Acres Commercial Realty Corp (ACR) 2024 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the third-quarter 2024 Acres Commercial Realty Corp earnings conference call. (Operator Instructions) As a reminder, this call is being recorded.

女士、先生們，大家好，歡迎參加 2024 年第三季 Acres Commercial Realty Corp 收益電話會議。（操作員指示）提醒一下，此通話正在被錄音。

I would now like to introduce your host for today's conference, Kyle Brengel, Vice President, Operations. You may begin.

現在，我想介紹今天會議的主持人、營運副總裁 Kyle Brengel。你可以開始了。

Good morning and thank you for joining our call. I would like to highlight that we have posted the third-quarter 2024 earnings presentation to our website. This presentation contains summary and detailed information about the quarterly results of the company.

早安，感謝您參加我們的電話會議。我想強調的是，我們已經將 2024 年第三季的收益報告發佈到了我們的網站上。本簡報包含有關公司季度業績的摘要和詳細資訊。

Before we begin, I want to remind everyone that certain statements made during the call are not based on historical information and may constitute forward-looking statements. When using this conference call, the words believes, anticipates, expects, and similar expressions are intended to identify forward-looking statements.

在我們開始之前，我想提醒大家，電話會議中發表的某些陳述並非基於歷史信息，可能構成前瞻性陳述。在使用本次電話會議時，相信、預期、期望等字詞和類似的表達旨在識別前瞻性陳述。

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 the actual results to differ materially from those contained in the forward-looking statements.

儘管公司認為這些前瞻性陳述是基於合理的假設，但這些陳述是基於管理層當前的預期和信念，並受到多種趨勢、風險和不確定性的影響，這些趨勢、風險和不確定性可能導致實際結果與前瞻性陳述中的結果有重大差異。

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 in particular, the Risk Factor 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.

這些風險和不確定性在公司向美國證券交易委員會提交的報告中進行了討論，包括 8-K 表、10-Q 表報告，特別是 10-K 表的風險因素部分。請聽眾不要過度依賴這些前瞻性的陳述，因為這些陳述僅代表截至本文發布之日的觀點。該公司不承擔更新任何這些前瞻性陳述的義務。

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.

此外，本次電話會議可能會討論某些非公認會計準則財務指標。我們呈現的這些資訊並非旨在單獨考慮或取代根據 GAAP 呈現的財務資訊。上一季的收益報告包含非 GAAP 財務指標與根據公認會計原則編制的最具可比性的指標的對帳表。

With me on the call today are Mark Fogel, President and CEO; and Eldron Blackwell, ACR's CFO. Also available for Q&A is Andrew Fentress, Chairman of ACR. I will now turn the call over to Mark.

今天與我一起參加電話會議的還有總裁兼執行長馬克‧福格爾 (Mark Fogel)；以及 ACR 的財務長 Eldron Blackwell。ACR 主席 Andrew Fentress 也可以參加問答。現在我將電話轉給馬克。

Good morning, everyone, and thank you for joining our call. Today, I will provide an overview of our loan operations, real estate investments, and the health of the investment portfolio, while Eldron Blackwell will discuss the financial statements, liquidity condition, book value, and operating results for the third-quarter 2024. Of course, we look forward to your questions at the end of our prepared remarks.

大家早安，感謝大家參加我們的電話會議。今天，我將概述我們的貸款業務、房地產投資和投資組合的健康狀況，而 Eldron Blackwell 將討論 2024 年第三季的財務報表、流動性狀況、帳面價值和經營業績。當然，我們期待您在我們準備好的演講結束時提出問題。

The Acres team continues to execute on our business plan by developing a pipeline of high-quality investments, actively managing the portfolio, and continuing to focus on growing earnings and book value for our shareholders. Loan payoffs during the period were $118.1 million, foreclosures were $23.7 million, and funded commitments during the quarter was $7.4 million, producing a net decrease to the loan portfolio of $134.4 million.

