EJF Investments Ltd GBP · LSE:EJFI
EJF Investments Ltd GBP — EJF Investments — H1 2024 Earnings Presentation
31 slides from EJF Investments Ltd GBP's earnings presentation, Sep 18, 2024
Slide 1: EJF Investments Limited 2024 Half Year Results Presentation
EJF Investments Limited 2024 Half Year Results Presentation 18 September 2024 www.ejfi.com Ordinary ShareTicker: EJFI LN
Slide 2: Returns Profile
Returns Profile 5.57% 89.30% Total Return for the Period1 Total Return since Inception1 5.57% 89.30% 9.12% 11.10% Total Return for Total Return Annualised Total Annualised the Period1 since Inception1 Return since Dividend Yield1 Inception1 9.12% Annualised Total Return since Inception1 1. All figur
Slide 3: Summary of Unaudited Financials: Income Statement
Summary of Unaudited Financials Income Statement 1 January 2024 to 30 June 2024 1 January 2023 to 30 June 2023 £ million £ million Dividend Income from Subsidiary 4.0 4.0 Net gain/(loss) from Investment in Subsidiary 3.3 (13.0) Total Income 7.3 (9.0) Investment Management fee (0.4) (0.5) Other Opera
Slide 4: Summary of Unaudited Financials: Balance Sheet
Summary of Unaudited Financials Balance Sheet 30 June 2024 31 December 2023 £ million £ million Investment in Subsidiary 125.0 121.7 Cash at EJFI Level 0.4 0.7 Other Assets 0.1 0.2 Total Assets 125.5 122.6 ZDP Shares (25.0) (24.1) Other Liabilities (0.4) (0.5) Total Liabilities (25.4) (24.6) Net Ass
Slide 5: EJFI Has An Experienced External Manager
EJFI Has An Experienced External Manager Founded in 2005 EJF Capital LLC (“EJF”) is a global institutional by Emanuel Friedman and Neal Wilson alternative asset management firm with a $6.0 billion compelling strategic approach and independent Approximate total firm AUM which includes global perspect
Slide 6: Portfolio Summary
Portfolio Summary ~ 65% of EJFI’s Assets are In Regulated Debt ~ 12% of EJFI’s Assets are in the of Small Banks and Insurance Companies Management Fee Streams of EJF Affiliates ✓ Must be approved by regulators ✓ EJF manages pools of securitised debt that are senior in the waterfall to AAA/AA rated d
Slide 7: Significant Investment Exposures (as of 30 June 2024)
Significant Investment Exposures (as of 30 June 2024) CDO Equity Tranches The investments into the equity and mezzanine tranches of 7 CDOs provide the Company exposure to and Mezzanine Debt Securities underlying collateral comprising 343 debt instruments issued by 154 US banks and 34 US insurance £8
Slide 8: Alternate view of the portfolio: Risk/Reward Characteristics
Alternate view of the portfolio : Risk/Reward Characteristics Risk profile of Amount % of Estimated Estimated Net EJFI Portfolio as of 30 June 2024 (£'million) Gross assets underlying Gross Yield1,3 Yield2,3 exposure Floating & Fixed Rate Regulatory Debt issued by 82.2 65% Baa3-Ba3 17% 14% small US
Slide 9: NAV Bridge - Gross and Net
NAV Bridge - Gross and Net1 Gross NAV Net NAV 1. Expenses (net of reimbursement) allocated to each portfolio line above based on average fair value during the period. All figures are as of 30 June 2024 unless otherwise stated. Please see Legal Disclosures on pages 27-30. 8
Slide 10: Valuation, Share Price and Dividends
Valuation, Share Price and Dividends 31 December 2023 30 June 2024 31 August 2024 16 September 2024 Net Asset Value £98.0m £100.1m £97.8m £97.8m2 Valuation NAV per ordinary share¹ 160.0p 164.0p 160.0p 160.0p2 Share price discount to NAV per ordinary 36.6% 41.5% 37.8% 31.6% share¹ Ordinary Share pric
Slide 11: Regulated Debt – Why Invest in U.S. Small Banks?
Regulated Debt – Why Invest in U.S. Small Banks? The U.S. Has Three Banking Regimes. EJF’S PRIMARY INVESTMENT FOCUS1 Small Regional GSIB/Money Center Bank Assets ($ B) $0-50 $50-250 $250 + Number of banks / 4,272 27 14 Assets2 $5.5 Trillion $3.4 Trillion $17.9 Trillion Banks $100-$250 B subject to S
Slide 12: The Fundamentals of U.S. Small Banks Are Strong
The Fundamentals of U.S. Small Banks Are Strong. 11 Please see Legal Disclosures on pages 27-30.
