New York Mortgage Trust Reports First Quarter 2005 Results
NEW YORK, NY - May 11, 2005 - New York Mortgage Trust, Inc. (NYSE: NTR), a self-advised residential mortgage finance company organized as a real estate investment trust ("REIT"), today reported results for the three months ended March 31, 2005. Highlights included:
- Completed its first loan securitization of $416.7 million in residential mortgage-backed securities;
- Diversified its capital structure through the issuance of $25 million of trust preferred securities;
- Total assets increased to $1.9 billion as of March 31, 2005 from $1.6 billion as of December 31, 2004;
- Record first quarter loan funding volume with growth of over 137% to $672.5 million as compared to $283.5 million for the three months ended March 31, 2004 and relative to an overall industry decline of 4.3% for the quarter as projected by the MBAA;
- Record first quarter loan application volume of $1.18 billion for the three months ended March 31, 2004;
- The net income of the Mortgage Portfolio Management segment of the Company totaled $4.3 million, or $0.24 per share, for the three months ended March 31, 2005;
- The Company had a consolidated net loss of $37,560 for the three months ended March 31, 2005; and
- Paid 2005 first quarter cash dividend of $0.25 per share on April 26, 2005.
First Quarter Financial Highlights
For the quarter ended March 31, 2005, the Company's Mortgage Portfolio Management segment (REIT operations exclusive of its taxable REIT subsidiaries) reported revenues of $14.9 million and net income of $4.3 million, or $0.24 per share. The Company's Mortgage Lending segment (the Company's wholly owned taxable REIT subsidiaries or "TRS") reported revenues of $9.0 million and a net loss of $4.3 million resulting in a consolidated net loss of $37,560 for the three months ended March 31, 2005.
The Mortgage Portfolio Management segment of the Company's REIT operations performed as expected in the current rate environment. The loss in the Company's TRS was primarily due to forgone gains on sale associated with the cost-basis transfer of originated loans to the REIT rather than being sold to third parties for which the Company would have earned additional premium income of over $2.1 million. In addition, the TRS had a one time, non-cash expense of approximately $800,000 related to its sublet of its old headquarters and expenses of approximately $1.4 million related to its assumption of the branches and sales force of GRL. The GRL acquisition played a significant role in the Company's mortgage origination growth in the first quarter of 2005.
"I am pleased to report that we remain on target to achieve a substantially self-originated portfolio by the end of the year. This is based largely on the fact that our annual retail origination volume is expected to reach approximately $3.4 billion this year - more than double our 2004 volume. Moreover, this projection excludes any results we will achieve in our new wholesale division which will be launched in July," Steven Schnall, Chairman and Co-Chief Executive Officer, commented. "Additionally, our mortgage portfolio performed well during the quarter despite a narrowing of net interest spreads by 18 basis points to 1.16%. The Company's Mortgage Portfolio Management segment generated first quarter earnings of $4.3 million. These results are demonstrative of the effectiveness of our interest rate management strategies which are focused on mitigating the impact of a flattening yield curve and continuing premium spread contraction as well as our focus on maintaining minimal credit risk within our self-originated portfolio. During the quarter, we also completed a $416.7 million securitization of high-credit quality, first-lien, ARM and hybrid-ARM mortgages and further diversified our capital structure and financing flexibility with the completion of a $25 million offering of trust preferred securities."
"To support our efforts to increase our market penetration and loan volume growth, we continued to focus on our mortgage origination growth drivers. Consistent with this strategy, during the first quarter we invested significantly in the expansion of our origination network, enhanced our team of resources and invested in our infrastructure and technology. We've also deployed initiatives to significantly expand our wholesale origination business and hired two seasoned executives with proven track records and over 25 years of mortgage banking experience to grow this segment. As a result of all these strategic investments we've incurred atypical expenses within our TRS and our first quarter consolidated results reflect an organization in rapid transition which is positioning itself for significant additional growth. Furthermore, the economic benefits of many of these initiatives, specifically relating to the integration of our mid-November 2004 acquisition of GRL, had yet to be fully realized during th e first quarter. Nonetheless, we are on track for 2005 to be an excellent year for New York Mortgage Trust and we're confident that these investments will facilitate long-term loan production growth and provide a positive impact to our earnings."
