ARBOR REALTY TRUST INC (ABR)

CIK: 0001253986. SIC: 6798 Real Estate Investment Trusts. Latest 10-K as of: 2026-02-27.

SIC breadcrumb: Finance, Insurance, And Real Estate > Holding And Other Investment Offices > SIC 6798 Real Estate Investment Trusts

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1253986. Latest filing source: 0001253986-26-000019.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-27. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001253986.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-08. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001253986.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001253986-26-000036.

Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high. Filing date: 2026-05-08. Report date: 2026-03-31.

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion in conjunction with the unaudited consolidated interim financial statements, and related notes and the section entitled “Forward-Looking Statements” included herein.

Overview

Through our Structured Business, we invest in a diversified portfolio of structured finance assets in the multifamily, SFR and commercial real estate markets, primarily consisting of bridge loans, in addition to mezzanine loans, junior participating interests in first mortgages and preferred equity. We also invest in real estate-related joint ventures and may directly acquire real property and invest in real estate-related notes and certain mortgage-related securities.

Through our Agency Business, we originate, sell and service a range of multifamily finance products through Fannie Mae and Freddie Mac, Ginnie Mae, FHA and HUD. We retain the servicing rights and asset management responsibilities on substantially all loans we originate and sell under the GSE and HUD programs. We are an approved Fannie Mae DUS lender, seller/servicer nationally, a Freddie Mac Optigo® Conventional Loan and SBL lender, seller/servicer nationally and a HUD MAP and LEAN senior housing/healthcare lender nationally. We also originate and retain the servicing rights on permanent financing loans that are generally underwritten using the guidelines of our existing agency loans sold to the GSEs, which we refer to as “Private Label” loans, and originate and sell finance products through CMBS programs. We either sell the Private Label loans instantaneously or pool and securitize them and sell certificates in the securitizations to third-party investors, while retaining the highest risk bottom tranche certificate of the securitization.

We conduct our operations to qualify as a REIT. A REIT is generally not subject to federal income tax on its REIT-taxable income that is distributed to its stockholders; provided that at least 90% of its taxable income is distributed and provided that certain other requirements are met.

Our operating performance is primarily driven by the following factors:

Net interest income earned on our investments. Net interest income represents the amount by which the interest income earned on our assets exceeds the interest expense incurred on our borrowings. If the yield on our assets increases or the cost of borrowings decreases, this will have a positive impact on earnings. However, if the yield earned on our assets decreases or the cost of borrowings increases, this will have a negative impact on earnings. Net interest income is also directly impacted by the size and performance of our asset portfolio. We recognize the bulk of our net interest income from our Structured Business. Additionally, we recognize net interest income from loans originated through our Agency Business, which are generally sold within 60 days of origination.

Fees and other revenues recognized from originating, selling and servicing mortgage loans through the GSE and HUD programs. Revenue recognized from the origination and sale of mortgage loans consists of gains on sale of loans (net of any direct loan origination costs incurred), commitment fees, broker fees, loan assumption fees and loan origination fees. These gains and fees are collectively referred to as gain on sales, including fee-based services, net. We record income from MSRs at the time of commitment to the borrower, which represents the fair value of the expected net future cash flows associated with the rights to service mortgage loans that we originate, with the recognition of a corresponding asset upon sale. We also record servicing revenue which consists of fees received for servicing mortgage loans, net of amortization on the MSR assets recorded. Although we have long-established relationships with the GSE and HUD agencies, our operating performance would be negatively impacted if our business relationships with these agencies deteriorate. Additionally, we also recognize revenue from originating, selling and servicing our Private Label loans.

One of our core business strategies is to generate additional agency lending opportunities by refinancing our multifamily balance sheet bridge loan portfolio when it is practical and appropriate to do so. We execute this strategy by underwriting the multifamily bridge loans we originate to a potential future agency financing. We then continue to work with our borrowers on this execution through the life cycle of the multifamily bridge loan. When effective, this strategy allows us to recapture refinancing opportunities, deleverage our balance sheet, and generate additional income streams through our capital-light Agency Business.

Income earned from other structured investments. Our other structured investments are primarily comprised of investments in equity affiliates, which represent unconsolidated joint venture investments formed to acquire, develop and/or sell real estate-related assets. Operating results from these investments can be difficult to predict and can vary significantly period-to-period. We also periodically receive distributions from our equity investments. It is difficult to forecast the timing of such payments, which can be substantial in any given quarter. We account for structured transactions within our Structured Business.

Credit quality of our loans and investments, including our servicing portfolio. Effective portfolio management is essential to maximize the performance and value of our loan and investment and servicing portfolios. Maintaining the credit quality of the loans in our portfolios is of critical importance. Loans that do not perform in accordance with their terms may have a negative impact on earnings and liquidity.

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Significant Developments During the First Quarter of 2026

Financing and Capital Markets Activity

•Closed a collateralized securitization vehicle (CLO 21) totaling $762.6 million, of which $674.0 million consisted of investment grade notes and $88.6 million of below investment grade notes were retained by us; and

•We repurchased 4,117,901 shares of our common stock under our share repurchase program at a total cost of $30.7 million and an average cost of $7.46 per share.

Structured Business Activity

•Balance sheet portfolio of $12.00 billion, as loan runoff totaling $861.0 million outpaced loan originations of $767.6 million;

•We modified 13 loans with a total UPB of $478.8 million (see Note 3 for details); and

•We foreclosed on and took back the underlying collateral on three loans with an aggregate net carrying value of $58.8 million and recorded a loss of $1.8 million through provision for credit losses. We sold one of those foreclosed properties, along with an existing REO asset, for $33.0 million and recognized an aggregate loss of $2.1 million through loss on real estate. See Notes 3 and 9 for details.

Agency Business Activity. Servicing portfolio of $36.31 billion (up $107.3 million) with loan originations totaling $707.6 million, which includes $218.5 million of new Agency loans that were recaptured from our Structured Business runoff.

Dividend. We declared a cash dividend of $0.17 per share, a reduction from our previous quarterly dividend of $0.30 per share.

Current Market Conditions, Risks and Recent Trends

During 2025, the Federal Reserve lowered the federal funds rate three times for an aggregate 75-basis point reduction. Current market expectations generally contemplate the potential for an additional rate cut in the fourth quarter of 2026, but those expectations may abate if impacts from recent geopolitical events have a longer lasting effect on the economic environment and inflationary measurements. However, the elevated rate environment has persisted longer than anticipated and could persist even longer if inflation and other key economic indicators do not align with the Federal Reserve’s expectations. While short-term rates have declined, long-term rates remain volatile following the current administration’s adoption of increased tariffs, related litigation, geopolitical developments, including the conflict involving Iran, and broader macroeconomic uncertainty. Expectations for long-term rates in 2026 remain mixed, reflecting uncertainty around long-term inflation, fiscal policy, increased federal spending and larger deficits, including the effects of the July 2025 enactment of the OBBBA, as described below. Accordingly, it remains difficult to predict where short- and long-term rates will settle during 2026.

