NYMT - Earnings call transcript Q4 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 Fourth Quarter 2024 Results Conference Call.

[Operator Instructions]

This conference is being recorded on Thursday, February 20, 2025. to conference like Mussallem, to now Relations. Investor would turn over the Kristi I ahead. go Please

Kristi Mussallem

New the and website to York release presentation Both the quarter A New XXXX company's released was presentation Mortgage press Trust's yesterday. with are XXXX financial on results supplemental press Welcome and Quarter financial Trust. at Fourth release www.nymtrust.com. Earnings the Mortgage fourth supplemental York Call for available

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

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

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

Jason Serrano

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

Nario, and CFO. today me Kristine Joining Nick Mah, President; is

the cuts. that commentary reversed on to results, began Fed and to full a in basis update discussed monetary After positioning campaign with rate quarter year recap will stands and inflation, fourth XXXX XXX I early focus. points by provide XXXX XXXX, Nick As with portfolio of slow into will insights and in policy our an follow the restrictive Kristine

treasury elevated remained years calendar for heavy come. issuance mortgage on However, of as the supply to focused side the market rates

assess macroeconomic benefits the With new administration, of data. current new slowing forecast to of market attempting against be the the the the will policies

jobs spending. the show at manufacturing U.S. resiliency may a with look of economic fundamentals. benefits and to growth deregulation by to of to economy be housing market For federal onshoring directly neutralized When continues signs cuts example, the slowing by the spur fundamentals, strong the reinforced

the on mortgage the the through XXXX, This environment time billion to excess housing driven deployment curve XX% achieved low supply positive held sustainable goal average yield and continue relative just by by liquid of agency spread be check. higher income in to grew by potential trends company X%, a bridge rates to earnings. sloping homeowners the loans. will higher over of company's to strategic through enhance U.S. in the portfolio the bonds primarily rate acquisitions Stable housing recurring has and by of the focusing presence Due With same of can and $X.X this keep liquidity. XXXX, in

of earlier. approach a a would effort allowed portfolio As was contributed financing early consideration a us our long-term of the medium- to This our period investment of growth time from costs, company. following to would We holdings. also we shareholders. year-over-year. explained year value adjusted improvement the XXXX significant to patient on multifamily JV complete QX, be underperforming the in in back execute restructuring for focus $X.XX period to sheet income activity centered that a adjusted around result, interest necessary that and equity interest low to divestment After EPS in income $X.XX the Strong XXXX take XX% a in our net balance rose for

we baby last kicked growth year. bond Alongside bridge issued a prudent In $XX January, with We of in pursue our an BPL investment X for continue are the attractive securitization. happy allow stages portfolio. to and we securitizations funding of in strategies an note to to that final reached XXXX million plan off we issuance issuance XXXX, earlier this

on non-mark-to-market to we of Our million accessing efficiently the can nonrecourse, $XXX focus the leverage year. goal excess access so at end is liquidity the totaling company's

portfolio, keep were growth in and pursue substantial our to portfolio expense year accomplishing optimize with execution over forward our control look able to with just company task to believe in G&A XXXX, X%. plans reduction this the our in We year. the we costs provides we Despite flexibility and the above to returns increased

believe the reoccurring continue with value we upside Given compelling this presents to embedded earnings as price NYMT our dynamic, improve. share

discount million adjusted the As of XX% traded company's market to alone, at illustrated year-end. $X.XX in $XXX book portfolio to share agency our with at Market value shares on Page capitalization the or XX upside QX value potential year-end cash supplemental, book per a was by capitalization. NYMT of XX% bond covered

market, additional company's the per assets, held or paydowns dividend this to income XX% the access par utilization capitalization through to over At pass we to discount be of for holds which through fourth and Kristine? provide excess Furthermore, a net balance $XXX With significant quarter upside I'll value reversing the after plus yield. million sheet to a time, growth securitization our $X.XX of market our liquidity share, consideration Kristine especially to recaptured discount. can current financial see call highlights. levels, the

