Arbor Realty Trust Reports Second Quarter 2024 Results and Declares Dividend of $0.43 per Share
Arbor Realty Trust (NYSE: ABR) reported Q2 2024 financial results with GAAP net income of $0.25 per diluted share and distributable earnings of $0.45 per diluted share. The company declared a cash dividend of $0.43 per share. Key highlights include:
- Strong liquidity position with ~$725 million in cash and liquidity
- Agency loan originations of $1.15 billion
- Structured loan originations of $227.2 million
- Servicing portfolio increased 3% to ~$32.28 billion
- Redeemed 5.75% senior notes at maturity for ~$90.0 million
- Repurchased $11.4 million of common stock at average price of $12.19 per share
The company's loan and investment portfolio UPB was $11.87 billion with a weighted average interest rate of 7.79%. Arbor recorded a $28.9 million provision for loan losses and had 24 non-performing loans with a UPB of $676.2 million.
Arbor Realty Trust (NYSE: ABR) ha riportato i risultati finanziari del secondo trimestre 2024, con un utile netto GAAP di $0.25 per azione diluita e entrate distribuibili di $0.45 per azione diluita. L'azienda ha dichiarato un dividendo in contante di $0.43 per azione. I punti salienti includono:
- Posizione di liquidità robusta con circa $725 milioni in contante e liquidità
- Origini di prestiti agenziali per $1.15 miliardi
- Origini di prestiti strutturati per $227.2 milioni
- Portafoglio di servizi aumentato del 3% a circa $32.28 miliardi
- Riscatto di note senior al 5.75% alla scadenza per circa $90.0 milioni
- Riacquisto di $11.4 milioni di azioni ordinarie a un prezzo medio di $12.19 per azione
Il portafoglio prestiti e investimenti dell'azienda aveva un UPB di $11.87 miliardi con un tasso d'interesse medio ponderato del 7.79%. Arbor ha registrato una riserva per perdite sui prestiti di $28.9 milioni e aveva 24 prestiti in sofferenza con un UPB di $676.2 milioni.
Arbor Realty Trust (NYSE: ABR) informó los resultados financieros del segundo trimestre de 2024, con un ingreso neto GAAP de $0.25 por acción diluida y ganancias distribuibles de $0.45 por acción diluida. La compañía declaró un dividendo en efectivo de $0.43 por acción. Los puntos destacados incluyen:
- Sólida posición de liquidez con aproximadamente $725 millones en efectivo y liquidez
- Originaciones de préstamos de agencia por $1.15 mil millones
- Originaciones de préstamos estructurados por $227.2 millones
- Cartera de servicios aumentada en un 3% a aproximadamente $32.28 mil millones
- Rescate de notas senior al 5.75% en su vencimiento por aproximadamente $90.0 millones
- Recompra de $11.4 millones de acciones comunes a un precio promedio de $12.19 por acción
El portafolio de préstamos e inversiones de la compañía tenía un UPB de $11.87 mil millones con una tasa de interés promedio ponderada del 7.79%. Arbor registró una provisión para pérdidas por préstamos de $28.9 millones y tenía 24 préstamos en mora con un UPB de $676.2 millones.
Arbor Realty Trust (NYSE: ABR)는 2024년 2분기 재무 결과를 보고했습니다. 희석 주당 GAAP 순이익은 $0.25이며 희석 주당 배당 가능 이익은 $0.45입니다. 회사는 주당 $0.43의 현금 배당금을 선언했습니다. 주요 특징은 다음과 같습니다:
- 약 $725 백만의 현금 및 유동성을 가진 강력한 유동성 포지션
- 에이전시 대출 원활화 $1.15 billion
- 구조화 대출 원활화 $227.2 million
- 서비스 포트폴리오가 3% 증가하여 약 $32.28 billion
- 만기 시 5.75%의 선순위 노드를 약 $90.0 million에 상환
- 평균 $12.19의 가격으로 $11.4 million의 일반 주식 재매입
회사의 대출 및 투자 포트폴리오의 UPB는 $11.87 billion이며, 가중 평균 이자율은 7.79%입니다. Arbor는 대출 손실에 대한 $28.9 million의 준비금을 기록하였으며, UPB가 $676.2 million인 24개의 비수익 대출이 있었습니다.
