(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
Title of Each Class | Trading Symbols) | Name of Each Exchange on Which Registered | |||
Stock Market | |||||
Stock Market | |||||
Stock Market | |||||
Stock Market | |||||
Stock Market |
☒ | Accelerated Filer | ☐ | Non-Accelerated Filer | ☐ | Smaller Reporting Company | Emerging Growth Company |
September 30, 2019 | December 31, 2018 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Investment securities, available for sale, at fair value | $ | $ | |||||
Distressed and other residential mortgage loans, at fair value | |||||||
Distressed and other residential mortgage loans, net | |||||||
Investments in unconsolidated entities | |||||||
Preferred equity and mezzanine loan investments | |||||||
Multi-family loans held in securitization trusts, at fair value | |||||||
Derivative assets | |||||||
Cash and cash equivalents | |||||||
Real estate held for sale in consolidated variable interest entities | |||||||
Goodwill | |||||||
Receivables and other assets | |||||||
Total Assets (1) | $ | $ | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Liabilities: | |||||||
Repurchase agreements | $ | $ | |||||
Residential collateralized debt obligations | |||||||
Multi-family collateralized debt obligations, at fair value | |||||||
Convertible notes | |||||||
Subordinated debentures | |||||||
Mortgages and notes payable in consolidated variable interest entities | |||||||
Securitized debt | |||||||
Accrued expenses and other liabilities | |||||||
Total liabilities (1) | |||||||
Commitments and Contingencies | |||||||
Stockholders' Equity: | |||||||
Preferred stock, $0.01 par value, 7.75% Series B cumulative redeemable, $25 liquidation preference per share, 6,000,000 shares authorized, 3,138,019 and 3,000,000 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively | |||||||
Preferred stock, $0.01 par value, 7.875% Series C cumulative redeemable, $25 liquidation preference per share, 6,600,000 and 4,140,000 shares authorized as of September 30, 2019 and December 31, 2018, respectively, 4,144,161 and 3,600,000 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively | |||||||
Preferred stock, $0.01 par value, 8.00% Series D Fixed-to-Floating Rate cumulative redeemable, $25 liquidation preference per share, 8,400,000 and 5,750,000 shares authorized as of September 30, 2019 and December 31, 2018, respectively, 5,968,527 and 5,400,000 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively | |||||||
Common stock, $0.01 par value, 400,000,000 shares authorized, 262,621,039 and 155,589,528 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively | |||||||
Additional paid-in capital | |||||||
Accumulated other comprehensive income (loss) | ( | ) | |||||
Accumulated deficit | ( | ) | ( | ) | |||
Company's stockholders' equity | |||||||
Non-controlling interest in consolidated variable interest entities | ( | ) | |||||
Total equity | |||||||
Total Liabilities and Stockholders' Equity | $ | $ |
(1) | Our condensed consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs") as the Company is the primary beneficiary of these VIEs. As of September 30, 2019 and December 31, 2018, assets of consolidated VIEs totaled $ |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
INTEREST INCOME: | |||||||||||||||
Investment securities and other interest earning assets | $ | $ | $ | $ | |||||||||||
Distressed and other residential mortgage loans | |||||||||||||||
Preferred equity and mezzanine loan investments | |||||||||||||||
Multi-family loans held in securitization trusts | |||||||||||||||
Total interest income | |||||||||||||||
INTEREST EXPENSE: | |||||||||||||||
Repurchase agreements and other interest bearing liabilities | |||||||||||||||
Residential collateralized debt obligations | |||||||||||||||
Multi-family collateralized debt obligations | |||||||||||||||
Convertible notes | |||||||||||||||
Subordinated debentures | |||||||||||||||
Securitized debt | |||||||||||||||
Total interest expense | |||||||||||||||
NET INTEREST INCOME | |||||||||||||||
NON-INTEREST INCOME: | |||||||||||||||
Recovery of loan losses | |||||||||||||||
Realized gains (losses), net | ( | ) | |||||||||||||
Unrealized gains (losses), net | |||||||||||||||
Loss on extinguishment of debt | ( | ) | |||||||||||||
Income from real estate held for sale in consolidated variable interest entities | |||||||||||||||
Other income | |||||||||||||||
Total non-interest income | |||||||||||||||
GENERAL, ADMINISTRATIVE AND OPERATING EXPENSES: | |||||||||||||||
General and administrative expenses | |||||||||||||||
Base management and incentive fees | ( | ) | |||||||||||||
Expenses related to distressed and other residential mortgage loans | |||||||||||||||
Expenses related to real estate held for sale in consolidated variable interest entities | |||||||||||||||
Total general, administrative and operating expenses | |||||||||||||||
INCOME FROM OPERATIONS BEFORE INCOME TAXES | |||||||||||||||
Income tax benefit | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
NET INCOME | |||||||||||||||
Net loss (income) attributable to non-controlling interest in consolidated variable interest entities | ( | ) | ( | ) | |||||||||||
NET INCOME ATTRIBUTABLE TO COMPANY | |||||||||||||||
Preferred stock dividends | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
NET INCOME ATTRIBUTABLE TO COMPANY'S COMMON STOCKHOLDERS | $ | $ | $ | $ | |||||||||||
Basic earnings per common share | $ | $ | $ | $ | |||||||||||
Diluted earnings per common share | $ | $ | $ | $ | |||||||||||
Weighted average shares outstanding-basic | |||||||||||||||
Weighted average shares outstanding-diluted |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
NET INCOME ATTRIBUTABLE TO COMPANY'S COMMON STOCKHOLDERS | $ | $ | $ | $ | |||||||||||
OTHER COMPREHENSIVE INCOME (LOSS) | |||||||||||||||
Increase (decrease) in fair value of available for sale securities | ( | ) | ( | ) | |||||||||||
Reclassification adjustment for net gain included in net income | ( | ) | ( | ) | |||||||||||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS) | ( | ) | ( | ) | |||||||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMPANY'S COMMON STOCKHOLDERS | $ | $ | $ | $ |
For the Three Months Ended | |||||||||||||||||||||||||||||||
Common Stock | Preferred Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income (Loss) | Total Company Stockholders' Equity | Non-Controlling Interest in Consolidated VIE | Total | ||||||||||||||||||||||||
Balance, June 30, 2019 | $ | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||||||||||||
Net income | — | — | — | — | ( | ) | |||||||||||||||||||||||||
Common stock issuance, net | — | — | — | — | |||||||||||||||||||||||||||
Preferred stock issuance, net | — | — | — | — | — | ||||||||||||||||||||||||||
Dividends declared on common stock | — | — | — | ( | ) | — | ( | ) | — | ( | ) | ||||||||||||||||||||
Dividends declared on preferred stock | — | — | — | ( | ) | — | ( | ) | — | ( | ) | ||||||||||||||||||||
Reclassification adjustment for net gain included in net income | — | — | — | — | ( | ) | ( | ) | — | ( | ) | ||||||||||||||||||||
Increase in fair value of available for sale securities | — | — | — | — | — | ||||||||||||||||||||||||||
Balance, September 30, 2019 | $ | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ |
Balance, June 30, 2018 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | |||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||
Common stock issuance, net | — | — | — | — | |||||||||||||||||||||||||||
Dividends declared on common stock | — | — | — | ( | ) | — | ( | ) | ( | ) | |||||||||||||||||||||
Dividends declared on preferred stock | — | — | ( | ) | — | ( | ) | — | ( | ) | |||||||||||||||||||||
Decrease in fair value of available for sale securities | — | — | — | — | ( | ) | ( | ) | — | ( | ) | ||||||||||||||||||||
Increase in non-controlling interest in variable interest entities | — | — | — | — | — | — | |||||||||||||||||||||||||
Balance, September 30, 2018 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ |
For the Nine Months Ended | |||||||||||||||||||||||||||||||
Common Stock | Preferred Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive (Loss) Income | Total Company Stockholders' Equity | Non-Controlling Interest in Consolidated VIE | Total | ||||||||||||||||||||||||
Balance, December 31, 2018 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | |||||||||||||||||||
Net income | — | — | — | — | ( | ) | |||||||||||||||||||||||||
Common stock issuance, net | — | — | — | — | |||||||||||||||||||||||||||
Preferred stock issuance, net | — | — | — | — | — | ||||||||||||||||||||||||||
Dividends declared on common stock | — | — | — | ( | ) | — | ( | ) | — | ( | ) | ||||||||||||||||||||
Dividends declared on preferred stock | — | — | — | ( | ) | — | ( | ) | — | ( | ) | ||||||||||||||||||||
Reclassification adjustment for net gain included in net income | — | — | — | — | ( | ) | ( | ) | — | ( | ) | ||||||||||||||||||||
Increase in fair value of available for sale securities | — | — | — | — | — | ||||||||||||||||||||||||||
Decrease in non-controlling interest related to distributions from and de-consolidation of variable interest entities | — | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||
Balance, September 30, 2019 | $ | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ |
Balance, December 31, 2017 | $ | $ | $ | $ | ( | ) | $ | $ | $ | $ | |||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||
Common stock issuance, net | — | — | — | — | |||||||||||||||||||||||||||
Dividends declared on common stock | — | — | — | ( | ) | — | ( | ) | — | ( | ) | ||||||||||||||||||||
Dividends declared on preferred stock | — | — | — | ( | ) | — | ( | ) | — | ( | ) | ||||||||||||||||||||
Decrease in fair value of available for sale securities | — | — | — | — | ( | ) | ( | ) | — | ( | ) | ||||||||||||||||||||
Decrease in non-controlling interest related to distributions from and de-consolidation of variable interest entities | — | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||
Balance, September 30, 2018 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ |
For the Nine Months Ended September 30, | |||||||
2019 | 2018 | ||||||
Cash Flows from Operating Activities: | |||||||
Net income | $ | $ | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Net accretion | ( | ) | ( | ) | |||
Realized (gains) losses, net | ( | ) | |||||
Unrealized (gains) losses, net | ( | ) | ( | ) | |||
Gain on sale of real estate held for sale in consolidated variable interest entities | ( | ) | ( | ) | |||
Impairment of real estate under development in consolidated variable interest entities | |||||||
Loss on extinguishment of debt | |||||||
Recovery of loan losses | ( | ) | ( | ) | |||
Income from unconsolidated entity, preferred equity and mezzanine loan investments | ( | ) | ( | ) | |||
Distributions of income from unconsolidated entity, preferred equity and mezzanine loan investments | |||||||
Amortization of stock based compensation, net | |||||||
Changes in operating assets and liabilities: | |||||||
Receivables and other assets | ( | ) | |||||
Accrued expenses and other liabilities | |||||||
Net cash provided by operating activities | |||||||
Cash Flows from Investing Activities: | |||||||
Net proceeds from sale of real estate held for sale in consolidated variable interest entities | |||||||
Proceeds from sales of investment securities | |||||||
Purchases of investment securities | ( | ) | ( | ) | |||
Purchases of other assets | ( | ) | ( | ) | |||
Capital expenditures on real estate held for sale in consolidated variable interest entities | ( | ) | ( | ) | |||
Funding of preferred equity, equity and mezzanine loan investments | ( | ) | ( | ) | |||
Principal repayments received on preferred equity and mezzanine loan investments | |||||||
Return of capital from unconsolidated entity investments | |||||||
Proceeds from mortgage loans held for investment | |||||||
(Net payments made on) received from other derivative instruments settled during the period | ( | ) | |||||
Principal repayments and proceeds from sales and refinancing of distressed and other residential mortgage loans | |||||||
Principal repayments received on multi-family loans held in securitization trusts | |||||||
Principal paydowns on investment securities - available for sale | |||||||
Proceeds from sale of real estate owned | |||||||
Purchases of residential mortgage loans and distressed residential mortgage loans | ( | ) | ( | ) | |||
Purchases of investments held in multi-family securitization trusts | ( | ) | ( | ) | |||
Deposit for investment in a residential securitization | ( | ) | |||||
Net cash (used in) provided by investing activities | ( | ) | |||||
Cash Flows from Financing Activities: | |||||||
Net proceeds from (net payments made on) repurchase agreements | ( | ) | |||||
Common stock issuance, net | |||||||
Preferred stock issuance, net | |||||||
Dividends paid on common stock | ( | ) | ( | ) | |||
Dividends paid on preferred stock | ( | ) | ( | ) | |||
Payments made on mortgages and notes payable in consolidated variable interest entities | ( | ) | ( | ) | |||
Proceeds from mortgages and notes payable in consolidated variable interest entities | |||||||
Payments made on residential collateralized debt obligations | ( | ) | ( | ) | |||
Payments made on multi-family collateralized debt obligations | ( | ) | ( | ) | |||
Extinguishment of and payments made on securitized debt | ( | ) | ( | ) | |||
Net cash provided by (used in) financing activities | ( | ) | |||||
Net Decrease in Cash, Cash Equivalents and Restricted Cash | ( | ) | ( | ) | |||
Cash, Cash Equivalents and Restricted Cash - Beginning of Period | |||||||
Cash, Cash Equivalents and Restricted Cash - End of Period | $ | $ | |||||
Supplemental Disclosure: | |||||||
Cash paid for interest | $ | $ | |||||
Cash paid for income taxes | $ | $ | |||||
Non-Cash Investment Activities: | |||||||
Consolidation of multi-family loans held in securitization trusts | $ | $ | |||||
Consolidation of multi-family collateralized debt obligations | $ | $ | |||||
Transfer from residential loans to real estate owned | $ | $ | |||||
Non-Cash Financing Activities: | |||||||
Dividends declared on common stock to be paid in subsequent period | $ | $ | |||||
Dividends declared on preferred stock to be paid in subsequent period | $ | $ | |||||
Mortgages and notes payable assumed by purchaser of real estate held for sale in consolidated variable entities | $ | $ | |||||
Cash, Cash Equivalents and Restricted Cash Reconciliation: | |||||||
Cash and cash equivalents | $ | $ | |||||
Restricted cash included in receivables and other assets | $ | $ | |||||
Total cash, cash equivalents, and restricted cash | $ | $ |
1. | Organization |
3. | Investment Securities Available For Sale |
September 30, 2019 | December 31, 2018 | ||||||||||||||||||||||||||||||
Amortized Cost | Unrealized | Fair Value | Amortized Cost | Unrealized | Fair Value | ||||||||||||||||||||||||||
Gains | Losses | Gains | Losses | ||||||||||||||||||||||||||||
Agency RMBS | |||||||||||||||||||||||||||||||
Agency ARMs | |||||||||||||||||||||||||||||||
Freddie Mac | $ | $ | $ | ( | ) | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||
Fannie Mae | ( | ) | ( | ) | |||||||||||||||||||||||||||
Ginnie Mae | ( | ) | ( | ) | |||||||||||||||||||||||||||
Total Agency ARMs (1) | ( | ) | ( | ) | |||||||||||||||||||||||||||
Agency Fixed- Rate | |||||||||||||||||||||||||||||||
Freddie Mac | ( | ) | ( | ) | |||||||||||||||||||||||||||
Fannie Mae | ( | ) | ( | ) | |||||||||||||||||||||||||||
Total Agency Fixed-Rate | ( | ) | ( | ) | |||||||||||||||||||||||||||
Total Agency RMBS | ( | ) | ( | ) | |||||||||||||||||||||||||||
Non-Agency RMBS (1)(2)(3) | ( | ) | ( | ) | |||||||||||||||||||||||||||
CMBS (1) (2) | ( | ) | ( | ) | |||||||||||||||||||||||||||
ABS (3) | ( | ) | |||||||||||||||||||||||||||||
Total investment securities available for sale | $ | $ | $ | ( | ) | $ | $ | $ | $ | ( | ) | $ |
(1) | For the Company's Agency ARMs, non-Agency RMBS, and CMBS securities with stated reset periods, the weighted average reset periods are |
(2) | Included in CMBS is $ |
(3) | For the Company's non-Agency RMBS IOs and ABS, unrealized gains and losses are recognized in unrealized gains (losses), net on the Company's condensed consolidated statements of operations. |
Weighted Average Life | September 30, 2019 | December 31, 2018 | |||||
0 to 5 years | $ | $ | |||||
Over 5 to 10 years | |||||||
10+ years | |||||||
Total | $ | $ |
September 30, 2019 | Less than 12 months | Greater than 12 months | Total | ||||||||||||||||||||
Carrying Value | Gross Unrealized Losses | Carrying Value | Gross Unrealized Losses | Carrying Value | Gross Unrealized Losses | ||||||||||||||||||
Agency RMBS | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||
Non-Agency RMBS | ( | ) | ( | ) | ( | ) | |||||||||||||||||
CMBS | ( | ) | ( | ) | |||||||||||||||||||
Total investment securities available for sale | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) |
December 31, 2018 | Less than 12 months | Greater than 12 months | Total | ||||||||||||||||||||
Carrying Value | Gross Unrealized Losses | Carrying Value | Gross Unrealized Losses | Carrying Value | Gross Unrealized Losses | ||||||||||||||||||
Agency RMBS | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||
Non-Agency RMBS | ( | ) | ( | ) | ( | ) | |||||||||||||||||
CMBS | ( | ) | ( | ) | |||||||||||||||||||
Total investment securities available for sale | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) |
4. | Distressed and Other Residential Mortgage Loans, At Fair Value |
Principal | Premium/(Discount) | Unrealized Gains/(Losses) | Carrying Value | ||||||||||||
September 30, 2019 | $ | $ | ( | ) | $ | $ | |||||||||
December 31, 2018 | ( | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net realized gains on payoff and sale of loans | $ | $ | $ | $ | |||||||||||
Net unrealized gains (losses) | ( | ) | ( | ) |
September 30, 2019 | December 31, 2018 | ||||
California | % | % | |||
Florida | % | % | |||
Texas | % | % | |||
New York | % | % |
Fair Value | Unpaid Principal Balance | ||||||
September 30, 2019 | $ | $ | |||||
December 31, 2018 |
5. | Distressed and Other Residential Mortgage Loans, Net |
September 30, 2019 | September 30, 2018 | ||||||
Balance at beginning of period | $ | $ | |||||
Additions | |||||||
Disposals | ( | ) | ( | ) | |||
Accretion | ( | ) | ( | ) | |||
Balance at end of period (1) | $ | $ |
(1) | Accretable yield is the excess of the distressed residential mortgage loans’ cash flows expected to be collected over the purchase price. The cash flows expected to be collected represents the Company’s estimate of the amount and timing of undiscounted principal and interest cash flows. Additions include accretable yield estimates for purchases made during the period and reclassification to accretable yield from nonaccretable yield. Disposals include distressed residential mortgage loan dispositions, which include refinancing, sale and foreclosure of the underlying collateral and resulting removal of the distressed residential mortgage loans from the accretable yield, and reclassifications from accretable to nonaccretable yield. The reclassifications between accretable and nonaccretable yield and the accretion of interest income is based on various estimates regarding loan performance and the value of the underlying real estate securing the loans. As the Company continues to update its estimates regarding the loans and the underlying collateral, the accretable yield may change. Therefore, the amount of accretable income recorded in each of the nine month periods ended September 30, 2019 and 2018 is not necessarily indicative of future results. |
September 30, 2019 | December 31, 2018 | ||||
North Carolina | % | % | |||
Florida | % | % | |||
Georgia | % | % | |||
South Carolina | % | % | |||
Virginia | % | % | |||
Texas | % | % | |||
New York | % | % | |||
Ohio | % | % |
September 30, 2019 | December 31, 2018 | ||||||
Unpaid principal balance | $ | $ | |||||
Deferred origination costs – net | |||||||
Allowance for loan losses | ( | ) | ( | ) | |||
Total | $ | $ |
Nine Months Ended September 30, | |||||||
2019 | 2018 | ||||||
Balance at beginning of period | $ | $ | |||||
Provision for (recovery of) loan losses | ( | ) | |||||
Transfer to real estate owned | ( | ) | |||||
Charge-offs | ( | ) | ( | ) | |||
Balance at the end of period | $ | $ |
Days Late | Number of Delinquent Loans | Total Unpaid Principal | % of Loan Portfolio | |||||
90 + | $ | % | ||||||
Real estate owned through foreclosure | $ | % |
Days Late | Number of Delinquent Loans | Total Unpaid Principal | % of Loan Portfolio | |||||
90 + | $ | % |
September 30, 2019 | December 31, 2018 | ||||
New York | % | % | |||
Massachusetts | % | % | |||
New Jersey | % | % | |||
Florida | % | % | |||
Maryland | % | % |
6. | Consolidated K-Series |
Balance Sheets | September 30, 2019 | December 31, 2018 | |||||
Assets | |||||||
Multi-family loans held in securitization trusts, at fair value | $ | $ | |||||
Receivables | |||||||
Total Assets | $ | $ | |||||
Liabilities and Equity | |||||||
Multi-family CDOs, at fair value | $ | $ | |||||
Accrued expenses | |||||||
Total Liabilities | |||||||
Equity | |||||||
Total Liabilities and Equity | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
Statements of Operations | 2019 | 2018 | 2019 | 2018 | |||||||||||
Interest income | $ | $ | $ | $ | |||||||||||
Interest expense | |||||||||||||||
Net interest income | |||||||||||||||
Unrealized gains, net | |||||||||||||||
Net income | $ | $ | $ | $ |
September 30, 2019 | December 31, 2018 | ||||
California | % | % | |||
Texas | % | % | |||
Maryland | % | % | |||
Florida | % | % |
7. | Investments in Unconsolidated Entities |
September 30, 2019 | December 31, 2018 | |||||||||||
Investment Name | Ownership Interest | Carrying Amount | Ownership Interest | Carrying Amount | ||||||||
BBA-EP320 II, L.L.C., BBA-Ten10 II, L.L.C., and Lexington on the Green Apartments, L.L.C. (collectively) | $ | $ | ||||||||||
Somerset Deerfield Investor, LLC | ||||||||||||
RS SWD Owner, LLC, RS SWD Mitchell Owner, LLC, RS SWD IF Owner, LLC, RS SWD Mullis Owner, LLC, RS SWD JH Mullis Owner, LLC and RS SWD Saltzman Owner, LLC (collectively) | ||||||||||||
Audubon Mezzanine Holdings, L.L.C. (Series A) | ||||||||||||
EP 320 Growth Fund, L.L.C. (Series A) and Turnbury Park Apartments - BC, L.L.C. (Series A) (collectively) | ||||||||||||
Walnut Creek Properties Holdings, L.L.C. | ||||||||||||
Towers Property Holdings, LLC | ||||||||||||
Mansions Property Holdings, LLC | ||||||||||||
Sabina Montgomery Holdings, LLC - Series B and Oakley Shoals Apartments, LLC - Series A (collectively) | ||||||||||||
Gen1814, LLC - Series A, Highlands - Mtg. Holdings, LLC - Series A, and Polos at Hudson Investments, LLC - Series A (collectively) | ||||||||||||
Total - Equity Method | $ | $ |
September 30, 2019 | December 31, 2018 | |||||||||||
Investment Name | Ownership Interest | Carrying Amount | Ownership Interest | Carrying Amount | ||||||||
Joint venture equity investments in multi-family properties | ||||||||||||
Evergreens JV Holdings, LLC (1) | $ | $ | ||||||||||
The Preserve at Port Royal Venture, LLC | ||||||||||||
Equity investments in entities that invest in residential properties and loans | ||||||||||||
Morrocroft Neighborhood Stabilization Fund II, LP | ||||||||||||
Headlands Asset Management Fund III (Cayman), LP (Headlands Flagship Opportunity Fund Series I) | ||||||||||||
Total - Fair Value Option | $ | $ |
(1) | The Company's equity investment was redeemed during the three months ended September 30, 2019. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Investment Name | 2019 | 2018 | 2019 | 2018 | ||||||||||||
BBA-EP320 II, L.L.C., BBA-Ten10 II, L.L.C., and Lexington on the Green Apartments, L.L.C. (collectively) | $ | $ | $ | $ | ||||||||||||
Somerset Deerfield Investor, LLC | ||||||||||||||||
RS SWD Owner, LLC, RS SWD Mitchell Owner, LLC, RS SWD IF Owner, LLC, RS SWD Mullis Owner, LLC, RS SWD JH Mullis Owner, LLC and RS SWD Saltzman Owner, LLC (collectively) | ||||||||||||||||
Audubon Mezzanine Holdings, L.L.C. (Series A) | ||||||||||||||||
EP 320 Growth Fund, L.L.C. (Series A) and Turnbury Park Apartments - BC, L.L.C. (Series A) (collectively) | ||||||||||||||||
Walnut Creek Properties Holdings, L.L.C. | ||||||||||||||||
Towers Property Holdings, LLC | ||||||||||||||||
Mansions Property Holdings, LLC | ||||||||||||||||
Sabina Montgomery Holdings, LLC - Series B and Oakley Shoals Apartments, LLC - Series A (collectively) | ||||||||||||||||
Gen1814, LLC - Series A, Highlands - Mtg. Holdings, LLC - Series A, and Polos at Hudson Investments, LLC - Series A (collectively) |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Investment Name | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Joint venture equity investments in multi-family properties | ||||||||||||||||
Evergreens JV Holdings, LLC (1) | $ | $ | $ | $ | ||||||||||||
The Preserve at Port Royal Venture, LLC | ||||||||||||||||
WR Savannah Holdings, LLC (2) | ||||||||||||||||
Equity investments in entities that invest in residential properties and loans | ||||||||||||||||
Morrocroft Neighborhood Stabilization Fund II, LP | ||||||||||||||||
Headlands Asset Management Fund III (Cayman), LP (Headlands Flagship Opportunity Fund Series I) |
(1) | Includes income recognized from redemption of the Company's investment during the three and nine months ended September 30, 2019. |
