Good morning, ladies and gentlemen, and welcome to the fourth quarter and full year 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 and one on your touch-tone phone. 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 need operator assistance, 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, Keith, 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-end of December 31st, 2020. 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 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 occurrences of unanticipated events. We also have one housekeeping item we'd like to mention. Historically, we have disclosed core earnings as an important non-GAAP financial metric to assess the performance of our business. Effective in the fourth quarter, we are changing the name from core earnings to distributable earnings as a result of discussions between the mortgage banking industry and the SEC over the past several months to adopt terminology that is more descriptive of what this metric represents. This is nothing more than a name change and not a change in how we calculate the metric. Distributable earnings is calculated the same way we calculated core earnings in the past. 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. We're very excited today to discuss the significant success we had in closing out what was an exceptional 2020, as well as our plans and outlook for 2021, which we believe will be another outstanding year. As you can see from this morning's press release, we have another record quarter, and 2020's results reflect one of the best years as a public company. We are very well positioned to succeed in the current economic climate, which gives us great confidence in our ability to continue to have tremendous success in 2021. We have built a viable operating platform focused on the right asset class with very stable liability structures, strong liquidity, an active balance sheet, and GSE agency business, and many diversified income streams that generate strong earnings and dividends in every market cycle. Our business model also provides many diversified opportunities for growth, which clearly puts us in a class by ourselves and allows us to increase our dividend three times in 2020 while maintaining the lowest dividend payout ratio in the industry. Over the last five years, we have delivered an annualized shareholder return of approximately 22% per year, significantly outperforming our peers in each and every year, including the distinction of being the only commercial mortgage REIT in our space to deliver a positive shareholder return in 2020 despite the significant effects of the pandemic. And the performance, combined with the quality and diversity of our income streams, along with a track record of consistent earnings growth and an industry-low dividend payout ratio, clearly differentiates us and is why we believe we are extremely undervalued and we should be trading at a substantial premium to our current price. As I mentioned earlier, we had another record quarter with our fourth quarter results reflecting the continued commitment and successful execution of our business strategy and the diverse platform we have developed. These truly remarkable results have once again allowed us to increase our dividend to $0.33 a share. This is our third consecutive quarterly dividend increase, reflecting a 10% increase in 2020 and represents a payout ratio of around 70% compared to an industry average of 95%-100%. Before I discuss in more detail the growth and success we had in all of our business platforms, I want to highlight some of our more significant 2020 accomplishments, which include generating substantial growth in our earnings, allowing us to increase our dividend three times to an annual run rate of $1.32 a share, up from $1.20 per share, resulting in nine straight years of consistent dividend growth with 19 increases over that time, delivering a total shareholder return of 7.4% in 2020 and 166% cumulatively for the last five years, with an annualized return of approximately 22%, achieving industry-leading ROEs of 19%, a 30% increase over the last year, producing record originations of $9.1 billion, a 20% increase from our 2019 numbers, moving up three positions in the league tables, finishing sixth in Fannie Mae DUS production and number one in Fannie Mae Small Balance Lending category for the second year in a row, producing record agency originations of $6.3 billion, a 44% increase over the last year, increasing our balance sheet portfolio of 28% in 2020 to $5.5 billion, growing our servicing portfolio to $25 billion, a 23% increase from 2019, and a 52% increase over the last three years, continuing to be a market leader in the non-recourse securitization arena, closing our largest CLO to date totaling $800 million with improved terms and flexibility, and raising $250 million of accretive growth capital to fund our growing pipeline and increase our earnings run rate. To further highlight this incredible success, I would like to talk about the significant growth we experienced in all areas of our business and how well positioned we are to continue this success going forward. As Paul will discuss in more detail, our distributable earnings for the fourth quarter were $0.49 per share, which is an incredible accomplishment and is a true testament to the value of our franchise and the many diverse income streams we have created. We continue to realize significant benefits from many areas of our diverse platform, including record growth in our GSE agency platform that continues to produce strong margins and increased servicing fees, continued growth and significant benefits from the size and scale of our balance sheet business, strong performance of our multi-family focus portfolios with very few delinquencies and extremely low forbearances, and substantial income from our residential business. These recurring benefits, combined with our versatile originations platform, strong pipeline, and