- Earnings call transcript Q3 2022

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Operator

Good morning, ladies and gentlemen, and welcome to the Third Quarter 2022 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] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to turn the call over to your speaker today, Paul Elenio, Chief Financial Officer. ahead. go Please

Paul Elenio

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

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

Ivan Kaufman

everyone call. and Thank today's to thanks for joining you, on us Paul,

everyone diverse morning's many to business peer tremendous see had as can significant else a another group. our offer this from we continues release, in you As advantages over press model quarter

a the a allowing produce right built in are to extremely cycles, lowest period, multiple our premium in right all economic income We dividend. invested as share, operating maintaining asset we payout strategically quarterly positioned current This generate by us pricing to allowed of well XX% over platform, X earnings also nearly with consistently market. lot We the us succeed XX% industry. our that again over time structures, a CLO non-recourse that thrive to unsecured class, is increase with liability a debt platform in $X.XX in diverse a non-mark-to-market with in to well all believe downturn. XXth products excess We've and highlighted are of the have growth once has result, below a representing with the to consecutive billion many this we indebtedness well that dividend representing that while increase dividend ratio and streams,

We also in currently the ability to and XXX will many our generate that short-term significant no million with with remain take market capital. a cash debt and advantage capitalized with us the around providing to opportunities superior have exist and liquidity, returns of unique maturities offensive wall

which Additionally, with is payout now. cycles, dedicated including a we we and space industry. in and dividend in us ratio experience for ourselves class depth our team, currently operate a why best our by rate the lowest dividend asset cannot our emphasize is function well the protected, the management management best-in-class of enough executive And in years the multiple our been business we allowed successfully believe that performing to several to are have

our share the of for and way capital. market my we opportunity comes foreseeable view volatile future. us for I on market this and generate location platforms dislocated continue recession as business inflation, returns Our gain in current with be superior the great a to in the to are risk core environment With to expect adjusted will

advantage positioned in the extraordinary how of this excited to believe firm about are we opportunities As downturn. will a result, what strategically take we we be

for results discuss dividend representing to in performance of current in quarterly quarter once against our distributable $X.XX of of third per a produce our will ratio well which Paul as share, excess detail, We is now remarkable. payout Turning financial around more earnings our XX%.

which clearly, on with earnings increased sustainable significantly in rate a payout for our and low escrow our positioned well uniquely net floating income And ratio Our outlook, a rising our financial our our dividend, results as benefit in as from continue will loan space the only with even environment. as one greatly our of book interest interest as has recessionary extremely to very we're companies protected rates, earnings balances.

in selective replace quality As to our spreads. been high last we very our loans call, have we with with in superior this runoff sheet our on looking got with lending, market, balance

we In the and loan fact, XX% index, cost interest the new an index. of average with over to third XXX million runoff over X,XXX rates a average during spreads average XX% a an with around loans bridge the while multifamily to experienced the quarter of of we cost around of in quarter originated million XXX XXX had around loan

average we're on result, around while a substantially a quality a loan by in points, value. spreads widen our to basis to able reduction increasing As with loan XX X%

significant have meaningful in the in level increase Additionally, in CLO our of returns resulted amount of cost replenishable these a we capital a on low have structures loans. that

is premium XXX garner agency new and on long-dated And build income. strong bridges loans we income and heavy we strong our strategy of agency allow originations billion our yields came businesses third In servicing business, our balance sheet in loans, the also a the third successfully to We've our and came quarter. into margins In focus capital. business XX%. through another part levered a on offensive we to placed in produces originations around produce liquidity multifamily position the refinanced long-dated fact, converting and averaged quarter on remain our all financed is over to again, to XX% additional GSE/Agency loans of us into our third over return XX% our preserve our quarter, and million. X.X a gain sale capitalized which critical originated loans that CLOs October's as streams. our on strategy In runoff significant of Agency runoff the