Michael Wirth, Chief Financial Officer, added, "As previously announced, we expected the atypical upfront costs of our acquisition of GRL to continue into the first quarter of 2005. For the three months ended March 31, 2005, we recognized approximately $1.4 million in non-cash expenses related to GRL, notably the remaining amortization of the pipeline premium we paid and the expensing of a ratable portion of retention bonuses, mostly in the form of performance related restricted stock which have vesting periods of six to 30 months. We have fully integrated the GRL sales force into our organization as demonstrated by our 137% growth in originations from the prior year's first quarter. Looking ahead, as first quarter seasonality typically lowers loan volume, we expect to realize the full benefit of these initiatives by even stronger origination volume in coming quarters. Our infrastructure improvements related to our operating systems and the expansion of our wholesale divisions will further provide growth as well as capacity and will create greater efficiencies and service to our borrowers and, internally, to our staff."
Mr. Wirth continued, "The strategies and related costs we employ today, once fully implemented, will create substantial reduced costs in the future. Our Mortgage Portfolio Management segment continues to be a solid performer from which we primarily base our dividend distribution policy. Although we forgo gain on sale premium income as we originate and retain loans in our investment portfolio, our cost basis of these loans gives us more protection as cost is typically below than the premiums paid for securities by passive investors - allowing for incremental yield and the ability to absorb additional hedging costs to mitigate interest rate risk. Furthermore, as these loans are transferred and booked at cost basis on our balance sheet, the net GAAP book value is understated relative to the fair market value of these assets."
As of March 31, 2005, the Company's total assets were approximately $1.9 billion, including approximately $1.1 billion of residential mortgage-backed securities, $417.4 million of loans collateralizing debt securities, $68.5 million of residential mortgage loans held for securitization, $99.6 million of residential mortgage loans held for sale, $91.3 million due from loan purchasers and $22.4 million of advance fundings for pending loans to be closed. The Company, at March 31, 2005, had $1.7 billion outstanding under its various financing facilities.
A breakdown of the Company's loan originations for the 2005 first quarter follows:
| Number
of Loans | | Aggregate
Principal
Balance
($ in millions) | | Percentage
of Total
Principal | | Weighted
Average
Interest
Rate | | Average
Principal
Balance | Weighted
Average |
| | | | | | | | | | | LTV | | FICO |
ARM
Fixed-rate | 1,313
1,274 | $ | 355.3
247.8 | | 52.8%
36.9% | | 5.61%
6.31% | $ | 270,603
194,541 | | 72.7
71.4 | | 708
719 |
| | | | | | | | | | | | | |
Subtotal-non-FHA | 2,587 | $ | 603.1 | | 89.7% | | 5.90% | $ | 233,145 | | 72.2 | | 712 |
FHA -ARM
FHA - fixed-rate | 59
462 | $ | 94
60.0 | | 1.4%
8.9% | | 5.10%
5.85% | $ | 160,093
129,756 | | 93.8
92.2 | | 648
635 |
| | | | | | | | | | | | | |
Subtotal - FHA | 521 | $ | 69.4 | | 10.3% | | 5.75% | $ | 133,191 | | 92.4 | | 637 |
Total ARM
Total fixed-rate | 1,372
1,736 | $
$ | 364.7
307.8 | | 54.2%
45.8% | | 5.60%
6.22% | $
$ | 265,851
177,299 | | 73.2
75.5 | | 706
703 |
| | | | | | | | | | | | | |
Total Originationsl | 3,108 | $ | 672.5 | | 100.0% | | 5.88% | $ | 216,390 | | 74.3 | | 705 |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Purchase mortgages
Refinancings | 1,717
870 | $ | 365.8
237.3 | | 54.4%
35.3% | | 6.03%
5.69% | $ | 213,081
272,743 | | 76.2
66.0 | | 723
696 |
| | | | | | | | | | | | | |
Subtotal-non-FHA* | 2,587 | $ | 603.1 | | 89.7% | | 5.90% | $ | 233,145 | | 72.2 | | 712 |
FHA - purchase
FHA - refinancings | 95
426 | $ | 15.1
54.3 | | 2.2%
8.1% | | 5.66%
5.78% | $ | 158,699
127,503 | | 97.2
91.0 | | 672
627 |
| | | | | | | | | | | | | |
Subtotal - FHA | 521 | $ | 69.4 | | 10.3% | | 5.75% | $ | 133,191 | | 92.4 | | 637 |
Total purchase
Total refinancings | 1,812
1,296 | $
$ | 380.9
291.6 | | 56.6%
43.4% | | 6.02%
5.71% | $
$ | 210,230
225,002 | | 7.0
70.7 | | 721
683 |
| | | | | | | | | | | | | |
Total Originationsl | 3,108 | $ | 672.5 | | 100.0% | | 5.88% | $ | 216,390 | | 74.3 | | 705 |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
*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.
