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, 2019.
Summary of Second Quarter
2019:
- Earned net income attributable to common stockholders of $16.5
million, or $0.08 per share (basic), and comprehensive income to
common stockholders of $36.6 million, or $0.18 per share.
- Earned net interest income of $25.7 million and portfolio net
interest margin of 216 basis points.
- Recognized book value per common share of $5.75 at
June 30, 2019, unchanged from March 31, 2019, resulting in an
economic return of 3.5% for the quarter and an annualized economic
return of 17.7% for the six months ended June 30, 2019.
- Acquired residential, multi-family and other credit assets
totaling $504.3 million.
- Declared second quarter dividend of $0.20 per common share that
was paid on July 25, 2019.
- Issued 22,960,200 shares of common stock collectively through
an underwritten public offering and at-the-market common equity
offering program, resulting in total net proceeds of $136.7
million.
- Issued 661,287 shares of preferred stock under an at-the-market
preferred equity offering program, resulting in net proceeds
of $16.1 million.
Subsequent Development:
On July 22, 2019, the Company issued
23,000,000 shares of its common stock through an underwritten
public offering at a public offering price of $6.11 per share,
resulting in total net proceeds to the Company of $137.5 million
after deducting underwriting discounts and commissions and
estimated offering expenses.
Management Overview
Steven Mumma, NYMT’s Chairman and Chief
Executive Officer, commented: “The Company continues to deliver
solid results, generating GAAP earnings per share of $0.08 and
comprehensive earnings per share of $0.18 for the second quarter.
Book value per common share at June 30, 2019 of $5.75 was unchanged
from the prior quarter, resulting in a total economic return of
3.5% for the quarter. When combining operating results for the
first two quarters of 2019, the Company has generated a total
economic return of 8.8%, which represents a 17.7% return on an
annualized basis, with comprehensive earnings per share of $0.47
exceeding common dividends paid to date in 2019 by 17.5%.
Our investment team remained active during the
second quarter, sourcing and closing on more than $500 million in
credit sensitive assets, bringing our total investment portfolio to
$4.2 billion at June 30, 2019. To fund a portion of this investment
activity, the Company continued to opportunistically access the
public capital markets during the second quarter through a
follow-on offering and an at-the-market equity offering program,
raising aggregate net proceeds of $136.7 million at levels that
were 4% accretive to our current book
value.
While the last twelve months for the Company have been filled with
new hires, an increase in our equity capital base to over $1.7
billion and the acquisition of more than $2.0 billion in new credit
investments, the NYMT team remains focused on fulfilling its
objective to deliver long-term stable distributions to our
stockholders over changing economic conditions - having delivered a
total economic return of 13.7% over the twelve months ended June
30, 2019 while maintaining a dividend payment rate of $0.20 per
share, our tenth straight quarter at that level.”
Jason Serrano, NYMT’s President, added: “Against
a slowing macroeconomic backdrop, we are excited about our ability
to produce compelling risk adjusted returns while utilizing
conservative levels of recourse leverage, 1.8x as of June 30, 2019.
In the quarter, credit spreads across multi-family and
single-family markets tightened in sympathy with the broader
markets. Agency MBS spreads have widened year to date, even
as investment grade corporate credit spreads have tightened.
Our rotation into credit continues to add value to our
shareholders, as agency MBS exposure as a percentage of our
investment portfolio has declined by 21.1% through the first six
months of 2019 and represents just 9.8% of our total equity as of
June 30, 2019. We believe our corporate liquidity and ability
to take advantage of mispricing through proprietary sourcing
channels in the residential credit sector has never been
stronger.”
