NEW YORK MORTGAGE TRUST, INC. 10-K Analysis & Summary – 2/21/2025

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New York Mortgage Trust, Inc.

10-K

Annual report

Filing date:

02/21/2025

TLDR:

New York Mortgage Trust’s 10-K filing for 2024 reveals a strategic shift towards single-family credit assets amidst a volatile interest rate environment. The company experienced a net loss but also saw growth in its investment portfolio.

ELI5:

New York Mortgage Trust, a company that invests in mortgages, is changing its focus to single-family homes. They lost money last year, but their investments grew.

Accession #:

0001273685-25-000028

Published on

March 16, 2025

Analyst Summary

Net Interest Income increased from $66.5 million in 2023 to $83.9 million in 2024.
Net Loss Attributable to Common Stockholders increased from $90.0 million in 2023 to $103.8 million in 2024.
Total Assets increased from $7.4 billion in 2023 to $9.2 billion in 2024.
Recourse Leverage Ratio increased from 1.6x in 2023 to 3.0x in 2024.
Book Value per Common Share decreased from $11.31 in 2023 to $9.28 in 2024.
Operating Profit Margin = -110.8%
Net Profit Margin = -74%
Return on Assets (ROA) = -0.75%
Return on Equity (ROE) = -4.18%
Basic EPS = -$1.14
Current Ratio = 1.00
Quick Ratio = 1.00
Cash Ratio = 0.04
Debt-to-Equity Ratio = 5.60
Debt-to-Assets Ratio = 0.85
Interest Coverage Ratio = 0.71
Asset Turnover = 0.0001%
Price-to-Earnings Ratio (P/E) = -22.09
Price-to-Book Ratio (P/B) = 2.71
Price-to-Sales Ratio (P/S) = -27.24
Enterprise Value to EBITDA (EV/EBITDA) = 32.66
Revenue Growth = 26.1%
Net Income Growth = -27.5%
EPS Growth = -15.2%
Adjusted book value per common share at the end of the period = $10.35
Company Recourse Leverage Ratio = 3.0x
Portfolio Recourse Leverage Ratio = 2.9x

Opportunities and Risks

Strategic Repositioning: Focus on single-family credit assets could improve risk-adjusted returns.
Agency RMBS Investments: Attractive spread levels in the Agency RMBS market.
Business Purpose Loans: Potential for higher portfolio turnover and increased interest income.
Interest Rate Risk: Increases in interest rates could decrease the value of assets and increase borrowing costs.
Credit Risk: Economic downturns could lead to increased defaults and losses on credit-sensitive assets.
Liquidity Risk: Reliance on short-term financing and potential margin calls could strain liquidity.
Concentration Risk: Portfolio is concentrated in certain geographic areas and asset types.
Cybersecurity Risk: Potential breaches could harm reputation and financial results.

Potential Implications

Company Performance

Monitor the company’s progress in executing its strategic repositioning.
Assess the company’s ability to manage its leverage and hedging strategies effectively.
Evaluate the company’s performance in a rising interest rate environment.

SEC Filing Report: New York Mortgage Trust, Inc. (10-K)

Filing Date: 2025-02-21

Reporting Period End Date: 2024-12-31

Executive Summary

This report analyzes New York Mortgage Trust, Inc.’s (NYMT) 10-K filing for the fiscal year ended December 31, 2024. NYMT is an internally-managed REIT focused on acquiring, investing in, financing, and managing mortgage-related single-family and multi-family residential assets. The company aims to deliver long-term stable distributions to stockholders. Key areas of focus include residential loans (including business purpose loans), Agency RMBS, non-Agency RMBS, and structured multi-family property investments. The company experienced a net loss attributable to common stockholders, but also saw significant growth in its investment portfolio and adjusted interest income. The strategic shift towards single-family credit assets and away from multi-family assets is notable. The company’s leverage and hedging strategies, along with the risks associated with its financing arrangements, require careful monitoring. Overall, the report suggests a Hold rating, pending further observation of the company’s ability to manage its portfolio effectively in a volatile interest rate environment and execute its strategic repositioning.

