Arbor Realty Trust, Inc. (NYSE:ABR), today announced financial
results for the fourth quarter and year ended December 31, 2020.
Arbor reported net income for the quarter of $96.6 million, or
$0.80 per diluted common share, compared to net income of $35.5
million, or $0.34 per diluted common share for the quarter ended
December 31, 2019. Net income for the year was $163.4 million, or
$1.41 per diluted common share, compared to $121.1 million, or
$1.27 per diluted common share for the year ended December 31,
2019. Distributable earnings for the quarter was $67.4
million, or $0.49 per diluted common share, compared to $42.3
million, or $0.34 per diluted common share for the quarter ended
December 31, 2019. Distributable earnings for the year
was $234.9 million, or $1.75 per diluted common
share, compared to $159.2 million, or $1.37 per
diluted common share for the year ended December 31, 2019.1
“We had a tremendous fourth quarter and an
exceptional 2020 demonstrating the value of our franchise and the
strength of our diverse business model,” said Ivan Kaufman,
founder, chairman and CEO of Arbor Realty Trust. “Our outstanding
results continue to reflect the successful execution of our
business strategy and our versatile operating platform that have
once again allowed us to increase our dividend to 33 cents a share
– our third consecutive quarterly dividend increase representing
10% growth in 2020. Arbor continues to outperform in the commercial
mortgage REIT space and we are well positioned to succeed in the
current economic climate giving us confidence in our ability to
continue to generate strong earnings and dividends in the
future.”
Agency
Business
Loan
Origination Platform
Agency Loan Volume (in thousands) |
|
|
Quarter Ended |
|
Year Ended |
|
|
December 31, 2020 |
|
September 30, 2020 |
|
December 31, 2020 |
|
December 31, 2019 |
Fannie Mae |
|
$ |
2,202,092 |
|
|
$ |
1,117,679 |
|
$ |
5,041,925 |
|
$ |
3,346,272 |
Freddie
Mac |
|
|
373,063 |
|
|
|
252,014 |
|
|
960,508 |
|
|
728,317 |
FHA |
|
|
133,523 |
|
|
|
100,345 |
|
|
327,345 |
|
|
123,095 |
Private
Label |
|
|
44,884 |
|
|
|
5,840 |
|
|
382,191 |
|
|
401,216 |
CMBS/Conduit |
|
|
- |
|
|
|
- |
|
|
- |
|
|
211,325 |
Total
Originations |
|
$ |
2,753,562 |
|
|
$ |
1,475,878 |
|
$ |
6,711,969 |
|
$ |
4,810,225 |
|
|
|
|
|
|
|
|
|
Total Loan
Sales |
|
$ |
2,418,317 |
|
|
$ |
1,219,462 |
|
$ |
6,587,728 |
|
$ |
4,401,112 |
|
|
|
|
|
|
|
|
|
Total Loan Commitments |
$ |
2,808,173 |
|
|
$ |
1,528,551 |
|
$ |
6,810,666 |
|
$ |
4,829,721 |
|
|
|
|
|
|
|
|
|
For the quarter ended December 31, 2020, the Agency Business
generated revenues (excluding gains and losses on derivative
instruments) of $125.6 million, compared to $81.8 million for the
third quarter of 2020. Gain on sales, including fee-based services,
net was $34.0 million for the quarter, reflecting a margin of 1.41%
on loan sales, compared to $19.9 million and 1.63% for the third
quarter of 2020. Income from mortgage servicing rights was $68.8
million for the quarter, reflecting a rate of 2.45% as a percentage
of loan commitments, compared to $42.4 million and 2.77% for the
third quarter of 2020.
At December 31, 2020,
loans held-for-sale was $986.9 million which was primarily
comprised of unpaid principal balances totaling $968.6 million,
with financing associated with these loans totaling $952.0
million.
