New York Mortgage Trust, Inc. (Nasdaq: NYMT) (“NYMT,” the
“Company,” “we,” “our” or “us”) today reported results for the
three months ended March 31, 2019.
Summary of First Quarter 2019:
- Earned net income attributable to
common stockholders of $38.2 million, or $0.22 per share (basic),
and comprehensive income to common stockholders of $51.3 million,
or $0.29 per share.
- Earned net interest income of $26.2
million and portfolio net interest margin of 240 basis points.
- Recognized book value per common
share of $5.75 at March 31, 2019, an increase of approximately
1.8% from December 31, 2018, resulting in an economic return of
5.3% for the quarter and an annualized economic return of 21.2% for
the three months ended March 31, 2019.
- Declared first quarter dividend of
$0.20 per common share that was paid on April 25, 2019.
- Issued 31,740,000 shares of common
stock through underwritten public offerings, resulting in total net
proceeds of $184.9 million.
- Acquired residential and
multi-family credit assets totaling $432.8 million.
- Sold multi-family CMBS for
aggregate proceeds of approximately $56.8 million, resulting in a
realized gain of $16.8 million.
Management Overview
Steven Mumma, NYMT’s Chairman and Chief
Executive Officer, commented: “2019 is off to a solid start
for the Company after posting GAAP earnings per share of $0.22 and
comprehensive earnings per share of $0.29 for the first quarter.
Book value per common share moved higher as well, up 1.8% from the
end of the prior quarter resulting in a total economic return for
the quarter of 5.3%, or 21.2% on an annualized basis. The Company
expanded both net interest income and net interest margin in the
first quarter, generating $26.2 million of net interest income, a
single quarter record for the Company and a 20% increase over the
prior quarter, and net interest margin of 240 basis points, an
improvement of 10 basis points over the prior quarter. The
Company’s earnings not only benefited from spread tightening during
the quarter, but were also spurred by the impact for a full quarter
of the Company’s $944.2 million of fourth quarter credit
investments, much of which was funded in December. The
Company completed two accretive common equity offerings during the
first quarter raising approximately $185 million and increasing the
Company’s common equity market capitalization to approximately $1.1
billion. The Company efficiently deployed those capital
proceeds into credit assets, adding $433 million in the quarter,
including $172 million in multi-family and $261 million in
residential credit, bringing our total investment portfolio to $3.8
billion. Consistent with our investment objectives, we
opportunistically sold two multi-family first loss
principal only securities, neither of which was wholly-owned by us,
resulting in a realized gain of $16.8 million and a net gain to the
Company of $3.1 million.
In March 2019, we declared a $0.20 per share
dividend on our common stock, our ninth quarter in a row at that
level. Over the course of the last nine months, our residential and
multi-family teams collectively have acquired more than $1.5
billion in credit investments. Moreover, we have raised more
than $450 million in common equity over the past year,
substantially all of which has been deployed in a timely manner
with minimal long-term drag on our operating performance. We
believe the Company is well positioned to be a market leader in
multi-family and residential credit investing, with improved access
to the capital markets, a relatively conservative leverage profile
of approximately two times our capital base and an investment team
that continues to find and deliver value to our shareholders."
Jason Serrano, NYMT’s President added: “Under a
slowing economy, we see general market returns continuing to be
less attractive. However, we remain optimistic about our
ability to source compelling risk-adjusted returns away from the
broader markets and instead, into subsectors where we believe we
can benefit from our operational advantages and deep credit
experience in both multi-family and residential credit markets. We
believe the strength of our balance sheet and current investment
portfolio allows us to be selective buyers of assets. Our platform
provides us with the flexibility to adapt to evolving market
conditions in order to prudently grow our portfolio, without
pressure to support the margins of affiliated businesses. Most
importantly, we are focused on a dual mandate of preserving book
value and providing our shareholders with attractive and stable
dividend yields. We are excited about the opportunity before us in
an increasingly competitive landscape."
