New York Mortgage Trust, Inc. (Nasdaq: NYMT) (“NYMT,” the
“Company,” “we,” “our” or “us”) today reported results for the
three months ended March 31, 2024.
Summary of First
Quarter 2024:
(dollar amounts in thousands, except per share data)
Net loss attributable to Company's common stockholders |
$ |
(68,340 |
) |
|
Net loss attributable to
Company's common stockholders per share (basic) |
$ |
(0.75 |
) |
|
Undepreciated loss (1) |
$ |
(62,014 |
) |
|
Undepreciated loss per common
share (1) |
$ |
(0.68 |
) |
|
Comprehensive loss
attributable to Company's common stockholders |
$ |
(68,336 |
) |
|
Comprehensive loss
attributable to Company's common stockholders per share
(basic) |
$ |
(0.75 |
) |
|
Yield on average interest
earning assets (1) (2) |
|
6.38 |
|
% |
Interest income |
$ |
83,892 |
|
|
Interest expense |
$ |
66,029 |
|
|
Net interest income |
$ |
17,863 |
|
|
Net interest spread (1)
(3) |
|
1.31 |
|
% |
Book value per common share at
the end of the period |
$ |
10.21 |
|
|
Adjusted book value per common share at the end of the period
(1) |
$ |
11.51 |
|
|
Economic return on book value
(4) |
|
(7.96 |
) |
% |
Economic return on adjusted
book value (5) |
|
(7.50 |
) |
% |
Dividends per common
share |
$ |
0.20 |
|
|
(1) |
Represents a non-GAAP financial measure. A reconciliation of the
Company's non-GAAP financial measures to their most directly
comparable GAAP measure is included below in "Reconciliation of
Financial Information." |
(2) |
Calculated as the quotient of our adjusted interest income and our
average interest earning assets and excludes all Consolidated SLST
assets other than those securities owned by the Company. |
(3) |
Our calculation of net interest spread may not be comparable to
similarly-titled measures of other companies who may use a
different calculation. |
(4) |
Economic return on book value is based on the periodic change in
GAAP book value per common share plus dividends declared per common
share, if any, during the period. |
(5) |
Economic return on adjusted book value is based on the periodic
change in adjusted book value per common share, a non-GAAP
financial measure, plus dividends declared per common share, if
any, during the period. |
Key
Developments:
Investing Activities
- Purchased approximately
$297.6 million of Agency RMBS with an average coupon of
5.8%.
- Purchased approximately
$305.7 million in residential loans with an average gross
coupon of 10.7%.
Financing Activities
- Completed a securitization of
business purpose loans, resulting in approximately $223.2 million
in net proceeds to us after deducting expenses associated with the
transaction. We utilized a portion of the net proceeds to repay
approximately $136.6 million on outstanding repurchase agreements
related to residential loans.
- Redeemed a residential loan
securitization with an outstanding balance of approximately $147.6
million at the time of redemption and completed a new
securitization of residential loans, resulting in approximately
$273.7 million of net proceeds to us after deducting expenses
associated with the transaction. We also utilized a portion of the
net proceeds to repay approximately $60.3 million on outstanding
repurchase agreements related to residential loans.
Management Overview
Jason Serrano, Chief Executive Officer,
commented: "The March 2024 U.S. GDP report surprised the market
with a lower-than-expected growth rate of 1.6%, signaling potential
late-stage cycle conditions in the U.S. economy. Without further
depletion of U.S. consumer savings in the first quarter, GDP could
have been 100 bps lower. We expect slow-to-moderate growth for the
rest of the year with an increasing risk of recession. In response,
we continue to take a balanced approach to opportunities by
intentionally lowering credit exposure or by avoiding identifiable
risks. We believe that fixed income investments, particularly
short-duration mortgage credit and Agency RMBS, continue to provide
compelling returns in this economic backdrop.
In the first quarter, we continued to reduce our
exposure to multi-family joint venture equity investments (“JV
Equity”), which represents less than 5% of the Company’s capital
allocation at the end of the quarter. Divestment of the JV Equity
portfolio has been a challenge in a higher rate environment
alongside unfavorable market conditions, which has negatively
impacted valuations. The impairments in the JV Equity book are the
primary driver of the -9.08% decline of Adjusted Book Value in the
first quarter. However, as our exposure to JV Equity approaches
zero and our allocations to Agency RMBS increase, we expect book
value volatility to subside. With the Company’s current liquidity,
we are excited to prudently grow the Company’s balance sheet for
income growth in the year."
Capital Allocation
The following table sets forth, by investment
category, our allocated capital at March 31, 2024 (dollar
amounts in thousands):
|
Single-Family (1) |
|
Multi-Family |
|
Corporate/Other |
|
Total |
Residential loans |
$ |
3,103,105 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
3,103,105 |
|
Consolidated SLST CDOs |
|
(582,627 |
) |
|
|
— |
|
|
|
— |
|
|
|
(582,627 |
) |
Investment securities
available for sale |
|
2,241,340 |
|
|
|
— |
|
|
|
— |
|
|
|
2,241,340 |
|
Multi-family loans |
|
— |
|
|
|
91,905 |
|
|
|
— |
|
|
|
91,905 |
|
Equity investments |
|
— |
|
|
|
102,478 |
|
|
|
35,465 |
|
|
|
137,943 |
|
Equity investments in
consolidated multi-family properties (2) |
|
— |
|
|
|
189,530 |
|
|
|
— |
|
|
|
189,530 |
|
Equity investments in disposal
group held for sale (3) |
|
— |
|
|
|
22,310 |
|
|
|
— |
|
|
|
22,310 |
|
Single-family rental
properties |
|
149,060 |
|
|
|
— |
|
|
|
— |
|
|
|
149,060 |
|
Total investment portfolio
carrying value |
|
4,910,878 |
|
|
|
406,223 |
|
|
|
35,465 |
|
|
|
5,352,566 |
|
Liabilities: |
|
|
|
|
|
|
|
Repurchase agreements |
|
(2,512,008 |
) |
|
|
— |
|
|
|
— |
|
|
|
(2,512,008 |
) |
Residential loan securitization CDOs |
|
(1,605,735 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1,605,735 |
) |
Senior unsecured notes |
|
— |
|
|
|
— |
|
|
|
(98,299 |
) |
|
|
(98,299 |
) |
Subordinated debentures |
|
— |
|
|
|
— |
|
|
|
(45,000 |
) |
|
|
(45,000 |
) |
Cash, cash equivalents and
restricted cash (4) |
|
156,560 |
|
|
|
— |
|
|
|
219,846 |
|
|
|
376,406 |
|
Cumulative adjustment of
redeemable non-controlling interest to estimated redemption
value |
|
— |
|
|
|
(36,489 |
) |
|
|
— |
|
|
|
(36,489 |
) |
Other |
|
93,454 |
|
|
|
(3,642 |
) |
|
|
(35,997 |
) |
|
|
53,815 |
|
Net Company capital
allocated |
$ |
1,043,149 |
|
|
$ |
366,092 |
|
|
$ |
76,015 |
|
|
$ |
1,485,256 |
|
|
|
|
|
|
|
|
|
Company Recourse Leverage
Ratio (5) |
|
|
|
|
|
|
1.7x |
Portfolio Recourse Leverage
Ratio (6) |
|
|
|
|
|
|
1.6x |
(1) |
The Company, through its ownership of certain securities, has
determined it is the primary beneficiary of Consolidated SLST and
has consolidated the assets and liabilities of Consolidated SLST in
the Company’s condensed consolidated financial statements.
