New York Mortgage Trust, Inc. (Nasdaq: NYMT) (“NYMT,” the
“Company,” “we,” “our” or “us”) today reported results for the
three and twelve months ended December 31, 2018.
Summary of Fourth Quarter 2018:
- Earned net income attributable to common stockholders of $3.7
million, or $0.02 per share (basic), and comprehensive income to
common stockholders of $16.9 million, or $0.11 per share.
- Earned net interest income of $21.9 million and portfolio net
interest margin of 230 basis points.
- Recognized book value per common share of $5.65 at
December 31, 2018, a decrease of 1% from September 30, 2018,
resulting in an economic return of 2.3% for the quarter ended
December 31, 2018.
- Declared fourth quarter dividend of $0.20 per common share that
was paid on January 25, 2019.
- Issued 14,375,000 shares of common stock through an
underwritten public offering resulting in total net proceeds of
approximately $85.3 million after deducting underwriting discounts,
commissions and offering expenses.
- Acquired credit assets totaling $944.2 million, including
distressed residential mortgage loans totaling $482.6 million,
other residential mortgage loans totaling $87.5 million, non-Agency
RMBS totaling $119.5 million, multi-family CMBS totaling $208.5
million and preferred equity investments in owners of multi-family
properties totaling $46.2 million.
- Closed on a master repurchase agreement with a maximum
aggregate principal amount of $750.0 million to fund the purchase
of residential mortgage loans.
Highlights for Full Year 2018:
- Earned net income attributable to common stockholders in 2018
of $79.2 million, or $0.62 per share (basic), and comprehensive
income to common stockholders of $51.5 million, or $0.40 per
share.
- Earned net interest income of $78.7 million and portfolio net
interest margin of 253 basis points.
- Delivered economic return of 7.50% for the year ended December
31, 2018.
- Declared aggregate 2018 dividends of $0.80 per common
share.
- Completed the issuance of an aggregate of 28,750,000 shares
through two underwritten public offerings in August 2018 and
November 2018 at an average public offering price of $6.14 per
share resulting in aggregate net proceeds to the Company of $171.3
million, after deducting underwriting discounts, commissions, and
offering expenses.
- Issued and sold 14,588,631 shares of common stock under our
at-the-market equity offering program at an average sales price of
$6.19 per share, resulting in net proceeds to the Company of $89.0
million, after deducting placement fees.
- Acquired credit assets totaling $1.2 billion, including
distressed residential mortgage loans totaling $560.7 million,
other residential mortgage loans totaling $128.0 million,
non-Agency RMBS totaling $196.2 million, multi-family CMBS totaling
$249.4 million and preferred equity investments in owners of
multi-family properties totaling $113.0 million.
- Added 18 professionals in connection with our growth.
Subsequent Development:
On January 11, 2019, the Company issued
14,490,000 shares of its common stock through an underwritten
public offering at a public offering price of $5.96 per share,
resulting in total net proceeds to the Company of $83.8 million
after deducting underwriting discounts, commissions and offering
expenses.
Management Overview
Steven Mumma, NYMT's Chairman and Chief
Executive Officer, commented: “The Company had GAAP earnings per
share of $0.02 and comprehensive earnings per share of $0.11 for
the fourth quarter and, importantly, held book value per common
share steady at $5.65, down just 1% from the prior quarter. For the
year, the Company generated GAAP earnings per share of $0.62 and
$78.7 million in net interest margin, an increase of 36% from the
prior year. The Company’s ability to maintain a stable book value
in the face of difficult market conditions for much of the year,
particularly in the latter half of the fourth quarter, helped the
Company deliver an economic return of 2.3% for the quarter and 7.5%
for the year - solid results despite the challenging operating
environment. Fourth quarter results were largely impacted by year
end spread widening, much of which has reversed in January. The
Company opportunistically accessed the capital markets during the
fourth quarter, completing an accretive raise of approximately $85
million of common equity, bringing total capital raised during the
year to approximately $260.3 million, all of which was accretive to
book value.
2018 was a transformational year for the
Company. We moved to internalize our last externally-managed
business, residential distressed credit, adding a team of
professionals that not only covers distressed residential assets
but increases our capabilities across many other residential credit
opportunities. In January 2019, the Company hired Jason
Serrano as our President. Jason has extensive experience in all
aspects of residential investing and his leadership, ability and
vision are welcome additions to our firm. For the year
the Company expanded its investment portfolio by 33% and its
capital base by 21%, originating or acquiring over $1.3 billion in
predominately credit assets, including $360 million in multifamily
credit and $885 million in residential credit, a new single-year
record for the Company.
We are excited about the year ahead, having
added approximately $900 million of new investments in the fourth
quarter, most of which were funded in December and will start to
contribute to earnings in a meaningful way in the first
quarter. We raised approximately $84 million of common equity
in the first quarter of 2019, bringing the Company’s common equity
market capitalization to over $1 billion. We believe the Company is
well-positioned to capitalize on its recent success and expand its
credit focused investment portfolio, which we believe will continue
to deliver long-term stable dividends while preserving book value
for our shareholders."
