ACRES Commercial Realty Corp 8-K, filed Mar 4, 2020

ACRES Commercial Realty Corp. (ACR)

8-K 2020-03-04 For: 2020-03-03

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Added on April 07, 2026

About this 8-K

ACRES Commercial Realty Corp filed this 8-K on March 4, 2020, reporting on events of March 3, 2020.

Items reported

Item 2.02: Financial results
Item 9.01: Financial statements and exhibits

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Maryland	1-32733	20-2287134
(State or other jurisdiction of	(Commission File Number)	(IRS Employer Identification No.)
incorporation)

717 Fifth Avenue
New York, NY		10022
(Address of principal executive offices)		(Zip Code)

Registrant's telephone number, including area code: 212-621-3210

N/A
(Former name or former address, if changed since last report)

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value	XAN	New York Stock Exchange
8.625% Fixed-to-Floating Series C Cumulative Redeemable Preferred Stock	XANPrC	New York Stock Exchange


Exhibit No.		Description
99.1		Press Release

		EXANTAS CAPITAL CORP.

Dated:	March 3, 2020
		By:	/s/ David J. Bryant
			David J. Bryant
			Chief Financial Officer

	Three Months Ended December 31, 2019			Year Ended December 31, 2019			Three Months Ended December 31, 2018			Year Ended December 31, 2018
New CRE loan commitments	$	203.0		$	722.5		$	274.9		$	842.4
New CRE preferred equity investments		—			8.7			—			19.2
Total CRE loan commitments and investments		203.0			731.2			274.9			861.6
Payoffs and paydowns ⁽¹⁾⁽²⁾		(182.0	)		(643.2	)		(203.1	)		(575.6	)
Previous commitments funded		10.8			43.0			13.3			51.4
New unfunded loan commitments and investments		(13.6	)		(53.1	)		(30.5	)		(81.0	)
Net CRE loans funded		18.2			77.9			54.6			256.4

Acquired CRE loans (committed balance)		—			210.8			—			—
Payoffs and paydowns ⁽¹⁾		(22.8	)		(39.6	)		—			—
Previous commitments funded		—			0.2			—			—
Acquired unfunded loan commitments		—			(14.0	)		—			—
Net CRE loans (repaid) acquired		(22.8	)		157.4			—			—

Net CRE loans (repaid) funded and acquired	$	(4.6	)	$	235.3		$	54.6		$	256.4

Weighted average one-month LIBOR floor on new originations and acquisitions ⁽³⁾		1.80	%		2.17	%		2.09	%		1.86	%
Weighted average spread above one-month LIBOR ⁽³⁾		2.89	%		3.31	%		3.06	%		3.39	%
Weighted average unlevered yield, including amortization of origination fees and acquisition costs		5.04	%		5.72	%		5.72	%		5.83	%

	Total Amount			Per Share Amount
Common stock book value at September 30, 2019 ⁽¹⁾	$	444,070		$	14.12
Net income allocable to common shares		3,798			0.12
Change in other comprehensive income:
Available-for-sale securities		(1,139	)		(0.04	)
Derivatives		1,804			0.06
Common stock dividends		(8,651	)		(0.28	)
Common stock dividends on unvested shares		(116	)		—
Accretion from additional shares outstanding at December 31, 2019 ⁽²⁾		676			0.02
Total net decrease		(3,628	)		(0.12	)
Common stock book value at December 31, 2019 ⁽¹⁾⁽³⁾	$	440,442		$	14.00

Reconciling items in arriving at economic book value at December 31, 2019:
Non-cash convertible senior notes’ unamortized discounts:
4.50% Convertible Senior Notes		(8,133	)		(0.26	)
8.00% Convertible Senior Notes		(6	)		—
Series C Preferred Stock redemption value in excess of carrying value		(4,045	)		(0.13	)
Economic book value at December 31, 2019	$	428,258		$	13.61

At December 31, 2019	Amortized Cost		Net Carrying Amount		Percent of Portfolio			Weighted Average Coupon
Core Assets:
CRE whole loans ⁽¹⁾⁽²⁾	$	1,749,093	$	1,747,633		75.10	%	5.52%
CRE mezzanine loan and preferred equity investments ⁽²⁾		30,848		30,848		1.33	%	11.18%
CMBS, fixed-rate⁽³⁾		132,235		138,039		5.93	%	4.10%
CMBS, floating-rate⁽³⁾		382,659		382,675		16.44	%	4.39%
Total Core Assets		2,294,835		2,299,195		98.80	%
Non-Core Assets:
Legacy CRE assets ⁽⁴⁾⁽⁵⁾		35,539		28,004		1.20	%	1.47%

