Arbor Realty Trust, Inc. (NYSE:ABR), today announced financial
results for the fourth quarter and year ended December 31,
2019. Arbor reported net income for the quarter of $35.5
million, or $0.34 per diluted common share, compared to $37.2
million, or $0.47 per diluted common share for the quarter ended
December 31, 2018. Net income for the year was $121.1
million, or $1.27 per diluted common share, compared to $108.3
million, or $1.50 per diluted common share for the year ended
December 31, 2018. Adjusted funds from operations (“AFFO”) for the
quarter was $42.1 million, or $0.34 per diluted common share,
compared to $29.0 million, or $0.29 per diluted common share for
the quarter ended December 31, 2018. AFFO for the year was
$158.0 million, or $1.36 per diluted common share, compared to
$118.1 million, or $1.26 per diluted common share for the year
ended December 31, 2018.
1
Agency
Business
Loan
Origination Platform
Agency Loan Volume (in thousands) |
|
|
Quarter Ended |
|
Year Ended |
|
|
December 31, 2019 |
|
September 30, 2019 |
|
December 31, 2019 |
|
December 31, 2018 |
Fannie Mae |
|
$ |
764,314 |
|
$ |
1,097,095 |
|
$ |
3,346,272 |
|
$ |
3,332,100 |
Freddie Mac |
|
96,993 |
|
203,981 |
|
728,317 |
|
1,587,958 |
FHA |
|
78,428 |
|
- |
|
123,095 |
|
153,523 |
CMBS/Conduit |
|
- |
|
34,000 |
|
211,325 |
|
50,908 |
Private Label |
|
320,476 |
|
80,740 |
|
401,216 |
|
- |
Total Originations |
|
$ |
1,260,211 |
|
$ |
1,415,816 |
|
$ |
4,810,225 |
|
$ |
5,124,489 |
|
|
|
|
|
|
|
|
|
Total Loan Sales |
|
$ |
887,868 |
|
$ |
1,488,430 |
|
$ |
4,401,112 |
|
$ |
4,924,144 |
|
|
|
|
|
|
|
|
|
Total Loan Commitments |
|
$ |
1,203,194 |
|
$ |
1,477,436 |
|
$ |
4,829,721 |
|
$ |
5,104,072 |
|
|
|
|
|
|
|
|
|
For the quarter ended December 31, 2019, the
Agency Business generated revenues of $68.5 million, compared to
$67.0 million for the third quarter of 2019. Gain on sales,
including fee-based services, net was $13.8 million for the
quarter, reflecting a margin of 1.55% on loan sales, compared to
$21.3 million and 1.43% for the third quarter of 2019. Income from
mortgage servicing rights was $27.9 million for the quarter,
reflecting a rate of 2.32% as a percentage of loan commitments,
compared to $29.9 million and 2.02% for the third quarter of
2019.
At December 31, 2019,
loans held-for-sale was $861.4 million which was primarily
comprised of unpaid principal balances totaling $847.1 million,
with financing associated with these loans totaling $743.6
million.
Fee-Based
Servicing Portfolio
Our fee-based
servicing portfolio totaled $20.06 billion at December 31, 2019, an
increase of 0.4% from September 30, 2019, primarily a result of
$939.7 million of new loan originations (excluding $320.5 million
of private label loans that are yet to be sold), net of $846.5
million in portfolio runoff during the quarter. Servicing revenue,
net was $14.6 million for the quarter and consisted of servicing
revenue of $26.5 million, net of amortization of mortgage servicing
rights totaling $12.0 million.
