Q1 2024 Earnings Summary
Reported on Feb 18, 2025 (After Market Close)
Pre-Earnings Price$6.27Last close (May 2, 2024)
Post-Earnings Price$6.32Open (May 3, 2024)
Price Change
$0.05(+0.80%)
- Lower Financing Costs through Securitization: NYMT is moving more assets into securitization, which offers a lower cost of debt relative to repo financing, achieving 25 to 50 basis points of savings depending on asset class and securitization type. Additionally, securitizations provide longer tenures and benefit from the inverted yield curve.
- Expense Reduction Initiatives to Improve ROE: The company is implementing opportunities to reduce expenses and expects to see relief over the course of the year. This initiative should help improve Return on Equity (ROE), enhancing profitability as expenses come down.
- Increased Interest Income and Targeting Mid-Teens Returns: NYMT has stabilized its portfolio holdings, resulting in an increase of interest income by 50% compared to the last quarter of 2023. The company plans to opportunistically dispose of assets and generate high portfolio turnover to transition investments into mid-teens returns.
- The company is facing challenges in disposing of its multifamily JV equity investments due to depressed rents from new supply and higher cap rates, leading to significant impairments and unrealized losses in the quarter.
- The company expects undepreciated earnings to remain below the current dividend, indicating the dividend may not be fully covered by earnings and may not be sustainable.
- There is a potential increase in credit risk in the BPL-Bridge loan portfolio, as more borrowers are requiring extensions to refinance their loans, which could lead to future delinquencies.