Arbor Realty Trust, Inc. (NYSE: ABR), today announced financial
results for the first quarter ended March 31, 2022. Arbor reported
net income for the quarter of $64.1 million, or $0.40 per diluted
common share, compared to net income of $69.5 million, or $0.55 per
diluted common share for the quarter ended March 31, 2021.
Distributable earnings for the quarter was $92.9 million, or $0.55
per diluted common share, compared to $75.1 million, or $0.52 per
diluted common share for the quarter ended March 31, 2021.1
Agency Business
Loan
Origination Platform
|
|
Agency Loan Volume (in thousands) |
|
|
Quarter Ended |
|
|
March 31,2022 |
|
December 31,2021 |
Fannie Mae |
$ |
449,680 |
|
|
$ |
968,105 |
|
Freddie Mac |
|
299,072 |
|
|
|
437,847 |
|
Private Label |
|
72,896 |
|
|
|
282,038 |
|
FHA |
|
|
11,990 |
|
|
|
148,647 |
|
SFR-Fixed
Rate |
|
4,871 |
|
|
|
57,709 |
|
Total
Originations |
$ |
838,509 |
|
|
$ |
1,894,346 |
|
|
|
|
|
|
Total Loan
Sales |
$ |
1,586,715 |
|
|
$ |
2,084,211 |
|
|
|
|
|
|
Total Loan
Commitments |
$ |
975,132 |
|
|
$ |
1,836,799 |
|
|
|
|
|
|
|
|
|
For the quarter ended
March 31, 2022, the Agency Business generated revenues of $65.9
million, compared to $111.7 million for the fourth quarter of 2021.
Gain on sales, including fee-based services, net on the GSE/Agency
business was $15.3 million for the quarter, reflecting a margin of
1.39%, compared to $22.2 million and 1.52% for the fourth quarter
of 2021. Income from mortgage servicing rights was $15.3 million
for the quarter, reflecting a rate of 1.57% as a percentage of loan
commitments, compared to $34.5 million and 1.88% for the fourth
quarter of 2021.
At March 31, 2022,
loans held-for-sale was $337.0 million which was primarily
comprised of unpaid principal balances totaling $332.9 million,
with financing associated with these loans totaling $301.8
million.
The Company closed its
fourth private label securitization totaling $489.3 million. The
Company originated and sold multifamily mortgage loans to the
securitization and is the primary servicer. The Company retained
subordinate certificate interests in the securitization
of $43.4 million, in satisfaction of credit risk retention
requirements.
Fee-Based
Servicing Portfolio
The Company’s
fee-based servicing portfolio totaled $26.96 billion at March 31,
2022 and excludes $88.9 million of private label loans originated
that were not yet securitized. Servicing revenue, net was $21.1
million for the quarter and consisted of servicing revenue of $36.0
million, net of amortization of mortgage servicing rights totaling
$15.0 million.
|
|
Fee-Based Servicing Portfolio ($ in thousands) |
|
|
As of March 31, 2022 |
|
As of December 31, 2021 |
|
|
UPB |
Wtd. Avg. Fee |
Wtd. Avg. Life (years) |
|
UPB |
Wtd. Avg. Fee |
Wtd. Avg. Life (years) |
Fannie Mae |
|
$ |
18,781,611 |
|
0.534 |
% |
8.1 |
|
$ |
19,127,397 |
|
0.535 |
% |
8.0 |
Freddie Mac |
|
|
4,792,764 |
|
0.267 |
% |
9.3 |
|
|
4,943,905 |
|
0.271 |
% |
9.3 |
Private Label |
|
|
2,200,206 |
|
0.200 |
% |
8.4 |
|
|
1,711,326 |
|
0.200 |
% |
8.3 |
FHA |
|
|
999,446 |
|
0.153 |
% |
20.9 |
|
|
985,063 |
|
0.154 |
% |
21.0 |
SFR-Fixed Rate |
|
|
190,590 |
|
0.200 |
% |
6.4 |
|
|
191,698 |
|
0.200 |
% |
6.5 |
Total |
|
$ |
26,964,617 |
|
0.443 |
% |
8.8 |
|
$ |
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 March 31, 2022. The Company recorded a $0.6 million
reversal of provision for loss sharing associated with CECL for the
first quarter of 2022. At March 31, 2022, the Company’s total CECL
allowance for loss-sharing obligations was $21.0 million,
representing 0.11% of the Fannie Mae servicing portfolio.
