New York Mortgage Trust Reports Third Quarter 2005 Results
New York Mortgage Trust Reports Third Quarter 2005 ResultsNEW YORK, Nov. 9 /PRNewswire-FirstCall/ -- New York Mortgage Trust, Inc. (NYSE: NTR), a self-advised residential mortgage finance company organized as a real estate investment trust ("REIT"), today reported results for the three months and nine months ended September 30, 2005. Highlights included:
- Record third quarter 2005 loan origination volume with growth of over 141% to $1.0 billion as compared to $415.4 million for the same period in 2004;
- Record third quarter 2005 loan application volume of $1.3 billion;
- The net income for the Company's Mortgage Portfolio Management segment totaled $3.8 million, or $0.21 per share, for the third quarter 2005;
- Consolidated net income for the Company totaled $2.9 million, or $0.16 per share, for the third quarter 2005 an increase of 16% from $2.5 million, or $0.14 per share, for the same period in 2004;
- The net interest margin on the Company's mortgage portfolio for the third quarter 2005 averaged 70 basis points down from 100 basis points in the second quarter 2005 due to a continued increase in our cost of funds and loan prepayment speeds; and,
- On July 28, 2005, the Company completed its second loan securitization of $239.5 million of high credit quality, first-lien adjustable-rate mortgage (ARM) loans through New York Mortgage Trust 2005-2 which will reduce borrowing costs and improve the liquidity of the investment portfolio.
Third Quarter Financial Highlights
For the third quarter 2005, the Company's Mortgage Portfolio Management segment (REIT operations exclusive of its taxable REIT subsidiaries) reported revenues of $16.5 million and net income of $3.8 million, or $0.21 per share.
The Company's Mortgage Lending segment (the Company's wholly owned taxable REIT subsidiaries or "TRS") reported revenues of $16.2 million and a net loss of $0.9 million and combined with the net income from the Company's Mortgage Portfolio Management segment results in a consolidated net income of $2.9 million for the third quarter 2005. The loss in the Company's TRS was primarily due to forgone gains on sale associated with the cost-basis transfer of originated loans to the REIT rather than being sold to third parties for which the Company would have earned additional estimated premium income of $1.5 million pre-tax. Adjusting for such foregone revenues during the third quarter 2005, the TRS would have operated at an approximate breakeven and consolidated after-tax net income for this period would have been $3.7 million.
Additionally, the TRS incurred startup expenses relating to the creation of its new wholesale loan division of $1.2 million and accrued expenses of $0.3 million related to its assumption of the branches and sales force of Guaranty Residential Lending, Inc. ("GRL") during the third quarter 2005. Adjusting for these expenses, the Company noted that its Mortgage Lending segment would have operated at a profit during the third quarter 2005.
The Company noted that its Mortgage Portfolio Management segment performed as expected in the current interest rate environment. Net interest spreads continued to narrow during the third quarter 2005 by approximately 30 basis points to 70 basis points relative to a net interest margin of 100 basis points in the second quarter 2005.
Comments from Management
"The record $1.0+ billion origination volume during the third quarter 2005 from our Mortgage Lending segment is a direct result of our planned growth initiatives over the past year and represents mortgage loan production growth of over 141% relative to the 2004 third quarter. Additionally, our Mortgage Lending segment was profitable after adding back foregone premiums on loans retained and expenses related to the ramp-up of our new wholesale division," Steven B. Schnall, Chairman, President and Co-Chief Executive Officer, commented.
Mr. Schnall further commented, "Our goal, which we expect to achieve by early 2006, is for our Mortgage Lending segment to be profitable notwithstanding the foregone premium on loans retained. The mortgage origination business is expected to be a meaningful contributor to our financial results, particularly as our wholesale division ramps up as projected during the next few months, and we realize efficiencies from a new loan origination system expected to be implemented in early 2006. We are pleased to note that our wholesale division is on track with its volume and financial projections and we expect it to turn to net profitability early next year. Strategically, the ramp-up of this unit will enable us to supplement our mortgage banking business while offsetting the traditional seasonal slowdown in retail origination volume."
