Arbor Realty Trust Reports Third Quarter 2020 Results and Increases Quarterly Dividend to $0.32 per Share NYSE:ABR


Firm Highlights:

  • Diversified working platform with a multifamily focus that continues to supply robust core earnings and dividends in all cycles
    • GAAP web revenue of $0.72 and core earnings of $0.50 per diluted frequent share1
    • Raised money dividend on frequent inventory to $0.32 per share, our second consecutive improve, representing a 6.7% improve year-to-date
    • Continued robust efficiency from our residential mortgage banking three way partnership producing pretax revenue of $32.3 million

Company Enterprise

  • Grew our servicing portfolio to $22.56 billion, a 4.5% improve from 2Q20, and 12.5% yr-to-date
  • GSE loan originations of $1.47 billion, a 10.1% improve from 3Q19
  • Phase revenue of $40.7 million

Structured Enterprise

  • Mortgage portfolio surpasses $5.00 billion on $291.8 million of mortgage originations
  • Phase revenue of $55.2 million

UNIONDALE, N.Y., Oct. 30, 2020 (GLOBE NEWSWIRE) — Arbor Realty Belief, Inc. (NYSE:ABR), right this moment introduced monetary outcomes for the third quarter ended September 30, 2020. Arbor reported web revenue for the quarter of $82.Zero million, or $0.72 per diluted frequent share, in comparison with web revenue of $34.Zero million, or $0.35 per diluted frequent share for the quarter ended September 30, 2019. Core earnings for the quarter was $67.1 million, or $0.50 per diluted frequent share, in comparison with $43.1 million, or $0.37 per diluted frequent share for the quarter ended September 30, 2019.1

These excellent third quarter outcomes mirror the profitable execution of our enterprise technique and the versatile working platform we have now developed. Arbor continues to be very effectively positioned to achieve the present financial local weather. Our enterprise mannequin provides us diversified alternatives for progress and has allowed us to outperform within the business mortgage REIT house, stated Ivan Kaufman, founder, chairman and CEO of Arbor Realty Belief.

Our continued momentum and glorious outcomes have as soon as once more allowed us to extend our dividend to 32 cents a share our second consecutive quarterly dividend improve. It’s a true testomony to the worth of our franchise and the various various revenue streams we have now created that we’re ready to achieve any market cycle.

Company Enterprise

Mortgage Origination Platform

Company Mortgage Quantity (in 1000’s)
Quarter Ended
September 30,
2020
June 30,
2020
Originations:
Fannie Mae $ 1,117,679 $ 1,140,181
Freddie Mac 252,014 135,720
FHA 100,345 75,533
Non-public Label 5,840 49,122
Complete Originations $ 1,475,878 $ 1,400,556
Complete Mortgage Gross sales $ 1,219,462 $ 1,992,889
Complete Mortgage Commitments $ 1,528,551 $ 1,206,723

For the quarter ended September 30, 2020, the Company Enterprise generated revenues (excluding beneficial properties and losses on by-product devices) of $81.Eight million, in comparison with $81.1 million for the second quarter of 2020. Acquire on gross sales, together with fee-based companies, web was $19.9 million for the quarter, reflecting a margin of 1.63% on mortgage gross sales, in comparison with $26.Four million and 1.32% for the second quarter of 2020. Revenue from mortgage servicing rights was $42.Four million for the quarter, reflecting a charge of two.77% as a proportion of mortgage commitments, in comparison with $32.Four million and a couple of.69% for the second quarter of 2020.

At September 30, 2020, loans held-for-sale was $631.1 million which was primarily comprised of unpaid principal balances totaling $617.9 million, with financing related to these loans totaling $567.6 million.

Payment-Based Servicing Portfolio

Our fee-based servicing portfolio totaled $22.56 billion at September 30, 2020, a rise of 4.5% from June 30, 2020, primarily the results of $1.48 billion of latest company mortgage originations, web of $490.Four million in portfolio runoff in the course of the quarter. Servicing income, web was $13.Three million for the quarter and consisted of servicing income of $25.7 million, web of amortization of mortgage servicing rights totaling $12.Four million.

