Arbor Realty Trust Reports First Quarter 2024 Results and Declares Dividend of $0.43 per Share

*Company Highlights:*· GAAP net income of $0.31 per diluted common share
· Distributable earnings¹ of $0.47, or $0.48 per diluted common share, excluding a $1.6 million realized loss on a non-performing loan that was previously reserved for
· Declares cash dividend on common stock of $0.43 per share representing a 91% payout ratio
· Strong liquidity position with ~$800 million in cash and liquidity and ~$600 million of restricted cash in CLO vehicles with a cost of debt below the current market²
· Agency loan originations of $846.3 million; a servicing portfolio of ~$31.38 billion, up 9% from 1Q23
· Structured loan originations of $255.9 million, runoff of $640.0 million and a portfolio of ~$12.25 billion
· Repurchased $11.4 million of common stock in April 2024 at an average price of $12.19 per share, reflecting an ~4% discount to book value

UNIONDALE, N.Y., May 03, 2024 (GLOBE NEWSWIRE) -- Arbor Realty Trust, Inc. (NYSE: ABR), today announced financial results for the first quarter ended March 31, 2024. Arbor reported net income for the quarter of $57.9 million, or $0.31 per diluted common share, compared to net income of $84.3 million, or $0.46 per diluted common share for the quarter ended March 31, 2023. Distributable earnings for the quarter was $96.7 million, or $0.47 per diluted common share, compared to $122.2 million, or $0.62 per diluted common share for the quarter ended March 31, 2023.

*Agency Business*

*Loan Origination Platform*
  *Agency Loan Volume (in thousands)*   *Quarter Ended*   *March 31, 2024*   *December 31, 2023*
Fannie Mae   $ 458,429     $ 1,177,203  
Freddie Mac     370,102       98,370  
FHA     —       26,493  
Private Label     15,410       140,606  
SFR-Fixed Rate     2,318       —  
Total Originations   $ 846,259     $ 1,442,672          
Total Loan Sales   $ 1,085,374     $ 1,270,356          
Total Loan Commitments   $ 934,243     $ 1,362,379                  

For the quarter ended March 31, 2024, the Agency Business generated revenues of $66.6 million, compared to $96.3 million for the fourth quarter of 2023. Gain on sales, including fee-based services, net was $16.7 million for the quarter, reflecting a margin of 1.54%, compared to $16.7 million and 1.32% for the fourth quarter of 2023. Income from mortgage servicing rights was $10.2 million for the quarter, reflecting a rate of 1.32% as a percentage of loan commitments (excluding $160.2 million of loan commitments not serviced for a fee), compared to $21.1 million and 1.55% for the fourth quarter of 2023.

At March 31, 2024, loans held-for-sale was $322.9 million, with financing associated with these loans totaling $312.0 million.

*Fee-Based Servicing Portfolio*

The Company’s fee-based servicing portfolio totaled $31.38 billion at March 31, 2024. Servicing revenue, net was $31.5 million for the quarter and consisted of servicing revenue of $48.2 million, net of amortization of mortgage servicing rights totaling $16.6 million.
  *Fee-Based Servicing Portfolio ($ in thousands)*   *March 31, 2024*   *December 31, 2023*   *UPB*   *Wtd. Avg. Fee (bps)*   *Wtd. Avg. Life (years)*   *UPB*   *Wtd. Avg. Fee (bps)*   *Wtd. Avg. Life (years)*
Fannie Mae   $ 21,548,221     47.1   7.2   $ 21,264,578     47.4   7.4
Freddie Mac     5,301,291     23.4   7.7     5,181,933     24.0   8.5
Private Label     2,524,013     18.9   6.3     2,510,449     19.5   6.7
FHA     1,365,329     14.4   19.0     1,359,624     14.4   19.2
Bridge     380,712     10.9   3.6     379,425     10.9   3.2
SFR-Fixed Rate     265,429     20.1   5.0     287,446     20.1   5.1
Total   $ 31,384,995     38.8   7.7   $ 30,983,455     39.1   8.0                                

Loans sold under the Fannie Mae program contain an obligation to partially guarantee the performance of the loan (“loss-sharing obligations”) and includes $34.7 million for the fair value of the guarantee obligation undertaken at March 31, 2024. The Company recorded a $0.3 million net provision for loss sharing associated with CECL for the first quarter of 2024. At March 31, 2024, the Company’s total CECL allowance for loss-sharing obligations was $38.1 million, representing 0.18% of the Fannie Mae servicing portfolio.

