Core Insights - The individual has a B.Tech degree in Mechanical Engineering and nearly twenty-five years of experience in the oil and gas sector, primarily in the Middle East [1] - The investment strategy is informed by traits of efficiency, carefulness, and discipline learned from the industry [1] - There is a sustained interest in U.S. equity markets, focusing on technology, energy, and healthcare sectors [1] - The investment approach has evolved from growth investing to a blend of value and growth, emphasizing the durability of competitive advantages and consistent free cash flow generation [1] - The philosophy includes a conservative orientation, seeking to minimize downside risk while looking for upside potential, especially as retirement approaches [1] - Recent rebalancing towards income-generating assets such as dividend-paying equities and REITs reflects a shift in investment focus [1] - Investing is viewed as a means to achieve peace of mind, not just high returns [1] - The individual aims to engage with a community of investors interested in the intersection of business fundamentals and intelligent investing [1] - There is a commitment to investing in ecologically sensitive businesses, indicating a focus on sustainable investment practices [1]

Have you ever had that friend who shows you something they bought, and they just can't help themselves from declaring how expensive it was? I bought this wine, and it was $1,000/bottle! So, you're expected to be impressed, and when you sip it, youRida Morwa is a former investment and commercial Banker, with over 35 years of experience. He has been advising individual and institutional clients on high-yield investment strategies since 1991. Rida Morwa leads the Investing Group High Dividend Opportunities whe ...

Group 1 - The article discusses the expertise of Rida Morwa, a former investment and commercial banker with over 35 years of experience, focusing on high-yield investment strategies since 1991 [1] - Rida Morwa leads the Investing Group High Dividend Opportunities, which emphasizes sustainable income through various high-yield investments with a targeted safe yield of over 9% [1] - The service includes features such as a model portfolio with buy/sell alerts, preferred and baby bond portfolios for conservative investors, and regular market updates [1] Group 2 - The article mentions that recommendations are closely monitored, and buy/sell alerts are issued exclusively for members [3] - It highlights the collaborative nature of the service, emphasizing community and education in investment practices [1][3]

Group 1 - The article does not provide any specific content related to a company or industry [1]

Group 1 - The article does not provide any specific content related to a company or industry [1]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported GAAP net income of $48 million, or $0.34 per diluted share, with distributable earnings of $42 million, or $0.30 per share [8] - Run rate distributable earnings were $32 million, or $0.23 per share, slightly below the dividend level due to the timing of capital redeployment [8][9] - The book value per share, excluding general CECL allowance and depreciation, was $12.73 at the end of the quarter [10] Business Line Data and Key Metrics Changes - The company committed to an additional $1 billion of new loans during the quarter, bringing year-to-date originations to $3 billion [4][10] - Residential loans represent the largest underlying property type in the portfolio at 31% [5] - The loan portfolio's carrying value totaled $8.3 billion, with a weighted average unleveraged yield of 7.7% [10][12] Market Data and Key Metrics Changes - The company is the most active alternative lender in Europe, benefiting from a fragmented lender universe and healthy fundamentals across property types [4] - Repayments during the quarter totaled $1.3 billion, bringing year-to-date repayments to $2.1 billion [5][10] - The weighted average risk rating of the portfolio remained unchanged at 3.0 [11] Company Strategy and Development Direction - The company is focused on capital rotation out of focus assets, which is expected to have a meaningful impact on earnings going forward [6][9] - The strategy includes diversifying the lender base and expanding sources of capital, with a new secured borrowing facility established in Europe [6][12] - The company aims to maintain leverage levels around four times when fully deployed and capital efficient [17][38] Management's Comments on Operating Environment and Future Outlook - Management noted improved operating performance in the broader real estate market, with capital markets fully open and a healthy pace of repayments expected to continue [22][23] - The company anticipates bringing The Brooke to market in late spring or early summer 2026, with hopes of closing a transaction in late Q3 or early Q4 [16][20] - Management expressed optimism regarding the office portfolio, noting increased leasing momentum in key markets like New York and London [44] Other Important Information - The company recognized a $17.4 million gain from a litigation settlement, contributing to an increase in book value per share [10] - Liquidity at the end of the quarter was strong at $312 million, with leverage down from 4.1 times to 3.8 times [12] Q&A Session Summary Question: Update on focused assets and timeline for monetizing The Brooke and 111 West 57th Street - Management expects to finish selling remaining units at 111 West 57th Street in early 2026 and plans to bring The Brooke to market in late spring or early summer 2026 [15][16] Question: Thoughts on leverage levels for the business - Management indicated a target leverage level in the mid-threes, with a focus on originating senior loans and maintaining capital efficiency [17] Question: Update on Liberty Center asset - Management is involved in the bankruptcy process of the parent company of the movie theater at Liberty Center and expects to assess timing for an exit in late Q1 or early Q2 of next year [20][21] Question: Elevated repayment levels in Q3 - Management attributed the increase in repayments to open capital markets and improved operating performance across asset classes, expecting a healthy pace of repayments to continue [22][23] Question: Update on office portfolio trends - Management noted positive leasing momentum in key markets and increased capital market activity for office deals [44]