Capital Allocation
The following tables set forth our allocated
capital by investment type at December 31, 2018, 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 average interest earning assets (by investment type)
for the three months ended December 31, 2018 (dollar amounts
in thousands):
Capital Allocation at December 31, 2018: |
|
Agency RMBS(1) |
|
Multi-Family Credit (2) |
|
Residential Credit (3) |
|
Other (4) |
|
Total |
Carrying Value |
$ |
1,037,730 |
|
|
$ |
1,166,628 |
|
|
$ |
1,241,817 |
|
|
$ |
10,953 |
|
|
$ |
3,457,128 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
Callable
(5) |
(925,230 |
) |
|
(529,617 |
) |
|
(676,658 |
) |
|
— |
|
|
(2,131,505 |
) |
Non-Callable |
— |
|
|
(30,121 |
) |
|
(65,253 |
) |
|
(45,000 |
) |
|
(140,374 |
) |
Convertible |
— |
|
|
— |
|
|
— |
|
|
(130,762 |
) |
|
(130,762 |
) |
Hedges (Net) (6) |
10,263 |
|
|
— |
|
|
— |
|
|
— |
|
|
10,263 |
|
Cash and Restricted
Cash(7) |
10,377 |
|
|
17,291 |
|
|
20,859 |
|
|
60,618 |
|
|
109,145 |
|
Goodwill |
— |
|
|
— |
|
|
— |
|
|
25,222 |
|
|
25,222 |
|
Other |
2,374 |
|
|
(4,929 |
) |
|
24,182 |
|
|
(40,451 |
) |
|
(18,824 |
) |
Net Capital
Allocated |
$ |
135,514 |
|
|
$ |
619,252 |
|
|
$ |
544,947 |
|
|
$ |
(119,420 |
) |
|
$ |
1,180,293 |
|
% of Capital
Allocated |
11.5 |
% |
|
52.5 |
% |
|
46.2 |
% |
|
(10.2 |
)% |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
Net Interest Income- Three Months Ended December 31,
2018: |
Interest Income |
$ |
7,436 |
|
|
$ |
21,329 |
|
|
$ |
11,379 |
|
|
$ |
— |
|
|
$ |
40,144 |
|
Interest Expense |
(5,594 |
) |
|
(5,135 |
) |
|
(4,148 |
) |
|
(3,394 |
) |
|
(18,271 |
) |
Net Interest Income
(Expense) |
$ |
1,842 |
|
|
$ |
16,194 |
|
|
$ |
7,231 |
|
|
$ |
(3,394 |
) |
|
$ |
21,873 |
|
|
|
|
|
|
|
|
|
|
|
Portfolio Net Interest Margin - Three Months Ended
December 31, 2018 |
Average Interest
Earning Assets (8) |
$ |
1,087,267 |
|
|
$ |
786,394 |
|
|
$ |
848,777 |
|
|
$ |
— |
|
|
$ |
2,722,438 |
|
Weighted Average Yield
on Interest Earning Assets (9) |
2.74 |
% |
|
10.85 |
% |
|
5.36 |
% |
|
— |
|
|
5.90 |
% |
Less: Average Cost of
Funds (10) |
(2.46 |
)% |
|
(5.00 |
)% |
|
(5.01 |
)% |
|
— |
|
|
(3.60 |
)% |
Portfolio Net Interest
Margin (11) |
0.28 |
% |
|
5.85 |
% |
|
0.35 |
% |
|
— |
|
|
2.30 |
% |
(1) Includes Agency fixed-rate RMBS and Agency
ARMs.(2) 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. 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.”(3) Includes
$737.5 million of distressed and other residential mortgage loans
at fair value, $228.5 million of distressed residential mortgage
loans at carrying value, $214.0 million of non-Agency RMBS, $56.8
million of residential mortgage loans held in securitization trusts
and $1.9 million of mortgage loans held for sale and mortgage loans
held for investment. Mortgage loans held for sale and mortgage
loans held for investment are included in the Company’s
accompanying consolidated balance sheets in receivables and other
assets.(4) Other includes $11.0 million of investments in
unconsolidated entities. Other non-callable liabilities consist
of $45.0 million in subordinated
debentures.(5) Includes repurchase
agreements.(6) Includes derivative assets and variation
margin.(7) Restricted cash is included in the Company’s
accompanying 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 and Agency ARM
portfolios, by quarter, for the quarterly periods indicated.
