Arbor Realty Trust Reports First Quarter 2013 Results and Declares Common and Preferred Dividends
First Quarter Highlights:
-
Declares a common dividend of
$0.12 per share -
Declares a dividend of
$0.6875 per share of Series A preferred stock -
FFO of
$8.3 million , or$0.24 per diluted common share1 -
Net income attributable to common stockholders of
$6.6 million , or$0.19 per diluted common share -
Raised
$88.8 million of capital issuing 11.6 million common shares in two offerings -
Raised
$37.3 million of capital in a preferred stock offering -
Closed a
$260.0 million collateralized loan obligation -
Improved funding sources by closing a
$50.0 million warehouse facility and increased the capacity of two financing facilities by a total of$30.0 million -
Originated 10 new loans totaling
$98.9 million -
Purchased four residential mortgage-backed securities totaling
$41.8 million -
Adjusted book value per common share of
$9.68 , GAAP book value per common share of$7.53 1 -
Generated a gain of
$3.8 million from the retirement of CDO debt -
Recorded
$2.5 million in loan loss reserves
The balance of the Company's loan and investment portfolio, excluding loan loss reserves, at
The balance of debt that finances the Company's loan and investment portfolio at
Financing Activity
As of
In
On
In
Additionally, the Company amended another financing facility increasing the committed amount from
The Company is subject to various financial covenants and restrictions under the terms of the Company's CDO/CLO vehicles, credit facilities, and repurchase agreements. The Company believes that it was in compliance with all financial covenants and restrictions as of
The Company's CDO/CLO vehicles contain interest coverage and asset over collateralization covenants that must be met as of the waterfall distribution date in order for the Company to receive such payments. If the Company fails these covenants in any of its CDOs or CLO, all cash flows from the applicable vehicle would be diverted to repay principal and interest on the outstanding bonds and the Company would not receive any residual payments until that vehicle regained compliance with such covenants. As of the most recent determination dates in
The chart below is a summary of the Company's CDO/CLO compliance tests as of the most recent determination dates in
| Cash Flow Triggers | CDO I (3) | CDO II (3) | CDO III (3) | CLO I | CLO II |
| Overcollateralization (1) | |||||
| Current | 174.76% | 138.97% | 106.56% | 142.96% | 146.89% |
| Limit | 145.00% | 127.30% | 105.60% | 137.86% | 144.25% |
| Pass / Fail | Pass | Pass | Pass | Pass | Pass |
| Interest Coverage (2) | |||||
| Current | 602.15% | 504.62% | 604.59% | 241.60% | 330.08% |
| Limit | 160.00% | 147.30% | 105.60% | 120.00% | 120.00% |
| Pass / Fail | Pass | Pass | Pass | Pass | Pass |
(1) The overcollateralization ratio divides the total principal balance of all collateral in the CDO/CLO by the total principal balance of the bonds associated with the applicable ratio. To the extent an asset is considered a defaulted security, the asset's principal balance for purposes of the overcollateralization test is the lesser of the asset's market value or the principal balance of the defaulted asset multiplied by the asset's recovery rate which is determined by the rating agencies.
(2) The interest coverage ratio divides interest income by interest expense for the classes senior to those retained by the Company.
(3) CDO I, CDO II, and CDO III have reached the end of their replenishment periods. As such, investor capital is repaid quarterly from proceeds received from loan repayments held as collateral in accordance with the terms of the respective CDO.
Portfolio Activity
During the first quarter of 2013, Arbor purchased four residential mortgage-backed securities with a total face value of
During the first quarter of 2013, Arbor originated 10 bridge loans totaling approximately
At
As of
During the first quarter of 2013, the Company recorded
The Company had six non-performing loans with a carrying value of approximately
Equity Offerings
In
In
In
Common Dividend
The Company announced today that its Board of Directors has declared a quarterly cash dividend of
Preferred Dividend
The Company announced today that its Board of Directors has declared a cash dividend of
Earnings Conference Call
Management will host a conference call today at
After the live webcast, the call will remain available on the Company's Website, www.arborrealtytrust.com, through
About
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 Arbor's Annual Report on Form 10-K for the year ended
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 each non-GAAP financial measure and the comparable GAAP financial measure can be found on page 11 and 12 of this release.
