ABR - Earnings call transcript Q1 2021 | Arbor Realty Trust, Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the First Quarter 2021 Arbor Realty Trust Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Also be advised that today’s conference is being recorded. [Operator instructions] And I would now like to turn the call over to your speaker today Mr. Officer. Financial Chief Elenio, Paul Please go ahead.

Paul Elenio

the Chris. Okay. Kaufman, With welcome This me morning, quarter our discuss and on the is and good the Thank morning, March quarterly Ivan XXXX. will Trust. President you, to Realty earnings everyone, Arbor Chief the Officer. today And call XX, for results call we ended for Executive

these business, our not to earnings to actual statements expectations to of speak beliefs, Arbor's results are in These publicly over statements, forward-looking obligation of undue assumptions and are Ivan only our cautioned or condition unanticipated update, Before statements the Factors differ you cause that us. the future Kaufman. subject I'll Listeners this performance, I that of in which plans our as in statements today. materially to to on these reports. forward-looking deemed Arbor forward-looking detailed reliance of place from revise the statements need expectations assumed inform to and these and information account call to President our future begin, including reflect be after that could financial objectives. we events, occurrences no undertakes liquidity events. results turn now today and to made taking forward-looking may or uncertainties, Arbor's, on or available call are circumstances or CEO, SEC about risks are statements currently possible of based into operations, information results

Ivan Kaufman

significant we in today everyone tremendous quarter outstanding to build in call. Paul, on very thanks results, success excited created today's momentum continuing had first to the you, to us our joining we've on and XXXX. Thank and the for discuss We're

would our almost years we As last in extremely able space success in the a this we've to for REIT XXXX. confident that in row, five that we're be continue call, we been and top-performing on mentioned

to ability operating returns every our quarter to in our first continue results consistently Our market deliver, cycle, demonstrate unique exceptional diverse through outsized platform.

was XXXX join of club dividend XX One of of straight dividend elite to the goals our for years primary growth.

at ratio we further focusing are our consecutive To forward. growth single-family our GSE XXth increasing the lowest our streams We asset sheet, well on platform about industry. can't fourth classes, to this years, that structures, how I in dividend increase share trade a in every goal enough, positioned generate highlight very pleased substantial and cycle. of to consistently I dividend liability operating payout and quarterly and areas business, continue success, our program this first products that to we significant to strong private-label stable in of the we in built rental incredible in diverse believe a This all dividend all accomplished quarter. income the is last the would income business, why our and diversified maintain our we have viable very dividends $X.XX continuing increase having should streams while right importance peer the XX group. and stress the active market with quarter multiple is by that are and going talk success an many earnings platform, We the like premium to with a balance experienced agency to

of very our per detail, our produced As dividend first earnings again of financial a an incredible We results which well quarter share, payout in were remarkable. once accomplishment ratio excess of Paul around current and distributable will discuss just in representing more XX%. $X.XX is

our to have franchise is streams many dividend created. the of to and Our results exceptional a we value diversified generate ability testament consistently the our and increase true income

the agency platform, benefits strong label able over single-family and a platform diverse sheet and space. We our the out out this we of fees with we many significant structures. platform low multifamily as of performance business, with multifamily our GSE little continue forward, phenomenal products. quality delinquencies considerable a the forbearances margins the market leader superior in is portfolios, few lending bridge, record from business made going areas benefits the produce lending program, be space and these scale and strong single-family increased as and premier growing ago, believe a from to success. made and progress a focused including is reoccurring rental originations growth are income future with private opportunities extremely our benefits our distributable that in our position of and build-to-rent commitment big to as growth balance unique combined a Strong realize business. our portfolio earnings extremely enormous permanent positioned as a significant produces from for to of to very in year size execution We our being growth significant strong, in our puts in and rental build us continue A as servicing from continued contributions in are liability to platform, well substantial And committed well to versatile credit and residential pipeline We and our platform.

