New York Mortgage Trust Inc. (NASDAQ:NYMT) Q1 2020 Earnings Conference Call - Final Transcript

May 22, 2020 • 09:00 am ET

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New York Mortgage Trust Inc. (NASDAQ:NYMT) Q1 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the New York Mortgage Trust First Quarter 2020 Results Conference Call. [Operator Instructions] This conference is being recorded on Friday, May 22nd, 2020.

A press release and supplemental financial presentation with New York Mortgage Trust first quarter 2020 results was released yesterday. Both the press release and supplemental financial presentation are available on the company's website at www.nymtrust.com. Additionally, we are hosting a live webcast of today's call, which you can access in the Events & Presentations section of the company's website.

At this time, management would like me to inform you that certain statements made during the conference call, which are not historical, may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although New York Mortgage Trust believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Factors and risks that could cause actual results to differ materially from expectations are detailed in yesterday's press release and from time-to-time in the company's filings with the Securities and Exchange Commission.

Now, at this time, I would like to introduce Steve Mumma, Chairman and CEO. Steve, please go ahead.

Executive
Steven R. Mumma

Thank you, operator. Good morning, everyone, and thank you for being on the call. Jason Serrano, our President, will also be speaking this morning as we talk through the first quarter presentation. I will be speaking to the company's overview and financial summary sections, while Jason will be speaking to our investment strategy and business outlook sections.

The first quarter was defined by two periods, January 1st to March 9th, where the company continued to execute their plan raising $500 million in accretive capital and deploying it into residential and multi-family credit investments, and post-March 9th, where we saw unprecedented market disruptions from the COVID-19 global pandemic. As a response to these disruptions, we took decisive action to restructure our portfolio and focus on our core strengths, residential and multi-family credit opportunities. And at the same time, we focused on reducing our exposure to what we can't control, short-term mark-to-market borrowings on our repos.

Beginning on March 23rd and continuing through the quarter end, we sold over $2 billion in assets, reducing our outstanding repurchase agreements by $1.7 billion, finishing the quarter with $173 million in cash liquidity, $1.4 billion in unencumbered assets, and a portfolio leverage of 0.7 times. In early April, we completed a $250 million borrowing against our unencumbered residential loan portfolio. Combined with the proceeds received from the settlement of securities sold in March, we were able to repay an additional $560 million in securities repo. After giving effect to these transactions, the company's liquidity improved to over $200 million, while reducing our portfolio leverage further to 0.6 times.

These actions did come at a significant cost as the company had its worst quarter in its history, seen its book value decline by 33%