Q3 2023 Great Ajax Corp Earnings Call
Speaker 1: Please stand by, we're about to begin.
Please standby were about to begin.
Speaker 1: Good afternoon, ladies and gentlemen. Welcome to the great Ajax Corporation Q3 2023 financial results conference call. At this time, all participants are in a listen only mode and please be advised that this call is being recorded. Now at this time, I'll turn things over to your host, Mr. Larry Mendelsohn, Chief Executive Officer. Mr. Mendelsohn, please go ahead.
Good afternoon, ladies and gentlemen, and welcome to the Great Ajax Corp, Q3, 2023 financial results Conference call.
At this time all participants are in a listen only mode and please be advised that this call is being recorded now at this time I'll turn things over to your host Mr. Larry Mendelsohn, Chief Executive Officer. Mr. Mendelson. Please go ahead.
Speaker 2: Thank you, thank you everyone for joining us for the great Ajax third quarter call before we get started. I want to just point out case number 2 of the state Department of disclosure.
Thank you. Thank you everyone for joining us for the Great Ajax Corp, third quarter call before we get started I wanted to just point out page number two is the safe Harbor disclosure.
Speaker 2: Along with me on this call are Russell Schaub, our president, and Mary Doyle, our CFO .
Along with me on this call are Russell <unk>, our President Mary Doyle our CFO.
Speaker 2: As I'm sure you've seen, there are several corporate and strategic developments in Q3 2023 and into Q4 2023, which we will discuss a bit later in this call.
As I'm sure you have seen there are several corporate and strategic development in Q3, 2023 and into Q4 2023.
It's a bit later in this call.
Speaker 2: In Q3 2023, loan performance declined by a small amount, as did loan cash flow velocity, for reinstatements on delinquent loans and from sales of homes.
In Q3, 2023 loan performance declined by a small amount as did loan cash flow velocity for reinstatement cycling.
And from sales of homes display.
Speaker 2: The slight cash collection's decrease from home sales and reinstatement is primarily seasonality based.
The slight cash questions decrease for home sales in reinstatement is primarily seasonality based.
Speaker 2: repayments from borrowers refinancing their mortgages, continue to slower pace as you would expect given current mortgage.
Prepayments from borrowers refinancing their mortgages continued their slower pace as you would expect given the current mortgage rates.
Speaker 2: The small rise in delinquency is primarily the result of softening economic...
The small rise in delinquency is primarily the result of softening economic conditions.
Speaker 2: The regular payment performance of our mortgage loans and mortgage loans in our joint venture structures from non-performing loans can extend duration and decrease yield. As a result, the small decline in monthly performance actually can increase yield going forward.
The regular payment performance of our mortgage loans.
And mortgage loans in our joint venture structures from nonperforming loans can extend duration and decreased yields as a result, the small decline in monthly performance actually can increase yield going forward.
Speaker 2: September 30 we had approximately 64 million cash as well as significant amount of unincumbered securities. If we move to page three
At September 30, we had approximately $64 million of cash as well as significant amount of unencumbered securities.
If we move to page three.
The business overview.
Speaker 2: Our managers data science guides the loan characteristics and geographic market metrics for performance and property value change.
Our managers data science, guys the loan characteristics geographic market metrics for performance and property value change.
Speaker 2: The manager sources loans through long standing relationships. We've acquired loads of 383 different transactions since 2014, only two small transactions in the third quarter. We have a 19.8% equity.
The manager sources loans through longstanding relationships. We've acquired loans was 383 different transactions since 2014, only two small transactions in the third quarter.
We have a 19, 8% equity interest in our manager.
Speaker 2: We believe our affiliated servicer Gregory Funding provides a strategic advantage in special servicing and provides a data feedback loop for our managers analytics. We have certainly seen significant increases in loan performance and our servicers performance has enabled us to have triple A rated structures that permit up to approximately 40% of loans to be more than 60 days delinquent at the time of secure station.
We believe our affiliated servicer Gregory funding provides a strategic advantage in special servicing and provides a data feedback loop for our manager's analytics, we have certainly seen significant increases in loan performance and our services performance has enabled us to have AAA rated structures that permit up to approximately 40% of what it was.