Arbor Realty Trust (NYSE: ABR) a annoncé les résultats financiers du deuxième trimestre 2024, avec un bénéfice net GAAP de 0,25 $ par action diluée et des bénéfices distribuables de 0,45 $ par action diluée. La société a déclaré un dividende en espèces de 0,43 $ par action. Les points saillants incluent :
- Position de liquidité solide avec environ 725 millions $ en espèces et liquidités
- Origination de prêts d'agence de 1,15 milliard $
- Origination de prêts structurés de 227,2 millions $
- Portefeuille de services augmenté de 3 % à environ 32,28 milliards $
- Remboursement de notes senior à 5,75 % à l'échéance d'environ 90 millions $
- Rachat de 11,4 millions $ d'actions ordinaires à un prix moyen de 12,19 $ par action
Le portefeuille de prêts et d'investissements de l'entreprise avait un UPB de 11,87 milliards $ avec un taux d'intérêt moyen pondéré de 7,79 %. Arbor a enregistré une provision pour pertes sur prêts de 28,9 millions $ et avait 24 prêts non performants avec un UPB de 676,2 millions $.
Arbor Realty Trust (NYSE: ABR) hat die Finanzzahlen des zweiten Quartals 2024 bekannt gegeben, mit GAAP Nettogewinn von $0.25 pro verwässerter Aktie und distributierbaren Einnahmen von $0.45 pro verwässerter Aktie. Das Unternehmen hat eine Bardividende von $0.43 pro Aktie erklärt. Zu den wichtigsten Highlights gehören:
- Starke Liquiditätsposition mit ca. $725 Millionen in Bargeld und Liquidität
- Agency-Darlehen in Höhe von $1.15 Billionen
- Strukturierte Darlehen in Höhe von $227.2 Millionen
- Servicing-Portfolio um 3% auf ca. $32.28 Milliarden gestiegen
- Rückzahlung von 5.75% nachrangigen Anleihen bei Fälligkeit für etwa $90.0 Millionen
- Rückkauf von $11.4 Millionen an Stammaktien zu einem durchschnittlichen Preis von $12.19 pro Aktie
Das Darlehens- und Investitionsportfolio des Unternehmens hatte ein UPB von $11.87 Milliarden mit einem gewichteten durchschnittlichen Zinssatz von 7.79%. Arbor verzeichnete eine Rückstellung für Kreditausfälle in Höhe von $28.9 Millionen und hatte 24 notleidende Kredite mit einem UPB von $676.2 Millionen.
- Strong liquidity position with ~$725 million in cash and liquidity
- Agency loan originations of $1.15 billion
- Servicing portfolio increased 3% to ~$32.28 billion
- Declared cash dividend of $0.43 per share
- Repurchased $11.4 million of common stock
- GAAP net income decreased to $0.25 per diluted share from $0.41 in Q2 2023
- Distributable earnings decreased to $0.45 per diluted share from $0.57 in Q2 2023
- Recorded $28.9 million provision for loan losses
- Non-performing loans increased to 24 with UPB of $676.2 million from 21 loans with UPB of $464.8 million in Q1 2024
- Structured loan portfolio decreased to $11.87 billion from $12.25 billion in Q1 2024
Insights
Arbor Realty Trust's Q2 2024 results present a mixed picture. While the company maintains a strong liquidity position and continues to pay a substantial dividend, there are some concerning trends to note:
- GAAP net income per share decreased to
$0.25 from$0.41 in Q2 2023, a39% drop. - Distributable earnings per share fell to
$0.45 from$0.57 in Q2 2023, a21% decline. - The structured loan portfolio saw significant runoff of
$629.6 million , outpacing new originations of$227.2 million . - Non-performing loans increased to 24 with a UPB of
$676.2 million , up from 21 loans with a UPB of$464.8 million in Q1 2024.
On the positive side, the agency business showed strength with loan originations of
The increase in non-performing loans and the
Overall, while Arbor maintains a strong market position and liquidity, the declining earnings and increasing credit concerns could pressure the stock in the near term. Investors should watch for improvements in loan performance and origination volume in coming quarters.