Quarter Ended |
|
Weighted Average |
|
Agency Fixed-Rate RMBS |
|
Agency ARMs |
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 |
% |
December 31, 2017 |
|
7.0 |
% |
|
6.3 |
% |
|
12.9 |
% |
September 30, 2017 |
|
11.9 |
% |
|
12.8 |
% |
|
9.4 |
% |
June 30, 2017 |
|
11.4 |
% |
|
9.6 |
% |
|
16.5 |
% |
March 31, 2017 |
|
10.0 |
% |
|
10.6 |
% |
|
8.3 |
% |
|
|
|
|
|
|
|
|
|
|
Fourth Quarter Earnings Summary
For the quarter ended December 31, 2018, we
reported net income attributable to common stockholders of $3.7
million as compared to $28.0 million in the quarter ended September
30, 2018.
We generated net interest income of $21.9
million and a portfolio net interest margin of 230 basis points for
the quarter ended December 31, 2018 as compared to net
interest income of $19.6 million and a portfolio net interest
margin of 255 basis points for the quarter ended September 30,
2018. The increase in net interest income in the fourth
quarter was primarily due to the increase in average interest
earning assets related to our residential credit portfolio.
The main components of other income for the
quarters ended December 31, 2018 and September 30, 2018,
respectively, are detailed in the following table (dollar amounts
in thousands):
|
|
Three Months Ended |
Other Income (Loss) |
|
December 31, 2018 |
|
September 30, 2018 |
(Provision for) recovery
of loan losses |
|
$ |
(2,492 |
) |
|
$ |
840 |
|
Realized gain on
investment securities and related hedges, net |
|
20 |
|
|
299 |
|
Realized (loss) gain on
distressed residential mortgage loans at carrying value, net |
|
(3,677 |
) |
|
1,806 |
|
Net gain on distressed
and other residential mortgage loans at fair value |
|
8,128 |
|
|
643 |
|
Unrealized (loss) gain
on investment securities and related hedges, net |
|
(15,469 |
) |
|
2,275 |
|
Unrealized gain on
multi-family loans and debt held in securitization trusts, net |
|
5,714 |
|
|
12,303 |
|
Income from operating
real estate and real estate held for sale in consolidated variable
interest entities |
|
1,404 |
|
|
1,380 |
|
Other income |
|
7,589 |
|
|
4,757 |
|
Total
other income |
|
$ |
1,217 |
|
|
$ |
24,303 |
|
For the quarter ended December 31, 2018, we
recognized other income of $1.2 million primarily comprised of the
following:
- Unrealized gain of $5.7 million on our Consolidated K-Series
investments.
- Net gain of $8.1 million from our distressed and other
residential mortgage loans held at fair value, primarily from $5.0
million unrealized gains and $3.1 million realized gains during the
period.
- Other income of $7.6 million primarily related to $6.2 million
in realized gains recognized from redemptions of multi-family
preferred equity investments and $1.8 million in income from other
equity investments.
- Unrealized loss of $15.5 million from our interest rate swaps
accounted for as trading instruments.
The following table details the general and
administrative expenses for the quarters ended December 31, 2018
and September 30, 2018, respectively (dollar amounts in
thousands):
|
|
Three Months Ended |
General and Administrative Expenses |
|
December 31, 2018 |
|
September 30, 2018 |
Salaries, benefits and
directors’ compensation |
|
$ |
4,295 |
|
|
$ |
4,219 |
|
Base management and
incentive fees |
|
2,880 |
|
|
844 |
|
Other general and
administrative expenses |
|
2,445 |
|
|
1,977 |
|
Total
general and administrative expenses |
|
$ |
9,620 |
|
|
$ |
7,040 |
|
|
|
|
|
|
|
|
|
|
The change in general and administrative
expenses is primarily related to an increase in management fees
during the period. The increase in management fees is due to the
Company expensing during the fourth quarter $2.1 million of prepaid
incentive fees paid to Headlands Asset Management LLC ("Headlands")
in 2017 as a result of non-renewal of our management agreement with
Headlands.
The following table sets out the operating
expenses related to our distressed and other residential mortgage
loans and the operating real estate and real estate held for sale
in consolidated variable interest entities for the quarters ended
December 31, 2018 and September 30, 2018, respectively (dollar
amounts in thousands):
|
|
Three Months Ended |
Operating Expenses |
|
December 31, 2018 |
|
September 30, 2018 |
Expenses related to
distressed and other residential mortgage loans |
|
$ |
3,377 |
|
|
$ |
2,117 |
|
Expenses related to
operating real estate and real estate held for sale in consolidated
variable interest entities |
|
1,094 |
|
|
755 |
|
Total
operating expenses |
|
$ |
4,471 |
|
|
$ |
2,872 |
|
|
|
|
|
|
|
|
|
|
The increase in operating expenses in the fourth
quarter is primarily attributed to growth in our residential credit
portfolio and includes due diligence expenses for the $688.7
million of loan purchases during the quarter.
