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Arbor Realty Trust, Inc. (ABR)

NYSE - NYSE Delayed Price. Currency in USD
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16.87+0.20 (+1.20%)
At close: 4:00PM EST

17.02 +0.15 (0.89%)
After hours: 7:58PM EST

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Previous Close16.67
Open17.03
Bid16.91 x 2900
Ask17.03 x 2200
Day's Range16.71 - 17.12
52 Week Range3.54 - 17.19
Volume2,041,465
Avg. Volume1,289,444
Market Cap2.091B
Beta (5Y Monthly)1.87
PE Ratio (TTM)11.98
EPS (TTM)1.41
Earnings DateMay 06, 2021 - May 10, 2021
Forward Dividend & Yield1.32 (7.92%)
Ex-Dividend DateMar. 02, 2021
1y Target Est17.00
  • Are You Looking for a Top Momentum Pick? Why Arbor Realty Trust (ABR) is a Great Choice
    Zacks

    Are You Looking for a Top Momentum Pick? Why Arbor Realty Trust (ABR) is a Great Choice

    Does Arbor Realty Trust (ABR) have what it takes to be a top stock pick for momentum investors? Let's find out.

  • Arbor Realty Trust (ABR) Q4 2020 Earnings Call Transcript
    Motley Fool

    Arbor Realty Trust (ABR) Q4 2020 Earnings Call Transcript

    ABR earnings call for the period ending December 31, 2020.

  • Arbor Realty Trust Reports Fourth Quarter and Full Year 2020 Results and Increases Dividend for Third Consecutive Quarter to $0.33 per Share
    GlobeNewswire

    Arbor Realty Trust Reports Fourth Quarter and Full Year 2020 Results and Increases Dividend for Third Consecutive Quarter to $0.33 per Share

