Maryland | 001-35517 | 45-3148087 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
245 Park Avenue, 42nd Floor, New York, NY | 10167 | |
(Address of Principal Executive Offices) | (Zip Code) |
Emerging growth company o |
Exhibit Number | Description | |
Press Release, dated October 30, 2018 |
ARES COMMERCIAL REAL ESTATE CORPORATION | |||
Date: | October 30, 2018 | By: | /s/ Tae-Sik Yoon |
Name: | Tae-Sik Yoon | ||
Title: | Chief Financial Officer and Treasurer |
• | For the three months ended September 30, 2018, GAAP net income was $10.0 million or $0.35 per diluted common share and Core Earnings were $10.3 million or $0.36 per diluted common share. |
• | For the three months ended September 30, 2018, new originations were $117.5 million in commitments and $101.5 million in outstanding principal funded at the origination date and an additional $8.4 million of fundings on existing commitments. |
• | For the three months ended September 30, 2018, the Company exited $198.3 million of loans held for investment as measured by outstanding principal. |
As of September 30, 2018 | |||||||||||||||
Carrying Amount (1) | Outstanding Principal (1) | Weighted Average Minimum Loan Borrowing Spread (2) | Weighted Average Unleveraged Effective Yield (3) | Weighted Average Remaining Life (Years) | |||||||||||
Senior mortgage loans | $ | 1,636.9 | $ | 1,645.4 | 5.1 | % | 6.8 | % | 1.6 | ||||||
Subordinated debt and preferred equity investments | 22.0 | 22.9 | 12.0 | % | 13.4 | % | 5.8 | ||||||||
Total loans held for investment portfolio | $ | 1,658.9 | $ | 1,668.3 | 5.2 | % | 6.9 | % | 1.7 |
(1) | The difference between the Carrying Amount and the Outstanding Principal amount of the loans held for investment consists of unamortized purchase discount, deferred loan fees and loan origination costs. |
(2) | Minimum Loan Borrowing Spread is equal to (a) for floating rate loans, the margin above the applicable index rate (e.g., LIBOR) plus floors, if any, on such applicable index rates, and (b) for fixed rate loans, the applicable interest rate. |
(3) | Unleveraged Effective Yield is the compounded effective rate of return that would be earned over the life of the investment based on the contractual interest rate (adjusted for any deferred loan fees, costs, premiums or discounts) and assumes no dispositions, early prepayments or defaults. The Total Weighted Average Unleveraged Effective Yield is calculated based on the average of Unleveraged Effective Yield of all loans held by the Company as of September 30, 2018 as weighted by the Outstanding Principal balance of each loan. |
PROPERTY TYPE | ||||||
Outstanding Principal | % of Portfolio | |||||
Multifamily | $ | 485.9 | 29 | % | ||
Office | 379.1 | 23 | % | |||
Hotel | 295.4 | 17 | % | |||
Self Storage | 187.3 | 11 | % | |||
Student Housing | 169.2 | 10 | % | |||
Industrial | 78.8 | 5 | % | |||
Mixed-use | 49.0 | 3 | % | |||
Residential | 11.8 | 1 | % | |||
Retail | 11.8 | 1 | % | |||
Total | $ | 1,668.3 | 100 | % |
GEOGRAPHIC MIX | ||||||
Outstanding Principal | % of Portfolio | |||||
Midwest | $ | 404.9 | 24 | % | ||
West | 403.7 | 24 | % | |||
Southwest | 346.6 | 21 | % | |||
Southeast | 301.2 | 18 | % | |||
Mid-Atlantic/Northeast | 211.9 | 13 | % | |||
Total | $ | 1,668.3 | 100 | % |
As of | |||||||
September 30, 2018 | December 31, 2017 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 5,034 | $ | 28,343 | |||
Restricted cash | 379 | 379 | |||||
Loans held for investment ($286,265 and $341,158 related to consolidated VIEs, respectively) | 1,658,862 | 1,726,283 | |||||
