Fourth Quarter Company
Highlights:
Arbor Realty Trust, Inc. (NYSE: ABR), today announced financial
results for the fourth quarter and year ended December 31,
2018. Arbor reported net income for the quarter of $37.2
million, or $0.47 per diluted common share, compared to $21.9
million, or $0.35 per diluted common share for the quarter ended
December 31, 2017. Net income for the year was $108.3
million, or $1.50 per diluted common share, compared to $65.8
million, or $1.12 per diluted common share for the year ended
December 31, 2017. Adjusted funds from operations (“AFFO”)
for the quarter was $28.9 million, or $0.29 per diluted common
share, compared to $20.7 million, or $0.25 per diluted common share
for the quarter ended December 31, 2017. AFFO for the year was
$113.1 million, or $1.21 per diluted common share, compared to
$83.9 million, or $1.04 per diluted common share for the year ended
December 31, 2017.
1
Agency Business
Loan Origination Platform
Agency Loan Volume (in thousands) |
|
|
Quarter Ended |
|
Year Ended |
|
|
December 31, 2018 |
|
September 30, 2018 |
|
December 31, 2018 |
|
December 31, 2017 |
Fannie
Mae |
$ |
1,067,230 |
|
$ |
995,662 |
|
$ |
3,332,100 |
|
$ |
2,929,481 |
Freddie
Mac |
|
527,502 |
|
|
317,516 |
|
|
1,587,958 |
|
|
1,322,498 |
FHA |
|
|
15,549 |
|
|
77,236 |
|
|
153,523 |
|
|
189,087 |
CMBS/Conduit |
|
14,025 |
|
|
20,650 |
|
|
50,908 |
|
|
21,370 |
Total
Originations |
$ |
1,624,306 |
|
$ |
1,411,064 |
|
$ |
5,124,489 |
|
$ |
4,462,436 |
|
|
|
|
|
|
|
|
|
Total Loan
Sales |
$ |
1,653,421 |
|
$ |
1,190,004 |
|
$ |
4,924,144 |
|
$ |
4,814,906 |
|
|
|
|
|
|
|
|
|
Total Loan
Commitments |
$ |
1,604,502 |
|
$ |
1,376,376 |
|
$ |
5,104,072 |
|
$ |
4,344,328 |
For the quarter ended December 31, 2018, the
Agency Business generated revenues of $84.4 million, compared to
$58.8 million for the third quarter of 2018. Gain on sales,
including fee-based services, net was $18.7 million for the
quarter, reflecting a margin of 1.13% on loan sales, compared to
$17.5 million and 1.47% for the third quarter of 2018. Income from
mortgage servicing rights was $36.1 million for the quarter,
reflecting a rate of 2.25% as a percentage of loan commitments,
compared to $25.2 million and 1.83% for the third quarter of
2018.
At December 31, 2018, loans held-for-sale was
$481.7 million which was primarily comprised of unpaid principal
balances totaling $473.0 million, with financing associated with
these loans totaling $ 472.2 million.
Fee-Based Servicing
Portfolio
Our fee-based servicing portfolio totaled $18.60
billion at December 31, 2018, an increase of 5% from September 30,
2018, primarily a result of $1.62 billion of new loan originations,
net of $ 803.3 million in portfolio runoff during the quarter.
Servicing revenue, net was $11.4 million for the quarter and
consists of servicing revenue of $23.9 million, net of amortization
of mortgage servicing rights totaling $12.5 million.
|
|
Fee-Based Servicing Portfolio ($ in thousands) |
|
|
As of December 31, 2018 |
|
As of September 30, 2018 |
|
|
UPB |
Wtd. Avg. Fee |
Wtd. Avg. Life (in years) |
|
UPB |
Wtd. Avg. Fee |
Wtd. Avg. Life (in years) |
Fannie
Mae |
$ |
13,562,667 |
0.513 |
% |
7.4 |
|
$ |
13,195,643 |
0.523 |
% |
7.7 |
Freddie
Mac |
|
4,394,287 |
0.308 |
% |
10.8 |
|
|
3,977,619 |
0.308 |
% |
11.0 |
FHA |
|
644,687 |
0.155 |
% |
19.6 |
|
|
621,419 |
0.157 |
% |
20.1 |
Total |
$ |
18,601,641 |
0.452 |
% |
8.6 |
|
$ |
17,794,681 |
0.462 |
% |
8.8 |
|
|
|
|
|
|
|
|
|
Loans sold under the Fannie Mae program contain
an obligation to partially guarantee the performance of the loan
(“loss-sharing obligations”). At December 31, 2018, the Company’s
allowance for loss-sharing obligations was $34.3 million,
representing 0.25% of the Fannie Mae servicing portfolio.
