New York Mortgage Trust(US:NYMT)2023-02-23 17:22Financial Data and Key Metrics Changes - The company reported an undepreciated loss per share of $0.12 in Q4 2022, an improvement of over 50% compared to a loss of $0.27 in Q3 2022 [11] - Adjusted book value per share ended at $3.97, down 4.8% from September 30, translating to a negative 2.4% economic return on adjusted book value during the quarter [59][28] - Net interest income was $22.2 million, contributing $0.06 per share, down from $0.08 per share in the previous quarter [30] Business Line Data and Key Metrics Changes - The company significantly reduced its investment activity, with Q4 2022 acquisitions at $106 million, 89% lower than the peak in Q2 2022 [66] - The bridge loan portfolio experienced an increase in delinquencies from 8% to 13.5%, attributed to the late-stage cycle of the portfolio [72] - The multifamily portfolio saw rental growth of 11% in 2022, with stable occupancy at 93% [78] Market Data and Key Metrics Changes - U.S. mortgage rates more than doubled from the mid-3% range to above 7% in 2022, leading to a significant increase in housing expense to income, now approximately 35% higher than last year [7] - The company noted that housing affordability is at a critical level, impacting new home buyers and leading to potential home price declines of 20% to 25% in certain markets [7] Company Strategy and Development Direction - The company is focusing on a low-cost platform and aims to obtain additional savings in 2023, with a deliberate approach to managing costs [2] - The strategy includes avoiding significant losses by not tying up capital in long-term losing propositions and instead waiting for better entry points in the market [6] - The company plans to utilize its strong liquidity and low-cost structure to remain selective in the residential housing sector, anticipating a buyer's market [81] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about increasing delinquencies across various asset classes, particularly for loans originated over the past 18 months to low FICO score borrowers [19] - The company anticipates that consumption challenges will significantly weigh on GDP in 2023, with a tight relationship between existing home supply and home price appreciation [19] - Management remains optimistic about the potential for portfolio growth and higher earnings through strategic asset management and investment in distressed opportunities [10][26] Other Important Information - The company reduced its leverage ratio to 0.3 times and ended the quarter with $224 million in cash [9] - The company has a clear path to drive EPS higher without diluting shareholders through equity raises, focusing on asset-based financing [22] Q&A Session Summary Question: Update on monetizing JV multifamily assets - Management is actively exploring various options for monetizing 19 assets, with traction noted despite a quiet market in December and January [87] Question: Thoughts on dividend policy and earnings outlook - The company evaluates its dividend policy quarterly, considering a 12 to 18-month forecast based on interest income and realized capital gains [91] Question: Rationale behind debt repurchases - Management sees opportunities to repurchase debt at discounts, which is accretive and provides greater flexibility for future transactions [96]