Investment Activity
At the end of the first quarter, the Company's portfolio of investment securities totaled $1.1 billion and had a weighted average purchase price of 101.18. Approximately 57% of the securities purchased are backed by 3/1 hybrid adjustable rate mortgages, 25% are backed by 5/1 hybrid adjustable rate mortgages and the remaining 18% comprised of short reset floating rate securities. In addition, loans collateralizing debt obligations totaled $417 million and had an average purchase price of 100.97. Approximately 62% have interest rate resets of less than 24 months, 16% with resets less than 36 months and the remaining 22% with resets greater than 36 months. The investment securities and the loans collateralizing debt obligations are financed in part with debt totaling $1.4 billion.
The following table summarizes our residential mortgage-backed securities owned at March 31, 2005, classified by type of issuer or by ratings categories:
| Par Value | | Coupon | | Carrying Value | | Yield |
Agency ARMs
Non-Agency AAA - rated ARMs
Floating Rate CMOs | 546,833,685
408,474,733
154,295,367 | | 4.24%
4.68%
3.88% | | 548,943,790
408,569,557
155,476,448 | | 4.04%
4.39%
3.95% |
| | | | | | | |
Total | 1,109,603,785 | | 4.35% | | 1,112,989,795 | | 4.16% |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Securitized $419 Million of High-Credit Quality ARM Loans
Marking another significant milestone in the growth of the organization, the Company completed its first loan securitization by issuing $416.7 million of residential mortgage-backed securities backed by high-credit quality, first-lien, adjustable rate mortgages and hybrid adjustable rate mortgages (collectively "ARM" loans) on February 25, 2005, through New York Mortgage Trust 2005-1 (the "Trust").
Quarterly Dividends
The Company declared a cash dividend of $0.25 per share on shares of its common stock for the quarter ended March 31, 2004. The dividend was paid on April 26, 2005, to shareholders of record as of April 6, 2005. The quarterly dividends represent the distribution of the estimated net income of the New York Mortgage Trust, Inc., exclusive of any net income earned by its taxable REIT subsidiary, The New York Mortgage Company, LLC ("NYMC"), for the respective quarters.
Conference Call
On Thursday, May 12, 2005 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 first quarter financial results. The conference call dial-in number is 303-262-2140. 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. (NYMT) is a real estate investment trust (REIT) focused on owning and managing a leveraged portfolio of residential mortgage securities and a mortgage origination business. The mortgage portfolio is comprised largely of prime adjustable-rate and hybrid mortgage loans and securities, much of which, over time will be originated by NYMT's wholly owned mortgage origination business, The New York Mortgage Company, LLC (NYMC), a taxable REIT subsidiary. The ability to build a portion of its loan portfolio from loans internally originated is a cornerstone of NYMT's strategy.
For Further Information
AT THE COMPANY
Michael I. Wirth, Chief Financial Officer
Phone: 212-634-2342
Email: mwirth@nymtrust.com | AT FINANCIAL RELATIONS BOARD
Joe Calabrese (General) 212-445-8434
Julie Tu (Analysts) 212-445-8456 |
AT THE COMPANY
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 INCOME
(unaudited)
| For the Three Months Ended March 31, |
| | 2005 | | 2004 |
REVENUE: | | | | |
Gain on sales of mortgage loans | $ | 4,320,500 | $ | 3,506,089 |
Interest income: | | | | |
Loans held for sale | | 2,592,890 | | 1,261,069 |
Investment securities | | 12,721,738 | | - |
Loans collateralizing debt obligations | | 1,801,915 | | |
Brokered loan fees | | 2,000,233 | | 2,182,779 |
Gain on sale of securities | | 377,083 | | - |
Miscellaneous income | | 114,052 | | 15,769 |
| | | | |
Total revenue | | 23,928,411 | | 6,965,706 |
| | | | |
| | | | |
| | | | |
