Adamas Trust, Inc. · NASDAQ:ADAM
Adamas Trust — New York Mortgage Trust — Q2 2023 Earnings Presentation
51 slides from Adamas Trust's earnings presentation, Aug 3, 2023
Slide 1: 2023 Second Quarter Financial Summary
New York Mortgage Trust, Inc. 2023 Second Quarter Financial Summary
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taki
Slide 3: To Our Stockholders
To Our Stockholders Management Update "In the quarter, we maintained a defensive posture within the credit markets as accelerated Federal Government spending in the year neutralized the negative impact of fed rate hikes on economic growth. While U.S. unemployment is pinned below 4% and not a large c
Slide 4: Table of Contents
Table of Contents • Company Overview • Financial Summary • Market & Strategy Update • Quarterly Financial Information • Appendix 4
Slide 5: Company Overview
Company Overview /NYMT Yi \ WAS | LN AS \ : \ / ff A ( / i J 7 Wi yj y Vj
Slide 6: NYMT Overview
NYMT Overview Capital Allocation New York Mortgage Trust, Inc. (NASDAQ: NYMT) is a real Single-Family Multi-Family Cash and Other estate investment trust (“REIT”) for U.S. federal income tax purposes in the business of acquiring, investing in, financing and managing primarily mortgage-related single
Slide 7: Market Update
Market Update Commentary: • Starting in March 2022, the Fed raised rates at a historical pace (currently at 5.50%) to stem inflation • Given the hikes and inverted curve, a recession usually occurs at this time in the cycle • However, in the past 12 months U.S. government spending is still elevated
Slide 8: Market Update
Market Update Commentary: • Deposit stress impacting $10B - $250B banks • To alleviate stress, bank mergers are expected to accelerate • In the process, banks are shrinking to merge • NYMT has evaluated portfolios held for sale by regional banks and expects to be a liquidity provider to such entitie
Slide 9: Strategy Update
Strategy Update Focused on long-term value in a downturn 1H 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 2H 2023 Dislocated Par + / Discount / Inefficient Buyer’s Patience Market Market with Tested Amid High Higher Equity Efficient Inefficient Financing / Outlook Financing Financing Wide Bid/Ask Patient Sel
Slide 10: Balance Sheet Structured for Growth
Balance Sheet Structured for Growth Portfolio Management Strategy NYMT Investment Portfolio Size (Dollar amounts in billions) • In 2023, opportunity cost of capital likely greater than any $4.6 period since the Great Financial Recession. $4.2 $4.0 ◦ Portfolio construction designed to lower portfolio
Slide 11: Key Developments
Key Developments ◦ Loss per share (basic) of $(0.41), Comprehensive loss per share of $(0.41) ◦ Undepreciated loss per share of $(0.38)* Financial ◦ Book value per share of $12.44 (-3.94% change QoQ) Performance ◦ Adjusted book value per share of $14.32* (-7.07% change QoQ) ◦ (1.62)% Quarterly Econo
Slide 12: Financial Summary
Financial Summary \ WAS | & i — \ . \ /SNYMT V J, :
Slide 13: Financial Snapshot
Financial Snapshot Dividend Per Share Adjusted Book Value Per Share* Undepreciated Earnings (Loss) Per Share* $0.40 $15.41 $14.32 $0.30 $0.14 Earnings & Book Value 3.60 $(0.38) 3.34 % 1Q 2023 2Q 2023 2.80 % 1Q 2023 2Q 2023 2.451Q 2023 % 2Q 2023 2.18% % 12.10% Dividend Yield Q2'23 Economic Return on
Slide 14: NYMT Debt Structure
NYMT Debt Structure Portfolio and Corporate Debt Quarterly Portfolio Financing Exposure Quarterly Portfolio (Dollar amountsFinancing in millions) Exposure (Dollar amounts in millions) Portfolio Recourse Leverage Ratio 36% MTM Borrowings 0.6x 0.4x 0.3x 0.3x 0.6x 64% Non-MTM $369 Borrowings $337 $223
Slide 15: Balance Sheet Summary