Other assets ($750 and $945 of interest receivable related to consolidated VIEs, respectively; $54,893 of other receivables related to consolidated VIEs as of September 30, 2018) | 67,237 | 15,214 | |||||
Total assets | $ | 1,731,512 | $ | 1,770,219 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
LIABILITIES | |||||||
Secured funding agreements | $ | 912,410 | $ | 957,960 | |||
Secured term loan | 108,151 | 107,595 | |||||
Collateralized loan obligation securitization debt (consolidated VIE) | 271,335 | 271,211 | |||||
Due to affiliate | 2,512 | 2,628 | |||||
Dividends payable | 8,323 | 7,722 | |||||
Other liabilities ($480 and $414 of interest payable related to consolidated VIEs, respectively) | 4,623 | 3,933 | |||||
Total liabilities | 1,307,354 | 1,351,049 | |||||
STOCKHOLDERS' EQUITY | |||||||
Common stock, par value $0.01 per share, 450,000,000 shares authorized at September 30, 2018 and December 31, 2017, and 28,698,600 and 28,598,916 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively | 283 | 283 | |||||
Additional paid-in capital | 421,415 | 420,637 | |||||
Accumulated earnings (deficit) | 2,460 | (1,750 | ) | ||||
Total stockholders' equity | 424,158 | 419,170 | |||||
Total liabilities and stockholders' equity | $ | 1,731,512 | $ | 1,770,219 |
For the three months ended September 30, | For the nine months ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||
Net interest margin: | |||||||||||||||
Interest income from loans held for investment | $ | 30,362 | $ | 28,551 | $ | 87,401 | $ | 72,321 | |||||||
Interest expense | (16,378 | ) | (13,825 | ) | (46,645 | ) | (36,845 | ) | |||||||
Net interest margin | 13,984 | 14,726 | 40,756 | 35,476 | |||||||||||
Expenses: | |||||||||||||||
Management and incentive fees to affiliate | 1,571 | 1,554 | 5,302 | 5,020 | |||||||||||
Professional fees | 498 | 350 | 1,435 | 1,169 | |||||||||||
General and administrative expenses | 852 | 724 | 2,415 | 2,006 | |||||||||||
General and administrative expenses reimbursed to affiliate | 870 | 986 | 2,624 | 2,883 | |||||||||||
Total expenses | 3,791 | 3,614 | 11,776 | 11,078 | |||||||||||
Income before income taxes | 10,193 | 11,112 | 28,980 | 24,398 | |||||||||||
Income tax expense, including excise tax | 236 | 54 | 403 | 149 | |||||||||||
Net income attributable to ACRE | 9,957 | 11,058 | 28,577 | 24,249 | |||||||||||
Less: Net income attributable to non-controlling interests | — | — | — | (25 | ) | ||||||||||
Net income attributable to common stockholders | $ | 9,957 | $ | 11,058 | $ | 28,577 | $ | 24,224 | |||||||
Earnings per common share: | |||||||||||||||
Basic and diluted earnings per common share | $ | 0.35 | $ | 0.39 | $ | 1.00 | $ | 0.85 | |||||||
Weighted average number of common shares outstanding: | |||||||||||||||
Basic weighted average shares of common stock outstanding | 28,542,828 | 28,481,298 | 28,521,317 | 28,475,369 | |||||||||||
Diluted weighted average shares of common stock outstanding | 28,698,600 | 28,582,690 | 28,638,973 | 28,537,723 | |||||||||||
Dividends declared per share of common stock | $ | 0.29 | $ | 0.27 | $ | 0.85 | $ | 0.81 |
For the three months ended | For the twelve months ended | ||||||
September 30, 2018 | |||||||
Amount | Amount | ||||||
Net income attributable to common stockholders | $ | 9,957 | $ | 34,761 | |||
Stock-based compensation | 329 | 988 | |||||
Incentive fees to affiliate | — | 610 | |||||
Early extinguishment of debt costs(1) | — | 768 | |||||
Core Earnings | $ | 10,286 | $ | 37,127 |
(1) | Represents a one-time, non-cash charge in connection with the Company’s $45.0 million repayment of outstanding principal on the Secured Term Loan in December 2017. |
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