Apollo Commercial Real Estate Finance, Inc

I'd like to remind everyone that today's call and webcast are being recorded. Please note that they are the property of the 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 discuss certain non-GAAP measures on this call, which management believes are relevant to assessing the company's financial performance and are reconciled to GAAP figures in our press release, which is available on the investor section of our website. We do not undertake any obligation to update forward-looking statements or projections unless required by law. To obtain copies of last SEC filings, please visit our website at www.apolloreet.com or call us at 212-515-3200. At this time, I would now like to turn the call over to the company's Chief Executive Officer, Stuart Rothstein. Sir, you may begin. Thank you.

Thank you and good morning and thank you to those of us who are joining on the Apollo Commercial Real Estate Finance first quarter 2019 earnings call. As usual, joining me in New York this morning are Scott Wiener and Jay Agarwal. Given that we recently spoke on our Q4 earnings call, I'm going to keep my prepared remarks brief and we can move to Q&A quickly following Jay's financial summary. The overall tenor of the commercial real estate market generally remains positive. The continued growth in the economy combined with consistently low interest rates has created a favorable environment for real estate operating performance and ongoing real estate investment. Given the importance of continued real estate transaction activity in generating opportunities for ARI, We believe the combination of low interest rates and historically high levels of equity capital embedded within real estate funds and other investment vehicles should bode well for our business going forward. It is worth noting that the capital markets volatility evident in December did lead to a slightly slower start to the real estate market overall in 2019 as equity investors and providers of credit took a somewhat cautious approach early in the new year. However, given the rapid recovery in the capital markets and the record level of dry powder that needs to be invested, we have seen a notable increase in activity and are tracking a number of interesting opportunities in our pipeline. 2018 was a record year for ARI in terms of commitments, and despite a pause in the overall market, we did close four transactions in the first quarter and, as planned, funded capital into previous closed loans, the combination of which has created a portfolio of over $5.2 billion, underwritten to generate what we believe are very attractive risk-adjusted returns. Importantly, our pipeline remains robust, and we are well-positioned to continue adding attractive investments to the portfolio. In addition, credit remains stable, and we continue to see our borrowers achieve their business plans. At the end of last year, we looked at the repayments we received across the portfolio, and in over 90 percent of the transactions, as expected, borrowers repaid the loans because properties achieved their business plans. Before I turn the call over to Jay, I wanted to highlight that during the quarter, we entered into a contract to sell the multifamily property and additional land collateral securing our loan in Williston, North Dakota. While there are no assurances that the sale will be consummated, we are confident that the outcome will be positive for ARI, and we expect to be able to provide additional detail on our Q2 earnings call. With that, I will turn the call over to Jay to review our financial results. Thank you, Stuart.

For the first quarter of 2019, earnings were 68.4 million or 50 cents per share, and GAAP net income was 60.9 million or 43 cents per share. These numbers include $3.7 million or $0.03 per share in prepayment income. During the first quarter, we closed four loan transactions totaling $450 million and funded an additional $110 million for previously closed loans. As of quarter end, our portfolio had an amortized cost of $5.2 billion, which is a 28% increase over Q1 of last year. The portfolio is comprised of 69 loans with a weighted average all-in, unlevered yield of 9.3% and a weighted average remaining term of just under three years. Ninety-three percent of the loans in the portfolio had a floating interest rate. Lastly, with respect to financing, we increased our capacity under the Goldman Sachs facility to 500 million, bringing our total capacity to 3.2 billion from five lenders. We also converted the remaining 5.5% notes and issued 2 million in common shares. And as of quarter end, we had over 360 million of available capital in the form of cash and availability on our credit lines. And with that, we'd like to open the line for questions. Operator, please go ahead.