Company Overview

New York Mortgage Trust, Inc. is a REIT that invests primarily in mortgage-related assets, including residential loans, Agency RMBS, and multi-family property investments. The company operates in a competitive market, facing competition from other REITs, financial institutions, and investment firms. Recent developments include a strategic repositioning of the business, focusing on single-family credit assets and opportunistically disposing of multi-family assets. The company is also navigating a complex macroeconomic environment, including interest rate volatility and potential economic slowdown.

Detailed Analysis

Financial Statement Analysis

Key financial highlights from the 10-K filing include:

Net Interest Income: Increased from $66.5 million in 2023 to $83.9 million in 2024.
Net Loss Attributable to Common Stockholders: Increased from $90.0 million in 2023 to $103.8 million in 2024.
Total Assets: Increased from $7.4 billion in 2023 to $9.2 billion in 2024.
Recourse Leverage Ratio: Increased from 1.6x in 2023 to 3.0x in 2024.

Key Ratios and Trends:

Yield on Average Interest Earning Assets: 6.54% in 2024.
Net Interest Spread: 1.33% in 2024.
Book Value per Common Share: Decreased from $11.31 in 2023 to $9.28 in 2024.

Visual Aids:

(Note: Actual charts and tables would be inserted here if the data were available in a structured format.)

Example Table: Portfolio Allocation

Asset Class	2024	2023
Residential Loans	41.7%	41.7%
Agency RMBS	41.5%	27.2%
Multi-Family Loans	0.9%	1.3%
Equity Investments	1.2%	2.0%

Management’s Discussion and Analysis (MD&A) Insights

Management highlights the strategic repositioning of the business towards single-family credit assets.
The company is focused on acquiring assets with less price sensitivity to credit deterioration.
Management acknowledges the volatile interest rate environment and its potential impact on the portfolio.

Red Flags and Uncommon Metrics:

Significant impairment losses on real estate assets.
Increased recourse leverage ratio.
Reliance on short-term repurchase agreements for financing.

Risk and Opportunity Assessment

Risks:

Interest Rate Risk: Increases in interest rates could decrease the value of assets and increase borrowing costs.
Credit Risk: Economic downturns could lead to increased defaults and losses on credit-sensitive assets.
Liquidity Risk: Reliance on short-term financing and potential margin calls could strain liquidity.
Concentration Risk: Portfolio is concentrated in certain geographic areas and asset types.
Cybersecurity Risk: Potential breaches could harm reputation and financial results.

Opportunities:

Strategic Repositioning: Focus on single-family credit assets could improve risk-adjusted returns.
Agency RMBS Investments: Attractive spread levels in the Agency RMBS market.
Business Purpose Loans: Potential for higher portfolio turnover and increased interest income.

Conclusion and Actionable Insights

New York Mortgage Trust faces challenges related to interest rate volatility, credit risk, and liquidity management. However, the company’s strategic repositioning and focus on higher-yielding assets present opportunities for growth. Investors should closely monitor the company’s ability to manage its portfolio effectively and navigate the complex macroeconomic environment.

Overall Assessment: Hold. The company’s strategic direction is promising, but the risks associated with its financing arrangements and the uncertain economic outlook warrant a cautious approach.

Recommendations:

Monitor the company’s progress in executing its strategic repositioning.
Assess the company’s ability to manage its leverage and hedging strategies effectively.
Evaluate the company’s performance in a rising interest rate environment.

Financial Ratio and Metric Analysis

Profitability

Gross Profit Margin

Ratio/Metric: Not applicable. As a mortgage REIT, gross profit margin is not a standard metric.

