Third quarter GAAP net income of $10.0
million or $0.21 per diluted common share and Distributable
Earnings(1) of $17.5 million or $0.37 per diluted common
share
Closed $485 million of new loan
commitments
- Subsequent to end of third quarter
-
Declared fourth quarter 2021 dividend of
$0.33 per diluted common share and a supplemental dividend of $0.02
per diluted common share
Ares Commercial Real Estate Corporation (the “Company”)
(NYSE:ACRE), a specialty finance company engaged in originating and
investing in commercial real estate assets, reported generally
accepted accounting principles (“GAAP”) net income of $10.0 million
or $0.21 per diluted common share and Distributable Earnings(1) of
$17.5 million or $0.37 per diluted common share for the third
quarter of 2021.
“ACRE delivered another quarter of strong and stable
Distributable Earnings supported by robust new investment
activity,” said Bryan Donohoe, Chief Executive Officer of Ares
Commercial Real Estate Corporation. “During the third quarter, we
fully deployed the proceeds from our June equity offering, which
enabled us to grow our loan portfolio by more than 30% versus the
same period a year ago.”
“Based on our strong actual results year-to-date and continued
confidence in our outlook, we expect to more than fully cover our
regular and supplemental dividends from our Distributable Earnings
for the year,” said Tae-Sik Yoon, Chief Financial Officer of Ares
Commercial Real Estate Corporation. “Looking forward, as most of
our loans are floating rate combined with interest rate hedges on
our liabilities, we believe that we are well-positioned to benefit
should short-term interest rates materially increase.”
_________________________________
(1) Beginning in the fourth quarter of 2020, the non-GAAP
financial measure of Core Earnings was renamed to Distributable
Earnings. Refer to Schedule I for the definition and reconciliation
of Distributable Earnings.
COMMON STOCK DIVIDEND
On July 30, 2021, the Company declared a regular cash dividend
of $0.33 per common share and a supplemental cash dividend of $0.02
per common share for the third quarter of 2021. The third quarter
2021 dividend and supplemental cash dividend were paid on October
15, 2021 to common stockholders of record as of September 30,
2021.
On November 3, 2021, the Company declared a regular cash
dividend of $0.33 per common share and a supplemental cash dividend
of $0.02 per common share for the fourth quarter of 2021. The
fourth quarter 2021 dividend and supplemental cash dividend will be
payable on January 19, 2022 to common stockholders of record as of
December 31, 2021.
ADDITIONAL INFORMATION
The Company issued a presentation of its third quarter 2021
results, which can be viewed at www.arescre.com on the Investor
Resources section of our home page under Events and Presentations.
The presentation is titled “Third Quarter 2021 Earnings
Presentation.” The Company also filed its Quarterly Report on Form
10-Q for the quarter ended September 30, 2021 with the U.S.
Securities and Exchange Commission on November 3, 2021.
CONFERENCE CALL AND WEBCAST INFORMATION
On Wednesday, November 3, 2021, the Company invites all
interested persons to attend its webcast/conference call at 12:00
p.m. (Eastern Time) to discuss its third quarter 2021 financial
results.
All interested parties are invited to participate via telephone
or the live webcast, which will be hosted on a webcast link located
on the Home page of the Investor Resources section of the Company’s
website at http://www.arescre.com. Please visit the website to test
your connection before the webcast. Domestic callers can access the
conference call by dialing +1 (888) 317-6003. International callers
can access the conference call by dialing +1 (412) 317-6061. All
callers will need to enter the Participant Elite Entry Number
7647248 followed by the # sign and reference “Ares Commercial Real
Estate Corporation” once connected with the operator. All callers
are asked to dial in 10-15 minutes prior to the call so that name
and company information can be collected. For interested parties,
an archived replay of the call will be available through November
17, 2021 at 5:00 p.m. (Eastern Time) to domestic callers by dialing
+1 (877) 344-7529 and to international callers by dialing +1 (412)
317-0088. For all replays, please reference conference number
10159872. An archived replay will also be available through
November 17, 2021 on a webcast link located on the Home page of the
Investor Resources section of the Company’s website.
ABOUT ARES COMMERCIAL REAL ESTATE CORPORATION
Ares Commercial Real Estate Corporation is a specialty finance
company primarily engaged in originating and investing in
commercial real estate loans and related investments. Through its
national direct origination platform, the Company provides a broad
offering of flexible and reliable financing solutions for
commercial real estate owners and operators. The Company originates
senior mortgage loans, as well as subordinate financings, mezzanine
debt and preferred equity, with an emphasis on providing value
added financing on a variety of properties located in liquid
markets across the United States. Ares Commercial Real Estate
Corporation elected and qualified to be taxed as a real estate
investment trust and is externally managed by a subsidiary of Ares
Management Corporation. For more information, please visit
www.arescre.com. The contents of such website are not, and should
not be deemed to be, incorporated by reference herein.
