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Edited Transcript of ABR earnings conference call or presentation 14-Feb-20 3:00pm GMT

·25 min read

Q4 2019 Arbor Realty Trust Inc Earnings Call Uniondale Feb 25, 2020 (Thomson StreetEvents) -- Edited Transcript of Arbor Realty Trust Inc earnings conference call or presentation Friday, February 14, 2020 at 3:00:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Ivan Kaufman Arbor Realty Trust, Inc. - Chairman, President & CEO * Paul Elenio Arbor Realty Trust, Inc. - Executive VP, CFO & Treasurer ================================================================================ Conference Call Participants ================================================================================ * Henry Joseph Coffey Wedbush Securities Inc., Research Division - MD of Equities Research * Ryan John Tomasello Keefe, Bruyette, & Woods, Inc., Research Division - Analyst * Steven Cole Delaney JMP Securities LLC, Research Division - MD, Director of Specialty Finance Research & Senior Research Analyst ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Ladies and gentlemen, thank you for standing by. And welcome to the Fourth Quarter 2019 Arbor Realty Trust Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions) Now it's my pleasure to turn the call over -- the conference over to your Chief Financial Officer, Paul Elenio. Please go ahead. -------------------------------------------------------------------------------- Paul Elenio, Arbor Realty Trust, Inc. - Executive VP, CFO & Treasurer [2] -------------------------------------------------------------------------------- Okay. Thank you, Carmen, and good morning, everyone, and welcome to the quarterly earnings call for Arbor Realty Trust. This morning, we'll discuss the results for the quarter and year ended December 31, 2019. With me on the call today is Ivan Kaufman, our President and Chief Executive Officer. And before we begin, I just want to inform you that Ivan is in transit due to some unforeseen travel issues this morning. His audio sounds clear, but to the extent that we lose him, I'll pick up his prepared remarks, and then we'll get him back. So before we begin, I need to inform you that statements made in the earnings call may be deemed forward-looking statements that are subject to risks and uncertainties, including information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans and objectives. These statements are based on our beliefs, assumptions and expectations of our future performance, taking into account the information currently available to us. Factors that could cause actual results to differ materially from Arbor's 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 occurrence of unanticipated events. I'll now turn the call over to Arbor's President and CEO, Ivan Kaufman. -------------------------------------------------------------------------------- Ivan Kaufman, Arbor Realty Trust, Inc. - Chairman, President & CEO [3] -------------------------------------------------------------------------------- Thank you, Paul, and thanks to everyone for joining us on today's call. We are very excited today to discuss the significant success we had in closing out 2019 as well as our plans and outlook for 2020. As you can see from this morning's press release, we had an outstanding fourth quarter with tremendous operating results, which continues to demonstrate the strength of our brand and the value of our operating franchise. Additionally, the significant growth we had experienced in 2019 has provided us with a very strong baseline of predictable and stable core earnings heading into 2020, making us very confident in our ability to comfortably maintain our dividend as well as growth it in the future. Over the last 5 years, we have delivered annualized shareholder returns of approximately 30%, significantly outperforming our peers in each and every year. And this performance, combined with the quality and diversity of our income streams, along with the consistency of our earnings and low dividend payout ratio, clearly differentiates us, which is why we believe we can consistently trade at a lower dividend yield and a substantial premium to our peer group. Focusing now on our 2019 accomplishments. Some of the more significant highlights include generating substantial growth in our core earnings, allowing us to increase our dividend 3x to an annual rate of $1.20 a share, up from $1.08 per share; delivering a total return of 54% in 2019 and 175% cumulatively for the last 5 years, with an annualized return of approximately 30%; achieving returns on equity of 14.5%, a 35% increase in the last 2 years; producing record originations of $7.6 billion, a 12% increase from our record 2018 numbers; increasing our balance sheet portfolio of 30% in 2019 to $4.3 billion; growing our servicing portfolio to $20 billion, an 8% increase from 2018 and a 48% increase over the last 3 years. We continue to be a market leader in the nonrecourse securitization arena, closing 2 new CLOs totaling $1.3 billion with improved terms and flexibility, achieving significant economies of scale to substantially reduce debt costs in all of our borrowing facilities, allowing us to maintain our margins in a very competitive market, raising $450 million of accretive growth capital to fund our growing pipeline and increase core earnings and increasing our market cap to approximately $2 billion, allowing us to access growth capital more efficiently and effectively. To highlight this incredible success further, I would like to talk about the growth we experienced in our business platforms. In our Agency Business, we grew our servicing portfolio 