Allied Capital Commercial Corp. Announces Second Quarter Earnings.

WASHINGTON--(BUSINESS WIRE)--Aug. 14, 1997--Allied Capital Commercial Corp. (Nasdaq: ALCC) announced second quarter results Thursday.

Income before net investment gains for the three months ended June 30, 1997 increased 6.8% as compared to the income before net investment gains earned during the second quarter of 1996. The increase results from the continued growth in the company's portfolio of mortgage loans.

As of June 30, 1997, the company had net investments in mortgage loans of $446 million, a 36% increase as compared to June 30, 1996 when net investments equaled $328 million.

The company's net income of $6.8 million, or $0.47 per share, for the quarter ended June 30, 1997 was down from the $7.7 million, or $0.55 per share, reported for the same period last year.

The decrease in net income is directly the result of a decrease in the recognition of gains resulting from the early payoff of loans. Early loan payoffs are unpredictable and tend to vary significantly from quarter to quarter.

Because of the variability in the timing of gains, quarterly results are not indicative of expected annual results.

The company closed 17 new loans during the second quarter and completed its first sale/leaseback transaction for a total of $74 million invested. This is the company's best quarter ever in terms of production and this continued growth has resulted in an 11% increase in year-to-date income before net investment gains.

For the six months ended June 30, 1997, the company reported income before investment gains of $13.2 million, an increase of 11% over the $11.9 million reported for the corresponding period of the prior year.

Earnings for the first half of 1997 were $13.4 million, or $0.93 per share as compared to $14.5 million, or $1.05 per share for the comparative period in the prior year. The company has invested $129 million in new portfolio companies during the first six months of 1997, and has experienced repayments totaling $42 million.

The board of directors of Allied Capital Commercial Corp. increased the company's quarterly cash dividend for the fifteenth consecutive quarter.

The dividend was increased by 2% to $0.53 per share from $0.52 per share. The regular quarterly dividend is payable on Sept. 30, 1997 to shareholders of record as of Sept. 19, 1997. -0-

(in thousands, except per share amounts)

                           6/30/97   Per Share    12/31/96   Per Share
                           -------   ---------    --------   ---------

Financial Position
 Information
------------------

Total investments in
 mortgage loans          $ 445,878         --    $ 355,461          --
Total assets               453,111         --      370,304          --
Shareholders' equity       198,553         --      195,329          --


                                3 mos. ended          3 mos. ended
                            6/30/97  Per Share    6/30/96    Per Share
                           -------   ---------    --------   ---------
Operating Information
---------------------
Total investment income  $   13,081  $    0.90   $  11,266   $    0.81
Income before net
 investment gains             6,607       0.46       6,186        0.44
Net investment gains            440       0.03       2,253        0.16
Minority interest              (283)     (0.02)       (756)      (0.05)
Net income               $    6,764  $    0.47   $   7,683   $    0.55

Actual shares
 outstanding                 14,460         --      13,960          --
Weighted avg. shares
 outstanding                 14,478         --      13,934          --


Distributions to Shareholders
-----------------------------

Regular dividends                --  $    0.52          --   $     0.46


                                6 mos. ended          6 mos. ended
                            6/30/97  Per Share    6/30/96    Per Share
                           --------  ---------    --------   ---------

Operating Information
---------------------

Total investment income  $   25,068  $    1.74   $  21,359   $     1.54
Income before net
 investment gains            13,199       0.91      11,908         0.86
Net investment gains            790       0.05       4,060         0.29
Minority interest              (588)     (0.04)     (1,431)       (0.10)
Net income               $   13,401  $    0.93   $  14,537   $     1.05

Actual shares
 outstanding                 14,460                 13,960
Weighted avg. shares
 outstanding                 14,446         --      13,873           --

Distributions to Shareholders
-----------------------------

Regular dividends                    $     1.03              $     0.90

-0-

Statements in this release concerning the company's future prospects are "forward looking statements" under the Federal securities laws. There can be no assurance that future results will be achieved and actual results could differ materially from forecasts and estimates.

Important factors that could cause actual results to differ materially are included but are not limited to those listed in the company's quarterly reports as filed on Form 10-Q and annual report as filed on Form 10-K.

Allied Capital Commercial Corp. is a publicly traded commercial mortgage REIT. The company is headquartered in Washington, D.C. and traded on the Nasdaq National Market, symbol ALCC. There are a total of 14,486,997 shares outstanding.

The company currently pays a regular quarterly cash dividend of $0.53 per share. For 1996, the company distributed a total of $1.98 per share; for 1995, the company paid a total of $1.78 per share; for 1994, distributions totaled $1.47 per share.

For further information or a copy of the Company's annual report, please contact Allied Capital's Investor Relations Department directly by phone at 202/973-6326, or via fax at 202/659-2053.

To receive press releases and other information through our News-On-Demand fax service, dial 888/329-5519, or visit our world wide web site at www.alliedcapital.com .

CONTACT: Allied Capital, Washington

Suzanne Sparrow, 202/973-6326