Great Ajax Corp. (NYSE:AJX) Q1 2022 Earnings Conference Call May 5, 2022 5:00 PM ET Company Participants Larry Mendelsohn – Chief Executive Officer Conference Call Participants Kevin Barker – Piper Sandler Eric Hagen – BTIG Operator Good afternoon, ladies and gentlemen, and welcome to the Great Ajax Corporation First Quarter 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. And please be advised that this call is being recorded. After the speakers’ prepared re ...

Great Ajax’s (NYSE:AJX) Q4 2021 Earnings Conference Call March 3, 2022 5:00 PM ET Company Participants Lawrence Mendelsohn - Chief Executive Officer Mary Doyle - Chief Financial Officer Conference Call Participants Kevin Barker - Piper Sandler Eric Hagen - BTIG Operator Ladies and gentlemen, thank you for standing by and welcome to the Great Ajax Corp Fourth Quarter Fiscal 2021 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a q ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to 001-36844 (Commission file number) GREAT AJAX CORP. (E ...

Financial Data and Key Metrics Changes - The overall cost of funds decreased by almost 30 basis points in Q3 2021, contributing to an increase in net interest income to approximately $18.1 million, which includes a $3.7 million acceleration of income on loans [3][14][19] - Net income attributable to common stockholders was $9.3 million or $0.40 per share after preferred dividends [14] - Book value increased to $16 per share at September 30, 2021, compared to $15.86 at June 30, 2021 [16] Business Line Data and Key Metrics Changes - Purchased reperforming loans (RPLs) represented approximately 88% of the loan portfolio at September 30, down from 96% at June 30 [21] - The company purchased $87.5 million in nonperforming loans (NPLs) with a total owing balance of approximately $96 million during Q3 [17] - Approximately 76.6% of the loan portfolio made at least 12 of the last 12 payments, up from 13% at the time of purchase [11][25] Market Data and Key Metrics Changes - California remains the largest segment of the loan portfolio, with consistent payment and performance patterns observed [23] - The company has seen strong prepayment patterns in various markets, particularly in Southern California, which has outperformed expectations during the COVID pandemic [23] - Demand and prices for homes have increased significantly in several metro areas, including Florida, Phoenix, Dallas, and Atlanta [24] Company Strategy and Development Direction - The company is in an offensive position, actively purchasing loans with specific characteristics at low percentages of underlying property value [4] - The strategy includes leveraging analytics and sourcing capabilities to broaden investment reach through joint ventures with institutional investors [8] - The company aims to maintain low leverage, with a corporate leverage ratio of 2.2 times as of September 30, 2021 [8] Management's Comments on Operating Environment and Future Outlook - Management noted that the impact of the COVID-19 economic environment on regular payment performance has been less than expected, with ongoing increases in loan cash flow velocity [11][26] - The company expects further reductions in interest expense as the cost of funds continues to decrease [14] - Management expressed optimism regarding the investment potential created by market volatility and the opportunities in the pipeline [5] Other Important Information - The company completed one rated securitization and a joint venture structure totaling $517 million in UPB during Q3 [17] - Approximately 28% of full loan payoffs in Q3 2021 were from loans over 180 days delinquent, up from 20% in Q2 [12] - The company declared a cash dividend of $0.24 to be paid on November 29, 2021 [27] Q&A Session Summary - There were no questions during the Q&A session, and the call concluded without further inquiries [30]