Arbor Realty Trust's Q2 results offer valuable insights into the current state of the commercial real estate market, particularly in the multifamily and single-family rental (SFR) sectors:
- The
82% concentration of new SFR bridge loan originations indicates a continued shift towards this asset class, likely driven by persistent housing affordability issues and changing demographic preferences. - The decrease in multifamily bridge loan originations to just
9% of new volume suggests potential saturation or increased caution in this sector, possibly due to rising interest rates and construction costs. - The significant loan modifications (
$733.3 million UPB across 28 loans) point to ongoing stress in the commercial real estate market, with borrowers seeking relief through recapitalization and rate adjustments.
The increase in non-performing loans and loans less than 60 days past due is concerning and may indicate broader challenges in the commercial real estate market. This trend could be exacerbated by the current high-interest rate environment and potential oversupply in certain markets.
The strong agency loan originations (
Looking ahead, the real estate market may face headwinds from tightening credit conditions and economic uncertainty. However, the continued demand for SFR properties and the stability of GSE-backed loans could provide opportunities for well-positioned lenders like Arbor Realty Trust.
Arbor Realty Trust's Q2 2024 results present several key considerations for investors:
- The maintained quarterly dividend of
$0.43 per share is noteworthy, especially given the challenging market conditions. This translates to an annualized yield of over10% at current stock prices, which is attractive in the current environment. - The company's proactive approach to managing troubled loans through modifications and additional borrower capital infusions demonstrates a commitment to preserving asset value. However, it also highlights the ongoing stress in the commercial real estate market.
- The strong liquidity position (
$725 million in cash and liquidity plus$215 million in CLO restricted cash) provides a buffer against potential further market deterioration and could allow Arbor to capitalize on distressed opportunities. - The repurchase of
$11.4 million of common stock at an average price of$12.19 per share indicates management's confidence in the company's valuation.
Investors should weigh the attractive dividend yield and management's proactive approach against the increasing credit risks and declining earnings. The company's diversified business model, with both agency and structured lending segments, provides some resilience, but the structured portfolio's performance will be important to watch in coming quarters.
The stock may experience volatility as the market assesses the impact of rising non-performing loans and the potential for further credit deterioration. However, for income-focused investors with a higher risk tolerance, Arbor's current valuation and dividend yield may present an interesting opportunity, albeit one that requires careful monitoring of credit trends and real estate market conditions.
Company Highlights:
- GAAP net income of
$0.25 and distributable earnings of$0.45 , per diluted common share1 - Declares cash dividend on common stock of
$0.43 per share - Strong liquidity position with ~
$725 million in cash and liquidity and ~$215 million of CLO restricted cash2 - Agency loan originations of
$1.15 billion ; a servicing portfolio of ~$32.28 billion , up3% - Structured loan originations of
$227.2 million , runoff of$629.6 million and a portfolio of ~$11.87 billion - Redeemed our
5.75% senior notes at maturity for ~$90.0 million - Repurchased
$11.4 million of common stock at an average price of$12.19 per share