The results of operations applicable to the
operating real estate and real estate held for sale in consolidated
variable interest entities included in the Company's consolidated
statements of operations for the three months ended December 31,
2018 are as follows (dollar amounts in thousands):
|
Three Months Ended December 31,
2018 |
Income from operating
real estate and real estate held for sale in consolidated variable
interest entities |
$ |
1,404 |
|
Expenses related to
operating real estate and real estate held for sale in consolidated
variable interest entities |
(1,094 |
) |
Net
income from operating real estate and real estate held for sale in
consolidated variable interest entities |
310 |
|
Net income from
operating real estate and real estate held for sale in consolidated
variable interest entities attributable to non-controlling
interest |
(203 |
) |
Net
income from operating real estate and real estate held for sale in
consolidated variable interest entities attributable to Company's
common stockholders |
$ |
107 |
|
|
|
|
|
Analysis of Changes in Book Value
The following table analyzes the changes in book
value of our common stock for the quarter ended December 31,
2018 (amounts in thousands, except per share):
|
Quarter Ended December 31, 2018 |
|
Amount |
|
Shares |
|
Per Share(1) |
Beginning
Balance |
$ |
807,693 |
|
|
141,215 |
|
|
$ |
5.72 |
|
Common stock issuance,
net(2) |
85,949 |
|
|
14,375 |
|
|
|
Balance after share
issuance activity |
893,642 |
|
|
155,590 |
|
|
5.75 |
|
Dividends declared |
(31,118 |
) |
|
|
|
(0.20 |
) |
Net change in accumulated
other comprehensive income: |
|
|
|
|
|
Investment securities(3) |
13,189 |
|
|
|
|
0.08 |
|
Net income attributable to
Company's common stockholders |
3,676 |
|
|
|
|
0.02 |
|
Ending
Balance |
$ |
879,389 |
|
|
155,590 |
|
|
$ |
5.65 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Outstanding shares used to calculate book value per
share for the ending balance is based on outstanding shares as of
December 31, 2018 of 155,589,528.(2) Includes
amortization and stock based compensation.(3) The $13.2
million increase related to investment securities is primarily due
to an increase in value of the Agency RMBS portfolio for the three
months ended December 31, 2018.
Conference Call
On Friday, February 22, 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 and twelve months
ended December 31, 2018. The conference call dial-in number is
(877) 312-8806. The replay will be available until Friday, March 1,
2019 and can be accessed by dialing (855) 859-2056 and entering
passcode 2159886. 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.
Full year 2018 financial and operating data can
be viewed in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2018, which is expected to be filed with
the Securities and Exchange Commission on or about March 1, 2019. A
copy of the Form 10-K 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 federally chartered
corporation; “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 seasoned 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 residential mortgage loans
at carrying value, non-Agency RMBS, residential mortgage loans held
in securitization trusts, mortgage loans held for sale and mortgage
loans held for investment.
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 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 consolidated statements of operations.
A reconciliation of our net capital allocated to
multi-family investments to our consolidated financial statements
as of December 31, 2018 is set forth below (dollar amounts in
thousands):
Multi-family loans held
in securitization trusts, at fair value |
$ |
11,679,847 |
|
Multi-family CDOs, at
fair value |
(11,022,248 |
) |
Net carrying value |
657,599 |
|
Investment securities
available for sale, at fair value |
260,485 |
|
Total CMBS, at fair
value |
918,084 |
|
Preferred equity
investments, mezzanine loans and investments in unconsolidated
entities |
228,067 |
|
Real estate under
development (1) |
22,000 |
|
Real estate held for
sale in consolidated variable interest entities |
29,704 |
|
Mortgages and notes
payable in consolidated variable interest entities |
(31,227 |
) |
Financing arrangements,
portfolio investments |
(529,617 |
) |
Securitized debt |
(30,121 |
) |
Cash and other |
12,362 |
|
Net Capital in
Multi-Family |
$ |
619,252 |
|
|
|
|
|
(1) Included in the Company’s accompanying consolidated
balance sheets in receivables and other assets.
