Arbor Realty Trust Reports Fourth Quarter and Full Year 2023 Results and Declares Dividend of $0.43 per Share
- Strong financial performance in Q4 2023 with GAAP net income of $91.7 million and distributable earnings of $104.1 million.
- Declared cash dividend of $0.43 per share for Q4 2023 and raised dividend twice in 2023.
- Robust liquidity position with around $1 billion in cash and liquidity and $600 million in CLO vehicles.
- Agency loan originations of $1.44 billion and servicing portfolio of ~$30.98 billion.
- Full-year highlights include a 5% increase in net income and a 7.5% dividend raise.
- Best-in-class total stockholder return of 28% for the year.
- Structured loan originations of $266.2 million and a portfolio of ~$12.62 billion.
- Agency servicing portfolio growth of 11% and structured portfolio reduction of 13%.
- Total loan and investment portfolio's unpaid principal balance of $12.62 billion with a weighted average current interest pay rate of 8.42%.
- Total allowance for loan losses was $195.7 million with sixteen non-performing loans at December 31, 2023.
- Balance of debt financing the loan and investment portfolio was $11.57 billion with a weighted average interest rate of 7.45%.
- Quarterly cash dividend of $0.43 per share declared for Q4 2023.
- None.
Insights
The reported GAAP net income and distributable earnings reflect Arbor Realty Trust's financial health and operational efficiency. An increase in GAAP net income for both the quarter and the full year suggests a positive trend in profitability. However, the distributable earnings, which are often a more accurate reflection of cash flow available to shareholders, show a decrease in the fourth quarter compared to the previous year, which may concern investors. The dividend raise indicates management's confidence in the company's earning potential and financial stability. The liquidity position, with approximately $1 billion in cash and liquidity, provides the company with strategic flexibility to navigate market conditions or invest in growth opportunities.
Arbor's agency loan originations demonstrate the company's active role in the housing finance market, particularly through Fannie Mae and Freddie Mac. The growth in the servicing portfolio enhances recurring revenue streams, contributing to financial stability. The structured loan portfolio shows a significant runoff, which could indicate either loan repayments or sales, potentially impacting future interest income. The provision for loan losses aligns with the Current Expected Credit Loss (CECL) accounting standard, which requires companies to forecast credit losses and may affect net income. Furthermore, the increase in the weighted average cost of borrowings due to rising SOFR rates could squeeze interest margins if loan yields don't rise accordingly.
Arbor Realty Trust's performance in the multifamily and structured financing markets is a barometer for the broader real estate lending industry. The reported increase in agency servicing portfolio growth by 11% indicates a robust demand for multifamily housing finance, which aligns with broader market trends of housing shortages and urbanization. The structured portfolio reduction, however, suggests a strategic shift or a response to market conditions such as increased competition or risk aversion in certain loan segments.
Investors may view the company's best-in-class total stockholder return of 28% as an indicator of strong management and market positioning. This exceptional return outpaces many competitors and could attract investor interest in the stock. However, the decrease in distributable earnings for the fourth quarter could raise questions about the sustainability of returns, especially if this trend continues.
The company's financial results should be contextualized within the broader economic environment. The increase in GAAP net income amidst a backdrop of economic uncertainty may signal strong sector-specific dynamics or effective cost management. The weighted average cost of 1.74% over SOFR for CLO vehicles is relatively low, reflecting a favorable borrowing environment, which may shift if interest rates continue to rise. The increase in the average cost of borrowings is consistent with the current trend of monetary policy tightening by the Federal Reserve. This could lead to increased financing costs for the company, potentially affecting future profitability.
Additionally, the provisioning for loan losses and the fair value of loss-sharing obligations under the Fannie Mae program are indicative of prudent risk management but also reflect the inherent risks in real estate lending. The economic outlook, including potential changes in interest rates and real estate market conditions, will be pivotal for Arbor's strategy and performance going forward.
