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For the fiscal year ended December 31, | |||||
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(Registrant’s telephone number, including area code): |
Title of each class | Trading symbols | Name of each exchange on which registered | |||||||||||||
Common Stock, par value $0.01 per share | ABR |
| New York Stock Exchange | ||||||||||||
Preferred Stock, |
| New York Stock Exchange | |||||||||||||
Preferred Stock, |
| New York Stock Exchange | |||||||||||||
Preferred Stock, |
| New York Stock Exchange |
Large accelerated filer | þ | Accelerated filer | o | Non-accelerated filer | o | ||||||||||||
Smaller reporting company | |||||||||||||||||
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| Emerging growth company | o |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻o
o
2
Forward-Looking Statements
3
Our principal
4
Provide Customized Financing. We provide a suite of comprehensive customized financing solutions to meet the various needs of borrowers. We target borrowers whose options may be limited by conventional bank financing, have demonstrated a history of enhancing the value of the properties they operate and who may benefit from the customized financing solutions we offer.
options.
5
payments, yield look-backs and participating interests. We hold a majority of our mezzanine loans through subsidiaries of our operating partnership that are pass-through entities for tax purposes.
Single-Family Rental Portfolio Financing. We offer various financing products to borrowers who are looking to acquire conventional, workforce and affordable single-family housing. These borrowers are usually looking to purchase properties to hold for the long-term with permanent financing or acquire investments to develop with bridge, build-to-rent or line of credit financing options.
6
Structured Business Portfolio Overview
Product
| | | | | | | | | | | |
|
| | | |
| | |
| |
| Wtd. Avg. |
| | | | | | | | | Wtd. Avg. | | Remaining Months |
Type |
| Asset Class |
| Number |
| Unpaid Principal |
| Pay Rate(1) |
| to Maturity | |
Bridge Loans |
| Multifamily | | 190 | | $ | 4,139,307 |
| 5.22 | % | 17.1 |
| | Land | | 8 | | | 189,613 | | 2.91 | % | 4.8 |
|
| Healthcare | | 9 | |
| 186,694 |
| 7.45 | % | 11.9 |
|
| Hotel | | 4 | |
| 177,000 |
| 1.83 | % | 21.4 |
|
| Office | | 5 | |
| 123,227 |
| 4.26 | % | 10.2 |
|
| Single-Family Rental | | 38 | |
| 88,089 |
| 6.58 | % | 13.3 |
|
| Student Housing | | 4 | |
| 71,500 |
| 4.88 | % | 5.1 |
| | Retail | | 3 | | | 33,500 | | 5.43 | % | 34.5 |
|
| Self Storage | | 2 | |
| 13,579 |
| 5.13 | % | 8.0 |
|
| | | 263 | | | 5,022,509 | | 5.09 | % | 16.2 |
Preferred Equity |
| Multifamily | | 8 | |
| 182,949 |
| 8.08 | % | 56.5 |
|
| Other | | 6 | |
| 41,979 |
| 2.63 | % | 20.9 |
|
| | | 14 | |
| 224,928 |
| 7.07 | % | 49.8 |
Mezzanine Loans |
| Multifamily | | 22 | |
| 95,832 |
| 8.06 | % | 60.3 |
|
| Land | | 3 | | | 48,832 | | 6.20 | % | 9.7 |
| | Retail | | 3 | | | 9,578 | | 6.07 | % | 45.2 |
|
| Office | | 1 | |
| 5,000 |
| 9.00 | % | 94.0 |
|
| | | 29 | | | 159,242 | | 7.40 | % | 45.0 |
Other |
| Single‑Family Rental | | 22 | |
| 68,403 |
| 4.95 | % | 74.8 |
Total |
| | | 328 | | $ | 5,475,082 | | 5.23 | % | 19.2 |
Type | Asset Class | Number | Unpaid Principal | Wtd. Avg. Pay Rate (1) | Wtd. Avg. Remaining Months to Maturity (2) | |||||||||||||||||||||||||||
Bridge Loans | Multifamily | 316 | $ | 10,789,936 | 8.36 | % | 12.1 | |||||||||||||||||||||||||
Single‑Family Rental | 354 | 1,316,803 | 9.87 | % | 12.7 | |||||||||||||||||||||||||||
Land | 7 | 118,595 | 0.13 | % | 0.3 | |||||||||||||||||||||||||||
Office | 1 | 35,410 | 8.98 | % | 7.6 | |||||||||||||||||||||||||||
Retail | 1 | 12,500 | 8.98 | % | 11.1 | |||||||||||||||||||||||||||
679 | 12,273,244 | 8.45 | % | 12.0 | ||||||||||||||||||||||||||||
Mezzanine Loans | Multifamily | 46 | 232,104 | 8.77 | % | 60.3 | ||||||||||||||||||||||||||
Other | 3 | 16,353 | 3.35 | % | 4.5 | |||||||||||||||||||||||||||
49 | 248,457 | 8.41 | % | 56.6 | ||||||||||||||||||||||||||||
Preferred Equity | Multifamily | 14 | 75,941 | 4.46 | % | 66.6 | ||||||||||||||||||||||||||
Other | 3 | 9,800 | — | 10.7 | ||||||||||||||||||||||||||||
17 | 85,741 | 3.95 | % | 60.3 | ||||||||||||||||||||||||||||
Other | Single‑Family Rental | 2 | 7,564 | 9.84 | % | 13.9 | ||||||||||||||||||||||||||
Total | 747 | $ | 12,615,006 | 8.42 | % | 13.2 |
Asset
| | | | | | | | | | | | | |
|
| | |
| |
| Geographic |
| | |
| |
|
Asset Class |
| UPB |
| Percentage |
| Concentrations |
| UPB |
| Percentage | | ||
Multifamily | | $ | 4,418,088 |
| 81 | % | New York | | $ | 1,027,588 |
| 19 | % |
Land | |
| 246,544 |
| 5 | % | Texas | |
| 583,321 |
| 11 | % |
Healthcare | |
| 186,694 |
| 3 | % | Georgia | |
| 522,014 |
| 10 | % |
Hotel | |
| 177,000 |
| 3 | % | California | |
| 327,486 |
| 6 | % |
Single-Family Rental | |
| 156,492 |
| 3 | % | Illinois | |
| 294,048 |
| 5 | % |
Office | |
| 136,906 |
| 2 | % | Florida | |
| 283,338 |
| 5 | % |
Student Housing | |
| 95,000 |
| 2 | % | Alabama | |
| 260,198 |
| 5 | % |
Retail | |
| 43,078 |
| 1 | % | Pennsylvania | |
| 239,635 |
| 4 | % |
Other | | | 15,280 | | <1 | % | Connecticut | | | 229,793 | | 4 | % |
Total | | $ | 5,475,082 |
| 100 | % | North Carolina | | | 229,724 |
| 4 | % |
| | | | | | | Other (1) | | | 1,477,937 | | 27 | % |
| | | | | | | Total | | $ | 5,475,082 | | 100 | % |
Asset Class | UPB | Percentage | Geographic Concentrations | UPB | Percentage | |||||||||||||||||||||||||||
Multifamily | $ | 11,097,981 | 88 | % | Texas | $ | 3,038,417 | 24 | % | |||||||||||||||||||||||
Single-Family Rental | 1,324,367 | 10 | % | Florida | 2,128,952 | 17 | % | |||||||||||||||||||||||||
Land | 136,028 | 1 | % | Georgia | 1,174,465 | 9 | % | |||||||||||||||||||||||||
Office | 35,410 | <1 % | North Carolina | 685,945 | 5 | % | ||||||||||||||||||||||||||
Other | 21,220 | <1 % | New York | 531,006 | 4 | % | ||||||||||||||||||||||||||
Total | $ | 12,615,006 | 100 | % | Other (1) | 5,056,221 | 41 | % | ||||||||||||||||||||||||
Total | $ | 12,615,006 | 100 | % |
The overall yield on our loan and investment portfolio in 20202023 was 5.83%9.18% on average assets of $5.25$13.53 billion, which was computed by dividing the interest income earned during 20202023 by the average assets during 2020.2023. Our cost of funds in 20202023 was 3.35%7.15% on average borrowings of $4.50$12.31 billion, which was computed by dividing the interest expense incurred during 20202023 by the average borrowings during 2020. As of2023. At December 31, 2020,2023, our loan and investment portfolio was comprised of 90%94% floating rate loans and 10%6% fixed rate loans.
Note 8.
2023.
Product2023.
| | | | | | | | | | | | | | | | |
| | Product Concentrations |
| Geographic Concentrations | | |||||||||||
| | | | | | | | | | | Wtd. Avg. | | | | |
|
| | | | | | | | | Wtd. Avg. | | Life of | | | | |
|
| | | | | | | Percent | | Servicing Fee | | Servicing | | | | |
|
| | Loan | | | | | of | | Rate | | Portfolio | | | | |
|
Product |
| Count |
| UPB(1) |
| Total |
| (basis points) |
| (years) |
| State |
| UPB |
| |
Fannie Mae |
| 2,712 | | $ | 18,268,268 |
| 74 | % | 52.3 |
| 8.2 |
| Texas |
| 16 | % |
Freddie Mac |
| 1,413 | |
| 4,881,080 |
| 20 | % | 27.9 |
| 9.9 |
| New York |
| 9 | % |
FHA |
| 89 | |
| 752,116 |
| 3 | % | 16.3 |
| 20.3 |
| North Carolina |
| 9 | % |
Private Label (2) | | 40 | | | 726,992 | | 3 | % | 20.0 | | 8.7 | | California | | 9 | % |
Total |
| 4,254 | | $ | 24,628,456 |
| 100 | % | 45.4 |
| 8.9 |
| Florida |
| 7 | % |
| | | | | | | | | | | |
| Georgia |
| 6 | % |
| | | | | | | | | | | |
| New Jersey |
| 4 | % |
| | | | | | | | | | | |
| Other (3) |
| 40 | % |
| | | | | | | | | | | |
| Total |
| 100 | % |
Product Concentrations | Geographic Concentrations | |||||||||||||||||||||||||||||||||||||||||||
Product | Loan Count | UPB (1) | Percent of Total | Wtd. Avg. Servicing Fee Rate (basis points) | Wtd. Avg. Life of Portfolio (years) | State | UPB Percentage of Total | |||||||||||||||||||||||||||||||||||||
Fannie Mae | 2,559 | $ | 21,264,578 | 69 | % | 47.4 | 7.4 | Texas | 11 | % | ||||||||||||||||||||||||||||||||||
Freddie Mac | 1,148 | 5,181,933 | 17 | % | 24.0 | 8.5 | New York | 11 | % | |||||||||||||||||||||||||||||||||||
Private Label | 160 | 2,510,449 | 8 | % | 19.5 | 6.7 | California | 8 | % | |||||||||||||||||||||||||||||||||||
FHA | 105 | 1,359,624 | 4 | % | 14.4 | 19.2 | North Carolina | 8 | % | |||||||||||||||||||||||||||||||||||
Bridge (2) | 4 | 379,425 | 1 | % | 10.9 | 3.2 | Georgia | 6 | % | |||||||||||||||||||||||||||||||||||
SFR - Fixed Rate | 59 | 287,446 | 1 | % | 20.1 | 5.1 | Florida | 6 | % | |||||||||||||||||||||||||||||||||||
Total | 4,035 | $ | 30,983,455 | 100 | % | 39.1 | 8.0 | New Jersey | 5 | % | ||||||||||||||||||||||||||||||||||
Illinois | 4 | % | ||||||||||||||||||||||||||||||||||||||||||
Other (3) | 41 | % | ||||||||||||||||||||||||||||||||||||||||||
Total | 100 | % |
8
financing products best meet the borrower’s needs. Loan originators in every sales office are able tocan offer borrowers the full array of finance products for both the Structured and Agency businesses. After identifying a suitable product, we work with the borrower to prepare a loan application. Upon completion by the borrower, the application is forwarded to our underwriters for due diligence.
With respect
9
underwriting and servicing departments, together with our asset management group, assure that all loan approval terms have been satisfied and conform to lending requirements established for that particular transaction.
Investment Guidelines. Our Board of Directors has adopted general guidelines for our investments and borrowings to the effect that: (1) no investment will be made that would cause us to fail to qualify as a REIT; (2) no investment will be made that would cause us to be regulated as an investment company under the Investment Company Act; (3) no more than 25% of our equity (including junior subordinated notes as equity), determined as of the date of such investment, will be invested in any single asset; (4) no single mezzanine loan or preferred equity investment will exceed $75 million; (5) our Structured Business leverage (including junior subordinated notes as equity) will generally not exceed 80% of the UPB of our assets, in the aggregate; (6) we will not co-invest with Arbor Commercial Mortgage, LLC ("ACM"), our former manager, or any of its affiliates unless such co-investment is otherwise in accordance with these guidelines and its terms are at least as favorable to us as to ACM or the affiliate making such co-investment; and (7) no more than 15% of our gross assets may consist of mortgage-related securities. Any exceptions to the above general guidelines require the approval of our Board of Directors.
10
Financing Policies. We finance our structured finance investments primarily by borrowing against, or “leveraging,” our existing portfolio and using the proceeds to acquire additional mortgage assets. We expect to incur debt such that we will maintain an equity-to-assets ratio no less than 20% (including junior subordinated notes as equity), although the actual ratio may be lower from time to time depending on market conditions and other factors deemed relevant. Our charter and bylaws do not limit the amount of indebtedness we can incur, and the Board of Directors has discretion to deviate from or change our indebtedness policy at any time, provided that we are in compliance with our bank covenants. However, we intend to maintain an adequate capital base to protect against various business environments in which our financing and hedging costs might exceed the interest income from our investments.
11
Our chief financial officer is the chief financial officer of ACM. Our treasurer is the treasurer of ACM. Our chief executive officer, one of our directors and certain aforementioned executive officers are members of ACM’s executive committee and, excluding our chief executive officer, own minority membership interests in ACM.
12
to properties we may acquire. We endeavor to ensure these properties are in compliancecomplying in all material respects with all federal, state and local laws, ordinances and regulations regarding hazardous or toxic substances or petroleum products.
13
To assess and improve employee retention and engagement, we conduct periodic employee surveys and take actions designed to address areas of employee concerns. We believe the combination of competitive compensation, career growth and development opportunities, including promoting employees from within, have helped manage our employee tenure and voluntary turnover.
14
Risks Related to Our Financing and Hedging Activities. We finance a significant amount of our loans and investments through a variety of means, including CLOs, securitizations, credit facilities, equity capital, senior and convertible debt instruments, and other structured financings. These vehicles may contain restrictive covenants and may require us to provide additional collateral or repurchase
With cyber threats increasing in frequency and severity, potential breaches pose a significant threat to our operations, potentially leading to reputational damage, financial losses, and legal repercussions.
15
Risks Related to Our Business
difficult to predict.
•During the course of the pandemic, we experienced, and may experience in the future: ◦ |
declines in the value |
As a result of our adoptionassets, including our loan and securities portfolios, which could result in margin calls and other mandatory prepayments under the credit facilities we use to finance those assets;
In response to the pandemic, Congress passed the Coronavirus Aid, Relief and Economic Security (CARES) Act. Additional COVID-19 federal legislation was enacted as part of the Consolidated Appropriations Act, 2021. Together such legislation has provided billions of dollars of relief to individuals, businesses of all sizes, state and local governments and other public facilities suffering the impact of the pandemic. The CARES Act includes mortgage loan forbearance and modification programs to qualifying borrowers who have difficulty making their loan payments. In addition, the Federal Reserve has announced its
16
commitment to purchase U.S. Treasury securities, asset backed securities, municipal bonds and other assets, in addition to making loans to and purchasing bonds from private companies.
Possible impacts of this legislation and regulatory action include:
Due to the current stimulus actions of the U.S.federal government, the effect of the pandemic may not be fully reflected in our results of operations until future periods.
The COVID-19 pandemic may impact the health and operational efficiencies of our employee base and strain our interactions with our customers.
The possible adverse effects of the pandemic on our workforce and interactions with our customers include:
An economic slowdown, a lengthy or severe recession, or declining real estate values could harm our operations.
17
Prolonged disruptions in the financial markets could affect our ability to obtain financing on reasonable terms and have other adverse effects on us and the market price of our common stock.
Loan loss reserves
18
In 2017, the United Kingdom’s Financial Conduct Authority, which regulatesuse of LIBOR announced that it intendsas of June 30, 2023. The publication of USD LIBOR for certain tenors and all non-USD LIBOR tenors ceased after December 31, 2021. Banks reporting information used to set USD LIBOR for all other tenors were required to stop persuading or compelling banksdoing so after June 30, 2023. We completed our transition away from LIBOR as of June 30, 2023.
a “benchmark.”
19
Our due diligence may not reveal all of a borrower’s liabilities and may not reveal other weaknesses in its business.
We invest in junior participation loans which may be subject to additional risks relating to the privately negotiated structure and terms of the transaction, which may result in losses to us.
In our Structured Business, we may invest in junior participation loans, which are mortgage loans typically secured by a first mortgage on a single commercial property or group of related properties but subordinated to a senior note secured by the same first mortgage on the same collateral. As a result, if a borrower defaults, there may not be sufficient funds remaining to pay the junior participation loan after payment of the senior note. Since each transaction is privately negotiated, the structure of such loans can vary. For example, as a holder of a junior participation loan, our rights to control the process following a borrower default may be limited. A junior participation loan may not be liquid and, consequently, we may be unable to dispose of underperforming or non-performing investments. The higher risks associated with a subordinate position in any investment we make could subject us to increased risk of losses.
20
to exercise extension options under the loan. Revenues from the properties underlying these loans may decrease in an economic downturn, making it more difficult for borrowers to replenish the reserves, which could have an adverse impact on our operating results and cash flows.
21
maintenance needs and other financing obligations. If loan defaults increase, our risk-sharing obligation payments under the Fannie Mae DUS program may increase which could have a material adverse effect on our results of operations and liquidity. In addition, any failure to pay our share of losses under the Fannie Mae DUS program could result in the revocation of our Fannie Mae license and in the exercise of various remedies available to Fannie Mae under the Fannie Mae DUS program, including the transfer of our servicing portfolio to another Fannie Mae approved servicer.
22
A significant portion of our Agency Business'sBusiness’s revenue is derived from loan servicing fees and declines in, or terminations of, servicing engagements, or breaches of servicing agreements, could have a material adverse effect on us.
23
any advances made by the Agency Business are used to reduce the proceeds required to settle any loss share. Our advances may also be reimbursed, to the extent that any recovery on the collateral exceeds the UPB.
Credit
Credit
24
liquidity and limit our ability to leverage our assets. In the event we do not have sufficient liquidity to meet such requirements, lenders can accelerate the indebtedness, increase interest rates and terminate our ability to borrow. Further, lenders may require us to maintain a certain amount of uninvested cash or set aside unlevered assets sufficient to maintain a specified liquidity position. As a result, we may not be able to leverage our assets as fully as we would choose, which could reduce our return on assets. In the event that we are unable to meet these collateral obligations, our financial condition could deteriorate rapidly.
25
We may not be able to find suitable replacement investments for CLO reinvestment periods.
26
and potentially compound the impact of changes in interest rates.changes. Hedging involves certain additional risks such as counterparty risk, the legal enforceability of hedging contracts, the early repayment of hedged transactions and the risk that unanticipated and significant changes in interest rates may cause a significant loss of basis in the contract and a change in current period expense. We cannot give assurances that we will be able to enter into hedging transactions or that such hedging transactions will adequately protect us against the foregoing risks. In addition, cash flow hedges which are not perfectlyhighly correlated (and appropriately designated and documented as such)cash flow hedges) with a variable rate financing will impact our reported income as marked-to-market gains and losses on the ineffective portion of such hedges will be recorded on our statement of income.
27
Risks Relating to Regulatory Matters
28
One of our subsidiaries is required to register under the Investment Advisors Act, and is subject to regulation under that Act.
loans.
GSEs.
In November 2020, the
29
Cybersecurity Risks
We may be significantly influenced by
officer have significant influence over our policies and strategies.
30
Our Board of Directors have approved resolutions under our charter allowing our chief executive officer and ACM, in relation to our chief executive officer’s controlling equity interest, a former director, as well as four outside investors, to own more than the ownership interest limit of our common stock stated in our charter.
31
dividends payable by TRSs constitute qualifying income for purposes of the 95% REIT gross income test, they are non-qualifying income for purposes of the 75% REIT gross income test. Accordingly, if the value of our Agency Business or the income generated thereby increases relative to the value of our other, REIT-compliant assets and income, we or ARSR may fail to satisfy one or more of the Internal Revenue Code requirements applicable to REITs. Although the Agency Business is not expected to adversely affect our ability, or that of ARSR, to continue to qualify as a REIT in the future, no assurances can be given in that regard.
32
Board of Directors, which considers, among other factors, our earnings, financial condition, debt service obligations and applicable debt covenants, REIT qualification requirements and other tax considerations and capital expenditure requirements as our board may deem relevant.
33
The Inflation Reduction Act of 2022 (“IRA”) enacted in August 2022 introduced various new provisions to the Internal Revenue Code. Among those new provisions affecting corporations include the corporate book minimum tax and an excise tax on net stock repurchases effective January 1, 2023. As REITs, we and our subsidiary, ARSR are exempt from these provisions. While such provisions may be applicable to our TRSs, we currently do not expect the IRA to have a material impact on our consolidated financial statements.
The tax and economic policy proposals unveiled by the Biden administration during President Biden’s campaign for the U.S. Presidency includes numerous provisions that would affect both individual and business taxes. Among the known business tax proposals favored by the Biden administration is an increase in the corporate tax rate from the current corporate rate of 21% as enacted under the Tax Reform Act. As the scope of the tax and economic policy agenda of the Biden administration is currently uncertain, we cannot determine how such proposals would impact us or our stockholders.
litigation matters.
34
The Terrorism Risk Insurance Act (“TRIA”), requires insurers to make terrorism insurance available under their property and casualty insurance policies in order to receive federal compensation under TRIA for insured losses. However, this legislation does not regulate the pricing of such insurance. The absence of affordable insurance coverage may adversely affect the real estate lending market, lending volume and the market’s overall liquidity and may reduce the number of suitable investment opportunities available to us and the pace at which we are able to make investments. If the properties that we invest in are unable to obtain affordable insurance coverage, the value of those investments could decline and in the event of an uninsured loss, we could lose all or a portion of our investment.
We are not involved in any material litigation nor,
Plans
| | | | | | |
|
| Number of Securities |
| Weighted Average |
| Number of |
| | to be Issued Upon | | Exercise Price of | | Securities |
| | Exercise of | | Outstanding | | Remaining |
| | Outstanding Options, | | Options, Warrants | | Available for |
Plan Category |
| Warrants and Rights |
| and Rights |
| Future Issuance |
Equity compensation plans approved by security holders: |
|
|
|
|
|
|
2020 Plan (1) |
| – |
| N/A |
| 5,380,635 |
Equity compensation plans not approved by security holders |
| N/A |
| N/A |
| N/A |
Total |
| – |
| N/A |
| 5,380,635 |
35
(1) On June 3, 2020, the stockholders authorized the issuance of an additional 5,000,000 shares of our common stock to be used for grantsduring each of the indicated periods.
Period | Total Number of Shares Purchased (1) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares That May Yet Be Purchased Under the Publicly Announced Plans or Programs | ||||||||||||||||||||||
October 1, 2023 to October 31, 2023 | — | $ | — | — | — | |||||||||||||||||||||
November 1, 2023 to November 30, 2023 | 104,919 | 12.18 | — | — | ||||||||||||||||||||||
December 1, 2023 to December 31, 2023 | — | — | — | — | ||||||||||||||||||||||
104,919 | $ | 12.18 | — |
fourth quarter of 2023.
2024 Russell Investment Group.
| | | | | | | | | | | | |
|
| Period Ending | ||||||||||
Index |
| 12/31/2015 |
| 12/31/2016 |
| 12/31/2017 |
| 12/31/2018 |
| 12/31/2019 |
| 12/31/2020 |
Arbor Realty Trust, Inc. |
| 100.00 |
| 113.81 |
| 144.09 |
| 187.38 |
| 290.80 |
| 320.00 |
Russell 2000 Index |
| 100.00 |
| 121.31 |
| 139.08 |
| 123.76 |
| 155.35 |
| 186.36 |
NAREIT All REIT Index |
| 100.00 |
| 109.28 |
| 119.41 |
| 114.51 |
| 146.66 |
| 138.06 |
FTSE NAREIT Mortgage REITs Index |
| 100.00 |
| 122.85 |
| 147.16 |
| 143.45 |
| 174.05 |
| 141.38 |
Period Ending | ||||||||||||||||||||||||||||||||||||||
Index | 12/31/18 | 12/31/19 | 12/31/20 | 12/31/21 | 12/31/22 | 12/31/23 | ||||||||||||||||||||||||||||||||
Arbor Realty Trust, Inc | 100.00 | 155.27 | 170.87 | 238.23 | 188.93 | 245.93 | ||||||||||||||||||||||||||||||||
Russell 2000 | 100.00 | 125.52 | 150.58 | 172.90 | 137.56 | 160.85 | ||||||||||||||||||||||||||||||||
FTSE Nareit Mortgage REITs | 100.00 | 121.33 | 98.56 | 113.97 | 83.64 | 96.48 | ||||||||||||||||||||||||||||||||
FTSE Nareit All REITs | 100.00 | 128.07 | 120.56 | 168.64 | 126.30 | 140.81 |
36
Item 6. Selected Financial Data
Omitted pursuant to amendments to Item 301 of Regulation S-K effective February 10, 2021.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
securitization (“APL certificates”).
37
and the number of loan originations.loans. In addition, we periodically receive distributions from our equity investments. It is difficult to forecast the timing of such payments, which can be substantial in any given quarter. We account for structured transactions within our Structured Business.
2023
Financing Activity.
38•
Adoption•Redeemed $78.9 million of Current Expected Credit Losses (“CECL”)our 5.625% senior unsecured notes at maturity with cash.
Structured Business Activity.runoff; and
prior year.
The pandemic has caused a further dislocation in the capital markets resulting inand a continual reduction of available liquidity. Many commercial mortgage REITsInstability in the banking sector, such as the recent bank failures and consolidations, further contributed to the tightening liquidity conditions in the equity and capital markets and has affected the availability and increased the cost of capital. The increased cost of credit, or degradation in debt financing terms, may impact our ability to identify and execute investments on attractive terms, or at all.
Our Agency Business requires limited capital to grow, as originations are financed through warehouse facilities for generally up to 60 days before the loans are sold, therefore, this lack oftightening liquidity has notconditions in equity and capital markets should not have a substantial impact on our ability to growsustain this business. However, our Structured Business is more reliant on the
The federal government, Fannie Maeportfolio. We employ rigorous risk management and Freddie Mac have made certain forbearance and non-eviction programs availableunderwriting practices to borrowers and tenants should they need to counteract any short-term pressure on their properties from COVID-19 and its impact onproactively maintain the economy. For borrowers, in order to qualify for a forbearance, they need to demonstrate they have been adversely affected by the pandemic and their ability to make their loan payments has been impacted. All loan and rent payments that are suspended remain the obligations of the borrowers and tenants.
As of December 31, 2020, our Agency Business had approved forbearances related to approximately 0.5%quality of our $18.27 billion Fannie Mae DUSloan portfolio and approximately 5.2%work very closely with borrowers to mitigate potential losses while safeguarding the integrity of our $4.88 billion Freddie Mac portfolio. We are closely monitoring and managingGiven the requests for forbearances and there could potentially be additional economic stress during 2021.
39
Interest rates have trended downward during 2020 and remain at historically low levels. While lowerCurrently, the high interest rates generally have a positive impact on origination volume as borrowers look to refinance loans to take advantage of lower rates,rate environment positively impacts our net interest income may be negatively impacted as higher yielding loans are paid off and replaced with lower yielding loans. However, we are somewhat insulated from decreasing interest rates, since a large portion of our structured loan portfolio has LIBOR floors, which could increaseexceeds our net interest income incorresponding debt balances and the future if rates remain at these historically low levels. Conversely, if interest rates were to rise, it could negatively impactvast majority of our net interest income. An increase in rates would cause an increase in interest expense as mostloan portfolio is floating-rate based on SOFR. In addition, a greater portion of our debt is variable. However, since a large portion offixed-rate (convertible and senior unsecured notes), as compared to our structured loan portfolio, has LIBOR floors that are in the money, any increaseand will not reset as interest rates rise. Therefore, increases in interest income due to rising interest rates is not likely to be as substantial asgreater than the corresponding increase in interest expense.
expense on our variable rate debt. Additionally, we earn interest on our escrow and cash balances, so an increasing interest rate environment will increase our earnings on such balances. See “Quantitative and Qualitative Disclosures about Market Risk” below for additional details. Conversely, such rising interest rates have negatively impacted real estate values and have limited certain borrowers abilities to make debt service payments, which may limit new mortgage loan originations and increase the likelihood of additional delinquencies and losses incurred on defaulted loans if the reduction in the collateral value is insufficient to repay their loans in full.
2022:
| | | | | | | |
| | Year Ended December 31, |
| ||||
| | 2020 |
| 2019 |
| ||
Loans originated (1) | | $ | 2,433,679 | | $ | 2,803,251 | |
Number of loans | |
| 137 | |
| 173 | |
Weighted average interest rate | |
| 5.67 | % |
| 6.50 | % |
| | | | | | | |
(1) We committed to fund six SFR build-to-rent bridge loans totaling $197.8 million in the third and fourth quarters of 2020. | | | | | | | |
| | | | | | | |
Loans paid-off / paid-down | | $ | 1,208,071 | | $ | 1,748,387 | |
Number of loans | |
| 85 | |
| 137 | |
Weighted average interest rate | |
| 6.56 | % |
| 7.36 | % |
| | | | | | | |
Loans extended | | $ | 748,640 | | $ | 808,140 | |
Number of loans | |
| 43 | |
| 45 | |
40
Year Ended December 31, | |||||||||||||||||
2023 | 2022 | ||||||||||||||||
Loans originated | $ | 983,343 | $ | 6,151,647 | |||||||||||||
Number of loans | 150 | 318 | |||||||||||||||
Weighted average interest rate | 10.03 | % | 5.72 | % | |||||||||||||
Loan runoff | $ | 3,354,055 | $ | 3,818,554 | |||||||||||||
Number of loans | 187 | 177 | |||||||||||||||
Weighted average interest rate | 9.21 | % | 7.20 | % | |||||||||||||
Loans extended | $ | 1,744,127 | $ | 1,684,274 | |||||||||||||
Number of loans | 64 | 66 |
Loans held-for-sale from the Agency Business increased $125.6$197.6 million, primarily related tofrom loan originations exceeding sales by $124.2$217.6 million as noted in the following table (in thousands). Loan sales includes $727.2 million oftable. Our GSE loans are generally sold within 60 days, while our Private Label loans which wereare either sold in connection withinstantaneously or pooled and securitized, or sold, within 180 days from the loan origination date. Activity from our first Private Label multifamily mortgage loan securitization inAgency Business portfolio is comprised of the second quarter of 2020.
| | | | | | |
| | | | | | |
| | | | | | |
| | Loan | | | | |
|
| Originations |
| Loan Sales | ||
Fannie Mae | | $ | 5,041,925 | | $ | 4,771,113 |
Freddie Mac | | | 960,508 | |
| 816,802 |
Private Label | |
| 382,191 | |
| 727,154 |
FHA | |
| 327,345 | |
| 272,659 |
Total | | $ | 6,711,969 | | $ | 6,587,728 |
Capitalized mortgage servicing rights increased $93.6 million, primarily due to MSRs recorded on new loan originations, partially offset by amortization and write-offs. Our capitalized mortgage servicing rights represent the estimated value of our rights to service mortgage loans for others. At December 31, 2020, the weighted average estimated life remaining of our MSRs was 8.6 years.
following (in thousands):
Loan Originations | Loan Sales | ||||||||||
Fannie Mae | $ | 3,773,532 | $ | 3,469,340 | |||||||
Freddie Mac | 756,827 | 715,530 | |||||||||
Private Label | 299,934 | 441,319 | |||||||||
FHA | 257,199 | 240,079 | |||||||||
SFR - Fixed Rate | 19,328 | 22,931 | |||||||||
Total | $ | 5,106,820 | $ | 4,889,199 |
Real estate owned decreased $11.7 million,remained relatively flat, primarily due to the sale of our hotel property.
investments made in two new joint ventures, offset by distributions received on existing joint ventures.
an increase in unsecured loan fundings.
2022:
Collateralized loan obligations increased $387.2portfolio outpacing new originations.
We completed the unwind of our $70.0 million Debt Fund.
Senior unsecured notes increased $343.0 million, primarily due to our issuances of $275.0 million of 4.50% notes and $70.8 million of 8.00% notes.
Convertible senior unsecured notes decreased $16.2 million, primarily due to partial redemption of our 5.25% convertible notes.
previously committed loan originations.
Other liabilities increased $63.3 million, primarily due to an increase in our operating lease liabilities as a result of office lease extensions and an increase in accrued compensation.
estimated losses under CECL.
41
Distributions
The following table presents dividends declared (on a per share basis) for 2020:
| | | | | | | | | | | | | | | |
Common Stock |
| Preferred Stock | |||||||||||||
| | | | | | | | Dividend (1) | |||||||
Declaration Date |
| Dividend |
| Declaration Date |
| Series A |
| Series B |
| Series C | |||||
February 13, 2020 | | $ | 0.30 | | | January 31, 2020 | | $ | 0.515625 | | $ | 0.484375 | | $ | 0.53125 |
May 6, 2020 | | $ | 0.30 | | | May 1, 2020 | | $ | 0.515625 | | $ | 0.484375 | | $ | 0.53125 |
July 29, 2020 | | $ | 0.31 | | | July 29, 2020 | | $ | 0.515625 | | $ | 0.484375 | | $ | 0.53125 |
October 28,2020 | | $ | 0.32 | | | October 28,2020 | | $ | 0.515625 | | $ | 0.484375 | | $ | 0.53125 |
Common Stock – On February 17, 2021, the Board of Directors declared a cash dividend of $0.33 per share of common stock. The dividend is payable on March 19, 2021 to common stockholders of record as of the close of business on March 3, 2021.
Preferred Stock – On February 1, 2021, the Board of Directors declared a cash dividend of $0.515625 per share of 8.25% Series A preferred stock; a cash dividend of $0.484375 per share of 7.75% Series B preferred stock; and a cash dividend of $0.53125 per share of 8.50% Series C preferred stock. These amounts reflect dividends from December 1, 2020 through February 28, 2021 and are payable on March 1, 2021 to preferred stockholders of record on February 15, 2021.
Deferred Compensation
During 2020, we issued 360,885 shares of restricted stock to our employees (including our chief executive officer) and 52,735 shares to the independent members of the Board of Directors. Our chief executive officer was also granted 275,569 shares of performance-based restricted stock units and 313,152 shares of performance-based restricted stock as a result of achieving goals related to the integration of our 2016 acquisition of ACM's agency platform (the “Acquisition”).
Our chief executive officer net settled 421,348 shares of fully vested performance-based restricted stock units for 215,014 common shares and 357,569 shares of fully vested performance-based restricted stock for 182,467 common shares. We also withheld 158,722 shares of restricted common stock from our employees (including our chief executive officer) to net settle and pay their respective withholding taxes in connection with awards that vested. See Note 1716 for details of our dividends declared and our deferred compensation transactions.
transactions during 2023.
| | | | | | | | | | | | | | | | | | | | |
|
| December 31, 2020 |
| |||||||||||||||||
| | | | | | | Wtd. Avg. | | Wtd. Avg. | | | | | | | | Annualized | | |
|
| | Servicing | | | | Age of | | Portfolio | | | | | | | | Prepayments | | Delinquencies |
| |
| | Portfolio | | Loan | | Portfolio | | Maturity | | Interest Rate Type | | Wtd. Avg. | | as a Percentage | | as a Percentage |
| |||
Product |
| UPB |
| Count |
| (in years) |
| (in years) |
| Fixed |
| Adjustable |
| Note Rate |
| of Portfolio (1) |
| of Portfolio (2) |
| |
Fannie Mae |
| $ | 18,268,268 |
| 2,712 |
| 2.8 |
| 9.0 |
| 97 | % | 3 | % | 4.12 | % | 6.40 | % | 0.33 | % |
Freddie Mac | |
| 4,881,080 |
| 1,413 |
| 2.6 |
| 11.7 |
| 88 | % | 12 | % | 3.99 | % | 11.47 | % | 0.65 | % |
FHA | | | 752,116 | | 89 | | 3.0 | | 32.9 | | 100 | % | — | % | 3.39 | % | 33.60 | % | — | % |
Private Label | |
| 726,992 |
| 40 |
| 1.0 |
| 9.1 |
| 100 | % | — | % | 3.81 | % | — | % | — | % |
Total | | $ | 24,628,456 |
| 4,254 |
| 2.7 |
| 10.3 |
| 95 | % | 5 | % | 4.06 | % | 8.05 | % | 0.37 | % |
| | | | | | | | | | | | | | | | | | | | |
|
| December 31, 2019 |
| |||||||||||||||||
Fannie Mae |
| $ | 14,832,844 |
| 2,349 |
| 3.0 |
| 8.6 |
| 95 | % | 5 | % | 4.52 | % | 11.37 | % | 0.23 | % |
Freddie Mac | |
| 4,534,714 |
| 1,475 |
| 2.2 |
| 12.6 |
| 96 | % | 4 | % | 4.23 | % | 11.37 | % | 0.57 | % |
FHA | |
| 691,519 |
| 92 |
| 3.6 |
| 32.1 |
| 100 | % | — | % | 3.71 | % | 3.98 | % | 0.00 | % |
Total | | $ | 20,059,077 |
| 3,916 |
| 2.9 |
| 10.3 |
| 95 | % | 5 | % | 4.43 | % | 11.12 | % | 0.30 | % |
December 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product | Portfolio UPB | Loan Count | Wtd. Avg. Age of Portfolio (years) | Wtd. Avg. Life of Portfolio (years) | Interest Rate Type | Wtd. Avg. Note Rate | Annualized Prepayments as a % of Portfolio (1) | Delinquencies as a % of Portfolio (2) | ||||||||||||||||||||||||||||||||||||||||||||||||
Fixed | Adjustable | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fannie Mae | $ | 21,264,578 | 2,559 | 3.4 | 7.4 | 96 | % | 4 | % | 4.50 | % | 5.09 | % | 0.86 | % | |||||||||||||||||||||||||||||||||||||||||
Freddie Mac | 5,181,933 | 1,148 | 3.2 | 8.5 | 83 | % | 17 | % | 4.72 | % | 7.92 | % | 4.39 | % | ||||||||||||||||||||||||||||||||||||||||||
Private Label | 2,510,449 | 160 | 2.5 | 6.7 | 100 | % | — | 4.02 | % | — | — | |||||||||||||||||||||||||||||||||||||||||||||
FHA | 1,359,624 | 105 | 3.0 | 19.2 | 100 | % | — | 3.52 | % | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Bridge | 379,425 | 4 | 1.2 | 3.2 | 63 | % | 37 | % | 7.14 | % | — | — | ||||||||||||||||||||||||||||||||||||||||||||
SFR - Fixed Rate | 287,446 | 59 | 2.3 | 5.1 | 100 | % | — | 5.20 | % | 1.18 | % | — | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 30,983,455 | 4,035 | 3.2 | 8.0 | 94 | % | 6 | % | 4.49 | % | 4.83 | % | 1.33 | % | |||||||||||||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fannie Mae | $ | 19,038,124 | 2,460 | 3.1 | 8.0 | 96 | % | 4 | % | 4.20 | % | 12.71 | % | 0.13 | % | |||||||||||||||||||||||||||||||||||||||||
Freddie Mac | 5,153,207 | 1,214 | 2.8 | 9.0 | 84 | % | 16 | % | 4.26 | % | 19.78 | % | 0.27 | % | ||||||||||||||||||||||||||||||||||||||||||
Private Label | 2,074,859 | 130 | 1.9 | 7.6 | 100 | % | — | 3.60 | % | — | — | |||||||||||||||||||||||||||||||||||||||||||||
FHA | 1,155,893 | 96 | 2.5 | 19.5 | 100 | % | — | 3.17 | % | 1.59 | % | — | ||||||||||||||||||||||||||||||||||||||||||||
Bridge | 301,182 | 4 | 0.9 | 1.7 | — | 100 | % | 7.68 | % | — | — | |||||||||||||||||||||||||||||||||||||||||||||
SFR - Fixed Rate | 274,764 | 53 | 1.4 | 6.0 | 100 | % | — | 5.04 | % | 0.30 | % | — | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 27,998,029 | 3,957 | 2.9 | 8.6 | 93 | % | 7 | % | 4.17 | % | 12.35 | % | 0.14 | % |
Our Agency Business servicing portfolio represents commercial real estate loans, originated in our Agency Business, which are generally transferred or sold within 60 days from the date the loan is funded. Primarily all of the loans in our servicing portfolio are collateralized by multifamily properties. In addition, we are generally required to share in the risk of any losses associated with loans sold under the Fannie Mae DUS program, see Note 12.
