New York Mortgage Trust Enters Into Definitive Agreement to Sell its Retail Mortgage Banking Platform Assets to IndyMac Bank, F.
February 07 2007 - 7:00AM
PR Newswire (US)
NEW YORK, Feb. 7 /PRNewswire-FirstCall/ -- New York Mortgage Trust,
Inc. (NYSE:NTR) ("NYMT" or the "Company") today announced that, as
a part of its previously announced exploration of its strategic
alternatives, it has entered into a definitive agreement to sell
certain assets of the retail mortgage banking platform of its
wholly owned taxable REIT subsidiary, The New York Mortgage
Company, LLC ("NYMC"), to IndyMac Bank, F.S.B., ("Indymac"), a
wholly owned subsidiary of IndyMac Bancorp, Inc. (NYSE:NDE), for an
estimated purchase price of approximately $13.4 million, which
includes an $8 million premium to the net book value of assets
being acquired. As part of the transaction, Indymac will purchase
substantially all of the operating assets related to NYMC's retail
mortgage banking platform, including use of The New York Mortgage
Company name, and assume certain liabilities of NYMC's retail
platform, including certain lease liabilities and obligations under
the pipeline of loan applications. Indymac will hire a majority of
NYMC employees and assume a portion of the retention and severance
expenses associated with the transaction. The transaction is
subject to customary closing requirements and is expected to close
by March 31, 2007, or earlier subject to the clearance of any
required regulatory approvals. As a part of this transaction,
IndyMac, the 2nd largest independent mortgage lender and 7th
largest savings and loan in the nation, will be acquiring 21 full
service and 11 satellite retail mortgage banking offices located in
11 states, including all branch employees and loan officers, as
well as the majority of employees at NYMC's corporate headquarters,
and NYMC's pipeline of mortgage applications in process at the time
of closing. This will represent IndyMac's largest growth initiative
in traditional retail mortgage banking to date. Steven B. Schnall,
Chairman, President and Co-CEO of NYMT, commented, "Due to the
persistence of the significant challenges facing the mortgage
industry, our Board of Directors has been engaged over the past
several months in confidential preliminary discussions with several
companies, a number of which expressed interest in acquiring some
or all of our organization. After an extensive review of our
strategic and financial alternatives, it was determined that the
sale of our retail and wholesale lending businesses is in the best
interest of our stockholders. We also feel that Indymac Bank is an
ideal acquirer of our retail platform, both culturally and
logistically, and that the transaction will create synergies by
combining our professional retail sales culture and exceptional
customer relationships with Indymac Bank's broader product mix and
greater scale. "By exiting and monetizing the value of our mortgage
lending businesses," Schnall continued, "we believe that New York
Mortgage Trust will accomplish several critical objectives,
including: (i) substantially reduce, and ultimately eliminate, the
taxable REIT subsidiary's operating losses, (ii) enable NYMC to
retain the economic value of its accumulated net operating losses,
(iii) appreciably increase NYMT's investable capital and financial
flexibility, (iv) lower NYMT's executive management compensation
expenses, (v) significantly reduce the Company's future potential
severance obligations, (vi) enable management to focus on its
mortgage portfolio management operations, which consisted of a $1.1
billion portfolio of investment securities as of December 31, 2006,
and (vii) better position NYMT should its Board of Directors
ultimately determine that a sale or merger of the entire
organization is in the best interest of its stockholders."
Management Reorganization NYMT also announced that upon closing,
Mr. Steven Schnall, NYMT's Chairman, Co-CEO and President and
NYMC's CEO and President, will resign his executive positions with
NYMT and NYMC, but will remain as non-executive Chairman of the
Board of NYMT. Upon closing, Mr. Schnall, 39, will be appointed
Executive Vice President of IndyMac Bank and CEO of The New York
Mortgage Company, a division of IndyMac. Mr. Steve Mumma, 48, a
member of NYMT's existing executive management team, will assume
the additional roles of President and Co-CEO. Mr. David Akre,
currently Vice Chairman and Co-CEO of NYMT, will remain in these
roles upon completion of this transaction. Mr. Joseph Fierro, COO
of NYMC, the Company's taxable REIT subsidiary, will also resign
his position with the company upon closing of the transaction. Mr.
