What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-02-20 compared with 2023-02-17 · 937 added, 666 removed, 1487 unchanged (52% of the section changed)

14 unchanged sentences

and Subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of income, changes in equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, based on our audits and the report of other auditors, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S.

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S.

generally accepted accounting principles.

We did not audit the financial statements of Wakefield Investment Holdings LLC, a corporation in which the Company has a 25.0% interest.

In the consolidated financial statements, the Company’s investment in Wakefield Investment Holdings LLC is stated at $65.8 million as of December 31, 2021, and the Company’s equity in the net income of Wakefield Investment Holdings LLC is stated at $34.6 million in 2021 and $75.7 million in 2020.

In the consolidated financial statements, the Company’s equity in the net income of Wakefield Investment Holdings LLC is stated at $34.6 million in 2021.

Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Wakefield Investment Holdings LLC, is based solely on the report of the other auditors.

10 unchanged sentences

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

We believe that our audits and the report of other auditors provide a reasonable basis for our opinion.

Critical Audit Matters

3 unchanged sentences

Valuation of Mortgage Servicing Rights

Description of the Matter

The Company’s capitalized mortgage servicing rights (MSRs) totaled $401.5 million and $422.7 million as of December 31, 2022 and 2021, respectively.

Description of the Matter The Company’s capitalized mortgage servicing rights (MSRs) totaled $391.3 million as of December 31, 2023.

As explained in Note 2 to the consolidated financial statements, the Company recognized MSRs at estimated fair value upon the sale of an originated loan when the Company retained the right to service the loan.

2 unchanged sentences

The fair value estimates for the MSRs primarily utilize discounted cash flow models that incorporate significant assumptions including discount rate and servicing cost.

Auditing the valuation of the MSRs was complex and involved a high degree of subjectivity due to the nature of the assumptions.

Auditing the valuation of the MSRs was complex and involved a high degree of subjectivity due to the nature of the significant assumptions.

In particular, the valuation of the MSRs was sensitive to assumptions such as discount rate and servicing cost, which were based on current market data and had a significant effect on the valuation of the MSRs.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over the MSR valuation process.

This included testing controls over management’s evaluation of the MSR valuations prepared by the third-party expert and controls over the data inputs and the significant assumptions used in the discounted cash flow models.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over the MSR valuation process.

This included testing controls over management’s evaluation of the MSR valuations prepared by the independent third-party valuation expert and controls over the data inputs and the significant assumptions used in the discounted cash flow models.

We involved our valuation professionals to assist with our procedures.

Our audit procedures included, among others, testing the completeness and accuracy of the data provided to management’s third-party expert, evaluating the appropriateness of the methodology used to determine the fair value of the MSRs and testing the significant assumptions used in the discounted cash flow models.

Our audit procedures included, among others, testing the completeness and accuracy of the data provided to management’s independent third-party valuation expert, evaluating the appropriateness of the methodology used to determine the fair value of the MSRs, testing the mathematical accuracy and significant assumptions utilized for a sample of discounted cash flow models.

We utilized information obtained from market participants and recent market activity on other MSR transactions to test management’s assumptions and identify potential sources of contrary information.

Allowance for Credit Losses

Description of the Matter

The Company’s allowance for credit losses related to structured loans and investments (including unfunded loan commitments) totaled $132.6 million and $113.2 million, as of December 31, 2022 and 2021, respectively.

The Company’s allowance for loss-sharing obligations related to the Fannie Mae DUS program totaled $22.7 million and $21.7 million as of December 31, 2022 and 2021, respectively.

As explained in Note 2 to the consolidated financial statements, management estimated the allowance for credit losses and allowance for loss-sharing obligations related to the Fannie Mae DUS program for the expected life of the loan using third party models, which consider loss factors determined through the generation of probability of defaults and loss given defaults for similar loans with similar credit, historical experience and current conditions for similar loans, reasonable and supportable forecasts about the future, and specific factors depending on the nature of the loans.

For loans experiencing credit deterioration, management may use cash flow models or third-party appraisals to estimate the fair value of the underlying collateral securing the loan and record a specific allowance for credit losses, if impaired.

Auditing management’s estimation of credit loss for structured loans and loss-sharing obligations related to the Fannie Mae DUS program was complex and involved a high degree of subjectivity due to the significant uncertainty associated with the assumptions used in the estimation.

In particular, the estimation of the allowance for credit losses and allowance for loss-sharing obligations were sensitive to significant assumptions, such as reasonable and supportable forecast periods, and depending on the nature of the loan, debt service coverage ratio, loan-to-value, capitalization rates, and expected life of the loan or contractual period in which the Company is exposed to credit risk.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the allowance for credit losses process.

Description of the Matter The Company’s allowance for credit losses related to structured loans totaled $195.7 million as of December 31, 2023.

As discussed in Note 2 to the consolidated financial statements, management estimated the allowance for credit losses for the expected term of the loan using third party models, which considered loss factors determined through the generation of probability of defaults and loss given defaults for similar loans with similar credit, historical experience and current conditions for similar loans, reasonable and supportable forecasts about the future, and specific factors depending on the nature of the loans.

For loans experiencing credit deterioration, management used cash flow models or third party appraisals to estimate the fair value of the underlying collateral securing the impaired loan to estimate the expected credit losses.

Auditing management’s allowance for credit losses for structured loans was complex and involved a high degree of subjectivity due to the significant uncertainty associated with the assumptions used in the estimation.

In particular, the estimate was sensitive to significant assumptions, such as historical loss information, reasonable and supportable forecast periods, and depending on the nature of the loan, debt service coverage ratio, loan-to-value and capitalization rates.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the allowance for credit losses process.

This included testing internal controls over management’s expected credit loss and impaired loan assessments, including testing controls over significant model assumptions and data inputs used in those assessments.

We involved our valuation professionals to assist with our procedures.

Our audit procedures included, among others, evaluating the appropriateness of the methodologies used to estimate the allowance for credit losses and loss-sharing obligations, testing the completeness and accuracy of data used in the expected credit loss and cash flow models, and testing the significant assumptions used in the models.

Our audit procedures included, among others, evaluating the appropriateness of the methodologies used to estimate the allowance for credit losses, testing the completeness and accuracy of data used in the expected credit loss and cash flow models, and testing the significant assumptions used in the models.

We utilized the Company’s historical data and information obtained from market participants to test management’s assumptions and identify potential sources of contrary information.

3 unchanged sentences

February 20, 2024

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Members

Wakefield Investment Holdings LLC

New York, New York

Opinion on the Consolidated Financial Statements

We have audited the consolidated balance sheet of Wakefield Investment Holdings LLC (the “Company”) as of December 31, 2021, and the related consolidated statements of operations, changes in partners’ equity and cash flows for the year ended December 31, 2021, and the related 2021 notes (collectively, referred to as the “consolidated financial statements”, which are not included herein).

In our opinion, the 2021 consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021, and the results of their operations and their cash flows for the year ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These 2021 consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s 2021 consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Except as explained above, we conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatements, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the 2021 consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the 2021 consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the 2021 consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of Mortgage Servicing Rights

Description of the Matter

The Company’s capitalized mortgage servicing rights (MSRs) totaled $379 million as of December 31, 2021.

As explained in Note A to the consolidated financial statements, the Company recognized MSRs at estimated fair value upon the sale of an originated loan when the Company retained the right to service the loan.

Subsequently, the MSRs are amortized over the period of net servicing income or loss and are evaluated for impairment based on the fair value at each reporting date.

The Company engaged an independent third-party valuation expert to assist in determining the fair value of the MSRs.

The fair value estimates for the MSRs primarily utilize discounted cash flow models that incorporate significant assumptions including discount rate, prepayment rate, servicing cost and estimated life.

Auditing the valuation of MSRs was complex and involved a high degree of subjectivity due to the nature of the assumptions.

In particular, the valuation of MSRs was sensitive to assumptions such as discount rate, prepayment rate, servicing cost and estimated life, which were based on current market data and had a significant effect on the valuation of the MSRs.

How We Addressed the Matter in our Audit

We obtained an understanding and evaluated the design of internal controls over the MSR valuation process.

This included evaluating the design of controls over management’s evaluation of the MSR valuations prepared by the third-party expert and controls over the data inputs and the significant assumptions used in the discounted cash flow models.

/s/ Richey, May & Co., LLP.

We have served as Wakefield Investment Holdings LLC’s auditor since 2020.

Englewood, Colorado

February 14, 2022

ARBOR REALTY TRUST, INC.

5 unchanged sentences

Loans and investments, net (allowance for credit losses of $ 195,664 and $ 132,559 )

12,377,806 14,254,674

Loans held-for-sale, net 551,707 354,070

1 unchanged sentence

Securities held-to-maturity, net (allowance for credit losses of $ 6,256 and $ 3,153 )

155,279 156,547

Investments in equity affiliates 79,303 79,130

1 unchanged sentence

Goodwill and other intangible assets 91,378 96,069

Other assets 490,281 371,440

Total assets $ 15,738,636 $ 17,038,985

Liabilities and Equity:

14 unchanged sentences

100,000,000 shares authorized, shares issued and outstanding by period:

Special voting preferred shares - 16,293,589 and 16,325,095 shares

633,684 633,684

Special voting preferred shares - 16,293,589

6.375 % Series D - 9,200,000 shares

6.25 % Series E - 5,750,000 shares

6.25 % Series F - 11,342,000 and 8,050,000 shares

6.25 % Series F - 11,342,000 shares

Common stock, $ 0.01 par value:

5 unchanged sentences

Noncontrolling interest 136,632 134,883

Total equity 3,254,605 3,071,879

Total liabilities and equity $ 15,738,636 $ 17,038,985

________________________________________

Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities, or VIEs, as we are the primary beneficiary of these VIEs.

7 unchanged sentences

Year Ended December 31,

2023 2022 2021

Interest income $ 1,331,219 $ 948,401 $ 466,087

7 unchanged sentences

Gain (loss) on derivative instruments, net 6,763 26,609 ( 2,684 )

Other income, net

Other income (loss), net 7,667 ( 17,563 ) 7,566

Total other revenue 293,021 228,277 333,148

8 unchanged sentences

Total other expenses 315,829 257,064 198,024

Income before extinguishment of debt, sale of real estate, income from equity affiliates and income taxes

Income before extinguishment of debt, gain on real estate, income from equity affiliates and income taxes 405,183 361,997 389,206

Loss on extinguishment of debt ( 1,561 ) ( 4,933 ) ( 3,374 )

Gain (loss) on sale of real estate

Gain on sale of real estate — — 3,693

Income from equity affiliates 24,281 14,247 34,567

Provision for income taxes ( 27,347 ) ( 17,484 ) ( 46,285 )

Net income 400,556 353,827 377,807

Preferred stock dividends 41,369 40,954 21,888

4 unchanged sentences

Weighted average shares outstanding:

Basic 184,641,642 165,355,167 137,830,691

Diluted 218,843,613 199,112,630 156,089,595

See Notes to Consolidated Financial Statements.

2 unchanged sentences

($ in thousands, except shares)

Shares Preferred

Shares Common

Par Value Additional

Capital (Accumulated

Earnings Total Arbor

Realty Trust, Inc.

Stockholders’

Noncontrolling

Balance — January 1, 2020

Issuance of common stock

Repurchase of common stock

( 2,285,178 )

Issuance of common stock from convertible debt

Equity Noncontrolling

Interest Total

Balance — December 31, 2020 21,272,133 89,472 123,181,173 1,232 1,317,109 ( 63,442 ) 1,344,371 138,314 1,482,685

Issuance - common stock — — 29,140,369 291 514,302 — 514,593 — 514,593

Repurchase - common stock — — ( 1,962,499 ) ( 19 ) ( 34,385 ) — ( 34,404 ) — ( 34,404 )

Issuance - common stock from convertible debt — — 386,459 4 ( 4 ) — — — —

Issuance - Series D preferred stock 9,200,000 222,438 — — — — 222,438 — 222,438

Issuance - Series E preferred stock 5,750,000 138,886 — — — — 138,886 — 138,886

Issuance - Series F preferred stock 8,050,000 194,675 — — — — 194,675 — 194,675

Redemption - preferred stock ( 3,711,500 ) ( 89,296 ) — — — ( 3,493 ) ( 92,789 ) — ( 92,789 )

Stock-based compensation, net — — 616,679 6 891 — 897 — 897

2 unchanged sentences

Distributions - noncontrolling interest — — — — — — — ( 23,366 ) ( 23,366 )

Redemption of OP Units

( 2,923,461 )

Redemption - OP Units ( 1,235,538 ) ( 12 ) — — — — ( 12 ) ( 21,593 ) ( 21,605 )

Net income — — — — — 339,300 339,300 38,507 377,807

Balance — December 31, 2021 39,325,095 556,163 151,362,181 1,514 1,797,913 62,532 2,418,122 131,862 2,549,984

Issuance of common stock

Repurchase of common stock

( 1,962,499 )

Issuance of common stock from convertible debt

Issuance of Series D preferred stock

Issuance of Series E preferred stock

Issuance of Series F preferred stock

Redemption of preferred stock

( 3,711,500 )

Cumulative - effect adjustment (1) — — — — ( 8,684 ) 5,612 ( 3,072 ) 625 ( 2,447 )

Balance - January 1, 2022 (adjusted for adoption of ASU 2020-06) 39,325,095 556,163 151,362,181 1,514 1,789,229 68,144 2,415,050 132,487 2,547,537

Issuance - common stock — — 26,335,788 263 408,472 — 408,735 — 408,735

Issuance - Series F preferred stock 3,292,000 77,522 — — — — 77,522 — 77,522

Stock-based compensation, net — — 532,553 5 6,780 — 6,785 — 6,785

2 unchanged sentences

Distributions - noncontrolling interest — — — — — — — ( 25,103 ) ( 25,103 )

Redemption of OP Units

( 1,235,538 )

Redemption - OP Units ( 31,506 ) ( 1 ) — — — — ( 1 ) ( 545 ) ( 546 )

Net income — — — — — 325,783 325,783 28,044 353,827

Balance — December 31, 2022 42,585,589 $ 633,684 178,230,522 $ 1,782 $ 2,204,481 $ 97,049 $ 2,936,996 $ 134,883 $ 3,071,879

Cummulative-effect adjustment (Note 2)

Balance - January 1, 2022 (adjusted for adoption of ASU 2020-06)

Issuance of common stock

Issuance of Series F preferred stock

Issuance - common stock — — 13,113,296 131 193,530 — 193,661 — 193,661

Repurchase - common stock — — ( 3,545,604 ) ( 35 ) ( 37,396 ) — ( 37,431 ) — ( 37,431 )

Stock-based compensation, net — — 707,050 7 6,573 — 6,580 — 6,580

2 unchanged sentences

Distributions - noncontrolling interest — — — — — — — ( 27,373 ) ( 27,373 )

Redemption of operating partnership units

Net income — — — — — 371,434 371,434 29,122 400,556

Balance — December 31, 2023 42,585,589 $ 633,684 188,505,264 $ 1,885 $ 2,367,188 $ 115,216 $ 3,117,973 $ 136,632 $ 3,254,605

(1) In August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”).

The adoption of this guidance resulted in a $ 2.5 million increase to the carrying value of our convertible debt, an $ 8.7 million decrease to additional paid-in capital and a $ 5.6 million increase to retained earnings at January 1, 2022.

See Notes to Consolidated Financial Statements.

