• Arbor Realty Trust Reports Third Quarter 2021 Results and Increases Quarterly Dividend to $0.36 per Share

    ソース: Nasdaq GlobeNewswire / 29 10 2021 08:00:01   America/New_York

    Company Highlights:

    • Diversified, annuity-based operating platform with a multifamily focus that continues to produce strong distributable earnings and dividends in all cycles
      • GAAP net income of $0.51 and distributable earnings of $0.47 per diluted common share1
      • Raised cash dividend on common stock to $0.36 per share, our sixth consecutive quarterly increase
      • Raised 414 million of accretive growth capital:
        • $270 million from issuance of 4.50% senior unsecured notes due in 2026
        • $144 million from offering of 6.25% Series E preferred stock

    Structured Business:

    • Segment income of $48.1 million
    • Record loan originations of $2.47 billion
    • Structured loan portfolio of over $9 billion on growth of 24%
    • Closed a $1.50 billion collateralized securitization vehicle, our largest to date

    Agency Business:

    • Segment income of $33.1 million
    • Loan originations of $1.80 billion and a servicing portfolio of over $26 billion

    Recent Developments:

    • Raised an additional $201 million of accretive growth capital through the issuance of 6.25% Series F preferred stock
    • Closed our 3rd private label securitization totaling $535 million

    UNIONDALE, N.Y., Oct. 29, 2021 (GLOBE NEWSWIRE) -- Arbor Realty Trust, Inc. (NYSE: ABR), today announced financial results for the third quarter ended September 30, 2021. Arbor reported net income for the quarter of $72.8 million, or $0.51 per diluted common share, compared to net income of $82.0 million, or $0.72 per diluted common share for the quarter ended September 30, 2020. Distributable earnings for the quarter was $75.7 million, or $0.47 per diluted common share, compared to $67.1 million, or $0.50 per diluted common share for the quarter ended September 30, 2020.1

    Agency Business

    Loan Origination Platform

      Agency Loan Volume (in thousands)
      Quarter Ended
      September 30, 2021 June 30, 2021
    Fannie Mae$719,730 $637,494
    Private Label 625,176  377,184
    Freddie Mac 307,664  155,914
    FHA  84,430  130,764
    SFR-Fixed Rate 67,227  11,996
    Total Originations$1,804,227 $1,313,352
         
    Total Loan Sales$1,006,958 $1,482,110
         
    Total Loan Commitments$1,856,474 $1,194,344
         

    For the quarter ended September 30, 2021, the Agency Business generated revenues (excluding gains and losses on derivative instruments) of $79.7 million, compared to $91.2 million for the second quarter of 2021. Gain on sales, including fee-based services, net was $16.3 million for the quarter, reflecting a margin of 1.62%, compared to $19.1 million and 1.85% for the second quarter of 2021, excluding $449.9 million of private label loans securitized. Income from mortgage servicing rights was $32.5 million for the quarter, reflecting a rate of 1.75% as a percentage of loan commitments, compared to $26.3 million and 2.20% for the second quarter of 2021.  

    At September 30, 2021, loans held-for-sale was $1.27 billion which was primarily comprised of unpaid principal balances totaling $1.26 billion, with financing associated with these loans totaling $1.10 billion.

    In October 2021, the Company closed its third private label securitization totaling $535.0 million. The Company originated and sold multifamily mortgage loans to the securitization and will be the primary servicer. The Company retained subordinate certificate interests in the securitization of $47.5 million, in satisfaction of credit risk retention requirements.

    Fee-Based Servicing Portfolio

    The Company’s fee-based servicing portfolio totaled $26.21 billion at September 30, 2021 and excludes private label loans originated that were not yet securitized. Servicing revenue, net was $20.1 million for the quarter and consisted of servicing revenue of $35.0 million, net of amortization of mortgage servicing rights totaling $14.9 million.

