
|
|
$ |
1,225 |
|
|
$ |
27,108 |
|
Interest Expense |
(1,088 |
) |
|
(176 |
) |
|
(2,657 |
) |
|
(3,826 |
) |
|
(3,653 |
) |
|
(11,400 |
) |
Net Interest
Income |
$ |
638 |
|
|
$ |
102 |
|
|
$ |
12,030 |
|
|
$ |
5,366 |
|
|
$ |
(2,428 |
) |
|
$ |
15,708 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio Net Interest Margin - Three Months Ended June 30,
2017 |
Average Interest
Earning Assets (6) |
$ |
418,998 |
|
|
$ |
66,196 |
|
|
$ |
529,285 |
|
|
$ |
621,936 |
|
|
$ |
123,711 |
|
|
$ |
1,760,126 |
|
Weighted Average Yield
on Interest Earning Assets (7) |
1.65 |
% |
|
1.68 |
% |
|
11.10 |
% |
|
5.91 |
% |
|
3.96 |
% |
|
6.16 |
% |
Less: Average Cost of
Funds (8) |
(1.22 |
)% |
|
(2.10 |
)% |
|
(4.28 |
)% |
|
(4.29 |
)% |
|
(2.13 |
)% |
|
(3.04 |
)% |
Portfolio Net Interest
Margin (9) |
0.43 |
% |
|
(0.42 |
)% |
|
6.82 |
% |
|
1.62 |
% |
|
1.83 |
% |
|
3.12 |
% |
|
(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 net interest income from multi-family investments is included
below in “Additional Information.”(2) Includes $429.8 million
of distressed residential mortgage loans and $128.9 million of
Non-Agency RMBS.(3) Includes our residential mortgage loans
held in securitization trusts amounting to $85.9 million,
investments in unconsolidated entities amounting to $10.8 million
and mortgage loans held for sale and mortgage loans held for
investment totaling $35.6 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. Non-callable liabilities consist of $45.0
million in subordinated debentures and $82.3 million in
residential collateralized debt obligations. (4) Includes
derivative assets, derivative liabilities, payable for securities
purchased related to our TBAs and restricted cash posted as
margin.(5) Includes $18.8 million held in overnight deposits
in our Agency IO portfolio to be used for trading purposes and $6.7
million in deposits held in our distressed residential
securitization trusts to be used to pay down outstanding debt.
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 $0.6 million and $2.6 million, respectively, for
the quarter. Our Average Cost of Funds includes interest expense on
our interest rate swaps and amortization of premium on our
swaptions. (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 |
June 30, 2017 |
|
16.5 |
% |
|
9.6 |
% |
|
17.5 |
% |
|
16.8 |
% |
|
14.7 |
% |
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 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter Earnings
Summary
For the quarter ended June 30, 2017, we
reported net income attributable to common stockholders of $11.1
million as compared to $16.0 million in the quarter ended March
31, 2017. The $4.9 million decrease is primarily due to lower
gains from decreased sales activity in our distressed residential
loan portfolio partially offset by increased net interest margin
and recovery of incentive fees.
We generated net interest income of $15.7
million and a portfolio net interest margin of 312 basis points for
the quarter ended June 30, 2017 as compared to 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
increase in net interest income of $1.8 million and improved net
margin of 42 basis points was primarily driven by:
- An increase in net interest income of $1.3 million from our
multi-family portfolio due to an increase in average interest
earning multi-family CMBS assets resulting from purchases at
the end of the first quarter that were held for the entirety of the
second quarter.
- An increase in net interest income of approximately $1.4
million from our distressed residential portfolio due to an
increase in asset yields in the second quarter.
- A decrease in net interest income of $0.4 million from our
Agency IO portfolio in the second quarter primarily related to
lower asset yields resulting from increased prepayment rates and
higher financing costs in the second quarter.
