“Our first quarter results were truly remarkable, allowing us to once again increase our dividend. Our exceptional performance continues to demonstrate the value of our diverse platform, and how uniquely positioned we are for future growth and success,” said Ivan Kaufman, founder, chairman and CEO of Arbor Realty Trust.
Agency Business
Loan Origination Platform
| Agency Loan Volume (in thousands) | ||||||
| Quarter Ended | ||||||
| March 31, 2021 | December 31, 2020 | |||||
| Fannie Mae | $ | 1,063,983 | $ | 2,202,092 | ||
| Freddie Mac | 114,717 | 373,063 | ||||
| FHA | 66,480 | 133,523 | ||||
| Private Label | 152,454 | 44,884 | ||||
| Total Originations | $ | 1,397,634 | $ | 2,753,562 | ||
| Total Loan Sales | $ | 1,841,891 | $ | 2,418,317 | ||
| Total Loan Commitments | $ | 1,460,135 | $ | 2,808,173 | ||
For the quarter ended March 31, 2021, the Agency Business generated revenues (excluding gains and losses on derivative instruments) of $89.3 million, compared to $125.6 million for the fourth quarter of 2020. Gain on sales, including fee-based services, net was $26.2 million for the quarter, reflecting a margin of 1.47% on loan sales (excluding $63.3 million of single-family rental (“SFR”) fixed rate loan sales), compared to $34.0 million and 1.41% for the fourth quarter of 2020. Income from mortgage servicing rights was $36.9 million for the quarter, reflecting a rate of 2.53% as a percentage of loan commitments, compared to $68.8 million and 2.45% for the fourth quarter of 2020.
At March 31, 2021, loans held-for-sale was $613.5 million which was primarily comprised of unpaid principal balances totaling $602.3 million, with financing associated with these loans totaling $538.3 million.
Fee-Based Servicing Portfolio
Our fee-based servicing portfolio totaled $25.46 billion at March 31, 2021, an increase of 3.4% from December 31, 2020, primarily the result of $1.40 billion of new agency loan originations, net of $418.6 million in portfolio runoff during the quarter. Servicing revenue, net was $15.5 million for the quarter and consisted of servicing revenue of $29.7 million, net of amortization of mortgage servicing rights totaling $14.2 million.
| Fee-Based Servicing Portfolio ($ in thousands) | ||||||||||||
| As of March 31, 2021 | As of December 31, 2020 | |||||||||||
| UPB | Wtd. Avg. Fee | Wtd. Avg. Life (in years) | UPB | Wtd. Avg. Fee | Wtd. Avg. Life (in years) | |||||||
| Fannie Mae | $ | 19,073,504 | 0.528% | 8.3 | $ | 18,268,268 | 0.523% | 8.2 | ||||
| Freddie Mac | 4,795,228 | 0.283% | 9.8 | 4,881,080 | 0.279% | 9.9 | ||||||
| FHA | 796,133 | 0.160% | 20.7 | 752,116 | 0.163% | 20.3 | ||||||
| Private Label | 726,918 | 0.200% | 8.7 | 726,992 | 0.200% | 8.7 | ||||||
| SFR-Fixed Rate | 63,299 | 0.200% | 6.1 | – | – | – | ||||||
| Total | $ | 25,455,082 | 0.460% | 9.0 | $ | 24,628,456 | 0.454% | 8.9 | ||||
Loans sold under the Fannie Mae program contain an obligation to partially guarantee the performance of the loan (“loss-sharing obligations”), and includes $34.4 million for the fair value of the guarantee obligation undertaken at March 31, 2021. The Company recorded a $1.1 million provision for loss sharing associated with CECL for the first quarter of 2021. At March 31, 2021, the Company’s total CECL allowance for loss-sharing obligations was $31.5 million, representing 0.16% of the Fannie Mae servicing portfolio.
Structured Business
Portfolio and Investment Activity
- Strong growth in the portfolio of $788.3 million, or 14.4%
- Originated 55 loans totaling $1.09 billion, consisted primarily of multifamily bridge loans totaling $962.4 million
- Payoffs and pay downs on 19 loans totaling $233.0 million
- Committed to fund three SFR build-to-rent loans totaling $98.4 million
- Continued significant income generated by our residential mortgage banking joint venture
The Company recorded pretax income of $22.5 million from its significant joint venture investment in a residential mortgage banking business as a result of the continued historically low interest rate environment.