Consolidated SLST is primarily presented on our condensed
consolidated balance sheets as residential loans, at fair
value and collateralized debt obligations, at fair value. Our
investment in Consolidated SLST as of March 31, 2024 was
limited to the RMBS comprised of first loss subordinated securities
and certain IOs issued by the securitization with an aggregate net
carrying value of $151.2 million. |
(2) |
Represents the Company's equity investments in consolidated
multi-family properties that are not in disposal group held for
sale. See "Reconciliation of Financial Information" section below
for a reconciliation of equity investments in consolidated
multi-family properties and disposal group held for sale to the
Company's condensed consolidated financial statements. |
(3) |
Represents the Company's equity investments in consolidated
multi-family properties that are held for sale in disposal group.
See "Reconciliation of Financial Information" section below for a
reconciliation of equity investments in consolidated multi-family
properties and disposal group held for sale to the Company's
condensed consolidated financial statements. |
(4) |
Excludes cash in the amount of $16.9 million held in the Company's
equity investments in consolidated multi-family properties and
equity investments in consolidated multi-family properties in
disposal group held for sale. Restricted cash of $163.8 million is
included in the Company's accompanying condensed consolidated
balance sheets in other assets. |
(5) |
Represents the Company's total outstanding recourse repurchase
agreement financing, subordinated debentures and senior unsecured
notes divided by the Company’s total stockholders’ equity. Does not
include non-recourse repurchase agreement financing amounting to
$90.7 million, Consolidated SLST CDOs amounting to $582.6 million,
residential loan securitization CDOs amounting to $1.6 billion
and mortgages payable on real estate, including mortgages payable
on real estate of disposal group held for sale, totaling
$970.4 million as they are non-recourse debt. |
(6) |
Represents the Company's outstanding recourse repurchase agreement
financing divided by the Company’s total stockholders’ equity. |
The following table sets forth certain
information about our interest earning assets by category and their
related adjusted interest income, adjusted interest expense,
adjusted net interest income, yield on average interest earning
assets, average financing cost and net interest spread for the
three months ended March 31, 2024 (dollar amounts in
thousands):
Three Months Ended March 31,
2024
|
Single-Family (8) |
|
Multi-Family |
|
Corporate/Other |
|
Total |
Adjusted Interest Income (1) (2) |
$ |
75,426 |
|
|
|
$ |
2,665 |
|
|
$ |
— |
|
|
|
$ |
78,091 |
|
|
Adjusted Interest Expense
(1) |
|
(48,762 |
) |
|
|
|
— |
|
|
|
(3,134 |
) |
|
|
|
(51,896 |
) |
|
Adjusted Net Interest Income
(Loss) (1) |
$ |
26,664 |
|
|
|
$ |
2,665 |
|
|
$ |
(3,134 |
) |
|
|
$ |
26,195 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Interest Earning
Assets (3) |
$ |
4,798,871 |
|
|
|
$ |
95,382 |
|
|
$ |
1,000 |
|
|
|
$ |
4,895,253 |
|
|
Average Interest Bearing
Liabilities (4) |
$ |
3,895,156 |
|
|
|
$ |
— |
|
|
$ |
219,298 |
|
|
|
$ |
4,114,454 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yield on Average Interest
Earning Assets (1) (5) |
|
6.29 |
|
% |
|
|
11.18 |
% |
|
|
— |
|
|
|
|
6.38 |
|
% |
Average Financing Cost (1)
(6) |
|
(5.03 |
) |
% |
|
|
— |
|
|
|
(5.75 |
) |
% |
|
|
(5.07 |
) |
% |
Net Interest Spread (1)
(7) |
|
1.26 |
|
% |
|
|
11.18 |
% |
|
|
(5.75 |
) |
% |
|
|
1.31 |
|
% |
(1) |
Represents a non-GAAP financial measure. A reconciliation of the
Company's non-GAAP financial measures to their most directly
comparable GAAP measure is included below in "Reconciliation of
Financial Information." |
(2) |
Includes interest income earned on cash accounts held by the
Company. |
(3) |
Average Interest Earning Assets for the period include residential
loans, multi-family loans and investment securities and exclude all
Consolidated SLST assets other than those securities owned by the
Company. Average Interest Earning Assets is calculated based on the
daily average amortized cost for the period. |
(4) |
Average Interest Bearing Liabilities for the period include
repurchase agreements, residential loan securitization CDOs, senior
unsecured notes and subordinated debentures and exclude
Consolidated SLST CDOs and mortgages payable on real estate as the
Company does not directly incur interest expense on these
liabilities that are consolidated for GAAP purposes. Average
Interest Bearing Liabilities is calculated based on the daily
average outstanding balance for the period. |
(5) |
Yield on Average Interest Earning Assets is calculated by dividing
our annualized adjusted interest income relating to our portfolio
of interest earning assets by our Average Interest Earning Assets
for the respective periods. |
(6) |
Average Financing Cost is calculated by dividing our annualized
adjusted interest expense by our Average Interest Bearing
Liabilities. |
(7) |
Net Interest Spread is the difference between our Yield on Average
Interest Earning Assets and our Average Financing Cost. |
(8) |
The Company has determined it is the primary beneficiary of
Consolidated SLST and has consolidated Consolidated SLST into the
Company's condensed consolidated financial statements. Our GAAP
interest income includes interest income recognized on the
underlying seasoned re-performing and non-performing residential
loans held in Consolidated SLST. Our GAAP interest expense includes
interest expense recognized on the Consolidated SLST CDOs that
permanently finance the residential loans in Consolidated SLST and
are not owned by the Company. We calculate adjusted interest income
by reducing our GAAP interest income by the interest expense
recognized on the Consolidated SLST CDOs and adjusted interest
expense by excluding, among other things, the interest expense
recognized on the Consolidated SLST CDOs, thus only including the
interest income earned by the SLST securities that are actually
owned by the Company in adjusted net interest income. |
Conference Call
On Thursday, May 2, 2024 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 months ended
March 31, 2024. To access the conference call, please
pre-register using this link. Registrants will receive confirmation
with dial-in details. A live audio webcast of the conference call
can be accessed via the Internet, on a listen-only basis, at the
Investor Relations section of the Company's website at
http://www.nymtrust.com or using this link. Please allow extra
time, prior to the call, to visit the site and download the
necessary software to listen to the Internet broadcast. A webcast
replay link of the conference call will be available on the
Investor Relations section of the Company’s website approximately
two hours after the call and will be available for 12 months.
