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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

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Interest Income ($USD Millions)$90.8 $118.3 $129.7 $140.9
Net Interest Income ($USD Millions)$19.0 $26.7 $33.1 $36.4
GAAP EPS ($)$(0.29) $(0.46) $0.33 $(0.04)
EAD per Share ($)$0.09 $0.16 $0.20 $0.22
Net Interest Spread (%)1.33% 1.37% 1.32% 1.50%
Consensus EPS (SPGI)N/A*N/A*N/A*N/A*
Consensus Revenue (SPGI)N/A*N/A*N/A*N/A*

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

Segment Adjusted Net Interest Income (Non-GAAP)

Metric ($USD Millions)Q2 2024Q4 2024Q1 2025Q2 2025
Single-Family Adj NII$28.3 $34.2 $39.6 $44.3
Multi-Family NII$2.7 $2.7 $2.6 $2.2
Corporate/Other Adj NII$(3.6) $(4.4) $(5.9) $(6.4)
Total Adj NII$27.3 $32.6 $36.2 $40.1

KPIs and Capital

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Book Value per Share ($)$9.69 $9.28 $9.37 $9.11
Adjusted Book Value per Share ($)$11.02 $10.35 $10.43 $10.26
Company Recourse Leverage Ratio (x)3.0x 3.0x 3.4x 3.8x
Portfolio Recourse Leverage Ratio (x)2.9x 2.9x 3.2x 3.6x
Dividend per Common Share ($)0.20 0.20 0.20 0.20

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
G&A Expense Ratio (%)Post-Constructive (starting Q3 2025)~3.4% ~6.2%–6.4% Raised
Common Dividend ($/share)Q2 2025Maintain $0.20 $0.20 (7th consecutive quarter) Maintained
Agency Equity Allocation TargetMedium-termN/ATrending toward ~50% of equity Introduced directional target
Recourse Leverage Covenant (2026 notes)Effective July 20254x 8x Raised
Adjusted Book Value updateJuly 2025 intra-quarterN/ADown ~0–1% by Jul 29 Update

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Agency RMBS allocation/strategyGrew portfolio; agency purchases at historically wide spreads Equity concentration in agencies up to 38%; aim toward ~50% over time Increasing agency mix
Financing costs and spreadAvg financing cost ~5.20% (Q4); spread 1.37% Avg financing cost 4.98%; spread widened to 1.50% Improving carry
BPL Bridge vs RentalActive in bridge; strong securitization execution Favoring BPL Rental; bridge ROE pressure from competition Shift toward rental
Multi-family exposureOngoing divestiture of JV equity positions Fully exited remaining JV equity positions post quarter; mezzanine payoffs expected to accelerate De-risking multifamily
Tariffs/macro backdropVolatile markets; entry points for deployment Tariff shock widened spreads; later recovery; expect yield curve steepening Macro tailwinds for carry
Platform/OriginationScaling via acquisitions/securitizations Full Constructive acquisition; expected ~15% ROE; accretive to EAD Diversifying earnings

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 .