GlobeNewswire Inc | May 7, 2021 08:00AM EDT

May 07, 2021

Company Highlights:

-- Diversified operating platform with a multifamily focus that continues to produce strong distributable earnings and dividends in all cycles GAAP net income of $0.55 and distributable earnings of $0.52 per diluted common share1Raised cash dividend on common stock to $0.34 per share, or 13.3% higher than a year ago, representing our fourth consecutive quarterly increaseGenerated pretax income of $22.5 million from our residential mortgage banking joint ventureRaised $158 million of accretive growth capital through the issuance of common shares

Agency Business:

-- Segment income of $35.3 million -- Loan originations of $1.40 billion and a servicing portfolio of $25.46 billion

Structured Business:

-- Segment income of $43.9 million -- Portfolio growth of 14% on $1.09 billion of loan originations -- Closed a $785 million collateralized securitization vehicle

Recent Development

-- Raised an additional $175 million of accretive growth capital through the issuance of 5.00% senior unsecured notes due in 2026

UNIONDALE, N.Y., May 07, 2021 (GLOBE NEWSWIRE) -- Arbor Realty Trust, Inc. (NYSE: ABR), today announced financial results for the first quarter ended March 31, 2021. Arbor reported net income for the quarter of $69.5 million, or $0.55 per diluted common share, compared to a net loss of $59.3 million, or $0.54 per diluted common share for the quarter ended March 31, 2020. Distributable earnings for the quarter was $75.1 million, or $0.52 per diluted common share, compared to $40.5 million, or $0.31 per diluted common share for the quarter ended March 31, 2020.1

Our first quarter results were truly remarkable, allowing us to once again increase our dividend. Our exceptional performance continues to demonstrate the value of our diverse platform, and how uniquely positioned we are for future growth and success, said Ivan Kaufman, founder, chairman and CEO of Arbor Realty Trust.

Agency Business

Loan Origination Platform

Agency Loan Volume (in thousands) Quarter Ended March 31, 2021 December 31, 2020Fannie Mae $ 1,063,983 $ 2,202,092Freddie Mac 114,717 373,063FHA 66,480 133,523Private Label 152,454 44,884Total Originations $ 1,397,634 $ 2,753,562 Total Loan Sales $ 1,841,891 $ 2,418,317 Total Loan Commitments $ 1,460,135 $ 2,808,173

For the quarter ended March 31, 2021, the Agency Business generated revenues (excluding gains and losses on derivative instruments) of $89.3 million, compared to $125.6 million for the fourth quarter of 2020. Gain on sales, including fee-based services, net was $26.2 million for the quarter, reflecting a margin of 1.47% on loan sales (excluding $63.3 million of single-family rental (SFR) fixed rate loan sales), compared to $34.0 million and 1.41% for the fourth quarter of 2020. Income from mortgage servicing rights was $36.9 million for the quarter, reflecting a rate of 2.53% as a percentage of loan commitments, compared to $68.8 million and 2.45% for the fourth quarter of 2020.

At March 31, 2021, loans held-for-sale was $613.5 million which was primarily comprised of unpaid principal balances totaling $602.3 million, with financing associated with these loans totaling $538.3 million.

Fee-Based Servicing Portfolio

Our fee-based servicing portfolio totaled $25.46 billion at March 31, 2021, an increase of 3.4% from December 31, 2020, primarily the result of $1.40 billion of new agency loan originations, net of $418.6 million in portfolio runoff during the quarter. Servicing revenue, net was $15.5 million for the quarter and consisted of servicing revenue of $29.7 million, net of amortization of mortgage servicing rights totaling $14.2 million.

Fee-Based Servicing Portfolio ($ in thousands) As of March 31, 2021 As of December 31, 2020 Wtd. Wtd. Wtd. Avg. Avg. Wtd. Avg. Avg. UPB Fee Life UPB Fee Life (in (in years) years)Fannie $ 19,073,504 0.528% 8.3 $ 18,268,268 0.523% 8.2MaeFreddie 4,795,228 0.283% 9.8 4,881,080 0.279% 9.9MacFHA 796,133 0.160% 20.7 752,116 0.163% 20.3Private 726,918 0.200% 8.7 726,992 0.200% 8.7LabelSFR-Fixed 63,299 0.200% 6.1 - - -RateTotal $ 25,455,082 0.460% 9.0 $ 24,628,456 0.454% 8.9

Loans sold under the Fannie Mae program contain an obligation to partially guarantee the performance of the loan (loss-sharing obligations), and includes $34.4 million for the fair value of the guarantee obligation undertaken at March 31, 2021. The Company recorded a $1.1 million provision for loss sharing associated with CECL for the first quarter of 2021. At March 31, 2021, the Companys total CECL allowance for loss-sharing obligations was $31.5 million, representing 0.16% of the Fannie Mae servicing portfolio.

