Adamas Trust, Inc. · NASDAQ:ADAM
Adamas Trust — New York Mortgage Trust — Q4 2022 Earnings Presentation
48 slides from Adamas Trust's earnings presentation, Feb 23, 2023
Slide 1: 2022 Fourth Quarter Financial Summary
New York Mortgage Trust 2022 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 “Against retreating asset prices and increasing financing costs in the fourth quarter of 2022, the market presented a limited set of attractive investment opportunities. In light of the worsening economic backdrop and ongoing debate of either a ‘soft’ or ‘hard’
Slide 4: Table of Contents
Table of Contents Company Overview Financial Summary Market & Strategy Update Quarterly Financial Information Appendix Non-GAAP Financial Measures Glossary End Notes Capital Allocation Reconciliation of Joint Venture Equity Investments
Slide 5: Company Overview
Company Overview
Slide 6: NYMT Overview
NYMT Overview New York Mortgage Trust, Inc. (NASDAQ: NYMT) is a real estate investment trust Capital Allocation (“REIT”) for U.S. federal income tax purposes in the business of acquiring, investing in, financing and managing primarily mortgage-related single-family and multi-family Single-Family Mul
Slide 7: Strategy Update
Strategy Update A Cautious Approach to Growth The market began a seismic shift at the end of 1H'22: • Housing market supply slowly increasing after a multi-decade low • Market’s reaction to such change is in middle stages • Similar theme witnessed in Q3'22 now seen in Q1’23 • Forecasts demonstrate c
Slide 8: Market Update
Market Update Market Slowdown Impacting 2021 and 1H'22 Vintage Opportunity will follow abrupt change in valuations related to 2021 and 1H'22 vintage: • Unsecured debt and high LTV loan products will suffer first economic impact with significant increase in delinquencies • New construction loans from
Slide 9: Key Developments
Key Developments ◦ Loss per share of $(0.13), Comprehensive loss per share of $(0.13) ◦ Undepreciated loss per share of $(0.12)* Financial ◦ Book value per share of $3.32 Performance ◦ Adjusted book value per share of $3.97* (-4.8% change QoQ) ◦ (6.3)% Quarterly Economic Return ◦ (2.4)% Quarterly Ec
Slide 10: Sources of Liquidity
Sources of Liquidity Significant Reinvestment Opportunity NYMT's Liquidity Allows for Advancement in a Dislocated Market Dry Powder Available As of EPS Growth Potential 9/30/2020 (dollar amounts in millions) $648MM Deployment Availability 13% IRR 15% IRR 17% IRR $0.08 $0.07 $314 $0.06 $0.06 $0.05 $0
Slide 11: Financial Summary
Financial Summary Fourth Quarter 2022
Slide 12: Financial Snapshot
Financial Snapshot Dividend Per Share Adjusted Book Value* Undepreciated Loss Per Share* $0.10 $0.10 $4.17 $3.97 Earnings & $(0.12) Book Value $(0.27) 3.60% 3.34% 2.80% 3Q 2022 4Q 2022 3Q 2022 4Q 2022 2.45% 3Q 2022 4Q 2022 2.18% 15.63% Dividend Yield Q4'22 Economic Return on Undepreciated losses dri
Slide 13: NYMT Continues to Enhance Debt Structure
NYMT Continues to Enhance Debt Structure Strategy to Utilize Cash without Restrictions Quarterly Portfolio Financing Exposure (Dollar amounts in millions) Portfolio Financing Strategy to Optimize Cash Portfolio Recourse Leverage Ratio Continue to de-risk from mark-to-market financing arrangements to
Slide 14: Balance Sheet Summary
Balance Sheet Summary Portfolio Positioning (dollar amounts in millions) Portfolio Assets Portfolio and Corporate Debt 1 Lower duration BPL Bridge $1,236 31% Securitization Debt portfolio returns $1,498 | (3.54% WAR) 63% capital faster to reinvest in higher yielding opportunities Single-Family RPL $
Slide 15: Market & Strategy Update
Market & Strategy Update
Slide 16: NYMT Investment Strategy
NYMT Investment Strategy Strategy For Sustainable Earnings Growth Portfolio Acquisitions (Dollar amounts in millions) $985 $45 $851 $890 $157 $60 Portfolio Dynamics $56 $57 NYMT investment strategy focused on growth of higher $68 $91 yielding short-duration bridge loans to generate interest $189 inc
Slide 17: Single-Family Portfolio Overview
