Exhibit 99.2
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New York Mortgage Trust, Inc. Supplemental Disclosure November 2005 www.nymtrust.com www.nymc.com |
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Safe Harbor Statement - Private Securities Litigation Reform Act of 1995 Forward Looking Information This presentation may include forward-looking statements. These forward-looking statements include comments with respect to our objectives and strategies, and the results of our operations and our business. However, by their nature, these forward-looking statements involve numerous assumptions, uncertainties and opportunities, both general and specific. The risk exists that these statements may not be fulfilled. We caution readers of this presentation not to place undue reliance on these forward-looking statements as a number of factors could cause future company results to differ materially from these statements. Forward-looking statements may be influenced in particular by factors such as fluctuations in interest rates and stock indices, the effects of competition in the areas in which we operate, and changes in economic, political, regulatory and technological conditions. We caution that the foregoing list is not exhaustive. When relying on forward-looking statements to make decisions, investors should carefully consider the aforementioned factors as well as other uncertainties and events. |
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Straightforward Corporate Structure NTR: Real Estate Investment Trust Mortgage Loans & Securitized Loan Portfolio Mortgage Loans & Securitized Loan Portfolio 3rd Party Investors Fixed and Non-Portfolio ARMs Sold Servicing Released; Cash Sales Prime ARM Loans Held in Portfolio ' Transferred at Cost and Securitized 3 (Taxable REIT Subsidiary) Originations Active REIT Structure |
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Management Ownership NTR AHM BMM MHL NLY SFO LUM ANH TMA HMB KFN MFA Ownership 0.18321 0.10388 0.0828 0.06553 0.02288 0.0197 0.01918 0.01911 0.0179 0.01394 0.01306 0.0059 Source: Bloomberg Date: 11/15/05 |
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Why New York Mortgage Trust? Residential Mortgage REIT w/Self-Originated Portfolio Strategy Self-originated portfolio loans = lower cost, higher yielding assets High credit quality ARM loans = minimized credit risk Rapidly Growing Mortgage Origination Subsidiary (TRS) $4 billion current annual origination run rate (222% of $1.8B 2004 volume) >$5 billion projected 2006 originations (including new Wholesale Division) TRS provides low cost assets to REIT (at cost) and absorbs REIT G&A Dividend Protection and Growth Potential Portfolio yield pickup from transition of acquired to self-originated loans Positive contribution to earnings from TRS projected in 2006 1.0x Price to Book Attractive Relative to Peers (as of 10/20/05) 19% Insider Stock Ownership (Internally Managed) |
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Recent Developments Record Loan Origination Volume $1 billion in Q3 2005 (241% of Q3 2004) Launched New Wholesale Initiative (July 2005) Projected $1 to $1.5 billion production for 2006 Transitioning Portfolio from acquired MBS to Originated Loans $1.5 billion portfolio will be substantially self-originated by 12/31/05 $900 million of Prime Mortgage Loans securitized by 12/31/05 Major Expense Reductions Concluded cost intensive transitional period in Q2 2005 Cut $3.7 million in annual recurring salary costs in Q2 2005 TRS Contribution to Earnings Projected in 2006! |
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3. Mortgage-Backed Portfolio 1. Introduction 4. NYMT Recap 5. Appendix / Additional Info 2. Origination Capabilities New York Mortgage Trust, Inc. 2. Origination Capabilities |
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Origination Growth 2002 2003 2004 2005e Current Run Rate 2006e (incl Wholesale) Purchase Originations 469 803 1089 1957 2279.2 2500 Refinance Originations 408 797 756 1643 1729.6 1900 Wholesale 1200 New Wholesale Refinance Purchase $ in millions IPO June 2004 |
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Origination Growth v. Industry 3Q02 3Q03 3Q04 3Q05 NYMC 0 0.1353 0.6983 0.9403 1.2852 0.5968 0.3322 1.4154 0.9521 1.9727 2.1602 3.4159 3.7096 3.7133 Industry 0 0.3049 0.0258 0.5336 0.5491 -0.1835 -0.1899 0.0659 -0.1654 -0.1279 -0.199 -0.0052 0.0026 -0.2093 Origination Growth Outpaces Industry - Acceleration of self-originated portfolio Opportunities for increased TRS profits |
