Second Quarter Highlights
- Interest income of $18.3 million; net interest income of $3.3
million
- Net loss attributable to common stockholders of $(12.0)
million
- Operating loss of $(2.5) million
- Earnings per share ("EPS") per basic common share was a loss of
$(0.51)
- Operating loss per basic common share of $(0.11)
- Taxable loss of $(0.02) per share attributable to common
stockholders after payment of dividends on our preferred stock
- Book value per common share of $11.86 at June 30, 2023
- Collected total cash of $49.5 million from loan payments, sales
of real estate owned ("REO") properties and collections from
investments in debt securities and beneficial interests
- Held $40.3 million of cash and cash equivalents at June 30,
2023; average daily cash balance for the quarter was $43.6
million
- As of June 30, 2023, approximately 82.1% of our portfolio
(based on UPB at the time of acquisition) made at least 12 out of
the last 12 payments
- On June 30, 2023, we entered into a Merger Agreement (as
defined below) with Ellington Financial Inc. (NYSE: EFC) (“EFC”),
pursuant to which, subject to the terms and conditions therein, we
will be merged with and into a subsidiary of EFC
Great Ajax Corp. (NYSE: AJX), a Maryland corporation that is a
real estate investment trust ("REIT"), announces its results of
operations for the quarter ended June 30, 2023. We focus primarily
on acquiring, investing in and managing a portfolio of
re-performing mortgage loans ("RPLs") and non-performing loans
("NPLs") secured by single-family residences and commercial
properties. In addition to our continued focus on RPLs and NPLs, we
also originate and acquire small-balance commercial loans ("SBC
loans") secured by multi-family retail/residential and mixed use
properties.
Selected Financial Results
(Unaudited)
($ in thousands except per share
amounts)
For the three months
ended
June 30, 2023
March 31, 2023
December 31, 2022
September 30, 2022
June 30, 2022
Loan interest income(1)
$
12,929
$
13,281
$
13,520
$
14,864
$
15,402
Earnings from debt securities and
beneficial interests(2)
$
4,480
$
4,569
$
4,562
$
4,613
$
5,303
Other interest income
$
931
$
606
$
367
$
544
$
195
Interest expense
$
(15,039
)
$
(14,925
)
$
(14,482
)
$
(11,369
)
$
(9,175
)
Net interest income
$
3,301
$
3,531
$
3,967
$
8,652
$
11,725
Net decrease in the net present value of
expected credit losses
$
2,866
$
621
$
1,152
$
1,935
$
961
Other income/(loss), loss from equity
method investments and loss on joint venture refinancing on
beneficial interests
$
(8,581
)
$
(3,612
)
$
(3,744
)
$
(65
)
$
(3,918
)
Total (loss)/revenue, net(1,3)
$
(2,414
)
$
540
$
1,375
$
10,522
$
8,768
Consolidated net loss(1)
$
(11,462
)
$
(7,364
)
$
(6,283
)
$
(9,503
)
$
(4,781
)
Net loss per basic share
$
(0.51
)
$
(0.34
)
$
(0.30
)
$
(0.71
)
$
(0.40
)
Average equity(1,4)
$
324,089
$
337,206
$
343,112
$
399,610
$
466,847
Average total assets(1)
$
1,424,524
$
1,463,529
$
1,509,738
$
1,559,584
$
1,645,915
Average daily cash balance
$
43,609
$
50,916
$
47,196
$
62,334
$
60,609
Average carrying value of RPLs(1)
$
886,072
$
882,018
$
883,254
$
897,947
$
909,382
Average carrying value of NPLs(1)
$
68,459
$
86,494
$
99,160
$
100,827
$
114,775
Average carrying value of SBC loans
$
10,876
$
12,159
$
14,275
$
15,546
$
16,704
Average carrying value of debt securities
and beneficial interests
$
382,502
$
401,240
$
427,471
$
435,849
$
487,484
Average asset backed debt balance(1)
$
870,595
$
897,279
$
933,695
$
987,394
$
1,046,985
____________________________________________________________
(1)
Reflects the impact of consolidating the
assets, liabilities and non-controlling interests of Ajax Mortgage
Loan Trust 2017-D, which is 50% owned by third-party institutional
investors.
(2)
Interest income on investment in debt
securities and beneficial interests issued by our joint ventures is
net of servicing fees.
