Financial Data and Key Metrics Changes - The company reported distributable earnings of $57.3 million or $0.28 per share, and $0.31 per share excluding one-time realized losses from the sale of REO assets [19] - The return on equity (ROE) for the first quarter was approximately 10% [19] - The company anticipates distributable earnings guidance of $0.30 to $0.35 per quarter for 2025 [19][20] Business Line Data and Key Metrics Changes - In the balance sheet lending platform, the company originated $370 million of new bridge loans in the first quarter, with a target of $1.5 billion to $2 billion for 2025 [13] - The agency business had a slow first quarter, producing $6 million in originations and $731 million in loan sales, maintaining strong margins of 1.75% [25] - The investment portfolio grew to $11.5 billion at March 31, with an all-in yield of 7.85% [26] Market Data and Key Metrics Changes - The company experienced a significant backup in long-term rates, creating headwinds for originations [7] - The delinquency rate decreased by 20% to $654 million as of March 31 compared to $819 million at December 31 [22] - The average cost of debt decreased to approximately 6.82% at March 31 from 6.88% at December 31 [28] Company Strategy and Development Direction - The company is focused on resolving REO assets and delinquencies, viewing 2025 as a transitional year [18] - A transformational deal was announced with a $1.1 billion repurchase facility to finance assets in existing CLO vehicles, enhancing liquidity and efficiency [4][5] - The company aims to leverage the securitization market to drive higher returns on capital and increase future earnings [37] Management's Comments on Operating Environment and Future Outlook - Management noted that the current rate environment is volatile and unpredictable, impacting the ability to forecast future earnings [8] - There is optimism regarding a potential reduction in interest rates, which could positively affect agency volumes and earnings [9] - The company is actively working to reposition underperforming assets and improve occupancy and net operating income (NOI) over the next 12 to 24 months [11] Other Important Information - The company has taken back approximately $197 million of REO assets and expects to see these assets grow to between $400 million and $500 million [52] - The average balance on debt facilities was down to approximately $9.4 billion for the first quarter compared to $9.7 billion in the fourth quarter [28] Q&A Session Summary Question: What is the outlook for net growth in the Bridge portfolio in 2025? - Management expects net growth in the Bridge portfolio, targeting $1.5 billion to $2 billion in new business while managing runoff effectively [33] Question: What were the primary weaknesses in the 2022 and 2023 vintages? - Management highlighted that the multifamily sector experienced a long period of growth without corrections, leading to poor performance due to economic factors and management issues [39][41] Question: What is the current cash and liquidity situation? - The company has approximately $325 million in cash and liquidity, with plans to enhance leverage and grow liquidity through the securitization market [48][49] Question: What is the expected trajectory for NPLs and REO? - Management anticipates NPLs to decrease and REO to increase to between $400 million and $500 million, focusing on repositioning these assets [52][54] Question: What is the book value at the end of the quarter? - The book value was reported at $11.98 at the end of the quarter [76]

