Apollo Commercial Real Estate Finance, Inc

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.apollocreft.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.

Thank you, Operator. Good morning and thank you for joining us on the Apollo Commercial Real Estate Finance fourth quarter and full year 2025 earnings call. I am joined today by Anastasia Maranova, our Chief Financial Officer. In light of our recent announcement to sell ARI's loan portfolio to Athene and the subsequent call we hosted on January 28th, I will provide a brief update on the four REO assets ARI will retain, and then we'll turn the call over to Anastasia to review our Q4 financial results. ARI continues to actively manage its real estate-owned portfolio with a clear focus on improving run rate, cash flow, and maximizing value at exit. With respect to the Brook, which as a reminder is a newly built Class A multifamily tower with 591 residential units and approximately 20,000 square feet of ground floor retail in Brooklyn, New York, The current the property is currently approximately 56% leased across market rate units and is experiencing strong leasing momentum. The retail component is 88% leased to Din Tai Fung with occupancy expected next year. Management Marines focused on completing lease up and achieving stabilization, which is expected later this year, while also evaluating options to unlock additional value from an adjacent owned land parcel. With respect to the two hotels, starting with the Mayflower, management has implemented cost savings initiatives which should provide a notable pickup in net cash flow once completed. In Atlanta, ARI is executing value-add upgrades to the rooms and common areas of the Cortland Grand aimed at driving group business in 2026. Following a fire in October 2025 that temporarily took some rooms offline, The company is receiving business interruption insurance proceeds and continues to evaluate restoration and insurance recovery paths to maximize value. Finally, ARI has a minority interest in a Massachusetts pre-development portfolio consisting of two former hospital sites owned through a joint venture with other Apollo affiliated vehicles and is actively working through zoning changes to increase the value of each site. With that, I'll turn the call over to Anastasia to walk through our financial results for the quarter and the full year.

Thank you, Stuart, and good morning, everyone. In the fourth quarter, ARI reported distributable earnings of 37 million, or 26 cents, per diluted share of common stock. For the full year, distributable earnings totaled 139 million, or 98 cents, per diluted share. Gap net income available to common stockholders was $26 million or $0.18 per diluted share for the fourth quarter and $114 million or $0.81 per diluted share for the full year. During the fourth quarter, we recorded specific CECL allowance of $3 million associated with a 2019 vintage commercial mortgage loan secured by a hotel property in Chicago. The loan has an outstanding principal balance of $45.5 million and is expected to pay off over the course of the next few months. There were no other charges to specific CECL allowance during the quarter, and the overall credit portfolio, I'm sorry, overall credit profile of the portfolio remained stable. The weighted average risk rating of the loan portfolio was at 3.0, unchanged from the previous quarter and prior year. The balance of loans on non-accrual decreased by over $117 million year-over-year, driven primarily by net proceeds received from unit sales at 111 West 57 and partially offset with the addition of Chicago hotel loans to the population of loans on non-accrual. Our exposure to 111 West 57 decreased by $215 million year-over-year and $105 million quarter-over-quarter. with six contracts closed during the fourth quarter. The general FISO allowance was flat compared to previous quarter end at approximately 45 million. Total FISO allowance stood at 383 million at year end. This equates to 418 basis points of the loan portfolio's total amortized costs down from 507 basis points a year ago. The decrease is attributable to sequential portfolio growth year over year. Turning to the portfolio, the fourth quarter and the full year 2025 was highlighted by strong loan origination activity. During the quarter, we committed $1.3 billion to new loans with $1.1 billion funded at close and completed approximately $200 million of gross add-on funding for previously closed loans. For the full year, ARI committed $4.4 billion to new loans with $3.3 billion funded at close and completed about $900 million of cross add-on funding. Loan repayments and sales totaled $852 million in the fourth quarter and $2.9 billion for the full year, reflecting continued borrower execution and portfolio rotation. Notably, over 60% of our loan portfolio is now represented with post-2022 origination. This activity resulted in the overall growth of the loan portfolio, which increased by approximately $1.6 billion year-over-year on amortized cost basis. We ended the year with a total loan portfolio of approximately $8.8 billion by amortized cost with a weighted average and levered all-in yield of 7.3%. The portfolio has 99% for its mortgages and 96% floating rate exposure. The weighted average loan-to-value ratio is approximately 59%. Shifting to the right side of our balance sheet, ARI ended the year with $151 million of total liquidity. We also held over $430 million of unencumbered assets, primarily represented with first mortgage loans and cash flow in REO assets. During 2025, we added $1.8 billion of net financing capacity, including the closing of four new secured credit facilities, the expansion of our revolving credit facility, and the upsize of several other credit facilities. Book value per share was $12.14 at year end, relatively flat to the prior quarter end. With that, we would ask the operator to open the line for questions.