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Financial Performance and Portfolio - As of December 31, 2025, the company originated 15 commercial real estate (CRE) loans with total commitments of $757.3 million[18]. - The CRE loan portfolio at par comprised $1.8 billion of CRE whole loans with a weighted average spread of 3.35% over the one-month benchmark interest rates[18]. - At December 31, 2025, the company managed $2.2 billion of assets, with 91.74% of the investment portfolio in CRE whole loans[20][32]. - The total investment portfolio amounted to $1.983 billion, with a net carrying amount of $1.963 billion, including an allowance for credit losses of $20.4 million[32]. - The total CRE loan portfolio at carrying value was $1.8 billion as of December 31, 2025[49]. - The total net investments in real estate and properties held for sale amounted to $192.4 million[52]. Financing and Leverage - Financing arrangements included borrowings of $1.344 billion, with a value of collateral at $1.897 billion, resulting in equity at risk of $295.7 million[23]. - The company expects to modestly increase leverage through new CRE debt securitizations and continued use of senior secured financing facilities[29]. - At December 31, 2025, 76.5% of the par value of the CRE loan portfolio had interest rate caps with a weighted-average maturity of 15 months[31]. - The company relies on adequate debt and equity capital for growth, with current economic conditions potentially limiting access to such capital, affecting profitability and stock price[77]. Investment Strategy and Focus - The investment strategy targets transitional floating-rate CRE loans between $10.0 million and $100.0 million[18]. - The company aims to allocate 90% to 100% of its equity to CRE assets, focusing on managing risks associated with its investment strategies[19]. - The company recognizes the importance of ESG factors in its investment strategy and operations, committing to good corporate citizenship[72]. Risks and Economic Conditions - The company faces risks related to current economic conditions, financing, operations, and investments, which could limit profitability and distributions[75]. - A prolonged economic slowdown could lead to declining real estate values, reducing new mortgage loan originations and increasing the likelihood of loan defaults, adversely impacting operations and financial condition[78]. - Public health emergencies may negatively affect the economy and capital markets, leading to increased uncertainty and volatility, which could impact the market price of the company's common stock[79]. - The company faces risks associated with leverage, which may reduce returns on investments and cash available for distribution, particularly if operating cash flows are insufficient to meet debt obligations[81]. Regulatory and Compliance Issues - The company must distribute at least 90% of its REIT taxable income, limiting its ability to retain earnings for new investments[77]. - The company has not issued redeemable securities and does not intend to do so, ensuring compliance with the Investment Company Act[65]. - The company relies on an exclusion from registration as an investment company under Section 3(a)(1)(C) of the Investment Company Act, which requires that investment securities do not exceed 40% of total assets[159]. - The company must continually satisfy various REIT qualification tests, including maintaining at least 75% of its assets in real estate assets, government securities, cash, and cash items[166]. Management and Governance - The management agreement includes a monthly base management fee of 1.50% of equity, with incentive compensation based on excess EAD over a 7% annual threshold[56][58]. - The Manager is entitled to receive incentive compensation based on the excess of 20% of the EAD over a 7% annual return on book value equity, with no compensation payable unless EAD is greater than zero[136]. - Termination of the Management Agreement without cause requires a two-thirds vote of independent directors or a majority vote of common stockholders, with a termination fee equal to four times the average annual management fee and incentive compensation[139]. Shareholder and Stock Information - As of March 6, 2026, there were 7,131,101 shares of common stock outstanding held by 180 holders of record[210]. - The company has 328,586 restricted stock awards outstanding, with a total of 700,822 securities available for future issuance under equity compensation plans[211]. - The company’s 8.625% Series C Cumulative Redeemable Preferred Stock is listed on the NYSE and has declared and paid dividends through January 2026, with no arrears[212]. - The company’s 7.875% Series D Cumulative Redeemable Preferred Stock is also listed on the NYSE, and an equity distribution agreement allows for the issuance of up to 2.2 million shares[213]. Taxation and Financial Obligations - The company has been organized to qualify as a REIT since the taxable year ended December 31, 2005, but complex federal income tax laws pose ongoing compliance risks[174]. - If the company fails to qualify as a REIT, it would be subject to federal income tax, significantly reducing cash available for distribution to stockholders[175]. - The company may incur corporate income tax and a 4% nondeductible excise tax on undistributed taxable income, which could affect cash flow and distribution capabilities[178].