Capital Allocation
The following tables set forth our allocated
capital by investment category at March 31, 2019, our interest
income and interest expense by investment category, and the
weighted average yield, average cost of funds, and portfolio net
interest margin for our average interest earning assets (by
investment category) for the three months ended March 31, 2019
(dollar amounts in thousands):
Capital Allocation at March 31,
2019:
|
Agency RMBS(1) |
|
Residential Credit (2) |
|
Multi-Family Credit(3) |
|
Other (4) |
|
Total |
Carrying Value |
$ |
1,023,938 |
|
|
$ |
1,467,571 |
|
|
$ |
1,299,404 |
|
|
$ |
— |
|
|
$ |
3,790,913 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
Callable(5) |
(893,860 |
) |
|
(755,348 |
) |
|
(623,797 |
) |
|
— |
|
|
(2,273,005 |
) |
Non-Callable |
— |
|
|
(49,247 |
) |
|
— |
|
|
(45,000 |
) |
|
(94,247 |
) |
Convertible |
— |
|
|
— |
|
|
— |
|
|
(131,301 |
) |
|
(131,301 |
) |
Hedges (Net) (6) |
14,873 |
|
|
— |
|
|
— |
|
|
— |
|
|
14,873 |
|
Cash and Restricted
Cash (7) |
10,239 |
|
|
28,770 |
|
|
20,491 |
|
|
6,710 |
|
|
66,210 |
|
Goodwill |
— |
|
|
— |
|
|
— |
|
|
25,222 |
|
|
25,222 |
|
Other |
2,473 |
|
|
32,214 |
|
|
(9,194 |
) |
|
(44,706 |
) |
|
(19,213 |
) |
Net Capital
Allocated |
$ |
157,663 |
|
|
$ |
723,960 |
|
|
$ |
686,904 |
|
|
$ |
(189,075 |
) |
|
$ |
1,379,452 |
|
|
|
|
|
|
|
|
|
|
|
Net Interest
Income - Three Months Ended March 31, 2019: |
|
|
|
|
|
|
|
|
|
Interest Income |
$ |
7,568 |
|
|
$ |
19,384 |
|
|
$ |
24,233 |
|
|
$ |
— |
|
|
$ |
51,185 |
|
Interest Expense |
(6,360 |
) |
|
(8,832 |
) |
|
(6,357 |
) |
|
(3,433 |
) |
|
(24,982 |
) |
Net Interest Income
(Expense) |
$ |
1,208 |
|
|
$ |
10,552 |
|
|
$ |
17,876 |
|
|
$ |
(3,433 |
) |
|
$ |
26,203 |
|
|
|
|
|
|
|
|
|
|
|
Portfolio Net
Interest Margin - Three Months Ended March 31, 2019: |
|
|
|
|
|
|
|
|
|
Average Interest
Earning Assets (8) |
$ |
1,053,529 |
|
|
$ |
1,312,263 |
|
|
$ |
927,201 |
|
|
— |
|
|
$ |
3,292,993 |
|
Weighted Average Yield
on Interest Earning Assets (9) |
2.87 |
% |
|
5.91 |
% |
|
10.45 |
% |
|
— |
|
|
6.22 |
% |
Less: Average Cost of
Funds (10) |
(2.76 |
)% |
|
(4.71 |
)% |
|
(4.37 |
)% |
|
— |
|
|
(3.82 |
)% |
Portfolio Net Interest
Margin (11) |
0.11 |
% |
|
1.20 |
% |
|
6.08 |
% |
|
— |
|
|
2.40 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes Agency fixed-rate RMBS and
Agency ARMs.
(2) Includes $875.6 million of
distressed and other residential mortgage loans at fair value,
$262.2 million of distressed and other residential mortgage loans
at carrying value, $314.1 million of non-Agency RMBS and $11.2
million of investments in unconsolidated entities.
(3) 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 condensed consolidated financial
statements. Carrying Value and Average Interest Earning
Assets for the quarter exclude 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.”
(4) Other includes non-callable liabilities
consisting of $45.0 million in subordinated debentures
and $131.3 million of convertible notes.
(5) Includes repurchase agreements.
(6) Includes derivative liabilities of
$12.8 million netted against a $27.7 million variation margin
receivable.
(7) Restricted cash is included in the
Company’s accompanying condensed consolidated balance sheets in
receivables and other assets.
(8) Our Average Interest Earning Assets is
calculated each quarter based on daily average amortized cost.
(9) 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.
(10) 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 $0.7 million and $2.7 million,
respectively, for the quarter. Our Average Cost of Funds includes
interest expense on our interest rate swaps.
(11) 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 constant
prepayment rates (“CPR”) for our Agency fixed-rate RMBS and Agency
ARMs , by quarter, for the quarterly periods indicated.
Quarter Ended |
|
Weighted Average |
|
Agency Fixed-Rate RMBS |
|
Agency ARMs |
March 31, 2019 |
|
6.6 |
% |
|
6.5 |
% |
|
8.2 |
% |
December 31, 2018 |
|
7.2 |
% |
|
6.8 |
% |
|
12.9 |
% |
September 30, 2018 |
|
7.8 |
% |
|
7.3 |
% |
|
14.6 |
% |
June 30, 2018 |
|
6.6 |
% |
|
5.9 |
% |
|
16.3 |
% |
March 31, 2018 |
|
5.8 |
% |
|
5.4 |
% |
|
10.2 |
% |
|
|
|
|
|
|
|
|
|
|
First Quarter Earnings Summary
For the quarter ended March 31, 2019, we
reported net income attributable to common stockholders of $38.2
million as compared to $3.7 million for the quarter ended December
31, 2018.
