ACRES Commercial Realty capped 2025 with a record origination quarter, closing $571 million of new loan commitments and growing the CRE loan portfolio a net $443.8 million to $1.8 billion across 53 investments, which set up the $1 billion ACRES 2026-FL4 securitization that closed in February 2026 at 86.5% leverage and a 1.68% debt spread. Credit quality improved markedly - the weighted-average risk rating fell to 2.7, loans rated 4 or 5 dropped to 10, and management highlighted that it has resolved 21 of 23 inherited watch-list loans since 2020 with only $4.8 million (1.3%) of losses. GAAP book value per share reached the roughly $30 target at $30.01, and management said ACRES is now positioned to resume a common dividend after a 66% book-value increase since assuming management in July 2020. Headline results were noisier: a $1.5 million loss on the sale of an Austin office REO and the charge-off of a fully reserved legacy $4.7 million mezzanine loan produced a GAAP net loss to common of $3.0 million ($0.43 per share) and an EAD loss of $0.48 per share (a positive $0.20 excluding the mezzanine item). New-loan spreads compressed to 2.83% as originations were intentionally multifamily-heavy to feed the CLO, and non-controlling interest jumped to about $130 million after ACRES sold part of a JPMorgan financing arrangement. Looking to 2026, management guided to $500-700 million of net portfolio growth, roughly $500 million of repayments of older-vintage loans, diversification back toward a 60-65% multifamily mix, and leverage held inside four turns of total leverageable capital, supported by $32.1 million of remaining NOLs plus additional TRS NOLs.
Good morning. Thank you for joining our call. I would like to highlight that we have posted the fourth quarter 2025 earnings presentation to our website. This presentation contains summary and detailed information about the quarterly 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 using this conference call, the words believes, anticipates, expects, and similar expressions are intended to identify forward-looking statements. Although the company believes 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 Form 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 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, Andrew Fentress, Chairman of ACR, and Eldron Blackwell, ACR's CFO. I will now turn the call over to Mark.
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, our CFO, will discuss the financial statements, liquidity condition, book value, and operating results for the fourth quarter 2025. Of course, we look forward to your questions at the end of our prepared remarks. The ACRES team remains focused on executing on our business strategy by investing in high-quality CRE loans, actively managing the portfolio, and growing earnings for our shareholders. In the fourth quarter 2025, we closed new commitments of $571 million, offset by loan payoffs and net unfunded commitments totaling $127.2 million, producing a net increase to the loan portfolio of $443.8 million.
The weighted average spread on newly originated loans is 2.83%. New loan production in the fourth quarter of 2025 and in the first quarter of 2026 put us in a position to structure and price a new CRE securitization in January. On February 12th, we closed ACRES 2026-FL4, a $1 billion deal that has a leverage of 86.5% and a weighted average debt spread of 1.68%. The weighted average spread of the floating rate loans in our $1.8 billion commercial real estate loan portfolio is now 3.35% over one-month term SOFR rates. The portfolio generally continues to perform, demonstrating sound and consistent underwriting and proactive asset management.
The company ended the quarter with $1.8 billion of commercial real estate loans across 53 individual investments. At December 31st, our weighted average risk rating was 2.7, a decrease from 3.0 at September 30th, and the number of loans rated four or five was 10, down from 13 at the end of the third quarter. The portion of our CRE loan portfolio rated four or five, based on the company's economic interest, was 17% at December 31st, down from 32% at September 30th. During the quarter, another four-rated loan paid off at par, highlighting again that the vast majority of our four and five-rated loans do not suffer principal losses.
Looking back through our history, when ACRES assumed the management contract of ACR in 2020, the company had 23 loans with a par balance of $411 million, or 24% of the portfolio risk-rated either four or five. As of December 31st, 2025, only 2 of those four or five loans remain unresolved in the portfolio. Our exceptional asset management team created sponsor-specific solutions to successfully resolve 21 of those loans, or $368 million of par value, recognizing a loss of only $4.8 million on those resolutions are just 1.3% of the par balance of those loans. We expect the same or better results on the remaining four or five rated assets in our portfolio as we work actively and strategically with our sponsors to create positive resolutions.
