ARI

NEW YORK, Aug. 10, 2026 (GLOBE NEWSWIRE) -- Apollo Commercial Real Estate Finance, Inc. (the “Company” or “ARI”) (NYSE: ARI) today reported results for the quarter and six months ended June 30, 2026. Net income available to common stockholders per diluted share of common stock was $0.11 for the quarter ended June 30, 2026. Distributable Earnings (a non-GAAP financial measure defined below), and Distributable Earnings prior to net realized loss on investments and loss on extinguishment of debt per diluted share of common stock was ($2.62) and $0.15 for the quarter ended June 30, 2026, respectively. ARI issued a detailed presentation of the Company’s quarter ended June 30, 2026 results, which can be viewed at www.apollocref.com. Distributable Earnings“Distributable Earnings,” a non-GAAP financial measure, is defined 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 awards should the holder elect net share settlement to satisfy income tax withholding), (ii) any unrealized gains or losses or other non-cash items (including depreciation and amortization related to real estate owned) included in net income available to common stockholders, (iii) unrealized income from unconsolidated joint ventures, (iv) foreign currency gains (losses), other than (a) realized gains/(losses) related to interest income, and (b) forward point gains/(losses) realized on the Company’s foreign currency hedges, and (v) provision for current expected credit losses. As a REIT, U.S. federal income tax law generally requires the Company to distribute annually at least 90% of its REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that the Company pay tax at regular corporate rates to the extent that it annually distributes less than 100% of its net taxable income. Given these requirements and the Company’s belief that dividends are generally one of the principal reasons shareholders invest in a REIT, the Company generally intends over time to pay dividends to its stockholders in an amount equal to its net taxable income, if and to the extent authorized by the Company’s board of directors. Distributable Earnings is a key factor considered by the Company’s board of directors in setting the dividend and as such the Company believes Distributable Earnings is useful to investors. The Company believes it is useful to its investors to also present Distributable Earnings prior to realized loss on investments and realized loss on extinguishment of debt, in applicable periods, to reflect its operating results because (i) the Company’s operating results are primarily comprised of earning interest income on its investments net of borrowing and administrative costs, which comprise the Company’s ongoing operations and (ii) it has been a useful factor related to the Company’s dividend per share because it is one of the considerations when a dividend is determined. The Company believes that its investors use Distributable Earnings and Distributable Earnings prior to realized loss on investments and realized loss on extinguishment of debt or a comparable supplemental performance measure, to evaluate and compare the performance of the Company and its peers. During the six months ended June 30, 2026, the Company recorded net realized losses on investments and extinguishment of debt in the consolidated statement of operations in connection with the sale of the Company’s commercial real estate loan portfolio (other than loans that were repaid prior to closing and one loan with a principal balance of $46 million which was repaid after closing) to Athene Holding Ltd., and a realized loss on the discounted repayment of a commercial mortgage loan. A significant limitation associated with Distributable Earnings as a measure of the Company’s financial performance over any period is that it excludes unrealized gains (losses) from investments. In addition, the Company’s presentation of Distributable Earnings may not be comparable to similarly titled measures of other companies, that use different calculations. As a result, Distributable Earnings should not be considered as a substitute for the Company’s GAAP net income as a measure of its financial performance or any measure of its liquidity under GAAP. Distributable Earnings are reduced for realized losses on loans which include losses that management believes are near certain to be realized. A reconciliation of Distributable Earnings to GAAP net income (loss) available to common stockholders is included in the detailed presentation of the Company’s quarter ended June 30, 2026 results, which can be viewed at www.apollocref.com. About Apollo Commercial Real Estate Finance, Inc. Apollo Commercial Real Estate Finance, Inc. (NYSE: ARI) is a real estate investment trust that primarily originates, acquires, invests in and manages performing commercial first mortgage loans, subordinate financings and other commercial real estate-related debt investments. The Company is externally managed and advised by ACREFI Management, LLC, a Delaware limited liability company and an indirect subsidiary of Apollo Global Management, Inc., a high-growth, global alternative asset manager with approximately $1.05 trillion of assets under management at June 30, 2026. Additional information can be found on the Company’s website at www.apollocref.com. Forward-Looking StatementsCertain statements contained in this press release constitute forward-looking statements as such term is defined in 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 covered by the safe harbor provided by the same. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond the Company’s control. These forward-looking statements include information about possible or assumed future results of the Company’s business, financial condition, liquidity, results of operations, plans and objectives. When used in this release, the words believe, expect, anticipate, estimate, plan, continue, intend, should, may or similar expressions, are intended to identify forward-looking statements. Statements regarding the following subjects, among others, may be forward-looking: higher interest rates and inflation; market trends in the Company’s industry, real estate values, the debt securities markets or the general economy; the timing and amounts of expected future fundings of unfunded commitments; the return on equity; the yield on investments; risks associated with investing in real estate assets, including changes in business conditions and the general economy; and the exact amount or timing of our sales of assets and liquidating distributions. For a further list and description of such risks and uncertainties, see the reports filed by the Company with the Securities and Exchange Commission. The forward-looking statements, and other risks, uncertainties and factors are based on the Company’s beliefs, assumptions and expectations of its future performance, taking into account all information currently available to the Company. Forward-looking statements are not predictions of future events. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

NEW YORK, June 15, 2026 (GLOBE NEWSWIRE) -- Apollo Commercial Real Estate Finance, Inc. (the “Company” or “ARI”) (NYSE:ARI) today announced the Board of Directors declared a dividend of $3.75 per share of common stock, which is payable on July 15, 2026 to common stockholders of record on June 30, 2026. The dividend payment will be predominately classified as return of capital. The Company also announced that following an extensive review of potential strategic alternatives for ARI, the board of directors determined that the dissolution of the Company, the liquidation of its assets and the winding down of its business and affairs are advisable and in the best interest of the Company and ARI stockholders. To effectuate a dissolution, ARI must receive the approval of the Company's stockholders. ARI intends to file a preliminary proxy statement with the Securities and Exchange Commission (the “SEC”) detailing a plan of complete liquidation and dissolution, which would authorize the Company to sell its remaining properties, wind down ARI’s affairs and distribute net proceeds to stockholders (the “Dissolution”). The board of directors, in its discretion, may, at any time, terminate, modify or amend the plan of complete liquidation and dissolution, without stockholder approval, and authorize the Company to dispose of its assets through a merger, business combination or other strategic alternative. Stuart Rothstein, Chief Executive Officer and President of ARI, said: “Following the successful completion of the loan portfolio sale in April, our board of directors, in consultation with management, has conducted an extensive and thorough review of strategic alternatives for ARI, with the goal of identifying a path that would deliver attractive risk-adjusted returns on a go-forward basis. After carefully evaluating a broad range of real estate-related strategies and potential transactions, the board has determined that the dissolution of the Company, the liquidation of its assets and the winding up of its business and affairs are advisable and in the best interest of the Company and ARI stockholders. The board is confident this decision reflects a rigorous and comprehensive assessment of all available alternatives. We remain committed to executing this process efficiently and returning capital to stockholders in a timely and orderly manner." Additional information for ARI Stockholders This press release may be deemed solicitation material in respect of the Dissolution. In connection with the Dissolution, ARI intends to file a proxy statement and other relevant materials with the SEC. This press release does not constitute a solicitation of any vote or approval. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, STOCKHOLDERS OF ARI ARE URGED TO READ THE PROXY STATEMENT AND OTHER RELEVANT MATERIALS IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE, INCLUDING ANY DOCUMENTS INCORPORATED BY REFERENCE IN THE PROXY STATEMENT, BECAUSE THESE MATERIALS WILL CONTAIN IMPORTANT INFORMATION ABOUT ARI AND THE DISSOLUTION. These materials will be made available to the stockholders of ARI at no expense to them and are expected to be mailed to stockholders. When available after filing, the proxy statement and other relevant information may be obtained without charge from the SEC’s website at www.SEC.gov. Copies of the documents filed by ARI with the SEC are also available free of charge on ARI’s website at www.apollocref.com. This press release is for informational purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. This press release is not a substitute for the proxy statement or any other document that ARI may file with the SEC or send to stockholders in connection with the Dissolution. No offering of securities shall be made, except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended. Participants in the Solicitation The directors and executive officers of ARI, and certain other affiliates of ACREFI Management, LLC, may be deemed “participants” in the solicitation of proxies from stockholders of ARI in favor of the Dissolution. Information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of the stockholders of ARI in connection with the Dissolution will be set forth in the proxy statement and the other relevant documents to be filed with the SEC. You can find information about the executive officers and directors of ARI and ACREFI Management, LLC in ARI’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and in its definitive proxy statement filed with the SEC on Schedule 14A on May 29, 2026. You may obtain free copies of these documents using the sources indicated above. About Apollo Commercial Real Estate Finance, Inc. Apollo Commercial Real Estate Finance, Inc. (NYSE: ARI) is a real estate investment trust that primarily originates, acquires, invests in and manages performing commercial first mortgage loans, subordinate financings and other commercial real estate-related debt investments. The Company is externally managed and advised by ACREFI Management, LLC, a Delaware limited liability company and an indirect subsidiary of Apollo Global Management, Inc., a high-growth, global alternative asset manager with approximately $1.03 trillion of assets under management as of March 31, 2026. Additional information can be found on the Company's website at www.apollocref.com. Please note that our URL address has changed. Forward-Looking StatementsCertain statements contained in this press release constitute forward-looking statements as such term is defined in 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 covered by the safe harbor provided by the same. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond the Company's control. These forward-looking statements include information about possible or assumed future results of the Company's business, financial condition, liquidity, results of operations, plans and objectives. When used in this release, the words believe, expect, anticipate, estimate, plan, continue, intend, should, may or similar expressions, are intended to identify forward-looking statements. These statements are subject to certain risks, uncertainties and assumptions, including: higher interest rates and inflation; market trends in the Company’s industry, real estate values, the debt securities markets or the general economy; the timing and amounts of expected future fundings of unfunded commitments; the return on equity; the yield on investments; the ability to borrow to finance assets; the Company’s ability to deploy the proceeds of its capital raises or acquire its target assets; risks associated with investing in real estate assets, including changes in business conditions and the general economy; and risks associated with the exact amount or timing of the Company's sales of assets and liquidating distributions; unexpected costs or unexpected liabilities that may arise from the transactions contemplated by the plan of complete liquidation and dissolution and with the Company's ability to realize the results of its plan of complete liquidation and dissolution. For a further list and description of such risks and uncertainties, see the reports filed by the Company with the Securities and Exchange Commission. The forward-looking statements, and other risks, uncertainties and factors are based on the Company's beliefs, assumptions and expectations of its future performance, taking into account all information currently available to the Company. Forward-looking statements are not predictions of future events. The Company disclaims any intention or obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Apollo closed the sale of its $9 billion loan portfolio to Athene on April 24, leaving the company with approximately $1.3 billion of cash and four REO assets with about $900 million gross value after repaying secured borrowings and other indebtedness. The company has repurchased about 6.8 million shares year-to-date and the board authorized a new share buyback program of up to $150 million, which management says has been accretive to book value. Management is conducting a strategic review and expects updates in the coming months, while reaffirming a target annualized dividend yield of roughly 8% on book value per share and signaling dividends will likely include a significant return-of-capital component while keeping cash unlevered. Interested in Apollo Commercial Real Estate Finance? Here are five stocks we like better. Apollo Commercial Real Estate Finance (NYSE:ARI) used its first-quarter 2026 earnings call to outline the company’s radically reshaped balance sheet following the sale of its loan portfolio and to provide an update on remaining real estate owned (REO) assets, capital return activity, and its ongoing strategic review. Chief Executive Officer Stuart Rothstein said the company completed the previously announced sale of its $9 billion loan portfolio to Athene on April 24. He said that after repaying ARI’s financing facilities, other indebtedness, and transaction expenses, the company’s total assets now consist of approximately $1.3 billion of cash along with four REO assets representing about $900 million in gross value. → Palantir Is Down 30%: Noise? Or a Signal to Accumulate? Rothstein said the sale “delivered ARI stockholders a compelling premium to where the stock has traded in recent years” and characterized the transaction as consistent with management’s focus on maximizing stockholder value. Chief Financial Officer Anastasia Mironova added that the company repaid its secured borrowing facilities, fully repaid its Term Loan B, and deposited funds to satisfy and discharge its senior secured notes, which she said “will be redeemed at par on or about June 15th.” → Homebuilder Earnings: D.R. Horton Sticks Out as Pulte & NVR Sales Tank Mironova also noted that only one commercial mortgage loan remains on the balance sheet: a non-accrual loan secured by a hotel property in Chicago with an amortized cost basis of $42 million and an upcoming May maturity. She said the company expects repayment through a sale of the underlying property, and that a purchase agreement was executed during the first quarter with “hard money deposits received by the sponsor.” For the first quarter of 2026, Mironova reported net income available to common stockholders of $23 million, or $0.16 per diluted share. Distributable earnings were $31 million, or $0.22 per diluted share. → Did Qualcomm Just Put Apple in Check? Net interest income for the quarter was $36 million, compared to $39 million in the first quarter of 2025. Mironova said interest income from commercial mortgage loans increased modestly to $150 million from $144 million, driven primarily by loan portfolio growth of about $1.2 billion (on an amortized cost basis) compared to March 31, 2025, which outweighed the impact of lower average index rates. Interest expense rose to $114 million from $105 million, reflecting higher average secured debt balances associated with funding the portfolio compared to last year. Book value per share was $12.01 at March 31, down from $12.14 at the end of the fourth quarter of 2025. Mironova attributed $0.10 of the decrease to “the impact of vested and delivery of restricted stock units,” which she said is a trend typically observed in the first quarter. Mironova also provided a pro forma figure tied to the portfolio sale. She said pro forma book value per share at the closing—without giving effect to REO quarter-to-date activity and certain quarterly accruals—was $12.15, reflecting reversal of general CECL allowance in excess of discount and closing costs for the sale, as well as accretion from share repurchases. Mironova said the company repurchased approximately 2.9 million common shares during the first quarter at a weighted average price of $10.52 per share. After quarter-end, ARI repurchased an additional 3.9 million shares at a weighted average price of $10.72, bringing total year-to-date repurchases to about 6.8 million shares. She said the repurchases resulted in $0.07 of book value per share accretion year-to-date, with $0.03 in the first quarter and $0.04 in the second quarter to date. Mironova also said the board authorized a new share repurchase program, leaving the company with “up to a total of $150 million available” to repurchase common stock. Asked by KBW’s Jade Rahmani why ARI is buying back stock ahead of a strategic review, Rothstein said the company has “significant confidence in where the book value per share is today” and that the amount of capital used for repurchases is “not material” in terms of limiting strategic options for the remaining capital. Rothstein said two assets—The Brook, a multifamily property in Brooklyn, and The Mayflower Hotel in Washington, D.C.