Single-Family Portfolio Overview Total Investment Portfolio Total Capital Dollar amounts in millions 82% 62% Portfolio Total Asset Value Net Capital Loan Key Characteristics Recourse Portfolio Core Strategy Sub-Sector Current Environment Leverage Leverage Avg. % $ % $ Ratio Ratio Avg. FICO Avg. LTV
Slide 18: Single-Family Business Purpose Loan-Bridge Strategy
Single-Family Business Purpose Loan-Bridge Strategy NYMT Focus Loan Count: 1,964 UPB ($MM): $1,254 Expertise & Background Loan Key Characteristics ◦ Deep experience managing different whole loan Avg. FICO Avg. Coupon Avg. LTARV Avg. LTC strategies across the credit spectrum. ◦ Managed rehabilitation
Slide 19: Multi-Family Portfolio Overview
Multi-Family Portfolio Overview Total Investment Portfolio Total Capital Dollar amounts in millions 17% 35% Asset Value Net Capital Loan Key Characteristics Core Strategy Sub-Sector Current Environment Avg. Coupon/ % $ % $ Avg. DSCR Avg. LTV Target IRR • Senior advance rates continue to remain lower
Slide 20: Multi-Family Asset Class - Mezzanine Lending
Multi-Family Asset Class - Mezzanine Lending Quarterly Update Property Operating Update Loan Performance Update ◦ Four loans with outstanding UPB of $36 million paid off in ◦ Portfolio occupancy of approximately 93% as of December 31, 2022. the quarter at an average lifetime IRR to NYMT of 12.53% (1
Slide 21: Current Focus
Current Focus The Company is focused on opportunities in a market undergoing a 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 Balance Sheet
Slide 22: Quarterly Financial Information
Quarterly Financial Information
Slide 23: Financial Results
Financial Results Fourth Quarter Profit & Loss Dollar amounts in millions, except per share data Description Amount EPS Contribution Interest income $ 63.0 $ 0.17 Interest expense (40.7) (0.11) Net Interest Income $ 22.3 $ 0.06 Realized gains 0.8 — Income from real estate 39.4 0.11 Preferred return
Slide 24: Yields by Strategy
Yields by Strategy Quarter over Quarter Comparison Net Interest Spread (4Q’22 vs 3Q’22) Net Interest Spread for the fourth quarter was 1.11%, a decrease of 107 bps from the prior quarter primarily due to an increase in financing costs as a result of a residential loan securitization completed during
Slide 25: Adjusted Net Interest Income
Adjusted Net Interest Income* Quarter over Quarter Comparison Adjusted Net Interest Income* (4Q’22 vs 3Q’22) Adjusted Net Interest Income decreased in the fourth quarter as compared to the previous quarter, primarily due to paydowns on business purpose loans, an increase in financing costs as a resu
Slide 26: Non-Interest (Loss) Income
Non-Interest (Loss) Income Quarter over Quarter Comparison Realized Gains (Losses), net (4Q’22 vs 3Q’22) Net realized gains on residential loans are primarily a result of loan prepayment activity during the quarter. Dollar Amounts in Thousands 4Q'22 3Q'22 2Q'22 1Q'22 4Q'21 Residential loans $ 789 $
Slide 27: Non-Interest (Loss) Income
Non-Interest (Loss) Income Quarter over Quarter Comparison Income (Loss) from Equity Investments (4Q’22 vs 3Q’22) The increase in income from equity investments in the fourth quarter is primarily related to the decrease in unrealized losses recognized on our preferred equity and equity investments c
Slide 28: Net (Loss) Income from Real Estate
Net (Loss) Income from Real Estate Quarter over Quarter Comparison Net (Loss) Income from Real Estate (4Q’22 vs 3Q’22) The decrease in net income from real estate during the quarter was primarily due to the net gain recognized on the sale of the underlying apartment community in a consolidated joint
Slide 29: Expense Analysis
Expense Analysis Quarter over Quarter Comparison General and Administrative Expenses (4Q’22 vs 3Q’22) Quarterly general and administrative expenses increased primarily as a result of an increase in incentive compensation expense during the fourth quarter. Dollar Amounts in Thousands 4Q'22 3Q'22 2Q'2
Slide 30: Other Comprehensive (Loss) Income
Other Comprehensive (Loss) Income Dollar Amounts in Thousands 4Q'22 3Q'22 2Q'22 1Q'22 4Q'21 NET (LOSS) INCOME ATTRIBUTABLE TO COMPANY'S COMMON $ (48,076) $ (125,770) $ (82,389) $ (84,343) $ 22,460 STOCKHOLDERS OTHER COMPREHENSIVE INCOME (LOSS) Increase (decrease) in fair value of investment securiti
