Arbor Realty Trust, Inc. (NYSE: ABR), today announced financial
results for the fourth quarter ended December 31, 2022. Arbor
reported net income for the quarter of $88.2 million, or $0.49 per
diluted common share, compared to net income of $106.0 million, or
$0.71 per diluted common share for the quarter ended December 31,
2021. Net income for the year was $284.8 million, or $1.67 per
diluted common share, compared to $317.4 million, or $2.28 per
diluted common share for the year ended December 31, 2021.
Distributable earnings for the quarter was $114.0 million, or $0.60
per diluted common share, compared to $94.2 million, or $0.57 per
diluted common share for the quarter ended December 31, 2021.
Distributable earnings for the year was $405.7 million, or $2.23
per diluted common share, compared to $313.7 million,
or $2.01 per diluted common share for the year
ended December 31, 2021. 1
Agency Business
Loan
Origination Platform
|
|
Agency Loan Volume (in thousands) |
|
|
Quarter Ended |
|
Year Ended |
|
|
December 31, 2022 |
|
September 30, 2022 |
|
December 31, 2022 |
|
December 31, 2021 |
Fannie Mae |
|
$ |
1,174,827 |
|
$ |
629,610 |
|
$ |
2,919,566 |
|
$ |
3,389,312 |
Freddie Mac |
|
|
295,258 |
|
|
350,980 |
|
|
1,353,001 |
|
|
1,016,142 |
Private Label |
|
|
25,629 |
|
|
35,671 |
|
|
217,542 |
|
|
1,436,853 |
FHA |
|
|
19,658 |
|
|
78,382 |
|
|
188,394 |
|
|
430,320 |
SFR-Fixed Rate |
|
|
33,800 |
|
|
16,678 |
|
|
89,683 |
|
|
136,931 |
Total Originations |
$ |
1,549,172 |
|
$ |
1,111,321 |
|
$ |
4,768,186 |
|
$ |
6,409,558 |
|
|
|
|
|
|
|
|
|
Total Loan Sales |
$ |
1,739,069 |
|
$ |
1,082,136 |
|
$ |
5,438,623 |
|
$ |
6,415,169 |
|
|
|
|
|
|
|
|
|
Total Loan Commitments |
$ |
1,523,069 |
|
$ |
1,464,235 |
|
$ |
5,146,718 |
|
$ |
6,347,752 |
|
|
|
|
|
|
|
|
|
For the quarter ended
December 31, 2022, the Agency Business generated revenues of $95.9
million, compared to $43.1 million for the third quarter of 2022.
Gain on sales, including fee-based services, net on the GSE/Agency
business (excluding private label and SFR) was $22.7 million for
the quarter, reflecting a margin of 1.33%, compared to $13.4
million and 1.30% for the third quarter of 2022. Income from
mortgage servicing rights was $17.1 million for the quarter,
reflecting a rate of 1.12% as a percentage of loan commitments,
compared to $17.6 million (excluding $1.8 million related to the
sale of $296.9 million of bridge loans) and 1.51% for the third
quarter of 2022.
At December 31, 2022,
loans held-for-sale was $354.1 million, with financing associated
with these loans totaling $305.4 million.
Fee-Based
Servicing Portfolio
The Company’s
fee-based servicing portfolio totaled $28.00 billion at December
31, 2022 and excludes $152.7 million of private label loans
originated that were not yet sold or securitized. Servicing
revenue, net was $27.7 million for the quarter and consisted of
servicing revenue of $43.0 million, net of amortization of mortgage
servicing rights totaling $15.3 million.