Despite Now, out we've given believe a seen current leveling the quarter quarter. third the environment, a the volume fourth in close the tenure. rate rise in can we some similar with off pipeline we as the

streams reoccurring As year capital workforce business. flow. unique million in from funded prior with the flow. million our continue new which This earnings part cash billion as our on limited XXX have platform a approximately traction is significant and In as prepayment is advantage fee is in our data significant feeds that which business. to third predictable sale values flows. commitments requires protected again, a significant and gaining transactions. increase our in strategic XXX we large the acts service increase as of market natural generated this business And sheet produces family Agency we origination quarter, mostly XX a we margins gain in our of addition generate single rental generate on housing our us we that and In have rise to deal and a offers point, committed hedge portfolio business, income in To the experiencing, escrow book cash annual nicely again, and rates focus and long and steady are we balances in balance million a based premium we loan multifamily another Agency this a significant XXX to destroying are that and of

we're billion close now it of to in processing, have we've deals we again, outsourced XXXX construction, capital in very we as love and and levered a currently environment. quarter through As and returns bridge, us deals this offers large generates succeed we X had our to-date, are pipeline opportunities. lending to returns on and strong in business well we extremely positioned In summary, another tremendous this permanent

our advantage run short-term right a earnings asset We're unique and rate. no We well of peers. through to to give that and significantly significantly call ability debt our maturities, capitalized Our protected us the invested many take very opportunities class exist the great Paul dividend confidence now turn stable financial to to putting have us dividend this position outperform will to well significant over liability creative I exceed you is with continue take in market results. a that in structures. will the in the

Paul Elenio

Ivan. you, Thank

quarter us share. distributable had quarter our translated few of or increase The on an which the dividend to increase $X.XX net ROEs onetime rates, is exceptional into recorded and interest approximately XX%, on was to million, from on Ivan rate quarter. our dividend last substantially to XXth producing quarter earnings annual due higher the ratio third escrow largely XX%, income once $X.XX again, to share our substantially mentioned, in book, the a consecutive $XX sales. million per results earnings per second earnings in with loan some our $XXX dividend a up of earnings share, we or around more our allowing balances along distributable have As floating another rate increase And to loan our run and losses of outpaced for with quarterly a one-off $X.XX quarter from

second prepared giving GSE/Agency We percentage general environment. quarter, As earnings great X.X% our model to on in quarter second strategic the overall downturn, many In some originated in sold quarter. these the our of current a this the margins business, dividends. we GSE in well and the and margin to given us the sustainability a as quality sales of GSE we margin, quarter, higher compression are the loans for billion and which loan earlier, Ivan much have our in generated as mentioned greater third sales compared advantages, FHA in offers confidence and loan X.X in X.XX% due of mainly well third rate

recorded loans last third sales, billion X.XX% of million X.X rights committed rate balance of in an income servicing quarter. MSR average We loan to of XX.X XXX sheet to quarter, also the million compared representing X.XX% excluding related mortgage of

predictable Mae forward remaining in down average continue sale annually, of portfolio activity Our annuity an XXth, as around going points, XX.X XX.X of extensive servicing servicing to of and is September from at years. portfolio, due Fannie a mostly This runoff estimated quarter to gross this due will increased fee generate portfolio relating weighted approximately million was nine XXX to last life with basis at a slightly quarter. again which income our billion

assets our at debt compared As portfolio to prepayment to continued in the benchmark approximately cost debt XX in third SOFR X.XX% of billion lending sheet XXth, all LIBOR an of index at in last year at Total certain elevated, growth. rates. fees average the the X.XX% was primarily to up index XX due rates. debt and mainly compared The $XX balance full our June these XXth, an SOFR third The quarter, core core loans growth issued last was the yield to and we million third operation, in prepayment investment increase and average to LIBOR benchmark quarter, convertible the a of quarter facilities second X.XX% compared quarter a costs of balance the full quarter, debt our funds up due for in of which in from had compared was note due approximately effect last second protection on our of the increases increases June received quarter, fees assets to all $XX.X for three this the our August. due our due rates. in provisions X.XX% September effect in quarter is to $XX to up in to rates. investments runoff, to quarter. from September to that second due around prepayment quarter from XXth, average quarter, again with in new of was the in to X.XX% XXth, cost as billion million billion X.XX%, X% $XX.X in increase significant In average billion billion result $XX.X to in balance from was our be at X.XX% The related the yield to facilities $XX.X with quarter The debt the to in billion second mostly approximately our in the

spot decreased is book. at effects due interest sheet stated loan floating rate enhancing mostly income mostly to positive XXth, quarter, spreads net of contains XXth X.XX% book this of variable rates net of rising from runoff our before, interest our we've spreads rates, the while floating XX% to up XX% our the further interest in at positive overall core quarter, and slightly last compared quarter our rates third debt in on were to balance accelerations from spreads effect as And assets as that increase. June overall Our X.XX% to loan September our rate, to early X.XX% less X.XX% due

a approximately would annual increase in a fact, rates equal, and produce X% earnings. In additional share $X.XX remaining all things