Operating Profit Margin

Ratio/Metric: Operating Income / Total Revenue = (-$92,917) / ($401,280 – $317,425 – $42,841 – $42,236) = -110.8%
Trend: In 2023, Operating Profit Margin = (-$77,724) / ($258,660 – $192,134 – $31,302 – $39,431) = -116.8%. The operating profit margin increased by 6%.
Industry: The average operating profit margin for mortgage REITs is around 30%. NYMT’s negative operating profit margin indicates significant underperformance compared to its peers.

Net Profit Margin

Ratio/Metric: Net Income / Total Revenue = (-$62,029) / ($401,280 – $317,425 – $42,841 – $42,236) = -74%
Trend: In 2023, Net Profit Margin = (-$48,665) / ($258,660 – $192,134 – $31,302 – $39,431) = -73.1%. The net profit margin decreased by 0.9%.
Industry: The average net profit margin for mortgage REITs is around 20%. NYMT’s negative net profit margin indicates significant underperformance compared to its peers.

Return on Assets (ROA)

Ratio/Metric: Net Income / Average Total Assets = (-$62,029) / (($9,217,282 + $7,401,328)/2) = -0.75%
Trend: In 2023, ROA = (-$48,665) / (($7,401,328 + $6,240,745)/2) = -0.71%. The ROA decreased by 0.04%.
Industry: The average ROA for mortgage REITs is around 1-2%. NYMT’s negative ROA indicates significant underperformance compared to its peers.

Return on Equity (ROE)

Ratio/Metric: Net Income / Average Stockholders’ Equity = (-$62,029) / (($1,394,720 + $1,579,612)/2) = -4.18%
Trend: In 2023, ROE = (-$48,665) / (($1,579,612 + $1,767,216)/2) = -2.92%. The ROE decreased by 1.26%.
Industry: The average ROE for mortgage REITs is around 8-10%. NYMT’s negative ROE indicates significant underperformance compared to its peers.

Earnings Per Share (EPS) – Basic and Diluted

Ratio/Metric: Basic EPS = Net Income Attributable to Common Stockholders / Weighted Average Shares Outstanding (Basic) = (-$103,785) / 90,815 = -$1.14
Trend: In 2023, Basic EPS = (-$90,035) / 91,042 = -$0.99. The EPS decreased by $0.15.
Industry: The EPS varies widely among mortgage REITs, but a negative EPS indicates poor performance.

Ratio/Metric: Diluted EPS = Net Income Attributable to Common Stockholders / Weighted Average Shares Outstanding (Diluted) = (-$103,785) / 90,815 = -$1.14
Trend: In 2023, Diluted EPS = (-$90,035) / 91,042 = -$0.99. The EPS decreased by $0.15.
Industry: The EPS varies widely among mortgage REITs, but a negative EPS indicates poor performance.

Liquidity

Current Ratio

Ratio/Metric: Current Assets / Current Liabilities. To calculate this, we need to identify current assets and liabilities.
Current Assets = Cash and cash equivalents ($167,422) + Assets of disposal group held for sale ($118,613) + Investment securities available for sale, at fair value ($3,828,544) = $4,114,579
Current Liabilities = Repurchase agreements ($4,012,225) + Liabilities of disposal group held for sale ($97,065) = $4,109,290
Current Ratio = $4,114,579 / $4,109,290 = 1.00
Trend: To determine the trend, we would need the Current Ratio from the previous comparable period, which is not provided in the filing.
Industry: A current ratio of 1.00 is generally considered adequate for mortgage REITs, as they rely heavily on short-term financing.

Quick Ratio (Acid-Test Ratio)

Ratio/Metric: (Current Assets – Inventory) / Current Liabilities. Since NYMT is not a retail or manufacturing company, inventory is not applicable.
Quick Ratio = $4,114,579 / $4,109,290 = 1.00
Trend: To determine the trend, we would need the Quick Ratio from the previous comparable period, which is not provided in the filing.
Industry: A quick ratio of 1.00 is generally considered adequate for mortgage REITs, as they rely heavily on short-term financing.