|
|
Fee-Based Servicing Portfolio ($ in thousands) |
|
|
December 31, 2022 |
|
September 30, 2022 |
December 31,
2021 |
|
|
UPB |
Wtd. Avg. Fee |
Wtd. Avg. Life (years) |
|
UPB |
Wtd. Avg. Fee |
Wtd. Avg. Life (years) |
|
UPB |
Wtd. Avg. Fee |
Wtd. Avg. Life (years) |
Fannie Mae |
|
$ |
19,038,124 |
0.502% |
8.1 |
|
$ |
18,331,457 |
0.521% |
8.3 |
|
$ |
19,127,397 |
0.535% |
8.0 |
Freddie
Mac |
|
|
5,153,207 |
0.250% |
9.0 |
|
|
4,979,612 |
0.260% |
9.5 |
|
|
4,943,905 |
0.271% |
9.3 |
Private
Label |
|
|
2,074,859 |
0.185% |
7.6 |
|
|
2,075,791 |
0.200% |
8.2 |
|
|
1,711,326 |
0.200% |
8.3 |
FHA |
|
|
1,155,893 |
0.149% |
19.5 |
|
|
1,136,684 |
0.149% |
19.8 |
|
|
985,063 |
0.154% |
21.0 |
Bridge |
|
|
301,182 |
0.125% |
1.7 |
|
|
299,696 |
0.125% |
2.3 |
|
|
- |
- |
- |
SFR-Fixed Rate |
|
274,764 |
0.198% |
6.0 |
|
|
241,887 |
0.200% |
6.2 |
|
|
191,698 |
0.200% |
6.5 |
Total |
|
$ |
27,998,029 |
0.411% |
8.6 |
|
$ |
27,065,127 |
0.424% |
8.9 |
|
$ |
26,959,389 |
0.449% |
8.8 |
Loans sold under the
Fannie Mae program contain an obligation to partially guarantee the
performance of the loan (“loss-sharing obligations”) and includes
$34.4 million for the fair value of the guarantee obligation
undertaken at December 31, 2022. The Company recorded a $3.5
million net provision for loss sharing associated with CECL for the
fourth quarter of 2022. At December 31, 2022, the Company’s total
CECL allowance for loss-sharing obligations was $22.7 million,
representing 0.12% of the Fannie Mae servicing portfolio.
Structured
Business
Portfolio and
Investment Activity
|
|
Structured Portfolio Activity ($ in thousands) |
|
|
Quarter Ended |
|
Year Ended |
|
|
December 31, 2022 |
|
September 30, 2022 |
|
December 31, 2022 |
|
December 31, 2021 |
|
|
UPB |
% |
|
UPB |
% |
|
UPB |
% |
|
UPB |
% |
Bridge: |
|
|
|
|
|
|
|
|
|
|
|
|
Multifamily |
|
$ |
295,451 |
59 |
% |
|
$ |
592,844 |
77 |
% |
|
$ |
5,468,222 |
89 |
% |
|
$ |
9,101,139 |
94 |
% |
SFR |
|
|
161,580 |
32 |
% |
|
|
163,851 |
21 |
% |
|
|
613,819 |
10 |
% |
|
|
415,501 |
4 |
% |
|
|
|
457,031 |
91 |
% |
|
|
756,695 |
98 |
% |
|
|
6,082,041 |
99 |
% |
|
|
9,516,640 |
98 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Mezzanine/Preferred Equity |
|
43,497 |
9 |
% |
|
|
17,970 |
2 |
% |
|
|
69,606 |
1 |
% |
|
|
203,875 |
2 |
% |
Total
Originations |
|
$ |
500,528 |
100 |
% |
|
$ |
774,665 |
100 |
% |
|
$ |
6,151,647 |
100 |
% |
|
$ |
9,720,515 |
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Loans Originated |
|
50 |
|
|
|
52 |
|
|
|
318 |
|
|
|
422 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SFR
Commitments |
|
$ |
352,673 |
|
|
$ |
457,564 |
|
|
$ |
1,078,744 |
|
|
$ |
264,101 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Runoff |
|
$ |
1,117,806 |
|
|
$ |
911,790 |
|
|
$ |
3,818,554 |
|
|
$ |
2,516,771 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Structured Portfolio ($ in thousands) |
|
|
|
|
|
December 31, 2022 |
|
September 30, 2022 |
|
December 31, 2021 |
|
|
|
|
UPB |
% |
|
UPB |
% |
|
UPB |
% |
|
|
|
Bridge: |
|
|
|
|
|
|
|
|
|
|
|
|
Multifamily |
|
$ |
12,830,999 |
89 |
% |
|
$ |
13,455,073 |
90 |
% |
|
$ |
10,800,896 |
89 |
% |
|
|
|
SFR |
|
|
927,373 |
6 |
% |
|
|
825,771 |
6 |
% |
|
|
408,245 |
3 |
% |
|
|
|
Other |
|
|
337,682 |
2 |
% |
|
|
337,682 |
2 |
% |
|
|
541,568 |
4 |
% |
|
|
|
|
|
|
14,096,054 |
98 |
% |
|
|
14,618,526 |
98 |
% |
|
|
11,750,709 |
97 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mezzanine/Preferred Equity |
|
324,224 |
2 |
% |
|
|
335,003 |
2 |
% |
|
|
378,891 |
3 |
% |
|
|
|
SFR
Permanent |
|
|
35,845 |
< 1 |
% |
|
|
36,114 |
< 1 |
% |
|
|
29,395 |
< 1 |
% |
|
|
|
Total
Portfolio |
|
$ |
14,456,123 |
100 |
% |
|
$ |
14,989,643 |
100 |
% |
|
$ |
12,158,995 |
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2022,
the loan and investment portfolio’s unpaid principal balance,
excluding loan loss reserves, was $14.56 billion, with a weighted
average current interest pay rate of 8.17%, compared to $14.99
billion and 6.90% at September 30, 2022. Including certain fees
earned and costs associated with the loan and investment portfolio,
the weighted average current interest pay rate was 8.42% at
December 31, 2022, compared to 7.15% at September 30, 2022.