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Geographic Diversity Licensed / Authorized to Lend (39 states & DC) 850+ Employees 63 Office Locations Branches in 13 States |
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Origination Growth v. Peers Peer group of active prime mortgage REITs 6 months ending 2Q05 v. 2Q04 Source: National Mortgage News HMB MHL AHM NTR 102% |
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NYMC Growth Strategy Disciplined Mortgage Company & Originations Growth Same store origination growth (approximate 25% since June 2004 IPO) No cost and low cost, low risk strategic branch acquisitions SIB branches: Cost $0 ($400 million origination volume) GRL branches: All-in cost $4.9M* ($1.4 billion origination volume) New wholesale division: startup costs est. $2M ($1-1.5B projected volume) Planned future corporate acquisitions Portfolio Growth Accommodated by Originations Growth Increase portfolio capacity via increases in capital Future common equity offerings Trust preferred issuances ($45 million outstanding) Retained Earnings at TRS * Purchase price includes approximately $3.6 million in key employee sign-on and retention bonuses comprised of restricted stock and cash which vests over a 6 to 30 month period. This vesting expense substantially concludes in Q4 2005. |
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3. Mortgage-Backed Portfolio 1. Introduction 4. NYMT Recap 5. Appendix / Additional Info 2. Origination Capabilities New York Mortgage Trust, Inc. 3. Mortgage-Backed Portfolio |
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Portfolio Strategy Self-Originated, Low Cost Loans High Credit Quality ARMs Managed Interest Rate Risk ARM Portfolio |
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Portfolio Strategy Conservative interest rate management Initial fixed period of 5 years or less Hedges, primarily swaps and caps; no speculation Net duration gap » 8 months High credit quality ARMs = low credit risk Agency & AAA Rated Securities High FICO (Avg 734) & Low LTV (Avg 69%) Loans underwritten to our own guidelines Securitizations result in » 90% of loans as AAAs Self-originated loans = lower cost & higher yield Yield pick-up of 25 - 40 bps v. passive portfolio Originations continually replenish current portfolio Portfolio substantially self-originated by 12/31/05 |
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Originated Loans Drive Higher Returns 3.25% Purchased 5/1 Originated 5/1 AAA MBS Loans Yield 5.27% 5.52% * Cost of funds (Incl Hedges) - -4.38% - -4.38% Net spread 0.89% 1.14% Leverage (debt / equity) 12.0x 12.0x Leverage return 10.68% 13.68% Equity return 5.27% 5.52% Pre G&A Return 15.95% 19.20% Incremental Increase in ROE From Self Originations * Includes amortization of origination and securitization costs. |
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Portfolio Economics Data as of 9/30/05 |
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High Credit Quality Portfolio As of October 31, 2005 |
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3. Mortgage-Backed Portfolio 1. Introduction 4. Financial Analysis 5. Appendix / Additional Info 2. Origination Capabilities New York Mortgage Trust, Inc. 4. NYMT Recap |
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Attractive Valuation Source: Form 10-Q; market price as of 11/17/05 Peer group of active prime mortgage REITs HMB MHL AHM NTR 1.6x 1.2x 1.2x 1.0x Market Price to Tangible Book |
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Why New York Mortgage Trust? Residential Mortgage REIT w/Self-Originated Portfolio Strategy Self-originated portfolio loans = lower cost, higher yielding assets High credit quality ARM loans = minimized credit risk Rapidly Growing Mortgage Origination Subsidiary (TRS) $4 billion current annual origination run rate (222% of $1.8B 2004 volume) >$5 billion projected 2006 originations (including new Wholesale Division) TRS provides low cost assets to REIT (at cost) and absorbs REIT G&A Dividend Protection and Growth Potential Portfolio yield pickup from transition of acquired to self-originated loans Positive contribution to earnings from TRS projected in 2006 1.0x Price to Book Attractive Relative to Peers (as of 10/20/05) 19% Insider Stock Ownership (Internally Managed) |
