Apollo Commercial Real Estate Finance (ARI) 8-K Second Quarter 2012 Financial Results and Declares a $0.40

August 7, 2012

Supplemental Financial Information Presentation

Q2 2012

Information is as of June 30, 2012 except as otherwise noted. 

It should not be assumed that investments made in the future will be profitable or will equal the performance of investments in this document.

Exhibit 99.2

1

COMMERCIAL REAL ESTATE FINANCE, INC. (“ARI”)

Legal Disclaimer

We make forward-looking statements in this presentation and other filings we make with the SEC within the meaning of Section 27A of the

Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be

covered by the safe harbor provided by the same. Forward-looking statements are subject to substantial risks and uncertainties, many of which

are difficult to predict and are generally beyond our control. These forward-looking statements include information about possible or assumed

future results of our business, financial condition, liquidity, results of operations, plans and objectives. When we use the words “believe,”

“expect,”

“anticipate,”

“estimate,”

“plan,”

“continue,”

“intend,”

“should,”

“may”

or similar expressions, we intend to identify forward-looking

statements. Statements regarding the following subjects, among others, may be forward-looking: our business and investment strategy; our

operating

results;

our

ability

to

obtain

and

maintain

financing

arrangements;

the

return

on

equity,

the

yield

on

investments

and

risks

associated

with investing in real estate assets, including changes in business conditions and the general economy.

The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all

information currently available to us. Forward-looking statements are not predictions of future events. These beliefs, assumptions and

expectations can change as a result of many possible events or factors, not all of which are known to us. Some of these factors are described

under

“Risk

Factors,”

and

“Management’s

Discussion

and

Analysis

of

Financial

Condition

and

Results

of

Operations”

as

included

in

ARI’s

Annual Report on Form 10-K for the fiscal year ended December 31, 2011. If a change occurs, our business, financial condition, liquidity and

results of operations may vary materially from those expressed in our forward-looking statements. Any forward-looking statement speaks only as

of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may

affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a

result of new information, future events or otherwise.

This presentation may contain statistics and other data that in some cases has been obtained from or compiled from information made available

by third-party service providers.

2

COMMERCIAL REAL ESTATE FINANCE, INC. (“ARI”)

Apollo Commercial Real Estate Finance, Inc.

2012 Second Quarter Earnings Call

August 7, 2012

Stuart Rothstein

Chief Executive Officer, President and Chief Financial Officer

Scott Weiner

Chief Investment Officer of the Manager

Megan Gaul

Controller of the Manager

Hilary Ginsberg

Investor Relations Manager

3

COMMERCIAL REAL ESTATE FINANCE, INC. (“ARI”)

ARI –

Financial Summary

(1)

Operating Earnings is a non-GAAP financial measure that is used to approximate cash available for distribution and is defined by the Company as net income, computed in accordance with GAAP, adjusted for (i) non-cash equity compensation expense and (ii) any

unrealized gains or losses or other non-cash items included in net income.  Please see slide 22 for a reconciliation of Operating Earnings and Operating Earnings per Share to GAAP net income and GAAP net income per share.

(2)

Fixed rate debt refers to the TALF borrowings which were refinanced with the Wells repurchase facility during January 2012.

(3)

Debt service coverage is EBITDA divided by interest expense.

Income Statement

June 30, 2012

June 30, 2011

% Change

June 30, 2012

June 30, 2011

% Change

13,880

$        

13,464

$               

3.1%

28,309

$        

24,402

$        

16.0%

(1,929)

$         

(3,781)

$                 

-49.0%

(5,171)

$         

(7,121)

$         

-27.4%

Net interest income

(in thousands)

11,951

$        

9,683

$                   

23.4%

23,138

$        

17,281

$        

33.9%

0.41

$             

0.40

$                     

2.5%

0.83

$             

0.69

$             

20.3%

20,991,450

17,684,991

18.7%

20,978,938

17,556,455

19.5%

Balance sheet

June 30, 2012

December 31, 2011

% Change

676,034

$      

860,247

$             

-21.4%

325,338

$      

318,220

$             

2.2%

Net stockholders equity

341,518

$      

336,978

$             

1.3%

2.9 Years

2.2 Years

1.1x

1.6x

-

$               

251,327

$             

350,696

$      

290,700

$             

6.9x

3.9x

Three Months Ended

Six Months Ended

Interest income

(in thousands)