Fourth Quarter Highlights:
- GAAP net income of
$0.48 per diluted common share - Distributable earnings1 of
$0.51 , or$0.54 per diluted common share excluding a$7.0 million realized loss on an office property that was previously reserved for - Declares cash dividend on common stock of
$0.43 per share representing an annualized dividend of$1.72 per share - Strong liquidity position with ~
$1 billion in cash and liquidity and ~$600 million of restricted cash in replenishable CLO vehicles with a weighted average cost of1.74% over SOFR2 - Agency loan originations of
$1.44 billion and a servicing portfolio of ~$30.98 billion , up3.5% - Structured loan originations of
$266.2 million , runoff of$817.4 million , and a portfolio of ~$12.62 billion
Full Year Highlights:
- GAAP net income of
$1.75 per diluted common share representing an increase of5% over last year, and distributable earnings of$2.25 per diluted common share1 - Raised dividend twice during 2023 to an annual run rate of
$1.72 per share, representing a7.5% increase over the prior year - Best-in-class total stockholder return of
28% - Agency servicing portfolio growth of
11% from loan originations of$5.11 billion , a7% increase over the prior year - Structured portfolio reduction of
13% with$3.02 billion of multifamily loan runoff,$1.69 billion of which was recaptured into new agency loan originations
UNIONDALE, N.Y., Feb. 16, 2024 (GLOBE NEWSWIRE) -- Arbor Realty Trust, Inc. (NYSE: ABR), today announced financial results for the fourth quarter ended December 31, 2023. Arbor reported net income for the quarter of
Agency Business
Loan Origination Platform
| Agency Loan Volume (in thousands) | |||||||||||||||
| Quarter Ended | Year Ended | ||||||||||||||
| December 31, 2023 | September 30, 2023 | December 31, 2023 | December 31, 2022 | ||||||||||||
| Fannie Mae | $ | 1,177,203 | $ | 721,398 | $ | 3,773,532 | $ | 2,919,566 | |||||||
| Freddie Mac | 98,370 | 339,241 | 756,827 | 1,353,001 | |||||||||||
| Private Label | 140,606 | 67,965 | 299,934 | 217,542 | |||||||||||
| FHA | 26,493 | 19,215 | 257,199 | 188,394 | |||||||||||
| SFR - Fixed Rate | — | 2,030 | 19,328 | 89,683 | |||||||||||
| Total Originations | $ | 1,442,672 | $ | 1,149,849 | $ | 5,106,820 | $ | 4,768,186 | |||||||
| Total Loan Sales | $ | 1,270,356 | $ | 1,275,420 | $ | 4,889,199 | $ | 5,438,623 | |||||||
| Total Loan Commitments | $ | 1,362,379 | $ | 1,211,347 | $ | 5,207,148 | $ | 5,146,718 | |||||||
For the quarter ended December 31, 2023, the Agency Business generated revenues of
At December 31, 2023, loans held-for-sale was
Fee-Based Servicing Portfolio
The Company’s fee-based servicing portfolio totaled
| Fee-Based Servicing Portfolio ($ in thousands) | ||||||||||||||||||||
| December 31, 2023 | September 30, 2023 | December 31, 2022 | ||||||||||||||||||
| UPB | Wtd. Avg. Fee (bps) | Wtd. Avg. Life (years) | UPB | Wtd. Avg. Fee (bps) | Wtd. Avg. Life (years) | UPB | Wtd. Avg. Fee (bps) | Wtd. Avg. Life (years) | ||||||||||||
| Fannie Mae | $ | 21,264,578 | 47.4 | 7.4 | $ | 20,463,620 | 48.3 | 7.7 | $ | 19,038,124 | 50.2 | 8.0 | ||||||||
| Freddie Mac | 5,181,933 | 24.0 | 8.5 | 5,184,888 | 24.2 | 8.5 | 5,153,207 | 25.0 | 9.0 | |||||||||||
| Private Label | 2,510,449 | 19.5 | 6.7 | 2,371,475 | 19.2 | 7.3 | 2,074,859 | 18.5 | 7.6 | |||||||||||