capabilities. of of the our capacity leveraging closed off $X significant our additional with pipeline our pleased single-family about pipeline segment optimistic well over originations first the are of growth product very our and billion growth deals in very in we of have opportunity million currently the in this quarter, seeing business. and In existing $XXX by we of are us making rental We

with platform. the will growth of transactions. to about and loans on us single-family believe build-to-rent a permanent our provides stream the leader are confident Again, the and also further significant originate in are opportunities this yet very which another are platform diversifying same bridge in business excited construction, be space, this driver we we income We the lending

product agency in originated which We in agency is up and quarter $X.XX our including from for our first GSE our significant label momentum growth platform significant as a last originations our and private well. quarter and increased to experience have year. billion in for volumes seeing robust confidence we the to produce $XXX in billion, Equally the agency private continue ability business including also of pipeline billion $X.X balance in label are private the very year. giving as We first label $X.X important, loans in agency million us the of

Our and as GSE long-dated platform streams predictable requires continues limited produces flow. capital offer value and generate a agency premium cash it significant annual significant income to

and addition generates mostly the sale agency from cash has growing greatly generate on continue to which earnings to This GSE million portfolio, annually greatly will billion XX% deal we we last prepayment-protected in year and our to tremendous reoccurring $XXX which revenues a our is million $XX $XX.X to as origination and expectations. exceeded our We're margins gain as growth up our is grown the flow platform from in our -- which continue servicing servicing business has year. strong year in Additionally, is balance flow contribute increased seeing with combined and last in dividends. our new sheet XX%

the we billion book balance have to future loan of the robust We interest on grow our these and pipeline, servicing and have unprecedented loan quarter will in new a going grown sheet originations a very And us book dividends. XX% run earnings year. balance significantly also our growth our for of This our $X create of very to which substantial sheet $X.X the will net allow income volumes already billion further in balance forward. meaningfully increasing pipeline rate agency revenues long-dated GSE increase origination loans importantly, future first and

to Additionally, debt million five us last in raising quarter week, to dividends. we X% are unsecured our future our and to extremely earnings pipeline million be loans successful in of first and common which will very the issuing and fund year growing $XXX investments $XXX of of equity allow accretive

once is we grow this future to deployed, million capital in fully to for we every additional capital estimate an be $X.XX fact, share. prices, $X.XX $XXX annual annual our rate. of dividend $X.XX these we raise a and it to will estimate at we will $X.XX And earnings earnings accretive the by In

one portfolio high-quality structures. and our emphasis of business key of is sheet financing of the liability the area appropriate balance with Another strategies

resilient continues as class very multifamily are feature. match we fund attractive replenishment been million with $XXX important The which in also sheet. securitization us successful to with cycles lever and of asset more bridge positioned in we utilization X.X-year our and market once our terms we closing XX% again We non-recourse, importantly, with a balance stress provide assets quarter a have and this outperform long-term contributed And were favorable rock-solid In capital first assets non are leader have in very been our asset higher all It and book another returns very CLO outstanding all dated over our appropriately cycle other is portfolio totaling have mark-to-market, on senior the these quarter enhanced our us well. that and by the significantly very in vehicles an in leverage, flexibility to the XXth our consistently year success had is greatly well classes generate pricing, exceptional and most in the including loans. CLO summary, to to to XX% XXXX. in has reduced of continued allowing of

we best-performing a are with portfolio, call Paul I pipeline, our turn We diverse business the preserve results. now peers platform servicing us operating financial that sheet success. strong in will many confident balance with rental income, is take continued growing will our for well space. centric of continue to providing significant And we and us business street the that being multifamily lines result, a to single-family positions have our a over as to exceptionally and platform future sizable residential this long-term mortgage through company versatile you that and outperform

