Arbor Realty Trust, Inc. (NYSE:ABR), today announced financial
results for the second quarter ended June 30, 2020. Arbor
reported net income for the quarter of $44.1 million, or $0.40 per
diluted common share, compared to net income of $28.9 million, or
$0.31 per diluted common share for the quarter ended June 30,
2019. Core earnings for the quarter was $60.4 million, or
$0.46 per diluted common share, compared to $38.6 million, or $0.34
per diluted common share for the quarter ended June 30,
2019.
1
Agency
Business
Loan
Origination Platform
Agency Loan Volume (in thousands) |
|
Quarter Ended |
|
June 30, 2020 |
|
March 31, 2020 |
Originations: |
|
|
|
Fannie
Mae |
$ |
1,140,181 |
|
$ |
581,973 |
Freddie
Mac |
|
135,720 |
|
|
199,711 |
FHA |
|
75,533 |
|
|
17,944 |
Private
Label |
|
49,122 |
|
|
282,345 |
Total
Originations |
$ |
1,400,556 |
|
$ |
1,081,973 |
|
|
|
|
Total Loan
Sales |
$ |
1,992,889 |
|
$ |
957,060 |
|
|
|
|
Total Loan
Commitments |
$ |
1,206,723 |
|
$ |
1,267,219 |
|
|
|
|
For the quarter ended
June 30, 2020, the Agency Business generated revenues (excluding
gains and losses on derivative instruments) of $81.1 million,
compared to $59.6 million for the first quarter of 2020. Gain on
sales, including fee-based services, net was $26.4 million for the
quarter, reflecting a margin of 1.32% on loan sales, compared to
$14.3 million and 1.49% for the first quarter of 2020. Income from
mortgage servicing rights was $32.4 million for the quarter,
reflecting a rate of 2.69% as a percentage of loan commitments,
compared to $21.9 million and 1.73% for the first quarter of
2020.
At June 30, 2020,
loans held-for-sale was $360.4 million which was primarily
comprised of unpaid principal balances totaling $349.9 million,
with financing associated with these loans totaling $333.5
million.
The Company completed
its first private label multifamily securitization totaling $727.2
million comprised of fixed rate, 10-year first lien mortgage loans.
The Company originated and sold the mortgage loans to the
securitization and will be the primary servicer. The Company
retained subordinate certificate interests in the securitization of
$63.6 million, in satisfaction of credit risk retention
requirements.
Fee-Based
Servicing Portfolio
Our fee-based
servicing portfolio totaled $21.58 billion at June 30, 2020, an
increase of 6.9% from March 31, 2020, primarily the result of
servicing rights retained on $727.2 million of private label loans,
as well as $1.40 billion of new agency loan originations, net of
$693.8 million in portfolio runoff during the quarter. Servicing
revenue, net was $13.5 million for the quarter and consisted of
servicing revenue of $25.4 million, net of amortization of mortgage
servicing rights totaling $11.9 million.
|
|
Fee-Based Servicing Portfolio ($ in thousands) |
|
|
As of June 30, 2020 |
|
As of March 31, 2020 |
|
|
UPB |
Wtd. Avg. Fee |
Wtd. Avg. Life (in years) |
|
UPB |
Wtd. Avg. Fee |
Wtd. Avg. Life (in years) |
Fannie Mae |
|
$ |
15,672,931 |
|
0.505 |
% |
8.2 |
|
$ |
14,946,922 |
0.493 |
% |
8.0 |
Freddie
Mac |
|
|
4,560,382 |
|
0.295 |
% |
10.6 |
|
|
4,570,521 |
0.294 |
% |
10.6 |
FHA |
|
|
621,487 |
|
0.154 |
% |
19.6 |
|
|
679,685 |
0.152 |
% |
19.1 |
Private
Label |
|
|
727,132 |
|
0.200 |
% |
9.5 |
|
|
- |
- |
|
- |
Total |
|
$ |
21,581,932 |
|
0.441 |
% |
9.1 |
|
$ |
20,197,128 |
0.436 |
% |
8.9 |
Loans sold under the
Fannie Mae program contain an obligation to partially guarantee the
performance of the loan (“loss-sharing obligations”), and includes
$32.8 million for the fair value of the guarantee obligation
undertaken at June 30, 2020. The Company’s provision for loss
sharing associated with current expected credit losses, or “CECL,”
was $2.0 million for the second quarter of 2020. At June 30,
2020, the Company’s total CECL allowance for loss-sharing
obligations was $40.4 million, representing 0.26% of the Fannie Mae
servicing portfolio.
