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Great Ajax Corp (AJX -3.28%)
Q4Â 2018 Earnings Conference Call
March 05, 2019, 5:00 p.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
See all our earnings call transcripts.
Prepared Remarks:
Operator
Good day, everyone, and welcome to the Great Ajax Corp. Fourth Quarter and Year-End 2018 Financial Results Conference Call. All participants will be in listen-only mode. (Operator Instructions) . After today's presentation, there will be an opportunity to ask questions and please note that today's event is being recorded. I'd now like to turn the conference over to Lawrence Mendelsohn, Chief Executive Officer. Please go ahead.
Lawrence A. Mendelsohn -- Chairman of the Board Of Directors And Chief Executive Officer
Thank you very much. Thank you, everybody, for making the time to join our Great Ajax fourth quarter and year-end 2018 conference call. I want to have everybody take a quick look at Page 2 or forward-looking statement disclosure. And with that , we can move on into the presentation. Before I get to Page 3, I just want to give you a brief introduction. Overall, we had a very successful net asset value and intrinsic value build in quarter in many facets of our business and our investments as well.
We bought loans at good prices and good price to collateral values, while at the same time expanding our seller base. We added nearly $600 million in co-investment joint ventures with accredited institutional partners. We closed three securitizations with good pre-arranged executions both in cost of funds and advance rates. And these were completed despite the large hiccup in structured credit markets in November and December.
The joint ventures also have more value factored in just income. We own a significant percentage of our servicer and our servicer's value increases materially from servicing loans for these joint ventures. Other than noise from interest expense on pre-funded debt for our December acquisitions to lock in low cost of funds and certainty and our typical expected REO impairments as required by GAAP and a little bit of noise from a few loans and our 2014 NPL acquisitions, all of which I'll discuss during this call, the quarter was all positive and this continues to be the case in first quarter of 2019 as well.
With that, let's jump right into Page 3. Our loan sourcing network is really, really, really important, I can't understate it to our ability to acquire the types of loans we want and at the prices that we want. Our sellers in the past quarter, and in the coming quarter, our sellers, our banks, their loan originators as well as funds and they sell for many different reasons and we have long relationships with most of them.
We analyze a large amount of data to determine the target loan characteristics and to develop a pattern of algorithms for both pricing loans and servicing loans. We own a 20% interest in our manager as well and most recently in Q4 third parties have reached out to the manager regarding providing analytics on loans-as-a-service, and that would be good for our 20% interest in the manager as well.
Our affiliated servicer -- servicer's performance has created significant brand value and has led to institutional investors coming to us for loan purchase joint ventures and third-party servicing. In Q4, we increased JVs by nearly $600 million and we will be close to that number in Q1 2019 as well. This materially increases the servicer's value. We own 20% since our investment in Q1 and Q2 of 2018 in the servicer and servicing portfolio was on track to increase by 50%.
We use moderate non-mark-to-market leverage. Asset leverage for Q4 2018 was 3.2 times and asset base leverage only was 2.9 times. Page 4 highlights also some detail on some of the noise. There're several important pieces to the per-share earnings map for Q4 of 2018. First , probably the most important piece and that we spoke a bit about on our November 2018 call. We knew that we are going to have significant increase in loan purchases and then joint venture loan acquisitions in late December of 2018. Early in the quarter, many of our regular loan seller customers have given us a heads-up, and by mid-October, we are already under contract for $500 million plus unpaid principal balance subject to due diligence.
We decided we didn't want to wait to take November or December structured credit market to risk of execution. So we added asset base debt in early Q4 and did a small convertible bond add-on in early November to effectively pre-fund much of our December acquisitions. Because of the pre-funded debt, we have at one point carried over $100 million of cash in mid-Q4.
This means we had more interest expense relative to the asset growth until we actually would close the purchases of the assets. We also, in our 2018-F securitization, pre-funded one of the purchases, $90 million worth our share was approximately $20 million, a month ahead of time to lock in the cost of funds and bond structure. This pre-funded pool didn't close till January. So, we had a month of interest expense on the pre-funded account without any related loans.
We basically made a decision to borrowing early at pre-December cost would be much cheaper in the long run, but would distort interest income versus interest expense for one to two months. Functionally, it was a debt funding hedge, but all booked in one quarter rather than over time. Combined, these borrowings increased Q4 interest expense by approximately $0.03 to $0.04 per share with no related purchased loans until December.
