Filed Pursuant to Rule 424(b)(3)
Registration No. 333-116223
ARBOR REALTY TRUST ANNOUNCES SECOND QUARTER 2004 RESULTS
- NET INCOME OF $5.8 MILLION, INCREASE OF 86% FROM 1Q04
- NET INCOME BEFORE MINORITY INTEREST OF $7.0 MILLION, INCREASE
OF 63% FROM 1Q04
- NET INCOME OF $0.39 PER BASIC SHARE; $0.38 PER DILUTED SHARE
- NEW LOAN/INVESTMENT FUNDINGS OF $214 MILLION
- TOTAL LOANS/INVESTMENTS OF $664 MILLION AT END OF 2Q04, UP 39%
FROM MARCH 31, 2004
- DECLARED QUARTERLY DIVIDEND OF $0.35 PER SHARE
Uniondale, NY, July 30, 2004 -- Arbor Realty Trust, Inc. (NYSE: ABR), a real
estate investment trust focused on the business of investing in real estate
related bridge and mezzanine loans, preferred equity investments, mortgage
related securities and other real estate related assets, today announced
financial results for the period ended June 30, 2004. Arbor reported net income
for the quarter ended June 30, 2004 of $5.8 million, or $0.39 per basic common
share and $0.38 per diluted common share. For the six months ended June 30,
2004, net income totaled $8.9 million, or $0.77 per basic common share and $0.76
per diluted common share.
Ivan Kaufman, Chairman and Chief Executive Officer, commented, "We are proud to
report our strong financial performance for the second quarter. Significant
progress was made in deploying the funds from the IPO we completed in April. We
originated 18 loans and investments totaling $230.5 million, of which $213.8
million was funded, a record quarterly origination volume. Our pipeline remains
strong and we continue to see ample opportunity to further grow the portfolio."
"In addition, we have expanded and diversified our product offerings and are
encouraged by the strong demand for our products. These factors are expected to
contribute to our long-term revenue growth," concluded Mr. Kaufman.
Total revenues for the quarter ended June 30, 2004 were $11.9 million, an
increase of 46% from the previous quarter, of which $11.5 million was from the
loan and investment portfolio. The balance in the loan and investment portfolio
increased to $664.3 million by quarter end from $477.7 million at March 31,
2004. The average balance of the loan and investment portfolio was $584.9
million during the second quarter and the average yield on these assets was
7.79%.
Interest expense for the quarter was $3.3 million, an increase of 26% from the
previous quarter, of which $3.2 million was from the debt financing of the loan
and investment portfolio. This growth reflects increased leverage during the
quarter. The average balance of debt financing was $300.8 million during the
quarter and the average cost of these borrowings was 4.14%.
In addition, Arbor invested in mortgage-backed securities, which had a weighted
average balance of $55.4 million for the second quarter with an average yield of
2.95%. These assets were financed by borrowings with a weighted average balance
of $54.4 million with an average cost of 1.18%.
Financing Activity
As previously announced, Arbor completed its initial public offering in April
2004. Together with a concurrent offering and the exercise of the underwriter's
overallotment option, a total of 7,274,200 shares were sold for net proceeds of
$134 million.
In July 2004, an amendment to one financing facility was completed, increasing
the financing capacity by $100 million. In addition, a separate $100 million
mortgage-backed security facility was added.
Arbor maintains four financing facilities for its loan and investment portfolio
with total capacity of $750 million. Outstanding balances under these facilities
totaled $426 million as of June 30, 2004. The additional capacity within these
facilities, combined with the net proceeds raised in the IPO, provide ample
liquidity to continue to grow the portfolio.
Portfolio Activity
During the second quarter, 18 loans and investments totaling $230.5 million were
originated, of which $213.8 million was disbursed on the closing date. Of the
new loans and investments, four were junior participation interests totaling
$71.5 million, six were mezzanine loans totaling $69.5 million, four were bridge
loans totaling $58.2 million, two were preferred equity investments totaling
$7.4 million, and two were directed equity investments totaling $7.2 million.
At June 30, 2004, the loan and investment portfolio balance was $664.3 million,
with a weighted average current interest pay rate of 7.19%. At the same date,
advances on financing facilities pertaining to the loan and investment portfolio
totaled $374.5 million, with a weighted average funding cost of 3.53%. These
balances constitute an advance rate of approximately 56% as of June 30, 2004.
The loan and investment portfolio continues to perform according to expectations
and there have been no defaults. Arbor continues to seek loans and investments
that will generate superior risk adjusted returns with a long-term objective of
capital preservation and earnings stability in varying interest rate and credit
cycles.
Dividend
As previously disclosed on July 15, 2004, a dividend of $0.35 per share was paid
for the quarter ended June 30, 2004 to stockholders of record on July 6, 2004.
Earnings Conference Call
Management will host a conference call on Friday, July 30, 2004 at 10:00 a.m.