Acres 團隊繼續執行我們的業務計劃，開發一系列高品質的投資，積極管理投資組合，並繼續專注於為股東增加收益和帳面價值。本期間貸款償還額為 1.181 億美元，止贖額為 2,370 萬美元，本季融資承諾額為 740 萬美元，導致貸款組合淨減少額為 1.344 億美元。

The weighted average spread of the floating rate loans in our $1.6 billion commercial real estate loan portfolio is now 3.73% over one-month term SOFR rates. Portfolio generally continue to perform, demonstrating sound and consistent underwriting and proactive asset management. The company ended the quarter with $1.6 billion of commercial real estate loans across 56 individual investments. At September 30, there were 11 loans rated 4 or 5 which represented 23% of the par value of our portfolio, an increase of 2% as compared to the second-quarter 2024. And our weighted average risk rating was 2.7 at both June 30 and September 30.

我們 16 億美元商業房地產貸款組合中的浮動利率貸款的加權平均利差目前為一個月期 SOFR 利率的 3.73%。投資組合整體持續表現良好，展現出穩健、一致的核保和積極主動的資產管理。截至本季末，該公司透過 56 個個人投資獲得了 16 億美元的商業房地產貸款。截至 9 月 30 日，共有 11 筆貸款評級為 4 或 5，占我們投資組合票面價值的 23%，與 2024 年第二季相比增加了 2%。6 月 30 日和 9 月 30 日，我們的加權平均風險評級均為 2.7。

We continue to manage several investments in real estate that we expect to monetize at gains in the future. These anticipated gains will be offset by deferred tax assets, and we expect to retain the equity and reinvest potential gains into our loan portfolio.

我們繼續管理幾項房地產投資，預計未來將能夠實現盈利。這些預期收益將被遞延稅務資產抵消，我們預計保留股權並將潛在收益再投資到我們的貸款組合中。

Our student housing development near Florida State University opened in August at 95% occupancy, and we initiated a marketing effort in September to explore a sale of the asset. We will provide updates in future quarters on the monetization of this asset.

我們在佛羅裡達州立大學附近的學生宿舍開發計畫於 8 月開放，入住率為 95%，我們於 9 月啟動了行銷工作，探討出售該資產。我們將在未來幾季提供有關該資產貨幣化的最新情況。

During the period, we foreclosed on two loan assets. One asset is an office property in Austin, Texas. Upon conversion, we recorded a $2.8 million unrealized gain based on market offers for the property. The second asset is a $9.3 million multifamily property in Memphis, Tennessee. We are working on a plan to bring this asset to stabilization and exit with a positive outcome.

在此期間，我們取消了兩項貸款資產的贖回權。一項資產是位於德州奧斯汀的一棟辦公大樓。轉換後，我們根據該房產的市場報價記錄了 280 萬美元的未實現收益。第二項資產是位於田納西州孟菲斯的一處價值 930 萬美元的多戶住宅。我們正在製定計劃，使該資產穩定下來，並取得積極成果。

In summary, the Acres team continues to be focused on the overall quality of the investment portfolio, including investments in real estate, with the goal of improving credit quality and recycling capital into performing assets.

總而言之，Acres 團隊繼續專注於投資組合的整體質量，包括房地產投資，目標是提高信貸品質並將資本回收為良好資產。

We will now have ACR's CFO, Eldron Blackwell, discuss the financial statements and operating results during the third quarter.

我們現在將邀請 ACR 的財務長 Eldron Blackwell 討論第三季的財務報表和經營業績。

Thank you and good morning, everyone. GAAP net income allocable to common shares in the third quarter was $2.8 million or $0.36 per share diluted. GAAP net income for the quarter included $10.5 million in net interest income, a net loss on real estate operations of $665,000 which included depreciation of $1.3 million; and as Mark previously mentioned, a gain of $2.8 million or $0.35 per share resulting from the conversion of a CRE loan to real estate owned.