Financial Data and Key Metrics Changes - The company reported distributable earnings of $57.3 million or $0.28 per share, and $0.31 per share excluding one-time realized losses from the sale of two REO assets [19][12] - The return on equity (ROE) for the first quarter was approximately 10% [19] - The company anticipates distributable earnings guidance of $0.30 to $0.35 per quarter for 2025 [19][12] Business Line Data and Key Metrics Changes - The balance sheet lending platform originated $370 million in new bridge loans during the first quarter, with a target of $1.5 billion to $2 billion for 2025 [13][14] - The agency business had a slow first quarter, producing $6 million in originations and $731 million in loan sales, maintaining strong margins of 1.75% [25] - The investment portfolio grew to $11.5 billion at March 31, with an all-in yield of 7.85% [26] Market Data and Key Metrics Changes - The company experienced a significant backup in long-term rates, creating headwinds for originations [7][8] - The delinquency rate decreased by 20% to $654 million as of March 31, compared to $819 million at December 31 [22] - The average cost of debt decreased to approximately 6.82% at March 31 from 6.88% at December 31 [28] Company Strategy and Development Direction - The company is focused on resolving REO assets and delinquencies, viewing 2025 as a transitional year [18][12] - The strategy includes leveraging efficiencies in the securitization market and maintaining strong banking relationships to drive future earnings [5][7] - The company aims to reposition underperforming assets to increase occupancy and net operating income (NOI) over the next 12 to 24 months [11][12] Management's Comments on Operating Environment and Future Outlook - Management noted that the current economic environment is characterized by volatility and uncertainty, particularly regarding interest rates [8][9] - There is optimism about potential rate reductions, which could positively impact agency volumes and earnings [9][12] - The management believes that the company is well-positioned to grow earnings and dividends again in 2026 if current challenges are addressed [12][18] Other Important Information - The company has successfully modified $38 million of loans and brought $39 million of loans back to performing status [10] - The company expects REO assets to increase to between $400 million and $500 million, with plans to aggressively manage and reposition these assets [52][54] - The book value at the end of the quarter was reported at $11.98 [77] Q&A Session Summary Question: What is the outlook for the Bridge portfolio growth in 2025? - Management expects net growth in the Bridge portfolio, targeting $1.5 billion to $2 billion in new business, with runoff projected between $1.5 billion to $3 billion depending on interest rates [32][33] Question: What were the primary weaknesses in the 2022 and 2023 vintages? - Management indicated that the multifamily sector experienced a long period of growth without corrections, leading to poor performance due to rising rates, economic vacancy issues, and increased competition from inexperienced entrants [39][41] Question: What is the current liquidity situation and expectations for NPLs and REO? - The company has $325 million in cash and liquidity, with expectations for REO to rise to between $400 million and $500 million, while NPLs are projected to decrease as assets are repositioned [48][54] Question: How much of the reported income was non-cash? - The company reported $15.3 million of PIK (payment-in-kind) interest during the quarter, which is a moving number based on loan modifications and performance [66] Question: What is the company's stance on stock buybacks? - Management emphasized the importance of liquidity and will evaluate stock buybacks based on market conditions and opportunities for capital growth [78]

Core Viewpoint - Arbor Realty Trust (ABR) reported quarterly earnings of $0.28 per share, missing the Zacks Consensus Estimate of $0.35 per share, and down from $0.47 per share a year ago, indicating a -20% earnings surprise [1] Financial Performance - The company posted revenues of $240.69 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 1.45%, and down from $321.29 million year-over-year [2] - Over the last four quarters, Arbor Realty Trust has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance - Arbor Realty Trust shares have lost about 20% since the beginning of the year, compared to the S&P 500's decline of -4.7% [3] - The current consensus EPS estimate for the coming quarter is $0.34 on revenues of $241.45 million, and for the current fiscal year, it is $1.35 on revenues of $950.63 million [7] Industry Outlook - The REIT and Equity Trust industry is currently in the top 37% of over 250 Zacks industries, indicating that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