At March 31, 2021, the loan and investment portfolio’s unpaid principal balance, excluding loan loss reserves, was $6.26 billion, with a weighted average current interest pay rate of 5.06%, compared to $5.48 billion and 5.23% at December 31, 2020. Including certain fees earned and costs associated with the loan and investment portfolio, the weighted average current interest pay rate was 5.64% at March 31, 2021, compared to 5.80% at December 31, 2020.
The average balance of the Company’s loan and investment portfolio during the first quarter of 2021, excluding loan loss reserves, was $5.89 billion with a weighted average yield of 5.72%, compared to $5.09 billion and 6.04% for the fourth quarter of 2020. The decrease in average yield was primarily due to lower accelerated fees on loan payoffs and lower rates on originations when compared to runoff in the first quarter as compared to the fourth quarter of 2020.
During the first quarter of 2021, the Company recorded a $1.02 million reversal of provisions for loan losses associated with CECL. At March 31, 2021, the Company’s total allowance for loan losses was $147.3 million. The Company had seven non-performing loans with a carrying value of $60.3 million, before related loan loss reserves of $6.5 million as of March 31, 2021 and December 31, 2020.
Financing Activity
The Company completed a collateralized securitization vehicle (“CLO XIV”) totaling$785.0 millionof real estate related assets and cash. Investment grade-rated notes totaling$655.5 millionwere issued, and the Company retained subordinate interests in the issuing vehicle of$129.5 million. The facility has a two-and-a-half-year asset replenishment period and an initial weighted average interest rate of 1.33% over LIBOR, excluding fees and transaction costs.
The Company completed the unwind of CLO IX, redeeming$356.2 millionof outstanding notes, which were repaid primarily from the refinancing of the remaining assets primarily within CLO XIV, as well as with cash held by CLO IX, and expensed$1.4 millionof deferred financing fees into loss on extinguishment of debt on the consolidated statements of operations.
The balance of debt that finances the Company’s loan and investment portfolio at March 31, 2021 was $5.62 billion with a weighted average interest rate including fees of 2.90% as compared to $4.92 billion and a rate of 3.03% at December 31, 2020. The average balance of debt that finances the Company’s loan and investment portfolio for the first quarter of 2021 was $5.18 billion, as compared to $4.64 billion for the fourth quarter of 2020. The average cost of borrowings for the first quarter of 2021 was 2.99%, compared to 3.05% for the fourth quarter of 2020.
The Company is subject to various financial covenants and restrictions under the terms of its collateralized securitization vehicles, financing facilities and unsecured debt. The Company believes it was in compliance with all financial covenants and restrictions as of March 31, 2021 and as of the most recent collateralized securitization vehicle determination dates in April 2021.
Capital Markets
The Company issued 7.0 million shares of common stock in a public offering receiving net proceeds of $108.2 million. The proceeds are primarily to be used to make investments and for general corporate purposes.
In April 2021, the Company issued $175.0 million in aggregate principal amount of 5.00% senior unsecured notes in a private placement, generating net proceeds of $172.0 million after deducting offering expenses. The notes are due in 2026 and the proceeds will be used to make investments and for general corporate purposes.
Dividends
The Company announced today that its Board of Directors has declared a quarterly cash dividend of $0.34 per share of common stock for the quarter ended March 31, 2021, representing a 13.3% increase from a year ago. The dividend is payable on June 1, 2021 to common stockholders of record on May 21, 2021. The ex-dividend date is May 20, 2021.
As previously announced, the Board of Directors has declared cash dividends on the Company’s Series A, Series B and Series C cumulative redeemable preferred stock reflecting accrued dividends from March 1, 2021 through May 31, 2021. The dividends are payable on June 1, 2021 to preferred stockholders of record on May 15, 2021. The Company will pay total dividends of $0.515625, $0.484375 and $0.53125 per share on the Series A, Series B and Series C preferred stock, respectively.
