Arbor Realty Trust, Inc. (NYSE: ABR), today announced financial
results for the first quarter ended March 31, 2024. Arbor
reported net income for the quarter of $57.9 million, or $0.31 per
diluted common share, compared to net income of $84.3 million, or
$0.46 per diluted common share for the quarter ended March 31,
2023. Distributable earnings for the quarter was $96.7 million, or
$0.47 per diluted common share, compared to $122.2 million, or
$0.62 per diluted common share for the quarter ended March 31,
2023.
Agency Business
Loan Origination Platform
|
|
Agency Loan Volume (in thousands) |
|
|
Quarter Ended |
|
|
March 31, 2024 |
|
December 31, 2023 |
Fannie Mae |
|
$ |
458,429 |
|
|
$ |
1,177,203 |
|
Freddie Mac |
|
|
370,102 |
|
|
|
98,370 |
|
FHA |
|
|
— |
|
|
|
26,493 |
|
Private Label |
|
|
15,410 |
|
|
|
140,606 |
|
SFR-Fixed Rate |
|
|
2,318 |
|
|
|
— |
|
Total Originations |
|
$ |
846,259 |
|
|
$ |
1,442,672 |
|
|
|
|
|
|
Total Loan Sales |
|
$ |
1,085,374 |
|
|
$ |
1,270,356 |
|
|
|
|
|
|
Total Loan Commitments |
|
$ |
934,243 |
|
|
$ |
1,362,379 |
|
|
|
|
|
|
|
|
|
|
For the quarter ended March 31, 2024, the
Agency Business generated revenues of $66.6 million, compared to
$96.3 million for the fourth quarter of 2023. Gain on sales,
including fee-based services, net was $16.7 million for the
quarter, reflecting a margin of 1.54%, compared to $16.7 million
and 1.32% for the fourth quarter of 2023. Income from mortgage
servicing rights was $10.2 million for the quarter, reflecting a
rate of 1.32% as a percentage of loan commitments (excluding $160.2
million of loan commitments not serviced for a fee), compared to
$21.1 million and 1.55% for the fourth quarter of 2023.
At March 31, 2024, loans held-for-sale was
$322.9 million, with financing associated with these loans totaling
$312.0 million.
Fee-Based Servicing
Portfolio
The Company’s fee-based servicing portfolio
totaled $31.38 billion at March 31, 2024. Servicing revenue,
net was $31.5 million for the quarter and consisted of servicing
revenue of $48.2 million, net of amortization of mortgage servicing
rights totaling $16.6 million.
|
|
Fee-Based Servicing Portfolio ($ in
thousands) |
|
|
March 31, 2024 |
|
December 31, 2023 |
|
|
UPB |
|
Wtd. Avg. Fee (bps) |
|
Wtd. Avg. Life (years) |
|
UPB |
|
Wtd. Avg. Fee (bps) |
|
Wtd. Avg. Life (years) |
Fannie Mae |
|
$ |
21,548,221 |
|
|
47.1 |
|
7.2 |
|
$ |
21,264,578 |
|
|
47.4 |
|
7.4 |
Freddie Mac |
|
|
5,301,291 |
|
|
23.4 |
|
7.7 |
|
|
5,181,933 |
|
|
24.0 |
|
8.5 |
Private Label |
|
|
2,524,013 |
|
|
18.9 |
|
6.3 |
|
|
2,510,449 |
|
|
19.5 |
|
6.7 |
FHA |
|
|
1,365,329 |
|
|
14.4 |
|
19.0 |
|
|
1,359,624 |
|
|
14.4 |
|
19.2 |
Bridge |
|
|
380,712 |
|
|
10.9 |
|
3.6 |
|
|
379,425 |
|
|
10.9 |
|
3.2 |
SFR-Fixed Rate |
|
|
265,429 |
|
|
20.1 |
|
5.0 |
|
|
287,446 |
|
|
20.1 |
|
5.1 |
Total |
|
$ |
31,384,995 |
|
|
38.8 |
|
7.7 |
|
$ |
30,983,455 |
|
|
39.1 |
|
8.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans sold under the Fannie Mae program contain
an obligation to partially guarantee the performance of the loan
(“loss-sharing obligations”) and includes $34.7 million for the
fair value of the guarantee obligation undertaken at March 31,
2024. The Company recorded a $0.3 million net provision for loss
sharing associated with CECL for the first quarter of 2024. At
March 31, 2024, the Company’s total CECL allowance for
loss-sharing obligations was $38.1 million, representing 0.18% of
the Fannie Mae servicing portfolio.
