NEW YORK, Feb. 24, 2020 (GLOBE NEWSWIRE) — New York Mortgage Trust, Inc. (Nasdaq: NYMT) (“NYMT,” the “Company,” “we,” “our” or “us”) today reported results for the three and twelve months ended December 31, 2019.
Summary of Fourth Quarter and Full Year 2019:
(dollar amounts in thousands, except per share data)(1) Economic return on book value is based on the periodic change in GAAP book value per share plus dividends declared per common share during the respective period.Key Developments:Fourth Quarter 2019Issued 28,750,000 shares of common stock through an underwritten public offering, resulting in net proceeds of $172.2 million.
Issued 6,900,000 shares of our 7.875% Series E Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (“Series E Preferred Stock”) in an underwritten public offering, resulting in net proceeds of $166.7 million.
Acquired approximately $1.04 billion of mortgage-related and residential housing-related assets.Full Year 2019Issued 132,940,000 shares of common stock collectively through six underwritten public offerings, resulting in total net proceeds of approximately $790.8 million.
Issued 6,900,000 shares of Series E Preferred Stock through an underwritten public offering and 1,972,888 shares of preferred stock under our “at-the-market” preferred equity offering program, resulting in total net proceeds to us of approximately $166.7 million and $48.4 million, respectively.
Acquired approximately $2.4 billion of mortgage-related, residential housing-related and other credit assets.Subsequent Developments:On January 10, 2020, the Company issued 34,500,000 shares of its common stock through an underwritten public offering at a public offering price of $6.09 per share, resulting in total net proceeds to the Company of approximately $206.7 million after deducting underwriting discounts and commissions and estimated offering expenses.On February 13, 2020, the Company issued 50,600,000 shares of its common stock through an underwritten public offering at a public offering price of $6.13 per share, resulting in total net proceeds to the Company of approximately $305.3 million after deducting underwriting discounts and commissions and estimated offering expenses.Management Overview
Steven Mumma, Chairman and Chief Executive Officer, commented: “During a year in which the Company nearly doubled its equity market capitalization and investment portfolio, the steady and disciplined execution of the Company’s credit-focused investment strategy by its team of professionals has produced impressive results. The Company finished the year on a strong note, generating $0.20 per share of GAAP earnings and $0.21 per share of comprehensive income for the fourth quarter of 2019. For the full year, the Company earned $0.65 per share in GAAP earnings, while posting comprehensive income of $0.87 per share, equivalent to 109% of common share dividends declared during the year. The Company’s financial performance generated economic returns of 3.6% and 16.5% for the fourth quarter and full year 2019, respectively. Over the last three years, the Company has delivered an average annual economic return of 12%.The Company continued to opportunistically access the capital markets through equity issuances during the fourth quarter and full year 2019, raising approximately $339 million and $957 million, respectively. In fact, during 2019 alone, the Company’s capital markets’ activity contributed approximately $29 million of accretion to book value. Subsequent to the year end, the Company completed two successful raises adding another $512 million in common stock to bring our total equity market capitalization to approximately $2.9 billion.”Jason Serrano, President, added: “NYMT’s core operating model centers around efficiency and flexibility. The Company’s growth within the Multi-Family and Single-Family strategies was achieved through adherence to these principles. The Company adopts a total return approach and targets investments that will add additional value to our existing portfolio of diverse income-producing assets. By broadening our sources of income through recurring gains and new opportunities that the market may offer, the Company will continue to drive earnings while reducing expense levels on a relative basis. Therefore, the Company will continue to focus on new, niche subsectors to drive total returns and mitigate against the potential volatility associated with high leverage.
To provide a deeper understanding of our efforts to deliver exceptional value to our shareholders, we are pleased to announce the release of a new supplemental investor presentation intended to complement the Company’s earnings calls.”In connection with the release of the Company’s financial results, the Company will post a supplemental financial presentation on its website at www.nymtrust.com under “Events and Presentations.” Management intends to utilize this supplemental presentation as a discussion guide for the Company’s fourth quarter conference call on Tuesday, February 25, 2020.Capital Allocation
The following tables set forth our allocated capital by investment category at December 31, 2019, our interest income and interest expense by investment category, and the average yield, average portfolio debt cost, and portfolio net interest margin for our average interest earning assets (by investment category) for the three months ended December 31, 2019 (dollar amounts in thousands):(1) The Company, through its ownership of certain securities, has determined it is the primary beneficiary of the Consolidated K-Series and Consolidated SLST and has consolidated both into the Company’s consolidated financial statements. Interest income amounts represent interest income earned by securities that are actually owned by the Company. A reconciliation of net interest income from the Single-Family and Multi-Family Credit portfolio is included below in “Additional Information.”
(2) Includes real estate under development in the amount of $14.5 million, other loan investments in the amount of $2.4 million and deferred interest related to residential mortgage loans held in securitization trust, at fair value of $0.7 million, all of which are included in the Company’s accompanying consolidated balance sheets in receivables and other assets.
(3) Includes derivative liabilities of $29.0 million netted against a $44.8 million variation margin.
(4) Restricted cash is included in the Company’s accompanying consolidated balance sheets in receivables and other assets.
(5) Represents total debt divided by the Company’s total stockholders’ equity. Total debt does not include Multi-family CDOs amounting to $16.7 billion, SLST CDOs amounting to $1.1 billion and Residential CDOs amounting to $40.4 million that are consolidated in the Company’s financial statements as they are non-recourse debt for which the Company has no obligation.
(6) Represents repurchase agreement borrowings divided by the Company’s total stockholders’ equity.
(7) Includes interest income earned on cash accounts held by the Company.