Than 60 days delinquent at the time of the securitization.
Speaker 2: Like our 19.8% equity interest in our manager, we have a 21.6% economic interest in our servicer between shares and more.
Like our 19, 8% equity interest in our manager we have a 21, 6% economic interest in our servicer between shares and warrants.
Speaker 2: Our serviceers currently is rolling out some new data and technology driven programs through strategic joint ventures and MSR joint ventures. Its first MSR joint venture is expected to close in December .
Our services currently is rolling out some new data and technology driven programs through strategic joint ventures, and MSR Joint ventures. It's first MSR joint venture is expected to close in December.
Speaker 2: We own a 22% equity interest in Gaia Real Estate Corp. Gaia is an equity REIT that primarily invests in repositioning multi-family properties in specific markets and in triple net lease freestanding veterinary clinic properties in conjunction with large national owners of veterinary practice.
We own a 22% equity interest in Gaia real estate.
<unk> is an equity REIT that primarily invest in repositioning multifamily properties in specific markets and a triple net lease freestanding veterinary clinic properties in conjunction with large national owners of veterinary practices.
Speaker 2: Gaia internalized its manager effective September 1, 2023.
Got you internalize its manager effective September one 2023.
Speaker 2: We carry GAIA, our GAIA interest on balance sheet at a lower cost or market. We expect GAIA to raise additional equity. The current environment of bank credit tightening and CRE loan disruption creates opportunities and optionality for GAIA.
We carry Gaia are guy interest on balance sheet at the lower of cost or market. We expect to raise additional equity the current environment with bank credit tightening and CRE loan disruption creates opportunities and optionality for guidance.
Okay.
On page four.
Speaker 2: Then interesting come from loans and securities, excluding interesting come or expense from the application of CISOL, which is approximately $3.9 million in Q3.
Net interest income from loans and securities excluding interest income or expense from the application of seasonal was approximately $3 million in Q3.
Speaker 2: Our gross interest income, excluding the application of CECL, was $17.9 million versus $18.3 million in Q2. The principal reason gross interest income declined is that we had approximately $54 million lower average interest earning loans and securities on balance sheet in Q3 versus Q2.
Our gross interest income excluding the application of seasonal was $17 9 million versus $18 3 million in Q2. The principal reason gross interest income decline is that we had approximately $54 million lower average interest, earning loans and securities on balance sheet in Q3 versus Q2.
Speaker 2: We continue to have significantly more to link with loans and expect it to become performing. As the link that loans become performing loans, they provide more cash flow, but over a longer period. Since we buy loans at a discount, this increase in performance can extend expected duration which lowers yield.
We continue to have significantly more delinquent loans is expected to become performing.
As delinquent loans become performing loans, they provide more cash flow, but over a longer period since we buy loans at a discount this increased performance can extend expected duration, which lowered yield.
Speaker 2: However, in the case of a recession and a declining housing price environment, our low LTV loans provide a material yield and cash flow hedge as increased delinquency, shortened restoration, and corresponding yield increase material.
However, in the case of a recession and a declining housing price environment.
Our low LTV loans provided material yield and cash flow hedge as increase increased delinquency shortened duration and corresponding yield increased materially.
Speaker 2: For the first time in several years, we had a slight uptick in delinquency, which has a positive effect on forward yields if it continues.
For the first time in several years, we had a slight uptick in delinquency, which has a positive effect on forward yields if it continues.
Speaker 2: A gap item to keep in mind is that interest income from our portion of our joint ventures shows up in income from securities, not interest income from loans.
Our GAAP item to keep in mind is that interest income from our portion of our joint ventures shows up in income from securities not interest income from loans for these joint.
Speaker 2: For these joint venture interests, servicing fees for securities are paid out of the securities waterfall. So our interest income from joint venture securities is net of servicing fees, unlike interest income from loans, which is gross of servicing fees.
I'd venture interests servicing fees for securities are paid out of securities waterfall. So our interest income from joint venture Securities is net of servicing fees. Unlike interest income from loans, which is gross of servicing fees.