Fee-Based
Servicing Portfolio
Our fee-based
servicing portfolio totaled $24.63 billion at December 31, 2020, an
increase of 9.2% from September 30, 2020, primarily the result of
$2.75 billion of new agency loan originations, net of $641.8
million in portfolio runoff during the quarter. Servicing revenue,
net was $14.2 million for the quarter and consisted of servicing
revenue of $27.3 million, net of amortization of mortgage servicing
rights totaling $13.1 million.
|
|
Fee-Based Servicing Portfolio ($ in thousands) |
|
|
As of December 31, 2020 |
|
As of September 30, 2020 |
|
|
UPB |
Wtd. Avg. Fee |
Wtd. Avg. Life (in years) |
|
UPB |
Wtd. Avg. Fee |
Wtd. Avg. Life (in years) |
Fannie Mae |
|
$ |
18,268,268 |
|
0.523 |
% |
8.2 |
|
$ |
16,462,041 |
0.516 |
% |
8.4 |
Freddie Mac |
|
4,881,080 |
|
0.279 |
% |
9.9 |
|
|
4,687,197 |
0.288 |
% |
10.4 |
FHA |
|
|
752,116 |
|
0.163 |
% |
20.3 |
|
|
685,263 |
0.171 |
% |
20.4 |
Private Label |
|
726,992 |
|
0.200 |
% |
8.7 |
|
|
727,063 |
0.200 |
% |
9.4 |
Total |
|
$ |
24,628,456 |
|
0.454 |
% |
8.9 |
|
$ |
22,561,564 |
0.448 |
% |
9.2 |
|
|
|
|
|
|
|
|
|
Loans sold under the Fannie Mae program contain
an obligation to partially guarantee the performance of the loan
(“loss-sharing obligations”), and includes $34.0 million for the
fair value of the guarantee obligation undertaken at December 31,
2020. The Company recorded a $7.6 million reversal of provision for
loss sharing associated with current expected credit losses, or
“CECL,” for the fourth quarter of 2020. At December 31, 2020, the
Company’s total CECL allowance for loss-sharing obligations was
$30.3 million, representing 0.17% of the Fannie Mae servicing
portfolio.
Structured
Business
Portfolio and
Investment Activity
Quarter ended December 31, 2020:
- Strong growth in the portfolio of
$378.2 million, or 7.4%
- Continued significant income
generated by our residential mortgage banking joint venture
- Originated 57 loans totaling $985.2
million, consisted primarily of multifamily bridge loans totaling
$868.7 million
- Payoffs and pay downs on 32 loans
totaling $567.6 million
Year ended December 31, 2020:
- Portfolio growth of $1.20 billion,
or $27.9%
- Originated 137 loans totaling $2.43
billion, consisted primarily of multifamily bridge loans totaling
$2.12 billion
- Payoffs and pay downs totaling
$1.21 billion
The Company recorded pretax income of $19.6
million from its significant joint venture investment in a
residential mortgage banking business as a result of the continued
historically low interest rate environment. Pretax income from this
investment for the year ended December 31, 2020 totaled $75.7
million.
At December 31, 2020,
the loan and investment portfolio’s unpaid principal balance,
excluding loan loss reserves, was $5.48 billion, with a weighted
average current interest pay rate of 5.23%, compared to $5.10
billion and 5.39% at September 30, 2020. Including certain fees
earned and costs associated with the loan and investment portfolio,
the weighted average current interest pay rate was 5.80% at
December 31, 2020, compared to 5.93% at September 30, 2020.
The average balance of
the Company’s loan and investment portfolio during the fourth
quarter of 2020, excluding loan loss reserves, was $5.09 billion
with a weighted average yield of 6.04%, compared to $4.98 billion
and 5.98% for the third quarter of 2020.
During the fourth quarter of 2020, the Company
recorded additional provisions for loan losses of $1.7 million as a
result of its loan review process associated with CECL. At December
31, 2020, the Company’s total allowance for loan losses was $148.3
million. The Company had seven non-performing loans with a carrying
value of $60.3 million, before related loan loss reserves of $6.5
million, compared to eight loans with a carrying value of $62.9
million, before related loan loss reserves of $9.1 million as of
September 30, 2020.