    Fourth Quarter Highlights: Diversified operating platform with a multifamily focus that continues to produce strong distributable earnings and dividends in all cycles GAAP net income of $0.80 and distributable earnings of $0.49 per diluted common share1Raised cash dividend on common stock to $0.33 per share, our third consecutive quarterly increaseContinued strong performance from our residential mortgage banking joint venture generating pretax income of $19.6 millionRaised $105 million of accretive growth capital through the issuance of common shares Agency Business: Segment income of $70.9 millionRecord loan originations of $2.75 billion, an 87% increase over last quarterServicing portfolio of $24.63 billion representing 9% growth in the current quarter Structured Business: Segment income of $39.9 millionPortfolio growth of 7% on $985.2 million of loan originations Full Year Highlights: GAAP net income of $1.41 and distributable earnings of $1.75 per diluted common share1Raised annual dividend run rate to $1.32 per share, a 10% increase from a year ago, representing nine straight years of dividend growthRecord originations of $9.15 billion, a 20% increase over 2019Agency servicing portfolio growth of 23% from record loan originations of $6.71 billionStructured portfolio growth of 28% from loan originations of $2.43 billionIndustry leading shareholder return of 7% in 2020 despite ongoing pandemic; all other commercial mortgage REITs in our space had a negative return during 2020Raised $250 million of accretive growth capital through issuance of common stock and senior unsecured debtContinued focus on improving funding sources: issued $275.0 million of 4.50% senior notes to replace higher cost debt, increased warehouse capacity by $420.0 million, added a new $800.0 million CLO vehicle and completed first private label securitization totaling $727.2 millionGenerated pretax income of $75.7 million from residential mortgage banking joint ventureNamed the top Fannie Mae Small Loan Producer two years running (2019-2020); jumped up to sixth on the Top Fannie Mae DUS Multifamily Lender list for 2020 UNIONDALE, N.Y., Feb. 19, 2021 (GLOBE NEWSWIRE) -- Arbor Realty Trust, Inc. (NYSE:ABR), today announced financial results for the fourth quarter and year ended December 31, 2020. Arbor reported net income for the quarter of $96.6 million, or $0.80 per diluted common share, compared to net income of $35.5 million, or $0.34 per diluted common share for the quarter ended December 31, 2019. Net income for the year was $163.4 million, or $1.41 per diluted common share, compared to $121.1 million, or $1.27 per diluted common share for the year ended December 31, 2019. Distributable earnings for the quarter was $67.4 million, or $0.49 per diluted common share, compared to $42.3 million, or $0.34 per diluted common share for the quarter ended December 31, 2019. Distributable earnings for the year was $234.9 million, or $1.75 per diluted common share, compared to $159.2 million, or $1.37 per diluted common share for the year ended December 31, 2019.1 “We had a tremendous fourth quarter and an exceptional 2020 demonstrating the value of our franchise and the strength of our diverse business model,” said Ivan Kaufman, founder, chairman and CEO of Arbor Realty Trust. “Our outstanding results continue to reflect the successful execution of our business strategy and our versatile operating platform that have once again allowed us to increase our dividend to 33 cents a share – our third consecutive quarterly dividend increase representing 10% growth in 2020. Arbor continues to outperform in the commercial mortgage REIT space and we are well positioned to succeed in the current economic climate giving us confidence in our ability to continue to generate strong earnings and dividends in the future.” Agency Business Loan Origination Platform Agency Loan Volume (in thousands) Quarter Ended Year Ended December 31, 2020 September 30, 2020 December 31, 2020 December 31, 2019Fannie Mae $2,202,092 $1,117,679 $5,041,925 $3,346,272Freddie Mac 373,063 252,014 960,508 728,317FHA 133,523 100,345 327,345 123,095Private Label 44,884 5,840 382,191 401,216CMBS/Conduit - - - 211,325Total Originations $2,753,562 $1,475,878 $6,711,969 $4,810,225 Total Loan Sales $2,418,317 $1,219,462 $6,587,728 $4,401,112 Total Loan Commitments$2,808,173 $1,528,551 $6,810,666 $4,829,721 For the quarter ended December 31, 