• Arbor Realty Trust Reports First Quarter 2023 Results and Increases Dividend by $0.02 to $0.42 per Share

    Источник: Nasdaq GlobeNewswire / 05 май 2023 08:15:00   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 $0.46 per diluted common share
      • Distributable earnings1 of $0.62 per diluted common share, well in excess of our current dividend, representing a 68% payout ratio
      • Raised cash dividend on common stock to $0.42 per share; a $0.02 per share, or 5% increase, representing an annualized dividend of $1.68 per share
      • Strong liquidity position with ~$785 million in cash and liquidity and ~$560 million of restricted cash in replenishable CLO vehicles with a weighted average cost of 1.64% over benchmark rates2
      • Agency loan originations of $1.09 billion and a servicing portfolio of ~$28.91 billion, up 3%
      • Structured loan originations of $268.0 million and a portfolio of ~$13.64 billion
      • Issued $95 million of 7.75% senior notes primarily to repay existing 8.00% debt
      • Announced a $50 million share repurchase program; repurchased ~ $37 million to date at an average price of $10.53 per share, or a 17% discount to book value

    UNIONDALE, N.Y., May 05, 2023 (GLOBE NEWSWIRE) -- Arbor Realty Trust, Inc. (NYSE: ABR), today announced financial results for the first quarter ended March 31, 2023. Arbor reported net income for the quarter of $84.3 million, or $0.46 per diluted common share, compared to net income of $64.1 million, or $0.40 per diluted common share for the quarter ended March 31, 2022. Distributable earnings for the quarter was $122.2 million, or $0.62 per diluted common share, compared to $92.9 million, or $0.55 per diluted common share for the quarter ended March 31, 2022.

    Agency Business

    Loan Origination Platform

      Agency Loan Volume (in thousands) 
      Quarter Ended 
      March 31, 2023 December 31, 2022 
    Fannie Mae$795,021 $1,174,827 
    FHA  148,940  19,658 
    Freddie Mac 101,332  295,258 
    Private Label 41,107  25,629 
    SFR-Fixed Rate 5,461  33,800 
    Total Originations$1,091,861 $1,549,172 
         
    Total Loan Sales$932,699 $1,739,069 
         
    Total Loan Commitments$1,500,110 $1,523,069 
         

    For the quarter ended March 31, 2023, the Agency Business generated revenues of $80.4 million, compared to $95.9 million for the fourth quarter of 2022. Gain on sales, including fee-based services, net on the GSE/Agency business (excluding private label and SFR) was $13.1 million for the quarter, reflecting a margin of 1.72%, compared to $22.7 million and 1.33% for the fourth quarter of 2022. Income from mortgage servicing rights was $18.5 million for the quarter, reflecting a rate of 1.23% as a percentage of loan commitments, compared to $17.1 million and 1.12% for the fourth quarter of 2022.  

    At March 31, 2023, loans held-for-sale was $469.6 million, with financing associated with these loans totaling $422.0 million.

    Fee-Based Servicing Portfolio

    The Company’s fee-based servicing portfolio totaled $28.91 billion at March 31, 2023. Servicing revenue, net was $29.6 million for the quarter and consisted of servicing revenue of $45.0 million, net of amortization of mortgage servicing rights totaling $15.4 million.

      Fee-Based Servicing Portfolio ($ in thousands)
      March 31, 2023 December 31, 2022
      UPBWtd. Avg. FeeWtd. Avg. Life
    (years)
     UPBWtd. Avg. FeeWtd. Avg. Life
    (years)
    Fannie Mae $19,508,2560.495%8.0 $19,038,1240.502%8.0
    Freddie Mac  5,180,6070.247%9.1  5,153,2070.250%9.0
    Private Label  2,233,5000.196%7.7  2,074,8590.185%7.6
    FHA  1,242,6690.147%19.8  1,155,8930.149%19.5
    Bridge  467,8810.116%2.9  301,1820.125%1.7
    SFR-Fixed Rate  279,7120.200%5.9  274,7640.198%6.0
    Total $28,912,6250.403%8.6 $27,998,0290.411%8.6
             

    Loans sold under the Fannie Mae program contain an obligation to partially guarantee the performance of the loan (“loss-sharing obligations”) and includes $34.5 million for the fair value of the guarantee obligation undertaken at March 31, 2023. The Company recorded a $2.6 million net provision for loss sharing associated with CECL for the first quarter of 2023, which included a $1.4 million recovery. At March 31, 2023, the Company’s total CECL allowance for loss-sharing obligations was $25.3 million, representing 0.13% of the Fannie Mae servicing portfolio.

    Structured Business

    Portfolio and Investment Activity

      Structured Portfolio Activity ($ in thousands) 
      Quarter Ended 
      March 31, 2023 December 31, 2022 
      UPB% UPB% 
    Bridge:       
    Multifamily $186,10070% $295,45159% 
    SFR  76,08928%  161,58032% 
       262,18998%  457,03191% 
            
    Mezzanine/Preferred Equity  5,8452%  43,4979% 
    Total Originations $268,034100% $500,528100% 
            
    Number of Loans Originated  24   50  
            
    SFR Commitments $54,350  $352,673  
            
    Runoff $1,186,649  $1,117,806  
            
            
            
      Structured Portfolio ($ in thousands) 
      March 31, 2023 December 31, 2022 
      UPB% UPB% 
    Bridge:       
    Multifamily $12,034,63888% $12,830,99989% 
    SFR  982,0267%  927,3736% 
    Other  282,2752%  337,6822% 
       13,298,93997%  14,096,05498% 
            
    Mezzanine/Preferred Equity  311,8192%  324,2242% 
    SFR Permanent  32,966< 1%  35,845< 1% 
    Total Portfolio $13,643,724100% $14,456,123100% 
            

    At March 31, 2023, the loan and investment portfolio’s unpaid principal balance, excluding loan loss reserves, was $13.64 billion, with a weighted average current interest pay rate of 8.60%, compared to $14.56 billion and 8.17% at December 31, 2022. Including certain fees earned and costs associated with the loan and investment portfolio, the weighted average current interest pay rate was 8.83% at March 31, 2023, compared to 8.42% at December 31, 2022.

    The average balance of the Company’s loan and investment portfolio during the first quarter of 2023, excluding loan loss reserves, was $14.15 billion with a weighted average yield of 8.94%, compared to $14.83 billion and 8.12% for the fourth quarter of 2022. The increase in average yield was primarily due to increases in the benchmark index rates in the first quarter of 2023.

    During the first quarter of 2023, the Company recorded a $20.5 million provision for loan losses associated with CECL. At March 31, 2023, the Company’s total allowance for loan losses was $153.1 million. The Company had four non-performing loans with a carrying value of $7.7 million, before related loan loss reserves of $5.1 million, which was unchanged from December 31, 2022.

    Financing Activity

    The balance of debt that finances the Company’s loan and investment portfolio at March 31, 2023 was $12.65 billion with a weighted average interest rate including fees of 6.97% as compared to $13.28 billion and a rate of 6.50% at December 31, 2022.

    The average balance of debt that finances the Company’s loan and investment portfolio for the first quarter of 2023 was $13.02 billion, as compared to $13.69 billion for the fourth quarter of 2022. The average cost of borrowings for the first quarter of 2023 was 6.69%, compared to 5.80% for the fourth quarter of 2022. The increase in average cost was primarily due to increases in the benchmark index rates in the first quarter of 2023.

    Capital Markets

    The Company issued $95.0 million of 7.75% senior notes due 2026 in a private placement. The Company received proceeds of $93.4 million and used $70.8 million of the proceeds to repurchase its 8.00% senior notes.

    Dividend

    The Company announced today that its Board of Directors has declared a quarterly cash dividend of $0.42 per share of common stock for the quarter ended March 31, 2023. The dividend is payable on May 31, 2023 to common stockholders of record on May 19, 2023. The ex-dividend date is May 18, 2023.

    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) 225-9448 for domestic callers and (203) 518-9708 for international callers. Please use participant passcode ABRQ123 when prompted by the operator.

    A telephonic replay of the call will be available until May 12, 2023. The replay dial-in numbers are (888) 566-0179 for domestic callers and (402) 530-9316 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 severity and duration of 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, 2022 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 May 4, 2023.  
    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 March 31,
       2023
     2022
        
          
    Interest income $327,947  $166,698 
    Interest expense  219,373   82,559 
     Net interest income  108,574   84,139 
          
    Other revenue:    
    Gain on sales, including fee-based services, net  14,589   1,656 
    Mortgage servicing rights  18,458   15,312 
    Servicing revenue, net  29,565   21,054 
    Property operating income  1,381   295 
    Gain on derivative instruments, net  4,223   17,386 
    Other income, net  4,882   3,200 
     Total other revenue  73,098   58,903 
          
    Other expenses:    
    Employee compensation and benefits  42,399   42,025 
    Selling and administrative  13,623   14,548 
    Property operating expenses  1,383   535 
    Depreciation and amortization  2,624   1,983 
    Provision for loss sharing (net of recoveries)  3,177   (662)
    Provision for credit losses (net of recoveries)  22,517   2,358 
     Total other expenses  85,723   60,787 
          
    Income before extinguishment of debt, income from equity affiliates, and income taxes
      95,949   82,255
    Loss on extinguishment of debt  -   (1,350)
    Income from equity affiliates  14,326   7,212 
    Provision for income taxes  (8,029)  (8,188)
          
    Net income  102,246   79,929 
          
    Preferred stock dividends  10,342   9,056 
    Net income attributable to noncontrolling interest  7,585   6,816 
    Net income attributable to common stockholders $84,319  $64,057 
          
    Basic earnings per common share $0.47  $0.42 
    Diluted earnings per common share $0.46  $0.40 
          
    Weighted average shares outstanding:    
     Basic  181,116,674   153,420,238 
     Diluted  214,910,974   185,431,404 
          
    Dividends declared per common share $0.40  $0.37 
          


    ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
    Consolidated Balance Sheets
    ($ in thousands—except share and per share data)
            
         March 31, December 31,
         2023 2022
         (Unaudited)  
    Assets:    
    Cash and cash equivalents $774,544 $534,357
    Restricted cash  704,844  713,808
    Loans and investments, net (allowance credit losses of $153,077 and $132,559)  13,430,985  14,254,674
    Loans held-for-sale, net  469,602  354,070
    Capitalized mortgage servicing rights, net  396,634  401,471
    Securities held-to-maturity, net (allowance credit losses of $5,025 and $3,153)  153,888  156,547
    Investments in equity affiliates  77,641  79,130
    Due from related party  113,105  77,419
    Goodwill and other intangible assets  94,896  96,069
    Other assets  372,085  371,440
     Total assets $16,588,224 $17,038,985
            
    Liabilities and Equity:    
    Credit and repurchase facilities $3,650,876 $3,841,814
    Securitized debt  7,508,472  7,849,270
    Senior unsecured notes  1,409,899  1,385,994
    Convertible senior unsecured notes  281,046  280,356
    Junior subordinated notes to subsidiary trust issuing preferred securities  143,322  143,128
    Due to related party  12,481  12,350
    Due to borrowers  59,281  61,237
    Allowance for loss-sharing obligations  59,757  57,168
    Other liabilities  305,633  335,789
     Total liabilities  13,430,767  13,967,106
            
    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  633,684
       Special voting preferred shares - 16,293,589 shares    
       6.375% Series D - 9,200,000 shares    
       6.25% Series E - 5,750,000 shares    
       6.25% Series F - 11,342,000 shares    
      Common stock, $0.01 par value: 500,000,000 shares authorized - 183,821,003    
       and 178,230,522 shares issued and outstanding  1,838  1,782
      Additional paid-in capital  2,278,287  2,204,481
      Retained earnings  107,697  97,049
    Total Arbor Realty Trust, Inc. stockholders’ equity  3,021,506  2,936,996
            
    Noncontrolling interest  135,951  134,883
    Total equity  3,157,457  3,071,879
            
    Total liabilities and equity $16,588,224 $17,038,985
            

     


    ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
    Statement of Income Segment Information - (Unaudited)
    (in thousands)
              