Structured Business
Portfolio and Investment
Activity
|
|
Structured Portfolio Activity ($ in
thousands) |
|
|
Quarter Ended |
|
|
March 31, 2024 |
|
December 31, 2023 |
|
|
UPB |
|
% |
|
UPB |
|
% |
Bridge: |
|
|
|
|
|
|
|
|
Multifamily |
|
$ |
39,235 |
|
|
15 |
% |
|
$ |
38,700 |
|
|
14 |
% |
SFR |
|
|
171,490 |
|
|
67 |
% |
|
|
198,629 |
|
|
75 |
% |
|
|
|
210,725 |
|
|
82 |
% |
|
|
237,329 |
|
|
89 |
% |
|
|
|
|
|
|
. |
|
|
Mezzanine/Preferred Equity |
|
|
45,129 |
|
|
18 |
% |
|
|
28,829 |
|
|
11 |
% |
Total Originations |
|
$ |
255,854 |
|
|
100 |
% |
|
$ |
266,158 |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
Number of Loans Originated |
|
|
59 |
|
|
|
|
|
58 |
|
|
|
|
|
|
|
|
|
|
|
|
SFR Commitments |
|
$ |
411,617 |
|
|
|
|
$ |
466,703 |
|
|
|
|
|
|
|
|
|
|
|
|
Loan Runoff |
|
$ |
640,018 |
|
|
|
|
$ |
817,394 |
|
|
|
|
|
Structured Portfolio ($ in thousands) |
|
|
March 31, 2024 |
|
December 31, 2023 |
|
|
UPB |
|
% |
|
UPB |
|
% |
Bridge: |
|
|
|
|
|
|
|
|
Multifamily |
|
$ |
10,254,756 |
|
|
84 |
% |
|
$ |
10,789,936 |
|
|
86 |
% |
SFR |
|
|
1,445,028 |
|
|
12 |
% |
|
|
1,316,803 |
|
|
10 |
% |
Other |
|
|
166,505 |
|
|
1 |
% |
|
|
166,505 |
|
|
1 |
% |
|
|
|
11,866,289 |
|
|
97 |
% |
|
|
12,273,244 |
|
|
97 |
% |
|
|
|
|
|
|
|
|
|
Mezzanine/Preferred Equity |
|
|
377,845 |
|
|
3 |
% |
|
|
334,198 |
|
|
3 |
% |
SFR Permanent |
|
|
5,728 |
|
|
<1 |
% |
|
|
7,564 |
|
|
<1 |
% |
Total Portfolio |
|
$ |
12,249,862 |
|
|
100 |
% |
|
$ |
12,615,006 |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, 2024, the loan and investment
portfolio’s unpaid principal balance ("UPB"), excluding loan loss
reserves, was $12.25 billion, with a weighted average current
interest pay rate of 8.07%, compared to $12.62 billion and 8.42% at
December 31, 2023. Including certain fees earned and costs
associated with the loan and investment portfolio, the weighted
average current interest pay rate was 8.81% at March 31, 2024,
compared to 8.98% at December 31, 2023.
The average balance of the Company’s loan and
investment portfolio during the first quarter of 2024, excluding
loan loss reserves, was $12.52 billion with a weighted average
yield of 9.44%, compared to $12.96 billion and 9.31% for the fourth
quarter of 2023.
During the first quarter of 2024, the Company
recorded a $17.8 million provision for loan losses associated
with CECL. At March 31, 2024, the Company’s total allowance
for loan losses was $211.9 million. The Company had twenty-one
non-performing loans with a UPB of $464.8 million, before related
loan loss reserves of $32.9 million, compared to sixteen loans with
a carrying value of $274.2 million, before loan loss reserves of
$27.1 million at December 31, 2023.