|
|
Fee-Based Servicing Portfolio ($ in thousands) |
|
|
As of December 31, 2019 |
|
As of September 30, 2019 |
|
|
UPB |
Wtd. Avg. Fee |
Wtd. Avg. Life (in years) |
|
UPB |
Wtd. Avg. Fee |
Wtd. Avg. Life (in years) |
Fannie Mae |
|
$ |
14,832,844 |
0.493% |
7.8 |
|
$ |
14,616,816 |
0.492% |
8.1 |
Freddie Mac |
|
4,534,714 |
0.300% |
10.6 |
|
4,664,750 |
0.300% |
11.0 |
FHA |
|
691,519 |
0.154% |
18.7 |
|
684,316 |
0.154% |
19.2 |
Total |
|
$ |
20,059,077 |
0.438% |
8.8 |
|
$ |
19,965,882 |
0.435% |
9.2 |
|
|
|
|
|
|
|
|
|
Loans sold under the
Fannie Mae program contain an obligation to partially guarantee the
performance of the loan (“loss-sharing obligations”). At December
31, 2019, the Company’s allowance for loss-sharing obligations was
$34.6 million, representing 0.23% of the Fannie Mae servicing
portfolio.
Structured
Business
Portfolio and Investment
Activity
Quarter ended December 31, 2019:
- Originated 66 loans totaling $831.4 million, of which $799.2
million was funded at December 31, 2019, and consisted primarily of
51 bridge loans totaling $765.0 million
- Payoffs and pay downs on 25 loans totaling $508.9 million
- Portfolio growth of $317.9 million, or 8%
Year ended December 31, 2019:
- Record origination volume of $2.80 billion, a 69% increase from
2018, and consists of 173 new loan originations, of which 140 were
bridge loans for $2.60 billion
- Payoffs and pay downs on 137 loans totaling $1.75 billion
- Portfolio growth of $1.00 billion, or 30%
At December 31, 2019,
the loan and investment portfolio’s unpaid principal balance,
excluding loan loss reserves, was $4.29 billion, with a weighted
average current interest pay rate of 5.98%, compared to $3.97
billion and 6.33% at September 30, 2019. Including certain
fees earned and costs associated with the loan and investment
portfolio, the weighted average current interest pay rate was 6.68%
at December 31, 2019, compared to 7.04% at September 30, 2019.
The average balance of
the Company’s loan and investment portfolio during the fourth
quarter of 2019, excluding loan loss reserves, was $4.02 billion
with a weighted average yield of 7.18%, compared to $3.94 billion
and 7.31% for the third quarter of 2019. The decrease in average
yield was primarily due to a decrease in LIBOR in the fourth
quarter, partially offset by higher fees on loan payoffs in the
fourth quarter as compared to the third quarter.
At December 31, 2019, the Company’s total loan
loss reserves were $71.1 million on five loans with an aggregate
carrying value before loan loss reserves of $130.7 million. The
Company also had three non-performing loans with a carrying value
of $3.5 million, net of related loan loss reserves of $1.7
million.
Financing
Activity
The Company completed
its twelfth collateralized securitization vehicle (“CLO XII”)
totaling $635.0 million of real estate related assets and cash.
Investment grade-rated notes totaling $534.2 million were issued,
and the Company retained subordinate interests in the issuing
vehicle of $100.8 million. The facility has a three-year asset
replenishment period and an initial weighted average interest rate
of 1.50% over LIBOR, excluding fees and transaction costs.
The Company completed
the unwind of CLO VII, redeeming $279.0 million of outstanding
notes repaid with proceeds received from the refinancing of CLO
VII’s outstanding assets primarily within CLO XII, which has an
interest rate 49 basis points lower than CLO VII.
The balance of debt
that finances the Company’s loan and investment portfolio at
December 31, 2019 was $3.93 billion with a weighted average
interest rate including fees of 4.35% as compared to $3.52 billion
and a rate of 4.65% at September 30, 2019. The average balance of
debt that finances the Company’s loan and investment portfolio for
the fourth quarter of 2019 was $3.76 billion, as compared to $3.52
billion for the third quarter of 2019. The average cost of
borrowings for the fourth quarter was 4.60%, compared to 4.87% for
the third quarter of 2019. The decrease in average costs was
primarily due to a decrease in LIBOR in the fourth quarter,
partially offset by the acceleration of fees related to the early
repayment of debt in the fourth quarter.
