Arbor Realty Trust Inc. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>Arbor Realty Trust Inc. filed its Q1 2024 10-Q, detailing financial positions including various preferred stock series and variable interest entities.</b>

AI Summary

ARBOR REALTY TRUST INC (ABR-PF) filed a Quarterly Report (10-Q) with the SEC on May 3, 2024. Arbor Realty Trust Inc. filed a 10-Q report for the period ending March 31, 2024. The filing covers the first quarter of 2024. Key financial data points such as common stock, preferred stock, additional paid-in capital, retained earnings, and noncontrolling interest are detailed for both March 31, 2024, and December 31, 2023. Specific preferred stock series (Series D, E, F) and their associated cumulative redeemable preferred stock details are provided. The report includes information on variable interest entities and their primary beneficiaries as of March 31, 2024, and December 31, 2023.

Why It Matters

For investors and stakeholders tracking ARBOR REALTY TRUST INC, this filing contains several important signals. This 10-Q filing provides a detailed snapshot of Arbor Realty Trust's financial health and capital structure at the end of the first quarter of 2024, crucial for investors assessing the company's stability and performance. The specific breakdown of preferred stock series and their terms, along with information on variable interest entities, offers insight into the company's complex financial arrangements and potential risks or opportunities.

Risk Assessment

Risk Level: medium — ARBOR REALTY TRUST INC shows moderate risk based on this filing. The filing details various preferred stock series and variable interest entities, indicating a complex financial structure that could introduce operational or financial risks if not managed effectively.

Analyst Insight

Investors should review the detailed breakdown of preferred stock obligations and variable interest entity structures to understand potential financial exposures and strategic implications for Arbor Realty Trust.

Key Numbers

• 2024-03-31 — Period End Date (CONFORMED PERIOD OF REPORT)
• 2024-05-03 — Filing Date (FILED AS OF DATE)
• 6.375% — Series D Preferred Stock Rate (abr:SeriesDCumulativeRedeemablePreferredStock6.375PercentMember)
• 6.25% — Series E Preferred Stock Rate (abr:SeriesECumulativeRedeemablePreferredStock6.25PercentMember)
• 6.25% — Series F Preferred Stock Rate (abr:SeriesFCumulativeRedeemablePreferredStock6.25PercentMember)

Key Players & Entities

• ARBOR REALTY TRUST INC (company) — FILER
• 0001253986 (company) — CENTRAL INDEX KEY
• MD (company) — STATE OF INCORPORATION
• NY (company) — STATE
• 333 EARLE OVINGTON BOULEVARD (company) — STREET 1
• UNIONDALE (company) — CITY
• 2024-03-31 (date) — CONFORMED PERIOD OF REPORT
• 2024-05-03 (date) — FILED AS OF DATE

FAQ

Key Dates

• 2024-03-31: Quarter End Date — End of the reporting period for the 10-Q filing.
• 2024-05-03: Filing Date — Date the 10-Q report was officially filed with the SEC.

Glossary

10-Q

A quarterly report required by the U.S. Securities and Exchange Commission (SEC). (Provides a comprehensive overview of a company's financial performance during a specific quarter.)

Preferred Stock

Stock that has priority over common stock in terms of dividends and claims on assets. (Indicates a significant component of Arbor Realty Trust's capital structure and potential dividend obligations.)

Key Financial Figures

• $0.01 — ich registered Common Stock, par value $0.01 per share ABR New York Stock Exchange

Filing Documents

• abr-20240331.htm (10-Q) — 2977KB
• exhibit101thirdamendedandr.htm (EX-10.1) — 68KB
• abr-03312024exx311.htm (EX-31.1) — 10KB
• abr-03312024exx312.htm (EX-31.2) — 10KB
• abr-03312024exx32.htm (EX-32) — 8KB
• 0001628280-24-020155.txt (&nbsp;) — 18455KB
• abr-20240331.xsd (EX-101.SCH) — 126KB
• abr-20240331_cal.xml (EX-101.CAL) — 117KB
• abr-20240331_def.xml (EX-101.DEF) — 776KB
• abr-20240331_lab.xml (EX-101.LAB) — 1156KB
• abr-20240331_pre.xml (EX-101.PRE) — 931KB
• abr-20240331_htm.xml (XML) — 4009KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited) 2 Consolidated Balance Sheets 2 Consolidated Statements of Income 3 Consolidated Statements of Changes in Equity 4 Consolidated Statements of Cash Flows 5

