NEW YORK MORTGAG(US:NYMTZ)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%[216] - As of March 31, 2023, the total investment portfolio was valued at $3,759,029, a decrease from $3,793,874 as of December 31, 2022, reflecting a net change of $(34,845) [222] - As of March 31, 2023, the total investment portfolio carrying value was $3,761,151,000[250] - The total investment portfolio carrying value was $3.8 billion as of December 31, 2022, with residential loans comprising $3.5 billion of this total[251] 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[242] - 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[253] - The company reported interest income of $57,136,000 and interest expense of $39,335,000, resulting in a net interest income of $17,801,000[242] - Total non-interest income for Q1 2023 was $66.8 million, a substantial increase of $113.6 million compared to a loss of $46.8 million in Q1 2022[253] - The company recognized $28.5 million in net unrealized gains for Q1 2023, a turnaround from net unrealized losses of $83.7 million in Q1 2022, primarily due to yield tightening impacting credit asset pricing[258][259] Market Conditions - 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 and credit spread widening[216] - The company anticipates continued market volatility in 2023 due to uncertainties surrounding inflation, interest rates, and economic conditions [226] - The U.S. GDP grew at an annualized rate of 1.1% in Q1 2023, compared to 2.6% in Q4 2022, marking three consecutive quarters of growth [227] - 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 [228] - Existing home sales in March 2023 decreased by 2.4% month-over-month and 22.0% year-over-year, with a median sales price of $375,700, down 0.9% from March 2022 [231] Investment Strategy - The company plans to dispose of joint venture equity interests in multi-family properties and reallocate capital to targeted assets, currently under a purchase and sale agreement on two properties[217] - The focus will remain on core portfolio strengths of single-family and multi-family residential credit assets, targeting investments in residential loans, structured multi-family property investments, non-Agency RMBS, Agency RMBS, and CMBS[218] - A selective investment approach will be maintained, focusing on acquiring assets with shorter duration and significant discounts to par pricing[220] - The strategic repositioning includes a focus on multi-family Mezzanine Lending as a targeted asset for future investments[217] Liquidity and Capital Management - The company intends to continue enhancing liquidity and strengthening its balance sheet in light of potential recession risks in the U.S. economy[216] - The company expects to roll outstanding amounts under repurchase agreements into new agreements or repay them prior to maturity[305] - The company has credit default swap index options to manage exposure to credit risk[330] - The company’s liquidity needs are supported by existing cash balances and ongoing cash flows from investments[336] - As of March 31, 2023, the company had $227.8 million in cash and cash equivalents, $127.5 million in unencumbered investment securities, $225.3 million in unencumbered residential loans, and $261.5 million in unencumbered preferred equity investments as of March 31, 2023[337] Risk Management - The company faces liquidity risk from financing long-maturity assets with shorter-term borrowings, necessitating daily management of liquidity needs[375] - Credit risk is heightened due to current inflationary pressures and potential economic recession, which may lead to increased delinquencies and defaults[385] - The company utilizes interest rate caps and swaps to manage interest rate risk and optimize earnings potential[370] - The fair value of assets is subject to volatility from interest rate changes, which can adversely affect net income and financial condition[374] Shareholder 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[245] - 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[358] - During Q1 2023, the company repurchased 377,508 shares at an average price of $9.56 per share, costing approximately $3.6 million[358] Real Estate and Loans - Residential loans decreased from $2,697,498 to $2,545,703, with acquisitions of $88,521 and repayments of $(272,266) during the first quarter of 2023 [222] - The number of re-performing residential loans decreased from 5,001 to 4,932, with unpaid principal decreasing from $677,229 thousand to $664,329 thousand, indicating a reduction of about 4.5%[296] - The company purchased $16.0 million of residential loans from an entity during the three months ended March 31, 2023, compared to $170.2 million during the same period in 2022, reflecting a significant decrease of approximately 90.6%[298] - The weighted average FICO score for re-performing residential loans was 632 as of March 31, 2023, compared to 631 as of December 31, 2022, showing a slight improvement[297] Debt and Financing - The Company has $100.0 million in Senior Unsecured Notes with a 5.75% interest rate, due on April 30, 2026[333] - The Company holds subordinated debentures of $45.0 million with a weighted average interest rate of 8.84%, due in 2035[334] - The average financing cost for Q1 2023 was (5.83)%, compared to (3.20)% in Q1 2022, indicating a rise in financing costs[277] - The average balance of repurchase agreements for Q1 2023 was $131.2 million, compared to $50.1 million in Q4 2022[326]