Structured
Business
Portfolio and Investment
Activity
- Originated 20 loans totaling $300.5 million, of which $296.0
million was funded at June 30, 2020, and consisted primarily of 17
multifamily bridge loans totaling $298.8 million
- Payoffs and pay downs on 20 loans totaling $159.2 million
- Portfolio growth of $171.6 million, or 3.6%
At June 30, 2020, the
loan and investment portfolio’s unpaid principal balance, excluding
loan loss reserves, was $4.97 billion, with a weighted average
current interest pay rate of 5.57%, compared to $4.80 billion and
5.70% at March 31, 2020. Including certain fees earned and
costs associated with the loan and investment portfolio, the
weighted average current interest pay rate was 6.10% at June 30,
2020, compared to 6.35% at March 31, 2020.
The average balance of
the Company’s loan and investment portfolio during the second
quarter of 2020, excluding loan loss reserves, was $4.81 billion
with a weighted average yield of 6.16%, compared to $4.58 billion
and 6.77% for the first quarter of 2020. The decrease in average
yield was primarily due to lower fees on loan payoffs, a decrease
in LIBOR and lower rates on originations when compared to runoff in
the second quarter as compared to the first quarter.
During the second quarter of 2020, the Company
recorded provision for loan losses of $10.6 million as a result of
its loan review process associated with CECL. At June 30, 2020, the
Company’s total allowance for loan losses was $152.8 million.
The Company had six non-performing loans with a carrying
value of $60.5 million, before related loan loss reserves of $16.6
million, compared to four loans with a carrying value of $8.3
million, before related loan loss reserves of $6.5 million as of
March 31, 2020.
The Company recorded pretax income of $20.9
million from its joint venture investment in a residential mortgage
banking business due to the historically low interest rate
environment.
Financing
Activity
The balance of debt
that finances the Company’s loan and investment portfolio at June
30, 2020 was $4.54 billion with a weighted average interest rate
including fees of 3.14% as compared to $4.70 billion and a rate of
3.68% at March 31, 2020. The average balance of debt that finances
the Company’s loan and investment portfolio for the second quarter
of 2020 was $4.53 billion, as compared to $4.25 billion for the
first quarter of 2020. The average cost of borrowings for the
second quarter of 2020 was 3.26%, compared to 4.11% for the first
quarter of 2020. The decrease in average costs was primarily due to
a decrease in LIBOR.
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 June 30, 2020 and as of the most
recent collateralized securitization vehicle determination dates in
July 2020.
Capital
Markets
The Company issued $70.8 million in aggregate
principal amount of 8.00% senior unsecured notes in two private
placements, generating net proceeds of $69.6 million after
deducting offering expenses. The notes are due in 2023 and the
proceeds were used to repay secured indebtedness, make investments
relating to its business and for general corporate purposes.
Dividends
The Company announced
today that its Board of Directors has declared a quarterly cash
dividend of $0.31 per share of common stock for the quarter ended
June 30, 2020. The dividend is payable on August 31, 2020 to common
stockholders of record on August 17, 2020. The ex-dividend date is
August 14, 2020.
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 June 1, 2020 through August 31, 2020. The dividends are
payable on August 31, 2020 to preferred stockholders of record on
August 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 9:00 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 (877) 876-9173 for domestic callers and
(785) 424-1667 for international callers. Please use participant
passcode ABRQ220 when prompted by the operator.
