NYMT - Earnings call transcript Q3 2024 | New York Mortgage Trust, Inc.

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Operator

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the New York Mortgage Trust Third Quarter 2024 Results Conference Call [Operator Instructions]. This conference is being recorded on Thursday, October 31, 2024. I would now like to turn the call over to Kristi Mussallem, Investor Relations. Please go ahead.

Kristi Mussallem

you XXXX joining Earnings thank Trust York and Quarter Third Call. morning, all New for Mortgage Good A press released release York Mortgage and supplemental financial third XXXX presentation quarter results was yesterday. Trust's with New supplemental Both the company's at www.nymtrust.com. presentation available on website financial press the are and release

are in are company's access website. like this management Events we you live hosting during me to the of may not inform section Act which would that conference you a At within today's Additionally, and Private which of Presentations Reform historical, call, made deemed webcast meaning the statements can statements Litigation forward-looking of the be the of time, XXXX. call, certain the Securities

assumptions, Mortgage expectations cause with assurance believes and the no and from from time York be forward-looking that company's yesterday's reflected its New time detailed Securities expectations statements the to release Factors results Trust expectations could can Commission. on filings that Exchange it are and the risks in in will give these Although materially reasonable differ attained. actual in are to based press

I time, would to Serrano, Chief introduce this Executive go Officer. at Now ahead. Jason Jason, please like

Jason Serrano

Thank earnings New third joining you call. morning. York Trust's Mortgage Good Hi. for quarter

that to the began dividend. company higher were either recurring the a strategy we President; on ago. support through result year of Mah, flexibility current activity, Kristine Joining is was believe view spreads. versus returns to a high decreasing RBS $X.XX. earnings improved obtain build power exposure Thus, found of of capital capital option return foundation we With with at over The through no me internal our which Said this previous the return The earnings third our total assets market we began monetization today earnings subsequent dual Nick loans earnings consistent of for levels interest, in contain quarter to simply, portfolio interest Nario, the income reported a CFO. the carry our of future short-duration for of targets relying and and income The sharply of portfolio per that plan, share maintaining retain also meeting utilization. we event coupon equity very to Agency at raising dislocation. set level the within wider into higher rotated benefit value of multifamily primarily in opportunities credit our capital of low or and while could wanted a

growth. is With the despite There's much Ultimately, debt we concerned bring we a well running are on previously, certain government market our throughout or U.S. market sectors stated warehouse With achieve buy-side a some here depressed consumer within private liquidity to team rate. about we important financing The company's of that the a Last financing to year securitization low against Nick trades. with On $X XX% our over and discuss out a large risk in supplemental, related back, we've a which record minimize Stepping years leverage activity was extremely X, the mark-to-market today. management its on growth. historically quarter, is developments X predicament, Page increased X/X were sheet we we a high objectives federal very our year-to-date. and are quarter. large further shared to we the levels U.S. will earnings monitor. performing of markets, As in similar with debt about opportunities it show potential touch high U.S. Today, did show crowd scale. we consumer portfolio portfolio deficit that economy savings our recourse billion consequences last Page grew primary larger unemployment, XX year slowing but our and potential. these a balance consequently is and of to plenty accelerate meeting underinvested markets. the our to rare said, by earlier experience of event. Admittedly, not may concerned investments. persistently of We from in the our credit graph

pace income. a However, veer finally investments and capital quarter, we a did was maintain the fundamentally from net interest the without first objective. the the without to momentum had earnings, to more XX% growth. to have in of deliberate containing particularly we see portfolio of of felt than corporate adjusted year-to-date our debt At excess interest level having and the to our by our with. the to balance $XXX growth year-to-date third seen million quarter on income extremely depleting the of each of approach we growth quarter, contend build of opportunity $XXX end a With Notably, not income accomplished it tremendous important Despite for the substantial We course company increase that a of we deployment adjusted sheet to quarter, stable increase year. maturities cumulative measured or over this XX% we third impact million of strong quarterly million had $X near-term liquidity. liquidity, prioritizing

rotate our on multifamily assets, mezzanine our redemptions $XXX potential extracting about by book. of from nearly continuing received full particularly in million future expected excited are to lending We capital earnings

my Lastly, by I discussing book wanted to wrap value. company comments up

I provide cap past quarter, broader will and downside to term third the per capital the to allocation sheet different dislocation. particularly Agency details potential $X.XX comment of that flat of. agency and approximately off from is believe quarterly wanted the XX a on the our very Kristine which attributed to a While book, is market our in is to of Page support foundation To of to the against X/XX build for We the market the a solid of XX% end balance recent on trading supplemental. the cash trade. RMBS our market At contains to cap, the share in XX% the company allocated sector relatively near capital from of start, composition highlight shown will move,

per bridge $X.XX attributed term loans efficient is securitizations. BPL in share is now financed to mostly that Additionally,

will been income of This As a total performance Nick $X.XX share recurring has been has to show the primary strategy steady a of the source of we attributed to JV After volatility. book. per excellent, show, source value that, company. equity multifamily the previous book providing

to Kristine today. will $XX recent of company remaining is the However, discuss, exposure immaterial after dispositions, which million

