8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 3, 2016

GREAT AJAX CORP.

(Exact name of registrant as specified in charter)

Maryland	001 36844	47 1271842
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

9400 SW Beaverton—Hillsdale Hwy

Suite 131

Beaverton, OR 97005

(Address of principal executive offices)

Registrant’s telephone number, including area code:

503 505 5670

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

On May 3, 2016, Great Ajax Corp., a Maryland corporation (the “Company”) issued a press release regarding its financial results for the quarter ended March 31, 2016 (the “Press Release”). A copy of the Press Release is attached hereto as Exhibit 99.1 and is available on the Company’s website.

The information provided in Item 2.02 of this report, including Exhibit 99.1, shall be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

Item 7.01. Regulation FD Disclosure

On May 3, 2016, the Company will hold an investor conference call and webcast to discuss financial results for the first quarter ended March 31, 2016, including the Press Release and other matters relating to the Company.

The Company has also made available on its website presentation materials containing certain additional information relating to the Company and its financial results for the first quarter ended March 31, 2016 (the “Presentation Materials”). The Presentation Materials are furnished herewith as Exhibit 99.2, and are incorporated by reference in this Item 7.01. All information in Exhibit 99.2 is presented as of the particular date or dates referenced therein, and the Company does not undertake any obligation to, and disclaims any duty to, update any of the information provided.

The information provided in Item 7.01 of this report, including Exhibit 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall the information or Exhibit 99.2 be deemed incorporated by reference in any filings under the Securities Act of 1933, as amended.

Item 8.01 Other Events

On May 3, 2016, the Company issued a press release announcing that its Board of Directors has declared a quarterly cash dividend of $0.25 per share of common stock. The dividend is payable to the Company’s shareholders of record as of March 13, 2016 and is expected to be paid on May 20, 2016.

Item 9.01. Financial Statements and Exhibits

Exhibit	Description
99.1	Press Release dated May 3, 2016
99.2	May 2016 Presentation Materials

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

GREAT AJAX CORP.
By:	/s/ Mary Doyle
Name:	Mary Doyle
Title:	Chief Financial Officer

Dated: May 3, 2016

EXHIBIT INDEX

Exhibit	Description
99.1	Press Release dated May 3, 2016
99.2	May 2016 Presentation Materials

EX-99.1

Exhibit 99.1

 

GREAT AJAX CORP. ANNOUNCES RESULTS FOR THE QUARTER
ENDED MARCH 31, 2016

Highlights

· Acquired re-performing mortgage loans with aggregate UPB of $49.7 million for total purchase price of $37.2 million

· At March 31, 2016 owned a portfolio of 3,382 mortgage loans with aggregate UPB of $758.7 million and 94 properties

· Net interest income of $10.8 million for the three-months ended March 31, 2016, compared to $5.8 million for the three-months ended March 31, 2015

· Net income attributable to common stockholders of $7.7 million for the three-months ended March 31, 2016, compared to $3.6 million for the three-months ended March 31, 2015

· GAAP net income of $0.50 per diluted share for the three-months ended March 31, 2016, compared to $0.28 per diluted share for the three-months ended March 31, 2015

· Taxable net income for the three-months ended March 31, 2016 of $0.23 per diluted share, compared to $0.12 for the three-months ended March 31, 2015

· Net book value per diluted share of $15.18 at March 31, 2016, compared to $14.92 at December 31, 2015.

New York, NY— May 3, 2016 — Great Ajax Corp. (NYSE: AJX), a Maryland corporation that is a real estate investment trust, today announces results of operations for the quarter ended March 31, 2016. We focus primarily on acquiring, investing in and managing a portfolio of re-performing and non-performing mortgage loans secured by single-family residences and commercial properties and, to a lesser extent, single-family properties.