In connection with the release of these
financial results, the Company will also post a supplemental
financial presentation that will accompany the conference call on
its website at http://www.nymtrust.com under the "Investors —
Events and Presentations" section. First quarter 2024 financial and
operating data can be viewed in the Company’s Quarterly Report on
Form 10-Q for the quarter ended March 31, 2024, which is
expected to be filed with the Securities and Exchange Commission on
or about May 3, 2024. 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 (“REIT”) for federal income tax purposes. NYMT is
an internally-managed REIT in the business of acquiring, investing
in, financing and managing primarily mortgage-related single-family
and multi-family residential assets. 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 that may appear in this press release: “RMBS” refers to
residential mortgage-backed securities backed by adjustable-rate,
hybrid adjustable-rate, or fixed-rate residential loans; “Agency
RMBS” refers to RMBS representing interests in or obligations
backed by pools of residential loans guaranteed by a government
sponsored enterprise (“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”); “ABS” refers to debt and/or equity tranches of
securitizations backed by various asset classes including, but not
limited to, automobiles, aircraft, credit cards, equipment,
franchises, recreational vehicles and student loans; “non-Agency
RMBS” refers to RMBS that are not guaranteed by any agency of the
U.S. Government or any GSE; “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; “POs” refers to mortgage-backed
securities that represent the right to the principal component of
the cash flow from a pool of mortgage loans; “CMBS” refers to
commercial mortgage-backed securities comprised of commercial
mortgage pass-through securities issued by a GSE, as well as PO, IO
or mezzanine 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; “CDO” refers to
collateralized debt obligation and includes debt that permanently
finances the residential loans held in Consolidated SLST and the
Company's residential loans held in securitization trusts that we
consolidate or consolidated in our financial statements in
accordance with GAAP; “Consolidated SLST” refers to a Freddie
Mac-sponsored residential loan securitization, comprised of
seasoned re-performing and non-performing residential loans, of
which we own the first loss subordinated securities and certain
IOs, that we consolidate in our financial statements in accordance
with GAAP; “Consolidated VIEs” refers to variable interest entities
("VIE") where the Company is the primary beneficiary, as it has
both the power to direct the activities that most significantly
impact the economic performance of the VIE and a right to receive
benefits or absorb losses of the entity that could be potentially
significant to the VIE and that we consolidate in our financial
statements in accordance with GAAP; “Consolidated Real Estate VIEs”
refers to Consolidated VIEs that own multi-family properties;
“business purpose loans” refers to (i) short-term loans that are
collateralized by residential properties and are made to investors
who intend to rehabilitate and sell the residential property for a
profit or (ii) loans that finance (or refinance) non-owner occupied
residential properties that are rented to one or more tenants;
“Mezzanine Lending” refers, collectively, to preferred equity and
mezzanine loan investments; “Multi-Family” portfolio includes
multi-family CMBS, Mezzanine Lending and certain equity investments
in multi-family assets, including joint venture equity investments;
“Single-Family” portfolio includes residential loans, Agency RMBS,
non-Agency RMBS and single-family rental properties; and “Other”
portfolio includes ABS and an equity investment in an entity that
originates residential loans.
Cautionary Statement Regarding Forward-Looking
Statements
When used in this press release, in future
filings with the Securities and Exchange Commission (the “SEC”) or
in other written or oral communications, statements which are not
historical in nature, including those containing words such as
“will,” “believe,” “expect,” “anticipate,” “estimate,” “plan,”
“continue,” “intend,” “could,” “would,” “should,” “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 (the “Exchange Act”), and, as such, may involve known and
unknown risks, uncertainties and assumptions.
Forward-looking statements are based on
estimates, projections, beliefs and assumptions of management of
the Company at the time of such statements and are not guarantees
of future performance. Forward-looking statements involve
risks and uncertainties in predicting future results and
conditions. Actual results and outcomes could differ materially
from those projected in these forward-looking statements due
to a variety of factors, including, without limitation: changes in
the Company’s business and investment strategy; inflation and
changes in interest rates and the fair market value of the
Company’s assets, including negative changes resulting in margin
calls relating to the financing of the Company’s assets; changes in
credit spreads; changes in the long-term credit ratings of the
U.S., Fannie Mae, Freddie Mac, and Ginnie Mae; general volatility
of the markets in which the Company invests; changes in prepayment
rates on the loans the Company owns or that underlie the Company’s
investment securities; increased rates of default, delinquency or
vacancy and/or decreased recovery rates on or at the Company’s
assets; the Company’s ability to identify and acquire targeted
assets, including assets in its investment pipeline; the Company's
ability to dispose of assets from time to time on terms favorable
to it, including the disposition over time of its joint venture
equity investments; changes in relationships with the Company’s
financing counterparties and the Company’s ability to borrow to
finance its assets and the terms thereof; changes in the Company's
relationships with and/or the performance of its operating
partners; the Company’s ability to predict and control costs;
changes in laws, regulations or policies affecting the Company’s
business; the Company’s ability to make distributions to its
stockholders in the future; 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; impairments in the
value of the collateral underlying the Company's investments; the
Company's ability to manage or hedge credit risk, interest rate
risk, and other financial and operational risks; the Company's
exposure to liquidity risk, risks associated with the use of
leverage, and market risks; and risks associated with investing in
real estate assets, including changes in business conditions and
the general economy, the availability of investment opportunities
