Arbor Realty Trust

Good morning, ladies and gentlemen, and welcome to the first quarter 2022 Arbor Realty Trust earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this period, you will need to press star 1 on your telephone. If you want to remove yourself from the queue, please press the pound key. Please be advised that today's conference is being recorded. If you should need operator assistance, please press star zero. I would now like to turn the call over to your speaker today, Paul Elenio, Chief Financial Officer. Please go ahead.

Okay, thank you, Leo. Good morning, everyone, and welcome to the quarterly earnings call for Arbor Realty Trust. This morning, we'll discuss the results for the quarter ended March 31st, 2022. With me on the call today is Ivan Kaufman, our President and Chief Executive Officer. Before we begin, I need to inform you that statements made in this earnings call may be deemed forward-looking statements that are subject to risk and uncertainties, including information about possible assumed future results of our business, financial condition, liquidity, results of operations, plans, and objectives. These statements are based on our beliefs, assumptions, and our expectations of our future performance, taking into account the information currently available to us. Factors that could cause actual results to differ materially from our risk expectations in these forward-looking statements are detailed in our SEC reports. Listeners are cautioned not to place undue reliance on these forward-looking statements which speak only as of today. Arbor undertakes no obligation to publicly update or revise these forward-looking statements to reflect events or circumstances after today or the occurrences of unanticipated events. I'll now turn the call over to Arbor's President and CEO, Ivan Kaufman.

Thank you, Paul, and thanks to everyone for joining us on today's call. As you can see from this morning's press release, we had another tremendous quarter, which continues to demonstrate our unique ability to consistently deliver outsized returns through our diverse operating platform. As a result, we're able to once again increase our dividend to $0.38 a share. And this eighth consecutive quarterly dividend increase representing 27% growth over that same time period. We believe it's now more important than ever to continue to stress the many advantages of our unique business model, especially in light of the changing landscape of higher interest rates, continued inflation, and the potential for another recessionary cycle on the horizon. We built a premium operating platform that is focused on the right asset classes with a very stable liability structures. We have a thriving balance sheet, GSE agency, private label, and single-family rental business, as well as an industry-leading securitization platform that has allowed us to produce a long track record of exceptional performance, consistent earnings, and dividends growth. and we can't emphasize enough the value of having an annuity-based business model with multiple products that produce many diverse income streams. This has allowed us to consistently grow our earnings and dividends in all cycles while maintaining the lowest dividend ratio payout in the industry, creating a substantial cushion between our core earnings and dividends. There are significant differentiating factors from the rest of our peer group most of which have a monoline business, have struggled to maintain their dividends, and have very little upside for future dividend growth, especially considering an unanticipated, an anticipated recessionary environment. And this is why we strongly believe that we're in a class by ourselves and we should trade at a substantial premium and a much lower dividend yield than anyone else in our peer group. Turning now to our first quarter performance, As Paul will discuss in more detail, our quarterly financial results were once again remarkable. We produced distributable earnings of $0.55 per share, which is well in excess of our current dividend, representing a payout ratio of around 70%. In our balance sheet business, we had another outstanding quarter. As one of the top multifamily balance sheet lenders in the industry, we continue to see opportunities for significant growth As a result, we grew our balance sheet loan book another 17% in the first quarter to $14.2 billion on $2.8 billion of new originations. We also have a very robust pipeline, which gives us great confidence in our ability to continue to meaningfully grow our loan book for the balance of the year. And again, these balance sheet loans create significant value for our platform and as they are not only accretive to our current earnings and dividends, but also allow us to build a pipeline for two to three years of new GSC agency and private label loans that produce additional long-term dated income streams, ensuring the long-term growth of our platform and creating high-quality earnings and dividends for the future. We've consistently been a leader in the CLO securitization market, and as our financing and high-quality balance sheet portfolio with the appropriate liability structures continues to be one of the key business strategies. We were very successful in continuing to access the CLO securitization market in the first quarter, closing another $2 billion CLO. The utilization of these vehicles has contributed greatly to our success by allowing us to appropriately match fund our assets with non-recourse, non-mark-to-market, long-term debt, and generate attractive leverage returns on our capital. And again, we are very focused on the right side of our balance sheet. in the first quarter from the sharp increase in interest rates. However, more importantly, we're seeing a significant uptick in our pipeline as our market is adjusting to the changing rate environment, and we expect to be able to close the gap substantially by the end of the year and produce relatively similar agency volumes as compared to the prior year. In fact, April's origination value went much stronger with $475 million of loan closings. Our GSC agency platform continues to offer premium value as it requires limited capital and generates significant, long-dated, predictable income streams and produces significant annual cash flow. Additionally, our $27 billion GSC agency servicing portfolio, which has grown 6% in the last year, is mostly prepayment protected and generates approximately $120 million a year in reoccurring cash flow. This is in addition to the strong gain on sale margins we continue to generate from our originations platform, which will continue to contribute greatly to our earnings and dividends. And as we mentioned on our last call, we also closed our fourth private label, securitization, totaling $400 million. and $90 million in the first quarter, which continues to demonstrate the strength and diversity of our versatile lending platform and tremendous securitization expertise. We've also built a growing single-family rental platform with a current pipeline well in excess of $1 billion, which makes us optimistic about our ability to continue to scale this business going forward. We're a leader in the build-to-rent space, which provides us with the opportunity to originate construction, bridge, and permanent loans on the same transaction. And again, like our balance sheet business, this platform provides us yet another path to future transactions that will produce additional long-dated income streams. In summary, we had another tremendous quarter, allowing us to once again increase our dividends. We strategically built our platform with multiple products that produce many diverse income streams, which provides us with a future annuity of high-quality, long-dated, reoccurring earnings. We're also the premier multifamily originator in this space, and we are invested in the right asset classes with very stable liability structures, which positions us extremely well It succeeds in every market cycle and gives us great confidence in our ability to continue to significantly outperform our peers. I will now turn the call over to Paul to take you through the financial results.