credit quality of our portfolio, puts us in a unique position to be able to continue to produce significant distributable earnings going forward, and we are appropriately positioned to excel in this environment. We experienced significant growth in our GSE agency platform in 2020. We originated $2.7 billion in GSE agency loans in the fourth quarter and $6.3 billion in the full year, both of which are new record levels. Equally important, we also have a very robust pipeline, and as a result, we expect to produce strong origination volumes in the first quarter and remain confident in our ability to continue to produce significant agency volumes in 2021. Our GSE agency platform continues to offer a premium value as it requires limited capital and generates significant, long-dated, predictable income streams and produces significant annual cash flow. Additionally, our $24.6 billion GSE agency servicing portfolio, which grew 23% in 2020, is mostly prepayment protected and generated $112 million a year and growing in recurring cash flow, which is up 27% from $88 million annually last year. This is in addition to the strong gain on sale margins we continue to generate from our origination platform, which, combined with new and increasing servicing revenues, will continue to contribute greatly to our earnings and dividends. From a liquidity perspective, we are very pleased to have a current cash and liquidity position of approximately $400 million, which provides us with adequate liquidity to navigate the current market conditions and gives us offensive capital to take advantage of accretive lending opportunities. This has allowed us to replace our runoff and meaningfully grow our balance sheet loan book with high-quality multi-family bridge loans that generate attractive levered returns and create a substantial pipeline of future GSE agency origination volumes and long-dated servicing revenues. We are very pleased with the high-quality balance sheet portfolio we have built that is also financed with the appropriate liability structures. We grew our balance sheet loan book 28% in 2020 to $5.5 billion on $2.4 billion in new originations. This significant growth will continue to increase our run rate of net interest income going forward. We also have a very robust pipeline, which we believe will allow us to continue to grow our loan book in 2021 and increase our earnings. It is also very important to highlight that over 90% of our book are senior bridge loans, and more importantly, 80% of our portfolio is in multi-family assets, which has been the most resilient asset class in all cycles and continues to significantly outperform all other asset classes in this recession as well. In reflecting on 2020, we had an exceptional year and clearly outperformed our peer group. We are the best-performing REIT five years in a row, delivering a 22% annualized return over that time period. Our team was extremely well positioned for this dislocation that occurred, and as a result, we suffered no dilution or substantial loss in value from issuing diluted rescue capital or high-yielding debt to navigate through this recession. We also set up for continued success in 2021 through a versatile operating platform that is multi-family-centric with a strong pipeline, significant servicing income, sizable balance sheet portfolio, single-family rental platform, and our investment in the residential mortgage business. As a result, we are optimistic that this year we will enter a dividend elite club of 10 straight years of dividend growth. I will now turn the call over to Paul to take you through the financial results. Thank you, Ivan. As Ivan mentioned, we had another exceptional quarter, producing distributable earnings of $67 million or $0.49 per share for the fourth quarter. We also had a record year with distributable earnings of $1.75 per share in 2020, a 28% increase over our 2019 results. And these results translated into record-high ROEs of approximately 21% for the fourth quarter and 19% for the full year of 2020, which reflects a 30% increase over our 2019 ROEs. We also continue to benefit from several positive aspects of our diverse business model, including significant growth in our agency and balance sheet business platforms, LIBOR floors on a large portion of our balance sheet loan book, and substantial income from our residential banking joint venture. These benefits clearly demonstrate the value of our operating platform and the diversity of our income streams, and more importantly, gives us great confidence in our ability to continue to generate strong earnings and dividends in the future. As we mentioned earlier, we had another phenomenal quarter from our residential banking business, and as a result of the continued historical low interest rate environment, we recorded $20 million of income from this investment in the fourth quarter, which contributed approximately $0.12 per share on a tax-affected basis to our Distributable Earnings. The income from this investment further emphasizes the diversity of our income streams and acts as a natural hedge against declining interest rates, specifically earnings on our escrow balances. And while we believe this investment will continue to contribute meaningfully to our distributable earnings going forward, we are expecting to see some normalization in volumes and margins in this business in 2021. Our adjusted book value at December 31st was approximately $10.35, adding back roughly $63 million of non-cash general CECL reserves on a tax-affected basis. This is up 6.3% from approximately $9.74 last quarter, largely due to the significant earnings we generated, as well as our fourth quarter capital raise. And as a reminder, we have very little exposure to the asset classes that have been affected the most by the recession, such as retail and hospitality. Our total exposure to these asset classes is approximately $200 million, or approximately 4% of our portfolio. We also believe we