4 unchanged sentences

Year Ended December 31,

2023 2022 2021

Operating activities:

Net income $ 400,556 $ 353,827 $ 377,807

Adjustments to reconcile net income to net cash provided by operating activities:

4 unchanged sentences

Originations of loans held-for-sale ( 5,074,445 ) ( 4,788,202 ) ( 6,461,023 )

( 4,788,202 )

( 6,461,023 )

( 6,709,375 )

Proceeds from sales of loans held-for-sale, net of gain on sale 4,878,021 5,438,623 6,415,169

9 unchanged sentences

Payoffs and paydowns of loans held-for-sale 987 58,751 2,425

Loss on sale of loans

Change in fair value of held-for-sale loans ( 2,536 ) 15,703 —

(Gain) loss on derivative instruments, net ( 6,763 ) ( 26,609 ) 2,684

Loss on sale of loans — 11,180 —

Litigation settlement — 7,350 —

(Gain) loss on real estate

Gain on real estate — — ( 3,693 )

Changes in operating assets and liabilities ( 74,336 ) ( 43,976 ) ( 75,605 )

2 unchanged sentences

Loans and investments funded, originated and purchased, net ( 1,362,171 ) ( 5,955,061 ) ( 9,209,475 )

( 5,955,061 )

( 9,209,475 )

( 2,376,233 )

Payoffs and paydowns of loans and investments 3,359,810 3,423,498 2,370,570

Proceeds from sale of loans and investments

Deferred fees 21,299 57,098 72,182

1 unchanged sentence

Distributions from equity affiliates 15,552 26,008 34,283

Purchase of securities held-to-maturity, net

Payoffs and paydowns of securities held-to-maturity 4,626 19,030 13,317

Due to borrowers and reserves ( 141,152 ) ( 239,626 ) ( 57,249 )

Proceeds from sale of available-for-sale securities

Investments in real estate, net

Proceeds from sale of real estate, net

Net cash used in investing activities

( 2,317,122 )

( 6,750,254 )

( 1,156,624 )

Proceeds from sale of loans and investments — 397,338 127,700

Purchase of securities held-to-maturity, net — ( 27,598 ) ( 53,511 )

Net cash provided by (used in) investing activities 1,878,978 ( 2,317,122 ) ( 6,750,254 )

Financing activities:

Proceeds from credit and repurchase facilities 9,148,451 11,536,220 15,688,353

Paydowns and payoffs of credit and repurchase facilities

( 12,153,215 )

( 13,433,376 )

( 12,428,681 )

Payoffs and paydowns of credit and repurchase facilities ( 9,747,252 ) ( 12,153,215 ) ( 13,433,376 )

Proceeds from issuance of securitized debt — 2,762,502 4,281,512

7 unchanged sentences

Repurchase of common stock ( 37,431 ) — ( 34,404 )

Distributions to stockholders

Distributions to stockholders and non-controlling interest ( 380,640 ) ( 321,739 ) ( 227,062 )

Payment of deferred financing costs ( 9,840 ) ( 50,362 ) ( 56,060 )

Redemption of preferred stock — — ( 92,789 )

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(in thousands)

Extinguishment of convertible senior unsecured notes — — ( 14,300 )

Payoff of debt fund

Settlements of convertible senior unsecured notes

Net cash provided by financing activities

Net cash (used in) provided by financing activities ( 1,825,793 ) 1,574,368 6,887,679

Net increase in cash, cash equivalents and restricted cash 289,042 356,895 354,272

7 unchanged sentences

Year Ended December 31,

2023 2022 2021

Reconciliation of cash, cash equivalents and restricted cash:

9 unchanged sentences

Supplemental schedule of non-cash investing and financing activities:

Investment in real estate, net

Distributions accrued on preferred stock 7,010 7,010 6,767

Cummulative-effect adjustment (adoption of convertible debt standard)

Investment in real estate, net 39,400 31,200 —

Cumulative - effect adjustment (adoption of convertible debt standard) — 2,447 —

Loans transferred from loans and investment, net to loans held-for-sale — — 65,144

Cummulative-effect adjustment (adoption of credit loss standard)

Settlements of convertible senior unsecured notes

Fair value of conversion feature of convertible senior unsecured notes

Issuance of common stock from convertible debt

See Notes to Consolidated Financial Statements.

12 unchanged sentences

We are an approved Fannie Mae DUS lender nationally, a Freddie Mac Multifamily Conventional Loan lender, seller/servicer, in New York, New Jersey and Connecticut, a Freddie Mac affordable, manufactured housing, senior housing and SBL lender, seller/servicer, nationally and a HUD MAP and LEAN senior housing/healthcare lender nationally.

We also originate and service 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 pool and securitize the Private Label loans and sell certificates in the securitizations to third-party investors, while retaining the servicing rights and the highest risk bottom tranche certificate of the securitization.

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.

Substantially all of our operations are conducted through our operating partnership, ARLP, for which we serve as the indirect general partner, and ARLP’s subsidiaries.

14 unchanged sentences

All significant intercompany transactions and balances have been eliminated in consolidation.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Use of Estimates

1 unchanged sentence

Actual results could differ from those estimates.

The ongoing effects of the COVID-19 pandemic have caused significant disruptions to the U.S.

The COVID-19 pandemic caused significant disruptions to the U.S.

and global economies.

Although vaccine availability and usage have continued to increase, which has led to less negative short-term effects, such as travel bans, quarantines, layoffs and shutdowns, the ongoing longer-term macroeconomic effects on inflation, interest rates, capital markets, labor shortages, property values and global supply chains continue to negatively impact many industries, including the U.S.

Although vaccine availability and its usage have led to less negative short-term effects, such as travel bans, quarantines, layoffs and shutdowns, the ongoing longer-term macroeconomic effects on inflation, interest rates, capital markets, labor shortages, property values and global supply chains continue to negatively impact many industries, including the U.S.

commercial real estate market.

In addition, new strains of COVID-19 continue to emerge, which may cause governments and businesses to re-impose aggressive measures to help slow its spread, making the future impact difficult to predict.

The ultimate impact of COVID-19 on the economy, including rising inflation, increasing interest rates, tightening of capital markets and reduced property values, both globally and to our business, makes any estimate or assumption at December 31, 2022 inherently less certain.

The ultimate impact of COVID-19 on the economy, including rising

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

inflation, increasing interest rates, tightening of capital markets and reduced property values, both globally and to our business, makes any estimate or assumption at December 31, 2023 inherently less certain.

Significant Accounting Policies

22 unchanged sentences

Changes in such estimates can significantly affect our expected credit losses.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Our method for calculating the estimate of expected credit loss considers historical experience and current conditions for similar loans and reasonable and supportable forecasts about the future.

7 unchanged sentences

We also perform a qualitative assessment beyond model estimates and apply qualitative adjustments as necessary.

Our qualitative analysis includes a review of data that may directly impact our estimates including internal and external information about the loan or property including current market conditions, asset specific conditions, property operations or borrower/sponsor details (i.e., refinance, sale, bankruptcy) which allows us to determine the amount of the expected loss more accurately and reasonably for these investments.

Our qualitative analysis includes a review of data that may directly impact our estimates including internal and external information about the loan or property including current market conditions, asset specific conditions, property operations or borrower/sponsor details (i.e., refinance, sale, loan modification, bankruptcy) which allows us to determine the amount of the expected loss more accurately and reasonably for these investments.

We also evaluate the contractual life of our assets to determine if changes are needed for contractual extension options, renewals, modifications, and prepayments.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

To the extent possible, we estimate our allowance for credit losses using a pooling approach for homogeneous assets with similar risk characteristics with the goal of enhancing the precision of their estimate.

14 unchanged sentences

or when significant collection efforts have ceased and it is highly likely that a loss has been realized.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Loss on restructured loans is recorded when we have granted a concession to the borrower in the form of principal forgiveness related to the payoff or the substitution or addition of a new debtor for the original borrower or when we incur costs on behalf of the borrower related to the modification, payoff or the substitution or addition of a new debtor for the original borrower.

We record a loss on a restructured loan when we grant a concession to the borrower in the form of principal forgiveness related to the payoff or the substitution or addition of a new debtor for the original borrower or when we incur costs on behalf of the borrower related to the modification, payoff or the substitution or addition of a new debtor for the original borrower.

When a loan is restructured, we record our investment at net realizable value, taking into account the cost of all concessions at the date of restructuring.

1 unchanged sentence

Loans Held-for-Sale, Net.

Loans held-for-sale, net represents our Agency Business commercial real estate loans originated and sold under the GSE and HUD programs, which are generally transferred or sold within 60 days of loan origination, as well as our Private Label loans, which are generally sold and securitized within 180 days of loan origination.

Loans held-for-sale, net represents our Agency Business commercial real estate loans originated and sold under the GSE and HUD programs, which are generally transferred or sold within 60 days of loan origination, as well as our Private Label loans, which are either sold instantaneously or pooled and securitized, or sold, within 180 days of loan origination.

Such loans are reported at the lower of cost or market on an aggregate basis and include the value allocated to the associated future MSRs.

11 unchanged sentences

Thereafter, we may request interim loss-sharing adjustments which allow us to fund 25 % of such advances until final settlement.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

At inception, a liability for the fair value of the obligation undertaken in issuing the guaranty is recognized.

6 unchanged sentences

We regularly monitor the specific reserves and update loss estimates as current information is received.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Capitalized Mortgage Servicing Rights.

28 unchanged sentences

We evaluate these investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable.

We recognize an impairment loss if the estimated fair value of the investment is less than its carrying amount and we determine that the impairment is other-than-temporary.

We recognize an impairment loss if the estimated fair value of the investment is less

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

than its carrying amount and we determine that the impairment is other-than-temporary.

We record our share of the net income and losses from the underlying properties of our equity method investments and any other-than-temporary impairment on these investments as income or losses from equity affiliates in the consolidated statements of income.

3 unchanged sentences

The fair value estimates are based on available historical information and on future expectations and assumptions we deem reasonable.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

We generally use an income-based valuation method to estimate the fair value of intangible assets, which discounts expected future cash flows to present value using estimates and assumptions we deem reasonable.

Determining the estimated useful lives of intangible assets also requires judgment.

Certain intangible assets, such as GSE licenses, have been deemed to have indefinite lives while other intangible assets, such as broker and borrower relationships and above/below market rent have been deemed to have finite lives.

Certain intangible assets, such as GSE licenses, have been deemed to have indefinite lives while other intangible assets, such as broker and borrower relationships and below market rent have been deemed to have finite lives.

Our assessment as to which intangible assets are deemed to have finite or indefinite lives is based on several factors including economic barriers of entry for the acquired product lines, scarcity of available GSE licenses, retention trends and our operating plans, among other factors.

7 unchanged sentences

Real Estate Owned and Held-For-Sale.

Real estate acquired is recorded at its estimated fair value at acquisition and is shown net of accumulated depreciation and impairment charges.

Real estate acquired is recorded at its estimated fair value, less costs to sell, at acquisition and is shown net of accumulated depreciation and impairment charges.

Costs incurred in connection with the acquisition of a property are capitalized.

15 unchanged sentences

Payments received from purchasers prior to closing are recorded as deposits.

Gain on real estate sold is recognized when the collectability of the sale price is reasonably assured, we are not obligated to perform significant activities after the sale and when control of the asset transfers to the buyer.

A gain may be deferred in whole or in part until collectability of the sales price is reasonably assured and the earnings process is complete.

A gain or loss on real estate sold is recognized when the collectability of the sale price is reasonably assured, we are not

ARBOR REALTY TRUST, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

obligated to perform significant activities after the sale and when control of the asset transfers to the buyer.

A gain may be deferred in whole or in part until collectability of the sales price is reasonably assured and the earnings process is complete.

Hedging Activities and Derivatives .

15 unchanged sentences

Our objectives in using interest rate derivatives are to add stability to interest income and to manage our exposure to interest rate movements.

To accomplish this objective, we have used, and may again in the future, use interest rate swaps as part of our interest rate risk management strategy.

Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

To accomplish this objective, we have used, and may again in the future, use treasury futures and interest rate and credit default swaps as part of our interest rate risk management strategy.

Instruments designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

Our rate lock and forward sales commitments associated with the Agency Business meet the definition of a derivative and are recorded at fair value.

1 unchanged sentence

The estimated fair value of forward sale commitments includes the effects of interest rate movements between the trade date and balance sheet date.

Our Swaps associated with (1) our held-for-sale Agency Business Private Label loans, and (2) our Structured Business SFR loans, do not meet the criteria for hedge accounting and are tied to the five-year and ten-year swap rates.

Our Swaps are cleared by a central clearing house and variation margin payments (made in cash) are treated as a legal settlement of the derivative itself, as opposed to a pledge of collateral.

Realized and unrealized gains and losses related to our Swaps are recorded through earnings.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Our treasury futures associated with (1) our held-for-sale Agency Business Private Label loans, and (2) our Structured Business SFR loans, do not meet the criteria for hedge accounting and are tied to the five-year and ten-year treasury rates.

Our treasury futures are cleared by a central clearing house and variation margin payments (made in cash) are treated as a legal settlement of the derivative itself, as opposed to a pledge of collateral.

Realized and unrealized gains and losses related to our treasury futures are recorded through earnings.

Revenue Recognition.

8 unchanged sentences

Several of our loans provide for accrual of interest at specified rates, which differ from current payment terms.

Interest is recognized on such loans at the accrual rate subject to our determination that accrued interest and outstanding principal are ultimately collectible, based on the underlying collateral and operations of the asset.

Interest is recognized on such loans at the accrual rate subject to our determination that accrued interest and outstanding principal are ultimately collectible,

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

based on the underlying collateral and operations of the asset.

If we cannot make this determination, interest income above the current pay rate is recognized only upon actual receipt.

3 unchanged sentences

We do not recognize interest income on loans in which the borrower has failed to make the contractual interest payment due or has not replenished the interest reserve account.

Income from non-performing loans is generally recognized on a cash basis only to the extent it is received.

Loans are classified as non-performing once the contractual payments exceed 60 days past due and income from the loans is generally recognized on a cash basis only to the extent it is received.

Full income recognition will resume when the loan becomes contractually current, and performance has recommenced.

7 unchanged sentences

We recognize revenue for these activities when the fees are fixed or determinable, or are evidenced by an arrangement, collection is reasonably assured and the services under the arrangement have been provided.

Other income, net — Other income, net represents loan structuring, modification and defeasance, as well as broker fees and miscellaneous asset management fees associated with our loan and investment portfolio.

Other income (loss), net — Other income (loss), net represents loan structuring, modification and defeasance, as well as broker fees and miscellaneous asset management fees associated with our loan and investment portfolio.

We recognize these forms of income when the fees are fixed or determinable, are evidenced by an arrangement, collection is reasonably assured and the services under the arrangement have been provided.

8 unchanged sentences

Leases with an initial term of twelve months or less are expensed as incurred.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Stock-Based Compensation.

2 unchanged sentences

Dividends are paid on restricted stock as dividends are paid on shares of our common stock whether or not they are vested.

Stock-based compensation is disclosed in our consolidated statements of income under “employee compensation and benefits” for employees and under “selling and administrative” expense for non-employees and the Board of Directors.

Income Taxes.

6 unchanged sentences

Current and deferred taxes are recorded on the portion of earnings (losses) recognized by us with respect to our interest in TRSs.

Deferred income tax assets and liabilities are calculated based on temporary differences between our GAAP consolidated financial statements and the federal, state, local tax basis of assets and liabilities as of the consolidated balance sheets.

Deferred income tax assets and liabilities are calculated based on temporary differences between our

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

GAAP consolidated financial statements and the federal, state, local tax basis of assets and liabilities as of the consolidated balance sheets.

We evaluate the realizability of our deferred tax assets (e.g., net operating loss and capital loss carryforwards) and recognize a valuation allowance if, based on the available evidence, it is more likely than not that some portion or all our deferred tax assets will not be realized.

6 unchanged sentences

Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, where such exercise or conversion would result in a lower EPS amount.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Recently Adopted Accounting Pronouncements

Adoption Date

Effect on Financial Statements

In August 2020, the FASB issued Accounting Standards Updat (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”).

Upon adoption of this guidance, convertible debt proceeds will no longer be allocated between debt and equity components, reducing the unamortized debt discount and lowering interest expense.

This guidance also changes the method used to calculate diluted EPS when an instrument may be settled in cash or shares, if the effect is dilutive.

First quarter of 2022

We adopted this guidance on January 1, 2022 using the modified retrospective method of transition.

Upon adoption, we reclassified the remaining equity component from equity to our convertible senior unsecured notes liability and ceased amortization of the debt discount through interest expense.

Additionally, this guidance and the adoption method chosen requires the use of the if-converted method for the diluted net income per share calculation for our convertible instruments on a retrospective basis, regardless of our settlement intent.

Additionally, the adoption of this guidance reduced our diluted EPS for the year ended December 31, 2022 by $ 0.05 per share, mainly due to the assumption that we will redeem the principal balance with common stock.

Recently Issued Accounting Pronouncements

Effective Date

Effect on Financial Statements

Description Effective Date Effect on Financial Statements

In March 2022, the FASB issued ASU 2022-02, Financial Instruments—Credit Losses (Topic 326):

Troubled Debt Restructurings and Vintage Disclosures.

This guidance eliminates the accounting guidance on troubled debt restructurings and amends existing disclosures, including the requirment to disclose current period gross write-offs by year of origination.

This guidance eliminates the accounting guidance on troubled debt restructurings and amends existing disclosures, including the requirement to disclose current period gross write-offs by year of origination.

The guidance also updates the requirements related to accounting for credit losses and adds enhanced disclosures for creditors with respect to loan refinancings and restructurings for borrowers experiencing financial difficulty.

