Apollo Commercial Real Estate Finance, Inc · NYSE:ARI
Apollo Commercial Real Estate Finance — Q2 2024 Earnings Presentation
21 slides from Apollo Commercial Real Estate Finance's earnings presentation, Aug 7, 2024
Slide 1: Q2 2024 Financial Results
Q2 2024 Financial Results Apollo Commercial Real Estate Finance, Inc. August 6, 2024 Unless otherwise noted, information as of June 30, 2024 It should not be assumed that investments made in the future will be profitable or will equal the performance of the investments shown in this document.
Slide 2: Forward Looking Statements and Other Disclosures
Forward Looking Statements and Other Disclosures This presentation may contain forward-looking statements that are within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be c
Slide 3: Q2 Summary Results
Q2 Summary Results Net income available to common stockholders of $33 million, or $0.23 per diluted share of common stock – Includes an increase of $8 million in Specific CECL Allowance recorded on a subordinate loan secured by our interest in a Class A office building in Troy, MI Financial Result
Slide 4: Per Share Overview
Per Share Overview Distributable Earnings per Share1,5,(a) Book Value per Share6 $0.35 3Q'23 4Q'23 1Q'24 2Q'24 BVPS Post-General CECL Allowance & Depreciation Distributable Earnings per Share 1,5,(a) General CECL Allowance & Depreciation Quarterly Dividend Specific CECL Allowance Book Value
Slide 5: Portfolio Activity & REO Overview
Portfolio Activity & REO Overview Q2 Loan Portfolio Activity 1H’24 Loan Portfolio Activity ($ in mm) ($ in mm) 4 4 (b) 8 7 (b) 8 7 $495 million of new loan originations, across four first mortgages $583 million(b) of loan repayments including $286 million(b) of full repayments of three first mor
Slide 6: Q2'24 Loan Originations
Q2’24 Loan Originations Asset Photos Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size(a) $158 million $132 million $115 million $100 million Location Emeryville, CA St. Petersburg, FL Brooklyn, NY Washington, DC 500-Unit Clas
Slide 7: Loan Portfolio Overview
Loan Portfolio Overview Carrying Value/ W/A Unlevered All-in Yield Loan Position9 Number of Loans on Loan Portfolio3,9,(a) $8.3 billion/50 Loans 95% First Mortgage 8.9% W/A Remaining Fully-Extended W/A Portfolio Risk Rating9 W/A Portfolio Loan-to-Value(b) Term9,10 2.3 Years 3.0 58% Collateral Divers
Slide 8: Loan Portfolio Overview (cont'd)
Loan Portfolio Overview (cont’d) ($ in mm) United New Other Property Type Kingdom York City Europe Southeast Midwest West Northeast Other(b) Total7 Hotel $195 / 2% $245 / 3% $637 / 8% $492 / 6% $57 / 1% $207 / 2% $9 / 0% $159 / 2% $2,001 / 24% Office 564 / 7% 469 / 6% 482 / 6% - 178 / 2% - - - 1,693
Slide 9: Office Loan Portfolio Overview
Office Loan Portfolio Overview Number of Loans (a) Carrying Value First Mortgage9 W/A Loan-to-Value(b) 10 Loans $1.7 Billion 100% 51% Loans with 3rd Party Largest commitment 100% W/A Risk Rating9 Subordinate Debt leased to credit tenant(c) 2.8 3 Loans $636 million Origination Vintage9 Location9 Full
Slide 10: Senior Loan Portfolio (1 of 3)
Senior Loan Portfolio (1 of 3) ($ in mm) Origination Amortized Unfunded Construction 3rd Party Fully-extended Hotel Property Type Date Cost Commitments Loan Subordinate Debt Maturity10 Location (a) Various, Spain Loan 1 Hotel 10/2019 $266 $17 Y 08/2024 Loan 2 Hotel 12/2023 265 - 12/2028 Various, Eur
Slide 11: Senior Loan Portfolio (2 of 3)
