ARES COMMERCIAL REAL ESTATE CORPORATION REPORTS SECOND QUARTER 2026 RESULTS
Rhea-AI Summary
Ares Commercial Real Estate (NYSE: ACRE) reported second quarter 2026 GAAP net income of $4.4 million, or $0.08 per diluted share, and Distributable Earnings of $6.9 million, or $0.12 per diluted share. Total revenue was $14.4 million, with net interest margin of $8.6 million and revenue from real estate owned of $5.8 million. Net income compared with a loss of $11.0 million in the prior-year quarter.
The Board declared a regular cash dividend of $0.15 per common share for both the second and third quarters of 2026, with the third quarter dividend payable on October 15, 2026. As of June 30, 2026, total assets were $1.82 billion, loans held for investment net of reserves were $1.61 billion, and stockholders’ equity was $489.2 million. The company closed $130 million of new loan commitments in the quarter and more than $900 million over the last twelve months, and reported over $100 million of available capital.
Positive
- Q2 2026 net income $4.4 million vs. prior-year loss $11.0 million
- Distributable Earnings $6.9 million or $0.12 per diluted share in Q2 2026
- $130 million of new loan commitments in Q2; over $900 million last 12 months
- Total revenue $14.4 million in Q2 2026 vs. $12.6 million in Q2 2025
- Total expenses $9.0 million in Q2 2026 vs. $10.8 million in Q2 2025
- $100+ million of available capital and description of moderate leverage
Negative
- Current expected credit loss reserve $137.8 million vs. $125.8 million at December 31, 2025
- Provision for credit losses $0.9 million in Q2 2026 vs. $20.2 million reversal in Q2 2025
- Stockholders’ equity $489.2 million vs. $509.6 million at December 31, 2025
- Interest expense $19.2 million in Q2 2026 vs. $16.1 million in Q2 2025
- Secured funding agreements $1.17 billion vs. $0.86 billion at December 31, 2025
News Explained
The release reports
Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| May 07 | Q1 earnings report | Negative | -3.3% | GAAP loss and credit costs weighed on quarterly results despite new loan commitments. |
| Feb 10 | Q4 earnings report | Negative | +11.7% | Quarterly and annual GAAP losses contrasted with positive distributable earnings and continued dividend. |
| Nov 07 | Q3 earnings report | Positive | +12.7% | Net income, distributable earnings, commitments, and liquidity supported the quarterly report. |
| Aug 05 | Q2 earnings report | Negative | -8.0% | Large GAAP and distributable losses reflected challenging portfolio and credit conditions. |
| May 07 | Q1 earnings report | Positive | +13.6% | Net income, distributable earnings, repayments, and liquidity strengthened the quarterly report. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Tag-specific earnings history showed four reactions aligned with the reported earnings tone and one divergence.
Key Terms
gaap financial
distributable earnings financial
non-gaap financial measure financial
current expected credit loss reserve financial
real estate investment trust regulatory
AI-generated analysis. How Rhea-AI works. Not financial advice.
Second quarter GAAP net income of
Distributable Earnings1 of
- Subsequent to the three months ended June 30, 2026 -
Declared third quarter 2026 dividend of
"We continue to make advancements in repositioning our portfolio, addressing risk rated 4 and 5 loans, and reducing office loans and REO properties, while investing in new loans," said Bryan Donohoe, Chief Executive Officer of Ares Commercial Real Estate Corporation. "Supported by the Ares platform, in the second quarter, we closed
"During the second quarter, we maintained our balance sheet flexibility with moderate leverage and available capital of over
________________________________________ | |
(1) | Distributable Earnings (Loss) is a non-GAAP financial measure. Refer to Schedule I for the definition and reconciliation of Distributable Earnings (Loss). |
COMMON STOCK DIVIDEND
On May 7, 2026, the Board of Directors of the Company declared a regular cash dividend of
On August 4, 2026, the Board of Directors of the Company declared a regular cash dividend of
ADDITIONAL INFORMATION
The Company issued a presentation of its second quarter 2026 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 "Second Quarter 2026 Earnings Presentation." The Company also filed its Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 with the
CONFERENCE CALL AND WEBCAST INFORMATION