Payment-Primarily based Servicing Portfolio ($ in 1000’s)
As of September 30, 2020 As of June 30, 2020
UPB Wtd. Avg.
Payment
Wtd. Avg. Life
(in years)
UPB Wtd. Avg.
Payment
Wtd. Avg. Life
(in years)
Fannie Mae $ 16,462,041 0.516 % 8.4 $ 15,672,931 0.505 % 8.2
Freddie Mac 4,687,197 0.288 % 10.4 4,560,382 0.295 % 10.6
FHA 685,263 0.171 % 20.4 621,487 0.154 % 19.6
Non-public Label 727,063 0.200 % 9.4 727,132 0.200 % 9.5
Complete $ 22,561,564 0.448 % 9.2 $ 21,581,932 0.441 % 9.1

Loans bought beneath the Fannie Mae program include an obligation to partially assure the efficiency of the mortgage (loss-sharing obligations), and consists of $33.2 million for the truthful worth of the assure obligation undertaken at September 30, 2020. The Firm recorded a $2.5 million reversal of provision for loss sharing related to present anticipated credit score losses, or CECL, for the third quarter of 2020. At September 30, 2020, the Firms whole CECL allowance for loss-sharing obligations was $38.Zero million, representing 0.23% of the Fannie Mae servicing portfolio.

Structured Enterprise

Portfolio and Funding Exercise

  • Important revenue generated by our residential mortgage banking three way partnership
  • Originated 13 loans totaling $291.Eight million, and consisted primarily of multifamily bridge loans totaling $235.1 million
  • Payoffs and pay downs on 15 loans totaling $206.Zero million
  • Portfolio progress of $124.7 million, or 2.5%

The Firm recorded pretax revenue of $32.Three million from its vital three way partnership funding in a residential mortgage banking enterprise on account of the continued traditionally low rate of interest surroundings. Pretax revenue from this funding for the 9 months ended September 30, 2020 totaled $56.1 million.

At September 30, 2020, the mortgage and funding portfolios unpaid principal steadiness, excluding mortgage loss reserves, was $5.10 billion, with a weighted common present curiosity pay charge of 5.39%, in comparison with $4.97 billion and 5.57% at June 30, 2020. Together with sure charges earned and prices related to the mortgage and funding portfolio, the weighted common present curiosity pay charge was 5.93% at September 30, 2020, in comparison with 6.10% at June 30, 2020.

The common steadiness of the Firms mortgage and funding portfolio in the course of the third quarter of 2020, excluding mortgage loss reserves, was $4.98 billion with a weighted common yield of 5.98%, in comparison with $4.81 billion and 6.16% for the second quarter of 2020. The lower in common yield was primarily as a consequence of a number of components together with a rise in non-performing and modified loans, decrease accelerated charges on mortgage payoffs and decrease charges on originations when in comparison with runoff within the third quarter as in comparison with the second quarter.

Through the third quarter of 2020, the Firm recorded a reversal of its provision for mortgage losses of $6.1 million on account of its mortgage assessment course of related to CECL. At September 30, 2020, the Firms whole allowance for mortgage losses was $146.7 million. The Firm had eight non-performing loans with a carrying worth of $62.9 million, earlier than associated mortgage loss reserves of $9.1 million, in comparison with six loans with a carrying worth of $60.5 million, earlier than associated mortgage loss reserves of $16.6 million as of June 30, 2020.

Financing Exercise

The steadiness of debt that funds the Firms mortgage and funding portfolio at September 30, 2020 was $4.52 billion with a weighted common rate of interest together with charges of three.09% as in comparison with $4.54 billion and a charge of three.14% at June 30, 2020. The common steadiness of debt that funds the Firms mortgage and funding portfolio for the third quarter of 2020 was $4.59 billion, as in comparison with $4.53 billion for the second quarter of 2020. The common value of borrowings for the third quarter of 2020 was 3.06%, in comparison with 3.26% for the second quarter of 2020. The lower in common prices was primarily as a consequence of a lower in LIBOR.