Paul Elenio

Okay. Ivan. Thanks

into share quarter quarter mentioned, rate we had for year our first allowed the and $XX Ivan results $X.XX distributable ROEs run approximately $X.XX up of or exceptional another per from have XX% the first high million of share. for translated once earnings producing last quarter XX% dividend first to the us again increase quarter. was These industry a which As to

on venture business from results residential generate and many sales our servicing substantial credit to gain aspects business Our benefit our our including agency income strong that in the model produce margins, our income quality to continue on capital, growth joint greatly levered portfolio. sheet long-dated from the we diverse our banking of significant and substantial and balance platforms continue returns financial of

investment quarter we quarter, $X.XX distributable was with share than we a first higher As first one our into our on at entering the we banking portion this a of key of million future did We interest which additional allocated in principles recorded first our to million expected the for investment an another of contributed in tax-effected this approximately a us income residential earlier, a approximately The agreement due $XX mainly accounted premium in approximately from of from the phenomenal which mentioned business. ownership $XX our purchase income to quarter. quarter earnings. from basis income to to

of our income result interest on of from against a The investment as on this receive earnings business declining emphasize transaction, to income all X% this hedge As acts we specifically natural diversity balances. income basis. streams continues rates will of approximately our and from go-forward the escrow this a a

business volumes While and forward believe continue year. for trend balance as we are to going earnings started margins could contribute this to continue and the in some our seeing will expected, in the in March the of we this distributable normalization which investment

quarter affected we recession, in and to the earnings as well first was This our adjusted were on $XX Our book the a a roughly reserves well the back approximately significant as retail of adding excess by asset of XX have little at basis. that $XX.XX a is $XX.XX share as the that due very our have approximately most million dividend. value last as first capital noncash raise up largely quarter, March to the from generated hospitality. And reminder X% been general exposure quarter such we tax-affected CECL share classes a in

these exposure to total is or million approximately our portfolio. Our X% asset classes $XXX of

adjusted at of this impact We believe feel we a confidence that not that current our have the reserved book accurately also for will value material further gives recession. assets us reflects impairment adequately these necessary the point which be and do

fourth and quarter MSR quarter. loans X.XX% the in from In first business sales agency the results to in at our recorded in quarter. originated the agency approximately in GSE mortgage the to loans recorded The X.XX% on quarter from million X.XX% we Looking an margins our also billion in first million uptick private representing of billion to first our average loan billion $X.X seen GSE the in was rights $X.XX committed sales in up loan first mentioned, quarter. Ivan last X.XX% product related we've quarter. new of as we compared $XXX of originating servicing business And around $XX an of rate income the $X.X label

Our average will of and servicing another servicing continue quarter basis million at grew or from This weighted an an annuity generate year. approximately last a March up estimated $XX the of nine gross years. to same of $XX.X X% is a portfolio million remaining time XX forward to with points XX% XX also $XXX annually this life fee of going portfolio predictable which annual income on around basis billion

$X.X for have loans certain the to yield both Additionally quarters. maintenance million fourth and prepayment provisions was approximately related fees quarter first that

continue growth, since book, several low also collections which requests outstanding. handful around GSE the portfolio Loans had agency quality months. for few of extremely growing have we've related slightly believe of delinquent the billion the We billion through XX% $X and portfolio $X.X quarter our operation, numbers, had of our agency see borrowers to portfolio. advances Freddie of $X.X trends servicing very our book in loan result these of to business outstanding reflects originations. as our new also a March. low We over billion of X.XX% than forbearance our lending the positive only is we strength unrecovered forbearances forbearance we as actually our first our material in GSE substantial sheet forbearance balance no January, And to which less billion have $XX.X and on down new and in represent we our X.X% of numbers in loans In last very Fannie a extremely