Second, our quarterly our REO impairment was approximately $700,000 or $0.037 per share. As we have mentioned on previous quarterly calls, REO impairment happens first under GAAP and any gains happen second. Our REO portfolio continues to have expected future gains net and we have decided to keep some of our small multifamily REO that is in specific urban markets and that also delays gains.
Additionally, any foreclosure that results in the third party property sale rather than becoming an REO is accounted as a loan pay-off in pool accounting under GAAP and does not offset any REO impairments in our income statement. In our portfolio, third-party sales happened approximately 50% of the time on average. In Q4 2018, we had 38 foreclosure outcomes, of which 18 ended up is third-party sales and 20 became REO. The profits of the third-party sales go through interest income, not in that current quarter but over the life of the loan pool. It doesn't even get accelerated and it's not accounted for in REO gains or losses.
There is a pattern though in our REO impairments. A small number of REO account for the overwhelming majority of impairment. They typically occur in higher end properties in New Jersey and New York, where borrowers have just walked away from maintenance and where property value has been significantly impacted by changes in deductibility of property tax, or they are in rural second-home locations where borrowers just walk away, just about all of this quarter's impairments match the New York, New Jersey specification.
The third piece, we took an impairment of $0.042 per share on the remaining $23 million UPB from our $100 million plus purchases of NPLs in the fourth quarter of 2014 and early 2015. These impairments are driven by very small remaining pool sizes for pool accounting, in which cash flow fluctuations on individual loans is not offset by the remaining pools.
As a percentage of income from these pools over time, this is a tiny fraction. One loan secured by a condominium in downtown Miami that has some internal damage accounts for nearly half of the total impairment. We are in litigation with the insurance carrier regarding the insurance claim and with the building association as well and we hope to recoup (ph) some or all of this over time.
As our portfolio performance overall indicates and we'll see this in a later slide. This impairment is not reflective of our overall portfolio. In fact, we are seeing the opposite. Loan performance has significantly outpaced expectation. But we don't write to get to write up the market value of our loans, we only get to write it down. From a GAAP perspective, if we are to account on a 100% mark-to-market basis, similar to many other companies that own securities in the mortgage REIT space. The aforementioned impairments we be blended into our large built-in gain on our loan portfolio. We choose not to mark loans to market, because loans unlike securities do not have readily available dependable marks.
As a result, we get to take charges for the negative, but we don't get to write up for the positive. Walking back through a comparable quarter-to-quarter earnings pathway, these three items together are approximately $0.12 per share, which normalizes EPS to about $0.46 to $0.47 per share.
Some highlights of the quarter. We formed $586.2 million in joint ventures and we kept our interest of $126.5 million in the varying classes. We created the joint ventures in structured credit format, so that our joint venture partners can put them in any investment bucket. They want and get daily marks. One thing I want to say though is interest income from our portion of the joint ventures shows up in income from securities, not from loans.
Also since servicing fees for securities are paid out of the securities waterfall, our interest income from securities is net, not gross of servicing fees, unlike loans. As a result, as our JVs grow, it causes interest income to appear lower by the amount of the servicing fees. In Q4, this difference is about 77 basis points on average invested amount in securities. The Q4 JVs all closed in December and we are on the balance sheet for an average of 18 days. Taxable income was $0.23 a share. Fourth quarter taxable income is usually a bit lower than other three quarters for two reasons. Number one, there is a lot fewer foreclosures in the month of December than any other month during the year on purpose. And two, there's far fewer payoffs in the month of December than any other month of the year as well.
From a cash flow perspective, we collected $57.1 million of cash from our portfolio. We held $55 million of cash at December 31. Our December 31, '18 cash on hand was approximately the same as our September 30 cash on hand. However, we have invested approximately $200 million in between.
If we jump to Page 5, our portfolio overview. You'll see on the left hand side the reperforming loans are about 97% of our loan portfolio and non-performing loans about 3% and that number is -- that percentage comparison is pretty much the same as it was last quarter. On the property side, REO is principally held for sale, turns into cash over a relatively short period of time.
REO increase from Q3 to Q4, but not because of more foreclosures or fewer REO sales. Instead, we purchased four commercial properties for approximately $9 million. One thing to keep in mind is, as our property portfolio grows from purchases of small commercial properties, you will see an increase in non-interest income and growth of interest income will slow.
On Page 6, we look at our reperforming loan portfolio. One thing to take a look at is our purchase price to property value at December 31, 2018 was 60.1% and our purchase price on our portfolio relative to UPB (ph) is 82.4%. That's pretty much the same number as it was a year ago and pretty much the same number as it was two years ago.