have adequately reserved for these assets and do not feel at this point that any material further impairment will be necessary, which gives us confidence that our adjusted book value of $10.35 accurately reflects the current impact of the recession. Looking at our results from our GSE agency business, we originated $2.7 billion in loans and recorded $2.4 billion in loan sales in the fourth quarter. The margins on our fourth quarter GSE agency loan sales was 1.41% compared to 1.63% for the third quarter, mainly due to a change in the mix of our loan products during the quarter and from lower margins on our Fannie business due to a higher average loan size. In the fourth quarter, we recorded $69 million of mortgage servicing rights income related to $2.8 billion of committed loans, representing an average MSR rate of around 2.45%, which was down from 2.77% rate for the third quarter, again, mainly due to larger loan sizes in the fourth quarter. Our servicing portfolio grew 9% this quarter and 23% in 2020 to $24.6 billion at December 31st, with a weighted average servicing fee of 45.4 basis points and an estimated remaining life of nine years. This portfolio will continue to generate a predictable annuity of income going forward of around $112 million gross annually, which is up approximately $24 million, or 27% on an annual basis from the same time last year. Additionally, prepayment fees related to certain loans that have yield maintenance provisions was $2.7 million for the fourth quarter compared to around $2 million for the third quarter. We also continue to see very positive trends related to our GSE agency business collections, which we believe reflects the strength of our borrowers and the quality of our GSE agency portfolio. We only have a handful of delinquent loans outstanding and extremely low forbearance numbers in our portfolio through January. Loans in forbearance represent less than 0.5% of our $18.3 billion Fannie book and around 5.5% of our $4.9 billion Freddie loan book, which is relatively unchanged since October, as we have had very few new requests for forbearance in the last several months, and as a result of these extremely low forbearance numbers, we have no material unrecovered servicing advances outstanding either. In our balance sheet lending operation, we grew our portfolio 28% to $5.5 billion in 2020 on $2.4 billion in originations. Our $5.5 billion investment portfolio had an all-in yield of 5.8% at December 31st compared to 5.93% at September 30th, mainly due to higher rates on runoff as compared to new originations during the quarter. The average balance in our core investments was up to $5.1 billion this quarter from $5 billion last quarter, mainly due to the full effect of our third quarter growth. The average yield on these investments was 6.04% for the fourth quarter compared to 5.98% for the third quarter, mainly due to more acceleration of fees from early runoff in the fourth quarter, which was partially offset by higher interest rates on runoff as compared to originations in the fourth quarter. Total debt on our core assets was approximately $4.9 billion at December 31st, with an all-in debt cost of approximately 3.03% compared to a debt cost of around 3.09% at September 30th. The average balance on our debt facilities was up slightly to approximately $4.64 billion for the fourth quarter from $4.59 billion for the third quarter, mostly due to financing the growth in our portfolio. And the average cost of funds on our debt facilities was relatively flat at 3.05% for the fourth quarter and 3.06% for the third quarter. Overall, net interest spreads on our core assets increased slightly to 2.99% this quarter compared to 2.92% last quarter, and our overall spot net interest spread was down to 2.77% at December 31st compared to 2.84% at September 30th. Lastly, the average leverage ratio on our core lending assets, including the trust preferreds and perpetual preferred stock as equity, was flat at 86% in both the third and fourth quarter, and our overall debt to equity ratio on a spot basis was also flat at 3.0 to 1 at both December 31st and September 30th, excluding general CECL reserves. That completes our prepared remarks for this morning, and I'll now turn it back to the operator to take any questions you may have at this time. At this time, if you do have a question, press star and one on your telephone keypad. You can always withdraw your question by pressing the pound key. We do ask that you please pick up your handset to allow optimal sound quality. Thank you. We'll take today's first question from Steve Delaney with JMP Securities. Please go ahead. Thanks. Good morning, Ivan and Paul. Congrats on a strong close to a year that I think would have been hard for us to imagine when we were sitting here last March, for sure. You mentioned several times in your remarks, you talked about diversity. So with my questions, I'm going to go there away from the two main agency and structured businesses, if I may. A couple of days ago, we saw a Bloomberg article talking about a transaction that Starwood was contemplating about a $300 million institutional loan on 1,600 single-family properties, and it looked like it was just going to be a single-borrower. They were trying to do a single-borrower or CMBS execution. So that's in the market, and I know single-family rental, Ivan, is something you've been talking about for, I think, about a year now. If you could just give us an update, your thoughts about that product and opportunity and kind of where your operation stands as we sit here today? Thank you. Sure. We have significantly ramped up and have become the leader in single-family Built-to-Rent communities. I believe we have close to $500 million in our pipeline and have an equal amount in underwriting and ready to close. I would project that that volume will double, and that is a great business for us. We do the construction lending, which turns into a bridge, and then we do the