Exhibit 99.1
GREAT AJAX CORP. ANNOUNCES RESULTS FOR THE QUARTER
ENDED SEPTEMBER 30, 2015
Highlights
| · | Acquired re-performing residential and small balance commercial mortgage loans with aggregate unpaid principal balance (“UPB”) of $91.8 million for total purchase price of $66.8 million at an average price to UPB approximately equal to 72.9% |
| · | At September 30, 2015 owned a portfolio of 2,965 mortgage loans with aggregate UPB of $679.2 million and 64 properties |
| · | Net interest income of $10.6 million and $24.9 million for the three months and nine months ended September 30, 2015, respectively, compared to $2.3 million for the period from commenced operations (July 8, 2014) through September 30, 2014 |
| · | Net income attributable to common stockholders of $7.6 million and $16.7 million for the three and nine month periods, respectively, compared to $1.0 million for the period from commenced operations (July 8, 2014) through September 30, 2014 |
| · | GAAP net income of $0.50 per diluted share and $1.15 per diluted share for the three and nine months ended September 30, 2015, respectively, compared to $0.13 per diluted share for the period from commenced operations (July 8, 2014) through September 30, 2014 |
| · | Taxable net income for the three and nine months ended September 30, 2015 of $0.11 per diluted share and $0.46 per diluted share, respectively, compared to $0.02 for the period from commenced operations (July 8, 2014) though September 30, 2014 |
New York, NY— November 2, 2015 — Great Ajax Corp. (NYSE: AJX), a Maryland corporation that is a real estate investment trust,today announces results of operations for the quarter and the nine months ended September 30, 2015. We focus primarily on acquiring, investing in and managing a portfolio of re-performing and non-performing mortgage loans secured by single-family residences and commercial properties and, to a lesser extent, single-family properties. Since we commenced operations in July 2014, our results of operations for the quarter ended September 30, 2014 reflect our results for a partial period only. As a result, a comparison of the results of operations between the 2014 and the 2015 periods may not be comparable and is not indicative of the expected period to period variations. For the three and nine month periods ended September 30, 2015, we had revenues of $10.8 million and $25.6 million, respectively, and net income attributable to common stockholders of $7.6 million and $16.7 million, respectively. For the period from commenced operations (July 8, 2014) through September 30, 2014, we had revenues of $2.3 million, and net income attributable to common stockholders of $1.0 million. Net income per diluted share for the three and nine months ended September 30, 2015 was $0.50 and $1.15, respectively, compared to net income per diluted share for the period from date of commenced operations (July 8, 2014) through September 30, 2014 of $0.13. Our average daily cash balance during the quarter ended September 30, 2015 was $53.1
million, and the average daily carrying values for our re-performing mortgage loans (“RPLs”) and non-performing mortgage loans (“NPLs”) were $397.2 million and $75.2 million, respectively. For the period from commenced operations (July 8, 2014) through September 30, 2014, our average daily cash balance was $65.0 million and the average daily carrying values for our RPLs and NPLs were $34.1 million and $1.8 million, respectively. During the quarter ended September 30, 2015, we acquired 385 residential RPLs secured by single and one-to-four family residences with an aggregate UPB of $88.4 million. The aggregate purchase price for these residential RPLs was $64.1 million, representing 72.6% of UPB. The purchase price equaled 62.0% of the estimated market value of the underlying collateral of $103.3 million. We also acquired eight small balance commercial (“SBC”) RPLs with an aggregate UPB of $3.4 million. The aggregate purchase price for these SBC RPLs was $2.7 million, representing 80.7% of UPB. The purchase price equaled 54.1% of the estimated market value of the underlying collateral of $5.0 million. Mortgage loans purchased during the quarter and held as of quarter end were on our balance sheet for a weighted average of 42.1 days of the quarter. Our average assets during the quarter were $549.3 million and our average equity was $230.7 million. At quarter end, our total assets were $565.6 million and total equity was $233.1 million, compared to total assets of $501.8 million and total equity of $228.5 million at June 30, 2015, and total assets of $272.8 million and total equity of $171.3 at December 31, 2014.