Structured Business
Portfolio and Investment
Activity
Quarter ended December 31, 2018:
- 21 new loan originations totaling $447.5 million, of which 18
were bridge loans for $404.9 million
- Payoffs and pay downs on 23 loans totaling $271.4 million
Year ended December 31, 2018:
- Portfolio growth of 24% was driven by loan origination volume
consisting of 90 new loan originations totaling $1.66 billion, of
which 84 were bridge loans for $1.55 billion
- Payoffs and pay downs on 79 loans totaling $955.6 million
At December 31, 2018, the loan and investment
portfolio’s unpaid principal balance, excluding loan loss reserves,
was $3.28 billion, with a weighted average current interest pay
rate of 7.02%, compared to $3.17 billion and 6.88% at September 30,
2018. Including certain fees earned and costs associated with
the loan and investment portfolio, the weighted average current
interest pay rate was 7.66% at December 31, 2018, compared to 7.52%
at September 30, 2018. The increase in average yield was primarily
due to an increase in LIBOR.
The average balance of the Company’s loan and
investment portfolio during the fourth quarter of 2018, excluding
loan loss reserves, was $3.23 billion with a weighted average yield
on these assets of 7.76%, compared to $3.26 billion and 7.37% for
the third quarter of 2018. The increase in average yield was
primarily due to higher fees on loan payoffs in the fourth quarter
as compared to the third quarter, as well as an increase in
LIBOR.
The Company recorded $10.1 million in loan loss
reserves related to a loan with a carrying value of approximately
$121.4 million, before loan loss reserves. At December 31,
2018, the Company’s total loan loss reserves were $71.1 million on
five loans with an aggregate carrying value before loan loss
reserves of $131.8 million. The Company also had two non-performing
loans with a carrying value of $2.5 million, net of related loan
loss reserves of $1.7 million.
Financing
Activity
The balance of debt that finances the Company’s
loan and investment portfolio at December 31, 2018 was $2.89
billion with a weighted average interest rate including fees of
5.24% as compared to $2.92 billion and a rate of 5.03% at September
30, 2018. The average balance of debt that finances the Company’s
loan and investment portfolio for the fourth quarter of 2018 was
$2.89 billion, as compared to $2.86 billion for the third quarter
of 2018. The average cost of borrowings for the fourth quarter was
5.13%, compared to 4.93% for the third quarter of 2018. The
increase in average costs was primarily due to an increase in
LIBOR.
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, 2018 and as of the most recent
collateralized securitization vehicle determination dates in
January 2019.
Capital
Markets
The Company issued 8.7 million shares of common
stock in a public offering receiving net proceeds of $100.5
million. The Company intends to use the net proceeds 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 $0.27 per share
of common stock for the quarter ended December 31, 2018,
representing an increase of 29% over the prior year dividend of
$0.21 per share. The dividend is payable on March 20, 2019 to
common stockholders of record on March 1, 2019. The ex-dividend
date is February 28, 2019.
The Company also announced today that its 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, 2018 through February
28, 2019. The dividends are payable on February 28, 2019 to
preferred stockholders of record on February 15, 2019. 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.
In addition, the Board of Directors declared a
special dividend of $0.15 per common share, which was paid in a
combination of 80% common stock and 20% cash in January 2019.
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 6283438.
After the live webcast, the call will remain
available on the Company's website through March 31, 2019. In
addition, a telephonic replay of the call will be available until
February 22, 2019. The replay dial-in numbers are (855) 859-2056
for domestic callers and (404) 537-3406 for international callers.
Please use passcode 6283438.
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 Uniondale, New York, Arbor manages a
multibillion-dollar servicing portfolio, specializing in Fannie
Mae, Freddie Mac, and other government-sponsored enterprises, as
well as 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
flexibility, and dedicated 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 11 of this release.