8% in 2019 and 20% over the last 2 years. This servicing portfolio is now over $20 billion, with a servicing fee of 44 basis points and have an average remaining life of 9 years, which reflects a 10% increase in duration over the last 2 years. As a result, we have created a very significant predictable annuity of income of $88 million gross annually and growing, the majority of which is prepayment protected. And this growth in our servicing portfolio also continues to increase our annuity of income from our escrow balances, which is currently earning $16 million annually for a combined annual run rate of servicing income and escrow earnings of $104 million, which represents approximately 40% of our total annual revenues. We also produced significant origination volumes, closing $1.3 billion in Agency loans in the fourth quarter and $4.8 billion for the year, with strong margin and very competitive market. And with our diverse origination platform and strong footprint in the multifamily affordable housing market, we are confident we'll be able to increase our origination volumes in 2020. In addition, as we talked about on our last call, we were active with our new Arbor Private Label product, which we launched as a result of the disruption in the agencies during the third quarter of last year. We closed $400 million of this product in 2019 and expect to close an additional $200 million to $300 million in the next few months and issue for our securitization of around $600 million to $700 million in the second quarter of this year. We are pleased with our progress to date and believe this product further diversifies our lending platform and will also act as a mitigant against further potential changes and disruptions with the agencies. With respect to our balance sheet business, we've experienced tremendous growth in our loan book. We grew this portfolio 24% in 2018 and another 30% in 2019 on $2.8 billion in originations. Our balance sheet portfolio is now at $4.3 billion, and the significant growth we experienced will continue to increase our run rate of net interest income going forward. It is also significant... (technical difficulty) multifamily assets, which is the... -------------------------------------------------------------------------------- Paul Elenio, Arbor Realty Trust, Inc. - Executive VP, CFO & Treasurer [4] -------------------------------------------------------------------------------- And we also have a very robust pipeline, which we believe will allow us to meaningfully grow our loan book in 2020 and significantly increase our presence. -------------------------------------------------------------------------------- Ivan Kaufman, Arbor Realty Trust, Inc. - Chairman, President & CEO [5] -------------------------------------------------------------------------------- In our single-family rental business, we continue to make progress in developing our platform. We have closed approximately $115 million of SFR products to date, and we are pleased with the opportunities we are seeing to meaningfully grow this business in the future, and our pipeline continues to grow significantly. We believe this business provides enormous opportunities in both the bridge and permanent lending products, and we are confident that we will build this out to a significant driver of yet another income stream and further diversify our lending platform. We also continued our tremendous success throughout our securitization expertise and our strong banking relationships and substantially reduced our debt costs, which has allowed us to achieve significant economies of scale and maintain our margins in a very competitive market. In the fourth quarter, we closed our 12th nonrecourse CLO with $635 million of assets and significantly improved terms, including reduced pricing, increased leverage and a 3-year replenishment feature. We were also very successful in the fourth quarter in exchanging our 5.25% convertible debt with a new 3-year convertible debt issuance with a fixed rate of 4.75%. This transaction have many significant benefits, including reducing our interest costs, resetting both our conversion price and dividend protection on the new bonds and much higher levels of generating up to $30 million of additional capital to fund the growth in our business. Overall, we are extremely pleased with our 2019 results and the tremendous success we continue to have in growing our operating platform and greatly enhancing the value of our franchise. Our results have been truly remarkable and have consistently outperformed our peers. We have created a strong baseline of a diversified, predictable core earnings heading into 2020, and we're also very excited about the future growth opportunities across our business lines. It is also important to note that we have made a strategic decision to increase our cash position, which currently is approximately $500 million in cash and liquidity on hand for operations. We believe at this point in the cycle, it is very prudent to have sufficient amount of cash available that will put us in a very offensive position as we transition into a different part of the cycle. And even with these high cash balances, we've been able to consistently grow our earnings and dividends and remain very confident in our ability to continue to grow our dividend in the future. I will now turn the call over to Paul to take you through the financial results. -------------------------------------------------------------------------------- Paul Elenio, Arbor Realty Trust, Inc. - Executive VP, CFO & Treasurer [6] -------------------------------------------------------------------------------- Okay. Thank you, Ivan. As