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, 2019 and as of the
most recent collateralized securitization vehicle determination
dates in January 2020.
Capital
Markets
The Company issued 7.5
million shares of common stock in a public offering receiving net
proceeds of $104.0 million. The proceeds are primarily to be used
to make investments and for general corporate purposes.
The Company issued
$264.0 million in aggregate principal amount of 4.75% convertible
senior notes due 2022 in a private placement, including the
exercised initial purchaser’s over-allotment option of $34.0
million. The Company received proceeds totaling $256.5 million, net
of the underwriter’s discount and fees from this offering. The
Company used the net proceeds to exchange $103.5 million of its
5.25% convertible senior notes due 2021 that were issued on July 3,
2018 and $125.2 million of 5.25% convertible senior notes due 2021
that were issued on July 20, 2018 for a combination of $233.1
million in cash and 4.5 million shares of the Company’s common
stock to settle such exchanges. The remaining net proceeds are to
be used for general corporate purposes.
The Company issued $110.0 million in
aggregate principal amount of 4.75% senior unsecured notes due 2024
in a private placement, generating net proceeds of $108.2
million after deducting offering expenses. This offering
reflects a 100 basis point reduction in rate as compared to our
previous senior unsecured notes offering in March 2019. The
proceeds were 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 $0.30 per share of common stock for the quarter ended
December 31, 2019. The dividend is payable on March 17, 2020 to
common stockholders of record on February 28, 2020. The ex-dividend
date is February 27, 2020.
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, 2019
through February 29, 2020. The dividends are payable on March 2,
2020 to preferred stockholders of record on February 15, 2020. 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 (866) 516-5034 for domestic callers and
(678) 509-7613 for international callers. Please use participant
passcode 4199042.
A telephonic replay of
the call will be available until February 21, 2020. The replay
dial-in numbers are (855) 859-2056 for domestic callers and (404)
537-3406 for international callers. Please use passcode
4199042.
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, continued ability to source new investments, changes in
interest rates and/or credit spreads, changes in the real estate
markets, and other risks detailed in Arbor’s Annual Report on Form
10-K for the year ended December 31, 2018 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 516-506-4422
pelenio@arbor.com |
Investors:The Ruth
GroupAlexander Lobo646-536-7037alobo@theruthgroup.com |
Media:Bonnie Habyan, Chief
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 |
|
|
Year
Ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
Interest income |
|
$ |
81,983 |
|
|
$ |
73,360 |
|
|
|
$ |
315,940 |
|
|
$ |
251,768 |
|
|
Interest expense |
|
