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New York Mortgage Trust Reports Second Quarter 2022 Results

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New York Mortgage Trust, Inc.
New York Mortgage Trust, Inc.

NEW YORK, Aug. 02, 2022 (GLOBE NEWSWIRE) -- New York Mortgage Trust, Inc. (Nasdaq: NYMT) (“NYMT,” the “Company,” “we,” “our” or “us”) today reported results for the three months ended June 30, 2022.

Summary of Second Quarter 2022:
(dollar amounts in thousands, except per share data)

Net loss attributable to Company's common stockholders

$

(82,389

)

Net loss attributable to Company's common stockholders per share (basic)

$

(0.22

)

Undepreciated loss (1)

$

(49,170

)

Undepreciated loss per common share (1)

$

(0.13

)

Comprehensive loss attributable to Company's common stockholders

$

(82,924

)

Comprehensive loss attributable to Company's common stockholders per share (basic)

$

(0.22

)

Yield on average interest earning assets

 

6.69

%

Interest income

$

68,020

 

Interest expense

$

41,891

 

Net interest income

$

26,129

 

Portfolio net interest income (1)

$

41,437

 

Portfolio net interest margin (2)

 

3.48

%

Book value per common share at the end of the period

$

4.06

 

Undepreciated book value per common share at the end of the period (1)

$

4.24

 

Economic return on book value (3)

 

(4.59

)%

Economic return on undepreciated book value (4)

 

(2.47

)%

Dividends per common share

$

0.10

 


(1)

Represents a non-GAAP financial measure. A reconciliation of the Company's non-GAAP financial measures to their most directly comparable GAAP measure is included below in "Reconciliation of Financial Information."

(2)

Excludes interest expense generated by our subordinated debentures, convertible notes, senior unsecured notes and mortgages payable on real estate. Our calculation of portfolio net interest margin may not be comparable to similarly-titled measures of other companies who may use a different calculation.

(3)

Economic return on book value is based on the periodic change in GAAP book value per common share plus dividends declared per common share, if any, during the period.

(4)

Economic return on undepreciated book value is based on the periodic change in undepreciated book value per common share, a non-GAAP financial measure, plus dividends declared per common share, if any, during the period.

Key Developments:

Investing Activities

  • Purchased approximately $773.6 million in residential loans and $59.5 million in single-family rental properties.

  • Funded multi-family joint venture investments for approximately $57.1 million and received approximately $11.0 million in proceeds from redemptions of Mezzanine Lending investments.

Financing Activities

  • Obtained $876.4 million of financing for residential loans through recourse and non-recourse repurchase agreements with new and existing counterparties.

  • Repurchased 2.8 million shares of common stock at an average repurchase price of $2.69 per share.

Subsequent Developments:

  • Subsequent to quarter end, repurchased an additional 0.9 million shares of common stock at an average repurchase price of $2.73 per share.

Management Overview

Jason Serrano, Chief Executive Officer and President, commented: "Despite historical levels of volatility that challenged the markets in the second quarter, the Company was able to limit the decline in its undepreciated book value to 4.7%. The bid for duration remains thin as buyers seemed to wait out the market as spreads moved wider each month during the quarter. Our increasing allocation to BPL bridge loans over the past year and a half combined with our holding recourse leverage below 1x has enabled our balance sheet to demonstrate resiliency through a rapidly rising interest rate environment.

Against conforming mortgage rates, which ended the second quarter just below 6%, housing fundamentals have exhibited continued strength after several months of historic price and rent growth, particularly in southern markets. However, the market is clearly undergoing a seismic opportunity shift ushering in a new paradigm. The premium priced loan markets that we saw earlier in the year, largely due to remarkably efficient financing, are no longer the norm. Today’s inefficient securitization financing markets combined with markedly reduced loan demand will provide new opportunities to take advantage of wider spreads.

We have patiently positioned the Company’s balance sheet for high asset rotation and largely avoided vertical integration asset strategies that depend on consistent financing availability. Because of this, we are able to focus on secondary market investments without concern for the uncertainty of managing operating costs associated with an origination business. We believe there is an extraordinary opportunity for us in the current environment to create long-term value for our stockholders and we are energized to unlock that value behind our highly experienced asset management team."

Capital Allocation

The following tables set forth, by investment category, our allocated capital at June 30, 2022, our portfolio interest income, portfolio interest expense and portfolio net interest income, and the average yield, average portfolio financing cost and portfolio net interest margin for our average interest earning assets for the three months ended June 30, 2022 (dollar amounts in thousands):

 

Single-Family (1)

 

Multi-
Family

 

Other

 

Total

Residential loans

$

4,329,192

 

 

$

 

 

$

 

 

$

4,329,192

 

Consolidated SLST CDOs

 

(710,233

)

 

 

 

 

 

 

 

 

(710,233

)

Multi-family loans

 

 

 

 

106,825

 

 

 

 

 

 

106,825

 

Investment securities available for sale

 

74,822

 

 

 

30,096

 

 

 

35,588

 

 

 

140,506

 

Equity investments

 

