Ares Commercial Real Estate Corporation reported GAAP net income of $9.3 million, or $0.17 per diluted common share, for the first quarter of 2025, a notable improvement from a net loss in the prior year period. Distributable Earnings for the quarter were $7.2 million, or $0.13 per diluted common share. The company reported no new realized loan losses in Q1 2025, a significant improvement compared to $45.7 million in realized losses in Q1 2024.
The company successfully increased liquidity and reduced debt, collecting $307 million in loan repayments during the quarter and reducing outstanding borrowings by $228 million to $946 million. The net debt-to-equity ratio (excluding CECL) declined to 1.2 times at the end of Q1 2025, down from 1.6 times in Q4 2024 and 1.9 times in Q1 2024.
Strategic financing initiatives included the redemption of its FL3 CLO securitization in March 2025, which was replaced by more efficient financing that lowered borrowing costs by 86 basis points. Available capital reached $147 million as of May 2, 2025, including $113 million in cash. The Board of Directors declared a regular cash dividend of $0.15 per common share for the second quarter of 2025, maintaining the dividend level.
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