Core Viewpoint - Apollo Commercial Real Estate Finance, Inc. (ARI) will hold a conference call on April 25, 2025, to discuss its first quarter 2025 financial results, which will be released on April 24, 2025, after market close [1] Company Overview - Apollo Commercial Real Estate Finance, Inc. is a real estate investment trust that focuses on originating, acquiring, investing in, and managing performing commercial first mortgage loans, subordinate financings, and other commercial real estate-related debt investments [3] - The company is externally managed and advised by ACREFI Management, LLC, which is an indirect subsidiary of Apollo Global Management, Inc., a global alternative asset manager with approximately $751 billion in assets under management as of December 31, 2024 [3] Conference Call Details - The conference call will include a review of the first quarter 2025 performance, discussions on recent events, and a question-and-answer session [1] - Registration for the call can be completed through a provided link, and a live webcast will also be available on the company's website [2] - A replay of the webcast will be posted approximately two hours after the call for those unable to attend live [2] Additional Information - Further details can be found on the company's website at www.apollocref.com [4]

Group 1 - Apollo Commercial Finance (ARI) shares increased by 7.3% to $8.56, following a significant trading volume, contrasting with an 18.5% loss over the past four weeks [1] - The stock price surge is attributed to a broader market rally due to optimism from Trump's announcement of a 90-day pause on reciprocal tariffs for most trading partners, which is expected to ease cost pressures and improve profitability for mREITs [2] - The upcoming quarterly earnings for Apollo Commercial Finance are projected at $0.22 per share, reflecting a year-over-year decline of 37.1%, with revenues expected to be $42.77 million, down 24.6% from the previous year [3] Group 2 - The consensus EPS estimate for Apollo Commercial Finance has remained unchanged over the last 30 days, indicating that stock price increases may not be sustainable without earnings estimate revisions [4] - Apollo Commercial Finance is categorized under the Zacks REIT and Equity Trust industry, with a current Zacks Rank of 3 (Hold) [4] - Blackstone Mortgage Trust (BXMT), another company in the same industry, saw a 6.6% increase in its stock price, closing at $18.31, but has returned -15.1% over the past month [4]

Group 1 - The average career length for a professional boxer is 16 years, highlighting the transient nature of success in the sport [1] - Famous boxers are typically recognized for their exceptional skills and winning records, indicating that performance is a key factor in achieving fame [1] Group 2 - The investment strategy promoted focuses on creating a portfolio that generates income without the need for selling assets, appealing to those seeking financial independence [2] - The Income Method claims to generate strong returns, targeting a yield of 9-10%, which positions it as an attractive option for retirement investing [2] - A month-long paid trial is offered for $49, with an additional 5% discount, suggesting a promotional effort to attract new investors [2]

Core Viewpoint - Apollo Commercial Real Estate Finance, Inc. (NYSE: ARI) has shown improvement in pay-out metrics for two consecutive quarters following a 29% dividend cut in the September quarter [1] Group 1: Company Performance - The mortgage real estate investment trust (REIT) reduced its dividend significantly, which has led to improved financial metrics in subsequent quarters [1]

Financial Data and Key Metrics Changes - The company reported distributable earnings of $45 million or $0.32 per share for Q4 2024, and $190 million or $1.33 per share for the full year [12][13] - GAAP net loss available to stockholders was negative $132 million or negative $0.97 per share for the full year [13] - The dividend was well covered with 128% coverage for the quarter and 111% for the full year [13] - The loan portfolio ended the year with a carrying value of $7.1 billion and a weighted average unlevered yield of 8.1% [14] Business Line Data and Key Metrics Changes - ARI originated $702 million worth of new loans in Q4 2024, bringing total origination volume for the year to $1.9 billion [5][6] - The loan portfolio comprised 46 loans totaling $7.1 billion at year-end, with no additional asset-specific CECL allowances recorded in Q4 [8][17] - Elevated loan repayments totaled $830 million in Q4, outpacing new loan closings and add-on fundings [16] Market Data and Key Metrics Changes - More than half of ARI's originations in 2024 were in the UK, highlighting the company's strong market position in Europe [7] - The weighted average risk rating of the portfolio remained at 3.0%, unchanged from the previous quarter [17] Company Strategy and Development Direction - The company expects increasing capital deployment and transaction activity in 2025 as participants reenter the market [5] - ARI is focused on proactive asset management and targeting resolutions on nonperforming loans to maximize value recovery [9][10] - The company is exploring opportunities in various sectors, including multifamily, senior housing, and data centers, with a focus on newly constructed assets [34][36] Management's Comments on Operating Environment and Future Outlook - Management noted that property valuations likely troughed in early 2024, with expectations for increased investment activity in 2025 [5] - The company anticipates that quarterly earnings in 2025 will be lower compared to Q4 2024, but still sufficient to cover dividends [14] - Management expressed optimism about recapturing capital tied up in underperforming assets and redeploying it into performing loans [26][28] Other Important Information - The company ended the quarter with over $380 million in total liquidity [20] - The total CECL allowance was relatively flat at $379 million, representing $2.74 per share of book value [18] Q&A Session Summary Question: What is the expected cadence of realized losses from the specific reserve? - Management indicated optimism about clawing back capital tied to specific projects, with potential opportunities to redeploy capital in the latter half of the year [25][26] Question: Where are the interesting geographical opportunities? - Management noted increased activity across all sectors and geographies, particularly in newly constructed multifamily and senior housing [34][36] Question: Is the portfolio expected to grow to $7.5 to $8 billion? - Management confirmed that with a large pipeline of deals, the portfolio could grow significantly in the next six to twelve months [46][48] Question: Are borrowers looking to extend loans into a more favorable rate environment? - Management observed that borrowers have more visibility and are making informed decisions about their portfolios, particularly in the office sector [62][64] Question: What are the spreads on stabilized versus transitional assets? - Management indicated that while spreads have tightened, they can still generate mid-teen returns on both stable and transitional assets [70][72]

