Financial Position and Debt - As of December 31, 2025, the outstanding balance under the Financing Agreements was $948.2 million[31] - The company had $90.0 million outstanding under its Credit and Guaranty Agreement as of December 31, 2025[31] - The outstanding balance of the FL4 CLO Securitization was $99.9 million as of December 31, 2025[33] - The company expects to maintain a debt-to-equity ratio not exceeding 4.5-to-1, focusing on first or senior mortgages[29] Investment Strategy and Management - The company relies on its Manager for investment advisory services, with no direct employees[27] - The company aims to enhance its position in preferred equity investments through covenants that limit the activities of the entities in which it invests[25] - The company has a disciplined investment philosophy focused on delivering strong risk-adjusted returns throughout market cycles[24] - The company actively manages credit risk through due diligence and ongoing reviews of its loans held for investment portfolio[413] Market Conditions and Risks - Continued weakness in financial markets could adversely affect lenders' willingness to provide financing, potentially increasing costs[425] - Elevated interest rates and inflation have negatively impacted industries whose properties serve as collateral for the company's portfolio investments[427] - The company is subject to risks from defaults by large banking institutions that could impact liquidity and borrowing capabilities[423] - Prepayment rates on existing CRE loans can affect net income, especially if borrowers prepay faster than expected[422] Interest Rate Sensitivity - As of December 31, 2025, a hypothetical increase of 100 basis points in the 30-day SOFR could lead to an increase in net income by $2.6 million[418] - A decrease of 100 basis points in the 30-day SOFR could result in a decrease in net income by $1.7 million[418] - The estimated fair value of fixed-rate investments is expected to decrease in a rising interest rate environment, while it would generally increase in a decreasing interest rate environment[421] - Interest rate floors on floating rate mortgage assets may limit the benefits from lower interest rates, potentially harming financial condition[419] - The company did not have any hedging or derivative financial instruments in place as of December 31, 2025[416] Workforce and Competition - Ares Management had over 4,250 employees across more than 55 offices in over 25 countries as of December 31, 2025[24] - The company competes with various financial entities, including public and private REITs, banks, and institutional investors[36] - The company may incur significant losses if it fails to meet senior note overcollateralization ratio tests in future CLO securitizations[424]

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]

Core Insights - Albert Anthony is a Croatian-American business author and analyst contributing to Seeking Alpha with over 1,000 followers [1] - He has authored a book titled "Real Estate Investment Trusts (REITs): A Fundamental Analysis (2026 Edition)" available on Amazon [1] - Anthony has a background in business and information systems, having worked at Charles Schwab in the IT department [1] - He operates his own boutique equities research firm, Albert Anthony & Company, remotely [1] - The author has participated in numerous business and innovation conferences and has hosted a program for Online Live TV Croatia [1] - He holds a B.A. in Political Science and various certifications including Microsoft Fundamentals and Risk Management specialization from CFI [1] - Anthony is also active on YouTube discussing REITs and is an investor in REIT stocks [1] Company and Industry Summary - Albert Anthony & Company is a Texas-registered business focused on equities research [1] - The firm provides general market commentary and research based on publicly available data [1] - The author does not engage with non-publicly traded companies, small cap stocks, or startup CEOs [1]

Core Viewpoint - Ares Commercial Real Estate Corporation has announced the tax treatment for its common stock distributions for the year 2025, detailing the cash distribution per share and the classification of dividends [1] Summary by Categories Cash Distribution - The cash distribution per share allocable to 2025 is set at $0.2500 [1] Dividend Classification - Total ordinary dividends are specified, with qualified dividends also being part of the distribution [1] - The announcement includes details on total capital gain distributions and nondividend distributions [1] - Section 199A dividends are mentioned, indicating specific tax treatment for certain dividends [1] Important Dates - The record date for the distribution is December 31, 2024, and the payment date is January 15, 2025 [1]

Core Viewpoint - Ares Commercial Real Estate Corporation will report its earnings for the fourth quarter and full year ended December 31, 2025 on February 10, 2026, prior to the opening of the New York Stock Exchange [1] Group 1 - The earnings report will include financial results for the fourth quarter and the full year ended December 31, 2025 [1] - A webcast/conference call will be held on the same day at 12:00 p.m. Eastern Time to discuss the financial results [1] - All interested parties are invited to participate in the earnings discussion [1]