EXPENSES: | | | | |
Salaries, commissions and benefits | | 7,142,761 | | 2,719,178 |
Interest expense: | | | | |
Loans held for sale | | 1,847,810 | | 608,611 |
Investment securities and loans | | 9,764,172 | | - |
Subordinated debentures | | 77,756 | | - |
Brokered loan expenses | | 1,519,490 | | 1,284,219 |
Occupancy and equipment | | 2,134,634 | | 661,530 |
Marketing and promotion | | 1,399,866 | | 484,286 |
Data processing and communications | | 517,721 | | 168,043 |
Office supplies and expenses | | 572,686 | | 217,871 |
Professional fees | | 744,068 | | 253,088 |
Travel and entertainment | | 215,457 | | 188,348 |
Depreciation and amortization | | 342,892 | | 102,953 |
Other | | 376,658 | | 160,075 |
| | | | |
Total expenses | | 26,655,971 | | 6,848,202 |
| | | | |
(LOSS) INCOME BEFORE INCOME TAX BENEFIT | | (2,727,560) | | 117,504 |
Income tax benefit | | 2,690,000 | | - |
| | | | |
NET (LOSS) INCOME | $ | (37,560) | $ | 117,504 |
| | | | |
| | | | |
| | | | |
Basic and diluted loss per share (1) | $ | (0.0) | $ | - |
| | | | |
| | | | |
| | | | |
Weighted average shares outstanding-basic and diluted | | 17,797,375 | | - |
| | | | |
| | | | |
| | | | |
NEW YORK MORTGAGE TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| | March 31,
2005
(unaudited) | | December 31,
2004 |
ASSETS |
Cash and cash equivalents | $ | 6,906,403 | $ | 7,613,106 |
Restricted cash | | 415,335 | | 2,341,712 |
Investment securities - available for sale | | 1,112,989,795 | | 1,204,744,714 |
Due from loan purchasers | | 91,340,070 | | 79,904,315 |
Escrow deposits - pending loan closings | | 22,441,628 | | 16,235,638 |
Accounts and accrued interest receivable | | 13,046,687 | | 15,554,201 |
Mortgage loans held for sale | | 99,554,363 | | 85,384,927 |
Mortgage loans collateralizing debt obligations | | 417,383,398 | | - |
Mortgage loans held for investment | | 68,462,832 | | 190,153,103 |
Prepaid and other assets | | 8,063,281 | | 4,351,869 |
Derivative assets | | 10,796,803 | | 3,677,572 |
Property and equipment, net | | 4,984,767 | | 4,801,302 |
| | | | |
TOTAL ASSETS | $ | 1,856,385,362 | $ | 1,614,762,459 |
| | | | |
| | | | |
| | | | |
LIABILITIES AND STOCKHOLDERS' EQUITY | | |
LIABILITIES: | | | | |
Financing arrangements, portfolio investments | $ | 1,423,641,000 | $ | 1,115,809,285 |
Financing arrangements, loans held for sale/for investment | | 271,769,429 | | 359,202,980 |
Due to loan purchasers | | 415,235 | | 350,884 |
Accounts payable and accrued expenses | | 19,685,620 | | 19,485,241 |
Subordinated debentures | | 25,000,000 | | - |
Derivative liabilities | | 838,928 | | 164,816 |
Other liabilities | | 376,971 | | 267,034 |
| | | | |
Total liabilities | | 1,741,727,183 | | 1,495,280,240 |
| | | | |
COMMITMENTS AND CONTINGENCIES (Note 10) | | | | |
STOCKHOLDERS' EQUITY : | | | | |
Common stock, $0.01 par value, 400,000,000 shares authorized 18,114,445 shares issued and 17,797,375 outstanding at March 31, 2005 and December 31, 2004 | | 180,621 | | 180,621 |
Additional paid-in capital | | 115,485,603 | | 119,045,450 |
Accumulated other comprehensive (loss) income | | (1,008,045) | | 256,148 |
| | | | |
Total stockholders' equity | | 114,658,179 | | 119,482,219 |
| | | | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 1,856,385,362 | $ | 1,614,762,459 |
| | | | |
| | | | |
| | | | |
NEW YORK MORTGAGE TRUST, INC. AND SUBSIDIARIES
SELECTED SEGMENT REPORTING
(unaudited)
| | Mortgage Portfolio Management Segment | | Mortgage Lending
Segment | | Total |
Total revenue | $ | 14,900,736 | $ | 9,027,675 | $ | 23,928,411 |
Total expense | | 10,599,341 | | 13,366,630 | | 23,965,971 |
| | | | | | |
Net income (loss) | $ | 4,301,395 | $ | (4,338,955) | $ | (37,560) |
| | | | | | |
| | | | | | |
| | | | | | |
Basic and diluted income per share | $ | 0.24 | $ | (0.24) | $ | 0.00 |
Total assets | $ | 1,619,934,271 | $ | 236,451,091 | $ | 1,856,385,362 |
Total equity | $ | $105,964,803 | $ | 8,693,376 | $ | 114,658,179 |
