Arbor Realty Trust Reports First Quarter 2014 Results and Declares Common and Preferred Stock Dividends
First Quarter Highlights:
- Declares a cash dividend of
$0.13 per share of common stock
- Declares cash dividends of
$0.515625 per share of Series A,$0.484375 per share of Series B and$0.5549 per share of Series C preferred stock
- FFO of
$8.0 million , or$0.16 per diluted common share1
- Net income attributable to common stockholders of
$5.9 million , or$0.12 per diluted common share
- Originated
$275 million of new loans
- Raised
$28 million of capital through two stock offerings
- Increased the capacity of financing facilities by
$30 million
- Adjusted book value per common share of
$9.15 , GAAP book value per common share of$7.55 1
Recent Developments:
- Closed a third collateralized loan obligation totaling
$375 million in April
- Increased the capacity of financing facilities by
$40 million in April
UNIONDALE, N.Y., May 1, 2014 (GLOBE NEWSWIRE) --
Portfolio Activity
Loan and investment portfolio activity during the first quarter of 2014 consisted of:
-
Originated 18 new loans totaling
$274.9 million , of which 16 were bridge loans for$263.9 million . -
Payoffs and pay downs on 13 loans totaling
$226.8 million , of which$5.7 million was charged off against loan loss reserves related to one loan. -
Modified and/or extended seven loans totaling
$35.2 million .
At
As of
The average balance of the Company's loan and investment portfolio during the first quarter of 2014, excluding loan loss reserves, was
During the first quarter of 2014, the Company recorded a
The Company had four non-performing loans with a carrying value of
During the first quarter of 2014, the Company recorded an impairment loss of
During the first quarter of 2014, the Company sold the majority of its residential mortgage-backed securities with an aggregate carrying value of
Financing Activity
The balance of debt that finances the Company's loan and investment portfolio at
During the first quarter of 2014, the Company amended one of its warehouse facilities increasing the committed amount from
In addition, during the quarter, the Company amended another financing facility increasing the committed amount from
On
In
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 CLOs, 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 | 184.35% | 138.15% | 108.74% | 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 | 541.25% | 457.31% | 495.38% | 232.75% | 365.43% |
| 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. | |||||
Equity Offerings
In
In
Common Dividend
The Company announced today that its Board of Directors has declared a quarterly cash dividend of
Preferred Dividends
The Company announced today that its Board of Directors has declared cash dividends on the Company's Series A, Series B and Series C cumulative redeemable preferred stock reflecting accrued dividends through
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 10 and 11 of this release.
1. See attached supplemental schedule of non-GAAP financial measures.
| ARBOR REALTY TRUST, INC. AND SUBSIDIARIES | ||
| CONSOLIDATED STATEMENTS OF INCOME - (Unaudited) | ||
| Quarter Ended | ||
| March 31, | ||
| 2014 | 2013 | |
| Interest income | $ 24,911,855 | $ 22,988,822 |
| Interest expense | 10,591,378 | 10,642,244 |
| Net interest income | 14,320,477 | 12,346,578 |
| Other revenue: | ||
| Property operating income | 8,661,515 | 8,334,328 |
| Other income, net | 858,396 | 1,379,458 |
| Total other revenue | 9,519,911 | 9,713,786 |
| Other expenses: | ||
| Employee compensation and benefits | 3,385,949 | 3,083,639 |
| Selling and administrative | 1,982,219 | 2,189,283 |
| Property operating expenses | 6,524,138 | 6,343,313 |
| Depreciation and amortization | 1,811,683 | 1,496,299 |
| Impairment loss on real estate owned | 250,000 | -- |
| Provision for loan losses (net of recoveries) | 134,344 | 2,500,155 |