The Firm is topic to varied monetary covenants and restrictions beneath the phrases of its collateralized securitization autos, financing amenities and unsecured debt. The Firm believes it was in compliance with all monetary covenants and restrictions as of September 30, 2020 and as of the latest collateralized securitization automobile dedication dates in October 2020.

Dividends

The Firm introduced right this moment that its Board of Administrators has declared a quarterly money dividend of $0.32 per share of frequent inventory for the quarter ended September 30, 2020, representing a rise of 6.7% year-to-date. The dividend is payable on November 30, 2020 to frequent stockholders of document on November 16, 2020. The ex-dividend date is November 13, 2020.

The Firm additionally introduced right this moment that its Board of Administrators has declared money dividends on the Firm’s Collection A, Collection B and Collection C cumulative redeemable most popular inventory reflecting accrued dividends from September 1, 2020 by means of November 30, 2020. The dividends are payable on November 30, 2020 to most popular stockholders of document on November 15, 2020. The Firm can pay whole dividends of $0.515625, $0.484375 and $0.53125 per share on the Collection A, Collection B and Collection C most popular inventory, respectively.

Earnings Convention Name

The Firm will host a convention name right this moment at 10:00 a.m. Japanese Time. A reside webcast and replay of the convention name shall be accessible at http://www.arbor.com within the investor relations part of the Firms web site. These with out net entry ought to entry the decision telephonically at the very least ten minutes previous to the convention name. The dial-in numbers are (877) 876-9176 for home callers and (785) 424-1670 for worldwide callers. Please use participant passcode ABRQ320 when prompted by the operator.

A telephonic replay of the decision shall be accessible till November 6, 2020. The replay dial-in numbers are (800) 839-5679 for home callers and (402) 220-2566 for worldwide callers.

About Arbor Realty Belief, Inc.

Arbor Realty Trust, Inc. (NYSE:ABR) is a nationwide actual property funding belief and direct lender, offering mortgage origination and servicing for multifamily, seniors housing, healthcare and different various business actual property property. Headquartered in New York, Arbor manages a multibillion-dollar servicing portfolio, specializing in government-sponsored enterprise merchandise. Arbor is a Fannie Mae DUS lender and Freddie Mac Optigo Vendor/Servicer. Arbors product platform additionally consists of CMBS, bridge, mezzanine and preferred equity lending. Rated by Commonplace and Poors and Fitch Rankings, Arbor is dedicated to constructing on its status for service, high quality and customised options with an unparalleled dedication to offering our shoppers excellence over the whole lifetime of a mortgage.

Secure Harbor Assertion

Sure gadgets on this press launch could represent forward-looking statements throughout the which means of the protected harbor provisions of the Non-public Securities Litigation Reform Act of 1995. These statements are primarily based on administrations present expectations and beliefs and are topic to plenty of developments and uncertainties that would trigger precise outcomes to vary materially from these described within the forward-looking statements. Arbor may give no assurance that its expectations shall be attained. Components that would trigger precise outcomes to vary materially from Arbors expectations embody, however are usually not restricted to, modifications in financial situations typically, and the true property markets particularly, particularly, because of the uncertainties created by the COVID-19 pandemic, continued potential to supply new investments, modifications in rates of interest and/or credit score spreads, and different dangers detailed in Arbors Annual Report on Type 10-Okay for the yr ended December 31, 2019 and its different reviews filed with the SEC. Such forward-looking statements communicate solely as of the date of this press launch. Arbor expressly disclaims any obligation or enterprise to launch publicly any updates or revisions to any forward-looking statements contained herein to mirror any change in Arbors expectations with regard thereto or change in occasions, situations, or circumstances on which any such assertion is predicated.

1. Non-GAAP Monetary Measures

Through the quarterly earnings convention name, the Firm could focus on non-GAAP monetary measures as outlined by SEC Regulation G. As well as, the Firm has used non-GAAP monetary measures on this press launch. A supplemental schedule of non-GAAP monetary measures and the comparable GAAP monetary measure will be discovered on web page 11 of this launch.