| FHA | 1,359,624 | 14.4 | 19.2 | 1,322,832 | 14.5 | 19.9 | 1,155,893 | 14.9 | 19.5 | |||||||||||
| Bridge | 379,425 | 10.9 | 3.2 | 305,950 | 11.2 | 3.6 | 301,182 | 12.5 | 1.7 | |||||||||||
| SFR-Fixed Rate | 287,446 | 20.1 | 5.1 | 287,942 | 20.1 | 5.8 | 274,764 | 19.8 | 6.0 | |||||||||||
| Total | $ | 30,983,455 | 39.1 | 8.0 | $ | 29,936,707 | 39.7 | 8.3 | $ | 27,998,029 | 41.1 | 8.6 | ||||||||
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
| Structured Portfolio Activity ($ in thousands) | |||||||||||||||||||||||||||||||
| Quarter Ended | Year Ended | ||||||||||||||||||||||||||||||
| December 31, 2023 | September 30, 2023 | December 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||
| UPB | % | UPB | % | UPB | % | UPB | % | ||||||||||||||||||||||||
| Bridge: | |||||||||||||||||||||||||||||||
| Multifamily | $ | 38,700 | 14 | % | $ | 92,000 | 38 | % | $ | 415,330 | 42 | % | $ | 5,468,222 | 89 | % | |||||||||||||||
| SFR | 198,629 | 75 | % | 140,379 | 59 | % | 524,060 | 54 | % | 613,819 | 10 | % | |||||||||||||||||||
| 237,329 | 89 | % | 232,379 | 97 | % | 939,390 | 96 | % | 6,082,041 | 99 | % | ||||||||||||||||||||
| Mezzanine/Preferred Equity | 28,829 | 11 | % | 7,779 | 3 | % | 43,953 | 4 | % | 69,606 | 1 | % | |||||||||||||||||||
| Total Originations | $ | 266,158 | 100 | % | $ | 240,158 | 100 | % | $ | 983,343 | 100 | % | $ | 6,151,647 | 100 | % | |||||||||||||||
| Number of Loans Originated | 58 | 42 | 150 | 318 | |||||||||||||||||||||||||||
| SFR Commitments | $ | 466,703 | $ | 429,452 | $ | 1,150,687 | $ | 1,086,833 | |||||||||||||||||||||||
| Runoff | $ | 817,394 | $ | 664,792 | $ | 3,354,055 | $ | 3,818,554 | |||||||||||||||||||||||
| Structured Portfolio ($ in thousands) | |||||||||||||||||||||||
| December 31, 2023 | September 30, 2023 | December 31, 2022 | |||||||||||||||||||||
| UPB | % | UPB | % | UPB | % | ||||||||||||||||||
| Bridge: | |||||||||||||||||||||||
| Multifamily | $ | 10,789,936 | 86 | % | $ | 11,421,819 | 87 | % | $ | 12,830,999 | 89 | % | |||||||||||
| SFR | 1,316,803 | 10 | % | 1,163,648 | 9 | % | 927,373 | 6 | % | ||||||||||||||
| Other | 166,505 | 1 | % | 205,505 | 2 | % | 337,682 | 2 | % | ||||||||||||||
| 12,273,244 | 97 | % | 12,790,972 | 98 | % | 14,096,054 | 97 | % | |||||||||||||||
| Mezzanine/Preferred Equity | 334,198 | 3 | % | 321,729 | 2 | % | 324,224 | 2 | % | ||||||||||||||
| SFR Permanent | 7,564 | <1 | % | 9,694 | <1 | % | 35,854 | <1 | % | ||||||||||||||
| Total Portfolio | $ | 12,615,006 | 100 | % | $ | 13,122,395 | 100 | % | $ | 14,456,132 | 100 | % | |||||||||||
At December 31, 2023, 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 2023, excluding loan loss reserves, was
During the fourth quarter of 2023, the Company recorded a
Financing Activity
The balance of debt that finances the Company’s loan and investment portfolio at December 31, 2023 was
The average balance of debt that finances the Company’s loan and investment portfolio for the fourth quarter of 2023 was
Dividend
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 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) 245-3047 for domestic callers and (203) 518-9765 for international callers. Please use participant passcode ABRQ423 when prompted by the operator.