Capital Allocation
The following tables set forth our allocated
capital by investment category at June 30, 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 June 30, 2019
(dollar amounts in thousands):
Capital
Allocation at June 30, 2019: |
|
Agency RMBS |
|
Residential Credit (1) |
|
Multi-Family Credit(2) |
|
Other |
|
Total |
Carrying Value |
$ |
994,200 |
|
|
$ |
1,778,276 |
|
|
$ |
1,402,217 |
|
|
$ |
24,739 |
|
|
$ |
4,199,432 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
Callable (3) |
(871,613 |
) |
|
(932,649 |
) |
|
(800,094 |
) |
|
— |
|
|
(2,604,356 |
) |
Non-Callable |
— |
|
|
(45,280 |
) |
|
— |
|
|
(45,000 |
) |
|
(90,280 |
) |
Convertible |
— |
|
|
— |
|
|
— |
|
|
(131,839 |
) |
|
(131,839 |
) |
Hedges (Net) (4) |
14,047 |
|
|
— |
|
|
— |
|
|
— |
|
|
14,047 |
|
Cash and Restricted Cash
(5) |
9,942 |
|
|
64,741 |
|
|
21,117 |
|
|
40,150 |
|
|
135,950 |
|
Goodwill |
— |
|
|
— |
|
|
— |
|
|
25,222 |
|
|
25,222 |
|
Other |
3,738 |
|
|
35,511 |
|
|
(7,965 |
) |
|
(51,778 |
) |
|
(20,494 |
) |
Net Capital Allocated |
$ |
150,314 |
|
|
$ |
900,599 |
|
|
$ |
615,275 |
|
|
$ |
(138,506 |
) |
|
$ |
1,527,682 |
|
|
|
|
|
|
|
|
|
|
|
Net Interest Income-
Three Months Ended June 30, 2019: |
|
|
|
|
|
|
|
|
|
Interest Income |
$ |
6,758 |
|
|
$ |
18,725 |
|
|
$ |
26,834 |
|
|
$ |
29 |
|
|
$ |
52,346 |
|
Interest Expense |
(5,887 |
) |
|
(10,092 |
) |
|
(7,246 |
) |
|
(3,430 |
) |
|
(26,655 |
) |
Net Interest Income
(Expense) |
$ |
871 |
|
|
$ |
8,633 |
|
|
$ |
19,588 |
|
|
$ |
(3,401 |
) |
|
$ |
25,691 |
|
|
|
|
|
|
|
|
|
|
|
Portfolio Net Interest
Margin - Three Months Ended June 30, 2019: |
|
|
|
|
|
|
|
|
|
Average Interest Earning
Assets (6) |
$ |
1,017,409 |
|
|
$ |
1,506,973 |
|
|
$ |
1,018,847 |
|
|
$ |
1,098 |
|
|
$ |
3,544,327 |
|
Weighted Average Yield on
Interest Earning Assets (7) |
2.66 |
% |
|
4.97 |
% |
|
10.54 |
% |
|
10.44 |
% |
|
5.91 |
% |
Less: Average Cost of Funds
(8) |
(2.62 |
)% |
|
(4.54 |
)% |
|
(4.20 |
)% |
|
— |
|
|
(3.75 |
)% |
Portfolio Net Interest Margin
(9) |
0.04 |
% |
|
0.43 |
% |
|
6.34 |
% |
|
10.44 |
% |
|
2.16 |
% |
(1) |
|
Includes $1.1
billion of distressed and other residential mortgage loans at
fair value, $218.1 million of distressed and other residential
mortgage loans at carrying value, $432.8 million of non-Agency RMBS
and $61.3 million of investments in unconsolidated entities. |
(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 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.” |
(3) |
|
Includes repurchase
agreements. |
(4) |
|
Includes derivative liabilities
of $27.8 million netted against a $41.9 million variation margin
receivable. |
(5) |
|
Restricted cash is 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. |
(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 $0.7 million and $2.7 million,
respectively, for the quarter. Our Average Cost of Funds includes
interest expense on our interest rate swaps. |
(9) |
|
Portfolio Net Interest Margin is
the difference between our Weighted Average Yield on Interest
Earning Assets and our Average Cost of Funds, excluding the
weighted average cost of subordinated debentures and convertible
notes. |
Prepayment History
The following table sets forth the 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-RateRMBS |
|
Agency ARMs |
June 30, 2019 |
|
10.3 |
% |
|
9.6 |
% |
|
20.0 |
% |
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 |
% |
|
|
|
|
|
|
|
|
|
|
Second Quarter Earnings
Summary
Net Income
For the quarter ended June 30, 2019, we
reported net income attributable to common stockholders of $16.5
million as compared to $38.2 million for the quarter ended March
31, 2019.