This prolonged rate environment has resulted, and may continue to result, in higher payment delinquencies and defaults, more loan modifications and foreclosures and declines in real estate values in certain asset classes, which have adversely affected, and may continue to adversely affect, our results of operations, financial condition, business prospects, liquidity and ability to make distributions to stockholders. It has also made it more difficult to resolve delinquent loans, contributing to additional foreclosures and REO assets on our balance sheet. When we take title to assets through foreclosure, we generally seek to dispose of these assets through third-party sales. However, depending on market conditions and asset-specific factors, we may evaluate other alternatives, such as recapitalizations and joint venture structures, intended to optimize recoveries and reduce our REO exposure. These efforts may include enhanced property management, capital improvements and deferred maintenance, re-leasing vacant space, renewing or restructuring leases and other stabilization initiatives designed to improve occupancy, cash flow and marketability.

We continue to apply disciplined underwriting and risk management practices and work closely with borrowers to protect portfolio quality and mitigate potential losses, including, where appropriate, modifying loan terms. However, given the current interest rate environment, we cannot assure that our loan portfolio will continue to perform in accordance with current contractual terms.

An elevated rate environment generally benefits our net interest income because our structured loan portfolio exceeds our corresponding debt balances, the substantial majority of our loan portfolio is floating rate based on SOFR and a meaningful portion of our debt, including senior unsecured notes, is fixed rate. As a result, increases in interest income generally tends to outpace increases in interest expense, and earnings on our cash and escrow balances also benefit from higher rates. These benefits, however, have been increasingly offset by the adverse effects of a prolonged elevated rate environment, including higher delinquencies, more loan modifications and foreclosures, lower loan originations, reduced cash and escrow balances and pressure on certain commercial real estate values, which can result in higher reserves when collateral values are considered insufficient to fully repay loans.

The recent reductions in short-term interest rates have reduced, and are expected to continue to reduce, net interest income on our floating rate loan portfolio and earnings on our cash and escrow balances. For additional information, see “Quantitative and Qualitative Disclosures about Market Risk” below.

Elevated and volatile interest rates, together with geopolitical uncertainty, including the conflict involving Iran, have also disrupted portions of the financial services, real estate and credit markets. These conditions have contributed to weaker performance in certain of

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our legacy assets, leading to increased defaults and delinquencies. If these conditions continue to affect our borrowers and their tenants, or if other risks described in our SEC filings materialize, our liquidity and capital resources could be further adversely affected.

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-02-27. Report date: 2025-12-31.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion in conjunction with the sections of this report entitled “Forward-Looking Statements” and “Risk Factors,” along with the historical consolidated financial statements including related notes, included in this report.

Overview

Through our Structured Business, we invest in a diversified portfolio of structured finance assets in the multifamily, SFR and commercial real estate markets, primarily consisting of bridge loans, in addition to mezzanine loans, junior participating interests in first mortgages and preferred equity. We also invest in real estate-related joint ventures and may directly acquire real property and invest in real estate-related notes and certain mortgage-related securities.

Through our Agency Business, we originate, sell and service a range of multifamily finance products through Fannie Mae and Freddie Mac, Ginnie Mae, FHA and HUD. We retain the servicing rights and asset management responsibilities on substantially all loans we originate and sell under the GSE and HUD programs. We are an approved Fannie Mae DUS lender, seller/servicer nationally, a Freddie Mac Optigo® Conventional Loan and SBL lender, seller/servicer nationally and a HUD MAP and LEAN senior housing/healthcare lender nationally. We also originate and retain the servicing rights on permanent financing loans underwritten using the guidelines of our existing agency loans sold to the GSEs, which we refer to as “Private Label” loans and originate and sell finance products through CMBS programs. We either sell the Private Label loans instantaneously or pool and securitize them and sell certificates in the securitizations to third-party investors, while retaining the highest risk bottom tranche certificate of the securitization.

We conduct our operations to qualify as a REIT. A REIT is generally not subject to federal income tax on its taxable income that is distributed to its stockholders; provided that at least 90% of its taxable income is distributed and provided that certain other requirements are met.

Our operating performance is primarily driven by the following factors:

Net interest income earned on our investments. Net interest income represents the amount by which the interest income earned on our assets exceeds the interest expense incurred on our borrowings. If the yield on our assets increases or the cost of borrowings decreases, this will have a positive impact on earnings. However, if the yield earned on our assets decreases or the cost of borrowings increases, this will have a negative impact on earnings. Net interest income is also directly impacted by the size and performance of our asset portfolio. We recognize the bulk of our net interest income from our Structured Business. Additionally, we recognize net interest income from loans originated through our Agency Business, which are generally sold within 60 days of origination.

Fees and other revenues recognized from originating, selling and servicing mortgage loans through the GSE and HUD programs. Revenue recognized from the origination and sale of mortgage loans consists of gains on sale of loans (net of any direct loan origination costs incurred), commitment fees, broker fees, loan assumption fees and loan origination fees. These gains and fees are collectively referred to as gain on sales, including fee-based services, net. We record income from MSRs at the time of commitment to the borrower, which represents the fair value of the expected net future cash flows associated with the rights to service mortgage loans that we originate, with the recognition of a corresponding asset upon sale. We also record servicing revenue which consists of fees received for servicing mortgage loans, net of amortization on the MSR assets recorded. Although we have long-established relationships with the GSE and HUD agencies, our operating performance would be negatively impacted if our business relationships with these agencies deteriorate. Additionally, we also recognize revenue from originating, selling and servicing our Private Label loans.

One of our core business strategies is to generate additional agency lending opportunities by refinancing our multifamily balance sheet bridge loan portfolio when it is practical and appropriate to do so. We execute this strategy by underwriting the multifamily bridge loans we originate to a potential future agency financing. We then continue to work with our borrowers on this execution through the life cycle of the multifamily bridge loan. When effective, this strategy allows us to recapture refinancing opportunities, deleverage our balance sheet, and generate additional income streams through our capital-light Agency Business.

Income earned from other structured investments. Our other structured investments are primarily comprised of investments in equity affiliates, which represent unconsolidated joint venture investments formed to acquire, develop and/or sell real estate-related assets. Operating results from these investments can be difficult to predict and can vary significantly period-to-period. We also periodically receive distributions from our equity investments. It is difficult to forecast the timing of such payments, which can be substantial in any given quarter. We account for structured transactions within our Structured Business.

Credit quality of our loans and investments, including our servicing portfolio. Effective portfolio management is essential to maximize the performance and value of our loan and investment and servicing portfolios. Maintaining the credit quality of the loans in our portfolios is of critical importance. Loans that do not perform in accordance with their terms may have a negative impact on earnings and liquidity.

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Significant Developments During 2025

Financing and Capital Markets Activity.