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
Consolidated Statements of Revenue – (Unaudited)
($ in 1000’sbesides share and per share information)
Quarter Ended
September 30,
9 Months Ended
September 30,
2020 2019 2020 2019
Curiosity revenue $ 81,701 $ 80,509 $ 253,307 $ 233,957
Curiosity expense 37,888 48,064 129,172 138,213
Internet curiosity revenue 43,813 32,445 124,135 95,744
Different income:
Acquire on gross sales, together with fee-based companies, web 19,895 21,298 60,566 51,897
Mortgage servicing rights 42,357 29,911 96,708 62,852
Servicing income, web 13,348 13,790 40,156 39,954
Property working revenue 1,033 2,237 3,976 8,187
Loss on by-product devices, web (753 ) (5,003 ) (58,852 ) (6,726 )
Different revenue, web 1,050 325 3,404 1,314
Complete different income 76,930 62,558 145,958 157,478
Different bills:
Worker compensation and advantages 32,962 32,861 101,652 93,647
Promoting and administrative 9,356 10,882 29,013 31,122
Property working bills 1,300 2,563 4,778 7,649
Depreciation and amortization 1,922 1,841 5,830 5,663
Impairment loss on actual property owned 1,000
Provision for loss sharing (web of recoveries) (2,227 ) 735 21,706 1,557
Provision for credit score losses (web of recoveries) (7,586 ) 59,510
Complete different bills 35,727 48,882 222,489 140,638
Revenue earlier than extinguishment of debt, sale of actual property, fairness associates, and revenue taxes
85,016 46,121 47,604 112,584
Loss on extinguishment of debt (3,546 ) (128 )
Loss on sale of actual property (1,868 ) (1,868 )
Revenue from fairness associates 32,358 3,718 56,758 9,133
Provision for revenue taxes (17,785 ) (6,623 ) (15,493 ) (10,963 )
Internet revenue 97,721 43,216 83,455 110,626
Most popular inventory dividends 1,888 1,888 5,665 5,665
Internet revenue attributable to noncontrolling curiosity 13,836 7,363 11,012 19,429
Internet revenue attributable to frequent stockholders $ 81,997 $ 33,965 $ 66,778 $ 85,532
Primary earnings per frequent share $ 0.72 $ 0.36 $ 0.60 $ 0.95
Diluted earnings per frequent share $ 0.72 $ 0.35 $ 0.59 $ 0.93
Weighted common shares excellent:
Primary 113,766,446 94,486,839 111,775,436 89,899,074
Diluted 133,997,087 117,468,044 132,401,315 113,033,968
Dividends declared per frequent share $ 0.31 $ 0.29 $ 0.91 $ 0.84
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
Consolidated Stability Sheets
($ in 1000’sbesides share and per share information)
September 30, December 31,
2020 2019
(Unaudited)
Belongings:
Money and money equivalents $ 192,204 $ 299,687
Restricted money 110,263 210,875
Loans and investments, web (allowance for credit score losses: $146,745 and $71,069, respectively) 4,910,872 4,189,960
Loans held-for-sale, web 631,138 861,360
Capitalized mortgage servicing rights, web 335,235 286,420
Securities held-to-maturity, web (allowance for credit score losses: $1,628 and $0, respectively) 118,260 88,699
Investments in fairness associates 82,322 41,800
Actual property owned, web 2,894 13,220
Due from associated get together 23,814 10,651
Goodwill and different intangible property 106,716 110,700
Different property 175,500 125,788
Complete property $ 6,689,218 $ 6,239,160
Liabilities and Fairness:
Credit score amenities and repurchase agreements $ 1,449,940 $ 1,678,288
Collateralized mortgage obligations 2,516,032 2,130,121
Debt fund 68,629
Senior unsecured notes 662,289 319,799
Convertible senior unsecured notes, web 266,706 284,152
Junior subordinated notes to subsidiary belief issuing most popular securities 141,470 140,949
Attributable to associated get together 802 13,100
Attributable to debtors 76,304 79,148
Allowance for loss-sharing obligations 71,160 34,648
Different liabilities 181,279 134,299
Complete liabilities 5,365,982 4,883,133
Fairness:
Arbor Realty Belief, Inc. stockholders’ fairness:
Most popular inventory, cumulative, redeemable, $0.01 par worth: 100,000,000 shares approved;particular voting most popular shares; 17,632,371 and 20,369,265 shares issued andexcellent, respectively; 8.25% Collection A, $38,788 combination liquidation choice;1,551,500 shares issued and excellent; 7.75% Collection B, $31,500 combinationliquidation choice; 1,260,000 shares issued and excellent; 8.50% Collection C,$22,500 combination liquidation choice; 900,000 shares issued and excellent 89,472 89,501
Frequent inventory, $0.01 par worth: 500,000,000 shares approved; 115,930,351 and 109,706,214 shares issued and excellent, respectively 1,159 1,097
Extra paid-in capital 1,222,945 1,154,932
Collected deficit (120,539 ) (60,920 )
Complete Arbor Realty Belief, Inc. stockholders fairness 1,193,037 1,184,610
Noncontrolling curiosity 130,199 171,417
Complete fairness 1,323,236 1,356,027
Complete liabilities and fairness $ 6,689,218 $ 6,239,160
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
Assertion of Revenue Phase Data – (Unaudited)
(in 1000’s)
Quarter Ended September 30, 2020
Structured
Enterprise
Company
Enterprise
Different /
Eliminations (1)
Consolidated
Curiosity revenue $ 75,471 $ 6,230 $ $ 81,701
Curiosity expense 35,252 2,636 37,888
Internet curiosity revenue 40,219 3,594 43,813
Different income:
Acquire on gross sales, together with fee-based companies, web 19,895 19,895
Mortgage servicing rights 42,357 42,357
Servicing income 25,764 25,764
Amortization of MSRs (12,416 ) (12,416 )
Servicing income, web 13,348 13,348
Property working revenue 1,033 1,033
Acquire (loss) on by-product devices, web 118 (871 ) (753 )
Different revenue, web 1,052 1,052
Complete different income 2,203 74,729 76,932
Different bills:
Worker compensation and advantages 8,874 24,089 32,963
Promoting and administrative 4,665 4,691 9,356
Property working bills 1,300 1,300
Depreciation and amortization 598 1,324 1,922
Provision for loss sharing (web of recoveries) (2,227 ) (2,227 )
Provision for credit score losses (web of recoveries) (6,065 ) (1,521 ) (7,586 )
Complete different bills 9,372 26,356 35,728
Revenue earlier than sale of actual property, fairness associates, and revenue taxes 33,050 51,967 85,017
Loss on sale of actual property (1,868 ) (1,868 )
Revenue from fairness associates 32,358 32,358
Provision for revenue taxes (6,494 ) (11,292 ) (17,786 )
Internet revenue 57,046 40,675 97,721
Most popular inventory dividends 1,888 1,888
Internet revenue attributable to noncontrolling curiosity 13,836 13,836
Internet revenue (loss) attributable to frequent stockholders $ 55,158 $ 40,675 $ (13,836 ) $ 81,997
(1) Contains sure revenue or bills not allotted to the 2 reportable segments. Quantity displays revenue attributableto the noncontrolling curiosity holders.
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
Stability Sheet Phase Data – (Unaudited)
(in 1000’s)
September 30, 2020
Structured
Enterprise
Company
Enterprise
Consolidated
Belongings:
Money and money equivalents $ 103,655 $ 88,549 $ 192,204
Restricted money 103,412 6,851 110,263
Loans and investments, web 4,910,872 4,910,872
Loans held-for-sale, web 631,138 631,138
Capitalized mortgage servicing rights, web 335,235 335,235
Securities held-to-maturity, web 20,000 98,260 118,260
Investments in fairness associates 82,322 82,322
Goodwill and different intangible property 12,500 94,216 106,716
Different property 154,509 47,699 202,208
Complete property $ 5,387,270 $ 1,301,948 $ 6,689,218
Liabilities:
Debt obligations $ 4,468,886 $ 567,551 $ 5,036,437
Allowance for loss-sharing obligations 71,160 71,160
Different liabilities 194,289 64,096 258,385
Complete liabilities $ 4,663,175 $ 702,807 $ 5,365,982
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
Supplemental Schedule of Non-GAAP Monetary Measures – (Unaudited)