Financial Performance - Net income available to common stockholders was $48 million, or $0.34 per diluted share[12] - Distributable Earnings were $42 million, or $0.30 per diluted share[12] - Declared common stock dividends of $0.25 per share, implying a dividend yield of 9.9%[12] Loan Portfolio - Total loan portfolio was $8.3 billion with a weighted-average unlevered all-in yield of 7.7%[12] - 98% of the portfolio consists of first mortgages and 98% is floating rate[12] - $1.0 billion in new loan commitments were closed in Q3, with $807 million funded at close, part of $3.0 billion committed year-to-date with $2.2 billion funded at close[12] - Loan repayments and sales totaled $1.3 billion in Q3, contributing to $2.1 billion year-to-date[12] Capitalization and Liquidity - Total common equity book value ended the quarter at $1.8 billion[12] - Total liquidity at the end of the quarter was $312 million, including $259 million in cash[12] - A new secured credit facility was closed, providing an additional $280 million of borrowing capacity[12] - Borrowing capacity under the revolving credit facility increased by $115 million to $275 million, extending the maturity date to August 2028[12] REO Overview - Total REO (Real Estate Owned) held for investment is valued at $846 million, with $403 million in debt, resulting in $443 million in equity[20]

Core Viewpoint - Apollo Commercial Finance (ARI) reported quarterly earnings of $0.30 per share, significantly exceeding the Zacks Consensus Estimate of $0.05 per share, representing an earnings surprise of +500.00% [1][2] Financial Performance - The company posted revenues of $40.04 million for the quarter ended September 2025, which was 7.24% below the Zacks Consensus Estimate and a decrease from $47.04 million in the same quarter last year [2] - Over the last four quarters, the company has surpassed consensus EPS estimates two times but has not beaten consensus revenue estimates [2] Stock Performance - Apollo Commercial Finance shares have increased by approximately 16.6% since the beginning of the year, compared to a 17.2% gain for the S&P 500 [3] - The stock currently holds a Zacks Rank of 4 (Sell), indicating expectations of underperformance in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.05 on revenues of $44.05 million, while for the current fiscal year, the estimate is $0.80 on revenues of $169.76 million [7] - The outlook for the industry, specifically the REIT and Equity Trust sector, is currently in the top 39% of Zacks industries, suggesting potential for better performance compared to lower-ranked industries [8]