UNIONDALE, N.Y., Aug. 02, 2024 (GLOBE NEWSWIRE) -- Arbor Realty Trust, Inc. (NYSE: ABR), today announced financial results for the second quarter ended June 30, 2024. Arbor reported net income for the quarter of
Agency Business
Loan Origination Platform
| Agency Loan Volume (in thousands) | ||||||
| Quarter Ended | ||||||
| June 30, 2024 | March 31, 2024 | |||||
| Fannie Mae | $ | 742,724 | $ | 458,429 | ||
| Freddie Mac | 346,821 | 370,102 | ||||
| Private Label | 34,714 | 15,410 | ||||
| SFR-Fixed Rate | 24,996 | 2,318 | ||||
| Total Originations | $ | 1,149,255 | $ | 846,259 | ||
| Total Loan Sales | $ | 1,135,287 | $ | 1,085,374 | ||
| Total Loan Commitments | $ | 1,099,713 | $ | 934,243 | ||
For the quarter ended June 30, 2024, the Agency Business generated revenues of
At June 30, 2024, loans held-for-sale was
Fee-Based Servicing Portfolio
The Company’s fee-based servicing portfolio totaled
| Fee-Based Servicing Portfolio ($ in thousands) | ||||||||||||||
| June 30, 2024 | March 31, 2024 | |||||||||||||
| UPB | Wtd. Avg. Fee (bps) | Wtd. Avg. Life (years) | UPB | Wtd. Avg. Fee (bps) | Wtd. Avg. Life (years) | |||||||||
| Fannie Mae | $ | 22,114,193 | 46.7 | 7.0 | $ | 21,548,221 | 47.1 | 7.2 | ||||||
| Freddie Mac | 5,587,178 | 22.7 | 7.4 | 5,301,291 | 23.4 | 7.7 | ||||||||
| Private Label | 2,547,308 | 18.9 | 6.0 | 2,524,013 | 18.9 | 6.3 | ||||||||
| FHA | 1,369,507 | 14.4 | 18.9 | 1,365,329 | 14.4 | 19.0 | ||||||||
| Bridge | 380,547 | 10.9 | 3.4 | 380,712 | 10.9 | 3.6 | ||||||||
| SFR-Fixed Rate | 279,962 | 20.1 | 4.9 | 265,429 | 20.1 | 5.0 | ||||||||
| Total | $ | 32,278,695 | 38.4 | 7.5 | $ | 31,384,995 | 38.8 | 7.7 | ||||||
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 | ||||||||||||
| June 30, 2024 | March 31, 2024 | |||||||||||
| UPB | % | UPB | % | |||||||||
| Bridge: | ||||||||||||
| Multifamily | $ | 19,650 | 9 | % | $ | 39,235 | 15 | % | ||||
| SFR | 185,500 | 82 | % | 171,490 | 67 | % | ||||||
| Land | 10,350 | 4 | % | — | — | % | ||||||
| 215,500 | 95 | % | 210,725 | 82 | % | |||||||
| . | ||||||||||||
| Mezzanine/Preferred Equity | 11,684 | 5 | % | 45,129 | 18 | % | ||||||
| Total Originations | $ | 227,184 | 100 | % | $ | 255,854 | 100 | % | ||||
| Number of Loans Originated | 45 | 59 | ||||||||||
| SFR Commitments | $ | 277,260 | $ | 411,617 | ||||||||
| Loan Runoff | $ | 629,641 | $ | 640,018 | ||||||||
| Structured Portfolio ($ in thousands) | ||||||||||||
| June 30, 2024 | March 31, 2024 | |||||||||||
| UPB | % | UPB | % | |||||||||
| Bridge: | ||||||||||||
| Multifamily | $ | 9,679,128 | 82 | % | $ | 10,254,756 | 84 | % | ||||
| SFR | 1,622,269 | 14 | % | 1,445,028 | 12 | % | ||||||
| Other | 176,855 | 1 | % | 166,505 | 1 | % | ||||||
| 11,478,252 | 97 | % | 11,866,289 | 97 | % | |||||||
| Mezzanine/Preferred Equity | 389,981 | 3 | % | 377,845 | 3 | % | ||||||
| SFR Permanent | 4,975 | <1 | % | 5,728 | <1 | % | ||||||
| Total Portfolio | $ | 11,873,208 | 100 | % | $ | 12,249,862 | 100 | % | ||||
At June 30, 2024, the loan and investment portfolio’s unpaid principal balance ("UPB"), excluding loan loss reserves, was
The average balance of the Company’s loan and investment portfolio during the second quarter of 2024, excluding loan loss reserves, was
During the second quarter of 2024, the Company recorded a
In addition, at June 30, 2024, the Company had fourteen loans with a total UPB of
During the second quarter of 2024, the Company modified twenty-eight loans with a total UPB of
Financing Activity
The balance of debt that finances the Company’s loan and investment portfolio at June 30, 2024 was
The average balance of debt that finances the Company’s loan and investment portfolio for the second quarter of 2024 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) 274-8461 for domestic callers and (203) 518-9843 for international callers. Please use participant passcode ABRQ224 when prompted by the operator.