(2) |
8. | Preferred Equity and Mezzanine Loan Investments |
September 30, 2019 | December 31, 2018 | ||||||
Investment amount | $ | $ | |||||
Deferred loan fees, net | ( | ) | ( | ) | |||
Total | $ | $ |
September 30, 2019 | December 31, 2018 | ||||
Tennessee | % | % | |||
Georgia | % | % | |||
Texas | % | % | |||
Alabama | % | % | |||
Florida | % | % | |||
South Carolina | % | % | |||
Virginia | % | % | |||
New Jersey | % | % |
9. | Use of Special Purpose Entities (SPE) and Variable Interest Entities (VIE) |
• | whether the Company has both the power to direct the activities that most significantly impact the economic performance of the VIE; and |
• | whether the Company has a right to receive benefits or absorb losses of the entity that could be potentially significant to the VIE. |
Financing VIE | Other VIEs | ||||||||||||||
Residential Mortgage Loan Securitization | Consolidated K-Series | Other | Total | ||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | |||||||||||
Residential mortgage loans held in securitization trusts, net | — | — | |||||||||||||
Multi-family loans held in securitization trusts, at fair value | — | — | |||||||||||||
Receivables and other assets | |||||||||||||||
Total assets | $ | $ | $ | $ | |||||||||||
Residential collateralized debt obligations | $ | $ | $ | $ | |||||||||||
Multi-family collateralized debt obligations, at fair value | — | — | |||||||||||||
Mortgages and notes payable in consolidated variable interest entities | — | — | |||||||||||||
Accrued expenses and other liabilities | |||||||||||||||
Total liabilities | $ | $ | $ | $ |
Financing VIEs | Other VIEs | ||||||||||||||||||||||
Multi-family CMBS Re- securitization (1) | Distressed Residential Mortgage Loan Securitization (2) | Residential Mortgage Loan Securitization | Consolidated K-Series (3) | Other | Total | ||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Investment securities available for sale, at fair value held in securitization trusts | — | — | — | — | |||||||||||||||||||
Residential mortgage loans held in securitization trusts, net | — | — | — | — | |||||||||||||||||||
Distressed residential mortgage loans held in securitization trusts, net | — | — | — | — | |||||||||||||||||||
Multi-family loans held in securitization trusts, at fair value | — | — | — | ||||||||||||||||||||
Real estate held for sale in consolidated variable interest entities | — | — | — | — | |||||||||||||||||||
Receivables and other assets | |||||||||||||||||||||||
Total assets | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Residential collateralized debt obligations | $ | — | $ | — | $ | $ | — | $ | — | $ | |||||||||||||
Multi-family collateralized debt obligations, at fair value | — | — | — | ||||||||||||||||||||
Securitized debt | — | — | — | ||||||||||||||||||||
Mortgages and notes payable in consolidated variable interest entities | — | — | — | — | |||||||||||||||||||
Accrued expenses and other liabilities | |||||||||||||||||||||||
Total liabilities | $ | $ | $ | $ | $ | $ |
(1) | The Company classified the multi-family CMBS issued by |
(2) | The Company engaged in this transaction for the purpose of financing certain distressed residential mortgage loans acquired by the Company. The distressed residential mortgage loans serving as collateral for the financing are comprised of re-performing and, to a lesser extent, non-performing and other delinquent mortgage loans secured by first liens on one- to four- family properties. Balances as of December 31, 2018 are related to a securitization transaction that closed in April 2016 that involved the issuance of $ |
(3) |
Multi-family CMBS Re-securitization (1) | Distressed Residential Mortgage Loan Securitization | ||||||
Principal Amount at December 31, 2018 | $ | $ | |||||
Carrying Value at December 31, 2018 (2) | $ | $ | |||||
Pass-through rate of notes issued | % | % |
(1) | The Company engaged in the re-securitization transaction primarily for the purpose of obtaining non-recourse financing on a portion of its multi-family CMBS portfolio. As a result of engaging in this transaction, the Company remained economically exposed to the first loss position on the underlying multi-family CMBS transferred to the Consolidated VIE. |
(2) | Presented net of unamortized deferred costs of $ |
Scheduled Maturity (principal amount) | December 31, 2018 | ||
Within 24 months | $ | ||
Over 24 months to 36 months | |||
Over 36 months | |||
Total | |||
Discount | ( | ) | |
Debt issuance cost | ( | ) | |
Carrying value | $ |
September 30, 2019 | |||||||||||||||
Investment securities, available for sale, at fair value | Preferred equity and mezzanine loan investments | Investments in unconsolidated entities | Total | ||||||||||||
ABS | $ | $ | $ | $ | |||||||||||
Preferred equity investments in multi-family properties | |||||||||||||||
Mezzanine loans on multi-family properties | |||||||||||||||
Equity investments in entities that invest in residential properties and loans | |||||||||||||||
Total assets | $ | $ | $ | $ |
December 31, 2018 | |||||||||||||||||||
Investment securities, available for sale, at fair value, held in securitization trusts | Receivables and other assets | Preferred equity and mezzanine loan investments | Investments in unconsolidated entities | Total | |||||||||||||||
Multi-family CMBS | $ | $ | $ | $ | $ | ||||||||||||||
Preferred equity investments in multi-family properties | |||||||||||||||||||
Mezzanine loans on multi-family properties | |||||||||||||||||||
Equity investments in entities that invest in residential properties | |||||||||||||||||||
Total assets | $ | $ | $ | $ | $ |
10. | Real Estate Held for Sale in Consolidated VIEs |
December 31, 2018 | |||
Land | $ | ||
Building and improvements | |||
Furniture, fixtures and equipment | |||
Lease intangible | |||
Real estate held for sale before accumulated depreciation and amortization | |||
Accumulated depreciation | ( | ) | |
Accumulated amortization of lease intangible | ( | ) | |
Real estate held for sale in consolidated variable interest entities | $ |
11. | Derivative Instruments and Hedging Activities |
Type of Derivative Instrument | Balance Sheet Location | September 30, 2019 | December 31, 2018 | |||||||
Interest rate swaps (1) | Derivative assets | $ | $ |
(1) | All of the Company's interest rate swaps outstanding are cleared through a central clearing house. The Company exchanges variation margin for swaps based upon daily changes in fair value. As a result of amendments to rules governing certain central clearing activities, the exchange of variation margin is treated as a legal settlement of the exposure under the swap contract. Previously, such payments were treated as cash collateral pledged against the exposure under the swap contract. Accordingly, the Company accounted for the receipt or payment of variation margin as a direct reduction to or increase of the carrying value of the interest rate swap asset or liability on the Company's condensed consolidated balance sheets. Includes $ |
Notional Amount For the Nine Months Ended September 30, 2019 | ||||||||||||||||
Type of Derivative Instrument | December 31, 2018 | Additions | Settlement, Expiration or Exercise | September 30, 2019 | ||||||||||||
Interest rate swaps | $ | $ | $ | $ |
Notional Amount For the Nine Months Ended September 30, 2018 | ||||||||||||||||
Type of Derivative Instrument | December 31, 2017 | Additions | Settlement, Expiration or Exercise | September 30, 2018 | ||||||||||||
Interest rate swaps | $ | $ | $ | $ |
Three Months Ended September 30, | ||||||||
2019 | 2018 | |||||||
Interest rate swaps | $ | ( | ) | $ | ||||
Total | $ | ( | ) | $ | ||||
Nine Months Ended September 30, | ||||||||
2019 | 2018 | |||||||
Interest rate swaps | $ | ( | ) | $ | ||||
Total | $ | ( | ) | $ |
September 30, 2019 | December 31, 2018 | |||||||||||||||||||
Swap Maturities | Notional Amount | Weighted Average Fixed Interest Rate | Weighted Average Variable Interest Rate | Notional Amount | Weighted Average Fixed Interest Rate | Weighted Average Variable Interest Rate | ||||||||||||||
2024 | $ | % | % | $ | % | % | ||||||||||||||
2027 | % | % | % | % | ||||||||||||||||
2028 | % | % | % | % | ||||||||||||||||
Total | $ | % | % | $ | % | % |
12. | Repurchase Agreements |
September 30, 2019 | December 31, 2018 | ||||||||||||||||||||||
Outstanding Repurchase Agreements | Fair Value of Collateral Pledged | Amortized Cost of Collateral Pledged | Outstanding Repurchase Agreements | Fair Value of Collateral Pledged | Amortized Cost of Collateral Pledged | ||||||||||||||||||
Agency ARMs RMBS | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Agency Fixed-rate RMBS | |||||||||||||||||||||||
Non-Agency RMBS | |||||||||||||||||||||||
CMBS (1) | |||||||||||||||||||||||
Balance at end of the period | $ | $ | $ | $ | $ | $ |
(1) | Includes first loss PO, IO and mezzanine CMBS securities with a fair value amounting to $ |
Contractual Maturity | September 30, 2019 | December 31, 2018 | |||||
Within 30 days | $ | $ | |||||
Over 30 days to 90 days | |||||||
Over 90 days | |||||||
Total | $ | $ |
Maximum Aggregate Uncommitted Principal Amount | Outstanding Repurchase Agreements | Carrying Value of Loans Pledged (1) | Weighted Average Rate | Weighted Average Months to Maturity | ||||||||||||
September 30, 2019 | $ | $ | $ | % | ||||||||||||
December 31, 2018 | $ | $ | $ | % |
(1) | Includes distressed and other residential mortgage loans at fair value of $ |
13. | Debt |
NYM Preferred Trust I | NYM Preferred Trust II | ||||||
Principal value of trust preferred securities | $ | $ | |||||
Interest rate | Three month LIBOR plus 3.75%, resetting quarterly | Three month LIBOR plus 3.95%, resetting quarterly | |||||
Scheduled maturity | March 30, 2035 | October 30, 2035 |
Mortgage Note Amount as of | |||||||||||||||
Origination Date | September 30, 2019 | Maturity Date | Interest Rate | Net Deferred Finance Costs | |||||||||||
KRVI | 12/16/2016 | $ | 12/16/2019 | % | $ |
Year Ending December 31, | Total | ||
2019 | $ | ||
2020 | |||
2021 | |||
2022 | |||
2023 | |||
Thereafter | |||
$ |
14. | Commitments and Contingencies |
15. | Fair Value of Financial Instruments |
a. | Investment Securities, Available for Sale – The Company determines the fair value of the investment securities in our portfolio, except the CMBS held in securitization trusts, using a third-party pricing service or quoted prices provided by dealers who make markets in similar financial instruments. Dealer valuations typically incorporate common market pricing methods, including a spread measurement to the Treasury curve or interest rate swap curve as well as underlying characteristics of the particular security including coupon, periodic and life caps, collateral type, rate reset period and seasoning or age of the security. If quoted prices for a security are not reasonably available from a dealer, the security will be classified as a Level 3 security and, as a result, management will determine fair value by modeling the security based on its specific characteristics and available market information. Management reviews all prices used in determining fair value to ensure they represent current market conditions. This review includes surveying similar market transactions, comparisons to interest pricing models as well as offerings of like securities by dealers. The Company's investment securities, except the CMBS held in securitization trusts, are valued based upon readily observable market parameters and are classified as Level 2 fair values. |
b. | Multi-Family Loans Held in Securitization Trusts – Multi-family loans held in securitization trusts are carried at fair value and classified as Level 3 fair values. In accordance with the practical expedient in ASC 810, the Company determines the fair value of multi-family loans held in securitization trusts based on the fair value of its Multi-Family CDOs and its retained interests from these securitizations (eliminated in consolidation in accordance with GAAP), as the fair value of these instruments is more observable. |
c. | Derivative Instruments – The Company’s derivative instruments are classified as Level 2 fair values and are measured using valuations reported by the clearing house, CME Clearing, through which these instruments were cleared. The derivatives are presented net of variation margin payments pledged or received. |
d. | Multi-Family CDOs – Multi-Family CDOs are recorded at fair value and classified as Level 3 fair values. The fair value of Multi-Family CDOs is determined using a third party pricing service or are based on quoted prices provided by dealers who make markets in similar financial instruments. The dealers will consider contractual cash payments and yields expected by market participants. Dealers also incorporate common market pricing methods, including a spread measurement to the Treasury curve or interest rate swap curve as well as underlying characteristics of the particular security including coupon, periodic and life caps, collateral type, rate reset period and seasoning or age of the security. |
e. | Investments in Unconsolidated Entities – Fair value for investments in unconsolidated entities is determined based on a valuation model using assumptions for the timing and amount of expected future cash flow for income and realization events for the underlying assets in the unconsolidated entities and a discount rate. This fair value measurement is generally based on unobservable inputs and, as such, is classified as Level 3 in the fair value hierarchy. |
f. | Residential Mortgage Loans – Certain of the Company’s acquired distressed and other residential mortgage loans are recorded at fair value and classified as Level 3 in the fair value hierarchy. The fair value for distressed and other residential mortgage loans is determined using valuations obtained from a third party that specializes in providing valuations of residential mortgage loans. The valuation approach depends on whether the residential mortgage loan is considered performing, re-performing or non-performing at the date the valuation is performed. |
Measured at Fair Value on a Recurring Basis at | |||||||||||||||||||||||||||||||
September 30, 2019 | December 31, 2018 | ||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets carried at fair value | |||||||||||||||||||||||||||||||
Investment securities available for sale: | |||||||||||||||||||||||||||||||
Agency RMBS | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Non-Agency RMBS | |||||||||||||||||||||||||||||||
CMBS | |||||||||||||||||||||||||||||||
ABS | |||||||||||||||||||||||||||||||
Multi-family loans held in securitization trusts | |||||||||||||||||||||||||||||||
Distressed and other residential mortgage loans, at fair value | |||||||||||||||||||||||||||||||
Derivative assets: | |||||||||||||||||||||||||||||||
Interest rate swaps (1) | |||||||||||||||||||||||||||||||
Investments in unconsolidated entities | |||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Liabilities carried at fair value | |||||||||||||||||||||||||||||||
Multi-family collateralized debt obligations | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ |
(1) | All of the Company's interest rate swaps outstanding are cleared through a central clearing house. The Company exchanges variation margin for swaps based upon daily changes in fair value. Includes derivative liabilities of $ |
Nine Months Ended September 30, 2019 | |||||||||||||||||||
Multi-family loans held in securitization trusts | Distressed and other residential mortgage loans | Investments in unconsolidated entities | CMBS held in securitization trusts | Total | |||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | $ | ||||||||||||||
Total gains/(losses) (realized/unrealized) | |||||||||||||||||||
Included in earnings | |||||||||||||||||||
Included in other comprehensive income (loss) | ( | ) | ( | ) | |||||||||||||||
Transfers in | |||||||||||||||||||
Transfers out | ( | ) | ( | ) | |||||||||||||||
Contributions | |||||||||||||||||||
Paydowns/Distributions | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Charge-off | ( | ) | ( | ) | |||||||||||||||
Sales | ( | ) | ( | ) | ( | ) | |||||||||||||
Purchases (1) | |||||||||||||||||||
Balance at the end of period | $ | $ | $ | $ | $ |
(1) |
Nine Months Ended September 30, 2018 | |||||||||||||||||||
Multi-family loans held in securitization trusts | Distressed and other residential mortgage loans | Investments in unconsolidated entities | CMBS held in securitization trusts | Total | |||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | $ | ||||||||||||||
Total (losses)/gains (realized/unrealized) | |||||||||||||||||||
Included in earnings | ( | ) | ( | ) | ( | ) | |||||||||||||
Included in other comprehensive income (loss) | |||||||||||||||||||
Transfers in | |||||||||||||||||||
Transfers out | |||||||||||||||||||
Contributions | |||||||||||||||||||
Paydowns/Distributions | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Sales | ( | ) | ( | ) | |||||||||||||||
Purchases (1) | |||||||||||||||||||
Balance at the end of period | $ | $ | $ | $ | $ |
(1) | During the nine months ended September 30, 2018, the Company purchased first loss PO securities and certain IOs and mezzanine CMBS securities issued from securitizations that it determined to consolidate and included in the Consolidated K-Series. As a result, the Company consolidated assets of these securitizations in the amount of $ |
Nine Months Ended September 30, | |||||||
2019 | 2018 | ||||||
Balance at beginning of period | $ | $ | |||||
Total losses (gains) (realized/unrealized) | |||||||
Included in earnings | ( | ) | |||||
Purchases (1) | |||||||
Paydowns | ( | ) | ( | ) | |||
Charge-off | ( | ) | |||||
Balance at the end of period | $ | $ |
(1) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Assets | |||||||||||||||
Multi-family loans held in securitization trusts (1) | $ | $ | ( | ) | $ | $ | ( | ) | |||||||
Investments in unconsolidated entities (2) | |||||||||||||||
Distressed and other residential mortgage loans, at fair value (1) | ( | ) | ( | ) | |||||||||||
Liabilities | |||||||||||||||
Multi-family debt held in securitization trusts (1) | ( | ) | ( | ) |
(1) | Presented in unrealized gains (losses), net on the Company's condensed consolidated statements of operations. |
(2) | Presented in other income on the Company's condensed consolidated statements of operations. |
Assets Measured at Fair Value on a Non-Recurring Basis at | |||||||||||||||||||||||||||
September 30, 2019 | December 31, 2018 | ||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Residential mortgage loans held in securitization trusts – impaired loans, net | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Residential mortgage loans held in securitization trusts – impaired loans, net | $ | $ | ( | ) | $ | ( | ) | $ |
September 30, 2019 | December 31, 2018 | ||||||||||||||||
Fair Value Hierarchy Level | Carrying Value | Estimated Fair Value | Carrying Value | Estimated Fair Value | |||||||||||||
Financial Assets: | |||||||||||||||||
Cash and cash equivalents | Level 1 | $ | $ | $ | $ | ||||||||||||
Investment securities, available for sale | Level 2 or 3 | ||||||||||||||||
Distressed and other residential mortgage loans, at fair value | Level 3 | ||||||||||||||||
Distressed and other residential mortgage loans, net | Level 3 | ||||||||||||||||
Investments in unconsolidated entities | Level 3 | ||||||||||||||||
Preferred equity and mezzanine loan investments | Level 3 | ||||||||||||||||
Multi-family loans held in securitization trusts | Level 3 | ||||||||||||||||
Derivative assets | Level 2 | ||||||||||||||||
Mortgage loans held for sale, net (1) | Level 3 | ||||||||||||||||
Mortgage loans held for investment (1) | Level 3 | ||||||||||||||||
Financial Liabilities: | |||||||||||||||||
Repurchase agreements | Level 2 | ||||||||||||||||
Residential collateralized debt obligations | Level 3 | ||||||||||||||||
Multi-family collateralized debt obligations | Level 3 | ||||||||||||||||
Securitized debt | Level 3 | ||||||||||||||||
Subordinated debentures | Level 3 | ||||||||||||||||
Convertible notes | Level 2 |
(1) | Included in receivables and other assets in the accompanying condensed consolidated balance sheets. |
a. | Cash and cash equivalents – Estimated fair value approximates the carrying value of such assets. |
b. | Distressed and other residential mortgage loans, net and Mortgage loans held for sale, net – The fair value is determined using valuations obtained from a third party that specializes in providing valuations of residential mortgage loans. For performing and re-performing loans, estimates of fair value are derived using a discounted cash flow model, where estimates of cash flows are determined from scheduled payments for each loan, adjusted using forecast prepayment rates, default rates and rates for loss upon default. For non-performing loans, asset liquidation cash flows are derived based on the estimated time to liquidate the loan, expected liquidation costs and home price appreciation. |
c. | Preferred equity and mezzanine loan investments – Estimated fair value is determined by both market comparable pricing and discounted cash flows. The discounted cash flows are based on the underlying contractual cash flows and estimated changes in market yields. The fair value also reflects consideration of changes in credit risk since the origination or time of initial investment. |
d. | Repurchase agreements – The fair value of these repurchase agreements approximates cost as they are short term in nature. |
e. | Residential collateralized debt obligations – The fair value of these CDOs is based on discounted cash flows as well as market pricing on comparable obligations. |
f. | Securitized debt – The fair value of securitized debt is based on discounted cash flows using management’s estimate for market yields. |
g. | Subordinated debentures – The fair value of these subordinated debentures is based on discounted cash flows using management’s estimate for market yields. |
h. | Convertible notes – The fair value is based on quoted prices provided by dealers who make markets in similar financial instruments. |
16. | Stockholders' Equity |
Cash Dividend Per Share | ||||||||||||||||
Declaration Date | Record Date | Payment Date | Series B Preferred Stock | Series C Preferred Stock | Series D Preferred Stock | |||||||||||
September 9, 2019 | October 1, 2019 | October 15, 2019 | $ | $ | $ | |||||||||||
June 14, 2019 | July 1, 2019 | July 15, 2019 | ||||||||||||||
March 19, 2019 | April 1, 2019 | April 15, 2019 | ||||||||||||||
December 4, 2018 | January 1, 2019 | January 15, 2019 | ||||||||||||||
September 17, 2018 | October 1, 2018 | October 15, 2018 | ||||||||||||||
June 18, 2018 | July 1, 2018 | July 15, 2018 | ||||||||||||||
March 19, 2018 | April 1, 2018 | April 15, 2018 |
Period | Declaration Date | Record Date | Payment Date | Cash Dividend Per Share | ||||||
Third Quarter 2019 | September 9, 2019 | September 19, 2019 | October 25, 2019 | $ | ||||||
Second Quarter 2019 | June 14, 2019 | June 24, 2019 | July 25, 2019 | |||||||
First Quarter 2019 | March 19, 2019 | March 29, 2019 | April 25, 2019 | |||||||
Fourth Quarter 2018 | December 4, 2018 | December 14, 2018 | January 25, 2019 | |||||||
Third Quarter 2018 | September 17, 2018 | September 27, 2018 | October 26, 2018 | |||||||
Second Quarter 2018 | June 18, 2018 | June 28, 2018 | July 26, 2018 | |||||||
First Quarter 2018 | March 19, 2018 | March 29, 2018 | April 26, 2018 |
Share Issue Month | Shares Issued | Net Proceeds (1) | |||||
January 2019 | $ | ||||||
March 2019 | |||||||
May 2019 | |||||||
July 2019 | |||||||
September 2019 |
(1) | Proceeds are net of underwriting discounts and commissions and offering expenses |
17. | Earnings Per Share |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Basic Earnings per Common Share | ||||||||||||||||
Net income attributable to Company | $ | $ | $ | $ | ||||||||||||
Less: Preferred stock dividends | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Net income attributable to Company's common stockholders | $ | $ | $ | $ | ||||||||||||
Basic weighted average common shares outstanding | ||||||||||||||||
Basic Earnings per Common Share | $ | $ | $ | $ | ||||||||||||
Diluted Earnings per Common Share: | ||||||||||||||||
Net income attributable to Company | $ | $ | $ | $ | ||||||||||||
Less: Preferred stock dividends | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Add back: Interest expense on convertible notes for the period, net of tax | ||||||||||||||||
Net income attributable to Company's common stockholders | $ | $ | $ | $ | ||||||||||||
Weighted average common shares outstanding | ||||||||||||||||
Net effect of assumed convertible notes conversion to common shares | ||||||||||||||||
Net effect of assumed PSUs vested | ||||||||||||||||
Diluted weighted average common shares outstanding | ||||||||||||||||
Diluted Earnings per Common Share | $ | $ | $ | $ |
18. | Stock Based Compensation |
2019 | 2018 | ||||||||||||
Number of Non-vested Restricted Shares | Weighted Average Per Share Grant Date Fair Value (1) | Number of Non-vested Restricted Shares | Weighted Average Per Share Grant Date Fair Value (1) | ||||||||||
Non-vested shares at January 1 | $ | $ | |||||||||||
Granted | |||||||||||||
Vested | ( | ) | ( | ) | |||||||||
Forfeited | ( | ) | ( | ) | |||||||||
Non-vested shares as of September 30 | $ | $ | |||||||||||
Restricted stock granted during the period | $ | $ |