|
48,186 |
|
|
|
42,999 |
|
|
|
|
186,399 |
|
|
|
153,818 |
|
|
|
Net interest
income |
|
|
33,797 |
|
|
|
30,361 |
|
|
|
|
129,541 |
|
|
|
97,950 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other revenue: |
|
|
|
|
|
|
|
|
|
Gain on sales, including fee-based services, net |
|
|
13,755 |
|
|
|
18,735 |
|
|
|
|
65,652 |
|
|
|
70,002 |
|
|
Mortgage servicing rights |
|
|
27,909 |
|
|
|
36,052 |
|
|
|
|
90,761 |
|
|
|
98,839 |
|
|
Servicing revenue, net |
|
|
14,587 |
|
|
|
11,372 |
|
|
|
|
54,542 |
|
|
|
46,034 |
|
|
Property operating income |
|
|
1,487 |
|
|
|
1,569 |
|
|
|
|
9,674 |
|
|
|
10,095 |
|
|
Other income, net |
|
|
4,627 |
|
|
|
9,736 |
|
|
|
|
(784 |
) |
|
|
8,161 |
|
|
|
Total other
revenue |
|
|
62,365 |
|
|
|
77,464 |
|
|
|
|
219,845 |
|
|
|
233,131 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expenses: |
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
|
28,456 |
|
|
|
26,386 |
|
|
|
|
122,102 |
|
|
|
110,470 |
|
|
Selling and administrative |
|
|
9,205 |
|
|
|
9,291 |
|
|
|
|
40,329 |
|
|
|
37,074 |
|
|
Property operating expenses |
|
|
2,571 |
|
|
|
2,342 |
|
|
|
|
10,220 |
|
|
|
10,431 |
|
|
Depreciation and amortization |
|
|
1,847 |
|
|
|
1,914 |
|
|
|
|
7,510 |
|
|
|
7,453 |
|
|
Impairment loss on real estate owned |
|
|
- |
|
|
|
- |
|
|
|
|
1,000 |
|
|
|
2,000 |
|
|
Provision for loss sharing (net of recoveries) |
|
|
(409 |
) |
|
|
1,003 |
|
|
|
|
1,147 |
|
|
|
3,843 |
|
|
Provision for loan losses (net of recoveries) |
|
|
- |
|
|
|
9,319 |
|
|
|
|
- |
|
|
|
8,353 |
|
|
Litigation settlement gain |
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
(10,170 |
) |
|
|
Total other
expenses |
|
|
41,670 |
|
|
|
50,255 |
|
|
|
|
182,308 |
|
|
|
169,454 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before extinguishment of debt, income from |
|
|
|
|
|
|
|
|
|
|
equity
affiliates and income taxes |
|
|
54,492 |
|
|
|
57,570 |
|
|
|
|
167,078 |
|
|
|
161,627 |
|
|
Loss on extinguishment of debt |
|
|
(7,311 |
) |
|
|
(82 |
) |
|
|
|
(7,439 |
) |
|
|
(5,041 |
) |
|
Income from equity affiliates |
|
|
1,502 |
|
|
|
91 |
|
|
|
|
10,635 |
|
|
|
1,196 |
|
|
Provision for income taxes |
|
|
(4,072 |
) |
|
|
(8,635 |
) |
|
|
|
(15,036 |
) |
|
|
(9,731 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
44,611 |
|
|
|
48,944 |
|
|
|
|
155,238 |
|
|
|
148,051 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock dividends |
|
|
1,888 |
|
|
|
1,888 |
|
|
|
|
7,554 |
|
|
|
7,554 |
|
|
Net income attributable to noncontrolling interest |
|
|
7,181 |
|
|
|
9,838 |
|
|
|
|
26,610 |
|
|
|
32,185 |
|
|
Net income attributable to common stockholders |
|
$ |
35,542 |
|
|
$ |
37,218 |
|
|
|
$ |
121,074 |
|
|
$ |
108,312 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share |
|
$ |
0.35 |
|
|
$ |
0.48 |
|
|
|
$ |
1.30 |
|
|
$ |
1.54 |
|
|
Diluted earnings per common share |
|
$ |
0.34 |
|
|
$ |
0.47 |
|
|
|
$ |
1.27 |
|
|
$ |
1.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
101,611,818 |
|
|
|
78,273,633 |
|
|
|
|
92,851,327 |
|
|
|
70,208,165 |
|
|
|
Diluted |
|