For the quarter ended June 30, 2017, we
recognized other income of $8.2 million as compared to other income
of $16.7 million in the quarter ended March 31, 2017. The
decrease in other income of $8.5 million is primarily driven
by:
- A decrease in realized gains on distressed residential mortgage
loans of $9.6 million resulting from decreased sales activity.
- A decrease in net unrealized gains on investment securities and
related hedges of $2.6 million primarily related to a decrease in
pricing on our Agency IO portfolio.
- An increase in realized gain on investment securities and
related hedges of $2.3 million primarily due to increases in net
gains recognized on investment securities and related hedges in the
Agency IO portfolio partially offset by a decrease in realized
gains on CMBS.
- An increase in income from operating real estate and real
estate held for sale in consolidated variable interest entities of
$2.3 million during the second quarter related to the consolidation
in accordance with GAAP of two multi-family apartment properties in
which the Company has preferred equity investments.
- A decrease in other income of $0.6 million primarily due to a
decrease in income on our investments in unconsolidated
entities.
The following table details the general and
administrative expenses incurred during the second quarter of 2017
and the first quarter of 2017 (dollar amounts in thousands):
|
|
|
|
|
|
|
|
Three Months Ended |
General and Administrative Expenses |
|
June 30, 2017 |
|
March 31, 2017 |
Salaries, benefits and
directors’ compensation |
|
$ |
2,920 |
|
|
$ |
2,835 |
|
Base management and
incentive fees |
|
(109 |
) |
|
3,078 |
|
Other general and
administrative expenses |
|
2,145 |
|
|
2,052 |
|
Total
general and administrative expenses |
|
$ |
4,956 |
|
|
$ |
7,965 |
|
|
|
Total general and administrative expenses for
the second quarter of 2017 were approximately $5.0 million as
compared to total general and administrative expenses of
approximately $8.0 million for the first quarter of 2017. The
decrease in general and administrative expenses of $3.0 million can
be primarily attributed to the recovery of incentive fee expense on
our distressed residential loan strategy due to lower gains from
decreased sales activity during the second quarter of 2017 as
compared to the first quarter of 2017.
The following table details the operating
expenses related to our distressed residential mortgage loans and
the consolidated multi-family apartment properties during the
second quarter of 2017 and the first quarter of 2017 (dollar
amounts in thousands):
|
|
|
|
|
|
|
|
Three Months Ended |
Operating Expenses |
|
June 30, 2017 |
|
March 31, 2017 |
Expenses on distressed
residential mortgage loans |
|
$ |
2,218 |
|
|
$ |
2,239 |
|
Expenses related to
operating real estate and real estate held for sale in consolidated
variable interest entities |
|
4,415 |
|
|
— |
|
Total
operating expenses |
|
$ |
6,633 |
|
|
$ |
2,239 |
|
|
|
Total operating expenses for the second quarter
of 2017 were $6.6 million as compared to $2.2 million for the first
quarter of 2017. The increase in total operating expenses of
$4.4 million is primarily attributable to recognition of expenses
related to consolidated multi-family apartment properties beginning
in the second quarter of 2017.