the press release this morning indicated, we had a very strong fourth quarter and full year 2019. As a result, AFFO was $42.1 million or $0.34 per share for the fourth quarter, excluding a onetime loss in the early exchange of our convertible debt securities of $7.3 million and $6.1 million in unrealized gains on hedges related to our Private Label business. We have excluded the hedging gains related to our Private Label business from AFFO since these loans have not yet been securitized or sold and the earnings process is not yet complete. We intend to adjust AFFO in the future for any hedging gains or losses associated with these loans in the quarter in which the loans are sold to properly reflect the true economics of these transactions. We also generated ROEs of approximately 14.5% in 2019, representing a significant increase over the last 2 years, which continues to demonstrate the earnings power of our capital-light Agency Business as well as the significant growth in cost efficiencies we're experiencing as we continue to scale our balance sheet business. As Ivan mentioned, we're very pleased with our ability to continue to generate core earnings in excess of our current dividend, and we remain confident in our ability to comfortably maintain our current dividend as well as grow it in the future. Looking at the results from our Agency business, we generated $37 million of pretax income in the fourth quarter on approximately $1.3 billion in originations and $900 million in loan sales. The margin on the fourth quarter sales was 1.55%, including miscellaneous fees, up from 1.43% all-in margin on our third quarter sales. We also recorded $28 million of mortgage servicing rights income related to $1.2 billion of committed loans during the quarter, representing an average MSR rate of around 2.32% compared to 2.02% rate for the third quarter, mostly due to a change in the mix of our fourth quarter loan production. Our servicing portfolio also grew another 8% in 2019 to $20 billion at December 31, with a weighted average fee of approximately 43.8 basis points and an estimated remaining life of 8.8 years. This portfolio will continue to generate a predictable annuity of income going forward of around $88 million gross annually, which is up approximately $4 million on an annual basis from the same time last year. Additionally, early runoff in our servicing book continues to produce prepayment fees related to certain loans that have yield maintenance provisions. This accounted for $4.7 million in prepayment fees in the fourth quarter compared to $5.3 million in the third quarter. In our balance sheet lending operation, we grew our portfolio of 30% to $4.3 billion on $2.8 billion in originations in 2019. The significant growth continues to increase our core earnings run rate, and based on our current pipeline and deep origination network, we remain extremely confident in our ability to continue to grow our balance sheet investment portfolio in the future. Our $4.3 billion investment portfolio had an all-in yield of 6.68% at December 31 compared to 7.04% at September 30, mainly due to higher rates on runoff as compared to new originations during the quarter and from a reduction in LIBOR, which was partially offset by LIBOR floors in a portion of our portfolio. The average balance in our core investments was relatively flat at approximately $4 billion for both the third and fourth quarters despite our fourth quarter growth, mainly due to the timing of originations and runoff in the fourth quarter, which tended to be later. And the average yield on these investments was 7.18% for the fourth quarter compared to 7.31% for the third quarter, mainly due to higher interest rates on runoff as compared to originations and from a reduction in LIBOR, which was partially offset by more acceleration of fees from early runoff in the fourth quarter. Total debt on our core assets was approximately $3.9 billion at December 31 with an all-in debt cost of approximately 4.35% compared to a debt cost of 4.65% at September 30, mainly due to a reduction in LIBOR and from reduced borrowing cost on our new CLO in the fourth quarter. The average balance on our debt facilities was up to approximately $3.76 billion for the fourth quarter from $3.52 billion for the third quarter, mostly due to senior unsecured notes that we issued in the fourth quarter, and the average cost of funds in our debt facilities decreased to approximately 4.60% for the fourth quarter compared to 4.87% for the third quarter due to a reduction in LIBOR and from lower borrowing costs associated with our new CLO, which was partially offset by $1.4 million of noncash fees that were accelerated from the early unwind of CLO VII in the fourth quarter. Overall, net interest spreads in our core assets increased to 2.58% this quarter compared to 2.44% last quarter, mainly due to the positive effect of LIBOR floors on a portion of our balance sheet portfolio and from reduced borrowing costs from our recent CLO execution. And our spot net interest spread was down slightly to 2.33% at December 31 from 2.39% at September 30, mainly due to higher interest rates on runoff as compared to originations, partially offset by the positive effect of LIBOR floors on a portion of our balance sheet portfolio and from reduced borrowing costs in CLO XII. And lastly, the average leverage ratios on our core lending assets, including the trust preferreds and perpetual preferred stock as equity, was up to 83% in the fourth quarter from 80% in the third quarter due to our new unsecured debt issuance and increased leverage on CLO XII, and our overall debt-to-equity ratio on a spot basis was flat at 2.5:1 at both December 31 and September 30. That completes our prepared remarks for this morning. I'll now turn it back to the operator to take any questions. Carmen? ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) And our first question comes from Steve Delaney with JMP Securities. -------------------------------------------------------------------------------- Steven Cole Delaney, JMP Securities LLC, Research Division - MD, Director of Specialty Finance Research & Senior Research Analyst [2] -------------------------------------------------------------------------------- So Ivan, good to have you with us. Do you -- can you share with us what your 2019 rankings were with Fannie and Freddie? -------------------------------------------------------------------------------- Ivan Kaufman, Arbor Realty Trust, Inc. - Chairman, President & CEO [3] -------------------------------------------------------------------------------- I think we were, once again, for the 13th year in a row a top Fannie Mae lender. I think our ranking came in at 9. We were the #1 small balance lender for Fannie Mae. And for Freddie Mac, I think we were the #3 small balance lender for the Freddie Mac small balance program. -------------------------------------------------------------------------------- Paul Elenio, Arbor Realty Trust, Inc. - Executive VP, CFO & Treasurer [4] -------------------------------------------------------------------------------- That's correct. -------------------------------------------------------------------------------- Steven Cole Delaney, JMP Securities LLC, Research Division - MD, Director of Specialty Finance Research & Senior Research Analyst [5] -------------------------------------------------------------------------------- Okay. And then the new caps, everybody kind of focuses on the $20 billion a quarter. But you can only do $20 billion a quarter if 37.5% of that is affordable. And can you comment on that affordable segment and the size of that? And how the profile of your customer base versus maybe some other larger lenders might fit in and the prospects that your market share with the GSEs because of that 37.5% might have a tailwind and might go up in 2020? -------------------------------------------------------------------------------- Ivan Kaufman, Arbor Realty Trust, Inc. - Chairman, President & CEO [6] -------------------------------------------------------------------------------- Well, we do have one of the largest percentages of the affordable in meeting the housing goals for the FHFA. So we're viewed very favorably. And we don't have to scramble like other lenders do in that part. On the other hand, we don't know what's going to happen in the third and fourth quarter if they're not meeting their 37%, but we're being viewed very favorably and being treated very well. -------------------------------------------------------------------------------- Steven Cole Delaney, JMP Securities LLC, Research Division - MD, Director of Specialty Finance Research & Senior Research Analyst [7] -------------------------------------------------------------------------------- Okay. And you commented on the Private Label that you hope to do a securitization in the second quarter. Your $400 million at the end of the year, what is sort of that target size to do with securitization? -------------------------------------------------------------------------------- Ivan Kaufman, Arbor Realty Trust, Inc. - Chairman, President & CEO [8] -------------------------------------------------------------------------------- Well, our minimum target size was $350 million, that was a minimum target. And because the transaction costs get spread out over the volume, so getting to $700 million is a significant achievement for us above what we projected forward. We've got transaction costs being more efficient. -------------------------------------------------------------------------------- Steven Cole Delaney, JMP Securities LLC, Research Division - MD, Director of Specialty Finance Research & Senior Research Analyst [9] -------------------------------------------------------------------------------- Great. And that kind of the cost kind of ties into my last question on that. Can you give us a sense that the execution on that and the leverage, how you think the return on your equity in that Private Label CMBS might compare with the returns you're seeing today on your Structured Business? -------------------------------------------------------------------------------- Ivan Kaufman, Arbor Realty Trust, Inc. - Chairman, President & CEO [10] -------------------------------------------------------------------------------- While I can't front-run the market, we're not permitted to do that. But everybody on this call can understand that credit spreads have tightened significantly since we started the origination process. So we're very optimistic that we have very efficient execution and we're being viewed very, very favorably in the market for having a multifamily element of securitization. And the risk retention part by maintaining our own B-piece is what we're uniquely qualified to do based on our capital structure. It could be looked at very -- from our investors. So our fingers crossed, we're feeling very optimistic and comfortable, and it could set this platform off to really surge well ahead of most of the other platforms in the market. -------------------------------------------------------------------------------- Steven Cole Delaney, JMP Securities LLC, Research Division - MD, Director of Specialty Finance Research & Senior Research Analyst [11] -------------------------------------------------------------------------------- And