First quarter of 2023, with early adoption permitted

We have not early adopted this guidance and will make all the necessary additional disclosure requirements once adopted.

The adoption of this guidance is not expected to have a material impact on our consolidated financial statements.

First quarter of 2023 The adoption of this guidance did not have a material impact on our consolidated financial statements.

ARBOR REALTY TRUST, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Recently Issued Accounting Pronouncements

Description Effective Date Effect on Financial Statements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

This guidance requires public entities to disclose significant expense categories and amounts for each reportable segment, along with information regarding the composition of "other segment items." Additionally, the guidance requires the disclosure of the title and position of the entity's Chief Operating Decision Maker (“CODM”), an explanation of how the CODM utilizes reported profit or loss measures to assess segment performance, and certain segment-related disclosures on an interim basis, which were previously required only annually.

Fiscal year 2024, with early adoption permitted The adoption of this guidance will not have a

significant impact on our consolidated financial statements.

We do not expect to early adopt and will add the necessary disclosures upon adoption.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

This guidance focuses on disclosures around effective tax rates and cash income taxes paid and to improve the usefulness of income tax disclosures for investors.

This guidance requires public entities to disclose, on an annual basis, a rate reconciliation presented in both dollars and percentages and to include specific categories and provides further guidance on disaggregation of those categories based on a quantitative threshold equal to 5% or more.

This guidance also makes changes to annual disclosures of income taxes paid for all entities by requiring entities to disclose the amount of income taxes paid, net of refunds received, disaggregated by federal, state and foreign jurisdiction.

First quarter of 2025, with early adoption permitted The adoption of this guidance is not expected to have a material impact on our consolidated financial statements.

We do not expect to early adopt and will add the necessary disclosures upon adoption.

Other Recently Issued Accounting Pronouncements

In March 2023, the FASB issued ASU 2023-01, Leases (Topic 842) – Common Control Arrangements and ASU 2023-02, Investments – Equity Method and Joint Ventures:

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method, both effective for us in the first quarter of 2024.

In August 2023, the FASB issued ASU 2023-05, Business Combinations – Joint Venture Formations (Subtopic 805-60):

Recognition and Initial Measurement, which is effective for joint venture entities with a formation date on or after January 1, 2025.

We currently do not have any transactions that fall under the scope of these ASUs;

therefore, the adoptions are not expected to have an impact on our consolidated financial statements.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Note 3 — Loans and Investments

Our Structured Business loan and investment portfolio consists of ($ in thousands):

December 31, 2022

LTV Ratio (2)

December 31, 2023 Percent of

Pay Rate (1) Wtd.

Maturity (2) Wtd.

LTV Ratio (3) Wtd.

LTV Ratio (4)

2 unchanged sentences

Preferred equity investments 85,741 1 % 17 3.95 % 60.3 53 % 82 %

Other loans (5)

SFR permanent loans 7,564 < 1 % 2 9.84 % 13.9 0 % 56 %

12,615,006 100 % 747 8.42 % 13.2 1 % 78 %

Allowance for credit losses ( 195,664 )

5 unchanged sentences

Preferred equity investments 110,725 1 % 8 7.63 % 39.2 46 % 79 %

Other loans (5)

SFR permanent loans 35,845 < 1 % 3 8.76 % 32.8 0 % 58 %

14,456,123 100 % 747 8.17 % 20.6 1 % 76 %

Allowance for credit losses ( 132,559 )

1 unchanged sentence

Loans and investments, net $ 14,254,674

________________________________________

(1) “Weighted Average Pay Rate” is a weighted average, based on the UPB of each loan in our portfolio, of the interest rate required to be paid monthly as stated in the individual loan agreements.

Certain loans and investments that require an accrual rate to be paid at maturity are not included in the weighted average pay rate as shown in the table.

(2) Including extension options, the weighted average remaining months to maturity at December 31, 2023 and 2022 was 29.4 and 37.9, respectively.

(3) The “First Dollar Loan-to-Value (“LTV”) Ratio” is calculated by comparing the total of our senior most dollar and all senior lien positions within the capital stack to the fair value of the underlying collateral to determine the point at which we will absorb a total loss of our position.

(4) The “Last Dollar LTV Ratio” is calculated by comparing the total of the carrying value of our loan and all senior lien positions within the capital stack to the fair value of the underlying collateral to determine the point at which we will initially absorb a loss.

At December 31, 2022 and 2021, bridge loans included 241 and 120 , respectively, of SFR loans with a total gross loan commitment of $ 1.57 billion and $ 804.6 million, respectively, of which $ 927.4 million and $ 408.2 million, respectively, was funded.

At December 31, 2022 and 2021, other loans included 3 and 2 variable rate SFR permanent loans, respectively.

(5) At December 31, 2023 and 2022, bridge loans included 354 and 241 , respectively, of SFR loans with a total gross loan commitment of $ 2.51 billion and $ 1.57 billion, respectively, of which $ 1.32 billion and $ 927.4 million, respectively, was funded.

Concentration of Credit Risk

3 unchanged sentences

See Note 18 for details on our concentration of related party loans and investments.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

We assign a credit risk rating of pass, pass/watch, special mention, substandard or doubtful to each loan and investment, with a pass rating being the lowest risk and a doubtful rating being the highest risk.

2 unchanged sentences

This metric provides a helpful snapshot of portfolio quality and credit risk.

All portfolio assets are subject to, at a minimum, a thorough quarterly financial evaluation in which historical operating performance and forward-looking projections are reviewed, however, we maintain a higher level of scrutiny and focus on loans that we consider “high risk” and that possess deteriorating credit quality.

All portfolio assets are subject to, at a minimum, a thorough quarterly financial evaluation in which historical operating performance and forward-looking projections are

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

reviewed, however, we maintain a higher level of scrutiny and focus on loans that we consider “high risk” and that possess deteriorating credit quality.

Generally speaking, given our typical loan profile, risk ratings of pass, pass/watch and special mention suggest that we expect the loan to make both principal and interest payments according to the contractual terms of the loan agreement.

5 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

A summary of the loan portfolio’s internal risk ratings and LTV ratios by asset class at December 31, 2022 is as follows ($ in thousands):

UPB by Origination Year

Asset Class / Risk Rating

A summary of the loan portfolio’s internal risk ratings and LTV ratios by asset class at December 31, 2023, and charge-offs recorded during 2023 is as follows ($ in thousands):

UPB by Origination Year Total Wtd.

LTV Ratio Wtd.

Asset Class / Risk Rating 2023 2022 2021 2020 2019 Prior

Pass $ 80,814 $ 53,316 $ 26,185 $ 2,010 $ 4,598 $ 20,300 $ 187,223

Pass/Watch 317,358 2,561,938 2,223,155 119,860 84,600 58,044 5,364,955

Special Mention 24,424 1,762,539 2,631,689 180,750 140,685 350 4,740,437

Substandard — 435,878 322,987 8,006 — — 766,871

Doubtful — — 13,930 14,800 9,765 — 38,495

Total Multifamily $ 422,596 $ 4,813,671 $ 5,217,946 $ 325,426 $ 239,648 $ 78,694 $ 11,097,981 1 % 80 %

1 unchanged sentence

Percentage of portfolio 88 %

Pass $ 9,709 $ 608 $ — $ — $ — $ — $ 10,317

Pass/Watch 289,482 465,057 144,846 119,692 — — 1,019,077

Special Mention 31,131 45,145 218,697 — — — 294,973

1 unchanged sentence

Percentage of portfolio 10 %

Special Mention

Percentage of portfolio

Pass/Watch $ — $ — $ — $ 4,600 $ — $ — $ 4,600

Special Mention — — — 3,500 — — 3,500

Substandard — — — — — 127,928 127,928

Total Land $ — $ — $ — $ 8,100 $ — $ 127,928 $ 136,028 0 % 97 %

Percentage of portfolio 1 %

Special Mention $ — $ — $ — $ 35,410 $ — $ — $ 35,410

Total Healthcare

Percentage of portfolio

Student Housing:

Total Office $ — $ — $ — $ 35,410 $ — $ — $ 35,410 0 % 80 %

Percentage of portfolio < 1 %

Total Student Housing

Substandard $ — $ — $ — $ — $ — $ 19,520 $ 19,520

Total Retail $ — $ — $ — $ — $ — $ 19,520 $ 19,520 0 % 88 %

Percentage of portfolio < 1 %

Doubtful $ — $ — $ — $ — $ — $ 1,700 $ 1,700

Total Commercial $ — $ — $ — $ — $ — $ 1,700 $ 1,700 63 % 66 %

Percentage of portfolio < 1 %

Grand Total $ 752,918 $ 5,324,481 $ 5,581,489 $ 488,628 $ 239,648 $ 227,842 $ 12,615,006 1 % 78 %

Charge-offs $ — $ — $ — $ — $ — $ 5,700 $ 5,700

Geographic Concentration Risk

8 unchanged sentences

Year Ended December 31, 2023

Student Housing

Multifamily Land Retail Commercial Single- Family Rental Office Other Total

Allowance for credit losses:

1 unchanged sentence

Provision for credit losses (net of recoveries) 72,886 ( 10 ) ( 2,526 ) — 844 ( 2,320 ) ( 69 ) 68,805

Charge-offs — — — — — ( 5,700 ) — ( 5,700 )

Ending balance $ 110,847 $ 78,058 $ 3,293 $ 1,700 $ 1,624 $ 142 $ — $ 195,664

6 unchanged sentences

Allowance for credit losses:

Beginning balance, prior to adoption of CECL

Impact of adopting CECL - January 1, 2020

Beginning balance $ 36,468 $ 78,150 $ 13,861 $ 1,700 $ 586 $ 1,846 $ 15,718 $ 148,329

Provision for credit losses (net of recoveries) ( 17,761 ) ( 180 ) ( 42 ) — ( 267 ) 6,227 ( 12,292 ) ( 24,315 )

Charge-offs — — ( 8,000 ) — — — ( 2,773 ) ( 10,773 )

Ending balance $ 18,707 $ 77,970 $ 5,819 $ 1,700 $ 319 $ 8,073 $ 653 $ 113,241

During 2022, we recorded a $ 19.3 million provision for credit losses, which was net of a $ 1.5 million loan loss recovery for a loan that paid off during 2022.

The increase in the provision for credit losses during 2022 was primarily attributable to an increase in our loans and investments balance as a result of portfolio growth and the impact of rising interest rates, inflation and economic forecasts.

Our estimate of allowance for credit losses on our structured loans and investments, including related unfunded loan commitments, was based on a reasonable and supportable forecast period that reflects recent observable data, including an increase in interest rates, higher unemployment forecasts, and rising inflation, partially offset by increasing property values and other market factors, including continued optimism of COVID-19.

During 2023, we recorded a $ 68.8 million provision for credit losses, which was net of $ 4.8 million of loan loss recovery.

The loan loss recovery included $ 2.5 million for a retail loan that paid off and $ 2.3 million for a loan on an office building that was converted to a common equity investment, for which the fair value of the property exceeded the carrying value.

The increase in the provision for credit losses during 2023 was primarily attributable to the impact from the macroeconomic outlook of the commercial real estate market.

Our estimate of allowance for credit losses on our structured loans and investments, including related unfunded loan commitments, was based on a reasonable and supportable forecast period that reflects recent observable data, including increases in interest rates, higher unemployment forecasts, and continuing inflationary pressures, including an estimated continual decline in real estate values and other market factors.

The expected credit losses over the contractual period of our loans also include the obligation to extend credit through our unfunded loan commitments.

Our current expected credit loss (“CECL”) allowance for unfunded loan commitments is adjusted quarterly and corresponds with the associated outstanding loans.

At December 31, 2022 and 2021, we had outstanding unfunded commitments of $ 1.15 billion and $ 975.2 million, respectively, that we are obligated to fund as borrowers meet certain requirements.

At December 31, 2023 and 2022, we had outstanding unfunded commitments of $ 1.31 billion and $ 1.15 billion, respectively, that we are obligated to fund as borrowers meet certain requirements.

At December 31, 2023 and 2022, accrued interest receivable related to our loans totaling $ 124.2 million and $ 108.5 million, respectively, was excluded from the estimate of credit losses and is included in other assets on the consolidated balance sheets.

All of our structured loans and investments are secured by real estate assets or by interests in real estate assets, and, as such, the measurement of credit losses may be based on the difference between the fair value of the underlying collateral and the carrying value of the assets as of the period end.

A summary of our specific loans considered impaired by asset class is as follows ($ in thousands):

ARBOR REALTY TRUST, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

A summary of our specific loans considered impaired by asset class is as follows ($ in thousands):

December 31, 2023

Allowance for

Credit Losses

Asset Class UPB (1) Carrying

Value Allowance for

Credit Losses Wtd.

First Dollar LTV Ratio Wtd.

Last Dollar LTV Ratio

Multifamily $ 272,493 $ 260,291 $ 37,750 0 % 100 %

Land 134,215 127,868 77,869 0 % 99 %

Retail 19,521 15,037 3,292 0 % 88 %

Commercial 1,700 1,700 1,700 63 % 66 %

Total $ 427,929 $ 404,896 $ 120,611 0 % 99 %

December 31, 2022

(1) Represents the UPB of seven and eight impaired loans (less unearned revenue and other holdbacks and adjustments) by asset class at December 31, 2022 and 2021, respectively.

Land $ 134,215 $ 127,868 $ 77,869 0 % 99 %

Retail 22,045 17,563 5,817 14 % 79 %

Commercial 1,700 1,700 1,700 63 % 63 %

Total $ 157,960 $ 147,131 $ 85,386 3 % 96 %

________________________________________

(1) Represents the UPB of nineteen and seven impaired loans (less unearned revenue and other holdbacks and adjustments) by asset class at December 31, 2023 and 2022, respectively.

There were no loans for which the fair value of the collateral securing the loan was less than the carrying value of the loan for which we had not recorded a provision for credit loss at December 31, 2023 and 2022.

At December 31, 2022, four loans with an aggregate net carrying value of $ 2.6 million, net of related loan loss reserves of $ 5.1 million, were classified as non-performing and, at December 31, 2021, three loans with an aggregate net carrying value of $ 20.1 million, net of related loan loss reserves of $ 2.6 million, were classified as non-performing.

Income from non-performing loans is generally recognized on a cash basis when it is received.

Non-performing and Other Non-accrued Loans

Loans are classified as non-performing once the contractual payments exceed 60 days past due.

At December 31, 2023, sixteen loans with an aggregate net carrying value of $ 235.6 million, net of related loan loss reserves of $ 27.1 million, were classified as non-performing and, at December 31, 2022, four loans with an aggregate net carrying value of $ 2.6 million, net of related loan loss reserves of $ 5.1 million, were classified as non-performing.

Income from non-performing loans is recognized on a cash basis when payments are received.

Full income recognition will resume when the loan becomes contractually current, and performance has recommenced.

A summary of our non-performing loans by asset class is as follows (in thousands):

December 31, 2022

December 31, 2021

Student Housing

December 31, 2023 December 31, 2022

UPB Less Than

Past Due Greater Than

Past Due UPB Less Than

Past Due Greater Than

Multifamily $ 271,532 $ — $ 271,532 $ 2,605 $ — $ 2,605

Commercial 1,700 — 1,700 1,700 — 1,700

Retail 920 — 920 3,445 — 3,445

Total $ 274,152 $ — $ 274,152 $ 7,750 $ — $ 7,750

In this challenging economic environment, we have recently experienced late and partial payments on certain loans in our structured portfolio.

At December 31, 2023, these loans included twenty-four multifamily bridge loans with an aggregate UPB of $ 956.9 million that were 60 days or less past due.

We are recognizing income on these loans to the extent cash is received.

These loans include one specifically reserved loan with a $ 3.0 million loan loss reserve and a UPB of $ 32.6 million.

At both December 31, 2023 and 2022, we had no loans contractually past due 90 days or more that are still accruing interest.

During 2023, we recognized $ 92.5 million of interest income on loans classified as non-accrual at December 31, 2023.

During 2022, there was no interest income recognized on loans classified as non-accrual at December 31, 2022.

In addition, we have six loans with a carrying value totaling $ 121.4 million at December 31, 2023, that are collateralized by a land development project.

2 unchanged sentences

At both December 31, 2023 and 2022, we had a cumulative allowance for credit losses of $ 71.4 million related to these loans.

The loans are subject to certain risks associated with a development project including, but not limited to, availability of construction financing, increases in projected construction costs, demand for the development’s outputs upon completion of the project, and litigation risk.

Additionally, these loans were not classified as non-performing as the borrower is compliant with all of the terms and conditions of the loans.

