Key Highlights

● The structured loan book had US$12.11 billion of unpaid principal at 30 June 2026.

● Non-performing loans numbered 19, with US$428.8 million of principal, down from US$481.5 million.

● The quarterly provision for loan losses was US$38.2 million, with a US$163.4 million allowance.

● Agency originations rose to US$1.08 billion from US$707.6 million in the first quarter.

Arbor Realty Trust, Inc. (NYSE:ABR), whose common stock trades on the New York Stock Exchange under the symbol ABR, reported second-quarter 2026 results on 31 July 2026. The period covered the three months ended 30 June 2026.

The company recorded a GAAP net loss of US$37.3 million, or US$0.20 per diluted common share, compared with net income of US$24.0 million, or US$0.12 per share, in the second quarter of 2025. Distributable earnings, a non-GAAP measure the company uses, were US$21.7 million, or US$0.10 per diluted share, against US$52.1 million, or US$0.25, a year earlier. Management said that excluding US$9.6 million of net realised losses from resolving legacy assets, distributable earnings would have been US$0.15 per share. The board declared a dividend of US$0.17 per common share, payable on 28 August 2026 to holders of record on 14 August 2026.

Credit quality under pressure

The weaker earnings reflect credit costs in the structured loan book, which stood at US$12.11 billion of unpaid principal balance at 30 June 2026, with a weighted average interest rate of 6.50%, or 6.95% including fees. Non-performing loans numbered 19, with US$428.8 million of principal before US$31.1 million of reserves, compared with 19 loans and US$481.5 million at 31 March 2026. A further three loans, with US$94.9 million of principal, were on non-accrual while less than 60 days past due, having had none in the prior quarter.

The quarterly provision for loan losses under the CECL accounting standard was US$38.2 million, and the total loan loss allowance was US$163.4 million. The company booked US$13.6 million of impairments on two properties acquired through foreclosure. It reported seven loan modifications covering US$386.9 million and five foreclosures covering US$121.4 million.

Agency business and servicing

The agency lending arm was steadier. Total originations were US$1.08 billion, up from US$707.6 million in the first quarter of 2026, split between Fannie Mae at US$619.1 million and Freddie Mac at US$428.3 million. Agency revenues were US$64.5 million versus US$57.9 million in the previous quarter. The fee-based servicing portfolio was about US$36.70 billion, up from US$36.31 billion at the end of March. The Fannie Mae loss-sharing allowance was US$82.3 million, or 0.34% of its Fannie Mae servicing book.

Structured originations were US$689.0 million across 14 loans, while loan runoff was US$539.7 million, so that portfolio continues to shrink on a net basis in this period.

Liquidity and capital actions

Management said two capital markets transactions generated about US$500 million of additional liquidity. In July 2026 it issued an upsized US$375.0 million of 6.25% convertible senior notes due 2029, using proceeds to redeem US$270.0 million of 4.50% senior notes due 2026 and to repurchase common stock. Buybacks included about US$114.3 million at US$5.42 per share, described as 49% of book value, and US$20.8 million at US$5.85 per share, or 53% of book value. The company also redeemed a legacy collateralised loan obligation with US$787.0 million of notes at par, which it said freed about US$132.3 million.

Stabilising a Stressed Bridge-Loan Book While Protecting Agency Income

The company is trying to stabilise a stressed multifamily bridge-lending portfolio while preserving liquidity and the fee income from its agency platform. A dividend of US$0.17 compared with distributable earnings of US$0.10 for the quarter is also notable, although management's adjusted figure was higher.

The release gives no explicit forward guidance and no date for the next earnings report. Convertible notes may dilute common holders if converted.