Exhibit 99.1
New York Mortgage Trust Reports Third Quarter 2006 Results
| · | Consolidated net loss of $0.21 per share for the quarter ended September 30, 2006 as compared to a net income of $0.01 per share for the immediate preceding quarter ended June 30, 2006 and net income of $0.16 per share for the quarter ended September 30, 2005. |
| · | REIT (Mortgage Portfolio Management segment) earnings of $0.07 per share for the quarter ended September 30, 2006 as compared to net income of $0.13 per share for the immediate preceding quarter ended June 30, 2006 and net income of $0.21 per share for the quarter ended September 30, 2005. |
| · | Mortgage Lending segment net loss of $0.28 per share for the quarter ended September 30, 2006 as compared to a net loss of $0.12 per share for the immediate preceding quarter ended June 30, 2006 and a net loss of $0.05 per share for the quarter ended September 30, 2005. |
| · | Mortgage Lending segment net loss includes a $0.13 per share loan loss associated primarily with early payment defaults incurred in the Company’s sub-prime lending business which has been substantially discontinued. |
| · | Board of Directors declared a third quarter 2006 cash dividend of $0.14 per share. |
| · | The Company announced on October 31st that it has engaged Milestone Advisors, LLC as its financial advisor to assist it in the review and exploration of its strategic alternatives. As a part of that process the Company is currently engaged in discussions regarding a possible sale or merger of the Company. |
NEW YORK, NY November 7, 2006 - New York Mortgage Trust, Inc. (NYSE: NTR), a self-advised residential mortgage finance company organized as a real estate investment trust (“REIT”) for federal income tax purposes, today reported results for the quarter ended September 30, 2006.
Comparison of the Quarters Ended September 30, 2006 and 2005
| · | Quarterly loan origination volume of $602.8 million for the quarter ended September 30, 2006 as compared to $741.8 million for the immediate preceding quarter ended June 30, 2006 and $1.0 billion for the quarter ended September 30, 2005. |
| · | Consolidated net loss of $3.9 million for the quarter ended September 30, 2006 as compared to a net income of $178,000 for the immediate preceding quarter ended June 30, 2006 and net income of $2.9 million for the quarter ended September 30, 2005. |
| · | REIT (Mortgage Portfolio Management segment) earnings of $1.2 million for the quarter ended September 30, 2006 as compared to net income of $2.4 million for the immediately preceding quarter ended June 30, 2006 and net income of $3.8 million for the quarter ended September 30, 2005. |
Third Quarter Results
For the quarter ended September 30, 2006, the Company’s Mortgage Portfolio Management segment (REIT operations exclusive of its taxable REIT subsidiaries) reported net revenues of $1.5 million and a net income of $1.2 million, or $0.07 per share.
The Company’s Mortgage Lending segment (the Company’s wholly owned taxable REIT subsidiaries or “TRS”) reported net revenues of $2.4 million (including $4.0 million in loan losses) and a net loss of $5.1 million for the quarter ended September 30, 2006. On a consolidated basis, the Company reported net loss of $3.9 million for the quarter ended September 30, 2006.
Comments from Management
Steven B. Schnall, Chairman, President and Co-Chief Executive Officer, commented, “The deterioration in third quarter operating results is attributable to continued pressure in both our Mortgage Portfolio Management and our Mortgage Lending segments. The decline in earnings in our Mortgage Portfolio Management segment was largely the result of the persistence of a flat to inverted yield curve and decreasing net interest spreads due to hedge maturities and, to a lesser extent, high prepayment rates associated with the re-pricing of adjustable rate mortgage loans held in our $1.2 billion loan portfolio. Specifically, our net interest margin declined to 16 basis points, as compared to 78 basis points from the immediately preceding second quarter of 2006. Additionally, on a positive note, the net duration gap between the average lives of our assets and our liabilities declined slightly to approximately six months and the credit characteristics of our portfolio remains very strong, with total loan delinquencies of 1.03% of portfolio, loan delinquencies greater than 90 days representing only 0.41% of portfolio value and credit losses since inception of only $52,000.”
