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Did ACRES Commercial beat or miss consensus estimates last quarter?

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What were the key takeaways from ACRES Commercial's earnings call?

- **$13.1M Gain on Sale**: Real estate investment sale boosted EAD and utilized tax benefits, driving book value to $29.63/share (+$1.70/QoQ).
- **Construction Loan Expansion**: Converted office to multifamily property, with $650-700M construction loans pipeline for future REIT migration.
- **Dividend Outlook**: Targeting $30/share book value (near current level) with potential dividend after remaining asset sales.
- **Liquidity & Efficiency**: 36% share repurchase discount highlights capital allocation focus; debt-to-equity ratio improved to 2.7x.

**【CEO Summary Section】**
- **Loan Portfolio Activity**: New commitments of $106.4 million, net decrease of $46.8 million due to payoffs and sales. Expecting positive growth in Q4 for full-year net increase.
- **Portfolio Metrics**: Weighted average spread of 3.63% over SOFR; 13 loans rated 4 or 5 (unchanged from Q2). Sold one real estate investment for $13.1 million gain, utilizing tax loss carryforward.
- **Construction Loan Update**: Converted Chicago office to 252-unit multifamily property, expected Q3 2026 opening. Planning to redeploy capital into high-quality CRE loans.

**【CFO Financial Commentary】**
- **Financial Results**: GAAP net income $9.8M ($1.34/share), EAD $1.01/share (vs. $0.04/Q2). GAAP book value rose to $29.63/share (+$1.70/QoQ), with $2.9M shares repurchased at 36% discount.
- **Liquidity & Leverage**: $64M available liquidity ($41M cash, $23M asset financing). Debt-to-equity ratio improved to 2.7x. NOL carryforward $32.1M ($4.55/share).
- **Credit Metrics**: Allowance for credit losses $26.4M (1.89% of portfolio). CECL reserves decreased $4M QoQ due to improved credit risk modeling.

**【Q&A Highlights】**
- **CLO Strategy**: Targeting Q1 2026 securitization with pipeline growth. No significant payoffs expected, maintaining net growth target.
- **Construction Financing**: Fund business provides $650-700M construction loans, with potential migration to REIT via bridge loans.
- **Book Value & Dividends**: Aiming for $30/share book value (current $29.63). Dividend possible after asset monetization, with 1-2 properties remaining.
- **Property Sales**: One sale visible in next 2Q; others dependent on operating metrics. Fed easing may benefit valuations.


ACRES Commercial Realty Corp. (ACR) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

ACR

ACR fundamentals

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