Company Substantially Completes Transition to Passive REIT NEW
YORK, Aug. 6 /PRNewswire-FirstCall/ -- New York Mortgage Trust,
Inc. (NYSE:NTR), a self-advised real estate investment trust (REIT)
engaged in the investment in and management of high credit quality
residential adjustable rate mortgage (ARM) loans and
mortgage-backed securities (MBS), today reported results for its
second quarter ended June 30, 2007. Highlights: -- 98% of the
mortgage backed securities portfolio is either Agency or "AAA"
rated. -- As of June 30, 2007, the loans held in securitization
trusts that were 60-days or more delinquent totaled 1.38%; total
delinquencies were 1.60%. -- Consolidated net loss of $14.2
million, or $0.79 per share, for the quarter ended June 30, 2007,
as compared to net income of $0.2 million, or $0.01 per share for
the quarter ending June 30, 2006. -- Of the $14.2 million net loss
incurred for the quarter ended June 30, 2007, $9.0 million relates
to losses from the discontinued mortgage lending operations, and
$3.8 million relates to a portfolio impairment charge. -- Portfolio
margin increased to 12 basis points as of June 30, 2007 compared
with 2 basis points for the quarter ending March 31, 2007. --
Portfolio restructured subsequent to June 30, 2007; $231.8 million
of lower yielding private label MBS sold and replaced with $182.4
million of MBS floating rate securities increasing net coupon by 30
basis points. -- 52% of all repurchase demands settled, 42% being
negotiated; all remaining demands reserved. -- Book value per share
of $3.07 which includes $1.01 per share relating to the net
deferred tax-asset. Comments from Management David Akre, Vice
Chairman and Co-Chief Executive Officer of the Company, commented,
"Our financial results for the quarter ended June 30, 2007 are
reflective of the important, but difficult, steps we have taken in
our transition to a passive REIT model as well as the challenging
market conditions facing the mortgage industry. The Company no
longer originates mortgage loans, maintains lending warehouse
lines, or is subject to mortgage banking regulatory oversight. Of
the steps we have taken, one of the most important has been
addressing the repurchase requests related to our discontinued
mortgage lending business. Through proactive negotiations, we have
reduced the outstanding repurchase requests for mortgage loans from
approximately $25.2 million to approximately $12.1 million. Of the
remaining repurchase requests, we are in active negotiations with
respect to $10.5 million. The resolution of these repurchase
requests relieves the Company of substantially all future
repurchase obligations. These steps, along with others taken in the
second quarter, have been difficult, but should increase stability
and foster long term growth in the coming quarters." Mr. Akre
added, "Our focus going forward is to prudently grow the portfolio
and implement our portfolio strategy." Steve Mumma, Co-Chief
Executive Officer, President and Chief Financial Officer of the
Company, stated "The second quarter results were driven by costs
associated with the discontinued mortgage lending business. The
second quarter loss from discontinued operations was larger than
anticipated due to deteriorating market conditions. Specifically,
the Company incurred $5.1 million in loan losses, $1.8 million in
additional expense reserves for residual liabilities and $2.1 in
operating losses. As of June 30, 2007, the Company has sold a
significant portion of the mortgage loans held for sale and
established reserves for loan losses and expenses to cover the
remaining anticipated costs." "In the quarter ended June 30, 2007,
we determined that certain lower yielding private label MBS would
be sold and replaced with floating rate Agency securities. As a
result of this determination, the Company incurred an impairment
charge of $3.8 million. In July, the Company sold $231.8 million of
lower yielding private label MBS and purchased $182.4 million of
floating rate securities, of which $157.4 million are Agency
securities, resulting in an increase in overall portfolio spread of
30 basis points and improved liquidity for financing purposes."
"The reduction of staffing to 12 employees as of June 30, 2007, as
well as transitioning to a passive REIT, has reduced our expense
base going forward. With improved portfolio spreads and reduced
operating overhead, we believe the Company is positioned for
improved results going forward." Results from Operations For the
second quarter of 2007, the Company reported a consolidated net
loss of $14.2 million, or $0.79 per share. This compares to a net
loss of $4.7 million, or $0.26 per share, for the immediate
preceding quarter ended March 31, 2007 and net income of $0.2
million, or $0.01 per share, for the quarter ended June 30, 2006.
The $14.2 million loss for the quarter ended June 30, 2007 was
comprised of a $5.2 million loss from the continuing operations and
a $9.0 million loss from discontinued mortgage lending operations.