Mr. Schnall added, “Our Mortgage Lending segment also experienced significant earnings pressure primarily as the result of a 19% decrease in our mortgage origination volume from the second quarter of 2006 (as compared to a 14% nationwide decline in mortgage originations for the same period - as reported by the Mortgage Bankers Association) as well as continued pricing pressure on premiums earned on loans sold to third parties. Our third quarter earnings were further affected by atypical, and largely non-recurring, loan losses due primarily to early payment defaults incurred on sub-prime loans made during the early part of 2006. Of note, though, is that we have largely discontinued making sub-prime loans other than in cases where the loans are either prior-approved by loan purchasers or simply brokered to third parties - both of which serve to dramatically reduce our risk going forward. Additionally, on a positive note, both our loan application and funding volumes for October 2006 have taken a slight positive turn as compared to September 2006 results.”
A breakdown of the Company’s loan originations by payment stream for the quarter ended September 30, 2006 follows:
MORTGAGE LOAN ORIGINATION SUMMARY
For the Third Quarter Ended September 30, 2006
(Dollar amounts in thousands) | | Number of Loans | | Par Amount | | % of Total | |
Payment Stream | | | | | | | |
Fixed Rate | | | | | | | |
| FHA/VA | | | 82 | | $ | 12,882 | | | 2.1 | % |
| Conventional Conforming | | | 1,577 | | | 270,379 | | | 44.9 | % |
| Conventional Jumbo | | | 132 | | | 80,705 | | | 13.4 | % |
| Total Fixed Rate | | | 1,791 | | | 363,966 | | | 60.4 | % |
ARMs | | | | | | | | | | |
| FHA/VA | | | 3 | | | 1,271 | | | 0.2 | % |
| Conventional | | | 794 | | | 237,572 | | | 39.4 | % |
| Total ARMs | | | 797 | | | 238,843 | | | 39.6 | % |
| Total | | | 2,588 | | $ | 602,809 | | | 100.0 | % |
Loan Purpose | | | | | | | | | | |
| Conventional | | | 2,503 | | $ | 588,656 | | | 97.7 | % |
| FHA/VA | | | 85 | | | 14,153 | | | 2.3 | % |
| Total | | | 2,588 | | $ | 602,809 | | | 100.0 | % |
Documentation Type | | | | | | | | | | |
| Full Documentation | | | 1,285 | | $ | 288,726 | | | 47.9 | % |
| Stated Income | | | 545 | | | 141,503 | | | 23.5 | % |
| Stated Income/Stated Assets | | | 323 | | | 73,166 | | | 12.1 | % |
| No Documentation | | | 266 | | | 63,481 | | | 10.5 | % |
| No Ratio | | | 116 | | | 27,091 | | | 4.5 | % |
| Stated Asset | | | 4 | | | 578 | | | 0.1 | % |
| Other | | | 49 | | | 8,264 | | | 1.4 | % |
| Total | | | 2,588 | | $ | 602,809 | | | 100.0 | % |
A breakdown by credit quality of the Company’s loan originations for third quarter 2006 follows:
| | | | | | | | | | | | | | | | | | | | Weighted | |
| | | | | | | | | | | | | | | | | | | | Average | |
| | | | Number of Loans | | | Aggregate Principal Balance ($ in millions) | | | Percentage Of Total Principal | | | Weighted Average Interest Rate | | | | Average Principal Balance | | | LTV | | | FICO | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| ARM | | | 794 | | $ | 237.6 | | | 39.4 | % | | 7.27 | % | | $ | 299,209 | | | 72.8 | | | 704 | |
