• Arbor Realty Trust Reports Third Quarter 2022 Results and Increases Dividend for Tenth Consecutive Quarter to $0.40 per Share

    来源: Nasdaq GlobeNewswire / 04 11月 2022 08:00:08   America/New_York

    Company Highlights:

    • Diversified, annuity-based operating platform with a multifamily focus that generates strong distributable earnings and dividends in all cycles

      • GAAP net income of $0.36 per diluted common share
      • Distributable earnings of $0.56 per diluted common share1, well in excess of our current dividend, representing a 71% payout ratio
      • Raised cash dividend on common stock to $0.40 per share, our 10th consecutive quarterly increase, representing a 33% increase over that time span
      • Strong liquidity position with ~$500 million in cash and liquidity and ~$375 million of restricted cash in replenishable CLO vehicles with a weighted average cost of 1.64% over benchmark rates2
      • Structured loan originations of $774.7 million and a portfolio of ~$15.00 billion
      • Agency loan originations of $1.11 billion and a servicing portfolio of ~$27.00 billion
      • Issued $287.5 million of 7.50% convertible senior notes primarily to repay existing debt

    UNIONDALE, N.Y., Nov. 04, 2022 (GLOBE NEWSWIRE) -- Arbor Realty Trust, Inc. (NYSE: ABR), today announced financial results for the third quarter ended September 30, 2022. Arbor reported net income for the quarter of $62.7 million, or $0.36 per diluted common share, compared to net income of $72.8 million, or $0.51 per diluted common share for the quarter ended September 30, 2021. Distributable earnings for the quarter was $105.1 million, or $0.56 per diluted common share, compared to $75.7 million, or $0.47 per diluted common share for the quarter ended September 30, 2021.1

    Agency Business

    Loan Origination Platform

      Agency Loan Volume (in thousands)
      Quarter Ended
      September 30,
    2022
     June 30,
    2022
    Fannie Mae$629,610 $665,449
    Freddie Mac 350,980  407,691
    Private Label 35,671  83,346
    FHA  78,382  78,364
    SFR-Fixed Rate 16,678  34,334
    Total Originations$1,111,321 $1,269,184
         
    Total Loan Sales$1,082,136 $1,030,703
         
    Total Loan Commitments$1,464,235 $1,184,282
         

     

    For the quarter ended September 30, 2022, the Agency Business generated revenues of $43.1 million, compared to $68.8 million for the second quarter of 2022. Gain on sales, including fee-based services, net on the GSE/Agency business (excluding private label and SFR) was $13.4 million for the quarter, reflecting a margin of 1.30%, compared to $16.2 million and 1.59% for the second quarter of 2022. Income from mortgage servicing rights was $17.6 million for the quarter (excluding $1.8 million related to the sale of $296.9 million of bridge loans), reflecting a rate of 1.51% as a percentage of loan commitments, compared to $17.6 million and 1.48% for the second quarter of 2022.  

    At September 30, 2022, loans held-for-sale was $543.9 million, with financing associated with these loans totaling $511.5 million.

    Fee-Based Servicing Portfolio

    The Company’s fee-based servicing portfolio totaled $27.07 billion at September 30, 2022 and excludes $127.1 million of private label loans originated that were not yet sold or securitized. Servicing revenue, net was $22.7 million for the quarter and consisted of servicing revenue of $37.5 million, net of amortization of mortgage servicing rights totaling $14.8 million.

      Fee-Based Servicing Portfolio ($ in thousands)
      As of September 30, 2022 As of June 30, 2022
      UPBWtd. Avg.
    Fee
    Wtd. Avg. Life
    (years)
     UPBWtd. Avg.
    Fee
    Wtd. Avg. Life
    (years)
    Fannie Mae $18,331,4570.521%8.3 $18,600,1960.526%8.2
    Freddie Mac  4,979,6120.260%9.5  4,805,0680.264%9.5
    Private Label  2,075,7910.200%8.2  2,061,8130.200%8.4
    FHA  1,136,6840.149%19.8  1,076,2370.151%19.5
    Bridge  299,6960.125%2.3  -- -
    SFR-Fixed Rate  241,8870.200%6.2  226,5680.200%6.3
    Total $27,065,1270.424%8.9 $26,769,8820.436%8.9
             