(1) | The grant date fair value of restricted stock awards is based on the closing market price of the Company’s common stock at the grant date. |
• | If three-year TSR performance relative to the Company's identified performance peer group (the "Relative TSR") is less than the 30th percentile, then |
• | If three-year Relative TSR performance is equal to the 30th percentile, then the Threshold % (as defined in the individual PSU Agreements) of the target PSUs will vest; |
• | If three-year Relative TSR performance is equal to the 50th percentile, then |
• | If three-year Relative TSR performance is greater than or equal to the 80th percentile, then the Maximum % (as defined in the individual PSU Agreements) of the target PSUs will vest. |
2019 | 2018 | ||||||||||||
Number of Non-vested Target Shares | Weighted Average Per Share Grant Date Fair Value (1) | Number of Non-vested Target Shares | Weighted Average Per Share Grant Date Fair Value (1) | ||||||||||
Non-vested target PSUs at January 1 | $ | $ | |||||||||||
Granted | |||||||||||||
Vested | |||||||||||||
Non-vested target PSUs as of September 30 | $ | $ |
(1) | The grant date fair value of the PSUs was determined through a Monte-Carlo simulation of the Company’s common stock total shareholder return and the common stock total shareholder return of its identified performance peer companies to determine the Relative TSR of the Company’s common stock over a future period of |
19. | Income Taxes |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Current income tax benefit | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Deferred income tax benefit | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Total benefit | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
September 30, 2019 | December 31, 2018 | ||||||
Deferred tax assets | |||||||
Net operating loss carryforward | $ | $ | |||||
Capital loss carryover | |||||||
GAAP/Tax basis differences | |||||||
Total deferred tax assets (1) | |||||||
Deferred tax liabilities | |||||||
Deferred tax liabilities | |||||||
Total deferred tax liabilities (2) | |||||||
Valuation allowance (1) | ( | ) | ( | ) | |||
Total net deferred tax asset | $ | $ |
(1) | Included in receivables and other assets in the accompanying condensed consolidated balance sheets. |
(2) | Included in accrued expenses and other liabilities in the accompanying condensed consolidated balance sheets. |
20. | Subsequent Events |
• | “ABS” refers to debt and/or equity tranches of securitizations backed by various asset classes including, but not limited to, automobiles, aircraft, credit cards, equipment, franchises, recreational vehicles and student loans; |
• | “Agency ARMs” refers to Agency RMBS comprised of adjustable-rate and hybrid adjustable-rate RMBS; |
• | “Agency CMBS” refers to CMBS representing interests in or obligations backed by pools of multi-family mortgage loans issued or guaranteed by a government sponsored enterprise (“GSE”), such as Federal Home Loan Mortgage Corporation (“Freddie Mac”); |
• | “Agency fixed-rate" refers to Agency RMBS comprised of fixed-rate RMBS; |
• | “Agency IOs” refers to Agency RMBS comprised of IO RMBS; |
• | “Agency RMBS” refers to RMBS representing interests in or obligations backed by pools of mortgage loans issued or guaranteed by a GSE, such as the Federal National Mortgage Association (“Fannie Mae”) or Freddie Mac, or an agency of the U.S. government, such as the Government National Mortgage Association (“Ginnie Mae”); |
• | “ARMs” refers to adjustable-rate residential mortgage loans; |
• | “CDO” refers to collateralized debt obligation; |
• | “CMBS” refers to commercial mortgage-backed securities comprised of commercial mortgage pass-through securities, as well as PO, IO or senior or mezzanine securities that represent the right to a specific component of the cash flow from a pool of commercial mortgage loans; |
• | “Consolidated K-Series” refers to Freddie Mac-sponsored multi-family loan K-Series securitizations, of which we, or one of our “special purpose entities,” or “SPEs,” own the first loss POs and certain IOs and certain senior or mezzanine securities that we consolidate in our financial statements in accordance with GAAP; |
• | “Consolidated VIEs” refers to VIEs where the Company is the primary beneficiary, as it has both the power to direct the activities that most significantly impact the economic performance of the VIE and a right to receive benefits or absorb losses of the entity that could be potentially significant to the VIE; |
• | “distressed residential mortgage loans” refers to pools of seasoned re-performing, non-performing and other delinquent mortgage loans secured by first liens on one- to four-family properties; |
• | “excess mortgage servicing spread” refers to the difference between the contractual servicing fee with Fannie Mae, Freddie Mac or Ginnie Mae and the base servicing fee that is retained as compensation for servicing or subservicing the related mortgage loans pursuant to the applicable servicing contract; |
• | “GAAP” refers to generally accepted accounting principles within the United States; |
• | “IOs” refers collectively to interest only and inverse interest only mortgage-backed securities that represent the right to the interest component of the cash flow from a pool of mortgage loans; |
• | "IO RMBS" refers to RMBS comprised of IOs; |
• | “multi-family CMBS” refers to CMBS backed by commercial mortgage loans on multi-family properties; |
• | “non-Agency RMBS” refers to RMBS that are not guaranteed by any agency of the U.S. Government or GSE; |
• | “non-QM loans” refers to residential mortgage loans that are not deemed “qualified mortgage,” or “QM,” loans under the rules of the Consumer Financial Protection Bureau (“CFPB”); |
• | “POs” refers to mortgage-backed securities that represent the right to the principal component of the cash flow from a pool of mortgage loans; |
• | “prime ARM loans” and “residential securitized loans” each refer to prime credit quality residential ARM loans held in our securitization trusts; |
• | “qualified mortgage” refers to a mortgage loan eligible for delivery to a GSE under the rules of the CFPB, which have certain requirements such as debt-to-income ratio, being fully-amortizing, and limits on loan fees; |
• | “RMBS” refers to residential mortgage-backed securities comprised of adjustable-rate, hybrid adjustable-rate, fixed-rate, interest only and inverse interest only, and principal only securities; |
• | “second mortgages” refers to liens on residential properties that are subordinate to more senior mortgages or loans; and |
• | “Variable Interest Entity” or “VIE” refers to an entity in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. |
June 30, 2019 | Acquisitions | Runoff (1) | Sales | Other (2) | September 30, 2019 | ||||||||||||||||||
Investment securities | |||||||||||||||||||||||
RMBS | |||||||||||||||||||||||
Agency RMBS | $ | 994,200 | $ | — | $ | (41,986 | ) | $ | — | $ | 3,624 | $ | 955,838 | ||||||||||
Non-Agency RMBS | 432,840 | 185,971 | (2,171 | ) | (1,021 | ) | 5,909 | 621,528 | |||||||||||||||
Total RMBS | 1,427,040 | 185,971 | (44,157 | ) | (1,021 | ) | 9,533 | 1,577,366 | |||||||||||||||
Agency CMBS | 292,090 | 30,177 | (7,382 | ) | (40,161 | ) | 3,674 | 278,398 | |||||||||||||||
ABS | 24,739 | 23,108 | — | — | 407 | 48,254 | |||||||||||||||||
Total investment securities, available for sale | 1,743,869 | 239,256 | (51,539 | ) | (41,182 | ) | 13,614 | 1,904,018 | |||||||||||||||
Consolidated K-Series (3) | 801,199 | 60,511 | (432 | ) | — | 23,787 | 885,065 | ||||||||||||||||
Total investment securities | 2,545,068 | 299,767 | (51,971 | ) | (41,182 | ) | 37,401 | 2,789,083 | |||||||||||||||
Distressed and other residential mortgage loans | 1,280,048 | 79,712 | (50,486 | ) | — | 17,320 | 1,326,594 | ||||||||||||||||
Preferred equity investments, mezzanine loans and investments in unconsolidated entities | 357,535 | 17,379 | (30,208 | ) | — | 3,224 | 347,930 | ||||||||||||||||
Other investments (4) | 16,781 | — | (1,605 | ) | (3,151 | ) | 3,380 | 15,405 | |||||||||||||||
Totals | $ | 4,199,432 | $ | 396,858 | $ | (134,270 | ) | $ | (44,333 | ) | $ | 61,325 | $ | 4,479,012 |
(1) | Primarily includes principal repayments, preferred equity redemptions and joint venture investment redemptions. |
(2) | Primarily includes changes in fair value, net premium amortization/discount accretion, preferred return or interest deferral and payments made on mortgages and notes payable in consolidated variable interest entities. |
(3) | The Consolidated K-Series are presented on our condensed consolidated balance sheets as multi-family loans held in securitization trusts, at fair value and multi-family collateralized debt obligations, at fair value. A reconciliation to our financial statements as of June 30, 2019 and September 30, 2019 follows (dollar amounts in thousands): |
June 30, 2019 | September 30, 2019 | ||||||
Multi-family loans held in securitization trusts, at fair value | $ | 14,573,925 | $ | 15,863,264 | |||
Less: Multi-family collateralized debt obligations, at fair value | (13,772,726 | ) | (14,978,199 | ) | |||
Consolidated K-Series investment securities owned by NYMT | $ | 801,199 | $ | 885,065 |
(4) | Includes the following balances as of June 30, 2019 and September 30, 2019 (dollar amounts in thousands: |
June 30, 2019 | September 30, 2019 | ||||||
Real estate under development in consolidated variable interest entities | $ | 16,727 | $ | 13,903 | |||
Less: Mortgages and notes payable in consolidated variable interest entities | (3,986 | ) | (935 | ) | |||
Other loan investments | 4,040 | 2,437 | |||||
Other investments | $ | 16,781 | $ | 15,405 |
Three Months Ended September 30, 2019 | Nine Months Ended September 30, 2019 | ||||||
Net interest income | $ | 31,971 | $ | 83,866 | |||
Net income attributable to Company's common stockholders | $ | 34,835 | $ | 89,528 | |||
Net income attributable to Company's common stockholders per share (basic) | $ | 0.15 | $ | 0.44 | |||
Comprehensive income attributable to Company's common stockholders | $ | 45,747 | $ | 133,579 | |||
Comprehensive income attributable to Company's common stockholders per share (basic) | $ | 0.20 | $ | 0.66 | |||
Book value per share | $ | 5.77 | $ | 5.77 | |||
Economic return on book value (1) | 3.8 | % | 17.0 | % | |||
Dividends per share | $ | 0.20 | $ | 0.60 |
(1) | Economic return on book value is based on the change in GAAP book value per share plus dividends declared per common share during the respective periods. For the nine months ended September 30, 2019, economic return on book value is calculated on an annualized basis. |
• | We acquired residential, multi-family and other credit assets totaling $396.9 million during the third quarter. |
• | During the third quarter, we issued 51,750,000 shares of common stock collectively through two underwritten public offerings, resulting in total net proceeds of $310.6 million. |
• | During the third quarter, we issued 589,420 shares of preferred stock under our at-the-market preferred equity offering program, resulting in net proceeds of $14.4 million. |
Agency RMBS | Residential Credit | Multi- Family Credit | Other | Total | |||||||||||||||
Investment securities, available for sale, at fair value | $ | 955,838 | $ | 621,528 | $ | 278,398 | $ | 48,254 | $ | 1,904,018 | |||||||||
Distressed and other residential mortgage loans, at fair value | — | 1,116,128 | — | — | 1,116,128 | ||||||||||||||
Distressed and other residential mortgage loans, net | — | 210,466 | — | — | 210,466 | ||||||||||||||
Investments in unconsolidated entities | — | 61,779 | 107,154 | — | 168,933 | ||||||||||||||
Preferred equity and mezzanine loan investments | — | — | 178,997 | — | 178,997 | ||||||||||||||
Multi-family loans held in securitization trusts, at fair value | — | — | 15,863,264 | — | 15,863,264 | ||||||||||||||
Multi-family collateralized debt obligations, at fair value | — | — | (14,978,199 | ) | — | (14,978,199 | ) | ||||||||||||
Other investments (1) | — | 2,437 | 12,968 | — | 15,405 | ||||||||||||||
Carrying value | 955,838 | 2,012,338 | 1,462,582 | 48,254 | 4,479,012 | ||||||||||||||
Liabilities: | |||||||||||||||||||
Repurchase agreements | (840,864 | ) | (946,309 | ) | (772,707 | ) | — | (2,559,880 | ) | ||||||||||
CDOs and subordinated debentures | — | (42,119 | ) | — | (45,000 | ) | (87,119 | ) | |||||||||||
Convertible notes | — | — | — | (132,395 | ) | (132,395 | ) | ||||||||||||
Hedges (net) (2) | 20,673 | — | — | — | 20,673 | ||||||||||||||
Cash and restricted cash (3) | 9,558 | 9,554 | 5,314 | 42,412 | 66,838 | ||||||||||||||
Goodwill | — | — | — | 25,222 | 25,222 | ||||||||||||||
Other (4) | (3,057 | ) | 109,487 | (11,503 | ) | (60,279 | ) | 34,648 | |||||||||||
Net capital allocated | $ | 142,148 | $ | 1,142,951 | $ | 683,686 | $ | (121,786 | ) | $ | 1,846,999 | ||||||||
Overall leverage ratio (5) | 1.5 | ||||||||||||||||||
Leverage ratio on callable debt (6) | 1.4 |
(1) | Includes real estate under development in the amount of $13.9 million, net of mortgages and notes payable in consolidated variable interest entities in the amount of $0.9 million, and other loan investments in the amount of $2.4 million. Both real estate under development and other loan investments are included in the Company's accompanying condensed consolidated balance sheets in receivables and other assets. |
(2) | Includes derivative liabilities of $40.4 million netted against a $61.1 million variation margin. |
(3) | Restricted cash is included in the Company's accompanying condensed consolidated balance sheets in receivables and other assets. |
(4) | Includes a $66.0 million deposit to be used towards the purchase price of RMBS to be issued in a securitization transaction sponsored by Freddie Mac. The deposit is included in receivables and other assets in the accompanying condensed consolidated balance sheets. |
(5) | Represents total debt divided by our total stockholders' equity. Total debt does not include debt associated with Multi-family CDOs amounting to $15.0 billion and Residential CDOs amounting to $42.1 million that are consolidated in the Company's financial statements as they are non-recourse debt for which we have no obligation. |
(6) | Represents repurchase agreement borrowings divided by our total stockholders' equity. |
Agency RMBS | Residential Credit | Multi- Family Credit | Other | Total | |||||||||||||||
Investment securities, available for sale | $ | 1,037,730 | $ | 214,037 | $ | 260,485 | $ | — | $ | 1,512,252 | |||||||||
Distressed and other residential mortgage loans, at fair value | — | 737,523 | — | — | 737,523 | ||||||||||||||
Distressed and other residential mortgage loans, net | — | 285,261 | — | — | 285,261 | ||||||||||||||
Investments in unconsolidated entities | — | 10,954 | 62,512 | — | 73,466 | ||||||||||||||
Preferred equity and mezzanine loan investments | — | — | 165,555 | — | 165,555 | ||||||||||||||
Multi-family loans held in securitization trusts, at fair value | — | — | 11,679,847 | — | 11,679,847 | ||||||||||||||
Multi-family collateralized debt obligations, at fair value | — | — | (11,022,248 | ) | — | (11,022,248 | ) | ||||||||||||
Other investments (1) | — | 4,995 | 20,477 | — | 25,472 | ||||||||||||||
Carrying value | $ | 1,037,730 | $ | 1,252,770 | $ | 1,166,628 | $ | — | $ | 3,457,128 | |||||||||
Liabilities: | |||||||||||||||||||
Repurchase agreements | (925,230 | ) | (676,658 | ) | (529,617 | ) | — | (2,131,505 | ) | ||||||||||
CDOs, securitized debt and subordinated debentures | — | (65,253 | ) | (30,121 | ) | (45,000 | ) | (140,374 | ) | ||||||||||
Convertible notes | — | — | — | (130,762 | ) | (130,762 | ) | ||||||||||||
Hedges (net) (2) | 10,263 | — | — | — | 10,263 | ||||||||||||||
Cash and restricted cash (3) | 10,377 | 20,859 | 17,291 | 60,618 | 109,145 | ||||||||||||||
Goodwill | — | — | — | 25,222 | 25,222 | ||||||||||||||
Other | 2,374 | 24,182 | (4,929 | ) | (40,451 | ) | (18,824 | ) | |||||||||||
Net capital allocated | $ | 135,514 | $ | 555,900 | $ | 619,252 | $ | (130,373 | ) | $ | 1,180,293 | ||||||||
Overall leverage ratio (4) | 2.0 | ||||||||||||||||||
Leverage ratio on callable debt (5) | 1.8 |
(1) | Includes real estate under development in the amount of $22.0 million and real estate held for sale in consolidated variable interest entities of $29.7 million, net of mortgages and notes payable in consolidated variable interest entities in the amount of $31.2 million, and other loan investments in the amount of $5.0 million. Both real estate under development and other loan investments are included in the Company's accompanying condensed consolidated balance sheets in receivables and other assets. |
(2) | Includes derivative assets of $1.8 million and an $8.5 million variation margin. |
(3) | Restricted cash is included in the Company's accompanying condensed consolidated balance sheets in receivables and other assets. |
(4) | Represents total debt divided by our total stockholders' equity. Total debt does not include debt associated with Multi-family CDOs amounting to $11.0 billion and Residential CDOs amounting to $53.0 million and mortgage debt of The Clusters amounting to $27.2 million that are consolidated in the Company's financial statements as they are non-recourse debt for which we have no obligation. |
(5) | Represents repurchase agreement borrowings divided by our total stockholders' equity. |
Three Months Ended September 30, 2019 | Nine Months Ended September 30, 2019 | ||||||||||||||||||||
Amount | Shares | Per Share (1) | Amount | Shares | Per Share (1) | ||||||||||||||||
Beginning Balance | $ | 1,211,546 | 210,873 | $ | 5.75 | $ | 879,389 | 155,590 | $ | 5.65 | |||||||||||
Common stock issuance, net (2) | 311,848 | 51,748 | 636,340 | 107,031 | |||||||||||||||||
Preferred stock issuance, net | 14,359 | 30,446 | |||||||||||||||||||
Preferred stock liquidation preference | (14,736 | ) | (31,268 | ) | |||||||||||||||||
Balance after share issuance activity | 1,523,017 | 262,621 | 5.80 | 1,514,907 | 262,621 | 5.76 | |||||||||||||||
Dividends declared | (52,524 | ) | (0.20 | ) | (132,246 | ) | (0.50 | ) | |||||||||||||
Net change in accumulated other comprehensive income: | |||||||||||||||||||||
Investment securities, available for sale (3) | 10,912 | 0.04 | 44,051 | 0.17 | |||||||||||||||||
Net income attributable to Company's common stockholders | 34,835 | 0.13 | 89,528 | 0.34 | |||||||||||||||||
Ending Balance | $ | 1,516,240 | 262,621 | $ | 5.77 | $ | 1,516,240 | 262,621 | $ | 5.77 |
(1) | Outstanding shares used to calculate book value per share for the three and nine months ended September 30, 2019 are 262,621,039. |
(2) | Includes amortization of stock based compensation. |
(3) | The increases relate to unrealized gains in our investment securities due to improved pricing. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2019 | 2018 | $ Change | 2019 | 2018 | $ Change | ||||||||||||||||||
Net interest income | $ | 31,971 | $ | 19,603 | $ | 12,368 | $ | 83,866 | $ | 56,854 | $ | 27,012 | |||||||||||
Total non-interest income | 21,396 | 24,303 | (2,907 | ) | 60,822 | 65,265 | (4,443 | ) | |||||||||||||||
Total general, administrative and operating expenses | 12,288 | 9,912 | 2,376 | 37,326 | 27,380 | 9,946 | |||||||||||||||||
Income from operations before income taxes | 41,079 | 33,994 | 7,085 | 107,362 | 94,739 | 12,623 | |||||||||||||||||
Income tax benefit | (187 | ) | (454 | ) | 267 | (247 | ) | (547 | ) | 300 | |||||||||||||
Net income attributable to Company | 41,379 | 33,973 | 7,406 | 108,254 | 93,285 | 14,969 | |||||||||||||||||
Preferred stock dividends | 6,544 | 5,925 | 619 | 18,726 | 17,775 | 951 | |||||||||||||||||
Net income attributable to Company's common stockholders | 34,835 | 28,048 | 6,787 | 89,528 | 75,510 | 14,018 | |||||||||||||||||
Basic earnings per common share | $ | 0.15 | $ | 0.21 | $ | (0.06 | ) | $ | 0.44 | $ | 0.63 | $ | (0.19 | ) | |||||||||
Diluted earnings per common share | $ | 0.15 | $ | 0.20 | $ | (0.05 | ) | $ | 0.43 | $ | 0.60 | $ | (0.17 | ) |
Agency RMBS (1) | Residential Credit | Multi- Family Credit (2) (3) | Other | Total | |||||||||||||||
Interest Income (4) | $ | 6,512 | $ | 23,668 | $ | 28,413 | $ | 681 | $ | 59,274 | |||||||||
Interest Expense | (4,980 | ) | (10,499 | ) | (8,400 | ) | (3,424 | ) | (27,303 | ) | |||||||||
Net Interest Income (Expense) | $ | 1,532 | $ | 13,169 | $ | 20,013 | $ | (2,743 | ) | $ | 31,971 | ||||||||
Average Interest Earning Assets (3) (5) | $ | 1,001,567 | $ | 1,772,485 | $ | 1,104,560 | $ | 26,235 | $ | 3,904,847 | |||||||||
Weighted Average Yield on Interest Earning Assets (6) | 2.60 | % | 5.34 | % | 10.29 | % | 10.38 | % | 6.07 | % | |||||||||
Average Cost of Funds (7) | (2.38 | )% | (4.27 | )% | (4.29 | )% | — | (3.67 | )% | ||||||||||
Portfolio Net Interest Margin (8) | 0.22 | % | 1.07 | % | 6.00 | % | 10.38 | % | 2.40 | % |
Agency RMBS (1) | Residential Credit | Multi- Family Credit (2) (3) | Other | Total | |||||||||||||||
Interest Income (4) | $ | 7,479 | $ | 7,957 | $ | 19,668 | $ | — | $ | 35,104 | |||||||||
Interest Expense | (4,860 | ) | (3,213 | ) | (4,047 | ) | (3,381 | ) | (15,501 | ) | |||||||||
Net Interest Income (Expense) | $ | 2,619 | $ | 4,744 | $ | 15,621 | $ | (3,381 | ) | $ | 19,603 | ||||||||
Average Interest Earning Assets (3) (5) | $ | 1,121,180 | $ | 597,200 | $ | 681,040 | $ | — | $ | 2,399,420 | |||||||||
Weighted Average Yield on Interest Earning Assets (6) | 2.67 | % | 5.33 | % | 11.55 | % | — | 5.85 | % | ||||||||||
Average Cost of Funds (7) | (2.22 | )% | (4.68 | )% | (5.04 | )% | — | (3.30 | )% | ||||||||||
Portfolio Net Interest Margin (8) | 0.45 | % | 0.65 | % | 6.51 | % | — | 2.55 | % |
Agency RMBS (1) | Residential Credit | Multi- Family Credit (2) (3) | Other | Total | |||||||||||||||
Interest Income (4) | $ | 20,768 | $ | 61,842 | $ | 79,479 | $ | 710 | $ | 162,799 | |||||||||
Interest Expense | (17,225 | ) | (29,423 | ) | (22,003 | ) | (10,282 | ) | (78,933 | ) | |||||||||
Net Interest Income (Expense) | $ | 3,543 | $ | 32,419 | $ | 57,476 | $ | (9,572 | ) | $ | 83,866 | ||||||||
Average Interest Earning Assets (3) (5) | $ | 1,046,265 | $ | 1,541,787 | $ | 1,028,659 | $ | 9,112 | $ | 3,625,823 | |||||||||
Weighted Average Yield on Interest Earning Assets (6) | 2.65 | % | 5.35 | % | 10.30 | % | 10.39 | % | 5.99 | % | |||||||||
Average Cost of Funds (7) | (2.58 | )% | (4.47 | )% | (4.27 | )% | — | (3.73 | )% | ||||||||||
Portfolio Net Interest Margin (8) | 0.07 | % | 0.88 | % | 6.03 | % | 10.39 | % | 2.26 | % |
Agency RMBS (1) | Residential Credit | Multi- Family Credit (2) (3) | Other | Total | |||||||||||||||
Interest Income (4) | $ | 23,301 | $ | 23,812 | $ | 55,440 | $ | — | $ | 102,553 | |||||||||
Interest Expense | (13,911 | ) | (9,767 | ) | (12,027 | ) | (9,994 | ) | (45,699 | ) | |||||||||
Net Interest Income (Expense) | $ | 9,390 | $ | 14,045 | $ | 43,413 | $ | (9,994 | ) | $ | 56,854 | ||||||||
Average Interest Earning Assets (3) (5) | $ | 1,165,786 | $ | 599,207 | $ | 647,400 | $ | — | $ | 2,412,393 | |||||||||
Weighted Average Yield on Interest Earning Assets (6) | 2.66 | % | 5.30 | % | 11.42 | % | — | 5.67 | % | ||||||||||
Average Cost of Funds (7) | (2.01 | )% | (4.42 | )% | (4.72 | )% | — | (3.06 | )% | ||||||||||
Portfolio Net Interest Margin (8) | 0.65 | % | 0.88 | % | 6.70 | % | — | 2.61 | % |
(1) | Includes Agency fixed-rate RMBS, Agency ARMs and, solely with respect to the nine months ended September 30, 2018, Agency IOs. |
(2) | The Company, through its ownership of certain securities, has determined it is the primary beneficiary of the Consolidated K-Series and has consolidated the Consolidated K-Series into the Company’s condensed consolidated financial statements. Interest income amounts represent interest income earned by securities that are actually owned by the Company. A reconciliation of our net interest income generated by our multi-family credit portfolio to our condensed consolidated financial statements for the three and nine months ended September 30, 2019 and 2018, respectively, is set forth below (dollar amounts in thousands): |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Interest income, multi-family loans held in securitization trusts | $ | 139,818 | $ | 86,458 | $ | 384,743 | $ | 257,179 | |||||||
Interest income, investment securities, available for sale (a) | 3,419 | 2,481 | 11,117 | 7,389 | |||||||||||
Interest income, preferred equity and mezzanine loan investments | 5,505 | 5,874 | 15,660 | 15,182 | |||||||||||
Interest expense, multi-family collateralized debt obligations | (120,329 | ) | (75,145 | ) | (332,041 | ) | (224,310 | ) | |||||||
Interest income, Multi-Family Credit, net | 28,413 | 19,668 | 79,479 | 55,440 | |||||||||||
Interest expense, repurchase agreements | (8,400 | ) | (3,317 | ) | (21,509 | ) | (9,853 | ) | |||||||
Interest expense, securitized debt | — | (730 | ) | (494 | ) | (2,174 | ) | ||||||||
Net interest income, Multi-Family Credit | $ | 20,013 | $ | 15,621 | $ | 57,476 | $ | 43,413 |
(a) | Included in the Company’s accompanying condensed consolidated statements of operations in interest income, investment securities and other interest earning assets. |
(3) | Average Interest Earning Assets for the periods indicated exclude all Consolidated K-Series assets other than those securities actually owned by the Company. |
(4) | Includes interest income earned on cash accounts held by the Company. |
(5) | Our Average Interest Earning Assets is calculated each quarter based on daily average amortized cost for the respective periods. |
