On July 31, 2024, New York Mortgage Trust Inc (NYMT, Financial) released its 8-K filing for the second quarter of 2024. The company, a real estate investment trust (REIT) specializing in mortgage-related and residential housing-related assets, reported a net loss attributable to common stockholders of $26.03 million, or $0.29 per share, missing the analyst estimate of $0.01 earnings per share. Revenue for the quarter was $23.48 million, also matching the estimated $23.48 million.
Company Overview
New York Mortgage Trust Inc is a REIT that focuses on acquiring, investing in, financing, and managing mortgage-related and residential housing-related assets. Its investment portfolio includes structured multi-family property investments, distressed residential assets, second mortgages, Agency RMBS, and other mortgage-related assets.
Performance and Challenges
The company's net loss of $26.03 million for Q2 2024 is a significant concern, especially when compared to the analyst estimates. The comprehensive loss per share was also $0.29. The yield on average interest-earning assets was 6.46%, while the net interest spread stood at 1.33%. These metrics indicate that while the company is generating income from its assets, the spread between interest income and interest expense is relatively narrow.
Financial Achievements
Despite the losses, New York Mortgage Trust Inc made several strategic investments and financing activities during the quarter. The company purchased approximately $467.5 million of Agency RMBS with an average coupon of 6.00% and $420.7 million in residential loans with an average gross coupon of 10.42%. Additionally, the company completed a securitization of business purpose loans, resulting in net proceeds of approximately $241.6 million.
Income Statement Highlights
Key details from the income statement include:
| Metric | Q2 2024 |
|---|---|
| Interest Income | $90.78 million |
| Interest Expense | $71.73 million |
| Net Interest Income | $19.04 million |
| Net Loss Attributable to Common Stockholders | $(26.03) million |
| Net Loss Per Share | $(0.29) |
Balance Sheet and Cash Flow
As of June 30, 2024, the company reported total assets of $8.23 billion and total liabilities of $6.76 billion. The book value per common share was $9.69, while the adjusted book value per common share was $11.02. The company also repurchased 587,347 shares of common stock for approximately $3.5 million at an average repurchase price of $5.95 per share.
Management Commentary
"Recent interest rate market activity is falling in line with moderating inflation and an expected slowing of the economy, as evidenced by a 29 basis point decline in the 2-year Treasury yield from its second quarter peak. In anticipation of these events, we continued our capital rotation plan to divest from lower current yield portfolio assets while simultaneously utilizing excess liquidity to raise Company recurring income." - Jason Serrano, Chief Executive Officer
Analysis
New York Mortgage Trust Inc's performance in Q2 2024 highlights the challenges faced by REITs in a fluctuating interest rate environment. The company's strategic investments and capital rotation plan are aimed at improving future income, but the current financial results indicate significant hurdles. The narrow net interest spread and the comprehensive loss per share are areas of concern that investors should monitor closely.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from New York Mortgage Trust Inc for further details.