Core Viewpoint - Ares Commercial Real Estate (ACRE) has been upgraded to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on the consensus measure of EPS estimates from sell-side analysts, reflecting the company's changing earnings picture [1][2]. - A strong correlation exists between earnings estimate revisions and near-term stock price movements, making the Zacks rating system valuable for investors [4][6]. Institutional Investor Influence - Institutional investors utilize earnings estimates to determine the fair value of a company's shares, impacting stock price movements through their buying or selling actions [4]. Business Improvement Indicators - The rising earnings estimates for Ares Commercial Real Estate indicate an improvement in the company's underlying business, which is expected to drive the stock price higher [5][10]. Earnings Estimate Revisions - Ares Commercial Real Estate is projected to earn -$0.26 per share for the fiscal year ending December 2025, with no year-over-year change [8]. - Over the past three months, the Zacks Consensus Estimate for Ares Commercial Real Estate has increased by 355% [8]. Zacks Rank System Overview - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Only the top 5% of Zacks-covered stocks receive a "Strong Buy" rating, indicating superior earnings estimate revision features [9][10].

Core Viewpoint - Ares Commercial Real Estate (ACRE) has experienced significant selling pressure, resulting in a 9.2% decline over the past four weeks, but analysts anticipate improved earnings in the near future [1] Group 1: Technical Indicators - The Relative Strength Index (RSI) is utilized to determine if ACRE is oversold, with a current reading of 27.81 indicating potential for a price reversal [2][5] - Stocks oscillate between overbought and oversold conditions, and the RSI helps identify when a stock may be undervalued due to excessive selling [3] Group 2: Fundamental Indicators - Analysts have raised earnings estimates for ACRE by 750% over the last 30 days, suggesting a positive trend that typically leads to price appreciation [6] - ACRE holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, indicating strong potential for a turnaround [7]

Core Insights - During market turbulence, investors often seek dividend-yielding stocks, which typically have high free cash flows and offer substantial dividends [1] Group 1: Analyst Ratings and Stock Performance - Annaly Capital Management Inc (NYSE:NLY) has a dividend yield of 12.60%. JP Morgan analyst Richard Shane maintained an Overweight rating and raised the price target from $21 to $22 on October 20, 2025, with an accuracy rate of 69% [6] - PennyMac Mortgage Investment Trust (NYSE:PMT) has a dividend yield of 12.69%. Keefe, Bruyette & Woods analyst Bose George downgraded the stock from Outperform to Market Perform and cut the price target from $14.5 to $13.5 on July 25, 2025, with an accuracy rate of 70% [6] - Ares Commercial Real Estate Corp (NYSE:ACRE) has a dividend yield of 11.54%. Keefe, Bruyette & Woods analyst Jade Rahmani maintained a Market Perform rating and raised the price target from $4.5 to $4.75 on November 11, 2025, with an accuracy rate of 69% [6] Group 2: Recent News - Annaly Capital Management reported positive quarterly results on October 22, 2025 [6] - PennyMac Mortgage Investment Trust announced the pricing of a $75 million reopening of 8.500% exchangeable senior notes due 2029 on December 11, 2025 [6] - Ares Commercial Real Estate posted better-than-expected third-quarter financial results on November 7, 2025 [6]

Core Viewpoint - Ares Commercial Real Estate (ACRE) has received a Zacks Rank 2 (Buy) upgrade, indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Ratings - The Zacks rating system is based on changes in earnings estimates, which are tracked through the Zacks Consensus Estimate from sell-side analysts for the current and following years [2]. - A significant correlation exists between changes in earnings estimates and near-term stock price movements, making the Zacks rating system valuable for investors [3][5]. Impact of Institutional Investors - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [5]. Business Outlook for ACRE - The upgrade in ACRE's rating reflects an improvement in its underlying business, suggesting that investors may respond positively by driving the stock price higher [6]. Earnings Estimate Revisions - For the fiscal year ending December 2025, ACRE is expected to earn -$0.43 per share, unchanged from the previous year, but the Zacks Consensus Estimate has increased by 42.4% over the past three months [9]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks which have averaged a +25% annual return since 1988 [8]. - ACRE's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10][11].

Group 1 - The article discusses the performance of Commercial Real Estate (CRE) Real Estate Investment Trusts (REITs), highlighting that the strongest REITs are taking loan loss provisions while increasing their borrowings [1] - Binary Tree Analytics (BTA) is introduced as a firm focused on providing transparency and analytics in capital markets, particularly in Closed-End Funds (CEFs), Exchange-Traded Funds (ETFs), and Special Situations, aiming for high annualized returns with low volatility [1]