Apollo Commercial Real Estate Finance, Inc · NYSE:ARI
Apollo Commercial Real Estate Finance — Q3 2022 Earnings Presentation
22 slides from Apollo Commercial Real Estate Finance's earnings presentation, Oct 25, 2022
Slide 1: Q3 2022 Financial Results
Exhibit 99.2 APOLLO COMMERCIAL REAL ESTATE FINANCE, INC. Q3 2022 Financial Results October 24, 2022 Information is as of September 30, 2022, except as otherwise noted. It should not be assumed that investments made in the future will be profitable or will equal the performance of the investments in
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: ARI Q3 2022 Highlights
ARI Q3 2022 Highlights 1,a Strong Distributable Earnings Well-Positioned for Rising Interest Rates $0.37 98% 1 Distributable Earnings per Diluted Share of Common Stock Percentage of Portfolio Consisting of Floating Rate Loans Well Covered Dividend Durable Balance Sheet 1.06x $1.1 Billion 3 of Unencu
Slide 4: Summary Results
Summary Results Ø Net interest income of $61.9 million Ø Net income available to common stockholders of $180.0 million, or $1.13 per diluted share of common stock Q3 Q3 1,a Ø Distributable Earnings of $52.3 million, or $0.37 per diluted share of common stock Financial Results Financial Results 4 Ø D
Slide 5: Portfolio Activity
Portfolio Activity Q3 Portfolio Activity YTD Portfolio Activity ($ in mm) ($ in mm) 9 8 a 8 9 a Origination Key Highlights Q3’22 $388 million 100% 9.0% 48% YTD $3.5 billion 100% 7.4% 52% Weighted Average New Commitments to Floating Rate Weighted Average b c Unlevered All-in Yield Mortgage Loans Mort
Slide 6: Book Value per Share Roll Forward
Book Value per Share 10 Book Value per Share 10 Book Value per Share Roll Forward General CECL Allowance BVPS excl. General CECL BVPS & Depreciation Allowance & Depreciation 6/30/2022 $14.97 ($0.22) $15.19 (+) Net Reversal of Specific CECL allowance $0.38 - $0.38 (+) Realized gain on investments $0.
Slide 7: Capital Structure Overview
Capital Structure Overview Capital Structure Composition Conservative Capital Management Strategy ($ in mm) Eight Eight Secured Secured D Debt Counterparties ebt Counterparties and and One One Private Private Securitization Securitization Two Secured Two Secured D Debt Counterparties ebt Counterpart
Slide 8: Loan Portfolio Overview
Loan Portfolio Overview W/A Unlevered All-in Yield on Number of Loans Carrying Value 6,a Loan Portfolio 65 $8.7 billion 6.5% W/A Remaining Fully- W/A Portfolio Loan-to- 14 W/A Portfolio Risk Rating 14,17 14,b Extended Term Value 3.1 3.0 Years 60% Collateral Diversification Loan Position 15 a) Exclud
Slide 9: Loan Portfolio Overview (cont'd)
Loan Portfolio Overview (cont’d) ($ in mm) United New Other 9 a Property Type Kingdom York City Europe Southeast Midwest West Northeast Other Total Hotel $150 / 2% $146 / 2% $517 / 6% $472 / 5% $62 / 1% $451 / 5% $7 / 0% $179 / 2% $1,983 / 23% Office 418 / 5% 542 / 6% 575 / 7% - 215 / 2% - - - 1,750
Slide 10: European Loan Portfolio Overview
European Loan Portfolio Overview W/A Unlevered All-in Yield on Number of Loans Carrying Value 6,14 Loan Portfolio 23 $3.7 Billion 6.2% 14,a Floating Rate First Mortgage W/A Loan-to-Value 100% 62% 99% Top 5 European Sponsors ($ in mm) Number Current Amortized Sponsor of Deals Commitment Cost Property
Slide 11: Mitigating Foreign Exchange Risk
Mitigating Foreign Exchange Risk ARI is well-positioned for declining 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) % FX Change YoY GBP: (1
