Ares Commercial Real Estate Corporation Announces Second Quarter 2012 Financial Results
Aug 14, 2012 8:00 AM
SECOND QUARTER 2012 HIGHLIGHTS
-
Completed initial public offering of 7.7 million shares of newly
issued common stock at a price of
$18.50 per share, raising gross proceeds of approximately$142.5 million . The Company incurred approximately$3.4 million in offering expenses relating to the initial public offering, resulting in net proceeds to the Company of$139.1 million . The Company’s Manager,Ares Commercial Real Estate Management, LLC (“ACREM”), paid directly approximately$5.3 million in underwriting commissions. -
Fully redeemed
$6.3 million in issued and outstanding shares of Series A Convertible Preferred Stock including redemption premium using the proceeds of the initial public offering. -
Increased maximum borrowing availability under the Company’s existing
funding facilities by approximately
$133.7 million and entered into a new funding facility withCapital One Bank , raising the aggregate maximum borrowing availability to$308.7 million . The Company also fully paid down$47.3 million in outstanding balances on the Company’s funding facilities using the proceeds of the initial public offering, resulting in a zero balance at June 30, 2012. -
Declared a second quarter dividend of
$0.06 per share of common stock, which was paid on July 12, 2012. -
Subsequent to June 30, 2012, the Company closed a
$14.3 million mezzanine loan collateralized by interests in an existing office building located in theBuckhead /Lenox sub-market ofAtlanta, GA (closed on August 2, 2012). The mezzanine loan has an initial effective yield of 10.7%.
SUMMARY OF SECOND QUARTER 2012 OPERATING RESULTS
Net (loss) attributable to common shareholders was
SUMMARY OF INVESTMENTS AT
At June 30, 2012, the Company had originated four loans totaling
approximately
Portfolio at June 30, 2012:
Investment | Location |
Origination Date |
Maturity Date |
Loan Commitment |
Principal Outstanding |
Coupon |
Effective Yield |
Remaining |
||||||||||||
($000’s) | ($000’s) | |||||||||||||||||||
Senior Loan |
|
Dec-2011 | Jan-2015 | $ | 11,000 | $ | 6,123 | 6.5 | % | 8.0 | % | 2.5 | ||||||||
B Note | Ft Lauderdale, FL | Jan-2012 | Feb-2015 | 15,000 | 8,000 | 11.5 | % | 13.1 | % | 2.6 | ||||||||||
Senior Loan |
|
Feb-2012 | Mar-2015 | 34,926 | 34,926 | 6.3 | % | 6.9 | % | 2.7 | ||||||||||
Senior Loan |
|
Feb-2012 | Mar-2015 | 37,950 | 29,976 | 6.8 | % | 7.7 | % | 2.7 | ||||||||||
Totals / Averages | $ | 98,876 | $ | 79,025 | 7.0 | % | 8.0 | % | 2.6 |
At June 30, 2012, the Company’s loan portfolio had no loans that were 30 days or more delinquent. At June 30, 2012, the Company had no allowances for loan losses.
ACTIVITIES SUBSEQUENT TO
Subsequent to quarter end, the Company originated a
New Loan Closed Subsequent to June 30, 2012:
Investment | Location |
Origination Date |
Maturity Date |
Loan Commitment |
Principal Outstanding |
Coupon |
Effective Yield |
Remaining Life (years) |
||||||||||||
($000’s) | ($000’s) | |||||||||||||||||||
Mezzanine |
|
Aug-2012 | Aug-2017 | $ | 14,300 | $ | 14,300 | 10.5 | % | 10.7 | % | 5.0 |
Also subsequent to June 30, 2012, the Company appointed
DIVIDENDS
On June 18, 2012, the Company declared a dividend of
NON-GAAP FINANCIAL MEASURES
Core Earnings is used to compute incentive fees to ACREM and the Company
believes it is an appropriate supplemental disclosure for a mortgage
REIT. For these purposes, Core Earnings is defined as GAAP net income
(loss) excluding non-cash equity compensation expense, the incentive
fee, depreciation and amortization (to the extent that the Company
forecloses on any properties underlying our target assets), any
unrealized gains, losses or other non-cash items recorded in net income
for the period, regardless of whether such items are included in other
comprehensive income or loss, or in net income. The amount will be
adjusted to exclude one-time events pursuant to changes in GAAP and
certain other non-cash charges as determined by ACREM and approved by a
majority of the independent directors of the Company. Core Earnings, a
non-GAAP measure, for the three and six months ended June 30, 2012 was a
(loss) of
Three Months Ended |
Six Months Ended |
||||||||||||
Amount |
Per share |
Amount ($000’s) |
Per Share | ||||||||||
Net (Loss) attributable to common shareholders | $ | (225) | $ | (0.03) | $ | (341) | $ | (0.09) | |||||
Add back for noncash stock based compensation | 67 | 0.01 | 67 | 0.02 | |||||||||
Core Earnings (Loss) | $ | (158) | $ | (0.02) | $ | (274) | $ | (0.07) |
CONFERENCE CALL AND WEBCAST INFORMATION
The Company will host a webcast and conference call on Tuesday,
August 14, 2012,
The live webcast can be found on a webcast link located on the Home page of the Investor Resources section of our website at http://www.arescre.com. Please visit the website to test your connection before the webcast. Domestic callers can access the conference call by dialing (877) 883-0383. International callers can access the conference call by dialing +1 (412) 902-6506. All callers will need to enter the Participant Elite Entry Number 7137589 followed by the # sign and reference “Ares Commercial Real Estate Corporation” once connected with the operator. All callers are asked to dial in 10-15 minutes prior to the call so that name and company information can be collected.