up in due The was the to billion X.X%, Overall, these runoff growth was yield average X.X% in net as XX quarter The of runoff investments billion on had to December fourth in quarter, decreased acceleration fourth compared this of net in spot to rates X.XX% on for And X.XX% relatively the and average was yield from to investment facilities quarter quarter. yield for first the this mainly due compared XX. the X.XX% XX, on the as to fees approximately assets core runoff, overall fourth financing to quarter, and the and a for again, $X.X in facilities due as billion X.XX% this first both X.XX% cost new quarters. quarter up The fees debt the runoff debt with quarter. mainly originations around XX, quarter portfolio December to at core compression of from debt balance of due all-in spreads to our an billion quarter, on interest average interest our for to X.XX% in mostly average core debt early billion decreased quarter. to originations rates the mainly to at growth acceleration first to the $X.X and at And our was quarter. flat December to at cost X.XX% at first the our to during early March to for interest due runoff were of mainly originations Our less $X.X X.XX% higher X.XX% our an of funds for $X.X in XX, the compared debt significant XX. investments from more on $X.X compared last Total cost spreads March quarter, compared at from higher compared again our first from we the X.XX% in the quarter, approximately last assets experienced approximately March billion at fourth our fourth all-in to portfolio. $X.X compared quarter new balance

fourth Lastly, debt-to-equity in from core was including down quarter overall the perpetual preferreds and XX a for at stock preferred the basis XX% trust and in excluding on as lending the average our the back prepared our at spot ratio quarter assets you our first XX% on any equity, take ratio it the to was and both XX, to now to completes CECL this March this time. flat turn for may reserves. general remarks And morning. December operator questions X.XX I'll Chris? That leverage

Operator

Securities. Thank you. [Operator from question Instructions] JMP Delaney first And comes from Steve our

Steve Delaney

the accurate. morning they're report and I and our dividend model air from Ivan strong a records Paul. especially hike morning, XX. Good to overall think this and Congrats I on back and looked latest at

$X.XX of the bit quite four quarter now over accomplishment. your years, just so since an dividend You've a in fourth paid doubled the XXXX, so

far But structured understand, update As your tell currently. could the you. us of SFR compare in at traditional just do March could enthusiasm Thank as it's I your an returns Q&A the on initiative, XX? bridge give the these that how and program on the you books the loan in to Ivan, outstanding terms business BTWOR I on large carried in loans And how are product? --

Ivan Kaufman

we is relationship like personally So, about the and think three the What components. phenomenal I'm space dominating build-to-rent and on business in space that we has active it is intent building. a space

through balance one more or sheet construction agencies. a those they the loan through mid-teens, we us is leverage very kind which transitioning then give to multifamily of loans our program private same those of is pricing a beginning complicated but it much the returns. story. element, We're them The real loan of sometimes like is little the the and generally bridge benefit And exit real look label initial a phase. the to and returns that's just and capability. that's And to first requires The bit low entrepreneurial a the

free we a to get apple each the bite product we call and streams. it creates with long-dated revenue what So

That's The that competitive little of what other done to I'm rate scattered market that or and the a sites, loans. well. year-to-date. in aspects bit and going what's balance sheet you floating Paul are loans we've rate doing as more what's pipeline, just active fairly to on the on fixed a transition to in we're Relative

Paul Elenio

the Yes. been think well. extraordinary accomplished Sure. what I we've for Steve as And compliments, thanks has

business. As of balance the the as numbers pieces the several out, far kind land different of on got this where sheet Ivan laid as we've and pieces

as have We business of permanent the a side know. you

a Some of this we'll go bit which some business quarter that's for we and sale that that carry will business will because and where yet market that build-to-rent balance private like we're the sold have individual of label as for big securitization the we of agency the bridge The and a kind loans permanent but side CLO the rest the the sheet. out that or is has. in and on been That rate got inventory our being rate swapping you've hasn't a fixed variable did then little of a structured loans had through loans. our business. will it's sales And kind on of into pooling securitization go. of end agency the the up that business It

funded. $XXX and sheet permanent being deals of at said execution rate. only about variable we is comprised we've build-to-rent that in done million Keep been and in $XX our balance million about all $XXX is, business million has So have of sitting build-to-rent that though, about of mind funded bridge, that's where which we're

that's we will structured sheet portfolio to that about we've and to to unfunded the it continue on the as $XXX balance filings So side. but add those our we advances, disclosed million in fund committed there's

