Financial Data and Key Metrics Changes - New York Mortgage Trust reported a 10% quarter-over-quarter increase in Earnings Available for Distribution (EAD) per share, rising to $0.22 from $0.20 in the previous quarter [12] - Adjusted net interest income per share also rose 10% quarter-over-quarter and 47% year-over-year to $0.44 per share, up from $0.40 per share in the prior quarter and $0.30 per share a year ago [13] - GAAP book value and adjusted book value per share decreased to $9.11 and $10.26 respectively, representing a 2.8% and 1.6% decrease compared to March 31 [15] Business Line Data and Key Metrics Changes - The company acquired an additional $915 million in assets during the quarter, bringing total acquisitions for 2025 to over $2.8 billion [12] - The agency RMBS holdings now constitute 57% of the portfolio assets, with a recourse leverage ratio increasing to 3.8 times from 3.4 times at the end of the previous quarter [10][15] - The BPL rental loans have grown to become the largest credit asset class within the portfolio, with a solid average Debt Service Coverage Ratio (DSCR) of 1.38 times [24] Market Data and Key Metrics Changes - Investor demand for BPL rental loans remains robust, with loans supported by property-level rental income and borrower guarantees [8] - The agency current coupon spreads to treasuries widened to as much as 164 basis points before ending the quarter at 147 basis points, three basis points wider quarter-over-quarter [21] - Delinquency rates in the BPL rental portfolio remain low, with only 2% of the portfolio being sixty-plus days delinquent [24] Company Strategy and Development Direction - The company announced the full acquisition of Constructive, marking a pivotal milestone in its expansion into residential business purpose lending [7] - The strategic repositioning efforts in recent years have significantly strengthened the company's ability to generate consistent recurring income, supporting a stable quarterly dividend of $0.20 per share [18] - The company aims to grow its agency portfolio to trend towards 50% of total equity, indicating a core long-term positioning in the agency space [35] Management's Comments on Operating Environment and Future Outlook - Management noted that macroeconomic indicators softened slightly in the second quarter, prompting some economists to lower full-year GDP forecasts for 2025 and 2026 [6] - The company anticipates a steepening yield curve in the months ahead, which is expected to benefit its portfolio composition [6] - Management expressed confidence in the long-term potential to meet the growing demand for non-agency credit and rental housing [7] Other Important Information - The company recorded $24.6 million in net unrealized gains, largely attributable to improved valuations in its agency RMBS and residential loan portfolios [13] - The company fully exited its remaining four joint venture equity positions in multifamily properties, limiting its remaining exposure to mezzanine lending [14] Q&A Session Summary Question: Discussion on equity allocation strategy and agency positioning - Management views the agency allocation trending towards 50% as a medium-term strategy, with a historical context of holding agency positions [34][35] Question: Conditions for balancing loans on the balance sheet - Management indicated that they will continue to purchase a portion of Constructive's production while also aiming for a capital-light approach [36][37] Question: Changes in book value in July - Adjusted book value was reported to be down slightly from quarter-end, between 0% to 1% [39] Question: Market activity in the beginning of Q3 - Management noted that while mortgage activity has moderated, there are areas for growth, particularly in the non-QM market [44][46] Question: Future leverage targets - Management indicated that leverage is market-dependent and can flex up or down based on asset class mix, with a potential target of around 4.5 times across the business [47] Question: Return on equity (ROE) comparisons - ROE for agency investments is seen in the mid-teens, while BPL rental and bridge loans also reflect similar returns [51][52] Question: Preference between BPL bridge and rental products - Management expressed a preference for growth in the BPL rental side, while still investing in BPL bridge loans [56]