Earnings Conference Call
The Company will host a conference call today at 10:00 a.m. Eastern Time. A live webcast and replay of the conference call will be available at http://www.arbor.com in the investor relations section of the Company’s 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) 876-9174 for domestic callers and (785) 424-1669 for international callers. Please use participant passcode ABRQ121 when prompted by the operator.
A telephonic replay of the call will be available until May 14, 2021. The replay dial-in numbers are (800) 839-6910 for domestic callers and (402) 220-6058 for international callers.
About Arbor Realty Trust, Inc.
Arbor Realty Trust, Inc. (NYSE: ABR) is a nationwide real estate investment trust and direct lender, providing loan origination and servicing for multifamily, seniors housing, healthcare and other diverse commercial real estate assets. Headquartered in New York, Arbor manages a multibillion-dollar servicing portfolio, specializing in government-sponsored enterprise products. Arbor is a Fannie Mae DUS® lender and Freddie Mac Optigo Seller/Servicer. Arbor’s product platform also includes CMBS, bridge, mezzanine and preferred equity lending. Rated by Standard and Poor’s and Fitch Ratings, Arbor is committed to building on its reputation for service, quality and customized solutions with an unparalleled dedication to providing our clients excellence over the entire life of a loan.
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, changes in economic conditions generally, and the real estate markets specifically, in particular, due to the uncertainties created by the COVID-19 pandemic, continued ability to source new investments, changes in interest rates and/or credit spreads, and other risks detailed in Arbor’s Annual Report on Form 10-K for the year ended December 31, 2020 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.
1. 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 non-GAAP financial measures and the comparable GAAP financial measure can be found on page 11 of this release.
| Contact: Arbor Realty Trust, Inc. Paul Elenio, Chief Financial Officer 516-506-4422 pelenio@arbor.com | Investors: The Ruth Group Daniel Kontoh-Boateng/James Salierno 646-536-7019/7028 dboateng@theruthgroup.com jsalierno@theruthgroup.com | |
| ARBOR REALTY TRUST, INC. AND SUBSIDIARIES | |||||||||
| Consolidated Statements of Operations – (Unaudited) | |||||||||
| ($ in thousands—except share and per share data) | |||||||||
| Quarter Ended March 31, | |||||||||
| 2021 | 2020 | ||||||||
| Interest income | $ | 91,144 | $ | 88,526 | |||||
| Interest expense | 42,184 | 49,982 | |||||||
| Net interest income | 48,960 | 38,544 | |||||||
| Other revenue: | |||||||||
| Gain on sales, including fee-based services, net | 28,867 | 14,305 | |||||||
| Mortgage servicing rights | 36,936 | 21,934 | |||||||
| Servicing revenue, net | 15,536 | 13,302 | |||||||
| Property operating income | – | 2,192 | |||||||
| Loss on derivative instruments, net | (3,220 | ) | (50,731 | ) | |||||
| Other income, net | 681 | 1,303 | |||||||
| Total other revenue | 78,800 | 2,305 | |||||||
| Other expenses: | |||||||||
| Employee compensation and benefits | 42,974 | 34,252 | |||||||
| Selling and administrative | 10,818 | 11,052 | |||||||
| Property operating expenses | 143 | 2,443 | |||||||
| Depreciation and amortization | 1,755 | 1,947 | |||||||
| Provision for loss sharing (net of recoveries) | 1,652 | 21,537 | |||||||
| Provision for credit losses (net of recoveries) | (1,075 | ) | 54,382 | ||||||
| Total other expenses | 56,267 | 125,613 | |||||||
| Income (loss) before extinguishment of debt, sale of real estate, income from equity affiliates, and income taxes | |||||||||
| 71,493 | (84,764 | ) | |||||||
| Loss on extinguishment of debt | (1,370 | ) | (1,954 | ) | |||||
| Gain on sale of real estate | 1,228 | – | |||||||
