[Call Starts Abruptly] I’d 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 Incorporation 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.

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.apolloreit.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 ARI’s third quarter 2015 earnings call. Joining me this morning as usual are Scott Weiner, our Chief Investment Officer; and Megan Gaul, our Chief Financial Officer, who will review ARI’s financial results after my remarks.

ARI had a record quarter, reporting operating earnings per share of $0.53, our highest to-date and a 20% increase over the same period last year.

During the quarter, ARI committed to over $331 million of new commercial real estate loans, funded an additional $155 million for previously closed loans, and grew the investment portfolio to over $2.3 billion.

2015 has been ARI’s most active year since the company’s inception having committed to more than $1 billion of commercial real estate debt transitions year-to-date. The breadth of transactions closed. The performance of the investment portfolio, and the strength of the current investment pipeline demonstrate the depth and quality of our platform.

During the quarter, ARI closed five new commercial real estate debt transactions, which had a waited averaged IRR of 14% and were all floating rates. Net capital deployment for the quarter totaled $189 million, as ARI also received $135 million of loan repayments.

Subsequent to quarter end, ARI received payment of one of our first New York City condominium development loans for our property in TriBeCa. On the $60 million investment that we made, ARI realized over 15% IRR, and 1.6 times multiple on our invested capital.

At quarter end, our commercial real estate debt portfolio totaled $2.3 billion, and generated a leverage rated IRR of 13.9%. The credit quality of our portfolio remains stable. We continue to actively monitor our condominium construction exposure. At quarter end, we had approximately $400 million in net condo exposure spread across six investments.

Based upon appraisal, the weighted average loan-to-net-sellout value on these investments is approximately 56%.

In addition, in those projects that are actually in the process of selling units, which include properties in New York City and suburban Washington DC, we have been pleased with both the pace of sales to date and the price per square foot achieved on sales relative to our underwritten expectations.

Our largest of these loans if the $325 million mezzanine loan we originated to finance the construction of a residential condominium tower on West 57th Street in New York City.

At the time we originated the loan, we syndicated $50 million of our exposure to another vehicle managed with by Apollo and we indicted at the time, our desire to further reduce our exposure through further syndication.

At present, we have now reached an agreement to syndicate an additional $200 million of the loan to a single investor fund managed by Apollo, which we expect will be completed prior to year-end. Our maximum exposure to this loan will therefore be $75 million.

The loans appraised loan-to-net-sellout value is less than 50%, and we have underwritten this transaction to generate an IRR of approximately 16%.

Commenting quickly on our construction loan exposure, the largest of our construction loans in the portfolio is $165 million first mortgage loan for the retail component of the mixed-use life style centre in Cincinnati, Ohio. This center recently had its grand opening in October, and is approximately 80% leased with a strong roster of tenets.

This transaction was underwritten to generate a levered IRR of 14%, and performance to date has been consistent with underwriting.

Turning now to capital raising, we’re extremely pleased to end the quarter with the announcement of our $350 million private offering to an affiliate of the Qatar Investment Authority, comprised of $150 million of common stock at a net price of $17 per share, and $200 million of preferred stock with an 8% coupon.

Given the underwriting fees, we have typically paid to execute secondary transactions. The net price of $17 per share on common stock implies roughly $17.65 to $17.70 gross price had we done an underwritten deal and the preferred is at an all in coupon that is 50 basis points to 75 basis points tighter than our prior preferred.

We have long talked about the benefits to ARI of operating within the broader Apollo platform. This competitive advantage was clearly evident with the execution of this transaction.

Apollo and QIA have longstanding relationship and this offering grew out of a broader dialogue between Apollo and QIA with respect to their desire to expand our commercial real estate footprint in the United States.

Apollo’s Commercial Real Estate Debt Group has invested on QIA’s behave of over the past few years, and we believe their investment in ARI is a further endorsement of their belief in the quality of Apollo’s platform.

This transaction was very significant for ARI as it provides the company with the capital needed to fund our active pipeline, as well as provide dry powder for the next several quarters. Following the offering, ARI now has an equity market capitalization of approximately $1.4 billion.

As we indicated in our release, we used a portion of the capital to pay down our JPMorgan facility, and consequently our debt-to-equity ratio stood at less than one times at quarter end or approximately 0.9 times. As stated previously, we believe ARI can operate comfortably with a debt-to-equity ratio of 1.3 times to 1.5 times.

So we have the capacity to add incremental leverage to our balance sheet as we grow the portfolio. Subsequent to quarter-end, ARI closed one additional mezzanine loan totaling $55 million and has funded an additional approximately $50 million for previously closed transactions.

