Company Highlights:
- GAAP net loss of
$(37.3) million , or$(0.20) per diluted common share - Distributable earnings1 of
$0.10 per diluted common share, or$0.15 excluding$9.6 million of net realized losses from the resolution of certain legacy assets - Generated
~$500 million of additional liquidity through two recent capital markets transactions with a portion of the proceeds used to:- Repurchase
$114.3 million of common stock at$5.42 per share, or 49% of book value inJuly 2026 - Redeem
$270 million of senior notes inJuly 2026
- Repurchase
- Repurchased an additional
$20.8 million of stock at$5.85 per share, or 53% of book value - Declares cash dividend on common stock of
$0.17 per share - Servicing portfolio of
~$36.70 billion , agency loan originations of$1.08 billion - Structured loan portfolio of
~$12.11 billion , originations of$689.0 million and runoff of$539.7 million
Agency Business
Loan Origination Platform
| Agency Loan Volume (in thousands) | |||||
| Quarter Ended | |||||
| Fannie Mae | $ | 619,130 | $ | 570,815 | |
| Freddie Mac | 428,278 | 91,255 | |||
| SFR-Fixed Rate | 21,272 | — | |||
| FHA | 8,083 | 45,507 | |||
| Total Originations | $ | 1,076,763 | $ | 707,577 | |
| Total Loan Sales | $ | 1,143,438 | $ | 670,972 | |
| Total Loan Commitments | $ | 1,211,900 | $ | 733,860 | |
For the quarter ended
At
Fee-Based Servicing Portfolio
The Company’s fee-based servicing portfolio totaled
| Fee-Based Servicing Portfolio ($ in thousands) | |||||||||||||
| UPB | Wtd. Avg. Fee (bps) | Wtd. Avg. Life (years) | UPB | Wtd. Avg. Fee (bps) | Wtd. Avg. Life (years) | ||||||||
| Fannie Mae | $ | 24,419,734 | 43.9 | 5.2 | $ | 24,261,724 | 44.4 | 5.4 | |||||
| Freddie Mac | 7,672,121 | 17.6 | 5.7 | 7,368,979 | 18.2 | 5.7 | |||||||
| Private Label | 2,477,077 | 18.7 | 4.1 | 2,554,209 | 18.7 | 4.3 | |||||||
| FHA | 1,585,871 | 13.8 | 18.9 | 1,584,644 | 13.8 | 19.0 | |||||||
| Bridge | 277,333 | 10.4 | 1.7 | 277,523 | 10.4 | 2.0 | |||||||
| SFR-Fixed Rate | 272,226 | 20.0 | 3.8 | 264,008 | 20.0 | 3.8 | |||||||
| Total | $ | 36,704,362 | 35.0 | 5.8 | $ | 36,311,087 | 35.5 | 5.9 | |||||
Loans sold under the Fannie Mae program contain an obligation to partially guarantee the performance of the loan (“loss-sharing obligations”) and includes
Structured Business
Portfolio and Investment Activity
| Structured Portfolio Activity ($ in thousands) | |||||||||||
| Quarter Ended | |||||||||||
| UPB | % | UPB | % | ||||||||
| Bridge: | |||||||||||
| SFR | $ | 490,617 | 71 | % | $ | 321,122 | 42 | % | |||
| Multifamily | 159,550 | 23 | % | 405,600 | 53 | % | |||||
| 650,167 | 94 | % | 726,722 | 95 | % | ||||||
| Construction - Multifamily | 38,810 | 6 | % | 40,870 | 5 | % | |||||
| Total Originations | $ | 688,977 | 100 | % | $ | 767,592 | 100 | % | |||
| Number of Loans Originated | 14 | 6 | |||||||||
| Commitments: | |||||||||||
| SFR | $ | 48,785 | $ | 53,000 | |||||||
| Construction - Multifamily | — | 113,070 | |||||||||
| Total Commitments | $ | 48,785 | $ | 166,070 | |||||||
| Loan Runoff | $ | 539,745 | $ | 861,033 | |||||||
| Structured Portfolio ($ in thousands) | |||||||||||
| UPB | % | UPB | % | ||||||||
| Bridge: | |||||||||||
| Multifamily | $ | 7,895,187 | 65 | % | $ | 7,897,122 | 66 | % | |||
| SFR | 3,376,845 | 28 | % | 3,265,802 | 27 | % | |||||
| Other | 46,519 | <1 | % | 46,519 | <1 | % | |||||
