Ares Management Corporation · NYSE:ARES
Ares Management — Ares Commercial Real Estate — Q1 2021 Earnings Presentation
18 slides from Ares Management's earnings presentation, May 2021
Slide 1: First Quarter 2021 Earnings Presentation
First Quarter 2021 Earnings Presentation
Slide 2: Disclaimer
Disclaimer Statements included herein may constitute “forward-looking statements” 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 Defensive Portfolio of Primarily Senior Loans Conservative Balance Sheet and Liquidity Position 53 $36 million 97% of current liquidity(1) plus approx. $40 million senior loans loans across 17 markets of anticipated additional financing proceeds 8 facilities(2) 2.4x $1.9 billion w
Slide 4: Summary of Q1 2021 Results and Activity
Summary of Q1 2021 Results and Activity ∙ GAAP net income of $0.45 per diluted common share(1) Earnings ∙ Distributable Earnings of $0.40 per diluted common share, a 25% increase from Q1 2020(2) Results ∙ Book value per diluted common share increased by $0.09 to $14.23 ∙ Maintained cash dividend of
Slide 5: Loan Portfolio Positioning and Performance
Loan Portfolio Positioning and Performance Portfolio Characteristics Focused and Geographically Diverse Portfolio(1) By Asset Type By Geography Defensive and Diversified Portfolio 53 $1.9 billion 62% Number of Active Outstanding Multifamily, Office Loans Principal Balance(2) and Industrial 2% 5% 3%
Slide 6: Q1 2021 Portfolio Activity
Q1 2021 Portfolio Activity Investment Characteristics Focused Loan Origination Activity(3) 7 $29 million (1) 20% new loans average loan size 51% 100% $223 million senior loans in fundings(2) 29% ($ in millions) Office Mixed-Use Self Storage $223 $131 Notable Loan Portfolio Activity ∙ Portfolio grew
Slide 7: Conservative Balance Sheet and Liquidity Management
Conservative Balance Sheet and Liquidity Management Diversified Sources of Financing(3) Diversified & Conservative Balance Sheet 3% 8 $2.2 billion Sources of 71% Outstanding Total 24% Non-recourse Capacity Across All Financing(1) Financings(2) Secured Funding Agreements Secured Term Loan 4% CLO Secu
Slide 8: History of Growing and Consistent Dividends
History of Growing and Consistent Dividends Dividend History(1) Supplemental dividend of $0.02 introduced in Q1 2021 $0.36 $0.35 $0.34 $0.33 $0.33 $0.33 $0.33 $0.33 $0.33 $0.33 $0.33 $0.32 $0.31 $0.30 $0.29 $0.28 $0.28 $0.28 $0.27 $0.27 $0.27 $0.27 $0.26 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-
Slide 9: Appendix
Appendix
Slide 10: Current Expected Credit Losses
Current Expected Credit Losses ($ in thousands) ∙ No specific loan impairments on loan portfolio ∙ Reduction in CECL reserve of $3.2 million (bifurcated Balance at 12/31/2020 $ 25,236 between funded commitments of $2.7 million and Provision for CECL (3,240) unfunded commitments of $0.5 million) prim
Slide 11: Additional Details on Sources of Funding
Additional Details on Sources of Funding ($ in millions) Financing Sources Total Commitments Outstanding Balance Pricing Range Mark-to-Market Secured Funding Agreements Wells Fargo Facility $ 350.0 $ 227.3 LIBOR+1.50 to 2.75% Credit Citibank Facility 325.0 44.7 LIBOR+1.50 to 2.25% Credit CNB Facilit
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 LIBOR Floor Effective Yield Maturity Date Terms(1) Office Loans: 1 Senior IL Nov 2020 $151.5 $150.5 $149.5
Slide 13: Loans Held for Investment Portfolio Details
Loans Held for Investment Portfolio Details ($ in millions) Origination Current Loan Outstanding Carrying Unleveraged Payment # Loan Type Location Date Commitment Principal Value Interest Rate LIBOR Floor Effective Yield Maturity Date Terms(1) Hotel Loans: 25 Senior OR/WA May 2018 $68.1 $68.1 $67.2
Slide 14: Loans Held for Investment Portfolio Details
Loans Held for Investment Portfolio Details ($ in millions) Origination Current Loan Outstanding Carrying Unleveraged Payment # Loan Type Location Date Commitment Principal Value Interest Rate LIBOR Floor Effective Yield Maturity Date Terms(1) Industrial Loans: 41 Senior NY Jan 2020 $77.5 $59.0 $58.
Slide 15: Consolidated Balance Sheets
Consolidated Balance Sheets As of ($ in thousands, except share and per share data) 3/31/2021 12/31/2020 ASSETS Cash and cash equivalents $ 97,944 $ 74,776 Restricted cash — — Loans held for investment ($1,189,234 and $550,590 related to consolidated VIEs, respectively) 1,908,001 1,815,219 Current e
Slide 16: Consolidated Statements of Operations
Consolidated Statements of Operations For the Three Months Ended ($ in thousands, except share and per share data) 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Revenue: Interest income $ 30,704 $ 29,144 $ 30,626 $ 29,835 $ 31,448 Interest expense (12,139) (11,499) (11,875) (13,042) (15,534) Ne
Slide 17: 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) 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Net income (loss) attributable to common stockholders $ 15,740 $ 14,407 $ 14,928 $ 9,768 $ (17,263) Stock-based compen
Slide 18: Glossary
Glossary Ares Warehouse The Ares Warehouse represents a real estate debt warehouse investment vehicle maintained by an affiliate of ACREM. The Ares Warehouse holds Ares Management originated commercial real estate loans, which are made available to purchase by other investment vehicles, including AC
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