Q4 2024 Apollo Commercial Real Estate Finance Inc Earnings Call Transcript
Key Points
- Apollo Commercial Real Estate Finance Inc (ARI) experienced a robust level of repayment activity and was very active in deploying capital in 2024, originating $1.9 billion in new loans.
- The company reported distributable earnings of $45 million or $0.32 per share for the fourth quarter, with a strong dividend coverage of 128% for the quarter.
- ARI's newly originated loans were underwritten to generate attractive risk-adjusted returns, benefiting from wider spreads and higher base rates.
- The company has a strong origination pipeline of over $1 billion for the first half of 2025, indicating potential growth in the loan portfolio.
- ARI's portfolio is diversified across a broad spectrum of property types and geographies, with more than half of the originations in the U.K., leveraging Apollo's dominant market position in Europe.
- ARI reported a GAAP net loss available to stockholders of negative $132 million or negative $0.97 per share for the full year.
- The company had another quarter of elevated loan repayments, totaling $830 million, which outpaced new loan closings and add-on fundings, leading to a decrease in the loan portfolio balance.
- There is a substantial specific reserve, and the company is working on dimensionalizing the big risks within the portfolio, which could translate into realized losses.
- The company anticipates that quarterly earnings in 2025 will be lower compared to Q4 2024 due to the impact of rate cuts executed by the Fed.
- Some of ARI's assets, such as the Brooklyn multifamily development and certain REO hotels, are non-income-producing and require strategic management to convert into higher return opportunities.
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 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 GAAP figures in our earnings presentation, which is available in our stockholders section of our website. We do not undertake any obligation to update our forward
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