Structured
Business
Portfolio and
Investment Activity
- Significant growth in the portfolio
of $2.01 billion, or 16.5%
- Originated 125 loans totaling $2.83
billion, consisted primarily of multifamily bridge loans totaling
$2.69 billion
- Payoffs and pay downs on 36 loans
totaling $666.6 million
- Committed to fund $83.3 million
single-family rental loans
At March 31, 2022, the
loan and investment portfolio’s unpaid principal balance, excluding
loan loss reserves, was $14.17 billion, with a weighted average
current interest pay rate of 4.38%, compared to $12.16 billion and
4.26% at December 31, 2021. Including certain fees earned and costs
associated with the loan and investment portfolio, the weighted
average current interest pay rate was 4.74% at March 31, 2022,
compared to 4.62% at December 31, 2021.
The average balance of
the Company’s loan and investment portfolio during the first
quarter of 2022, excluding loan loss reserves, was $13.02 billion
with a weighted average yield of 4.86%, compared to $10.46 billion
and 5.03% for the fourth quarter of 2021. The decrease in average
yield was primarily due to lower rates on originations when
compared to runoff.
During the first quarter of 2022, the Company
recorded a $3.1 million provision for loan losses associated with
CECL on the Company’s loan and investment portfolio. At March 31,
2022, the Company’s total allowance for loan losses was $116.4
million. The Company had four non-performing loans with a carrying
value of $25.2 million, before related loan loss reserves of $5.1
million, compared to three loans with a carrying value of $22.7
million, before related loan loss reserves of $2.6 million as of
December 31, 2021.
Financing
Activity
The Company completed
its 18th collateralized securitization vehicle to date
totaling $2.05 billion of real estate related assets and
cash. Investment grade-rated notes totaling $1.65
billion were issued, and the Company retained subordinate
interests in the issuing vehicle of $397.2 million. The
facility has a two-and-a-half-year asset replenishment period and
an initial weighted average interest rate of 1.81% over compounded
SOFR, excluding fees and transaction costs.
The Company completed
the unwind of a previously issued CLO, redeeming $441.0
million of outstanding notes, which were repaid primarily from
the refinancing of the remaining assets primarily within the $2.05
billion CLO described above, as well as with cash held by this
CLO, and expensed $1.4 million of deferred financing fees
into loss on extinguishment of debt on the consolidated statements
of income.
The balance of debt
that finances the Company’s loan and investment portfolio at March
31, 2022 was $12.86 billion with a weighted average interest rate
including fees of 2.81% as compared to $11.17 billion and a rate of
2.61% at December 31, 2021. The average balance of debt that
finances the Company’s loan and investment portfolio for the first
quarter of 2022 was $11.99 billion, as compared to $9.38 billion
for the fourth quarter of 2021. The average cost of borrowings for
both the first quarter of 2022 and fourth quarter of 2021 was
2.65%.
Capital
Markets
The Company issued 7.5 million shares of common
stock in a public offering, including the underwriters’ exercise of
their over-allotment option, receiving net proceeds of $123.7
million.
The Company completed a public offering of 3.3
million additional shares of its 6.25% Series F fixed-to-floating
cumulative redeemable preferred stock, including the underwriters’
exercise of their over-allotment option, generating net proceeds of
$77.1 million.
Dividends
The Company announced
today that its Board of Directors has declared a quarterly cash
dividend of $0.38 per share of common stock for the quarter ended
March 31, 2022, the Company’s eighth consecutive quarterly
increase, representing a 27% increase over that time span. The
dividend is payable on May 31, 2022 to common stockholders of
record on May 20, 2022. The ex-dividend date is May 19, 2022.
Earnings
Conference Call
The Company will host
a conference call today at 10:00 a.m. Eastern Time. A live webcast
and replay of the conference call will be available at
www.arbor.com in the investor relations section of the Company’s
website, or you can access the call telephonically at least ten
minutes prior to the conference call. The dial-in numbers are (866)
518-6930 for domestic callers and (203) 518-9797 for international
callers. Please use participant passcode ABRQ122 when prompted by
the operator.
A telephonic replay of
the call will be available until May 13, 2022. The replay dial-in
numbers are (800) 839-5152 for domestic callers and (402) 220-2694
for international callers.
About Arbor
Realty Trust, Inc.
Arbor Realty Trust, Inc. (NYSE: ABR) is a
nationwide real estate investment trust and direct lender,
providing loan origination and servicing for multifamily,
single-family rental (SFR) portfolios, and other diverse commercial
real estate assets. Headquartered in New York, Arbor manages a
multibillion-dollar servicing portfolio, specializing in
government-sponsored enterprise products. Arbor is a leading Fannie
Mae DUS® lender and Freddie Mac Optigo® Seller/Servicer, and an
approved FHA Multifamily Accelerated Processing (MAP) lender.