|
125,498,359 |
|
|
|
101,148,081 |
|
|
|
|
116,192,951 |
|
|
|
93,642,168 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share |
|
$ |
0.30 |
|
|
$ |
0.42 |
|
(1) |
|
$ |
1.14 |
|
|
$ |
1.13 |
|
(1) |
|
|
|
|
|
|
|
|
|
|
|
(1) Includes a special
dividend of $0.15 per share of common stock declared in December
2018. |
|
|
|
|
|
|
|
|
|
|
|
|
|
ARBOR REALTY
TRUST, INC. AND SUBSIDIARIES |
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE
SHEETS |
($ in
thousands—except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
December 31, |
|
|
|
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
299,687 |
|
|
$ |
160,063 |
|
Restricted cash |
|
|
210,875 |
|
|
|
180,606 |
|
Loans and investments, net |
|
|
4,189,960 |
|
|
|
3,200,145 |
|
Loans held-for-sale, net |
|
|
861,360 |
|
|
|
481,664 |
|
Capitalized mortgage servicing rights, net |
|
|
286,420 |
|
|
|
273,770 |
|
Securities held to maturity, net |
|
|
88,699 |
|
|
|
76,363 |
|
Investments in equity affiliates |
|
|
41,800 |
|
|
|
21,580 |
|
Real estate owned, net |
|
|
13,220 |
|
|
|
14,446 |
|
Due from related party |
|
|
10,651 |
|
|
|
1,287 |
|
Goodwill and other intangible assets |
|
|
110,700 |
|
|
|
116,165 |
|
Other assets |
|
|
125,788 |
|
|
|
86,086 |
|
Total assets |
|
$ |
6,239,160 |
|
|
$ |
4,612,175 |
|
|
|
|
|
|
|
|
|
Liabilities and Equity: |
|
|
|
|
Credit facilities and repurchase agreements |
|
$ |
1,678,288 |
|
|
$ |
1,135,627 |
|
Collateralized loan obligations |
|
|
2,130,121 |
|
|
|
1,593,548 |
|
Debt fund |
|
|
68,629 |
|
|
|
68,183 |
|
Senior unsecured notes |
|
|
319,799 |
|
|
|
122,484 |
|
Convertible senior unsecured notes, net |
|
|
284,152 |
|
|
|
254,768 |
|
Junior subordinated notes to subsidiary trust issuing preferred
securities |
|
|
140,949 |
|
|
|
140,259 |
|
Due to related party |
|
|
13,100 |
|
|
|
- |
|
Due to borrowers |
|
|
79,148 |
|
|
|
78,662 |
|
Allowance for loss-sharing obligations |
|
|
34,648 |
|
|
|
34,298 |
|
Other liabilities |
|
|
134,299 |
|
|
|
118,780 |
|
Total liabilities |
|
|
4,883,133 |
|
|
|
3,546,609 |
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
Arbor Realty Trust, Inc. stockholders' equity: |
|
|
|
|
|
|
Preferred stock, cumulative, redeemable, $0.01 par value:
100,000,000 |
|
|
|
|
|
|
shares
authorized; special voting preferred shares; 20,484,094 and |
|
|
|
|
|
|
|
20,653,584 shares issued and outstanding, respectively; 8.25%
Series A, |
|
|
|
|
|
$38,787,500 aggregate liquidation preference; 1,551,500 shares
issued and |
|
|
|
|
|
outstanding; 7.75% Series B, $31,500,000 aggregate liquidation
preference; |
|
|
|
|
|
1,260,000 shares issued and outstanding; 8.50% Series C,
$22,500,000 |
|
|
|
|
|
aggregate
liquidation preference; 900,000 shares issued and outstanding |
|
|
89,501 |
|
|
|
89,502 |
|
|
|
Common stock, $0.01 par value: 500,000,000 shares authorized;
109,706,214 |
|
|
|
|
|
and
83,987,707 shares issued and outstanding, respectively |
|
|
1,097 |
|
|
|
840 |
|
|
|
Additional paid-in capital |
|
|
1,154,932 |
|
|
|
879,029 |
|
|
|
Accumulated deficit |
|
|
(60,920 |