A telephonic replay of
the call will be available until August 7, 2020. The replay dial-in
numbers are (800) 839-5492 for domestic callers and (402) 220-2551
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, 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, 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, 2019 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 GroupAlexander
Lobo646-536-7037alobo@theruthgroup.com |
Media:Bonnie HabyanChief Marketing Officer516-506-4615
bhabyan@arbor.com |
ARBOR REALTY
TRUST, INC. AND SUBSIDIARIES |
|
Consolidated
Statements of Operations - (Unaudited) |
|
($ in
thousands—except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended June
30, |
|
Six Months Ended
June 30, |
|
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
$ |
83,080 |
|
|
$ |
82,171 |
|
|
$ |
171,606 |
|
|
$ |
153,448 |
|
|
Interest expense |
|
|
41,302 |
|
|
|
48,284 |
|
|
|
91,284 |
|
|
|
90,149 |
|
|
|
Net interest
income |
|
|
41,778 |
|
|
|
33,887 |
|
|
|
80,322 |
|
|
|
63,299 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other revenue: |
|
|
|
|
|
|
|
|
|
Gain on sales, including fee-based services, net |
|
|
26,366 |
|
|
|
14,211 |
|
|
|
40,671 |
|
|
|
30,600 |
|
|
Mortgage servicing rights |
|
|
32,417 |
|
|
|
18,709 |
|
|
|
54,351 |
|
|
|
32,941 |
|
|
Servicing revenue, net |
|
|
13,506 |
|
|
|
12,612 |
|
|
|
26,809 |
|
|
|
26,164 |
|
|
Property operating income |
|
|
751 |
|
|
|
3,147 |
|
|
|
2,943 |
|
|
|
5,950 |
|
|
(Loss) gain on derivative instruments, net |
|
|
(7,368 |
) |
|
|
742 |
|
|
|
(58,099 |
) |
|
|
(1,723 |
) |
|
Other income, net |
|
|
1,049 |
|
|
|
651 |
|
|
|
2,351 |
|
|
|
989 |
|
|
|
Total other
revenue |
|
|
66,721 |
|
|
|
50,072 |
|
|
|
69,026 |
|
|
|
94,921 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expenses: |
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
|
34,438 |
|
|
|
29,022 |
|
|
|
68,690 |
|
|
|
60,786 |
|
|
Selling and administrative |
|
|
8,606 |
|
|
|
10,481 |
|
|
|
19,658 |
|
|
|
20,242 |
|
|
Property operating expenses |
|
|
1,035 |
|
|
|
2,691 |
|
|
|
3,478 |
|
|
|
5,086 |
|
|
Depreciation and amortization |
|
|
1,961 |
|
|
|
1,909 |
|
|
|
3,908 |
|
|
|
3,821 |
|
|
Impairment loss on real estate owned |
|
|
- |
|
|
|
1,000 |
|
|
|
- |
|
|
|
1,000 |
|
|
Provision for loss sharing (net of recoveries) |
|
|
2,395 |
|
|
|
368 |
|
|
|
23,932 |
|
|
|
822 |
|
|
Provision for credit losses (net of recoveries) |
|
|
12,714 |
|
|
|
- |
|
|
|
67,096 |
|
|
|
- |
|
|
|
Total other
expenses |
|
|
61,149 |
|
|
|
45,471 |
|
|
|
186,762 |
|
|
|
91,757 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before extinguishment of debt, income from |
|
|
|
|
|
|
|
|
equity
affiliates and income taxes |
|
|
47,350 |
|
|
|
38,488 |
|
|
|
(37,414 |
) |
|
|
66,463 |
|
|
Loss on extinguishment of debt |
|
|
(1,592 |
) |
|
|
- |
|
|
|
(3,546 |
) |
|
|
(128 |
) |
|
Income from equity affiliates |
|
|
20,408 |
|
|
|
3,264 |
|
|
|
24,401 |
|
|
|
5,415 |
|
|
(Provision for) benefit from income taxes |
|
|
(12,077 |
) |