long duration cash flows as well. -------------------------------------------------------------------------------- Operator [12] -------------------------------------------------------------------------------- (Operator Instructions) And our next question is from Jade Rahmani with KBW. -------------------------------------------------------------------------------- Ryan John Tomasello, Keefe, Bruyette, & Woods, Inc., Research Division - Analyst [13] -------------------------------------------------------------------------------- This is Ryan Tomasello on for Jade. Just considering the potential tailwind that Ivan was just talking about on the -- given the affordability component on the GSE side and coupled with the ramping of the SFR business, on the Structured side, can you give us a sense of what you're targeting for originations in 2020 in both of those business maybe on a nominal or just kind of growth rate basis? -------------------------------------------------------------------------------- Ivan Kaufman, Arbor Realty Trust, Inc. - Chairman, President & CEO [14] -------------------------------------------------------------------------------- So let me give you an overall on our outlook on the Agency Business. And it's kind of consistent with my comments last year. What we decided last year was to give flat guidance to our prior originations and pretty similar to agency's future. And it's not so much that we can't originate more, but we've chosen to maintain our margins and not credit. So we didn't grow our Agency Business as big as some of the other lenders did, but that was by choice and design. So our guidance could be maybe slightly higher than we did last year on the Agency side. With respect to the SFR business, we are so excited about the opportunities there. It's an enormous market. We are assembling and have assembled quite a staff. It's taking time and expense. And while it didn't contribute economically in the last year in probably a drain, we're expecting a positive contribution. We're closing about $115 million. That space is divided into 3 components as we see it. Single-family rental to build, which we feel will be the dominant lender in. And we're very active in that. We're creating the product in that space. We have a huge pipeline. Then we have the single-family bridge to securitization of the middle market, which is generally people who are buying anywhere between 25 to 250 units, which we've developed a nice loan. We expect that to grow to somewhere between $20 million a month in originations. We are currently operating about $10 million in originations per month. And most significantly, we're working now to figure out the biggest part of the market and we're assembling the teams to do that as well. We even originate one-off single-family rental loans, which is 80% in the market. So that business, we've invested an enormous amount of time. As a management team, we have a great history in building platforms with manufacturing capability. So we're extremely excited about it, and we think that's really where a tremendous amount of growth in the business will come in the future. -------------------------------------------------------------------------------- Ryan John Tomasello, Keefe, Bruyette, & Woods, Inc., Research Division - Analyst [15] -------------------------------------------------------------------------------- That's very helpful color, Ivan. And I guess just following up on the SFR business, how long do you expect that ramping period to take, just given, I'm assuming, the hiring that's necessary in just building out the infrastructure? And maybe you can give us a sense or remind us of how the returns might vary across those 3 different buckets that you laid out and how that compares to kind of the typical traditional Agency and Structured transitional products you originate today? -------------------------------------------------------------------------------- Ivan Kaufman, Arbor Realty Trust, Inc. - Chairman, President & CEO [16] -------------------------------------------------------------------------------- Yes, Jade (sic) [Ryan], I think it's a little premature to have that kind of a detailed discussion. But like any entry in quarters is the margins are generally bigger. And as you enter a business on a competitive basis, you gain a franchise value. So I think as we go quarter-to-quarter, we'll talk more about the growth in that business as it's evolving and we're getting a footprint in it. So I think it would be a little premature, but we are pleased with the margins we're getting and our relationship with the developing and the potential opportunities. -------------------------------------------------------------------------------- Ryan John Tomasello, Keefe, Bruyette, & Woods, Inc., Research Division - Analyst [17] -------------------------------------------------------------------------------- And one last one, Ivan, just regarding the environment for multifamily overall. What are you seeing in terms of the fundamentals in underwriting? Are you seeing any signs of deteriorating credit performance across the market? And what do you really see as the biggest risks for multifamily going into 2020? -------------------------------------------------------------------------------- Ivan Kaufman, Arbor Realty Trust, Inc. - Chairman, President & CEO [18] -------------------------------------------------------------------------------- So we think that -- and that's why we've given guidance of just a very modest growth, if any, in the Agency Business, that there's an excess use of [IL], their cap rates are very compressed, and there's a very aggressive lending environment. We're