Kristine Nario

company financial cover quarter compared in third as supplemental. quarter. the $X.XX of comparative the to undepreciated per I'll financial section morning. fourth share our loss undepreciated behind key $X.XX fourth Good factors results quarter and per the our earnings The had in of in reference share the Jason. Thanks,

to in share $X.XX share a to per net Our commitment EPS $X.XX fourth income and quarter, income that per assets $X.XX ongoing ago. to contribution the the quarter, third an increase in share compared adjusted in generate recurring per to interest year in investing has quarterly led

and XX.X% quarter to year-over-year. a increase This represents quarter a XX% in fourth increase compared the third the

year-to-date. have average year-to-date. benefit financing XX portfolio, by our Slide Additionally, spread quarters, quarter to quarter net points Moreover, points basis reducing XX, for shown basis rate the in over XX our has basis recent swaps X cost increasing as interest in our improvement XX detailed basis our interest the by points and and continued points

the by benchmark loan rates, interest of fair portfolios. affected reduced which residential earnings were our higher primarily and bond Our valuation

the we asset to in $XXX.X and residential During net book. unrealized lower from our recognized were portfolio partially instruments, gains million losses interest primarily due loan RMBS losses prices, by our million These quarter, unrealized mainly Agency in $XX offset derivative rate swaps. totaling

per primarily due carrying that their Additionally, on costs. losses cost we foreclosed or previous to properties remain compared of sheet, are million balance carried $X.X to which at $X.XX market share, lower valuations recognized still lower from

equity million as of the assets XX. remaining, $XX of with We divestment are our totaling X completion multifamily nearing only December of JV

quarter, portfolio. remained basis. due nonperforming net previous operating During to unchanged properties transactions the drag and with resulting dispositions the reduced gains secondary million loss to multifamily of also in essentially G&A successfully negative $X.X real compared associated that expenses company. These disposed quarter, impact X $X.X positive we from will expenses attributable these by primarily Total our to a to us In the these created the our estate loan earnings $X.X expenses go-forward by the have of benefit reducing from on in decreased million. estate residential quarters million from assets, real a million, $X.X quarter, decreased future net portfolio

X.X% over period down the BPL Additionally, securitization. rental to we per longer current X.X% fully value ended to expenses than at adjusted $X.X decreased our in amortized rather These debt share issuance value recognized election. expenses $XX.XX, value quarter quarter the a fair incurred of related from and a third GAAP due quarter. were by book million during the book

in reduction value by adjusted our fair Our due of per liabilities increase book primarily share positively the cost the the in rates. was amortized to value impacted

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

on portfolio acquisitions. other recourse investments rose and fourth at September quarter our recourse to leverage from X.Xx from partial XX, X.Xx financing of Our resulting repurchase credit

slower the our for we than securitized portfolio our continued credit book. recourse use of in be growth the in our our credit assets, Given leverage credit financing expect to growth

We X current unchanged $X.XX dividend our are a a ensuring share, of dedicated competitive for common for have yield maintained shareholders quarters. and to per

to million our $XX.X now recurring over have year, to update. that enhanced strategy with dividend. has significant I over generate X Nick? fully asset ability were and been closely deployed current acquisitions. turn earnings now years and the the into go this January of earmarked market notes the The Nick issued which align unsecured also it will We to in past portfolio of restructuring over

Nicholas Mah

most investments. $XXX of acquisitions. in XXXX year just quarter million with $XXX XX% the you, bridge fourth productive the residential $XXX robust Thank the In were activity RMBS. Kristine. The investments purchases these in Agency in was Around was sectors company million entering were into firm's as and rest of residential BPL rental the the million. BPL and with of of were with loans credit investments credit purchases residential quarter, largest loans asset

capital balanced return agency range-bound us bridge We spreads loans steadily to allowed volume expect be relatively sector BPL loans this XXXX. and attractive XXXX, BPL in between at into Throughout acquisition rental to profiles. more deploy

the While we portfolio on try to quarters. the last has during markets, periods a growth of been wider spreads consistent X the of over acquisitions trajectory increase in the pace

our our Agency As XX% as $X.X asset end, net which a value is RMBS the of quarter strategy, billion and of market XX% equity. portfolio of currently core is portfolio

in invest RMBS, given we We still easing still enter environment a to spread the as Agency monetary levels cycle. see favorable attractive a

capital. to We with the advantage available take opportunity of our will continue

points intra-quarter XXX before Over before basis positive remains movements entry points spreads for normalizing are basis basis quarter, provided points. as trades. goal. The spread peaking noteworthy, was points high the year-end. growth spreads us X by RMBS mortgage into with portfolio better to however, Furthermore, widened right at Agency current spreads the election coupon XXX volatility our persistently us These into

coupon materialized In quarter curve Our a quarter, in from and we carry the maintain the is still wider was range predominantly relatively weighted The lowering purchased the X.XX%. yield a low close coupon high coupons targeted The in current in spec the average in year fourth the differentiated participate still portfolio coupon to purchase. we down for prioritize pools, the to portfolio. over across In allow will pay-up positively of of X.X pools. future slightly quarter, profiles course NIM. a coupon spec strategy X.XX% portfolio pools that positive us sloping spec to the agencies positive to of the

billion invested the RMBS consistent have strategy. We $XXX BPL this loans, few favor profile liquidity the return by since Having to $X Agency now in of in revolving securitization debt to to X for bridge in bolstered last securitizations activity the market to of continue momentum can purchase in bridge deal date recycled emergence the we this $X grow over class. also that billion now million the and of XXXX we executed bridge with growth on securitizations, be XXXX, improving the quarters. billion rated BPL The asset further investments. have year. saw over $X.X of from institutionalization XXXX, In XXXX future saw XXXX, issuance strategy bridge fund

market and fuel growth securitization efficient financing in of strong combination The continued housing market. this technicals will the

