Exhibit 99.1 
logoa02.jpg
GREAT AJAX CORP. ANNOUNCES RESULTS FOR THE QUARTER
ENDED MARCH 31, 2018
 
First Quarter Highlights
Purchased $17.6 million of re-performing mortgage loans (“RPLs”) with an aggregate unpaid principal balance (“UPB”) of $19.7 million and underlying collateral value of $32.4 million.
Interest income of $25.6 million; net interest income of $13.1 million.
Net income attributable to common stockholders of $7.7 million.
Basic earnings per share (“EPS”) of $0.41.
Taxable income of $0.37 per share.
Book value per share of $15.53 at March 31, 2018.
Held $47.5 million of cash and cash equivalents at March 31, 2018.

New York, NY—May 1, 2018 —Great Ajax Corp. (NYSE: AJX), a Maryland corporation that is a real estate investment trust, today announces its results of operations for the quarter ended March 31, 2018. We focus primarily on acquiring, investing in and managing a portfolio of RPLs secured by single-family residences and commercial properties and, to a lesser extent, non-performing mortgage loans (“NPLs”). In addition to our continued focus on residential RPLs, we also originate and acquire small balance commercial loans ("SBC loans") secured by multi-family residential and commercial mixed use retail/residential properties.
 
Financial Results (Unaudited)
($ in thousands except per share amounts)
 
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
 
June 30, 2017
 
March 31, 2017
 
Loan interest income(1,2)
 
$
25,445

 
$
24,231

 
$
24,396

 
$
21,682

 
$
20,556

 
Total revenue(1,3)
 
$
14,743

 
$
13,797

 
$
14,226

 
$
13,105

 
$
13,667

 
Consolidated net income(1)
 
$
8,322

 
$
6,638

 
$
7,716

 
$
7,102

 
$
8,698

 
Net income per diluted share
 
$
0.38

 
$
0.33

 
$
0.38

 
$
0.36

 
$
0.46

 
Average equity(1)
 
$
318,839

 
$
302,482

 
$
292,640

 
$
288,884

 
$
284,872

 
Average total assets(1)
 
$
1,377,537

 
$
1,230,026

 
$
1,157,223

 
$
1,050,108

 
$
952,112

 
Average daily cash balance(4)
 
$
51,540

 
$
47,717

 
$
43,666

 
$
47,705

 
$
35,513

 
Average carrying value of RPLs(1)
 
$
1,199,638

 
$
1,046,126

 
$
998,692

(5)
$
898,749

(5)
$
810,166

(5)
Average carrying value of NPLs
 
$
40,593

 
$
43,400

 
$
44,919

(5)
$
48,396

(5)
$
52,770

(5)
Average carrying value of originated SBC loans
 
$
11,629

 
$
11,273

 
$
8,427

(5)
$
5,493

(5)
$
2,781

(5)
Average debt balance(1)
 
$
1,064,490

 
$
943,329

 
$
883,770

 
$
775,717

 
$
669,938

 
____________________________________________________________

(1)
Reflects the impact of consolidating the assets, liabilities and non-controlling interest of Ajax Mortgage Loan Trust 2017-D, which is 50% owned by a third-party institutional investor.
(2)
Loan interest income excludes interest income from debt securities and bank account balances.
(3)
Total revenue includes net interest income, income from investments in our manager and other income.
(4)
Average daily cash balance includes cash and cash equivalents, and excludes cash held in trust.
(5)
The 2017 quarterly average balances for mortgage loans were calculated using daily ending balances. Prior quarters of 2017 have been restated to conform to the current quarter presentation.






Our consolidated net income increased $1.7 million for the quarter ended March 31, 2018 compared to the quarter ended December 31, 2017, primarily due to the acceleration of deferred issuance costs of $0.9 million in the fourth quarter of 2017 related to calling our 2015-B and -C securitizations. Additionally, we realized an increase in fee income from the Home Affordable Modification Program and a gain, net of impairments, on real estate owned property ("REO") sales. Our net interest income increased $0.1 million as a result of recording a full quarter of acquisitions, net of funding costs, that were made in the quarter ended December 31, 2017. Although we only hold a 50% interest in the assets of Ajax Mortgage Loan Trust 2017-D, we are required to consolidate 100% of its assets and record an offsetting liability and non-controlling interest for the debt and equity, respectively, held by our joint venture partner. Accordingly, our net interest income reflects the impact of consolidating the joint venture.