•Entered into a $1.22 billion repurchase facility to refinance loans previously held in our CLOs. The facility has a 24-month reinvestment period through March 2027. The facility has an interest rate of SOFR plus 1.85% and matures at the latest maturity date of all purchased assets, which is currently June 2028;

•Terminated five credit and repurchase facilities with a total committed amount of $1.13 billion;

•Issued $500.0 million of 7.875% senior unsecured notes due 2030 and $400.0 million of 8.50% senior unsecured notes due 2028 through private offerings. A portion of the net proceeds were used to repay the outstanding 7.50% convertible senior notes and the 7.75% senior notes, and will be used to repay the 5.00% senior notes due April 2026 totaling $557.5 million;

•Closed two new CLO vehicles (BTR CLO 1 and CLO 20) totaling $1.85 billion, of which $1.62 billion consisted of investment grade notes. We retained $41.0 million of the investment grade notes, along with the below investment grade notes totaling $236.1 million;

•Unwound CLOs 14, 16 and 19, redeeming the remaining $1.56 billion of outstanding notes and paid down outstanding notes on existing securitizations totaling $841.7 million; and

•Raised net proceeds of $70.6 million from the issuance of 5,898,957 shares of common stock under our ATM program at an average price of $11.97 per share.

Structured Business Activity.

•Balance sheet portfolio of $12.11 billion, as loan originations of $3.52 billion outpaced loan runoff totaling $2.21 billion;

•Modified 43 loans with a total UPB of $1.71 billion, of which 36 loans were modified to provide temporary rate relief through a pay and accrual feature, see Note 3 for details;

•Received cash distributions totaling $81.5 million and recognized income of $54.3 million from our equity investments in the Lexford Portfolio ("Lexford") and a residential mortgage banking business, see Note 8 for details; and

•Foreclosed on and took back the underlying collateral on 21 loans with a total net carrying value of $590.5 million and charged-off $52.8 million of specific CECL reserves. We sold the underlying collateral on 8 of these foreclosures with a total net carrying value of $193.1 million. In addition, we sold 2 existing REO assets with a net carrying value of $72.0 million.

Agency Business Activity.

•Servicing portfolio of $36.20 billion (up $2.73 billion) with loan originations totaling $5.07 billion, which includes $669.4 million of new Agency loans that were recaptured from our Structured Business runoff.

Subsequent Event.

•In January and February 2026, we repurchased 2,444,860 shares of our common stock under our share repurchase program at a total cost of $18.0 million and an average cost of $7.38 per share; and

•In 2026, we foreclosed on two loans with a total UPB of $33.9 million.

Current Market Conditions, Risks and Recent Trends

During 2025, the Federal Reserve has lowered the federal funds rate three times totaling a 75-basis point reduction. General consensus is that the Federal Reserve may continue to lower rates during 2026. The high-interest rate environment, that has persisted longer than anticipated, could persist even longer if certain key economic indicators, such as inflation, fail to align with the Federal Reserve’s expectations. Although short-term interest rates have declined, long-term interest rates remain highly volatile since the announcement of the current administration's imposition of increased tariffs and macroeconomic uncertainty. Analysts currently hold mixed expectations regarding the future trajectory of long-term rates in 2026 due to the uncertainty regarding long-term inflation, fiscal policy, increased federal spending and larger deficits as a result of the recent enactment of the OBBBA, as described below.

As a result of the significant volatility in rates, the unpredictable impact of the tariff negotiations, including certain litigations in connection with the tariffs, and the OBBBA, it is very difficult to predict where short and long-term rates will settle during 2026.

This elevated and unpredictable rate environment has resulted in, and may continue to result in, increased payment delinquencies and defaults, increased loan modifications and foreclosures and declining real estate values of certain asset classes, all of which have impacted, and may continue to impact, our future results of operations, financial condition, business prospects and ability to make distributions to our stockholders. Additionally, this high-interest rate environment has limited our ability to resolve delinquent loans,

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leading to additional foreclosures and REO assets on our balance sheet, all of which could have a further material adverse effect on our future results of operations, financial condition, liquidity and ability to make distributions to our stockholders. When we foreclose on assets as REO, we typically seek to reposition them to maximize value and support an orderly disposition. Our repositioning efforts may include implementing enhanced property management, completing targeted capital improvements and deferred maintenance, re-leasing vacant space, renewing or restructuring leases, and pursuing other stabilization initiatives intended to improve occupancy, cash flow and marketability. Depending on market conditions and asset-specific considerations, we generally pursue a disposition strategy through sale to third parties, and in certain circumstances may explore alternative exit options such as recapitalizations, joint venture arrangements or other transactions intended to optimize recoveries and reduce our REO exposure.

We employ rigorous risk management and underwriting practices to proactively maintain the quality of our loan portfolio and work very closely with borrowers to mitigate potential losses, while safeguarding the integrity of our portfolio, which may result in the continuation of modifying loan terms. Given the current elevated interest rate environment, we cannot guarantee that our loan portfolio will continue to perform under the current loan terms.

In general, a rising or high-interest rate environment positively impacts our net interest income since our structured loan portfolio exceeds our corresponding debt balances, and the vast majority of our loan portfolio is floating rate based on SOFR. Additionally, since a sizable portion of our debt consists of fixed-rate instruments (such as senior unsecured notes), as compared to our structured loan portfolio, the increase in interest income from high interest rates tends to outpace the rise in interest expense on our debt. Furthermore, our earnings on escrows and cash balances also benefit from an elevated rate environment. However, the prolonged period of elevated interest rates has also led to a significant increase in loan delinquencies, modifications, foreclosures and decreases in loan originations and cash and escrow balances, which is having, and may continue to have, a negative impact on our net interest income. Additionally, the prolonged high-interest rate environment has contributed to a decline in certain commercial real estate values, leading to increased reserves, when the collateral value is considered insufficient to fully repay the loans.

The above mentioned short-term interest rate reductions have resulted, and will continue to result, in a decrease in the net interest income on our floating rate loan book and reductions in the earnings on our cash and escrow balances. For additional details, see “Quantitative and Qualitative Disclosures about Market Risk” below.

The elevated and volatile interest rates, along with geopolitical uncertainty, has caused some disruptions in certain segments of the financial services, real estate and credit markets. As stated earlier, this environment has also caused a decrease in the performance of certain of our assets, leading to increased defaults and delinquencies. If our borrowers and their tenants continue to be impacted by these adverse economic and market conditions, or by the other risks disclosed in our filings with the SEC, it could have a material adverse effect on our liquidity and capital resources. Despite these periodic disruptions, we have been successful in raising capital through various vehicles, when needed, to continue to operate and strengthen our business. Additionally, although the majority of our cash is currently on deposit with major financial institutions, our balances often exceed insured limits. We limit the exposure relating to these balances by diversifying them among various counterparties. Generally, deposits may be redeemed upon demand and are maintained at financial institutions with reputable credit and, therefore, we believe we bear minimal credit risk.

