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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):
MAY 6, 2004 (MAY 6, 2004)
ARBOR REALTY TRUST, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Maryland 001-32136 20-0057959
(STATE OR OTHER JURISDICTION (COMMISSION FILE NO.) (I.R.S. EMPLOYER
OF INCORPORATION OR IDENTIFICATION NUMBER)
ORGANIZATION)
333 Earle Ovington Boulevard, Suite 900
Uniondale, New York 11553
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)
(516) 832-8002
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
N/A
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF APPLICABLE)
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ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On May 6, 2004, Arbor Realty Trust, Inc. (the "Company") issued a press
release announcing its earnings for the quarterly period ended March 31, 2004, a
copy of which is attached hereto as Exhibit 99.1.
The information furnished pursuant to this Current Report on Form 8-K
(including the exhibits hereto) shall not be considered "filed" under the
Securities Exchange Act of 1934, as amended, nor shall it be incorporated by
reference into future filings by the Company under the Securities Act of 1933,
as amended, or under the Securities Exchange Act of 1934, as amended, unless the
Company expressly sets forth in such future filing that such information is to
be considered "filed" or incorporated by reference therein.
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.
ARBOR REALTY TRUST, INC.
By: /s/ Frederick C. Herbst
-------------------------------
Name: Frederick C. Herbst
Title: Chief Financial Officer
Dated: May 6, 2004
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
99.1 Press Release, dated May 6, 2004, of Arbor Realty Trust, Inc.
Exhibit 99.1
Arbor Realty Trust Announces First Quarter 2004 Results
- Net income of $0.38 per share, up 33% from 4Q03
- Return on equity of 11.2%
- New loan fundings of $193.2 million
- Total loans of $447 million at end of 1Q04, up 48% from December 31,
2003
- Initial public offering in April 2004 raised net proceeds of $125.4
million
- Paid quarterly dividend on March 26 of $0.38 per share
UNIONDALE, N.Y., May 6 /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 equity
investments, mortgage related securities and other real estate related assets,
today announced financial results for the period ended March 31, 2004. Arbor
reported net income for the quarter ended March 31, 2004 of $3.1 million, or
$0.38 per common share. Return on equity, on an annualized basis, was 11.2%.
Ivan Kaufman, Chairman and Chief Executive Officer, commented, "We are
pleased with our financial performance in the first quarter. Our results
reflect the successful deployment of funds from last July's private placement.
The recent completion of our initial public offering further strengthens our
financial position."
"The origination volume in the first quarter is our highest quarterly
volume since we commenced operations and our pipeline continues to be strong.
We have expanded and diversified our product offering and are encouraged by
the strong appetite for our products. We are confident that the capital we
raised from our initial public offering, which was initially used to pay down
debt, will be redeployed to fund future originations," concluded Mr. Kaufman.
Total revenues for the quarter ended March 31, 2004 were $8.2 million, an
increase of 49% from the previous quarter. Interest income for the first
quarter was $8.2 million, an increase of 53% from the previous quarter. The
balance in the loan portfolio increased from $322.0 million at the beginning
of the quarter to $477.7 million by quarter end. The average balance of the
loan and investment portfolio was $406.9 million during the quarter and the
average yield on these assets was 7.94%.
Interest expense for the quarter was $2.6 million, an increase of 177%
from the previous quarter. This growth reflects increased leverage during the
quarter, as more funds from the July 1, 2003 private placement were deployed.
The average balance of debt financing was $250.2 million during the quarter
and the average cost of these borrowings was 4.15%.
Financing Activity
In April 2004, Arbor completed an initial public offering of 6,272,500
common shares at $20 per share. Arbor sold 6,250,000 shares and a selling
stockholder sold 22,500 shares. Concurrently, Arbor sold 500,000 shares, to
an entity affiliated with one of its independent directors, at $20 per share.
These offerings resulted in total net proceeds to Arbor of $125.4 million.
Proceeds from the offerings were initially used for the repayment of
indebtedness under an existing credit facility and a master repurchase
agreement.
Arbor maintains four financing facilities with total capacity of $650
million. Outstanding balances under these facilities totaled $382 million as
of March 31, 2004. The additional capacity within these facilities, combined
with the net proceeds raised in the IPO, provide ample liquidity to continue
to fund the pipeline and grow the portfolio.
Portfolio Activity
During the first quarter, Arbor originated nine loans totaling $212.3
million, of which $193.2 million was disbursed on the closing date. Of the
new loans, five were bridge loans totaling $105.4 million, three were
mezzanine loans totaling $75.3 million and one loan was a junior participating
interest for $12.5 million.