On January 26, 2018, we agreed to acquire an 8% ownership interest in Great Ajax Financial Services LLC (“GAFS”), the parent of our servicer, Gregory Funding LLC. The acquisition will be completed in two steps. On January 26, 2018, the initial closing, we acquired a 4.9% interest in GAFS and three warrants, each exercisable for a 2.45% interest in GAFS upon payment of additional consideration, in exchange for consideration of $1.1 million of cash and 45,938 shares of our common stock. At the date of an additional closing, expected to take place at the end of May, 2018, we expect to acquire the remaining 3.1% interest in GAFS and three warrants, each exercisable for a 1.55% interest in GAFS, in exchange for consideration of $0.7 million of cash and shares of our common stock with a value of approximately $0.4 million, with the actual number of shares dependent upon our common stock’s public trading price at the close of trading on the day immediately preceding the date of the additional closing.

We collected $50.4 million on our mortgage loan and REO portfolios through loan payments, loan payoffs and sales of REO during the quarter, and ended the first quarter with $47.5 million in cash and cash equivalents. We had an average cash balance of $51.5 million during the quarter. We continue to see a high volume of payoffs in certain RPL cohorts as borrowers continue to refinance or sell the underlying real property. Additionally, we continue to experience duration extension in other cohorts of our RPL portfolio resulting from materially lower than expected delinquencies and higher expected future cash flows in the form of interest and principal payments. This results in a significant aggregate increase in expected future cash flows for these loans but a lower current yield and lower expected current period income. The increase in the quality of the portfolio has resulted in a lower cost of funds on our securitization transactions.

We acquired $17.6 million of RPLs with an aggregate UPB of $19.7 million, and underlying collateral values of $32.4 million during the quarter to end the period with $1,247.2 million of mortgage loans with an aggregate UPB of $1,448.3 million. Mortgage loans purchased during the first quarter and held as of quarter-end were on our consolidated balance sheet for a weighted average of 56 days during the quarter.

Portfolio Acquisitions
($ in thousands)
 
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
 
June 30, 2017
 
March 31, 2017
RPLs
 
 
 
 
 
 

 
 

 
 

Count
 
87

 
1,211

(1)
109

 
1,218

 
24

UPB
 
$
19,699

 
$
241,309

 
$
32,718

 
$
249,000

 
$
3,445

Purchase price
 
$
17,566

 
$
219,236

 
$
26,645

 
$
210,204

 
$
3,143

Purchase price % of UPB
 
89.2
%
 
90.9
%
 
81.4
%
 
84.4
%
 
91.2
%
 
____________________________________________________________

(1)
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.






The following table provides an overview of our portfolio at March 31, 2018 ($ in thousands):
No. of loans
 
6,840

 
Weighted average LTV(4)
 
87.5
%
Total UPB
 
$
1,448,313

 
Weighted average remaining term (months)
 
321

Interest-bearing balance
 
$
1,355,418

 
No. of first liens
 
6,819

Deferred balance(1)
 
$
92,895

 
No. of second liens
 
21

Market value of collateral(2)
 
$
1,942,170

 
No. of rental properties
 
15

Price/total UPB(3)
 
81.1
%
 
Market value of rental properties
 
$
6,087

Price/market value of collateral
 
61.8
%
 
Capital invested in rental properties
 
$
5,325

Re-performing loans
 
95.9
%
 
Price/market value of rental properties
 
87.5
%
Non-performing loans
 
3.2
%
 
No. of other REO
 
136

Originated SBC loans
 
0.9
%
 
Market value of other REO(5)
 
$
26,816

Weighted average coupon
 
4.36
%
 
 
 
 

 
____________________________________________________________

(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 (58.5% of UPB), ARM (10.0% of UPB) and Hybrid ARM (31.5% of UPB) mortgage loans.
(4)
UPB as of March 31, 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.

