NEW YORK--(BUSINESS WIRE)--Great Ajax Corp. (NYSE: AJX), a Maryland corporation that is a real estate investment trust, today announces results of operations for the quarter ended June 30, 2015. Great Ajax focuses primarily on acquiring, investing in and managing a portfolio of re-performing and non-performing mortgage loans secured by single-family residences and, to a lesser extent, of single-family properties. For the three and six month periods ended June 30, 2015, we had revenues of $8.8 million and $14.8 million, respectively, and net income attributable to common stockholders of $5.4 million and $9.1 million, respectively. Net income per fully diluted share for the three and six months ended June 30, 2015 was $0.36 and $0.64, respectively. For the quarter ended June 30, 2015, our loan transaction expense included approximately $0.3 million or $0.02 per fully diluted share of additional due diligence expenses related to approximately 550 mortgage loans from new sellers which were excluded from our purchases since these loans did not meet our acquisition criteria or quality standards. Loan transaction costs are not capitalized, and are expensed as incurred. Our average daily cash balance during the quarter was $43.6 million, and the average daily carrying values for our re-performing mortgage loans (“RPLs”) and non-performing mortgage loans (“NPLs”) were $283.1 million and $72.7 million respectively. As we did not commence operations until July 2014, we cannot provide any comparative results for the quarter ended June 30, 2014.
During the quarter ended June 30, 2015, we acquired 827 mortgage loans secured by single and one-to-four family residences with an aggregate unpaid principal balance (“UPB”) of $204.6 million. The aggregate purchase price for the mortgage loans was $159.5 million. RPLs represented $188.9 million UPB and $150.4 million purchase price and NPLs represented $15.7 million UPB and $9.0 million purchase price. The purchase price for RPLs and NPLs equaled 66.3 % and 58.9%, respectively, of the estimated market value of the underlying collateral. Mortgage loans purchased in the quarter were on our balance sheet for a weighted average of 41.7 days. We also purchased one REO property during the quarter for $0.1 million, which was 63.1% of the estimated market value.
As of the quarter end, of the 2,620 loans in our portfolio, 80.3% were re-performing loans and 19.7% were non-performing loans based on UPB. As of the quarter end, our portfolio of mortgage-related assets consisted of the following:
|Portfolio as of June 30, 2015(1)|
|No. of Loans||2,620||No. of Rental Properties||2|
|Total UPB||$598,908,668||Market Value of Rental Properties||$144,900|
|Interest-Bearing Balance||$562,294,615||Capital Invested||$122,199|
Price/Market Value of Rental Properties
Market Value of Collateral(3)
No. Other REO
|Price/Market Value of Collateral||66.4%||
Market Value of Other REO
|Weighted Average Coupon(4)||4.64%||
|Weighted Average LTV(5)||106%|
|Weighted Average Remaining Term (as of June 30, 2015)||316.2|
|No. of first liens||2,597|
|No. of second liens||23|
(1) Information reflects one loan in which we hold a 40.5% beneficial interest through an equity method investee and two loans in which we have a 95% Participation interest and are owned by the Servicer because neither we nor our subsidiaries have the necessary licenses in certain states.
(2) Amounts that have been deferred in connection with a loan modification on which interest does not accrue. These amounts generally become payable at the time of maturity.
(3) As of acquisition date.
(4) Our loan portfolio consists of fixed rate (47.6% of UPB), ARM (20.2% of UPB) and Hybrid ARM (32.2% of UPB) mortgage loans with original terms to maturity of not more than 40 years.
(5) UPB as of June 30, 2015 divided by market value of collateral as of acquisition date and weighted by the UPB of the loan
On August 3, 2015, we declared a dividend of $0.22 per share, which will be payable on August 28, 2015 to stockholders of record as of August 14, 2015.
Subsequent to quarter end we completed our fourth securitization, which closed on July 2, 2015. An aggregate of $87.2 million of senior securities and $15.9 million of subordinated securities were issued in a private offering with respect to $158.5 million UPB of mortgage loans. Approximately 56.2% of these mortgage loans were RPLs and approximately 43.8% were NPLs based on UPB. Net proceeds from the sale of the senior securities provided leverage of approximately 3.3 times the related equity.
