Fourth quarter GAAP net income of $9.7
million or $0.33 per diluted common share and Core
Earnings(1) of $10.7 million or $0.37 per diluted common
share
Full-year 2019 GAAP net income of $37.0
million or $1.28 per diluted common share and Core
Earnings(1) of $40.6 million or $1.41 per diluted common
share
- Subsequent to year ended December 31, 2019
-
Raised approximately $73 million of
equity
Closed $238 million of new loans year to
date
Declared first quarter 2020 dividend of
$0.33 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 $9.7 million
or $0.33 per diluted common share and Core Earnings(1) of $10.7
million or $0.37 per diluted common share for the fourth quarter of
2019. The Company reported GAAP net income of $37.0 million or
$1.28 per diluted common share and Core Earnings(1) of $40.6
million or $1.41 per diluted common share for full-year 2019. In
addition, the Company announced that its Board of Directors
declared a first quarter 2020 dividend of $0.33 per diluted common
share payable on April 15, 2020 to common stockholders of record on
March 31, 2020.
“We delivered strong earnings in both the fourth quarter and
full year 2019 due to higher investment activity at attractive
spreads and continued strong performance of our portfolio,” said
Bryan Donohoe, Chief Executive Officer of ACRE. “Looking forward,
we believe we are well positioned to grow our company accretively
on behalf of our stakeholders.”
“ACRE is already off to a strong start in the first quarter of
2020. Year to date, we have completed a $73 million equity
offering, secured a $150 million new financing facility, closed
$238 million of new loans and have an attractive pipeline of
investments,” said Tae-Sik Yoon, Chief Financial Officer of ACRE.
“We remain focused on further enhancing our earnings through our
investment activities and optimizing our borrowing facilities.”
_________________________________
(1)
Core Earnings is a non-GAAP financial
measure. Refer to Schedule I for further details.
2020 ANNUAL STOCKHOLDERS MEETING
The Board of Directors set February 26, 2020 as the record date
for the Company’s 2020 Annual Meeting of Stockholders. The 2020
Annual Meeting of Stockholders will be held on April 23, 2020.
COMMON STOCK DIVIDEND
On November 8, 2019, the Company declared a cash dividend of
$0.33 per common share for the fourth quarter of 2019. The fourth
quarter 2019 dividend was paid on January 15, 2020 to common
stockholders of record as of December 30, 2019.
ADDITIONAL INFORMATION
The Company issued a presentation of its fourth quarter and
full-year 2019 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 2019 Earnings
Presentation.” The Company also filed its Annual Report on Form
10-K for the year ended December 31, 2019 with the U.S. Securities
and Exchange Commission on February 20, 2020.
CONFERENCE CALL AND WEBCAST INFORMATION
On Thursday, February 20, 2020, the Company invites all
interested persons to attend its webcast/conference call at 11:00
a.m. (Eastern Time) to discuss its fourth quarter and full-year
2019 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
8615348 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 5,
2020 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 10137628. An archived replay will also be available through
March 5, 2020 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 and the risks described from time to time in the Company’s
filings with the Securities and Exchange Commission. 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,
2019
2018
ASSETS
Cash and cash equivalents
$
5,256
$
11,089
Restricted cash
379
379
Loans held for investment ($515,896 and
$289,576 related to consolidated VIEs, respectively)
1,682,498
1,524,873
Real estate owned, net
37,901
—
Other assets ($1,309 and $843 of interest
receivable related to consolidated VIEs, respectively; $41,104 and
$51,582 of other receivables related to consolidated VIEs,
respectively)
58,100
66,983
Total assets
$
1,784,134
$
1,603,324
LIABILITIES AND STOCKHOLDERS'
EQUITY
LIABILITIES
Secured funding agreements
$
728,589
$
777,974