謝謝大家，早安。第三季分配給普通股的 GAAP 淨利為 280 萬美元，即每股稀釋收益 0.36 美元。本季 GAAP 淨收入包括 1,050 萬美元的淨利息收入，665,000 美元的房地產營運淨損失，其中包括 130 萬美元的折舊；正如馬克之前提到的，將 CRE 貸款轉換為自有房地產可獲得 280 萬美元或每股 0.35 美元的收益。

We saw a decrease to current expected credit losses or CECL reserves of $291,000 or $0.04 per share as compared to an increase in CECL reserves during the second quarter of $1.3 million. The decrease in the general CECL reserves was primarily driven by a decrease in modeled credit risk resulting from payoff modifications and net improvements in property-level performance offset by a minor worsening of macroeconomic factors.

我們發現當前預期信用損失或 CECL 準備金減少了 291,000 美元或每股 0.04 美元，而第二季 CECL 準備金則增加了 130 萬美元。一般 CECL 準備金的減少主要是由於模型信用風險的下降所致，該下降是由償付修改和房地產層面業績的淨改善所抵消，但宏觀經濟因素的輕微惡化所致。

The total allowance for credit losses at September 30 was $34.7 million and represented 2.19% or 219 basis points on our $1.6 billion loan portfolio at par and comprised $4.7 million in specific reserves and $30 million in general credit reserves.

截至 9 月 30 日，信貸損失準備金總額為 3,470 萬美元，占我們 16 億美元貸款組合的 2.19% 或 219 個基點，其中包括 470 萬美元的特定準備金和 3,000 萬美元的一般信貸準備金。

Earnings available for distribution or EAD for the third quarter was $0.24 per share as compared to $0.51 per share for the second quarter. The difference primarily resulted from a $0.14 decrease in real estate operations and a $0.06 decrease in dividends on our preferred stock due to the Series C stock converting from a fixed rate to a floating rate. Lastly, we saw a $0.04 run rate decline in net interest income resulting from net payoffs that occurred during the quarter.

第三季可供分配收益（EAD）為每股 0.24 美元，而第二季為每股 0.51 美元。差異主要由於房地產業務減少 0.14 美元以及由於 C 系列股票從固定利率轉為浮動利率導致優先股股息減少 0.06 美元。最後，我們發現，由於本季發生的淨支出，淨利息收入的運行率下降了 0.04 美元。

GAAP book value per share was $27.92 on September 30 versus $27.20 on June 30. During the third quarter, we used $1.7 million to repurchase 114,000 common shares at an approximate 46% discount to book value and there was approximately $2.3 million remaining on the board-approved program at quarter end. Available liquidity at September 30 was $79 million which comprised $70 million of unrestricted cash and $9.7 million of projected financing available on unlevered assets.

9 月 30 日每股 GAAP 帳面價值為 27.92 美元，而 6 月 30 日為 27.20 美元。第三季度，我們使用 170 萬美元以約 46% 的帳面價值折扣回購了 114,000 股普通股，截至季度末董事會批准的計劃剩餘約 230 萬美元。截至 9 月 30 日可用的流動資金為 7,900 萬美元，其中包括 7,000 萬美元的無限現金和 970 萬美元的無槓桿資產預計融資。

Our GAAP debt-to-equity leverage ratio slightly decreased to 3.3 times at September 30 from 3.6 times at June 30, primarily as a result of payoffs in our two remaining CRE securitizations. And our recourse debt leverage remained consistent at 1.1 times at both September 30 and June 30.

我們的 GAAP 債務權益槓桿率從 6 月 30 日的 3.6 倍略微下降至 9 月 30 日的 3.3 倍，這主要歸因於我們剩餘的兩筆 CRE 證券化的收益。我們的追索債務槓桿在 9 月 30 日和 6 月 30 日均維持在 1.1 倍的穩定水準。

With that, I will turn the call to Andrew Fentress for closing remarks.