We have a very active pipeline of transactions we are pursuing, and we continue to identify commercial real estate debt investments that offer ARI attractive risk adjusted returns. Before turning the call over to Megan, I wanted to comment on our approach to declaring the fourth quarter dividend for this year.

During the first quarter of 2015, based on our confidence and company’s platform and the expectation of growing operating earnings, the Board of Directors raised ARI’s common stock dividend 10% to $0.44 per share on a quarterly basis. Our financial results year-to-date have affirmed the Board’s decision.

Given the strength of our results to date and our previously stated goals to establish a consistent quarterly dividend that is covered by operating earnings and meets the REIT distribution requirements, we have agreed with our board to review and declare the fourth quarter dividend closer to year-end, when we have more clarity on 2015 operating and taxable earnings as well as more clarity on our forecast for 2016.

Therefore, we anticipate the fourth quarter dividend will be declared in mid December. And with that I’ll call turn the call over to Megan..

Thank you, Stuart. Good morning everyone. ARI had a very strong quarter of financial results across all operating metrics.

For the third quarter of 2015, the company announced operating earnings of $31.7 million, or $0.53 per share, representing a per share increase of 20.4% as compared to operating earnings of $20.8 million or $0.44 per share for the third quarter of 2014.

Net income available to common stockholders for the same period was $23.5 million in 2015 or $0.39 per share as compared to $17.3 million or $0.37 per share for 2014.

The Company reported operating earnings of $80.3 million or $1.42 per share for the nice months ended September 30, 2015, representing a $14.5 per share increased as compared to $52.8 million or $0.24 per share for 2014.

Net income available to common stockholders for the nine months ended September 30, 2015 was $70 million or $0.24 per share as compared to $55.1 million or $0.30 per share for 2014. A reconciliation of operating earnings to GAAP net income can be found in our earnings release contained in the Investor Relations section of our website, apolloreit.com.

I wanted to highlight one thing with respect to our operating results. Operating earnings in Q3 have benefited from the impact of several early loan repayments. And therefore we received approximately $1 million in repayment fees during the quarter.

Capital book value per share at September 30 was $16.35, a slight decline from last quarter, driven by the unrealized mark-to-market loss on our CMBS portfolio.

As a reminder, we do not mark our loans to market for financial statement purposes and currently estimate that the fair value of our loan portfolio at September 30 was approximately $16.2 million greater than the carrying value as of that date.

At September 30, 75% of the loans on our portfolio have floating interest rates and we continue to position the portfolio to benefit from an increase in short-term rates. We anticipate that our LIBOR rates are increased 55 basis points, our portfolio would generate an additional $0.08 in operating earnings annually.

With respect to ARI’s leverage as Stuart mentioned, the company ended the quarter with 0.9 times debt-to-equity ratio. We continue to have excess capacity on our JPMorgan facility as well as our preciously announced FHLBI facility. Additionally, our G&A expenses continued to remain low.

Annualized G&A as a percentage of common book value was 47 basis points at the end of the third quarter, which continues to be one of the lowest among the ARI’s peer group. Finally, I want to highlight our attractive dividend yields.

Based on the Thursday’s closing price, ARI’s stock offers an attractive 10.4% yield and for the first nine months of the year, ARI had a 93% dividend payout ratio. And with that, I’d like to open the line for questions.

Operator?.

[Operator Instructions] Our first question comes from Dan Altshcer from FBR. Your line is open..

Hi, good morning everyone, I appreciate you taking the question.

Stuart, I want to follow up a little bit about your last comment around the dividend and trying to just read-through what you all going to say, it seems like core earnings are tracking in excess of the dividend right now clearly, so how closely is core earnings tracking taxable income is there a potential for a special at the end of the year or it is gearing up more towards maybe a potential hike for next year?.

Without being overly specific there are some book tack difference, I guess, you and I could debate whether they are material or not and you also probably know that the read-through is give you a little bit of flexibility with respect to when dividends are paid and what tax year they apply to, I think our buyers at a high level is not to do special dividend, but to do consistent quarterly dividend.

But ultimately we need to meet the requirements for this year and then plan for next year. So I think we would like another call at six weeks following from Asian and how we are doing this year as well as a little further clarity on what next year looks like given what we’re working in the pipeline right now.

But ultimately if we could figure out the way to do it, we would rather do it through a sustainable quarterly increase is oppose to a special dividend..