The results of operations applicable to the
consolidated multi-family apartment properties included in the
Company's condensed consolidated statements of operations for the
three months ended June 30, 2017 are as follows (dollar amounts in
thousands):
|
|
|
|
Three Months EndedJune
30, 2017 |
Income from operating
real estate and real estate held for sale in consolidated variable
interest entities |
|
$ |
2,316 |
|
Expenses related to
operating real estate and real estate held for sale in consolidated
variable interest entities |
|
4,415 |
|
Net loss
from operating real estate and real estate held for sale in
consolidated variable interest entities |
|
(2,099 |
) |
Net loss from operating
real estate and real estate held for sale in consolidated variable
interest entities attributable to non-controlling interest |
|
2,486 |
|
Net
income from operating real estate and real estate held for sale in
consolidated variable interest entities attributable to Company's
common stockholders |
|
$ |
387 |
|
|
|
Analysis of Changes in Book Value
The following table analyzes the changes in book
value of our common stock for the quarter ended June 30, 2017
(amounts in thousands, except per share):
|
|
|
|
|
Quarter Ended June 30, 2017 |
|
Amount |
|
Shares |
|
Per Share(1) |
Beginning
Balance |
$ |
680,197 |
|
|
111,843 |
|
|
$ |
6.08 |
|
Common stock issuance,
net |
653 |
|
|
48 |
|
|
|
Balance after share
issuance activity |
680,850 |
|
|
111,891 |
|
|
6.08 |
|
Dividends declared |
(22,378 |
) |
|
|
|
(0.20 |
) |
Net change in
accumulated other comprehensive income: |
|
|
|
|
|
Hedges |
(72 |
) |
|
|
|
— |
|
Investment securities |
3,870 |
|
|
|
|
0.04 |
|
Net
income attributable to Company's common stockholders
|
11,111 |
|
|
|
|
0.10 |
|
Ending
Balance |
$ |
673,381 |
|
|
111,891 |
|
|
$ |
6.02 |
|
|
(1) Outstanding shares used to calculate book value per
share for the ending balance is based on outstanding shares as of
June 30, 2017 of 111,891,130.
Conference Call
On Friday, August 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 and six months ended
June 30, 2017. The conference call dial-in number is (877)
312-8806. The replay will be available until Friday, August 11,
2017 and can be accessed by dialing (855) 859-2056 and entering
passcode 56892917. 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.
Second quarter 2017 financial and operating data
can be viewed in the Company’s Quarterly Report on Form 10-Q for
the quarter ended June 30, 2017, which is expected to be filed
with the Securities and Exchange Commission on or about August 9,
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 June 30, 2017 is set forth below (dollar
amounts in thousands):
|
|
|
|
|
|
|
|
Multi-family loans held
in securitization trusts, at fair value |
$ |
8,468,104 |
|
Multi-family CDOs, at
fair value |
(8,069,938 |
) |
Net carrying value |
398,166 |
|
Investment securities
available for sale, at fair value |
161,429 |
|
Total CMBS, at fair
value |
559,595 |
|
Mezzanine loan,
