Adamas Trust, Inc. · NASDAQ:ADAM
Adamas Trust — New York Mortgage Trust — Q4 2023 Earnings Presentation
52 slides from Adamas Trust's earnings presentation, Feb 22, 2024
Slide 1: 2023 Fourth Quarter Financial Summary
New York Mortgage Trust, Inc. 2023 Fourth 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 "The end of an economic cycle often generates heightened macroeconomic volatility as we approach inflection points in the market. Over the past few months, market developments may be illustrative of these trends. Volatility was high in the latter half of last ye
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 an Single-Family Credit Single-Family Agency internally-managed real estate investment trust (“REIT”) for Multi-Family Cash and Other U.S. federal income tax purposes in the business of acquiring, 2% investing in, finan
Slide 7: Key Developments
Key Developments ◦ Earnings per share (basic) of $0.35, Comprehensive income per share of $0.37 ◦ Undepreciated earnings per share of $0.37* Financial ◦ Book value per share of $11.31 (0.44% change QoQ) Performance ◦ Adjusted book value per share of $12.66* (-2.09% change QoQ) ◦ 2.22% Quarterly Econ
Slide 8: Market Update
Market Update Factors Challenging Economic Growth U.S. Treasury Market Activity may: CRE Loan Activity: • Keep long-term rates stubbornly high • $2.8 trillion of debt will be maturing before 2028. • Crowd out credit demand • Banks hold 50%+ of all CRE debt. • Drain liquidity with debt interest costs
Slide 9: Investment Strategy
Investment Strategy Focused on Long-Term Value in a Downturn Company Objective in a Seismic Market Shift Q2 2022 | Curtailed new investments Approach: Reduced acquisition pipeline by $1B • Prudent capital management to generate long-term value Q4 2022 | Portfolio decline driven by payoffs • Maintain
Slide 10: Balance Sheet Structured for Growth
Balance Sheet Structured for Growth Portfolio Management Focus NYMT Investment Portfolio Size (Dollar amounts in billions) Grow interest income by: $5.1 $4.7 • Adding BPL-Bridge loans to maintain low duration of $4.2 $4.0 credit exposure $3.8 $3.8 $3.8 $3.1 • Continuing to rotate excess capital into
Slide 11: Financial Summary
Financial Summary \ WAS | & i — \ . \ /SNYMT V J, :
Slide 12: Financial Snapshot
Financial Snapshot Dividend Per Share Adjusted Book Value Per Share* Undepreciated Earnings (Loss) Per Share* $12.93 $12.66 $0.30 $0.37 Earnings & $0.20 Book Value $(1.02) 3.60 3.34 % 3Q 2023 4Q 2023 2.80 % 3Q 2023 4Q 2023 2.45 % 2.18% % 9.38% Dividend Yield Q4'23 Economic Return on 3Q 2023 4Q 2023
Slide 13: NYMT Debt Structure
NYMT Debt Structure Portfolio and Corporate Debt Quarterly Portfolio Financing Exposure (dollar amounts in millions) Quarterly Portfolio (Dollar amountsFinancing in millions) Exposure (Dollar amounts in millions) Sr. Unsec. Notes Sub Debentures $100 | 3% $45 | 1% Portfolio Recourse Leverage Ratio 0.
Slide 14: NYMT Portfolio Assets
NYMT Portfolio Assets Agency RMBS $1,989 MM | 37% BPL - Bridge $897 MM | 17% Joint Venture Equity RPL $242 MM | 5% $601 MM | 11% Single-Family $5.1 Billion Mezzanine Lending Performing Loans 87% Portfolio Assets Multi-Family $212 MM | 4% +$171MM Available Cash $549 MM | 10% 9% Reinvesting proceeds i
Slide 15: Market & Strategy Update
Market & Vf Strategy Updat ayy Yi /NYMT
Slide 16: NYMT Investment Strategy
NYMT Investment Strategy Strategy For Sustainable Earnings Growth Portfolio Acquisitions (Dollar amounts in millions) $1,147 Strategic Shift • NYMT has shifted its focus to portfolio growth in 2023 after a significant reduction in investment activity in 2022 due to concerns over the Fed's aggressive
Slide 17: Single-Family Agency RMBS Market
Single-Family Agency RMBS Market Market Specified Pools at Different Coupons • In the quarter, mortgages rallied into year end, $900 200 swept up by the market’s risk-on sentiment in anticipation of forthcoming rate cuts and the NYMT Agency RMBS ($MM) Fed’s dovish pivot. 150 ZV Spread (bp) $600 • Mo
Slide 18: Single-Family Agency RMBS Strategy
Single-Family Agency RMBS Strategy Strategy Agency Portfolio Characteristics • The increase in the Agency RMBS allocation has Market Value ($MM) Specified Pool % | Agency IOs % created more diversification in the portfolio, while allowing for accessible liquidity to react to market dislocations. $1,
Slide 19: Single-Family Business Purpose Loan-Bridge Strategy
Single-Family Business Purpose Loan-Bridge Strategy Market Loan Key Portfolio as of Q4 2023 • NYMT is growing the portfolio in BPL-Bridge loans through an Characteristics 12/31/2023 Acquisitions increased pace of acquisitions from a larger originator base. UPB ($MM) $920 $198 • Origination coupons h
Slide 20: Single-Family Portfolio Overview
Single-Family Portfolio Overview Total Investment Total Dollar amounts in millions Portfolio 91% Capital 71% 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 21: Multi-Family Mezzanine Lending
Multi-Family Asset Class-Mezzanine Lending Portfolio Update • NYMT significantly reduced originations beginning in • Peak exposure to the strategy was $346MM balance in Q1 2022. Q4 2020. Asset Management Update • $30 million loan payoff in Q4 2023 at a lifetime IRR to • We expect the remaining 22 po
Slide 22: Multi-Family Joint Venture Equity
Multi-Family Asset Class-Joint Venture Equity (1) Portfolio Update Asset Management Update • NYMT ceased acquisitions after April 2022. • NYMT is focusing on increasing occupancy levels after the completion or near completion of value-add capex • $92MM of remaining exposure as of Q4 2023. programs.