(6) | Our Weighted Average Yield on Interest Earning Assets was calculated by dividing our annualized interest income by our Average Interest Earning Assets for the respective periods. |
(7) | Our Average Cost of Funds was calculated by dividing our annualized interest expense by our average interest bearing liabilities, excluding our subordinated debentures and convertible notes, for the respective periods. For the three and nine months ended September 30, 2019 and 2018, respectively, interest expense generated by our subordinated debentures and convertible notes is set forth below (dollar amounts in thousands): |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Subordinated debentures | $ | 711 | $ | 712 | $ | 2,185 | $ | 2,023 | |||||||
Convertible notes | 2,713 | 2,669 | 8,097 | 7,971 |
(8) | Portfolio Net Interest Margin is the difference between our Weighted Average Yield on Interest Earning Assets and our Average Cost of Funds, excluding the weighted average cost of subordinated debentures and convertible notes. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2019 | 2018 | $ Change | 2019 | 2018 | $ Change | ||||||||||||||||||
Investment securities and related hedges | $ | 5,013 | $ | — | $ | 5,013 | $ | 21,815 | $ | (12,270 | ) | $ | 34,085 | ||||||||||
Distressed and other residential mortgage loans at carrying value | (569 | ) | 2,105 | (2,674 | ) | 3,564 | 3,546 | 18 | |||||||||||||||
Distressed and other residential mortgage loans at fair value | 1,658 | 1,127 | 531 | 7,177 | 1,496 | 5,681 | |||||||||||||||||
Total realized gains (losses), net | $ | 6,102 | $ | 3,232 | $ | 2,870 | $ | 32,556 | $ | (7,228 | ) | $ | 39,784 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2019 | 2018 | $ Change | 2019 | 2018 | $ Change | ||||||||||||||||||
Investment securities and related hedges | $ | (13,336 | ) | $ | 2,275 | $ | (15,611 | ) | $ | (42,929 | ) | $ | 26,574 | $ | (69,503 | ) | |||||||
Distressed and other residential mortgage loans at fair value | 16,818 | (484 | ) | 17,302 | 34,580 | (923 | ) | 35,503 | |||||||||||||||
Multi-family loans and debt held in securitization trusts | 7,630 | 12,303 | (4,673 | ) | 22,247 | 31,867 | (9,620 | ) | |||||||||||||||
Total unrealized gains (losses), net | $ | 11,112 | $ | 14,094 | $ | (2,982 | ) | $ | 13,898 | $ | 57,518 | $ | (43,620 | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2019 | 2018 | $ Change | 2019 | 2018 | $ Change | ||||||||||||||||||
Income from preferred equity investments accounted for as equity (1) | $ | 2,458 | $ | 265 | $ | 2,193 | $ | 5,557 | $ | 777 | $ | 4,780 | |||||||||||
Income from joint venture equity investments in multi-family properties | 985 | 4,205 | (3,220 | ) | 6,331 | 7,169 | (838 | ) | |||||||||||||||
Income from entities that invest in residential properties and loans | 431 | 149 | 282 | 826 | 829 | (3 | ) | ||||||||||||||||
Preferred equity and mezzanine loan premiums resulting from early redemption (2) | — | 61 | (61 | ) | 3,364 | 201 | 3,163 | ||||||||||||||||
Losses in Consolidated VIEs (3) | (185 | ) | (1 | ) | (184 | ) | (2,158 | ) | (220 | ) | (1,938 | ) | |||||||||||
Miscellaneous income | 249 | 78 | 171 | 485 | 225 | 260 | |||||||||||||||||
Total other income | $ | 3,938 | $ | 4,757 | $ | (819 | ) | $ | 14,405 | $ | 8,981 | $ | 5,424 |
(1) | Includes income earned from preferred equity ownership interests in entities that invest in multi-family properties accounted for under the equity method of accounting. |
(2) | Includes premiums resulting from early redemptions of preferred equity and mezzanine loan investments accounted for as loans. |
(3) | Losses in Consolidated VIEs are offset by allocations to non-controlling interests in the respective Consolidated VIEs, resulting in net losses to the Company of $0.1 million and $0.5 million for the three months ended September 30, 2019 and 2018, respectively, and $1.5 million and $2.2 million for the nine months ended September 30, 2019 and 2018, respectively. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
2019 | 2018 | $ Change | 2019 | 2018 | $ Change | |||||||||||||||||||
General and Administrative Expenses | ||||||||||||||||||||||||
Salaries, benefits and directors’ compensation | $ | 5,780 | $ | 4,219 | $ | 1,561 | $ | 17,943 | $ | 9,948 | $ | 7,995 | ||||||||||||
Professional fees | 983 | 958 | 25 | 3,263 | 3,164 | 99 | ||||||||||||||||||
Base management and incentive fees | (31 | ) | 844 | (875 | ) | 1,235 | 2,486 | (1,251 | ) | |||||||||||||||
Other | 1,582 | 1,019 | 563 | 4,598 | 3,017 | 1,581 | ||||||||||||||||||
Operating Expenses | ||||||||||||||||||||||||
Expenses related to distressed and other residential mortgage loans | 3,974 | 2,117 | 1,857 | 9,805 | 5,531 | 4,274 | ||||||||||||||||||
Expenses related to real estate held for sale in Consolidated VIEs | — | 755 | (755 | ) | 482 | 3,234 | (2,752 | ) | ||||||||||||||||
Total | $ | 12,288 | $ | 9,912 | $ | 2,376 | $ | 37,326 | $ | 27,380 | $ | 9,946 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2019 | 2018 | $ Change | 2019 | 2018 | $ Change | ||||||||||||||||||
NET INCOME ATTRIBUTABLE TO COMPANY'S COMMON STOCKHOLDERS | $ | 34,835 | $ | 28,048 | $ | 6,787 | $ | 89,528 | $ | 75,510 | $ | 14,018 | |||||||||||
OTHER COMPREHENSIVE INCOME | |||||||||||||||||||||||
Increase (decrease) in fair value of available for sale securities | |||||||||||||||||||||||
Agency RMBS | 5,405 | (9,621 | ) | 15,026 | 35,173 | (39,750 | ) | 74,923 | |||||||||||||||
Non-Agency RMBS | 6,972 | (420 | ) | 7,392 | 12,640 | (1,891 | ) | 14,531 | |||||||||||||||
CMBS | 2,979 | 167 | 2,812 | 14,347 | 765 | 13,582 | |||||||||||||||||
Total | 15,356 | (9,874 | ) | 25,230 | 62,160 | (40,876 | ) | 103,036 | |||||||||||||||
Reclassification adjustment for net gain included in net income - CMBS | (4,444 | ) | — | (4,444 | ) | (18,109 | ) | — | (18,109 | ) | |||||||||||||
TOTAL OTHER COMPREHENSIVE INCOME | 10,912 | (9,874 | ) | 20,786 | 44,051 | (40,876 | ) | 84,927 | |||||||||||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMPANY'S COMMON STOCKHOLDERS | $ | 45,747 | $ | 18,174 | $ | 27,573 | $ | 133,579 | $ | 34,634 | $ | 98,945 |
September 30, 2019 | |||||||||||||||||||||||||||||
Unrealized | Weighted Average | ||||||||||||||||||||||||||||
Investment Securities | Current Par Value | Amortized Cost | Gains | Losses | Fair Value | Coupon (1) | Yield (2) | Outstanding Repurchase Agreements | |||||||||||||||||||||
Available for Sale (“AFS”) | |||||||||||||||||||||||||||||
Agency RMBS | |||||||||||||||||||||||||||||
Agency Fixed-Rate | $ | 866,370 | $ | 898,806 | $ | 4,857 | $ | (6,496 | ) | $ | 897,167 | 3.38 | % | 2.68 | % | $ | 785,266 | ||||||||||||
Agency ARMs | 57,219 | 60,135 | 17 | (1,481 | ) | 58,671 | 3.22 | % | 1.73 | % | 55,598 | ||||||||||||||||||
Total Agency RMBS | 923,589 | 958,941 | 4,874 | (7,977 | ) | 955,838 | 3.37 | % | 2.62 | % | 840,864 | ||||||||||||||||||
Non-Agency RMBS | |||||||||||||||||||||||||||||
Senior | 196,784 | 196,877 | 1,970 | (14 | ) | 198,833 | 5.07 | % | 5.06 | % | 81,016 | ||||||||||||||||||
Mezzanine | 289,210 | 285,007 | 7,616 | (178 | ) | 292,445 | 5.24 | % | 5.66 | % | 90,646 | ||||||||||||||||||
Subordinate | 119,702 | 119,655 | 1,947 | — | 121,602 | 6.03 | % | 6.06 | % | 38,677 | |||||||||||||||||||
IO | 969,116 | 9,085 | 267 | (704 | ) | 8,648 | 0.40 | % | 5.87 | % | — | ||||||||||||||||||
Total Non-Agency RMBS | 1,574,812 | 610,624 | 11,800 | (896 | ) | 621,528 | 3.04 | % | 5.51 | % | 210,339 | ||||||||||||||||||
Agency CMBS | |||||||||||||||||||||||||||||
Senior | 20,258 | 20,258 | 6 | — | 20,264 | 2.71 | % | 2.71 | % | — | |||||||||||||||||||
Mezzanine | 250,774 | 244,463 | 13,825 | (154 | ) | 258,134 | 5.14 | % | 5.49 | % | 162,245 | ||||||||||||||||||
Total Agency CMBS | 271,032 | 264,721 | 13,831 | (154 | ) | 278,398 | 5.11 | % | 5.45 | % | 162,245 | ||||||||||||||||||
ABS | |||||||||||||||||||||||||||||
Residuals | 113 | 48,557 | — | (303 | ) | 48,254 | — | 10.39 | % | — | |||||||||||||||||||
Total ABS | 113 | 48,557 | — | (303 | ) | 48,254 | — | 10.39 | % | — | |||||||||||||||||||
Total - AFS | $ | 2,769,546 | $ | 1,882,843 | $ | 30,505 | $ | (9,330 | ) | $ | 1,904,018 | 3.45 | % | 3.67 | % | $ | 1,213,448 | ||||||||||||
Consolidated K-Series | |||||||||||||||||||||||||||||
Agency CMBS | |||||||||||||||||||||||||||||
Senior | $ | 11,989 | $ | 12,223 | $ | 201 | $ | — | $ | 12,424 | 2.63 | % | 2.29 | % | $ | — | |||||||||||||
Mezzanine | 92,926 | 83,055 | 12,500 | — | 95,555 | 4.22 | % | 5.72 | % | 75,614 | |||||||||||||||||||
PO | 1,176,420 | 545,138 | 167,046 | — | 712,184 | — | 13.22 | % | 508,387 | ||||||||||||||||||||
IO | 9,723,057 | 64,927 | 152 | (177 | ) | 64,902 | 0.10 | % | 4.61 | % | 26,461 | ||||||||||||||||||
Total - Consolidated K-Series | 11,004,392 | 705,343 | 179,899 | (177 | ) | 885,065 | 0.13 | % | 11.44 | % | 610,462 | ||||||||||||||||||
Total Investment Securities | $ | 13,773,938 | $ | 2,588,186 | $ | 210,404 | $ | (9,507 | ) | $ | 2,789,083 | 0.69 | % | 5.80 | % | $ | 1,823,910 |
(1) | Our weighted average coupon was calculated by dividing our annualized coupon income by our weighted average current par value for the respective periods. |
(2) | Our weighted average yield was calculated by dividing our annualized interest income by our weighted average amortized cost for the respective periods. |
December 31, 2018 | |||||||||||||||||||||||||||||
Unrealized | Weighted Average | ||||||||||||||||||||||||||||
Investment Securities | Current Par Value | Amortized Cost | Gains | Losses | Fair Value | Coupon (1) | Yield (2) | Outstanding Repurchase Agreements | |||||||||||||||||||||
Available for Sale (“AFS”) | |||||||||||||||||||||||||||||
Agency RMBS | |||||||||||||||||||||||||||||
Agency Fixed-Rate | $ | 965,501 | $ | 1,002,057 | $ | — | $ | (35,721 | ) | $ | 966,336 | 3.37 | % | 2.76 | % | $ | 857,582 | ||||||||||||
Agency ARMs | 70,360 | 73,949 | 8 | (2,563 | ) | 71,394 | 2.99 | % | 1.68 | % | 67,648 | ||||||||||||||||||
Total Agency RMBS | 1,035,861 | 1,076,006 | 8 | (38,284 | ) | 1,037,730 | 3.34 | % | 2.68 | % | 925,230 | ||||||||||||||||||
Non-Agency RMBS | |||||||||||||||||||||||||||||
Senior | 108,138 | 108,155 | — | (470 | ) | 107,685 | 4.71 | % | 4.71 | % | 80,875 | ||||||||||||||||||
Mezzanine | 98,417 | 97,683 | 166 | (971 | ) | 96,878 | 5.16 | % | 6.42 | % | 7,855 | ||||||||||||||||||
Subordinate | 9,537 | 9,499 | — | (25 | ) | 9,474 | 1.43 | % | 4.34 | % | — | ||||||||||||||||||
Total Non-Agency RMBS | 216,092 | 215,337 | 166 | (1,466 | ) | 214,037 | 4.87 | % | 5.92 | % | 88,730 | ||||||||||||||||||
Agency CMBS | |||||||||||||||||||||||||||||
Mezzanine | 214,151 | 204,011 | 4,150 | (376 | ) | 207,785 | 5.20 | % | 5.17 | % | 117,936 | ||||||||||||||||||
PO | 63,873 | 37,288 | 13,621 | — | 50,909 | — | 13.38 | % | — | ||||||||||||||||||||
IO | 743,446 | 1,747 | 44 | — | 1,791 | 0.12 | % | 7.37 | % | — | |||||||||||||||||||
Total Agency CMBS | 1,021,470 | 243,046 | 17,815 | (376 | ) | 260,485 | 0.63 | % | 7.31 | % | 117,936 | ||||||||||||||||||
Total - AFS | $ | 2,273,423 | $ | 1,534,389 | $ | 17,989 | $ | (40,126 | ) | $ | 1,512,252 | 2.26 | % | 3.40 | % | $ | 1,131,896 | ||||||||||||
Consolidated K-Series | |||||||||||||||||||||||||||||
Agency CMBS | |||||||||||||||||||||||||||||
Mezzanine | $ | 67,323 | $ | 58,449 | $ | 2,780 | $ | (324 | ) | $ | 60,905 | 4.01 | % | 6.13 | % | $ | 47,214 | ||||||||||||
PO | 912,922 | 401,695 | 155,014 | (123 | ) | 556,586 | — | 12.93 | % | 364,467 | |||||||||||||||||||
IO | 6,201,542 | 39,977 | 190 | (59 | ) | 40,108 | 0.10 | % | 4.73 | % | — | ||||||||||||||||||
Total - Consolidated K-Series | 7,181,787 | 500,121 | 157,984 | (506 | ) | 657,599 | 0.11 | % | 11.84 | % | 411,681 | ||||||||||||||||||
Total Investment Securities | $ | 9,455,210 | $ | 2,034,510 | $ | 175,973 | $ | (40,632 | ) | $ | 2,169,851 | 0.75 | % | 5.24 | % | $ | 1,543,577 |
(1) | Our weighted average coupon was calculated by dividing our annualized coupon income by our weighted average current par value for the respective periods. |
(2) | Our weighted average yield was calculated by dividing our annualized interest income by our weighted average amortized cost for the respective periods. |
September 30, 2019 | December 31, 2018 | |||||||
Current balance of loans | $ | 14,727,391 | $ | 13,593,818 | ||||
Number of loans | 749 | 773 | ||||||
Weighted average original LTV | 68.0 | % | 68.8 | % | ||||
Weighted average underwritten debt service coverage ratio | 1.47x | 1.45x | ||||||
Current average loan size | $ | 19,663 | $ | 19,364 | ||||
Weighted average original loan term (in months) | 125 | 123 | ||||||
Weighted average current remaining term (in months) | 79 | 64 | ||||||
Weighted average loan rate | 4.25 | % | 4.34 | % | ||||
First mortgages | 100 | % | 100 | % | ||||
Geographic state concentration (greater than 5.0%): | ||||||||
California | 15.4 | % | 14.8 | % | ||||
Texas | 12.0 | % | 13.0 | % | ||||
Maryland | 6.3 | % | 5.0 | % | ||||
Florida | 5.4 | % | 4.5 | % |
Quarter Ended | Quarterly Average Balance | End of Quarter Balance | Maximum Balance at any Month-End | |||||||||
September 30, 2019 | $ | 1,776,741 | $ | 1,823,910 | $ | 1,823,910 | ||||||
June 30, 2019 | 1,749,293 | 1,843,815 | 1,843,815 | |||||||||
March 31, 2019 | 1,604,421 | 1,654,439 | 1,654,439 | |||||||||
December 31, 2018 | 1,372,459 | 1,543,577 | 1,543,577 | |||||||||
September 30, 2018 | 1,144,080 | 1,130,659 | 1,163,683 | |||||||||
June 30, 2018 | 1,230,648 | 1,179,961 | 1,279,121 | |||||||||
March 31, 2018 | 1,287,939 | 1,287,314 | 1,297,949 | |||||||||
December 31, 2017 | 1,224,771 | 1,276,918 | 1,276,918 | |||||||||
September 30, 2017 | 624,398 | 608,304 | 645,457 | |||||||||
June 30, 2017 | 688,853 | 656,350 | 719,222 | |||||||||
March 31, 2017 | 702,675 | 702,309 | 762,382 |
September 30, 2019 | ||||||||||||||||
Count | Carrying Amount (1) (2) | Investment Amount (2) | Weighted Average Interest or Preferred Return Rate (3) | Weighted Average Remaining Life (Years) | ||||||||||||
Preferred equity investments | 41 | $ | 265,510 | $ | 267,571 | 11.41 | % | 7.8 | ||||||||
Mezzanine loans | 3 | 6,171 | 6,186 | 11.96 | % | 26.0 | ||||||||||
Total | 44 | $ | 271,681 | $ | 273,757 | 11.42 | % | 8.2 |
December 31, 2018 | ||||||||||||||||
Count | Carrying Amount (1) (2) | Investment Amount (2) | Weighted Average Interest or Preferred Return Rate (3) | Weighted Average Remaining Life (Years) | ||||||||||||
Preferred equity investments | 28 | $ | 195,101 | $ | 196,464 | 11.59 | % | 7.2 | ||||||||
Mezzanine loans | 4 | 10,926 | 10,970 | 12.29 | % | 17.5 | ||||||||||
Total | 32 | $ | 206,027 | $ | 207,434 | 11.62 | % | 7.8 |
(1) | Preferred equity and mezzanine loan investments in the amounts of $179.0 million and $165.6 million are included in preferred equity and mezzanine loan investments on the accompanying condensed consolidated balance sheets as of September 30, 2019 and December 31, 2018, respectively. Preferred equity investments in the amounts of $92.7 million and $40.5 million are included in investments in unconsolidated entities on the accompanying condensed consolidated balance sheets as of September 30, 2019 and December 31, 2018, respectively. |
(2) | The difference between the carrying amount and the investment amount consists of any unamortized premium or discount, deferred fees or deferred expenses. |
(3) | Based upon investment amount and contractual interest or preferred return rate. |
Combined Loan to Value at Investment | September 30, 2019 | December 31, 2018 | |||
70.01% - 80.00% | 22.7 | % | 8.5 | % | |
80.01% - 90.00% | 77.3 | % | 91.5 | % | |
Total | 100.0 | % | 100.0 | % |
September 30, 2019 | December 31, 2018 | ||||||||||||
Property Location | Ownership Interest | Carrying Amount | Ownership Interest | Carrying Amount | |||||||||
Evergreens JV Holdings, LLC (1) | Durham, NC | — | $ | — | 85% | $ | 8,200 | ||||||
The Preserve at Port Royal Venture, LLC | Port Royal, SC | 77% | 14,470 | 77% | 13,840 | ||||||||
Total | $ | 14,470 | $ | 22,040 |
(1) | The Company's equity investment was redeemed during the nine months ended September 30, 2019. |
September 30, 2019 | December 31, 2018 | |||||||||||
Strategy | Ownership Interest | Carrying Amount | Ownership Interest | Carrying Amount | ||||||||
Morrocroft Neighborhood Stabilization Fund II, LP | Single-Family Rental Properties | 11% | $ | 11,564 | 11% | $ | 10,954 | |||||
Headlands Asset Management Fund III (Cayman), LP (Headlands Flagship Opportunity Fund Series I) | Residential Mortgage Loans | 49% | 50,215 | — | — | |||||||
Total | $ | 61,779 | $ | 10,954 |
September 30, 2019 | December 31, 2018 | ||||||||||||||||||||
Number of Loans | Unpaid Principal | Fair Value | Number of Loans | Unpaid Principal | Fair Value | ||||||||||||||||
Distressed Residential Mortgage Loans | 4,686 | $ | 790,181 | $ | 761,900 | 3,352 | $ | 627,092 | $ | 576,816 | |||||||||||
Other Residential Mortgage Loans | 2,096 | $ | 359,995 | $ | 354,228 | 1,539 | $ | 161,280 | $ | 160,707 |
Loan to Value at Purchase (1) | September 30, 2019 | December 31, 2018 | |||
50.00% or less | 17.7 | % | 18.5 | % | |
50.01% - 60.00% | 12.5 | % | 13.6 | % | |
60.01% - 70.00% | 16.6 | % | 14.5 | % | |
70.01% - 80.00% | 17.8 | % | 15.9 | % | |
80.01% - 90.00% | 16.0 | % | 15.4 | % | |
90.01% - 100.00% | 10.1 | % | 9.3 | % | |
100.01% and over | 9.3 | % | 12.8 | % | |
Total | 100.0 | % | 100.0 | % |
(1) | For second mortgages, the Company calculates the combined loan to value. |
FICO Scores at Purchase | September 30, 2019 | December 31, 2018 | |||
550 or less | 22.0 | % | 26.0 | % | |
551 to 600 | 21.0 | % | 21.9 | % | |
601 to 650 | 16.8 | % | 17.3 | % | |
651 to 700 | 14.9 | % | 12.7 | % | |
701 to 750 | 11.9 | % | 10.3 | % | |
751 to 800 | 9.2 | % | 7.8 | % | |
801 and over | 4.2 | % | 4.0 | % | |
Total | 100.0 | % | 100.0 | % |
Current Coupon | September 30, 2019 | December 31, 2018 | |||
3.00% or less | 4.8 | % | 8.6 | % | |
3.01% - 4.00% | 18.3 | % | 16.1 | % | |
4.01% - 5.00% | 38.1 | % | 35.2 | % | |
5.01% – 6.00% | 22.0 | % | 19.0 | % | |
6.01% and over | 16.8 | % | 21.1 | % | |
Total | 100.0 | % | 100.0 | % |
Delinquency Status | September 30, 2019 | December 31, 2018 | |||
Current | 83.5 | % | 71.8 | % | |
31 – 60 days | 6.5 | % | 6.4 | % | |
61 – 90 days | 2.4 | % | 12.3 | % | |
90+ days | 7.6 | % | 9.5 | % | |
Total | 100.0 | % | 100.0 | % |
Origination Year | September 30, 2019 | December 31, 2018 | |||
2005 or earlier | 20.6 | % | 23.8 | % | |
2006 | 14.2 | % | 16.0 | % | |
2007 | 24.0 | % | 27.4 | % | |
2008 or later | 41.2 | % | 32.8 | % | |
Total | 100.0 | % | 100.0 | % |
Number of Loans | Unpaid Principal | Carrying Value | ||||||||
September 30, 2019 | 2,080 | $ | 173,325 | $ | 164,794 | |||||
December 31, 2018 | 2,702 | $ | 242,007 | $ | 228,466 |
Loan to Value at Purchase | September 30, 2019 | December 31, 2018 | |||
50.00% or less | 4.6 | % | 3.9 | % | |
50.01% - 60.00% | 5.0 | % | 4.8 | % | |
60.01% - 70.00% | 6.7 | % | 7.6 | % | |
70.01% - 80.00% | 14.1 | % | 12.4 | % | |
80.01% - 90.00% | 14.6 | % | 13.7 | % | |
90.01% - 100.00% | 15.8 | % | 15.0 | % | |
100.01% and over | 39.2 | % | 42.6 | % | |
Total | 100.0 | % | 100.0 | % |
FICO Scores at Purchase | September 30, 2019 | December 31, 2018 | |||
550 or less | 22.1 | % | 20.3 | % | |
551 to 600 | 31.5 | % | 30.5 | % | |
601 to 650 | 29.0 | % | 29.3 | % | |
651 to 700 | 11.5 | % | 12.3 | % | |
701 to 750 | 4.2 | % | 5.3 | % | |
751 to 800 | 1.5 | % | 1.9 | % | |
801 and over | 0.2 | % | 0.4 | % | |
Total | 100.0 | % | 100.0 | % |
Current Coupon | September 30, 2019 | December 31, 2018 | |||
3.00% or less | 6.2 | % | 7.9 | % | |
3.01% - 4.00% | 6.4 | % | 8.5 | % | |
4.01% - 5.00% | 22.2 | % | 21.2 | % | |
5.01% – 6.00% | 13.3 | % | 13.6 | % | |
6.01% and over | 51.9 | % | 48.8 | % | |
Total | 100.0 | % | 100.0 | % |
Delinquency Status | September 30, 2019 | December 31, 2018 | |||
Current | 67.0 | % | 65.7 | % | |
31 – 60 days | 6.8 | % | 10.6 | % | |
61 – 90 days | 3.0 | % | 4.5 | % | |
90+ days | 23.2 | % | 19.2 | % | |
Total | 100.0 | % | 100.0 | % |
Origination Year | September 30, 2019 | December 31, 2018 | |||
2005 or earlier | 30.4 | % | 29.2 | % | |
2006 | 17.4 | % | 17.9 | % | |
2007 | 30.8 | % | 32.1 | % | |
2008 or later | 21.4 | % | 20.8 | % | |
Total | 100.0 | % | 100.0 | % |
Maximum Aggregate Uncommitted Principal Amount | Outstanding Repurchase Agreements | Carrying Value of Loans Pledged | Weighted Average Rate | Weighted Average Months to Maturity | ||||||||||||
September 30, 2019 | $ | 950,000 | $ | 736,348 | $ | 937,682 | 4.05 | % | 4.00 | |||||||
December 31, 2018 | $ | 950,000 | $ | 589,148 | $ | 754,352 | 4.67 | % | 9.24 |
Quarter Ended | Quarterly Average Balance | End of Quarter Balance | Maximum Balance at any Month-End | |||||||||
September 30, 2019 | $ | 745,972 | $ | 736,348 | $ | 755,299 | ||||||
June 30, 2019 | 705,817 | 761,361 | 761,361 | |||||||||
March 31, 2019 | 595,897 | 619,605 | 619,605 | |||||||||
December 31, 2018 | 301,956 | 589,148 | 589,148 | |||||||||
September 30, 2018 | 179,241 | 177,378 | 181,574 | |||||||||
June 30, 2018 | 176,951 | 192,553 | 197,263 | |||||||||
March 31, 2018 | 150,537 | 149,535 | 153,236 | |||||||||
December 31, 2017 | 151,523 | 149,715 | 159,708 | |||||||||
September 30, 2017 | 160,546 | 161,006 | 169,099 | |||||||||
June 30, 2017 | 172,221 | 175,597 | 175,597 | |||||||||
March 31, 2017 | 185,047 | 173,283 | 191,510 |
Number of Loans | Unpaid Principal | Carrying Value | ||||||||
September 30, 2019 | 171 | $ | 48,869 | $ | 45,672 | |||||
December 31, 2018 | 196 | $ | 60,171 | $ | 56,795 |
September 30, 2019 | December 31, 2018 | ||||||||||||||||||||||
Average | High | Low | Average | High | Low | ||||||||||||||||||
General Loan Characteristics: | |||||||||||||||||||||||
Original Loan Balance | $ | 414 | $ | 2,850 | $ | 48 | $ | 425 | $ | 2,850 | $ | 48 | |||||||||||
Current Coupon Rate | 4.87 | % | 6.88 | % | 3.00 | % | 4.75 | % | 6.63 | % | 3.00 | % | |||||||||||
Gross Margin | 2.36 | % | 4.13 | % | 1.25 | % | 2.36 | % | 4.13 | % | 1.13 | % | |||||||||||
Lifetime Cap | 11.32 | % | 12.63 | % | 9.38 | % | 11.32 | % | 12.63 | % | 9.38 | % | |||||||||||
Original Term (Months) | 360 | 360 | 360 | 360 | 360 | 360 | |||||||||||||||||
Remaining Term (Months) | 188 | 195 | 154 | 197 | 204 | 163 | |||||||||||||||||
Average Months to Reset | 5 | 11 | 1 | 5 | 11 | 1 | |||||||||||||||||
Original FICO Score | 727 | 818 | 603 | 725 | 818 | 603 | |||||||||||||||||
Original LTV | 70.45 | % | 95.00 | % | 16.28 | % | 70.54 | % | 95.00 | % | 16.28 | % |
Offering Type | Shares Issued | Net Proceeds (1) | Amount Remaining Available for Issuance under Offering Program | ||||||||
Public offerings of common stock | 104,190,000 | $ | 618,627 | N/A | |||||||
At-the-market common stock | 2,260,200 | $ | 13,621 | $ | 72,526 | ||||||
At-the-market preferred stock | 1,250,707 | $ | 30,490 | $ | 19,045 |
(1) | Proceeds are net of underwriting discounts and commissions and offering expenses, as applicable. |
Class of Stock | Dividend Amount Per Share | Record Date | Payment Date | |||||
Common Stock | $ | 0.20 | September 19, 2019 | October 25, 2019 | ||||
7.75% Series B Cumulative Redeemable Preferred Stock | $ | 0.48 | October 1, 2019 | October 15, 2019 | ||||
7.875% Series C Cumulative Redeemable Preferred Stock | $ | 0.49 | October 1, 2019 | October 15, 2019 | ||||
8.00% Series D Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock | $ | 0.50 | October 1, 2019 | October 15, 2019 |
Changes in Net Interest Income | |
Changes in Interest Rates (basis points) | Changes in Net Interest Income |
+200 | $(28,210) |
+100 | $(14,498) |
-100 | $14,780 |
Fair Value Changes | ||||
Changes in Interest Rates | Changes in Fair Value | Net Duration | ||
(basis points) | (dollar amounts in thousands) | |||
+200 | $(192,212) | 3.2 | ||
+100 | $(86,978) | 2.7 | ||
Base | 2.9 | |||
-100 | $90,230 | 2.5 |
Exhibit | Description | |
Membership Purchase Agreement, by and among Donlon Family LLC, JMP Investment Holdings LLC, Hypotheca Capital, LLC, RiverBanc LLC and the Company, dated May 3, 2016 (Incorporated by reference to Exhibit 2.1 to the Company's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 5, 2016). | ||
Articles of Amendment and Restatement of the Company, as amended (Incorporated by reference to Exhibit 3.1 to the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 10, 2014). | ||
Articles of Amendment of the Company (Incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 10, 2019). | ||
Amended and Restated Bylaws of the Company (Incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-8 filed with the Securities and Exchange Commission on July 1, 2019). | ||
Articles Supplementary designating the Company’s 7.75% Series B Cumulative Redeemable Preferred Stock (the “Series B Preferred Stock”) (Incorporated by reference to Exhibit 3.3 of the Company’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on May 31, 2013). | ||
Articles Supplementary classifying and designating 2,550,000 additional shares of the Series B Preferred Stock (Incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 20, 2015). | ||
Articles Supplementary classifying and designating the Company's 7.875% Series C Cumulative Redeemable Preferred Stock (the “Series C Preferred Stock”) (Incorporated by reference to Exhibit 3.5 of the Company’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on April 21, 2015). | ||