preferred equity investments and investments in unconsolidated
entities |
162,212 |
|
Real estate under
development (1) |
19,972 |
|
Operating real estate
held in consolidated variable interest entities, net |
28,907 |
|
Real estate held for
sale in consolidated variable interest entities |
34,806 |
|
Mortgages and notes
payable in consolidated variable interest entities |
(55,849 |
) |
Financing arrangements,
portfolio investments |
(218,588 |
) |
Securitized debt |
(28,735 |
) |
Cash and other |
5,748 |
|
Net Capital in
Multi-Family |
$ |
508,068 |
|
|
(1) Included in the Company’s accompanying condensed
consolidated balance sheets in receivables and other assets.
A reconciliation of our net interest income in
multi-family investments to our condensed consolidated financial
statements for the three months ended June 30, 2017 is set
forth below (dollar amounts in thousands):
|
|
Three Months Ended June 30, 2017 |
Interest income,
multi-family loans held in securitization trusts |
$ |
75,752 |
|
Interest income,
investment securities, available for sale (1) |
2,716 |
|
Interest income,
mezzanine loan and preferred equity investments (1)
|
3,092 |
|
Interest expense,
multi-family collateralized debt obligation |
66,873 |
|
Interest income,
Multi-Family, net |
14,687 |
|
Interest expense,
investment securities, available for sale |
1,954 |
|
Interest expense,
securitized debt |
703 |
|
Net interest income,
Multi-Family |
$ |
12,030 |
|
|
(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) |
|
|
|
June 30, 2017 |
|
December 31, 2016 |
|
|
(unaudited) |
|
|
ASSETS |
|
|
|
|
Investment securities,
available for sale, at fair value (including $45,400 and $43,897
held in securitization trusts as of June 30, 2017 and December 31,
2016, respectively, and pledged securities of $550,856 and
$690,592, as of June 30, 2017 and December 31, 2016,
respectively) |
|
$ |
740,903 |
|
|
$ |
818,976 |
|
Residential mortgage
loans held in securitization trusts, net |
|
85,911 |
|
|
95,144 |
|
Distressed residential
mortgage loans, net (including $152,621 and $195,347 held in
securitization trusts as of June 30, 2017 and December 31, 2016,
respectively) |
|
429,792 |
|
|
503,094 |
|
Multi-family loans held
in securitization trusts, at fair value |
|
8,468,104 |
|
|
6,939,844 |
|
Derivative assets |
|
172,642 |
|
|
150,296 |
|
Receivable for
securities sold |
|
5,976 |
|
|
— |
|
Cash and cash
equivalents |
|
75,391 |
|
|
83,554 |
|
Investment in
unconsolidated entities |
|
72,817 |
|
|
79,259 |
|
Mezzanine loan and
preferred equity investments |
|
100,207 |
|
|
100,150 |
|
Operating real estate
held in consolidated variable interest entities, net |
|
28,907 |
|
|
— |
|
Real estate held for
sale in consolidated variable interest entities |
|
34,806 |
|
|
— |
|
Goodwill |
|
25,222 |
|
|
25,222 |
|
Receivables and other
assets |
|
165,896 |
|
|
156,092 |
|
Total Assets
(1) |
|
$ |
10,406,574 |
|
|
$ |
8,951,631 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
Liabilities: |
|
|
|
|
Financing arrangements,