11.
2022
| | | | | | | | | | | | |
| | Year Ended December 31, | | Increase / (Decrease) |
| |||||||
|
| 2020 |
| 2019 |
| Amount |
| Percent | | |||
| | | | | | | | | | | | |
Interest income | | $ | 339,465 | | $ | 315,940 | | $ | 23,525 |
| 7 | % |
Interest expense | |
| 169,216 | |
| 186,399 | |
| (17,183) |
| (9) | % |
Net interest income | |
| 170,249 | |
| 129,541 | |
| 40,708 |
| 31 | % |
Other revenue: | |
| | |
|
| |
|
|
|
| |
Gain on sales, including fee-based services, net | |
| 94,607 | |
| 65,652 | |
| 28,955 |
| 44 | % |
Mortgage servicing rights | |
| 165,517 | |
| 90,761 | |
| 74,756 |
| 82 | % |
Servicing revenue, net | |
| 54,385 | |
| 54,542 | |
| (157) |
| — | % |
Property operating income | |
| 3,976 | |
| 9,674 | |
| (5,698) |
| (59) | % |
Loss on derivative instruments, net | | | (58,335) | | | (1,962) | | | (56,373) | | nm | |
Other income, net | |
| 4,109 | |
| 1,178 | |
| 2,931 |
| nm | |
Total other revenue | |
| 264,259 | |
| 219,845 | |
| 44,414 |
| 20 | % |
Other expenses: | |
|
| |
|
| |
|
|
|
| |
Employee compensation and benefits | |
| 144,380 | |
| 122,102 | |
| 22,278 |
| 18 | % |
Selling and administrative | |
| 37,348 | |
| 40,329 | |
| (2,981) |
| (7) | % |
Property operating expenses | |
| 4,898 | |
| 10,220 | |
| (5,322) |
| (52) | % |
Depreciation and amortization | |
| 7,640 | |
| 7,510 | |
| 130 |
| 2 | % |
Impairment loss on real estate owned | |
| — | |
| 1,000 | |
| (1,000) |
| nm | |
Provision for loss sharing (net of recoveries) | |
| 14,822 | |
| 1,147 | |
| 13,675 |
| nm | |
Provision for credit losses (net of recoveries) | |
| 61,110 | |
| — | |
| 61,110 |
| nm | |
Total other expenses | |
| 270,198 | |
| 182,308 | |
| 87,890 |
| 48 | % |
Income before extinguishment of debt, sale of real estate, income from equity affiliates and income taxes | |
| 164,310 | |
| 167,078 | |
| (2,768) |
| (2) | % |
Loss on extinguishment of debt | | | (3,546) | | | (7,439) | | | 3,893 | | (52) | % |
Loss on sale of real estate | |
| (375) | |
| — | |
| (375) |
| nm | |
Income from equity affiliates | |
| 76,161 | |
| 10,635 | |
| 65,526 |
| nm | |
Provision for income taxes | |
| (40,393) | |
| (15,036) | |
| (25,357) |
| 169 | % |
Net income | |
| 196,157 | |
| 155,238 | |
| 40,919 |
| 26 | % |
Preferred stock dividends | |
| 7,554 | |
| 7,554 | |
| — |
| — | |
Net income attributable to noncontrolling interest | |
| 25,208 | |
| 26,610 | |
| (1,402) |
| (5) | % |
Net income attributable to common stockholders | | $ | 163,395 | | $ | 121,074 | | $ | 42,321 |
| 35 | % |
Year Ended December 31, | Increase / (Decrease) | |||||||||||||||||||||||||
2023 | 2022 | Amount | Percent | |||||||||||||||||||||||
Interest income | $ | 1,331,219 | $ | 948,401 | $ | 382,818 | 40 | % | ||||||||||||||||||
Interest expense | 903,228 | 557,617 | 345,611 | 62 | % | |||||||||||||||||||||
Net interest income | 427,991 | 390,784 | 37,207 | 10 | % | |||||||||||||||||||||
Other revenue: | ||||||||||||||||||||||||||
Gain on sales, including fee-based services, net | 72,522 | 55,816 | 16,706 | 30 | % | |||||||||||||||||||||
Mortgage servicing rights | 69,912 | 69,346 | 566 | 1 | % | |||||||||||||||||||||
Servicing revenue, net | 130,449 | 92,192 | 38,257 | 41 | % | |||||||||||||||||||||
Property operating income | 5,708 | 1,877 | 3,831 | nm | % | |||||||||||||||||||||
Gain (loss) on derivative instruments, net | 6,763 | 26,609 | (19,846) | (75) | % | |||||||||||||||||||||
Other income (loss), net | 7,667 | (17,563) | 25,230 | nm | % | |||||||||||||||||||||
Total other revenue | 293,021 | 228,277 | 64,744 | 28 | % | |||||||||||||||||||||
Other expenses: | ||||||||||||||||||||||||||
Employee compensation and benefits | 159,788 | 161,825 | (2,037) | (1) | % | |||||||||||||||||||||
Selling and administrative | 51,260 | 53,990 | (2,730) | (5) | % | |||||||||||||||||||||
Property operating expenses | 5,897 | 2,136 | 3,761 | 176 | % | |||||||||||||||||||||
Depreciation and amortization | 9,743 | 8,732 | 1,011 | 12 | % | |||||||||||||||||||||
Provision for loss sharing (net of recoveries) | 15,695 | 1,862 | 13,833 | nm | % | |||||||||||||||||||||
Provision for credit losses (net of recoveries) | 73,446 | 21,169 | 52,277 | nm | % | |||||||||||||||||||||
Litigation settlement | — | 7,350 | (7,350) | nm | % | |||||||||||||||||||||
Total other expenses | 315,829 | 257,064 | 58,765 | 23 | % | |||||||||||||||||||||
Income before extinguishment of debt, income from equity affiliates and income taxes | 405,183 | 361,997 | 43,186 | 12 | % | |||||||||||||||||||||
Loss on extinguishment of debt | (1,561) | (4,933) | 3,372 | (68) | % | |||||||||||||||||||||
Income from equity affiliates | 24,281 | 14,247 | 10,034 | 70 | % | |||||||||||||||||||||
Provision for income taxes | (27,347) | (17,484) | (9,863) | 56 | % | |||||||||||||||||||||
Net income | 400,556 | 353,827 | 46,729 | 13 | % | |||||||||||||||||||||
Preferred stock dividends | 41,369 | 40,954 | 415 | 1 | % | |||||||||||||||||||||
Net income attributable to noncontrolling interest | 29,122 | 28,044 | 1,078 | 4 | % | |||||||||||||||||||||
Net income attributable to common stockholders | $ | 330,065 | $ | 284,829 | $ | 45,236 | 16 | % |
43
The following table presents the average balance of our Structured Business interest-earning assets and interest-bearing liabilities, associated interest income (expense) and the corresponding weighted average yields ($ in thousands):
| | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| ||||||||||||||
| | 2020 | | 2019 | | ||||||||||||
| | Average | | Interest | | W/A Yield / | | Average | | Interest | | W/A Yield / |
| ||||
| | Carrying | | Income / | | Financing | | Carrying | | Income / | | Financing |
| ||||
|
| Value (1) |
| Expense |
| Cost (2) |
| Value (1) |
| Expense |
| Cost (2) |
| ||||
Structured Business interest-earning assets: |
| |
|
| |
|
|
|
| |
|
| |
|
|
| |
| | | | | | | | | | | | | | | | | |
Bridge loans | | $ | 4,402,763 | | $ | 259,845 |
| 5.90 | % | $ | 3,331,336 | | $ | 239,955 |
| 7.20 | % |
Preferred equity investments | |
| 207,736 | |
| 22,701 |
| 10.93 | % |
| 180,336 | |
| 20,679 |
| 11.47 | % |
Mezzanine / junior participation loans | |
| 174,622 | |
| 15,421 |
| 8.83 | % |
| 183,324 | |
| 22,529 |
| 12.29 | % |
Other | | | 82,604 | | | 4,968 | | 6.01 | % | | 36,796 | | | 1,130 | | 3.07 | % |
Core interest-earning assets | |
| 4,867,725 | |
| 302,935 |
| 6.22 | % |
| 3,731,792 | |
| 284,293 |
| 7.62 | % |
Cash equivalents | |
| 382,303 | |
| 2,958 |
| 0.77 | % |
| 382,492 | |
| 5,548 |
| 1.45 | % |
Total interest-earning assets | | $ | 5,250,028 | | $ | 305,893 |
| 5.83 | % | $ | 4,114,284 | | $ | 289,841 |
| 7.04 | % |
| | | | | | | | | | | | | | | | | |
Structured Business interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | | | | | | |
CLO | | $ | 2,462,799 | | $ | 56,800 |
| 2.31 | % | $ | 1,816,217 | | $ | 80,094 |
| 4.41 | % |
Warehouse lines | |
| 985,693 | |
| 34,444 |
| 3.49 | % |
| 871,407 | |
| 43,018 |
| 4.94 | % |
Unsecured debt | |
| 877,420 | |
| 52,378 |
| 5.97 | % |
| 488,865 | |
| 32,930 |
| 6.74 | % |
Trust preferred | |
| 154,336 | |
| 5,911 |
| 3.83 | % |
| 154,336 | |
| 8,314 |
| 5.39 | % |
Debt fund | |
| 22,378 | |
| 1,431 |
| 6.38 | % |
| 70,000 | |
| 5,446 |
| 7.78 | % |
Total interest-bearing liabilities | | $ | 4,502,626 | |
| 150,964 |
| 3.35 | % | $ | 3,400,825 | |
| 169,802 |
| 4.99 | % |
Net interest income | | | | | $ | 154,929 |
|
| |
|
| | $ | 120,039 |
|
| |
Year ended December 31, | |||||||||||||||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||||||||||||||
Average Carrying Value (1) | Interest Income / Expense | W/A Yield / Financing Cost (2) | Average Carrying Value (1) | Interest Income / Expense | W/A Yield / Financing Cost (2) | ||||||||||||||||||||||||||||||
Structured Business interest-earning assets: | |||||||||||||||||||||||||||||||||||
Bridge loans | $ | 13,190,889 | $ | 1,208,180 | 9.16 | % | $ | 13,997,117 | $ | 859,339 | 6.14 | % | |||||||||||||||||||||||
Mezzanine / junior participation loans | 224,784 | 23,939 | 10.65 | % | 202,484 | 19,473 | 9.62 | % | |||||||||||||||||||||||||||
Preferred equity investments | 90,960 | 5,892 | 6.48 | % | 142,738 | 15,219 | 10.66 | % | |||||||||||||||||||||||||||
Other | 20,635 | 3,370 | 16.33 | % | 36,262 | 6,141 | 16.94 | % | |||||||||||||||||||||||||||
Core interest-earning assets | 13,527,268 | 1,241,381 | 9.18 | % | 14,378,601 | 900,172 | 6.26 | % | |||||||||||||||||||||||||||
Cash equivalents | 913,382 | 38,052 | 4.17 | % | 585,281 | 3,450 | 0.59 | % | |||||||||||||||||||||||||||
Total interest-earning assets | $ | 14,440,650 | $ | 1,279,433 | 8.86 | % | $ | 14,963,882 | $ | 903,622 | 6.04 | % | |||||||||||||||||||||||
Structured Business interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
CLO | $ | 7,081,594 | $ | 496,049 | 7.00 | % | $ | 7,496,568 | $ | 265,560 | 3.54 | % | |||||||||||||||||||||||
Credit and repurchase facilities | 3,185,888 | 251,519 | 7.89 | % | 3,967,648 | 173,365 | 4.37 | % | |||||||||||||||||||||||||||
Unsecured debt | 1,658,986 | 103,147 | 6.22 | % | 1,610,809 | 91,604 | 5.69 | % | |||||||||||||||||||||||||||
Q Series securitization | 229,734 | 17,158 | 7.47 | % | 11,033 | 703 | 6.37 | % | |||||||||||||||||||||||||||
Trust preferred | 154,336 | 12,729 | 8.25 | % | 154,336 | 7,427 | 4.81 | % | |||||||||||||||||||||||||||
Total interest-bearing liabilities | $ | 12,310,538 | 880,602 | 7.15 | % | $ | 13,240,394 | 538,659 | 4.07 | % | |||||||||||||||||||||||||
Net interest income | $ | 398,831 | $ | 364,963 |
benchmark interest rates.
benchmark index rates.
44
volume ($549.4 million). The increase in the sales margin was primarily driven by a higher percentage of Fannie Mae loans sold in 2023, which contain higher sales margins.
Other Revenue
Property operating income and expenses both decreased in 2020escrow balances as a result of lower occupancy and closureincreases in benchmark index rates, partially offset by less prepayment penalties received from early runoff.
Agency Business and $11.2 million of losses recognized in 2022 related to sales of bridge loans in our Structured Business.
incentive compensation.
early 2023.
14.
other-than-temporary impairment in our North Vermont Avenue investment.
45
Comparison of Results of Operations for Years Ended 2019December 31, 2022 and 2018
2021
We are monitoring the COVID-19 pandemic
In addition to our ability to extend our warehousedebt from credit and repurchase facilities we have approximately $400 million in cash and available liquidity as well as other liquidity sources, including our $24.63 billion agency servicing portfolio, which is mostly prepayment protected and generates approximately $112.0 million a year in recurring cash flow.
At December 31, 2020, we had $86.5 million of securities financed with $38.5 million of debt that waswere subject to margin calls related to changes in interest spreads. During 2020,
recurring cash flow.
Cash flows provided by financing activities totaled $1.13 billion during the year ended December 31, 2020 and consisted primarily of net cash inflows of $557.6$598.8 million from debt facility activities (financed loan originations(facility paydowns were greater than facility paydowns)financed loan originations), net proceeds of $384.9 million from CLO activity, $345.8 million received from the issuances of senior unsecured notes
46
and $183.6 million received from common stock issuances, partially offset by, $173.1$380.6 million of distributions to our stockholders and OP Unit holders $70.0and $54.6 million forfrom senior unsecured notes activity, partially offset by $193.7 million of proceeds from the unwindissuance of the Debt Fund and $32.2 million for the redemption of OP units.
common stock.
12.
| | | | | | | | | | | |
| | December 31, 2020 | |||||||||
| | | | | | | | | | | Maturity |
Debt Instruments |
| Commitment (1) |
| UPB (2) |
| | Available |
| Dates (3) | ||
Structured Business |
| |
|
| | |
| |
|
|
|
Credit facilities and repurchase agreements | | $ | 1,943,726 | | $ | 1,286,100 | | $ | 657,626 |
| 2021 - 2022 |
Collateralized loan obligations (4) | |
| 2,532,343 | |
| 2,532,343 | |
| — |
| 2021 - 2025 |
Senior unsecured notes | |
| 670,750 | |
| 670,750 | |
| — |
| 2023 - 2027 |
Convertible senior unsecured notes | |
| 278,300 | |
| 278,300 | |
| — |
| 2021 - 2022 |
Junior subordinated notes | |
| 154,336 | |
| 154,336 | |
| — |
| 2034 - 2037 |
Structured Business total | |
| 5,579,455 | |
| 4,921,829 | |
| 657,626 |
|
|
| | | | | | | | | | | |
Agency Business | |
|
| |
|
| |
|
|
|
|
Credit facilities (5) | |
| 2,275,000 | |
| 952,622 | |
| 1,322,378 |
| 2021 |
Consolidated total | | $ | 7,854,455 | | $ | 5,874,451 | | $ | 1,980,004 |
|
|
Debt Instruments | December 31, 2023 | |||||||||||||||||||||||||
Commitment | UPB (1) | Available | Maturity Dates (2) | |||||||||||||||||||||||
Structured Business | ||||||||||||||||||||||||||
Credit and repurchase facilities | $ | 6,576,161 | $ | 2,829,341 | $ | 3,746,820 | 2024 - 2027 | |||||||||||||||||||
Securitized debt (3) | 6,956,284 | 6,956,284 | — | 2025 - 2028 | ||||||||||||||||||||||
Senior unsecured notes | 1,345,000 | 1,345,000 | — | 2024 - 2028 | ||||||||||||||||||||||
Convertible senior unsecured notes | 287,500 | 287,500 | — | 2025 | ||||||||||||||||||||||
Junior subordinated notes | 154,336 | 154,336 | — | 2034 - 2037 | ||||||||||||||||||||||
Structured Business total | 15,319,281 | 11,572,461 | 3,746,820 | |||||||||||||||||||||||
Agency Business | ||||||||||||||||||||||||||
Credit and repurchase facilities (4) | 2,100,531 | 413,598 | 1,686,933 | 2024 - 2025 | ||||||||||||||||||||||
Consolidated total | $ | 17,419,812 | $ | 11,986,059 | $ | 5,433,753 |
These
Quarter Ended | Quarterly Average UPB | End of Period UPB | Maximum UPB at Any Month End | |||||||||||||||||
December 31, 2023 | $ | 3,274,139 | $ | 3,242,938 | $ | 3,251,330 | ||||||||||||||
September 30, 2023 | 3,432,725 | 3,398,451 | 3,463,825 | |||||||||||||||||
June 30, 2023 | 3,565,377 | 3,588,538 | 3,677,755 | |||||||||||||||||
March 31, 2023 | 3,691,191 | 3,662,756 | 3,696,760 | |||||||||||||||||
December 31, 2022 | 4,441,774 | 3,856,009 | 4,403,368 | |||||||||||||||||
September 30, 2022 | 4,534,744 | 4,642,911 | 4,642,911 | |||||||||||||||||
June 30, 2022 | 4,581,226 | 4,561,393 | 4,926,070 | |||||||||||||||||
March 31, 2022 | 4,224,503 | 4,315,388 | 4,842,785 | |||||||||||||||||
December 31, 2021 | 3,771,684 | 4,493,699 | 4,493,699 | |||||||||||||||||
September 30, 2021 | 3,191,129 | 3,409,598 | 3,409,598 | |||||||||||||||||
June 30, 2021 | 2,327,114 | 2,021,412 | 2,588,456 | |||||||||||||||||
March 31, 2021 | 2,177,350 | 2,220,307 | 2,262,160 |
10.
below for additional details. Conversely, such rising interest rates have negatively impacted real estate values and have limited certain borrowers abilities to make debt service payments, which may limit new mortgage loan originations and increase the likelihood of additional delinquencies and losses incurred on defaulted loans if the reduction in the collateral value is insufficient to repay their loans in full.
47
SignificantCritical Accounting Estimates
We are presenting distributable earnings because we believe it is an important supplemental measure of our operating performance and is useful to investors, analysts and other parties in the evaluation of REITs and their ability to provide dividends to stockholders. Dividends are one of the principal reasons investors invest in REITs. To maintain REIT status, REITs are required to distribute at least 90% of their REIT-taxable income. We consider distributable earnings in determining our quarterly dividend and believe that, over time, distributable earnings is a useful indicator of our dividends per share.
debt and redemption of preferred stock.
48
Distributable earnings isare as follows ($ in thousands, except share and per share data):
Year Ended December 31, | |||||||||||||||||
2023 | 2022 | 2021 | |||||||||||||||
Net income attributable to common stockholders | $ | 330,065 | $ | 284,829 | $ | 317,412 | |||||||||||
Adjustments: | |||||||||||||||||
Net income attributable to noncontrolling interest | 29,122 | 28,044 | 38,507 | ||||||||||||||
Income from mortgage servicing rights | (69,912) | (69,346) | (130,230) | ||||||||||||||
Deferred tax (benefit) provision | (7,349) | (1,741) | 10,892 | ||||||||||||||
Amortization and write-offs of MSRs | 77,829 | 104,378 | 91,356 | ||||||||||||||
Depreciation and amortization | 16,425 | 11,069 | 10,900 | ||||||||||||||
Loss on extinguishment of debt | 1,561 | 4,933 | 3,374 | ||||||||||||||
Provision for credit losses, net | 68,642 | 25,077 | (39,856) | ||||||||||||||
(Gain) loss on derivative instruments, net | (8,844) | 3,480 | 432 | ||||||||||||||
Stock-based compensation | 14,940 | 14,973 | 9,929 | ||||||||||||||
Loss on redemption of preferred stock | — | — | 3,479 | ||||||||||||||
Gain on real estate from settlement of loan | — | — | (2,466) | ||||||||||||||
Distributable earnings (1) | $ | 452,479 | $ | 405,696 | $ | 313,729 | |||||||||||
Diluted weighted average shares outstanding - GAAP (1) | 218,843,613 | 199,112,630 | 156,089,595 | ||||||||||||||
Less: Convertible notes dilution (2) | (17,294,392) | (16,888,226) | — | ||||||||||||||
Diluted weighted average shares outstanding - distributable earnings (1) | 201,549,221 | 182,224,404 | 156,089,595 | ||||||||||||||
Diluted distributable earnings per share (1) | $ | 2.25 | $ | 2.23 | $ | 2.01 |
| | | | | | | | | | |
| | Year Ended December 31, | | |||||||
|
| 2020 |
| 2019 |
| 2018 | | |||
| | | | | | | | | | |
Net income attributable to common stockholders | | $ | 163,395 | | $ | 121,074 | | $ | 108,312 | |
Adjustments: | |
|
| |
|
| |
|
| |
Net income attributable to noncontrolling interest | |
| 25,208 | |
| 26,610 | |
| 32,185 | |
Income from mortgage servicing rights | |
| (165,517) | |
| (90,761) | |
| (98,839) | |
Deferred tax provision (benefit) | |
| 4,726 | |
| 150 | |
| (12,033) | |
Amortization and write-offs of MSRs | |
| 65,979 | |
| 71,105 | |
| 73,182 | |
Depreciation and amortization | |
| 11,486 | |
| 11,194 | |
| 10,825 | |
Loss on extinguishment of debt | | | 3,546 | | | 7,439 | | | 5,041 | |
Provision for credit losses, net | | | 73,402 | | | 1,193 | | | 6,785 | |
Loss (gain) on derivative instruments, net | | | 43,596 | | | 1,687 | | | (6,672) | |
Stock-based compensation | |
| 9,046 | |
| 9,515 | |
| 6,095 | |
Distributable Earnings (1) | | $ | 234,867 | | $ | 159,206 | | $ | 124,881 | |
Diluted distributable earnings per share (1) | | $ | 1.75 | | $ | 1.37 | | $ | 1.33 | |
Diluted weighted average shares outstanding (1) | |
| 133,969,296 | |
| 116,192,951 | |
| 93,642,168 | |
As noted above, we changed the name of our non-GAAP financial measure from core earnings to distributable earnings in the fourth quarter of 2020. Core earnings was introduced as our non-GAAP performance measurecommon stock on a one-for-one basis.
distributable earnings.
49
The operating results of our Structured Business depend in large part on differences between the income from our loans and our borrowing costs. Most of our Structured Business loans and borrowings are variable-rate instruments based on LIBOR.SOFR. The objective of this strategy is to minimize the impact of interest rate changes on our net interest income. We also have various fixed rate loans in our portfolio that are financed with variable rate LIBOR borrowings. Additionally, loans are sometimes extended and, consequently, do not pay off on their original maturity dates. If a loan is extended, our exposure to interest rate risk may be increased. In these instances, we could have a fixed rate loan financed with variable debt with no corresponding hedge, which may result in debt which is unprotected from interest rate risk. Some of our loans and borrowings are subject to interest rate floors. As a result, the impact of a change in interest rates may be different on our interest income than on our interest expense. We have utilized treasury futures and interest rate and credit default swaps in the past to limit interest rate risk. Derivatives are used for hedging purposes rather than speculation. We do not enter into financial instruments for trading purposes.
Assets (Liabilities) Subject to Interest Rate Sensitivity (1) | 50 Basis Point Increase | 50 Basis Point Decrease | 100 Basis Point Decrease | ||||||||||||||||||||||||||
Interest income from loans and investments | $ | 12,615,006 | $ | 56,099 | $ | (55,288) | $ | (109,762) | |||||||||||||||||||||
Interest expense from debt obligations | (11,572,461) | 49,785 | (49,785) | (99,569) | |||||||||||||||||||||||||
Impact to net interest income from loans and investments | $ | 6,314 | $ | (5,503) | $ | (10,193) | |||||||||||||||||||||||
Interest income from cash, restricted cash and escrow balances (2) | $ | 3,076,723 | 15,384 | (15,384) | (30,767) | ||||||||||||||||||||||||
Total impact from hypothetical changes in interest rates | $ | 21,698 | $ | (20,887) | $ | (40,960) |
| | | | | | | | | | | | |
|
| Assets (Liabilities) |
| 15 Basis |
| 15 Basis |
| 25 Basis | ||||
| | Subject to Interest | | Point | | Point | | Point | ||||
| | Rate Sensitivity (1) | | Increase | | Decrease | | Increase | ||||
| | | | | | | | | | | | |
Interest income from loans and investments | | $ | 5,475,082 | | $ | 384 | | $ | (255) | | $ | 860 |
Interest expense from debt obligations | |
| (4,921,829) | |
| 4,863 | |
| (4,702) | |
| 8,365 |
Net interest income | | | | | | (4,479) | | | 4,447 | | | (7,505) |
Interest from cash, restricted cash and escrows (2) | | | 1,824,931 | | | 2,737 | | | (2,737) | | | 4,562 |
Net change to interest | | | | | $ | (1,742) | | $ | 1,710 | | $ | (2,943) |
(1) | Represents the UPB |
|
|
Based on our structured loans and investments and corresponding debt as of December 31, 2020, increases in LIBOR of 0.15% and 0.25% would decrease our annual net interest income as a result of LIBOR floors on a portion of our loan portfolio, that are above LIBOR asthe principal balance of our debt and the account balances of our cash, restricted cash and escrows at December 31, 2020, which would limit the effect2023.
the end of period balance.
50
| ||||||
Report of Independent Registered Public Accounting Firm (PCAOB ID 42) |
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| ||||||
| ||||||
| ||||||
| ||||||
| ||||||
| ||||||
|
51
Adoption of New Accounting Standard
As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for credit losses for financial instruments carried at amortized cost in 2020 using the modified retrospective approach due to the adoption of Accounting Standard Update 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. See below for discussion of our related critical audit matter.
52
not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Valuation of Mortgage Servicing Rights | ||||||
Description of the Matter | The Company’s capitalized mortgage servicing rights (MSRs) totaled | |||||
Auditing the valuation of the MSRs was complex and involved a high degree of subjectivity due to the nature of the significant assumptions. In particular, the valuation of the MSRs was sensitive to assumptions such as discount rate | ||||||
How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over the MSR valuation process. This included testing controls over management’s evaluation of the MSR valuations prepared by the independent third-party valuation expert and controls over the data inputs and the significant assumptions used in the discounted cash flow models. | |||||
We involved our valuation professionals to assist with our procedures. Our audit procedures included, among others, testing the completeness and accuracy of the data provided to management’s independent third-party valuation expert, evaluating the appropriateness of the methodology used to determine the fair value of the MSRs, | ||||||
Allowance for Credit Losses | ||||||
Description of the Matter | The Company’s allowance for credit losses related to structured loans | |||||
Auditing management’s | ||||||
How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the allowance for credit losses process. This included testing internal controls over management’s expected credit loss and impaired loan assessments, including testing controls over significant model assumptions and data inputs used in those assessments. | |||||
We involved our valuation professionals to assist with our procedures. Our audit procedures included, among others, evaluating the appropriateness of the methodologies used to estimate the allowance for credit losses, |
53
| | | | | | |
| | December 31, | ||||
|
| 2020 |
| 2019 | ||
|
| |
|
| |
|
Assets: | | | | | | |
Cash and cash equivalents | | $ | 339,528 | | $ | 299,687 |
Restricted cash | |
| 197,470 | |
| 210,875 |
Loans and investments, net (allowance for credit losses: $148,329 and $71,069, respectively) | |
| 5,285,868 | |
| 4,189,960 |
Loans held-for-sale, net | |
| 986,919 | |
| 861,360 |
Capitalized mortgage servicing rights, net | |
| 379,974 | |
| 286,420 |
Securities held-to-maturity, net (allowance for credit losses: $1,644 and $0, respectively) | |
| 95,524 | |
| 88,699 |
Investments in equity affiliates | |
| 74,274 | |
| 41,800 |
Real estate owned, net | |
| 1,485 | |
| 13,220 |
Due from related party | |
| 12,449 | |
| 10,651 |
Goodwill and other intangible assets | |
| 105,451 | |
| 110,700 |
Other assets | |
| 182,044 | |
| 125,788 |
Total assets | | $ | 7,660,986 | | $ | 6,239,160 |
| |
|
| |
|
|
Liabilities and Equity: | | | | | | |
Credit facilities and repurchase agreements | | $ | 2,234,883 | | $ | 1,678,288 |
Collateralized loan obligations | |
| 2,517,309 | |
| 2,130,121 |
Debt fund | |
| — | |
| 68,629 |
Senior unsecured notes | |
| 662,843 | |
| 319,799 |
Convertible senior unsecured notes, net | |
| 267,973 | |
| 284,152 |
Junior subordinated notes to subsidiary trust issuing preferred securities | |
| 141,656 | |
| 140,949 |
Due to related party | |
| 2,365 | |
| 13,100 |
Due to borrowers | |
| 89,325 | |
| 79,148 |
Allowance for loss-sharing obligations | |
| 64,303 | |
| 34,648 |
Other liabilities | |
| 197,644 | |
| 134,299 |
Total liabilities | |
| 6,178,301 | |
| 4,883,133 |
| |
|
| |
|
|
Commitments and contingencies (Note 15) | |
|
| |
|
|
| |
|
| |
|
|
Equity: | | | | | | |
Arbor Realty Trust, Inc. stockholders' equity: | | | | | | |
Preferred stock, cumulative, redeemable, $0.01 par value: 100,000,000 shares authorized; special voting preferred shares; 17,560,633 and 20,484,094 shares issued and outstanding, respectively; 8.25% Series A, $38,788 aggregate liquidation preference; 1,551,500 shares issued and outstanding; 7.75% Series B, $31,500 aggregate liquidation preference; 1,260,000 shares issued and outstanding; 8.50% Series C, $22,500 aggregate liquidation preference; 900,000 shares issued and outstanding | | | 89,472 | | | 89,501 |
Common stock, $0.01 par value: 500,000,000 shares authorized; 123,181,173 and 109,706,214 shares issued and outstanding, respectively | |
| 1,232 | |
| 1,097 |
Additional paid-in capital | |
| 1,317,109 | |
| 1,154,932 |
Accumulated deficit | |
| (63,442) | |
| (60,920) |
Total Arbor Realty Trust, Inc. stockholders' equity | |
| 1,344,371 | |
| 1,184,610 |
Noncontrolling interest | |
| 138,314 | |
| 171,417 |
Total equity | |
| 1,482,685 | |
| 1,356,027 |
Total liabilities and equity | | $ | 7,660,986 | | $ | 6,239,160 |
December 31, | |||||||||||
2023 | 2022 | ||||||||||
Assets: | |||||||||||
Cash and cash equivalents | $ | 928,974 | $ | 534,357 | |||||||
Restricted cash | 608,233 | 713,808 | |||||||||
Loans and investments, net (allowance for credit losses of $195,664 and $132,559) | 12,377,806 | 14,254,674 | |||||||||
Loans held-for-sale, net | 551,707 | 354,070 | |||||||||
Capitalized mortgage servicing rights, net | 391,254 | 401,471 | |||||||||
Securities held-to-maturity, net (allowance for credit losses of $6,256 and $3,153) | 155,279 | 156,547 | |||||||||
Investments in equity affiliates | 79,303 | 79,130 | |||||||||
Due from related party | 64,421 | 77,419 | |||||||||
Goodwill and other intangible assets | 91,378 | 96,069 | |||||||||
Other assets | 490,281 | 371,440 | |||||||||
Total assets | $ | 15,738,636 | $ | 17,038,985 | |||||||
Liabilities and Equity: | |||||||||||
Credit and repurchase facilities | $ | 3,237,827 | $ | 3,841,814 | |||||||
Securitized debt | 6,935,010 | 7,849,270 | |||||||||
Senior unsecured notes | 1,333,968 | 1,385,994 | |||||||||
Convertible senior unsecured notes, net | 283,118 | 280,356 | |||||||||
Junior subordinated notes to subsidiary trust issuing preferred securities | 143,896 | 143,128 | |||||||||
Due to related party | 13,799 | 12,350 | |||||||||
Due to borrowers | 121,707 | 61,237 | |||||||||
Allowance for loss-sharing obligations | 71,634 | 57,168 | |||||||||
Other liabilities | 343,072 | 335,789 | |||||||||
Total liabilities | 12,484,031 | 13,967,106 | |||||||||
Commitments and contingencies (Note 14) | |||||||||||
Equity: | |||||||||||
Arbor Realty Trust, Inc. stockholders’ equity: | |||||||||||
Preferred stock, cumulative, redeemable, $0.01 par value: 100,000,000 shares authorized, shares issued and outstanding by period: | 633,684 | 633,684 | |||||||||
Special voting preferred shares - 16,293,589 | |||||||||||
6.375% Series D - 9,200,000 shares | |||||||||||
6.25% Series E - 5,750,000 shares | |||||||||||
6.25% Series F - 11,342,000 shares | |||||||||||
Common stock, $0.01 par value: 500,000,000 shares authorized - 188,505,264 and 178,230,522 shares issued and outstanding | 1,885 | 1,782 | |||||||||
Additional paid-in capital | 2,367,188 | 2,204,481 | |||||||||
Retained earnings | 115,216 | 97,049 | |||||||||
Total Arbor Realty Trust, Inc. stockholders’ equity | 3,117,973 | 2,936,996 | |||||||||
Noncontrolling interest | 136,632 | 134,883 | |||||||||
Total equity | 3,254,605 | 3,071,879 | |||||||||
Total liabilities and equity | $ | 15,738,636 | $ | 17,038,985 |
54
| | | | | | | | | |
| | Year Ended December 31, | |||||||
|
| 2020 |
| 2019 |
| 2018 | |||
Interest income | | $ | 339,465 | | $ | 315,940 | | $ | 251,768 |
Interest expense | |
| 169,216 | |
| 186,399 | |
| 153,818 |
Net interest income | |
| 170,249 | |
| 129,541 | |
| 97,950 |
Other revenue: | |
|
| |
|
| |
|
|
Gain on sales, including fee-based services, net | |
| 94,607 | |
| 65,652 | |
| 70,002 |
Mortgage servicing rights | |
| 165,517 | |
| 90,761 | |
| 98,839 |
Servicing revenue, net | |
| 54,385 | |
| 54,542 | |
| 46,034 |
Property operating income | |
| 3,976 | |
| 9,674 | |
| 10,095 |
(Loss) gain on derivative instruments, net | | | (58,335) | | | (1,962) | | | 5,955 |
Other income, net | |
| 4,109 | |
| 1,178 | |
| 2,206 |
Total other revenue | |
| 264,259 | |
| 219,845 | |
| 233,131 |
Other expenses: | |
|
| |
|
| |
|
|
Employee compensation and benefits | |
| 144,380 | |
| 122,102 | |
| 110,470 |
Selling and administrative | |
| 37,348 | |
| 40,329 | |
| 37,074 |
Property operating expenses | |
| 4,898 | |
| 10,220 | |
| 10,431 |
Depreciation and amortization | |
| 7,640 | |
| 7,510 | |
| 7,453 |
Impairment loss on real estate owned | |
| — | |
| 1,000 | |
| 2,000 |
Provision for loss sharing (net of recoveries) | |
| 14,822 | |
| 1,147 | |
| 3,843 |
Provision for credit losses (net of recoveries) | |
| 61,110 | |
| — | |
| 8,353 |
Litigation settlement gain | |
| — | |
| — | |
| (10,170) |
Total other expenses | |
| 270,198 | |
| 182,308 | |
| 169,454 |
Income before extinguishment of debt, sale of real estate, income from equity affiliates and income taxes | |
| 164,310 | |
| 167,078 | |
| 161,627 |
Loss on extinguishent of debt | |
| (3,546) | |
| (7,439) | |
| (5,041) |
Loss on sale of real estate | | | (375) | | | — | | | — |
Income from equity affiliates | |
| 76,161 | |
| 10,635 | |
| 1,196 |
Provision for income taxes | |
| (40,393) | |
| (15,036) | |
| (9,731) |
Net income | |
| 196,157 | |
| 155,238 | |
| 148,051 |
Preferred stock dividends | |
| 7,554 | |
| 7,554 | |
| 7,554 |
Net income attributable to noncontrolling interest | |
| 25,208 | |
| 26,610 | |
| 32,185 |
Net income attributable to common stockholders | | $ | 163,395 | | $ | 121,074 | | $ | 108,312 |
| | | | | | | | | |
Basic earnings per common share | | $ | 1.44 | | $ | 1.30 | | $ | 1.54 |
Diluted earnings per common share | | $ | 1.41 | | $ | 1.27 | | $ | 1.50 |
| |
|
| |
|
| |
|
|
Weighted average shares outstanding: | | | | | | | | | |
Basic | |
| 113,811,471 | |
| 92,851,327 | |
| 70,208,165 |
Diluted | |
| 133,969,296 | |
| 116,192,951 | |
| 93,642,168 |
Year Ended December 31, | |||||||||||||||||
2023 | 2022 | 2021 | |||||||||||||||
Interest income | $ | 1,331,219 | $ | 948,401 | $ | 466,087 | |||||||||||
Interest expense | 903,228 | 557,617 | 212,005 | ||||||||||||||
Net interest income | 427,991 | 390,784 | 254,082 | ||||||||||||||
Other revenue: | |||||||||||||||||
Gain on sales, including fee-based services, net | 72,522 | 55,816 | 123,037 | ||||||||||||||
Mortgage servicing rights | 69,912 | 69,346 | 130,230 | ||||||||||||||
Servicing revenue, net | 130,449 | 92,192 | 74,814 | ||||||||||||||
Property operating income | 5,708 | 1,877 | 185 | ||||||||||||||
Gain (loss) on derivative instruments, net | 6,763 | 26,609 | (2,684) | ||||||||||||||
Other income (loss), net | 7,667 | (17,563) | 7,566 | ||||||||||||||
Total other revenue | 293,021 | 228,277 | 333,148 | ||||||||||||||
Other expenses: | |||||||||||||||||
Employee compensation and benefits | 159,788 | 161,825 | 171,796 | ||||||||||||||
Selling and administrative | 51,260 | 53,990 | 45,575 | ||||||||||||||
Property operating expenses | 5,897 | 2,136 | 718 | ||||||||||||||
Depreciation and amortization | 9,743 | 8,732 | 7,215 | ||||||||||||||
Provision for loss sharing (net of recoveries) | 15,695 | 1,862 | (6,167) | ||||||||||||||
Provision for credit losses (net of recoveries) | 73,446 | 21,169 | (21,113) | ||||||||||||||
Litigation settlement | — | 7,350 | — | ||||||||||||||
Total other expenses | 315,829 | 257,064 | 198,024 | ||||||||||||||
Income before extinguishment of debt, gain on real estate, income from equity affiliates and income taxes | 405,183 | 361,997 | 389,206 | ||||||||||||||
Loss on extinguishment of debt | (1,561) | (4,933) | (3,374) | ||||||||||||||
Gain on sale of real estate | — | — | 3,693 | ||||||||||||||
Income from equity affiliates | 24,281 | 14,247 | 34,567 | ||||||||||||||
Provision for income taxes | (27,347) | (17,484) | (46,285) | ||||||||||||||
Net income | 400,556 | 353,827 | 377,807 | ||||||||||||||
Preferred stock dividends | 41,369 | 40,954 | 21,888 | ||||||||||||||
Net income attributable to noncontrolling interest | 29,122 | 28,044 | 38,507 | ||||||||||||||
Net income attributable to common stockholders | $ | 330,065 | $ | 284,829 | $ | 317,412 | |||||||||||
Basic earnings per common share | $ | 1.79 | $ | 1.72 | $ | 2.30 | |||||||||||
Diluted earnings per common share | $ | 1.75 | $ | 1.67 | $ | 2.28 | |||||||||||
Weighted average shares outstanding: | |||||||||||||||||
Basic | 184,641,642 | 165,355,167 | 137,830,691 | ||||||||||||||
Diluted | 218,843,613 | 199,112,630 | 156,089,595 |
55
ARBOR REALTY TRUST, INC.