Steve DeLaney

– terms million that's And increase label least originations. or $XXX what in an quarter we private in the it. of – Got the saw in at

single rental those family rate lines. of some are fixed Now

Ivan Kaufman

our a soft the – little bit originate, agency, private non-fixed label where And of we're the is label, agency – are from may more the there a just the you appetite going of some a it see it's rate And aware bridge. originations people agencies the loans. we good at it franchise you're first this it pocket be lead particular benefits in it unique we were the originate, way fully matter of so we originations holistically. is sense just it and Overall, that's what segment. of whether do more in those in No a to the quite of that's bridge. be on cover, quarter. be look are which We private you'll at It's whether not the look other go No. company of And because what our whether overall the be makes the whether depending the matter into. run or as one

Steve DeLaney

Understood.

Paul Elenio

and the for $X.X the And to give quarter and balance billion agency, numbers just we quarter. sheet, transactions the Steve, that, overall to label private overall – some between of the this did

time back go which if last pre-pandemic, billion. was did we this year to in If about you remember, the quarter, largely you first $X

So we're over pre-pandemic. up last XX% year's numbers

been has growth pretty this So exceptional.

Steve DeLaney

Ivan. GSEs billion We're working thing year – the $XX looking call caps on $XX final One than are – lower of in it's but awkward, I the but early billion. kind lower on with we multifamily

when to But the put and was these You – aggregate second he by billion about. to these this the thinking, as do through pretty Mae, could year, label they wanted half half you quarter, did billion so another more know we in second I'm I first place, this. this label blew $X talking you it opportunity play seem into transaction? firm focused going in of versus collaborator did and for down necessarily multifamily CMBS Is But not wanted into the totally private a see that when year know the we of them affordable. $XX.X second what private he the billion get that I'm over. $XX.X Fannie on

Ivan Kaufman

a I actually label. and on Without backed The January. really And strong anticipated. off than were lot it private started mean, March result when while was of of first was our lighter a as quarter that's February and the agencies gaining question. much strong, we momentum a a

it all will see be business an level greater part We And that we don't backing and our which think off. I XXXX. know cap of a also the in we've of having you we considerable play We for see affordability big. issues. very agencies So gained see momentum active of

So we story. our is a our private going be great part label think to of

Steve DeLaney

both the you for comments. Thank

Ivan Kaufman

Steve. Thanks

Operator

next Cooperman Lee our And Family from from Office. question Omega comes

Lee Cooperman

you. me But, Thank that you the questioner. just in I've complement see let prior supplement have I to on managed add the say been I decade. multiple with product complements to any last IPO that hesitate movement the the involved you heavily company. the very into for I to to actually lines, the CLOs issue.

think very keeps the company. in What What running I worries What you should night? about? up? I been masterful you've at worry you

Ivan Kaufman

when thing a dilution a one didn't any we're the that But reflect that worry the of suffer want in only Clearly, lot always I going you're dislocation through growing just companies to one on occurred. financial about. our business, to that there's space

Lee Cooperman

You that… actually stock your back bought

Ivan Kaufman

did. We We getting rescue did. were Most people capital.

as And And long had loved I liability So, to with credit have not possible. back equity. want would are on bought eye to our always stock. keep you guess structures. in I on to a right those you'll eye structures more and would as manage have quality, we mean I because it keep Lee, issue go liquidity as our liability we on Those good an critical, back looking as downturn. an having have We the liquidity. we dislocations. place would through much have

we ability portfolio focus liability focus our our liquidity. our and our on we significantly, manage to structures on us most which on we is for will focus outstanding. And So,

that much too we So, focus those on are we the don't so sleep. things lose

Lee Cooperman

I Well, my lose congratulations Realty. not sleep because performance. on Stay because your well. of prospect Arbor

Paul Elenio

Stay Lee. healthy. Thanks,

Ivan Kaufman

Take Lee. care. Thanks,

Operator

ahead. comes Please Arestia next JPMorgan. our question from And go Charlie from

Charlie Arestia

your taking We've quality Hi. what issues COVID chasing Hi, a flight the in lot Ivan to about margin. Good love and a unknowns lately seeing for competition sort multifamily you're with there around a of Paul. would for heard retail. Obviously by of out on properties and a broader office view capital your post Arbor to get hospitality multifamily morning. and of lot today. being recently But, to is more of relevant there questions Thanks and the after industrial assets. core most known terms Ivan wide

