Ares mercial Real Estate (ACRE) - 2025 Q4 - Annual Results

Financial Performance - Fourth quarter GAAP net income was $(3.9) million or $(0.07) per diluted common share, while Distributable Earnings were $8.5 million or $0.15 per diluted common share[1] - Full year GAAP net income was $(0.9) million or $(0.02) per diluted common share, with Distributable Earnings (Loss) of $(6.7) million or $(0.12) per diluted common share[1] - Distributable Earnings (Loss) for the three months ended December 31, 2025, was $8,468,000, while for the year ended December 31, 2025, it was $(6,728,000)[21] - Net income (loss) attributable to common stockholders for the three months ended December 31, 2025, was $(3,865,000), and for the year it was $(902,000)[21] - Basic Distributable Earnings (Loss) per common share for the three months ended December 31, 2025, was $0.15, compared to $(0.12) for the year[21] - The net income (loss) per common share for the three months ended December 31, 2025, was $(0.07), and for the year it was $(0.02)[21] Revenue and Assets - The total revenue for the year ended December 31, 2025, was $54.833 million, with a net interest margin of $32.431 million[16] - Total assets as of December 31, 2025, were $1.618 billion, down from $1.751 billion in 2024[15] - Total liabilities as of December 31, 2025, were $1.109 billion, compared to $1.211 billion in 2024[15] Dividends - The company declared a regular cash dividend of $0.15 per common share for both the fourth quarter of 2025 and the first quarter of 2026[6][7] Strategic Initiatives - The company aims to optimize its financing structure by increasing availability and reducing borrowing costs to support future growth objectives[3] - The company is focused on addressing risk-rated loans and repositioning its portfolio to drive earnings growth in 2026[3] Credit Losses and Expenses - The provision for (reversal of) current expected credit losses, net, was $9,835,000 for the three months ended December 31, 2025, and $(17,845,000) for the year[21] - Stock-based compensation for the three months ended December 31, 2025, was $893,000, and for the year it was $3,904,000[21] - Depreciation and amortization of real estate owned for the three months ended December 31, 2025, was $1,605,000, and for the year it was $8,115,000[21] - The incentive fees to affiliate were reported as zero for both the three months and the year ended December 31, 2025[21] Distributable Earnings - Distributable Earnings (Loss) is aligned with the calculation of "Core Earnings," which is used to calculate the incentive fees paid to the Manager[20] - The Company is required to distribute substantially all of its taxable income to maintain its REIT status, highlighting the importance of Distributable Earnings (Loss) for dividend payments[20]