We generated net interest income of $25.7
million and a portfolio net interest margin of 216 basis points for
the quarter ended June 30, 2019 as compared to net interest
income of $26.2 million and a portfolio net interest margin of 240
basis points for the quarter ended March 31, 2019. The change
in net interest income in the second quarter was primarily driven
by:
- A decrease of $1.9 million in net interest income on our
residential credit portfolio due to lower asset yields in the
second quarter. In the first quarter, there was an increase
in delinquent interest collected on loans that were past due or
non-accrual as of the beginning of the period.
- An increase of $1.7 million in net interest income on our
multi-family credit portfolio primarily from income recognized on
our first loss PO CMBS investments purchased in the latter part of
the first quarter.
- A decrease of $0.3 million in net interest income on our Agency
RMBS portfolio primarily due to an increase in prepayment
rates.
The main components of other income for the
quarters ended June 30, 2019 and March 31, 2019, respectively,
are detailed in the following table (dollar amounts in
thousands):
|
|
Three Months Ended |
Other Income |
|
June 30, 2019 |
|
March 31, 2019 |
Recovery of loan losses |
|
$ |
1,296 |
|
|
$ |
1,065 |
|
Realized gain on investment
securities and related hedges, net |
|
— |
|
|
16,801 |
|
Realized gain on distressed
and other residential mortgage loans at carrying value, net |
|
2,054 |
|
|
2,079 |
|
Net gain on distressed and
other residential mortgage loans at fair value |
|
12,271 |
|
|
11,010 |
|
Unrealized loss on investment
securities and related hedges, net |
|
(15,007 |
) |
|
(14,586 |
) |
Unrealized gain on
multi-family loans and debt held in securitization trusts, net |
|
5,207 |
|
|
9,410 |
|
Loss on extinguishment of
debt |
|
— |
|
|
(2,857 |
) |
Income from real estate held
for sale in consolidated variable interest entities |
|
— |
|
|
215 |
|
Other income |
|
2,740 |
|
|
7,728 |
|
Total other income |
|
$ |
8,561 |
|
|
$ |
30,865 |
|
For the quarter ended June 30, 2019, we
recognized other income of $8.6 million primarily comprised of the
following:
- Total net gain of $12.3 million from our distressed and other
residential mortgage loans held at fair value, comprised of a
$9.9 million unrealized gain due to tightening credit spreads
during the quarter and a $2.4 million realized gain during the
period resulting primarily from sale activity.
- Realized gain of $2.1 million from our distressed and other
residential mortgage loans at carrying value, net resulting
primarily from sale activity during the quarter.
- Unrealized loss of $15.0 million from our interest rate swaps
accounted for as trading instruments, which is offset by unrealized
gains on our available for sale securities of $20.1 million
reported as a component of other comprehensive income ("OCI").
- Unrealized gain of $5.2 million on our Consolidated K-Series
investments driven primarily by tightening credit spreads.
- Other income of $2.7 million comprised primarily of $1.7
million in unrealized gains on joint venture equity investments,
$1.7 million in income from preferred equity investments accounted
for as investments in unconsolidated entities, and a $0.5 million
gain on early redemption of a preferred equity investment.
The Company also recognized $1.5 million in net losses from our
interest in a real estate development property, which will be
offset by a $0.7 million non-controlling interest share of these
losses.
The following table details the general and
administrative expenses for the quarters ended June 30, 2019
and March 31, 2019, respectively (dollar amounts in thousands):
|
|
Three Months Ended |
General and Administrative Expenses |
|
June 30, 2019 |
|
March 31, 2019 |
Salaries, benefits and directors’ compensation |
|
$ |
6,492 |
|
|
$ |
5,671 |
|
Base management and incentive
fees |
|
543 |
|
|
723 |
|
Other general and
administrative expenses |
|
2,780 |
|
|
2,516 |
|
Total general and administrative expenses |
|
$ |
9,815 |
|
|
$ |
8,910 |
|
The change in general and administrative
expenses is primarily related to the annual awards in equity
compensation paid to non-employee directors of the Company in the
second quarter.