) |
|
|
(74,133 |
) |
Total Arbor Realty Trust, Inc. stockholders’ equity |
|
|
1,184,610 |
|
|
|
895,238 |
|
|
|
|
|
|
|
|
|
Noncontrolling interest |
|
|
171,417 |
|
|
|
170,328 |
|
Total equity |
|
|
1,356,027 |
|
|
|
1,065,566 |
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
$ |
6,239,160 |
|
|
$ |
4,612,175 |
|
|
|
|
|
|
|
|
|
ARBOR REALTY
TRUST, INC. AND SUBSIDIARIES |
|
|
|
|
|
|
|
|
STATEMENT OF INCOME
SEGMENT INFORMATION - (Unaudited) |
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended December 31, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Structured Business |
|
Agency Business |
|
Other / Eliminations (1) |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
Interest income |
|
$ |
74,060 |
|
|
$ |
7,923 |
|
|
$ |
- |
|
|
$ |
81,983 |
|
Interest expense |
|
|
43,620 |
|
|
|
4,566 |
|
|
|
- |
|
|
|
48,186 |
|
|
Net interest income |
|
|
30,440 |
|
|
|
3,357 |
|
|
|
- |
|
|
|
33,797 |
|
|
|
|
|
|
|
|
|
|
|
Other revenue: |
|
|
|
|
|
|
|
|
Gain on sales, including fee-based services, net |
|
|
- |
|
|
|
13,755 |
|
|
|
- |
|
|
|
13,755 |
|
Mortgage servicing rights |
|
|
- |
|
|
|
27,909 |
|
|
|
- |
|
|
|
27,909 |
|
Servicing revenue |
|
|
- |
|
|
|
26,538 |
|
|
|
- |
|
|
|
26,538 |
|
Amortization of MSRs |
|
|
- |
|
|
|
(11,951 |
) |
|
|
- |
|
|
|
(11,951 |
) |
Property operating income |
|
|
1,487 |
|
|
|
- |
|
|
|
- |
|
|
|
1,487 |
|
Other income, net |
|
|
256 |
|
|
|
4,371 |
|
|
|
- |
|
|
|
4,627 |
|
|
Total other
revenue |
|
|
1,743 |
|
|
|
60,622 |
|
|
|
- |
|
|
|
62,365 |
|
|
|
|
|
|
|
|
|
|
|
Other expenses: |
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
|
8,217 |
|
|
|
20,239 |
|
|
|
- |
|
|
|
28,456 |
|
Selling and administrative |
|
|
2,998 |
|
|
|
6,207 |
|
|
|
- |
|
|
|
9,205 |
|
Property operating expenses |
|
|
2,571 |
|
|
|
- |
|
|
|
- |
|
|
|
2,571 |
|
Depreciation and amortization |
|
|
523 |
|
|
|
1,324 |
|
|
|
- |
|
|
|
1,847 |
|
Provision for loss sharing (net of recoveries) |
|
|
- |
|
|
|
(409 |
) |
|
|
- |
|
|
|
(409 |
) |
|
Total other
expenses |
|
|
14,309 |
|
|
|
27,361 |
|
|
|
- |
|
|
|
41,670 |
|
|
|
|
|
|
|
|
|
|
|
Income before extinguishment of debt, income |
|
|
|
|
|
|
|
|
|
from
equity affiliates and income taxes |
|
|
17,874 |
|
|
|
36,618 |
|
|
|
- |
|
|
|
54,492 |
|
Loss on extinguishment of debt |
|
|
(7,311 |
) |
|
|
- |
|
|
|
- |
|
|
|
(7,311 |
) |
Income from equity affiliates |
|
|
1,502 |
|
|
|
- |
|
|
|
- |
|
|
|
1,502 |
|
Provision for income taxes |
|
|
(667 |
) |
|
|
(3,405 |
) |
|
|
- |
|
|
|
(4,072 |
) |
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
11,398 |
|
|
|
33,213 |
|
|
|
- |
|
|
|
44,611 |
|
|
|
|
|
|
|
|
|
|
|
Preferred stock dividends |
|
|
1,888 |
|
|
|
- |
|
|
|
- |
|
|
|
1,888 |
|
Net income attributable to noncontrolling interest |
|
- |
|
|
|
- |
|
|
|
7,181 |
|
|
|
7,181 |
|
Net income attributable to common stockholders |
$ |
9,510 |
|
|
$ |
33,213 |
|
|
$ |
(7,181 |
) |
|
$ |
35,542 |
|
|
|
|
|
|
|
|
|
|
|
(1) Includes certain
income or expenses not allocated to the two reportable segments.
