Ares Commercial reports Q4 distributable EPS 20c, consensus (1c)

Reports Q4 revenue $17.55M, consensus $23.89M. “Our fourth quarter and full-year 2023 earnings were primarily impacted by the continuing deterioration of the commercial office property sector,” said Bryan Donohoe, Chief Executive Officer of Ares Commercial Real Estate Corporation. “However, based upon our experience and capabilities across the Ares Real Estate Group, our liquidity, and our level of loss reserves, we believe that we are well positioned to resolve many of our underperforming loans and redeploy recovered capital into new loans to enhance our earnings going forward.” “We increased our CECL reserves in the fourth quarter largely due to the performance of our commercial office and residential condominium loan portfolio, which accounted for 87% of our total CECL reserves at year-end,” said Tae-Sik Yoon, Chief Financial Officer of Ares Commercial Real Estate Corporation. “In addition, we ended the year with $185 million of available capital which includes cash and undrawn availability under our working capital facility. Together with reducing our debt-to-equity ratio over the past few years, we believe that our balance sheet puts us in a flexible position to manage and resolve our underperforming loans.”