We are a national originator with Fannie Mae and Freddie Mac, and the GSEs remain the most significant providers of capital to the multifamily market. FHFA set its 2026 Caps for Fannie Mae and Freddie Mac at $88 billion for each enterprise for a total opportunity of $176 billion, which is an increase from its 2025 Caps of $73 billion for each enterprise. FHFA stated they will continue to monitor the market and reserves the right to increase the 2026 Caps if warranted, however, they will not reduce the 2026 Caps if the market is smaller than initially projected. To promote affordable housing preservation, loans classified as supporting workforce housing properties will be exempt from the 2026 Caps. Workforce housing loans preserve rents at affordable levels in multifamily properties, typically without the use of public subsidies. The 2026 Caps will continue to mandate that at least 50% be directed towards mission driven, affordable housing, with affordability levels corresponding to 80%-120% of area median income, depending on the market. Our originations with the GSEs are highly profitable executions as they provide significant gains from the sale of our loans, non-cash gains related to MSRs, and servicing revenues. We are also unsure whether FHFA will impose stricter limitations on GSE multifamily production volume in the future.

On July 4, 2025, the OBBBA was enacted into law. This comprehensive legislation introduces wide-ranging changes to federal tax policy, entitlement programs, immigration enforcement and infrastructure investment. The OBBBA includes potential changes to broader corporate tax provisions that may affect certain aspects of our business operations and tax exposure over the course of the next few years. Additionally, various indirect components of the legislation, such as modifications to entitlement funding, increased federal spending and shifts in fiscal and regulatory priorities, may influence the capital markets, interest rate environment and demand for commercial real estate finance. We are reviewing the potential implications of the new law, including interpretive guidance related to corporate taxation, and as a result of the complexity of the legislation and the evolving nature of its implementation, it is difficult to predict the effects of this legislation on our business, financial condition, results of operations or the real estate markets in general.

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Changes in Financial Condition

Assets – Comparison of balances at December 31, 2025 to December 31, 2024:

Our Structured loan and investment portfolio balance was $12.11 billion and $11.30 billion at December 31, 2025 and 2024, respectively. This increase was primarily due to loan originations exceeding loan runoff by $1.31 billion (see below for details), partially offset by loans we foreclosed on and received ownership of the underlying collateral as REO assets.

The portfolio had a weighted average current interest pay rate of 6.49% and 6.90% at December 31, 2025 and 2024, respectively. Including certain fees earned and costs, the weighted average current interest rate was 7.08% and 7.80% at December 31, 2025 and 2024, respectively. Our debt that finances our Structured loan and investment portfolio totaled $10.46 billion and $9.46 billion at December 31, 2025 and 2024, respectively, with a weighted average funding cost of 6.16% and 6.55%, respectively, which excludes financing costs. Including financing costs, the weighted average funding rate was 6.45% and 6.88% at December 31, 2025 and 2024, respectively.

Activity from our Structured Business portfolio is comprised of the following ($ in thousands):

Year Ended December 31,

2025

2024

Loans originated

$

3,523,538 

$

1,425,799 

Number of loans

98

170

Weighted average interest rate

8.42 

%

8.93 

%

Loan runoff

$

2,213,378 

$

2,691,583 

Number of loans

119

156

Weighted average interest rate

8.46 

%

8.51 

%

Loans modified

$

1,712,203 

$

3,712,804 

Number of loans

43

99

Loans extended

$

5,139,692 

$

5,998,103 

Number of loans

294

318

Loans held-for-sale from the Agency Business decreased $26.7 million, primarily from loan sales exceeding originations by $30.2 million as noted in the following table. Activity from our Agency Business portfolio is comprised of the following ($ in thousands):

Year Ended December 31, 2025

Loan Originations

Loan Sales

Fannie Mae

$

2,982,659 

$

2,850,697 

Freddie Mac

1,924,773 

2,081,749 

FHA

78,145 

128,282 

Private Label

44,925 

— 

SFR - Fixed Rate

43,762 

43,762 

Total

$

5,074,264 

$

5,104,490 

Investments in equity affiliates decreased $18.3 million, primarily due to $22.0 million in distributions received from the completed sale of the residential mortgage banking business.

Real estate owned increased $322.4 million, primarily due to the foreclosure of sixteen multifamily bridge loans totaling $441.0 million, through which we took back the underlying collateral, partially offset by the sale of five multifamily properties.

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Liabilities – Comparison of balances at December 31, 2025 to December 31, 2024:

Credit and repurchase facilities increased $1.59 billion, primarily due to refinancing loans from the unwind of three CLOs and loan originations exceeding runoff in our Structured Business, partially offset by the issuance of BTR CLO 1 and CLO 20.

Securitized debt decreased $1.15 billion, primarily due to the unwind of three CLOs totaling $1.56 billion and paydowns on our existing securitizations of $841.7 million, partially offset by the issuances of BTR CLO 1 and CLO 20 where we issued $1.46 billion of notes to third-party investors.

Senior unsecured notes increased $792.9 million, primarily due to our issuance of $900.0 million of senior unsecured notes, partially offset by the settlement of our $95.0 million 7.75% senior unsecured notes.

In August 2025, we fully redeemed our 7.50% convertible senior notes with a remaining outstanding balance of $287.5 million with a portion of the net proceeds received from our 7.875% senior unsecured notes that were issued in July 2025.

Notes payable - real estate owned increased $148.1 million, primarily due to the addition of notes payable totaling $197.2 million on new REO assets and financing received on an existing REO asset, partially offset by the payoff of $49.1 million of notes payable associated with the sale of REO assets.

Equity

See Note 17 for details of our stock transactions, dividends declared and deferred compensation transactions during 2025.

Agency Servicing Portfolio

The following table sets forth the characteristics of our loan servicing portfolio collateralizing our mortgage servicing rights and servicing revenue ($ in thousands):

December 31, 2025

Product

Portfolio UPB

Loan Count

Wtd. Avg. Age of Portfolio (years)

Wtd. Avg. Life of

Portfolio

(years)

Interest Rate Type

Wtd. Avg. Note Rate

Annualized Prepayments as a % of Portfolio (1)

Delinquencies as a % of Portfolio (2)