(3)
Total revenue includes net interest
income, loss from equity method investments, loss on joint venture
refinancing on beneficial interests and other income.
(4)
Average equity includes the effect of an
aggregate of $34.6 million of preferred stock for the three months
ended June 30, 2023, March 31, 2023, December 31, 2022 and
September 30, 2022, and $93.0 million for the three months ended
June 30, 2022.
For the quarter ended June 30, 2023, we had a GAAP consolidated
net loss attributable to common stockholders of $(12.0) million or
$(0.51) per common share after preferred dividends. Operating loss,
a non-GAAP financial measure which adjusts GAAP earnings by
removing gains and losses as well as certain other non-core income
and expenses and preferred dividends, was $(2.5) million or $(0.11)
per common share. We consider Operating loss/income to provide a
useful measure for comparing the results of our ongoing operations
over multiple quarters. For a reconciliation of Operating
loss/income to consolidated net loss available to common
stockholders, please refer to Appendix B.
Our net interest income for the quarter ended June 30, 2023,
excluding any adjustment for expected credit losses was $3.3
million, a decrease of $0.2 million over the prior quarter. Gross
interest income decreased $0.1 million as a result of slightly
lower yields and lower average balance on our mortgage and
beneficial interests portfolio. Our interest expense for the
quarter ended June 30, 2023 increased $0.1 million compared to the
prior quarter primarily as a result of rate increases on our
floating rate repurchase financing. Interest earning assets
declined $24.1 million during the quarter ended June 30, 2023.
We generally acquire loans at a discount and record an allowance
for expected credit losses at acquisition. We update the allowance
quarterly based on actual cash flow results and changing cash flow
expectations in accordance with the current expected credit losses
accounting standard, otherwise known as CECL. During the quarter
ended June 30, 2023, we recorded income of $2.9 million due to the
decrease in the net present value of expected future credit losses
partially driven by prepayments compared to $0.6 million of income
recorded for the first quarter of fiscal year 2023.
We recorded an $8.8 million non-cash impairment on our
Investments in beneficial interests due to the joint venture
refinancing of eight Ajax Mortgage Loan Trusts joint ventures that
were redeemed or partially paid down when the underlying loans were
re-securitized to form Ajax Mortgage Loan Trust 2023-B ("2023-B")
and Ajax Mortgage Loan Trust 2023-C ("2023-C") in July 2023 (See
Subsequent events, below). Although we continue to own
approximately the same interest in the underlying mortgage loans
and related cash flows, we account for our beneficial interests in
joint ventures as legal securities. Accordingly, we treat the
re-securitization event as the sale of loans from the old trust to
the new trust. Since loan prices have undergone significant
disruption from year end and, the decline in loan prices resulted
in the impairment of our Investments in beneficial interests being
re-securitized. The non-cash impairment is expected to be a timing
difference as our net investment in the underlying loan pools and
the underlying loan pool cash flow expectations remain unchanged.
By comparison, when we re-securitize our wholly-owned secured
borrowings, we do not recognize any gain or loss because the
transaction is treated as a refinancing through the redemption and
issuance of the notes and the beneficial interest is not recorded
on the consolidated balance sheet as a separate legal security.
We recorded a loss from our investments in affiliates of $0.3
million for the quarter ended June 30, 2023 compared to a loss of
$0.1 million for the quarter ended March 31, 2023 due to a pass
through of higher losses on our equity method investment of
Gaea.
Our GAAP expenses increased on a quarter over quarter basis by
$1.0 million primarily due to a $0.6 million increase in other
expense due to impairment on our REO, discussed further below.
Additionally our management fee expense increased by $0.2 million
due to an update in the calculation to include our unsecured debt
securities to the extent proceeds were used to repurchase our
preferred stock and related warrants, effective as of March 1,
2023.
We recorded $0.7 million in impairment on our REO held-for-sale
portfolio in other expense for the quarter ended June 30, 2023,
primarily due to an additional assessment needed for one of our New
York properties. We sold seven properties in the second quarter and
recorded a loss of $18 thousand in other income. Three properties
were added to REO held-for-sale through foreclosures.