      Fee-Based Servicing Portfolio ($ in thousands)
      As of September 30, 2021 As of June 30, 2021
      UPBWtd. Avg. FeeWtd. Avg. Life (in years) UPBWtd. Avg. FeeWtd. Avg. Life (in years)
    Fannie Mae $19,271,527 0.532%8.4 $19,191,9690.532%8.3
    Freddie Mac  4,726,587 0.281%9.8  4,708,4570.285%9.8
    Private Label  1,176,391 0.200%8.8  1,176,6270.200%9.0
    FHA  933,519 0.156%21.4  882,8990.157%21.0
    SFR-Fixed Rate 104,094 0.200%5.7  75,1030.200%5.9
    Total $26,212,118 0.457%9.1 $26,035,0550.459%9.0
             

    Loans sold under the Fannie Mae program contain an obligation to partially guarantee the performance of the loan (“loss-sharing obligations”), and includes $34.4 million for the fair value of the guarantee obligation undertaken at September 30, 2021. The Company recorded a $3.2 million reversal of provision for loss sharing associated with CECL for the third quarter of 2021. At September 30, 2021, the Company’s total CECL allowance for loss-sharing obligations was $28.4 million, representing 0.15% of the Fannie Mae servicing portfolio.

    Structured Business

    Portfolio and Investment Activity

    • Strong growth in the portfolio of $1.78 billion, or 24.1%
    • Originated 118 loans totaling $2.47 billion, consisted primarily of multifamily bridge loans totaling $2.37 billion
    • Payoffs and pay downs on 54 loans totaling $567.9 million
    • Committed to fund one $17.6 million single-family rental build-to-rent loan

    At September 30, 2021, the loan and investment portfolio’s unpaid principal balance, excluding loan loss reserves, was $9.17 billion, with a weighted average current interest pay rate of 4.56%, compared to $7.39 billion and 4.85% at June 30, 2021. Including certain fees earned and costs associated with the loan and investment portfolio, the weighted average current interest pay rate was 4.97% at September 30, 2021, compared to 5.33% at June 30, 2021.

    The average balance of the Company’s loan and investment portfolio during the third quarter of 2021, excluding loan loss reserves, was $8.18 billion with a weighted average yield of 5.55%, compared to $6.61 billion and 5.85% for the second quarter of 2021. The decrease in average yield was primarily due to lower rates on originations when compared to runoff.

    During the third quarter of 2021, the Company recorded a $4.1 million reversal of provisions for loan losses associated with CECL, which includes a $1.1 million loan loss recovery. At September 30, 2021, the Company’s total allowance for loan losses was $131.5 million. The Company had six non-performing loans with a carrying value of $55.6 million, before related loan loss reserves of $2.6 million, compared to eight loans with a carrying value of $84.0 million, before related loan loss reserves of $6.5 million as of June 30, 2021.

    Financing Activity

    The Company completed its largest collateralized securitization vehicle to date totaling $1.50 billion of real estate related assets and cash. Investment grade-rated notes totaling $1.24 billion were issued, and the Company retained subordinate interests in the issuing vehicle of $262.5 million. The facility has a two-and-a-half-year asset replenishment period and an initial weighted average interest rate of 1.31% over LIBOR, excluding fees and transaction costs.

    The balance of debt that finances the Company’s loan and investment portfolio at September 30, 2021 was $8.58 billion with a weighted average interest rate including fees of 2.64% as compared to $6.41 billion and a rate of 2.79% at June 30, 2021. The average balance of debt that finances the Company’s loan and investment portfolio for the third quarter of 2021 was $7.31 billion, as compared to $5.94 billion for the second quarter of 2021. The average cost of borrowings for the third quarter of 2021 was 2.76%, compared to 2.89% for the second quarter of 2021.

    Capital Markets

    The Company raised a significant amount of accretive growth capital primarily through the following transactions:

    The Company issued $270.0 million of 4.50% senior unsecured notes in a private placement, generating net proceeds of $265.8 million after deducting offering expenses. The notes are due in 2026 and the proceeds are being used to make investments and for general corporate purposes.

    The Company completed a public offering of 5.75 million shares of its 6.25% Series E cumulative redeemable preferred stock, including the underwriters’ exercise of their over-allotment option, generating net proceeds of $139.1 million. The Company used these proceeds to make investments relating to its business and for general corporate purposes.