June of are run have in we effective November X% $XX now escrow is earlier, average below XXth. mentioned more our business are meaningfully will Xst, as from book. market, the which as grow $XX balance we significantly billion has sheet approximately over escrow amount is originations. These approximately levered of X CLO rate Additionally, to balances rise, of earnings on continue And of earn substantially, which from X well of that us balances million with from at million rates sheet we agency outstanding loan and up XXX almost we pricing balance debt allowed returns also earning increase to current the have will to large a predicted annually, around have billion and the we significantly annually loan lastly, as our income

As us you to unique are back to high may long-dated this Shelby? this our ability giving our remarks operator continue our now prepared earnings And any morning. the That turn take confidence model, it to to recurring have quality, the earlier, questions for mentioned future. completes generate I'll these at in to business features Iva in time.

Operator

our take JMP We'll Delaney from Instructions] Securities. [Operator first Steve question with

Steve Delaney

I shares morning, but the that are could, fact quarter, than see would I much the great another congratulate think up ABR Nice this congratulations. response. to better but says X% you I it on

in your in important We K-Series, frankly, to the I market is. about CLO what's to last the know in their bridge alternative of Q until Q-Series hadn't but business six program and just been I'm don't We're for Q, about starting that know you obviously, right dislocated you lot So, a talk Is do. you if now. think portfolio. seems hear Freddie done a an normal just the I CLO what very viable building as deal I tool couple Arbor curious, October. months. obviously, read your to about heard And But that about of got last a the to it four had shelf, and shelf? that weeks for

Ivan Kaufman

Sure.

Q-Series and Steven, again, ability And thank over an respond It comments those numbers. a because relationship for and it So to geared we've enhance towards once Seller/Servicer, the it affordability a government program to program. securitization let me years. to that, you viable evaluated the is to enjoyed your really affordability is great We're a it's their we that Freddie positive type the access the important offers think for of products. we've

that's now So, right wheelhouse.

that surprised program. in we're something it's if So, that a participant you don't be

Steve Delaney

couple CLOs, anybody of coupons on with you And to in that XX%. talking be Is with you. I to of conference, Great reinvestment of think our on your hopefully. were Paul, we're be weeks return going But to you affordable going hear. was if about that When I a capital I think jumping about you mentioned estimated you going to a reinvestment over about that was would. I relationship talking your glad at fresh with think involved in? probably your talking CLO, were Freddie figure

Paul Elenio

prior situation and up costs. can doing Yes, deals, and at unique so spreads And that meaningfully to off to are capital, levered investments happening. we're vehicles them structured what's higher two on we low XXX our are model. And this is, return getting our on in dislocation than all CLOs way exactly foresight go while we're saying running the really very What have that's those we're market our replenishable and periods. that financing we these originating we're and sure all it's know but left with we're those levered is returns but through new where moving the the that out those we I'm costs loans low way it's reimbursable gone. lock doing -- and really we've do in have the where CLOs and Steve, had And comment, and loans an XX% Ivan the spreads new exactly the greater at because have the over securitizations year, to locked

Steve Delaney

did many replenishment left How Fantastic. two And on on year. do just to months those the this two you the reinvest? or terms have that years you

Paul Elenio

me some Yes, give so let you color.

almost So, sitting of debt XX CLOs leverage. in assets we billion X our have of billion about XX% with roughly

of One replenishment comes the vehicles of out month. period this

about X.X of exclude of vehicles that assets billion about of debt comes five, and to X.X we seven if So, replenishment middle say to billion still would those billion debt staged. it's call middle that of six, X.X it, out and have, vehicle, replenishment we And three, we'll one, billion the all XXXX. I of doesn't end are until that sitting have CLO X seven vehicles. of of debt that late in replenishment, that two, of in come four, of XXXX, out CLO another

So, of vehicles, of we a room really these which helping on time is have our lots returns. and lot