On Tuesday, August 4, 2026, the Company invites all interested persons to attend its webcast/conference call at 12:00 p.m. (Eastern Time) to discuss its second quarter 2026 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 www.arescre.com. Please visit the website to test your connection before the webcast. Domestic callers can access the conference call by dialing +1 (800) 343-5172. International callers can access the conference call by dialing +1 (203) 518-9856. Please provide passcode ACREQ226. 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 September 4, 2026 at 5:00 p.m. (Eastern Time) to domestic callers by dialing +1 (800) 723-0532 and to international callers by dialing +1 (402) 220-2655. An archived replay will also be available through September 4, 2026 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 (the "Company") is a specialty finance company primarily engaged in directly 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 invests in whole and co-invested 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. These statements relate to future events or the Company's future performance or financial condition and include, but are not limited to, statements about potential earnings, the resolution of underperforming loans, increased investment activity, liquidity management, reduction or increase of CECL reserve, reduction or increase of available borrowings, the industry and the loan market. 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 global economic trends and economic conditions, including slower growth, changes to fiscal and monetary policy, inflation, labor shortages, changing interest rates, foreign currency exchange volatility and uncertainties caused by tariffs and trade disputes, as well as geopolitical instability, changes in interest rates and credit spreads, management's estimate of current expected credit losses and current expected credit loss reserve, the amount of commercial mortgage loans requiring refinancing, the demand for commercial real estate loans, the Company's expected investment capacity and available capital, rates of default or decreased recovery rates on the Company's target investments, the Company's business and investment strategy, the Company's projected operating results, the ability of Ares Commercial Real Estate Management LLC ("ACREM" or the Company's "Manager") to locate suitable investments for the Company, monitor, service and administer the Company's investments and execute its investment strategy, 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 10, 2026. 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.
INVESTOR RELATIONS CONTACTS
Ares Commercial Real Estate Corporation
Carl Drake or John Stilmar
(888) 818-5298
iracre@aresmgmt.com
ARES COMMERCIAL REAL ESTATE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) | ||||
As of | ||||
June 30, 2026 | December 31, 2025 | |||
(unaudited) | ||||
ASSETS | ||||
Cash and cash equivalents | $ 17,558 | $ 29,289 | ||
Restricted cash ( | 41,017 | 37,868 | ||
Loans held for investment ( | 1,748,835 | 1,528,806 | ||
Current expected credit loss reserve | (137,810) | (125,756) | ||
Loans held for investment, net of current expected credit loss reserve | 1,611,025 | 1,403,050 | ||
Real estate owned held for investment, net ( | 76,238 | 130,165 | ||
Real estate owned held for sale | 53,934 | — | ||
Other assets ( | 17,503 | 17,770 | ||
Total assets | $ 1,817,275 | $ 1,618,142 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
LIABILITIES | ||||
Secured funding agreements | $ 1,173,027 | $ 858,176 | ||
Secured term loan | 89,722 | 89,360 | ||
Collateralized loan obligation securitization debt (consolidated VIEs) | — | 99,921 | ||
Due to affiliate | 4,199 | 4,061 | ||
Dividends payable | 8,458 | 8,442 | ||
Other liabilities ( | 52,644 | 48,614 | ||
Total liabilities | 1,328,050 | 1,108,574 | ||
Commitments and contingencies | ||||
STOCKHOLDERS' EQUITY | ||||
Common stock, par value | 532 | 532 | ||
Additional paid-in capital | 822,606 | 820,827 | ||
Accumulated earnings (deficit) | (333,913) | (311,791) | ||
Total stockholders' equity | 489,225 | 509,568 | ||
Total liabilities and stockholders' equity | $ 1,817,275 | $ 1,618,142 | ||
ARES COMMERCIAL REAL ESTATE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share data) (unaudited) | ||||||||
For the Three Months Ended | For the Six Months Ended | |||||||
2026 | 2025 | 2026 | 2025 | |||||
Revenue: | ||||||||
