Fourth Quarter Company
Highlights:
Arbor Realty Trust, Inc. (NYSE:ABR), today announced financial
results for the fourth quarter and year ended December 31,
2017. Arbor reported net income for the quarter of $21.9
million, or $0.35 per diluted common share, compared to $20.5
million, or $0.40 per diluted common share for the quarter ended
December 31, 2016. Net income for the year was $65.8 million,
or $1.12 per diluted common share, compared to $42.8 million, or
$0.83 per diluted common share for the year ended December 31,
2016. Adjusted funds from operations (“AFFO”) for the quarter
was $20.7 million, or $0.25 per diluted common share, compared to
$15.1 million, or $0.21 per diluted common share for the quarter
ended December 31, 2016. AFFO for the year was $83.9 million, or
$1.04 per diluted common share, compared to $49.0 million, or $0.79
per diluted common share for the year ended December 31,
2016.
1
Agency Business
Loan Origination Platform
Agency Loan Volume ($ in thousands) |
|
|
Quarter Ended |
|
Year Ended |
|
|
December 31, 2017 |
|
September 30, 2017 |
|
December 31, 2017 |
|
December 31, 2016* |
Fannie Mae |
|
$ |
712,661 |
|
$ |
650,374 |
|
$ |
2,929,481 |
|
$ |
1,668,581 |
Freddie Mac |
|
|
441,901 |
|
|
328,075 |
|
|
1,322,498 |
|
|
456,422 |
FHA |
|
|
- |
|
|
18,273 |
|
|
189,087 |
|
|
24,630 |
CMBS/Conduit |
|
|
- |
|
|
- |
|
|
21,370 |
|
|
- |
Total Originations |
|
$ |
1,154,562 |
|
$ |
996,722 |
|
$ |
4,462,436 |
|
$ |
2,149,633 |
|
|
|
|
|
|
|
|
|
Total Loan Sales |
|
$ |
1,193,629 |
|
$ |
1,052,073 |
|
$ |
4,814,906 |
|
$ |
1,492,384 |
|
|
|
|
|
|
|
|
|
Total Loan
Commitments |
|
$ |
1,162,961 |
|
$ |
928,181 |
|
$ |
4,344,328 |
|
$ |
2,129,720 |
|
|
|
|
|
|
|
|
|
*Represents the period from the date of the Agency Business
acquisition (July 14, 2016) through December 31, 2016. Loan
sales exclude $418.2 million of loans that were acquired on July
14, 2016. |
|
For the quarter ended December 31, 2017, the Agency Business
generated revenues of $53.7 million, compared to $49.7 million for
the third quarter of 2017. Gain on sales, including fee-based
services, net was $17.7 million for the quarter, reflecting a
margin of 1.48% on loan sales, compared to $17.1 million and 1.63%
for the third quarter of 2017. Income from mortgage servicing
rights was $20.6 million for the quarter, reflecting a rate of
1.77% as a percentage of loan commitments, compared to $18.9
million and 2.04% for the third quarter of 2017.
At December 31, 2017, loans held-for-sale was
$297.4 million which was primarily comprised of unpaid principal
balances totaling $292.2 million, with financing associated with
these loans totaling $291.5 million.
Fee-Based Servicing
Portfolio
The fee-based servicing portfolio totaled $16.21
billion at December 31, 2017, an increase of 4% from September 30,
2017, primarily as a result of $1.15 billion of new loan
originations during the quarter. Servicing revenue, net was $9.3
million for the quarter, and consists of servicing revenue of $21.1
million net of amortization of mortgage servicing rights totaling
$11.8 million.
