NEW YORK, Aug. 02, 2018 (GLOBE NEWSWIRE) -- New York Mortgage Trust, Inc. (Nasdaq: NYMT) (“NYMT,” the “Company,” “we,” “our” or “us”) today reported results for the three and six months ended June 30, 2018.
Summary of Second Quarter 2018:
- Net income attributable to common stockholders of $23.8 million, or $0.21 per share (basic), and comprehensive income to common stockholders of $17.2 million, or $0.15 per share.
- Net interest income of $17.5 million and portfolio net interest margin of 239 basis points.
- Book value per common share of $5.76 at June 30, 2018, a decrease of less than 1% from March 31, 2018, resulting in an economic return of 2.9% for the quarter and an annualized economic return of 5.3% for the six months ended June 30, 2018.
- Declared second quarter dividend of $0.20 per common share that was paid on July 26, 2018.
- Issued and sold 12,145,144 shares of common stock, resulting in net proceeds to the Company of $73.8 million, under our at-the-market equity offering program.
Subsequent Developments:
The Company announced today that it had begun the process to internalize the management of its distressed residential loan strategy as part of an effort to expand its capabilities in self managing, sourcing and creating single family residential credit assets. The Company has recently hired ten investment professionals to build and expand its single family residential credit asset platform. The Company expects that the single family residential credit team will ultimately be comprised of 15 to 20 professionals in total. The Company believes the internalization of the management of the distressed residential loans, as well as expanded capabilities in sourcing and originating will strengthen the Company’s ability to capitalize on future credit investment opportunities.
In connection with the internalization, the Company notified Headlands Asset Management, the external manager of its distressed residential loan portfolio, that it will allow its management agreement with the manager to expire on June 30, 2019. This represents a continuation of steps taken in recent years by the Company to fully internalize its investment portfolio management. In May 2016, the Company announced the internalization of its multi-family credit investment platform through the acquisition of RiverBanc LLC. During the second quarter, the Company completely exited out of its Agency IO strategy, which had been managed externally prior to January 1, 2018.
Management Overview
Steven Mumma, NYMT’s Chairman and Chief Executive Officer, commented: "The Company delivered another quarter of stable earnings and book value, with GAAP EPS of $0.21 per common share and book value at $5.76, down $0.03 from the previous quarter. Multi-Family continued to be the significant contributor during the quarter, with both net interest income and unrealized gains increasing from the prior quarter. The Company was opportunistic in raising capital through its at-the-market equity offering program raising approximately $73.8 million during the quarter, resulting in $0.03 accretion to overall book value.
As the Company has grown in recent years, we have taken steps to internalize the investment management of our various investment portfolios. In May 2016, we acquired our external manager for our multi-family credit investments and during the quarter, we exited our Agency IO portfolio, which had been externally managed. We are pleased to announce that we have begun the process to internalize the management of our distressed residential loan strategy. As part of an effort to expand our capabilities in self managing, sourcing and creating single family residential credit assets, we have added ten investment professionals to our single family residential credit investment team.
In connection with this internalization, we provided Headlands notice that we intend to cause our management agreement with them to expire when its term ends in June 2019. Headlands has been a valued and trusted partner and advisor to us since 2010 and we are grateful for their many contributions to our growth.
We believe that internalization of all our credit investing functions, including both multi-family and single family residential, will strengthen the Company's ability to identify and secure future investment opportunities in this key strategic area."
Capital Allocation
The following tables set forth our allocated capital by investment type at June 30, 2018, our interest income and interest expense by investment type, and the weighted average yield, average cost of funds and portfolio net interest margin for our average interest earning assets (by investment type) for the three months ended June 30, 2018 (dollar amounts in thousands):
| Capital Allocation at June 30, 2018: | |||||||||||||||||||
| Agency RMBS(1) | Multi-Family (2) | Distressed Residential (3) | Other (4) | Total | |||||||||||||||
| Carrying Value | $ | 1,101,344 | $ | 875,563 | $ | 445,353 | $ | 154,405 | $ | 2,576,665 | |||||||||
| Liabilities | |||||||||||||||||||
| Callable(5) | (874,917 | ) | (295,294 | ) | (164,149 | ) | (37,834 | ) | (1,372,194 | ) | |||||||||
| Non-Callable | — | (29,628 | ) | (31,398 | ) | (107,198 | ) | (168,224 | ) | ||||||||||
| Convertible | — | — | — | (129,738 | ) | (129,738 | ) | ||||||||||||
| Hedges (Net) (6) | 10,543 | — | — | — | 10,543 | ||||||||||||||
| Cash (7) | 11,015 | 15,000 | 5,423 | 58,973 | 90,411 | ||||||||||||||
| Goodwill | — | — | — | 25,222 | 25,222 | ||||||||||||||
| Other | 2,512 | (8,219 | ) | 17,305 | (28,082 | ) | (16,484 | ) | |||||||||||
| Net Capital Allocated | $ | 250,497 | $ | 557,422 | $ | 272,534 | $ | (64,252 | ) | $ | 1,016,201 | ||||||||
| % of Capital Allocated | 24.6 | % | 54.9 | % | 26.8 | % | (6.3 | )% | 100.0 | % | |||||||||
| Net Interest Income- Three Months Ended June 30, 2018: | |||||||||||||||||||
| Interest Income | $ | 7,851 | $ | 18,280 | $ | 5,110 | $ | 1,796 | $ | 33,037 | |||||||||
| Interest Expense | (4,644 | ) | (4,090 | ) | (2,467 | ) | (4,336 | ) | (15,537 | ) | |||||||||
| Net Interest Income (Expense) | $ | 3,207 | $ | 14,190 | $ | 2,643 | $ | (2,540 | ) | $ | 17,500 | ||||||||
| Portfolio Net Interest Margin - Three Months Ended June 30, 2018 | |||||||||||||||||||
| Average Interest Earning Assets (8) | $ | 1,167,278 | $ | 639,637 | $ | 453,407 | $ | 142,975 | $ | 2,403,297 | |||||||||
| Weighted Average Yield on Interest Earning Assets (9) | 2.69 | % | 11.43 | % | 4.51 | % | 5.02 | % | 5.50 | % | |||||||||
| Less: Average Cost of Funds (10) | (2.02 | )% | (4.69 | )% | (4.87 | )% | (3.99 | )% | (3.11 | )% | |||||||||
| Portfolio Net Interest Margin (11) | 0.67 | % | 6.74 | % | (0.36 | )% | 1.03 | % | 2.39 | % | |||||||||
(1) Includes Agency fixed-rate RMBS and Agency ARMs.
