• Earnings Available for Distribution (EAD) per Share: Increased to $0.20 in Q1 2025 from $0.16 in Q4 2024.
• Adjusted Net Interest Income per Share: Rose to $0.40 from $0.36 in the prior quarter and $0.29 a year ago.
• Net Interest Spread: 132 basis points, down from 137 basis points in the prior quarter.
• Net Unrealized Gains: $118.2 million, primarily from higher valuations in agency RMBS and residential loan book.
• Unrealized Losses from Derivatives: Approximately $71.3 million, mainly from interest rate swaps.
• Net Realized Losses: Approximately $2.3 million from investment activity.
• GAAP Book Value per Share: Increased to $9.37, a 1% increase from December 31, 2024.
• Adjusted Book Value per Share: Increased to $10.43, a 1% increase from December 31, 2024.
• Recourse Leverage Ratio: Increased to 3.4 times from 3 times at year-end 2024.
• Portfolio Recourse Leverage Ratio: Increased to 3.2 times from 2.9 times at year-end 2024.
• Agency RMBS Purchases: Approximately $1.5 billion in Q1 2025, nearly four times more than the prior quarter.
• Whole Loan Purchases: $397 million, including $232 million of bridge loans and $163 million of rental loans.
• Dividend: Maintained at $0.20 per share for the sixth consecutive quarter.

• Warning! GuruFocus has detected 5 Warning Signs with NYMT.

Release Date: May 01, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• New York Mortgage Trust Inc (NASDAQ:NYMT) increased its recurring earnings to align with its dividend of $0.20 per share, reflecting successful strategic portfolio restructuring.
• The company doubled its investment pace from the previous quarter, adding $1.8 billion in investments, primarily in agency RMBS and short-duration credit assets.
• Excess liquidity increased by nearly 20% from the previous quarter, ending with $407 million, despite high investment deployment.
• The company introduced a new non-GAAP financial measure, earnings available for distribution (EAD), which better reflects its income-generating capability.
• Net unrealized gains of $118.2 million were recognized, primarily due to higher valuations in the agency RMBS portfolio and residential loan book.

Negative Points

• The portfolio recourse leverage ratio decreased to 0.5 times from 1.1 times, indicating a reduction in leverage.
• General and administrative expenses increased slightly due to non-recurring employee severance costs related to restructuring initiatives.
• The company recorded unrealized losses of approximately $71.3 million from derivative instruments, mainly interest rate swaps.
• Net realized losses of approximately $2.3 million were recorded from investment activity, with significant losses from sales of investment securities.
• Adjusted book value per share decreased by approximately 1.5% as of April month-end, indicating a decline in value.

Q & A Highlights

Q: With more commentary and changes from FHFA and the GSEs, what are your thoughts on the impact on your business and the mortgage market with potential GSE reform? A: Jason Serrano, CEO: The potential GSE reform could bring higher mortgage rates and liquidity issues. However, we don't see it happening in the near term, especially under the current administration. The transition to a private model would take years, so we don't expect it to influence our activities soon.

Q: Can you provide an update on book value performance so far in the second quarter? A: Nicholas Mah, President: As of the end of April, we estimate that adjusted book value is down approximately 1.5%.

Q: Given the current market volatility and opportunity set, is the core still Agency RMBS and BPL, or is there an appetite for expanding the credit investment side? A: Nicholas Mah, President: We are still focused on Agency RMBS and BPL. Although there is credit spread widening, we haven't seen material changes in loss or delinquency assumptions. We are excited about deploying additional capital in Agency RMBS, which performs well in recessionary scenarios.

Q: Could you talk about the timing surrounding the mezzanine and multifamily investments? A: Nicholas Mah, President: The 10% redemption number was year-to-date as of early April. We expect robust payoff rates in 2025 for the multifamily mezzanine portfolio and are making progress in resolving the JV equity portfolio.

Q: As capital comes back, how are you thinking about allocation, ideally two years from now? A: Nicholas Mah, President: In the near term, we prefer Agency RMBS. However, we are still investing in residential credit on the BPL side. We aim to maintain flexibility to adapt to new opportunities as they arise, making decisions based on the best risk-adjusted returns.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.