| Fixed-rate | | | 1,709 | | | 351.1 | | | 58.2 | % | | 7.48 | % | | | 205,433 | | | 75.6 | | | 711 | |
Subtotal-non-FHA | | | 2,503 | | | 588.7 | | | 97.6 | % | | 7.39 | % | | | 235,180 | | | 74.5 | | | 708 | |
| FHA - ARM | | | 3 | | | 1.2 | | | 0.2 | % | | 6.06 | % | | | 423,701 | | | 96.1 | | | 681 | |
| FHA - fixed-rate | | | 82 | | | 12.9 | | | 2.2 | % | | 6.61 | % | | | 157,096 | | | 95.7 | | | 652 | |
Subtotal - FHA | | | 85 | | | 14.1 | | | 2.4 | % | | 6.56 | % | | | 166,506 | | | 95.7 | | | 654 | |
| Total ARM | | | 797 | | | 238.8 | | | 39.6 | % | | 7.27 | % | | | 299,678 | | | 72.9 | | | 704 | |
| Total fixed-rate | | | 1,791 | | | 364.0 | | | 60.4 | % | | 7.45 | % | | | 203,220 | | | 76.4 | | | 709 | |
Total Originations | | | 2,588 | | $ | 602.8 | | | 100.0 | % | | 7.38 | % | | $ | 232,925 | | | 75.0 | | | 707 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Purchase mortgages | | | 1,594 | | $ | 352.6 | | | 58.5 | % | | 7.47 | % | | $ | 221,215 | | | 79.0 | | | 718 | |
| Refinancings | | | 909 | | | 236.1 | | | 39.1 | % | | 7.28 | % | | | 259,670 | | | 67.8 | | | 693 | |
Subtotal-non-FHA | | | 2,503 | | | 588.7 | | | 97.6 | % | | 7.39 | % | | | 235,180 | | | 74.5 | | | 708 | |
| FHA - purchase | | | 70 | | | 11.9 | | | 2.0 | % | | 6.50 | % | | | 170,453 | | | 96.5 | | | 664 | |
| FHA - refinancings | | | 15 | | | 2.2 | | | 0.4 | % | | 6.84 | % | | | 148,087 | | | 91.4 | | | 604 | |
Subtotal - FHA | | | 85 | | | 14.1 | | | 2.4 | % | | 6.56 | % | | | 166,506 | | | 95.7 | | | 654 | |
| Total purchase | | | 1,664 | | | 364.5 | | | 60.5 | % | | 7.44 | % | | | 219,079 | | | 79.5 | | | 716 | |
| Total refinancings | | | 924 | | | 238.3 | | | 39.5 | % | | 7.27 | % | | | 257,858 | | | 68.0 | | | 692 | |
Total Originations | | | 2,588 | | $ | 602.8 | | | 100.0 | % | | 7.38 | % | | $ | 232,925 | | | 75.0 | | | 707 | |
Note: FHA originations are Streamlined Refinance mortgages with low average balances. All FHA loans are and will continue to be sold or brokered to third party investors.
Investment Activity
As of September 30, 2006, the Company’s portfolio of investment securities totaled $524.0 million and had a weighted average purchase price of 100.31. Approximately 41% of the securities purchased have rate resets in less than six months, 8% reset in six to 24 months and the remaining 51% reset in less than five years. In addition, loans held in securitization trusts totaled $628.6 million and had an average origination value (purchase price) of 100.66. Approximately 26% of loans held in the portfolio have interest rate resets of less than 6 months, 9% have resets between 6 months and 24 months and the remaining 65% have resets less than 48 months. The investment securities and the loans held in securitization trusts are financed in part with debt totaling $1.1 billion at September 30, 2006.
The net interest margin on the Company’s mortgage portfolio investments for the quarter ended September 30, 2006 averaged 16 basis points, down from 78 basis points in the quarter ended June 30, 2006. This decrease in spreads is primarily due to hedge maturities and, to a lesser extent, to the re-pricing of adjustable rate mortgage loans held in our portfolio.