Interest expense

(in thousands)

Operating earnings per share

(1)

Basic and diluted weighted average common shares

outstanding

Investments at amortized cost

(in thousands)

Net equity in investments at cost

(in thousands)

Investments -

Weighted average Duration

Debt to equity

Fixed rate debt

(in thousands)

(2)

Debt service coverage

(3)

Floating rate debt

(in thousands)

4

COMMERCIAL REAL ESTATE FINANCE, INC. (“ARI”)

ARI –

Six Month Overview

Operating Earnings per Share

Dividends per Share

Net Interest Income ($000s)

Return

on

Equity

Based

on

Operating

Earnings

(1)

$0.40

$0.40

$0.40

$0.40

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

Six Months Ended June 30, 2011

Six Months Ended June 30, 2012

(1)

Return on equity is calculated as annualized Operating Earnings for the quarter as a percentage of average equity.

$0.29

$0.42

$0.40

$0.41

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

Six Months Ended June 30, 2011

Six Months Ended June 30, 2012

$7,599

$11,187

$9,684

$11,951

$0

$5,000

$10,000

$15,000

$20,000

$25,000

Six Months Ended June 30, 2011

Six Months Ended June 30, 2012

6.8%

10.4%

9.6%

10.0%

0.0%

3.0%

6.0%

9.0%

12.0%

Six Months Ended June 30, 2011

Six Months Ended June 30, 2012

1Q

2Q

1Q

2Q

5

COMMERCIAL REAL ESTATE FINANCE, INC. (“ARI”)

ARI –

Historical Overview

Operating Earnings per Share

(1)

Return on equity is calculated as annualized Operating Earnings for the quarter as a percentage of average equity.

Dividends per Share

Net Interest Income ($000s)

Return

on

Equity

Based

on

Operating

Earnings

(1)

9.3%

9.8%

10.4%

10.0%

8.6%

9.0%

9.4%

9.8%

10.2%

10.6%

Q3 2011

Q4 2011

Q1 2012

Q2 2012

$1.50

$1.60

$0.40

$0.40

$0.00

$0.40

$0.80

$1.20

$1.60

$2.00

2010

2011

YTD 2012

$1.09

$1.47

$0.42

$0.41

$0.00

$0.40

$0.80

$1.20

$1.60

2010

2011

YTD 2012

$21,771

$38,464

$11,187

$11,951

$0

$10,000

$20,000

$30,000

$40,000

2010

2011

YTD 2012

6

COMMERCIAL REAL ESTATE FINANCE, INC. (“ARI”)

ARI –

Q2 Highlights

Financial Results & Earnings Per Share

Operating Earnings for the quarter ended June 30, 2012 of $8.5 million, or $0.41 per diluted

common share

(1)

–

A per

share

increase

of

2.5%

as

compared

with

Operating

Earnings

per

share

for

the

same

period

in

2011

–

Net interest income of $12.0 million for Q2 2012

–

Total expenses of $4.1 million, comprised of management fees of $1.3 million, G&A of

$1.9

million

(including

a

one-time

brokerage

fee

of

$0.7

million

related

to

an

investment)

and

non-cash,

stock based compensation of $0.9 million

–

GAAP net income for the quarter ended June 30, 2012 of $9.9 million, or $0.47 per diluted

common share

Dividend

Declared a dividend of $0.40 per share of common stock for the quarter ended September 30,

2012

–

Ninth consecutive quarter of maintaining consistent dividend level

–

9.6% annualized dividend yield based on $16.75 closing price on August 3, 2012

(1)

Operating Earnings is a non-GAAP financial measure that is used to approximate cash available for distribution and is defined by the Company as net income, computed in accordance with GAAP, adjusted for (i) non-cash

equity compensation expense and (ii) any unrealized gains or losses or other non-cash items included in net income. Please see slide 22 for a reconciliation of operating earnings and operating earnings per diluted common

share to GAAP net income and GAAP net income per diluted common share.

