Arbor Realty Trust Reports Fourth Quarter and Full Year 2021 Results and Increases Dividend for Seventh Consecutive Quarter to $0.37 per Share
Arbor Realty Trust (NYSE: ABR) reported robust financial results for Q4 2021 and the full year, highlighting a GAAP net income of $0.71 per diluted share, up from $0.80 in Q4 2020. The company raised its cash dividend to $0.37 per share, marking the seventh consecutive quarterly increase. With record loan originations of $4.32 billion and a total annual originations of $16.13 billion, Arbor achieved a 15% increase in distributable earnings to $2.01 per diluted share for the year. They successfully raised $533 million in capital and closed significant securitizations, reflecting strong growth prospects.
- Raised cash dividend to $0.37 per share, marking the seventh consecutive increase.
- Achieved record loan originations of $4.32 billion in Q4, and $16.13 billion for the year.
- Distributable earnings grew by 15% year-over-year, reaching $2.01 per share.
- Successfully raised $533 million in accretive capital for growth initiatives.
- Generated industry-leading ROE of over 19%.
- GAAP net income decreased from $0.80 per share in Q4 2020 to $0.71 in Q4 2021.
- Slight decline in average yield to 5.03% from 5.55% in Q3 2021.
Fourth Quarter Highlights:
- Diversified, annuity-based operating platform with a multifamily focus that generates strong distributable earnings and dividends in all cycles
- GAAP net income of
$0.71 and distributable earnings of$0.57 per diluted common share1 - Raised cash dividend on common stock to
$0.37 per share, our seventh consecutive quarterly increase - Successfully raised
$533 million of accretive capital to fund the significant growth of our structured portfolio
- GAAP net income of
Structured Business:
- Record loan originations of
$4.32 billion , a75% increase over last quarter and our third consecutive quarter of record originations - Structured loan portfolio of over
$12 billion on substantial growth of33% - Closed a
$2.10 billion collateralized securitization vehicle, our largest to date
Agency Business:
- Loan originations of
$1.89 billion and a servicing portfolio of$27 billion - Closed our 3rd private label securitization totaling
$535 million
Full Year Highlights:
- GAAP net income of
$2.28 per diluted common share; distributable earnings of$2.01 per diluted common share1, representing a15% increase over last year - Raised annual dividend run rate to
$1.48 per share, a12% increase from a year ago, and our 10th straight year of dividend growth - Leading shareholder return in the commercial mortgage REIT space of
39% - Generated industry leading ROE of over
19% - Record originations of
$16.13 billion , a76% increase over last year - Structured portfolio growth of
122% from record loan originations of$9.72 billion - Agency servicing portfolio growth of
9.5% from loan originations of$6.41 billion - Raised
$1.63 billion of accretive growth capital through several equity and debt offerings - Continued success from our industry leading securitization platform closing six new securitizations (4 CLOs, 2 private label) totaling
$6.20 billion
Recent Developments:
- Closed two securitizations totaling
$2.54 billion and raised$75 million of preferred stock
UNIONDALE, N.Y., Feb. 18, 2022 (GLOBE NEWSWIRE) -- Arbor Realty Trust, Inc. (NYSE: ABR), today announced financial results for the fourth quarter and year ended December 31, 2021. Arbor reported net income for the quarter of
Agency Business
Loan Origination Platform
| Agency Loan Volume (in thousands) | ||||||||||||
| Quarter Ended | Year Ended | |||||||||||
| December 31, 2021 | September 30, 2021 | December 31, 2021 | December 31, 2020 | |||||||||
| Fannie Mae | $ | 968,105 | $ | 719,730 | $ | 3,389,312 | $ | 5,041,925 | ||||