| 11,318,551 | 94 | % | 11,209,443 | 94 | % | ||||||
| Mezzanine/Preferred Equity | 502,998 | 4 | % | 497,961 | 4 | % | |||||
| Construction - Multifamily | 285,482 | 2 | % | 289,889 | 2 | % | |||||
| Total Portfolio | $ | 12,107,031 | 100 | % | $ | 11,997,293 | 100 | % | |||
At
The average balance of the Company’s loan and investment portfolio during the second quarter of 2026, excluding loan loss reserves, was
During the second quarter of 2026, the Company recorded a
In addition, at
During the second quarter of 2026, the Company modified 7 loans to borrowers experiencing financial difficulty with a total UPB of
The Company foreclosed on five loans with a UPB totaling
Financing Activity
The balance of debt that finances the Company’s loan and investment portfolio at
The average balance of debt that finances the Company’s loan and investment portfolio for the second quarter of 2026 was
The Company redeemed in full and at par a legacy CLO with
In
Dividend
The Company announced today that its Board of Directors has declared a quarterly cash dividend of
Earnings Conference Call
The Company will host a conference call today at
A telephonic replay of the call will be available until
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, single-family rental (SFR) portfolios, 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 leading Fannie Mae DUS® lender and Freddie Mac Optigo® Seller/Servicer, and an approved FHA Multifamily Accelerated Processing (MAP) lender. Arbor’s product platform also includes bridge, CMBS, mezzanine and preferred equity loans. 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, 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, 2025 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.
Notes
- 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 the last two pages of this release.
| Contact: | Arbor Realty Trust, Inc. Investor Relations 516-506-4200 InvestorRelations@arbor.com |
Consolidated Statements of Operations - (Unaudited) ($ in thousands—except share and per share data) | |||||||||||||||
| Quarter Ended | Six Months Ended | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Interest income | $ | 230,858 | $ | 240,303 | $ | 465,905 | $ | 480,997 | |||||||
| Interest expense | 177,761 | 171,578 | 352,963 | 336,829 | |||||||||||
| Net interest income | 53,097 | 68,725 | 112,942 | 144,168 | |||||||||||
| Other revenue: | |||||||||||||||
| Gain on sales, including fee-based services, net | 15,176 | 13,658 | 27,681 | 26,439 | |||||||||||
| Mortgage servicing rights | 12,110 | 10,930 | 21,770 | 19,061 | |||||||||||
| Servicing revenue, net | 23,879 | 27,437 | 49,619 | 53,040 | |||||||||||
| Property operating income | 8,313 | 5,452 | 16,373 | 9,839 | |||||||||||
| Gain on derivative instruments, net | 1,041 | 219 | 548 | 3,619 | |||||||||||
| Other income, net | 2,260 | 3,989 | 4,336 | 8,407 | |||||||||||
| Total other revenue | 62,779 | 61,685 | 120,327 | 120,405 | |||||||||||
| Other expenses: | |||||||||||||||
| Employee compensation and benefits | 45,096 | 41,181 | 92,779 | 87,217 | |||||||||||
| Selling and administrative | 15,868 | 14,859 | 32,821 | 31,171 | |||||||||||
| Property operating expenses | 12,670 | 6,802 | 24,635 | 10,276 | |||||||||||
| Depreciation and amortization | 5,929 | 5,848 | 13,033 | 9,592 | |||||||||||
| Impairment loss on real estate owned | 13,650 | — | 26,150 | — | |||||||||||
