NEW YORK MORTGAGE TRUST, INC. (NYMT)·Q2 2025 Earnings Summary

Executive Summary

• Recurring earnings outpaced the dividend: Earnings available for distribution (EAD) per share rose 10% QoQ to $0.22, above the $0.20 dividend; net interest spread widened to 1.50% as financing costs fell, signaling improving core earnings power .
• GAAP EPS was a small loss of $0.04 due largely to derivative losses despite asset valuation gains; interest income increased to $140.9M (+8% QoQ, +55% YoY) while net interest income reached $36.4M (+10% QoQ, +91% YoY) .
• Strategic catalysts: acquisition of the remaining 50% of Constructive Loans for ~$38.4M (expected ~15% ROE) and an 8-K consent raising the recourse leverage covenant on 2026 notes from 4x to 8x, enabling agency RMBS expansion and platform scaling; G&A expense ratio expected to rise to ~6.2–6.4% with Constructive consolidation .
• Portfolio repositioning continued: increased agency RMBS to 57% of assets/equity share of capital (equity concentration 38%) with liquidity of ~$416–460M to deploy; management aims for agency allocation trending toward ~50% of equity medium term .

What Went Well and What Went Wrong

What Went Well

• EAD beat and momentum: “recurring earnings surpassing the dividend” and EAD/share rose to $0.22, demonstrating execution of the capital allocation strategy and improved financing costs (net interest spread to 1.50%) .
• Balance sheet scaling in core assets: ~$503.7M agency investments (avg coupon 5.29%) and ~$280.2M residential loans (avg gross coupon 9.76%) acquired in Q2, supporting adjusted net interest income growth .
• Platform catalyst: full acquisition of Constructive Loans—management expects it to be immediately accretive to EAD and deliver ~15% annual ROE, diversifying income via gain-on-sale and origination fees .

What Went Wrong

• GAAP earnings volatility: derivative losses of $26.966M offset asset valuation gains, resulting in GAAP EPS of $(0.04) despite stronger core earnings; realized losses were $3.771M .
• Book value drift: GAAP book value/share declined to $9.11 and adjusted book value/share to $10.26 (down 2.8% and 1.6% QoQ, respectively); management noted ABV slightly down 0–1% through July 29 .
• Competitive pressure in BPL Bridge: tightening pass-through yields given broader investor financing constrained ROE in bridge loans; management expects comparatively more growth in BPL Rental .

Financial Results

Consolidated Performance vs Prior Periods and Estimates

*SPGI consensus estimates unavailable due to CIQ mapping constraints. Values would be retrieved from S&P Global.

Segment Adjusted Net Interest Income (Non-GAAP)

KPIs and Capital

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “NYMT’s solid second quarter performance, with recurring earnings surpassing the dividend, demonstrates the effective execution of our long-term capital allocation strategy and strength of our liquidity position.” — Jason Serrano, CEO .
• “EAD per share… increased 10% quarter over quarter to $0.22… adjusted net interest income per share rose… net interest spread… increased to 150 basis points from 132 basis points in the first quarter.” — Kristine Nario-Eng, CFO .
• “We… acquired the remaining 50% interest in Constructive… we expect [it] to deliver an annual equity return of approximately 15%… immediately accretive to EAD.” — Management .
• “We expect the agency portfolio will trend towards 50% of total equity.” — Management .

Q&A Highlights

• Allocation framework: Agency equity trending toward ~50% medium-term; dynamic across asset classes to target ~4.5x recourse leverage if mix shifts as planned .
• Constructive strategy: Capital-light originate-to-distribute model retained; NYMT expects to buy a portion (~25%) of production while scaling margin and volumes .
• Book value cadence: Adjusted book value down ~0–1% through July 29, modest intra-quarter move .
• ROE context: Mid-teens fully hedged ROE in agency; mid-to-high teens in BPL Rental; bridge ROE under pressure from competition .
• Rates and securitization: Fed cuts would benefit repo financing and likely 2–5yr securitization execution; liabilities in existing securitizations largely fixed-rate; potential call/refi optionality to improve NIM .

Estimates Context

• Wall Street consensus for Q2 2025 EPS and Revenue from S&P Global was unavailable due to CIQ mapping constraints; no estimate comparison is provided in tables. Management’s EAD beat vs dividend suggests potential upward bias to EAD-related expectations, but formal consensus could not be retrieved [GetEstimates error; see note above].

Key Takeaways for Investors

• Core earnings momentum: EAD/share at $0.22 and spread expansion to 1.50% underscore improving carry and financing terms; dividend coverage looks sustainable and potentially expandable over time if trends persist .
• Agency scaling with flexibility: Raised leverage covenant to 8x on 2026 notes and liquidity ~$416–460M enable continued agency RMBS growth at attractive spreads, supporting recurring income .
• Constructive acquisition is a structural positive: Expected ~15% ROE and immediate EAD accretion diversifies earnings beyond balance-sheet carry via gain-on-sale and fee income; G&A ratio will rise as the platform consolidates .
• Asset mix optimization: Tilt toward BPL Rental (lower delinquency, strong DSCR) and agencies (liquidity, convexity) while de-emphasizing bridge amid competitive ROE compression and exiting JV multifamily equity risk .
• Rate path optionality: Potential Fed easing improves repo costs and securitization execution; fixed-rate securitization liabilities create call/refi optionality to enhance NIM in lower-rate regimes .
• Book value sensitivity manageable: ABV dip of ~1.6% QoQ (and ~0–1% intra-July) was modest versus earnings trajectory; watch derivative marks and financing mix as key BV drivers near term .
• Trading lens: Near-term catalysts include EAD durability, agency spread dynamics, securitization activity, and Constructive integration updates; narrative skewed positive on recurring earnings and platform scalability .