Structured Business

Portfolio and Investment Activity

-- Strong growth in the portfolio of $788.3 million, or 14.4% -- Originated 55 loans totaling $1.09 billion, consisted primarily of multifamily bridge loans totaling $962.4 million -- Payoffs and pay downs on 19 loans totaling $233.0 million -- Committed to fund three SFR build-to-rent loans totaling $98.4 million -- Continued significant income generated by our residential mortgage banking joint venture

The Company recorded pretax income of $22.5 million from its significant joint venture investment in a residential mortgage banking business as a result of the continued historically low interest rate environment.

At March 31, 2021, the loan and investment portfolios unpaid principal balance, excluding loan loss reserves, was $6.26 billion, with a weighted average current interest pay rate of 5.06%, compared to $5.48 billion and 5.23% at December 31, 2020. Including certain fees earned and costs associated with the loan and investment portfolio, the weighted average current interest pay rate was 5.64% at March 31, 2021, compared to 5.80% at December 31, 2020.

The average balance of the Companys loan and investment portfolio during the first quarter of 2021, excluding loan loss reserves, was $5.89 billion with a weighted average yield of 5.72%, compared to $5.09 billion and 6.04% for the fourth quarter of 2020. The decrease in average yield was primarily due to lower accelerated fees on loan payoffs and lower rates on originations when compared to runoff in the first quarter as compared to the fourth quarter of 2020.

During the first quarter of 2021, the Company recorded a $1.02 million reversal of provisions for loan losses associated with CECL. At March 31, 2021, the Companys total allowance for loan losses was $147.3 million. The Company had seven non-performing loans with a carrying value of $60.3 million, before related loan loss reserves of $6.5 million as of March 31, 2021 and December 31, 2020.

Financing Activity

The Company completed a collateralized securitization vehicle (CLO XIV) totaling$785.0 millionof real estate related assets and cash. Investment grade-rated notes totaling$655.5 millionwere issued, and the Company retained subordinate interests in the issuing vehicle of$129.5 million. The facility has a two-and-a-half-year asset replenishment period and an initial weighted average interest rate of 1.33% over LIBOR, excluding fees and transaction costs.

The Company completed the unwind of CLO IX, redeeming$356.2 millionof outstanding notes, which were repaid primarily from the refinancing of the remaining assets primarily within CLO XIV, as well as with cash held by CLO IX, and expensed$1.4 millionof deferred financing fees into loss on extinguishment of debt on the consolidated statements of operations.

The balance of debt that finances the Companys loan and investment portfolio at March 31, 2021 was $5.62 billion with a weighted average interest rate including fees of 2.90% as compared to $4.92 billion and a rate of 3.03% at December 31, 2020. The average balance of debt that finances the Companys loan and investment portfolio for the first quarter of 2021 was $5.18 billion, as compared to $4.64 billion for the fourth quarter of 2020. The average cost of borrowings for the first quarter of 2021 was 2.99%, compared to 3.05% for the fourth quarter of 2020.

The Company is subject to various financial covenants and restrictions under the terms of its collateralized securitization vehicles, financing facilities and unsecured debt. The Company believes it was in compliance with all financial covenants and restrictions as of March 31, 2021 and as of the most recent collateralized securitization vehicle determination dates in April 2021.

Capital Markets

The Company issued 7.0 million shares of common stock in a public offering receiving net proceeds of $108.2 million. The proceeds are primarily to be used to make investments and for general corporate purposes.

In April 2021, the Company issued $175.0 million in aggregate principal amount of 5.00% senior unsecured notes in a private placement, generating net proceeds of $172.0 million after deducting offering expenses. The notes are due in 2026 and the proceeds will be used to make investments and for general corporate purposes.

Dividends

The Company announced today that its Board of Directors has declared a quarterly cash dividend of $0.34 per share of common stock for the quarter ended March 31, 2021, representing a 13.3% increase from a year ago. The dividend is payable on June 1, 2021 to common stockholders of record on May 21, 2021. The ex-dividend date is May 20, 2021.