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 June 30, 2019 and
March 31, 2019, respectively (dollar amounts in thousands):
|
|
Three Months Ended |
Operating Expenses |
|
June 30, 2019 |
|
March 31, 2019 |
Expenses related to distressed and other residential mortgage
loans |
|
$ |
2,579 |
|
|
$ |
3,252 |
|
Expenses related to real
estate held for sale in consolidated variable interest
entities |
|
— |
|
|
482 |
|
Total operating expenses |
|
$ |
2,579 |
|
|
$ |
3,734 |
|
The decrease in operating expenses in the second
quarter can be primarily attributed to a decrease in servicing fees
on distressed and other residential mortgage loans and a reduction
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.
Comprehensive Income
For the quarter ended June 30, 2019, we
reported comprehensive income to common stockholders of $36.6
million, as compared to $51.3 million for the quarter ended March
31, 2019. The main components of comprehensive income for the
quarters ended June 30, 2019 and March 31, 2019, respectively,
are detailed in the following table (dollar amounts in
thousands):
|
|
Three Months Ended |
|
|
June 30, 2019 |
|
March 31, 2019 |
NET INCOME ATTRIBUTABLE TO COMPANY'S COMMON STOCKHOLDERS |
|
$ |
16,478 |
|
|
$ |
38,214 |
|
OTHER COMPREHENSIVE
INCOME |
|
|
|
|
Increase (decrease) in fair value of available for sale
securities |
|
|
|
|
Agency RMBS |
|
12,971 |
|
|
16,796 |
|
Non-Agency RMBS |
|
1,074 |
|
|
4,623 |
|
CMBS |
|
6,076 |
|
|
5,293 |
|
ABS |
|
(29 |
) |
|
— |
|
Total |
|
20,092 |
|
|
26,712 |
|
Reclassification adjustment for net gain included in net income -
CMBS |
|
— |
|
|
(13,665 |
) |
TOTAL OTHER COMPREHENSIVE
INCOME |
|
20,092 |
|
|
13,047 |
|
COMPREHENSIVE INCOME
ATTRIBUTABLE TO COMPANY'S COMMON STOCKHOLDERS |
|
$ |
36,570 |
|
|
$ |
51,261 |
|
|
|
|
|
|
|
|
|
|
The change in OCI can be attributed primarily to
the reclassification of unrealized gains reported in OCI to net
income in relation to the sale of certain multi-family CMBS
investments in the first quarter. In addition, pricing on our
Agency RMBS, non-Agency RMBS and CMBS improved since March 31, 2019
contributing $0.10 per share in comprehensive income for the
quarter ended June 30, 2019.
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, 2019
(amounts in thousands, except per share):
|
Quarter Ended June 30, 2019 |
|
Amount |
|
Shares |
|
Per Share(1) |
Beginning Balance |
$ |
1,079,105 |
|
|
187,831 |
|
|
$ |
5.75 |
|
Common stock issuance,
net(2) |
138,471 |
|
|
23,042 |
|
|
|
Preferred stock issuance,
net |
16,087 |
|
|
|
|
|
Preferred stock liquidation
preference |
(16,532 |
) |
|
|
|
|
Balance after share issuance
activity |
1,217,131 |
|
|
210,873 |
|
|
5.77 |
|
Dividends declared |
(42,155 |
) |
|
|
|
(0.20 |
) |
Net change in accumulated other
comprehensive income: |
|
|
|
|
|
Investment securities, available for sale (3) |
20,092 |
|
|
|
|
0.10 |
|
Net income attributable to
Company's common stockholders |
16,478 |
|
|
|
|
0.08 |
|
Ending
Balance |
$ |
1,211,546 |
|
|
210,873 |
|
|
$ |
5.75 |
|
(1) |
|
Outstanding shares used to
calculate book value per share for the ending balance is based on
outstanding shares as of June 30, 2019 of 210,872,614. |
(2) |
|
Includes amortization of stock
based compensation. |
(3) |
|
The increases relate to
unrealized gains in our investment securities due to improved
pricing. |
Conference Call
On Tuesday, August 6, 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 six months ended
June 30, 2019. The conference call dial-in number is (877)
312-8806. The replay will be available until Tuesday, August 13,
2019 and can be accessed by dialing (855) 859-2056 and entering
passcode 2576655. 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 2019 financial and operating data
can be viewed in the Company’s Quarterly Report on Form 10-Q for
the quarter ended June 30, 2019, which is expected to be filed
with the Securities and Exchange Commission on or about August 9,
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 structured multi-family property
investments such as multi-family CMBS and preferred equity in, and
mezzanine loans to, owners of multi-family properties, 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 certain mortgage-,
residential housing- and other credit-related assets. For a list of
defined terms used from time to time in this press release, see
“Defined Terms” below.
