Ares Commercial Real Estate Corporation Declares Second Quarter 2013 Dividend of $0.25 Per Common Share and Reports First Quarter 2013 Financial Results

Ares Commercial Real Estate Corporation (NYSE:ACRE):

MARCH 31, 2013 FINANCIAL RESULTS

Ares Commercial Real Estate Corporation (NYSE:ACRE) announced that its Board of Directors has authorized a second quarter 2013 dividend of $0.25 per common share and announced its financial results for the quarter ended March 31, 2013. The second quarter 2013 dividend is payable on July 18, 2013 to common stockholders of record as of June 28, 2013. In separate announcements, the Company also reported today that it had entered into a purchase and sale agreement to acquire EF&A Funding, LLC, d/b/a Alliant Capital LLC (a national multi-family loan origination and servicing business) and that Todd Schuster was appointed to serve as Co-Chief Executive Officer of the Company effective June 1, 2013.

FIRST QUARTER 2013 HIGHLIGHTS

• Led the closing of two new loan commitments totaling $132.6 million, including a $107.1 million first mortgage loan commitment collateralized by multi-family properties in Atlanta, Georgia (of which ACRE initially funded a $26.7 million B-Note and a third party commercial bank initially funded a $68.1 million A-Note ) and a $25.5 million first mortgage loan commitment loan collateralized by office properties in Kansas City, Missouri. ACRE’s initial funding on the two loans was approximately $51.0 million.
• For the first quarter of 2013, Core Earnings of $0.9 million or $0.09 per basic and diluted common share. Included in Core Earnings is $0.6 million or $0.07 per basic and diluted common share of transaction expenses related to the proposed acquisition of Alliant Capital LLC. Without the impact of such transaction expenses, Core Earnings for the first quarter of 2013 would have been $1.5 million or $0.16 per basic and diluted common share.
• Declared a first quarter 2013 dividend of $0.25 per common share, which was paid on April 18, 2013.

SUMMARY OF FIRST QUARTER FINANCIAL RESULTS

Net income (loss) attributable to common stockholders was $0.3 million or $0.04 per basic and diluted common share and $(116) thousand or $(0.12) per basic and diluted common share for the three months ended March 31, 2013 and 2012, respectively. Core Earnings (loss) were $0.9 million or $0.09 per basic and diluted common share and $(116) thousand or $(0.12) per basic and diluted common share for the three months ended March 31, 2013 and 2012, respectively. Included in net income attributable to common stockholders and Core Earnings is $0.6 million or $0.07 per basic and diluted common share of transaction expenses related to the proposed acquisition of Alliant Capital LLC. Without the impact of such transaction expenses, Core Earnings for the first quarter of 2013 would have been $1.5 million or $0.16 per basic and diluted common share. The Company cannot provide any assurances that the proposed acquisition of Alliant Capital LLC will close. Reconciliations of Core Earnings to the most directly comparable GAAP financial measure, net income, are set forth in a table at the end of this presentation.

“We ended the first quarter on a strong note with the closing of two attractive investments totaling $132.6 million in total commitments. Our momentum has continued with the closing of another quality $15.0 million loan commitment at the end of April, the execution of non-binding term sheets on approximately $50 million in potential loans and approximately $2 billion in potential loans with term sheets outstanding, soft quotes, indicative terms or at other stages of preliminary evaluation,” commented John Bartling, CEO of Ares Commercial Real Estate Corporation. “We continue to build our brand as a go-to provider of capital for sponsors and owners of commercial real estate seeking flexible and creative capital solutions in the middle market. The outlook for our core business is strong as commercial real estate fundamentals improve and as transaction activity expands into new markets.”

Mr. Bartling continued, “Earlier today, we announced our intention to acquire Alliant Capital LLC and to welcome Todd Schuster as co-CEO of our company. We are very pleased to expand our platform and further scale our company through this strategic acquisition that we expect will be accretive to our earnings per share. We believe the combination with Alliant Capital LLC will not only enhance our market presence through its complementary direct origination platform, but it will also significantly broaden the product capabilities that we can offer our clients, providing significant revenue synergies. We believe that the transaction provides entry into a less capital intensive and potentially higher returning segment with very attractive growth dynamics. Todd has been a Board member since our IPO and we are thrilled to now have his full time commitment as his leadership, business insight and market knowledge will be invaluable to our company.”

SUMMARY OF INVESTMENTS AT MARCH 31, 2013

At March 31, 2013, the Company had originated seventeen loans totaling approximately $470.2 million in commitments with outstanding principal of $413.0 million. At March 31, 2013, all loans were performing in accordance with the terms of the respective loan agreements.