Fixed

Adjustable

Fannie Mae

$

24,085,960 

2,702

4.2

5.5

97 

%

3 

%

4.68 

%

3.58 

%

2.59 

%

Freddie Mac

7,455,088 

1,109

3.1

5.9

90 

%

10 

%

4.98 

%

3.63 

%

3.96 

%

Private Label

2,558,048 

159

4.4

4.5

100 

%

— 

4.16 

%

0.44 

%

1.35 

%

FHA

1,549,483 

107

4.3

19.1

100 

%

— 

3.91 

%

1.11 

%

— 

Bridge

277,738 

3

3.0

2.2

85 

%

15 

%

6.31 

%

— 

— 

SFR - Fixed Rate

277,490 

51

3.3

4.0

100 

%

— 

5.62 

%

2.42 

%

1.62 

%

Total

$

36,203,807 

4,131

4.0

6.1

96 

%

4 

%

4.69 

%

3.22 

%

2.65 

%

December 31, 2024

Fannie Mae

$

22,730,056 

2,644

3.9

6.4

96 

%

4 

%

4.60 

%

2.19 

%

1.27 

%

Freddie Mac

6,077,020 

1,159

3.3

6.8

86 

%

14 

%

4.91 

%

5.78 

%

3.63 

%

Private Label

2,605,980 

161

3.4

5.5

100 

%

— 

4.15 

%

— 

0.43 

%

FHA

1,506,948 

106

3.6

19.2

100 

%

— 

3.79 

%

— 

— 

Bridge

278,494

3

2.0

3.0

85 

%

15 

%

6.41 

%

— 

— 

SFR - Fixed Rate

271,859 

52

2.8

4.4

100 

%

— 

5.47 

%

9.02 

%

1.66 

%

Total

$

33,470,357 

4,125

3.7

6.9

95 

%

5 

%

4.60 

%

2.61 

%

1.57 

%

________________________________________

(1)Prepayments reflect loans repaid prior to six months from loan maturity. The majority of our loan servicing portfolio has a prepayment protection term and therefore, we may collect a prepayment fee which is included as a component of servicing revenue, net. See Note 5 for details.

(2)Delinquent loans reflect loans that are contractually 60 days or more past due. At December 31, 2025 and 2024, delinquent loans totaled $959.0 million and $524.5 million, respectively. At December 31, 2025, there were five loans totaling $56.0 million in bankruptcy and nineteen loans totaling $176.5 million were foreclosed. At December 31, 2024, there were two loans totaling $4.8 million in bankruptcy and six loans totaling $28.2 million were foreclosed.

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Our Agency Business servicing portfolio represents commercial real estate loans, which are generally transferred or sold within 60 days from the date the loan is funded. Primarily all loans in our servicing portfolio are collateralized by multifamily properties. In addition, we are generally required to share in the risk of any losses associated with loans sold under the Fannie Mae DUS program, see Note 12.

Comparison of Results of Operations for Years Ended December 31, 2025 and 2024

The following table provides our consolidated operating results ($ in thousands):

Year Ended December 31,

Increase / (Decrease)

2025

2024

Amount

Percent

Interest income

$

940,008 

$

1,167,872 

$

(227,864)

(20)

%

Interest expense

701,836 

804,615 

(102,779)

(13)

%

Net interest income

238,172 

363,257 

(125,085)

(34)

%

Other revenue:

Gain on sales, including fee-based services, net

70,669 

74,932 

(4,263)

(6)

%

Mortgage servicing rights

54,532 

51,272 

3,260 

6

%

Servicing revenue, net

109,617 

125,896 

(16,279)

(13)

%

Property operating income

21,347 

7,226 

14,121 

195

%

Gain (loss) on derivative instruments, net

1,259 

(8,543)

9,802 

nm

Other income, net

14,801 

8,083 

6,718 

83

%

Total other revenue

272,225 

258,866 

13,359 

5

%

Other expenses:

Employee compensation and benefits

174,145 

181,694 

(7,549)

(4)

%

Selling and administrative

59,805 

54,931 

4,874 

9

%

Property operating expenses

27,980 

7,394 

20,586 

nm

Depreciation and amortization

23,214 

9,555 

13,659 

143

%

Impairment loss on real estate owned

20,500 

— 

20,500 

nm

Provision for loss sharing, net

24,259 

11,782 

12,477 

106

%

Provision for credit losses, net

42,696 

68,543 

(25,847)

(38)

%

Total other expenses

372,599 

333,899 

38,700 

12

%

Income before extinguishment of debt, (loss) gain on real estate, income from equity affiliates and income taxes

137,798 

288,224 

(150,426)

(52)

%

Loss on extinguishment of debt

(2,919)

(412)

(2,507)

nm

(Loss) gain on real estate

(9,151)

3,813 

(12,964)

nm

Income from equity affiliates

50,880 

5,772 

45,108 

nm

Provision for income taxes

(18,779)

(13,478)

(5,301)

39

%

Net income

157,829 

283,919 

(126,090)

(44)

%

Preferred stock dividends

41,369 

41,369 

— 

—

Net income attributable to noncontrolling interest

9,033 

19,278 

(10,245)

(53)

%

Net income attributable to common stockholders

$

107,427 

$

223,272 

$

(115,845)

(52)

%

________________________________________

nm – not meaningful

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The following table presents the average balance of our Structured Business interest-earning assets and interest-bearing liabilities, associated interest income (expense) and the corresponding weighted average yields ($ in thousands):

Year ended December 31,

2025

2024

Average

Carrying

Value (1)

Interest

Income /

Expense

W/A Yield /

Financing

Cost (2)

Average

Carrying

Value (1)

Interest

Income /

Expense

W/A Yield /

Financing

Cost (2)

Structured Business interest-earning assets:

Bridge loans

$

11,084,014 

$

827,404 

7.46 

%

$

11,593,718 

$

1,045,057 

8.99 

%

Mezzanine

270,052 

27,322 

10.12 

%

264,241 

27,414 

10.35 

%

Preferred equity investments

165,157 

16,925 

10.25 

%

117,131 

9,082 

7.73 

%

Other

114,049 

12,421 

10.89 

%

4,601 

481 

10.43 

%

Core interest-earning assets

11,633,272 

884,072 

7.60 

%

11,979,691 

1,082,034 

9.01 

%

Cash equivalents

193,730 

6,861 

3.54 

%

624,908 

30,729 

4.90 

%

Total interest-earning assets

$

11,827,002 

$

890,933 

7.53 

%

$

12,604,599 

$

1,112,763 

8.80 

%

Structured Business interest-bearing liabilities:

Credit and repurchase facilities

$

4,111,154 

$

304,341 

7.40 

%

$

2,827,184 

$

235,909 

8.32 

%

CLO

3,787,182 

247,124 

6.53 

%

5,762,959 

420,137 

7.27 

%

Unsecured debt

1,670,096 

111,281 

6.66 

%

1,564,112 

98,187 

6.26 

%

Trust preferred

154,336 

11,670 

7.56 

%

154,336 

13,205 

8.53 

%

Q Series securitization

26,501 

2,225 

8.40 

%

172,965 

14,230 

8.20 

%

Total interest-bearing liabilities

$

9,749,269 

676,641 

6.94 

%

$

10,481,556 

781,668 

7.44 

%

Net interest income

$

214,292 

$

331,095 

________________________________________

(1)Based on UPB for loans, amortized cost for securities and principal amount for debt.

(2)Weighted average yield calculated based on annualized interest income or expense divided by average carrying value.

Net Interest Income

The decrease in interest income was mainly due to a $221.8 million decrease from our Structured Business. The decline was primarily due to a decrease in the average yield on core interest-earning assets and, to a lesser extent, a decrease in the average balance of our core interest-earning assets (loan runoff exceeded loan originations in 2024) and lower average bank balances. The decrease in the average yield was mainly from a decrease in SOFR, the reversal of interest that was previously accrued on modified loans and a reduction in back interest earned on delinquent and modified loans, as well as an increase in new delinquencies and modified loans at lower rates.