At time, value, we our to to by be I'll over par. medium- By balance for positioned after the to to of long-term call supported shareholder growing our potentially are value pass this a a financing maturing consideration an we share, strong $X.XX additional a Finally, share believe asset discuss financial less holdings Christine? maintaining per view at well XXXX, the growth and remainder of Kristine book income can gained is asset base. corporate above highlights. sheet per $X.XX our in

Kristine Nario

main our results our Thank refer Good quarter morning. commentary quarterly and to you, financial financial Jason. comparative information the I drivers my supplemental. the of of will third focus on section

loss second share undepreciated in income continued third that as in the As provide Jason quarter. recurring resulted our focus $X.XX investing to in the $X.XX quarter per of in undepreciated per compared on earnings assets of share highlighted,

unrealized in interest impacted partially $X.XX our per to primarily in contributing valuation interest share our improvements of swaps. by and in which losses positively offset per earnings gains, $X.XX consisting portfolios Our were on rates, residential recognized derivative loan by of were changes instruments, share bond due rate

net and on assets, third the a ending investment income quarter interest at rotating basis of by $X.X our and respectively, the billion year-to-date, earning investment intent portfolio $X.X our billion With as of September. increased portfolio billion approximately $X into during

from second $X.XX a contribution quarter a year net $X.XX to in $X.XX the As in ago. result, and interest increased current the income quarter

increased XX, And increased yield in Our third as from million also basis net to Slide in $XX.X but quarterly the Net by points second slightly million XX points on points basis growing interest-earning spread year-to-date. quarter, adjusted interest few detailed basis the in XX steadily in have interest million the the income last quarter $XX.X has and increased over average year-to-date. $X.X our lower quarters, assets was the by quarter. XX quarter during by

financing interest the and and quarter XX reducing also Our our by swaps benefit average rate basis during continued points portfolio, respectively. year-to-date, XX to costs

estate to disposition the our in We progress balance of on real held sheet. make assets multifamily continue

received During company. from we the secondary the received proceeds quarter, of quarters. $XX.X we and $XX.X subsequent in disposed dispositions net to approximately million benefit million had impact assets positive and realized of X that real multifamily will gains estate net of a These

With these the loss million net from properties, negative quarter. we $X.X estate million dispositions, drag consequently these $XX.X during decreasing from to real our from reduced the

the in million earnings We these the range multifamily are to properties, additional million negative drag $X to and actively expect per working without from assets dispose to we of quarter. improve $X.X of

as in an in compared the expenses expenses resulted to flat previous expected in portfolio our G&A total operating $X.X Although million. increase quarter, the were book residential of essentially loan growth

also and issuance We of during and in our horizon by by quarter. interest fair liabilities adjusted value related fully time increased add-back current the amortization amortized quarter book in book properties. $X.X a from over deals, million X $XX.XX, to a lower multifamily value a related down issuance not the due ended cumulative quarter Adjusted the our due debt and expensed of per to value fair longer value of book and caused X.X% expenses incurred which the second the GAAP were depreciation reduction share securitization to X.X% value reduction in amortized in was to our election. rates cost decreases

ratio primarily to to respectively, X.Xx June the company's XX, securities, leverage respectively, of As continued Agency of quarter financing our and end, leverage of higher X.Xx ratio portfolio due and RMBS. moved investment as and recourse X.Xx, recourse Xx, from

recourse leverage that due With credit from remain X.Xx, dividend. financing at acquisitions recourse to recurring And June fee I to it optimizing update. securitized X.Xx now current portfolio We portfolio excess do our the linear utilization revenue closer through to maintaining our other quarter, to increase expect prior expenses in our we Nick? quarter. and partially while to financing. Our funded and will from a strategy common turn in $X.XX continue third-party at per earnings see repurchase assets, as income market growing credit attractive assets the over up committed share for not a and dividend, XX We by move for expect of our investments unchanged recourse Nick current our book. go in our an recurring we during venture rotate generate credit shareholders. the the with over leverage into to credit the growth liquidity reinvestment joint to we arrangements, yield paid in stands to