| Income from equity affiliates | 22,251 | 3,992 | |||||||
| (Provision for) benefit from income taxes | (12,492 | ) | 14,370 | ||||||
| Net income (loss) | 81,110 | (68,356 | ) | ||||||
| Preferred stock dividends | 1,888 | 1,888 | |||||||
| Net income (loss) attributable to noncontrolling interest | 9,743 | (10,934 | ) | ||||||
| Net income (loss) attributable to common stockholders | $ | 69,479 | $ | (59,310 | ) | ||||
| Basic earnings (loss) per common share | $ | 0.55 | $ | (0.54 | ) | ||||
| Diluted earnings (loss) per common share | $ | 0.55 | $ | (0.54 | ) | ||||
| Weighted average shares outstanding: | |||||||||
| Basic | 125,235,405 | 110,792,412 | |||||||
| Diluted | 143,958,433 | 131,217,199 | |||||||
| Dividends declared per common share | $ | 0.33 | $ | 0.30 | |||||
| ARBOR REALTY TRUST, INC. AND SUBSIDIARIES | |||||||
| Consolidated Balance Sheets | |||||||
| ($ in thousands—except share and per share data) | |||||||
| March 31, | December 31, | ||||||
| 2021 | 2020 | ||||||
| (Unaudited) | |||||||
| Assets: | |||||||
| Cash and cash equivalents | $ | 260,228 | $ | 339,528 | |||
| Restricted cash | 272,039 | 197,470 | |||||
| Loans and investments, net (allowance for credit losses of $147,300 and $148,329, respectively) | 6,070,337 | 5,285,868 | |||||
| Loans held-for-sale, net | 613,542 | 986,919 | |||||
| Capitalized mortgage servicing rights, net | 406,980 | 379,974 | |||||
| Securities held-to-maturity, net (allowance for credit losses of $1,597 and $1,644, respectively) | 92,860 | 95,524 | |||||
| Investments in equity affiliates | 104,406 | 74,274 | |||||
| Real estate owned, net | 1,447 | 1,485 | |||||
| Due from related party | 19,705 | 12,449 | |||||
| Goodwill and other intangible assets | 104,278 | 105,451 | |||||
| Other assets | 185,037 | 182,044 | |||||
| Total assets | $ | 8,130,859 | $ | 7,660,986 | |||
| Liabilities and Equity: | |||||||
| Credit facilities and repurchase agreements | $ | 2,214,896 | $ | 2,234,883 | |||
| Collateralized loan obligations | 2,813,660 | 2,517,309 | |||||
| Senior unsecured notes | 663,395 | 662,843 | |||||
| Convertible senior unsecured notes, net | 269,452 | 267,973 | |||||
| Junior subordinated notes to subsidiary trust issuing preferred securities | 141,839 | 141,656 | |||||
| Due to related party | 1,579 | 2,365 | |||||
| Due to borrowers | 80,082 | 89,325 | |||||
| Allowance for loss-sharing obligations | 65,893 | 64,303 | |||||
| Other liabilities | 209,371 | 197,644 | |||||
| Total liabilities | 6,460,167 | 6,178,301 | |||||
| Equity: | |||||||
| Arbor Realty Trust, Inc. stockholders’ equity: | |||||||
| Preferred stock, cumulative, redeemable, $0.01 par value: 100,000,000 shares authorized; | |||||||
| special voting preferred shares; 17,560,633 shares issued and outstanding; 8.25% | |||||||
| Series A, $38,788 aggregate liquidation preference; 1,551,500 shares issued and | |||||||
| outstanding; 7.75% Series B, $31,500 aggregate liquidation preference; 1,260,000 | |||||||
| shares issued and outstanding; 8.50% Series C, $22,500 aggregate liquidation | |||||||
| preference; 900,000 shares issued and outstanding | 89,472 | 89,472 | |||||
| Common stock, $0.01 par value: 500,000,000 shares authorized; 133,690,060 | |||||||
| and 123,181,173 shares issued and outstanding, respectively | 1,337 | 1,232 | |||||
| Additional paid-in capital | 1,473,120 | 1,317,109 | |||||
| Accumulated deficit | (35,498 | ) | (63,442 | ) | |||
| Total Arbor Realty Trust, Inc. stockholders’ equity | 1,528,431 | 1,344,371 | |||||
| Noncontrolling interest | 142,261 | 138,314 | |||||
| Total equity | 1,670,692 | 1,482,685 | |||||
| Total liabilities and equity | $ | 8,130,859 | $ | 7,660,986 | |||
| ARBOR REALTY TRUST, INC. AND SUBSIDIARIES | ||||||||||||||||
| Statement of Income Segment Information – (Unaudited) | ||||||||||||||||
| (in thousands) | ||||||||||||||||
| Quarter Ended March 31, 2021 | ||||||||||||||||
