NEW YORK MTG(US:NYMTL)2024-11-01 20:21Investment Portfolio - As of September 30, 2024, the total investment portfolio amounted to $6,862,803,000, reflecting an increase from $5,911,537,000 as of June 30, 2024[247]. - The residential loans portfolio increased to $2,768,561,000, up from $2,498,247,000, with acquisitions of $624,163,000 and repayments of $267,832,000 during the quarter[247]. - Agency RMBS holdings rose to $2,967,966,000, with acquisitions of $372,162,000 and fair value changes contributing $61,283,000[247]. - The company reported a total of $3,542,766,000 in investment securities, which includes $736,035,000 in new acquisitions and $84,675,000 in repayments[247]. - Preferred equity investments and mezzanine loans totaled $234,447,000, with a decrease of $5,100,000 due to repayments[247]. - Equity investments in consolidated multi-family properties decreased to $154,462,000, reflecting a reduction of $15,011,000 due to disposals[247]. - The investment portfolio increased by approximately $3.1 billion from December 31, 2022, to September 30, 2024, with adjusted interest income rising by over 70% compared to the same period last year[252]. - The company allocated $1,113,345,000 in net capital to single-family residential loans as of September 30, 2024[277]. - The carrying value of the company's investment securities portfolio increased to $4.89 billion as of September 30, 2024, compared to $3.34 billion as of December 31, 2023[349]. Financial Performance - For the three months ended September 30, 2024, the net income attributable to the Company's common stockholders was $32,410,000, compared to a net loss of $61,957,000 for the nine months ended the same date[272]. - The net income attributable to the Company for the three months ended September 30, 2024, was $42,849, a significant improvement of $127,358 compared to a net loss of $84,509 in the same period of 2023[282]. - The basic earnings per common share for the three months ended September 30, 2024, was $0.36, compared to a loss of $1.04 per share in the same period of 2023, reflecting a turnaround of $1.40[282]. - Total other income for the three months ended September 30, 2024, was $52,875, a substantial increase of $138,818 compared to a loss of $85,943 in the same period of 2023[282]. - The company reported a comprehensive income attributable to common stockholders of $32,410,000 for the three months ended September 30, 2024, compared to a comprehensive loss of $94,884,000 in 2023[302]. - The company recognized a gain of $17,903,000 on the sale of real estate during the three months ended September 30, 2024[298]. - The company reported total realized losses, net of $19,404,000 for the nine months ended September 30, 2024, a decrease of $17,184,000 compared to $2,220,000 in the same period of 2023[286]. Interest Income and Expense - For the three months ended September 30, 2024, interest income increased to $108,361, up $43,166 from $65,195 in the same period of 2023, while interest expense rose to $88,124, an increase of $39,718 from $48,406[282]. - The yield on average interest-earning assets for the third quarter of 2024 was 6.69%, an increase from 6.52% for the nine months ended September 30, 2024[272]. - Adjusted interest income for Q3 2024 was $100,986, an increase of approximately $41.7 million compared to Q3 2023[310]. - Adjusted net interest income for Q3 2024 was $28,690, compared to $20,655 in Q3 2023, reflecting a year-over-year increase of 38.7%[311]. - The average financing cost for Q3 2024 was -5.37%, slightly higher than -5.13% in Q3 2023, influenced by base interest rate movements[310][311]. - Adjusted interest expense for Q3 2024 increased by approximately $33.7 million compared to Q3 2023, primarily due to increased repurchase agreement financing[316]. Market Conditions and Economic Indicators - The Federal Reserve cut the target range for the federal funds rate by 50 basis points in September 2024, marking the first cut since March 2020[262]. - The U.S. GDP grew by 2.8% in the third quarter of 2024, marking ten consecutive quarters of growth[260]. - The unemployment rate remained flat at 4.1% as of September 2024, with average hourly earnings rising by 4.0% year-over-year[261]. - Home prices increased by 5.9% for the 20-City Composite over July 2024, while existing home sales in August 2024 were down 4.2% year-over-year[264]. - Multi-family housing starts averaged a seasonally adjusted annual rate of 341,667 for the three months ended September 30, 2024, down from 459,417 for the year ended December 31, 2023[265]. Risks and Challenges - The company continues to face risks related to market volatility, interest rates, and credit spreads, which could impact future performance[244]. - The company continues to face regulatory and political headwinds that may impact cash flows and valuations for multi-family and single-family rental properties[266]. - Interest rate changes could significantly impact the Company's net interest income, with potential declines of $72,912 thousand for a +200 basis points increase and increases of $72,808 thousand for a -200 basis points decrease[427]. - Liquidity risk arises from financing long-maturity assets with shorter-term financings, and the Company manages liquidity needs daily to avoid unplanned asset sales[430]. - The Company faces margin call risk on repurchase agreements, which could adversely affect liquidity if asset values decrease[431]. Asset Management and Strategy - The company aims to deliver long-term stable distributions to stockholders through a diversified investment portfolio, focusing on mortgage-related assets[250]. - The investment strategy includes reallocating capital away from joint venture equity investments in multi-family properties[247]. - The company plans to focus on acquiring assets capable of growing interest income while remaining selective in acquiring residential credit assets[256]. - The company plans to opportunistically dispose of joint venture equity investments in multi-family properties to reallocate capital to targeted assets[364]. - The company plans to continue disposing of assets from its portfolio to pursue investments in the residential housing sector, focusing on less price-sensitive assets like Agency RMBS[392]. Debt and Financing - As of September 30, 2024, the total assets of the company were approximately $8.9 billion, up from $7.4 billion as of December 31, 2023, indicating a growth of 20.3%[332]. - The company had $3.0 billion outstanding under repurchase agreements as of September 30, 2024, with a weighted average interest rate of 5.23%[352][353]. - The company issued $60.0 million in 9.125% Senior Notes due 2029, which were completed on June 28, 2024, to strengthen its capital structure[385]. - The Company had $100.0 million of 5.75% Senior Notes outstanding, maturing on April 30, 2026[403]. - The Company had $60.0 million of 9.125% Senior Notes outstanding, maturing on July 1, 2029[404]. Equity and Shareholder Returns - The Company declared dividends of $0.20 per common share for the third quarter of 2024, totaling $0.60 for the nine months ended the same date[272]. - During the nine months ended September 30, 2024, the Company repurchased 587,347 shares of common stock for a total cost of approximately $3.5 million[413]. - The Company has a preferred stock repurchase program with $97.6 million remaining available for repurchase as of September 30, 2024[412].