A telephonic replay of the call will be available until February 23, 2024. The replay dial-in numbers are (800) 934-8221 for domestic callers and (402) 220-6990 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 February 14, 2024.
| 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, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||
| Interest income | $ | 331,060 | $ | 320,597 | $ | 1,331,219 | $ | 948,401 | |||||||
| Interest expense | 227,479 | 207,538 | 903,228 | 557,617 | |||||||||||
| Net interest income | 103,581 | 113,059 | 427,991 | 390,784 | |||||||||||
| Other revenue: | |||||||||||||||
| Gain on sales, including fee-based services, net | 16,727 | 23,290 | 72,522 | 55,816 | |||||||||||
| Mortgage servicing rights | 21,144 | 17,059 | 69,912 | 69,346 | |||||||||||
| Servicing revenue, net | 33,073 | 27,679 | 130,449 | 92,192 | |||||||||||
| Property operating income | 1,447 | 846 | 5,708 | 1,877 | |||||||||||
| Gain on derivative instruments, net | 10,345 | 16,526 | 6,763 | 26,609 | |||||||||||
| Other income (loss), net | 2,571 | (1,500 | ) | 7,667 | (17,563 | ) | |||||||||
| Total other revenue | 85,307 | 83,900 | 293,021 | 228,277 | |||||||||||
| Other expenses: | |||||||||||||||
| Employee compensation and benefits | 36,270 | 42,089 | 159,788 | 161,825 | |||||||||||
| Selling and administrative | 12,686 | 13,030 | 51,260 | 53,990 | |||||||||||
| Property operating expenses | 1,670 | 694 | 5,897 | 2,136 | |||||||||||
| Depreciation and amortization | 2,446 | 2,640 | 9,743 | 8,732 | |||||||||||
| Provision for loss sharing (net of recoveries) | 3,168 | 4,061 | 15,695 | 1,862 | |||||||||||
| Provision for credit losses (net of recoveries) | 18,399 | 11,469 | 73,446 | 21,169 | |||||||||||
| Litigation settlement | — | 7,350 | — | 7,350 | |||||||||||
| Total other expenses | 74,639 | 81,333 | 315,829 | 257,064 | |||||||||||
| Income before extinguishment of debt, income from equity affiliates, and income taxes | 114,249 | 115,626 | 405,183 | 361,997 | |||||||||||
| Loss on extinguishment of debt | — | (320 | ) | (1,561 | ) | (4,933 | ) | ||||||||
| Income (loss) from equity affiliates | 3,586 | (4,260 | ) | 24,281 | 14,247 | ||||||||||
| Provision for income taxes | (7,911 | ) | (4,318 | ) | (27,347 | ) | (17,484 | ) | |||||||
| Net income | 109,924 | 106,728 | 400,556 | 353,827 | |||||||||||
| Preferred stock dividends | 10,342 | 10,342 | 41,369 | 40,954 | |||||||||||
| Net income attributable to noncontrolling interest | 7,923 | 8,234 | 29,122 | 28,044 | |||||||||||
| Net income attributable to common stockholders | $ | 91,659 | $ | 88,152 | $ | 330,065 | $ | 284,829 | |||||||
| Basic earnings per common share | $ | 0.49 | $ | 0.51 | $ | 1.79 | $ | 1.72 | |||||||
| Diluted earnings per common share | $ | 0.48 | $ | 0.49 | $ | 1.75 | $ | 1.67 | |||||||
| Weighted average shares outstanding: | |||||||||||||||
| Basic | 188,503,682 | 174,444,084 | 184,641,642 | 165,355,167 | |||||||||||
| Diluted | 222,861,214 | 209,743,771 | 218,843,613 | 199,112,630 | |||||||||||
| Dividends declared per common share | $ | 0.43 | $ | 0.40 | $ | 1.68 | $ | 1.54 | |||||||
| ARBOR REALTY TRUST, INC. AND SUBSIDIARIES Consolidated Balance Sheets ($ in thousands—except share and per share data) | |||||||
| December 31, 2023 | December 31, 2022 | ||||||
| Assets: | |||||||
| Cash and cash equivalents | $ | 928,974 | $ | 534,357 | |||
| Restricted cash | 608,233 | 713,808 | |||||
| Loans and investments, net (allowance for credit losses of | 12,377,806 | 14,254,674 | |||||
| Loans held-for-sale, net | 551,707 | 354,070 | |||||