portfolio investments |
|
$ |
656,350 |
|
|
$ |
773,142 |
|
Financing arrangements,
residential mortgage loans |
|
174,861 |
|
|
192,419 |
|
Residential
collateralized debt obligations |
|
82,313 |
|
|
91,663 |
|
Multi-family
collateralized debt obligations, at fair value |
|
8,069,938 |
|
|
6,624,896 |
|
Securitized debt |
|
109,972 |
|
|
158,867 |
|
Mortgages and notes
payable in consolidated variable interest entities |
|
55,849 |
|
|
1,588 |
|
Derivative
liabilities |
|
310 |
|
|
498 |
|
Payable for securities
purchased |
|
172,557 |
|
|
148,015 |
|
Accrued expenses and
other liabilities |
|
68,182 |
|
|
64,381 |
|
Subordinated
debentures |
|
45,000 |
|
|
45,000 |
|
Convertible notes |
|
127,799 |
|
|
— |
|
Total
liabilities (1) |
|
9,563,131 |
|
|
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, 111,891,130 and 111,474,521
shares issued and outstanding as of June 30, 2017 and December 31,
2016, respectively
|
|
1,119 |
|
|
1,115 |
|
Additional paid-in
capital |
|
749,862 |
|
|
748,599 |
|
Accumulated other
comprehensive income |
|
8,358 |
|
|
1,639 |
|
Accumulated
deficit |
|
(80,217 |
) |
|
(62,537 |
) |
Company's stockholders'
equity |
|
838,381 |
|
|
848,075 |
|
Non-controlling
interest in consolidated variable interest entities |
|
5,062 |
|
|
3,087 |
|
Total
equity |
|
843,443 |
|
|
851,162 |
|
Total
Liabilities and Stockholders' Equity |
|
$ |
10,406,574 |
|
|
$ |
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 June 30, 2017 and
December 31, 2016, assets of consolidated VIEs totaled
$8,880,785 and $7,330,872, respectively, and the liabilities of
consolidated VIEs totaled$8,349,762 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 Ended June
30, |
|
For the Six Months Ended June 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
INTEREST INCOME: |
|
|
|
|
|
|
|
Investment securities and other |
$ |
10,199 |
|
|
$ |
8,591 |
|
|
$ |
20,000 |
|
|
$ |
17,025 |
|
Multi-family loans held in securitization trusts |
75,752 |
|
|
61,769 |
|
|
137,056 |
|
|
125,301 |
|
Residential mortgage loans held in securitization trusts |
1,365 |
|
|
921 |
|
|
2,607 |
|
|
1,757 |
|
Distressed residential mortgage loans |
6,665 |
|
|
8,485 |
|
|
12,703 |
|
|
17,309 |
|
Total
interest income |
93,981 |
|
|
79,766 |
|
|
172,366 |
|
|
161,392 |
|
|
|
|
|
|
|
|
|
INTEREST EXPENSE: |
|
|
|
|
|
|
|
Investment securities and other |
5,805 |
|
|
3,962 |
|
|
11,374 |
|
|
7,811 |
|
Convertible notes |
2,615 |
|
|
— |
|
|
4,590 |
|
|
— |
|
Multi-family collateralized debt obligations |
66,873 |
|
|
55,224 |
|
|
120,805 |
|
|
112,424 |
|
Residential collateralized debt obligations |
239 |
|
|
312 |
|
|
575 |
|
|
615 |
|
Securitized debt |
2,171 |
|
|
3,096 |
|
|
4,286 |
|
|
5,227 |
|
Subordinated debentures |
570 |
|
|
508 |
|
|
1,110 |
|
|
1,009 |
|
Total
interest expense |
78,273 |
|
|
63,102 |
|
|
142,740 |
|
|
127,086 |
|
|
|
|
|
|
|
|
|
NET INTEREST
INCOME |
15,708 |
|
|
16,664 |
|
|
29,626 |
|
|
34,306 |
|
|
|
|
|
|
|
|
|
OTHER INCOME
(LOSS): |
|
|
|
|
|
|
|
(Provision for) recovery of loan losses |
