News Column

Ares Commercial Real Estate Corporation Reports First Quarter 2014 Results

May 24, 2014



By a News Reporter-Staff News Editor at Real Estate & Investment Business -- Ares Commercial Real Estate Corporation (the "Company," "ACRE," "we," and "our") (NYSE:ACRE), a specialty finance company primarily engaged in principal lending and mortgage banking of commercial real estate ("CRE") investments reported net income of $4.8 million or $0.17 per basic and diluted common share for the quarter ended March 31, 2014. In addition, the Company announced that its Board of Directors has declared a second quarter 2014 dividend of $0.25 per common share.

"Our origination platform continues to gain momentum, as our first quarter new commitments increased 10% year-over-year," said Todd Schuster, CEO and President of ACRE. "Our platform's reach is expanding with 80% of new commitments in the quarter provided to new sponsor relationships. As we continue to broaden our capabilities and relationships through new geographies and products, we expect to enhance our ability to generate attractive risk adjusted returns."

"To capitalize on growing market opportunities, we have expanded our borrowing capacity in our principal lending business to nearly $1.3 billion, including a total of $370 million under our new City National Bank and UBS facilities and expanded Citibank Facility," said Tae-Sik Yoon, Chief Financial Officer of ACRE. "This incremental borrowing capacity provides enhanced flexibility and improved economics for ACRE stockholders as we continue to optimize our balance sheet. Our ability to source new and diverse financing alternatives, including the commercial mortgage-backed securitization we closed in the fourth quarter of 2013, demonstrates the breadth of our platform and acute focus on managing our borrowing capabilities." FIRST QUARTER 2014 FINANCIAL HIGHLIGHTS Financial Results and Activities: For the first quarter of 2014, net income was $4.8 million or $0.17 per basic and diluted common share.

For the principal lending business, originations for the first quarter of 2014 totaled $193.1 in commitments and $179.0 million in outstanding principal and ACRE ended the first quarter of 2014 with 39 loans totaling more than $1.1 billion in outstanding principal.

For the mortgage banking business, ACRE Capital LLC, a wholly owned subsidiary of ACRE ("ACRE Capital"), rate-locked two new senior loans totaling $28.2 million in unpaid principal balance during the first quarter of 2014 and ended the quarter with a servicing portfolio consisting of 989 loans with an unpaid principal balance of $3.8 billion and mortgage servicing rights with a carrying value of $60.1 million. Capital and Other Activities: On March 12, 2014, the Company, through a wholly owned subsidiary, entered into a $50 million secured revolving funding facility with City National Bank (the "CNB Facility"). The Company borrows funds under the CNB Facility to finance new investments and for other working capital and general corporate needs. The interest rate on the CNB Facility is LIBOR plus 3.0% or a base rate plus 1.25%, in each case, subject to a 3.0% all-in rate floor. The initial maturity date is March 11, 2016, subject to one 12 month extension at the Company's option if certain conditions are met.

Keywords for this news article include: Mortgage, Ares Commercial Real Estate Corporation.

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Source: Real Estate & Investment Business


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