For the quarter ended March 31, 2023, we transferred certain
securities from AFS to HTM in compliance with the European Union
risk retention requirement, which was a non-cash transaction and
recorded at fair value. On the date of transfer, accumulated other
comprehensive income ("AOCI") included unrealized losses of $10.9
million for these securities. This amount will be amortized out of
AOCI over the remaining life of the respective securities, and has
no net impact to interest income. For the quarter ended June 30,
2023, this amortization resulted in a recapture of book value of
$1.1 million through the recovery of AOCI compared to $2.0 million
for the quarter ended March 31, 2023.
We ended the quarter with a GAAP book value of $11.86 per common
share, compared to a book value per common share of $12.58 for the
quarter ended March 31, 2023. The decrease in book value is driven
primarily by our GAAP loss for the quarter and dividends paid,
partially offset by the recovery of a portion of the mark to market
loss in debt securities recorded on the balance sheet through AOCI,
and the $1.1 million amortization of the unrealized loss on debt
securities transferred to HTM.
Our taxable loss for the quarter ended June 30, 2023 was $(0.02)
per share of net income available to common stockholders, compared
to $0.05 per share of taxable net income available to common
stockholders for the quarter ended March 31, 2023. Additionally, we
recorded income tax expense of $0.2 million comprised primarily of
state and local income taxes.
We collected $49.5 million of cash during the second quarter as
a result of loan payments, loan payoffs, sales of REO, and cash
collections on our securities portfolio to end the quarter with
$40.3 million in cash and cash equivalents.
We purchased 68 RPLs with UPB of $16.3 million at 48.0% of
property value and 82.7% of UPB. These loans were acquired and
included on our consolidated balance sheet for a weighted average
of 56 days of the quarter.
On June 30, 2023, we entered into an Agreement and Plan of
Merger (the "Merger Agreement") with EFC and EF Acquisition I LLC,
a Maryland limited liability company and a direct, wholly-owned
subsidiary of EFC (“Merger Sub”). Pursuant to the Merger Agreement,
subject to the terms and conditions therein, we will be merged with
and into Merger Sub, with Merger Sub remaining as a wholly-owned
subsidiary of EFC (such surviving company, the “Surviving Company,”
and such transaction, the “Merger”). Under the terms of the Merger
Agreement, each share of our common stock outstanding immediately
prior to the effective time (the “Effective Time”) of the Merger
will be automatically converted into the right to receive from EFC
(i) a number of newly and validly issued, fully-paid and
nonassessable shares of common stock, $0.001 par value per share,
of EFC based on a fixed exchange ratio of 0.5308, subject to
adjustment as provided in the Merger Agreement, including for
certain dilutive or accretive share issuances by us or EFC prior to
the Effective Time and (ii) if applicable, that amount of cash
equal to an amount of cash that EFC has agreed, pursuant to the
Merger Agreement, to pay to holders of our common stock depending
upon certain potential repurchases of our securities prior to the
closing of the Merger, divided by the aggregate number of shares of
our common stock and restricted shares (which are any each share of
our common stock issued under the Great Ajax Corp. 2014 Director
Equity Plan and the Great Ajax Corp. 2016 Equity Incentive Plan and
is unvested and/or subject to a repurchase option or obligation,
risk of forfeiture or other lapse restriction) entitled to receive
such consideration. We expect the transaction to close prior to the
year-end.
The following table provides an overview of our portfolio at
June 30, 2023 ($ in thousands):
No. of loans
5,208
Weighted average coupon
4.43
%
Total UPB(1)
$
997,156
Weighted average LTV(5)
56
%
Interest-bearing balance
$
911,742
Weighted average remaining term
(months)
292
Deferred balance(2)
$
85,414
No. of first liens
5,161
Market value of collateral(3)
$
2,127,910
No. of second liens
47
Current purchase price/total UPB
81.6
%
No. of REO held-for-sale
28
Current purchase price/market value of
collateral
42.5
%
Market value of REO held-for-sale(6)
$
4,275
RPLs
89.0
%
Carrying value of debt securities and
beneficial interests in trusts
$
353,044
NPLs
10.2
%
Loans with 12 for 12 payments as an
approximate percentage of acquisition UPB(7)
82.1
%
SBC loans(4)
0.8
%
Loans with 24 for 24 payments as an
approximate percentage of acquisition UPB(8)
74.7
%
____________________________________________________________
(1)
Our loan portfolio consists of fixed rate
(60.4% of UPB), ARM (6.6% of UPB) and Hybrid ARM (33.0% of UPB)
mortgage loans.
(2)
Amounts that have been deferred in
connection with a loan modification on which interest does not
accrue. These amounts generally become payable at maturity.