In addition, at March 31, 2024, the Company had
twelve loans with a total UPB of $489.4 million that were less than
60 days past due, compared to twenty-four loans with a total UPB of
$956.9 million at December 31, 2023. Interest income on these loans
is only being recorded to the extent cash is received.
During the first quarter of 2024, the Company
modified thirty-nine loans with a total UPB of $1.76 billion all of
which required the borrowers to invest additional capital as part
of the terms of the modification agreements. Twenty-three of these
loans with a total UPB of $1.07 billion, contained interest rates
based on pricing over SOFR ranging from 3.25% to 4.25%. Under the
loan modification terms, borrowers invested additional capital to
recapitalize their deals in exchange for temporary rate relief,
which we provided through a pay and accrual feature. At March 31,
2024, these modified loans had a weighted average pay rate of 6.95%
and a weighted average accrual rate of 1.86%. A portion of these
loans totaling $712.9 million were less than 60 days past due at
December 31, 2023, which the Company received all back interest
owed in accordance with the modified terms.
Financing Activity
The balance of debt that finances the Company’s
loan and investment portfolio at March 31, 2024 was $11.11
billion with a weighted average interest rate including fees of
7.44%, as compared to $11.57 billion and a rate of 7.45% at
December 31, 2023.
The average balance of debt that finances the
Company’s loan and investment portfolio for the first quarter of
2024 was $11.37 billion, as compared to $11.77 billion for the
fourth quarter of 2023. The average cost of borrowings for the
first quarter of 2024 was 7.50%, compared to 7.48% for the fourth
quarter of 2023.
Dividend
The Company announced today that its Board of
Directors has declared a quarterly cash dividend of $0.43 per share
of common stock for the quarter ended March 31, 2024. The
dividend is payable on May 31, 2024 to common stockholders of
record on May 17, 2024. The ex-dividend date is May 16,
2024.
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 (800) 343-5419 for domestic callers
and (203) 518-9731 for international callers. Please use
participant passcode ABRQ124 when prompted by the operator.
A telephonic replay of the call will be
available until May 10, 2024. The replay dial-in numbers are (888)
566-0903 for domestic callers and (402) 220-6935 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, 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, 2023 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.
Notes
- 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.
- Amounts reflect approximate
balances as of April 30, 2024.
Contact: |
Arbor Realty Trust, Inc.Paul Elenio, Chief Financial
Officer516-506-4422pelenio@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, |
|
|
|
2024 |
|
|
|
2023 |
|
Interest income |
|
$ |
321,292 |
|
|
$ |
327,947 |
|
Interest expense |
|
|
217,676 |
|
|
|
219,373 |
|
Net interest income |
|
|
103,616 |
|
|
|
108,574 |
|
Other revenue: |
|
|
|
|
Gain on sales, including fee-based services, net |
|
|
16,666 |
|
|
|