The average balance of
the Company’s loan and investment portfolio during the fourth
quarter of 2022, excluding loan loss reserves, was $14.83 billion
with a weighted average yield of 8.12%, compared to $15.01 billion
and 6.57% for the third quarter of 2022. The increase in average
yield was primarily due to increases in the benchmark index rates
in the fourth quarter of 2022, as well as from back interest
received upon the payoff of a non-performing loan.
During the fourth quarter of 2022, the Company
recorded a $10.3 million provision for loan losses associated with
CECL. At December 31, 2022, the Company’s total allowance for loan
losses was $132.6 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, compared to four loans with a
carrying value of $24.2 million, before related loan loss reserves
of $5.1 million at September 30, 2022.
Financing
Activity
The Company completed
its first loan securitization vehicle through Freddie Mac’s Q
Series securitization program, totaling $315.8 million of first
priority multifamily mortgage loans. A series of pass-through
certificates totaling $236.9 million were purchased by third-party
investors, and the Company retained subordinate and interest-only
classes in the issuing vehicle of $79.0 million. The facility has
an initial interest rate of 2.00% over one-month SOFR, excluding
certain fees and transaction costs.
The balance of debt
that finances the Company’s loan and investment portfolio at
December 31, 2022 was $13.28 billion with a weighted average
interest rate including fees of 6.50% as compared to $13.94 billion
and a rate of 5.33% at September 30, 2022. The average balance of
debt that finances the Company’s loan and investment portfolio for
the fourth quarter of 2022 was $13.69 billion, as compared to
$13.90 billion for the third quarter of 2022. The average cost of
borrowings for the fourth quarter of 2022 was 5.80%, compared to
4.49% for the third quarter of 2022. The increase in average cost
was due to increases in the benchmark index rates in the fourth
quarter of 2022.
Capital
Markets
The Company issued
$150.0 million of 8.50% senior notes due 2027 in a private
placement. The Company received proceeds totaling $147.7 million,
net of discount and fees from this offering. The Company used the
net proceeds to repay debt and for general corporate purposes.
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
December 31, 2022. The dividend is payable on March 17, 2023 to
common stockholders of record on March 3, 2023. The ex-dividend
date is March 2, 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)
267-6316 for domestic callers and (203) 518-9783 for international
callers. Please use participant passcode ABRQ422 when prompted by
the operator.
A telephonic replay of
the call will be available until February 24, 2023. The replay
dial-in numbers are (800) 688-7945 for domestic callers and (402)
220-1370 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 February 8, 2023.