ultimate securitization on those loans. So each transaction, we get three turns on. I love that business. Wow. You're able to build those communities at a similar cost that you can build a multi-family. With COVID, you're seeing certainly a move towards less density, and also what you're seeing as well is that's a preferable option for people instead of buying a home if they don't have the down payment or if they think they're transient and don't want to go through the transaction cost for that being an option. They're great communities. We're working with a few developers that have really developed the skill set to be able to build those products in a very efficient way, similar to what it costs for a multi-family project, and we love it. We're continuing to provide financing for people who are aggregating pools of single-family rentals with the idea of ultimately doing a securitization or selling them off in pieces, depending on whether we think we can get to the securitization market in time or whether we want to just distribute those products. So those are two avenues we've invested in starting two years ago. They're starting to bear a lot of fruit right now, and they're going to represent a significant amount of growth for the firm, and we just love that business. Great. And the construction and bridge loans that are on the books, are they currently carried in the structured portfolio? Yeah. So the. Well, you can answer that. Yes. Hey, Steve. So yes. As Ivan mentioned, we're building a pretty strong built-to-rent business as well as the construction into bridge. So if it's a bridge, it's in the bridge product. The built-to-rent obviously funds over time, so you don't see a significant amount of that in the volume numbers we present. As the draws get done, you do, but the committed volume is something that's pretty significant. But yes, it all ends up in the structured side of the business bucket for now. And Ivan, to be clear, and last part on this question, you're going to eventually go to a permanent loan, but you're in the process, I guess, of some bridge loans getting to the point where they're stabilized and they're going to go into a permanent. But you've not, to this point, executed a securitization. Is that correct? But maybe that's a 2021. Well, they actually resemble very much multi-family loans under agency. I'll let those some go on top of the SBL program. Oh, okay. So it doesn't need its own securitization. It fits right in, which is remarkable. So it fits right into our business flow and process, and it's just a creative to what we're doing. Okay. Thank you for that clarity. The second piece is on the Resi JV. I mean, it's been a great year for that business, obviously. We've seen a lot of IPOs in the space. Could you just remind us on Cardinal, the channels that they are focused on, whether it's direct or wholesale, and the percentage of the business that is refi versus purchase? And there's a lot of obvious concern that the refi side of the business will come down pretty materially, not right away, but maybe by the end of 2021. Thanks. First, we've been extraordinarily cautious in the way we've been forecasting and have been exceeding our own forecast by a lot every single quarter, quarter by quarter by quarter, and that's been going on for quite some time. With respect to the strategy, it's more of a retail strategy, not a wholesale strategy, but we are diversifying channels. And Paul, you can answer the financial-related questions. Yeah. So it's, like you said, Steve, it's consumer direct and retail. It has been and probably continues to be for a period of time here, a pretty big refi component, as you know. I don't have the numbers in front of me, but it's a really high percentage of the volume. However, having said that, the business is national across the country, has a tremendous retail presence. As you know, homeownership is on the rise, and so we do expect that the refi business will slow down a bit. Margins will compress a little bit, but we have a tremendous network and a tremendous infrastructure and a big focus on technology and believe that that business will do quite well on the home purchase side as well. Right. I mean, the ROEs are so insane right now. It can go down, volume and revenue can go down quite a bit and still have incredible ROEs. So thank you both for your comments. We'll take our next question from Charlie Arestia with J.P. Morgan. Please go ahead. Hey, good morning, guys. Thanks for taking the questions. A bit of a follow-up, I guess, to the first question in terms of the topic, but kind of looking at it through a different lens. Given the focus on the New York area in particular, it would be great to get your thoughts on the competitive environment there. And I'm assuming that single-family rental is part of this, but some of the unique challenges that New York City faces in particular with regards to some of the demographic trends and population shifts that are happening there. Yeah. First off, we don't have a significant concentration in New York. I think what you're doing in New York is you're going through a recalculation of rental values as well as sales values. You're seeing a lot of rentals. You're seeing a lot of sales, in fact, record numbers right now, but at a significantly reduced sales price percentage as well as rental. At these new bases, we're quite bullish. We like New York City. We think come September, when the schools open, people go back to work, you'll see the city begin to return to normal. You just have to underwrite appropriately for what the right rentals are, and you have to take into consideration the potential for increase in real estate taxes. So our portfolio is performing well there. We're optimistic that leasing will be done. It'll be done with some concessions, and it'll be done with reduced rental rates. So underwriting appropriately, getting the right structure on our bridge loans is critical, and giving the loans the