Contacts: |
|
Arbor Realty Trust,
Inc.Paul Elenio, Chief Financial Officer 516-506-4422
pelenio@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, |
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
Interest
income |
|
$ |
73,360 |
|
|
$ |
46,045 |
|
|
$ |
251,768 |
|
|
$ |
156,177 |
|
Interest
expense |
|
|
42,999 |
|
|
|
26,374 |
|
|
|
153,818 |
|
|
|
90,072 |
|
|
Net interest
income |
|
|
30,361 |
|
|
|
19,671 |
|
|
|
97,950 |
|
|
|
66,105 |
|
|
|
|
|
|
|
|
|
|
|
Other revenue: |
|
|
|
|
|
|
|
|
Gain on
sales, including fee-based services, net |
|
|
18,735 |
|
|
|
17,672 |
|
|
|
70,002 |
|
|
|
72,799 |
|
Mortgage
servicing rights |
|
|
36,052 |
|
|
|
20,638 |
|
|
|
98,839 |
|
|
|
76,820 |
|
Servicing
revenue, net |
|
|
11,372 |
|
|
|
9,287 |
|
|
|
46,034 |
|
|
|
29,210 |
|
Property
operating income |
|
|
1,569 |
|
|
|
2,219 |
|
|
|
10,095 |
|
|
|
10,973 |
|
Other
income, net |
|
|
9,736 |
|
|
|
1,615 |
|
|
|
8,161 |
|
|
|
685 |
|
|
Total other
revenue |
|
|
77,464 |
|
|
|
51,431 |
|
|
|
233,131 |
|
|
|
190,487 |
|
|
|
|
|
|
|
|
|
|
|
Other expenses: |
|
|
|
|
|
|
|
|
Employee
compensation and benefits |
|
|
26,386 |
|
|
|
25,265 |
|
|
|
110,470 |
|
|
|
92,126 |
|
Selling and
administrative |
|
|
9,291 |
|
|
|
7,605 |
|
|
|
37,074 |
|
|
|
30,738 |
|
Property
operating expenses |
|
|
2,342 |
|
|
|
2,639 |
|
|
|
10,431 |
|
|
|
10,482 |
|
Depreciation and amortization |
|
|
1,914 |
|
|
|
1,843 |
|
|
|
7,453 |
|
|
|
7,385 |
|
Impairment
loss on real estate owned |
|
|
- |
|
|
|
500 |
|
|
|
2,000 |
|
|
|
3,200 |
|
Provision
for loss sharing (net of recoveries) |
|
|
1,003 |
|
|
|
147 |
|
|
|
3,843 |
|
|
|
(259 |
) |
Provision
for loan losses (net of recoveries) |
|
|
9,319 |
|
|
|
- |
|
|
|
8,353 |
|
|
|
(456 |
) |
Litigation
settlement gain |
|
|
- |
|
|
|
- |
|
|
|
(10,170 |
) |
|
|
- |
|
Management
fee - related party |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
6,673 |
|
|
Total
other expenses |
|
|
50,255 |
|
|
|
37,999 |
|
|
|
169,454 |
|
|
|
149,889 |
|
|
|
|
|
|
|
|
|
|
|
Income
before extinguishment of debt, income from |
|
|
|
|
|
|
|
|
|
equity affiliates and
income taxes |
|
|
57,570 |
|
|
|
33,103 |
|
|
|
161,627 |
|
|
|
106,703 |
|
(Loss) gain
on extinguishment of debt |
|
|
(82 |
) |
|
|
- |
|
|
|
(5,041 |
) |
|
|
7,116 |
|
Income
(loss) from equity affiliates |
|
|
91 |
|
|
|
(4,706 |
) |
|
|
1,196 |
|
|
|
(2,951 |
) |
(Provision
for) benefit from income taxes |
|
|
(8,635 |
) |
|
|
2,885 |
|
|
|
(9,731 |
) |
|
|
(13,359 |
) |
|
|
|
|
|
|
|
|
|
|
Net
income |
|
|
48,944 |
|
|
|
31,282 |
|
|
|
148,051 |
|
|
|
97,509 |
|
|
|
|
|
|
|
|
|
|
|
Preferred
stock dividends |
|
|
1,888 |
|
|
|
1,888 |
|
|
|
7,554 |
|
|
|
7,554 |
|
Net income
attributable to noncontrolling interest |
|
|
9,838 |
|
|
|
7,524 |
|
|
|
32,185 |
|
|
|
24,120 |
|
Net income
attributable to common stockholders |
|
|
37,218 |
|
|
$ |
21,870 |
|
|
$ |
108,312 |
|
|
$ |
65,835 |
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings per common share |
|
$ |
0.48 |
|
|
$ |
0.35 |
|
|
$ |
1.54 |
|
|
$ |
1.14 |
|
Diluted
earnings per common share |
|
$ |
0.47 |
|
|
$ |