Total Core and Non-Core Assets	$	2,330,374	$	2,327,199		100.00	%

	December 31,
	2019			2018
	(unaudited)
ASSETS⁽¹⁾
Cash and cash equivalents	$	79,958		$	82,816
Restricted cash		14,476			12,658
Accrued interest receivable		8,042			8,198
CRE loans, net of allowances of $1,460 and $1,401		1,789,985			1,551,967
Investment securities available-for-sale		520,714			418,998
Principal paydowns receivable		19,517			32,083
Investments in unconsolidated entities		1,548			1,548
Derivatives, at fair value		30			985
Other assets		3,290			4,015
Assets held for sale		16,766			17,645
Total assets	$	2,454,326		$	2,130,913
LIABILITIES⁽²⁾
Accounts payable and other liabilities	$	3,408		$	7,550
Management fee payable		701			938
Accrued interest payable		4,408			4,224
Borrowings		1,872,577			1,554,223
Distributions payable		10,492			7,265
Derivatives, at fair value		4,558			1,043
Accrued tax liability		38			31
Liabilities held for sale		1,746			1,820
Total liabilities		1,897,928			1,577,094
STOCKHOLDERS’ EQUITY
Preferred stock, par value $0.001: 10,000,000 shares authorized 8.625% Fixed-to-Floating Series C Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share; 4,800,000 and 4,800,000 shares issued and outstanding		5			5
Common stock, par value $0.001: 125,000,000 shares authorized; 31,880,594 and 31,657,499 shares issued and outstanding (including 420,962 and 422,671 unvested restricted shares)		32			32
Additional paid-in capital		1,085,041			1,082,677
Accumulated other comprehensive income (loss)		1,821			(3,057	)
Distributions in excess of earnings		(530,501	)		(525,838	)
Total stockholders’ equity		556,398			553,819
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,454,326		$	2,130,913

	For the Three Months Ended						For the Year Ended
	December 31,						December 31,
	2019			2018			2019			2018
	(unaudited)			(unaudited)			(unaudited)
REVENUES
Interest income:
CRE loans	$	27,771		$	29,486		$	118,060		$	103,800
Securities		6,628			5,722			26,190			18,600
Other		125			118			636			379
Total interest income		34,524			35,326			144,886			122,779
Interest expense		20,149			19,751			83,837			67,616
Net interest income		14,375			15,575			61,049			55,163
Other revenue		24			38			101			120
Total revenues		14,399			15,613			61,150			55,283
OPERATING EXPENSES
Management fees		2,092			2,812			8,954			11,250
Equity compensation		565			334			2,212			2,717
General and administrative		3,234			2,723			10,392			10,666
Depreciation and amortization		8			9			47			77
Impairment losses		—			934			—			934
(Recovery of) provision for loan losses, net		—			(335	)		58			(1,595	)
Total operating expenses		5,899			6,477			21,663			24,049

		8,500			9,136			39,487			31,234
OTHER INCOME (EXPENSE)
Equity in (losses) earnings of unconsolidated entities		—			(14	)		—			217
Net realized and unrealized gain on investment securities available-for-sale and loans and derivatives		—			70			4			639
Net realized and unrealized gain on investment securities, trading		—			—			—			53
Fair value adjustments on financial assets held for sale		(3,225	)		(932	)		(4,682	)		(7,176	)
Other income		1,149			1,422			1,408			1,996
Total other (expense) income		(2,076	)		546			(3,270	)		(4,271	)

INCOME FROM CONTINUING OPERATIONS BEFORE TAXES		6,424			9,682			36,217			26,963
Income tax benefit		—			312			—			343
NET INCOME FROM CONTINUING OPERATIONS		6,424			9,994			36,217			27,306
NET (LOSS) INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX		(39	)		(40	)		(251	)		121
NET INCOME		6,385			9,954			35,966			27,427
Net income allocated to preferred shares		(2,587	)		(2,587	)		(10,350	)		(12,972	)
Consideration paid in excess of carrying value of preferred shares		—			—			—			(7,482	)
NET INCOME ALLOCABLE TO COMMON SHARES	$	3,798		$	7,367		$	25,616		$	6,973
NET INCOME PER COMMON SHARE - BASIC:
CONTINUING OPERATIONS	$	0.12		$	0.24		$	0.82		$	0.22
DISCONTINUED OPERATIONS		—			—			—			—
TOTAL NET INCOME PER COMMON SHARE - BASIC	$	0.12		$	0.24		$	0.82		$	0.22
NET INCOME PER COMMON SHARE - DILUTED:
CONTINUING OPERATIONS	$	0.12		$	0.23		$	0.81		$	0.22
DISCONTINUED OPERATIONS		—			—			—			—
TOTAL NET INCOME PER COMMON SHARE - DILUTED	$	0.12		$	0.23		$	0.81		$	0.22
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC		31,456,377			31,234,840			31,430,113			31,198,319
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED		31,778,121			31,545,173			31,670,356			31,383,102