| Structured Business | Agency Business | Other / Eliminations (1) | Consolidated | |||||||||||||
| Interest income | $ | 83,210 | $ | 7,934 | $ | – | $ | 91,144 | ||||||||
| Interest expense | 38,224 | 3,960 | – | 42,184 | ||||||||||||
| Net interest income | 44,986 | 3,974 | – | 48,960 | ||||||||||||
| Other revenue: | ||||||||||||||||
| Gain on sales, including fee-based services, net | – | 28,867 | – | 28,867 | ||||||||||||
| Mortgage servicing rights | – | 36,936 | – | 36,936 | ||||||||||||
| Servicing revenue | – | 29,740 | – | 29,740 | ||||||||||||
| Amortization of MSRs | – | (14,204 | ) | – | (14,204 | ) | ||||||||||
| Loss on derivative instruments, net | – | (3,220 | ) | – | (3,220 | ) | ||||||||||
| Other income, net | 681 | – | – | 681 | ||||||||||||
| Total other revenue | 681 | 78,119 | – | 78,800 | ||||||||||||
| Other expenses: | ||||||||||||||||
| Employee compensation and benefits | 11,577 | 31,397 | – | 42,974 | ||||||||||||
| Selling and administrative | 4,513 | 6,305 | – | 10,818 | ||||||||||||
| Property operating expenses | 143 | – | – | 143 | ||||||||||||
| Depreciation and amortization | 582 | 1,173 | – | 1,755 | ||||||||||||
| Provision for loss sharing (net of recoveries) | – | 1,652 | – | 1,652 | ||||||||||||
| Provision for credit losses (net of recoveries) | (1,029 | ) | (46 | ) | – | (1,075 | ) | |||||||||
| Total other expenses | 15,786 | 40,481 | – | 56,267 | ||||||||||||
| Income before extinguishment of debt, sale of real estate, income from equity affiliates, and income taxes | ||||||||||||||||
| 29,881 | 41,612 | – | 71,493 | |||||||||||||
| Loss on extinguishment of debt | (1,370 | ) | – | – | (1,370 | ) | ||||||||||
| Gain on sale of real estate | – | 1,228 | – | 1,228 | ||||||||||||
| Income from equity affiliates | 22,251 | – | – | 22,251 | ||||||||||||
| Provision for income taxes | (4,983 | ) | (7,509 | ) | – | (12,492 | ) | |||||||||
| Net income | 45,779 | 35,331 | – | 81,110 | ||||||||||||
| Preferred stock dividends | 1,888 | – | – | 1,888 | ||||||||||||
| Net income attributable to noncontrolling interest | – | – | 9,743 | 9,743 | ||||||||||||
| Net income attributable to common stockholders | $ | 43,891 | $ | 35,331 | $ | (9,743 | ) | $ | 69,479 | |||||||
| (1) Includes certain income or expenses not allocated to the two reportable segments. Amount reflects income attributable to the noncontrolling interest holders. | ||||||||||||||||
| ARBOR REALTY TRUST, INC. AND SUBSIDIARIES | ||||||||
| Balance Sheet Segment Information – (Unaudited) | ||||||||
| (in thousands) | ||||||||
| March 31, 2021 | ||||||||
| Structured Business | Agency Business | Consolidated | ||||||
| Assets: | ||||||||
| Cash and cash equivalents | $ | 66,981 | $ | 193,247 | $ | 260,228 | ||
| Restricted cash | 259,830 | 12,209 | 272,039 | |||||
| Loans and investments, net | 6,070,337 | – | 6,070,337 | |||||
| Loans held-for-sale, net | – | 613,542 | 613,542 | |||||
| Capitalized mortgage servicing rights, net | – | 406,980 | 406,980 | |||||
| Securities held-to-maturity, net | – | 92,860 | 92,860 | |||||
| Investments in equity affiliates | 104,406 | – | 104,406 | |||||
| Goodwill and other intangible assets | 12,500 | 91,778 | 104,278 | |||||
| Other assets | 140,187 | 66,002 | 206,189 | |||||
| Total assets | $ | 6,654,241 | $ | 1,476,618 | $ | 8,130,859 | ||
| Liabilities: | ||||||||
| Debt obligations | $ | 5,564,919 | $ | 538,323 | $ | 6,103,242 | ||
| Allowance for loss-sharing obligations | – | 65,893 | 65,893 | |||||
| Other liabilities | 184,476 | 106,556 | 291,032 | |||||
| Total liabilities | $ | 5,749,395 | $ | 710,772 | $ | 6,460,167 | ||
| ARBOR REALTY TRUST, INC. AND SUBSIDIARIES | |||||||
| Reconciliation of Distributable Earnings to GAAP Net Income (Loss) – (Unaudited) | |||||||
| ($ in thousands—except share and per share data) | |||||||
| Quarter Ended March 31, | |||||||