7

COMMERCIAL REAL ESTATE FINANCE, INC. (“ARI”)

ARI –

Q2 Highlights

Investment and Portfolio Activity

New Investments

–

Acquired two senior sub-participation interests with an aggregate face value of $23.8 million, part of a $120

million first mortgage loan secured by over 20 acres of land in the South Boston Waterfront District, which is

entitled for over 5.8 million buildable square feet and is currently used as parking with approximately 3,325

spaces.  The aggregate purchase price of the senior sub-participation interests was $17.9 million (75% of face

value) and the investment has been underwritten to generate an IRR of approximately 21.7%, after the payment

of expenses

(1)

–

Acquired $70.7 million of CMBS where the obligors are certain special purpose entities formed to hold

substantially all of the assets of Hilton Worldwide, Inc.(the “Hilton CMBS”)  The investment has been

underwritten

to

generate

an

IRR

of

approximately

11.7%

(1)

Loan Modification

–

Modified a $40 million subordinate loan secured by a ski resort in California to provide financial covenant relief

in connection with a loan modification of the senior and junior loans.  The loan modification included the

addition of an amendment fee, exit fee and an increase of the interest rate. Following the modification, the

investment

has

been

underwritten

to

generate

an

IRR

of

approximately

14.8%

(1)

(1)

The

internal

rates

of

return

(“IRR”)

for

the

investments

listed

reflect

the

returns

underwritten

by

the

Manager,

calculated

on

a

weighted

average

basis

assuming

no

dispositions,

early

prepayments

or

defaults

but

assumes

extensions

as

well

as

the

cost

of

borrowings

and

derivative

instruments

under

the

Company’s

master

repurchase

agreement

with

Wells

Fargo

Bank,

N.A.

(“Wells

Facility”).

There

can

be

no

assurance

the

actual

IRRs

will

equal

the

underwritten

IRRs

shown.

See

“Risk

Factors”

in

the

Company’s

Annual

Report

on

Form

10-K for the year ended December 31, 2011 for a discussion of some of the factors that could adversely impact the returns received by the Company from the investments over time.

8

COMMERCIAL REAL ESTATE FINANCE, INC. (“ARI”)

ARI –

Q2 Highlights

Investment and Portfolio Activity (cont.)

Loan/Investment Repayments

–

Received repayment from a $24 million first mortgage loan on a hotel in midtown Manhattan, which

generated $8.6 million of equity for reinvestment after repayment of $15.4 million of borrowings

–

Received $54.5 million of repayments from CMBS and the repurchase agreement secured by CDO bonds,

generating $16.0 million of equity for reinvestment

Financing Overview

Amended JP Morgan Facility

–

Amended

the

JP

Morgan

repurchase

facility

to

reduce

the

interest

rate

spread

by

0.50%

to

LIBOR+2.50%

Amended Wells Fargo Facility

–

In connection with the acquisition of the Hilton CMBS, the repurchase facility with Wells Fargo was amended

to provide up to $100 million of financing for the purchase of Hilton CMBS at LIBOR+2.35%;  The

additional financing is coterminous with the Hilton CMBS, assuming full extensions

Portfolio Summary

Total

investments

with

an

amortized

cost

of

$676

million

at

June

30,

2012

Weighted

average

underwritten

IRR

of

approximately

15.0%

(1)

(1)

The

internal

rates

of

return

(“IRR”)

for

the

investments

listed

reflect

the

returns

underwritten

by

theManager,calculated

on

a

weighted

average

basis

assuming

no

dispositions,

early

prepayments

or

defaults

but

assumes

extensions

as

well

as

the

cost

of

borrowings

and

derivative

instruments under the Wells Facility. There can be no assurance the actual IRRs will equal the underwritten IRRs shown. See “Risk Factors”

in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 for a discussion of some of the factors that could

adversely impact the returns received by the Company from the investments over time.

9

COMMERCIAL REAL ESTATE FINANCE, INC. (“ARI”)

ARI –

Q2 Highlights and Subsequent Events

Book Value

GAAP book value of $16.59 per share as of June 30, 2012

Fair

value

of

$17.22

per

share

as

of

June

30,

2012

(1)

ARI closed at $16.75 on August 3, 2012, a 1% premium to GAAP book value per share and a 2.9%

discount to fair market value per share

Subsequent Events

New Investments

–

Acquired a $6.5 million mezzanine loan secured by a pledge of the equity interest in a borrower that owns a mixed

use project consisting of 55,585 square feet of Class-A retail and 114,476 square feet of Class-A office in Chapel

Hill,

North

Carolina.

The

loan

has

been

underwritten

to

generate

an

IRR

of

approximately

12.0%

(2)

Preferred Offering

–

Completed

an

underwritten

public

offering

of

3.45

million

shares

of

its

Series

A

Cumulative

Redeemable

Perpetual Preferred Stock (the “Series A Preferred Stock”), with a liquidation preference of $25 per share,

including the exercise of the underwriters’

option to purchase additional shares 

–

Net proceeds, after the underwriting discount and estimated offering expenses payable by the Company, were

approximately $83.2 million

(1)

The Company carries loans at amortized cost and its CMBS securities are marked to market.  Management has estimated that the fair value of the Company’s financial assets at June 30, 2012 was approximately $12.9 million greater than the carrying value of the Company’s

investment portfolio as of the same date.  This represents a premium of $0.63 per share over the Company's GAAP book value as ofJune 30, 2012.

(2)

The

internal

rates

of

return

(“IRR”)

for

the

investments

listed

reflect

the

returns

underwritten

by

theManager,calculated

on

a

weighted

average

basis

assuming

no

dispositions,

early

prepayments

or

defaults

but

assumes

extensions

as

well

as

the

cost

of

borrowings

and

derivative

instruments under the Wells Facility. There can be no assurance the actual IRRs will equal the underwritten IRRs shown. See “Risk Factors”

in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 for a discussion of some of the factors that could

adversely impact the returns received by the Company from the investments over time.

10

COMMERCIAL REAL ESTATE FINANCE, INC. (“ARI”)

ARI –

Portfolio Overview

Asset Type

($000s)

Amortized

Cost

Borrowings

Equity

at Cost

Weighted

Average

IRR

(2)(3)

First

Mortgage

Loans

(2)

$103,320

$53,060

$50,260

2.4

20.0%

Subordinate Loans

179,602

-

179,602

5.2

14.0%

Repurchase Agreements

41,696

-

41,696

1.8

13.7%

CMBS -

AAA

280,697

248,177

$32,520

1.7

16.2%

CMBS -

Hilton

70,719

49,459

$21,260

3.4

11.7%

Investments at June 30, 2012

$676,034

$350,696

$325,338

2.9 Years

15.0%

As of June 30, 2012.

(1) 

Remaining Weighted Average Life assumes all extension options are exercised.

(2)

Borrowings under the Company’s master repurchase facility with JPMorgan bear interest at LIBOR plus 250 basis points, or 2.75% at June 30, 2012. The IRR calculation further assumes the JPM repurchase facility will

remain available over the life of these investments.

(3)

The IRR for the investments shown in the above table reflect the returns underwritten by the Manager, calculated on a weighted average basis assuming no dispositions, early prepayments or defaults but assumes extensions

as well as the cost of borrowings and derivative instruments under the Wells Facility. There can be no assurance the actual IRRs will equal the underwritten IRRs shown in the table. See “Risk Factors” in the Company’s

Annual Report on Form 10-K for the year ended December 31, 2011 for a discussion of some of the factors that could adversely impact the returns received by the Company from the investments shown in the table over time.

Remaining

Weighted

Average

Life (years )

(1)

11

COMMERCIAL REAL ESTATE FINANCE, INC. (“ARI”)

ARI –

Portfolio Overview

Diversified Investment Portfolio with Amortized Cost Basis of $676 million

Weighted Average IRR of Approximately 15.0%

(1)

Net Invested Equity at Amortized Cost Basis

Gross Assets at Amortized Cost Basis

CMBS -

AAA

42%

CMBS -

Hilton

10%

First Mortgages

15%

Subordinate

Loans

27%

Repurchase

Agreements

6%

CMBS -

AAA

10%

CMBS -

Hilton

7%

First Mortgages

15%

Subordinate

Loans

55%

Repurchase

Agreements

13%

As of June 30, 2012.

(1)

The IRR for the investments shown in the above charts reflect the returns underwritten by the Manager, calculated on a weighted average basis assuming no dispositions, early prepayments or defaults but

assumes extensions as well as the cost of borrowings and derivative instruments under the Wells Facility. There can be no assurance the actual IRRs will equal the underwritten IRRs shown in the charts. See

“Risk Factors”

in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 for a discussion of some of the factors that could adversely impact the returns received by the Company

from the investments over time.

12

COMMERCIAL REAL ESTATE FINANCE, INC. (“ARI”)

ARI –

Loan Portfolio Diversification

As of June 30, 2012, first mortgages and subordinate loans represented 70% of

ARI’s investment portfolio’s net equity

The loan portfolio is diversified by property type and geographic location

Loan Portfolio -

Geographic Diversification by Face

Amount

(1)

Loan Portfolio -

Property Type by Face Amount

(1)

(1)

Does not include CMBS (AAA or Hilton) or repurchase agreement investment secured by CDO bond.

(2)

Other category includes the subordinate financing on a ski resort.

Hotel

39%

Office

13%

Retail

26%

Parking/

Development

Site

8%

Other (2)

14%

Northeast

50%

Southeast

5%

Mid-Atlantic

18%

Midwest

5%

West

22%

13

COMMERCIAL REAL ESTATE FINANCE, INC. (“ARI”)

ARI –Loan Portfolio -

Maturity and Type

Fully

Extended

Loan

Maturity

Schedule

($000s)

(1)

(1)

Based upon Face Amount of Loans; Does not include CMBS (AAA or Hilton) or repurchase agreement investment secured by CDO bond.

Loan Position and Rate Type

(1)

ARI’s Loan Portfolio had a face amount of $288 million at June 30, 2012

$0

$23.8

$41.7

$99.6

$65.7

$40.0

$0

$50.0

$8.9

$0

$0

$20

$40

$60

$80

$100

$120

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Senior Loan

Fixed

38%

Mezzanine

Loan Fixed

23%

Mezzanine

Loan Floating

12%

Subordinate

Loan Fixed

12%

Subordinate

Loan Floating

7%

Preferred

Equity Fixed

8%

14

COMMERCIAL REAL ESTATE FINANCE, INC. (“ARI”)

ARI –

Loan Portfolio –

Loan Level LTV (Through Last Invested Dollar)

(1)

Ending LTV represents the loan-to-value as of the date of investment for all loans except the $32,000 New York, NY hotel loan, which is as of March 2011.

(2)

Description ($ in thousands)

Location

Balance at  

June 30, 2012

LTV (Senior

Mortgage)

Ending LTV

(1)

First Mortgage - Hotel

New York 

31,687

$              

0%

40%

First Mortgage - Office

New York

27,534

$              

0%

53%

First Mortgage - Hotel

Maryland

25,421

$              

0%

57%

First Mortgage - Parking/Development Site

(2)

Boston

23,844

$              

0%

28%

Subordinate - Ski Resort

California

40,000

$              

29%

56%

Subordinate - Retail

Various

30,000

$              

58%

68%

Subordinate - Retail

Virginia

25,670

$              

60%

74%

Subordinate - Hotel Portfolio

New York

25,000

$              

40%

60%

Subordinate -Retail

Various

20,000

$              

58%

72%

Subordinate - Hotel 

New York

15,000

$              

51%

63%

Subordinate - Hotel

New York

15,000

$              

51%

65%

Subordinate - Office

Michigan

8,932

$                

53%

68%

Total

288,088

$           

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

LTV is based upon the aggregate face value ($23.8 million) of the senior sub-participation interests at the date of investment; ARI purchased the senior sub participation interests for $17.8 million (75% of face value).