We generated net interest income of $26.2
million and a portfolio net interest margin of 240 basis points for
the quarter ended March 31, 2019 as compared to net interest
income of $21.9 million and a portfolio net interest margin of 230
basis points for the quarter ended December 31, 2018. The
increase in net interest income in the first quarter was primarily
driven by the increase of $604.3 million in average interest
earning assets in our residential credit and multi-family credit
portfolios.
The main components of other income for the
quarters ended March 31, 2019 and December 31, 2018, respectively,
are detailed in the following table (dollar amounts in
thousands):
|
|
Three Months Ended |
Other Income |
|
March 31, 2019 |
|
December 31, 2018 |
Recovery of (provision
for) loan losses |
|
$ |
1,065 |
|
|
$ |
(2,492 |
) |
Realized gain on
investment securities and related hedges, net |
|
16,801 |
|
|
20 |
|
Realized gain (loss) on
distressed and other residential mortgage loans at carrying value,
net |
|
2,079 |
|
|
(3,677 |
) |
Net gain on distressed
and other residential mortgage loans at fair value |
|
11,010 |
|
|
8,128 |
|
Unrealized loss on
investment securities and related hedges, net |
|
(14,586 |
) |
|
(15,469 |
) |
Unrealized gain on
multi-family loans and debt held in securitization trusts, net |
|
9,410 |
|
|
5,714 |
|
Loss on extinguishment
of debt |
|
(2,857 |
) |
|
— |
|
Income from real estate
held for sale in consolidated variable interest entities |
|
215 |
|
|
1,404 |
|
Other income |
|
7,728 |
|
|
7,589 |
|
Total
other income |
|
$ |
30,865 |
|
|
$ |
1,217 |
|
|
For the quarter ended March 31, 2019, we recognized other
income of $30.9 million primarily comprised of the following:
- Realized gain of $16.8 million on
the sale of certain multi-family CMBS.
- Total net gain of $11.0 million
from our distressed and other residential mortgage loans held at
fair value, comprised of a $7.9 million unrealized gain and a $3.1
million realized gain during the period.
- Unrealized loss of $14.6 million
from our interest rate swaps accounted for as trading
instruments.
- Unrealized gain of $9.4 million on
our Consolidated K-Series investments driven primarily by
tightening credit spreads and an increase in our investment in the
Consolidated K-Series as compared to the prior quarter.
- Loss on extinguishment of debt of
$2.9 million related to our repayment of outstanding notes from our
2012 multi-family CMBS re-securitization.
- Other income of $7.7 million
comprised primarily of $3.7 million in unrealized gains on joint
venture equity investments and a $2.8 million gain on a redemption
of a preferred equity investment, partially offset by $0.4 million
in net losses from other equity investments. Additionally, a
consolidated variable interest entity recognized a $1.6 million
gain from the sale of its multi-family apartment property
(which is fully allocated to net income attributable to
non-controlling interest - see the table below for further
information).
The following table details the general and
administrative expenses for the quarters ended March 31, 2019
and December 31, 2018, respectively (dollar amounts in
thousands):
|
|
Three Months Ended |
General and Administrative Expenses |
|
March 31, 2019 |
|
December 31, 2018 |
Salaries, benefits and
directors’ compensation |
|
$ |
5,671 |
|
|
$ |
4,295 |
|
Base management and
incentive fees |
|
723 |
|
|
2,880 |
|
Other general and
administrative expenses |
|
2,516 |
|
|
2,445 |
|
Total
general and administrative expenses |
|
$ |
8,910 |
|
|
$ |
9,620 |
|
|
The change in general and administrative
expenses is primarily related to the increase in salaries and
benefits due to the increase in employee headcount as part of the
internalization of our single-family residential credit strategy,
which is offset by a decrease in base management and incentive
fees.
The following table sets out the operating
expenses related to our distressed and other residential mortgage
loans and the real estate held for sale in consolidated variable
interest entities for the quarters ended March 31, 2019 and
December 31, 2018, respectively (dollar amounts in thousands):
|
|
Three Months Ended |
Operating Expenses |
|
March 31, 2019 |
|
December 31, 2018 |
Expenses related to
distressed and other residential mortgage loans |
|
$ |
3,252 |
|
|
$ |
3,377 |
|
Expenses related to
real estate held for sale in consolidated variable interest
entities |
|
482 |
|
|
1,094 |
|
Total
operating expenses |
|
$ |
3,734 |
|
|
$ |
4,471 |
|
|
The decrease in operating expenses in the first quarter can be
primarily attributed to the decrease in expenses related to real
estate held for sale in consolidated variable interest entities as
a result of the sale of a multi-family apartment property in
February 2019.