(3)
As of the reporting date.
(4)
SBC loans includes both purchased and
originated loans.
(5)
UPB as of June 30, 2023 divided by market
value of collateral and weighted by the UPB of the loan.
(6)
Market value of other REO is the estimated
expected gross proceeds from the sale of the REO less estimated
costs to sell, including repayment of servicer advances.
(7)
Loans that have made at least 12 of the
last 12 payments, or for which the full dollar amount to cover at
least 12 payments has been made in the last 12 months.
(8)
Loans that have made at least 24 of the
last 24 payments, or for which the full dollar amount to cover at
least 24 payments has been made in the last 24 months.
Subsequent Events
Since quarter end, we have acquired one residential NPL in one
transaction from a single seller with aggregate UPB of $0.2 million
and coupon of 8.38%. The purchase price of the NPL was 94.0% of UPB
and 63.8% of the estimated market value of the underlying
collateral of $0.3 million.
We have agreed to acquire, subject to due diligence, one
residential RPL in one transaction with aggregate UPB of $0.2
million and coupon of 5.75%. The purchase price of the residential
RPL is 80.0% of UPB and 55.0% of the estimated market value of the
underlying collateral of $0.3 million.
On July 11, 2023, we sold an unrated Class A senior bond in one
of our joint ventures and recognized a loss of $0.4 million. A
cumulative $0.4 million of this loss was already reflected in our
book value calculation through AOCI at June 30, 2023. This
cumulative loss was reclassified to loss on sale of securities on
the sale date.
On July 24, 2023, we formed 2023-B and 2023-C, with an
accredited institutional investor, by refinancing eight joint
ventures and recorded an $8.8 million non-cash impairment on our
Investments in beneficial interests during the second quarter of
2023. 2023-B retained $20.7 million or 20.0% of varying classes of
securities and equity. 2023-B acquired 571 RPLs and NPLs with UPB
of $121.7 million and an aggregate property value of $252.2
million. The senior securities represent 75.0% of the UPB of the
underlying mortgage loans and carry a 4.25% coupon. In addition,
2023-C retained $36.1 million or 20.0% of varying classes of agency
rated securities and equity. 2023-C acquired 1,171 RPLs and NPLs
with UPB of $203.6 million and an aggregate property value of
$459.1 million. The AAA through A rated securities represent 72.4%
of the UPB of the underlying mortgage loans and carry a weighted
average coupon of 3.45%. Based on the structure of the
transactions, we do not consolidate 2023-B and 2023-C under U.S.
GAAP.
On August 3, 2023, our Board of Directors declared a cash
dividend of $0.20 per share to be paid on August 31, 2023 to
stockholders of record as of August 15, 2023.
Conference Call
Great Ajax Corp. will host a conference call at 5:00 p.m. EDT on
Thursday, August 3, 2023 to review our financial results for the
quarter. A live Webcast of the conference call will be accessible
from the Quarterly Reports section of our website
www.greatajax.com. An archive of the Webcast will be available for
90 days.
About Great Ajax Corp.
Great Ajax Corp. is a Maryland corporation that is a REIT, that
focuses primarily on acquiring, investing in and managing RPLs and
NPLs secured by single-family residences and commercial properties.
In addition to our continued focus on RPLs and NPLs, we also
originate and acquire SBC loans secured by multi-family
retail/residential and mixed use properties. We are externally
managed by Thetis Asset Management LLC, an affiliated entity. Our
mortgage loans and other real estate assets are serviced by Gregory
Funding LLC, an affiliated entity. We have elected to be taxed as a
REIT under the Internal Revenue Code.
Forward-Looking Statements
This press release contains certain forward-looking statements.
Words such as “believes,” “intends,” “expects,” “projects,”
“anticipates,” and “future” or similar expressions are intended to
identify forward-looking statements. These forward-looking
statements are subject to the inherent uncertainties in predicting
future results and conditions, many of which are beyond our
control, including, without limitation and the risk factors and
other matters set forth in our Annual Report on Form 10-K for the
period ended December 31, 2022 filed with the Securities and
Exchange Commission (the “SEC”) on March 3, 2023, when filed with
the SEC, our Quarterly Report on Form 10-Q for the period ended
June 30, 2023, and statements concerning our pending merger with
EFC, including our failure to close the pending merger or
developments on its expected terms. We undertake no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise, except
as may be required by law.
