Great Ajax(US:AJX)2021-05-06 16:00Financial 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].