(300 |
) |
|
42 |
|
|
(112 |
) |
|
688 |
|
Realized
gain (loss) on investment securities and related hedges, net |
1,114 |
|
|
1,761 |
|
|
(109 |
) |
|
3,027 |
|
Realized
gain on distressed residential mortgage loans, net |
2,364 |
|
|
26 |
|
|
14,335 |
|
|
5,574 |
|
Unrealized (loss) gain on investment securities and related hedges,
net |
(1,051 |
) |
|
(667 |
) |
|
495 |
|
|
(3,159 |
) |
Unrealized gain on multi-family loans and debt held in
securitization trusts, net |
1,447 |
|
|
784 |
|
|
2,831 |
|
|
1,602 |
|
Income
from operating real estate and real estate held for sale in
consolidated variable interest entities |
2,316 |
|
|
— |
|
|
2,316 |
|
|
— |
|
Other
income |
2,282 |
|
|
8,125 |
|
|
5,121 |
|
|
11,198 |
|
Total
other income |
8,172 |
|
|
10,071 |
|
|
24,877 |
|
|
18,930 |
|
|
|
|
|
|
|
|
|
Base
management and incentive fees |
(109 |
) |
|
2,979 |
|
|
2,969 |
|
|
6,504 |
|
Expenses
related to distressed residential mortgage loans |
2,218 |
|
|
2,740 |
|
|
4,457 |
|
|
5,934 |
|
Expenses
related to operating real estate and real estate held for sale in
consolidated variable interest entities |
4,415 |
|
|
— |
|
|
4,415 |
|
|
— |
|
Other
general and administrative expenses |
5,065 |
|
|
4,217 |
|
|
9,952 |
|
|
6,857 |
|
Total
general, administrative and operating expenses |
11,589 |
|
|
9,936 |
|
|
21,793 |
|
|
19,295 |
|
|
|
|
|
|
|
|
|
INCOME FROM OPERATIONS
BEFORE INCOME TAXES |
12,291 |
|
|
16,799 |
|
|
32,710 |
|
|
33,941 |
|
Income tax expense |
442 |
|
|
2,366 |
|
|
1,680 |
|
|
2,557 |
|
NET INCOME |
11,849 |
|
|
14,433 |
|
|
31,030 |
|
|
31,384 |
|
Net loss attributable
to non-controlling interest in consolidated variable interest
entities |
2,487 |
|
|
2 |
|
|
2,487 |
|
|
2 |
|
NET INCOME ATTRIBUTABLE
TO COMPANY |
14,336 |
|
|
14,435 |
|
|
33,517 |
|
|
31,386 |
|
Preferred stock
dividends |
(3,225 |
) |
|
(3,225 |
) |
|
(6,450 |
) |
|
(6,450 |
) |
NET INCOME ATTRIBUTABLE
TO COMPANY'S COMMON STOCKHOLDERS |
$ |
11,111 |
|
|
$ |
11,210 |
|
|
$ |
27,067 |
|
|
$ |
24,936 |
|
|
|
|
|
|
|
|
|
Basic earnings per
common share |
$ |
0.10 |
|
|
$ |
0.10 |
|
|
$ |
0.24 |
|
|
$ |
0.23 |
|
Diluted earnings per
common share |
$ |
0.10 |
|
|
$ |
0.10 |
|
|
$ |
0.24 |
|
|
$ |
0.23 |
|
Weighted average shares
outstanding-basic |
111,863 |
|
|
109,489 |
|
|
111,792 |
|
|
109,445 |
|
Weighted average shares
outstanding-diluted |
111,863 |
|
|
109,489 |
|
|
111,792 |
|
|
109,445 |
|
|
|
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 |
|
June 30, 2017 |
|
March 31, 2017 |
|
December 31, 2016 |
|
September 30, 2016 |
|
June 30, 2016 |
Net interest
income |
$ |
15,708 |
|
|
$ |
13,918 |
|
|
$ |
14,814 |
|
|
$ |
15,518 |
|
|
$ |
16,664 |
|
Total other income |
8,172 |
|
|
16,705 |
|
|
5,675 |
|
|
16,632 |
|
|
10,071 |
|
Total general,
administrative and operating expenses |
11,589 |
|
|
10,204 |
|
|
7,220 |
|
|
8,705 |
|
|
9,936 |
|
Income from operations
before income taxes |
12,291 |
|
|
20,419 |
|
|
13,269 |
|
|
23,445 |
|
|
16,799 |
|
Income tax expense |