Arbor’s product platform also includes bridge, CMBS, mezzanine and
preferred equity loans. Rated by Standard and Poor’s and Fitch
Ratings, Arbor is committed to building on its reputation for
service, quality, and customized solutions with an unparalleled
dedication to providing our clients excellence over the entire life
of a loan.
Safe Harbor
Statement
Certain items in this
press release may constitute forward-looking statements within the
meaning of the “safe harbor” provisions of the Private Securities
Litigation Reform Act of 1995. These statements are based on
management’s current expectations and beliefs and are subject to a
number of trends and uncertainties that could cause actual results
to differ materially from those described in the forward-looking
statements. Arbor can give no assurance that its expectations will
be attained. Factors that could cause actual results to differ
materially from Arbor’s expectations include, but are not limited
to, changes in economic conditions generally, and the real estate
markets specifically, in particular, due to the uncertainties
created by the COVID-19 pandemic, continued ability to source new
investments, changes in interest rates and/or credit spreads, and
other risks detailed in Arbor’s Annual Report on Form 10-K for the
year ended December 31, 2021 and its other reports filed with the
SEC. Such forward-looking statements speak only as of the date of
this press release. Arbor expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change
in Arbor’s expectations with regard thereto or change in events,
conditions, or circumstances on which any such statement is
based.
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 the last page of
this release.
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 March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
Interest income |
|
$ |
166,698 |
|
|
$ |
91,144 |
|
Interest expense |
|
|
82,559 |
|
|
|
42,184 |
|
Net interest income |
|
|
84,139 |
|
|
|
48,960 |
|
|
|
|
|
|
Other
revenue: |
|
|
|
|
Gain on sales, including
fee-based services, net |
|
|
1,656 |
|
|
|
28,867 |
|
Mortgage servicing rights |
|
|
15,312 |
|
|
|
36,936 |
|
Servicing revenue, net |
|
|
21,054 |
|
|
|
15,536 |
|
Property operating income |
|
|
295 |
|
|
|
- |
|
Gain (loss) on derivative
instruments, net |
|
|
17,386 |
|
|
|
(3,220 |
) |
Other income, net |
|
|
3,200 |
|
|
|
681 |
|
Total other revenue |
|
|
58,903 |
|
|
|
78,800 |
|
|
|
|
|
|
Other
expenses: |
|
|
|
|
Employee compensation and
benefits |
|
|
42,025 |
|
|
|
42,974 |
|
Selling and
administrative |
|
|
14,548 |
|
|
|
10,818 |
|
Property operating
expenses |
|
|
535 |
|
|
|
143 |
|
Depreciation and
amortization |
|
|
1,983 |
|
|
|
1,755 |
|
Provision for loss sharing
(net of recoveries) |
|
|
(662 |
) |
|
|
1,652 |
|
Provision for credit losses
(net of recoveries) |
|
|
2,358 |
|
|
|
(1,075 |
) |
Total other expenses |
|
|
60,787 |
|
|
|
56,267 |
|
|
|
|
|
|
Income before extinguishment
of debt, sale of real estate, income from equity affiliates, and
income taxes |
|
|
82,255 |
|
|
|
71,493 |
|
Loss on extinguishment of
debt |
|
|
(1,350 |
) |
|
|
(1,370 |
) |
Gain on sale of real
estate |
|
|
- |
|
|
|
1,228 |
|
Income from equity
affiliates |
|
|
7,212 |
|
|
|
22,251 |
|
Provision for income
taxes |
|
|
(8,188 |
) |
|
|
(12,492 |
) |
|
|
|
|
|
Net income |
|
|
79,929 |
|
|
|
81,110 |
|
|
|
|
|
|
Preferred stock dividends |
|
|
9,056 |
|
|
|
1,888 |
|
Net income attributable to
noncontrolling interest |
|
|
6,816 |
|
|
|
9,743 |
|
Net income attributable to
common stockholders |
|
$ |
64,057 |
|
|
$ |
69,479 |
|
|
|
|
|
|
Basic earnings per common
share |
