Ares Commercial Real Estate Corporation · NYSE:ACRE
Ares Commercial Real Estate — Q2 2021 Earnings Presentation
18 slides from Ares Commercial Real Estate's earnings presentation, Jul 30, 2021
Slide 1: Second Quarter 2021 Earnings Presentation
Second 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 Increased and Diverse Deployment Activity 98% 53 $311 million senior loans loans across 17 markets of new commitments in Q2 80% $254 million $2.0 billion of new commitments increase in commitments outstanding principal balance vs. pre-
Slide 4: Summary of Q2 2021 Results and Activity
Summary of Q2 2021 Results and Activity ∙ GAAP net income of $0.43 per diluted common share(1) Earnings ∙ Distributable Earnings of $0.37 per diluted common share, a 16% increase from Q2 2020(2) Results ∙ Book value per diluted common share of $14.45, a 4% increase from Q2 2020 ∙ Maintained cash div
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 $2.0 billion 60% Number of Active Outstanding Multifamily, Office Loans Principal Balance(2) and Industrial 4% 6% 9%
Slide 6: Portfolio Activity
Portfolio Activity New Investment Commitments Quarterly Investment Activity ($ in millions) se $52 million re a $311 million average loan size on % inc Q2-21 commitments (1) 66 Q2-21 commitments $311 $187 100% $254 million senior loans for closed Q3-21 Quarterly Average Q2-21 2016 to 2020 Q2-21 comm
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 $2.3 billion Sources of 69% Outstanding Total 27% Non-recourse Capacity Across All Financing(1) Financings(2) Secured Funding Agreements Secured Term Loan CLO Securit
Slide 8: History of Growing and Consistent Dividends
History of Growing and Consistent Dividends Dividend History(1) Supplemental dividend of $0.02 introduced in 2021 $0.36 $0.35 $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 $0.26 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18
Slide 9: Appendix
Appendix
Slide 10: Current Expected Credit Losses
Current Expected Credit Losses ($ in thousands) ∙ No specific loan impairments on loan portfolio ∙ Reduction in CECL reserve of $3.9 million (bifurcated Balance at 3/31/2021 $ 21,996 between funded commitments benefit of $4.0 million Provision for CECL (3,883) and unfunded commitments provision of $
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 $ 238.4 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 $149.7
Slide 13: Loans Held for Investment Portfolio Details
Loans Held for Investment Portfolio Details ($ 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: 23 Senior OR/WA May 2018 $68.1 $68.1 $67.1
Slide 14: Loans Held for Investment Portfolio Details
Loans Held for Investment Portfolio Details ($ in millions) Origination Current Loan Outstanding Carrying Unleveraged Payment # Loan Type Location Date Commitment Principal Value Interest Rate LIBOR Floor Effective Yield Maturity Date Terms(1) Industrial Loans: 38 Senior NY Jan 2020 $77.5 $64.3 $64.
Slide 15: Consolidated Balance Sheets
Consolidated Balance Sheets As of ($ in thousands, except share and per share data) 6/30/2021 12/31/2020 ASSETS Cash and cash equivalents $ 75,671 $ 74,776 Loans held for investment ($1,118,269 and $550,590 related to consolidated VIEs, respectively) 2,032,408 1,815,219 Current expected credit loss
Slide 16: Consolidated Statements of Operations
Consolidated Statements of Operations For the Three Months Ended ($ in thousands, except share and per share data) 6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020 Revenue: Interest income $ 30,859 $ 30,704 $ 29,144 $ 30,626 $ 29,835 Interest expense (11,092) (12,139) (11,499) (11,875) (13,042) 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) 6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020 Net income attributable to common stockholders $ 17,615 $ 15,740 $ 14,407 $ 14,928 $ 9,768 Stock-based compensation 49
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
Ares Commercial Real Estate — Q2 2021 Earnings Presentation on 6ix