During July 2015, we completed the acquisition of 158 re-performing mortgage loans secured by single and one-to-four family residences with aggregate UPB of $46.8 million. The loans were acquired at 77.0% of UPB and the estimated market value of the underlying collateral is $60.5 million. The purchase price equaled 59.6% of the estimated market value of the underlying collateral.
In addition, we have agreed to acquire, subject to due diligence, 234 RPLs secured by single and one-to-four family residences with aggregate UPB of $38.5 million in six transactions from six sellers. The aggregate purchase price is $26.0 million which represents 67.5% of UPB and 69.3% of the estimated market value of the underlying collateral. While these acquisitions are expected to close by August 31, 2015, there can be no assurance that these acquisitions will close or that the terms may not change.
Great Ajax will host a conference call at 5:00 p.m. EDT, August 3, 2015 to review our financial results for the quarter ended June 30, 2015. A live Webcast of the conference call will be accessible from the Investor Relations section of our website www.great-ajax.com. An archive of the Webcast will be available through January 3, 2016.
About Great Ajax Corp.
Great Ajax Corp. is a Maryland corporation that focuses primarily on acquiring, investing in and managing mortgage loans secured by single-family residences and, to a lesser extent, single-family properties themselves. We also invest in loans secured by multi-family residential and smaller commercial mixed use retail/residential properties, as well as in the properties directly. We are externally managed by Thetis Asset Management LLC. Our mortgage loans and other real estate assets are serviced by Gregory Funding LLC, an affiliated entity. We intend to qualify and have elected to be taxed as a real estate investment trust under the Internal Revenue Code.
This press release contains certain forward-looking statements, including statements with regard to Great Ajax’s proposed securities offering. Words such as “believes,” “intends,” “expects,” “projects,” “anticipates,” and “future” or similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions, many of which are beyond the control of Great Ajax, including, without limitation, the risk factors and other matters set forth in its Annual Report on Form 10-K for the period ended December 31, 2014 filed with the SEC and in its other filings with the SEC, including our Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, and when filed, our Quarterly Report on Form 10-Q for the quarter ended June 30, 2015. Great Ajax undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.
|GREAT AJAX CORP. AND SUBSIDIARIES|
|CONSOLIDATED STATEMENTS OF INCOME|
|(Dollars in thousands except share and per share amounts)|
|Three months ended||Six months ended|
|June 30, 2015||June 30, 2015|
|Loan interest income||$||10,793||$||17,677|
|Net interest income||8,524||14,333|
|Related party expense - management fee||856||1,602|
|Related party expense - loan servicing fees||851||1,507|
|Loan transaction expense||729||989|
|Income before provision for income tax||5,675||9,490|
|Provision for income tax||16||16|
|Consolidated net income||5,659||9,474|
|Less: consolidated net income attributable to noncontrolling interests||223||398|
|Consolidated net income attributable to common stockholders||$||5,436||$||9,076|
|Basic earnings per common share||$||0.36||$||0.64|
|Diluted earnings per common share||$||0.36||$||0.64|
|Weighted average shares - basic||15,237,739||14,129,162|
|Weighted average shares - diluted||15,909,634||14,801,319|
|GREAT AJAX CORP. AND SUBSIDIARIES|
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands except share and per share amounts)
|June 30, 2015||
December 31, 2014
Cash and cash equivalents
|Mortgage loans, net(1)||444,408||211,159|
|Rental property, net||121||290|
|Receivable from servicer||3,538||1,340|
|Investment in affiliate||2,445||2,237|
|Prepaid expenses and other assets||6,068||3,317|
LIABILITIES AND EQUITY
|Borrowings under repurchase agreement||153,804||15,249|
|Management fee payable||441||258|
|Accrued expenses and other liabilities||2,794||1,292|
|Preferred stock $.01 par value; 25,000,000 shares authorized, none issued or outstanding||-||-|
|Common stock $.01 par value; 125,000,000 shares authorized, 15,253,998 shares issued and outstanding, and 11,223,984 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively||152||112|
|Additional paid-in capital||211,361||158,951|
Equity attributable to common
|Total Liabilities and Equity||$||501,838||$||272,758|
(1) Mortgage loans includes $179,808 and $127,559 of loans transferred to securitization trusts that are variable interest entities (“VIEs”) that 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.).
(2) Net book value per diluted share was $14.36 and $14.43 at June 30, 2015 and December 31, 2014 respectively.