New York Mortgage Trust Reports Second Quarter 2017 Results

NEW YORK, Aug. 03, 2017 (GLOBE NEWSWIRE) -- New York Mortgage Trust, Inc. (Nasdaq:NYMT) (“NYMT,” the “Company,” “we,” “our” or “us”) today reported results for the three and six months ended June 30, 2017.

/EIN News/ -- Summary of Second Quarter 2017:

  • Net income attributable to common stockholders of $11.1 million, or $0.10 per share, and comprehensive income to common stockholders of $14.9 million, or $0.13 per share.
  • Net interest income of $15.7 million and portfolio net interest margin of 312 basis points.
  • Book value per common share of $6.02 at June 30, 2017, delivering an economic return of 2.3% for the quarter and an annualized economic return of 9.5% for the six months ended June 30, 2017.
  • Declared second quarter dividend of $0.20 per common share that was paid on July 25, 2017. 

Management Overview

Steven Mumma, NYMT's Chairman and Chief Executive Officer, commented: "The Company delivered a 2.3% economic return for the second quarter and a 9.5% annualized economic return for the first six months of the year. The Company had GAAP earnings of $0.10 per share and comprehensive earnings of $0.13 per share for the second quarter. The Company’s net interest margin improved to 312 basis points from 270 basis points in the first quarter, largely due to improved net margin in our distressed residential loan portfolio and increased average interest earning assets in our CMBS multifamily portfolio.

The credit markets continued to improve in the second quarter with spreads in many markets tightening to levels not seen in many years. This has benefited our current residential and multi-family portfolios, both in our securities investments as well as our direct lending. We expect to profitably exit several multi-family JV equity investments that were made over the last two years in the third quarter. We will continue to participate in the Freddie Mac K Series multi-family program and expect an additional opportunity to invest in a first loss security in 2017. Our portfolio margin will benefit in the third quarter from the $26.3 million preferred equity investment we closed in July. This investment has an expected return of over 12%. While the consummation of these types of credit investments continue to involve significant lead times, they remain an attractive use of capital that we will continue to pursue with vigor.

While competition for certain credit assets continues to be crowded, our diverse portfolio investment strategy allows us to seek other attractive opportunities and monetize previous investment decisions. Given the prevailing market conditions for the sourcing of new investments in credit assets, we will also consider new investments in non-credit assets that we believe will compensate us appropriately for the risks associated with them. We believe that our portfolio is well-positioned to adapt to changing market and economic conditions."

Capital Allocation

The following tables set forth our allocated capital by investment type at June 30, 2017, our interest income and interest expense by investment type, and the weighted average yield, average cost of funds and portfolio net interest margin for our interest earning assets (by investment type) for the three months ended June 30, 2017 (dollar amounts in thousands):

 
 
Capital Allocation at June 30, 2017:
   Agency
RMBS
   Agency
IOs
   Multi-
Family (1)
   Distressed
Residential (2)
   Other (3)    Total
Carrying Value $ 397,213     $ 52,224     $ 749,643     $ 568,273     $ 133,488     $ 1,900,841  
Liabilities                      
Callable (346,318 )   (30,083 )   (218,588 )   (225,827 )   (10,395 )   (831,211 )
Non-Callable         (28,735 )   (81,237 )   (127,313 )   (237,285 )
Convertible                 (127,799 )   (127,799 )
Hedges (Net) (4) 2,595     6,185                 8,780  
Cash (5) 3,984     23,167     5,133     6,740     66,332     105,356  
Goodwill                 25,222     25,222  
Other (8 )   4,917     615     19,086     (25,071 )   (461 )
Net Capital Allocated $ 57,466     $ 56,410     $ 508,068     $ 287,035     $ (65,536 )   $ 843,443  
% of Capital Allocated 6.8 %   6.7 %   60.3 %   34.0 %   (7.8 )%   100.0 %
                       
Net Interest Income- Three Months Ended June 30, 2017:
Interest Income $ 1,726     $ 278     $ 14,687     $ 9,192     $ 1,225     $ 27,108  
Interest Expense (1,088 )   (176 )   (2,657 )   (3,826 )   (3,653 )   (11,400 )
Net Interest Income $ 638     $ 102     $ 12,030     $ 5,366     $ (2,428 )   $ 15,708  
                       