最後，我將請安德魯‧芬特雷斯 (Andrew Fentress) 作結語。

Thanks, Eldron, and thanks, Mark, and appreciate everybody joining the call this morning. As we've talked about, we're in the process of monetizing, not just the assets that we proactively acquired over the last couple of years, but also some of the REO assets that have arisen. We've got two examples of having done that profitably recently. And we expect that over the next two quarters, the current fourth quarter and probably the calendar first, that much of that work will be completed and we'll be able to report back to you on the results and how they're going to impact book value per share. But directionally, our projection is that it's going to be flat to better than where it is today.

謝謝，Eldron，謝謝，Mark，謝謝大家今天早上參加電話會議。正如我們所討論的，我們正在進行貨幣化，不僅是過去幾年我們主動收購的資產，還包括一些已經出現的 REO 資產。最近，我們就有兩個這樣做並獲利的例子。我們預計，在接下來的兩個季度，也就是當前的第四季度以及可能的第一個季度，大部分工作將會完成，我們將能夠向您報告結果以及它們將如何影響每股帳面價值。但從方向上看，我們預測它將持平或比現在的水平更好。

With those sales and monetization, we expect to redeploy that capital back into the loan book and really turn the page to focus on earnings and our ability to drive to a market-based dividend over the forward 12 months.

透過這些銷售和貨幣化，我們期望將資本重新部署到貸款帳簿中，並真正翻開新的一頁，重點關注收益以及我們在未來 12 個月內推動基於市場的股息的能力。

So that's really where the team is organized and focused today. We'll try to share as much specifics as we can with you during the Q&A and look forward to your questions. So with that, operator, if you can open the line up, we'll look forward to the first question.

這就是今天的團隊的組織和重點。我們將嘗試在問答環節與您分享盡可能多的具體信息，並期待您的提問。那麼，接線員，如果您可以接通電話，我們期待第一個問題。

(Operator Instructions) Matthew Erdner, Jones Trading.

（操作員指示）馬修‧艾德納（Matthew Erdner），瓊斯貿易（Jones Trading）。

Hey, good morning, guys. Thanks for taking the question. So when it comes to monetizing these equity assets and REO, are you guys looking to fully clear this stuff off of your books before turning to originations? Or are you guys open to kind of doing it hand-in-hand together while you're disposing of assets and originating at the same time?

嘿，大家早安。感謝您回答這個問題。那麼，當談到將這些股權資產和 REO 貨幣化時，你們是否希望在轉向發起之前將這些內容從帳簿上完全清除？還是你們願意在處置資產和同時發起的同時攜手合作？

It'll be the latter. So as we monetize, we'll redeploy gradually, we're not going to wait until they're all completed to begin that process.

答案是後者。因此，當我們將其貨幣化時，我們會逐步重新部署，我們不會等到它們全部完成後才開始這個過程。

Okay. That's helpful there. And then, turning towards the dividend, what are you guys looking for there to kind of get that back up and going? Is it full monetization of the assets and getting X amount of capital deployed? What are you guys looking for there as targets?

好的。這很有幫助。然後，談到股息，你們希望如何讓股息恢復正常運作？是否將資產完全貨幣化並部署X數量的資本？你們在那裡尋找什麼目標？

We haven't set a specific target, but what we're going to do is to continue to monetize the assets, drive EAD, and then pay, out of EAD, a dividend that we believe will be growing as we again re-lever the balance sheet and get back to focusing on driving earnings. As you're aware, one of the things that we're fighting, if you will, on the EAD front is the deleveraging that's occurring as a result of the current CLOs being paid down. And so the liquidity that gets created for modernizations first goes to pay down the AAA tranches. So we're going to have to flip at some point to thinking about how to issue a new one, and that will impact our ability to drive earnings as well. So that's all in the near future for us.

我們尚未設定具體目標，但我們要做的是繼續將資產貨幣化，推動 EAD，然後從 EAD 中支付股息，我們相信，隨著我們再次調整資產負債表並重新專注於推動盈利，股息將會增長。如您所知，我們在 EAD 方面所要對抗的事情之一是由於當前 CLO 的償還而導致的去槓桿化。因此，為現代化建設而產生的流動性首先用於償還 AAA 部分。因此，我們必須在某個時候重新思考如何發行新的債券，這也會影響我們提高獲利的能力。這就是我們近期的全部內容。

Right. That's helpful there. And then can you remind me how much you guys have used for share repurchases this quarter and then what's left? I think I missed those two numbers. I saw the 114,000 shares, but what was the amount there?