We continue to buy lower LTV loans with overall RPL purchase price of approximately 60% of property value. The price to property value does not include home price appreciation, if any, since our acquisition. Just like prefunding our December acquisitions early in the quarter, we continue to play offense and defense when buying loans.
On the NPL side, NPLs have been declining in absolute dollars invested in our loan portfolio. Although we did buy some NPLs in our 2018-B transaction in the joint venture in June of 2018. For our NPL portfolio, purchase price to property value is approximately 56%. As you might imagine, higher LTV NPLs become REO sooner and lower LTV NPLs become REO later, if at all, because lower LTV NPLs are far more likely to come RPLs or to pay off as NPLs.
On Page 8, our portfolio concentration has not really changed other than California continues to represent the largest segment of our portfolio, primarily Los Angeles, Orange and San Diego counties. We're seeing consistent payment and performance patterns in those markets, particularly in California urban centers. We also have seen consistent prepayment, especially for certain borrower characteristic subsets in the California market.
The California percentage of our portfolio increased in late Q4, as our 2018-G joint venture of $240 million was 89% California loans. Page 9 is a very, very, very important chart and to me the most striking. First, $1.15 billion of our portfolio is 12 consecutive payments or better. Approximately $1.2 billion is seven consecutive payments or better. For the loans that we buy and the way our servicer manages these loans, our data suggests that once a loan becomes 7 of 7, there's a 91% to 93% probability that it becomes 12 for 12. Approximately 77% of our loans are 12 of 12 or better and approximately 83% are 7 of 7 or better. Keep in mind that at acquisition, 10% were 12 of 12 or better. So, the intrinsic value of loans has increased on average extremely materially since acquisition. 10% 12 of 12 going to 77% 12 of 12. In addition to increasing cash flow and NAV, the significant outperformance of our loans also lowers asset base cost of funds over time. We've seen this from our securitizations and our JVs. We did three in Q4 and we did two in Q3 of '18.
We've been able to increase advance rates, lower cost of funds and have even have loan purchase prefunding accounts for loans that don't yet exist. Asset level debt cost in Q4 was the same as Q3, even though structured credit markets were quite stressed in the second half of Q4. So, the portfolio migration and the intrinsic value it implies in terms of built-in NAV gain on our loan portfolio is pretty striking to me.
Page 10, subsequent events. First, on the left hand side, acquisitions closed since 12/31. The most notable is the $60 million of -- that was purchased as NPLs. It was pre-funded in our 2018- F joint venture securitization in early December. It was pre-funded as approximately $100 million portfolio, but post due-diligence, it ended up being a $60 million portfolio and the remaining money was returned to ourselves and our joint venture partners on January 25th.
Under contract, we had a very busy Q4 and you can see it continues in Q1. We already had 15 transactions either closed or in process and are evaluating four to five others. One very consistent pattern, however, is low price to collateral value. In RPLs, 55.4% to collateral value. In NPLs, 49.9% to collateral value, and small balance commercial 54.5% of collateral value.
The other thing I would say is the collateral values typically in market-by-market are in deciles 3.75 to 6.75 in each particular location. We're also in the due-diligence phase of three more small balance commercial properties, one in Atlanta, one in Baltimore and one in Raleigh. We also announced a $0.032 per share dividend that we paid on March 29 to stockholders of record of March 15.
Page 11. This page gets more and more complicated for a number of reasons. One, the more joint ventures we invest in, the more securities we own, even though they're really the economics of loans, they don't show up that way for accounting purposes. Yields on loans are net of impairment of $800,000 when you look at the average loan yield, so that 8.5% is net of that $800,000, so actual yield would be higher. It's -- and yield on debt securities that you see is net of a servicing fee of 0.77% (ph), because debt securities you receive your payments after servicing is paid and loans you receive your payments before the servicing is paid. The more JVs we participate in with our institutional partners, the more distorted this ratio becomes, number one. Number two, as you can see, our JVs increased by approximately $120 million in Q4, although not on average, but on ending and that number would -- we expect to -- we anticipate will grow dramatically also in Q1 of 2019. So, this table will become a little more distorted than it is this quarter, which is already more so than last quarter.
If you notice average total average debt cost, even though this more debt was unchanged and return on average equity net of impairments, this decline because of the interest expense increased as we increase debt to pre-fund assets one to two months before purchase, as well as the additional $15 million of convertible bonds we added in early November. Ending leverage ratio was higher as well both from an additional asset base debt and for the convertible add-on, but again the average debt cost was unchanged.