14,589 |
|
Mortgage servicing rights |
|
|
10,199 |
|
|
|
18,458 |
|
Servicing revenue, net |
|
|
31,526 |
|
|
|
29,565 |
|
Property operating income |
|
|
1,570 |
|
|
|
1,381 |
|
Gain (loss) on derivative instruments, net |
|
|
(5,257 |
) |
|
|
4,223 |
|
Other income, net |
|
|
2,333 |
|
|
|
4,882 |
|
Total other revenue |
|
|
57,037 |
|
|
|
73,098 |
|
Other expenses: |
|
|
|
|
Employee compensation and benefits |
|
|
47,694 |
|
|
|
42,399 |
|
Selling and administrative |
|
|
13,933 |
|
|
|
13,623 |
|
Property operating expenses |
|
|
1,678 |
|
|
|
1,383 |
|
Depreciation and amortization |
|
|
2,571 |
|
|
|
2,624 |
|
Provision for loss sharing (net of recoveries) |
|
|
273 |
|
|
|
3,177 |
|
Provision for credit losses (net of recoveries) |
|
|
19,118 |
|
|
|
22,517 |
|
Total other expenses |
|
|
85,267 |
|
|
|
85,723 |
|
Income before income from equity affiliates and income taxes |
|
|
75,386 |
|
|
|
95,949 |
|
Income from equity affiliates |
|
|
1,418 |
|
|
|
14,326 |
|
Provision for income taxes |
|
|
(3,592 |
) |
|
|
(8,029 |
) |
Net income |
|
|
73,212 |
|
|
|
102,246 |
|
Preferred stock dividends |
|
|
10,342 |
|
|
|
10,342 |
|
Net income attributable to noncontrolling interest |
|
|
4,997 |
|
|
|
7,585 |
|
Net income attributable to common stockholders |
|
$ |
57,873 |
|
|
$ |
84,319 |
|
|
|
|
|
|
Basic earnings per common share |
|
$ |
0.31 |
|
|
$ |
0.47 |
|
Diluted earnings per common share |
|
$ |
0.31 |
|
|
$ |
0.46 |
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
Basic |
|
|
188,710,390 |
|
|
|
181,116,674 |
|
Diluted |
|
|
222,926,076 |
|
|
|
214,910,974 |
|
|
|
|
|
|
Dividends declared per common share |
|
$ |
0.43 |
|
|
$ |
0.40 |
|
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES |
Consolidated Balance Sheets |
($ in thousands—except share and per share data) |
|
|
|
March 31, 2024 |
|
December 31, 2023 |
|
|
(Unaudited) |
|
|
Assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
908,049 |
|
|
$ |
928,974 |
|
Restricted cash |
|
|
546,643 |
|
|
|
608,233 |
|
Loans and investments, net (allowance credit losses of $211,942 and
$195,664) |
|
|
12,001,544 |
|
|
|
12,377,806 |
|
Loans held-for-sale, net |
|
|
322,875 |
|
|
|
551,707 |
|
Capitalized mortgage servicing rights, net |
|
|
385,520 |
|
|
|
391,254 |
|
Securities held-to-maturity, net (allowance credit losses of $7,597
and $6,256) |
|
|
155,413 |
|
|
|
155,279 |
|
Investments in equity affiliates |
|
|
90,244 |
|
|
|
79,303 |
|
Due from related party |
|
|
104,365 |
|
|
|
64,421 |
|
Goodwill and other intangible assets |
|
|
90,205 |
|
|
|
91,378 |
|
Other assets |
|
|
499,998 |
|
|
|
490,281 |
|
Total assets |
|
$ |
15,104,856 |
|
|
$ |
15,738,636 |
|
|
|
|
|
|
Liabilities and Equity: |
|
|
|
|
Credit and repurchase facilities |
|
$ |
2,913,483 |
|
|
$ |
3,237,827 |
|
Securitized debt |
|
|
6,691,958 |
|
|
|
6,935,010 |
|
Senior unsecured notes |
|
|
1,335,013 |
|
|
|
1,333,968 |
|
Convertible senior unsecured notes |
|
|
283,776 |
|
|
|
283,118 |
|
Junior subordinated notes to subsidiary trust issuing preferred
securities |
|
|
144,096 |
|
|
|
143,896 |
|
Due to related party |
|
|
14,159 |
|
|
|
13,799 |
|
Due to borrowers |
|