A telephonic replay of the call will be available until August 9, 2024. The replay dial-in numbers are (800) 938-2487 for domestic callers and (402) 220-9026 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 July 31, 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 - (Unaudited) ($ in thousands—except share and per share data) | ||||||||||||||||
| Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Interest income | $ | 297,188 | $ | 335,737 | $ | 618,480 | $ | 663,685 | ||||||||
| Interest expense | 209,227 | 227,195 | 426,903 | 446,569 | ||||||||||||
| Net interest income | 87,961 | 108,542 | 191,577 | 217,116 | ||||||||||||
| Other revenue: | ||||||||||||||||
| Gain on sales, including fee-based services, net | 17,448 | 22,587 | 34,114 | 37,176 | ||||||||||||
| Mortgage servicing rights | 14,534 | 16,201 | 24,733 | 34,659 | ||||||||||||
| Servicing revenue, net | 29,910 | 32,347 | 61,436 | 61,913 | ||||||||||||
| Property operating income | 1,444 | 1,430 | 3,014 | 2,811 | ||||||||||||
| Loss on derivative instruments, net | (275 | ) | (7,384 | ) | (5,533 | ) | (3,161 | ) | ||||||||
| Other income, net | 2,081 | 45 | 4,414 | 4,923 | ||||||||||||
| Total other revenue | 65,142 | 65,226 | 122,178 | 138,321 | ||||||||||||
| Other expenses: | ||||||||||||||||
| Employee compensation and benefits | 42,836 | 41,310 | 90,529 | 83,708 | ||||||||||||
| Selling and administrative | 12,823 | 12,584 | 26,756 | 26,207 | ||||||||||||
| Property operating expenses | 1,584 | 1,365 | 3,262 | 2,747 | ||||||||||||
| Depreciation and amortization | 2,423 | 2,387 | 4,994 | 5,011 | ||||||||||||
| Provision for loss sharing (net of recoveries) | 4,333 | 7,672 | 4,607 | 10,848 | ||||||||||||
| Provision for credit losses (net of recoveries) | 29,564 | 13,878 | 48,682 | 36,395 | ||||||||||||
| Total other expenses | 93,563 | 79,196 | 178,830 | 164,916 | ||||||||||||
| Income before extinguishment of debt, sale of real estate, income from equity affiliates and income taxes | 59,540 | 94,572 | 134,925 | 190,521 | ||||||||||||
| Loss on extinguishment of debt | (412 | ) | (1,247 | ) | (412 | ) | (1,247 | ) | ||||||||
| Gain on sale of real estate | 3,813 | — | 3,813 | — | ||||||||||||
| Income from equity affiliates | 2,793 | 5,560 | 4,211 | 19,886 | ||||||||||||
| Provision for income taxes | (3,901 | ) | (5,553 | ) | (7,493 | ) | (13,582 | ) | ||||||||
| Net income | 61,833 | 93,332 | 135,044 | 195,578 | ||||||||||||
| Preferred stock dividends | 10,342 | 10,342 | 20,684 | 20,684 | ||||||||||||
| Net income attributable to noncontrolling interest | 4,094 | 6,826 | 9,090 | 14,411 | ||||||||||||
| Net income attributable to common stockholders | $ | 47,397 | $ | 76,164 | $ | 105,270 | $ | 160,483 | ||||||||
| Basic earnings per common share | $ | 0.25 | $ | 0.42 | $ | 0.56 | $ | 0.88 | ||||||||
| Diluted earnings per common share | $ | 0.25 | $ | 0.41 | $ | 0.56 | $ | 0.87 | ||||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 188,655,801 | 181,815,469 | 188,683,095 | 181,468,002 | ||||||||||||
| Diluted | 205,487,711 | 216,061,876 | 205,499,619 | 215,489,604 | ||||||||||||
| Dividends declared per common share | $ | 0.43 | $ | 0.42 | $ | 0.86 | $ | 0.82 | ||||||||
| ARBOR REALTY TRUST, INC. AND SUBSIDIARIES Consolidated Balance Sheets ($ in thousands—except share and per share data) | ||||||
| June 30, 2024 | December 31, 2023 | |||||
| (Unaudited) | ||||||
| Assets: | ||||||
| Cash and cash equivalents | $ | 737,485 | $ | 928,974 | ||
| Restricted cash | 218,228 | 608,233 | ||||
