Maryland | 001 36844 | 47 1271842 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition |
Item 7.01. | Regulation FD Disclosure |
Item 9.01. | Financial Statements and Exhibits |
Exhibit | Description | |
99.1 | Press Release dated November 6, 2018 | |
99.2 | November 2018 Presentation Materials |
Exhibit | Description | |
99.1 | ||
99.2 |
GREAT AJAX CORP. | ||
By: | /s/ Mary Doyle | |
Name: | Mary Doyle | |
Title: | Chief Financial Officer |
• | Purchased $64.4 million of re-performing mortgage loans ("RPLs") and $1.4 million non-performing mortgage loans ("NPLs") with an aggregate unpaid principal balance (“UPB”) of $70.9 million and underlying collateral value of $106.1 million; and originated $4.8 million of small-balance commercial mortgage loans ("SBCs"). |
• | Interest income of $27.4 million; net interest income of $14.1 million. |
• | Net income attributable to common stockholders of $6.6 million. |
• | Basic earnings per share (“EPS”) of $0.35. |
• | Taxable income of $0.35 per share. |
• | Book value per share of $15.61 at September 30, 2018. |
• | Collected $55.8 million of cash from our portfolio and held $59.8 million of cash and cash equivalents at September 30, 2018. |
September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | ||||||||||||||||
Loan interest income(1,2) | $ | 26,261 | $ | 26,158 | $ | 25,445 | $ | 24,231 | $ | 24,396 | ||||||||||
Total revenue(1,3) | $ | 14,750 | $ | 14,777 | $ | 14,743 | $ | 13,797 | $ | 14,226 | ||||||||||
Consolidated net income(1) | $ | 7,495 | $ | 8,213 | $ | 8,322 | $ | 6,638 | $ | 7,716 | ||||||||||
Net income per basic share | $ | 0.35 | $ | 0.40 | $ | 0.41 | $ | 0.34 | $ | 0.41 | ||||||||||
Average equity(1) | $ | 323,750 | $ | 319,815 | $ | 318,839 | $ | 302,482 | $ | 292,640 | ||||||||||
Average total assets(1) | $ | 1,381,742 | $ | 1,362,843 | $ | 1,377,537 | $ | 1,230,026 | $ | 1,157,223 | ||||||||||
Average daily cash balance(4) | $ | 40,674 | $ | 41,617 | $ | 51,540 | $ | 47,717 | $ | 43,666 | ||||||||||
Average carrying value of RPLs(1) | $ | 1,177,586 | $ | 1,182,904 | $ | 1,199,638 | $ | 1,046,126 | $ | 998,692 | ||||||||||
Average carrying value of NPLs(1) | $ | 38,237 | $ | 40,767 | $ | 40,593 | $ | 43,400 | $ | 44,919 | ||||||||||
Average carrying value of originated SBC loans | $ | 11,439 | $ | 11,784 | $ | 11,629 | $ | 11,273 | $ | 8,427 | ||||||||||
Average asset level debt balance(1,5) | $ | 948,893 | $ | 941,533 | $ | 961,853 | $ | 840,882 | $ | 791,377 |
(1) | Reflects the impact of consolidating the assets, liabilities and non-controlling interest of Ajax Mortgage Loan Trust 2017-D ("2017-D") and Ajax Mortgage Loan Trust 2018-C ("2018-C"), which is 50% and 37%, respectively, owned by third-party institutional investors. |
(2) | Loan interest income excludes interest income from debt securities and bank account balances. |
(3) | Total revenue includes net interest income, income from equity method investments and other income. |
(4) | Average daily cash balance includes cash and cash equivalents, and excludes cash held in trust. |
(5) | All quarters have been updated to reflect average asset level debt balance from total average debt balance. |
September 30, 2018(1) | June 30, 2018 | March 31, 2018 | December 31, 2017(2) | September 30, 2017 | ||||||||||||||||
RPLs | ||||||||||||||||||||
Count | 271 | 64 | 87 | 1,211 | 109 | |||||||||||||||
UPB | $ | 69,211 | $ | 15,549 | $ | 19,699 | $ | 241,309 | $ | 32,718 | ||||||||||
Purchase price | $ | 64,428 | $ | 14,313 | $ | 17,566 | $ | 219,236 | $ | 26,645 | ||||||||||
Purchase price % of UPB | 93.1 | % | 92.1 | % | 89.2 | % | 90.9 | % | 81.4 | % | ||||||||||
NPLs | ||||||||||||||||||||
Count | 11 | — | — | — | — | |||||||||||||||
UPB | $ | 1,700 | $ | — | $ | — | $ | — | $ | — | ||||||||||