As previously announced, the Board of Directors has declared cash dividends on the Company's Series A, Series B and Series C cumulative redeemable preferred stock reflecting accrued dividends from March 1, 2021 through May 31, 2021. The dividends are payable on June 1, 2021 to preferred stockholders of record on May 15, 2021. The Company will pay total dividends of $0.515625, $0.484375 and $0.53125 per share on the Series A, Series B and Series C preferred stock, respectively.

Earnings Conference Call

The Company will host a conference call today at 10:00 a.m. Eastern Time. A live webcast and replay of the conference call will be available at http://www.arbor.com in the investor relations section of the Companys website. Those without web access should access the call telephonically at least ten minutes prior to the conference call. The dial-in numbers are (877) 876-9174 for domestic callers and (785) 424-1669 for international callers. Please use participant passcode ABRQ121 when prompted by the operator.

A telephonic replay of the call will be available until May 14, 2021. The replay dial-in numbers are (800) 839-6910 for domestic callers and (402) 220-6058 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, seniors housing, healthcare 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 Fannie Mae DUS lender and Freddie Mac Optigo Seller/Servicer. Arbors product platform also includes CMBS, bridge, mezzanine and preferred equity lending. Rated by Standard and Poors 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 managements 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 Arbors expectations include, but are not limited to, changes in economic conditions generally, and the real estate markets specifically, in particular, due to the uncertainties created by the COVID-19 pandemic, continued ability to source new investments, changes in interest rates and/or credit spreads, and other risks detailed in Arbors Annual Report on Form 10-K for the year ended December 31, 2020 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 Arbors expectations with regard thereto or change in events, conditions, or circumstances on which any such statement is based.

1. Non-GAAP Financial Measures

During the quarterly earnings conference call, the Company may discuss non-GAAP financial measures as defined by SEC Regulation G. In addition, the Company has used non-GAAP financial measures in this press release. A supplemental schedule of non-GAAP financial measures and the comparable GAAP financial measure can be found on page 11 of this release.

Contact: Investors:Arbor Realty Trust, Inc. The Ruth GroupPaul Elenio, Chief Financial Officer Daniel Kontoh-Boateng/James Salierno 516-506-4422 646-536-7019/7028pelenio@arbor.com dboateng@theruthgroup.com jsalierno@theruthgroup.com

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES Consolidated Statements of Operations - (Unaudited)($ in thousands?except share and per share data) Quarter Ended March 31, 2021 2020 Interest income $ 91,144 $ 88,526 Interest expense 42,184 49,982 Net interest income 48,960 38,544 Other revenue: Gain on sales, including fee-based 28,867 14,305 services, netMortgage servicing rights 36,936 21,934 Servicing revenue, net 15,536 13,302 Property operating income - 2,192 Loss on derivative instruments, net (3,220 ) (50,731 )Other income, net 681 1,303 Total other revenue 78,800 2,305 Other expenses: Employee compensation and benefits 42,974 34,252 Selling and administrative 10,818 11,052 Property operating expenses 143 2,443 Depreciation and amortization 1,755 1,947 Provision for loss sharing (net of 1,652 21,537 recoveries)Provision for credit losses (net of (1,075 ) 54,382 recoveries) Total other expenses 56,267 125,613 Income (loss) before extinguishment of debt, sale of real estate, income fromequity affiliates, and income taxes 71,493 (84,764 )

Loss on extinguishment of debt (1,370 ) (1,954 )Gain on sale of real estate 1,228 - Income from equity affiliates 22,251 3,992 (Provision for) benefit from income taxes (12,492 ) 14,370 Net income (loss) 81,110 (68,356 ) Preferred stock dividends 1,888 1,888 Net income (loss) attributable to 9,743 (10,934 )noncontrolling interestNet income (loss) attributable to common $ 69,479 $ (59,310 )stockholders Basic earnings (loss) per common share $ 0.55 $ (0.54 )Diluted earnings (loss) per common share $ 0.55 $ (0.54 ) Weighted average shares outstanding: Basic 125,235,405 110,792,412 Diluted 143,958,433 131,217,199 Dividends declared per common share $ 0.33 $ 0.30



