GlobeNewswire Inc | Jul 30, 2021 08:00AM EDT

July 30, 2021

Company Highlights:

-- Diversified operating platform with a multifamily focus that continues to produce strong distributable earnings and dividends in all cyclesGAAP net income of $0.51 and distributable earnings of $0.45 per diluted common share1Raised cash dividend on common stock to $0.35 per share, our fifth consecutive quarterly increaseRaised $440 million of accretive growth capital: $223 million from offering of 6.375% Series D preferred stock, using $93 million to redeem our Series A, B and C preferred stock (8.14% on a weighted-average basis)$172 million from issuance of 5.00% senior unsecured notes due in 2026$138 million through issuance of common sharesContinued focus on improving funding sources, increasing warehouse capacity$1.27 billionGAAP book value of$10.97, or $11.35 per common share adjusted for $61.0 million of CECL general reserves

Agency Business:

-- Segment income of $34.7 million -- Loan originations of $1.31 billion and a servicing portfolio of over $26 billion -- Closed our second private label securitization totaling $450 million

Structured Business:

-- Segment income of $43.1 million -- Portfolio growth of 18% on record loan originations of $1.84 billion -- Closed a $815 million collateralized securitization vehicle, our largest to date

UNIONDALE, N.Y., July 30, 2021 (GLOBE NEWSWIRE) -- Arbor Realty Trust, Inc. (NYSE: ABR), today announced financial results for the second quarter ended June 30, 2021. Arbor reported net income for the quarter of $69.1 million, or $0.51 per diluted common share, compared to net income of $44.1 million, or $0.40 per diluted common share for the quarter ended June 30, 2020. Distributable earnings for the quarter was $68.8 million, or $0.45 per diluted common share, compared to $59.8 million, or $0.45 per diluted common share for the quarter ended June 30, 2020.1

Agency Business

Loan Origination Platform

Agency Loan Volume (in thousands) Quarter Ended June 30, March 31, 2021 2021Fannie Mae $ 637,494 $ 1,063,983Private Label 377,184 152,454Freddie Mac 155,914 114,717FHA 130,764 66,480SFR-Fixed Rate 11,996 -Total Originations $ 1,313,352 $ 1,397,634 Total Loan Sales $ 1,482,110 $ 1,841,891 Total Loan Commitments $ 1,194,344 $ 1,460,135

For the quarter ended June 30, 2021, the Agency Business generated revenues (excluding gains and losses on derivative instruments) of $91.2 million, compared to $89.3 million for the first quarter of 2021. Gain on sales, including fee-based services, net was $40.9 million for the quarter, reflecting a margin of 2.76%, compared to $28.9 million and 1.57% for the first quarter of 2021. Income from mortgage servicing rights was $26.3 million for the quarter, reflecting a rate of 2.20% as a percentage of loan commitments, compared to $36.9 million and 2.53% for the first quarter of 2021.

At June 30, 2021, loans held-for-sale was $457.6 million which was primarily comprised of unpaid principal balances totaling $448.9 million, with financing associated with these loans totaling $391.8 million.

The Company closed its second private label securitization totaling $450.0 million. The Company originated and sold multifamily mortgage loans to the securitization and will be the primary servicer. The Company retained subordinate certificate interests in the securitization of$38.2 million, in satisfaction of credit risk retention requirements.

Fee-Based Servicing Portfolio

The Companys fee-based servicing portfolio totaled $26.04 billion at June 30, 2021, an increase of 2.3% from March 31, 2021, primarily the result of $1.31 billion of new agency loan originations, net of $806.1 million in portfolio runoff during the quarter. Servicing revenue, net was $15.3 million for the quarter and consisted of servicing revenue of $30.0 million, net of amortization of mortgage servicing rights totaling $14.7 million.

Fee-Based Servicing Portfolio ($ in thousands) As of June 30, 2021 As of March 31, 2021 Wtd. Wtd. Avg. Wtd. Wtd. Avg. UPB Avg. Life UPB Avg. Life Fee (in years) Fee (in years)Fannie Mae $ 19,191,969 0.532% 8.3 $ 19,073,504 0.528% 8.3Freddie 4,708,457 0.285% 9.8 4,795,228 0.283% 9.8MacPrivate 1,176,627 0.200% 9.0 726,918 0.200% 8.7LabelFHA 882,899 0.157% 21.0 796,133 0.160% 20.7SFR-Fixed 75,103 0.200% 5.9 63,299 0.200% 6.1RateTotal $ 26,035,055 0.459% 9.0 $ 25,455,082 0.460% 9.0

Loans sold under the Fannie Mae program contain an obligation to partially guarantee the performance of the loan (loss-sharing obligations), and includes $34.5 million for the fair value of the guarantee obligation undertaken at June 30, 2021. The Company recorded a $0.3 million reversal of provision for loss sharing associated with CECL for the second quarter of 2021. At June 30, 2021, the Companys total CECL allowance for loss-sharing obligations was $31.2 million, representing 0.16% of the Fannie Mae servicing portfolio.