| Freddie Mac | 437,847 | 307,664 | 1,016,142 | 960,508 | ||||||||
| Private Label | 282,038 | 625,176 | 1,436,853 | 382,191 | ||||||||
| FHA | 148,647 | 84,430 | 430,320 | 327,345 | ||||||||
| SFR-Fixed Rate | 57,709 | 67,227 | 136,931 | - | ||||||||
| Total Originations | $ | 1,894,346 | $ | 1,804,227 | $ | 6,409,558 | $ | 6,711,969 | ||||
| Total Loan Sales | $ | 2,084,211 | $ | 1,006,958 | $ | 6,415,169 | $ | 6,587,728 | ||||
| Total Loan Commitments | $ | 1,836,799 | $ | 1,856,474 | $ | 6,347,752 | $ | 6,810,666 | ||||
For the quarter ended December 31, 2021, the Agency Business generated revenues (excluding gains and losses on derivative instruments) of
At December 31, 2021, loans held-for-sale was
The Company closed its third private label securitization totaling
Fee-Based Servicing Portfolio
The Company’s fee-based servicing portfolio totaled
| Fee-Based Servicing Portfolio ($ in thousands) | |||||||||||
| As of December 31, 2021 | As of September 30, 2021 | ||||||||||
| UPB | Wtd. Avg. Fee | Wtd. Avg. Life (years) | UPB | Wtd. Avg. Fee | Wtd. Avg. Life (years) | ||||||
| Fannie Mae | $ | 19,127,397 | 8.0 | $ | 19,271,527 | 8.4 | |||||
| Freddie Mac | 4,943,905 | 9.3 | 4,726,587 | 9.8 | |||||||
| Private Label | 1,711,326 | 8.3 | 1,176,391 | 8.8 | |||||||
| FHA | 985,063 | 21.0 | 933,519 | 21.4 | |||||||
| SFR-Fixed Rate | 191,698 | 6.5 | 104,094 | 5.7 | |||||||
| Total | $ | 26,959,389 | 8.8 | $ | 26,212,118 | 9.1 | |||||
Loans sold under the Fannie Mae program contain an obligation to partially guarantee the performance of the loan (“loss-sharing obligations”) and includes
Structured Business
Portfolio and Investment Activity
Quarter ended December 31, 2021:
- Substantial growth in the portfolio of
$2.99 billion , or32.6% - Originated 156 loans totaling
$4.32 billion , consisted primarily of multifamily bridge loans totaling$4.13 billion - Payoffs and pay downs on 60 loans totaling
$1.05 billion - Committed to fund
$321.2 million single-family rental loans
Year ended December 31, 2021:
- Record portfolio growth of
$6.68 billion , or122.1% - Originated 422 loans totaling
$9.72 billion , consisted primarily of multifamily bridge loans totaling$9.10 billion - Payoffs and pay downs totaling
$2.52 billion - Committed to fund
$729.5 million single-family rental loans $34.6 million of income generated by our residential mortgage banking joint venture
At December 31, 2021, the loan and investment portfolio’s unpaid principal balance, excluding loan loss reserves, was
The average balance of the Company’s loan and investment portfolio during the fourth quarter of 2021, excluding loan loss reserves, was
During the fourth quarter of 2021, the Company recorded a
Financing Activity
The Company completed its largest collateralized securitization vehicle to date totaling
The Company completed the unwind of a previously issued CLO, redeeming
The balance of debt that finances the Company’s loan and investment portfolio at December 31, 2021 was
Capital Markets
The Company raised a substantial amount of accretive capital to fund its significant growth primarily through the following transactions:
- A public offering of 8.05 million shares of
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 - Issuance of
$180.0 million of5.00% senior unsecured notes due in 2028 in a private placement, generating net proceeds of$177.2 million - Issuance of 7.91 million shares of common stock in a public offering receiving net proceeds of
$153.9 million
Dividends
The Company announced today that its Board of Directors has declared a quarterly cash dividend of
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) 518-6930 for domestic callers and (203) 518-9797 for international callers. Please use participant passcode ABRQ421 when prompted by the operator.