The loans are subject to certain risks

ARBOR REALTY TRUST, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

At both December 31, 2022 and 2021, we had no loans contractually past due 90 days or more that are still accruing interest.

During both 2022 and 2021, there was no interest income recognized on nonaccrual loans.

In 2022, we sold 4 bridge loans with an aggregate UPB of $ 296.9 million at par less shared loan origination fees and selling costs totaling $ 2.0 million and released $ 78.0 million of capital to be used for future investments.

The shared loan origination fees and selling costs were recorded as an unrealized impairment loss and included in other income, net on the consolidated statements of income.

We have retained the right to service these loans.

During 2022, we sold a bridge loan and mezzanine loans totaling $ 110.5 million, that were collateralized by a land development project, at a discount for $ 102.2 million.

In connection with this transaction, we released $ 66.3 million of capital to be used for future investments and recorded a $ 9.2 million loss (including fees and expenses), which was included in other income, net on the consolidated statements of income.

We have the potential to recover up to $ 2.8 million depending on the future performance of the loan.

associated with a development project including, but not limited to, availability of construction financing, increases in projected construction costs, demand for the development’s outputs upon completion of the project, and litigation risk.

Additionally, these loans were not classified as non-performing as the borrower is compliant with all of the terms and conditions of the loans.

Loan Modifications

In the fourth quarter of 2023, we entered into loan modification agreements with the borrowers of three multifamily bridge loans with an aggregate UPB of $ 241.0 million, interest rates over SOFR ranging from 4.00 % to 4.30 % and maturities between October 2024 to January 2025 to:

(1) defer a portion of the foregoing interest ranging from 2.00 % to 2.15 % to payoff, and (2) extend the maturity of each loan by one year .

We also agreed to waive 25 % of the deferred interest if the loans are paid off by the extended maturity dates.

In the fourth quarter of 2023, we entered into a loan modification agreement on an $ 86.9 million multifamily bridge loan with an interest rate of SOFR plus 4.25 % and a maturity in November 2023 to:

(1) change the pay rate of interest to $ 0.5 million per year, and (2) extend the maturity one year .

The remaining interest will be deferred to payoff.

In the fourth quarter of 2023, we converted a first mortgage loan and a preferred equity investment in an office building to a common equity investment, which is included in other assets in our consolidated balance sheets.

On the date of the conversion, the investment had a net carrying value of $ 37.1 million, net of an $ 8.0 million reserve.

Upon conversion, we recognized a $ 2.3 million loan loss recovery as a result of the fair value of the property exceeding the carrying value of our loan and preferred equity investment.

We intend to convert the building to residential condominiums.

In the second quarter of 2023, a borrower of a $ 70.5 million multifamily bridge loan, with an interest rate of SOFR plus 3.40 % and a maturity in September 2024, defaulted on its interest payments and, as a result, this loan was classified as a non-performing loan.

In September 2023, the borrower sold the underlying property to a third party who assumed our loan.

At the time of the property sale, we entered into a loan modification agreement with the new borrower to extend the maturity to September 2025 and reduce the interest rate to a fixed pay rate of 3.00 % and an accrual rate of 3.00 % for a total fixed rate of 6.00 % for a period of eighteen months, after which the interest rate reverts back to the original rate for the duration of the loan.

The new borrower was also required to fund $ 10.5 million over time:

$ 2.5 million in interest reserves, which was funded at the closing of the loan assumption, and $ 8.0 million in capital improvements within fifteen months.

If the new borrower fails to timely complete the required capital improvements, it will be required to fund a renovation reserve at the lesser of (1) $ 2.5 million and (2) the difference between the $ 8.0 million capital commitment and the costs actually incurred for such capital improvements.

The key principal is also personally guaranteeing the $ 8.0 million capital improvement.

In 2020, we entered into a loan modification agreement on a $ 26.5 million bridge loan with an interest rate of LIBOR plus 6.00 % with a 2.375 % LIBOR floor and a $ 6.1 million mezzanine loan with a fixed rate of 12 % collateralized by a retail property to:

10 unchanged sentences

In June 2021, we received $ 95.0 million for full satisfaction of these loans, reversed the $ 7.5 million allowance for credit losses and recorded interest income of $ 3.5 million.

These two loan modifications were deemed troubled debt restructurings.

There were no other loan modifications, refinancing’s and/or extensions during 2022 or 2021 that were considered troubled debt restructurings.

Given the transitional nature of some of our real estate loans, we may require funds to be placed into an interest reserve, based on contractual requirements, to cover debt service costs.

At December 31, 2022 and 2021, we had total interest reserves of $ 123.7 million and $ 87.4 million, respectively, on 480 loans and 328 loans, respectively, with an aggregate UPB of $ 7.70 billion and $ 5.75 billion, respectively.

There were no other loan modifications, refinancings and/or extensions during 2023, 2022 or 2021 to borrowers experiencing financial difficulty.

ARBOR REALTY TRUST, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

In April 2023, we exercised our right to foreclose on a group of properties in Houston, Texas that are the underlying collateral for four bridge loans with a total UPB of $ 217.4 million.

We simultaneously sold these properties to a significant equity investor in the original bridge loans and provided new bridge loan financing as part of the sale.

We did not record a loss on the original bridge loans and recovered all the outstanding interest owed to us as part of this restructuring.

In 2022, we sold 4 bridge loans with an aggregate UPB of $ 296.9 million at par less shared loan origination fees and selling costs totaling $ 2.0 million and recaptured $ 78.0 million of capital to be used for future investments.

The $ 2.0 million in fees and costs were recorded as an unrealized impairment loss and included in other income (loss), net on the consolidated statements of income.

We retained the right to service these loans.

During 2022, we sold a bridge loan and mezzanine loans totaling $ 110.5 million, that were collateralized by a land development project, at a discount for $ 102.2 million.

In connection with this transaction, we recaptured $ 66.3 million of capital to be used for future investments and recorded a $ 9.2 million loss (including fees and expenses), which was included in other income (loss), net on the consolidated statements of income.

We have the potential to recover up to $ 2.8 million depending on the future performance of the loan.

Given the transitional nature of some of our real estate loans, we may require funds to be placed into an interest reserve, based on contractual requirements, to cover debt service costs.

At December 31, 2023 and 2022, we had total interest reserves of $ 156.1 million and $ 123.7 million, respectively, on 537 loans and 480 loans, respectively, with an aggregate UPB of $ 8.44 billion and $ 7.70 billion, respectively.

Note 4 — Loans Held-for-Sale, Net

Our GSE loans held-for-sale are typically sold within 60 days of loan origination, while our non-GSE loans are generally expected to be sold and securitized within 180 days of loan origination.

Our GSE loans held-for-sale are typically sold within 60 days of loan origination, while our non-GSE loans are generally expected to be sold to third parties or securitized within 180 days of loan origination.

Loans held-for-sale, net consists of the following (in thousands):

December 31, 2022

December 31, 2021

December 31, 2023 December 31, 2022

Fannie Mae $ 477,212 $ 173,020

Private Label 50,235 152,735

FHA 11,350 21,021

SFR - Fixed Rate 8,696 12,352

Freddie Mac 4,832 8,938

552,325 368,066

Fair value of future MSR 7,784 5,557

2 unchanged sentences

Loans held-for-sale, net $ 551,707 $ 354,070

During 2022, 2021 and 2020, we sold $ 5.44 billion, $ 6.42 billion and $ 6.59 billion, respectively, of loans held-for-sale.Included in the total loans sold during 2022 and 2021 were Private Label loans totaling $ 489.3 million and $ 985.1 million, respectively, which were sold to unconsolidated affiliates of ours who securitized the loans.

We retained the most subordinate class of certificates in these securitizations totaling $ 43.4 million and $ 85.7 million, respectively, in satisfaction of credit risk retention requirements (see Note 7 for details), and we are also the primary servicer of the mortgage loans.

We determined that the fair value of certain loans held-for-sale were below their carrying values and, based on the fair value analysis performed, recorded unrealized impairment losses of $ 15.7 million during 2022 which was included in other income, net on the consolidated statements of income.

During 2023, 2022 and 2021, we sold $ 4.89 billion, $ 5.44 billion and $ 6.42 billion, respectively, of loans held-for-sale.

Included in the total loans sold during 2022 and 2021 were Private Label loans totaling $ 489.3 million and $ 985.1 million, respectively, which were sold to unconsolidated affiliates of ours who securitized the loans.

We retained the most subordinate class of certificates in these securitizations totaling $ 43.4 million and $ 85.7 million during 2022 and 2021, respectively, in satisfaction of credit risk retention requirements (see Note 7 for details), and we are also the primary servicer of the mortgage loans.

During 2022, we determined that the fair value of certain loans held-for-sale were below their carrying values and, based on the fair value analysis performed, recorded unrealized impairment losses of $ 15.7 million which was included in other income (loss), net on the consolidated statements of income.

During the first quarter of 2023, we sold several of these impaired loans above the net carrying value and recorded a net gain of $ 0.9 million.

At December 31, 2023 and 2022, there were no loans held-for-sale that were 90 days or more past due, and there were no loans held-for-sale that were placed on a non-accrual status.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Note 5 — Capitalized Mortgage Servicing Rights

2 unchanged sentences

A summary of our capitalized MSR activity is as follows (in thousands):

Year Ended December 31, 2022

Year Ended December 31, 2021

Year Ended December 31, 2023 Year Ended December 31, 2022

Originated Acquired Total Originated Acquired Total

Beginning balance $ 386,878 $ 14,593 $ 401,471 $ 395,573 $ 27,161 $ 422,734

Additions 67,612 — 67,612 83,115 — 83,115

Amortization ( 59,182 ) ( 3,911 ) ( 63,093 ) ( 53,449 ) ( 6,427 ) ( 59,876 )

Write-downs and payoffs ( 12,726 ) ( 2,010 ) ( 14,736 ) ( 38,361 ) ( 6,141 ) ( 44,502 )

2 unchanged sentences

At December 31, 2023 and 2022, we had no valuation allowance recorded on any of our MSRs.

The expected amortization of capitalized MSRs recorded at December 31, 2023 is as follows (in thousands):

Year Amortization

2024 $ 65,500

Thereafter 108,717

Total $ 391,254

Based on scheduled maturities, actual amortization may vary from these estimates.

ARBOR REALTY TRUST, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The expected amortization of capitalized MSRs recorded at December 31, 2022 is as follows (in thousands):

Based on scheduled maturities, actual amortization may vary from these estimates.

Note 6 – Mortgage Servicing

1 unchanged sentence

December 31, 2023

Product Concentrations

Geographic Concentrations

Private Label

North Carolina

SFR - Fixed Rate

Product Concentrations Geographic Concentrations

Product UPB (1) % of Total State UPB % of Total

Fannie Mae $ 21,264,578 69 % Texas 11 %

Freddie Mac 5,181,933 17 % New York 11 %

Private Label 2,510,449 8 % California 8 %

FHA 1,359,624 4 % North Carolina 8 %

Bridge (2) 379,425 1 % Georgia 6 %

SFR - Fixed Rate 287,446 1 % Florida 6 %

Total $ 30,983,455 100 % New Jersey 5 %

Other (3) 41 %

December 31, 2022

Private Label

North Carolina

SFR - Fixed Rate

Fannie Mae $ 19,038,124 68 % Texas 11 %

Freddie Mac 5,153,207 18 % New York 11 %

Private Label 2,074,859 8 % California 8 %

FHA 1,155,893 4 % North Carolina 8 %

Bridge (2) 301,182 1 % Georgia 6 %

SFR - Fixed Rate 274,764 1 % Florida 5 %

Total $ 27,998,029 100 % New Jersey 5 %

Other (3) 42 %

________________________________________

(1) Excludes loans which we are not collecting a servicing fee.

1 unchanged sentence

(3) No other individual state represented 4% or more of the total.

At December 31, 2023 and 2022, our weighted average servicing fee was 39.1 basis points and 41.1 basis points, respectively.

At December 31, 2023 and 2022, we held total escrow balances (including unfunded collateralized loan obligation hold backs) of approximately $ 1.6 billion and $ 1.7 billion, respectively, of which approximately $ 1.5 billion is not included in our consolidated balance sheets at both December 31, 2023 and 2022.

These escrows are maintained in separate accounts at several federally insured depository institutions, which may exceed FDIC insured limits.

We earn interest income on the total escrow deposits, which is generally based on a market rate of interest negotiated with the financial institutions that hold the escrow deposits.

Interest earned on total escrows, net of interest paid to the borrower, is included as a component of servicing revenue, net in the consolidated statements of income as noted in the following table.

ARBOR REALTY TRUST, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

At December 31, 2022 and 2021, our weighted average servicing fee was 41.1 basis points and 44.9 basis points, respectively.

At December 31, 2022 and 2021, we held total escrow balances of $ 1.25 billion and $ 1.40 billion, respectively, which is not reflected in our consolidated balance sheets.

Of the total escrow balances, we held $ 677.4 million and $ 682.5 million at December 31, 2022 and 2021, respectively, related to loans we are servicing within our Agency Business.

These escrows are maintained in separate accounts at several federally insured depository institutions, which may exceed FDIC insured limits.

We earn interest income on the total escrow deposits, generally based on a market rate of interest negotiated with the financial institutions that hold the escrow deposits.

Interest earned on total escrows, net of interest paid to the borrower, was $ 24.4 million, $ 4.2 million and $ 7.1 million during 2022, 2021 and 2020, respectively, and is a component of servicing revenue, net in the consolidated statements of income.

The components of servicing revenue, net are as follows (in thousands):

Year Ended December 31,

2023 2022 2021

Servicing fees $ 123,975 $ 123,937 $ 123,758

Interest earned on escrows 77,916 24,436 4,191

Prepayment fees 6,387 48,197 38,221

Write-offs of MSRs ( 14,736 ) ( 44,502 ) ( 32,741 )

Amortization of MSRs ( 63,093 ) ( 59,876 ) ( 58,615 )

Servicing revenue, net $ 130,449 $ 92,192 $ 74,814

Note 7 – Securities Held-to-Maturity

3 unchanged sentences

These certificates are collateralized by 5-year to 10-year fixed rate first mortgage loans on multifamily properties, bear interest at an initial weighted average variable rate of 3.94 % and have an estimated weighted average remaining maturity of 6.6 years.

The weighted average effective interest rate was 8.85 % and 9.11 % at December 31, 2022 and 2021, respectively, including the accretion of a portion of the discount deemed collectible.

The weighted average effective interest rate was 8.85 % at both December 31, 2023 and 2022, including the accretion of a portion of the discount deemed collectible.

Approximately $ 19.7 million is estimated to mature after one year through five years and $ 173.1 million is estimated to mature after five years through ten years.

2 unchanged sentences

As part of the securitizations under the SBL program, we have the ability to purchase the B Piece bond through a bidding process, which represents the bottom 10%, or highest risk, of the securitization.

At December 31, 2022, we retained 49 % , or $ 106.2 million initial face value, of seven B Piece bonds, which were purchased at a discount for $ 74.7 million, and sold the remaining 51 % to a third party.

At December 31, 2023, we retained 49 %, or $ 106.2 million initial face value, of seven B Piece bonds, which were previously purchased at a discount for $ 74.7 million, and sold the remaining 51 % to a third party.

These securities are collateralized by a pool of multifamily mortgage loans, bear interest at an initial weighted average variable rate of 3.74 % and have an estimated weighted average remaining maturity of 6.1 years.

The weighted average effective interest rate was 11.28 % and 12.20 % at December 31, 2023 and 2022, respectively, including the accretion of a portion of the discount deemed collectible.

Approximately $ 7.5 million is estimated to mature within one year, $ 16.4 million is estimated to mature after one year through five years, $ 0.5 million is estimated to mature after five years through ten years and $ 17.1 million is estimated to mature after ten years.

Approximately $ 5.9 million is estimated to mature within one year, $ 11.4 million is estimated to mature after one year through five years and $ 20.4 million is estimated to mature after ten years.

A summary of our securities held-to-maturity is as follows (in thousands):

Allowance for

Face Value Net Carrying

Value Unrealized

Gain (Loss) Estimated

Fair Value Allowance for

Credit Losses

2 unchanged sentences

B Piece bonds 37,704 26,414 5,442 31,856 3,984

Total $ 230,495 $ 155,279 $ ( 25,889 ) $ 129,390 $ 6,256

December 31, 2022

1 unchanged sentence

B Piece bonds 41,464 33,072 1,372 34,444 370

Total $ 234,255 $ 156,547 $ ( 11,976 ) $ 144,571 $ 3,153

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

A summary of the changes in the allowance for credit losses for our securities held-to-maturity is as follows (in thousands):

Year Ended December 31, 2023

Certificates B Piece

Beginning balance $ 2,783 $ 370 $ 3,153

1 unchanged sentence

Ending balance $ 2,272 $ 3,984 $ 6,256

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The allowance for credit losses on our held-to-maturity securities was estimated on a collective basis by major security type and was based on a reasonable and supportable forecast period and a historical loss reversion for similar securities.