Nicholas Mah

markets. income materialized increased Recently, however, Fed cut a an XX September in data. The market positive pivot for long-awaited out with sizable points labor closing robust Christine. fixed has overall to volatility Thanks, due quarter basis

We to are of with a credit investments and navigate well this positioned market. mix diversified Agency RMBS evolving

also Jason short-duration the to and We $XXX As bridge $X residential ahead. capability million of earlier, of investments rental advantage $XXX led quarter, of capacity by million opportunities million and of RMBS, take market we loans. billion $XXX have mentioned in XX-year of made meaningful Agency over loans third BPL BPL

in investments, of We consecutive of been quarters we whole purchases. year. our more uptick securitizations this a durability with also of has capital issuer deployment correlated active have growth Alongside directly whole X loan the adjusted loan interest increasing growth and of overall income. achieved were This the steady

in most these financing executing of securitizations have non-mark-to-market completed active a germane compared across economy our debt We rates we of future of total can but have trending firm's deals $XXX our X XXXX spreads. history. conventional liquidity more fund recycle to the loans in to have Overall in securitizations Not issuance only been base this lower our lower, has of healthy Terming credit BPL a been securitizations, execution sectors, stable has several to will into revolving we year improved of future. million In management now purchases. bridge out repo to the contribute currently that financing. making

from $X.X billion available repo access financing capacity. loan also additional We whole have of to

utilize efficiently securitizations investments. With repo, more of revolving combination future we and fund the leverage and can

we parameters the rated within previously, As also bridge BPL well conservative selection fits mentioned our criteria loan securitizations. of

repo. with We lower basis bridge effective BPL cost a size quarter have at This a third These the points compared more to now X.XX% deals, represents lower cost XXX savings completed in than future in X of will basis net deal on $XXX second issued inaugural bridge funds. effective our executing interest quarter to cost our cost income. in second effective million rated bolstering BPL points and XXX one compared rated incremental aid the

period in program policy the BPL a quarters for our pricing experienced several this first the recently rental market tightening dormant restarted monetary XXXX. since BPL where securitization asset the were sector during year in heightened our issued We have of and rental volatility. class We

rate the to However, as we pivoted have rental of BPL cycle end target BPL the we Like in prepayment environment. can from increasing philosophy high-quality at shy view, and strong periphery characteristics loans hiking loans prepayment loans. the BPL our through with credit eligibility. a rental came declining beneficial be yield protection to into Bridge, incremental Fed Generally, of penalties, our exposure in the which away

points will to the securitization. quarter mortgage RMBS, go-forward the in basis basis these XXX opportunistically in interest finance assets as spreads We goal a declined participate to through from continue In rate with of strategy points on continuing current this declined. XXX Agency basis to volatility coupon

is purchase of Overall, portfolio of $X growing. constitutes asset and The allocation. XX% is with volume agency our pace of the slowed Agency XX% have in RMBS now we almost spreads, in which capital decline billion, XX% drop our the acquisitions quarter-over-quarter. a still however, the book portfolio Given

liquidity wide portfolio and the in the us allows Agency wider. RMBS term. to at strategy the expect credit opportunities rotate continue when from near for to move strategy portfolio. historically provides other RMBS into trades spreads The Furthermore, to We when this strategy for asset in strategy grow spreads the lean our diversification a arise to us core as remains the class Agency or

as X diversify of in The we still are weighted carry XXXX. purchases some spec quarter profile, we include inception to coupon well. spec assets have BPL X, started was X.X% the also belly Bridge, across coupon and target to $X.X pools specs. coupons our of over coupon to X.XX% this mix Our of average but favorable due billion to a pools invested current In since purchased have strategy the date our

interest rewarded traditional improving a to basis. program. our experienced in absolute on Because fundamentals, credit our both our pipeline this credit increase steady through this, by with on continuing with and investor percentage delinquencies we in focused of been preferential rated are execution securitization within along We sector. and profiles an have bond size portfolio We acquisition decline

floating for BPL ground-up avoid our continued traditional we accounting lending the focus The such and decline our our these keeping mezzanine of portfolios. and product property lies combined We and level. lending on third lending rate. the redemptions assets X% NOI cross-collateralized with multifamily only continue niche these ongoing an acquisitions. and given overall sectors of of mezzanine portfolio. In in The strength portfolio to overall senior redeemed at at lending lower strategies percentage more for bridge portfolio construction rate financing or the bridge portfolio mezzanine XX% fixed in combination debt, expect to approximately lending niche senior quarter, hedged borrowers the in mezzanine our having as multifamily, of our continues costs our In debt cross-collateralized rate supporting a

to further our future this strategies core will drive growth. into We interest and proceeds reallocate redemption income

multifamily noted through partnerships. we to look capital quarter, into third-party As deploying forward capital strategies we last

of proactively investments this are a JV space. in onboarding parallel pipeline We a to in building partner

We for the will up now Q&A. open call Operator?