|
|
(4,350 |
) |
|
|
2,293 |
|
|
|
(4,341 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
|
54,089 |
|
|
|
37,402 |
|
|
|
(14,266 |
) |
|
|
67,409 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock dividends |
|
|
1,888 |
|
|
|
1,888 |
|
|
|
3,777 |
|
|
|
3,777 |
|
|
Net income (loss) attributable to noncontrolling interest |
|
8,110 |
|
|
|
6,598 |
|
|
|
(2,824 |
) |
|
|
12,066 |
|
|
Net income (loss) attributable to common stockholders |
|
$ |
44,091 |
|
|
$ |
28,916 |
|
|
$ |
(15,219 |
) |
|
$ |
51,566 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per common share |
|
$ |
0.40 |
|
|
$ |
0.32 |
|
|
$ |
(0.14 |
) |
|
$ |
0.59 |
|
|
Diluted earnings (loss) per common share |
|
$ |
0.40 |
|
|
$ |
0.31 |
|
|
$ |
(0.14 |
) |
|
$ |
0.57 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
110,745,572 |
|
|
|
89,955,923 |
|
|
|
110,768,992 |
|
|
|
87,567,171 |
|
|
|
Diluted |
|
|
131,882,398 |
|
|
|
113,624,384 |
|
|
|
131,166,018 |
|
|
|
110,779,680 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share |
|
$ |
0.30 |
|
|
$ |
0.28 |
|
|
$ |
0.60 |
|
|
$ |
0.55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
ARBOR REALTY
TRUST, INC. AND SUBSIDIARIES |
|
Consolidated Balance
Sheets |
|
($ in
thousands—except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
|
|
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
Assets: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
384,182 |
|
|
$ |
299,687 |
|
|
Restricted cash |
|
|
94,847 |
|
|
|
210,875 |
|
|
Loans and investments, net (allowance for credit losses of $152,811
and $71,069, respectively) |
|
|
4,800,176 |
|
|
|
4,189,960 |
|
|
Loans held-for-sale, net |
|
|
360,372 |
|
|
|
861,360 |
|
|
Capitalized mortgage servicing rights, net |
|
|
313,288 |
|
|
|
286,420 |
|
|
Securities held-to-maturity, net (allowance for credit losses of
$3,148 and $0, respectively) |
|
|
119,019 |
|
|
|
88,699 |
|
|
Investments in equity affiliates |
|
|
64,991 |
|
|
|
41,800 |
|
|
Real estate owned, net |
|
|
12,990 |
|
|
|
13,220 |
|
|
Due from related party |
|
|
8,416 |
|
|
|
10,651 |
|
|
Goodwill and other intangible assets |
|
|
108,040 |
|
|
|
110,700 |
|
|
Other assets |
|
|
123,803 |
|
|
|
125,788 |
|
|
Total assets |
|
$ |
6,390,124 |
|
|
$ |
6,239,160 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity: |
|
|
|
|
|
Credit facilities and repurchase agreements |
|
$ |
1,235,613 |
|
|
$ |
1,678,288 |
|
|
Collateralized loan obligations |
|
|
2,514,524 |
|
|
|
2,130,121 |
|
|
Debt fund |
|
|
- |
|
|
|
68,629 |
|
|
Senior unsecured notes |
|
|
661,757 |
|
|
|
319,799 |
|
|
Convertible senior unsecured notes, net |
|
|
265,244 |
|
|
|
284,152 |
|
|
Junior subordinated notes to subsidiary trust issuing preferred
securities |
|
|
141,295 |
|
|
|
140,949 |
|
|
Due to related party |
|
|
584 |
|
|
|
13,100 |
|
|
Due to borrowers |
|
|
70,132 |
|
|
|
79,148 |
|
|
Allowance for loss-sharing obligations |
|
|
73,220 |
|
|
|
34,648 |
|
|
Other liabilities |
|
|
169,979 |
|
|
|
134,299 |
|
|
Total liabilities |
|
|
5,132,348 |