right amount of time to hit those lease-up numbers. But I think come September, we'll look back and say, "Wow, we're beginning to return to normal fairly quickly." It'll be a new normal now. Okay. Got it. Thanks. And then one more. I was wondering if you guys have ever disclosed sort of the rough breakout of what percentage of your origination volumes are to existing or previous Arbor borrowers? It feels like things are certainly improving more broadly, but the sector's really leaned on those pre-existing relationships to drive volumes. And curious to get your thoughts on the mix of previous borrowers versus new relationships. Charlie and Paul, we have not disclosed that in the past, but Ivan can certainly give some color. We obviously have tremendous relationships and do a significant amount of business with repeat borrowers, but he certainly can give you some color on the market and what's happening today in those areas. Yeah. Our business is built on repeat borrowers, and keep in mind in the multi-family sector, when you have a borrower, he often has a lot of limited or co-borrowers, and you'll see a repeat of not just that particular GP, but of the limiteds who buy all the properties. It's not uncommon for us to have 10 to 20 loans with a particular borrower and constantly re-engaging with that particular borrower, but that's the nature of our business, and even when we do deal with mortgage brokers, we generally are mortgage brokers who are very loyal to us, and there's a repeat level of business from that mortgage broker that's very consistent. Thanks very much, guys. Appreciate all the color. Our next question is from Steven Laws with Raymond James. Please go ahead. Good morning, Ivan and Paul. You both touched on the strong volumes, and certainly last year closed with the record volumes of $2.7 billion. Can you talk about year-to-date volumes or expectations here that we should think about as we model out volumes for 2021? Sure. All right. Let me start, Steven, just giving you some color on how January closed out, and then Ivan and I will talk a little bit about globally how we view things for the rest of the year. In January, we did about $500 million of agency loans. I think if you go back and look at our production in the past year, in the second quarter, we did $1.4 billion. In the third quarter, we did $1.5 billion. And obviously, in the fourth quarter, we put a month, the number of $2.7 billion. On a run rate right now, we're probably tracking to $1.4 billion-$1.5 billion for the first quarter, and possibly for the second quarter. Ivan will give some color on where he thinks the agency business goes from there. On the balance sheet side, we've also been very active. We've had a large balance sheet pipeline as well. I think in January, we did about $400 million-$450 million of volume, and we had about $50 million of runoff. So we've had about $400 million of net growth in January to our book. Don't know what pace that happens. It'll all depend on what runoff we see going forward, and that's always a challenge, but our pipeline's very, very strong, and we're very confident we're going to be able to grow this book pretty substantially in 2021 as well. Yeah. We're off to a good start. We have a great pipeline. Our bridge pipeline, our balance sheet pipeline is extraordinarily strong where many people were very negatively impacted during the pandemic, didn't have the right liability structures, didn't have the right banking relationships, but we didn't miss a beat. So we've gained market share. We've gained a lot of momentum. The securitization market, we believe, is going to be extremely attractive going forward, and I think that will continue similarly along the lines, if not greater than what we did last year. So we'll see good growth in the balance sheet portfolio and hopefully a consistent level of building our pipeline and continuing at the levels that we closed in January if things remain constant. Great. Thank you both for the color on that. Switching to the other side, Paul, can you talk about the recent CLO, the market reception plans for future issuance, and how we should think about that this year? Sure. So as you know, we did. Paul, let me cover that a little bit because we really can't talk about going forward of what we're doing. It impairs what we do, but the securitization market has tightened dramatically from where it was 30 days ago, 60 days, or 90 days ago. We think it's at as tight levels, almost as tight as it was pre-COVID, and we have probably the greatest brand in the CLO market. We have a good collateral position on our lines, and we always maintain a very good percentage of mix of CLO debt to total debt. So we think that market is perfect. We got very aggressive to load up our balance sheet, understanding that that market would tighten, and we feel very optimistic about us being able to access that market. Paul, you want to add some color? Yeah. That's exactly what I was going to say. Steven, it's a big part of our strategy. As you know, we've been a serial issuer, someone who's had a tremendous brand and reputation, and as Ivan said, we manage by looking at the market and seeing when we think it's appropriate to access that market, and it's just part of our normal strategy, and we continue to do that as we move forward, and we'll see when and if we get there and when it happens. Great. Appreciate the comments this morning. Next question is from Jade Rahmani with KBW. Please go ahead. Thank you very much for taking the questions. In terms of the structured finance business, the on-balance sheet business, two questions. First, what drove the almost $1 billion of originations? Maybe you could give some color as to how many deals that encompassed, what percentage were repeat customers, and how much were refinancings of existing deals? And then secondly, how are you thinking about the ROEs in that business given spread compression that we're seeing in the stabilized asset