Portfolio Net Interest Margin - Three Months Ended June 30, 2017
Average Interest Earning Assets (6) $ 418,998     $ 66,196     $ 529,285     $ 621,936     $ 123,711     $ 1,760,126  
Weighted Average Yield on Interest Earning Assets (7)     1.65 %   1.68 %   11.10 %   5.91 %   3.96 %   6.16 %
Less: Average Cost of Funds (8) (1.22 )%   (2.10 )%   (4.28 )%   (4.29 )%   (2.13 )%   (3.04 )%
Portfolio Net Interest Margin (9) 0.43 %   (0.42 )%   6.82 %   1.62 %   1.83 %   3.12 %
 

(1) The Company through its ownership of certain securities has determined it is the primary beneficiary of the Consolidated K-Series and has consolidated the Consolidated K-Series into the Company’s consolidated financial statements.  Average Interest Earning Assets for the quarter excludes all Consolidated K-Series assets other than those securities actually owned by the Company. Interest income amounts represent interest income earned by securities that are actually owned by the Company. A reconciliation of net capital allocated to and net interest income from multi-family investments is included below in “Additional Information.”
(2) Includes $429.8 million of distressed residential mortgage loans and $128.9 million of Non-Agency RMBS.
(3) Includes our residential mortgage loans held in securitization trusts amounting to $85.9 million, investments in unconsolidated entities amounting to $10.8 million and mortgage loans held for sale and mortgage loans held for investment totaling $35.6 million. Mortgage loans held for sale and mortgage loans held for investment are included in the Company’s accompanying condensed consolidated balance sheets in receivables and other assets. Non-callable liabilities consist of $45.0 million in subordinated debentures and $82.3 million in residential collateralized debt obligations. 
(4) Includes derivative assets, derivative liabilities, payable for securities purchased related to our TBAs and restricted cash posted as margin.
(5) Includes $18.8 million held in overnight deposits in our Agency IO portfolio to be used for trading purposes and $6.7 million in deposits held in our distressed residential securitization trusts to be used to pay down outstanding debt. These deposits are included in the Company’s accompanying condensed consolidated balance sheets in receivables and other assets. 
(6) Our Average Interest Earning Assets is calculated each quarter based on daily average amortized cost of the interest earning assets in our investment portfolio. 
(7) Our Weighted Average Yield on Interest Earning Assets was calculated by dividing our annualized interest income for the quarter by our Average Interest Earning Assets for the quarter. 
(8) Our Average Cost of Funds was calculated by dividing our annualized interest expense for the quarter by our average interest bearing liabilities, excluding our subordinated debentures and convertible notes, which generated interest expense of approximately $0.6 million and $2.6 million, respectively, for the quarter. Our Average Cost of Funds includes interest expense on our interest rate swaps and amortization of premium on our swaptions. 
(9) Portfolio Net Interest Margin is the difference between our Weighted Average Yield on Interest Earning Assets and our Average Cost of Funds, excluding the weighted average cost of subordinated debentures and convertible notes.

Prepayment History

The following table sets forth the actual constant prepayment rates (“CPR”) for selected asset classes, by quarter, for the quarterly periods indicated.

 
 
Quarter Ended   Agency
ARMs
  Agency
Fixed-Rate
RMBS
  Agency
IOs
 
Residential
Securitizations
  Total Weighted
Average
June 30, 2017   16.5 %   9.6 %   17.5 %   16.8 %   14.7 %
March 31, 2017   8.3 %   10.6 %   15.9 %   5.1 %   12.6 %
December 31, 2016   21.7 %   12.3 %   19.4 %   11.1 %   16.9 %
September 30, 2016             20.7 %   10.0 %   18.2 %   15.9 %   16.1 %
June 30, 2016   17.6 %   10.2 %   15.6 %   17.8 %   14.6 %
March 31, 2016   13.5 %   7.9 %   14.7 %   14.8 %   12.7 %
December 31, 2015   16.9 %   8.5 %   14.6 %   31.2 %   14.7 %
September 30, 2015   18.6 %   10.5 %   18.0 %   8.9 %   15.1 %
June 30, 2015   9.2 %   10.6 %   16.3 %   11.1 %   13.3 %
                               
                               

Second Quarter Earnings Summary

For the quarter ended June 30, 2017, we reported net income attributable to common stockholders of $11.1 million as compared to $16.0 million in the quarter ended March 31, 2017. The $4.9 million decrease is primarily due to lower gains from decreased sales activity in our distressed residential loan portfolio partially offset by increased net interest margin and recovery of incentive fees.