    Loans sold under the Fannie Mae program contain an obligation to partially guarantee the performance of the loan (“loss-sharing obligations”) and includes $34.2 million for the fair value of the guarantee obligation undertaken at September 30, 2022. The Company recorded a $0.6 million net provision for loss sharing associated with CECL for the third quarter of 2022. At September 30, 2022, the Company’s total CECL allowance for loss-sharing obligations was $19.3 million, representing 0.11% of the Fannie Mae servicing portfolio.

    Structured Business

    Portfolio and Investment Activity

      Structured Portfolio Activity ($ in thousands)
      Quarter Ended
      September 30, 2022 June 30, 2022
      UPB% UPB%
    Bridge:      
    Multifamily $592,84477%  $1,892,61892% 
    SFR  163,85121%   154,9818% 
       756,69598%   2,047,599100% 
    Mezzanine/Preferred Equity  17,9702%   --% 
    Total Originations $774,665100%  $2,047,599100% 
           
    Number of Loans Originated  52   91 
           
    SFR Commitments $457,564  $185,201 
           
    Runoff $911,790  $1,122,407 
           
           
      Structured Portfolio ($ in thousands)
      As of September
    30, 2022
     As of June
    30, 2022
      UPB% UPB%
    Bridge:      
    Multifamily $13,455,07390%  $13,663,34391% 
    SFR  825,7716%   653,8145% 
    Other  337,6822%   351,2612% 
       14,618,52698%   14,668,41898% 
           
    Mezzanine/Preferred Equity  335,0032%   329,2732% 
    SFR Permanent  36,114< 1%   36,120< 1% 
    Total Portfolio $14,989,643100%  $15,033,811100% 
           

    At September 30, 2022, the loan and investment portfolio’s unpaid principal balance, excluding loan loss reserves, was $14.99 billion, with a weighted average current interest pay rate of 6.90%, compared to $15.03 billion and 5.49% at June 30, 2022. Including certain fees earned and costs associated with the loan and investment portfolio, the weighted average current interest pay rate was 7.19% at September 30, 2022, compared to 5.82% at June 30, 2022.

    The average balance of the Company’s loan and investment portfolio during the third quarter of 2022, excluding loan loss reserves, was $15.01 billion with a weighted average yield of 6.57%, compared to $14.63 billion and 5.26% for the second quarter of 2022. The increase in average yield was primarily due to increases in the benchmark index rates in the third quarter of 2022.

    During the third quarter of 2022, the Company recorded a $1.0 million provision for loan losses associated with CECL. At September 30, 2022, the Company’s total allowance for loan losses was $122.3 million. The Company had four non-performing loans with a carrying value of $24.2 million, before related loan loss reserves of $5.1 million, compared to four loans with a carrying value of $25.2 million, before related loan loss reserves of $5.1 million at June 30, 2022.

    Financing Activity

    The balance of debt that finances the Company’s loan and investment portfolio at September 30, 2022 was $13.94 billion with a weighted average interest rate including fees of 5.33% as compared to $13.83 billion and a rate of 4.00% at June 30, 2022. The average balance of debt that finances the Company’s loan and investment portfolio for the third quarter of 2022 was $13.90 billion, as compared to $13.37 billion for the second quarter of 2022. The average cost of borrowings for the third quarter of 2022 was 4.49%, compared to 3.10% for the second quarter of 2022. The increase in average cost was due to increases in the benchmark index rates in the second and third quarters of 2022.

    Capital Markets

    The Company issued $287.5 million of 7.50% convertible senior notes due 2025 in a private placement, including the exercised initial purchaser’s over-allotment option of $37.5 million. The Company received proceeds totaling $279.3 million, net of discount and fees from this offering. The Company used the net proceeds to repay its $264.0 million of 4.75% convertible senior notes that matured in November 2022.

    Dividend

    The Company announced today that its Board of Directors has declared a quarterly cash dividend of $0.40 per share of common stock for the quarter ended September 30, 2022. The dividend is payable on November 30, 2022 to common stockholders of record on November 18, 2022. The ex-dividend date is November 17, 2022.

    Earnings Conference Call

    The Company will host a conference call today at 10:00 a.m. Eastern Time. A live webcast and replay of the conference call will be available at www.arbor.com in the investor relations section of the Company’s website, or you can access the call telephonically at least ten minutes prior to the conference call. The dial-in numbers are (800) 274-8461 for domestic callers and (203) 518-9783 for international callers. Please use participant passcode ABRQ322 when prompted by the operator.

    A telephonic replay of the call will be available until November 11, 2022. The replay dial-in numbers are (800) 839-4568 for domestic callers and (402) 220-2681 for international callers.

    About Arbor Realty Trust, Inc.

    Arbor Realty Trust, Inc. (NYSE: ABR) is a nationwide real estate investment trust and direct lender, providing loan origination and servicing for multifamily, single-family rental (SFR) portfolios, and other diverse commercial real estate assets. Headquartered in New York, Arbor manages a multibillion-dollar servicing portfolio, specializing in government-sponsored enterprise products. Arbor is a leading Fannie Mae DUS® lender and Freddie Mac Optigo® Seller/Servicer, and an approved FHA Multifamily Accelerated Processing (MAP) lender. Arbor’s product platform also includes bridge, CMBS, mezzanine and preferred equity loans. Rated by Standard and Poor’s and Fitch Ratings, Arbor is committed to building on its reputation for service, quality, and customized solutions with an unparalleled dedication to providing our clients excellence over the entire life of a loan.

    Safe Harbor Statement

    Certain items in this press release may constitute forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Arbor can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from Arbor’s expectations include, but are not limited to, changes in economic conditions generally, and the real estate markets specifically, in particular, due to the uncertainties created by the COVID-19 pandemic, continued ability to source new investments, changes in interest rates and/or credit spreads, and other risks detailed in Arbor’s Annual Report on Form 10-K for the year ended December 31, 2021 and its other reports filed with the SEC. Such forward-looking statements speak only as of the date of this press release. Arbor expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Arbor’s expectations with regard thereto or change in events, conditions, or circumstances on which any such statement is based.

    Notes

    1. During the quarterly earnings conference call, the Company may discuss non-GAAP financial measures as defined by SEC Regulation G. In addition, the Company has used non-GAAP financial measures in this press release. A supplemental schedule of non-GAAP financial measures and the comparable GAAP financial measure can be found on the last page of this release.
    2. Amounts reflect approximate balances as of October 31, 2022.
    Contact:Arbor Realty Trust, Inc.
     Paul Elenio, Chief Financial Officer
     516-506-4422
     pelenio@arbor.com


    ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
              
    Consolidated Statements of Income - (Unaudited)
    ($ in thousands—except share and per share data)
              
       Quarter Ended September 30, Nine Months Ended September 30,
        2022   2021   2022   2021 
                      
              
    Interest income $259,778  $125,480  $627,804  $321,772 
    Interest expense  160,452   55,560   350,079   144,122 
    Net interest income  99,326   69,920   277,725   177,650 
              
    Other revenue:        
    Gain on sales, including fee-based services, net  14,360   16,334   32,526   86,102 
    Mortgage servicing rights  19,408   32,453   52,287   95,688 
    Servicing revenue, net  22,744   20,088   64,513   50,939 
    Property operating income  445   -   1,031   - 
    (Loss) gain on derivative instruments, net  (15,909)  (1,492)  10,083   (7,320)
    Other income, net  (6,014)  2,195   (16,061)  4,140 
    Total other revenue  35,034   69,578   144,379   229,549 
              
    Other expenses:        
    Employee compensation and benefits  38,811   41,973   119,736   128,647 
    Selling and administrative  13,225   11,757   40,960   33,707 
    Property operating expenses  366   149   1,443   421 
    Depreciation and amortization  2,078   1,807   6,092   5,349 
    Provision for loss sharing (net of recoveries)  412   (3,272)  (2,199)  (1,070)
    Provision for credit losses (net of recoveries)  2,274   (3,799)  9,700   (12,689)
    Total other expenses  57,166   48,615   175,732   154,365 
              
    Income before extinguishment of debt, sale of real estate, income from equity affiliates, and income taxes    77,194   90,883   246,372   252,834 
    Loss on extinguishment of debt  (3,262)  -   (4,612)  (1,370)
    Gain on sale of real estate  -   -   -   1,228 
    Income from equity affiliates  4,748   5,086   18,507   32,095 
    Benefit from (provision for) income taxes  374   (9,905)  (13,166)  (33,356)
              
    Net income  79,054   86,064   247,101   251,431 
              
    Preferred stock dividends  10,342   4,913   30,612   13,216 
    Net income attributable to noncontrolling interest  6,002   8,347   19,811   26,806 
    Net income attributable to common stockholders $62,710  $72,804  $196,678  $211,409 
              
    Basic earnings per common share $0.37  $0.51  $1.21  $1.57 
    Diluted earnings per common share $0.36  $0.51  $1.18  $1.56 
              
    Weighted average shares outstanding:        
    Basic  170,227,553   142,624,300   162,292,235   134,437,663 
    Diluted  205,865,016   160,270,905   195,529,340   152,691,461 
              
    Dividends declared per common share $0.39  $0.35  $1.14  $1.02 
              


    ARBOR REALTY TRUST, INC. AND SUBSIDIARIES 
             
    Consolidated Balance Sheets 
    ($ in thousands—except share and per share data) 
             
             
         September 30, December 31, 
          2022  2021 
         (Unaudited)   
    Assets:     
    Cash and cash equivalents $389,651 $404,580 
    Restricted cash  922,531  486,690 
    Loans and investments, net (allowance for credit losses of $122,296 and $113,241)
      14,791,426  11,981,048 
    Loans held-for-sale, net  543,876  1,093,609 
    Capitalized mortgage servicing rights, net  403,886  422,734 
    Securities held-to-maturity, net (allowance for credit losses of $2,090 and $1,753) 157,818  140,484 
    Investments in equity affiliates  84,047  89,676 
    Due from related party  24,740  84,318 
    Goodwill and other intangible assets  97,242  100,760 
    Other assets  346,912  269,946 
    Total assets $17,762,129 $15,073,845 
             
    Liabilities and Equity:     
    Credit and repurchase facilities $4,633,132 $4,481,579 
    Collateralized loan obligations  7,971,996  5,892,810 
    Senior unsecured notes  1,283,527  1,280,545 
    Convertible senior unsecured notes, net  346,040  259,385 
    Junior subordinated notes to subsidiary trust issuing preferred securities  142,933  142,382 
    Due to related party  5,564  26,570 
    Due to borrowers  67,472  96,641 
    Allowance for loss-sharing obligations  53,511  56,064 
    Other liabilities  303,948  287,885 
    Total liabilities  14,808,123  12,523,861 
             
    Equity:     
     Arbor Realty Trust, Inc. stockholders' equity:     
      Preferred stock, cumulative, redeemable, $0.01 par value: 100,000,000 shares   
      authorized, shares issued and outstanding by period:  633,684  556,163 
       Special voting preferred shares - 16,293,589 and 16,325,095 shares     
       6.375% Series D - 9,200,000 shares     
       6.25% Series E - 5,750,000 shares     
       6.25% Series F - 11,342,000 and 8,050,000 shares     
      Common stock, $0.01 par value: 500,000,000 shares authorized - 171,523,808   
       and 151,362,181 shares issued and outstanding  1,715  1,514 
      Additional paid-in capital  2,105,909  1,797,913 
      Retained earnings  79,531  62,532 
    Total Arbor Realty Trust, Inc. stockholders’ equity  2,820,839  2,418,122 
             
    Noncontrolling interest  133,167  131,862 
    Total equity  2,954,006  2,549,984 
             
    Total liabilities and equity $17,762,129 $15,073,845 
             


    ARBOR REALTY TRUST, INC. AND SUBSIDIARIES 
             
    Statement of Income Segment Information - (Unaudited) 
    (in thousands) 
               
               
       Quarter Ended September 30, 2022 
               
       Structured
    Business
     Agency
    Business
     Other /
    Eliminations (1)
     
    Consolidated
     
               
    Interest income $249,539  $10,239  $-  $259,778  
    Interest expense  157,325   3,127   -   160,452  
     Net interest income  92,214   7,112   -   99,326  
               
    Other revenue:         
    Gain on sales, including fee-based services, net  -   14,360   -   14,360  
    Mortgage servicing rights  -   19,408   -   19,408  
    Servicing revenue  -   37,526   -   37,526  
    Amortization of MSRs  -   (14,782)  -   (14,782) 
    Property operating income  445   -   -   445  
    Loss on derivative instruments, net  -   (15,909)  -   (15,909) 
    Other income, net  1,763   (7,777)  -   (6,014) 
     Total other revenue  2,208   32,826   -   35,034  
               
    Other expenses:         
    Employee compensation and benefits  13,342   25,469   -   38,811  
    Selling and administrative  5,961   7,264   -   13,225  
    Property operating expenses  366   -   -   366  
    Depreciation and amortization  906   1,172   -   2,078  
    Provision for loss sharing (net of recoveries)  -   412   -   412  
    Provision for credit losses (net of recoveries)  2,206   68   -   2,274  
     Total other expenses  22,781   34,385   -   57,166  
               
              
    Income before extinguishment of debt, income from equity affiliates, and income taxes    71,641   5,553   -   77,194  
               
    Loss on extinguishment of debt  (3,262)  -   -   (3,262) 
    Income from equity affiliates  4,748   -   -   4,748  
    Benefit from income taxes  319   55   -   374  
               
    Net income  73,446   5,608   -   79,054  
               
    Preferred stock dividends  10,342   -   -   10,342  
    Net income attributable to noncontrolling interest  -   -   6,002   6,002  
    Net income attributable to common stockholders $63,104  $5,608  $(6,002) $62,710  
               
    (1) Includes income allocated to the noncontrolling interest holders not allocated to the two reportable segments. 
               


    ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
            
    Balance Sheet Segment Information - (Unaudited)
    (in thousands)
              
         September 30, 2022
         Structured
    Business
     Agency
    Business
     
    Consolidated
    Assets:       
    Cash and cash equivalents $119,793 $269,858 $389,651
    Restricted cash  903,587  18,944  922,531
    Loans and investments, net  14,791,426  -  14,791,426
    Loans held-for-sale, net  -  543,876  543,876
    Capitalized mortgage servicing rights, net     -  403,886  403,886
    Securities held-to-maturity, net  -  157,818  157,818
    Investments in equity affiliates  84,047  -  84,047
    Goodwill and other intangible assets  12,500  84,742  97,242
    Other assets  293,252  78,400  371,652
    Total assets $16,204,605 $1,557,524 $17,762,129
              
    Liabilities:      
    Debt obligations $13,866,114 $511,514 $14,377,628
    Allowance for loss-sharing obligations  -  53,511  53,511
    Other liabilities  253,390  123,594  376,984
    Total liabilities $14,119,504 $688,619 $14,808,123
              



    ARBOR REALTY TRUST, INC. AND SUBSIDIARIES 
             
    Reconciliation of Distributable Earnings to GAAP Net Income - (Unaudited) 
    ($ in thousands—except share and per share data) 
      
             
     Quarter Ended September 30, Nine Months Ended September 30, 
      2022
       2021
       2022
      
     2021
      
                     
             
    Net income attributable to common stockholders$62,710  $72,804  $196,678  $211,409  
             
    Adjustments:        
    Net income attributable to noncontrolling interest 6,002   8,347   19,811   26,806  
    Income from mortgage servicing rights (19,408)  (32,453)  (52,287)  (95,688) 
    Deferred tax (benefit) provision (5,407)  6,256   (7,833)  10,692  
    Amortization and write-offs of MSRs 26,555   23,757   81,850   62,088  
    Depreciation and amortization 2,666   2,705   7,846   8,137  
    Loss on extinguishment of debt 3,262   -   4,612   1,370  
    Provision for credit losses, net 2,708   (9,867)  10,254   (18,210) 
    Loss on derivative instruments, net 22,925   1,492   18,472   1,484  
    Stock-based compensation 3,085   2,612   12,327   7,986  
    Loss on redemption of preferred stock -   -   -   3,479  
             
    Distributable earnings (1)$105,098  $75,653  $291,730  $219,553  
             
    Diluted distributable earnings per share (1)$0.56  $0.47  $1.63  $1.44  
             
    Diluted weighted average shares outstanding (1) (2) 187,049,617   160,270,905   179,174,194   152,691,461  
             
    (1) Amounts are attributable to common stockholders and OP Unit holders. The OP Units are redeemable for cash, or at the Company's option for shares of the Company's common stock on a one-for-one basis. 
      
    (2) Beginning in the first quarter of 2022, the diluted weighted average shares outstanding were adjusted to exclude the potential shares issuable upon conversion and settlement of the Company's convertible senior notes principal balance. Excluding the effect of a potential conversion in shares until a conversion occurs is consistent with past treatment and other unrealized adjustments to distributable earnings. For the quarter and nine months ended September 30, 2022, the diluted weighted average shares outstanding excluded 18,815,399 and 16,355,146 of these potentially issuable shares, respectively. 
      
    The Company is presenting distributable earnings because management believes it is an important supplemental measure of the Company's operating performance and is useful to investors, analysts and other parties in the evaluation of REITs and their ability to provide dividends to stockholders. Dividends are one of the principal reasons investors invest in REITs. To maintain REIT status, REITs are required to distribute at least 90% of their REIT-taxable income. The Company considers distributable earnings in determining its quarterly dividend and believes that, over time, distributable earnings is a useful indicator of the Company's dividends per share. 
      
    The Company defines distributable earnings as net income (loss) attributable to common stockholders computed in accordance with GAAP, adjusted for accounting items such as depreciation and amortization (adjusted for unconsolidated joint ventures), non-cash stock-based compensation expense, income from MSRs, amortization and write-offs of MSRs, gains/losses on derivative instruments primarily associated with Private Label loans not yet sold and securitized, the tax impact on cumulative gains/losses on derivative instruments associated with Private Label loans sold during the periods presented, changes in fair value of GSE-related derivatives that temporarily flow through earnings, deferred tax provision (benefit), CECL provisions for credit losses (adjusted for realized losses as described below), amortization of the convertible senior notes conversion option (in comparative periods prior to 2022) and gains/losses on the receipt of real estate from the settlement of loans (prior to the sale of the real estate). The Company also adds back one-time charges such as acquisition costs and one-time gains/losses on the early extinguishment of debt and redemption of preferred stock. 
      
    The Company reduces distributable earnings for realized losses in the period management determines that a loan is deemed nonrecoverable in whole or in part. Loans are deemed nonrecoverable upon the earlier of: (1) when the loan receivable is settled (i.e., when the loan is repaid, or in the case of foreclosure, when the underlying asset is sold); or (2) when management determines that it is nearly certain that all amounts due will not be collected. The realized loss amount is equal to the difference between the cash received, or expected to be received, and the book value of the asset. 
      
    Distributable earnings is not intended to be an indication of the Company's cash flows from operating activities (determined in accordance with GAAP) or a measure of its liquidity, nor is it entirely indicative of funding the Company's cash needs, including its ability to make cash distributions. The Company's calculation of distributable earnings may be different from the calculations used by other companies and, therefore, comparability may be limited. 

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