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

Arbor Realty Trust
Arbor Realty Trust

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

 

 

UPB

Wtd. Avg.
Fee

Wtd. Avg. Life
(years)

 

UPB

Wtd. Avg.
Fee

Wtd. Avg. Life
(years)

Fannie Mae

 

$

18,331,457

0.521

%

8.3

 

$

18,600,196

0.526

%

8.2

Freddie Mac

 

 

4,979,612

0.260

%

9.5

 

 

4,805,068

0.264

%

9.5

Private Label

 

 

2,075,791

0.200

%

8.2

 

 

2,061,813

0.200

%

8.4

FHA

 

 

1,136,684

0.149

%

19.8

 

 

1,076,237

0.151

%

19.5

Bridge

 

 

299,696

0.125

%

2.3

 

 

-

-

 

-

SFR-Fixed Rate

 

 

241,887

0.200

%

6.2

 

 

226,568

0.200

%

6.3

Total

 

$

27,065,127

0.424

%

8.9

 

$

26,769,882

0.436

%

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

 

$

592,844

77%

 

 

$

1,892,618

92%

 

SFR

 

 

163,851

21%

 

 

 

154,981

8%

 

 

 

 

756,695

98%

 

 

 

2,047,599

100%

 

Mezzanine/Preferred Equity

 

 

17,970

2%

 

 

 

-

-%

 

Total Originations

 

$

774,665

100%

 

 

$

2,047,599

100%

 

 

 

 

 

 

 

 

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

 

$

13,455,073

90%

 

 

$

13,663,343

91%

 

SFR

 

 

825,771

6%

 

 

 

653,814

5%

 

Other

 

 

337,682

2%

 

 

 

351,261

2%

 

 

 

 

14,618,526

98%

 

 

 

14,668,418

98%

 

 

 

 

 

 

 

 

Mezzanine/Preferred Equity

 

 

335,003

2%

 

 

 

329,273

2%

 

SFR Permanent

 

 

36,114

< 1%

 

 

 

36,120

< 1%

 

Total Portfolio

 

$

14,989,643

100%

 

 

$

15,033,811

100%

 

 

 

 

 

 

 

 

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.