Financial Data and Key Metrics Changes - The company reported distributable earnings of $57.3 million or $0.28 per share, and $0.31 per share excluding one-time realized losses from the sale of two REO assets [19] - The return on equity (ROE) for the first quarter was approximately 10% [19] - The company anticipates a quarterly distributable earnings guidance of $0.30 to $0.35 for 2025 [19] Business Line Data and Key Metrics Changes - The balance sheet lending platform originated $370 million in new bridge loans during the first quarter, with a full-year guidance of $1.5 billion to $2 billion [12][13] - The agency business had a slow first quarter, producing $6 million in originations and $731 million in loan sales, maintaining strong margins of 1.75% [25] - The investment portfolio grew to $11.5 billion at March 31, with an all-in yield of 7.85% [26] Market Data and Key Metrics Changes - The company experienced a reduction in delinquencies, down 20% to $654 million at March 31 compared to $819 million at December 31 [22] - The average yield on core investments decreased to 8.15% from 8.52% due to a reduction in the average SOFR rate [26] - The overall net interest spread in core assets decreased to 1.26% from 1.44% [28] Company Strategy and Development Direction - The company is focused on resolving REO assets and delinquencies, viewing 2025 as a transitional year to set up for growth in 2026 [18] - The company plans to leverage efficiencies in the securitization market to drive higher returns on capital [6][18] - The strategy includes repositioning underperforming assets to improve occupancy and net operating income (NOI) [11] Management's Comments on Operating Environment and Future Outlook - Management noted significant uncertainty and volatility in the interest rate environment, impacting the ability to predict future performance [8] - The company expects continued challenges in the short term due to the drag on earnings from REO assets and delinquencies [12] - If interest rates decrease, it could positively impact the company's ability to convert non-interest earning assets into income-producing investments [11] Other Important Information - The company has successfully modified $38 million of loans and brought $39 million of loans back to full performance [10] - The company took back $197 million of REO assets in the first quarter, with expectations to increase REO assets to between $400 million and $500 million [52] - The company has managed to deleverage its business by 30%, reducing the leverage ratio to 2.8:1 [29] Q&A Session Summary Question: Outlook for the Bridge Loan Portfolio - Management expects net growth in the bridge loan portfolio in 2025, targeting $1.5 billion to $2 billion in new business [32][34] Question: Reasons for Poor Performance in Previous Vintages - Management attributed poor performance to a combination of market corrections, economic factors, and inexperienced management in the multifamily sector [40][42] Question: Liquidity and NPLs Expectations - The company currently has $325 million in cash and liquidity, with expectations for NPLs to decrease as they work through the REO assets [48][54] Question: Non-Cash Income and Interest - The company reported $15.3 million of non-cash interest during the quarter, which is a moving number based on loan modifications [65][66] Question: Interest Rate Environment - Management discussed the impact of interest rates on business performance, noting that lower rates could enhance earnings potential [72][74]

Loan Originations and Portfolio Performance - Loan originations totaled $605.9 million, while the fee-based servicing portfolio increased slightly to $33.48 billion[290]. - The structured loan and investment portfolio balance increased to $11.49 billion from $11.30 billion, driven by loan originations exceeding loan runoff by $325.2 million[301]. - The company originated loans totaling $747.1 million in Q1 2025, with a weighted average interest rate of 8.64%[303]. - The company experienced a decrease in loan originations and an increase in loan delinquencies due to the prolonged high interest rate environment[296]. - Delinquent loans totaled $582.5 million as of March 31, 2025, compared to $524.5 million at December 31, 2024[309]. Financial Performance - Net income attributable to common stockholders for Q1 2025 was $30.4 million, down $27.4 million (47%) from $57.9 million in Q1 2024[312]. - Interest income for Q1 2025 was $240.7 million, a decrease of $80.6 million (25%) compared to Q1 2024[312]. - Distributable earnings for Q1 2025 were $57.3 million, a decrease of 40.7% from $96.7 million in Q1 2024[359]. - The decrease in gain on sales, including fee-based services, was primarily due to a 33% decrease in loan sales volume, amounting to $354.5 million[318]. - The decrease in income from mortgage servicing rights (MSRs) was primarily due to a 31% decrease in loan commitment volume, totaling $288.8 million[319]. Interest Rates and Economic Conditions - The Federal Reserve lowered the federal funds rate three times in 2024, totaling a reduction of 100 basis points, which may continue to impact net interest income[291]. - The current high interest rate environment may lead to decreased origination volumes and increased delinquencies, potentially affecting future financial performance[350]. - The weighted average current interest pay rate for the portfolio was 6.94%, with a weighted average funding cost of 6.47%[302]. Asset Management and Debt - The company modified 21 loans with a total unpaid principal balance (UPB) of $949.8 million, with 19 borrowers investing additional capital for temporary rate relief[294]. - Credit and repurchase facilities increased by $1.22 billion, primarily due to refinancing loans from the unwind of two CLOs with a new $1.15 billion repurchase facility[304]. - Securitized debt decreased by $1.34 billion, mainly due to the unwind of CLO 14 and CLO 19 totaling $1.08 billion and paydowns on remaining securitizations of $260.1 million[304]. - Total structured debt outstanding was $9.49 billion as of March 31, 2025, with 52% or $4.98 billion not containing mark-to-market provisions[334]. Cash Flow and Liquidity - Cash flows provided by operating activities totaled $150.5 million for the three months ended March 31, 2025, driven by net cash inflows from loan sales[337]. - Cash flows used in investing activities amounted to $314.8 million, primarily due to loan originations of $733.1 million[338]. - Cash flows used in financing activities totaled $146.5 million, including $1.34 billion in payoffs on securitizations[339]. - The company had approximately $315 million in cash and liquidity as of April 29, 2025, alongside a $33.48 billion agency servicing portfolio generating $126 million annually[335]. Regulatory and Market Environment - The FHFA set 2025 Caps for Fannie Mae and Freddie Mac at $73 billion each, totaling $146 billion, an increase from 2024 Caps[300]. - The ongoing adverse economic conditions have created liquidity constraints, impacting the ability to execute investments on attractive terms[330]. - The company is subject to REIT distribution requirements, mandating at least 90% of REIT-taxable income to be distributed annually, impacting its ability to retain earnings[336].