0.35 |
|
|
$ |
1.50 |
|
|
$ |
1.12 |
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
78,273,633 |
|
|
|
61,712,782 |
|
|
|
70,208,165 |
|
|
|
57,890,574 |
|
|
Diluted |
|
|
101,148,081 |
|
|
|
84,361,612 |
|
|
|
93,642,168 |
|
|
|
80,311,252 |
|
|
|
|
|
|
|
|
|
|
|
Dividends
declared per common share |
|
$ |
0.42 |
|
|
$ |
0.19 |
|
|
$ |
1.13 |
|
|
$ |
0.72 |
|
|
|
|
|
|
|
|
|
|
|
ARBOR REALTY TRUST,
INC. AND SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
($ in thousands—except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
December 31, |
|
|
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
Cash and
cash equivalents |
|
$ |
160,063 |
|
|
$ |
104,374 |
|
Restricted
cash |
|
|
180,606 |
|
|
|
139,398 |
|
Loans and investments, net |
|
|
3,200,145 |
|
|
|
2,579,127 |
|
Loans held-for-sale, net |
|
|
481,664 |
|
|
|
297,443 |
|
Capitalized
mortgage servicing rights, net |
|
|
273,770 |
|
|
|
252,608 |
|
Securities
held to maturity, net |
|
|
76,363 |
|
|
|
27,837 |
|
Investments
in equity affiliates |
|
|
21,580 |
|
|
|
23,653 |
|
Real estate
owned, net |
|
|
14,446 |
|
|
|
16,787 |
|
Due from
related party |
|
|
1,287 |
|
|
|
688 |
|
Goodwill
and other intangible assets |
|
|
116,165 |
|
|
|
121,766 |
|
Other
assets |
|
|
86,086 |
|
|
|
62,264 |
|
Total assets |
|
$ |
4,612,175 |
|
|
$ |
3,625,945 |
|
|
|
|
|
|
|
|
|
Liabilities and Equity: |
|
|
|
|
Credit
facilities and repurchase agreements |
|
|
1,135,627 |
|
|
|
528,573 |
|
Collateralized loan obligations |
|
|
1,593,548 |
|
|
|
1,418,422 |
|
Debt fund |
|
|
68,183 |
|
|
|
68,084 |
|
Senior
unsecured notes |
|
|
122,484 |
|
|
|
95,280 |
|
Convertible
senior unsecured notes, net |
|
|
254,768 |
|
|
|
231,287 |
|
Junior
subordinated notes to subsidiary trust issuing preferred
securities |
|
|
140,259 |
|
|
|
139,590 |
|
Related
party financing |
|
|
- |
|
|
|
50,000 |
|
Due to
borrowers |
|
|
78,662 |
|
|
|
99,829 |
|
Allowance
for loss-sharing obligations |
|
|
34,298 |
|
|
|
30,511 |
|
Other
liabilities |
|
|
118,780 |
|
|
|
99,813 |
|
Total liabilities |
|
|
3,546,609 |
|
|
|
2,761,389 |
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
Arbor
Realty Trust, Inc. stockholders' equity: |
|
|
|
|
|
|
Preferred
stock, cumulative, redeemable, $0.01 par value: 100,000,000 |
|
|
|
|
|
|
|
shares
authorized; special voting preferred shares; 20,653,584 and
21,230,769 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 |
|
89,502 |
|
|
|
89,508 |
|
|
|
Common
stock, $0.01 par value: 500,000,000 shares authorized;
83,987,707 |
|
|
|
|
|
|
and 61,723,387 shares
issued and outstanding, respectively |
|
|
840 |
|
|
|
617 |
|
|
|
Additional
paid-in capital |
|
|
879,029 |
|
|
|
707,450 |
|
|
|
Accumulated
deficit |
|
|
(74,133 |
) |
|
|
(101,926 |
) |
|
|
Accumulated
other comprehensive income |
|
|
- |
|
|
|
176 |
|
Total Arbor
Realty Trust, Inc. stockholders’ equity |
|
|
895,238 |
|
|
|
695,825 |
|
|
|
|
|
|
|
|
|
Noncontrolling interest |
|
|
170,328 |
|
|
|
168,731 |
|
Total
equity |
|
|
1,065,566 |
|
|
|
864,556 |
|
|
|
|
|
|
|
|
|
Total
liabilities and equity |
|
$ |
4,612,175 |
|
|
$ |