Financial Performance - For the three months ended June 30, 2021, the company reported net income attributable to common stockholders of $10.4 million, or $0.45 per share for basic and $0.42 per share for diluted common shares, compared to $6.2 million, or $0.27 per share for the same period in 2020[320]. - Total revenue for the three months ended June 30, 2021 was $19.8 million, compared to $16.3 million for the same period in 2020, reflecting a year-over-year increase of approximately 21.5%[323]. - Consolidated net income attributable to common stockholders for the three months ended June 30, 2021 was $10.4 million, compared to $6.2 million for the same period in 2020, marking a significant increase of approximately 67.1%[323]. - The company collected $78.9 million in cash payments and proceeds on mortgage loans, securities, and REO held-for-sale during the second quarter of 2021, up from $57.8 million in the second quarter of 2020, reflecting a 36.5% increase[328]. - The net increase in the net present value of expected cash flows for the six months ended June 30, 2021 was $10.2 million, compared to only $0.2 million for the same period in 2020, indicating a substantial improvement[326]. Asset and Portfolio Management - As of June 30, 2021, the carrying value of residential RPLs was $897.5 million, down from $1,057.5 million as of December 31, 2020, representing a decrease of approximately 15.1%[268]. - The total mortgage-related assets increased to $1,518.5 million as of June 30, 2021, compared to $1,493.1 million as of December 31, 2020, reflecting a growth of about 1.7%[268]. - The company anticipates that its residential mortgage loan portfolio may grow at an uneven pace due to irregular acquisition opportunities[278]. - The company is focusing on acquiring pools of residential RPLs, while also considering NPLs if attractive opportunities arise[274]. - The company purchased $4.8 million in RPLs, with UPB of $5.2 million at 60.7% of property value, resulting in a total of $955.6 million in net mortgage loans[320]. Market Conditions and Economic Outlook - The company expects continued volatility in the residential mortgage securities market and increased acquisition opportunities due to extended forbearance and foreclosure timelines[272]. - The company believes that demand for single-family and smaller multi-family rental properties will increase in the near term due to regulatory constraints on traditional mortgage lending[273]. - Current market conditions present attractive investment opportunities despite the uncertain environment for mortgage-related assets[290]. - The pandemic has created challenges in predicting the impact on various business factors, complicating the assessment of future performance[291]. - The company expects the COVID-19 pandemic to adversely impact future operating cash flows due to borrower payment delays and potential declines in home prices[360]. Cash Flow and Liquidity - As of June 30, 2021, the company held $88.1 million in cash and cash equivalents, with an average daily cash balance of $113.0 million for the quarter[320]. - The company’s operating cash outflows for the six months ended June 30, 2021, were $22.9 million, compared to $10.2 million for the same period in 2020, indicating a 124.5% increase in cash outflows[362]. - The average daily cash balance during the quarter was $113.0 million, a decrease of $15.7 million from $128.7 million in the previous quarter[361]. - The company experienced net financing cash outflows of $7.0 million for the six months ended June 30, 2021, primarily due to pay downs of existing debt obligations totaling $312.5 million[367]. Debt and Financing - The company has two repurchase facilities with ceilings of $250.0 million and $400.0 million, allowing for the acquisition of mortgage loan pools[381]. - The total maximum borrowing capacity across various loans is $987,545 million[384]. - The total amount outstanding is $394,386 million, representing approximately 40% of the maximum borrowing capacity[384]. - The company completed a public offering of $87.5 million in convertible senior notes due 2024, with a 7.25% annual interest rate[379]. - The company’s secured borrowings are non-recourse, with principal and interest paid only from cash flows from mortgage loans[402]. Risk Management - The company’s market risk includes real estate risk, interest rate risk, prepayment risk, and credit risk, which are actively managed[407]. - Credit risk is a significant concern, with property values subject to volatility from various economic factors, including public health crises[412]. - Borrowers may fail to pay due to personal income reductions, job loss, or poor property management, which the company aims to mitigate through servicer efforts[413]. - The company’s assets and liabilities are sensitive to interest rates, and inflation could decrease disposable household income, increasing credit risk[416]. Corporate Governance and Compliance - The company conducted an evaluation of its disclosure controls and procedures, concluding they were effective as of the end of the reporting period[418]. - There have been no material changes in the company's internal control over financial reporting during the last fiscal quarter[419]. - The company is not involved in any material pending legal or regulatory proceedings[421]. - The company has not reported any defaults upon senior securities[422].

Great Ajax Corp. (NYSE:AJX) Q1 2021 Earnings Conference Call May 6, 2021 5:00 PM ET Company Participants Lawrence Mendelsohn - Chief Executive Officer Conference Call Participants Kevin Barker - Piper Sandler Eric Hagen - BTIG Operator Good day, and thank you for standing by, and welcome to the Great Ajax Corp. Q1 2021 Earnings Call. At this time all participants are in a listen-only mode. After the speaker's remarks, there will be a question-and-answer session. [Operator Instructions] Please be advised tha ...