For interested parties, an archived replay of the call will be available approximately one hour after the end of the conference through August 29, 2012 to domestic callers by dialing (877) 344-7529 and to international callers by dialing +1 (412) 317-0088. For all replays, please reference conference number 10016206. An archived replay will also be available on a webcast link located on the Home page of the Investor Resources section of our website.
ABOUT
FORWARD LOOKING STATEMENTS
Statements included herein or on the webcast / conference call may
constitute “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995, which relate to future
events or our future performance or financial condition. These
statements are not guarantees of future performance, condition or
results and involve a number of risks and uncertainties. Actual results
may differ materially from those in the forward-looking statements as a
result of a number of factors, including those described from time to
time in our filings with the
ARES COMMERCIAL REAL ESTATE CORPORATION AND SUBSIDIARIES |
||||||||
As of | ||||||||
|
|
|||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 87,455 | $ | 1,240 | ||||
Restricted cash | 2,087 | — | ||||||
Loans held for investment | 78,173 | 4,945 | ||||||
Accrued interest receivable | 580 | 3 | ||||||
Deferred financing costs, net | 2,212 | 1,194 | ||||||
Other assets | 752 | 205 | ||||||
Total assets | $ | 171,259 | $ | 7,587 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
LIABILITIES | ||||||||
Due to affiliates | $ | 890 | 827 | |||||
Dividends payable | 555 | — | ||||||
Refundable deposits | — | 200 | ||||||
Escrow liability | 1,334 | — | ||||||
Accrued expenses and other liabilities | 822 | 123 | ||||||
Total liabilities | 3,601 | 1,150 | ||||||
Commitments and contingencies | ||||||||
STOCKHOLDERS’ EQUITY | ||||||||
Preferred stock, par value |
— | — | ||||||
Common stock, par value |
92 | — | ||||||
Additional paid in capital – common stock | 169,075 | 6,600 | ||||||
Accumulated deficit | (1,509 | ) | (163 | ) | ||||
Total stockholders’ equity | 167,658 | 6,437 | ||||||
Total liabilities and stockholders’ equity | $ | 171,259 | $ | 7,587 |
ARES COMMERCIAL REAL ESTATE CORPORATION AND SUBSIDIARIES |
|||||||
For the three months ended |
For the six months ended |
||||||
(unaudited) | (unaudited) | ||||||
Net interest margin: | |||||||
Interest income | $ | 1,559 | $ | 2,508 | |||
Interest expense | (353 | ) | (692 | ) | |||
Net interest margin | 1,206 | 1,816 | |||||
Expenses: | |||||||
Management fees | 419 | 419 | |||||
Professional fees | 331 | 414 | |||||
General and administrative expenses | 323 | 331 | |||||
General and administrative expenses reimbursed to affiliate | 308 | 319 | |||||
Total expenses | 1,381 | 1,483 | |||||
Net income (loss) | (175 | ) | 333 | ||||
Less income attributable to Series A convertible preferred stock: | |||||||
Quarterly preferred dividends | (50 | ) | (102 | ) | |||
Accretion of redemption premium | — | (572 | ) | ||||
Net loss attributable to common stockholders | (225 | ) | (341 | ) | |||
Basic and diluted earnings per common share | $ | (0.03 | ) | $ | (0.09 | ) | |
Weighted average shares of common stock outstanding – basic and diluted | 6,576,923 | 3,787,747 | |||||
Dividends declared per common share | $ | 0.06 | $ | 0.11 |
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