    In October 2021, the Company completed a public offering of 8.05 million shares of its 6.25% Series F fixed-to-floating cumulative redeemable preferred stock, including the underwriters’ exercise of their over-allotment option, generating net proceeds of $194.8 million. The Company is using these proceeds to 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 $0.36 per share of common stock for the quarter ended September 30, 2021, the Company’s sixth consecutive quarterly increase, representing a 20% increase over that time span. The dividend is payable on November 30, 2021 to common stockholders of record on November 15, 2021. The ex-dividend date is November 12, 2021.

    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 (866) 342-8591 for domestic callers and (203) 518-9797 for international callers. Please use participant passcode ABRQ321 when prompted by the operator.

    A telephonic replay of the call will be available until November 5, 2021. The replay dial-in numbers are (800) 839-9305 for domestic callers and (402) 220-6094 for international callers.

    About Arbor Realty Trust, Inc.

    Arbor Realty Trust, Inc. (NYSE: ABR) is a nationwide real estate investment trust and direct lender, providing loan origination and servicing for multifamily, single-family rental (SFR) portfolios, and other diverse commercial real estate assets. Headquartered in New York, Arbor manages a multibillion-dollar servicing portfolio, specializing in government-sponsored enterprise products. Arbor is a leading Fannie Mae DUS® lender and Freddie Mac Optigo Seller/Servicer, and an approved FHA Multifamily Accelerated Processing (MAP) lender. Arbor’s product platform also includes bridge, CMBS, mezzanine and preferred equity loans. Rated by Standard and Poor’s and Fitch Ratings, Arbor is committed to building on its reputation for service, quality and customized solutions with an unparalleled dedication to providing our clients excellence over the entire life of a loan.

    Safe Harbor Statement

    Certain items in this press release may constitute forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Arbor can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from Arbor’s expectations include, but are not limited to, changes in economic conditions generally, and the real estate markets specifically, in particular, due to the uncertainties created by the COVID-19 pandemic, continued ability to source new investments, changes in interest rates and/or credit spreads, and other risks detailed in Arbor’s Annual Report on Form 10-K for the year ended December 31, 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 the last page of this release.

    Contact:
    Arbor Realty Trust, Inc.
    Paul Elenio, Chief Financial Officer
    516-506-4422
    pelenio@arbor.com
     


     
     
    ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
              
    Consolidated Statements of Income - (Unaudited)
    ($ in thousands—except share and per share data)
              
       Quarter Ended September 30, Nine Months Ended September 30,
        2021   2020   2021   2020 
              
    Interest income $125,480  $81,701  $321,772  $253,307 
    Interest expense  55,560   37,888   144,122   129,172 
     Net interest income  69,920   43,813   177,650   124,135 
              
    Other revenue:        
    Gain on sales, including fee-based services, net  16,334   19,895   86,102   60,566 
    Mortgage servicing rights  32,453   42,357   95,688   96,708 
    Servicing revenue, net  20,088   13,348   50,939   40,156 
    Property operating income  -   1,033   -   3,976 
    Loss on derivative instruments, net  (1,492)  (753)  (7,320)  (58,852)
    Other income, net  2,195   1,050   4,140   3,404 
     Total other revenue  69,578   76,930   229,549   145,958 
              
    Other expenses:        
    Employee compensation and benefits  41,973   32,962   128,647   101,652 
    Selling and administrative  11,757   9,356   33,707   29,013 
    Property operating expenses  149   1,300   421   4,778 
    Depreciation and amortization  1,807   1,922   5,349   5,830 
    Provision for loss sharing (net of recoveries)  (3,272)  (2,227)  (1,070)  21,706 
    Provision for credit losses (net of recoveries)  (3,799)  (7,586)  (12,689)  59,510 
     Total other expenses  48,615   35,727   154,365   222,489 
              
    Income before extinguishment of debt, sale of real estate, income from equity affiliates, and income taxes        
      90,883   85,016   252,834   47,604 
    Loss on extinguishment of debt  -   -   (1,370)  (3,546)
    (Loss) gain on sale of real estate  -   (1,868)  1,228   (1,868)
    Income from equity affiliates  5,086   32,358   32,095   56,758 
    Provision for income taxes  (9,905)  (17,785)  (33,356)  (15,493)
              
    Net income  86,064   97,721   251,431   83,455 
              
    Preferred stock dividends  4,913   1,888   13,216   5,665 
    Net income attributable to noncontrolling interest  8,347   13,836   26,806   11,012 
    Net income attributable to common stockholders $72,804  $81,997  $211,409  $66,778 
              