 

 

 

189,773

 

 

 

33,878

 

 

 

223,651

 

Equity investments in consolidated multi-family properties (2)

 

 

 

 

387,797

 

 

 

 

 

 

387,797

 

Single-family rental properties

 

142,848

 

 

 

 

 

 

 

 

 

142,848

 

Total investment portfolio carrying value

 

3,836,629

 

 

 

714,491

 

 

 

69,466

 

 

 

4,620,586

 

Liabilities:

 

 

 

 

 

 

 

Repurchase agreements

 

(1,678,195

)

 

 

(15,681

)

 

 

 

 

 

(1,693,876

)

Residential loan securitization CDOs

 

(1,107,091

)

 

 

 

 

 

 

 

 

(1,107,091

)

Senior unsecured notes

 

 

 

 

 

 

 

(97,039

)

 

 

(97,039

)

Subordinated debentures

 

 

 

 

 

 

 

(45,000

)

 

 

(45,000

)

Cash, cash equivalents and restricted cash (3)

 

141,689

 

 

 

 

 

 

369,679

 

 

 

511,368

 

Other

 

(44,898

)

 

 

(6,253

)

 

 

(44,806

)

 

 

(95,957

)

Net Company capital allocated

$

1,148,134

 

 

$

692,557

 

 

$

252,300

 

 

$

2,092,991

 

 

 

 

 

 

 

 

 

 

 

Company Recourse Leverage Ratio (4)

 

 

 

 

 

 

 

0.7

x

Portfolio Recourse Leverage Ratio (5)

 

 

 

 

 

 

 

0.6

x


(1)

The Company, through its ownership of certain securities, has determined it is the primary beneficiary of Consolidated SLST and has consolidated the assets and liabilities of Consolidated SLST in the Company’s condensed consolidated financial statements. Consolidated SLST is primarily presented on our condensed consolidated balance sheets as residential loans, at fair value and collateralized debt obligations, at fair value. Our investment in Consolidated SLST as of June 30, 2022 was limited to the RMBS comprised of first loss subordinated securities and IOs issued by the securitization with an aggregate net carrying value of $208.6 million.

(2)

Represents the Company's equity investments in consolidated multi-family apartment communities. A reconciliation of the Company's equity investments in consolidated multi-family properties to the condensed consolidated financial statements is included below in "Reconciliation of Financial Information."

(3)

Excludes cash in the amount of $38.2 million and restricted cash in the amount of $2.1 million held in the Company's equity investments in consolidated multi-family properties. Restricted cash is included in the Company’s accompanying condensed consolidated balance sheets in other assets.

(4)

Represents the Company's total outstanding recourse repurchase agreement financing, subordinated debentures and senior unsecured notes divided by the Company's total stockholders' equity. Does not include repurchase agreement financing amounting to $400.8 million, Consolidated SLST CDOs amounting to $710.2 million, residential loan securitization CDOs amounting to $1.1 billion and mortgages payable on real estate amounting to $1.3 billion as they are non-recourse debt.

(5)

Represents the Company's outstanding recourse repurchase agreement financing divided by the Company’s total stockholders’ equity.


Portfolio Net Interest Income - Three Months Ended June 30, 2022:

Single-Family (8)

 

Multi-
Family

 

Other

 

Total

Portfolio Interest Income (1)(2)

$

56,260

 

 

$

3,258

 

 

$

2,294

 

 

$

61,812

 

Portfolio Interest Expense (1)

 

(20,264

)

 

 

(111

)

 

 

 

 

 

(20,375

)

Portfolio Net Interest Income (1)

$

35,996

 

 

$

3,147

 

 

$

2,294

 

 

$

41,437

 

 

 

 

 

 

 

 

 

Portfolio Net Interest Margin - Three Months Ended June 30, 2022:

 

 

 

 

 

 

 

Average Interest Earning Assets (3)

$

3,535,569

 

 

$

137,333

 

 

$

21,177

 

 

$

3,694,079

 

Average Interest Bearing Liabilities (4)

$

2,498,132

 

 

$

16,591

 

 

 

 

 

$

2,514,723

 

 

 

 

 

 

 

 

 

Yield on Average Interest Earning Assets (5)

 

6.37

%

 

 

9.49

%

 

 

43.33

%

 

 

6.69

%

Average Portfolio Financing Cost (6)

 

(3.21

)%

 

 

(2.65

)%

 

 

 

 

 

(3.21

)%

Portfolio Net Interest Margin (7)

 

3.16

%

 

 

6.84

%

 

 

43.33

%

 

 

3.48

%


(1)

Represents a non-GAAP financial measure. A reconciliation of the Company's non-GAAP financial measures to their most directly comparable GAAP measure is included below in "Reconciliation of Financial Information."

(2)

Includes interest income earned on cash accounts held by the Company.

(3)

Average Interest Earning Assets is calculated based on the daily average amortized cost for the respective periods and excludes all Consolidated SLST assets other than those securities owned by the Company.