Articles Supplementary classifying and designating the Company's 8.00% Series D Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (the “Series D Preferred Stock”) (Incorporated by reference to Exhibit 3.6 to the Company’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on October 10, 2017). | ||
Articles Supplementary classifying and designating 2,460,000 additional shares of the Series C Preferred Stock (Incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 29, 2019). | ||
Articles Supplementary classifying and designating 2,650,000 additional shares of the Series D Preferred Stock (Incorporated by reference to Exhibit 3.3 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 29, 2019). | ||
Articles Supplementary classifying and designating the Company's 7.875% Series E Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (the “Series E Preferred Stock”) (Incorporated by reference to Exhibit 3.9 to the Company’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on October 15, 2019). | ||
Form of Common Stock Certificate (Incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-11 (Registration No. 333-111668) filed with the Securities and Exchange Commission on June 18, 2004). | ||
Form of Certificate representing the Series B Preferred Stock Certificate (Incorporated by reference to Exhibit 3.4 of the Company’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on May 31, 2013). | ||
Form of Certificate representing the Series C Preferred Stock (Incorporated by reference to Exhibit 3.6 of the Company’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on April 21, 2015). | ||
Form of Certificate representing the Series D Preferred Stock (Incorporated by reference to Exhibit 3.7 to the Company’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on October 10, 2017). | ||
Form of Certificate representing the Series E Preferred Stock (Incorporated by reference to Exhibit 3.10 to the Company’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on October 15, 2019). | ||
Indenture, dated April 15, 2016, by and between NYMT Residential 2016-RP1, LLC and U.S. Bank National Association (Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 19, 2016). | ||
Indenture, dated January 23, 2017, between the Company and U.S. Bank National Association, as trustee (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 23, 2017). | ||
First Supplemental Indenture, dated January 23, 2017, between the Company and U.S. Bank National Association, as trustee (Incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 23, 2017). | ||
Form of 6.25% Senior Convertible Note Due 2022 of the Company (Incorporated by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 23, 2017). | ||
Certain instruments defining the rights of holders of long-term debt securities of the Company and its subsidiaries are omitted pursuant to Item 601(b)(4)(iii) of Regulation S-K. The Company hereby undertakes to furnish to the Securities and Exchange Commission, upon request, copies of any such instruments. |
Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
Certification Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. * | ||
101.INS | XBRL Instance Document ** | |
101.SCH | Taxonomy Extension Schema Document ** | |
101.CAL | Taxonomy Extension Calculation Linkbase Document ** | |
101.DEF XBRL | Taxonomy Extension Definition Linkbase Document ** | |
101.LAB | Taxonomy Extension Label Linkbase Document ** | |
101.PRE | Taxonomy Extension Presentation Linkbase Document ** |
* | Furnished herewith. Such certification shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended. |
** | Submitted electronically herewith. Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at September 30, 2019 and December 31, 2018; (ii) Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2019 and 2018; (iii) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2019 and 2018; (iv) Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2019 and 2018; (v) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018; and (vi) Notes to Condensed Consolidated Financial Statements. |
NEW YORK MORTGAGE TRUST, INC. | |||
Date: | November 7, 2019 | By: | /s/ Steven R. Mumma |
Steven R. Mumma | |||
Chairman of the Board and Chief Executive Officer | |||
(Principal Executive Officer) | |||
Date: | November 7, 2019 | By: | /s/ Kristine R. Nario-Eng |
Kristine R. Nario-Eng | |||
Chief Financial Officer | |||
(Principal Financial and Accounting Officer) |
Exhibit | Description | |
Membership Purchase Agreement, by and among Donlon Family LLC, JMP Investment Holdings LLC, Hypotheca Capital, LLC, RiverBanc LLC and the Company, dated May 3, 2016 (Incorporated by reference to Exhibit 2.1 to the Company's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 5, 2016). | ||
Articles of Amendment and Restatement of the Company, as amended (Incorporated by reference to Exhibit 3.1 to the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 10, 2014). | ||
Articles of Amendment of the Company (Incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 10, 2019). | ||
Amended and Restated Bylaws of the Company (Incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-8 filed with the Securities and Exchange Commission on July 1, 2019). | ||
Articles Supplementary designating the Company’s 7.75% Series B Cumulative Redeemable Preferred Stock (the “Series B Preferred Stock”) (Incorporated by reference to Exhibit 3.3 to the Company’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on May 31, 2013). | ||
Articles Supplementary classifying and designating 2,550,000 additional shares of the Series B Preferred Stock (Incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 20, 2015). | ||
Articles Supplementary classifying and designating the Company's 7.875% Series C Cumulative Redeemable Preferred Stock (the “Series C Preferred Stock”) (Incorporated by reference to Exhibit 3.5 of the Company’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on April 21, 2015). | ||
Articles Supplementary classifying and designating the Company's 8.00% Series D Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (the “Series D Preferred Stock”) (Incorporated by reference to Exhibit 3.6 to the Company’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on October 10, 2017). | ||
Articles Supplementary classifying and designating 2,460,000 additional shares of the Series C Preferred Stock (Incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 29, 2019). | ||
Articles Supplementary classifying and designating 2,650,000 additional shares of the Series D Preferred Stock (Incorporated by reference to Exhibit 3.3 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 29, 2019). | ||
Articles Supplementary classifying and designating the Company's 7.875% Series E Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (the “Series E Preferred Stock”) (Incorporated by reference to Exhibit 3.9 to the Company’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on October 15, 2019). | ||
Form of Common Stock Certificate (Incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-11 (Registration No. 333-111668) filed with the Securities and Exchange Commission on June 18, 2004). | ||
Form of Certificate representing the Series B Preferred Stock Certificate (Incorporated by reference to Exhibit 3.4 of the Company’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on May 31, 2013). | ||
Form of Certificate representing the Series C Preferred Stock (Incorporated by reference to Exhibit 3.6 of the Company’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on April 21, 2015). | ||
Form of Certificate representing the Series D Preferred Stock (Incorporated by reference to Exhibit 3.7 to the Company’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on October 10, 2017). | ||
Form of Certificate representing the Series E Preferred Stock (Incorporated by reference to Exhibit 3.10 to the Company’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on October 15, 2019). | ||
Indenture, dated April 15, 2016, by and between NYMT Residential 2016-RP1, LLC and U.S. Bank National Association (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on April 19, 2016). | ||
Indenture, dated January 23, 2017, between the Company and U.S. Bank National Association, as trustee (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 23, 2017). | ||
First Supplemental Indenture, dated January 23, 2017, between the Company and U.S. Bank National Association, as trustee (Incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 23, 2017). | ||
Form of 6.25% Senior Convertible Note Due 2022 of the Company (Incorporated by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 23, 2017). | ||
Certain instruments defining the rights of holders of long-term debt securities of the Company and its subsidiaries are omitted pursuant to Item 601(b)(4)(iii) of Regulation S-K. The Company hereby undertakes to furnish to the Securities Exchange Commission, upon request, copies of any such instruments. | ||
Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
Certification Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. * | ||
101.INS | XBRL Instance Document ** | |
101.SCH | Taxonomy Extension Schema Document ** | |
101.CAL | Taxonomy Extension Calculation Linkbase Document ** | |
101.DEF XBRL | Taxonomy Extension Definition Linkbase Document ** | |
101.LAB | Taxonomy Extension Label Linkbase Document ** | |
101.PRE | Taxonomy Extension Presentation Linkbase Document ** |
* | Furnished herewith. Such certification shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended. |
** | Submitted electronically herewith. Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at September 30, 2019 and December 31, 2018; (ii) Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2019 and 2018; (iii) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2019 and 2018; (iv) Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2019 and 2018; (v) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018; and (vi) Notes to Condensed Consolidated Financial Statements. |
1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2019 of New York Mortgage Trust, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | November 7, 2019 | |
/s/ Steven R. Mumma | ||
Steven R. Mumma | ||
Chairman of the Board and Chief Executive Officer (Principal Executive Officer) |
1. | I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2019 of New York Mortgage Trust, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | November 7, 2019 | |
/s/ Kristine R. Nario-Eng | ||
Kristine R. Nario-Eng | ||
Chief Financial Officer (Principal Financial and Accounting Officer) |
Date: | November 7, 2019 | |
/s/ Steven R. Mumma | ||
Steven R. Mumma | ||
Chairman of the Board and Chief Executive Officer (Principal Executive Officer) |
Date: | November 7, 2019 | |
/s/ Kristine R. Nario-Eng | ||
Kristine R. Nario-Eng | ||
Chief Financial Officer (Principal Financial and Accounting Officer) |
Use of Special Purpose Entities (SPE) and Variable Interest Entities (VIE) - Securitized Debt (Details) - USD ($) |
Sep. 30, 2019 |
Mar. 25, 2019 |
Mar. 14, 2019 |
Dec. 31, 2018 |
---|---|---|---|---|
Variable Interest Entity [Line Items] | ||||
Carrying value | $ 0 | $ 42,335,000 | ||
Multi-family CMBS Re-securitization | ||||
Variable Interest Entity [Line Items] | ||||
Principal amount | $ 33,200,000 | 33,177,000 | ||
Carrying value | $ 30,121,000 | |||
Multi-family CMBS Re-securitization | LIBOR | ||||
Variable Interest Entity [Line Items] | ||||
Pass-through rate of notes issued | 5.35% | |||
Distressed Residential Mortgage Loan Securitization | ||||
Variable Interest Entity [Line Items] | ||||
Principal amount | $ 6,500,000 | $ 12,381,000 | ||
Carrying value | $ 12,214,000 | |||
Distressed Residential Mortgage Loan Securitization | LIBOR | ||||
Variable Interest Entity [Line Items] | ||||
Pass-through rate of notes issued | 4.00% | |||
Variable Interest Entity, Securitized Debt | ||||
Variable Interest Entity [Line Items] | ||||
Principal amount | $ 0 | |||
Unamortized deferred finance costs | $ 200,000 |
Repurchase Agreements - Outstanding Repurchase Agreement Borrowings by Contractual Maturity (Details) - USD ($) $ in Thousands |
Sep. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Assets Sold under Agreements to Repurchase [Line Items] | ||
Outstanding repurchase agreements | $ 1,823,910 | $ 1,543,577 |
Within 30 days | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Outstanding repurchase agreements | 752,874 | 732,051 |
Over 30 days to 90 days | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Outstanding repurchase agreements | 824,579 | 677,906 |
Over 90 days | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Outstanding repurchase agreements | $ 246,457 | $ 133,620 |
Debt - Schedule of VIE Debt (Details) - KRVI - VIE, Primary Beneficiary - Mortgages $ in Thousands |
Sep. 30, 2019
USD ($)
|
---|---|
Debt Instrument [Line Items] | |
Mortgage Note Amount as of June 30, 2019 | $ 935 |
Interest Rate | 6.50% |
Net Deferred Finance Costs | $ 0 |
Derivative Instruments and Hedging Activities - Fair Value of Derivative Instruments (Details) - Interest rate swaps - USD ($) $ in Thousands |
Sep. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Derivative [Line Items] | ||
Derivative labilities | $ (40,400) | $ 8,500 |
Variation margin | 61,100 | 8,500 |
Derivative assets | 1,800 | |
Trading | ||
Derivative [Line Items] | ||
Derivative assets | $ 20,673 | $ 10,263 |
Distressed and Other Residential Mortgage Loans, At Fair Value - Differences Between Fair Value and Aggregate Unpaid Principal (Details) - 90 days past due - USD ($) $ in Thousands |
Sep. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Fair Value | $ 71,251 | $ 60,117 |
Unpaid Principal Balance | $ 87,882 | $ 75,167 |
Consolidated K-Series (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Condensed Consolidated Balance Sheet of the Consolidated K-Series | The condensed consolidated balance sheets of the Consolidated K-Series at September 30, 2019 and December 31, 2018, respectively, are as follows (dollar amounts in thousands):
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Schedule of Condensed Consolidated Statements of Operations of the Consolidated K-Series | The condensed consolidated statements of operations of the Consolidated K-Series for the three and nine months ended September 30, 2019 and 2018, respectively, are as follows (dollar amounts in thousands):
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Schedule of Geographic Concentration of Credit Risk | The geographic concentrations of credit risk exceeding 5% of the unpaid principal balance of distressed and other residential mortgage loans at fair value as of September 30, 2019 and December 31, 2018, respectively, are as follows:
The geographic concentrations of credit risk exceeding 5% of the total loan balances in our residential mortgage loans held in securitization trusts as of September 30, 2019 and December 31, 2018 are as follows:
The geographic concentrations of credit risk exceeding 5% of the unpaid principal balance of our distressed residential mortgage loans, net as of September 30, 2019 and December 31, 2018, respectively, are as follows:
The geographic concentrations of credit risk exceeding 5% of the total loan balances related to multi-family loans held in securitization trusts as of September 30, 2019 and our CMBS investments included in investment securities available for sale, held in securitization trusts, and multi-family loans held in securitization trusts as of December 31, 2018 are as follows:
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Real Estate Held for Sale in Consolidated VIEs (Tables) |
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||
Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
Schedule of Provisional Summary Real Estate Held for Sale | The following is a summary of the real estate held for sale in consolidated variable interest entities as of December 31, 2018 (dollar amounts in thousands):
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Repurchase Agreements |
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Banking and Thrift [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase Agreements | Repurchase Agreements Investment Securities The Company has entered into repurchase agreements with third party financial institutions to finance its investment securities portfolio. These repurchase agreements are short-term borrowings that bear interest rates typically based on a spread to LIBOR and are secured by the investment securities which they finance. At September 30, 2019 and December 31, 2018, the Company had repurchase agreements secured by investment securities with an outstanding balance of $1.8 billion and $1.5 billion, respectively, and a weighted average interest rate of 3.06% and 3.41%, respectively. The following table presents detailed information about the Company’s borrowings under repurchase agreements secured by investment securities and associated assets pledged as collateral at September 30, 2019 and December 31, 2018 (dollar amounts in thousands):
As of September 30, 2019 and December 31, 2018, the average days to maturity for repurchase agreements secured by investment securities were 71 days and 62 days, respectively. The Company’s accrued interest payable on outstanding repurchase agreements secured by investment securities at September 30, 2019 and December 31, 2018 amounts to $7.1 million and $3.9 million, respectively, and is included in accrued expenses and other liabilities on the Company’s condensed consolidated balance sheets. The following table presents contractual maturity information about the Company’s outstanding repurchase agreements secured by investment securities at September 30, 2019 and December 31, 2018 (dollar amounts in thousands):
As of September 30, 2019, the outstanding balance under our repurchase agreements secured by investment securities was funded at a weighted average advance rate of 86.1% that implies an average “haircut” of 13.9%. As of September 30, 2019, the weighted average “haircut” related to our repurchase agreement financing for our Agency RMBS, non-agency RMBS, and CMBS was approximately 5%, 26%, and 20%, respectively. In the event we are unable to obtain sufficient short-term financing through existing repurchase agreements, or our lenders start to require additional collateral, we may have to liquidate our investment securities at a disadvantageous time, which could result in losses. Any losses resulting from the disposition of our investment securities in this manner could have a material adverse effect on our operating results and net profitability. At September 30, 2019 and December 31, 2018, the Company had financing arrangements with fourteen and eleven counterparties, respectively. As of September 30, 2019, the Company had no exposure where the amount at risk was in excess of 5% of the Company's stockholders’ equity. As of December 31, 2018 the Company's only exposure where the amount at risk was in excess of 5% was to Jefferies & Company, Inc. at 5.04%. As of September 30, 2019, our available liquid assets included unrestricted cash and cash equivalents and unencumbered securities that we believe may be posted as margin. The Company had $65.9 million in cash and cash equivalents and $637.0 million in unencumbered investment securities to meet additional haircuts or market valuation requirements. The unencumbered securities that we believe may be posted as margin as of September 30, 2019 included $67.9 million of Agency RMBS, $187.3 million of CMBS, $333.5 million of non-Agency RMBS and $48.3 million of ABS. The cash and unencumbered securities, which collectively represent 38.5% of our repurchase agreements secured by investment securities, are liquid and could be monetized to pay down or collateralize a liability immediately. Distressed and Other Residential Mortgage Loans The Company has master repurchase agreements with third party financial institutions to fund the purchase of distressed and other residential mortgage loans, including both first and second mortgages. The following table presents detailed information about the Company’s borrowings under these repurchase agreements and associated distressed and other residential mortgage loans pledged as collateral at September 30, 2019 and December 31, 2018 (dollar amounts in thousands):
During the terms of the master repurchase agreements, proceeds from the distressed and other residential mortgage loans will be applied to pay any price differential and to reduce the aggregate repurchase price of the collateral. The financings under the master repurchase agreements are subject to margin calls to the extent the market value of the distressed and other residential mortgage loans falls below specified levels and repurchase may be accelerated upon an event of default under the master repurchase agreements. The master repurchase agreements contain various covenants, including among other things, the maintenance of certain amounts of liquidity, market capitalization, and total stockholders' equity. The Company is in compliance with such covenants as of November 7, 2019. The Company expects to roll outstanding borrowings under these master repurchase agreements into new repurchase agreements or other financings prior to or at maturity. Costs related to the establishment of the repurchase agreements which include commitment, underwriting, legal, accounting and other fees are reflected as deferred charges. Such costs are presented as a deduction from the corresponding debt liability on the Company’s accompanying condensed consolidated balance sheets in the amount of $0.4 million as of September 30, 2019 and $1.2 million as of December 31, 2018. These deferred charges are amortized as an adjustment to interest expense using the effective interest method, or straight line-method, if the result is not materially different.
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Income Taxes - Deferred Tax Asset (Details) - USD ($) $ in Thousands |
Sep. 30, 2019 |
Dec. 31, 2018 |
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Deferred tax assets | ||
Net operating loss carryforward | $ 2,708 | $ 2,416 |
Capital loss carryover | 739 | 739 |
GAAP/Tax basis differences | 4,174 | 3,903 |
Total deferred tax assets | 7,621 | 7,058 |
Deferred tax liabilities | ||
Deferred tax liabilities | 5 | 6 |
Valuation allowance | (6,410) | (6,069) |
Total net deferred tax asset | $ 1,206 | $ 983 |
Preferred Equity and Mezzanine Loan Investments |
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Variable Interest Entity, Nonconsolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Equity and Mezzanine Loan Investments | Preferred Equity and Mezzanine Loan Investments Preferred equity and mezzanine loan investments consist of the following as of September 30, 2019 and December 31, 2018 (dollar amounts in thousands):
There were no delinquent preferred equity or mezzanine loan investments as of September 30, 2019 and December 31, 2018. The geographic concentrations of credit risk exceeding 5% of the total preferred equity and mezzanine loan investment amounts as of September 30, 2019 and December 31, 2018 are as follows:
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Distressed and Other Residential Mortgage Loans, At Fair Value |
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SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distressed and Other Residential Mortgage Loans, at Fair Value | Distressed and Other Residential Mortgage Loans, At Fair Value Certain of the Company’s acquired residential mortgage loans, including distressed residential mortgage loans, non-QM loans and second mortgages, are presented at fair value on its condensed consolidated balance sheets as a result of a fair value election made at the time of acquisition. Subsequent changes in fair value are reported in current period earnings and presented in unrealized gains (losses), net on the Company’s condensed consolidated statements of operations. The Company’s distressed and other residential mortgage loans at fair value consist of the following as of September 30, 2019 and December 31, 2018, respectively (dollar amounts in thousands):
The following table presents the components of realized gains (losses), net and unrealized gains (losses), net attributable to distressed and other residential mortgage loans at fair value for the three and nine months ended September 30, 2019 and 2018, respectively (dollar amounts in thousands):
The geographic concentrations of credit risk exceeding 5% of the unpaid principal balance of distressed and other residential mortgage loans at fair value as of September 30, 2019 and December 31, 2018, respectively, are as follows:
The following table presents the fair value and aggregate unpaid principal balance of the Company's distressed and other residential mortgage loans at fair value greater than 90 days past due and in non-accrual status as of September 30, 2019 and December 31, 2018, respectively (dollar amounts in thousands):
Additionally, the fair value and aggregate unpaid principal balance of distressed and other residential mortgage loans at fair value held in non-accrual status but less than 90 days past due was approximately $2.6 million and $3.1 million, respectively, as of September 30, 2019. Distressed and other residential mortgage loans with a fair value of approximately $854.4 million and $626.2 million at September 30, 2019 and December 31, 2018, respectively, are pledged as collateral for master repurchase agreements (see Note 12).
