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• GAAP Net Loss (Q4 2024): $10.7 million or $0.20 per common share.

• Distributable Earnings Loss (Q4 2024): $8.3 million or $0.15 per common share.

• Realized Losses (Q4 2024): $18 million or $0.33 per share.

• GAAP Net Loss (Full Year 2024): $35 million or $0.64 per common share.

• Distributable Earnings Loss (Full Year 2024): $44.6 million or $0.82 per share.

• Loan Repayments (Q4 2024): $147 million.

• Loan Repayments (Full Year 2024): $350 million, nearly double compared to 2023.

• Reduction in Outstanding Borrowings (Full Year 2024): $444 million or 27% reduction.

• Net-Debt-to-Equity Ratio (Year-End 2024): 1.6 times, 16% lower than year-end 2023.

• Cash Balance: Represents approximately 40% of the current market value of the stock.

• Quarterly Dividend: Adjusted to $0.15 per share.

• CECL Reserve (Year-End 2024): Approximately $145 million, representing 8.5% of total outstanding principal balance.

• Annualized Dividend Yield (February 10, 2025): Above 10% based on the new dividend.

• Warning! GuruFocus has detected 4 Warning Signs with ACRE.

Release Date: February 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Ares Commercial Real Estate Corp (NYSE:ACRE) reduced its risk-rated 4 and 5 loans by approximately 34% or $182 million in 2024, improving the overall quality of its portfolio.

• The company collected $350 million in repayments for the full year 2024, nearly double compared to 2023, indicating strong repayment activity.

• ACRE reduced its office exposure, including REOs, by $151 million, representing an 18% decline year-over-year.

• The company enhanced its balance sheet flexibility by reducing outstanding borrowings by $444 million or 27% for the full year 2024.

• ACRE's cash balance now represents approximately 40% of the current market value of the stock, providing significant liquidity for future opportunities.

Negative Points

• Ares Commercial Real Estate Corp (NYSE:ACRE) reported a GAAP net loss of $35 million or $0.64 per common share for the full year 2024.

• The company experienced realized losses of $18 million in the fourth quarter of 2024, impacting distributable earnings.

• ACRE's outstanding principal balance of loans with risk ratings of 4 or 5 increased by 12% or $37 million in the fourth quarter.

• The company had to fully write off an $18 million subordinated loan collateralized by an office property in New Jersey.

• ACRE's decision to maintain higher liquidity and lower leverage levels has impacted current earnings, leading to a reduction in quarterly dividends to $0.15 per share.