—represent about 80% of the REO net equity value. The Brook: Rothstein said the market-rate residential component is about 80% leased, while affordable units are roughly 70% leased, with 95% of units selected. He said both components are expected to reach stabilization by the summer, and management is monitoring the market and evaluating an exit strategy “either pre or post-stabilization,” while continuing efforts to add value to the western parcel. The Mayflower Hotel (Washington, D.C.): Rothstein said the hotel had a strong first quarter with net cash flow “well ahead of budget,” driven by margin improvements and higher occupancy. He said the company sees opportunity for continued year-over-year improvement and expects more clarity on an exit strategy in the second half of the year, subject to market conditions. The Cortland Grand: Rothstein said first-quarter performance was below budget due to broader market softness. However, he said business interruption insurance related to offline units and expected benefits from the upcoming Soccer World Cup over the summer should bring full-year performance in line with expectations. He added the company is in active dialogue with potential buyers regarding alternative uses as it evaluates exit options. Two former hospital assets: Rothstein said the two remaining former hospital assets represent about $24 million of combined book value. He said the company is engaged in rezoning efforts and discussions with local operating partners to determine optimal exit scenarios. Rothstein said management, the board, and senior investment professionals at Apollo are evaluating a range of commercial real estate-related strategies, and that the company has been speaking with bankers and industry experts since the end of January. He said ARI anticipates providing an update “in the coming months.” While Rothstein declined to discuss specific asset types being considered, he said he does not envision waiting until the end of the year to provide direction, adding that he expects “meaningful progress” in the next few months and “significant clarity” by the next time the company speaks with investors, “if not sooner.” He also said any strategic path needs to be pursued only with “full confidence” it will create more than the company’s current book value per share. In response to a JPMorgan question about how the company might invest its cash while the review continues, Mironova said CMBS and agency securities are “typically good REIT assets,” and added that the company has “a number, more than a handful at this point, of high yield in deposit accounts” as another option. She said the REIT asset test is measured as of quarter-end, while the income test is annual. When asked about leverage, management responded, “No leverage as we envision to date.” Rothstein emphasized that the priority is ensuring cash remains available for strategic paths under consideration and not putting capital at risk from market movements. On dividends, Rothstein said declarations will remain subject to board approval and that the company will announce the second-quarter dividend “a few weeks prior to the end of the quarter” according to its customary schedule. He reiterated that ARI intends to continue paying a quarterly dividend while evaluating strategic opportunities and that the previously indicated target—an annualized dividend yield of roughly 8% on book value per share—“remain[s] intact.” Rothstein added that given the company’s cash balance and conservative investment approach, future dividends “likely will contain a significant return of capital component.” Rahmani also asked how REO resolution might interact with the strategic review if ARI ultimately chose to return capital rather than pursue a new strategy. Rothstein said nothing is set in stone, but suggested a structure more akin to a liquidating trust would be “more likely” than a bulk REO sale, which he said could carry a discount, because the company would want time to maximize value from each of the four REO assets. Apollo Commercial Real Estate Finance, Inc (NYSE: ARI) is a real estate finance company structured as a real estate investment trust (REIT). The company focuses on originating, acquiring and managing a diversified portfolio of commercial real estate debt and preferred equity investments. As an externally managed vehicle, ARI leverages the expertise and resources of an affiliate of Apollo Global Management, a leading global alternative investment manager. ARI's investment strategy is centered on providing first mortgage loans, mezzanine debt financing, bridge loans and preferred equity across a broad range of property types, including office, retail, industrial and multifamily assets. The article "Apollo Commercial Real Estate Finance Q1 Earnings Call Highlights" was originally published by MarketBeat.

Image source: The Motley Fool. Wednesday, April 29, 2026 at 10 a.m. ET Chief Executive Officer — Stuart Rothstein Chief Financial Officer — Anastasia Mironova Chief Investment Officer — Scott Weiner Need a quote from a Motley Fool analyst? Email [email protected] Stuart Rothstein: Thank you, operator. Good morning, and thank you for joining us on the Apollo Commercial Real Estate Finance, Inc. First Quarter 2026 Earnings Call. I am joined today by Anastasia Mironova, our Chief Financial Officer; and Scott Weiner, Chief Investment Officer. This call comes at a pivotal moment for ARI. As previously announced, we completed the sale of the company's $9 billion loan portfolio to Athene on April 24. Following repayment of ARI's financing facilities, other indebtedness and transaction expenses, ARI's total assets now consist of approximately $1.3 billion of cash, along with 4 REO assets representing approximately $900 million in gross value. The sale delivered ARI stockholders a compelling premium to where the stock has traded in recent years, and we believe this outcome demonstrates our unwavering commitment to maximizing stockholder value. As previously indicated, ARI's management team, Board of Directors and other senior investment professionals at Apollo are in process of evaluating a range of commercial real estate-related strategies for ARI with the goal to deliver attractive, go-forward returns for stockholders. We have spent a significant amount of time since the announcement at the end of January, exploring different strategies and speaking with bankers and other industry experts. We anticipate having an update on the strategy exploration in the coming months. Shifting now to a brief update on the 4 remaining REO assets. As a reminder, 2 assets, the Brook, a multifamily asset in Brooklyn and the Mayflower Hotel in Washington, D.C. represent approximately 80% of the REO net equity value. At the Brook, the market rate residential component is approximately 80% leased and affordable units are approximately 70% leased, with 95% of units selected. Both components are expected to reach stabilization by this summer. We continue to monitor the market and think through the appropriate exit strategy, either pre- or post-stabilization while continuing efforts to add value to the Western parcel. With respect to the 2 hotels, the Mayflower had a strong first quarter, with net cash flow well ahead of budget, driven by margin improvements and higher occupancy. We see opportunity for continued improvement in year-over-year performance and subject to market conditions, we expect more clarity on exit strategy in the second half of the year. Turning to the Courtland Grand. First quarter performance was below budget due to broader market softness, though we expect business interruption insurance from the offline units and the benefit from the upcoming soccer World Cup over the summer to bring full year performance in line with our expectations. We are in active dialogue with several potential buyers regarding alternative uses as we think through potential exit strategies. Lastly, for the 2 remaining former hospital assets, which combined represent approximately $24 million of book value, we are actively engaged in rezoning efforts and in dialogue with local operating partners to determine optimal exit scenarios. Before I turn the call over to Anastasia, in anticipation of a question, I just want to provide an update on dividend policy going forward. Consistent with past practice, declaration of any dividends will remain subject to the approval of the Board of Directors, and we will announce the second quarter dividend a few weeks prior to the end of the quarter as per the customary schedule. As we disclosed at the time of the original announcement of the loan sale, ARI intends to continue paying a quarterly dividend as we assess strategic opportunities. We also previously indicated a target dividend resulting in approximately an 8% annualized dividend yield on book value per share of common stock. The goal and target remain intact. It is worth noting that given the cash balance held at ARI and the desire to invest that cash conservatively while evaluating strategic options, any dividends declared for future quarters likely will contain a significant return of capital component. With that, I will turn the call over to Anastasia to work through our first -- to walk through our first quarter financial results. Anastasia Mironova: Thank you, Stuart. Good morning, everyone. For the first quarter of 2026, ARI reported net income available to common stockholders of $23 million or $0.16 per diluted share of common stock. Distributable earnings for the quarter were $31 million or $0.22 per diluted share. Net interest income for Q1 2026 was $36 million compared to $39 million in Q1 2025. Interest income from commercial mortgage loans increased modestly to $150 million from $144 million due primarily to loan portfolio growth of about $1.2 billion on amortized cost basis compared to March 31, 2025, outweighing the impact of lower average index rates. Interest expense increased to $114 million from $105 million, reflecting higher average secured debt balances associated with portfolio fundings compared to last year. Throughout the quarter, we opportunistically repurchased approximately 2.9 million shares of common stock at a weighted average purchase price of $10.52 per share. Following the quarter end, we repurchased an additional 3.9 million shares at a weighted average price of $10.72, bringing total repurchases year-to-date to approximately 6.8 million shares. This activity resulted in $0.07 of book value per share accretion year-to-date with $0.03 in Q1 and $0.04 in Q2 to date. In April, our Board of Directors has authorized a new share repurchase program, and we now have up to a total of $150 million available for the repurchase of common stock. Common equity book value per share was $12.01 at March 31 compared to $12.14 at the end of Q4 2025, with $0.10 of the decrease attributable to the impact of vesting and delivery of restricted stock units, the trend typically observed during the first quarter of the year. Pro forma book value per share at the closing of the portfolio sale without giving effect to real estate owned quarter-to-date activity and certain quarterly accruals is $12.15, reflecting reversal of general CECL allowance in excess of discounts and closing costs for the portfolio sale as well as accretion from the share repurchases, as referenced earlier. Turning now to the portfolio sales. I want to highlight a few key points from the transaction. In addition to repaying our secured borrowing facilities, we have fully repaid the outstanding balance of our Term Loan B and deposited funds to satisfy and discharge our senior secured notes, which will be redeemed at par on or about June 15. As Stuart indicated, our balance sheet is now predominantly represented with cash and net equity in our real estate owned assets. The only commercial mortgage loan currently remaining on our balance sheet is the loan secured by a hotel property in Chicago, which remains on nonaccrual status. The loan has an amortized cost basis of $42 million and an upcoming maturity in May, at which point we expect it to be repaid through the sale of the underlying property, the purchase agreement for which was executed during Q1 with hard money deposits received by the sponsor. With that, I will open the call for questions. Operator? Operator: [Operator Instructions] Our first question comes from Jade Rahmani with KBW. Jade Rahmani: Could you comment on the rationale to be buying back stock at this point in advance of the strategic review? It's reasonable to expect that capital could be needed to consummate an acquisition or some transaction. And so I'm just curious about your thoughts on that. Stuart Rothstein: Yes. I think from our perspective, Jade, look, we obviously, in light of the sale and what's left in the portfolio, have significant confidence in where the book value per share is today. And as we think about using some amount of capital to buy back stock, I would say the amount that we're using to buy back stock is not material as we think about having any impact on our options to do something strategically with the remaining capital in the vehicle. Jade Rahmani: And then regarding the strategic review, just wondering if you could comment on asset classes or give any broad commentary as to how your thinking is evolving. I noticed that Blackstone is planning to IPO a data center REIT and wondering if that type of construction could be similar to something you might explore. Stuart Rothstein: I'm not going to give any specific comments on asset types. I guess what I would say is a few clarifying comments. While the agreement we announced several months ago indicated we had until the end of this year to decide the strategic path we were headed in, I think it's safe to say I don't envision a scenario where we are sitting here until the end of the year and making a grand announcement. I think there will be meaningful progress made in the next few months and significant clarity provided the next time we are speaking to all of you, if not sooner. The other thing I would say is, as we think about strategic alternatives, our view fundamentally is we have created $12 a share of value in the ARI box. And anything we would think about doing strategically needs to be done with us having full confidence that what we are considering/pursuing will create more than the current book value per share for shareholders. Operator: Our next question comes from Rick Shane with JPMorgan. Richard Shane: Look, it sounds like we'll have additional clarity within the next 3 months. And for now, you guys are sitting on a lot of cash. You talked about sort of doing something in the near term to invest that cash. How should we think about that? Is this -- are you -- how much flexibility do you have? Does it have to be, for example, CMBS given the mandate of the company? Can you invest in agency mortgage-backed securities and mitigate credit risk, but take on some duration risk? Is this just going to be a treasury portfolio? How do we think about the asset class and potentially the leverage that you would take given some of the facets of those different asset classes or loan types? Anastasia Mironova: Rick, this is Anastasia. So maybe to start with the first part of your question, CMBS, agency securities, all of these are typically good REIT assets, CRE CLOs, maybe not good REIT assets, but there are structures which could allow us to invest in those if we wanted to. And other than that, we have a number -- more than a handful at this point of high-yielding deposit accounts, which are providing us a pretty attractive yield. So that's an option as well. Richard Shane: And is the REIT test based upon the average over the quarter? Or is it actually based simply on 6/30. So can you -- do you have flexibility intra-quarter and then can be in compliance at the very end of the quarter to meet your obligations? Anastasia Mironova: Technically, the asset test is as of the quarter end. There is also an income test, which is on an annual basis. Richard Shane: Got it. Okay. And what about leverage on any of those different classes? Anastasia Mironova: No leverage as we envision to date. Stuart Rothstein: I mean, to be simple, like it's not about return, Rick. It's about making sure the cash is there if we go down any of the strategic paths we're considering. We don't want to put any of the capital at risk today for market movements that sometimes occur. Operator: [Operator Instructions] Our next question comes from Jade Rahmani with KBW. Jade Rahmani: Just wanted to ask about the REO resolution paths and how that interacts with the strategic review because let's just say the strategic review did not come up with a definitive strategy in which you were confident that new company would trade above $12 a share and you decide to return the money. Would you look to bulk sale the REO portfolio or put that in a liquidating trust? Just wanted to get some color you might provide on that. Stuart Rothstein: Yes, nothing set in stone today, Jade, but I think more likely the latter, which would be we'd want to give ourselves the time to make sure we maximize the value of each of the four REO assets, and that is probably more likely some form of liquidating trust as opposed to just a bulk sale, which might have some sort of discount attached to it. Jade Rahmani: And then if I could ask a follow-up just broadly about the macro picture with the 10-year today now at 4.4% and the mortgage REITs down 3% to 5% today, including ARI, which had an unsurprising quarter, in fact, a positive quarter. So what are your thoughts about the interest rate outlook and how that might complicate either the strategic review or equity return calculations in real estate? Stuart Rothstein: Well, first of all, I think you just validated your own initial question on share repurchase for ARI, given what's going on in the market today. Look, I think it's something -- historically, we've not been -- spent a ton of time trying to predict interest rate markets and try to think about value through cycles vis-a-vis interest rates. But I do think, given the uncertainty in the market today, when we've created effectively a capital box that is mostly cash right now, I would say it just has implications as higher rates, inflation, potential impacts on employment, all factor into thinking about future strategies versus the value of what we've created for people and at some point, deciding we're better served to let others decide what they want to do with their capital in the future. Operator: Thank you. I would now like to turn the call back over to Stuart Rothstein for any closing remarks. Stuart Rothstein: Thank you, operator. And as always, myself, Anastasia, Hilary are around if people have follow-up questions after the call. Thank you. Operator: Thank you. This concludes the conference. Thank you for your participation. You may now disconnect. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. ARI Q1 2026 Earnings Call Transcript was originally published by The Motley Fool

