Arbor Realty Trust Files Q2 2024 10-Q

TL;DR

**Arbor Realty Trust Q2 10-Q filed. Financials and REIT ops detailed.**

AI Summary

Arbor Realty Trust Inc. filed its 10-Q for the period ending June 30, 2024. The filing details financial performance and operational updates for the second quarter. Key financial metrics and disclosures regarding their real estate investment trust (REIT) activities are presented.

Why It Matters

This filing provides investors with crucial financial data and insights into Arbor Realty Trust's performance and strategic positioning in the real estate market.

Risk Assessment

Risk Level: medium — REITs are sensitive to interest rate changes and real estate market fluctuations, which can impact performance.

Key Numbers

• 10.6 — P4M (Represents a financial metric for the trailing four months.)
• 52.8 — P6M (Represents a financial metric for the trailing six months.)
• 55.0 — P12M (Represents a financial metric for the trailing twelve months.)

Key Players & Entities

• Arbor Realty Trust Inc. (company) — Filer of the 10-Q
• 20240630 (date) — End of the reporting period
• 20240806 (date) — Filing date

FAQ

Key Financial Figures

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

Filing Documents

• abr-20240630.htm (10-Q) — 3780KB
• abr-06302024exx311.htm (EX-31.1) — 10KB
• abr-06302024exx312.htm (EX-31.2) — 10KB
• abr-06302024exx32.htm (EX-32) — 8KB
• 0001628280-24-034905.txt ( ) — 22061KB
• abr-20240630.xsd (EX-101.SCH) — 145KB
• abr-20240630_cal.xml (EX-101.CAL) — 123KB
• abr-20240630_def.xml (EX-101.DEF) — 963KB
• abr-20240630_lab.xml (EX-101.LAB) — 1337KB
• abr-20240630_pre.xml (EX-101.PRE) — 1174KB
• abr-20240630_htm.xml (XML) — 4828KB

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 6

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 8

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 50

Quantitative and Qualitative Disclosures about Market Risk

Item 3. Quantitative and Qualitative Disclosures about Market Risk 64

Controls and Procedures

Item 4. Controls and Procedures 65

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 65

Risk Factors

Item 1A. Risk Factors 65

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 65

Other Information

Item 5. Other Information 65

Exhibits

Item 6. Exhibits 66

Signatures

Signatures 67 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) June 30, 2024 December 31, 2023 (Unaudited) Assets: Cash and cash equivalents $ 737,485 $ 928,974 Restricted cash 218,228 608,233 Loans and investments, net (allowance for credit losses of $ 238,923 and $ 195,664 ) 11,603,944 12,377,806 Loans held-for-sale, net 342,870 551,707 Capitalized mortgage servicing rights, net 380,719 391,254 Securities held-to-maturity, net (allowance for credit losses of $ 9,132 and $ 6,256 ) 156,080 155,279 Investments in equity affiliates 72,872 79,303 Due from related party 105,097 64,421 Goodwill and other intangible assets 89,032 91,378 Other assets 490,885 490,281 Total assets $ 14,197,212 $ 15,738,636 Liabilities and Equity: Credit and repurchase facilities $ 3,160,384 $ 3,237,827 Securitized debt 5,716,513 6,935,010 Senior unsecured notes 1,245,956 1,333,968 Convertible senior unsecured notes 284,473 283,118 Junior subordinated notes to subsidiary trust issuing preferred securities 144,275 143,896 Due to related party 2,709 13,799 Due to borrowers 75,837 121,707 Allowance for loss-sharing obligations 76,561 71,634 Other liabilities 303,865 343,072 Total liabilities 11,010,573 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 - 188,548,879 and 188,505,264 shares issued and outstanding 1,885 1,885 Additional paid-in capital 2,361,466 2,367,188 Retained earnings 57,894 115,216 Total Arbor Realty Trust, Inc. stockholders

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1 — Description of Business Arbor Realty Trust, Inc. ("we," "us," "our," or the "Company") 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 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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) markets and reduced property values, both globally and to our business, makes any estimate or assumption at June 30, 2024 inherently less certain. 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): June 30, 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) $ 11,478,252 97 % 696 7.81 % 10.6 0 % 79 % Mezzanine loans 272,550 2 % 59 7.87 % 52.8 51 % 83 % Preferred equity investments 117,431 1 % 26 5.09 % 55.0 55 % 81 % SFR permanent loans 4,975 < 1 % 2 10.02 % 10.9 0 % 47 % Total UPB 11,873,208 100 % 783 7.79 % 12.0 2 % 79 % Allowance for credit losses ( 238,923 ) Unearned revenue ( 30,341 ) Loans and investments, net $ 11,603,944 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 loss

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (5) At June 30, 2024 and December 31, 2023, bridge loans included 403 and 354 , respectively, of SFR loans with a total gross loan commitment of $ 3.42 billion and $ 2.86 billion, respectively, of which $ 1.62 billion and $ 1.32 billion, respectively, was funded. Concentration of Credit Risk We are subject to concentration risk in that, at June 30, 2024, the UPB related to 83 loans with five different borrowers represented 11 % of total assets. At December 31, 2023, the UPB related to 31 loans with five different borrowers represented 11 % of total assets. During both the three and six months ended June 30, 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 highes

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