Ares mercial Real Estate (ACRE) - 2024 Q2 - Quarterly Results

Financial Performance - Second quarter 2024 GAAP net loss of $6.1 million, or $(0.11) per diluted common share, with Distributable Earnings loss of $6.6 million, or $(0.12) per diluted common share[1] - Total revenue for the second quarter 2024 was $16.8 million, a decrease from $24.9 million in the same quarter of 2023[14] - Net interest margin for the second quarter 2024 was $13.4 million, down from $24.9 million year-over-year[14] - The company reported realized losses on loans of $16.4 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) 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] Credit Losses - Provision for current expected credit losses was $(2.4) million, compared to a provision of $20.1 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 $26,036 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 $2.28 billion at the end of 2023[12] - Loans held for investment, net of current expected credit loss reserve, decreased to $1.84 billion from $1.97 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 $770 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]