"Our Mortgage Portfolio Management segment continues to be challenged by the current interest rate environment; our net interest spread narrowed during the third quarter by 30 basis points relative to the spreads earned during the immediate preceding quarter," Mr. Schnall said.
Michael I. Wirth, Chief Financial Officer, added, "Our third quarter 2005 results demonstrate the advantage an active REIT strategy can have, particularly in the prime mortgage loan sector and with the proper economies of scale, with regard to its dual earnings streams: one being from net interest margin on our loan portfolio and another from mortgage lending activities and the sale of such loans to third parties. With the exception of our wholesale division, which is still in its start-up phase, the costs of our growth initiatives are nearly behind us: the GRL acquisition, which is responsible for a significant portion of our origination volume growth, has been fully integrated and the ongoing upfront costs of that acquisition, primarily in the form of performance related restricted stock continue to quickly amortize to the point that this expense will be relatively insignificant in 2006."
Mr. Wirth added, "The quality of our mortgage loan portfolio continues to be outstanding; we currently have only two past due loans in our portfolio representing 0.16% of our portfolio value and for which we currently expect no losses - a testament in part to our focus on high credit quality borrowers and our origination and investment expertise. The average borrower credit score on loans in our portfolio is 734 with an average loan-to-value ratio of 69%. Furthermore, we do not invest in negative amortization or "option ARM" loans. Our net duration gap between the average lives of assets to liabilities is approximately eight months."
As of September 30, 2005, the Company's total assets were $1.9 billion, including $797.1 million of residential mortgage-backed securities, $589.4 million of loans held in securitization trusts, $140.4 million of residential mortgage loans held for investment, $143.6 million due from loan purchasers, and $116.5 million of residential mortgage loans held for sale. The Company, at September 30, 2005, had $1.7 billion outstanding under its various financing facilities.
A breakdown of the Company's loan originations for the 2005 third quarter
follows:
Aggregate Percentage
Principal Of Weighted
Number Balance Total Average Average Weighted
of ($ in Principal Interest Principal Average
Loans millions) Rate Balance LTV FICO
ARM 1,727 $513.3 51.2% 6.10% $297,213 73.8 705
Fixed-rate 1,946 392.2 39.1% 6.43% 201,537 73.2 717
Subtotal-
non-FHA* 3,673 $905.5 90.3% 6.25% $246,522 73.5 710
FHA - ARM 4 $0.9 0.1% 5.80% $217,202 94.7 642
FHA - fixed-rate 700 95.8 9.6% 5.72% 136,954 92.9 633
Subtotal - FHA 704 $96.7 9.7% 5.72% $137,410 93.0 633
Total ARM 1,731 $514.2 51.3% 6.10% $297,028 73.8 705
Total fixed-rate 2,646 $488.0 48.7% 6.29% $184,451 77.1 700
Total
Originations 4,377 $1,002.2 100.0% 6.19% $228,973 75.4 703
Purchase
mortgages 2,568 $558.1 55.7% 6.39% $217,314 78.1 719
Refinancings 1,105 347.4 34.6% 6.01% 314,402 66.2 696
Subtotal-
non-FHA* 3,673 $905.5 90.3% 6.25% $246,522 73.5 710
FHA - purchase 71 $11.7 1.2% 6.05% $165,045 96.3 659
FHA - refinancings 633 85.0 8.5% 5.67% 134,310 92.5 630
Subtotal - FHA 704 $96.7 9.7% 5.72% $137,410 93.0 633
Total purchase 2,639 $569.8 56.9% 6.38% $215,908 78.5 718
Total
refinancings 1,738 $432.4 43.1% 5.94% $248,811 71.4 683
Total
Originations 4,377 $1,002.2 100.0% 6.19% $228,973 75.4 703
* FHA originations are Streamlined Refinance mortgages with low average balances. All loans from this branch are and will continue to be sold to third party investors.