Structured Business

Portfolio and Investment Activity

-- Strong growth in the portfolio of $1.12 billion, or 17.9% -- Originated 93 loans totaling $1.84 billion, consisted primarily of multifamily bridge loans totaling $1.73 billion -- Payoffs and pay downs on 36 loans totaling $662.9 million -- Committed to fund one $40.0 million single-family rental build-to-rent loan

At June 30, 2021, the loan and investment portfolios unpaid principal balance, excluding loan loss reserves, was $7.39 billion, with a weighted average current interest pay rate of 4.85%, compared to $6.26 billion and 5.06% at March 31, 2021. Including certain fees earned and costs associated with the loan and investment portfolio, the weighted average current interest pay rate was 5.33% at June 30, 2021, compared to 5.65% at March 31, 2021.

The average balance of the Companys loan and investment portfolio during the second quarter of 2021, excluding loan loss reserves, was $6.61 billion with a weighted average yield of 5.85%, compared to $5.89 billion and 5.72% for the first quarter of 2021. The increase in average yield was primarily due to interest received upon the sale of a loan, higher accelerated fees on loan payoffs, partially offset by lower rates on originations when compared to runoff in the second quarter as compared to the first quarter.

During the second quarter of 2021, the Company recorded an $8.3 million reversal of provisions for loan losses associated with CECL, which includes a $7.5 million loan loss recovery. At June 30, 2021, the Companys total allowance for loan losses was $138.4 million. The Company had eight non-performing loans with a carrying value of $84.0 million, before related loan loss reserves of $6.5 million, compared to seven loans with a carrying value of $60.3 million, before related loan loss reserves of $6.5 million as of March 31, 2021.

Financing Activity

The Company completed its largest collateralized securitization vehicle to date totaling$815.0 millionof real estate related assets and cash. Investment grade-rated notes totaling$674.4 millionwere issued, and the Company retained subordinate interests in the issuing vehicle of$140.6 million. The facility has a two-and-a-half-year asset replenishment period and an initial weighted average interest rate of 1.37% over LIBOR, excluding fees and transaction costs.

The balance of debt that finances the Companys loan and investment portfolio at June 30, 2021 was $6.41 billion with a weighted average interest rate including fees of 2.79% as compared to $5.62 billion and a rate of 2.90% at March 31, 2021. The average balance of debt that finances the Companys loan and investment portfolio for the second quarter of 2021 was $5.94 billion, as compared to $5.18 billion for the first quarter of 2021. The average cost of borrowings for the second quarter of 2021 was 2.89%, compared to 2.99% for the first quarter of 2021.

Capital Markets

The Company raised a significant amount of accretive growth capital primarily through the following transactions:

The Company completed a public offering of 9.2 million shares of its 6.375% Series D cumulative redeemable preferred stock, including the underwriters exercise of their over-allotment option, generating net proceeds of $222.6 million. The Company used $93.3 million of these proceeds to redeem its 8.25% Series A, 7.75% Series B and 8.50% Series C cumulative redeemable preferred stock. The remaining net proceeds are being used to make investments relating to its business and for general corporate purposes.

The Company issued $175.0 million 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 are being used to make investments and for general corporate purposes.

The Company issued 6.0 million shares of common stock in a public offering receiving net proceeds of $110.6 million. The proceeds are primarily being 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 $0.35 per share of common stock for the quarter ended June 30, 2021, the Companys fifth consecutive quarterly increase, representing a 12.9% increase from a year ago. The dividend is payable on August 31, 2021 to common stockholders of record on August 16, 2021. The ex-dividend date is August 13, 2021.

As previously announced, the Board of Directors has declared a cash dividend of $0.25677 per share on the Company's Series D cumulative redeemable preferred stock reflecting accrued dividends from the date of issuance, June 2, 2021 through July 29, 2021. The dividend is payable on July 30, 2021 to preferred stockholders of record on July 15, 2021.

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.comin 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) 876-9173 for domestic callers and (785) 424-1669 for international callers. Please use participant passcode ABRQ221 when prompted by the operator.

A telephonic replay of the call will be available until August 6, 2021. The replay dial-in numbers are (800) 839-3617 for domestic callers and (402) 220-2975 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. Arbors product platform also includes bridge, CMBS, mezzanine and preferred equity loans. 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 the last page of this release.

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

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES Consolidated Statements of Operations - (Unaudited)($ in thousands?except share and per share data) Quarter Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Interest $ 105,148 $ 83,080 $ 196,292 $ 171,606 incomeInterest 46,378 41,302 88,562 91,284 expense Net interest 58,770 41,778 107,730 80,322 income Other revenue: Gain on sales,including 40,901 26,366 69,768 40,671 fee-basedservices, netMortgageservicing 26,299 32,417 63,235 54,351 rightsServicing 15,315 13,506 30,850 26,809 revenue, netPropertyoperating - 751 - 2,943 incomeLoss onderivative (2,607 ) (7,368 ) (5,828 ) (58,099 )instruments,netOther income, 1,263 1,049 1,943 2,351 net Total other 81,171 66,721 159,968 69,026 revenue Other expenses:Employeecompensation 43,700 34,438 86,674 68,690 and benefitsSelling and 11,133 8,606 21,947 19,658 administrativePropertyoperating 129 1,035 272 3,478 expensesDepreciationand 1,788 1,961 3,543 3,908 amortizationProvision forloss sharing 549 2,395 2,201 23,932 (net ofrecoveries)Provision forcredit losses (7,815 ) 12,714 (8,890 ) 67,096 (net ofrecoveries) Total other 49,484 61,149 105,747 186,762 expenses Income (loss)beforeextinguishmentof debt, saleof real 90,457 47,350 161,951 (37,414 )estate, incomefrom equityaffiliates,and incometaxesLoss onextinguishment - (1,592 ) (1,370 ) (3,546 )of debtGain on sale - - 1,228 - of real estateIncome fromequity 4,759 20,408 27,010 24,401 affiliates(Provisionfor) benefit (10,959 ) (12,077 ) (23,451 ) 2,293 from incometaxes Net income 84,257 54,089 165,368 (14,266 )(loss) Preferredstock 6,414 1,888 8,303 3,777 dividendsNet income(loss)attributable to 8,717 8,110 18,459 (2,824 )noncontrollinginterestNet income(loss)attributable $ 69,126 $ 44,091 $ 138,606 $ (15,219 )to commonstockholders Basic earnings(loss) per $ 0.51 $ 0.40 $ 1.06 $ (0.14 )common shareDilutedearnings $ 0.51 $ 0.40 $ 1.06 $ (0.14 )(loss) percommon share Weightedaverage shares outstanding: Basic 135,262,197 110,745,572 130,276,499 110,768,992 Diluted 153,616,591 131,882,398 148,818,030 131,166,018 Dividendsdeclared per $ 0.34 $ 0.30 $ 0.67 $ 0.60 common share



ARBOR REALTY TRUST, INC. AND SUBSIDIARIES Consolidated Balance Sheets($ in thousands?except share and per share data) June 30, December 31, 2021 2020 (Unaudited) Assets: Cash and cash equivalents $ 215,658 $ 339,528 Restricted cash 249,090 197,470 Loans and investments, net (allowance for credit 7,213,915 5,285,868 losses of $138,447 and $147,300, respectively)Loans held-for-sale, net 457,647 986,919 Capitalized mortgage servicing rights, net 418,653 379,974 Securities held-to-maturity, net (allowance for 114,696 95,524 credit losses of $2,115 and $1,597, respectively)Investments in equity affiliates 86,253 74,274 Due from related party 11,084 12,449 Goodwill and other intangible assets 103,106 105,451 Other assets 190,698 183,529 Total assets $ 9,060,800 $ 7,660,986 Liabilities and Equity: Credit and repurchase facilities $ 2,015,188 $ 2,234,883 Collateralized loan obligations 3,484,088 2,517,309 Senior unsecured notes 836,074 662,843 Convertible senior unsecured notes, net 270,917 267,973 Junior subordinated notes to subsidiary trust 142,013 141,656 issuing preferred securitiesDue to related party 6,184 2,365 Due to borrowers 68,384 89,325 Allowance for loss-sharing obligations 65,645 64,303 Other liabilities 215,540 197,644 Total liabilities 7,104,033 6,178,301 Equity: Arbor Realty Trust, Inc. stockholders' equity: Preferred stock, cumulative, redeemable, $0.01par value: 100,000,000 shares authorized,specialvoting preferred shares - 16,352,233 and17,560,633 shares issued andoutstanding,respectively; 8.25% Series A,$38,788 aggregate liquidation preference - 0 and1,551,500shares issued and outstanding,respectively; 7.75% Series B, $31,500 aggregateliquidation shares issued and outstanding, 222,627 89,472 respectively; 7.75% Series B, $31,500 aggregateliquidationpreference - 0 and 1,260,000 sharesissued and outstanding, respectively; 8.50%Series C,$22,500 aggregate liquidationpreference - 0 and 900,000 shares issued andoutstanding,respectively; 6.375% Series D,$230,000 aggregate liquidation preference -9,200,000and 0 shares issued and outstanding,respectivelyCommon stock, $0.01 par value: 500,000,000 sharesauthorized - 141,738,609and 123,181,173 shares 1,417 1,232 issued and outstanding, respectivelyAdditional paid-in capital 1,620,898 1,317,109 Accumulated deficit (12,084 ) (63,442 )Total Arbor Realty Trust, Inc. stockholders? 1,832,858 1,344,371 equity Noncontrolling interest 123,909 138,314 Total equity 1,956,767 1,482,685 Total liabilities and equity $ 9,060,800 $ 7,660,986