Reconciliation of Core Earnings to GAAP Internet Revenue (Loss)
($ in 1000’sbesides share and per share information)
Quarter Ended
September 30,
9 Months Ended
September 30,
2020 2019 2020 2019
Internet revenue attributable to frequent stockholders $ 81,997 $ 33,965 $ 66,778 $ 85,532
Changes:
Internet revenue attributable to noncontrolling curiosity 13,836 7,363 11,012 19,429
Revenue from mortgage servicing rights (42,357 ) (29,911 ) (96,708 ) (62,852 )
Deferred tax provision (profit) 3,853 2,223 (5,172 ) (1,026 )
Amortization and write-offs of MSRs 15,456 18,904 48,739 52,558
Depreciation and amortization 2,867 2,789 8,731 8,504
Loss on extinguishment of debt 3,546 128
Provision for credit score losses, web (11,137 ) 431 79,144 1,021
Loss on by-product devices, web 753 5,003 44,113 6,726
Inventory-based compensation 1,854 2,316 7,286 7,574
Core earnings (1) $ 67,122 $ 43,083 $ 167,469 $ 117,594
Diluted core earnings per share (1) $ 0.50 $ 0.37 $ 1.26 $ 1.04
Diluted weighted common shares excellent (1) 133,997,087 117,468,044 132,401,315 113,033,968
(1) Quantities are attributable to frequent stockholders and OP Unit holders. The OP Models are redeemable for money, or on the Firm’s possibility for shares of the Firm’s frequent inventory on a one-for-one foundation.
Starting within the first quarter of 2020, the Firm is presenting core earnings as its non-GAAP monetary measure in alternative of adjusted funds from operations (“AFFO”). Core earnings is akin to our earlier AFFO metric, revised to exclude provisions for credit score losses (together with CECL) associated to our structured mortgage portfolio, securities held-to-maturity and loss-sharing obligations associated to the Fannie Mae program. The Firm is presenting core earnings as a result of administration believes it can be crucial supplemental measure of the Firms working efficiency and is incessantly utilized by friends, analysts, traders and different events within the analysis of REITs. Prior interval quantities introduced above have been conformed to mirror this transformation.
The Firm defines core earnings as web revenue (loss) attributable to frequent stockholders (computed in accordance with GAAP) adjusted for accounting gadgets resembling depreciation and amortization (adjusted for unconsolidated joint ventures), non-cash stock-based compensation expense, revenue from mortgage servicing rights (“MSRs”), amortization and write-offs of MSRs, beneficial properties and losses on by-product devices primarily related to non-public label loans that haven’t but been bought and securitized, the tax affect on cumulative beneficial properties or losses on by-product devices related to non-public label loans that have been bought in the course of the intervals introduced, modifications in truthful worth of GSE-related derivatives that quickly movement by means of earnings, deferred tax (profit) provision, CECL provisions for credit score losses (excluding particularly reserved provisions for loss-sharing) and the amortization of the convertible senior notes conversion possibility. The Firm additionally provides again one-time prices resembling acquisition prices and one-time beneficial properties or losses on the early extinguishment of debt.
Core earnings is just not supposed to be a sign of the Firm’s money movement from working actions (decided in accordance with GAAP) or a measure of its liquidity, neither is it fully indicative of funding the Firm’s money wants, together with its potential to make money distributions. The Firms calculation of core earnings could also be totally different from the calculations utilized by different firms and, due to this fact, comparability could also be restricted.



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