Arbor Realty Trust · NYSE:ABR
Arbor Realty Trust — Merger or Acquisition (April 2016)
20 slides from Arbor Realty Trust's merger presentation, Apr 7, 2016
Slide 1: Disclaimer
Disclaimer 2 Information in this presentation may be deemed forward-looking that are subject to risks and uncertainties, including information about possible or assumed future results of our business, the manager’s agency business, financial condition, liquidity, results of operations, plans and obj
Slide 2: Overview of the business platforms
Overview of the business platforms 3 Arbor Realty Trust, Inc. Specialized real estate finance company that invests in a diversified portfolio of structured finance assets in the multifamily and commercial real estate markets including bridge and mezzanine loans Primary focus is multifamily, senior l
Slide 3: Agenda
Arbor Realty Trust (ABR) 4 Agenda Arbor Realty Trust (ABR) Announced acquisition – Agency platform Appendix Page 4 11 18
Slide 4: ABR overview
ABR overview 5 Focus predominately on multifamily senior lending which generates superior leveraged returns in the most secure part of the capital stack 88% of investment portfolio in bridge loans, with 75% of bridge loans to multifamily properties¹ Borrowers seeking short-term financing to be used
Slide 5: Our approach to business
Our approach to business 6 Provide customized financing We target borrowers who have demonstrated a history of enhancing the value of the properties they operate, but whose options may be limited by conventional bank financing and who may benefit from the sophisticated structured finance products we
Slide 6: Significant 2015 achievements
Significant 2015 achievements 7 Deleveraged legacy securitization vehicles Substantially reduced debt costs Redeployed proceeds into higher yielding investments Continued focus on new and improved non-recourse financing structures Closed two new CLOs in 2015 with improved terms Currently ~ $800 mill
Slide 7: Investment portfolio overview
Investment portfolio overview 8 Focus predominantly on multifamily senior lending which generates superior leveraged returns in the most secure part of the capital stack 128 loans, average of $12 million per loan 6.32% run-rate yield at December 31, 2015 ~18 months weighted average maturity, without
Slide 8: Capital structure
Trust preferred (TruPS) Capital structure 9 Extensive experience with CRE CLOs Matched duration and locked-in spread Non-recourse, 75% advance rate with long replenishment features 75% of total financing (excluding TruPS) Capital structure ($mm) Notes: Amounts shown as of December 31, 2015 Debt show
Slide 9: Financial performance
Financial performance 10 Income statement summary Note: AFFO excludes the impact of certain non-cash and one time items 1 Based on weighted average diluted common shares of 50.4mm and 51.0mm for 2014 and 2015, respectively (Amounts in 000s except per share amounts) For the year ended December 31, 20
Slide 10: Announced acquisition – Agency platform
Announced acquisition – Agency platform 11 Agenda Arbor Realty Trust (ABR) Announced acquisition – Agency platform Appendix Page 4 11 18
Slide 11: Transaction summary
Transaction summary 12 Target Transaction Value Consideration Structure Required approvals Anticipated closing Agency platform of Arbor Commercial Mortgage, LLC Servicing platform including approximately $11bn in UPB as of January 31, 2016 (47 bps weighted average servicing fee, more than $350 milli
Slide 12: Strategic benefits for ABR shareholders
Strategic benefits for ABR shareholders 13 Immediately accretive to earnings and dividends Significantly increases core earnings on a run-rate basis Diversification and predictability of earnings streams The acquisition of a long dated prepayment protected servicing portfolio will result in a consis
Slide 13: Acquisition of nationwide franchise
14 Acquisition of nationwide franchise Acquired businesses geographic footprint Origination Servicing Servicing portfolio as of 1/31/16 (by state) Total UPB: $11bn 2015 Originations (by state) Total: $3,092mm Englewood Cliffs, NJ New York, NY Cleveland, OH Long Island, NY Detroit, MI Boston, MA Depe
Slide 14: Leading origination platform
15 Total Originations – Acquired Businesses ($mm) Leading origination platform 2015 Originations Note: 1 Includes FNMA DUS and Credit Facility origination volume; 2 By origination volume; Operating since 1995, originated nearly $20 billion since inception $10.4 billion in aggregate originations sinc
Slide 15: Exposure to profitable servicing platform
16 Exposure to profitable servicing platform Investor type Investor type 2,391 total loans; Average loan size of ~$5 million Focus on small balance ($1 - 5 million) 7 years weighted average remaining loan term Prepayment protection in commercial MSR has structural advantages compared to residential
Slide 16: Preliminary financial impact to ABR
Preliminary financial impact to ABR 17 Acquired businesses are less capital intensive and have an attractive return on equity profile Acquired businesses estimated to generate approximately $45-$50 million of GAAP pre-tax income and $30-$35 million pre-tax cash flow in 2016 $50 million annual servic
Slide 17: Appendix
Appendix 18 Agenda Arbor Realty Trust (ABR) Announced acquisition – Agency platform Appendix Page 4 11 18
Slide 18: Historical Income Statement – Arbor Realty Trust
Historical Income Statement – Arbor Realty Trust 19 (Amounts in thousands, except per share amounts) For the year ended December 31, 2013 2014 2015 Revenue: Interest income $99,032 $106,716 $106,769 Other interest income, net – – 7,884 Interest expense 42,065 47,903 49,720 Net interest income $56,96
Slide 19: Historical Balance Sheet – Arbor Realty Trust
Historical Balance Sheet – Arbor Realty Trust 20 (Amounts in thousands, except per share amounts) December 31, 2014 2015 Assets: Cash and cash equivalents $50,418 $188,709 Restricted cash 1 218,101 48,301 Loans and investments, net 2 1,459,476 1,450,334 Available-for-sale securities, at fair value 2
Slide 20: Historical Balance Sheet — Arbor Realty Trust
Historical Balance Sheet — Arbor Realty Trust (Cash and cash equivalents sso. $188,709 Pvalble-forsale securities, tor value 2.500 2022 Investments equ afilates ‘369 wan ea estate hel orale, net uae 8.669 ‘ue rom related party 37 8082 Other assets? 31787 29358 Total assets $1,866,498 $1427392 Labite
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