News Column

Ares Commercial Real Estate Corporation Reports Second Quarter 2014 Results

August 23, 2014



By a News Reporter-Staff News Editor at Investment Weekly News -- 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 $6.6 million or $0.23 per basic and diluted common share and $11.4 million or $0.40 per basic and diluted common share, respectively, for the three and six months ended June 30, 2014. In addition, the Company announced that its Board of Directors has declared a third quarter 2014 dividend of $0.25 per common share payable on October 15, 2014 to common stockholders of record on September 30, 2014.

"Our second quarter earnings improved as we continued to invest our capital selectively into attractive new investments and benefited from higher new loan volume and profitability at ACRE Capital," said Todd Schuster, President and Chief Executive Officer of ACRE. "Within principal lending, our approach to the current market environment is to leverage our direct origination footprint and broaden our product offering to ensure we are sourcing loans with attractive risk adjusted returns. We are seeing encouraging signs of a building pipeline in new property sectors and geographies. Within ACRE Capital, we are pleased that we are beginning to see greater activity levels as our unique capabilities resonate with sponsors and owners of multifamily properties."

"We continue to demonstrate access to a variety of efficient sources of capital in order to scale our balance sheet and improve our profitability," said Tae-Sik Yoon, Chief Financial Officer of ACRE. "With the closing of our new securitization transaction together with our new $75 million revolving credit facility with City National Bank (CNB) and existing availabilities of capital, we expect to have approximately $115 million of net capital that may be leveraged to fund new investments and for general corporate purposes. We believe this incremental capacity will improve our financial flexibility and provide the opportunity to enhance returns for ACRE stockholders once this capital is deployed." THREE MONTHS ENDED JUNE 30, 2014 FINANCIAL HIGHLIGHTS Financial Results and Activities: For the three months ended June 30, 2014, net income was $6.6 million or $0.23 per basic and diluted common share.

For the principal lending business, originations for the three months ended June 30, 2014 totaled $137.2 million in commitments and $95.8 million in outstanding principal. Loan repayments totaled $69.0 million in outstanding principal for the three months ended June 30, 2014.

For the mortgage banking business, ACRE Capital LLC, a wholly owned subsidiary of ACRE ("ACRE Capital"), rate-locked eight new senior loans totaling $103.1 million in unpaid principal balance during the three months ended June 30, 2014. Capital and Other Activities: On April 9, 2014, the Company and certain of its subsidiaries entered into a $195.0 million revolving master repurchase facility (the "UBS Facility") with UBS Real Estate Securities Inc. ("UBS"). The Company used the UBS Facility to finance commercial mortgage loans, commercial real estate mezzanine loans, and other assets meeting defined eligibility criteria which are approved by UBS. The initial maturity date of the UBS Facility is April 7, 2017, subject to annual extensions in UBS' sole discretion.

On May 1, 2014, ACRE Capital entered into a Sixth Amended and Restated Mortgage Warehousing Credit and Security Agreement with Bank of America, N.A. and the other lenders thereto, which provides for a committed warehouse line of up to $80.0 million that matures on April 15, 2015.

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

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Source: Investment Weekly News


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