GREAT AJAX CORP. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Dollars in thousands except
per share amounts)
Three months ended
June 30, 2023
March 31, 2023
December 31, 2022
September 30, 2022
(unaudited)
(unaudited)
(unaudited)
(unaudited)
INCOME
Interest income
$
18,340
$
18,456
$
18,449
$
20,021
Interest expense
(15,039
)
(14,925
)
(14,482
)
(11,369
)
Net interest income
3,301
3,531
3,967
8,652
Net decrease in the net present value of
expected credit losses
2,866
621
1,152
1,935
Net interest income after the impact of
changes in the net present value of expected credit losses
6,167
4,152
5,119
10,587
Loss from equity method investments
(265
)
(98
)
(349
)
(451
)
Loss on joint venture refinancing on
beneficial interests
(8,814
)
(995
)
—
—
Other income/(loss)
498
(2,519
)
(3,395
)
386
Total (loss)/revenue, net
(2,414
)
540
1,375
10,522
EXPENSE
Related party expense - loan servicing
fees
1,827
1,860
1,911
1,952
Related party expense - management fee
2,001
1,828
1,722
1,948
Professional fees
989
934
621
667
Fair value adjustment on put option
liability
1,839
1,622
1,431
2,917
Other expense
2,211
1,614
1,741
1,358
Total expense
8,867
7,858
7,426
8,842
Acceleration of put option settlement
—
—
—
8,813
Gain on debt extinguishment
—
(47
)
—
—
Loss before provision for income taxes
(11,281
)
(7,271
)
(6,051
)
(7,133
)
Provision for income taxes
181
93
232
2,370
Consolidated net loss
(11,462
)
(7,364
)
(6,283
)
(9,503
)
Less: consolidated net income/(loss)
attributable to non-controlling interests
24
30
5
(42
)
Consolidated net loss attributable to the
Company
(11,486
)
(7,394
)
(6,288
)
(9,461
)
Less: dividends on preferred stock
548
547
547
1,053
Less: discount on retirement of preferred
stock
—
—
—
5,735
Consolidated net loss attributable to
common stockholders
(12,034
)
$
(7,941
)
$
(6,835
)
$
(16,249
)
Basic loss per common share
$
(0.51
)
$
(0.34
)
$
(0.30
)
$
(0.71
)
Diluted loss per common share
$
(0.51
)
$
(0.34
)
$
(0.30
)
$
(0.71
)
Weighted average shares – basic
23,250,725
22,920,943
22,778,652
22,538,891
Weighted average shares – diluted
23,565,351
22,920,943
22,778,652
22,833,465
GREAT AJAX CORP. AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(Dollars in thousands except
per share amounts)
June 30, 2023
December 31, 2022
ASSETS
(Unaudited)
Cash and cash equivalents
$
40,316
$
47,845
Mortgage loans held-for-investment,
net(1,2)
961,277
989,084
Real estate owned properties, net(3)
3,745
6,333
Investments in securities
available-for-sale(4)
142,104
257,062
Investments in securities
held-to-maturity(5)
71,706
—
Investments in beneficial interests(6)
127,474
134,552
Receivable from servicer
7,514
7,450
Investments in affiliates
30,028
30,185
Prepaid expenses and other assets
21,526
11,915
Total assets
$
1,405,690
$
1,484,426
LIABILITIES AND
EQUITY
Liabilities:
Secured borrowings, net(1,7)
$
438,402
$
467,205
Borrowings under repurchase
transactions
413,125
445,855
Convertible senior notes, net(7)
103,516
104,256
Notes payable, net(7)
106,414
106,046
Management fee payable
1,999
1,720
Put option liability
15,614
12,153
Accrued expenses and other liabilities
9,780
9,726
Total liabilities
1,088,850
1,146,961
Equity:
Preferred stock $0.01 par value,
25,000,000 shares authorized
Series A 7.25% Fixed-to-Floating Rate
Cumulative Redeemable, $25.00 liquidation preference per share,
424,949 shares issued and outstanding at both June 30, 2023 and
December 31, 2022
9,411
9,411
Series B 5.00% Fixed-to-Floating Rate
Cumulative Redeemable, $25.00 liquidation preference per share,
1,135,590 shares issued and outstanding at both June 30, 2023 and
December 31, 2022
25,143
25,143
Common stock $0.01 par value; 125,000,000
shares authorized, 23,627,677 shares issued and outstanding at June
30, 2023 and 23,130,956 shares issued and outstanding at December
31, 2022
247
241
Additional paid-in capital
326,279
322,439
Treasury stock
(9,557
)
(9,532
)
Retained (deficit)/earnings
(17,282
)
13,275
Accumulated other comprehensive loss
(19,530
)
(25,649
)
Equity attributable to stockholders
314,711
335,328
Non-controlling interests(8)
2,129
2,137
Total equity
316,840
337,465
Total liabilities and equity
$
1,405,690
$
1,484,426
____________________________________________________________
(1)
Mortgage loans held-for-investment, net
include $652.3 million and $675.8 million of loans at June 30, 2023
and December 31, 2022, respectively, transferred to securitization
trusts that are variable interest entities (“VIEs”); these loans
can only be used to settle obligations of the VIEs. Secured
borrowings consist of notes issued by VIEs that can only be settled
with the assets and cash flows of the VIEs. The creditors do not
have recourse to the primary beneficiary (Great Ajax Corp.).