A telephonic replay of the call will be available until February 25, 2022. The replay dial-in numbers are (800) 753-9146 for domestic callers and (402) 220-2705 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, 2021 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 | |||||||||||||||||
| ($ in thousands—except share and per share data) | |||||||||||||||||
| Quarter Ended December 31, | Year Ended December 31, | ||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||||
| Interest income | $ | 144,315 | $ | 86,157 | $ | 466,087 | $ | 339,465 | |||||||||
| Interest expense | 67,883 | 40,044 | 212,005 | 169,216 | |||||||||||||
| Net interest income | 76,432 | 46,113 | 254,082 | 170,249 | |||||||||||||
| Other revenue: | |||||||||||||||||
| Gain on sales, including fee-based services, net | 36,935 | 34,041 | 123,037 | 94,607 | |||||||||||||
| Mortgage servicing rights | 34,542 | 68,809 | 130,230 | 165,517 | |||||||||||||
| Servicing revenue, net | 23,875 | 14,229 | 74,814 | 54,385 | |||||||||||||
| Property operating income | 185 | - | 185 | 3,976 | |||||||||||||
| Gain (loss) on derivative instruments, net | 4,636 | 518 | (2,684 | ) | (58,335 | ) | |||||||||||
| Other income, net | 3,425 | 706 | 7,566 | 4,109 | |||||||||||||
| Total other revenue | 103,598 | 118,303 | 333,148 | 264,259 | |||||||||||||
| Other expenses: | |||||||||||||||||
| Employee compensation and benefits | 43,149 | 42,728 | 171,796 | 144,380 | |||||||||||||
| Selling and administrative | 11,868 | 8,334 | 45,575 | 37,348 | |||||||||||||
| Property operating expenses | 297 | 120 | 718 | 4,898 | |||||||||||||
| Depreciation and amortization | 1,865 | 1,810 | 7,215 | 7,640 | |||||||||||||
| Provision for loss sharing (net of recoveries) | (5,096 | ) | (6,884 | ) | (6,167 | ) | 14,822 | ||||||||||
| Provision for credit losses (net of recoveries) | (8,424 | ) | 1,600 | (21,113 | ) | 61,110 | |||||||||||
| Total other expenses | 43,659 | 47,708 | 198,024 | 270,198 | |||||||||||||
| Income before extinguishment of debt, gain (loss) on real estate, income from equity affiliates, and income taxes | |||||||||||||||||
| 136,371 | 116,708 | 389,206 | 164,310 | ||||||||||||||
| Loss on extinguishment of debt | (2,004 | ) | - | (3,374 | ) | (3,546 | ) | ||||||||||
| Gain (loss) on real estate | 2,466 | 1,493 | 3,693 | (375 | ) | ||||||||||||
| Income from equity affiliates | 2,472 | 19,402 | 34,567 | 76,161 | |||||||||||||
| Provision for income taxes | (12,929 | ) | (24,901 | ) | (46,285 | ) | (40,393 | ) | |||||||||
| Net income | 126,376 | 112,702 | 377,807 | 196,157 | |||||||||||||
| Preferred stock dividends | 8,672 | 1,888 | 21,888 | 7,554 | |||||||||||||
| Net income attributable to noncontrolling interest | 11,701 | 14,197 | 38,507 | 25,208 | |||||||||||||
| Net income attributable to common stockholders | $ | 106,003 | $ | 96,617 | $ | 317,412 | $ | 163,395 | |||||||||
| Basic earnings per common share | $ | 0.72 | $ | 0.81 | $ | 2.30 | $ | 1.44 | |||||||||
| Diluted earnings per common share | $ | 0.71 | $ | 0.80 | $ | 2.28 | $ | 1.41 | |||||||||
| Weighted average shares outstanding: | |||||||||||||||||
| Basic | 147,899,133 | 119,875,315 | 137,830,691 | 113,811,471 | |||||||||||||
| Diluted | 166,104,325 | 138,630,532 | 156,089,595 | 133,969,296 | |||||||||||||
| Dividends declared per common share | $ | 0.36 | $ | 0.32 | $ | 1.38 | $ | 1.23 | |||||||||
| ARBOR REALTY TRUST, INC. AND SUBSIDIARIES | ||||||||||
| Consolidated Balance Sheets | ||||||||||
| ($ in thousands—except share and per share data) | ||||||||||
| December 31, | December 31, | |||||||||
| 2021 | 2020 | |||||||||
| Assets: | ||||||||||
| Cash and cash equivalents | $ | 404,580 | $ | 339,528 | ||||||
| Restricted cash | 486,690 | 197,470 | ||||||||
| Loans and investments, net (allowance for credit losses of | 11,981,048 | 5,285,868 | ||||||||