types? With respect to refinancing of our own portfolio, it's a very small percentage. That's not something we customarily do unless there's a creative reason to us and to the borrower, but that's not a primary aspect of our business. We're always perceived with a tremendous caution if it's a bridge-to-bridge, whether it's our own or somebody else's. With respect to the ROEs, we generally look for around anywhere between 10 and 14, with an average of 12 is where we originate to. We actually think with where the securitization market is, I think we can probably see a bit of a lift in that. Relative to the volume that we've done, it's almost as though it was like we were one of the last men standing. Most people were still licking their wounds. They were very impaired by COVID, by being over-leveraged and not being prepared, and therefore really were not in a position to originate new loans. It allowed us to really step in, particularly on the larger loan side. A lot of firms were out there being extraordinarily aggressive, and they were originating very tight spreads without the right structure. Many of those firms got hurt, kind of left a little bit of a void, so it gave us an opportunity to build some large loan positions with great structure and great pricing, and even though competition's returning to the market, I think we've gained real favor on the originations of those products, with a good percentage of our product being repeat customers. Yeah. And just to add to that, Ivan, all that is absolutely correct. And from a number of transactions perspective, we did about $950 million of straight bridge loans. The rest were some of our SFR business. And on that $950 million, we probably had 30-35 deals. So we did have some chunkier deals, as Ivan mentioned in there. And as he said, not a lot of that at all is refinanced. Some of it was, but not that much. And our levered returns are right in the area that Ivan was talking about. You said January balance sheet production was $450 million-$500 million? We did about $450 million in January already and had about $50 million of runoff. So we had net growth in January of about $400 million. That's correct. It was a really strong. And Jay, I just want to, with respect to our returns, keep in mind that it's really exponential in a way because our goal is to create an agency lending loan out of that, which gives us gain on sale as well as servicing revenue. So if we build our balance sheet of fees, our agency business, which is part of our model and our franchise, and to the extent that business can grow, we'll grow the annuity on a long-term basis. So the returns become exponential when we recapture that end loan business. That's right. What's the mix of multi-family and the bridge lending business? Because I've always asked the commercial mortgage REITs why they don't have an exit strategy in terms of recapturing business once it goes out of transition, and none of them have a good answer for that. It seems like Arbor is unique among that in terms of being able to refinance that. Yeah. Well, we are extraordinarily disciplined in our approach. And I mean, just off the cuff, and Paul will correct me, I think 100% of the loans that we originated in the fourth quarter and so far in the first quarter were all multi-family. I'm pretty sure. But generally, it's almost 80%-90% is multi-family. All multi-family loans that we originate on our balance sheet are sized within an agency takeout, and that's our business model. Yeah. And Ivan's right. We had 98% of the fourth quarter originations were multi-family. 100% of the first quarter originations so far were multi-family. So those percentages are always extremely high for us, and we obviously get the takeout if we can on the agency side as well. In terms of the sustainability of the GSE volumes, is there a refinance component that you think is likely to abate in coming quarters if interest rates normalize? I know that their interest rate, sorry, their lending caps were basically increased but seem flat with what they did in 2020, so I'm not expecting their overall volumes to increase. And I'm a little worried about what happens if rates tick up from here. So how do you think about the sustainability of the GSE business? So I think it's important to note, different than other asset classes and more importantly, different than the single-family business, is that most multi-family loans that are originated are done on five-, seven-, and 10-year terms, and many of them are done, especially the value-add, on one- and three-year terms. So there's a continued flow and pipeline of loans that have to be refinanced just based on historical maturities. It's not as though single-family loans, which have a 30-year maturity, are interest rate-driven or are driven by home purchases. So that is a significant amount of business. We expect that the agencies at their $70 billion-$80 billion level, which is similar to where it was last year, they will fill up. We will have our market share, and that'll be a strong market. There are certain times when interest rates dip like they did when they were down to 75 basis points on the 10-year that people get extraordinarily aggressive, and they move very quickly, and there's a bit of a jump. And then there are times like now where rates jump up from 75 to 130, and people take a pause, and they have to rethink where they are. But 125 basis points on a 10-year with low threes as your interest rate are still at historical lows. And anything that was originated over the last 10 years, most of that will qualify for an accretive refinance to borrowers. So we're quite optimistic. I think the real question comes on the purchase side. Is there enough inventory out there? Are there transactions going to grow? Is the purchase market going to be in 2021 where it was in 2019? But it should be a robust, big market on the multi-family side, and we should be able to maintain and get our share. Thank you. And just