Financing
Activity
The balance of debt
that finances the Company’s loan and investment portfolio at
December 31, 2020 was $4.92 billion with a weighted average
interest rate including fees of 3.03% as compared to $4.52 billion
and a rate of 3.09% at September 30, 2020. The average balance of
debt that finances the Company’s loan and investment portfolio for
the fourth quarter of 2020 was $4.64 billion, as compared to $4.59
billion for the third quarter of 2020. The average cost of
borrowings for the fourth quarter of 2020 was 3.05%, compared to
3.06% for the third quarter of 2020.
The Company is subject to various financial
covenants and restrictions under the terms of its collateralized
securitization vehicles, financing facilities and unsecured debt.
The Company believes it was in compliance with all financial
covenants and restrictions as of December 31, 2020 and as of the
most recent collateralized securitization vehicle determination
dates in February 2021.
Capital
Markets
The Company issued 7.0 million shares of common
stock in a public offering receiving net proceeds of $93.0 million.
The proceeds are primarily to be used to make investments and for
general corporate purposes.
Dividends
The Company announced
today that its Board of Directors has declared a quarterly cash
dividend of $0.33 per share of common stock for the quarter ended
December 31, 2020, representing a 10.0% increase from a year ago.
The dividend is payable on March 19, 2021 to common stockholders of
record on March 3, 2021. The ex-dividend date is March 2, 2021.
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, 2020
through February 28, 2021. The dividends are payable on March 1,
2021 to preferred stockholders of record on February 15, 2021. The
Company will pay total dividends of $0.515625, $0.484375 and
$0.53125 per share on the Series A, Series B and Series C preferred
stock, respectively.
Earnings
Conference Call
The Company will host
a conference call today at 10:00 a.m. Eastern Time. A live webcast
and replay of the conference call will be available at
http://www.arbor.com in the investor relations section of the
Company’s website. Those without web access should access the call
telephonically at least ten minutes prior to the conference call.
The dial-in numbers are (877) 876-9173 for domestic callers and
(785) 424-1667 for international callers. Please use participant
passcode ABRQ420 when prompted by the operator.
A telephonic replay of
the call will be available until February 26, 2021. The replay
dial-in numbers are (800) 839-6737 for domestic callers and (402)
220-6052 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, 2020 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 GroupDaniel Kontoh-Boateng/James
Salierno646-536-7019/7028dboateng@theruthgroup.comjsalierno@theruthgroup.com |
Media:Bonnie HabyanChief Marketing
Officer516-506-4615bhabyan@arbor.com |
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES |
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Income |
($ in thousands—except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended December 31, |
|
Year Ended December 31, |
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
Interest
income |
|
$ |
86,157 |
|
|
$ |
81,983 |
|
|
$ |
339,465 |
|
|