Image source: The Motley Fool. Wednesday, July 30, 2025 at 10 a.m. ET Chief Executive Officer — Stuart A. Rothstein Chief Investment Officer — Scott Weiner Chief Financial Officer — Anastasia Mironova Need a quote from a Motley Fool analyst? Email [email protected] Stuart A. Rothstein: Thank you, operator. Good morning and thank you for joining us on the Apollo Commercial Real Estate Finance Second Quarter 2025 Earnings Call. I'm joined today, as usual, by Scott Weiner, our Chief Investment Officer; and Anastasia Mironova, our Chief Financial Officer. ARI delivered strong performance in the second quarter of 2025, marked by significant progress across originations, portfolio management and balance sheet optimization. [indiscernible] in loan originations increased as we committed to $1.4 billion of new loans during the quarter, quickly redeploying capital we have received back from both repayments and ARI's focus assets. Year-to- date, ARI has committed $2 billion to new loans. Repayments in the portfolio continue to track expectations with borrowers making progress on their business loans having multiple options for refinancing. As evidenced by the second quarter activity, we are confident in our ability to redeploy this capital into newly originated loans and continue to identify attractive opportunities across both the United States and Western Europe. ARI continues to benefit from the breadth of Apollo's real estate credit platform and the team's robust originations pipeline to access transaction flow that matches capital received from repayments, eliminating cash drag and enabling ARI to build a diversified loan portfolio. Three of the loans closed in the second quarter were secured by residential properties, continuing ARI's thematic overweight to a sector benefiting from strong secular tailwinds. Loans on residential properties now comprise approximately 25% of ARI's portfolio, representing ARI's largest property type concentration. Importantly, approximately 2/3 of the residential loans in ARI's portfolio have originated over the past 24 months, benefiting from a valuation reset and enhanced credit quality. In Europe, which represents approximately 50% of ARI's portfolio and 18% of originations year-to-date, the market is gaining momentum, benefiting from recent interest rate cuts that have reenergized acquisition activity. Our local team is capitalizing on this resurgence with a healthy pipeline across property types, and we continue to believe ARI's international diversification remains a strategic advantage. Turning now to the loan portfolio and a progress update on our focus assets. At quarter end, the carrying value of ARI's portfolio had increased 12% from the prior quarter and was comprised of 53 loans totaling approximately $8.6 billion. No additional asset-specific CECL allowances were recorded during the quarter. We saw continued sales momentum at 111 West 57th Street with 9 units closed during the quarter, generating $170 million in proceeds, $141 million of which reduced ARI's basis following the full repayment of the senior loan in April. ARI is now senior in the capital stack and all future proceeds will go directly to repaying its exposure. At the Brook, ARI's multifamily development in Brooklyn, the leasing office opened in June and tenant move-ins began this month, marking an important milestone in the asset's progress. Lastly, in Cincinnati, the marketing process for Liberty Center has commenced as we pursue exiting the asset. We remain intensely focused on executing our value maximization plans for our focus assets, which is integral to our strategy of converting underperforming capital into higher-yielding reinvestment opportunities. We expect this capital rotation will continue to have a positive impact on ARI's earnings in the latter half of 2025 and throughout 2026. Before I turn the call over to Anastasia, I want to highlight the strong execution we had in connection with our -- with the refinancing of our outstanding Term Loan B facilities in the past quarter. In June, we completed a new 5-year floating rate $750 million Term Loan B, which repaid our existing 2 Term Loan Bs, which had pending maturities in 2026 and 2028, respectively. The new loan bears interest at SOFR plus 3.25% and enabled ARI to term out liabilities at attractive pricing with a well-diversified roster of high-quality investors, highlighting the market's confidence in ARI. Following the refinancing, ARI's next corporate debt maturity is now not until June of 2029. With that, I will turn the call over to Anastasia to review ARI's financial results for the year. Anastasia Mironova: Thank you, Stuart, and good morning, everyone. ARI reported distributable earnings of $36 million or $0.26 per share of common stock for the first quarter with GAAP net income of $18 million or $0.12 per diluted share of common stock. Distributable earnings for the second quarter of 2025 represent an 8% increase over the first quarter and provide dividend coverage of about 1.04x. Our loan portfolio ended the quarter with a carrying value of $8.6 billion, up from $7.7 billion at the end of Q1. The weighted average unlevered yield of our portfolio was 7.8%. As Stuart mentioned, we had a strong quarter of loan originations totaling $1.4 billion in commitments. We also completed an additional $394 million in add-on fundings for previously closed loans. Year-to-date, ARI has originated over $2 billion of new commitments and completed a total of $467 million of add-on fundings for previously closed loans. Repayments and sales totaled $631 million during the quarter. Importantly, with the continued redeployment, 41% of our loan portfolio as of quarter end was originated post the 2022 rapid rise in interest rates and subsequent reset in property valuations. With respect to risk ratings, the weighted average risk rating of the portfolio at quarter end was 3.0, unchanged from the previous quarter end. There were no asset- specific CECL allowances recorded during the quarter and no downgrades in risk ratings across the portfolio. Our general CECL allowance increased this quarter by $3.1 million, reflecting growth of the loan portfolio from the previous quarter end. Total CECL allowance and percentage points of the loan portfolio amortized cost basis is down slightly quarter-over-quarter from 475 basis points to 429 basis points. Subsequent to quarter end, Apollo and the Commonwealth of Massachusetts reached a settlement agreement in which the Commonwealth agreed to pay us and other Apollo co-lenders an additional $44 million as compensation for the previous taken of the hospital by eminent domain. ARI's share of these proceeds is approximately $18 million. The payment is expected to be received before the end of August, and the lawsuit will be dismissed with prejudice with all related claims released. These proceeds will result in book value per share pickup for ARI in the following quarter and will be recycled into new loan originations, leading to further upside to earnings. Moving on to the right-hand side of the balance sheet. During the quarter, we were very active with optimizing our liabilities. In addition to the refinancing of our term loans that Stuart mentioned, we closed 3 new secured credit facilities and upsized an existing credit facility, which provided an additional $1.4 billion of aggregate borrowing capacity. Liquidity in the secured borrowing market continues to be plentiful as lenders get favorable capital treatment for these facilities and in many instances, prefer them over directly lending to properties. The company ended the quarter with $208 million of total liquidity comprised of cash on hand, committed undrawn credit capacity on existing facilities and loan proceeds held by the servicer. Our book value per share, excluding general CECL allowance and depreciation, was $12.59, a slight decrease from last quarter. With that, I would like to turn the call back to Stuart Rothstein. Stuart A. Rothstein: Thank you, Anastasia. Before we turn the call back to the operator to start with questions, I just want to highlight that from those of us at Apollo, our thoughts and prayers are with our friends and colleagues at Blackstone after the senseless tragedy that took place there this past Monday. We have heavy hearts, and I'm sure many of you on the call do as well. With that, I will turn the call over to the operator. Operator: [Operator Instructions] Our first question comes from Doug Harter with UBS. Douglas Michael Harter: Just hoping we could get a little bit into more of the kind of the theme of being able to kind of recycle your capital. It seems like 111 57th is progressing. How do you think about the Brook now that you're starting to lease? What could be a time frame of, a, I guess, starting to get some cash flow from that asset and b, being able to kind of move on from that and move it into targeted assets? Stuart A. Rothstein: Yes. Look, I think at a high level, and I'll just sort of refresh for everybody's memory, the Brook is roughly 500-plus units, of which 70% are market rate, 30% are affordable. We have started leasing on the market rate side of things as the affordable needs to go through a process vis-a-vis a lottery and qualifications, et cetera. I think the hope for us, Doug, is that we make meaningful progress on the leasing side between now and the end of the year. I think at this point in just the first month, we're sort of approaching 15% leased on the market rate side of things. I think with progress made on the leasing side, the asset will turn modestly cash flow positive in the early part of next year. And