Investment Activity
At the end of the third quarter of 2005, the Company's portfolio of investment securities totaled $797.1 million and had a weighted average purchase price of $101.16. Approximately 62% of the securities purchased are backed by 3/1 hybrid adjustable rate mortgages, 36% are backed by 5/1 hybrid adjustable rate mortgages and the remaining 2% comprised of short reset floating rate securities. In addition, loans held in securitization trusts totaled $589.4 million and had an average purchase price of $100.89. The Company had mortgage loans held for investment of $140.4 million at an average purchase price of $100.54. Approximately 38% of loans held in the portfolio have interest rate resets of less than 24 months, 8% with resets less than 36 months and the remaining 54% with resets greater than 36 months. The investment securities and the loans held in securitization trusts are financed in part with debt totaling $1.3 billion.
The net interest margin on the Company's mortgage portfolio for the three- month period ended September 30, 2005 averaged 70 basis points down from 100 basis points in the prior quarter. This reduction in spreads is reflective of the current flattening yield curve environment as well as accelerated prepayment speeds on the Company's securities portfolio. The Company expects to more fully realize the benefits associated with its self-origination capabilities either by retaining selected lower-cost mortgage loans for its portfolio or, as market conditions dictate, selling such originations to third parties for gain on sale revenue.
The following table summarizes the Company's investment portfolio of residential mortgage-backed securities and loans owned at September 30, 2005, classified by type of issuer or by ratings categories:
Carrying
Par Value Coupon Value Yield
Agency ARMs $431,323,089 4.21% $430,300,762 4.67%
Non-Agency AAA - rated ARMs 343,765,084 4.76% 342,989,523 4.97%
Floating Rate CMOs 23,767,856 4.99% 23,789,008 5.10%
Loans held for investment 139,656,332 5.68% 140,411,907 5.26%
Loans held in securitization
trusts 584,145,552 4.91% 589,354,405 5.34%
Total $1,522,657,913 4.75% $1,526,845,605 5.06%
Conference Call
On Thursday, November 10, 2005 at 10:00 a.m. Eastern time, New York Mortgage Trust's executive management will host a conference call and audio webcast highlighting the Company's third quarter financial results. The conference call dial-in number is 303-262-2140. A live audio webcast of the conference call can be accessed via the Internet, on a listen-only basis, at http://www.earnings.com or at the Investor Relations section of 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. The online archive of the webcast will be available for approximately 90 days.
About New York Mortgage Trust
New York Mortgage Trust, Inc. (NYMT) is a real estate investment trust (REIT) focused on owning and managing a leveraged portfolio of residential mortgage securities and a mortgage origination business. The mortgage portfolio is comprised largely of prime adjustable-rate and hybrid mortgage loans and securities, much of which, over time will be originated by NYMT's wholly owned mortgage origination business, The New York Mortgage Company, LLC (NYMC), a taxable REIT subsidiary. The ability to build a portion of its loan portfolio from loans internally originated is a cornerstone of NYMT's strategy.
This news release contains forward-looking statements that predict or describe future events or trends. The matters described in these forward- looking statements are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond the Company's control. The Company faces many risks that could cause its actual performance to differ materially from the results predicted by its forward-looking statements, including, without limitation, the possibilities that a rise in interest rates may cause a decline in the market value of the Company's assets, a decrease in the demand for mortgage loans may have a negative effect on the Company's volume of closed loan originations, prepayment rates may change, borrowings to finance the purchase of assets may not be available on favorable terms, the Company may not be able to maintain its qualification as a REIT for federal tax purposes, the Company may experience the risks associated with investing in real estate, including changes in business conditions and the general economy, and the Company's hedging strategies may not be effective. The reports that the Company files with the Securities and Exchange Commission contain a fuller description of these and many other risks to which the Company is subject. Because of those risks, the Company's actual results, performance or achievements may differ materially from the results, performance or achievements contemplated by its forward-looking statements. The information set forth in this news release represents management's current expectations and intentions. The Company assumes no responsibility to issue updates to the forward-looking matters discussed in this news release.