Subsequent Events

On April 26, 2018 we closed Ajax Mortgage Loan Trust 2018-A ("2018-A"), a joint venture with two independent third parties, which issued an aggregate of $128.0 million of senior securities and retained $32.0 million of equity issued with respect to $160.0 million UPB of mortgage loans.  Ninety-four percent of the UPB was RPLs, and 6.0% was NPLs.  The senior securities represent 80% of the UPB of the underlying mortgage loans. The securities may be sold by any party at a future date. We retained a 9.4% interest and expect to account for 2018-A as an equity-method investee. Subsequently, we acquired for the account of 2018-A, an additional 42 RPLs with an aggregate UPB of $13.2 million in one transaction from a single seller. The loans were acquired at 87.5% of UPB and 61.8% of the estimated market value of the underlying collateral value of $18.7 million. We also agreed to acquire for the account of 2018-A, subject to due diligence, 810 RPLs and 49 NPLs, with UBP of $138.3 million and $5.8 million, respectively, in three transactions from three different sellers. The RPL price equals 92.1% of UPB and 57.1% of the underlying collateral value of $223.0 million. The NPL price equals 57.5% of UPB and 39.6% of the underlying collateral value of $8.5 million.
Additionally, we have also agreed to acquire, subject to due diligence, 85 RPLs and 504 NPLs with UPB of $18.1 million and $123.7 million, respectively, in three transactions from three different sellers. The purchase price of the RPLs equals 91.9% of UPB and 60.0% of the estimated market value of the underlying collateral of $27.8 million. The purchase price of the NPLs equals 79.5% of UPB and 63.2% of the estimated market value of the underlying collateral of $155.6 million. Some of these loans may be acquired through a joint venture with institutional investors.
On April 23, 2018, our Board of Directors declared a dividend of $0.30 per share, to be paid on May 30, 2018 to common stockholders of record as of May 15, 2018.
 
Conference Call
Great Ajax will host a conference call at 5:00 p.m. EST, Tuesday, May 1, 2018 to review our financial results for the quarter. 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 for 90 days.
 
About Great Ajax Corp.
Great Ajax Corp. is a Maryland corporation that is a real estate investment trust, that focuses primarily on acquiring, investing in and managing RPLs secured by single-family residences and, to a lesser extent, NPLs. We also originate 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 have elected to be taxed as a real estate investment trust under the Internal Revenue Code.

Forward-Looking Statements
This press release contains certain forward-looking statements. 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 our Annual Report on Form 10-K for the period ended December 31, 2017 filed with the SEC on March 8, 2018. 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.

 
CONTACT:
Lawrence Mendelsohn
 
Chief Executive Officer
 
or
 
Mary Doyle
 
Chief Financial Officer
 
Mary.Doyle@aspencapital.com
 
503-444-4224





GREAT AJAX CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands except per share amounts)  
 
 
 
Three months ended
 
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
 
June 30, 2017
 
 
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
INCOME:
 


 
 

 
 

 
 

Interest income
 
$
25,591

 
$
24,367

 
$
24,529

 
$
21,721

Interest expense
 
(12,494
)
 
(11,382
)
 
(10,775
)
 
(9,293
)
Net interest income
 
13,097

 
12,985

 
13,754

 
12,428

 
 
 
 
 
 
 
 
 
Income from investment in Manager
 
135

 
89

 
143

 
142

Other income
 
1,511

 
723

 
329

 
535

Total income
 
14,743

 
13,797

 
14,226

 
13,105

 
 
 
 
 
 
 
 
 
EXPENSE:
 
 

 
 

 
 

 
 