|
|
Fee-Based Servicing Portfolio ($ in thousands) |
|
|
As of December 31, 2017 |
|
As of September 30, 2017 |
|
|
UPB |
Wtd. Avg. Fee |
Wtd. Avg. Life (in years) |
|
UPB |
Wtd. Avg. Fee |
Wtd. Avg. Life (in years) |
Fannie Mae |
|
$ |
12,502,699 |
0.54 |
% |
6.9 |
|
$ |
12,331,135 |
0.54 |
% |
7.2 |
Freddie Mac |
|
|
3,166,134 |
0.30 |
% |
10.5 |
|
|
2,732,537 |
0.29 |
% |
10.9 |
FHA |
|
|
537,482 |
0.17 |
% |
19.6 |
|
|
537,554 |
0.17 |
% |
20.0 |
Total |
|
$ |
16,206,315 |
0.48 |
% |
8.1 |
|
$ |
15,601,226 |
0.48 |
% |
8.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans sold under the Fannie Mae program contain an obligation to
partially guarantee the performance of the loan (“loss-sharing
obligations”). At December 31, 2017, the Company’s allowance for
loss-sharing obligations was $30.5 million which consists of
general loss sharing guaranty obligations of $29.6 million,
representing 0.24% of the Fannie Mae servicing portfolio, and $0.9
million of loss-sharing obligations on specifically identified
loans with losses determined to be probable and estimable.
Structured Business
Portfolio and Investment
Activity
Fourth quarter of 2017:
- 34 new loan originations totaling $786.0
million, of which 30 were bridge loans for $754.0 million
- Payoffs and pay downs on 12 loans totaling
$200.1 million
- Portfolio growth of 27% from 3Q17
Year ended December 31, 2017:
- Loan origination volume increased 117% from
2016 and consists of 93 new loan originations totaling $1.84
billion, of which 84 were bridge loans for $1.68 billion
- Payoffs and pay downs on 64 loans totaling
$924.1 million
- Portfolio growth of 48%
At December 31, 2017, the loan and investment
portfolio’s unpaid principal balance, excluding loan loss reserves,
was $2.66 billion, with a weighted average current interest pay
rate of 6.28%, compared to $2.10 billion and 6.04% at September 30,
2017. Including certain fees earned and costs associated with
the loan and investment portfolio, the weighted average current
interest pay rate was 6.99% at December 31, 2017, compared to 6.84%
at September 30, 2017.
The average balance of the Company’s loan and
investment portfolio during the fourth quarter of 2017, excluding
loan loss reserves, was $2.31 billion with a weighted average yield
on these assets of 6.94%, compared to $2.00 billion and 7.34% for
the third quarter of 2017. The decrease in average yield was
primarily due to lower accelerated fees on early loan payoffs in
the fourth quarter as compared to the third quarter, as well as
lower rates on fourth quarter new originations, partially offset by
an increase in LIBOR.
At December 31, 2017, the Company’s total loan
loss reserves were $62.8 million on five loans with an aggregate
carrying value before loan loss reserves of $163.5 million. The
Company also had two non-performing loans with a carrying value of
$29.1 million, net of related loan loss reserves of $7.4
million.
The Company recorded a loss from equity
affiliates of $4.7 million consisting primarily of a $5.5 million
non-recurring charge for our proportionate share of a litigation
settlement related to our joint venture investment in a residential
mortgage banking business partially offset by $0.6 million of
income from a distribution received.
Financing
Activity
The Company completed its ninth collateralized
securitization vehicle (“CLO IX”) totaling $480.0 million of real
estate related assets and cash. Investment grade-rated notes
totaling $356.4 million were issued, and the Company retained
subordinate interests in the issuing vehicle of $123.6 million. The
facility has a three-year asset replenishment period and an initial
weighted average interest rate of 1.36% over LIBOR, excluding fees
and transaction costs.
The balance of debt that finances the Company’s
loan and investment portfolio at December 31, 2017 was $2.24
billion with a weighted average interest rate including fees of
4.83%, as compared to $1.67 billion and a rate of 4.48% at
September 30, 2017. The average balance of debt that finances the
Company’s loan and investment portfolio for the fourth quarter of
2017 was $1.90 billion, as compared to $1.62 billion for the third
quarter of 2017. The average cost of borrowings for the fourth
quarter was 4.66%, compared to 4.89% for the third quarter of
2017.
The Company is subject to various financial
covenants and restrictions under the terms of its collateralized
securitization vehicles and financing facilities. The Company
believes it was in compliance with all financial covenants and
restrictions as of December 31, 2017 and as of the most recent
collateralized securitization vehicle determination dates in
February 2018.
In January 2018, we paid $50.0 million in full
satisfaction of the seller financing related to the acquisition of
the Agency Business.