1. See attached supplemental schedule of non-GAAP financial measures.
| ARBOR REALTY TRUST, INC. AND SUBSIDIARIES | ||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||
| Quarter Ended | ||
| March 31, | ||
| 2013 | 2012 | |
| (Unaudited) | (Unaudited) | |
| Interest income | $ 22,988,822 | $ 19,606,407 |
| Interest expense | 10,642,244 | 11,761,400 |
| Net interest income | 12,346,578 | 7,845,007 |
| Other revenues: | ||
| Property operating income | 8,895,434 | 9,023,161 |
| Other income | 1,379,458 | 32,030 |
| Total other revenues | 10,274,892 | 9,055,191 |
| Other expenses: | ||
| Employee compensation and benefits | 3,083,639 | 2,484,778 |
| Selling and administrative | 2,189,283 | 1,660,233 |
| Property operating expenses | 6,870,159 | 7,325,307 |
| Depreciation and amortization | 1,632,131 | 1,176,755 |
| Provision for loan losses (net of recoveries) | 2,500,155 | 7,789,408 |
| Management fee - related party | 2,800,000 | 2,500,000 |
| Total other expenses | 19,075,367 | 22,936,481 |
| Income (loss) from continuing operations before gain on extinguishment of debt, loss from equity affiliates and benefit from income taxes | 3,546,103 | (6,036,283) |
| Gain on extinguishment of debt | 3,763,000 | 5,346,121 |
| Loss from equity affiliates | (81,885) | (250,574) |
| Income (loss) before benefit from income taxes | 7,227,218 | (940,736) |
| Benefit from income taxes | -- | 1,401,558 |
| Income from continuing operations | 7,227,218 | 460,822 |
| Gain on sale of real estate held-for-sale | -- | 3,487,145 |
| Income from operations of real estate held-for-sale | -- | 267,624 |
| Income from discontinued operations | -- | 3,754,769 |
| Net income | 7,227,218 | 4,215,591 |
| Preferred stock dividends | 533,328 | -- |
| Net income attributable to noncontrolling interest | 53,651 | 53,811 |
| Net income attributable to Arbor Realty Trust, Inc. common stockholders | $ 6,640,239 | $ 4,161,780 |
| Basic earnings per common share: | ||
| Income from continuing operations, net of noncontrolling interest and preferred stock dividends | $ 0.20 | $ 0.02 |
| Income from discontinued operations | -- | 0.15 |
| Net income attributable to Arbor Realty Trust, Inc. common stockholders | $ 0.20 | $ 0.17 |
| Diluted earnings per common share: | ||
| Income from continuing operations, net of noncontrolling interest and preferred stock dividends | $ 0.19 | $ 0.02 |
| Income from discontinued operations | -- | 0.15 |
| Net income attributable to Arbor Realty Trust, Inc. common stockholders | $ 0.19 | $ 0.17 |
| Dividends declared per common share | $ 0.12 | $ -- |
| Weighted average number of shares of common stock outstanding: | ||
| Basic | 33,771,925 | 24,180,165 |
| Diluted | 34,236,689 | 24,344,154 |
| ARBOR REALTY TRUST, INC. AND SUBSIDIARIES | ||
| CONSOLIDATED BALANCE SHEETS | ||
| March 31, | December 31, | |
| 2013 | 2012 | |
| (Unaudited) | ||
| Assets: | ||
| Cash and cash equivalents | $ 77,964,567 | $ 29,188,889 |
| Restricted cash (includes $71,308,827 and $41,537,212 from consolidated VIEs, respectively) | 72,067,155 | 42,535,514 |
| Loans and investments, net (includes $1,288,284,771 and $1,113,745,356 from consolidated VIEs, respectively) | 1,387,920,430 | 1,325,667,053 |
| Available-for-sale securities, at fair value (includes $1,100,000 and $1,100,000 from consolidated VIEs, respectively) | 3,552,736 | 3,552,736 |
| Securities held-to-maturity, net | 55,954,525 | 42,986,980 |
| Investment in equity affiliates | 59,474,992 | 59,581,242 |
| Real estate owned, net (includes $80,787,215 and $80,787,215 from consolidated VIEs, respectively) | 125,139,264 | 124,148,199 |
| Due from related party | 458,876 | 24,094 |
| Prepaid management fee - related party | 19,047,949 | 19,047,949 |
| Other assets (includes $15,077,666 and $11,709,103 from consolidated VIEs, respectively) | 55,369,634 | 55,148,624 |
| Total assets | $ 1,856,950,128 | $ 1,701,881,280 |
| Liabilities and Equity: | ||
| Repurchase agreements and credit facilities | $ 49,403,813 | $ 130,661,619 |
| Collateralized debt obligations (includes $750,376,079 and $812,452,845 from consolidated VIEs, respectively) | 750,376,079 | 812,452,845 |
| Collateralized loan obligations (includes $264,500,000 and $87,500,000 from consolidated VIEs, respectively) | 264,500,000 | 87,500,000 |
| Junior subordinated notes to subsidiary trust issuing preferred securities | 158,894,847 | 158,767,145 |
| Notes payable | 51,457,708 | 51,457,708 |
| Mortgage notes payable – real estate owned | 53,751,004 | 53,751,004 |
