Adamas Trust, Inc. · NASDAQ:ADAM
Adamas Trust — New York Mortgage Trust — Q3 2023 Earnings Presentation
52 slides from Adamas Trust's earnings presentation, Nov 2, 2023
Slide 1: 2023 Third Quarter Financial Summary
New York Mortgage Trust, Inc. 2023 Third 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 "Fixed income investment valuations suffered in the third quarter against heightened rate volatility, leading to low transaction volumes across the credit spectrum. With higher rates, negative investor sentiment poured into the market, bringing asset values lowe
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: Key Developments
Key Developments ◦ Loss per share (basic) of $(1.04), Comprehensive loss per share of $(1.04) ◦ Undepreciated loss per share of $(1.02)* Financial ◦ Book value per share of $11.26 (-9.49% change QoQ) Performance ◦ Adjusted book value per share of $12.93* (-9.71% change QoQ) ◦ (7.07)% Quarterly Econo
Slide 8: Market Update
Market Update Consumers lack ability to keep GDP elevated: Personal Savings Relative to Pre-Pandemic Trend • Personal Savings: Due to recent drawdowns, consumer savings now trending 50% below historical levels • Consumer Debt: Revolving credit utilization at highest level ever while at the highest A
Slide 9: Investment Strategy
Investment Strategy In anticipation of a superior market opportunity in the future, NYMT curtailed investment pipelines and shifted its focus to asset management in 2022 Company Objective in a Seismic Market Shift Focused on Long-Term Value in a Downturn Approach: Q2 2022 | Curtailed new investments
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, the opportunity cost of capital is likely greater than any period since the Great Financial Crisis, as the $4.7 return on cash holdings has been competitive to the
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 Loss Per Share* $14.32 $(0.38) $0.30 $0.30 $12.93 Earnings & $(1.02) Book Value 3.60 3.34 % 2Q 2023 3Q 2023 2.80 % 2Q 2023 3Q 2023 2.45 % 2.18% % 14.13% Dividend Yield Q3'23 Economic Return on 2Q 2023 3Q 2023 Adjusted
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 Joint Venture Equity $1,535 MM | 31% $276 MM | 6% BPL - Bridge $856 MM | 17% Mezzanine Lending $229 MM | 5% RPL $587 MM | 12% CMBS Single-Family $4.7 Billion Multi-Family $6 MM | <1% Performing Loans 84% Portfolio Assets 11% $535 MM | 11% +$221MM Available Cash Focu
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 • After significant curtailment of asset purchases in Q3 2022 to Q1 2023, NYMT has shifted its focus to $890 growing its portfolio while maintaining available
Slide 17: Single-Family Portfolio Overview
Single-Family Portfolio Overview Total Investment Total Dollar amounts in millions Portfolio 89% Capital 65% 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 18: Single-Family Agency RMBS Market
Single-Family Agency RMBS Market Market Specified Pools at Different Coupons • Agency RMBS current coupon spread to $900 200 Treasuries continued to widen in Q3 2023 from an already elevated level NYMT Agency RMBS ($MM) 150 • High interest rate volatility remains the primary ZV Spread (bp) factor co
Slide 19: Single-Family Agency RMBS Strategy
Single-Family Agency RMBS Strategy Strategy Agency Portfolio Characteristics • Investing in Agency RMBS allows for diversified growth in overall investment portfolio Market Value ($MM) Specified Pool % | Agency IOs % • Growing Agency RMBS portfolio allows us to establish a higher coupon portfolio wi