Slide 23: Multi-Family Portfolio Overview
Multi-Family Portfolio Overview Total Investment Total Dollar amounts in millions Portfolio 9% Capital 27% Asset Value Net Capital Key Characteristics Core Sub-Sector Avg. Current Environment Strategy Avg. % $ % $ Avg. DSCR Adjusted Coupon LTV (1) − Agencies remain the primary lender in the multi-fa
Slide 24: 2024 Focus
2024 Focus The Company is focused on opportunities in a market undergoing a structural landscape change. Balance sheet growth is expected to continue with Agency securities, short-term bridge loans, and structured derivatives. In this new environment, success may be achieved through organic creation
Slide 25: Quarterly Financial Information
Quarterly Financial Information 25
Slide 26: Financial Results
Financial Results Fourth Quarter Profit & Loss Dollar amounts in millions, except per share data Description Amount EPS Contribution Interest income $ 78.8 $ 0.87 Interest expense (62.0) (0.68) Net Interest Income $ 16.8 $ 0.19 Income from real estate 42.9 0.47 Expenses related to real estate (49.7)
Slide 27: Yields By Strategy
Yields By Strategy Quarter over Quarter Comparison Net Interest Spread (4Q’23 vs 3Q’23) Net Interest Spread for the fourth quarter was 1.02%, up 12 bps from the prior quarter primarily attributable to an increase in yield on average interest earning assets of 18 bps due to continued investment in ou
Slide 28: Adjusted Net Interest Income
Adjusted Net Interest Income* Quarter over Quarter Comparison Adjusted Net Interest Income* (4Q’23 vs 3Q’23) The increase in Adjusted Interest Income can be primarily attributed to an increase in average interest earning assets due to increased investment in Agency RMBS and business purpose loans in
Slide 29: Net Loss from Real Estate
Net Loss from Real Estate Quarter over Quarter Comparison Net Loss from Real Estate (4Q’23 vs 3Q’23) The decrease in net loss from real estate during the quarter was primarily due to a decrease in operating expenses as a result of sales of multi- family real estate assets held by consolidated joint
Slide 30: Other Income (Loss)
Other Income (Loss) Quarter over Quarter Comparison Realized (Losses) Gains, Net (4Q’23 vs 3Q’23) Net realized losses on investment securities in the fourth quarter are primarily related to the sale of non-Agency RMBS and CMBS, as well as the write-down of a non-Agency RMBS investment. Net realized
Slide 31: Other Income (Loss)
Other Income (Loss) Quarter over Quarter Comparison (Losses) Gains on Derivative Instruments, Net (4Q’23 vs 3Q’23) Net losses on derivative investments in the fourth quarter are primarily related to unrealized losses on interest rate swaps as a result of a decrease in interest rates during the perio
Slide 32: Other Income (Loss)
Other Income (Loss) Quarter over Quarter Comparison Impairment of Real Estate (4Q’23 vs 3Q’23) The fair value of real estate in disposal group held for sale decreased in the fourth quarter due to lower valuations as a result of lower net operating income and slightly wider cap rates, resulting in ad
Slide 33: Expense Analysis
Expense Analysis Quarter over Quarter Comparison General and Administrative Expenses (4Q’23 vs 3Q’23) Dollar Amounts in Thousands 4Q'23 3Q'23 2Q'23 1Q'23 4Q'22 Salaries, benefits and directors' compensation $ 8,773 $ 8,649 $ 9,820 $ 9,367 $ 9,955 Other general and administrative expenses 2,968 3,177
Slide 34: Other Comprehensive Income (Loss)
Other Comprehensive Income (Loss) Dollar Amounts in Thousands 4Q'23 3Q'23 2Q'23 1Q'23 4Q'22 Net Income (Loss) Attributable to Company's Common Stockholders $ 31,465 $ (94,819) $ (37,202) $ 10,521 $ (48,076) Other Comprehensive Income (Loss): Increase (decrease) in fair value of investment securities
Slide 35: 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 and year ended December 31, 2023. Quarter Ended December 31, 2023 Year Ended December 31, 2023 Amounts in Thousands, except per share Amount Share