| Capitalized mortgage servicing rights, net | 391,254 | 401,471 | |||||
| Securities held-to-maturity, net (allowance for credit losses of | 155,279 | 156,547 | |||||
| Investments in equity affiliates | 79,303 | 79,130 | |||||
| Due from related party | 64,421 | 77,419 | |||||
| Goodwill and other intangible assets | 91,378 | 96,069 | |||||
| Other assets | 490,281 | 371,440 | |||||
| Total assets | $ | 15,738,636 | $ | 17,038,985 | |||
| Liabilities and Equity: | |||||||
| Credit and repurchase facilities | $ | 3,237,827 | $ | 3,841,814 | |||
| Securitized debt | 6,935,010 | 7,849,270 | |||||
| Senior unsecured notes | 1,333,968 | 1,385,994 | |||||
| Convertible senior unsecured notes | 283,118 | 280,356 | |||||
| Junior subordinated notes to subsidiary trust issuing preferred securities | 143,896 | 143,128 | |||||
| Due to related party | 13,799 | 12,350 | |||||
| Due to borrowers | 121,707 | 61,237 | |||||
| Allowance for loss-sharing obligations | 71,634 | 57,168 | |||||
| Other liabilities | 343,072 | 335,789 | |||||
| Total liabilities | 12,484,031 | 13,967,106 | |||||
| Equity: | |||||||
| Arbor Realty Trust, Inc. stockholders' equity: | |||||||
| Preferred stock, cumulative, redeemable, | 633,684 | 633,684 | |||||
| Special voting preferred shares - 16,293,589 shares | |||||||
| Common stock, | 1,885 | 1,782 | |||||
| Additional paid-in capital | 2,367,188 | 2,204,481 | |||||
| Retained earnings | 115,216 | 97,049 | |||||
| Total Arbor Realty Trust, Inc. stockholders’ equity | 3,117,973 | 2,936,996 | |||||
| Noncontrolling interest | 136,632 | 134,883 | |||||
| Total equity | 3,254,605 | 3,071,879 | |||||
| Total liabilities and equity | $ | 15,738,636 | $ | 17,038,985 | |||
| ARBOR REALTY TRUST, INC. AND SUBSIDIARIES Statement of Income Segment Information - (Unaudited) (in thousands) | |||||||||||||||
| Quarter Ended December 31, 2023 | |||||||||||||||
| Structured Business | Agency Business | Other(1) | Consolidated | ||||||||||||
| Interest income | $ | 317,132 | $ | 13,928 | $ | - | $ | 331,060 | |||||||
| Interest expense | 221,747 | 5,732 | - | 227,479 | |||||||||||
| Net interest income | 95,385 | 8,196 | - | 103,581 | |||||||||||
| Other revenue: | |||||||||||||||
| Gain on sales, including fee-based services, net | - | 16,727 | - | 16,727 | |||||||||||
| Mortgage servicing rights | - | 21,144 | - | 21,144 | |||||||||||
| Servicing revenue | - | 49,246 | - | 49,246 | |||||||||||
| Amortization of MSRs | - | (16,173 | ) | - | (16,173 | ) | |||||||||
| Property operating income | 1,447 | - | - | 1,447 | |||||||||||
| Gain on derivative instruments, net | - | 10,345 | - | 10,345 | |||||||||||
| Other income | 1,448 | 1,123 | - | 2,571 | |||||||||||
| Total other revenue | 2,895 | 82,412 | - | 85,307 | |||||||||||
| Other expenses: | |||||||||||||||
| Employee compensation and benefits | 11,516 | 24,754 | - | 36,270 | |||||||||||
| Selling and administrative | 5,399 | 7,287 | - | 12,686 | |||||||||||
| Property operating expenses | 1,670 | - | - | 1,670 | |||||||||||
| Depreciation and amortization | 1,273 | 1,173 | - | 2,446 | |||||||||||
| Provision for loss sharing (net of recoveries) | - | 3,168 | - | 3,168 | |||||||||||
| Provision for credit losses (net of recoveries) | 18,086 | 313 | - | 18,399 | |||||||||||
| Total other expenses | 37,944 | 36,695 | - | 74,639 | |||||||||||
| Income before income from equity affiliates and income taxes | 60,336 | 53,913 | - | 114,249 | |||||||||||
| Income from equity affiliates | 3,586 | - | - | 3,586 | |||||||||||
| Benefit from (provision for) income taxes | 497 | (8,408 | ) | - | (7,911 | ) | |||||||||
