Apollo Commercial Real Estate Finance, Inc. (NYSE:ARI) Q2 2023 Earnings Conference Call August 1, 2023 10:00 AM ET

Company Participants

Stuart Rothstein - President and Chief Executive Officer

Anastasia Mironova - Chief Financial Officer

Scott Weiner - Chief Investment Officer

Conference Call Participants

Sarah Barcomb - BTIG

Jade Rahmani - KBW

Stephen Laws - Raymond James

Richard Shane - JP Morgan

Doug Harter - Credit Suisse

Steve DeLaney - JMP Securities

Operator

I would 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 GAAP figures in our earnings presentation, which is available in the Stockholders section of our website. We do not undertake any obligation to update our forward-looking statements or projections, unless required by law. To obtain copies of our latest SEC filings, please visit our website at www.apollocref.com or call us at (212) 515-3200.

At this time, I'd like to turn the call over to the company's Chief Executive Officer, Stuart Rothstein.

Stuart Rothstein

Thank you, operator, and good morning and thank you to those of us joining us on the Apollo Commercial Real Estate Finance second quarter 2023 earnings call.

As usual, I am joined today by Chief Investment Officer, Scott Weiner; and Anastasia Mironova, ARI's Chief Financial Officer.

ARI had another consistent quarter of distributable earnings prior to net realized losses on investments comfortably above the common stock dividend, driven by higher base rate tailwinds in ARI of $8.3 billion floating rate loan portfolio. Over the past 12 months, the weighted average yield of company's loan portfolio has increased approximately 350 basis points. Despite ARI's solid performance, the real estate market continues to go through a period of recalibration, highlighted by the prevailing negative sentiment around the asset class. Notwithstanding the sentiment, property level fundamentals across most property types remain stable. However, concerns with respect to refinancing risk and the impact of potential -- of the potential economic slowdown persist, creating difference of -- differences of opinion on valuations between buyers, sellers, owners and lenders. As a result, transaction volumes continue to be muted amidst ongoing price discovery.