| Management fee - related party | 2,450,000 | 2,800,000 |
| Total other expenses | 16,538,333 | 18,412,689 |
| Income from continuing operations before gain on extinguishment of debt, income (loss) from equity affiliates | 7,302,055 | 3,647,675 |
| Gain on extinguishment of debt | -- | 3,763,000 |
| Income (loss) from equity affiliates | 40,048 | (81,885) |
| Income from continuing operations | 7,342,103 | 7,328,790 |
| Income (loss) from discontinued operations | 123,588 | (101,572) |
| Net income | 7,465,691 | 7,227,218 |
| Preferred stock dividends | 1,590,930 | 533,328 |
| Net income attributable to noncontrolling interest | -- | 53,651 |
| Net income attributable to Arbor Realty Trust, Inc. common stockholders | $ 5,874,761 | $ 6,640,239 |
| Basic earnings per common share: | ||
| Income from continuing operations, net of noncontrolling interest and preferred stock dividends | $ 0.12 | $ 0.20 |
| Income (loss) from discontinued operations | -- | -- |
| Net income attributable to Arbor Realty Trust, Inc. common stockholders | $ 0.12 | $ 0.20 |
| Diluted earnings per common share: | ||
| Income from continuing operations, net of noncontrolling interest and preferred stock dividends | $ 0.12 | $ 0.19 |
| Income (loss) from discontinued operations | -- | -- |
| Net income attributable to Arbor Realty Trust, Inc. common stockholders | $ 0.12 | $ 0.19 |
| Dividends declared per common share | $ 0.13 | $ 0.12 |
| Weighted average number of shares of common stock outstanding: | ||
| Basic | 49,336,308 | 33,771,925 |
| Diluted | 49,752,813 | 34,236,689 |
| ARBOR REALTY TRUST, INC. AND SUBSIDIARIES | ||
| CONSOLIDATED BALANCE SHEETS | ||
| March 31, | December 31, | |
| 2014 | 2013 | |
| (Unaudited) | ||
| Assets: | ||
| Cash and cash equivalents | $ 32,704,172 | $ 60,389,552 |
| Restricted cash | 97,161,850 | 54,962,316 |
| Loans and investments, net | 1,574,832,799 | 1,523,699,653 |
| Available-for-sale securities, at fair value | 2,776,077 | 37,315,652 |
| Investments in equity affiliates | 4,680,306 | 4,680,306 |
| Real estate owned, net | 110,791,226 | 111,718,177 |
| Real estate held-for-sale, net | 11,444,812 | 11,477,676 |
| Due from related party | 281,462 | 98,058 |
| Prepaid management fee - related party | 19,047,949 | 19,047,949 |
| Other assets | 46,589,572 | 54,083,143 |
| Total assets | $ 1,900,310,225 | $ 1,877,472,482 |
| Liabilities and Equity: | ||
| Repurchase agreements and credit facilities | $ 248,206,026 | $ 159,125,023 |
| Collateralized debt obligations | 519,770,974 | 639,622,981 |
| Collateralized loan obligations | 264,500,000 | 264,500,000 |
| Junior subordinated notes to subsidiary trust issuing preferred securities | 159,423,385 | 159,291,427 |
| Notes payable | 17,498,874 | 2,500,000 |
| Mortgage note payable – real estate owned | 42,745,650 | 42,745,650 |
| Mortgage note payable – real estate held-for-sale | 11,005,354 | 11,005,354 |
| Due to related party | 1,140,910 | 2,794,087 |
| Due to borrowers | 32,656,568 | 20,326,030 |
| Deferred revenue | 77,123,133 | 77,123,133 |
| Other liabilities | 58,349,055 | 60,842,515 |
| Total liabilities | 1,432,419,929 | 1,439,876,200 |
| 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, 2014 and December 31, 2013; 7.75% Series B cumulative redeemable preferred stock, $31,500,000 aggregate liquidation preference; 1,260,000 issued and outstanding at March 31, 2014 and December 31, 2013, 8.50% Series C cumulative redeemable preferred stock, $22,500,000 aggregate liquidation preference; 900,000 issued and outstanding at March 31, 2014, no shares issued and outstanding at December 31, 2013 | 89,295,905 | 67,654,655 |
| Common stock, $0.01 par value: 500,000,000 shares authorized; 52,787,075 shares issued, 50,136,308 shares outstanding at March 31, 2014 and 51,787,075 shares issued, 49,136,308 shares outstanding at December 31, 2013 | 527,870 | 517,870 |
| Additional paid-in capital | 630,644,261 | 623,993,245 |