Steve Delaney

fantastic. That's

you. absorbed not your quickly? as some I'm more loan? opportunity curious, as economic investment a as lender defensible Thank the final to property? analysts. one it both deal rest slowdown high you quick likely in how on turning end recession, perform the a Chapel in of, maybe to haven't just that observer to property Brooklyn that for did I'm in question. And a And XX Street the leading that thanks. of terms I Okay, recap. the Can then an developer in is of about curious I for had developer? property in Commercial you may that read I a opportunity it. just that thoughts attractiveness you feature zone. as properties at a that look when because be and on on a better and comment benefits the think also guess, type was tax that the of Is property, I an

Ivan Kaufman

be I the must done familiar course must of say, in is that unusual, which have transaction, I'm not must normal business. details which been the with and of

there's anything rent yes, area more likely am changes particular not So affordable, York a that's in project this just that occupancy New don't any regulated. affordable. but one. huge real very, anything is familiar low general, demand utility, with increases the that that's all very, very in But product, for We with I

Operator

We'll take Raymond James. our question Laws Stephen with next from

Stephen Laws

in to about to about for want stubbornly a but repayment I everyone you repayment we'll remained touch-base. but they've slow, has talked and expecting guys, high, seeing quickly which contributions been maybe number, Paul, So quick you're you what incomes income early repayment? the talk quarter?

Paul Elenio

Yes.

in remarks, prepared in last mentioned did know, in quarter, about see our as Fannie was And again, several I So $X had we fair that million Steve, this of that the a Mae penalties. my of amount quarters, had seen, book billion we that transactions. about we've a runoff over prepayment $XX runoff you earned

quarter, is guided little the with maybe that lagging, it on last I've a a a that I and There's sales that in done see right? do we some the has on more you it. volume, market much market second a on sales the that quarter and the fact come has expected than I live repayment that surprising changed one little little since really then. to bit two rates we bit work of lag think in down did and penalties, the on significantly. And to was me It had should we

are. that maybe And are importantly, to expecting binary. given where more to So, it's really down start very rates we slow

are mortgages rate I though X my X.X% to don't away, our an XX loans mean or and will rate. and average Mae goes that, mind given even about X% much X%. above we coupon yield guess, that the coupon today, a interest maintenance, X, There it because years So, right, and lag repay if a way are book were X% we're That about have And exceeding doesn't loan and we Fannie really the repayments environment. mortgages because we isn't any, X. just naturally if the has flow there's rates have do, rate today, to probably rates the of

in that we'll prepayment do November modeling yet, said book and in we But XXX after it's it very it's a to think million runoff or that, do happened got a already hasn't It know, half that, maybe but don't a maybe expect million process. not because But runoff number, and maybe on December, maybe million fees million. rates so side a on about I'm annuity. get is are XX it's to million, month, binary the I our we a rise, we small million gets month, X a XXX fees another what's and staying and are Having of our October, an X of when that, at servicing lag. because of X it's million start. course, servicing it's flip portfolio But long-dated those that things intact. the I slows happening love plus for have October And million. a did million we So, in

So, mentioned, servicing. our we'd our the other look as elevated, our numbers. I at the rates stay and escrow going, And where are is mean, substantial. remarks escrow side, prepared we are balances rather have earnings will the

a that's against hedge rising quarters. think out that's And few rates. this next over how the I So great plays

Stephen Laws

for talk You your are? your some sponsor or sponsor concentration people, on they large exposure about metrics with and quality. the and very of loans? any to frankly, helpful. maybe into looking typical portfolios, Can well lot How have That's amongst a of much Paul. work borrower? How you multiple typical loans loans Ivan, investors commentary same bridge and collateralized? do around that, continue sponsors Thanks general

Ivan Kaufman

somebody have to business. of long-term a do with the who us. one-off with We a a of to of garner in a specific number lot and sponsor, piece transactions like would loan with And We're tend going significant and generally a $XX the to million of it's a transactions to to not say $XXX traffic million do we're a unusual lender, not We loans tenure who do with generally have loan we relationship. there's number typically we have range, who to us. think borrower

of syndicated do you some all kind of friends see money, a in have it institutional have. We revealing and a So typically, operated lot of of a the big a a mixture the especially borrowers time, but where varies through could money, sponsors, lot but the types market to where that went portfolio. and they of we in the very who, wave, period a it borrowers, speaks our of family ones,

very believe, In have fact, execution access that them. I met we execute top billion details this They're sit of really bridge where a a who have with significantly, a an them, out manage loans you sponsors operators more issue we'd will good their good with they, people, well if capital. generally we our have that one close week, run tell the relationship I that, down able they're we enough on to they of and like loans, to with and of issue, sponsor of got into top to to capitalized. them specific and be on really them. They've critical. with grasp have can And with good how figure I at is a least well, to And,