Core Insights - The company reported strong loan growth and improving credit trends in its fourth-quarter earnings call, despite a charge-off from a legacy mezzanine loan impacting distributable results [4][6][19] Loan Origination and Portfolio Growth - The company closed $571 million in new loan commitments in Q4, resulting in a net increase of $443.8 million in the loan portfolio [3][7] - The average loan size for multifamily lending was between $40 million and $50 million, with spreads ranging from 250 to 325 basis points [2] - The company completed a $1 billion securitization (ACRES 2026-FL4) with 86.5% leverage and a weighted average debt spread of 1.68% [1][7] Financial Performance - GAAP net loss for Q4 was $3 million, or $0.43 per share, while net interest income increased to $10.7 million, up $2.3 million from the previous quarter [13] - The GAAP book value per share rose to $30.01, up from $29.63 at the end of the previous quarter, with $10 million used for share repurchases at a 33% discount [5][16] Credit Quality and Risk Management - The weighted average risk rating improved to 2.7, with loans rated four or five declining to 17% of the portfolio [6][8] - The total allowance for credit losses was $20.4 million, representing 1.11% of the $1.8 billion loan portfolio [15][17] 2026 Outlook - The company anticipates net portfolio growth of $500 million to $700 million in 2026, with a focus on multifamily lending and a potential mix into other asset classes [18] - Management indicated that the company is positioned to resume dividend payments to common shareholders while maintaining leverage within comfort levels [19]

Core Insights - The company reported a net increase in its loan portfolio of $443,800,000 for Q4 2025, with new loan commitments totaling $571,000,000 and loan payoffs of $127,200,000 [5] - The weighted average spread on newly originated loans was 2.83%, while the overall spread on the commercial real estate loan portfolio is now 3.35% over 1-month Term SOFR rates [5][6] - The company has successfully managed its portfolio, reducing the number of loans rated 4 or 5 from 13 to 10, and the portion of the portfolio rated 4 or 5 decreased from 32% to 17% [6][7] Loan Operations - The company closed a $1,000,000,000 CRE securitization deal in February 2026 with a leverage of 86.5% and a weighted average debt spread of 1.68% [5] - The portfolio consists of $1,800,000,000 in commercial real estate loans across 53 investments, with a weighted average risk rating of 2.7 [6] Financial Performance - GAAP net loss for Q4 2025 was $3,000,000, or $0.43 per share, which included a net interest income of $10,700,000, an increase of $2,300,000 from the previous quarter [10] - The company recorded a decrease in current expected credit losses (CECL) reserves of $1,300,000, with total allowances for credit losses at $20,400,000, representing 1.11% of the loan portfolio [11] Shareholder Value - The book value per share increased to $30.01 from $29.63, and the company repurchased 493,000 common shares at a 33% discount to book value [12] - The company aims to resume paying dividends to common shareholders, reflecting a commitment to enhancing shareholder value [14] Future Outlook - The company projects net growth in the loan portfolio of $500,000,000 to $700,000,000 in 2026, indicating a strong pipeline for future loan originations [22] - The management team is focused on maintaining a leverage ratio below four turns, ensuring a balanced approach to capital deployment [31]