Financial results

(dollars in thousands except per share amounts)

	Three months ended March 31, 2016		Three months ended December 31, 2015		Three months ended September 30, 2015		Three months ended June 30, 2015
Loan interest income	$	15,814	$	15,584	$	14,440	$	10,793
Revenues(1)	$	11,411	$	11,689	$	10,936	$	8,810
Consolidated net income	$	7,963	$	8,392	$	7,925	$	5,659
Net income per diluted share	$	0.50	$	0.53	$	0.50	$	0.36
Average daily cash balance(2)	$	27,824	$	28,066	$	52,332	$	43,559
Average daily carrying value RPL	$	496,925	$	447,512	$	397,240	$	283,102
Average daily carrying value NPL	$	71,984	$	75,433	$	75,164	$	72,713

(1) Revenues includes interest income net of interest expense, income from investment in Manager and Other income

(2) Average daily cash balance includes cash and cash equivalents, and excludes cash held in trust

Net interest income for the quarter declined due to higher interest expense driven in part by a draw on our repurchase line in anticipation of a portfolio acquisition that settled late in the quarter, and by faster accretion of discount and debt issuance costs on our secured borrowings. Additionally, re-default rates on our RPL portfolio were lower than expected, extending the duration of the portfolio and reducing current period income. The repurchase advance was repaid with the use of proceeds from our April securitization (described in more detail in “Subsequent Events” below).

Portfolio acquisitions

(dollars in thousands)

	Three months ended March 31, 2016			Three months ended December 31, 2015			Three months ended September 30, 2015			Three months ended June 30, 2015
RPLs
Count		218			333			393			758
UPB	$	49,685		$	60,956		$	91,764		$	188,935
Purchase price	$	37,148		$	45,861		$	66,852		$	150,388
Purchase price % of UPB		74.8	%		75.7	%		72.9	%		79.6	%
NPLs
Count		-			4			-			69
UPB	$	-		$	910		$	-		$	15,710
Purchase price	$	-		$	585		$	-		$	9,044
Purchase price % of UPB		-			64.8	%		-			57.6	%

Mortgage loans purchased during the quarter and held as of quarter-end were on our consolidated balance sheet for a weighted average of 45 days of the quarter.

Our average assets during the quarter were $626.0 million and our average equity was $240.3 million. At quarter-end, our total assets were $642.7 million and total equity was $242.2 million, compared to total assets of $609.8 million and total equity of $237.8 million at December 31, 2015.

During the quarter we established a joint-venture partnership with DoubleLine Capital LP, which purchased 568 RPLs for $90.2 million. The purchase price equaled 86.4% of UPB and 59.0% of the underlying property value. DoubleLine Capital LP has ownership of 95% of the joint venture, we have ownership of 1.2%, and other investors have ownership of 3.8%. Our Manager will act as Administrator for the joint venture, and our servicer will perform all servicing for this pool of loans. We have the option to increase our ownership percentage in the future through increased participation in the joint venture’s future asset purchases, if any.

As of the quarter-end, of the 3,382 loans in our portfolio, 86.9% were re-performing loans and 13.1% were non-performing loans based on UPB. As of the quarter-end, our portfolio of mortgage-related assets consisted of the following (dollars in thousands):

2

No. of Loans(1)		3,382		No. of first liens		3,361
Total UPB	$	758,734		No. of second liens		21
Interest-Bearing Balance	$	705,441		No. of Rental Properties		7
Deferred Balance(2)	$	53,294		Market Value of Rental Properties	$	1,570
Market Value of Collateral(3)	$	861,366		Capital Invested in Rental
Price/Total UPB(3)		73.6	%	Properties	$	1,155
Price/Market Value of Collateral		65.4	%	Price/Market Value of Rental
Weighted Average Coupon(4)		4.45	%	Properties(6)		73.6	%
Weighted Average LTV(5)		102.4	%	No. Other REO		87
Weighted Average Remaining Term		313.4		Market Value of Other REO	$	18,217

(1) Information reflects one loan in which we hold a 40.5% beneficial interest through an equity method investee and two loans in which we have a 95% participation interest and are owned by our servicer because neither we nor our subsidiaries have the necessary licenses in certain states.

(2) Amounts that have been deferred in connection with a loan modification on which interest does not accrue. These amounts generally become payable at the time of maturity.

(3) As of acquisition date.

(4) Our loan portfolio consists of fixed rate (51.0% of UPB), ARM (17.0% of UPB) and Hybrid ARM (32.0% of UPB) mortgage loans with original terms to maturity of not more than 40 years.

(5) UPB as of March 31, 2016 divided by market value of collateral as of acquisition date and weighted by the UPB of the loan.

(6) As of March 31, 2016.