Financial Performance - Net loss available to common stockholders for 2024 was $132 million, or $0.97 per diluted share, while Q4 reported net income of $38 million, or $0.27 per diluted share [9]. - Distributable Earnings for 2024 totaled $190 million, or $1.33 per diluted share, with Q4 Distributable Earnings at $45 million, or $0.32 per diluted share [9]. - Total net revenue for the year ended December 31, 2024, was $303,671, down from $336,824 in 2023, reflecting a decline of 9.8% [52]. - Net income available to common stockholders for Q4 2024 was $37,584, a decrease of 13.5% compared to $43,472 in Q4 2023 [52]. - The company reported a net loss of $119,636 for the year ended December 31, 2024, compared to a net income of $46,540 in 2023 [52]. - Distributable earnings for Q4 2024 were $44,748, down from $51,571 in Q4 2023, indicating a decline of 13.5% [53]. Dividends - Declared common stock dividends of $1.20 per share in 2024, resulting in a dividend yield of 13.2% and an annual dividend coverage ratio of 1.1x [9]. - The dividend declared per share of common stock for Q4 2024 was $0.25, down from $0.35 in Q4 2023 [52]. Loan Portfolio - Total loan portfolio reached $7.1 billion with a weighted-average unlevered all-in yield of 8.1%, consisting of 95% first mortgages and 95% floating rate loans [9]. - Committed $1.9 billion to new loans in 2024, with $782 million committed in Q4, and loan repayments amounted to $2.5 billion for the year [9]. - The total senior loan portfolio amounts to $7,176 million, with $841 million in unfunded commitments and a weighted average maturity of 2.5 years [35]. - The office loan segment totals $1,650 million, with $264 million in unfunded commitments, primarily located in London, UK, and Manhattan, NY [30]. - The hotel loan segment totals $1,577 million, with $31 million in unfunded commitments, including properties in various locations across Europe and the US [31]. - The residential loan segment totals $1,166 million, with $11 million in unfunded commitments, primarily in the UK and US [31]. - The retail loan segment totals $911 million, with $403 million in unfunded commitments, including properties in London, UK, and Manhattan, NY [31]. - The mixed-use loan segment totals $363 million, with $24 million in unfunded commitments, primarily located in London, UK, and Brooklyn, NY [33]. - The industrial loan segment totals $355 million, with $94 million in unfunded commitments, including properties in Sweden and the UK [33]. - The weighted average loan-to-value ratio for the loan portfolio was 57% [23]. Assets and Liabilities - Total assets as of December 31, 2024, amounted to $8,411,591, with cash and cash equivalents at $317,396 [51]. - The company’s total liabilities as of December 31, 2024, were $6,537,110, with secured debt arrangements at $4,814,973 [51]. - Ended 2024 with total common equity book value of $1.8 billion and total liquidity of $381 million, with no corporate debt maturities until May 2026 [9]. Financial Ratios - The company has a debt-to-equity ratio of 3.2x and a fixed charge coverage ratio of 1.3x, indicating a conservative capital management strategy [38]. - The weighted-average diluted shares for distributable earnings were 140,630,572 for Q4 2024, compared to 144,188,529 in Q4 2023 [53]. Foreign Exchange and Interest Income - The foreign exchange risk is mitigated through local currency-denominated secured debt and forward currency contracts, resulting in a $6.2 million realized gain in Q4 2024 [42]. - Net interest income for Q4 2024 was $43,503, a decrease of 25.1% from $58,007 in Q4 2023 [52]. - Operating expenses for Q4 2024 totaled $38,493, slightly higher than $37,805 in Q4 2023, representing an increase of 1.8% [52].

Apollo Commerical Finance (ARI) reported $43.5 million in revenue for the quarter ended December 2024, representing a year-over-year decline of 25%. EPS of $0.32 for the same period compares to $0.36 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $43.63 million, representing a surprise of -0.28%. The company delivered an EPS surprise of +39.13%, with the consensus EPS estimate being $0.23.While investors scrutinize revenue and earnings changes year-over-year and how they compare ...

Apollo Commerical Finance (ARI) came out with quarterly earnings of $0.32 per share, beating the Zacks Consensus Estimate of $0.23 per share. This compares to earnings of $0.36 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 39.13%. A quarter ago, it was expected that this real estate investment trust would post earnings of $0.25 per share when it actually produced earnings of $0.31, delivering a surprise of 24%.Over the last ...

Market and Economic Risks - The company operates in a competitive market for investment opportunities, which may limit its ability to acquire desirable target assets[16]. - Recent macroeconomic trends, including inflation and higher interest rates, may negatively impact the company's financial condition and results[23]. - A prolonged economic slowdown or recession could impair the company's assets and harm its operations, particularly if accompanied by declining real estate values[139]. - Recent macroeconomic trends, including inflation and higher interest rates, may adversely affect the company's financial condition and results of operations[140]. Regulatory and Compliance Risks - The company may face risks related to governmental intervention and regulatory reform in financial markets, potentially impacting its operations[17]. - To qualify as a REIT, the company must distribute at least 90% of its taxable income annually, which may limit its ability to pursue advantageous investments[171]. - Non-compliance with REIT requirements could lead to U.S. federal income tax liabilities, reducing cash available for distribution to stockholders[169]. - The company may fail to qualify as a REIT if certain loans do not qualify as real estate assets, which could lead to significant tax penalties[180]. - The IRS could challenge the treatment of mezzanine loans and preferred equity investments as debt, potentially jeopardizing REIT qualification[181]. - The company may be required to report taxable income that exceeds the economic income realized from certain investments, affecting cash flow[182]. - Taxable mortgage pool rules may increase taxes for the company and its stockholders, limiting future securitization methods[184]. - Adverse legislative or regulatory tax changes could negatively impact the market price of the company's common stock[190]. Financial and Investment Risks - Access to financing sources may be limited, affecting the company's ability to enhance returns and increasing leverage risk[18]. - The company may not achieve its weighted-average all-in yield on assets, leading to significantly lower future returns than anticipated[20]. - The lack of liquidity of the company's assets may adversely affect its ability to value and sell them[21]. - The company may face significant losses from B Notes and mezzanine loans due to their subordinated nature and the risks associated with borrower defaults[136]. - The company has not adopted any limit on investments in non-investment grade debt securities, which have a higher risk of default[137]. - The company may face risks of default on concentrated assets, which could reduce net income and stock value[30]. - Foreclosure processes for commercial mortgage loans can be lengthy and expensive, negatively affecting anticipated returns[33]. Management and Operational Risks - The company is dependent on its Manager and key personnel for success, with potential conflicts of interest affecting stockholder interests[24]. - The company relies entirely on the Manager for investment and advisory services, with no employees of its own, making it vulnerable to the Manager's performance and personnel stability[161]. - The Manager's liability is limited under the Management Agreement, which could lead to poor performance or losses for which the Manager would not be liable[152]. - The base management fee is based on stockholders' equity, which may not incentivize the Manager to maximize risk-adjusted returns, potentially leading to significant fees despite net losses[157][158]. - The Manager operates under broad investment guidelines, allowing for riskier transactions without prior board approval, which could adversely affect profitability and risk profile[159]. - The company may co-invest with third parties, which could expose it to risks related to decision-making authority and potential disputes[145]. - The company faces risks related to real estate investments, including changes in laws, environmental liabilities, and potential uninsured losses[142]. Management Agreement and Brand Risks - The Management Agreement with the Manager was automatically renewed for a successive one-year term in September 2024, with annual renewal thereafter unless terminated with 180 days prior notice[155]. - Termination of the Management Agreement without cause incurs a termination payment equal to three times the average annual base management fee earned by the Manager during the prior 24 months[154]. - The license agreement with Apollo allows the company to use the "Apollo" name as long as the Management Agreement is in effect, but termination could harm brand recognition[156]. - The Manager's broad discretion in investment decisions may lead to underperformance or losses, impacting the company's ability to pay dividends and affecting stock price[158]. Cash Management and Financial Stability - The company regularly maintains cash balances exceeding the Federal Deposit Insurance Corporation insurance limit, which could pose a risk if the bank fails[144]. - The company may face tax liabilities that could reduce cash flow, even if it qualifies as a REIT[173]. - ACREFI TRS, ARM TRS, and ACREFI III TRS will be subject to U.S. federal, state, and local corporate taxes, impacting cash available for distribution[174].

NEW YORK, Feb. 10, 2025 (GLOBE NEWSWIRE) -- Apollo Commercial Real Estate Finance, Inc. (the “Company” or “ARI”) (NYSE:ARI) today reported results for the quarter and year ended December 31, 2024. Net income (loss) attributable to common stockholders per diluted share of common stock was $0.27 and ($0.97) for the quarter and year ended December 31, 2024, respectively. Distributable Earnings (a non-GAAP financial measure defined below) and Distributable Earnings prior to net realized loss on investments per ...