| Provision for loss sharing, net | 13,472 | 4,215 | 18,009 | 6,002 | |||||||||||
| Provision for credit losses, net | 38,163 | 19,004 | 43,979 | 28,079 | |||||||||||
| Total other expenses | 144,848 | 91,909 | 251,406 | 172,337 | |||||||||||
| (Loss) income before extinguishment of debt, gain (loss) on real estate, income from equity affiliates and income taxes | (28,972 | ) | 38,501 | (18,137 | ) | 92,236 | |||||||||
| Loss on extinguishment of debt | — | — | — | (2,319 | ) | ||||||||||
| Gain (loss) on real estate | 64 | (1,448 | ) | (2,073 | ) | (4,258 | ) | ||||||||
| Income from equity affiliates | 1,893 | 2,654 | 6,304 | 1,020 | |||||||||||
| Provision for income taxes | (3,150 | ) | (3,398 | ) | (5,235 | ) | (6,989 | ) | |||||||
| Net (loss) income | (30,165 | ) | 36,309 | (19,141 | ) | 79,690 | |||||||||
| Preferred stock dividends | 10,342 | 10,342 | 20,684 | 20,684 | |||||||||||
| Net (loss) income attributable to noncontrolling interest | (3,165 | ) | 2,015 | (3,112 | ) | 4,617 | |||||||||
| Net (loss) income attributable to common stockholders | $ | (37,342 | ) | $ | 23,952 | $ | (36,713 | ) | $ | 54,389 | |||||
| Basic (loss) earnings per common share | $ | (0.20 | ) | $ | 0.12 | $ | (0.19 | ) | $ | 0.28 | |||||
| Diluted (loss) earnings per common share | $ | (0.20 | ) | $ | 0.12 | $ | (0.19 | ) | $ | 0.28 | |||||
| Weighted average shares outstanding: | |||||||||||||||
| Basic | 190,806,800 | 192,236,206 | 192,491,494 | 191,154,501 | |||||||||||
| Diluted | 190,806,800 | 209,003,002 | 192,491,494 | 207,938,574 | |||||||||||
| Dividends declared per common share | $ | 0.17 | $ | 0.30 | $ | 0.47 | $ | 0.73 | |||||||
Consolidated Balance Sheets ($ in thousands—except share and per share data) | |||||||
| (Unaudited) | |||||||
| Assets: | |||||||
| Cash and cash equivalents | $ | 287,525 | $ | 482,875 | |||
| Restricted cash | 138,382 | 67,347 | |||||
| Loans and investments, net (allowance for credit losses of | 11,915,216 | 11,934,248 | |||||
| Loans held-for-sale, net | 375,797 | 409,081 | |||||
| Capitalized mortgage servicing rights, net | 323,887 | 340,842 | |||||
| Securities held-to-maturity, net (allowance for credit losses of | 157,137 | 156,087 | |||||
| Investments in equity affiliates | 82,762 | 57,966 | |||||
| Real estate owned, net | 545,946 | 498,938 | |||||
| 85,770 | 86,553 | ||||||
| Other assets | 440,403 | 460,966 | |||||
| Total assets | $ | 14,352,825 | $ | 14,494,903 | |||
| Liabilities and Equity: | |||||||
| Credit and repurchase facilities | $ | 5,812,258 | $ | 5,149,651 | |||
| Securitized debt | 2,972,246 | 3,468,258 | |||||
| Senior unsecured notes | 1,857,769 | 2,029,078 | |||||
| Junior subordinated notes to subsidiary trust issuing preferred securities | 145,907 | 145,497 | |||||
| Notes payable - real estate owned | 270,410 | 222,965 | |||||
| Due to borrowers | 27,562 | 33,451 | |||||
| Allowance for loss-sharing obligations | 118,898 | 97,579 | |||||
| Other liabilities | 266,752 | 281,271 | |||||
| Total liabilities | 11,471,802 | 11,427,750 | |||||
| Equity: | |||||||
| Preferred stock, cumulative, redeemable, | 633,683 | 633,683 | |||||
| Special voting preferred shares - 16,170,218 and 16,169,858 shares | |||||||
| 6.375% Series D - 9,200,000 shares | |||||||
| 6.25% Series E - 5,750,000 shares | |||||||
| 6.25% Series F - 11,342,000 shares | |||||||