and the conditions in the market for Agency RMBS, non-Agency RMBS,
ABS and CMBS securities, residential loans, structured multi-family
investments and other mortgage-, residential housing- and
credit-related assets.
These and other risks, uncertainties and
factors, including the risk factors and other information 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
the Company 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.
For Further Information
CONTACT: AT THE COMPANYPhone: 212-792-0107Email:
InvestorRelations@nymtrust.com
FINANCIAL TABLES FOLLOW
NEW YORK MORTGAGE TRUST, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(Dollar amounts in thousands, except share
data) |
|
March 31, 2024 |
|
December 31, 2023 |
|
(unaudited) |
|
|
ASSETS |
|
|
|
Residential loans, at fair value |
$ |
3,103,105 |
|
|
$ |
3,084,303 |
|
Investment securities
available for sale, at fair value |
|
2,241,340 |
|
|
|
2,013,817 |
|
Multi-family loans, at fair
value |
|
91,905 |
|
|
|
95,792 |
|
Equity investments, at fair
value |
|
137,943 |
|
|
|
147,116 |
|
Cash and cash equivalents |
|
226,939 |
|
|
|
187,107 |
|
Real estate, net |
|
1,154,221 |
|
|
|
1,131,819 |
|
Assets of disposal group held
for sale |
|
146,363 |
|
|
|
426,017 |
|
Other assets |
|
344,999 |
|
|
|
315,357 |
|
Total Assets
(1) |
$ |
7,446,815 |
|
|
$ |
7,401,328 |
|
LIABILITIES AND EQUITY |
|
|
|
Liabilities: |
|
|
|
Repurchase agreements |
$ |
2,512,008 |
|
|
$ |
2,471,113 |
|
Collateralized debt
obligations ($1,079,768 at fair value and $1,108,594 at amortized
cost, net as of March 31, 2024 and $593,737 at fair value and
$1,276,780 at amortized cost, net as of December 31,
2023) |
|
2,188,362 |
|
|
|
1,870,517 |
|
Senior unsecured notes |
|
98,299 |
|
|
|
98,111 |
|
Subordinated debentures |
|
45,000 |
|
|
|
45,000 |
|
Mortgages payable on real
estate, net |
|
850,743 |
|
|
|
784,421 |
|
Liabilities of disposal group
held for sale |
|
122,318 |
|
|
|
386,024 |
|
Other liabilities |
|
110,751 |
|
|
|
118,016 |
|
Total
liabilities (1) |
|
5,927,481 |
|
|
|
5,773,202 |
|
|
|
|
|
Commitments and
Contingencies |
|
|
|
|
|
|
|
Redeemable
Non-Controlling Interest in Consolidated Variable Interest
Entities |
|
20,128 |
|
|
|
28,061 |
|
|
|
|
|
Stockholders'
Equity: |
|
|
|
Preferred stock, par value
$0.01 per share, 31,500,000 shares authorized, 22,164,414 shares
issued and outstanding ($554,110 aggregate liquidation
preference) |
|
535,445 |
|
|
|
535,445 |
|
Common stock, par value $0.01
per share, 200,000,000 shares authorized, 91,231,039 and 90,675,403
shares issued and outstanding as of March 31, 2024 and
December 31, 2023, respectively |
|
912 |
|
|
|
907 |
|
Additional paid-in
capital |
|
2,289,452 |
|
|
|
2,297,081 |
|
Accumulated other
comprehensive loss |
|
— |
|
|
|
(4 |
) |
Accumulated deficit |
|
(1,340,553 |
) |
|
|
(1,253,817 |
) |
Company's
stockholders' equity |
|
1,485,256 |
|
|
|
1,579,612 |
|
Non-controlling interests |
|
13,950 |
|
|
|
20,453 |
|
Total
equity |
|
1,499,206 |
|
|
|
1,600,065 |
|
Total Liabilities and
Equity |
$ |
7,446,815 |
|
|
$ |
7,401,328 |
|
(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
March 31, 2024 and December 31, 2023, assets of
consolidated VIEs totaled $3,829,183 and $3,816,777, respectively,
and the liabilities of consolidated VIEs totaled $3,192,392 and
$3,076,818, respectively. |
NEW YORK MORTGAGE TRUST, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(Amounts in thousands, except per share
data)(unaudited) |
|
For the Three Months EndedMarch
31, |
|
|
2024 |
|
|
|
2023 |
|
NET INTEREST INCOME: |
|
|
|
Interest income |
$ |
83,892 |
|
|
$ |
57,136 |
|
Interest expense |
|
66,029 |
|
|
|
39,335 |
|
Total net interest income |
|
17,863 |
|
|
|
17,801 |
|
|
|
|
|
NET LOSS FROM REAL
ESTATE: |
|
|
|
Rental income |
|
33,153 |
|
|
|
36,281 |
|
Other real estate income |
|
4,923 |
|
|
|
5,465 |
|
Total income from real estate |
|
38,076 |
|
|
|
41,746 |
|
Interest expense, mortgages payable on real estate |
|
20,769 |
|
|
|
22,478 |
|
Depreciation and amortization |
|
12,576 |
|
|
|
6,039 |
|
Other real estate expenses |
|
21,100 |
|
|
|
22,180 |
|
Total expenses related to real estate |
|
54,445 |
|
|
|
50,697 |
|
Total net loss from real estate |
|
(16,369 |
) |
|
|
(8,951 |
) |
|
|
|
|
OTHER (LOSS) INCOME: |
|
|
|
Realized (losses) gains, net |
|
(10,533 |
) |
|
|
1,081 |
|
Unrealized (losses) gains, net |
|
(39,390 |
) |
|
|
32,851 |
|
Gains (losses) on derivative instruments, net |
|
49,211 |
|
|
|
(4,362 |
) |
(Loss) income from equity investments |
|
(2,136 |
) |
|
|
4,511 |
|
Impairment of real estate |
|
(36,247 |
) |
|
|
(10,275 |
) |
Loss on reclassification of disposal group |
|
(14,636 |
) |
|
|
— |
|
Other (loss) income |
|
(3,592 |
) |
|
|
1,275 |
|
Total other (loss) income |
|
(57,323 |
) |
|
|
25,081 |
|
|
|
|
|
GENERAL, ADMINISTRATIVE AND
OPERATING EXPENSES: |
|
|
|
General and administrative expenses |
|
13,054 |
|
|
|
12,683 |
|
Portfolio operating expenses |
|
11,287 |
|
|
|
7,070 |
|
Total general, administrative and operating expenses |
|
24,341 |
|
|
|
19,753 |
|
|
|
|
|
(LOSS) INCOME FROM OPERATIONS
BEFORE INCOME TAXES |
|
(80,170 |
) |
|
|
14,178 |
|
Income tax (benefit)
expense |
|
(111 |
) |
|
|
16 |
|
|
|
|
|
NET (LOSS) INCOME |
|
(80,059 |
) |
|
|
14,162 |
|
Net loss attributable to
non-controlling interests |
|
22,158 |
|
|
|
6,701 |
|
NET (LOSS) INCOME ATTRIBUTABLE
TO COMPANY |
|
(57,901 |
) |
|
|
20,863 |
|
Preferred stock dividends |
|
(10,439 |
) |
|
|
(10,484 |
) |
Gain on repurchase of
preferred stock |
|
— |
|
|
|
142 |
|
NET (LOSS) INCOME ATTRIBUTABLE
TO COMPANY'S COMMON STOCKHOLDERS |
$ |
(68,340 |
) |
|
$ |
10,521 |
|
|
|
|
|
Basic (loss) earnings per
common share |
$ |
(0.75 |
) |
|
$ |
0.12 |
|
Diluted (loss) earnings per
common share |
$ |
(0.75 |
) |
|
$ |
0.11 |
|
Weighted average shares
outstanding-basic |
|
91,117 |
|
|
|
91,314 |
|
Weighted average shares
outstanding-diluted |
|
91,117 |
|
|
|
91,672 |
|
NEW YORK MORTGAGE TRUST, INC. AND
SUBSIDIARIESSUMMARY OF QUARTERLY (LOSS)
EARNINGS(Dollar amounts in thousands, except per
share data)(unaudited) |
|
For the Three Months Ended |
|
March 31, 2024 |
|
December 31, 2023 |
|
September 30, 2023 |
|
June 30, 2023 |
|
March 31, 2023 |
Interest income |
$ |
83,892 |
|
|
$ |
78,789 |
|
|
$ |
65,195 |
|
|
$ |
57,540 |
|
|
$ |
57,136 |
|
Interest expense |
|
66,029 |
|
|
|
61,989 |
|
|
|
48,406 |
|
|
|
42,404 |
|
|
|
39,335 |
|
Total net interest income |
|
17,863 |
|
|
|
16,800 |
|
|
|
16,789 |
|
|
|
15,136 |
|
|
|
17,801 |
|
Total net loss from real
estate |
|
(16,369 |
) |
|
|
(6,807 |
) |
|
|
(7,788 |
) |
|
|
(7,755 |
) |
|
|
(8,951 |
) |
Total other (loss) income |
|
(57,323 |
) |
|
|
40,685 |
|
|
|
(85,943 |
) |
|
|
(19,254 |
) |
|
|
25,081 |
|
Total general, administrative
and operating expenses |
|
24,341 |
|
|
|
17,813 |
|
|
|
16,987 |
|
|
|
18,965 |
|
|