in the sponsors and in that in requirements interest to-date, portfolio, knock of in repeatedly shape, immune the spoke are, you have and on manage number a of that in over have relationships rate, mean it interest and loans. estate we're kind ahead our we of about far in always real structure And real things It's our rising great we're structures and a the the have values. keep that wood provisions decrease to rebalance doesn't I how importantly, our our evaluating sponsors, of not exist environment at your nature. portfolio of so terms you lot replenishments, that of of it just how terms rate order you But in loans loans. our the years, the assets looking it's more schedule complexities estate. It's to is last

of sponsor. in with don't look to our just real keep the capability able sponsor together a all we a looked we financial and estate, And asset good at at we that's management, at commitment very potion, how, put sponsor, book to in looked a we we're one So, a and great that shape.

Stephen Laws

Appreciate Ivan the Paul. and comment,

a You day. great guys have

Operator

Shane question next from our take Rick We'll JP with Morgan.

Rick Shane

Thank is little more for And my question call cover balance bit morning. this to around taking a going morning. guys I apologize this this

things maturities One influenced to by as financed of I type Within as on your the underlying season you would side get exact describe that, and financing? we're structure that to they're or how behavior exogenous you do earnings that defaults we of realize is factors. starting what is increasingly risk sponsor time credit are of that How through debt the move so seeing the versus sort fundamentals that related issues portfolio, the don't you manage of properties? and

Ivan Kaufman

doing we're by preferred XX% things higher mezzanine, and that primarily. we're we're senior start of well And assets that recognizing that over first nature. multifamily multifamily not of oriented Let's equity, realized our maybe on the side. lender, also It's

we're qualifiers. flow the are cash a premises. are lender. And those So, Those big also basic

is, responsibilities. recourse on on as documentation, mentioned very their lacks environment many their lenders I've earlier, were in sponsor terms requirements second in lacks of The and this very and

than longer loans. this other at people XX%, at been our other and the to sponsors in very we've have anybody we where multiple We On lenders. cycles, and very default through the default business loans have relative is documentation of liability straightforward, typically top this rates unlike rates. have point, our of been that, And mild

a position. it's loans would loans, how in how manage us our we our primary say them in experience puts document So terms ask that we I of our

capability And the have and to asset. the and that. also do take experience we're manage back We any to not afraid

sponsors take an asset. on from opportunities of if love a who deep to a have there also transition We pocket is

and mean That And sponsors. always we no you're recourse them. we leverage. have right work doesn't what matter not and the assets, have a liability. the a depth, It's their the have to leverage, So we're the looking have to do. in looking we won't And when our we you we're we significantly, from great when we have out but have into remember, the manage the our capital manage we typically, just no an the assets class. to have solution run them. More with Then issues asset us issue, typically these and take how circumstances If the position. loans, have particular have the where we experience, they they have a to long-term. in leverage our distribution, they And other and of puts that's structure that's able sponsors

multifamily, highest and Our high. every by another followed view is our history in

at in interest charge, we're you the in at factor important rates. our to to which want if one very position look run. note. There's look to a you long We If downturn look help rents, further you themselves is succeed multifamily, with at the if borrowers rising

If you if default, down borrow, Then you're multifamily your borrowing a abilities close the agencies. right? with you

If for basically borrow you business. of out Freddie, then you're Fannie, can

out So a step very, very, very, very tough the very, of the borrower if wants choice. to by industry defaulting. That's

have they difficulty make either they're So, solutions. to either have bring but to for going more to capital if different decisions us capital, come

asset forward up solutions skill in very a We're issues, down look work of in to a to And to and his how And So business. set manage with foremost, them, to sit well and only manage assets, bring important are capability, people asset not growth we We've our going bear. now skills to holistic with they're ahead that's been them. be book. And with our first and beefed our it in borrower, up also, portfolio. our that management, that's our where well, positioned sense. We've have. that's without management scrambling come to

this understanding market we've So of view that's game, run and borrower, we're And the bottom quarter. quarter, lot that's being there, think how we're and a we kind only solutions, in why may through well issues, the assets. we're we're yet, top the we we're not we're of And with the through business. first and manage already our the way We're to we getting where up, positioned at dealt ahead they our think where, market, of dislocation. manage managing and second on catch not into proactive, of we playing we're

