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Ares mercial Real Estate (ACRE) - 2024 Q2 - Quarterly Results
ACREAres mercial Real Estate (ACRE)2024-08-06 01:47

Financial Performance - Second quarter 2024 GAAP net loss of 6.1million,or6.1 million, or (0.11) per diluted common share, with Distributable Earnings loss of 6.6million,or6.6 million, or (0.12) per diluted common share[1] - Total revenue for the second quarter 2024 was 16.8million,adecreasefrom16.8 million, a decrease from 24.9 million in the same quarter of 2023[14] - Net interest margin for the second quarter 2024 was 13.4million,downfrom13.4 million, down from 24.9 million year-over-year[14] - The company reported realized losses on loans of 16.4millionforthesecondquarter2024,comparedtonorealizedlossesinthesamequarterof2023[14]−NetincomeattributabletocommonstockholdersforthethreemonthsendedJune30,2024,was16.4 million for the second quarter 2024, compared to no realized losses in the same quarter of 2023[14] - Net income attributable to common stockholders for the three months ended June 30, 2024, was (6,125) thousand, compared to (48,678)thousandforthetwelvemonthsendedJune30,2024[18]−DistributableEarnings(Loss)forthethreemonthsendedJune30,2024,was(48,678) thousand for the twelve months ended June 30, 2024[18] - Distributable Earnings (Loss) for the three months ended June 30, 2024, was (6,577) thousand, while for the twelve months it was (15,806)thousand[18]CreditLosses−Provisionforcurrentexpectedcreditlosseswas(15,806) thousand[18] Credit Losses - Provision for current expected credit losses was (2.4) million, compared to a provision of 20.1millioninthesecondquarterof2023[14]−Provisionforcurrentexpectedcreditlosseswas20.1 million in the second quarter of 2023[14] - Provision for current expected credit losses was (2,374) thousand for the three months ended June 30, 2024, and 26,036thousandforthetwelvemonthsendedJune30,2024[18]−LoanbalancesdeemeduncollectiblearewrittenoffasarealizedlossandincludedinDistributableEarnings(Loss)[17]AssetManagement−TotalassetsasofJune30,2024,were26,036 thousand for the twelve months ended June 30, 2024[18] - Loan balances deemed uncollectible are written off as a realized loss and included in Distributable Earnings (Loss)[17] Asset Management - Total assets as of June 30, 2024, were 2.07 billion, down from 2.28billionattheendof2023[12]−Loansheldforinvestment,netofcurrentexpectedcreditlossreserve,decreasedto2.28 billion at the end of 2023[12] - Loans held for investment, net of current expected credit loss reserve, decreased to 1.84 billion from 1.97billionattheendof2023[12]LeadershipChanges−AppointmentsofTae−SikYoonasChiefOperatingOfficerandJeffGonzalesasChiefFinancialOfficereffectiveAugust30,2024,aimedatenhancingstrategicexecution[1]Dividends−Declaredathirdquarter2024dividendof1.97 billion at the end of 2023[12] Leadership Changes - Appointments of Tae-Sik Yoon as Chief Operating Officer and Jeff Gonzales as Chief Financial Officer effective August 30, 2024, aimed at enhancing strategic execution[1] Dividends - Declared a third quarter 2024 dividend of 0.25 per common share, consistent with the second quarter 2024 dividend[3] Non-GAAP Measures - Distributable Earnings (Loss) is a non-GAAP financial measure that excludes certain transactions and GAAP adjustments[17] - The company believes that Distributable Earnings (Loss) provides useful information regarding its ability to pay dividends[17] - The company aims to maintain its REIT status by distributing substantially all of its taxable income to stockholders annually[17] Depreciation and Amortization - Depreciation and amortization of real estate owned amounted to 770thousandforthethreemonthsendedJune30,2024,and770 thousand for the three months ended June 30, 2024, and 2,571 thousand for the twelve months ended June 30, 2024[18] Derivative Gains - The company reported a realized gain on termination of interest rate cap derivative of $(198) thousand for the twelve months ended June 30, 2024[18] Future Strategy - The company aims to resolve risk-rated 4 and 5 loans to position for future portfolio growth and earnings[1]