Capital Markets
The Company issued $143.8 million of 5.375%
convertible senior notes due 2020 (the “Notes”), including the
underwriter's $18.8 million over-allotment option. The conversion
rate was initially equal to 107.7122 shares of common stock per
$1,000 principal amount of Notes, which is equivalent to an initial
conversion price of $9.28 per share of common stock, representing
an approximate 10% conversion premium based on the closing price of
the Company’s common stock of $8.44 per share on November 7, 2017.
The Company received proceeds totaling $139.2 million, net of the
underwriter's discount and fees, from these offerings which is
intended to be used to make investments in our business and for
general corporate purposes.
Dividends
The Company announced today that its Board of
Directors has declared a quarterly cash dividend of $0.21 per share
of common stock for the quarter ended December 31, 2017,
representing an increase of 11% over the prior quarter dividend of
$0.19 per share. The dividend is payable on March 21, 2018 to
common stockholders of record on March 8, 2018. The ex-dividend
date is March 7, 2018.
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, 2017 through February 28, 2018. The
dividends are payable on February 28, 2018 to preferred
stockholders of record on February 15, 2018. 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 of the conference call will
be available at www.arbor.com in the investor relations area of the
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 1786665.
After the live webcast, the call will remain
available on the Company's website through March 31, 2018. In
addition, a telephonic replay of the call will be available until
March 2, 2018. The replay dial-in numbers are (855) 859-2056 for
domestic callers and (404) 537-3406 for international callers.
Please use passcode 1786665.
About Arbor Realty Trust,
Inc.
Arbor Realty Trust, Inc. (NYSE:ABR) is a real
estate investment trust and national direct lender specializing in
loan origination and servicing for multifamily, seniors housing,
healthcare and other diverse commercial real estate assets. Arbor
is a Top 10 Fannie Mae DUS® Multifamily Lender by volume and a Top
Fannie Mae Small Loan lender, a Freddie Mac Program Plus®
Seller/Servicer and the Top Freddie Mac Small Balance Loan Lender,
a Fannie Mae and Freddie Mac Seniors Housing Lender, an FHA
Multifamily Accelerated Processing (MAP)/LEAN Lender, a
HUD-approved LIHTC Lender as well as a CMBS, bridge, mezzanine and
preferred equity lender, consistently building on its reputation
for service, quality and flexibility. With a fee-based servicing
portfolio of over $16 billion, Arbor is a primary commercial loan
servicer and special servicer rated by Standard & Poor’s with
an Above Average rating. Arbor is also on the Standard & Poor’s
Select Servicer List and is a primary commercial loan servicer and
loan level special servicer rated by Fitch Ratings.
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, 2017 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.com |
Investors:The Ruth
GroupLee Roth646-536-7012lroth@theruthgroup.com |
|
|
Media:Bonnie Habyan,
EVP of Marketing516-506-4615bhabyan@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, |
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
Interest
income |
|
$ |
46,045 |
|
|
$ |
32,748 |
|
|
$ |
156,177 |
|
|
$ |
116,173 |
|
|
Other
interest income, net |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,539 |
