Acres Commercial Realty Corp. · NYSE:ACR
Acres Commercial Realty — Q3 2024 Earnings Presentation
21 slides from Acres Commercial Realty's earnings presentation, Oct 31, 2024
Slide 1: Third Quarter 2024 Earnings Presentation
THIRD QUARTER 2024 EARNINGS PRESENTATION October 30, 2024
Slide 2: Disclaimer: Forward-Looking Statements
DISCLAIMER Forward-Looking Statements This presentation contains forward-looking statements within the meaning of federal securities laws. These forward-looking statements are not historical facts but rather are based on ACRES Commercial Realty Corp.’s (“ACR’s” or the “Company’s”) current beliefs, a
Slide 3: Disclaimer: Forward-Looking Statements (continued)
DISCLAIMER Forward-Looking Statements (continued) In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this presentation might not occur and actual results, performance or achievement could differ materially from those anticipated or implied in the for
Slide 4: Highlights
HIGHLIGHTS Manager is focused on delivering shareholder value Earnings and capital gains can be retained through EAD1 growth and share repurchases through tax assets to increase book value Percentage of Multifamily-focused Per Share-Diluted GAAP Net Income / EAD Percentage of CRE loan CRE in Loan Po
Slide 5: Third Quarter Results
THIRD QUARTER RESULTS Financial Results Book Value CRE Loan Activity & CRE Portfolio Capitalization & Liquidity $0.36 $27.92 $1.6B Comprising 56 loans with a weighted average LTV of 78% 77% GAAP net income per share-diluted Book value CRE loan portfolio at par value of asset-specific borrowings were
Slide 6: Balance Sheet Overview
BALANCE SHEET OVERVIEW 3Q24 Balance Sheet Overview Summary of Changes to Book Value per Share 1,2 Total Assets ($B) $2.0 $0.11 $27.92 $0.19 Total Liquidity ($M) $79.7 $0.37 $0.05 CRE Whole Loans, at par ($B) $1.6 WA Spread 3.73% $27.20 CECL Reserve – General ($M) $30.0 Per BV Share / Basis Points $3
Slide 7: CRE Loan Portfolio Overview
CRE LOAN PORTFOLIO OVERVIEW CRE Loan Summary 1 Balance by Region 1,3 Loans held for investment, at amortized cost $1,580.5 Pacific Northeast CECL Reserves ($34.7) 9.5% 8.7% CRE whole loans, floating-rate WA 1M BR + 3.73% Mountain Mid Atlantic WA 1M BR Floor2 0.85% 17.9% 14.1% WA CRE loan portfolio L
Slide 8: CRE Loan Portfolio Maturity Profile
CRE LOAN PORTFOLIO MATURITY PROFILE 2.2 years 76% Fully extended weighted average loan maturity 1,2 of the par value of the portfolio has interest rate caps or debt service reserves in place at September 30, 2024 3,4,5 Fully Extended Loan and Interest Rate Cap Maturities ($ in millions at par) $1,00
Slide 9: CRE Loan Risk Ratings and CECL Reserves
CRE LOAN RISK RATINGS AND CECL RESERVES 77% ofperforming ACR’s loans have a risk rating of 1, 2 or 3 that are in line with or near underwritten expectations 1 All but five of ACR’s 56 loans are current on contractual payments at September 30, 2024 W.A. Risk Rating by Collateral Type, $ 2Q24 W.A. Ris
Slide 10: Investments in Real Estate Properties
INVESTMENTS IN REAL ESTATE PROPERTIES Student Housing $13.0M 3 $194.5 million • Existing structure and development of adjacent lot • Equity investment in the southeast region of net investments in real estate • Value add and development project and properties held for sale 1,2 • Acquired in April 20
Slide 11: Capitalization Overview
CAPITALIZATION OVERVIEW Total Capitalization ($ in Millions) $1,936.1 Capitalization Corporate WACC 1 7.51% $ in Millions Maximum W. Avg. Leverage Amount $ Avail. Capacity Coupon Ratio Total Asset Specific Financing $1,289.0 Term Warehouse Financing 2 $500.0 $163.9 $335.4 BR + 2.64% 0.4x WA Asset Sp
Slide 12: Leverage and Liquidity Trend
LEVERAGE AND LIQUIDITY TREND Leverage Ratios $ in millions Total Liquidity ($ in millions) 3.8x 3.7x 3.6x 3.3x $107.7 $98.4 $24.3 $92.1 $8.8 $7.5 $79.7 $9.6 1.1x 1.1x 1.1x 1.1x $89.6 $83.4 $84.6 $70.1 4Q23 1Q24 2Q24 3Q24 Recourse Debt Leverage Ratio Total Leverage Ratio 4Q23 1Q24 2Q24 3Q24 CRE Term
Slide 13: Appendix
APPENDIX ACRESREIT.COM 13
Slide 14: Consolidated Balance Sheets
CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) September 30, 2024 Dec. 31, 2023 Assets (unaudited) Cash and cash equivalents $ 70,074 $ 83,449 Restricted cash 961 8,437 Accrued interest receivable 13,944 11,783 CRE loans 1,580,516 1,857,093 Less: allowance for credit los
Slide 15: Consolidated Statements of Operations
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, in thousands, except share and per share data) For the Three Months Ended For the Nine Months Ended Sep. 30, 2024 Sep. 30, 2023 Sep. 30, 2024 Sep. 30, 2023 Revenues Interest income $ 39,301 $ 48,208 $ 122,978 $ 140,685 Interest expense 28,842 33,555
Slide 16: Earnings Available for Distribution
EARNINGS AVAILABLE FOR DISTRIBUTION The following table provides a reconciliation from GAAP net income allocable to common shares to Earnings Available for Distribution allocable to common shares, a non-GAAP measure, for the periods presented 1: (Unaudited, in thousands, except share and per share d
Slide 17: CECL Trend Analysis
CECL TREND ANALYSIS CHART Since 4Q22, volatility in the commercial real estate sector and limited market liquidity have caused an increase in the CECL reserves to 2.19% at 3Q24 3.00% 100% 2.50% 80% 79% 79% 79% 80% 75% 76% 75% 76% % of CRE Loan Portfolio 2.00% 60% 1.50% 40% 1.00% 25% 24% 25% 24% 20%
Slide 18: Benchmark Sensitivity Analysis Trend
BENCHMARK SENSITIVITY ANALYSIS TREND The recent increases to benchmark rates on net interest income have returned our match-financed investment portfolio to having a direct correlation to the rise or fall in interest rates Quarterly Net Interest Income per Share Sensitivity to Changes in BRs Septemb
Slide 19: Key Definitions
KEY DEFINITIONS Earnings Available for Distribution: Earnings Available for Distribution (“EAD”) is a non-GAAP financial measure that the Company uses to evaluate its operating performance. EAD excludes the effects of certain transactions and GAAP adjustments that it believes are not necessarily ind
Slide 20: Other Disclosures
OTHER DISCLOSURES Commercial Real Estate Loans Risk Ratings CRE loans are collateralized by a diversified mix of real estate properties and are assessed for credit quality based on the collective evaluation of several factors, including but not limited to: collateral performance relative to underwri
Slide 21: Contact Information
ACRES Commercial Realty Corp. is a real estate investment trust that is primarily focused on originating, holding and managing commercial real CONTACT estate mortgage loans and equity investments in commercial real estate property through direct ownership and joint ventures. INFORMATION Additional i
ACRES Commercial Realty — Q3 2024 Earnings Presentation on 6ix