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Great Ajax(AJX) - 2020 Q4 - Earnings Call Transcript
2021-03-05 03:41
Financial Data and Key Metrics Changes - The overall corporate cost of funds decreased by approximately 27 basis points in Q4 2020, continuing a trend from previous quarters [4][13] - Net income attributable to common stockholders was $10.8 million, or $0.47 per share, after accounting for preferred dividends and non-controlling interests [14] - Book value per share was $15.59 as of December 31, 2020, while fair value estimates were materially higher, at approximately $19.54 per share [15][30] Business Line Data and Key Metrics Changes - Net interest income from loans and securities was approximately $21.9 million, including a partial reversal of COVID-19 related loan and credit losses [8] - The loan portfolio saw a significant increase in cash flow velocity, leading to a reversal of previous credit loss provisions [4][11] - Approximately 72% of the loan portfolio made at least 12 of the last 12 payments, compared to only 13% at the time of purchase [10][22] Market Data and Key Metrics Changes - California remains the largest segment of the loan portfolio, with consistent payment and performance patterns observed [18][19] - The company has seen increased demand for homes in target markets, particularly in Florida, Phoenix, Dallas, and Atlanta [22] - The Las Vegas market was removed from target markets due to anticipated negative impacts from COVID-19, although a recovery is expected [20][21] Company Strategy and Development Direction - The company continues to focus on acquiring re-performing loans (RPLs), which represent approximately 96% of the loan portfolio [17] - The strategy includes leveraging analytics and an affiliated servicer to maximize loan performance and resolution timelines [6][7] - The company is well-equipped for volatility and is actively pursuing investment opportunities in its pipeline [4] Management's Comments on Operating Environment and Future Outlook - Management noted that the impact of COVID-19 on payment performance has been less than expected, with strong regular payment patterns continuing [11][23] - The company anticipates that the cost of funds will continue to decrease, enhancing profitability [13][27] - Management expressed optimism about the potential for increased prepayments and cash flow velocity in the current environment [35] Other Important Information - The company had approximately $107 million in cash at year-end 2020, increasing to approximately $145 million by March 1, 2021 [16][29] - The company declared a cash dividend of $0.17 per share, expected to increase during 2021 based on taxable income estimates [25] Q&A Session Summary Question: On the RPL purchases since quarter end, are those seasoned loans or newer issues? - Management indicated that about 20% of the loans are scratch and dent from new origination, while the balance consists of seasoned loans [36] Question: What is the expected prepayment rate for re-performing borrowers? - The weighted average coupon for the portfolio is in the mid-fours, with a low weighted average LTV, and borrowers with significant equity are prepaying primarily for sale [34][35] Question: What is the amount of securitized debt callable this year? - Management stated there are about three additional securitizations and four joint venture securitizations callable this year, which could reduce the cost of funds by 120 to 200 basis points [33] Question: What is the current cash number and its implications? - The cash number was $107 million at year-end and $145 million as of March 1, 2021, with prepayments and securitizations contributing to the increase [37][38] Question: How does the recent rise in interest rates affect the company's strategy? - Management believes that loan prices have not yet reacted to the rise in interest rates, but they anticipate significant opportunities as a result [41]
Great Ajax(AJX) - 2020 Q4 - Annual Report
2021-03-04 16:00
Management and Ownership - The company has a 19.8% ownership in its Manager, which implements its business strategy and manages day-to-day operations[61] - The company has a 19.8% equity interest in its Manager and an 8.0% interest in the parent of its Servicer, structured through wholly owned subsidiaries[82] Fees and Compensation - The base management fee is set at 1.5% of stockholders' equity per annum, calculated quarterly[63] - The company pays an incentive fee of 20% on dividends exceeding 8% of book value, contingent on cumulative core earnings being positive[65] - The company is required to pay a termination fee equal to twice the combined base and incentive fees if the Management Agreement is terminated without cause[68] - The Servicer receives an annual servicing fee ranging from 0.65% to 1.25% of UPB, with specific reductions for certain joint ventures[72] Financing and Capital - The company may utilize various types of borrowings, including bank credit facilities and structured financing arrangements, depending on market conditions[56] - The company finances asset acquisitions with non-recourse securitizations and repurchase agreements, with borrowing bases ranging from 70% to 85% of market value[54] - The company may seek additional capital through public or private offerings, but there is no assurance of success in these efforts[56] - The company expects to continue securitizing whole loan portfolios as a financing tool, creating long-term, fixed-rate, non-recourse financing with moderate leverage[475] Risk Management - The company does not currently hedge risks associated with mortgage loans but may use derivative instruments for risk management in the future[58] - The company is exposed to real estate risk, including volatility in residential property values due to