The $5.2 million loss from continuing operations for the quarter
ended June 30, 2007 included a permanent impairment charge of $3.8
million related the Company's determination to sell $231.8 million
of lower yielding non- Agency MBS. The impairment charge, while
lowering earnings by $3.8 million, did not reduce the book value of
the Company as the charge was previously reflected as an adjustment
in the Other Comprehensive Income section of the Balance Sheet.
Also, the Company reserved $0.9 million for potential loan losses
for the loans held in securitization trust. Included in the $9.0
million loss for the discontinued mortgage lending operations was a
$5.1 million charge for loan losses, $1.8 million in additional
expense reserves for residual liabilities and $2.1 in operating
losses. Book value per share for the quarter ended June 30, 2007
was $3.07 per share, including $1.01 per share in net deferred
tax-asset. The net deferred tax asset remains unchanged from the
quarter ended March 31, 2007. As of June 30, 2007, mortgage loans
held for sale totaled $10.0 million as compared to $60.9 million as
of March 31, 2007. Of the remaining $10.0 million of loans held for
sale, the Company intends to keep $6.2 million of high quality
hybrid prime ARMs in its investment portfolio. The Company has
reserved $1.6 million on the remaining $3.8 million of mortgage
loans held for sale. The Company's employee headcount as of June
30, 2007 was 12, down from 35 as of March 31, 2007 and 616 as of
December 31, 2006. The vast majority of the Company's employee
headcount at December 31, 2006 were employees of the Company's now
discontinued mortgage lending operations. As previously announced
the Company completed the sale of substantially all of the assets
of its retail mortgage lending operations on March 31, 2007 and
exited the mortgage lending business. Portfolio Results The
following table summarizes the Company's investment portfolio of
residential mortgage-backed securities and loans owned at June 30,
2007, classified by relevant categories: (dollars in thousands)
Carrying Par Value Coupon Value Yield Agency REMIC floaters
$187,147 6.53% $187,472 6.51% Private label floaters 5,595 6.18%
5,583 6.22% Private label ARMs 244,911 4.79% 242,622 6.00% NYMT
retained securities 20,449 5.74% 19,258 7.44% Total mortgage backed
securities 458,102 5.56% 454,935 6.27% Loans held in securitization
trusts 502,222 5.63% 504,522 5.81% Total/Weighted Average $960,324
5.60% $959,457 6.03% -- 98% of the mortgage backed securities
portfolio is either Agency or "AAA" rated. -- As of June 30, 2007,
the loans held in securitization trusts that were 60-days or more
delinquent totaled 1.38%; total delinquencies were 1.60%. The
Company reserved $0.9 million for loan losses on these delinquent
loans. -- Subsequent to June 30, 2007, the Company sold
approximately $231.8 in lower yielding private label ARMs. The
Company purchased approximately $157.4 million in Agency REMIC
floaters resulting in a weighted average coupon increase for the
total portfolio of 30 basis points. Repurchase Demands Repurchase
demands increased during the quarter ended June 30, 2007 to a total
of $25.2 million from $14.3 million for the quarter ended March 31,
2007. As of August 6, 2007 approximately 52% of all repurchase
demands outstanding have been settled with the investors and will
not require the Company to repurchase the loans. These cash settled
negotiated amounts relieve the Company of substantially all future
claims against the Company. Dividend Declaration On July 3, 2007,
the Company's Board of Directors announced its decision to omit a
dividend for the quarter ending June 30, 2007. The Board's decision
reflected the Company's focus on elimination of operating losses
through the sale of its mortgage lending business and conserving
capital to build future earnings from its mortgage portfolio
operations. The Company reevaluates its dividend policy each
quarter and makes adjustments as necessary based on a variety of
factors, including future earnings projections. Investors are
advised that the Company's earnings projections are based on a
number of operational, financial and market assumptions, and if
such assumptions do not materialize, the Company may not be able to
maintain its dividend policy. In addition to such assumptions, the
Company's dividend policy is subject to its Board of Directors
approval and ongoing review, which includes, but is not limited to,
considerations such as the Company's financial condition,
liquidity, earnings projections and business prospects. The
dividend policy does not constitute an obligation to pay dividends,
which only occurs when the Board of Directors declares a dividend.
Conference Call On Tuesday August 7, 2007 at 9:00 a.m. Eastern
Time, New York Mortgage Trust's executive management is scheduled
to host a conference call and audio webcast highlighting the
Company's second quarter 2007 financial results. The conference
call dial-in number is 303-262-2004. A live audio webcast of the
conference call can be accessed via the Internet, on a listen-only
basis, at http://www.earnings.com/ or at the Investor Relations
section of 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. The online archive of the webcast will be available for
approximately 90 days. Second quarter 2007 financial and operating
data can be viewed in the Company's Quarterly Report on Form 10-Q,
which is expected to be filed Thursday August 9, 2007. About New
York Mortgage Trust New York Mortgage Trust, Inc., a self-advised
real estate investment trust (REIT), is engaged in the investment
in and management of high credit quality residential adjustable
rate mortgage (ARM) loans and mortgage-backed securities (MBS). As
of March 31, 2007, the Company has exited the mortgage lending
business. The Company's portfolio is comprised of securitized, high
credit quality, adjustable and hybrid ARM loans, and purchased MBS.
