Ares Commercial Real Estate Corporation Reports Fourth Quarter and Full Year 2020 Results
02/18/2021 - 06:00 AM
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 $14.4 million or $0.43 per diluted common share and Distributable Earnings(1) of $13.7 million or $0.41 per diluted common share for the fourth quarter of 2020. The Company reported GAAP net income of $21.8 million or $0.66 per diluted common share and Distributable Earnings(1) of $45.1 million or $1.36 per diluted common share for full year 2020.
“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 $0.33 per share as well as a supplemental quarterly dividend of $0.02 per share. This supplemental quarterly dividend reflects a portion of the earnings benefit that we expect to generate from LIBOR floors on our loans and the related interest rate protection we put in place on our liabilities. We expect this earnings benefit and the supplemental dividends to remain in place throughout 2021 and we plan to retain excess earnings to make new investments. As we have for the past four years, we believe that our Distributable Earnings will meet or exceed our dividends, including the supplemental dividends, for 2021.”
“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 $667 million CRE CLO that reduced our weighted average funding costs, increased our share of non-recourse financing to 67% of total aggregate amounts outstanding and enabled us to invest in new loans to grow our balance sheet.”
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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 $0.33 per common share for the fourth quarter of 2020. The fourth quarter 2020 dividend was paid on January 15, 2021 to common stockholders of record as of December 30, 2020. On February 17, 2021, the Company declared a cash dividend of $0.33 per common share for the first quarter of 2021 and a supplemental cash dividend of $0.02 per common share. The first quarter 2021 and supplemental cash dividend will be payable on April 15, 2021 to common stockholders of record as of March 31, 2021.
ADDITIONAL INFORMATION
The Company issued a presentation of its fourth quarter and full year 2020 results, which can be viewed at www.arescre.com
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
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)
As of December 31,
2020
2019
ASSETS
Cash and cash equivalents
$
74,776
$
5,256
Restricted cash
—
379
Loans held for investment ($550,590 and $515,896 related to consolidated VIEs, respectively)
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 ($1,079 and $1,309 of interest receivable related to consolidated VIEs,
$6,410 and $41,104 of other receivables related to consolidated VIEs,
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 ($391 and $718 of interest payable related to consolidated VIEs, respectively)
11,158
9,865
Total liabilities
1,456,482
1,357,795
Commitments and contingencies
STOCKHOLDERS' EQUITY
Common stock, par value $0.01 per share, 450,000,000 shares authorized at December 31, 2020 and December
329
Ares Commercial Real Estate Corp
ACRE Rankings
#3760 Ranked by Stock Gains
ACRE Stock Data
Industry
Other Financial Vehicles
Sector
Finance and Insurance
Tags
Finance, Investment Managers, Finance and Insurance, Other Financial Vehicles
Country
US
City
New York
About ACRE
our company name has been changed to barings multifamily capital llc in conjunction with the september 30, 2016 acquisition of the acre capital companies by barings real estate advisers llc. a new page will be coming soon. barings multifamily capital llc (“barings multifamily”) provides comprehensive financing solutions to affordable housing, market-rate multifamily, senior housing and healthcare investors and property owners nationwide. barings multifamily capital llc (and its subsidiaries) is an equal opportunity employer and considers all applicants for employment without regard to race, color, religion, ethnicity, creed, sex, age, national origin, citizenship status, disability, pregnancy, marital status, partnership status, sexual orientation, status regarding public assistance, military or veteran status, domestic violence victim status, gender identity and expression, genetic predisposition and carrier status, status as unemployed, political affiliation or any other characterist