(4)

Average Interest Bearing Liabilities is calculated each quarter based on the daily average outstanding balance for the respective periods and excludes our Consolidated SLST CDOs, subordinated debentures, convertible notes, senior unsecured notes and mortgages payable on real estate as these liabilities do not directly and exclusively finance our interest earning assets.

(5)

Yield on Average Interest Earning Assets is calculated by dividing our annualized portfolio interest income (a supplemental non-GAAP financial measure) relating to our interest earning assets by our Average Interest Earning Assets for the respective periods.

(6)

Average Portfolio Financing Cost is calculated by dividing our annualized portfolio interest expense (a supplemental non-GAAP financial measure) by our Average Interest Bearing Liabilities.

(7)

Portfolio Net Interest Margin is the difference between our Yield on Average Interest Earning Assets and our Average Portfolio Financing Cost.

(8)

The Company, through its ownership of certain securities, has determined it is the primary beneficiary of Consolidated SLST and has consolidated the assets and liabilities of Consolidated SLST in the Company’s condensed consolidated financial statements. Portfolio interest income amounts represent interest income earned by securities that are owned by the Company. A reconciliation of portfolio net interest income from the Single-Family portfolio to the condensed consolidated financial statements is included below in "Reconciliation of Financial Information."

Conference Call

On Wednesday, August 3, 2022 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, 2022. To access the conference call, please pre-register using this link. Registrants will receive confirmation with dial-in details. A live audio webcast of the conference call can be accessed via the Internet, on a listen-only basis, at the Investor Relations section of the Company's website at http://www.nymtrust.com or using this link. Please allow extra time, prior to the call, to visit the site and download the necessary software to listen to the Internet broadcast. A webcast replay link of the conference call will be available on the Investor Relations section of the Company’s website approximately two hours after the call and will be available for 12 months.

In connection with the release of these financial results, the Company will also post a supplemental financial presentation that will accompany the conference call on its website at http://www.nymtrust.com under the "Investors — Events and Presentations" section. Second quarter 2022 financial and operating data can be viewed in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, which is expected to be filed with the Securities and Exchange Commission on or about August 4, 2022. 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 (“REIT”) for federal income tax purposes. NYMT is an internally managed REIT in the business of acquiring, investing in, financing and managing primarily mortgage-related single-family and multi-family residential assets, including joint venture equity investments in multi-family apartment communities. 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 that may appear in this press release: “RMBS” refers to residential mortgage-backed securities backed by adjustable-rate, hybrid adjustable-rate, or fixed-rate residential loans; “Agency RMBS” refers to RMBS representing interests in or obligations backed by pools of residential loans 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; “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; “POs” refers to mortgage-backed securities that represent the right to the principal component of the cash flow from a pool of mortgage loans; “CMBS” refers to commercial mortgage-backed securities comprised of commercial mortgage pass-through securities issued by a GSE, 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; “CDO” refers to collateralized debt obligation and includes debt that permanently finances the residential loans held in Consolidated SLST, the Company's residential loans held in securitization trusts and a non-Agency RMBS re-securitization that we consolidate or consolidated in our financial statements in accordance with GAAP; “Consolidated SLST” refers to a Freddie Mac-sponsored residential loan securitization, comprised of seasoned re-performing and non-performing residential loans, of which we own the first loss subordinated securities and certain IOs, that we consolidate in our financial statements in accordance with GAAP; “Consolidated VIEs” refers to variable interest entities ("VIE") where the Company is the primary beneficiary, as it has both the power to direct the activities that most significantly impact the economic performance of the VIE and a right to receive benefits or absorb losses of the entity that could be potentially significant to the VIE and that we consolidate in our financial statements in accordance with GAAP; “Multi-Family” portfolio includes multi-family CMBS, preferred equity and mezzanine loan investments and certain equity investments that invest in multi-family assets, including joint venture equity investments; “Single-Family” portfolio includes residential loans, Agency RMBS, non-Agency RMBS and single-family rental properties; and “Other” portfolio includes ABS and equity investments in entities that invest in residential assets or originate residential loans.

Cautionary Statement Regarding Forward-Looking Statements

When used in this press release, in future filings with the Securities and Exchange Commission (the “SEC”) or in other written or oral communications, statements which are not historical in nature, including those containing words such as “will,” “believe,” “expect,” “anticipate,” “estimate,” “plan,” “continue,” “intend,” “could,” “would,” “should,” “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 (the “Exchange Act”), and, as such, may involve known and unknown risks, uncertainties and assumptions.