15

COMMERCIAL REAL ESTATE FINANCE, INC. (“ARI”)

ARI –

Senior Loan Portfolio

Description ($000’s)

Date of

Investment

Maturity

Date

(1)

Original

Face

Amount

Current

Face

Amount

Coupon

Amortization

Schedule

Property

Size

Appraised

LTV

(2)

Hotel

New York, NY

Jan-10

Feb-15

$32,000

31,687

8.25%

30 year

151

rooms

40%

Office Condo (Headquarters)

New York, NY

Feb-10

Feb-15

28,000

27,534

8.00

30 year

73,419

sq. ft.

54%

Hotel

Silver Spring, MD

Mar-10

Apr-15

26,000

25,421

9.00

25 year

263

rooms

58%

Parking/Development Site

Boston, MA

Apr-12

Dec-13

23,844

23,844

2.00%

(L+1.72%)

Interest

Only

20 acres

28%

Total

.

.

$109,844

$108,486

6.99%

(1)

Maturity date assumes all extension options are exercised.

(2)

Appraised LTV represents the loan to value as of the date of investment for all loans except the $32,000 New York, NY hotel loan, which is as of March 2011.

(3)

Interest rate includes 10% current payment with a 3% accrual.

Description ($000’s)

Date of

Investment

Maturity

Date

Original

Face

Amount

Current

Face

Amount

Coupon

Amortization

Schedule

Property

Size

Appraised

LTV

(2)

Repurchase Agreement

(3)

Sept-10

Mar-14

$47,439

$41,696

13.00%

Interest

only

N/A

N/A

Total

$47,439

$41,696

13.00%

16

COMMERCIAL REAL ESTATE FINANCE, INC. (“ARI”)

ARI –

Subordinate Loan Portfolio

Description ($000’s)

Date of

Investment

Maturity

Date

(1)

Original

Face

Amount

Current Face

Amount

Coupon

Amortization

Schedule

Appraised

LTV

(2)

Senior Mezz –

Retail

Various

Dec-09

Dec-19

(3)

$30,000

30,000

12.24%

Interest

only

69%

Junior Mezz –

Retail

Various

Dec-09

Dec-19

(3)

20,000

20,000

14.00

Interest

only

74%

Office

Michigan

May-10

Jun-20

9,000

8,932

13.00

25 year

70%

Ski Resort

California

Apr-11

May-17

(4)

40,000

40,000

14.00

Interest

only

64%

Hotel Portfolio

New York

(5)

Aug-11

July-16

(6)

25,000

25,000

11.49

(L+10.49%)

Interest

only

60%

Retail Center

Virginia

(7)

Oct-11

Oct-16

(7)

25,000

25,670

14.00

Interest

only

74%

Hotel

(8)

New York

Jan-12

Jan-15

15,000

15,000

12.00

Interest     

only

63%

Hotel

(9)

New York

Mar-12

Feb-16

15,000

15,000

11.50

(L+11.00%)

Interest  only

65%

Total

.

.

$179,000

$179,602

13.03%

(1)  Maturity date assumes all extension options are exercised.

(2)  Appraised LTV represents the loan to value as of the date of investment.

(3) Prepayments are prohibited prior to the fourth year of the loan and any prepayments thereafter are subject to prepayment penalties ranging from 5% to 1%. 

(4) Prepayments are prohibited prior to the third year of the loan and any prepayments thereafter are subject to prepayment penalties ranging from 5% to 1%.

(5) Includes a LIBOR floor of 1% and three one-year extension options subject to certain conditions and the payment of a 0.25% fee for the fourth and fifth year extensions.

(6) Prepayments are prohibited prior to February 2013 and any prepayments thereafter are subject to spread maintenance premiums.