(2) The Company, through its ownership of certain securities, has determined it is the primary beneficiary of the Consolidated K-Series and has consolidated the Consolidated K-Series into the Company’s condensed consolidated financial statements. Carrying Value and Average Interest Earning Assets for the quarter excludes all Consolidated K-Series assets other than those securities actually owned by the Company. Interest income amounts represent interest income earned by securities that are actually owned by the Company. A reconciliation of net capital allocated to and net interest income from multi-family investments is included below in “Additional Information.”
(3) Includes $290.6 million of distressed residential mortgage loans, $96.9 million of distressed residential mortgage loans, at fair value and $54.1 million of Non-Agency RMBS.
(4) Other includes residential mortgage loans held in securitization trusts amounting to $66.0 million, residential second mortgage loans, at fair value of $72.3 million, investments in unconsolidated entities amounting to $13.3 million and mortgage loans held for sale and mortgage loans held for investment totaling $2.8 million. Mortgage loans held for sale and mortgage loans held for investment are included in the Company’s accompanying condensed consolidated balance sheets in receivables and other assets. Other non-callable liabilities consist of $45.0 million in subordinated debentures and $62.2 million in residential collateralized debt obligations.
(5) Includes repurchase agreements.
(6) Includes derivative assets and variation margin.
(7) Includes $5.4 million in deposits held in our distressed residential securitization trusts to be used to pay down outstanding debt. These deposits are included in the Company’s accompanying condensed consolidated balance sheets in receivables and other assets.
(8) Our Average Interest Earning Assets is calculated each quarter based on daily average amortized cost.
(9) Our Weighted Average Yield on Interest Earning Assets was calculated by dividing our annualized interest income for the quarter by our Average Interest Earning Assets for the quarter.
(10) Our Average Cost of Funds was calculated by dividing our annualized interest expense for the quarter by our average interest bearing liabilities, excluding our subordinated debentures and convertible notes, which generated interest expense of approximately $0.7 million and $2.7 million, respectively, for the quarter. Our Average Cost of Funds includes interest expense on our interest rate swaps.
(11) Portfolio Net Interest Margin is the difference between our Weighted Average Yield on Interest Earning Assets and our Average Cost of Funds, excluding the weighted average cost of subordinated debentures and convertible notes.
Prepayment History
The following table sets forth the constant prepayment rates (“CPR”) for selected asset classes, by quarter, for the quarterly periods indicated.
| Quarter Ended | Agency Fixed-Rate RMBS | Agency ARMs | Residential Securitized Loans | ||||||
| June 30, 2018 | 5.9 | % | 16.3 | % | 20.1 | % | |||
| March 31, 2018 | 5.4 | % | 10.2 | % | 10.8 | % | |||
| December 31, 2017 | 6.3 | % | 12.9 | % | 22.1 | % | |||
| September 30, 2017 | 12.8 | % | 9.4 | % | 18.2 | % | |||
| June 30, 2017 | 9.6 | % | 16.5 | % | 16.8 | % | |||
Second Quarter Earnings Summary
For the quarter ended June 30, 2018, we reported net income attributable to common stockholders of $23.8 million as compared to $23.7 million in the quarter ended March 31, 2018.
We generated net interest income of $17.5 million and a portfolio net interest margin of 239 basis points for the quarter ended June 30, 2018 as compared to net interest income of $19.8 million and a portfolio net interest margin of 286 basis points for the quarter ended March 31, 2018. The $2.3 million decrease in net interest income in the second quarter was primarily due to lower net interest income generated by our distressed residential portfolio. Our distressed residential portfolio experienced a decrease in asset yield of 174 basis points and an increase in cost of funds of 42 basis points, which resulted in a decline in net interest margin of $2.4 million in this portfolio as compared to the prior quarter. The decline in net interest margin in the Company's distressed residential portfolio is mainly attributable to changes in expected cash flows resulting from greater loan sale activity in the second quarter as compared to the first quarter of 2018.