The decrease in interest expense was mainly due to a $105.0 million decrease from our Structured Business, primarily due to a decline in the average balance of our interest-bearing liabilities (from a decrease in the average loan portfolio and note paydowns in our securitizations) and a reduction in the average cost of interest-bearing liabilities (mainly from a decrease in SOFR).

Agency Business Revenue

The decrease in gain on sales, including fee-based services, net was primarily due to a 15% decrease in the sales margin from 1.63% to 1.38%, partially offset by an 11% increase in loan sales volume ($494.8 million). The decrease in the sales margin was mainly due to the sales volume product mix and larger portfolio deals in 2025 that produced lower margins.

The increase in income from MSRs was primarily due to a 15% increase in loan commitment volume ($659.9 million), partially offset by a 7% decrease in the MSR rate from 1.15% to 1.07%. The decrease in the MSR rate was mainly due to a decrease in the Fannie Mae MSR rates from lower servicing rates on newer loans, as a result of larger portfolio deals in 2025 that produced lower MSR rates.

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The decrease in servicing revenue, net was primarily due to a decrease in earnings on escrow balances from lower average balances and a decrease in the applicable interest rate, partially offset by an increase in servicing fees due to growth in our servicing portfolio.

Other Income (Loss)

The increases in property operating income and expenses were due to the addition of several new REO assets, which also resulted in an increase in depreciation and amortization.

The gains and losses on derivative instruments in 2025 and 2024 were related to changes in the fair values of our forward sale commitments and swaps held by our Agency Business as a result of changes in market interest rates.

The increase in other income, net was primarily due to increases in the fair values of our Private Label loans and loan fees from higher loan originations and modified loans.

Other Expenses

The decrease in employee compensation and benefits expense was primarily due to decreases in commissions and incentive compensation from lower GSE/Agency loan sales volume and bonus allocation targets.

The increase in selling and administrative expenses was primarily due to increases in professional fees and other general corporate expenses, such as business development and travel related costs.

In 2025, we recorded a $20.5 million impairment loss related to certain REO assets that we acquired through foreclosure, which represents the extent to which the carrying value exceeded its estimated fair value.

The increase in the provision for loss sharing, net primarily reflects larger specific loan impairment reserves taken in the current year period.

The decrease in the provision for credit losses, net primarily reflects a decrease in specifically impaired loans and a decrease in general reserves as a result of improvements in the forecasted outlook for commercial real estate, as compared to the prior year forecasted outlook, partially offset by additional provisions recorded upon foreclosure of REO assets.

Loss on Extinguishment of Debt

The loss on extinguishment of debt in both 2025 and 2024 reflects deferred financing fees recognized in connection with the unwind of CLOs.

(Loss) Gain on Real Estate

The loss on real estate in 2025 is comprised of a $4.9 million loss on below market debt related to financing the sale of several REO assets and a $4.3 million net loss on the foreclosure and sale of REO assets. In 2024, we sold a real estate owned asset for $14.2 million and recognized a $3.8 million gain.

Income from Equity Affiliates

Income from equity affiliates in 2025 primarily reflects $56.0 million of income recognized related to the cash distributions received from our Lexford joint venture, partially offset by losses from our investments in AMAC III and a residential mortgage banking business totaling $5.3 million; while income in 2024 primarily reflects $9.0 million in distributions received from our Lexford joint venture, partially offset by losses totaling $3.5 million from our investments in AMAC III and a residential mortgage banking business.

Provision for Income Taxes

In 2025, we recorded a tax provision of $18.8 million, which consisted of a current tax provision of $15.0 million and a deferred tax provision of $3.8 million. In 2024, we recorded a tax provision of $13.5 million, which consisted of a current tax provision of $25.1 million and a deferred tax benefit of $11.6 million.

Net Income Attributable to Noncontrolling Interest

The noncontrolling interest relates to the outstanding operating partnership units (“OP Units”) issued as part of the 2016 acquisition of ACM’s agency platform. There were 16,169,858 and 16,293,589 OP Units outstanding at December 31, 2025 and 2024, respectively, which represented 7.6% and 7.9% of our outstanding stock at December 31, 2025 and 2024, respectively.

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Table of Contents

Comparison of Results of Operations for Years Ended December 31, 2024 and 2023

For a discussion of our results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023, please refer to Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on February 21, 2025, and is available on the SEC’s website at www.sec.gov and the “Investor Relations” section of our website at www.arbor.com.

Liquidity and Capital Resources

Sources of Liquidity. Liquidity is a measure of our ability to meet our potential cash requirements, including ongoing commitments to repay borrowings, satisfaction of collateral requirements under the Fannie Mae DUS risk-sharing agreement and, as an approved designated seller/servicer of Freddie Mac’s SBL program, operational liquidity requirements of the GSE agencies, fund new loans and investments, fund operating costs and distributions to our stockholders, fund capital expenditures and other property level costs associated with REO assets (including tenant improvements and rehabilitation/ renovation costs) and to fund draws due under unfunded loan commitments, as well as other general business needs. Our primary sources of funds for liquidity consist of proceeds from equity and debt offerings, proceeds from CLOs and securitizations, debt facilities and cash flows from operations. We closely monitor our liquidity position and believe our existing sources of funds and access to additional liquidity will be adequate to meet our liquidity needs.

The elevated and volatile interest rates, along with geopolitical uncertainty, has caused some disruptions in certain segments of the financial services, real estate and credit markets. As stated earlier, this environment has also caused a decrease in the performance of certain of our assets, leading to increased delinquencies, defaults and foreclosures. If our borrowers and their tenants continue to be impacted by these adverse economic and market conditions, or by the other risks disclosed in our filings with the SEC, it could have a material adverse effect on our liquidity, capital resources and cash flows.

As described in Note 11, certain of our repurchase facilities include margin call provisions associated with changes in interest spreads which are designed to limit the lenders credit exposure. If we experience significant decreases in the value of the properties serving as collateral under these repurchase agreements, which is set by the lenders based on current market conditions, the lenders have the right to require us to repay all, or a portion, of the funds advanced, or provide additional collateral. While we expect to extend or renew all of our facilities as they mature, we cannot provide assurance that they will be extended or renewed on as favorable terms.

We had $10.68 billion in total structured debt outstanding at December 31, 2025. Of this total, $5.69 billion, or 54%, does not contain mark-to-market provisions and is comprised of non-recourse securitized debt, senior unsecured debt and junior subordinated notes. The remaining $4.99 billion of debt is in credit and repurchase facilities with several different banks that we have long-standing relationships with. At December 31, 2025, we had $1.91 billion of debt from credit and repurchase facilities that were subject to margin calls related to changes in interest spreads.

In addition to our ability to extend our credit and repurchase facilities and raise funds from equity and debt offerings, we also have a $36.20 billion agency servicing portfolio at December 31, 2025, which is mostly prepayment protected, and escrow/cash balances that generates approximately $200 million per year in recurring gross cash flow.