If recently your more have of you're maybe deploying capital than gotten ago. peers or seeing two quarter that as pick more up a comfortable competition

Ivan Kaufman

fierce. than I being lot mean now it a pre And competition aggressive. who back and greater hurt actually of the was The are even is it's got very people pandemic.

there's a side. trying lot pricing, question And no do of debt on a on compression make the our but to up that there's we have So, franchise.

we of have We quarter in so get bulk ahead. And kind do up momentum. did lot quarter to a first and fourth of the

our the and But, it. about So, structures we liability mistake we're credit. our It's back sheet, going eye on end make precisely I the going do we aggressive no loans to to our of on put that some try loans now. and fees books. environment extraordinarily very pick things for spreads an we're in work agency and focus reduce on into and right turn risk good them We'll on place. have as one can is keep the And other much on as up the think an of very, we our balance on

Charlie Arestia

the in bit of guys week typically and like agency little of what you a can Understood. us Obviously have first for you came here volumes where back down pretty that. visibility originations quarter. year And pipeline sitting earth give to if Curious, a looks might we're given sense into the May. the shake look out this good

all your we wondering how numbers. XXXX annual to compare an but might think XXXX year, COVID realize was volumes pre I unusual certainly that

Ivan Kaufman

to a earlier, their again. while They're agencies they little a off did share. back had market aggressive get January mentioned I price they as the So, some great starting and lost

a numbers. let little think comment I'll a So, to going I Paul good it's on be year. pretty the bit

We agencies segment that business, our of widen when seeing label segment pick little growth will private up. out are a in bit then which our the

last we'll probably The the fairly fill some year. and did mix of between you little want different may we holistic numbers? a consistently agency to basis, do side. think I in from label a be the what Paul, private between

Paul Elenio

Yeah, sure.

agencies the some a I'll Ivan Charlie in our were So but has big. April, light really, you question really even and pipeline February, good and color. gotten March give said And as into little

We private we now and So in million some private did agency private of that. label billion with around label, right just context in and pipeline $X April, did XXX about have -- we agency label. a over $XXX about but

And starting a million of as seen. off we We There that it's have sheet balance our up in business another of you've again. balance off. has $XXX product. ran of of dramatically pick deals And to run little did did month $XXX about sheet million grown couple the So was larger. April, a

year the laid $XXX it million. different at the a the was guess We've will right, we'll look on a products. out. we bit this and maybe growth volume, multiple is But have volume because I than on but pockets, change, sheet on the Ivan's little more certainly total label the origination about less, way we exactly little more last agency, mix will were And side. we the multiple balance higher be got bit private So I way think

laser-focused balance sheet firm it. in loans runoff the sheet We've retention. can. product. recaptured much bridge than look is APL a more been have the the been the two So as into on lines. runoff. doing multifamily late. quarters, of we've And on to of way go on we're portfolio business our in balance ourselves side And and And last that's ability the runoff on prided And of XX% that's the we all agency we've again areas side, as as mostly we of we Ivan mentioned, at always recapturing different unknown the The

we So that's the the manage business. way

excited and were come will be little probably about. year. I we a we're think mix we'll different as in Ivan The around said last just right

Charlie Arestia

it. Got much both you the for Thank color. so

Operator

question And from from James. next Laws our comes Raymond Stephen

open. is line Your

Stephen Laws

I on a morning. congrats it's say Ivan. another Previous Good Hi, -- people strong like every that's quarter. run. feel quarter great

You guys to shifts? you offset, be the previous have in the think weighted decline or label do shift on track you the Ivan, a which basis comments sale we side think To other on business, the follow-up how about there? of hard on margins private margins you done a going lot is that has work. in And see gain as enough mix see mix to have private your higher on do that Fannie record a if some than that the as and changing the label I