|
19,753 |
|
(Loss) income from operations
before income taxes |
|
(80,170 |
) |
|
|
32,865 |
|
|
|
(93,929 |
) |
|
|
(30,838 |
) |
|
|
14,178 |
|
Income tax (benefit)
expense |
|
(111 |
) |
|
|
134 |
|
|
|
(56 |
) |
|
|
(18 |
) |
|
|
16 |
|
Net (loss) income |
|
(80,059 |
) |
|
|
32,731 |
|
|
|
(93,873 |
) |
|
|
(30,820 |
) |
|
|
14,162 |
|
Net loss attributable to
non-controlling interests |
|
22,158 |
|
|
|
9,177 |
|
|
|
9,364 |
|
|
|
3,892 |
|
|
|
6,701 |
|
Net (loss) income attributable
to Company |
|
(57,901 |
) |
|
|
41,908 |
|
|
|
(84,509 |
) |
|
|
(26,928 |
) |
|
|
20,863 |
|
Preferred stock dividends |
|
(10,439 |
) |
|
|
(10,443 |
) |
|
|
(10,435 |
) |
|
|
(10,474 |
) |
|
|
(10,484 |
) |
Gain on repurchase of
preferred stock |
|
— |
|
|
|
— |
|
|
|
125 |
|
|
|
200 |
|
|
|
142 |
|
Net (loss) income attributable
to Company's common stockholders |
|
(68,340 |
) |
|
|
31,465 |
|
|
|
(94,819 |
) |
|
|
(37,202 |
) |
|
|
10,521 |
|
Basic (loss) earnings per
common share |
$ |
(0.75 |
) |
|
$ |
0.35 |
|
|
$ |
(1.04 |
) |
|
$ |
(0.41 |
) |
|
$ |
0.12 |
|
Diluted (loss) earnings per
common share |
$ |
(0.75 |
) |
|
$ |
0.35 |
|
|
$ |
(1.04 |
) |
|
$ |
(0.41 |
) |
|
$ |
0.11 |
|
Weighted average shares
outstanding - basic |
|
91,117 |
|
|
|
90,683 |
|
|
|
90,984 |
|
|
|
91,193 |
|
|
|
91,314 |
|
Weighted average shares
outstanding - diluted |
|
91,117 |
|
|
|
91,189 |
|
|
|
90,984 |
|
|
|
91,193 |
|
|
|
91,672 |
|
|
|
|
|
|
|
|
|
|
|
Yield on average interest
earning assets (1) |
|
6.38 |
% |
|
|
6.21 |
% |
|
|
6.03 |
% |
|
|
6.07 |
% |
|
|
6.24 |
% |
Net interest spread (1) |
|
1.31 |
% |
|
|
1.02 |
% |
|
|
0.90 |
% |
|
|
0.48 |
% |
|
|
0.41 |
% |
Undepreciated (loss) earnings
(1) |
$ |
(62,014 |
) |
|
$ |
33,697 |
|
|
$ |
(92,637 |
) |
|
$ |
(35,022 |
) |
|
$ |
12,641 |
|
Undepreciated (loss) earnings
per common share (1) |
$ |
(0.68 |
) |
|
$ |
0.37 |
|
|
$ |
(1.02 |
) |
|
$ |
(0.38 |
) |
|
$ |
0.14 |
|
Book value per common
share |
$ |
10.21 |
|
|
$ |
11.31 |
|
|
$ |
11.26 |
|
|
$ |
12.44 |
|
|
$ |
12.95 |
|
Adjusted book value per common
share (1) |
$ |
11.51 |
|
|
$ |
12.66 |
|
|
$ |
12.93 |
|
|
$ |
14.32 |
|
|
$ |
15.41 |
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common
share |
$ |
0.20 |
|
|
$ |
0.20 |
|
|
$ |
0.30 |
|
|
$ |
0.30 |
|
|
$ |
0.40 |
|
Dividends declared per
preferred share on Series D Preferred Stock |
$ |
0.50 |
|
|
$ |
0.50 |
|
|
$ |
0.50 |
|
|
$ |
0.50 |
|
|
$ |
0.50 |
|
Dividends declared per
preferred share on Series E Preferred Stock |
$ |
0.49 |
|
|
$ |
0.49 |
|
|
$ |
0.49 |
|
|
$ |
0.49 |
|
|
$ |
0.49 |
|
Dividends declared per
preferred share on Series F Preferred Stock |
$ |
0.43 |
|
|
$ |
0.43 |
|
|
$ |
0.43 |
|
|
$ |
0.43 |
|
|
$ |
0.43 |
|
Dividends declared per
preferred share on Series G Preferred Stock |
$ |
0.44 |
|
|
$ |
0.44 |
|
|
$ |
0.44 |
|
|
$ |
0.44 |
|
|
$ |
0.44 |
|
(1) |
Represents a non-GAAP financial measure. A reconciliation of the
Company's non-GAAP financial measures to their most directly
comparable GAAP measure is included below in "Reconciliation of
Financial Information." |
Reconciliation of Financial Information
Non-GAAP Financial Measures
In addition to the results presented in
accordance with GAAP, this press release includes certain non-GAAP
financial measures, including adjusted interest income, adjusted
interest expense, adjusted net interest income, yield on average
interest earning assets, average financing cost, net interest
spread, undepreciated (loss) earnings and adjusted book value per
common share. Our management team believes that these non-GAAP
financial measures, when considered with our GAAP financial
statements, provide supplemental information useful for investors
as it enables them to evaluate our current performance and trends
using the metrics that management uses to operate our business. Our
presentation of non-GAAP financial measures may not be comparable
to similarly-titled measures of other companies, who may use
different calculations. Because these measures are not calculated
in accordance with GAAP, they should not be considered a substitute
for, or superior to, the financial measures calculated in
accordance with GAAP. Our GAAP financial results and the
reconciliations of the non-GAAP financial measures included in this
press release to the most directly comparable financial measures
prepared in accordance with GAAP should be carefully evaluated.
Adjusted Net Interest Income and Net Interest
Spread
Financial results for the Company during a given
period include the net interest income earned on our investment
portfolio of residential loans, RMBS, CMBS, ABS and preferred
equity investments and mezzanine loans, where the risks and payment
characteristics are equivalent to and accounted for as loans
(collectively, our “interest earning assets”). Adjusted net
interest income and net interest spread (both supplemental non-GAAP
financial measures) are impacted by factors such as our cost of
financing, including our hedging costs, and the interest rate that
our investments bear. Furthermore, the amount of premium or
discount paid on purchased investments and the prepayment rates on
investments will impact adjusted net interest income as such
factors will be amortized over the expected term of such
investments.
We provide the following non-GAAP financial
measures, in total and by investment category, for the respective
periods:
- adjusted interest income –
calculated as our GAAP interest income reduced by the interest
expense recognized on Consolidated SLST CDOs,
- adjusted interest expense –
calculated as our GAAP interest expense reduced by the interest
expense recognized on Consolidated SLST CDOs and adjusted to
include the net interest component of interest rate swaps,
- adjusted net interest income –
calculated by subtracting adjusted interest expense from adjusted
interest income,
- yield on average interest earning
assets – calculated as the quotient of our adjusted interest income
and our average interest earning assets and excludes all
Consolidated SLST assets other than those securities owned by the
Company,
- average financing cost – calculated
as the quotient of our adjusted interest expense and the average
outstanding balance of our interest bearing liabilities, excluding
Consolidated SLST CDOs and mortgages payable on real estate,
and
- net interest spread – calculated as
the difference between our yield on average interest earning assets
and our average financing cost.
These measures remove the impact of Consolidated
SLST that we consolidate in accordance with GAAP and include the
net interest component of interest rate swaps utilized to hedge the
variable cash flows associated with our variable-rate borrowings,
which is included in gains (losses) on derivative instruments, net
in the Company's condensed consolidated statements of operations.