U.S. housing is an stock, the fix and a there housing is loans. grappling associated and aging and still As with for its low inventories flip need projects market

Our target ground-up single-family multifamily the minimizing avoiding conservatively construction bridge tight band within assets underwritten bridge remain loans, altogether. of and

has be securitization space. us the with BPL enabled to repeat philosophy bridge and issuer bond rated resonated credit has investors in Our a

since our we issued sector BPL a first in In fourth quarter, million in this Rental, securitization the XXXX. $XXX

bridge We consistent providing most allocate channels to as holistic issuer through capability. in of a strategy more across potentially the continue of asset for originator duration partners, overall same rental we as environment. to to into BPL to class these in capital loans. more exposure XXXX. also our source Furthermore, this takeout securitizations of we loans BPL this be expect credit with our our increasing and a By enter product a sourcing our lower We more rate aligns our lines strengthened goal residential the

The classes to loans. residential these support in curve our across has accretive credit positive quarter The detractor on put already the an XXXX, portfolio steepening yield asset we the interest income was overall will us been pace time. participate made earnings we in XXXX, in segment and investment that the coming book has winding of significant a investment securitization economics of In to but the to Expanding broader progress of the the JV the for for of down portfolio portfolio. over relative restructuring growth multifamily recent of in for fourth our a size us year. the trajectory the immaterial equity

have been returns. assets and mezzanine investments provided The cross-collateralized stable and risk-adjusted for mezzanine excellent lending lending the company

rates in in has features, pace Our seasoning payoff year-end to combined fourth the of portfolio of this XX% our XXXX. of Due mezzanine and payoffs with to we the loan high quarter. portfolio call the redeeming at expect loans experienced accelerate

this in XXXX, will and for higher-yielding more liquid about reinvest single-family portfolio year. and in are prospects assets. Across and this We excited upcoming our we the achieved multifamily, into capital both milestones we

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

Operator

[Operator Instructions]

coming will George from today the of of be question Bose KBW. first The line

Bose George

guys out largely earnings the you do rate exited you look like? is now those just trying the if foreclosure what earnings. Like was and then strip think that sort the would out that think what from -- costs run ROE to like I about mentioned, JV you've pull the unrealized of normalized So the stuff? that losses if mark-to-market, Actually, you you the gains, all noise

Kristine Nario

with for year think of to Well, compared of to increasing our quarter and underperforming $X.XX I earnings this assets growth rotation with along with in interest the a $X.XX XXXX earnings. in income close prepared pace -- the months commentary really that fourth -- in adjusted ago, last terms getting our with we dividend are aligning and few good of to XXXX, acquisition in recurring here the of current have also of year supports the in activity quarter we really acquisitions

of We align that $X.XX rate and current our dividend. dividend recurring anticipate will -- earnings $X.XX with have dividend that of

Bose George

terms would that liquidity, the And then characterize you moment? of just in excess the how at

Jason Serrano

looking but that rotate goal to excess I of continue into missed agency to as is the relates and last credit. the both our residential to part liquidity, market the it question, within our

economy side, with the that market our credit bridge noted think to of our BPL residential housing with kept the the that the we've aligns U.S. whole. we've view On shorter the a accessing by markets. in past outlook the respect and durations We well as loan

and different with the to for effective to with the are some bond particularly of curve, here more which We short the rate at that macro effects looking well interest respect in will earlier the as the different this some cause the balance term agency rates. NIMs, and due in constructive likely year on just and acquisitions volatility likely been administration, has respect data, of spreads policies to as new normalization

well in liquid So as the our agency space, we volatility range portfolio we'd be today. some and is portfolio help our like goal through immunized side in credit weakening. rate And market, see on to credit kind of a see which that as the to XX% in shorter returns XX% to

Operator

of And our line next Doug question from will Harter of UBS. be coming the

Douglas Harter

G&A about think portfolio? capital you grow XXXX How talk you to Can continue portfolio expense of the outlook? if the and and deploy trends that in do kind you