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Subsequent Events |
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Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On October 10, 2019, the Company filed articles of amendment to its charter which increased the number of shares of stock the Company is authorized to issue from 600,000,000 shares to 1,000,000,000 shares, consisting of 800,000,000 shares of common stock, increased from 400,000,000 shares, and 200,000,000 shares of preferred stock. |
Stockholders' Equity |
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Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders' Equity Dividends on Preferred Stock The Company had 200,000,000 authorized shares of preferred stock, par value $0.01 per share, with 13,250,707 and 12,000,000 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively. At December 31, 2018, the Company had designated 6,000,000 shares of 7.75% Series B Cumulative Redeemable Preferred Stock (“Series B Preferred Stock”), 4,140,000 shares of 7.875% Series C Cumulative Redeemable Preferred Stock (“Series C Preferred Stock”), and 5,750,000 shares of 8.00% Series D Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (“Series D Preferred Stock”). On March 28, 2019, the Company classified and designated an additional 2,460,000 shares and 2,650,000 shares of the Company's authorized but unissued preferred stock as Series C Preferred Stock and Series D Preferred Stock, respectively. At September 30, 2019, the Company had designated 6,000,000 shares, 6,600,000 shares and 8,400,000 shares of Series B Preferred Stock, Series C Preferred Stock, and Series D Preferred Stock, respectively (collectively, the "Preferred Stock"). The Company had 3,138,019 shares of Series B Preferred Stock, 4,144,161 shares of Series C Preferred Stock and 5,968,527 shares of Series D Preferred Stock issued and outstanding as of September 30, 2019. The Company had 3,000,000 shares of Series B Preferred Stock, 3,600,000 shares of Series C Preferred Stock and 5,400,000 shares of Series D Preferred Stock issued and outstanding as of December 31, 2018. Each of the Series B Preferred Stock and the Series C Preferred Stock are entitled to receive a dividend at a rate of 7.75% and 7.875%, respectively, per year on its $25 liquidation preference. The Series D Preferred Stock is entitled to receive a dividend at a fixed rate to, but excluding, October 15, 2027 of 8.00% per year on its $25 liquidation preference. Beginning October 15, 2027, the Series D Preferred Stock is entitled to receive a dividend at a floating rate equal to three-month LIBOR plus a spread of 5.695% per year on its $25 liquidation preference. Each series of the Preferred Stock is senior to the common stock with respect to distributions upon liquidation, dissolution or winding up. The Preferred Stock generally do not have any voting rights, subject to an exception in the event the Company fails to pay dividends on such stock for six or more quarterly periods (whether or not consecutive). Under such circumstances, holders of Preferred Stock voting together as a single class with the holders of all other classes or series of our preferred stock upon which like voting rights have been conferred and are exercisable and which are entitled to vote as a class with the Preferred Stock will be entitled to vote to elect two additional directors to the Company’s Board of Directors (the “Board”) until all unpaid dividends have been paid or declared and set apart for payment. In addition, certain material and adverse changes to the terms of any series of the Preferred Stock cannot be made without the affirmative vote of holders of at least two-thirds of the outstanding shares of the series of Preferred Stock whose terms are being changed. The Series B Preferred Stock, Series C Preferred Stock, and Series D Preferred Stock are not redeemable by the Company prior to June 4, 2018, April 22, 2020, and October 15, 2027, respectively, except under circumstances intended to preserve the Company’s qualification as a REIT and except upon the occurrence of a Change of Control (as defined in the Articles Supplementary designating the Series B Preferred Stock, Series C Preferred Stock, and Series D Preferred Stock, respectively). On and after June 4, 2018, April 22, 2020, and October 15, 2027, the Company may, at its option, redeem the Series B Preferred Stock, Series C Preferred Stock, and Series D Preferred Stock, respectively, in whole or in part, at any time or from time to time, for cash at a redemption price equal to $25.00 per share, plus any accumulated and unpaid dividends. In addition, upon the occurrence of a Change of Control, the Company may, at its option, redeem the Preferred Stock in whole or in part, within 120 days after the first date on which such Change of Control occurred, for cash at a redemption price of $25.00 per share, plus any accumulated and unpaid dividends. The Preferred Stock has no stated maturity, is not subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless repurchased or redeemed by the Company or converted into the Company’s common stock in connection with a Change of Control. Upon the occurrence of a Change of Control, each holder of Preferred Stock will have the right (unless the Company has exercised its right to redeem the Preferred Stock) to convert some or all of the Preferred Stock held by such holder into a number of shares of our common stock per share of the applicable series of Preferred Stock determined by a formula, in each case, on the terms and subject to the conditions described in the applicable Articles Supplementary for such series. From the time of original issuance of the Preferred Stock through September 30, 2019, the Company has declared and paid all required quarterly dividends on such series of stock. The following table presents the relevant information with respect to quarterly cash dividends declared on the Preferred Stock commencing January 1, 2018 through September 30, 2019:
Dividends on Common Stock The following table presents cash dividends declared by the Company on its common stock with respect to each of the quarterly periods commencing January 1, 2018 and ended September 30, 2019:
Public Offerings of Common Stock The following table details the Company's public offerings of common stock during the nine months ended September 30, 2019 (dollar amounts in thousands):
Equity Distribution Agreements On August 10, 2017, the Company entered into an equity distribution agreement (the “Common Equity Distribution Agreement”) with Credit Suisse Securities (USA) LLC (“Credit Suisse”), as sales agent, pursuant to which the Company may offer and sell shares of its common stock, par value $0.01 per share, having a maximum aggregate sales price of up to $100.0 million, from time to time through Credit Suisse. On September 10, 2018, the Company entered into an amendment to the Common Equity Distribution Agreement that increased the maximum aggregate sales price to $177.1 million. The Company has no obligation to sell any of the shares of common stock issuable under the Common Equity Distribution Agreement and may at any time suspend solicitations and offers under the Common Equity Distribution Agreement. There were no shares of the Company's common stock issued under the Common Equity Distribution Agreement during the three months ended September 30, 2019. During the nine months ended September 30, 2019, the Company issued 2,260,200 shares of its common stock under the Common Equity Distribution Agreement, at an average sales price of $6.12 per share, resulting in total net proceeds to the Company of $13.6 million. During the three months ended September 30, 2018, the Company issued 2,433,487 shares of its common stock under the Common Equity Distribution Agreement, at an average sales price of $6.31 per share, resulting in total net proceeds to the Company of $15.2 million. During the nine months ended September 30, 2018, the Company issued 14,588,631 shares of its common stock under the Common Equity Distribution Agreement, at an average sales price of $6.19 per share, resulting in total net proceeds to the Company of $89.0 million. As of September 30, 2019, approximately $72.5 million of common stock remains available for issuance under the Common Equity Distribution Agreement. On March 29, 2019, the Company entered into an equity distribution agreement (the "Preferred Equity Distribution Agreement") with JonesTrading Institutional Services LLC, as sales agent, pursuant to which the Company may offer and sell shares of the Company's Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, having a maximum aggregate gross sales price of up to $50.0 million, from time to time through the sales agent. The Company has no obligation to sell any of the shares of Preferred Stock issuable under the Preferred Equity Distribution Agreement and may at any time suspend solicitations and offers under the Preferred Equity Distribution Agreement. |
Consolidated K-Series - Geographic Concentrations of Credit Risk (Details) |
9 Months Ended | 12 Months Ended |
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Sep. 30, 2019 |
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Texas | ||
Concentration Risk [Line Items] | ||
Geographic concentration, percent | 10.60% | 16.60% |
Florida | ||
Concentration Risk [Line Items] | ||
Geographic concentration, percent | 9.40% | 11.30% |
Geographic Concentration Risk | Multi-family loans held in securitization trusts | California | ||
Concentration Risk [Line Items] | ||
Geographic concentration, percent | 15.40% | 14.80% |
Geographic Concentration Risk | Multi-family loans held in securitization trusts | Texas | ||
Concentration Risk [Line Items] | ||
Geographic concentration, percent | 12.00% | 13.00% |
Geographic Concentration Risk | Multi-family loans held in securitization trusts | Maryland | ||
Concentration Risk [Line Items] | ||
Geographic concentration, percent | 6.30% | 5.00% |
Geographic Concentration Risk | Multi-family loans held in securitization trusts | Florida | ||
Concentration Risk [Line Items] | ||
Geographic concentration, percent | 5.40% | 4.50% |
Stockholders' Equity - Narrative (Details) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | 18 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2019
USD ($)
director
quarter
$ / shares
shares
|
Sep. 30, 2018
USD ($)
$ / shares
shares
|
Sep. 30, 2019
USD ($)
director
quarter
$ / shares
shares
|
Sep. 30, 2018
USD ($)
$ / shares
shares
|
Dec. 31, 2018
$ / shares
shares
|
Mar. 31, 2019 |
Mar. 29, 2019
USD ($)
|
Mar. 28, 2019
shares
|
Sep. 10, 2018
USD ($)
|
Oct. 13, 2017
$ / shares
|
Aug. 10, 2017
USD ($)
$ / shares
|
|
Class of Stock [Line Items] | |||||||||||
Preferred stock, shares authorized (in shares) | shares | 200,000,000 | 200,000,000 | 200,000,000 | ||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||
Preferred stock, shares issued (in shares) | shares | 13,250,707 | 13,250,707 | 13,250,707 | ||||||||
Preferred stock, shares outstanding (in shares) | shares | 12,000,000 | 12,000,000 | 12,000,000 | ||||||||
Preferred stock, liquidation preference per share (in dollars per share) | $ / shares | $ 25.00 | $ 25.00 | |||||||||
Number of quarters with no dividends that results in voting rights | quarter | 6 | 6 | |||||||||
Number of elected directors pending preferred stock voting rights | director | 2 | 2 | |||||||||
Stockholders required for term changes, percentage | 66.67% | 66.67% | |||||||||
Redemption term | 120 days | ||||||||||
Redemption price (in dollars per share) | $ / shares | $ 25.00 | $ 25.00 | |||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||
Proceeds from issuance of preferred stock | $ | $ 30,490 | $ 0 | |||||||||
Equity Distribution Agreements | |||||||||||
Class of Stock [Line Items] | |||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | ||||||||||
Common stock that may be sold (up to) | $ | $ 177,100 | $ 100,000 | |||||||||
Shares issued during period (in shares) | shares | 0 | 2,433,487 | 2,260,200 | 14,588,631 | |||||||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 6.12 | $ 6.12 | |||||||||
Proceeds from issuance of common stock | $ | $ 15,200 | $ 13,600 | $ 89,000 | ||||||||
Common stock reserved for issuance | $ | $ 72,500 | $ 72,500 | |||||||||
Preferred Equity Distribution Agreement | |||||||||||
Class of Stock [Line Items] | |||||||||||
Shares issued during period (in shares) | shares | 589,420 | 1,250,707 | |||||||||
Equity agreement for preferred stock maximum aggregate sales price (up to) | $ | $ 50,000 | ||||||||||
Proceeds from issuance of preferred stock | $ | $ 14,400 | $ 30,500 | |||||||||
Preferred stock available for future issuance, value | $ | $ 19,000 | ||||||||||
Series B Preferred Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Preferred stock, shares authorized (in shares) | shares | 6,000,000 | 6,000,000 | 6,000,000 | ||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||
Preferred stock, shares issued (in shares) | shares | 3,138,019 | 3,138,019 | 3,000,000 | ||||||||
Preferred stock, shares outstanding (in shares) | shares | 3,138,019 | 3,138,019 | 3,000,000 | ||||||||
Preferred stock, cumulative redeemable dividend rate | 7.75% | 7.75% | |||||||||
Preferred stock, liquidation preference per share (in dollars per share) | $ / shares | $ 25 | $ 25 | $ 25 | ||||||||
Series C Preferred Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Preferred stock, shares authorized (in shares) | shares | 6,600,000 | 6,600,000 | 4,140,000 | ||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||
Preferred stock, shares issued (in shares) | shares | 4,144,161 | 4,144,161 | 3,600,000 | ||||||||
Preferred stock, shares outstanding (in shares) | shares | 4,144,161 | 4,144,161 | 3,600,000 | ||||||||
Preferred stock, cumulative redeemable dividend rate | 7.875% | 7.875% | |||||||||
Preferred stock, shares authorized but unissued | shares | 2,460,000 | ||||||||||
Preferred stock, liquidation preference per share (in dollars per share) | $ / shares | $ 25 | $ 25 | $ 25 | ||||||||
Series D Preferred Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Preferred stock, shares authorized (in shares) | shares | 8,400,000 | 8,400,000 | 5,750,000 | ||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||
Preferred stock, shares issued (in shares) | shares | 5,968,527 | 5,968,527 | 5,400,000 | ||||||||
Preferred stock, shares outstanding (in shares) | shares | 5,968,527 | 5,968,527 | 5,400,000 | ||||||||
Preferred stock, cumulative redeemable dividend rate | 8.00% | 8.00% | 8.00% | ||||||||
Preferred stock, shares authorized but unissued | shares | 2,650,000 | ||||||||||
Preferred stock, liquidation preference per share (in dollars per share) | $ / shares | $ 25 | $ 25 | $ 25 | $ 25 | |||||||
LIBOR | Series D Preferred Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Preferred stock, cumulative redeemable dividend rate | 5.695% | ||||||||||
Maximum | Equity Distribution Agreements | |||||||||||
Class of Stock [Line Items] | |||||||||||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 6.31 | $ 6.31 | |||||||||
Maximum | Preferred Equity Distribution Agreement | |||||||||||
Class of Stock [Line Items] | |||||||||||
Sale of stock, price per share (in dollars per share) | $ / shares | 24.78 | 24.78 | |||||||||
Minimum | Equity Distribution Agreements | |||||||||||
Class of Stock [Line Items] | |||||||||||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 6.19 | $ 6.19 | |||||||||
Minimum | Preferred Equity Distribution Agreement | |||||||||||
Class of Stock [Line Items] | |||||||||||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 24.75 | $ 24.75 |
Fair Value of Financial Instruments - Changes in Unrealized Gains (Losses) Included in Earnings for Level 3 Assets and Liabilities (Details) - Level 3 - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Liabilities | ||||
Multi-family debt held in securitization trusts | $ (190,207) | $ 45,456 | $ (780,378) | $ 284,766 |
Multi-family loans held in securitization trust | ||||
Assets | ||||
Multi-family loans held in securitization trusts | 197,837 | (33,153) | 802,625 | (252,899) |
Investment in unconsolidated entities | ||||
Assets | ||||
Multi-family loans held in securitization trusts | 449 | 4,092 | 1,295 | 5,359 |
Distressed and other residential mortgage loans, at fair value | ||||
Assets | ||||
Multi-family loans held in securitization trusts | $ 17,413 | $ (629) | $ 37,079 | $ (754) |
Distressed and Other Residential Mortgage Loans, Net - Schedule of Geographic Concentrations of Credit Risk Exceeding 5% of Total Loan Balances (Details) |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2019 |
Dec. 31, 2018 |
|
New Jersey | ||
Concentration Risk [Line Items] | ||
Geographic concentration, percent | 5.00% | 2.60% |
Florida | ||
Concentration Risk [Line Items] | ||
Geographic concentration, percent | 9.40% | 11.30% |
Residential Mortgage Loans Held in Securitization Trusts and Real Estate Owned Held in Residential Securitization | Geographic Concentration Risk | New York | ||
Concentration Risk [Line Items] | ||
Geographic concentration, percent | 36.00% | 33.90% |
Residential Mortgage Loans Held in Securitization Trusts and Real Estate Owned Held in Residential Securitization | Geographic Concentration Risk | Massachusetts | ||
Concentration Risk [Line Items] | ||
Geographic concentration, percent | 17.50% | 20.00% |
Residential Mortgage Loans Held in Securitization Trusts and Real Estate Owned Held in Residential Securitization | Geographic Concentration Risk | New Jersey | ||
Concentration Risk [Line Items] | ||
Geographic concentration, percent | 12.60% | 14.50% |
Residential Mortgage Loans Held in Securitization Trusts and Real Estate Owned Held in Residential Securitization | Geographic Concentration Risk | Florida | ||
Concentration Risk [Line Items] | ||
Geographic concentration, percent | 11.80% | 9.90% |
Residential Mortgage Loans Held in Securitization Trusts and Real Estate Owned Held in Residential Securitization | Geographic Concentration Risk | Maryland | ||
Concentration Risk [Line Items] | ||
Geographic concentration, percent | 5.40% | 5.30% |
Organization |
9 Months Ended |
---|---|
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization New York Mortgage Trust, Inc., together with its consolidated subsidiaries (“NYMT,” “we,” “our,” or the “Company”), is a real estate investment trust, or REIT, in the business of acquiring, investing in, financing and managing mortgage-related and residential housing-related assets. Our objective is to deliver long-term stable distributions to our stockholders over changing economic conditions through a combination of net interest margin and net realized capital gains from a diversified investment portfolio. Our portfolio includes (i) structured multi-family property investments such as multi-family CMBS and preferred equity in, and mezzanine loans to, owners of multi-family properties, (ii) residential mortgage loans, including distressed residential mortgage loans, non-QM loans, second mortgages, and other residential mortgage loans, (iii) non-Agency RMBS, (iv) Agency RMBS and (v) certain mortgage-, residential housing- and other credit-related assets. The Company conducts its business through the parent company, New York Mortgage Trust, Inc., and several subsidiaries, including special purpose subsidiaries established for securitization purposes, taxable REIT subsidiaries (“TRSs”) and qualified REIT subsidiaries (“QRSs”). The Company consolidates all of its subsidiaries under generally accepted accounting principles in the United States of America (“GAAP”). The Company is organized and conducts its operations to qualify as a REIT for U.S. federal income tax purposes. As such, the Company will generally not be subject to federal income taxes on that portion of its income that is distributed to stockholders if it distributes at least 90% of its annual REIT taxable income to its stockholders by the due date of its federal income tax return and complies with various other requirements.
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Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Computation of Basic and Dilutive Net Income Per Share | The following table presents the computation of basic and diluted earnings per common share for the periods indicated (dollar and share amounts in thousands, except per share amounts):
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
INTEREST INCOME: | ||||
Investment securities and other interest earning assets | $ 17,503 | $ 11,147 | $ 48,173 | $ 35,087 |
Total interest income | 179,602 | 110,249 | 494,842 | 326,863 |
INTEREST EXPENSE: | ||||
Repurchase agreements and other interest bearing liabilities | 23,540 | 10,548 | 66,749 | 30,673 |
Total interest expense | 147,631 | 90,646 | 410,976 | 270,009 |
NET INTEREST INCOME | 31,971 | 19,603 | 83,866 | 56,854 |
NON-INTEREST INCOME: | ||||
Recovery of loan losses | 244 | 840 | 2,605 | 1,235 |
Realized gains (losses), net | 6,102 | 3,232 | 32,556 | (7,228) |
Unrealized gains (losses), net | 11,112 | 14,094 | 13,898 | 57,518 |
Loss on extinguishment of debt | 0 | 0 | (2,857) | 0 |
Income from real estate held for sale in consolidated variable interest entities | 0 | 1,380 | 215 | 4,759 |
Other income | 3,938 | 4,757 | 14,405 | 8,981 |
Total non-interest income | 21,396 | 24,303 | 60,822 | 65,265 |
GENERAL, ADMINISTRATIVE AND OPERATING EXPENSES: | ||||
General and administrative expenses | 8,345 | 6,196 | 25,804 | 16,129 |
Base management and incentive fees | (31) | 844 | 1,235 | 2,486 |
Expenses related to distressed and other residential mortgage loans | 3,974 | 2,117 | 9,805 | 5,531 |
Expenses related to real estate held for sale in consolidated variable interest entities | 0 | 755 | 482 | 3,234 |
Total general, administrative and operating expenses | 12,288 | 9,912 | 37,326 | 27,380 |
INCOME FROM OPERATIONS BEFORE INCOME TAXES | 41,079 | 33,994 | 107,362 | 94,739 |
Income tax benefit | (187) | (454) | (247) | (547) |
NET INCOME | 41,266 | 34,448 | 107,609 | 95,286 |
Net loss (income) attributable to non-controlling interest in consolidated variable interest entities | 113 | (475) | 645 | (2,001) |
NET INCOME ATTRIBUTABLE TO COMPANY | 41,379 | 33,973 | 108,254 | 93,285 |
Preferred stock dividends | (6,544) | (5,925) | (18,726) | (17,775) |
NET INCOME ATTRIBUTABLE TO COMPANY'S COMMON STOCKHOLDERS | $ 34,835 | $ 28,048 | $ 89,528 | $ 75,510 |
Basic earnings per common share (in dollars per share) | $ 0.15 | $ 0.21 | $ 0.44 | $ 0.63 |
Diluted earnings per common share (in dollars per share) | $ 0.15 | $ 0.20 | $ 0.43 | $ 0.60 |
Weighted average shares outstanding-basic (in shares) | 234,043 | 132,413 | 203,270 | 119,955 |
Weighted average shares outstanding-diluted (in shares) | 255,537 | 152,727 | 224,745 | 140,044 |
Convertible notes | ||||
INTEREST EXPENSE: | ||||
Interest expense | $ 2,713 | $ 2,669 | $ 8,097 | $ 7,971 |
Subordinated debentures | ||||
INTEREST EXPENSE: | ||||
Subordinated debentures | 711 | 712 | 2,185 | 2,023 |
Securitized debt | ||||
INTEREST EXPENSE: | ||||
Interest expense | 0 | 1,110 | 742 | 3,684 |
Distressed and other residential mortgage loans | ||||
INTEREST INCOME: | ||||
Interest income | 16,776 | 6,770 | 46,266 | 19,415 |
Preferred equity and mezzanine loan investments | ||||
INTEREST INCOME: | ||||
Interest income | 5,505 | 5,874 | 15,660 | 15,182 |
Multi-family loans held in securitization trusts | ||||
INTEREST INCOME: | ||||
Interest income | 139,818 | 86,458 | 384,743 | 257,179 |
Residential collateralized debt obligations | ||||
INTEREST EXPENSE: | ||||
Interest expense | 338 | 462 | 1,162 | 1,348 |
Multi-family collateralized debt obligations | ||||
INTEREST EXPENSE: | ||||
Interest expense | $ 120,329 | $ 75,145 | $ 332,041 | $ 224,310 |
Investment Securities Available for Sale - Schedule of Available for Sale Securities (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2019 |
Dec. 31, 2018 |
|
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | $ 1,882,843 | $ 1,534,389 |
Unrealized Gains | 30,505 | 17,989 |
Unrealized Losses | (9,330) | (40,126) |
Fair Value | 1,904,018 | 1,512,252 |
Agency ARMs | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | 60,135 | 73,949 |
Unrealized Gains | 17 | 8 |
Unrealized Losses | (1,481) | (2,563) |
Fair Value | $ 58,671 | 71,394 |
Weighted average reset period | 27 years | |
Agency ARMs | Freddie Mac | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | $ 23,841 | 26,338 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (675) | (1,052) |
Fair Value | 23,166 | 25,286 |
Agency ARMs | Fannie Mae | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | 33,323 | 43,984 |
Unrealized Gains | 17 | 8 |
Unrealized Losses | (705) | (1,384) |
Fair Value | 32,635 | 42,608 |
Agency ARMs | Ginnie Mae | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | 2,971 | 3,627 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (101) | (127) |
Fair Value | 2,870 | 3,500 |
Agency Fixed- Rate | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | 898,806 | 1,002,057 |
Unrealized Gains | 4,857 | 0 |
Unrealized Losses | (6,496) | (35,721) |
Fair Value | 897,167 | 966,336 |
Agency Fixed- Rate | Freddie Mac | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | 79,266 | 87,018 |
Unrealized Gains | 997 | 0 |
Unrealized Losses | (433) | (2,526) |
Fair Value | 79,830 | 84,492 |
Agency Fixed- Rate | Fannie Mae | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | 819,540 | 915,039 |
Unrealized Gains | 3,860 | 0 |
Unrealized Losses | (6,063) | (33,195) |
Fair Value | 817,337 | 881,844 |
Agency RMBS | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | 958,941 | 1,076,006 |
Unrealized Gains | 4,874 | 8 |
Unrealized Losses | (7,977) | (38,284) |
Fair Value | 955,838 | 1,037,730 |
Non-Agency RMBS | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | 610,624 | 215,337 |
Unrealized Gains | 11,800 | 166 |
Unrealized Losses | (896) | (1,466) |
Fair Value | $ 621,528 | 214,037 |
Weighted average reset period | 45 years | |
CMBS | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | $ 264,721 | 243,046 |
Unrealized Gains | 13,831 | 17,815 |
Unrealized Losses | (154) | (376) |
Fair Value | $ 278,398 | 260,485 |
Weighted average reset period | 1 month | |
CMBS | Available-for-sale securities | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Investment securities, available for sale held in securitization trusts | 52,700 | |
ABS | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | $ 48,557 | 0 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (303) | 0 |
Fair Value | $ 48,254 | $ 0 |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes For the three and nine months ended September 30, 2019 and 2018, the Company qualified to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), for U.S. federal income tax purposes. As long as the Company qualifies as a REIT, the Company generally will not be subject to U.S. federal income taxes on its taxable income to the extent it annually distributes at least 100% of its taxable income to stockholders and does not engage in prohibited transactions. Certain activities the Company performs may produce income that will not be qualifying income for REIT purposes. The Company has designated its TRSs to engage in these activities. The tables below reflect the taxes accrued at the TRS level and the tax attributes included in the consolidated financial statements. The income tax provision for the three and nine months ended September 30, 2019 and 2018, respectively, is comprised of the following components (dollar amounts in thousands):
Deferred Tax Assets and Liabilities The major sources of temporary differences included in the deferred tax assets and their deferred tax effect as of September 30, 2019 and December 31, 2018 are as follows (dollar amounts in thousands):
As of September 30, 2019, the Company, through wholly-owned TRSs, had incurred net operating losses in the aggregate amount of approximately $8.0 million. The Company’s carryforward net operating losses can be carried forward indefinitely until they are offset by future taxable income. Additionally, as of September 30, 2019, the Company, through one of its wholly-owned TRSs, had also incurred approximately $2.2 million in capital losses. The Company's carryforward capital losses will expire between 2023 and 2024 if they are not offset by future capital gains. At September 30, 2019, the Company has recorded a valuation allowance against certain deferred tax assets as management does not believe that it is more likely than not that these deferred tax assets will be realized. The Company files income tax returns with the U.S. federal government and various state and local jurisdictions. The Company's federal, state and city income tax returns are subject to examination by the Internal Revenue Service and related tax authorities generally for three years after they were filed. The Company has assessed its tax positions for all open years and concluded that there are no material uncertainties to be recognized. In addition, based on the Company’s evaluation, the Company has concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements.
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Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company has established and documented processes for determining fair values. Fair value is based upon quoted market prices, where available. If listed prices or quotes are not available, then fair value is based upon internally developed models that primarily use inputs that are market-based or independently-sourced market parameters, including interest rate yield curves. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of valuation hierarchy are defined as follows: Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement. The following describes the valuation methodologies used for the Company’s financial instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy.
The Company’s CMBS held in securitization trusts at December 31, 2018 were comprised of first loss POs and certain IOs for which there were not substantially similar securities that traded frequently. The Company classified these securities as Level 3 fair values. Fair value of the Company’s CMBS investments held in securitization trusts was based on an internal valuation model that considered expected cash flows from the underlying loans and yields required by market participants. The significant unobservable inputs used in the measurement of these investments were projected losses of certain identified loans within the pool of loans and a discount rate. The discount rate used in determining fair value incorporated default rate, loss severity and current market interest rates. The discount rate ranged from 4.5% to 9.5% as of December 31, 2018. Significant increases or decreases in these inputs would have resulted in a significantly lower or higher fair value measurement.
For performing and re-performing loans, estimates of fair value are derived using a discounted cash flow model, where estimates of cash flows are determined from scheduled payments for each loan, adjusted using forecast prepayment rates, default rates and rates for loss upon default. For non-performing loans, asset liquidation cash flows are derived based on the estimated time to liquidate the loan, expected liquidation costs and home price appreciation. The discount rate used in determining fair value for distressed and other residential mortgage loans ranges from 3.9% to 12.8%. Any changes to the valuation methodology are reviewed by management to ensure the changes are appropriate. As markets and products develop and the pricing for certain products becomes more transparent, the Company continues to refine its valuation methodologies. The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies, or assumptions, to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The Company uses inputs that are current as of each reporting date, which may include periods of market dislocation, during which time price transparency may be reduced. This condition could cause the Company’s financial instruments to be reclassified from Level 2 to Level 3 in future periods. The following table presents the Company’s financial instruments measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018, respectively, on the Company’s condensed consolidated balance sheets (dollar amounts in thousands):
The following tables detail changes in valuation for the Level 3 assets for the nine months ended September 30, 2019 and 2018, respectively (amounts in thousands): Level 3 Assets:
The following table details changes in valuation for the Level 3 liabilities (Multi-family CDOs) for the nine months ended September 30, 2019 and 2018, respectively (amounts in thousands): Level 3 Liabilities:
The following table details the changes in unrealized gains (losses) included in earnings for the three and nine months ended September 30, 2019 and 2018 for our Level 3 assets and liabilities held as of September 30, 2019 and 2018, respectively (dollar amounts in thousands):
The following table presents assets measured at fair value on a non-recurring basis as of September 30, 2019 and December 31, 2018, respectively, on the Company's condensed consolidated balance sheets (dollar amounts in thousands):
The following table presents gains (losses) incurred for assets measured at fair value on a non-recurring basis for the three and nine months ended September 30, 2019 and 2018, respectively, on the Company’s condensed consolidated statements of operations (dollar amounts in thousands):
Residential Mortgage Loans Held in Securitization Trusts – Impaired Loans, net – Impaired residential mortgage loans held in securitization trusts are recorded at amortized cost less specific loan loss reserves. Impaired loan value is based on management’s estimate of the net realizable value taking into consideration local market conditions of the property, updated appraisal values of the property and estimated expenses required to remediate the impaired loan. The following table presents the carrying value and estimated fair value of the Company’s financial instruments at September 30, 2019 and December 31, 2018, respectively (dollar amounts in thousands):
In addition to the methodology to determine the fair value of the Company’s financial assets and liabilities reported at fair value on a recurring basis and non-recurring basis, as previously described, the following methods and assumptions were used by the Company in arriving at the fair value of the Company’s other financial instruments in the table immediately above:
h. Convertible notes – The fair value is based on quoted prices provided by dealers who make markets in similar financial instruments.
