NEW YORK MTG(US:NYMTL)2023-05-05 21:15Investment Portfolio - The total investment portfolio increased to approximately $4.6 billion as of June 30, 2022, up from $3.6 billion as of December 31, 2021, reflecting a growth of about 27.8%[215] - As of March 31, 2023, the total investment portfolio carrying value was $3,761,151,000[248] - The total investment portfolio carrying value was reported at $3.8 billion as of December 31, 2022, with a recourse leverage ratio of 0.3x[250] - The company is currently under a purchase and sale agreement on two multi-family joint venture properties, indicating active portfolio management[216] Financial Performance - Net income attributable to the company's common stockholders for Q1 2023 was $10,521,000, with a basic earnings per share of $0.12[241] - For the three months ended March 31, 2023, the company reported a net income of $20.9 million, a significant increase of $94.7 million compared to a net loss of $73.9 million in the same period of 2022[252] - Comprehensive income attributable to common stockholders for Q1 2023 was $11,112,000, a significant increase of $97,643,000 compared to a loss of $(86,531,000) in Q1 2022[265] - The company reported a basic earnings per common share of $0.12 for the first quarter of 2023, compared to a loss of $0.89 per share in the same quarter of 2022, marking a turnaround of $1.01[252] Interest Income and Expenses - Interest income for the same period was $57,136,000, while interest expense was $39,335,000, resulting in a net interest income of $17,801,000[241] - Interest income decreased to $57.1 million, down by $1.4 million from $58.5 million in the prior year, while interest expense rose to $39.3 million, an increase of $17.9 million from $21.5 million[252][253] - The yield on average interest-earning assets was 6.24%, and the net interest spread was 0.41%[241] - Adjusted net interest income for Q1 2023 was $17,801,000, compared to $37,036,000 in Q1 2022, reflecting a decrease of $19,235,000[275] Economic Conditions - The U.S. GDP grew at an annualized rate of 1.1% in Q1 2023, compared to 2.6% in Q4 2022 and a contraction of 1.6% in Q1 2022[226] - The unemployment rate remained stable at 3.5% as of March 2023, with 5.8 million unemployed persons, down by 0.1 million year-over-year[227] - The Federal Reserve increased the federal funds target rate by a combined 475 basis points during 2022 and the first quarter of 2023, contributing to extreme interest rate volatility[215] Asset Management Strategy - The focus will remain on core portfolio strengths of single-family and multi-family residential credit assets, which are expected to deliver better risk-adjusted returns over time[217] - The company plans to opportunistically dispose of joint venture equity interests in multi-family properties and reallocate capital to targeted assets[216] - Selective investments will be pursued in the residential housing sector, focusing on assets with shorter duration and significant discounts to par pricing[219] - The strategic repositioning includes continued investment in multi-family Mezzanine Lending as a targeted asset[216] Liquidity and Financing - The company intends to emphasize longer-term and non-mark-to-market financing arrangements to manage liquidity risk better[218] - The company faces liquidity risk due to financing long-maturity assets with shorter-term borrowings, necessitating daily management of liquidity needs[374] - The company expects its existing cash balances and cash flows from operations to meet liquidity requirements for at least the next 12 months[338] - The company has $100.0 million of 5.75% Senior Unsecured Notes due on April 30, 2026, with a total cost of approximately 6.64%[332] Market Risks - The company anticipates continued volatility in asset pricing due to uncertainties related to inflation, interest rates, and economic conditions throughout 2023[225] - Credit risk is heightened due to current inflationary pressures and potential economic recession, which may lead to increased delinquencies and defaults[384] - The fair value risk has significantly increased due to changes in interest rates, market liquidity, and credit quality, making estimates less certain[387] - The company utilizes interest rate swaps to hedge variable cash flows associated with its variable-rate borrowings[328] Real Estate Performance - Income from real estate for Q1 2023 was $41,746,000, an increase of $16,157,000 compared to Q1 2022's $25,589,000[263] - Total expenses related to real estate decreased to $50,697,000 in Q1 2023 from $55,146,000 in Q1 2022, a reduction of $4,449,000[263] - Net loss from real estate attributable to the Company improved to $(13,823,000) in Q1 2023 from $(14,921,000) in Q1 2022, a positive change of $1,098,000[263] Stockholder Actions - A total of $246.0 million was allocated for the common stock repurchase program, with an additional $100.0 million authorized for preferred stock repurchases[244] - The Board of Directors approved a stock repurchase program totaling $246.0 million, with $199.8 million remaining available for repurchase as of March 31, 2023[357] - During Q1 2023, the company repurchased 377,508 shares at an average price of $9.56 per share, costing approximately $3.6 million[357] Asset Quality and Performance Monitoring - The company monitors the performance and credit quality of underlying assets through financial statement analysis and regular site inspections[386] - The company actively evaluates prepayment speeds to mitigate prepayment risk, which can affect yield on residential mortgage assets[381] - The company focuses on selecting servicers with appropriate expertise to mitigate losses and maximize returns on residential loans[385]