Amount reflects income attributable |
to the noncontrolling interest holders. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARBOR REALTY
TRUST, INC. AND SUBSIDIARIES |
|
|
|
|
|
|
|
|
|
|
BALANCE SHEET
SEGMENT INFORMATION - (Unaudited) |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2019 |
|
|
|
|
|
|
Structured Business |
|
Agency Business |
|
Consolidated |
|
Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
264,468 |
|
$ |
35,219 |
|
$ |
299,687 |
|
Restricted cash |
|
|
208,926 |
|
|
1,949 |
|
|
210,875 |
|
Loans and investments, net |
|
|
4,189,960 |
|
|
- |
|
|
4,189,960 |
|
Loans held-for-sale, net |
|
|
- |
|
|
861,360 |
|
|
861,360 |
|
Capitalized mortgage servicing rights, net |
|
|
|
|
|
- |
|
|
286,420 |
|
|
286,420 |
|
Securities held to maturity, net |
|
|
20,000 |
|
|
68,699 |
|
|
88,699 |
|
Investments in equity affiliates |
|
|
41,800 |
|
|
- |
|
|
41,800 |
|
Goodwill and other intangible assets |
|
|
12,500 |
|
|
98,200 |
|
|
110,700 |
|
Other assets |
|
|
118,175 |
|
|
31,484 |
|
|
149,659 |
|
Total assets |
|
$ |
4,855,829 |
|
$ |
1,383,331 |
|
$ |
6,239,160 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
Debt obligations |
|
$ |
3,878,343 |
|
$ |
743,595 |
|
$ |
4,621,938 |
|
Allowance for loss-sharing obligations |
|
- |
|
|
34,648 |
|
|
34,648 |
|
Other liabilities |
|
|
171,004 |
|
|
55,543 |
|
|
226,547 |
|
Total liabilities |
|
$ |
4,049,347 |
|
$ |
833,786 |
|
$ |
4,883,133 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARBOR REALTY
TRUST, INC. AND SUBSIDIARIES |
|
|
|
|
|
|
|
|
Supplemental
Schedule of Non-GAAP Financial Measures - (Unaudited) |
Funds from
Operations ("FFO") and Adjusted Funds from Operations ("AFFO") |
($ in
thousands—except share and per share data) |
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
Year Ended |
December 31, |
December 31, |
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
Net income
attributable to common stockholders |
$ |
35,542 |
|
|
$ |
37,218 |
|
|
$ |
121,074 |
|
|
$ |
108,312 |
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
Net
income attributable to noncontrolling interest |
|
7,181 |
|
|
|
9,838 |
|
|
|
26,610 |
|
|
|
32,185 |
|
Impairment loss on real estate owned |
|
- |
|
|
|
- |
|
|
|
1,000 |
|
|
|
2,000 |
|
Depreciation - real estate owned |
|
177 |
|
|
|
176 |
|
|
|
701 |
|
|
|
708 |
|
Depreciation - investments in equity affiliates |
|
124 |
|
|
|
125 |
|
|
|
510 |
|
|
|
499 |
|
|
|
|
|
|
|
|
|
Funds from
operations (1) |
$ |
43,024 |
|
|
$ |
47,357 |
|
|
$ |
149,895 |
|
|
$ |
143,704 |
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
Income from mortgage servicing rights |
|
(27,909 |
) |
|
|
(36,052 |
) |
|
|
(90,761 |
) |
|
|
(98,839 |
) |
Impairment loss on real estate owned |
|
- |
|
|
|
- |
|
|
|
(1,000 |
) |
|
|
(2,000 |
) |
Deferred tax provision (benefit) |
|
1,176 |
|
|
|
2,421 |
|
|
|
150 |
|
|
|
(12,033 |
) |
Amortization and write-offs of MSRs |
|
18,547 |
|
|
|
20,314 |
|
|
|
71,105 |
|
|
|
73,182 |
|
Depreciation and amortization |
|
2,389 |
|
|
|
2,582 |
|
|
|
9,983 |
|
|
|
9,618 |
|
Loss
on extinguishment of debt |
|
7,311 |
|
|
|
82 |
|
|
|
7,439 |
|
|
|
5,041 |
|
Net
gain on Private Label-related derivatives prior to sale |
|
(6,050 |
) |
|
|
- |
|
|
|
(6,098 |
) |
|
|
- |
|
Net
loss (gain) on changes in fair value of GSE-related
derivatives |
|
1,678 |
|
|
|