Contact: |
Arbor Realty Trust, Inc.Paul Elenio, Chief Financial Officer
516-506-4422pelenio@arbor.com |
ARBOR REALTY
TRUST, INC. AND SUBSIDIARIES |
Consolidated
Statements of Income - (Unaudited) |
($ in
thousands—except share and per share data) |
|
|
|
|
|
|
|
|
|
Quarter Ended
December 31, |
|
Year Ended December
31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
Interest
income |
$ |
320,597 |
|
|
$ |
144,315 |
|
|
$ |
948,401 |
|
|
$ |
466,087 |
|
Interest
expense |
|
207,538 |
|
|
|
67,883 |
|
|
|
557,617 |
|
|
|
212,005 |
|
Net interest income |
|
113,059 |
|
|
|
76,432 |
|
|
|
390,784 |
|
|
|
254,082 |
|
|
|
|
|
|
|
|
|
Other revenue: |
|
|
|
|
|
|
|
Gain on
sales, including fee-based services, net |
|
23,290 |
|
|
|
36,935 |
|
|
|
55,816 |
|
|
|
123,037 |
|
Mortgage
servicing rights |
|
17,059 |
|
|
|
34,542 |
|
|
|
69,346 |
|
|
|
130,230 |
|
Servicing
revenue, net |
|
27,679 |
|
|
|
23,875 |
|
|
|
92,192 |
|
|
|
74,814 |
|
Property
operating income |
|
846 |
|
|
|
185 |
|
|
|
1,877 |
|
|
|
185 |
|
Gain (loss)
on derivative instruments, net |
|
16,526 |
|
|
|
4,636 |
|
|
|
26,609 |
|
|
|
(2,684 |
) |
Other
income, net |
|
(1,500 |
) |
|
|
3,425 |
|
|
|
(17,563 |
) |
|
|
7,566 |
|
Total other revenue |
|
83,900 |
|
|
|
103,598 |
|
|
|
228,277 |
|
|
|
333,148 |
|
|
|
|
|
|
|
|
|
Other expenses: |
|
|
|
|
|
|
|
Employee
compensation and benefits |
|
42,089 |
|
|
|
43,149 |
|
|
|
161,825 |
|
|
|
171,796 |
|
Selling and
administrative |
|
13,030 |
|
|
|
11,868 |
|
|
|
53,990 |
|
|
|
45,575 |
|
Property
operating expenses |
|
694 |
|
|
|
297 |
|
|
|
2,136 |
|
|
|
718 |
|
Depreciation
and amortization |
|
2,640 |
|
|
|
1,865 |
|
|
|
8,732 |
|
|
|
7,215 |
|
Provision
for loss sharing (net of recoveries) |
|
4,061 |
|
|
|
(5,096 |
) |
|
|
1,862 |
|
|
|
(6,167 |
) |
Provision
for credit losses (net of recoveries) |
|
11,469 |
|
|
|
(8,424 |
) |
|
|
21,169 |
|
|
|
(21,113 |
) |
Litigation
settlement |
|
7,350 |
|
|
|
- |
|
|
|
7,350 |
|
|
|
- |
|
Total other expenses |
|
81,333 |
|
|
|
43,659 |
|
|
|
257,064 |
|
|
|
198,024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
before extinguishment of debt, sale of real estate, income from
equity affiliates, and income taxes |
|
115,626 |
|
|
|
136,371 |
|
|
|
361,997 |
|
|
|
389,206 |
|
Loss on
extinguishment of debt |
|
(320 |
) |
|
|
(2,004 |
) |
|
|
(4,933 |
) |
|
|
(3,374 |
) |
Gain on sale
of real estate |
|
- |
|
|
|
2,466 |
|
|
|
- |
|
|
|
3,693 |
|
(Loss)
income from equity affiliates |
|
(4,260 |
) |
|
|
2,472 |
|
|
|
14,247 |
|
|
|
34,567 |
|
Provision
for income taxes |
|
(4,318 |
) |
|
|
(12,929 |
) |
|
|
(17,484 |
) |
|
|
(46,285 |
) |
|
|
|
|
|
|
|
|
Net
income |
|
106,728 |
|
|
|
126,376 |
|
|
|
353,827 |
|
|
|
377,807 |
|
|
|
|
|
|
|
|
|
Preferred
stock dividends |
|
10,342 |
|
|
|
8,672 |
|
|
|
40,954 |
|
|
|
21,888 |
|
Net income
attributable to noncontrolling interest |
|
8,234 |
|
|
|
11,701 |
|
|
|
28,044 |
|
|
|
38,507 |
|
Net income
attributable to common stockholders |
$ |
88,152 |
|
|
$ |
106,003 |
|
|
$ |
284,829 |
|
|
$ |
317,412 |
|
|
|
|
|
|
|
|
|
Basic
earnings per common share |
$ |
0.51 |
|
|
$ |
0.72 |
|
|
$ |
1.72 |
|
|
$ |
2.30 |
|
Diluted
earnings per common share |
$ |
0.49 |
|
|
$ |
0.71 |
|
|
$ |
1.67 |
|
|
$ |
2.28 |
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
