Ares Commercial Real Estate Corporation Reports Fourth Quarter and Full Year 2020 Results
Ares Commercial Real Estate Corporation (NYSE:ACRE) reported Q4 2020 GAAP net income of $14.4 million ($0.43/share) and Distributable Earnings of $13.7 million ($0.41/share). For the full year, GAAP net income was $21.8 million ($0.66/share) with Distributable Earnings at $45.1 million ($1.36/share). The company declared a regular dividend of $0.33 and a supplemental dividend of $0.02 for Q1 2021, reflecting strong earnings and a robust balance sheet. ACRE closed a $667 million CRE CLO, reducing funding costs and increasing non-recourse financing to 67%. The annual meeting is set for May 25, 2021.
- Q4 2020 GAAP net income of $14.4 million ($0.43/share).
- Full year GAAP net income of $21.8 million ($0.66/share).
- Declared Q1 2021 dividend of $0.33 and supplemental dividend of $0.02.
- Strong outlook for 2021 Distributable Earnings with dividends projected to be met or exceeded.
- Closed a $667 million CRE CLO, reducing funding costs.
- None.
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
“We ended the year in a position of strength with our highest quarterly Distributable Earnings in 2020, an attractive balance sheet, consistent interest collections and no credit related losses,” said Bryan Donohoe, Chief Executive Officer of ACRE. “Based on our strong outlook for 2021 Distributable Earnings, we declared our regular first quarter dividend of
“Our financing structure has been a source of strength throughout 2020 and we recently took additional steps to further reduce our funding costs,” said Tae-Sik Yoon, Chief Financial Officer of ACRE. “In January, we closed a
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(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 of Distributable Earnings.
2021 ANNUAL STOCKHOLDERS MEETING
The Board of Directors set March 26, 2021 as the record date for the Company’s 2021 Annual Meeting of Stockholders. The 2021 Annual Meeting of Stockholders will be held on May 25, 2021.
COMMON STOCK DIVIDEND
On December 15, 2020, the Company declared a cash dividend of
ADDITIONAL INFORMATION
The Company issued a presentation of its fourth quarter and full year 2020 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 “Fourth Quarter and Full Year 2020 Earnings Presentation.” The Company also filed its Annual Report on Form 10-K for the year ended December 31, 2020 with the U.S. Securities and Exchange Commission on February 18, 2021.
CONFERENCE CALL AND WEBCAST INFORMATION
On Thursday, February 18, 2021, the Company invites all interested persons to attend its webcast/conference call at 12:00 p.m. (Eastern Time) to discuss its fourth quarter and full year 2020 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 6155965 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 March 4, 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 10150859. An archived replay will also be available through March 4, 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. 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) |
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As of December 31, |
||||||
|
2020 |
|
2019 |
||||
ASSETS |
|
|
|
||||
Cash and cash equivalents |
$ |
74,776 |
|
|
$ |
5,256 |
|
Restricted cash |
— |
|
|
379 |
|
||
Loans held for investment ( |
1,815,219 |
|
|
1,682,498 |
|
||
Current expected credit loss reserve |
(23,604) |
|
|
— |
|
||
Loans held for investment, net of current expected credit loss reserve |
1,791,615 |
|
|
1,682,498 |
|
||
Real estate owned, net |
37,283 |
|
|
37,901 |
|
||
Other assets ( |
25,823 |
|
|
58,100 |
|
||
Total assets |
$ |
1,929,497 |
|
|
$ |
1,784,134 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
||||
LIABILITIES |
|
|
|
||||
Secured funding agreements |
$ |
755,552 |
|
|
$ |
728,589 |
|
Notes payable |
61,837 |
|
|
54,708 |
|
||
Secured term loan |
110,000 |
|
|
109,149 |
|
||
Collateralized loan obligation securitization debt (consolidated VIE) |
443,871 |
|
|
443,177 |
|
||
Secured borrowings |
59,790 |
|
|
— |
|
||
Due to affiliate |
3,150 |
|
|
2,761 |
|
||
Dividends payable |
11,124 |
|
|
9,546 |
|
||
Other liabilities ( |
11,158 |
|
|
9,865 |
|
||
Total liabilities |
1,456,482 |
|
|
1,357,795 |
|
||
Commitments and contingencies |
|
|
|
||||
STOCKHOLDERS' EQUITY |
|
|
|
||||
Common stock, par value |
329 |
|
|
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