Interest income | $ 27,754 | $ 23,117 | $ 52,660 | $ 50,597 | ||||
Interest expense | (19,182) | (16,101) | (36,543) | (34,290) | ||||
Net interest margin | 8,572 | 7,016 | 16,117 | 16,307 | ||||
Revenue from real estate owned | 5,784 | 5,549 | 11,699 | 11,206 | ||||
Total revenue | 14,356 | 12,565 | 27,816 | 27,513 | ||||
Expenses: | ||||||||
Management and incentive fees to affiliate | 2,394 | 2,430 | 4,794 | 4,997 | ||||
Professional fees | 699 | 673 | 1,519 | 1,550 | ||||
General and administrative expenses | 1,723 | 1,995 | 3,140 | 3,715 | ||||
General and administrative expenses reimbursed to affiliate | 853 | 1,024 | 1,639 | 2,027 | ||||
Expenses from real estate owned | 3,301 | 4,628 | 6,435 | 9,123 | ||||
Total expenses | 8,970 | 10,750 | 17,527 | 21,412 | ||||
(Provision for) reversal of current expected credit losses, net | (865) | 20,150 | (12,003) | 25,490 | ||||
Realized losses on loans | — | (33,000) | (3,340) | (33,000) | ||||
Income (loss) before income taxes | 4,521 | (11,035) | (5,054) | (1,409) | ||||
Income tax expense (benefit), including excise tax | 138 | — | 169 | 281 | ||||
Net income (loss) attributable to common stockholders | $ 4,383 | $ (11,035) | $ (5,223) | $ (1,690) | ||||
Earnings (loss) per common share: | ||||||||
Basic earnings (loss) per common share | $ 0.08 | $ (0.20) | $ (0.09) | $ (0.03) | ||||
Diluted earnings (loss) per common share | $ 0.08 | $ (0.20) | $ (0.09) | $ (0.03) | ||||
Weighted average number of common shares outstanding: | ||||||||
Basic weighted average shares of common stock outstanding | 55,367,375 | 54,856,949 | 55,344,923 | 54,842,959 | ||||
Diluted weighted average shares of common stock outstanding | 56,354,988 | 54,856,949 | 55,344,923 | 54,842,959 | ||||
Dividends declared per share of common stock1 | $ 0.15 | $ 0.15 | $ 0.30 | $ 0.30 | ||||
____________________________ | |
(1) | There is no assurance dividends will continue at these levels or at all. |
SCHEDULE I
Reconciliation of Net Income (Loss) to Non-GAAP Distributable Earnings (Loss)
Distributable Earnings (Loss) is a non-GAAP financial measure that 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 (Loss) provides useful information to investors regarding the Company's ability to pay dividends, which is one of the principal reasons the Company believes 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 (Loss) is defined as net income (loss) attributable to common stockholders computed in accordance with GAAP, excluding non-cash equity compensation expense, the incentive fees the Company pays to its Manager, 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 (Loss). Distributable Earnings (Loss) 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 (loss) attributable to common stockholders, the most directly comparable GAAP financial measure, to Distributable Earnings (Loss) is set forth in the table below for the three and twelve months ended June 30, 2026 ($ in thousands):
For the Three Months Ended June 30, 2026 | For the Twelve Months Ended June 30, 2026 | ||
Net income (loss) attributable to common stockholders | $ 4,383 | $ (4,434) | |
Stock-based compensation | 882 | 3,696 | |
Incentive fees to affiliate | — | — | |
Depreciation and amortization of real estate owned | 749 | 5,104 | |
Provision for (reversal of) current expected credit losses, net | 865 | 19,648 | |
Distributable Earnings (Loss) | $ 6,879 | $ 24,014 | |
Net income (loss) attributable to common stockholders | $ 0.08 | $ (0.08) | |
Stock-based compensation | 0.02 | 0.07 | |
Incentive fees to affiliate | — | — | |
Depreciation and amortization of real estate owned | 0.01 | 0.09 | |
Provision for (reversal of) current expected credit losses, net | 0.02 | 0.36 | |
Basic Distributable Earnings (Loss) per common share | $ 0.12 | $ 0.44 | |
Net income (loss) attributable to common stockholders | $ 0.08 | $ (0.08) | |
Stock-based compensation | 0.02 | 0.07 | |
Incentive fees to affiliate | — | — | |
Depreciation and amortization of real estate owned | 0.01 | 0.09 | |
Provision for (reversal of) current expected credit losses, net | 0.02 | 0.35 | |
Diluted Distributable Earnings (Loss) per common share | $ 0.12 | $ 0.43 |
____________________________ | |
Numbers presented may not foot due to rounding. |
View original content to download multimedia:https://www.prnewswire.com/news-releases/ares-commercial-real-estate-corporation-reports-second-quarter-2026-results-302841855.html
SOURCE Ares Commercial Real Estate Corporation