5 unchanged sentences

A summary of these investments is as follows (in thousands):

UPB of Loans to

Investments in Equity Affiliates at

Equity Affiliates at

Equity Affiliates

December 31, 2022

December 31, 2021

December 31, 2022

Investments in Equity Affiliates at UPB of Loans to Equity Affiliates at December 31, 2023

Equity Affiliates December 31, 2023 December 31, 2022

Arbor Residential Investor LLC $ 32,743 $ 46,951 $ —

1 unchanged sentence

Fifth Wall Ventures 13,365 13,584 —

AWC Real Estate Opportunity Partners I LP 11,671 — —

ARSR DPREF I LLC 5,163 — —

Lightstone Value Plus REIT L.P.

North Vermont Avenue

1,895 1,895 —

JT Prime 425 425 —

West Shore Café — — 1,688

1 unchanged sentence

East River Portfolio — — —

Total $ 79,303 $ 79,130 $ 1,688

Arbor Residential Investor LLC (“ARI”).

7 unchanged sentences

We also received $ 15.0 million and $ 23.8 million in cash distributions from this investment during 2023 and 2022, respectively, which were classified as returns of capital.

We have included the financial statements of Wakefield in this report.

We committed to a $ 30.0 million investment (of which $ 25.2 million was funded at December 31, 2022) for an 18 % interest in a multifamily-focused commercial real estate investment fund that is sponsored and managed by our chief executive officer and one of his immediate family members.

During 2022, 2021 and 2020, we recorded a loss associated with this investment of $ 2.4 million, $ 1.3 million and $ 0.9 million, respectively.

We committed to a $ 30.0 million investment for an 18 % interest in a multifamily-focused commercial real estate investment fund that is sponsored and managed by our chief executive officer and one of his immediate family members.

During 2023, 2022 and 2021, we recorded losses associated with this investment of $ 1.9 million, $ 2.4 million and $ 1.3 million, respectively.

During 2023 and 2022, we made contributions of $ 0.7 million and $ 4.9 million, respectively, and received cash distributions totaling $ 1.1 million and $ 0.5 million, respectively, which were classified as returns of capital, related to this investment.

We committed to a $ 25.0 million investment (of which $ 15.2 million was funded at December 31, 2022) for a 7.6 % interest in two related private equity funds whose investment objective is to invest primarily in technology, technology-enabled or technology-related companies that are relevant or complementary to the build environment, including real estate or real estate related industries.

We have no role in the management of the investment funds.

During 2022 and 2021, we made contributions of $ 9.7 million and $ 5.4 million, respectively, and, during 2022 we received cash distributions totaling $ 1.6 million, which were classified as returns of capital, related to this investment.

Operating results from this investment were de minimis for all periods presented.

ARBOR REALTY TRUST, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

We committed to a $ 25.0 million investment for a 7.6 % interest in two related private equity funds whose investment objective is to invest primarily in technology, technology-enabled or technology-related companies that are relevant or complementary to the build environment, including real estate or real estate-related industries.

We have no role in the management of the investment funds.

During 2023 and 2022, we made contributions of $ 1.0 million and $ 9.7 million, respectively, and, during 2022 we received cash distributions totaling $ 1.6 million, which was classified as returns of capital, related to this investment.

During 2023, we recorded a loss associated with this investment of $ 1.2 million.

Operating results from this investment were de minimis for 2022 and 2021.

AWC Real Estate Opportunity Partners I LP ("AWC").

In the fourth quarter of 2023, we committed to a $ 24.0 million investment (of which $ 13.0 million was funded at December 31, 2023) for an initial 99 % noncontrolling interest in a fund whose objective is to make investments in sustainable affordable housing structures, with the intention to bring in additional partners.

In addition, we entered into an agreement with the general partner to provide a loan, up to a maximum of $ 0.9 million, to fund a portion of their equity contributions.

In the fourth quarter of 2023, this fund purchased our equity interest in North Vermont Avenue (described below) at a discount for $ 1.3 million, which was recorded as a reduction to our investment in AWC.

The remaining capital contribution was used to fund additional qualified purchases.

ARSR DPREF I LLC.

In the fourth quarter of 2023, we entered into a joint venture whose objective is to invest in preferred equity investments in commercial real estate and we contributed 50 % of a $ 10.2 million preferred equity loan originated by us to the joint venture.

We hold a 50 % interest in the joint venture which is structured to reflect joint control, allocation of profits and losses and capital contributions.

The agreement provides for a total joint venture contribution of $ 70.0 million, which may be upsized to $ 140.0 million.

Lightstone Value Plus REIT L.P.

3 unchanged sentences

Operating results from these investments were de minimis for all periods presented.

During 2022, we invested $ 0.5 million for a noncontrolling interest in Docsumo, a startup company that converts unstructured documents, such as bank statements and pay stubs, to accurate structured data and checks documents for fraud, such as photoshopped layers and font changes, using artificial intelligence.

Operating results from this investment were de minimis.

North Vermont Avenue.

We invested $ 2.4 million for an initial 85 % noncontrolling interest in a joint venture that acquired three parcels of land with multiple structures, with the intent to tear down the existing structures and construct a new 202-unit multifamily complex with ground floor retail.

We invested $ 0.5 million for a noncontrolling interest in Docsumo, a startup company that converts unstructured documents, such as bank statements and pay stubs, to accurate structured data and checks documents for fraud, such as photoshopped layers and font changes, using artificial intelligence.

Operating results from this investment were de minimis for all periods presented.

During 2022, we determined that this investment exhibited indicators of impairment and, as a result of an impairment analysis performed;

we recorded an other-than-temporary impairment of $ 2.4 million to income from equity affiliates in the consolidated statement of income for the full carrying amount of this investment.

West Shore Café.

We own a 50 % noncontrolling interest in the West Shore Lake Café, a restaurant/inn lakefront property in Lake Tahoe, California.

We provided a $ 1.7 million first mortgage loan to an affiliated entity to acquire property adjacent to the original property, which is scheduled to mature in September 2025 and bears interest at LIBOR plus 4.0 %.

We provided a $ 1.7 million first mortgage loan to an affiliated entity to acquire property adjacent to the original property, which matures in September 2025 and bears interest at SOFR plus 4.0 % with a SOFR floor of 0.15 %.

In 2018, we determined that this investment exhibited indicators of impairment and recorded an other-than-temporary impairment of $ 2.2 million for the full carrying amount of this investment and fully reserved the $ 1.7 million first mortgage loan.

9 unchanged sentences

Equity Participation Interest.

During the first quarter of 2022, we received $ 2.6 million from an equity participation interest on a property that was sold and which we had a preferred equity loan that previously paid off.

See Note 18 for details of certain investments described above.

During 2023 and 2022, we received $ 14.5 million and $ 2.6 million, respectively, from equity participation interests on properties that were sold and which we had loans that previously paid off.

These were classified as returns of capital and recognized as income from equity affiliates.

North Vermont Avenue.

Operating results from this investment were de minimis for all periods presented.

During 2022, we determined that this investment exhibited indicators of impairment and, as a result of an impairment analysis performed;

we recorded an other-than-temporary impairment of $ 2.4 million to income from equity affiliates for the full carrying amount of this investment.

In the fourth quarter of 2023, AWC purchased our equity interest in North Vermont Avenue at a discount for $ 1.3 million (described above).

ARBOR REALTY TRUST, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

See Note 18 for details of certain investments described above.

Note 9 — Goodwill and Other Intangible Assets

2 unchanged sentences

The following table sets forth the other intangible assets activity (in thousands):

December 31, 2022

December 31, 2021

December 31, 2023 December 31, 2022

Carrying Value Accumulated

Amortization Total Gross

Carrying Value Accumulated

Amortization Total

Finite‑lived intangible assets:

5 unchanged sentences

Freddie Mac Program Plus license 8,700 — 8,700 8,700 — 8,700

The amortization expense recorded for these intangible assets were $ 4.7 million, $ 4.7 million and $ 5.3 million during 2022, 2021 and 2020, respectively.

At December 31, 2022, the weighted average remaining lives of our amortizable finite-lived intangible assets and the estimated amortization expense for each of the next five years are as follows ($ in thousands):

Estimated Amortization Expense for the

Years Ending December 31,

FHA license 3,200 — 3,200 3,200 — 3,200

$ 72,410 $ ( 37,658 ) $ 34,752 $ 72,410 $ ( 32,967 ) $ 39,443

The amortization expense recorded for these intangible assets was $ 4.7 million in each of 2023, 2022 and 2021.

At December 31, 2023, the weighted average remaining lives of our amortizable finite-lived intangible assets and the estimated annual amortization expense are as follows ($ in thousands):

Remaining Life

(in years) Estimated Amortization Expense for the

Years Ending December 31,

2024 2025 2026 2027

Finite‑lived intangible assets:

2 unchanged sentences

Below market leases 3.2 126 126 126 21

2.0 $ 3,259 $ 1,566 $ 906 $ 21

See Note 20 for details of goodwill and other intangible assets by segment.

5 unchanged sentences

Borrowings under our credit and repurchase facilities are as follows ($ in thousands):

December 31, 2022

December 31, 2021

December 31, 2023 December 31, 2022

Value (1) Collateral

Note Rate UPB Debt

Value (1) Collateral

Structured Business

$ 2.5 B joint repurchase facility (2)

$ 870,073 $ 868,077 $ 1,371,436 7.81 % $ 1,524,831 $ 1,516,657 $ 2,099,447 6.73 %

$ 1 B repurchase facility (2)

$ 500 M repurchase facility

386,576 385,779 589,533 7.68 % 499,891 498,666 703,740 6.39 %

$ 500 M repurchase facility

448,411 447,490 597,205 8.38 % 155,121 154,653 188,563 7.16 %

$ 499 M repurchase facility (2)(3)

355,328 355,328 506,753 7.83 % 351,056 351,056 504,506 6.64 %

$ 450 M repurchase facility

263,061 262,820 362,465 7.55 % 344,576 344,237 450,736 6.36 %

$ 250 M credit facility

17,997 17,964 23,088 7.32 % 33,246 33,221 43,238 6.25 %

$ 250 M repurchase facility

— — — — — — — —

$ 225 M credit facility

103,552 103,552 139,252 8.04 % 47,398 47,398 81,119 6.90 %

$ 200 M repurchase facility

32,599 32,579 41,522 7.03 % 187,428 186,639 239,678 6.18 %

$ 200 M repurchase facility

46,403 45,969 68,762 8.04 % 33,155 32,494 47,750 6.95 %

$ 200 M repurchase facility

107,355 107,324 141,130 7.44 % 155,240 154,516 200,099 6.33 %

$ 121 M loan specific credit facilities

120,660 120,328 161,700 6.91 % 156,543 156,107 225,805 6.42 %

$ 50 M credit facility

$ 35 M working capital facility

29,200 29,200 36,500 7.58 % 29,200 29,194 36,500 6.48 %

$ 40 M credit facility

— — — — — — — —

$ 35 M working capital facility

— — — — — — — —

$ 25 M credit facility

$ 1 M master security agreement

17,093 17,058 22,816 8.09 % 19,177 18,701 24,572 6.99 %

Repurchase facility - securities (2)(4) 31,033 31,033 — 7.15 % 12,832 12,832 — 6.99 %

2 unchanged sentences

$ 750 M ASAP agreement

$ 73,011 $ 73,011 $ 73,781 6.49 % $ 29,476 $ 29,476 $ 30,291 5.21 %

$ 500 M joint repurchase facility (2)

7,945 7,833 11,350 7.77 % 105,275 104,629 135,641 6.52 %

$ 500 M repurchase facility

115,841 115,730 241,895 6.83 % 66,866 66,778 66,866 5.73 %

$ 200 M credit facility

187,185 187,138 187,185 6.78 % 31,519 31,475 33,177 5.76 %

$ 100 M credit facility

— — — — 57,974 57,887 57,974 5.76 %

$ 50 M credit facility

29,085 29,083 29,418 6.73 % 14,671 14,664 14,671 5.65 %

$ 1 M repurchase facility (2)(3)

531 531 866 7.86 % 534 534 920 6.66 %

Agency Business total $ 413,598 $ 413,326 $ 544,495 6.76 % $ 306,315 $ 305,443 $ 339,540 5.96 %

Consolidated total $ 3,242,939 $ 3,237,827 $ 4,606,657 7.67 % $ 3,856,009 $ 3,841,814 $ 5,185,293 6.54 %

________________________________________

(1) At December 31, 2023 and 2022, debt carrying value for the Structured Business was net of unamortized deferred finance costs of $ 4.8 million and $ 13.3 million, respectively, and for the Agency Business was net of unamortized deferred finance costs of $ 0.3 million and $ 0.9 million, respectively.

1 unchanged sentence

(3) A portion of this facility was used to finance a fixed rate SFR permanent loan reported through our Agency Business.

(4) At December 31, 2022 and 2021, this facility was collateralized by B Piece bonds with a carrying value of $ 33.1 million and $ 47.6 million, respectively.

(4) At December 31, 2023, this facility was collateralized by certificates retained by us from our Freddie Mac Q Series securitization (“Q Series securitization”) with a principal balance of $ 43.1 million.

At December 31, 2022, this facility was collateralized by B Piece bonds with a carrying value of $ 33.1 million.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

During 2023, several of our credit and repurchase facilities, in both our Structured Business and Agency Business, converted from a LIBOR-based interest rate to a SOFR-based interest rate for new financings.

Existing financings generally remain at a LIBOR-based interest rate.

Usually, our credit and repurchase facilities have extension options that are at the discretion of the banking institutions in which we have long standing relationships with.

These facilities typically renew annually and also include a "wind-down"

At December 31, 2023, all of our credit and repurchase facilities are at a SOFR-based interest rate.

Usually, our credit and repurchase facilities have extension options that are at the discretion of the financial institutions in which we have long standing relationships with.

These facilities typically renew annually and also include a "wind-down" feature.

Joint Repurchase Facility.

We have a $ 3.00 billion joint repurchase facility, which is shared between the Structured Business and the Agency Business, which matures in March 2024 with a one-year extension option.

We have a $ 3.00 billion joint repurchase facility that will reduce to $ 2.00 billion in March 2024, which is shared between the Structured Business and the Agency Business, and matures in July 2025 with a one-year extension option.

This facility is used to finance both structured and Private Label loans.

The interest rate under the facility is determined on a loan-by-loan basis and may include a floor equal to a pro rata share of the floors included in our originated loans.

The facility has a maximum advance rate of 80 % on all loans and includes a $ 150.0 million over advance available that bears interest at a rate of the applicable benchmark plus 7.00 % .

The over advance is available through March 2023, was being amortized on a monthly basis and was paid off at December 31, 2022.

The facility has a maximum advance rate of 80 % on all loans.

If the estimated market value of the loans financed in this facility decrease, we may be required to pay down borrowings under this facility.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Structured Business.

2 unchanged sentences

At December 31, 2023 and 2022, the weighted average interest rate for the credit and repurchase facilities of our Structured Business, including certain fees and costs, such as structuring, commitment, non-use and warehousing fees, was 8.26 % and 6.95 %, respectively.

The leverage on our loan and investment portfolio financed through our credit and repurchase facilities, excluding the securities repurchase facility, working capital facility and the $ 1.0 million master security agreement, was 73 % and 77 % at December 31, 2022 and 2021, respectively.

We have a $ 1.00 billion repurchase facility used to finance loans that matures in December 2023.

The interest rate on loans funded after August 30, 2022 is SOFR plus 2.25 % with a 0.15 % SOFR floor.

For existing loans, the interest rate will remain at SOFR plus 2.00 % with up to a 0.35 % SOFR floor.

The interest rate spread increases by 0.20 % if the advance rate on a loan exceeds 75 %.

We have a $ 500.0 million repurchase facility to finance SFR loans that has an interest rate of SOFR plus 3.26 % on loans funded after October 13, 2022 and SOFR plus 2.76 % on existing loans.

The leverage on our loan and investment portfolio financed through our credit and repurchase facilities, excluding the securities repurchase facility and working capital facility, was 69 % and 73 % at December 31, 2023 and 2022, respectively.

We have a $ 1.00 billion repurchase facility used to finance bridge loans that matures in August 2025, with a one-year extension option.

The facility bears interest ranging from SOFR plus 2.25 % to 2.50 %, with a weighted average spread that must be at least 2.40 %.

We have a $ 500.0 million repurchase facility to finance SFR loans that has an interest rate ranging from SOFR plus 2.76 % to 3.26 %.

The commitment amount under this facility expires six months after the lender provides written notice.

We then have an additional six months to repurchase the underlying loans.

We have a $ 500.0 million repurchase facility to finance SFR properties that bears interest at a rate of SOFR plus 2.36 % with a 0.25 % SOFR floor and matures in October 2023.

We have a $ 450.0 million repurchase facility to finance bridge loans that matures in March 2023, with three one-year extension options through March 2026.

The interest rate on loans funded in 2022 ranges from SOFR plus 1.75 % to 2.25 % for multifamily and SOFR plus 2.00 % to 2.75 % for non-multifamily.

For existing loans, the interest rates will remain at LIBOR.

We have a $ 450.0 million repurchase facility to finance multifamily bridge loans that matures in October 2023, with a one-year extension option.

The interest rate for new loans after April 29, 2022 is determined on a loan-by-loan basis based off SOFR.

We have a $ 500.0 million repurchase facility to finance SFR loans that has an interest rate ranging from SOFR plus 2.46 % to 3.11 %, with a 0.25 % SOFR floor, and matures in October 2024.

We have a $ 450.0 million repurchase facility to finance bridge loans that matures in March 2024, with two one-year extension options.

The interest rate under the facility is determined on a loan-by-loan basis and includes a floor of SOFR plus 2.00 %.

We have a $ 250.0 million credit facility to finance bridge loans that matures in July 2024 and bears interest at a rate ranging from SOFR plus 2.61 % to 3.31 % depending on the type of loan financed.

This facility includes a $ 25.0 million sublimit to finance healthcare related loans.

We have a $ 225.0 million credit facility to finance SFR properties that bears interest at a rate of SOFR plus 2.55 %, with an all-in floor rate range of 3.00 % to 4.10 %, depending on our deposit balance.

We have a $ 250.0 million repurchase facility to finance bridge loans that bears interest at a rate ranging from SOFR plus 2.00 % to 2.40 % depending on the duration of time the loan is being financed.

The facility matures in October 2025, with a one-year extension option.

We have a $ 200.0 million repurchase facility that matures in March 2024, with a one-year extension option.

We have a $ 225.0 million credit facility to finance SFR loans that bears interest at a rate of SOFR plus 2.55 %, with an all-in floor rate range of 3.00 % to 4.10 %, depending on our deposit balance.

The facility matures in October 2025.

We have a $ 200.0 million repurchase facility to finance bridge loans that matures in April 2024, with a six-month extension option, and bears interest at a rate ranging from SOFR plus 1.50 % to 1.86 %.

We have a $ 200.0 million repurchase facility to finance SFR loans that matures in March 2025, with a one-year extension option.

This facility has an interest rate of SOFR plus 2.55 %.

We have a $ 200.0 million repurchase facility to finance bridge and construction loans that matures in January 2024, with a one-year extension option.

This facility has interest rates of SOFR plus 1.75 % to 3.50 % depending on the type of loan financed with a SOFR floor determined on a loan-by-loan basis.

We have several loan specific credit facilities totaling $ 156.5 million used to finance individual bridge loans.

The facilities bear interest at rates ranging from LIBOR plus 2.20 % to 3.375 %, SOFR plus 2.20 %, a 3.00 % fixed rate, and the greater of the prime rate or 3.25 % and mature between May 2023 and August 2025.

We have a $ 50.0 million credit facility to finance multifamily loans that bears interest at a rate of SOFR plus 2.10 % and matures in April 2023, with two 1-year extension options.

We have a $ 35.0 million unsecured working capital line of credit that bears interest at a rate of SOFR plus 3.00 %.

This line matures in April 2023 and is typically renewed annually.

We have a $ 200.0 million repurchase facility to finance bridge and construction loans that matures in January 2025.

This facility has interest rates ranging from SOFR plus 1.75 % to 3.50 % depending on the type of loan financed, with a SOFR floor determined on a loan-by-loan basis.

ARBOR REALTY TRUST, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

We have a $ 25.0 million credit facility to finance SFR properties that bears interest at a rate of SOFR plus 2.60 %, with an all-in floor rate of 4.25 %, and which matures in October 2024.

We have a $ 25.0 million credit facility used to purchase loans that bears interest at a rate of SOFR plus 2.35 % and matures in February 2023, with a one-year extension option.

We have an uncommitted repurchase facility that is used to finance securities we retained in connection with our CLOs and our purchases of B Piece bonds from SBL program securitizations and SFR bonds.

This facility bears interest at rate of SOFR plus 2.60 % and has no stated maturity date.

We have several loan specific credit facilities totaling $ 120.7 million used to finance individual bridge loans.

The facilities bear interest at rates ranging from SOFR plus 1.91 % to 2.60 % and a 3.00 % fixed rate.

The facilities mature between March 2024 and September 2025.

We have a $ 50.0 million credit facility to finance bridge loans that bears interest at a rate of SOFR plus 2.10 % and matures in April 2024, with a one-year extension option.

We have a $ 40.0 million credit facility used to purchase loans that bears interest at a rate of SOFR plus 2.35 % and matures in April 2026, with a one-year extension option.

We have a $ 35.0 million unsecured working capital line of credit that bears interest at a rate of SOFR plus 3.00 %.

This line matures in April 2024 and is typically renewed annually.

We have a $ 25.0 million credit facility to finance SFR loans that bears interest at a rate of SOFR plus 2.60 %, with an all-in floor rate of 4.25 %, which matures in October 2025.

We have an uncommitted repurchase facility that is used to finance certificates retained by us from our Q Series securitization and our purchases of B Piece bonds from SBL program securitizations.

This facility bears interest at a rate of SOFR plus 2.60 % and has no stated maturity date.

Agency Business.

We utilize credit facilities with various financial institutions to finance substantially all of our loans held-for-sale as described below.

We utilize credit and repurchase facilities with various financial institutions to finance substantially all of our loans held-for-sale as described below.

The financial institutions that provide these facilities generally have a security interest in the underlying mortgage notes that serve as collateral for these facilities.

6 unchanged sentences

We have a $ 50.0 million credit facility that bears interest at a rate of SOFR plus 1.35 % and matures in September 2024.

We have a letter of credit facility with a financial institution to secure obligations under the Fannie Mae DUS program and the Freddie Mac SBL program with a total committed amount of up to $ 75.0 million.

We have a letter of credit facility to secure obligations under the Fannie Mae DUS program and the Freddie Mac SBL program with a total committed amount of up to $ 75.0 million.

The facility bears interest at a fixed rate of 2.875 %, matures in September 2025, and is primarily collateralized by our servicing revenue as approved by Fannie Mae and Freddie Mac.

The facility includes a $ 5.0 million sublimit for an obligation under the Freddie Mac SBL program.

The facility includes a $ 5.0 million sublimit for obligations under the Freddie Mac SBL program.

At December 31, 2023, the letters of credit outstanding include $ 64.0 million for the Fannie Mae DUS program and $ 5.0 million for the Freddie Mac SBL program.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Securitized Debt

2 unchanged sentences

The investment grade notes and guaranteed certificates issued to third parties are treated as secured financings and are non-recourse to us.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Borrowings and the corresponding collateral under our securitized debt transactions are as follows ($ in thousands):

Collateral (3)

December 31, 2022

Debt Collateral (3)

December 31, 2023 Face Value Carrying

Value (1) Wtd.

Rate (2) UPB Carrying

Value Restricted

CLO 19 $ 872,812 $ 868,359 7.84 % $ 1,031,772 $ 1,028,669 $ 4,527

CLO 18 1,652,812 1,647,885 7.29 % 1,784,921 1,780,930 244,629

CLO 17 1,714,125 1,709,800 7.14 % 1,870,388 1,865,878 203,938

CLO 16 1,237,500 1,233,769 6.76 % 1,456,872 1,453,297 847

CLO 15 (5) 674,412 673,367 6.82 % 734,120 732,498 42,600

CLO 14 (5) 589,345 588,176 6.82 % 680,814 679,469 33,271

Total CLOs 6,741,006 6,721,356 7.14 % 7,558,887 7,540,741 529,812

Q Series securitization 215,278 213,654 7.38 % 287,038 286,053 —

1 unchanged sentence

December 31, 2022

CLO 19 $ 872,812 $ 866,605 6.75 % $ 952,268 $ 947,336 $ 64,300

CLO 18 1,652,812 1,645,711 6.19 % 1,899,174 1,891,215 85,970

CLO 17 1,714,125 1,707,676 6.16 % 1,911,866 1,904,732 145,726

CLO 16 1,237,500 1,231,887 5.79 % 1,307,244 1,301,794 106,495

CLO 15 674,412 671,532 5.84 % 797,755 795,078 2,861

CLO 14 655,475 652,617 5.80 % 732,247 730,057 37,090

CLO 13 462,769 461,005 6.03 % 552,182 550,924 37,875

CLO 12 379,283 378,331 6.09 % 466,474 465,003 500

Total CLOs 7,649,188 7,615,364 6.10 % 8,619,210 8,586,139 480,817

Q Series securitization 236,878 233,906 6.30 % 315,837 313,965 —

Total securitized debt $ 7,886,066 $ 7,849,270 6.11 % $ 8,935,047 $ 8,900,104 $ 480,817

________________________________________

(1) Debt carrying value is net of $ 21.3 million and $ 36.8 million of deferred financing fees at December 31, 2023 and 2022, respectively.

(2) At December 31, 2022 and 2021, the aggregate weighted average note rate for our CLOs, including certain fees and costs, was 6.32 % and 1.86 % , respectively , and the Q Series securitization was 6.66 % at December 31, 2022.

(3) At December 31, 2022 and 2021, there were no collateral deemed a “credit risk” as defined by the CLO indentures.

(2) At December 31, 2023 and 2022, the aggregate weighted average note rate for our CLOs, including certain fees and costs, was 7.37 % and 6.32 %, respectively, and the Q Series securitization was 7.99 % and 6.66 %, respectively.

(3) At December 31, 2023, twelve loans with an aggregate UPB of $ 308.3 million were deemed a "credit risk" as defined by the collateralized loan obligations ("CLO") indentures.

At December 31, 2022, there were no collateral deemed a “credit risk” as defined by the CLO indentures.

(4) Represents restricted cash held for principal repayments as well as for reinvestment in the CLOs.

Does not include restricted cash related to interest payments, delayed fundings and expenses totaling $ 63.9 million and $ 230.0 million at December 31, 2023 and 2022, respectively.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

In May 2022, we completed CLO 19, issuing nine tranches of CLO notes through a wholly-owned subsidiary totaling $ 1.05 billion.

(5) The replenishment periods of CLO 14 and CLO 15 ended in September 2023 and December 2023, respectively.

In 2022, we completed CLO 19, issuing nine tranches of CLO notes through a wholly-owned subsidiary totaling $ 1.05 billion.

Of the total CLO notes issued, $ 872.8 million were investment grade notes issued to third party investors and $ 177.2 million were below investment grade notes retained by us.

2 unchanged sentences

Thereafter, the outstanding debt balance will be reduced as loans are repaid.

Initially, the proceeds of the issuance of the securities also included $ 73.1 million for the purpose of acquiring additional loan obligations for a period of up to 180 days from the CLO closing date, which we subsequently utilized, resulting in the issuer owning loan obligations with a face value of $ 1.05 billion, representing leverage of 83 % .

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

representing leverage of 83 %.

The notes sold to third parties had an initial weighted average interest rate of 2.36 % plus term SOFR and interest payments on the notes are payable monthly.

In February 2022, we completed CLO 18, issuing eight tranches of CLO notes through two wholly-owned subsidiaries totaling $ 1.86 billion.

In 2022, we completed CLO 18, issuing eight tranches of CLO notes through two wholly-owned subsidiaries totaling $ 1.86 billion.

Of the total CLO notes issued, $ 1.65 billion were investment grade notes issued to third party investors and $ 210.1 million were below investment grade notes retained by us.

21 unchanged sentences

The notes sold to third parties had an initial weighted average interest rate of 1.31 % plus one-month LIBOR and interest payments on the notes are payable monthly.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

In 2021, we completed CLO 15, issuing eight tranches of CLO notes through two wholly-owned subsidiaries totaling $ 747.8 million.

1 unchanged sentence

As of the CLO closing date, the notes were secured by a portfolio of loan obligations with a face value of $ 653.0 million, consisting primarily of bridge loans that were contributed from our existing loan portfolio, and cash.

The financing has an approximate two -and-a-half-year replacement period that allows the principal proceeds and sale proceeds (if any) of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture.

Thereafter, the outstanding debt balance will be reduced as loans are repaid.

Initially, the proceeds of the issuance of the securities also included $ 162.0 million for the purpose of acquiring additional loan obligations for a period of up to 180 days from the CLO closing date, which we subsequently utilized, resulting in the issuer owning loan obligations with a face value of $ 815.0 million, representing leverage of 83 % .

We retained a residual interest in the portfolio with a notional amount of $ 140.6 million, including the $ 73.4 million below investment grade notes.

The notes sold to third parties had an initial weighted average interest rate of 1.37 % plus one-month LIBOR and interest payments on the notes are payable monthly.

In 2021, we completed CLO 14, issuing eight tranches of CLO notes through two wholly-owned subsidiaries totaling $ 724.2 million.

Of the total CLO notes issued, $ 655.5 million were investment grade notes issued to third-party investors and $ 68.7 million were below investment grade notes retained by us.

As of the CLO closing date, the notes were secured by a portfolio of loan obligations with a face value of $ 635.2 million, consisting primarily of bridge loans that were contributed from our existing loan portfolio, and cash.

The financing has a two -and-a-half-year replacement period that allows the principal proceeds and sale proceeds (if any) of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture.

Thereafter, the outstanding debt balance will be reduced as loans are repaid.

Initially, the proceeds of the issuance of the securities also included $ 149.8 million for the purpose of acquiring additional loan obligations for a period of up to 180 days from the CLO closing date, which we subsequently utilized, resulting in the issuer owning loan obligations with a face value of $ 785.0 million, representing leverage of 84 % .

We retained a residual interest in the portfolio with a notional amount of $ 129.5 million, including the $ 68.7 million below investment grade notes.

The notes sold to third parties had an initial weighted average interest rate of 1.33 % plus one-month LIBOR and interest payments on the notes are payable monthly.

In 2020, we completed CLO 13, issuing eight tranches of CLO notes through two wholly-owned subsidiaries totaling $ 738.0 million.

Of the total CLO notes issued, $ 668.0 million were investment grade notes issued to third-party investors and $ 70.0 million were below investment grade notes retained by us.

As of the CLO closing date, the notes were secured by a portfolio of loan obligations with a face value of $ 640.5 million, consisting primarily of bridge loans that were contributed from our existing loan portfolio, and cash.

The financing has a three -year replacement period that allows the principal proceeds and sale proceeds (if any) of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture.

Thereafter, the outstanding debt balance will be reduced as loans are repaid.

The financing had an approximate two-and-a-half-year replacement period that allows the principal proceeds and sale proceeds (if any) of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture.

Thereafter, the outstanding debt balance is being reduced as loans are repaid.

1 unchanged sentence

The notes sold to third parties had an initial weighted average interest rate of 1.37 % plus one-month LIBOR and interest payments on the notes are payable monthly.

At December 31, 2022, $ 205.2 million has been repaid.

In 2021, we completed CLO 14, issuing eight tranches of CLO notes through two wholly-owned subsidiaries totaling $ 724.2 million.

Of the total CLO notes issued, $ 534.2 million were investment grade notes issued to third-party investors and $ 51.6 million were below investment grade notes retained by us.

Of the total CLO notes issued, $ 655.5 million were investment grade notes issued to third party investors and $ 68.7

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

million were below investment grade notes retained by us.

The financing had a three -year replacement period that allowed the principal proceeds and sale proceeds (if any) of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture.

The financing had a two-and-a-half-year replacement period that allowed the principal proceeds and sale proceeds (if any) of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture.

Thereafter, the outstanding debt balance is being reduced as loans are repaid.

1 unchanged sentence

We retained a residual interest in the portfolio with a notional amount of $ 129.5 million, including the $ 68.7 million below investment grade notes.

The notes had an initial weighted average interest rate of 1.50 % plus one-month LIBOR and interest payments on the notes are payable monthly.

The replacement period for CLO 12 ended in November 2022 and $ 154.9 million has been repaid at December 31, 2022.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

In February 2022, we unwound CLO 10, redeeming $ 441.0 million of outstanding notes which were repaid primarily from the refinancing of the remaining assets within CLO 18, as well as with cash held by CLO 10, and expensed $ 1.4 million of deferred financing fees into loss on extinguishment of debt on the consolidated statements of income.

CLO 11 and CLO 9.

In 2021, we unwound both CLO 11 and CLO 9, redeeming $ 889.2 million of outstanding notes which were repaid primarily from the refinancing of the remaining assets within CLOs 17 and 14, as well as with cash held by CLOs 11 and 9, and expensed $ 3.4 million of deferred financing fees into loss on extinguishment of debt on the consolidated statements of income.

In 2020, we unwound CLO 8 redeeming $ 282.9 million of outstanding notes which were repaid primarily from the refinancing of the remaining assets within CLO 13, as well as with cash held by CLO 8, and expensed $ 1.5 million of deferred financing fees into loss on extinguishment of debt on the consolidated statements of income.

The notes sold to third parties had an initial weighted average interest rate of 1.33 % plus one-month LIBOR and interest payments on the notes are payable monthly.

CLO 13 and 12.

In June 2023 and August 2023, we unwound CLO 13 and 12, respectively, redeeming the remaining outstanding notes, which were repaid primarily from the refinancing of the remaining assets within our other CLO vehicles and credit and repurchase facilities.

We expensed $ 1.5 million of deferred financing fees in 2023 related to the unwind of these CLOs, into loss on extinguishment of debt on the consolidated statements of income.

Freddie Mac Q Series Securitization.

In December 2022, we completed our first loan securitization through Freddie Mac’s Q Series securitization program (“Q Series Securitization”), by which we sold to Freddie Mac 11 floating rate loans totaling $ 315.8 million that are secured by first priority mortgage liens on 21 multifamily properties that qualify as mission-driven under the Federal Housing Finance Agency guidelines.

In December 2022, we completed a Q Series securitization, by which we sold to Freddie Mac 11 floating rate loans totaling $ 315.8 million that are secured by first priority mortgage liens on 21 multifamily properties that qualify as mission-driven under the Federal Housing Finance Agency guidelines.

The Q Series securitization is represented through a series of pass-through certificates (the “Certificates”) issued under a pooling and servicing agreement.

We retained certain subordinate and interest-only classes of the Certificates aggregating $ 79.0 million and the remaining Certificates totaling $ 236.9 million were purchased by third party investors, representing leverage of 75 %.

The Certificates sold to third parties pays interest at a rate of 2.00 % plus one-month SOFR, excluding fees and transaction costs, and are payable monthly.

The Certificates sold to third parties pay interest at a rate of 2.00 % plus one-month SOFR, excluding fees and transaction costs, and are payable monthly.

As part of the securitization transaction, we released all mortgage servicing obligations and rights to Freddie Mac who was designated as the master servicer.

4 unchanged sentences

A summary of our senior unsecured notes is as follows ($ in thousands):

December 31, 2022

December 31, 2021

December 31, 2023 December 31, 2022

Notes Issuance

Date Maturity UPB Carrying

Value (1) Wtd.

Rate (2) UPB Carrying

Value (1) Wtd.

7.75 % Notes (3)

2026 $ 95,000 $ 93,697 7.75 % $ — $ — —

8.50 % Notes (3)

2027 150,000 148,023 8.50 % 150,000 147,519 8.50 %

5.00 % Notes (3)

2028 180,000 177,875 5.00 % 180,000 177,450 5.00 %

4.50 % Notes (3)

2026 270,000 267,763 4.50 % 270,000 266,926 4.50 %

5.00 % Notes (3)

2026 175,000 173,542 5.00 % 175,000 172,917 5.00 %

4.50 % Notes (3)

2027 275,000 273,444 4.50 % 275,000 272,960 4.50 %

4.75 % Notes (4)

2024 110,000 109,721 4.75 % 110,000 109,369 4.75 %

5.75 % Notes (4)

2024 90,000 89,903 5.75 % 90,000 89,514 5.75 %

2023 — — — 70,750 70,613 8.00 %

5.625 % Notes

2018 May 2023 — — — 78,850 78,726 5.63 %

$ 1,345,000 $ 1,333,968 5.41 % $ 1,399,600 $ 1,385,994 5.40 %

________________________________________

(1) At December 31, 2023 and 2022, the carrying value is net of deferred financing fees of $ 11.0 million and $ 13.6 million, respectively.

8 unchanged sentences

Except as noted below, we used the proceeds of our senior unsecured debt offerings to make investments and for general corporate purposes.

In March 2023, we issued $ 95.0 million aggregate principal amount of 7.75 % senior unsecured notes due in 2026 in a private offering.

We received proceeds of $ 93.4 million from the issuance, after deducting the placement agent commission and other offering expenses.

We used $ 70.8 million of the proceeds, which included accrued interest and other fees, to repurchase the remaining portion of our 8.00 % senior unsecured notes due in 2023.

In October 2022, we issued $ 150.0 million aggregate principal amount of 8.50 % senior unsecured notes due in 2027 in a private offering.

We received net proceeds of $ 147.5 million from the issuance, after deducting the underwriting discount and other offering expenses.

We used $ 47.5 million of the proceeds, which includes accrued interest and other fees, to repurchase a portion of our 5.625 % senior unsecured notes.

We received proceeds of $ 147.5 million from the issuance, after deducting the underwriting discount and other offering expenses.

We used $ 47.5 million of the proceeds, which included accrued interest and other fees, to repurchase a portion of our 5.625 % senior unsecured notes.

In 2021, we issued $ 180.0 million aggregate principal amount of 5.00 % senior unsecured notes due in 2028 in a private offering.

We received net proceeds of $ 177.2 million from the issuance, after deducting the underwriting discount and other offering expenses.

We received proceeds of $ 177.2 million from the issuance, after deducting the underwriting discount and other offering expenses.

In 2021, we issued $ 270.0 million aggregate principal amount of 4.50 % senior unsecured notes due in 2026 in a private offering.

We received net proceeds of $ 265.8 million from the issuance, after deducting the underwriting discount and other offering expenses.

We received proceeds of $ 265.8 million from the issuance, after deducting the underwriting discount and other offering expenses.

In 2021, we issued $ 175.0 million aggregate principal amount of 5.00 % senior unsecured notes due in 2026 in a private offering.

We received net proceeds of $ 172.3 million from the issuance, after deducting the underwriting discount and other offering expenses.

We received proceeds of $ 172.3 million from the issuance, after deducting the underwriting discount and other offering expenses.

In 2020, we issued $ 70.8 million aggregate principal amount of 8.00 % senior unsecured notes due in April 2023 in a private offering.

We received total proceeds of $ 69.6 million from the issuance, after deducting the underwriting discount and other offering expenses.

We received proceeds of $ 69.6 million from the issuance, after deducting the underwriting discount and other offering expenses.

We used a portion of the proceeds from the issuance to repay secured indebtedness.

7 unchanged sentences

In 2018, we issued $ 125.0 million aggregate principal amount of 5.625 % senior unsecured notes due in May 2023 in a private offering.

We received total proceeds of $ 122.3 million from the issuance, after deducting the underwriting discount and other offering expenses.

We received proceeds of $ 122.3 million from the issuance, after deducting the underwriting discount and other offering expenses.

We used a significant portion of the proceeds to fully redeem our 7.375 % senior unsecured notes.

In October 2022, we repaid $ 46.2 million of the outstanding principal balance as noted above.

In May 2023, the remaining balance of these notes matured and were redeemed with cash.

Convertible Senior Unsecured Notes

In August 2022, we issued $ 287.5 million in aggregate principal amount of 7.50 % convertible senior notes (the “ 7.50 % Convertible Notes”) through a private placement offering.

In 2022, we issued $ 287.5 million in aggregate principal amount of 7.50 % convertible senior notes (the “ 7.50 % Convertible Notes”) through a private placement offering.

The 7.50 % Convertible Notes pay interest semiannually in arrears and are scheduled to mature in August 2025, unless earlier converted or repurchased by the holders pursuant to their terms.

2 unchanged sentences

We used $ 203.1 million of the net proceeds to repurchase a portion of our 4.75 % convertible senior notes (the “ 4.75 % Convertible Notes”), which included $ 5.2 million of accrued interest and repurchase premiums, and expensed $ 3.3 million of deferred financing fees into loss on extinguishment of debt on the consolidated statements of income.

At December 31, 2022, the 7.50 % Convertible Notes had a conversion rate of 59.8892 shares of common stock per $ 1,000 of principal, which represented a conversion price of $ 16.70 per share of common stock.

ARBOR REALTY TRUST, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

In the fourth quarter of 2022, the remaining $ 66.1 million principal amount of our 4.75 % Convertible Notes matured and were fully settled with cash.

December 31, 2023, the 7.50 % Convertible Notes had a conversion rate of 60.3915 shares of common stock per $1,000 of principal, which represented a conversion price of $ 16.56 per share of common stock.

In 2022, the remaining $ 66.1 million principal amount of our 4.75 % Convertible Notes matured and were fully settled with cash.

Our convertible senior unsecured notes are not redeemable by us prior to their maturities and are convertible by the holder into, at our election, cash, shares of our common stock or a combination of both, subject to the satisfaction of certain conditions and during specified periods.

The conversion rates are subject to adjustment upon the occurrence of certain specified events and the holders may require us to repurchase all, or any portion, of their notes for cash equal to 100 % of the principal amount, plus accrued and unpaid interest, if we undergo a fundamental change specified in the agreements.

On January 1, 2022, we adopted ASU 2020-06, see Note 2 for details, which no longer allows for the allocation of proceeds between debt and equity components, eliminates the amortization of the debt discount and requires the if-converted method to calculate diluted EPS, regardless of the settlement intent.

The UPB, unamortized discount and net carrying amount of the liability and equity components of our convertible notes are as follows (in thousands):

Unamortized Debt

Unamortized Deferred

Financing Fees

The UPB and net carrying value of our convertible notes are as follows (in thousands):

Period UPB Unamortized Deferred

Financing Fees Net Carrying

December 31, 2023 $ 287,500 $ 4,382 $ 283,118

December 31, 2022 $ 287,500 $ 7,144 $ 280,356

During 2023, we incurred interest expense on the convertible notes totaling $ 24.8 million, of which $ 22.1 million and $ 2.7 million related to the cash coupon and deferred financing fees, respectively.

During 2022, we incurred interest expense on the notes totaling $ 19.8 million, of which $ 16.9 million and $ 2.9 million related to the cash coupon and deferred financing fees, respectively.

During 2021, we incurred interest expense on the notes totaling $ 18.6 million, of which $ 12.8 million, $ 3.2 million and $ 2.6 million related to the cash coupon, amortization of the debt discount and of the deferred financing fees, respectively.

During 2020, we incurred interest expense on the notes totaling $ 20.0 million, of which $ 13.4 million, $ 3.6 million and $ 3.0 million related to the cash coupon, amortization of the debt discount and of the deferred financing fees, respectively.

Including the amortization of the deferred financing fees and debt discount, our weighted average total cost of the notes was 8.42 % and 6.71 % at December 31, 2022 and 2021, respectively, or 5.73 % at December 31, 2021, excluding the amortization of the debt discount (which ceased on January 1, 2022 with the adoption of ASU 2020-06).

Including the amortization of the deferred financing fees, our weighted average total cost of the convertible notes was 8.42 % at both December 31, 2023 and 2022.

Junior Subordinated Notes

7 unchanged sentences

We were in compliance with all financial covenants and restrictions at December 31, 2023.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Our CLO vehicles contain interest coverage and asset overcollateralization covenants that must be met as of the waterfall distribution date in order for us to receive such payments.

1 unchanged sentence

Our CLOs were in compliance with all such covenants at December 31, 2023, as well as on the most recent determination dates in January 2024.

In the event of a breach of the CLO covenants that could not be cured in the near-term, we would be required to fund our non-CLO expenses, including employee costs, distributions required to maintain our REIT status, debt costs, and other expenses with (1) cash on hand, (2) income from any CLO not in breach of a covenant test, (i3) income from real property and loan assets, (4) sale of assets, or (5) accessing the equity or debt capital markets, if available.

In the event of a breach of the CLO covenants that could not be cured in the near-term, we would be required to fund our non-CLO expenses, including employee costs, distributions required to maintain our REIT status, debt costs, and other expenses with (1) cash on hand, (2) income from any CLO not in breach of a covenant test, (3) income from real property and loan assets, (4) sale of assets, or (5) accessing the equity or debt capital markets, if available.

We have the right to cure covenant breaches which would resume normal residual payments to us by purchasing non-performing loans out of the CLOs.

However, we may not have sufficient liquidity available to do so at such time.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Our CLO compliance tests as of the most recent determination dates in January 2024 are as follows:

Cash Flow Triggers

Cash Flow Triggers CLO 14 CLO 15 CLO 16 CLO 17 CLO 18 CLO 19

Overcollateralization (1)

Current 120.00 % 120.85 % 120.81 % 121.71 % 123.87 % 120.30 %

Limit 118.76 % 119.85 % 120.21 % 121.51 % 123.03 % 119.30 %

Pass / Fail Pass Pass Pass Pass Pass Pass

Interest Coverage (2)

Current 151.42 % 157.34 % 150.93 % 136.66 % 137.10 % 134.89 %

Limit 120.00 % 120.00 % 120.00 % 120.00 % 120.00 % 120.00 %

Pass / Fail Pass Pass Pass Pass Pass Pass

________________________________________

(1) The overcollateralization ratio divides the total principal balance of all collateral in the CLO by the total principal balance of the bonds associated with the applicable ratio.

3 unchanged sentences

Our CLO overcollateralization ratios as of the determination dates subsequent to each quarter are as follows:

Determination (1)

Determination (1) CLO 14 CLO 15 CLO 16 CLO 17 CLO 18 CLO 19

January 2024 120.00 % 120.85 % 120.81 % 121.71 % 123.87 % 120.30 %

October 2023 119.76 % 120.85 % 121.21 % 122.51 % 124.03 % 120.30 %

July 2023 119.76 % 120.85 % 121.21 % 122.51 % 124.03 % 120.30 %

April 2023 119.76 % 120.85 % 121.21 % 122.51 % 124.03 % 120.30 %

January 2023 119.76 % 120.85 % 121.21 % 122.51 % 124.03 % 120.30 %

________________________________________

(1) This table represents the quarterly trend of our overcollateralization ratio, however, the CLO determination dates are monthly and we were in compliance with this test for all periods presented.

2 unchanged sentences

The junior subordinated indentures are also cross-defaulted with each other.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Note 11 — Allowance for Loss-Sharing Obligations

6 unchanged sentences

Ending balance $ 71,634 $ 57,168

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

When a loan is sold under the Fannie Mae DUS program, we undertake an obligation to partially guarantee the performance of the loan.

A liability is recognized for the fair value of the guarantee obligation undertaken for the non-contingent aspect of the guarantee and is removed only upon either the expiration or settlement of the guarantee.

At both December 31, 2022 and 2021, we had $ 34.4 million of guarantee obligations included in the allowance for loss-sharing obligations.

At December 31, 2023 and 2022, we had $ 34.6 million and $ 34.4 million, respectively, of guarantee obligations included in the allowance for loss-sharing obligations.

In addition to and separately from the fair value of the guarantee, we estimate our allowance for loss-sharing under CECL over the contractual period in which we are exposed to credit risk.

2 unchanged sentences

The settled loss is often net of any previously advanced principal and interest payments in accordance with the DUS program, which are reflected as reductions to the proceeds needed to settle losses.

At December 31, 2022 and 2021, we had outstanding advances of $ 0.8 million and less than $ 0.1 million, respectively, which were netted against the allowance for loss-sharing obligations.

At December 31, 2023 and 2022, we had outstanding advances of $ 1.1 million and $ 0.8 million, respectively, which were netted against the allowance for loss-sharing obligations.

At December 31, 2023 and 2022, our allowance for loss-sharing obligations, associated with expected losses under CECL, was $ 37.0 million and $ 22.7 million, respectively, and represented 0.17 % and 0.12 %, respectively, of our Fannie Mae servicing portfolio.

During 2022, we recorded a $ 1.1 million increase in CECL reserves, which included a $ 1.2 million recovery for a loan that paid off during the second quarter of 2022.

During 2023, we recorded a $ 14.3 million increase in CECL reserves.