Financial Data and Key Metrics Changes - GAAP net loss allocable to common shares in Q4 2025 was $3 million, or $0.43 per share, which included a net interest income of $10.7 million, an increase of $2.3 million from the prior quarter [11] - The total allowance for credit losses at December 31 was $20.4 million, representing 1.11% of the $1.8 billion loan portfolio at par [12] - GAAP book value per share increased to $30.01 on December 31 from $29.63 on September 30 [13] Business Line Data and Key Metrics Changes - New loan commitments in Q4 2025 totaled $571 million, resulting in a net increase to the loan portfolio of $443.8 million [5] - The weighted average spread on newly originated loans was 2.83%, with the portfolio's weighted average spread now at 3.35% over one-month term SOFR rates [6] - The number of loans rated four or five decreased to 10 from 13 at the end of Q3, with the portion of the CRE loan portfolio rated four or five dropping to 17% from 32% [7] Market Data and Key Metrics Changes - The company ended the quarter with $1.8 billion of commercial real estate loans across 53 individual investments [7] - Available liquidity at December 31 was $108 million, comprising $84 million of unrestricted cash and $24 million of projected financing available on unlevered assets [14] Company Strategy and Development Direction - The company remains focused on investing in high-quality commercial real estate loans, actively managing the portfolio, and growing earnings for shareholders [5] - The management team is optimistic about the opportunities in the asset class and competitive landscape, aiming to deploy capital through careful underwriting [15] Management's Comments on Operating Environment and Future Outlook - Management expects a net growth in the portfolio of $500 million to $700 million in 2026, indicating a strong pipeline for loan originations [27] - The company anticipates healthy repayments in 2026, projecting about $500 million of repayments, which will help reduce older vintage assets in the portfolio [41] Other Important Information - The company sold an REO asset in Austin, Texas, resulting in an earnings available for distribution gain of $1.3 million [9] - A charge-off of a legacy $4.7 million mezzanine loan was recognized, which was fully reserved for in 2022 [12] Q&A Session Summary Question: Could you touch a little bit more on the loans that you guys completed this quarter? - The portfolio was mostly multi-family, with average loan sizes of $40 million to $50 million and spreads ranging between 250 and 325 [18] Question: How long is the reinvestment period? - The reinvestment period is 30 months [19] Question: Has there been any change in spreads for year-to-date originations? - In 2026, originations have mostly been multifamily, with spreads around 2.83%, and there is an expectation of a mix shift to other asset classes [37][39] Question: What is the comfort level regarding leverage to common equity? - The company is comfortable with leverage inside of four turns and does not expect to exceed that [43]

Financial Data and Key Metrics Changes - GAAP net loss allocable to common shares in Q4 2025 was $3 million, or $0.43 per share, which included a net interest income of $10.7 million, an increase of $2.3 million from the prior quarter [11] - The total allowance for credit losses at December 31 was $20.4 million, representing 1.11% of the $1.8 billion loan portfolio at par [12] - GAAP book value per share increased to $30.01 on December 31 from $29.63 on September 30 [13] Business Line Data and Key Metrics Changes - In Q4 2025, the company closed new commitments of $571 million, resulting in a net increase to the loan portfolio of $443.8 million [5] - The weighted average spread on newly originated loans was 2.83%, with the portfolio's weighted average spread now at 3.35% over one-month term SOFR rates [6] - The company ended the quarter with $1.8 billion of commercial real estate loans across 53 individual investments, with a weighted average risk rating decreasing from 3.0 to 2.7 [7] Market Data and Key Metrics Changes - The company reported a decrease in current expected credit losses (CECL) reserves of $1.3 million compared to a decrease of $4 million in the previous quarter, driven by loan payoffs and improvements in credit risk [12] - The company expects net growth in the portfolio of $500 million to $700 million in 2026, indicating a strong outlook for deployment [27] Company Strategy and Development Direction - The company remains focused on investing in high-quality commercial real estate loans and actively managing the portfolio to grow earnings for shareholders [5] - The management team is optimistic about the opportunities in the asset class and competitive landscape, aiming to resume paying dividends to common shareholders [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued execution of their plan to drive shareholder value, highlighting strong loan originations and improved credit quality [15] - The company anticipates a healthy repayment activity in 2026, projecting about $500 million of repayments, which will help reduce older vintage assets in the portfolio [41] Other Important Information - The company sold an REO asset in Austin, Texas, resulting in an earnings available for distribution (EAD) gain of $1.3 million [9] - The company has incurred minimal realized losses on almost $8 billion of invested capital since inception [9] Q&A Session Summary Question: Could you touch a little bit more on the loans that you guys completed this quarter? - The portfolio was mostly multi-family, with average loan sizes of $40 million to $50 million and spreads ranging between 250 and 325 [18] Question: How long is the reinvestment period? - The reinvestment period is 30 months [19] Question: What is the plan for equity investments? - One smaller land deal is under LOI for sale, and another asset is currently on the market [20][21] Question: Has there been any change in spreads for year-to-date originations? - In 2026, originations have mostly been multifamily, with spreads around 2.83%, and there is an expectation of a mix shift to other asset classes [37][39] Question: What is the comfort level regarding leverage to common equity? - The company is comfortable with leverage inside of four turns and does not expect to exceed that [43][44]