Slide 36: 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 37: Appendix
Appendix 37
Slide 38: 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 39: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Single-Family Adjusted Net Interest Income Dollar Amounts in Thousands 4Q'23 3Q'23 2Q'23 1Q'23 4Q'22 Single-Family GAAP interest income $ 76,119 $ 61,346 $ 53,907 $ 53,519 $ 59,370 GAAP interest expense (57,489) (44,101) (38,542) (36,759) (38,163) GAAP t
Slide 40: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Corporate/Other Adjusted Net Interest Income Dollar Amounts in Thousands 4Q'23 3Q'23 2Q'23 1Q'23 4Q'22 Corporate/Other GAAP interest income $ — $ — $ 15 $ 48 $ 64 GAAP interest expense (4,500) (4,305) (3,862) (2,576) (2,488) GAAP total net interest incom
Slide 41: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Total Adjusted Net Interest Income Dollar Amounts in Thousands 4Q'23 3Q'23 2Q'23 1Q'23 4Q'22 GAAP interest income $ 78,789 $ 65,195 $ 57,540 $ 57,136 $ 62,948 GAAP interest expense (61,989) (48,406) (42,404) (39,335) (40,651) GAAP total net interest inco
Slide 42: Non-GAAP Financial Measures
Non-GAAP Financial Measures Undepreciated Earnings (Loss) Undepreciated Earnings (Loss) is a supplemental non-GAAP financial measure defined as GAAP net income (loss) attributable to Company's common stockholders excluding the Company's share in depreciation expense and lease intangible amortization
Slide 43: Non-GAAP Financial Measures
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 44: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Adjusted Book Value Per Common Share Dollar Amounts in Thousands (except per share data) 4Q'23 3Q'23 2Q'23 1Q'23 4Q'22 Company's stockholders' equity $ 1,579,612 $ 1,575,228 $ 1,690,712 $ 1,737,506 $ 1,767,216 Preferred stock liquidation preference (554,
Slide 45: 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 46: 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 47: End Notes
End Notes Slide 1 − Image(s) used under license from Powerpoint Stock Images. − % Market Capitalization is calculated as the quotient of (i) Available Cash, Slide 3 Financing of Unencumbered Assets, Additional Financing of Under- − Image(s) used under license from Powerpoint Stock Images. Levered As
Slide 48: End Notes
End Notes Slide 14 − Other Investments include an equity investment in an entity that − Specified Pool Breakdown percentages are calculated based on originates residential loans. the aggregate fair value of each classification group as of − Portfolio Asset amounts for BPL-Bridge, RPL, Performing Loa
Slide 49: End Notes
End Notes Slide 20 − Average FICO, Average LTV and Average Coupon for Non-Agency − Total Investment Portfolio, Total Capital, and Net Capital represent RMBS strategy represent the weighted average borrower FICO amounts derived from the investment portfolio carrying value and net score, weighted aver
Slide 50: End Notes
End Notes − Asset Value for Joint Venture Equity investments represents the Company's net equity investment in consolidated and unconsolidated multi-family apartment properties. Refer to Appendix - "Reconciliation of Joint Venture Equity and Consolidated Mezzanine Lending Investments" for a detailed
Slide 51: Capital Allocation
Capital Allocation At December 31, 2023 (Dollar Amounts in Thousands) Single-Family (1) Multi-Family Corporate/ Total Other Residential loans $ 3,084,303 $ — $ — $ 3,084,303 Consolidated SLST CDOs (593,737) — — (593,737) Investment securities available for sale 2,013,817 — — 2,013,817 Multi-family l
Slide 52: Reconciliation of Joint Venture Equity and Consolidated Mezzanine Lending Investments
Reconciliation of Joint Venture Equity and Consolidated Mezzanine Lending Investments Consolidated Mezzanine Joint Venture Lending Dollar Amounts in Thousands Equity Investment Total Cash and cash equivalents $ 14,312 $ 1,300 $ 15,612 Real estate, net 925,495 54,439 979,934 (1) Lease intangibles, ne
New York Mortgage Trust — Q4 2023 Earnings Presentation on 6ix