Ares mercial Real Estate (ACRE) - 2024 Q4 - Annual Results

Financial Performance - Fourth quarter GAAP net income (loss) was $(10.7) million or $(0.20) per diluted common share, while full year GAAP net income (loss) was $(35.0) million or $(0.64) per diluted common share[1][2] - Distributable Earnings (Loss) for the fourth quarter was $(8.3) million or $(0.15) per diluted common share, and for the full year it was $(44.6) million or $(0.82) per diluted common share[1][2] - The company reported a net loss attributable to common stockholders of $(10.7) million for the fourth quarter and $(35.0) million for the full year[13] - For the three months ended December 31, 2024, the net income attributable to common stockholders was $(10,664) thousand, and for the year ended December 31, 2024, it was $(34,993) thousand[18] - Distributable Earnings (Loss) for the three months ended December 31, 2024, was $(8,274) thousand, and for the year ended December 31, 2024, it was $(44,641) thousand[18] - Basic Distributable Earnings (Loss) per common share for the three months ended December 31, 2024, was $(0.15), and for the year ended December 31, 2024, it was $(0.82)[18] - The diluted Distributable Earnings (Loss) per common share for the three months ended December 31, 2024, was $(0.15), and for the year ended December 31, 2024, it was $(0.82)[18] Revenue and Assets - Total revenue for the fourth quarter was $17.5 million, with interest income of $33.5 million and net interest margin of $11.2 million[13] - Total assets as of December 31, 2024, were $1.75 billion, down from $2.28 billion in 2023[12] - Total liabilities decreased to $1.21 billion from $1.65 billion in the previous year[12] Credit and Loan Performance - The company reported a 34% year-over-year decline in risk-rated 4 and 5 loans, indicating progress in resolving underperforming loans[2] - The company has a current expected credit loss reserve of $(136.2) million as of December 31, 2024[12] - The provision for current expected credit losses, net, for the three months ended December 31, 2024, was $(970) thousand, and for the year it was $(18,152) thousand[18] - The change in unrealized losses on loans held for sale for the year ended December 31, 2024, was $(995) thousand[18] Capital Management - The company collected $166 million in repayments, increasing available capital to over $200 million, a 66% increase since the end of the third quarter[2] - The quarterly dividend was lowered to $0.15 per share for the first quarter of 2025, down from $0.25 per share declared for the fourth quarter of 2024[4][5] Expenses - Stock-based compensation for the three months ended December 31, 2024, amounted to $1,122 thousand, and for the year, it was $4,739 thousand[18] - Depreciation and amortization of real estate owned for the three months ended December 31, 2024, was $2,238 thousand, and for the year, it was $4,760 thousand[18] Regulatory Compliance - The Company is required to distribute substantially all of its taxable income to maintain its REIT status[17] - Distributable Earnings (Loss) is aligned with the calculation of "Core Earnings," which is used to calculate the incentive fees paid to the Company's Manager[17]