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Consolidated K-Series - Condensed Statement of Operations of Consolidated K-Series (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Condensed Income Statements, Captions [Line Items] | ||||
Interest expense | $ 147,631 | $ 90,646 | $ 410,976 | $ 270,009 |
NET INTEREST INCOME | 31,971 | 19,603 | 83,866 | 56,854 |
Unrealized gains, net | 11,112 | 14,094 | 13,898 | 57,518 |
NET INCOME ATTRIBUTABLE TO COMPANY | 41,379 | 33,973 | 108,254 | 93,285 |
Consolidated K-Series | ||||
Condensed Income Statements, Captions [Line Items] | ||||
Interest income | 139,818 | 86,458 | 384,743 | 257,179 |
Interest expense | 120,329 | 75,145 | 332,041 | 224,310 |
NET INTEREST INCOME | 19,489 | 11,313 | 52,702 | 32,869 |
Unrealized gains, net | 7,630 | 12,303 | 22,247 | 31,867 |
NET INCOME ATTRIBUTABLE TO COMPANY | $ 27,119 | $ 23,616 | $ 74,949 | $ 64,736 |
Fair Value of Financial Instruments - Carrying Value and Estimated Fair Value of the Company's Financial Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
---|---|---|---|
Financial Assets: | |||
Cash and cash equivalents | $ 65,906 | $ 103,724 | $ 57,471 |
Investment securities available for sale | 1,904,018 | 1,512,252 | |
Preferred equity and mezzanine loan investments, carrying value | 205,642 | 114,821 | |
Derivative assets | 20,673 | 10,263 | |
Financial Liabilities | |||
Outstanding repurchase agreements | 1,823,910 | 1,543,577 | |
Subordinated debentures, carrying value | 45,000 | 45,000 | |
Convertible notes, carrying value | 132,395 | 130,762 | |
Residential collateralized debt obligations | |||
Financial Liabilities | |||
Secured debt, carrying value | 42,119 | 53,040 | |
Multi-family collateralized debt obligations | |||
Financial Liabilities | |||
Secured debt, carrying value | 14,978,199 | 11,022,248 | |
Level 1 | |||
Financial Assets: | |||
Cash and cash equivalents | 65,906 | 103,724 | |
Cash and cash equivalents, estimated fair value | 65,906 | 103,724 | |
Level 3 | |||
Financial Assets: | |||
Investment in unconsolidated entities, carrying value | 168,933 | 73,466 | |
Investments in unconsolidated entities, estimated fair value | 170,150 | 73,833 | |
Preferred equity and mezzanine loan investments, carrying value | 178,997 | 165,555 | |
Preferred equity and mezzanine loan investments, estimated fair value | 181,626 | 167,739 | |
Mortgage loans held for sale, net, carrying value | 2,437 | 3,414 | |
Mortgage loans held for sale, net, estimated fair value | 2,525 | 3,584 | |
Mortgage loans held for investment, carrying value | 0 | 1,580 | |
Mortgage loans held for investment, estimated fair value | 0 | 1,580 | |
Financial Liabilities | |||
Secured debt, carrying value | 0 | 42,335 | |
Secured debt, estimated fair value | 0 | 45,030 | |
Subordinated debentures, carrying value | 45,000 | 45,000 | |
Subordinated debentures, estimated fair value | 41,273 | 44,897 | |
Level 3 | Residential collateralized debt obligations | |||
Financial Liabilities | |||
Secured debt, carrying value | 42,119 | 53,040 | |
Secured debt, estimated fair value | 40,534 | 50,031 | |
Level 3 | Multi-family collateralized debt obligations | |||
Financial Liabilities | |||
Secured debt, carrying value | 14,978,199 | 11,022,248 | |
Secured debt, estimated fair value | 14,978,199 | 11,022,248 | |
Level 3 | Distressed and other residential mortgage loans, at fair value | |||
Financial Assets: | |||
Residential mortgage loans, carrying value | 1,116,128 | 737,523 | |
Residential mortgage loans, estimated fair value | 1,116,128 | 737,523 | |
Level 3 | Distressed residential mortgage loans | |||
Financial Assets: | |||
Residential mortgage loans, carrying value | 210,466 | 285,261 | |
Residential mortgage loans, estimated fair value | 213,398 | 289,376 | |
Level 3 | Multi-family loans held in securitization trusts | |||
Financial Assets: | |||
Residential mortgage loans, carrying value | 15,863,264 | 11,679,847 | |
Residential mortgage loans, estimated fair value | 15,863,264 | 11,679,847 | |
Level 2 | |||
Financial Assets: | |||
Derivative assets | 20,673 | 10,263 | |
Financial Liabilities | |||
Convertible notes, carrying value | 132,395 | 130,762 | |
Convertible notes, estimated fair value | 140,557 | 135,689 | |
Level 2 | Portfolio Investments | |||
Financial Liabilities | |||
Outstanding repurchase agreements | $ 2,559,880 | $ 2,131,505 |
Fair Value of Financial Instruments - Valuation for Level 3 Liabilities (Details) - USD ($) $ in Thousands |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Dec. 31, 2018 |
|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at beginning of period | $ 11,022,248 | $ 9,189,459 | |
Total losses (gains) (realized/unrealized) | |||
Included in earnings | 694,043 | (350,674) | |
Purchases | 3,633,525 | 767,477 | |
Paydowns | (368,107) | (101,949) | |
Balance at the end of period | 14,978,199 | 9,504,313 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Liabilities of consolidated VIEs | 15,072,191 | $ 11,191,736 | |
Charge-off | (3,510) | ||
Consolidated K-Series | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Liabilities of consolidated VIEs | 3,600,000 | $ 800,000 | |
Multi-family loans held in securitization trust | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Charge-off | $ (3,510) | $ 0 |
Distressed and Other Residential Mortgage Loans, Net - Delinquencies in Portfolio of Residential Mortgage Loans Held in Securitization Trusts (Details) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2019
USD ($)
loan
|
Dec. 31, 2018
USD ($)
loan
|
|
Financing Receivable, Past Due [Line Items] | ||
Real estate owned through foreclosure, Number of Delinquent Loans | loan | 1 | |
Real estate owned through foreclosure, Total Unpaid Principal | $ | $ 360 | |
Real estate owned through foreclosure, % of Loan Portfolio | 0.73% | |
90 | ||
Financing Receivable, Past Due [Line Items] | ||
Number of Delinquent Loans | loan | 17 | 19 |
Total Unpaid Principal | $ | $ 10,289 | $ 10,926 |
% of Loan Portfolio | 20.92% | 18.16% |
Stockholders' Equity - Schedule of Public Offering of Common Stock (Details) - Underwritten Public Offering - Common Stock - USD ($) $ in Thousands |
1 Months Ended | ||||
---|---|---|---|---|---|
Sep. 30, 2019 |
Jul. 31, 2019 |
May 31, 2019 |
Mar. 31, 2019 |
Jan. 31, 2019 |
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Class of Stock [Line Items] | |||||
Shares Issued | 28,750,000 | 23,000,000 | 20,700,000 | 17,250,000 | 14,490,000 |
Net Proceeds | $ 173,093 | $ 137,500 | $ 123,102 | $ 101,160 | $ 83,772 |
Use of Special Purpose Entities (SPE) and Variable Interest Entities (VIE) - Narrative (Details) $ in Thousands |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|---|
Mar. 14, 2019
USD ($)
|
Mar. 31, 2017
variable_interest_entity
|
Sep. 30, 2019
USD ($)
securitization
|
Sep. 30, 2018
USD ($)
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Sep. 30, 2019
USD ($)
securitization
|
Sep. 30, 2018
USD ($)
|
Dec. 31, 2018
USD ($)
securitization
|
|
Variable Interest Entity [Line Items] | |||||||
Loss on extinguishment of debt | $ | $ 0 | $ 0 | $ 2,857 | $ 0 | |||
Unconsolidated VIE, maximum loss exposure | $ | 381,700 | $ 381,700 | $ 269,800 | ||||
RBDHC | |||||||
Variable Interest Entity [Line Items] | |||||||
Ownership percentage | 100.00% | ||||||
Riverchase Landing and The Clusters | |||||||
Variable Interest Entity [Line Items] | |||||||
Number of variable interest entities consolidated | variable_interest_entity | 2 | ||||||
Receivables and other assets | |||||||
Variable Interest Entity [Line Items] | |||||||
Real estate under development | $ | $ 13,900 | $ 13,900 | 22,000 | ||||
Multi-family CMBS Re-securitization | |||||||
Variable Interest Entity [Line Items] | |||||||
Principal amount | $ | $ 33,200 | $ 33,177 | |||||
Loss on extinguishment of debt | $ | $ 2,900 | ||||||
Multi-family CMBS Re-securitization | K-Series | |||||||
Variable Interest Entity [Line Items] | |||||||
Number of consolidated securitizations | securitization | 1 | ||||||
VIE, Primary Beneficiary | RBDHC | |||||||
Variable Interest Entity [Line Items] | |||||||
Noncontrolling interest, ownership by parent, percentage | 50.00% | ||||||
VIE, Primary Beneficiary | K-Series | |||||||
Variable Interest Entity [Line Items] | |||||||
Number of consolidated securitizations | securitization | 12 | 12 | 9 | ||||
Non Financings Multi Family CMBS | K-Series | |||||||
Variable Interest Entity [Line Items] | |||||||
Number of securitizations, non-financing VIE's | securitization | 12 | 12 | 8 | ||||
Residential Mortgage Loans Held In Securitization Trusts Net | |||||||
Variable Interest Entity [Line Items] | |||||||
Number of securitizations completed to date | securitization | 4 | 4 | |||||
Number of securitizations, consolidated, accounted for as permanent financing | securitization | 3 | 3 |
Stock Based Compensation (Tables) |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Nonvested Restricted Stock Activity | A summary of the activity of the Company's non-vested restricted stock collectively under the 2010 Plan and 2017 Plan for the nine months ended September 30, 2019 and 2018, respectively, is presented below:
(1) The grant date fair value of restricted stock awards is based on the closing market price of the Company’s common stock at the grant date.
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Schedule of PSU Award Activity | A summary of the activity of the target PSU Awards under the 2017 Plan for the nine months ended September 30, 2019 and 2018, respectively, is presented below:
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Cover - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2019 |
Nov. 07, 2019 |
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Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-32216 | |
Entity Registrant Name | NEW YORK MORTGAGE TRUST, INC. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 47-0934168 | |
Entity Address, Address Line One | 90 Park Avenue | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10016 | |
City Area Code | 212 | |
Local Phone Number | 792-0107 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 262,621,039 | |
Amendment Flag | false | |
Entity Central Index Key | 0001273685 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Common Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | NYMT | |
Security Exchange Name | NASDAQ | |
7.75% Series B Cumulative Redeemable Preferred Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 7.75% Series B Cumulative Redeemable Preferred Stock, par value $0.01 per share, $25.00 Liquidation Preference | |
Trading Symbol | NYMTP | |
Security Exchange Name | NASDAQ | |
7.875% Series C Cumulative Redeemable Preferred Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 7.875% Series C Cumulative Redeemable Preferred Stock, par value $0.01 per share, $25.00 Liquidation Preference | |
Trading Symbol | NYMTO | |
Security Exchange Name | NASDAQ | |
8.000% Series D Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 8.000% Series D Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock, par value $0.01 per share, $25.00 Liquidation Preference | |
Trading Symbol | NYMTN | |
Security Exchange Name | NASDAQ | |
7.875% Series E Fixed-to-Floating Rate Cumulative Redeemable, Preferred Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 7.875% Series E Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock, par value $0.01 per share, $25.00 Liquidation Preference | |
Trading Symbol | NYMTM | |
Security Exchange Name | NASDAQ |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Income Statement [Abstract] | ||||
NET INCOME ATTRIBUTABLE TO COMPANY'S COMMON STOCKHOLDERS | $ 34,835 | $ 28,048 | $ 89,528 | $ 75,510 |
OTHER COMPREHENSIVE INCOME (LOSS) | ||||
Increase (decrease) in fair value of available for sale securities | 15,356 | (9,874) | 62,160 | (40,876) |
Reclassification adjustment for net gain included in net income | (4,444) | 0 | (18,109) | 0 |
TOTAL OTHER COMPREHENSIVE INCOME (LOSS) | 10,912 | (9,874) | 44,051 | (40,876) |
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMPANY'S COMMON STOCKHOLDERS | $ 45,747 | $ 18,174 | $ 133,579 | $ 34,634 |
Investment Securities Available for Sale - Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
Dec. 31, 2018 |
|
Schedule of Investments [Line Items] | |||||
Proceeds from sales of investment securities | $ 41,200,000 | $ 98,000,000.0 | $ 26,900,000 | ||
Realized net gain (loss) on sales of investment securities available for sale | 5,000,000.0 | $ 21,800,000 | (12,300,000) | ||
Contractual maturities (up to) | 41 years | ||||
Weighted average life of available for sale securities portfolio | 5 years 7 months 6 days | 5 years 8 months 12 days | |||
Gross unrealized losses | (8,323,000) | $ (8,323,000) | $ (40,126,000) | ||
Other-than-temporary impairment recorded in earnings | 0 | $ 0 | 0 | $ 0 | |
Agency RMBS | |||||
Schedule of Investments [Line Items] | |||||
Gross unrealized losses | (7,977,000) | (7,977,000) | (38,284,000) | ||
Non-Agency RMBS | |||||
Schedule of Investments [Line Items] | |||||
Gross unrealized losses | (192,000) | (192,000) | (1,466,000) | ||
CMBS | |||||
Schedule of Investments [Line Items] | |||||
Gross unrealized losses | $ (154,000) | $ (154,000) | $ (376,000) |
Summary of Significant Accounting Policies |
9 Months Ended |
---|---|
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Definitions – The following defines certain of the commonly used terms in these financial statements: “RMBS” refers to residential mortgage-backed securities comprised of adjustable-rate, hybrid adjustable-rate, fixed-rate, interest only and inverse interest only and principal only securities; “Agency RMBS” refers to RMBS representing interests in or obligations backed by pools of mortgage loans issued or guaranteed by a government sponsored enterprise (“GSE”), such as the Federal National Mortgage Association (“Fannie Mae”) or the Federal Home Loan Mortgage Corporation (“Freddie Mac”), or an agency of the U.S. government, such as the Government National Mortgage Association (“Ginnie Mae”); “non-Agency RMBS” refers to RMBS that are not guaranteed by any agency of the U.S. Government or GSE; “IOs” refers collectively to interest only and inverse interest only mortgage-backed securities that represent the right to the interest component of the cash flow from a pool of mortgage loans; “POs” refers to mortgage-backed securities that represent the right to the principal component of the cash flow from a pool of mortgage loans; “ARMs” refers to adjustable-rate residential mortgage loans; “ARM loans” and “residential securitized loans” each refer to prime credit quality residential ARMs held in our securitization trusts formed in 2005; “Agency ARMs” refers to Agency RMBS comprised of adjustable-rate and hybrid adjustable-rate RMBS; “Agency fixed-rate RMBS” refers to Agency RMBS comprised of fixed-rate RMBS; “ABS” refers to debt and/or equity tranches of securitizations backed by various asset classes including, but not limited to, automobiles, aircraft, credit cards, equipment, franchises, recreational vehicles and student loans; “CMBS” refers to commercial mortgage-backed securities comprised of commercial mortgage pass-through securities, as well as PO, IO, or senior or mezzanine securities that represent the right to a specific component of the cash flow from a pool of commercial mortgage loans; “Multi-family CMBS” refers to CMBS backed by commercial mortgage loans on multi-family properties; “CDOs” refers to collateralized debt obligations; “non-QM loans” refers to residential mortgage loans that are not deemed “qualified mortgage,” or “QM,” loans under the rules of the Consumer Financial Protection Bureau (“CFPB”); “qualified mortgage” refers to a mortgage loan eligible for delivery to a GSE under the rules of the CFPB, which have certain requirements such as debt-to-income ratio, being fully-amortizing, and limits on loan fees; and “second mortgages” refers to liens on residential properties that are subordinate to more senior mortgages or loans. Basis of Presentation – The accompanying condensed consolidated balance sheet as of December 31, 2018 has been derived from audited financial statements. The accompanying condensed consolidated balance sheet as of September 30, 2019, the accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2019 and 2018, the accompanying condensed consolidated statements of comprehensive income for the three and nine months ended September 30, 2019 and 2018, the accompanying condensed consolidated statements of changes in stockholders’ equity for the three and nine months ended September 30, 2019 and 2018 and the accompanying condensed consolidated statements of cash flows for the nine months ended September 30, 2019 and 2018 are unaudited. In our opinion, all adjustments (which include only normal recurring adjustments) necessary to present fairly the Company’s financial position, results of operations and cash flows have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted in accordance with Article 10 of Regulation S-X and the instructions to Form 10-Q. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the U.S. Securities and Exchange Commission (“SEC”). Accordingly, significant accounting policies and other disclosures have been omitted since such items are disclosed in Note 2 in the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2018. Provided below is a summary of additional accounting policies that are significant to, or newly adopted by, the Company for the three and nine months ended September 30, 2019. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the operating results for the full year. The accompanying condensed consolidated financial statements have been prepared on the accrual basis of accounting in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management has made significant estimates in several areas, including fair valuation of its distressed and other residential mortgage loans, multi-family loans held in securitization trusts, multi-family CDOs and CMBS held in securitization trusts, as well as income recognition on distressed residential mortgage loans purchased at a discount. Although the Company’s estimates contemplate current conditions and how it expects those conditions to change in the future, it is reasonably possible that actual conditions could be different than anticipated in those estimates, which could materially impact the Company’s results of operations and its financial condition. Reclassifications – Certain prior period amounts have been reclassified in the condensed consolidated financial statements to conform to current period presentation. Principles of Consolidation and Variable Interest Entities – The accompanying condensed consolidated financial statements of the Company include the accounts of all its subsidiaries which are majority-owned, controlled by the Company or a variable interest entity ("VIE") where the Company is the primary beneficiary. All significant intercompany accounts and transactions have been eliminated in consolidation. A VIE is an entity that lacks one or more of the characteristics of a voting interest entity. A VIE is defined as an entity in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The Company consolidates a VIE when it is the primary beneficiary of such VIE, herein referred to as a "Consolidated VIE". As primary beneficiary, the Company has both the power to direct the activities that most significantly impact the economic performance of the VIE and a right to receive benefits or absorb losses of the entity that could be potentially significant to the VIE. The Company is required to reconsider its evaluation of whether to consolidate a VIE each reporting period, based upon changes in the facts and circumstances pertaining to the VIE. Adoption of Accounting Standards Codification ("ASC") Topic 842, Leases ("ASC 842") On January 1, 2019, the Company adopted ASC 842 using the modified retrospective transition method applied to all leases that were not completed as of January 1, 2019. Results for reporting periods beginning on or after January 1, 2019 are presented under ASC 842, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior period. We elected the practical expedients allowed for under ASC 842 that exempt an entity from reassessing whether existing contracts contain leases, reassessing the lease classification of existing leases, and reassessing the initial direct costs for existing leases. As such, there was no cumulative impact on opening accumulated deficit as of January 1, 2019 of adopting ASC 842 under the modified retrospective transition method. Operating lease right of use assets of $9.6 million and operating lease liabilities of $10.0 million are included in receivables and other assets and accrued expenses and other liabilities in the condensed consolidated balance sheets, respectively, as of September 30, 2019. The adoption of ASC 842 did not have a material effect on our results of operations for the three and nine months ended September 30, 2019. Summary of Recent Accounting Pronouncements Financial Instruments — Credit Losses (Topic 326) In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). The amendments require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. In addition, the ASU amends the accounting for credit losses on purchased financial assets with credit deterioration and available-for-sale debt securities, which will require the recognition of credit losses through a valuation allowance when fair value is less than amortized cost. The amendments are effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted beginning in 2019. In May 2019, the FASB issued ASU 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief ("ASU 2019-05"). The amendments allow an entity to make an irrevocable one-time election to measure financial assets accounted for under ASC 326-20, Financial Instruments—Credit Losses— Measured at Amortized Cost, using the fair value option upon adoption of ASU 2016-13. For the Company, the amendments are effective upon adoption of ASU 2016-13. The amendments in ASU 2019-05 should be applied on a modified retrospective basis by means of a cumulative-effect adjustment to the opening balance of retained earnings as of the date that an entity adopted the amendments in ASU 2016-13. The Company is currently assessing the impact of this guidance in conjunction with ASU 2016-13 as the ASUs will affect the Company's accounting for distressed and other residential mortgage loans, net and preferred equity and mezzanine loan investments that are accounted for as loans. It is the Company's intention to elect fair value option for impacted assets but the Company will continue to evaluate the new standards and any changes in our business or additional amendments to these standards could change our intention to elect fair value option. Fair Value Measurement (Topic 820) In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to Disclosure Requirements for Fair Value Measurement ("ASU 2018-13"). These amendments add, modify, or remove disclosure requirements regarding the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, narrative descriptions of measurement uncertainty, and the valuation processes for Level 3 fair value measurements. The amendments are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted upon issuance of this update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of ASU 2018-13 and delay adoption of the additional disclosures until their effective date. The Company anticipates the implementation of this guidance as of the effective date will result in additional and modified disclosures with respect to its Level 3 fair value measurements.
|
Repurchase Agreements - Assets Pledged as Collateral (Details) - USD ($) $ in Thousands |
Sep. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Outstanding Repurchase Agreements | $ 1,823,910 | $ 1,543,577 |
Fair Value of Collateral Pledged | 2,152,081 | 1,784,191 |
Amortized Cost of Collateral Pledged | 1,962,280 | 1,672,486 |
Consolidated K-Series | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
K-Series, carrying value | 885,100 | 657,600 |
Agency ARMs | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Outstanding Repurchase Agreements | 55,598 | 67,648 |
Fair Value of Collateral Pledged | 57,546 | 70,747 |
Amortized Cost of Collateral Pledged | 58,993 | 73,290 |
Agency Fixed- Rate | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Outstanding Repurchase Agreements | 785,266 | 857,582 |
Fair Value of Collateral Pledged | 830,400 | 907,610 |
Amortized Cost of Collateral Pledged | 832,071 | 940,994 |
Non-Agency RMBS | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Outstanding Repurchase Agreements | 210,339 | 88,730 |
Fair Value of Collateral Pledged | 288,014 | 117,958 |
Amortized Cost of Collateral Pledged | 280,724 | 118,414 |
CMBS | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Outstanding Repurchase Agreements | 772,707 | 529,617 |
Fair Value of Collateral Pledged | 976,121 | 687,876 |
Amortized Cost of Collateral Pledged | 790,492 | 539,788 |
CMBS | Consolidated K-Series | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
K-Series, carrying value | $ 773,400 | $ 543,000 |
Fair Value of Financial Instruments - Valuation for Level 3 Assets (Details) - USD ($) $ in Thousands |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Dec. 31, 2018 |
|
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at beginning of period | $ 12,503,064 | $ 9,835,319 | |
Total gains/(losses) (realized/unrealized) | |||
Included in earnings | 829,948 | (280,300) | |
Included in other comprehensive income (loss) | (13,665) | 901 | |
Transfers in | 0 | 0 | |
Transfers out | (437) | 0 | |
Contributions | 50,000 | 0 | |
Paydowns/Distributions | (488,838) | (133,101) | |
Charge-off | (3,510) | ||
Sales | (76,583) | (7,105) | |
Purchases | 4,255,662 | 923,842 | |
Balance at the end of period | 17,055,641 | 10,339,556 | |
Assets of consolidated VIEs | 15,976,914 | $ 11,984,374 | |
Consolidated K-Series | |||
Total gains/(losses) (realized/unrealized) | |||
Assets of consolidated VIEs | 3,800,000 | $ 800,000 | |
Multi-family loans held in securitization trusts | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at beginning of period | 11,679,847 | 9,657,421 | |
Total gains/(losses) (realized/unrealized) | |||
Included in earnings | 760,132 | (289,797) | |
Included in other comprehensive income (loss) | 0 | 0 | |
Transfers in | 0 | 0 | |
Transfers out | 0 | 0 | |
Contributions | 0 | 0 | |
Paydowns/Distributions | (368,811) | (101,953) | |
Charge-off | (3,510) | 0 | |
Sales | 0 | 0 | |
Purchases | 3,795,606 | 805,163 | |
Balance at the end of period | 15,863,264 | 10,070,834 | |
Distressed and other residential mortgage loans | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at beginning of period | 737,523 | 87,153 | |
Total gains/(losses) (realized/unrealized) | |||
Included in earnings | 44,913 | (1,361) | |
Included in other comprehensive income (loss) | 0 | 0 | |
Transfers in | 0 | 0 | |
Transfers out | (437) | 0 | |
Contributions | 0 | 0 | |
Paydowns/Distributions | (106,113) | (15,456) | |
Charge-off | 0 | ||
Sales | (19,814) | (7,105) | |
Purchases | 460,056 | 118,679 | |
Balance at the end of period | 1,116,128 | 181,910 | |
Investments in unconsolidated entities | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at beginning of period | 32,994 | 42,823 | |
Total gains/(losses) (realized/unrealized) | |||
Included in earnings | 7,169 | 7,930 | |
Included in other comprehensive income (loss) | 0 | 0 | |
Transfers in | 0 | 0 | |
Transfers out | 0 | 0 | |
Contributions | 50,000 | 0 | |
Paydowns/Distributions | (13,914) | (15,692) | |
Charge-off | 0 | ||
Sales | 0 | 0 | |
Purchases | 0 | 0 | |
Balance at the end of period | 76,249 | 35,061 | |
CMBS held in securitization trusts | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at beginning of period | 52,700 | 47,922 | |
Total gains/(losses) (realized/unrealized) | |||
Included in earnings | 17,734 | 2,928 | |
Included in other comprehensive income (loss) | (13,665) | 901 | |
Transfers in | 0 | 0 | |
Transfers out | 0 | 0 | |
Contributions | 0 | 0 | |
Paydowns/Distributions | 0 | 0 | |
Charge-off | 0 | ||
Sales | (56,769) | 0 | |
Purchases | 0 | 0 | |
Balance at the end of period | $ 0 | $ 51,751 |
Use of Special Purpose Entities (SPE) and Variable Interest Entities (VIE) - Financing VIEs Securitized Debt by Contractual Maturity (Details) - USD ($) $ in Thousands |
Sep. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Variable Interest Entity [Line Items] | ||
Total | $ 226,254 | |
Carrying value | $ 0 | $ 42,335 |
Financing VIE | ||
Variable Interest Entity [Line Items] | ||
Within 24 months | 12,381 | |
Over 24 months to 36 months | 0 | |
Over 36 months | 33,177 | |
Total | 45,558 | |
Discount | (2,983) | |
Debt issuance cost | (240) | |
Carrying value | $ 42,335 |
Repurchase Agreements - Borrowings Under Financing Arrangements and Associated Assets Pledged as Collateral (Details) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2019 |
Dec. 31, 2018 |
|
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Weighted Average Months to Maturity | 71 days | 62 days |
Distressed residential mortgage loans | Residential Mortgage | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Loans pledged as collateral | $ 83,300 | $ 128,100 |
Residential Mortgage | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Maximum Aggregate Uncommitted Principal Amount | 950,000 | 950,000 |
Outstanding Repurchase Agreements | 736,348 | 589,148 |
Carrying Value of Loans Pledged | $ 937,682 | $ 754,352 |
Weighted Average Rate | 4.05% | 4.67% |
Weighted Average Months to Maturity | 4 years | 9 years 2 months 26 days |
Distressed and other residential mortgage loans | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Fair value of loans | $ 854,400 | $ 626,200 |
Debt - Schedule of Maturities of Long-Term Debt (Details) $ in Thousands |
Sep. 30, 2019
USD ($)
|
---|---|
Year Ending December 31, | |
2019 | $ 935 |
2020 | 0 |
2021 | 0 |
2022 | 138,000 |
2023 | 0 |
Thereafter | 87,319 |
Total | $ 226,254 |
Derivative Instruments and Hedging Activities - Activity of Derivative Instruments Not Designated as Hedges (Details) - Trading - Interest rate swaps - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Derivative Instruments and Hedging Activities Disclosures [Roll Forward] | ||
Beginning balance | $ 495,500 | $ 345,500 |
Additions | 0 | 50,000 |
Settlement, Expiration or Exercise | 0 | 0 |
Ending balance | $ 495,500 | $ 395,500 |
Distressed and Other Residential Mortgage Loans, Net - Schedule of Accretable Yield (Details) - Distressed residential mortgage loans - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Certain Loans Acquired in Transfer Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | ||
Balance at beginning of period | $ 195,560 | $ 303,949 |
Additions | 1,813 | 6,007 |
Disposals | (48,383) | (64,876) |
Accretion | (4,672) | (11,999) |
Balance at end of period | $ 144,318 | $ 233,081 |
Distressed and Other Residential Mortgage Loans, At Fair Value - Concentration of Risk (Details) |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2019 |
Dec. 31, 2018 |
|
Florida | ||
Concentration Risk [Line Items] | ||
Geographic concentration, percent | 9.40% | 11.30% |
Texas | ||
Concentration Risk [Line Items] | ||
Geographic concentration, percent | 10.60% | 16.60% |
Geographic Concentration Risk | Residential mortgage loans, at fair value | California | ||
Concentration Risk [Line Items] | ||
Geographic concentration, percent | 23.20% | 27.90% |
Geographic Concentration Risk | Residential mortgage loans, at fair value | Florida | ||
Concentration Risk [Line Items] | ||
Geographic concentration, percent | 9.80% | 9.00% |
Geographic Concentration Risk | Residential mortgage loans, at fair value | Texas | ||
Concentration Risk [Line Items] | ||
Geographic concentration, percent | 6.00% | 4.20% |
Geographic Concentration Risk | Residential mortgage loans, at fair value | New York | ||
Concentration Risk [Line Items] | ||
Geographic concentration, percent | 6.00% | 5.10% |
Label | Element | Value |
---|---|---|
Restricted Cash and Cash Equivalents | us-gaap_RestrictedCashAndCashEquivalents | $ 8,297,000 |
Restricted Cash and Cash Equivalents | us-gaap_RestrictedCashAndCashEquivalents | 932,000 |
Preferred Stock [Member] | ||
Dividends Payable | us-gaap_DividendsPayableCurrentAndNoncurrent | 6,544,000 |
Dividends Payable | us-gaap_DividendsPayableCurrentAndNoncurrent | 5,925,000 |
Common Stock [Member] | ||
Dividends Payable | us-gaap_DividendsPayableCurrentAndNoncurrent | 28,243,000 |
Dividends Payable | us-gaap_DividendsPayableCurrentAndNoncurrent | $ 52,524,000 |
Investments in Unconsolidated Entities (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Investments in Unconsolidated Entities | The Company's investments in unconsolidated entities accounted for under the equity method are comprised of preferred equity ownership interests in entities that invest in multi-family properties where the risks and payment characteristics are equivalent to an equity investment and consist of the following as of September 30, 2019 and December 31, 2018 (dollar amounts in thousands):
The Company's investments in unconsolidated entities accounted for under the equity method using the fair value option consist of the following as of September 30, 2019 and December 31, 2018 (dollar amounts in thousands):
The following table presents income from investments in unconsolidated entities accounted for under the equity method for the three and nine months ended September 30, 2019 and 2018, respectively (dollar amounts in thousands):
The following table presents income from investments in unconsolidated entities accounted for under the equity method using the fair value option for the three and nine months ended September 30, 2019 and 2018, respectively (dollar amounts in thousands):
(2) Includes income recognized from redemption of the Company's investment during the three and nine months ended September 30, 2018.