Preferred Stock Shares | Preferred Stock Value | Common Stock Shares | Common Stock Par Value | Additional Paid‑in Capital | (Accumulated Deficit) / Retained Earnings | Total Arbor Realty Trust, Inc. Stockholders’ Equity | Noncontrolling Interest | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||
Balance — December 31, 2020 | 21,272,133 | 89,472 | 123,181,173 | 1,232 | 1,317,109 | (63,442) | 1,344,371 | 138,314 | 1,482,685 | ||||||||||||||||||||||||||||||||||||||||||||
Issuance - common stock | — | — | 29,140,369 | 291 | 514,302 | — | 514,593 | — | 514,593 | ||||||||||||||||||||||||||||||||||||||||||||
Repurchase - common stock | — | — | (1,962,499) | (19) | (34,385) | — | (34,404) | — | (34,404) | ||||||||||||||||||||||||||||||||||||||||||||
Issuance - common stock from convertible debt | — | — | 386,459 | 4 | (4) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Issuance - Series D preferred stock | 9,200,000 | 222,438 | — | — | — | — | 222,438 | — | 222,438 | ||||||||||||||||||||||||||||||||||||||||||||
Issuance - Series E preferred stock | 5,750,000 | 138,886 | — | — | — | — | 138,886 | — | 138,886 | ||||||||||||||||||||||||||||||||||||||||||||
Issuance - Series F preferred stock | 8,050,000 | 194,675 | — | — | — | — | 194,675 | — | 194,675 | ||||||||||||||||||||||||||||||||||||||||||||
Redemption - preferred stock | (3,711,500) | (89,296) | — | — | — | (3,493) | (92,789) | — | (92,789) | ||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation, net | — | — | 616,679 | 6 | 891 | — | 897 | — | 897 | ||||||||||||||||||||||||||||||||||||||||||||
Distributions - common stock | — | — | — | — | — | (191,423) | (191,423) | — | (191,423) | ||||||||||||||||||||||||||||||||||||||||||||
Distributions - preferred stock | — | — | — | — | — | (18,410) | (18,410) | — | (18,410) | ||||||||||||||||||||||||||||||||||||||||||||
Distributions - noncontrolling interest | — | — | — | — | — | — | — | (23,366) | (23,366) | ||||||||||||||||||||||||||||||||||||||||||||
Redemption - OP Units | (1,235,538) | (12) | — | — | — | — | (12) | (21,593) | (21,605) | ||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 339,300 | 339,300 | 38,507 | 377,807 | ||||||||||||||||||||||||||||||||||||||||||||
Balance — December 31, 2021 | 39,325,095 | 556,163 | 151,362,181 | 1,514 | 1,797,913 | 62,532 | 2,418,122 | 131,862 | 2,549,984 | ||||||||||||||||||||||||||||||||||||||||||||
Cumulative - effect adjustment (1) | — | — | — | — | (8,684) | 5,612 | (3,072) | 625 | (2,447) | ||||||||||||||||||||||||||||||||||||||||||||
Balance - January 1, 2022 (adjusted for adoption of ASU 2020-06) | 39,325,095 | 556,163 | 151,362,181 | 1,514 | 1,789,229 | 68,144 | 2,415,050 | 132,487 | 2,547,537 | ||||||||||||||||||||||||||||||||||||||||||||
Issuance - common stock | — | — | 26,335,788 | 263 | 408,472 | — | 408,735 | — | 408,735 | ||||||||||||||||||||||||||||||||||||||||||||
Issuance - Series F preferred stock | 3,292,000 | 77,522 | — | — | — | — | 77,522 | — | 77,522 | ||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation, net | — | — | 532,553 | 5 | 6,780 | — | 6,785 | — | 6,785 | ||||||||||||||||||||||||||||||||||||||||||||
Distributions - common stock | — | — | — | — | — | (255,913) | (255,913) | — | (255,913) | ||||||||||||||||||||||||||||||||||||||||||||
Distributions - preferred stock | — | — | — | — | — | (40,965) | (40,965) | — | (40,965) | ||||||||||||||||||||||||||||||||||||||||||||
Distributions - noncontrolling interest | — | — | — | — | — | — | — | (25,103) | (25,103) | ||||||||||||||||||||||||||||||||||||||||||||
Redemption - OP Units | (31,506) | (1) | — | — | — | — | (1) | (545) | (546) | ||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 325,783 | 325,783 | 28,044 | 353,827 | ||||||||||||||||||||||||||||||||||||||||||||
Balance — December 31, 2022 | 42,585,589 | $ | 633,684 | 178,230,522 | $ | 1,782 | $ | 2,204,481 | $ | 97,049 | $ | 2,936,996 | $ | 134,883 | $ | 3,071,879 | |||||||||||||||||||||||||||||||||||||
Issuance - common stock | — | — | 13,113,296 | 131 | 193,530 | — | 193,661 | — | 193,661 | ||||||||||||||||||||||||||||||||||||||||||||
Repurchase - common stock | — | — | (3,545,604) | (35) | (37,396) | — | (37,431) | — | (37,431) | ||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation, net | — | — | 707,050 | 7 | 6,573 | — | 6,580 | — | 6,580 | ||||||||||||||||||||||||||||||||||||||||||||
Distributions - common stock | — | — | — | — | — | (311,884) | (311,884) | — | (311,884) | ||||||||||||||||||||||||||||||||||||||||||||
Distributions - preferred stock | — | — | — | — | — | (41,383) | (41,383) | — | (41,383) | ||||||||||||||||||||||||||||||||||||||||||||
Distributions - noncontrolling interest | — | — | — | — | — | — | — | (27,373) | (27,373) | ||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 371,434 | 371,434 | 29,122 | 400,556 | ||||||||||||||||||||||||||||||||||||||||||||
Balance — December 31, 2023 | 42,585,589 | $ | 633,684 | 188,505,264 | $ | 1,885 | $ | 2,367,188 | $ | 115,216 | $ | 3,117,973 | $ | 136,632 | $ | 3,254,605 |
CASH FLOWS
Year Ended December 31, | |||||||||||||||||
2023 | 2022 | 2021 | |||||||||||||||
Operating activities: | |||||||||||||||||
Net income | $ | 400,556 | $ | 353,827 | $ | 377,807 | |||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
Depreciation and amortization | 9,743 | 8,732 | 7,215 | ||||||||||||||
Stock-based compensation | 14,940 | 14,973 | 9,929 | ||||||||||||||
Amortization and accretion of interest and fees, net | (3,612) | (13,547) | (2,487) | ||||||||||||||
Amortization of capitalized mortgage servicing rights | 63,093 | 59,876 | 58,615 | ||||||||||||||
Originations of loans held-for-sale | (5,074,445) | (4,788,202) | (6,461,023) | ||||||||||||||
Proceeds from sales of loans held-for-sale, net of gain on sale | 4,878,021 | 5,438,623 | 6,415,169 | ||||||||||||||
Mortgage servicing rights | (69,912) | (69,346) | (130,230) | ||||||||||||||
Write-off of capitalized mortgage servicing rights from payoffs | 14,736 | 44,502 | 32,741 | ||||||||||||||
Provision for loss sharing (net of recoveries) | 15,695 | 1,862 | (6,167) | ||||||||||||||
Provision for credit losses (net of recoveries) | 73,446 | 21,169 | (21,113) | ||||||||||||||
Net (charge-offs) recoveries for loss sharing obligations | (1,229) | (758) | (2,072) | ||||||||||||||
Deferred tax (benefit) provision | (7,349) | (1,741) | 10,892 | ||||||||||||||
Income from equity affiliates | (24,281) | (14,247) | (34,567) | ||||||||||||||
Distributions from operations of equity affiliates | 27,542 | 16,594 | 32,953 | ||||||||||||||
Loss on extinguishment of debt | 1,561 | 4,933 | 3,374 | ||||||||||||||
Payoffs and paydowns of loans held-for-sale | 987 | 58,751 | 2,425 | ||||||||||||||
Change in fair value of held-for-sale loans | (2,536) | 15,703 | — | ||||||||||||||
(Gain) loss on derivative instruments, net | (6,763) | (26,609) | 2,684 | ||||||||||||||
Loss on sale of loans | — | 11,180 | — | ||||||||||||||
Litigation settlement | — | 7,350 | — | ||||||||||||||
Gain on real estate | — | — | (3,693) | ||||||||||||||
Changes in operating assets and liabilities | (74,336) | (43,976) | (75,605) | ||||||||||||||
Net cash provided by operating activities | 235,857 | 1,099,649 | 216,847 | ||||||||||||||
Investing Activities: | |||||||||||||||||
Loans and investments funded, originated and purchased, net | (1,362,171) | (5,955,061) | (9,209,475) | ||||||||||||||
Payoffs and paydowns of loans and investments | 3,359,810 | 3,423,498 | 2,370,570 | ||||||||||||||
Deferred fees | 21,299 | 57,098 | 72,182 | ||||||||||||||
Contributions to equity affiliates | (18,986) | (17,809) | (48,071) | ||||||||||||||
Distributions from equity affiliates | 15,552 | 26,008 | 34,283 | ||||||||||||||
Payoffs and paydowns of securities held-to-maturity | 4,626 | 19,030 | 13,317 | ||||||||||||||
Due to borrowers and reserves | (141,152) | (239,626) | (57,249) | ||||||||||||||
Proceeds from sale of loans and investments | — | 397,338 | 127,700 | ||||||||||||||
Purchase of securities held-to-maturity, net | — | (27,598) | (53,511) | ||||||||||||||
Net cash provided by (used in) investing activities | 1,878,978 | (2,317,122) | (6,750,254) | ||||||||||||||
Financing activities: | |||||||||||||||||
Proceeds from credit and repurchase facilities | 9,148,451 | 11,536,220 | 15,688,353 | ||||||||||||||
Payoffs and paydowns of credit and repurchase facilities | (9,747,252) | (12,153,215) | (13,433,376) | ||||||||||||||
Proceeds from issuance of securitized debt | — | 2,762,502 | 4,281,512 | ||||||||||||||
Payoffs and paydowns of securitized debt | (929,782) | (801,141) | (889,150) | ||||||||||||||
Proceeds from issuance of common stock | 193,661 | 408,735 | 514,593 | ||||||||||||||
Proceeds from issuance of preferred stock | — | 77,522 | 555,999 | ||||||||||||||
Proceeds from issuance of senior unsecured notes | 95,000 | 437,500 | 625,000 | ||||||||||||||
Payoffs and paydowns of senior unsecured notes | (149,600) | (312,920) | — | ||||||||||||||
Redemption of OP Units | — | (546) | (21,605) | ||||||||||||||
Payments of withholding taxes on net settlement of vested stock | (8,360) | (8,188) | (9,032) | ||||||||||||||
Repurchase of common stock | (37,431) | — | (34,404) | ||||||||||||||
Distributions to stockholders and non-controlling interest | (380,640) | (321,739) | (227,062) | ||||||||||||||
Payment of deferred financing costs | (9,840) | (50,362) | (56,060) | ||||||||||||||
Redemption of preferred stock | — | — | (92,789) |
| | | | | | | | | |
| | Year Ended December 31, | |||||||
|
| 2020 |
| 2019 |
| 2018 | |||
Net income | | $ | 196,157 | | $ | 155,238 | | $ | 148,051 |
Reclassification of net unrealized gains on available‑for‑sale | |
|
| |
|
| |
|
|
securities into accumulated deficit | |
| — | |
| — | |
| (176) |
Comprehensive income | |
| 196,157 | |
| 155,238 | |
| 147,875 |
Less: | |
|
| |
|
| |
|
|
Comprehensive income attributable to noncontrolling interest | |
| 25,208 | |
| 26,610 | |
| 32,142 |
Preferred stock dividends | |
| 7,554 | |
| 7,554 | |
| 7,554 |
Comprehensive income attributable to common stockholders | | $ | 163,395 | | $ | 121,074 | | $ | 108,179 |
Extinguishment of convertible senior unsecured notes | — | — | (14,300) | ||||||||||||||
Net cash (used in) provided by financing activities | (1,825,793) | 1,574,368 | 6,887,679 | ||||||||||||||
Net increase in cash, cash equivalents and restricted cash | 289,042 | 356,895 | 354,272 | ||||||||||||||
Cash, cash equivalents and restricted cash at beginning of period | 1,248,165 | 891,270 | 536,998 | ||||||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 1,537,207 | $ | 1,248,165 | $ | 891,270 |
56
CASH FLOWS (continued)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | Total Arbor | | | | | | | |
| | | | | | | | | | | | | | | | | | Accumulated | | Realty | | | | | | | ||
| | Preferred | | Preferred | | Common | | Common | | Additional | | | | | Other | | Trust, Inc. | | | | |
| | |||||
| | Stock | | Stock | | Stock | | Stock | | Paid‑in | | Accumulated | | Comprehensive | | Stockholders’ | | Noncontrolling | | Total | ||||||||
|
| Shares |
| Value |
| Shares |
| Par Value |
| Capital |
| Deficit |
| Income |
| Equity |
| Interest |
| Equity | ||||||||
Balance—December 31, 2017 |
| 24,942,269 | | $ | 89,508 |
| 61,723,387 | | $ | 617 | | $ | 707,450 | | $ | (101,926) | | $ | 176 | | $ | 695,825 | | $ | 168,731 | | $ | 864,556 |
Issuance of common stock |
| — | |
| — |
| 15,152,700 | |
| 152 | |
| 156,265 | | | — | | | — | | | 156,417 | | | — | | | 156,417 |
Repurchase of common stock |
| — | |
| — |
| (870,000) | |
| (9) | |
| (10,057) | | | — | | | — | | | (10,066) | | | — | | | (10,066) |
Issuance of common stock from convertible debt |
| — | |
| — |
| 7,296,893 | |
| 73 | |
| 80,118 | | | — | | | — | | | 80,191 | | | — | | | 80,191 |
Issuance of convertible senior unsecured notes, net |
| 0 | |
| 0 |
| 0 | | | 0 | | | 9,436 | | | 0 | | | 0 | | | 9,436 | | | 0 | | | 9,436 |
Extinguishment of convertible senior unsecured notes |
| — | |
| — |
| — | | | — | | | (70,271) | | | — | | | — | | | (70,271) | | | — | | | (70,271) |
Stock‑based compensation, net |
| — | |
| — |
| 684,727 | |
| 7 | |
| 6,088 | | | — | | | — | | | 6,095 | | | — | | | 6,095 |
Distributions—common stock |
| — | |
| — |
| — | | | — | | | — | | | (80,681) | | | — | | | (80,681) | | | — | | | (80,681) |
Distributions—preferred stock |
| — | |
| — |
| — | | | — | | | — | | | (7,568) | | | — | | | (7,568) | | | — | | | (7,568) |
Distributions—noncontrolling interest |
| 0 | |
| 0 |
| 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | (23,749) | | | (23,749) |
Redemption of OP Units |
| (577,185) | |
| (6) |
| — | | | — | | | — | | | — | | | — | | | (6) | | | (6,839) | | | (6,845) |
Reclassification of net unrealized gains on available‑for‑sale securities into accumulated deficit |
| — | |
| — |
| — | |
| — | |
| — | | | 176 | | | (176) | | | — | | | — | | | — |
Net income |
| — | |
| — |
| — | |
| — | | | — | | | 115,866 | | | — | | | 115,866 | | | 32,185 | | | 148,051 |
Balance—December 31, 2018 |
| 24,365,084 | | | 89,502 |
| 83,987,707 | | | 840 | | | 879,029 | | | (74,133) | | | — | | | 895,238 | | | 170,328 | | | 1,065,566 |
Issuance of common stock |
| 0 | | | 0 |
| 19,837,000 | | | 198 | | | 260,185 | | | 0 | | | 0 | | | 260,383 | | | 0 | |
| 260,383 |
Repurchase of common stock |
| — |
| | — |
| (920,000) |
| | (9) |
| | (11,565) | | | — | | | — | | | (11,574) | | | — | | | (11,574) |
Issuance of common stock from convertible debt |
| — |
| | — |
| 4,695,653 |
| | 47 |
| | 69,232 | | | — | | | — | | | 69,279 | | | — | | | 69,279 |
Issuance of convertible senior unsecured notes, net |
| 0 |
| | 0 |
| 0 |
| | 0 |
| | 8,684 | | | 0 | | | 0 | | | 8,684 | | | 0 | | | 8,684 |
Extinguishment of convertible senior unsecured notes |
| — |
| | — |
| — | | | — | | | (69,510) | | | — | | | — | | | (69,510) | | | — | | | (69,510) |
Stock‑based compensation, net |
| — |
| | — |
| 945,745 | | | 9 | | | 5,871 | | | — | | | — | | | 5,880 | | | — | | | 5,880 |
Issuance of common stock from special dividend |
| — |
| | — |
| 901,432 | | | 9 | | | 10,070 | | | — | | | — | | | 10,079 | | | — | | | 10,079 |
Issuance of operating partnership units and special voting preferred stock from special dividend |
| 221,666 |
| | 2 |
| 0 |
| | 0 |
| | 0 | | | 0 | | | 0 | | | 2 | | | 2,476 | | | 2,478 |
Distributions—common stock |
| — |
| | — |
| — |
| | — |
| | — | | | (107,846) | | | — | | | (107,846) | | | — | | | (107,846) |
Distributions—preferred stock |
| — |
| | — |
| — | | | — | | | — | | | (7,569) | | | — | | | (7,569) | | | — | | | (7,569) |
Distributions—noncontrolling interest |
| — |
| | — |
| — | | | — | | | — | | | — | | | — | | | — | | | (23,387) | | | (23,387) |
Redemption of OP Units |
| (391,156) |
| | (3) |
| 258,677 | | | 3 | | | 2,936 | | | — | | | — | | | 2,936 | | | (4,610) | | | (1,674) |
Net income |
| — |
| | — |
| — | | | — | | | — | | | 128,628 | | | — | | | 128,628 | | | 26,610 | | | 155,238 |
Balance—December 31, 2019 |
| 24,195,594 |
| | 89,501 |
| 109,706,214 |
| | 1,097 |
| | 1,154,932 |
| | (60,920) |
| | — |
| | 1,184,610 | | | 171,417 | | | 1,356,027 |
Cummulative-effect adjustment (Note 2) |
| — |
| | — |
| — |
| | — | | | — | | | (24,106) | | | — | | | (24,106) | | | (4,501) | | | (28,607) |
Balance - January 1, 2020 (as adjusted for the adoption of ASU 2016-13) |
| 24,195,594 | | | 89,501 |
| 109,706,214 | | | 1,097 | | | 1,154,932 | | | (85,026) | | | 0 | | | 1,160,504 | | | 166,916 |
| | 1,327,420 |
Issuance of common stock |
| — |
| | — |
| 14,790,121 |
| | 148 |
| | 183,287 | | | — | | | — | | | 183,435 | | | — | | | 183,435 |
Repurchase of common stock |
| — |
| | — |
| (2,285,178) |
| | (23) |
| | (21,508) | | | — | | | — | | | (21,531) | | | — | | | (21,531) |
Issuance of common stock from convertible debt |
| — |
| | — |
| 368,498 |
| | 4 |
| | 90 | | | — | | | — | | | 94 | | | — | | | 94 |
Stock-based compensation, net |
| — |
| | — |
| 601,518 |
| | 6 |
| | 2,446 | | | — | | | — | | | 2,452 | | | — | | | 2,452 |
Distributions - common stock |
| — |
| | — |
| — |
| | — |
| | — | | | (141,801) | | | — | | | (141,801) | | | — | | | (141,801) |
Distributions - preferred stock |
| — |
| | — |
| — | | | — | | | — | | | (7,564) | | | — | | | (7,564) | | | — | | | (7,564) |
Distributions - noncontrolling interest |
| — |
| | — |
| — | | | — | | | — | | | — | | | — | | | — | | | (23,744) | | | (23,744) |
Redemption of OP Units |
| (2,923,461) |
| | (29) |
| — |
| | — |
| | (2,138) | | | — | | | — | | | (2,167) | | | (30,066) | | | (32,233) |
Net income |
| — |
| | — |
| — | | | — | | | — | | | 170,949 | | | — | | | 170,949 | | | 25,208 | | | 196,157 |
Balance—December 31, 2020 |
| 21,272,133 |
| $ | 89,472 |
| 123,181,173 |
| $ | 1,232 |
| $ | 1,317,109 | | $ | (63,442) | | $ | — | | $ | 1,344,371 | | $ | 138,314 | | $ | 1,482,685 |
thousands)
Year Ended December 31, | |||||||||||||||||
2023 | 2022 | 2021 | |||||||||||||||
Reconciliation of cash, cash equivalents and restricted cash: | |||||||||||||||||
Cash and cash equivalents at beginning of period | $ | 534,357 | $ | 404,580 | $ | 339,528 | |||||||||||
Restricted cash at beginning of period | 713,808 | 486,690 | 197,470 | ||||||||||||||
Cash, cash equivalents and restricted cash at beginning of period | $ | 1,248,165 | $ | 891,270 | $ | 536,998 | |||||||||||
Cash and cash equivalents at end of period | $ | 928,974 | $ | 534,357 | $ | 404,580 | |||||||||||
Restricted cash at end of period | 608,233 | 713,808 | 486,690 | ||||||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 1,537,207 | $ | 1,248,165 | $ | 891,270 | |||||||||||
Supplemental cash flow information: | |||||||||||||||||
Cash used to pay interest | $ | 861,141 | $ | 486,826 | $ | 175,912 | |||||||||||
Cash used to pay taxes | 30,129 | 27,560 | 37,797 | ||||||||||||||
Supplemental schedule of non-cash investing and financing activities: | |||||||||||||||||
Distributions accrued on preferred stock | 7,010 | 7,010 | 6,767 | ||||||||||||||
Investment in real estate, net | 39,400 | 31,200 | — | ||||||||||||||
Cumulative - effect adjustment (adoption of convertible debt standard) | — | 2,447 | — | ||||||||||||||
Loans transferred from loans and investment, net to loans held-for-sale | — | — | 65,144 | ||||||||||||||
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
| | | | | | | | | |
| | Year Ended December 31, | |||||||
|
| 2020 |
| 2019 |
| 2018 | |||
Operating activities: |
| |
|
| |
|
| |
|
Net income | | $ | 196,157 | | $ | 155,238 | | $ | 148,051 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |
| | |
| | |
|
|
Depreciation and amortization | |
| 7,640 | |
| 7,510 | |
| 7,453 |
Stock-based compensation | |
| 9,046 | |
| 9,515 | |
| 6,095 |
Amortization and accretion of interest and fees, net | |
| 2,964 | |
| 5,045 | |
| 9,291 |
Amortization of capitalized mortgage servicing rights | |
| 49,222 | |
| 48,681 | |
| 48,124 |
Impairment loss on real estate owned | |
| — | |
| 1,000 | |
| 2,000 |
Originations of loans held-for-sale | |
| (6,709,375) | |
| (4,564,032) | |
| (5,074,662) |
Proceeds from sales of loans held-for-sale, net of gain on sale | |
| 6,587,728 | |
| 4,189,787 | |
| 4,893,886 |
Mortgage servicing rights | |
| (165,517) | |
| (90,761) | |
| (98,839) |
Write-off of capitalized mortgage servicing rights from payoffs | |
| 16,757 | |
| 22,425 | |
| 25,058 |
Provision for credit losses (net of recoveries) | |
| 61,110 | |
| — | |
| 8,353 |
Provision for loss sharing (net of recoveries) | |
| 14,822 | |
| 1,147 | |
| 3,843 |
Net recoveries (charge-offs) for loss sharing obligations | |
| 427 | |
| (797) | |
| (56) |
Deferred tax provision (benefit) | |
| 4,726 | |
| 150 | |
| (12,033) |
Income from equity affiliates | |
| (76,161) | |
| (10,635) | |
| (1,196) |
Distributions from equity affiliates | | | 44,579 | | | 3,724 | | | 2,640 |
Loss on extinguishment of debt | |
| 3,546 | |
| 7,439 | |
| 5,041 |
Payoffs and paydowns of loans held-for-sale | |
| 179 | |
| 84 | |
| 61 |
Loss on sale of real estate | |
| 375 | |
| — | |
| — |
Changes in operating assets and liabilities | |
| 6,940 | |
| (12,057) | |
| (10,845) |
Net cash provided by (used in) operating activities | | | 55,165 | | | (226,537) | | | (37,735) |
| | | | | | | | | |
Investing Activities: | |
| | |
| | |
| |
Loans and investments funded, originated and purchased, net | |
| (2,376,233) | |
| (2,712,354) | |
| (1,545,499) |
Payoffs and paydowns of loans and investments | |
| 1,243,694 | |
| 1,753,691 | |
| 960,769 |
Deferred fees | |
| 18,766 | |
| 22,340 | |
| 13,114 |
Investments in real estate, net | |
| (131) | |
| (475) | |
| (367) |
Proceeds from sale of real estate, net | | | 8,870 | | | — | | | — |
Proceeds from sale of available-for-sale securities | | | 9,995 | | | — | | | — |
Contributions to equity affiliates | |
| (892) | |
| (13,522) | |
| (2,493) |
Distributions from equity affiliates | |
| — | |
| 213 | |
| 3,122 |
Purchase of securities held-to-maturity, net | | | (37,926) | | | (20,000) | | | (47,499) |
Payoffs and paydowns of securities held-to-maturity | |
| 10,158 | |
| 12,488 | |
| 2,269 |
Due to borrowers and reserves | |
| (32,925) | |
| (37,121) | |
| (65,213) |
Distributions of insurance settlements, net | |
| — | |
| — | |
| (78) |
Net cash used in investing activities | |
| (1,156,624) | |
| (994,740) | |
| (681,875) |
| | | | | | | | | |
Financing activities: | | | | | | | | | |
Proceeds from repurchase agreements and credit facilities | |
| 12,986,256 | |
| 8,986,286 | |
| 9,166,255 |
Paydowns and payoffs of repurchase agreements and credit facilities | |
| (12,428,681) | |
| (8,443,275) | |
| (8,559,057) |
Proceeds from issuance of collateralized loan obligations | |
| 668,000 | |
| 1,067,193 | |
| 441,000 |
Payoffs and paydowns of collateralized loan obligations | |
| (283,125) | |
| (529,250) | |
| (267,750) |
Payoff of debt fund | | | (70,000) | | | — | | | — |
Proceeds from issuance of common stock | | | 183,585 | | | 260,383 | | | 156,417 |
Proceeds from issuance of convertible senior unsecured notes | | | — | |
| 264,000 | |
| 264,500 |
Extinguishment of convertible senior unsecured notes | | | — | | | (231,940) | | | (228,287) |
Settlements of convertible senior unsecured notes | | | (22,336) | | | — | | | — |
Proceeds from issuance of senior unsecured notes | |
| 345,750 | |
| 200,000 | |
| 125,000 |
Payoffs of senior unsecured notes | |
| — | |
| — | |
| (97,860) |
Redemption of OP Units | |
| (32,233) | |
| (1,674) | |
| (6,845) |
Payments of withholding taxes on net settlement of vested stock | |
| (6,594) | |
| (3,634) | |
| — |
Repurchase of common stock | | | (21,531) | | | (11,574) | | | (10,066) |
Distributions paid on common stock | |
| (141,801) | |
| (107,846) | |
| (68,083) |
Distributions paid on noncontrolling interest | |
| (23,744) | |
| (23,387) | |
| (20,650) |
Distributions paid on preferred stock | | | (7,564) | | | (7,569) | | | (7,568) |
Payment of deferred financing costs | |
| (18,087) | |
| (26,543) | |
| (20,499) |
Payoff of related party financing | |
| — | |
| — | |
| (50,000) |
Net cash provided by financing activities | |
| 1,127,895 | |
| 1,391,170 | |
| 816,507 |
Net increase in cash, cash equivalents and restricted cash | |
| 26,436 | |
| 169,893 | |
| 96,897 |
Cash, cash equivalents and restricted cash at beginning of period | |
| 510,562 | |
| 340,669 | |
| 243,772 |
Cash, cash equivalents and restricted cash at end of period | | $ | 536,998 | | $ | 510,562 | | $ | 340,669 |
See Notes to Consolidated Financial Statements.
58
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(in thousands)
| | | | | | | | | |
| | Year Ended December 31, | |||||||
|
| 2020 |
| 2019 |
| 2018 | |||
| | | | | | | | | |
Reconciliation of cash, cash equivalents and restricted cash: | | | | | | | | | |
Cash and cash equivalents at beginning of period | | $ | 299,687 | | $ | 160,063 | | $ | 104,374 |
Restricted cash at beginning of period | | | 210,875 | | | 180,606 | | | 139,398 |
Cash, cash equivalents and restricted cash at beginning of period | | $ | 510,562 | | $ | 340,669 | | $ | 243,772 |
Cash and cash equivalents at end of period | | $ | 339,528 | | $ | 299,687 | | $ | 160,063 |
Restricted cash at end of period | | | 197,470 | | | 210,875 | | | 180,606 |
Cash, cash equivalents and restricted cash at end of period | | $ | 536,998 | | $ | 510,562 | | $ | 340,669 |
| | | | | | | | | |
Supplemental cash flow information: | | | | | | | | | |
Cash used to pay interest | | $ | 144,968 | | $ | 167,581 | | $ | 118,923 |
Cash used to pay taxes | | | 35,282 | | | 19,611 | | | 20,026 |
| |
|
| |
|
| |
|
|
Supplemental schedule of non-cash investing and financing activities: | | | | | | | | | |
Cummulative-effect adjustment (Note 2) | | | 28,607 | | | — | | | — |
Issuance of common stock from convertible debt | | | 90 | | | 69,232 | | | 80,118 |
Extinguishment of convertible senior unsecured notes | | | — | | | (69,510) | | | (70,271) |
Distributions accrued on 8.25% Series A preferred stock | | | 267 | | | 267 | | | 267 |
Distributions accrued on 7.75% Series B preferred stock | | | 203 | | | 203 | | | 203 |
Distributions accrued on 8.50% Series C preferred stock | | | 159 | | | 159 | | | 159 |
Distributions accrued for special dividend declared | | | — | | | — | | | 15,696 |
Settlements of convertible senior unsecured notes | | | 4,778 | | | — | | | — |
Fair value of conversion feature of convertible senior unsecured notes | | | 94 | | | 8,453 | | | 9,750 |
Special dividend - common stock issued | | | — | | | 10,079 | | | — |
Redemption of OP Units for common stock | | | — | | | 2,939 | | | — |
Special dividend - special voting preferred stock and OP Units issued | | | — | | | 2,478 | | | — |
See Notes to Consolidated Financial Statements.
59
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2020
60
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
assumption at December 31, 2020
assumption as of December 31, 20202023 inherently less certain than they would be absent the current and potential impacts of COVID-19. Actual results could differ from those estimates.
Reclassification
Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period financial statements. The net gain/loss from changes in fair value of derivative instruments previously recorded to other income, net is now recorded to (loss) gain on derivative instruments, net. These reclassifications had no effect on the previously reported net income.
certain.
61
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
Beyond our reasonable and supportable forecast period, we generally revert to historical loss information over the remaining loan/asset period, taken from a period that most accurately reflects the expectation of conditions expected to exist during the period of reversion. We may make adjustments toadjust historical loss information for differences in risk that may not reflect the characteristics of our current portfolio, including, but not limited to, loan-to-value and debt service coverage ratios, among other relevant factors. The method of reversion selected represents the best estimate of the collectability of the investments and is reevaluated each reporting period. We generally expect to use an average historical loss for reversion, utilizing an immediate or straight linestraight-line method for the remaining life of the investments.
Loss
62
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
Private Label loans, which are generallyeither sold instantaneously or pooled and securitized, or sold, within 180 days of loan origination. Such loans are reported at the lower of cost or market on an aggregate basis and include the value allocated to the associated future MSRs. During the period prior to its sale, interest income on a loan held-for-sale is calculated in accordance with the terms of the individual loan and the loan origination fees and direct loan origination costs are deferred until the loan is sold. All of our held-for-sale loans are financed with matched borrowings from credit facilities contracted to finance such loans. Interest income and expense are earned or incurred after a loan is closed and before a loan is sold.
63
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
Servicing Cost: A market participant'sparticipant’s estimated future cost to service the loan for the estimated life of the MSR is subtracted from the estimated future cash flows.
Real estate acquired is recorded in other assets on our consolidated balance sheets.
64
December 31, 2020
obligated to perform significant activities after the sale and when control of the asset transfers to the buyer. A gain may be deferred in whole or in part until collectability of the sales price is reasonably assured and the earnings process is complete.
Investments in Equity Affiliates.We invest in joint ventures that are formed to invest in real estate related assets or businesses. These joint ventures are not majority owned or controlled by us, or are VIEs for which we are not the primary beneficiary, and are not consolidated in our financial statements. These investments are recorded under either the equity or cost method of accounting as deemed appropriate. We evaluate these investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. We recognize an impairment loss if the estimated fair value of the investment is less than its carrying amount and we determine that the impairment is other-than-temporary. We record our share of the net income and losses from the underlying properties of our equity method investments and any other-than-temporary impairment on these investments as income or losses from equity affiliates in the consolidated statements of income.
Goodwill and Other Intangible Assets. Significant judgement is required to estimate the fair value of intangible assets and in assigning their estimated useful lives. Accordingly, we typically seek the assistance of independent third party valuation specialists for significant intangible assets. The fair value estimates are based on available historical information and on future expectations and assumptions we deem reasonable.
We generally use an income based valuation method to estimate the fair value of intangible assets, which discounts expected future cash flows to present value using estimates and assumptions we deem reasonable.