Financial Performance - Net income available to common stockholders was $48 million, or $0.34 per diluted share[7] - Distributable Earnings prior to realized loss on investments were $32 million, or $0.23 per diluted share; total Distributable Earnings were $42 million, or $0.30 per diluted share[7] - The company reported a net income available to common stockholders of $47,723,000 for Q3 2025, compared to a net loss of $94,617,000 in Q3 2024[42] - The diluted earnings per share for Q3 2025 was $0.34, recovering from a loss of $0.69 in Q3 2024[42] - The total operating expenses for the nine months ended September 30, 2025, were $114,522,000, down from $120,627,000 in the same period of 2024[42] Dividends and Shareholder Returns - Declared common stock dividends of $0.25 per share, resulting in a dividend yield of 9.9%[7] - Q3 Dividend Yield on Book Value Per Share was 8.2%[11] Loan Portfolio and Commitments - Total loan portfolio reached $8.3 billion with a weighted-average unlevered all-in yield of 7.7%, consisting of 98% first mortgages and 98% floating rate[7] - Committed $3.0 billion to new loans year-to-date, with $1.0 billion in Q3; loan repayments and sales totaled $2.1 billion year-to-date, including $1.3 billion in Q3[7] - The total senior loan portfolio amounts to $8,189 million, with $1,035 million in unfunded commitments[28] - The residential loan segment totals $2,391 million, with $103 million in unfunded commitments[26] - The office loan segment totals $1,925 million, with $221 million in unfunded commitments[27] - The hotel loan segment totals $1,461 million, with $42 million in unfunded commitments[27] - The industrial loan segment totals $777 million, with $90 million in unfunded commitments[28] - The data centers loan segment totals $445 million, with $407 million in unfunded commitments[28] - The retail loan segment totals $331 million, with $142 million in unfunded commitments[28] - The mixed-use loan segment totals $304 million, with $17 million in unfunded commitments[28] - Committed $388 million to two floating-rate first mortgages subsequent to the quarter[7] Liquidity and Financial Position - Ended the quarter with total liquidity of $312 million, including $259 million in cash and $53 million available leverage on secured debt[7] - Closed a new secured credit facility providing an additional $280 million of borrowing capacity and increased the revolving credit facility borrowing capacity by $115 million[7] - The total assets increased to $9,519,082,000 as of September 30, 2025, from $8,410,000,000 at the end of 2024[41] - The company’s liabilities rose to $7,656,907,000 as of September 30, 2025, compared to $6,530,000,000 at the end of 2024[41] Realized Gains and Losses - The company reported a realized gain of $3.6 million on forward currency contracts in Q3 2025[34] - The net realized loss on investments for Q3 2025 was $7,436,000, compared to a significant loss of $127,512,000 in Q3 2024[42] - The company reported a $41 million held-for-sale corporate note, which was sold during Q3 2025[44] Financial Metrics and Analysis - Distributable Earnings is a key financial measure, with a reconciliation of GAAP net income provided on page 21[44] - Book value per share (BVPS) is calculated as common stockholders' equity divided by shares of common stock outstanding[44] - The company has a weighted average advance rate of approximately 73% across secured debt arrangements[31] - The gross amount of General CECL Allowance is $39 million, impacting the financial results[44] - The analysis incorporates movements in USD, GBP, and EUR benchmark rates, reflecting the company's exposure to currency fluctuations[44] - The company emphasizes the importance of evaluating performance against peers using Distributable Earnings metrics[44] - Amounts and percentages in the report may not foot due to rounding, highlighting the need for precise financial reporting[44] - Other financial changes include adjustments in General CFCL Allowance and realized losses on investments[44] - The analysis assumes the exercise of all extension options, although there is no assurance that these options will be exercised[44]