(7) Interest rate of 14.0% includes a 10.0% current payment with

a 4.0% accrual.  There are two one-year extension options subject to certain conditions.

(8) Includes a 1.00% origination fee, a one-year extension option subject to certain conditions and a 0.50% extension fee as well as a 1.50% exit fee.

(9) Includes a LIBOR floor of 0.50%, two one-year extension options subject to certain conditions and the payment of a 0.50% fee for the second extension.

17

COMMERCIAL REAL ESTATE FINANCE, INC. (“ARI”)

ARI –

CMBS Portfolio

Face

Amortized

Cost

Remaining Weighted

Average Life with

Extensions (years)

Estimated

Fair Value

Debt

Net

Equity at

Cost

CMBS –

AAA

$275,997

$280,697

1.7

$283,365

$248,177

$32,520

CMBS –

Hilton

74,854

70,719

3.4

71,205

49,459

21,260

CMBS –

Total

$350,851

$351,416

2.0

$354,570

$297,636

$53,780

CMBS -

AAA

CUSIP

Description

07388YAB8

BSCMS 07-PW16 A2

07401DAB7

BSCMS 2007-PW18 A2

12513YAC4

CD 2007-CD4 A2B

46629MAB1

JPMCC 2006-LDP8 A2

61754KAC9

MSC 07-IQ14 A2

92978YAB6

WBCMT 07-C32 A2

CMBS -

AAA

CUSIP

Description

07401DAB7

BSCMS 2007-PW18 A2

36246LAB7

GSMS 2007-GG10 A2

46630JAK5

JPMCC 2007-LDPX A2S

61751NAD4

MSC 2007-HQ11 A31

92978TAB7

WBCMT 2007-C31 A2

CMBS –

Hilton

CUSIP

Description

05956KAA6

BALL 2010-HLTN

18

COMMERCIAL REAL ESTATE FINANCE, INC. (“ARI”)

Financing Overview

Facility

Debt Balance

Weighted

Average

Remaining

Maturity

(1)

Cost of

Funds

Hedged

Cost of

Funds

Wells Facility

$297,636

1.5 years

1.8%

2.0%

JP Morgan Facility

53,060

0.5 years

2.7%

2.7%

Total Borrowings at June 30, 2012

$350,696

1.3 years

1.9%

2.1%

Facility

Less than 1 year

1 to 3 years

3 to 5 years

Total

Wells Facility

$118,087

$137,466

$42,083

$297,636

JP Morgan Facility

53,060

-

-

53,060

Total Borrowings at June 30, 2012

$171,147

$137,466

$42,083

$350,696

ARI had total borrowings outstanding of $351 million at June 30,

2012

ARI’s borrowings had the following remaining maturities at June 30, 2012:

(1)

Assumes extension options on Wells Facility are exercised. Borrowings outstanding under the Wells Facility bear interest at LIBOR plus 125bps, 150bps or 235bps depending on the collateral pledged.

19

COMMERCIAL REAL ESTATE FINANCE, INC. (“ARI”)

Financials

20

COMMERCIAL REAL ESTATE FINANCE, INC. (“ARI”)

Consolidated Balance Sheets

(in thousands—except share and per share data)

June 30, 2012

December 31, 2011

Assets:

Cash

11,959

$                        

21,568

$                        

Securities available-for-sale, at estimated fair value

125,631

302,543

Securities, at estimated fair value

228,939

251,452

Commercial mortgage loans, held for investment

103,321

109,006

Subordinate loans, held for investment

179,602

149,086

Repurchase agreements, held for investment

41,696

47,439

Principal and interest receivable

11,195

8,075

Deferred financing costs, net

1,161

2,044

Other assets

10

17

Total Assets

703,514

$         ��            

891,230

$                      

Liabilities and Stockholders' Equity

Liabilities:

Borrowings under repurchase agreements

350,696

$                      

290,700

$                      

TALF Borrowings

-

251,327

Derivative instruments, net

291

478

Accounts payable and accrued expenses

1,072

1,746

Payable to related party

1,294

1,298

Dividends payable

8,726

8,703

Deferred revenue

117

-

Total Liabilities

362,196

554,252

Stockholders' Equity:

Common stock, $0.01 par value, 450,000,000 shares authorized 20,570,616 and 20,561,032 shares issued and

outstanding in 2012 and 2011, respectively

206

206

Preferred stock, $0.01 par value, 50,000,000 shares authorized and no shares outstanding

-

-

Additional paid-in-capital

337,923

336,209

Retained earnings

2,214

-

Accumulated other comprehensive income

975

563

Total Stockholders' Equity

341,318

336,978

Total Liabilities and Stockholders' Equity

703,514

$                      

891,230

$                      

21

COMMERCIAL REAL ESTATE FINANCE, INC. (“ARI”)

Consolidated Statement of Operations

2012

2011

2012

2011

Net interest income:

Interest income from securities

3,230

$                   

6,448

$                   

8,552

$                   

13,103

$                 

Interest income from commercial mortgage loans

2,791

2,297

5,026

4,610

Interest income from subordinate loans

5,859

3,167

11,172

5,077

Interest income from repurchase agreements

2,000

1,552

3,559

1,612

Interest expense

(1,929)

(3,781)

(5,171)

(7,121)

Net interest income

11,951

9,683

23,138

17,281

Operating expenses:

General and administrative expenses (includes $886 and

$1,969 of non-cash stock based compensation in 2012 and

$384 and $736 in 2011, respectively)

(2,762)

(1,412)

(4,798)

(2,792)

Management fees to related party

(1,292)

(1,101)

(2,581)

(2,189)

Total operating expenses

(4,054)

(2,513)

(7,379)

(4,981)

Interest income from cash balances

-

3

1

9

Realized gain on sale of securities

-

-

262

-

Unrealized gain on securities

2,078

1,366

3,463

1,392

Loss on derivative instruments (includes $192 and $187 of

unrealized gains in 2012 and $1,548 and $1,089 of unrealized

losses 2011, respectively)

(65)

(2,019)

(482)

(2,001)

Net income

9,910

$                   

6,520

$                   

19,003

$               

11,700

$                 

Basic and diluted net income per share of common stock   

0.47

$                      

0.37

$                      

0.91

$                     

0.66

$                      

Basic and diluted weighted average common shares outstanding

20,991,450

17,561,032

20,978,938

17,556,455

Dividend declared per share of common stock

0.40

$                      

0.40

$                      

0.80

$                     

0.80

$                      

Three months ended June 30,

Six months ended June 30,

22

COMMERCIAL REAL ESTATE FINANCE, INC. (“ARI”)

Reconciliation of Operating Earnings to Net Income

June 30, 2012

Earnings Per Share

(Diluted)

June 30, 2011

Earnings Per Share

(Diluted)

Operating Earnings:

Net income

$19,003

$0.91

$11,700

$0.66

Adjustments:

Unrealized gains on securities

(3,463)

(0.16)

(1,392)

(0.08)

Unrealized gains on derivative instruments

(187)

(0.01)

1,089

0.06

Non-cash stock-based compensation expense

1,969

0.09

736

0.04

Total adjustments:

(1,681)

(0.08)

433

0.02

Operating Earnings

17,322

$0.83

$12,133

$0.69

20,978,938

17,556,455

Six Months Ended

June 30, 2012

Earnings Per Share

(Diluted)

June 30, 2011

Earnings Per Share

(Diluted)

Operating Earnings:

Net income

$9,910

$0.47

$6,520

$0.37

Adjustments:

Unrealized gains on securities

(2,078)

(0.09)

(1,366)

(0.08)

Unrealized gains on derivative instruments

(192)

(0.01)

1,548

0.09

Non-cash stock-based compensation expense

886

0.04

384

0.02

Total adjustments:

(1,384)

(0.06)

566

0.03

Operating Earnings

8,526

$0.41

$7,086

$0.40

Basic and diluted weighted average common shares outstanding

20,991,450

17,684,991

Three Months Ended

Basic and diluted weighted average common shares outstanding