Forward-looking statements are based on estimates, projections, beliefs and assumptions of management of the Company at the time of such statements and are not guarantees of future performance. Forward-looking statements involve risks and uncertainties in predicting future results and conditions. Actual results and outcomes could differ materially from those projected in these forward-looking statements due to a variety of factors, including, without limitation: changes in the Company’s business and investment strategy; changes in interest rates and the fair market value of the Company’s assets, including negative changes resulting in margin calls relating to the financing 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; general volatility of the markets in which the Company invests; changes in prepayment rates on the loans the Company owns or that underlie the Company’s investment securities; increased rates of default, delinquency or vacancy and/or decreased recovery rates on or at the Company’s assets; the Company’s ability to identify and acquire targeted assets, including assets in its investment pipeline; changes in relationships with the Company’s financing counterparties and the Company’s ability to borrow to finance its assets and the terms thereof; changes in our relationships with and/or the performance of our operating partners; the Company’s ability to predict and control costs; changes in laws, regulations or policies affecting the Company’s business, including actions that may be taken to contain or address the impact of the COVID-19 pandemic; the Company’s ability to make distributions to its stockholders in the future; 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; risks associated with investing in real estate assets, including changes in business conditions and the general economy, the availability of investment opportunities and the conditions in the market for Agency RMBS, non-Agency RMBS, ABS and CMBS securities, residential loans, structured multi-family investments and other mortgage-, residential housing- and credit-related assets; and the impact of COVID-19 on the Company, its operations and its personnel.

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 the Company 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

 

Phone: 212-792-0107

 

Email: InvestorRelations@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, 2022

 

December 31, 2021

 

(unaudited)

 

 

ASSETS

 

 

 

Residential loans, at fair value

$

4,329,192

 

 

$

3,575,601

 

Multi-family loans, at fair value

 

106,825

 

 

 

120,021

 

Investment securities available for sale, at fair value

 

140,506

 

 

 

200,844

 

Equity investments, at fair value

 

223,651

 

 

 

239,631

 

Cash and cash equivalents

 

407,104

 

 

 

289,602

 

Real estate, net

 

1,792,320

 

 

 

1,017,583

 

Other assets

 

299,938

 

 

 

215,019

 

Total Assets (1)

$

7,299,536

 

 

$

5,658,301

 

LIABILITIES AND EQUITY

 

 

 

Liabilities:

 

 

 

Repurchase agreements

$

1,693,876

 

 

$

554,259

 

Collateralized debt obligations ($710,233 at fair value and $1,107,091 at amortized cost, net as of June 30, 2022 and $839,419 at fair value and $682,802 at amortized cost, net as of December 31, 2021)

 

1,817,324

 

 

 

1,522,221

 

Convertible notes

 

 

 

 

137,898

 

Senior unsecured notes

 

97,039

 

 

 

96,704

 

Subordinated debentures

 

45,000

 

 

 

45,000

 

Mortgages payable on real estate, net

 

1,251,059

 

 

 

709,356

 

Other liabilities

 

231,066

 

 

 

161,081

 

Total liabilities (1)

 

5,135,364

 

 

 

3,226,519

 

 

 

 

 

Commitments and Contingencies

 

 

 

 

 

 

 

Redeemable Non-Controlling Interest in Consolidated Variable Interest Entities

 

37,101

 

 

 

66,392

 

 

 

 

 

Stockholders' Equity:

 

 

 

Preferred stock, par value $0.01 per share, 31,500,000 and 29,500,000 shares authorized as of June 30, 2022 and December 31, 2021, respectively, 22,284,994 shares issued and outstanding ($557,125 aggregate liquidation preference)

 

538,221

 

 

 

538,221

 

Common stock, par value $0.01 per share, 800,000,000 shares authorized, 378,647,371 and 379,405,240 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively

 

3,786

 

 

 

3,794

 

Additional paid-in capital

 

2,354,377

 

 

 

2,356,576

 

Accumulated other comprehensive (loss) income

 

(945

)

 

 

1,778

 

Accumulated deficit

 

(802,448

)

 

 

(559,338

)

Company's stockholders' equity

 

2,092,991

 

 

 

2,341,031

 

Non-controlling interest in consolidated variable interest entities

 

34,080

 

 

 

24,359

 

Total equity

 

2,127,071

 

 

 

2,365,390

 

Total Liabilities and Equity

$

7,299,536

 

 

$

5,658,301

 


(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, 2022 and December 31, 2021, assets of consolidated VIEs totaled $3,952,609 and $2,940,513, respectively, and the liabilities of consolidated VIEs totaled $3,141,474 and $2,235,665, respectively.



NEW YORK MORTGAGE TRUST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
(unaudited)

 

For the Three Months Ended
June 30,

 

For the Six Months Ended
June 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

NET INTEREST INCOME:

 

 

 

 

 

 

 

Interest income

$

68,020

 

 

$

52,186

 

 

$

126,521

 

 

$

102,225

 

Interest expense

 

41,891

 

 

 

20,711

 

 

 

70,513

 

 

 

40,410

 

Total net interest income

 

26,129

 

 

 

31,475

 

 

 

56,008

 

 

 

61,815

 

 

 

 

 

 

 

 

 

NON-INTEREST (LOSS) INCOME:

 

 

 

 

 

 

 

Realized gains, net

 

2,386

 

 

 

4,989

 

 

 

6,192

 

 

 

12,047

 

Unrealized (losses) gains, net

 

(67,694

)

 

 

23,854

 

 

 

(151,353

)

 

 

50,020

 

Income from equity investments

 

8,100

 

 

 

10,607

 

 

 

14,153

 

 

 