       Quarter Ended March 31, 2023
              
       Structured
    Business
     Agency
    Business
     Other /
    Eliminations (1)
     Consolidated
              
    Interest income $317,376 $10,571  $-  $327,947 
    Interest expense  214,894  4,479   -   219,373 
     Net interest income  102,482  6,092   -   108,574 
              
    Other revenue:        
    Gain on sales, including fee-based services, net  -  14,589   -   14,589 
    Mortgage servicing rights  -  18,458   -   18,458 
    Servicing revenue  -  44,981   -   44,981 
    Amortization of MSRs  -  (15,416)  -   (15,416)
    Property operating income  1,381  -   -   1,381 
    Gain on derivative instruments, net  -  4,223   -   4,223 
    Other income, net  1,908  2,974   -   4,882 
     Total other revenue  3,289  69,809   -   73,098 
              
    Other expenses:        
    Employee compensation and benefits  15,641  26,758   -   42,399 
    Selling and administrative  6,711  6,912   -   13,623 
    Property operating expenses  1,383  -   -   1,383 
    Depreciation and amortization  1,451  1,173   -   2,624 
    Provision for loss sharing (net of recoveries)  -  3,177   -   3,177 
    Provision for credit losses (net of recoveries)  20,645  1,872   -   22,517 
     Total other expenses  45,831  39,892   -   85,723 
              
    Income before income from equity affiliates, and income taxes  59,940  36,009   -   95,949
              
    Income from equity affiliates  14,326  -   -   14,326 
    Benefit from (provision for) income taxes  429  (8,458)  -   (8,029)
              
    Net income  74,695  27,551   -   102,246 
              
    Preferred stock dividends  10,342  -   -   10,342 
    Net income attributable to noncontrolling interest  -  -   7,585   7,585 
    Net income attributable to common stockholders $64,353 $27,551  $(7,585) $84,319 
              
    (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)
             
     March 31, 2023
     Structured
    Business
     Agency
    Business
     Consolidated
    Assets:     
    Cash and cash equivalents$405,596 $368,948 $774,544
    Restricted cash 702,360  2,484  704,844
    Loans and investments, net 13,430,985  -  13,430,985
    Loans held-for-sale, net -  469,602  469,602
    Capitalized mortgage servicing rights, net -  396,634  396,634
    Securities held-to-maturity, net -  153,888  153,888
    Investments in equity affiliates 77,641  -  77,641
    Goodwill and other intangible assets 12,500  82,396  94,896
    Other assets 413,846  71,344  485,190
    Total assets$15,042,928 $1,545,296 $16,588,224
          
    Liabilities:     
    Debt obligations$12,571,630 $421,985 $12,993,615
    Allowance for loss-sharing obligations -  59,757  59,757
    Other liabilities 268,048  109,347  377,395
    Total liabilities$12,839,678 $591,089 $13,430,767
          


    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 March 31,
      2023   2022 
        
    Net income attributable to common stockholders$84,319  $64,057 
        
    Adjustments:   
    Net income attributable to noncontrolling interest 7,585   6,816 
    Income from mortgage servicing rights (18,458)  (15,312)
    Deferred tax provision (benefit) 3,164   (1,720)
    Amortization and write-offs of MSRs 18,723   27,669 
    Depreciation and amortization 4,295   2,569 
    Loss on extinguishment of debt -   1,350 
    Provision for credit losses, net 23,704   1,696 
    Gain on derivative instruments, net (7,051)  (298)
    Stock-based compensation 5,901   6,092 
        
    Distributable earnings (1)$122,182  $92,919 
        
    Diluted distributable earnings per share (1)$0.62  $0.55 
        
    Diluted weighted average shares outstanding (1) (2) 197,680,616   170,363,021 
        
    (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) 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. For the quarters ended March 31, 2023 and March 31, 2022, the diluted weighted average shares outstanding excluded 17,230,358 and 15,068,383 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, changes in fair value of GSE-related derivatives that temporarily flow through earnings (net of any tax impact), deferred tax provision (benefit), CECL provisions for credit losses (adjusted for realized losses as described below) 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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