New York Mortgage Trust ((NYMT)) has held its Q4 earnings call. Read on for the main highlights of the call.
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In the recent earnings call, New York Mortgage Trust (NYMT) conveyed a mixed sentiment. While the company celebrated significant portfolio growth, increased adjusted interest income, and the success of their securitization strategies, they also faced challenges. These included undepreciated losses per share, unrealized losses due to higher benchmark rates, and a decrease in book value. Despite these hurdles, there’s an air of optimism regarding future earnings and dividend alignment.
Record Portfolio Growth
NYMT reported a remarkable 44% growth in its portfolio compared to the same period in 2023. This was driven by $4.1 billion in acquisitions, primarily consisting of liquid agency bonds and higher spread bridge loans, indicating robust investment activity.
Increase in Adjusted Interest Income
The company’s adjusted interest income saw a significant rise of 60% year over year, which contributed $0.36 to the earnings per share (EPS) in the fourth quarter, marking a $0.10 improvement from the previous year.
Successful Securitization and Funding Strategies
In 2024, NYMT demonstrated strong funding strategies by issuing six securitizations and kicking off 2025 with a detailed bridge securitization. Furthermore, the company completed an $83 million baby bond issuance in January.
Improved Recurring Income and Dividend Stability
The company’s recurring income saw improvements, which helped maintain a stable dividend of $0.20 per share. This dividend level has been consistent for five consecutive quarters.
Reduction in Expenses
NYMT managed to keep total general and administrative expenses steady compared to the previous quarter, while portfolio operating expenses decreased by $1.5 million, showcasing effective cost management.
Undepreciated Loss Per Share
The company faced an undepreciated loss per share of $0.44 in the fourth quarter, a downturn from undepreciated earnings of $0.39 in the third quarter, highlighting a challenging period.
Unrealized Losses Due to Higher Benchmark Rates
NYMT reported net unrealized losses amounting to $131.6 million, primarily due to lower asset prices in the agency RMBS portfolio and residential loan book.
Foreclosure Losses
The company recognized foreclosure losses of $9.9 million, or $0.11 per share, primarily from properties that remain on their balance sheet.
Decrease in Book Value
The GAAP book value saw a decrease of 5.6% during the quarter, with an adjusted book value per share down 4.8% from the third quarter, reflecting market challenges.
Forward-Looking Guidance
Looking ahead, NYMT is focused on optimizing returns and accessing nonrecourse leverage. They aim to maintain a competitive dividend aligned with recurring earnings. With a strong liquidity position of $343 million at year-end, the firm is poised to navigate the challenges ahead and capitalize on potential market opportunities.
In summary, the New York Mortgage Trust’s earnings call presented a blend of optimism and caution. While they celebrated significant growth and strategic financial maneuvers, they also acknowledged the hurdles posed by market conditions. Investors and stakeholders can look forward to the company’s strategic focus on optimizing returns and maintaining a strong dividend performance.