Okay, got it. That’s clear. I was hoping if you can update on the exposure out in North Dakota region. How any updates there in terms of occupancy, rental growth or something there has been some articles suggest that the regions been having little bit trouble but any kind of update with the – I’m sure helpful for everybody..

Yes, I’ll let Scott comment on..

Sure, hi. Yes, I mean obviously that there has been a lot in the news, I would say on kind of the deal specific we’re still based on the current landlord processing at 10 – yield, I can see it around 80%, but we’re clearly seeing pressure on rents.

So rents are rolling, are rolling down, so we do anticipate that trend that yield, going, lower, but there are new leases being signed there people there, people obviously within the oil industry and others a lot of infrastructure is still being put in place they are talking to both the new airport and obviously roads and retail, so I would say, yes there is definitely near-term pressure on rents, at the same time, the municipalities in and around our property are focused on the people who kind of did permanent investments in terms of residential and other property types.

So there is now finally, talk of closing the man camps which are supposed to be closed by the summer, which will then obviously create more demand. But it’s a deal, we obviously are carefully watching with a well regarded private equity sponsor or substantial equity.

So we still are at a basis below replacement costs we’ve had substantial amortization through cash flows sweeps and scheduled, and obviously we’ll continue to watch the deal..

Okay. Just a follow-up on that. Imagine you’re still probably pretty comfortable with where your basis sit and it sounds like you are.

Have you thought about it all trying to maybe sell that exposure to somebody else or somebody who doesn’t may be looking more opportunistic if that’s kind of the way you want to think about it or may be simply just having some sort of hedge like an oil hedge or something against that would potentially protect against any sort of downside scenario?.

We – obviously look at all options in that. In my experience when you try and hedge things that aren’t necessarily correlated, it ends up going badly. I remember people trying to hedge CMBS and S&P options. So I’m not – I’m not really sure I want to be kind of making a bet on oil prices.

I mean I think we continue to look at it and say it’s multifamily, people are living there. Obviously, there’s been some public trades and where suburban multifamily is trading. We were at a basis that’s better than that. And we can kind of argue as what’s the discount of a multifamily in the shale region versus some other suburban multifamily.

We also think this is the low point. Obviously, the man camps closing should help rents and occupancy. So everything is on the table, if someone came to us and wanted to buy the loans, certainly we’d talk about it, but at this point it’s not a distress position, its cash loans performing, we continue to amortize down..

Okay. And then I had one additional question on the relationship with Qatar. Do you guys – obviously they came in kind of carry pursue it seems like with everybody else.

There’s no governance or board seats or anything like that, but where there any level of information that those folks receive non-disclosure agreements or any sort of deeper looks into the books that was provided to them making that investment?.

No..

Okay. Thank you..

You got it..

Our next question comes from Steve DeLaney from JMP Securities. Your line is open..

Thanks. Good morning, everyone, and congratulations on a great quarter..

Thanks..

Megan. Sure.

Megan, thank you for the disclosure the $1 million item we’re trying to figure out where we were $0.02 light and I think you just nailed it for us, but the follow-up is what percentage of your loans have some form of exit or prepay fee or your maintenance with how revenue might structure it, is this something we should sort of as we sort of model out prepaid which will certainly come – something we should keep in mind and so help – it would help you know the TriBeCa was one off or there is some structural fees at the backend and other deals, thanks..

Yes. I would say generally – Scott I'll take that. I would say, generally all deals have some level of call reduction or lock out or yield maintenance, certain deals have exit fees that we kind of amortized over the expected time. So I mean, as the portfolio obviously has grown there's always obviously deals coming and going.

It's tough to kind of peg an exact number on it. But in my mind, I do think yes every quarter they will probably should be something. But….

We are amortizing them over the life of the loans..

Steve, think about it….

Release the function of it and moved up..

Yes..

Think about it this way, Steve, every deal that has either an upfront fee or an exit fee right that gets straight-lined over the life of the loan, but I think the point Scott was trying to make if that is the portfolio gets bigger there are more and more situations where borrowers will come to us and ask for something, whether it is get out of the loan earlier maybe extend in addition for whatever it might be in those situation, create potentially the chance to generate one type either one-time income or accelerate income that was being amortized over a longer period of time.

But it's pretty hard to know what is going to look like on a quarterly basis and certainly from a modeling perspective. We take a fairly conservative view when thinking about what the upside from that might be..

Got it. And that may be the best way to say, it's not bad to have a Penny Goodie there every now and then. So that the color is helpful and we will consider that. Scott, shifting to you.

