GlobeNewswire Inc | Oct 29, 2021 08:00AM EDT

October 29, 2021

Company Highlights:

-- Diversified, annuity-based operating platform with a multifamily focus that continues to produce strong distributable earnings and dividends in all cycles GAAP net income of $0.51 and distributable earnings of $0.47 per diluted common share1Raised cash dividend on common stock to $0.36 per share, our sixth consecutive quarterly increaseRaised 414 million of accretive growth capital: $270 million from issuance of 4.50% senior unsecured notes due in 2026$144 million from offering of 6.25% Series E preferred stock

Structured Business:

-- Segment income of $48.1 million -- Record loan originations of $2.47 billion -- Structured loan portfolio of over $9 billion on growth of 24% -- Closed a $1.50 billion collateralized securitization vehicle, our largest to date

Agency Business:

-- Segment income of $33.1 million -- Loan originations of $1.80 billion and a servicing portfolio of over $26 billion

Recent Developments:

-- Raised an additional $201 million of accretive growth capital through the issuance of 6.25% Series F preferred stock -- Closed our 3rd private label securitization totaling $535 million

UNIONDALE, N.Y., Oct. 29, 2021 (GLOBE NEWSWIRE) -- Arbor Realty Trust, Inc. (NYSE: ABR), today announced financial results for the third quarter ended September 30, 2021. Arbor reported net income for the quarter of $72.8 million, or $0.51 per diluted common share, compared to net income of $82.0 million, or $0.72 per diluted common share for the quarter ended September 30, 2020. Distributable earnings for the quarter was $75.7 million, or $0.47 per diluted common share, compared to $67.1 million, or $0.50 per diluted common share for the quarter ended September 30, 2020.1

Agency Business

Loan Origination Platform

Agency Loan Volume (in thousands) Quarter Ended September 30, 2021 June 30, 2021Fannie Mae $ 719,730 $ 637,494Private Label 625,176 377,184Freddie Mac 307,664 155,914FHA 84,430 130,764SFR-Fixed Rate 67,227 11,996Total Originations $ 1,804,227 $ 1,313,352 Total Loan Sales $ 1,006,958 $ 1,482,110 Total Loan Commitments $ 1,856,474 $ 1,194,344

For the quarter ended September 30, 2021, the Agency Business generated revenues (excluding gains and losses on derivative instruments) of $79.7 million, compared to $91.2 million for the second quarter of 2021. Gain on sales, including fee-based services, net was $16.3 million for the quarter, reflecting a margin of 1.62%, compared to $19.1 million and 1.85% for the second quarter of 2021, excluding $449.9 million of private label loans securitized. Income from mortgage servicing rights was $32.5 million for the quarter, reflecting a rate of 1.75% as a percentage of loan commitments, compared to $26.3 million and 2.20% for the second quarter of 2021.

At September 30, 2021, loans held-for-sale was $1.27 billion which was primarily comprised of unpaid principal balances totaling $1.26 billion, with financing associated with these loans totaling $1.10 billion.

In October 2021, the Company closed its third private label securitization totaling $535.0 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$47.5 million, in satisfaction of credit risk retention requirements.

Fee-Based Servicing Portfolio

The Companys fee-based servicing portfolio totaled $26.21 billion at September 30, 2021 and excludes private label loans originated that were not yet securitized. Servicing revenue, net was $20.1 million for the quarter and consisted of servicing revenue of $35.0 million, net of amortization of mortgage servicing rights totaling $14.9 million.

Fee-Based Servicing Portfolio ($ in thousands) As of September 30, 2021 As of June 30, 2021 Wtd. Wtd. Avg. Wtd. Wtd. Avg. UPB Avg. Life (in UPB Avg. Life (in Fee years) Fee years)Fannie $ 19,271,527 0.532 % 8.4 $ 19,191,969 0.532 % 8.3MaeFreddie 4,726,587 0.281 % 9.8 4,708,457 0.285 % 9.8MacPrivate 1,176,391 0.200 % 8.8 1,176,627 0.200 % 9.0LabelFHA 933,519 0.156 % 21.4 882,899 0.157 % 21.0SFR-Fixed 104,094 0.200 % 5.7 75,103 0.200 % 5.9RateTotal $ 26,212,118 0.457 % 9.1 $ 26,035,055 0.459 % 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 $34.4 million for the fair value of the guarantee obligation undertaken at September 30, 2021. The Company recorded a $3.2 million reversal of provision for loss sharing associated with CECL for the third quarter of 2021. At September 30, 2021, the Companys total CECL allowance for loss-sharing obligations was $28.4 million, representing 0.15% of the Fannie Mae servicing portfolio.

Structured Business

Portfolio and Investment Activity

-- Strong growth in the portfolio of $1.78 billion, or 24.1% -- Originated 118 loans totaling $2.47 billion, consisted primarily of multifamily bridge loans totaling $2.37 billion -- Payoffs and pay downs on 54 loans totaling $567.9 million -- Committed to fund one $17.6 million single-family rental build-to-rent loan

At September 30, 2021, the loan and investment portfolios unpaid principal balance, excluding loan loss reserves, was $9.17 billion, with a weighted average current interest pay rate of 4.56%, compared to $7.39 billion and 4.85% at June 30, 2021. Including certain fees earned and costs associated with the loan and investment portfolio, the weighted average current interest pay rate was 4.97% at September 30, 2021, compared to 5.33% at June 30, 2021.

The average balance of the Companys loan and investment portfolio during the third quarter of 2021, excluding loan loss reserves, was $8.18 billion with a weighted average yield of 5.55%, compared to $6.61 billion and 5.85% for the second quarter of 2021. The decrease in average yield was primarily due to lower rates on originations when compared to runoff.

During the third quarter of 2021, the Company recorded a $4.1 million reversal of provisions for loan losses associated with CECL, which includes a $1.1 million loan loss recovery. At September 30, 2021, the Companys total allowance for loan losses was $131.5 million. The Company had six non-performing loans with a carrying value of $55.6 million, before related loan loss reserves of $2.6 million, compared to eight loans with a carrying value of $84.0 million, before related loan loss reserves of $6.5 million as of June 30, 2021.

Financing Activity

The Company completed its largest collateralized securitization vehicle to date totaling$1.50 billionof real estate related assets and cash. Investment grade-rated notes totaling$1.24 billionwere issued, and the Company retained subordinate interests in the issuing vehicle of$262.5 million. The facility has a two-and-a-half-year asset replenishment period and an initial weighted average interest rate of 1.31% over LIBOR, excluding fees and transaction costs.

The balance of debt that finances the Companys loan and investment portfolio at September 30, 2021 was $8.58 billion with a weighted average interest rate including fees of 2.64% as compared to $6.41 billion and a rate of 2.79% at June 30, 2021. The average balance of debt that finances the Companys loan and investment portfolio for the third quarter of 2021 was $7.31 billion, as compared to $5.94 billion for the second quarter of 2021. The average cost of borrowings for the third quarter of 2021 was 2.76%, compared to 2.89% for the second quarter of 2021.

Capital Markets

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

The Company issued $270.0 million of 4.50% senior unsecured notes in a private placement, generating net proceeds of $265.8 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 completed a public offering of 5.75 million shares of its 6.25% Series E cumulative redeemable preferred stock, including the underwriters exercise of their over-allotment option, generating net proceeds of $139.1 million. The Company used these proceeds to make investments relating to its business and for general corporate purposes.

In October 2021, the Company completed a public offering of 8.05 million shares of its 6.25% Series F fixed-to-floating cumulative redeemable preferred stock, including the underwriters exercise of their over-allotment option, generating net proceeds of $194.8 million. The Company is using these proceeds to make investments relating to its business and for general corporate purposes.

Dividends

The Company announced today that its Board of Directors has declared a quarterly cash dividend of $0.36 per share of common stock for the quarter ended September 30, 2021, the Companys sixth consecutive quarterly increase, representing a 20% increase over that time span. The dividend is payable on November 30, 2021 to common stockholders of record on November 15, 2021. The ex-dividend date is November 12, 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.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 (866) 342-8591 for domestic callers and (203) 518-9797 for international callers. Please use participant passcode ABRQ321 when prompted by the operator.

A telephonic replay of the call will be available until November 5, 2021. The replay dial-in numbers are (800) 839-9305 for domestic callers and (402) 220-6094 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:Arbor Realty Trust, Inc.Paul Elenio, Chief Financial Officer 516-506-4422pelenio@arbor.com



ARBOR REALTY TRUST, INC. AND SUBSIDIARIES Consolidated Statements of Income - (Unaudited)($ in thousands?except share and per share data) Quarter Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Interest $ 125,480 $ 81,701 $ 321,772 $ 253,307 incomeInterest 55,560 37,888 144,122 129,172 expense Net interest 69,920 43,813 177,650 124,135 income Other revenue: Gain on sales,including 16,334 19,895 86,102 60,566 fee-basedservices, netMortgageservicing 32,453 42,357 95,688 96,708 rightsServicing 20,088 13,348 50,939 40,156 revenue, netPropertyoperating - 1,033 - 3,976 incomeLoss onderivative (1,492 ) (753 ) (7,320 ) (58,852 )instruments,netOther income, 2,195 1,050 4,140 3,404 net Total other 69,578 76,930 229,549 145,958 revenue Other expenses:Employeecompensation 41,973 32,962 128,647 101,652 and benefitsSelling and 11,757 9,356 33,707 29,013 administrativePropertyoperating 149 1,300 421 4,778 expensesDepreciationand 1,807 1,922 5,349 5,830 amortizationProvision forloss sharing (3,272 ) (2,227 ) (1,070 ) 21,706 (net ofrecoveries)Provision forcredit losses (3,799 ) (7,586 ) (12,689 ) 59,510 (net ofrecoveries) Total other 48,615 35,727 154,365 222,489 expenses Income beforeextinguishmentof debt, sale of realestate, incomefrom equityaffiliates,and income 90,883 85,016 252,834 47,604 taxes

Loss onextinguishment - - (1,370 ) (3,546 )of debt(Loss) gain onsale of real - (1,868 ) 1,228 (1,868 )estateIncome fromequity 5,086 32,358 32,095 56,758 affiliatesProvision for (9,905 ) (17,785 ) (33,356 ) (15,493 )income taxes Net income 86,064 97,721 251,431 83,455 Preferredstock 4,913 1,888 13,216 5,665 dividendsNet incomeattributableto 8,347 13,836 26,806 11,012 noncontrollinginterestNet incomeattributable $ 72,804 $ 81,997 $ 211,409 $ 66,778 to commonstockholders Basic earningsper common $ 0.51 $ 0.72 $ 1.57 $ 0.60 shareDilutedearnings per $ 0.51 $ 0.72 $ 1.56 $ 0.59 common share Weightedaverage shares outstanding: Basic 142,624,300 113,766,446 134,437,663 111,775,436 Diluted 160,270,905 133,997,087 152,691,461 132,401,315 Dividendsdeclared per $ 0.35 $ 0.31 $ 1.02 $ 0.91 common share



ARBOR REALTY TRUST, INC. AND SUBSIDIARIES Consolidated Balance Sheets($ in thousands?except share and per share data) September December 31, 30, 2021 2020 (Unaudited) Assets: Cash and cash equivalents $ 380,730 $ 339,528 Restricted cash 569,928 197,470 Loans and investments, net (allowance for credit 8,993,790 5,285,868 losses of $131,534 and $148,329, respectively)Loans held-for-sale, net 1,274,234 986,919 Capitalized mortgage servicing rights, net 417,283 379,974 Securities held-to-maturity, net (allowance forcredit losses of $1,761 and $1,644, 112,735 95,524 respectively)Investments in equity affiliates 91,846 74,274 Due from related party 12,664 12,449 Goodwill and other intangible assets 101,933 105,451 Other assets 214,441 183,529 Total assets $ 12,169,584 $ 7,660,986 Liabilities and Equity: Credit and repurchase facilities $ 3,399,711 $ 2,234,883 Collateralized loan obligations 4,715,804 2,517,309 Senior unsecured notes 1,102,578 662,843 Convertible senior unsecured notes, net 258,001 267,973 Junior subordinated notes to subsidiary trust 142,192 141,656 issuing preferred securitiesDue to related party 4,384 2,365 Due to borrowers 93,544 89,325 Allowance for loss-sharing obligations 62,828 64,303 Other liabilities 255,135 197,644 Total liabilities 10,034,177 6,178,301 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, respectively: Special voting preferred shares, 16,325,095 and 17,560,633 shares 8.25% Series A, 0 and 1,551,500 shares 7.75% Series B, 0 and 1,260,000 shares 8.50% Series C, 0 and 900,000 shares 6.375% Series D, 9,200,000 and 0 shares 6.25% Series E, 5,750,000 and 0 shares 361,635 89,472 Common stock, $0.01 par value: 500,000,000 shares authorized, 143,007,036 and 123,181,173 shares issued and 1,430 1,232 outstanding, respectively Additional paid-in capital 1,635,134 1,317,109 Retained earnings (accumulated deficit) 10,674 (63,442 )Total Arbor Realty Trust, Inc. stockholders? 2,008,873 1,344,371 equity Noncontrolling interest 126,534 138,314 Total equity 2,135,407 1,482,685 Total liabilities and equity $ 12,169,584 $ 7,660,986



ARBOR REALTY TRUST, INC. AND SUBSIDIARIES Statement of Income Segment Information - (Unaudited)(in thousands) Quarter Ended September 30, 2021 Structured Agency Other / Business Business Eliminations Consolidated ^(1) Interest $ 114,710 $ 10,770 $ - $ 125,480 incomeInterest 50,823 4,737 - 55,560 expense Net interest 63,887 6,033 - 69,920 income Other revenue: Gain on sales,including - 16,334 - 16,334 fee-basedservices, netMortgageservicing - 32,453 - 32,453 rightsServicing - 34,960 - 34,960 revenueAmortization - (14,872 ) - (14,872 )of MSRsLoss onderivative - (1,492 ) - (1,492 )instruments,netOther income, 2,168 27 - 2,195 net Total other 2,168 67,410 - 69,578 revenue Other expenses:Employeecompensation 14,082 27,891 - 41,973 and benefitsSelling and 5,718 6,039 - 11,757 administrativePropertyoperating 149 - - 149 expensesDepreciationand 634 1,173 - 1,807 amortizationProvision forloss sharing - (3,272 ) - (3,272 )(net ofrecoveries)Provision forcredit losses (3,445 ) (354 ) - (3,799 )(net ofrecoveries) Total other 17,138 31,477 - 48,615 expenses Income beforeincome from equityaffiliates andincome taxes 48,917 41,966 - 90,883

Income fromequity 5,086 - - 5,086 affiliatesProvision for (622 ) (9,283 ) - (9,905 )income taxes Net income 53,381 32,683 - 86,064 Preferredstock 4,913 - - 4,913 dividendsNet incomeattributableto - - 8,347 8,347 noncontrollinginterestNet incomeattributable $ 48,468 $ 32,683 $ (8,347 ) $ 72,804 to 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) September 30, 2021 Structured Agency Consolidated Business BusinessAssets: Cash and cash equivalents $ 162,870 $ 217,860 $ 380,730Restricted cash 552,706 17,222 569,928Loans and investments, net 8,993,790 - 8,993,790Loans held-for-sale, net - 1,274,234 1,274,234Capitalized mortgage - 417,283 417,283servicing rights, netSecurities held-to-maturity, - 112,735 112,735netInvestments in equity 91,846 - 91,846affiliatesGoodwill and other intangible 12,500 89,433 101,933assetsOther assets 136,653 90,452 227,105Total assets $ 9,950,365 $ 2,219,219 $ 12,169,584 Liabilities: Debt obligations $ 8,515,801 $ 1,102,485 $ 9,618,286Allowance for loss-sharing - 62,828 62,828obligationsOther liabilities 225,088 127,975 353,063Total liabilities $ 8,740,889 $ 1,293,288 $ 10,034,177



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 September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Net incomeattributable $ 72,804 $ 81,997 $ 211,409 $ 66,778 to commonstockholders Adjustments: Net incomeattributableto 8,347 13,836 26,806 11,012 noncontrollinginterestIncome frommortgage (32,453 ) (42,357 ) (95,688 ) (96,708 )servicingrightsDeferred taxprovision 6,256 3,853 10,692 (5,172 )(benefit)Amortizationand write-offs 23,757 15,456 62,088 48,739 of MSRsDepreciationand 2,705 2,867 8,137 8,731 amortizationLoss onextinguishment - - 1,370 3,546 of debtProvision forcredit losses, (9,867 ) (11,137 ) (18,210 ) 79,144 netLoss onderivative 1,492 753 1,484 44,113 instruments,netStock-based 2,612 1,854 7,986 7,286 compensationLoss onredemption of - - 3,479 - preferredstock Distributable $ 75,653 $ 67,122 $ 219,553 $ 167,469 earnings ^(^1) Diluteddistributable $ 0.47 $ 0.50 $ 1.44 $ 1.26 earnings pershare ^(^1) Dilutedweightedaverage shares 160,270,905 133,997,087 152,691,461 132,401,315 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.