Slide 12: Q3 Business Update
Q3 Business Update § Committed $388 million ($384 million funded at close) to a $582 million floating rate senior loan secured by a residential-for- sale property in Manhattan, NY in conjunction with the recapitalization of the existing subordinate loans Originations, Originations, 5 § Gross add-on
Slide 13: Loan Maturities and Future Fundings Profile
Loan Maturities and Future Fundings Profile 17,18,19 Fully-Extended Loan Maturities and Expected Future Fundings by Net Equity ($ in mm) a a 20,b Net Interest Income Sensitivity to Benchmark Rates Benchmark Rates Index 30-Sep 21-Oct USD 1M 3.14% 3.59% SOFR 1M 3.04% 3.60% EURIBOR 1.17% 1.54% SONIA ON
Slide 14: Senior Loan Portfolio Overview (Page 1 of 3)
Senior Loan Portfolio Overview (Page 1 of 3) ($ in mm) Origination Amortized Unfunded Construction 3rd Party Fully-extended 14, 17 Hotel Date Cost Commitments Loan Subordinate Debt Maturity Location Loan 1 10/2019 $304 $28 Y 08/2024 Various, Spain Loan 2 11/2021 186 20 Y 11/2026 Various, UK/Ireland
Slide 15: Senior Loan Portfolio Overview (Page 2 of 3)
Senior Loan Portfolio Overview (Page 2 of 3) ($ in mm) Origination Amortized Unfunded Construction 3rd Party Fully-extended 14, 17 Location Retail Date Cost Commitments Loan Subordinate Debt Maturity Loan 30 04/2022 $417 $34 04/2027 Various, UK Loan 31 10/2021 362 - 10/2026 Various, UK Loan 32 08/20
Slide 16: Senior Loan Portfolio Overview (Page 3 of 3)
Senior Loan Portfolio Overview (Page 3 of 3) ($ in mm) Origination Amortized Unfunded Construction 3rd Party Fully-extended 14, 17 Location Other Date Cost Commitments Loan Subordinate Debt Maturity Loan 51 - Parking Garages 05/2021 $270 $5 05/2026 Various, US Loan 52 - Industrial 03/2021 232 - 05/2
Slide 17: Subordinate Loan Portfolio Overview
15 Subordinate Loan Portfolio Overview ($ in mm) Origination Amortized Unfunded Construction 3rd Party Fully-extended 14, 17 Residential Date Cost Commitments Loan Subordinate Debt Maturity Location 22 Loan 56 05/2020 $232 - Y 09/2024 Manhattan, NY 22 Loan 57 06/2015 187 13 Y 09/2024 Manhattan, NY 2
Slide 18: Appendix
Appendix APOLLO) | commercial real Estate Finance 7
Slide 19: Consolidated Balance Sheets
Consolidated Balance Sheets (in thousands - except share data) September 30, 2022 December 31, 2021 f Assets: Cash and cash equivalents $319,264 $343,106 a,c Commercial mortgage loans, net 8,013,469 7,012,312 b,c Subordinate loans and other lending assets, net 717,837 844,948 Real estate owned, held
Slide 20: Consolidated Statements of Operations
Consolidated Statements of Operations Three Months Ended Nine Months Ended (in thousands - except share and per share data) September 30, September 30, 2022 2021 2022 2021 Net interest income: Interest income from commercial mortgage loans $120,821 $84,304 $304,631 $242,107 Interest income from subo
Slide 21: Reconciliation of GAAP Net Income to Distributable Earnings
1 Reconciliation of GAAP Net Income to Distributable Earnings Three Months Ended Nine Months Ended (in thousands - except share and per share data) September 30, September 30, 1 Distributable Earnings : 2022 2021 2022 2021 Net income available to common stockholders: $179,962 $57,266 $260,015 $176,5
Slide 22: Footnotes
Footnotes 1. Distributable Earnings, formerly known as Operating 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 upo
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