Arbor Realty Trust Reports Fourth Quarter and Full Year 2013 Results and Declares Common Stock Dividend

Fourth Quarter Highlights:

• Declares a common dividend of $0.13 per share
• FFO of $6.3 million, or $0.13 per diluted common share¹
• Net income attributable to common stockholders of $3.4 million, or $0.07 per diluted common share
• Originated 19 new loans totaling $163.5 million
• Adjusted book value per common share of $9.22, GAAP book value per common share of $7.53¹
• Obtained an additional $33 million of warehouse financing
• Recorded $2.0 million in loan loss reserves and impairments
• Recorded $0.8 million in cash recoveries of previously recorded reserves

Full Year Highlights:

• Declared common dividends of $0.51 per share relating to the full year 2013
• FFO of $25.0 million, or $0.58 per diluted common share¹
• Net income attributable to common stockholders of $16.7 million, or $0.39 per diluted common share
• Raised $197.0 million of capital through three common stock offerings and two preferred stock offerings
• Originated 67 new loans totaling $591.5 million
• Closed a second collateralized loan obligation totaling $260 million
• Improved funding sources by closing three new warehouse facilities totaling $123 million and increasing the capacity of existing facilities by $30 million, with reduced pricing on these existing facilities
• Generated gains of $4.9 million from the retirement of CDO debt
• Recorded $7.5 million in loan loss reserves and impairments
• Recorded $2.2 million in cash recoveries of previously recorded reserves

UNIONDALE, N.Y., Feb. 14, 2014 (GLOBE NEWSWIRE) -- Arbor Realty Trust, Inc. (NYSE:ABR), a real estate investment trust focused on the business of investing in real estate related bridge and mezzanine loans, preferred and direct equity investments, mortgage-related securities and other real estate related assets, today announced financial results for the fourth quarter and year ended December 31, 2013. Arbor reported net income attributable to common stockholders for the quarter of $3.4 million, or $0.07 per diluted common share, compared to a net loss attributable to common stockholders of $0.3 million, or $0.01 per diluted common share for the quarter ended December 31, 2012. Net income attributable to common stockholders for the year ended December 31, 2013 was $16.7 million, or $0.39 per diluted common share, compared to $21.5 million, or $0.79 per diluted common share for the year ended December 31, 2012. Funds from operations ("FFO") for the quarter ended December 31, 2013 was $6.3 million, or $0.13 per diluted common share, compared to $0.9 million, or $0.03 per diluted common share for the quarter ended December 31, 2012. FFO for the year ended December 31, 2013 was $25.0 million, or $0.58 per diluted common share, compared to $23.5 million, or $0.87 per diluted common share for the year ended December 31, 2012.¹

Portfolio Activity

Loan and investment portfolio activity during the fourth quarter of 2013 consisted of:

• Originated 19 new loans totaling $163.5 million, of which 14 new bridge loans comprised $149.6 million.
• Payoffs and pay downs on 22 loans totaling $179.9 million, of which $2.0 million was charged off against loan loss reserves related to one loan.
• Modified and/or extended seven loans totaling $44.3 million.

At December 31, 2013, the loan and investment portfolio's unpaid principal balance, excluding loan loss reserves, was approximately $1.7 billion, with a weighted average current interest pay rate of 5.21%. Including certain fees earned and costs associated with the loan and investment portfolio, the weighted average current interest rate was 5.69% at December 31, 2013.

As of December 31, 2013, Arbor's loan portfolio consisted of 30% fixed-rate and 70% variable-rate loans.

The average balance of the Company's loan and investment portfolio during the fourth quarter of 2013, excluding loan loss reserves, was $1.8 billion and the average yield on these assets for the quarter was 5.86%, compared to $1.8 billion and 5.62% for the third quarter of 2013.

During the fourth quarter of 2013, the Company recorded a $1.0 million loan loss reserve related to a loan with a carrying value of approximately $1.0 million, after loan loss reserves. The Company also recorded $0.8 million of net recoveries of previously recorded loan loss reserves related to four of the Company's assets. In addition, the Company charged off $2.0 million of a previously recorded loan loss reserve related to one loan during the quarter. At December 31, 2013, the Company's total loan loss reserves were approximately $122.3 million relating to 15 loans with an aggregate carrying value before loan loss reserves of approximately $207.5 million. The Company recognizes income on impaired loans on a cash basis to the extent it is received.

The Company had five non-performing loans with a carrying value of approximately $10.7 million, net of related loan loss reserves of $39.6 million as of December 31, 2013. Income recognition on non-performing loans has been suspended and will resume if and when the loans become contractually current and performance has recommenced.

During the fourth quarter of 2013, the Company recorded an impairment loss of $1.0 million on a real estate owned asset with a carrying value before impairment of approximately $4.4 million.

During the fourth quarter of 2013, the Company sold several residential mortgage-backed securities ("RMBS") with an aggregate carrying value of $51.9 million for $52.4 million. The RMBS were accounted for as derivatives net of financings totaling $44.4 million. In addition, RMBS pay downs during the fourth quarter totaled $13.9 million, of which $5.6 million related to RMBS accounted for as derivatives.

During the first quarter of 2014, the Company sold the majority of its RMBS with an aggregate carrying value of $81.2 million for approximately $81.9 million, of which $48.5 million related to RMBS accounted for as derivatives.

