Financial Statements and Supplementary Data
−Removed: Report of Independent Registered Public Accounting Firm
+Added: Report of Independent Registered Public Accounting Firm (PCAOB ID 42 )
Consolidated Balance Sheets
Consolidated Statements of Income
−Removed: Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Equity
8 unchanged sentences
We have audited the accompanying consolidated balance sheets of Arbor Realty Trust, Inc.
−Removed: and Subsidiaries (the Company) as of December 31, 2020 and 2019, the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).
+Added: and Subsidiaries (the Company) as of December 31, 2021 and 2020, the related consolidated statements of income, changes in equity and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).
In our opinion, based on our audits and the report of other auditors, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with U.S.
generally accepted accounting principles.
−Removed: We did not audit the financial statements of Wakefield Investment Holdings LLC, a corporation in which the Company has a 16.3% interest.
+Added: We did not audit the financial statements of Wakefield Investment Holdings LLC, a corporation in which the Company has a 12.3%.
In the consolidated financial statements, the Company’s investment in Wakefield Investment Holdings LLC is stated at $65.8 million and $59.2 million as of December 31, 2021 and 2020, respectively, and the Company’s equity in the net income of Wakefield Investment Holdings LLC is stated at $34.6 million in 2021, $75.7 million in 2020 and $7.2 million in 2019.
15 unchanged sentences
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
−Removed: We believe that our audits and the report of other auditors provide a reasonable basis for our opinion.
+Added: We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
5 unchanged sentences
Description of the Matter
−Removed: The Company’s capitalized mortgage servicing rights (MSRs) totaled $380.0 million as of December 31, 2020.
+Added: The Company’s capitalized mortgage servicing rights (MSRs) totaled $422.7 million and $380.0 million as of December 31, 2021 and 2020, respectively.
As explained in Note 2 to the consolidated financial statements, the Company recognized MSRs at estimated fair value upon the sale of an originated loan when the Company retained the right to service the loan.
1 unchanged sentence
The Company engaged an independent third-party valuation expert to assist in determining the fair value of the MSRs.
−Removed: The fair value estimates for the MSRs primarily utilize discounted cash flow models that incorporate significant assumptions including discount rate, prepayment rate, servicing cost and estimated life.
−Removed: Auditing the valuation of MSRs was complex and involved a high degree of subjectivity due to the nature of the assumptions.
−Removed: In particular, the valuation of MSRs was sensitive to assumptions such as discount rate, prepayment rate, servicing cost and estimated life, which were based on current market data and had a significant effect on the valuation of the MSRs.
+Added: The fair value estimates for the MSRs primarily utilize discounted cash flow models that incorporate significant assumptions including discount rate and servicing cost.
+Added: Auditing the valuation of the MSRs was complex and involved a high degree of subjectivity due to the nature of the assumptions.
+Added: In particular, the valuation of the MSRs was sensitive to assumptions such as discount rate and servicing cost, which were based on current market data and had a significant effect on the valuation of the MSRs.
How We Addressed the Matter in Our Audit
6 unchanged sentences
Description of the Matter
−Removed: The Company’s allowance for credit losses related to structured loans and loss-sharing obligations related to the Fannie Mae DUS program totaled $148.3 million and $30.3 million, respectively, as of December 31, 2020.
−Removed: As discussed in Note 2 to the consolidated financial statements, management estimated the allowance for credit losses for the expected term of the loan using third party models, which consider loss factors determined through the generation of probability of defaults and loss given defaults for similar loans with similar credit, historical experience and current conditions for similar loans, reasonable and supportable forecasts about the future, and specific factors depending on the nature of the loans.
+Added: The Company’s allowance for credit losses related to structured loans totaled $113.2 million and $148.3 million, as of December 31, 2021 and 2020, respectively.
+Added: The Company’s allowance for loss-sharing obligations related to the Fannie Mae DUS program totaled $21.7 million and $30.3 million as of December 31, 2021 and 2020, respectively.
+Added: As explained in Note 2 to the consolidated financial statements, management estimated the allowance for credit losses and allowance for loss-sharing obligations related to the Fannie Mae DUS program for the expected life of the loan using third party models, which consider loss factors determined through the generation of probability of defaults and loss given defaults for similar loans with similar credit, historical experience and current conditions for similar loans, reasonable and supportable forecasts about the future, and specific factors depending on the nature of the loans.
For loans experiencing credit deterioration, management may use cash flow models or third party appraisals to estimate the fair value of the underlying collateral securing the impaired loan to estimate the expected credit losses.
Auditing management’s estimation of credit loss for structured loans and loss-sharing obligations related to the Fannie Mae DUS program was complex and involved a high degree of subjectivity due to the significant uncertainty associated with the assumptions used in the estimation.
−Removed: In particular, the estimation of the allowance for credit losses and loss-sharing obligations were sensitive to significant assumptions, such as historical loss information, reasonable and supportable forecast periods, and depending on the nature of the loan, debt service coverage ratio, loan-to-value, capitalization rates, and expected loan term.
+Added: In particular, the estimation of the allowance for credit losses and allowance for loss-sharing obligations were sensitive to significant assumptions, such as reasonable and supportable forecast periods, and depending on the nature of the loan, debt service coverage ratio, loan-to-value, capitalization rates, and expected life of the loan or contractual period in which the Company is exposed to credit risk.
How We Addressed the Matter in Our Audit
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Restricted cash
−Removed: Loans and investments, net (allowance for credit losses:
−Removed: $ 148,329 and $ 71,069 , respectively)
+Added: Loans and investments, net (allowance for credit losses of $ 113,241 and $ 148,329 )
Loans held-for-sale, net
Capitalized mortgage servicing rights, net
−Removed: Securities held-to-maturity, net (allowance for credit losses:
−Removed: $ 1,644 and $ 0 , respectively)
+Added: Securities held-to-maturity, net (allowance for credit losses of $ 1,753 and $ 1,644 )
Investments in equity affiliates
−Removed: Real estate owned, net
Due from related party
1 unchanged sentence
Liabilities and Equity:
−Removed: Credit facilities and repurchase agreements
+Added: Credit and repurchase facilities
Collateralized loan obligations
11 unchanged sentences
Preferred stock, cumulative, redeemable, $ 0.01 par value:
−Removed: 100,000,000 shares authorized;
−Removed: special voting preferred shares;
−Removed: 17,560,633 and 20,484,094 shares issued and outstanding , respectively;
−Removed: 8.25 % Series A, $ 38,788 aggregate liquidation preference;
−Removed: 1,551,500 shares issued and outstanding ;
−Removed: 7.75 % Series B, $ 31,500 aggregate liquidation preference;
−Removed: 1,260,000 shares issued and outstanding;
−Removed: 8.50 % Series C, $ 22,500 aggregate liquidation preference;
−Removed: 900,000 shares issued and outstanding
+Added: 100,000,000 shares authorized, shares issued and outstanding by period:
+Added: Special voting preferred shares, 16,325,095 and 17,560,633 shares
+Added: 8.25 % Series A, 0 and 1,551,500 shares
+Added: 7.75 % Series B, 0 and 1,260,000 shares
+Added: 8.50 % Series C, 0 and 900,000 shares
+Added: 6.375 % Series D, 9,200,000 and 0 shares
+Added: 6.25 % Series E, 5,750,000 and 0 shares
+Added: 6.25 % Series F, 8,050,000 and 0 shares
Common stock, $ 0.01 par value:
−Removed: 500,000,000 shares authorized;
−Removed: 123,181,173 and 109,706,214 shares issued and outstanding , respectively
+Added: 500,000,000 shares authorized - 151,362,181 and 123,181,173 shares issued and outstanding
Additional paid-in capital
−Removed: Accumulated deficit
+Added: Retained earnings (accumulated deficit)
Total Arbor Realty Trust, Inc.
19 unchanged sentences
Property operating income
−Removed: (Loss) gain on derivative instruments, net
+Added: Loss on derivative instruments, net
Other income, net
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Provision for credit losses (net of recoveries)
−Removed: Litigation settlement gain
Total other expenses
−Removed: Income before extinguishment of debt, sale of real estate, income from equity affiliates and income taxes
−Removed: Loss on extinguishent of debt
−Removed: Loss on sale of real estate
+Added: Income before extinguishment of debt, gain (loss) on real estate, income from equity affiliates and income taxes
+Added: Loss on extinguishment of debt
+Added: Gain (loss) on real estate
Income from equity affiliates
8 unchanged sentences
ARBOR REALTY TRUST, INC.
−Removed: AND SUBSIDIARIES
−Removed: CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
−Removed: (in thousands)
−Removed: Year Ended December 31,
−Removed: Reclassification of net unrealized gains on available‑for‑sale
−Removed: securities into accumulated deficit
−Removed: Comprehensive income
−Removed: Comprehensive income attributable to noncontrolling interest
−Removed: Preferred stock dividends
−Removed: Comprehensive income attributable to common stockholders
−Removed: See Notes to Consolidated Financial Statements.
−Removed: ARBOR REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
($ in thousands, except shares)
−Removed: Comprehensive
Stockholders’
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Stock‑based compensation, net
+Added: Issuance of common stock from special dividend
+Added: Issuance of operating partnership units and special voting preferred stock from special dividend
Distributions—common stock
2 unchanged sentences
Redemption of OP Units
−Removed: Reclassification of net unrealized gains on available‑for‑sale securities into accumulated deficit
Balance—December 31, 2019
+Added: Cummulative-effect adjustment (Note 2)
+Added: Balance - January 1, 2020 (as adjusted for the adoption of ASU 2016-13)
Issuance of common stock
Repurchase of common stock
+Added: ( 2,285,178 )
Issuance of common stock from convertible debt
−Removed: Issuance of convertible senior unsecured notes, net
−Removed: Extinguishment of convertible senior unsecured notes
Stock-based compensation, net
−Removed: Issuance of common stock from special dividend
−Removed: Issuance of operating partnership units and special voting preferred stock from special dividend
Distributions - common stock
2 unchanged sentences
Redemption of OP Units
+Added: ( 2,923,461 )
Balance—December 31, 2020
−Removed: Cummulative-effect adjustment (Note 2)
−Removed: Balance - January 1, 2020 (as adjusted for the adoption of ASU 2016-13)
Issuance of common stock
2 unchanged sentences
Issuance of common stock from convertible debt
+Added: Issuance of 6.375 % Series D preferred stock
+Added: Issuance of 6.25 % Series E preferred stock
+Added: Issuance of 6.25 % Series F preferred stock
+Added: Redemption of preferred stock
+Added: ( 3,711,500 )
Stock-based compensation, net
23 unchanged sentences
Proceeds from sales of loans held-for-sale, net of gain on sale
+Added: (Gain) loss on real estate
Mortgage servicing rights
Write-off of capitalized mortgage servicing rights from payoffs
−Removed: Provision for credit losses (net of recoveries)
Provision for loss sharing (net of recoveries)
−Removed: Net recoveries (charge-offs) for loss sharing obligations
−Removed: Deferred tax provision (benefit)
+Added: Provision for credit losses (net of recoveries)
+Added: Net (charge-offs) recoveries for loss sharing obligations
+Added: Deferred tax provision
Income from equity affiliates
2 unchanged sentences
Payoffs and paydowns of loans held-for-sale
−Removed: Loss on sale of real estate
Changes in operating assets and liabilities
6 unchanged sentences
Payoffs and paydowns of loans and investments
+Added: Proceeds from sale of loans and investments
Deferred fees
−Removed: Investments in real estate, net
−Removed: Proceeds from sale of real estate, net
Proceeds from sale of available-for-sale securities
4 unchanged sentences
Due to borrowers and reserves
−Removed: Distributions of insurance settlements, net
+Added: Investments in real estate, net
+Added: Proceeds from sale of real estate, net
Net cash used in investing activities
( 6,750,254 )
+Added: ( 1,156,624 )
Financing activities:
−Removed: Proceeds from repurchase agreements and credit facilities
−Removed: Paydowns and payoffs of repurchase agreements and credit facilities
+Added: Proceeds from credit and repurchase facilities
+Added: Paydowns and payoffs of credit and repurchase facilities
( 13,433,376 )
5 unchanged sentences
Proceeds from issuance of common stock
+Added: Proceeds from issuance of preferred stock
+Added: Proceeds from issuance of senior unsecured notes
Proceeds from issuance of convertible senior unsecured notes
1 unchanged sentence
Settlements of convertible senior unsecured notes
−Removed: Proceeds from issuance of senior unsecured notes
−Removed: Payoffs of senior unsecured notes
+Added: Redemption of preferred stock
Redemption of OP Units
1 unchanged sentence
Repurchase of common stock
−Removed: Distributions paid on common stock
−Removed: Distributions paid on noncontrolling interest
−Removed: Distributions paid on preferred stock
+Added: Distributions to stockholders
Payment of deferred financing costs
−Removed: Payoff of related party financing
Net cash provided by financing activities
19 unchanged sentences
Supplemental schedule of non-cash investing and financing activities:
−Removed: Cummulative-effect adjustment (Note 2)
−Removed: Issuance of common stock from convertible debt
−Removed: Extinguishment of convertible senior unsecured notes
−Removed: Distributions accrued on 8.25 % Series A preferred stock
−Removed: Distributions accrued on 7.75 % Series B preferred stock
−Removed: Distributions accrued on 8.50 % Series C preferred stock
−Removed: Distributions accrued for special dividend declared
+Added: Loans transferred from loans and investment, net to loans held-for-sale
+Added: Distributions accrued on preferred stock
+Added: Cummulative-effect adjustment (for adoption of credit loss standard)
Settlements of convertible senior unsecured notes
Fair value of conversion feature of convertible senior unsecured notes
+Added: Issuance of common stock from convertible debt
+Added: Extinguishment of convertible senior unsecured notes
Special dividend - common stock issued
11 unchanged sentences
our Structured Business and our Agency Business.
−Removed: Through our Structured Business, we invest in a diversified portfolio of structured finance assets in the multifamily, single-family rental and commercial real estate markets, primarily consisting of bridge and mezzanine loans, including junior participating interests in first mortgages and preferred and direct equity.
+Added: Through our Structured Business, we invest in a diversified portfolio of structured finance assets in the multifamily, SFR and commercial real estate markets, primarily consisting of bridge and mezzanine loans, including 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.
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We pool and securitize the Private Label loans and sell certificates in the securitizations to third-party investors, while retaining the servicing rights and the highest risk bottom tranche certificate of the securitization.
−Removed: Substantially all of our operations are conducted through our operating partnership, ARLP, for which we serve as the general partner, and ARLP’s subsidiaries.
+Added: Substantially all of our operations are conducted through our operating partnership, ARLP, for which we serve as the indirect general partner, and ARLP’s subsidiaries.
We are organized to qualify as a REIT for U.S.
federal income tax purposes.
−Removed: Certain of our assets that produce non-qualifying REIT income, primarily within the Agency Business, are operated through TRS entities, which is part of our TRS Consolidated Group and is subject to U.S.
+Added: Certain of our assets that produce non-qualifying REIT income, primarily within the Agency Business, are operated through TRS entities, which are part of our TRS Consolidated Group and are subject to U.S.
federal, state and local income taxes.
3 unchanged sentences
The consolidated financial statements and accompanying notes have been prepared in accordance with GAAP.
−Removed: In the opinion of management, all adjustments considered necessary for a fair presentation of our financial position, results of operations and cash flows have been included and are of a normal and recurring nature.
+Added: In our opinion, all adjustments considered necessary for a fair presentation of our financial position, results of operations and cash flows have been included and are of a normal and recurring nature.
Principles of Consolidation
2 unchanged sentences
Our VIEs are described in Note 15.
−Removed: All significant inter-company transactions and balances have been eliminated in consolidation.
+Added: All significant intercompany transactions and balances have been eliminated in consolidation.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that could materially affect the amounts reported in the consolidated financial statements and accompanying notes.
−Removed: During 2020, there has been a global outbreak of COVID-19, which has forced many countries, including the United States, to declare national emergencies, to institute "stay-at-home"
−Removed: orders, to close financial markets and to restrict operations of non-essential businesses.
−Removed: Such actions are creating significant disruptions in global supply chains, and adversely impacting many industries.
−Removed: COVID-19 has had, and may continue to have, a prolonged adverse impact on economic and market conditions, which could lead to an extended period of global economic slowdown.
−Removed: The impact of COVID-19 on companies is evolving rapidly, and the extent and duration of the economic fallout from this pandemic, both globally and to our business, remain unclear, making any estimate or
+Added: Actual results could differ from those estimates.
+Added: Beginning in early 2020, there has been a global outbreak of COVID-19, which had forced many countries, including the United States, to declare national emergencies, to institute “stay-at-home” orders, to close financial markets and to restrict operations of non-essential businesses.
+Added: Such actions have created significant disruptions in global supply chains, and adversely impacted many industries.
+Added: COVID-19 has had, and may continue to have, a continued and prolonged adverse impact on economic and market conditions, which could continue a period of global economic slowdown.
+Added: The impact of COVID-19 on companies continues to evolve, and the extent and duration of the economic fallout from this pandemic, both globally and to our business, remain unclear, making any estimate or assumption as of December 31, 2021 inherently less certain than they would be absent the current and potential impacts of COVID-19.
ARBOR REALTY TRUST, INC.
2 unchanged sentences
December 31, 2020
−Removed: assumption as of December 31, 2020 inherently less certain than they would be absent the current and potential impacts of COVID-19.
−Removed: Actual results could differ from those estimates.
Reclassification
Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period financial statements.
−Removed: The net gain/loss from changes in fair value of derivative instruments previously recorded to other income, net is now recorded to (loss) gain on derivative instruments, net.
−Removed: These reclassifications had no effect on the previously reported net income.
+Added: Our real estate owned assets previously recorded to real estate owned, net on our consolidated balance sheets is now recorded in other assets for all periods presented.
Significant Accounting Policies
23 unchanged sentences
Changes in such estimates can significantly affect our expected credit losses.
−Removed: Our method for calculating the estimate of expected credit loss takes into account historical experience and current conditions for similar loans and reasonable and supportable forecasts about the future.
+Added: Our method for calculating the estimate of expected credit loss considers historical experience and current conditions for similar loans and reasonable and supportable forecasts about the future.
The reasonable and supportable forecast period is determined based on our assessment of the most likely scenario of assumptions and plausible outcomes for the US economy, level of historical loss forecast estimates, material changes in growth and credit strategy and other factors that may affect our loss experience.
We regularly evaluate the reasonable and supportable forecast period to determine if a change is needed.
+Added: Beyond our reasonable and supportable forecast period, we generally revert to historical loss information over the remaining loan/asset period, taken from a period that most accurately reflects the expectation of conditions expected to exist during the period of reversion.
+Added: We may adjust historical loss information for differences in risk that may not reflect the characteristics of our current
ARBOR REALTY TRUST, INC.
2 unchanged sentences
December 31, 2020
−Removed: Beyond our reasonable and supportable forecast period, we generally revert to historical loss information over the remaining loan/asset period, taken from a period that most accurately reflects the expectation of conditions expected to exist during the period of reversion.
−Removed: We may make adjustments to historical loss information for differences in risk that may not reflect the characteristics of our current portfolio, including but not limited to, loan-to-value and debt service coverage ratios, among other relevant factors.
+Added: portfolio, including but not limited to, loan-to-value and debt service coverage ratios, among other relevant factors.
The method of reversion selected represents the best estimate of the collectability of the investments and is reevaluated each reporting period.
1 unchanged sentence
We also perform a qualitative assessment beyond model estimates and apply qualitative adjustments as necessary.
−Removed: Our qualitative analysis includes a review of data that may directly impact our estimates including internal and external information about the loan or property including current market conditions, asset specific conditions, property operations or borrower/sponsor details (i.e.
−Removed: refinance, sale, bankruptcy) which allows us to more accurately and reasonably determine the amount of the expected loss for these investments.
+Added: Our qualitative analysis includes a review of data that may directly impact our estimates including internal and external information about the loan or property including current market conditions, asset specific conditions, property operations or borrower/sponsor details (i.e., refinance, sale, bankruptcy) which allows us to determine the amount of the expected loss more accurately and reasonably for these investments.
We also evaluate the contractual life of our assets to determine if changes are needed for contractual extension options, renewals, modifications, and prepayments.
4 unchanged sentences
We evaluate the capitalization and market discount rates, as well as the borrower's operating income and cash flows, in estimating the value of the underlying collateral when determining if a loan is impaired.
−Removed: We may also obtain a third party appraisal, which may value the collateral through an "as-is"
−Removed: or "stabilized value"
+Added: We may also obtain a third-party appraisal, which may value the collateral through an “as-is” or “stabilized value” methodology.
Such appraisals may be used as an additional source of valuation information only and no adjustments are made to appraisals.
10 unchanged sentences
When a loan is restructured, we record our investment at net realizable value, taking into account the cost of all concessions at the date of restructuring.
−Removed: In addition, a gain or loss may be recorded upon the sale of a loan to a third party in the consolidated statements of operations in the period in which the loan was sold.
−Removed: Loans Held-for-Sale, Net.
−Removed: Loans held-for-sale, net represents our Agency Business commercial real estate loans originated and sold under the GSE and HUD programs, which are generally transferred or sold within 60 days of loan origination, as well as our
+Added: In addition, a gain or loss may be recorded upon the sale of a loan to a third-party in the consolidated statements of income in the period in which the loan was sold.
+Added: We adopted ASU 2016-13, which utilizes the CECL methodology on January 1, 2020.
+Added: We adopted ASU 2016-13 using the modified retrospective method, therefore, the results for reporting periods prior to January 1, 2020 are unadjusted and reported in accordance with previously applicable GAAP.
+Added: In connection with the adoption of ASU 2016-13, we recorded a $ 28.6 million increase to accumulated deficit, which was net of a deferred tax asset of $ 3.6 million.
ARBOR REALTY TRUST, INC.
2 unchanged sentences
December 31, 2020
−Removed: Private Label loans, which are generally sold and securitized within 180 days of loan origination.
+Added: Loans Held-for-Sale, Net.
+Added: Loans held-for-sale, net represents our Agency Business commercial real estate loans originated and sold under the GSE and HUD programs, which are generally transferred or sold within 60 days of loan origination, as well as our Private Label loans, which are generally sold and securitized within 180 days of loan origination.
Such loans are reported at the lower of cost or market on an aggregate basis and include the value allocated to the associated future MSRs.
16 unchanged sentences
Historically, initial loss recognition occurs at or before a loan becomes 60 days delinquent.
−Removed: In instances where payment under the guaranty on a loan is determined to be probable and estimable (as the loan is probable of, or is, in foreclosure), we record a liability for the estimated allowance for loss-sharing (a "specific reserve") by transferring the guarantee obligation recorded on the loan to the specific reserve with any adjustments to this reserve amount recorded in provision for loss sharing in the statements of income.
+Added: In instances where payment under the guaranty on a loan is determined to be probable and estimable (as the loan is probable of, or is, in foreclosure), we record a liability for the estimated allowance for loss-sharing (a “specific reserve”) by transferring the guarantee obligation recorded on the loan to the specific reserve with any adjustments to this reserve amount recorded in provision for loss sharing in the statements of income.
The amount of the allowance considers our assessment of the likelihood of repayment by the borrower or key principal(s), the risk characteristics of the loan, the loan's risk rating, historical loss experience, adverse situations affecting individual loans, the estimated disposition value of the underlying collateral, and the level of risk sharing.
8 unchanged sentences
The following assumptions were used in calculating the fair value of our MSRs for the periods presented:
−Removed: We used discount rates ranging from 8 % to 13 %, representing a weighted average discount rate of 12 %, based on our best estimate of market discount rates to determine the present value of MSRs.
−Removed: The inflation rate used for adequate compensation was 3 %.
ARBOR REALTY TRUST, INC.
2 unchanged sentences
December 31, 2020
+Added: We used discount rates ranging from 8 % to 13 %, representing a weighted average discount rate of 12 %, based on our best estimate of market discount rates to determine the present value of MSRs.
+Added: The inflation rate used for adequate compensation was 3 %.
Servicing Cost:
14 unchanged sentences
For loans that payoff prior to maturity, we may collect a prepayment fee which is included as a component of servicing revenue, net.
−Removed: Real Estate Owned and Held-For-Sale.
−Removed: Real estate acquired is recorded at its estimated fair value at acquisition and is shown net of accumulated depreciation and impairment charges.
−Removed: Costs incurred in connection with the acquisition of a property are capitalized.
−Removed: We allocate the purchase price of our real estate acquisitions to land, building, tenant improvements, origination asset of the in-place leases, intangibles for the value of any above or below market leases at fair value and to any other identified intangible assets or liabilities.
−Removed: We amortize the value allocated to in-place leases over the remaining lease term, which is reported in depreciation and amortization expense on our consolidated statements of income.
−Removed: The value allocated to above or below market leases are amortized over the remaining lease term as an adjustment to rental income.
−Removed: Real estate assets are depreciated using the straight-line method over their estimated useful lives.
−Removed: Ordinary repairs and maintenance which are not reimbursed by the tenants are expensed as incurred.
−Removed: Major replacements and betterments which improve or extend the life of the asset are capitalized and depreciated over their estimated useful life.
−Removed: Our properties are reviewed for impairment each quarter, if events or circumstances change indicating that the carrying amount of an asset may not be recoverable.
−Removed: We recognize impairment if the undiscounted estimated cash flows to be generated by an asset is less than the carrying amount of such asset.
−Removed: Measurement of impairment is based on the asset’s estimated fair value.