We generated net interest income of $15.7 million and a portfolio net interest margin of 312 basis points for the quarter ended June 30, 2017 as compared to net interest income of $13.9 million and a portfolio net interest margin of 270 basis points for the quarter ended March 31, 2017.  The increase in net interest income of $1.8 million and improved net margin of 42 basis points was primarily driven by:

  • An increase in net interest income of $1.3 million from our multi-family portfolio due to an increase in average interest earning multi-family CMBS assets resulting from purchases at the end of the first quarter that were held for the entirety of the second quarter.
  • An increase in net interest income of approximately $1.4 million from our distressed residential portfolio due to an increase in asset yields in the second quarter.
  • A decrease in net interest income of $0.4 million from our Agency IO portfolio in the second quarter primarily related to lower asset yields resulting from increased prepayment rates and higher financing costs in the second quarter.

For the quarter ended June 30, 2017, we recognized other income of $8.2 million as compared to other income of $16.7 million in the quarter ended March 31, 2017.  The decrease in other income of $8.5 million is primarily driven by:

  • A decrease in realized gains on distressed residential mortgage loans of $9.6 million resulting from decreased sales activity.
  • A decrease in net unrealized gains on investment securities and related hedges of $2.6 million primarily related to a decrease in pricing on our Agency IO  portfolio.
  • An increase in realized gain on investment securities and related hedges of $2.3 million primarily due to increases in net gains recognized on investment securities and related hedges in the Agency IO portfolio partially offset by a decrease in realized gains on CMBS.
  • An increase in income from operating real estate and real estate held for sale in consolidated variable interest entities of $2.3 million during the second quarter related to the consolidation in accordance with GAAP of two multi-family apartment properties in which the Company has preferred equity investments.
  • A decrease in other income of $0.6 million primarily due to a decrease in income on our investments in unconsolidated entities.

The following table details the general and administrative expenses incurred during the second quarter of 2017 and the first quarter of 2017 (dollar amounts in thousands):

     
     
    Three Months Ended
General and Administrative Expenses   June 30, 2017   March 31, 2017
Salaries, benefits and directors’ compensation       $ 2,920     $ 2,835  
Base management and incentive fees   (109 )   3,078  
Other general and administrative expenses   2,145     2,052  
Total general and administrative expenses   $ 4,956     $ 7,965  
 
 

Total general and administrative expenses for the second quarter of 2017 were approximately $5.0 million as compared to total general and administrative expenses of approximately $8.0 million for the first quarter of 2017.  The decrease in general and administrative expenses of $3.0 million can be primarily attributed to the recovery of incentive fee expense on our distressed residential loan strategy due to lower gains from decreased sales activity during the second quarter of 2017 as compared to the first quarter of 2017.

The following table details the operating expenses related to our distressed residential mortgage loans and the consolidated multi-family apartment properties during the second quarter of 2017 and the first quarter of 2017 (dollar amounts in thousands):

     
     
    Three Months Ended
Operating Expenses   June 30, 2017   March 31, 2017
Expenses on distressed residential mortgage loans   $ 2,218     $ 2,239  
Expenses related to operating real estate and real estate held for sale in consolidated variable interest entities       4,415      
Total operating expenses   $ 6,633     $ 2,239  
 
 

Total operating expenses for the second quarter of 2017 were $6.6 million as compared to $2.2 million for the first quarter of 2017.  The increase in total operating expenses of $4.4 million is primarily attributable to recognition of expenses related to consolidated multi-family apartment properties beginning in the second quarter of 2017.

The results of operations applicable to the consolidated multi-family apartment properties included in the Company's condensed consolidated statements of operations for the three months ended June 30, 2017 are as follows (dollar amounts in thousands):

 
 
     Three Months Ended
June 30, 2017
Income from operating real estate and real estate held for sale in consolidated variable interest entities   $ 2,316  
Expenses related to operating real estate and real estate held for sale in consolidated variable interest entities   4,415  
Net loss from operating real estate and real estate held for sale in consolidated variable interest entities   (2,099 )
Net loss from operating real estate and real estate held for sale in consolidated variable interest entities attributable to non-controlling interest   2,486  
Net income from operating real estate and real estate held for sale in consolidated variable interest entities attributable to Company's common stockholders       $ 387  
 
 

Analysis of Changes in Book Value

The following table analyzes the changes in book value of our common stock for the quarter ended June 30, 2017 (amounts in thousands, except per share):

   
   
  Quarter Ended June 30, 2017
  Amount   Shares   Per Share(1)
Beginning Balance $ 680,197     111,843     $ 6.08  
Common stock issuance, net 653     48      
Balance after share issuance activity 680,850     111,891     6.08  
Dividends declared (22,378 )       (0.20 )
Net change in accumulated other comprehensive income:          
Hedges (72 )        
Investment securities 3,870         0.04  
Net income attributable to Company's common stockholders     11,111         0.10  
Ending Balance $ 673,381     111,891     $ 6.02  
 

(1) Outstanding shares used to calculate book value per share for the ending balance is based on outstanding shares as of June 30, 2017 of 111,891,130.