Subsequent Events
During April 2016, we completed the acquisitions of 123 RPLs secured by single and one-to-four family residences with aggregate UPB of $32.1 million in six transactions from five different sellers. The loans were acquired at 69.0% of UPB and the estimated market value of the underlying collateral is $31.6 million. The purchase price equaled 70.0% of the estimated market value of the underlying collateral. All of these acquisitions had closed as of April 30, 2016.

Subsequent to quarter end we completed our sixth securitization, which closed on April 11, 2016. An aggregate of $101.4 million of senior securities and $15.8 million of subordinated securities were issued in a private offering with respect to $158.5 million UPB of mortgage loans. Approximately 83.1% of these mortgage loans were RPLs and approximately 16.9% were NPLs based on UPB. Net proceeds from the sale of the senior securities provided leverage of approximately 5.4 times the related equity, and $70.2 million of the proceeds were used to pay down borrowings on our repurchase facility.

On April 26, 2016, our board of directors declared a dividend of $0.25 per share, which will be payable on May 20, 2016 to stockholders of record as of May 13, 2016.

Additionally, we have agreed to acquire, subject to due diligence, 165 RPLs with aggregate UPB of $47.7 million in eleven transactions from eleven different sellers for an aggregate purchase price of $38.3 million. The purchase price equals 59.7% of the estimated market value of the underlying collateral. We have not entered into a definitive agreement with respect to these loans, and there is no assurance that we will enter into a definitive agreement relating to these loans or, if such an agreement is executed, that we will actually close the acquisition. While these acquisitions are expected to close by May 31, 2016, there can be no assurance that these acquisitions will close or that the terms may not change.

3

Conference Call

Great Ajax will host a conference call at 5:00 p.m. EST, Tuesday, May 3, 2016 to review our financial results for the quarter. A live Webcast of the conference call will be accessible from the Investor Relations section of our website www.great-ajax.com. An archive of the Webcast will be available for 90 days.

About Great Ajax Corp.

Great Ajax Corp. is a Maryland corporation that focuses primarily on acquiring, investing in and managing mortgage loans secured by single-family residences and, to a lesser extent, single-family properties themselves. We also invest in loans secured by multi-family residential and smaller commercial mixed use retail/residential properties, as well as in the properties directly. We are externally managed by Thetis Asset Management LLC. 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 real estate investment trust 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 the control of Great Ajax, including, without limitation, the risk factors and other matters set forth in our Annual Report on Form 10-K for the period ended December 31, 2015 filed with the SEC on March 29, 2016. Great Ajax undertakes 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.

CONTACT:	Lawrence Mendelsohn
	Chief Executive Officer
	or
	Mary Doyle
	Chief Financial Officer
	Mary.Doyle@aspencapital.com
	503-444-4224

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GREAT AJAX CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands except share and per share amounts)

(Unaudited)

	Three months ended			Three months ended
	March 31, 2016			March 31, 2015
INCOME:
Loan interest income	$	15,814		$	6,884
Interest expense		(4,987	)		(1,075	)
Net interest income		10,827			5,809
Income from investment in Manager		44			40
Other income		540			184
Total income		11,411			6,033
EXPENSE:
Related party expense - loan servicing fees		1,403			656
Related party expense - management fee		906			747
Loan transaction expense		213			260
Professional fees		414			385
Real estate operating expense		162			10
Other expense		353			160
Total expense		3,451			2,218
Income before provision for income tax		7,960			3,815
Provision for (benefit from) income tax		(3	)		-
Consolidated net income		7,963			3,815
Less: consolidated net income attributable to noncontrolling interests		312			175
Consolidated net income attributable to common stockholders	$	7,651		$	3,640
Basic earnings per common share	$	0.50		$	0.28
Diluted earnings per common share	$	0.50		$	0.28
Weighted average shares - basic		15,306,519			13,008,268
Weighted average shares - diluted		15,959,202			13,680,687

5

GREAT AJAX CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands except share and per share amounts)