The following table summarizes the Company’s investment portfolio of residential mortgage-backed securities and loans owned at September 30, 2006, classified by relevant categories:
| | | Par Value | | Coupon | | Carrying Value | | Yield | |
| Agency REMIC floaters | | $ | 178,388,984 | | | 6.68 | % | $ | 178,990,895 | | | 6.56 | % |
| | | | | | | | | | | | | | |
| Private label floaters | | | 27,573,587 | | | 6.11 | % | | 27,499,840 | | | 6.28 | % |
| | | | | | | | | | | | | | |
| Private label ARMs | | | 296,201,236 | | | 4.81 | % | | 293,237,365 | | | 6.03 | % |
| | | | | | | | | | | | | | |
| NYMT retained securities | | | 25,111,629 | | | 5.65 | % | | 24,240,627 | | | 7.91 | % |
| | | | | | | | | | | | | | |
| Loans held in securitization trusts | | | 624,525,836 | | | 5.31 | % | | 628,624,669 | | | 6.00 | % |
| | | | | | | | | | | | | | |
| Total/Weighted Average | | $ | 1,151,801,272 | | | 5.42 | % | $ | 1,152,593,396 | | | 6.14 | % |
Conference Call
On Wednesday, November 8, 2006 at 10:00 a.m. Eastern time, New York Mortgage Trust's executive management will host a conference call and audio webcast highlighting the Company's third quarter financial results. The conference call dial-in number is 303-262-2138. A live audio webcast of the conference call can be accessed via the Internet, on a listen-only basis, at http://www.earnings.com or at the Investor Relations section of the Company's website at http://www.nymtrust.com. Please allow extra time, prior to the call, to visit the site and download the necessary software to listen to the Internet broadcast. The online archive of the webcast will be available for approximately 90 days.
About New York Mortgage Trust
New York Mortgage Trust, Inc., a real estate investment trust (REIT), is engaged in the origination of and investment in residential mortgage loans throughout the United States. The Company, through its wholly owned taxable REIT subsidiary, The New York Mortgage Company, LLC (“NYMC”), originates a broad spectrum of residential loan products with a focus on high credit quality, or prime, loans. In addition to prime loans, NYMC also originates jumbo loans, alternative-A loans, sub-prime loans and home equity or second mortgage loans through its retail and wholesale origination branch network. The Company's REIT portfolio is comprised of securitized, high credit quality, adjustable and hybrid ARM loans, the majority of which, over time, will be originated by NYMC. As a REIT, the company is not subject to federal income tax provided that it distributes at least 90% of its REIT taxable income to its stockholders.
For Further Information
| AT THE COMPANY | AT FINANCIAL RELATIONS BOARD |
| Steven R. Mumma, Chief Financial Officer | Joe Calabrese (General) 212-827-3772 |
| Phone: 212-634-2411 | Julie Tu (Analysts) 212-827-3776 |
| Email: smumma@nymtrust.com | |
This news release contains forward-looking statements that predict or describe future events or trends. The matters described in these forward- looking statements are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond the Company's control. The Company faces many risks that could cause its actual performance to differ materially from the results predicted by its forward- looking statements, including, without limitation, the possibilities that a rise in interest rates may cause a decline in the market value of the Company's assets, a decrease in the demand for mortgage loans may have a negative effect on the Company's volume of closed loan originations, prepayment rates may change, borrowings to finance the purchase of assets may not be available on favorable terms, the Company may not be able to maintain its qualification as a REIT for federal tax purposes, the Company may experience the risks associated with investing in real estate, including changes in business conditions and the general economy, and the Company's hedging strategies may not be effective. The reports that the Company files with the Securities and Exchange Commission contain a fuller description of these and many other risks to which the Company is subject. Because of those risks, the Company's actual results, performance or achievements may differ materially from the results, performance or achievements contemplated by its forward-looking statements. The information set forth in this news release represents management's current expectations and intentions. The Company assumes no responsibility to issue updates to the forward-looking matters discussed in this news release.