|
$ |
0.42 |
|
|
$ |
0.55 |
|
Diluted earnings per common
share |
|
$ |
0.40 |
|
|
$ |
0.55 |
|
|
|
|
|
|
Weighted average shares
outstanding: |
|
|
|
|
Basic |
|
|
153,420,238 |
|
|
|
125,235,405 |
|
Diluted |
|
|
185,431,404 |
|
|
|
143,958,433 |
|
|
|
|
|
|
Dividends declared per common
share |
|
$ |
0.37 |
|
|
$ |
0.33 |
|
|
|
|
|
|
|
|
|
|
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES |
Consolidated Balance Sheets |
($ in thousands—except share and per share data) |
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
(Unaudited) |
|
|
Assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
350,814 |
|
|
$ |
404,580 |
|
Restricted cash |
|
|
517,090 |
|
|
|
486,690 |
|
Loans and investments, net
(allowance for credit losses of $116,382 and $113,241) |
|
|
13,978,283 |
|
|
|
11,981,048 |
|
Loans held-for-sale, net |
|
|
336,959 |
|
|
|
1,093,609 |
|
Capitalized mortgage servicing
rights, net |
|
|
422,036 |
|
|
|
422,734 |
|
Securities held-to-maturity,
net (allowance for credit losses of $2,043 and $1,753) |
|
|
161,696 |
|
|
|
140,484 |
|
Investments in equity
affiliates |
|
|
96,836 |
|
|
|
89,676 |
|
Due from related party |
|
|
53,744 |
|
|
|
84,318 |
|
Goodwill and other intangible
assets |
|
|
99,587 |
|
|
|
100,760 |
|
Other assets |
|
|
291,861 |
|
|
|
269,946 |
|
Total assets |
|
$ |
16,308,906 |
|
|
$ |
15,073,845 |
|
|
|
|
|
|
Liabilities and
Equity: |
|
|
|
|
Credit facilities and
repurchase agreements |
|
$ |
4,302,819 |
|
|
$ |
4,481,579 |
|
Collateralized loan
obligations |
|
|
7,099,770 |
|
|
|
5,892,810 |
|
Senior unsecured notes |
|
|
1,281,489 |
|
|
|
1,280,545 |
|
Convertible senior unsecured
notes, net |
|
|
262,483 |
|
|
|
259,385 |
|
Junior subordinated notes to
subsidiary trust issuing preferred securities |
|
|
142,570 |
|
|
|
142,382 |
|
Due to related party |
|
|
12,812 |
|
|
|
26,570 |
|
Due to borrowers |
|
|
106,796 |
|
|
|
96,641 |
|
Allowance for loss-sharing
obligations |
|
|
55,172 |
|
|
|
56,064 |
|
Other liabilities |
|
|
272,947 |
|
|
|
287,885 |
|
Total liabilities |
|
|
13,536,858 |
|
|
|
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: |
|
|
633,734 |
|
|
|
556,163 |
|
Special voting preferred shares - 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 -
160,198,115 and 151,362,181 shares issued and outstanding |
|
|
1,602 |
|
|
|
1,514 |
|
Additional paid-in capital |
|
|
1,927,621 |
|
|
|
1,797,913 |
|
Retained earnings |
|
|
75,828 |
|
|
|
62,532 |
|
Total Arbor Realty Trust, Inc.
stockholders’ equity |
|
|
2,638,785 |
|
|
|
2,418,122 |
|
|
|
|
|
|
Noncontrolling interest |
|
|
133,263 |
|
|
|
131,862 |
|
Total equity |
|
|
2,772,048 |
|
|
|
2,549,984 |
|
|
|
|
|
|
Total liabilities and
equity |
|
$ |
16,308,906 |
|
|
$ |
15,073,845 |
|
|
|
|
|
|
|
|
|
|
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES |
Statement of Income Segment Information - (Unaudited) |
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
Structured Business |
|
Agency Business |
|
Other / Eliminations (1) |
|
Consolidated |
|
|
|
|
|
|
|
|
|
Interest income |
|
$ |
156,260 |
|
|
$ |
10,438 |
|
|
$ |
- |
|
|
$ |
166,698 |
|
Interest expense |
|
|
78,202 |
|
|
|
4,357 |
|
|
|
- |
|
|
|
82,559 |
|
Net interest income |
|
|
78,058 |
|
|
|
6,081 |
|
|
|
- |
|
|
|
84,139 |
|
|
|
|
|
|
|
|
|
|
Other
revenue: |
|
|
|
|
|
|
|
|
Gain on sales, including
fee-based services, net |
|
|
- |
|
|
|
1,656 |
|
|
|
- |
|
|
|
1,656 |
|
Mortgage servicing rights |
|
|
- |
|
|
|
15,312 |
|
|
|
- |
|
|
|
15,312 |
|
Servicing revenue |
|
|
- |
|
|
|
36,026 |
|
|
|
- |
|
|
|
36,026 |
|
Amortization of MSRs |
|
|
- |
|
|
|
(14,972 |
) |
|
|
- |
|
|
|
(14,972 |
) |