Page 12 is reconciliation of page 11 to all the consolidation requirements and Page 13 and 14 are financials.
And with that, I'm happy to turn over to questions that anybody might have.
Questions and Answers:
Operator
And we will now begin the question-and-answer session. (Operator Instructions) Okay. And today's first questioner will be Tim Hayes with B. Riley FBR. Please go ahead.
Tim Hayes -- B. Riley FBR. -- Analyst
Hey, good evening, Larry. My first question, can you just comment on the pace of JVs going forward? You touched on 1Q so far. But is this the new normal going forward? And can you also touch on where the supply of loans is coming from?
Lawrence A. Mendelsohn -- Chairman of the Board Of Directors And Chief Executive Officer
Sure. The supply of loans is coming from -- let me do question two first. Supplies are coming from three different places. Number one is banks. And banks, I'll break out into two different reasons. One is large banks who still have significant RPLs on their balance sheet 10 years later and who see that home price appreciation has allowed them to be able to sell loans and recover the reserves they took many years ago. They don't get back par, but they are able to recapture reserves and get yield out best.
The other source from banks is the consolidation you're seeing in the banking sector. Almost every merger has target bank as a target, not that buying bank, acquiring bank once target bank to take certain assets off their balance sheet as part of the sale. And as a result, we are asked to take a look at those target bank portfolios to provide liquidity around the acquisition closing. Their buying bank when it acquires the target bank effectively gets to take a one-time charge and they can put any losses that selling bank, the target from selling those into that one-time charge. So, those are kind of the bank reasons. We've been told by the banks, obviously consolidation is continuing at a pretty rapid pace, but we've been told by the larger banks as well that they expect to be extremely large sellers at least for another 18 months. So, that will be a significant amount of supply.
Number two is originators. We buy a fair amount of chunks, we don't -- not in $100 million slugs, but in smaller slugs of what I'll call agency kick-out, where borrower A got a Fannie May loan, but in the 30-day period where originator was going to sell to Fannie Mae borrower A when he got a car loan and his debt ratio no longer works for Fannie Mae loan and we're able to buy loans like that.
And then number three is liquidity provider for funds. We have a lot of sellers who come to us for whatever reason, who need specific dollar prices or specific amounts of proceeds and they might send us $250 million pool of loans and say, can you get to a $91 price and get the $80 million of proceeds. And then we can work through those loan pools and be able to buy, put together, a subset carve (ph) of the pool to meet the requirements of the seller, because we're permitting capital entity, we're not seeing as competitors for fundraising for a lot of these sellers. And so they come to us.
In terms of -- will we see JVs continue. You will see JVs continue at this pace, I think, for a while. We've had a number of institutional investors tell us how much they would like to buy through us the joint ventures. If we were to sum the number, I don't know if there's that many loans. The -- so, we would anticipate that this pace will continue at least for a few more years would be my guess based on conversations we've had in investors, but there's no way we could satisfy the demand of all the investor -- the institutional investors that have reached out to us, let me put it that way. It's not something where we can go find $5 billion a quarter -- $3 billion a quarter, but we can find $400 million, $500 million , $600 million , $700 million.
Tim Hayes -- B. Riley FBR. -- Analyst
Got it. That's all really helpful. And I'm going to keep building off of that last part there. Of the three -- just the three JVs this quarter, were those across three different separate institutional partners, were they all the same partner and can you maybe talk about how many partners you currently have and the amount of potential partners you're talking to today?
Lawrence A. Mendelsohn -- Chairman of the Board Of Directors And Chief Executive Officer
Sure. We have four partners that we've already done transactions with, all the ones in December with one partner and -- but we've had four that we've done transactions with and we have two others who have reached out to us and we have made -- that we have also made large-pool bids both with the agencies and some large banks as well.
Tim Hayes -- B. Riley FBR. -- Analyst
Got it. Okay. And so I assume that the loans you've agreed to acquire so far in the first quarter that you just mentioned and identified that would be acquired to JVs are all going toward new JVs and not any of the existing ones.
Lawrence A. Mendelsohn -- Chairman of the Board Of Directors And Chief Executive Officer
The small-balance commercial loans and properties are all around the, if you see acquisitions closed, the $8.5 million of RPLs are not in the JV. The small-balance commercial loans are not in the JV and acquisitions under contract, if you see the $299 million of RPLs, about, let me do the math, $35 million plus -- about $270 million of those are in joint ventures and about $30 million are not and then NPLs, all of the NPL, one transaction is in joint venture.