	(Unaudited)
	March 31, 2016		December 31, 2015
ASSETS
Cash and cash equivalents	$	23,893	$	30,795
Cash held in trust		1,067		39
Mortgage loans, net(1)		584,298		554,877
Property held-for-sale		13,380		10,333
Rental property, net		1,155		58
Receivable from servicer		8,108		5,444
Investment in affiliate		3,810		2,625
Prepaid expenses and other assets		6,973		5,634
Total Assets	$	642,684	$	609,805
LIABILITIES AND EQUITY
Liabilities:
Secured borrowings(1)	$	260,032	$	265,006
Borrowings under repurchase agreement		136,496		104,533
Management fee payable		679		667
Accrued expenses and other liabilities		3,273		1,786
Total liabilities		400,480		371,992
Equity:
Preferred stock $.01 par value; 25,000,000 shares authorized, none issued or outstanding		-		-
Common stock $.01 par value; 125,000,000 shares authorized, 15,318,532 shares issued and outstanding, and 15,301,946 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively		152		152
Additional paid-in capital		211,983		211,729
Retained earnings		19,896		15,921
Equity attributable to common stockholders		232,031		277,802
Noncontrolling interests		10,173		10,011
Total equity		242,204		237,813
Total Liabilities and Equity	$	642,684	$	609,805

(1)      Mortgage loans includes $391,799 and $398,696 of loans transferred to securitization trusts at March 31, 2016 and December 31, 2015, respectively, that are variable interest entities (“VIEs”) that 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.).

6

EX-99.2

Exhibit 99.2 

 

First Quarter 2016 Investor Presentation May 3, 2016

Safe Harbor Disclosure 2 □ We make forward - looking statements in this presentation that are subject to risks and uncertainties. These forward - looking statements include information about possible or assumed future results of our business, financial condition, liquidity, resu lts of operations, cash flow and plans and objectives. When we use the words “believe,” “expect,” “anticipate,” “estimate,” “plan,” “continue,” “intend,” “should,” “may” or similar expressions, we intend to identify forward - looking statements. □ Statements regarding the following subjects, among others, may be forward - looking: market trends in our industry, interest rates, real estate values, the debt financing markets or the general economy or the demand for residential real estate loans; our business and investment strategy; our projected operating results; actions and initiatives of the U.S. government and changes to U.S. government policies and the execution and impact of these actions, initiatives and policies; the state of the U.S. economy generally or in specific geographic regions; economic trends and economic recoveries; our ability to obtain and maintain financing arrangements; changes in the value of our mortgage portfolio; changes to our portfolio of properties; impact of and changes in governmental regulations, tax law and rates, accounting guidance and similar matters; our ability to satisfy the REIT qualification requirements for U.S. federal income tax purposes; availability of qualified personnel; estima tes relating to our ability to make distributions to our shareholders in the future; general volatility of the capital markets an d t he market price of our shares of common stock; and degree and nature of our competition. □ The forward - looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. Forward - looking statements are not predictions of future events. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known t o us. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward - looking statements. Furthermore, forward - looking statements are subject to risks and uncertainties, including, among other things, those described under Item 1A of our Annual Report on Form 10 - K for the year ended December 31, 2015, which can be accessed through the link to our SEC filings on our website ( www.great - ajax.com ) or at the SEC's website ( www.sec.gov ). Other risks, uncertainties, and factors that could cause actual results to differ materially from those projected may be described from time to time in reports we file with the SEC, including reports on Forms 10 - Q, 10 - K and 8 - K. Any forward - looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward - looking statements, whether as a result of new information, future events or otherwise. Unless stated otherwise, financial information included in this presentation is as of March 31, 2016.

Business Overview 3 □ Leverage long - standing relationships to acquire loans through privately negotiated transactions from a diverse group of customers – Over 90% of acquisitions by Great Ajax Corp. have been privately negotiated – Acquisitions made in 142 transactions since inception. 13 transactions in Q1 2016. □ Use our manager’s proprietary analytics to price each pool on an asset - by - asset basis □ Adjust individual loan bid price to accumulate clusters of loans in attractive demographic metropolitan areas – Typical acquisitions contain 25 – 100 loans with total market value between $5 – $20 million □ Our affiliated servicer services the loans asset - by - asset and borrower - by - borrower □ Objective is to maximize returns for each asset by utilizing full menu of loss mitigation and asset optimization techniques □ Use moderate non - mark - to - market leverage – Corporate leverage of 1.64x – Five* securitizations since inception totaling $537.4 million of loan UPB. Approximate leverage of 2.48x from the sale of senior bonds * See Subsequent Events section for information on our sixth securitization that closed on 4/11/2016