Purchase price | $ | 1,431 | $ | — | $ | — | $ | — | $ | — | ||||||||||
Purchase price % of UPB | 84.2 | % | — | % | — | % | — | % | — | % |
(1) | Includes the impact of 256 mortgage loans with a purchase price of $47.4 million and UPB of $52.8 million acquired through a 63% owned joint venture that we consolidate. |
(2) | Includes the impact of 1,003 mortgage loans with a purchase price of $177.3 million and UPB of $194.3 million acquired in the fourth quarter of 2017 through a 50% owned joint venture that we consolidate. |
No. of loans | 6,858 | Weighted average LTV(4) | 86.2 | % | ||||||
Total UPB | $ | 1,449,800 | Weighted average remaining term (months) | 314 | ||||||
Interest-bearing balance | $ | 1,355,022 | No. of first liens | 6,834 | ||||||
Deferred balance(1) | $ | 94,779 | No. of second liens | 24 | ||||||
Market value of collateral(2) | $ | 1,983,629 | No. of rental properties | 17 | ||||||
Price/total UPB(3) | 81.7 | % | Market value of rental properties | $ | 8,704 | |||||
Price/market value of collateral | 61.7 | % | Capital invested in rental properties | $ | 8,245 | |||||
Re-performing loans | 96.1 | % | Price/market value of rental properties | 94.7 | % | |||||
Non-performing loans | 2.9 | % | No. of other REO | 116 | ||||||
Originated SBC loans | 1.0 | % | Market value of other REO(5) | $ | 22,746 | |||||
Weighted average coupon | 4.49 | % |
(1) | Amounts that have been deferred in connection with a loan modification on which interest does not accrue. These amounts generally become payable at maturity. |
(2) | As of date of acquisition. |
(3) | Our loan portfolio consists of fixed rate (52.8% of UPB), ARM (10.5% of UPB) and Hybrid ARM (36.7% of UPB) mortgage loans. |
(4) | UPB as of September 30, 2018 divided by market value of collateral and weighted by the UPB of the loan. |
(5) | Market value of other REO is the estimated expected gross proceeds from the sale of the REO less estimated costs to sell, including repayment of servicer advances. |
CONTACT: | Lawrence Mendelsohn |
Chief Executive Officer | |
or | |
Mary Doyle | |
Chief Financial Officer | |
Mary.Doyle@aspencapital.com | |
503-444-4224 |
Three months ended | ||||||||||||||||
September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | |||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
INCOME: | ||||||||||||||||
Interest income | $ | 27,416 | $ | 26,690 | $ | 25,591 | $ | 24,367 | ||||||||
Provision for loan losses | (365 | ) | — | — | — | |||||||||||
Interest expense | (12,997 | ) | (12,799 | ) | (12,494 | ) | (11,382 | ) | ||||||||
Net interest income | 14,054 | 13,891 | 13,097 | 12,985 | ||||||||||||
Income from equity method investments | 239 | 197 | 192 | 163 | ||||||||||||
Other income | 457 | 689 | 1,454 | 649 | ||||||||||||
Total income | 14,750 | 14,777 | 14,743 | 13,797 | ||||||||||||
EXPENSE: | ||||||||||||||||
Related party expense - loan servicing fees | 2,457 | 2,672 | 2,469 | 2,242 | ||||||||||||
Related party expense - management fee | 1,456 | 1,440 | 1,532 | 1,510 | ||||||||||||
Loan transaction expense | (25 | ) | 35 | 355 | 214 | |||||||||||
Professional fees | 482 | 506 | 609 | 856 | ||||||||||||
Real estate operating expense | 1,001 | 944 | 449 | 518 | ||||||||||||
Other expense | 964 | 965 | 991 | 871 | ||||||||||||
Total expense | 6,335 | 6,562 | 6,405 | 6,211 | ||||||||||||
Loss on debt extinguishment | 836 | — | — | 913 | ||||||||||||
Income before provision for income tax | 7,579 | 8,215 | 8,338 | 6,673 | ||||||||||||
Provision for income tax | 84 | 2 | 16 | 35 | ||||||||||||
Consolidated net income | 7,495 | 8,213 | 8,322 | 6,638 | ||||||||||||
Less: consolidated net income attributable to non-controlling interests | 937 | 692 | 657 | 454 | ||||||||||||
Consolidated net income attributable to common stockholders | $ | 6,558 | $ | 7,521 | $ | 7,665 | $ | 6,184 | ||||||||