−Removed: In evaluating for impairment, many factors are considered, including estimated current and expected operating cash flows from the property during the projected holding period, costs necessary to extend the life or improve the asset, expected capitalization rates, projected stabilized net operating income, selling costs, and the ability to hold and dispose of the asset in the ordinary course of business.
−Removed: Impairment charges may be necessary in the event discount rates, capitalization rates, lease-up periods, future economic conditions, and other relevant factors vary significantly from those assumed in valuing the property.
−Removed: Real estate is classified as held-for-sale when we commit to a plan of sale, the asset is available for immediate sale, there is an active program to locate a buyer, and it is probable the sale will be completed within one year .
−Removed: Real estate assets that are expected to be disposed of are valued at the lower of the asset’s carrying amount or its fair value less costs to sell.
−Removed: We recognize sales of real estate properties upon closing.
−Removed: Payments received from purchasers prior to closing are recorded as deposits.
−Removed: Gain on real estate sold is recognized when the collectability of the sale price is reasonably assured, we are not obligated to
−Removed: ARBOR REALTY TRUST, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
−Removed: December 31, 2020
−Removed: perform significant activities after the sale and when control of the asset transfers to the buyer.
−Removed: A gain may be deferred in whole or in part until collectability of the sales price is reasonably assured and the earnings process is complete.
Investments in Equity Affiliates .
13 unchanged sentences
Our assessment as to which intangible assets are deemed to have finite or indefinite lives is based on several factors including economic barriers of entry for the acquired product lines, scarcity of available GSE licenses, retention trends and our operating plans, among other factors.
+Added: ARBOR REALTY TRUST, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
+Added: December 31, 2020
Goodwill and indefinite-lived intangible assets are not amortized, while finite-lived intangible assets are amortized over their estimated useful lives on a straight-line basis.
4 unchanged sentences
If, based on that assessment, we believe it is more likely than not that the fair value is less than the carrying value, then a two-step goodwill impairment test is performed.
−Removed: Based on the impairment analysis performed as of October 1, 2020, there was no indication that the indefinite-lived intangible assets, including goodwill, were impaired and there were no events or changes in circumstances indicating impairment at December 31, 2020.
+Added: Based on the impairment analysis performed as of October 1, 2021, there were no indicators that the indefinite-lived intangible assets, including goodwill, were impaired and there were no events or changes in circumstances indicating impairment at December 31, 2021.
+Added: Real Estate Owned and Held-For-Sale.
+Added: Real estate acquired is recorded at its estimated fair value at acquisition and is shown net of accumulated depreciation and impairment charges.
+Added: Costs incurred in connection with the acquisition of a property are capitalized.
+Added: Real estate acquired is recorded in other assets on our consolidated balance sheets.
+Added: We allocate the purchase price of our real estate acquisitions to land, building, tenant improvements, origination asset of the in-place leases, intangibles for the value of any above or below market leases at fair value and to any other identified intangible assets or liabilities.
+Added: We amortize the value allocated to in-place leases over the remaining lease term, which is reported in depreciation and amortization expense on our consolidated statements of income.
+Added: The value allocated to above or below market leases are amortized over the remaining lease term as an adjustment to rental income.
+Added: Real estate assets are depreciated using the straight-line method over their estimated useful lives.
+Added: Ordinary repairs and maintenance which are not reimbursed by the tenants are expensed as incurred.
+Added: Major replacements and betterments which improve or extend the life of the asset are capitalized and depreciated over their estimated useful life.
+Added: Our properties are reviewed for impairment each quarter, if events or circumstances change indicating that the carrying amount of an asset may not be recoverable.
+Added: We recognize impairment if the undiscounted estimated cash flows to be generated by an asset is less than the carrying amount of such asset.
+Added: Measurement of impairment is based on the asset’s estimated fair value.
+Added: In evaluating for impairment, many factors are considered, including estimated current and expected operating cash flows from the property during the projected holding period, costs necessary to extend the life or improve the asset, expected capitalization rates, projected stabilized net operating income, selling costs, and the ability to hold and dispose of the asset in the ordinary course of business.
+Added: Impairment charges may be necessary in the event discount rates, capitalization rates, lease-up periods, future economic conditions, and other relevant factors vary significantly from those assumed in valuing the property.
+Added: Real estate is classified as held-for-sale when we commit to a plan of sale, the asset is available for immediate sale, there is an active program to locate a buyer, and it is probable the sale will be completed within one year .
+Added: Real estate assets that are expected to be disposed of are valued at the lower of the asset’s carrying amount or its fair value less costs to sell.
+Added: We recognize sales of real estate properties upon closing.
+Added: Payments received from purchasers prior to closing are recorded as deposits.
+Added: Gain on real estate sold is recognized when the collectability of the sale price is reasonably assured, we are not obligated to perform significant activities after the sale and when control of the asset transfers to the buyer.
+Added: A gain may be deferred in whole or in part until collectability of the sales price is reasonably assured and the earnings process is complete.
Hedging Activities and Derivatives .
3 unchanged sentences
Fair values are estimated based on current market data from financial sources that trade such instruments and are based on prevailing market data and derived from third-party proprietary models based on well recognized financial principles and reasonable estimates about relevant future market conditions.
−Removed: The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether we have elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting.
−Removed: Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges.
−Removed: Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges.
−Removed: Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow
+Added: The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether we have elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the
ARBOR REALTY TRUST, INC.
2 unchanged sentences
December 31, 2020
−Removed: These derivative instruments must be effective in reducing risk exposure in order to qualify for hedge accounting.
+Added: criteria necessary to apply hedge accounting.
+Added: Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges.
+Added: Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges.
+Added: Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge.
+Added: These derivative instruments must be effective in reducing risk exposure to qualify for hedge accounting.
When the terms of an underlying transaction are modified, or when the underlying hedged item ceases to exist, all changes in the fair value of the instrument are marked-to-market with changes in value included in net income for each period until the derivative instrument matures or is settled.
10 unchanged sentences
The estimated fair value of forward sale commitments includes the effects of interest rate movements between the trade date and balance sheet date.
−Removed: Our Swap Futures associated with (1) our Structured Business SFR loans, and (2) our held-for-sale Agency Business Private Label loans do not meet the criteria for hedge accounting and are tied to the five-year and ten-year swap rates.
−Removed: Our Swap Futures are cleared by a central clearing house and variation margin payments (made in cash) are treated as a legal settlement of the derivative itself, as opposed to a pledge of collateral.
−Removed: Realized and unrealized gains and losses related to our Swap Futures are recorded through earnings.
+Added: Our Swaps associated with (1) our held-for-sale Agency Business Private Label loans, and (2) our Structured Business SFR loans, do not meet the criteria for hedge accounting and are tied to the five-year and ten-year swap rates.
+Added: Our Swaps are cleared by a central clearing house and variation margin payments (made in cash) are treated as a legal settlement of the derivative itself, as opposed to a pledge of collateral.
+Added: Realized and unrealized gains and losses related to our Swaps are recorded through earnings.
Revenue Recognition.
11 unchanged sentences
Given the transitional nature of some of our real estate loans, we may require funds to be placed into an interest reserve, based on contractual requirements, to cover debt service costs.
−Removed: We will analyze these interest reserves on a periodic basis and determine if any additional interest reserves are needed.
−Removed: Recognition of income on loans with funded interest reserves are accounted for in the same manner as loans without funded interest reserves.
−Removed: We do not recognize interest income on loans in which the borrower has failed to make the contractual interest payment due or has not replenished the interest reserve account.
−Removed: Income from non-performing loans is generally recognized on a cash basis only to the extent it is received.
−Removed: Full income recognition will resume when the loan becomes contractually current and performance has recommenced.
+Added: We will analyze these interest reserves on a periodic basis and determine if any
ARBOR REALTY TRUST, INC.
2 unchanged sentences
December 31, 2020
+Added: additional interest reserves are needed.
+Added: Recognition of income on loans with funded interest reserves are accounted for in the same manner as loans without funded interest reserves.
+Added: We do not recognize interest income on loans in which the borrower has failed to make the contractual interest payment due or has not replenished the interest reserve account.
+Added: Income from non-performing loans is generally recognized on a cash basis only to the extent it is received.
+Added: Full income recognition will resume when the loan becomes contractually current and performance has recommenced.
Additionally, interest income is recorded when earned from equity participation interests, referred to as equity kickers.
4 unchanged sentences
Interest income is recognized on the accrual basis as it is earned from loans held-for-sale.
−Removed: Property operating income — Property operating income represents income associated with the operations of commercial real estate properties classified as real estate owned.
+Added: Property operating income — Property operating income represents income associated with the operations of commercial real estate properties classified as real estate owned and included in other assets on our consolidated balance sheets.
We recognize revenue for these activities when the fees are fixed or determinable, or are evidenced by an arrangement, collection is reasonably assured and the services under the arrangement have been provided.
2 unchanged sentences
We determine if an arrangement is a lease at inception.
−Removed: Our right to use an underlying asset for the lease term is recorded as an operating lease right-of-use ("ROU") asset and our obligation to make lease payments arising from the lease is recorded as a lease liability.
+Added: Our right to use an underlying asset for the lease term is recorded as an operating lease right-of-use (“ROU”) asset and our obligation to make lease payments arising from the lease is recorded as a lease liability.
Operating lease ROU assets and lease liabilities are included in other assets and other liabilities, respectively, in our consolidated balance sheets.
17 unchanged sentences
In general, our TRS entities may hold assets that the REIT cannot hold directly and may engage in real estate or non-real estate-related business.
−Removed: Current and deferred taxes are recorded on the portion of earnings (losses) recognized by us with respect to our interest in TRSs.
−Removed: Deferred income tax assets and liabilities are calculated based on temporary differences between our GAAP consolidated financial statements and the federal, state, local tax basis of assets and liabilities as of the consolidated balance sheets.
−Removed: We evaluate the realizability of our deferred tax assets (e.g., net operating loss and capital loss carryforwards) and recognize a valuation allowance if, based on the available evidence, it is more likely than not that some portion or all of our deferred tax assets will not be realized.
−Removed: When evaluating the realizability of our deferred tax assets, we consider estimates of expected future taxable income, existing and projected book/tax differences, tax planning strategies available and the general and industry specific economic outlook.
+Added: Current and deferred taxes are recorded on the portion of earnings (losses) recognized
ARBOR REALTY TRUST, INC.
2 unchanged sentences
December 31, 2020
+Added: by us with respect to our interest in TRSs.
+Added: Deferred income tax assets and liabilities are calculated based on temporary differences between our GAAP consolidated financial statements and the federal, state, local tax basis of assets and liabilities as of the consolidated balance sheets.
+Added: We evaluate the realizability of our deferred tax assets (e.g., net operating loss and capital loss carryforwards) and recognize a valuation allowance if, based on the available evidence, it is more likely than not that some portion or all our deferred tax assets will not be realized.
+Added: When evaluating the realizability of our deferred tax assets, we consider estimates of expected future taxable income, existing and projected book/tax differences, tax planning strategies available and the general and industry specific economic outlook.
We periodically evaluate tax positions to determine whether it is more likely than not that such positions would be sustained upon examination by a tax authority for all open tax years, as defined by the statute of limitations, based on their technical merits.
1 unchanged sentence
Earnings Per Share.
−Removed: We present both basic and diluted earnings per share ("EPS").
+Added: We present both basic and diluted earnings per share (“EPS”).
Basic EPS excludes dilution and is computed by dividing net income available to common stockholders by the weighted average number of shares outstanding for the period.
1 unchanged sentence
Recently Adopted Accounting Pronouncements
−Removed: Credit Losses
−Removed: On January 1, 2020, we adopted ASU 2016-13, which utilizes the CECL methodology for the recognition of credit losses for our structured loans and investments, held-to-maturity debt securities and our loss-sharing obligations related to the Fannie Mae DUS program, at the time the financial asset is originated or acquired.
−Removed: The allowance for credit losses is adjusted each period for changes in expected credit losses.
−Removed: This methodology replaces the multiple existing impairment methods in GAAP and generally requires that a loss be incurred before it is recognized.
−Removed: We adopted ASU 2016-13 using the modified retrospective method, therefore, the results for reporting periods prior to January 1, 2020 are unadjusted and reported in accordance with previously applicable GAAP.
−Removed: In connection with the adoption of ASU 2016-13, we recorded a $ 28.6 million increase to accumulated deficit, which was net of a deferred tax asset of $ 3.6 million at January 1, 2020.
−Removed: The following table illustrates the impact of adopting ASU 2016-13 (in thousands):
−Removed: January 1, 2020
−Removed: Allowance for credit losses:
−Removed: Structured loans and investments (1)
−Removed: Held-to-maturity debt securities
−Removed: Deferred tax assets
−Removed: Allowance for loss-sharing obligations
−Removed: (1) See Note 3 for details by asset class.
−Removed: ARBOR REALTY TRUST, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
−Removed: December 31, 2020
−Removed: Other Accounting Pronouncements Adopted
Adoption Date
Effect on Financial Statements
−Removed: In November 2018, the Financial Accounting Standards Board ("FASB") issued ASU 2018-17, Consolidation (Topic 810):
−Removed: Targeted Improvements to Related Party Guidance for Variable Interest Entities.
−Removed: This ASU amends the guidance for determining whether a decision-making fee is a variable interest and requires companies to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety (as currently required under GAAP).
−Removed: First quarter of 2020
−Removed: The adoption of this guidance did not have a material impact on our consolidated financial statements.
−Removed: In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820)—Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which makes a number of changes meant to add, modify or remove certain disclosure requirements associated with changes between hierarchy associated with Level 1, Level 2 and Level 3 fair value measurements.
−Removed: Early adoption is permitted upon issuance of the update.
−Removed: First quarter of 2020
−Removed: The adoption of this guidance did not have a material impact on our consolidated financial statements.
−Removed: In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other:
−Removed: Simplifying the Test for Goodwill Impairment.
−Removed: This ASU eliminates step two from the goodwill impairment test, which measures a goodwill impairment loss by comparing the implied fair value with the carrying amount of goodwill.
+Added: In December 2019, the FASB issued Accounting Standard Update (“ASU”) 2019-12, Income Taxes (Topic 740):
+Added: Simplifying the Accounting for Income Taxes, which removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application.
First quarter of 2021
The adoption of this guidance did not have a material impact on our consolidated financial statements.
−Removed: Recently Issued Accounting Pronouncements
−Removed: Effective Date
−Removed: Effect on Financial Statements
−Removed: In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40), which includes amendments to the guidance on convertible instruments and the derivative scope exception for contracts in an entity’s own equity.
−Removed: The guidance also simplifies the accounting for convertible instruments which include beneficial conversion features or cash conversion features by removing certain separation models in Subtopic 470-20 and requires entities to use the “if-converted” method when calculating diluted earnings per share for convertible instruments.
−Removed: First quarter of 2022, with early adoption permitted beginning in the first quarter of 2021
−Removed: We are currently evaluating the timing of our adoption and the impact this guidance may have on our consolidated financial statements.
−Removed: In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848)—Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference LIBOR or other reference rates expected to be discontinued because of reference rate reform.
−Removed: This ASU is effective as of March 12, 2020 through December 31, 2022
−Removed: We have not adopted any of the optional expedients or exceptions through September 30, 2020, but will continue to evaluate the possible adoption of any such expedients or exceptions during the effective period as circumstances evolve.
ARBOR REALTY TRUST, INC.
2 unchanged sentences
December 31, 2020
+Added: Recently Issued Accounting Pronouncements
+Added: Effective Date
+Added: Effect on Financial Statements
+Added: In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):
+Added: Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.
+Added: This guidance reduces the number of accounting models for convertible debt instruments.
+Added: Upon adoption of this guidance, convertible debt proceeds will no longer be allocated between debt and equity components, reducing the unamortized debt discount and lowering interest expense.
+Added: This guidance also changes the method used to calculate diluted earnings per share when an instrument may be settled in cash or shares, if the effect is dilutive.
+Added: First quarter of 2022 with early adoption permitted beginning in the first quarter of 2021
+Added: We adopted this guidance on January 1, 2022 using the modified retrospective method of transition.
+Added: Upon adoption, we reclassified the remaining equity component from equity to our convertible senior unsecured notes liability and ceased the amortization of the debt discount through interest expense.
+Added: Additionally, this guidance will require us to use the if-converted method for the diluted net income per share calculation for our convertible instruments, regardless of our settlement intent.
+Added: The adoption of this guidance resulted in an aggregate decrease to our additional paid-in capital of approximately $ 8.7 million and an aggregate increase to our retained earnings of approximately $ 6.2 million at January 1, 2022.
Note 3 — Loans and Investments
4 unchanged sentences
Bridge loans (4)
−Removed: Preferred equity investments
Mezzanine loans
+Added: Preferred equity investments
+Added: Other loans (5)
Allowance for credit losses
1 unchanged sentence
Loans and investments, net
+Added: ARBOR REALTY TRUST, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
+Added: December 31, 2020
Bridge loans (4)
−Removed: Preferred equity investments
Mezzanine loans
+Added: Preferred equity investments
+Added: Other loans (5)
Allowance for credit losses
2 unchanged sentences
“Weighted Average Pay Rate” is a weighted average, based on the UPB of each loan in our portfolio, of the interest rate required to be paid monthly as stated in the individual loan agreements.
−Removed: Certain loans and investments that require an additional rate of interest “Accrual Rate” to be paid at maturity are not included in the weighted average pay rate as shown in the table.
−Removed: The “First Dollar Loan-to-Value ("LTV") Ratio” is calculated by comparing the total of our senior most dollar and all senior lien positions within the capital stack to the fair value of the underlying collateral to determine the point at which we will absorb a total loss of our position.
+Added: Certain loans and investments that require an accrual rate to be paid at maturity are not included in the weighted average pay rate as shown in the table.
+Added: The “First Dollar Loan-to-Value (“LTV”) Ratio” is calculated by comparing the total of our senior most dollar and all senior lien positions within the capital stack to the fair value of the underlying collateral to determine the point at which we will absorb a total loss of our position.
The “Last Dollar LTV Ratio” is calculated by comparing the total of the carrying value of our loan and all senior lien positions within the capital stack to the fair value of the underlying collateral to determine the point at which we will initially absorb a loss.
−Removed: As of December 31, 2020 and 2019, bridge loans included 38 and 11 , respectively, single-family rental loans with an aggregate UPB of $ 309.2 million and $ 66.7 million, respectively, of which $ 88.1 million and $ 30.0 million, respectively, was funded.
−Removed: As of December 31, 2020 and 2019, other included 22 and 12 , respectively, single-family rental permanent loans with an aggregate UPB of $ 68.4 million and $ 41.6 million, respectively, and, at December 31, 2019, there were 9 purchased loans with an aggregate UPB of $ 28.6 million.
+Added: As of December 31, 2021 and 2020, bridge loans included 120 and 38 , respectively, of SFR loans with a total gross loan commitment amount of $ 804.6 million and $ 309.2 million, respectively, of which $ 408.2 million and $ 88.1 million, respectively, was funded.
+Added: As of December 31, 2021 and 2020, other loans included 2 variable rate SFR permanent loans and 22 SFR permanent loans, respectively.
+Added: During the first quarter of 2021, the Structured Business transferred 21 fixed rate SFR permanent loans with a UPB of $ 65.2 million to the Agency Business (all of which were outstanding as of December 31, 2020), which represented all fixed rate SFR permanent loans originated prior to such transfer.
+Added: Fixed rate SFR permanent loans are reported through the Agency Business beginning in 2021 and classified as held-for-sale.
+Added: See Note 4 for further details.
Concentration of Credit Risk
1 unchanged sentence
At December 31, 2020, the UPB related to 22 loans with five different borrowers represented 12 % of total assets.
−Removed: During both 2020 and 2019, no single loan or investment represented more than 10% of our total assets and no single
−Removed: ARBOR REALTY TRUST, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
−Removed: December 31, 2020
−Removed: investor group generated over 10% of our revenue.
+Added: During both 2021 and 2020, 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 18 for details on our concentration of related party loans and investments.
3 unchanged sentences
This metric provides a helpful snapshot of portfolio quality and credit risk.
−Removed: 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"
−Removed: and that possess deteriorating credit quality.
+Added: 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.
11 unchanged sentences
Total Multifamily
+Added: Single-Family Rental:
Percentage of portfolio
Special Mention
+Added: Total Single-Family Rental
Percentage of portfolio
Special Mention
−Removed: Total Healthcare
Percentage of portfolio
−Removed: Single-Family Rental:
−Removed: Percentage of portfolio
Special Mention
−Removed: Total Single-Family Rental
+Added: Total Healthcare
Percentage of portfolio
7 unchanged sentences
Percentage of portfolio
+Added: Special Mention
Percentage of portfolio
+Added: Percentage of portfolio
Geographic Concentration Risk
−Removed: As of December 31, 2020, 19 % and 11 % of the outstanding balance of our loan and investment portfolio had underlying properties in New York and Texas, respectively.
+Added: As of December 31, 2021, 19 % and 12 % of the outstanding balance of our loan and investment portfolio had underlying properties in Texas and Florida, respectively.
As of December 31, 2020, 19 % and 11 % of the outstanding balance of our loan and investment portfolio had underlying properties in New York and Texas, respectively.
9 unchanged sentences
Allowance for credit losses:
−Removed: Beginning balance, prior to adoption of CECL
−Removed: Impact of adopting CECL - January 1, 2020
+Added: Beginning balance
Provision for credit losses (net of recoveries)
2 unchanged sentences
Allowance for credit losses:
+Added: Beginning balance, prior to adoption of CECL
+Added: Impact of adopting CECL - January 1, 2020
+Added: Provision for credit losses (net of recoveries)
+Added: Ending balance
Year Ended December 31, 2019
Allowance for credit losses
−Removed: Beginning balance
−Removed: Provision for credit losses
−Removed: Recoveries of reserves
−Removed: Ending balance
−Removed: The increase in the provision for credit losses during 2020 of $ 60.0 million, compared to the January 1, 2020 cumulative-effect adjustment upon adoption of CECL of $ 17.3 million, is primarily attributed to the significant adverse change in the economic outlook due to the COVID-19 pandemic.
−Removed: Our estimate of allowance for credit losses on our structured loans and investments during 2020, including related unfunded loan commitments, was based on a reasonable and supportable forecast period that was adjusted for the expectations that the markets we operate in will experience declines in economic conditions, increases in unemployment rates and other market driven factors largely the result of the COVID-19 pandemic that will likely impact loan delinquencies, modifications and potential risk of loss.
−Removed: For the periods beyond the reasonable and supportable forecast, we reverted to our historical loss rate, which was adjusted to address for factors that are not present in our existing portfolio.
−Removed: We also made adjustments for loans that are expected to extend based on available extension options and the timing of their maturities in relation to current economic conditions.
−Removed: During 2018, we determined that the fair value of the underlying collateral (land development project) securing six loans with a carrying value of $ 121.4 million was less than the net carrying value of the loans, which resulted in a provision for loan losses of $ 12.3 million.
−Removed: We also fully reserved a bridge loan and recorded a provision for loan loss of $ 1.7 million.
−Removed: In addition, during 2018, we received $ 31.6 million to settle a non-performing preferred equity investment in a hotel property with a UPB of $ 34.8 million and a net carrying value of $ 29.1 million, resulting in a charge-off of $ 3.2 million and a reserve recovery of $ 2.5 million.
−Removed: We also received payments and recorded recoveries of $ 3.1 million related to previously written-off loans and investments, which are included as a component of provision for loan losses (net of recoveries) on the consolidated statements of income.
+Added: Our estimate of allowance for credit losses on our structured loans and investments, including related unfunded loan commitments, was based on a reasonable and supportable forecast period that reflects an improving macroeconomic outlook based on recent observable data, including increasing property values, decreases in unemployment rates, low interest rates and other market factors, including continued optimism in the COVID-19 pandemic, partially offset by rising inflation.
The expected credit losses over the contractual period of our loans also include the obligation to extend credit through our unfunded loan commitments.
−Removed: Our CECL allowance for unfunded loan commitments are adjusted quarterly and correspond with the associated outstanding loans.
−Removed: As of December 31, 2020, we had outstanding unfunded commitments of $ 353.8 million that we are obligated to fund as borrowers meet certain requirements.
−Removed: As of December 31, 2020, accrued interest receivable related to our loans totaling $ 41.6 million was excluded from the estimate of credit losses and is included in other assets on the consolidated balance sheet.
+Added: Our current expected credit loss (“CECL”) allowance for unfunded loan commitments are adjusted quarterly and correspond with the associated outstanding loans.
+Added: As of December 31, 2021 and 2020, we had outstanding unfunded commitments of $ 975.2 million and $ 353.8 million, respectively, that we are obligated to fund as borrowers meet certain requirements.
+Added: As of December 31, 2021 and 2020, accrued interest receivable related to our loans totaling $ 58.3 million and $ 41.6 million, respectively, was excluded from the estimate of credit losses and is included in other assets on the consolidated balance sheets.
ARBOR REALTY TRUST, INC.
2 unchanged sentences
December 31, 2020
−Removed: All of our structured loans and investments are collateralized by real estate assets, and as such, the measurement of credit losses may be based on the difference between the fair value of the underlying collateral and the carrying value of the assets as of the period end.
+Added: All of our structured loans and investments are secured by real estate assets or by interests in real estate assets, and, as such, the measurement of credit losses may be based on the difference between the fair value of the underlying collateral and the carrying value of the assets as of the period end.