Fierro, 46, will be appointed Senior Vice President of IndyMac Bank
and COO of The New York Mortgage Company, a division of Indymac
Bancorp, Inc. Commenting on the changes, David A. Akre, Vice
Chairman and Co-CEO of NYMT, noted, "We will truly miss Steve
Schnall as a member of our executive management team, yet we are
very pleased that he will continue to serve as Chairman of our
Board of Directors. Steve was an original founder of NYMC and NYMT
and his continued leadership on our board is both welcome and
invaluable. Joseph V. Fierro, NYMC's Chief Operating Officer and
co-founder, will also be missed. We wish them both well in their
new positions at IndyMac. Equally as important, we are very
fortunate to have Steve Mumma step into Steve Schnall's roles as
President and Co-CEO upon closing of this transaction." Financial
Considerations Upon closing, the transaction is anticipated to
result in net available proceeds to NYMT of approximately $12.1
million after fees and expenses, and before deduction of
approximately $2.3 million which will be held in escrow to support
warranties and indemnifications provided to IndyMac by NYMC as well
as other purchase price adjustments. New York Mortgage Trust
expects to redeploy the net proceeds in high quality mortgage loan
securities. NYMC expects to record a one time taxable gain on the
sale of these assets. NYMC's deferred tax asset will absorb any
taxable gain from sale. Following the sale, NYMC will retain and
liquidate its inventory of loans held for sale in the ordinary
course of business. NYMT's Board of Directors, together with its
management, will continue to consider strategic options for the
parent REIT, including a possible sale or merger of NYMT or raising
capital under a passive REIT business model. NYMC also announced
today that it intends to sell its wholesale lending business under
a separate agreement to another buyer. Milestone Advisors, LLC
acted as financial advisor and Hunton & Williams LLP served as
legal counsel to New York Mortgage Trust on this transaction. About
New York Mortgage Trust New York Mortgage Trust, Inc., a real
estate investment trust (REIT), is engaged in the origination of
and investment in residential mortgage loans throughout the United
States. The Company, through its wholly owned taxable REIT
subsidiary, The New York Mortgage Company, LLC ("NYMC"), originates
a broad spectrum of residential loan products with a focus on high
credit quality, or prime, loans. In addition to prime loans, NYMC
also originates jumbo loans, alternative-A loans, sub-prime loans
and home equity or second mortgage loans through its retail and
wholesale origination branch network. The Company's REIT portfolio
is comprised of securitized, high credit quality, adjustable and
hybrid ARM loans. As a REIT, the Company is not subject to federal
income tax provided that it distributes at least 90% of its REIT
taxable income to its stockholders. For more information about New
York Mortgage Trust please visit http://www.nymtrust.com/. About
Indymac Bank IndyMac Bancorp, Inc. (NYSE:NDE) (Indymac(R)) is the
holding Company for IndyMac Bank, F.S.B. (Indymac Bank(R)), the 7th
largest savings and loan and the 2nd largest independent mortgage
lender in the nation. Indymac Bank, operating as a hybrid
thrift/mortgage banker, provides cost-efficient financing for the
acquisition, development, and improvement of single-family homes.
Indymac also provides financing secured by single-family homes and
other banking products to facilitate consumers' personal financial
goals. With an increased focus on building customer relationships
and a valuable consumer franchise, Indymac is committed to becoming
a top six mortgage lender in the U.S. by 2010, while maintaining
annualized earnings per share growth in excess of 15 percent.
Indymac is dedicated to continually raising expectations and
conducting itself with the highest level of ethics. For more
information about Indymac and its affiliates, or to subscribe to
the Company's Email Alert feature for notification of Company news
and events, please visit http://about.indymacbank.com/investors.
Safe Harbor Regarding Forward-Looking Statements Certain statements
contained in this press release, including statements relating to
the proposed transaction with Indymac Bancorp and NYMT's strategic
options, may be deemed to be forward-looking statements that
predict or describe future events or trends. The matters described
in these forward- looking statements are subject to known and
unknown risks, uncertainties and other unpredictable factors, many
of which are beyond the Company's control. The Company faces many
risks that could cause its actual performance to differ materially
from the results predicted by its forward-looking statements,
including, without limitation, that the Company may fail to satisfy
all of the closing conditions pursuant to the Asset Purchase
Agreement, the possibilities that a rise in interest rates may
cause a decline in the market value of the Company's assets, a
decrease in the demand for mortgage loans may have a negative
effect on the Company's volume of closed loan originations,
prepayment rates may change, borrowings to finance the purchase of
assets may not be available on favorable terms, the Company may not
be able to maintain its qualification as a REIT for federal tax
purposes, the Company may experience the risks associated with
investing in real estate, including changes in business conditions
and the general economy, and the Company's hedging strategies may
not be effective. The reports that the Company files with the
Securities and Exchange Commission contain a fuller description of
these and many other risks to which the Company is subject. Because
of those risks, the Company's actual results, performance or
achievements may differ materially from the results, performance or
achievements contemplated by its forward-looking statements. The
information set forth in this news release represents management's
current expectations and intentions. The Company assumes no
responsibility to issue updates to the forward-looking matters
discussed in this press release. DATASOURCE: New York Mortgage
Trust, Inc. CONTACT: Steven R. Mumma, Chief Financial Officer, New
York Mortgage Trust, +1-212-634-2411, ; Joe Calabrese - General,
+1-212-827-3772, or Julie Tu - Analysts, +1-212-827-3776, both of
Financial Relations Board, for New York Mortgage Trust Web site:
http://www.nymtrust.com/ http://about.indymacbank.com/investors
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