Ivan Kaufman

So And pleased it little with have misstep. first really issues, label were what a because was -- pandemic the the hitting we And we were hardest. well-received. credit a is want didn't any private securitization nervous about we potential the always and

even back the we're better So to say expecting going to our did second really think than the that very pleased performed and to perfectly market first, us market. well. And portfolio come that I very be which execution is to is

on product with Paul we it have comfortable it can do execution another will business. we how of So line business side well. think more just we that's that but in comment feel of really side the very margin agency to on the the similar the

Paul Elenio

Yes. I from private move coming will our of little overall some on in protect mix always on to the a I Yeah. If we high the the from what better in do right. consistently. And private upside, think guided business I've on agency think depending in our Stephen margins We'll securitization. can around But our But weighted on surprises XXX.XX of don't bit swapping think blend And the great. Ivan a all we're for will XXX.XX to change a dramatically I there. it label out that's margin. to of that's market. will Could as that's think securitizations? aggregate little I low us basis. it Obviously to It been label And where a spreads. said we've another business this a change

Stephen Laws

just helpful. move-in questions That’s seen. around the And Great. higher rate, rates the two we've

how incremental is If less rates than servicing duration those return that? you what And of at? sensitive If opportunity the can How up does see life that balances? is is extend the to earn that cash would invested? give how MSRS? on higher much resi sensitive side, further is your generate that an so there? or on much it moved much so, it a on secondly, even you how First flows might you escrow return How and

Paul Elenio

Yeah.

you don't I to if take Ivan me know that? So want

Ivan Kaufman

Go ahead, Paul you take it.

Paul Elenio

Yeah.

provisions right. to is XX-year you XX to lockouts we're to and we what because that's substantially resi, as to The most think six MSRs know is about maintenance paper to doing yield XX maturity. that of prior has that generate different Stephen I months

that's There this about early. people stuff we what sticky love is this pay business. and times very are So off

to think fees. back we'll deal But to get deal it yield we I the the move if makes see be prepayment on recapture You said on maintenance. holes end there as maintenance on and you They said, sense a it being make rate and sensitive side. redo it's get also we'll for less that resi. than the somebody That rates

question of second The your part was….

Stephen Laws

spread… Escrow returns on the

Paul Elenio

Related Yes. Escrow. to

going earning where up could by may with floors right LIBOR you our But, clearly portfolio sitting yes, move with $X.X gone. the see we're increase certain But some billion know side, loans offset past That earning resi I escrow rates less were run rates with because in could in that So yes, balances if business. of be escrow And our to the hedges in a natural than see the they an clearly as on kick-in. have we're had we've substantially, not our mean that far got up. And we've escrow the in balances. they're about that you against real run-up fully fact now. in

higher about ago. of was balances rates escrow earning years when think I annually $XX million couple a number and we're That $XX our million, now. million, on million were right $X $XX

tremendous obviously run. room there's to if there rates So were expansion for

Stephen Laws

it. Thanks Color. Yes. Great. helpful. Paul. Well for comment, the that’s Appreciate

Operator

question next Jade with from Rahmani comes And our KBW.

Your is open. line

Ryan Tomasello

Good morning, for everyone. This is Tomasello Jade. Ryan on

to opportunity outlook space, that the follow-up a on that that you've lending Thanks. interesting business, that Ivan of there. any to required the there in based terms build-out like a you if business? opportunities an as but spend to in Just of think if be amount some curious, there's I nice investment there there. already out clearly know I build platform. spent SFR was the additional will of are M&A SFR more curious to support capital that you you'd And think

Ivan Kaufman

it's pretty actually initially to out integrate can totally a So actually we on conclusion into and a a separate building we it because came unit. good credit the and existing the by decisions when And most it same it our to structure. existing of and comes of aligned have unit we our group. that it and the bridge part question the dedicated And were build-out at made are structure being operational build-to-rent structure

efficiencies same we're the to the able So enormous efficiencies and origination side. on create

won't adjusted it us cost started. as We much. we that So when actually

full executives level we pretty that to we have create won't than of there that be an overhead other need which a much executive incremental on So complement much that.