Obviously CMBS spread – I’m not going to say they blew out because that sounds like a hedge fund would express it let’s just that they widen materially in the third quarter and I have expected to see you add to your CMBS positions in the quarter.

So given that you did not does that tell us that you may be concerned that spreads won't recover or even blow out further or is this just a function of your liking the opportunities and loans better than CMBS? Thanks for any color you give me there..

Look, for us we’re not a trading operation or hedge fund for that matter. For us, the CMBS was a point in time investment where we like the credit and we could put in place match term funding right through term repo.

So for us it's never been a strategy to kind of buy when we think spreads are going to tied in or [indiscernible] short-term repo that’s just not our philosophy. So it wasn’t really – we obviously are active in the CMBS market. We spend a lot of time for the vehicles that we manage in the single asset space and looking at deals.

But from an ARI perspective, spreads coming and going it doesn’t really give us opportunity if there was a, I would say a major displacement of kind of shorter-term CMBS where again we could put on term financing, that would be attractive. But the spreads moving out a little bit is not something that we would look to do..

Got it..

So when you think over time, you’ll continue seeing absence of major happening in the market you’ll continue to see CMBS as a percentage of the portfolio continue to shrink as the CMBS we own pays down and the loan book grows..

Got it. So you’re not paying for nickels and dimes, but if we had a market advantage, especially given your new Home Loan Bank relationship which could give you match funding, you might be opportunistic if they are major..

We have the expertise, we’re in the market but not something we’re doing. We’re also not a conduit lender. That’s not a business that we’ve ever liked..

Yes..

So we are a portfolio lender by and hold. Obviously we can always sell things we need to, but we’re not tied at all to the CMBS market. We did have a little mark-to-market as Megan said. There were credit losses, this shorter-term stuff that moved out a little bit and we would think overtime we’ll move back the other way..

Okay, thanks, Scott. And Stuart one final thing to wrap up with you. So your business model, it’s working very well no obvious obstacles that we can see right now, other than obviously we always have to be careful about credit.

But I’m wondering as you’re preparing your 2016 game plan, if there’s anything new that you might put in the playbook that you would be willing to comment on at this time. Thanks..

Really for us it’s more of the same, Steve, I think we like the playbook right now. I think our traction with lenders and intermediaries in the market has only gotten stronger over time. And I think we are pretty happy with the state of the pipeline today broadly.

So I would say, look we’re always open to new ideas and being inside of Apollo there’s always dialogue going on. But broadly speaking, I think, we feel pretty good about the playbook as it stands heading into 2016..

Yes, look we like being a performing lender no aspirations to be in equity vehicle. We like the space, we like the geographies, we’re in major markets in the United States. We continue to look at opportunities in Europe. We obviously have exposure in London and the United Kingdom.

So I think you’ll see more of the same, more floating-rate first mortgages, more mezzanine loans, that’s really the core business.

All right. Well, thank you all for the comments and gourmets..

Our next question comes from Jade Rahmani from KBW. Your line is open..

Thanks for taking my questions.

Wanted to ask if there has been any spread widening on the target portfolio leading investments that you’re seeing since August and if you’re seeing any spillover from CMBS into that market?.

I wouldn’t say really spillover from CMBS and also it’s not a huge market but there are some folks in our space who finance themselves through the CLO market which is still small but that also widens. I would say surely the insurance companies, the banks on the cash flowings are benefited from the CMBS market widening.

I think in our space it’s still really the bespoke solutions in terms of what we’re trying to do for people. So it’s really just a matter of everyone kind of has a view of the appropriate risk adjusted returns and just finding deals that work. So I wouldn’t say kind of necessarily CMBS looked obviously credit overall has widened.

So I do think certainly we all are aware of what’s happening in energy and pharmaceuticals and stuff like that. So I do think a lot of us within organizations that are kind of across sectors, so I think we all kind of think that. And so if someone who was going to round off around down, you may be running down in terms of spreads.

And I think maybe philosophically that made spreads go a little wider for us in the quarter just because I think people kind of took a view of more macro stuff, but it wasn’t specific BBB minus CMBS is here, thus my mezz spread is there.

I think it was just more of a feeling of hey there was a little choppy, may be, if anything it shouldn’t go tight or go wider, so far when I bid this deal, I mean, I will bid it a little wider, and sometimes you get hit, and sometimes you don’t in terms of from a borrower perspective..

And I think on the margin Jade from a competition perspective, and trust me there’s plenty of competition out there but I think we’ve always had in real estate when the corporate markets or the high yield markets get too tight, you tend to get guys poking around real estate looking for higher return.

I think the backup in the high yield market given energy and pharmaceutical certainly gives those who are more traditionally focused on those markets plenty to do over there.

And on the margin, you might have a handful of folks who were interested in mezz when they couldn’t find anything else to do who were sort of less interested these days because they’ve got plenty to do given their core focus..

And just in terms of borrower sentiments regarding pricing in the market, potential frothiness in the commercial real estate market, are you seeing any changes in terms of your overall investment outlook, is there any change there?.

It’s still a very bottoms-up approach where you see deal-by-deal and market-by-market. New York City hotels are perfect example across our portfolio both ARI and other vehicles we have a lot of New York City exposure. We’ve certainly seen softness in the market, which has been well reported with the REITs and others.

But we still did acquisition financing this quarter on New York City hotel. So we obviously build that into our underwriting. But we were still willing and able to do it and there was still a buyer of a hotel who put a lot of equity behind us. So there’s really no red-zoning for us really kind of looking on a deal-by-deal.

In terms of activity, look, there’s still plenty of equity looking at various deals. We still do a tremendous amount of acquisition financing, occasionally refinancing, but still a lot of acquisitions. So I would still say there’s lot of money looking at commercial real estate as an attractive asset class.

Also on the debt side, you’ll see all the reports, the insurance company originations are up, the banks are up. So I mean really, I think, the lending markets are hitting on all cylinders.

Still I would say maintaining some level of discipline clearly portfolio lenders maintaining a higher level of discipline than kind of a securitization lender just given one holding on the books and one selling it. But as far as – we see plenty of guys who are selling stuff and then turning around going and buying, going buying things.

We really haven’t seen people, wholesale exiting markets or exiting properties, it just might be their business plan was achieved they want to monetize some gains and they turn around and go buy something else..

In terms of quarterly capital deployment or pace of originations, do you think $200 million for a quarter is a reasonable assumption? It’s been somewhat lumpy times around capital issuance, but it seems like you guys have adequate capacity for that?.

Yes look it’s always going to lumpy, but I think as a general sort of starting point, I think, that that number makes some sense could be $301 million in one quarter, could be $150 million another quarter, but I think that’s a reasonable estimate..

And in terms of prepayment expectations for the balance of 4Q, and also I think referring to the slide where you provide fully-extended maturities, I would anticipate higher prepayment amount, than what you show in the full extensions.

But are there additional loans that could prepay or repay in the fourth quarter or aside from what you have received so far?.

Well, I mean like a bunch of our condo transactions are closing condos, so we’ll get some repayments from that. But I’m thinking of the portfolio and what we’re anticipating, I don’t think we’re thinking really any large repayments, again asking some repayments from individual condos as for the remainder of the quarter..

Okay. Thanks very much for taking my questions. I appreciate it..

Thanks, Jade..

Our next question comes from Rick Shane from JPMorgan. Your line is open..

Hi, guys, a couple of questions. Strategically, you are very flexible in terms of being able to either participate in the first lien market or the mezz market, which differentiates you somewhat from your peers. I’m curious given what we’re seeing in the loan markets, in the primary markets.

If you have a strong view, right now, and obviously over the last 18 months, the mezz portfolio has been growing pretty fast. I’m curious if you’re seeing a shift in terms of risk-adjusted opportunities..

Scott, do you want to comment..

No, I mean, I think the last quarter was pretty emblematic with what we’re doing, we’re doing both. However, we’re doing our first mortgages. We’re doing mezz and the mezz is on cash flowing properties as well as development. The first mortgage is obviously for us hit our yields and needs to be in some level of transition.

The cash flowing market where you have the banks, insurance companies and CMBS is not really market for us or our brother, so it needs to have some level of transition. So, we’re seeing and doing at all..

Got it. Okay..

And then there is no – no real shift. I mean, I would say – if I would say philosophically, when we do a whole loan, we do look at the whole – the whole loan and use our financing. We’re really – today, I don’t think ongoing really in the business of taking something down and trying to sell that that a note.

If we’re going to just do the mezz, we’d rather partner with a bank upfront and work with them on that as opposed to kind of taking that extra risk of taking something down and trying to have to sell it..

Got it and then just a housekeeping issue. You talked a little bit about the $130 million repayment that you received this quarter. I think – if you mentioned – if there was going to be a prepayment fee on that so we can get our model screwed up….