Mortgage loans held-for-investment, net include $6.0 million and
$6.1 million of allowance for expected credit losses at June 30,
2023 and December 31, 2022, respectively.
(2)
As of both June 30, 2023 and December 31,
2022, balances for Mortgage loans held-for-investment, net include
$0.9 million from a 50.0% owned joint venture, which we consolidate
under U.S. GAAP.
(3)
Real estate owned properties, net, are
presented net of valuation allowances of $1.3 million and $0.7
million at June 30, 2023 and December 31, 2022, respectively.
(4)
Investments in securities AFS are
presented at fair value. As of June 30, 2023, Investments in
securities AFS include an amortized cost basis of $153.9 million
and a net unrealized loss of $11.8 million. As of December 31,
2022, Investments in securities AFS include an amortized cost basis
of $282.7 million and net unrealized loss of $25.6 million.
(5)
On January 1, 2023, we transferred certain
of our Investments in securities AFS to HTM due to European risk
retention regulations. As of June 30, 2023, Investments in
securities HTM includes an allowance for expected credit losses of
zero and remaining discount of $7.8 million related to the
unamortized unrealized loss in AOCI.
(6)
Investments in beneficial interests
includes allowance for expected credit losses of zero at both June
30, 2023 and December 31, 2022.
(7)
Secured borrowings, net are presented net
of deferred issuance costs of $3.8 million at June 30, 2023 and
$4.7 million at December 31, 2022. Convertible senior notes, net
are presented net of deferred issuance costs of zero and $0.3
million at June 30, 2023 and December 31, 2022, respectively. Notes
payable, net are presented net of deferred issuance costs and
discount of $3.6 million at June 30, 2023 and $4.0 million at
December 31, 2022.
(8)
As of June 30, 2023, non-controlling
interests includes $1.0 million from a 50.0% owned joint venture,
$1.0 million from a 53.1% owned subsidiary and $0.1 million from a
99.9% owned subsidiary which the Company consolidates. As of
December 31, 2022, non-controlling interests includes $1.0 million
from a 50.0% owned joint venture, $1.1 million from a 53.1% owned
subsidiary and $0.1 million from a 99.9% owned subsidiary which we
consolidate under U.S. GAAP.
Appendix A - Earnings per share
The following table sets forth the components
of basic and diluted EPS ($ in thousands, except per share):
Three months ended
June 30, 2023
March 31, 2023
December 31, 2022
September 30, 2022
Income
(Numerator)
Shares
(Denominator)
Per Share
Amount
Income
(Numerator)
Shares
(Denominator)
Per Share
Amount
Income
(Numerator)
Shares
(Denominator)
Per Share
Amount
Income
(Numerator)
Shares
(Denominator)
Per Share
Amount
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Basic EPS
Consolidated net loss attributable to
common stockholders
$
(12,034
)
23,250,725
$
(7,941
)
22,920,943
$
(6,835
)
22,778,652
$
(16,249
)
22,538,891
Allocation of loss to participating
restricted shares
161
—
111
—
97
—
210
—
Consolidated net loss attributable to
unrestricted common stockholders
$
(11,873
)
23,250,725
$
(0.51
)
$
(7,830
)
22,920,943
$
(0.34
)
$
(6,738
)
22,778,652
$
(0.30
)
$
(16,039
)
22,538,891
$
(0.71
)
Effect of dilutive
securities(1)
Restricted stock grants and director fee
shares(2)
(161
)
314,626
—
—
—
—
(210
)
294,574
Amortization of put option(3)
—
—
—
—
—
—
—
—
Diluted EPS
Consolidated net loss attributable to
common stockholders and dilutive securities
$
(12,034
)
23,565,351
$
(0.51
)
$
(7,830
)
22,920,943
$
(0.34
)
$
(6,738
)
22,778,652
$
(0.30
)
$
(16,249
)
22,833,465
$
(0.71
)
____________________________________________________________
(1)
Our outstanding warrants and the effect of
the interest expense and assumed conversion of shares from
convertible notes would have an anti-dilutive effect on diluted
earnings per share for all periods shown and have not been included
in the calculation.