Notes payable
54,708
—
Secured term loan
109,149
108,345
Collateralized loan obligation
securitization debt (consolidated VIE)
443,177
270,737
Due to affiliate
2,761
3,163
Dividends payable
9,546
8,914
Other liabilities ($718 and $541 of
interest payable related to consolidated VIEs, respectively)
9,865
8,604
Total liabilities
1,357,795
1,177,737
STOCKHOLDERS' EQUITY
Common stock, par value $0.01 per share,
450,000,000 shares authorized at December 31, 2019 and 2018 and
28,865,610 and 28,755,665 shares issued and outstanding at December
31, 2019 and 2018, respectively
283
283
Additional paid-in capital
423,619
421,739
Accumulated earnings
2,437
3,565
Total stockholders’ equity
426,339
425,587
Total liabilities and stockholders’
equity
$
1,784,134
$
1,603,324
ARES COMMERCIAL REAL ESTATE
CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except share
and per share data)
For the three months ended
December 31, 2019
For the year ended December
31, 2019
Revenue:
Interest income from loans held for
investment
$
28,536
$
114,784
Interest expense
(15,044
)
(62,583
)
Net interest margin
13,492
52,201
Revenue from real estate owned
8,088
25,058
Total revenue
21,580
77,259
Expenses:
Management and incentive fees to
affiliate
1,959
7,363
Professional fees
641
2,194
General and administrative expenses
1,035
4,188
General and administrative expenses
reimbursed to affiliate
764
3,026
Expenses from real estate owned
7,338
22,982
Total expenses
11,737
39,753
Income before income taxes
9,843
37,506
Income tax expense, including excise
tax
183
515
Net income attributable to common
stockholders
$
9,660
$
36,991
Earnings per common share:
Basic earnings per common share
$
0.34
$
1.29
Diluted earnings per common share
$
0.33
$
1.28
Weighted average number of common
shares outstanding:
Basic weighted average shares of common
stock outstanding
28,640,363
28,609,282
Diluted weighted average shares of common
stock outstanding
28,872,975
28,846,641
Dividends declared per share of common
stock
$
0.33
$
1.32
SCHEDULE I
Reconciliation of Net Income to Non-GAAP
Core Earnings
The Company believes the disclosure of Core Earnings provides
useful information to investors regarding the calculation of
incentive fees the Company pays to its manager, Ares Commercial
Real Estate Management LLC, and the Company’s financial
performance. Core Earnings is an adjusted non-GAAP 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. 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. Core Earnings is a non-GAAP measure and is defined as
net income (loss) computed in accordance with GAAP, excluding
non-cash equity compensation expense, the incentive fee,
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 external manager
and the Company’s independent directors and after approval by a
majority of the Company’s independent directors.
Reconciliation of net income attributable to common
stockholders, the most directly comparable GAAP financial measure,
to Core Earnings is set forth in the table below for the three
months and year ended December 31, 2019 ($ in thousands):
For the three months ended
December 31, 2019
For the year ended December
31, 2019
Net income attributable to common
stockholders
$
9,660
$
36,991
Stock-based compensation
482
1,880
Incentive fees to affiliate
378
1,052
Depreciation of real estate owned
219
667
Core Earnings
$
10,739
$
40,590
Net income attributable to common
stockholders
$
0.34
$
1.29
Stock-based compensation
0.02
0.07
Incentive fees to affiliate
0.01
0.04
Depreciation of real estate owned
0.01
0.02
Basic Core Earnings per common
share
$
0.37
$
1.42
Net income attributable to common
stockholders
$
0.33
$
1.28
Stock-based compensation
0.02
0.07
Incentive fees to affiliate
0.01
0.04
Depreciation of real estate owned
0.01
0.02
Diluted Core Earnings per common
share
$
0.37
$
1.41
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200220005261/en/
INVESTOR RELATIONS Ares Commercial Real Estate
Corporation Carl Drake or Veronica Mendiola Mayer (888)-818-5298
iracre@aresmgmt.com
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