New York Mortgage Trust (NYMT) along with two of its wholly owned subsidiaries has entered into a Notice of Termination and Letter Agreement with Harvest Capital Strategies (HCS), an affiliate of JMP Group to focus on residential and multi-family loans and securities.
According to the Termination Agreement, the NYMT Companies and HCS agreed that the Amended and Restated Advisory Agreement, dated as of 26 July 2010, will terminate on 31 December 2011.
HCS has also agreed to provide certain transitional consulting services to NYMT up to its annual stockholders’ meeting in May/June 2012. The assets emanating from the strategies will be managed by the Company, RiverBanc and The Midway Group.
Jim Fowler, Chairman of the Company’s Board of Directors and a portfolio manager for HCS and a managing director of JMP Group will continue to serve as a director and Chairman of the Board through this transitional period.
The termination of the agreement is expected to eliminate $1.0m of annual expense in future years while HCS will receive a termination fee equal to $2.2m.
Under the Advisory Agreement, commenced in January 2008, HCS provides investment advisory services to the NYMT Companies and manages certain alternative investments.
NYMT Company’s CEO and President Steven Mumma said that NYMT had generated improved earnings, increased its quarterly distributions, and has raised more than $30m in new capital through common stock offerings in 2011.