14,006

 

Income from real estate

 

35,870

 

 

 

2,150

 

 

 

61,458

 

 

 

3,645

 

Other income

 

1,105

 

 

 

1,676

 

 

 

2,531

 

 

 

3,278

 

Total non-interest (loss) income

 

(20,233

)

 

 

43,276

 

 

 

(67,019

)

 

 

82,996

 

 

 

 

 

 

 

 

 

GENERAL, ADMINISTRATIVE AND OPERATING EXPENSES:

 

 

 

 

 

 

 

General and administrative expenses

 

13,175

 

 

 

12,520

 

 

 

27,533

 

 

 

23,961

 

Expenses related to real estate

 

70,759

 

 

 

3,913

 

 

 

118,748

 

 

 

6,837

 

Portfolio operating expenses

 

12,690

 

 

 

6,688

 

 

 

22,179

 

 

 

11,518

 

Total general, administrative and operating expenses

 

96,624

 

 

 

23,121

 

 

 

168,460

 

 

 

42,316

 

 

 

 

 

 

 

 

 

(LOSS) INCOME FROM OPERATIONS BEFORE INCOME TAXES

 

(90,728

)

 

 

51,630

 

 

 

(179,471

)

 

 

102,495

 

Income tax expense

 

90

 

 

 

15

 

 

 

67

 

 

 

81

 

 

 

 

 

 

 

 

 

NET (LOSS) INCOME

 

(90,818

)

 

 

51,615

 

 

 

(179,538

)

 

 

102,414

 

Net loss attributable to non-controlling interest in consolidated variable interest entities

 

18,922

 

 

 

1,625

 

 

 

33,792

 

 

 

3,034

 

NET (LOSS) INCOME ATTRIBUTABLE TO COMPANY

 

(71,896

)

 

 

53,240

 

 

 

(145,746

)

 

 

105,448

 

Preferred stock dividends

 

(10,493

)

 

 

(10,296

)

 

 

(20,986

)

 

 

(20,593

)

NET (LOSS) INCOME ATTRIBUTABLE TO COMPANY'S COMMON STOCKHOLDERS

$

(82,389

)

 

$

42,944

 

 

$

(166,732

)

 

$

84,855

 

 

 

 

 

 

 

 

 

Basic (loss) earnings per common share

$

(0.22

)

 

$

0.11

 

 

$

(0.44

)

 

$

0.22

 

Diluted (loss) earnings per common share

$

(0.22

)

 

$

0.11

 

 

$

(0.44

)

 

$

0.22

 

Weighted average shares outstanding-basic

 

381,200

 

 

 

379,299

 

 

 

380,999

 

 

 

379,091

 

Weighted average shares outstanding-diluted

 

381,200

 

 

 

381,517

 

 

 

380,999

 

 

 

381,167

 


NEW YORK MORTGAGE TRUST, INC. AND SUBSIDIARIES
SUMMARY OF QUARTERLY (LOSS) EARNINGS
(Dollar amounts in thousands, except per share data)
(unaudited)

 

For the Three Months Ended

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

Interest income

$

68,020

 

 

$

58,501

 

 

$

52,318

 

 

$

52,323

 

 

$

52,186

 

Interest expense

 

41,891

 

 

 

28,622

 

 

 

21,546

 

 

 

21,292

 

 

 

20,711

 

Total net interest income

 

26,129

 

 

 

29,879

 

 

 

30,772

 

 

 

31,031

 

 

 

31,475

 

Total non-interest (loss) income

 

(20,233

)

 

 

(46,784

)

 

 

39,333

 

 

 

49,412

 

 

 

43,276

 

Total general, administrative and operating expenses

 

96,624

 

 

 

71,836

 

 

 

34,063

 

 

 

28,046

 

 

 

23,121

 

(Loss) income from operations before income taxes

 

(90,728

)

 

 

(88,741

)

 

 

36,042

 

 

 

52,397

 

 

 

51,630

 

Income tax expense (benefit)

 

90

 

 

 

(22

)

 

 

1,162

 

 

 

1,215

 

 

 

15

 

Net (loss) income

 

(90,818

)

 

 

(88,719

)

 

 

34,880

 

 

 

51,182

 

 

 

51,615

 

Net loss attributable to non-controlling interest in consolidated variable interest entities

 

18,922

 

 

 

14,869

 

 

 

1,296

 

 

 

394

 

 

 

1,625

 

Net (loss) income attributable to Company

 

(71,896

)

 

 

(73,850

)

 

 

36,176

 

 

 

51,576

 

 

 

53,240

 

Preferred stock dividends

 

(10,493

)

 

 

(10,493

)

 

 

(10,994

)

 

 

(11,272

)

 

 

(10,296

)

Preferred stock redemption charge

 

 

 

 

 

 

 

(2,722

)

 

 

(3,443

)

 

 

 

Net (loss) income attributable to Company's common stockholders

 

(82,389

)

 

 

(84,343

)

 

 

22,460

 

 

 

36,861

 

 

 

42,944

 

Basic (loss) earnings per common share

$

(0.22

)

