Ares Commercial Real Estate Corporation · NYSE:ACRE
Ares Commercial Real Estate — Q2 2020 Earnings Presentation
16 slides from Ares Commercial Real Estate's earnings presentation, Aug 6, 2020
Slide 1: Second Quarter 2020 Earnings Presentation
Exhibit 99.2 Second 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 Diversified Portfolio Supported Earnings Enhanced Liquidity Active Balance Sheet Positioning Power Position Management 96% of loans are floating Borrowings diversified 95% senior loans; no liquid rate with LIBOR floors Unrestricted cash of $80 (2) across 8 different or marketable
Slide 4: Second Quarter 2020 Results
Second Quarter 2020 Results (7) Financial • GAAP net income of $9.8 million or $0.29 per diluted common share • Core Earnings of $10.7 million or $0.32 per diluted common share(8) Results • Book value per diluted common share of $13.91 or $14.75, excluding CECL reserve • Refinanced two existing seni
Slide 5: Total Loans Held for Investment Portfolio Key Statistics
Total Loans Held for Investment Portfolio Key Statistics Loan Portfolio Characteristics(13) ($ in millions) Total loan commitments $2,058.8 Outstanding principal balance $1,806.3 Mid-Atlantic/Northeast 10% Weighted average unpaid principal balance of loan portfolio(11) $1,889.9 Total number of loans
Slide 6: Interest Rate Sensitivity
Interest Rate Sensitivity(13) • 98% of the loan portfolio is floating rate and 2% is fixed rate • 96% of the loan portfolio is either floating rate with a LIBOR floor (94%) or fixed rate (2%) ◦ For the floating rate loans with LIBOR floors, the weighted average LIBOR floor is 1.77% • 96% of the loan
Slide 7: Financing Sources Overview
Financing Sources Overview Financing Sources Composition(13) Financing Sources Detail ($ in millions) Secured Funding Total (18) Outstanding Financing Sources Commitments Interest Rate Balance Term Loan Agreements 59% Notes Payable Secured Funding 4% Agreements Wells Fargo Facility $ 500.0 LIBOR+1.4
Slide 8: 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) Self Storage 1% Office 23% Balance at 3/31/20 $ 32,168 Provision for CECL (4,007) Industrial 3% Write-offs — Student Recoveries — Housin
Slide 9: Appendix
Appendix O ARES
Slide 10: Loans Held for Investment Portfolio Details
Loans Held for Investment Portfolio Details ($ in millions) Origination Current Loan Outstanding LIBOR Unleveraged (12) Payment # Loan Type Location Date Commitment Principal Carrying Value Interest Rate Floor Effective Yield Maturity Date Terms (19) Office Loans: 1 Senior Diversified Jan 2020 $132.
Slide 11: Loans Held for Investment Portfolio Details
Loans Held for Investment Portfolio Details ($ in millions) Origination Current Loan Outstanding LIBOR Unleveraged Payment # Loan Type Location Date Commitment Principal Carrying Value Interest Rate Floor Effective Yield(12) Maturity Date Terms(19) Hotel Loans: 26 Senior OR/WA May 2018 $68.1 $68.1 $
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(12) Maturity Date Terms(19) Industrial Loans: 42 Senior FL Oct 2019 $52.5 $52.5
Slide 13: Consolidated Balance Sheets
Consolidated Balance Sheets As of June 30, 2020 December 31, 2019 (unaudited) ASSETS Cash and cash equivalents $ 72,987 $ 5,256 Restricted cash — 379 Loans held for investment ($525,817 and $515,896 related to consolidated VIEs, respectively) 1,794,049 1,682,498 Current expected credit loss reserve
Slide 14: Consolidated Statements of Operations
Consolidated Statements of Operations For the Three Months Ended ($ in thousands, except share and per share data) 6/30/2020 3/31/2020 12/31/2019 9/30/2019 6/30/2019 Revenue: Interest income from loans held for investment $ 29,835 $ 31,448 $ 28,536 $ 28,269 $ 29,993 Interest expense (13,042) (15,534
Slide 15: Reconciliation of Net Income to Non-GAAP Core Earnings
Reconciliation of Net Income to Non-GAAP Core Earnings(8) For the Three Months Ended ($ in thousands, except per share data) 6/30/2020 3/31/2020 12/31/2019 9/30/2019 6/30/2019 Net income (loss) attributable to common stockholders $ 9,768 $ (17,263) $ 9,660 $ 9,034 $ 9,755 Stock-based compensation 36
Slide 16: Footnotes
Footnotes 1. Based on June 30, 2020 ending spot one month LIBOR rate of 0.16%. 2. As of August 5, 2020. 3. Excludes the U.S. Bank facility, which subsequent to quarter end was repaid in full and its term was not extended. 4. Excluding the CECL reserve. 5. Includes loans on non-accrual. 2% of loans h
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