Apollo Commercial Real Estate Finance, Inc. Q4 FY2024 earnings call

• ARI experienced robust repayment activity and capital deployment in 2024, with $1.9 billion in total origination volume. The loan portfolio was $7.1 billion with 46 loans. - No additional asset-specific CECL allowances were recorded in the fourth quarter. - At 111 West 57th Street, units are under contract with potential to repay senior mortgage and redeploy capital. - Focused on proactive asset management, targeting resolutions on nonperforming loans and REO assets. - Brooklyn multifamily development has $300 million in net equity invested, with potential to convert non-income producing capital to earnings.

ARI originated $1.9 billion in loans in 2024, with $702 million in the fourth quarter. At year-end, the loan portfolio consisted of 46 loans totaling $7.1 billion. Distributable earnings for the fourth quarter were $45 million or $0.32 per share of common stock, and for the full year, $190 million or $1.33 per share. The weighted average risk rating of the portfolio was 3.0 at quarter end, unchanged from the previous quarter. The total CECL allowance was $379 million as of December 31, representing $2.74 per share of book value.

• Q4 distributable earnings included non-recurring items. - Expect increasing capital deployment in 2025 as dry powder in real estate funds is deployed. - Loan portfolio expected to grow in 2025 with an origination pipeline over $1 billion. - Book value per share excluding general CECL allowance and depreciation was $12.77, a slight increase from the previous quarter.

Q: Rick Shane asks about the cadence of the specific reserve translating into realized losses.

A: Stuart Rothstein mentions recapturing capital from 111 West 57th, Cincinnati asset, and Brooklyn development, with latter half of 2024 to next year being key.

Q: Jade Rahmani asks about geographies and property types.

A: Scott Weiner talks about multifamily, senior housing, data centers, etc., in US and UK, with no distressed situations.

Q: Steve Delaney asks about portfolio growth and bridge loans.

A: Scott Weiner and Stuart Rothstein discuss portfolio growth potential and bank leverage availability.

Q: John Nicodemus asks about borrowers extending loans.

A: Scott Weiner talks about borrower visibility and portfolio evaluation.

Q: Harsh Hemnani asks about spreads on stabilized vs transitional assets and CLOs.

A: Scott Weiner discusses spreads and no immediate plan to use CLO market