New York Mortgage Trust, Inc.

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the New York Mortgage Trust fourth quarter and full year 2020 results conference call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. If you have a question, please press the star followed by the one on your touchtone telephone. If you would like to withdraw your question, please press the pound key. If you are using speaker equipment, we do ask that you please lift the handset before making your selection. This conference is being recorded on Thursday, February 25th, 2021. A press release and supplemental financial presentation with New York Mortgage Trust's fourth quarter and full year 2020 results was released yesterday. Both the press release and supplemental financial presentation are available on the company's website at www.nymtrust.com. Additionally, we are hosting a live webcast of today's call, which you can access in the events and presentation section of the company's website. At this time, management would like me to inform you that certain statements made during the conference call, which are not historical, may be deemed forward-looking statements within the meeting of the Private Securities Litigation Reform Act of 1995. Although New York Mortgage Trust believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, It can give no assurance that its expectations will be attained. Factors and risks that could cause actual results to differ materially from expectations are detailed in yesterday's press release and from time to time in the company's filings with the Securities and Exchange Commission. Now, at this time, I would like to introduce Steve Mumma, Chairman and CEO. Steve, please go ahead.

Thank you, Operator. Good morning, everyone, and thank you for being on the call. Jason Serrano, our president, will be speaking to our investment portfolio strategy today, and Christine Nario, CFO, will be speaking in more detail about the fourth quarter results. We will all be speaking to our supplemental financial presentation that was released yesterday after the market closed and is currently available on our website. We will allow questions following the conclusion of our presentation. The company had a solid fourth quarter results, delivering 19 cents gap earnings per share and and 22 cents comprehensive earnings per share. As of December 31st, 2020, the company's book value per common share was $4.71, up 3% from the prior quarter, resulting in an economic return of 5% for the quarter. During the fourth quarter, the company was able to build on positive momentum from the prior two quarters, executing longer-term financing through residential securitization and expanding its investment portfolio to its highest level since March 2020. Past year was a difficult and challenging time for our company, as well as many other mortgage REITs. Over a three-week span in March, we experienced unprecedented liquidity constraints on many of our credit asset classes as a direct result of the market disruption caused by the COVID-19 pandemic. These constraints across markets created a valuation gap that further drove down values, and in many cases, disconnected from the fundamentals of the underlying assets. and generated historic levels of margin calls from our financing counterparties. Through the coordinated effort of our investment professionals, we were able to reposition the portfolio and stabilize the balance sheet, but not before incurring sizable losses. These quick actions did allow us to maintain a large portion of our credit portfolio, where we saw significant price improvements for those assets during the balance of the year. The company was able to trim the total economic return to a negative 15 percent for the year, and improvement from a negative 32% at the end of the first quarter. While the total economic return for 2020 on an absolute basis is disappointing, I'm proud of our team and the way we've performed throughout the year. Now going to the presentation, I will start on slide six. Our investment portfolio totaled $3.2 billion at year end, up approximately $400 million from the previous quarter. Our total market capitalization was $1.9 million, an increase of approximately $500 million from the previous quarter. Our capital is currently allocated at 71% to single family and 25% to multifamily. Our portfolio growth has been focused on loan investments instead of QSIP securities, as we believe we can generate better risk-adjusted returns with more stable funding. Jason will speak later to this in the presentation. We remain at 57 professionals. still mostly working from home and running our business with minimal disruptions. On slide seven are some fourth quarter key developments. Our book value, as I said before, was $4.71 at the end of the period, an increase of approximately 3% from the previous quarter. We declared a common stock dividend of 10 cents, an increase of 2.5 cents per share for the previous quarter, bringing our dividend yield to 10.8% at year-end closing price and currently 9.4% as yesterday's closing price. We continue to strengthen our liabilities by completing our third securitization of the year, which was our second residential loan securitization for a total of $364 million, reducing our mark-to-market debt, releasing excess margin, and adding some additional liquidity to the company. We ended the year with a portfolio leverage of 0.2 times, down significantly from 1.4 times as of December 31, 2019. On slide 9, we cover key portfolio metrics on a quarter-over-quarter comparison. Our net margin for the quarter was 2.3%, an increase of 12 basis points from the previous quarter. Our asset yields increased 54 basis points, largely due to the continued rotation out of lower-yielding, fully-valued Q-SIB securities into higher-yielding residential multifamily loans. The increase in asset yield was partially offset by an increase in financing costs of 42 basis points. The increase was due to several factors, the addition of a non-mark-to-market residential repo line, the previously mentioned third securitization, and an increased cost from our residential loan warehouse lines that renewed in the fourth quarter. We would expect to see improved costs going forward as we look to complete two additional securitizations in the coming months, as spreads have tightened significantly since our fourth quarter securitization. We will continue to focus on ways to extend maturities and decrease our exposure to mark-to-market call risk back to the companies. Christine Naria, our CFO, will now go over our financial results in more detail. Christine.

Thank you, Steve. Good morning, everyone, and thank you again for being on the call. In discussing the financial results for the quarter, I will be using some of the information from the quarterly comparative financial information section included in slides 21 to 28 of the presentation. Slide 10 summarizes our activity in the fourth quarter. We purchased residential loans for approximately $320 million agency RMBS for approximately $139 million, and closed on $31 million of multifamily loan investments. We had net income of $70 million and comprehensive income of $83 million attributable to our common stockholders. Our book value ended at $471, an increase of 3% from the third quarter. Slide 11 details our financial results. We had net interest income of $26 million, an increase of $0.4 million from the previous quarter. Our interest income increased by $1 million, primarily due to increased investment in higher-yielding business-purpose loans, offset by a $0.6 million increase in interest expense, which can be attributed to higher borrowing costs in the fourth quarter associated with a non-mark-to-market repurchase agreement and non-recourse securitization transactions that we entered to to finance our residential loans. We had non-interest income of $67.3 million, mostly from net unrealized gains of $52.5 million due to improved pricing on our residential loans, multifamily loans and investment securities, and $12.1 million of income generated from our multifamily and residential equity investments. We had total G&A of $9.7 million, a decrease of approximately $0.5 million from the previous quarter. The decrease can be attributed to reduction in annual incentive compensation, as the company did not achieve its annual quantitative performance targets. We would expect our G&A expenses to be between $11 to $11.5 million per quarter going forward. We had operating expenses of $3.5 million during the quarter, primarily related to our investing activities in residential loans and direct multifamily lending. The graph on slide 11 illustrates the change in our book value from December 31, 2019. Our book value increased 3% during the quarter and 21% from the end of the first quarter. Although we sold assets and delivered our portfolio in response to the COVID-19 related market disruption, we avoided some of the larger scale for selling and that occurred during the first quarter, allowing us to retain assets whose pricing significantly improved throughout the remainder of the year. and contributed to the increase in our book value. Jason will now go over the market and strategy update. Jason.