The results of operations applicable to the real
estate held for sale in consolidated variable interest entities
included in the Company's condensed consolidated statements of
operations for the three months ended March 31, 2019 are as follows
(dollar amounts in thousands):
|
Three Months Ended March 31, 2019 |
Income |
$ |
215 |
|
Gain on sale |
1,580 |
|
Expenses |
(482 |
) |
Net
income |
1,313 |
|
Net income attributable
to non-controlling interest |
(1,272 |
) |
Net
income attributable to Company's common stockholders |
$ |
41 |
|
|
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, 2019
(amounts in thousands, except per share):
|
Quarter Ended March 31, 2019 |
|
Amount |
|
Shares |
|
Per Share(1) |
Beginning
Balance |
$ |
879,389 |
|
|
155,590 |
|
|
$ |
5.65 |
|
Common stock issuance,
net(2) |
186,021 |
|
|
32,241 |
|
|
|
Balance after share
issuance activity |
1,065,410 |
|
|
187,831 |
|
|
5.68 |
|
Dividends declared |
(37,566 |
) |
|
|
|
(0.20 |
) |
Net change in
accumulated other comprehensive income: |
|
|
|
|
|
Investment securities (3) |
13,047 |
|
|
|
|
0.07 |
|
Net income attributable
to Company's common stockholders |
38,214 |
|
|
|
|
0.20 |
|
Ending
Balance |
$ |
1,079,105 |
|
|
187,831 |
|
|
$ |
5.75 |
|
|
(1) Outstanding shares used to calculate
book value per share for the ending balance is based on outstanding
shares as of March 31, 2019 of 187,831,455.
(2) Includes amortization of stock based
compensation.
(3) The increase relates to unrealized
gains in our investment securities due to improved pricing from
December 31, 2018.
Conference Call
On Tuesday, May 7, 2019 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, 2019. The conference call dial-in number is (877)
312-8806. The replay will be available until Tuesday, May 14, 2019
and can be accessed by dialing (855) 859-2056 and entering passcode
9282958. 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 2019 financial and operating data
can be viewed in the Company’s Quarterly Report on Form 10-Q for
the quarter ended March 31, 2019, which is expected to be
filed with the Securities and Exchange Commission on or about May
10, 2019. 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 targets multi-family CMBS, direct
financing to owners of multi-family properties through preferred
equity and mezzanine loan investments, residential mortgage loans
(including distressed residential mortgage loans, non-QM loans,
second mortgage loans and other residential mortgage loans),
non-Agency RMBS, Agency RMBS and other mortgage-related and
residential housing-related investments. 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
mortgage loans issued or 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”); “non-Agency RMBS” refers to RMBS that are not guaranteed by
any agency of the U.S. Government or any GSE; “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; “IO RMBS” refers to RMBS comprised
of IOs; “Agency IOs” refers to Agency RMBS comprised of IO RMBS;
“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 re-performing, non-performing, and other
delinquent 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 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; “multi-family securitized loans” refers to the
commercial mortgage loans included in the Consolidated K-Series;
“CDO” refers to collateralized debt obligation; “Consolidated
K-Series” refers to certain Freddie Mac-sponsored multi-family loan
K-Series securitizations, of which we, or one of our special
purpose entities, own the first loss PO securities and certain IO
and/or mezzanine securities issued by them that we consolidate in
our financial statements in accordance with GAAP and “Residential
Credit” portfolio includes distressed and other residential
mortgage loans at fair value, distressed and other residential
mortgage loans at carrying value, non-Agency RMBS, mortgage loans
held for sale, mortgage loans held for investment and certain
investments in unconsolidated entities that invest in single-family
residential assets.
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
our multi-family credit portfolio to our condensed consolidated
financial statements as of March 31, 2019 is set forth below
(dollar amounts in thousands):
Multi-family loans held
in securitization trusts, at fair value |
$ |
14,328,336 |
|
Multi-family CDOs, at
fair value |
(13,547,195 |
) |
Net carrying value |
781,141 |
|
Investment securities
available for sale, at fair value |
245,941 |
|
Total CMBS, at fair
value |
1,027,082 |
|
Preferred equity
investments, mezzanine loans and investments in unconsolidated
entities |
256,307 |
|
Real estate under
development (1) |
20,001 |
|
Mortgages and notes
payable in consolidated variable interest entities |
(3,986 |
) |
Repurchase agreements,
investment securities |
(623,797 |
) |
Cash and other |
11,297 |
|
Net Capital in
Multi-Family |
$ |
686,904 |
|
|
|
|
|
(1) Included in the Company’s accompanying condensed
consolidated balance sheets in receivables and other assets.
A reconciliation of our net interest income
generated by our multi-family credit portfolio to our condensed
consolidated financial statements for the three months ended
March 31, 2019 is set forth below (dollar amounts in
thousands):
|
Three Months Ended March 31, 2019 |
Interest income,
multi-family loans held in securitization trusts |
$ |
111,768 |
|
Interest income,
investment securities, available for sale (1) |
4,255 |
|
Interest income,
preferred equity and mezzanine loan investments |
5,007 |
|
Interest expense,
multi-family collateralized debt obligations |
(96,797 |
) |
Interest income,
Multi-Family, net |
24,233 |
|
Interest expense,
repurchase agreements |
(5,863 |
) |
Interest expense,
securitized debt |
(494 |
) |
Net interest income,
Multi-Family |
$ |
17,876 |
|
|
(1) Included in the Company’s accompanying
condensed consolidated statements of operations in interest income,
investment securities and other interest earning assets.