|
|
Interest
expense |
|
|
26,374 |
|
|
|
20,664 |
|
|
|
90,072 |
|
|
|
63,623 |
|
|
|
Net interest
income |
|
|
19,671 |
|
|
|
12,084 |
|
|
|
66,105 |
|
|
|
55,089 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other revenue: |
|
|
|
|
|
|
|
|
|
Gain on
sales, including fee-based services, net |
|
|
17,672 |
|
|
|
14,900 |
|
|
|
72,799 |
|
|
|
24,594 |
|
|
Mortgage
servicing rights |
|
|
20,638 |
|
|
|
28,973 |
|
|
|
76,820 |
|
|
|
44,941 |
|
|
Servicing
revenue, net |
|
|
9,287 |
|
|
|
3,168 |
|
|
|
29,210 |
|
|
|
9,054 |
|
|
Property
operating income |
|
|
2,219 |
|
|
|
2,162 |
|
|
|
10,973 |
|
|
|
14,881 |
|
|
Other
income, net |
|
|
1,615 |
|
|
|
377 |
|
|
|
685 |
|
|
|
1,041 |
|
|
|
Total other
revenue |
|
|
51,431 |
|
|
|
49,580 |
|
|
|
190,487 |
|
|
|
94,511 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expenses: |
|
|
|
|
|
|
|
|
|
Employee
compensation and benefits |
|
|
25,265 |
|
|
|
15,791 |
|
|
|
92,126 |
|
|
|
38,647 |
|
|
Selling and
administrative |
|
|
7,605 |
|
|
|
7,309 |
|
|
|
30,738 |
|
|
|
17,587 |
|
|
Acquisition
costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
10,262 |
|
|
Property
operating expenses |
|
|
2,639 |
|
|
|
2,509 |
|
|
|
10,482 |
|
|
|
13,501 |
|
|
Depreciation and amortization |
|
|
1,843 |
|
|
|
1,892 |
|
|
|
7,385 |
|
|
|
5,022 |
|
|
Impairment
loss on real estate owned |
|
|
500 |
|
|
|
- |
|
|
|
3,200 |
|
|
|
11,200 |
|
|
Provision
for loss sharing |
|
|
147 |
|
|
|
918 |
|
|
|
(259 |
) |
|
|
2,235 |
|
|
Provision
for loan losses (net of recoveries) |
|
|
- |
|
|
|
(109 |
) |
|
|
(456 |
) |
|
|
(134 |
) |
|
Management
fee - related party |
|
|
- |
|
|
|
3,725 |
|
|
|
6,673 |
|
|
|
12,600 |
|
|
|
Total
other expenses |
|
|
37,999 |
|
|
|
32,035 |
|
|
|
149,889 |
|
|
|
110,920 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
before gain on extinguishment of debt, gain on sale |
|
|
|
|
|
|
|
|
|
of real
estate, (loss) income from equity affiliates and |
|
|
|
|
|
|
|
|
|
benefit from (provision
for) income taxes |
|
|
33,103 |
|
|
|
29,629 |
|
|
|
106,703 |
|
|
|
38,680 |
|
|
Gain on
extinguishment of debt |
|
|
- |
|
|
|
- |
|
|
|
7,116 |
|
|
|
- |
|
|
Gain on
sale of real estate |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
11,631 |
|
|
(Loss)
income from equity affiliates |
|
|
(4,706 |
) |
|
|
1,801 |
|
|
|
(2,951 |
) |
|
|
12,995 |
|
|
Benefit
from (provision for) income taxes |
|
|
2,885 |
|
|
|
(525 |
) |
|
|
(13,359 |
) |
|
|
(825 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
|
31,282 |
|
|
|
30,905 |
|
|
|
97,509 |
|
|
|
62,481 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
stock dividends |
|
|
1,888 |
|
|
|
1,888 |
|
|
|
7,554 |
|
|
|
7,554 |
|
|
Net income
attributable to noncontrolling interest |
|
|
7,524 |
|
|
|
8,482 |
|
|
|
24,120 |
|
|
|
12,131 |
|
|
Net income
attributable to common stockholders |
|
$ |
21,870 |
|
|
$ |
20,535 |
|
|
$ |
65,835 |
|
|
$ |
42,796 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings per common share |
|
$ |
0.35 |
|
|
$ |
0.40 |
|
|
$ |
1.14 |
|
|
$ |
0.83 |
|
|
Diluted
earnings per common share |
|
$ |
0.35 |
|
|
$ |
0.40 |
|
|
$ |
1.12 |
|
|
$ |
0.83 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
61,712,782 |
|
|
|
51,401,295 |
|
|
|
57,890,574 |
|
|
|
51,305,095 |
|
|
|
Diluted |
|
|
84,361,612 |
|
|
|
73,268,095 |
|
|
|
80,311,252 |
|
|
|
51,730,553 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
declared per common share |