NEW YORK MORTGAGE TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
For the Nine Months For the Three Months
Ended September 30, Ended September 30,
2005 2004 2005 2004
As restated
REVENUE:
Gain on sales of
mortgage loans $21,633,961 $14,933,433 $8,985,293 $4,482,262
Interest income:
Loans held for sale 10,573,325 5,777,240 4,473,157 2,633,442
Investment securities
and mortgage loans
held for investment 34,035,558 7,659,748 9,208,733 7,656,699
Loans held in the
securitization
trusts 11,875,521 -- 6,016,479 --
Brokered loan fees 7,180,484 4,398,137 2,646,683 1,437,664
Gain on sale of
securities and
related hedges 2,207,433 732,812 1,286,031 125,837
Miscellaneous income 194,683 95,597 91,043 49,620
Total revenue 87,700,965 33,596,967 32,707,419 16,385,524
EXPENSES:
Salaries, commissions
and benefits 23,874,659 11,394,409 7,302,398 4,503,571
Interest expense:
Loans held for sale/
for investment 11,194,956 2,960,294 4,807,623 1,227,997
Portfolio investments 30,089,833 4,237,195 10,749,583 4,237,195
Subordinated
debentures 1,095,300 -- 601,722 --
Brokered loan expenses 5,688,931 3,136,452 1,483,323 1,016,930
Occupancy and equipment 4,981,098 2,426,188 1,264,643 888,671
Marketing and promotion 3,900,043 1,973,922 1,310,316 677,531
Data processing and
communications 1,807,406 1,136,470 617,824 515,234
Office supplies
and expenses 1,908,839 1,017,243 651,279 370,003
Professional fees 2,812,478 1,087,735 965,945 433,981
Travel and entertainment 706,904 393,872 261,293 88,597
Depreciation and
amortization 1,068,906 308,859 301,705 102,953
Other 1,083,537 795,716 530,214 102,645
Total expenses 90,212,890 30,868,355 30,847,868 14,165,308
INCOME (LOSS) BEFORE
INCOME TAXES (2,511,925) 2,728,612 1,859,551 2,220,216
Income tax benefit 5,880,000 221,653 1,000,000 231,653
NET INCOME $3,368,075 $2,950,265 $2,859,551 $2,451,869
Basic income per share $0.19 $0.17 $0.16 $0.14
Diluted income per share $0.19 $0.17 $0.16 $0.14
Weighted average shares
outstanding-basic 17,854,850 17,797,375 17,958,175 17,797,375
Weighted average shares
outstanding-diluted 18,121,074 17,800,024 18,242,373 17,800,547
NEW YORK MORTGAGE TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2005 2004
(unaudited)
ASSETS
Cash and cash equivalents $11,302,458 $7,613,106
Restricted cash 445,635 2,341,712
Investment securities - available for sale 797,079,293 1,204,744,714
Due from loan purchasers 143,620,835 79,904,315
Escrow deposits - pending loan closings 11,932,354 16,235,638
Accounts and accrued interest receivable 16,027,466 15,554,201
Mortgage loans held for sale 116,533,155 85,384,927
Mortgage loans held in securitization trusts 589,354,405 --
Mortgage loans held for investment 140,411,907 190,153,103
Deferred tax and other assets 12,537,424 4,351,869
Derivative assets 9,298,248 3,677,572
Property and equipment, net 6,456,230 4,801,302
TOTAL ASSETS $1,854,999,410 $1,614,762,459
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES: $1,282,723,167 $1,115,809,285
Financing arrangements, portfolio investments
Financing arrangements, loans held for
sale/for investment 398,907,025 359,202,980
Due to loan purchasers 1,607,750 350,884
Accounts payable and accrued expenses 18,380,787 19,485,241
Subordinated debentures 45,000,000 --
Derivative liabilities 1,076,310 164,816
Other liabilities 250,726 267,034
Total liabilities 1,747,945,765 1,495,280,240
COMMITMENTS AND CONTINGENCIES (Note 10)
STOCKHOLDERS' EQUITY:
Common stock, $0.01 par value, 400,000,000
shares authorized 18,219,302 shares issued
and outstanding at September 30, 2005
and 18,114,445 shares issued and
17,797,375 outstanding at December 31, 2004 182,193 180,621
Additional paid-in capital 111,359,871 119,045,450
Accumulated other comprehensive (loss) income (4,488,419) 256,148
Total stockholders' equity 107,053,645 119,482,219
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $1,854,999,410 $1,614,762,459
NEW YORK MORTGAGE TRUST, INC. AND SUBSIDIARIES
SELECTED SEGMENT REPORTING
(unaudited)
For the Three Months Ended September 30, 2005