Balance Sheet Summary Portfolio Positioning (dollar amounts in millions) Portfolio Assets Portfolio and Corporate Debt BPL Bridge $910 21% Securitization Debt 52% $1,390 | (3.59% WAR) RPL $602 14% 1 Credit - Non-MTM Repurchase Agreements Single-Family 7% $188 | (7.79% WAR) Lower duration portfolio r
Slide 16: Market & Strategy Update
Market & Vf Strategy Updat ayy Yi /NYMT
Slide 17: NYMT Investment Strategy
NYMT Investment Strategy Strategy For Sustainable Earnings Growth Portfolio Acquisitions (Dollar amounts in millions) $890 Paradigm Shift / Strategy Shift $60 • Towards the end of Q2 2022, NYMT significantly $57 curtailed investment pipeline in all core strategies, $91 $664 as the period of excess l
Slide 18: Single-Family Portfolio Overview
Single-Family Portfolio Overview Total Investment Total Dollar amounts in millions Portfolio 84% Capital 62% Net Asset Value Portfolio Total Key Characteristics Core Capital Recourse Portfolio Sub-Sector Current Environment Strategy Leverage Leverage Avg. Avg. % $ % $ Ratio Ratio Avg. LTV Coupon FIC
Slide 19: Single-Family Business Purpose Loan-Bridge Strategy
Single-Family Business Purpose Loan-Bridge Strategy NYMT Focus Outstanding UPB Outstanding Loan LTD UPB Invested ($MM): $933 Count: 1,472 ($MM): $3,081 Strategy • Deploying capital targeting the following characteristics: ◦ Experienced borrowers Loan Key Characteristics ◦ Markets with positive demog
Slide 20: Single-Family Agency RMBS Strategy
Single-Family Loan Count: UPB ($MM): 1,472 $933 Agency RMBS Strategy NYMT Focus Agency Portfolio Characteristics Market Value Avg. Coupon Specified Pool % WALA (months) ($MM) Strategy • Opportunistically investing in Agency RMBS during a period of wide spreads $640 5.50% 100% 2.9 • Allows for portfo
Slide 21: Multi-Family Portfolio Overview
Multi-Family Portfolio Overview Total Investment Total Dollar amounts in millions Portfolio 15% Capital 34% Asset Value Net Capital Key Characteristics Core Sub-Sector Avg. Avg. Current Environment Strategy % $ % $ Avg. DSCR Adjusted Coupon/ LTV Target IRR − Agencies remain the primary lender in the
Slide 22: Multi-Family Mezzanine Lending
Multi-Family Asset Class-Mezzanine Lending (as of 6/30/23) Quarterly Update Property Operating Update Loan Performance Update • Portfolio Occupancy of approx. 91% • Only one loan within the Mezzanine Lending portfolio was delinquent and expected to pay off at par. • Annualized Rent Growth Rate: ◦ 20
Slide 23: Multi-Family Joint Venture Equity
Multi-Family Asset Class-Joint Venture Equity (as of 6/30/23) Quarterly Update Portfolio Operating Update Disposition Update • Portfolio Occupancy of approx. 90% • Sold four multi-family properties held by joint ventures realizing 93% of NYMT’s Q1 2023 carrying value of $38 million • Annualized Rent
Slide 24: Current Focus
Current Focus The Company is focused on opportunities in a market undergoing a structural landscape change. Success in this new environment may be achieved through organic creation of liquidity, tactical asset management and prudent liability management for book value protection. Utilize a Strong an
Slide 25: Quarterly Financial Information
Quarterly Financial Information 25
Slide 26: Financial Results
Financial Results Second Quarter Profit & Loss Dollar amounts in millions, except per share data Description Amount EPS Contribution Interest income $ 57.5 $ 0.63 Interest expense (42.4) (0.46) Net Interest Income $ 15.1 $ 0.17 Realized gains 3.6 0.04 Income from real estate 44.8 0.49 Preferred retu
Slide 27: Yields By Strategy
Yields By Strategy Quarter over Quarter Comparison Net Interest Spread (2Q’23 vs 1Q’23) Net Interest Spread for the second quarter was 0.48%, up 7 bps from the prior quarter primarily attributable to a decrease in average financing cost of 24 bps due to the benefit of our in-the-money interest rate
Slide 28: Adjusted Net Interest Income
Adjusted Net Interest Income* Quarter over Quarter Comparison Adjusted Net Interest Income* (2Q’23 vs 1Q’23) The increase in Adjusted Interest Income can be primarily attributed to our increased investment in Agency RMBS which offset a decrease in adjusted interest income due to continued portfolio
Slide 29: Non-Interest Income (Loss)
Non-Interest Income (Loss) Quarter over Quarter Comparison Realized Gains (Losses), Net (2Q’23 vs 1Q’23) Net realized gains on investment securities and derivatives in the second quarter are primarily related to the termination of interest rate cap agreements as a result of the sale of multi-family
Slide 30: Non-Interest Income (Loss)
Non-Interest Income (Loss) Quarter over Quarter Comparison Income (Loss) from Equity Investments (2Q’23 vs 1Q’23) The decrease in income from equity investments in the second quarter is primarily related to unrealized losses recognized on two unconsolidated joint venture equity investments and a dec
Slide 31: Net (Loss) Income from Real Estate
Net (Loss) Income from Real Estate Quarter over Quarter Comparison Net (Loss) Income from Real Estate (2Q’23 vs 1Q’23) The increase in net loss from real estate during the quarter was primarily due to impairment loss recognized on four multi-family real estate assets in disposal group held for sale,
Slide 32: Expense Analysis
Expense Analysis Quarter over Quarter Comparison General and Administrative Expenses (2Q’23 vs 1Q’23) Quarterly general and administrative expenses increased primarily due to annual board stock-based compensation granted during the quarter. Dollar Amounts in Thousands 2Q'23 1Q'23 4Q'22 3Q'22 2Q'22 S
Slide 33: Other Comprehensive (Loss) Income
Other Comprehensive (Loss) Income Dollar Amounts in Thousands 2Q'23 1Q'23 4Q'22 3Q'22 2Q'22 Net (Loss) Income Attributable to Company's Common Stockholders $ (37,202) $ 10,521 $ (48,076) $ (125,770) $ (82,389) Other Comprehensive (Loss) Income (Decrease) increase in fair value of investment securiti
Slide 34: Book Value
Book Value Changes in Book Value The following table analyzes the changes in GAAP Book Value and Adjusted Book Value* of our common stock for the quarter ended June 30, 2023. Quarter Ended June 30, 2023 Amounts in Thousands, except per share Amount Shares Per Share Beginning Balance, GAAP Book Value
Slide 35: Annual and Quarterly Returns
Annual and Quarterly Returns Economic/Total Rate Economic Return: Change in book value per share for the period + Dividend per share declared for the period, divided by the beginning period book value per share. Economic Return on Adjusted Book Value:* Change in Adjusted Book Value per share for the
Slide 36: Appendix
Appendix 36
Slide 37: Non-GAAP Financial Measures
Non-GAAP Financial Measures Adjusted Net Interest Income and Net Interest Spread In addition to the results presented in accordance with GAAP, this supplemental presentation includes certain non-GAAP financial measures, including adjusted interest income, adjusted interest expense, adjusted net inte
Slide 38: Reconciliation of Single-Family Adjusted Net Interest Income
Non-GAAP Financial Measures Reconciliation of Single-Family Adjusted Net Interest Income Dollar Amounts in Thousands 2Q'23 1Q'23 4Q'22 3Q'22 2Q'22 Single-Family GAAP interest income $ 53,907 $ 53,519 $ 59,370 $ 64,278 $ 62,468 GAAP interest expense (38,542) (36,759) (38,163) (36,221) (26,472) GAAP t
Slide 39: Reconciliation of Corporate/Other Adjusted Net Interest Income
Non-GAAP Financial Measures Reconciliation of Corporate/Other Adjusted Net Interest Income Dollar Amounts in Thousands 2Q'23 1Q'23 4Q'22 3Q'22 2Q'22 Corporate/Other GAAP interest income $ 15 $ 48 $ 64 $ 1,228 $ 2,294 GAAP interest expense (3,862) (2,576) (2,488) (2,312) (2,157) GAAP total net intere
Slide 40: Reconciliation of Total Adjusted Net Interest Income