Financial Performance - For the three months ended March 31, 2021, net income attributable to common stockholders was $7.0 million, or $0.30 per share, compared to $0.4 million, or $0.02 per share, for the same period in 2020[301]. - Total revenue for the quarter ended March 31, 2021 was $19.8 million, compared to $8.0 million for the same period in 2020, reflecting a significant increase[304]. - Total expenses rose to $8.2 million for the three months ended March 31, 2021, compared to $6.5 million in the same period of 2020, driven by increased management fees and put option amortization expenses[316]. - Consolidated net income attributable to common stockholders was $7.0 million for the quarter ended March 31, 2021, compared to $400,000 in the same period of 2020[304]. - Net interest income after recovery of losses increased to $19.2 million for the three months ended March 31, 2021, up from $9.1 million in the same period of 2020, primarily due to a $5.5 million acceleration of purchase discount on loans[305]. Asset and Liability Management - The total mortgage-related assets amounted to $1,490.3 million as of March 31, 2021, compared to $1,493.1 million at the end of 2020[248]. - The total assets as of March 31, 2021, were $1,804,775, an increase from $1,777,123 as of December 31, 2020[324]. - Total liabilities increased to $1,184,576 as of March 31, 2021, from $1,140,875 as of December 31, 2020[324]. - The company ended the period with $1.1 billion of net mortgage loans with an aggregate UPB of $1.2 billion as of March 31, 2021[330]. - The fair value of total equity increased to $620,199 as of March 31, 2021, from $636,248 as of December 31, 2020[324]. Investment Strategy - The company is focusing on acquiring pools of residential RPLs, with a strategy to also consider NPLs if attractive opportunities arise[257]. - The company anticipates that the ongoing pandemic may create increased opportunities to acquire NPLs[261]. - The company is actively monitoring opportunities to increase holdings of SBC loans and properties, particularly in urban areas[258]. - The company plans to acquire 4,739 residential RPLs with an aggregate UPB of $790.4 million at 97.5% of UPB and 54.0% of estimated market value of $1.4 billion[392]. - The company has co-invested to form Ajax Mortgage Loan Trust 2021-C, retaining $26.3 million of securities with a coupon of 2.115%[394]. Market Conditions and Risks - The company expects continued volatility in the residential mortgage securities market, which may lead to increased acquisition opportunities[253]. - The company believes that demand for single-family and smaller multi-family rental properties will increase in the near term due to regulatory pressures and market conditions[256]. - The COVID-19 pandemic has created uncertainty in various factors affecting the company's business, making it difficult to predict future impacts[274]. - The company is subject to various market risks, including real estate risk, interest rate risk, prepayment risk, and credit risk[396]. Cash Flow and Financing - The company collected total cash of $70.2 million from loan payments, sales of REO, and investments in debt securities and beneficial interests[301]. - The average daily cash balance for the quarter was $115.2 million, with $137.6 million in cash and cash equivalents at March 31, 2021[301]. - The company had net financing cash inflows of $16.9 million for the three months ended March 31, 2021, primarily driven by additional borrowing of $391.0 million through secured debt[353]. - The company expects that its primary financing sources will continue to include secured borrowings, repurchase agreements, and securities offerings[347]. - The company’s secured borrowings are non-recourse, with principal and interest paid only from cash flows from mortgage loans[390]. Loan Performance and Delinquency - The current delinquency rate for loans held-for-investment was 58.8%, up from 56.1% in the previous quarter[338]. - The percentage of loans 90+ days delinquent increased to 26.5% from 23.5%[338]. - Approximately 73.1% of the portfolio based on UPB made at least 12 out of the last 12 payments as of March 31, 2021[301]. - The weighted average loan-to-value (LTV) ratio improved to 70.9% from 72.8%[335]. - The number of REO properties held-for-sale decreased to 26 from 32, indicating a reduction in foreclosed assets[335]. Shareholder Returns and Equity - A dividend of $0.19 per share was declared on May 6, 2021, representing approximately 4.70% on an annualized basis of the book value of $16.18 per share at March 31, 2021[379][380]. - The book value per common share increased to $16.18 at March 31, 2021, up from $15.59 at December 31, 2020[301]. - The company has not engaged in off-balance sheet arrangements or guaranteed any obligations of unconsolidated entities, minimizing exposure to market, credit, liquidity, or financing risk[381]. Regulatory and Compliance - To qualify as a REIT, the company must distribute at least 90% of its taxable income to stockholders, limiting its ability to retain earnings for capital replenishment[263]. - There have been no changes in internal control over financial reporting that materially affected the company during the last fiscal quarter[407]. - The company and its subsidiaries are not involved in any material pending legal or regulatory proceedings[409].