Slide 13: Bank Fundamentals: Cost of Deposits and Credit Quality
Bank Fundamentals COST OF DEPOSITS COMPARED TO EFFECTIVE FED FUNDS1 Deposits have 7.0 become more 6.0 valuable in the higher interest 5.0 rate environment. 4.0 3.0 2.0 1.0 - 2002Q1 2009Q3 2017Q1 2000Q1 2000Q3 2001Q1 2001Q3 2002Q3 2003Q1 2003Q3 2004Q1 2004Q3 2005Q1 2005Q3 2006Q1 2006Q3 2007Q1 2007Q3
Slide 14: Bank Fundamentals: CRE and Construction Net Charge-Offs
Bank Fundamentals The banking industry has limited historical losses on completed commercial real estate exposure compared to construction and development lending. CRE AND CONSTRUCTION NET CHARGE-OFF RATIO1 6.00% 5.50% 5.00% 4.50% 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% -0.50% Complete
Slide 15: Bank Fundamentals: CRE Net Charge-Offs by Bank Size
Bank Fundamentals So far this cycle, CRE losses have been concentrated in the largest, institutional office properties, which are primarily financed by the largest banks with the ability to do a loan large enough for an urban, multi- tenant office building. CRE Net Charge-Off Ratio by Bank Asset Siz
Slide 16: Bank Fundamentals: Stress Test vs Historical Loan Losses
Bank Fundamentals Assumed Loan Loss Rate in Latest Stress Test Compared to Historical 9 Quarter Loan Losses for All U.S. Commercial Banks.1 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 1997Q3 2002Q4 2008Q1 2013Q2 2018Q3 2023Q4 1993Q1 1993Q4 1994Q3 1995Q2 1996Q1 1996Q4 1998Q2 1999Q1 1999Q4 2000Q3 200
Slide 17: Bank Fundamentals: TCE and Leverage Ratios
Bank Fundamentals Post COVID-19 TCE and Tier 1 leverage ratios have rebounded. U.S. Commercial Banks TCE and Leverage Ratios1 10.50% 10.00% 9.50% 9.00% 8.50% 8.00% 7.50% 7.00% 6.50% TCE Ratio TCE Ratio* Excl. AOCI Tier 1 Leverage Ratio 1. Source: S&P Capital IQ Pro as of 30 June 2024. 16 Please see
Slide 18: Secular Consolidation of Banks in the U.S.
Secular Consolidation of Banks in the U.S. Robust bank M&A activity and few new bank charters continues to lead to a decline in the number of banks.1 1,000 20,000 18,000 In the 1990s, 500 16,000 changes to regulations enabled Total Number of Institutions 14,000 Additions and Eliminations interstate
Slide 19: Shadow Banking System
Shadow Banking System Post the Global Financial Crisis (“GFC”), increased regulation and lower interest rates made U.S. commercial banks less competitive versus non-bank lenders, who took market share. Regulatory pressure has led to stronger underwriting standards and robust capital and liquidity le
Slide 20: Addressing Share price discount to NAV per ordinary share
Addressing Share price discount to NAV per ordinary share • The appointment of John Kingston III, who has the necessary experience, skills and expertise to lead and guide the Company in its ongoing efforts to narrow its share discount, increases engagement with the Company’s stakeholders and makes a
Slide 21: EJFI Board and Advisory Team
EJFI Board and Advisory Team Independent Board Of Directors Advisers & Service Providers to EJFI John Kingston III Auditor KPMG Chair Designate of the Board • Retired as Vice Chairman of Affiliated Managers Group Tax PricewaterhouseCoopers (NYSE: AMG) in 2015 after a 16-year career with AMG. • Busin
Slide 22: Looking Forward: CRT
Looking Forward: CRT Credit Risk Transfer (“CRT”) Transaction • In 2024, the Company began investing in small bank CRT transactions. • Although SRT/CRT transactions have been a tool utilised by banks in Europe since the GFC, CRTs are a nascent strategy in the US and with small banks in particular. S
Slide 23: Recap, Events Post Period End and Outlook
Recap, Events Post Period End and Outlook • Total Return1 for the period was 5.57%. The underlying portfolio component of this was 7.32% which was primarily driven by net gains from Securitisation and Related Investments of 6.69%. • The Company’s Total Return1 is in line with the expectation of a ca
Slide 24: Any Questions?
Any Questions? 23 Please see Legal Disclosures on pages 27-30.
Slide 25: Appendix
Appendix 24 Please see Legal Disclosures on pages 27-30.
Slide 26: CDO Equity Tranches (as of 30 June 2024)
CDO Equity Tranches (as of 30 June 2024) TFINS 2017-2 TFINS 2018-1 TFINS 2018-2 TFINS 2019-1 TFINS 2019-2 TFINS 2020-1 TFINS 2020-2 October 2017 May 2018 December 2018 March 2019 December 2019 September 2020 December 2020 Equity Tranches Amount ($ million) 13.9 17.5 13.6 12.7 13.2 13.4 8.1 Estimated
Slide 27: Enquiries Contact Information
Enquiries Contact Information EJF Investments Manager LLC Adeeb Ahmed aahmed@ejfcap.com For the Manager +44 203 752 6774 Jay Ghatalia jghatalia@ejfcap.com +44 203 752 6776 Barclays Bank PLC Dion Di Miceli / Stuart Muress / James Atkinson BarclaysInvestmentCompanies@barclays.com +44 20 7623 2323 For
Slide 28: Legal Disclosures
Legal Disclosures PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS, WHICH MAY VARY. THIS PRESENTATION AND ITS CONTENTS ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM AUSTRALIA, CANADA, SOUTH AFRICA, THE EUROPEAN ECONOMIC AREA ("E
Slide 29: Legal Disclosures
Legal Disclosures Statements of historical events are strategy and fund specific and may not apply to all products and services offered by the Company, the Manager or EJF. Certain statements may contain performance calculations which were prepared by EJF and contain assumptions about future delinque
Slide 30: Legal Disclosures
Legal Disclosures This presentation does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. The securities mentioned herein have not been, and will not be, registered under the US Securities Act of 1933, as amended (the "US Securities Act") or wit
Slide 31: Legal Disclosures
Legal Disclosures Each of Barclays Bank PLC, which is authorised by the Prudential Regulation Authority (the “PRA”) and regulated in the United Kingdom by the Financial Conduct Authority (the “FCA”) and the PRA, and Liberum, which is authorised and regulated in the United Kingdom by the FCA (togethe