Property operating income |
|
|
295 |
|
|
|
- |
|
|
|
- |
|
|
|
295 |
|
Gain on derivative
instruments, net |
|
|
- |
|
|
|
17,386 |
|
|
|
- |
|
|
|
17,386 |
|
Other income, net |
|
|
3,196 |
|
|
|
4 |
|
|
|
- |
|
|
|
3,200 |
|
Total other revenue |
|
|
3,491 |
|
|
|
55,412 |
|
|
|
- |
|
|
|
58,903 |
|
|
|
|
|
|
|
|
|
|
Other
expenses: |
|
|
|
|
|
|
|
|
Employee compensation and
benefits |
|
|
15,487 |
|
|
|
26,538 |
|
|
|
- |
|
|
|
42,025 |
|
Selling and
administrative |
|
|
7,409 |
|
|
|
7,139 |
|
|
|
- |
|
|
|
14,548 |
|
Property operating
expenses |
|
|
535 |
|
|
|
- |
|
|
|
- |
|
|
|
535 |
|
Depreciation and
amortization |
|
|
810 |
|
|
|
1,173 |
|
|
|
- |
|
|
|
1,983 |
|
Provision for loss sharing
(net of recoveries) |
|
|
- |
|
|
|
(662 |
) |
|
|
- |
|
|
|
(662 |
) |
Provision for credit losses
(net of recoveries) |
|
|
2,069 |
|
|
|
289 |
|
|
|
- |
|
|
|
2,358 |
|
Total other expenses |
|
|
26,310 |
|
|
|
34,477 |
|
|
|
- |
|
|
|
60,787 |
|
|
|
|
|
|
|
|
|
|
Income before extinguishment
of debt, income from equity affiliates, and income taxes |
|
|
55,239 |
|
|
|
27,016 |
|
|
|
- |
|
|
|
82,255 |
|
|
|
|
|
|
|
|
|
|
Loss on extinguishment of
debt |
|
|
(1,350 |
) |
|
|
- |
|
|
|
- |
|
|
|
(1,350 |
) |
Income from equity
affiliates |
|
|
7,212 |
|
|
|
- |
|
|
|
- |
|
|
|
7,212 |
|
Provision for income
taxes |
|
|
(1,432 |
) |
|
|
(6,756 |
) |
|
|
- |
|
|
|
(8,188 |
) |
|
|
|
|
|
|
|
|
|
Net income |
|
|
59,669 |
|
|
|
20,260 |
|
|
|
- |
|
|
|
79,929 |
|
|
|
|
|
|
|
|
|
|
Preferred stock dividends |
|
|
9,056 |
|
|
|
- |
|
|
|
- |
|
|
|
9,056 |
|
Net income attributable to
noncontrolling interest |
|
|
- |
|
|
|
- |
|
|
|
6,816 |
|
|
|
6,816 |
|
Net income attributable to
common stockholders |
|
$ |
50,613 |
|
|
$ |
20,260 |
|
|
$ |
(6,816 |
) |
|
$ |
64,057 |
|
|
|
|
|
|
|
|
|
|
(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) |
|
|
|
|
|
|
|
March 31, 2022 |
|
Structured Business |
|
Agency Business |
|
Consolidated |
Assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
90,106 |
|
|
$ |
260,708 |
|
|
$ |
350,814 |
|
Restricted cash |
|
498,412 |
|
|
|
18,678 |
|
|
|
517,090 |
|
Loans and investments,
net |
|
13,978,283 |
|
|
|
- |
|
|
|
13,978,283 |
|
Loans held-for-sale, net |
|
- |
|
|
|
336,959 |
|
|
|
336,959 |
|
Capitalized mortgage servicing
rights, net |
|
- |
|
|
|
422,036 |
|
|
|
422,036 |
|
Securities held-to-maturity,
net |
|
- |
|
|
|
161,696 |
|
|
|
161,696 |
|
Investments in equity
affiliates |
|
96,836 |
|
|
|
- |
|
|
|
96,836 |
|
Goodwill and other intangible
assets |
|
12,500 |
|
|
|
87,087 |
|
|
|
99,587 |
|
Other assets |
|
282,065 |
|
|
|
63,540 |
|
|
|
345,605 |
|
Total assets |
$ |
14,958,202 |
|
|
$ |
1,350,704 |
|
|
$ |
16,308,906 |
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
Debt obligations |
$ |
12,787,332 |
|
|
$ |
301,799 |
|
|
$ |
13,089,131 |
|
Allowance for loss-sharing
obligations |
|
- |
|
|
|
55,172 |
|
|
|
55,172 |
|
Other liabilities |
|
268,454 |
|
|
|
124,101 |
|
|
|
392,555 |
|
Total liabilities |
$ |
13,055,786 |
|
|
$ |
481,072 |
|
|
$ |
13,536,858 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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 March 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income attributable to common stockholders |
$ |
64,057 |
|
|
$ |
69,479 |
|
|
|
|
|
Adjustments: |
|
|
|
Net income attributable to noncontrolling interest |
|
6,816 |
|
|
|
9,743 |
|
Income from mortgage servicing rights |
|
(15,312 |
) |
|
|
(36,936 |
) |
Deferred tax (benefit) provision |
|
(1,720 |
) |
|
|
4,486 |
|
Amortization and write-offs of MSRs |
|
27,669 |
|
|
|
18,032 |
|
Depreciation and amortization |
|
2,569 |
