SEC Comment Letter for ADAMAS TRUST, INC. (ADAM, ADAMG, ADAMH, ADAMI, ADAML, ADAMM, ADAMN, ADAMZ) (CIK 0001273685) (ADAM) — Sep 22, 2010
ADAMAS TRUST, INC. (ADAM, ADAMG, ADAMH, ADAMI, ADAML, ADAMM, ADAMN, ADAMZ) (CIK 0001273685)
Date: Sept. 22, 2010 · CIK: 0001273685 · Accession: 0000000000-10-055648
AI Filing Summary & Sentiment
Reasoning
Letter
Re: New York Mortgage Trust, Inc. Form 10-K for the year ended December 31, 2009 File No. 1-32216 Dear Mr. Mumma: We have reviewed your filing and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Please respond to this letter within ten business days by amending your filing, by providing the requested information, or by advi sing us when you will provide the requested response. If you do not believe our comments apply to your fact s and circumstances or do not believe an amendment is appropriate, pl ease tell us why in your response. After reviewing any amendment to your filing and the information you provide in response to these comments, we ma y have additional comments. Form 10-K for the fiscal year ended December 31, 2009
September 22, 2010 Mr. Steven R. Mumma New York Mortgage Trust, Inc. 52 Vanderbilt Avenue New York, NY 10017
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 42 Results of Operations – Comparison of Years Ended December 31, 2009, 2008 and 2007 Comparable Net Interest Income, page 58 1. Please refer to the table on page 59. Please te ll us how you define each of the columns in this table. Please provide this disclosure in future filings and provide us with your proposed disclosure.
Steven Mumma New York Mortgage Trust, Inc. September 22, 2010 Page 2 Signatures, page 75
2. Please confirm if Steven Mumma also serves as your controller or principal accounting officer. In future filings, please identify the person that serves as your controller or principal accounting officer. Please see Ge neral Instruction D to Form 10-K. 3. Mortgage Loans Held in Securitization Trusts, page F-18
3. Please tell us how loans that ar e determined not to be individually impaired are considered in the assessment of an allowance under SAB 6L, subtopics 450-10 and 450-20 of the FASB Accounting Standards Codification and paragraphs 310-10-35-35 and 310-10-35- 36 of the FASB Accounting Standards Codifi cation. Additionally, explain to us how you considered the referenced guidance in determ ining whether an allowance was required for probable credit losses inherent in the remaini ng portion of your loan portfolio that was not identified as individually impaired. 5. Financing Arrangements, Port folio Investments, page F-22
4. Please enhance your disclosure regarding your ability to meet addi tional haircuts or market valuation requirements and discuss th e relative ease and timing it would take to convert amounts to cash to meet these needs.
5. With regard to your repurchase agreements, please tell us whether you account for any of those agreements as sales for accounting purpos es in your financial statements. If you do, we ask that you:
Quantify the amount of repurchase agreements qualifying for sales accounting at each quarterly balance sheet date for each of the past three years. Quantify the average quarterly balance of repurchase agreements qualifying for sales accounting for each of the past three years. Describe all the differences in transaction terms th at result in certain of your repurchase agreements qualifying as sales versus collateralized financings. Provide a detailed analysis supporting your use of sales accounting for your repurchase agreements. Describe the business reasons for structur ing the repurchase agreements as sales transactions versus collatera lized financings. To the extent the amounts accounted for as sales transactions have varied over the past three y ears, discuss the reasons for quarterly changes in the amount s qualifying for sales accounting.
Describe how your use of sales accounting fo r certain of your repurchase agreements impacts any ratios or metrics you use public ly, provide to analysts and credit rating agencies, disclose in your filings with the SE C, or provide to othe r regulatory agencies.
Steven Mumma New York Mortgage Trust, Inc. September 22, 2010 Page 3
Tell us whether the repurchase agreem ents qualifying for sales accounting are concentrated with certain counterparties and/ or concentrated within certain countries. If you have any such concentrations, please discuss the reasons for them.