| Common stock, | 1,890 | 1,955 | |||||
| Additional paid-in capital | 2,409,539 | 2,454,312 | |||||
| Accumulated deficit | (267,177 | ) | (136,597 | ) | |||
| Total | 2,777,935 | 2,953,353 | |||||
| Noncontrolling interest | 103,088 | 113,800 | |||||
| Total equity | 2,881,023 | 3,067,153 | |||||
| Total liabilities and equity | $ | 14,352,825 | $ | 14,494,903 | |||
Statement of Operations Segment Information - (Unaudited) (in thousands) | |||||||||||||||
| Quarter Ended | |||||||||||||||
| Structured Business | Agency Business | Other (1) | Consolidated | ||||||||||||
| Interest income | $ | 219,211 | $ | 11,647 | $ | — | $ | 230,858 | |||||||
| Interest expense | 172,066 | 5,695 | — | 177,761 | |||||||||||
| Net interest income | 47,145 | 5,952 | — | 53,097 | |||||||||||
| Other revenue: | |||||||||||||||
| Gain on sales, including fee-based services, net | — | 15,176 | — | 15,176 | |||||||||||
| Mortgage servicing rights | — | 12,110 | — | 12,110 | |||||||||||
| Servicing revenue | — | 42,126 | — | 42,126 | |||||||||||
| Amortization of MSRs | — | (18,247 | ) | — | (18,247 | ) | |||||||||
| Property operating income | 8,313 | — | — | 8,313 | |||||||||||
| Gain on derivative instruments, net | — | 1,041 | — | 1,041 | |||||||||||
| Other income, net | 1,638 | 622 | — | 2,260 | |||||||||||
| Total other revenue | 9,951 | 52,828 | — | 62,779 | |||||||||||
| Other expenses: | |||||||||||||||
| Employee compensation and benefits | 18,667 | 26,429 | — | 45,096 | |||||||||||
| Selling and administrative | 8,269 | 7,599 | — | 15,868 | |||||||||||
| Property operating expenses | 12,670 | — | — | 12,670 | |||||||||||
| Depreciation and amortization | 5,537 | 392 | — | 5,929 | |||||||||||
| Impairment loss on real estate owned | 13,650 | — | — | 13,650 | |||||||||||
| Provision for loss sharing, net | — | 13,472 | — | 13,472 | |||||||||||
| Provision for credit losses, net | 38,245 | (82 | ) | — | 38,163 | ||||||||||
| Total other expenses | 97,038 | 47,810 | — | 144,848 | |||||||||||
| (Loss) income before gain on real estate, income from equity affiliates and income taxes | (39,942 | ) | 10,970 | — | (28,972 | ) | |||||||||
| Gain on real estate | 64 | — | — | 64 | |||||||||||
| Income from equity affiliates | 1,893 | — | — | 1,893 | |||||||||||
| Provision for income taxes | (626 | ) | (2,524 | ) | — | (3,150 | ) | ||||||||
| Net (loss) income | (38,611 | ) | 8,446 | — | (30,165 | ) | |||||||||
| Preferred stock dividends | 10,342 | — | — | 10,342 | |||||||||||
| Net loss attributable to noncontrolling interest | — | — | (3,165 | ) | (3,165 | ) | |||||||||
| Net (loss) income attributable to common stockholders | $ | (48,953 | ) | $ | 8,446 | $ | 3,165 | $ | (37,342 | ) | |||||
| (1) | Includes income (loss) allocated to the noncontrolling interest holders not allocated to the two reportable segments. |
Balance Sheet Segment Information - (Unaudited) (in thousands) | ||||||||
| Structured Business | Agency Business | Consolidated | ||||||
| Assets: | ||||||||
| Cash and cash equivalents | $ | 58,886 | $ | 228,639 | $ | 287,525 | ||
| Restricted cash | 103,077 | 35,305 | 138,382 | |||||
| Loans and investments, net | 11,915,216 | — | 11,915,216 | |||||
| Loans held-for-sale, net | — | 375,797 | 375,797 | |||||
| Capitalized mortgage servicing rights, net | — | 323,887 | 323,887 | |||||
| Securities held-to-maturity, net | — | 157,137 | 157,137 | |||||
| Investments in equity affiliates | 82,762 | — | 82,762 | |||||
| Real estate owned, net | 545,946 | — | 545,946 | |||||
| 12,500 | 73,270 | 85,770 | ||||||
| Other assets | 345,603 | 94,800 | 440,403 | |||||
| Total assets | $ | 13,063,990 | $ | 1,288,835 | $ | 14,352,825 | ||
| Liabilities: | ||||||||
| Debt obligations | $ | 10,699,313 | $ | 359,277 | $ | 11,058,590 | ||
| Allowance for loss-sharing obligations | — | 118,898 | 118,898 | |||||
| Other liabilities | 211,266 | 83,048 | 294,314 | |||||
| Total liabilities | $ | 10,910,579 | $ | 561,223 | $ | 11,471,802 | ||
Reconciliation of Distributable Earnings to GAAP Net (Loss) Income - (Unaudited) ($ in thousands—except share and per share data) | |||||||||||||||
| Quarter Ended | Six Months Ended | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Net (loss) income attributable to common stockholders | $ | (37,342 | ) | $ | 23,952 | $ | (36,713 | ) | $ | 54,389 | |||||
| Adjustments: | |||||||||||||||
| Net (loss) income attributable to noncontrolling | (3,165 | ) | 2,015 | (3,112 | ) | 4,617 | |||||||||
| Income from mortgage servicing rights | (12,110 | ) | (10,930 | ) | (21,770 | ) | (19,061 | ) | |||||||
| Deferred tax benefit | (2,211 | ) | (1,603 | ) | (4,791 | ) | (1,741 | ) | |||||||
| Amortization and write-offs of MSRs | 21,093 | 19,825 | 40,433 | 40,689 | |||||||||||
| Depreciation and amortization | 6,876 | 6,582 | 14,692 | 11,149 | |||||||||||
| Loss on extinguishment of debt | — | — | — | 2,319 | |||||||||||
| Provision for credit losses, net | 40,532 | 8,435 | 19,654 | 9,192 | |||||||||||
| (Gain) loss on derivative instruments, net | (477 | ) | (674 | ) | 821 | (5,371 | ) | ||||||||
| Loss on real estate | 5,388 | 1,857 | 17,917 | 4,667 | |||||||||||
| Stock-based compensation | 3,125 | 2,610 | 9,029 | 8,545 | |||||||||||
| Distributable earnings (1) | $ | 21,709 | $ | 52,069 | $ | 36,160 | $ | 109,394 | |||||||
| Diluted weighted average shares outstanding (1) (2) | 207,661,095 | 209,003,002 | 209,687,157 | 207,938,574 | |||||||||||
| Diluted distributable earnings per share (1) | $ | 0.10 | $ | 0.25 | $ | 0.17 | $ | 0.53 | |||||||
| (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. |
| (2) | For the quarter and six months ended |
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, changes in fair value of GSE-related derivatives that temporarily flow through earnings, deferred tax provision (benefit), CECL provisions for credit losses (adjusted for realized losses as described below), gains/losses on the receipt of real estate from the settlement of loans and subsequent impairment losses on real estate owned prior to the sale of the real estate. The Company also adds back one-time charges such as acquisition costs and one-time gains/losses on the early extinguishment of debt and redemption of preferred stock.
The Company reduces distributable earnings for realized losses in the period management determines that a loan is deemed nonrecoverable in whole or in part. Loans are deemed nonrecoverable upon the earlier of: (1) when the loan receivable is repaid, or in the case of foreclosure, when the underlying asset is sold at which time any impairments and/or cumulative depreciation expense are realized; or (2) 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.