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
assets; changes in credit spreads; changes in the long-term credit
ratings of the U.S., Fannie Mae, Freddie Mac, and Ginnie Mae;
market volatility; changes in prepayment rates on the loans the
Company owns or that underlie the Company’s investment securities;
increased rates of default and/or decreased recovery rates on the
Company's assets; the Company's ability to identify and acquire its
targeted assets, including assets in its investment pipeline; 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; 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.
For Further Information
CONTACT: |
|
AT THE
COMPANYKristine R. Nario-EngChief Financial OfficerPhone:
(646) 216-2363Email: KNario@nymtrust.com |
|
|
|
FINANCIAL TABLES FOLLOW
NEW YORK MORTGAGE TRUST, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(Dollar amounts in thousands, except share
data)
|
|
March 31, 2019 |
|
December 31, 2018 |
|
|
(unaudited) |
|
|
ASSETS |
|
|
|
|
Investment securities,
available for sale, at fair value |
|
$ |
1,583,965 |
|
|
$ |
1,512,252 |
|
Distressed and other residential mortgage loans, at fair value |
|
875,566 |
|
|
737,523 |
|
Distressed and other residential mortgage loans, net |
|
262,193 |
|
|
285,261 |
|
Investments in unconsolidated entities |
|
92,364 |
|
|
73,466 |
|
Preferred equity and mezzanine loan investments |
|
175,128 |
|
|
165,555 |
|
Multi-family loans held in securitization trusts, at fair
value |
|
14,328,336 |
|
|
11,679,847 |
|
Derivative assets |
|
14,873 |
|
|
10,263 |
|
Cash
and cash equivalents |
|
65,359 |
|
|
103,724 |
|
Real
estate held for sale in consolidated variable interest
entities |
|
— |
|
|
29,704 |
|
Goodwill |
|
25,222 |
|
|
25,222 |
|
Receivables and other assets |
|
132,135 |
|
|
114,821 |
|
Total Assets (1) |
|
$ |
17,555,141 |
|
|
$ |
14,737,638 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
Liabilities: |
|
|
|
|
Repurchase agreements |
|
$ |
2,273,005 |
|
|
$ |
2,131,505 |
|
Residential collateralized debt obligations |
|
49,247 |
|
|
53,040 |
|
Multi-family collateralized debt obligations, at fair value |
|
13,547,195 |
|
|
11,022,248 |
|
Securitized debt |
|
— |
|
|
42,335 |
|
Mortgages and notes payable in consolidated variable interest
entities |
|
3,986 |
|
|
31,227 |
|
Accrued
expenses and other liabilities |
|
125,955 |
|
|
101,228 |
|
Subordinated debentures |
|
45,000 |
|
|
45,000 |
|
Convertible notes |
|
131,301 |
|
|
130,762 |
|
Total liabilities (1) |
|
16,175,689 |
|
|
13,557,345 |
|
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, 6,600,000 and
4,140,000 shares authorized at March 31, 2019 and December 31,
2018, respectively, 3,600,000 shares issued and outstanding |
|
86,862 |
|
|
86,862 |
|
Preferred stock, $0.01 par value, 8.00% Series D Fixed-to-Floating
Rate cumulative redeemable, $25 liquidation preference per share,
8,400,000 and 5,750,000 shares authorized at March 31, 2019 and
December 31, 2018, respectively, 5,400,000 shares issued and
outstanding |
|
130,496 |
|
|
130,496 |
|
Common
stock, $0.01 par value, 400,000,000 shares authorized, 187,831,455
and 155,589,528 shares issued and outstanding as of March 31, 2019
and December 31, 2018, respectively |
|
1,878 |
|
|
1,556 |
|
Additional paid-in capital |
|
1,199,090 |
|
|
1,013,391 |
|
Accumulated other comprehensive loss |
|
(9,088 |
) |
|
(22,135 |
) |
Accumulated deficit |
|
(102,530 |
) |
|
(103,178 |
) |
Company's stockholders' equity |
|
1,379,105 |
|
|
1,179,389 |
|
Non-controlling interest in consolidated variable interest
entities |
|
347 |
|
|
904 |
|
Total equity |
|
1,379,452 |
|
|
1,180,293 |
|
Total Liabilities and Stockholders' Equity |
|
$ |
17,555,141 |
|
|
$ |
14,737,638 |
|
|
(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, 2019 and
December 31, 2018, assets of consolidated VIEs totaled
$14,450,531 and $11,984,374, respectively, and the liabilities of
consolidated VIEs totaled $13,647,045 and $11,191,736,
respectively.