Financial Data and Key Metrics Changes - GAAP net loss allocable to common shares in Q4 2025 was $3 million, or $0.43 per share, which included a net interest income of $10.7 million, an increase of $2.3 million from the prior quarter [12] - The total allowance for credit losses at December 31 was $20.4 million, representing 1.11% of the $1.8 billion loan portfolio at par [13] - GAAP book value per share increased to $30.01 on December 31 from $29.63 on September 30 [14] Business Line Data and Key Metrics Changes - In Q4 2025, the company closed new commitments of $571 million, resulting in a net increase to the loan portfolio of $443.8 million [5] - The weighted average spread on newly originated loans was 2.83%, with the portfolio's weighted average spread now at 3.35% over one-month term SOFR rates [6] - The weighted average risk rating of the loan portfolio decreased to 2.7 from 3.0 at the end of Q3 2025, with the portion of loans rated four or five dropping to 17% from 32% [7] Market Data and Key Metrics Changes - The company ended the quarter with $1.8 billion of commercial real estate loans across 53 individual investments [6] - The company expects net growth in the portfolio of $500 million to $700 million in 2026, indicating a strong outlook for loan originations [27] Company Strategy and Development Direction - The company remains focused on investing in high-quality commercial real estate loans and actively managing the portfolio to grow earnings for shareholders [5] - The management team is optimistic about the opportunities in the asset class and competitive landscape, aiming to deploy capital through careful underwriting [17] Management's Comments on Operating Environment and Future Outlook - Management noted a decrease in current expected credit losses, driven by loan payoffs and improvements in credit risk models, despite a general decline in projected macroeconomic factors [13] - The company is positioned to resume paying dividends to common shareholders, reflecting confidence in its financial health and operational strategy [16] Other Important Information - The company sold an REO asset in Austin, Texas, resulting in an earnings available for distribution gain of $1.3 million [10] - The company has incurred minimal realized losses on almost $8 billion of invested capital since inception [10] Q&A Session Summary Question: Could you touch a little bit more on the loans that you guys completed this quarter? - The majority of the loans were multi-family, with average loan sizes around $40 million to $50 million, and spreads ranging between 250 and 325 [19] Question: How long is the reinvestment period? - The reinvestment period is 30 months [20] Question: What is the plan for equity investments? - The company expects to exit from one of the smaller land deals currently under LOI and is open to offers on another asset [21] Question: What caused the jump in non-controlling interest? - The increase was due to the sale of a position in a previously issued financing arrangement with JP Morgan [22] Question: Could we see the same pace of deployment in the near term? - The company expects a significant amount of deployment in the first quarter of 2026, projecting net growth in the portfolio of $500 million to $700 million for the year [27] Question: Will future gains on REO be fully taxed? - The company still has remaining net operating losses available, which should protect against taxation on future gains [28] Question: Was the $3.4 million of realized losses on core activities just the mezzanine loan write-off? - Yes, a significant portion was related to the mezzanine loan write-off, with additional improvements in net credit contributing to the overall losses [31]

FOURTH QUARTER 2025 EARNINGS PRESENTATION March 4, 2026 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, assumptions and expectations. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are kno ...

Company Overview - ACRES Commercial Realty Corp. reported its operating results for the quarter and year ended December 31, 2025, with detailed presentations available on its website[7]. - The company is listed on the New York Stock Exchange under the symbol ACR, with additional preferred stock classes also traded[5]. Financial Results - The financial results include key metrics that will be detailed in the press release and earnings presentation, which are referenced as Exhibits 99.1 and 99.2[10].

Core Viewpoint - ACRES Commercial Realty Corp. reported a GAAP net loss of $3.0 million or $(0.43) per diluted share for the fourth quarter of 2025, despite strong origination activity and plans for future growth [1][1][1] Financial Performance - For the quarter ended December 31, 2025, the company experienced a net loss of $3.0 million, translating to $(0.43) per diluted share [1][1][1] - The origination team added $571 million in high-quality loans to the portfolio during the fourth quarter [1][1][1] Business Strategy - The company plans to continue growing its portfolio and earnings by providing loans to top-tier sponsors in prime U.S. markets [1][1][1] - ACR successfully closed a $1 billion Commercial Real Estate Collateralized Loan Obligation (CRE CLO) in February 2026, indicating ongoing momentum in loan origination [1][1][1] Asset Management - The asset management team has reduced the number of watchlist assets to a few, all of which have plans in place to achieve positive outcomes [1][1][1]