We basically said there was $130 million prepaid in the third quarter, which it had a prepayment fee. There were fees associated which Megan commented on. And then we mentioned that after the quarter, there was $60 million pay down, which was really mentioned because it was our – one of our larger condo exposures.

So we wanted to let people know that that was put away at a very attractive return, but there is no material prepayment fee associated with that..

Scott I thought the $130 million was post quarter, I must have misread it, before I….

Yes..

Thanks guys..

You got it..

Our next question comes from Mike Levine from Oppenheimer. Your line is open..

Hey guys. Congratulations on a good quarter. I hopped on late so I was going to ask about the state of the market because obviously people are – seem to be getting increasingly concerned and I know the last couple of questions have been on that.

So I just want to get your thoughts, but anyone want to add anything?.

Can you say that again, Mike? For whatever you broke up with..

Yes, I hopped on late. I was going to ask you guys your thoughts on the market. People seem to be getting more and more concerned that we’re in the later innings of this cycle. I know you’ve….

I mean like where – at a high level and where as a firm we’re both in the real estate equity business and the real estate credit business. And it’s very much bottoms up deal-by-deal driven, right.

I think there is clearly, I think what’s fueling the debate right now, is that there is clearly a disparity between public market pricing as evidenced by the equity REITs which are trading at discounts to perceived private market valuations for the first time in quite some time.

And I think obviously those that read Green Street or other industry pieces are trying to figure out which is right. The private markets or the public markets.

Generally speaking I would say that in the markets where operating in – operating fundamentals continue to remain pretty positive fund flows and level activity remain pretty positive and that’s important to us if you think about our lending business effectively being a derivative business to transaction activity.

We are not Pollyannaish about thinking that trees grow to the sky on every deal we’re going bottoms up. And certainly relative to the equity that’s going into any transaction making much more conservative assumptions about occupancy levels, rent growth, sell our values, ADR levels, whatever operating metric you want to use for a particular asset.

So I would say there’s still a lot of activity in the market, there is still a lot for us to look at. And I would say the pipeline that we have today at least at a high level would indicate to me that there’s still a lot that we will end up doing, that seems to meet our definition of attractive risk-adjusted returns.

But we certainly read everything that is being written about the market these days, both pro and con.

And I think that’s just one inputs into our bottoms up underwriting, but I would say there hasn’t been any noticeable shift in the market other than probably the gapping out that we’ve seen in CMBS spreads which one could argue is more about what’s going on in credit in general as supposed to being specific about real estate..

Okay. Thank you..

You got it..

[Operator Instructions] We have a follow-up from Dan Altshcer from FBR. Your line is open..

Thanks everyone. Sorry for extending the call, I just want a follow-up on something. We talked a lot about the banks and insurance companies, or you talked about banks and insurance companies and where they currently stand. GE Capital now that they are kind of out of the business are in some new form if you will.

Can you just comment a little bit, had you seen them prior does there going away really mean anything for you guys?.

Haven’t really competed with them. Look, I would say they were kind of an odd spot in the market where they would do higher leverage than your traditional bank or insurance company, but price is much tighter than like your debt fund.

So I would say, overall from a market perspective, I would say it’s probably good I mean more obviously always one of competitors good, but they really did take advantage of their size and cost of funding to kind of be normally in the market where if they wanted something or something fit of them, they did it because – again most people, the banks and insurance companies would generally how they’re leveraged the price very tight.

Other folks will price higher and do more leverage and there were kind of a hybrid. So all-in all-good. I think that people have been that were there are dispersed different shops have picked up different people. So to me it can only be a positive that one large group is out of the market, but they were not a group that we felt competed against..

Got it. Thanks, Scott..

We have a follow-up question from Jade Rahmani from KBW. Your line is open..

Thanks..

Hey, Jade..

Hi, just a couple of quick ones.

In terms of the fourth quarter given the timing of the capital raise – preferred equity dividend, do think that it’s reasonable that 4Q earnings will exceed to $0.44 3Q dividend?.

We’re comfortable with that. Yes..

Okay.

And then in terms of the North Dakota exposure the $55 million in the slide deck, is that the fully amortized remaining exposure?.

It started at $58 million and it’s now down to about $54 million..

Okay.

And then just finally, are there any non-performing loans in the portfolio at this point? Any delinquencies that we should know about?.

No..

Great. Thanks for taking the follow-up..

You got it..

At this time, I’m showing no further question. I would like to turn the call back over to Mr. Stuart Rothstein, CEO for closing remarks..

Thank you, operator and thanks for everybody for participating..

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the program. You may all disconnect. Everyone, have a great day..