*Structured Business*

*Portfolio and Investment Activity*
  *Structured Portfolio Activity ($ in thousands)*   *Quarter Ended*   *March 31, 2024*   *December 31, 2023*   *UPB*   *%*   *UPB*   *%*
Bridge:                
Multifamily   $ 39,235     15 %   $ 38,700     14 %
SFR     171,490     67 %     198,629     75 %     210,725     82 %     237,329     89 %           .    
Mezzanine/Preferred Equity     45,129     18 %     28,829     11 %
Total Originations   $ 255,854     100 %   $ 266,158     100 %                
Number of Loans Originated     59           58                      
SFR Commitments   $ 411,617         $ 466,703                      
Loan Runoff   $ 640,018         $ 817,394      
  *Structured Portfolio ($ in thousands)*   *March 31, 2024*   *December 31, 2023*   *UPB*   *%*   *UPB*   *%*
Bridge:                
Multifamily   $ 10,254,756     84 %   $ 10,789,936     86 %
SFR     1,445,028     12 %     1,316,803     10 %
Other     166,505     1 %     166,505     1 %     11,866,289     97 %     12,273,244     97 %                
Mezzanine/Preferred Equity     377,845     3 %     334,198     3 %
SFR Permanent     5,728     <1 %     7,564     <1 %
Total Portfolio   $ 12,249,862     100 %   $ 12,615,006     100 %                            

At March 31, 2024, the loan and investment portfolio’s unpaid principal balance ("UPB"), excluding loan loss reserves, was $12.25 billion, with a weighted average current interest pay rate of 8.07%, compared to $12.62 billion and 8.42% at December 31, 2023. Including certain fees earned and costs associated with the loan and investment portfolio, the weighted average current interest pay rate was 8.81% at March 31, 2024, compared to 8.98% at December 31, 2023.

The average balance of the Company’s loan and investment portfolio during the first quarter of 2024, excluding loan loss reserves, was $12.52 billion with a weighted average yield of 9.44%, compared to $12.96 billion and 9.31% for the fourth quarter of 2023.

During the first quarter of 2024, the Company recorded a $17.8 million provision for loan losses associated with CECL. At March 31, 2024, the Company’s total allowance for loan losses was $211.9 million. The Company had twenty-one non-performing loans with a UPB of $464.8 million, before related loan loss reserves of $32.9 million, compared to sixteen loans with a carrying value of $274.2 million, before loan loss reserves of $27.1 million at December 31, 2023.

In addition, at March 31, 2024, the Company had twelve loans with a total UPB of $489.4 million that were less than 60 days past due, compared to twenty-four loans with a total UPB of $956.9 million at December 31, 2023. Interest income on these loans is only being recorded to the extent cash is received.

During the first quarter of 2024, the Company modified thirty-nine loans with a total UPB of $1.76 billion all of which required the borrowers to invest additional capital as part of the terms of the modification agreements. Twenty-three of these loans with a total UPB of $1.07 billion, contained interest rates based on pricing over SOFR ranging from 3.25% to 4.25%. Under the loan modification terms, borrowers invested additional capital to recapitalize their deals in exchange for temporary rate relief, which we provided through a pay and accrual feature. At March 31, 2024, these modified loans had a weighted average pay rate of 6.95% and a weighted average accrual rate of 1.86%. A portion of these loans totaling $712.9 million were less than 60 days past due at December 31, 2023, which the Company received all back interest owed in accordance with the modified terms.

*Financing Activity*

The balance of debt that finances the Company’s loan and investment portfolio at March 31, 2024 was $11.11 billion with a weighted average interest rate including fees of 7.44%, as compared to $11.57 billion and a rate of 7.45% at December 31, 2023.

The average balance of debt that finances the Company’s loan and investment portfolio for the first quarter of 2024 was $11.37 billion, as compared to $11.77 billion for the fourth quarter of 2023. The average cost of borrowings for the first quarter of 2024 was 7.50%, compared to 7.48% for the fourth quarter of 2023.

*Dividend*

The Company announced today that its Board of Directors has declared a quarterly cash dividend of $0.43 per share of common stock for the quarter ended March 31, 2024. The dividend is payable on May 31, 2024 to common stockholders of record on May 17, 2024. The ex-dividend date is May 16, 2024.

*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) 343-5419 for domestic callers and (203) 518-9731 for international callers. Please use participant passcode ABRQ124 when prompted by the operator.