Tim Hayes -- B. Riley FBR. -- Analyst
Okay. Thanks for the color there. And then you talked about the performance of the loans and it sounds like your expectation is for cash flow to continue increasing despite the seasonal headwinds in the fourth quarter and other blips (ph) there.
Lawrence A. Mendelsohn -- Chairman of the Board Of Directors And Chief Executive Officer
Yes, it's really -- in October, November, cash flow payoffs were the same. It's really just payoff slowdown in December and that happens every year. And I guess people are buying gifts rather than paying off their mortgage.
Tim Hayes -- B. Riley FBR. -- Analyst
I guess that works for some, but how do you -- my question there is, how do you see the dividend trending in 2019 and how do you think about dividend coverage, because it seems like you would have been well within the rerequirements without the special this year, but you paid it anyway. And so was your goal to payout near or 100% of taxable income?
Lawrence A. Mendelsohn -- Chairman of the Board Of Directors And Chief Executive Officer
I think we would expect taxable income to increase over the course of the year and to be probably ahead of last year's actual income, particularly given where the value is on some of these loans. I would imagine that sometime in 2019 similarly to 2018, we will sell some loans or at least look at selling some loans. If you remember, we sold about $90 million of loans in September of 2018 and had about $5.5 million gain, of which taxable was about $1 (ph) million -- about $2.5 million of it and I would anticipate that we will look at selling loans again probably not in Q1, but during 2019. It's when we look at the migration, 24 of 24 NBA current loans are basically par loans and -- in today's world, and we would look at selling some side by side to doing rated transactions and funding cheaply with debt over long time and kind of do a comparison.
Tim Hayes -- B. Riley FBR. -- Analyst
Okay. Got it. That's helpful. Thanks, Larry. I'm going to hop back in the queue for now.
Lawrence A. Mendelsohn -- Chairman of the Board Of Directors And Chief Executive Officer
Sure.
Operator
(Operator Instructions) And our next questioner today will be Steve DeLaney with JMP Securities. Please go ahead.
Steven DeLaney -- JMP Securities LLC -- Analyst
Thanks. Hi, Larry, How is it going?
Lawrence A. Mendelsohn -- Chairman of the Board Of Directors And Chief Executive Officer
Good. How are you, Steve?
Steven DeLaney -- JMP Securities LLC -- Analyst
I'm great. Thanks. Wanted to ask you about the small-balance properties. I know it's not a lot of dollars, but obviously it -- you know it kind of ties in definitely with the small-balance lending as well in terms of your valuation analysis. The four you bought in the fourth quarter and the three that you're looking at and it appears they're sort of in the $2 million to maybe $3 million price range. Could you talk about the property types, I mean are they mostly multifamily, and as you're buying these, what kind of occupancy situation are you having to get in and put some cap improvement in and then lease or are you buying things that have leases in place? Thank you.
Lawrence A. Mendelsohn -- Chairman of the Board Of Directors And Chief Executive Officer
We are -- sure. It's very much like our small-balance commercial loan strategy, similar locations, about six or eight markets, very urban kind of with what I'll call four-year to 10-year horizon, not what's the neighborhood changing, right now, but what's the next neighborhood to emerge. So think of for people in New York, think of Bedford-Stuyvesant 12 years ago rather than Bedford-Stuyvesant three years ago or four years ago.
Steven DeLaney -- JMP Securities LLC -- Analyst
Right.
Lawrence A. Mendelsohn -- Chairman of the Board Of Directors And Chief Executive Officer
And so we're looking for those neighborhoods and it's based on a bunch of analytics we run, based on job growth and demographics and age and things like that. The typical properties either going to be a small multi-family somewhere between 8 and 40 units depending on the market, in some places 40 units is $3 million or $2 million, in some places 40 units is $5 million, some places 40 units is $25 million, right. But for us, it's -- they're going to be between 8 and 40 units, I would say most of them are probably less than 25 units. We are buying them substantially leased, but with what we would consider to be below-market lease, but also properties that have -- need a little bit of love, but not a lot of love, is the way I would describe them that they're really location-driven and it's kind of what I'll call an alpha investment based on location as opposed to just straight income today.
Steven DeLaney -- JMP Securities LLC -- Analyst
Got it. And would kind of target cash-on-cash return do you have when you're looking at that kind of property?
Lawrence A. Mendelsohn -- Chairman of the Board Of Directors And Chief Executive Officer
Depending on what it is and how tenant dependent it is. We buy them anywhere between a 5% and an 8% cap.