Conference Call

On Friday, August 4, 2017 at 9:00 a.m., Eastern Time, New York Mortgage Trust's executive management is scheduled to host a conference call and audio webcast to discuss the Company’s financial results for the three and six months ended June 30, 2017. The conference call dial-in number is (877) 312-8806. The replay will be available until Friday, August 11, 2017 and can be accessed by dialing (855) 859-2056 and entering passcode 56892917.  A live audio webcast of the conference call can be accessed via the Internet, on a listen-only basis, at the Company's website at http://www.nymtrust.com.  Please allow extra time, prior to the call, to visit the site and download the necessary software to listen to the Internet broadcast.

Second quarter 2017 financial and operating data can be viewed in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, which is expected to be filed with the Securities and Exchange Commission on or about August 9, 2017. A copy of the Form 10-Q will be posted at the Company’s website as soon as reasonably practicable following its filing with the Securities and Exchange Commission.

About New York Mortgage Trust

New York Mortgage Trust, Inc. is a Maryland corporation that has elected to be taxed as a real estate investment trust for federal income tax purposes (“REIT”). NYMT is an internally managed REIT in the business of acquiring, investing in, financing and managing mortgage-related and residential housing-related assets and financial assets and targets residential mortgage loans, including second mortgages and loans sourced from distressed markets, multi-family CMBS, direct financing to owners of multi-family properties through mezzanine loans and preferred equity investments, other commercial and residential real estate-related investments and Non-Agency RMBS. The Midway Group, L.P. and Headlands Asset Management, LLC provide investment management services to the Company with respect to certain of its asset classes. For a list of defined terms used from time to time in this press release, see “Defined Terms” below.

Defined Terms

The following defines certain of the commonly used terms in this press release: “RMBS” refers to residential mortgage-backed securities comprised of adjustable-rate, hybrid adjustable-rate, fixed-rate, interest only and inverse interest only, and principal only securities; “Agency RMBS” refers to RMBS representing interests in or obligations backed by pools of residential mortgage loans issued or guaranteed by a federally chartered corporation ("GSE"), such as the Federal National Mortgage Association (“Fannie Mae”) or the Federal Home Loan Mortgage Corporation (“Freddie Mac”), or an agency of the U.S. government, such as the Government National Mortgage Association (“Ginnie Mae”); "Non-Agency RMBS" refers to RMBS backed by prime jumbo mortgage loans including re-performing and non-performing loans; “Agency ARMs” refers to Agency RMBS comprised of adjustable-rate and hybrid adjustable-rate RMBS; "Agency fixed-rate RMBS" refers to Agency RMBS comprised of fixed-rate RMBS; “IOs” refers collectively to interest only and inverse interest only mortgage-backed securities that represent the right to the interest component of the cash flow from a pool of mortgage loans; “Agency IOs” refers to an IO that represents the right to the interest component of cash flow from a pool of residential mortgage loans issued or guaranteed by a GSE, or an agency of the U.S. government; “POs” refers to mortgage-backed securities that represent the right to the principal component of the cash flow from a pool of mortgage loans; “ARMs” refers to adjustable-rate residential mortgage loans; “residential securitized loans” refers to prime credit quality ARMs held in securitization trusts; “distressed residential mortgage loans” refers to pools of performing, re-performing and to a lesser extent non-performing, fixed-rate and adjustable-rate, fully amortizing, interest-only and balloon, seasoned mortgage loans secured by first liens on one- to four-family properties; “CMBS” refers to commercial mortgage-backed securities comprised of commercial mortgage pass-through securities, as well as IO or PO securities that represent the right to a specific component of the cash flow from a pool of commercial mortgage loans; “multi-family CMBS” refers to CMBS backed by commercial mortgage loans on multi-family properties; “multi-family securitized loans” refers to the commercial mortgage loans included in the Consolidated K-Series; “CDO” refers to collateralized debt obligation; “CLO” refers to collateralized loan obligation; and "Consolidated K-Series” refers to six separate Freddie Mac-sponsored multi-family loan K-Series securitizations in which the Company owns certain securities.