Financial Performance - Arbor Realty Trust reported net income of $30.4 million, or $0.16 per diluted common share, for Q1 2025, down from $57.9 million, or $0.31 per diluted common share in Q1 2024[2]. - Distributable earnings for the quarter were $57.3 million, or $0.28 per diluted common share, compared to $96.7 million, or $0.47 per diluted common share in the same quarter last year[3]. - Net income attributable to common stockholders for Q1 2025 was $30,438,000, a decrease of 47.4% compared to $57,873,000 in Q1 2024[34]. - Distributable earnings for Q1 2025 were $57,327,000, down 40.7% from $96,677,000 in Q1 2024[34]. - Basic earnings per common share for Q1 2025 was $0.16, compared to $0.31 in Q1 2024, reflecting a decline of 48.4%[26]. - Diluted distributable earnings per share for Q1 2025 were $0.28, a decline of 40.4% from $0.47 in Q1 2024[34]. Dividends - The company declared a cash dividend of $0.30 per share for the quarter ended March 31, 2025[3]. - The company declared a dividend of $0.30 per share for Q1 2025, consistent with the previous quarter[31]. - The company considers distributable earnings an important measure for evaluating its ability to provide dividends to stockholders[35]. - The company aims to maintain REIT status by distributing at least 90% of its REIT-taxable income[35]. Loan and Portfolio Information - The servicing portfolio totaled approximately $33.48 billion, with servicing revenue of $25.6 million for the quarter[6]. - Agency loan originations amounted to $605.9 million, a decrease from $1.38 billion in the previous quarter[4]. - The structured loan portfolio was approximately $11.49 billion, with originations of $747.1 million and runoff of $421.9 million[3]. - The total allowance for loan losses was $240.9 million, with a net provision for loan losses of $8.4 million recorded during the quarter[11]. - Provision for credit losses (net of recoveries) was $9.075 million in Q1 2025, significantly lower than $19.118 million in Q1 2024, indicating improved credit quality[26]. - The company reported a provision for credit losses, net of $756,000 in Q1 2025, significantly lower than $14,804,000 in Q1 2024[34]. Financial Position - Total assets decreased to $13.367 billion as of March 31, 2025, from $13.491 billion at the end of 2024, a reduction of 0.9%[28]. - Total liabilities were $10.238 billion as of March 31, 2025, down from $10.339 billion at the end of 2024, a decrease of 1.0%[28]. - Cash and cash equivalents decreased to $308.842 million from $503.803 million at the end of 2024, a decline of 38.6%[28]. Interest and Borrowing - The weighted average interest rate of the loan and investment portfolio was 6.94%, compared to 6.90% at the end of the previous quarter[9]. - The average cost of borrowings for Q1 2025 was 6.96%, down from 7.10% in Q4 2024[15]. - Interest income for Q1 2025 was $240.693 million, a decrease of 25.1% from $321.292 million in Q1 2024[26]. Share Information - The weighted average shares outstanding for diluted shares decreased to 206.862 million in Q1 2025 from 222.926 million in Q1 2024[26]. - The diluted weighted average shares outstanding increased to 206,862,320 in Q1 2025 from 205,511,529 in Q1 2024[34]. Other Financial Metrics - The company closed on a new $1.15 billion repurchase facility, enhancing leverage and generating approximately $80 million of additional liquidity[3][17]. - The company reported a loss on extinguishment of debt of $2.319 million in Q1 2025, with no such loss reported in Q1 2024[26]. - Amortization and write-offs of mortgage servicing rights (MSRs) were $20,864,000 in Q1 2025, compared to $18,418,000 in Q1 2024[34].