economic conditions and interest rate changes[474] - Credit risk is present due to potential borrower defaults, influenced by factors such as job loss and economic conditions, which may affect property values[478] - Prepayment risk is influenced by various factors, including interest rates and borrower behavior, with expectations of a slowdown in loan prepayments due to the pandemic[477] Servicing and Operations - The Servicer is licensed to service loans in all required states and is an approved servicer for FHA and VA[75] - The Servicer collects mortgage loan payments and is entitled to servicing fees based on specified percentages of the outstanding unpaid principal balance[76] - The company has implemented a multifaceted resolution approach for managing non-performing loans (NPLs) and real estate owned (REO) assets[76] - The company may engage in REO liquidation and short sale processes to generate cash for reinvestment if properties do not meet investment criteria[76] Compliance and Internal Controls - The company monitors compliance with the Investment Company Act to avoid registration as an investment company, ensuring less than 40% of total assets consist of investment securities[84] - The company conducted an evaluation of its disclosure controls and procedures, concluding they were effective as of the end of the reporting period[484] - Management assessed the effectiveness of internal control over financial reporting as of December 31, 2020, finding it effective based on established criteria[489] - The independent auditor, Moss Adams LLP, expressed an unqualified opinion on the company's internal control over financial reporting and consolidated financial statements[490] Market Conditions and Competition - The company competes with larger mortgage and hybrid REITs, hedge funds, and other financial institutions, which may have greater access to capital[79] - The company relies on its Manager's professionals for competitive advantages in assessing risks and pricing potential assets[81] - A rising interest rate environment could positively impact operations related to rental real property, potentially increasing rent levels and property values[476] - The company expects many borrowers to refinance loans at or near the estimated value of the underlying property, potentially generating attractive returns[76]
Great Ajax(AJX) - 2020 Q3 - Earnings Call Transcript
2020-11-08 14:13
Great Ajax Corp. (NYSE:AJX) Q3 2020 Earnings Conference Call November 5, 2020 5:00 PM ET Company Participants Lawrence Mendelsohn - Chief Executive Officer Conference Call Participants Mike Smyth - B. Riley Securities Kevin Barker - Piper Sandler Operator Ladies and gentlemen, thank you for standing by and welcome to the Great Ajax Corp. Q3 2020 Earnings Conference Call. All lines are currently in a listen-only mode. After the speaker’s remarks, there will be a question-and-answer session. [Operator Instruc ...
Great Ajax(AJX) - 2020 Q3 - Quarterly Report
2020-11-05 22:49
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbols Name of each exchange on which registered Common stock, par value $0.01 per share AJX New York Stock Exchange 7.25% Convertible Senior Notes due 2024 AJXA New York Stock Exchange FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ ...
Great Ajax(AJX) - 2020 Q2 - Earnings Call Transcript
2020-08-08 17:13
Great Ajax Corp. (NYSE:AJX) Q2 2020 Results Earnings Conference Call August 4, 2020 5:00 PM ET Company Participants Lawrence Mendelsohn - Chief Executive Officer Conference Call Participants Tim Hayes - B. Riley Stephen Laws - Raymond James Kevin Barker - Piper Sandler Operator Ladies and gentlemen, thank you for standing by, and welcome to the Great Ajax Corporation Q2 2020 Earnings Call. [Operator instructions] I would now like to hand the conference over to your speaker today, Mr. Lawrence Mendelsohn, CE ...
Great Ajax(AJX) - 2020 Q2 - Quarterly Report
2020-08-04 21:59
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 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. (Exact name of registrant as specified in its charter) Maryland 47-1271842 State or other jurisdiction o ...
Great Ajax(AJX) - 2020 Q1 - Quarterly Report
2020-05-05 22:51
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 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. Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer (Do not check if a smaller reportin ...
Great Ajax(AJX) - 2019 Q4 - Earnings Call Transcript
2020-03-04 03:41
Great Ajax Corp. (NYSE:AJX) Q4 2019 Results Conference Call March 3, 2020 5:00 PM ET Company Participants Lawrence Mendelsohn - CEO Conference Call Participants Tim Hayes - B Riley FBR Stephen Laws - Raymond James Operator Good day, and welcome to the Great Ajax Fourth Quarter 2019 and Year End Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Lawrence Mendelsoh ...
Great Ajax(AJX) - 2019 Q4 - Annual Report
2020-03-03 22:55
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Title of each class Trading Symbols Name of each exchange on which registered Common stock, par value $0.01 per share AJX New York Stock Exchange 7.25% Convertible Senior Notes due 2024 AJXA New York Stock Exchange 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 fis ...
Great Ajax(AJX) - 2019 Q3 - Earnings Call Transcript
2019-11-10 15:42
Great Ajax Corp. (NYSE:AJX) Q3 2019 Earnings Conference Call November 5, 2019 5:00 PM ET Company Participants Lawrence Mendelsohn - Chief Executive Officer Conference Call Participants Timothy Hayes - B. Riley FBR Kevin Barker - Piper Jaffray Scott Valentin - Compass Point Stephen Laws - Raymond James Operator Good day, and welcome to the Great Ajax Third Quarter 2019 Financial Results Conference Call and Webcast. All participants will be in a listen-only mode. [Operator Instructions] Please note that this ...