(8) Average Interest Earning Assets for the periods indicated exclude all Consolidated SLST and Consolidated K-Series assets other than those securities actually owned by the Company.
(9) Average Interest Earning Assets is calculated each quarter based on daily average amortized cost for the respective periods.
(10) Average Yield on Interest Earning Assets was calculated by dividing our annualized interest income by our Average Interest Earning Assets for the respective periods.
(11) Average Portfolio Debt Cost was calculated by dividing our annualized interest expense 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.
(12) Portfolio Net Interest Margin is the difference between our Average Yield on Interest Earning Assets and our Average Portfolio Debt Cost, excluding the weighted average cost of subordinated debentures and convertible notes.
Conference Call
On Tuesday, February 25, 2020 at 9:00 a.m., Eastern Time, New York Mortgage Trust’s executive management is scheduled to host a conference call and audio webcast to discuss the Company’s financial results for the three and twelve months ended December 31, 2019. The conference call dial-in number is (877) 312-8806. The replay will be available until Tuesday, March 3, 2020 and can be accessed by dialing (855) 859-2056 and entering passcode 8298881. 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.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 www.nymtrust.com under “Events and Presentations.” Full year 2019 financial and operating data can be viewed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, which is expected to be filed with the Securities and Exchange Commission on or about February 28, 2020. A copy of the Form 10-K will be posted at the Company’s website as soon as reasonably practicable following its filing with the Securities and Exchange Commission.About New York Mortgage Trust
New York Mortgage Trust, Inc. is a Maryland corporation that has elected to be taxed as a real estate investment trust for federal income tax purposes (“REIT”). NYMT is an internally managed REIT in the business of acquiring, investing in, financing and managing mortgage-related and residential housing-related assets and targets 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, Agency CMBS and other mortgage-related, residential housing-related and credit-related assets. For a list of defined terms used from time to time in this press release, see “Defined Terms” below.Defined TermsThe following defines certain of the commonly used terms that may appear 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 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; “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; “Agency CMBS” refers to CMBS representing interests in or obligations backed by pools of multi-family mortgage loans guaranteed by Freddie Mac; “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 senior or mezzanine securities issued by them, that we consolidate in our financial statements in accordance with GAAP; “Consolidated SLST” refers to a Freddie Mac-sponsored residential mortgage loan securitization, comprised of seasoned re-performing and non-performing residential mortgage loans, of which we own the first loss subordinated securities and certain IOs and senior securities that we consolidate in our financial statements in accordance with GAAP; “Multi-family CDOs” refers to the debt that permanently finances the multi-family mortgage loans held by the Consolidated K-Series that we consolidate in our financial statements in accordance with GAAP; “SLST CDOs” refers to the debt that permanently finances the residential mortgage loans held in Consolidated SLST that we consolidate in our financial statements in accordance with GAAP; “Residential CDOs” refers to the debt that permanently finances our residential mortgage loans held in securitization trusts, net that we consolidate in our financial statements in accordance with GAAP; “Agency” portfolio includes Agency RMBS and Agency CMBS; “Multi-Family Credit” portfolio includes multi-family CMBS, preferred equity and mezzanine loan investments and certain investments in unconsolidated entities that invest in multi-family credit assets; and “Single-Family 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 InformationWe determined that the Consolidated K-Series were variable interest entities and that we are the primary beneficiary of the Consolidated K-Series. As a result, we are required to consolidate the Consolidated K-Series’ underlying multi-family loans including their liabilities, income and expenses in our consolidated financial statements. Also, in the fourth quarter of 2019, the Company invested in first loss subordinated securities and certain IOs and senior securities issued by a Freddie Mac-sponsored residential mortgage loan securitization, which we refer to as Consolidated SLST. We determined that Consolidated SLST is a variable interest entity and that we are the primary beneficiary of Consolidated SLST. In accordance with GAAP, the Company has consolidated the underlying seasoned re-performing and non-performing residential mortgage loans of Consolidated SLST including its liabilities, income and expenses in our consolidated financial statements. We have elected the fair value option on the assets and liabilities held within the Consolidated K-Series and Consolidated SLST, which requires that changes in valuations in the assets and liabilities of the Consolidated K-Series and Consolidated SLST be reflected in our consolidated statements of operations.A reconciliation of our net interest income generated by our Multi-Family Credit portfolio to our consolidated financial statements for the three months ended December 31, 2019 is set forth below (dollar amounts in thousands):(1) Included in the Company’s accompanying consolidated statements of operations in interest income, investment securities and other interest earning assets.A reconciliation of our net interest income generated by our Single-Family Credit portfolio to our consolidated financial statements for the three months ended December 31, 2019 is set forth below (dollar amounts in thousands):(1) Included in the Company’s accompanying consolidated statements of operations in interest income, investment securities and other interest earning assets.
(2) Included in the Company’s accompanying consolidated statements of operations in interest expense, residential collateralized debt obligations.Cautionary Statement Regarding Forward-Looking StatementsWhen 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
FINANCIAL TABLES FOLLOW
NEW YORK MORTGAGE TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except share data)(1) Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIEs”) as the Company is the primary beneficiary of these VIEs. As of December 31, 2019 and December 31, 2018, assets of consolidated VIEs totaled $19,270,384 and $11,984,374, respectively, and the liabilities of consolidated VIEs totaled $17,878,314 and $11,191,736, respectively.
NEW YORK MORTGAGE TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollar amounts in thousands, except per share data)
(unaudited)
NEW YORK MORTGAGE TRUST, INC. AND SUBSIDIARIES
SUMMARY OF QUARTERLY EARNINGS
(Dollar amounts in thousands, except per share data)
(unaudited)
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