A summary of our specific loans considered impaired by asset class is as follows (in thousands):
December 31, 2021
+Added: Allowance for
+Added: Credit Losses
December 31, 2020
−Removed: (1) Represents the UPB of ten and five impaired loans (less unearned revenue and other holdbacks and adjustments) by asset class at December 31, 2020 and 2019, respectively.
+Added: (1) Represents the UPB of eight and ten impaired loans (less unearned revenue and other holdbacks and adjustments) by asset class at December 31, 2021 and 2020, respectively.
There were no loans for which the fair value of the collateral securing the loan was less than the carrying value of the loan for which we had not recorded a provision for credit loss as of December 31, 2021, 2020 and 2019.
−Removed: At December 31, 2020, seven loans with an aggregate net carrying value of $ 53.8 million, net of related loan loss reserves of $ 6.5 million, were classified as non-performing and, at December 31, 2019, three loans with an aggregate net carrying value of $ 1.8 million, net of related loan loss reserves of $ 1.7 million, were classified as non-performing.
+Added: At December 31, 2021, three loans with an aggregate net carrying value of $ 20.1 million, net of related loan loss reserves of $ 2.6 million, were classified as non-performing and, at December 31, 2020, seven loans with an aggregate net carrying value of $ 53.8 million, net of related loan loss reserves of $ 6.5 million, were classified as non-performing.
Income from non-performing loans is generally recognized on a cash basis when it is received.
5 unchanged sentences
In addition, we have six loans with a carrying value totaling $ 121.4 million at December 31, 2021, that are collateralized by a land development project.
−Removed: These loans were scheduled to mature in September 2020 and we are currently in negotiations with the borrower to extend the maturity.
The loans do not carry a current pay rate of interest, however, five of the loans with a carrying value totaling $ 112.0 million entitle us to a weighted average accrual rate of interest of 7.91 %.
4 unchanged sentences
December 31, 2020
−Removed: 31, 2020 and 2019, we had a cumulative allowance for credit losses of $ 71.4 million and $ 61.4 million, respectively, related to these loans.
+Added: December 31, 2021 and 2020, we had a cumulative allowance for credit losses of $ 71.4 million related to these loans.
The loans are subject to certain risks associated with a development project including, but not limited to, availability of construction financing, increases in projected construction costs, demand for the development's outputs upon completion of the project, and litigation risk.
1 unchanged sentence
At both December 31, 2021 and 2020, we had no loans contractually past due 90 days or more that are still accruing interest.
−Removed: During both 2020 and 2019, interest income recognized on nonaccrual loans was de minimis.
−Removed: In the fourth quarter of 2019, we purchased $ 50.0 million of a $ 110.0 million bridge loan, which is collateralized by a hotel property and scheduled to mature in December 2022.
−Removed: In the first quarter of 2020, we recorded a $ 7.5 million allowance for credit losses due to a reduction in the appraisal value of the property.
−Removed: In August 2020, we purchased the remaining $ 60.0 million bridge loan at a discount for $ 39.9 million, which we determined had experienced a more than insignificant deterioration in credit quality since origination and, therefore, deemed to be a purchased loan with credit deterioration.
−Removed: The total discount received of $ 20.1 million was classified as a noncredit discount and no portion of the discount was allocated to allowance for credit losses at the date of purchase since the appraised value of the property is greater than the purchase price.
−Removed: Shortly after the purchase, we entered into a forbearance agreement with the borrower to temporarily reduce the interest rate from LIBOR plus 3.00 % with a 1.50 % LIBOR floor to a pay rate of 1.00 % and to include a $ 10.0 million principal reduction if the loan is paid-off by March 2, 2021.
−Removed: In January 2021, we entered into a second forbearance agreement which temporarily eliminated the pay rate, extended the principal reduction payoff deadline to June 30, 2021 and increased the interest rate to 9.50 %, which is the default rate.
−Removed: The payment of the interest is deferred to payoff.
−Removed: In August 2020, we entered into a loan modification agreement on a $ 26.5 million bridge loan with an interest rate of LIBOR plus 6.00 % with a 2.375 % LIBOR floor and a $ 6.1 million mezzanine loan with a fixed rate of 12 % collateralized by a retail property to:
+Added: During 2021, there was no interest income recognized on nonaccrual loans, and in 2020 the amount was de minimis.
+Added: In 2020, we entered into a loan modification agreement on a $ 26.5 million bridge loan with an interest rate of LIBOR plus 6.00 % with a 2.375 % LIBOR floor and a $ 6.1 million mezzanine loan with a fixed rate of 12 % collateralized by a retail property to:
(1) reduce the interest rate on both loans to the greater of:
−Removed: (i) LIBOR plus 5.50 % and (ii) 6.50 % , and (2) to extend the maturity date three years to December 2024.
+Added: (i) LIBOR plus 5.50 % and (ii) 6.50 % , and (2) to extend the maturity three years to December 2024.
A portion of the foregoing interest equal to 2.00 % will be deferred to payoff and will be waived if the loan is paid off by December 31, 2022.
−Removed: The loan modification agreement also includes a $ 6.0 million required principal paydown, which occurred at the closing of the modification transaction, and an $ 8.0 million principal reduction once the borrower deposits an additional reserve deposit of approximately $ 4.6 million by December 31, 2021.
−Removed: We have the ability to potentially recapture up to $ 8.0 million of the principal reduction to the extent that the property is sold or refinanced in excess of the debt.
+Added: The loan modification agreement also included a $ 6.0 million required principal paydown, which occurred at the closing of the modification transaction, and an $ 8.0 million principal reduction once the borrower deposited an additional reserve of $ 4.6 million in December 31, 2021, which was charged-off against the previously recorded allowance for credit losses.
+Added: In 2019, we purchased $ 50.0 million of a $ 110.0 million bridge loan, which was collateralized by a hotel property and scheduled to mature in December 2022.
+Added: In 2020, we recorded a $ 7.5 million allowance for credit losses due to a reduction in the appraised value of the property.
+Added: In 2020, we purchased the remaining $ 60.0 million bridge loan at a discount for $ 39.9 million, which we determined had experienced a more than insignificant deterioration in credit quality since origination and, therefore, deemed to be a purchased loan with credit deterioration.
+Added: The $ 20.1 million discount was classified as a noncredit discount and no portion of the discount was allocated to allowance for credit losses at the date of purchase since the appraised value of the property was greater than the purchase price.
+Added: Shortly after the purchase, we entered into a forbearance agreement with the borrower to temporarily reduce the interest rate from LIBOR plus 3.00 % with a 1.50 % LIBOR floor to a pay rate of 1.00 % and to include a $ 10.0 million principal reduction if the loan is paid off by March 2, 2021.
+Added: In January 2021, we entered into a second forbearance agreement which temporarily eliminated the pay rate, extended the principal reduction payoff deadline to June 30, 2021 and increased the interest rate to an unaccrued default rate of 9.50 %, which was deferred till payoff.
+Added: In June 2021, we received $ 95.0 million for full satisfaction of these loans, reversed the $ 7.5 million allowance for credit losses and recorded interest income of $ 3.5 million.
These two loan modifications were deemed troubled debt restructurings.
−Removed: There were no loan modifications, refinancing’s and/or extensions during 2019 that were considered troubled debt restructurings.
+Added: There were no other loan modifications, refinancing’s and/or extensions during 2021 or 2020 that were considered troubled debt restructurings.
Given the transitional nature of some of our real estate loans, we may require funds to be placed into an interest reserve, based on contractual requirements, to cover debt service costs.
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Private Label
+Added: SFR - Fixed Rate
Fair value of future MSR
1 unchanged sentence
Loans held-for-sale, net
−Removed: During 2020, 2019 and 2018, we sold $ 6.59 billion, $ 4.40 billion and $ 4.92 billion, respectively, of loans held-for-sale and recorded gain on sales of $ 89.5 million, $ 61.1 million and $ 65.5 million, respectively.
−Removed: Included in the total loans sold in the second quarter of 2020 were Private Label loans totaling $ 727.2 million, which were sold to an unconsolidated affiliate of ours who pooled and securitized the loans in May 2020.
−Removed: We retained the most subordinate class of certificates in the securitization totaling $ 63.6 million in satisfaction of credit risk retention requirements (see Note 7 for details), and are the primary servicer of the mortgage loans.
+Added: During 2021, 2020 and 2019, we sold $ 6.42 billion, $ 6.59 billion and $ 4.40 billion, respectively, of loans held-for-sale and recorded gain on sales, including fees, of $ 123.0 million, $ 94.6 million and $ 65.7 million, respectively.
+Added: Included in the total loans sold during 2021 and 2020 were Private Label loans totaling $ 985.1 million and $ 727.2 million, respectively, which were sold to unconsolidated affiliates of ours who pooled and securitized the loans.
+Added: We retained the most subordinate class of certificates in the 2021 and 2020 securitizations totaling $ 85.7 million and $ 63.6 million, respectively, in satisfaction of credit risk retention requirements (see Note 7 for details), and we are also the primary servicer of the mortgage loans.
At December 31, 2021 and 2020, there were no loans held-for-sale that were 90 days or more past due and there were no loans held-for-sale that were placed on a non-accrual status.
+Added: Subsequent Event.
+Added: In February 2022, we closed a Private Label securitization totaling $ 489.3 million and retained the most subordinate certificates totaling $ 43.4 million.
Note 5 — Capitalized Mortgage Servicing Rights
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Geographic Concentrations
−Removed: North Carolina
Private Label
+Added: North Carolina
+Added: SFR - Fixed Rate
December 31, 2020
North Carolina
+Added: Private Label
(1) Excludes loans which we are not collecting a servicing fee.
−Removed: (2) Represents loans we service in connection with our Private Label securitization in May 2020 (see Note 4 for details).
(2) No other individual state represented 4% or more of the total.
At December 31, 2021 and 2020, our weighted average servicing fee was 44.9 basis points and 45.4 basis points, respectively.
−Removed: At December 31, 2020 and 2019, we held total escrow balances of $ 1.29 billion and $ 947.1 million, respectively, which is not reflected in our consolidated balance sheets.
+Added: At December 31, 2021 and 2020, we held total escrow balances of $ 1.99 billion and $ 1.29 billion, respectively, which is not reflected in our consolidated balance sheets.
Of the total escrow balances, we held $ 682.5 million and $ 867.6 million at December 31, 2021 and 2020, respectively, related to loans we are servicing within our Agency Business.
−Removed: These escrows are maintained in separate accounts
+Added: These escrows are maintained in separate accounts at several federally insured depository institutions, which may exceed FDIC insured limits.
+Added: We earn interest income on the total
ARBOR REALTY TRUST, INC.
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December 31, 2020
−Removed: at several federally insured depository institutions, which may exceed FDIC insured limits.
−Removed: We earn interest income on the total escrow deposits, generally based on a market rate of interest negotiated with the financial institutions that hold the escrow deposits.
+Added: escrow deposits, generally based on a market rate of interest negotiated with the financial institutions that hold the escrow deposits.
Interest earned on total escrows, net of interest paid to the borrower, was $ 4.2 million, $ 7.1 million and $ 17.3 million during 2021, 2020 and 2019, respectively, and is a component of servicing revenue, net in the consolidated statements of income.
Note 7 – Securities Held-to-Maturity
+Added: Agency Private Label Certificates.
+Added: In connection with our Private Label securitizations, we retain the most subordinate class of the APL certificates in satisfaction of credit risk retention requirements.
+Added: As of December 31, 2021, we retained APL certificates with an initial face value of $ 149.4 million, which were purchased at a discount for $ 91.4 million.
+Added: These certificates are collateralized by 5-year to 10-year fixed rate first mortgage loans on multifamily properties, bear interest at an initial weighted average variable rate of 4.12 % and have an estimated weighted average remaining maturity of 8.5 years.
+Added: The weighted average effective interest rate was 9.11 % and 10.15 % at December 31, 2021 and 2020, respectively, including the accretion of a portion of the discount deemed collectible.
+Added: Approximately $ 3.6 million is estimated to mature after one year through five years and $ 145.8 million is estimated to mature after five years through ten years.
Agency B Piece Bonds.
Freddie Mac may choose to hold, sell or securitize loans we sell to them under the Freddie Mac SBL program.
−Removed: As part of the securitizations under the SBL program, we have the option to purchase the B Piece bond through a bidding process, which represents the bottom 10%, or highest risk, of the securitization.
+Added: As part of the securitizations under the SBL program, we have the ability to purchase the B Piece bond through a bidding process, which represents the bottom 10%, or highest risk, of the securitization.
As of December 31, 2021, we retained 49 % , or $ 106.2 million initial face value, of seven B Piece bonds, which were purchased at a discount for $ 74.7 million, and sold the remaining 51 % to a third-party at par.
These securities are collateralized by a pool of multifamily mortgage loans, bear interest at an initial weighted average variable rate of 3.74 % and have an estimated weighted average remaining maturity of 6.2 years.
−Removed: The weighted average effective interest rate was 10.85 % at both December 31, 2020 and 2019, including the accretion of a portion of the discount deemed collectible.
+Added: The weighted average effective interest rate was 11.32 % and 10.85 % at December 31, 2021 and 2020, respectively, including the accretion of a portion of the discount deemed collectible.
Approximately $ 11.2 million is estimated to mature within one year, $ 28.8 million is estimated to mature after one year through five years, $ 3.3 million is estimated to mature after five years through ten years and $ 18.1 million is estimated to mature after ten years.
−Removed: Agency Private Label Certificates.
−Removed: In connection with our $ 727.2 million Private Label securitization in May 2020, we retained the most subordinate class of certificates with an initial face value of $ 63.6 million (APL certificates).
−Removed: We purchased the APL certificates at a discount for $ 37.9 million, which are collateralized by a pool of 40 fixed rate 10-year mortgage loans secured by first mortgage loans on 49 multifamily properties, bear interest at an initial weighted average variable rate of 4.95 % and have an estimated weighted average remaining maturity of 9.0 years.
−Removed: The weighted average effective interest rate was 10.15 % at December 31, 2020 and the full $ 63.6 million is expected to mature after five years through ten years.
−Removed: Structured Single-Family Rental Bonds (“SFR bonds”).
−Removed: During the fourth quarter of 2020, we reclassified our Class A2 SFR bonds with a carrying value of $ 20.0 million to available-for-sale from held-to-maturity as a result of a change in our intent to hold the securities to maturity due to an isolated and nonrecurring event.
−Removed: We do not anticipate sales of any of our remaining securities classified as held-to-maturity in the future.
−Removed: During the fourth quarter of 2020, we sold one of our $ 10.0 million SFR bonds, and in January 2021, we sold the remaining $ 10.0 million SFR bond to third-party investors for an amount slightly below par.
−Removed: The $ 10.0 million SFR bond that remained at December 31, 2020 was included as a component of other assets in the consolidated balance sheets.
A summary of our securities held-to-maturity is as follows (in thousands):
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December 31, 2021
−Removed: B Piece bonds
APL certificates
−Removed: December 31, 2019
B Piece bonds
−Removed: ARBOR REALTY TRUST, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 31, 2020
+Added: APL certificates
+Added: B Piece bonds
A summary of the changes in the allowance for credit losses for our securities held-to-maturity is as follows (in thousands):
Year Ended December 31, 2021
−Removed: Beginning balance, prior to adoption of CECL
−Removed: Impact of adopting CECL – January 1, 2020
−Removed: Provision for credit loss expense
+Added: Beginning balance
+Added: Provision for credit loss expense/(reversal)
Ending balance
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As of December 31, 2021, no other-than-temporary impairment was recorded on our held-to-maturity securities.
−Removed: During 2020, 2019 and 2018, we recorded interest income (including the amortization of discount) of $ 9.7 million, $ 9.9 million and $ 5.8 million, respectively, related to these investments.
+Added: ARBOR REALTY TRUST, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
+Added: December 31, 2020
+Added: We recorded interest income (including the amortization of discount) related to these investments of $ 13.2 million, $ 9.7 million and $ 9.9 million during 2021, 2020 and 2019, respectively.
Note 8 —Investments in Equity Affiliates
We account for all investments in equity affiliates under the equity method.
−Removed: A summary of our investments in equity affiliates is as follows (in thousands):
+Added: A summary of these investments is as follows (in thousands):
UPB of Loans to
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AMAC Holdings III LLC
+Added: Fifth Wall Ventures III
North Vermont Avenue
3 unchanged sentences
East River Portfolio
−Removed: Arbor Residential Investor LLC.
−Removed: In 2015, we invested $ 9.6 million for a 50 % interest in Arbor Residential Investor LLC (“ARI”), with our former manager (ACM) holding the remaining 50 %.
+Added: Arbor Residential Investor LLC (“ARI”).
+Added: We invested $ 9.6 million for a 50 % interest in ARI, with our former manager (ACM) holding the remaining 50 %.
ARI was formed to hold a 50 % interest in Wakefield Investment Holdings LLC (“Wakefield”), an entity that was formed with a third-party to hold a controlling interest ( 65 %) in a residential mortgage banking business.
ARI has no other assets, liabilities or activity other than its investment in Wakefield.
−Removed: At December 31, 2020, our indirect interest in the residential mortgage banking business was 16.3 %.
+Added: In January 2021, an equity investor in the underlying residential mortgage banking business exercised their right to purchase an additional interest in this investment, which decreased our indirect interest from 16.3 % to 12.3 %.
+Added: The allocation of income is based on the underlying agreements, which may be different than our indirect interest, and was 9.2 % as of December 31, 2021.
We account for our ownership interest in ARI under the equity method of accounting and ARI accounts for its ownership interest in Wakefield under the equity method of accounting.
−Removed: During 2020, 2019 and 2018, we recorded income of $ 75.7 million, $ 7.2 million and $ 0.7 million, respectively, to income from equity affiliates in the consolidated statements of income, and during 2020, we received $ 43.2 million in cash distributions from this investment, which were classified as a return on capital.
−Removed: During 2018, we made a $ 2.4 million payment for our proportionate share of the litigation settlement, which was distributed back to us by our equity affiliate.
−Removed: Because of the significance of the operating results of this investment in 2020, we have included the audited financial statements of Wakefield in this report.
−Removed: Subsequent Event.
−Removed: In January 2021, an equity investor in the underlying residential mortgage banking business exercised their right to purchase an additional interest in this investment, which decreased our indirect interest to 12.3 %.
−Removed: ARBOR REALTY TRUST, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
−Removed: December 31, 2020
+Added: During 2021, 2020 and 2019, we recorded income of $ 34.6 million, $ 75.7 million and $ 7.2 million, respectively, to income from equity affiliates in the consolidated statements of income.
+Added: We also received $ 28.0 million and $ 43.2 million in cash distributions from this investment during 2021 and 2020, respectively, which were classified as returns of capital.
+Added: We have included the audited financial statements of Wakefield in this report.
AMAC Holdings III LLC (“AMAC III”).
−Removed: In 2019, we committed to a $ 30.0 million investment (of which $ 11.7 million was funded as of December 31, 2020) for an 18 % interest in a multifamily-focused commercial real estate investment fund that is sponsored and managed by our chief executive officer and one of his immediate family members.
−Removed: During 2020 and 2019, we received cash distributions from this investment totaling $ 0.1 million and $ 0.2 million, respectively, which were classified as a return of capital.
−Removed: The loss associated with this investment for 2020 was $ 0.9 million and the operating results for 2019 were de minimis.
+Added: We committed to a $ 30.0 million investment (of which $ 20.3 million was funded as of December 31, 2021) for an 18 % interest in a multifamily-focused commercial real estate investment fund that is sponsored and managed by our chief executive officer and one of his immediate family members.
+Added: During 2021 and 2020, the loss recorded from this investment was $ 1.3 million and $ 0.9 million, respectively, and the operating results for 2019 were de minimus.
+Added: During 2021 and 2020, we received cash distributions from this investment totaling $ 3.8 million and $ 0.1 million, respectively, which were classified as returns of capital.
+Added: Fifth Wall Ventures III.
+Added: During the fourth quarter of 2021, we committed to a $ 25.0 million investment (of which $ 5.4 million was funded as of December 31, 2021) for a 7.6 % interest in two related private equity funds whose investment objective is to invest primarily in technology, technology-enabled or technology-related companies that are relevant or complementary to the build environment, including real estate or real estate related industries.
+Added: We have no role in the management of the investment funds.
+Added: Operating results from this investment were de minimis in 2021.
North Vermont Avenue.
−Removed: In 2019, we invested $ 2.4 million for an initial 85 % noncontrolling interest in a joint venture that acquired three parcels of land, which currently has three residential structures, a commercial structure and a parking lot.
+Added: We invested $ 2.4 million for an initial 85 % noncontrolling interest in a joint venture that acquired three parcels of land with multiple structures.
The joint venture intends to tear down the existing structures and construct a new 202-unit multifamily complex with ground floor retail.
Operating results from this investment were de minimis for all periods presented.
+Added: ARBOR REALTY TRUST, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
+Added: December 31, 2020
Lightstone Value Plus REIT L.P.
−Removed: We own a $ 1.9 million interest in an unconsolidated joint venture that holds common operating partnership units of Lightstone Value Plus REIT L.P.
+Added: We own a $ 1.9 million interest in a joint venture that holds common operating partnership units of Lightstone Value Plus REIT L.P.
(“Lightstone”).
−Removed: We also own a 50 % noncontrolling interest in an unconsolidated joint venture, JT Prime, which holds common operating partnership units of Lightstone at a carrying value of $ 0.4 million.
+Added: We also own a 50 % noncontrolling interest in a joint venture, JT Prime, which holds common operating partnership units of Lightstone at a carrying value of $ 0.4 million.
Operating results from these investments were de minimis for all periods presented.
2 unchanged sentences
We provided a $ 1.7 million first mortgage loan to an affiliated entity to acquire property adjacent to the original property, which is scheduled to mature in September 2025 and bears interest at LIBOR plus 4.0 %.
−Removed: During 2018, we determined that this investment exhibited indicators of impairment and, as a result of an impairment analysis performed;
−Removed: we recorded an other-than-temporary impairment of $ 2.2 million for the full carrying amount of this investment, which was recorded in income from equity affiliates in the consolidated statements of income.
−Removed: Also during 2018, we recorded a provision for loan loss of $ 1.7 million, fully reserving the first mortgage loan.
+Added: During 2018, we determined that this investment exhibited indicators of impairment and recorded an other-than-temporary impairment of $ 2.2 million for the full carrying amount of this investment and fully reserved the $ 1.7 million first mortgage loan.
Lexford Portfolio.
−Removed: We own a $ 44,000 noncontrolling equity interest in Lexford, a portfolio of multifamily assets.
−Removed: In 2020, 2019 and 2018, we received distributions from this investment and recognized income totaling $ 1.1 million, $ 3.5 million and $ 2.5 million, net of expenses, respectively.
−Removed: As a result of COVID-19, Lexford has temporarily suspended paying distributions to its equity holders.
+Added: We own a less than $ 0.1 million noncontrolling equity interest in Lexford, a portfolio of multifamily assets.
+Added: In 2020 and 2019, we received distributions from this investment and recognized income totaling $ 1.1 million and $ 3.5 million, net of expenses, respectively.
+Added: As a result of COVID-19, Lexford did not make any distributions to its equity holders in 2021.
East River Portfolio.
2 unchanged sentences
Operating results from this investment were de minimis for all periods presented.
+Added: Tapestry on the River.
+Added: During the third quarter of 2021, we invested $ 14.0 million for a 48.9 % equity interest in a joint venture with a third-party that was formed to invest in an apartment community.
+Added: During the fourth quarter of 2021, this joint venture was dissolved, and we received a $ 14.7 million distribution and recorded a $ 0.7 million gain.
+Added: Emerson at Forney.
+Added: During the third quarter of 2021, we invested $ 3.0 million for an 11.1 % equity interest in a joint venture with a third-party that was formed to invest in an apartment community.
+Added: During the fourth quarter of 2021, this joint venture was dissolved, and we received a $ 3.2 million distribution and recorded a $ 0.2 million gain.
+Added: Century Summerfield Apartments.
+Added: During the first quarter of 2021, we funded $ 17.0 million of a total committed investment of $ 20.0 million for a 50 % equity interest in a joint venture with a third-party that was formed to invest in an apartment community.
+Added: During the second quarter of 2021, this joint venture was dissolved, and we received a $ 17.2 million distribution and recorded a $ 0.2 million gain.
See Note 18 for details of certain investments described above.
−Removed: Note 9 – Real Estate Owned
−Removed: A summary of our real estate assets is as follows (in thousands):
−Removed: December 31, 2020
−Removed: December 31, 2019
−Removed: Building and intangible assets
−Removed: Impairment loss
−Removed: Accumulated depreciation and amortization
−Removed: Real estate owned, net
−Removed: In the third quarter of 2020, we sold our hotel property for $ 8.4 million and recorded a $ 1.9 million loss, which is included in loss on sale of real estate.
−Removed: In addition, we paid $ 2.5 million in connection with a litigation settlement related to this property, which is included in selling and administrative expenses.
+Added: Note 9 — Goodwill and Other Intangible Assets
+Added: The goodwill balance at both December 31, 2021 and 2020 was $ 56.6 million.
ARBOR REALTY TRUST, INC.
2 unchanged sentences
December 31, 2020
−Removed: In November 2020, we sold a non-operating property for $ 4.1 million and recorded a $ 1.0 million gain, which was included in loss on sale of real estate.
−Removed: This non-operating property was previously included in other assets on the consolidated balance sheets.