|
|
|
4,883,133 |
|
|
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
Arbor Realty Trust, Inc. stockholders' equity: |
|
|
|
|
|
Preferred stock, cumulative, redeemable, $0.01 par value:
100,000,000 shares authorized; |
|
|
|
special voting preferred shares; 20,369,265 and 20,484,094 shares
issued and |
|
|
|
|
|
outstanding, respectively; 8.25% Series A, $38,788 aggregate
liquidation preference; |
|
|
|
1,551,500 shares issued and outstanding; 7.75% Series B, $31,500
aggregate |
|
|
|
|
|
liquidation preference; 1,260,000 shares issued and outstanding;
8.50% Series C, |
|
|
|
|
$22,500 aggregate liquidation preference; 900,000 shares issued and
outstanding |
|
89,500 |
|
|
|
89,501 |
|
|
Common stock, $0.01 par value: 500,000,000 shares authorized;
112,211,461 |
|
|
|
|
|
and 109,706,214 shares issued and outstanding, respectively |
|
|
1,122 |
|
|
|
1,097 |
|
|
Additional paid-in capital |
|
|
1,182,449 |
|
|
|
1,154,932 |
|
|
Accumulated deficit |
|
|
(167,165 |
) |
|
|
(60,920 |
) |
|
Total Arbor Realty Trust, Inc. stockholders’ equity |
|
|
1,105,906 |
|
|
|
1,184,610 |
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interest |
|
|
151,870 |
|
|
|
171,417 |
|
|
Total equity |
|
|
1,257,776 |
|
|
|
1,356,027 |
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
$ |
6,390,124 |
|
|
$ |
6,239,160 |
|
|
|
|
|
|
|
|
|
|
|
ARBOR REALTY
TRUST, INC. AND SUBSIDIARIES |
|
Statement of
Operations Segment Information - (Unaudited) |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended June 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Structured Business |
|
Agency Business |
|
Other / Eliminations (1) |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
Interest
income |
|
$ |
74,295 |
|
|
$ |
8,785 |
|
|
$ |
- |
|
|
$ |
83,080 |
|
|
Interest
expense |
|
|
36,739 |
|
|
|
4,563 |
|
|
|
- |
|
|
|
41,302 |
|
|
Net interest income |
|
|
37,556 |
|
|
|
4,222 |
|
|
|
- |
|
|
|
41,778 |
|
|
|
|
|
|
|
|
|
|
|
|
Other revenue: |
|
|
|
|
|
|
|
|
|
Gain on
sales, including fee-based services, net |
|
|
- |
|
|
|
26,366 |
|
|
|
- |
|
|
|
26,366 |
|
|
Mortgage
servicing rights |
|
|
- |
|
|
|
32,417 |
|
|
|
- |
|
|
|
32,417 |
|
|
Servicing
revenue |
|
|
- |
|
|
|
25,397 |
|
|
|
- |
|
|
|
25,397 |
|
|
Amortization
of MSRs |
|
|
- |
|
|
|
(11,891 |
) |
|
|
- |
|
|
|
(11,891 |
) |
|
Property
operating income |
|
|
751 |
|
|
|
- |
|
|
|
- |
|
|
|
751 |
|
|
Loss on
derivative instruments, net |
|
|
(294 |
) |
|
|
(7,074 |
) |
|
|
- |
|
|
|
(7,368 |
) |
|
Other
income, net |
|
|
990 |
|
|
|
59 |
|
|
|
- |
|
|
|
1,049 |
|
|
Total other revenue |
|
|
1,447 |
|
|
|
65,274 |
|
|
|
- |
|
|
|
66,721 |
|
|
|
|
|
|
|
|
|
|
|
|
Other expenses: |
|
|
|
|
|
|
|
|
|
Employee
compensation and benefits |
|
|
9,161 |
|
|
|
25,277 |
|
|
|
- |
|
|
|
34,438 |
|
|
Selling and
administrative |
|
|
3,533 |
|
|
|
5,073 |
|
|
|
- |
|
|
|
8,606 |
|
|
Property
operating expenses |
|
|
1,035 |
|
|
|
- |
|
|
|
- |
|
|
|
1,035 |
|
|
Depreciation
and amortization |
|
|
629 |
|
|
|
1,332 |
|
|
|
- |
|
|
|