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES Statement of Income Segment Information - (Unaudited)(in thousands) Quarter Ended June 30, 2021 Structured Agency Other / Business Business Eliminations Consolidated ^(1) Interest income $ 96,498 $ 8,650 $ - $ 105,148 Interest expense 42,748 3,630 - 46,378 Net interest 53,750 5,020 - 58,770 income Other revenue: Gain on sales,including - 40,901 - 40,901 fee-basedservices, netMortgage - 26,299 - 26,299 servicing rightsServicing - 29,982 - 29,982 revenueAmortization of - (14,667 ) - (14,667 )MSRsLoss onderivative - (2,607 ) - (2,607 )instruments, netOther income, 1,255 8 - 1,263 net Total other 1,255 79,916 - 81,171 revenue Other expenses: Employeecompensation and 11,907 31,793 - 43,700 benefitsSelling and 5,248 5,885 - 11,133 administrativePropertyoperating 129 - - 129 expensesDepreciation and 615 1,173 - 1,788 amortizationProvision forloss sharing - 549 - 549 (net ofrecoveries)Provision forcredit losses (8,333 ) 518 - (7,815 )(net ofrecoveries) Total other 9,566 39,918 - 49,484 expenses Income beforeincome from equityaffiliates, andincome taxes 45,439 45,018 - 90,457

Income fromequity 4,759 - - 4,759 affiliatesProvision for (682 ) (10,277 ) - (10,959 )income taxes Net income 49,516 34,741 - 84,257 Preferred stock 6,414 - - 6,414 dividendsNet incomeattributable to - - 8,717 8,717 noncontrollinginterestNet incomeattributable to $ 43,102 $ 34,741 $ (8,717 ) $ 69,126 commonstockholders ^(1) Includes certain income or expenses not allocated to the two reportablesegments. Amount reflects income attributableto the noncontrolling interestholders.



ARBOR REALTY TRUST, INC. AND SUBSIDIARIES Balance Sheet Segment Information - (Unaudited) (in thousands) June 30, 2021 Structured Agency Consolidated Business BusinessAssets: Cash and cash equivalents $ 40,353 $ 175,305 $ 215,658 Restricted cash 233,474 15,616 249,090 Loans and investments, net 7,213,915 - 7,213,915 Loans held-for-sale, net - 457,647 457,647 Capitalized mortgage servicing - 418,653 418,653 rights, netSecurities held-to-maturity, - 114,696 114,696 netInvestments in equity 86,253 - 86,253 affiliatesGoodwill and other intangible 12,500 90,606 103,106 assetsOther assets 124,328 77,454 201,782 Total assets $ 7,710,823 $ 1,349,977 $ 9,060,800 Liabilities: Debt obligations $ 6,356,490 $ 391,790 $ 6,748,280 Allowance for loss-sharing - 65,645 65,645 obligationsOther liabilities 178,934 111,174 290,108 Total liabilities $ 6,535,424 $ 568,609 $ 7,104,033

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, 2021 2020 2021 2020 Net income(loss)attributable $ 69,126 $ 44,091 $ 138,606 $ 15,219 to commonstockholders Adjustments: Net income(loss)attributable 8,717 8,110 18,459 (2,824 )tononcontrollinginterestIncome frommortgage (26,299 ) (32,417 ) (63,235 ) (54,351 )servicingrightsDeferred tax(benefit) (50 ) 10,879 4,436 (9,025 )provisionAmortizationand write-offs 20,299 15,542 38,331 33,283 of MSRsDepreciationand 2,733 2,906 5,432 5,863 amortizationLoss onextinguishment - 1,592 1,370 3,546 of debtProvision forcredit losses, (8,065 ) 14,602 (8,343 ) 90,281 net(Gain) loss onderivative (3,230 ) (7,371 ) (9 ) 43,360 instruments,netStock-based 2,044 1,915 5,375 5,432 compensationLoss onredemption of 3,479 - 3,479 - preferredstock Distributable $ 68,754 $ 59,849 $ 143,901 $ 100,346 earnings ^(1) Diluteddistributable $ 0.45 $ 0.45 $ 0.97 $ 0.77 earnings pershare ^(1) Dilutedweightedaverage shares 153,616,591 131,882,398 148,818,030 131,166,018 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 taxprovision (benefit), 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 of debtand redemption of preferred stock.

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.