−Removed: Our office building was fully occupied by a single tenant until April 2017, when the lease expired.
−Removed: The building is currently vacant.
−Removed: In the fourth quarter of 2020, we received $ 1.5 million related to a signage easement sold on this property and recorded the proceeds as a reduction of the carrying cost.
−Removed: Through site visits and discussions with market participants, we determined that our real estate assets exhibited indicators of impairment and, based on our impairment analyses performed, we recorded impairment losses of $ 1.0 million and $ 2.0 million in 2019 and 2018, respectively.
−Removed: Note 10 — Goodwill and Other Intangible Assets
−Removed: The goodwill balance at both December 31, 2020 and 2019 was $ 56.6 million.
Other Intangible Assets.
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Note 10 — Debt Obligations
−Removed: Credit Facilities and Repurchase Agreements
−Removed: Borrowings under our credit facilities and repurchase agreements are as follows ($ in thousands):
+Added: Credit and Repurchase Facilities
+Added: Borrowings under our credit and repurchase facilities are as follows ($ in thousands):
December 31, 2021
1 unchanged sentence
Structured Business
−Removed: $ 700 million joint repurchase facility
−Removed: $ 400 million repurchase facility
−Removed: $ 200 million repurchase facility
−Removed: $ 148.8 million loan specific credit facilities
−Removed: $ 100 million credit facility
−Removed: $ 100 million credit facility
−Removed: $ 100 million repurchase facility
−Removed: $ 50 million credit facility
−Removed: $ 50 million credit facility
−Removed: $ 30 million working capital facility
−Removed: $ 25 million credit facility
−Removed: $ 1.4 million master security agreements
−Removed: Repurchase facilities - securities (2)
+Added: $ 2.00 B joint repurchase facility
+Added: $ 1.00 B repurchase facility
+Added: $ 450 M repurchase facility
+Added: $ 398.7 M repurchase facility (2)
+Added: $ 325 M repurchase facility
+Added: $ 225 M credit facility
+Added: $ 200 M credit facility
+Added: $ 153.9 M loan specific credit facilities
+Added: $ 50 M credit facility
+Added: $ 30 M working capital facility
+Added: $ 25 M credit facility
+Added: $ 25 M credit facility
+Added: $ 1 M master security agreement
+Added: Repurchase facility - securities (3)
Structured Business total
Agency Business
−Removed: $ 750 million ASAP agreement
−Removed: $ 400 million joint repurchase facility
−Removed: $ 400 million repurchase facility
−Removed: $ 325 million credit facility
−Removed: $ 250 million credit facility
−Removed: $ 150 million credit facility
+Added: $ 750 M ASAP agreement
+Added: $ 500 M joint repurchase facility
+Added: $ 500 M repurchase facility
+Added: $ 200 M credit facility
+Added: $ 150 M credit facility
+Added: $ 50 M credit facility
+Added: $ 1.3 M repurchase facility (2)
Agency Business total
2 unchanged sentences
The debt carrying value for the Agency Business at December 31, 2021 and 2020 was net of unamortized deferred finance costs of $ 4.4 million and $ 0.6 million, respectively.
+Added: (2) A portion of this repurchase facility was used to finance a $ 1.3 million fixed rate SFR permanent loan reported through our Agency Business.
These repurchase facilities are subject to margin call provisions associated with changes in interest spreads.
−Removed: As of December 31, 2020 and 2019, these facilities were collateralized by our CLO bonds retained and consolidated by us with a principal balance of zero and $ 234.9 million, respectively, B Piece bonds with a carrying value of $ 58.5 million and $ 68.7 million, respectively, and SFR bonds with a carrying value of $ 10.0 million and $ 20.0 million, respectively.
−Removed: During 2020, we significantly reduced the UPB of these facilities by $ 178.6 million to $ 38.5 million, primarily through a debt restructuring and the use of proceeds from our senior notes issued in the second quarter of 2020.
−Removed: Generally, our credit facilities and repurchase agreements have extension options that are at the discretion of the banking institutions in which we have long standing relationships with.
−Removed: These facilities typically renew annually and also include a "wind-down"
+Added: As of December 31, 2021 and 2020, these facilities were collateralized by B Piece bonds with a carrying value of $ 47.6 million and $ 57.8 million, respectively, and an SFR bond with a carrying value of $ 10.0 million at December 31, 2020, which are held by our Agency Business.
+Added: Effective January 1, 2022, several of our credit and repurchase facilities, in both our Structured Business and Agency Business, converted from a LIBOR-based interest rate to a SOFR-based interest rate for new financings.
+Added: Existing financings will continue to be at a LIBOR-based interest rate.
+Added: Generally, our credit and repurchase facilities have extension options that are at the discretion of the banking institutions in which we have long standing relationships with.
+Added: These facilities typically renew annually and also include a “wind-down” feature.
Joint Repurchase Facility.
−Removed: We have a $ 1.10 billion joint repurchase facility, which is shared between the Structured Business and the Agency Business, of which $ 600.0 million matures in March 2021 and $ 500.0 million matures in March 2022 with each maturity eligible for a one-year extension option.
−Removed: This facility is used to finance structured loans and includes an $ 800.0 million sublimit to finance Private Label loans, which expires in March 2021 unless that portion of the facility is extended through March 2022.
−Removed: There is no stated interest rate under the facility and the interest rate is determined on a loan-by-loan basis and may include a LIBOR floor
+Added: We have a $ 2.50 billion joint repurchase facility, which is shared between the Structured Business and the Agency Business, which matures in March 2024 with a one-year extension option.
+Added: This facility is used to finance structured loans and Private Label loans.
+Added: The interest rate under the facility is determined on a loan-by-loan basis and may include a floor equal to a pro rata share of the floors included in our originated loans.
+Added: The facility has a maximum advance rate of 80 % on structured loans and 85 % on Private Label loans and has a $ 150.0 million over advance available that bears interest at a rate of the applicable benchmark plus 5.75 % .
+Added: The over advance is available through March 2022.
+Added: If the estimated market value of the loans financed in this facility decrease, we may be required to pay down borrowings under this facility.
ARBOR REALTY TRUST, INC.
2 unchanged sentences
December 31, 2020
−Removed: equal to a pro rata share of the LIBOR floors included in our originated loans.
−Removed: The facility has a maximum advance rate of 80 % on all loans and has a $ 25.0 million over advance available to structured assets that bears interest at a rate of 650 basis points over LIBOR.
−Removed: If the estimated market value of the loans financed in this facility decrease, we may be required to pay down borrowings under this facility.
Structured Business.
−Removed: We utilize credit facilities and repurchase agreements with various financial institutions to finance our Structured Business loans and investments as described below.
−Removed: At December 31, 2020 and 2019, the weighted average interest rate for the credit facilities and repurchase agreements of our Structured Business, including certain fees and costs, such as structuring, commitment, non-use and warehousing fees, was 2.97 % and 4.39 %, respectively.
−Removed: The leverage on our loan and investment portfolio financed through our credit facilities and repurchase agreements, excluding the securities repurchase facilities, working capital facility and the master security agreements used to finance leasehold and capital expenditure improvements at our corporate office, was 69 % and 71 % at December 31, 2020 and 2019, respectively.
−Removed: We have a $ 400.0 million repurchase facility used to finance loans.
−Removed: The facility bears interest at a rate of 220 basis points over LIBOR with a LIBOR floor of 75 basis points and matures in September 2021, with quarterly extension options having an extended maturity date no later than March 2023.
−Removed: The facility has a maximum advance rate of 75 %.
−Removed: We have a $ 200.0 million repurchase facility to finance single-family rental properties.
−Removed: The facility bears interest at a rate of 275 basis points over LIBOR with a LIBOR floor of 25 basis points and matures in December 2021.
−Removed: The facility has a maximum advance rate of 85% .
−Removed: We have several loan specific credit facilities totaling $ 148.8 million used to finance individual bridge loans.
−Removed: The facilities bear interest at rates ranging from 220 to 250 basis points over LIBOR and fixed rates ranging from 3.50 % to 4.00 % and mature between June 2021 and December 2022.
−Removed: We have a $ 100.0 million credit facility to finance bridge loans that bears an interest rate ranging from 230 to 300 basis points over LIBOR depending on the property type financed, a LIBOR floor of 50 basis points and a July 2021 maturity date.
+Added: We utilize credit and repurchase facilities with various financial institutions to finance our Structured Business loans and investments as described below.
+Added: Many of these facilities have a maximum advance rate of between 75 % to 85 % depending on the asset type financed.
+Added: At December 31, 2021 and 2020, the weighted average interest rate for the credit and repurchase facilities of our Structured Business, including certain fees and costs, such as structuring, commitment, non-use and warehousing fees, was 2.51 % and 2.97 %, respectively.
+Added: The leverage on our loan and investment portfolio financed through our credit and repurchase facilities, excluding the securities repurchase facilities, working capital facility and the master security agreement used to finance leasehold and capital expenditure improvements at our corporate office, was 77 % and 69 % at December 31, 2021 and 2020, respectively.
+Added: We have a $ 1.00 billion repurchase facility used to finance loans that matures in December 2022, with one quarterly extension option through March 2023.
+Added: The interest rate on loans funded after January 21, 2021 is LIBOR plus 1.75 % with a 0.35 % LIBOR floor if utilization is above $ 250.0 million and LIBOR plus 2.00 % with up to a 0.35 % LIBOR floor if utilization is below $ 250.0 million.
+Added: For existing loans, the interest rate range will remain at LIBOR plus 2.00 % to 2.20 % with a 0.35 % LIBOR floor.
+Added: The interest rate spread increases by 0.20 % if the advance rate on a loan exceeds 75 %.
+Added: We have a $ 450.0 million repurchase facility to finance bridge loans that bears an interest rate ranging from LIBOR plus 1.75 % to 2.25 % for multifamily and LIBOR plus 2.00 % to 2.75 % for non-multifamily.
+Added: The facility matures in March 2023, with three one-year extension options through March 2026.
+Added: We have a $ 400.0 million repurchase facility to finance SFR properties that bears interest at a rate ranging from SOFR plus 1.75 % to 2.25 % with a 0.25 % SOFR floor, depending on the loan performance, and matures in December 2022.
+Added: We have a $ 200.0 million repurchase facility to finance multifamily bridge loans that the interest rate is determined on a loan-by-loan basis and matures in October 2023, with a one-year extension option.
+Added: The facility was temporarily increased to $ 325.0 million, which expires in April 2022.
+Added: We have a $ 225.0 million credit facility to finance SFR properties that bears interest at a rate of LIBOR plus 2.50 %, with an all-in floor rate range of 2.75 % to 3.85 %, depending on our deposit balance.
+Added: The facility matures in October 2022, with a one-year extension option.
+Added: We have a $ 200.0 million credit facility to finance bridge loans that matures in July 2022 and bears interest at a rate of SOFR plus 1.61 % for multifamily, SOFR plus 2.31 % for independent living and SOFR plus 2.56 % for assisted living.
This facility includes a $ 25.0 million sublimit to finance healthcare related loans.
−Removed: The facility has a maximum advance rate of 75 %.
−Removed: We have another $ 100.0 million credit facility to finance single-family rental properties that bears interest at a rate of 300 basis points over LIBOR with an interest rate floor of 4.00 % and matures in October 2022.
−Removed: The facility has a maximum advance rate of 75 %.
−Removed: We have a $ 100.0 million repurchase facility to finance multifamily bridge loans that the interest rate is determined on a loan-by-loan basis with a LIBOR floor of 50 basis points and matures in September 2021.
−Removed: The facility has a maximum advance rate of 75 %.
−Removed: We have a $ 50.0 million credit facility to finance multifamily loans that bears interest at a rate of 200 basis points over LIBOR and matures in April 2021, with a one-year extension option.
−Removed: This facility has a maximum advance rate of 80 %.
−Removed: We have another $ 50.0 million credit facility to finance single-family rental properties that bears interest at a rate of 250 basis points over LIBOR with an interest rate floor of 4.00 %.
−Removed: The facility matures in October 2022, with a one-year extension option, and has a maximum advance rate equal to the lesser of:
−Removed: (1) 75 % of the UPB, (2) 50 % of the appraised value of the collateral, or (3) 55 % to 65% of the projected cost of construction.
−Removed: We have a $ 30.0 million unsecured working capital line of credit that bears interest at a rate of 325 basis points over LIBOR with a LIBOR floor of 25 basis points.
−Removed: This line matures in November 2021 and is renewable annually.
−Removed: We have a $ 25.0 million credit facility used to purchase loans that bears interest at a rate of 225 basis points over LIBOR and matures in June 2022, with a one -year extension option.
−Removed: This facility has a maximum advance rate of 80%.
+Added: We have several loan specific credit facilities totaling $ 153.9 million used to finance individual bridge loans.
+Added: The facilities bear interest at rates ranging from LIBOR plus 2.20 % to 2.40 %, fixed rates ranging from 3.00 % to 4.00 %, and the greater of the prime rate or 3.25 % and mature between February 2022 and October 2024.
+Added: We have a $ 50.0 million credit facility to finance multifamily loans that bears interest at a rate of LIBOR plus 2.00 % and matures in April 2022.
+Added: We have a $ 30.0 million unsecured working capital line of credit that bears interest at a rate of LIBOR plus 3.25 % with a 0.25 % LIBOR floor.
+Added: This line matures in February 2022 and is typically renewed annually.
+Added: We have a $ 25.0 million credit facility to finance SFR properties that bears interest at a rate of LIBOR plus 2.50 %, with an all-in floor rate of 3.85 %, and which matures in October 2022.
+Added: We have a $ 25.0 million credit facility used to purchase loans that bears interest at a rate of SOFR plus 2.35 % and matures in June 2022, with a one-year extension option.
ARBOR REALTY TRUST, INC.
2 unchanged sentences
December 31, 2020
−Removed: We have two notes payable under master security agreements that were used to finance capital expenditures.
−Removed: The notes bear interest at a weighted average fixed rate of 4.10 % and mature between 2021 and 2022.
−Removed: We have four uncommitted repurchase facilities that are used to finance securities we retained in connection with our CLOs and our purchases of B Piece bonds from SBL program securitizations and SFR bonds.
−Removed: These facilities bear interest at rates ranging from 120 to 275 basis points over LIBOR and have no stated maturity dates.
+Added: We have a note payable under a master security agreement that was used to finance capital expenditures.
+Added: The note bears interest at a fixed rate of 4.01 % and matures in December 2022.
+Added: We have an uncommitted repurchase facility that is used to finance securities we retained in connection with our CLOs and our purchases of B Piece bonds from SBL program securitizations and SFR bonds.
+Added: This facility bears interest at rate of LIBOR plus 3.25 % with a 0.25 % LIBOR floor and has no stated maturity date.
Agency Business.
We utilize credit facilities with various financial institutions to finance substantially all of our loans held-for-sale as described below.
+Added: The financial institutions that provide these facilities generally have a security interest in the underlying mortgage notes that serve as collateral for these facilities.
We have a $ 750.0 million ASAP agreement with Fannie Mae providing us with a warehousing credit facility for mortgage loans that are to be sold to Fannie Mae and serviced under the Fannie Mae DUS program.
−Removed: The ASAP agreement is not a committed line, has no expiration date and bears interest at a rate of 115 basis points over SOFR, with a SOFR Floor of 25 basis points.
−Removed: We have a $ 400.0 million repurchase facility that bears interest at a rate of 150 basis points over LIBOR and matures in October 2021.
−Removed: The financial institution that provided this facility has a security interest in the underlying mortgage notes that serve as collateral for this facility.
−Removed: We have a $ 150.0 million credit facility that bears interest at a rate of 115 basis points over LIBOR and matures in March 2021.
−Removed: The facility was temporarily increased to $ 325.0 million, which expires in February 2021.
−Removed: The facility bears interest at a rate of 115 basis points over LIBOR for the initial $ 150.0 million and 140 basis points over LIBOR with a LIBOR floor of 25 basis points for amounts outstanding under the temporary increase.
−Removed: The financial institution that provided this facility has a security interest in the underlying mortgage notes that serve as collateral for this facility.
−Removed: We have a $ 100.0 million credit facility that bears interest at a rate of 115 basis points over LIBOR with a LIBOR floor of 50 basis points and matures in June 2021.
−Removed: This facility was temporarily increased to $ 250.0 million, which expires in February 2021.
−Removed: The financial institution that provided this facility has a security interest in the underlying mortgage notes that serve as collateral for this facility.
−Removed: We have another $ 150.0 million credit facility that bears interest at a rate of 140 basis points over LIBOR with a LIBOR floor of 25 basis points and matures in July 2021.
−Removed: This facility includes a $ 50.0 million sublimit for principal and interest advances we make as the primary servicer to Fannie Mae in connection with potential delinquent loans under the Fannie Mae forbearance program, which bears interest at a rate of 200 basis points over LIBOR with a LIBOR floor of 25 basis points.
−Removed: The financial institution that provided this facility has a security interest in the underlying mortgage notes that serve as collateral for this facility.
+Added: The ASAP agreement is not a committed line, has no expiration date and bears interest at a rate of SOFR plus 1.26 % with a 0.25 % SOFR floor.
+Added: We have a $ 500.0 million repurchase facility that bears interest at a rate of SOFR plus 1.48 % and matures in November 2022.
+Added: We have a $ 200.0 million credit facility that bears interest at a rate of LIBOR plus 1.35 % with a 0.25 % LIBOR floor and matures in March 2022.
+Added: We have a $ 150.0 million credit facility that bears interest at a rate of SOFR plus 1.46 % and matures in July 2022.
+Added: This facility includes a $ 50.0 million sublimit for principal and interest advances we make as the primary servicer to Fannie Mae in connection with potential delinquent loans under the Fannie Mae forbearance program, which bears interest at a rate of SOFR plus 1.86 %.
+Added: We have a $ 50.0 million credit facility that bears interest at a rate of LIBOR plus 1.30 % and matures in September 2022.
We have a $ 50.0 million letter of credit facility with a financial institution to secure obligations under the Fannie Mae DUS program and the Freddie Mac SBL program.
6 unchanged sentences
December 31, 2020
−Removed: We account for our CLO transactions on our consolidated balance sheet as financing facilities.
+Added: We account for CLO transactions on our consolidated balance sheet as financing facilities.
Our CLOs are VIEs for which we are the primary beneficiary and are consolidated in our financial statements.
6 unchanged sentences
(2) At December 31, 2021 and 2020, the aggregate weighted average note rate for our CLOs, including certain fees and costs, was 1.86 % and 1.93 % , respectively.
−Removed: (3) As of December 31, 2020 and 2019, there was no collateral deemed a credit risk.
+Added: (3) As of December 31, 2021 and 2020, there was no collateral deemed a “credit risk” as defined by the CLO indentures.
(4) Represents restricted cash held for principal repayments as well as for reinvestment in the CLOs.
Does not include restricted cash related to interest payments, delayed fundings and expenses totaling $ 133.7 million and $ 49.5 million at December 31, 2021 and 2020, respectively.
−Removed: In March 2020, we completed CLO XIII, issuing eight tranches of CLO notes through two newly-formed wholly-owned subsidiaries totaling $ 738.0 million.
−Removed: Of the total CLO notes issued, $ 668.0 million were investment grade notes issued to third party investors and $ 70.0 million were below investment grade notes retained by us.
−Removed: As of the CLO closing date, the notes were secured by a portfolio of loan obligations with a face value of $ 640.5 million, consisting primarily of bridge loans that were contributed from our existing loan portfolio.
−Removed: The financing has a three -year replacement period that allows the principal proceeds and sale proceeds (if any) of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture.
+Added: In December 2021, we completed CLO 17, issuing eight tranches of CLO notes through two wholly-owned subsidiaries totaling $ 1.91 billion.
+Added: Of the total CLO notes issued, $ 1.71 billion were investment grade notes issued to third-party investors and $ 194.3 million were below investment grade notes retained by us.
+Added: As of the CLO closing date, the notes were secured by a portfolio of loan obligations with a face value of $ 1.79 billion, consisting primarily of bridge loans that were contributed from our existing loan portfolio.
+Added: The financing has an approximate two -and-a-half-year replacement period that allows the principal proceeds and sale proceeds (if any) of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture.
Thereafter, the outstanding debt balance will be reduced as loans are repaid.
−Removed: Initially, the proceeds of the issuance of the securities also included $ 159.5 million for the purpose of acquiring additional loan obligations for a period of up to 180 days from the CLO closing date, which we subsequently utilized, resulting in the issuer owning loan obligations with a face value of $ 800.0 million, representing leverage of 84 % .
+Added: Initially, the proceeds of the issuance of the securities also included $ 315.0 million for the purpose of acquiring additional loan obligations for a period of up to 180 days from the CLO closing date, which we subsequently utilized, resulting in the issuer owning loan obligations with a face value of $ 2.10 billion, representing leverage of 82 % .
We retained a residual interest in the portfolio with a notional amount of $ 385.9 million, including the $ 194.3 million below investment grade notes.
4 unchanged sentences
December 31, 2020
−Removed: In November 2019, we completed CLO XII, issuing eight tranches of CLO notes through two newly-formed wholly-owned subsidiaries totaling $ 585.8 million.
+Added: In September 2021, we completed CLO 16, issuing eight tranches of CLO notes through two wholly-owned subsidiaries totaling $ 1.37 billion.
+Added: Of the total CLO notes issued, $ 1.24 billion were investment grade notes issued to third-party investors and $ 135.0 million were below investment grade notes retained by us.
+Added: As of the CLO closing date, the notes were secured by a portfolio of loan obligations with a face value of $ 1.19 billion, consisting primarily of bridge loans that were contributed from our existing loan portfolio.
+Added: The financing has an approximate two -and-a-half-year replacement period that allows the principal proceeds and sale proceeds (if any) of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture.
+Added: Thereafter, the outstanding debt balance will be reduced as loans are repaid.
+Added: Initially, the proceeds of the issuance of the securities also included $ 313.0 million for the purpose of acquiring additional loan obligations for a period of up to 180 days from the CLO closing date, which we subsequently utilized, resulting in the issuer owning loan obligations with a face value of $ 1.50 billion, representing leverage of 83 % .
+Added: We retained a residual interest in the portfolio with a notional amount of $ 262.5 million, including the $ 135.0 million below investment grade notes.
+Added: The notes sold to third parties had an initial weighted average interest rate of 1.31 % plus one-month LIBOR and interest payments on the notes are payable monthly.
+Added: In June 2021, we completed CLO 15, issuing eight tranches of CLO notes through two wholly-owned subsidiaries totaling $ 747.8 million.
Of the total CLO notes issued, $ 674.4 million were investment grade notes issued to third-party investors and $ 73.4 million were below investment grade notes retained by us.
As of the CLO closing date, the notes were secured by a portfolio of loan obligations with a face value of $ 653.0 million, consisting primarily of bridge loans that were contributed from our existing loan portfolio.
−Removed: The financing has a three -year replacement period that allows the principal proceeds and sale proceeds (if any) of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture.
+Added: The financing has an approximate two -and-a-half-year replacement period that allows the principal proceeds and sale proceeds (if any) of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture.
Thereafter, the outstanding debt balance will be reduced as loans are repaid.
1 unchanged sentence
We retained a residual interest in the portfolio with a notional amount of $ 140.6 million, including the $ 73.4 million below investment grade notes.
−Removed: The notes had an initial weighted average interest rate of 1.50 % plus one-month LIBOR and interest payments on the notes are payable monthly.
−Removed: In June 2019, we completed CLO XI, issuing eight tranches of CLO notes through two newly-formed wholly-owned subsidiaries totaling $ 602.1 million.
+Added: The notes sold to third parties had an initial weighted average interest rate of 1.37 % plus one-month LIBOR and interest payments on the notes are payable monthly.
+Added: In March 2021, we completed CLO 14, issuing eight tranches of CLO notes through two wholly-owned subsidiaries totaling $ 724.2 million.
Of the total CLO notes issued, $ 655.5 million were investment grade notes issued to third-party investors and $ 68.7 million were below investment grade notes retained by us.
As of the CLO closing date, the notes were secured by a portfolio of loan obligations with a face value of $ 635.2 million, consisting primarily of bridge loans that were contributed from our existing loan portfolio.
+Added: The financing has a two -and-a-half-year replacement period that allows the principal proceeds and sale proceeds (if any) of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture.
+Added: Thereafter, the outstanding debt balance will be reduced as loans are repaid.
+Added: Initially, the proceeds of the issuance of the securities also included $ 149.8 million for the purpose of acquiring additional loan obligations for a period of up to 180 days from the CLO closing date, which we subsequently utilized, resulting in the issuer owning loan obligations with a face value of $ 785.0 million, representing leverage of 84 % .
+Added: We retained a residual interest in the portfolio with a notional amount of $ 129.5 million, including the $ 68.7 million below investment grade notes.
+Added: The notes sold to third parties had an initial weighted average interest rate of 1.33 % plus one-month LIBOR and interest payments on the notes are payable monthly.
+Added: In 2020, we completed CLO 13, issuing eight tranches of CLO notes through two wholly-owned subsidiaries totaling $ 738.0 million.
+Added: Of the total CLO notes issued, $ 668.0 million were investment grade notes issued to third-party investors and $ 70.0 million were below investment grade notes retained by us.
+Added: As of the CLO closing date, the notes were secured by a portfolio of loan obligations with a face value of $ 640.5 million, consisting primarily of bridge loans that were contributed from our existing loan portfolio.
The financing has a three -year replacement period that allows the principal proceeds and sale proceeds (if any) of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture.