Mortgage Portfolio Mortgage Lending
Management Segment Segment Total
Total revenue $16,511,243 $16,196,176 $32,707,419
Total expense 12,714,733 17,133,135 29,847,868
Net income (loss) $3,796,510 $(936,959) $2,859,551
Total assets $1,553,311,169 $301,688,241 $1,854,999,410
Total equity $101,622,220 $5,431,425 $107,053,645
SOURCE New York Mortgage Trust, Inc.
CONTACT: Michael I. Wirth, Chief Financial Officer of New York Mortgage
Trust, +1-212-634-2342, [email protected]; or General - Joe Calabrese,
+1-212-827-3772, or Analysts - Julie Tu, +1-212-827-3776, both of Financial
Relations Board for New York Mortgage Trust/
/Web site: http://www.nymtrust.com /
(NTR)
New York Mortgage Trust Announces Share Repurchase ProgramNEW YORK, Nov. 10 /PRNewswire-FirstCall/ -- New York Mortgage Trust, Inc. (NYSE: NTR), a self-advised residential mortgage finance company organized as a real estate investment trust ("REIT"), announced today that the Board of Directors approved a share repurchase plan authorizing the Company to repurchase up to $10.0 million of the Company's outstanding common stock. The plan, funded from available capital, provides that the Company, at management's discretion, is authorized to repurchase shares of Company common stock from time to time, in the open market or through privately negotiated transactions through December 31, 2015. The plan may be temporarily or permanently suspended or discontinued at any time.
"We believe that our stock is currently undervalued and that repurchasing shares at prices that are accretive to book value, earnings or both will positively impact our overall returns in this challenging environment," commented Steven B. Schnall, the Company's Chairman, President and Co-Chief Executive Officer.
About New York Mortgage Trust
New York Mortgage Trust, Inc. (NYMT) is a real estate investment trust (REIT) focused on owning and managing a leveraged portfolio of residential mortgage securities and a mortgage origination business. The mortgage portfolio is comprised largely of prime adjustable-rate and hybrid mortgage loans and securities, much of which, over time will be originated by NYMT's wholly owned mortgage origination business, The New York Mortgage Company, LLC (NYMC), a taxable REIT subsidiary. The ability to build a portion of its loan portfolio from loans internally originated is a cornerstone of NYMT's strategy.
This news release contains forward-looking statements that predict or describe future events or trends. The matters described in these forward- looking statements are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond the Company's control. The Company faces many risks that could cause its actual performance to differ materially from the results predicted by its forward-looking statements, including, without limitation, the possibilities that a rise in interest rates may cause a decline in the market value of the Company's assets, a decrease in the demand for mortgage loans may have a negative effect on the Company's volume of closed loan originations, prepayment rates may change, borrowings to finance the purchase of assets may not be available on favorable terms, the Company may not be able to maintain its qualification as a REIT for federal tax purposes, the Company may experience the risks associated with investing in real estate, including changes in business conditions and the general economy, and the Company's hedging strategies may not be effective. The reports that the Company files with the Securities and Exchange Commission contain a fuller description of these and many other risks to which the Company is subject. Because of those risks, the Company's actual results, performance or achievements may differ materially from the results, performance or achievements contemplated by its forward-looking statements. The information set forth in this news release represents management's current expectations and intentions. The Company assumes no responsibility to issue updates to the forward-looking matters discussed in this news release.