Company Highlights - Arbor Realty Trust, Inc. reported a net income of $30.4 million, or $0.16 per diluted common share for Q1 2025, a decrease from $57.9 million, or $0.31 per diluted common share in Q1 2024 [2][25] - Distributable earnings for the quarter were $57.3 million, or $0.28 per diluted common share, down from $96.7 million, or $0.47 per diluted common share in the same quarter last year [2][32] Agency Business - Total agency loan originations for Q1 2025 were $605.9 million, significantly lower than $1.38 billion in Q4 2024 [3] - Revenues from the Agency Business were $62.9 million, compared to $78.7 million in Q4 2024 [3] - The gain on sales, including fee-based services, was $12.8 million, with a margin of 1.75%, consistent with the previous quarter [3] Fee-Based Servicing Portfolio - The fee-based servicing portfolio totaled $33.48 billion as of March 31, 2025, with servicing revenue of $25.6 million for the quarter [5][7] - The amortization of mortgage servicing rights was $17.8 million, impacting net servicing revenue [5] Structured Business - The structured loan portfolio had an unpaid principal balance (UPB) of $11.49 billion, with originations of $747.1 million and runoff of $421.9 million for Q1 2025 [9][10] - The average interest rate for the loan and investment portfolio was 6.94%, slightly up from 6.90% at the end of Q4 2024 [10] Financing Activity - The balance of debt financing the loan and investment portfolio was $9.49 billion, with a weighted average interest rate of 6.82% [15] - A new $1.15 billion repurchase facility was closed, enhancing liquidity by approximately $80 million [17] Dividend - The Board of Directors declared a quarterly cash dividend of $0.30 per share for Q1 2025, payable on May 30, 2025 [19]

Company Overview - Arbor Realty Trust, Inc. (NYSE: ABR) is a nationwide real estate investment trust and direct lender, focusing on loan origination and servicing for multifamily, single-family rental portfolios, and other commercial real estate assets [4] - The company manages a multibillion-dollar servicing portfolio and specializes in government-sponsored enterprise products [4] - Arbor is recognized as a leading Fannie Mae DUS® lender, Freddie Mac Optigo® Seller/Servicer, and an approved FHA Multifamily Accelerated Processing (MAP) lender [4] Upcoming Financial Results - Arbor Realty Trust is scheduled to release its first quarter 2025 financial results before the market opens on May 2, 2025 [1] - A conference call to review the results will take place at 10:00 a.m. Eastern Time on the same day [1] Conference Call Details - A live webcast and replay of the conference call will be available on the company's investor relations website [2] - For those without web access, a telephonic option is available, with specific dial-in numbers provided for domestic and international callers [2] - A telephonic replay of the call will be accessible until May 9, 2025, with dedicated numbers for domestic and international callers [3]

Core Viewpoint - Arbor Realty Trust (NYSE: ABR) has undergone multiple rating changes, initially rated as a Buy in fall 2023, downgraded to Hold, and then upgraded back to Buy in September 2023 [1] Group 1 - The analysis of Arbor Realty Trust is based on value investing principles, an owner's mindset, and a long-term investment horizon [1] - The author does not write sell articles, as they are considered short theses, and does not recommend shorting [1] - The author has a background as a former advisory representative at Fidelity and currently conducts independent investing [1]

Our approach has earned us 500+ five-star reviews from satisfied members who are already seeing the benefits. Don’t miss out—join now and start maximizing your returns!We invest thousands of hours and over $100,000 annually into researching the most profitable investment opportunities—all to bring you real estate strategies at just a fraction of the cost.He is the leader of the investing group High Yield Landlord , where he shares his real-money REIT portfolio and transactions in real-time. Features of the ...