Speaker 2: As a result, since our joint venture investments have been growing faster than our direct loan investments, GAAP interest income will be lower than if we directly purchase loans outside of joint ventures by the amount of the servicing fees. In GAAP, servicing fees spent will decrease by the corresponding offsetting amount.
As a result, since our joint venture investments have been growing faster than our direct loan investments GAAP interest income will be lower than if we directly purchase loans outside of the joint ventures by the amount of the servicing fees and GAAP servicing fee expense will decrease by the corresponding offsetting amount.
Speaker 2: Important part of discussing interest income is the payment performance of our loan portfolio.
An important part of discussing interest income is the payment performance of our loan portfolio at <unk>.
Speaker 2: At September 30, 81.2% of our loan portfolios by UPB made at least 12 of the last 12 payments. First 82.3% at June 30.
September 30, 81, 2% of our loan portfolio by <unk> made at least 12 in the last call payments versus 82, 3% at June 30.
Speaker 2: and also verse only 74.2% at you 30 or 22. This compares to 13% of it.
And also versus only 74, 2% at June 32002.
This compares to 13% at the time, we purchased the loans.
Speaker 2: Our non-performing loan purchases over the last 21 months increased materially relative to our re-performing loan purchases.
Our nonperforming loan purchases over the last 21 months increased materially relative to our re performing loan purchases.
Speaker 2: giving increases in housing prices in 2021-2022, and rising interest rates in 2022-2023 incentivize these elevated monthly payment patterns, which leads to longer duration and lower yield.
Inefficient increases in housing prices in 2021, 2022, and rising interest rates in 2022, and 2023 incentivize these elevated monthly payment patterns, which leads to longer duration and lower yields the.
Speaker 2: The slide-up chicken delinquency in Q3, if it continues, should have a positive effect on unlearners.
The slight uptick in delinquency in Q3, if it continues it should have a positive effect on unlevered yields.
Speaker 2: While loans that become regular paying produce higher total cash flows over the life of the loans, on average, they can extend duration. And because we purchased loans at discounts, this can reduce percentage yield on the loan portfolio and quarterly interest rates.
While loans that become regular paying produce higher total cash flows over the life of the loans on average they can extend duration and because we purchased loans at discounts. This can reduce percentage yield on the loan portfolio and quarterly interest income.
Speaker 2: Loans that do not migrate to regular monthly pay status typically have materially shorter durations and therefore result in higher durations.
Loans that do not migrate to regular monthly pay status typically have materially shorter durations and therefore result in higher rates.
Speaker 2: Our weighted average cost of funds in Q3 was about the same as Q2.
Our weighted average cost of funds in Q3 was about the same as Q2.
Speaker 2: Yet income, it revealed the commonholders was negative 6.1 million or 25 cents per share. There are several items of note that had an impact on earnings in the third quarter.
Net.
Income attributable to common holders was negative $6 1 million or <unk> 25 per share. There are several items of note that had an impact on earnings in the third quarter.
Speaker 2: To make it a little easier to follow, we have a table that ties gap income to operating income on page 16 of the presentation as well as in our 10-Q 's.
To make it a little easier to follow we have a table of the ties GAAP income to operating income on page 16 of the presentation as well as in our 10-Q.
Speaker 2: Operating earnings was negative 2.3 million or nine cents per share. Taxable income net of preferred dividends was minus six cents.
Operating earnings was negative $2 3 million or <unk> 90 per share.
<unk> income net of preferred dividends was minus six.
Speaker 2: Tactable income decreased in Q3 primarily of the continued high level of low and An ast?? raise
Taxable income decreased in Q3, primarily as a continued high level of loan REIT performance.
Speaker 2: Tax for regular daily loans is based on contractual life, typically 30 years, rather than expected life.
Tax for regular paying loans is based on contractual life typically 30 years, rather than expected life.
Speaker 2: If delinquency increases and actual duration becomes shorter than contractual duration, taxable income increases.
Delinquency increases in actual duration becomes shorter and contractual duration taxable income increases.
Speaker 2: We recorded a loss on investments and affiliates, partly as a result of the flow through of GAIA's one-time manager termination fee, paid as part of GAIA's internalization that is effective September 1st.