$ |
315,940 |
|
Interest
expense |
|
|
40,044 |
|
|
|
48,186 |
|
|
|
169,216 |
|
|
|
186,399 |
|
|
Net interest income |
|
|
46,113 |
|
|
|
33,797 |
|
|
|
170,249 |
|
|
|
129,541 |
|
|
|
|
|
|
|
|
|
|
|
Other
revenue: |
|
|
|
|
|
|
|
|
Gain on sales,
including fee-based services, net |
|
|
34,041 |
|
|
|
13,755 |
|
|
|
94,607 |
|
|
|
65,652 |
|
Mortgage servicing
rights |
|
|
68,809 |
|
|
|
27,909 |
|
|
|
165,517 |
|
|
|
90,761 |
|
Servicing revenue,
net |
|
|
14,229 |
|
|
|
14,587 |
|
|
|
54,385 |
|
|
|
54,542 |
|
Property operating
income |
|
|
- |
|
|
|
1,487 |
|
|
|
3,976 |
|
|
|
9,674 |
|
Gain (loss) on
derivative instruments, net |
|
|
518 |
|
|
|
4,764 |
|
|
|
(58,335 |
) |
|
|
(1,962 |
) |
Other income,
net |
|
|
706 |
|
|
|
(137 |
) |
|
|
4,109 |
|
|
|
1,178 |
|
|
Total other revenue |
|
|
118,303 |
|
|
|
62,365 |
|
|
|
264,259 |
|
|
|
219,845 |
|
|
|
|
|
|
|
|
|
|
|
Other
expenses: |
|
|
|
|
|
|
|
|
Employee
compensation and benefits |
|
|
42,728 |
|
|
|
28,456 |
|
|
|
144,380 |
|
|
|
122,102 |
|
Selling and
administrative |
|
|
8,334 |
|
|
|
9,205 |
|
|
|
37,348 |
|
|
|
40,329 |
|
Property operating
expenses |
|
|
120 |
|
|
|
2,571 |
|
|
|
4,898 |
|
|
|
10,220 |
|
Depreciation and
amortization |
|
|
1,810 |
|
|
|
1,847 |
|
|
|
7,640 |
|
|
|
7,510 |
|
Impairment loss on
real estate owned |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,000 |
|
Provision for loss
sharing (net of recoveries) |
|
|
(6,884 |
) |
|
|
(409 |
) |
|
|
14,822 |
|
|
|
1,147 |
|
Provision for
credit losses (net of recoveries) |
|
|
1,600 |
|
|
|
- |
|
|
|
61,110 |
|
|
|
- |
|
|
Total other expenses |
|
|
47,708 |
|
|
|
41,670 |
|
|
|
270,198 |
|
|
|
182,308 |
|
Income
before extinguishment of debt, sale of real estate, income from
equity affiliates, and income taxes |
|
|
|
|
|
|
|
|
|
|
116,708 |
|
|
|
54,492 |
|
|
|
164,310 |
|
|
|
167,078 |
|
|
|
|
|
|
|
|
|
|
|
Loss on
extinguishment of debt |
|
|
- |
|
|
|
(7,311 |
) |
|
|
(3,546 |
) |
|
|
(7,439 |
) |
Gain (loss) on
sale of real estate |
|
|
1,493 |
|
|
|
- |
|
|
|
(375 |
) |
|
|
- |
|
Income from equity
affiliates |
|
|
19,402 |
|
|
|
1,502 |
|
|
|
76,161 |
|
|
|
10,635 |
|
Provision for
income taxes |
|
|
(24,901 |
) |
|
|
(4,072 |
) |
|
|
(40,393 |
) |
|
|
(15,036 |
) |
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
112,702 |
|
|
|
44,611 |
|
|
|
196,157 |
|
|
|
155,238 |
|
|
|
|
|
|
|
|
|
|
|
Preferred stock
dividends |
|
|
1,888 |
|
|
|
1,888 |
|
|
|
7,554 |
|
|
|
7,554 |
|
Net income
attributable to noncontrolling interest |
|
|
14,197 |
|
|
|
7,181 |
|
|
|
25,208 |
|
|
|
26,610 |
|
Net income
attributable to common stockholders |
|
$ |
96,617 |
|
|
$ |
35,542 |
|
|
$ |
163,395 |
|
|
$ |
121,074 |
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
common share |
|
$ |
0.81 |
|
|
$ |
0.35 |
|
|
$ |
1.44 |
|
|
$ |
1.30 |
|
Diluted earnings
per common share |
|
$ |
0.80 |
|
|
$ |
0.34 |
|
|
$ |
1.41 |
|
|
$ |
1.27 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
119,875,315 |
|
|
|
101,611,818 |
|
|
|
113,811,471 |
|
|
|
92,851,327 |
|
|
Diluted |
|
|
138,630,532 |
|
|
|
125,498,359 |
|
|
|
133,969,296 |
|
|
|
116,192,951 |
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share |
|
$ |
0.32 |
|
|
$ |
0.30 |
|
|
$ |
1.23 |
|
|
$ |
1.14 |
|