2020, the Agency Business generated revenues (excluding gains and losses on derivative instruments) of $125.6 million, compared to $81.8 million for the third quarter of 2020. Gain on sales, including fee-based services, net was $34.0 million for the quarter, reflecting a margin of 1.41% on loan sales, compared to $19.9 million and 1.63% for the third quarter of 2020. Income from mortgage servicing rights was $68.8 million for the quarter, reflecting a rate of 2.45% as a percentage of loan commitments, compared to $42.4 million and 2.77% for the third quarter of 2020. At December 31, 2020, loans held-for-sale was $986.9 million which was primarily comprised of unpaid principal balances totaling $968.6 million, with financing associated with these loans totaling $952.0 million. Fee-Based Servicing Portfolio Our fee-based servicing portfolio totaled $24.63 billion at December 31, 2020, an increase of 9.2% from September 30, 2020, primarily the result of $2.75 billion of new agency loan originations, net of $641.8 million in portfolio runoff during the quarter. Servicing revenue, net was $14.2 million for the quarter and consisted of servicing revenue of $27.3 million, net of amortization of mortgage servicing rights totaling $13.1 million. Fee-Based Servicing Portfolio ($ in thousands) As of December 31, 2020 As of September 30, 2020 UPBWtd. Avg. FeeWtd. Avg. Life (in years) UPBWtd. Avg. FeeWtd. Avg. Life (in years)Fannie Mae $18,268,268 0.523%8.2 $16,462,0410.516%8.4Freddie Mac 4,881,080 0.279%9.9 4,687,1970.288%10.4FHA 752,116 0.163%20.3 685,2630.171%20.4Private Label 726,992 0.200%8.7 727,0630.200%9.4Total $24,628,456 0.454%8.9 $22,561,5640.448%9.2 Loans sold under the Fannie Mae program contain an obligation to partially guarantee the performance of the loan (“loss-sharing obligations”), and includes $34.0 million for the fair value of the guarantee obligation undertaken at December 31, 2020. The Company recorded a $7.6 million reversal of provision for loss sharing associated with current expected credit losses, or “CECL,” for the fourth quarter of 2020. At December 31, 2020, the Company’s total CECL allowance for loss-sharing obligations was $30.3 million, representing 0.17% of the Fannie Mae servicing portfolio. Structured Business Portfolio and Investment Activity Quarter ended December 31, 2020: Strong growth in the portfolio of $378.2 million, or 7.4%Continued significant income generated by our residential mortgage banking joint ventureOriginated 57 loans totaling $985.2 million, consisted primarily of multifamily bridge loans totaling $868.7 millionPayoffs and pay downs on 32 loans totaling $567.6 million Year ended December 31, 2020: Portfolio growth of $1.20 billion, or $27.9%Originated 137 loans totaling $2.43 billion, consisted primarily of multifamily bridge loans totaling $2.12 billionPayoffs and pay downs totaling $1.21 billion The Company recorded pretax income of $19.6 million from its significant joint venture investment in a residential mortgage banking business as a result of the continued historically low interest rate environment. Pretax income from this investment for the year ended December 31, 2020 totaled $75.7 million. At December 31, 2020, the loan and investment portfolio’s unpaid principal balance, excluding loan loss reserves, was $5.48 billion, with a weighted average current interest pay rate of 5.23%, compared to $5.10 billion and 5.39% at September 30, 2020. Including certain fees earned and costs associated with the loan and investment portfolio, the weighted average current interest pay rate was 5.80% at December 31, 2020, compared to 5.93% at September 30, 2020. The average balance of the Company’s loan and investment portfolio during the fourth quarter of 2020, excluding loan loss reserves, was $5.09 billion with a weighted average yield of 6.04%, compared to $4.98 billion and 5.98% for the third quarter of 2020. During the fourth quarter of 2020, the Company recorded additional provisions for loan losses of $1.7 million as a result of its loan review process associated with CECL. At December 31, 2020, the Company’s total allowance for loan losses was $148.3 million. The Company had seven non-performing loans with a carrying value of $60.3 million, before related loan loss reserves of $6.5 million, compared to eight loans with a carrying value of $62.9 million, before related loan loss reserves of $9.1 million as of September 