2 unchanged sentences
We retained a residual interest in the portfolio with a notional amount of $ 132.0 million, including the $ 70.0 million below investment grade notes.
−Removed: The notes had an initial weighted average interest rate of 1.44 % plus one-month LIBOR and interest payments on the notes are payable monthly.
−Removed: In June 2018, we completed CLO X, issuing seven tranches of CLO notes through two newly-formed wholly-owned subsidiaries totaling $ 494.2 million.
+Added: The notes sold to third parties had an initial weighted average interest rate of 1.41 % plus one-month LIBOR and interest payments on the notes are payable monthly.
+Added: ARBOR REALTY TRUST, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
+Added: December 31, 2020
+Added: In 2019, we completed CLO 12, issuing eight tranches of CLO notes through two wholly-owned subsidiaries totaling $ 585.8 million.
Of the total CLO notes issued, $ 534.2 million were investment grade notes issued to third-party investors and $ 51.6 million were below investment grade notes retained by us.
As of the CLO closing date, the notes were secured by a portfolio of loan obligations with a face value of $ 510.9 million, consisting primarily of bridge loans that were contributed from our existing loan portfolio.
−Removed: The financing has a stated maturity date in June 2028 and a four -year replacement period that allows the principal proceeds and sale proceeds (if any) of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture.
+Added: The financing has a three -year replacement period that allows the principal proceeds and sale proceeds (if any) of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture.
Thereafter, the outstanding debt balance will be reduced as loans are repaid.
2 unchanged sentences
The notes had an initial weighted average interest rate of 1.50 % plus one-month LIBOR and interest payments on the notes are payable monthly.
−Removed: In December 2017, we completed CLO IX, issuing five tranches of CLO notes through two newly-formed wholly-owned subsidiaries totaling $ 388.2 million.
+Added: In 2018, we completed CLO 10, issuing seven tranches of CLO notes through two wholly-owned subsidiaries totaling $ 494.2 million.
Of the total CLO notes issued, $ 441.0 million were investment grade notes issued to third-party investors and $ 53.2 million were below investment grade notes retained by us.
As of the CLO closing date, the notes were secured by a portfolio of loan obligations with a face value of $ 501.9 million, consisting primarily of bridge loans that were contributed from our existing loan portfolio.
−Removed: The financing has a stated maturity date in December 2027 and had a three -year replacement period that expired in December 2020, therefore, the outstanding debt balance will reduce as loans are repaid.
+Added: The financing has a stated maturity date in June 2028 and a four -year replacement period that allows the principal proceeds and sale proceeds (if any) of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture.
+Added: Thereafter, the outstanding debt balance will be reduced as loans are repaid.
Initially, the proceeds of the issuance of the securities also included $ 58.1 million for the purpose of acquiring additional loan obligations for a period of up to 120 days from the CLO closing date, which we subsequently utilized, resulting in the issuer owning loan obligations with a face value of $ 560.0 million, representing leverage of 79 % .
We retained a residual interest in the portfolio with a notional amount of $ 119.0 million, including the $ 53.2 million below investment grade notes.
−Removed: The notes had an initial weighted average interest rate of 1.36 % plus LIBOR and interest payments on the notes are payable monthly.
+Added: The notes had an initial weighted average interest rate of 1.45 % plus one-month LIBOR and interest payments on the notes are payable monthly.
+Added: CLO 11 and CLO 9.
+Added: In 2021, we unwound both CLO 11 and CLO 9, redeeming $ 889.2 million of outstanding notes which were repaid primarily from the refinancing of the remaining assets within CLOs 17 and 14, as well as with cash held by CLOs 11 and 9, and expensed $ 3.4 million of deferred financing fees into loss on extinguishment of debt on the consolidated statements of income.
+Added: In 2020, we unwound CLO 8 redeeming $ 282.9 million of outstanding notes which were repaid primarily from the refinancing of the remaining assets within CLO 13, as well as with cash held by CLO 8, and expensed $ 1.5 million of deferred financing fees into loss on extinguishment of debt on the consolidated statements of income.
+Added: CLO 7 and CLO 6.
+Added: In 2019, we unwound both CLO 7 and CLO 6 redeeming $ 529.3 million of outstanding notes which were repaid primarily from the refinancing of the remaining assets within CLOs 12 and 11, as well as with cash held by CLOs 7 and 6, and expensed $ 2.6 million of deferred financing fees into interest expense on the consolidated statements of income.
+Added: Subsequent Event.
+Added: In February 2022, we completed CLO 18 totaling $ 2.05 billion, of which $ 1.65 billion were investment grade notes issued to third-party investors.
+Added: We retained a residual interest in the portfolio with a notional amount of $ 397.2 million, which includes $ 210.1 million of below investment grade notes.
+Added: Luxembourg Debt Fund
+Added: In 2020, we completed the unwind of the debt fund and redeemed all the outstanding notes with a portion of the proceeds from our senior unsecured notes issued in March 2020 described below and recorded a loss on extinguishment of debt of $ 1.6 million, which was primarily comprised of deferred financing fees.
+Added: The debt fund was a VIE for which we were the primary beneficiary and was consolidated in our financial statements.
ARBOR REALTY TRUST, INC.
2 unchanged sentences
December 31, 2020
−Removed: In March 2020, we unwound CLO VIII redeeming $ 282.9 million of outstanding notes which were repaid primarily from the refinancing of the remaining assets primarily within CLO XIII, as well as with cash held by CLO VIII, and expensed $ 1.5 million of deferred financing fees into loss on extinguishment of debt on the consolidated statements of income.
−Removed: In November 2019, we unwound CLO VII redeeming $ 279.0 million of outstanding notes which were repaid primarily from the refinancing of the remaining assets within our existing financing facilities (including CLO XII), as well as with cash held by CLO VII, and expensed $ 1.4 million of deferred financing fees into interest expense on the consolidated statements of income.
−Removed: In June 2019, we unwound CLO VI redeeming $ 250.3 million of outstanding notes which were repaid primarily from the refinancing of the remaining assets within our existing financing facilities (including CLO XI), as well as with cash held by CLO VI, and expensed $ 1.2 million of deferred financing fees into interest expense on the consolidated statements of income.
−Removed: In June 2018, we unwound CLO V, redeeming $ 267.8 million of outstanding notes which were repaid primarily from the refinancing of the remaining assets within our existing financing facilities (including CLO X), as well as with cash held by CLO V, and expensed $ 1.3 million of deferred financing fees into interest expense on the consolidated statements of income.
−Removed: Luxembourg Debt Fund
−Removed: In April 2020, we completed the unwind of the Debt Fund and redeemed all the outstanding notes with a portion of the proceeds from our senior unsecured notes issued in March 2020 described below and recorded a loss on extinguishment of debt of $ 1.6 million, which was primarily comprised of deferred financing fees.
−Removed: The Debt Fund was a VIE for which we were the primary beneficiary and was consolidated in our financial statements.
Senior Unsecured Notes
7 unchanged sentences
4.50 % Notes (3)
+Added: 4.75 % Notes (4)
+Added: 5.75 % Notes (4)
+Added: 5.625 % Notes (4)
(1) At December 31, 2021 and 2020, the carrying value is net of deferred financing fees of $ 15.2 million and $ 7.9 million, respectively.
(2) At December 31, 2021 and 2020, the aggregate weighted average note rate, including certain fees and costs, was 5.34 % and 5.65 % , respectively.
−Removed: (3) These notes can be redeemed by us prior to three months before the maturity date, at a redemption price equal to 100 % of the aggregate principal amount, plus a "
−Removed: make-whole "
−Removed: premium and accrued and unpaid interest.
−Removed: We have the right to redeem the
+Added: (3) These notes can be redeemed by us prior to three months before the maturity date, at a redemption price equal to 100 % of the aggregate principal amount, plus a “ make-whole ” premium and accrued and unpaid interest.
+Added: We have the right to redeem the notes within three months prior to the maturity date at a redemption price equal to 100% of the aggregate principal amount, plus accrued and unpaid interest.
+Added: (4) These notes can be redeemed by us at any time prior to the maturity date, at a redemption price equal to 100 % of the aggregate principal amount, plus a “make-whole” premium and accrued and unpaid interest.
+Added: We have the right to redeem the notes on the maturity date at a redemption price equal to 100% of the aggregate principal amount, plus accrued and unpaid interest.
+Added: In December 2021, we issued $ 180.0 million aggregate principal amount of 5.00 % senior unsecured notes due in 2028 in a private offering.
+Added: We received net proceeds of $ 177.2 million from the issuance, after deducting the underwriting discount and other offering expenses.
+Added: We used the net proceeds to make investments related to our business and for general corporate purposes.
+Added: In August 2021, we issued $ 270.0 million aggregate principal amount of 4.50 % senior unsecured notes due in 2026 in a private offering.
+Added: We received net proceeds of $ 265.8 million from the issuance, after deducting the underwriting discount and other offering expenses.
+Added: We used the net proceeds to make investments related to our business and for general corporate purposes.
+Added: In April 2021, we issued $ 175.0 million aggregate principal amount of 5.00 % senior unsecured notes due in 2026 in a private offering.
+Added: We received net proceeds of $ 172.3 million from the issuance, after deducting the underwriting discount and other offering expenses.
+Added: We used the net proceeds to make investments related to our business and for general corporate purposes.
+Added: In 2020, we issued $ 40.5 million aggregate principal amount of 8.00 % senior unsecured notes due in April 2023 (the “ 8.00% Initial Notes”) in a private placement, and, in June 2020, we issued an additional $ 30.3 million (the “8.00% Reopened Notes”) which brought the aggregate outstanding principal amount to $ 70.8 million.
+Added: The 8.00% Reopened Notes are fully fungible, and rank equally in right of payment, with the 8.00% Initial Notes.
+Added: We received total proceeds of $ 69.6 million from the issuances, after deducting the underwriting discount and other offering expenses.
+Added: We used the net proceeds from the issuances to repay secured indebtedness, make investments relating to our business and for general corporate purposes.
ARBOR REALTY TRUST, INC.
2 unchanged sentences
December 31, 2020
−Removed: notes three months prior to or after the maturity date, at a redemption price equal to 100% of the aggregate principal amount, plus accrued and unpaid interest.
−Removed: (4) These notes can be redeemed by us at any time prior to the maturity date, at a redemption price equal to 100 % of the aggregate principal amount, plus a "make-whole"
−Removed: premium and accrued and unpaid interest.
−Removed: We have the right to redeem the notes on or after the maturity date, at a redemption price equal to 100% of the aggregate principal amount, plus accrued and unpaid interest.
−Removed: In April 2020, we issued $ 40.5 million aggregate principal amount of 8.00 % senior unsecured notes due in April 2023 (the "Initial Notes") in a private placement, and, in June 2020, we issued an additional $ 30.3 million (the "Reopened Notes"
−Removed: and, together with the Initial Notes, the "8.00% Notes,") which brought the aggregate outstanding principal amount to $ 70.8 million.
−Removed: The Reopened Notes are fully fungible with, and rank equally in right of payment with the Initial Notes.
−Removed: We received total proceeds of $ 69.6 million from the issuances, after deducting the underwriting discount and other offering expenses.
−Removed: We used the net proceeds from the issuances to repay secured indebtedness, make investments relating to our business and for general corporate purposes.
−Removed: In March 2020, we issued $ 275.0 million aggregate principal amount of 4.50 % senior unsecured notes due in March 2027 (the "4.50% Notes") in a private placement.
+Added: In 2020, we issued $ 275.0 million aggregate principal amount of 4.50 % senior unsecured notes due in March 2027 in a private placement.
We received proceeds of $ 271.8 million from the issuance, after deducting the underwriting discount and other offering expenses.
We used a significant portion of the net proceeds to repay secured indebtedness.
−Removed: In October 2019, we issued $ 110.0 million aggregate principal amount of 4.75 % senior unsecured notes due in October 2024 (the "4.75% Notes") in a private placement.
−Removed: We received proceeds of $ 108.2 million from the issuances, after deducting the underwriting discount and other offering expenses.
+Added: In 2019, we issued $ 110.0 million aggregate principal amount of 4.75 % senior unsecured notes due in October 2024 in a private placement.
+Added: We received proceeds of $ 108.2 million from the issuance, after deducting the underwriting discount and other offering expenses.
We used the net proceeds to make investments and for general corporate purposes.
−Removed: In March 2019, we issued $ 90.0 million aggregate principal amount of 5.75 % senior unsecured notes due in April 2024 (the "5.75% Notes") in a private placement.
−Removed: We received proceeds of $ 88.2 million from the issuances, after deducting the underwriting discount and other offering expenses.
+Added: In 2019, we issued $ 90.0 million aggregate principal amount of 5.75 % senior unsecured notes due in April 2024 in a private placement.
+Added: We received proceeds of $ 88.2 million from the issuance, after deducting the underwriting discount and other offering expenses.
We used the net proceeds to make investments and for general corporate purposes.
−Removed: In March 2018, we issued $ 100.0 million aggregate principal amount of 5.625 % senior unsecured notes due in May 2023 (the “Initial Notes”) in a private placement, and, in May 2018, we issued an additional $ 25.0 million (the “Reopened Notes” and, together with the Initial Notes, the “5.625% Notes,”) which brought the aggregate outstanding principal amount to $ 125.0 million.
−Removed: The Reopened Notes are fully fungible with, and rank equally in right of payment with the Initial Notes.
+Added: In 2018, we issued $ 100.0 million aggregate principal amount of 5.625 % senior unsecured notes due in May 2023 (the “5.625% Initial Notes”) in a private placement, and, in May 2018, we issued an additional $ 25.0 million (the “5.625% Reopened Notes”) which brought the aggregate outstanding principal amount to $ 125.0 million.
+Added: The 5.625% Reopened Notes are fully fungible, and rank equally in right of payment, with the 5.625% Initial Notes.
We received total proceeds of $ 122.3 million from the issuances, after deducting the underwriting discount and other offering expenses.
1 unchanged sentence
Convertible Senior Unsecured Notes
−Removed: In 2019, we issued $ 264.0 million in aggregate principal amount of 4.75 % convertible notes through a private placement offering, which includes the exercised purchaser’s total over-allotment option of $ 34.0 million.
+Added: In 2019, we issued $ 264.0 million in aggregate principal amount of 4.75 % convertible senior notes (the “4.75% Convertible Notes”) through a private placement offering, which includes the exercised purchaser’s total over-allotment option of $ 34.0 million.
The 4.75% Convertible Notes pay interest semiannually in arrears and are scheduled to mature in November 2022, unless earlier converted or repurchased by the holders pursuant to their terms.
−Removed: The initial conversion rate and the conversion rate at December 31, 2019 was 56.1695 shares of common stock per $ 1,000 of principal representing a conversion price of $ 17.80 per share of common stock.
+Added: The initial conversion rate was 56.1695 shares of common stock per $ 1,000 of principal representing a conversion price of $ 17.80 per share of common stock.
We received proceeds totaling $ 256.5 million, net of the underwriter’s discount and fees, which is being amortized through interest expense over the life of such notes.
2 unchanged sentences
During 2019, we recorded a loss on extinguishment of debt of $ 7.3 million in connection with this exchange, which included an inducement charge of $ 1.1 million.
−Removed: As of December 31, 2020, the 4.75% convertible notes had conversion rates of 56.3058 shares, common stock per $ 1,000 of principal, which represented a conversion price of $ 17.76 per share of common stock.
−Removed: In 2018, we completed a similar exchange where we used the net proceeds from two separate private placements of our 5.25 % convertible notes to initially exchange $ 127.6 million of our 5.375 % convertible notes and $ 99.8 million of our 6.50 % convertible notes for a combination of $ 219.8 million in cash (which included accrued interest) and 6,820,196 shares of our common stock.
−Removed: ARBOR REALTY TRUST, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
−Removed: December 31, 2020
−Removed: During 2018, we recorded a loss on extinguishment of debt of $ 5.0 million in connection with these exchanges, which included an inducement charge of $ 1.1 million.
−Removed: At December 31, 2020, there were $ 0.5 million and $ 13.8 million aggregate principal amount remaining of our 5.25 % convertible notes issued on July 3, 2018 and 5.25 % convertible notes issued on July 20, 2018, respectively.
−Removed: The initial conversion rates of the 5.25 % convertible notes issued on July 3, 2018 and 5.25 % convertible notes issued on July 20, 2018 were 86.9943 shares and 77.8331 shares, respectively, of common stock per $1,000 of principal, which represented a conversion price of $ 11.50 per share and $ 12.85 per share of common stock, respectively.
−Removed: At December 31, 2020, the 5.25% convertible notes issued on July 3, 2018 and 5.25% convertible notes issued on July 20, 2018 had conversion rates of 91.0613 shares and 81.4718 shares, respectively, of common stock per $ 1,000 of principal, which represented a conversion price of $ 10.98 per share and $ 12.27 per share of common stock, respectively.
−Removed: The 5.25% convertible notes pay interest semiannually in arrears and has a scheduled maturity date in July 2021, unless earlier converted or repurchased by the holders pursuant to their terms.
+Added: As of December 31, 2021, the 4.75% Convertible Notes had a conversion rate of 56.8560 shares, common stock per $ 1,000 of principal, which represented a conversion price of $ 17.59 per share of common stock.
+Added: In July 2021, the remaining $ 14.3 million principal amount of our 5.25 % Convertible Notes matured and were fully settled with $ 14.3 million of cash and 386,459 shares of common stock.
Our convertible senior unsecured notes are not redeemable by us prior to their maturities and are convertible by the holder into, at our election, cash, shares of our common stock or a combination of both, subject to the satisfaction of certain conditions and during specified periods.
2 unchanged sentences
At the time of issuance, there was no precedent or policy that would indicate that we would settle the principal in shares, or the conversion spread in cash.
−Removed: Accounting guidance requires that convertible debt instruments with cash settlement features, including partial cash settlement, account for the liability component and equity component (conversion feature) of the instrument separately.
+Added: Accounting guidance effective on December 31, 2021 requires that convertible debt instruments with cash settlement features, including partial cash settlement, account for the liability component and equity component (conversion feature) of the instrument separately.
The initial value of the liability component reflects the present value of the discounted cash flows using the nonconvertible debt borrowing rate at the time of the issuance.
−Removed: The debt discount represents the difference between the proceeds received from the issuance and the initial carrying value of the liability component, which is accreted back to the notes principal amount through interest expense over the term of the notes, which was 1.77 years and 2.67 years at December 31, 2020 and 2019, respectively, on a weighted average basis.
+Added: The debt discount represents the difference between the proceeds received from the issuance and the initial carrying value of the liability component, which is accreted back to the notes principal amount through interest expense over the term of the notes, which was 0.84 years and 1.77 years at December 31, 2021 and 2020, respectively, on a weighted
+Added: ARBOR REALTY TRUST, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
+Added: December 31, 2020
+Added: average basis.
+Added: Our adoption of ASU 2020-06 on January 1, 2022 changes the way in which we account for our convertible debt, see Note 2 for details.
The UPB, unamortized discount and net carrying amount of the liability and equity components of our convertible notes are as follows (in thousands):
4 unchanged sentences
December 31, 2020
+Added: During 2021, we incurred total interest expense on the notes of $ 18.6 million, of which $ 12.8 million, $ 3.2 million and $ 2.6 million related to the cash coupon, amortization of the debt discount and of the deferred financing fees, respectively.
During 2020, we incurred interest expense on the notes totaling $ 20.0 million, of which $ 13.4 million, $ 3.6 million and $ 3.0 million related to the cash coupon, amortization of the debt discount and of the deferred financing fees, respectively.
4 unchanged sentences
These notes have maturities ranging from March 2034 through April 2037 and pay interest quarterly at a floating rate based on LIBOR.
−Removed: ARBOR REALTY TRUST, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
−Removed: December 31, 2020
−Removed: weighted average note rate was 3.06 % and 4.75 % at December 31, 2020 and 2019, respectively.
+Added: The weighted average note rate was 3.03 % and 3.06 % at December 31, 2021 and 2020, respectively.
Including certain fees and costs, the weighted average note rate was 3.12 % and 3.15 % at December 31, 2021 and 2020, respectively.
Debt Covenants
−Removed: Credit Facilities, Repurchase Agreements and Unsecured Debt.
−Removed: The credit facilities, repurchase agreements and unsecured debt (senior and convertible notes) contain various financial covenants, including, but not limited to, minimum liquidity requirements, minimum net worth requirements, as well as certain other debt service coverage ratios, debt to equity ratios and minimum servicing portfolio tests.
+Added: Credit and Repurchase Facilities and Unsecured Debt.
+Added: The credit and repurchase facilities and unsecured debt (senior and convertible notes) contain various financial covenants, including, but not limited to, minimum liquidity requirements, minimum net worth requirements, minimum unencumbered asset requirements, as well as certain other debt service coverage ratios, debt to equity ratios and minimum servicing portfolio tests.
We were in compliance with all financial covenants and restrictions at December 31, 2021.
5 unchanged sentences
However, we may not have sufficient liquidity available to do so at such time.
+Added: ARBOR REALTY TRUST, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
+Added: December 31, 2020
Our CLO compliance tests as of the most recent determination dates in January 2022 are as follows:
7 unchanged sentences
(2) The interest coverage ratio divides interest income by interest expense for the classes senior to those retained by us.
−Removed: ARBOR REALTY TRUST, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
−Removed: December 31, 2020
Our CLO overcollateralization ratios as of the determination dates subsequent to each quarter are as follows:
Determination (1)
−Removed: (1) The table above represents the quarterly trend of our overcollateralization ratio, however, the CLO determination dates are monthly and we were in compliance with this test for all periods presented.
+Added: (1) This table represents the quarterly trend of our overcollateralization ratio, however, the CLO determination dates are monthly and we were in compliance with this test for all periods presented.
The ratio will fluctuate based on the performance of the underlying assets, transfers of assets into the CLOs prior to the expiration of their respective replenishment dates, purchase or disposal of other investments, and loan payoffs.
10 unchanged sentences
Ending balance
+Added: ARBOR REALTY TRUST, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
+Added: December 31, 2020
When a loan is sold under the Fannie Mae DUS program, we undertake an obligation to partially guarantee the performance of the loan.
3 unchanged sentences
The current expected loss related to loss-sharing was based on a collective pooling basis with similar risk characteristics, a reasonable and supportable forecast and a reversion period based on our average historical losses through the remaining contractual term of the portfolio.
−Removed: The increase in the provision for credit losses during 2020 of $ 16.4 million, compared to the January 1, 2020 cumulative-effect adjustment upon adoption of CECL of $ 14.4 million, is primarily attributed to the significant adverse change in the economic outlook due to the COVID-19 pandemic.
When we settle a loss under the DUS loss-sharing model, the net loss is charged-off against the previously recorded loss-sharing obligation.
The settled loss is often net of any previously advanced principal and interest payments in accordance with the DUS program, which are reflected as reductions to the proceeds needed to settle losses.
−Removed: At December 31, 2020 and 2019, we had outstanding advances of $ 0.1 million and $ 0.5 million, respectively, which were netted against the allowance for loss-sharing obligations.
−Removed: At December 31, 2020, our allowance for loss-sharing obligations , associated with expected losses under CECL was $ 30.3 million and represented 0.17 % of the Fannie Mae servicing portfolio.
−Removed: ARBOR REALTY TRUST, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
−Removed: December 31, 2020
+Added: At December 31, 2021 and 2020, we had outstanding advances of less than $ 0.1 million and $ 0.1 million, respectively, which were netted against the allowance for loss-sharing obligations.
+Added: At December 31, 2021 and 2020, our allowance for loss-sharing obligations, associated with expected losses under CECL, was $ 21.7 million and $ 30.3 million, respectively, and represented 0.11 % and 0.17 %, respectively, of the Fannie Mae servicing portfolio.
At December 31, 2021 and 2020, the maximum quantifiable liability associated with our guarantees under the Fannie Mae DUS agreement was $ 3.60 billion and $ 3.41 billion, respectively.
2 unchanged sentences
Note 12 — Derivative Financial Instruments
−Removed: We enter into derivative financial instruments to manage exposures that arise from business activities resulting in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates.
−Removed: We do not use these derivatives for speculative purposes, but are instead using them to manage our exposure to interest rate risk.
+Added: We enter into derivative financial instruments to manage exposures that arise from business activities resulting in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates and credit risk.
+Added: We do not use these derivatives for speculative purposes, but are instead using them to manage our interest rate and credit risk exposure.
Agency Rate Lock and Forward Sale Commitments.
7 unchanged sentences
Sale commitments with the investors have an expiration date that is longer than our related commitments to the borrower to allow, among other things, for closing of the loan and processing of paperwork to deliver the loan into the sale commitment.
−Removed: These commitments meet the definition of a derivative and are recorded at fair value, including the effects of interest rate movements which are reflected as a component of (loss) gain on derivative instruments, net in the consolidated statements of operations.
−Removed: The estimated fair value of rate lock commitments also includes the fair value of the expected net cash flows associated with the servicing of the loan which is recorded as income from MSRs in the consolidated statements of operations.
−Removed: During 2020, 2019 and 2018, we recorded net gains of $ 3.4 million, net losses of $ 7.8 million and net gains of $ 6.0 million, respectively, from changes in the fair value of these derivatives in (loss) gain on derivative instruments, net and $ 165.5 million, $ 90.8 and $ 98.8 million, respectively, of income from MSRs.