|
|
|
2,700 |
|
Loss on extinguishment of debt |
|
1,350 |
|
|
|
1,370 |
|
Provision for credit losses, net |
|
1,696 |
|
|
|
(277 |
) |
(Gain) loss on derivative instruments, net |
|
(298 |
) |
|
|
3,220 |
|
Stock-based compensation |
|
6,092 |
|
|
|
3,330 |
|
|
|
|
|
Distributable earnings (1) |
$ |
92,919 |
|
|
$ |
75,147 |
|
|
|
|
|
Diluted
distributable earnings per share (1) |
$ |
0.55 |
|
|
$ |
0.52 |
|
|
|
|
|
Diluted
weighted average shares outstanding (1) (2) |
|
170,363,021 |
|
|
|
143,958,433 |
|
|
|
|
|
(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 ended March 31, 2022, the diluted weighted average shares
outstanding excluded 15,068,383 of these potentially issuable
shares.
The Company is presenting distributable earnings
because management believes it is an important supplemental measure
of the Company's operating performance and is useful to investors,
analysts and other parties in the evaluation of REITs and their
ability to provide dividends to stockholders. Dividends are one of
the principal reasons investors invest in REITs. To maintain REIT
status, REITs are required to distribute at least 90% of their
REIT-taxable income. The Company considers distributable earnings
in determining its quarterly dividend and believes that, over time,
distributable earnings is a useful indicator of the Company's
dividends per share.
The Company defines distributable earnings as
net income (loss) attributable to common stockholders computed in
accordance with GAAP, adjusted for accounting items such as
depreciation and amortization (adjusted for unconsolidated joint
ventures), non-cash stock-based compensation expense, income from
MSRs, amortization and write-offs of MSRs, gains/losses on
derivative instruments primarily associated with Private Label
loans not yet sold and securitized, the tax impact on cumulative
gains/losses on derivative instruments associated with Private
Label loans sold during the periods presented, changes in fair
value of GSE-related derivatives that temporarily flow through
earnings, deferred tax provision (benefit), CECL provisions for
credit losses (adjusted for realized losses as described below),
amortization of the convertible senior notes conversion option (in
comparative periods prior to 2022) and gains/losses on the receipt
of real estate from the settlement of loans (prior to the sale of
the real estate). The Company also adds back one-time charges such
as acquisition costs and one-time gains/losses on the early
extinguishment of debt and redemption of preferred stock.
The Company reduces distributable earnings for
realized losses in the period management determines that a loan is
deemed nonrecoverable in whole or in part. Loans are deemed
nonrecoverable upon the earlier of: (1) when the loan receivable is
settled (i.e., when the loan is repaid, or in the case of
foreclosure, when the underlying asset is sold); or (2) when
management determines that it is nearly certain that all amounts
due will not be collected. The realized loss amount is equal to the
difference between the cash received, or expected to be received,
and the book value of the asset.
Distributable earnings is not intended to be an
indication of the Company's cash flows from operating activities
(determined in accordance with GAAP) or a measure of its liquidity,
nor is it entirely indicative of funding the Company's cash needs,
including its ability to make cash distributions. The Company's
calculation of distributable earnings may be different from the
calculations used by other companies and, therefore, comparability
may be limited.
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