The majority of these assets have manageable stabilized LTVs of 80% or less. To further highlight this point, as a firm since inception 12 years ago, ACRES has incurred minimal realized losses on almost $8 billion of invested capital. We are also excited to announce that we sold one of our REO assets collateralized by an office property in Austin, Texas this quarter, which resulted in an earnings available for distribution or EAD gain of $1.3 million. During the quarter, we charged off a legacy $4.7 million mezzanine loan that was originated prior to ACRES management in 2018, and whose loss was fully reserved for and recognized in both GAAP and book value in 2022. We recognize the EAD impact this quarter in connection with settlement of that loan.
We will now have ACR's CFO, Eldron Blackwell, discuss the financial statements and operating results during the fourth quarter.
Thank you and good morning, everyone. GAAP net loss allocable to common shares in the fourth quarter was $3 million, or $0.43 per share. GAAP net loss for the quarter included $10.7 million in net interest income, which was an increase of $2.3 million over the prior quarter. This increase in net interest income was driven by net loan originations of $443.8 million in corresponding facility draws during the quarter. GAAP net loss for the quarter also included a $3 million net increase in the performance of our net real estate operations to net income of $156,000 and a $1.5 million net loss on the sale of the previously mentioned office property in Austin, Texas.
We saw a decrease in current expected credit losses, or CECL reserves, of $1.3 million, or $0.19 per share, as compared to a decrease in CECL reserves during the third quarter of $4 million, which was primarily driven by loan payoffs and net improvements in the model credit risk of our CRE portfolio, offset by a general decline in projected macroeconomic factors during the quarter. Also, as previously mentioned, ACR recorded a charge-off of $4.7 million on a mezzanine loan that was fully reserved for in 2022. The total allowance for credit losses at December thirty-first was $20.4 million and represented 1.11%, or 111 basis points on our $1.8 billion loan portfolio at par, and was composed entirely of general credit reserves.
Excluding the loss for the mezzanine loan that was fully reserved for in 2022, EAD for Q4 2025 was $0.20 per share. When the mezzanine loan is included, the company reported an EAD loss of $0.48 per share, as compared to earnings of $1.01 per share for Q3. GAAP book value per share was $30.01 on December 31st versus $29.63 on September 30th. During the quarter, we used $10 million to repurchase 493,000 common shares at an approximate 33% discount to book value at December 31st. In December 2025, the authorized amount was fully utilized, and since November 2020, the company has repurchased 5.3 million shares at an average discount to book value of 49%.
Available liquidity at December 31st was $108 million, which comprised $84 million of unrestricted cash and $24 million of projected financing available on unlevered assets. Our GAAP debt-to-equity leverage ratio increased to 2.8 times at December 31st from 2.7 times at September 30th from net originations on our CRE loan portfolio. At the end of the fourth quarter 2025, the company's net operating loss carry forward was $32.1 million or approximately $4.89 per share. With that, I will now turn the call to Andrew Fentress for closing remarks.
Thank you, Eldron. We're pleased with continued execution of our plan to drive shareholder value. In the fourth quarter, we originated $571 million of new loans. We repurchased shares at accretive levels, sold an REO asset, improved the credit quality of the portfolio, and positioned the company to resume paying a dividend to common shareholders. Since assuming the role of manager in July of 2020, ACR book value has increased a total of 66%. All the team here at Acres is energized by the opportunity that we see in front of us, both in the asset class and the competitive landscape. We will continue to deploy capital through careful underwriting and then manage each investment to the optimal outcome for shareholders. We gratefully appreciate your continued support and investment in ACR, and we look forward to your questions.
This concludes our opening remarks. I'll now turn the call back to the operator for questions.