(2)
The effect of restricted stock grants and
manager and director fee shares on our diluted EPS calculation for
the three months ended March 31, 2023 and December 31, 2022 would
have been anti-dilutive and have been removed from the
calculation.
(3)
The effect of the amortization of put
options on our diluted EPS calculation for the three months ended
June 30, 2023, March 31, 2023, December 31, 2022 and September 30,
2022 would have been anti-dilutive and have been removed from the
calculation.
Appendix B - Reconciliation of
Operating (loss)/income to Consolidated net loss available to
common stockholders
(Dollars in thousands except
per share amounts)
Three months ended
June 30, 2023
March 31, 2023
December 31, 2022
September 30, 2022
(unaudited)
(unaudited)
(unaudited)
(unaudited)
INCOME
Interest income
$
18,340
$
18,456
$
18,449
$
20,021
Interest expense
(15,039
)
(14,925
)
(14,482
)
(11,369
)
Net interest income
3,301
3,531
3,967
8,652
Other income
498
455
479
1,259
Total revenue, net
3,799
3,986
4,446
9,911
EXPENSE
Related party expense - loan servicing
fees
1,827
1,860
1,911
1,952
Related party expense - management
fees
2,001
1,828
1,722
1,948
Professional fees
989
934
621
667
Other expense
1,526
1,503
1,443
1,380
Total expense
6,343
6,125
5,697
5,947
Consolidated operating (loss)/income
$
(2,544
)
$
(2,139
)
$
(1,251
)
$
3,964
Basic operating (loss)/income per common
share
$
(0.11
)
$
(0.09
)
$
(0.05
)
$
0.17
Diluted operating (loss)/income per common
share
$
(0.11
)
$
(0.09
)
$
(0.05
)
$
0.17
Reconciliation to GAAP net loss
Consolidated operating (loss)/income
$
(2,544
)
$
(2,139
)
$
(1,251
)
$
3,964
Mark to market loss on joint venture
refinancing
(8,814
)
(995
)
—
—
Realized loss on sale of securities
—
(2,974
)
(3,836
)
(860
)
Net decrease in the net present value of
expected credit losses
2,866
621
1,152
1,935
Fair value adjustment on put option
liability
(1,839
)
(1,622
)
(1,431
)
(2,917
)
Acceleration of put option settlement
—
—
—
(8,813
)
Other adjustments
(950
)
(162
)
(685
)
(442
)
Loss before provision for income taxes
(11,281
)
(7,271
)
(6,051
)
(7,133
)
Provision for income taxes
181
93
232
2,370
Consolidated net (income)/loss
attributable to non-controlling interest
(24
)
(30
)
(5
)
42
Consolidated net loss attributable to the
Company
(11,486
)
(7,394
)
(6,288
)
(9,461
)
Dividends on preferred stock
(548
)
(547
)
(547
)
(1,053
)
Discount on retirement of preferred
stock
—
—
—
(5,735
)
Consolidated net loss attributable to
common stockholders
$
(12,034
)
$
(7,941
)
$
(6,835
)
$
(16,249
)
Basic loss per common share
$
(0.51
)
$
(0.34
)
$
(0.30
)
$
(0.71
)
Diluted loss per common share
$
(0.51
)
$
(0.34
)
$
(0.30
)
$
(0.71
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230803572158/en/
Lawrence Mendelsohn Chief Executive Officer Or Mary Doyle Chief
Financial Officer Mary.Doyle@aspencapital.com 503-444-4224
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