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES |
|
|
|
|
|
|
|
|
|
|
Consolidated Balance Sheets |
|
($ in thousands—except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
December 31, |
|
|
|
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
339,528 |
|
|
$ |
299,687 |
|
|
Restricted
cash |
|
|
197,470 |
|
|
|
210,875 |
|
|
Loans and
investments, net (allowance for credit losses: $148,329 and
$71,069, respectively) |
|
5,285,868 |
|
|
|
4,189,960 |
|
|
Loans
held-for-sale, net |
|
|
986,919 |
|
|
|
861,360 |
|
|
Capitalized
mortgage servicing rights, net |
|
|
379,974 |
|
|
|
286,420 |
|
|
Securities
held-to-maturity, net (allowance for credit losses: $1,644 and $0,
respectively) |
|
|
95,524 |
|
|
|
88,699 |
|
|
Investments in
equity affiliates |
|
|
74,274 |
|
|
|
41,800 |
|
|
Real estate owned,
net |
|
|
1,485 |
|
|
|
13,220 |
|
|
Due from related
party |
|
|
12,449 |
|
|
|
10,651 |
|
|
Goodwill and other
intangible assets |
|
|
105,451 |
|
|
|
110,700 |
|
|
Other assets |
|
|
182,044 |
|
|
|
125,788 |
|
|
Total assets |
|
$ |
7,660,986 |
|
|
$ |
6,239,160 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity: |
|
|
|
|
|
Credit facilities
and repurchase agreements |
|
$ |
2,234,883 |
|
|
$ |
1,678,288 |
|
|
Collateralized
loan obligations |
|
|
2,517,309 |
|
|
|
2,130,121 |
|
|
Debt fund |
|
|
- |
|
|
|
68,629 |
|
|
Senior unsecured
notes |
|
|
662,843 |
|
|
|
319,799 |
|
|
Convertible senior
unsecured notes, net |
|
|
267,973 |
|
|
|
284,152 |
|
|
Junior
subordinated notes to subsidiary trust issuing preferred
securities |
|
|
141,656 |
|
|
|
140,949 |
|
|
Due to related
party |
|
|
2,365 |
|
|
|
13,100 |
|
|
Due to
borrowers |
|
|
89,325 |
|
|
|
79,148 |
|
|
Allowance for
loss-sharing obligations |
|
|
64,303 |
|
|
|
34,648 |
|
|
Other
liabilities |
|
|
197,644 |
|
|
|
134,299 |
|
|
Total liabilities |
|
|
6,178,301 |
|
|
|
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; 17,560,633 and 20,369,265 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 |
|
|
89,472 |
|
|
|
89,501 |
|
|
|
|
Common stock,
$0.01 par value: 500,000,000 shares authorized; 123,181,173 |
|
|
|
|
|
|
|
|
and 109,706,214 shares issued
and outstanding, respectively |
|
|
1,232 |
|
|
|
1,097 |
|
|
|
|
Additional paid-in
capital |
|
|
1,317,109 |
|
|
|
1,154,932 |
|
|
|
|
Accumulated
deficit |
|
|
(63,442 |
) |
|
|
(60,920 |
) |
|
Total Arbor Realty
Trust, Inc. stockholders’ equity |
|
|
1,344,371 |
|
|
|
1,184,610 |
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling
interest |
|
|
138,314 |
|
|
|
171,417 |
|
|
Total equity |
|
|
1,482,685 |
|
|
|
1,356,027 |
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
and equity |
|
$ |
7,660,986 |
|
|
$ |
6,239,160 |
|
|
|
|
|
|
|
|
|
|
|
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES |
|
|
|
|
|
|
|
|
Statement of Income Segment Information - (Unaudited) |
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended December 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Structured Business |
|
Agency Business |
|
Other / Eliminations (1) |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
Interest
income |
|
$ |
77,651 |
|
|
$ |
8,506 |
|
|
$ |
- |
|
|
$ |
86,157 |
|
Interest
expense |
|
|
35,574 |
|
|
|
4,470 |
|
|
|
- |
|
|
|
40,044 |
|
|
Net interest income |