last question on the credit side. Looking at the agency business, I think you said forbearances in the Fannie Mae DUS portfolio were 0.5%, and in the Freddie Mac portfolio, 5.2%. So a tenfold difference between Freddie and Fannie as well. Other folks like Walker & Dunlop threw light on the reasons why that is. Some have said it relates to the average smaller loan size in the Freddie Mac portfolio. Possibly, it relates to the risk-sharing nature of DUS strategy. So what do you think the reason is for the higher forbearance in Freddie Mac? And secondarily, are you worried at all about migration of that 5% forbearance into future delinquencies? So first, our forbearance, specifically on the small balance, have outperformed the rest of the group. And Freddie Mac's forbearances are higher than Fannie Mae's, so policy is a little bit different. With respect to any potential losses that come from these, we're not concerned at all. We think the properties are well in the money. We think come September, things will return to normal, and we're fairly comfortable that we're in a good position on all those loans. I think there was a level of dislocation. Borrowers applied for forbearance. Properties are returning to normal. But keep in mind that there's a lot of cap rate compression right now on the multi-family side. So even if you have a little softening on rents and a little rent decline and even a little vacancy, that's really offset by cap rate compression. So we think the values are pretty stable, and the demand for investors to buy multi-family is really outrageous, and we're very, very comfortable with our portfolio. Thank you. Our next question is from Lee Cooperman with the Omega Family Office. Please go ahead. Thank you. Let me just first congratulate you and your team, Ivan. You guys have done a terrific job for the shareholders, and you stand out in the class by yourself, and I think you deserve a shout-out, and I'm giving you that. Now let me move on to more relevant stuff. Let's talk a little bit about capital adequacy and your cost of equity versus your return on equity, and several times in the call, and you've said this in the past, and you've proven to be 100% right, you felt your stock was substantially undervalued, yet you've been willing to sell stock to finance your growth, so I guess the answer is you sell something cheap because you think you could reinvest the money at even more attractive terms. So maybe you could spend a little time talking about your return on, if every dollar you raise, what kind of return can you generate on that dollar incrementally? And any thoughts on that would be very interesting to me. So when we're raising capital, it's usually to fund our growth. So in this particular business, we have to evaluate whether we're going to have runoff in our balance sheet portfolio, what we can add to it, and whether we can add to it accretively. And if we can increase our balance sheet portfolio and get a return north of 12 and as much as 15 sometimes, we'll evaluate whether it's worth raising capital to fund that growth if there's growth in our balance sheet. And it's really just a mathematical analysis that Paul performs, and he makes a decision where we should price our loans and how accretive it is and whether it's worthwhile bringing in and growing the balance sheet at accretive returns. It's just a mathematical analysis. Paul, do you want to comment on that? Sure. That's right. Hi Lee. And yeah, so we have a pretty robust pipeline. The only question is where does runoff go? And if runoff is stronger, then we have those dollars to fund the growth. If it's not, then we assess whether we want to do loans at those yields and raise capital at these prices or whatever prices we are. And historically, as you know, Lee, we've done, as you said, a great job of being real good stewards of capital with high inside ownership. So it's an analysis we do, and if we think we can raise capital at accretive prices to fund loans that generate, let's say, a 13 to a 14 ROE or 12 to 15, as Ivan said, then that's an analysis we do. And we look at it and say, if it's accretive, then we go forward. And that's exactly how the analysis works. We do think that we can raise capital to fund growth that would be 13%-15% on an ROE. So when you sell shares, it's because you think you can reinvest the money that would be accretive even though the stock is undervalued in your view? It all depends on whether or not the accretive will help our growth and strengthen our balance sheet and have a longer-term growth. Clearly, it strengthens your balance sheet. Your book value is $10.35. Your stock is trading over $16. So to the extent you sell stock well in excess of book value, which you've not been able to do in the past, it's accretive. But on the other hand, you're selling something that you think is worth more than you're selling it. That only makes sense if you can basically invest the money at a return that enhances the overall picture of the company, which you've been able to do. And so you're saying you can invest a 12%-15% ROE. Is that after the leverage you employ? Yes. Yes. Yeah. Also, as I mentioned earlier, Lee, keep in mind that that 12 to 15 is really greater than that when we capture the end loan. Then it's more like a 30%-40% return. So if we can recapture 60%-70% of what we're originating, right, and create long-term annuity growth, then it's the best capital raise we can do. And that goes into our analysis as well. Yeah. That's where I was going next. Where Ivan is, is on the end loan. We're capturing a lot of that bridge business, Lee, into Fannie Mae and agency end loans, which not only gives us gain on sale, but it gives us nine, 10 years of servicing that's prepayment protected and locked out at a higher multiple. So that is all factored into the equation as well. Again, I want to congratulate you guys on really traversing the environment, very difficult environment, extraordinarily