Defined Terms
The following defines certain of the commonly
used terms 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”); “ABS” refers to debt and/or equity tranches of
securitizations backed by various asset classes including, but not
limited to, automobiles, aircraft, credit cards, equipment,
franchises, recreational vehicles and student loans; “non-Agency
RMBS” refers to RMBS that are not guaranteed by any agency of the
U.S. Government or any GSE; “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 June 30, 2019 is set forth below
(dollar amounts in thousands):
Multi-family loans held in securitization trusts, at fair
value |
$ |
14,573,925 |
|
Multi-family CDOs, at fair
value |
(13,772,726 |
) |
Net carrying value |
801,199 |
|
Investment securities
available for sale, at fair value |
292,090 |
|
Total CMBS, at fair value |
1,093,289 |
|
Preferred equity investments,
mezzanine loans and investments in unconsolidated entities |
296,187 |
|
Real estate under development
(1) |
16,727 |
|
Mortgages and notes payable in
consolidated variable interest entities |
(3,986 |
) |
Repurchase agreements,
investment securities |
(800,094 |
) |
Cash and other |
13,152 |
|
Net Capital in Multi-Family
Credit |
$ |
615,275 |
|
(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
June 30, 2019 is set forth below (dollar amounts in
thousands):
|
Three Months Ended June 30, 2019 |
Interest income, multi-family loans held in securitization
trusts |
$ |
133,157 |
|
Interest income, investment
securities, available for sale (1) |
3,443 |
|
Interest income, preferred
equity and mezzanine loan investments |
5,148 |
|
Interest expense, multi-family
collateralized debt obligations |
(114,914 |
) |
Interest income, Multi-Family
Credit, net |
26,834 |
|
Interest expense, repurchase
agreements |
(7,246 |
) |
Net interest income,
Multi-Family Credit |
$ |
19,588 |
|
(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
COMPANY |
|
Kristine R. Nario-Eng |
|
Chief Financial Officer |
|
Phone: (646) 216-2363 |
|
Email: KNario@nymtrust.com |
|
|
|
|
FINANCIAL TABLES FOLLOW
|
|
NEW YORK MORTGAGE TRUST, INC. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(Dollar amounts in thousands, except share
data) |
|
|
June 30, 2019 |
|
December 31, 2018 |
|
(unaudited) |
|
|
ASSETS |
|
|
|
Investment securities, available for sale, at fair value |
$ |
1,743,869 |
|
|
$ |
1,512,252 |
|
Distressed and other
residential mortgage loans, at fair value |
1,061,954 |
|
|
737,523 |
|
Distressed and other
residential mortgage loans, net |
218,094 |
|
|
285,261 |
|
Investments in unconsolidated
entities |
166,148 |
|
|
73,466 |
|
Preferred equity and mezzanine
loan investments |
191,387 |
|
|
165,555 |
|
Multi-family loans held in
securitization trusts, at fair value |
14,573,925 |
|
|
11,679,847 |
|
Derivative assets |
14,047 |
|
|
10,263 |
|
Cash and cash equivalents |
134,993 |
|
|
103,724 |
|
Real estate held for sale in
consolidated variable interest entities |
— |
|
|
29,704 |
|
Goodwill |
25,222 |
|
|
25,222 |
|
Receivables and other
assets |
135,845 |
|
|
114,821 |