Rick Shane

context. very Look, I it's And the a response. helpful appreciate

about their in think to that sponsors with to the both or are come about through. some and into deflation less hear the of recalibration more issues likely think pressure of, I things coincident to run in and where rent of of rates, cap more forma terms pro rents, terms starting starting one is, increases we're

we're that's like we go just this, exactly through it and sounds same way. all to understand as the it other thing So trying approaching you're the

Ivan Kaufman

and to which Yes, months as let's relative. had very number. general had you've five I period rents by But increased that, months XX%. ago to also ago, what's on a important cap is say, time, rates from think during of back definitely going note increase XX that four XX% to XX We've

went change we So, are kind a up, to was we of to cap the we've that exit X a way we be and exactly going if you're at into that under We've quite really take up as increases, been catch time. that at been of to a But you're large XX bit, going to of not to at -- that recession, rates had that see to rent rates. look look going extent, growth not expect, the outlook for we you've and all. any circumstances kind in growth. started offset starting forward, little a months kind do started cap And rent rates rank right, ago, our some about

flat a that's fine. right? So we're to up little not If bit, expecting you're rent growth,

a than bills expecting are everybody We different can't else, pay some them their time. we're people to and in expect going economic pay on vacancy recession because

on number a being record of multifamily units delivered the have You also side.

you're concessions see to on the coming So, board. some on product going new

headwinds the are can't got to them we're to you those facing, and all them. that ignore manage you So,

prepared for our And we're outlook. that. So that's

Operator

from with next Jade question We'll KBW. Rahmani our take

Jade Rahmani

GSE you confirm, volumes expecting trend to on both Arbor a flattish are for lending wanted and transaction the in bridge side Just the side?

Ivan Kaufman

So reasonable with two of factors on on the go rates level people is yield GSE I and to, where opportunities, the think, cap do appropriately, the side, the curve. and all is the rates way if tenure has adjust the cap and buy can tenure the to

I think you'll purchase activity, decent see we'll that. some see

we'll range did year what maybe So of be little next I in year, I we going would say down. think forward this a the and

be aggressive. of to when that's terms the to want see In I we we activity, going get dictated think bridge bottom, where

dictate when close either a And be And point the people quarter first be to it's we on very opportunity maybe it and borrowers do think where to active is. we're returns that the back also sure quarter resume SOFR will people and where agency SOFR the very where if we're We when we'll in that of time. the borrow returns and which not level. are bridge think there's recapitalization have is between fairly working amount first or depends be our on use XX% the extraordinary XX%, going an recap get quarter, of bottom, business, second may second and then effectively. it provide to will depending that also is and because, we works quarter. attractive adjusted of We to on and would composition that, going I a the But if to think at where into the to can in capital aggressive that be good we capital, well. get extremely

overcorrect. is point a will market We can a the of I be patient It's now. seeing patience think think to market lot now. that months. continue been and data and where We not right with the has little where time We've lagging feel really a patients think wait we the last the aggressive. quarter six first in We'll real adjusted. really we be we're get So, continue the to to right there'll

Paul Elenio

term which comments, these it's great. is tie Paul the side, Jade, which on are to longer

business, I did XXX. least a know a we And we But XX agency a runoff we're in in at materially XX bridge that great. little which at in in. million SOFR October business, we similarly, and our XX% it was think talked we're maybe sheet it's had I did. That's I which But match October, in comes our about to our of help the a million it's your did model. think X still XX be in projecting short-term. in billion quarter. where agency in mentioned looking Just bit we business. runoff it's had we think the balance on prepared runoff, right we the with We later, and to of I million the one October model XXX about in billion. another in little don't we we third Maybe now into bit to short-term going that fundings come think remarks. we our was We and you in with did the can And different, as our commentary just a we're did recaptured thinking new not million originations.

are that's expecting we but fourth in for quarter think new So, volume. be to runoff million, XXX a at We're yet, million sure XXX originations that in the whether million, least we portfolio flat equal the is going not to short-term. XXX be to the the the

Jade Rahmani

any I in was mortgage you're opportunities wondering if REIT also, the space? Thanks. and seeing M&A commercial