NEW YORK MORTGAGE TRUST, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(Dollar amounts in thousands, except per
share data)(unaudited)
|
For the Three Months Ended |
March 31, |
|
2019 |
|
2018 |
INTEREST INCOME: |
|
|
|
Investment
securities and other interest earning assets |
$ |
15,316 |
|
|
$ |
11,813 |
|
Distressed and other residential mortgage loans |
15,891 |
|
|
7,541 |
|
Preferred equity and mezzanine loan investments |
5,007 |
|
|
4,445 |
|
Multi-family loans held in securitization trusts |
111,768 |
|
|
85,092 |
|
Total interest income |
147,982 |
|
|
108,891 |
|
|
|
|
|
INTEREST EXPENSE: |
|
|
|
Repurchase agreements and other interest bearing liabilities |
20,386 |
|
|
9,651 |
|
Residential collateralized debt obligations |
422 |
|
|
411 |
|
Multi-family collateralized debt obligations |
96,797 |
|
|
74,478 |
|
Securitized debt |
742 |
|
|
1,330 |
|
Subordinated debentures |
741 |
|
|
620 |
|
Convertible notes |
2,691 |
|
|
2,649 |
|
Total interest expense |
121,779 |
|
|
89,139 |
|
|
|
|
|
NET
INTEREST INCOME |
26,203 |
|
|
19,752 |
|
|
|
|
|
OTHER
INCOME (LOSS): |
|
|
|
Recovery of (provision for) loan losses |
1,065 |
|
|
(42 |
) |
Realized gain (loss) on investment securities and related hedges,
net |
16,801 |
|
|
(3,423 |
) |
Realized gain (loss) on distressed and other residential mortgage
loans at carrying value, net |
2,079 |
|
|
(773 |
) |
Net gain (loss) on distressed and other residential mortgage loans
at fair value |
11,010 |
|
|
(166 |
) |
Unrealized (loss) gain on investment securities and related hedges,
net |
(14,586 |
) |
|
11,692 |
|
Unrealized gain on multi-family loans and debt held in
securitization trusts, net |
9,410 |
|
|
7,545 |
|
Loss on extinguishment of debt |
(2,857 |
) |
|
— |
|
Income from real estate held for sale in consolidated variable
interest entities |
215 |
|
|
2,126 |
|
Other income |
7,728 |
|
|
3,994 |
|
Total other income |
30,865 |
|
|
20,953 |
|
|
|
|
|
GENERAL, ADMINISTRATIVE AND OPERATING EXPENSES: |
|
|
|
General and administrative expenses |
8,187 |
|
|
4,656 |
|
Base management and incentive fees |
723 |
|
|
833 |
|
Expenses related to distressed and other residential mortgage
loans |
3,252 |
|
|
1,603 |
|
Expenses related to real estate held for sale in consolidated
variable interest entities |
482 |
|
|
1,606 |
|
Total general, administrative and operating expenses |
12,644 |
|
|
8,698 |
|
|
|
|
|
INCOME
FROM OPERATIONS BEFORE INCOME TAXES |
44,424 |
|
|
32,007 |
|
Income
tax expense (benefit) |
74 |
|
|
(79 |
) |
NET
INCOME |
44,350 |
|
|
32,086 |
|
Net
income attributable to non-controlling interest in consolidated
variable interest entities |
(211 |
) |
|
(2,468 |
) |
NET
INCOME ATTRIBUTABLE TO COMPANY |
44,139 |
|
|
29,618 |
|
Preferred stock dividends |
(5,925 |
) |
|
(5,925 |
) |
NET
INCOME ATTRIBUTABLE TO COMPANY'S COMMON STOCKHOLDERS |
$ |
38,214 |
|
|
$ |
23,693 |
|
|
|
|
|
Basic
earnings per common share |
$ |
0.22 |
|
|
$ |
0.21 |
|
Diluted
earnings per common share |
$ |
0.21 |
|
|
$ |
0.20 |
|
Weighted average shares outstanding-basic |
174,421 |
|
|
112,018 |
|
Weighted average shares outstanding-diluted |
194,970 |
|
|
131,761 |
|
|
|
|
|
|
|
NEW YORK MORTGAGE TRUST, INC. AND
