Apollo Commercial Real Estate Finance, Inc · NYSE:ARI
Apollo Commercial Real Estate Finance — Q3 2023 Earnings Presentation
21 slides from Apollo Commercial Real Estate Finance's earnings presentation, Oct 31, 2023
Slide 1: Q3 2023 Financial Results
Q3 2023 Financial Results Apollo Commercial Real Estate Finance, Inc. October 2023 Unless otherwise noted, information as of September 30, 2023 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: ARI Highlights
ARI Highlights Strong Distributable Earnings1,a Dividend Coverage $0.37 1.1x Distributable Earnings1 per Diluted Share of Common Stock Coverage Ratio2 for Dividend per Share of Common Stock Quarter-End Liquidity Well-Positioned for Continued Tailwinds from Rising Interest Rates $480 Millionc 99% Cas
Slide 4: Summary Results
Summary Results Net income available to common stockholders of $43 million, or $0.30 per diluted share of common stock Distributable Earnings1,a of $53 million, or $0.37 per diluted share of common stock Q3 Financial Results Declared common stock dividends of $0.35 per share for Q3 2023, which
Slide 5: Per Share Overview
Per Share Overview Distributable Earnings per Share1,a Book Value per Share9 $14.80 $14.74 $0.35 $0.33 $0.29 $14.47 $14.45 4Q'22 1Q'23 2Q'23 3Q'23 2Q'23 3Q'23 1,a Distributable Earnings per Share Quarterly Dividend BVPS Post-General CECL Allowance & Depreciation General CECL Allowance & Depr
Slide 6: Portfolio Activity & REO Overview
Portfolio Activity & REO Overview Q3 Loan Portfolio Activity ($ in mm) Fundings $97 million in add-on fundings5 $97 ($142) ($286) $10 Total proceeds from Q3 repayments of $286 million $170 million of full repayments across 4 deals $116 million of partial repayments including: $8,295 Repaymen
Slide 7: Capital Structure Overview
Capital Structure Overview Capital Structure Composition Conservative Capital Management Strategy ($ in mm) $805 Million of Unencumbered ~71% Weighted Average Available Real Estate Assets3 Advance Ratee Secured Debt Obligationsa,b,c 2.8x Debt to Equity Ratio10 1.4x Fixed Charge Coverage11 $5,147 (56
Slide 8: Loan Portfolio Overview
Loan Portfolio Overview W/A Unlevered All-in Yield Number of Loans Carrying Value on Loan Portfolio6,12,a 49 $8.0 billion 8.9% W/A Remaining Fully-Extended W/A Portfolio Risk Rating12 W/A Portfolio Loan-to-Value12,b Term12,14 3.1 57% 2.4 Years Collateral Diversification12 Origination Vintage12 Loan
Slide 9: Loan Portfolio Overview (cont'd)
Loan Portfolio Overview (cont’d) ($ in mm) United New Other a 8 Property Type Kingdom York City Europe West Southeast Midwest Northeast Other Total Hotel $175 / 2% $146 / 2% $595 / 7% $422 / 5% $367 / 5% $57 / 1% $9 / 0% $132 / 2% $1,903 / 24% Office 383 / 5% 442 / 6% 481 / 6% - - 188 / 2% - - 1,494
Slide 10: Office Loan Portfolio Overview
Office Loan Portfolio Overview Number of Loans a Carrying Value c W/A Risk Rating12 9 Loans $1.4 Billion 3.1 First Mortgage Loans with 3rd Party Subordinate Debt W/A Loan-to-Value12,b 99% 3 Loans 50% Origination Vintage12 Location Fully Extended Maturities12,14 United States $708 46% $505 $452 New Y
Slide 11: Mitigating Foreign Exchange Risk
Mitigating Foreign Exchange Risk ARI is well-positioned for fluctuating foreign exchange rates due to several risk mitigating steps we have taken to structure and fund our non-US loan portfolio and associated secured financing facilities Foreign Exchange Rate Change (Local/USD) 1.21x 1.23x 1.27x 1.2
Slide 12: Loan Maturities and Future Funding Profile
Loan Maturities and Future Funding Profile Fully-Extended Loan Maturities and Expected Future Fundings by Net Equity14,15,16 ($ in mm) $887 $815 $653 $462 $132 $27 $50 $45 $2 2023 2024 2025 2026 2027 Beyond a a Fully-Extended Maturities (Net Equity) Expected Net Future Fundings Net Interest Income S
Slide 13: Senior Loan Portfolio (1 of 3)
Senior Loan Portfolio (1 of 3) ($ in mm) Origination Amortized Unfunded Construction 3rd Party Fully-extended 14 Hotel Date Cost Commitments Loan Subordinate Debt Maturity Location Loan 1 10/2019 $333 $24 Y 08/2024 Various, Spain Loan 2 11/2021 214 15 Y 11/2026 Various, UK/Ireland Loan 3 05/2022 183
Slide 14: Senior Loan Portfolio (2 of 3)
Senior Loan Portfolio (2 of 3) ($ in mm) Origination Amortized Unfunded Construction 3rd Party Fully-extended 14 Location Retail Date Cost Commitments Loan Subordinate Debt Maturity Loan 23 04/2022 $457 $36 04/2027 Various, UK Loan 24 10/2021 396 - 10/2026 Various, UK Loan 25 08/2019 250 - Y 09/2025
Slide 15: Senior Loan Portfolio (3 of 3)
Senior Loan Portfolio (3 of 3) ($ in mm) Origination Amortized Unfunded Construction 3rd Party Fully-extended 14 Healthcare Date Cost Commitments Loan Subordinate Debt Maturity Location Loan 39 03/2022 $366 - 03/2027 Various, MA Loan 40 10/2019 154 - Y 10/2024 Various, UK Subtotal - Healthcare $520
Slide 16: Subordinate Loan Portfolio
Subordinate Loan Portfolio ($ in mm) Origination Amortized Unfunded Construction 3rd Party Fully-extended 14 Date Cost Commitments Loan Subordinate Debt Maturity Location 19 Loan 46 - Residential 06/2015 $213 - 09/2024 Manhattan, NY 18,19 Manhattan, NY Loan 47 - Residential 05/2020 170 - 09/2024 Loa
Slide 17: Appendix
Appendix - Consolidated Balance Sheets - Consolidated Statement of Operations - Reconciliation of GAAP Net Income to Distributable Earnings Private and Confidential 17
Slide 18: Consolidated Balance Sheets
Consolidated Balance Sheets ($ in thousands - except share data) September 30, 2023 December 31, 2022 Assets: Cash and cash equivalents $307,845 $222,030 Commercial mortgage loans, net a,c 7,561,254 8,121,109 Subordinate loans and other lending assets, net b,c 412,777 560,881 Real estate owned, held
Slide 19: Consolidated Statement of Operations
Consolidated Statement of Operations ($ in thousands - except share and per share data) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net interest income: Interest income from commercial mortgage loans $180,441 $120,821 $520,712 $304,631 Interest income from su
Slide 20: Reconciliation of GAAP Net Income to Distributable Earnings
Reconciliation of GAAP Net Income to Distributable Earnings1 ($ in thousands - except share and per share data) Three Months Ended September 30, Nine Months Ended September 30, Distributable Earnings1: 2023 2022 2023 2022 Net income available to common stockholders: 43,003 179,962 2,383 260,015 Adju
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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