Additional Information

We determined that the Consolidated K-Series were variable interest entities and that we are the primary beneficiary of the Consolidated K-Series. As a result, we are required to consolidate the Consolidated K-Series’ underlying multi-family loans including their liabilities, income and expenses in our condensed consolidated financial statements. We have elected the fair value option on the assets and liabilities held within the Consolidated K-Series, which requires that changes in valuations in the assets and liabilities of the Consolidated K-Series be reflected in our condensed consolidated statements of operations.

A reconciliation of our net capital allocated to multi-family investments to our condensed consolidated financial statements as of June 30, 2017 is set forth below (dollar amounts in thousands):

       
       
Multi-family loans held in securitization trusts, at fair value $ 8,468,104  
Multi-family CDOs, at fair value (8,069,938 )
Net carrying value 398,166  
Investment securities available for sale, at fair value 161,429  
Total CMBS, at fair value 559,595  
Mezzanine loan, preferred equity investments and investments in unconsolidated entities     162,212  
Real estate under development (1) 19,972  
Operating real estate held in consolidated variable interest entities, net 28,907  
Real estate held for sale in consolidated variable interest entities 34,806  
Mortgages and notes payable in consolidated variable interest entities (55,849 )
Financing arrangements, portfolio investments (218,588 )
Securitized debt (28,735 )
Cash and other 5,748  
Net Capital in Multi-Family $ 508,068  
 

(1) Included in the Company’s accompanying condensed consolidated balance sheets in receivables and other assets.

A reconciliation of our net interest income in multi-family investments to our condensed consolidated financial statements for the three months ended June 30, 2017 is set forth below (dollar amounts in thousands):

 
  Three Months Ended
June 30, 2017
Interest income, multi-family loans held in securitization trusts $ 75,752  
Interest income, investment securities, available for sale (1) 2,716  
Interest income, mezzanine loan and preferred equity investments (1)     3,092  
Interest expense, multi-family collateralized debt obligation 66,873  
Interest income, Multi-Family, net 14,687  
Interest expense, investment securities, available for sale 1,954  
Interest expense, securitized debt 703  
Net interest income, Multi-Family $ 12,030  
 

(1) Included in the Company’s accompanying condensed consolidated statements of operations in interest income, investment securities and other.

Cautionary Statement Regarding Forward-Looking Statements

When used in this press release, in future filings with the Securities and Exchange Commission (“SEC”) or in other written or oral communications, statements which are not historical in nature, including those containing words such as “believe,” “expect,” “anticipate,” “estimate,” “plan,” “continue,” “intend,” “should,” “would,” “could,” “goal,” “objective,” “will,” “may” or similar expressions, are intended to identify “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"), and, as such, may involve known and unknown risks, uncertainties and assumptions.

Forward-looking statements are based on the Company’s beliefs, assumptions and expectations of its future performance, taking into account all information currently available to it. These beliefs, assumptions and expectations are subject to risks and uncertainties and can change as a result of many possible events or factors, not all of which are known to the Company. If a change occurs, the Company’s business, financial condition, liquidity and results of operations may vary materially from those expressed in its forward-looking statements. The following factors are examples of those that could cause actual results to vary from the Company’s forward-looking statements: changes in interest rates and the market value of the Company’s securities; changes in credit spreads; the impact of the downgrade of the long-term credit ratings of the U.S., Fannie Mae, Freddie Mac, and Ginnie Mae; market volatility; changes in the prepayment rates on the mortgage loans underlying the Company’s investment securities; increased rates of default and/or decreased recovery rates on the Company's assets; the Company’s ability to borrow to finance its assets and the terms thereof; changes in governmental laws, regulations or policies affecting the Company’s business; changes in the Company's relationships with its external managers; the Company’s ability to maintain its qualification as a REIT for federal tax purposes; the Company’s ability to maintain its exemption from registration under the Investment Company Act of 1940, as amended; and risks associated with investing in real estate assets, including changes in business conditions and the general economy. These and other risks, uncertainties and factors, including the risk factors described in the Company’s reports filed with the SEC pursuant to the Exchange Act, could cause the Company’s actual results to differ materially from those projected in any forward-looking statements it makes. All forward-looking statements speak only as of the date on which they are made. New risks and uncertainties arise over time and it is not possible to predict those events or how they may affect the Company. Except as required by law, the Company is not obligated to, and does not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

FINANCIAL TABLES FOLLOW

 
 
NEW YORK MORTGAGE TRUST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except share data)
 