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Derivative Instruments and Hedging Activities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value of Derivative Instruments Not Designated | The following table presents the fair value of derivative instruments and their location in our condensed consolidated balance sheets at September 30, 2019 and December 31, 2018, respectively (dollar amounts in thousands):
(1) All of the Company's interest rate swaps outstanding are cleared through a central clearing house. The Company exchanges variation margin for swaps based upon daily changes in fair value. As a result of amendments to rules governing certain central clearing activities, the exchange of variation margin is treated as a legal settlement of the exposure under the swap contract. Previously, such payments were treated as cash collateral pledged against the exposure under the swap contract. Accordingly, the Company accounted for the receipt or payment of variation margin as a direct reduction to or increase of the carrying value of the interest rate swap asset or liability on the Company's condensed consolidated balance sheets. Includes $40.4 million of derivative liabilities netted against a variation margin of $61.1 million at September 30, 2019. Includes $1.8 million of derivative assets and variation margin of $8.5 million at December 31, 2018.
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Schedule Of Derivative Instruments Volume Activity | The tables below summarize the activity of derivative instruments not designated as hedges for the nine months ended September 30, 2019 and 2018, respectively (dollar amounts in thousands):
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Schedule of Components of Realized and Unrealized Gains and Losses | The following table presents the components of unrealized gains (losses), net related to our derivative instruments that were not designated as hedging instruments, which are included in the non-interest income category in our condensed consolidated statements of operations for the three and nine months ended September 30, 2019 and 2018 (dollar amounts in thousands):
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Schedule of Interest Rate Swaps, Variable and Fixed Interest Rates | The following table presents information about our interest rate swaps whereby we receive floating rate payments in exchange for fixed rate payments as of September 30, 2019 and December 31, 2018, respectively (dollar amounts in thousands):
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Investments in Unconsolidated Entities |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in Unconsolidated Entities | Investments in Unconsolidated Entities The Company's investments in unconsolidated entities accounted for under the equity method are comprised of preferred equity ownership interests in entities that invest in multi-family properties where the risks and payment characteristics are equivalent to an equity investment and consist of the following as of September 30, 2019 and December 31, 2018 (dollar amounts in thousands):
The Company's investments in unconsolidated entities accounted for under the equity method using the fair value option consist of the following as of September 30, 2019 and December 31, 2018 (dollar amounts in thousands):
The following table presents income from investments in unconsolidated entities accounted for under the equity method for the three and nine months ended September 30, 2019 and 2018, respectively (dollar amounts in thousands):
The following table presents income from investments in unconsolidated entities accounted for under the equity method using the fair value option for the three and nine months ended September 30, 2019 and 2018, respectively (dollar amounts in thousands):
(2) Includes income recognized from redemption of the Company's investment during the three and nine months ended September 30, 2018.
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Investment Securities Available for Sale |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities Available for Sale | Investment Securities Available For Sale Investment securities available for sale consisted of the following as of September 30, 2019 and December 31, 2018 (dollar amounts in thousands):
Realized Gain or Loss Activity During the three and nine months ended September 30, 2019 the Company received total proceeds of approximately $41.2 million and $98.0 million, respectively, from the sale of investment securities available for sale, realizing a net gain of approximately $5.0 million and $21.8 million, respectively. The Company did not sell investment securities available for sale during the three months ended September 30, 2018. During the nine months ended September 30, 2018, the Company received total proceeds of approximately $26.9 million from the sale of investment securities available for sale, realizing a net loss of approximately $12.3 million. Weighted Average Life Actual maturities of our available for sale securities are generally shorter than stated contractual maturities (with contractual maturities up to 41 years), as they are affected by periodic payments and prepayments of principal on the underlying mortgages. As of September 30, 2019 and December 31, 2018, based on management’s estimates using the three month historical constant prepayment rate (“CPR”), the weighted average life of the Company’s available for sale securities portfolio was approximately 5.6 years and 5.7 years, respectively. The following table sets forth the weighted average lives of our investment securities available for sale as of September 30, 2019 and December 31, 2018 (dollar amounts in thousands):
Unrealized Losses in Other Comprehensive Income The following tables present the Company's investment securities available for sale in an unrealized loss position reported through other comprehensive income, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2019 and December 31, 2018 (dollar amounts in thousands):
At September 30, 2019, the Company does not intend to sell any of its investments that were in an unrealized loss position, and it is “more likely than not” that the Company will not be required to sell these securities before recovery of their amortized cost basis, which may be at their maturity. Gross unrealized losses in other comprehensive income on the Company’s Agency RMBS were $8.0 million at September 30, 2019. Agency RMBS are issued by GSEs and enjoy either the implicit or explicit backing of the full faith and credit of the U.S. Government. While the Company’s Agency RMBS are not rated by any rating agency, they are currently perceived by market participants to be of high credit quality, with risk of default limited to the unlikely event that the U.S. Government would not continue to support the GSEs. Given the credit quality inherent in Agency RMBS, the Company does not consider any of the current impairments on its Agency RMBS to be credit related. In assessing whether it is more likely than not that it will be required to sell any impaired security before its anticipated recovery, which may be at its maturity, the Company considers for each impaired security, the significance of each investment, the amount of impairment, the projected future performance of such impaired securities, as well as the Company’s current and anticipated leverage capacity and liquidity position. Based on these analyses, the Company determined that, at September 30, 2019, any unrealized losses on its Agency RMBS were temporary. Gross unrealized losses in other comprehensive income on the Company's non-Agency RMBS and CMBS were $0.2 million and $0.2 million, respectively, at September 30, 2019. Credit risk associated with non-Agency RMBS and CMBS is regularly assessed as new information regarding the underlying collateral becomes available and based on updated estimates of cash flows generated by the underlying collateral. Based upon the most recent evaluation, the Company does not consider these unrealized losses to be indicative of other-than-temporary impairment and does not believe that these unrealized losses are credit related, but are rather a reflection of current market yields and/or marketplace bid-ask spreads.
Other than Temporary Impairment For the three and nine months ended September 30, 2019 and 2018, the Company did not recognize other-than-temporary impairment through earnings.
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Derivative Instruments and Hedging Activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities The Company enters into derivative instruments in connection with its risk management activities. These derivative instruments may include interest rate swaps, swaptions, futures and options on futures. The Company may also purchase or sell “To-Be-Announced,” or TBAs, purchase options on U.S. Treasury futures or invest in other types of mortgage derivative securities. The Company's derivative instruments are currently comprised of interest rate swaps, which are designated as trading instruments. Derivatives Not Designated as Hedging Instruments The following table presents the fair value of derivative instruments and their location in our condensed consolidated balance sheets at September 30, 2019 and December 31, 2018, respectively (dollar amounts in thousands):
The tables below summarize the activity of derivative instruments not designated as hedges for the nine months ended September 30, 2019 and 2018, respectively (dollar amounts in thousands):
For the three and nine months ended September 30, 2019 and 2018, the Company did not recognize any net realized gains related to our derivative instruments. The following table presents the components of unrealized gains (losses), net related to our derivative instruments that were not designated as hedging instruments, which are included in the non-interest income category in our condensed consolidated statements of operations for the three and nine months ended September 30, 2019 and 2018 (dollar amounts in thousands):
Derivatives Designated as Hedging Instruments As of September 30, 2019 and December 31, 2018, there were no derivative instruments designated as hedging instruments. Outstanding Derivatives The following table presents information about our interest rate swaps whereby we receive floating rate payments in exchange for fixed rate payments as of September 30, 2019 and December 31, 2018, respectively (dollar amounts in thousands):
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Income Taxes - Income Tax Provision (Details) - USD ($) $ in Thousands |
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Income Tax Disclosure [Abstract] | ||||
Current income tax benefit | $ 33 | $ 94 | $ 25 | $ 87 |
Deferred income tax benefit | 154 | 360 | 222 | 460 |
Total benefit | $ 187 | $ 454 | $ 247 | $ 547 |
Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation – The accompanying condensed consolidated balance sheet as of December 31, 2018 has been derived from audited financial statements. The accompanying condensed consolidated balance sheet as of September 30, 2019, the accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2019 and 2018, the accompanying condensed consolidated statements of comprehensive income for the three and nine months ended September 30, 2019 and 2018, the accompanying condensed consolidated statements of changes in stockholders’ equity for the three and nine months ended September 30, 2019 and 2018 and the accompanying condensed consolidated statements of cash flows for the nine months ended September 30, 2019 and 2018 are unaudited. In our opinion, all adjustments (which include only normal recurring adjustments) necessary to present fairly the Company’s financial position, results of operations and cash flows have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted in accordance with Article 10 of Regulation S-X and the instructions to Form 10-Q. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the U.S. Securities and Exchange Commission (“SEC”). Accordingly, significant accounting policies and other disclosures have been omitted since such items are disclosed in Note 2 in the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2018. Provided below is a summary of additional accounting policies that are significant to, or newly adopted by, the Company for the three and nine months ended September 30, 2019. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the operating results for the full year. The accompanying condensed consolidated financial statements have been prepared on the accrual basis of accounting in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management has made significant estimates in several areas, including fair valuation of its distressed and other residential mortgage loans, multi-family loans held in securitization trusts, multi-family CDOs and CMBS held in securitization trusts, as well as income recognition on distressed residential mortgage loans purchased at a discount. Although the Company’s estimates contemplate current conditions and how it expects those conditions to change in the future, it is reasonably possible that actual conditions could be different than anticipated in those estimates, which could materially impact the Company’s results of operations and its financial condition.
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Reclassifications | Reclassifications – Certain prior period amounts have been reclassified in the condensed consolidated financial statements to conform to current period presentation.
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Principles of Consolidation and Variable Interest Entities | Principles of Consolidation and Variable Interest Entities – The accompanying condensed consolidated financial statements of the Company include the accounts of all its subsidiaries which are majority-owned, controlled by the Company or a variable interest entity ("VIE") where the Company is the primary beneficiary. All significant intercompany accounts and transactions have been eliminated in consolidation. A VIE is an entity that lacks one or more of the characteristics of a voting interest entity. A VIE is defined as an entity in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The Company consolidates a VIE when it is the primary beneficiary of such VIE, herein referred to as a "Consolidated VIE". As primary beneficiary, the Company has both the power to direct the activities that most significantly impact the economic performance of the VIE and a right to receive benefits or absorb losses of the entity that could be potentially significant to the VIE. The Company is required to reconsider its evaluation of whether to consolidate a VIE each reporting period, based upon changes in the facts and circumstances pertaining to the VIE.
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Adoption of Accounting Standards Codification and Summary of Recent Accounting Pronouncements | Adoption of Accounting Standards Codification ("ASC") Topic 842, Leases ("ASC 842") On January 1, 2019, the Company adopted ASC 842 using the modified retrospective transition method applied to all leases that were not completed as of January 1, 2019. Results for reporting periods beginning on or after January 1, 2019 are presented under ASC 842, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior period. We elected the practical expedients allowed for under ASC 842 that exempt an entity from reassessing whether existing contracts contain leases, reassessing the lease classification of existing leases, and reassessing the initial direct costs for existing leases. As such, there was no cumulative impact on opening accumulated deficit as of January 1, 2019 of adopting ASC 842 under the modified retrospective transition method. Operating lease right of use assets of $9.6 million and operating lease liabilities of $10.0 million are included in receivables and other assets and accrued expenses and other liabilities in the condensed consolidated balance sheets, respectively, as of September 30, 2019. The adoption of ASC 842 did not have a material effect on our results of operations for the three and nine months ended September 30, 2019. Summary of Recent Accounting Pronouncements Financial Instruments — Credit Losses (Topic 326) In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). The amendments require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. In addition, the ASU amends the accounting for credit losses on purchased financial assets with credit deterioration and available-for-sale debt securities, which will require the recognition of credit losses through a valuation allowance when fair value is less than amortized cost. The amendments are effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted beginning in 2019. In May 2019, the FASB issued ASU 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief ("ASU 2019-05"). The amendments allow an entity to make an irrevocable one-time election to measure financial assets accounted for under ASC 326-20, Financial Instruments—Credit Losses— Measured at Amortized Cost, using the fair value option upon adoption of ASU 2016-13. For the Company, the amendments are effective upon adoption of ASU 2016-13. The amendments in ASU 2019-05 should be applied on a modified retrospective basis by means of a cumulative-effect adjustment to the opening balance of retained earnings as of the date that an entity adopted the amendments in ASU 2016-13. The Company is currently assessing the impact of this guidance in conjunction with ASU 2016-13 as the ASUs will affect the Company's accounting for distressed and other residential mortgage loans, net and preferred equity and mezzanine loan investments that are accounted for as loans. It is the Company's intention to elect fair value option for impacted assets but the Company will continue to evaluate the new standards and any changes in our business or additional amendments to these standards could change our intention to elect fair value option. Fair Value Measurement (Topic 820) In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to Disclosure Requirements for Fair Value Measurement ("ASU 2018-13"). These amendments add, modify, or remove disclosure requirements regarding the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, narrative descriptions of measurement uncertainty, and the valuation processes for Level 3 fair value measurements. The amendments are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted upon issuance of this update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of ASU 2018-13 and delay adoption of the additional disclosures until their effective date. The Company anticipates the implementation of this guidance as of the effective date will result in additional and modified disclosures with respect to its Level 3 fair value measurements.
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Earnings Per Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share The Company calculates basic earnings per common share by dividing net income attributable to the Company's common stockholders for the period by weighted-average shares of common stock outstanding for that period. Diluted earnings per common share takes into account the effect of dilutive instruments, such as convertible notes and performance stock units, and the number of incremental shares that are to be added to the weighted-average number of shares outstanding. During the three and nine months ended September 30, 2019 and 2018, the Company's Convertible Notes were determined to be dilutive and were included in the calculation of diluted earnings per common share under the "if-converted" method. Under this method, the periodic interest expense (net of applicable taxes) for dilutive notes is added back to the numerator and the number of shares that the notes are entitled to (if converted, regardless of whether they are in or out of the money) are included in the denominator. During the three and nine months ended September 30, 2019 and 2018, performance stock units ("PSUs") awarded under the Company's 2017 Equity Incentive Plan (as amended, the "2017 Plan," see Note 18) were determined to be dilutive and were included in the calculation of diluted earnings per common share under the treasury stock method. Under this method, common equivalent shares are calculated assuming that target PSUs vest according to the PSU award agreements ("PSU Agreements") and unrecognized compensation cost is used to repurchase shares of the Company’s outstanding common stock at the average market price during the reported period. The following table presents the computation of basic and diluted earnings per common share for the periods indicated (dollar and share amounts in thousands, except per share amounts):
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Residential Collateralized Debt Obligations The Company’s Residential CDOs, which are recorded as liabilities on the Company’s condensed consolidated balance sheets, are secured by ARMs pledged as collateral, which are recorded as assets of the Company. Pledged assets of $45.7 million and $56.8 million are included in distressed and other residential mortgage loans, net in the Company's condensed consolidated balance sheets as of September 30, 2019 and December 31, 2018, respectively. As of September 30, 2019 and December 31, 2018, the Company had Residential CDOs outstanding of $42.1 million and $53.0 million, respectively. As of September 30, 2019 and December 31, 2018, the current weighted average interest rate on these Residential CDOs was 2.64% and 3.12%, respectively. The Residential CDOs are collateralized by ARM loans with a principal balance of $48.9 million and $60.2 million at September 30, 2019 and December 31, 2018, respectively. The Company retained the owner trust certificates, or residual interest, for three securitizations, and, as of September 30, 2019 and December 31, 2018, had a net investment in the residential securitization trusts of $4.8 million. Convertible Notes On January 23, 2017, the Company issued $138.0 million aggregate principal amount of its 6.25% Senior Convertible Notes due 2022 (the "Convertible Notes") in an underwritten public offering. The net proceeds to the Company from the sale of the Convertible Notes, after deducting the underwriter's discounts, commissions and offering expenses, were approximately $127.0 million with the total cost to the Company of approximately 8.24%. Costs related to the issuance of the Convertible Notes which include underwriting, legal, accounting and other fees, are reflected as deferred charges. The underwriter's discount and deferred charges, net of amortization, are presented as a deduction from the corresponding debt liability on the Company's accompanying condensed consolidated balance sheets in the amount of $5.6 million and $7.2 million as of September 30, 2019 and December 31, 2018, respectively. The underwriter's discount and deferred charges are amortized as an adjustment to interest expense using the effective interest method. The Convertible Notes were issued at 96% of the principal amount, bear interest at a rate equal to 6.25% per year, payable semi-annually in arrears on January 15 and July 15 of each year, and are expected to mature on January 15, 2022, unless earlier converted or repurchased. The Company does not have the right to redeem the Convertible Notes prior to maturity and no sinking fund is provided for the Convertible Notes. Holders of the Convertible Notes are permitted to convert their Convertible Notes into shares of the Company's common stock at any time prior to the close of business on the business day immediately preceding January 15, 2022. The conversion rate for the Convertible Notes, which is subject to adjustment upon the occurrence of certain specified events, initially equals 142.7144 shares of the Company’s common stock per $1,000 principal amount of Convertible Notes, which is equivalent to a conversion price of approximately $7.01 per share of the Company’s common stock, based on a $1,000 principal amount of the Convertible Notes. The Convertible Notes are senior unsecured obligations of the Company that rank senior in right of payment to the Company's subordinated debentures and any of its other indebtedness that is expressly subordinated in right of payment to the Convertible Notes. During the nine months ended September 30, 2019, none of the Convertible Notes were converted. As of November 7, 2019, the Company has not been notified, and is not aware, of any event of default under the covenants for the Convertible Notes. Subordinated Debentures Subordinated debentures are trust preferred securities that are fully guaranteed by the Company with respect to distributions and amounts payable upon liquidation, redemption or repayment. The following table summarizes the key details of the Company’s subordinated debentures as of September 30, 2019 and December 31, 2018 (dollar amounts in thousands):
As of November 7, 2019, the Company has not been notified, and is not aware, of any event of default under the covenants for the subordinated debentures. Mortgages and Notes Payable in Consolidated VIEs In March 2017, the Company consolidated both Riverchase Landing and The Clusters into its condensed consolidated financial statements (see Note 9). In March 2018, Riverchase Landing completed the sale of its multi-family apartment community and redeemed the Company's preferred equity investment. The Company de-consolidated Riverchase Landing as of the date of the sale. In February 2019, The Clusters completed the sale of its multi-family apartment community and redeemed the Company's preferred equity investment. The Company de-consolidated The Clusters as of the date of the sale. The Clusters' real estate investment was subject to a mortgage payable as of December 31, 2018, and the Company had no obligation for this liability as of December 31, 2018. The Company also consolidates KRVI into its condensed consolidated financial statements (see Note 9). KRVI's real estate under development is subject to a note payable of $0.9 million that has an unused commitment of $7.5 million as of September 30, 2019. The Company has not been notified, and is not aware, of any event of default under the covenants of KRVI's note payable as of November 7, 2019. The mortgages and notes payable in the consolidated VIEs as of September 30, 2019 are described below (dollar amounts in thousands):
As of September 30, 2019, maturities for debt on the Company's condensed consolidated balance sheet are as follows (dollar amounts in thousands):
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Stockholders' Equity (Tables) |
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Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Dividends Declared | The following table presents cash dividends declared by the Company on its common stock with respect to each of the quarterly periods commencing January 1, 2018 and ended September 30, 2019:
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Schedule of Public Offerings of Common Stock | The following table details the Company's public offerings of common stock during the nine months ended September 30, 2019 (dollar amounts in thousands):
(1) Proceeds are net of underwriting discounts and commissions and offering expenses
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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2019 |
Dec. 31, 2018 |
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Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, liquidation preference per share (in dollars per share) | $ 25.00 | |
Preferred stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Preferred stock, shares issued (in shares) | 13,250,707 | 13,250,707 |
Preferred stock, shares outstanding (in shares) | 12,000,000 | 12,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 |
Common stock, shares issued (in shares) | 262,621,039 | 155,589,528 |
Common stock, shares outstanding (in shares) | 262,621,039 | 155,589,528 |
Assets of consolidated VIEs | $ 15,976,914 | $ 11,984,374 |
Liabilities of consolidated VIEs | $ 15,072,191 | $ 11,191,736 |
Series B Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, cumulative redeemable dividend rate | 7.75% | 7.75% |
Preferred stock, liquidation preference per share (in dollars per share) | $ 25 | $ 25 |
Preferred stock, shares authorized (in shares) | 6,000,000 | 6,000,000 |
Preferred stock, shares issued (in shares) | 3,138,019 | 3,000,000 |
Preferred stock, shares outstanding (in shares) | 3,138,019 | 3,000,000 |
Series C Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, cumulative redeemable dividend rate | 7.875% | 7.875% |
Preferred stock, liquidation preference per share (in dollars per share) | $ 25 | $ 25 |
Preferred stock, shares authorized (in shares) | 6,600,000 | 4,140,000 |
Preferred stock, shares issued (in shares) | 4,144,161 | 3,600,000 |
Preferred stock, shares outstanding (in shares) | 4,144,161 | 3,600,000 |
Series D Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, cumulative redeemable dividend rate | 8.00% | 8.00% |
Preferred stock, liquidation preference per share (in dollars per share) | $ 25 | $ 25 |
Preferred stock, shares authorized (in shares) | 8,400,000 | 5,750,000 |
Preferred stock, shares issued (in shares) | 5,968,527 | 5,400,000 |
Preferred stock, shares outstanding (in shares) | 5,968,527 | 5,400,000 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
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Cash Flows from Operating Activities: | ||
Net income | $ 107,609 | $ 95,286 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Net accretion | (35,948) | (19,109) |
Realized (gains) losses, net | (32,556) | 7,228 |
Unrealized (gains) losses, net | (13,898) | (57,518) |
Gain on sale of real estate held for sale in consolidated variable interest entities | (1,580) | (2,328) |
Impairment of real estate under development in consolidated variable interest entities | 1,660 | 2,091 |
Loss on extinguishment of debt | 2,857 | 0 |
Recovery of loan losses | (2,605) | (1,235) |
Income from unconsolidated entity, preferred equity and mezzanine loan investments | (31,670) | (24,020) |
Distributions of income from unconsolidated entity, preferred equity and mezzanine loan investments | 18,861 | 15,957 |
Amortization of stock based compensation, net | 4,079 | 1,906 |
Changes in operating assets and liabilities: | ||
Receivables and other assets | (21,393) | 497 |
Accrued expenses and other liabilities | 30,962 | 326 |
Net cash provided by operating activities | 26,378 | 19,081 |
Cash Flows from Investing Activities: | ||
Net proceeds from sale of real estate held for sale in consolidated variable interest entities | 3,587 | 33,192 |
Proceeds from sales of investment securities | 97,951 | 26,899 |
Purchases of investment securities | (563,441) | (140,241) |
Purchases of other assets | (939) | (131) |
Capital expenditures on real estate held for sale in consolidated variable interest entities | (128) | (311) |
Funding of preferred equity, equity and mezzanine loan investments | (147,383) | (65,668) |
Principal repayments received on preferred equity and mezzanine loan investments | 37,885 | 9,543 |
Return of capital from unconsolidated entity investments | 13,378 | 11,871 |
Proceeds from mortgage loans held for investment | 1,580 | 0 |
(Net payments made on) received from other derivative instruments settled during the period | (52,598) | 17,719 |
Principal paydowns on investment securities - available for sale | 135,956 | 193,070 |
Proceeds from sale of real estate owned | 2,035 | 3,183 |
Deposit for investment in a residential securitization | (66,000) | 0 |
Net cash (used in) provided by investing activities | (601,840) | 141,234 |
Cash Flows from Financing Activities: | ||
Net proceeds from (net payments made on) repurchase agreements | 427,077 | (118,596) |
Common stock issuance, net | 632,248 | 174,995 |
Preferred stock issuance, net | 30,490 | 0 |
Dividends paid on common stock | (110,839) | (69,668) |
Dividends paid on preferred stock | (18,107) | (17,835) |
Payments made on mortgages and notes payable in consolidated variable interest entities | (3,087) | (25,781) |
Proceeds from mortgages and notes payable in consolidated variable interest entities | 0 | 1,130 |
Payments made on residential collateralized debt obligations | 10,963 | 13,859 |
Payments made on multi-family collateralized debt obligations | 368,107 | 101,958 |
Extinguishment of and payments made on securitized debt | (45,557) | (29,170) |
Net cash provided by (used in) financing activities | 533,155 | (200,742) |
Net Decrease in Cash, Cash Equivalents and Restricted Cash | (42,307) | (40,427) |
Cash, Cash Equivalents and Restricted Cash - Beginning of Period | 109,145 | 106,195 |
Cash, Cash Equivalents and Restricted Cash - End of Period | 66,838 | 65,768 |
Supplemental Disclosure: | ||
Cash paid for interest | 456,242 | 315,469 |
Cash paid for income taxes | 21 | 1,711 |
Non-Cash Investment Activities: | ||
Transfer from residential loans to real estate owned | 4,529 | 5,805 |
Non-Cash Financing Activities: | ||
Mortgages and notes payable assumed by purchaser of real estate held for sale in consolidated variable entities | 27,260 | 0 |
Cash, Cash Equivalents and Restricted Cash Reconciliation: | ||
Total cash, cash equivalents, and restricted cash | 109,145 | 106,195 |
Multi-family collateralized debt obligations | ||
Non-Cash Investment Activities: | ||
Consolidation of multi-family collateralized debt obligations | 3,633,525 | 767,477 |
Multi-family loans held in securitization trust | ||
Non-Cash Investment Activities: | ||
Consolidation of multi-family loans held in securitization trusts | 3,795,606 | 805,163 |
Distressed residential mortgage loans held in securitization trusts, net | ||
Cash Flows from Investing Activities: | ||
Principal repayments received on loans | 189,714 | 106,520 |
Multi-family collateralized debt obligations | ||
Cash Flows from Investing Activities: | ||
Principal repayments received on loans | 368,811 | 101,953 |
Distressed residential mortgage loans | ||
Cash Flows from Investing Activities: | ||
Purchases of residential mortgage loans and distressed residential mortgage loans | (460,167) | (118,679) |
Multi-family loans held in securitization trust | ||
Cash Flows from Investing Activities: | ||
Purchases of residential mortgage loans and distressed residential mortgage loans | $ (162,081) | $ (37,686) |
Summary of Significant Accounting Policies - Adoption of Accounting Standards Codification Topic 842 Leases (Details) - ASU 2016-02 $ in Millions |
Jan. 01, 2019
USD ($)
|
---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Operating Lease right-of-use assets | $ 9.6 |
Operating lease liabilities | $ 10.0 |
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