| Loans and investments, net (allowance credit losses of | 11,603,944 | 12,377,806 | ||||
| Loans held-for-sale, net | 342,870 | 551,707 | ||||
| Capitalized mortgage servicing rights, net | 380,719 | 391,254 | ||||
| Securities held-to-maturity, net (allowance credit losses of | 156,080 | 155,279 | ||||
| Investments in equity affiliates | 72,872 | 79,303 | ||||
| Due from related party | 105,097 | 64,421 | ||||
| Goodwill and other intangible assets | 89,032 | 91,378 | ||||
| Other assets | 490,885 | 490,281 | ||||
| Total assets | $ | 14,197,212 | $ | 15,738,636 | ||
| Liabilities and Equity: | ||||||
| Credit and repurchase facilities | $ | 3,160,384 | $ | 3,237,827 | ||
| Securitized debt | 5,716,513 | 6,935,010 | ||||
| Senior unsecured notes | 1,245,956 | 1,333,968 | ||||
| Convertible senior unsecured notes | 284,473 | 283,118 | ||||
| Junior subordinated notes to subsidiary trust issuing preferred securities | 144,275 | 143,896 | ||||
| Due to related party | 2,709 | 13,799 | ||||
| Due to borrowers | 75,837 | 121,707 | ||||
| Allowance for loss-sharing obligations | 76,561 | 71,634 | ||||
| Other liabilities | 303,865 | 343,072 | ||||
| Total liabilities | 11,010,573 | 12,484,031 | ||||
| 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 | 1,885 | ||||
| Additional paid-in capital | 2,361,466 | 2,367,188 | ||||
| Retained earnings | 57,894 | 115,216 | ||||
| Total Arbor Realty Trust, Inc. stockholders’ equity | 3,054,929 | 3,117,973 | ||||
| Noncontrolling interest | 131,710 | 136,632 | ||||
| Total equity | 3,186,639 | 3,254,605 | ||||
| Total liabilities and equity | $ | 14,197,212 | $ | 15,738,636 | ||
| ARBOR REALTY TRUST, INC. AND SUBSIDIARIES Statement of Income Segment Information - (Unaudited) (in thousands) | ||||||||||||||||
| Quarter Ended June 30, 2024 | ||||||||||||||||
| Structured Business | Agency Business | Other (1) | Consolidated | |||||||||||||
| Interest income | $ | 282,077 | $ | 15,111 | $ | — | $ | 297,188 | ||||||||
| Interest expense | 203,062 | 6,165 | — | 209,227 | ||||||||||||
| Net interest income | 79,015 | 8,946 | — | 87,961 | ||||||||||||
| Other revenue: | ||||||||||||||||
| Gain on sales, including fee-based services, net | — | 17,448 | — | 17,448 | ||||||||||||
| Mortgage servicing rights | — | 14,534 | — | 14,534 | ||||||||||||
| Servicing revenue | — | 46,797 | — | 46,797 | ||||||||||||
| Amortization of MSRs | — | (16,887 | ) | — | (16,887 | ) | ||||||||||
| Property operating income | 1,444 | — | — | 1,444 | ||||||||||||
| Loss on derivative instruments, net | — | (275 | ) | — | (275 | ) | ||||||||||
| Other income, net | 1,975 | 106 | — | 2,081 | ||||||||||||
| Total other revenue | 3,419 | 61,723 | — | 65,142 | ||||||||||||
| Other expenses: | ||||||||||||||||
| Employee compensation and benefits | 15,805 | 27,031 | — | 42,836 | ||||||||||||
| Selling and administrative | 5,828 | 6,995 | — | 12,823 | ||||||||||||
| Property operating expenses | 1,584 | — | — | 1,584 | ||||||||||||
| Depreciation and amortization | 1,250 | 1,173 | — | 2,423 | ||||||||||||
| Provision for loss sharing (net of recoveries) | — | 4,333 | — | 4,333 | ||||||||||||
| Provision for credit losses (net of recoveries) | 28,030 | 1,534 | — | 29,564 | ||||||||||||
| Total other expenses | 52,497 | 41,066 | — | 93,563 | ||||||||||||
| Income before extinguishment of debt, sale of real estate, income from equity affiliates and income taxes | 29,937 | 29,603 | — | 59,540 | ||||||||||||
| Loss on extinguishment of debt | (412 | ) | — | — | (412 | ) | ||||||||||