| Loans held-for-sale, net | 1,093,609 | 986,919 | ||||||||
| Capitalized mortgage servicing rights, net | 422,734 | 379,974 | ||||||||
| Securities held-to-maturity, net (allowance for credit losses of | 140,484 | 95,524 | ||||||||
| Investments in equity affiliates | 89,676 | 74,274 | ||||||||
| Due from related party | 84,318 | 12,449 | ||||||||
| Goodwill and other intangible assets | 100,760 | 105,451 | ||||||||
| Other assets | 269,946 | 183,529 | ||||||||
| Total assets | $ | 15,073,845 | $ | 7,660,986 | ||||||
| Liabilities and Equity: | ||||||||||
| Credit and repurchase facilities | $ | 4,481,579 | $ | 2,234,883 | ||||||
| Collateralized loan obligations | 5,892,810 | 2,517,309 | ||||||||
| Senior unsecured notes | 1,280,545 | 662,843 | ||||||||
| Convertible senior unsecured notes, net | 259,385 | 267,973 | ||||||||
| Junior subordinated notes to subsidiary trust issuing preferred securities | 142,382 | 141,656 | ||||||||
| Due to related party | 26,570 | 2,365 | ||||||||
| Due to borrowers | 96,641 | 89,325 | ||||||||
| Allowance for loss-sharing obligations | 56,064 | 64,303 | ||||||||
| Other liabilities | 287,885 | 197,644 | ||||||||
| Total liabilities | 12,523,861 | 6,178,301 | ||||||||
| Equity: | ||||||||||
| Arbor Realty Trust, Inc. stockholders' equity: | ||||||||||
| Preferred stock, cumulative, redeemable, | ||||||||||
| authorized, shares issued and outstanding by period: | 556,163 | 89,472 | ||||||||
| Special voting preferred shares, 16,325,095 and 17,560,633 shares | ||||||||||
| Common stock, | ||||||||||
| and 123,181,173 shares issued and outstanding | 1,514 | 1,232 | ||||||||
| Additional paid-in capital | 1,797,913 | 1,317,109 | ||||||||
| Retained earnings (accumulated deficit) | 62,532 | (63,442 | ) | |||||||
| Total Arbor Realty Trust, Inc. stockholders’ equity | 2,418,122 | 1,344,371 | ||||||||
| Noncontrolling interest | 131,862 | 138,314 | ||||||||
| Total equity | 2,549,984 | 1,482,685 | ||||||||
| Total liabilities and equity | $ | 15,073,845 | $ | 7,660,986 | ||||||
| ARBOR REALTY TRUST, INC. AND SUBSIDIARIES | |||||||||||||||||
| Statement of Income Segment Information - (Unaudited) | |||||||||||||||||
| (in thousands) | |||||||||||||||||
| Quarter Ended December 31, 2021 | |||||||||||||||||
| Structured Business | Agency Business | Other / Eliminations (1) | Consolidated | ||||||||||||||
| Interest income | $ | 132,622 | $ | 11,693 | $ | - | $ | 144,315 | |||||||||
| Interest expense | 62,640 | 5,243 | - | 67,883 | |||||||||||||
| Net interest income | 69,982 | 6,450 | - | 76,432 | |||||||||||||
| Other revenue: | |||||||||||||||||
| Gain on sales, including fee-based services, net | - | 36,935 | - | 36,935 | |||||||||||||
| Mortgage servicing rights | - | 34,542 | - | 34,542 | |||||||||||||
| Servicing revenue | - | 38,747 | - | 38,747 | |||||||||||||
| Amortization of MSRs | - | (14,872 | ) | - | (14,872 | ) | |||||||||||
| Property operating income | 185 | - | - | 185 | |||||||||||||
| Gain on derivative instruments, net | - | 4,636 | - | 4,636 | |||||||||||||
| Other income, net | 3,385 | 40 | - | 3,425 | |||||||||||||
| Total other revenue | 3,570 | 100,028 | - | 103,598 | |||||||||||||
| Other expenses: | |||||||||||||||||
| Employee compensation and benefits | 13,659 | 29,490 | - | 43,149 | |||||||||||||
| Selling and administrative | 5,586 | 6,282 | - | 11,868 | |||||||||||||
| Property operating expenses | 297 | - | - | 297 | |||||||||||||
| Depreciation and amortization | 692 | 1,173 | - | 1,865 | |||||||||||||
| Provision for loss sharing (net of recoveries) | - | (5,096 | ) | - | (5,096 | ) | |||||||||||
| Provision for credit losses (net of recoveries) | (8,416 | ) | (8 | ) | - | (8,424 | ) | ||||||||||
| Total other expenses | 11,818 | 31,841 | - | 43,659 | |||||||||||||
| Income before extinguishment of debt, gain on real estate, income from equity affiliates, and income taxes | |||||||||||||||||