Cash Ratio

Ratio/Metric: Cash and Cash Equivalents / Current Liabilities = $167,422 / $4,109,290 = 0.04
Trend: To determine the trend, we would need the Cash Ratio from the previous comparable period, which is not provided in the filing.
Industry: A cash ratio of 0.04 is low, indicating that NYMT has very little cash to cover its short-term liabilities.

Solvency/Leverage

Debt-to-Equity Ratio

Ratio/Metric: Total Liabilities / Total Stockholders’ Equity = $7,806,148 / $1,394,720 = 5.60
Trend: In 2023, Debt-to-Equity Ratio = $5,773,202 / $1,579,612 = 3.66. The Debt-to-Equity Ratio increased by 1.94.
Industry: The average debt-to-equity ratio for mortgage REITs is around 3-5. NYMT’s high debt-to-equity ratio indicates that it is highly leveraged.

Debt-to-Assets Ratio

Ratio/Metric: Total Liabilities / Total Assets = $7,806,148 / $9,217,282 = 0.85
Trend: In 2023, Debt-to-Assets Ratio = $5,773,202 / $7,401,328 = 0.78. The Debt-to-Assets Ratio increased by 0.07.
Industry: The average debt-to-assets ratio for mortgage REITs is around 0.7-0.8. NYMT’s high debt-to-assets ratio indicates that a significant portion of its assets are financed by debt.

Interest Coverage Ratio (Times Interest Earned)

Ratio/Metric: Earnings Before Interest and Taxes (EBIT) / Interest Expense = (-$92,917 + $317,425) / $317,425 = 0.71
Trend: In 2023, Interest Coverage Ratio = (-$77,724 + $192,134) / $192,134 = 0.59. The Interest Coverage Ratio increased by 0.12.
Industry: The average interest coverage ratio for mortgage REITs is around 1.5-2. NYMT’s low interest coverage ratio indicates that it has difficulty paying its interest expenses.

Activity/Efficiency

Inventory Turnover

Ratio/Metric: Not applicable. As a mortgage REIT, inventory turnover is not a relevant metric.

Days Sales Outstanding (DSO)

Ratio/Metric: Not applicable. As a mortgage REIT, DSO is not a relevant metric.

Days Payable Outstanding (DPO)

Ratio/Metric: Not applicable. As a mortgage REIT, DPO is not a relevant metric.

Asset Turnover

Ratio/Metric: Total Revenue / Average Total Assets = ($401,280 – $317,425 – $42,841 – $42,236) / (($9,217,282 + $7,401,328)/2) = 0.0001%
Trend: In 2023, Asset Turnover = ($258,660 – $192,134 – $31,302 – $39,431) / (($7,401,328 + $6,240,745)/2) = -0.00008%. The Asset Turnover increased by 0.00018%.
Industry: The average asset turnover for mortgage REITs is around 0.5-1. NYMT’s low asset turnover indicates that it is not efficiently using its assets to generate revenue.

Valuation

Price-to-Earnings Ratio (P/E)

Ratio/Metric: Stock Price / EPS = $25.18 / (-$1.14) = -22.09
Trend: In 2023, P/E Ratio = $25.18 / (-$0.99) = -25.43. The P/E Ratio increased by 3.34.
Industry: The P/E ratio varies widely among mortgage REITs, but a negative P/E ratio indicates that the company is not profitable.

Price-to-Book Ratio (P/B)

Ratio/Metric: Stock Price / Book Value per Share = $25.18 / $9.28 = 2.71
Trend: In 2023, P/B Ratio = $25.18 / $11.31 = 2.23. The P/B Ratio increased by 0.48.
Industry: The average P/B ratio for mortgage REITs is around 1. While a P/B ratio above 1 can indicate overvaluation, it’s not uncommon for REITs to trade above book value.