442 |
|
|
1,237 |
|
|
375 |
|
|
163 |
|
|
2,366 |
|
Net income |
11,849 |
|
|
19,182 |
|
|
12,894 |
|
|
23,282 |
|
|
14,433 |
|
Net loss (income)
attributable to non-controlling interest in consolidated variable
interest entities |
2,487 |
|
|
— |
|
|
3 |
|
|
(14 |
) |
|
2 |
|
Net income attributable
to Company |
14,336 |
|
|
19,182 |
|
|
12,897 |
|
|
23,268 |
|
|
14,435 |
|
Preferred stock
dividends |
(3,225 |
) |
|
(3,225 |
) |
|
(3,225 |
) |
|
(3,225 |
) |
|
(3,225 |
) |
Net income attributable
to Company's common stockholders |
11,111 |
|
|
15,957 |
|
|
9,672 |
|
|
20,043 |
|
|
11,210 |
|
Basic earnings per
common share |
$ |
0.10 |
|
|
$ |
0.14 |
|
|
$ |
0.09 |
|
|
$ |
0.18 |
|
|
$ |
0.10 |
|
Diluted earnings per
common share |
$ |
0.10 |
|
|
$ |
0.14 |
|
|
$ |
0.09 |
|
|
$ |
0.18 |
|
|
$ |
0.10 |
|
Weighted average shares
outstanding - basic |
111,863 |
|
|
111,721 |
|
|
109,911 |
|
|
109,569 |
|
|
109,489 |
|
Weighted average shares
outstanding - diluted |
111,863 |
|
|
126,602 |
|
|
109,911 |
|
|
109,569 |
|
|
109,489 |
|
|
|
|
|
|
|
|
|
|
|
Book value per common
share |
$ |
6.02 |
|
|
$ |
6.08 |
|
|
$ |
6.13 |
|
|
$ |
6.34 |
|
|
$ |
6.38 |
|
Dividends declared per
common share |
$ |
0.20 |
|
|
$ |
0.20 |
|
|
$ |
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 |
|
Other |
|
Total |
At June 30,
2017 |
|
|
|
|
|
|
|
|
|
|
|
Carrying
value |
$ |
397,213 |
|
|
$ |
52,224 |
|
|
$ |
749,643 |
|
|
$ |
568,273 |
|
|
$ |
133,488 |
|
|
$ |
1,900,841 |
|
Net
capital allocated |
$ |
57,466 |
|
|
$ |
56,410 |
|
|
$ |
508,068 |
|
|
$ |
287,035 |
|
|
$ |
(65,536 |
) |
|
$ |
843,443 |
|
Three Months
Ended June 30, 2017 |
|
|
|
|
|
|
|
|
|
|
|
Average
interest earning assets |
$ |
418,998 |
|
|
$ |
66,196 |
|
|
$ |
529,285 |
|
|
$ |
621,936 |
|
|
$ |
123,711 |
|
|
$ |
1,760,126 |
|
Weighted
average yield on interest earning assets |
1.65 |
% |
|
1.68 |
% |
|
11.10 |
% |
|
5.91 |
% |
|
3.96 |
% |
|
6.16 |
% |
Less:
Average cost of funds |
(1.22 |
)% |
|
(2.10 |
)% |
|
(4.28 |
)% |
|
(4.29 |
)% |
|
(2.13 |
)% |
|
(3.04 |
)% |
Portfolio
net interest margin |
0.43 |
% |
|
(0.42 |
)% |
|
6.82 |
% |
|
1.62 |
% |
|
1.83 |
% |
|
3.12 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
At March 31,
2017 |
|
|
|
|
|
|
|
|
|
|
|
Carrying
value |
$ |
420,124 |
|
|
$ |
61,836 |
|
|
$ |
733,383 |
|
|
$ |
645,455 |
|
|
$ |
132,266 |
|
|
$ |
1,993,064 |
|
Net
capital allocated |
$ |
68,156 |
|
|
$ |
68,135 |
|
|
$ |
501,133 |
|
|
$ |
282,487 |
|
|
$ |
(67,165 |
) |
|
$ |
852,746 |
|
Three Months
Ended March 31, 2017 |
|
|
|
|
|
|
|
|
|
|
|
Average
interest earning assets |
$ |
441,013 |
|
|
$ |
88,472 |
|
|
$ |
457,943 |
|
|
$ |
661,738 |
|
|
$ |
120,372 |
|
|
$ |
1,769,538 |
|
Weighted
average yield on interest earning assets |
1.72 |
% |
|
3.24 |
% |
|
11.31 |
% |
|
4.69 |
% |
|
3.73 |
% |
|
5.53 |
% |
Less:
Average cost of funds |
(1.16 |
)% |
|
(1.77 |
)% |
|
(4.55 |
)% |
|
(3.71 |
)% |
|
(2.81 |
)% |
|
(2.83 |
)% |
Portfolio
net interest margin |
0.56 |
% |
|
1.47 |
% |
|
6.76 |
% |
|
0.98 |