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 7

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 42

Quantitative and Qualitative Disclosures about Market Risk

Item 3. Quantitative and Qualitative Disclosures about Market Risk 52

Controls and Procedures

Item 4. Controls and Procedures 53

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 53

Risk Factors

Item 1A. Risk Factors 53

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 54

Exhibits

Item 6. Exhibits 55

Signatures

Signatures 56 Table of Contents

Forward-Looking Statements

Forward-Looking Statements The information contained in this quarterly report on Form 10-Q is not a complete description of our business or the risks associated with an investment in Arbor Realty Trust, Inc. We urge you to carefully review and consider the various disclosures in this report, as well as information in our annual report on Form 10-K for the year ended December 31, 2023 (the "2023 Annual Report") filed with the Securities and Exchange Commission ("SEC") on February 20, 2024 and in our other reports and filings with the SEC. This report contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to, among other things, the operating performance of our investments and financing needs. We use words such as "anticipate," "expect," "believe," "intend," "should," "could," "will," "may" and similar expressions to identify forward-looking statements, although not all forward-looking statements include these words. Forward-looking statements are based on certain assumptions, discuss future expectations, describe future plans and strategies, contain projections of results of operations or of financial condition or state other forward-looking information. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. These forward-looking statements involve risks, uncertainties and other factors that may cause our actual results in future periods to differ materially from forecasted results. Factors that could have a material adverse effect on our operations and future prospects include, but are not limited to, changes in economic, macroeconomic and geopolitical conditions generally, and the real estate market specifically; adverse changes in our status with government-sponsored enterprises affecting our ability to originate loans through such programs; changes in interest rates; the quality and size of the investment

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements ARBOR REALTY TRUST, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ($ in thousands, except share and per share data) March 31, 2024 December 31, 2023 (Unaudited) Assets: Cash and cash equivalents $ 908,049 $ 928,974 Restricted cash 546,643 608,233 Loans and investments, net (allowance for credit losses of $ 211,942 and $ 195,664 ) 12,001,544 12,377,806 Loans held-for-sale, net 322,875 551,707 Capitalized mortgage servicing rights, net 385,520 391,254 Securities held-to-maturity, net (allowance for credit losses of $ 7,597 and $ 6,256 ) 155,413 155,279 Investments in equity affiliates 90,244 79,303 Due from related party 104,365 64,421 Goodwill and other intangible assets 90,205 91,378 Other assets 499,998 490,281 Total assets $ 15,104,856 $ 15,738,636 Liabilities and Equity: Credit and repurchase facilities $ 2,913,483 $ 3,237,827 Securitized debt 6,691,958 6,935,010 Senior unsecured notes 1,335,013 1,333,968 Convertible senior unsecured notes 283,776 283,118 Junior subordinated notes to subsidiary trust issuing preferred securities 144,096 143,896 Due to related party 14,159 13,799 Due to borrowers 95,807 121,707 Allowance for loss-sharing obligations 72,790 71,634 Other liabilities 319,466 343,072 Total liabilities 11,870,548 12,484,031 Commitments and contingencies (Note 13) 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 shares 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 - 189,452,116 and 188,505,264 shares issued and outstanding 1,895 1,885 Additional paid-in capital 2,372,336 2,367,188 Retained earnings 91,770 115,216 Total Arbor Realty Trust, Inc. stockholde

