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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
- GAAP net income of $0.46 per diluted common share
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 UPB Wtd. Avg. Fee Wtd. Avg. Life
(years)UPB Wtd. Avg. Fee Wtd. Avg. Life
(years)Fannie Mae $ 19,508,256 0.495 % 8.0 $ 19,038,124 0.502 % 8.0 Freddie Mac 5,180,607 0.247 % 9.1 5,153,207 0.250 % 9.0 Private Label 2,233,500 0.196 % 7.7 2,074,859 0.185 % 7.6 FHA 1,242,669 0.147 % 19.8 1,155,893 0.149 % 19.5 Bridge 467,881 0.116 % 2.9 301,182 0.125 % 1.7 SFR-Fixed Rate 279,712 0.200 % 5.9 274,764 0.198 % 6.0 Total $ 28,912,625 0.403 % 8.6 $ 27,998,029 0.411 % 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 $ 186,100 70 % $ 295,451 59 % SFR 76,089 28 % 161,580 32 % 262,189 98 % 457,031 91 % Mezzanine/Preferred Equity 5,845 2 % 43,497 9 % Total Originations $ 268,034 100 % $ 500,528 100 % 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 $ 12,034,638 88 % $ 12,830,999 89 % SFR 982,026 7 % 927,373 6 % Other 282,275 2 % 337,682 2 % 13,298,939 97 % 14,096,054 98 % Mezzanine/Preferred Equity 311,819 2 % 324,224 2 % SFR Permanent 32,966 < 1 % 35,845 < 1 % Total Portfolio $ 13,643,724 100 % $ 14,456,123 100 % 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
- 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.
- Amounts reflect approximate balances as of May 4, 2023.
Contact: Arbor Realty Trust, Inc.
Paul Elenio, Chief Financial Officer
516-506-4422
pelenio@arbor.comARBOR 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
BusinessAgency
BusinessOther /
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
BusinessAgency
BusinessConsolidated 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.
- Diversified, annuity-based operating platform with a multifamily focus that generates strong distributable earnings and dividends in all cycles