Price-to-Sales Ratio (P/S)

Ratio/Metric: Market Capitalization / Total Revenue. Market Cap is not provided, so we will calculate it using shares outstanding and stock price.
Market Cap = 90,575 * $25.18 = $2,280,693.5
P/S Ratio = $2,280,693.5 / ($401,280 – $317,425 – $42,841 – $42,236) = -27.24
Trend: To determine the trend, we would need the P/S Ratio from the previous comparable period, which is not provided in the filing.
Industry: The P/S ratio varies widely among mortgage REITs, but a negative P/S ratio indicates that the company is not profitable.

Enterprise Value to EBITDA (EV/EBITDA)

Ratio/Metric: (Market Cap + Total Debt – Cash) / EBITDA.
Market Cap = 90,575 * $25.18 = $2,280,693.5
Total Debt = $4,012,225 + $2,978,444 + $159,196 + $45,000 + $366,606 = $7,561,471
Cash = $167,422
EBITDA = Net Income + Interest Expense + Taxes + Depreciation and Amortization = (-$62,029) + $317,425 + $1,036 + $39,822 = $296,254
EV = $2,280,693.5 + $7,561,471 – $167,422 = $9,674,742.5
EV/EBITDA = $9,674,742.5 / $296,254 = 32.66
Trend: To determine the trend, we would need the EV/EBITDA from the previous comparable period, which is not provided in the filing.
Industry: The average EV/EBITDA for mortgage REITs is around 10-15. NYMT’s high EV/EBITDA indicates that it may be overvalued.

Growth Rates

Revenue Growth

Ratio/Metric: (Current Revenue – Previous Revenue) / Previous Revenue = (($401,280 – $317,425 – $42,841 – $42,236) – ($258,660 – $192,134 – $31,302 – $39,431)) / ($258,660 – $192,134 – $31,302 – $39,431) = 26.1%
Industry: The revenue growth varies widely among mortgage REITs.

Net Income Growth

Ratio/Metric: (Current Net Income – Previous Net Income) / Previous Net Income = ((-$62,029) – (-$48,665)) / (-$48,665) = -27.5%
Industry: The net income growth varies widely among mortgage REITs.

EPS Growth

Ratio/Metric: (Current EPS – Previous EPS) / Previous EPS = ((-$1.14) – (-$0.99)) / (-$0.99) = -15.2%
Industry: The EPS growth varies widely among mortgage REITs.

Other Relevant Metrics

Adjusted Book Value per Common Share

Ratio/Metric: Adjusted book value per common share at the end of the period = $10.35
Trend: Adjusted book value per common share at the end of the period in 2023 = $12.66. The adjusted book value per common share decreased by $2.31.
Significance: This metric attempts to provide a more accurate representation of the company’s net asset value by adjusting for certain non-cash items.

Company Recourse Leverage Ratio

Ratio/Metric: Company Recourse Leverage Ratio = 3.0x
Trend: Company Recourse Leverage Ratio in 2023 = 1.6x. The Company Recourse Leverage Ratio increased by 1.4x.
Significance: This ratio measures the company’s leverage based on its recourse liabilities.

Portfolio Recourse Leverage Ratio

Ratio/Metric: Portfolio Recourse Leverage Ratio = 2.9x
Trend: Portfolio Recourse Leverage Ratio in 2023 = 1.5x. The Portfolio Recourse Leverage Ratio increased by 1.4x.
Significance: This ratio measures the leverage of the company’s investment portfolio based on its recourse liabilities.

Commentary

NYMT’s financial performance in 2024 was weak, characterized by negative profitability metrics and a high debt burden. The company experienced a net loss, negative ROA and ROE, and a low interest coverage ratio, indicating financial distress. While revenue increased, expenses outpaced this growth, leading to a decline in net income. The high debt-to-equity and debt-to-assets ratios suggest a highly leveraged position, increasing the company’s vulnerability to market fluctuations.