For the quarter ended June 30, 2018, we recognized other income of $20.0 million as compared to other income of $21.0 million in the quarter ended March 31, 2018. The change in other income is primarily comprised of the following:
- An increase in net unrealized gains on multi-family loans and debt held in securitization trusts of $4.5 million.
- An increase in realized gains on residential mortgage loans, including distressed residential mortgage loans of $3.1 million.
- An increase in net realized loss on investment securities and related hedges of $5.2 million resulting from the final liquidation of our Agency IO portfolio, partially offset by an increase in unrealized loss recovery of $4.7 million previously recognized on these assets and included in the net unrealized gain on investment securities and related hedges as discussed below.
- An increase in net unrealized gain on investment securities and related hedges of $0.9 million primarily consisting of a $4.7 million increase in gain from our Agency IO portfolio offset by a $3.8 million increase in unrealized loss from our interest rate swaps accounted for as trading instruments for accounting purposes.
- A decrease in other income of $3.8 million, which is due to a $2.1 million impairment loss recognized on the real estate development property owned through the Company's 50% interest in an entity that owns and develops land and residential homes in Kiawah Island, SC. The Company's $2.1 million impairment loss is partially offset by the $1.0 million non-controlling interest share of the loss. In addition, the first quarter activity included a $2.3 million gain recognized by a consolidated variable interest entity from the sale of its multi-family apartment property in March 2018.
The following table details the general and administrative expenses for the quarters ended June 30, 2018 and March 31, 2018 respectively (dollar amounts in thousands):
| Three Months Ended | ||||||||
| General and Administrative Expenses | June 30, 2018 | March 31, 2018 | ||||||
| Salaries, benefits and directors’ compensation | $ | 3,173 | $ | 2,556 | ||||
| Base management and incentive fees | 809 | 833 | ||||||
| Other general and administrative expenses | 2,103 | 2,100 | ||||||
| Total general and administrative expenses | $ | 6,085 | $ | 5,489 | ||||
The increase in general and administrative expenses is primarily related to the annual awards in equity compensation paid to the board of directors in the second quarter.
The following table sets out the operating expenses related to our distressed residential mortgage loans and the operating real estate and real estate held for sale in consolidated variable interest entities for the quarters ended June 30, 2018 and March 31, 2018, respectively (dollar amounts in thousands):
| Three Months Ended | ||||||||
| Operating Expenses | June 30, 2018 | March 31, 2018 | ||||||
| Expenses related to distressed residential mortgage loans | $ | 1,811 | $ | 1,603 | ||||
| Expenses related to operating real estate and real estate held for sale in consolidated variable interest entities | 873 | 1,606 | ||||||
| Total operating expenses | $ | 2,684 | $ | 3,209 | ||||
The decrease in operating expenses in the second quarter can be primarily attributed to a decrease in expenses related to our operating real estate and real estate held for sale in consolidated variable interest entities due to the sale of a multi-family apartment property in the prior quarter.
The results of operations applicable to the operating real estate and real estate held for sale in consolidated variable interest entities included in the Company's condensed consolidated statements of operations for the three months ended June 30, 2018 are as follows (dollar amounts in thousands):
| Three Months Ended June 30, 2018 | ||||
| Income from operating real estate and real estate held for sale in consolidated variable interest entities | $ | 1,253 | ||
| Expenses related to operating real estate and real estate held for sale in consolidated variable interest entities | (873 | ) | ||
| Net income from operating real estate and real estate held for sale in consolidated variable interest entities | 380 | |||
| Net income from operating real estate and real estate held for sale in consolidated variable interest entities attributable to non-controlling interest | (274 | ) | ||
| Net income from operating real estate and real estate held for sale in consolidated variable interest entities attributable to Company's common stockholders | $ | 106 | ||
Analysis of Changes in Book Value
The following table analyzes the changes in book value of our common stock for the quarter ended June 30, 2018 (amounts in thousands, except per share):
| Quarter Ended June 30, 2018 | ||||||||||
| Amount | Shares | Per Share(1) | ||||||||
| Beginning Balance | $ | 649,046 | 112,117 | $ | 5.79 | |||||
| Common stock issuance, net(2) | 74,540 | 12,196 | ||||||||
| Balance after share issuance activity | 723,586 | 124,313 | 5.82 | |||||||
| Dividends declared | (24,863 | ) | (0.20 | ) | ||||||
| Net change in accumulated other comprehensive income: | ||||||||||
| Investment securities (3) | (6,525 | ) | (0.05 | ) | ||||||
| Net income attributable to Company's common stockholders | 23,769 | 0.19 | ||||||||
| Ending Balance | $ | 715,967 | 124,313 | $ | 5.76 | |||||
(1) Outstanding shares used to calculate book value per share for the ending balance is based on outstanding shares as of June 30, 2018 of 124,312,846.
(2) Includes amortization of stock based compensation.
