Apollo Commercial Real Estate Finance (ARI) Q2 2024 earnings summary

Executive summary

• Q2 2024 distributable earnings were $0.35 per share and GAAP net income was $33 million, or $0.23 per diluted share.

• Total loan portfolio at quarter end was $8.3 billion, with 95% in first mortgages and 96% floating rate loans.

• $759 million in loan repayments received in the first half of 2024; $505 million redeployed into four new transactions in Q2, plus two UK deals post-quarter totaling GBP 270 million.

• Declared a quarterly dividend of $0.35 per share, representing a 13.9% yield.

• No corporate debt maturities until May 2026, supporting a stable capital structure.

Financial highlights

• Book value per share was $13.20 at June 30, 2024, down from $14.43 at December 31, 2023, mainly due to increased CECL allowances and share repurchases.

• Repurchased $38 million of common stock at $10.16 per share in Q2, with an additional $2 million post-quarter.

• Net interest income for Q2 2024 was $51.8 million; total assets at June 30, 2024 were $9.27 billion.

• Ended the quarter with $193 million in liquidity and $507 million in unencumbered assets.

• Gross add-on fundings in Q2 were $116 million; $438 million year-to-date.

Outlook and guidance

• Portfolio expected to remain roughly flat for the remainder of 2024, with active capital recycling and robust pipeline.

• 2025 anticipated to be more active if economic conditions stabilize and interest rates moderate.

• Anticipates recording a Specific CECL Allowance of approximately $90 million on a Massachusetts healthcare loan due to bankruptcy.

• Management highlighted a conservative capital management strategy and focus on first mortgage, floating rate loans.

• $436.6 million of unfunded loan commitments remain, expected to be funded over a 2.6-year weighted-average tenor.