Ares Commercial Real Estate Corporation · NYSE:ACRE
Ares Commercial Real Estate — Q1 2020 Earnings Presentation
17 slides from Ares Commercial Real Estate's earnings presentation, May 8, 2020
Slide 1: First Quarter 2020 Earnings Presentation
Exhibit 99.2 First Quarter 2020 Earnings Presentation
Slide 2: Important Notice
Important Notice 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 financ
Slide 3: Business Highlights
Business Highlights Attractive Portfolio Positioning Well Capitalized Balance Sheet Strong Credit Quality 95% senior loans Unrestricted cash as of No loan impairments May 7, 2020 of approximately since inception No liquid securities $50 million 100% debt service payments Multifamily, office and indu
Slide 4: First Quarter 2020 Results
First Quarter 2020 Results • GAAP loss of $17.3 million or $0.54 per diluted common share, inclusive of $27.1 million or $0.85 per Financial diluted common share CECL impact • Core Earnings(1) of $10.3 million or $0.32 per diluted common share Results • Book value per diluted common share of $13.95
Slide 5: Total Loans Held for Investment Portfolio Key Statistics
Total Loans Held for Investment Portfolio Key Statistics Loan Portfolio Characteristics(4) ($ in millions) Total loan commitments $2,158.1 Mid-Atlantic/Northeast Outstanding principal balance $1,883.1 9% Weighted average unpaid principal balance of loan portfolio* $1,854.1 Total number of loans 53 S
Slide 6: First Quarter 2020 Investment Activity
First Quarter 2020 Investment Activity First Quarter 2020 Characteristics of Funded Loans(5) Loans Summary Office ($ in millions) 47% Number of loans closed 7 New loan commitments $355.8 Average size of loans closed $50.8 Mixed-use Percentage of floating rate loans 100% 7% Percentage of senior loans
Slide 7: Interest Rate Sensitivity
Interest Rate Sensitivity(4) • 98% of the loan portfolio is floating rate and 2% is fixed rate • 96% of the loan portfolio is either floating rate with a LIBOR floor (94%) or fixed rate (2%) ◦ For the floating rate loans with LIBOR floors, the weighted average LIBOR floor is 1.77% • 88% of the loan
Slide 8: Financing Sources Overview
Financing Sources Overview Financing Sources Composition(4) Financing Sources Detail Bank Facilities/Insurance 61% ($ in millions) Term Loan Total (3) Outstanding Financing Sources Commitments Interest Rate Balance Notes Payable Bank Facilities and Secured 2017-FL3 Securitization Wells Fargo Facilit
Slide 9: Current Expected Credit Losses - Additional Information
Current Expected Credit Losses - Additional Information Current Expected Credit Loss Reserve Current Expected Credit Loss Reserve by Property Type ($ in thousands) Office 24% Self Storage 1% Balance at 12/31/19 $ — Initial reserve upon adoption 5,051 Provision for current expected credit losses 27,1
Slide 10: Appendix
Appendix O ARES
Slide 11: Loans Held for Investment Portfolio Details
Loans Held for Investment Portfolio Details ($ in millions) Origination Current Loan Outstanding LIBOR Unleveraged Payment # Loan Type Location Date Commitment Principal Carrying Value Interest Rate Floor Effective Yield(2) Maturity Date Terms (8) Multifamily Loans: 1 Senior FL Sep 2016 $89.7 $89.7
Slide 12: Loans Held for Investment Portfolio Details
Loans Held for Investment Portfolio Details ($ in millions) Origination Current Loan Outstanding LIBOR Unleveraged Payment # Loan Type Location Date Commitment Principal Carrying Value Interest Rate Floor Effective Yield(2) Maturity Date Terms(8) Hotel Loans: 28 Senior OR/WA May 2018 $68.1 $68.1 $67
Slide 13: Loans Held for Investment Portfolio Details
Loans Held for Investment Portfolio Details ($ in millions) Origination Current Loan Outstanding LIBOR Unleveraged Payment # Loan Type Location Date Commitment Principal Carrying Value Interest Rate Floor Effective Yield(2) Maturity Date Terms(8) Industrial Loans: 45 Senior FL Oct 2019 $52.5 $52.5 $
Slide 14: Consolidated Balance Sheets
Consolidated Balance Sheets As of March 31, 2020 December 31, 2019 ($ in thousands, except share and per share data) (unaudited) ASSETS Cash and cash equivalents $ 74,498 $ 5,256 Restricted cash 379 379 Loans held for investment ($425,817 and $515,896 related to consolidated VIEs, respectively) 1,87
Slide 15: Consolidated Statements of Operations
Consolidated Statements of Operations For the Three Months Ended ($ in thousands, except share and per share data) 3/31/2020 12/31/2019 9/30/2019 6/30/2019 3/31/2019 Revenue: Interest income from loans held for investment $ 31,448 $ 28,536 $ 28,269 $ 29,993 $ 27,986 Interest expense (15,534) (15,044
Slide 16: Reconciliation of Net Income (Loss) to Non-GAAP Core Earnings
Reconciliation of Net Income (Loss) to Non-GAAP Core Earnings(1) For the Three Months Ended ($ in thousands, except per share data) 3/31/2020 12/31/2019 9/30/2019 6/30/2019 3/31/2019 Net income (loss) attributable to common stockholders $ (17,263) $ 9,660 $ 9,034 $ 9,755 $ 8,543 Stock-based compensa
Slide 17: Footnotes
Footnotes 1. 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 no
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