- Eurocastle Releases First Half 2018 Financial Results and Announces Second Quarter Dividend of €0.15 per share
Guernsey, 10 August 2018 - Eurocastle Investment Limited (Euronext Amsterdam: ECT) today has released its financial results for the first half year ended 30 June 2018.

Net Asset Value ("NAV") of €494.7 million[1], or €9.38 per share[2] (€9.53 per share pro forma post share tender).

Normalised FFO[3] of €7.3 million, or €0.14 per share2, for the second quarter of 2018 (€0.15 per share pro forma post share tender).

Second Quarter 2018 Dividend of €0.15 per share declared on 9 August 2018 and to be paid on 31 August 2018 to shareholders of record at close of business on 17 August 2018, with an ex-dividend date of 16 August 2018.
Q2 2018 Q1 2018 H1 2018 H1 2017 € million € per share € million € per share2
€ million € per share € million € per share2

NAV 1) 494.7 9.382 505.1 9.58 494.7 9.382 630.6 10.49
Normalised FFO 3) 7.3 0.142 7.3 0.14 14.6 0.282 35.1 0.58
Distributions 2) 7.2[4] 0.15 17.4 0.33 24.64 0.48 42.1 0.70

SECOND QUARTER 2018 BUSINESS HIGHLIGHTS
doBank Financial Performance

For the first half of 2018, the doBank Group reported EBITDA of €34.1 million, up 13% over the same period last year (H1 2017: €30.3 million) following an increase in its EBITDA margin by 3% from 29% to 32%.
doBank's net profit for the first six months of 2018 was €21.0 million, up 7% over the same period last year (H1 2017: €19.7 million).

doBank Business Update
In June 2018, doBank's Board of Directors approved a project to restructure doBank into a listed servicing company, allowing for a better use of capital to support the group's growth. As part of this restructuring, doBank's banking activity will be transferred to a newly established banking entity wholly owned by the parent company. doBank views the new group structure, which it expects to come into effect in 2019 (subject to regulatory approvals), as a means to align itself with its European peers by removing significant limits to the use of its capital whilst optimising the group's financial structure.
On 1 August 2018, doBank announced that it has reached final agreement with four of the main Greek banks to manage on an exclusive basis a €1.8 billion GBV portfolio of non-performing exposures ("NPEs").

New Investment
In May 2018, the Company closed on a €7.7 million investment to acquire an interest, alongside other Fortress affiliates, in a portfolio of Italian distressed loans to a single borrower with a GBV of ~€81 million. The loans are secured by 1st lien ship mortgages.

BUSINESS HIGHLIGHTS SUBSEQUENT TO 30 JUNE 2018
Share Tender
On 2 July 2018, the Company announced a tender offer for the repurchase of up to €40 million of ordinary shares in the Company for a fixed price of €8.00 per share. The share tender, which closed on 6 August 2018, was fully subscribed and resulted in the repurchase of 5 million shares, or 9.48% of the ordinary voting shares in issue, returning capital of €40 million.
The tender was NAV and earnings accretive, increasing pro forma Q2 NFFO per share by approximately 10.5% and Q2 NAV per share by approximately 1.5%.

Share Buy-back Programme
On 2 July 2018, the Company further announced its first open market share buy-back programme, which commenced following the settlement of the share tender on 6 August 2018. Under the share buy-back programme, the Company is seeking to buy back shares up to an aggregate market value equivalent to €3.0 million. The share buy-back programme will end no later than 15 November 2018, at which point the Board will review the success of the programme and determine whether to renew the programme for a further period.

NORMALISED FFO
Normalised FFO ("NFFO") is a non-IFRS financial measure that, with respect to all of the Company's Italian Investments other than the doBank Group, recognises i) income on an expected yield basis updated periodically, allowing Eurocastle to report the run rate earnings from these investments in line with their expected annualised returns and ii) any additional gains or losses not previously recognised through NFFO at the point investments are realised. Cash flow receipts are therefore allocated by the Company between income and capital in accordance with this expected yield methodology. With respect to the doBank Group, following the IPO, the Company now recognises NFFO based on its share of doBank's reported annual net income after tax together with any gains or losses arising from the sale of its shares. The income cash flow profile of each of the Company's investments may not exactly equal the NFFO recognised by the Company each period but will do so over the life of each investment.