 

$

(0.22

)

 

$

0.06

 

 

$

0.10

 

 

$

0.11

 

Diluted (loss) earnings per common share

$

(0.22

)

 

$

(0.22

)

 

$

0.06

 

 

$

0.10

 

 

$

0.11

 

Weighted average shares outstanding - basic

 

381,200

 

 

 

380,795

 

 

 

379,346

 

 

 

379,395

 

 

 

379,299

 

Weighted average shares outstanding - diluted

 

381,200

 

 

 

380,795

 

 

 

380,551

 

 

 

380,983

 

 

 

381,517

 

 

 

 

 

 

 

 

 

 

 

Yield on average interest earning assets

 

6.69

%

 

 

6.80

%

 

 

6.57

%

 

 

6.39

%

 

 

6.31

%

Portfolio net interest income (1)

$

41,437

 

 

$

39,536

 

 

$

37,722

 

 

$

37,044

 

 

$

36,288

 

Portfolio net interest margin

 

3.48

%

 

 

3.87

%

 

 

3.63

%

 

 

3.25

%

 

 

2.97

%

Undepreciated (loss) earnings (1)

$

(49,170

)

 

$

(64,205

)

 

$

31,045

 

 

$

42,190

 

 

$

44,021

 

Undepreciated (loss) earnings per common share (1)

$

(0.13

)

 

$

(0.17

)

 

$

0.08

 

 

$

0.11

 

 

$

0.12

 

Book value per common share

$

4.06

 

 

$

4.36

 

 

$

4.70

 

 

$

4.74

 

 

$

4.74

 

Undepreciated book value per common share (1)

$

4.24

 

 

$

4.45

 

 

$

4.74

 

 

$

4.76

 

 

$

4.75

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

$

0.10

 

 

$

0.10

 

 

$

0.10

 

 

$

0.10

 

 

$

0.10

 

Dividends declared per preferred share on Series B Preferred Stock (2)

$

 

 

$

 

 

$

 

 

$

0.48

 

 

$

0.48

 

Dividends declared per preferred share on Series C Preferred Stock (2)

$

 

 

$

 

 

$

 

 

$

 

 

$

0.49

 

Dividends declared per preferred share on Series D Preferred Stock

$

0.50

 

 

$

0.50

 

 

$

0.50

 

 

$

0.50

 

 

$

0.50

 

Dividends declared per preferred share on Series E Preferred Stock

$

0.49

 

 

$

0.49

 

 

$

0.49

 

 

$

0.49

 

 

$

0.49

 

Dividends declared per preferred share on Series F Preferred Stock (3)

$

0.43

 

 

$

0.43

 

 

$

0.43

 

 

$

0.47

 

 

$

 

Dividends declared per preferred share on Series G Preferred Stock (4)

$

0.44

 

 

$

0.44

 

 

$

0.25

 

 

$

 

 

$

 


(1)

Represents a non-GAAP financial measure. A reconciliation of the Company's non-GAAP financial measures to their most directly comparable GAAP measure is included below in "Reconciliation of Financial Information."

(2)

The Company redeemed all outstanding shares of its Series B Preferred Stock and Series C Preferred Stock in December 2021 and July 2021, respectively.

(3)

For the three months ended September 30, 2021, dividends declared represents the cash dividend for the long initial dividend period that began on July 7, 2021 and ended on October 14, 2021.

(4)

For the three months ended December 31, 2021, dividends declared represent the cash dividend for the short initial dividend period that began on November 24, 2021 and ended on January 14, 2022.

Reconciliation of Financial Information

Non-GAAP Financial Measures

In addition to the results presented in accordance with GAAP, this press release includes certain non-GAAP financial measures, including undepreciated earnings, undepreciated book value per common share, portfolio interest income, portfolio interest expense and portfolio net interest income.. Our management team believes that these non-GAAP financial measures, when considered with our GAAP financial statements, provide supplemental information useful for investors as it enables them to evaluate our current performance and trends using the same metrics that management uses to operate our business. Our presentation of non-GAAP financial measures may not be comparable to similarly-titled measures of other companies, who may use different calculations. Because these measures are not calculated in accordance with GAAP, they should not be considered a substitute for, or superior to, the financial measures calculated in accordance with GAAP. Our GAAP financial results and the reconciliations of the non-GAAP financial measures included in this press release or the supplemental financial presentation to the most directly comparable financial measures prepared in accordance with GAAP should be carefully evaluated.

Undepreciated (Loss) Earnings

Undepreciated (loss) earnings is a supplemental non-GAAP financial measure defined as GAAP net (loss) income attributable to Company's common stockholders excluding the Company's share in depreciation expense and lease intangible amortization expense related to operating real estate, net. By excluding these non-cash adjustments from our operating results, we believe that the presentation of undepreciated (loss) earnings provides a consistent measure of our operating performance and useful information to investors to evaluate the effective net return on our portfolio. In addition, we believe that presenting undepreciated (loss) earnings enables our investors to measure, evaluate, and compare our operating performance to that of our peers.