We recorded a loss on investments and affiliates, partly as a result of the flow through of guidance, one time manager termination fee payments target guidance internally <unk> that is effective September one.
Speaker 2: There are a few one time and unusual items in the Q3 2023 numbers. In July , we and our GB partner called eight joint venture securitization and re-securitized the underlying loans into our 2023 C-TRIPLEA rated GB securitization and our 2023 B-Underrated GB securitization.
There are a few onetime and unusual items in the Q3 2023 numbers in July we and our JV partner called eight joint venture Securitizations and re securitize the underlying loans into our 2023 C. AAA rated JV securitization and our 2023 b.
Created JV securitization.
Speaker 2: This resulted in 1.3 million gap, but not cash charge, that we then collect back over the remaining life of the underlying low.
This resulted in $1 3 million gap, but not cash charge that we then collect back over the remaining life of the underlying loans.
Speaker 2: Since the eight called securitizations were joint ventures in which we owned a 20% interest, they were not consolidated on balance sheet as loans, it held legally and undergaug as securities and beneficial interests.
Since the eight call Securitizations, where joint ventures in which we owned a 20% interest they were not consolidated on our balance sheet as loans held legally and under GAAP as securities and beneficial interests.
Speaker 2: In the July 2020 re-securetizations to the new triple-a rated structure and unrated structure, we continue to own the same percentage, but the security is not to market as low.
And the July 2023 re securitizations to the new AAA rated structure, an unrated structure, we continue to own the same percentage, but the securities Mark to market is lower.
Speaker 2: Because of this, in Q2 we took an impairment equal to the difference between securities carrying values and market values in June of 23 of 8.8 million or 37 cents per share.
Because of this in Q2, we took the impairment equal to the difference between securities carrying values and market values in June of 'twenty, three of $8 8 million or <unk> 37 per share.
Speaker 2: But since the transaction is closed in late July , we subsequently added 1.3 million to discharge in Q3.
But since the transaction closed in late July we subsequently added one 3 million to discharge.
Q3.
Speaker 2: The Lonesford, the HAB securitization that we're called are transferred from their H-joint venture trusts to our new two new joint venture trusts with the same partners owning the same percentages in each.
The lowest rate.
JV Securitizations that recall are transferred from their <unk> joint venture trusts two are two new joint venture Trust with the same partners owning the same percentages in each.
Speaker 2: We and our 80% partner agreed to sell the loans in the form of an exchange of securities, which triggers a non-cash loss under GAAP.
We and our 80% partner agreed to sell the loans in the form of an exchange of securities, which triggers a noncash loss under GAAP.
Speaker 2: There is no difference in expected cash flow on the underlying assets. And we expect this market non-cash loss amount is fully recaptured over the expected life of the 2023 B and 2023 C trusts. This also does...
There is no difference than expected cash flow and the underlying assets and we expect this mark to market noncash loss amount is fully recaptured over the expected life of the 2023 and 2023 C trusts.
This also it doesn't affect taxable income.
Speaker 2: We also sold an unreaded class 18 year bond in one of our joint ventures and recognized a $400,000 loss. The $400,000 was already reflected in both.
We also sold an unrelated class a senior bond and one of our joint ventures and recognized a $400000 loss. The 400000 was already reflected in book value.
Speaker 2: Book value per share was 1107 at September 30. Book value decreased primarily by our gap loss and dividends paid with an offset from positive mark-to-mark adjustment of our investment in JV debt security.
Book value per share was $11 seven at September 30 book value decreased primarily by our GAAP loss and dividends paid with an offset from positive mark to market adjustment of our investment in JV debt securities.
Speaker 2: We also issued some shares to our ATM. There's a table on page 17, 50 tiles, the changes in book.
We also issued some shares through our ATM.
There is a table on page 17, the details the changes in book value.
Speaker 2: At September 30, we had approximately 64 million of cash. And for Q3, we had an average day of the cash and cash equivalent balance of approximately 53 million.
At September 30, we had approximately $64 million of cash and for Q3, we had an average daily cash and cash equivalent balance of approximately $53 million.
Speaker 2: with approximately 40 million of cash collections in the third quarter.