| 61,734 | 74,637 | - | 136,371 | ||||||||||||||
| Loss on extinguishment of debt | (2,004 | ) | - | - | (2,004 | ) | |||||||||||
| Gain on real estate | 2,466 | - | - | 2,466 | |||||||||||||
| Income from equity affiliates | 2,472 | - | - | 2,472 | |||||||||||||
| Benefit from (provision for) income taxes | 348 | (13,277 | ) | - | (12,929 | ) | |||||||||||
| Net income | 65,016 | 61,360 | - | 126,376 | |||||||||||||
| Preferred stock dividends | 8,672 | - | - | 8,672 | |||||||||||||
| Net income attributable to noncontrolling interest | - | - | 11,701 | 11,701 | |||||||||||||
| Net income attributable to common stockholders | $ | 56,344 | $ | 61,360 | $ | (11,701 | ) | $ | 106,003 | ||||||||
| (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) | ||||||||||||
| December 31, 2021 | ||||||||||||
| Structured Business | Agency Business | Consolidated | ||||||||||
| Assets: | ||||||||||||
| Cash and cash equivalents | $ | 142,771 | $ | 261,809 | $ | 404,580 | ||||||
| Restricted cash | 468,013 | 18,677 | 486,690 | |||||||||
| Loans and investments, net | 11,981,048 | - | 11,981,048 | |||||||||
| Loans held-for-sale, net | - | 1,093,609 | 1,093,609 | |||||||||
| Capitalized mortgage servicing rights, net | - | 422,734 | 422,734 | |||||||||
| Securities held-to-maturity, net | - | 140,484 | 140,484 | |||||||||
| Investments in equity affiliates | 89,676 | - | 89,676 | |||||||||
| Goodwill and other intangible assets | 12,500 | 88,260 | 100,760 | |||||||||
| Other assets | 285,600 | 68,664 | 354,264 | |||||||||
| Total assets | $ | 12,979,608 | $ | 2,094,237 | $ | 15,073,845 | ||||||
| Liabilities: | ||||||||||||
| Debt obligations | $ | 11,100,429 | $ | 956,272 | $ | 12,056,701 | ||||||
| Allowance for loss-sharing obligations | - | 56,064 | 56,064 | |||||||||
| Other liabilities | 278,726 | 132,370 | 411,096 | |||||||||
| Total liabilities | $ | 11,379,155 | $ | 1,144,706 | $ | 12,523,861 | ||||||
| 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, | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| Net income attributable to common stockholders | $ | 106,003 | $ | 96,617 | $ | 317,412 | $ | 163,395 | |||||||
| Adjustments: | |||||||||||||||
| Net income attributable to noncontrolling interest | 11,701 | 14,197 | 38,507 | 25,208 | |||||||||||
| Income from mortgage servicing rights | (34,542 | ) | (68,809 | ) | (130,230 | ) | (165,517 | ) | |||||||
| Deferred tax provision | 201 | 9,898 | 10,892 | 4,726 | |||||||||||
| Amortization and write-offs of MSRs | 29,268 | 17,241 | 91,356 | 65,979 | |||||||||||
| Depreciation and amortization | 2,763 | 2,755 | 10,900 | 11,486 | |||||||||||
| Loss on extinguishment of debt | 2,004 | - | 3,374 | 3,546 | |||||||||||
| Provision for credit losses, net | (21,646 | ) | (5,742 | ) | (39,856 | ) | 73,402 | ||||||||
| (Gain) loss on derivative instruments, net | (1,053 | ) | (518 | ) | 432 | 43,596 | |||||||||
| Gain on real estate from settlement of loan | (2,466 | ) | - | (2,466 | ) | - | |||||||||
| Stock-based compensation | 1,943 | 1,761 | 9,929 | 9,046 | |||||||||||
| Loss on redemption of preferred stock | - | - | 3,479 | - | |||||||||||
| Distributable earnings (1) | $ | 94,176 | $ | 67,400 | $ | 313,729 | $ | 234,867 | |||||||
| Diluted distributable earnings per share (1) | $ | 0.57 | $ | 0.49 | $ | 2.01 | $ | 1.75 | |||||||
| Diluted weighted average shares outstanding (1) | 166,104,325 | 138,630,532 | 156,089,595 | 133,969,296 | |||||||||||
| (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 | |||||||||||||||
| 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), amortization of the convertible senior notes conversion option 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. 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. | |||||||||||||||
FAQ
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