    Basic earnings per common share $0.51  $0.72  $1.57  $0.60 
    Diluted earnings per common share $0.51  $0.72  $1.56  $0.59 
              
    Weighted average shares outstanding:        
     Basic  142,624,300   113,766,446   134,437,663   111,775,436 
     Diluted  160,270,905   133,997,087   152,691,461   132,401,315 
              
    Dividends declared per common share $0.35  $0.31  $1.02  $0.91 
              

     



    ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
            
    Consolidated Balance Sheets
    ($ in thousands—except share and per share data)
            
         September 30, December 31,
          2021  2020 
         (Unaudited)  
    Assets:    
    Cash and cash equivalents $380,730 $339,528 
    Restricted cash  569,928  197,470 
    Loans and investments, net (allowance for credit losses of $131,534 and $148,329, respectively)  8,993,790  5,285,868 
    Loans held-for-sale, net  1,274,234  986,919 
    Capitalized mortgage servicing rights, net  417,283  379,974 
    Securities held-to-maturity, net (allowance for credit losses of $1,761 and $1,644, respectively)  112,735  95,524 
    Investments in equity affiliates  91,846  74,274 
    Due from related party  12,664  12,449 
    Goodwill and other intangible assets  101,933  105,451 
    Other assets  214,441  183,529 
    Total assets $12,169,584 $7,660,986 
            
    Liabilities and Equity:    
    Credit and repurchase facilities $3,399,711 $2,234,883 
    Collateralized loan obligations  4,715,804  2,517,309 
    Senior unsecured notes  1,102,578  662,843 
    Convertible senior unsecured notes, net  258,001  267,973 
    Junior subordinated notes to subsidiary trust issuing preferred securities  142,192  141,656 
    Due to related party  4,384  2,365 
    Due to borrowers  93,544  89,325 
    Allowance for loss-sharing obligations  62,828  64,303 
    Other liabilities  255,135  197,644 
    Total liabilities  10,034,177  6,178,301 
            
    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, respectively:    
       Special voting preferred shares, 16,325,095 and 17,560,633 shares    
       8.25% Series A, 0 and 1,551,500 shares    
       7.75% Series B, 0 and 1,260,000 shares    
       8.50% Series C, 0 and 900,000 shares    
       6.375% Series D, 9,200,000 and 0 shares    
       6.25% Series E, 5,750,000 and 0 shares  361,635  89,472 
      Common stock, $0.01 par value: 500,000,000 shares authorized, 143,007,036    
       and 123,181,173 shares issued and outstanding, respectively  1,430  1,232 
      Additional paid-in capital  1,635,134  1,317,109 
      Retained earnings (accumulated deficit)  10,674  (63,442)
    Total Arbor Realty Trust, Inc. stockholders’ equity  2,008,873  1,344,371 
            
    Noncontrolling interest  126,534  138,314 
    Total equity  2,135,407  1,482,685 
            
    Total liabilities and equity $12,169,584 $7,660,986 
            

     


    ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
            
    Statement of Income Segment Information - (Unaudited)
    (in thousands)
              
       Quarter Ended September 30, 2021
              
       Structured Business Agency Business Other / Eliminations (1) Consolidated
              
    Interest income $114,710  $10,770  $-  $125,480 
    Interest expense  50,823   4,737   -   55,560 
     Net interest income  63,887   6,033   -   69,920 
              
    Other revenue:        
    Gain on sales, including fee-based services, net  -   16,334   -   16,334 
    Mortgage servicing rights  -   32,453   -   32,453 
    Servicing revenue  -   34,960   -   34,960 
    Amortization of MSRs  -   (14,872)  -   (14,872)
    Loss on derivative instruments, net  -   (1,492)  -   (1,492)
    Other income, net  2,168   27   -   2,195 
     Total other revenue  2,168   67,410   -   69,578 
              
    Other expenses:        
    Employee compensation and benefits  14,082   27,891   -   41,973 
    Selling and administrative  5,718   6,039   -   11,757 
    Property operating expenses  149   -   -   149 
    Depreciation and amortization  634   1,173   -   1,807 
    Provision for loss sharing (net of recoveries)  -   (3,272)  -   (3,272)
    Provision for credit losses (net of recoveries)  (3,445)  (354)  -   (3,799)
     Total other expenses  17,138   31,477   -   48,615 
              