Steven DeLaney -- JMP Securities LLC -- Analyst
Got it. It's a cap rate. Okay. Well, thanks for the comments, Larry.
Lawrence A. Mendelsohn -- Chairman of the Board Of Directors And Chief Executive Officer
Some of it depends on what we think the upside to the property is versus on a relative comparison basis versus some...
Steven DeLaney -- JMP Securities LLC -- Analyst
Yeah, understood.
Lawrence A. Mendelsohn -- Chairman of the Board Of Directors And Chief Executive Officer
Yep.
Steven DeLaney -- JMP Securities LLC -- Analyst
Thank you.
Operator
And our next questioner today will be Kevin Barker (ph) with Piper Jaffray. Please go ahead.
Pierce Dever -- Piper Jaffray -- Analyst
Hi. This is actually Pierce Dever on for Kevin. Lot of my questions have been answered, but just maybe a few quick ones. As it relates to the February securitization debt sales. I was wondering what your net exposure to those securities are following the sale.
Lawrence A. Mendelsohn -- Chairman of the Board Of Directors And Chief Executive Officer
Say that again. I'm sorry.
Pierce Dever -- Piper Jaffray -- Analyst
So, on the debt securities -- the selling debt securities...
Lawrence A. Mendelsohn -- Chairman of the Board Of Directors And Chief Executive Officer
Oh, yeah, that we -- the debt securities we sold in February?
Pierce Dever -- Piper Jaffray -- Analyst
Right. I was just curious what the net exposure to those securities are following the sale?
Lawrence A. Mendelsohn -- Chairman of the Board Of Directors And Chief Executive Officer
Sure. So we -- in our 2000 -- one of the things about our joint ventures is, we create three classes of bonds. We create our joint ventures in what I'll call an ABC structure, where the A is just the senior bond, the B and C are stapled together. the B is a mezz with an out-sized (ph) coupon, we've put a 5.25% (ph) coupon on the B and the C is the equity certificate. And in -- we, as the risk retainer in the JV, are always required to hold at least 5% of all three classes. But for example, in our 2018 E and F transactions, we kept 20%, but then in early February, we sold 15% of our Class A bonds in those two securitizations at approximately -- at a premium to the issuance price. So as a result, they're actually selling them lower to the cost of funding to us, but they're just as if we issued basically senior bonds by selling them rather than holding them. So there's no -- there will be no different than if we just sold them in the first place as issued as opposed to kept 20% and then sold them later. One of the ways we structured the JVs is we and our institutional partners can do anything we want with the class As, we want to go sell and we can, we want to borrow against and we can, but the class B and Cs, we have a right of first refusal on the institutional partners bonds if they ever want to sell.
Pierce Dever -- Piper Jaffray -- Analyst
Got it. That's helpful.
Lawrence A. Mendelsohn -- Chairman of the Board Of Directors And Chief Executive Officer
And we retained all the call rights of the bonds without solely.
Pierce Dever -- Piper Jaffray -- Analyst
Okay. That's helpful. And then are you able to quantify the potential incentive fee that the manager could earn if -- I think if the returns exceed, I think, at 8%.
Lawrence A. Mendelsohn -- Chairman of the Board Of Directors And Chief Executive Officer
The answer is, yes. It's not particularly material. It's probably about -- right now, it's perhaps earned somewhere between $100,000 and $130,000.
Pierce Dever -- Piper Jaffray -- Analyst
Okay. Great. Thank you.
Operator
(Operator Instructions) And there look to be no further questions. So, this will conclude our question-and-answer session. I would now like to turn the conference back over to Lawrence Mendelsohn for any closing remarks.
Lawrence A. Mendelsohn -- Chairman of the Board Of Directors And Chief Executive Officer
Great. Thank you. Thanks, everybody, for joining us on our fourth quarter and year-end 2018 conference call. Feel free to reach out to us if you have any additional questions over the coming days or weeks. We're always happy to talk about Great Ajax and the manager and the servicers' relationship and expertise, and hope everybody has a good night and will talk to you soon. Take care.
Operator
The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect your lines.
Duration: 37 minutes
Call participants:
Lawrence A. Mendelsohn -- Chairman of the Board Of Directors And Chief Executive Officer
Tim Hayes -- B. Riley FBR. -- Analyst
Steven DeLaney -- JMP Securities LLC -- Analyst
Pierce Dever -- Piper Jaffray -- Analyst
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