Slide 31: 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, 2022. Quarter Ended December 31, 2022 Year Ended December 31, 2022 Amounts in Thousands, except per share Amount Share
Slide 32: 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 33: Appendix
Appendix
Slide 34: 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 35: Reconciliation of Single-Family Adjusted Net Interest Income
Non-GAAP Financial Measures Reconciliation of Single-Family Adjusted Net Interest Income Dollar Amounts in Thousands 4Q'22 3Q'22 2Q'22 1Q'22 4Q'21 Single-Family GAAP interest income $ 59,370 $ 64,278 $ 62,468 $ 52,801 $ 46,837 GAAP interest expense (38,163) (36,221) (26,472) (18,953) (14,596) GAAP t
Slide 36: Reconciliation of Total Adjusted Net Interest Income
Non-GAAP Financial Measures Reconciliation of Total Adjusted Net Interest Income Dollar Amounts in Thousands 4Q'22 3Q'22 2Q'22 1Q'22 4Q'21 GAAP interest income $ 62,948 $ 68,920 $ 68,020 $ 58,501 $ 52,318 GAAP interest expense (40,651) (38,563) (28,740) (21,465) (19,468) GAAP total net interest inco
Slide 37: 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 38: 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 have discontinued disclosure of undepreciated book value per common share and i
Slide 39: 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 data) 4Q'22 3Q'22 2Q'22 1Q'22 4Q'21 Company's stockholders' equity $ 1,767,216 $ 1,917,506 $ 2,092,991 $ 2,217,618 $ 2,341,031 Preferred stock liquidation preference (557,
Slide 40: 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 41: Glossary
Glossary "Economic Return" is calculated based on the periodic change in GAAP book value per share plus dividends declared per common share during the respective period; "Economic Return on Adjusted Book Value" is calculated based on the periodic change in adjusted book value per common share, a sup
Slide 42: End Notes
End Notes Slide 1 • EPS Growth Potential amounts represent incremental earnings per share on • Image(s) used under license from Shutterstock.com. future "Dry Powder" deployment, which is calculated as the product of the Slide 6 various hypothetical IRR for new investment levels, the deployment • Ref
Slide 43: End Notes
End Notes • MTM Repo % of Total Investment Portfolio is calculated as the quotient of Slide 17 MTM Repo and the Total Investment Portfolio amount. Refer to Appendix - • Total Investment Portfolio, Total Capital, and Net Capital represent "Capital Allocation" for a detailed breakout of Total Investme
Slide 44: End Notes
End Notes Slide 18 • Asset Value for Joint Venture Equity investments represents the • UPB represents the interest bearing balance of the BPL-Bridge strategy portfolio Company's net equity investment in consolidated and unconsolidated as of December 31, 2022. Average FICO and Average Coupon represen
Slide 45: End Notes
End Notes Slide 31 • Outstanding shares used to calculate book value per common share and Adjusted Book Value per common share for the quarter ended December 31, 2022 are 364,774,752. • Common stock issuance, net includes amortization of stock based compensation. Slide 48 • Image(s) used under licen
Slide 46: Capital Allocation
Capital Allocation At December 31, 2022 (Dollar Amounts in Thousands) Single-Family (1) Multi-Family Corporate/Other Total Residential loans $ 3,525,080 $ — $ — $ 3,525,080 Consolidated SLST CDOs (634,495) — — (634,495) Multi-family loans — 87,534 — 87,534 Investment securities available for sale 68
Slide 47: Reconciliation of Joint Venture Equity Investments
Reconciliation of Joint Venture Equity Investments Dollar Amounts in Thousands Cash and cash equivalents $ 21,129 Real estate, net 543,739 Assets of disposal group held for sale 1,151,784 Other assets 13,686 Total assets $ 1,730,338 Mortgages payable on real estate, net $ 394,707 Liabilities of disp
Slide 48: Thank You
Thank You From all of us at NYMT
New York Mortgage Trust — Q4 2022 Earnings Presentation on 6ix