A reconciliation of net (loss) income attributable to Company's common stockholders to undepreciated (loss) earnings for the respective periods ended is presented below (amounts in thousands, except per share data):

 

For the Three Months Ended

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

Net (loss) income attributable to Company's common stockholders

$

(82,389

)

 

$

(84,343

)

 

$

22,460

 

$

36,861

 

$

42,944

Add:

 

 

 

 

 

 

 

 

 

Depreciation expense on operating real estate

 

10,309

 

 

 

6,159

 

 

 

2,237

 

 

1,655

 

 

296

Amortization of lease intangibles related to operating real estate

 

22,910

 

 

 

13,979

 

 

 

6,348

 

 

3,674

 

 

781

Undepreciated (loss) earnings

$

(49,170

)

 

$

(64,205

)

 

$

31,045

 

$

42,190

 

$

44,021

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding - basic

 

381,200

 

 

 

380,795

 

 

 

379,346

 

 

379,395

 

 

379,299

Undepreciated (loss) earnings per common share

$

(0.13

)

 

$

(0.17

)

 

$

0.08

 

$

0.11

 

$

0.12

Undepreciated Book Value Per Common Share

Undepreciated book value per common share is a supplemental non-GAAP financial measure defined as GAAP book value excluding the Company's share of cumulative depreciation and lease intangible amortization expenses related to operating real estate, net held at the end of the period. By excluding these non-cash adjustments, undepreciated book value reflects the value of the Company’s rental property portfolio at its undepreciated basis. The Company's rental property portfolio includes single-family rental homes directly owned by the Company and consolidated multi-family apartment communities. We believe that the presentation of undepreciated book value per common share is useful to investors and us as it allows management to consider our overall portfolio exclusive of non-cash adjustments to operating real estate, net and facilitates the comparison of our financial performance to that of our peers.

A reconciliation of GAAP book value to undepreciated book value and calculation of undepreciated book value per common share as of the dates indicated is presented below (amounts in thousands, except per share data):

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

Company's stockholders' equity

$

2,092,991

 

 

$

2,217,618

 

 

$

2,341,031

 

 

$

2,357,793

 

 

$

2,321,161

 

Preferred stock liquidation preference

 

(557,125

)

 

 

(557,125

)

 

 

(557,125

)

 

 

(561,027

)

 

 

(521,822

)

GAAP book value

 

1,535,866

 

 

 

1,660,493

 

 

 

1,783,906

 

 

 

1,796,766

 

 

 

1,799,339

 

Add:

 

 

 

 

 

 

 

 

 

Cumulative depreciation expense on operating real estate

 

20,081

 

 

 

9,772

 

 

 

4,381

 

 

 

2,144

 

 

 

489

 

Cumulative amortization of lease intangibles related to operating real estate

 

48,213

 

 

 

25,303

 

 

 

11,324

 

 

 

4,976

 

 

 

1,302

 

Undepreciated book value

$

1,604,160

 

 

$

1,695,568

 

 

$

1,799,611

 

 

$

1,803,886

 

 

$

1,801,130

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding

 

378,647

 

 

 

381,249

 

 

 

379,405

 

 

 

379,286

 

 

 

379,372

 

GAAP book value per common share (1)

$

4.06

 

 

$

4.36

 

 

$

4.70

 

 

$

4.74

 

 

$

4.74

 

Undepreciated book value per common share (2)

$

4.24

 

 

$

4.45

 

 

$

4.74

 

 

$

4.76

 

 

$

4.75

 


(1)

GAAP book value per common share is calculated using the GAAP book value and the common shares outstanding for the periods indicated.

(2)

Undepreciated book value per common share is calculated using the undepreciated book value and the common shares outstanding for the periods indicated.

Portfolio Interest Income, Portfolio Interest Expense and Portfolio Net Interest Income

The Company has determined it is the primary beneficiary of Consolidated SLST and has consolidated Consolidated SLST into the Company's condensed consolidated financial statements. Our GAAP interest income includes interest income recognized on the underlying seasoned re-performing and non-performing residential loans held in Consolidated SLST. Our GAAP interest expense includes interest expense recognized on the Consolidated SLST CDOs that permanently finance the residential loans in Consolidated SLST. We calculate portfolio interest income (a supplemental non-GAAP financial measure) by reducing our GAAP interest income by the interest expense recognized on the Consolidated SLST CDOs, thus only including the interest income earned by the SLST securities that are actually owned by the Company.