FINANCIAL TABLES FOLLOW
NEW YORK MORTGAGE TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollar amounts in thousands, except per share data)
(unaudited)
| | For the Nine Months Ended September 30, | | For the Three Months Ended September 30, | |
| | | 2006 | | 2005 | | 2006 | | 2005 | |
| | | | | | | | | | |
| REVENUE: | | | | | | | | | |
| Interest income: | | | | | | | | | |
| Investment securities and loans held in securitization trusts | | $ | 50,050 | | $ | 40,523 | | $ | 16,998 | | $ | 13,442 | |
| Loans held for investment | | | — | | | 5,388 | | | — | | | 1,783 | |
| Loans held for sale | | | 12,155 | | | 10,573 | | | 3,880 | | | 4,473 | |
| Total interest income | | | 62,205 | | | 56,484 | | | 20,878 | | | 19,698 | |
| Interest expense: | | | | | | | | | | | | | |
| Investment securities and loans held in securitization trusts | | | 42,320 | | | 30,090 | | | 15,882 | | | 10,751 | |
| Loans held for investment | | | — | | | 3,911 | | | — | | | 1,366 | |
| Loans held for sale | | | 9,284 | | | 7,284 | | | 3,337 | | | 3,441 | |
| Subordinated debentures | | | 2,656 | | | 1,095 | | | 877 | | | 601 | |
| Total interest expense | | | 54,260 | | | 42,380 | | | 20,096 | | | 16,159 | |
| Net interest income | | | 7,945 | | | 14,104 | | | 782 | | | 3,539 | |
| OTHER INCOME (EXPENSE): | | | | | | | | | | | | | |
| Gain on sales of mortgage loans | | | 14,362 | | | 21,634 | | | 4,311 | | | 8,985 | |
| Brokered loan fees | | | 8,672 | | | 7,181 | | | 2,402 | | | 2,647 | |
| (Loss) gain on sale of current period securitized loans | | | (747 | ) | | — | | | — | | | — | |
| (Loss) gain on sale of securities and related hedges | | | (529 | ) | | 2,207 | | | 440 | | | 1,286 | |
| Loan losses | | | (4,077 | ) | | — | | | (4,077 | ) | | — | |
| Miscellaneous income (expense) | | | 310 | | | 195 | | | 43 | | | 91 | |
| Total other income | | | 17,991 | | | 31,217 | | | 3,119 | | | 13,009 | |
| EXPENSES: | | | | | | | | | | | | | |
| Salaries and benefits | | | 17,720 | | | 23,875 | | | 5,378 | | | 7,302 | |
| Brokered loan expenses | | | 6,609 | | | 5,689 | | | 1,674 | | | 1,483 | |
| Occupancy and equipment | | | 3,871 | | | 4,981 | | | 1,256 | | | 1,265 | |
| Marketing and promotion | | | 1,643 | | | 3,900 | | | 427 | | | 1,310 | |
| Data processing and communications | | | 1,938 | | | 1,807 | | | 524 | | | 618 | |
| Office supplies and expenses | | | 1,464 | | | 1,909 | | | 426 | | | 651 | |
| Professional fees | | | 3,329 | | | 2,812 | | | 798 | | | 966 | |
| Travel and entertainment | | | 409 | | | 707 | | | 126 | | | 261 | |
| Depreciation and amortization | | | 1,625 | | | 1,069 | | | 539 | | | 302 | |
| Other | | | 1,308 | | | 1,084 | | | 536 | | | 531 | |
| Total expenses | | | 39,916 | | | 47,833 | | | 11,684 | | | 14,689 | |
| (LOSS) INCOME BEFORE INCOME TAX BENEFIT | | | (13,980 | ) | | (2,512 | ) | | (7,783 | ) | | 1,859 | |
| Income tax benefit | | | 8,494 | | | 5,880 | | | 3,915 | | | 1,000 | |
| NET (LOSS) INCOME | | $ | (5,486 | ) | $ | 3,368 | | $ | (3,868 | ) | $ | 2,859 | |
| Basic (loss) income per share | | $ | (0.31 | ) | $ | 0.19 | | $ | (0.21 | ) | $ | 0.16 | |
| Diluted (loss) income per share | | $ | (0.31 | ) | $ | 0.19 | | $ | (0.21 | ) | $ | 0.16 | |
| Weighted average shares outstanding-basic | | | 17,975 | | | 17,855 | | | 18,025 | | | 17,958 | |
| Weighted average shares outstanding-diluted | | | 17,975 | | | 18,121 | | | 18,025 | | | 18,242 | |
NEW YORK MORTGAGE TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands)
| | | September 30, 2006 (unaudited) | | December 31, 2005 | |
ASSETS | | | | | |
| Cash and cash equivalents | | $ | 6,879 | | $ | 9,056 | |