正確的。這很有幫助。然後你能提醒我本季你們用於股票回購的資金有多少以及還剩下多少嗎？我想我漏掉了這兩個數字。我看到了114,000股，但是那裡的數量是多少？

We used 1.7 -- This is Eldron. We used $1.7 million and we have about $2.3 million left on the program.

我們使用了 1.7 —— 這是 Eldron。我們已使用了 170 萬美元，該計劃還剩餘約 230 萬美元。

Okay, great. Thank you, guys.

好的，太好了。謝謝你們。

Got it.

知道了。

Thanks, Matt.

謝謝，馬特。

Stephen Laws, Raymond James.

史蒂芬勞斯、雷蒙詹姆斯。

Hey, good morning. Close to end of the year, I just want to congratulate you, guys. I think your stocks doubled over the last year and in best performing mortgage rate year-to-date. So I know you guys have accomplished a lot. And seems like the next six months are going to be pretty exciting, Andrew, given your comments. And so I wanted to follow up on that. I think student housing with FSU asset likely the first domino to fall or first REO to sale, can you talk about what other assets you think are near-term liquidations and how we should think about the sales playing out over the next six months?

嘿，早安。接近年底，我只想向你們表示祝賀。我認為你們的股票在去年翻了一番，並且今年迄今為止的抵押貸款利率表現最佳。所以我知道你們已經取得了很多成就。安德魯，從您的評論來看，未來六個月似乎將會非常令人興奮。所以我想對此進行跟進。我認為 FSU 資產的學生住房可能是第一張倒下的骨牌或第一個出售的 REO，您能談談您認為哪些其他資產是近期清算的，以及我們應該如何看待未來六個月的銷售情況嗎？

Yeah, without getting too specific, Stephen, because we want to report on the results rather than give projections on that. But what I would say is in addition to the one that you mentioned, there are three others that are in process now that we have high degree of certainty on being executed over the next couple of quarters.

是的，史蒂芬，不需要太具體，因為我們想報告結果，而不是對此進行預測。但我想說的是，除了您提到的之外，還有其他三個計劃正在進行中，我們高度確定它們將在接下來的幾個季度內執行。

Great. And then as you think about turning the loan pipeline back on, how is that going? Are you re-engaged there? Will you do loans on any of these assets to the buyer as a way to put some money to work on assets you already know? Kind of how do we think about ramping up the pipelines and when we'll start to see new originations close?

偉大的。然後，當您考慮重新開啟貸款管道時，進展如何？你在那裡重新訂婚了嗎？您是否會以這些資產中的任何一項為依據向買家提供貸款，以便將一些資金投入到您已知的資產上？我們如何考慮增加管道以及何時我們將會開始看到新的發起結束？

It really is about liquidity. As you've seen, we've got about $80 million of liquidity available to the company right now. So we want to be mindful of the appropriate amount of liquidity keep on the balance sheet. And then as these assets again repay, we'll be able to redeploy that because many of them are, as you are aware, not on a CLO. And so it doesn't -- when they sell, we don't have to pay down bonds associated with it. So they're just really -- it's equity that becomes available to put in a warehouse and go and re-originate.

這確實與流動性有關。正如您所看到的，我們目前為公司提供了約 8000 萬美元的流動資金。因此，我們要留意資產負債表上保持適當的流動性。然後，當這些資產再次償還時，我們將能夠重新部署，因為正如您所知，其中許多資產不在 CLO 上。所以當他們出售時，我們不必償還與之相關的債券。所以他們實際上只是——將其存入倉庫並重新發起的股權。

To give you also a reminder, Acres, as a platform, manages capital away from this REIT and so we are very much engaged with the marketplace each and every day and originating new loans weekly. And so we expect to just be able to move some of that flow into the REIT once the dollars are available. We have not been absent from the marketplace and so this will be just allocating some of the origination to this vehicle once the liquidity profile is appropriate.