A telephonic replay of the call will be available until May 10, 2024. The replay dial-in numbers are (888) 566-0903 for domestic callers and (402) 220-6935 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*

1. 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.
2. Amounts reflect approximate balances as of April 30, 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 **March 31,*     *2024*       *2023*  
Interest income   $ 321,292     $ 327,947  
Interest expense     217,676       219,373  
Net interest income     103,616       108,574  
*Other revenue:*        
Gain on sales, including fee-based services, net     16,666       14,589  
Mortgage servicing rights     10,199       18,458  
Servicing revenue, net     31,526       29,565  
Property operating income     1,570       1,381  
Gain (loss) on derivative instruments, net     (5,257 )     4,223  
Other income, net     2,333       4,882  
Total other revenue     57,037       73,098  
*Other expenses:*        
Employee compensation and benefits     47,694       42,399  
Selling and administrative     13,933       13,623  
Property operating expenses     1,678       1,383  
Depreciation and amortization     2,571       2,624  
Provision for loss sharing (net of recoveries)     273       3,177  
Provision for credit losses (net of recoveries)     19,118       22,517  
Total other expenses     85,267       85,723  
Income before income from equity affiliates and income taxes     75,386       95,949  
Income from equity affiliates     1,418       14,326  
Provision for income taxes     (3,592 )     (8,029 )
Net income     73,212       102,246  
Preferred stock dividends     10,342       10,342  
Net income attributable to noncontrolling interest     4,997       7,585  
Net income attributable to common stockholders   $ 57,873     $ 84,319          
Basic earnings per common share   $ 0.31     $ 0.47  
Diluted earnings per common share   $ 0.31     $ 0.46          
Weighted average shares outstanding:        
Basic     188,710,390       181,116,674  
Diluted     222,926,076       214,910,974          
Dividends declared per common share   $ 0.43     $ 0.40  

*ARBOR REALTY TRUST, INC. AND SUBSIDIARIES*
Consolidated Balance Sheets
($ in thousands—except share and per share data)   *March 31, 2024*   *December 31, 2023*   *(Unaudited)*    
*Assets:*        
Cash and cash equivalents   $ 908,049     $ 928,974  
Restricted cash     546,643       608,233  
Loans and investments, net (allowance credit losses of $211,942 and $195,664)     12,001,544       12,377,806  
Loans held-for-sale, net     322,875       551,707  
Capitalized mortgage servicing rights, net     385,520       391,254  
Securities held-to-maturity, net (allowance credit losses of $7,597 and $6,256)     155,413       155,279  
Investments in equity affiliates     90,244       79,303  
Due from related party     104,365       64,421  
Goodwill and other intangible assets     90,205       91,378  
Other assets     499,998       490,281  
Total assets   $ 15,104,856     $ 15,738,636          
*Liabilities and Equity:*        
Credit and repurchase facilities   $ 2,913,483     $ 3,237,827  
Securitized debt     6,691,958       6,935,010  
Senior unsecured notes     1,335,013       1,333,968  
Convertible senior unsecured notes     283,776       283,118  
Junior subordinated notes to subsidiary trust issuing preferred securities     144,096       143,896  
Due to related party     14,159       13,799  
Due to borrowers     95,807       121,707  
Allowance for loss-sharing obligations     72,790       71,634  
Other liabilities     319,466       343,072  
Total liabilities     11,870,548       12,484,031          
*Equity:*        
Arbor Realty Trust, Inc. stockholders' equity:        
Preferred stock, cumulative, redeemable, $0.01 par value: 100,000,000 shares authorized, shares issued and outstanding by period:     633,684       633,684  
Special voting preferred shares – 16,293,589 shares        
6.375% Series D – 9,200,000 shares        
6.25% Series E – 5,750,000 shares        
6.25% Series F – 11,342,000 shares        
Common stock, $0.01 par value: 500,000,000 shares authorized – 189,452,116 and 188,505,264 shares issued and outstanding     1,895       1,885  
Additional paid-in capital     2,372,336       2,367,188  
Retained earnings     91,770       115,216  
Total Arbor Realty Trust, Inc. stockholders’ equity     3,099,685       3,117,973  
Noncontrolling interest     134,623       136,632  
Total equity     3,234,308       3,254,605  
Total liabilities and equity   $ 15,104,856     $ 15,738,636  