Determining the estimated useful lives of intangible assets also requires judgment. Certain intangible assets, such as GSE licenses, have been deemed to have indefinite lives while other intangible assets, such as broker and borrower relationships and above/below market rent have been deemed to have finite lives. Our assessment as to which intangible assets are deemed to have finite or indefinite lives is based on several factors including economic barriers of entry for the acquired product lines, scarcity of available GSE licenses, retention trends and our operating plans, among other factors.
Goodwill and indefinite-lived intangible assets are not amortized, while finite-lived intangible assets are amortized over their estimated useful lives on a straight-line basis. Indefinite-lived intangible assets, including goodwill, are tested for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. In addition, with respect to goodwill, an impairment analysis is performed at least annually. We have elected to make the first day of our fiscal fourth quarter the annual impairment assessment date for goodwill. We first assess qualitative factors to determine whether it is more likely than not that the fair value is less than the carrying value. If, based on that assessment, we believe it is more likely than not that the fair value is less than the carrying value, then a two-step goodwill impairment test is performed. Based on the impairment analysis performed as of October 1, 2020, there was no indication that the indefinite-lived intangible assets, including goodwill, were impaired and there were no events or changes in circumstances indicating impairment at December 31, 2020.
65
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
hedge. These derivative instruments must be effective in reducing risk exposure in order to qualify for hedge accounting. When the terms of an underlying transaction are modified, or when the underlying hedged item ceases to exist, all changes in the fair value of the instrument are marked-to-market with changes in value included in net income for each period until the derivative instrument matures or is settled. Any derivative instrument used for risk management that does not meet the hedging criteria is marked-to-market with the changes in value included in earnings. In cases where a derivative instrument is terminated early, any gain or loss is generally amortized over the remaining life of the hedged item. We may also enter into derivative contracts that are intended to economically hedge certain risks, even though hedge accounting does not apply, or we elect not to apply hedge accounting. The ineffective portion of a derivative’s change in fair value is recognized immediately in earnings.
66
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
Additionally, interest income is recorded when earned from equity participation interests, referred to as equity kickers. These equity kickers have the potential to generate additional revenues to us as a result of excess cash flow distributions and/or as appreciated properties are sold or refinanced.
67
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
We periodically evaluate tax positions to determine whether it is more likely than not that such positions would be sustained upon examination by a tax authority for all open tax years, as defined by the statute of limitations, based on their technical merits. We report interest and penalties related to tax uncertainties as a component of the income tax provision.
CreditLosses
On January 1, 2020, we adopted ASU 2016-13, which utilizes the CECL methodology for the recognition of credit losses for our structured loans and investments, held-to-maturity debt securities and our loss-sharing obligations related to the Fannie Mae DUS program, at the time the financial asset is originated or acquired. The allowance for credit losses is adjusted each period for changes in expected credit losses. This methodology replaces the multiple existing impairment methods in GAAP and generally requires that a loss be incurred before it is recognized. We adopted ASU 2016-13 using the modified retrospective method, therefore, the results for reporting periods prior to January 1, 2020 are unadjusted and reported in accordance with previously applicable GAAP. In connection with the adoption of ASU 2016-13, we recorded a $28.6 million increase to accumulated deficit, which was net of a deferred tax asset of $3.6 million at January 1, 2020.
The following table illustrates the impact of adopting ASU 2016-13 (in thousands):
| | | | | | | | | |
| | January 1, 2020 | |||||||
|
| As Reported |
| |
|
| |
| |
|
| Under |
| As Reported |
| Impact of | |||
|
| ASU 2016-13 |
| Pre-Adoption |
| Adoption | |||
Assets: |
| |
|
| |
|
| |
|
Allowance for credit losses: |
| |
|
| |
|
| |
|
Structured loans and investments (1) | | $ | 88,363 | | $ | 71,069 | | $ | 17,294 |
Held-to-maturity debt securities |
| | 501 | | | — | | | 501 |
Deferred tax assets | | | 27,307 | | | 23,713 | | | 3,594 |
Liabilities: |
| |
| |
|
| |
|
|
Allowance for loss-sharing obligations |
| | 16,847 | |
| 2,441 | |
| 14,406 |
Description |
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
Other Accounting Pronouncements Adopted
|
| Effect on Financial Statements | ||||||||||||||
|
|
|
|
| ||||||||||||
In | restructurings for borrowers experiencing financial difficulty. | First quarter of | 2023 | The adoption of this guidance did not have a material impact on our consolidated financial statements. |
---|
|
|
| ||||||||||||||
In |
| The adoption of this guidance | ||||||||||||||
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This guidance focuses on disclosures around effective tax rates and cash income taxes paid and to improve the usefulness of income tax disclosures for investors. This guidance requires public entities to disclose, on an annual basis, a rate reconciliation presented in both dollars and percentages and to include specific categories and provides further guidance on disaggregation of those categories based on a quantitative threshold equal to 5% or more. This guidance also makes changes to annual disclosures of income taxes paid for all entities by requiring entities to disclose the amount of income taxes paid, net of refunds received, disaggregated by federal, state and foreign jurisdiction. | First quarter of 2025, with early adoption permitted | The adoption of this guidance is not expected to have a material impact on our consolidated financial statements. | ||||||||||||||
|
|
|
|
| ||||||||||||
|
|
|
|
|
| ||
|
|
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|
|
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| ||
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69
December 31, 2020
December 31, 2023 | Percent of Total | Loan Count | Wtd. Avg. Pay Rate (1) | Wtd. Avg. Remaining Months to Maturity (2) | Wtd. Avg. First Dollar LTV Ratio (3) | Wtd. Avg. Last Dollar LTV Ratio (4) | |||||||||||||||||||||||||||||||||||
Bridge loans (5) | $ | 12,273,244 | 97 | % | 679 | 8.45 | % | 12.0 | 0 | % | 78 | % | |||||||||||||||||||||||||||||
Mezzanine loans | 248,457 | 2 | % | 49 | 8.41 | % | 56.6 | 48 | % | 80 | % | ||||||||||||||||||||||||||||||
Preferred equity investments | 85,741 | 1 | % | 17 | 3.95 | % | 60.3 | 53 | % | 82 | % | ||||||||||||||||||||||||||||||
SFR permanent loans | 7,564 | <1% | 2 | 9.84 | % | 13.9 | 0 | % | 56 | % | |||||||||||||||||||||||||||||||
12,615,006 | 100 | % | 747 | 8.42 | % | 13.2 | 1 | % | 78 | % | |||||||||||||||||||||||||||||||
Allowance for credit losses | (195,664) | ||||||||||||||||||||||||||||||||||||||||
Unearned revenue | (41,536) | ||||||||||||||||||||||||||||||||||||||||
Loans and investments, net | $ | 12,377,806 | |||||||||||||||||||||||||||||||||||||||
December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||
Bridge loans (5) | $ | 14,096,054 | 98 | % | 692 | 8.17 | % | 19.8 | 0 | % | 76 | % | |||||||||||||||||||||||||||||
Mezzanine loans | 213,499 | 1 | % | 44 | 8.13 | % | 63.1 | 42 | % | 77 | % | ||||||||||||||||||||||||||||||
Preferred equity investments | 110,725 | 1 | % | 8 | 7.63 | % | 39.2 | 46 | % | 79 | % | ||||||||||||||||||||||||||||||
SFR permanent loans | 35,845 | <1% | 3 | 8.76 | % | 32.8 | 0 | % | 58 | % | |||||||||||||||||||||||||||||||
14,456,123 | 100 | % | 747 | 8.17 | % | 20.6 | 1 | % | 76 | % | |||||||||||||||||||||||||||||||
Allowance for credit losses | (132,559) | ||||||||||||||||||||||||||||||||||||||||
Unearned revenue | (68,890) | ||||||||||||||||||||||||||||||||||||||||
Loans and investments, net | $ | 14,254,674 |
| | | | | | | | | | | | | | | | |
|
| | |
| |
| |
| |
| Wtd. Avg. |
| |
| | |
| | | | | | | | | | | Remaining | | Wtd. Avg. | | Wtd. Avg. | |
| | | | Percent of | | Loan | | Wtd. Avg. | | Months to | | First Dollar | | Last Dollar | | |
| | December 31, 2020 | | Total | | Count | | Pay Rate (1) | | Maturity | | LTV Ratio (2) | | LTV Ratio (3) | | |
| | | | | | | | | | | | | | | | |
Bridge loans (4) | | $ | 5,022,509 | | 92 | % | 263 |
| 5.09 | % | 16.2 |
| 0 | % | 76 | % |
Preferred equity investments | |
| 224,928 |
| 4 | % | 14 |
| 7.07 | % | 49.8 |
| 64 | % | 89 | % |
Mezzanine loans | | | 159,242 | | 3 | % | 29 | | 7.40 | % | 45.0 | | 32 | % | 82 | % |
Other (5) | |
| 68,403 |
| 1 | % | 22 |
| 4.95 | % | 74.8 |
| 0 | % | 69 | % |
| |
| 5,475,082 |
| 100 | % | 328 |
| 5.23 | % | 19.2 |
| 4 | % | 77 | % |
Allowance for credit losses | | | (148,329) | | | | | | | | | | | | | |
Unearned revenue | |
| (40,885) | | | | | | | | | | | | | |
Loans and investments, net | | $ | 5,285,868 | | | | | | | | | | | | | |
“Weighted Average Pay Rate” is a weighted average, based on the UPB of each loan in our portfolio, of the interest rate required to be paid monthly as stated in the individual loan agreements. Certain loans and investments that require an accrual rate to be paid at maturity are not included in the weighted average pay rate as shown in the table.
| | | | | | | | | | | | | | | | |
| | December 31, 2019 |
| | | | | | | | | | | | | |
Bridge loans (4) | | $ | 3,836,832 |
| 90 | % | 217 |
| 5.77 | % | 18.0 |
| 0 | % | 75 | % |
Preferred equity investments | |
| 181,058 |
| 4 | % | 10 |
| 7.62 | % | 68.8 |
| 69 | % | 89 | % |
Mezzanine loans | | | 191,575 | | 4 | % | 24 | | 9.70 | % | 36.7 | | 22 | % | 73 | % |
Other (5) | | | 70,146 | | 2 | % | 21 | | 2.88 | % | 84.8 | | 0 | % | 70 | % |
| |
| 4,279,611 |
| 100 | % | 272 |
| 5.98 | % | 22.1 |
| 4 | % | 76 | % |
Allowance for credit losses | |
| (71,069) | | | | | | | | | | | | | |
Unearned revenue | |
| (18,582) | | | | | | | | | | | | | |
Loans and investments, net | | $ | 4,189,960 | | | | | | | | | | | | | |
|
|
|
|
|
|
|
|
|
|
70
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
investor group generated over 10% of our revenue. See Note 1918 for details on our concentration of related party loans and investments.
71
December 31, 2020
A summary of the loan portfolio’s internal risk ratings and LTV ratios by asset class as ofat December 31, 20202023, and charge-offs recorded during 2023 is as follows ($ in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | |
| | | | | | | | | | | | | | | | | Wtd. Avg. |
| Wtd. Avg. |
| |
| | UPB by Origination Year | | | | | First Dollar | | Last Dollar | | ||||||||||||||||
Asset Class / Risk Rating | | 2020 | | 2019 | | 2018 | | 2017 | | 2016 | | Prior | | Total | | LTV Ratio | | LTV Ratio | | |||||||
Multifamily: | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Pass | | $ | 808,735 | | $ | 281,999 | | $ | 0 | | $ | 32,500 | | $ | 0 | | $ | 799 | | $ | 1,124,033 | | | | | |
Pass/Watch | |
| 854,331 | | | 811,162 | | | 161,878 | | | 3,500 | | | 0 | | | 28,800 | | | 1,859,671 | | | | | |
Special Mention | | | 366,853 | | | 696,045 | | | 89,441 | | | 117,779 | | | 0 | | | 0 | | | 1,270,118 | | | | | |
Substandard | | | 0 | | | 80,481 | | | 41,335 | | | 16,500 | | | 8,250 | | | 0 | | | 146,566 | | | | | |
Doubtful | |
| 0 | | | 0 | | | 0 | | | 17,700 | | | 0 | | | 0 | | | 17,700 | | | | | |
Total Multifamily | | $ | 2,029,919 | | $ | 1,869,687 | | $ | 292,654 | | $ | 187,979 | | $ | 8,250 | | $ | 29,599 | | $ | 4,418,088 | | 4 | % | 76 | % |
Land: | | | | | | | | | | | | | | | | | | Percentage of portfolio | | | 81 | % | | | | |
Special Mention | | $ | 79,118 | | $ | 19,523 | | $ | 0 | | $ | 19,975 | | $ | 0 | | $ | 0 | | $ | 118,616 | | | | | |
Substandard | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 127,928 | | | 127,928 | | | | | |
Total Land | | $ | 79,118 | | $ | 19,523 | | $ | 0 | | $ | 19,975 | | $ | 0 | | $ | 127,928 | | $ | 246,544 | | 0 | % | 93 | % |
Healthcare: | | | | | | | | | | | | | | | | | | Percentage of portfolio | | | 5 | % | | | | |
Pass | | $ | 0 | | $ | 6,600 | | $ | 10,000 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 16,600 | | | | | |
Special Mention | | | 0 | | | 65,819 | | | 51,500 | | | 39,650 | | | 0 | | | 0 | | | 156,969 | | | | | |
Substandard | | | 0 | | | 8,500 | | | 0 | | | 0 | | | 0 | | | 0 | | | 8,500 | | | | | |
Doubtful | | | 0 | | | 0 | | | 0 | | | 4,625 | | | 0 | | | 0 | | | 4,625 | | | | | |
Total Healthcare | | $ | 0 | | $ | 80,919 | | $ | 61,500 | | $ | 44,275 | | $ | 0 | | $ | 0 | | $ | 186,694 | | 0 | % | 78 | % |
Hotel: | | | | | | | | | | | | | | | | | | Percentage of portfolio | | | 3 | % | | | | |
Pass | | $ | 26,000 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 26,000 | | | | | |
Substandard | | | 60,000 | | | 91,000 | | | 0 | | | 0 | | | 0 | | | 0 | | | 151,000 | | | | | |
Total Hotel | | $ | 86,000 | | $ | 91,000 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 177,000 | | 0 | % | 90 | % |
Single-Family Rental: | | | | | | | | | | | | | | | | | | Percentage of portfolio | | | 3 | % | | | | |
Pass | | $ | 62,566 | | $ | 34,437 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 97,003 | | | | | |
Pass/Watch | | | 8,227 | | | 39,912 | | | 0 | | | 0 | | | 0 | | | 0 | | | 48,139 | | | | | |
Special Mention | | | 11,350 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 11,350 | | | | | |
Total Single-Family Rental | | $ | 82,143 | | $ | 74,349 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 156,492 | | 0 | % | 63 | % |
Office: | | | | | | | | | | | | | | | | | | Percentage of portfolio | | | 3 | % | | | | |
Pass | | $ | 0 | | $ | 0 | | $ | 5,000 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 5,000 | | | | | |
Special Mention | | | 35,410 | | | 0 | | | 42,799 | | | 43,151 | | | 0 | | | 9,666 | | | 131,026 | | | | | |
Doubtful | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 880 | | | 880 | | | | | |
Total Office | | $ | 35,410 | | $ | 0 | | $ | 47,799 | | $ | 43,151 | | $ | 0 | | $ | 10,546 | | $ | 136,906 | | 3 | % | 80 | % |
Student Housing: | | | | | | | | | | | | | | | | | | Percentage of portfolio | | | 2 | % | | | | |
Special Mention | | $ | 0 | | $ | 31,100 | | $ | 3,350 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 34,450 | | | | | |
Substandard | | | 23,500 | | | 0 | | | 13,000 | | | 24,050 | | | 0 | | | 0 | | | 60,550 | | | | | |
Total Student Housing | | $ | 23,500 | | $ | 31,100 | | $ | 16,350 | | $ | 24,050 | | $ | 0 | | $ | 0 | | $ | 95,000 | | 18 | % | 74 | % |
Retail: | | | | | | | | | | | | | | | | | | Percentage of portfolio | | | 2 | % | | | | |
Pass | | $ | 0 | | $ | 4,000 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 4,000 | | | | | |
Special Mention | | | 0 | | | 0 | | | 35,600 | | | 0 | | | 0 | | | 0 | | | 35,600 | | | | | |
Substandard | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 3,478 | | | 3,478 | | | | | |
Total Retail | | $ | 0 | | $ | 4,000 | | $ | 35,600 | | $ | 0 | | $ | 0 | | $ | 3,478 | | $ | 43,078 | | 7 | % | 69 | % |
Other: | | | | | | | | | | | | | | | | | | Percentage of portfolio | | | 1 | % | | | | |
Pass | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 13,580 | | $ | 0 | | $ | 0 | | $ | 13,580 | | | | | |
Doubtful | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 1,700 | | | 1,700 | | | | | |
Total Other | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 13,580 | | $ | 0 | | $ | 1,700 | | $ | 15,280 | | 7 | % | 59 | % |
| | | | | | | | | | | | | | | | | | Percentage of portfolio | | | <1 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Grand Total | | $ | 2,336,090 | | $ | 2,170,578 | | $ | 453,903 | | $ | 333,010 | | $ | 8,250 | | $ | 173,251 | | $ | 5,475,082 | | 4 | % | 77 | % |
UPB by Origination Year | Total | Wtd. Avg. First Dollar LTV Ratio | Wtd. Avg. Last Dollar LTV Ratio | ||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Class / Risk Rating | 2023 | 2022 | 2021 | 2020 | 2019 | Prior | |||||||||||||||||||||||||||||||||||||||||||||||
Multifamily: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | 80,814 | $ | 53,316 | $ | 26,185 | $ | 2,010 | $ | 4,598 | $ | 20,300 | $ | 187,223 | |||||||||||||||||||||||||||||||||||||||
Pass/Watch | 317,358 | 2,561,938 | 2,223,155 | 119,860 | 84,600 | 58,044 | 5,364,955 | ||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | 24,424 | 1,762,539 | 2,631,689 | 180,750 | 140,685 | 350 | 4,740,437 | ||||||||||||||||||||||||||||||||||||||||||||||
Substandard | — | 435,878 | 322,987 | 8,006 | — | — | 766,871 | ||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | — | — | 13,930 | 14,800 | 9,765 | — | 38,495 | ||||||||||||||||||||||||||||||||||||||||||||||
Total Multifamily | $ | 422,596 | $ | 4,813,671 | $ | 5,217,946 | $ | 325,426 | $ | 239,648 | $ | 78,694 | $11,097,981 | 1 | % | 80 | % | ||||||||||||||||||||||||||||||||||||
Single-Family Rental: | Percentage of portfolio | 88 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | 9,709 | $ | 608 | $ | — | $ | — | $ | — | $ | — | $ | 10,317 | |||||||||||||||||||||||||||||||||||||||
Pass/Watch | 289,482 | 465,057 | 144,846 | 119,692 | — | — | 1,019,077 | ||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | 31,131 | 45,145 | 218,697 | — | — | — | 294,973 | ||||||||||||||||||||||||||||||||||||||||||||||
Total Single-Family Rental | $ | 330,322 | $ | 510,810 | $ | 363,543 | $ | 119,692 | $ | — | $ | — | $ | 1,324,367 | 0 | % | 62 | % | |||||||||||||||||||||||||||||||||||
Land: | Percentage of portfolio | 10 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass/Watch | $ | — | $ | — | $ | — | $ | 4,600 | $ | — | $ | — | $ | 4,600 | |||||||||||||||||||||||||||||||||||||||
Special Mention | — | — | — | 3,500 | — | — | 3,500 | ||||||||||||||||||||||||||||||||||||||||||||||
Substandard | — | — | — | — | — | 127,928 | 127,928 | ||||||||||||||||||||||||||||||||||||||||||||||
Total Land | $ | — | $ | — | $ | — | $ | 8,100 | $ | — | $ | 127,928 | $ | 136,028 | 0 | % | 97 | % | |||||||||||||||||||||||||||||||||||
Office: | Percentage of portfolio | 1 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
Special Mention | $ | — | $ | — | $ | — | $ | 35,410 | $ | — | $ | — | $ | 35,410 | |||||||||||||||||||||||||||||||||||||||
Total Office | $ | — | $ | — | $ | — | $ | 35,410 | $ | — | $ | — | $ | 35,410 | 0 | % | 80 | % | |||||||||||||||||||||||||||||||||||
Retail: | Percentage of portfolio | <1% | |||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 19,520 | $ | 19,520 | |||||||||||||||||||||||||||||||||||||||
Total Retail | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 19,520 | $ | 19,520 | 0 | % | 88 | % | |||||||||||||||||||||||||||||||||||
Commercial: | Percentage of portfolio | < 1% | |||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1,700 | $ | 1,700 | |||||||||||||||||||||||||||||||||||||||
Total Commercial | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1,700 | $ | 1,700 | 63 | % | 66 | % | |||||||||||||||||||||||||||||||||||
Percentage of portfolio | < 1% | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Grand Total | $ | 752,918 | $ | 5,324,481 | $ | 5,581,489 | $ | 488,628 | $ | 239,648 | $ | 227,842 | $ | 12,615,006 | 1 | % | 78 | % | |||||||||||||||||||||||||||||||||||
Charge-offs | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 5,700 | $ | 5,700 |
As of
72
December 31, 2020
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, 2020 | |||||||||||||||||||||||||
|
| Land |
| Multifamily |
| Retail |
| Office |
| Hotel |
| Student Housing |
| Healthcare |
| Other |
| Total | |||||||||
Allowance for credit losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance, prior to adoption of CECL | | $ | 67,869 | | $ | 0 | | $ | 0 | | $ | 1,500 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 1,700 | | $ | 71,069 |
Impact of adopting CECL - January 1, 2020 | |
| 77 | |
| 16,322 | |
| 335 | | | 287 | |
| 29 | | | 68 | |
| 64 | | | 112 | | | 17,294 |
Provision for credit losses (net of recoveries) | |
| 10,204 | |
| 20,146 | |
| 13,526 | | | 59 | |
| 7,730 | | | 4,010 | |
| 3,816 | | | 475 | | | 59,966 |
Ending balance | | $ | 78,150 | | $ | 36,468 | | $ | 13,861 | | $ | 1,846 | | $ | 7,759 | | $ | 4,078 | | $ | 3,880 | | $ | 2,287 | | $ | 148,329 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, 2019 | |||||||||||||||||||||||||
Allowance for credit losses | | $ | 67,869 | | $ | — | | $ | — | | $ | 1,500 | | $ | — | | $ | — | | $ | — | | $ | 1,700 | | $ | 71,069 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, 2018 | |||||||||||||||||||||||||
Allowance for credit losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | | $ | 53,883 | | $ | — | | $ | — | | $ | 1,500 | | $ | 5,700 | | $ | — | | $ | — | | $ | 1,700 | | $ | 62,783 |
Provision for credit losses | | | 13,986 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 13,986 |
Charge-offs | | | — | | | — | | | — | | | — | | | (3,173) | | | — | | | — | | | — | | | (3,173) |
Recoveries of reserves | | | — | | | — | | | — | | | — | | | (2,527) | | | — | | | — | | | — | | | (2,527) |
Ending balance | | $ | 67,869 | | $ | — | | $ | — | | $ | 1,500 | | $ | — | | $ | — | | $ | — | | $ | 1,700 | | $ | 71,069 |
Year Ended December 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||
Multifamily | Land | Retail | Commercial | Single- Family Rental | Office | Other | Total | ||||||||||||||||||||||||||||||||||||||||
Allowance for credit losses: | |||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 37,961 | $ | 78,068 | $ | 5,819 | $ | 1,700 | $ | 780 | $ | 8,162 | $ | 69 | $ | 132,559 | |||||||||||||||||||||||||||||||
Provision for credit losses (net of recoveries) | 72,886 | (10) | (2,526) | — | 844 | (2,320) | (69) | 68,805 | |||||||||||||||||||||||||||||||||||||||
Charge-offs | — | — | — | — | — | (5,700) | — | (5,700) | |||||||||||||||||||||||||||||||||||||||
Ending balance | $ | 110,847 | $ | 78,058 | $ | 3,293 | $ | 1,700 | $ | 1,624 | $ | 142 | $ | — | $ | 195,664 | |||||||||||||||||||||||||||||||
Year Ended December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
Allowance for credit losses: | |||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 18,707 | $ | 77,970 | $ | 5,819 | $ | 1,700 | $ | 319 | $ | 8,073 | $ | 653 | $ | 113,241 | |||||||||||||||||||||||||||||||
Provision for credit losses (net of recoveries) | 19,254 | 98 | — | — | 461 | 89 | (584) | 19,318 | |||||||||||||||||||||||||||||||||||||||
Ending balance | $ | 37,961 | $ | 78,068 | $ | 5,819 | $ | 1,700 | $ | 780 | $ | 8,162 | $ | 69 | $ | 132,559 | |||||||||||||||||||||||||||||||
Year Ended December 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||
Allowance for credit losses: | |||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 36,468 | $ | 78,150 | $ | 13,861 | $ | 1,700 | $ | 586 | $ | 1,846 | $ | 15,718 | $ | 148,329 | |||||||||||||||||||||||||||||||
Provision for credit losses (net of recoveries) | (17,761) | (180) | (42) | — | (267) | 6,227 | (12,292) | (24,315) | |||||||||||||||||||||||||||||||||||||||
Charge-offs | — | — | (8,000) | — | — | — | (2,773) | (10,773) | |||||||||||||||||||||||||||||||||||||||
Ending balance | $ | 18,707 | $ | 77,970 | $ | 5,819 | $ | 1,700 | $ | 319 | $ | 8,073 | $ | 653 | $ | 113,241 |
During 2018, we determined that the fair value of the underlying collateral (land development project) securing 6 loans with a carrying value of $121.4 million was less than the net carrying value of the loans, which resulted in a provision for loan losses of $12.3 million. We also fully reserved a bridge loan and recorded a provision for loan loss of $1.7 million.
In addition, during 2018, we received $31.6 million to settle a non-performing preferred equity investment in a hotel property with a UPB of $34.8 million and a net carrying value of $29.1 million, resulting in a charge-off of $3.2 million and a reserve recovery of $2.5 million. We also received payments and recorded recoveries of $3.1 million related to previously written-off loans and investments, which are included as a component of provision for loan losses (net of recoveries) on the consolidated statements of income.
factors.
As of
73
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
All of our structured loans and investments are collateralizedsecured by real estate assets or by interests in real estate assets, and, as such, the measurement of credit losses may be based on the difference between the fair value of the underlying collateral and the carrying value of the assets as of the period end. A summary of our specific loans considered impaired by asset class is as follows (in($ in thousands):
| | | | | | | | | | | | | | | | |
| | December 31, 2020 |
| |||||||||||||
| | | | | | | | Allowance | | Wtd. Avg. First | | Wtd. Avg. Last |
| |||
| | | | | Carrying | | for Credit | | Dollar LTV | | Dollar LTV |
| ||||
Asset Class |
| UPB (1) |
| Value |
| Losses |
| Ratio |
| Ratio |
| |||||
Land | | $ | 134,215 | | $ | 127,829 | | $ | 77,869 | | | 0 | % | | 99 | % |
Hotel | | | 110,000 | |
| 89,613 | |
| 7,500 | | | 0 | % |
| 94 | % |
Retail | | | 30,079 | |
| 28,957 | |
| 13,851 | | | 10 | % |
| 75 | % |
Healthcare | | | 4,625 | |
| 4,673 | |
| 3,845 | | | 0 | % |
| 83 | % |
Office | |
| 2,166 | | | 2,166 | |
| 1,500 | |
| 0 | % |
| 71 | % |
Commercial | |
| 1,700 | |
| 1,700 | |
| 1,700 | |
| 63 | % |
| 63 | % |
Total | | $ | 282,785 | | $ | 254,938 | | $ | 106,265 | | | 1 | % | | 94 | % |
| | | | | | | | | | | | | | | | |
| | December 31, 2019 |
| |||||||||||||
Land | | $ | 134,215 | | $ | 126,800 | | $ | 67,869 | | | 0 | % | | 97 | % |
Office | |
| 2,226 | |
| 2,226 | |
| 1,500 | |
| 0 | % |
| 78 | % |
Commercial | |
| 1,700 | |
| 1,700 | |
| 1,700 | |
| 63 | % |
| 63 | % |
Total | | $ | 138,141 | | $ | 130,726 | | $ | 71,069 | | | 1 | % | | 96 | % |
December 31, 2023 | ||||||||||||||||||||||||||||||||
Asset Class | UPB (1) | Carrying Value | Allowance for Credit Losses | Wtd. Avg. First Dollar LTV Ratio | Wtd. Avg. Last Dollar LTV Ratio | |||||||||||||||||||||||||||
Multifamily | $ | 272,493 | $ | 260,291 | $ | 37,750 | 0 | % | 100 | % | ||||||||||||||||||||||
Land | 134,215 | 127,868 | 77,869 | 0 | % | 99 | % | |||||||||||||||||||||||||
Retail | 19,521 | 15,037 | 3,292 | 0 | % | 88 | % | |||||||||||||||||||||||||
Commercial | 1,700 | 1,700 | 1,700 | 63 | % | 66 | % | |||||||||||||||||||||||||
Total | $ | 427,929 | $ | 404,896 | $ | 120,611 | 0 | % | 99 | % | ||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||
Land | $ | 134,215 | $ | 127,868 | $ | 77,869 | 0 | % | 99 | % | ||||||||||||||||||||||
Retail | 22,045 | 17,563 | 5,817 | 14 | % | 79 | % | |||||||||||||||||||||||||
Commercial | 1,700 | 1,700 | 1,700 | 63 | % | 63 | % | |||||||||||||||||||||||||
Total | $ | 157,960 | $ | 147,131 | $ | 85,386 | 3 | % | 96 | % |
2022.
December 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||
UPB | Less Than 90 Days Past Due | Greater Than 90 Days Past Due | UPB | Less Than 90 Days Past Due | Greater Than 90 Days Past Due | ||||||||||||||||||||||||||||||
Multifamily | $ | 271,532 | $ | — | $ | 271,532 | $ | 2,605 | $ | — | $ | 2,605 | |||||||||||||||||||||||
Commercial | 1,700 | — | 1,700 | 1,700 | — | 1,700 | |||||||||||||||||||||||||||||
Retail | 920 | — | 920 | 3,445 | — | 3,445 | |||||||||||||||||||||||||||||
Total | $ | 274,152 | $ | — | $ | 274,152 | $ | 7,750 | $ | — | $ | 7,750 |
| | | | | | | | | | | | | | | | | | |
| | December 31, 2020 | | December 31, 2019 | ||||||||||||||
| | | | | Less Than | | Greater Than | | | | | Less Than | | Greater Than | ||||
| | | | 90 Days | | 90 Days | | | | 90 Days | | 90 Days | ||||||
|
| UPB |
| Past Due |
| Past Due |
| UPB |
| Past Due |
| Past Due | ||||||
Student Housing | | $ | 36,500 | | $ | — | | $ | 36,500 | | $ | — | | $ | — | | $ | — |
Multifamily | | | 17,700 | | | — | | | 17,700 | | | — | | | — | | | — |
Healthcare | | | 4,625 | | | — | | | 4,625 | | | — | | | — | | | — |
Commercial | | | 1,700 | | | — | | | 1,700 | | | 1,700 | | | — | | | 1,700 |
Retail | | | 920 | | | — | | | 920 | | | 1,000 | | | — | | | 1,000 |
Office | | | 880 | | | — | | | 880 | | | 880 | | | — | | | 880 |
Total | | $ | 62,325 | | $ | — | | $ | 62,325 | | $ | 3,580 | | $ | — | | $ | 3,580 |
74
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
both December 31, 2020
31, 20202023 and 2019,2022, we had a cumulative allowance for credit losses of $71.4 million and $61.4 million, respectively, related to these loans. The loans are subject to certain risks
At both December 31, 2020 and 2019, we had 0 loans contractually past due 90 days or more that are still accruing interest. During both 2020 and 2019, interest income recognized on nonaccrual loans was de minimis.
also personally guaranteeing the $8.0 million capital improvement.
These 2 loan modifications were deemed troubled debt restructurings. There were 0 loan modifications, refinancing’s and/or extensions during 2019 that were considered troubled debt restructurings.
loan.
75
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
| | | | | | | |
|
| | December 31, 2020 |
| December 31, 2019 | ||
Fannie Mae | | | $ | 679,342 | | $ | 408,534 |
Freddie Mac | | | | 180,004 | | | 36,303 |
Private Label | | |
| 56,186 | | | 401,207 |
FHA | | | | 53,063 | | | 1,082 |
| | |
| 968,595 | | | 847,126 |
Fair value of future MSR | | | | 21,600 | | | 16,519 |
Unearned discount | | |
| (3,276) | | | (2,285) |
Loans held-for-sale, net | | | $ | 986,919 | | $ | 861,360 |
December 31, 2023 | December 31, 2022 | ||||||||||
Fannie Mae | $ | 477,212 | $ | 173,020 | |||||||
Private Label | 50,235 | 152,735 | |||||||||
FHA | 11,350 | 21,021 | |||||||||
SFR - Fixed Rate | 8,696 | 12,352 | |||||||||
Freddie Mac | 4,832 | 8,938 | |||||||||
552,325 | 368,066 | ||||||||||
Fair value of future MSR | 7,784 | 5,557 | |||||||||
Unrealized impairment loss | (1,989) | (15,703) | |||||||||
Unearned discount | (6,413) | (3,850) | |||||||||
Loans held-for-sale, net | $ | 551,707 | $ | 354,070 |
| | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, 2020 | | Year Ended December 31, 2019 | ||||||||||||||
|
| Originated |
| Acquired |
| Total |
| Originated |
| Acquired |
| Total | ||||||
Beginning balance | | $ | 221,901 | | $ | 64,519 | | $ | 286,420 | | $ | 176,686 | | $ | 97,084 | | $ | 273,770 |
Additions | | | 159,533 | | | — | | | 159,533 | | | 83,756 | | | — | | | 83,756 |
Amortization | | | (34,186) | | | (15,036) | | | (49,222) | | | (27,639) | | | (21,042) | | | (48,681) |
Write-downs and payoffs | | | (10,782) | | | (5,975) | | | (16,757) | | | (10,902) | | | (11,523) | | | (22,425) |
Ending balance | | $ | 336,466 | | $ | 43,508 | | $ | 379,974 | | $ | 221,901 | | $ | 64,519 | | $ | 286,420 |
Year Ended December 31, 2023 | Year Ended December 31, 2022 | ||||||||||||||||||||||||||||||||||
Originated | Acquired | Total | Originated | Acquired | Total | ||||||||||||||||||||||||||||||
Beginning balance | $ | 386,878 | $ | 14,593 | $ | 401,471 | $ | 395,573 | $ | 27,161 | $ | 422,734 | |||||||||||||||||||||||
Additions | 67,612 | — | 67,612 | 83,115 | — | 83,115 | |||||||||||||||||||||||||||||
Amortization | (59,182) | (3,911) | (63,093) | (53,449) | (6,427) | (59,876) | |||||||||||||||||||||||||||||
Write-downs and payoffs | (12,726) | (2,010) | (14,736) | (38,361) | (6,141) | (44,502) | |||||||||||||||||||||||||||||
Ending balance | $ | 382,582 | $ | 8,672 | $ | 391,254 | $ | 386,878 | $ | 14,593 | $ | 401,471 |
76
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
The expected amortization of capitalized MSRs recorded as ofat December 31, 20202023 is as follows (in thousands):
| | | |
Year |
| Amortization | |
2021 |
| $ | 54,514 |
2022 |
| | 50,862 |
2023 |
| | 46,929 |
2024 |
| | 42,898 |
2025 | | | 39,779 |
Thereafter |
| | 144,992 |
Total | | $ | 379,974 |
Actual
Year | Amortization | |||||||
2024 | $ | 65,500 | ||||||
2025 | 62,514 | |||||||
2026 | 56,969 | |||||||
2027 | 52,366 | |||||||
2028 | 45,188 | |||||||
Thereafter | 108,717 | |||||||
Total | $ | 391,254 |
| | | | | | | | | | |
December 31, 2020 | | |||||||||
Product Concentrations | | Geographic Concentrations | | |||||||
| | | | | | | | | UPB | |
|
| | |
| Percent of |
| |
| Percentage |
|
Product | | UPB (1) | | Total | | State | | of Total | | |
Fannie Mae | | $ | 18,268,268 | | 74 | % | Texas | | 16 | % |
Freddie Mac | | | 4,881,080 |
| 20 | % | New York | | 9 | % |
FHA | | | 752,116 |
| 3 | % | North Carolina | | 9 | % |
Private Label (2) | | | 726,992 | | 3 | % | California | | 9 | % |
Total | | $ | 24,628,456 | | 100 | % | Florida | | 7 | % |
| | | | | | | Georgia | | 6 | % |
| | | | | | | New Jersey | | 4 | % |
| | | | | | | Other (3) | | 40 | % |
| | | | | | | Total | | 100 | % |
| | | | | | | | | | |
December 31, 2019 | | |||||||||
Fannie Mae |
| $ | 14,832,844 |
| 74 | % | Texas |
| 19 | % |
Freddie Mac | | | 4,534,714 | | 23 | % | North Carolina | | 9 | % |
FHA | | | 691,519 | | 3 | % | New York | | 9 | % |
Total | | $ | 20,059,077 | | 100 | % | California | | 9 | % |
| | | | | | | Florida | | 6 | % |
| | | | | | | Georgia | | 6 | % |
| | | | | | | Other (3) | | 42 | % |
| | | | | | | Total | | 100 | % |
December 31, 2023 | ||||||||||||||||||||||||||
Product Concentrations | Geographic Concentrations | |||||||||||||||||||||||||
Product | UPB (1) | % of Total | State | UPB % of Total | ||||||||||||||||||||||
Fannie Mae | $ | 21,264,578 | 69 | % | Texas | 11 | % | |||||||||||||||||||
Freddie Mac | 5,181,933 | 17 | % | New York | 11 | % | ||||||||||||||||||||
Private Label | 2,510,449 | 8 | % | California | 8 | % | ||||||||||||||||||||
FHA | 1,359,624 | 4 | % | North Carolina | 8 | % | ||||||||||||||||||||
Bridge (2) | 379,425 | 1 | % | Georgia | 6 | % | ||||||||||||||||||||
SFR - Fixed Rate | 287,446 | 1 | % | Florida | 6 | % | ||||||||||||||||||||
Total | $ | 30,983,455 | 100 | % | New Jersey | 5 | % | |||||||||||||||||||
Illinois | 4 | % | ||||||||||||||||||||||||
Other (3) | 41 | % | ||||||||||||||||||||||||
Total | 100 | % | ||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||
Fannie Mae | $ | 19,038,124 | 68 | % | Texas | 11 | % | |||||||||||||||||||
Freddie Mac | 5,153,207 | 18 | % | New York | 11 | % | ||||||||||||||||||||
Private Label | 2,074,859 | 8 | % | California | 8 | % | ||||||||||||||||||||
FHA | 1,155,893 | 4 | % | North Carolina | 8 | % | ||||||||||||||||||||
Bridge (2) | 301,182 | 1 | % | Georgia | 6 | % | ||||||||||||||||||||
SFR - Fixed Rate | 274,764 | 1 | % | Florida | 5 | % | ||||||||||||||||||||
Total | $ | 27,998,029 | 100 | % | New Jersey | 5 | % | |||||||||||||||||||
Illinois | 4 | % | ||||||||||||||||||||||||
Other (3) | 42 | % | ||||||||||||||||||||||||
Total | 100 | % |
77
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
at several federally insured depository institutions, which may exceed FDIC insured limits. We earn interest income on the total escrow deposits, which is generally based on a market rate of interest negotiated with the financial institutions that hold the escrow deposits.Interest earned on total escrows, net of interest paid to the borrower, was $7.1 million, $17.3 million and $12.8 million during 2020, 2019 and 2018, respectively, and is included as a component of servicing revenue, net in the consolidated statements of income.
income as noted in the following table.