|
95,807 |
|
|
|
121,707 |
|
Allowance for loss-sharing obligations |
|
|
72,790 |
|
|
|
71,634 |
|
Other liabilities |
|
|
319,466 |
|
|
|
343,072 |
|
Total liabilities |
|
|
11,870,548 |
|
|
|
12,484,031 |
|
|
|
|
|
|
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: |
|
|
633,684 |
|
|
|
633,684 |
|
Special voting preferred shares – 16,293,589 shares |
|
|
|
|
6.375% Series D – 9,200,000 shares |
|
|
|
|
6.25% Series E – 5,750,000 shares |
|
|
|
|
6.25% Series F – 11,342,000 shares |
|
|
|
|
Common stock, $0.01 par value: 500,000,000 shares authorized –
189,452,116 and 188,505,264 shares issued and outstanding |
|
|
1,895 |
|
|
|
1,885 |
|
Additional paid-in capital |
|
|
2,372,336 |
|
|
|
2,367,188 |
|
Retained earnings |
|
|
91,770 |
|
|
|
115,216 |
|
Total Arbor Realty Trust, Inc. stockholders’ equity |
|
|
3,099,685 |
|
|
|
3,117,973 |
|
Noncontrolling interest |
|
|
134,623 |
|
|
|
136,632 |
|
Total equity |
|
|
3,234,308 |
|
|
|
3,254,605 |
|
Total liabilities and equity |
|
$ |
15,104,856 |
|
|
$ |
15,738,636 |
|
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES |
Statement of Income Segment Information – (Unaudited) |
(in thousands) |
|
|
|
Quarter Ended March 31,
2024 |
|
|
StructuredBusiness |
|
AgencyBusiness |
|
Other (1) |
|
Consolidated |
Interest income |
|
$ |
307,888 |
|
|
$ |
13,404 |
|
|
$ |
— |
|
|
$ |
321,292 |
|
Interest expense |
|
|
212,600 |
|
|
|
5,076 |
|
|
|
— |
|
|
|
217,676 |
|
Net interest income |
|
|
95,288 |
|
|
|
8,328 |
|
|
|
— |
|
|
|
103,616 |
|
Other revenue: |
|
|
|
|
|
|
|
|
Gain on sales, including fee-based services, net |
|
|
— |
|
|
|
16,666 |
|
|
|
— |
|
|
|
16,666 |
|
Mortgage servicing rights |
|
|
— |
|
|
|
10,199 |
|
|
|
— |
|
|
|
10,199 |
|
Servicing revenue |
|
|
— |
|
|
|
48,157 |
|
|
|
— |
|
|
|
48,157 |
|
Amortization of MSRs |
|
|
— |
|
|
|
(16,631 |
) |
|
|
— |
|
|
|
(16,631 |
) |
Property operating income |
|
|
1,570 |
|
|
|
— |
|
|
|
— |
|
|
|
1,570 |
|
Loss on derivative instruments, net |
|
|
— |
|
|
|
(5,257 |
) |
|
|
— |
|
|
|
(5,257 |
) |
Other income, net |
|
|
2,300 |
|
|
|
33 |
|
|
|
— |
|
|
|
2,333 |
|
Total other revenue |
|
|
3,870 |
|
|
|
53,167 |
|
|
|
— |
|
|
|
57,037 |
|
Other expenses: |
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
|
18,547 |
|
|
|
29,147 |
|
|
|
— |
|
|
|
47,694 |
|
Selling and administrative |
|
|
6,796 |
|
|
|
7,137 |
|
|
|
— |
|
|
|
13,933 |
|
Property operating expenses |
|
|
1,678 |
|
|
|
— |
|
|
|
— |
|
|
|
1,678 |
|
Depreciation and amortization |
|
|
1,398 |
|
|
|
1,173 |
|
|
|
— |
|
|
|
2,571 |
|
Provision for loss sharing (net of recoveries) |
|
|
— |
|
|
|
273 |
|
|
|
— |
|
|
|
273 |
|
Provision for credit losses (net of recoveries) |
|
|
17,777 |
|
|
|
1,341 |
|
|
|
— |
|
|
|
19,118 |
|
Total other expenses |
|
|
46,196 |
|
|
|
39,071 |
|
|
|
— |
|
|
|
85,267 |
|
Income before income from equity affiliates and income taxes |
|
|
52,962 |
|
|
|
22,424 |
|
|
|
— |
|
|
|
75,386 |
|
Income from equity affiliates |
|
|
1,418 |
|
|
|
— |
|
|
|
— |
|
|
|
1,418 |
|
Provision for income taxes |
|
|
(81 |
) |
|
|
(3,511 |
) |
|
|
— |
|
|
|
(3,592 |
) |
Net income |
|
|
54,299 |
|
|
|
18,913 |
|
|
|