Portfolio at March 31, 2013:

(amounts in millions, except percentages)

RECENT DEVELOPMENTS

On April 29, 2013, the agreements governing the Citibank Facility were amended to provide that the limitation on the payment of dividends to the common shareholders of the Company in excess of 100% of taxable income will start to be tested on December 31, 2013.

On April 30, 2013, the Company originated an approximately $15.0 million stretch senior mortgage loan on an office building located in Mountain View, CA. At closing the outstanding principal balance was approximately $14.5 million. The loan has an interest rate of LIBOR + 4.75% subject to a 0.50% LIBOR floor and term of 33 months.

On May 9, 2013, the Company filed a registration statement on Form S-3 with the Securities and Exchange Commission in order to permit the Company to offer, from time to time, in one or more offerings or series of offerings, up to $1.5 billion of the Company’s common stock, preferred stock, debt securities, subscription rights to purchase shares of the Company’s common stock, warrants representing rights to purchase shares of the Company’s common stock, preferred stock or debt securities, or units. The Company may not sell securities pursuant to the registration statement until the registration statement is declared effective by the Securities and Exchange Commission.

On May 14, 2013, the Company entered into a Purchase and Sale Agreement (the “Agreement”) with Alliant, Inc., a Florida corporation, and The Alliant Company, LLC, a Florida limited liability company (collectively, the “Sellers”). The Agreement provides that, upon the terms and subject to the conditions set forth therein, at the closing of the transaction, the Company will purchase from Sellers (the “Acquisition”) all of the outstanding common units of EF&A Funding, L.L.C., d/b/a Alliant Capital LLC, a Michigan limited liability company, which houses the Sellers’ multi-family residential mortgage loan origination and servicing business. The Agreement provides that the Company will pay $52.9 million in cash, subject to certain adjustments, and issue 588,235 shares of its common stock in a private placement exempt from registration under the Securities Act of 1933, as consideration for the Acquisition. The cash portion of the transaction may be financed through additional debt financing, potential issuances of common or preferred stock and/or the repayment or sale of certain assets. The Acquisition is expected to close during the second half of 2013, subject to the satisfaction or waiver of various closing conditions as described in the Agreement. There can be no assurance that the Acquisition will be completed, or if it is completed, that it will close within the anticipated time period. In connection with the Acquisition, the board of directors of the Company approved the expansion of the Company’s investment guidelines to reflect the Acquisition, subject to the concurrent consummation of the Acquisition.

On May 14, 2013, the board of directors of the Company appointed Todd Schuster to join John B. Bartling, Jr., as the Company’s Co-Chief Executive Officer effective June 1, 2013. As a result of Mr. Schuster’s appointment as Co-Chief Executive Officer, Mr. Schuster is no longer “independent” for the purpose of serving on the audit committee of the Company’s board of directors and, consequently, resigned from such committee.

On May 15, 2013, the Company declared a cash dividend of $0.25 per common share for the second quarter of 2013. The second quarter 2013 dividend is payable on July 18, 2013 to common stockholders of record as of June 28, 2013.

INVESTMENT CAPACITY AND LIQUIDITY

As of May 14, 2013, the Company had approximately $360 million in potential loans with non-binding term sheets issued, approximately $650 million of potential loans with soft quotes or indicative terms provided and approximately $1.1 billion of potential loans in other stages of preliminary evaluation. Historically, the Company has executed non-binding term sheets for a relatively small percentage of evaluated loans. The Company operates in a competitive market for investment opportunities and competition may limit its ability to originate or acquire the investments in the pipeline. The consummation of any of the loans in the pipeline depends upon, among other things, one or more or the following: satisfactory completion of the Company’s due diligence investigation and investment process, market conditions, available liquidity, the Company’s agreement with the sponsor on the terms and structure of such loan, and the execution and delivery of satisfactory transaction documentation. In addition, the Company may co-originate some of these loans with third parties. The Company cannot provide any assurances that it will close or co-originate any of these loans.