FORWARD-LOOKING STATEMENTS
Statements included herein or on the webcast / conference call
may constitute “forward-looking statements” within the meaning of
the Private Securities Litigation Reform Act of 1995, Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities and Exchange Act of 1934, as amended, which relate to
future events or the Company’s future performance or financial
condition. These statements are not guarantees of future
performance, condition or results and involve a number of risks and
uncertainties. Actual results may differ materially from those in
the forward-looking statements as a result of a number of factors,
including the returns on current and future investments, rates of
repayments and prepayments on the Company’s mortgage loans,
availability of investment opportunities, the Company’s ability to
originate additional investments and completion of pending
investments, the availability of capital, the availability and cost
of financing, market trends and conditions in the Company’s
industry and the general economy, the level of lending and
borrowing spreads and interest rates, commercial real estate loan
volumes, the impact of the COVID-19 pandemic and the pandemic's
impact on the U.S. and global economy, the Company’s ability to pay
future dividends at historical levels or at all, and the risks
described from time to time in the Company’s filings with the
Securities and Exchange Commission (the “SEC”), including, but not
limited to, the risk factors described in Part I, Item 1A. Risk
Factors in the Company's Annual Report on Form 10-K, filed with the
SEC on February 18, 2021 and the risk factors described in Part II,
Item 1A. Risk Factors in the Company's Quarterly Report on Form
10-Q, filed with the SEC on November 3, 2021. Any forward-looking
statement, including any contained herein, speaks only as of the
time of this press release and Ares Commercial Real Estate
Corporation undertakes no duty to update any forward-looking
statements made herein or on the webcast/conference call.
Projections and forward-looking statements are based on
management’s good faith and reasonable assumptions, including the
assumptions described herein.
ARES COMMERCIAL REAL ESTATE
CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(in thousands, except share
and per share data)
As of
September 30, 2021
December 31, 2020
(unaudited)
ASSETS
Cash and cash equivalents
$
15,787
$
74,776
Loans held for investment ($1,135,660 and
$550,590 related to consolidated VIEs, respectively)
2,363,499
1,815,219
Current expected credit loss reserve
(22,691)
(23,604)
Loans held for investment, net of current
expected credit loss reserve
2,340,808
1,791,615
Real estate owned, net
36,695
37,283
Other assets ($2,524 and $1,079 of
interest receivable related to consolidated VIEs, respectively;
$47,618 and $6,410 of other receivables related to consolidated
VIEs, respectively)
73,395
25,823
Total assets
$
2,466,685
$
1,929,497
LIABILITIES AND STOCKHOLDERS'
EQUITY
LIABILITIES
Secured funding agreements
$
656,014
$
755,552
Notes payable
47,381
61,837
Secured term loan
60,000
110,000
Collateralized loan obligation
securitization debt (consolidated VIEs)
940,133
443,871
Secured borrowings
59,962
59,790
Due to affiliate
3,947
3,150
Dividends payable
16,523
11,124
Other liabilities ($549 and $391 of
interest payable related to consolidated VIEs, respectively)
9,982
11,158
Total liabilities
1,793,942
1,456,482
Commitments and contingencies
STOCKHOLDERS' EQUITY
Common stock, par value $0.01 per share,
450,000,000 shares authorized at September 30, 2021 and December
31, 2020 and 47,001,821 and 33,442,332 shares issued and
outstanding at September 30, 2021 and December 31, 2020,
respectively
464
329
Additional paid-in capital
701,370
497,803
Accumulated other comprehensive income
19
—
Accumulated earnings (deficit)
(29,110)
(25,117)
Total stockholders' equity
672,743
473,015
Total liabilities and stockholders'
equity
$
2,466,685
$
1,929,497
ARES COMMERCIAL REAL ESTATE
CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except share
and per share data)
For the three months ended
September 30,
For the nine months ended
September 30,
2021
2020
2021
2020
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Revenue:
Interest income
$
34,023
$
30,626
$
95,587
$
91,908
Interest expense
(12,669)
(11,875)
(35,900)
(40,450)
Net interest margin
21,354
18,751
59,687
51,458
Revenue from real estate owned
5,850
3,623
12,271
10,032
Total revenue
27,204
22,374
71,958
61,490
Expenses:
Management and incentive fees to
affiliate
3,175
1,847
8,693
5,771
Professional fees
480
639
1,880
2,202
General and administrative expenses
1,119
969
3,470
2,797
General and administrative expenses
reimbursed to affiliate
773
802
2,313
2,890
Expenses from real estate owned
5,339
4,046
12,458
13,976
Total expenses
10,886
8,303
28,814
27,636
Provision for current expected credit
losses
6,367
(1,048)
(756)
22,063
Realized losses on loans sold
—
4,008
—
4,008
Change in unrealized losses on loans held
for sale
—
(3,998)
—
—
Income before income taxes
9,951
15,109
43,900
7,783
Income tax expense, including excise
tax
—
181
593
350
Net income attributable to common
stockholders
$
9,951
$
14,928
$
43,307
$
7,433
Earnings per common share:
Basic earnings per common share
$
0.21
$
0.45
$
1.06
$
0.23
Diluted earnings per common share
$
0.21
$
0.44
$
1.05
$
0.22
Weighted average number of common
shares outstanding:
Basic weighted average shares of common
stock outstanding
46,957,339
33,337,445
40,840,453
32,852,553
Diluted weighted average shares of common
stock outstanding
47,209,469
33,550,444
41,120,751
33,072,085
Dividends declared per share of common
stock(1)
$
0.35
$
0.33
$
1.05
$
0.99
(1) There is no assurance dividends will continue at these
levels or at all.