|
$ |
0.19 |
|
|
$ |
0.16 |
|
|
$ |
0.72 |
|
|
$ |
0.62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
ARBOR REALTY TRUST,
INC. AND SUBSIDIARIES |
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEETS |
|
($ in thousands—except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
December 31, |
|
|
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
104,374 |
|
|
$ |
138,645 |
|
|
Restricted
cash |
|
|
139,398 |
|
|
|
29,315 |
|
|
Loans and investments, net |
|
|
2,579,127 |
|
|
|
1,695,732 |
|
|
Loans held-for-sale, net |
|
|
297,443 |
|
|
|
673,367 |
|
|
Capitalized
mortgage servicing rights, net |
|
|
252,608 |
|
|
|
227,743 |
|
|
Securities
held to maturity |
|
|
27,837 |
|
|
|
- |
|
|
Investments
in equity affiliates |
|
|
23,653 |
|
|
|
33,949 |
|
|
Real estate
owned, net |
|
|
16,787 |
|
|
|
19,492 |
|
|
Due from
related party |
|
|
688 |
|
|
|
1,465 |
|
|
Goodwill
and other intangible assets |
|
|
121,766 |
|
|
|
97,490 |
|
|
Other
assets |
|
|
62,264 |
|
|
|
53,588 |
|
|
Total assets |
|
$ |
3,625,945 |
|
|
$ |
2,970,786 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity: |
|
|
|
|
|
Credit
facilities and repurchase agreements |
|
|
528,573 |
|
|
|
906,637 |
|
|
Collateralized loan obligations and debt fund |
|
|
1,486,506 |
|
|
|
728,441 |
|
|
Senior
unsecured notes |
|
|
95,280 |
|
|
|
94,522 |
|
|
Convertible
senior unsecured notes, net |
|
|
231,287 |
|
|
|
80,660 |
|
|
Junior
subordinated notes to subsidiary trust issuing preferred
securities |
|
|
139,590 |
|
|
|
157,859 |
|
|
Related
party financing |
|
|
50,000 |
|
|
|
50,000 |
|
|
Due to
related party |
|
|
- |
|
|
|
6,039 |
|
|
Due to
borrowers |
|
|
99,829 |
|
|
|
81,019 |
|
|
Allowance
for loss-sharing obligations |
|
|
30,511 |
|
|
|
32,408 |
|
|
Other
liabilities |
|
|
99,813 |
|
|
|
86,163 |
|
|
Total liabilities |
|
|
2,761,389 |
|
|
|
2,223,748 |
|
|
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
|
|
Arbor
Realty Trust, Inc. stockholders' equity: |
|
|
|
|
|
|
|
Preferred
stock, cumulative, redeemable, $0.01 par value: 100,000,000
shares |
|
|
|
|
|
|
|
|
authorized; special
voting preferred shares; 21,230,769 shares issued and |
|
|
|
|
|
|
|
|
outstanding; 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 |
|
|
89,508 |
|
|
|
89,508 |
|
|
|
|
Common
stock, $0.01 par value: 500,000,000 shares authorized;
61,723,387 |
|
|
|
|
|
|
|
|
and 51,401,295 shares
issued and outstanding, respectively |
|
|
617 |
|
|
|
514 |
|
|
|
|
Additional
paid-in capital |
|
|
707,450 |
|
|
|
621,932 |
|
|
|
|
Accumulated
deficit |
|
|
(101,926 |
) |
|
|
(125,134 |
) |
|
|
|
Accumulated
other comprehensive income |
|
|
176 |
|
|
|
321 |
|
|
Total Arbor
Realty Trust, Inc. stockholders’ equity |
|
|
695,825 |
|
|
|
587,141 |
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interest |
|
|
168,731 |
|
|
|
159,897 |
|
|
Total
equity |
|
|
864,556 |
|
|
|
747,038 |
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and equity |
|
$ |
3,625,945 |
|
|
$ |
2,970,786 |
|
|
|
|
|
|
|
|
|
|
|
ARBOR REALTY TRUST,
INC. AND SUBSIDIARIES |
|
|
|
|
|
|
|
|
|
|
STATEMENT OF INCOME SEGMENT INFORMATION -
(Unaudited) |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended December 31, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Structured Business |
|
Agency Business |
|
Other / Eliminations (1) |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income |
|
$ |
40,841 |
|
|
$ |
5,204 |
|
|
$ |
- |
|
|
$ |
46,045 |
|
|
Interest