174,444,084 |
|
|
|
147,899,133 |
|
|
|
165,355,167 |
|
|
|
137,830,691 |
|
Diluted |
|
209,743,771 |
|
|
|
166,104,325 |
|
|
|
199,112,630 |
|
|
|
156,089,595 |
|
|
|
|
|
|
|
|
|
Dividends
declared per common share |
$ |
0.40 |
|
|
$ |
0.36 |
|
|
$ |
1.54 |
|
|
$ |
1.38 |
|
|
|
|
|
|
|
|
|
ARBOR REALTY
TRUST, INC. AND SUBSIDIARIES |
Consolidated Balance
Sheets |
($ in
thousands—except share and per share data) |
|
|
|
|
|
December 31, |
|
December 31, |
|
2022 |
|
2021 |
|
|
|
|
Assets: |
|
|
|
Cash and cash equivalents |
$ |
534,357 |
|
$ |
404,580 |
Restricted
cash |
|
713,808 |
|
|
486,690 |
Loans and
investments, net (allowance for credit losses of $132,559 and
$113,241) |
|
14,254,674 |
|
|
11,981,048 |
Loans
held-for-sale, net |
|
354,070 |
|
|
1,093,609 |
Capitalized
mortgage servicing rights, net |
|
401,471 |
|
|
422,734 |
Securities
held-to-maturity, net (allowance for credit losses of $3,153 and
$1,753) |
|
156,547 |
|
|
140,484 |
Investments
in equity affiliates |
|
79,130 |
|
|
89,676 |
Due from
related party |
|
77,419 |
|
|
84,318 |
Goodwill and
other intangible assets |
|
96,069 |
|
|
100,760 |
Other
assets |
|
371,440 |
|
|
269,946 |
Total assets |
$ |
17,038,985 |
|
$ |
15,073,845 |
|
|
|
|
Liabilities and Equity: |
|
|
|
Credit and
repurchase facilities |
$ |
3,841,814 |
|
$ |
4,481,579 |
Securitized
debt |
|
7,849,270 |
|
|
5,892,810 |
Senior
unsecured notes |
|
1,385,994 |
|
|
1,280,545 |
Convertible
senior unsecured notes, net |
|
280,356 |
|
|
259,385 |
Junior
subordinated notes to subsidiary trust issuing preferred
securities |
|
143,128 |
|
|
142,382 |
Due to
related party |
|
12,350 |
|
|
26,570 |
Due to
borrowers |
|
61,237 |
|
|
96,641 |
Allowance
for loss-sharing obligations |
|
57,168 |
|
|
56,064 |
Other
liabilities |
|
335,789 |
|
|
287,885 |
Total liabilities |
|
13,967,106 |
|
|
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 - 178,230,522 |
|
|
|
and 151,362,181 shares issued and
outstanding |
|
1,782 |
|
|
1,514 |
Additional paid-in capital |
|
2,204,481 |
|
|
1,797,913 |
Retained earnings |
|
97,049 |
|
|
62,532 |
Total Arbor
Realty Trust, Inc. stockholders’ equity |
|
2,936,996 |
|
|
2,418,122 |
|
|
|
|
Noncontrolling interest |
|
134,883 |
|
|
131,862 |
Total
equity |
|
3,071,879 |
|
|
2,549,984 |
|
|
|
|
Total
liabilities and equity |
$ |
17,038,985 |
|
$ |
15,073,845 |
|
|
|
|
ARBOR REALTY
TRUST, INC. AND SUBSIDIARIES |
Statement of Income
Segment Information - (Unaudited) |
(in thousands) |
|
|
|
|
|
|
|
|
|
Quarter Ended December 31, 2022 |
|
|
|
|
|
|
|
|
|
Structured Business |
|
Agency Business |
|
Other / Eliminations (1) |
|
Consolidated |
|
|
|
|
|
|
|
|
Interest income |
$ |
305,775 |
|
|
$ |
14,822 |
|
|
$ |
- |
|
|
$ |
320,597 |
|
Interest
expense |
|
199,968 |
|
|
|
7,570 |
|
|
|
- |
|
|
|
207,538 |
|
Net interest income |
|
105,807 |
|
|
|
7,252 |
|
|
|
- |
|
|
|
113,059 |
|
|
|
|
|
|
|
|
|
Other revenue: |
|
|
|
|
|
|
|
Gain on
sales, including fee-based services, net |
|
- |
|
|
|
23,290 |
|
|
|
- |
|
|
|
23,290 |
|
Mortgage
servicing rights |
|
- |
|
|
|
17,059 |
|
|
|
- |
|
|
|
17,059 |
|
Servicing
revenue |
|
- |
|
|
|
43,023 |
|
|
|
- |
|
|
|
43,023 |
|
Amortization
of MSRs |
|
- |
|
|
|
(15,344 |
) |
|
|
- |
|
|
|
(15,344 |
) |
Property
operating income |
|