3,625,945 |
|
|
|
|
|
|
|
|
|
ARBOR REALTY TRUST,
INC. AND SUBSIDIARIES |
STATEMENT OF INCOME SEGMENT INFORMATION -
(Unaudited) |
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended December 31, 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Structured Business |
|
Agency Business |
|
Other / Eliminations (1) |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
Interest
income |
|
$ |
64,105 |
|
|
$ |
9,255 |
|
|
$ |
- |
|
|
$ |
73,360 |
|
Interest
expense |
|
|
37,395 |
|
|
|
5,604 |
|
|
|
- |
|
|
|
42,999 |
|
|
Net interest
income |
|
|
26,710 |
|
|
|
3,651 |
|
|
|
- |
|
|
|
30,361 |
|
|
|
|
|
|
|
|
|
|
|
Other revenue: |
|
|
|
|
|
|
|
|
Gain on
sales, including fee-based services, net |
|
|
- |
|
|
|
18,735 |
|
|
|
- |
|
|
|
18,735 |
|
Mortgage
servicing rights |
|
|
- |
|
|
|
36,052 |
|
|
|
- |
|
|
|
36,052 |
|
Servicing
revenue |
|
|
- |
|
|
|
23,857 |
|
|
|
- |
|
|
|
23,857 |
|
Amortization of MSRs |
|
|
- |
|
|
|
(12,485 |
) |
|
|
- |
|
|
|
(12,485 |
) |
Property
operating income |
|
|
1,569 |
|
|
|
- |
|
|
|
- |
|
|
|
1,569 |
|
Other
income, net |
|
|
734 |
|
|
|
9,002 |
|
|
|
- |
|
|
|
9,736 |
|
|
Total other
revenue |
|
|
2,303 |
|
|
|
75,161 |
|
|
|
- |
|
|
|
77,464 |
|
|
|
|
|
|
|
|
|
|
|
Other expenses: |
|
|
|
|
|
|
|
|
Employee
compensation and benefits |
|
|
6,437 |
|
|
|
19,949 |
|
|
|
- |
|
|
|
26,386 |
|
Selling and
administrative |
|
|
4,142 |
|
|
|
5,149 |
|
|
|
- |
|
|
|
9,291 |
|
Property
operating expenses |
|
|
2,342 |
|
|
|
- |
|
|
|
- |
|
|
|
2,342 |
|
Depreciation and amortization |
|
|
514 |
|
|
|
1,400 |
|
|
|
- |
|
|
|
1,914 |
|
Provision
for loss sharing (net of recoveries) |
|
|
- |
|
|
|
1,003 |
|
|
|
- |
|
|
|
1,003 |
|
Provision
for loan losses (net of recoveries) |
|
|
9,319 |
|
|
|
- |
|
|
|
- |
|
|
|
9,319 |
|
|
Total
other expenses |
|
|
22,754 |
|
|
|
27,501 |
|
|
|
- |
|
|
|
50,255 |
|
|
|
|
|
|
|
|
|
|
|
Income
before extinguishment of debt, income from |
|
|
|
|
|
|
|
|
equity affiliates and
income taxes |
|
|
6,259 |
|
|
|
51,311 |
|
|
|
- |
|
|
|
57,570 |
|
Loss on
extinguishment of debt |
|
|
(82 |
) |
|
|
- |
|
|
|
- |
|
|
|
(82 |
) |
Income from
equity affiliates |
|
|
91 |
|
|
|
- |
|
|
|
- |
|
|
|
91 |
|
Benefit
from (provision for) income taxes |
|
|
273 |
|
|
|
(8,908 |
) |
|
|
- |
|
|
|
(8,635 |
) |
|
|
|
|
|
|
|
|
|
|
Net
income |
|
|
6,541 |
|
|
|
42,403 |
|
|
|
- |
|
|
|
48,944 |
|
|
|
|
|
|
|
|
|
|
|
Preferred
stock dividends |
|
|
1,888 |
|
|
|
- |
|
|
|
- |
|
|
|
1,888 |
|
Net income
attributable to noncontrolling interest |
|
|
- |
|
|
|
- |
|
|
|
9,838 |
|
|
|
9,838 |
|
Net income
attributable to common stockholders |
|
$ |
4,653 |
|
|
$ |
42,403 |
|
|
$ |
(9,838 |
) |
|
$ |
37,218 |
|
|
|
|
|
|
|
|
|
|
|
(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, 2018 |
|
|
|
|
|
Structured Business |
|
Agency Business |
|
Consolidated |
Assets: |
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
89,457 |
|
$ |
70,606 |
|
$ |
160,063 |
Restricted
cash |
|
|
180,606 |
|
|
- |
|
|
180,606 |
Loans and investments, net |
|
|
3,200,145 |
|
|
- |
|
|
3,200,145 |
Loans held-for-sale, net |
|
|
- |
|
|