expense |
|
|
22,269 |
|
|
|
3,143 |
|
|
|
962 |
|
|
|
26,374 |
|
|
|
Net interest
income |
|
|
18,572 |
|
|
|
2,061 |
|
|
|
(962 |
) |
|
|
19,671 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other revenue: |
|
|
|
|
|
|
|
|
|
Gain on
sales, including fee-based services, net |
|
|
- |
|
|
|
17,672 |
|
|
|
- |
|
|
|
17,672 |
|
|
Mortgage
servicing rights |
|
|
- |
|
|
|
20,638 |
|
|
|
- |
|
|
|
20,638 |
|
|
Servicing
revenue |
|
|
- |
|
|
|
21,062 |
|
|
|
- |
|
|
|
21,062 |
|
|
Amortization of MSRs |
|
|
- |
|
|
|
(11,775 |
) |
|
|
- |
|
|
|
(11,775 |
) |
|
Property
operating income |
|
|
2,219 |
|
|
|
- |
|
|
|
- |
|
|
|
2,219 |
|
|
Other
income, net |
|
|
701 |
|
|
|
914 |
|
|
|
- |
|
|
|
1,615 |
|
|
|
Total other
revenue |
|
|
2,920 |
|
|
|
48,511 |
|
|
|
- |
|
|
|
51,431 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expenses: |
|
|
|
|
|
|
|
|
|
Employee
compensation and benefits |
|
|
5,985 |
|
|
|
19,280 |
|
|
|
- |
|
|
|
25,265 |
|
|
Selling and
administrative |
|
|
2,773 |
|
|
|
4,832 |
|
|
|
- |
|
|
|
7,605 |
|
|
Property
operating expenses |
|
|
2,639 |
|
|
|
- |
|
|
|
- |
|
|
|
2,639 |
|
|
Depreciation and amortization |
|
|
443 |
|
|
|
1,400 |
|
|
|
- |
|
|
|
1,843 |
|
|
Impairment
loss on real estate owned |
|
|
500 |
|
|
|
- |
|
|
|
- |
|
|
|
500 |
|
|
Provision
for loss sharing |
|
|
- |
|
|
|
147 |
|
|
|
- |
|
|
|
147 |
|
|
|
Total
other expenses |
|
|
12,340 |
|
|
|
25,659 |
|
|
|
- |
|
|
|
37,999 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
before loss from equity affiliates and |
|
|
|
|
|
|
|
|
|
|
(provision for) benefit
from income taxes |
|
|
9,152 |
|
|
|
24,913 |
|
|
|
(962 |
) |
|
|
33,103 |
|
|
Loss from
equity affiliates |
|
|
(4,706 |
) |
|
|
- |
|
|
|
- |
|
|
|
(4,706 |
) |
|
(Provision
for) benefit from income taxes |
|
|
(957 |
) |
|
|
3,842 |
|
|
|
- |
|
|
|
2,885 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
3,489 |
|
|
$ |
28,755 |
|
|
$ |
(962 |
) |
|
$ |
31,282 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
stock dividends |
|
|
1,888 |
|
|
|
- |
|
|
|
- |
|
|
|
1,888 |
|
|
Net income
attributable to noncontrolling interest |
|
- |
|
|
|
- |
|
|
|
7,524 |
|
|
|
7,524 |
|
|
Net income
attributable to common stockholders |
|
$ |
1,601 |
|
|
$ |
28,755 |
|
|
$ |
(8,486 |
) |
|
$ |
21,870 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Includes certain corporate expenses not allocated to the two
reportable segments. Amounts primarily reflect debt costs
associated with the acquisition of the Agency Business as well as
income allocated to the noncontrolling interest holder. |
|
|
|
ARBOR REALTY TRUST,
INC. AND SUBSIDIARIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE SHEET SEGMENT INFORMATION - (Unaudited) |
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2017 |
|
|
|
|
|
|
|
Structured Business |
|
Agency Business |
|
Other / Eliminations (1) |
|
Consolidated |
|
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
37,056 |
|
$ |
67,318 |
|
$ |
- |
|
$ |
104,374 |
|
|
Restricted
cash |
|
|
139,398 |
|
|
- |
|
|
- |
|
|
139,398 |
|
|
Loans and investments, net |
|
|
2,579,127 |
|
|
- |
|
|
- |
|
|
2,579,127 |
|
|
Loans held-for-sale, net |
|
|
- |
|
|
297,443 |
|
|
- |
|
|
297,443 |
|
|
Capitalized
mortgage servicing rights, net |
|
- |
|
|
252,608 |
|
|
- |
|
|
252,608 |
|
|
Securities
held to maturity |
|
|
- |
|
|
27,837 |
|
|
- |
|
|
27,837 |
|
|
Investments
in equity affiliates |
|
|
23,653 |
|
|
- |
|
|
- |
|
|
23,653 |
|