SUBSIDIARIESSUMMARY OF QUARTERLY
EARNINGS(Dollar amounts in thousands, except per
share data)(unaudited)
|
For the Three Months Ended |
|
March 31, 2019 |
|
December 31, 2018 |
|
September 30, 2018 |
|
June 30, 2018 |
|
March 31, 2018 |
Net interest income |
$ |
26,203 |
|
|
$ |
21,873 |
|
|
$ |
19,603 |
|
|
$ |
17,500 |
|
|
$ |
19,752 |
|
Total
other income |
30,865 |
|
|
1,217 |
|
|
24,303 |
|
|
20,007 |
|
|
20,953 |
|
Total
general, administrative and operating expenses |
12,644 |
|
|
14,091 |
|
|
9,912 |
|
|
8,769 |
|
|
8,698 |
|
Income
from operations before income taxes |
44,424 |
|
|
8,999 |
|
|
33,994 |
|
|
28,738 |
|
|
32,007 |
|
Income
tax expense (benefit) |
74 |
|
|
(511 |
) |
|
(454 |
) |
|
(13 |
) |
|
(79 |
) |
Net
income |
44,350 |
|
|
9,510 |
|
|
34,448 |
|
|
28,751 |
|
|
32,086 |
|
Net
(income) loss attributable to non-controlling interest in
consolidated variable interest entities |
(211 |
) |
|
91 |
|
|
(475 |
) |
|
943 |
|
|
(2,468 |
) |
Net
income attributable to Company |
44,139 |
|
|
9,601 |
|
|
33,973 |
|
|
29,694 |
|
|
29,618 |
|
Preferred stock dividends |
(5,925 |
) |
|
(5,925 |
) |
|
(5,925 |
) |
|
(5,925 |
) |
|
(5,925 |
) |
Net
income attributable to Company's common stockholders |
38,214 |
|
|
3,676 |
|
|
28,048 |
|
|
23,769 |
|
|
23,693 |
|
Basic
earnings per common share |
$ |
0.22 |
|
|
$ |
0.02 |
|
|
$ |
0.21 |
|
|
$ |
0.21 |
|
|
$ |
0.21 |
|
Diluted
earnings per common share |
$ |
0.21 |
|
|
$ |
0.02 |
|
|
$ |
0.20 |
|
|
$ |
0.20 |
|
|
$ |
0.20 |
|
Weighted average shares outstanding - basic |
174,421 |
|
|
148,871 |
|
|
132,413 |
|
|
115,211 |
|
|
112,018 |
|
Weighted average shares outstanding - diluted |
194,970 |
|
|
149,590 |
|
|
152,727 |
|
|
135,164 |
|
|
131,761 |
|
|
|
|
|
|
|
|
|
|
|
Book
value per common share |
$ |
5.75 |
|
|
$ |
5.65 |
|
|
$ |
5.72 |
|
|
$ |
5.76 |
|
|
$ |
5.79 |
|
Dividends declared per common share |
$ |
0.20 |
|
|
$ |
0.20 |
|
|
$ |
0.20 |
|
|
$ |
0.20 |
|
|
$ |
0.20 |
|
Dividends declared per preferred share on Series B Preferred
Stock |
$ |
0.48 |
|
|
$ |
0.48 |
|
|
$ |
0.48 |
|
|
$ |
0.48 |
|
|
$ |
0.48 |
|
Dividends declared per preferred share on Series C Preferred
Stock |
$ |
0.49 |
|
|
$ |
0.49 |
|
|
$ |
0.49 |
|
|
$ |
0.49 |
|
|
$ |
0.49 |
|
Dividends declared per preferred share on Series D Preferred
Stock |
$ |
0.50 |
|
|
$ |
0.50 |
|
|
$ |
0.50 |
|
|
$ |
0.50 |
|
|
$ |
0.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Allocation Summary
The following tables set forth our allocated
capital by investment category 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 |
|
Residential Credit |
|
Multi-Family
Credit |
|
Other |
|
Total |
At March 31, 2019 |
|
|
|
|
|
|
|
|
|
Carrying
value |
$ |
1,023,938 |
|
|
$ |
1,467,571 |
|
|
$ |
1,299,404 |
|
|
$ |
— |
|
|
$ |
3,790,913 |
|
Net capital allocated |
$ |
157,663 |
|
|
$ |
723,960 |
|
|
$ |
686,904 |
|
|
$ |
(189,075 |
) |
|
$ |
1,379,452 |
|
Three Months Ended March 31, 2019 |
|
|
|
|
|
|
|
|
|
Average
interest earning assets |
$ |
1,053,529 |
|
|
$ |
1,312,263 |
|
|
$ |
927,201 |
|
|
— |
|
|
$ |
3,292,993 |
|
Weighted average yield on interest earning assets |
2.87 |
% |
|
5.91 |
% |
|
10.45 |
% |
|
— |
|
|
6.22 |
% |