481,664 |
|
|
481,664 |
Capitalized
mortgage servicing rights, net |
|
- |
|
|
273,770 |
|
|
273,770 |
Securities
held to maturity, net |
|
|
- |
|
|
76,363 |
|
|
76,363 |
Investments
in equity affiliates |
|
|
21,580 |
|
|
- |
|
|
21,580 |
Goodwill
and other intangible assets |
|
|
12,500 |
|
|
103,665 |
|
|
116,165 |
Other
assets |
|
|
81,494 |
|
|
20,325 |
|
|
101,819 |
Total assets |
|
$ |
3,585,782 |
|
$ |
1,026,393 |
|
$ |
4,612,175 |
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
Debt
obligations |
|
|
2,842,688 |
|
|
472,181 |
|
|
3,314,869 |
Allowance
for loss-sharing obligations |
|
- |
|
|
34,298 |
|
|
34,298 |
Other
liabilities |
|
|
159,413 |
|
|
38,029 |
|
|
197,442 |
Total liabilities |
|
$ |
3,002,101 |
|
$ |
544,508 |
|
$ |
3,546,609 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, |
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
Net income attributable
to common stockholders |
$ |
37,218 |
|
|
$ |
21,870 |
|
|
$ |
108,312 |
|
|
$ |
65,835 |
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
Net income
attributable to noncontrolling interest |
|
9,838 |
|
|
|
7,524 |
|
|
|
32,185 |
|
|
|
24,120 |
|
Impairment loss
on real estate owned |
|
- |
|
|
|
500 |
|
|
|
2,000 |
|
|
|
3,200 |
|
Depreciation -
real estate owned |
|
176 |
|
|
|
177 |
|
|
|
708 |
|
|
|
769 |
|
Depreciation -
investments in equity affiliates |
|
125 |
|
|
|
102 |
|
|
|
499 |
|
|
|
406 |
|
|
|
|
|
|
|
|
|
Funds from
operations (1) |
$ |
47,357 |
|
|
$ |
30,173 |
|
|
$ |
143,704 |
|
|
$ |
94,330 |
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
Income from
mortgage servicing rights |
|
(36,052 |
) |
|
|
(20,638 |
) |
|
|
(98,839 |
) |
|
|
(76,820 |
) |
Impairment loss
on real estate owned |
|
- |
|
|
|
(500 |
) |
|
|
(2,000 |
) |
|
|
(3,200 |
) |
Deferred tax
provision (benefit) |
|
2,421 |
|
|
|
(7,414 |
) |
|
|
(12,033 |
) |
|
|
(7,399 |
) |
Amortization and
write-offs of MSRs |
|
20,314 |
|
|
|
16,894 |
|
|
|
73,182 |
|
|
|
63,034 |
|
Depreciation and
amortization |
|
2,582 |
|
|
|
2,073 |
|
|
|
9,618 |
|
|
|
7,697 |
|
Net (gain) loss
on changes in fair value of derivatives |
|
(9,002 |
) |
|
|
(914 |
) |
|
|
(6,672 |
) |
|
|
1,398 |
|
Stock-based
compensation |
|
1,257 |
|
|
|
1,007 |
|
|
|
6,095 |
|
|
|
4,840 |
|
|
|
|
|
|
|
|
|
Adjusted funds from
operations (1) (2) |
$ |
28,877 |
|
|
$ |
20,681 |
|
|
$ |
113,055 |
|
|
$ |
83,880 |
|
|
|
|
|
|
|
|
|
Diluted FFO per
share (1) |
$ |
0.47 |
|
|
$ |
0.36 |
|
|
$ |
1.53 |
|
|
$ |
1.17 |
|
|
|
|
|
|
|
|
|
Diluted AFFO per
share (1) (2) |
$ |
0.29 |
|
|
$ |
0.25 |
|
|
$ |
1.21 |
|
|
$ |
1.04 |
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding (1) |
|
101,148,081 |
|
|
|
84,361,612 |
|
|
|
93,642,168 |
|
|
|
80,311,252 |
|
|
|
|
|
|
|
|
|
(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) Excluding the impact of a non-cash $10.1 million loan loss
reserve related to a legacy pre-crisis asset, AFFO for the quarter
ended December 31, 2018 was $39.0 million, or $0.39 per diluted
common share.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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