SOURCE New York Mortgage Trust, Inc.
CONTACT: Michael I. Wirth, Chief Financial Officer of New York Mortgage Trust, Inc.,
+1-212-634-2342, [email protected];
or General: Joe Calabrese, +1-212-827-3772,
or Analysts: Julie Tu, +1-212-827-3776,
both of Financial Relations Board, for New York Mortgage Trust, Inc.
(NTR)
New York Mortgage Trust to Present at the Friedman, Billings, Ramsey 2005 Investor Conference on Wednesday, November 30, 2005NEW YORK, Nov. 22 /PRNewswire-FirstCall/ -- New York Mortgage Trust, Inc. (NYSE: NTR) announced today that Steven Schnall, Chairman, Co-Chief Executive Officer and President, is scheduled to present at the Friedman, Billings, Ramsey & Co., Inc. 2005 Investor Conference on Wednesday, November 30, 2005 at 1:15 pm ET at the Grand Hyatt New York, Park Avenue at Grand Central. The investor presentation will be webcast live and may be accessed in the Investor Relations section of the Company's website at http://www.nymtrust.com and at http://www.wsw.com/webcast/fbr13/ntr. Please allow extra time to visit the site and download the necessary software to listen to the Internet broadcast. A replay of the presentation will be archived for 30 days.
The Company's executive management team, including Steven Schnall, David Akre, Vice Chairman and Co-Chief Executive Officer, Michael Wirth, Chief Financial Officer, and Steven Mumma, Chief Operating Officer and Chief Investment Officer, will be available for one-on-one meetings with investors on November 29, 2005 and November 30, 2005.
About New York Mortgage Trust
New York Mortgage Trust, Inc. (NYMT) is a real estate investment trust (REIT) focused on owning and managing a leveraged portfolio of residential mortgage securities and a mortgage origination business. The mortgage portfolio is comprised largely of prime adjustable-rate and hybrid mortgage loans and securities, much of which, over time will be originated by NYMT's wholly owned mortgage origination business, The New York Mortgage Company, LLC (NYMC), a taxable REIT subsidiary. The ability to build a portion of its loan portfolio from loans internally originated is a cornerstone of NYMT's strategy.
This news release contains forward-looking statements that predict or describe future events or trends. The matters described in these forward- looking statements are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond the Company's control. The Company faces many risks that could cause its actual performance to differ materially from the results predicted by its forward-looking statements, including, without limitation, the possibilities that a rise in interest rates may cause a decline in the market value of the Company's assets, a decrease in the demand for mortgage loans may have a negative effect on the Company's volume of closed loan originations, prepayment rates may change, borrowings to finance the purchase of assets may not be available on favorable terms, the Company may not be able to maintain its qualification as a REIT for federal tax purposes, the Company may experience the risks associated with investing in real estate, including changes in business conditions and the general economy, and the Company's hedging strategies may not be effective. The reports that the Company files with the Securities and Exchange Commission contain a fuller description of these and many other risks to which the Company is subject. Because of those risks, the Company's actual results, performance or achievements may differ materially from the results, performance or achievements contemplated by its forward-looking statements. The information set forth in this news release represents management's current expectations and intentions. The Company assumes no responsibility to issue updates to the forward-looking matters discussed in this news release.
SOURCE New York Mortgage Trust, Inc.
CONTACT: Michael I. Wirth, Chief Financial Officer of New York Mortgage
Trust, Inc., +1-212-634-2342, [email protected]; or Joe Calabrese, General,
+1-212-827-3772, or Julie Tu, Analysts, +1-212-827-3776, both of Financial
Relations Board, for New York Mortgage Trust, Inc./
/Web site: http://www.nymtrust.com /
(NTR)