也要提醒一下，Acres 作為一個平台，管理著遠離 REIT 的資本，因此我們每天都密切關注市場，每週發放新的貸款。因此，我們預計，一旦有資金到位，就能夠將部分資金轉移到房地產投資信託基金 (REIT)。我們並沒有退出市場，因此，一旦流動性狀況合適，我們只會將部分起源分配給該工具。

Great. Appreciate you highlighting that. And you know, I want to follow up on your comments around the securitizations. I've got to get in the filings to see exactly what FL1 and 2 have paid down to. But when you look at the blended financing costs of those, how do they compare with kind of where the CLO markets are today? I know a couple of other mortgage REITs have recently done deals that included both the ramp period and two- to three-year reinvest period. How close are we to collapsing one of these vehicles and looking at doing a new deal and kind of how do the financing costs compare to where the CLO markets are today?

偉大的。感謝您強調這一點。你知道，我想跟進你關於證券化的評論。我必須進入文件才能確切了解 FL1 和 2 已支付了多少錢。但是當您查看這些混合融資成本時，它們與今天的 CLO 市場相比如何？我知道其他一些抵押貸款房地產投資信託基金最近也完成了包括爬坡期和兩到三年的再投資期的交易。我們距離關閉其中一個工具並考慮進行新的交易還有多遠，以及融資成本與今天的 CLO 市場相比如何？

As it relates to the FL1 and 2 terms, those were done obviously in a market environment they were particularly attractive. So I'm not sure if we collapse these two and redeploy into a new one, they're going to be at the same levels. But spreads are wider as well. So what we really focus on are the ROEs that the structure can deliver to the shareholders. And we expect, based upon what's happening in the current market with the CLO executions, it will be able to drive that kind of mid to high teens ROE outcome based upon the collateral that we have, what we're warehousing, what we see in a pipeline assuming that the CRE-CLO market stays at approximate levels to where they are today. So we're definitely thinking about that and have developed plans for it.

就 FL1 和 2 條款而言，這些顯然是在市場環境中完成的，它們特別有吸引力。因此，我不確定如果我們將這兩個合併並重新部署為一個新的，它們是否會處於同一水平。但利差也更大。因此，我們真正關注的是該結構能夠為股東帶來的 ROE。我們預計，根據當前市場 CLO 執行的情況，如果 CRE-CLO 市場保持與今天大致相同的水平，那麼根據我們擁有的抵押品、我們的倉儲情況和我們在渠道中看到的情況，它將能夠推動中高水平的 ROE 結果。所以我們肯定正在考慮這個問題，並且已經制定了計劃。

Great. I look forward to coming announcements and appreciate the comments this morning.

偉大的。我期待即將發布的公告，並感謝今天上午的評論。

Yeah. Thanks, Stephen.

是的。謝謝，史蒂芬。

(Operator Instructions) Chris Muller, Citizens JMP.

（操作員指示）Chris Muller，公民 JMP。

Hey, guys. Thanks for taking my question. So I guess following up on some of the REO topic here, I see in one of your footnotes in the deck that valuations are as of the date you acquired it. So have you guys had any type of appraisal since then? Or just any general thoughts of directionally, I guess, where valuations could be today, given you've held some of those properties for a little while now.

嘿，大家好。感謝您回答我的問題。因此，我想跟進這裡的一些 REO 主題，我看到在你的一個腳註中，估值是截至你獲得它的日期的。那麼從那時起你們有接受過任何類型的評估嗎？或者只是任何關於方向性的一般想法，我想，考慮到你已經持有這些房產一段時間了，今天的估值可能在哪裡。

You're right that we hold these at cost or depreciated value if they're on a depreciation schedule. So we're not going to mark them until they actually get monetized. So when we actually sell the asset as part of a process, we'll record the gains then. Does that answer your question?

