Q2 2024 Apollo Commercial Real Estate Finance Inc Earnings Call Transcript
Key Points
- Apollo Commercial Real Estate Finance Inc (ARI) reported distributable earnings of $0.35 per share of common stock for the second quarter.
- The company redeployed approximately $505 million of capital into four new transactions during the quarter.
- ARI completed two additional transactions in the United Kingdom totaling approximately GBP270 million following the quarter end.
- The portfolio ended the quarter with a carrying value of $8.3 billion and a weighted average unlevered yield of 8.9%.
- ARI repurchased $38 million of common stock during the quarter at a weighted average price of $10.16 per share, which was $0.11 accretive to book value and generated a 15.3% ROE.
- Steward Health Care, the operator of eight hospitals secured by a loan from ARI, filed for Chapter 11 bankruptcy in May 2024.
- ARI's portion of the loan to Steward Health Care was downgraded from risk rating three to four during the second quarter.
- The company anticipates recording a specific CECL allowance of approximately $90 million in the subsequent quarter due to the Steward Health Care bankruptcy.
- ARI recorded a $7.5 million specific CECL allowance for a subordinate loan secured by an office building in Troy, Michigan, which was downgraded to risk rating five.
- The general CECL allowance increased to 47 basis points of the loan at amortized cost at June 30th, reflecting a more adverse outlook for certain property types.
I'd like to remind everyone that today's call and webcast are being recorded. Please note that they are the property of Apollo Commercial Real Estate Finance Inc., and that any unauthorized broadcast in any form is strictly prohibited. Information about the audio replay of this call is available in our earnings press release.
I'd also like to call your attention to the customary safe harbor disclosure in our press release regarding forward-looking statements. Today's conference call and webcast may include forward-looking statements and projections, and we ask that you refer to our most recent filings with the SEC for important factors that could cause actual results to differ materially from these statements and projections.
In addition, we will be discussing certain non-GAAP measures on this call, which management believes are relevant to assessing the company's financial performance. These measures are reconciled to the GAAP figures in our earnings presentation, which is available in the stockholders section of our website. We do not undertake any obligation to update forward-looking
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