(3) The $6.5 million decrease related to investment securities is primarily due to a decline in the value of the Agency RMBS portfolio for the three months ended June 30, 2018.
Conference Call
On Friday, August 3, 2018 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, 2018. The conference call dial-in number is (877) 312-8806. The replay will be available until Friday, August 10, 2018 and can be accessed by dialing (855) 859-2056 and entering passcode 4545709. A live audio webcast of the conference call can be accessed via the Internet, on a listen-only basis, at the Company's website at http://www.nymtrust.com. Please allow extra time, prior to the call, to visit the site and download the necessary software to listen to the Internet broadcast.
Second quarter 2018 financial and operating data can be viewed in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018, which is expected to be filed with the Securities and Exchange Commission on or about August 9, 2018. A copy of the Form 10-Q will be posted at the Company’s website as soon as reasonably practicable following its filing with the Securities and Exchange Commission.
About New York Mortgage Trust
New York Mortgage Trust, Inc. is a Maryland corporation that has elected to be taxed as a real estate investment trust for federal income tax purposes (“REIT”). NYMT is an internally managed REIT in the business of acquiring, investing in, financing and managing mortgage-related and residential housing-related assets and targets multi-family CMBS, direct financing to owners of multi-family properties through preferred equity and mezzanine loan investments, residential mortgage loans, including second mortgages and loans sourced from distressed markets, non-Agency RMBS, Agency RMBS and other mortgage-related and residential housing-related investments. Headlands Asset Management, LLC provides investment management services to the Company with respect to certain of its distressed residential loans. For a list of defined terms used from time to time in this press release, see “Defined Terms” below.
Defined Terms
The following defines certain of the commonly used terms in this press release: “RMBS” refers to residential mortgage-backed securities comprised of adjustable-rate, hybrid adjustable-rate, fixed-rate, interest only and inverse interest only, and principal only securities; “Agency RMBS” refers to RMBS representing interests in or obligations backed by pools of residential mortgage loans issued or guaranteed by a federally chartered corporation ("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”); "Non-Agency RMBS" refers to RMBS backed by performing, re-performing and non-performing mortgage loans; “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; “Agency IOs” refers to an IO that represents the right to the interest component of cash flow from a pool of residential mortgage loans issued or guaranteed by a GSE, or an agency of the U.S. government; “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” or "distressed residential loans" refers to pools of performing and re-performing fixed-rate and adjustable-rate, fully amortizing, interest-only and balloon, seasoned 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 IO or PO securities that represent the right to a specific component of the cash flow from a pool of commercial mortgage loans; “multi-family CMBS” refers to CMBS backed by commercial mortgage loans on multi-family properties; “multi-family securitized loans” refers to the commercial mortgage loans included in the Consolidated K-Series; “CDO” refers to collateralized debt obligation; “CLO” refers to collateralized loan obligation; and "Consolidated K-Series” refers to Freddie Mac- sponsored multi-family loan K-Series securitizations, of which we, or one of our special purpose entities, own the first loss PO securities and certain IO and/or mezzanine securities issued by them.
Additional Information
We determined that the Consolidated K-Series were variable interest entities and that we are the primary beneficiary of the Consolidated K-Series. As a result, we are required to consolidate the Consolidated K-Series’ underlying multi-family loans including their liabilities, income and expenses in our condensed consolidated financial statements. We have elected the fair value option on the assets and liabilities held within the Consolidated K-Series, which requires that changes in valuations in the assets and liabilities of the Consolidated K-Series be reflected in our condensed consolidated statements of operations.
A reconciliation of our net capital allocated to multi-family investments to our condensed consolidated financial statements as of June 30, 2018 is set forth below (dollar amounts in thousands):
| Multi-family loans held in securitization trusts, at fair value | $ | 9,345,360 | |
| Multi-family CDOs, at fair value | (8,838,841 | ) | |
| Net carrying value | 506,519 | ||
| Investment securities available for sale, at fair value | 134,614 | ||
| Total CMBS, at fair value | 641,133 | ||
| Preferred equity investments, mezzanine loans and investments in unconsolidated entities | 217,111 | ||
| Real estate under development (1) | 20,337 | ||
| Real estate held for sale in consolidated variable interest entities | 29,502 | ||
| Mortgages and notes payable in consolidated variable interest entities | (32,520 | ) | |
| Financing arrangements, portfolio investments | (295,294 | ) | |
| Securitized debt | (29,628 | ) | |
| Cash and other | 6,781 | ||
| Net Capital in Multi-Family | $ | 557,422 | |
(1) Included in the Company’s accompanying condensed consolidated balance sheets in receivables and other assets.
A reconciliation of our net interest income in multi-family investments to our condensed consolidated financial statements for the three months ended June 30, 2018 is set forth below (dollar amounts in thousands):
| Three Months Ended June 30, 2018 | |||
| Interest income, multi-family loans held in securitization trusts | $ | 85,629 | |
| Interest income, investment securities, available for sale (1) | 2,474 | ||
| Interest income, preferred equity investments and mezzanine loans (1) | 4,862 | ||
| Interest expense, multi-family collateralized debt obligation | (74,686 | ) | |
| Interest income, Multi-Family, net | 18,279 | ||
| Interest expense, investment securities, available for sale | (3,365 | ) | |
| Interest expense, securitized debt | (724 | ) | |
| Net interest income, Multi-Family | $ | 14,190 | |
(1) Included in the Company’s accompanying condensed consolidated statements of operations in interest income, investment securities and other.