1,961 |
|
|
Provision
for loss sharing (net of recoveries) |
|
|
- |
|
|
|
2,395 |
|
|
|
- |
|
|
|
2,395 |
|
|
Provision
for credit losses (net of recoveries) |
|
|
10,558 |
|
|
|
2,156 |
|
|
|
- |
|
|
|
12,714 |
|
|
Total other expenses |
|
|
24,916 |
|
|
|
36,233 |
|
|
|
- |
|
|
|
61,149 |
|
|
|
|
|
|
|
|
|
|
|
|
Income before extinguishment of debt, income from |
|
|
|
|
|
|
|
|
equity affiliates and income taxes |
|
|
14,087 |
|
|
|
33,263 |
|
|
|
- |
|
|
|
47,350 |
|
|
Loss on
extinguishment of debt |
|
|
(1,592 |
) |
|
|
- |
|
|
|
- |
|
|
|
(1,592 |
) |
|
Income from
equity affiliates |
|
|
20,408 |
|
|
|
- |
|
|
|
- |
|
|
|
20,408 |
|
|
Provision
for income taxes |
|
|
(164 |
) |
|
|
(11,913 |
) |
|
|
- |
|
|
|
(12,077 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
|
32,739 |
|
|
|
21,350 |
|
|
|
- |
|
|
|
54,089 |
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
stock dividends |
|
|
1,888 |
|
|
|
- |
|
|
|
- |
|
|
|
1,888 |
|
|
Net income
attributable to noncontrolling interest |
|
|
- |
|
|
|
- |
|
|
|
8,110 |
|
|
|
8,110 |
|
|
Net income
(loss) attributable to common stockholders |
|
$ |
30,851 |
|
|
$ |
21,350 |
|
|
$ |
(8,110 |
) |
|
$ |
44,091 |
|
|
|
|
|
|
|
|
|
|
|
|
(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) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2020 |
|
|
|
Structured Business |
|
Agency Business |
|
Consolidated |
|
Assets: |
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
268,467 |
|
$ |
115,715 |
|
$ |
384,182 |
|
Restricted
cash |
|
|
90,457 |
|
|
4,390 |
|
|
94,847 |
|
Loans and
investments, net |
|
|
4,800,176 |
|
|
- |
|
|
4,800,176 |
|
Loans
held-for-sale, net |
|
|
- |
|
|
360,372 |
|
|
360,372 |
|
Capitalized
mortgage servicing rights, net |
|
|
- |
|
|
313,288 |
|
|
313,288 |
|
Securities
held-to-maturity, net |
|
|
20,000 |
|
|
99,019 |
|
|
119,019 |
|
Investments
in equity affiliates |
|
|
64,991 |
|
|
- |
|
|
64,991 |
|
Goodwill and
other intangible assets |
|
|
12,500 |
|
|
95,540 |
|
|
108,040 |
|
Other
assets |
|
|
107,134 |
|
|
38,075 |
|
|
145,209 |
|
Total assets |
|
$ |
5,363,725 |
|
$ |
1,026,399 |
|
$ |
6,390,124 |
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
Debt
obligations |
|
$ |
4,484,961 |
|
$ |
333,472 |
|
$ |
4,818,433 |
|
Allowance for loss-sharing obligations |
|
- |
|
|
73,220 |
|
|
73,220 |
|
Other
liabilities |
|
|
185,378 |
|
|
55,317 |
|
|
240,695 |
|
Total liabilities |
|
$ |
4,670,339 |
|
$ |
462,009 |
|
$ |
5,132,348 |
|
|
|
|
|
|
|
|
|
ARBOR REALTY
TRUST, INC. AND SUBSIDIARIES |
|
Supplemental
Schedule of Non-GAAP Financial Measures - (Unaudited) |
|
Reconciliation of
Core Earnings to GAAP Net Income (Loss) |
|
($ in
thousands—except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
Net income
(loss) attributable to common stockholders |
$ |
44,091 |
|
|
$ |
28,916 |
|
|
$ |
(15,219 |
) |
|
$ |
51,566 |
|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
Net income (loss) attributable to noncontrolling interest |
|
8,110 |
|
|
|
6,598 |
|
|
|
(2,824 |
) |
|
|
12,066 |
|