Year Ended December 31, | |||||||||||||||||
2023 | 2022 | 2021 | |||||||||||||||
Servicing fees | $ | 123,975 | $ | 123,937 | $ | 123,758 | |||||||||||
Interest earned on escrows | 77,916 | 24,436 | 4,191 | ||||||||||||||
Prepayment fees | 6,387 | 48,197 | 38,221 | ||||||||||||||
Write-offs of MSRs | (14,736) | (44,502) | (32,741) | ||||||||||||||
Amortization of MSRs | (63,093) | (59,876) | (58,615) | ||||||||||||||
Servicing revenue, net | $ | 130,449 | $ | 92,192 | $ | 74,814 |
Agency Private Label Certificates. In connection with our $727.2 million Private Label securitization in May 2020, we retained the most subordinate class of certificates with an initial face value of $63.6 million (APL certificates). We purchased the APL certificates at a discount for $37.9 million, which are collateralized by a pool of 40 fixed rate 10-year mortgage loans secured by first mortgage loans on 49 multifamily properties, bear interest at an initial weighted average variable rate of 4.95% and have an estimated weighted average remaining maturity of 9.0 years. The weighted average effective interest rate was 10.15% at December 31, 2020 and the full $63.6 million is expected to mature after five years through ten years.
Structured Single-Family Rental Bonds (“SFR bonds”). During the fourth quarter of 2020, we reclassified our Class A2 SFR bonds with a carrying value of $20.0 million to available-for-sale from held-to-maturity as a result of a change in our intent to hold the securities to maturity due to an isolated and nonrecurring event. We do not anticipate sales of any of our remaining securities classified as held-to-maturity in the future. During the fourth quarter of 2020, we sold one of our $10.0 million SFR bonds, and in January 2021, we sold the remaining $10.0 million SFR bond to third-party investors for an amount slightly below par. The $10.0 million SFR bond that remained at December 31, 2020 was included as a component of other assets in the consolidated balance sheets.
| | | | | | | | | | | | | | | |
| | | | Net Carrying | | Unrealized | | Estimated | | Allowance for | |||||
|
| Face Value |
| Value |
| Gain/(Loss) |
| Fair Value |
| Credit Losses | |||||
December 31, 2020 | | | | | | | | | | | | | | | |
B Piece bonds | | $ | 76,497 | | $ | 57,839 | | $ | 709 | | $ | 58,548 | | $ | 621 |
APL certificates | | | 63,627 | | | 37,685 | | | (2,105) | | | 35,580 | | | 1,023 |
Total | | $ | 140,124 | | $ | 95,524 | | $ | (1,396) | | $ | 94,128 | | $ | 1,644 |
December 31, 2019 | | | | | | | | | | | | | | | |
B Piece bonds | | $ | 91,028 | | $ | 68,699 | | $ | 2,965 | | $ | 71,664 | | $ | — |
SFR bonds | | | 20,000 | | | 20,000 | | | 74 | | | 20,074 | | | — |
Total | | $ | 111,028 | | $ | 88,699 | | $ | 3,039 | | $ | 91,738 | | $ | — |
78
Face Value | Net Carrying Value | Unrealized Gain (Loss) | Estimated Fair Value | Allowance for Credit Losses | |||||||||||||||||||||||||
December 31, 2023 | |||||||||||||||||||||||||||||
APL certificates | $ | 192,791 | $ | 128,865 | $ | (31,331) | $ | 97,534 | $ | 2,272 | |||||||||||||||||||
B Piece bonds | 37,704 | 26,414 | 5,442 | 31,856 | 3,984 | ||||||||||||||||||||||||
Total | $ | 230,495 | $ | 155,279 | $ | (25,889) | $ | 129,390 | $ | 6,256 | |||||||||||||||||||
December 31, 2022 | |||||||||||||||||||||||||||||
APL certificates | $ | 192,791 | $ | 123,475 | $ | (13,348) | $ | 110,127 | $ | 2,783 | |||||||||||||||||||
B Piece bonds | 41,464 | 33,072 | 1,372 | 34,444 | 370 | ||||||||||||||||||||||||
Total | $ | 234,255 | $ | 156,547 | $ | (11,976) | $ | 144,571 | $ | 3,153 |
December 31, 2020
A summary of the changes in the allowance for credit losses for our securities held-to-maturity is as follows (in thousands):
| | | | | | | | | |
| | Year Ended December 31, 2020 | |||||||
| | APL | | B Piece | | Total | |||
| | | | | | | | | |
Beginning balance, prior to adoption of CECL | | $ | — | | $ | — | | $ | — |
Impact of adopting CECL – January 1, 2020 | |
| — | |
| 501 | |
| 501 |
Provision for credit loss expense | |
| 1,023 | |
| 120 | |
| 1,143 |
Ending balance | | $ | 1,023 | | $ | 621 | | $ | 1,644 |
Year Ended December 31, 2023 | |||||||||||||||||
APL Certificates | B Piece Bonds | Total | |||||||||||||||
Beginning balance | $ | 2,783 | $ | 370 | $ | 3,153 | |||||||||||
Provision for credit loss expense/(reversal) | (511) | 3,614 | 3,103 | ||||||||||||||
Ending balance | $ | 2,272 | $ | 3,984 | $ | 6,256 |
During 2020, 2019 and 2018, we
investments of $13.6 million, $18.6 million and $13.2 million during 2023, 2022 and 2021, respectively.
| | | | | | | | | |
| | | | | | | | UPB of Loans to | |
| | Investments in Equity Affiliates at | | Equity Affiliates at | |||||
Equity Affiliates |
| December 31, 2020 |
| December 31, 2019 |
| December 31, 2020 | |||
Arbor Residential Investor LLC | | $ | 59,150 | | $ | 26,520 | | $ | — |
AMAC Holdings III LLC | | | 10,308 | | | 10,520 | | | — |
North Vermont Avenue | | | 2,496 | | | 2,440 | | | — |
Lightstone Value Plus REIT L.P. | | | 1,895 | | | 1,895 | | | — |
JT Prime | |
| 425 | |
| 425 | |
| — |
West Shore Café | | | — | | | — | | | 1,687 |
Lexford Portfolio | | | — | | | — | | | — |
East River Portfolio | |
| — | |
| — | |
| — |
Total | | $ | 74,274 | | $ | 41,800 | | $ | 1,687 |
Investments in Equity Affiliates at | UPB of Loans to Equity Affiliates at December 31, 2023 | |||||||||||||||||||
Equity Affiliates | December 31, 2023 | December 31, 2022 | ||||||||||||||||||
Arbor Residential Investor LLC | $ | 32,743 | $ | 46,951 | $ | — | ||||||||||||||
AMAC Holdings III LLC | 13,591 | 15,825 | — | |||||||||||||||||
Fifth Wall Ventures | 13,365 | 13,584 | — | |||||||||||||||||
AWC Real Estate Opportunity Partners I LP | 11,671 | — | — | |||||||||||||||||
ARSR DPREF I LLC | 5,163 | — | — | |||||||||||||||||
Lightstone Value Plus REIT L.P. | 1,895 | 1,895 | — | |||||||||||||||||
Docsumo Pte. Ltd. | 450 | 450 | — | |||||||||||||||||
JT Prime | 425 | 425 | — | |||||||||||||||||
West Shore Café | — | — | 1,688 | |||||||||||||||||
Lexford Portfolio | — | — | — | |||||||||||||||||
East River Portfolio | — | — | — | |||||||||||||||||
Total | $ | 79,303 | $ | 79,130 | $ | 1,688 |
Subsequent Event. In January 2021, an equity investor in the underlying residential mortgage banking business exercised their right to purchase an additional interest in this investment, which decreased our indirect interest to 12.3%.
79
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
AMAC Holdings III LLC (“AMAC III”).III. In 2019, weWe committed to a $30.0$30.0 million investment (of which $11.7 million was funded as of December 31, 2020) for an 18% interest in a multifamily-focused commercial real estate investment fund that is sponsored and managed by our chief executive officer and one of his immediate family members.During 20202023, 2022 and 2019,2021, we recorded losses associated with this investment of $1.9 million, $2.4 million and $1.3 million, respectively. During 2023 and 2022, we made contributions of $0.7 million and $4.9 million, respectively, and received cash distributions from this investment totaling $0.1$1.1 million and $0.2$0.5 million, respectively, which were classified as returns of capital, related to this investment.
North Vermont Avenue. In 2019, we invested $2.4 million for an initial 85% noncontrolling interest in a joint venture that acquired three parcels of land, which currently has three residential structures, a commercial structure and a parking lot. The joint venture intends to tear down the existing structures and construct a new 202 unit multifamily complex with ground floor retail.$1.2 million. Operating results from this investment were de minimis for all periods presented.2022 and 2021.
Operating results from this investment were de minimis for all periods presented.
holders in 2021.
Note 9 – Real Estate Owned
A summary of our real estate assets is as follows (in thousands):
| | | | | | | | | | | | |
| | December 31, 2020 | | December 31, 2019 | ||||||||
|
| Office |
| Hotel |
| Office |
| | | |||
| | Building | | Property | | Building | | Total | ||||
Land | | $ | 3,138 | | $ | 3,294 | | $ | 4,509 | | $ | 7,803 |
Building and intangible assets | | | 2,010 | |
| 31,541 | |
| 2,010 | |
| 33,551 |
Less: Impairment loss | | | (2,500) | | | (14,307) | | | (2,500) | | | (16,807) |
Less: Accumulated depreciation and amortization | | | (1,163) | |
| (10,320) | |
| (1,007) | |
| (11,327) |
Real estate owned, net | | $ | 1,485 | | $ | 10,208 | | $ | 3,012 | | $ | 13,220 |
In the third quarter of 2020, we sold our hotel property for $8.4million and recorded a $1.9 million loss, which is included in loss on sale of real estate. In addition, we paid $2.5million in connection with a litigation settlement related to this property, which is included in selling and administrative expenses.
80
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
In November 2020, we sold a non-operating property for $4.1million and recorded a $1.0 million gain, which was included in loss on sale of real estate. This non-operating property was previously included in other assets on the consolidated balance sheets.
Our office building was fully occupied by a single tenant until April 2017, when the lease expired. The building is currently vacant.In the fourth quarter of 2020, we received $1.5 million related to a signage easement sold on this property and recorded the proceeds as a reduction of the carrying cost.
Through site visits and discussions with market participants, we determined that our real estate assets exhibited indicators of impairment and, based on our impairment analyses performed, we recorded impairment losses of $1.0 million and $2.0 million in 2019 and 2018, respectively.
Note 109 — Goodwill and Other Intangible Assets
| | | | | | | | | | | | | | | | | | |
| | December 31, 2020 | | December 31, 2019 | ||||||||||||||
| | Gross | | | | | | | | Gross | | | | | | | ||
| | Carrying | | Accumulated | | | | | Carrying | | Accumulated | | | | ||||
|
| Value |
| Amortization |
| Total |
| Value |
| Amortization |
| Total | ||||||
Finite‑lived intangible assets: |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Broker relationships | | $ | 25,000 | | $ | (13,932) | | $ | 11,068 | | $ | 25,000 | | $ | (10,807) | | $ | 14,193 |
Borrower relationships | |
| 14,400 | |
| (6,420) | |
| 7,980 | |
| 14,400 | |
| (4,980) | |
| 9,420 |
Below market leases | |
| 4,010 | |
| (3,233) | |
| 777 | |
| 4,010 | |
| (2,548) | |
| 1,462 |
Infinite‑lived intangible assets: | |
|
| |
|
| |
| | |
|
| |
|
| |
| |
Fannie Mae DUS license | |
| 17,100 | |
| — | |
| 17,100 | |
| 17,100 | |
| — | |
| 17,100 |
Freddie Mac Program Plus license | |
| 8,700 | |
| — | |
| 8,700 | |
| 8,700 | |
| — | |
| 8,700 |
FHA license | |
| 3,200 | |
| — | |
| 3,200 | |
| 3,200 | |
| — | |
| 3,200 |
| | $ | 72,410 | | $ | (23,585) | | $ | 48,825 | | $ | 72,410 | | $ | (18,335) | | $ | 54,075 |
December 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||
Gross Carrying Value | Accumulated Amortization | Total | Gross Carrying Value | Accumulated Amortization | Total | ||||||||||||||||||||||||||||||
Finite‑lived intangible assets: | |||||||||||||||||||||||||||||||||||
Broker relationships | $ | 25,000 | $ | (23,307) | $ | 1,693 | $ | 25,000 | $ | (20,182) | $ | 4,818 | |||||||||||||||||||||||
Borrower relationships | 14,400 | (10,740) | 3,660 | 14,400 | (9,300) | 5,100 | |||||||||||||||||||||||||||||
Below market leases | 4,010 | (3,611) | 399 | 4,010 | (3,485) | 525 | |||||||||||||||||||||||||||||
Infinite‑lived intangible assets: | |||||||||||||||||||||||||||||||||||
Fannie Mae DUS license | 17,100 | — | 17,100 | 17,100 | — | 17,100 | |||||||||||||||||||||||||||||
Freddie Mac Program Plus license | 8,700 | — | 8,700 | 8,700 | — | 8,700 | |||||||||||||||||||||||||||||
FHA license | 3,200 | — | 3,200 | 3,200 | — | 3,200 | |||||||||||||||||||||||||||||
$ | 72,410 | $ | (37,658) | $ | 34,752 | $ | 72,410 | $ | (32,967) | $ | 39,443 |
2021.
| | | | | | | | | | | | | | | | | |
| | | | Estimated Amortization Expense for the | |||||||||||||
| | | | Years Ending December 31, | |||||||||||||
| | Wtd. Avg. | | | | | | | | | | | | | | | |
| | Remaining Life | | | | | | | | | | | | | | | |
|
| (in years) |
| 2021 |
| 2022 |
| 2023 |
| 2024 |
| 2025 | |||||
Finite‑lived intangible assets: |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
Broker relationships |
| 3.5 | | $ | 3,125 | | $ | 3,125 | | $ | 3,125 | | $ | 1,693 | | $ | — |
Borrower relationships |
| 5.5 | |
| 1,440 | |
| 1,440 | |
| 1,440 | |
| 1,440 | |
| 1,440 |
Below market leases |
| 6.2 | |
| 126 | |
| 126 | |
| 126 | |
| 126 | |
| 126 |
|
| 4.4 | | $ | 4,691 | | $ | 4,691 | | $ | 4,691 | | $ | 3,259 | | $ | 1,566 |
Wtd. Avg. Remaining Life (in years) | Estimated Amortization Expense for the Years Ending December 31, | ||||||||||||||||||||||||||||||||||
2024 | 2025 | 2026 | 2027 | ||||||||||||||||||||||||||||||||
Finite‑lived intangible assets: | |||||||||||||||||||||||||||||||||||
Broker relationships | 0.5 | $ | 1,693 | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||
Borrower relationships | 2.5 | 1,440 | 1,440 | 780 | — | ||||||||||||||||||||||||||||||
Below market leases | 3.2 | 126 | 126 | 126 | 21 | ||||||||||||||||||||||||||||||
2.0 | $ | 3,259 | $ | 1,566 | $ | 906 | $ | 21 |
81
December 31, 2020
Facilities
December 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||
UPB | Debt Carrying Value (1) | Collateral Carrying Value | Wtd. Avg. Note Rate | UPB | Debt Carrying Value (1) | Collateral Carrying Value | Wtd. Avg. Note Rate | |||||||||||||||||||||||||||||||||||||||||||
Structured Business | ||||||||||||||||||||||||||||||||||||||||||||||||||
$2.5B joint repurchase facility (2) | $ | 870,073 | $ | 868,077 | $ | 1,371,436 | 7.81 | % | $ | 1,524,831 | $ | 1,516,657 | $ | 2,099,447 | 6.73 | % | ||||||||||||||||||||||||||||||||||
$1B repurchase facility (2) | 386,576 | 385,779 | 589,533 | 7.68 | % | 499,891 | 498,666 | 703,740 | 6.39 | % | ||||||||||||||||||||||||||||||||||||||||
$500M repurchase facility | 448,411 | 447,490 | 597,205 | 8.38 | % | 155,121 | 154,653 | 188,563 | 7.16 | % | ||||||||||||||||||||||||||||||||||||||||
$499M repurchase facility (2)(3) | 355,328 | 355,328 | 506,753 | 7.83 | % | 351,056 | 351,056 | 504,506 | 6.64 | % | ||||||||||||||||||||||||||||||||||||||||
$450M repurchase facility | 263,061 | 262,820 | 362,465 | 7.55 | % | 344,576 | 344,237 | 450,736 | 6.36 | % | ||||||||||||||||||||||||||||||||||||||||
$250M credit facility | 17,997 | 17,964 | 23,088 | 7.32 | % | 33,246 | 33,221 | 43,238 | 6.25 | % | ||||||||||||||||||||||||||||||||||||||||
$250M repurchase facility | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
$225M credit facility | 103,552 | 103,552 | 139,252 | 8.04 | % | 47,398 | 47,398 | 81,119 | 6.90 | % | ||||||||||||||||||||||||||||||||||||||||
$200M repurchase facility | 32,599 | 32,579 | 41,522 | 7.03 | % | 187,428 | 186,639 | 239,678 | 6.18 | % | ||||||||||||||||||||||||||||||||||||||||
$200M repurchase facility | 46,403 | 45,969 | 68,762 | 8.04 | % | 33,155 | 32,494 | 47,750 | 6.95 | % | ||||||||||||||||||||||||||||||||||||||||
$200M repurchase facility | 107,355 | 107,324 | 141,130 | 7.44 | % | 155,240 | 154,516 | 200,099 | 6.33 | % | ||||||||||||||||||||||||||||||||||||||||
$121M loan specific credit facilities | 120,660 | 120,328 | 161,700 | 6.91 | % | 156,543 | 156,107 | 225,805 | 6.42 | % | ||||||||||||||||||||||||||||||||||||||||
$50M credit facility | 29,200 | 29,200 | 36,500 | 7.58 | % | 29,200 | 29,194 | 36,500 | 6.48 | % | ||||||||||||||||||||||||||||||||||||||||
$40M credit facility | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
$35M working capital facility | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
$25M credit facility | 17,093 | 17,058 | 22,816 | 8.09 | % | 19,177 | 18,701 | 24,572 | 6.99 | % | ||||||||||||||||||||||||||||||||||||||||
Repurchase facility - securities (2)(4) | 31,033 | 31,033 | — | 7.15 | % | 12,832 | 12,832 | — | 6.99 | % | ||||||||||||||||||||||||||||||||||||||||
Structured Business total | $ | 2,829,341 | $ | 2,824,501 | $ | 4,062,162 | 7.80 | % | $ | 3,549,694 | $ | 3,536,371 | $ | 4,845,753 | 6.59 | % | ||||||||||||||||||||||||||||||||||
Agency Business | ||||||||||||||||||||||||||||||||||||||||||||||||||
$750M ASAP agreement | $ | 73,011 | $ | 73,011 | $ | 73,781 | 6.49 | % | $ | 29,476 | $ | 29,476 | $ | 30,291 | 5.21 | % | ||||||||||||||||||||||||||||||||||
$500M joint repurchase facility (2) | 7,945 | 7,833 | 11,350 | 7.77 | % | 105,275 | 104,629 | 135,641 | 6.52 | % | ||||||||||||||||||||||||||||||||||||||||
$500M repurchase facility | 115,841 | 115,730 | 241,895 | 6.83 | % | 66,866 | 66,778 | 66,866 | 5.73 | % | ||||||||||||||||||||||||||||||||||||||||
$200M credit facility | 187,185 | 187,138 | 187,185 | 6.78 | % | 31,519 | 31,475 | 33,177 | 5.76 | % | ||||||||||||||||||||||||||||||||||||||||
$100M credit facility | — | — | — | — | 57,974 | 57,887 | 57,974 | 5.76 | % | |||||||||||||||||||||||||||||||||||||||||
$50M credit facility | 29,085 | 29,083 | 29,418 | 6.73 | % | 14,671 | 14,664 | 14,671 | 5.65 | % | ||||||||||||||||||||||||||||||||||||||||
$1M repurchase facility (2)(3) | 531 | 531 | 866 | 7.86 | % | 534 | 534 | 920 | 6.66 | % | ||||||||||||||||||||||||||||||||||||||||
Agency Business total | $ | 413,598 | $ | 413,326 | $ | 544,495 | 6.76 | % | $ | 306,315 | $ | 305,443 | $ | 339,540 | 5.96 | % | ||||||||||||||||||||||||||||||||||
Consolidated total | $ | 3,242,939 | $ | 3,237,827 | $ | 4,606,657 | 7.67 | % | $ | 3,856,009 | $ | 3,841,814 | $ | 5,185,293 | 6.54 | % |
| | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2020 | | December 31, 2019 |
| ||||||||||||||||||
| | | | | Debt | | Collateral | | | | | | | Debt | | Collateral | | |
| ||||
| | | | | Carrying | | Carrying | | Wtd. Avg. | | | | | Carrying | | Carrying | | Wtd. Avg. |
| ||||
|
| UPB |
| Value(1) |
| Value |
| Note Rate |
| UPB |
| Value(1) |
| Value |
| Note Rate |
| ||||||
Structured Business | | |
|
| |
|
| |
|
|
|
| |
|
| |
|
| |
|
|
| |
$700 million joint repurchase facility | | $ | 682,958 | | $ | 681,006 | | $ | 1,054,562 | | 2.55 | % | $ | 225,051 | | $ | 224,658 | | $ | 339,378 | | 4.06 | % |
$400 million repurchase facility | |
| 192,193 | |
| 191,622 | |
| 259,559 | | 2.99 | % |
| 218,891 | |
| 218,418 | |
| 291,292 | | 3.76 | % |
$200 million repurchase facility | |
| 71,656 | | | 71,627 | | | 87,242 | | 2.73 | % |
| 40,612 | | | 40,530 | | | 48,086 | | 4.22 | % |
$148.8 million loan specific credit facilities | |
| 148,798 | |
| 148,615 | |
| 198,550 | | 3.03 | % |
| 133,957 | |
| 133,528 | |
| 190,716 | | 4.14 | % |
$100 million credit facility | |
| 39,389 | | | 39,346 | | | 47,912 | | 2.24 | % |
| 4,690 | | | 4,570 | | | 7,000 | | 3.56 | % |
$100 million credit facility | |
| — | | | — | | | — | | — | |
| — | | | — | | | — | | — | |
$100 million repurchase facility | |
| 31,780 | |
| 31,780 | |
| 40,551 | | 1.92 | % |
| 45,962 | |
| 45,843 | |
| 63,800 | | 3.56 | % |
$50 million credit facility | |
| 16,002 | |
| 15,992 | |
| 21,300 | | 2.17 | % |
| 14,948 | |
| 14,933 | |
| 17,650 | | 3.81 | % |
$50 million credit facility | |
| 23,857 | | | 23,606 | | | 31,809 | | 4.06 | % |
| 12,349 | | | 12,191 | | | 16,499 | | 4.32 | % |
$30 million working capital facility | |
| 30,000 | | | 30,000 | | | — | | 3.55 | % |
| — | | | — | | | — | | — | |
$25 million credit facility | |
| 9,539 | | | 9,323 | | | 14,340 | | 2.43 | % |
| 19,936 | | | 19,651 | | | 28,572 | | 4.07 | % |
$1.4 million master security agreements | |
| 1,441 | | | 1,441 | | | — | | 4.10 | % |
| 3,267 | | | 3,267 | | | — | | 4.08 | % |
Repurchase facilities - securities (2) | |
| 38,487 | | | 38,487 | | | — | | 3.47 | % |
| 217,105 | | | 217,105 | | | — | | 3.90 | % |
Structured Business total | | $ | 1,286,100 | | $ | 1,282,845 | | $ | 1,755,825 | | 2.73 | % | $ | 936,768 | | $ | 934,694 | | $ | 1,002,993 | | 3.94 | % |
Agency Business | |
|
| |
|
| |
|
|
|
| |
|
| |
|
| |
|
|
|
| |
$750 million ASAP agreement | | $ | 301,455 | | $ | 301,455 | | $ | 302,491 | | 1.40 | % | $ | 148,725 | | $ | 148,725 | | $ | 148,725 | | 2.81 | % |
$400 million joint repurchase facility | |
| 43,132 | | | 42,808 | | | 56,186 | | 2.07 | % |
| 300,446 | | | 299,824 | | | 300,446 | | 3.26 | % |
$400 million repurchase facility | |
| 174,555 | | | 174,515 | | | 174,555 | | 1.64 | % |
| 187,742 | | | 187,698 | | | 187,742 | | 2.91 | % |
$325 million credit facility | |
| 294,815 | | | 294,732 | | | 296,698 | | 1.30 | % |
| 89,673 | | | 89,657 | | | 89,673 | | 2.91 | % |
$250 million credit facility | |
| 88,911 | | | 88,896 | | | 88,911 | | 1.65 | % |
| — | | | — | | | — | | — | |
$150 million credit facility | |
| 49,754 | | | 49,632 | | | 49,754 | | 1.65 | % |
| 17,792 | | | 17,690 | | | 17,792 | | 2.91 | % |
Agency Business total | | $ | 952,622 | | $ | 952,038 | | $ | 968,595 | | 1.48 | % | $ | 744,378 | | $ | 743,594 | | $ | 744,378 | | 3.03 | % |
Consolidated total | | $ | 2,238,722 | | $ | 2,234,883 | | $ | 2,724,420 | | 2.20 | % | $ | 1,681,146 | | $ | 1,678,288 | | $ | 1,747,371 | | 3.54 | % |
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) During 2023, several of our credit and repurchase facilities, in both our Structured Business and Agency Business, converted from a LIBOR-based interest rate to a SOFR-based interest rate for new financings. At December 31, 2023, all of our credit and repurchase facilities are at a SOFR-based interest rate. Usually, our credit and |
|
|
Generally, our credit facilities and repurchase agreements have extension options that are at the discretion of the bankingfinancial institutions in which we have long standing relationships with. These facilities typically renew annually and also include a "wind-down" feature.
82
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
equal to a pro rata share of the LIBOR floors included in our originated loans. The facility has a maximum advance rate of 80% on all loans and has a $25.0 million over advance available to structured assets that bears interest at a rate of 650 basis points over LIBOR.loans. If the estimated market value of the loans financed in this facility decrease, we may be required to pay down borrowings under this facility.
Many of these facilities have a maximum advance rate between 70% to 83%, depending on the asset type financed.
October 2025.
September 2025.
We have another $100.0 million credit facility to finance single-family rental properties that bears interest at a rate of 300 basis points over LIBOR with an interest ratefloor of 4.00%SOFR plus 2.10% and matures in October 2022. The facility hasApril 2024, with a maximum advance rate of 75%.
one-year extension option.
We have a $50.0$40.0 million credit facility used to finance multifamilypurchase loans that bears interest at a rate of 200 basis points over LIBORSOFR plus 2.35% and matures in April 2021,2026, with a one-year extension option. This facility has a maximum advance rate of 80%.
We have another $50.0 million credit facility to finance single-family rental properties that bears interest at a rate of 250 basis points over LIBOR with an interest rate floor of 4.00%. The facility matures in October 2022, with a one-year extension option, and has a maximum advance rate equal to the lesser of: (1) 75% of the UPB, (2) 50% of the appraised value of the collateral, or (3) 55% to 65% of the projected cost of construction.
83
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
We have two notes payable under master security agreementsan uncommitted repurchase facility that wereis used to finance capital expenditures. The notes bear interest at a weighted average fixed rate of 4.10% and mature between 2021 and 2022.
We have four uncommitted repurchase facilities that are used to finance securities wecertificates retained in connection withby us from our CLOsQ Series securitization and our purchases of B Piece bonds from SBL program securitizations and SFR bonds. These facilities bearsecuritizations. This facility bears interest at rates ranging from 120 to 275 basis points over LIBORa rate of SOFR plus 2.60% and havehas no stated maturity dates.
date.
The financial institutions that provide these facilities generally have a security interest in the underlying mortgage notes that serve as collateral for these facilities.
floor.
November 2024.
2024.
We have another $150.0 million credit facility that bears interest at a rate of 140 basis points over LIBOR with a LIBOR floor of 25 basis pointsSOFR plus 1.46% and matures in July 2021.2024. This facility includes a $50.0$37.5 million sublimit for principal and interest advances we make as the primary servicer to Fannie Mae in connection with potential delinquent loans under the Fannie Mae forbearance program, which bears interest at a rate of 200 basis points over LIBOR with a LIBOR floor of 25 basis points. The financial institution that provided this facility has a security interest in the underlying mortgage notes that serve as collateral for this facility.
SOFR plus 1.86%.
84
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
CLOs
We account for our CLOsecuritized debt transactions on our consolidated balance sheet as financing facilities. Our CLOsThese transactions are considered VIEs for which we are the primary beneficiary and are consolidated in our financial statements. The investment grade tranchesnotes and guaranteed certificates issued to third parties are treated as secured financings and are non-recourse to us.
| | | | | | | | | | | | | | | | | |
| | Debt | | Collateral (3) | |||||||||||||
| | | | Loans | | Cash | |||||||||||
|
| |
| Carrying |
| Wtd. Avg. |
| |
| Carrying |
| Restricted | |||||
December 31, 2020 | | Face Value | | Value (1) | | Rate (2) | | UPB | | Value | | Cash (4) | |||||
CLO XIII | | $ | 668,000 | | $ | 663,804 | | 1.58 | % | $ | 768,664 | | $ | 768,664 | | $ | 43 |
CLO XII | | | 534,193 | | | 530,673 | | 1.66 | % | | 628,935 | | | 628,935 | | | 2,005 |
CLO XI | | | 533,000 | | | 529,859 | | 1.61 | % | | 555,157 | | | 555,157 | | | 92,395 |
CLO X | | | 441,000 | | | 438,442 | | 1.61 | % | | 522,132 | | | 522,132 | | | 25,537 |
CLO IX | |
| 356,150 | |
| 354,531 | | 1.53 | % |
| 457,903 | |
| 457,903 | |
| 18,703 |
Total CLOs | | $ | 2,532,343 | | $ | 2,517,309 | | 1.60 | % | $ | 2,932,791 | | $ | 2,932,791 | | $ | 138,683 |
| | | | | | | | | | | | | | | | | |
December 31, 2019 |
| |
| |
| |
| |
| |
| | |||||
CLO XII | | $ | 534,193 | | $ | 529,448 | | 3.30 | % | $ | 596,366 | | $ | 593,652 | | $ | 17,800 |
CLO XI | | | 533,000 | | | 528,690 | | 3.25 | % | | 624,443 | | | 621,508 | | | 15,550 |
CLO X | |
| 441,000 | |
| 437,391 | | 3.26 | % |
| 509,887 | |
| 507,854 | |
| 37,287 |
CLO IX | | | 356,400 | | | 353,473 | | 3.17 | % | | 407,696 | | | 406,463 | | | 47,230 |
CLO VIII | | | 282,874 | | | 281,119 | | 3.12 | % | | 359,186 | | | 357,914 | | | 544 |
Total CLOs | | $ | 2,147,467 | | $ | 2,130,121 | | 3.23 | % | $ | 2,497,578 | | $ | 2,487,391 | | $ | 118,411 |
Debt | Collateral (3) | |||||||||||||||||||||||||||||||||||||
Loans | Cash | |||||||||||||||||||||||||||||||||||||
December 31, 2023 | Face Value | Carrying Value (1) | Wtd. Avg. Rate (2) | UPB | Carrying Value | Restricted Cash (4) | ||||||||||||||||||||||||||||||||
CLO 19 | $ | 872,812 | $ | 868,359 | 7.84 | % | $ | 1,031,772 | $ | 1,028,669 | $ | 4,527 | ||||||||||||||||||||||||||
CLO 18 | 1,652,812 | 1,647,885 | 7.29 | % | 1,784,921 | 1,780,930 | 244,629 | |||||||||||||||||||||||||||||||
CLO 17 | 1,714,125 | 1,709,800 | 7.14 | % | 1,870,388 | 1,865,878 | 203,938 | |||||||||||||||||||||||||||||||
CLO 16 | 1,237,500 | 1,233,769 | 6.76 | % | 1,456,872 | 1,453,297 | 847 | |||||||||||||||||||||||||||||||
CLO 15 (5) | 674,412 | 673,367 | 6.82 | % | 734,120 | 732,498 | 42,600 | |||||||||||||||||||||||||||||||
CLO 14 (5) | 589,345 | 588,176 | 6.82 | % | 680,814 | 679,469 | 33,271 | |||||||||||||||||||||||||||||||
Total CLOs | 6,741,006 | 6,721,356 | 7.14 | % | 7,558,887 | 7,540,741 | 529,812 | |||||||||||||||||||||||||||||||
Q Series securitization | 215,278 | 213,654 | 7.38 | % | 287,038 | 286,053 | — | |||||||||||||||||||||||||||||||
Total securitized debt | $ | 6,956,284 | $ | 6,935,010 | 7.15 | % | $ | 7,845,925 | $ | 7,826,794 | $ | 529,812 | ||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||
CLO 19 | $ | 872,812 | $ | 866,605 | 6.75 | % | $ | 952,268 | $ | 947,336 | $ | 64,300 | ||||||||||||||||||||||||||
CLO 18 | 1,652,812 | 1,645,711 | 6.19 | % | 1,899,174 | 1,891,215 | 85,970 | |||||||||||||||||||||||||||||||
CLO 17 | 1,714,125 | 1,707,676 | 6.16 | % | 1,911,866 | 1,904,732 | 145,726 | |||||||||||||||||||||||||||||||
CLO 16 | 1,237,500 | 1,231,887 | 5.79 | % | 1,307,244 | 1,301,794 | 106,495 | |||||||||||||||||||||||||||||||
CLO 15 | 674,412 | 671,532 | 5.84 | % | 797,755 | 795,078 | 2,861 | |||||||||||||||||||||||||||||||
CLO 14 | 655,475 | 652,617 | 5.80 | % | 732,247 | 730,057 | 37,090 | |||||||||||||||||||||||||||||||
CLO 13 | 462,769 | 461,005 | 6.03 | % | 552,182 | 550,924 | 37,875 | |||||||||||||||||||||||||||||||
CLO 12 | 379,283 | 378,331 | 6.09 | % | 466,474 | 465,003 | 500 | |||||||||||||||||||||||||||||||
Total CLOs | 7,649,188 | 7,615,364 | 6.10 | % | 8,619,210 | 8,586,139 | 480,817 | |||||||||||||||||||||||||||||||
Q Series securitization | 236,878 | 233,906 | 6.30 | % | 315,837 | 313,965 | — | |||||||||||||||||||||||||||||||
Total securitized debt | $ | 7,886,066 | $ | 7,849,270 | 6.11 | % | $ | 8,935,047 | $ | 8,900,104 | $ | 480,817 |
85
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
CLO XII.18. In November 2019,2022, we completed CLO XII,18, issuing 8eight tranches of CLO notes through 2 newly-formedtwo wholly-owned subsidiaries totaling $585.8 million.$1.86 billion. Of the total CLO notes issued, $534.2 million$1.65 billion were investment grade notes issued to third party investors and $51.6$210.1 million were below investment grade notes retained by us. As of the CLO closing date, the notes were secured by a portfolio of loan obligations with a face value of $510.9 million,$1.70 billion, consisting primarily of bridge loans that were contributed from our existing loan portfolio.portfolio, and cash. The financing has a three-yearan approximate two-and-a-half-year replacement period that allows the principal proceeds and sale proceeds (if any) of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture. Thereafter, the outstanding debt balance will be reduced as loans are repaid. Initially, the proceeds of the issuance of the securities also included $124.1$347.3 million for the purpose of acquiring additional loan obligations for a period of up to 180 days from the CLO closing date, which we subsequently utilized, resulting in the issuer owning loan obligations with a face value of $635.0 million,$2.05 billion, representing leverage of 84%81%. We retained a residual interest in the portfolio with a notional amount of $100.8$397.2 million, including the $51.6$210.1 million below investment grade notes. The notes sold to third parties had an initial weighted average interest rate of 1.50%1.81% plus one-month LIBORcompounded SOFR and interest payments on the notes are payable monthly.
86CLO 14.
December 31, 2020
million were below investment grade notes retained by us. As of the CLO closing date, the notes were secured by a portfolio of loan obligations with a face value of $635.2 million, consisting primarily of bridge loans that were contributed from our existing loan portfolio, and cash. The financing had a two-and-a-half-year replacement period that allowed the principal proceeds and sale proceeds (if any) of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture. Thereafter, the outstanding debt balance is being reduced as loans are repaid. Initially, the proceeds of the issuance of the securities also included $149.8 million for the purpose of acquiring additional loan obligations for a period of up to 180 days from the CLO closing date, which we subsequently utilized, resulting in the issuer owning loan obligations with a face value of $785.0 million, representing leverage of 84%. We retained a residual interest in the portfolio with a notional amount of $129.5 million, including the $68.7 million below investment grade notes. The notes sold to third parties had an initial weighted average interest rate of 1.33% plus one-month LIBOR and interest payments on the notes are payable monthly.
