Arbor Realty Trust — Third Quarter 2026 Earnings Summary

Financial Performance:

• Reported a GAAP net loss of $(85.4) million, or $(0.51) per diluted common share, compared to net income of $38.5 million, or $0.20 per diluted common share in the prior year quarter.
• Distributable loss was $(6.9) million, or $(0.04) per diluted common share, compared to distributable earnings of $72.9 million, or $0.35 per diluted common share in the prior year quarter.
• Distributable earnings excluding $21.7 million of net realized losses from legacy asset resolution equated to $0.08 per diluted common share.
• Total revenue for the quarter was $94.1 million, comprised of $57.5 million in Agency Business revenue and $36.8 million in other revenue sources.
• Agency Business revenue was $57.5 million, down from $64.5 million in the second quarter of 2026.
• Gain on sales, including fee-based services, net was $10.9 million for the quarter, reflecting a margin of 1.12%, compared to $15.2 million and 1.33% in the second quarter of 2026.
• Income from mortgage servicing rights was $11.1 million, reflecting a rate of 1.35% as a percentage of loan commitments, compared to $12.1 million and 1.00% in the second quarter of 2026.
• Fee-based servicing revenue, net was $25.7 million, consisting of $44.1 million in servicing revenue net of $18.4 million in amortization of mortgage servicing rights.
• Recorded a $53.0 million net provision for loan losses associated with CECL for the third quarter of 2026.
• Total allowance for loan losses was $210.1 million at September 30, 2026.
• Recorded $34.1 million of impairments on six real estate owned properties.
• Net interest income was $37.7 million, compared to $38.3 million in the prior year quarter.
• Interest expense was $184.2 million, compared to $184.7 million in the prior year quarter.
• Total assets were $14.24 billion at September 30, 2026, compared to $14.49 billion at December 31, 2025.
• Total liabilities were $11.60 billion at September 30, 2026, compared to $11.43 billion at December 31, 2025.
• Stockholders' equity was $2.55 billion at September 30, 2026, compared to $2.95 billion at December 31, 2025.

Guidance and Future Outlook:

• The Company will continue to evaluate its dividend policy based on market conditions, performance, capital needs, and REIT distribution requirements, with a focus on preserving book value and maximizing long-term shareholder value.
• Management indicated a continued focus on preserving capital and maintaining financial flexibility to address upcoming debt maturities and support the resolution of legacy assets.

Business Segments and Product Lines:

• Agency Business:
  • Loan originations totaled $907.0 million for the quarter, down from $1.08 billion in the second quarter of 2026.
  • Fannie Mae originations were $574.8 million; Freddie Mac originations were $185.7 million; FHA originations were $129.5 million.
  • Total loan sales were $978.2 million, and total loan commitments were $819.2 million.
  • Loans held-for-sale were $236.8 million at September 30, 2026.
  • Fee-based servicing portfolio totaled $36.80 billion at September 30, 2026, with a weighted average fee of 34.7 bps and weighted average life of 5.6 years.
• Structured Business:
  • Structured loan portfolio UPB was approximately $12.00 billion at September 30, 2026, down from $12.11 billion at June 30, 2026.
  • Originations were $459.2 million, and runoff was $574.0 million.
  • The portfolio consisted of 64% Multifamily, 29% SFR, and 2% Construction-Multifamily.
  • Average portfolio balance during the quarter was $12.11 billion with a weighted average yield of 6.84%, down from 7.21% in the second quarter of 2026.
  • The weighted average interest rate including fees was 6.97% at September 30, 2026.
  • The Company modified 6 loans totaling $192.1 million UPB to borrowers experiencing financial difficulty.
  • Foreclosed on one loan with a UPB of $13.2 million and sold five existing REO properties for $39.0 million.
  • Had 32 non-performing loans with a UPB of $647.6 million, compared to 19 non-performing loans with a UPB of $428.8 million at June 30, 2026.
  • Had two non-accrual loans with a UPB of $95.9 million that were less than 60 days past due.

Market and Competitive Landscape:

• The decrease in weighted average yield for the structured portfolio was primarily due to additional delinquencies and rate modifications in the third quarter of 2026.
• The Company is a leading Fannie Mae DUS lender and Freddie Mac Optigo Seller/Servicer, and an approved FHA Multifamily Accelerated Processing (MAP) lender.

Risks and Challenges:

• The Company faces risks related to changes in economic conditions, real estate markets, ability to source new investments, and changes in interest rates and credit spreads.
• The Company recorded significant net realized losses from the resolution of legacy assets, contributing to the distributable loss.
• Upcoming debt maturities and the resolution of legacy assets present capital preservation challenges.
• The Company has 32 non-performing loans and recorded significant impairments on real estate owned.

Management Commentary and Tone:

• Management suspended the quarterly cash dividend on common stock to preserve capital and maintain financial flexibility during this challenging environment.
• The decision reflects a continued focus on preserving book value and maximizing long-term shareholder value.

Other Key Points:

• Closed an $825.0 million collateralized securitization vehicle with enhanced leverage, generating approximately $50 million of additional liquidity. The facility has a two and a half year asset replenishment period.
• Completed an upsized $375.0 million offering of 6.25% convertible senior notes due 2029.
• Used proceeds from the convertible notes offering to redeem $270.0 million of 4.50% senior notes.
• Repurchased approximately 2.1 million shares for $11.6 million concurrently with the convertible notes offering.
• Repurchased approximately 18.9 million shares for $114.3 million pursuant to a prepaid forward stock repurchase transaction.
• The average cost of borrowings for the third quarter of 2026 was 6.66%, up from 6.56% in the second quarter of 2026, primarily due to the convertible senior unsecured notes offering and an increase in the average SOFR rate.
• Debt financing the loan and investment portfolio was $10.75 billion at September 30, 2026, with a weighted average interest rate including fees of 6.69%.
• The Company recorded a $12.4 million net provision for loss sharing associated with CECL for the third quarter of 2026.
• The allowance for loss-sharing obligations was $124.1 million at September 30, 2026.