well. Congratulations. Thank you, Lee. Thanks a lot, Lee, and your support. We'll go next to Matthew Howlett with Wolfe Research. Please go ahead. Oh, hey, guys. Thanks for taking my questions. Two questions, if I may. First, you've got great momentum on the agency business. I just want to confirm there's obviously a mission-driven rule now where 50% of the volume has to be with renters at 80% of the median income. I just want to double-check on the conformity of your volume versus those new caps. And then I think I read that Fannie was increasing their G-fee on the multi-family business. Both of them clearly said that they're going to have to start operating on the new Calabria's new capital requirement, which was higher than the prior one, whether that would have an impact on any gain on sale margin? That's the first part. But with respect to the mission-driven, if we're not the number one mission-driven business, we're in the top tier. We've always been very, very mission-driven. We focus on workforce housing, which has been the space we're in with a lot of emphasis on the small balance loans, which also fits our criteria. So we're one of their top clients in that space, and that bodes well for us. So we fit that criteria. Got it. What was your second question? It was on the G-fee that both entities are going to start conforming to their new capital requirements that were unveiled in November, whether or not that would pressure any margins going forward if they do adjust G-fee levels? Yeah. Listen, I think what the agencies are going to do is they're going to originate their $70 billion or $80 billion. They're going to adjust their fees up and down depending on what their volumes are. And we're going to get our market share. And if you've read, we have our own private label program. So to the extent the G-fee has widened a little bit, we'll do more volume on our private label program, which we're well positioned for. So I think regardless of the environment, we have the tools to be very effective. Got it. And then second question, just to follow up on Lee's question, look at your capital structure, particularly your preferred and some of the unsecured debt you're coming to. It's a lot higher cost than where you could issue today. I'm assuming as you grow, it's going to even improve. I mean, I'm looking at 8% coupons on preferreds, and you probably at some point could issue at 6%. And then the unsecured debt is a little bit higher too from the stuff that's new. What can you tell me about what you could do with the balance sheet on those sides of the balance sheet? Can you call the preferred callable? I know you have to make-whole premiums on the unsecured stuff, but what could you do to lower the cost of your debt capital and your preferred equity capital and maybe issue on those channels as opposed to share equity? Sure. So let me handle the preferred side. You're 100% right, Matt. It is callable. The preferred, it had a call protection. That call protection has expired. It's only $90 million, but it is callable. It is trading at a coupon above 8%. I've been looking at the market. It's possible to introduce a new instrument like that in maybe in the 6s, maybe even better as things starting to tighten. And there's another area as well, right? There's an ABR here. Right now, our dividend yield is still higher than we want it to be, and we think we're undervalued. And if we were able to get a premium value at some point, there's also an ABR on taking that out with equity if the dividend yield is inside of that. But right now, we're looking at that. It's very small. We'll continue to manage that. It won't have a massive impact on our cost of funds, but it is something we are watching. The other area is, as you said, the senior unsecured notes are kind of all locked out, and we've got tremendous rates on those pieces of paper. So we're in a good spot right now on that. And as Ivan mentioned, as we continue to march forward, we'll see how successful we are in the future, as we have been at accessing the securitization market, which continues to drive down our cost of funds. Those are the things we look at. We continue to work with our banking lines at making sure we continue to get the tightest spreads and the tightest pricing, and we've made significant improvements there as well. And that's just part of our culture, and that's just part of how we run our business. That's great. And I really appreciate just getting back to the preferred. I know it's a small issue, but do you think you could, given the growth of the company and the growth of the balance sheet, increase it to maybe $100-$200 million in size and do a 6% deal? It seems it would be massively accretive to your investment business. Just curious on how high you could take it. Yeah. I'd have to look at it. I've looked at it a while ago, and it was in the high 6s then. I think it's tightened since then, and I'd have to look at how much we can add, but again, the preferred isn't common. It's preferred, but it's a good instrument, and you're going to add call protection to it when you do it, so you have to balance the new call protection with the rate, and I think you're right. I think we can be well inside this number, and it's something we're going to look at. I really appreciate it. Thanks. It appears we have no further questions. I'll return the floor to Ivan Kaufman for any closing comments. Okay. Well, thanks everybody for your participation and, more importantly, for your support during a very, very difficult year. We had a record year in 2020, a great fourth quarter, actually a record fourth quarter. We're off to a great start in 2021. And my goal is to enter the Dividend Elite Club and have 10 straight years of dividend growth. And I feel very optimistic about our ability to achieve that. Have a great day, everybody, and a great weekend. Be well. Stay safe, everyone. This will conclude today's program. Thanks for your participation. You may now disconnect.