Great Ajax(US:AJX)2024-05-03 20:21Financial Performance - Consolidated net loss attributable to common stockholders for the three months ended March 31, 2024, was $74,319 thousand, compared to a loss of $7,941 thousand for the same period in 2023, indicating a significant increase in losses [14]. - Comprehensive loss for the three months ended March 31, 2024, was $73,150 thousand, compared to a loss of $2,055 thousand for the same period in 2023, indicating a substantial increase in comprehensive losses [17]. - The company reported a loss before provision for income taxes of $73,077 thousand for the three months ended March 31, 2024, compared to a loss of $7,271 thousand in the same period last year [14]. - Consolidated net loss for the three months ended March 31, 2024, was $73,992,000, compared to a net loss of $7,364,000 for the same period in 2023, representing a significant increase in losses [20]. Asset and Liability Changes - Total assets decreased to $1,244,455 thousand as of March 31, 2024, down from $1,336,291 thousand on December 31, 2023, representing a decline of approximately 6.9% [9]. - Total liabilities decreased to $988,219 thousand as of March 31, 2024, down from $1,025,396 thousand on December 31, 2023, a reduction of about 3.6% [9]. - Cash and cash equivalents increased to $100,054 thousand as of March 31, 2024, up from $52,834 thousand on December 31, 2023, representing an increase of approximately 89.5% [9]. - The total carrying value of mortgage loans held-for-sale as of March 31, 2024, is approximately $368.3 million, compared to $55.7 million as of December 31, 2023 [126]. Investment and Financing Activities - The company reported a mark to market loss on mortgage loans held-for-sale of $47,307 thousand for the three months ended March 31, 2024, with no comparable loss reported in the previous year [14]. - The company reported cash paid for interest of $13,636,000 for the three months ended March 31, 2024, compared to $14,894,000 in the same period of 2023 [22]. - The Company entered into a $70 million term loan with NIC RMBS on February 26, 2024, which includes the issuance of warrants [193]. - The Company issued $110.0 million aggregate principal amount of 8.875% senior unsecured notes due September 2027, with net proceeds totaling approximately $106.1 million after deductions [81]. Shareholder Equity and Dividends - As of March 31, 2024, the Company reported total stockholders' equity of $256.236 million, with retained earnings showing a deficit of $132.400 million [27]. - The Company declared dividends of $0.10 per share, resulting in total distributions of $3.699 million [27]. - The company paid $3,699,000 in dividends on common and preferred stock during the three months ended March 31, 2024, down from $6,425,000 in the prior year [22]. Credit Quality and Loan Performance - The company recorded a net (increase)/decrease in the net present value of expected credit losses of $(4,230) thousand for the three months ended March 31, 2024, compared to an increase of $621 thousand in the prior year [14]. - The Company monitors the credit quality of its mortgage loans by considering loan payment activity or delinquency status [46]. - The Company has observed that borrowers making at least seven consecutive payments are significantly less likely to default, which drives lower loss severity [133]. - The allowance for expected credit losses decreased to $0.4 million by the end of Q1 2024, down from $4.3 million at the end of Q1 2023 [137]. Real Estate and Property Holdings - As of March 31, 2024, the Company's net investments in real estate owned properties increased to $5.2 million from $3.8 million as of December 31, 2023, with a total of 24 properties held-for-sale [143]. - The Company recorded net transfers of $2.0 million from mortgage loans to properties held-for-sale during the three months ended March 31, 2024, compared to a transfer of $(0.2) million in the same period of 2023 [144]. - The Company sold two REO properties during the three months ended March 31, 2024, realizing net gains of approximately $8 thousand, down from five properties and $0.1 million in gains in the same period of 2023 [145]. Securities and Investments - The Company holds debt securities available-for-sale (AFS) at a fair value of $125.1 million as of March 31, 2024, with gross unrealized losses of $8.8 million [161]. - The Company recorded amortization of unrealized losses of $0.8 million for the three months ended March 31, 2024, compared to $2.0 million for the same period in 2023 [150]. - The Company’s investments in beneficial interests were valued at $88.6 million as of March 31, 2024, down from $104.2 million as of December 31, 2023 [165]. - The allowance for expected credit losses for beneficial interests increased to $9.1 million as of March 31, 2024, from a beginning balance of $(6.9) million, indicating a significant change in credit quality assessment [171]. Management and Operational Structure - The Management Agreement with the Manager is set to expire on March 5, 2034, and includes provisions for management fees based on equity managed [82]. - The Company has a focus on acquiring re-performing loans (RPLs) and non-performing loans (NPLs), targeting residential mortgage loans [30]. - The Company operates in a single segment focused on re-performing mortgages, with a lesser focus on non-performing mortgages and real property [125].