|
Total Assets
(1) |
$ |
18,265,484 |
|
|
$ |
14,737,638 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
Liabilities: |
|
|
|
Repurchase agreements |
$ |
2,604,356 |
|
|
$ |
2,131,505 |
|
Residential collateralized
debt obligations |
45,280 |
|
|
53,040 |
|
Multi-family collateralized
debt obligations, at fair value |
13,772,726 |
|
|
11,022,248 |
|
Convertible notes |
131,839 |
|
|
130,762 |
|
Subordinated debentures |
45,000 |
|
|
45,000 |
|
Mortgages and notes payable in
consolidated variable interest entities |
3,986 |
|
|
31,227 |
|
Securitized debt |
— |
|
|
42,335 |
|
Accrued expenses and other
liabilities |
134,615 |
|
|
101,228 |
|
Total liabilities
(1) |
16,737,802 |
|
|
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, 3,101,683 and
3,000,000 shares issued and outstanding as of June 30, 2019 and
December 31, 2018, respectively |
74,854 |
|
|
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 as
of June 30, 2019 and December 31, 2018, respectively, 3,993,866 and
3,600,000 shares issued and outstanding as of June 30, 2019 and
December 31, 2018, respectively |
96,486 |
|
|
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 as of June 30, 2019 and December 31, 2018,
respectively, 5,565,738 and 5,400,000 shares issued and outstanding
as of June 30, 2019 and December 31, 2018, respectively |
134,502 |
|
|
130,496 |
|
Common stock, $0.01 par value,
400,000,000 shares authorized, 210,872,614 and 155,589,528 shares
issued and outstanding as of June 30, 2019 and December 31, 2018,
respectively |
2,109 |
|
|
1,556 |
|
Additional paid-in
capital |
1,337,330 |
|
|
1,013,391 |
|
Accumulated other
comprehensive income (loss) |
11,004 |
|
|
(22,135 |
) |
Accumulated deficit |
(128,207 |
) |
|
(103,178 |
) |
Company's stockholders'
equity |
1,528,078 |
|
|
1,179,389 |
|
Non-controlling interest in
consolidated variable interest entities |
(396 |
) |
|
904 |
|
Total
equity |
1,527,682 |
|
|
1,180,293 |
|
Total Liabilities and
Stockholders' Equity |
$ |
18,265,484 |
|
|
$ |
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
June 30, 2019 and December 31, 2018, assets of
consolidated VIEs totaled $14,691,481 and $11,984,374,
respectively, and the liabilities of consolidated VIEs totaled
$13,870,064 and $11,191,736, respectively. |
|
|
NEW YORK MORTGAGE TRUST, INC. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(Dollar amounts in thousands, except per share
data) |
(unaudited) |
|
|
For the Three Months Ended June 30, |
|
For the Six Months Ended June 30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
INTEREST INCOME: |
|
|
|
|
|
|
|
Investment securities and other interest earning assets |
$ |
15,355 |
|
|
$ |
12,128 |
|
|
$ |
30,671 |
|
|
$ |
23,940 |
|
Distressed and other residential mortgage loans |
13,598 |
|
|
5,104 |
|
|
29,489 |
|
|
12,645 |
|
Preferred equity and mezzanine loan investments |
5,148 |
|
|
4,862 |
|
|
10,155 |
|
|
9,308 |
|
Multi-family loans held in securitization trusts |
133,157 |
|
|
85,629 |
|
|
244,925 |
|
|
170,721 |
|
Total interest income |
167,258 |
|
|
107,723 |
|
|
315,240 |
|
|