Kristine Nario

in completed book reduced decrease portfolio some well a lower operating a did as nonperforming related that previous quarters. From in the see or expenses perspective, quarter to expenses on due we to the we've quarter resolutions in

similar in G&A identifying we And on to our implementing it continue rate costs. efforts a sorry, further G&A, looking for measures quarter. reduce terms $XX.X -- rate and In you're run in G&A as those and of see a per of to do G&A million of further maybe run opportunities $XX to we maybe million anticipate at decreasing XXXX

Douglas Harter

quarter? Appreciate has clarity. performed first Any that give how so the you Great. in on far update value book us can

Nicholas Mah

X% up to Sure. X%. adjusted value We that book week between of is see somewhere as this

Operator

JonesTrading. And the coming our from next Erdner question line Matthew will of of be

Matthew Erdner

sight if any to and kind multifamily assets line So into can a that JV. update of I kind was the quarter kind these resolution X that is had guys X provide you of I'd remaining that you like X you these call, if assets. curious there's multifamily mentioned of on on there? the Last within of touch of

Jason Serrano

Yes.

Florida JV So we There's equity our for balance X, the basis of in the assets with assets have distinct X sheet. are an $XX about X on of between the million market equity remaining X in sale. strategies located

assets expect So in sell we to assets been and those those near term. marketing the have

think just the positioned a decent receive is on where to that the property, we've the properties. of it's that that's market. on thinking those going, sight fact and of And in the we offering So out line

in -- on that to from improvement Two rates portfolios both actually those are kind there. located X, recent assets And equity $X.X in from of low on with occupancy XXs, high the million. Texas, that a they're about we've had basis is those XXs and see we a improvement

market our the medium income on price in the in sale, wait a So better selling is units those given sale portfolio. view the actually NOI and improvement show before occupancy and those the on we we properties X will recent term in assets of think in to kind which relative out for to those improvement have

again, million expect year. and the exit the So we course to that's over of $X.X that

Matthew Erdner

Got an between it. running going color you forward, would That's very strategy? of portfolio And ideal strategy kind credit agency of be the then what mentioned the as think and the mezz we kind In the allocation capital helpful resi there. off. scenario,

Jason Serrano

In mezzanine can increase call course we Yes. do those we to the that in do expect that There intend are see deals we hold throughout higher features of activity. in drive prepayment are portfolio, to certain the embedded activity, prepayment the and year. that and

see continue to we increase. do So to expect that

earlier, agency the constructive market related credit. we're As to the balance, versus I mentioned more on

we residential and higher RMBS credit higher from think reverse, -- pipelines see I the the think Agency in a higher in pipeline day, had loans. the both I where end mortgage So that we the expectation space, markets. allocation But Agency investing RMBS but we'll continue will classes, versus that last quarter, particularly in over would our asset the purchase will of that the is at to rolling we with market single-family be the

Operator

of from Eric next of line the Hagen the coming And BTIG. will question be

Jake Katsikas

on is for This Eric. Jake Katsikas

RPL prepayment the about in this year talk outlook for you could one, speeds portfolio? your First

Nicholas Mah

portfolio think speeds as the of exhibited We that consistent Sure. XXs the CPR relatively through They the anywhere robust. range XXXX. know, of may speeds And that in RPL pretty CPR. XXs you has are to

seen that in insensitive hold get interest are, sold that then the eventually into some effectively completion have -- different these or they projects and environments of that We point these refinanced and it's driven rate ways, through projects rate sensitive get at of they as debt. types are longer-term by fact really

still rate prepayments for So remain -- see that robust. -- outlook, we regardless XXXX, of will relatively we we do actually the

Jake Katsikas

do then year? securitized any of this are deals you opportunities And debt of Great. callable? And any relever the see and potentially to call your any currently

Nicholas Mah

Yes. -- that We callable that We do have deals today. several strategy do are we is that a employ.

it an than in with take cheaper decision. market. can benefits economic coupon But in able rate being some to debt where is terms redeploy. Sometimes executing There deal relever and capital additional out step-ups there still pieces are are new a of are also of that then the then you

a So deal-by-deal class asset that decision that an and is basis on make the class-by-asset we basis.

yes, part that our we going nature this So that securitization portfolio of the trend be the And to of market and last year, to I portfolio really do robust is to going year expect mean, our of strategy. from part given continue.

Operator

[Operator Instructions]

time, in this At questions queue. showing no more I'm the

to over to back call I'd go turn for Please Serrano closing Now remarks. ahead. the like Jason

Jason Serrano

you We speaking results. regarding for look a time day. forward thank Well, first you our to great Have quarter your today. to

Operator

This concludes for call. Thank today's participating. conference you

You may now disconnect.

New York Mortgage Trust (NYMT) 20 Feb 252024 Q4 Earnings call transcript