A reconciliation of our net interest income in
multi-family investments to our consolidated financial statements
for the three months ended December 31, 2018 is set forth
below (dollar amounts in thousands):
|
Three Months Ended December 31,
2018 |
Interest income,
multi-family loans held in securitization trusts |
$ |
101,533 |
|
Interest income,
investment securities, available for sale (1) |
2,735 |
|
Interest income,
preferred equity investments and mezzanine loans (1) |
5,854 |
|
Interest expense,
multi-family collateralized debt obligations |
(88,792 |
) |
Interest income,
Multi-Family, net |
21,330 |
|
Interest expense,
investment securities, available for sale |
(4,400 |
) |
Interest expense,
securitized debt |
(736 |
) |
Net interest income,
Multi-Family |
$ |
16,194 |
|
|
|
|
|
(1) Included in the Company’s accompanying
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
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 the prepayment rates on the loans
owned by the Company or underlying its 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 COMPANY
Kristine R. Nario-EngChief Financial OfficerPhone: (646)
216-2363Email: KNario@nymtrust.com
FINANCIAL TABLES FOLLOW
|
NEW YORK MORTGAGE TRUST, INC. AND
SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(Dollar amounts in thousands, except share
data) |
|
|
December 31, 2018 |
|
December 31, 2017 |
|
(unaudited) |
|
|
ASSETS |
|
|
|
Investment securities,
available for sale, at fair value (including
pledged securities of $1,464,977 and $1,076,187, as of
December 31, 2018 and December 31, 2017, respectively, and $52,700
and $47,922 held in securitization trusts as of
December 31, 2018 and December 31, 2017, respectively) |
$ |
1,512,252 |
|
|
$ |
1,413,081 |
|
Residential mortgage
loans held in securitization trusts, net |
56,795 |
|
|
73,820 |
|
Distressed and other
residential mortgage loans, at fair value |
737,523 |
|
|
87,153 |
|
Distressed residential
mortgage loans, net (including $88,096 and $121,791 held in
securitization trusts as of December 31, 2018 and December 31,
2017, respectively) |
228,466 |
|
|
331,464 |
|
Multi-family loans held
in securitization trusts, at fair value |
11,679,847 |
|
|
9,657,421 |
|
Derivative assets |
10,263 |
|
|
10,101 |
|
Cash and cash
equivalents |
103,724 |
|
|
95,191 |
|
Investment in
unconsolidated entities |
73,466 |
|
|
51,143 |
|
Preferred equity and
mezzanine loan investments |
165,555 |
|
|
138,920 |
|
Real estate held for
sale in consolidated variable interest entities |
29,704 |
|
|
64,202 |
|
Goodwill |
25,222 |
|
|
25,222 |
|
Receivables and other
assets |
114,821 |
|
|
108,567 |
|
Total Assets
(1) |
$ |
14,737,638 |
|
|
$ |
12,056,285 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
Liabilities: |
|
|
|
Financing arrangements,
portfolio investments |
$ |
1,543,577 |
|
|
$ |
1,276,918 |
|
Financing arrangements,
distressed and other residential mortgage loans |
587,928 |
|
|
149,063 |
|
Residential
collateralized debt obligations |
53,040 |
|
|
70,308 |
|
Multi-family
collateralized debt obligations, at fair value |
11,022,248 |
|
|
9,189,459 |
|
Securitized debt |
42,335 |
|
|
81,537 |
|
Mortgages and notes
payable in consolidated variable interest entities |
31,227 |
|
|
57,124 |
|
Accrued expenses and
other liabilities |
101,228 |
|
|
82,126 |
|
Subordinated
debentures |
45,000 |
|
|
45,000 |
|
Convertible notes |
130,762 |
|
|
128,749 |
|
Total
liabilities (1) |
13,557,345 |
|
|
11,080,284 |
|
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 |
|
Preferred stock, $0.01
par value, 8.00% Series D Fixed-to-Floating Rate cumulative
redeemable, $25 liquidation preference per share, 5,750,000 shares
authorized and 5,400,000 issued and outstanding |
130,496 |
|
|
130,496 |
|
Common stock, $0.01 par
value, 400,000,000 shares authorized, 155,589,528 and 111,909,909
shares issued and outstanding as of December 31, 2018 and December
31, 2017, respectively |
1,556 |
|
|
1,119 |
|
Additional paid-in
capital |
1,013,391 |
|
|
751,155 |
|
Accumulated other
comprehensive (loss) income |
(22,135 |
) |
|
5,553 |
|
Accumulated
deficit |
(103,178 |
) |
|
(75,717 |
) |
Company's stockholders'
equity |
1,179,389 |
|
|
971,865 |
|
Non-controlling
interest in consolidated variable interest entities |
904 |
|
|
4,136 |
|
Total
equity |
1,180,293 |
|
|
976,001 |
|
Total
Liabilities and Stockholders' Equity |
$ |
14,737,638 |
|
|
$ |
12,056,285 |
|
(1) Our 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 December 31, 2018 and December 31, 2017, assets of
consolidated VIEs totaled $11,984,374 and $10,041,468,
respectively, and the liabilities of consolidated VIEs totaled
$11,191,736 and $9,436,421, respectively.
|
NEW YORK MORTGAGE TRUST, INC. AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF
OPERATIONS |
(Dollar amounts in thousands, except per share
data) |
(unaudited) |
|
|
For the Three Months Ended December
31, |
|
For the Years Ended December 31, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
INTEREST INCOME: |
|
|
|
|
|
|
|
Investment securities
and other |
$ |
18,249 |
|
|
$ |
14,194 |
|
|
$ |
68,518 |
|
|
$ |
43,909 |
|
Multi-family loans held in securitization trusts |
101,533 |
|
|
83,881 |
|
|
358,712 |
|
|
297,124 |
|
Distressed and other residential mortgage loans |
9,154 |
|
|
4,264 |
|
|
28,569 |
|
|
25,054 |
|
Total
interest income |
128,936 |
|
|
102,339 |
|
|
455,799 |
|
|
366,087 |
|
|
|
|
|
|
|
|
|
INTEREST EXPENSE: |
|
|
|
|
|
|
|
Investment securities and other |
13,376 |
|
|
8,212 |
|
|
44,050 |
|
|
25,344 |
|
Convertible notes |
2,673 |
|
|
2,633 |
|
|
10,643 |
|
|
9,852 |
|
Multi-family collateralized debt obligations |
88,792 |
|
|
73,830 |
|
|
313,102 |
|
|
261,665 |
|
Residential collateralized debt obligations |
431 |
|
|
485 |
|
|
1,779 |
|
|
1,463 |
|
Securitized debt |
1,070 |
|
|
1,543 |
|
|
4,754 |
|
|
7,481 |
|
Subordinated debentures |
721 |
|
|
596 |
|
|
2,743 |
|
|
2,296 |
|
Total
interest expense |
107,063 |
|
|
87,299 |
|
|
377,071 |
|
|
308,101 |
|
|
|
|
|
|
|
|
|
NET INTEREST
INCOME |
21,873 |
|
|
15,040 |
|
|
78,728 |
|
|
57,986 |
|
|
|
|
|
|
|
|
|
OTHER INCOME
(LOSS): |
|
|
|
|
|
|
|
(Provision for) recovery of loan losses |
(2,492 |
) |
|
1,288 |
|
|
(1,257 |
) |
|
1,739 |
|
Realized
gain (loss) on investment securities and related hedges, net |
20 |
|
|
(62 |
) |
|
(11,758 |
) |
|
3,888 |
|
Realized
(loss) gain on distressed residential mortgage loans at carrying
value, net |
(3,677 |
) |
|
5,025 |
|
|
(623 |
) |
|
26,049 |
|
Net gain
on distressed and other residential mortgage loans at fair
value |
8,128 |
|
|
961 |
|
|
8,702 |
|
|
1,678 |
|
Unrealized (loss) gain on investment securities and related hedges,
net |
(15,469 |
) |
|
268 |
|
|
11,104 |
|
|
1,955 |
|
Unrealized gain on multi-family loans and debt held in
securitization trusts, net |
5,714 |
|
|
13,688 |
|
|
37,581 |
|
|
18,872 |
|
Income
from operating real estate and real estate held for sale in
consolidated variable interest entities |
1,404 |
|
|
2,535 |
|
|
6,163 |
|
|
7,280 |
|
Other
income |
7,589 |
|
|
1,515 |
|
|
16,568 |
|
|
13,552 |
|
Total
other income |
1,217 |
|
|
25,218 |
|
|
66,480 |
|
|
75,013 |
|
|
|
|
|
|
|
|
|
GENERAL, ADMINISTRATIVE
AND OPERATING EXPENSES: |
|
|
|
|
|
|
|
General
and administrative expenses |
6,740 |
|
|
4,162 |
|
|
22,868 |
|
|
18,357 |
|
Base
management and incentive fees |
2,880 |
|
|
163 |
|
|
5,366 |
|
|
4,517 |
|
Expenses
related to distressed and other residential mortgage loans |
3,377 |
|
|
2,064 |
|
|
8,908 |
|
|
8,746 |
|
Expenses
related to operating real estate and real estate held for sale in
consolidated variable interest entities |
1,094 |
|
|
1,899 |
|
|
4,328 |
|
|
9,457 |
|
Total
general, administrative and operating expenses |
14,091 |
|
|
8,288 |
|
|
41,470 |
|
|
41,077 |
|
|
|
|
|
|
|
|
|
INCOME FROM OPERATIONS
BEFORE INCOME TAXES |
8,999 |
|
|
31,970 |
|
|
103,738 |
|
|
91,922 |
|
Income tax (benefit)
expense |
(511 |
) |
|
1,169 |
|
|
(1,057 |
) |
|
3,355 |
|
NET INCOME |
9,510 |
|
|
30,801 |
|
|
104,795 |
|
|
88,567 |
|
Net loss (income)
attributable to non-controlling interest in consolidated variable
interest entities |
91 |
|
|
(184 |
) |
|
(1,909 |
) |
|
3,413 |
|
NET INCOME ATTRIBUTABLE
TO COMPANY |
9,601 |
|
|
30,617 |
|
|
102,886 |
|
|
91,980 |
|
Preferred stock
dividends |
(5,925 |
) |
|
(5,985 |
) |
|
(23,700 |
) |
|
(15,660 |
) |
NET INCOME ATTRIBUTABLE
TO COMPANY'S COMMON STOCKHOLDERS |
$ |
3,676 |
|
|
$ |
24,632 |
|
|
$ |
79,186 |
|
|
$ |
76,320 |
|
|
|
|
|
|
|
|
|
Basic earnings per
common share |
$ |
0.02 |
|
|
$ |
0.22 |
|
|
$ |
0.62 |
|
|
$ |
0.68 |
|
Diluted earnings per
common share |
$ |
0.02 |
|
|
$ |
0.21 |
|
|
$ |
0.61 |
|
|
$ |
0.66 |
|
Weighted average shares
outstanding-basic |
148,871 |
|
|
111,871 |
|
|
127,243 |
|
|
111,836 |
|
Weighted average shares
outstanding-diluted |
149,590 |
|
|
131,565 |
|
|
147,450 |
|
|
130,343 |
|
|
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 |
|
December 31, 2018 |
|
September 30, 2018 |
|
June 30, 2018 |
|
March 31, 2018 |
|
December 31, 2017 |
Net interest income |
$ |
21,873 |
|
|
$ |
19,603 |
|
|
$ |
17,500 |
|
|
$ |
19,752 |
|
|
$ |
15,040 |
|
Total other income |
1,217 |
|
|
24,303 |
|
|
20,007 |
|
|
20,953 |
|
|
25,218 |
|
Total general,
administrative and operating expenses |
14,091 |
|
|
9,912 |
|
|
8,769 |
|
|
8,698 |
|
|
8,288 |
|
Income from operations
before income taxes |
8,999 |
|
|
33,994 |
|
|
28,738 |
|
|
32,007 |
|
|
31,970 |
|
Income tax (benefit)
expense |
(511 |
) |
|
(454 |
) |
|
(13 |
) |
|
(79 |
) |
|
1,169 |
|
Net income |
9,510 |
|
|
34,448 |
|
|
28,751 |
|
|
32,086 |
|
|
30,801 |
|
Net loss (income)
attributable to non-controlling interest in consolidated variable
interest entities |
91 |
|
|
(475 |
) |
|
943 |
|
|
(2,468 |
) |
|
(184 |
) |
Net income attributable
to Company |
9,601 |
|
|
33,973 |
|
|
29,694 |
|
|
29,618 |
|
|
30,617 |
|
Preferred stock
dividends |
(5,925 |
) |
|
(5,925 |
) |
|
(5,925 |
) |
|
(5,925 |
) |
|
(5,985 |
) |
Net income attributable
to Company's common stockholders |
3,676 |
|
|
28,048 |
|
|
23,769 |
|
|
23,693 |
|
|
24,632 |
|
Basic earnings per
common share |
$ |
0.02 |
|
|
$ |
0.21 |
|
|
$ |
0.21 |
|
|
$ |
0.21 |
|
|
$ |
0.22 |
|
Diluted earnings per
common share |
$ |
0.02 |
|
|
$ |
0.20 |
|
|
$ |
0.20 |
|
|
$ |
0.20 |
|
|
$ |
0.21 |
|
Weighted average shares
outstanding - basic |
148,871 |
|
|
132,413 |
|
|
115,211 |
|
|
112,018 |
|
|
111,871 |
|
Weighted average shares
outstanding - diluted |
149,590 |
|
|
152,727 |
|
|
135,164 |
|
|
131,761 |
|
|
131,565 |
|
|
|
|
|
|
|
|
|
|
|
Book value per common
share |
$ |
5.65 |
|
|
$ |
5.72 |
|
|
$ |
5.76 |
|
|
$ |
5.79 |
|
|
$ |
6.00 |
|
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 |
|
|
$ |
0.51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
Multi-Family Credit |
|
Residential Credit |
|
Other |
|
Total |
At December 31,
2018 |
|
|
|
|
|
|
|
|
|
Carrying value |
$ |
1,037,730 |
|
|
$ |
1,166,628 |
|
|
$ |
1,241,817 |
|
|
$ |
10,953 |
|
|
$ |
3,457,128 |
|
Net
capital allocated |
$ |
135,514 |
|
|
$ |
619,252 |
|
|
$ |
544,947 |
|
|
$ |
(119,420 |
) |
|
$ |
1,180,293 |
|
Three Months
Ended December 31, 2018 |
|
|
|
|
|
|
|
|
|
Average
interest earning assets |
$ |
1,087,267 |
|
|
$ |
786,394 |
|
|
$ |
848,777 |
|
|
$ |
— |
|
|
$ |
2,722,438 |
|
Weighted
average yield on interest earning assets |
2.74 |
% |
|
10.85 |
% |
|
5.36 |
% |
|
— |
|
|
5.90 |
% |
Less:
Average cost of funds |
(2.46 |
)% |
|
(5.00 |
)% |
|
(5.01 |
)% |
|
— |
|
|
(3.60 |
)% |
Portfolio
net interest margin |
0.28 |
% |
|
5.85 |
% |
|
0.35 |
% |
|
— |
|
|
2.30 |
% |
|
|
|
|
|
|
|
|
|
|
At September
30, 2018 |
|
|
|
|
|
|
|
|
|
Carrying
value |
$ |
1,055,433 |
|
|
$ |
947,851 |
|
|
$ |
606,495 |
|
|
$ |
13,450 |
|
|
$ |
2,623,229 |
|
Net
capital allocated |
$ |
224,545 |
|
|
$ |
632,823 |
|
|
$ |
389,369 |
|
|
$ |
(138,048 |
) |
|
$ |
1,108,689 |
|
Three Months
Ended September 30, 2018 |
|
|
|
|
|
|
|
|
|
Average
interest earning assets |
$ |
1,121,180 |
|
|
$ |
681,040 |
|
|
$ |
597,200 |
|
|
$ |
— |
|
|
$ |
2,399,420 |
|
Weighted
average yield on interest earning assets |
2.67 |
% |
|
11.55 |
% |
|
5.33 |
% |
|
— |
|
|
5.85 |
% |
Less:
Average cost of funds |
(2.22 |
)% |
|
(5.04 |
)% |
|
(4.68 |
)% |
|
— |
|
|
(3.30 |
)% |
Portfolio
net interest margin |
0.45 |
% |
|
6.51 |
% |
|
0.65 |
% |
|
— |
|
|
2.55 |
% |
|
|
|
|
|
|
|
|
|
|
At June 30,
2018 |
|
|
|
|
|
|
|
|
|
Carrying
value |
$ |
1,101,344 |
|
|
$ |
875,563 |
|
|
$ |
586,457 |
|
|
$ |
13,301 |
|
|
$ |
2,576,665 |
|
Net
capital allocated |
$ |
250,497 |
|
|
$ |
557,422 |
|
|
$ |
320,552 |
|
|
$ |
(112,270 |
) |
|
$ |
1,016,201 |
|
Three Months
Ended June 30, 2018 |
|
|
|
|
|
|
|
|
|
Average
interest earning assets |
$ |
1,167,278 |
|
|
$ |
639,637 |
|
|
$ |
596,382 |
|
|
$ |
— |
|
|
$ |
2,403,297 |
|
Weighted
average yield on interest earning assets |
2.69 |
% |
|
11.43 |
% |
|
4.63 |
% |
|
— |
|
|
5.50 |
% |
Less:
Average cost of funds |
(2.02 |
)% |
|
(4.69 |
)% |
|
(4.58 |
)% |
|
— |
|
|
(3.11 |
)% |
Portfolio
net interest margin |
0.67 |
% |
|
6.74 |
% |
|
0.05 |
% |
|
— |
|
|
2.39 |
% |
|
|
|
|
|
|
|
|
|
|
At March 31,
2018 |
|
|
|
|
|
|
|
|
|
Carrying
value |
$ |
1,161,445 |
|
|
$ |
836,353 |
|
|
$ |
598,863 |
|
|
$ |
12,903 |
|
|
$ |
2,609,564 |
|
Net
capital allocated |
$ |
251,405 |
|
|
$ |
500,813 |
|
|
$ |
324,866 |
|
|
$ |
(126,297 |
) |
|
$ |
950,787 |
|
Three Months
Ended March 31, 2018 |
|
|
|
|
|
|
|
|
|
Average
interest earning assets |
$ |
1,208,900 |
|
|
$ |
612,357 |
|
|
$ |
604,033 |
|
|
$ |
— |
|
|
$ |
2,425,290 |
|
Weighted
average yield on interest earning assets |
2.64 |
% |
|
11.43 |
% |
|
5.93 |
% |
|
— |
|
|
5.68 |
% |
Less:
Average cost of funds |
(1.82 |
)% |
|
(4.51 |
)% |
|
(4.06 |
)% |
|
— |
|
|
(2.82 |
)% |
Portfolio
net interest margin |
0.82 |
% |
|
6.92 |
% |
|
1.87 |
% |
|
— |
|
|
2.86 |
% |
|
|
|
|
|
|
|
|
|
|
At December 31,
2017 |
|
|
|
|
|
|
|
|
|
Carrying
value |
$ |
1,169,535 |
|
|
$ |
816,805 |
|
|
$ |
601,831 |
|
|
$ |
12,622 |
|
|
$ |
2,600,793 |
|
Net
capital allocated |
$ |
264,801 |
|
|
$ |
475,200 |
|
|
$ |
318,957 |
|
|
$ |
(82,957 |
) |
|
$ |
976,001 |
|
Three Months
Ended December 31, 2017 |
|
|
|
|
|
|
|
|
|
Average
interest earning assets |
$ |
971,707 |
|
|
$ |
596,701 |
|
|
$ |
607,158 |
|
|
$ |
— |
|
|
$ |
2,175,566 |
|
Weighted
average yield on interest earning assets |
2.50 |
% |
|
11.11 |
% |
|
3.86 |
% |
|
— |
|
|
5.24 |
% |
Less:
Average cost of funds |
(1.68 |
)% |
|
(4.49 |
)% |
|
(4.17 |
)% |
|
— |
|
|
(2.85 |
)% |
Portfolio
net interest margin |
0.82 |
% |
|
6.62 |
% |
|
(0.31 |
)% |
|
— |
|
|
2.39 |
% |
|
|
|
|
|
|
|
|
|
|
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