	Cash Distributions For the Year Ended				Overcollateralization Cushion ⁽¹⁾
Name	December 31, 2019		December 31, 2018		At December 31, 2019		At the Initial Measurement Date		End of Designated Principal Reinvestment Period
XAN 2018-RSO6 ⁽²⁾	$	17,959	$	8,323	$	71,186	$	25,731	December 2020
XAN 2019-RSO7 ⁽²⁾	$	10,672	$	—	$	34,356	$	34,341	April 2022
Apidos CDO I, Ltd. ⁽³⁾	$	708	$	—	N/A		$	17,136	N/A
Apidos CDO III, Ltd. ⁽³⁾	$	—	$	618	N/A		$	11,269	N/A

	Cash Distributions For the Year Ended				Liquidation Details
Name	December 31, 2019		December 31, 2018		Liquidation Date	Remaining Assets at the Liquidation Date ⁽¹⁾
RCC 2015-CRE3	$	—	$	3,529	August 2018	$	80,632
RCC 2015-CRE4	$	—	$	4,487	July 2018	$	97,825
RCC 2017-CRE5	$	12,551	$	22,843	July 2019	$	112,753
Whitney CLO I, Ltd. ⁽²⁾	$	68	$	—	January 2019	$	—

	For the Three Months Ended
	December 31, 2019			September 30, 2019			June 30, 2019			March 31, 2019			December 31, 2018
New CRE loan commitments	$	203.0		$	105.1		$	243.4		$	171.0		$	274.9
New CRE preferred equity investment		—			—			8.7			—			—
Total CRE loan commitments and investments		203.0			105.1			252.1			171.0			274.9
Payoffs and paydowns ⁽¹⁾		(182.0	)		(256.8	)		(136.9	)		(67.4	)		(203.1	)
Previous commitments funded		10.8			7.9			11.3			13.0			13.3
New unfunded loan commitments and investments		(13.6	)		(12.0	)		(21.3	)		(6.3	)		(30.5	)
Net CRE loans funded (repaid)		18.2			(155.8	)		105.2			110.3			54.6

Acquired CRE loans (committed balance)		—			—			210.8			—			—
Payoffs and paydowns		(22.8	)		(0.1	)		(16.7	)		—			—
Previous commitments funded		—			0.2			—			—			—
Acquired unfunded loan commitments		—			—			(14.0	)		—			—
Net CRE loans (repaid) acquired		(22.8	)		0.1			180.1			—			—

Net CRE loans (repaid) funded and acquired	$	(4.6	)	$	(155.7	)	$	285.3		$	110.3		$	54.6

	At December 31, 2019			At September 30, 2019			At June 30, 2019			At March 31, 2019			At December 31, 2018
Common stock book value	$	14.00		$	14.12		$	14.06		$	14.06		$	14.02
Non-cash convertible senior notes’ unamortized discounts		(0.26	)		(0.28	)		(0.30	)		(0.33	)		(0.35	)
Preferred stock redemption value in excess of carrying value		(0.13	)		(0.13	)		(0.13	)		(0.13	)		(0.13	)
Economic book value	$	13.61		$	13.71		$	13.63		$	13.60		$	13.54

Loan type:
Whole loans	98.3	%
Preferred equity investments	1.4	%
Mezzanine loan	0.3	%
Total	100.0	%

Collateral type:
Multifamily	57.5	%
Office	13.4	%
Hotel	10.5	%
Retail	7.9	%
Self-Storage	6.5	%
Manufactured Housing	3.5	%
Industrial	0.7	%
Total	100.0	%

Collateral by NCREIF U.S. region:
Mountain ⁽¹⁾	19.5	%
Southwest ⁽²⁾	19.4	%
Southeast⁽³⁾	17.6	%
Pacific ⁽⁴⁾	13.9	%
Mid Atlantic ⁽⁵⁾	11.9	%
Northeast ⁽⁶⁾	11.8	%
East North Central	5.3	%
West North Central	0.6	%
Total	100.0	%