+Added: These commitments meet the definition of a derivative and are recorded at fair value, including the effects of interest rate movements which are reflected as a component of loss on derivative instruments, net in the consolidated statements of income.
+Added: The estimated fair value of rate lock commitments also includes the fair value of the expected net cash flows associated with the servicing of the loan which is recorded as income from MSRs in the consolidated statements of income.
+Added: During 2021, 2020 and 2019, we recorded net losses of $ 0.8 million, net gains of $ 3.4 million and net losses of $ 7.8 million, respectively, from changes in the fair value of these derivatives and $ 130.2 million, $ 165.5 million and $ 90.8 million, respectively, of income from MSRs.
See Note 13 for details.
−Removed: Interest Rate Swap Futures.
−Removed: We enter into Swap Futures to hedge our exposure to changes in interest rates inherent in (1) our Structured Business SFR loans from the time the loans are originated until the time they can be financed with match term fixed rate securitized debt, and (2) our held-for-sale Agency Business Private Label loans from the time the loans are rate locked until sale and securitization.
−Removed: The Swap Futures do not meet the criteria for hedge accounting, typically have a three -month maturity and are tied to the five-year and ten-year swap rates.
−Removed: Our Swap Futures are cleared by a central clearing house and variation margin payments, made in cash, are treated as a legal settlement of the derivative itself as opposed to a pledge of collateral.
−Removed: During 2020, we recorded realized losses of $ 3.0 million and unrealized gains of $ 0.2 million to our Structured Business and realized losses of $ 57.1 million and unrealized losses of $ 1.7 million to our Agency Business related to our Swap Futures.
−Removed: During 2019, we recorded realized losses of $ 0.4 million and unrealized gains of $ 0.2 million to our Structured Business and realized gains of $ 4.6 million and unrealized gains of $ 1.5 million to our Agency Business related to our Swap Futures.
−Removed: The realized and unrealized gains and losses are recorded in loss on derivative instruments, net on our consolidated statements of income.
+Added: Interest Rate and Credit Default Swaps.
+Added: We enter into over-the-counter swaps to hedge our interest rate and credit risk exposure inherent in (1) our held-for-sale Agency Business Private Label loans from the time the loans are rate locked until sale and
ARBOR REALTY TRUST, INC.
2 unchanged sentences
December 31, 2020
−Removed: A summary of our non-qualifying derivative financial instruments is as follows ($ in thousands):
+Added: securitization, and (2) our Agency Business SFR – fixed rate loans from the time the loans are originated until the time they can be financed with match term fixed rate securitized debt.
+Added: Our interest rate swaps typically have a three -month maturity and are tied to the five-year and ten-year swap rates.
+Added: Our credit default swaps typically have a five-year maturity, are tied to the credit spreads of the underlying bond issuers and we typically hold our position until we price our Private Label loan securitizations.
+Added: The Swaps do not meet the criteria for hedge accounting, are cleared by a central clearing house and variation margin payments, made in cash, are treated as a legal settlement of the derivative itself as opposed to a pledge of collateral.
+Added: During 2021, we recorded realized and unrealized losses of less than $ 0.1 million and $ 1.5 million, respectively, to our Agency Business related to our Swaps.
+Added: During 2020, we recorded realized losses of $ 3.0 million and unrealized gains of $ 0.2 million to our Structured Business and realized losses of $ 57.1 million and unrealized losses of $ 1.7 million to our Agency Business related to our Swaps.
+Added: During 2019, we recorded realized losses of $ 0.4 million and unrealized gains of $ 0.2 million to our Structured Business and realized gains of $ 4.6 million and unrealized gains of $ 1.5 million to our Agency Business related to our Swaps.
+Added: The realized and unrealized gains and losses are recorded in loss on derivative instruments, net on our consolidated statements of income.
+Added: A summary of our non-qualifying derivative financial instruments in our Agency Business is as follows ($ in thousands):
December 31, 2021
Balance Sheet
−Removed: Agency Business
Rate Lock Commitments
3 unchanged sentences
December 31, 2020
−Removed: Agency Business
Rate Lock Commitments
2 unchanged sentences
Other Assets/Other Liabilities
−Removed: Structured Business
ARBOR REALTY TRUST, INC.
35 unchanged sentences
Fair values of impaired loans and investments are estimated using inputs that require significant judgments, which include assumptions regarding discount rates, capitalization rates, creditworthiness of major tenants, occupancy rates, availability of financing, exit plans and other factors (Level 3).
+Added: Loans held-for-sale, net.
+Added: Consists of originated loans that are generally expected to be transferred or sold within 60 days to 180 days of loan funding, and are valued using pricing models that incorporate observable inputs from current market assumptions or a
ARBOR REALTY TRUST, INC.
2 unchanged sentences
December 31, 2020
−Removed: Loans held-for-sale, net.
−Removed: Consists of originated loans that are generally expected to be transferred or sold within 60 days to 180 days of loan funding, and are valued using pricing models that incorporate observable inputs from current market assumptions or a hypothetical securitization model utilizing observable market data from recent securitization spreads and observable pricing of loans with similar characteristics (Level 2).
+Added: hypothetical securitization model utilizing observable market data from recent securitization spreads and observable pricing of loans with similar characteristics (Level 2).
Fair value includes the fair value allocated to the associated future MSRs and is calculated pursuant to the valuation techniques described below for capitalized mortgage servicing rights, net (Level 3).
6 unchanged sentences
Derivative financial instruments.
−Removed: The fair values of rate lock and forward sale commitments are estimated using valuation techniques, which include internally-developed models developed based on changes in the U.S.
+Added: Fair values of rate lock and forward sale commitments are estimated using valuation techniques, which include internally-developed models developed based on changes in the U.S.
Treasury rate and other observable market data (Level 2).
2 unchanged sentences
Given the credit quality of our counterparties, the short duration of interest rate lock commitments and forward sale contracts, and our historical experience, the risk of nonperformance by our counterparties is not significant.
−Removed: Credit facilities and repurchase agreements.
−Removed: Fair values for credit facilities and repurchase agreements of the Structured Business are estimated using discounted cash flow methodology, using discount rates, which, in our opinion, best reflect current market interest rates for financing with similar characteristics and credit quality (Level 3).
−Removed: The majority of our credit facilities and repurchase agreement for the Agency Business bear interest at rates that are similar to those available in the market currently and the fair values are estimated using Level 2 inputs.
+Added: Credit and repurchase facilities.
+Added: Fair values for credit and repurchase facilities of the Structured Business are estimated using discounted cash flow methodology, using discount rates, which, in our opinion, best reflect current market interest rates for financing with similar characteristics and credit quality (Level 3).
+Added: The majority of our credit and repurchase facilities for the Agency Business bear interest at rates that are similar to those available in the market currently and fair values are estimated using Level 2 inputs.
For these facilities, the fair values approximate their carrying values.
−Removed: Collateralized loan obligations, junior subordinated notes and Debt Fund.
+Added: Collateralized loan obligations and junior subordinated notes.
Fair values are estimated based on broker quotations, representing the discounted expected future cash flows at a yield that reflects current market interest rates and credit spreads (Level 3).
3 unchanged sentences
Convertible senior unsecured notes, net.
−Removed: Fair values are estimated based on current market quotes received from inactive markets (Level 2).
+Added: Fair values are estimated using current market quotes received from inactive markets (Level 2).
We measure certain financial assets and financial liabilities at fair value on a recurring basis.
16 unchanged sentences
Impaired loans, net (1)
−Removed: (1) We had an allowance for loan losses of $ 106.3 million relating to ten loans with an aggregate carrying value, before loan loss reserves, of $ 254.9 million at December 31, 2020.
+Added: (1) We had an allowance for credit losses of $ 86.9 million relating to eight impaired loans with an aggregate carrying value, before loan loss reserves, of $ 148.8 million at December 31, 2021.
Loan impairment assessments.
−Removed: Loans held for investment are intended to be held to maturity and, accordingly, are carried at cost, net of unamortized loan origination costs and fees, loan purchase discounts, and net of the allowance for loan losses, when such loan or investment is deemed to be impaired.
+Added: Loans held for investment are intended to be held to maturity and, accordingly, are carried at cost, net of unamortized loan origination costs and fees, loan purchase discounts, and net of the allowance for credit losses, when such loan or investment is deemed to be impaired.
We consider a loan impaired when, based upon current information, it is probable that we will be unable to collect all amounts due for both principal and interest according to the contractual terms of the loan agreement.
−Removed: We evaluate our loans to determine if the value of the underlying collateral securing the impaired loan is less than the net carrying value of the loan, which may result in an allowance and corresponding charge to the provision for loan losses.
+Added: We evaluate our loans to determine if the value of the underlying collateral securing the impaired loan is less than the net carrying value of the loan, which may result in an allowance and corresponding charge to the provision for credit losses.
These valuations require significant judgments, which include assumptions regarding capitalization and discount rates, revenue growth rates, creditworthiness of major tenants, occupancy rates, availability of financing, exit plan and other factors.
6 unchanged sentences
Discount rate
−Removed: direct capitalization
−Removed: Capitalization rate
Revenue growth rate
−Removed: Discounted cash flows
Discount rate
−Removed: Revenue growth rate
Discounted cash flows
−Removed: Discount rate
Capitalization rate
Revenue growth rate
−Removed: Discounted cash flows
−Removed: Capitalization rate
−Removed: Discounted cash flows
Discount rate
+Added: Discounted cash flows
Capitalization rate
48 unchanged sentences
The magnitude and duration of COVID-19 and its impact on our business and on our borrowers is uncertain and will mostly depend on future events, which cannot be predicted.
−Removed: As this pandemic continues and if economic conditions worsen, it may have long-term impacts on our financial position, results of operations and cash flows.
+Added: As this pandemic continues and if economic conditions deteriorate, it may have long-term impacts on our financial position, results of operations and cash flows.
Risk Factors and Note 2 for further discussion of COVID-19.
39 unchanged sentences
We are currently neither subject to any material litigation nor, to the best of our knowledge, threatened by any material litigation other than the following:
−Removed: In June 2011, three related lawsuits were filed by the Extended Stay Litigation Trust (the "Trust"), a post-bankruptcy litigation trust alleged to have standing to pursue claims that previously had been held by Extended Stay, Inc.
+Added: In June 2011, three related lawsuits were filed by the Extended Stay Litigation Trust (the “Trust”), a post-bankruptcy litigation trust alleged to have standing to pursue claims that previously had been held by Extended Stay, Inc.
and the Homestead Village L.L.C.
−Removed: family of companies (together "ESI") (formerly Chapter 11 debtors, together the "Debtors") that have emerged from bankruptcy.
+Added: family of companies (together “ESI”) (formerly Chapter 11 debtors, together the “Debtors”) that have emerged from bankruptcy.
Two of the lawsuits were filed in the U.S.
9 unchanged sentences
The defendants are alleged, among other things, to have breached fiduciary and contractual duties by causing or allowing the Debtors to pay illegal dividends or other improper distributions of value at a time when the Debtors were insolvent.
−Removed: The Trust also alleges that the defendants aided and abetted, induced, or participated in breaches of fiduciary duty, waste, and unjust enrichment ("Fiduciary Duty Claims") and name a director of ours, and a former general counsel of ACM, each of whom had served on the Board of Directors of ESI for a period of time.
+Added: The Trust also alleges that the defendants aided and abetted, induced, or participated in breaches of fiduciary duty, waste, and unjust enrichment (“Fiduciary Duty Claims”) and name a director of ours, and a former general counsel of ACM, each of whom had served on the Board of Directors of ESI for a period of time.
We are defending these two defendants and paying the costs of such defense.
19 unchanged sentences
We have not made a loss accrual for this litigation because we believe that it is not probable that a loss has been incurred and an amount cannot be reasonably estimated.
−Removed: Litigation Settlement.
−Removed: In 2018, we received net proceeds of $ 10.2 million from the settlement of a litigation related to a prior investment, which was recognized as a gain.
Due to Borrowers.
6 unchanged sentences
ARLP is already consolidated in our financial statements, therefore, the identification of this entity as a VIE had no impact on our consolidated financial statements.
−Removed: As described in Note 11, we completed the unwind of the Debt Fund in April 2020 and redeemed all the outstanding notes.
−Removed: Prior to the unwind, the Debt Fund entity was consolidated and considered a VIE.
Our CLO consolidated entities invest in real estate and real estate-related securities and are financed by the issuance of debt securities.
1 unchanged sentence
We also have exposure to losses to the extent of our equity interests and also have rights to waterfall payments in excess of required payments to bond investors.
−Removed: As a result of consolidation, equity interests have been eliminated, and the consolidated balance sheets reflect both the assets held and debt issued to third parties by the CLOs and Debt Fund, prior to the unwind.
−Removed: Our operating results and cash flows include the gross asset and liability amounts related to the CLOs and Debt Fund, prior to the unwind, as opposed to our net economic interests in those entities.
−Removed: ARBOR REALTY TRUST, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
−Removed: December 31, 2020
−Removed: The assets and liabilities related to these consolidated CLOs and Debt Fund are as follows (in thousands):
+Added: As a result of consolidation, equity interests have been eliminated, and the consolidated balance sheets reflect both the assets held and debt issued to third parties by the CLOs, prior to the unwind.
+Added: Our operating results and cash flows include the gross asset and liability amounts related to the CLOs as opposed to our net economic interests in those entities.
+Added: The assets and liabilities related to these consolidated CLOs are as follows (in thousands):
December 31, 2021
9 unchanged sentences
We are not obligated to provide, have not provided, and do not intend to provide financial support to any of the consolidated CLOs.
+Added: ARBOR REALTY TRUST, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
+Added: December 31, 2020
Unconsolidated VIEs .
2 unchanged sentences
Carrying Amount (1)
−Removed: B Piece bonds
APL certificates
+Added: B Piece bonds
Equity investments
6 unchanged sentences
Preferred Stock.
−Removed: The Series A, B and C preferred stock outstanding are redeemable by us.
+Added: In October 2021, we completed a public offering of 8,050,000 shares of 6.25 % Series F fixed-to-floating rate cumulative redeemable preferred stock with a liquidation preference of $ 25.00 per share, generating net proceeds of $ 194.8 million after deducting the underwriting discount and other offering expenses.
+Added: Holders of the Series F preferred stock will be entitled to receive cumulative dividends at a fixed rate equal to 6.25 % from the date of issuance through October 29, 2026 and at a floating rate equal to a benchmark rate (which is expected to be the three-month SOFR) plus a spread of 5.442 % per annum beginning October 30, 2026, provided that in no event should the rate be lower than 6.125 %.
+Added: The proceeds were used to make investments related to our business and for general corporate purposes.
+Added: The Series F preferred stock is not redeemable by us prior to October 12, 2026 except under circumstances intended to preserve our qualification as a REIT and except upon the occurrence of a change of control.
+Added: In August 2021, we completed a public offering of 5,750,000 shares of 6.25 % Series E cumulative redeemable preferred stock with a liquidation preference of $ 25.00 per share, generating net proceeds of $ 139.1 million after deducting the underwriting discount and other offering expenses.
+Added: The proceeds were used to make investments related to our business and for general corporate purposes.
+Added: The Series E preferred stock is not redeemable by us prior to August 11, 2026 except under circumstances intended to preserve our qualification as a REIT and except upon the occurrence of a change of control.
+Added: In June 2021, we completed a public offering of 9,200,000 shares of 6.375 % Series D cumulative redeemable preferred stock with a liquidation preference of $ 25.00 per share, generating net proceeds of $ 222.6 million after deducting the underwriting discount and other offering expenses.
+Added: We used $ 93.3 million of the proceeds to fully redeem our Series A, B and C preferred stock.
+Added: The Series D preferred stock is not redeemable by us prior to June 2, 2026 except under circumstances intended to preserve our qualification as a REIT and except upon the occurrence of a change of control.
+Added: Subsequent Event.
+Added: In February 2022, we completed the public offering of an additional 3,100,000 shares of 6.25 % Series F preferred stock, generating net proceeds of $ 72.6 million after deducting the underwriting discount and other offering expenses.
+Added: The additional shares issued have the same terms as the original issuance completed in October 2021.
Common Stock.
1 unchanged sentence
The proceeds were used to make investments related to our business and for general corporate purposes.
−Removed: We also used a portion of the net proceeds to purchase an aggregate of 700,000 shares of our common stock and OP Units from our chief executive officer and ACM at the same price the underwriters paid to purchase the shares.
+Added: We also used $ 10.9 million of the net proceeds from this offering to purchase 562,500 shares of our common stock from our chief executive officer, ACM and certain other executive officers of ours at a weighted average price of $ 19.46 .
ARBOR REALTY TRUST, INC.
2 unchanged sentences
December 31, 2020
−Removed: In August 2020, we filed a shelf registration statement as a “well-known seasoned issuer” as defined in Rule 405 under the Securities Act, which registered an unlimited and indeterminate amount of debt or equity securities for future issuance and sale.
−Removed: The shelf registration statement was declared effective upon filing.
−Removed: In August 2020, we amended the equity distribution agreement with JMP.
−Removed: In accordance with the terms of the amendment, we may offer and sell up to 10,000,000 shares of our common stock in "At-The-Market"
−Removed: equity offerings through JMP by means of ordinary brokers' transactions or otherwise at market prices prevailing at the time of sale, or at negotiated prices.
−Removed: During 2020, we sold 7,790,121 shares for net proceeds of $ 90.5 million.
−Removed: We used a portion of the net proceeds to redeem 2,736,894 OP Units for cash totaling $ 28.4 million.
−Removed: As of December 31, 2020, we had approximately 6,400,000 shares available under the amended agreement.
−Removed: In March 2020, the Board of Directors authorized a share repurchase program providing for the repurchase of up to $ 100.0 million of our outstanding common stock.
+Added: In August 2021, we amended the equity distribution agreement with JMP Securities LLC (“JMP”).
+Added: In accordance with the terms of the amendment, we may offer and sell up to 20,000,000 shares of our common stock in “At-The-Market” equity offerings through JMP by means of ordinary brokers’ transactions or otherwise at market prices prevailing at the time of sale, or at negotiated prices.
+Added: During 2021, we sold 8,230,369 shares of our common stock for net proceeds of $ 141.8 million.
+Added: We used $ 21.1 million of the net proceeds to redeem OP Units from two ACM members.
+Added: As of December 31, 2021, we had 18,192,510 shares available under the amended agreement.
+Added: In June 2021, we completed a public offering in which we sold 6,000,000 shares of our common stock for $ 18.46 per share and received net proceeds of $ 110.6 million after deducting the underwriter's discount and other offering expenses.
+Added: The proceeds were used to make investments related to our business and for general corporate purposes.
+Added: We also used $ 11.1 million of the net proceeds from this offering to purchase 600,000 shares of our common stock from ACM at the same price the underwriters paid to purchase the shares.
+Added: In March 2021, we completed a public offering in which we sold 7,000,000 shares of our common stock for $ 15.48 per share and received net proceeds of $ 108.2 million after deducting the underwriter's discount and other offering expenses.
+Added: The proceeds were used to make investments related to our business and for general corporate purposes.
+Added: We also used $ 12.4 million of the net proceeds from this offering to purchase 800,000 shares of our common stock from our chief executive officer, ACM and certain other executive officers of ours at the same price the underwriters paid to purchase the shares.
+Added: During 2021, we issued 386,459 shares in connection with the settlements of our 5.25 % Convertible Notes.
+Added: We maintain a share repurchase program providing for the repurchase of up to $ 100.0 million of our outstanding common stock.
The repurchase of our common stock may be made from time to time in the open market, in privately negotiated transactions or in compliance with a Rule 10b5-1 plan based on our stock price, general market conditions, applicable legal requirements and other factors.
The program may be discontinued or modified at any time.
−Removed: As of December 31, 2020, we repurchased 993,106 shares of our common stock under this program at a total cost of $ 3.9 million and an average cost of $ 3.98 per share.
−Removed: During 2020, we issued 321,412 and 47,086 shares in connection with the settlements of our 5.25 % and 5.375 % Convertible Notes, respectively.
+Added: We did not repurchase shares of our common stock under this program during 2021.
+Added: As of December 31, 2021, there was $ 96.1 million available for repurchase under this program.
Noncontrolling Interest.
3 unchanged sentences
The OP Units are also redeemable for cash, or at our option, for shares of our common stock on a one -for-one basis.
−Removed: As noted above, during the 2020, we redeemed 2,768,033 OP Units for cash and there were 17,560,633 OP Units outstanding at December 31, 2020, which represented 12.5 % of the voting power of our outstanding stock.
+Added: At December 31, 2021, there were 16,325,095 OP Units outstanding, which represented 9.7 % of the voting power of our outstanding stock.
Distributions.
4 unchanged sentences
February 17, 2021
−Removed: January 31, 2020
−Removed: July 29, 2020
+Added: February 1, 2021
+Added: April 30, 2021
July 28, 2021
1 unchanged sentence
October 1, 2021
−Removed: (1) The dividend declared on January 31, 2020 was for December 1, 2019 through February 29, 2020.
−Removed: The dividend declared on May 1, 2020 was for March 1, 2020 through May 31, 2020.
−Removed: The dividend declared on July 29, 2020 was for June 1, 2020 through August 31, 2020.
−Removed: The dividend declared on October 28, 2020 was for September 1, 2020 through November 30, 2020.
+Added: (1) The dividend declared on October 1, 2021 for Series D and E were for July 30, 2021 through October 29, 2021 and August 11, 2021 (the date of issuance) through October 29, 2021, respectively.
+Added: The dividend declared on July 2, 2021 was for June 2, 2021 through July 29, 2021, the dividend declared on April 30, 2021 was for March 1, 2021 through May 31, 2021 and the dividend declared on February 1, 2021 was for December 1, 2020 through February 28, 2021.
+Added: As mentioned above, we fully redeemed our Series A, B and C preferred stock in June 2021.
Common Stock – On February 16, 2022, the Board of Directors declared a cash dividend of $ 0.37 per share of common stock.
The dividend is payable on March 18, 2022 to common stockholders of record as of the close of business on March 4, 2022.
−Removed: Preferred Stock – On February 1, 2021, the Board of Directors declared a cash dividend of $ 0.515625 per share of 8.25 % Series A preferred stock;
−Removed: a cash dividend of $ 0.484375 per share of 7.75 % Series B preferred stock;
−Removed: and a cash dividend of $ 0.53125 per share of 8.50 % Series C preferred stock.
−Removed: These amounts reflect dividends from December 1, 2020 through February 28, 2021 and are payable on March 1, 2021 to preferred stockholders of record on February 15, 2021.
−Removed: We have determined that 100 % of the common stock and preferred stock dividends paid during 2020, 2019 and 2018 represented ordinary income to our stockholders for income tax purposes.
−Removed: For stockholders that may be required to report excess inclusion income to the Internal Revenue Service, we will not pass through any excess inclusion income to our stockholders for 2020.
−Removed: As a result, no portion of the 2020 dividends should be treated as excess inclusion income for federal income tax purposes.
+Added: Preferred Stock – On January 3, 2022, the Board of Directors declared cash dividends of $ 0.3984375 per share of Series D preferred stock, $ 0.390625 per share of Series E preferred stock and $ 0.46875 per share of Series F preferred stock.
+Added: The Series D and
ARBOR REALTY TRUST, INC.
2 unchanged sentences
December 31, 2020
+Added: E dividends reflect accrued dividends from October 30, 2021 through January 29, 2022.
+Added: The Series F dividend reflects accrued dividends from October 12, 2021 (the date of issuance) through January 29, 2022.
+Added: The dividends are payable on January 31, 2022 to preferred stockholders of record on January 15, 2022.
+Added: We have determined that 100 % of the common stock and preferred stock dividends paid during 2021, 2020 and 2019 represented ordinary income to our stockholders for income tax purposes.
+Added: For stockholders that may be required to report excess inclusion income to the Internal Revenue Service, we will not pass through any excess inclusion income to our stockholders for 2021.
+Added: As a result, no portion of the 2021 dividends should be treated as excess inclusion income for federal income tax purposes.
Deferred Compensation.
We have a stock incentive plan under which the Board of Directors has the authority to issue shares of stock to certain employees, officers and directors.
−Removed: In 2020, 2019 and 2018, we granted 314,957 shares, 333,884 shares and 265,444 shares, respectively, of restricted common stock with a total grant date fair value of $ 3.4 million, $ 4.2 million and $ 2.3 million, respectively, to certain employees.
+Added: In 2021, we issued 356,377 shares of restricted common stock to certain employees under the 2020 Amended Omnibus Stock Incentive Plan (the “2020 Plan”) with a total grant date fair value of $ 5.9 million, of which:
+Added: (1) 116,570 shares with a grant date fair value of $ 1.9 million were fully vested on the grant date;
+Added: (2) 101,475 shares with a grant date fair value of $ 1.7 million will vest on the first anniversary of the grant date;
+Added: (3) 88,788 shares with a grant date fair value of $ 1.5 million will vest on the second anniversary of the grant date;
+Added: (4) 25,479 shares with a grant date fair value of $ 0.4 million will vest on the third anniversary of the grant date;
+Added: and (5) 24,065 shares with a grant date fair value of $ 0.4 million will vest on the fourth anniversary of the grant date.
+Added: We also issued 28,381 shares of fully vested common stock to the independent members of the Board of Directors under the 2020 Plan with a grant date fair value of $ 0.5 million.
+Added: In 2020 and 2019, we granted 314,957 shares and 333,884 shares, respectively, of restricted common stock with a total grant date fair value of $ 3.4 million and $ 4.2 million, respectively, to certain employees.