Operator

from first of question [Operator George KBW. Bose Instructions] line with comes Our the

Bose George

value, Actually, of in that is piece pretty your terms small. JV noted you the now book

So as an that book Or is in do keep the eye largely there should value well? your you feel piece we is multifamily on bottomed? stuff like

Nicholas Mah

you. Thank Yes.

book JV from the value quarters, prior our in noted book. we equity As volatility stem

$XX million in seven remaining position, in As there's we noted, have we And total position. that that assets.

of have near-site into we visibility four seven, the On near-term resolutions. them,

LOIs. we're current And roughly total million receiving $X.X of then is three the in remaining value. price holding Our represents the those about value

where and to equity close from, that nearly book fact centered been volatility very down volatility around winding that you it we're JV has look has the assets the the when million this through remaining with actually We on. that LOIs come that So book will moved value $X.X value all of add see these in place. given has now portfolio after are --

Bose George

update on we can get just changes? value then Any And quarter-to-date? actually, Great. an Okay. book

Nicholas Mah

Sure.

As between we X%. down adjusted somewhere value of X% to book this week, see

Operator

comes the Our Scott. line with Jason Stewart from Montgomery next of question Janney

Jason Stewart

take you could agency gross us BPL side? Nick, where give on the maybe by you ROE high-level side strategy see and the maybe, and a on specifically just Jason,

Jason Serrano

Sure.

we've out. securitizations. with terms pretty few things start color BPL the a where decent and since Recently I'll are done have this So a in bridge of year side pricing

robust, be So continues given very rated securitizations to execution advent RPL just year. particular there the of this

So ROEs particular that XX-plus for that we see strategy, basis. gross do on a percent levered type on

of side, agency amount fair there's the On volatility. been a

on tight quarter basis. Z-spread has bit today It the widened ended little relatively So out a wider. to a

there somewhere say would are I So the the in mid-teens. ROEs that

mentioned strategies high we've prints. terms which that we securitization teens see the other in have, recent rental we We In some the that mid of type ROEs. strategy, something had BPL also of to

Jason Stewart

Okay. And mean, agency are spreads then the given mentioned that wider. the I volatility, you on side,

the So capital all range. into ROE shifted that end is that at of the higher probably Have you leaning allocation widening? into at

Jason Serrano

Yes.

mean, our still trend agency don't do in particular it I to seeing this you're We one be the strategy. activity on market grow it driven will So but to higher. that we're line The pretty all quarter. have from we intend portfolio,

So have quarter, last agencies. deemphasized particular as we in, tightened have spreads

the spreads, with we Now space. more be active to in wider expect agency

Jason Stewart

Okay.

this on the JV the one something to I side multifamily Just rate is maybe overall But volatility especially impacted question multifamily take. know activity? and down macro, curious increase nominal. pretty on CRE in your how just is deal volatility, just last

Nicholas Mah

Yes.

the activity in properties. So it market, certainly side, deal of overall activity slowed on the activity purchase has

And class relating it's in for million. touches pipelines lower a our about noted adding that mezzanine that of definitely to we year-over-year, quarter-over-quarter. third-party what that overall asset we're quarter could with that we're loans be We where on a capital the capital to focused third-party last that final putting up $XXX is have seeing together agreement JV

move latest to and then the in who quarter-over-quarter deal this lock those hedges of place, fixed a coupons did ended didn't rate or all was activity moving just come properties think away. off up rate I that and be have starting purchases not sudden, market saw higher positive in we

particularly as -- overall, that step economic and in think balance towards not looking of on I space risk a lot deficit of So forward the long-term and plans put office duration a whole. growth, and to looking there's then the sheet in to are what rates at respect cetera, election, their then et whoever to with would for market folks want mean is what the into that

market think, been the timing in it been a I low as a to is, activity. little in the activity basically So not generally, a relates December cyclically is has then space. this lot to going month. curbed We're bit see of And of November

you're back year. So robust February I slowdown in last activity think and January of going the into to X months this see the given

Operator

closing Instructions] remarks. [Operator the now Serrano Jason back concludes question-and-answer turn session. This it to for would I like to

Jason Serrano

Yes. great this early for look results fourth you your year. Have financial our We Thank to day. time quarter morning. next forward sharing a

Operator

Thank your conference. the you conclude participation does for program. in This today's

disconnect. may now You

New York Mortgage Trust (NYMT) 31 Oct 242024 Q3 Earnings call transcript