New York Mortgage reports Q3 EPS ($1.04), consensus 10c

Reports Q3 revenue $16.79M , consensus $21.1M. Jason Serrano, Chief Executive Officer, commented: “Fixed income investment valuations suffered in the third quarter against heightened rate volatility, leading to low transaction volumes across the credit spectrum. With higher rates, negative investor sentiment poured into the market, bringing asset values lower. As a result, our adjusted book value declined by 9.71% in the third quarter, led by lower asset valuations and impairment losses related to our multi-family joint venture equity portfolio. Over a year ago, management determined to reduce credit exposure by allowing our short duration credit portfolio to organically run-off. As a result, the Company’s credit portfolio declined by $1.0 billion year-over-year from the end of the third quarter of 2022. This strategy has allowed us to build out an accretive, high coupon Agency RMBS portfolio which drove Company interest income up 15% from the prior quarter. With Agency RMBS spreads at one of the widest levels since 2008, we believe we can continue to meaningfully expand interest earnings. In an economic downturn, we believe book value and liquidity will be supported with increased exposure to Agency RMBS. Against a myriad of challenges, U.S. consumers may have exhausted their ability to keep the U.S. economy out of recession. We believe the decisive actions taken by the Company over the past 18 months to reposition the portfolio and reduce credit exposure will enable the Company to provide long-term, sustainable value in a likely downturn.”