Financial Performance - For the three months ended September 30, 2025, net income available to common stockholders was $47.7 million, or $0.34 per diluted share, compared to a net loss of $94.6 million, or ($0.69) per diluted share for the same period in 2024[228]. - The company reported a net income before taxes of $51.0 million for the three months ended September 30, 2025, an increase of $30.2 million from the previous quarter[230]. - Distributable Earnings for the three months ended September 30, 2025, were $41.8 million, or $0.30 per share, compared to $36.4 million, or $0.26 per share, for the previous quarter[263]. - Net income available to common stockholders for the three months ended September 30, 2025, was $47,723,000, compared to $17,671,000 for June 30, 2025[268]. - Diluted Distributable Earnings per share increased to $0.30 for September 30, 2025, compared to $0.26 for June 30, 2025[268]. Revenue and Income Sources - Net interest income decreased by $3.0 million to $40.0 million for the three months ended September 30, 2025, primarily due to a lower average loan balance and lower average index rates[231]. - Income from equity method investment increased to $17.1 million for the three months ended September 30, 2025, compared to a net loss of $0.7 million in the previous quarter, driven by a $17.4 million gain on litigation settlement[233][234]. - Revenue from real estate owned operations declined by $1.99 million to $75.7 million for the nine months ended September 30, 2025, compared to $77.7 million in 2024[242]. - Net income from equity method investment was $15.7 million for the nine months ended September 30, 2025, attributed to a $17.4 million gain on litigation settlement[248]. Expenses and Allowances - Total operating expenses for the three months ended September 30, 2025, were $15.3 million, a slight increase from $14.9 million in the previous quarter[230]. - General and administrative expenses decreased by $2.5 million to $19.9 million for the nine months ended September 30, 2025, compared to $22.4 million in 2024[245]. - Management fees to related parties decreased by $1.8 million to $25.6 million for the nine months ended September 30, 2025, compared to $27.4 million in 2024[246]. - The Specific CECL Allowance decreased by $7.5 million during the three months ended September 30, 2025, due to a $1.3 million reversal and a $6.2 million write-off related to the Michigan Office Loan[235]. - The General CECL Allowance increased by $1.1 million during the three months ended September 30, 2025, driven by loan originations and extending expected repayment dates[236]. Asset and Loan Management - The company committed $3.1 billion of capital to new loans during the nine months ended September 30, 2025, with $2.2 billion funded at closing[271]. - The loan portfolio's carrying value as of September 30, 2025, was $8,303,645,000, with a weighted-average coupon of 6.9% and an all-in yield of 7.7%[272]. - The average month-end balance for commercial mortgage loans was $7.9 billion, with related debt of $5.8 billion for the nine months ended September 30, 2025[277]. - The company had $1.0 billion in unfunded loan commitments as of September 30, 2025, with an expectation to fund approximately $779.4 million in the short term[288]. - The portfolio's weighted-average origination loan-to-value (LTV) ratio was 57% as of September 30, 2025, indicating significant equity value[278]. Financial Position and Ratios - Book value per share decreased to $12.18 as of September 30, 2025, from $12.34 as of December 31, 2024[269]. - The debt-to-equity ratio increased to 3.8 as of September 30, 2025, compared to 3.2 at December 31, 2024[285]. - Total borrowings amounted to $7.6 billion as of September 30, 2025, up from $6.4 billion at December 31, 2024[293]. - The company maintained $245.9 million in cash on hand and $53.3 million in available borrowings under financing arrangements as of September 30, 2025[289]. Risk Management - The company seeks to manage interest rate risk by structuring financing agreements with varying maturities and using hedging instruments when appropriate[331]. - The company is subject to credit risk and aims to acquire high-quality assets to keep credit losses and financing costs low[327]. - Prepayment risk is managed by including prepayment penalties in loan agreements to mitigate the impact of principal repayment rates differing from expectations[332]. - Some loans and secured debt are denominated in foreign currencies, exposing the company to currency risk[335]. - The company uses foreign currency forward contracts to mitigate exposure related to fluctuations in currency rates[335]. Regulatory and Compliance - The company is obligated to distribute at least 90% of its REIT taxable income to stockholders annually to maintain REIT qualification[334]. - The OBBB legislation, effective January 1, 2026, relaxed the REIT asset test requirement for taxable REIT subsidiaries from 20% to 25% of the gross value of a REIT's assets[323].