As of the quarter end, of the 2,965 loans in our portfolio, 83.4% were re-performing loans and 16.6% 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 September 30, 2015(1) |
| No. of Loans | | | 2,965 | |
| Total UPB | | $ | 679,231,350 | |
| Interest-Bearing Balance | | $ | 633,210,165 | |
| Deferred Balance(2) | | $ | 46,021,185 | |
| Market Value of Collateral(3) | | $ | 759,436,420 | |
| Price/Total UPB(3) | | | 73.1 | % |
| Price/Market Value of Collateral | | | 65.6 | % |
| Weighted Average Coupon(4) | | | 4.52 | % |
| Weighted Average LTV(5) | | | 104.5 | % |
| Weighted Average Remaining | | | | |
| Term (as of September 30, 2015) | | | 317.8 | |
| No. of first liens | | | 2,943 | |
| No. of second liens | | | 22 | |
| No. of Rental Properties | | | 2 | |
| Market Value of Rental Properties | | $ | 144,900 | |
| Capital Invested | | $ | 122,199 | |
| Price/Market Value of Rental Properties | | | 84.3 | % |
| Gross Rent/Month | | $ | 2,100 | |
| No. Other REO | | | 62 | |
| Market Value of Other REO | | $ | 12,596,070 | |
| (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 (48.6% of UPB), ARM (17.3% of UPB) and Hybrid ARM (34.1% of UPB) mortgage loans with original terms to maturity of not more than 40 years. |
| (5) | UPB as of September 30, 2015 divided by market value of collateral as of acquisition date and weighted by the UPB of the loan. |
Subsequent Events
On October 27, 2015, our board of directors declared a dividend of $0.24 per share, which will be payable on November 27, 2015 to stockholders of record as of November 13, 2015.
Subsequent to quarter end we completed our fifth securitization, which closed on October 30, 2015. An aggregate of $82.0 million of senior securities and $13.0 million of subordinated securities were issued in a private offering with respect to $130.1 million UPB of mortgage loans. Approximately 84.9% of these mortgage loans were RPLs and approximately 15.1% were NPLs based on UPB. Net proceeds from the sale of the senior securities provided leverage of approximately 2.8 times the related equity.
During October 2015, we completed the acquisition of 28 RPLs secured by single and one-to-four family residences with aggregate UPB of $4.6 million. The loans were acquired at 79.3% of UPB and the estimated market value of the underlying collateral is $6.7 million. The purchase price equaled 54.6% of the estimated market value of the underlying collateral.
In addition, we have agreed to acquire, subject to due diligence, 309 mortgage loans with aggregate UPB of $48.4 million in nine transactions from seven different sellers. RPLs represent aggregate UPB of $47.9 million with a $35.9 million purchase price and NPLs represent aggregate UPB of $0.5 million with a $0.3 million purchase price. The purchase price for these mortgage loans is expected to aggregate to $36.2 million and represents 62.9% and 50.0% of the estimated market value of the underlying collateral for RPLs and NPLs, respectively. While these acquisitions are expected to close by November 30, 2015, there can be no assurance that these acquisitions will close or that the terms may not change.
On October 27, 2015, we entered into an amended and restated management agreement (the “Amended and Restated Agreement”) with Thetis Asset Management LLC (the “Manager”), which amended the method of payment of the Base Management Fee and Manager’s Incentive Fee to be payable in cash and shares of the Company’s common stock (the “Common Stock”) retroactive to July 1, 2015. The initial $1 million of the quarterly Base Management Fee will be payable 75% in cash and 25% in shares of Common Stock. Any amount of the Base Management Fee in excess of $1 million will be payable in shares of Common Stock until the total payment of the fee is 50% in cash and 50% in shares (the “50/50 split”). Any remaining amount of the quarterly Base Management Fee after the 50/50 split threshold is reached will be payable in equal amounts of cash and shares of Common Stock. As for the Manager’s Incentive Fee, in the event that the payment of the quarterly Base Management Fee has not reached the 50/50 split, all of the Incentive Fee will be payable in shares of Common Stock until the 50/50 split occurs. In the event that the total payment of the quarterly Base Management Fee and the Incentive Fee has reached the 50/50 split, 20% of the remaining Incentive Fee is payable in shares of Common Stock and 80% of the remaining Incentive Fee is payable in cash.
Conference Call
Great Ajax will host a conference call at 5:00 p.m. EST, November 2, 2015 to review our financial results for the quarter and the nine months ended September 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 for 90 days.