seeing an increase in some taxes across many, many jurisdictions. And we're using a lot of prudence to underwrite the expense side as well as understand that traditionally, there's a level of amortization in assets and to use caution more on underwriting loans. So we've put forward the appropriate measures to protect our origination side. With respect to the asset management side, we have a deepened the [first bench]. We've added to that, and we'll continue to work very aggressively to front run potential changes in the economic environment and manage our assets and our borrowers accordingly. So we think we're well ahead of the curve to anticipate any changes in the environment. -------------------------------------------------------------------------------- Operator [19] -------------------------------------------------------------------------------- And our next question comes from Henry Coffey with Wedbush. -------------------------------------------------------------------------------- Henry Joseph Coffey, Wedbush Securities Inc., Research Division - MD of Equities Research [20] -------------------------------------------------------------------------------- The -- when we look at the data of Fannie, Freddie and recently, the FHA have started tightening a little bit in the summer, and the FHFA -- the FHA sort of jumped into this on the residential side. When you look at the multifamily business, they're not as tempered by past experience there, but have the GSEs started to tighten up a little bit? I mean given your own insights into what's going on -- I'm sure you're in active dialogue with them. But I was wondering if you could give us some thoughts about that. -------------------------------------------------------------------------------- Ivan Kaufman, Arbor Realty Trust, Inc. - Chairman, President & CEO [21] -------------------------------------------------------------------------------- My answer is, they have not. They have not at the moment. Their underwriting standards continue to be consistent with their prior year standards. So we'll wait and see what they do. They've been pretty consistent along the line. -------------------------------------------------------------------------------- Henry Joseph Coffey, Wedbush Securities Inc., Research Division - MD of Equities Research [22] -------------------------------------------------------------------------------- And then I'm equally intrigued with the single-family business. It seems to be more of a private than a public market, which is good for you as a lender. Are you looking at the full spectrum, which is what it sounds like? And can you give us some sense of what the lower end of the market looks like in terms of rates and expected losses and risk factors? -------------------------------------------------------------------------------- Ivan Kaufman, Arbor Realty Trust, Inc. - Chairman, President & CEO [23] -------------------------------------------------------------------------------- Yes. Well, it is a private market and that's why we're uniquely positioned with our permanent capital, our securitization ability, our originations capability to really enter that market effectively. The key to the biggest part of the market, which is the aggregation of individual borrowers, individual units is where, really, I think, the margin is and the growth will come from. That's 80% of the single-family to rent market. So we're working really hard on the technology side to be able to originate that product effectively. If we're successful, if we can combine that with the other originations we do on the single-family rental, we'll have significant volume and scale to effectively access securitization market on a very consistent basis. So we are in the beginnings. We can grow over the background the capability, the franchise and the name and we think this is a real significant year for us to combine all the components that I mentioned earlier and build out those platforms, but we're making significant progress on the single-family rent market -- the single-family build-to-rent market, which we love. We're developing a very loyal customer base to our originations that work, on the mid-tier borrowers and now we want to build out the individual aggregation on the individual units. So we're quite pleased. As I mentioned earlier, I think it's a little early to give any kind of projections, but it's going to begin to make a good contribution for the fund's earnings even this year. -------------------------------------------------------------------------------- Operator [24] -------------------------------------------------------------------------------- And I'm not showing any further questions in the queue. I will turn the call back to Ivan Kaufman for his final remarks. -------------------------------------------------------------------------------- Ivan Kaufman, Arbor Realty Trust, Inc. - Chairman, President & CEO [25] -------------------------------------------------------------------------------- Okay. Thank you, everybody, for your participation, and it's been a phenomenal 2019. We're extremely optimistic about 2020, and we're very prepared even for a change in the cycle as we compiled on our balance sheet and the cash we're accumulating. We're going to have a very offensive position. So thank you again, and have a good day. Happy Valentine's Day, everybody. -------------------------------------------------------------------------------- Operator [26] -------------------------------------------------------------------------------- And with that, ladies and gentlemen, we thank you for participating in today's conference. And you may now disconnect.