    June 30, 2017   December 31, 2016
    (unaudited)    
ASSETS        
Investment securities, available for sale, at fair value (including $45,400 and $43,897 held in securitization trusts as of June 30, 2017 and December 31, 2016, respectively, and pledged securities of $550,856 and $690,592, as of June 30, 2017 and December 31, 2016, respectively)   $ 740,903     $ 818,976  
Residential mortgage loans held in securitization trusts, net   85,911     95,144  
Distressed residential mortgage loans, net (including $152,621 and $195,347 held in securitization trusts as of June 30, 2017 and December 31, 2016, respectively)   429,792     503,094  
Multi-family loans held in securitization trusts, at fair value   8,468,104     6,939,844  
Derivative assets   172,642     150,296  
Receivable for securities sold   5,976      
Cash and cash equivalents   75,391     83,554  
Investment in unconsolidated entities   72,817     79,259  
Mezzanine loan and preferred equity investments   100,207     100,150  
Operating real estate held in consolidated variable interest entities, net   28,907      
Real estate held for sale in consolidated variable interest entities   34,806      
Goodwill   25,222     25,222  
Receivables and other assets   165,896     156,092  
Total Assets (1)   $ 10,406,574     $ 8,951,631  
LIABILITIES AND STOCKHOLDERS' EQUITY        
Liabilities:        
Financing arrangements, portfolio investments   $ 656,350     $ 773,142  
Financing arrangements, residential mortgage loans   174,861     192,419  
Residential collateralized debt obligations   82,313     91,663  
Multi-family collateralized debt obligations, at fair value   8,069,938     6,624,896  
Securitized debt   109,972     158,867  
Mortgages and notes payable in consolidated variable interest entities   55,849     1,588  
Derivative liabilities   310     498  
Payable for securities purchased   172,557     148,015  
Accrued expenses and other liabilities   68,182     64,381  
Subordinated debentures   45,000     45,000  
Convertible notes   127,799      
Total liabilities (1)   9,563,131     8,100,469  
Commitments and Contingencies        
Stockholders' Equity:        
Preferred stock, $0.01 par value, 7.75% Series B cumulative redeemable, $25 liquidation preference per share, 6,000,000 shares authorized, 3,000,000 shares issued and outstanding   72,397     72,397  
Preferred stock, $0.01 par value, 7.875% Series C cumulative redeemable, $25 liquidation preference per share, 4,140,000 shares authorized, 3,600,000 shares issued and outstanding   86,862     86,862  
Common stock, $0.01 par value, 400,000,000 shares authorized, 111,891,130 and 111,474,521 shares issued and outstanding as of June 30, 2017 and December 31, 2016, respectively                                                                                           1,119     1,115  
Additional paid-in capital   749,862     748,599  
Accumulated other comprehensive income   8,358     1,639  
Accumulated deficit   (80,217 )   (62,537 )
Company's stockholders' equity   838,381     848,075  
Non-controlling interest in consolidated variable interest entities   5,062     3,087  
Total equity   843,443     851,162  
Total Liabilities and Stockholders' Equity   $ 10,406,574     $ 8,951,631  
 

(1) Our condensed consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs") as the Company is the primary beneficiary of these VIEs. As of June 30, 2017 and December 31, 2016, assets of consolidated VIEs totaled $8,880,785 and $7,330,872, respectively, and the liabilities of consolidated VIEs totaled$8,349,762 and $6,902,536, respectively.

 
 
NEW YORK MORTGAGE TRUST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
(unaudited)
 
  For the Three
Months Ended
June 30,
  For the Six Months
Ended
June 30,
  2017   2016   2017   2016
INTEREST INCOME:              
Investment securities and other $ 10,199     $ 8,591     $ 20,000     $ 17,025  
Multi-family loans held in securitization trusts 75,752     61,769     137,056     125,301  
Residential mortgage loans held in securitization trusts 1,365     921     2,607     1,757  
Distressed residential mortgage loans 6,665     8,485     12,703     17,309  
Total interest income 93,981     79,766     172,366     161,392  
               
INTEREST EXPENSE:              
Investment securities and other 5,805     3,962     11,374     7,811  
Convertible notes 2,615         4,590      
Multi-family collateralized debt obligations 66,873     55,224     120,805     112,424  
Residential collateralized debt obligations 239     312     575     615  
Securitized debt 2,171     3,096     4,286     5,227  
Subordinated debentures 570     508     1,110     1,009  
Total interest expense 78,273     63,102     142,740     127,086  
               