then the real capital event is whether we decide to bring in a partner or sell the asset outright sometime probably between first and second quarter of next year. And as a reminder, it's roughly just shy of $300 million worth of capital today that is effectively earning 0 from our perspective. Douglas Michael Harter: Got it. And in your answer, when you kind of said the decision of selling it outright or bringing in a partner, is it a consideration to kind of retain the asset and have kind of a long-duration cash flows? Or is the ultimate plan to kind of monetize and move on? Stuart A. Rothstein: The ultimate plan is to monetize and move on. I think the halfway step of bringing in a partner would only be relevant to the extent we thought the market fully wasn't providing value to us while we continue to lease up and stabilize. Operator: Our next question comes from Jade Rahmani with KBW. Jade Joseph Rahmani: A follow-on to Doug's question on the Brook. I believe that there's some land parcels that are also either owned and controlled or there's some optionality around that. Can you give some color and if this could be material upside for shareholders? Stuart A. Rothstein: Yes. There is one small parcel that we refer to for now as the Western parcel, if I've got my geography correctly. And in between the Brook and the Western parcel, there's actually a building that we don't know in between us that sits on 2 parcels. We are in discussion too early to know what will happen with the ownership of those parcels, Jade, around either acquiring air rights or the assets outright that we could potentially greatly increase the density of what can be done on the Western parcel. And if we're able to figure it out, I think there's definitely upside to the ARI shareholders, but I would say too early to predict the likelihood of that right now, but discussions are ongoing. Jade Joseph Rahmani: On 111 West 57th, where do you expect the basis amortized cost in the loan to be at year-end or maybe early, say, 1Q of next year? Stuart A. Rothstein: Look, I think it's a bit of a timing question as you think about when units get sold. At this point, there's 11 units left. So there's definitely activity going on with various potential buyers. Our net basis today from a carrying value perspective is about $270 million. We think we will chip away at that between now and the end of the year, given dialogue taking place, but I don't want to sort of give you a specific number per se. Jade Joseph Rahmani: Okay. And one overarching question has to do with the capital structure and leverage of the company. Your leverage is around 4x today, but that includes significant non-earning assets. So do you plan to maintain leverage at the current level and therefore, convert these assets into earning assets and drive dividend growth? Or in that process, do you anticipate reducing leverage? Stuart A. Rothstein: I think, look, I think where we're running leverage is in the ballpark of where we'd expect to run it in the future. Keep in mind that even though the Brook is a non-earning asset, it does have a construction loan against it. So that is an asset that we can get capital back and put to work pretty meaningfully without dramatically changing leverage levels. But I think our view is there's enough capacity in the company to get back the capital we get back and redeploy it all at leveraged ROEs that are very consistent with where we've been deploying capital to date and drive, as you've seen various estimates from us of meaningful earnings growth, somewhere in the neighborhood of 30% to 40% on where we are, if you assume it all comes back and we're able to redeploy it effectively. Operator: Our next question comes from Harsh Hemnani with Green Street. Harsh Hemnani: Maybe one on portfolio size, right? Of course, it's grown. Can we expect it to continue to grow? How are you thinking through that in the near to medium term? Stuart A. Rothstein: Look, we never predict the actual size. But I think if you assume we are able to continue to work on focus assets, pull capital back, which effectively is equity and then redeploy the equity at 3 to 4 turns of leverage, you're going to see continued growth in the portfolio size, right? Just for reference, at one point, with effectively the same capital base, the portfolio was north of $10 billion. I'm not saying that's the number, but for each dollar of capital I'm able to bring back from a focus asset or under-earning asset, I could put it into a new loan that headline-wise will be 3 to 4 turns levered when we get it done. Harsh Hemnani: Got it. That's helpful. And so then that sort of brings up the question of maybe funding some of this growth, and you touched on it a little bit. But it seems like a lot of the equity that is coming back to your point, is already somewhat levered even from the REO assets. So is it probably fair to assume that incremental growth from here will continue to be driven by leverage? Stuart A. Rothstein: Look, I think it will be -- not all of the assets are levered today. Certainly, 111 West 57th is not levered today. Liberty Center is underlevered relative to what a loan asset would be. So I think it will be both a redeployment of equity and then sort of typical leverage against that equity relative to what we do when we even get repayments back. Operator: Our next question comes from John Nickodemus with BTIG. John Ryan Nickodemus: We've seen more activity in the CRE transaction market in recent weeks, something I'm sure your team has been pleased to see. What are your expectations for the commercial real estate transaction market through the end of this year? And how is that affecting your plans for ARI looking forward? Stuart A. Rothstein: I mean, look, we agree with the premise of your question, whereas activity has definitely picked up, and we are seeing it both on the credit side of our real estate business as well as the areas where we're active on the equity side of our real estate business. Good news is there's more capital, more deal flow, more things to look at, like the challenge like anything is there's no dearth of capital in the world right now. I think a lot of confidence in our team, both here in the U.S. and in Europe to continuing to find things that work for ARI and what ARI is attempting to achieve from a levered ROE perspective. I think we are confident that the market will continue to offer us enough to look at that we will be able to find things that fit nicely with both return as well as other considerations for ARI, whether it be geography, property type, et cetera. But we expect the market to be pretty robust between now and the end of the year, just given what we're seeing in terms of deal flow pipeline and level of activity to date. John Ryan Nickodemus: Great. Really appreciate that Stuart. And the other one for me. We've seen some of your peers move to extend the duration of their portfolios, whether that's through investing in triple net real estate or adding securities to their portfolio. I was just curious if that's something that your team at ARI is monitoring or looking to add in the near to medium term. Stuart A. Rothstein: Yes. I would describe it as best as monitoring or it's a constant source of dialogue. As a firm, we've got capabilities, both in the net lease space and in the securities side. I think this is now a 16-year debate between Scott and I. I think the challenge we always face is if we are going to do something that "broadens the strategy." I think there's a desire to do it in a scale and size such that it's meaningful and that we're not just talking about sort of a one-off deal. Obviously, life would be easier in some respects if you could extend duration, but it needs to make sense from a credit and return perspective. So on the radar screen, given existing capabilities inside of Apollo, definitely something that we talk about episodically. But I would say sitting here today, no meaningful shift in strategy expected. Operator: Our next question comes from Rick Shane with JPMorgan. Richard Barry Shane: I apologize if I -- this is redundant. We're bouncing around between a lot of calls this morning. From a detailed perspective, the way we look at the provision expense this quarter is it appears to be entirely growth driven related to the increase in earning assets, and it looks like it's probably the general reserve was probably put on in the mid-30s to low 40s in terms of basis points on a reserve rate. Is that correct? And is that the way we should be modeling any further expansion of earning assets in terms of growth going forward? Anastasia Mironova: Rick, this is Anastasia. Yes, this is correct. So you're correct in saying that the growth in general CECL quarter-over-quarter is largely driven by the growth in the loan portfolio. Richard Barry Shane: And no changes to your macro assumptions? Anastasia Mironova: No. Richard Barry Shane: Great. Okay. And then just a broader question, which is a theme we're exploring with everybody this quarter. The market is -- the commercial real estate market is kind of at cross currents right now, and it's probably -- there are geographies, there are loan types that are improving. There are some that remain challenged. I'm curious as you sort of approach the same cross currents of moving from being purely defensive to putting a foot forward, how you're looking at those opportunities where you're going to continue to be defensive? Are there categories that have been out of favor you want to wade back into? Where do you see the best opportunities? Scott Weiner: Yes, it's Scott. Look, I'll say, look, we continue to be very constructive on all forms of housing. And so