Slide 20: Business Purpose Loan-Bridge Strategy
Single-Family Business Purpose Loan-Bridge Strategy Market • NYMT has been onboarding additional bridge loan Outstanding UPB Outstanding Loan LTD UPB Invested originators in 2023 to bolster asset sourcing for the future ($MM): $884 Count: 1,525 ($MM): $3,261 • Credit underwriting standards have rema
Slide 21: Multi-Family Portfolio Overview
Multi-Family Portfolio Overview Total Investment Total Dollar amounts in millions Portfolio 11% Capital 31% Asset Value Net Capital Key Characteristics Core Sub-Sector Avg. Avg. Current Environment Strategy % $ % $ Avg. DSCR Adjusted Coupon/ LTV (1) Target IRR − Agencies remain the primary lender in
Slide 22: Asset Class-Mezzanine Lending
Multi-Family Asset Class-Mezzanine Lending Portfolio Loan Performance • 22 loans: $229 million asset value • Only one loan within the Mezzanine Lending portfolio was delinquent and expected to pay off • Weighted average origination date of at par. Q2 2021 • Annualized payoff rate: • Portfolio occupa
Slide 23: Asset Class-Joint Venture Equity
Multi-Family Asset Class-Joint Venture Equity Portfolio • Portfolio occupancy of approx. 90% • Annualized Rent Growth Rate: ◦ 2021: 14% ◦ 2022: 16% ◦ 2023: 7% Market • Agencies are the primary source of senior financing, with 10-year senior debt currently pricing at low 6%, up from sub-4% prior to 2
Slide 24: 2024 Focus
2024 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 and F
Slide 25: Quarterly Financial Information
Quarterly Financial Information 25
Slide 26: Financial Results: Third Quarter Profit & Loss
Financial Results Third Quarter Profit & Loss Dollar amounts in millions, except per share data Description Amount EPS Contribution Interest income $ 65.2 $ 0.72 Interest expense (48.4) (0.53) Net Interest Income $ 16.8 $ 0.19 Income from real estate 42.4 0.47 Expenses related to real estate (50.2)
Slide 27: Yields By Strategy
Yields By Strategy Quarter over Quarter Comparison Net Interest Spread (3Q’23 vs 2Q’23) Net Interest Spread for the third quarter was 0.90%, up 42 bps from the prior quarter primarily attributable to a decrease in average financing cost of 46 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* (3Q’23 vs 2Q’23) The increase in Adjusted Interest Income can be primarily attributed to our increased investment in Agency RMBS and was partially offset by a decrease in Adjusted Interest Income due to conti
Slide 29: Net Loss from Real Estate
Net Loss from Real Estate Quarter over Quarter Comparison Net Loss from Real Estate (3Q’23 vs 2Q’23) Income from real estate and interest expense on mortgages payable on real estate decreased in the third quarter as a result of sales of multi-family real estate assets by consolidated joint venture e
Slide 30: Other (Loss) Income
Other (Loss) Income Quarter over Quarter Comparison Realized (Losses) Gains, Net (3Q’23 vs 2Q’23) Net realized losses on investment securities in the third quarter are primarily related to the sale of CMBS, as well as the write down of a non-Agency RMBS investment. Net realized losses on residential
Slide 31: Other (Loss) Income
Other (Loss) Income Quarter over Quarter Comparison Gains (Losses) on Derivative Instruments, Net (3Q’23 vs 2Q’23) Net gains on derivative investments in the third quarter are primarily related to unrealized gains on interest rate swaps as a result of an increase in interest rates during the period.
