Key Takeaways:
Ares Commercial Real Estate Corp. reported first-quarter distributable earnings of $0.06 per share, missing analyst estimates as the company works to shed risky assets while expanding its loan book.
"We remain highly focused on resolving the remaining risk rated 4 and 5 loans and REO properties alongside selectively investing in high quality new loans in order to reshape and grow our portfolio,” Bryan Donohoe, Chief Executive Officer of Ares Commercial Real Estate Corporation, said.
The specialty finance company’s distributable earnings of $0.06 per share fell short of the $0.08 Zacks Consensus Estimate and were down from $0.13 per share in the same period a year ago. On a GAAP basis, the company posted a net loss of $9.6 million, or $0.17 per share, a sharp reversal from the $9.3 million net income reported in the first quarter of 2025. Total revenue for the period was $13.5 million.
Despite the earnings miss, the company is actively repositioning its portfolio, closing $294 million in new loan commitments during the quarter. The stock has climbed nine percent since the beginning of the year and 27 percent over the last 12 months, suggesting investors have priced in some of the ongoing restructuring.
The company also signaled confidence in its financial position by declaring a second-quarter cash dividend of $0.15 per common share. "We maintained our balance sheet flexibility through additional repayments in the loan portfolio, disciplined liquidity and liability management and expanded borrowing capacity,” Jeff Gonzales, the company's Chief Financial Officer, said, noting a $300 million increase in capacity on two secured funding facilities.
Ares Commercial Real Estate Corporation is a specialty finance company primarily engaged in directly originating and investing in commercial real estate loans and related investments. Through its national direct origination platform, the Company provides a broad offering of flexible and reliable financing solutions for commercial real estate owners and operators. The Company invests in whole and co-invested senior mortgage loans, as well as subordinate financings, mezzanine debt and preferred equity, with an emphasis on providing value added financing on a variety of properties located in liquid markets across the United States.
This article is for informational purposes only and does not constitute investment advice.