Non-GAAP Financial Measures Reconciliation of Total Adjusted Net Interest Income Dollar Amounts in Thousands 2Q'23 1Q'23 4Q'22 3Q'22 2Q'22 GAAP interest income $ 57,540 $ 57,136 $ 62,948 $ 68,920 $ 68,020 GAAP interest expense (42,404) (39,335) (40,651) (38,563) (28,740) GAAP total net interest inco
Slide 41: Undepreciated (Loss) Earnings
Non-GAAP Financial Measures 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
Slide 42: Adjusted Book Value Per Common Share
Non-GAAP Financial Measures Adjusted Book Value Per Common Share Previously, we presented undepreciated book value per common share as a non-GAAP financial measure. Commencing with the quarter ended December 31, 2022, we discontinued disclosure of undepreciated book value per common share and instea
Slide 43: Reconciliation of Adjusted Book Value Per Common Share
Non-GAAP Financial Measures Reconciliation of Adjusted Book Value Per Common Share Dollar Amounts in Thousands (except per share 2Q'23 1Q'23 4Q'22 3Q'22 2Q'22 data) Company's stockholders' equity $ 1,690,712 $ 1,737,506 $ 1,767,216 $ 1,917,506 $ 2,092,991 Preferred stock liquidation preference (555,
Slide 44: Glossary
Glossary The following defines certain of the commonly used terms in this presentation: "ABS" refers to asset-backed securities; "Adjusted Book Value" has the meaning set forth in "Non-GAAP Financial Measures—Adjusted Book Value Per Common Share"; "Adjusted Interest Income" has the meaning set forth
Slide 45: Glossary
Glossary "Economic Return on Adjusted Book Value" is calculated based on the periodic change in Adjusted Book Value per common share, a supplemental non-GAAP measure, plus dividends declared per common share during the respective periods; "IOs" refers collectively to interest only and inverse intere
Slide 46: End Notes
End Notes Slide 1 − % Market Capitalization is calculated as the quotient of Available Cash, − Image(s) used under license from Powerpoint Stock Images. Financing of Unencumbered Assets, Additional Financing of Under- Slide 3 Levered Assets and Total Deployment Availability and the Company's − Image
Slide 47: End Notes
End Notes − MTM Repo - Agency includes repurchase agreement financing subject to − Credit - Non-MTM Repurchase Agreements include repurchase margin calls used to fund the purchase of Agency RMBS. agreement financing not subject to margin calls used to fund − MTM Repo - Credit includes repurchase agr
Slide 48: End Notes
End Notes − Average LTV for RPL Strategy, BPL-Rental Strategy and Performing Loan − Cash collections as percentage of monthly scheduled interest is Strategy represents the weighted average loan-to-value for residential calculated as the quotient of aggregate coupon interest, default loans held as of
Slide 49: End Notes
End Notes − Average coupon rate of Mezzanine Lending investments is a weighted Slide 24 average rate based upon the unpaid principal amount and contractual − Image(s) used under license from Powerpoint Stock Image. interest or preferred return rate as of June 30, 2023. Slide 25 − Average DSCR and Av
Slide 50: Capital Allocation
Capital Allocation At June 30, 2023 (Dollar Amounts in Thousands) Single-Family (1) Multi-Family Corporate/ Total Other Residential loans $ 3,136,812 $ — $ — $ 3,136,812 Consolidated SLST CDOs (617,168) — — (617,168) Multi-family loans — 97,422 — 97,422 Investment securities available for sale 703,8
Slide 51: Reconciliation of Joint Venture Equity Investments
Reconciliation of Joint Venture Equity Investments Dollar Amounts in Thousands Cash and cash equivalents $ 9,430 Real estate, net 543,833 Assets of disposal group held for sale 965,599 Other assets 13,470 Total assets $ 1,532,332 Mortgages payable on real estate, net $ 397,075 Liabilities of disposa
New York Mortgage Trust — Q2 2023 Earnings Presentation on 6ix