New York Mortgage Trust(US:NYMT)2024-10-31 16:18Financial Data and Key Metrics Changes - The company reported earnings per share of $0.36 in Q3 2024, a significant improvement from a loss per share of $0.25 in the previous quarter [7][22] - Adjusted interest income increased by 39% year-to-date, reaching over $100 million in Q3 [14] - The portfolio grew by $1 billion or 17% from the previous quarter, with a year-to-date growth of over one-third [12] - GAAP book value increased by 1.4% during the quarter, while adjusted book value per share decreased by 1.4% to $10.87 [30] Business Line Data and Key Metrics Changes - The investment portfolio increased by approximately $1 billion during Q3, ending at $6.9 billion [24] - Net interest income contribution rose to $0.22 in the current quarter from $0.21 in the previous quarter [25] - The company disposed of six multifamily real estate assets, generating net proceeds of approximately $34.7 million and realizing $13.6 million in net gains [27] Market Data and Key Metrics Changes - The Agency RMBS book is now nearly $3 billion, constituting 42% of the asset portfolio [41] - Current coupon mortgage spreads declined from 148 basis points to 129 basis points during the quarter [41] - The company has completed six securitizations in 2024, marking its most active year of issuance [36] Company Strategy and Development Direction - The company aims to build a consistent foundation of recurring earnings through interest income rather than relying on total returns [7] - A focus on rotating assets from multifamily portfolios to high coupon short-duration credit loans is emphasized [8] - The strategy includes maintaining a capital allocation of approximately 25% to 35% in the agency sector for downside support [18] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about a slowing U.S. economy and high consumer debt levels, which could impact certain sectors [10] - The company is well-positioned to navigate market volatility with a diversified mix of Agency RMBS and credit investments [34] - Future earnings are expected to improve without the negative drag from multifamily assets, with anticipated gains of $1 million to $1.5 million per quarter [28] Other Important Information - The company maintained a dividend of $0.20 per common share, unchanged from the prior quarter [33] - The recourse leverage ratio increased to 2.6 times, reflecting continued financing of investment securities [31] Q&A Session Summary Question: Is the book value largely bottomed, or should there be concerns regarding the multifamily piece? - Management indicated that the volatility in book value has stemmed from the JV equity book, which is now mostly resolved with minimal remaining value [48][49] Question: Any updates on book value quarter-to-date? - Adjusted book value is down between 1% to 2% as of the current week [50] Question: What is the gross ROE by strategy, particularly for Agency and BPL? - BPL bridge strategy shows gross ROEs of over 20% on a levered basis, while Agency ROEs are in the mid-teens due to recent volatility [53][54] Question: Has capital allocation shifted in response to wider spreads in the Agency sector? - Yes, the company has become more active in the Agency space as spreads have widened [56] Question: How has rate volatility impacted CRE and multifamily deal activity? - Overall deal activity has slowed due to increased rate volatility, with expectations for robust activity returning in early 2025 [59]