Allied Capital Commercial Corp. announces first quarter results.

WASHINGTON--(BUSINESS WIRE)--May 9, 1996--Allied Capital Commercial Corp. (Nasdaq: ALCC) announced first quarter results Thursday.

Net income increased by 17%, or $1.0 million, to $6.9 million for the first quarter of 1996 as compared to net income for the first quarter of 1995 of $5.9 million. Earnings per share for the quarter increased to 50 cents per share from 44 cents per share for the first quarter of 1995. This increase reflected a 4% increase in average shares outstanding.

As a result of early loan payoffs that occurred during the first quarter of 1996, net income included investment gains of $1.8 million, or 13 cents per share, as compared to $0.7 million, or 5 cents per share, for the same period in 1995.

The 1996 first quarter gains include gains from the consolidation of Allied Capital Funding, LLC, an 82%-owned subsidiary of the company that was established during the fourth quarter of 1995 for purposes of securitizing a portion of the company's loans, and the loans of a private REIT.

First quarter 1996 consolidated assets, liabilities and operating results include the accounts of the company and Allied Capital Funding, LLC, which are offset by the resulting minority interest.

During the first quarter of 1996, the company increased its net investments in mortgage loans by $51.5 million, or 19%. Total assets at March 31, 1996 totaled $348.4 million which represents a 19% increase since Dec. 31, 1995. At March 31, 1996, the company had loan commitments outstanding to prospective portfolio companies totaling $12.1 million.

"Largely as a result of a $47 million pool of commercial mortgages we purchased in February, this was the single best quarter we've posted for new investments," remarked John Scheurer, president and portfolio manager. "With the implementation of two new financial products this year, we hope to continue to increase our loan volume, and will consider another securitization pool once we have a critical mass of securitizable assets in our portfolio."

The company's November 1995 mortgage loan securitization has provided approximately $80 million in low-cost long-term financing to the company. -0-

(in thousands except per share amounts)

                       3/31/96   Per share     12/31/95     Per share
                       -------   ---------     --------     ---------
Financial Position
  Information
------------------
Total investments in
 mortgage loans      $ 324,985         --     $  273,510         --
Total assets         $ 348,364         --     $  297,891         --
Shareholders'
 equity              $ 189,702         --     $  186,724         --

                          3 mos. ended             3 mos. ended
                       3/31/96   Per share      3/31/95     Per share
                       -------   ---------      -------     ---------
Operating Information
---------------------
Total investment
 income              $  10,093   $  0.73        $  7,280    $  0.55
Income before net
 investment gains    $   5,722   $  0.42        $  5,129    $  0.39
Net investment gains $   1,808   $  0.13        $    748    $  0.05
Minority interest    $    (675)  $ (0.05)       $     --    $    --
Net income           $   6,855   $  0.50        $  5,877    $  0.44

Actual shares
 outstanding            13,850        --          13,357         --
Weighted avg. shares
 outstanding            13,815        --          13,222         --

Distributions to
 Shareholders
----------------
Regular dividends           --   $  0.44              --    $  0.38-0- Quarterly dividend increased for the tenth consecutive quarter

At their most recent meeting, the board of directors of Allied Capital Commercial Corp. increased the company's quarterly dividend by 4.5% to 46 cents per share for the tenth consecutive quarterly dividend increase. The dividend is payable on June 28, 1996 to shareholders of record as of June 14, 1996.

Annual Meeting results announced

On May 3, 1996 at the company's Annual Meeting of Shareholders held in Bethesda, Md., shareholders elected all directors as nominated in the proxy statement, and ratified the selection of Arthur Andersen LLP as independent public accountants. Approximately 78% of the total shares outstanding were present or represented at the meeting. -0-

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 13,855,211 shares outstanding. The company currently pays a regular quarterly cash dividend of 46 cents per share.

For 1995, the company paid a total of $1.78 per share; for 1994 distributions totaled $1.47 per share. A recent stock quote is $19.25 per share and the shares are marginable. For additional information or a copy of the company's annual report, please contact Allied Capital's Investor Relations Department at 202/973-6343 or fax to 202/659-2053.

CONTACT: Allied Capital, Washington

Suzanne Sparrow, 202/973-6326