Ivan Kaufman

there I will be going there's be, squeeze. think to I think a liquidity

aggressive ago, was nine got cycle. market a were share. think in people I off that When the backing I that mistake. even gain was late originations real months people a And an to think on thinking were opportunity really, really the we

in nuts. management rent months. never about have skills. changes I different have real of everybody and CLOs cap It's think a call. We're else. view could at some that And growth. think a We've definitely up. spoke don't now a managed we in capitulation, people about rate before period a it for looking Everybody's us on asset opportunities. bit it be nine interesting had There's of there speaking than I values think been lot on we've catch been I And like this a we're of

think I occur. that will So,

extraordinarily months. trouble think been people going be to I who nine aggressive there's have plenty of the with the last

Operator

from take Love with question our Piper Crispin next [Operator Instructions] We'll Sandler.

Crispin Love

you quarter. Was just back multifamily last borrowers demand for a well there? bridge primarily conscious as originations that cap off for telegraph pull meaningfully borrowers? currently and Or drop there your was quarter, costs this think given debt rates just and I in from decision

Ivan Kaufman

decision significant earlier one, were in an It Number we reasons. marketplace. for of required on was we conscious we to year, because in valuations the that a pipeline close change actually based a had the didn't multitude adjustment a

a did not occurred. that values. We the unusual an thing the reflect and was had garnered significant and a that in pipeline, interest change So, rates change

So that facts was but was conscious numbers it are decision. like didn't don't immediate. That underwriting The borrowers lie, facts. a

grids pipeline. now a of and underwriting So, our our pricing to the very we were had reflect We exist aggressive market. fallout changing in lot in

liquidity. on market not not our more based the maintaining where the going. two those conscious where our factors. were we were and very putting where the was saw market eye liquidity was We managing out competitors So, market, step third the of and we out the our knowing towards and saw And an of market money liquidity

So that direction. really led our

our In with in addition, better you on these this structured. have replace have at in way with leverage it can place, that inventory is to look existing and it's the At we we are runoff, capital. structures low company liability time point when

capital is don't cost higher. the now, we So of to go especially when have right out necessity

So to where today. if we Company you take the be direction was all of exactly those it are a strategic factors,

Crispin Love

a if quality, speak credit really view? you it And one your of be the credit the non-performing just the loans looks in from alliance. But technically stable And or bit no on point little elsewhere quality, to credit that whether just then can that you're any quarter, to in the or change you be outlook in now? of portfolio, see from in starting items, just right away that considering issues, a earlier believe your recession to your bridge you're it especially we're multifamily space, we're middle comments

Ivan Kaufman

new there's when costs potentially have expire. capital to system. in caps I to debt think place I the caps to access And going think and in the be stress old Yes, for are put pay people going to higher

there's loans, XXX now of basis have has for we and who close of existing borrower strike think a he with met had dollars lot a XX between points. prices caps I in caps on billion a right mentioned I benefit I to his place.

And are going where on it's that's we little And lower which So, wears he's a in that is are a it of we point to put the to equity We when be. into are going But and time point capital leak going carrying in happen, in could to the between structure could bring some fix well be in all rates to a for more our in I people gradually. position, convert And priority have to the to there. where When now. that's time. time and started equity point convert that, treasury either lot XX% that. the with borrowers will lower to year very happen campaign X% for the a very think of there's where place to of other aggressive depends or it'll that in That's have the there's floating in yield fairly But it curve put were borrowers access, a a loans be business. off, rate when And effective be going over fixed lower costs stress to the book protection from the protection rate right? thankful in cycle. reposition the of that to caps protected, at agency place, and out equity. time that are table. attract lot capital put buy caps, somehow and going be the to So checks

on So, liquidity if that manage how there's we dip where day look convert comes a by have. go, portfolio access based our at, borrowers will where treasuries, to curve to the the treasuries think it some of in and our yield I and day

Operator

that the any no questions further or I time. Ivan will additional It turn this now closing have for program remarks. at we to appears over back Kaufman

Ivan Kaufman

everybody expect Well, results environments. of quarter. system, was And we're And act delivered let different very Company kind do the have we pleased thanking conclude we but has to multiple And differently once by in have. it in the streams me revenue their again, participation. a for that stress remarkable different the

and great a So great Take weekend everybody, care. have have a day.

Paul Elenio

care Take everyone.

Operator

teleconference. That Thank participation. concludes for today's you your

You may now disconnect.

Arbor Realty Trust (ABR) 4 Nov 222022 Q3 Earnings call transcript