Good day ladies and gentlemen and welcome to the First-Quarter 2022 ACRES Commercial Realty Corp Earnings Conference Call. Currently, all participants are in a listen-only mode. Later we will conduct a question and answer session with instructions to follow at that time. If anyone requires assistance during the conference, [Operator Instructions]. As a reminder, this call is being recorded. I would now like to introduce your host for today's conference. Kyle Brengel, Vice President. You may begin.

Good afternoon and thank you for joining our call. 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 word beliefs, 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 forward-looking statements. These risks and uncertainties are discussed in the company's reports filed with the SEC, including its reports on Forms 8-K, 10-Q and 10-K. And in particular, the Risk Factors section of its Form, 10-K. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. 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 Fogel, 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 the company's 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 first 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 $99.9 million of new loan commitments in the first quarter, comprising three multi-family loans, loan payoffs during this period were $92.3 million, comprising eight loans with weighted average rates of 5.33%. This net activity resulted in relatively flat production for Q1. The newly originated loans pay coupon interest at the one-month benchmark rates, which comprise LIBOR and sulfur, plus a weighted average spread of 3.37%. The weighted average spread of the floating rate loans in the company is $1.9 billion commercial real estate loan portfolio remained flat at 3.67% over the one-month benchmark rates. The weighted average benchmark rate is 1.1% as of April 30th, 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 grow the loan portfolio net of repayments to have a loan book of at least $2.3 billion by year-end 2022. Additionally, our team completed $51.6 million of initial equity investments on two properties immediately following quarter-end, comprising a 388 key full-service operating hotel in Appleton, Wisconsin, and a student housing complex with approved plans to develop at nearby parcel into a 516 bed student housing property in Tallahassee, Florida. We expect these newest equity investments to deliver untaxed capital gains in the future using the company's…

Thank you, and good afternoon. GAAP net loss allocable to common shares in the first quarter was $2.8 million or $0.30 per share, compared to GAAP net income of $7.3 million or $0.76 per share in the fourth quarter. In the first quarter we recorded a reversal of general loan reserves of $1.8 million, compared to a $5.8 million reversal in the CECL provision in the fourth quarter. In addition, we charged off $2.3 million related to the settlement of a legacy loan which had been fully reserved. Reversal of general reserves reflects several factors. One, we have seen continued improvements in property level operations supported by a generally positive outlook in the macroeconomic environment. Two, our loan book is of newer vintage with over 70% originated within the last 12 months. Rate our loan portfolio is 73% multi-family, which has the lowest historical losses of all asset classes for us, and those evaluated in the model that we used to support the CECL reserve. The impact of the CECL estimate, and the charge-offs resulted in a total allowance for credit losses on March 31st of $4.7 million, which now represents 0.25% of the $1.9 billion loan portfolio at par. Net interest income was $7.8 million or $0.85 per share in the first quarter as compared to $11.9 million or a $1.25 per share in the fourth quarter. As a reminder, the fourth quarter results included $3.3 million or $0.35 per share of income related to loan payoffs. In addition, we saw loans with higher coupons and base rate floors paying off as compared to newly originated loans. Other income includes a loan recovery of $630,000 when a middle-market loan in a business line that was disposed of several years ago. First quarter also included non-recurring charges of approximately $500,000…

Thank you, David we approached the quarter with caution in anticipation of some spread widening and while not dramatic, we have seen spreads widen across the landscape and we're looking forward to deploying capital into the current quarter and in the back half of the year. The portfolio remains sound with nearly all the watchlist names fully resolved and the company has ample liquidity to reach our target of being fully invested later this year. The ACRES platform continues to present interesting opportunities to evaluate, and our sponsor clients want to do more transactions with us. Our mission is to deliver shareholders value over the long term. We are focused on maximizing earnings, investing in high-quality assets, and strategically returning capital through share repurchases and dividends over time. This concludes our opening and prepared remarks and I will turn the call back to the Operator for questions.

Thank you. [Operator Instructions]. And there appears to be no questions at this time -- actually we just got a question from Rick Scibetta with Austin ventures. Please proceed with your question.

This is Rick Pleczko. I go back with this company 10-years, not ACRES, but back to XEN and RSO I just watched the steady decline and I'm not seeing any progress, but I'm just too stubborn because I actually was sold on this and sold a lot of people on the common stock here. I'm just trying to figure out why is it so anemic on the trading? When we're looking at -- what, the an average of 20,000 shares of -- Dave, that's almost like not even being there. Does anybody got a comment on that?

Hey, Rick, this is Andrew Fentress and I don't have a good answer for you, why there's the volume the trades on the exchange every day. As we've indicated on our balance sheet, you can see there's just under 10 million shares outstanding. But I can't tell you as to why the volume does what it does.

Any positive thoughts for the future? On dividends for the common?

We're focused on returning capital to shareholders and whether or not that's coming through share repurchases where the company has an active share repurchase program in the market each day, and the number of shares were reported in the quarter. And so that's the best way that we can return capital to shareholders right now, is by repurchasing shares at the discount they're trading at and increasing book value, and then when we get through the NOL's, the plan is to turn the dividend back on.

Okay.

Thank you. [Operator Instructions]. There are no further questions at this time.

Thank you everyone for joining the call. As always, our line is open. If anybody has any questions they'd like to talk to us about please reach out, and we look forward to speaking with everybody again soon.

That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.