846 |
|
|
|
- |
|
|
|
- |
|
|
|
846 |
|
Gain on
derivative instruments, net |
|
- |
|
|
|
16,526 |
|
|
|
- |
|
|
|
16,526 |
|
Other
income, net |
|
2,012 |
|
|
|
(3,512 |
) |
|
|
- |
|
|
|
(1,500 |
) |
Total other revenue |
|
2,858 |
|
|
|
81,042 |
|
|
|
- |
|
|
|
83,900 |
|
|
|
|
|
|
|
|
|
Other expenses: |
|
|
|
|
|
|
|
Employee
compensation and benefits |
|
13,338 |
|
|
|
28,751 |
|
|
|
- |
|
|
|
42,089 |
|
Selling and
administrative |
|
6,260 |
|
|
|
6,770 |
|
|
|
- |
|
|
|
13,030 |
|
Property
operating expenses |
|
694 |
|
|
|
- |
|
|
|
- |
|
|
|
694 |
|
Depreciation
and amortization |
|
1,467 |
|
|
|
1,173 |
|
|
|
- |
|
|
|
2,640 |
|
Provision
for loss sharing (net of recoveries) |
|
- |
|
|
|
4,061 |
|
|
|
- |
|
|
|
4,061 |
|
Provision
for credit losses (net of recoveries) |
|
10,407 |
|
|
|
1,062 |
|
|
|
- |
|
|
|
11,469 |
|
Litigation
settlement |
|
7,350 |
|
|
|
- |
|
|
|
- |
|
|
|
7,350 |
|
Total other expenses |
|
39,516 |
|
|
|
41,817 |
|
|
|
- |
|
|
|
81,333 |
|
|
|
|
|
|
|
|
|
Income
before extinguishment of debt, income from equity affiliates, and
income taxes |
|
69,149 |
|
|
|
46,477 |
|
|
|
- |
|
|
|
115,626 |
|
|
|
|
|
|
|
|
|
Loss on
extinguishment of debt |
|
(320 |
) |
|
|
- |
|
|
|
- |
|
|
|
(320 |
) |
Loss from
equity affiliates |
|
(4,260 |
) |
|
|
- |
|
|
|
- |
|
|
|
(4,260 |
) |
Benefit from
(provision for) income taxes |
|
548 |
|
|
|
(4,866 |
) |
|
|
- |
|
|
|
(4,318 |
) |
|
|
|
|
|
|
|
|
Net
income |
|
65,117 |
|
|
|
41,611 |
|
|
|
- |
|
|
|
106,728 |
|
|
|
|
|
|
|
|
|
Preferred
stock dividends |
|
10,342 |
|
|
|
- |
|
|
|
- |
|
|
|
10,342 |
|
Net income
attributable to noncontrolling interest |
|
- |
|
|
|
- |
|
|
|
8,234 |
|
|
|
8,234 |
|
Net income
attributable to common stockholders |
$ |
54,775 |
|
|
$ |
41,611 |
|
|
$ |
(8,234 |
) |
|
$ |
88,152 |
|
|
|
|
|
|
|
|
|
(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) |
|
|
|
|
|
|
|
December 31, 2022 |
|
Structured Business |
|
Agency Business |
|
Consolidated |
Assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
200,514 |
|
$ |
333,843 |
|
$ |
534,357 |
Restricted
cash |
|
713,615 |
|
|
193 |
|
|
713,808 |
Loans and
investments, net |
|
14,254,674 |
|
|
- |
|
|
14,254,674 |
Loans
held-for-sale, net |
|
- |
|
|
354,070 |
|
|
354,070 |
Capitalized
mortgage servicing rights, net |
|
- |
|
|
401,471 |
|
|
401,471 |
Securities
held-to-maturity, net |
|
- |
|
|
156,547 |
|
|
156,547 |
Investments
in equity affiliates |
|
79,130 |
|
|
- |
|
|
79,130 |
Goodwill and
other intangible assets |
|
12,500 |
|
|
83,569 |
|
|
96,069 |
Other
assets |
|
367,837 |
|
|
81,022 |
|
|
448,859 |
Total
assets |
$ |
15,628,270 |
|
$ |
1,410,715 |
|
$ |
17,038,985 |
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
Debt
obligations |
$ |
13,195,120 |
|
$ |
305,442 |
|
$ |
13,500,562 |
Allowance
for loss-sharing obligations |
|
- |
|
|
57,168 |
|
|
57,168 |
Other
liabilities |
|
299,559 |
|
|
109,817 |
|
|
409,376 |
Total
liabilities |
$ |
13,494,679 |
|
$ |
472,427 |
|
$ |
13,967,106 |
|
|
|
|
|
|
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 December 31, |
|
Year Ended December 31, |
|
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders |
$ |
88,152 |
|
|
$ |
106,003 |
|
|
$ |
284,829 |
|
|
$ |
317,412 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