We had approximately $40 million of cash collections in the third quarter.
Speaker 2: At September 30, we also have a significant amount of unencumbered securities from our securitization and joint ventures and unencumbered mortgage loans, which we'll discuss in more detail on page 12.
At September 30, we also have a significant amount of unencumbered securities from our Securitizations at joint ventures, and unencumbered mortgage loans, which we'll discuss in more detail on page 12.
Speaker 2: Approximately 81.2% of our portfolio by UPB made at least 12 of their last 12 payments. Compared to a small fraction of this at the time of one acquisition, this decrease from 82.3% at June 30.
Approximately 81, 2% of our portfolio by <unk> made at least 12 of the last 12 payments compared to a small fraction of this at the time of loan acquisition. This decreased from 82, 3% at June 30.
Speaker 2: Reperformance increases the life of loan cash flows, but the duration extension reduces yield and interesting company current quarter. As more purchase to implement loans repreform rather than prepare to fall, this lowers current tax flow income.
Re performance increase is life of loan cash flows, but the duration extension reduced yield and interest income in the current quarter as more purchased delinquent loans re perform rather than prepaid default. This lowers current taxable income as well.
Speaker 2: On page five, purchase RPLs represent approximately 89% of our local portfolio at September 30. Purchase RPLs represented approximately 96% 18 months ago.
On page five purchase <unk> represent approximately 89% of our loan portfolio at September 30.
<unk> represented approximately 96% 18 months ago.
Speaker 2: We primarily purchase RPL that have made less than 70 consecutive payments. And NPL that have certainly low level and underlying top these specifications.
We primarily purchase Rps that have made less than seven consecutive payments.
We also have certainly loan level underlying property specifications.
Speaker 2: We typically buy well-seasoned, lower LTV loans with a targeted amount of absolute dollars of equity.
Typically by well seasoned lower LTV loans with a targeted amount of absolute dollars of equity.
Speaker 2: For residential loans, we continue to see stronger performance than expected in our portfolio. However, due to the increase in interest rates, credit tightening and the potential for material, economic swelling, we would expect an increase in doing-mancy and default at some point.
For residential loans, we continue to see stronger performance than expected in our portfolio. However, given the increase in interest rates credit tightening and the potential for material economic slowing we would expect an increase in delinquency and default at some point.
Speaker 2: We have seen a small increase in delinquency in our portfolio in Q3. As a result, we have been hesitant to be aggressive in residential loan acquisitions as we expect a better opportunity set will develop.
We have seen a small increase in delinquency in our portfolio in Q3 as a result, we have been hesitant to be aggressive in residential loan acquisitions as we expected better opportunity set will develop.
Speaker 2: One thing we have seen is that significant HPA and the resulting material increase in absolute dollars of equity, coupled with rapidly rising mortgage rates, make barters more engaged and financially attached to their properties. And therefore, more determined to maintain regular pain.
One thing we have seen is a significant eight HPA and the resulting material increase in absolute dollars of equity coupled with rapidly rising mortgage rates make borrowers more engaged and financially attached to their properties and therefore more determined to maintain regular payments.
Speaker 2: Historically, we've typically seen mortgage borrowers pay credit cards and auto loans and HELOCs before paying first mortgages in times of financial stress.
Historically, we've typically seen mortgage borrowers take credit cards, and auto loans and Helocs before paying first mortgages in times of financial stress.
Speaker 2: However, as a result of significant increases in absolute dollars of equity for season loans, we're now seeing increased delinquency for their credit cards and auto loans and less so for their first mortgage.
However, as a result of significant increases in absolute dollars of equity proceeds and loans were now seeing increased delinquency for their credit cards and auto loans and less so for their first mortgages.
Speaker 2: Commercial real estate loans have not fared as well, and we are beginning to see opportunities.
Commercial real estate loans have not fared as well and we are beginning to see opportunities. We believe there will be significant opportunities in sub performing and nonperforming commercial real estate loans and bridge loans in many markets as we get into 2024.
Speaker 2: We believe there will be significant opportunities in sub-performing and not performing commercial real estate loans and bridge loans in many markets as we get into 2024.
Speaker 2: We've seen a preview of this in the last few months and is having a less talked about effect on midsize and sub-midsize bank liquidity and loan portfolio performance.
We have seen a preview of this in the last few months and is having a less talked about effect in mid size and sub mid sized bank liquidity and loan portfolio performance.
Speaker 2: They frequently have higher percentages of their low-port coils with CRM exposure.
They frequently have higher percentages of their loan portfolios with CRE exposure.
Speaker 2: We're beginning to see commercial real estate loans for sale from these institutions and expect that opportunity set will grow. We have joint venture partners that would like us to find significant dollars of commercial opportunity.
We're beginning to see or to see commercial real estate loans for sale from these institutions and expect that opportunity set will grow.
We have joint venture partners that would license defined significant commercial opportunities.
Okay.
Speaker 2: We own on page 6, we own lower LTV loans. Overall RPL purchase prices approximately 41% of current property value and 91% of UPB.
We own on page six we own lower LTV loans overall RTL purchase price was approximately 41% of current property value and 91% of the ECB we.
Speaker 2: We've always been focused on loans with lower LTVs, with certain threshold levels about pseudo-subectility and in target geographic location.
We've always been focused on loans with lower ltvs with certain threshold levels of absolute dollars of equity and in targeted geographic locations.
Speaker 2: On page 7, since Q3 and Q4 of 2021, we significantly increase our NBL purchase fees versus our BL.
On page seven since Q3, and Q4 of 2021, we significantly increased our NPL purchases versus <unk>.
Speaker 2: NPLs, on average, can have shorter duration than RPLs. For NPLs on our balance sheet, our overall purchase price is 90% of UPV, 85% of total owing balance, including arrearage, and 45% of property value.
Npls on average and have shorter duration than Rps for Npls on our balance sheet. Our overall purchase price is 90% at GBP, 85% of total owing balance, including Arrearage and 45% of property value.
Speaker 2: As a result of the low low to value and higher acid dose effectivity on average for our NPL portfolio, as well as rapidly rising mortgage rates, we've seen significant reinstatement and re-performance on NPL.
As a result of the low loan to value and higher absolute dollars of equity on average for our NPL portfolio as well as rapidly rising mortgage rates, we have seen significant reinstatement and REIT performance on Npls.
Speaker 2: As I mentioned earlier, we're both RPLs and NPLs. Persisting seasons low LPD loans at 50% plus discounts to property values, the significant absence of equity provides a natural credit hedge to housing price declines and recession as resulting increases in delinquencies, short-duration and increases our corresponding yields material.
As I mentioned earlier for both our appeals in Npls purchasing season, low LTV loans at 50% plus discounts to property values.
<unk> absolute dollars of equity provides a natural credit hedge the housing price declines in recession, as resulting increases in delinquencies shortened duration and increases our corresponding yields materially.
Speaker 2: On page 8 at September 30, approximately 78% of our loans were in our target market.
On page eight at September 30, approximately 78% of our loans were in our target markets.
Speaker 2: California continues to represent the largest segment of our loan portfolio at approximately 22%.
California continues to represent the largest segment of our loan portfolio at approximately 22%.
Speaker 2: However, California has been nearly 40% of all prepayments in 21, 2022, and so far in 2023. Our California mortgage loans are primarily in Los Angeles, Orange, and San Diego counties.
However, California has been nearly 40% of all prepayments in 'twenty, one 2022, and so far in 2023.
Our California mortgage loans are primarily in Los Angeles, Orange and San Diego counties.
Speaker 2: Florida represents approximately 17% of our portfolio and Miami-Dade Broward and Palm Beach counties are approximately 75% of that.
Florida represents approximately 17% of our portfolio in Miami Dade Broward and Palm Beach counties are approximately 75% of that.
Speaker 2: We continue to see demand for homes at our price ranges in our target markets, both for potential homeowners and single-family rental buyers.
We continue to see demand for homes in our price ranges in our target markets, both from a potential home homeowners and single family rental buyers.
Speaker 2: On page 9, portfolio migration, September 30, approximately 81.2% of our loan portfolio made at least 12 of the last 12 payments as compared to 82.3% at June 30. And 74%.
On page nine portfolio migration.
Timber 30, approximately 81, 2% of our loan portfolio made at least 12 of last 12 payments as compared to 82, 3% at June 30.
And 74% 15 months ago.
Speaker 2: Approximately 77% of our loan portfolio made at least 24 of the last 24 compared to approximately 69% at December 31 and 72% six months ago. Approximately 83% had been.
Approximately 77% of our loan portfolio made at least 24 over the last 24 compared to approximately 69% at December 31, and 72% six months ago.
Approximately 83% have made at least seven consecutive payments.
Speaker 2: The significant increase in monthly performance is more notable given that since Q3 of 21 we primarily purchased NPL.
This significant increase in monthly performance was more notable given that since Q3 of 'twenty, one we primarily purchased npls.
Speaker 2: Historically, we've seen that when our purchase loans reached seven consecutive payments, they typically get to 12 consecutive payments more than 92 percent of the time. Seven consecutive payments has been a statistical turning point.
Historically, we've seen that when our purchase loans reached seven consecutive payments they typically get to 12 consecutive payments more than 92% of the time.
Seven consecutive payments has been a statistical turning point.
Speaker 2: On page 10, average loan yields decline marginally and average yields on beneficial equity interests and our joint ventures increase the little. Primarily due to less containment in loans and putting more delinquency in joint venture loans.
On page 10 average loan yields declined marginally and average yields on beneficial equity interest in our joint ventures increased a little primarily due to less prepayment in loans and 50 more delinquency and joint venture loans.
Speaker 2: For debt securities and beneficial interests, remember that yield is net of servicing fees and yield on loans as gross of services.
Our debt securities and beneficial interests remember that yield is net of servicing fees and yield on loans is gross of servicing fees.
Speaker 2: Death securities and beneficial interests is how our interests and our GVs are presented under GAP. They have increased that balance sheet both at the loan since 2020.
Debt Securities and beneficial interest is how our interest in our <unk> are presented under GAAP and increased on balance sheet relative to loans since 2020.
Speaker 2: Since we purchased loans to the discount, the increased monthly reproperformance of the link with loans and excess of expectations could extend duration, would you seal the significant absolute dollars of equity for loans both from the types of loans we buy, home price appreciation or target market that magnified this absolute dollars of equity. And rising mortgage rates led to material reproperformance and excess of expectations.
Since we increased since we purchase loans at a discount the increased monthly performance of delinquent loans in excess of expectations could extend duration reduce yield the significant absolute dollars of equity.
For our loans both from the types of loans, we buy home price appreciation in our target market that magnified. This absolute dollars of equity and rising mortgage rates led to material REIT performance in excess of expectations.
Speaker 2: Our leverage continues to be low, especially for companies in our sector. We ended 2-3 with asset level debt of 2.5 times down from 2.7 times.
Our leverage continues to be low, especially for companies in our sector. We ended Q3 with asset level debt of two five times down from two seven times.
Speaker 2: Our total average death cost was slightly higher in Q3. This is primarily the result of the issuance of our unsecured notes in August of 2022, since they were a higher percentage of total debt outstanding since asset-based debt paid down as our local portfolio holds declined in Q.
Our total average debt cost was slightly higher in Q3. This is primarily the result of the issuance of our unsecured notes in August of 2022.
They were a higher percentage of total debt outstanding is asset based debt pay down as our loan portfolio holdings declined in Q3.
Speaker 2: Fixed range of curitimate debt and fixed range corporate debt. It's September 30th. Our approximately 65% of our total.
Fixed rate securitized debt and fixed rate corporate debt at September 30 are approximately 65% of our total debt.
Yes.
Speaker 2: On page 11, our total repurchase agreement debt in September 30 was approximately 392 million versus 413 million in June 30. Two hundred and four million of this was non-mark-to-market, non-recourse mortgage loan financing, and 178 million who was financing primarily on Class A-1 senior bonds in our joint ventures, with remaining expected lives of sub-two years.
On page 11, our total repurchase agreement debt at September 30 was approximately $392 million versus $413 million at June 3200, $4 million of this was non mark to market nonrecourse mortgage loan financing and $178 million of those financing primarily on class eight <unk> senior bonds.
Joint ventures with remaining expected lives of sub two years.
Speaker 2: We also have significant unbecome radiantez. We expect the amount of our repurchase screen and debt to continue declining relative to fixed rates to curate type debt.
We also have significant unencumbered assets, we expect the amount of our repurchase agreement debt to continue declining relative to fixed rate secured debt.
On page 12.
Speaker 2: We have a very small number of NPL and RPL acquisitions under contract. As I mentioned earlier on the call, we believe the opportunity set will expand. We are starting to see material opportunity set in commercial real estate loans as a result of recession risk and banking sector risk issues. We're also seeing opportunities in commercial real estate bridge financing and repositioning finance.
We have a very small number of NPL and RPM acquisitions under contract as I mentioned earlier on the call. We believe the opportunity set will expand we are starting to see a material opportunity set in commercial real estate loans grew as a result of recession risk and banking sector risk issues. We are also seeing opportunities in commercial real estate bridge financing.
And repositioning financings.
Speaker 2: This year to date we have distributed 65 cents per share in dividends. We put the credit cash dividends of 11 cents per share to be paid on November 30, 2023 to stockholders of record November 15, 2020.
This year to date, we have distributed <unk> 65 per share in dividends, we declared a cash dividend of <unk> 11 per share to be paid on November 32023 to stockholders of record November 15 2023.
Speaker 2: We reduce our dividend in order to focus on book value and maximizing stockholder value overall.
We reduced our dividend in order to focus on book value and maximizing stockholder value overall.
Speaker 2: This decision follows the announcement of the mutual termination in late October of our merger agreement with LNT financial.
This decision follows the announcement of the mutual termination in late October of our merger agreement with Ellington financial.
Speaker 2: The termination was approved by both companies' boards of directors after careful consideration of the proposed merger and the progress made toward completing the transaction.
Termination was approved by both companies' boards of directors after careful consideration of the proposed merger and the progress made towards completing the transaction.
Speaker 2: The details of the 16 million termination payment are disposed in our press release last month.
The details of the $16 million termination payment are disclosed in our press release last month.
Speaker 2: Howington Financial Gold is approximately 6.1% of our stock, and it remains a securitization joint venture partner.
<unk> financial holds approximately six 1% of our stock and it remains a securitization joint venture partner.
Speaker 2: Also, we disclosed in our earnings press release today, which I refer you to, and as part of our board's regular assessment of our business and strategic direction, among other things, the board engaged the financial advisor to assist us with thorough evaluation of strategic alternatives.
Also we disclosed in our earnings press release today, which I refer you to and as part of our board's regular assessment of our business and strategic direction. Among other things the board engaged a financial advisor to assist us with thorough evaluation of strategic alternatives.
Speaker 2: We don't intend to comment further on this process until the disclosure is necessary or advised.
We don't intend to comment further on this process until disclosure is necessary or advisable.
Speaker 2: This concludes my comments for our third court earnings call. We appreciate you joining us today. As I noted earlier during my remarks, given the ongoing strategic review process, we will defer taking questions and will provide additional updates or make additional disclosures as needed. Thank you very much again for joining us. We appreciate your interest in Great HX Court.
This concludes my comments for our third quarter earnings call. We appreciate you joining us today as I noted earlier during my remarks, given the ongoing strategic review process, we will deferred taking questions and we'll provide additional updates or make additional disclosures as needed.
Thank you very much again for joining us we appreciate your interest in Great Ajax Corp.
Speaker 1: Thank you, ladies and gentlemen, that will conclude the great ex-AJAX Corp Q3 2023 financial results conference call. Again, we thank you all so much for joining us and wish you all a great rest of your day. Goodbye.
Thank you, ladies and gentlemen that will conclude the great. Ajax Corp, Q3, 2023 financial results Conference call again, we thank you all so much for joining us and wish you all a great rest of your day Goodbye.
Speaker 1: Q3 2023 financial results conference call. Again, we thank you all so much for joining us.
Q3, 2023 financial results conference call again, we thank you all so much for joining us.