|
|
42,077 |
|
|
|
4,036 |
|
|
|
- |
|
|
|
46,113 |
|
|
|
|
|
|
|
|
|
|
|
Other
revenue: |
|
|
|
|
|
|
|
|
Gain on sales,
including fee-based services, net |
|
|
- |
|
|
|
34,041 |
|
|
|
- |
|
|
|
34,041 |
|
Mortgage servicing
rights |
|
|
- |
|
|
|
68,809 |
|
|
|
- |
|
|
|
68,809 |
|
Servicing
revenue |
|
|
- |
|
|
|
27,322 |
|
|
|
- |
|
|
|
27,322 |
|
Amortization of
MSRs |
|
|
- |
|
|
|
(13,093 |
) |
|
|
- |
|
|
|
(13,093 |
) |
Gain on derivative
instruments, net |
|
|
317 |
|
|
|
201 |
|
|
|
- |
|
|
|
518 |
|
Other income,
net |
|
|
706 |
|
|
|
- |
|
|
|
- |
|
|
|
706 |
|
|
Total other revenue |
|
|
1,023 |
|
|
|
117,280 |
|
|
|
- |
|
|
|
118,303 |
|
|
|
|
|
|
|
|
|
|
|
Other
expenses: |
|
|
|
|
|
|
|
|
Employee
compensation and benefits |
|
|
11,412 |
|
|
|
31,316 |
|
|
|
- |
|
|
|
42,728 |
|
Selling and
administrative |
|
|
3,059 |
|
|
|
5,275 |
|
|
|
- |
|
|
|
8,334 |
|
Property operating
expenses |
|
|
120 |
|
|
|
- |
|
|
|
- |
|
|
|
120 |
|
Depreciation and
amortization |
|
|
546 |
|
|
|
1,264 |
|
|
|
- |
|
|
|
1,810 |
|
Provision for loss
sharing (net of recoveries) |
|
|
- |
|
|
|
(6,884 |
) |
|
|
- |
|
|
|
(6,884 |
) |
Provision for
credit losses (net of recoveries) |
|
|
1,584 |
|
|
|
16 |
|
|
|
- |
|
|
|
1,600 |
|
|
Total other expenses |
|
|
16,721 |
|
|
|
30,987 |
|
|
|
- |
|
|
|
47,708 |
|
Income
before sale of real estate, income from equity affiliates, and
income taxes |
|
|
|
|
|
|
|
|
|
|
26,379 |
|
|
|
90,329 |
|
|
|
- |
|
|
|
116,708 |
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of
real estate |
|
|
990 |
|
|
|
503 |
|
|
|
- |
|
|
|
1,493 |
|
Income from equity
affiliates |
|
|
19,402 |
|
|
|
- |
|
|
|
- |
|
|
|
19,402 |
|
Provision for
income taxes |
|
|
(4,966 |
) |
|
|
(19,935 |
) |
|
|
- |
|
|
|
(24,901 |
) |
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
41,805 |
|
|
|
70,897 |
|
|
|
- |
|
|
|
112,702 |
|
|
|
|
|
|
|
|
|
|
|
Preferred stock
dividends |
|
|
1,888 |
|
|
|
- |
|
|
|
- |
|
|
|
1,888 |
|
Net income
attributable to noncontrolling interest |
|
|
- |
|
|
|
- |
|
|
|
14,197 |
|
|
|
14,197 |
|
Net income (loss)
attributable to common stockholders |
$ |
39,917 |
|
|
$ |
70,897 |
|
|
$ |
(14,197 |
) |
|
$ |
96,617 |
|
|
|
|
|
|
|
|
|
|
|
(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, 2020 |
|
|
|
|
|
Structured Business |
|
Agency Business |
|
Consolidated |
Assets: |
|
|
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
172,568 |
|
$ |
166,960 |
|
$ |
339,528 |
Restricted
cash |
|
|
188,226 |
|
|
9,244 |
|
|
197,470 |
Loans and
investments, net |
|
|
5,285,868 |
|
|
- |
|
|
5,285,868 |
Loans
held-for-sale, net |
|
|
- |
|
|
986,919 |
|
|
986,919 |
Capitalized
mortgage servicing rights, net |
|
- |
|
|
379,974 |
|
|
379,974 |
Securities
held-to-maturity, net |
|
|
- |
|
|
95,524 |
|
|
95,524 |
Investments in
equity affiliates |
|
|
74,274 |
|
|
- |
|
|
74,274 |
Goodwill and other
intangible assets |
|
|
12,500 |
|
|
92,951 |
|
|
105,451 |
Other assets |
|
|
142,844 |
|
|
53,134 |
|
|
195,978 |
Total assets |
|
$ |
5,876,280 |
|
$ |
1,784,706 |
|
$ |
7,660,986 |
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
Debt
obligations |
|
$ |
4,872,626 |
|
$ |
952,038 |
|
$ |
5,824,664 |
Allowance for
loss-sharing obligations |
|
|
- |
|
|
64,303 |
|
|
64,303 |