Net income
attributable to noncontrolling interest |
|
8,234 |
|
|
|
11,701 |
|
|
|
28,044 |
|
|
|
38,507 |
|
|
|
Income from
mortgage servicing rights |
|
(17,059 |
) |
|
|
(34,542 |
) |
|
|
(69,346 |
) |
|
|
(130,230 |
) |
|
|
Deferred tax
provision (benefit) |
|
6,092 |
|
|
|
201 |
|
|
|
(1,741 |
) |
|
|
10,892 |
|
|
|
Amortization
and write-offs of MSRs |
|
22,528 |
|
|
|
29,268 |
|
|
|
104,378 |
|
|
|
91,356 |
|
|
|
Depreciation
and amortization |
|
3,225 |
|
|
|
2,763 |
|
|
|
11,069 |
|
|
|
10,900 |
|
|
|
Loss on
extinguishment of debt |
|
320 |
|
|
|
2,004 |
|
|
|
4,933 |
|
|
|
3,374 |
|
|
|
Provision
for credit losses, net |
|
14,823 |
|
|
|
(21,646 |
) |
|
|
25,077 |
|
|
|
(39,856 |
) |
|
|
(Gain) loss
on derivative instruments, net |
|
(14,992 |
) |
|
|
(1,053 |
) |
|
|
3,480 |
|
|
|
432 |
|
|
|
Gain on real
estate from settlement of loan |
|
- |
|
|
|
(2,466 |
) |
|
|
- |
|
|
|
(2,466 |
) |
|
|
Stock-based
compensation |
|
2,643 |
|
|
|
1,943 |
|
|
|
14,973 |
|
|
|
9,929 |
|
|
|
Loss on
redemption of preferred stock |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
3,479 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributable earnings (1) |
$ |
113,966 |
|
|
$ |
94,176 |
|
|
$ |
405,696 |
|
|
$ |
313,729 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
distributable earnings per share (1) |
$ |
0.60 |
|
|
$ |
0.57 |
|
|
$ |
2.23 |
|
|
$ |
2.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
weighted average shares outstanding (1) (2) |
|
191,273,691 |
|
|
|
166,104,325 |
|
|
|
182,224,404 |
|
|
|
156,089,595 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 year ended December 31, 2022, the
diluted weighted average shares outstanding excluded 18,470,080 and
16,888,226 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), amortization of the
convertible senior notes conversion option (in comparative periods
prior to 2022) and gains/losses on the receipt of real estate from
the settlement of loans (prior to the sale of the real estate). The
Company also adds back one-time charges such as acquisition costs
and one-time gains/losses on the early extinguishment of debt and
redemption of preferred stock. |
|
|
|
|
|
The Company reduces
distributable earnings for realized losses in the period management
determines that a loan is deemed nonrecoverable in whole or in
part. Loans are deemed nonrecoverable upon the earlier of: (1) when
the loan receivable is settled (i.e., when the loan is repaid, or
in the case of foreclosure, when the underlying asset is sold); or
(2) when management determines that it is nearly certain that all
amounts due will not be collected. The realized loss amount is
equal to the difference between the cash received, or expected to
be received, and the book value of the asset. |
|
|
|
|
|
Distributable
earnings is not intended to be an indication of the Company's cash
flows from operating activities (determined in accordance with
GAAP) or a measure of its liquidity, nor is it entirely indicative
of funding the Company's cash needs, including its ability to make
cash distributions. The Company's calculation of distributable
earnings may be different from the calculations used by other
companies and, therefore, comparability may be limited. |
|
|
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