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1 — Description of Business Arbor Realty Trust, Inc. ("we," "us," or "our") is a Maryland corporation formed in 2003. We are a nationwide real estate investment trust ("REIT") and direct lender, providing loan origination and servicing for commercial real estate assets. We operate through two business segments: our Structured Loan Origination and Investment Business, or "Structured Business," and our Agency Loan Origination and Servicing Business, or "Agency Business." Through our Structured Business, we invest in a diversified portfolio of structured finance assets in the multifamily, single-family rental ("SFR") and commercial real estate markets, primarily consisting of bridge loans, in addition to mezzanine loans, junior participating interests in first mortgages and preferred and direct equity. We also invest in real estate-related joint ventures and may directly acquire real property and invest in real estate-related notes and certain mortgage-related securities. Through our Agency Business, we originate, sell and service a range of multifamily finance products through the Federal National Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie Mac," and together with Fannie Mae, the government-sponsored enterprises, or "GSEs"), the Government National Mortgage Association ("Ginnie Mae"), Federal Housing Authority ("FHA") and the U.S. Department of Housing and Urban Development (together with Ginnie Mae and FHA, "HUD"). We retain the servicing rights and asset management responsibilities on substantially all loans we originate and sell under the GSE and HUD programs. We are an approved Fannie Mae Delegated Underwriting and Servicing ("DUS") lender nationally, a Freddie Mac Multifamily Conventional Loan lender, seller/servicer in New York, New Jersey and Connecticut, a Freddie Mac affordable, manufactured housing, senior housing and small balance loan ("SBL") l

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Recently Issued Accounting Pronouncements In March 2024, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2024-01, Compensation – Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards, effective in the first quarter of 2025. We currently do not have any transactions that fall under the scope of this ASU; therefore, the adoption is not expected to have an impact on our consolidated financial statements. Significant Accounting Policies See Item 8 – Financial Statements and Supplementary Data in our 2023 Annual Report for a description of our significant accounting policies. There have been no significant changes to our significant accounting policies since December 31, 2023. Note 3 — Loans and Investments Our Structured Business loan and investment portfolio consists of ($ in thousands): March 31, 2024 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) $ 11,866,289 97 % 698 8.11 % 11.4 0 % 81 % Mezzanine loans 260,414 2 % 55 7.87 % 53.3 49 % 82 % Preferred equity investments 117,431 1 % 26 5.09 % 57.9 54 % 78 % SFR permanent loans 5,728 < 1 % 2 9.94 % 12.8 0 % 53 % Total UPB 12,249,862 100 % 781 8.07 % 12.8 2 % 81 % Allowance for credit losses ( 211,942 ) Unearned revenue ( 36,376 ) Loans and investments, net $ 12,001,544 December 31, 2023 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 % Total UPB 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 ________________________ (1) "Weighted Average Pay Rate" is

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Concentration of Credit Risk We are subject to concentration risk in that, at both March 31, 2024 and December 31, 2023, the UPB related to 31 loans with five different borrowers represented 11 % of total assets. During the three months ended March 31, 2024 and the year ended December 31, 2023, no single loan or investment represented more than 10% of our total assets and no single investor group generated over 10% of our revenue. See Note 17 for details on our concentration of related party loans and investments. We assign a credit risk rating of pass, pass/watch, special mention, substandard or doubtful to each loan and investment, with a pass rating being the lowest risk and a doubtful rating being the highest risk. Each credit risk rating has benchmark guidelines that pertain to debt-service coverage ratios, LTV ratios, borrower strength, asset quality, and funded cash reserves. Other factors such as guarantees, market strength, and remaining loan term and borrower equity are also reviewed and factored into determining the credit risk rating assigned to each loan. This metric provides a helpful snapshot of portfolio quality and credit risk. All portfolio assets are subject to, at a minimum, a thorough quarterly financial evaluation in which historical operating performance and forward-looking projections are reviewed, however, we maintain a higher level of scrutiny and focus on loans that we consider "high risk" and that possess deteriorating credit quality. Generally speaking, given our typical loan profile, risk ratings of pass, pass/watch and special mention suggest that we expect the loan to make both principal and interest payments according to the contractual terms of the loan agreement. A risk rating of substandard indicates we anticipate the loan may require a modification of some kind. A risk rating of doubtful indicates we expect the loan to underperform over its term, and there could be loss

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