With respect to Consolidated SLST, we only include the interest
income earned by the Consolidated SLST securities that are actually
owned by the Company as the Company only receives income or absorbs
losses related to the Consolidated SLST securities actually owned
by the Company. We include the net interest component of interest
rate swaps in these measures to more fully represent the cost of
our financing strategy.
We provide the non-GAAP financial measures
listed above because we believe these non-GAAP financial measures
provide investors and management with additional detail and enhance
their understanding of our interest earning asset yields, in total
and by investment category, relative to the cost of our financing
and the underlying trends within our portfolio of interest earning
assets. In addition to the foregoing, our management team uses
these measures to assess, among other things, the performance of
our interest earning assets in total and by asset, possible cash
flows from our interest earning assets in total and by asset, our
ability to finance or borrow against the asset and the terms of
such financing and the composition of our portfolio of interest
earning assets, including acquisition and disposition
determinations.
A reconciliation of GAAP interest income to
adjusted interest income, GAAP interest expense to adjusted
interest expense and GAAP total net interest income to adjusted net
interest income for the three months ended as of the dates
indicated is presented below (dollar amounts in thousands):
|
March 31, 2024 |
|
Single-Family |
|
Multi-Family |
|
Corporate/Other |
|
Total |
GAAP interest income |
$ |
81,227 |
|
|
$ |
2,665 |
|
$ |
— |
|
|
$ |
83,892 |
|
GAAP interest expense |
|
(61,740 |
) |
|
|
— |
|
|
(4,289 |
) |
|
|
(66,029 |
) |
GAAP total net interest income
(loss) |
$ |
19,487 |
|
|
$ |
2,665 |
|
$ |
(4,289 |
) |
|
$ |
17,863 |
|
|
|
|
|
|
|
|
|
GAAP interest income |
$ |
81,227 |
|
|
$ |
2,665 |
|
$ |
— |
|
|
$ |
83,892 |
|
Adjusted for: |
|
|
|
|
|
|
|
Consolidated SLST CDO interest expense |
|
(5,801 |
) |
|
|
— |
|
|
— |
|
|
|
(5,801 |
) |
Adjusted interest income |
$ |
75,426 |
|
|
$ |
2,665 |
|
$ |
— |
|
|
$ |
78,091 |
|
|
|
|
|
|
|
|
|
GAAP interest expense |
$ |
(61,740 |
) |
|
$ |
— |
|
$ |
(4,289 |
) |
|
$ |
(66,029 |
) |
Adjusted for: |
|
|
|
|
|
|
|
Consolidated SLST CDO interest expense |
|
5,801 |
|
|
|
— |
|
|
— |
|
|
|
5,801 |
|
Net interest benefit of interest rate swaps |
|
7,177 |
|
|
|
— |
|
|
1,155 |
|
|
|
8,332 |
|
Adjusted interest expense |
$ |
(48,762 |
) |
|
$ |
— |
|
$ |
(3,134 |
) |
|
$ |
(51,896 |
) |
|
|
|
|
|
|
|
|
Adjusted net interest income
(loss) (1) |
$ |
26,664 |
|
|
$ |
2,665 |
|
$ |
(3,134 |
) |
|
$ |
26,195 |
|
|
December 31, 2023 |
|
Single-Family |
|
Multi-Family |
|
Corporate/Other |
|
Total |
GAAP interest income |
$ |
76,119 |
|
|
$ |
2,670 |
|
$ |
— |
|
|
$ |
78,789 |
|
GAAP interest expense |
|
(57,489 |
) |
|
|
— |
|
|
(4,500 |
) |
|
|
(61,989 |
) |
GAAP total net interest income
(loss) |
$ |
18,630 |
|
|
$ |
2,670 |
|
$ |
(4,500 |
) |
|
$ |
16,800 |
|
|
|
|
|
|
|
|
|
GAAP interest income |
$ |
76,119 |
|
|
$ |
2,670 |
|
$ |
— |
|
|
$ |
78,789 |
|
Adjusted for: |
|
|
|
|
|
|
|
Consolidated SLST CDO interest expense |
|
(6,268 |
) |
|
|
— |
|
|
— |
|
|
|
(6,268 |
) |
Adjusted interest income |
$ |
69,851 |
|
|
$ |
2,670 |
|
$ |
— |
|
|
$ |
72,521 |
|
|
|
|
|
|
|
|
|
GAAP interest expense |
$ |
(57,489 |
) |
|
$ |
— |
|
$ |
(4,500 |
) |
|
$ |
(61,989 |
) |
Adjusted for: |
|
|
|
|
|
|
|
Consolidated SLST CDO interest expense |
|
6,268 |
|
|
|
— |
|
|
— |
|
|
|
6,268 |
|
Net interest benefit of interest rate swaps |
|
5,703 |
|
|
|
— |
|
|
988 |
|
|
|
6,691 |
|
Adjusted interest expense |
$ |
(45,518 |
) |
|
$ |
— |
|
$ |
(3,512 |
) |
|
$ |
(49,030 |
) |
|
|
|
|
|
|
|
|
Adjusted net interest income
(loss) (1) |
$ |
24,333 |
|
|
$ |
2,670 |
|
$ |
(3,512 |
) |
|
$ |
23,491 |
|
|
September 30, 2023 |
|
Single-Family |
|
Multi-Family |
|
Corporate/Other |
|
Total |
GAAP interest income |
$ |
61,346 |
|
|
$ |
3,849 |
|
$ |
— |
|
|
$ |
65,195 |
|
GAAP interest expense |
|
(44,101 |
) |
|
|
— |
|
|
(4,305 |
) |
|
|
(48,406 |
) |
GAAP total net interest income
(loss) |
$ |
17,245 |
|
|
$ |
3,849 |
|
$ |
(4,305 |
) |
|
$ |
16,789 |
|
|
|
|
|
|
|
|
|
GAAP interest income |
$ |
61,346 |
|
|
$ |
3,849 |
|
$ |
— |
|
|
$ |
65,195 |
|
Adjusted for: |
|
|
|
|
|
|
|
Consolidated SLST CDO interest expense |
|
(5,957 |
) |
|
|
— |
|
|
— |
|
|
|
(5,957 |
) |
Adjusted interest income |
$ |
55,389 |
|
|
$ |
3,849 |
|
$ |
— |
|
|
$ |
59,238 |
|
|
|
|
|
|
|
|
|
GAAP interest expense |
$ |
(44,101 |
) |
|
$ |
— |
|
$ |
(4,305 |
) |
|
$ |
(48,406 |
) |
Adjusted for: |
|
|
|
|
|
|
|
Consolidated SLST CDO interest expense |
|
5,957 |
|
|
|
— |
|
|
— |
|
|
|
5,957 |
|
Net interest benefit of interest rate swaps |
|
2,994 |
|
|
|
— |
|
|
872 |
|
|
|
3,866 |
|
Adjusted interest expense |
$ |
(35,150 |
) |
|
$ |
— |
|
$ |
(3,433 |
) |
|
$ |
(38,583 |
) |
|
|
|
|
|
|
|
|
Adjusted net interest income
(loss) (1) |
$ |
20,239 |
|
|
$ |
3,849 |
|
$ |
(3,433 |
) |
|
$ |
20,655 |
|
|
June 30, 2023 |
|
Single-Family |
|
Multi-Family |
|
Corporate/Other |
|
Total |
GAAP interest income |
$ |
53,907 |
|
|
$ |
3,618 |
|
$ |
15 |
|
|
$ |
57,540 |
|
GAAP interest expense |
|
(38,542 |
) |
|
|
— |
|
|