We refer to GAAP interest expense, excluding interest expense from Consolidated SLST CDOs, subordinated debentures, convertible notes, senior unsecured notes and mortgages payable on real estate, as portfolio interest expense (a supplemental non-GAAP financial measure). Portfolio net interest income is a supplemental non-GAAP financial measure defined as GAAP net interest income excluding interest expense from subordinated debentures, convertible notes, senior unsecured notes and mortgages payable on real estate. As discussed above, we exclude the interest expense recognized on the Consolidated SLST CDOs from GAAP interest expense and instead reduce our GAAP interest income by the interest expense recognized on the Consolidated SLST CDOs to reflect the interest income earned by the SLST securities that are actually owned by the Company. In addition, we exclude our unsecured long-term debt and mortgages payable on real estate from GAAP interest expense in our calculation of portfolio interest expense and portfolio net interest income, the inclusion of which may otherwise obscure underlying trends in our portfolio of interest earning assets. We believe our calculation of these measures provides investors and management with additional detail and enhances their understanding of the performance of our interest earning assets, the cost of financing attributable to the financing instruments that directly and exclusively finance the Company’s interest earning assets and underlying trends within our portfolio of interest earning assets.

A reconciliation of GAAP interest income to portfolio interest income, GAAP interest expense to portfolio interest expense and GAAP total net interest income to portfolio net interest income for the respective periods ended is presented below (dollar amounts in thousands):

 

For the Three Months Ended

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

GAAP interest income

$

68,020

 

$

58,501

 

$

52,318

 

$

52,323

 

$

52,186

GAAP interest expense

 

41,891

 

 

28,622

 

 

21,546

 

 

21,292

 

 

20,711

GAAP total net interest income

$

26,129

 

$

29,879

 

$

30,772

 

$

31,031

 

$

31,475

 

 

 

 

 

 

 

 

 

 

GAAP interest income

$

68,020

 

$

58,501

 

$

52,318

 

$

52,323

 

$

52,186

Subtract interest expense from:

 

 

 

 

 

 

 

 

 

Consolidated SLST CDOs

 

6,208

 

 

5,978

 

 

6,764

 

 

7,116

 

 

7,151

Portfolio interest income

$

61,812

 

$

52,523

 

$

45,554

 

$

45,207

 

$

45,035

 

 

 

 

 

 

 

 

 

 

GAAP interest expense

$

41,891

 

$

28,622

 

$

21,546

 

$

21,292

 

$

20,711

Subtract interest expense from:

 

 

 

 

 

 

 

 

 

Consolidated SLST CDOs

 

6,208

 

 

5,978

 

 

6,764

 

 

7,116

 

 

7,151

Subordinated debentures

 

550

 

 

459

 

 

457

 

 

458

 

 

459

Convertible notes

 

 

 

438

 

 

2,814

 

 

2,810

 

 

2,788

Senior unsecured notes

 

1,607

 

 

1,603

 

 

1,601

 

 

1,598

 

 

1,136

Mortgages payable on real estate

 

13,151

 

 

7,157

 

 

2,078

 

 

1,147

 

 

430

Portfolio interest expense

$

20,375

 

$

12,987

 

$

7,832

 

$

8,163

 

$

8,747

Portfolio net interest income

$

41,437

 

$

39,536

 

$

37,722

 

$

37,044

 

$

36,288

Equity Investments in Consolidated Multi-Family Properties

We invest in joint venture investments that own multi-family apartment communities which the Company determined to be VIEs and for which the Company is the primary beneficiary. As a result, we are required to consolidate these entities' underlying assets, liabilities, income and expenses in our condensed consolidated financial statements with non-controlling interests for the third-party ownership of the joint ventures' membership interests.

A reconciliation of our net equity investments in consolidated multi-family properties to our condensed consolidated financial statements as of June 30, 2022 is shown below (dollar amounts in thousands):

Cash and cash equivalents

$

38,233

Real estate, net

 

1,649,472

Lease intangible, net (a)

 

18,924

Other assets

 

29,163

Total assets

$

1,735,792

 

 

Mortgages payable on real estate, net

$

1,251,059

Other liabilities

 

25,755

Total liabilities

$

1,276,814

 

 

Redeemable non-controlling interest in Consolidated VIEs

$

37,101

Non-controlling interest in Consolidated VIEs

$

34,080

Net equity investment

$

387,797

(a) Included in other assets in the accompanying condensed consolidated balance sheets.

Consolidated SLST

We determined that Consolidated SLST is a VIE and that we are the primary beneficiary of Consolidated SLST. As a result, we are required to consolidate Consolidated SLST’s underlying seasoned re-performing and non-performing residential loans including its liabilities, income and expenses in our condensed consolidated financial statements. We have elected the fair value option on the assets and liabilities held within Consolidated SLST, which requires that changes in valuations in the assets and liabilities of Consolidated SLST be reflected in our condensed consolidated statements of operations.

A reconciliation of our portfolio net interest income generated by our Single-Family portfolio to our condensed consolidated financial statements for the three months ended June 30, 2022 is set forth below (dollar amounts in thousands):

Interest income, residential loans

$

51,522

 

Interest income, investment securities available for sale

 

1,692

 

Interest income, Consolidated SLST

 

9,254

 

Interest expense, Consolidated SLST CDOs

 

(6,208

)

Portfolio interest income, Single-Family

 

56,260

 

 

 

Interest expense, repurchase agreements

 

(11,536

)

Interest expense, residential loan securitizations

 

(8,728

)

Portfolio interest expense, Single-Family

 

(20,264

)

 

 

Portfolio net interest income, Single-Family

$

35,996