% |
|
0.92 |
% |
|
2.70 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
At December 31,
2016 |
|
|
|
|
|
|
|
|
|
|
|
Carrying
value |
$ |
441,472 |
|
|
$ |
87,778 |
|
|
$ |
628,522 |
|
|
$ |
671,272 |
|
|
$ |
127,359 |
|
|
$ |
1,956,403 |
|
Net
capital allocated |
$ |
59,846 |
|
|
$ |
76,880 |
|
|
$ |
394,401 |
|
|
$ |
257,903 |
|
|
$ |
62,132 |
|
|
$ |
851,162 |
|
Three Months
Ended December 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
Average
interest earning assets |
$ |
462,229 |
|
|
$ |
100,573 |
|
|
$ |
377,751 |
|
|
$ |
673,639 |
|
|
$ |
121,761 |
|
|
$ |
1,735,953 |
|
Weighted
average yield on interest earning assets |
1.36 |
% |
|
0.49 |
% |
|
12.36 |
% |
|
5.48 |
% |
|
3.37 |
% |
|
5.44 |
% |
Less:
Average cost of funds |
(1.22 |
)% |
|
(1.70 |
)% |
|
(5.54 |
)% |
|
(3.64 |
)% |
|
(2.48 |
)% |
|
(2.81 |
)% |
Portfolio
net interest margin |
0.14 |
% |
|
(1.21 |
)% |
|
6.82 |
% |
|
1.84 |
% |
|
0.89 |
% |
|
2.63 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
At September
30, 2016 |
|
|
|
|
|
|
|
|
|
|
|
Carrying
value |
$ |
479,359 |
|
|
$ |
86,343 |
|
|
$ |
561,207 |
|
|
$ |
679,873 |
|
|
$ |
126,841 |
|
|
$ |
1,933,623 |
|
Net
capital allocated |
$ |
59,482 |
|
|
$ |
87,845 |
|
|
$ |
413,943 |
|
|
$ |
258,659 |
|
|
$ |
43,151 |
|
|
$ |
863,080 |
|
Three Months
Ended September 30, 2016 |
|
|
|
|
|
|
|
|
|
|
|
Average
interest earning assets |
$ |
491,843 |
|
|
$ |
118,945 |
|
|
$ |
341,637 |
|
|
$ |
686,122 |
|
|
$ |
122,825 |
|
|
$ |
1,761,372 |
|
Weighted
average yield on interest earning assets |
1.55 |
% |
|
4.11 |
% |
|
12.55 |
% |
|
5.48 |
% |
|
3.01 |
% |
|
5.49 |
% |
Less:
Average cost of funds |
(0.58 |
)% |
|
(3.98 |
)% |
|
(6.55 |
)% |
|
(3.45 |
)% |
|
(2.39 |
) |
|
(2.67 |
)% |
Portfolio
net interest margin |
0.97 |
% |
|
0.13 |
% |
|
6.00 |
% |
|
2.03 |
% |
|
0.62 |
% |
|
2.82 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
At June 30,
2016 |
|
|
|
|
|
|
|
|
|
|
|
Carrying
value |
$ |
507,294 |
|
|
$ |
114,007 |
|
|
$ |
519,341 |
|
|
$ |
655,968 |
|
|
$ |
130,188 |
|
|
$ |
1,926,798 |
|
Net
capital allocated |
$ |
69,961 |
|
|
$ |
92,471 |
|
|
$ |
431,084 |
|
|
$ |
256,619 |
|
|
$ |
16,908 |
|
|
$ |
867,043 |
|
Three Months
Ended June 30, 2016 |
|
|
|
|
|
|
|
|
|
|
|
Average
interest earning assets |
$ |
522,651 |
|
|
$ |
132,453 |
|
|
$ |
315,531 |
|
|
$ |
595,455 |
|
|
$ |
125,454 |
|
|
$ |
1,691,544 |
|
Weighted
average yield on interest earning assets |
1.62 |
% |
|
8.18 |
% |
|
12.35 |
% |
|
6.11 |
% |
|
2.79 |
% |
|
5.80 |
% |
Less:
Average cost of funds |
(0.71 |
)% |
|
(2.51 |
)% |
|
(6.73 |
)% |
|
(3.90 |
)% |
|
(2.24 |
) |
|
(2.59 |
)% |
Portfolio
net interest margin |
0.91 |
% |
|
5.67 |
% |
|
5.62 |
% |
|
2.21 |
% |
|
0.55 |
% |
|
3.21 |
% |
|
CONTACT:
AT THE COMPANY
Kristine R. Nario
Chief Financial Officer
Phone: (646) 216-2363
Email: knario@nymtrust.com
New York Mortgage (NASDAQ:NYMT)
Historical Stock Chart
From Mar 2024 to Apr 2024
New York Mortgage (NASDAQ:NYMT)
Historical Stock Chart
From Apr 2023 to Apr 2024