Summary of ARI Q4 2025 Earnings Call

1Key Financial Results and Metrics

Distributable Earnings: $37 million, or $0.26 per diluted share for Q4; $139 million, or $0.98 per diluted share for the full year.

GAAP Net Income: $26 million, or $0.18 per diluted share for Q4; $114 million, or $0.81 per diluted share for the full year.

CECL Allowance: Recorded a specific allowance of $3 million related to a Chicago hotel loan. Total CECL allowance at year-end was $383 million, equating to 418 basis points of the loan portfolio's total amortized cost.

Loan Portfolio: Grew to approximately $8.8 billion, with a weighted average unlevered yield of 7.3%. Over 60% of the portfolio consists of post-2022 originations.

Liquidity: Ended the year with $151 million in total liquidity and over $430 million in unencumbered assets.

2Strategic Updates and Business Highlights

ARI announced the sale of its loan portfolio to Athene and is focused on managing its remaining real estate owned (REO) assets.

Brook Property: A multifamily tower in Brooklyn is 56% leased with strong leasing momentum. Management aims for stabilization later this year.

Hotels: Cost-saving initiatives at the Mayflower hotel are expected to enhance cash flow. The Cortland Grand is undergoing upgrades and restoration following a fire.

Predevelopment Portfolio: ARI is working on zoning changes for two former hospital sites to increase their value.

3Forward Guidance and Outlook

Management anticipates stabilization of the Brook property by late 2025, with potential monetization contingent on market conditions.

A Q1 dividend of $0.25 per share is expected, subject to board approval, with discussions ongoing regarding future dividends and capital return strategies.

4Bad News, Challenges, or Points of Concern

The company recorded a specific CECL allowance, indicating potential credit risk in its loan portfolio.

There is a disconnect between the stock's trading value and the announced book value, with management acknowledging investor uncertainty regarding future strategies.

The Cortland Grand hotel has faced operational challenges due to a fire, which may impact its performance and recovery timeline.

5Notable Q&A Insights

Management received positive feedback from investors regarding the transaction with Athene but noted concerns about the clarity of future strategies.

Discussions are ongoing about potential options for the company’s future, including the possibility of dissolution or new strategic directions.

The management emphasized the importance of developing a sustainable strategy that could generate long-term growth and value, rather than short-term gains. Overall, while ARI demonstrated solid financial performance and strategic management of its assets, uncertainties regarding future strategy and market conditions remain key concerns for investors.