|
Goodwill
and other intangible assets |
|
|
12,500 |
|
|
109,266 |
|
|
- |
|
|
121,766 |
|
|
Other
assets |
|
|
66,227 |
|
|
13,512 |
|
|
- |
|
|
79,739 |
|
|
Total assets |
|
$ |
2,857,961 |
|
$ |
767,984 |
|
$ |
- |
|
$ |
3,625,945 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
Debt
obligations |
|
|
2,189,700 |
|
|
291,536 |
|
|
50,000 |
|
|
2,531,236 |
|
|
Allowance
for loss-sharing obligations |
|
- |
|
|
30,511 |
|
|
- |
|
|
30,511 |
|
|
Other
liabilities |
|
|
155,814 |
|
|
42,819 |
|
|
1,009 |
|
|
199,642 |
|
|
Total liabilities |
|
$ |
2,345,514 |
|
$ |
364,866 |
|
$ |
51,009 |
|
$ |
2,761,389 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Includes assets and liabilities not allocated to the two reportable
segments. Amounts primarily reflect financing associated with
the acquisition of the Agency Business. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, |
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
Net income attributable
to common stockholders |
$ |
21,870 |
|
|
$ |
20,535 |
|
|
$ |
65,835 |
|
|
$ |
42,796 |
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
Gain on
sale of real estate |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(11,631 |
) |
Net
income attributable to noncontrolling interest |
|
7,524 |
|
|
|
8,482 |
|
|
|
24,120 |
|
|
|
12,131 |
|
Impairment loss on real estate owned |
|
500 |
|
|
|
- |
|
|
|
3,200 |
|
|
|
11,200 |
|
Depreciation - real estate owned |
|
177 |
|
|
|
247 |
|
|
|
769 |
|
|
|
2,012 |
|
Depreciation - investments in equity affiliates |
|
102 |
|
|
|
93 |
|
|
|
406 |
|
|
|
375 |
|
|
|
|
|
|
|
|
|
Funds from
operations (1) |
$ |
30,173 |
|
|
$ |
29,357 |
|
|
$ |
94,330 |
|
|
$ |
56,883 |
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
Income
from mortgage servicing rights |
|
(20,638 |
) |
|
|
(28,973 |
) |
|
|
(76,820 |
) |
|
|
(44,941 |
) |
Impairment loss on real estate owned |
|
(500 |
) |
|
|
- |
|
|
|
(3,200 |
) |
|
|
(11,200 |
) |
Deferred
tax benefit |
|
(7,414 |
) |
|
|
(1,532 |
) |
|
|
(7,399 |
) |
|
|
(1,532 |
) |
Amortization and write-offs of MSRs |
|
16,894 |
|
|
|
14,118 |
|
|
|
63,034 |
|
|
|
21,705 |
|
Depreciation and amortization |
|
2,073 |
|
|
|
1,807 |
|
|
|
7,697 |
|
|
|
3,169 |
|
Net
(gain) loss on changes in fair value of derivatives |
|
(914 |
) |
|
|
(251 |
) |
|
|
1,398 |
|
|
|
(499 |
) |
Gain on
sale of real estate |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
11,631 |
|
Stock-based compensation |
|
1,007 |
|
|
|
573 |
|
|
|
4,840 |
|
|
|
3,514 |
|
Acquisition costs |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
10,262 |
|
|
|
|
|
|
|
|
|
Adjusted funds from
operations (1) |
$ |
20,681 |
|
|
$ |
15,099 |
|
|
$ |
83,880 |
|
|
$ |
48,992 |
|
|
|
|
|
|
|
|
|
Diluted FFO per
share (1) |
$ |
0.36 |
|
|
$ |
0.40 |
|
|
$ |
1.17 |
|
|
$ |
0.92 |
|
|
|
|
|
|
|
|
|
Diluted AFFO per
share (1) |
$ |
0.25 |
|
|
$ |
0.21 |
|
|
$ |
1.04 |
|
|
$ |
0.79 |
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding (1) |
|
84,361,612 |
|
|
|
73,268,095 |
|
|
|
80,311,252 |
|
|
|
61,649,847 |
|
|
|
|
|
|
|
|
|
(1) Amounts are attributable to common stockholders
and OP Unit holder. 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. |
|
|
|
|
|
|
|
|
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"), changes in fair value of certain 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 and 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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