    Income before income from equity affiliates and income taxes        
      48,917   41,966   -   90,883 
              
    Income from equity affiliates  5,086   -   -   5,086 
    Provision for income taxes  (622)  (9,283)  -   (9,905)
              
    Net income  53,381   32,683   -   86,064 
              
    Preferred stock dividends  4,913   -   -   4,913 
    Net income attributable to noncontrolling interest  -   -   8,347   8,347 
    Net income attributable to common stockholders $48,468  $32,683  $(8,347) $72,804 
              
    (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)
              
         September 30, 2021
         Structured Business Agency Business Consolidated
    Assets:       
    Cash and cash equivalents $162,870 $217,860 $380,730
    Restricted cash  552,706  17,222  569,928
    Loans and investments, net  8,993,790  -  8,993,790
    Loans held-for-sale, net  -  1,274,234  1,274,234
    Capitalized mortgage servicing rights, net     -  417,283  417,283
    Securities held-to-maturity, net  -  112,735  112,735
    Investments in equity affiliates  91,846  -  91,846
    Goodwill and other intangible assets  12,500  89,433  101,933
    Other assets  136,653  90,452  227,105
    Total assets $9,950,365 $2,219,219 $12,169,584
              
    Liabilities:      
    Debt obligations $8,515,801 $1,102,485 $9,618,286
    Allowance for loss-sharing obligations -  62,828  62,828
    Other liabilities  225,088  127,975  353,063
    Total liabilities $8,740,889 $1,293,288 $10,034,177
              

     


            
    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 September 30, Nine Months Ended September 30,
      2021
       2020
       2021
       2020
     
            
    Net income attributable to common stockholders$72,804  $81,997  $211,409  $66,778 
            
    Adjustments:       
    Net income attributable to noncontrolling interest 8,347   13,836   26,806   11,012 
    Income from mortgage servicing rights (32,453)  (42,357)  (95,688)  (96,708)
    Deferred tax provision (benefit) 6,256   3,853   10,692   (5,172)
    Amortization and write-offs of MSRs 23,757   15,456   62,088   48,739 
    Depreciation and amortization 2,705   2,867   8,137   8,731 
    Loss on extinguishment of debt -   -   1,370   3,546 
    Provision for credit losses, net (9,867)  (11,137)  (18,210)  79,144 
    Loss on derivative instruments, net 1,492   753   1,484   44,113 
    Stock-based compensation 2,612   1,854   7,986   7,286 
    Loss on redemption of preferred stock -   -   3,479   - 
            
    Distributable earnings (1)$75,653  $67,122  $219,553  $167,469 
            
    Diluted distributable earnings per share (1)$0.47  $0.50  $1.44  $1.26 
            
    Diluted weighted average shares outstanding (1) 160,270,905   133,997,087   152,691,461   132,401,315 
            
    (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.
     
    The Company is presenting distributable earnings because management believes it is an important supplemental measure of the Company's operating performance and is useful to investors, analysts and other parties in the evaluation of REITs and their ability to provide dividends to stockholders. Dividends are one of the principal reasons investors invest in REITs. To maintain REIT status, REITs are required to distribute at least 90% of their REIT-taxable income. The Company considers distributable earnings in determining its quarterly dividend and believes that, over time, distributable earnings is a useful indicator of the Company's dividends per share.
     
    The Company defines distributable earnings as net income (loss) attributable to common stockholders computed in accordance with GAAP, adjusted for accounting items such as depreciation and amortization (adjusted for unconsolidated joint ventures), non-cash stock-based compensation expense, income from MSRs, amortization and write-offs of MSRs, gains/losses on derivative instruments primarily associated with Private Label loans not yet sold and securitized, the tax impact on cumulative gains/losses on derivative instruments associated with Private Label loans sold during the periods presented, changes in fair value of GSE-related derivatives that temporarily flow through earnings, deferred tax provision (benefit), CECL provisions for credit losses (adjusted for realized losses as described below) 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 and redemption of preferred stock.
     
    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.

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