One third of the shares vested as of the grant date and one third will vest on each of the first and second anniversaries of the grant date.
−Removed: In 2020, 2019 and 2018, we granted 52,735 shares, 55,244 shares and 67,002 shares, respectively, of fully vested common stock with a grant date fair value of $ 0.5 million, $ 0.7 million and $ 0.6 million, respectively, to the independent members of our Board of Directors.
−Removed: In 2020, 2019 and 2018, we granted our chief executive officer 45,928 shares 58,738 shares and 63,584 shares, respectively, of restricted common stock with a grant date fair value of $ 0.5 million, $ 0.7 million and $ 0.6 million, respectively, and 275,569 , 352,427 and 381,503 , respectively, of performance-based restricted stock units with a grant date fair value of $ 0.1 million, $ 1.7 million and $ 0.8 million, respectively.
−Removed: One quarter of the restricted common stock vested on the grant date and one quarter will vest on each of the first, second and third anniversaries of the grant date.
+Added: In 2020 and 2019, we granted 52,735 shares and 55,244 shares, respectively, of fully vested common stock with a grant date fair value of $ 0.5 million and $ 0.7 million, respectively, to the independent members of our Board of Directors.
+Added: In April 2021, we entered into a second amended and restated annual incentive agreement (the “2021 annual incentive agreement”) with our chief executive officer, effective January 1, 2021.
+Added: The terms of the 2021 annual incentive agreement provide for:
+Added: (1) an annual base salary of $ 1.2 million;
+Added: (2) an annual cash payment of $ 0.8 million;
+Added: and (3) annual performance cash bonus target opportunities of $ 2.9 million at target performance, $ 1.5 million at threshold performance and $ 4.4 million at maximum performance, with the opportunity to earn an additional $ 0.7 million annually in the event of extraordinary performance with respect to corporate capital growth goals.
+Added: The 2021 annual incentive agreement also provides for:
+Added: (1) a grant with a value of $ 3.0 million to be made in July 2021, dependent on reaching certain goals relating to the integration of the Acquisition (“Acquisition Related Grant”), which represents the last Acquisition Related Grant;
+Added: and (2) at our chief executive officer’s option, to be exercised annually for the remainder of the term of the 2021 annual incentive agreement, either (i) a grant with a value of $ 3.0 million, which will vest in full three years from the date of the grant (“Time Based Vesting Equity Award”) or (ii) a performance based award of restricted stock (“Performance-Based TSR Equity Award”) with an annual value at grant of $ 12.0 million, relating to our total stockholder return objectives.
+Added: The Acquisition Related Grant will vest in full on the third anniversary of the grant date.
+Added: The Performance-Based TSR Equity Award will vest, in whole or in part, based on the attainment of total stockholder return goals over a five-year period.
+Added: In April 2021, our chief executive officer elected to receive the Time Based Vesting Equity Award option for 2021;
+Added: therefore, we granted our chief executive officer 184,729 shares of restricted common stock with a grant date fair value of $ 3.1 million that vest in full in April 2024.
+Added: In July 2021, we granted our chief executive officer 165,746 shares of performance based restricted stock with a grant date fair value of $ 3.0 million in connection with the Acquisition Related Grant, which vest in full in July 2024.
+Added: In addition, 294,985 shares of performance-based restricted stock granted in 2018 vested in the third quarter of 2021, which were net settled for 150,530 common shares.
+Added: In November 2021, in accordance with the terms of the 2021 annual incentive agreement, our chief executive officer elected to receive the Time Based Vesting Equity Award option for 2022, which he also elected to defer until March 2027, subject to section 409(a) of the Internal Revenue Code.
+Added: The deferred Time Based Vesting Equity Award will be granted in the form of restricted stock units, will have no voting rights and is eligible to receive dividend equivalents equal to the dividends on our common stock as, and when, declared by our Board of Directors.
+Added: ARBOR REALTY TRUST, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
+Added: December 31, 2020
+Added: In 2020 and 2019, we granted our chief executive officer 45,928 shares and 58,738 shares, respectively, of restricted common stock with a grant date fair value of $ 0.5 million and $ 0.7 million, respectively, and 275,569 and 352,427 , respectively, of performance-based restricted stock units with a grant date fair value of $ 0.1 million and $ 1.7 million, respectively.
+Added: One quarter of the restricted common stock vest on the grant date and one quarter vest on each of the first, second and third anniversaries of the grant date.
The performance-based restricted stock units vest at the end of a four-year performance period based on our achievement of certain total stockholder return objectives.
−Removed: To date, our chief executive officer was granted in the aggregate 2,325,592 performance-based restricted stock units, of which 448,980 , 421,348 units and 445,765 units fully vested based on achieving the performance objectives for the four-year periods ended December 31, 2020, 2019 and 2018, respectively.
−Removed: The 421,348 and 445,765 fully vested units were net settled for 215,014 and 203,492 , respectively, common shares in 2020 and 2019, respectively.
−Removed: In 2020, 2019 and 2018, we also granted our chief executive officer 313,152 shares, 246,508 shares and 294,985 shares, respectively, of performance-based restricted stock with a grant date fair value of $ 2.9 million, $ 3.0 million and $ 3.4 million, respectively, as a result of achieving goals related to the integration of the Acquisition.
−Removed: The performance-based restricted stock vests in full three years after the grant date.
+Added: In 2021 and 2020, previously granted performance-based restricted stock units of 448,980 and 421,348 units, respectively, fully vested based on achieving the performance objectives for the four-year periods ended December 31, 2020 and 2019, respectively.
+Added: The 448,980 and 421,348 fully vested units were net settled for 229,083 and 215,014 , respectively, of common shares in 2021 and 2020, respectively.
+Added: In 2020 and 2019, we also granted our chief executive officer 313,152 shares and 246,508 shares, respectively, of performance-based restricted stock with a grant date fair value of $ 2.9 million and $ 3.0 million, respectively, as a result of achieving goals related to the integration of the Acquisition.
+Added: The performance-based restricted stock vest in full three years after the grant date.
In 2020, we withheld 175,102 shares from the net settlement of previously granted performance-based restricted stock that vested in 2020 for payment of withholding taxes.
During 2021, 2020 and 2019, we recorded total stock-based compensation expense of $ 9.3 million, $ 8.6 million and $ 8.8 million, respectively, to employee compensation and benefits and $ 0.6 million, $ 0.5 million and $ 0.7 million, respectively, to selling and administrative expense.
−Removed: During 2020, a total of 1,248,355 shares of restricted stock and restricted stock units with a grant date fair value of $ 8.7 million vested.
+Added: During 2021, a total of 1,102,761 shares of restricted stock and restricted stock units vested with a grant date fair value of $ 9.6 million.
As of December 31, 2021 and 2020, there were 1,257,199 shares and 1,300,568 shares, respectively, of unvested restricted common stock with a grant date fair value of $ 17.1 million and $ 14.4 million, respectively.
1 unchanged sentence
Earnings Per Share.
−Removed: Basic EPS is calculated by dividing net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during each period inclusive of unvested restricted stock with full dividend participation rights.
−Removed: Diluted EPS is calculated by dividing net income by the weighted average number of shares of common stock outstanding, plus the additional dilutive effect of common stock equivalents during each period using the treasury stock method.
+Added: Basic EPS is calculated by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding during each period inclusive of unvested restricted stock with full dividend participation rights.
+Added: Diluted EPS is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding, plus the additional dilutive effect of common stock equivalents during each period using the treasury stock method.
Our common stock equivalents include the weighted average dilutive effect of performance-based restricted stock units granted to our chief executive officer, OP Units and convertible senior unsecured notes.
12 unchanged sentences
Dilutive effect of convertible notes (4)
−Removed: Dilutive effect of stock dividend (5)
Weighted average shares outstanding
2 unchanged sentences
(2) We consider OP Units to be common stock equivalents as the holders have voting rights, the right to distributions and the right to redeem the OP Units for the cash value of a corresponding number of shares of common stock or a corresponding number of shares of common stock, at our election.
−Removed: Kaufman is granted restricted stock units annually, which vest at the end of a four -year performance period based upon our achievement of total stockholder return objectives.
+Added: (3) Our chief executive officer was granted restricted stock units, which vest at the end of a four-year performance period based upon our achievement of total stockholder return objectives.
(4) The convertible senior unsecured notes impact diluted earnings per share if the average price of our common stock exceeds the conversion price, as calculated in accordance with the terms of the indenture.
−Removed: (5) Represents the dilutive effect of the portion of the special dividend that was paid with common shares.
+Added: Our adoption of ASU 2020-06 on January 1, 2022 changes the way in which we account for our convertible debt, see Note 2 for details.
Note 17 — Income Taxes
2 unchanged sentences
Certain REIT income may be subject to state and local income taxes.
−Removed: We did not have any REIT–federal taxable income, net of dividends paid and net operating loss deductions, for 2020, and therefore, have not provided for REIT federal income tax expense.
−Removed: In 2019, we elected to retain excess inclusion income rather than passing it through to our stockholders.
−Removed: Consequently, we had REIT-federal taxable income, net of dividends paid deduction, for 2019, and therefore, had provided for REIT federal income tax expense of $ 0.6 million attributable to excess inclusion income.
−Removed: In 2018, we did not have any REIT–federal taxable income, net of dividends paid and net operating loss deductions, and therefore, did not provide for REIT federal income tax expense.
−Removed: In 2020, the REIT incurred no state tax expense.
−Removed: In 2019 and 2018, the REIT incurred state tax expense/(benefit) in the amount of $ 0.1 million and ($ 0.1 ) million, respectively.
−Removed: For the 2009 and 2010 tax years, the income and the tax on certain debt extinguishment transactions was, at our election, deferred to be recognized ratably over five years from 2014 to 2018.
−Removed: Certain of our assets and operations that would not otherwise comply with the REIT requirements, such as the Agency Business and our residential mortgage banking joint venture, are owned or conducted through our taxable REIT subsidiaries (the “TRS Consolidated Group”), the majority of the income of which is subject to U.S.
−Removed: federal, state and local income taxes.
−Removed: The TRS Consolidated Group has federal net operating losses from prior years which will be used against the income from the Agency Business subject to loss limitation rules.
−Removed: For 2020, 2019 and 2018, we recorded a provision for income taxes related to the assets held in the TRS Consolidated Group and the REIT in the amount of $ 40.4 million, $ 15.0 million and $ 9.7 million, respectively.
−Removed: In 2020, the change in valuation allowance was due to the impact of state tax rate changes.
−Removed: In 2019, valuation allowance previously recorded at the
+Added: We did not have any REIT–federal taxable income, net of dividends paid and net operating loss deductions, for 2021 and 2020, and therefore, have not provided for REIT federal income tax expense in either year.
+Added: We have elected to retain excess inclusion income rather than passing it through to our stockholders.
+Added: Consequently, we had REIT-federal taxable income, net of dividends paid deduction, for 2019, and therefore, have provided for REIT federal income tax expense of $ 0.6 million attributable to excess inclusion income.
+Added: In 2021 and 2020, the REIT incurred no state income tax expense, while in 2019, the REIT incurred state income tax expense of $ 0.1 million.
+Added: Certain of our assets and operations that would not otherwise comply with the REIT requirements, such as the Agency Business and our residential mortgage banking joint venture, are owned or conducted through our taxable REIT subsidiaries (the “TRS
ARBOR REALTY TRUST, INC.
2 unchanged sentences
December 31, 2020
−Removed: TRS Consolidated Group on the deferred tax assets subject to loss limitation rules was released in the amount of $ 3.3 million.
−Removed: In 2018, valuation allowance was recorded at the TRS Consolidated Group in the amount of $ 0.3 million on the deferred tax assets related to capital loss carryforwards.
−Removed: In January 2018, the $ 50.0 million preferred equity interest entered into with ACM to finance a portion of the Acquisition purchase price was paid off.
−Removed: When we entered into the Acquisition, we established a deferred tax liability in connection with the $ 50.0 million preferred equity interest.
−Removed: Upon payoff in January 2018, the deferred tax liability was written off and we recorded a deferred tax benefit in the amount of $ 12.5 million.
+Added: Consolidated Group”), the majority of the income of which is subject to U.S.
+Added: federal, state and local income taxes.
+Added: The TRS Consolidated Group had federal net operating losses from prior years which has been used against the income from the Agency Business subject to loss limitation rules.
+Added: For 2021, 2020 and 2019, we recorded a provision for income taxes related to the assets held in the TRS Consolidated Group and the REIT in the amount of $ 46.3 million, $ 40.4 million and $ 15.0 million, respectively.In 2021, a $ 0.1 million valuation allowance previously recorded at the TRS Consolidated Group on the deferred tax assets subject to loss limitation rules was released.
+Added: In 2020, the change in valuation allowance was due to the impact of state tax rate changes.
+Added: In 2019, a $ 3.3 million valuation allowance previously recorded at the TRS Consolidated Group on the deferred tax assets subject to loss limitation rules was released.
A summary of our pre-tax GAAP income is as follows (in thousands):
6 unchanged sentences
Current tax provision:
−Removed: Deferred tax provision (benefit) :
+Added: Deferred tax provision :
Valuation allowance
7 unchanged sentences
Change in valuation allowance
−Removed: Preferred equity interest deferred tax write‑off
Effective income tax rate
15 unchanged sentences
At December 31, 2021, our TRS Consolidated Group, had $ 33.2 million of deferred tax assets, net of a $ 0.3 million valuation allowance.
−Removed: The deferred tax assets consist of expenses not currently deductible, loan loss reserves, net operating loss and capital loss carryforwards.
−Removed: Our TRS Consolidated Group's deferred tax assets are offset by $ 32.2 million in deferred tax liabilities consisting of timing differences from investments in equity affiliates, intangibles and mortgage servicing rights.
+Added: The deferred tax assets consist of expenses not currently deductible, loan loss reserves and net operating loss and capital loss carryforwards.
+Added: Our TRS Consolidated Group’s deferred tax assets are offset by $ 44.1 million in deferred tax liabilities consisting of timing differences from mortgage servicing rights, investments in equity affiliates and intangibles.
At December 31, 2020, our TRS Consolidated Group, had $ 32.2 million of deferred tax assets, net of a $ 0.4 million valuation allowance.
−Removed: The deferred tax assets consist of expenses not currently deductible, loan loss reserves, net operating loss and capital loss carryforwards.
−Removed: Our TRS Consolidated Group's deferred tax assets are offset by $ 22.6 million in deferred tax liabilities consisting of timing differences from investments in equity affiliates, intangibles and mortgage servicing rights.
−Removed: As of both December 31, 2020 and 2019, the REIT (excluding the TRS Consolidated Group) had no federal net operating loss carryforwards remaining and no capital loss carryforwards.
−Removed: At both December 31, 2020 and 2019, the TRS Consolidated Group had federal net operating loss carryforwards of $ 0.5 million, which will expire through 2031 and capital loss carryforwards of $ 1.1 million, which will expire through 2023.
−Removed: At December 31, 2020, the TRS Consolidated Group had state net operating loss carryforwards of $ 0.3 million, which will begin to expire in 2036.
−Removed: At December 31, 2019, the TRS Consolidated Group had no state net operating loss carryforwards.
+Added: The deferred tax assets consist of expenses not currently deductible, loan loss reserves and net operating loss and capital loss carryforwards.
+Added: Our TRS Consolidated Group’s deferred tax assets are offset by $ 32.2 million in deferred tax liabilities consisting of timing differences from mortgage servicing rights, investments in equity affiliates and intangibles.
+Added: As of both December 31, 2021 and 2020, the REIT (excluding the TRS Consolidated Group) had no federal net operating loss carryforwards and no capital loss carryforwards.
+Added: At December 31, 2021, the TRS Consolidated Group had no federal net operating loss carryforwards remaining and capital loss carryforwards of $ 1.1 million, which will expire through 2023.
+Added: At December 31, 2020, the TRS Consolidated Group had federal net operating loss carryforwards of $ 0.5 million and capital loss carryforwards of $ 1.1 million expiring through 2023.
+Added: At December 31, 2021 and 2020, the TRS Consolidated Group had state net operating loss carryforwards of $ 0.2 million and $ 0.3 million, respectively, which will begin to expire in 2036.
The TRS Consolidated Group is currently under audit in certain state and local jurisdictions for tax years 2017-2020.
−Removed: While the impact of the current income tax examinations are undetermined, it is not expected to have a material impact on our consolidated financial statements.
+Added: While the impact of the current income tax examinations was undetermined, it is not expected to be material to our consolidated financial statements.
We have assessed our tax positions for all open years, which includes 2017-2021, and have concluded that there were no material uncertainties to be recognized.
2 unchanged sentences
Support Agreement and Employee Secondment Agreement.
−Removed: We have a support agreement with ACM where we provide limited support services to ACM and its affiliates and they reimburse us for the costs of performing such services.
−Removed: We also have an employee secondment agreement with ACM pursuant to which we have seconded certain employees to ACM and ACM covers the cost of those seconded employees.
−Removed: During 2020, 2019 and 2018, we incurred $ 2.4 million, $ 2.7 million and $ 1.3 million, respectively, of costs for services provided to ACM, which are included in due from related party on the consolidated balance sheets.
+Added: We have a support agreement and a secondment agreement with ACM and certain of its affiliates and certain affiliates of a relative of our chief executive officer (“Service Recipients”) where we provide support services and seconded employees to the Service Recipients.
+Added: The Service Recipients reimburse us for the costs of performing such services and the cost of the seconded employees.
+Added: During 2021, 2020 and 2019, we incurred $ 3.2 million, $ 2.4 million
ARBOR REALTY TRUST, INC.
2 unchanged sentences
December 31, 2020
+Added: and $ 2.7 million, respectively, of costs for services provided and employees seconded to the Service Recipients, all of which were reimbursed to us and included in due from related party on the consolidated balance sheets.
Other Related Party Transactions.
−Removed: Due from related party was $ 12.4 million and $ 10.7 million at December 31, 2020 and 2019, respectively, which consisted primarily of amounts due from our affiliated servicing operations related to real estate transactions closing at the end of 2020 and 2019 and amounts due from ACM for costs incurred in connection with the shared services agreement described above.
+Added: Due from related party was $ 84.3 million and $ 12.4 million at December 31, 2021 and 2020, respectively, which consisted primarily of amounts due from our affiliated servicing operations related to real estate transactions closing at the end of 2021 and 2020 and amounts due from ACM for costs incurred in connection with the support and secondment agreements described above.
Due to related party was $ 26.6 million and $ 2.4 million at December 31, 2021 and 2020, respectively, and consisted of loan payoffs, holdbacks and escrows to be remitted to our affiliated servicing operations related to real estate transactions.
−Removed: In December 2020, we committed to fund a $ 32.5 million bridge loan and we made a $ 3.5 million preferred equity investment in a SFR build-to-rent construction project.
+Added: In December 2021, we invested $ 4.2 million for 49.3 % interest in a limited liability company (“LLC”) which purchased a retail property for $ 32.5 million and assumed an existing $ 26.0 million CMBS loan.
+Added: A portion of the property can potentially be converted to office space, of which we obtain the right to occupy, in part.
+Added: An entity owned by an immediate family member of our chief executive officer also made an investment in the LLC for a 10.0 % ownership, is the managing member and holds the right to purchase our interest in the LLC.
+Added: In October 2021, we entered into a $ 40.0 million promissory note with ACM to fund a portion of a $ 67.0 million bridge loan we originated to a third-party to purchase a multifamily property.
+Added: The promissory note has an interest rate of LIBOR plus 3.0 % and was scheduled to mature in April 2022.
+Added: In December 2021, the borrower repaid the bridge loan in full and we repaid the promissory note.
+Added: In December 2021, the promissory note was amended to include the funding of an additional asset and the maturity date was extended to May 2022.
+Added: As of December 31, 2021, we have no outstanding borrowings under the promissory note.
+Added: Interest expense recorded from this promissory note was $ 0.2 million for 2021.
+Added: In March 2021, we originated a $ 63.4 million bridge loan to a third-party to purchase a multifamily property from a multifamily-focused commercial real estate investment fund sponsored and managed by our chief executive officer and one of his immediate family members, which fund has no continued involvement with the property following the purchase.
+Added: The loan has an interest rate of LIBOR plus 3.75 % with a LIBOR floor of 0.25 % and matures in March 2024.
+Added: Interest income recorded from this loan was $ 2.1 million for 2021.
+Added: In 2020, we committed to fund a $ 32.5 million bridge loan (of which $ 3.2 million was funded as of December 31, 2021) and made a $ 3.5 million preferred equity investment in an SFR build-to-rent construction project.
An entity owned by an immediate family member of our chief executive officer also made an equity investment in the project and owns a 21.8 % equity interest in the borrowing entity.
−Removed: The bridge loan, which was not funded as of December 31, 2020, has an interest rate of LIBOR plus 5.50 % with a LIBOR floor of 0.75 % and matures in October 2023 and the preferred equity investment has a fixed rate of 12 % and matures in October 2023.
−Removed: Interest income recorded from these loans totaled less than $ 0.1 million for 2020.
−Removed: In October 2020, we committed to fund a $ 30.5 million bridge loan and we made a $ 4.6 million preferred equity investment in a SFR build-to-rent construction project.
+Added: The bridge loan has an interest rate of LIBOR plus 5.5 % with a LIBOR floor of 0.75 % and matures in October 2023 and the preferred equity investment has a fixed rate of 12.0 % and matures in October 2023.
+Added: Interest income recorded from these loans was $ 0.5 million and less than $ 0.1 million for 2021 and 2020, respectively.
+Added: In 2020, we committed to fund a $ 30.5 million bridge loan and we made a $ 4.6 million preferred equity investment in a SFR build-to-rent construction project.
ACM and an entity owned by an immediate family member of our chief executive officer also made equity investments in the project and own an 18.9 % equity interest in the borrowing entity.
−Removed: The bridge loan, which was not funded as of December 31, 2020, has an interest rate of LIBOR plus 5.50 % with a LIBOR floor of 0.75 % and matures in May 2023 and the preferred equity investment has a fixed rate of 12 % and matures in April 2023.
−Removed: Interest income recorded from these loans totaled $ 0.1 million for 2020.
−Removed: We have a $ 35.0 million bridge loan and a $ 7.8 million preferred equity interest on an office building in New York City.
−Removed: The property is controlled by a third party and, beginning in June 2020, its day-to-day operations are managed by an entity owned by an immediate family member of our chief executive officer, which is entitled to an annual fee of $ 0.3 million and a 33 % equity participation interest.
+Added: The bridge loan (of which $ 3.5 million was funded as of December 31, 2021) has an interest rate of LIBOR plus 5.5 % with a LIBOR floor of 0.75 % and matures in May 2023 and the preferred equity investment has a fixed rate of 12.0 % and matures in April 2023.
+Added: Interest income recorded from these loans was $ 0.6 million and $ 0.1 million for 2021 and 2020, respectively.
+Added: We have a $ 35.0 million bridge loan and a $ 8.2 million preferred equity interest on an office building.
+Added: The property is controlled by a third party.
+Added: The day-to-day operations were previously managed by an entity owned by an immediate family member of our chief executive officer.
+Added: In September 2021, we entered into a forbearance agreement with the borrower on the outstanding bridge loan to defer all interest owed to payoff.
+Added: Interest income recorded from these loans was $ 1.3 million and $ 1.6 million for 2021 and 2020, respectively.
In certain instances, our business requires our executives to charter privately owned aircraft in furtherance of our business.
−Removed: In 2019, we entered into an aircraft time-sharing agreement with an entity controlled by our chief executive officer that owns a private aircraft.
+Added: In 2019, we entered into an aircraft time-sharing agreement with an entity controlled by our chief executive officer that owns a private
+Added: ARBOR REALTY TRUST, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
+Added: December 31, 2020
Pursuant to the agreement, we reimburse the aircraft owner for the required costs under Federal Aviation Administration regulations for the flights our executives’ charter.
−Removed: During 2020 and 2019, we reimbursed the aircraft owner $ 0.5 million and $ 0.1 million, respectively, for the flights chartered by our executives pursuant the agreement.
+Added: During 2021, 2020 and 2019, we reimbursed the aircraft owner $ 0.2 million, $ 0.5 million and $ 0.1 million, respectively, for the flights chartered by our executives pursuant the agreement.
In 2019, we, along with ACM, certain executives of ours and a consortium of independent outside investors, formed AMAC III, a multifamily-focused commercial real estate investment fund sponsored and managed by our chief executive officer and one of his immediate family members.
3 unchanged sentences
In June 2020, for full satisfaction of the mezzanine loan, AMAC III became the owner of the property.
−Removed: In August 2020, the $ 34.0 million bridge loan was refinanced with a $ 35.3 million bridge loan, which bears interest at a rate of 350 basis points over LIBOR and matures in August 2022.
+Added: In August 2020, the $ 34.0 million bridge loan was refinanced with a $ 35.4 million bridge loan, which bears interest at a rate of LIBOR plus 3.5 % and matures in August 2022.
We also originated a $ 15.6 million Private Label loan in December 2019 to a borrower which is 100 % owned by AMAC III, which bears interest at a fixed rate of 3.735 % and matures in January 2030.
In May 2020, we sold the Private Label loan to an unconsolidated affiliate of ours.
−Removed: Interest income recorded from our bridge and Private Label loans totaled $ 1.9 million and $ 3.3 million for 2020 and 2019, respectively.
+Added: Interest income recorded from these loans was $ 1.3 million, $ 1.9 million and $ 3.3 million for 2021, 2020 and 2019, respectively.