CLO VII. In November 2019, we unwound CLO VII redeeming $279.0 million of outstanding notes, which were repaid primarily from the refinancing of the remaining assets within our existing financing facilities (includingother CLO XII), as well as with cash held by CLO VII,vehicles and credit and repurchase facilities. We expensed $1.4$1.5 million of deferred financing fees in 2023 related to the unwind of these CLOs, into interest expenseloss on extinguishment of debt on the consolidated statements of income.
CLO V.transaction costs, and are payable monthly. In June 2018, we unwound CLO V, redeeming $267.8 million of outstanding notes which were repaid primarily from the refinancing
Luxembourg Debt Fund
In April 2020, we completed the unwind of the Debt Fund and redeemed all the outstanding notes withrespect to a portion of the proceeds from our senior unsecured notes issued in March 2020 described below and recorded a loss on extinguishment of debt of $1.6 million, which was primarily comprised of deferred financing fees. The Debt Fund was a VIE for which we were the primary beneficiary and was consolidated in our financial statements.
specially serviced mortgage loan.
| | | | | | | | | | | | | | | | | | | | | | | |
Senior | | | | | | December 31, 2020 | | December 31, 2019 | | ||||||||||||||
Unsecured | | Issuance | | | | | | Carrying | | Wtd. Avg. | | | | Carrying | | Wtd. Avg. | | ||||||
Notes |
| Date |
| Maturity |
| UPB |
| Value (1) |
| Rate (2) |
| UPB |
| Value (1) |
| Rate (2) | | ||||||
8.00% Notes (3) | | Apr. 2020 | | Apr. 2023 | | $ | 70,750 | | $ | 69,793 | | | 8.00 | % | $ | — | | $ | — | | | — | |
4.50% Notes (3) | | Mar. 2020 | | Mar. 2027 | | | 275,000 | | | 271,994 | | | 4.50 | % | | — | | | — | | | — | |
4.75% Notes (4) | | Oct. 2019 | | Oct. 2024 | | | 110,000 | | | 108,668 | | | 4.75 | % | | 110,000 | | | 108,370 | | | 4.75 | % |
5.75% Notes (4) | | Mar. 2019 | | Apr. 2024 | | | 90,000 | | | 88,751 | | | 5.75 | % | | 90,000 | | | 88,369 | | | 5.75 | % |
5.625% Notes (4) | | Mar. 2018 | | May 2023 | | | 125,000 | | | 123,637 | | | 5.63 | % | | 125,000 | | | 123,060 | | | 5.63 | % |
| | | | | | $ | 670,750 | | $ | 662,843 | | | 5.29 | % | $ | 325,000 | | $ | 319,799 | | | 5.44 | % |
December 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||
Senior Unsecured Notes | Issuance Date | Maturity | UPB | Carrying Value (1) | Wtd. Avg. Rate (2) | UPB | Carrying Value (1) | Wtd. Avg. Rate (2) | ||||||||||||||||||||||||||||||||||||||||||
7.75% Notes (3) | Mar. 2023 | Mar. 2026 | $ | 95,000 | $ | 93,697 | 7.75 | % | $ | — | $ | — | — | |||||||||||||||||||||||||||||||||||||
8.50% Notes (3) | Oct. 2022 | Oct. 2027 | 150,000 | 148,023 | 8.50 | % | 150,000 | 147,519 | 8.50 | % | ||||||||||||||||||||||||||||||||||||||||
5.00% Notes (3) | Dec. 2021 | Dec. 2028 | 180,000 | 177,875 | 5.00 | % | 180,000 | 177,450 | 5.00 | % | ||||||||||||||||||||||||||||||||||||||||
4.50% Notes (3) | Aug. 2021 | Sept. 2026 | 270,000 | 267,763 | 4.50 | % | 270,000 | 266,926 | 4.50 | % | ||||||||||||||||||||||||||||||||||||||||
5.00% Notes (3) | Apr. 2021 | Apr. 2026 | 175,000 | 173,542 | 5.00 | % | 175,000 | 172,917 | 5.00 | % | ||||||||||||||||||||||||||||||||||||||||
4.50% Notes (3) | Mar. 2020 | Mar. 2027 | 275,000 | 273,444 | 4.50 | % | 275,000 | 272,960 | 4.50 | % | ||||||||||||||||||||||||||||||||||||||||
4.75% Notes (4) | Oct. 2019 | Oct. 2024 | 110,000 | 109,721 | 4.75 | % | 110,000 | 109,369 | 4.75 | % | ||||||||||||||||||||||||||||||||||||||||
5.75% Notes (4) | Mar. 2019 | Apr. 2024 | 90,000 | 89,903 | 5.75 | % | 90,000 | 89,514 | 5.75 | % | ||||||||||||||||||||||||||||||||||||||||
8.00% Notes | Apr. 2020 | Apr. 2023 | — | — | — | 70,750 | 70,613 | 8.00 | % | |||||||||||||||||||||||||||||||||||||||||
5.625% Notes | Mar. 2018 | May 2023 | — | — | — | 78,850 | 78,726 | 5.63 | % | |||||||||||||||||||||||||||||||||||||||||
$ | 1,345,000 | $ | 1,333,968 | 5.41 | % | $ | 1,399,600 | $ | 1,385,994 | 5.40 | % |
December 31, 2020
indebtedness.
were redeemed with cash.
In 2018, we completed a similar exchange where we used the net proceeds from 2 separate private placements of our 5.25% convertible notes to initially exchange $127.6 million of our 5.375% convertible notes and $99.8 million of our 6.50% convertible notes for a combination of $219.8 million in cash (which included accrued interest) and 6,820,196 shares of our common stock.
88
During 2018, we recorded2023, the 7.50% Convertible Notes had a loss on extinguishmentconversion rate of debt of $5.0 million in connection with these exchanges, which included an inducement charge of $1.1 million.
At December 31, 2020, there were $0.5 million and $13.8 million aggregate principal amount remaining of our 5.25% convertible notes issued on July 3, 2018 and 5.25% convertible notes issued on July 20, 2018, respectively. The initial conversion rates of the 5.25% convertible notes issued on July 3, 2018 and 5.25% convertible notes issued on July 20, 2018 were 86.994360.3915 shares and 77.8331 shares, respectively, of common stock per $1,000 of principal, which represented a conversion price of $11.50 per share and $12.85$16.56 per share of common stock, respectively. At December 31, 2020,stock.
were fully settled with cash.
Accounting guidance requires that convertible debt instruments with cash settlement features, including partial cash settlement, account for the liability component and equity component (conversion feature) of the instrument separately. The initial value of the liability component reflects the present value of the discounted cash flows using the nonconvertible debt borrowing rate at the time of the issuance. The debt discount represents the difference between the proceeds received from the issuance and the initial carrying value of the liability component, which is accreted back to the notes principal amount through interest expense over the term of the notes, which was 1.77 years and 2.67 years at December 31, 2020 and 2019, respectively, on a weighted average basis.
| | | | | | | | | | | | | | | |
| | Liability | | Equity | |||||||||||
| | Component | | Component | |||||||||||
| | | | Unamortized Debt | | Unamortized Deferred | | Net Carrying | | Net Carrying | |||||
Period |
| UPB |
| Discount |
| Financing Fees |
| Value |
| Value | |||||
December 31, 2020 | | $ | 278,300 | | $ | 5,636 | | $ | 4,691 | | $ | 267,973 | | $ | 9,962 |
| | | | | | | | | | | | | | | |
December 31, 2019 | | $ | 300,914 | | $ | 9,235 | | $ | 7,527 | | $ | 284,152 | | $ | 9,962 |
Period | UPB | Unamortized Deferred Financing Fees | Net Carrying Value | |||||||||||||||||||||||||||||
December 31, 2023 | $ | 287,500 | $ | 4,382 | $ | 283,118 | ||||||||||||||||||||||||||
December 31, 2022 | $ | 287,500 | $ | 7,144 | $ | 280,356 |
2022.
89
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
weighted average note rate was 3.06%8.48% and 4.75%7.65% at December 31, 20202023 and 2019,2022, respectively. Including certain fees and costs, the weighted average note rate was 3.15%8.56% and 4.83%7.74% at December 31, 20202023 and 2019,2022, respectively.
2023.
| | | | | | | | | | | |
Cash Flow Triggers |
| CLO IX |
| CLO X |
| CLO XI | | CLO XII | | CLO XIII | |
Overcollateralization (1) | | | | | | | | | | | |
Current |
| 134.70 | % | 126.98 | % | 121.95 | % | 118.87 | % | 119.76 | % |
Limit |
| 133.68 | % | 125.98 | % | 120.95 | % | 117.87 | % | 118.76 | % |
Pass / Fail |
| Pass | | Pass | | Pass | | Pass | | Pass | |
| | | | | | | | | | | |
Interest Coverage (2) | | | | | | | | | | | |
Current |
| 556.75 | % | 429.45 | % | 451.98 | % | 371.18 | % | 365.83 | % |
Limit |
| 120.00 | % | 120.00 | % | 120.00 | % | 120.00 | % | 120.00 | % |
Pass / Fail |
| Pass | | Pass | | Pass | | Pass | | Pass | |
Cash Flow Triggers | CLO 14 | CLO 15 | CLO 16 | CLO 17 | CLO 18 | CLO 19 | ||||||||||||||||||||||||||||||||||||||||||||
Overcollateralization (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Current | 120.00 | % | 120.85 | % | 120.81 | % | 121.71 | % | 123.87 | % | 120.30 | % | ||||||||||||||||||||||||||||||||||||||
Limit | 118.76 | % | 119.85 | % | 120.21 | % | 121.51 | % | 123.03 | % | 119.30 | % | ||||||||||||||||||||||||||||||||||||||
Pass / Fail | Pass | Pass | Pass | Pass | Pass | Pass | ||||||||||||||||||||||||||||||||||||||||||||
Interest Coverage (2) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Current | 151.42 | % | 157.34 | % | 150.93 | % | 136.66 | % | 137.10 | % | 134.89 | % | ||||||||||||||||||||||||||||||||||||||
Limit | 120.00 | % | 120.00 | % | 120.00 | % | 120.00 | % | 120.00 | % | 120.00 | % | ||||||||||||||||||||||||||||||||||||||
Pass / Fail | Pass | Pass | Pass | Pass | Pass | Pass |
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
Our CLO overcollateralization ratios as of the determination dates subsequent to each quarter are as follows:
Determination (1) | CLO 14 | CLO 15 | CLO 16 | CLO 17 | CLO 18 | CLO 19 | ||||||||||||||||||||||||||||||||||||||||||||
January 2024 | 120.00 | % | 120.85 | % | 120.81 | % | 121.71 | % | 123.87 | % | 120.30 | % | ||||||||||||||||||||||||||||||||||||||
October 2023 | 119.76 | % | 120.85 | % | 121.21 | % | 122.51 | % | 124.03 | % | 120.30 | % | ||||||||||||||||||||||||||||||||||||||
July 2023 | 119.76 | % | 120.85 | % | 121.21 | % | 122.51 | % | 124.03 | % | 120.30 | % | ||||||||||||||||||||||||||||||||||||||
April 2023 | 119.76 | % | 120.85 | % | 121.21 | % | 122.51 | % | 124.03 | % | 120.30 | % | ||||||||||||||||||||||||||||||||||||||
January 2023 | 119.76 | % | 120.85 | % | 121.21 | % | 122.51 | % | 124.03 | % | 120.30 | % |
| | | | | | | | | | | |
Determination (1) |
| CLO IX |
| CLO X |
| CLO XI | | CLO XII | | CLO XIII | |
January 2021 | | 134.70 | % | 126.98 | % | 121.95 | % | 118.87 | % | 119.76 | % |
October 2020 | | 134.68 | % | 126.98 | % | 121.95 | % | 118.87 | % | 119.76 | % |
July 2020 | | 134.68 | % | 126.98 | % | 121.95 | % | 118.87 | % | 119.76 | % |
April 2020 | | 134.68 | % | 126.98 | % | 121.95 | % | 118.87 | % | 119.76 | % |
January 2020 | | 134.68 | % | 126.98 | % | 121.95 | % | 118.87 | % | — | |
The ratio will fluctuate based on the performance of the underlying assets, transfers of assets into the CLOs prior to the expiration of their respective replenishment dates, purchase or disposal of other investments, and loan payoffs. NaNNo payment due under the junior subordinated indentures may be paid if there is a default under any senior debt and the senior lender has sent notice to the trustee. The junior subordinated indentures are also cross-defaulted with each other.
Year Ended December 31, | |||||||||||
2023 | 2022 | ||||||||||
Beginning balance | $ | 57,168 | $ | 56,064 | |||||||
Provisions for loss sharing | 17,864 | 3,592 | |||||||||
Provisions reversal for loan repayments | (2,169) | (1,730) | |||||||||
Recoveries (charge-offs), net | (1,229) | (758) | |||||||||
Ending balance | $ | 71,634 | $ | 57,168 |
| | | | | | | |
| | Year Ended December 31, | | ||||
|
| 2020 |
| 2019 | | ||
Beginning balance | | $ | 34,648 | | $ | 34,298 | |
Impact of adopting CECL - January 1, 2020 | | | 14,406 | | | — | |
Provisions for loss sharing | | | 16,379 | | | 4,879 | |
Provisions reversal for loan repayments | | | (1,557) | | | (3,732) | |
Recoveries (charge-offs), net | |
| 427 | | | (797) | |
Ending balance | | $ | 64,303 | | $ | 34,648 | |
91
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
At December 31, 20202023 and 2019,2022, the maximum quantifiable liability associated with our guarantees under the Fannie Mae DUS agreement was $3.41$3.95 billion and $2.73$3.49 billion, respectively. The maximum quantifiable liability is not representative of the actual loss we would incur. We would be liable for this amount only if all of the loans we service for Fannie Mae, for which we retain some risk of loss, were to default and all of the collateral underlying these loans was determined to be without value at the time of settlement.
and credit risk exposure.
These commitments meet the definition of a derivative and are recorded at fair value, including the effects of interest rate movements which are reflected as a component of gain (loss) gain on derivative instruments, net in the consolidated statements of operations.income. The estimated fair value of rate lock commitments also includes the fair value of the expected net cash flows associated with the servicing of the loan which is recorded as income from MSRs in the consolidated statements of operations.income. During 2020, 20192023, 2022 and 2018,2021, we recorded net gains of $3.4$8.8 million, net losses of $7.8$3.6 million and net gainslosses of $6.0$0.8 million, respectively, from changes in the fair value of these derivatives in (loss) gain on derivative instruments, netand$69.9 million, $69.3 million and $165.5 million, $90.8 and $98.8$130.2 million, respectively, of income from MSRs. See Note 1413 for details.
details
Interest Rate Swap Futures.Treasury Futures and Credit Default Swaps. We enter into Swap Futuresover-the-counter treasury futures and credit default swaps to hedge our exposure to changes in interest ratesrate and credit risk exposure inherent in (1) our Structuredheld-for-sale Agency Business Private Label loans from the time the loans are rate locked until sale or securitization, and (2) our Agency Business SFR – fixed rate loans from the time the loans are originated until the time they can be financed with match term fixed rate securitized debt, and (2) our held-for-sale Agency Business Private Label loans from the time the loans are rate locked until sale and securitization. The Swap Futures do not meet the criteria for hedge accounting,debt. Our treasury futures typically have a three-monththree-month maturity and are tied to the five-year and ten-year swaptreasury rates. Our Swap Futurescredit default swaps typically have a five-year maturity, are tied to the credit spreads of the underlying bond issuers and we typically hold our position until we price our Private Label loan securitizations. These instruments do not meet the criteria for hedge accounting, are cleared by a central clearing house and variation margin payments, made in cash, and are treated as a legal settlement of the derivative itself as opposeditself. Our agreements with the counterparties provide for bilateral collateral pledging based on the counterparties' market value. The counterparties have the right to a pledge of collateral.
During 2020, we recorded realized losses of $3.0 million and unrealized gains of $0.2 millionre-pledge the collateral posted, but have the obligation to our Structured Business and realized losses of $57.1 million and unrealized losses of $1.7 million to our Agency Business related to our Swap Futures. During 2019, we recorded realized losses of $0.4 million and unrealized gains of $0.2 million to our Structured Business and realized gains of $4.6 million and unrealized gains of $1.5 million to our Agency Business related to our Swap Futures. The realized and unrealized gains and losses are recorded in loss on derivative instruments, net on our consolidated statements of income.
return
92
During 2023, 2022 and 2021 we recorded realized gains and unrealized losses of $1.6 million and $3.7 million, realized and unrealized gains of $26.9 million and $3.5 million and realized and unrealized losses of less than $0.1 million and $1.5 million, respectively, to our Agency Business.
| | | | | | | | | | | | | |
| | December 31, 2020 | |||||||||||
| | | | | | | | | Fair Value | ||||
| | | | Notional | | Balance Sheet | | Derivative | | Derivative | |||
Derivative |
| Count |
| Value |
| Location |
| Assets |
| Liabilities | |||
Agency Business | | | | | | | | | | | | | |
Rate Lock Commitments | | 7 | | $ | 136,354 | | Other Assets/Other Liabilities | | $ | 1,967 | | $ | (231) |
Forward Sale Commitments | | 114 | | | 1,048,763 | | Other Assets/Other Liabilities | | | 1,925 | | | (990) |
Swap Futures | | 453 | | | 45,300 | | | | | — | | | — |
| | | | $ | 1,230,417 | | | | $ | 3,892 | | $ | (1,221) |
| | | | | | | | | | | | | |
| | December 31, 2019 | |||||||||||
Agency Business |
| |
| | |
| |
| | |
| | |
Rate Lock Commitments | | 5 | | $ | 37,657 | | Other Assets/Other Liabilities | | $ | 1,066 | | $ | (202) |
Forward Sale Commitments | | 79 | | | 483,576 | | Other Assets/Other Liabilities | | | 369 | | | (2,895) |
Swap Futures | | 3,274 | | | 327,400 | | | | | — | | | — |
| | | | $ | 848,633 | | | | $ | 1,435 | | $ | (3,097) |
| | | | | | | | | | | | | |
Structured Business | | | | | | | | | | | | | |
Swap Futures | | 271 | | $ | 27,100 | | | | | — | | | — |
93
December 31, 2023 | ||||||||||||||||||||||||||||||||
Fair Value | ||||||||||||||||||||||||||||||||
Derivative | Count | Notional Value | Balance Sheet Location | Derivative Assets | Derivative Liabilities | |||||||||||||||||||||||||||
Rate lock commitments | 3 | $ | 26,800 | Other assets/other liabilities | $ | 428 | $ | (759) | ||||||||||||||||||||||||
Forward sale commitments | 33 | 559,079 | Other assets/other liabilities | 6,119 | (262) | |||||||||||||||||||||||||||
Treasury futures | 82 | 8,200 | — | — | ||||||||||||||||||||||||||||
$ | 594,079 | $ | 6,547 | $ | (1,021) | |||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||
Rate lock commitments | 6 | $ | 91,472 | Other assets/other liabilities | $ | 354 | $ | (1,070) | ||||||||||||||||||||||||
Forward sale commitments | 27 | 294,451 | Other assets/other liabilities | 1,151 | (3,827) | |||||||||||||||||||||||||||
Treasury futures | 1,298 | 129,800 | — | — | ||||||||||||||||||||||||||||
$ | 515,723 | $ | 1,505 | $ | (4,897) |
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
December 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||
Principal / Notional Amount | Carrying Value | Estimated Fair Value | Principal / Notional Amount | Carrying Value | Estimated Fair Value | ||||||||||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||||||||||||
Loans and investments, net | $ | 12,615,006 | $ | 12,377,806 | $ | 12,452,563 | $ | 14,456,123 | $ | 14,254,674 | $ | 14,468,418 | |||||||||||||||||||||||
Loans held-for-sale, net | 552,325 | 551,707 | 566,451 | 368,066 | 354,070 | 362,054 | |||||||||||||||||||||||||||||
Capitalized mortgage servicing rights, net | n/a | 391,254 | 510,472 | n/a | 401,471 | 530,913 | |||||||||||||||||||||||||||||
Securities held-to-maturity, net | 230,495 | 155,279 | 129,390 | 234,255 | 156,547 | 144,571 | |||||||||||||||||||||||||||||
Derivative financial instruments | 447,609 | 6,547 | 6,547 | 111,950 | 1,505 | 1,505 | |||||||||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||||||||||||||
Credit and repurchase facilities | $ | 3,242,939 | $ | 3,237,827 | $ | 3,228,324 | $ | 3,856,009 | $ | 3,841,814 | $ | 3,828,192 | |||||||||||||||||||||||
Securitized debt | 6,956,284 | 6,935,010 | 6,864,557 | 7,886,066 | 7,849,270 | 7,560,541 | |||||||||||||||||||||||||||||
Senior unsecured notes | 1,345,000 | 1,333,968 | 1,214,331 | 1,399,600 | 1,385,994 | 1,262,560 | |||||||||||||||||||||||||||||
Convertible senior unsecured notes, net | 287,500 | 283,118 | 301,156 | 287,500 | 280,356 | 287,834 | |||||||||||||||||||||||||||||
Junior subordinated notes | 154,336 | 143,896 | 106,444 | 154,336 | 143,128 | 103,977 | |||||||||||||||||||||||||||||
Derivative financial instruments | 138,270 | 1,021 | 1,021 | 273,973 | 4,897 | 4,897 |
| | | | | | | | | | | | | | | | | | |
| | December 31, 2020 | | December 31, 2019 | ||||||||||||||
| | Principal / | | Carrying | | Estimated | | Principal / | | Carrying | | Estimated | ||||||
|
| Notional Amount |
| Value |
| Fair Value |
| Notional Amount |
| Value |
| Fair Value | ||||||
Financial assets: | | | | | | | | | | | | | | | | | | |
Loans and investments, net | | $ | 5,475,082 | | $ | 5,285,868 | | $ | 5,428,141 | | $ | 4,279,611 | | $ | 4,189,960 | | $ | 4,228,071 |
Loans held-for-sale, net | | | 968,595 | | | 986,919 | | | 1,007,294 | | | 847,126 | | | 861,360 | | | 876,975 |
Capitalized mortgage servicing rights, net | | | n/a | | | 379,974 | | | 415,495 | | | n/a | | | 286,420 | | | 328,995 |
Securities held-to-maturity, net | | | 140,124 | | | 95,524 | | | 94,128 | | | 111,028 | | | 88,699 | | | 91,738 |
Derivative financial instruments | | | 865,975 | |
| 3,892 | |
| 3,892 | | | 173,532 | |
| 1,435 | |
| 1,435 |
| | | | | | | | | | | | | | | | | | |
Financial liabilities: | | | | | | | | | | | | | | | | | | |
Credit and repurchase facilities | | $ | 2,238,722 | | $ | 2,234,883 | | $ | 2,235,668 | | $ | 1,681,146 | | $ | 1,678,288 | | $ | 1,677,658 |
Collateralized loan obligations | | | 2,532,343 | |
| 2,517,309 | |
| 2,495,195 | | | 2,147,467 | |
| 2,130,121 | |
| 2,147,944 |
Senior unsecured notes | | | 670,750 | |
| 662,843 | |
| 670,117 | | | 325,000 | |
| 319,799 | |
| 331,225 |
Convertible senior unsecured notes, net | | | 278,300 | | | 267,973 | | | 280,636 | | | 300,914 | | | 284,152 | | | 310,778 |
Junior subordinated notes | | | 154,336 | |
| 141,656 | |
| 99,594 | | | 154,336 | |
| 140,949 | |
| 97,668 |
Derivative financial instruments | | | 319,142 | |
| 1,221 | |
| 1,221 | | | 347,701 | |
| 3,097 | |
| 3,097 |
Debt fund | | | — | |
| — | |
| — | | | 70,000 | | | 68,629 | | | 70,138 |
94
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
Loans held-for-sale, net. Consists of originated loans that are generally expected to be transferred or sold within 60 days to 180 days of loan funding, and are valued using pricing models that incorporate observable inputs from current market assumptions or a hypothetical securitization model utilizing observable market data from recent securitization spreads and observable pricing of loans with similar characteristics (Level 2). Fair value includes the fair value allocated to the associated future MSRs and is calculated pursuant to the valuation techniques described below for capitalized mortgage servicing rights, net (Level 3).
| | | | | | | | | | | | | | | |
| | | | | | | | Fair Value Measurements Using Fair | |||||||
| | Carrying | | | | | Value Hierarchy | ||||||||
|
| Value |
| Fair Value |
| Level 1 |
| Level 2 |
| Level 3 | |||||
Financial assets: | | | | | | | | | | | | | | | |
Derivative financial instruments | | $ | 3,892 | | $ | 3,892 | | $ | — | | $ | 1,925 | | $ | 1,967 |
| | | | | | | | | | | | | | | |
Financial liabilities: | | | | | | | | | | | | | | | |
Derivative financial instruments | | $ | 1,221 | | $ | 1,221 | | $ | — | | $ | 1,221 | | $ | — |
95
Carrying Value | Fair Value | Fair Value Measurements Using Fair Value Hierarchy | |||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||||||
Derivative financial instruments | $ | 6,547 | $ | 6,547 | $ | — | $ | 6,119 | $ | 428 | |||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||||||||
Derivative financial instruments | $ | 1,021 | $ | 1,021 | $ | — | $ | 1,021 | $ | — |
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
We measure certain financial and non-financial assets at fair value on a nonrecurring basis. The fair values of these financial and non-financial assets, if applicable, were determined using the following input levels as ofat December 31, 20202023 (in thousands):
| | | | | | | | | | | | | | | |
| | | | | | | Fair Value Measurements Using Fair | ||||||||
| | Net Carrying | | | | Value Hierarchy | |||||||||
|
| Value |
| Fair Value |
| Level 1 |
| Level 2 |
| Level 3 | |||||
Financial assets: | | | | | | | | | | | | | | | |
Impaired loans, net (1) | | $ | 148,673 | | $ | 148,673 | | $ | — | | $ | — | | $ | 148,673 |
Fair Value Measurements Using Fair Value Hierarchy | |||||||||||||||||||||||||||||
Net Carrying Value | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||||||
Impaired loans, net | |||||||||||||||||||||||||||||
Loans held-for-investment (1) | $ | 284,285 | $ | 284,285 | $ | — | $ | — | $ | 284,285 | |||||||||||||||||||
Loans held-for-sale (2) | 18,057 | 18,057 | — | 18,057 | — | ||||||||||||||||||||||||
$ | 302,342 | $ | 302,342 | $ | — | $ | 18,057 | $ | 284,285 |
| | | | | | | | | | |
| | | | | Valuation | | |
| | |
|
| Fair Value |
| Techniques |
| Significant Unobservable Inputs |
| |||
Financial assets: | | | | | | | | | | |
Impaired loans: | | | | | | | | | | |
Hotel | | $ | 82,113 | | Discounted cash flows / |
| Discount rate | | 7.50 | % |
| | | | | direct capitalization | | Capitalization rate | | 5.00 | % |
| | | | | |
| Revenue growth rate | | 25.00 | % |
| | | | | | | | | | |
Land | | | 49,960 |
| Discounted cash flows |
| Discount rate | | 21.50 | % |
| | | | | |
| Revenue growth rate | | 3.00 | % |
| | | | | | | | | | |
Retail | | | 15,105 | | Discounted cash flows | | Discount rate | | 10.15 | % |
| | | | | | | Capitalization rate | | 9.25 | % |
| | | | | | | Revenue growth rate | | 1.68 | % |
| | | | | | | | | | |
Healthcare | | | 828 | | Discounted cash flows | | Capitalization rate | | 14.30 | % |
| | | | | | | | | | |
Office | | | 666 | | Discounted cash flows |
| Discount rate | | 11.00 | % |
| | | | | |
| Capitalization rate | | 9.00 | % |
| | | | | |
| Revenue growth rate | | 2.50 | % |
Derivative financial instruments: | | | | | | | | | | |
Rate lock commitments | | | 1,967 | | Discounted cash flows | | W/A discount rate | | 13.30 | % |
96
Fair Value | Valuation Techniques | Significant Unobservable Inputs | |||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||
Impaired loans: | |||||||||||||||||||||||
Multifamily | $ | 222,540 | Discounted cash flows | Capitalization rate | 6.35 | % | |||||||||||||||||
Land | 50,000 | Discounted cash flows | Discount rate | 21.50 | % | ||||||||||||||||||
Revenue growth rate | 3.00 | % | |||||||||||||||||||||
Discount rate | 11.25 | % | |||||||||||||||||||||
Retail | 11,745 | Discounted cash flows | Capitalization rate | 9.25 | % | ||||||||||||||||||
Revenue growth rate | 3.00 | % | |||||||||||||||||||||
Derivative financial instruments: | |||||||||||||||||||||||
Rate lock commitments | 428 | Discounted cash flows | W/A discount rate | 13.38 | % |
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
The derivative financial instruments using Level 3 inputs are outstanding for short periods of time (generally less than 60 days). A roll-forward of Level 3 derivative instruments is as follows (in thousands):
| | | | | | | | | |
| | Fair Value Measurements Using | |||||||
| | Significant Unobservable Inputs | |||||||
| | for the Year Ended December 31, | |||||||
| | 2020 |
| 2019 |
| 2018 | |||
Derivative assets and liabilities, net | | |
|
| |
|
| |
|
Beginning balance | | $ | 1,066 | | $ | 324 | | $ | 276 |
Settlements | |
| (164,654) | |
| (83,992) | |
| (98,791) |
Realized gains recorded in earnings | |
| 163,588 | |
| 83,668 | |
| 98,515 |
Unrealized gains recorded in earnings | |
| 1,967 | |
| 1,066 | |
| 324 |
Ending balance | | $ | 1,967 | | $ | 1,066 | | $ | 324 |
Fair Value Measurements Using Significant Unobservable Inputs for the Year Ended December 31, | |||||||||||||||||
2023 | 2022 | 2021 | |||||||||||||||
Derivative assets and liabilities, net | |||||||||||||||||
Beginning balance | $ | 354 | $ | 295 | $ | 1,967 | |||||||||||
Settlements | (66,407) | (64,896) | (112,836) | ||||||||||||||
Realized gains recorded in earnings | 66,053 | 64,601 | 110,869 | ||||||||||||||
Unrealized gains recorded in earnings | 428 | 354 | 295 | ||||||||||||||
Ending balance | $ | 428 | $ | 354 | $ | 295 |
December 31, 2023 | Notional/ Principal Amount | Fair Value of Servicing Rights | Interest Rate Movement Effect | Unrealized Impairment Loss | Total Fair Value Adjustment | |||||||||||||||||||||||||||
Rate lock commitments | $ | 26,800 | $ | 428 | $ | 759 | $ | — | $ | 1,187 | ||||||||||||||||||||||
Forward sale commitments | 559,079 | — | (759) | — | (759) | |||||||||||||||||||||||||||
Loans held-for-sale, net (1) | 552,325 | 7,784 | — | (1,989) | 5,795 | |||||||||||||||||||||||||||
Total | $ | 8,212 | $ | — | $ | (1,989) | $ | 6,223 |
| | | | | | | | | | | | |
| | Notional/ | | Fair Value of | | Interest Rate | | Total Fair Value | ||||
December 31, 2020 |
| Principal Amount |
| Servicing Rights |
| Movement Effect |
| Adjustment | ||||
Rate lock commitments | | $ | 136,354 | | $ | 1,967 | | $ | (231) | | $ | 1,736 |
Forward sale commitments | | | 1,048,763 | | | — | | | 231 | | | 231 |
Loans held-for-sale, net (1) | | | 968,595 | | | 21,601 | | | — | | | 21,601 |
Total | | | | | $ | 23,568 | | $ | — | | $ | 23,568 |
| | | | | | | | | | | | | | | |
| | | | | | Fair Value Measurements Using Fair Value Hierarchy | |||||||||
|
| Carrying Value |
| Fair Value |
| Level 1 |
| Level 2 |
| Level 3 | |||||
Financial assets: | | | | | | | | | | | | | | | |
Loans and investments, net | | $ | 5,285,868 | | $ | 5,428,141 | | $ | — | | $ | — | | $ | 5,428,141 |
Loans held-for-sale, net | | | 986,919 | | | 1,007,294 | | | — | | | 985,693 | | | 21,601 |
Capitalized mortgage servicing rights, net | | | 379,974 | | | 415,495 | | | — | | | — | | | 415,495 |
Securities held-to-maturity, net | | | 95,524 | | | 94,128 | | | — | | | — | | | 94,128 |
| | | | | | | | | | | | | | | |
Financial liabilities: | | | | | | | | | | | | | | | |
Credit and repurchase facilities | | $ | 2,234,883 | | $ | 2,235,668 | | $ | — | | $ | 952,038 | | $ | 1,283,630 |
Collateralized loan obligations | |
| 2,517,309 | |
| 2,495,195 | |
| — | |
| — | |
| 2,495,195 |
Senior unsecured notes | |
| 662,843 | |
| 670,117 | |
| 670,117 | |
| — | |
| — |
Convertible senior unsecured notes, net | | | 267,973 | | | 280,636 | | | — | | | 280,636 | | | — |
Junior subordinated notes | |
| 141,656 | |
| 99,594 | |
| — | |
| — | |
| 99,594 |
Fair Value Measurements Using Fair Value Hierarchy | |||||||||||||||||||||||||||||
Carrying Value | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||||||
Loans and investments, net | $ | 12,377,806 | $ | 12,452,563 | $ | — | $ | — | $ | 12,452,563 | |||||||||||||||||||
Loans held-for-sale, net | 551,707 | 566,451 | — | 558,667 | 7,784 | ||||||||||||||||||||||||
Capitalized mortgage servicing rights, net | 391,254 | 510,472 | — | — | 510,472 | ||||||||||||||||||||||||
Securities held-to-maturity, net | 155,279 | 129,390 | — | — | 129,390 | ||||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||||||||
Credit and repurchase facilities | $ | 3,237,827 | $ | 3,228,324 | $ | — | $ | 413,326 | $ | 2,814,998 | |||||||||||||||||||
Securitized debt | 6,935,010 | 6,864,557 | — | — | 6,864,557 | ||||||||||||||||||||||||
Senior unsecured notes | 1,333,968 | 1,214,331 | 1,214,331 | — | — | ||||||||||||||||||||||||
Convertible senior unsecured notes, net | 283,118 | 301,156 | — | 301,156 | — | ||||||||||||||||||||||||
Junior subordinated notes | 143,896 | 106,444 | — | — | 106,444 |
97
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
Agency Business Commitments. Our Agency Business is subject to supervision by certain regulatory agencies. Among other things, these agencies require us to meet certain minimum net worth, operational liquidity and restricted liquidity collateral requirements, and compliance with reporting requirements. Our adjusted net worth and liquidity required by the agencies for all periods presented exceeded these requirements.
As of
As ofissued to Fannie Mae.
2023.
13.
| | | | | | | | | |
|
| | |
| Minimum Annual |
| | | |
|
| Debt |
| Operating Lease |
| | | ||
Year |
| Obligations |
| Payments |
| Total | |||
2021 | | $ | 1,629,073 | | $ | 5,082 | | $ | 1,634,155 |
2022 | |
| 1,980,400 | |
| 8,257 | |
| 1,988,657 |
2023 | |
| 1,030,427 | |
| 8,031 | |
| 1,038,458 |
2024 | |
| 648,106 | |
| 7,926 | |
| 656,032 |
2025 | |
| 118,622 | |
| 7,978 | |
| 126,600 |
Thereafter | |
| 467,823 | |
| 34,381 | |
| 502,204 |
Total | | $ | 5,874,451 | | $ | 71,655 | | $ | 5,946,106 |
98
Year | Debt Obligations | Minimum Annual Operating Lease Payments | Total | |||||||||||||||||
2024 | $ | 1,855,247 | $ | 10,820 | $ | 1,866,067 | ||||||||||||||
2025 | 2,523,024 | 11,206 | 2,534,230 | |||||||||||||||||
2026 | 1,996,721 | 11,297 | 2,008,018 | |||||||||||||||||
2027 | 4,510,642 | 9,782 | 4,520,424 | |||||||||||||||||
2028 | 946,089 | 9,064 | 955,153 | |||||||||||||||||
Thereafter | 154,336 | 27,755 | 182,091 | |||||||||||||||||
Total | $ | 11,986,059 | $ | 79,924 | $ | 12,065,983 |
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
At December 31, 2020
As of December 31, 20202023 and 2019,2022, our leases had remaining lease terms of 0.50.8 – 10.010.1 years and 0.7 - 7.20.2 – 10.4 years, respectively, with a weighted average remaining lease term of 9.07.6 years and 5.28.2 years, respectively, and a weighted average discount rate of 4.9%5.7% and 4.7%6.8%, respectively. We recorded lease expense of $6.2$10.9 million, $6.1$9.6 million and $5.4$9.3 million during 2020, 20192023, 2022 and 2018,2021, respectively.
that was settled and discontinued in 2023.
The lawsuits all alleged, as a factual basis and background, certain facts surrounding the June 2007 leveraged buyout of ESI from affiliates of Blackstone Capital. Our subsidiary, Arbor ESH II, LLC, had a $115.0 million investment in the Series A1 Preferred Units of a holding company of Extended Stay, Inc. The New York State Court action and one of the two federal court actions named as defendants Arbor ESH II, LLC,Arbor Commercial Mortgage, LLC (“ACM”), and ABT-ESI LLC, an entity in which we have a membership interest, among the broad group of defendants. These 2 actions were commenced by substantially identical complaints. The defendants are alleged, among other things, to have breached fiduciary and contractual duties by causing or allowing the Debtors to pay illegal dividends or other improper distributions of value at a time when the Debtors were insolvent. The Trust also alleges that the defendants aided and abetted, induced, or participated in breaches of fiduciary duty, waste, and unjust enrichment ("Fiduciary Duty Claims") and name a director of ours, and a former general counsel of ACM, each of whom had served on the Board of Directors of ESI for a period of time. We are defending these 2 defendants and paying the costs of such defense. On the basis of the foregoing allegations, the Trust has asserted claims under a number of common law theories, seeking the return of assets transferred by the Debtors prior to the Debtors' bankruptcy filing.