*ARBOR REALTY TRUST, INC. AND SUBSIDIARIES*
Statement of Income Segment Information – (Unaudited)
(in thousands)   *Quarter Ended **March 31, 2024*   *Structured*
*Business*   *Agency*
*Business*   *Other *^*(1)*   *Consolidated*
Interest income   $ 307,888     $ 13,404     $ —     $ 321,292  
Interest expense     212,600       5,076       —       217,676  
Net interest income     95,288       8,328       —       103,616  
*Other revenue:*                
Gain on sales, including fee-based services, net     —       16,666       —       16,666  
Mortgage servicing rights     —       10,199       —       10,199  
Servicing revenue     —       48,157       —       48,157  
Amortization of MSRs     —       (16,631 )     —       (16,631 )
Property operating income     1,570       —       —       1,570  
Loss on derivative instruments, net     —       (5,257 )     —       (5,257 )
Other income, net     2,300       33       —       2,333  
Total other revenue     3,870       53,167       —       57,037  
*Other expenses:*                
Employee compensation and benefits     18,547       29,147       —       47,694  
Selling and administrative     6,796       7,137       —       13,933  
Property operating expenses     1,678       —       —       1,678  
Depreciation and amortization     1,398       1,173       —       2,571  
Provision for loss sharing (net of recoveries)     —       273       —       273  
Provision for credit losses (net of recoveries)     17,777       1,341       —       19,118  
Total other expenses     46,196       39,071       —       85,267  
Income before income from equity affiliates and income taxes     52,962       22,424       —       75,386  
Income from equity affiliates     1,418       —       —       1,418  
Provision for income taxes     (81 )     (3,511 )     —       (3,592 )
Net income     54,299       18,913       —       73,212  
Preferred stock dividends     10,342       —       —       10,342  
Net income attributable to noncontrolling interest     —       —       4,997       4,997  
Net income attributable to common stockholders   $ 43,957     $ 18,913     $ (4,997 )   $ 57,873  
(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)   *March 31, 2024*   *Structured*
*Business*   *Agency*
*Business*   *Consolidated*
*Assets:*            
Cash and cash equivalents   $ 453,316     $ 454,733     $ 908,049  
Restricted cash     530,099       16,544       546,643  
Loans and investments, net     12,001,544       —       12,001,544  
Loans held-for-sale, net     —       322,875       322,875  
Capitalized mortgage servicing rights, net     —       385,520       385,520  
Securities held-to-maturity, net     —       155,413       155,413  
Investments in equity affiliates     90,244       —       90,244  
Goodwill and other intangible assets     12,500       77,705       90,205  
Other assets and due from related party     532,385       71,978       604,363  
Total assets   $ 13,620,088     $ 1,484,768     $ 15,104,856              
*Liabilities:*            
Debt obligations   $ 11,056,363     $ 311,963     $ 11,368,326  
Allowance for loss-sharing obligations     —       72,790       72,790  
Other liabilities and due to related party     343,557       85,875       429,432  
Total liabilities   $ 11,399,920     $ 470,628     $ 11,870,548  

*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 **March 31,*     *2024*       *2023*  
Net income attributable to common stockholders   $ 57,873     $ 84,319          
Adjustments:        
Net income attributable to noncontrolling interest     4,997       7,585  
Income from mortgage servicing rights     (10,199 )     (18,458 )
Deferred tax (benefit) provision     (3,952 )     3,164  
Amortization and write-offs of MSRs     18,418       18,723  
Depreciation and amortization     3,193       4,295  
Provision for credit losses, net     14,804       23,704  
Loss (gain) on derivative instruments, net     5,523       (7,051 )
Stock-based compensation     6,020       5,901          
Distributable earnings (1)   $ 96,677     $ 122,182          
Diluted distributable earnings per share (1)   $ 0.47     $ 0.62          
Diluted weighted average shares outstanding (1) (2)     205,511,529       197,680,616  
(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 March 31, 2024 and March 31, 2023, the diluted weighted average shares outstanding excluded 17,414,547 and 17,230,358 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 90% of their REIT-taxable income. The Company considers distributable earnings in determining its quarterly dividend and believes that, over time, distributable earnings is a useful indicator of the Company's dividends per share.The Company defines distributable earnings as net income (loss) attributable to common stockholders computed in accordance with GAAP, adjusted for accounting items such as depreciation and amortization (adjusted for unconsolidated joint ventures), non-cash stock-based compensation expense, income from MSRs, amortization and write-offs of MSRs, gains/losses on derivative instruments primarily associated with Private Label loans not yet sold and securitized, 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.