Less: Average cost of funds |
(2.76 |
)% |
|
(4.71 |
)% |
|
(4.37 |
)% |
|
— |
|
|
(3.82 |
)% |
Portfolio net interest margin |
0.11 |
% |
|
1.20 |
% |
|
6.08 |
% |
|
— |
|
|
2.40 |
% |
|
|
|
|
|
|
|
|
|
|
At December 31, 2018 |
|
|
|
|
|
|
|
|
|
Carrying value |
$ |
1,037,730 |
|
|
$ |
1,252,770 |
|
|
$ |
1,166,628 |
|
|
$ |
— |
|
|
$ |
3,457,128 |
|
Net capital allocated |
$ |
135,514 |
|
|
$ |
555,900 |
|
|
$ |
619,252 |
|
|
$ |
(130,373 |
) |
|
$ |
1,180,293 |
|
Three Months Ended December 31, 2018 |
|
|
|
|
|
|
|
|
|
Average interest earning assets |
$ |
1,087,267 |
|
|
$ |
848,777 |
|
|
$ |
786,394 |
|
|
— |
|
|
$ |
2,722,438 |
|
Weighted average yield on interest earning assets |
2.74 |
% |
|
5.36 |
% |
|
10.85 |
% |
|
— |
|
|
5.90 |
% |
Less: Average cost of funds |
(2.46 |
)% |
|
(5.01 |
)% |
|
(5.00 |
)% |
|
— |
|
|
(3.60 |
)% |
Portfolio net interest margin |
0.28 |
% |
|
0.35 |
% |
|
5.85 |
% |
|
— |
|
|
2.30 |
% |
|
|
|
|
|
|
|
|
|
|
At September 30, 2018 |
|
|
|
|
|
|
|
|
|
Carrying value |
$ |
1,055,433 |
|
|
$ |
619,945 |
|
|
$ |
947,851 |
|
|
$ |
— |
|
|
$ |
2,623,229 |
|
Net capital allocated |
$ |
224,545 |
|
|
$ |
402,819 |
|
|
$ |
632,823 |
|
|
$ |
(151,498 |
) |
|
$ |
1,108,689 |
|
Three Months Ended September 30, 2018 |
|
|
|
|
|
|
|
|
|
Average interest earning assets |
$ |
1,121,180 |
|
|
$ |
597,200 |
|
|
$ |
681,040 |
|
|
— |
|
|
$ |
2,399,420 |
|
Weighted average yield on interest earning assets |
2.67 |
% |
|
5.33 |
% |
|
11.55 |
% |
|
— |
|
|
5.85 |
% |
Less: Average cost of funds |
(2.22 |
)% |
|
(4.68 |
)% |
|
(5.04 |
)% |
|
— |
|
|
(3.30 |
)% |
Portfolio net interest margin |
0.45 |
% |
|
0.65 |
% |
|
6.51 |
% |
|
— |
|
|
2.55 |
% |
|
|
|
|
|
|
|
|
|
|
At June 30, 2018 |
|
|
|
|
|
|
|
|
|
Carrying value |
$ |
1,101,344 |
|
|
$ |
599,758 |
|
|
$ |
875,563 |
|
|
$ |
— |
|
|
$ |
2,576,665 |
|
Net capital allocated |
$ |
250,497 |
|
|
$ |
333,853 |
|
|
$ |
557,422 |
|
|
$ |
(125,571 |
) |
|
$ |
1,016,201 |
|
Three Months Ended June 30, 2018 |
|
|
|
|
|
|
|
|
|
Average interest earning assets |
$ |
1,167,278 |
|
|
$ |
596,382 |
|
|
$ |
639,637 |
|
|
— |
|
|
$ |
2,403,297 |
|
Weighted average yield on interest earning assets |
2.69 |
% |
|
4.63 |
% |
|
11.43 |
% |
|
— |
|
|
5.50 |
% |
Less: Average cost of funds |
(2.02 |
)% |
|
(4.58 |
)% |
|
(4.69 |
)% |
|
— |
|
|
(3.11 |
)% |
Portfolio net interest margin |
0.67 |
% |
|
0.05 |
% |
|
6.74 |
% |
|
— |
|
|
2.39 |
% |
|
|
|
|
|
|
|
|
|
|
At March 31, 2018 |
|
|
|
|
|
|
|
|
|
Carrying value |
$ |
1,161,445 |
|
|
$ |
611,766 |
|
|
$ |
836,353 |
|
|
$ |
— |
|
|
$ |
2,609,564 |
|
Net capital allocated |
$ |
251,405 |
|
|
$ |
337,769 |
|
|
$ |
500,813 |
|
|
$ |
(139,200 |
) |
|
$ |
950,787 |
|
Three Months Ended March 31, 2018 |
|
|
|
|
|
|
|
|
|
Average interest earning assets |
$ |
1,208,900 |
|
|
$ |
604,033 |
|
|
$ |
612,357 |
|
|
— |
|
|
$ |
2,425,290 |
|
Weighted average yield on interest earning assets |
2.64 |
% |
|
5.93 |
% |
|
11.43 |
% |
|
— |
|
|
5.68 |
% |
Less: Average cost of funds |
(1.82 |
)% |
|
(4.06 |
)% |
|
(4.51 |
)% |
|
— |
|
|
(2.82 |
)% |
Portfolio net interest margin |
0.82 |
% |
|
1.87 |
% |
|
6.92 |
% |
|
— |
|
|
2.86 |
% |
|
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