| Net income | 64,419 | 45,505 | - | 109,924 | |||||||||||
| Preferred stock dividends | 10,342 | - | - | 10,342 | |||||||||||
| Net income attributable to noncontrolling interest | - | - | 7,923 | 7,923 | |||||||||||
| Net income attributable to common stockholders | $ | 54,077 | $ | 45,505 | $ | (7,923 | ) | $ | 91,659 | ||||||
(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, 2023 | |||||||||||
| Structured Business | Agency Business | Consolidated | |||||||||
| Assets: | |||||||||||
| Cash and cash equivalents | $ | 619,487 | $ | 309,487 | $ | 928,974 | |||||
| Restricted cash | 595,342 | 12,891 | 608,233 | ||||||||
| Loans and investments, net | 12,377,806 | - | 12,377,806 | ||||||||
| Loans held-for-sale, net | - | 551,707 | 551,707 | ||||||||
| Capitalized mortgage servicing rights, net | - | 391,254 | 391,254 | ||||||||
| Securities held-to-maturity, net | - | 155,279 | 155,279 | ||||||||
| Investments in equity affiliates | 79,303 | - | 79,303 | ||||||||
| Goodwill and other intangible assets | 12,500 | 78,878 | 91,378 | ||||||||
| Other assets and due from related party | 453,073 | 101,629 | 554,702 | ||||||||
| Total assets | $ | 14,137,511 | $ | 1,601,125 | $ | 15,738,636 | |||||
| Liabilities: | |||||||||||
| Debt obligations | $ | 11,520,492 | $ | 413,327 | $ | 11,933,819 | |||||
| Allowance for loss-sharing obligations | - | 71,634 | 71,634 | ||||||||
| Other liabilities and due to related party | 369,588 | 108,990 | 478,578 | ||||||||
| Total liabilities | $ | 11,890,080 | $ | 593,951 | $ | 12,484,031 | |||||
| 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, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net income attributable to common stockholders | $ | 91,659 | $ | 88,152 | $ | 330,065 | $ | 284,829 | |||||||
| Adjustments: | |||||||||||||||
| Net income attributable to noncontrolling interest | 7,923 | 8,234 | 29,122 | 28,044 | |||||||||||
| Income from mortgage servicing rights | (21,144 | ) | (17,059 | ) | (69,912 | ) | (69,346 | ) | |||||||
| Deferred tax (benefit) provision | (719 | ) | 6,092 | (7,349 | ) | (1,741 | ) | ||||||||
| Amortization and write-offs of MSRs | 19,145 | 22,528 | 77,829 | 104,378 | |||||||||||
| Depreciation and amortization | 4,115 | 3,225 | 16,425 | 11,069 | |||||||||||
| Loss on extinguishment of debt | - | 320 | 1,561 | 4,933 | |||||||||||
| Provision for credit losses, net | 11,206 | 14,823 | 68,642 | 25,077 | |||||||||||
| (Gain) loss on derivative instruments, net | (10,880 | ) | (14,992 | ) | (8,844 | ) | 3,480 | ||||||||
| Stock-based compensation | 2,799 | 2,643 | 14,940 | 14,973 | |||||||||||
| Distributable earnings (1) | $ | 104,104 | $ | 113,966 | $ | 452,479 | $ | 405,696 | |||||||
| Diluted distributable earnings per share (1) | $ | 0.51 | $ | 0.60 | $ | 2.25 | $ | 2.23 | |||||||
| Diluted weighted average shares outstanding (1) (2) | 205,498,651 | 191,273,691 | 201,549,221 | 182,224,404 | |||||||||||
(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 December 31, 2023 and December 31, 2022, the diluted weighted average shares outstanding excluded 17,362,563 and 18,470,080 of these potentially issuable shares, respectively. For the years ended December 31, 2023 and December 31, 2022, the diluted weighted average shares outstanding excluded 17,294,392 and 16,888,226 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
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 (net of any tax impact), 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.
FAQ
What was Arbor Realty Trust's (ABR) GAAP net income per diluted common share for Q4 2023?
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