216,614 |
|
|
|
|
|
|
|
|
|
INTEREST EXPENSE: |
|
|
|
|
|
|
|
Repurchase agreements and other interest bearing liabilities |
22,823 |
|
|
10,477 |
|
|
43,209 |
|
|
20,127 |
|
Residential collateralized debt obligations |
402 |
|
|
475 |
|
|
824 |
|
|
886 |
|
Multi-family collateralized debt obligations |
114,914 |
|
|
74,686 |
|
|
211,711 |
|
|
149,165 |
|
Convertible notes |
2,694 |
|
|
2,652 |
|
|
5,384 |
|
|
5,301 |
|
Subordinated debentures |
734 |
|
|
690 |
|
|
1,474 |
|
|
1,310 |
|
Securitized debt |
— |
|
|
1,243 |
|
|
742 |
|
|
2,574 |
|
Total interest expense |
141,567 |
|
|
90,223 |
|
|
263,344 |
|
|
179,363 |
|
|
|
|
|
|
|
|
|
NET INTEREST INCOME |
25,691 |
|
|
17,500 |
|
|
51,896 |
|
|
37,251 |
|
|
|
|
|
|
|
|
|
OTHER INCOME (LOSS): |
|
|
|
|
|
|
|
Recovery of loan losses |
1,296 |
|
|
437 |
|
|
2,362 |
|
|
395 |
|
Realized (loss) gain on investment securities and related hedges,
net |
— |
|
|
(8,847 |
) |
|
16,801 |
|
|
(12,270 |
) |
Realized gain on distressed and other residential mortgage loans at
carrying value, net |
2,054 |
|
|
2,214 |
|
|
4,133 |
|
|
1,442 |
|
Net gain (loss) on distressed and other residential mortgage loans
at fair value |
12,271 |
|
|
97 |
|
|
23,281 |
|
|
(70 |
) |
Unrealized (loss) gain on investment securities and related hedges,
net |
(15,007 |
) |
|
12,606 |
|
|
(29,593 |
) |
|
24,298 |
|
Unrealized gain on multi-family loans and debt held in
securitization trusts, net |
5,207 |
|
|
12,019 |
|
|
14,617 |
|
|
19,564 |
|
Loss on extinguishment of debt |
— |
|
|
— |
|
|
(2,857 |
) |
|
— |
|
Income from real estate held for sale in consolidated variable
interest entities |
— |
|
|
1,253 |
|
|
215 |
|
|
3,379 |
|
Other income |
2,740 |
|
|
228 |
|
|
10,465 |
|
|
4,223 |
|
Total other income |
8,561 |
|
|
20,007 |
|
|
39,424 |
|
|
40,961 |
|
|
|
|
|
|
|
|
|
GENERAL, ADMINISTRATIVE AND
OPERATING EXPENSES: |
|
|
|
|
|
|
|
General and administrative expenses |
9,272 |
|
|
5,276 |
|
|
17,459 |
|
|
9,932 |
|
Base management and incentive fees |
543 |
|
|
809 |
|
|
1,266 |
|
|
1,642 |
|
Expenses related to distressed and other residential mortgage
loans |
2,579 |
|
|
1,811 |
|
|
5,831 |
|
|
3,414 |
|
Expenses related to real estate held for sale in consolidated
variable interest entities |
— |
|
|
873 |
|
|
482 |
|
|
2,479 |
|
Total general, administrative and operating expenses |
12,394 |
|
|
8,769 |
|
|
25,038 |
|
|
17,467 |
|
|
|
|
|
|
|
|
|
INCOME FROM OPERATIONS BEFORE
INCOME TAXES |
21,858 |
|
|
28,738 |
|
|
66,282 |
|
|
60,745 |
|
Income tax benefit |
(134 |
) |
|
(13 |
) |
|
(60 |
) |
|
(92 |
) |
NET INCOME |
21,992 |
|
|
28,751 |
|
|
66,342 |
|
|
60,837 |
|
Net loss (income) attributable
to non-controlling interest in consolidated variable interest
entities |
743 |
|
|
943 |
|
|
532 |
|
|
(1,526 |
) |
NET INCOME ATTRIBUTABLE TO
COMPANY |
22,735 |
|
|
29,694 |
|
|
66,874 |
|
|
59,311 |
|
Preferred stock dividends |
(6,257 |
) |
|
(5,925 |
) |
|
(12,182 |
) |
|
(11,850 |
) |
NET INCOME ATTRIBUTABLE TO
COMPANY'S COMMON STOCKHOLDERS |
$ |
16,478 |
|
|
$ |
23,769 |
|
|
$ |
54,692 |
|
|
$ |
47,461 |
|
|
|
