Arbor Realty Trust Reports Decline in Assets, Revenue, and Net Income Amidst Challenging Economic Environment

Arbor Realty Trust, Inc. reported significant financial changes in its third quarter and nine-month results for 2024 compared to the same periods in 2023. As of September 30, 2024, the company’s total assets decreased to $13.88 billion from $15.74 billion at the end of 2023, primarily due to a reduction in loans and investments, which fell from $12.38 billion to $11.29 billion. Cash and cash equivalents also declined to $687.54 million from $928.97 million.

In terms of revenue, Arbor's interest income for Q3 2024 was $286.52 million, down from $336.47 million in Q3 2023. For the nine months ended September 30, 2024, interest income totaled $905.00 million, a decrease from $1.00 billion in the prior year. Net interest income followed a similar trend, dropping to $88.81 million in Q3 2024 from $107.29 million in Q3 2023, and to $280.39 million for the nine months, down from $324.41 million.

Net income attributable to common stockholders also saw a decline, with Q3 2024 reporting $58.18 million compared to $77.92 million in Q3 2023. For the nine-month period, net income attributable to common stockholders decreased to $163.45 million from $238.41 million. Basic earnings per share for Q3 2024 were $0.31, down from $0.42 in the same quarter of the previous year.

The company’s operational strategy included modifications to loans, with 24 loans totaling $1.15 billion modified during the quarter. The structured loan and investment portfolio was reduced by 3% to $11.57 billion, with loan runoff of $521.34 million outpacing originations of $258.46 million. The Agency Business segment reported $1.10 billion in loan originations, including $383.10 million recaptured from runoff.

Arbor's provision for credit losses increased significantly, reflecting economic pressures, with $57.9 million recorded for the nine months ended September 30, 2024, compared to $45.3 million in the same period of 2023. The company also faced challenges with rising loan delinquencies, which increased to $427 million as of September 30, 2024.

Strategically, Arbor Realty Trust entered into new debt facilities totaling $900 million and unwound CLO 15, repaying $674.4 million of outstanding notes. The company also repurchased 935,739 shares of common stock at a cost of $11.4 million during the reporting period, leaving $138.6 million available for future repurchases.

Overall, Arbor Realty Trust's financial performance in 2024 reflects a challenging environment marked by declining revenues, increased provisions for credit losses, and strategic adjustments to its loan portfolio amidst high interest rates and economic uncertainty.