ARLP i think you are right but i did sell half my position & doubled down on ARB Arbor Realty Trust Reports First Quarter Results and Increases Quarterly Dividend 19% to $0.25 per Share
8:00 am ET May 4, 2018 (Globe Newswire) Print
Company Highlights:
-- GAAP net income of $0.42 per diluted common share; AFFO of $0.25, or $0.28 per diluted common share excluding a one-time, non-cash expense from the early repayment of debt
-- Declares a cash dividend on common stock of $0.25 per share, 19% higher than last quarter and our sixth increase in the past eight quarters
Agency Business
-- Segment income of $31.2 million
-- Loan originations of $1.05 billion
-- Servicing portfolio of $16.69 billion, up 3% from 4Q17
Structured Business
-- Segment income of $4.3 million
-- Portfolio growth of 5% on $314.2 million of loan originations
-- Issued $100.0 million of 5.625% senior notes due in 2023, a 175 basis point rate reduction from our 7.375% senior notes redeemed in April 2018
Arbor Realty Trust, Inc. (NYSE:ABR) today announced financial results for the first quarter ended March 31, 2018. Arbor reported net income for the quarter of $26.2 million, or $0.42 per diluted common share, compared to $15.6 million, or $0.30 per diluted common share for the quarter ended March 31, 2017. Adjusted funds from operations ("AFFO") for the quarter was $21.4 million, or $0.25 per diluted common share, compared to $24.7 million, or $0.33 per diluted common share for the quarter ended March 31, 2017.
Agency Business
Loan Origination Platform
Agency Loan Volume (in thousands)
Quarter Ended
March 31, December 31,
2018 2017
Fannie Mae $ 662,921 $ 712,661
Freddie Mac 308,151 441,901
FHA 60,738 -
CMBS/Conduit 16,233 -
Total Originations $ 1,048,043 $ 1,154,562
Total Loan Sales $ 1,062,437 $ 1,193,629
Total Loan Commitments $ 1,043,715 $ 1,162,961
For the quarter ended March 31, 2018, the Agency Business generated revenues of $54.4 million, compared to $53.7 million for the fourth quarter of 2017. Gain on sales, including fee-based services, net was $18.2 million for the quarter, reflecting a margin of 1.71% on loan sales, compared to $17.7 million and 1.48% for the fourth quarter of 2017. Income from mortgage servicing rights was $19.6 million for the quarter, reflecting a rate of 1.88% as a percentage of loan commitments, compared to $20.6 million and 1.77% for the fourth quarter of 2017.
At March 31, 2018, loans held-for-sale was $286.3 million which was primarily comprised of unpaid principal balances totaling $281.8 million, with financing associated with these loans totaling $281.3 million.
Fee-Based Servicing Portfolio
Our fee-based servicing portfolio totaled $16.69 billion at March 31, 2018, an increase of 3% from December 31, 2017, primarily a result of $1.05 billion of new loan originations, net of $548.1 million in portfolio runoff during the quarter. Servicing revenue, net was $9.5 million for the quarter and consists of servicing revenue of $21.4 million, net of amortization of mortgage servicing rights totaling $11.9 million.
Fee-Based Servicing Portfolio ($ in thousands)
As of March 31, 2018 As of December 31, 2017
UPB Wtd. Avg. Fee Wtd. Avg. Life (in years) UPB Wtd. Avg. Fee Wtd. Avg. Life (in years)
Fannie Mae $ 12,700,635 0.535% 7.2 $ 12,502,699 0.536% 6.9
Freddie Mac 3,397,535 0.304% 10.7 3,166,134 0.295% 10.5
FHA 591,836 0.162% 20.0 537,482 0.165% 19.6
Total $ 16,690,006 0.475% 8.4 $ 16,206,315 0.477% 8.1
Loans sold under the Fannie Mae program contain an obligation to partially guarantee the performance of the loan ("loss-sharing obligations"). At March 31, 2018, the Company's allowance for loss-sharing obligations was $31.1 million which consists of general loss sharing guaranty obligations of $30.3 million, representing 0.24% of the Fannie Mae servicing portfolio, and $0.8 million of loss-sharing obligations on specifically identified loans with losses determined to be probable and estimable.
Structured Business
Portfolio and Investment Activity
First quarter of 2018:
-- 19 new loan originations totaling $314.2 million, of which 18 were bridge loans for $271.7 million
-- Payoffs and pay downs on 20 loans totaling $190.6 million
-- Portfolio growth of 5% from 4Q17
At March 31, 2018, the loan and investment portfolio's unpaid principal balance, excluding loan loss reserves, was $2.78 billion, with a weighted average current interest pay rate of 6.57%, compared to $2.66 billion and 6.28% at December 31, 2017. Including certain fees earned and costs associated with the loan and investment portfolio, the weighted average current interest pay rate was 7.28% at March 31, 2018, compared to 6.99% at December 31, 2017. The increase in the average current interest pay rate was primarily due to an increase in LIBOR.