To maintain our status as a REIT under the Internal Revenue Code, we must distribute annually at least 90% of our REIT-taxable income. These distribution requirements limit our ability to retain earnings and thereby replenish or increase capital for operations. However, we believe that our capital resources and access to financing will provide us with financial flexibility and market responsiveness at levels sufficient to meet current and anticipated capital and liquidity requirements.

Cash Flows. Cash flows provided by operating activities totaled $372.4 million during 2025 and consisted primarily of net income (adjusted for the increase in CECL reserves of $67.0 million) of $224.8 million, cash distributions of $59.0 million received from our Lexford investment and net cash inflows of $23.1 million from loan sales exceeding loan originations in our Agency Business.

Cash flows used in investing activities totaled $1.28 billion during 2025. Loan and investment activity (originations and payoffs/paydowns) comprise the majority of our investing activities. Loan originations from our Structured Business totaling $3.69 billion, net of payoffs and paydowns of $2.42 billion, resulted in net cash outflows of $1.27 billion.

Cash flows provided by financing activities totaled $798.8 million during 2025 consisted primarily of net cash inflows of $1.64 billion from debt facility activities (financed loan originations were greater than facility paydowns), $805.0 million cash inflow from senior unsecured notes (proceeds exceeded payoffs) and net cash inflows of $101.7 million from notes payable - REO activities (proceeds exceeded payoffs and paydowns), partially offset by $1.15 billion of net securitized debt activity (payoffs and paydowns exceeded proceeds), $319.9 million of distributions to our stockholders and OP Unit holders and $287.5 million payoff of our convertible notes.

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Table of Contents

Unencumbered Assets. At December 31, 2025, we had total unencumbered assets with a carrying value of $3.23 billion, consisting of cash and cash equivalents of $482.9 million, loans of $816.8 million, securitization investments of $1.18 billion, MSRs of $340.8 million and $402.2 million of other assets not encumbered by any portion of secured indebtedness. Our unencumbered assets to unsecured debt ratio was 1.57x at December 31, 2025, or 1.72x after the payoff of our 5.00% senior notes due April 2026, compared to the required minimum of 1.20x.

Agency Business Requirements. The Agency Business is subject to supervision by certain regulatory agencies. Among other things, these agencies require us to meet certain minimum net worth, operational liquidity and restricted liquidity collateral requirements, purchase and loss obligations and compliance with reporting requirements. Our adjusted net worth and operational liquidity exceeded the agencies’ requirements at December 31, 2025. Our restricted liquidity and purchase and loss obligations were satisfied with letters of credit totaling $75.0 million and cash. See Note 15 for details about our performance regarding these requirements.

We also enter into contractual commitments with borrowers providing rate lock commitments while simultaneously entering into forward sale commitments with investors. These commitments are outstanding for short periods of time (generally less than 60 days) and are described in Note 13.

Debt Facilities. We maintain various forms of short-term and long-term financing arrangements. Borrowings underlying these arrangements are primarily secured by a significant amount of our loans and investments and substantially all our loans held-for-sale. The following is a summary of our debt facilities ($ in thousands):

December 31, 2025

Debt Instruments

Commitment

UPB (1)

Available

Maturity Dates (2)

Structured Business

Credit and repurchase facilities (3)

$

7,481,388 

$

4,770,994 

$

2,710,394 

2026 - 2028

Securitized debt (4)

3,485,786 

3,485,786 

— 

2026 - 2029

Senior unsecured notes

2,050,000 

2,050,000 

— 

2026 - 2030

Junior subordinated notes

154,336 

154,336 

— 

2034 - 2037

Notes payable - real estate owned

222,965 

222,965 

— 

2026 - 2027

Structured Business total

13,394,475 

10,684,081 

2,710,394 

Agency Business

Credit and repurchase facilities (3)(5)

1,775,000 

390,713 

1,384,287 

2026 - 2027

Consolidated total

$

15,169,475 

$

11,074,794 

$

4,094,681 

________________________________________

(1)Excludes the impact of deferred financing costs.

(2)See Note 15 for a breakdown of debt maturities by year. These maturity dates exclude extension options.

(3)Commitment totals include available overadvances.

(4)Maturity dates represent the weighted average remaining maturity based on the underlying collateral at December 31, 2025.

(5)The $750 million As Soon as Pooled ® Plus (“ASAP”) agreement we have with Fannie Mae has no expiration date.

We utilize our credit and repurchase facilities primarily to finance our loan originations on a short-term basis prior to loan securitizations, including through CLOs. The timing, size and frequency of our securitizations impact the balances of these borrowings

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and produce some fluctuations. The following table provides additional information regarding the balances of our borrowings ($ in thousands):

Quarter Ended

Quarterly Average UPB

End of Period UPB

Maximum UPB at Any Month End

December 31, 2025

$

4,917,924 

$

5,161,707 

$

5,556,285 

September 30, 2025

4,633,344 

4,133,965 

5,553,722 

June 30, 2025

4,846,239 

4,730,120 

4,922,270 

March 31, 2025

3,609,646 

4,791,967 

4,803,572 

December 31, 2024

3,412,416 

3,607,907 

3,793,231 

September 30, 2024

3,082,185 

3,264,033 

3,299,414 

June 30, 2024

3,078,714 

3,167,067 

3,280,998 

March 31, 2024

3,010,216 

2,921,206 

3,132,279 

December 31, 2023

3,274,139 

3,242,938 

3,251,330 

September 30, 2023

3,432,725 

3,398,451 

3,463,825 

June 30, 2023

3,565,377 

3,588,538 

3,677,755 

March 31, 2023

3,691,191 

3,662,756 

3,696,760 

Our debt facilities, including their restrictive covenants, are described in Note 11.

Off-Balance-Sheet Arrangements. At December 31, 2025, we had no off-balance-sheet arrangements.

Inflation. During 2025, the Federal Reserve has lowered the federal funds rate three times totaling a 75-basis point reduction. General consensus is that the Federal Reserve may continue to lower rates during 2026. This high-interest rate environment, that has persisted longer than anticipated, could persist even longer if certain key economic indicators, such as inflation, fail to align with the Federal Reserve’s expectations. Although short-term interest rates have declined, long-term interest rates remain highly volatile since the announcement of the current administrations imposition of increased tariffs and macroeconomic uncertainty. Analysts currently hold mixed expectations regarding the future trajectory of long-term rates in 2026 due to the uncertainty regarding long-term inflation, fiscal policy, increased federal spending and larger deficits as a result of the recent enactment of the OBBBA. As a result of the significant volatility in rates, the unpredictable impact of the tariff negotiations, including certain litigations in connection with the tariffs, and the OBBBA, it is very difficult to predict where short and long-term rates will settle during 2026.