for us, that would include senior housing private pay, where we've been active in the U.K. and also have a few deals in the U.S. we're working on. Student housing, hotels have kind of always been a part of our portfolio, but there's times we've been more active than not. And I think this is a time that certain types of hotels we are finding interesting. On the office front, certainly, transaction activity has picked up, and we're starting to see stuff. I think for now, not really looking to do that in ARI. We're doing that elsewhere in the platform. I think there still continues to be a very large focus on the percentage of office in our portfolio. And based on our long-term lease deal in London, it doesn't seem that people differentiate different quality of office deals. So I think for that, we'll probably not be -- we won't be seeing ARI doing office deals. And then look, we continue to find deals in both U.K., Europe and U.S. of interest. So it's really just continuing -- continue what we've been doing. I don't see us really doing ground-up development ex long-term lease data centers. I think the construction -- there are interesting deals, but it's challenging to leverage and also put the money out, whereas I think some of the hyperscale deals that we've done are interesting, and we're able to work with our bank partners and put on accretive financing. So I think that's the only area where you'll see us doing construction in ARI. Richard Barry Shane: Thank you for the insights and really sort of swinging that pitch for us, we appreciate it. Operator: Our next question comes from Jade Rahmani with KBW. Jade Joseph Rahmani: Would prevent the dividend from being increased? And do you also expect any change to the long-standing policy -- dividend policy of the company to generally pay out the lion's share of earnings as dividend? Stuart A. Rothstein: I mean, look, the short answer, Jade, is there's nothing material from an NOL perspective that would "give us tax protection" to rising earnings. And I think the short answer to the second part of your question is that, yes, the expectation is the goal continues to be to give our investors as much of earnings as possible in the form of a dividend. Like always, we'll look at things on a quarter-by-quarter basis. We'll also try and take a somewhat forward-looking approach as I think our desire is to avoid paying special dividends, try and keep things somewhat stable from a quarterly perspective, not lose a lot of sleep if things bounce around $0.01 or $0.02 higher or $0.01 or $0.02 low in any given quarter. And we'll always review policy with the Board on a quarterly basis. So I think your question is a good one. And I think we expect to handle things going forward the way we've handled them in the past. Jade Joseph Rahmani: And lastly, I wanted to ask about seniors housing. It seems to be an area of focus of the company. And is there a broader thesis you can talk to in that space? I know the demographic trends are particularly favorable in that asset class. Scott Weiner: Yes. No, I think that's exactly it. I mean I think certainly not every market, but most markets and certainly in the U.S. and U.K., I think, have a supply-demand imbalance. Clearly, the demographic, as you said, continues to grow. We're very much focused on private pay. So these are people who can afford and are choosing to live here. I would say it's also from an acuity basis, much more focused on the independent living, maybe a little bit of assisted living, but really not -- this is not skilled nursing or memory care. These are just older people who want to enjoy their golden years, if you will, and be with other people. And we're doing it generally more newer developed properties and stuff that have all the amenities and things. So again, we think it's an extension of our housing thesis. Operator: I would now like to turn the call back over to Stuart Rothstein for any closing remarks. Stuart A. Rothstein: Thank you all for participating today. As always, myself, Anastasia, Hilary are available if people have follow-up questions after the call. And I hope everybody enjoys the rest of the summer. Thank you. Operator: Thank you. This concludes the conference. Thank you for your participation. You may now disconnect. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. ARI Q2 2025 Earnings Call Transcript was originally published by The Motley Fool

Apollo Commerical Finance (ARI) came out with quarterly earnings of $0.22 per share, missing the Zacks Consensus Estimate of $0.29 per share. This compares to earnings of $0.24 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -24.14%. A quarter ago, it was expected that this real estate investment trust would post earnings of $0.27 per share when it actually produced earnings of $0.26, delivering a surprise of -3.7%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. Apollo Commerical Finance, which belongs to the Zacks REIT and Equity Trust industry, posted revenues of $36.07 million for the quarter ended March 2026, missing the Zacks Consensus Estimate by 27.72%. This compares to year-ago revenues of $39.49 million. The company has not been able to beat consensus revenue estimates over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Apollo Commerical Finance shares have added about 14.6% since the beginning of the year versus the S&P 500's gain of 4.8%. While Apollo Commerical Finance has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Apollo Commerical Finance was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.32 on $53.77 million in revenues for the coming quarter and $0.99 on $169.96 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, REIT and Equity Trust is currently in the bottom 41% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Franklin BSP (FBRT), has yet to report results for the quarter ended March 2026. The results are expected to be released on April 29. This real estate investment trust is expected to post quarterly earnings of $0.22 per share in its upcoming report, which represents a year-over-year change of -29%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Franklin BSP's revenues are expected to be $74.2 million, up 48.1% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Apollo Commercial Real Estate Finance (ARI) : Free Stock Analysis Report Franklin BSP Realty Trust, Inc. (FBRT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Management completed the sale of ARI's $9 billion loan portfolio to Athene on April 24, shifting the company's asset base primarily to $1.3 billion in cash and four REO assets. The sale was executed to deliver a premium over recent trading levels and maximize stockholder value amid shifting market dynamics. Performance in the remaining REO portfolio is mixed, with the Mayflower Hotel exceeding budget due to margin improvements, while the Courtland Grand underperformed due to market softness. Stabilization of the Brook multifamily asset is expected by summer 2026, with market-rate units currently 80% leased. Management is actively evaluating new commercial real estate-related strategies to deploy the remaining capital, focusing on paths that exceed the current $12.15 pro forma book value per share. The company utilized its liquidity to repurchase 6.8 million shares year-to-date, viewing the buybacks as accretive given the high confidence in current book value. Management anticipates providing significant clarity on the new strategic direction within the next few months, well ahead of the year-end deadline. The company intends to maintain a quarterly dividend targeting an 8% annualized yield on book value, though future payments will likely include a significant return of capital component. Cash reserves will be invested conservatively in high-yielding deposits or liquid REIT-eligible assets to ensure capital availability for future strategic initiatives. Exit strategies for the remaining REO assets are expected to gain clarity in the second half of the year, with a focus on maximizing individual asset value over a bulk sale. The Courtland Grand is expected to recover to budget levels driven by business interruption insurance and demand from the upcoming soccer World Cup. ARI has fully repaid its Term Loan B and financing facilities, with senior secured notes scheduled for redemption at par around June 15. A single $42 million non-accrual loan remains on the balance sheet, with repayment expected in May 2026 via a property sale already under contract. The pro forma book value of $12.15 reflects the reversal of general CECL allowances following the portfolio sale and accretion from share repurchases. Management flagged macro risks including interest rate volatility and inflation as key considerations in determining whether to pivot to a new strategy or return capital to shareholders. Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management stated that the amount of capital used for buybacks is not material enough to impact future strategic options. The repurchases reflect high confidence in the current book value relative to market trading prices. The primary goal is capital preservation rather than maximizing immediate returns to ensure funds are available for the eventual strategic pivot. Current allocations are focused on high-yielding deposit accounts with no intention of using leverage on these cash-equivalent positions. If a definitive new strategy is not reached, management would likely use a liquidating trust for the four REO assets to avoid the discounts associated with a bulk sale. This approach would allow the time necessary to maximize the value of each specific property. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.