(3,862 |
) |
|
|
(42,404 |
) |
GAAP total net interest income
(loss) |
$ |
15,365 |
|
|
$ |
3,618 |
|
$ |
(3,847 |
) |
|
$ |
15,136 |
|
|
|
|
|
|
|
|
|
GAAP interest income |
$ |
53,907 |
|
|
$ |
3,618 |
|
$ |
15 |
|
|
$ |
57,540 |
|
Adjusted for: |
|
|
|
|
|
|
|
Consolidated SLST CDO interest expense |
|
(5,966 |
) |
|
|
— |
|
|
— |
|
|
|
(5,966 |
) |
Adjusted interest income |
$ |
47,941 |
|
|
$ |
3,618 |
|
$ |
15 |
|
|
$ |
51,574 |
|
|
|
|
|
|
|
|
|
GAAP interest expense |
$ |
(38,542 |
) |
|
$ |
— |
|
$ |
(3,862 |
) |
|
$ |
(42,404 |
) |
Adjusted for: |
|
|
|
|
|
|
|
Consolidated SLST CDO interest expense |
|
5,966 |
|
|
|
— |
|
|
— |
|
|
|
5,966 |
|
Net interest benefit of interest rate swaps |
|
909 |
|
|
|
— |
|
|
555 |
|
|
|
1,464 |
|
Adjusted interest expense |
$ |
(31,667 |
) |
|
$ |
— |
|
$ |
(3,307 |
) |
|
$ |
(34,974 |
) |
|
|
|
|
|
|
|
|
Adjusted net interest income
(loss) (1) |
$ |
16,274 |
|
|
$ |
3,618 |
|
$ |
(3,292 |
) |
|
$ |
16,600 |
|
|
March 31, 2023 |
|
Single-Family |
|
Multi-Family |
|
Corporate/Other |
|
Total |
GAAP interest income |
$ |
53,519 |
|
|
$ |
3,569 |
|
$ |
48 |
|
|
$ |
57,136 |
|
GAAP interest expense |
|
(36,759 |
) |
|
|
— |
|
|
(2,576 |
) |
|
|
(39,335 |
) |
GAAP total net interest income
(loss) |
$ |
16,760 |
|
|
$ |
3,569 |
|
$ |
(2,528 |
) |
|
$ |
17,801 |
|
|
|
|
|
|
|
|
|
GAAP interest income |
$ |
53,519 |
|
|
$ |
3,569 |
|
$ |
48 |
|
|
$ |
57,136 |
|
Adjusted for: |
|
|
|
|
|
|
|
Consolidated SLST CDO interest expense |
|
(6,315 |
) |
|
|
— |
|
|
— |
|
|
|
(6,315 |
) |
Adjusted interest income |
$ |
47,204 |
|
|
$ |
3,569 |
|
$ |
48 |
|
|
$ |
50,821 |
|
|
|
|
|
|
|
|
|
GAAP interest expense |
$ |
(36,759 |
) |
|
$ |
— |
|
$ |
(2,576 |
) |
|
$ |
(39,335 |
) |
Adjusted for: |
|
|
|
|
|
|
|
Consolidated SLST CDO interest expense |
|
6,315 |
|
|
|
— |
|
|
— |
|
|
|
6,315 |
|
Net interest benefit of interest rate swaps |
|
37 |
|
|
|
— |
|
|
29 |
|
|
|
66 |
|
Adjusted interest expense |
$ |
(30,407 |
) |
|
$ |
— |
|
$ |
(2,547 |
) |
|
$ |
(32,954 |
) |
|
|
|
|
|
|
|
|
Adjusted net interest income
(loss) (1) |
$ |
16,797 |
|
|
$ |
3,569 |
|
$ |
(2,499 |
) |
|
$ |
17,867 |
|
(1) |
Adjusted net interest income is calculated by subtracting adjusted
interest expense from adjusted interest income. |
Undepreciated (Loss) Earnings
Undepreciated (loss) earnings is a supplemental
non-GAAP financial measure defined as GAAP net (loss) income
attributable to Company's common stockholders excluding the
Company's share in depreciation expense and lease intangible
amortization expense, if any, related to operating real estate, net
for which an impairment has not been recognized. By excluding these
non-cash adjustments from our operating results, we believe that
the presentation of undepreciated (loss) earnings provides a
consistent measure of our operating performance and useful
information to investors to evaluate the effective net return on
our portfolio. In addition, we believe that presenting
undepreciated (loss) earnings enables our investors to measure,
evaluate, and compare our operating performance to that of our
peers.
A reconciliation of net (loss) income
attributable to Company's common stockholders to undepreciated
(loss) earnings for the respective periods ended is presented below
(amounts in thousands, except per share data):
|
For the Three Months Ended |
|
March 31, 2024 |
|
December 31, 2023 |
|
September 30, 2023 |
|
June 30, 2023 |
|
March 31, 2023 |
Net (loss) income attributable to Company's common
stockholders |
$ |
(68,340 |
) |
|
$ |
31,465 |
|
$ |
(94,819 |
) |
|
$ |
(37,202 |
) |
|
$ |
10,521 |
Add: |
|
|
|
|
|
|
|
|
|
Depreciation expense on operating real estate |
|
6,326 |
|
|
|
2,232 |
|
|
2,182 |
|
|
|
2,180 |
|
|
|
2,120 |
Undepreciated (loss)
earnings |
$ |
(62,014 |
) |
|
$ |
33,697 |
|
$ |
(92,637 |
) |
|
$ |
(35,022 |
) |
|
$ |
12,641 |
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding - basic |
|
91,117 |
|
|
|
90,683 |
|
|
90,984 |
|
|
|
91,193 |
|
|
|
91,314 |
Undepreciated (loss) earnings
per common share |
$ |
(0.68 |
) |
|
$ |
0.37 |
|
$ |
(1.02 |
) |
|
$ |
(0.38 |
) |
|
$ |
0.14 |
Adjusted Book Value Per Common Share
Adjusted book value per common share is a
supplemental non-GAAP financial measure calculated by making the
following adjustments to GAAP book value: (i) exclude the Company's
share of cumulative depreciation and lease intangible amortization
expenses related to real estate held at the end of the period for
which an impairment has not been recognized, (ii) exclude the
cumulative adjustment of redeemable non-controlling interests to
estimated redemption value and (iii) adjust our amortized cost
liabilities that finance our investment portfolio to fair
value.
Our rental property portfolio includes fee
simple interests in single-family rental homes and joint venture
equity interests in multi-family properties owned by Consolidated
Real Estate VIEs. By excluding our share of cumulative non-cash
depreciation and amortization expenses related to real estate held
at the end of the period for which an impairment has not been
recognized, adjusted book value reflects the value, at their
undepreciated basis, of our single-family rental properties and
joint venture equity investments that the Company has determined to
be recoverable at the end of the period.