As of May 13, 2013, the Company has approximately $40 million of remaining capital, either in cash or in approved but undrawn capacity under the Company’s secured funding facilities. After holding in reserve $20.0 million in liquidity requirements, the Company has approximately $20 million in capital available to fund additional commitments, the Company’s existing outstanding commitments and for other working capital purposes. Assuming that the Company uses such amount as equity capital to make new investments and is able to achieve a debt-to-equity ratio of 1-to-1 to 2-to-1, the Company has the capacity to fund approximately $40 million to approximately $60 million of additional senior loan investments. As of May 13, 2013, the total unfunded commitments for the Company’s existing loans held for investment was approximately $53.6 million and borrowings under the Company’s secured funding facilities and from the issuance of convertible senior notes were approximately $222.1 million and $69.0 million, respectively.

FIRST QUARTER 2013 DIVIDEND

On March 14, 2013, the Company declared a dividend of $0.25 per common share for the first quarter of 2013, which was paid on April 18, 2013 to common stockholders of record as of April 8, 2013.

CONFERENCE CALL AND WEBCAST INFORMATION

The Company will host a webcast and conference call on Wednesday, May 15, 2013, 9:00 AM Central Time (10:00 AM Eastern Time) to discuss its financial results for the quarter ended March 31, 2013.

All interested parties are invited to participate via telephone or the live webcast, which will be hosted on a webcast link located on the Home page of the Investor Resources section of the Company’s website at http://www.arescre.com. Please visit the website to test your connection before the webcast. Domestic callers can access the conference call by dialing (888)-317-6003. International callers can access the conference call by dialing +1 (412)-317-6061. All callers will need to enter the Participant Elite Entry Number 4229219 followed by the # sign and reference “Ares Commercial Real Estate Corporation” once connected with the operator. All callers are asked to dial in 10-15 minutes prior to the call so that name and company information can be collected. For interested parties, an archived replay of the call will be available through May 30, 2013 to domestic callers by dialing (877)-344-7529 and to international callers by dialing +1 (412)-317-0088. For all replays, please reference conference number +1 (412)-317-0088. An archived replay will also be available on a webcast link located on the Home page of the Investor Resources section of the Company’s website.

ABOUT ARES COMMERCIAL REAL ESTATE CORPORATION

Ares Commercial Real Estate Corporation is a specialty finance company that originates, invests in and manages middle-market commercial real estate loans and other commercial real estate investments. Through its national direct origination platform, Ares Commercial Real Estate Corporation provides flexible financing solutions for middle-market borrowers. Ares Commercial Real Estate Corporation intends to elect to be taxed as a real estate investment trust commencing with its taxable year ended December 31, 2012, and is externally managed by an affiliate of Ares Management LLC, a global alternative asset manager with approximately $59 billion in committed capital under management as of March 31, 2013. For more information, please visit the Company’s website at www.arescre.com. The contents of such website are not and should not be deemed to be incorporated by reference herein.

FORWARD LOOKING STATEMENTS

Statements included herein or on the webcast / conference call may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which relate to future events or the Company’s future performance or financial condition. These statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in the Company’s filings with the Securities and Exchange Commission. Ares Commercial Real Estate Corporation undertakes no duty to update any forward-looking statements made herein or on the webcast/conference call.

AVAILABLE INFORMATION

Ares Commercial Real Estate Corporation’s filings with the Securities and Exchange Commission, press releases, earnings releases and other financial information are available on its website at www.arescre.com. The contents of such website are not and should not be deemed to be incorporated by reference herein.

March 31, 2013 and 2012 Reconciliation of Net Income to Core Earnings

Core Earnings is a non-GAAP financial measure that is used, among other things, to compute incentive fees payable to the Company’s external manager, Ares Commercial Real Estate Management LLC (“ACREM”). The Company believes the disclosure of Core Earnings provides useful information to investors regarding financial performance because it is one method the Company uses to measure its financial conditions and results of operations. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. Core Earnings is defined as GAAP net income (loss) excluding non-cash equity compensation expense, the incentive fee payable to ACREM, depreciation and amortization (related to targeted investments that are structured as debt to the extent the Company forecloses on any properties underlying such debt), any unrealized gains, losses or other non-cash items recorded in net income (loss) for the period, regardless of whether such items are included in other comprehensive income or loss, or in net income (loss). The amount will be also be adjusted to exclude one-time events pursuant to changes in GAAP and certain other non-cash charges as determined by ACREM and approved by a majority of the independent directors of the Company. Core Earnings (loss) for the three months ended March 31, 2013 and 2012 were approximately $0.09 million or $0.09 per basic and diluted common share and approximately $(116) million or $(0.12) per basic and diluted common share, respectively. Reconciliation of Core Earnings (loss) to the most directly comparable GAAP financial measure, net income (loss), is set forth in the table below for the three months ended March 31, 2013 and 2012: