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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 9, 2005 (May 9, 2005)
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Arbor Realty Trust, Inc.
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(Exact name of registrant as specified in its charter)
Maryland 001-32136 20-0057959
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
333 Earle Ovington Boulevard, Suite 900 Uniondale, New York 11553
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(Address of principal executive offices) (Zip Code)
(516) 832-8002
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(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
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Arbor Realty Trust, Inc.
Current Report on Form 8-K
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On May 9, 2005, Arbor Realty Trust, Inc. issued a press release announcing
its earnings for the three months ended May 9, 2005, a copy of which is attached
hereto as Exhibit 99.1.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
Exhibit
Number Description
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99.1 Press Release, dated May 9, 2005.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: May 9, 2005 ARBOR REALTY TRUST, INC.
By: /s/ Frederick C. Herbst
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Name: Frederick C. Herbst
Title: Chief Financial Officer
EXHIBIT INDEX
Exhibit Number
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99.1 Press Release, dated May 9, 2005.
Exhibit 99.1
Arbor Realty Trust Reports First Quarter 2005 Results
First Quarter Highlights:
- Net income increased 213% to $9.7 million from 1Q04
- Earnings per share of $0.58 basic and diluted
- New loan/investment originations of $244 million
- Increased quarterly dividend to $0.55 per share, up 17% from 4Q04
UNIONDALE, N.Y., May 9 /PRNewswire-FirstCall/ -- Arbor Realty Trust, Inc.
(NYSE: ABR), a real estate investment trust focused on the business of investing
in real estate related bridge and mezzanine loans, preferred and direct equity
investments, mortgage-related securities and other real estate related assets,
today announced financial results for the quarter ended March 31, 2005. Arbor
reported net income for the quarter of $9.7 million, or $0.58 per basic and
diluted common share, compared to net income for the quarter ended March 31,
2004 of $3.1 million, or $0.38 per basic and diluted common share.
"We are very pleased to report another quarter of record earnings," said
Ivan Kaufman, Chairman and Chief Executive Officer of Arbor. "Arbor's financial
results for the first quarter reflect the progress we have made in all facets of
our business. While our portfolio continues to grow and we have made some very
effective investments, we are particularly pleased with the progress we made
this quarter in diversifying and stabilizing our financing sources. We believe
these improvements will serve us well in the future. Our success this quarter
reflects solid execution of our business plan and management's unwavering
commitment to enhancing shareholder value."
During the quarter, Arbor originated eleven loans and investments totaling
$244 million. "We have experienced the highest volume of new loans this quarter,
surpassing all previous quarters in our operating history," said Mr. Kaufman.
"Our production sources and pipeline are strong, but we are aware the market is
becoming increasingly competitive."
Total revenues for the quarter ended March 31, 2005 were $23.5 million, an
increase of 187% from the first quarter of 2004.
At March 31, 2005, the net balance in the loan and investment portfolio was
$871 million. The average balance of the loan and investment portfolio during
the first quarter was $826 million and the average yield on these assets for the
quarter was 11.07%.
Arbor's investments in mortgage-related securities had a weighted average
balance in the first quarter of $44.7 million and an average yield of 2.36%.
These assets were financed by borrowings with a weighted average balance in the
quarter of $42.8 million and an average cost of 2.73%.
Interest expense for the quarter was $8.3 million, an increase of 217% from
the first quarter of 2004. This increase reflects increased average borrowings
during the quarter as well as increased interest rates. The average balance of
debt financing on the loan and investment portfolio during the quarter was $581
million and the average cost of these borrowings was 5.54%.
For the quarter, Arbor's manager, Arbor Commercial Mortgage, LLC, earned
$1.0 million of incentive compensation, representing 25% of the amount by which
earnings for the four most recent quarters exceeded a 9.5% return on equity, as
described in the management agreement with Arbor's manager. Arbor Commercial
Mortgage intends to exercise its option to receive the entire amount of its
incentive compensation in shares of Arbor's common stock.
Financing Activity
Mr. Kaufman commented, "We have made significant progress in diversifying
our financing sources since the beginning of the year. With the addition of a
$305 million CDO debt facility, a new $50 million secured financing facility and
the issuance of $27 million of long-term junior subordinated notes, we believe
we are well positioned to finance future growth of the portfolio." As of March
31, 2005, Arbor's financing facilities for the loan and investment portfolio
totaled approximately $950 million and borrowings outstanding under such
facilities were $664 million.
In April, Arbor issued an additional $51 million of long-term junior
subordinated notes, further enhancing its financing sources. Mr. Kaufman
commented, "We believe these long term subordinated notes is a preferable
alternative to raising additional equity at this time, thereby helping us
achieve our objective of preserving and enhancing shareholder value. We believe
the borrowing capacity within our financing facilities is adequate to support
continued growth in the portfolio and enhance shareholder returns."
Portfolio Activity
During the first quarter of 2005, we originated eleven new loans and
investment commitments totaling $244 million. Of the new loans and investments,
six were mezzanine loans totaling $128 million, two were bridge loans totaling
$60 million, two were junior participating interests totaling $50 million and
one was a preferred equity investment of $6 million.
During the quarter, approximately $211 million of loans paid off. Of this
amount, $110 million were loans on condominium conversion projects that were
completed, $56 million were loans on properties that were either sold or
refinanced outside of Arbor, and $45 million were loans refinanced within
Arbor's portfolio.
At March 31, 2005, the loan and investment portfolio unpaid principal
balance was $875 million with a weighted average current interest pay rate of
8.82%. At the same date, advances on financing facilities pertaining to the loan
and investment portfolio totaled $664 million, with a weighted average current
interest rate of 5.10%.
The loan and investment portfolio continues to perform according to terms
and there have been no defaults. Arbor continues to seek loans and investments
that will generate superior risk-adjusted returns with a long-term objective of
capital preservation and earnings stability in varying interest rate and credit
cycles.
Dividend
As previously disclosed, a dividend of $0.55 per share for the quarter ended
March 31, 2005 will be paid on May 15, 2005 to shareholders of record on April
30, 2005.
Annual Meeting
Arbor Realty Trust's 2005 Annual Meeting will be held on Wednesday, May 25,
2005 at 1:00 pm EDT. The meeting will be held at the Teleconference Center on
the lower level of 333 Earle Ovington Blvd., Uniondale, New York.
Earnings Conference Call
Management will host a conference call today at 10:00 a.m. EDT. A live
webcast of the conference call will be available online at
http://www.arborrealtytrust.com. Web participants are encouraged to go to
Arbor's Web site at least 15 minutes prior to the start of the call to register,
download and install any necessary audio software. Listening to the webcast
requires speakers and RealPlayer(TM) software, downloadable without charge at
http://www.real.com. Those without Web access should access the call
telephonically at least ten minutes prior to the conference call. The dial-in
numbers are (800) 329-9097 for domestic callers and (617) 614-4929 for
international callers. The participant passcode for both is 64410076.
After the live webcast, the call will remain available on Arbor's Web site,
http://www.arborrealtytrust.com through June 9, 2005. In addition, a telephonic
replay of the call will be available until May 16, 2005. The replay dial-in
number is (888) 286-8010 for domestic callers and (617) 801-6888. Please use
passcode: 81524132.
About Arbor Realty Trust, Inc.
Arbor Realty Trust, Inc. is a real estate investment trust which invests in
a diversified portfolio of multi-family and commercial real estate related
bridge and mezzanine loans, preferred equity investments, mortgage related
securities and other real estate related assets. Arbor commenced operations in
July 2003 and conducts substantially all of its operations through its operating
partnership, Arbor Realty Limited Partnership and its subsidiaries. Arbor is
externally managed and advised by Arbor Commercial Mortgage, LLC, a national
commercial real estate finance company operating through 15 offices in the US
that specializes in debt and equity financing for multi-family and commercial
real estate.
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, continued ability to source new investments, changes in interest
rates and/or credit spreads, changes in the real estate markets, and other risks
detailed in the Arbor's Annual Report on Form 10-K for the year ended December
31, 2004 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.
Contacts:
Arbor Realty Trust, Inc.
Rick Herbst, Chief Financial Officer
516-832-7408
rick.herbst@thearbornet.com
Investors:
Stephanie Carrington/ Denise Roche
The Ruth Group
646-536-7017 / 7008
scarrington@theruthgroup.com
droche@theruthgroup.com
Media:
Bonnie Habyan, SVP of Marketing
516-229-6615
bonnie.habyan@thearbornet.com
Arbor Realty Trust, Inc. and Subsidiaries
Consolidated Statements of Operations (unaudited)
Quarter Ended March 31,
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2005 2004
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Revenues:
Interest income $ 23,121,158 $ 8,163,391
Other income 387,798 21,104
Total revenues 23,508,956 8,184,495
Expenses:
Interest expense 8,326,153 2,623,893
Employee compensation and benefits 1,154,209 613,306
Stock based compensation 92,027 114,201
Selling and administrative 845,879 244,311
Management fee - incentive 1,021,132 -
Management fee - base 609,186 293,118
Total expenses 12,048,586 3,888,829
Income before minority interest and
income from equity affiliates 11,460,370 4,295,666
Income from equity affiliates 446,997 -
Income before minority interest 11,907,367 4,295,666
Income allocated to minority
interest 2,201,726 1,191,339
Net income $ 9,705,641 $ 3,104,327
Basic earnings per common share $ 0.58 $ 0.38
Diluted earnings per common share $ 0.58 $ 0.38
Arbor Realty Trust, Inc. and Subsidiaries
Consolidated Balance Sheets
March 31, 2005 December 31, 2004
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(unaudited) (audited)
Assets:
Cash $ 29,271,330 $ 6,401,701
Restricted Cash 72,873,350 -
Loans and investments, net 863,307,608 831,783,364
Related party loans, net 7,749,538 7,749,538
Available-for-sale securities, at
fair value 43,351,909 46,582,592
Investment in equity affiliates 13,549,920 5,254,733
Other assets 23,852,458 14,523,249
Total assets $ 1,053,956,113 $ 912,295,177
Liabilities and stockholder's equity:
Repurchase agreements $ 290,073,891 $ 409,109,372
Collateralized debt obligations 305,319,000 -
Notes payable 109,941,000 165,771,447
Due to related party 7,374,360 158,503
Due to borrowers 5,184,110 8,587,070
Other liabilities 5,797,868 5,665,881
Total liabilities 723,690,229 589,292,273
Minority interest 60,782,133 60,249,731
Commitments and contingencies - -
Stockholder's equity:
Preferred stock, $0.01 par value:
100,000,000 shares authorized;
3,776,069 shares issued and outstanding 37,761 37,761
Common stock, $0.01 par value:
500,000,000 shares authorized;
16,741,122 and 16,467,218 shares
issued and outstanding, respectively 167,411 164,672
Additional paid-in capital 258,997,497 254,427,982
Retained earnings 10,761,064 8,813,138
Deferred compensation (164,673) (160,780)
Accumulated other comprehensive loss (315,309) (529,600)
Total stockholder's equity 269,483,751 262,753,173
Total liabilities and
stockholder's equity $ 1,053,956,113 $ 912,295,177
SOURCE Arbor Realty Trust, Inc.
-0- 05/09/2005
/CONTACT: Rick Herbst, Chief Financial Officer of Arbor Realty Trust, Inc.,
+1-516-832-7408, rick.herbst@thearbornet.com; or Investors, Stephanie
arrington, +1-646-536-7017, scarrington@theruthgroup.com or Denise Roche,
+1-646-536-7008, droche@theruthgroup.com, both of The Ruth Group; or Media,
Bonnie Habyan, SVP of Marketing of
Arbor Realty Trust, Inc., +1-516-229-6615, bonnie.habyan@thearbornet.com /
/Web Site: http://www.arborrealtytrust.com /