| Restricted cash | | | 1,979 | | | 5,468 | |
| Investment securities - available for sale | | | 523,969 | | | 716,482 | |
| Due from loan purchasers | | | 132,950 | | | 121,813 | |
| Escrow deposits - pending loan closings | | | 1,622 | | | 1,434 | |
| Accounts and accrued interest receivable | | | 9,256 | | | 14,866 | |
| Mortgage loans held for sale | | | 109,197 | | | 108,271 | |
| Mortgage loans held in securitization trusts | | | 628,625 | | | 776,610 | |
| Mortgage loans held for investment | | | — | | | 4,060 | |
| Prepaid and other assets | | | 27,118 | | | 16,505 | |
| Derivative assets | | | 3,402 | | | 9,846 | |
| Property and equipment, net | | | 6,838 | | | 6,882 | |
| TOTAL ASSETS | | $ | 1,451,835 | | $ | 1,791,293 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | |
| LIABILITIES: | | | | | | | |
| Financing arrangements, portfolio investments | | $ | 886,956 | | $ | 1,166,499 | |
| Financing arrangements, loans held for sale/for investment | | | 208,285 | | | 225,186 | |
| Collateralized debt obligations | | | 203,550 | | | 228,226 | |
| Due to loan purchasers | | | 11,677 | | | 1,652 | |
| Accounts payable and accrued expenses | | | 14,736 | | | 22,794 | |
| Subordinated debentures | | | 45,000 | | | 45,000 | |
| Derivative liabilities | | | 686 | | | 394 | |
| Other liabilities | | | 202 | | | 584 | |
| Total liabilities | | | 1,371,092 | | | 1,690,335 | |
| COMMITMENTS AND CONTINGENCIES | | | | | | | |
| STOCKHOLDERS’ EQUITY: | | | | | | | |
| Common stock, $0.01 par value, 400,000,000 shares authorized, 18,327,371 shares issued and 18,077,160 outstanding at | | | | | | | |
| September 30, 2006 and 18,258,221 shares issued and 17,984,843 outstanding at December 31, 2005 | | | 183 | | | 183 | |
| Additional paid-in capital | | | 100,324 | | | 107,573 | |
| Accumulated other comprehensive (loss) income | | | (5,570 | ) | | 1,910 | |
| Accumulated deficit | | | (14,194 | ) | | (8,708 | ) |
| Total stockholders’ equity | | | 80,743 | | | 100,958 | |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | | $ | 1,451,835 | | $ | 1,791,293 | |
NEW YORK MORTGAGE TRUST, INC. AND SUBSIDIARIES
SELECTED SEGMENT REPORTING
(Dollar amounts in thousands)
| | | For the Nine Months Ended September 30, 2006 | |
| | | Mortgage Portfolio Management Segment | | Mortgage Lending Segment | | Total | |
| Total revenue | | $ | 7,149 | | $ | 18,787 | | $ | 25,936 | |
| Total expense | | | 1,473 | | | 29,949 | | | 31,422 | |
| Net income (loss) | | $ | 5,676 | | $ | (11,162 | ) | $ | (5,486 | ) |
| | | | | | | | | | | |
| Total assets | | $ | 1,163,802 | | $ | 288,033 | | $ | 1,451,835 | |
| | | For the Nine Months Ended September 30, 2005 | |
| | | Mortgage Portfolio Management Segment | | Mortgage Lending Segment | | Total | |
| Total revenue | | $ | 14,118 | | $ | 31,203 | | $ | 45,321 | |
| Total expense | | | 2,527 | | | 39,426 | | | 41,953 | |
| Net income (loss) | | $ | 11,591 | | $ | (8,223 | ) | $ | 3,368 | |
| | | For the Three Months Ended September 30, 2006 | |
| | | Mortgage Portfolio Management Segment | | Mortgage Lending Segment | | Total | |
| Total revenue | | $ | 1,504 | | $ | 2,397 | | $ | 3,901 | |
| Total expense | | | 279 | | | 7,490 | | | 7,769 | |
| Net income (loss) | | $ | 1,225 | | $ | (5,093 | ) | $ | (3,868 | ) |
| | | For the Three Months Ended September 30, 2005 | |
| | | Mortgage Portfolio Management Segment | | Mortgage Lending Segment | | Total | |
| Total revenue | | $ | 4,394 | | $ | 12,154 | | $ | 16,548 | |
| Total expense | | | 599 | | | 13,090 | | | 13,689 | |
| Net income (loss) | | $ | 3,795 | | $ | (936 | ) | $ | 2,859 | |
