Great Ajax(US:AJX)2025-05-02 20:28Financial Transactions - Rithm Property Trust completed a strategic transaction on June 11, 2024, selling $14.0 million of common stock to Rithm at $4.87 per share, and terminated the existing management contract with the Former Manager for approximately 3.2 million shares and $0.6 million in cash[148]. - During the quarter ended March 31, 2025, the company issued 2,084,232 shares of 9.875% Series C Preferred Stock, generating total net proceeds of $50.8 million after expenses[198]. Portfolio and Asset Management - As of March 31, 2025, the carrying value of the portfolio was $921.9 million, with mortgage loans held-for-investment at $387.0 million and CMBS at fair value of $275.5 million[154]. - The average mortgage loan portfolio decreased to $417.193 million from $898.343 million, a reduction of $481.150 million year-over-year[184]. - The total unpaid principal balance (UPB) of the loan portfolio as of March 31, 2025, was $443,743,000, a decrease from $454,893,000 as of December 31, 2024, reflecting a decline of about 2.4%[191]. - The number of loans in the portfolio decreased from 2,625 as of December 31, 2024, to 2,575 as of March 31, 2025, indicating a reduction of approximately 1.9%[191]. - The market value of collateral for the loan portfolio as of March 31, 2025, was $1,150,581,000, down from $1,160,673,000 as of December 31, 2024[195]. Financial Performance - Net interest income for the three months ended March 31, 2025, was $3.814 million, an increase of $2.182 million from $1.632 million in the same period of 2024[177]. - Interest income decreased to $13.200 million from $15.738 million year-over-year, a decline of $2.538 million[181]. - Interest expense decreased significantly to $9.386 million from $14.106 million, resulting in a year-over-year improvement of $4.720 million[177]. - Total revenue for the three months ended March 31, 2025, was $249 thousand, compared to a loss of $49.381 million in the same period of 2024, reflecting a positive variance of $49.630 million[177]. - The company experienced a net loss attributable to common stockholders of $3.744 million for the three months ended March 31, 2025, a significant improvement from a loss of $74.319 million in the same period of 2024[177]. Expenses and Liabilities - Total expenses decreased by $19.9 million to $3.776 million for the three months ended March 31, 2025, primarily due to a reduction in management fees[187]. - The company recorded no allowance for credit losses in the three months ended March 31, 2025, compared to an allowance of $4.230 million in the same period of 2024[179]. - Total liabilities decreased to $187.7 million from $414.8 million, while total equity increased to $111.2 million[216]. Economic Indicators - The U.S. economy contracted by an annualized 0.3% in Q1 2025, with the unemployment rate slightly increasing to 4.2%[155]. - The 12-month increase in the Consumer Price Index (CPI) was 2.4% in March 2025, down from 2.9% in December 2024, indicating progress towards lower inflation[156]. - The nominal 10-year Treasury yield fell to 4.23% at the end of March 2025 from 4.58% in December 2024, reflecting lower real yields from TIPS[158]. - Average payroll growth was 152,000 jobs per month in Q1 2025, compared to 168,000 jobs per month in 2024, with year-over-year growth in average hourly earnings at 3.8%[159]. - Total home sales averaged 4.81 million units in Q1 2025, only slightly lower than the previous quarter, with median resale price growth at 2.7%[160]. Market Conditions - The commercial real estate market is experiencing a turnaround, supported by improved liquidity and sentiment, although uncertainty remains due to trade tensions[162]. - The company does not expect to acquire significant new commercial mortgage assets in the near future due to financial challenges and limited financing sources[165]. - The company is subject to various market risks, including interest rate risk, credit risk, and real estate risk, which may impact financial performance[219]. Cash and Liquidity - The total cash and cash equivalents at March 31, 2025, were reported at $97.4 million[196]. - Cash and cash equivalents at the end of the period were $97.4 million, a decrease of $2.6 million compared to the previous year[208]. - Net cash used in operating activities decreased by $6.6 million year-over-year, primarily due to lower interest and other expenses[209]. - Net cash from investing activities decreased by $108.7 million, mainly due to increased purchases of investments in CMBS and equity method investments[210]. - Net cash from financing activities increased by $88.1 million, primarily due to the issuance of Series C Preferred Stock[211]. - The company expects to meet long-term liquidity requirements through cash on hand and potential additional borrowings[207]. - The company is required to maintain a minimum liquidity of $30.0 million and tangible net worth of $240.0 million, with a maximum leverage ratio of 4.0 to 1.0[202].