In the third action, filed in Bankruptcy Court, the same plaintiff, the Trust, named ACM and ABT-ESI LLC, together with a number of other defendants, and asserts claims, including constructive and fraudulent conveyance claims, under state and federal statutes, as well as a claim under the Federal Debt Collection Procedure Act.
The remaining counts For more detailed information regarding the Action, please refer to Note 14 of our 2022 Annual Report.
We moved to dismiss the referenced remaining actions in December 2013.
After supplemental briefing and multiple adjourned conferences, in August 2020, the Court issued a decision granting our motion to dismiss in part, dismissing 9 of the 17 counts. The Court permitted claims against director designees to proceed on theories of
99
December 31, 2020
authorization of illegal dividends and breach of fiduciary duty. The Court permitted claims against the defendant entities, including our affiliated entities, to proceed on theories of constructive fraudulent transfer and fraudulent transfer under state and federal law. Moreover, the Court affirmatively dismissed 4 counts against the defendant entities to the extent they are based on distributions from certain so-called LIBOR Floor Certificates. According to the amended complaint, the total LIBOR Floor Certificate transfers were $74.0 million in value. As a result, with what remains of the amended complaint, total possible liability against the affiliated entities has correspondingly fallen, whereas total possible liability against the director designees remains at approximately $139.0 million.
The parties have stipulated to a schedule for discovery and we intend to vigorously defend against the remaining claims. We have not made a loss accrual for this litigation because we believe that it is not probable that a loss has been incurred and an amount cannot be reasonably estimated.
Litigation Settlement. In 2018, we received net proceeds of $10.2 million from the settlement of a litigation related to a prior investment, which was recognized as a gain.
Due to Borrowers.Due to borrowers represents borrowers’ funds held by us to fund certain expenditures or to be released at our discretion upon the occurrence of certain pre-specified events, and to serve as additional collateral for borrowers’ loans. While retained, these balances earn interest in accordance with the specific loan terms they are associated with.
100
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
The assets and liabilities related to these consolidated CLOs and Debt FundSecuritization Entities are as follows (in thousands):
| | | | | | | |
| | December 31, 2020 |
| December 31, 2019 | | ||
Assets: | | | | | | | |
Restricted cash | | $ | 188,226 | | $ | 208,467 | |
Loans and investments, net | | | 2,923,634 | | | 2,557,909 | |
Other assets | | | 22,587 | | | 18,380 | |
Total assets | | $ | 3,134,447 | | $ | 2,784,756 | |
| |
| | |
| | |
Liabilities: | | | | | | | |
Collateralized loan obligations | | $ | 2,517,309 | | $ | 2,130,121 | |
Debt fund | | | — | | | 68,629 | |
Other liabilities | |
| 2,755 | |
| 10,849 | |
Total liabilities | | $ | 2,520,064 | | $ | 2,209,599 | |
December 31, 2023 | December 31, 2022 | ||||||||||
Assets: | |||||||||||
Restricted cash | $ | 593,956 | $ | 710,775 | |||||||
Loans and investments, net | 7,826,793 | 8,900,104 | |||||||||
Other assets | 193,822 | 174,382 | |||||||||
Total assets | $ | 8,614,571 | $ | 9,785,261 | |||||||
Liabilities: | |||||||||||
Securitized debt | $ | 6,935,010 | $ | 7,849,270 | |||||||
Other liabilities | 32,867 | 26,754 | |||||||||
Total liabilities | $ | 6,967,877 | $ | 7,876,024 |
Securitization Entities.
| | | |
Type |
| Carrying Amount (1) | |
Loans | | $ | 419,558 |
B Piece bonds | | | 58,460 |
APL certificates | | | 38,708 |
Equity investments | | | 12,804 |
SFR bonds | | | 10,000 |
Agency interest only strips | | | 1,373 |
Total | | $ | 540,903 |
Type | Carrying Amount (1) | |||||||
Loans | $ | |||||||
APL certificates | 131,137 | |||||||
B Piece bonds | 30,398 | |||||||
Equity investments | 29,876 | |||||||
Agency interest only strips | 162 | |||||||
Total | $ | 716,488 |
2023.
Note 1716 -— Equity
Common Stock. In November 2020,the first quarter of 2022, we completed a public offering in which we sold 7,000,000of an additional 3,292,000 shares of our common6.25% Series F fixed-to-floating rate cumulative redeemable preferred stock, for $13.30 per share, and receivedgenerating net proceeds of $93.0$77.1 million after deducting the underwriter'sunderwriting discount and other offering expenses. The proceeds were used to make investments related to our business and for general corporate purposes. We also used a portion of the net proceeds to purchase an aggregate of 700,000additional shares of our common stock and OP Units from our chief executive officer and ACM atissued have the same priceterms as the underwriters paidoriginal issuance.
101Common
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
In August 2020, we filed a shelf registration statement as a “well-known seasoned issuer” as defined in Rule 405 under the Securities Act, which registeredStock. We have an unlimited and indeterminate amount of debt or equity securities for future issuance and sale. The shelf registration statement was declared effective upon filing.
In August 2020, we amended the equity distribution agreement with JMP. In accordance with the terms of the amendment,JMP Securities LLC ("JMP") where we may offer and sell up to 10,000,00025,000,000 shares of our common stock in "At-The-Market" equity offerings through JMP by means of ordinary brokers' transactions or otherwise at market prices prevailing at the time of sale, or at negotiated prices. During 2020,2023, we sold 7,790,12113,113,296 shares of our common stock at an average price of $14.77 per share for net proceeds of $90.5$193.7 million. We used a portion of the net proceeds to redeem 2,736,894 OP Units for cash totaling $28.4 million. As ofAt December 31, 2020,2023, we had approximately 6,400,0005,176,704 shares available under the amended agreement.
During 2020, we issued 321,412 and 47,086 shares in connection with In December 2023, the settlementsBoard of our 5.25% and 5.375% Convertible Notes, respectively.
Directors authorized an increase to the remaining availability under the share repurchase program to $150.0 million. At December 31, 2023, there was $150.0 million available for repurchase under this program.
Common Stock | Preferred Stock | |||||||||||||||||||||||||||||||
Dividend | ||||||||||||||||||||||||||||||||
Declaration Date | Dividend | Declaration Date | Series D | Series E | Series F | |||||||||||||||||||||||||||
February 15, 2023 | $ | 0.40 | January 3, 2023 | $ | 0.3984375 | $ | 0.390625 | $ | 0.390625 | |||||||||||||||||||||||
May 3, 2023 | $ | 0.42 | March 31, 2023 | $ | 0.3984375 | $ | 0.390625 | $ | 0.390625 | |||||||||||||||||||||||
July 26, 2023 | $ | 0.43 | June 30, 2023 | $ | 0.3984375 | $ | 0.390625 | $ | 0.390625 | |||||||||||||||||||||||
October 25, 2023 | $ | 0.43 | September 29, 2023 | $ | 0.3984375 | $ | 0.390625 | $ | 0.390625 | |||||||||||||||||||||||
December 29, 2023 | $ | 0.3984375 | $ | 0.390625 | $ | 0.390625 |
| | | | | | | | | | | | | | |
Common Stock | | Preferred Stock | ||||||||||||
| | | | | | | Dividend (1) | |||||||
Declaration Date |
| Dividend |
| Declaration Date |
| Series A |
| Series B |
| Series C | ||||
February 13, 2020 | | $ | 0.30 | | January 31, 2020 | | $ | 0.515625 | | $ | 0.484375 | | $ | 0.53125 |
May 6, 2020 | | $ | 0.30 | | May 1, 2020 | | $ | 0.515625 | | $ | 0.484375 | | $ | 0.53125 |
July 29, 2020 | | $ | 0.31 | | July 29, 2020 | | $ | 0.515625 | | $ | 0.484375 | | $ | 0.53125 |
October 28, 2020 | | $ | 0.32 | | October 28, 2020 | | $ | 0.515625 | | $ | 0.484375 | | $ | 0.53125 |
Common Stock – On February 17, 2021,14, 2024, the Board of Directors declared a cash dividend of $0.33$0.43 per share of common stock. The dividend is payable on March 19, 202115, 2024 to common stockholders of record as of the close of business on March 3, 2021.
Preferred Stock – On February 1, 2021, the Board of Directors declared a cash dividend of $0.515625 per share of 8.25% Series A preferred stock; a cash dividend of $0.484375 per share of 7.75% Series B preferred stock; and a cash dividend of $0.53125 per share of 8.50% Series C preferred stock. These amounts reflect dividends from December 1, 2020 through February 28, 2021 and are payable on March 1, 2021 to preferred stockholders of record on February 15, 2021.
4, 2024.
102
December 31, 2020
Deferred Compensation. We have a stock incentive plan under which the Board of Directors has the authority to issue shares of stock to certain employees, officers and directors.
In 2020, 2019 and 2018,
In 2020, 2019 and 2018, we also granted our chief executive officeraddition, 313,152 shares, 246,508 shares and 294,985 shares respectively, of performance-based restricted stock with a grant date fair value of $2.9 million, $3.0 million and $3.4 million, respectively, as a result of achieving goals related to the integration of the Acquisition. The performance-based restricted stock vestsgranted in full three years after the grant date. In 2020, we withheld 175,102 shares from the net settlement of previously granted performance-based restricted stock that vested in 2020 for payment of withholding taxes.
During 2020, 2019 and 2018, respectively, vested in 2023, 2022 and 2021, respectively, which were net settled for 153,287 shares, 120,665 shares and 150,530 shares, respectively, of common stock.
As of$11.1 million.
103
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
A reconciliation of the numerator and denominator of our basic and diluted EPS computations is as follows ($ in thousands, except share and per share data) is:
Year Ended December 31, | |||||||||||||||||||||||||||||||||||
2023 | 2022 | 2021 | |||||||||||||||||||||||||||||||||
Basic | Diluted | Basic | Diluted | Basic | Diluted | ||||||||||||||||||||||||||||||
Net income attributable to common stockholders (1) | $ | 330,065 | $ | 330,065 | $ | 284,829 | $ | 284,829 | $ | 317,412 | $ | 317,412 | |||||||||||||||||||||||
Net income attributable to noncontrolling interest (2) | — | 29,122 | — | 28,044 | — | 38,507 | |||||||||||||||||||||||||||||
Interest expense on convertible notes (3) | — | 24,832 | — | 20,166 | — | — | |||||||||||||||||||||||||||||
Net income attributable to common stockholders and noncontrolling interest | $ | 330,065 | $ | 384,019 | $ | 284,829 | $ | 333,039 | $ | 317,412 | $ | 355,919 | |||||||||||||||||||||||
Weighted average shares outstanding | 184,641,642 | 184,641,642 | 165,355,167 | 165,355,167 | 137,830,691 | 137,830,691 | |||||||||||||||||||||||||||||
Dilutive effect of OP Units (2) | — | 16,293,589 | — | 16,304,638 | — | 16,818,722 | |||||||||||||||||||||||||||||
Dilutive effect of convertible notes (3) | — | 17,294,392 | — | 16,900,204 | — | 506,949 | |||||||||||||||||||||||||||||
Dilutive effect of restricted stock units (4) | — | 613,990 | — | 552,621 | — | 933,233 | |||||||||||||||||||||||||||||
Weighted average shares outstanding | 184,641,642 | 218,843,613 | 165,355,167 | 199,112,630 | 137,830,691 | 156,089,595 | |||||||||||||||||||||||||||||
Net income per common share (1) | $ | 1.79 | $ | 1.75 | $ | 1.72 | $ | 1.67 | $ | 2.30 | $ | 2.28 |
the holders have voting rights, the right to distributions and the right to redeem the OP Units for the cash value of a corresponding number of shares of common stock or a corresponding number of shares of common stock, at our election.
| | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, | | ||||||||||||||||
| | 2020 | | 2019 | | 2018 | | ||||||||||||
|
| Basic |
| Diluted |
| Basic |
| Diluted |
| Basic |
| Diluted | | ||||||
Net income attributable to common stockholders (1) | | $ | 163,395 | | $ | 163,395 | | $ | 121,074 | | $ | 121,074 | | $ | 108,312 | | $ | 108,312 | |
Net income attributable to noncontrolling interest (2) | | | — | | | 25,208 | | | — | | | 26,610 | | | — | | | 32,185 | |
Net income attributable to common stockholders and noncontrolling interest | | $ | 163,395 | | $ | 188,603 | | $ | 121,074 | | $ | 147,684 | | $ | 108,312 | | $ | 140,497 | |
Weighted average shares outstanding | |
| 113,811,471 | |
| 113,811,471 | | | 92,851,327 | | | 92,851,327 | | | 70,208,165 | | | 70,208,165 | |
Dilutive effect of OP Units (2) | | | — | | | 19,395,691 | | | — | | | 20,502,128 | | | — | | | 21,033,103 | |
Dilutive effect of restricted stock units (3) | |
| — | |
| 718,647 | |
| — | |
| 1,421,528 | |
| — | |
| 1,476,653 | |
Dilutive effect of convertible notes (4) | | | — | | | 43,487 | | | — | | | 1,417,968 | | | — | | | 908,861 | |
Dilutive effect of stock dividend (5) | | | — | | | — | | | — | | | — | | | — | | | 15,386 | |
Weighted average shares outstanding | |
| 113,811,471 | |
| 133,969,296 | | | 92,851,327 | | | 116,192,951 | | | 70,208,165 | | | 93,642,168 | |
Net income per common share (1) | | $ | 1.44 | | $ | 1.41 | | $ | 1.30 | | $ | 1.27 | | $ | 1.54 | | $ | 1.50 | |
TRS Consolidated Group on the deferred tax assets subject to loss limitation rules was released in the amount of Year Ended December 31, 2020 2019 2018 Pre‑tax GAAP income: REIT $ 78,320 $ 94,076 $ 64,260 TRS Consolidated Group 158,230 76,198 93,522 Total pre‑tax GAAP income $ 236,550 $ 170,274 $ 157,782 Year Ended December 31, 2020 2019 2018 Current tax provision: Federal $ 27,284 $ 12,381 $ 17,479 State 8,383 2,505 4,285 Total 35,667 14,886 21,764 Deferred tax provision (benefit) : Federal $ 3,932 $ 2,743 $ (9,446) State 780 688 (2,867) Valuation allowance 14 (3,281) 280 Total 4,726 150 (12,033) Total income tax expense $ 40,393 $ 15,036 $ 9,731 Year Ended December 31, 2020 2019 2018 U.S. federal statutory rate 21.0 % 21.0 % 21.0 % REIT non‑taxable income (7.0) (11.3) (8.6) State and local income taxes, net of federal tax benefit 3.0 1.5 0.6 Change in valuation allowance — (1.9) 0.2 Preferred equity interest deferred tax write‑off — — (6.3) Other — (0.5) (0.7) Effective income tax rate 17.0 % 8.8 % 6.2 % The significant components of our deferred tax assets and liabilities of our TRS Consolidated Group are as follows (in thousands): December 31, 2020 2019 Deferred tax assets: Expenses not currently deductible $ 24,603 $ 14,850 Loan loss reserves 7,047 8,863 Net operating and capital loss carryforwards 691 417 Valuation allowance (431) (417) Other 306 — Deferred tax assets, net $ 32,216 $ 23,713 Deferred tax liabilities: Mortgage servicing rights $ 23,628 $ 11,476 Intangibles 8,002 8,684 Interest in equity affiliates—net 589 1,587 Other — 837 Deferred tax liabilities, net $ 32,219 $ 22,584 2023. Other Related Party Transactions.Due from related party was 2023, 2022 and 2021, respectively. 2023, 2022 and 2021, respectively. officer. In details. 2022 and 2021, respectively. carry a maximum loss-sharing obligation with Fannie Mae on this loan of up to 5% of the original UPB. Servicing revenue recorded from this loan was less than $0.1 million for all periods presented. In 2015, we invested $9.6 million for 50% of ACM’s indirect interest in a joint venture with a third party that was formed to invest in a residential mortgage banking business. 2023, 2022 and 2021, respectively. management contract, the management company is entitled to 4.75% of gross revenues of the underlying properties, along with the potential to share in the proceeds of a sale or restructuring of the debt. In Year Ended December 31, 2020 Structured Agency Other / Business Business Eliminations (1) Consolidated Interest income $ 305,893 $ 33,572 $ — $ 339,465 Interest expense 150,964 18,252 — 169,216 Net interest income 154,929 15,320 — 170,249 Other revenue: Gain on sales, including fee-based services, net — 94,607 — 94,607 Mortgage servicing rights — 165,517 — 165,517 Servicing revenue — 103,607 — 103,607 Amortization of MSRs — (49,222) — (49,222) Property operating income 3,976 — — 3,976 Loss on derivative instruments, net (2,859) (55,476) — (58,335) Other income, net 4,052 57 — 4,109 Total other revenue 5,169 259,090 — 264,259 Other expenses: Employee compensation and benefits 40,292 104,088 — 144,380 Selling and administrative 15,706 21,642 — 37,348 Property operating expenses 4,898 — — 4,898 Depreciation and amortization 2,391 5,249 — 7,640 Provision for loss sharing (net of recoveries) — 14,822 — 14,822 Provision for credit losses (net of recoveries) 59,967 1,143 — 61,110 Total other expenses 123,254 146,944 — 270,198 Income before extinguishment of debt, sale of real estate, income from equity affiliates and income taxes 36,844 127,466 — 164,310 Loss on extinguishment of debt (3,546) — — (3,546) (Loss) gain on sale of real estate (878) 503 — (375) Income from equity affiliates 76,161 — — 76,161 Provision for income taxes (14,303) (26,090) — (40,393) Net income 94,278 101,879 — 196,157 Preferred stock dividends 7,554 — — 7,554 Net income attributable to noncontrolling interest — — 25,208 25,208 Net income attributable to common stockholders $ 86,724 $ 101,879 $ (25,208) $ 163,395 Year Ended December 31, 2019 Structured Agency Other / Business Business Eliminations (1) Consolidated Interest income $ 289,841 $ 26,099 $ — $ 315,940 Interest expense 169,802 16,597 — 186,399 Net interest income 120,039 9,502 — 129,541 Other revenue: Gain on sales, including fee-based services, net — 65,652 — 65,652 Mortgage servicing rights — 90,761 — 90,761 Servicing revenue — 103,223 — 103,223 Amortization of MSRs — (48,681) — (48,681) Property operating income 9,674 — — 9,674 Loss on derivative instruments, net (275) (1,687) — (1,962) Other income, net 1,178 — — 1,178 Total other revenue 10,577 209,268 — 219,845 Other expenses: Employee compensation and benefits 31,264 90,838 — 122,102 Selling and administrative 18,099 22,230 — 40,329 Property operating expenses 10,220 — — 10,220 Depreciation and amortization 2,046 5,464 — 7,510 Impairment loss on real estate owned 1,000 — — 1,000 Provision for loss sharing (net of recoveries) — 1,147 — 1,147 Total other expenses 62,629 119,679 — 182,308 Income before extinguishment of debt, income from equity affiliates and income taxes 67,987 99,091 — 167,078 Loss on extinguishment of debt (7,439) — — (7,439) Income from equity affiliates 10,635 — — 10,635 Provision for income taxes (668) (14,368) — (15,036) Net income 70,515 84,723 — 155,238 Preferred stock dividends 7,554 — — 7,554 Net income attributable to noncontrolling interest — — 26,610 26,610 Net income attributable to common stockholders $ 62,961 $ 84,723 $ (26,610) $ 121,074 Year Ended December 31, 2018 Structured Agency Other / Business Business Eliminations (1) Consolidated Interest income $ 226,750 $ 25,018 $ — $ 251,768 Interest expense 137,719 15,770 329 153,818 Net interest income 89,031 9,248 (329) 97,950 Other revenue: Gain on sales, including fee-based services, net — 70,002 — 70,002 Mortgage servicing rights — 98,839 — 98,839 Servicing revenue — 94,158 — 94,158 Amortization of MSRs — (48,124) — (48,124) Property operating income 10,095 — — 10,095 Gain on derivative instruments, net — 5,955 — 5,955 Other income, net 1,490 716 — 2,206 Total other revenue 11,585 221,546 — 233,131 Other expenses: Employee compensation and benefits 27,456 83,014 — 110,470 Selling and administrative 15,642 21,432 — 37,074 Property operating expenses 10,431 — — 10,431 Depreciation and amortization 1,851 5,602 — 7,453 Impairment loss on real estate owned 2,000 — — 2,000 Provision for loss sharing (net of recoveries) — 3,843 — 3,843 Provision for loan losses (net of recoveries) 8,353 — — 8,353 Litigation settlement gain (10,170) — — (10,170) Total other expenses 55,563 113,891 — 169,454 Income before extinguishment of debt, income from equity affiliates and income taxes 45,053 116,903 (329) 161,627 Loss on extinguishment of debt (5,041) — — (5,041) Income from equity affiliates 1,196 — — 1,196 Benefit from (provision for) income taxes 774 (10,505) — (9,731) Net income 41,982 106,398 (329) 148,051 Preferred stock dividends 7,554 — — 7,554 Net income attributable to noncontrolling interest — — 32,185 32,185 Net income attributable to common stockholders $ 34,428 $ 106,398 $ (32,514) $ 108,312 December 31, 2020 Structured Business Agency Business Consolidated Assets: Cash and cash equivalents $ 172,568 $ 166,960 $ 339,528 Restricted cash 188,226 9,244 197,470 Loans and investments, net 5,285,868 — 5,285,868 Loans held-for-sale, net — 986,919 986,919 Capitalized mortgage servicing rights, net — 379,974 379,974 Securities held-to-maturity, net — 95,524 95,524 Investments in equity affiliates 74,274 — 74,274 Goodwill and other intangible assets 12,500 92,951 105,451 Other assets 142,844 53,134 195,978 Total assets $ 5,876,280 $ 1,784,706 $ 7,660,986 Liabilities: Debt obligations $ 4,872,626 $ 952,038 $ 5,824,664 Allowance for loss-sharing obligations — 64,303 64,303 Other liabilities 203,554 85,780 289,334 Total liabilities $ 5,076,180 $ 1,102,121 $ 6,178,301 December 31, 2019 Assets: Cash and cash equivalents $ 264,468 $ 35,219 $ 299,687 Restricted cash 208,926 1,949 210,875 Loans and investments, net 4,189,960 — 4,189,960 Loans held-for-sale, net — 861,360 861,360 Capitalized mortgage servicing rights, net — 286,420 286,420 Securities held-to-maturity, net 20,000 68,699 88,699 Investments in equity affiliates 41,800 — 41,800 Goodwill and other intangible assets 12,500 98,200 110,700 Other assets 118,175 31,484 149,659 Total assets $ 4,855,829 $ 1,383,331 $ 6,239,160 Liabilities: Debt obligations $ 3,878,343 $ 743,595 $ 4,621,938 Allowance for loss-sharing obligations — 34,648 34,648 Other liabilities 171,004 55,543 226,547 Total liabilities $ 4,049,347 $ 833,786 $ 4,883,133 Year Ended December 31, 2020 2019 2018 Origination Data: Structured Business New loan originations (1) $ 2,433,679 $ 2,803,251 $ 1,656,020 Loan payoffs / paydowns 1,208,071 1,748,387 955,575 (1) We committed to fund 6 SFR build-to-rent bridge loans totaling $197.8 million in the third and fourth quarters of 2020. Agency Business Origination Volumes by Investor: Fannie Mae $ 5,041,925 $ 3,346,272 $ 3,332,100 Freddie Mac 960,508 728,317 1,587,958 Private Label 382,191 401,216 — FHA 327,345 123,095 153,523 CMBS/Conduit — 211,325 50,908 Total $ 6,711,969 $ 4,810,225 $ 5,124,489 Total loan commitment volume $ 6,810,666 $ 4,829,721 $ 5,104,072 Loan Sales Data: Agency Business Fannie Mae $ 4,771,113 $ 3,296,523 $ 3,217,006 Freddie Mac 816,802 786,993 1,540,483 Private Label 727,154 — — FHA 272,659 106,271 115,747 CMBS/Conduit — 211,325 50,908 Total $ 6,587,728 $ 4,401,112 $ 4,924,144 Sales margin (fee-based services as a % of loan sales) 1.44 % 1.49 % 1.42 % MSR rate (MSR income as a % of loan commitments) 2.43 % 1.88 % 1.94 % December 31, 2020 Wtd. Avg. Servicing Wtd. Avg. Life of UPB of Servicing Fee Rate Servicing Portfolio Key Servicing Metrics for Agency Business: Portfolio (basis points) (in years) Fannie Mae $ 18,268,268 52.3 8.2 Freddie Mac 4,881,080 27.9 9.9 FHA 752,116 16.3 20.3 Private Label 726,992 20.0 8.7 Total $ 24,628,456 45.4 8.9 December 31, 2019 Fannie Mae $ 14,832,844 49.3 7.8 Freddie Mac 4,534,714 30.0 10.6 FHA 691,519 15.4 18.7 Total $ 20,059,077 43.8 8.81817 — Income Taxes2020, 2023, 2022 and 2021, and therefore, have not provided for REIT federal income tax expense in any of those years. In 2023, 2022 and 2021, the REIT incurred no state income tax expense. In 2019, weWe have elected to retain excess inclusion income rather than passing it through to our stockholders. Consequently, we had REIT-federal taxable income, net of dividends paid deduction, for 2019, and therefore, had provided for REIT federal income tax expense of $0.6 million attributable to excess inclusion income. In 2018, we did not have any REIT–federal taxable income, net of dividends paid and net operating loss deductions, and therefore, did not provide for REIT federal income tax expense. In 2020, the REIT incurred no state tax expense. In 2019 and 2018, the REIT incurred state tax expense/(benefit) in the amount of $0.1 million and ($0.1) million, respectively. For the 2009 and 2010 tax years, the income and the tax on certain debt extinguishment transactions was, at our election, deferred to be recognized ratably over five years from 2014 to 2018.taxable REIT subsidiaries (the “TRSTRS Consolidated Group”),Group, the majority of the income of which is subject to U.S. federal, state and local income taxes. The TRS Consolidated Group hashad no federal net operating losses remaining from prior years which will be used against the income from the Agency Businesssubject to loss limitation rules.years. For 2020, 20192023, 2022 and 2018,2021, we recorded a provision for income taxes related to the assets held in the TRS Consolidated Group and the REIT in the amount of $40.4$27.3 million, $15.0$17.5 million and $9.7$46.3 million, respectively.In 2020,2023, the change in the valuation allowance previously recorded at the TRS Consolidated Group on the deferred tax assets was released in the amount of $0.3 million. In 2022, the change in the valuation allowance previously recorded at the TRS Consolidated Group on the deferred tax assets was due to the impact of state tax rate changes. In 2019,2021, valuation allowance previously recorded at the104ARBOR REALTY TRUST, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)December 31, 2020$3.3$0.1 million. In 2018, valuation allowance was recorded at the TRS Consolidated Group in the amountYear Ended December 31, 2023 2022 2021 Pre‑tax GAAP income: REIT $ 320,045 $ 303,320 $ 239,356 TRS Consolidated Group 107,858 67,991 184,736 Total pre‑tax GAAP income $ 427,903 $ 371,311 $ 424,092 Year Ended December 31, 2023 2022 2021 Current tax provision: Federal $ 26,269 $ 14,167 $ 27,454 State 8,427 5,058 7,939 Total 34,696 19,225 35,393 Deferred tax (benefit) provision: Federal $ (5,272) $ (1,373) $ 8,287 State (1,783) (370) 2,744 Valuation allowance (294) 2 (139) Total (7,349) (1,741) 10,892 Total income tax expense $ 27,347 $ 17,484 $ 46,285 105Year Ended December 31, 2023 2022 2021 U.S. federal statutory rate 21.0 % 21.0 % 21.0 % REIT non‑taxable income (15.7) % (17.2) % (11.9) % State and local income taxes, net of federal tax benefit 1.2 % 1.0 % 2.0 % Other (0.1) % (0.1) % (0.2) % Effective income tax rate 6.4 % 4.7 % 10.9 % December 31, 2020December 31, 2023 2022 Deferred tax assets: Expenses not currently deductible $ 27,144 $ 22,755 Loan loss reserves 7,088 7,159 Net operating and capital loss carryforwards 188 454 Valuation allowance — (294) Other 346 441 Deferred tax assets, net $ 34,766 $ 30,515 Deferred tax liabilities: Mortgage servicing rights $ 28,286 $ 26,975 Intangibles 5,565 6,457 Interest in equity affiliates—net 2,719 6,237 Deferred tax liabilities, net $ 36,570 $ 39,669 December 31, 2020, our TRS Consolidated Group, had $32.2 million of deferred tax assets net of a $0.4 million valuation allowance. The deferred tax assets consist of expenses not currently deductible, loan loss reserves, net operating loss and capital loss carryforwards. Our TRS Consolidated Group's deferred tax assets are offset by $32.2 million in deferred tax liabilities consisting of timing differences from investments in equity affiliates, intangibles and mortgage servicing rights.At December 31, 2019, our TRS Consolidated Group, had $23.7 million of deferred tax assets net of a $0.4 million valuation allowance. The deferred tax assets consist of expenses not currently deductible, loan loss reserves, net operating loss and capital loss carryforwards. Our TRS Consolidated Group's deferred tax assets are offset by $22.6 million in deferred tax liabilities consisting of timing differences from investments in equity affiliates, intangibles and mortgage servicing rights.As of both December 31, 20202023 and 2019,2022, the REIT (excluding the TRS Consolidated Group) had no federal net operating loss carryforwards remaining and no capital loss carryforwards.20202023 and 2019,2022, the TRS Consolidated Group had no federal net operating loss carryforwards of $0.5 million, which will expire through 2031 andremaining. During 2023, the TRS Consolidation Group utilized in full its capital loss carryforwardscarryforward of approximately $1.1 million, which will expire through 2023.million.2020,2023 and 2022, the TRS Consolidated Group had state net operating loss carryforwards of $0.3$0.2 million, which will begin to expire in 2036. At December 31, 2019, the TRS Consolidated Group had no state net operating loss carryforwards.2017-2018.2017-2021. While the impact of the current income tax examinations arewere undetermined, it is not expected to have abe material impact onto our consolidated financial statements.2017-2020,2017-2023, and have concluded that there were no material uncertainties to be recognized. We have not recognized any interest and penalties related to tax uncertainties for the years ended 2017 through 2020.1918 — Agreements and Transactions with Related Partieslimited support services and seconded employees to ACM and its affiliates and theythe Service Recipients. The Service Recipients reimburse us for the costs of performing such services. We also have an employee secondment agreement with ACM pursuant to which we have seconded certain employees to ACMservices and ACM covers the cost of thosethe seconded employees. During 2020, 20192023, 2022 and 2018,2021, we incurred $2.4$3.2 million, $2.7$3.3 million and $1.3$3.2 million, respectively, of costs for services provided and employees seconded to ACM,the Service Recipients, all of which are reimbursable to us and included in due from related party on the consolidated balance sheets.106ARBOR REALTY TRUST, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)December 31, 2020$12.4$64.4 million and $10.7$77.4 million at December 31, 20202023 and 2019,2022, respectively, which consisted primarily of amounts due from our affiliated servicing operations related to real estate transactions closing at the end of 20202023 and 20192022 and amounts due from ACM for costs incurred in connection with the shared services agreementsupport and secondment agreements described above.$2.4$13.8 million and $13.1$12.4 million at December 31, 20202023 and 2019,2022, respectively, and consisted of loan payoffs, holdbacks and escrows to be remitted to our affiliated servicing operations related to real estate transactions.we made a $3.5 million preferred equity investment in aan SFR build-to-rent construction project. An entity owned by an immediate family member of our chief executive officer also made an equity investment in the project and owns a 21.8% equity interest in the borrowing entity. The bridge loan which was not funded as of December 31, 2020, hashad an interest rate of LIBOR plus 5.50% with a LIBOR floor of 0.75% and matures, that was changed to SOFR in OctoberJuly 2023, and the preferred equity investment has a 12.00% fixed raterate. Both loans were scheduled to mature in December 2023. In November 2023, the bridge loan was upsized to a maximum of 12%$39.9 million ($31.4 million was funded at December 31, 2023) and matures inthe maturity date for both loans was extended to October 2023.2024. Interest income recorded from these loans totaled less than $0.1was $2.8 million, $1.3 million and $0.5 million for 2020. October 2020, we committed to fund a $30.5 million bridge loan, and we made a $4.6 million preferred equity investment in a SFR build-to-rent construction project. ACM and an entity owned by an immediate family member of our chief executive officer also made equity investments in the project and own an 18.9% equity interest in the borrowing entity. The bridge loan which was not funded as of December 31, 2020, hashad an interest rate of LIBOR plus 5.50% with a LIBOR floor of 0.75% and matureswas scheduled to mature in May 2023 and the2023. The preferred equity investment has a 12.00% fixed rate of 12% and matureswas scheduled to mature in April 2023. In April 2023, the bridge loan was upsized to a maximum of $38.8 million ($36.3 million was funded at December 31, 2023), and the interest rate was changed to SOFR plus 5.25% with a SOFR floor of 1.00%. In addition, the maturity on both loans was extended to May 2025. Interest income recorded from these loans totaled $0.1was $3.6 million, $1.6 million and $0.6 million for 2020.havehad a $35.0 million bridge loan and a $7.8$10.0 million preferred equity interest on an office buildingbuilding. The bridge loan was scheduled to mature in New York City. The property is controlled by a third partyOctober 2023 and beginningthe preferred equity investment was scheduled to mature in June 2020, its2027. The day-to-day operations arewere being managed by an affiliated entity owned byof an immediate family member of our chief executive officer, which is entitled to an annual fee of $0.3 million and a 33% equity participation interest.certain instances, our business requires our executives to charter privately owned aircraft in furtherance of our business. In 2019,September 2021, we entered into an aircraft time-sharinga forbearance agreement with an entity controlled by our chief executive officer that ownsthe borrower on the outstanding bridge loan to defer all interest owed until maturity or early payoff. Interest income recorded from these loans was $1.3 million for 2021. In the fourth quarter of 2023, we converted these loans in the building to a private aircraft. Pursuant to the agreement, we reimburse the aircraft ownercommon equity investment. See Note 3 for the required costs under Federal Aviation Administration regulations for the flights our executives’ charter. During 2020 and 2019, we reimbursed the aircraft owner $0.5 million and $0.1 million, respectively, for the flights chartered by our executives pursuant the agreement.