Ares Commercial Real Estate Corporation · NYSE:ACRE
Ares Commercial Real Estate — Q3 2023 Earnings Presentation
19 slides from Ares Commercial Real Estate's earnings presentation, Nov 3, 2023
Slide 1: Third Quarter 2023 Earnings Presentation
Exhibit 99.2 Third Quarter 2023 Earnings Presentation
Slide 2: Disclaimer
Disclaimer Statements included herein may constitute “forward-looking statementsˮ within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended, which may relate to future events or the future performance or financial co
Slide 3: Company Highlights
Company Highlights $2.2 billion 98% outstanding Senior Loans $0.25 principal balance Q3 Distributable Earnings(2) Loan Earnings per diluted common share includes realized loss Portfolio and of $0.09 per diluted common share(3) $115.7 million CECL reserve equates to Dividends approximately 5.3% of lo
Slide 4: Summary of Q3 2023 Results and Activity
Summary of Q3 2023 Results and Activity • GAAP net income of $0.17 per diluted common share(1) • Distributable Earnings of $0.25 per diluted common share(2) includes realized loss of $0.09 per diluted Earnings common share Results • Book value per common share of $12.62 or $14.75 per common share ex
Slide 5: Loan Portfolio Positioning and Performance
Loan Portfolio Positioning and Performance Loans Held for Investment Portfolio Metrics(1) Diverse Loans Held for Investment Portfolio Outstanding principal balance(2) $2.2 billion By Property Type(3) By Geography(3) 10% Number of loans 49 11% 7% 24% 39% Percentage of senior loans (3) 98% 11% 29% 7%
Slide 6: Current Expected Credit Losses
Current Expected Credit Losses • Increase in total CECL reserve of $3.2 million vs. 2Q-2023 ($ in thousands) • As of September 30, 2023, the total CECL reserve includes Balance at 6/30/2023 $ 112,454 specific reserves of $55.5 million on two senior office loans or 48% of the total CECL reserve Provi
Slide 7: Q3 2023 Loan Activity
Q3 2023 Loan Activity New Investments Investment Composition(2) Total new investments(1) $69.3 million Self Storage 16% Percent senior 100% Multifamily 84% Weighted average unleveraged 8.9% effective yield Exits Repayments by Property Type 8% Total exits(3) $48.3 million Industrial Hotel 51% (4) Num
Slide 8: Well-Positioned Balance Sheet
Well-Positioned Balance Sheet Financing Metrics Diversified Sources of Financing(3) Total capacity across all financings(1) $2.3 billion Sources of financing(2) 8 40% 45% Outstanding principal borrowings $1.6 billion Percentage of non-recourse financing(3) 45% 9% 6% Secured Funding Agreements Secure
Slide 9: Full Dividend Coverage from Distributable Earnings
Full Dividend Coverage from Distributable Earnings(1) ACRE has generated cumulative Distributable Earnings in excess of our dividends declared(2)(3) Cumulative Distributable Earnings vs. Cumulative Dividends Per Share $10.00 $9.00 $8.00 $7.00 $6.00 Per Share $5.00 $4.00 $3.00 $2.00 $1.00 $— 2017YE 2
Slide 10: Appendix
Appendix
Slide 11: Additional Details on Sources of Funding
Additional Details on Sources of Funding ($ in millions) Outstanding Financing Sources Total Commitments Principal Pricing Range Mark-to-Market Secured Funding Agreements Wells Fargo Facility $450.0 $208.2 SOFR+1.50 to 3.75% Credit Citibank Facility 325.0 236.6 SOFR+1.50 to 2.10% Credit CNB Facility
Slide 12: Loans Held for Investment Portfolio Details
Loans Held for Investment Portfolio Details ($ in millions) Origination Current Loan Outstanding Carrying Unleveraged Payment # Loan Type Location Date Commitment Principal Value Interest Rate SOFR Floor Effective Yield Maturity Date Terms(1) Office Loans: 1 Senior IL Nov 2020 $157.9 $157.9 $154.0 (
Slide 13: Loans Held for Investment Portfolio Details
Loans Held for Investment Portfolio Details ($ in millions) Origination Current Loan Outstanding Carrying Unleveraged Payment # Loan Type Location Date Commitment Principal Value Interest Rate SOFR Floor Effective Yield Maturity Date Terms(1) Multifamily Loans: 14 Senior NY May 2022 $133.0 $132.2 $1
Slide 14: Loans Held for Investment Portfolio Details
Loans Held for Investment Portfolio Details ($ in millions) Origination Current Loan Outstanding Carrying Unleveraged Payment # Loan Type Location Date Commitment Principal Value Interest Rate SOFR Floor Effective Yield Maturity Date Terms(1) Industrial Loans: 28 Senior IL May 2021 $100.7 $100.7 $10
Slide 15: Loans Held for Investment Portfolio Details
Loans Held for Investment Portfolio Details ($ in millions) Origination Current Loan Outstanding Unleveraged Payment # Loan Type Location Date Commitment Principal Carrying Value Interest Rate SOFR Floor Effective Yield Maturity Date Terms(1) Self Storage Loans: 39 Senior PA Mar 2022 $18.2 $18.2 $18
Slide 16: Consolidated Balance Sheets
Consolidated Balance Sheets As of ($ in thousands, except share and per share data) 9/30/2023 12/31/2022 ASSETS Cash and cash equivalents $ 61,017 $ 141,278 Loans held for investment ($874,719 and $887,662 related to consolidated VIEs, respectively) 2,180,412 2,264,008 Current expected credit loss r
Slide 17: Consolidated Statements of Operations
Consolidated Statements of Operations For the Three Months Ended ($ in thousands, except share and per share data) 9/30/2023 6/30/2023 3/31/2023 12/31/2022 9/30/2022 Revenue: Interest income $ 52,819 $ 51,941 $ 49,500 $ 52,552 $ 45,633 Interest expense (29,745) (26,951) (22,999) (22,144) (18,362) Ne
Slide 18: Reconciliation of Net Income to Non-GAAP Distributable Earnings
Reconciliation of Net Income to Non-GAAP Distributable Earnings For the Three Months Ended ($ in thousands, except per share data) 9/30/2023 6/30/2023 3/31/2023 12/31/2022 9/30/2022 Net income (loss) attributable to common stockholders $ 9,184 $ (2,198) $ (6,439) $ 2,909 $ 644 Stock-based compensati
Slide 19: Glossary
Glossary Distributable Earnings Distributable Earnings 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 portfoli
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