ARBOR REALTY TRUST, INC. AND SUBSIDIARIES Consolidated Balance Sheets($ in thousands?except share and per share data) March 31, December 31, 2021 2020 (Unaudited) Assets: Cash and cash equivalents $ 260,228 $ 339,528 Restricted cash 272,039 197,470 Loans and investments, net (allowance for credit 6,070,337 5,285,868 losses of $147,300 and $148,329, respectively)Loans held-for-sale, net 613,542 986,919 Capitalized mortgage servicing rights, net 406,980 379,974 Securities held-to-maturity, net (allowance for 92,860 95,524 credit losses of $1,597 and $1,644, respectively)Investments in equity affiliates 104,406 74,274 Real estate owned, net 1,447 1,485 Due from related party 19,705 12,449 Goodwill and other intangible assets 104,278 105,451 Other assets 185,037 182,044 Total assets $ 8,130,859 $ 7,660,986 Liabilities and Equity: Credit facilities and repurchase agreements $ 2,214,896 $ 2,234,883 Collateralized loan obligations 2,813,660 2,517,309 Senior unsecured notes 663,395 662,843 Convertible senior unsecured notes, net 269,452 267,973 Junior subordinated notes to subsidiary trust 141,839 141,656 issuing preferred securitiesDue to related party 1,579 2,365 Due to borrowers 80,082 89,325 Allowance for loss-sharing obligations 65,893 64,303 Other liabilities 209,371 197,644 Total liabilities 6,460,167 6,178,301 Equity: Arbor Realty Trust, Inc. stockholders' equity: Preferred stock, cumulative, redeemable, $0.01 par value: 100,000,000 shares authorized;special voting preferred shares; 17,560,633 shares issued and outstanding; 8.25%Series A, $38,788 aggregate liquidation preference; 1,551,500 shares issued andoutstanding; 7.75% Series B, $31,500 aggregate liquidation preference; 1,260,000shares issued and outstanding; 8.50% Series C, $22,500 aggregate liquidationpreference; 900,000 shares issued and outstanding 89,472 89,472 Common stock, $0.01 par value: 500,000,000 shares authorized; 133,690,060and 123,181,173 shares issued and outstanding, 1,337 1,232 respectivelyAdditional paid-in capital 1,473,120 1,317,109 Accumulated deficit (35,498 ) (63,442 )Total Arbor Realty Trust, Inc. stockholders? 1,528,431 1,344,371 equity Noncontrolling interest 142,261 138,314 Total equity 1,670,692 1,482,685 Total liabilities and equity $ 8,130,859 $ 7,660,986



ARBOR REALTY TRUST, INC. AND SUBSIDIARIES Statement of Income Segment Information - (Unaudited)(in thousands) Quarter Ended March 31, 2021 Structured Agency Other / Business Business Eliminations Consolidated ^(1) Interest income $ 83,210 $ 7,934 $ - $ 91,144 Interest expense 38,224 3,960 - 42,184 Net interest 44,986 3,974 - 48,960 income Other revenue: Gain on sales,including fee-based - 28,867 - 28,867 services, netMortgage servicing - 36,936 - 36,936 rightsServicing revenue - 29,740 - 29,740 Amortization of MSRs - (14,204 ) - (14,204 )Loss on derivative - (3,220 ) - (3,220 )instruments, netOther income, net 681 - - 681 Total other 681 78,119 - 78,800 revenue Other expenses: Employee compensation 11,577 31,397 - 42,974 and benefitsSelling and 4,513 6,305 - 10,818 administrativeProperty operating 143 - - 143 expensesDepreciation and 582 1,173 - 1,755 amortizationProvision for losssharing (net of - 1,652 - 1,652 recoveries)Provision for creditlosses (net of (1,029 ) (46 ) - (1,075 )recoveries) Total other 15,786 40,481 - 56,267 expenses Income beforeextinguishment of debt, sale of realestate, income fromequity affiliates, 29,881 41,612 - 71,493 and income taxes Loss onextinguishment of (1,370 ) - - (1,370 )debtGain on sale of real - 1,228 - 1,228 estateIncome from equity 22,251 - - 22,251 affiliatesProvision for income (4,983 ) (7,509 ) - (12,492 )taxes Net income 45,779 35,331 - 81,110 Preferred stock 1,888 - - 1,888 dividendsNet incomeattributable to - - 9,743 9,743 noncontrollinginterestNet incomeattributable to $ 43,891 $ 35,331 $ (9,743 ) $ 69,479 common stockholders ^(1) Includes certain income or expenses not allocated to the two reportablesegments. Amount reflects income attributable to the noncontrolling interestholders.