Historically at least 98% of the portfolio has been rated "AA" or
"AAA". As a REIT, the Company is not subject to federal income tax
provided that it distributes at least 90% of its REIT income to
stockholders. Certain statements contained in this press release
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 a rise in interest rates may cause a
decline in the market value of the Company's assets, prepayment
rates that may change, borrowings to finance the purchase of assets
may not be available or 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 mortgage loans, including changes in
loan delinquencies, 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. NEW YORK MORTGAGE TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (dollar amounts in thousands,
except per share data) (unaudited) For the Six For the Three Months
Ended Months Ended June 30, June 30, 2007 2006 2007 2006 REVENUE:
Interest income investment securities and loans held in
securitization trusts $26,611 $33,052 $12,898 $15,468 Interest
expense investment securities and loans held in securitization
trusts 24,976 26,438 11,892 12,359 Net interest income from
investment securities and loans held in securitization trusts 1,635
6,614 1,006 3,109 Subordinated debentures 1,776 1,779 894 894 Net
interest (loss) income (141) 4,835 112 2,215 OTHER EXPENSE:
Realized loss on sale of investment securities -- (969) -- -- Loss
on other-than-temporary impaired securities (3,821) -- (3,821) --
Loan loss reserve on loans held in securitization trusts (940) --
(940) -- Total other expenses (4,761) (969) (4,761) -- EXPENSES:
Salaries and benefits 496 452 151 202 Marketing and promotion 62 34
39 26 Data processing and communications 93 119 56 63 Professional
fees 205 365 105 271 Depreciation and amortization 149 127 81 60
Other 171 223 97 136 Total expenses 1,176 1,320 529 758 (LOSS)
INCOME FROM CONTINUING OPERATIONS (6,078) 2,546 (5,178) 1,457 Loss
from discontinued operation - net of tax (12,859) (4,164) (9,018)
(1,279) NET (LOSS) INCOME $(18,937) $(1,618) $(14,196) $178 Basic
(loss) income per share $(1.05) $(0.09) $(0.79) $0.01 Diluted
(loss) income per share $(1.05) $(0.09) $(0.79) $0.01 Weighted
average shares outstanding-basic 18,096 17,950 18,113 17,933
Weighted average shares outstanding- diluted 18,096 17,950 18,113
18,296 NEW YORK MORTGAGE TRUST, INC. AND SUBSIDIARIES CONSOLIDATED
BALANCE SHEETS (dollar amounts in thousands) June 30, December 31,
2007 2006 (unaudited) ASSETS Cash and cash equivalents $1,883 $969
Restricted cash 4,198 3,151 Investment securities - available for
sale 454,935 488,962 Accounts and accrued interest receivable 4,528
5,189 Mortgage loans held in securitization trusts 504,522 588,160
Prepaid and other assets 20,343 20,951 Derivative assets 2,486
2,632 Property and equipment (net) 89 -- Assets related to
discontinued operation 11,700 212,894 Total Assets $1,004,684
$1,322,908 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities:
Financing arrangements, portfolio investments $423,741 $815,313
Collateralized debt obligations 465,761 197,447 Accounts payable
and accrued expenses 5,139 5,871 Subordinated debentures 45,000
45,000 Liabilities related to discontinued operation 9,317 187,705
Total liabilities $948,958 $1,251,336 Commitments and Contingencies
Stockholders' Equity: Common stock, $0.01 par value, 400,000,000
shares authorized, 18,179,271 shares issued and outstanding at June
30, 2007 and 18,325,187 shares issued and 18,077,880 outstanding at
December 31, 2006 182 183 Additional paid-in capital 99,068 99,509
Accumulated other comprehensive loss (848) (4,381) Accumulated
deficit (42,676) (23,739) Total stockholders' equity 55,726 71,572
Total Liabilities and Stockholders' Equity $1,004,684 $1,322,908
DATASOURCE: New York Mortgage Trust, Inc. CONTACT: Steven R. Mumma,
Co-CEO, President, Chief Financial Officer of New York Mortgage
Trust, Inc., +1-212-634-2411, ; or 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, Inc. Web
site: http://www.nymtrust.com/
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