Financing Activity

The balance of debt that finances the Company's loan and investment portfolio at December 31, 2013 was approximately $1.2 billion with a weighted average interest rate of 3.34%, as compared to approximately $1.3 billion and a rate of 3.14% at September 30, 2013. The average balance of debt that finances the Company's loan and investment portfolio for the fourth quarter of 2013 was approximately $1.3 billion, as compared to approximately $1.4 billion for the third quarter of 2013. The average cost of borrowings for the fourth quarter was 3.28%, compared to 3.10% for the third quarter of 2013.

In December 2013, the Company closed a $33.0 million warehouse facility with a financial institution to finance a first mortgage loan on a multifamily property. The facility has an interest rate of 225 basis points over LIBOR which increases to 250 basis points over LIBOR in February 2014, requires a total commitment fee of 45 basis points and contains certain financial covenants and restrictions. The facility has a two year term maturing in November 2015, with a one year extension option to 2016. At December 31, 2013, the outstanding balance of this facility was $33.0 million.

The Company is subject to various financial covenants and restrictions under the terms of the Company's CDO/CLO vehicles, credit facilities, and repurchase agreements. The Company believes that it was in compliance with all financial covenants and restrictions as of December 31, 2013.

The Company's CDO/CLO vehicles contain interest coverage and asset over collateralization covenants that must be met as of the waterfall distribution date in order for the Company to receive such payments. If the Company fails these covenants in any of its CDOs or CLOs, all cash flows from the applicable vehicle would be diverted to repay principal and interest on the outstanding bonds and the Company would not receive any residual payments until that vehicle regained compliance with such covenants. As of the most recent determination dates in January 2014, the Company was in compliance with all CDO/CLO covenants. In the event of a breach of the covenants that could not be cured in the near-term, the Company would be required to fund its non CDO/CLO expenses, including management fees and employee costs, distributions required to maintain REIT status, debt costs, and other expenses with (i) cash on hand, (ii) income from any CDO/CLO not in breach of a covenant test, (iii) income from real property and loan assets, (iv) sale of assets, or (v) accessing the equity or debt capital markets, if available.

The chart below is a summary of the Company's CDO/CLO compliance tests as of the most recent determination dates in January 2014:

Common Dividend

The Company announced today that its Board of Directors has declared a quarterly cash dividend of $0.13 per share of common stock for the fourth quarter ended December 31, 2013. The dividend is payable on February 28, 2014 to common shareholders of record on February 25, 2014. The ex-dividend date is February 21, 2014.

Preferred Dividends

As previously announced, the Board of Directors declared a cash dividend of $0.515625 per share of 8.25% Series A cumulative redeemable preferred stock reflecting accrued dividends through February 28, 2014. The dividend is payable on February 28, 2014 to preferred shareholders of record on February 15, 2014.

As previously announced, the Board of Directors also declared a cash dividend of $0.484375 per share of 7.75% Series B cumulative redeemable preferred stock reflecting accrued dividends through February 28, 2014. The dividend is payable on February 28, 2014 to preferred shareholders of record on February 15, 2014.

Earnings Conference Call

Management will host a conference call today at 10:00 a.m. ET. A live webcast of the conference call will be available online at http://www.arborrealtytrust.com/ in the investor relations area of the Website. Those without Web access should access the call telephonically at least ten minutes prior to the conference call. The dial-in numbers are (877) 415-3184 for domestic callers and (857) 244-7327 for international callers. Please use participant passcode 15903527.

After the live webcast, the call will remain available on the Company's Website, www.arborrealtytrust.com, through March 14, 2014. In addition, a telephonic replay of the call will be available until February 21, 2014. The replay dial-in number is (888) 286-8010 for domestic callers and (617) 801-6888 for international callers. Please use passcode 60256320.

About Arbor Realty Trust, Inc.

Arbor Realty Trust, Inc. is a real estate investment trust, which invests in a diversified portfolio of multi-family and commercial real estate related bridge and mezzanine loans, preferred equity investments, mortgage related securities and other real estate related assets. Arbor commenced operations in July 2003 and conducts substantially all of its operations through its operating partnership, Arbor Realty Limited Partnership and its subsidiaries. Arbor is externally managed and advised by Arbor Commercial Mortgage, LLC, a national commercial real estate finance company operating through 14 offices in the US that specializes in debt and equity financing for multi-family and commercial real estate.

Safe Harbor Statement

Certain items in this press release may constitute forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Arbor can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from Arbor's expectations include, but are not limited to, continued ability to source new investments, changes in interest rates and/or credit spreads, changes in the real estate markets, and other risks detailed in Arbor's Annual Report on Form 10-K for the year ended December 31, 2013 and its other reports filed with the SEC. Such forward-looking statements speak only as of the date of this press release. Arbor expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Arbor's expectations with regard thereto or change in events, conditions, or circumstances on which any such statement is based.

Non-GAAP Financial Measures

During the quarterly earnings conference call, the Company may discuss non-GAAP financial measures as defined by SEC Regulation G. In addition, the Company has used non-GAAP financial measures in this press release. A supplemental schedule of each non-GAAP financial measure and the comparable GAAP financial measure can be found on page 10 and 11 of this release.

¹. See attached supplemental schedule of non-GAAP financial measures.

CONTACT: Arbor Realty Trust, Inc.
         Paul Elenio, Chief Financial Officer 
         516-506-4422
         pelenio@arbor.com

         Investors:
         Stephanie Carrington
         The Ruth Group
         646-536-7017
         scarrington@theruthgroup.com

         Media:
         Bonnie Habyan, EVP of Marketing
         516-506-4615
         bhabyan@arbor.com