Tell us whether you have changed your original accounting on any repurchase agreements during the last three years. If you have, explain specifically how you determined the original accounting as either a sales transaction or as a collateralized financing transaction noting the specific f acts and circumstances leading to this determination. Describe the f actors, events or changes wh ich resulted in your changing your accounting and describe how the change impacted your financial statements.
6. For those repurchase agreements you account fo r as collateralized financings, please quantify the average quarterly balance for each of the past three years and all quarterly periods during 2010. In addition, quantify th e period end balance for each of those quarters and the maximum balance at any m onth-end. Explain the causes and business reasons for significant variances among these am ounts. Please include this disclosure in your MD&A in future filings.
7. In addition to the above, please tell us: Whether you have any securities lending tr ansactions that you account for as sales pursuant to the guidance in ASC 860-10. If you do, quantify the amount of these transactions at each quarterl y balance sheet date for each of the past three years. Provide a detailed analysis supporting your decision to account for these securities lending transactions as sales. Whether you have any other transactions invol ving the transfer of financial assets with an obligation to repurchase the transferred a ssets, similar to repurchase or securities lending transactions that you account for as sa les pursuant to the guidance in ASC 860. If you do, describe the key terms and nature of these transactions and quantify the amount of the transactions at each quarterly balan ce sheet date for the past three years. Whether you have offset financial assets a nd financial liabilities in the balance sheet where a right of setoff – the general princi ple for offsetting – does not exist. If you have offset financial assets a nd financial liabilities in the balance sheet where a right of setoff does not exist, please identify those circumstances, explain the basis for your presentation policy, and quantify the gross am ount of the financial assets and financial liabilities that are offset in the balance sheet. For example, please tell us whether you have offset securities owned (long positions) wi th securities sold, but not yet purchased (short positions), along with any basis for your presentation policy and the related gross amounts that are offset.
8. If you accounted for repurchase agreements, s ecurities lending transactions, or other transactions involving the transf er of financial assets with an obligation to repurchase the
Steven Mumma New York Mortgage Trust, Inc. September 22, 2010 Page 4 Schedule 14-A transferred assets as sales and did not provide disclosure of those transactions in your Management’s Discussion and Analysis, please advise us of the basis for your conclusion that disclosure was not necessary and desc ribe the process you undertook to reach that conclusion. We refer you to paragraphs (a)( 1) and (a)(4) of Item 303 of Regulation S-K
Our Board’s Role in Risk Oversight, page 16 9. On page 17, we note that the compensati on committee “does not believe that its compensation policies encourag e excessive risk-taking....” It appears that the noted disclosure was provided in response to It em 402(s) of Regulation S-K. If it was determined that your compensation policies a nd practices are not r easonably likely to have a material adverse effect on you, please describe the process you undertook to reach the conclusion that disclosu re is not necessary. Proposal One: Election of Directors, page 5 Nominees for Election as Directors, page 5 10. We note your disclosure regardi ng your director nominees which states the qualifications and skills of such individuals to serve as di rectors. For each director nominee, briefly discuss the specific experience, qualifications , attributes or skills that led to the conclusion that the person should serve as a director. Please see Item 401(e)(1) of Regulation S-K. Please provide this disclosure in future filings and provide us with your proposed disclosure. Executive Compensation, page 25 Compensation Discussion and Analysis, page 25 Process for Setting Executive Compensation, page 26 11. You disclose that in determining co mpensation for a specific executive, the Compensation Committee cons iders many factors, including the executive’s job performance compared to goals and objectives established for the executive at the beginning of the year, the compensation levels of competitive jobs, and your financial performance and financial condition and certain discretionary factors. Please provide additional disclosure for each of these items. For example, please disclose the goals and objectives for each of your executives as well as their actual job performance compared to such goals and objectives. Disclose the compensation levels of competitive jobs. We also note the disclosure on page 28 regardi ng your performance, but please disclose in greater detail your financial performan ce and financial condition and the specific contributions of Messrs. Mumma and Reese to your financial performance and financial condition. Please provide this disclosure in future filings and provide us with your proposed disclosure.
Steven Mumma New York Mortgage Trust, Inc. September 22, 2010 Page 5
Executive Compensation Program Components, page 26
Annual Incentive Compensation, page 27
12. You disclose that you award di scretionary cash bonuses to the named executive officers based on your financial a nd operating performance duri ng 2009 and such officers’ contributions to your performance. Pleas e explain how your fi nancial and operating performance during 2009 and the named execu tive officers’ contributions led to the decision to award bonuses and the amount of such bonuses. Please provide this disclosure in future filings and provide us with your proposed disclosure. Long-Term Incentive Compensation, page 28
13. You disclose the size of the restricted stock awards were influenced by your desire to increase the executive’s ownership stake in you and with regard to the total amount of compensation to be earned by them. Please also disclose how these amounts – 62,000 shares of restricted stock to Mr. Mumma (h aving a grant date fair value of $327,360) and 12,000 shares of restricted stock to Mr. Rees e (having a grant date fair value of $63,360) – were decided upon. Please provide this disclosu re in future filings and provide us with your proposed disclosure.
We urge all who are responsible for the accura cy and adequacy of th e disclosure in the filing to be certain that the filing includes th e information the Securities Exchange Act of 1934 and all applicable Exchange Act rules require. Since the company and its management are in possession of all facts re lating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made. In responding to our comments, please provide a written statement from the company acknowledging that: • the company is responsible for the adequacy and accuracy of the disclo sure in the filing;
• staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
• the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federa l securities laws of the United States.
You may contact Howard Efron, Staff Accountant, at (202) 551-3439 or me at (202) 551- 3629 if you have questions regarding comments on the financial statements and related matters.
Steven Mumma New York Mortgage Trust, Inc. September 22, 2010 Page 6 Please contact Phil Rothenberg, Staff Attorney, at (202) 551-3466 or Duc Dang, Staff Attorney at (202) 551-3386 with regard to legal comments. Sincerely,
Kevin Woody Branch Chief
Show Raw Text
September 22, 2010
Mr. Steven R. Mumma New York Mortgage Trust, Inc. 52 Vanderbilt Avenue New York, NY 10017
Re: New York Mortgage Trust, Inc.
Form 10-K for the year ended December 31, 2009
File No. 1-32216
Dear Mr. Mumma:
We have reviewed your filing and have the following comments. In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.
Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advi sing us when you will provide the requested
response. If you do not believe our comments apply to your fact s and circumstances or do not
believe an amendment is appropriate, pl ease tell us why in your response.
After reviewing any amendment to your filing and the information you provide in
response to these comments, we ma y have additional comments.
Form 10-K for the fiscal year ended December 31, 2009
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,
page 42
Results of Operations – Comparison of Years Ended December 31, 2009, 2008 and 2007
Comparable Net Interest Income, page 58
1. Please refer to the table on page 59. Please te ll us how you define each of the columns in
this table. Please provide this disclosure in future filings and provide us with your
proposed disclosure.
Steven Mumma
New York Mortgage Trust, Inc. September 22, 2010
Page 2
Signatures, page 75
2. Please confirm if Steven Mumma also serves as your controller or principal accounting
officer. In future filings, please identify the person that serves as your controller or principal accounting officer. Please see Ge neral Instruction D to Form 10-K.
3. Mortgage Loans Held in Securitization Trusts, page F-18
3. Please tell us how loans that ar e determined not to be individually impaired are considered
in the assessment of an allowance under SAB 6L, subtopics 450-10 and 450-20 of the
FASB Accounting Standards Codification and paragraphs 310-10-35-35 and 310-10-35-
36 of the FASB Accounting Standards Codifi cation. Additionally, explain to us how you
considered the referenced guidance in determ ining whether an allowance was required for
probable credit losses inherent in the remaini ng portion of your loan portfolio that was not
identified as individually impaired.
5. Financing Arrangements, Port folio Investments, page F-22
4. Please enhance your disclosure regarding your ability to meet addi tional haircuts or
market valuation requirements and discuss th e relative ease and timing it would take to
convert amounts to cash to meet these needs.
5. With regard to your repurchase agreements, please tell us whether you account for any of
those agreements as sales for accounting purpos es in your financial statements. If you do,
we ask that you:
Quantify the amount of repurchase agreements qualifying for sales accounting at each quarterly balance sheet date for each of the past three years.
Quantify the average quarterly balance of repurchase agreements qualifying for sales
accounting for each of the past three years.
Describe all
the differences in transaction terms th at result in certain of your repurchase
agreements qualifying as sales versus collateralized financings.
Provide a detailed analysis supporting your use of sales accounting for your repurchase
agreements.
Describe the business reasons for structur ing the repurchase agreements as sales
transactions versus collatera lized financings. To the extent the amounts accounted for
as sales transactions have varied over the past three y ears, discuss the reasons for
quarterly changes in the amount s qualifying for sales accounting.
Describe how your use of sales accounting fo r certain of your repurchase agreements
impacts any ratios or metrics you use public ly, provide to analysts and credit rating
agencies, disclose in your filings with the SE C, or provide to othe r regulatory agencies.
Steven Mumma
New York Mortgage Trust, Inc. September 22, 2010
Page 3
Tell us whether the repurchase agreem ents qualifying for sales accounting are
concentrated with certain counterparties and/ or concentrated within certain countries.
If you have any such concentrations, please discuss the reasons for them.
Tell us whether you have changed your original accounting on any repurchase
agreements during the last three years. If you have, explain specifically how you
determined the original accounting as either a sales transaction or as a collateralized financing transaction noting the specific f acts and circumstances leading to this
determination. Describe the f actors, events or changes wh ich resulted in your changing
your accounting and describe how the change impacted your financial statements.
6. For those repurchase agreements you account fo r as collateralized financings, please
quantify the average quarterly balance for each of the past three years and all quarterly
periods during 2010. In addition, quantify th e period end balance for each of those
quarters and the maximum balance at any m onth-end. Explain the causes and business
reasons for significant variances among these am ounts. Please include this disclosure in
your MD&A in future filings.
7. In addition to the above, please tell us:
Whether you have any securities lending tr ansactions that you account for as sales
pursuant to the guidance in ASC 860-10. If you do, quantify the amount of these
transactions at each quarterl y balance sheet date for each of the past three years.
Provide a detailed analysis supporting your decision to account for these securities
lending transactions as sales.
Whether you have any other transactions invol ving the transfer of financial assets with
an obligation to repurchase the transferred a ssets, similar to repurchase or securities
lending transactions that you account for as sa les pursuant to the guidance in ASC 860.
If you do, describe the key terms and nature of these transactions and quantify the
amount of the transactions at each quarterly balan ce sheet date for the past three years.
Whether you have offset financial assets a nd financial liabilities in the balance sheet
where a right of setoff – the general princi ple for offsetting – does not exist. If you
have offset financial assets a nd financial liabilities in the balance sheet where a right of
setoff does not exist, please identify those circumstances, explain the basis for your
presentation policy, and quantify the gross am ount of the financial assets and financial
liabilities that are offset in the balance sheet. For example, please tell us whether you have offset securities owned (long positions) wi th securities sold, but not yet purchased
(short positions), along with any basis for your presentation policy and the related gross
amounts that are offset.
8. If you accounted for repurchase agreements, s ecurities lending transactions, or other
transactions involving the transf er of financial assets with an obligation to repurchase the
Steven Mumma
New York Mortgage Trust, Inc. September 22, 2010
Page 4
Schedule 14-A
transferred assets as sales and did not provide disclosure of those transactions in your
Management’s Discussion and Analysis, please advise us of the basis for your conclusion
that disclosure was not necessary and desc ribe the process you undertook to reach that
conclusion. We refer you to paragraphs (a)( 1) and (a)(4) of Item 303 of Regulation S-K
Our Board’s Role in Risk Oversight, page 16
9. On page 17, we note that the compensati on committee “does not believe that its
compensation policies encourag e excessive risk-taking....” It appears that the noted
disclosure was provided in response to It em 402(s) of Regulation S-K. If it was
determined that your compensation policies a nd practices are not r easonably likely to
have a material adverse effect on you, please describe the process you undertook to reach
the conclusion that disclosu re is not necessary.
Proposal One: Election of Directors, page 5
Nominees for Election as Directors, page 5
10. We note your disclosure regardi ng your director nominees which states the qualifications
and skills of such individuals to serve as di rectors. For each director nominee, briefly
discuss the specific experience, qualifications , attributes or skills that led to the
conclusion that the person should serve as a director. Please see Item 401(e)(1) of
Regulation S-K. Please provide this disclosure in future filings and provide us with your
proposed disclosure.
Executive Compensation, page 25
Compensation Discussion and Analysis, page 25
Process for Setting Executive Compensation, page 26
11. You disclose that in determining co mpensation for a specific executive, the
Compensation Committee cons iders many factors, including the executive’s job
performance compared to goals and objectives established for the executive at the beginning of the year, the compensation levels of competitive jobs, and your financial performance and financial condition and certain discretionary factors. Please provide
additional disclosure for each of these items. For example, please disclose the goals and objectives for each of your executives as well as their actual job performance compared to such goals and objectives. Disclose the compensation levels of competitive jobs. We
also note the disclosure on page 28 regardi ng your performance, but please disclose in
greater detail your financial performan ce and financial condition and the specific
contributions of Messrs. Mumma and Reese to your financial performance and financial condition. Please provide this disclosure in future filings and provide us with your
proposed disclosure.
Steven Mumma
New York Mortgage Trust, Inc. September 22, 2010
Page 5
Executive Compensation Program Components, page 26
Annual Incentive Compensation, page 27
12. You disclose that you award di scretionary cash bonuses to the named executive officers
based on your financial a nd operating performance duri ng 2009 and such officers’
contributions to your performance. Pleas e explain how your fi nancial and operating
performance during 2009 and the named execu tive officers’ contributions led to the
decision to award bonuses and the amount of such bonuses. Please provide this
disclosure in future filings and provide us with your proposed disclosure.
Long-Term Incentive Compensation, page 28
13. You disclose the size of the restricted stock awards were influenced by your desire to
increase the executive’s ownership stake in you and with regard to the total amount of
compensation to be earned by them. Please also disclose how these amounts – 62,000 shares of restricted stock to Mr. Mumma (h aving a grant date fair value of $327,360) and
12,000 shares of restricted stock to Mr. Rees e (having a grant date fair value of $63,360)
– were decided upon. Please provide this disclosu re in future filings and provide us with
your proposed disclosure.
We urge all who are responsible for the accura cy and adequacy of th e disclosure in the
filing to be certain that the filing includes th e information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require. Since the company and its management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.
In responding to our comments, please provide a written statement from the company
acknowledging that:
• the company is responsible for the adequacy and accuracy of the disclo sure in the filing;
• staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and
• the company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federa l securities laws of the United States.
You may contact Howard Efron, Staff Accountant, at (202) 551-3439 or me at (202) 551-
3629 if you have questions regarding comments on the financial statements and related matters.
Steven Mumma
New York Mortgage Trust, Inc. September 22, 2010 Page 6
Please contact Phil Rothenberg, Staff Attorney, at (202) 551-3466 or Duc Dang, Staff Attorney
at (202) 551-3386 with regard to legal comments.
Sincerely,
Kevin Woody Branch Chief