30, 2020. Financing Activity The balance of debt that finances the Company’s loan and investment portfolio at December 31, 2020 was $4.92 billion with a weighted average interest rate including fees of 3.03% as compared to $4.52 billion and a rate of 3.09% at September 30, 2020. The average balance of debt that finances the Company’s loan and investment portfolio for the fourth quarter of 2020 was $4.64 billion, as compared to $4.59 billion for the third quarter of 2020. The average cost of borrowings for the fourth quarter of 2020 was 3.05%, compared to 3.06% for the third quarter of 2020. The Company is subject to various financial covenants and restrictions under the terms of its collateralized securitization vehicles, financing facilities and unsecured debt. The Company believes it was in compliance with all financial covenants and restrictions as of December 31, 2020 and as of the most recent collateralized securitization vehicle determination dates in February 2021. Capital Markets The Company issued 7.0 million shares of common stock in a public offering receiving net proceeds of $93.0 million. The proceeds are primarily to be used to make investments and for general corporate purposes. Dividends The Company announced today that its Board of Directors has declared a quarterly cash dividend of $0.33 per share of common stock for the quarter ended December 31, 2020, representing a 10.0% increase from a year ago. The dividend is payable on March 19, 2021 to common stockholders of record on March 3, 2021. The ex-dividend date is March 2, 2021. As previously announced, the Board of Directors has declared cash dividends on the Company's Series A, Series B and Series C cumulative redeemable preferred stock reflecting accrued dividends from December 1, 2020 through February 28, 2021. The dividends are payable on March 1, 2021 to preferred stockholders of record on February 15, 2021. The Company will pay total dividends of $0.515625, $0.484375 and $0.53125 per share on the Series A, Series B and Series C preferred stock, respectively. 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 http://www.arbor.com in the investor relations section of the Company’s website. Those without web access should access the call telephonically at least ten minutes prior to the conference call. The dial-in numbers are (877) 876-9173 for domestic callers and (785) 424-1667 for international callers. Please use participant passcode ABRQ420 when prompted by the operator. A telephonic replay of the call will be available until February 26, 2021. The replay dial-in numbers are (800) 839-6737 for domestic callers and (402) 220-6052 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, seniors housing, healthcare 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 Fannie Mae DUS® lender and Freddie Mac Optigo Seller/Servicer. Arbor’s product platform also includes CMBS, bridge, mezzanine and preferred equity lending. 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, 2020 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. 1. Non-GAAP Financial Measures 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 page 12 of this release. Contacts:Arbor Realty Trust, Inc.Paul Elenio, Chief Financial Officer 516-506-4422pelenio@arbor.comInvestors:The Ruth GroupDaniel Kontoh-Boateng/James Salierno646-536-7019/7028dboateng@theruthgroup.comjsalierno@theruthgroup.comMedia:Bonnie HabyanChief Marketing Officer516-506-4615bhabyan@arbor.com ARBOR REALTY TRUST, INC. AND SUBSIDIARIES Consolidated Statements of Income($ in thousands—except share and per share data) Quarter Ended December 31, Year Ended December 31, 2020 2019 2020 2019 (Unaudited) (Unaudited) Interest income $86,157 $81,983 $339,465 $315,940 Interest expense 40,044 48,186 169,216 186,399 Net interest income 46,113 33,797 170,249 129,541 Other revenue: Gain on sales, including fee-based services, net 34,041 13,755 94,607 65,652 Mortgage servicing rights 68,809 27,909 165,517 90,761 Servicing revenue, net 14,229 14,587 54,385 54,542 Property operating income - 1,487 3,976 9,674 Gain (loss) on derivative instruments, net 518 4,764 (58,335) (1,962)Other income, net 706 (137) 4,109 1,178 Total other revenue 118,303 62,365 264,259 219,845 Other expenses: Employee compensation and benefits 42,728 28,456 144,380 122,102 Selling and administrative 8,334 9,205 37,348 40,329 Property operating expenses 120 2,571 4,898 10,220 Depreciation and