|
|
|
|
|
|
Basic earnings per common
share |
$ |
0.08 |
|
|
$ |
0.21 |
|
|
$ |
0.29 |
|
|
$ |
0.42 |
|
Diluted earnings per common
share |
$ |
0.08 |
|
|
$ |
0.20 |
|
|
$ |
0.29 |
|
|
$ |
0.40 |
|
Weighted average shares
outstanding-basic |
200,691 |
|
|
115,211 |
|
|
187,628 |
|
|
113,623 |
|
Weighted average shares
outstanding-diluted |
202,398 |
|
|
135,164 |
|
|
209,011 |
|
|
133,470 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2019 |
|
March 31, 2019 |
|
December 31, 2018 |
|
September 30, 2018 |
|
June 30, 2018 |
Net interest income |
$ |
25,691 |
|
|
$ |
26,203 |
|
|
$ |
21,873 |
|
|
$ |
19,603 |
|
|
$ |
17,500 |
|
Total other income |
8,561 |
|
|
30,865 |
|
|
1,217 |
|
|
24,303 |
|
|
20,007 |
|
Total general, administrative
and operating expenses |
12,394 |
|
|
12,644 |
|
|
14,091 |
|
|
9,912 |
|
|
8,769 |
|
Income from operations before
income taxes |
21,858 |
|
|
44,424 |
|
|
8,999 |
|
|
33,994 |
|
|
28,738 |
|
Income tax (benefit)
expense |
(134 |
) |
|
74 |
|
|
(511 |
) |
|
(454 |
) |
|
(13 |
) |
Net income |
21,992 |
|
|
44,350 |
|
|
9,510 |
|
|
34,448 |
|
|
28,751 |
|
Net loss (income) attributable
to non-controlling interest in consolidated variable interest
entities |
743 |
|
|
(211 |
) |
|
91 |
|
|
(475 |
) |
|
943 |
|
Net income attributable to
Company |
22,735 |
|
|
44,139 |
|
|
9,601 |
|
|
33,973 |
|
|
29,694 |
|
Preferred stock dividends |
(6,257 |
) |
|
(5,925 |
) |
|
(5,925 |
) |
|
(5,925 |
) |
|
(5,925 |
) |
Net income attributable to
Company's common stockholders |
16,478 |
|
|
38,214 |
|
|
3,676 |
|
|
28,048 |
|
|
23,769 |
|
Basic earnings per common
share |
$ |
0.08 |
|
|
$ |
0.22 |
|
|
$ |
0.02 |
|
|
$ |
0.21 |
|
|
$ |
0.21 |
|
Diluted earnings per common
share |
$ |
0.08 |
|
|
$ |
0.21 |
|
|
$ |
0.02 |
|
|
$ |
0.20 |
|
|
$ |
0.20 |
|
Weighted average shares
outstanding - basic |
200,691 |
|
|
174,421 |
|
|
148,871 |
|
|
132,413 |
|
|
115,211 |
|
Weighted average shares
outstanding - diluted |
202,398 |
|
|
194,970 |
|
|
149,590 |
|
|
152,727 |
|
|
135,164 |
|
|
|
|
|
|
|
|
|
|
|
Book value per common
share |
$ |
5.75 |
|
|
$ |
5.75 |
|
|
$ |
5.65 |
|
|
$ |
5.72 |
|
|
$ |
5.76 |
|
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 June 30,
2019 |
|
|
|
|
|
|
|
|
|
Carrying value |
$ |
994,200 |
|
|
$ |
1,778,276 |
|
|
$ |
1,402,217 |
|
|
$ |
24,739 |
|
|
$ |
4,199,432 |
|
Net capital allocated |
$ |
150,314 |
|
|
$ |
900,599 |
|
|
$ |
615,275 |
|
|
$ |
(138,506 |
) |
|
$ |
1,527,682 |
|
Three Months Ended
June 30, 2019 |
|
|
|
|
|
|
|
|
|
Average interest earning assets |
$ |
1,017,409 |
|
|
$ |
1,506,973 |
|
|
$ |
1,018,847 |
|
|
$ |
1,098 |
|
|
$ |
3,544,327 |
|
Weighted average yield on interest earning assets |
2.66 |
% |
|
4.97 |
% |
|
10.54 |
% |
|
10.44 |
% |
|
5.91 |
% |
Less: Average cost of funds |
(2.62 |
)% |
|
(4.54 |
)% |
|
(4.20 |
)% |
|
— |
|
|
(3.75 |
)% |
Portfolio net interest margin |
0.04 |
% |
|
0.43 |
% |
|
6.34 |
% |
|
10.44 |
% |
|
2.16 |
% |
|
|
|
|
|
|
|
|
|
|
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 |
% |
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