(of which $11.7($25.9 million was funded as ofat December 31, 2020)2023) for an 18% interest in AMAC III. During 20202023, 2022 and 2019,2021, we recorded losses of $1.9 million, $2.4 million and $1.3 million, respectively, and received cash distributions totaling $0.1$1.1 million and $0.2$0.5 million in 2023 and 2022, respectively, and recorded a loss of $0.9 million and $0.2 million, respectively, related toassociated with this investment. In July 2019, AMAC III originated a $7.0 million mezzanine loan to a borrower with which we have an outstanding $34.0 million bridge loan. In June 2020, for full satisfaction of the mezzanine loan, AMAC III became the owner of the property. In AugustAlso in 2020, the $34.0 million bridge loan was refinanced with a $35.3$35.4 million bridge loan, which bearsbore interest at a rate of 350 basis points over LIBOR and matures in August 2022. We also originated a $15.6 million Private Label loan in December 2019 to a borrower which is 100% owned by AMAC III, which bears interest at a fixed rate of 3.735% and matures in January 2030.In May 2020, we sold the Private Label loan to an unconsolidated affiliate of ours. Interest income recorded from our bridge and Private Label loans totaled $1.9 million and $3.3 million for 2020 and 2019, respectively.In 2018, we originated a $61.2 million bridge loan on a multifamily property owned in part by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns 10% of the borrowing entity. The loan has an interest rate of LIBOR plus 4.50% with a LIBOR floor of 2.00% and matures3.50%, that was changed to SOFR in October 2021.In the fourth quarter of 2019, the related party investors liquidated their equity investment. Interest income recorded from this loan totaled $1.3 million and $0.2 million for 2019 and 2018, respectively.107ARBOR REALTY TRUST, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)December 31, 2020In 2018, we originated a $37.5 million bridge loan, which was used to purchase several multifamily properties. In 2019, an entity owned, in part, by an immediate family member of our chief executive officer, purchased a 23.9% interest in the borrowing entity. The loan had an interest rate of LIBOR plus 4.25% with a LIBOR floor of 2.375%July 2023, and was scheduled to mature in in October 2020. In May 2020, the borrower repaid this loan in full.August 2023, which was extended to August 2024. Interest income recorded from thisthe bridge loan totaled $1.4was $3.1 million, $1.9 million and $2.7$1.3 million for 20202023, 2022 and 2019,2021, respectively.In 2018, we acquired a $19.5 million bridge loan originated by ACM. The loan was used to purchase several multifamily properties by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns 85% of the borrowing entity. The loan has an interest rate of LIBOR plus 4.0% with a LIBOR floor of 2.125% and matures in July 2021. Interest income recorded from this loan totaled $1.2 million, $1.3 million and $0.3 million for 2020, 2019 and 2018, respectively.In 2018, we originated a $17.7 million bridge loan to an entity owned, in part, by an immediate family member of our chief executive officer, who owns a 10.8% interest in the borrowing entity. The loan was used to purchase several undeveloped parcels of land. The loan has a fixed interest rate of 10% and was scheduled to mature in February 2020. In September 2019, the borrower made a partial paydown of principal totaling $4.7 million and the remaining balance was paid off in January 2020. Interest income recorded from this loan totaled $0.1 million, $1.8 million and $0.8 million for 2020, 2019 and 2018, respectively.hashad an interest rate of LIBOR plus 4.75% with a LIBOR floor of 1.25%0.25%, that was changed to SOFR in July 2023, and matureswas scheduled to mature in June 2021.August 2023, which was extended to August 2024. Interest income recorded from this loan totaledwas $2.2 million, $1.4 million for both 2020 and 2019, and $0.6$1.3 million for 2018.In 2018, we acquired a $9.4 million bridge loan originated by ACM. The loan was used to purchase several multifamily properties by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers2023, 2022 and our chief executive officer) which owns 75% of the borrowing entity. The loan has an interest rate of LIBOR plus 5.0% with a LIBOR floor of 1.25% and was scheduled to mature in January 2021.In January 2021, the maturity date of this loan was extended to January 2022. Interest income recorded from this loan totaled $0.6 million for both 2020 and 2019, and $0.3 million for 2018.In 2018, we paid $50.0 million in full satisfaction of the related party financing we entered into with ACM to finance a portion of the Acquisition purchase price. We incurred interest expense related to this financing of $0.3 million for 2018.In 2017, we acquired a $32.8 million bridge loan originated by ACM. The loan was used to purchase several multifamily properties by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owned 90% of the borrowing entity. The loan had an interest rate of LIBOR plus 5.0% with a LIBOR floor of 1.13% and was scheduled to mature in June 2020. In 2019, the borrower repaid this loan in full. Interest income recorded from this loan totaled $1.7 million and $2.4 million for 2019 and 2018, respectively.2two bridge loans totaling $28.0 million on 2two multifamily properties owned in part by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns 45% of the borrowing entity. The loans had an interest rate of LIBOR plus 5.25% with LIBOR floors ranging from 1.24% to 1.54% and were scheduled to mature in the fourth quarter of 2020. The borrower refinanced these loans with a $31.1 million bridge loan we originated in 2019 with an interest rate of LIBOR plus 4.0%,4.00% and a LIBOR floor of 1.80% and a maturity date in October 2021. Interest income recorded from these loans totaled $1.9 million, $2.2 million and $2.1 million for 2020, 2019 and 2018, respectively.In 2017, we originated a $36.0 million bridge loan on a multifamily property ownedin part by a consortium of investors(, which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns a 95% interest in the borrowing entity. The loan had an interest rate of LIBOR plus 4.5% with a LIBOR floor of 1% and was scheduled to mature in July 2020.ThisOctober 2022. In May 2022, this loan was repaidpaid off in full in 2018.full. Interest income recorded from this loan totaled$1.9was $0.8 million and $1.9 million for 2018.108ARBOR REALTY TRUST, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)December 31, 2020In 2017, a consortium of investors (which includes, among other unaffiliated investors, our chief executive officer and ACM) invested $2.0 million for a 26.1% ownership interest in 2 portfolios of multifamily properties which has 2 bridge loans totaling $14.8 million originated by us in 2016. The loans had an interest rate of LIBOR plus 5.25% with a LIBOR floor of 0.5% and were scheduled to mature in November 2018. One of the loans was repaid in full in 2017 and the remaining loan paid off in 2018. Interest income recorded from the loan that paid off in 2018 was $0.3 million for 2018.2020.2023. We carry a maximum loss-sharing obligation with Fannie Mae on this loan of up to 20% of the original UPB. Upon the sale, we received a 1% loan assumption fee which was governed by existing loan agreements that were in place when the loan was originated in 2015, prior to such purchase. In July 2023, the Fannie Mae loan was paid off in full. Servicing revenue recorded from this loan was less than $0.1 million for all periods presented.2016,2019, we originated $48.0converted an existing bridge loan into a $2.0 million mezzanine loan with a fixed interest rate of bridge loans on 610.00% and a January 2024 maturity. In January 2024, the maturity was extended one year to January 2025. Interest income recorded from this loan was $0.2 million for all period presented. The underlying multifamily propertiesproperty is owned in part by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns interests ranging from 10.5% to 12.0% in the borrowing entities. The loans had an interest rate of LIBOR plus 4.5% with a LIBOR floor of 0.25% and were scheduled to mature in September 2019. In 2017, a $6.8 million loan on one property paid off in full andentities.in 2018 four additional loans totaling $28.3 million paid off in full. In January 2019, $10.9 million of the $12.9 million remaining bridge loan paid off, with the $2.0 million remaining UPB converting to a mezzanine loan with a fixed interest rate of 10.0% and a January 2024 maturity. Interest income recorded from these loans totaled $0.2 million, $0.3 million and $1.9 millionfor 2020, 2019 and 2018, respectively.In 2016, we originated a $12.7 million bridge loan and a $5.2 million preferred equity investment on 2 multifamily properties ownedin part by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns a 50% interest in the borrowing entity. The bridge loan had an interest rate of LIBOR plus 4.5% with a LIBOR floor of 0.25% and the preferred equity investment had a fixed interest rate of 10%. The bridge loan and the preferred equity investment paid off in full in May 2019. In March 2020, we originated a $14.8 million Private Label loan and a $3.4 million mezzanine loan to the properties. The Private Label loan bears interest at a fixed rate of 3.10% and the mezzanine loan bears interest at a fixed rate of 9.00% and both loans mature in April 2030. In May 2020, we sold the Private Label loan to an unconsolidated affiliate of ours. Interest income recorded from these loans totaled $0.3 million, $0.6 million and $1.4 million for 2020, 2019 and 2018, respectively.In 2016, we originated a $19.0 million bridge loan on a multifamily property owned in part by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns a 7.5% interest in the borrowing entity. The loan had an interest rate of LIBOR plus 4.5% with a LIBOR floor of 0.25% and was scheduled to mature in January 2019. In January 2018, this loan paid off in full. Interest income recorded from this loan totaled $0.3 million for 2018.As a result of this transaction,At December 31, 2023, we had an initial indirect interest of 22.5%12.3% in this entity.We recorded income from these investments of $75.7 million, $7.2 million and $0.9 million for 2020, 2019 and 2018, respectively. In connection with a litigation settlementequity affiliates related to this investment we provided a guaranty of up to 50% of any amounts payable in connection with the settlement. ACM has also provided us with a guaranty to pay up to 50% of any amounts we may pay under this guaranty. The final payment was made under this settlement in January 2020$0.6 million, $4.9 million and we have no additional exposure.Interest income recorded from loans originated in 2015 or prior years with our affiliates totaled $1.3$34.6 million for 2018.109ARBOR REALTY TRUST, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)December 31, 2020 June 2018, the owners of Lexford restructured part of its debt and we originated 12 bridge loans totaling $280.5 million, which were used to repay in full certain existing mortgage debt and to renovate 72 multifamily properties included in the portfolio. The loans were originated in June 2018, had interest rates of LIBOR plus 4.0%4.00% and were scheduled to mature in June 2021.During 2019, the borrower made payoffs and partial paydowns of principal totaling $250.0 million and in March 2020, the remaining balance of the loans were refinanced with a $34.6 million Private Label loan, which bears interest at a fixed rate of 3.30% and matures in March 2030. In May 2020, we sold the Private Label loan to an unconsolidated affiliate of ours. Interest income recorded from these loans totaled $0.5 million $9.6 million and $10.1 million during 2020, 2019 and 2018, respectively.2020. Further, as part of this June 2018 restructuring, $50.0 million in unsecured financing was provided by an unsecured lender to certain parent entities of the property owners. ACM owns slightly less than half of the unsecured lender entity and, therefore, provided slightly less than half of the unsecured lender financing. In addition, in connection with our equity investment, we received distributions totaling $1.1 million, $3.5$12.2 million and $2.5$11.1 million during 2020, 20192023 and 2018,2022, respectively, which were recorded as income from equity affiliates. Separate from the loans we originated in June 2018, we provide limited (“bad boy”) guarantees for certain other debt controlled by Lexford. The bad boy guarantees may become a liability for us upon standard “bad” acts such as fraud or a material misrepresentation by Lexford or us. At December 31, 2020,2023, this debt had an aggregate outstanding balance of $612.4approximately $600.0 million and is scheduled to mature between 2021 andthrough 2029.Upon the closing of the Acquisition in 2016, we issued OP Units, each paired with 1 share of our special voting preferred shares. At December 31, 2020,2023, ACM holds 3,528,0832,535,870 shares of our common stock and 11,901,06810,615,085 OP Units, which represents 11.0%approximately 6.4% of the voting power of our outstanding stock. Our Board of Directors approved a resolution under our charter allowing our chief executive officer and ACM, (which our chief executive officer has a controlling equity interest in), to own more than the 5% ownership interest limit of our common stock as stated in our amended charter.2019 — Employee Benefits"401(k) Plan"“401(k) Plan”) which is available to all employees who have completed six months of continuous service. The 401(k) Plan matches 25% of the first 6% of each employee'semployee’s contribution. We have the option to increase the employer match based on our operating results. In 2020, 20192023, 2022 and 2018,2021, we recorded $0.8$1.2 million, $0.7$1.0 million and $0.6$0.8 million, respectively, of expenses associated with the 401(k) Plan, which is included in employee compensation and benefits in our consolidated statements of income.Plan"Plan”) which is offered to certain full-time employees and is subject to the rules of section 409(a)409A of the Internal Revenue Code. The Deferred Comp Plan can be modified or discontinued at any time and, in 2020, we modified the eligibility requirements to allow participation to certain additional employees.time. All eligible participating employees may defer a portion of their compensation and, depending on the participant eligibility requirements met, we are contractually obligated to: (i)(1) match the contribution, as specified in the Deferred Comp Plan, and fund such amounts upon vesting and an election by participants to redeem their interests; and/or (ii)(2) supply additional life insurance benefits. All employee deferrals vest immediately and the matching contributions, where applicable, vest over a nine-yearnine-year period beginning after year five. For 2020, 20192023, 2022 and 2018,2021, there were $1.8$3.1 million, $1.6$3.3 million and $1.6$2.2 million, respectively, of employee deferrals. At December 31, 20202023 and 2019,2022, we had recorded liabilities totaling $18.7$37.6 million and $13.2$28.7 million, respectively, and assets of $14.1$30.2 million and $8.2$24.7 million, respectively, related to the Deferred Comp Plan, which is included in other liabilities and other assets, respectively, in our consolidated balance sheets.2120 — Segment Information110December 31, 2020methodologies, which was predominately direct labor costs (i.e., time spent working on each business segment). Such costs include, but are not limited to, compensation and employee related costs, selling and administrative expenses and stock-based compensation.111Year Ended December 31, 2023 Structured
BusinessAgency
BusinessOther (1) Consolidated Interest income $ 1,279,433 $ 51,786 $ — $ 1,331,219 Interest expense 880,602 22,626 — 903,228 Net interest income 398,831 29,160 — 427,991 Other revenue: Gain on sales, including fee-based services, net — 72,522 — 72,522 Mortgage servicing rights — 69,912 — 69,912 Servicing revenue — 193,542 — 193,542 Amortization of MSRs — (63,093) — (63,093) Property operating income 5,708 — — 5,708 Gain on derivative instruments, net — 6,763 — 6,763 Other income, net 4,868 2,799 — 7,667 Total other revenue 10,576 282,445 — 293,021 Other expenses: Employee compensation and benefits 53,507 106,281 — 159,788 Selling and administrative 23,234 28,026 — 51,260 Property operating expenses 5,897 — — 5,897 Depreciation and amortization 5,052 4,691 — 9,743 Provision for loss sharing (net of recoveries) — 15,695 — 15,695 Provision for credit losses (net of recoveries) 70,344 3,102 — 73,446 Total other expenses 158,034 157,795 — 315,829 Income before extinguishment of debt, income from equity affiliates and income taxes 251,373 153,810 — 405,183 Loss on extinguishment of debt (1,561) — — (1,561) Income from equity affiliates 24,281 — — 24,281 Benefit from (provision for) income taxes 803 (28,150) — (27,347) Net income 274,896 125,660 — 400,556 Preferred stock dividends 41,369 — — 41,369 Net income attributable to noncontrolling interest — — 29,122 29,122 Net income attributable to common stockholders $ 233,527 $ 125,660 $ (29,122) $ 330,065 December 31, 2020112Year Ended December 31, 2022 Structured
BusinessAgency
BusinessOther (1) Consolidated Interest income $ 903,622 $ 44,779 $ — $ 948,401 Interest expense 538,659 18,958 — 557,617 Net interest income 364,963 25,821 — 390,784 Other revenue: Gain on sales, including fee-based services, net — 55,816 — 55,816 Mortgage servicing rights — 69,346 — 69,346 Servicing revenue — 152,068 — 152,068 Amortization of MSRs — (59,876) — (59,876) Property operating income 1,877 — — 1,877 Gain on derivative instruments, net — 26,609 — 26,609 Other income (loss), net (2,360) (15,203) — (17,563) Total other revenue (483) 228,760 — 228,277 Other expenses: Employee compensation and benefits 56,032 105,793 — 161,825 Selling and administrative 26,059 27,931 — 53,990 Property operating expenses 2,136 — — 2,136 Depreciation and amortization 4,041 4,691 — 8,732 Provision for loss sharing (net of recoveries) — 1,862 — 1,862 Provision for credit losses (net of recoveries) 19,770 1,399 — 21,169 Litigation settlement 7,350 — — 7,350 Total other expenses 115,388 141,676 — 257,064 Income before extinguishment of debt, income from equity affiliates and income taxes 249,092 112,905 — 361,997 Loss on extinguishment of debt (4,933) — — (4,933) Income from equity affiliates 14,247 — — 14,247 Provision for income taxes (821) (16,663) — (17,484) Net income 257,585 96,242 — 353,827 Preferred stock dividends 40,954 — — 40,954 Net income attributable to noncontrolling interest — — 28,044 28,044 Net income attributable to common stockholders $ 216,631 $ 96,242 $ (28,044) $ 284,829 December 31, 2020Year Ended December 31, 2021 Structured
BusinessAgency
BusinessOther (1) Consolidated Interest income $ 427,039 $ 39,048 $ — $ 466,087 Interest expense 194,435 17,570 — 212,005 Net interest income 232,604 21,478 — 254,082 Other revenue: Gain on sales, including fee-based services, net — 123,037 — 123,037 Mortgage servicing rights — 130,230 — 130,230 Servicing revenue — 133,429 — 133,429 Amortization of MSRs — (58,615) — (58,615) Property operating income 185 — — 185 Loss on derivative instruments, net — (2,684) — (2,684) Other income, net 7,491 75 — 7,566 Total other revenue 7,676 325,472 — 333,148 Other expenses: Employee compensation and benefits 51,225 120,571 — 171,796 Selling and administrative 21,064 24,511 — 45,575 Property operating expenses 718 — — 718 Depreciation and amortization 2,524 4,691 — 7,215 Provision for loss sharing (net of recoveries) — (6,167) — (6,167) Provision for credit losses (net of recoveries) (21,223) 110 — (21,113) Total other expenses 54,308 143,716 — 198,024 Income before extinguishment of debt, gain on real estate, income from equity affiliates and income taxes 185,972 203,234 — 389,206 Loss on extinguishment of debt (3,374) — — (3,374) Gain on real estate 2,466 1,227 — 3,693 Income from equity affiliates 34,567 — — 34,567 Provision for income taxes (5,940) (40,345) — (46,285) Net income 213,691 164,116 — 377,807 Preferred stock dividends 21,888 — — 21,888 Net income attributable to noncontrolling interest — — 38,507 38,507 Net income attributable to common stockholders $ 191,803 $ 164,116 $ (38,507) $ 317,412 certain corporate expensesincome allocated to the noncontrolling interest holders not allocated to the two reportable segments, primarily income allocated to the noncontrolling interest holders.segments.113December 31, 2020114December 31, 2023 Structured Business Agency Business Consolidated Assets: Cash and cash equivalents $ 619,487 $ 309,487 $ 928,974 Restricted cash 595,342 12,891 608,233 Loans and investments, net 12,377,806 — 12,377,806 Loans held-for-sale, net — 551,707 551,707 Capitalized mortgage servicing rights, net — 391,254 391,254 Securities held-to-maturity, net — 155,279 155,279 Investments in equity affiliates 79,303 — 79,303 Goodwill and other intangible assets 12,500 78,878 91,378 Other assets and due from related party 453,073 101,629 554,702 Total assets $ 14,137,511 $ 1,601,125 $ 15,738,636 Liabilities: Debt obligations $ 11,520,492 $ 413,327 $ 11,933,819 Allowance for loss-sharing obligations — 71,634 71,634 Other liabilities and due to related parties 369,588 108,990 478,578 Total liabilities $ 11,890,080 $ 593,951 $ 12,484,031 December 31, 2022 Assets: Cash and cash equivalents $ 200,514 $ 333,843 $ 534,357 Restricted cash 713,615 193 713,808 Loans and investments, net 14,254,674 — 14,254,674 Loans held-for-sale, net — 354,070 354,070 Capitalized mortgage servicing rights, net — 401,471 401,471 Securities held-to-maturity, net — 156,547 156,547 Investments in equity affiliates 79,130 — 79,130 Goodwill and other intangible assets 12,500 83,569 96,069 Other assets and due from related party 367,837 81,022 448,859 Total assets $ 15,628,270 $ 1,410,715 $ 17,038,985 Liabilities: Debt obligations $ 13,195,120 $ 305,442 $ 13,500,562 Allowance for loss-sharing obligations — 57,168 57,168 Other liabilities and due to related parties 299,559 109,817 409,376 Total liabilities $ 13,494,679 $ 472,427 $ 13,967,106 December 31, 2020115Year Ended December 31, 2023 2022 2021 Origination Data: Structured Business Bridge: Multifamily $ 415,330 $ 5,468,222 $ 9,101,139 SFR 524,060 613,819 415,501 939,390 6,082,041 9,516,640 Mezzanine / Preferred Equity 43,953 69,606 203,875 Total new loan originations $ 983,343 $ 6,151,647 $ 9,720,515 Number of Loans Originated 150 318 422 SFR Commitments $ 1,150,687 $ 1,086,833 $ 760,448 Loan runoff $ 3,354,055 $ 3,818,554 $ 2,516,771 Agency Business Origination Volumes by Investor: Fannie Mae $ 3,773,532 $ 2,919,566 $ 3,389,312 Freddie Mac 756,827 1,353,001 1,016,142 Private Label 299,934 217,542 1,436,853 FHA 257,199 188,394 430,320 SFR - Fixed Rate 19,328 89,683 136,931 Total $ 5,106,820 $ 4,768,186 $ 6,409,558 Total loan commitment volume $ 5,207,148 $ 5,146,718 $ 6,347,752 Agency Business Loan Sales Data: Fannie Mae $ 3,469,340 $ 3,139,414 $ 3,675,763 Freddie Mac 715,530 1,456,595 1,081,702 Private Label 441,319 515,086 985,094 FHA 240,079 241,457 480,275 SFR - Fixed Rate 22,931 86,071 192,335 Total $ 4,889,199 $ 5,438,623 $ 6,415,169 Sales margin (fee-based services as a % of loan sales) (1) 1.48 % 1.34 % 1.92 % MSR rate (MSR income as a % of loan commitments) 1.34 % 1.35 % 2.05 %
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
Schedule IV — Loans and other Lending Investments
DECEMBER 31, 2020
($ in thousands)
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| Carrying | |
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| | | | Payment | | Maturity | | Rate | | | | | Face | | Carrying | | Delinquent | |||
Type | | Location | | Terms (1) | | Date (2) | | Index (3) | | Prior Liens | | Amount (4) | | Amount (5) | | Interest | ||||
Bridge Loans: |
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Bridge loans in excess of 3% of carrying amount of total loans: |
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Multifamily |
| Various |
| IO / PI |
| 2021 ‑ 2022 |
| LIBOR + 2.60% ‑ 5.00 | % | $ | — | | $ | 445,600 | | $ | 443,068 | | $ | — |
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| Floor 0.25% ‑ 2.38 | % | | | | | | | | | | | |
Bridge loans less than 3% of carrying amount of total loans(6): |
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Multifamily |
| Various |
| IO / PI |
| 2021 ‑ 2023 |
| LIBOR + 0.00% ‑ 12.72 | % |
| — | |
| 3,693,706 | |
| 3,666,306 | |
| — |
| | | | | | |
| Floor 0.25% ‑ 2.75 | % | | | | | | | | | | | |
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| Fixed 9.00% ‑ 11.00 | % | | | | | | | | | | | |
Land |
| Various |
| IO |
| 2021 ‑ 2025 |
| LIBOR + 4.00% ‑ 6.00 | % |
| — | |
| 189,613 | |
| 111,734 | |
| — |
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| Floor 0.15% ‑ 1.66 | % | | | | | | | | | | | |
| | | | | | | | Fixed 0.00% ‑ 11.64 | % | | | | | | | | | | | |
Healthcare |
| Various |
| IO / PI |
| 2021 ‑ 2022 |
| LIBOR + 4.00% ‑ 11.60 | % |
| — | |
| 186,694 | |
| 182,412 | |
| — |
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| Floor 1.12% ‑ 2.63 | % | | | | | | | | | | | |
Hotel |
| Various |
| IO |
| 2022 |
| LIBOR + 1.45% ‑ 6.75 | % |
| — | |
| 177,000 | |
| 148,824 | |
| — |
| | | | | | |
| Floor 0.75 | % | | | | | | | | | | | |
Office |
| Various |
| IO / PI |
| 2021 ‑ 2022 |
| LIBOR + 3.10% ‑ 8.00 | % |
| — | |
| 123,227 | |
| 121,611 | |
| — |
| | | | | | |
| Floor 0.24% ‑ 1.24 | % | | | | | | | | | | | |
Single‑Family Rental |
| Various |
| IO |
| 2021 ‑ 2024 |
| LIBOR + 4.00% ‑ 7.50 | % |
| — | |
| 88,089 | |
| 84,085 | |
| — |
| | | | | | | | Floor 0.50% ‑ 2.25 | % | | | | | | | | | | | |
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| Fixed 10.00% ‑ 12.00 | % | | | | | | | | | | | |
Student Housing | | Various | | IO / PI | | 2021 | | LIBOR + 4.00% ‑ 5.00 | % | | — | | | 71,500 | | | 70,752 | | | — |
| | | | | | | | Floor 1.23% ‑ 2.38 | % | | | | | | | | | | | |
Retail |
| Various |
| IO / PI |
| 2021 ‑ 2024 |
| LIBOR + 3.50% ‑ 4.95 | % |
| — | |
| 33,500 | |
| 23,028 | |
| — |
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| Floor 1.00% ‑ 2.50 | % | | | | | | | | | | | |
Self Storage |
| MA |
| IO |
| 2021 |
| LIBOR + 3.90 | % |
| — | |
| 13,580 | |
| 13,578 | |
| — |
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| Floor 1.23 | % | | | | | | | | | | | |
Total Bridge Loans less than 3% of carrying amount of total loans |
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| — | |
| 4,576,909 | |
| 4,422,330 | |
| — |
Total Bridge Loans |
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| — | |
| 5,022,509 | |
| 4,865,398 | |
| — |
Mezzanine Loans: |
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| |
|
| |
|
| |
|
| |
|
|
Mezzanine loans less than 3% of carrying amount of total loans (6): |
|
|
|
|
|
|
|
| |
|
| |
|
| |
|
| |
|
|
Multifamily |
| Various |
| IO / PI |
| 2021 ‑ 2030 |
| LIBOR + 3.85% ‑ 4.75 | % |
| 410,307 | |
| 95,832 | |
| 90,312 | |
| — |
|
| | | | | | | Floor 1.00% ‑ 1.25 | % |
| | | | | | | | | | |
|
| | | | | | | Fixed 5.00% ‑ 12.00 | % |
| | | | | | | | | | |
Land |
| Various |
| IO |
| 2021 - 2022 |
| LIBOR + 6.00 | % |
| — | |
| 48,832 | |
| 48,750 | |
| — |
| | | | | | | | Floor 1.66 | % | | | | | | | | | | | |
| | | | | | | | Fixed 0.00 | % | | | | | | | | | | | |
Retail |
| Various |
| IO / PI |
| 2024 |
| LIBOR + 3.50 | % |
| 30,389 | |
| 9,578 | |
| 6,083 | |
| — |
|
| | | | | | | Floor 1.00 | % | | | | | | | | | | | |
|
| | | | | | | Fixed 12.00 | % |
| | | | | | | | | | |
Office |
| MA |
| IO |
| 2028 |
| Fixed 9.00 | % |
| 60,000 | |
| 5,000 | |
| 4,783 | |
| — |
Total Mezzanine Loans |
|
|
|
|
|
|
|
| |
| 500,696 | |
| 159,242 | |
| 149,928 | |
| — |
Preferred Equity Investments: |
|
|
|
|
|
|
|
| |
|
| |
|
| |
|
| |
|
|
Preferred equity investments less than 3% of carrying amount of total loans (6): |
|
|
|
|
|
|
|
| |
|
| |
|
| |
|
| |
|
|
Multifamily |
| Various |
| IO / PI |
| 2022 ‑ 2029 |
| Fixed 3.00% ‑ 14.00 | % |
| 797,753 | |
| 182,949 | |
| 172,163 | |
| — |
Student Housing |
| AZ |
| IO |
| 2021 |
| Fixed 12.00 | % |
| 143,000 | |
| 23,500 | |
| 20,069 | |
| — |
Office |
| Various |
| IO |
| 2024 ‑ 2027 |
| Fixed 8.00% ‑ 15.00 | % |
| 9,562 | |
| 8,679 | |
| 2,421 | |
| — |
Land |
| TX |
| IO |
| 2023 |
| Fixed 12.00 | % |
| — | |
| 8,100 | |
| 7,835 | |
| — |
Commercial |
| NY |
| IO |
| 2021 |
| Fixed 6.00 | % |
| 29,792 | |
| 1,700 | |
| — | |
| — |
Total Preferred Equity Investments | |
|
|
|
|
|
|
| | | 980,107 | |
| 224,928 | |
| 202,488 | |
| — |
Other Loans: | |
|
|
|
|
|
|
| | |
| |
|
| |
|
| |
|
|
Other loans less than 3% of carrying amount of total loans (6): | |
|
|
|
|
|
|
| | |
| |
|
| |
|
| |
|
|
Single‑Family Rental | | Various |
| IO / PI |
| 2024 ‑ 2029 |
| Fixed 4.40% ‑ 5.90 | % |
| — | |
| 68,403 | |
| 68,054 | |
| — |
| | | | | | | | | | | — | |
| 68,403 | |
| 68,054 | |
| — |
Total Loans |
|
|
|
|
|
|
|
| | $ | 1,480,803 | | $ | 5,475,082 | | $ | 5,285,868 | | $ | — |
December 31, 2023 | ||||||||||||||||||||
Key Servicing Metrics for Agency Business: | Servicing Portfolio UPB | Wtd. Avg. Servicing Fee Rate (basis points) | Wtd. Avg. Life of Portfolio (years) | |||||||||||||||||
Fannie Mae | $ | 21,264,578 | 47.4 | 7.4 | ||||||||||||||||
Freddie Mac | 5,181,933 | 24.0 | 8.5 | |||||||||||||||||
Private Label | 2,510,449 | 19.5 | 6.7 | |||||||||||||||||
FHA | 1,359,624 | 14.4 | 19.2 | |||||||||||||||||
Bridge | 379,425 | 10.9 | 3.2 | |||||||||||||||||
SFR - Fixed Rate | 287,446 | 20.1 | 5.1 | |||||||||||||||||
Total | $ | 30,983,455 | 39.1 | 8.0 | ||||||||||||||||
December 31, 2022 | ||||||||||||||||||||
Fannie Mae | $ | 19,038,124 | 50.2 | 8.0 | ||||||||||||||||
Freddie Mac | 5,153,207 | 25.0 | 9.0 | |||||||||||||||||
Private Label | 2,074,859 | 18.5 | 7.6 | |||||||||||||||||
FHA | 1,155,893 | 14.9 | 19.5 | |||||||||||||||||
Bridge | 301,182 | 12.5 | 1.7 | |||||||||||||||||
SFR - Fixed Rate | 274,764 | 19.8 | 6.0 | |||||||||||||||||
Total | $ | 27,998,029 | 41.1 | 8.6 |
116
Type | Location | Periodic Payment Terms (1) | Maturity Date (2) | Interest Pay Rate Index (3) | Prior Liens | Face Amount (4) | Carrying Amount (5) | Carrying Amount Subject to Delinquent Interest | ||||||||||||||||||||||||||||||||||||||||||
Bridge Loans: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Bridge loans less than 3% of carrying amount of total loans (6): | ||||||||||||||||||||||||||||||||||||||||||||||||||
Multifamily | Various | IO / PI | 2024 - 2026 | SOFR+ 0.00% to 5.75% | $ | — | $ | 10,789,936 | $ | 10,665,252 | $ | — | ||||||||||||||||||||||||||||||||||||||
SOFR Floor 0.10% to 5.36% | ||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed 3.00% to 12.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||
Single‑Family Rental | Various | IO / PI | 2024 - 2026 | SOFR+ 0.00% to 6.25% | — | 1,316,803 | 1,301,522 | — | ||||||||||||||||||||||||||||||||||||||||||
SOFR Floor 0.10% to 5.36% | ||||||||||||||||||||||||||||||||||||||||||||||||||
Land | CA | IO | 2025 | SOFR+ 4.00% | — | 118,595 | 40,726 | — | ||||||||||||||||||||||||||||||||||||||||||
SOFR Floor 0.15% | ||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed 0.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||
Office | NY | IO | 2024 | SOFR+ 3.50% | — | 35,410 | 35,268 | — | ||||||||||||||||||||||||||||||||||||||||||
Retail | CT | IO | 2024 | SOFR+ 3.50% | — | 12,500 | 10,127 | — | ||||||||||||||||||||||||||||||||||||||||||
SOFR Floor 1.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total Bridge Loans less than 3% of carrying amount of total loans | — | 12,273,244 | 12,052,895 | — | ||||||||||||||||||||||||||||||||||||||||||||||
Total Bridge Loans | — | 12,273,244 | 12,052,895 | — | ||||||||||||||||||||||||||||||||||||||||||||||
Mezzanine Loans: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Mezzanine loans less than 3% of carrying amount of total loans (6): | ||||||||||||||||||||||||||||||||||||||||||||||||||
Multifamily | Various | IO / PI | 2024 - 2034 | Fixed 3.50% to 14.00% | 1,203,261 | 232,104 | 223,008 | — | ||||||||||||||||||||||||||||||||||||||||||
Land | CA | IO | 2024 | Fixed 0.00% | — | 9,333 | 9,333 | — | ||||||||||||||||||||||||||||||||||||||||||
Retail | Various | IO | 2024 | SOFR+ 3.50% | — | 7,020 | 6,100 | — | ||||||||||||||||||||||||||||||||||||||||||
SOFR Floor 1.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed 12.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total Mezzanine Loans | 1,203,261 | 248,457 | 238,441 | — | ||||||||||||||||||||||||||||||||||||||||||||||
Preferred Equity Investments: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred equity investments less than 3% of carrying amount of total loans (6): | ||||||||||||||||||||||||||||||||||||||||||||||||||
Multifamily | Various | IO / PI | 2024 - 2033 | Fixed 0.00% to 16.00% | 439,722 | 75,941 | 71,020 | — | ||||||||||||||||||||||||||||||||||||||||||
Land | TX | IO | 2024 - 2025 | Fixed 0.00% | — | 8,100 | 7,910 | — | ||||||||||||||||||||||||||||||||||||||||||
Commercial | NY | IO | 2024 | Fixed 6.00% | 29,792 | 1,700 | — | — | ||||||||||||||||||||||||||||||||||||||||||
Total Preferred Equity Investments | 469,514 | 85,741 | 78,930 | — | ||||||||||||||||||||||||||||||||||||||||||||||
Other Loans: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other loans less than 3% of carrying amount of total loans (6): | ||||||||||||||||||||||||||||||||||||||||||||||||||
Single‑Family Rental | Various | IO / PI | 2024 - 2025 | SOFR + 3.98% to 4.90% | — | 7,564 | 7,540 | — | ||||||||||||||||||||||||||||||||||||||||||
SOFR Floor 0.25% | ||||||||||||||||||||||||||||||||||||||||||||||||||
— | 7,564 | 7,540 | — | |||||||||||||||||||||||||||||||||||||||||||||||
Total Loans | $ | 1,672,775 | $ | 12,615,006 | $ | 12,377,806 | $ | — |
DECEMBER 31, 2020
Year Ended December 31, | |||||||||||||||||
2023 | 2022 | 2021 | |||||||||||||||
Balance at beginning of year | $ | 14,254,674 | $ | 11,981,048 | $ | 5,285,868 | |||||||||||
Additions during period: | |||||||||||||||||
New loan originations | 983,343 | 6,151,647 | 9,720,515 | ||||||||||||||
Funding of unfunded loan commitments (1) | 835,484 | 381,831 | 200,694 | ||||||||||||||
Accretion of unearned revenue | 41,125 | 37,468 | 25,618 | ||||||||||||||
Recoveries of reserves | 4,776 | 1,500 | 24,315 | ||||||||||||||
Loan charge‑offs | — | — | 10,773 | ||||||||||||||
Deductions during period: | |||||||||||||||||
Loan payoffs and paydowns | (3,354,055) | (3,818,554) | (2,516,771) | ||||||||||||||
Unfunded loan commitments (1) | (260,789) | (376,404) | (623,639) | ||||||||||||||
Unearned revenue and costs | (13,772) | (51,808) | (69,528) | ||||||||||||||
Reclassification to real estate owned | (39,400) | (31,200) | (880) | ||||||||||||||
Provision for loan losses | (73,580) | (20,818) | — | ||||||||||||||
Reclassification to held-for-sale loans | — | (36) | (65,144) | ||||||||||||||
Use of loan charge‑offs | — | — | (10,773) | ||||||||||||||
Balance at end of year | $ | 12,377,806 | $ | 14,254,674 | $ | 11,981,048 |
| | | | | | | | | |
| | Year Ended December 31, | |||||||
|
| 2020 |
| 2019 |
| 2018 | |||
Balance at beginning of year | | $ | 4,189,960 | | $ | 3,200,145 | | $ | 2,579,127 |
Additions during period: | |
|
| |
|
| |
|
|
New loan originations | |
| 2,433,679 | |
| 2,831,822 | |
| 1,658,732 |
Loan charge‑offs | |
| — | |
| — | |
| 3,173 |
Funding of unfunded loan commitments (1) | |
| 133,244 | |
| 65,531 | |
| 21,027 |
Accretion of unearned revenue | |
| 13,590 | |
| 12,083 | |
| 9,278 |
Recoveries of reserves | |
| 75 | |
| — | |
| 2,527 |
Deductions during period: | |
|
| |
|
| |
|
|
Loan payoffs and paydowns | |
| (1,243,694) | |
| (1,753,693) | |
| (957,163) |
Unfunded loan commitments (1) | |
| (127,758) | |
| (147,392) | |
| (88,617) |
Use of loan charge‑offs | |
| — | |
| — | |
| (3,173) |
Provision for loan losses | |
| (77,335) | |
| — | |
| (13,986) |
Unearned revenue and costs | |
| (35,893) | |
| (18,536) | |
| (10,780) |
Balance at end of year | | $ | 5,285,868 | | $ | 4,189,960 | | $ | 3,200,145 |
117
2023.
118
Report of Independent Registered Public Accounting Firm
Arbor Realty Trust, Inc. and Subsidiaries
119
120
(b) Exhibits.
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121
Exhibit # | Description | Form | Exhibit # | Filing Date | ||||||||||||||||||||||
3.1 | S-11 | 3.1 | 11/13/2003 | |||||||||||||||||||||||
3.2 | 10-Q | 3.2 | 8/7/2007 | |||||||||||||||||||||||
3.3 | S-11 | 3.2 | 11/13/2003 | |||||||||||||||||||||||
3.4 | 8-A | 3.7 | 6/2/2021 | |||||||||||||||||||||||
3.5 | 8-A | 3.5 | 8/11/2021 | |||||||||||||||||||||||
3.6 | 8-A | 3.6 | 10/12/2021 | |||||||||||||||||||||||
3.7 | 8-K | 3.2 | 2/7/2022 | |||||||||||||||||||||||
3.8 | 8-K | 3.1 | 7/15/2016 | |||||||||||||||||||||||
3.9 | 10-K | 3.9 | 2/17/2023 | |||||||||||||||||||||||
4.1 | S-11/A | 12/31/2003 | ||||||||||||||||||||||||
4.2 | 8-A | 4.1 | 6/2/2021 | |||||||||||||||||||||||
4.3 | 8-A | 4.1 | 8/11/2021 | |||||||||||||||||||||||
4.4 | 8-A | 4.1 | 10/12/2021 | |||||||||||||||||||||||
4.5 | 8-K | 4.1 | 5/4/2021 | |||||||||||||||||||||||
4.6 | 8-K | 4.1 | 8/5/2022 | |||||||||||||||||||||||
4.7 | ||||||||||||||||||||||||||
4.8 | 10-K | 4.13 | 2/14/2020 | |||||||||||||||||||||||
4.9 | ||||||||||||||||||||||||||
4.10 | 8-K | 4.1 | 10/11/2022 | |||||||||||||||||||||||
4.11 | ||||||||||||||||||||||||||
10.1 | 8-K | 10.3 | 7/15/2016 | |||||||||||||||||||||||
10.2 | S-11 | 10.6 | 11/13/2003 | |||||||||||||||||||||||
10.3 | S-11 | 10.9 | 11/13/2003 | |||||||||||||||||||||||
10.4 | S-11 | 10.10 | 11/13/2003 | |||||||||||||||||||||||
10.5 | 10-Q | 10.30 | 5/11/2009 |
117
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In accordance with Item 601(b)(4)(iii)(A) of Regulation S-K, copies of certain instruments defining the rights of holders of our long-term debt are not filed herewith. Pursuant to this regulation, we hereby agree to furnish a copy of any such instrument to the SEC upon request.
122
EXHIBIT INDEX
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123
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ARBOR REALTY TRUST, INC. | |||||||||||
By: |
| /s/ Ivan Kaufman | |||||||||
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| Ivan Kaufman | ||||||||
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| Chief Executive Officer |
Signature | Title | Date | ||||||||||||
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/s/ Ivan Kaufman
| Chairman of the Board of Directors, Chief Executive Officer and President (Principal Executive Officer) | February | ||||||||||||
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/s/ Paul Elenio
| Chief Financial Officer (Principal Financial and Accounting Officer) | February | ||||||||||||
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/s/ Kenneth J. Bacon | Director | February | ||||||||||||
Kenneth J. Bacon | ||||||||||||||
February 20, 2024 | ||||||||||||||
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/s/ Edward Farrell
| Director | February | ||||||||||||
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/s/ William C. Green | Director | February 20, 2024 | ||||||||||||
William C. Green | ||||||||||||||
/s/ Melvin F. Lazar | Director | February 20, 2024 | ||||||||||||
Melvin F. Lazar | ||||||||||||||
/s/ Joseph Martello
| Director | February | ||||||||||||
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/s/ Elliot Schwartz
| Director | February | ||||||||||||
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/s/ Carrie Wilkens | February 20, 2024 | |||||||||||||
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