(9,002 |
) |
|
|
7,785 |
|
|
|
(6,672 |
) |
Stock-based compensation |
|
1,941 |
|
|
|
1,257 |
|
|
|
9,515 |
|
|
|
6,095 |
|
|
|
|
|
|
|
|
|
Adjusted
funds from operations (1) (2) |
$ |
42,107 |
|
|
$ |
28,959 |
|
|
$ |
158,013 |
|
|
$ |
118,096 |
|
|
|
|
|
|
|
|
|
Diluted FFO
per share (1) |
$ |
0.34 |
|
|
$ |
0.47 |
|
|
$ |
1.29 |
|
|
$ |
1.53 |
|
|
|
|
|
|
|
|
|
Diluted AFFO
per share (1) (2) |
$ |
0.34 |
|
|
$ |
0.29 |
|
|
$ |
1.36 |
|
|
$ |
1.26 |
|
|
|
|
|
|
|
|
|
Diluted
weighted average shares outstanding (1) |
|
125,498,359 |
|
|
|
101,148,081 |
|
|
|
116,192,951 |
|
|
|
93,642,168 |
|
|
|
|
|
|
|
|
|
(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) During the
fourth quarter of 2019, the Company updated its definition of AFFO
to (i) exclude one-time gains or losses on the early extinguishment
of debt, (ii) exclude gains and losses on derivative instruments
associated with Private Label loans that have not yet been sold and
securitized and (iii) include the cumulative gains or losses on
derivative instruments associated with Private Label loans that
were sold during the periods presented. Prior period amounts
presented above have been conformed to reflect this change. |
|
The Company is
presenting FFO and AFFO because management believes they are
important supplemental measures of the Company’s operating
performance in that they are frequently used by analysts, investors
and other parties in the evaluation of REITs. The National
Association of Real Estate Investment Trusts, or NAREIT, defines
FFO as net income (loss) attributable to common stockholders
(computed in accordance with GAAP), excluding gains (losses) from
sales of depreciated real properties, plus impairments of
depreciated real properties and real estate related depreciation
and amortization, and after adjustments for unconsolidated
ventures. |
|
The Company defines
AFFO as funds from operations adjusted for accounting items such as
non-cash stock-based compensation expense, income from mortgage
servicing rights ("MSRs"), gains or losses on Private Label-related
derivative instruments until the loans are sold, changes in fair
value of GSE-related derivatives that temporarily flow through
earnings, amortization and write-offs of MSRs, deferred tax
(benefit) provision and the amortization of the convertible senior
notes conversion option. The Company also adds back one-time
charges such as acquisition costs, gains and losses on the
extinguishment of debt, impairment losses on real estate, and gains
(losses) on sales of real estate. The Company is generally not in
the business of operating real estate property and has obtained
real estate by foreclosure or through partial or full settlement of
mortgage debt related to the Company's loans to maximize the value
of the collateral and minimize the Company's exposure. Therefore,
the Company deems such impairment and gains (losses) on real estate
as an extension of the asset management of its loans, thus a
recovery of principal or additional loss on the Company's initial
investment. |
|
FFO and AFFO are
not intended to be an indication of the Company's cash flow 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 FFO and AFFO may be
different from the calculations used by other companies and,
therefore, comparability may be limited. |
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