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3. Mortgage-Backed Portfolio 1. Introduction 4. Financial Analysis 5. Management & Board 2. Origination Capabilities New York Mortgage Trust, Inc. 5. Appendix / Additional Info |
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Financial Transparency Retained Loans Transferred to REIT at GAAP Cost Basis MBS are all Classified as "Held for Sale" Securitized Loans Classified "Held to Maturity" No Eurodollar or Structure Repo Financing Transactions |
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Originated Loan Summary Total Originations: Average Loan Balance (all production): Weighted Average Loan to Value: Weighted Average Middle FICO: Percent Purchase: Percent Hybrid/Adjustable Rate: Weighted Average Sales Price Over Par: Weighted Average Coupon: Portfolio $800 mil $479,000 69% 734 62% 100% 0.55% 5.12% YTD 3Q 2005 $2.6 bil $228,000* 74% 703 57% 51% 2.05% 6.19% * In March 2004 the company acquired eight origination branches from SIB Mortgage Corp., one of which originates only FHA Streamlined Refinance mortgages with low average balances. All loans from this branch are and will continue to be sold to third party investors. |
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Balance Sheet 3Q05 ($000) Cash $ 11,302 Investment securities & related accounts 797,079 Securitized mortgage loans 589,354 Mortgage loans held for investment 140,412 Mortgage loans held for sale & related accounts 272,086 Other assets 44,766 Total Assets $ 1,854,999 Financing arrangements $ 1,681,630 Other liabilities 21,316 Total Liabilities 1,702,946 Trust preferred subordinated debt 45,000 Stockholders' equity 107,054 Total Equity $ 1,152,054 Balance sheet presented as if Trust preferred subordinated debt is treated as equity |
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Income Statement 1Q05 ($000) REIT TRS Consolidated Interest income $ 45,911 $ 10,573 $ 56,484 Gain on sale of mortgage loans - 21,634 21,634 Brokered loan fees - 7,180 7,180 Other income 2,208 195 2,403 Total Revenue $ 48,119 $ 39,582 $ 87,701 Interest expense 34,001 7,284 41,285 Salaries, payroll 1,649 22,225 23,874 Brokered loan expenses - 5,689 5,689 Other expenses 878 12,607 13,485 Total Expense 36,528 47,805 84,333 Net Income 11,591 (8,223) 3,368 Adjustments to income: Forgone premium - 7,105 7,105 GRL acquisition - 2,511 2,511 One-time expenses - 4,050 4,050 Development initiatives - 1,789 1,789 Tax effect of adjustments - (6,877) (6,877) Adjusted Net Income $ 7,795 $ 355 $ 8,150 Income Statement YTD 3Q05 ($000) 26 |
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Experienced Management Team Steven B. Schnall Chairman, Co-CEO, President Founder, President and CEO of NYMC 15 years experience in mortgage banking David A. Akre Vice-Chairman, Co-CEO VP at Thornburg Mortgage - 6 years - whole loan trading, capital markets, ALCO GE Capital Mortgage - 7 years - pipeline hedging, loan securitization Michael I. Wirth, CPA Chief Financial Officer Former CFO of Newcastle Investment Co.; CharterMac, AMAC, & Aegis Realty 23 years of structured finance, governance, investment, buy-side and corporate strategy experience, Big 4 consulting and audit Steve R. Mumma, CPA Chief Investment & Operating Officer Former VP of Risk Management and Liquidity at Natexis ABM Corp - 12 years Co-managed ARMs and CMO floating rate portfolio for Credit Agricole - 3 years Joseph V. Fierro Chief Operating Officer - NYMC 22 Years mortgage banking experience |
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Strategic Independent Board Thomas K. White Fannie Mae, Senior Vice President Bear Stearns, Investment Banker National Council of State Housing Agencies, EVP David R. Bock The World Bank, Director of Operations Lehman Brothers, Managing Director Mary Dwyer Pembroke Freddie Mac, Director Senate Banking Committee, Counsel Citibank, Manager Alan L. Hainey GE Capital Mortgage, President & COO Steven G. Norcutt Reliastar, SVP / Portfolio Manager Centennial Mortgage, COO Jerome F. Sherman, PhD Creighton University, tenured Finance Professor University of Nebraska Independent Board Member Major Affiliations & Previous Positions |
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