At March 31, 2004, Arbor's loan portfolio balance was $477.7 million, with
a weighted average current interest pay rate of 7.31%. At the same date,
advances on financing facilities pertaining to the loan portfolio totaled
$326.1 million, with a weighted average funding cost of 3.53%. These balances
constitute an advance rate of approximately 68% as of March 31, 2004.
Arbor's loan and investment portfolio continues to perform according to
expectations 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, on March 26, 2004 Arbor paid a dividend of $0.38
per share for the quarter ended March 31, 2004 to stockholders of record on
March 18, 2004.
Earnings Conference Call
Management will host a conference call on Thursday, May 6, 2004 at 10:00
a.m. EDT. A live webcast of the conference call will be available online at
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 free at 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 (888) 396-2356 for
domestic callers and (617) 847-8709 for international callers. The participant
passcode for both is 36422598.
After the live webcast, the call will remain available on Arbor's Web
site, www.arborrealtytrust.com through June 4, 2004. In addition, a
telephonic replay of the call will be available from May 6, 2004 to May 13,
2004. The replay dial-in number is (617) 801-6888. Please use passcode:
32249287.
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. 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 from time to time in the Arbor's periodic and 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: Investors:
Rick Herbst, Stephanie Carrington/Denise Roche
Chief Financial Officer The Ruth Group
Arbor Realty Trust, Inc. 646-536-7017 / 7008
516-832-7408 scarrington@theruthgroup.com
rick.herbst@thearbornet.com droche@theruthgroup.com
Arbor Realty Trust, Inc.
Consolidated Statement of Operations
For the quarters ended March 31, 2004 and December 31, 2003
Quarter Ended
31-Mar-04 31-Dec-03
(unaudited) (unaudited)
Revenue
Interest income $8,163,391 $5,342,459
Other income 21,104 156,002
Total revenue 8,184,495 5,498,461
Expenses
Interest expense 2,623,893 947,877
Employee compensation and benefits 613,306 493,491
Stock-based compensation 114,201 133,693
Selling and administrative 244,311 400,393
Management fee 293,118 294,000
Total expenses 3,888,829 2,269,454
Income before minority
interest 4,295,666 3,229,007
Income allocated to minority
interest 1,191,339 895,675
Net income $3,104,327 $2,333,332
Basic earnings per common share $0.38 $0.28
Diluted earnings per common share $0.38 $0.28
Arbor Realty Trust, Inc.
Consolidated Balance Sheets
March 31, 2004 and December 31, 2003
31-Mar-04 31-Dec-03
Assets (unaudited)
Cash $5,329,340 $6,115,525
Loans held for investment, net 438,888,731 286,036,610
Related party loans, net 38,765,525 35,940,881
Available-for-sale securities, at
fair value 57,228,551 -
Investment in equity affiliates 3,142,542 5,917,542
Other assets 6,058,973 4,153,874
Total assets $549,413,662 $338,164,432
Liabilities and stockholders' equity
Notes payable and repurchase
agreements $381,567,687 $172,528,471
Other liabilities 12,999,982 10,888,245
Total liabilities 394,567,669 183,416,716
Minority interest 43,627,186 43,631,602
Stockholders' Equity:
Preferred stock, $0.01 par value:
100,000,000 shares authorized;
3,146,724 shares issued and
outstanding 31,467 31,467
Common stock, $0.01 par value:
500,000,000 shares authorized;
8,199,567 shares issued and
outstanding 81,996 81,996
Additional paid - in capital 112,215,649 112,215,649
Retained earnings (distributions in
excess of earnings) (703,373) (691,865)
Deferred compensation (406,932) (521,133)
Total stockholders' equity 111,218,807 111,116,114
Total liabilities and
stockholders' equity $549,413,662 $338,164,432
SOURCE Arbor Realty Trust, Inc.
-0- 05/06/2004
/CONTACT: Rick Herbst, Chief Financial Officer of Arbor Realty Trust,
Inc., +1-516-832-7408, rick.herbst@thearbornet.com; or Investors: Stephanie
Carrington, +1-646-536-7017, scarrington@theruthgroup.com, or Denise Roche,
+1-646-536-7008, droche@theruthgroup.com, both of The Ruth Group, for Arbor
Realty Trust, Inc./
/Web site: http://www.arborrealtytrust.com /
(ABR)
CO: Arbor Realty Trust, Inc.
ST: New York
IN: RLT FIN
SU: ERN CCA