Slide 32: Other (Loss) Income
Other (Loss) Income Quarter over Quarter Comparison Impairment of Real Estate (3Q’23 vs 2Q’23) Impairment of real estate increased as a result of additional impairment losses recognized on certain multi-family real estate assets in disposal group held for sale due to wider cap rates, resulting in a
Slide 33: Expense Analysis
Expense Analysis Quarter over Quarter Comparison General and Administrative Expenses (3Q’23 vs 2Q’23) Quarterly general and administrative expenses decreased primarily as a result of annual board stock-based compensation granted in the second quarter and a decrease in incentive compensation accrual
Slide 34: Other Comprehensive (Loss) Income
Other Comprehensive (Loss) Income Dollar Amounts in Thousands 3Q'23 2Q'23 1Q'23 4Q'22 3Q'22 Net (Loss) Income Attributable to Company's Common Stockholders $ (94,819) $ (37,202) $ 10,521 $ (48,076) $ (125,770) Other Comprehensive (Loss) Income (Decrease) increase in fair value of investment securiti
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 ended September 30, 2023. Quarter Ended September 30, 2023 Amounts in Thousands, except per share Amount Shares Per Share Beginning Balance, GAAP
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: Reconciliation of Single-Family Adjusted Net Interest Income
Non-GAAP Financial Measures Reconciliation of Single-Family Adjusted Net Interest Income Dollar Amounts in Thousands 3Q'23 2Q'23 1Q'23 4Q'22 3Q'22 Single-Family GAAP interest income $ 61,346 $ 53,907 $ 53,519 $ 59,370 $ 64,278 GAAP interest expense (44,101) (38,542) (36,759) (38,163) (36,221) GAAP t
Slide 40: Reconciliation of Corporate/Other Adjusted Net Interest Income
Non-GAAP Financial Measures Reconciliation of Corporate/Other Adjusted Net Interest Income Dollar Amounts in Thousands 3Q'23 2Q'23 1Q'23 4Q'22 3Q'22 Corporate/Other GAAP interest income $ — $ 15 $ 48 $ 64 $ 1,228 GAAP interest expense (4,305) (3,862) (2,576) (2,488) (2,312) GAAP total net interest i
Slide 41: Reconciliation of Total Adjusted Net Interest Income
Non-GAAP Financial Measures Reconciliation of Total Adjusted Net Interest Income Dollar Amounts in Thousands 3Q'23 2Q'23 1Q'23 4Q'22 3Q'22 GAAP interest income $ 65,195 $ 57,540 $ 57,136 $ 62,948 $ 68,920 GAAP interest expense (48,406) (42,404) (39,335) (40,651) (38,563) GAAP total net interest inco
Slide 42: 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 43: 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 44: 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 3Q'23 2Q'23 1Q'23 4Q'22 3Q'22 data) Company's stockholders' equity $ 1,575,228 $ 1,690,712 $ 1,737,506 $ 1,767,216 $ 1,917,506 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 Available Cash, Slide 3 Financing of Unencumbered Assets, Additional Financing of Under- − Image(s) used under license from Powerpoint Stock Images. Levered Assets
Slide 48: End Notes
End Notes Slide 14 − Total Portfolio Leverage Ratio represents outstanding − Other Investments include an equity investment in an entity that repurchase agreement financing plus residential CDOs issued originates residential loans. by the Company related to the strategy divided by the net − Portfoli
Slide 49: End Notes
End Notes − WALA represents the weighted average loan age of the underlying Slide 18 collateral of Specified Pools as of September 30, 2023. − ZV Spreads at indicated coupon percentages sourced from Bloomberg. − Specified Pool Breakdown percentages are calculated based on − NYMT Agency RMBS Holdings
Slide 50: End Notes
End Notes Slide 22 − Asset value represents the fair value of Mezzanine Lending investments as Slide 35 of September 30, 2023. − Outstanding shares used to calculate book value per common share and − Annualized rent growth rate is calculated as the average annualized Adjusted Book Value per common s
Slide 51: Capital Allocation
Capital Allocation At September 30, 2023 (Dollar Amounts in Thousands) Single-Family (1) Multi-Family Corporate/ Total Other Residential loans $ 2,993,895 $ — $ — $ 2,993,895 Consolidated SLST CDOs (584,741) — — (584,741) Investment securities available for sale 1,596,567 5,648 — 1,602,215 Multi-fam
Slide 52: Reconciliation of Joint Venture Equity Investments
Reconciliation of Joint Venture Equity Investments Dollar Amounts in Thousands Cash and cash equivalents $ 7,120 Real estate, net 542,797 Assets of disposal group held for sale 909,731 Other assets 17,456 Total assets $ 1,477,104 Mortgages payable on real estate, net $ 396,810 Liabilities of disposa
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