Allied Capital Commercial Corp. announces third quarter results.

WASHINGTON--(BUSINESS WIRE)--Oct. 29, 1996--Allied Capital Commercial Corp. (Nasdaq:ALCC) announced nine month and third quarter results Tuesday.

For the nine months ended Sept. 30, 1996, Allied Capital Commercial reported net income of $20.9 million, an 18% increase over net income of $17.8 million for the nine months ended Sept. 30, 1995. Earnings per share for the cumulative period in 1996 totaled $1.50 per share, versus $1.31 per share for the cumulative period in 1995.

For the three months ended Sept. 30, 1996, the company reported net income of $6.4 million, or 45 cents per share as compared to $6.3 million or 47 cents per share for the third quarter of 1995. The weighted average shares outstanding have increased 3.8% since Sept. 30, 1995.

Income before net investment gains for the three months ended Sept. 30, 1996 was $6.3 million or 45 cents per share as compared to $5.3 million or 39 cents per share for the three months ended Sept. 30, 1995, an increase of 18.5%.

Net investment gains decreased to $528,000 or 3 cents per share from $990,000 or 8 cents per share when comparing the third quarter of 1996 with the third quarter of 1995. During the third quarter of 1996, the company invested $37.8 million in new mortgage loans.

The 1996 investment income and gains include 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.

The 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.

John Scheurer, president and portfolio manager commented, "We are pleased with the growth in our income before net investment gains for the quarter. Although our net income was relatively flat when comparing the quarter ended September 30, 1996 with the quarter ended September 30, 1995, this was largely due to a higher level of investment gains resulting from prepayments in the third quarter of 1995.

"The recurring earnings potential of the portfolio continues to increase and this is demonstrated by the increase in our income before net investment gains, this year." -0-

(in thousands, except per share amounts)

                       9/30/96    Per share     12/31/95    Per share
                       -------    ---------     --------    ---------
Financial Position
 Information
Total investments in
 mortgage loans      $ 339,690         --     $ 273,510         --
Total assets           348,862         --       297,891         --
Shareholders' equity   195,064         --       186,724         --


                          3 mos. ended             3 mos. ended
                       9/30/96   Per share      9/30/95     Per share
                       -------   ---------      -------     ---------
Operating Information
---------------------
Total investment
 income               $ 11,794     $ 0.84       $ 8,765     $ 0.64
Income before net
 investment gains        6,332       0.45         5,343       0.39
Net investment gains       528       0.03           990       0.08
Minority interest         (452)     (0.03)           --         --
Net income            $  6,408     $ 0.45       $ 6,333     $ 0.47

Actual shares
 outstanding            14,166         --        13,584         --
Weighted avg.
 shares outstanding     14,118         --        13,602         --

Distributions to
 Shareholders
Regular dividends           --     $ 0.48            --     $ 0.41


                          9 mos. ended             9 mos. ended
                       9/30/96   Per share      9/30/95     Per share
                       -------   ---------      -------     ---------
Operating Information
---------------------
Total investment
 income               $ 33,153     $ 2.38      $ 24,247     $ 1.79
Income before net
 investment gains       18,224       1.31        15,789       1.16
Net investment gains     4,588       0.33         1,967       0.15
Minority interest       (1,883)     (0.14)           --         --
Net income            $ 20,929     $ 1.50      $ 17,756     $ 1.31

Actual shares
 outstanding            14,166         --        13,584         --
Weighted avg.
 shares outstanding     13,957         --        13,539         --

Distributions to Shareholders
Regular dividends           --     $ 1.38            --     $ 1.19

-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 14,166,024 shares outstanding. The company currently pays a regular quarterly cash dividend of 48 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 $22.125 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 202/973-6383 or fax to 202/659-2053.

CONTACT: Allied Capital, Washington

Suzanne Sparrow, 202/973-6326