Highlights – Quarter Ended March 31, 2016 4 □ Acquired re - performing mortgage loans with aggregate UPB of $49.7 million for total purchase price of $37.2 million □ At March 31, 2016 owned a portfolio of 3,382 mortgage loans with aggregate UPB of $758.7 million and 94 properties □ Net interest income of $ 10.8 million compared to $5.8 million for the three - months ended March 31, 2015 □ Net income attributable to common stockholders of $7.7 million compared to $3.6 million for the three - months ended March 31, 2015 □ GAAP net income of $0.50 per diluted share, compared to $0.28 per diluted share for the three - months ended March 31, 2015 □ Taxable net income of $0.23 per diluted share, compared to $0.12 for the three - months ended March 31, 2015 □ Through a joint - venture partnership with DoubleLine Capital LP, we purchased 568 RPLs for $90.2 million during the quarter. The purchase price equaled 86.4% of UPB and 59.0% of the underlying property value. DoubleLine Capital LP has ownership of 95% of the joint venture, we have ownership of 1.2%, and other investors have ownership of 3.8%. Our Manger will act as Administrator for the joint venture, and our servicer will perform all servicing for this pool of loans. We have the option to increase our ownership percentage in the future through increased participation in the joint venture’s future asset purchases.

Portfolio Overview – as of March 31, 2016 5 $758.7 MM $881.1 MM 87% 13% Unpaid Principal Balance RPL NPL 85.9% 11.9% 2.2% Property Value RPL NPL REO

Portfolio Growth 6 $64 $481 $617 $659 $118 $111 $100 0 100 200 300 400 500 600 700 800 Initial Assets (07/08/14) 6/30/2015 12/31/2015 3/31/2016 Millions NPLs RPLs Unpaid Principal Balance

Portfolio Growth 7 Re - performing Loans $64 $481 $617 $659 $73 $541 $710 $757 $49 $375 $469 $502 0 100 200 300 400 500 600 700 800 Initial Assets (07/08/14) 6/30/2015 12/31/2015 3/31/2016 Millions UPB Property Value Price

Portfolio Growth 8 $118 $111 $100 122 117 105 $66 $68 $61 0 20 40 60 80 100 120 140 Initial Assets (07/08/14) 6/30/2015 12/31/2015 3/31/2016 Millions UPB Property Value Price Non - performing Loans

Portfolio Concentrated in Attractive Markets 9 □ Clusters of loans in attractive, densely populated markets □ Stable liquidity and home prices □ Over 80% of the portfolio in our target markets Target States Target Markets Los Angeles San Diego Dallas Portland Phoenix Washington DC Metro Area Chicago Atlanta Orlando Tampa Miami, Ft. Lauderdale, W. Palm Beach New York / New Jersey Metro Area Las Vegas REIT, Servicer & Manager Headquarters Property Management Business Management

Building Net Asset Value 10 This illustration has not been prepared in accordance with GAAP and is not intended to constitute a non - GAAP financial measure, but rather an additional tool for investors to consider. In evaluating our financial results, management regularly considers the following analysis, which is intended to arrive at a “ne t asset value” equivalent. Based on the leverage from the five securitizations, securitization investors value our loan portfolio at between $ 18.77 and $19.47 per share. As shown below, at March 31, 2016, if we were to lever our whole loan portfolio through a securitization, the face value of t he equity tranche would be approximately $197.3MM under scenario 1 where the senior attachment point is 64% (similar to our most recent securit iza tion) and $204.9 MM under scenario 2 where the senior attachment point is 63% (similar to the previous securitization). Given that our se curitization investors currently value the equity tranche at between 30% - 50%, using the average 40%, the value of our equity tranche would be $78.9MM under scenario 1, which is $66.8MM or $4.19 per share over the remaining basis of $12.1MM. Our current book value per share is $15.18. By contrast, our current NAV based on this securitization analysis would be the sum of $15.18 and $4.19, or $19.37 per share. Entire Portfolio 3/31/2016 UPB $758,734,000 Price $562,945,060 Book Value / Share $15.18 Leverage (Bond Face/UPB) Bond Face Value Bond Price Net Proceeds Equity Basis Implied value/Share Implied NAV Per Share Senior 64% $485,589,760 98.8% $479,671,635 B1 5% $37,936,700 97.7% $37,059,414 B2 5% $37,936,700 90% $34,143,030 Equity-Trust Certificate $197,270,840 40% $78,908,336 $12,070,981 $4.19 $19.37 Leverage (Bond Face/UPB) Bond Face Value Bond Price Net Proceeds Equity Basis Implied value/Share Implied NAV Per Share Senior 63% $478,002,420 98.3% $469,976,425 B1 5% $37,936,700 97.7% $37,059,414 B2 5% $37,936,700 90% $34,143,030 Equity-Trust Certificate $204,858,180 40% $81,943,272 $21,766,191 $3.77 $18.95