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 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, 2014 filed with the SEC and in our other filings with the SEC, including our Quarterly Report on Form 10-Q for the quarters ended March 31, 2015 and June 30, 2015, and when filed, our Quarterly Report on Form 10-Q for the quarter ended September 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.
| CONTACT: | Lawrence Mendelsohn |
Chief Executive Officer
or
Glenn J. Ohl
Chief Financial Officer
glenn@great-ajax.com
503-505-5670
GREAT AJAX CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands except share and per share amounts)
(unaudited)
| | | Periods ended September 30, 2015 | | | Period from
commenced
operations (July 8,
2014 through | |
| | | Three months ended | | | Nine months ended | | | September 30, 2014) | |
| INCOME: | | | | | | | | | | | | |
| Loan interest income | | $ | 14,440 | | | $ | 32,116 | | | $ | 2,266 | |
| Interest expense | | | (3,849 | ) | | | (7,192 | ) | | | - | |
| Net interest income | | | 10,591 | | | | 24,924 | | | | 2,266 | |
| | | | | | | | | | | | | |
| Other income | | | 217 | | | | 663 | | | | 25 | |
| Total income | | | 10,808 | | | | 25,587 | | | | 2,291 | |
| | | | | | | | | | | | | |
| EXPENSE: | | | | | | | | | | | | |
| Related party expense - management fee | | | 861 | | | | 2,464 | | | | 439 | |
| Related party expense - loan servicing fees | | | 1,196 | | | | 2,703 | | | | 157 | |
| Loan transaction expense | | | 310 | | | | 1,299 | | | | 129 | |
| Professional fees | | | 278 | | | | 1,019 | | | | 200 | |
| Other expense | | | 230 | | | | 679 | | | | 142 | |
| Total expense | | | 2,875 | | | | 8,164 | | | | 1,067 | |
| | | | | | | | | | | | | |
| Income before provision for income tax | | | 7,933 | | | | 17,423 | | | | 1,224 | |
| Provision for income tax | | | 8 | | | | 24 | | | | - | |
| Consolidated net income | | | 7,925 | | | | 17,399 | | | | 1,224 | |
| Less: consolidated net income attributable to noncontrolling interests | | | 311 | | | | 709 | | | | 228 | |
| Consolidated net income attributable to common stockholders | | $ | 7,614 | | | $ | 16,690 | | | $ | 996 | |
| Basic earnings per common share | | $ | 0.50 | | | $ | 1.15 | | | $ | 0.13 | |
| Diluted earnings per common share | | $ | 0.50 | | | $ | 1.15 | | | $ | 0.13 | |
| Weighted average shares - basic | | | 15,273,818 | | | | 14,514,907 | | | | 7,762,963 | |
| Weighted average shares - diluted | | | 15,926,052 | | | | 15,180,350 | | | | 8,207,705 | |
GREAT AJAX CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands except share and per share amounts)
(unaudited)
| | | September 30, 2015 | | | December 31, 2014 | |
| ASSETS | | | | | | | | |
| | | | | | | | | |
| Cash and cash equivalents | | $ | 28,507 | | | $ | 53,099 | |
| Mortgage loans, net(1) | | | 510,594 | | | | 211,159 | |
| Property held-for-sale | | | 9,168 | | | | 1,316 | |
| Rental property, net | | | 121 | | | | 290 | |
| Receivable from servicer | | | 6,458 | | | | 1,340 | |
| Investment in affiliate | | | 2,532 | | | | 2,237 | |
| Prepaid expenses and other assets | | | 8,218 | | | | 3,317 | |
| Total Assets | | $ | 565,598 | | | $ | 272,758 | |
| | | | | | | | | |
| LIABILITIES AND EQUITY | | | | | | | | |
| | | | | | | | | |
| Liabilities: | | | | | | | | |
| Secured borrowings(1) | | $ | 197,836 | | | $ | 84,679 | |
| Borrowings under repurchase agreement | | | 130,798 | | | | 15,249 | |
| Management fee payable | | | 646 | | | | 258 | |
| Accrued expenses and other liabilities | | | 3,209 | | | | 1,292 | |
| Total liabilities | | | 332,489 | | | | 101,478 | |
| | | | | | | | | |
| Equity: | | | | | | | | |
| Preferred stock $.01 par value; 25,000,000 shares authorized, none issued or outstanding | | | - | | | | - | |
| Common stock $.01 par value; 125,000,000 shares authorized, 15,285,528 shares issued and outstanding, and 11,223,984 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively | | | 152 | | | | 112 | |
| Additional paid-in capital | | | 211,595 | | | | 158,951 | |
| Retained earnings | | | 11,530 | | | | 2,744 | |
| Equity attributable to common stockholders | | | 223,277 | | | | 161,807 | |
| Noncontrolling interests | | | 9,832 | | | | 9,473 | |
| Total equity(2) | | | 233,109 | | | | 171,280 | |
| Total Liabilities and Equity | | $ | 565,598 | | | $ | 272,758 | |
(1) Mortgage loans includes $291,314 and $127,559 of loans transferred to securitization trusts at September 30, 2015 and December 31, 2014, respectively, 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 $14.64 and $14.43 at September 30, 2015 and December 31, 2014, respectively.