EDT. A live webcast of the conference call will be available online at
www.arborrealtytrust.com. Web participants are encouraged to go to Arbor's Web
site at least 15 minutes prior to the start of the call to register, download
and install any necessary audio software. Listening to the webcast requires
speakers and RealPlayer(TM) software, downloadable free at www.real.com. Those
without Web access should access the call telephonically at least ten minutes
prior to the conference call. The dial-in numbers are (866) 761-0749 for
domestic callers and (617) 614-2707 for international callers. The participant
passcode for both is 28064177.
After the live webcast, the call will remain available on Arbor's Web site,
www.arborrealtytrust.com through August 27, 2004. In addition, a telephonic
replay of the call will be available from July 30, 2004 to August 13, 2004. The
replay dial-in number is (888) 286-8010 for domestic callers and (617) 801-6888.
Please use passcode: 28561700.
About Arbor Realty Trust, Inc.
Arbor Realty Trust, Inc. is a real estate investment trust, which invests in a
diversified portfolio of multi-family and commercial real estate related bridge
and mezzanine loans, preferred equity investments, mortgage related securities
and other real estate related assets. Arbor commenced operations in July 2003
and conducts substantially all of its operations through its operating
partnership, Arbor Realty Limited Partnership. Arbor is externally managed and
advised by Arbor Commercial Mortgage, LLC, a national commercial real estate
finance company operating through 15 offices in the US that specializes in debt
and equity financing for multi-family and commercial real estate.
Safe Harbor Statement
Certain items in this press release may constitute forward-looking statements
within the meaning of the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. These statements are based on management's
current expectations and beliefs and are subject to a number of trends and
uncertainties that could cause actual results to differ materially from those
described in the forward-looking statements. Arbor can give no assurance that
its expectations will be attained. Factors that could cause actual results to
differ materially from Arbor's expectations include, but are not limited to,
continued ability to source new investments, changes in interest rates and/or
credit spreads, changes in the real estate markets, and other risks detailed
from time to time in the Arbor's periodic and other reports filed with the SEC.
Such forward-looking statements speak only as of the date of this press release.
Arbor expressly disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained herein to
reflect any change in Arbor's expectations with regard thereto or change in
events, conditions, or circumstances on which any such statement is based.
ARBOR REALTY TRUST, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
For the three and six month periods ended June 30, 2004
Three Months Six Months
Ended Ended
June 30, 2004 June 30, 2004
(unaudited) (unaudited)
----------- -----------
Revenue
Interest income $11,939,350 $20,102,741
Other income 5,427 26,531
----------- -----------
Total revenue 11,944,777 20,129,272
Expenses
Interest expense 3,310,544 5,934,437
Employee compensation and benefits 617,137 1,230,443
Stock-based compensation 92,806 207,007
Selling and administrative 366,843 611,154
Management fee 540,939 834,057
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Total expenses 4,928,269 8,817,098
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Income before minority interest 7,016,508 11,312,174
Income allocated to minority interest 1,236,560 2,427,899
----------- -----------
Net income $ 5,779,948 $ 8,884,275
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Weighted average common shares outstanding
Basic 14,747,949 11,472,833
Diluted 18,465,683 14,929,979
Earnings per common share
Basic $ 0.39 $ 0.77
Diluted(1) $ 0.38 $ 0.76
(1) Diluted earnings per common share is calculated by dividing income
before minority interest by diluted weighted average common shares outstanding
ARBOR REALTY TRUST, INC.
CONSOLIDATED BALANCE SHEETS
June 30, 2004 and December 31, 2003
June 30, 2004 December 31, 2003
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(unaudited)
Assets
Cash $ 6,166,645 $ 6,115,525
Loans held for investment, net 637,388,563 286,036,610
Related party loans, net 26,935,784 35,940,881
Available-for-sale securities, at fair value 54,082,735 --
Investment in equity affiliates 10,439,417 5,917,542
Other assets 8,261,184 4,153,874
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Total assets $ 743,274,328 $ 338,164,432
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Liabilities and stockholders' equity
Notes payable and repurchase agreements $ 425,713,693 $ 172,528,471
Other liabilities 22,780,743 10,888,245
Dividends payable 6,516,355 --
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Total liabilities 455,010,791 183,416,716
Minority interest 48,716,537 43,631,602
Stockholders' Equity:
Preferred stock, $0.01 par value: 100,000,000 shares authorized;
3,146,724 shares issued and outstanding 31,467 31,467
Common stock, $0.01 par value: 500,000,000 shares authorized;
15,471,433 shares issued and outstanding 154,715 81,996
Additional paid - in capital 241,341,916 112,215,649
Distributions in excess of earnings (338,428) (691,865)
Deferred compensation (279,116) (521,133)
Accumulated other comprehensive loss (1,363,554) --
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Total stockholders' equity 239,547,000 111,116,114
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Total liabilities and stockholders' equity $ 743,274,328 $ 338,164,432
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