Other
liabilities |
|
|
203,554 |
|
|
85,780 |
|
|
289,334 |
Total liabilities |
|
$ |
5,076,180 |
|
$ |
1,102,121 |
|
$ |
6,178,301 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 December 31, |
|
Year Ended December 31, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
Net income attributable to common stockholders |
$ |
96,617 |
|
$ |
35,542 |
|
$ |
163,395 |
|
$ |
121,074 |
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
Net income attributable to
noncontrolling interest |
14,197 |
|
7,181 |
|
25,208 |
|
26,610 |
Income from mortgage servicing
rights |
(68,809) |
|
(27,909) |
|
(165,517) |
|
(90,761) |
Deferred tax provision |
9,898 |
|
1,176 |
|
4,726 |
|
150 |
Amortization and write-offs of
MSRs |
17,241 |
|
18,547 |
|
65,979 |
|
71,105 |
Depreciation and
amortization |
2,755 |
|
2,690 |
|
11,486 |
|
11,194 |
Loss on extinguishment of
debt |
- |
|
7,311 |
|
3,546 |
|
7,439 |
Provision for credit losses,
net |
(5,742) |
|
172 |
|
73,402 |
|
1,193 |
(Gain) loss on derivative
instruments, net |
(518) |
|
(4,372) |
|
43,596 |
|
1,687 |
Stock-based compensation |
1,761 |
|
1,941 |
|
9,046 |
|
9,515 |
|
|
|
|
|
|
|
|
Distributable earnings
(1) |
$ |
67,400 |
|
$ |
42,279 |
|
$ |
234,867 |
|
$ |
159,206 |
|
|
|
|
|
|
|
|
Diluted distributable earnings
per share (1) |
$ |
0.49 |
|
$ |
0.34 |
|
$ |
1.75 |
|
$ |
1.37 |
|
|
|
|
|
|
|
|
Diluted weighted average shares
outstanding (1) |
138,630,532 |
|
125,498,359 |
|
133,969,296 |
|
116,192,951 |
|
|
|
|
|
|
|
|
(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 fourth quarter of 2020, the Company changed the
name of its non-GAAP financial measure from core earnings to
distributable earnings. Although calculated the same way as core
earnings, the Company believes the name change to
distributable earnings better reflects what this non-GAAP financial
measure presents. |
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
(benefit) provision, CECL provisions for credit losses (adjusted
for realized losses as described below) and amortization of the
convertible senior notes conversion option. The Company also adds
back one-time charges such as acquisition costs and one-time
gains/losses on the early extinguishment of debt. |
The Company reduces distributable earnings for realized losses in
the period management determines that a loan is deemed
nonrecoverable. Loans are deemed nonrecoverable upon the earlier
of: (i) 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 (ii) 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. |
As noted above, the Company changed the name of its non-GAAP
financial measure from core earnings to distributable earnings in
the fourth quarter of 2020. Core earnings was introduced as the
Company's non-GAAP performance measure in the first quarter of 2020
as a replacement of adjusted funds from operations (“AFFO”). Core
earnings was comparable to the previous AFFO metric, revised to
exclude provisions for credit losses (including CECL) related to
the Company's structured loan portfolio, securities held-to
maturity and loss-sharing obligations related to the Fannie Mae
program. Prior period amounts presented in the table above have
been conformed to reflect these changes. |
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