Senior Loan Portfolio (2 of 3) Origination Amortized Unfunded Construction 3rd Party Fully-extended 10 Retail Property Type Date Cost Commitments Loan Subordinate Debt Maturity Location Loan 23 Retail 04/2022 $480 $24 04/2027 Various, UK Loan 24 Retail 10/2021 411 - 10/2026 Various, UK Loan 25 Retai
Slide 12: Senior Loan Portfolio (3 of 3)
Senior Loan Portfolio (3 of 3) ($ in mm) Origination Amortized Unfunded Construction 3rd Party Fully-extended 10 Healthcare Property Type Date Cost Commitments Loan Subordinate Debt Maturity Location Loan 38 Healthcare 03/2022 $342 - 03/2027 Various, MA Loan 39(a) Healthcare 10/2019 159 - 10/2024 Va
Slide 13: Subordinate Loan Portfolio
Subordinate Loan Portfolio ($ in mm) Origination Amortized Unfunded Construction 3rd Party Fully-extended Property Type Date Cost Commitments Loan Subordinate Debt Maturity10 Location Loan 46 - Residential 13 Residential 06/2015 $261 - 11/2025 Manhattan, NY Loan 47 - Residential 13 Residential 08/20
Slide 14: Capital Structure Overview
Capital Structure Overview Capital Structure Composition Conservative Capital Management Strategy ($ in mm) No Corporate Debt ~71% Weighted Average Available Maturities until May 2026 Advance Rate(e) Secured Debt Arrangements(a),(b),(c) 3.4x Debt to Equity Ratio14 1.3x Fixed Charge Coverage15 $5,640
Slide 15: Mitigating Foreign Exchange Risk
Mitigating Foreign Exchange Risk ARI is well-positioned for fluctuating foreign exchange rates due to several risk mitigating steps we have taken to structure and fund our non-US loan portfolio and associated secured financing facilities Foreign Exchange Rate Change (Local/USD) 1.27x 1.22x 1.27x 1.2
Slide 16: Loan Maturities and Future Funding Profile
Loan Maturities and Future Funding Profile Fully-Extended Loan Maturities and Expected Future Fundings by Net Equity10,16,17 ($ in mm) $713 $700 $644 $225 $176 $48 $66 $6 $2 $0 a 2024 2025 2026 2027 2028 & Beyond (b) Fully-Extended Maturities (Net Equity)(b) Expected Net Future Fundings Net Interest
Slide 17: Appendix
Appendix - Consolidated Balance Sheets - Consolidated Statement of Operations - Reconciliation of GAAP Net Income to Distributable Earnings 17
Slide 18: Consolidated Balance Sheets
Consolidated Balance Sheets ($ in thousands - except share data) June 30, 2024 December 31, 2023 Assets: Cash and cash equivalents $174,703 $225,438 Commercial mortgage loans, net (a)(c) 7,909,125 7,925,359 Subordinate loans, net (b)(c) 384,777 432,734 Real estate owned, held for investment, net(d)
Slide 19: Consolidated Statement of Operations
Consolidated Statement of Operations ($ in thousands - except share and per share data) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Net interest income: Interest income from commercial mortgage loans $179,388 $174,124 $363,104 $340,271 Interest income from subordinate l
Slide 20: Reconciliation of GAAP Net Income to Distributable Earnings
Reconciliation of GAAP Net Income to Distributable Earnings1 ($ in thousands - except share and per share data) Three Months Ended June 30, Six Months Ended June 30, 1 Distributable Earnings : 2024 2023 2024 2023 Net income (loss) available to common stockholders: $32,717 ($86,468) ($74,875) ($40,62
Slide 21: Footnotes
Footnotes 1. Distributable Earnings is a non-GAAP financial measure that we define as net income available to common stockholders, computed in accordance with GAAP, adjusted for (i) equity-based compensation expense (a portion of which may become cash-based upon final vesting and settlement of award
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