In 2018, we originated a $ 61.2 million bridge loan on a multifamily property owned in part by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns 10 % of the borrowing entity.
−Removed: The loan has an interest rate of LIBOR plus 4.50 % with a LIBOR floor of 2.00 % and matures in October 2021.
−Removed: In the fourth quarter of 2019, the related party investors liquidated their equity investment.
−Removed: Interest income recorded from this loan totaled $ 1.3 million and $ 0.2 million for 2019 and 2018, respectively.
−Removed: ARBOR REALTY TRUST, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
−Removed: December 31, 2020
+Added: The loan had an interest rate of LIBOR plus 4.5 % with a LIBOR floor of 2.0 % and was scheduled to mature in October 2021.
+Added: In 2019, the related party investors liquidated their equity investment.
+Added: Interest income recorded from this loan was $ 1.3 million for 2019.
In 2018, we originated a $ 37.5 million bridge loan, which was used to purchase several multifamily properties.
In 2019, an entity owned, in part, by an immediate family member of our chief executive officer, purchased a 23.9 % interest in the borrowing entity.
−Removed: The loan had an interest rate of LIBOR plus 4.25 % with a LIBOR floor of 2.375 % and was scheduled to mature in in October 2020.
+Added: The loan had an interest rate of LIBOR plus 4.25 % with a LIBOR floor of 2.375 % and was scheduled to mature in October 2020.
In May 2020, the borrower repaid this loan in full.
−Removed: Interest income recorded from this loan totaled $ 1.4 million and $ 2.7 million for 2020 and 2019, respectively.
+Added: Interest income recorded from this loan was $ 1.4 million and $ 2.7 million for 2020 and 2019, respectively.
In 2018, we acquired a $ 19.5 million bridge loan originated by ACM.
The loan was used to purchase several multifamily properties by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns 85 % of the borrowing entity.
−Removed: The loan has an interest rate of LIBOR plus 4.0 % with a LIBOR floor of 2.125 % and matures in July 2021.
−Removed: Interest income recorded from this loan totaled $ 1.2 million, $ 1.3 million and $ 0.3 million for 2020, 2019 and 2018, respectively.
+Added: The loan has an interest rate of LIBOR plus 4.0 % with a LIBOR floor of 2.125 % and was scheduled to mature in July 2021.
+Added: In January 2021, the borrower repaid this loan in full.
+Added: Interest income recorded from this loan was less than $ 0.1 million and $ 1.3 million for 2021 and 2020, respectively.
In 2018, we originated a $ 17.7 million bridge loan to an entity owned, in part, by an immediate family member of our chief executive officer, who owns a 10.8 % interest in the borrowing entity.
1 unchanged sentence
The loan has a fixed interest rate of 10.0 % and was scheduled to mature in February 2020.
−Removed: In September 2019, the borrower made a partial paydown of principal totaling $ 4.7 million and the remaining balance was paid off in January 2020.
−Removed: Interest income recorded from this loan totaled $ 0.1 million, $ 1.8 million and $ 0.8 million for 2020, 2019 and 2018, respectively.
+Added: In 2019, the borrower made a partial paydown of principal totaling $ 4.7 million and the remaining balance was paid off in January 2020.
+Added: Interest income recorded from this loan was $ 0.1 million and $ 1.8 million for 2020 and 2019, respectively.
In 2018, we originated a $ 21.7 million bridge loan on a multifamily property owned in part by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns 75 % in the borrowing entity.
−Removed: The loan has an interest rate of LIBOR plus 4.75 % with a LIBOR floor of 1.25 % and matures in June 2021.
−Removed: Interest income recorded from this loan totaled $ 1.4 million for both 2020 and 2019, and $ 0.6 million for 2018.
+Added: The loan has an interest rate of LIBOR plus 4.75 % with a LIBOR floor of 1.25 % and was scheduled to mature in June 2021, which was extended to August 2023.
+Added: Interest income recorded from this loan was $ 1.3 million for 2021, and $ 1.4 million for both 2020 and 2019.
In 2018, we acquired a $ 9.4 million bridge loan originated by ACM.
The loan was used to purchase several multifamily properties by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns 75 % of the borrowing entity.
−Removed: The loan has an interest rate of LIBOR plus 5.0 % with a LIBOR floor of 1.25 % and was scheduled to mature in January 2021.
−Removed: In January 2021, the maturity date of this loan was extended to January 2022.
−Removed: Interest income recorded from this loan totaled $ 0.6 million for both 2020 and 2019, and $ 0.3 million for 2018.
−Removed: In 2018, we paid $ 50.0 million in full satisfaction of the related party financing we entered into with ACM to finance a portion of the Acquisition purchase price.
−Removed: We incurred interest expense related to this financing of $ 0.3 million for 2018.
+Added: The loan has an interest rate of LIBOR plus 5.0 % with a LIBOR floor of 1.25 % and was scheduled to mature in January 2021, which was extended to January 2022 and, in September 2021, this loan paid off in full.
+Added: Interest income recorded from this loan was $ 0.4 million for 2021, and $ 0.6 million for both 2020 and 2019.
+Added: ARBOR REALTY TRUST, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
+Added: December 31, 2020
In 2017, we acquired a $ 32.8 million bridge loan originated by ACM.
2 unchanged sentences
In 2019, the borrower repaid this loan in full.
−Removed: Interest income recorded from this loan totaled $ 1.7 million and $ 2.4 million for 2019 and 2018, respectively.
+Added: Interest income recorded from this loan was $ 1.7 million for 2019.
In 2017, we originated two bridge loans totaling $ 28.0 million on two multifamily properties owned in part by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns 45 % of the borrowing entity.
The loans had an interest rate of LIBOR plus 5.25 % with LIBOR floors ranging from 1.24 % to 1.54 % and were scheduled to mature in the fourth quarter of 2020.
−Removed: The borrower refinanced these loans with a $ 31.1 million bridge loan we originated in 2019 with an interest rate of LIBOR plus 4.0 %, a LIBOR floor of 1.80 % and a maturity date in October 2021.
−Removed: Interest income recorded from these loans totaled $ 1.9 million, $ 2.2 million and $ 2.1 million for 2020, 2019 and 2018, respectively.
−Removed: In 2017, we originated a $ 36.0 million bridge loan on a multifamily property owned in part by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns a 95 % interest in the borrowing entity.
−Removed: The loan had an interest rate of LIBOR plus 4.5 % with a LIBOR floor of 1 % and was scheduled to mature in July 2020.
−Removed: This loan was repaid in full in 2018.
−Removed: Interest income recorded from this loan totaled $ 1.9 million for 2018.
+Added: The borrower refinanced these loans with a $ 31.1 million bridge loan we originated in 2019 with an interest rate of LIBOR plus 4.0 %, a LIBOR floor of 1.8 % and a maturity date in October 2021, which was extended to October 2022.
+Added: Interest income recorded from these loans was $ 1.9 million for both 2021 and 2020, and $ 2.2 million for 2019.
In 2017, we originated a $ 46.9 million Fannie Mae loan on a multifamily property owned in part by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers) which owns a 17.6 % interest in the borrowing entity.
−Removed: ARBOR REALTY TRUST, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
−Removed: December 31, 2020
−Removed: carry a maximum loss-sharing obligation with Fannie Mae on this loan of up to 5 % of the original UPB.
+Added: We carry a maximum loss-sharing obligation with Fannie Mae on this loan of up to 5 % of the original UPB.
Servicing revenue recorded from this loan was less than $ 0.1 million for all periods presented.
−Removed: In 2017, a consortium of investors (which includes, among other unaffiliated investors, our chief executive officer and ACM) invested $ 2.0 million for a 26.1 % ownership interest in two portfolios of multifamily properties which has two bridge loans totaling $ 14.8 million originated by us in 2016.
−Removed: The loans had an interest rate of LIBOR plus 5.25 % with a LIBOR floor of 0.5 % and were scheduled to mature in November 2018.
−Removed: One of the loans was repaid in full in 2017 and the remaining loan paid off in 2018.
−Removed: Interest income recorded from the loan that paid off in 2018 was $ 0.3 million for 2018.
In 2017, Ginkgo Investment Company LLC (“Ginkgo”), of which one of our directors is a 33 % managing member, purchased a multifamily apartment complex which assumed an existing $ 8.3 million Fannie Mae loan that we service.
7 unchanged sentences
In January 2019, $ 10.9 million of the $ 12.9 million remaining bridge loan paid off, with the $ 2.0 million remaining UPB converting to a mezzanine loan with a fixed interest rate of 10.0 % and a January 2024 maturity.
−Removed: Interest income recorded from these loans totaled $ 0.2 million, $ 0.3 million and $ 1.9 million for 2020, 2019 and 2018, respectively.
+Added: Interest income recorded from the remaining mezzanine loan was $ 0.2 million for both 2021 and 2020, and $ 0.3 million for 2019.
In 2016, we originated a $ 12.7 million bridge loan and a $ 5.2 million preferred equity investment on two multifamily properties owned in part by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns a 50 % interest in the borrowing entity.
1 unchanged sentence
The bridge loan and the preferred equity investment paid off in full in May 2019.
−Removed: In March 2020, we originated a $ 14.8 million Private Label loan and a $ 3.4 million mezzanine loan to the properties.
+Added: In 2020, we originated a $ 14.8 million Private Label loan and a $ 3.4 million mezzanine loan on two multifamily properties owned in part by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns a 50 % interest in the borrowing entity.
The Private Label loan bears interest at a fixed rate of 3.1 % and the mezzanine loan bears interest at a fixed rate of 9.0 % and both loans mature in April 2030.
−Removed: In May 2020, we sold the Private Label loan to an unconsolidated affiliate of ours.
−Removed: Interest income recorded from these loans totaled $ 0.3 million, $ 0.6 million and $ 1.4 million for 2020, 2019 and 2018, respectively.
−Removed: In 2016, we originated a $ 19.0 million bridge loan on a multifamily property owned in part by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns a 7.5 % interest in the borrowing entity.
−Removed: The loan had an interest rate of LIBOR plus 4.5 % with a LIBOR floor of 0.25 % and was scheduled to mature in January 2019.
−Removed: In January 2018, this loan paid off in full.
−Removed: Interest income recorded from this loan totaled $ 0.3 million for 2018.
+Added: In 2020, we sold the Private Label loan to an unconsolidated affiliate of ours.
+Added: Interest income recorded from these loans was $ 0.3 million for both 2021 and 2020, and $ 0.6 million for 2019.
In 2015, we invested $ 9.6 million for 50 % of ACM’s indirect interest in a joint venture with a third–party that was formed to invest in a residential mortgage banking business.
As a result of this transaction, we had an initial indirect interest of 22.5 % in this entity.
+Added: In January 2021, an equity investor in the underlying residential mortgage banking business exercised their right to purchase an additional interest in this investment, which decreased our indirect interest to 12.3 %.
We recorded income from these investments of $ 34.6 million, $ 75.7 million and $ 7.2 million for 2021, 2020 and 2019, respectively.
−Removed: In connection with a litigation settlement related to this investment, we provided a guaranty of up to 50 % of any amounts payable in connection with the settlement.
−Removed: ACM has also provided us with a guaranty to pay up to 50 % of any amounts we may pay under this guaranty.
−Removed: The final payment was made under this settlement in January 2020 and we have no additional exposure.
−Removed: Interest income recorded from loans originated in 2015 or prior years with our affiliates totaled $ 1.3 million for 2018.
−Removed: We, along with an executive officer of ours and a consortium of independent outside investors, hold equity investments in a portfolio of multifamily properties referred to as the “Lexford” portfolio, which is managed by an entity owned primarily by a consortium of affiliated investors, including our chief executive officer and an executive officer of ours.
−Removed: Based on the terms of the
+Added: During 2021 and 2020, we also received cash distributions totaling $ 28.0 million and $ 43.2 million, respectively, from this investment, which were classified as returns of capital.
ARBOR REALTY TRUST, INC.
2 unchanged sentences
December 31, 2020
−Removed: management contract, the management company is entitled to 4.75 % of gross revenues of the underlying properties, along with the potential to share in the proceeds of a sale or restructuring of the debt.
−Removed: In June 2018, the owners of Lexford restructured part of its debt and we originated twelve bridge loans totaling $ 280.5 million, which were used to repay in full certain existing mortgage debt and to renovate 72 multifamily properties included in the portfolio.
−Removed: The loans were originated in June 2018, had interest rates of LIBOR plus 4.0 % and were scheduled to mature in June 2021.
+Added: We, along with an executive officer of ours and a consortium of independent outside investors, hold equity investments in a portfolio of multifamily properties referred to as the “Lexford” portfolio, which is managed by an entity owned primarily by a consortium of affiliated investors, including our chief executive officer and an executive officer of ours.
+Added: Based on the terms of the management contract, the management company is entitled to 4.75 % of gross revenues of the underlying properties, along with the potential to share in the proceeds of a sale or restructuring of the debt.
+Added: In 2018, the owners of Lexford restructured part of its debt and we originated 12 bridge loans totaling $ 280.5 million, which were used to repay in full certain existing mortgage debt and to renovate 72 multifamily properties included in the portfolio.
+Added: The loans were originated in 2018, had interest rates of LIBOR plus 4.0 % and were scheduled to mature in June 2021.
During 2019, the borrower made payoffs and partial paydowns of principal totaling $ 250.0 million and in March 2020, the remaining balance of the loans were refinanced with a $ 34.6 million Private Label loan, which bears interest at a fixed rate of 3.3 % and matures in March 2030.
In May 2020, we sold the Private Label loan to an unconsolidated affiliate of ours.
−Removed: Interest income recorded from these loans totaled $ 0.5 million, $ 9.6 million and $ 10.1 million during 2020, 2019 and 2018, respectively.
−Removed: Further, as part of this June 2018 restructuring, $ 50.0 million in unsecured financing was provided by an unsecured lender to certain parent entities of the property owners.
+Added: Interest income recorded from these loans totaled $ 0.5 million and $ 9.6 million during 2020 and 2019, respectively.
+Added: Further, as part of this 2018 restructuring, $ 50.0 million in unsecured financing was provided by an unsecured lender to certain parent entities of the property owners.
ACM owns slightly less than half of the unsecured lender entity and, therefore, provided slightly less than half of the unsecured lender financing.
−Removed: In addition, in connection with our equity investment, we received distributions totaling $ 1.1 million, $ 3.5 million and $ 2.5 million during 2020, 2019 and 2018, respectively, which were recorded as income from equity affiliates.
−Removed: Separate from the loans we originated in June 2018, we provide limited (“bad boy”) guarantees for certain other debt controlled by Lexford.
+Added: In addition, in connection with our equity investment, we received distributions totaling $ 1.1 million and $ 3.5 million during 2020 and 2019, respectively, which were recorded as income from equity affiliates.
+Added: Separate from the loans we originated in 2018, we provide limited (“bad boy”) guarantees for certain other debt controlled by Lexford.
The bad boy guarantees may become a liability for us upon standard “bad” acts such as fraud or a material misrepresentation by Lexford or us.
−Removed: At December 31, 2020, this debt had an aggregate outstanding balance of $ 612.4 million and is scheduled to mature between 2021 and 2029.
+Added: At December 31, 2021, this debt had an aggregate outstanding balance of $ 612.9 million and is scheduled to mature between through 2029.
Several of our executives, including our chief financial officer, senior counsel and our chairman, chief executive officer and president, hold similar positions for ACM.
1 unchanged sentence
Furthermore, one of our directors serves as the trustee and co-trustee of two of the Kaufman Entities that hold membership interests in ACM.
−Removed: Upon the closing of the Acquisition in 2016, we issued OP Units, each paired with one share of our special voting preferred shares.
−Removed: At December 31, 2020, ACM holds 3,528,083 shares of our common stock and 11,901,068 OP Units, which represents 11.0 % of the voting power of our outstanding stock.
+Added: At December 31, 2021, ACM holds 2,535,870 shares of our common stock and 10,665,530 OP Units, which represents approximately 8 % of the voting power of our outstanding stock.
Our Board of Directors approved a resolution under our charter allowing our chief executive officer and ACM, (which our chief executive officer has a controlling equity interest in), to own more than the 5 % ownership interest limit of our common stock as stated in our amended charter.
Note 19 — Employee Benefits
−Removed: We have a 401(k) defined contribution plan (the "401(k) Plan") which is available to all employees who have completed six months of continuous service.
+Added: We have a 401(k) defined contribution plan (the “401(k) Plan”) which is available to all employees who have completed six months of continuous service.
The 401(k) Plan matches 25 % of the first 6 % of each employee's contribution.
3 unchanged sentences
We have a non-qualified deferred compensation plan (the “Deferred Comp Plan") which is offered to certain full-time employees and is subject to the rules of section 409(a) of the Internal Revenue Code.
−Removed: The Deferred Comp Plan can be modified or discontinued at any time and, in 2020, we modified the eligibility requirements to allow participation to certain additional employees.
+Added: The Deferred Comp Plan can be modified or discontinued at any time.
All eligible participating employees may defer a portion of their compensation and, depending on the participant eligibility requirements met, we are contractually obligated to:
4 unchanged sentences
At December 31, 2021 and 2020, we had recorded liabilities totaling $ 25.5 million and $ 18.7 million, respectively, and assets of $ 15.1 million and $ 14.1 million, respectively, related to the Deferred Comp Plan, which is included in other liabilities and other assets, respectively, in our consolidated balance sheets.
−Removed: Note 21 — Segment Information
−Removed: The summarized statements of income and balance sheet data, as well as certain other data, by segment are included in the following tables ($ in thousands).
−Removed: Specifically identifiable costs are recorded directly to each business segment.
−Removed: For items not specifically identifiable, costs have been allocated between the business segments using the most meaningful allocation
ARBOR REALTY TRUST, INC.
2 unchanged sentences
December 31, 2020
−Removed: methodologies, which was predominately direct labor costs (i.e., time spent working on each business segment).
+Added: Note 20 — Segment Information
+Added: The summarized statements of income and balance sheet data, as well as certain other data, by segment are included in the following tables ($ in thousands).
+Added: Specifically identifiable costs are recorded directly to each business segment.
+Added: For items not specifically identifiable, costs have been allocated between the business segments using the most meaningful allocation methodologies, which was predominately direct labor costs (i.e., time spent working on each business segment).
Such costs include, but are not limited to, compensation and employee related costs, selling and administrative expenses and stock-based compensation.
21 unchanged sentences
Total other expenses
−Removed: Income before extinguishment of debt, sale of real estate, income from equity affiliates and income taxes
+Added: Income before extinguishment of debt, gain on real estate, income from equity affiliates and income taxes
Loss on extinguishment of debt
−Removed: (Loss) gain on sale of real estate
+Added: Gain on real estate
Income from equity affiliates
26 unchanged sentences
Depreciation and amortization
−Removed: Impairment loss on real estate owned
Provision for loss sharing (net of recoveries)
+Added: Provision for credit losses (net of recoveries)
Total other expenses
−Removed: Income before extinguishment of debt, income from equity affiliates and income taxes
+Added: Income before extinguishment of debt, (loss) gain on real estate, income from equity affiliates and income taxes
Loss on extinguishment of debt
+Added: (Loss) gain on real estate
Income from equity affiliates
18 unchanged sentences
Property operating income
−Removed: Gain on derivative instruments, net
+Added: Loss on derivative instruments, net
Other income, net
7 unchanged sentences
Provision for loss sharing (net of recoveries)
−Removed: Provision for loan losses (net of recoveries)
−Removed: Litigation settlement gain
Total other expenses
2 unchanged sentences
Income from equity affiliates
−Removed: Benefit from (provision for) income taxes
+Added: Provision for income taxes
Preferred stock dividends
1 unchanged sentence
Net income attributable to common stockholders
−Removed: (1) Includes certain corporate expenses not allocated to the two reportable segments, primarily income allocated to the noncontrolling interest holders.
+Added: (1) Includes income allocated to the noncontrolling interest holders not allocated to the two reportable segments.
ARBOR REALTY TRUST, INC.
13 unchanged sentences
Goodwill and other intangible assets
+Added: Other assets and due from related party
Debt obligations
Allowance for loss-sharing obligations
−Removed: Other liabilities
+Added: Other liabilities and due to related parties
Total liabilities
19 unchanged sentences
Structured Business
−Removed: New loan originations (1)
+Added: Bridge loans (1)
+Added: Mezzanine loans
+Added: Preferred equity investments
+Added: Other loans (2)
+Added: Total new loan originations
+Added: (1) Bridge loans in 2021 includes 103 SFR loans with a UPB of $ 389.2 million.
+Added: During 2021, 2020 and 2019, we committed to fund SFR loans totaling $ 729.5 million, $ 261.5 million and $ 63.2 million, respectively.
+Added: (2) Other loans in 2021 and 2020 includes 1 and 9 SFR permanent loans with a UPB of $ 26.2 million and $ 37.2 million, respectively.
Loan payoffs / paydowns
−Removed: (1) We committed to fund six SFR build-to-rent bridge loans totaling $ 197.8 million in the third and fourth quarters of 2020.
Agency Business
1 unchanged sentence
Private Label
+Added: SFR - Fixed Rate
Total loan commitment volume
2 unchanged sentences
Private Label
+Added: SFR - Fixed Rate
Sales margin (fee-based services as a % of loan sales)
6 unchanged sentences
Private Label
+Added: SFR - Fixed Rate
December 31, 2020
−Removed: ARBOR REALTY TRUST, INC.
+Added: Private Label
+Added: l ARBOR REALTY TRUST, INC.
AND SUBSIDIARIES
3 unchanged sentences
Bridge Loans:
−Removed: Bridge loans in excess of 3% of carrying amount of total loans:
−Removed: LIBOR + 2.60 % ‑ 5.00
−Removed: Floor 0.25 % ‑ 2.38
Bridge loans less than 3% of carrying amount of total loans (6):
−Removed: LIBOR + 0.00 % ‑ 12.72
−Removed: Floor 0.25 % ‑ 2.75
−Removed: Fixed 9.00 % ‑ 11.00
−Removed: LIBOR + 4.00 % ‑ 6.00
−Removed: Floor 0.15 % ‑ 1.66
−Removed: Fixed 0.00 % ‑ 11.64
−Removed: LIBOR + 4.00 % ‑ 11.60
−Removed: Floor 1.12 % ‑ 2.63
−Removed: LIBOR + 1.45 % ‑ 6.75
−Removed: LIBOR + 3.10 % ‑ 8.00
−Removed: Floor 0.24 % ‑ 1.24
+Added: L+ 2.50 % to 6.75
+Added: L Floor 0.10 % to 2.50
+Added: Fixed 3.83 % to 11.00
Single‑Family Rental
−Removed: LIBOR + 4.00 % ‑ 7.50
−Removed: Floor 0.50 % ‑ 2.25
−Removed: Fixed 10.00 % ‑ 12.00
+Added: L+ 3.50 % to 6.75
+Added: L Floor 0.25 % to 2.25
+Added: Fixed 4.23 % to 10.00
+Added: L+ 4.00 % to 6.00
+Added: L Floor 0.15 % to 1.66
+Added: L+ 5.00 % to 6.75
+Added: L Floor 1.49 % to 2.63
Student Housing
−Removed: LIBOR + 4.00 % ‑ 5.00
−Removed: Floor 1.23 % ‑ 2.38
−Removed: LIBOR + 3.50 % ‑ 4.95
−Removed: Floor 1.00 % ‑ 2.50
+Added: L+ 4.00 % to 4.50
+Added: L Floor 0.25 % to 1.80
+Added: L+ 3.00 % to 6.75
+Added: L+ 3.50 % to 4.00
+Added: L Floor 1.00 % to 2.50
Total Bridge Loans less than 3% of carrying amount of total loans
Total Bridge Loans
+Added: ARBOR REALTY TRUST, INC.
+Added: AND SUBSIDIARIES
+Added: Schedule IV — Loans and other Lending Investments ( Continued )
+Added: DECEMBER 31, 2021
+Added: ($ in thousands)
Mezzanine Loans:
Mezzanine loans less than 3% of carrying amount of total loans (6):
−Removed: LIBOR + 3.85 % ‑ 4.75
−Removed: Floor 1.00 % ‑ 1.25
−Removed: Fixed 5.00 % ‑ 12.00
+Added: Fixed 3.50 % to 12.95
Total Mezzanine Loans
1 unchanged sentence
Preferred equity investments less than 3% of carrying amount of total loans (6):
−Removed: Fixed 3.00 % ‑ 14.00
+Added: Fixed 2.00 % to 14.00
Student Housing
−Removed: Fixed 8.00 % ‑ 15.00
Total Preferred Equity Investments
1 unchanged sentence
Single‑Family Rental
−Removed: Fixed 4.40 % ‑ 5.90
−Removed: (1) IO = Interest Only, PI = Principal and Interest.
+Added: L + 4.25 % to 4.90
+Added: (1) IO = Interest Only, PI = Principal and Interest, L = LIBOR.
(2) Maturity date does not include possible extensions.
(3) References to LIBOR are to one-month LIBOR unless specifically stated otherwise.
−Removed: (4) During 2020, $ 748.6 million of loans were extended.
+Added: (4) During 2021, $ 1.24 billion of loans were extended.
(5) The federal income tax basis is approximately $ 12.16 billion.
17 unchanged sentences
( 1,243,694 )
+Added: ( 1,753,693 )
+Added: Reclassification to held-for-sale loans
Unfunded loan commitments (1)
7 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.