This elevated and unpredictable rate environment has resulted in, and may continue to result in, increased payment delinquencies and

defaults, increased loan modifications and foreclosures and declining real estate values of certain asset classes, all of which have

impacted, and may continue to impact, our future results of operations, financial condition, business prospects and ability to make

distributions to our stockholders. Additionally, this high-interest rate environment has limited our ability to resolve delinquent loans, leading to additional foreclosures and REO assets on our balance sheet, all of which could have a further material adverse effect on our future results of operations, financial condition, liquidity and ability to make distributions to our stockholders.

For additional details, please see “Current Market Conditions, Risks and Recent Trends” above and “Quantitative and Qualitative Disclosures about Market Risk” below.

Derivative Financial Instruments

We enter into derivative financial instruments in the normal course of business to manage the potential loss exposure caused by fluctuations of interest rates. See Note 13 for details.

Critical Accounting Estimates

Management’s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification(TM), the authoritative reference for accounting principles generally accepted in the U.S. (“GAAP”). The preparation of financial statements in conformity with GAAP requires the use of estimates and assumptions that could affect the reported amounts in our consolidated financial statements. Actual results could differ from these estimates.

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A summary of our significant accounting policies is presented in Note 2. Many of these accounting policies require judgment and the use of estimates and assumptions when applying these policies in the preparation of our consolidated financial statements. The accounting estimates requiring complex judgment that we consider to be most critical to an investor’s understanding of our financial results and condition are included in our allowance for credit losses accounting policy. Each quarter, we assess these estimates and assumptions based on several factors, including historical experience, which we believe to be reasonable under the circumstances. These estimates are subject to change in the future if any of the underlying assumptions or factors change. Our allowance for credit loss estimate is critical because it requires significant judgment in applying the CECL model, including judgments regarding portfolio pooling, selection of key model inputs and macroeconomic variables, the reasonable and supportable forecast period and the manner in which expected losses revert to historical experience. The allowance for credit loss is recorded for our structured loans and investments (including unfunded loan commitments), loss-sharing obligations related to the Fannie Mae DUS program and held-to-maturity debt securities and reflects expected credit losses over the contractual life of the applicable asset or exposure, based on information about past events, current conditions and reasonable and supportable forecasts.

For pooled assets that share similar risk characteristics, we use a third-party CECL model that incorporates historical loss information and produces probability of default and loss given default metrics to develop loss factors (the “general reserve”). In applying this model, management uses judgment to determine appropriate portfolio pools and to select and evaluate the relevance of forecast inputs, which currently include commercial real estate price indices, unemployment rates and interest rates. We currently use a one-year reasonable and supportable forecast period, and for periods beyond the forecast horizon we generally revert expected losses to historical experience using a straight-line method. We may also apply adjustments to reflect differences in the risk characteristics of our current portfolio (including loan-to-value and debt service coverage ratios, among other factors) and may apply qualitative adjustments based on internal and external information, including loan- and property-specific developments and market conditions (such as refinance activity, planned sale, loan modifications and bankruptcy).

For assets that no longer share similar risk characteristics with pooled assets, and for certain loans evaluated on an individual basis, we may determine that a loan is collateral dependent and measure expected credit losses using the CECL practical expedient based on the difference between the fair value of the collateral and the amortized cost basis of the loan, adjusted for estimated costs to sell when repayment is dependent on a sale rather than operations. If foreclosure is probable, expected credit losses are measured using the fair value of the collateral as of the reporting date. Estimating collateral fair value involves significant judgment and may be based on third-party appraisals and other valuation information, including assumptions related to capitalization and market discount rates and the borrower’s operating income and cash flows, as well as whether the valuation is based on “as-is” or “stabilized value.”

Our allowance for credit loss also includes expected credit losses associated with unfunded loan commitments, which reflect our obligation to extend credit as borrowers meet certain requirements. Expected credit losses related to these unfunded commitments are assessed and adjusted quarterly and correspond to the associated outstanding loans. In addition, we may modify loans to borrowers experiencing financial difficulty, including through payment deferrals, term extensions, principal forgiveness and/or interest rate reductions. Such modifications are considered in our allowance for credit loss estimate under the same CECL methodology applied to other loans.

Because these estimates are subject to change as facts, conditions, forecasts and the composition and risk characteristics of our portfolio change, changes in these judgments and assumptions can significantly affect expected credit losses and the amount of the allowance for credit loss recorded in our consolidated financial statements.

Non-GAAP Financial Measures

Distributable Earnings. We are presenting distributable earnings because we believe it is an important supplemental measure of our 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. We consider distributable earnings in determining our quarterly dividend and believe that, over time, distributable earnings is a useful indicator of our dividends per share.

We define 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), and gains/losses on the receipt of real estate from the settlement of loans (prior to the sale of the real estate). We also add back one-time charges such as acquisition costs and one-time gains/losses on the early extinguishment of debt and redemption of preferred stock.

We reduce distributable earnings for realized losses in the period we determine 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 settled (i.e., when the loan is repaid, or in the case of foreclosure, when the underlying asset is sold); or (2) when we determine that it is nearly certain that all amounts due will not be

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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 our cash flows from operating activities (determined in accordance with GAAP) or a measure of our liquidity, nor is it entirely indicative of funding our cash needs, including our ability to make cash distributions. Our calculation of distributable earnings may be different from the calculations used by other companies and, therefore, comparability may be limited.

Distributable earnings are as follows ($ in thousands, except share and per share data):

Year Ended December 31,

2025

2024

2023

Net income attributable to common stockholders

$

107,427 

$

223,272 

$

330,065 

Adjustments:

Net income attributable to noncontrolling interest

9,033 

19,278 

29,122 

Income from mortgage servicing rights

(54,532)

(51,272)

(69,912)

Deferred tax provision (benefit)

3,773 

(11,613)

(7,349)

Amortization and write-offs of MSRs

81,113 

76,922 

77,829 

Depreciation and amortization

26,217 

12,040 

16,425 

Loss on extinguishment of debt

2,919 

412 

1,561 

Provision for credit losses, net

9,872 

65,537 

68,642 

(Gain) loss on derivative instruments, net

(3,379)

9,212 

(8,844)

Loss on real estate

27,338 

— 

— 

Stock-based compensation

13,789 

14,232 

14,940 

Distributable earnings (1)

$

223,570 

$

358,020 

$

452,479 

Diluted weighted average shares outstanding - GAAP (1)

209,733,331 

205,526,610

218,843,613 

Less: Convertible notes dilution (2)

— 

— 

(17,294,392)

Diluted weighted average shares outstanding (1)(2)

209,733,331 

205,526,610

201,549,221 

Diluted distributable earnings per share (1)

$

1.07 

$

1.74 

$

2.25 

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(1)Amounts are attributable to common stockholders and OP Unit holders. The OP Units are redeemable for cash, or at our option for shares of our common stock on a one-for-one basis.

(2)The diluted weighted average shares outstanding were adjusted to exclude the potential shares issuable upon conversion and settlement of our convertible senior notes principal balance, which were fully settled in the third quarter of 2025. No adjustments were necessary for the years ended December 31, 2025 and 2024, as their effect was anti-dilutive and not reflected in the diluted weighted average shares outstanding.