— |
|
|
|
73,212 |
|
Preferred stock dividends |
|
|
10,342 |
|
|
|
— |
|
|
|
— |
|
|
|
10,342 |
|
Net income attributable to noncontrolling interest |
|
|
— |
|
|
|
— |
|
|
|
4,997 |
|
|
|
4,997 |
|
Net income attributable to common stockholders |
|
$ |
43,957 |
|
|
$ |
18,913 |
|
|
$ |
(4,997 |
) |
|
$ |
57,873 |
|
|
(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, 2024 |
|
|
StructuredBusiness |
|
AgencyBusiness |
|
Consolidated |
Assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
453,316 |
|
|
$ |
454,733 |
|
|
$ |
908,049 |
|
Restricted cash |
|
|
530,099 |
|
|
|
16,544 |
|
|
|
546,643 |
|
Loans and investments, net |
|
|
12,001,544 |
|
|
|
— |
|
|
|
12,001,544 |
|
Loans held-for-sale, net |
|
|
— |
|
|
|
322,875 |
|
|
|
322,875 |
|
Capitalized mortgage servicing rights, net |
|
|
— |
|
|
|
385,520 |
|
|
|
385,520 |
|
Securities held-to-maturity, net |
|
|
— |
|
|
|
155,413 |
|
|
|
155,413 |
|
Investments in equity affiliates |
|
|
90,244 |
|
|
|
— |
|
|
|
90,244 |
|
Goodwill and other intangible assets |
|
|
12,500 |
|
|
|
77,705 |
|
|
|
90,205 |
|
Other assets and due from related party |
|
|
532,385 |
|
|
|
71,978 |
|
|
|
604,363 |
|
Total assets |
|
$ |
13,620,088 |
|
|
$ |
1,484,768 |
|
|
$ |
15,104,856 |
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
Debt obligations |
|
$ |
11,056,363 |
|
|
$ |
311,963 |
|
|
$ |
11,368,326 |
|
Allowance for loss-sharing obligations |
|
|
— |
|
|
|
72,790 |
|
|
|
72,790 |
|
Other liabilities and due to related party |
|
|
343,557 |
|
|
|
85,875 |
|
|
|
429,432 |
|
Total liabilities |
|
$ |
11,399,920 |
|
|
$ |
470,628 |
|
|
$ |
11,870,548 |
|
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, |
|
|
|
2024 |
|
|
|
2023 |
|
Net income attributable to common stockholders |
|
$ |
57,873 |
|
|
$ |
84,319 |
|
|
|
|
|
|
Adjustments: |
|
|
|
|
Net income attributable to noncontrolling interest |
|
|
4,997 |
|
|
|
7,585 |
|
Income from mortgage servicing rights |
|
|
(10,199 |
) |
|
|
(18,458 |
) |
Deferred tax (benefit) provision |
|
|
(3,952 |
) |
|
|
3,164 |
|
Amortization and write-offs of MSRs |
|
|
18,418 |
|
|
|
18,723 |
|
Depreciation and amortization |
|
|
3,193 |
|
|
|
4,295 |
|
Provision for credit losses, net |
|
|
14,804 |
|
|
|
23,704 |
|
Loss (gain) on derivative instruments, net |
|
|
5,523 |
|
|
|
(7,051 |
) |
Stock-based compensation |
|
|
6,020 |
|
|
|
5,901 |
|
|
|
|
|
|
Distributable earnings (1) |
|
$ |
96,677 |
|
|
$ |
122,182 |
|
|
|
|
|
|
Diluted distributable earnings per share (1) |
|
$ |
0.47 |
|
|
$ |
0.62 |
|
|
|
|
|
|
Diluted weighted average shares outstanding (1) (2) |
|
|
205,511,529 |
|
|
|
197,680,616 |
|
|
(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) 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. For the quarters ended March 31, 2024 and
March 31, 2023, the diluted weighted average shares
outstanding excluded 17,414,547 and 17,230,358 of these potentially
issuable shares, respectively. |
|
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, 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) 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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