The average balance of the Company's loan and investment portfolio during the first quarter of 2018, excluding loan loss reserves, was $2.68 billion with a weighted average yield on these assets of 7.08%, compared to $2.31 billion and 6.94% for the fourth quarter of 2017.
At March 31, 2018, the Company's total loan loss reserves were $63.1 million on five loans with an aggregate carrying value before loan loss reserves of $163.9 million. The Company also had two non-performing loans with a carrying value of $29.1 million, net of related loan loss reserves of $7.4 million.
Financing Activity
The balance of debt that finances the Company's loan and investment portfolio at March 31, 2018 was $2.45 billion with a weighted average interest rate including fees of 5.09% as compared to $2.24 billion and a rate of 4.83% at December 31, 2017. The average balance of debt that finances the Company's loan and investment portfolio for the first quarter of 2018 was $2.30 billion, as compared to $1.90 billion for the fourth quarter of 2017. The average cost of borrowings for the first quarter was 5.33%, compared to 4.66% for the fourth quarter of 2017. The increase in average costs was primarily due to an increase in LIBOR as well as the acceleration of fees related to the early repayment of debt.
The Company is subject to various financial covenants and restrictions under the terms of its collateralized securitization vehicles and financing facilities. The Company believes it was in compliance with all financial covenants and restrictions as of March 31, 2018 and as of the most recent collateralized securitization vehicle determination dates in April 2018.
The Company paid $50.0 million in full satisfaction of the seller financing related to the acquisition of the Agency Business.
Capital Markets
The Company issued $100.0 million aggregate principal amount of 5.625% senior unsecured notes in a private placement, generating net proceeds of $97.8 million after deducting the underwriting discount and other offering expenses. The notes are due in May 2023 and can be redeemed by the Company at any time prior to April 1, 2023. The proceeds were used to fund the redemption in April 2018 of $97.9 million aggregate principal amount of the Company's 7.375% senior notes due in 2021.
Dividends
The Company announced today that its Board of Directors has declared a quarterly cash dividend of $0.25 per share of common stock for the quarter ended March 31, 2018, representing an increase of 19% over the prior quarter dividend of $0.21 per share. The dividend is payable on May 31, 2018 to common stockholders of record on May 15, 2018. The ex-dividend date is May 14, 2018.
The Company also 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 from March 1, 2018 through May 31, 2018. The dividends are payable on May 31, 2018 to preferred stockholders of record on May 15, 2018. The Company will pay total dividends of $0.515625, $0.484375 and $0.53125 per share on the Series A, Series B and Series C preferred stock, respectively.
Earnings Conference Call
The Company will host a conference call today at 10:00 a.m. Eastern Time. A live webcast of the conference call will be available at www.arbor.com in the investor relations area of the 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) 516-5034 for domestic callers and (678) 509-7613 for international callers. Please use participant passcode 6184718.
After the live webcast, the call will remain available on the Company's website through May 31, 2018. In addition, a telephonic replay of the call will be available until May 11, 2018. The replay dial-in numbers are (855) 859-2056 for domestic callers and (404) 537-3406 for international callers. Please use passcode 6184718.
About Arbor Realty Trust, Inc.
Arbor Realty Trust, Inc. (NYSE:ABR) is a real estate investment trust and national direct lender specializing in loan origination and servicing for multifamily, seniors housing, healthcare and other diverse commercial real estate assets. Arbor is a Top 10 Fannie Mae DUS Multifamily Lender by volume and a Top Fannie Mae Small Loan lender, a Freddie Mac Program Plus Seller/Servicer and a Top Freddie Mac Small Balance Loan Lender, a Fannie Mae and Freddie Mac Seniors Housing Lender, an FHA Multifamily Accelerated Processing (MAP)/LEAN Lender, a HUD-approved LIHTC Lender as well as a CMBS, bridge, mezzanine and preferred equity lender, consistently building on its reputation for service, quality and flexibility. With a fee-based servicing portfolio of over $16 billion, Arbor is a primary commercial loan servicer and special servicer rated by Standard & Poor's with an Above Average rating. Arbor is also on the Standard & Poor's Select Servicer List and is a primary commercial loan servicer and loan level special servicer rated by Fitch Ratings.
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