Ares Commercial Real Estate Corporation · NYSE:ACRE
Ares Commercial Real Estate — Q2 2023 Earnings Presentation
19 slides from Ares Commercial Real Estate's earnings presentation, Aug 2, 2023
Slide 1: Second Quarter 2023 Earnings Presentation
Exhibit 99.2 Second 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 $2.3 billion 98% $0.35 outstanding Q2 Distributable Earnings(2) Senior Loans principal balance per diluted common share Loan Earnings Portfolio and $112.5 million CECL reserve equates to ~5% of Dividends loans held for investment(1), with $47.9 million, or 43% of the total reserve
Slide 4: Summary of Q2 2023 Results and Activity
Summary of Q2 2023 Results and Activity • GAAP net loss of $0.04 per diluted common share(1) Earnings • Distributable Earnings of $0.35 per diluted common share(2) Results • Book value per common share of $12.77, or $14.84 per common share excluding the CECL reserve(3) • Closed $49.0 million in new
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) $2.3 billion By Asset Type(3) By Geography(3) 11% Number of loans 53 11% 7% 27% 38% Percentage of senior loans (4) 98% 11% 28% 10% 16
Slide 6: Current Expected Credit Losses
Current Expected Credit Losses • Increase in total CECL reserve of $20.1 million ($ in thousands) • As of June 30, 2023, the total CECL reserve includes specific Balance at 3/31/2023 $ 92,327 reserves of $47.9 million, including $42.1 million on a senior office loan and $5.9 million on a senior hote
Slide 7: Q2 2023 Loan Activity
Q2 2023 Loan Activity New Investments Investment Composition(2) Total new investments(1) $49.0 million Percent senior 100% Industrial 100% Unlevered effective yield 8.2% Sales and Repayments Sales and Repayments by Property Type 1% Total sales and repayments(3) $51.5 million 46% % of portfolio 2% St
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 41% 44% Outstanding principal borrowings $1.7 billion Percentage of non-recourse financing(3) 44% 6% 9% 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 regular and supplemental dividends declared(2)(3) Cumulative Distributable Earnings vs. Cumulative Regular and Supplemental Dividends Per Share $10.00 $9.00 $8.00 $7.00 $6.00 P
Slide 10: Appendix
Appendix
Slide 11: Additional Details on Sources of Funding
Additional Details on Sources of Funding ($ in millions) Outstanding Financing Sources Total Commitments Principal Pricing Range Mark-to-Market Secured Funding Agreements Wells Fargo Facility $450.0 $241.9 SOFR+1.50 to 3.75% Credit Citibank Facility 325.0 236.2 SOFR+1.50 to 2.10% Credit CNB Facility
Slide 12: Loans Held for Investment Portfolio Details
Loans Held for Investment Portfolio Details ($ 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 $156.8 $156.8 $154.0 (
Slide 13: Loans Held for Investment Portfolio Details
Loans Held for Investment Portfolio Details ($ 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 $100.1 $99
Slide 15: Loans Held for Investment Portfolio Details
Loans Held for Investment Portfolio Details ($ 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: 41 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) 6/30/2023 12/31/2022 ASSETS Cash and cash equivalents $ 142,603 $ 141,278 Loans held for investment ($886,343 and $887,662 related to consolidated VIEs, respectively) 2,228,100 2,264,008 Current expected credit loss
Slide 17: Consolidated Statements of Operations
Consolidated Statements of Operations For the Three Months Ended ($ in thousands, except share and per share data) 6/30/2023 3/31/2023 12/31/2022 9/30/2022 6/30/2022 Revenue: Interest income $ 51,941 $ 49,500 $ 52,552 $ 45,633 $ 38,621 Interest expense (26,951) (22,999) (22,144) (18,362) (13,475) 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) 6/30/2023 3/31/2023 12/31/2022 9/30/2022 6/30/2022 Net income (loss) attributable to common stockholders $ (2,198) $ (6,439) $ 2,909 $ 644 $ 10,031 Stock-based compensat
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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