NET INTEREST INCOME 15,708     16,664     29,626     34,306  
               
OTHER INCOME (LOSS):              
(Provision for) recovery of loan losses (300 )   42     (112 )   688  
Realized gain (loss) on investment securities and related hedges, net 1,114     1,761     (109 )   3,027  
Realized gain on distressed residential mortgage loans, net 2,364     26     14,335     5,574  
Unrealized (loss) gain on investment securities and related hedges, net (1,051 )   (667 )   495     (3,159 )
Unrealized gain on multi-family loans and debt held in securitization trusts, net 1,447     784     2,831     1,602  
Income from operating real estate and real estate held for sale in consolidated variable interest entities 2,316         2,316      
Other income 2,282     8,125     5,121     11,198  
Total other income 8,172     10,071     24,877     18,930  
               
Base management and incentive fees (109 )   2,979     2,969     6,504  
Expenses related to distressed residential mortgage loans 2,218     2,740     4,457     5,934  
Expenses related to operating real estate and real estate held for sale in consolidated variable interest entities     4,415         4,415      
Other general and administrative expenses 5,065     4,217     9,952     6,857  
Total general, administrative and operating expenses 11,589     9,936     21,793     19,295  
               
INCOME FROM OPERATIONS BEFORE INCOME TAXES 12,291     16,799     32,710     33,941  
Income tax expense 442     2,366     1,680     2,557  
NET INCOME 11,849     14,433     31,030     31,384  
Net loss attributable to non-controlling interest in consolidated variable interest entities 2,487     2     2,487     2  
NET INCOME ATTRIBUTABLE TO COMPANY 14,336     14,435     33,517     31,386  
Preferred stock dividends (3,225 )   (3,225 )   (6,450 )   (6,450 )
NET INCOME ATTRIBUTABLE TO COMPANY'S COMMON STOCKHOLDERS $ 11,111     $ 11,210     $ 27,067     $ 24,936  
               
Basic earnings per common share $ 0.10     $ 0.10     $ 0.24     $ 0.23  
Diluted earnings per common share $ 0.10     $ 0.10     $ 0.24     $ 0.23  
Weighted average shares outstanding-basic 111,863     109,489     111,792     109,445  
Weighted average shares outstanding-diluted 111,863     109,489     111,792     109,445  


 
 
NEW YORK MORTGAGE TRUST, INC. AND SUBSIDIARIES
SUMMARY OF QUARTERLY EARNINGS
(Dollar amounts in thousands, except per share data)
(unaudited)
 
  For the Three Months Ended
  June 30,
2017
  March 31,
2017
  December 31,
2016
  September 30,
2016
  June 30,
2016
Net interest income $ 15,708     $ 13,918     $ 14,814     $ 15,518     $ 16,664  
Total other income 8,172     16,705     5,675     16,632     10,071  
Total general, administrative and operating expenses 11,589     10,204     7,220     8,705     9,936  
Income from operations before income taxes 12,291     20,419     13,269     23,445     16,799  
Income tax expense 442     1,237     375     163     2,366  
Net income 11,849     19,182     12,894     23,282     14,433  
Net loss (income) attributable to non-controlling interest in consolidated variable interest entities     2,487         3     (14 )   2  
Net income attributable to Company 14,336     19,182     12,897     23,268     14,435  
Preferred stock dividends (3,225 )   (3,225 )   (3,225 )   (3,225 )   (3,225 )
Net income attributable to Company's common stockholders 11,111     15,957     9,672     20,043     11,210  
Basic earnings per common share $ 0.10     $ 0.14     $ 0.09     $ 0.18     $ 0.10  
Diluted earnings per common share $ 0.10     $ 0.14     $ 0.09     $ 0.18     $ 0.10  
Weighted average shares outstanding - basic 111,863     111,721     109,911     109,569     109,489  
Weighted average shares outstanding - diluted 111,863     126,602     109,911     109,569     109,489  
                   
Book value per common share $ 6.02     $ 6.08     $ 6.13     $ 6.34     $ 6.38  
Dividends declared per common share $ 0.20     $ 0.20     $ 0.24     $ 0.24     $ 0.24  
Dividends declared per preferred share on Series B Preferred Stock $ 0.484375     $ 0.484375     $ 0.484375     $ 0.484375     $ 0.484375  
Dividends declared per preferred share on Series C Preferred Stock $ 0.4921875     $ 0.4921875     $ 0.4921875     $ 0.4921875     $ 0.4921875  
                                       
                                       

Capital Allocation Summary

The following tables set forth our allocated capital by investment type as well as the weighted average yield on interest earning assets, average cost of funds and portfolio net interest margin for our interest earning assets for the periods indicated (dollar amounts in thousands):

 
 