ARBOR REALTY TRUST, INC. AND SUBSIDIARIES Balance Sheet Segment Information - (Unaudited)(in thousands) March 31, 2021 Structured Agency Consolidated Business BusinessAssets: Cash and cash equivalents $ 66,981 $ 193,247 $ 260,228Restricted cash 259,830 12,209 272,039Loans and investments, net 6,070,337 - 6,070,337Loans held-for-sale, net - 613,542 613,542Capitalized mortgage servicing - 406,980 406,980rights, netSecurities held-to-maturity, net - 92,860 92,860Investments in equity affiliates 104,406 - 104,406Goodwill and other intangible 12,500 91,778 104,278assetsOther assets 140,187 66,002 206,189Total assets $ 6,654,241 $ 1,476,618 $ 8,130,859 Liabilities: Debt obligations $ 5,564,919 $ 538,323 $ 6,103,242Allowance for loss-sharing - 65,893 65,893obligationsOther liabilities 184,476 106,556 291,032Total liabilities $ 5,749,395 $ 710,772 $ 6,460,167

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES Reconciliation of Distributable Earnings to GAAP Net Income (Loss) -(Unaudited)($ in thousands?except share and per share data)

Quarter Ended March 31, 2021 2020 Net income (loss) attributable to $ 69,479 $ (59,310 )common stockholders Adjustments: Net income (loss) attributable to 9,743 (10,934 )noncontrolling interestIncome from mortgage servicing rights (36,936 ) (21,934 )Deferred tax provision (benefit) 4,486 (19,904 )Amortization and write-offs of MSRs 18,032 17,741 Depreciation and amortization 2,700 2,958 Loss on extinguishment of debt 1,370 1,954 Provision for credit losses, net (277 ) 75,680 Loss on derivative instruments, net 3,220 50,731 Stock-based compensation 3,330 3,517 Distributable earnings ^(1) $ 75,147 $ 40,499 Diluted distributable earnings per $ 0.52 $ 0.31 share ^(1) Diluted weighted average shares 143,958,433 131,217,199 outstanding ^(1) ^(1) Amounts are attributable to common stockholders and OP Unit holders. TheOP Units are redeemable for cash, or at the Company's option for shares of theCompany's common stock on a one-for-one basis.The Company is presenting distributable earnings because management believes itis an important supplemental measure of the Company's operating performance andis useful to investors, analysts and other parties in the evaluation of REITsand their ability to provide dividends to stockholders. Dividends are one ofthe principal reasons investors invest in REITs. To maintain REIT status, REITsare required to distribute at least 90% of their REIT-taxable income. TheCompany considers distributable earnings in determining its quarterly dividendand believes that, over time, distributable earnings is a useful indicator ofthe Company's dividends per share.The Company defines distributable earnings as net income (loss) attributable tocommon stockholders computed in accordance with GAAP, adjusted for accountingitems such as depreciation and amortization (adjusted for unconsolidated jointventures), non-cash stock-based compensation expense, income from MSRs,amortization and write-offs of MSRs, gains/losses on derivative instrumentsprimarily associated with Private Label loans not yet sold and securitized, thetax impact on cumulative gains/losses on derivative instruments associated withPrivate Label loans sold during the periods presented, changes in fair value ofGSE-related derivatives that temporarily flow through earnings, deferred tax(benefit) provision, CECL provisions for credit losses (adjusted for realizedlosses as described below) and amortization of the convertible senior notesconversion option. The Company also adds back one-time charges such asacquisition costs and one-time gains/losses on the early extinguishment ofdebt.The Company reduces distributable earnings for realized losses in the periodmanagement determines that a loan is deemed nonrecoverable. Loans are deemednonrecoverable upon the earlier of: (i) when the loan receivable is settled(i.e. when the loan is repaid, or in the case of foreclosure, when theunderlying asset is sold); or (ii) when management determines that it is nearlycertain that all amounts due will not be collected. The realized loss amount isequal 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'scash flows from operating activities (determined in accordance with GAAP) or ameasure of its liquidity, nor is it entirely indicative of funding theCompany's cash needs, including its ability to make cash distributions. TheCompany's calculation of distributable earnings may be different from thecalculations used by other companies and, therefore, comparability may belimited.