| 2021 | 2020 | ||||||
| Net income (loss) attributable to common stockholders | $ | 69,479 | $ | (59,310 | ) | ||
| Adjustments: | |||||||
| Net income (loss) attributable to noncontrolling interest | 9,743 | (10,934 | ) | ||||
| Income from mortgage servicing rights | (36,936 | ) | (21,934 | ) | |||
| Deferred tax provision (benefit) | 4,486 | (19,904 | ) | ||||
| Amortization and write-offs of MSRs | 18,032 | 17,741 | |||||
| Depreciation and amortization | 2,700 | 2,958 | |||||
| Loss on extinguishment of debt | 1,370 | 1,954 | |||||
| Provision for credit losses, net | (277 | ) | 75,680 | ||||
| Loss on derivative instruments, net | 3,220 | 50,731 | |||||
| Stock-based compensation | 3,330 | 3,517 | |||||
| Distributable earnings (1) | $ | 75,147 | $ | 40,499 | |||
| Diluted distributable earnings per share (1) | $ | 0.52 | $ | 0.31 | |||
| Diluted weighted average shares outstanding (1) | 143,958,433 | 131,217,199 | |||||
| (1) Amounts are attributable to common stockholders and OP Unit holders. The OP Units are redeemable for cash, or at the Company’s option for shares of the Company’s common stock on a one-for-one basis. | |||||||
| The Company is presenting distributable earnings because management believes it is an important supplemental measure of the Company’s operating performance and is useful to investors, analysts and other parties in the evaluation of REITs and their ability to provide dividends to stockholders. Dividends are one of the principal reasons investors invest in REITs. To maintain REIT status, REITs are required to distribute at least 90% of their REIT-taxable income. The Company considers distributable earnings in determining its quarterly dividend and believes that, over time, distributable earnings is a useful indicator of the Company’s dividends per share. | |||||||
| The Company defines distributable earnings as net income (loss) attributable to common stockholders computed in accordance with GAAP, adjusted for accounting items such as depreciation and amortization (adjusted for unconsolidated joint ventures), non-cash stock-based compensation expense, income from MSRs, amortization and write-offs of MSRs, gains/losses on derivative instruments primarily associated with Private Label loans not yet sold and securitized, the tax impact on cumulative gains/losses on derivative instruments associated with Private Label loans sold during the periods presented, changes in fair value of GSE-related derivatives that temporarily flow through earnings, deferred tax (benefit) provision, CECL provisions for credit losses (adjusted for realized losses as described below) and amortization of the convertible senior notes conversion option. The Company also adds back one-time charges such as acquisition costs and one-time gains/losses on the early extinguishment of debt. | |||||||
| The Company reduces distributable earnings for realized losses in the period management determines that a loan is deemed nonrecoverable. Loans are deemed nonrecoverable upon the earlier of: (i) when the loan receivable is settled (i.e. when the loan is repaid, or in the case of foreclosure, when the underlying asset is sold); or (ii) when management determines that it is nearly certain that all amounts due will not be collected. The realized loss amount is equal to the difference between the cash received, or expected to be received, and the book value of the asset. | |||||||
| Distributable earnings is not intended to be an indication of the Company’s cash flows from operating activities (determined in accordance with GAAP) or a measure of its liquidity, nor is it entirely indicative of funding the Company’s cash needs, including its ability to make cash distributions. The Company’s calculation of distributable earnings may be different from the calculations used by other companies and, therefore, comparability may be limited. | |||||||