Additionally, in connection with third party
ownership of certain of the non-controlling interests in certain of
the Consolidated Real Estate VIEs, we record redeemable
non-controlling interests as mezzanine equity on our condensed
consolidated balance sheets. The holders of the redeemable
non-controlling interests may elect to sell their ownership
interests to us at fair value once a year, subject to annual
minimum and maximum amount limitations, resulting in an adjustment
of the redeemable non-controlling interests to fair value that is
accounted for by us as an equity transaction in accordance with
GAAP. A key component of the estimation of fair value of the
redeemable non-controlling interests is the estimated fair value of
the multi-family apartment properties held by the applicable
Consolidated Real Estate VIEs. However, because the corresponding
real estate assets are not reported at fair value and thus not
adjusted to reflect unrealized gains or losses in our condensed
consolidated financial statements, the cumulative adjustment of the
redeemable non-controlling interests to fair value directly affects
our GAAP book value. By excluding the cumulative adjustment of
redeemable non-controlling interests to estimated redemption value,
adjusted book value more closely aligns the accounting treatment
applied to these real estate assets and reflects our joint venture
equity investment at its undepreciated basis.
The substantial majority of our remaining assets
are financial or similar instruments that are carried at fair value
in accordance with the fair value option in our condensed
consolidated financial statements. However, unlike our use of the
fair value option for the assets in our investment portfolio,
certain CDOs issued by our residential loan securitizations, senior
unsecured notes and subordinated debentures that finance our
investment portfolio assets are carried at amortized cost in our
condensed consolidated financial statements. By adjusting these
financing instruments to fair value, adjusted book value reflects
the Company's net equity in investments on a comparable fair value
basis.
We believe that the presentation of adjusted
book value per common share provides a useful measure for investors
and us as it provides a consistent measure of our value, allows
management to effectively consider our financial position and
facilitates the comparison of our financial performance to that of
our peers.
A reconciliation of GAAP book value to adjusted
book value and calculation of adjusted book value per common share
as of the dates indicated is presented below (amounts in thousands,
except per share data):
|
March 31, 2024 |
|
December 31, 2023 |
|
September 30, 2023 |
|
June 30, 2023 |
|
March 31, 2023 |
Company's stockholders' equity |
$ |
1,485,256 |
|
|
$ |
1,579,612 |
|
|
$ |
1,575,228 |
|
|
$ |
1,690,712 |
|
|
$ |
1,737,506 |
|
Preferred stock liquidation
preference |
|
(554,110 |
) |
|
|
(554,110 |
) |
|
|
(554,110 |
) |
|
|
(555,699 |
) |
|
|
(556,645 |
) |
GAAP book value |
|
931,146 |
|
|
|
1,025,502 |
|
|
|
1,021,118 |
|
|
|
1,135,013 |
|
|
|
1,180,861 |
|
Add: |
|
|
|
|
|
|
|
|
|
Cumulative depreciation expense on real estate (1) |
|
24,451 |
|
|
|
21,801 |
|
|
|
21,817 |
|
|
|
23,157 |
|
|
|
33,553 |
|
Cumulative amortization of lease intangibles related to real estate
(1) |
|
13,000 |
|
|
|
14,897 |
|
|
|
21,356 |
|
|
|
30,843 |
|
|
|
59,844 |
|
Cumulative adjustment of redeemable non-controlling interest to
estimated redemption value |
|
36,489 |
|
|
|
30,062 |
|
|
|
17,043 |
|
|
|
27,640 |
|
|
|
44,237 |
|
Adjustment of amortized cost liabilities to fair value |
|
44,590 |
|
|
|
55,271 |
|
|
|
90,929 |
|
|
|
90,129 |
|
|
|
86,978 |
|
Adjusted book value |
$ |
1,049,676 |
|
|
$ |
1,147,533 |
|
|
$ |
1,172,263 |
|
|
$ |
1,306,782 |
|
|
$ |
1,405,473 |
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding |
|
91,231 |
|
|
|
90,675 |
|
|
|
90,684 |
|
|
|
91,250 |
|
|
|
91,180 |
|
GAAP book value per common
share (2) |
$ |
10.21 |
|
|
$ |
11.31 |
|
|
$ |
11.26 |
|
|
$ |
12.44 |
|
|
$ |
12.95 |
|
Adjusted book value per common
share (3) |
$ |
11.51 |
|
|
$ |
12.66 |
|
|
$ |
12.93 |
|
|
$ |
14.32 |
|
|
$ |
15.41 |
|
(1) |
Represents cumulative adjustments for the Company's share of
depreciation expense and amortization of lease intangibles related
to real estate held as of the end of the period presented for which
an impairment has not been recognized. |
(2) |
GAAP book value per common share
is calculated using the GAAP book value and the common shares
outstanding for the periods indicated. |
(3) |
Adjusted book value per common
share is calculated using the adjusted book value and the common
shares outstanding for the periods indicated. |
Equity Investments in Multi-Family
Entities
We own joint venture equity investments in
entities that own multi-family properties. We determined that these
joint venture entities are VIEs and that we are the primary
beneficiary of all but two of these VIEs, resulting in
consolidation of the VIEs where we are the primary beneficiary,
including their assets, liabilities, income and expenses, in our
condensed consolidated financial statements with non-controlling
interests for the third-party ownership of the joint ventures'
membership interests. With respect to the two additional joint
venture equity investments for which we determined that we are not
the primary beneficiary, we record our equity investments at fair
value.
In September 2022, the Company announced a
repositioning of its business through the opportunistic disposition
over time of the Company's joint venture equity investments in
multi-family properties and reallocation of its capital away from
such assets to its targeted assets. Accordingly, as of
March 31, 2024, the Company determined that certain joint
venture equity investments meet the criteria to be classified as
held for sale and the assets and liabilities of the respective
Consolidated VIEs are reported in assets and liabilities of
disposal group held for sale.
We also own a preferred equity investment in a
VIE that owns a multi-family property and for which, as of
March 31, 2024, the Company is the primary beneficiary,
resulting in consolidation of the assets, liabilities, income and
expenses of the VIE in our condensed consolidated financial
statements with a non-controlling interest for the third-party
ownership of the VIE's membership interests.
A reconciliation of our net equity investments
in consolidated multi-family properties and disposal group held for
sale to our condensed consolidated financial statements as of
March 31, 2024 is shown below (dollar amounts in
thousands):
Cash and cash equivalents |
|
$ |
14,325 |
|
Real estate, net (1) |
|
|
1,005,161 |
|
Lease intangible, net (2) |
|
|
951 |
|
Assets of disposal group held
for sale |
|
|
146,363 |
|
Other assets |
|
|
30,728 |
|
Total assets |
|
$ |
1,197,528 |
|
|
|
|
Mortgages payable on real
estate, net |
|
$ |
850,743 |
|
Liabilities of disposal group
held for sale |
|
|
122,318 |
|
Other liabilities |
|
|
15,163 |
|
Total liabilities |
|
$ |
988,224 |
|
|
|
|
Redeemable non-controlling
interest in Consolidated VIEs |
|
$ |
20,128 |
|
Less: Cumulative adjustment of
redeemable non-controlling interest to estimated redemption
value |
|
|
(36,489 |
) |
Non-controlling interest in
Consolidated VIEs |
|
|
12,089 |
|
Non-controlling interest in
disposal group held for sale |
|
|
1,736 |
|
Net equity investment (3) |
|
$ |
211,840 |
|
(1) |
Includes real estate held for sale in the amount of $36.2
million. |
(2) |
Included in other assets in the accompanying condensed consolidated
balance sheets. |
(3) |
The Company's net equity
investment as of March 31, 2024 consists of $189.5 million of
net equity investments in consolidated multi-family properties and
$22.3 million of net equity investments in disposal group held for
sale. |
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