them We In I acquisition terms at passed the them. opportunities really interesting. that building a moment. many saw of see We be up don't on We better would more felt acquisition opportunities few.

more a to very and our commitment executive which of talent relationships think infrastructure the pleased we're it's create I very, the with growth. our

deployed. a that because over As that billion Paul that build-to-rent fully And can takes And of mentioned earlier, XX years to ramps get it's XX up of put months pipeline that going probably out $X we we the billion almost we a think have close two the to then the deploy lot money next that take with money. even we $X months. to

in place pleased all have moment. that pretty we're we the at So the with elements

Ryan Tomasello

in next Ivan terms or there and that. for mortgage Paul our do we're JVs just coupled Thanks normalization the meaningful baseline all in reasonableness that same with in expectations? business? Just with sifting maybe for of residential page of puts here And terms Great. the on rather terms models what a stake quarters of your is the volume the few with for takes that of think the through -- so you the the then of sell-down partial over

Paul Elenio

Sure.

about as hardest on some in surprised my excess mentioned right we is commentary the of have quarter income upside single the this thing during from business every yes, because the interest. this sell-down our I every a talk quarter So of piece has we did us the quarter. But

We you public April light. companies that that some fully one yet, but have our lower all $XX of don't in if at $XX we point. compression of follow. as pretty been this margin million, There and coming million. it saw we So was the volumes probably it was expected normalization as all guys well normalize it points has and probably certainly obviously it's you in closed some

I of way is will this a $X million it of from X% the me a to us. That's anywhere a $XX they're hopefully million for look our to on normalized and that. at low us think a represents anywhere quarter that of $XX doing million high the I profit million level upside and $X from surprise in for

a a on to $X.XX a So quarter level. $X.XX normalized it's share

we little And side a be million I business. think share then driven business. for gain conservative to higher technology so good probably it it'll pretty quarter. bit direct like But in a will a think $X a the starts it's greatly lower and I We're that grows Maybe second share. retail by of maybe quarter in hopefully there. it market from $X number little of be lot. that very for the that it our and on us business, We're a big little million can quarters. that's a a in obviously consumer different We

Ryan Tomasello

I last one if can. And just question then

the the over maybe just Can And that give there to changed seven comprised you us that quarters? were unchanged NPLs credit that the on major quarter-over-quarter. Just has an reminder last the pool? Thanks. outlook quick around few anything update a noticeable that assets discuss

Paul Elenio

Sure.

in change So we haven't all a really credit. our at seen

credit balance on very In both saw agency We've and very, fact very strong. cracks few on the side. our is seen side sheet the

product deals need quite we reserve is but one we're it past is don't we've that that as also number list and right NPL fine a on I on is for. now. that a that that have think that couple there. Again, are just held that one impressive student the got the out in about health don't number work So on deals think what's We've a multi-family through reserves got And couple talked deal. we've there we care of working that And housing will of in deal.

about assets of So $X have in work down million the few really one against $XX seen these the net materially assets assets maybe a It's our in and and view. of out some even have reserves. get on deal. But but road, them one adequately of we that's we to that change don't couple of million carrying perform there's student nothing care going outlook health we're those changed. reserves housing, We're those many on We maybe confident that a reserved. a multi-family, haven't to we're the recovery have and way assets

Ryan Tomasello

questions. for the taking Thanks

Operator

and that, with this And closing Ivan for over it turn the appears remarks. are at no ahead time. I'd over line questions go further program the back to any like there to

Ivan Kaufman

It's and a multiple to what the participation. optimistic have our streams. your for participation. together great first franchise income day. a everybody's about really been Look great in forward Everybody quarter and next put and year everybody thanks Well, we've operating the quarter. We're

Operator

today's conclude This for Thank program. does you your participation.

disconnect at You time. any may

Arbor Realty Trust (ABR) 7 May 212021 Q1 Earnings call transcript