| Treasury stock, at cost - 2,650,767 shares at March 31, 2014 and December 31, 2013 | (17,100,916) | (17,100,916) |
| Accumulated deficit | (212,748,410) | (212,231,319) |
| Accumulated other comprehensive loss | (22,728,414) | (25,237,253) |
| Total stockholders' equity | 467,890,296 | 437,596,282 |
| Total liabilities and equity | $ 1,900,310,225 | $ 1,877,472,482 |
| ARBOR REALTY TRUST, INC. AND SUBSIDIARIES | |
| Supplemental Schedule of Non-GAAP Financial Measures-- | |
| Adjusted and GAAP Book Value per Common Share | |
| (Unaudited) | |
| March 31, 2014 | |
| GAAP Arbor Realty Trust, Inc. Stockholders' Equity | $ 467,890,296 |
| Subtract: 8.25% Series A, 7.75% Series B and 8.50% Series C cumulative redeemable preferred stock | (89,295,905) |
| GAAP Arbor Realty Trust, Inc. Common Stockholders' Equity | $ 378,594,391 |
| Add: 450 West 33rd Street transaction - deferred revenue | 77,123,133 |
| Unrealized loss on derivative instruments | 21,921,045 |
| Subtract: 450 West 33rd Street transaction - prepaid management fee | (19,047,949) |
| Adjusted Arbor Realty Trust, Inc. Common Stockholders' Equity | $ 458,590,620 |
| Adjusted book value per common share | $ 9.15 |
| GAAP book value per common share | $ 7.55 |
| Common shares outstanding | 50,136,308 |
| Given the magnitude and the deferral structure of the 450 West 33rd Street transaction combined with the significance of the unrealized gain and/or loss position of our qualifying derivative instruments, Arbor has elected to report adjusted book value per common share for the affected period to currently reflect the future impact of the 450 West 33rd Street transaction on the Company's financial condition as well as the removal of the temporary nature of unrealized gains or losses as a component of equity from qualifying interest rate swaps on our financial position. Over time, as these qualifying interest rate swaps reach their maturity, the fair value of these swaps will return to their original par value. Management considers this non-GAAP financial measure to be an effective indicator, for both management and investors, of Arbor's financial condition. Arbor's management does not advocate that investors consider this non-GAAP financial measure in isolation from, or as a substitute for, financial measures prepared in accordance with GAAP. | |
| ARBOR REALTY TRUST, INC. AND SUBSIDIARIES | ||
| Supplemental Schedule of Non-GAAP Financial Measures (Continued) -- | ||
| Funds from Operations | ||
| (Unaudited) | ||
| Quarter Ended | ||
| March 31, | ||
| 2014 | 2013 | |
| Net income attributable to Arbor Realty Trust, Inc. common stockholders, GAAP basis | $ 5,874,761 | $ 6,640,239 |
| Add: | ||
| Impairment loss on real estate owned | 250,000 | -- |
| Depreciation - real estate owned and held-for-sale (1) | 1,811,683 | 1,632,131 |
| Depreciation - investment in equity affiliate | 69,370 | 22,599 |
| Funds from operations ("FFO") | $ 8,005,814 | $ 8,294,969 |
| Diluted FFO per common share | $ 0.16 | $ 0.24 |
| Diluted weighted average shares outstanding | 49,752,813 | 34,236,689 |
| (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 REITs. The National Association of Real Estate Investment Trusts, or NAREIT, defines FFO as net income (loss) attributable to common stockholders (computed in accordance with GAAP), excluding gains (losses) from sales of depreciated real properties, plus impairments of depreciated real properties and real estate related depreciation and amortization, and after adjustments for unconsolidated ventures. The Company considers gains and losses on the sales of undepreciated real estate investments to be a normal part of its recurring operating activities in accordance with GAAP and should not be excluded when calculating FFO. Losses from discontinued operations are not excluded when calculating FFO. | ||
| 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
