New York Mortgage Trust, Inc. (NASDAQ:NYMT) Q3 2023 Earnings Call Transcript

Matthew Erdner: Hey, good morning, guys. And thanks for taking the question. In terms of capital deployment, what do you see as giving you the best return on capital right now? Is it MBS, which you guys have obviously built a good position there, sharing purchases or possibly some distressed opportunities down the road?

Nick Ma: Sure. And this is Nick. We see a lot of value in the agency MBS strategy. We think that this is opportune time that may not persist forever, but we want to be able to deploy into this space. Relating to other uses of capital, within credit, we do believe that there is a potential for more credit distress, more delinquencies, and more changes in expectation in terms of overall losses across the credit spectrum. So because of that, delving headfirst into credit is not something we would do at this juncture. With that said, though, we do not mind participating in certain asset classes, such as BPL Bridge, which offers shorter duration type profiles.

Matthew Erdner: Gotcha. That’s helpful. And then on the MBS, I believe the current leverage right now is 8.5 as a quarter end. Where do you ideally want to run that portfolio in terms of leverage? And then how high are you guys willing to take it? Thanks.

Nick Ma: Sure. So 8.5 is in the eights, eight multiples in terms of leverage is a very comfortable level for us. And really, we’re looking at it from the context of just the overall portfolio in general. We are under levered and we have unencumbered assets, available cash, and also cash that is freed up from divestitures of other assets. And because of that, we do not mind running the agency strategy with a little bit more leverage in the context of just the overall leverage profile of the firm; so the eight times we feel comfortable there and we do expect that to be probably the level that we’re going to be running it somewhere between eight times to nine times for the time being.

Operator: Thank you. I would now like to pass back to Jason Serrano for closing remarks.

Jason Serrano: Thank you for joining today’s earnings call. We look forward to speaking with you on our fourth quarter earnings early next year. Have a great day.

Operator: Thank you. This now does conclude today’s call. You may now disconnect. Thank you.