NEW YORK, April 28, 2026 (GLOBE NEWSWIRE) -- Apollo Commercial Real Estate Finance, Inc. (the “Company” or “ARI”) (NYSE: ARI) today reported results for the quarter ended March 31, 2026. Net income available to common stockholders per diluted share of common stock was $0.16 for the quarter ended March 31, 2026. Distributable Earnings per diluted share of common stock (a non-GAAP financial measure defined below) was $0.22 for the quarter ended March 31, 2026. ARI issued a detailed presentation of the Company’s quarter ended March 31, 2026 results, which can be viewed at www.apollocref.com. Conference Call and Webcast The Company will hold a conference call to review first quarter 2026 results on April 29, 2026 at 10am ET. To register for the call, please use the following link: https://register-conf.media-server.com/register/BI073b00720c8d4549af7fd43ddcdbcb97 After you register, you will receive a dial-in number and unique pin. The Company will also post a link in the Stockholders’ section on ARI’s website for a live webcast. For those unable to listen to the live call or webcast, there will be a webcast replay link posted in the Stockholders’ section on ARI’s website approximately two hours after the call. Distributable Earnings “Distributable Earnings,” a non-GAAP financial measure, is defined 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 awards should the holder elect net share settlement to satisfy income tax withholding), (ii) any unrealized gains or losses or other non-cash items (including depreciation and amortization related to real estate owned) included in net income available to common stockholders, (iii) unrealized income from unconsolidated joint ventures, (iv) foreign currency gains (losses), other than (a) realized gains/(losses) related to interest income, and (b) forward point gains/(losses) realized on the Company’s foreign currency hedges, and (v) provision for current expected credit losses. As a REIT, U.S. federal income tax law generally requires the Company to distribute annually at least 90% of its REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that the Company pay tax at regular corporate rates to the extent that it annually distributes less than 100% of its net taxable income. Given these requirements and the Company’s belief that dividends are generally one of the principal reasons shareholders invest in a REIT, the Company generally intends over time to pay dividends to its stockholders in an amount equal to its net taxable income, if and to the extent authorized by the Company’s board of directors. Distributable Earnings is a key factor considered by the Company’s board of directors in setting the dividend and as such the Company believes Distributable Earnings is useful to investors. The Company believes it is useful to its investors to also present Distributable Earnings prior to realized loss on investments, in applicable periods, to reflect its operating results because (i) the Company’s operating results are primarily comprised of earning interest income on its investments net of borrowing and administrative costs, which comprise the Company’s ongoing operations and (ii) it has been a useful factor related to the Company’s dividend per share because it is one of the considerations when a dividend is determined. The Company believes that its investors use Distributable Earnings and Distributable Earnings prior to realized loss on investments or a comparable supplemental performance measure, to evaluate and compare the performance of the Company and its peers. During the three months ended March 31, 2026, the Company recorded no realized losses in the consolidated statement of operations. A significant limitation associated with Distributable Earnings as a measure of the Company’s financial performance over any period is that it excludes unrealized gains (losses) from investments. In addition, the Company’s presentation of Distributable Earnings may not be comparable to similarly titled measures of other companies, that use different calculations. As a result, Distributable Earnings should not be considered as a substitute for the Company’s GAAP net income as a measure of its financial performance or any measure of its liquidity under GAAP. Distributable Earnings are reduced for realized losses on loans which include losses that management believes are near certain to be realized. A reconciliation of Distributable Earnings to GAAP net income (loss) available to common stockholders is included in the detailed presentation of the Company’s quarter ended March 31, 2026 results, which can be viewed at www.apollocref.com. About Apollo Commercial Real Estate Finance, Inc. Apollo Commercial Real Estate Finance, Inc. (NYSE: ARI) is a real estate investment trust that primarily originates, acquires, invests in and manages performing commercial first mortgage loans, subordinate financings and other commercial real estate-related debt investments. The Company is externally managed and advised by ACREFI Management, LLC, a Delaware limited liability company and an indirect subsidiary of Apollo Global Management, Inc., a high-growth, global alternative asset manager with approximately $938 billion of assets under management at December 31, 2025. Additional information can be found on the Company’s website at www.apollocref.com. Forward-Looking Statements Certain statements contained in this press release constitute forward-looking statements as such term is defined in 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 covered by the safe harbor provided by the same. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond the Company’s control. These forward-looking statements include information about possible or assumed future results of the Company’s business, financial condition, liquidity, results of operations, plans and objectives. When used in this release, the words believe, expect, anticipate, estimate, plan, continue, intend, should, may or similar expressions, are intended to identify forward-looking statements. Statements regarding the following subjects, among others, may be forward-looking: higher interest rates and inflation; market trends in the Company’s industry, real estate values, the debt securities markets or the general economy; the timing and amounts of expected future fundings of unfunded commitments; the return on equity; the yield on investments; the ability to borrow to finance assets; the Company’s ability to deploy the proceeds of its capital raises or acquire its target assets; and risks associated with investing in real estate assets, including changes in business conditions and the general economy. For a further list and description of such risks and uncertainties, see the reports filed by the Company with the Securities and Exchange Commission. The forward-looking statements, and other risks, uncertainties and factors are based on the Company’s beliefs, assumptions and expectations of its future performance, taking into account all information currently available to the Company. Forward-looking statements are not predictions of future events. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.