Normalised FFO for the Six Months Ended 30 June 2018
Average Net Invested Capital[5]
Annualised H1 2018 € Thousands Yield € Thousands

doBank Group 81,151 17% 6,875
Italian NPLs 95,515 29% 13,682
Real Estate Fund Investments 31,971 4% 662
Italian Investments NFFO before expenses 208,637 20% 21,219

Legacy portfolios 1,177
Manager base & incentive fees[6] (5,415)
Other operating expenses(2,405)
Normalised FFO 14,576
Per Share[7] 0.28

Normalised FFO for the Three Months Ended 30 June 2018
Average Net Invested Capital1
Annualised
Q2 2018 € Thousands Yield € Thousands
doBank Group 81,151 16% 3,247
Italian NPLs 86,378 29% 6,270
Real Estate Fund Investments 31,500 4% 308
Italian Investments NFFO before expenses 199,028 20% 9,825
Legacy portfolios 1,207
Manager base & incentive fees 2) (2,531)
Other operating expenses (1,203)
Normalised FFO 7,298
Per Share 3) 0.14

Following the change in classification to an investment entity as defined under IFRS 10 in July 2017, the Company does not consolidate the entities it controls and therefore fair values all of its investments (whether through subsidiaries, joint ventures or associates).

Income Statement for the Six and Three Months ended 30 June 2018 (Unaudited)
H1 2018 Q2 2018 € Thousands € Thousands Portfolio Returns
doBank Group (37,472) 4,556
Romeo NPLs 3,467 1,239
FINO NPLs 7,894 3,019
Other NPL Pools 3,068 1,986
Real Estate Funds (527) (1,247)
Fair value movement on Italian investments (23,570) 9,553
Fair value movements on residual Legacy entities 1,177 1,207
Other income - Gains on foreign currency translation and other derivatives
1 (1)
Total (loss) / income (22,392) 10,759

Operating Expenses
Interest expense 266 190
Manager base and incentive fees 5,415 2,531
Remaining operating expenses 2,139 1,073
Other Operating expenses 7,554 3,604
Total expenses 7,820 3,794
Net (loss) / profit for the period (30,212) 6,965
€ per share3 (0.57) 0.13

For the six months ended 30 June 2018, the total net loss reported was €30.2 million, or €0.57 per share. Excluding the €37.5 million loss that arose from the doBank investment, which is marked-to-market based on doBank's closing share price, Eurocastle recognised a €7.3 million profit, or €0.14 per share. For the three months ended 30 June 2018, the Company recorded a profit of €7.0 million, or €0.13 per share of which €4.6 million arose from the doBank investment after taking into account the annual dividend received in May 2018.

Balance Sheet and NAV Reconciliation as at 30 June 2018 (Unaudited)
Italian Investments€ ThousandsCorporate € Thousands Total € Thousands
Assets
Cash and cash equivalents - 149,048 149,048
Other assets - 23 23

Investments:
doBank Group 226,935 - 226,935
Romeo NPLs 49,743 - 49,743
FINO NPLs 5,249 - 5,249
Other NPL Pools 43,193 - 43,193
Real Estate Funds 27,618 - 27,618
Other net assets of subsidiaries (residual legacy entities) - 149 149
Total assets 352,738 149,220 501,958

Liabilities
Trade and other payables - 4,568 4,568
Manager base and incentive fees - 2,710 2,710
Total liabilities - 7,278 7,278
Net Asset Value 352,738 141,942 494,680
FINO deferred purchase price commitment 64,680 (64,680) -
RE Fund Investment V remaining unfunded estimated investment 419 (419) -
NAV (segments adjusted for outstanding commitments)[8] 417,837 76,843 494,680
NAV (€ per share)[9] 7.93 1.45 9.38

Taking into account the €40 million share tender that settled on 6 August 2018, which resulted in €0.15 per share of accretion in the Company's NAV, the Corporate NAV segment (after adjusting for outstanding commitments) would be €36.8 million and the total Company NAV would be €454.7 million, or €9.53 per share.

ADDITIONAL INFORMATION
For additional information that management believes to be useful for investors, please refer to the latest presentation posted on the Investor Relations section of the Company's website, www.eurocastleinv.com. For investment portfolio information, please refer to the Company's most recent Financial Report, which is available on the Company's website (www.eurocastleinv.com).

EARNINGS CALL INFORMATION
Eurocastle's management will host an earnings conference call at 2:00 P.M. London time (9:00 A.M. New York time) later today. All interested parties are welcome to participate on the live call. You can access the conference call by dialling first +1-800-215-5243 (from within the U.S.) or +1-330-863-8154 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference "Eurocastle Second Quarter 2018 Earnings Call" or "conference ID number 9975518".

A webcast of the conference call will be available to the public on a listen-only basis at www.eurocastleinv.com. Please allow extra time prior to the call to visit the site and download the necessary software required to listen to the internet broadcast. A replay of the webcast will be available for three months following the call.

For those who are not available to listen to the live call, a replay will be available until 11:59 P.M. New York time on Monday, 10 September 2018 by dialling +1-855-859-2056 (from within the U.S.) or +1-404-537-3406 (from outside of the U.S.); please reference access code "9975518".