| Gain on sale of real estate | 3,813 | — | — | 3,813 | ||||||||||||
| Income from equity affiliates | 2,793 | — | — | 2,793 | ||||||||||||
| Benefit from (provision for) income taxes | 865 | (4,766 | ) | — | (3,901 | ) | ||||||||||
| Net income | 36,996 | 24,837 | — | 61,833 | ||||||||||||
| Preferred stock dividends | 10,342 | — | — | 10,342 | ||||||||||||
| Net income attributable to noncontrolling interest | — | — | 4,094 | 4,094 | ||||||||||||
| Net income attributable to common stockholders | $ | 26,654 | $ | 24,837 | $ | (4,094 | ) | $ | 47,397 | |||||||
(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) | |||||||||
| June 30, 2024 | |||||||||
| Structured Business | Agency Business | Consolidated | |||||||
| Assets: | |||||||||
| Cash and cash equivalents | $ | 272,614 | $ | 464,871 | $ | 737,485 | |||
| Restricted cash | 203,223 | 15,005 | 218,228 | ||||||
| Loans and investments, net | 11,603,944 | — | 11,603,944 | ||||||
| Loans held-for-sale, net | — | 342,870 | 342,870 | ||||||
| Capitalized mortgage servicing rights, net | — | 380,719 | 380,719 | ||||||
| Securities held-to-maturity, net | — | 156,080 | 156,080 | ||||||
| Investments in equity affiliates | 72,872 | — | 72,872 | ||||||
| Goodwill and other intangible assets | 12,500 | 76,532 | 89,032 | ||||||
| Other assets and due from related party | 521,039 | 74,943 | 595,982 | ||||||
| Total assets | $ | 12,686,192 | $ | 1,511,020 | $ | 14,197,212 | |||
| Liabilities: | |||||||||
| Debt obligations | $ | 10,216,430 | $ | 335,171 | $ | 10,551,601 | |||
| Allowance for loss-sharing obligations | — | 76,561 | 76,561 | ||||||
| Other liabilities and due to related party | 305,813 | 76,598 | 382,411 | ||||||
| Total liabilities | $ | 10,522,243 | $ | 488,330 | $ | 11,010,573 | |||
| 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 June 30, | Six Months Ended June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net income attributable to common stockholders | $ | 47,397 | $ | 76,164 | $ | 105,270 | $ | 160,483 | ||||||||
| Adjustments: | ||||||||||||||||
| Net income attributable to noncontrolling interest | 4,094 | 6,826 | 9,090 | 14,411 | ||||||||||||
| Income from mortgage servicing rights | (14,534 | ) | (16,201 | ) | (24,733 | ) | (34,659 | ) | ||||||||
| Deferred tax benefit | (2,944 | ) | (7,360 | ) | (6,896 | ) | (4,197 | ) | ||||||||
| Amortization and write-offs of MSRs | 19,518 | 21,204 | 37,936 | 39,927 | ||||||||||||
| Depreciation and amortization | 3,044 | 4,058 | 6,239 | 8,353 | ||||||||||||
| Loss on extinguishment of debt | 412 | 1,247 | 412 | 1,247 | ||||||||||||
| Provision for credit losses, net | 31,457 | 16,810 | 46,260 | 40,515 | ||||||||||||
| Loss on derivative instruments, net | 371 | 8,085 | 5,894 | 1,034 | ||||||||||||
| Stock-based compensation | 2,750 | 3,193 | 8,772 | 9,094 | ||||||||||||
| Distributable earnings (1) | $ | 91,565 | $ | 114,026 | $ | 188,244 | $ | 236,208 | ||||||||
| Diluted distributable earnings per share (1) | $ | 0.45 | $ | 0.57 | $ | 0.92 | $ | 1.19 | ||||||||
| Diluted weighted average shares outstanding (1) (2) | 205,487,711 | 198,791,261 | 205,499,619 | 198,239,006 | ||||||||||||
(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 exclude the potential shares issuable upon conversion and settlement of the Company's convertible senior notes principal balance.
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, 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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