ACRES Commercial Realty Corp.

Good afternoon and welcome to ACRED Commercial Reality Corp. Second quarter 2022 earnings conference call. All participants will be in the listen-only mode. Should you need assistance, please sign up conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a push-down box. To withdraw your question, please press star then two. Please note This event is being recorded. I would now like to turn the conference over to Kyle Grengel. Please go ahead.

Good afternoon, and thank you for joining our call. I would like to highlight that we have posted the Q2 2022 shareholder presentation to our website. This presentation contains summary and detailed information about the quarterly and year-to-date results of the company. Before we begin, I want to remind everyone that certain statements made during this call are not based on historical information and may constitute forward-looking statements. When used in this conference call, the words believes, anticipates, expects, and similar expressions are intended to identify forward-looking statements. Although the company believes that these forward-looking statements are based on reasonable assumptions, such statements are based on management's current expectations and beliefs and are subject to several trends, risks, and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. These risks and uncertainties are discussed in the company's reports filed with the SEC, including its reports on Forms 8K, 10Q, and 10K, and in particular, the risk factor section of its Form 10K. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date you're of. the company undertakes no obligation to update any of these forward-looking statements. Furthermore, certain non-GAAP financial measures may be discussed on this conference call. Our presentation of this information is not intended to be considered in isolation or as a substitute to the financial information presented in accordance with GAAP. Reconciliations of non-GAAP financial measures to the most comparable measures prepared in accordance with generally accepted accounting principles are contained in the earnings presentation for the past quarter. With me on the call today are Mark Vogel, President and CEO, and Dave Bryant, ACR's CFO. Also available for Q&A is Andrew Fentress, Chairman of ACR. I will now turn the call over to Mark.

Good afternoon, everyone, and thank you for joining our call. Today, I will provide an overview of our loan originations, real estate investments, and the health of the investment portfolio. while Dave Bryant will discuss the financial statements, liquidity condition, book value, and operating results for the second quarter and provide an update on 2022 projected results. Of course, we look forward to your questions at the end of our prepared remarks. The Acres Origination Team delivered $311.7 million of new loan commitments in the second quarter, comprising eight multifamily loans and one office loan. Loan payoffs during the period were $109.2 million, and net unfunded commitments during the quarter were $23.2 million, producing a net increase of $179.3 million. The newly originated loans pay coupon interest at the one-month benchmark rates, which comprise SOFR plus a weighted average spread of 3.79%. The weighted average spread of the floating rate loans in our $2.1 billion commercial real estate loan portfolio increased to 3.61% over the one-month benchmark rates. The weighted average benchmark rate is 2.32% as of July 26, 2022. We observed spread widening in the period and are mindful of further potential widening as we deploy capital on our way to getting the company fully invested. We plan to maintain a loan book balance of $2 billion to $2.3 billion through 2022. As we have discussed previously, the company has five equity investments. We do not plan on increasing this amount. The portfolio has continued to perform, demonstrating sound and consistent underwriting and proactive asset management. We ended the quarter with $2.1 billion of commercial real estate loans across 89 individual investments, of which only three, comprising 2% of the portfolio, were delinquent. As of June 30th, there were seven watchlist loans representing 6.4% of the portfolio. In summary, the Acres team is pleased with the quality of the investment portfolio, including investments in real estate, along with the improved balance sheet profile and the prospects of new originations and capital appreciation going forward. We will continue to execute on our business plan by originating high-quality investments, actively managing the portfolio, and continuing to focus on growing earnings and book value for our shareholders. We will now have ACR CFO Dave Bryant discuss the financial statements and operating results during the second quarter of 2022.