Basic earnings per common share | $ | 0.35 | $ | 0.40 | $ | 0.41 | $ | 0.34 | ||||||||
Diluted earnings per common share | $ | 0.34 | $ | 0.37 | $ | 0.38 | $ | 0.33 | ||||||||
Weighted average shares – basic | 18,691,393 | 18,595,769 | 18,508,089 | 18,236,488 | ||||||||||||
Weighted average shares – diluted | 26,592,806 | 26,476,817 | 26,395,158 | 26,111,202 |
ASSETS | September 30, 2018 | December 31, 2017 | ||||||
(Unaudited) | ||||||||
Cash and cash equivalents | $ | 59,758 | $ | 53,721 | ||||
Cash held in trust | 45,527 | 27,041 | ||||||
Mortgage loans, net(1,4) | 1,272,644 | 1,253,541 | ||||||
Property held-for-sale, net(2) | 20,463 | 24,947 | ||||||
Rental property, net | 8,080 | 1,284 | ||||||
Investments at fair value | 51,751 | 6,285 | ||||||
Receivable from servicer | 13,106 | 17,005 | ||||||
Investments in affiliates | 8,737 | 7,020 | ||||||
Prepaid expenses and other assets | 12,410 | 4,894 | ||||||
Total assets | $ | 1,492,476 | $ | 1,395,738 | ||||
LIABILITIES AND EQUITY | ||||||||
Liabilities: | ||||||||
Secured borrowings, net(1,3,4) | $ | 631,207 | $ | 694,040 | ||||
Borrowings under repurchase transactions | 420,461 | 276,385 | ||||||
Convertible senior notes, net(3) | 103,162 | 102,571 | ||||||
Management fee payable | 777 | 750 | ||||||
Accrued expenses and other liabilities | 4,704 | 4,554 | ||||||
Total liabilities | 1,160,311 | 1,078,300 | ||||||
Equity: | ||||||||
Preferred stock $0.01 par value; 25,000,000 shares authorized, none issued or outstanding | — | — | ||||||
Common stock $0.01 par value; 125,000,000 shares authorized, 18,856,601 shares at September 30, 2018 and 18,588,228 shares at December 31, 2017 issued and outstanding | 189 | 186 | ||||||
Additional paid-in capital | 258,854 | 254,847 | ||||||
Treasury stock | (232 | ) | — | |||||
Retained earnings | 40,518 | 35,556 | ||||||
Accumulated other comprehensive income/(loss) | (203 | ) | (233 | ) | ||||
Equity attributable to stockholders | 299,126 | 290,356 | ||||||
Non-controlling interests(5) | 33,039 | 27,082 | ||||||
Total equity | 332,165 | 317,438 | ||||||
Total liabilities and equity | $ | 1,492,476 | $ | 1,395,738 |
(1) | Mortgage loans, net include $914.2 million and $996.2 million of loans at September 30, 2018 and December 31, 2017, respectively, transferred to securitization trusts that are variable interest entities (“VIEs”); these loans can only be used to settle obligations of the VIEs. Secured borrowings consist of notes issued by VIEs that can only be settled with the assets and cash flows of the VIEs. The creditors do not have recourse to the primary beneficiary (Great Ajax Corp.). Mortgage loans, net include $0.4 million and $0 of allowance for loan losses at September 30, 2018 and December 31, 2017, respectively. |
(2) | Property held-for-sale, net, includes valuation allowances of $2.0 million and $1.8 million at September 30, 2018 and December 31, 2017, respectively. |
(3) | Secured borrowings and convertible senior notes are presented net of deferred issuance costs. |
(4) | As of September 30, 2018, balances for Mortgage loans, net includes $338.7 million and Secured borrowings, net of deferred costs includes $237.0 million from the 50% and 63% owned joint ventures. As of December 31, 2017, balances for Mortgage loans, net includes $177.1 million and Secured borrowings, net of deferred costs includes $88.4 million from the 50% owned joint venture, all of which we consolidate under U.S. GAAP. |
(5) | Non-controlling interests includes $19.9 million at September 30, 2018, from the 50% and 63% owned joint ventures. Non-controlling interests includes $14.0 million at December 31, 2017, from a 50% owned joint venture, all of which we consolidate under U.S. GAAP. |
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