Subsequent Events 11 □ April Acquisitions □ RPL □ UPB: $32.1 MM □ Collateral Value: $31.6 MM □ Price/UPB: 69.0% □ Price/Collateral Value: 70.0 % □ 123 loans in 6 transactions * While these acquisitions are expected to close by 5/31/2016 , there can be no assurance that these acquisition agreements wil l c lose or that the terms thereof may not change. □ May* Acquisitions □ RPL □ UPB: $47.7MM □ Collateral Value: $64.1MM □ Price/UPB: 80.3% □ Price/Collateral Value: 59.7% □ 165 loans in 11 transactions Sixth securitization closed on April 11, 2016 □ $158.5 million UPB of mortgage loans □ $101.4 million of senior securities □ Approximate leverage of 5.4x from the sale of senior bonds □ Senior bond interest rate of 4.25% A dividend of $0.25 per share will be payable on May 20, 2016 to stockholders of record as of May 13, 2016.

Consolidated Statements of Income 12 (Dollars in thousands except share and per share amounts) Three months ended Three months ended March 31, 2016 March 31, 2015 INCOME: Loan interest income $ 15,814 $ 6,884 Interest expense (4,987) (1,075) Net interest income 10,827 5,809 Income from investment in Manager 44 40 Other income 540 184 Total income 11,411 6,033 EXPENSE: Related party expense - loan servicing fees 1,403 656 Related party expense - management fee 906 747 Loan transaction expense 213 260 Professional fees 414 385 Real estate operating expenses 162 10 Other expense 353 160 Total expense 3,451 2,218 Income before provision for income tax 7,960 3,815 Provision for income tax (3) - Consolidated net income 7,963 3,815 Less: consolidated net income attributable to noncontrolling interests 312 175 Consolidated net income attributable to common stockholders $ 7,651 $ 3,640 Basic earnings per common share $ 0.50 $ 0.28 Diluted earnings per common share $ 0.50 $ 0.28 Weighted average shares - basic 15,306,519 13,008,268 Weighted average shares - diluted 15,959,202 13,680,687

Consolidated Balance Sheets 13 (1) Mortgage loans includes $391,799 and $398,696 of loans at March 31, 2016 and December 31, 2015, respectively, transferred to securitiz ati on trusts that are variable interest entities (“VIEs”) that can only be used to settle obligations of the VIEs. Secured borrowings consist of notes issued by VIEs that ca n o nly be settled with the assets and cash flows of the VIEs. The creditors do not have recourse to the primary beneficiary (Great Ajax Corp .). (2) Net book value per diluted share was $15.18 and $14.92 at March 31, 2016 and December 31, 2015, respectively. ASSETS March 31, 2016 December 31, 2015 Cash and cash equivalents $ 23,893 $ 30,795 Cash held in trust 1,067 39 Mortgage loans, net (1) 584,298 554,877 Property held - for - sale 13,380 10,333 Rental property, net 1,155 58 Receivable from servicer 8,108 5,444 Investment in affiliate 3,810 2,625 Prepaid expenses and other assets 6,973 5,634 Total Assets $ 642,684 $ 609,805 LIABILITIES AND EQUITY Liabilities: Secured borrowings (1) $ 260,032 $ 265,006 Borrowings under repurchase agreement 136,496 104,533 Management fee payable 679 667 Accrued expenses and other liabilities 3,273 1,786 Total liabilities 400,480 371,992 Equity: Preferred stock $.01 par value; 25,000,000 shares authorized, none issued or outstanding - - Common stock $.01 par value; 125,000,000 shares authorized, 15,318,532 and 15,301,946 shares issued and outstanding 152 152 Additional paid - in capital 211,983 211,729 Retained earnings 19,896 15,921 Equity attributable to common stockholders 232,031 227,802 Noncontrolling interests 10,173 10,011 Total equity 242,204 237,813 Total Liabilities and Equity $ 642,684 $ 609,805 (Dollars in thousands except share and per share amounts)