|
Income from mortgage servicing rights |
|
(32,417 |
) |
|
|
(18,709 |
) |
|
|
(54,351 |
) |
|
|
(32,941 |
) |
|
Deferred tax provision (benefit) |
|
10,879 |
|
|
|
918 |
|
|
|
(9,025 |
) |
|
|
(3,250 |
) |
|
Amortization and write-offs of MSRs |
|
15,542 |
|
|
|
16,914 |
|
|
|
33,283 |
|
|
|
33,654 |
|
|
Depreciation and amortization |
|
2,906 |
|
|
|
2,853 |
|
|
|
5,863 |
|
|
|
5,717 |
|
|
Loss on extinguishment of debt |
|
1,592 |
|
|
|
- |
|
|
|
3,546 |
|
|
|
128 |
|
|
Provision for credit losses |
|
15,109 |
|
|
|
368 |
|
|
|
91,028 |
|
|
|
822 |
|
|
(Gain) loss on derivative instruments, net |
|
(7,371 |
) |
|
|
(742 |
) |
|
|
43,360 |
|
|
|
1,723 |
|
|
Stock-based compensation |
|
1,915 |
|
|
|
1,502 |
|
|
|
5,432 |
|
|
|
5,258 |
|
|
|
|
|
|
|
|
|
|
|
Core
earnings (1) |
$ |
60,356 |
|
|
$ |
38,618 |
|
|
$ |
101,093 |
|
|
$ |
74,743 |
|
|
|
|
|
|
|
|
|
|
|
Diluted core
earnings per share (1) |
$ |
0.46 |
|
|
$ |
0.34 |
|
|
$ |
0.77 |
|
|
$ |
0.67 |
|
|
|
|
|
|
|
|
|
|
|
Diluted
weighted average shares outstanding (1) |
|
131,882,398 |
|
|
|
113,624,384 |
|
|
|
131,166,018 |
|
|
|
110,779,680 |
|
|
|
|
|
|
|
|
|
|
|
(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. |
|
|
|
Beginning in the
first quarter of 2020, the Company is presenting core earnings as
its non-GAAP financial measure in replacement of adjusted funds
from operations ("AFFO"). Core earnings is comparable to our
previous AFFO metric, revised to exclude provisions for credit
losses (including CECL) related to our structured loan portfolio,
securities held-to-maturity and loss-sharing obligations related to
the Fannie Mae program. The Company is presenting core earnings
because management believes it is important supplemental measure of
the Company’s operating performance and is frequently used by
peers, analysts, investors and other parties in the evaluation of
REITs. Prior period amounts presented above have been conformed to
reflect this change. |
|
|
|
The Company defines
core 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 mortgage servicing rights
("MSRs"), amortization and write-offs of MSRs, gains and losses on
derivative instruments primarily associated with private label
loans that have not yet been sold and securitized, the tax impact
on cumulative gains or losses on derivative instruments associated
with private label loans that were sold during the periods
presented, changes in fair value of GSE-related derivatives that
temporarily flow through earnings, deferred tax (benefit)
provision, provisions for credit losses (including CECL) and the
amortization of the convertible senior notes conversion option. The
Company also adds back one-time charges such as acquisition costs
and one-time gains or losses on the early extinguishment of
debt. |
|
|
|
Core earnings is
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 core earnings may be
different from the calculations used by other companies and,
therefore, comparability may be limited. |
|
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