您說得對，如果它們在折舊計劃中，我們會以成本或折舊價值持有它們。因此，在它們真正實現貨幣化之前，我們不會對它們進行標記。因此，當我們實際將資產作為流程的一部分出售時，我們會記錄收益。這回答了你的問題嗎？

Yeah. And just any thoughts of what those gains could be? I mean, it's about $200 million of assets on the balance sheet there. So is that like a $300 million-type number? Or is it just going to be some incremental gains on top of that $200 million?

是的。您認為這些收益會是什麼呢？我的意思是，那裡的資產負債表上有大約 2 億美元的資產。那麼這個數字是不是相當於 3 億美元呢？或者這只是 2 億美元基礎上的一些增量收益？

I would categorize it as the latter sort of incremental gains. But we're not -- I don't want to be specific in terms of giving projections. We'll give you the results when they actually get completed. And I think, look, they're going to be positive gain -- they're going to be gains, not losses. I'll put it in that category.

我將其歸類為後一種增量收益。但我們不是——我不想具體給出預測。當它們實際完成時，我們會告知您結果。而且我認為，看，它們將會帶來正收益——它們將會帶來收益，而不是損失。我會把它歸類在這一類。

Got it. And then I guess on a similar note, just a quick housekeeping one. So on that unrealized gain with the REO conversion, once that is realized, will that flow through EAD?

知道了。然後我想說的是類似的，只是一個快速的整理。那麼，REO 轉換的未實現收益一旦實現，是否會流經 EAD 呢？

That's correct. This is Eldron. When we monetize that asset, you'll see that as an adjustment to EAD.

沒錯。這是艾爾德隆。當我們將該資產貨幣化時，您會看到這是 EAD 的調整。

Got it. And then just last quick one here. So it looks like the 4-rated loans declined by one loan in the quarter. Was that one of the foreclosed loans or did that loan pay off or was it upgraded?

知道了。然後這裡還有最後一個快速步驟。因此看起來，4 級貸款在本季減少了一筆。這是一筆被取消抵押品贖回權的貸款嗎？

That's correct. This is Mark. It was a conversion to REO.

沒錯。這是馬克。這是向 REO 的轉換。

Got it. And I guess just following up on that real quick. So what drove it from going to a 4 to REO? Is that something that was on your guys' radar? Just any color you could give on that would be helpful.

知道了。我想只需快速跟進一下即可。那麼是什麼原因導致它從 4 變成 REO 呢？這是你們關注的事情嗎？只要您提供任何顏色，就會有所幫助。

Yeah. I mean, it was always on our radar. It was a borrower that we had been working with. The borrower, essentially, has other issues within his portfolio and kind of ran out of steam in his ability to keep the loan current. And we went ahead with the foreclosure as our remedy in the quarter.

是的。我的意思是，它一直在我們的關注範圍內。這是我們一直合作的借款人。從本質上講，借款人的投資組合中存在其他問題，並且他已經失去了償還貸款的能力。我們在本季採取了止贖措施作為補救措施。

Got it. Thanks for taking the questions and look forward to seeing this story play out over the next couple quarters.

知道了。感謝您回答這些問題，我們期待在接下來的幾個季度看到這個故事的進展。

Thank you.

謝謝。

Thanks, Chris.

謝謝，克里斯。

(Operator Instructions) It appears we have no further questions at this time. I'd like to turn the floor back over to management for any additional or closing comments.

（操作員指示）目前看來我們沒有其他問題了。我想將發言權交還給管理階層，讓他們發表補充意見或結語。

Thank you, everyone, for joining the call. Everyone, have a happy and safe Halloween.

感謝大家參加此次電話會議。祝大家萬聖節快樂、平安。

Thank you. Once again, ladies and gentlemen, that will conclude today's call. Thank you for your participation. You may disconnect at this time.

謝謝。女士們、先生們，今天的電話會議到此結束。感謝您的參與。您現在就可以斷開連線。