Ares Commercial Real Estate's net income slipped slightly in the second quarter as the company prepares to sell its mortgage banking subsidiary.
The company reported a 3% drop in net income year-over-year to $8.7 million. Diluted earnings per share, including net income from discontinued operations held for sale, were 31 cents.
During the second quarter, Ares agreed to sell its mortgage banking subsidiary, ACRE Capital Holdings, to Cornerstone Real Estate Advisers. The sale is expected to close in the third or fourth quarter.
Meanwhile, the mortgage banking subsidiary's net income rose 23% from the second quarter of 2015 to $2.7 million. A 19% increase in mortgage banking revenue was offset in part by a 16% jump in expenses mainly due to higher compensation and transaction costs.
Net interest income fell 15% to $10.5 million. Total expenses for Ares held steady at $3.2 million.