Cautionary Statement Regarding Forward-Looking Statements
When used in this press release, in future filings with the Securities and Exchange Commission (“SEC”) or in other written or oral communications, statements which are not historical in nature, including those containing words such as “believe,” “expect,” “anticipate,” “estimate,” “plan,” “continue,” “intend,” “should,” “would,” “could,” “goal,” “objective,” “will,” “may” or similar expressions, are intended to identify “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"), and, as such, may involve known and unknown risks, uncertainties and assumptions.
Forward-looking statements are based on the Company’s beliefs, assumptions and expectations of its future performance, taking into account all information currently available to it. These beliefs, assumptions and expectations are subject to risks and uncertainties and can change as a result of many possible events or factors, not all of which are known to the Company. If a change occurs, the Company’s business, financial condition, liquidity and results of operations may vary materially from those expressed in its forward-looking statements. The following factors are examples of those that could cause actual results to vary from the Company’s forward-looking statements: changes in interest rates and the market value of the Company’s investments; 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 the prepayment rates on the mortgage loans underlying the Company’s investment securities; increased rates of default and/or decreased recovery rates on the Company's assets; delays in identifying and acquiring the Company’s targeted assets; the Company’s ability to borrow to finance its assets and the terms thereof; changes in governmental laws, regulations or policies affecting the Company’s business; the Company’s ability to maintain its qualification as a REIT for federal tax purposes; the Company’s ability to maintain its exemption from registration under the Investment Company Act of 1940, as amended; and risks associated with investing in real estate assets, including changes in business conditions and the general economy. These and other risks, uncertainties and factors, including the risk factors described in the Company’s reports filed with the SEC pursuant to the Exchange Act, could cause the Company’s actual results to differ materially from those projected in any forward-looking statements it makes. All forward-looking statements speak only as of the date on which they are made. New risks and uncertainties arise over time and it is not possible to predict those events or how they may affect the Company. Except as required by law, the Company is not obligated to, and does not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
For Further Information
| CONTACT: | AT THE COMPANY | ||
| Kristine R. Nario-Eng | |||
| Chief Financial Officer | |||
| Phone: (646) 216-2363 | |||
| Email: KNario@nymtrust.com |
FINANCIAL TABLES FOLLOW
| NEW YORK MORTGAGE TRUST, INC. AND SUBSIDIARIES | |||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
| (Dollar amounts in thousands, except share data) | |||||||
| June 30, 2018 | December 31, 2017 | ||||||
| (unaudited) | |||||||
| ASSETS | |||||||
| Investment securities, available for sale, at fair value (including pledged securities of $976,113 and $1,076,187, as of June 30, 2018 and December 31, 2017, respectively, and $50,134 and $47,922 held in securitization trusts as of June 30, 2018 and December 31, 2017, respectively) | $ | 1,290,015 | $ | 1,413,081 | |||
| Residential mortgage loans held in securitization trusts, net | 66,047 | 73,820 | |||||
| Residential mortgage loans, at fair value | 169,197 | 87,153 | |||||
| Distressed residential mortgage loans, net (including $105,851 and $121,791 held in securitization trusts as of June 30, 2018 and December 31, 2017, respectively) | 290,645 | 331,464 | |||||
| Multi-family loans held in securitization trusts, at fair value | 9,345,360 | 9,657,421 | |||||
| Derivative assets | 10,543 | 10,101 | |||||
| Cash and cash equivalents | 84,717 | 95,191 | |||||
| Investment in unconsolidated entities | 53,671 | 51,143 | |||||
| Preferred equity and mezzanine loan investments | 176,741 | 138,920 | |||||
| Real estate held for sale in consolidated variable interest entities | 29,502 | 64,202 | |||||
| Goodwill | 25,222 | 25,222 | |||||
| Receivables and other assets | 99,213 | 108,567 | |||||
| Total Assets (1) | $ | 11,640,873 | $ | 12,056,285 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| Liabilities: | |||||||
| Financing arrangements, portfolio investments | $ | 1,179,961 | $ | 1,276,918 | |||
| Financing arrangements, residential mortgage loans | 192,233 | 149,063 | |||||
| Residential collateralized debt obligations | 62,198 | 70,308 | |||||
| Multi-family collateralized debt obligations, at fair value | 8,838,841 | 9,189,459 | |||||
| Securitized debt | 61,026 | 81,537 | |||||
| Mortgages and notes payable in consolidated variable interest entities | 32,520 | 57,124 | |||||
| Accrued expenses and other liabilities | 83,155 | 82,126 | |||||
| Subordinated debentures | 45,000 | 45,000 | |||||
| Convertible notes | 129,738 | 128,749 | |||||
| Total liabilities (1) | 10,624,672 | 11,080,284 | |||||
| Commitments and Contingencies | |||||||
| Stockholders' Equity: | |||||||
| Preferred stock, $0.01 par value, 7.75% Series B cumulative redeemable, $25 liquidation preference per share, 6,000,000 shares authorized, 3,000,000 shares issued and outstanding | 72,397 | 72,397 | |||||
| Preferred stock, $0.01 par value, 7.875% Series C cumulative redeemable, $25 liquidation preference per share, 4,140,000 shares authorized, 3,600,000 shares issued and outstanding | 86,862 | 86,862 | |||||
| Preferred stock, $0.01 par value, 8.00% Series D Fixed-to-Floating Rate cumulative redeemable, $25 liquidation preference per share, 5,750,000 shares authorized and 5,400,000 shares issued and outstanding | 130,496 | 130,496 | |||||
| Common stock, $0.01 par value, 400,000,000 shares authorized, 124,312,846 and 111,909,909 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively | 1,243 | 1,119 | |||||
| Additional paid-in capital | 825,960 | 751,155 | |||||
| Accumulated other comprehensive (loss) income | (25,450 | ) | 5,553 | ||||
| Accumulated deficit | (75,541 | ) | (75,717 | ) | |||
| Company's stockholders' equity | 1,015,967 | 971,865 | |||||
| Non-controlling interest in consolidated variable interest entities | 234 | 4,136 | |||||
| Total equity | 1,016,201 | 976,001 | |||||
| Total Liabilities and Stockholders' Equity | $ | 11,640,873 | $ | 12,056,285 | |||
(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, 2018 and December 31, 2017, assets of consolidated VIEs totaled $9,663,179 and $10,041,468, respectively, and the liabilities of consolidated VIEs totaled $9,027,733 and $9,436,421, respectively.
| NEW YORK MORTGAGE TRUST, INC. AND SUBSIDIARIES | |||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
| (Dollar amounts in thousands, except per share data) | |||||||||||||||
| (unaudited) | |||||||||||||||
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| INTEREST INCOME: | |||||||||||||||
| Investment securities and other | $ | 16,990 | $ | 10,199 | $ | 33,248 | $ | 20,000 | |||||||
| Multi-family loans held in securitization trusts | 85,629 | 75,752 | 170,721 | 137,056 | |||||||||||
| Residential mortgage loans | 2,384 | 1,365 | 4,571 | 2,607 | |||||||||||
| Distressed residential mortgage loans | 2,720 | 6,665 | 8,074 | 12,703 | |||||||||||
| Total interest income | 107,723 | 93,981 | 216,614 | 172,366 | |||||||||||
| INTEREST EXPENSE: | |||||||||||||||
| Investment securities and other | 10,477 | 5,805 | 20,127 | 11,374 | |||||||||||
| Convertible notes | 2,652 | 2,615 | 5,301 | 4,590 | |||||||||||
| Multi-family collateralized debt obligations | 74,686 | 66,873 | 149,165 | 120,805 | |||||||||||
| Residential collateralized debt obligations | 475 | 239 | 886 | 575 | |||||||||||
| Securitized debt | 1,243 | 2,171 | 2,574 | 4,286 | |||||||||||
| Subordinated debentures | 690 | 570 | 1,310 | 1,110 | |||||||||||
| Total interest expense | 90,223 | 78,273 | 179,363 | 142,740 | |||||||||||
| NET INTEREST INCOME | 17,500 | 15,708 | 37,251 | 29,626 | |||||||||||
| OTHER INCOME (LOSS): | |||||||||||||||
| Recovery of (provision for) loan losses | 437 | (300 | ) | 395 | (112 | ) | |||||||||
| Realized (loss) gain on investment securities and related hedges, net | (8,654 | ) | 1,114 | (12,076 | ) | (109 | ) | ||||||||
| Realized gain on distressed residential mortgage loans at carrying value, net | 2,021 | 2,364 | 1,248 | 14,335 | |||||||||||
| Net gain (loss) on residential mortgage loans at fair value | 97 | — | (70 | ) | — | ||||||||||
| Unrealized gain (loss) on investment securities and related hedges, net | 12,606 | (1,051 | ) | 24,298 | 495 | ||||||||||
| Unrealized gain on multi-family loans and debt held in securitization trusts, net | 12,019 | 1,447 | 19,564 | 2,831 | |||||||||||
| Income from operating real estate and real estate held for sale in consolidated variable interest entities | 1,253 | 2,316 | 3,379 | 2,316 | |||||||||||
| Other income | 228 | 2,282 | 4,223 | 5,121 | |||||||||||
| Total other income | 20,007 | 8,172 | 40,961 | 24,877 | |||||||||||
| GENERAL, ADMINISTRATIVE AND OPERATING EXPENSES: | |||||||||||||||
| General and administrative expenses | 5,276 | 5,065 | 9,932 | 9,952 | |||||||||||
| Base management and incentive fees | 809 | (109 | ) | 1,642 | 2,969 | ||||||||||
| Expenses related to distressed residential mortgage loans | 1,811 | 2,218 | 3,414 | 4,457 | |||||||||||
| Expenses related to operating real estate and real estate held for sale in consolidated variable interest entities | 873 | 4,415 | 2,479 | 4,415 | |||||||||||
| Total general, administrative and operating expenses | 8,769 | 11,589 | 17,467 | 21,793 | |||||||||||
| INCOME FROM OPERATIONS BEFORE INCOME TAXES | 28,738 | 12,291 | 60,745 | 32,710 | |||||||||||
| Income tax (benefit) expense | (13 | ) | 442 | (92 | ) | 1,680 | |||||||||
| NET INCOME | 28,751 | 11,849 | 60,837 | 31,030 | |||||||||||
| Net loss (income) attributable to non-controlling interest in consolidated variable interest entities | 943 | 2,487 | (1,526 | ) | 2,487 | ||||||||||
| NET INCOME ATTRIBUTABLE TO COMPANY | 29,694 | 14,336 | 59,311 | 33,517 | |||||||||||
| Preferred stock dividends | (5,925 | ) | (3,225 | ) | (11,850 | ) | (6,450 | ) | |||||||
| NET INCOME ATTRIBUTABLE TO COMPANY'S COMMON STOCKHOLDERS | $ | 23,769 | $ | 11,111 | $ | 47,461 | $ | 27,067 | |||||||
| Basic earnings per common share | $ | 0.21 | $ | 0.10 | $ | 0.42 | $ | 0.24 | |||||||
| Diluted earnings per common share | $ | 0.20 | $ | 0.10 | $ | 0.40 | $ | 0.24 | |||||||
| Weighted average shares outstanding-basic | 115,211 | 111,863 | 113,623 | 111,792 | |||||||||||
| Weighted average shares outstanding-diluted | 135,164 | 111,863 | 133,470 | 111,792 | |||||||||||
| NEW YORK MORTGAGE TRUST, INC. AND SUBSIDIARIES | |||||||||||||||||||
| SUMMARY OF QUARTERLY EARNINGS | |||||||||||||||||||
| (Dollar amounts in thousands, except per share data) | |||||||||||||||||||
| (unaudited) | |||||||||||||||||||
| For the Three Months Ended | |||||||||||||||||||
| June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | |||||||||||||||
| Net interest income | $ | 17,500 | $ | 19,752 | $ | 15,040 | $ | 13,320 | $ | 15,708 | |||||||||
| Total other income | 20,007 | 20,953 | 25,218 | 24,918 | 8,172 | ||||||||||||||
| Total general, administrative and operating expenses | 8,769 | 8,698 | 8,288 | 10,996 | 11,589 | ||||||||||||||
| Income from operations before income taxes | 28,738 | 32,007 | 31,970 | 27,242 | 12,291 | ||||||||||||||
| Income tax (benefit) expense | (13 | ) | (79 | ) | 1,169 | 507 | 442 | ||||||||||||
| Net income | 28,751 | 32,086 | 30,801 | 26,735 | 11,849 | ||||||||||||||
| Net loss (income) attributable to non-controlling interest in consolidated variable interest entities | 943 | (2,468 | ) | (184 | ) | 1,110 | 2,487 | ||||||||||||
| Net income attributable to Company | 29,694 | 29,618 | 30,617 | 27,845 | 14,336 | ||||||||||||||
| Preferred stock dividends | (5,925 | ) | (5,925 | ) | (5,985 | ) | (3,225 | ) | (3,225 | ) | |||||||||
| Net income attributable to Company's common stockholders | 23,769 | 23,693 | 24,632 | 24,620 | 11,111 | ||||||||||||||
| Basic earnings per common share | $ | 0.21 | $ | 0.21 | $ | 0.22 | $ | 0.22 | $ | 0.10 | |||||||||
| Diluted earnings per common share | $ | 0.20 | $ | 0.20 | $ | 0.21 | $ | 0.21 | $ | 0.10 | |||||||||
| Weighted average shares outstanding - basic | 115,211 | 112,018 | 111,871 | 111,886 | 111,863 | ||||||||||||||
| Weighted average shares outstanding - diluted | 135,164 | 131,761 | 131,565 | 131,580 | 111,863 | ||||||||||||||
| Book value per common share | $ | 5.76 | $ | 5.79 | $ | 6.00 | $ | 6.05 | $ | 6.02 | |||||||||
| Dividends declared per common share | $ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.20 | |||||||||
| Dividends declared per preferred share on Series B Preferred Stock | $ | 0.48 | $ | 0.48 | $ | 0.48 | $ | 0.48 | $ | 0.48 | |||||||||
| Dividends declared per preferred share on Series C Preferred Stock | $ | 0.49 | $ | 0.49 | $ | 0.49 | $ | 0.49 | $ | 0.49 | |||||||||
| Dividends declared per preferred share on Series D Preferred Stock | $ | 0.50 | $ | 0.50 | $ | 0.51 | — | — | |||||||||||
Capital Allocation Summary
The following tables set forth our allocated capital by investment type as well as the weighted average yield on interest earning assets, average cost of funds and portfolio net interest margin for our interest earning assets for the periods indicated (dollar amounts in thousands):
| Agency RMBS | Multi- Family | Distressed Residential | Other | Total | |||||||||||||||
| At June 30, 2018 | |||||||||||||||||||
| Carrying value | $ | 1,101,344 | $ | 875,563 | $ | 445,353 | $ | 154,405 | $ | 2,576,665 | |||||||||
| Net capital allocated | $ | 250,497 | $ | 557,422 | $ | 272,534 | $ | (64,252 | ) | $ | 1,016,201 | ||||||||
| Three Months Ended June 30, 2018 | |||||||||||||||||||
| Average interest earning assets | $ | 1,167,278 | $ | 639,637 | $ | 453,407 | $ | 142,975 | $ | 2,403,297 | |||||||||
| Weighted average yield on interest earning assets | 2.69 | % | 11.43 | % | 4.51 | % | 5.02 | % | 5.50 | % | |||||||||
| Less: Average cost of funds | (2.02 | )% | (4.69 | )% | (4.87 | )% | (3.99 | )% | (3.11 | )% | |||||||||
| Portfolio net interest margin | 0.67 | % | 6.74 | % | (0.36 | )% | 1.03 | % | 2.39 | % | |||||||||
| At March 31, 2018 | |||||||||||||||||||
| Carrying value | $ | 1,161,445 | $ | 836,353 | $ | 461,305 | $ | 150,461 | $ | 2,609,564 | |||||||||
| Net capital allocated | $ | 251,405 | $ | 500,813 | $ | 282,561 | $ | (83,992 | ) | $ | 950,787 | ||||||||
| Three Months Ended March 31, 2018 | |||||||||||||||||||
| Average interest earning assets | $ | 1,208,900 | $ | 612,357 | $ | 467,898 | $ | 136,135 | $ | 2,425,290 | |||||||||
| Weighted average yield on interest earning assets | 2.64 | % | 11.43 | % | 6.25 | % | 4.81 | % | 5.68 | % | |||||||||
| Less: Average cost of funds | (1.82 | )% | (4.51 | )% | (4.45 | )% | (3.25 | )% | (2.82 | )% | |||||||||
| Portfolio net interest margin | 0.82 | % | 6.92 | % | 1.80 | % | 1.56 | % | 2.86 | % | |||||||||
| At December 31, 2017 | |||||||||||||||||||
| Carrying value | $ | 1,169,535 | $ | 816,805 | $ | 474,128 | $ | 140,325 | $ | 2,600,793 | |||||||||
| Net capital allocated | $ | 264,801 | $ | 475,200 | $ | 285,766 | $ | (49,766 | ) | $ | 976,001 | ||||||||
| Three Months Ended December 31, 2017 | |||||||||||||||||||
| Average interest earning assets | $ | 971,707 | $ | 596,701 | $ | 480,711 | $ | 126,447 | $ | 2,175,566 | |||||||||
| Weighted average yield on interest earning assets | 2.50 | % | 11.11 | % | 3.68 | % | 4.53 | % | 5.24 | % | |||||||||
| Less: Average cost of funds | (1.68 | )% | (4.49 | )% | (4.56 | )% | (3.22 | )% | (2.85 | )% | |||||||||
| Portfolio net interest margin | 0.82 | % | 6.62 | % | (0.88 | )% | 1.31 | % | 2.39 | % | |||||||||
| At September 30, 2017 | |||||||||||||||||||
| Carrying value | $ | 417,957 | $ | 723,170 | $ | 535,520 | $ | 136,304 | $ | 1,812,951 | |||||||||
| Net capital allocated | $ | 90,526 | $ | 495,882 | $ | 305,668 | $ | (46,071 | ) | $ | 846,005 | ||||||||
| Three Months Ended September 30, 2017 | |||||||||||||||||||
| Average interest earning assets | $ | 453,323 | $ | 536,537 | $ | 531,050 | $ | 126,848 | $ | 1,647,758 | |||||||||
| Weighted average yield on interest earning assets | 1.70 | % | 11.39 | % | 4.37 | % | 4.21 | % | 5.91 | % | |||||||||
| Less: Average cost of funds | (1.44 | )% | (4.46 | )% | (4.28 | )% | (2.57 | )% | (3.10 | )% | |||||||||
| Portfolio net interest margin | 0.26 | % | 6.93 | % | 0.09 | % | 1.64 | % | 2.81 | % | |||||||||
| At June 30, 2017 | |||||||||||||||||||
| Carrying value | $ | 449,437 | $ | 749,643 | $ | 568,273 | $ | 133,488 | $ | 1,900,841 | |||||||||
| Net capital allocated | $ | 110,497 | $ | 508,068 | $ | 290,414 | $ | (65,536 | ) | $ | 843,443 | ||||||||
| Three Months Ended June 30, 2017 | |||||||||||||||||||
| Average interest earning assets | $ | 485,194 | $ | 529,285 | $ | 621,936 | $ | 123,711 | $ | 1,760,126 | |||||||||
| Weighted average yield on interest earning assets | 1.65 | % | 11.10 | % | 5.91 | % | 3.96 | % | 6.16 | % | |||||||||
| Less: Average cost of funds | (1.30 | )% | (4.28 | )% | (4.29 | )% | (2.13 | )% | (3.04 | )% | |||||||||
| Portfolio net interest margin | 0.35 | % | 6.82 | % | 1.62 | % | 1.83 | % | 3.12 | % | |||||||||