   Agency
RMBS
   Agency IOs    Multi-
Family
   Distressed
Residential
  Other    Total
At June 30, 2017                      
Carrying value $ 397,213     $ 52,224     $ 749,643     $ 568,273     $ 133,488     $ 1,900,841  
Net capital allocated $ 57,466     $ 56,410     $ 508,068     $ 287,035     $ (65,536 )   $ 843,443  
Three Months Ended June 30, 2017                      
Average interest earning assets $ 418,998     $ 66,196     $ 529,285     $ 621,936     $ 123,711     $ 1,760,126  
Weighted average yield on interest earning assets     1.65 %   1.68 %   11.10 %   5.91 %   3.96 %   6.16 %
Less: Average cost of funds (1.22 )%   (2.10 )%   (4.28 )%   (4.29 )%   (2.13 )%   (3.04 )%
Portfolio net interest margin 0.43 %   (0.42 )%   6.82 %   1.62 %   1.83 %   3.12 %
                       
At March 31, 2017                      
Carrying value $ 420,124     $ 61,836     $ 733,383     $ 645,455     $ 132,266     $ 1,993,064  
Net capital allocated $ 68,156     $ 68,135     $ 501,133     $ 282,487     $ (67,165 )   $ 852,746  
Three Months Ended March 31, 2017                      
Average interest earning assets $ 441,013     $ 88,472     $ 457,943     $ 661,738     $ 120,372     $ 1,769,538  
Weighted average yield on interest earning assets 1.72 %   3.24 %   11.31 %   4.69 %   3.73 %   5.53 %
Less: Average cost of funds (1.16 )%   (1.77 )%   (4.55 )%   (3.71 )%   (2.81 )%   (2.83 )%
Portfolio net interest margin 0.56 %   1.47 %   6.76 %   0.98 %   0.92 %   2.70 %
                       
At December 31, 2016                      
Carrying value $ 441,472     $ 87,778     $ 628,522     $ 671,272     $ 127,359     $ 1,956,403  
Net capital allocated $ 59,846     $ 76,880     $ 394,401     $ 257,903     $ 62,132     $ 851,162  
Three Months Ended December 31, 2016                      
Average interest earning assets $ 462,229     $ 100,573     $ 377,751     $ 673,639     $ 121,761     $ 1,735,953  
Weighted average yield on interest earning assets 1.36 %   0.49 %   12.36 %   5.48 %   3.37 %   5.44 %
Less: Average cost of funds (1.22 )%   (1.70 )%   (5.54 )%   (3.64 )%   (2.48 )%   (2.81 )%
Portfolio net interest margin 0.14 %   (1.21 )%   6.82 %   1.84 %   0.89 %   2.63 %
                       
At September 30, 2016                      
Carrying value $ 479,359     $ 86,343     $ 561,207     $ 679,873     $ 126,841     $ 1,933,623  
Net capital allocated $ 59,482     $ 87,845     $ 413,943     $ 258,659     $ 43,151     $ 863,080  
Three Months Ended September 30, 2016                      
Average interest earning assets $ 491,843     $ 118,945     $ 341,637     $ 686,122     $ 122,825     $ 1,761,372  
Weighted average yield on interest earning assets 1.55 %   4.11 %   12.55 %   5.48 %   3.01 %   5.49 %
Less: Average cost of funds (0.58 )%   (3.98 )%   (6.55 )%   (3.45 )%   (2.39 )   (2.67 )%
Portfolio net interest margin 0.97 %   0.13 %   6.00 %   2.03 %   0.62 %   2.82 %
                       
At June 30, 2016                      
Carrying value $ 507,294     $ 114,007     $ 519,341     $ 655,968     $ 130,188     $ 1,926,798  
Net capital allocated $ 69,961     $ 92,471     $ 431,084     $ 256,619     $ 16,908     $ 867,043  
Three Months Ended June 30, 2016                      
Average interest earning assets $ 522,651     $ 132,453     $ 315,531     $ 595,455     $ 125,454     $ 1,691,544  
Weighted average yield on interest earning assets 1.62 %   8.18 %   12.35 %   6.11 %   2.79 %   5.80 %
Less: Average cost of funds (0.71 )%   (2.51 )%   (6.73 )%   (3.90 )%   (2.24 )   (2.59 )%
Portfolio net interest margin 0.91 %   5.67 %   5.62 %   2.21 %   0.55 %   3.21 %
 
CONTACT:
                    AT THE COMPANY	
                    Kristine R. Nario
                    Chief Financial Officer
                    Phone:  (646) 216-2363
                    Email: knario@nymtrust.com
                    

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