| Due to related party | 1,329,758 | 3,084,627 |
| Due to borrowers (includes $555,668 and $1,320,943 from consolidated VIEs, respectively) | 20,344,103 | 23,056,640 |
| Deferred revenue | 77,123,133 | 77,123,133 |
| Other liabilities (includes $20,418,639 and $22,013,896 from consolidated VIEs, respectively) | 66,380,663 | 72,765,437 |
| Total liabilities | 1,493,561,108 | 1,470,620,158 |
| Commitments and contingencies | -- | -- |
| Equity: | ||
| Arbor Realty Trust, Inc. stockholders' equity: | ||
| Preferred stock, $0.01 par value: 100,000,000 shares authorized; 8.25% Series A cumulative redeemable preferred stock, $38,787,500 aggregate liquidation preference; 1,551,500 issued and outstanding at March 31, 2013, no shares issued and outstanding at December 31, 2012 | 37,315,694 | -- |
| Common stock, $0.01 par value: 500,000,000 shares authorized; 45,717,742 shares issued, 43,066,975 shares outstanding at March 31, 2013 and 33,899,992 shares issued, 31,249,225 shares outstanding at December 31, 2012 | 457,178 | 339,000 |
| Additional paid-in capital | 582,279,426 | 493,211,222 |
| Treasury stock, at cost - 2,650,767 shares at March 31, 2013 and December 31, 2012 | (17,100,916) | (17,100,916) |
| Accumulated deficit | (205,076,703) | (207,558,257) |
| Accumulated other comprehensive loss | (36,420,916) | (39,561,700) |
| Total Arbor Realty Trust, Inc. stockholders' equity | 361,453,763 | 229,329,349 |
| Noncontrolling interest in consolidated entity | 1,935,257 | 1,931,773 |
| Total equity | 363,389,020 | 231,261,122 |
| Total liabilities and equity | $ 1,856,950,128 | $ 1,701,881,280 |
| ARBOR REALTY TRUST, INC. AND SUBSIDIARIES | |
| SUPPLEMENTAL SCHEDULE OF NON-GAAP FINANCIAL MEASURES | |
| (Unaudited) | |
| March 31, 2013 | |
| GAAP Arbor Realty Trust, Inc. Stockholders' Equity | $ 361,453,763 |
| Subtract: 8.25% Series A cumulative redeemable preferred stock | (37,315,694) |
| GAAP Arbor Realty Trust, Inc. Common Stockholders' Equity | $ 324,138,069 |
| Add: 450 West 33rd Street transaction - deferred revenue | 77,123,133 |
| Unrealized loss on derivative instruments | 34,776,520 |
| Subtract: 450 West 33rd Street transaction - prepaid management fee | (19,047,949) |
| Adjusted Arbor Realty Trust, Inc. Common Stockholders' Equity | $ 416,989,773 |
| Adjusted book value per common share | $ 9.68 |
| GAAP book value per common share | $ 7.53 |
| Common shares outstanding | 43,066,975 |
Given the magnitude and the deferral structure of the
GAAP book value per share and adjusted book value per share calculations do not take into account any dilution from the potential exercise of the warrants issued to Wachovia as part of the 2009 debt restructuring.
| ARBOR REALTY TRUST, INC. AND SUBSIDIARIES | ||
| SUPPLEMENTAL SCHEDULE OF NON-GAAP FINANCIAL MEASURES - Continued | ||
| (Unaudited) | ||
| Quarter Ended | ||
| March 31, | ||
| 2013 | 2012 | |
| Net income attributable to Arbor Realty Trust, Inc. common stockholders, GAAP basis | $ 6,640,239 | $ 4,161,780 |
| Subtract: | ||
| Gain on sale of real estate-held-for-sale | -- | (3,487,145) |
| Add: | ||
| Depreciation - real estate owned and held-for-sale (1) | 1,632,131 | 1,176,755 |
| Depreciation - investment in equity affiliate | 22,599 | 26,936 |
| Funds from operations ("FFO") | $ 8,294,969 | $ 1,878,326 |
| Diluted FFO per common share | $ 0.24 | $ 0.08 |
| Diluted weighted average shares outstanding | 34,236,689 | 24,344,154 |
| (1) Includes discontinued operations | ||
Arbor is presenting funds from operations, or FFO, because management believes it to be an important supplemental measure of the Company's operating performance in that it is frequently used by analysts, investors and other parties in the evaluation of real estate investment trusts (REITs). The revised White Paper on FFO approved by the
FFO is not intended to be an indication of our cash flow from operating activities (determined in accordance with GAAP) or a measure of our liquidity, nor is it entirely indicative of funding our cash needs, including our ability to make cash distributions. Arbor's calculation of FFO may be different from the calculation used by other companies and, therefore, comparability may be limited.
CONTACT:Arbor Realty Trust, Inc. Paul Elenio , Chief Financial Officer 516-506-4422 pelenio@arbor.com Media:Bonnie Habyan , EVP of Marketing 516-506-4615 bhabyan@arbor.com Investors:Stephanie Carrington The Ruth Group 646-536-7017 scarrington@theruthgroup.com