amortization 1,810 1,847 7,640 7,510 Impairment loss on real estate owned - - - 1,000 Provision for loss sharing (net of recoveries) (6,884) (409) 14,822 1,147 Provision for credit losses (net of recoveries) 1,600 - 61,110 - Total other expenses 47,708 41,670 270,198 182,308 Income before extinguishment of debt, sale of real estate, income from equity affiliates, and income taxes 116,708 54,492 164,310 167,078 Loss on extinguishment of debt - (7,311) (3,546) (7,439)Gain (loss) on sale of real estate 1,493 - (375) - Income from equity affiliates 19,402 1,502 76,161 10,635 Provision for income taxes (24,901) (4,072) (40,393) (15,036) Net income 112,702 44,611 196,157 155,238 Preferred stock dividends 1,888 1,888 7,554 7,554 Net income attributable to noncontrolling interest 14,197 7,181 25,208 26,610 Net income attributable to common stockholders $96,617 $35,542 $163,395 $121,074 Basic earnings per common share $0.81 $0.35 $1.44 $1.30 Diluted earnings per common share $0.80 $0.34 $1.41 $1.27 Weighted average shares outstanding: Basic 119,875,315 101,611,818 113,811,471 92,851,327 Diluted 138,630,532 125,498,359 133,969,296 116,192,951 Dividends declared per common share $0.32 $0.30 $1.23 $1.14 ARBOR REALTY TRUST, INC. AND SUBSIDIARIES Consolidated Balance Sheets ($ in thousands—except share and per share data) December 31, December 31, 2020 2019 Assets: Cash and cash equivalents $339,528 $299,687 Restricted cash 197,470 210,875 Loans and investments, net (allowance for credit losses: $148,329 and $71,069, respectively) 5,285,868 4,189,960 Loans held-for-sale, net 986,919 861,360 Capitalized mortgage servicing rights, net 379,974 286,420 Securities held-to-maturity, net (allowance for credit losses: $1,644 and $0, respectively) 95,524 88,699 Investments in equity affiliates 74,274 41,800 Real estate owned, net 1,485 13,220 Due from related party 12,449 10,651 Goodwill and other intangible assets 105,451 110,700 Other assets 182,044 125,788 Total assets $7,660,986 $6,239,160 Liabilities and Equity: Credit facilities and repurchase agreements $2,234,883 $1,678,288 Collateralized loan obligations 2,517,309 2,130,121 Debt fund - 68,629 Senior unsecured notes 662,843 319,799 Convertible senior unsecured notes, net 267,973 284,152 Junior subordinated notes to subsidiary trust issuing preferred securities 141,656 140,949 Due to related party 2,365 13,100 Due to borrowers 89,325 79,148 Allowance for loss-sharing obligations 64,303 34,648 Other liabilities 197,644 134,299 Total liabilities 6,178,301 4,883,133 Equity: Arbor Realty Trust, Inc. stockholders' equity: Preferred stock, cumulative, redeemable, $0.01 par value: 100,000,000 shares authorized; special voting preferred shares; 17,560,633 and 20,369,265 shares issued and outstanding, respectively; 8.25% Series A, $38,788 aggregate liquidation preference; 1,551,500 shares issued and outstanding; 7.75% Series B, $31,500 aggregate liquidation preference; 1,260,000 shares issued and outstanding; 8.50% Series C, $22,500 aggregate liquidation preference; 900,000 shares issued and outstanding 89,472 89,501 Common stock, $0.01 par value: 500,000,000 shares authorized; 123,181,173 and 109,706,214 shares issued and outstanding, respectively 1,232 1,097 Additional paid-in capital 1,317,109 1,154,932 Accumulated deficit (63,442) (60,920) Total Arbor Realty Trust, Inc. stockholders’ equity 1,344,371 1,184,610 Noncontrolling interest 138,314 171,417 Total equity 1,482,685 1,356,027 Total liabilities and equity $7,660,986 $6,239,160 ARBOR REALTY TRUST, INC. AND SUBSIDIARIES Statement of Income Segment Information - (Unaudited)(in thousands) Quarter Ended December 31, 2020 Structured Business Agency Business Other / Eliminations (1) Consolidated Interest income $77,651 $8,506 $- $86,157 Interest expense 35,574 4,470 - 40,044 Net interest income 42,077 4,036 - 46,113 Other revenue: Gain on sales, including fee-based services, net - 34,041 - 34,041 Mortgage servicing rights - 68,809 - 68,809 Servicing revenue - 27,322 - 27,322 Amortization of MSRs - (13,093) - (13,093)Gain on derivative instruments, net 317 201 - 518 Other income, net 706 - - 706 Total other revenue 1,023 117,280 - 118,303 Other expenses: Employee compensation and benefits 11,412 31,316 - 42,728 Selling and administrative 3,059 5,275 - 8,334 Property operating expenses 120 - - 120 Depreciation and amortization 546 1,264 - 1,810 Provision for loss sharing (net of