SCHEDULE I
Reconciliation of Net Income to Non-GAAP
Distributable Earnings
Beginning in the fourth quarter of 2020, the non-GAAP financial
measure of Core Earnings was renamed to Distributable Earnings to
more appropriately reflect the principal purpose of the measure.
Distributable Earnings helps the Company evaluate its financial
performance excluding the effects of certain transactions and GAAP
adjustments that it believes are not necessarily indicative of its
current loan origination portfolio and operations. To maintain the
Company’s REIT status, the Company is generally required to
annually distribute to its stockholders substantially all of its
taxable income. The Company believes the disclosure of
Distributable Earnings provides useful information to investors
regarding the Company's ability to pay dividends, which is one of
the principal reasons investors invest in the Company. The
presentation of this additional information is not meant to be
considered in isolation or as a substitute for financial results
prepared in accordance with GAAP. Distributable Earnings is defined
as net income (loss) computed in accordance with GAAP, excluding
non-cash equity compensation expense, the incentive fees the
Company pays to its Manager (Ares Commercial Real Estate Management
LLC), depreciation and amortization (to the extent that any of the
Company’s target investments are structured as debt and the Company
forecloses on any properties underlying such debt), any unrealized
gains, losses or other non-cash items recorded in net income (loss)
for the period, regardless of whether such items are included in
other comprehensive income or loss, or in net income (loss),
one-time events pursuant to changes in GAAP and certain non-cash
charges after discussions between the Company’s manager and the
Company’s independent directors and after approval by a majority of
the Company’s independent directors. Loan balances that are deemed
to be uncollectible are written off as a realized loss and are
included in Distributable Earnings. Distributable Earnings is
aligned with the calculation of “Core Earnings,” which is defined
in the Management Agreement and is used to calculate the incentive
fees the Company pays to its Manager.
Reconciliation of net income attributable
to common stockholders, the most directly comparable GAAP financial
measure, to Distributable Earnings is set forth in the table below
for the three and twelve months ended September 30, 2021 ($ in
thousands):
For the three months ended
September 30, 2021
For the twelve months ended
September 30, 2021
Net income attributable to common
stockholders
$
9,951
$
57,713
Stock-based compensation
428
1,828
Incentive fees to affiliate
572
2,456
Depreciation of real estate owned
225
898
Provision for current expected credit
losses
6,367
(2,633)
Distributable Earnings
$
17,543
$
60,262
Net income attributable to common
stockholders
$
0.21
$
1.48
Stock-based compensation
0.01
0.05
Incentive fees to affiliate
0.01
0.06
Depreciation of real estate owned
—
0.02
Provision for current expected credit
losses
0.14
(0.07)
Basic Distributable Earnings per common
share
$
0.37
$
1.55
Net income attributable to common
stockholders
$
0.21
$
1.47
Stock-based compensation
0.01
0.05
Incentive fees to affiliate
0.01
0.06
Depreciation of real estate owned
—
0.02
Provision for current expected credit
losses
0.13
(0.07)
Diluted Distributable Earnings per
common share
$
0.37
$
1.54
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211103005434/en/
INVESTOR RELATIONS
Ares Commercial Real Estate Corporation Carl Drake or Veronica
Mendiola Mayer (888) 818-5298 iracre@aresmgmt.com
Ares Commercial Real Est... (NYSE:ACRE)
Graphique Historique de l'Action
De Mar 2024 à Avr 2024
Ares Commercial Real Est... (NYSE:ACRE)
Graphique Historique de l'Action
De Avr 2023 à Avr 2024