Related party expense - loan servicing fees
 
2,469

 
2,242

 
2,187

 
1,935

Related party expense - management fee
 
1,532

 
1,510

 
1,428

 
1,330

Loan transaction expense
 
355

 
214

 
290

 
442

Professional fees
 
609

 
856

 
497

 
507

Real estate operating expense
 
449

 
518

 
1,151

 
637

Other expense
 
991

 
871

 
910

 
886

Total expense
 
6,405

 
6,211

 
6,463

 
5,737

Loss on debt extinguishment
 

 
913

 

 
218

Income before provision for income tax
 
8,338

 
6,673

 
7,763

 
7,150

Provision for income tax
 
16

 
35

 
47

 
48

Consolidated net income
 
8,322

 
6,638

 
7,716

 
7,102

Less: consolidated net income attributable to non-controlling interests
 
657

 
454

 
246

 
238

Consolidated net income attributable to common stockholders
 
$
7,665

 
$
6,184

 
$
7,470

 
$
6,864

Basic earnings per common share
 
$
0.41

 
$
0.34

 
$
0.41

 
$
0.38

Diluted earnings per common share
 
$
0.38

 
$
0.33

 
$
0.38

 
$
0.36

 
 
 
 
 
 
 
 
 
Weighted average shares – basic
 
18,508,089

 
18,236,488

 
18,072,045

 
18,008,499

Weighted average shares – diluted
 
26,395,158

 
26,111,202

 
25,246,764

 
23,026,679







GREAT AJAX CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands except per share amounts)
 
 
 
 
 
 
 
ASSETS
 
March 31, 2018
 
December 31, 2017
 
 
(Unaudited)
 


Cash and cash equivalents
 
$
47,459

 
$
53,721

Cash held in trust
 
26

 
301

Mortgage loans, net(1,4)
 
1,247,213

 
1,253,541

Property held-for-sale, net(2)
 
23,769

 
24,947

Rental property, net
 
5,228

 
1,284

Investment in debt securities
 
6,218

 
6,285

Receivable from servicer
 
18,627

 
17,005

Investment in affiliates
 
8,727

 
7,020

Loans purchase deposit
 

 
26,740

Prepaid expenses and other assets
 
5,318

 
4,894

Total assets
 
$
1,362,585

 
$
1,395,738

 
 
 
 
 
LIABILITIES AND EQUITY
 
 

 
 

Liabilities:
 
 

 
 

Secured borrowings, net(1,3,4)
 
$
662,494

 
$
694,040

Borrowings under repurchase transactions
 
273,199

 
276,385

Convertible senior notes, net(3)
 
102,764

 
102,571

Management fee payable
 
762

 
750

Accrued expenses and other liabilities
 
3,723

 
4,554

Total liabilities
 
1,042,942

 
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, 18,686,420 shares at March 31, 2018 and 18,588,228 shares at December 31, 2017 issued and outstanding
 
187

 
186

Additional paid-in capital
 
256,512

 
254,847

Retained earnings
 
37,615

 
35,556

Accumulated other comprehensive loss
 
(343
)
 
(233
)
Equity attributable to stockholders
 
293,971

 
290,356

Non-controlling interests(5)
 
25,672

 
27,082

Total equity
 
319,643

 
317,438

Total liabilities and equity
 
$
1,362,585

 
$
1,395,738

____________________________________________________________

​(1)
Mortgage loans, net include $954,282 and $996,203 of loans at March 31, 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.).
(2)
Property held-for-sale, net, includes valuation allowances of $1,878 and $1,784 at March 31, 2018, and December 31, 2017, respectively.
(3)
Secured borrowings and convertible senior notes are presented net of deferred issuance costs.
​(4)
As of March 31, 2018 and December 31, 2017, balances for Mortgage loans, net include​s $174.6 million and $177.1 million, Secured borrowings, net of deferred costs includes $75.9 million and $88.4 million, respectively, from a 50% owned joint venture, which we consolidate under generally accepted accounting principles in the United States, ("U.S. GAAP").
​(5)
Non-controlling interests includes $12.6 million and $14.0 million, respectively, from a 50% owned joint venture, which we consolidate under U.S. GAAP.


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