recoveries) - (6,884) - (6,884)Provision for credit losses (net of recoveries) 1,584 16 - 1,600 Total other expenses 16,721 30,987 - 47,708 Income before sale of real estate, income from equity affiliates, and income taxes 26,379 90,329 - 116,708 Gain on sale of real estate 990 503 - 1,493 Income from equity affiliates 19,402 - - 19,402 Provision for income taxes (4,966) (19,935) - (24,901) Net income 41,805 70,897 - 112,702 Preferred stock dividends 1,888 - - 1,888 Net income attributable to noncontrolling interest - - 14,197 14,197 Net income (loss) attributable to common stockholders$39,917 $70,897 $(14,197) $96,617 (1) Includes certain income or expenses not allocated to the two reportable segments. Amount reflects income attributableto the noncontrolling interest holders. ARBOR REALTY TRUST, INC. AND SUBSIDIARIES Balance Sheet Segment Information - (Unaudited)(in thousands) December 31, 2020 Structured Business Agency Business ConsolidatedAssets: Cash and cash equivalents $172,568 $166,960 $339,528Restricted cash 188,226 9,244 197,470Loans and investments, net 5,285,868 - 5,285,868Loans held-for-sale, net - 986,919 986,919Capitalized mortgage servicing rights, net - 379,974 379,974Securities held-to-maturity, net - 95,524 95,524Investments in equity affiliates 74,274 - 74,274Goodwill and other intangible assets 12,500 92,951 105,451Other assets 142,844 53,134 195,978Total assets $5,876,280 $1,784,706 $7,660,986 Liabilities: Debt obligations $4,872,626 $952,038 $5,824,664Allowance for loss-sharing obligations - 64,303 64,303Other liabilities 203,554 85,780 289,334Total liabilities $5,076,180 $1,102,121 $6,178,301 ARBOR REALTY TRUST, INC. AND SUBSIDIARIESReconciliation of Distributable Earnings to GAAP Net Income - (Unaudited)($ in thousands—except share and per share data) Quarter Ended December 31, Year Ended December 31, 2020 2019 2020 2019 Net income attributable to common stockholders$96,617 $35,542 $163,395 $121,074 Adjustments: Net income attributable to noncontrolling interest14,197 7,181 25,208 26,610Income from mortgage servicing rights(68,809) (27,909) (165,517) (90,761)Deferred tax provision9,898 1,176 4,726 150Amortization and write-offs of MSRs17,241 18,547 65,979 71,105Depreciation and amortization2,755 2,690 11,486 11,194Loss on extinguishment of debt- 7,311 3,546 7,439Provision for credit losses, net(5,742) 172 73,402 1,193(Gain) loss on derivative instruments, net(518) (4,372) 43,596 1,687Stock-based compensation1,761 1,941 9,046 9,515 Distributable earnings (1)$67,400 $42,279 $234,867 $159,206 Diluted distributable earnings per share (1)$0.49 $0.34 $1.75 $1.37 Diluted weighted average shares outstanding (1)138,630,532 125,498,359 133,969,296 116,192,951 (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.Beginning in the fourth quarter of 2020, the Company changed the name of its non-GAAP financial measure from core earnings to distributable earnings. Although calculated the same way as core earnings, the Company believes the name change to distributable earnings better reflects what this non-GAAP financial measure presents.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 (benefit) provision, CECL provisions for credit losses (adjusted for realized losses as described below) and amortization of the convertible senior notes conversion option. The Company also adds back one-time charges such as acquisition costs and one-time gains/losses on the early extinguishment of debt.The Company reduces distributable earnings for realized losses in the period management determines that a loan is deemed nonrecoverable. Loans are deemed nonrecoverable upon the earlier of: (i) 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 (ii) 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.As noted above, the Company changed the name of its non-GAAP financial measure from core earnings to distributable earnings in the fourth quarter of 2020. Core earnings was introduced as the Company's non-GAAP performance measure in the first quarter of 2020 as a replacement of adjusted funds from operations (“AFFO”). Core earnings was comparable to the previous AFFO metric, revised to exclude provisions for credit losses (including CECL) related to the Company's structured loan portfolio, securities held-to maturity and loss-sharing obligations related to the Fannie Mae program. Prior period amounts presented in the table above have been conformed to reflect these changes.