New York Mortgage Trust(NYMT) - 2021 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported GAAP earnings per share of $0.10 and comprehensive earnings per share of $0.08, impacted by one-time charges totaling $3.4 million related to the early redemption of preferred stock [7][8] - The investment portfolio totaled $3.3 billion, with a market capitalization of $2.2 billion, reflecting an increase of approximately $100 million in the portfolio [9] - The net interest margin for the third quarter was 3.25%, an increase of 28 basis points from the previous quarter, with funding costs improving by 20 basis points to 3.14% [12] Business Line Data and Key Metrics Changes - The company acquired residential loans for $371 million and funded multi-family joint ventures and mezzanine lending investments for $53 million and $43 million, respectively [14] - Net interest income remained relatively flat at $31 million, with a $1.7 million increase in single-family interest income offset by a $1.5 million decrease in multi-family interest income [16] - Non-interest income was $49.4 million, primarily from net unrealized gains of $30.1 million due to improved pricing on assets [19] Market Data and Key Metrics Changes - The U.S. housing supply deficit remains significant, with only 1.2 million homes available for sale against a need for 5.5 million homes [25] - The company noted that demand continues to outpace supply, leading to expectations of sustained housing credit risks [26] - The multi-family lending sector is experiencing strong demand, particularly in secondary and tertiary markets in the South and Southeast [41] Company Strategy and Development Direction - The company focuses on credit investments to generate better risk-adjusted returns with stable funding [9] - The strategy includes ramping up a $753 million portfolio while maintaining strong credit characteristics [26] - The company aims to leverage technology to enhance efficiency in its operations and compete on multiple dimensions beyond pricing [28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ability to navigate the changing financial landscape through long-term financing options [11] - The flattening of the yield curve is seen as a potential opportunity for better pricing in the market, particularly in the RPL space [89] - The company is confident in its ability to grow its asset base and maintain attractive risk-adjusted returns despite market competition [32] Other Important Information - The company declared a $0.10 common stock dividend, with book value remaining unchanged at $4.74 [10][15] - Total general and administrative expenses were $12.5 million, relatively flat compared to the previous quarter [24] Q&A Session Summary Question: Inquiry about the BPL space and competition - Management noted that they have evaluated several acquisition opportunities but are maintaining their operational platform to win business [49] Question: Financing costs and future opportunities - Management indicated that there are still opportunities to reduce overall financing costs through securitizations and callable debt [55][56] Question: Outlook on real estate operating losses - The $5.3 million loss was primarily due to depreciation and amortization, with a focus on value appreciation for future exits [58][60] Question: Discussion on leveraging BPL loans - Management confirmed that they have leveraged BPL loans through a securitization structure, allowing for replenishment as payoffs occur [62] Question: Future asset growth and market conditions - Management expressed confidence in growing the asset base through strategic partnerships and market opportunities, particularly in the multi-family sector [96]