At December 31, 2023 and 2022, the maximum quantifiable liability associated with our guarantees under the Fannie Mae DUS agreement was $ 3.95 billion and $ 3.49 billion, respectively.

4 unchanged sentences

We do not use these derivatives for speculative purposes, but are instead using them to manage our interest rate and credit risk exposure.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Agency Rate Lock and Forward Sale Commitments.

5 unchanged sentences

The forward sale contract locks in an interest rate and price for the sale of the loan.

The terms of the contract with the investor and the rate lock with the borrower are matched in substantially all respects, with the objective of eliminating interest rate risk to the extent practical.

The terms of the contract with the investor and the rate lock with the borrower are matched in substantially all aspects, with the objective of eliminating interest rate risk to the extent practical.

Sale commitments with the investors have an expiration date that is longer than our related commitments to the borrower to allow, among other things, for closing of the loan and processing of paperwork to deliver the loan into the sale commitment.

1 unchanged sentence

The estimated fair value of rate lock commitments also includes the fair value of the expected net cash flows associated with the servicing of the loan which is recorded as income from MSRs in the consolidated statements of income.

During 2022, 2021 and 2020, we recorded net losses of $3.6 million, net losses of $ 0.8 million and net gains of $ 3.4 million, respectively, from changes in the fair value of these derivatives and $ 69.3 million, $ 130.2 million and $ 165.5 million, respectively, of income from MSRs.

During 2023, 2022 and 2021, we recorded net gains of $ 8.8 million, net losses of $ 3.6 million and net losses of $ 0.8 million, respectively, from changes in the fair value of these derivatives and $ 69.9 million, $ 69.3 million and $ 130.2 million, respectively, of income from MSRs.

See Note 13 for details

Interest Rate and Credit Default Swaps (“Swaps”).

We enter into over-the-counter swaps to hedge our interest rate and credit risk exposure inherent in (1) our held-for-sale Agency Business Private Label loans from the time the loans are rate locked until sale or securitization, and (2) our Agency Business SFR – fixed rate loans from the time the loans are originated until the time they can be financed with match term fixed rate securitized debt.

Our interest rate swaps typically have a three-month maturity and are tied to the five-year and ten-year swap rates.

Treasury Futures and Credit Default Swaps.

We enter into over-the-counter treasury futures and credit default swaps to hedge our interest rate and credit risk exposure inherent in (1) our held-for-sale Agency Business Private Label loans from the time the loans are rate locked until sale or securitization, and (2) our Agency Business SFR – fixed rate loans from the time the loans are originated until the time they can be financed with match term fixed rate securitized debt.

Our treasury futures typically have a three-month maturity and are tied to the five-year and ten-year treasury rates.

Our credit default swaps typically have a five-year maturity, are tied to the credit spreads of the underlying bond issuers and we typically hold our position until we price our Private Label loan securitizations.

The Swaps do not meet the criteria for hedge accounting, are cleared by a central clearing house and variation margin payments, made in cash, are treated as a legal settlement of the derivative itself as opposed to a pledge of collateral.

During 2022, we recorded realized and unrealized gains of $ 26.9 million and $ 3.5 million, respectively, to our Agency Business related to our Swaps.

During 2021, we recorded realized and unrealized losses of less than $ 0.1 million and $ 1.5 million, respectively, to our Agency Business related to our Swaps.

During 2020, we recorded realized losses of $ 3.0 million and unrealized gains of $ 0.2 million to our Structured Business and realized losses of $ 57.1 million and unrealized losses of $ 1.7 million to our Agency Business related to our Swaps.

The realized and unrealized gains and losses are recorded in gain (loss) on derivative instruments, net.

A summary of our non-qualifying derivative financial instruments in our Agency Business is as follows ($ in thousands):

December 31, 2022

Balance Sheet

Rate lock commitments

Other assets/other liabilities

Forward sale commitments

Other assets/other liabilities

December 31, 2021

Rate lock commitments

Other assets/other liabilities

Forward sale commitments

Other assets/other liabilities

These instruments do not meet the criteria for hedge accounting, are cleared by a central clearing house and variation margin payments, made in cash, and are treated as a legal settlement of the derivative itself.

Our agreements with the counterparties provide for bilateral collateral pledging based on the counterparties' market value.

The counterparties have the right to re-pledge the collateral posted, but have the obligation to return

ARBOR REALTY TRUST, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

the pledged collateral as the market value of the treasury futures change.

Our policy is to record the asset and liability positions on a net basis.

At December 31, 2023 and 2022, we had $ 1.5 million and $ 9.5 million, respectively, included in others assets, which was comprised of cash posted as collateral of $ 1.9 million and $ 6.3 million, respectively, and a $ 0.4 million loss and a $ 3.2 million gain, respectively, from the fair value of our treasury futures.

During 2023, 2022 and 2021 we recorded realized gains and unrealized losses of $ 1.6 million and $ 3.7 million, realized and unrealized gains of $ 26.9 million and $ 3.5 million and realized and unrealized losses of less than $ 0.1 million and $ 1.5 million, respectively, to our Agency Business.

A summary of our non-qualifying derivative financial instruments in our Agency Business is as follows ($ in thousands):

December 31, 2023

Derivative Count Notional Value Balance Sheet Location Derivative Assets Derivative Liabilities

Rate lock commitments 3 $ 26,800 Other assets/other liabilities $ 428 $ ( 759 )

Forward sale commitments 33 559,079 Other assets/other liabilities 6,119 ( 262 )

Treasury futures 82 8,200 — —

$ 594,079 $ 6,547 $ ( 1,021 )

December 31, 2022

Rate lock commitments 6 $ 91,472 Other assets/other liabilities $ 354 $ ( 1,070 )

Forward sale commitments 27 294,451 Other assets/other liabilities 1,151 ( 3,827 )

Treasury futures 1,298 129,800 — —

$ 515,723 $ 1,505 $ ( 4,897 )

Note 13 — Fair Value

1 unchanged sentence

The following table summarizes the principal amounts, carrying values and the estimated fair values of our financial instruments (in thousands):

December 31, 2022

December 31, 2021

Notional Amount

December 31, 2023 December 31, 2022

Notional Amount Carrying

Value Estimated

Fair Value Principal /

Notional Amount Carrying

Value Estimated

Financial assets:

1 unchanged sentence

Loans held-for-sale, net 552,325 551,707 566,451 368,066 354,070 362,054

Capitalized mortgage servicing rights, net

Capitalized mortgage servicing rights, net n/a 391,254 510,472 n/a 401,471 530,913

Securities held-to-maturity, net 230,495 155,279 129,390 234,255 156,547 144,571

7 unchanged sentences

Derivative financial instruments 138,270 1,021 1,021 273,973 4,897 4,897

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Assets and liabilities disclosed at fair value are categorized based upon the level of judgment associated with the inputs used to measure their fair value.

11 unchanged sentences

Fair values of impaired loans and investments are estimated using inputs that require significant judgments, which include assumptions regarding discount rates, capitalization rates, creditworthiness of major tenants, occupancy rates, availability of financing, exit plans and other factors (Level 3).

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Loans held-for-sale, net.

8 unchanged sentences

Derivative financial instruments.

Fair values of rate lock and forward sale commitments are estimated using valuation techniques, which include internally-developed models developed based on changes in the U.S.

Fair values of rate lock and forward sale commitments are estimated using valuation techniques, which include internally-developed models based on changes in the U.S.

Treasury rate and other observable market data (Level 2).

1 unchanged sentence

We also consider the impact of counterparty non-performance risk when measuring the fair value of these derivatives.

Given the credit quality of our counterparties, the short duration of interest rate lock commitments and forward sale contracts, and our historical experience, the risk of nonperformance by our counterparties is not significant.

Credit and repurchase facilities.

4 unchanged sentences

Fair values are estimated based on broker quotations, representing the discounted expected future cash flows at a yield that reflects current market interest rates and credit spreads (Level 3).

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Senior unsecured notes.

5 unchanged sentences

The fair values of these financial assets and liabilities are determined using the following input levels at December 31, 2023 (in thousands):

Fair Value Measurements Using Fair

Value Hierarchy

Carrying Value Fair Value Fair Value Measurements Using Fair Value Hierarchy

Level 1 Level 2 Level 3

Financial assets:

2 unchanged sentences

Derivative financial instruments $ 1,021 $ 1,021 $ — $ 1,021 $ —

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

We measure certain financial and non-financial assets at fair value on a nonrecurring basis.

The fair values of these financial and non-financial assets, if applicable, were determined using the following input levels at December 31, 2023 (in thousands):

Fair Value Measurements Using Fair

Value Hierarchy

Fair Value Measurements Using Fair Value Hierarchy

Net Carrying Value Fair Value Level 1 Level 2 Level 3

Financial assets:

2 unchanged sentences

Loans held-for-sale (2) 18,057 18,057 — 18,057 —

(1) We had an allowance for credit losses of $ 85.4 million relating to seven impaired loans with an aggregate carrying value, before loan loss reserves, of $ 147.1 million at December 31, 2022.

(2) We recorded an impairment loss of $ 15.7 million related to 13 loans held-for-sale with an aggregate carrying value, before unrealized impairment losses, of $ 150.0 million.

$ 302,342 $ 302,342 $ — $ 18,057 $ 284,285

________________________________________

(1) We had an allowance for credit losses of $ 120.6 million relating to nineteen impaired loans with an aggregate carrying value, before loan loss reserves, of $ 404.9 million at December 31, 2023.

(2) We have an impairment of $ 2.0 million related to 6 loans held-for-sale with an aggregate carrying value, before unrealized impairment losses, of $ 20.0 million.

Loan impairment assessments.

3 unchanged sentences

These valuations require significant judgments, which include assumptions regarding capitalization and discount rates, revenue growth rates, creditworthiness of major tenants, occupancy rates, availability of financing, exit plan and other factors.

Loans held-for-sale are generally transferred and sold within 60 - 180 days of loan origination and are reported at lower of cost or market.

Loans held-for-sale are generally expected to be transferred or sold within 60 days to 180 days of loan origination and are reported at lower of cost or market.

We consider a loan classified as held-for-sale impaired if, based on current information, it is probable that we will sell the loan below par, or not be able to collect all principal and interest in accordance with the contractual terms of the loan agreement.

1 unchanged sentence

The tables above and below include all impaired loans, regardless of the period in which the impairment was recognized.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Quantitative information about Level 3 fair value measurements at December 31, 2023 is as follows ($ in thousands):

Valuation Techniques

Significant Unobservable Inputs

Fair Value Valuation Techniques Significant Unobservable Inputs

Financial assets:

Impaired loans:

Discounted cash flows

Discount rate

Multifamily $ 222,540 Discounted cash flows Capitalization rate 6.35 %

Land 50,000 Discounted cash flows Discount rate 21.50 %

Revenue growth rate 3.00 %

Discount rate 11.25 %

Discounted cash flows

Capitalization rate

Retail 11,745 Discounted cash flows Capitalization rate 9.25 %

Revenue growth rate 3.00 %

Derivative financial instruments:

Rate lock commitments

Discounted cash flows

W/A discount rate

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Rate lock commitments 428 Discounted cash flows W/A discount rate 13.38 %

The derivative financial instruments using Level 3 inputs are outstanding for short periods of time (generally less than 60 days).

A roll-forward of Level 3 derivative instruments is as follows (in thousands):

Fair Value Measurements Using

Significant Unobservable Inputs

Fair Value Measurements Using Significant Unobservable Inputs

for the Year Ended December 31,

2023 2022 2021

Derivative assets and liabilities, net

Beginning balance $ 354 $ 295 $ 1,967

Settlements ( 66,407 ) ( 64,896 ) ( 112,836 )

Realized gains recorded in earnings 66,053 64,601 110,869

2 unchanged sentences

The components of fair value and other relevant information associated with our rate lock commitments, forward sales commitments and the estimated fair value of cash flows from servicing on loans held-for-sale are as follows (in thousands):

Fair Value of

Interest Rate

Total Fair Value

December 31, 2022

Principal Amount

Servicing Rights

Movement Effect

December 31, 2023 Notional/

Principal Amount Fair Value of

Servicing Rights Interest Rate

Movement Effect Unrealized

Impairment Loss Total Fair Value

Rate lock commitments $ 26,800 $ 428 $ 759 $ — $ 1,187

1 unchanged sentence

Loans held-for-sale, net (1) 552,325 7,784 — ( 1,989 ) 5,795

Total $ 8,212 $ — $ ( 1,989 ) $ 6,223

________________________________________

(1) Loans held-for-sale, net are recorded at the lower of cost or market on an aggregate basis and includes fair value adjustments related to estimated cash flows from MSRs.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

We measure certain assets and liabilities for which fair value is only disclosed.

1 unchanged sentence

Fair Value Measurements Using Fair Value Hierarchy

Carrying Value

Carrying Value Fair Value Level 1 Level 2 Level 3

Financial assets:

11 unchanged sentences

Impact of COVID-19.

The magnitude and duration of COVID-19 and its impact on our business and on our borrowers is uncertain and will mostly depend on future events, which cannot be predicted.

As this pandemic continues and if economic conditions deteriorate, it may have long-term impacts on our financial position, results of operations and cash flows.

The extent and duration of the economic fallout from the COVID-19 pandemic to our business and our borrowers, particularly rising inflation, increasing interest rates and dislocation in capital markets, remains unclear and presents risk with respect to our financial condition, results of operations, liquidity, and our ability to pay distributions.

Risk Factors and Note 2 for further discussion of COVID-19.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Agency Business Commitments.

8 unchanged sentences

At December 31, 2023, the restricted liquidity requirement totaled $ 76.2 million and was satisfied with a $ 64.0 million letter of credit and cash issued to Fannie Mae.

At December 31, 2022, reserve requirements for the Fannie Mae DUS loan portfolio will require us to fund $ 37.0 million in additional restricted liquidity over the next 48 months, assuming no further principal paydowns, prepayments, or defaults within our at-risk portfolio.

At December 31, 2023, reserve requirements for the current Fannie Mae DUS loan portfolio will require us to fund $ 36.6 million in additional restricted liquidity over the next 48 months, assuming no further principal paydowns, prepayments, or defaults within our at-risk portfolio.

Fannie Mae periodically reassesses these collateral requirements and may make changes to these requirements in the future.

5 unchanged sentences

We are also subject to capital requirements on an annual basis for Ginnie Mae and FHA, and we believe we have met all requirements at December 31, 2023.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

As an approved designated seller/servicer under Freddie Mac’s SBL program, we are required to post collateral to ensure that we are able to meet certain purchase and loss obligations required by this program.

4 unchanged sentences

At December 31, 2023, the maturities of our debt obligations and the minimum annual operating lease payments under leases with a term in excess of one year are as follows (in thousands):

Minimum Annual

Operating Lease

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

At December 31, 2022 and 2021, our leases had remaining lease terms of 0.2 – 10.4 years and 0.1 – 9.0 years, respectively, with a weighted average remaining lease term of 8.2 years for both periods and a weighted average discount rate of 6.8 % and 4.0 % , respectively.

Year Debt Obligations Minimum Annual Operating Lease Payments Total

2024 $ 1,855,247 $ 10,820 $ 1,866,067

2025 2,523,024 11,206 2,534,230

2026 1,996,721 11,297 2,008,018

2027 4,510,642 9,782 4,520,424

2028 946,089 9,064 955,153

Thereafter 154,336 27,755 182,091

Total $ 11,986,059 $ 79,924 $ 12,065,983

At December 31, 2023 and 2022, our leases had remaining lease terms of 0.8 – 10.1 years and 0.2 – 10.4 years, respectively, with a weighted average remaining lease term of 7.6 years and 8.2 years, respectively, and a weighted average discount rate of 5.7 % and 6.8 %, respectively.

We recorded lease expense of $ 10.9 million, $ 9.6 million and $ 9.3 million during 2023, 2022 and 2021, respectively.

2 unchanged sentences

Specific requirements include, but are not limited to, property renovations, building construction and conversions based on criteria met by the borrower in accordance with the loan agreements.

We are currently neither subject to any material litigation nor, to the best of our knowledge, threatened by any material litigation other than the following:

We are subject to a variety of claims and suits that arise from time to time in the ordinary course of our business.

Although management currently believes that resolving claims against us, individually or in aggregate, will not have a material adverse impact in our consolidated financial statements, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future.

We are currently neither subject to any material litigation nor, to the best of our knowledge, threatened by any material litigation.

The following are details of a litigation that was settled and discontinued in 2023.

In June 2011, three related lawsuits were filed by the Extended Stay Litigation Trust (the “Trust”), a post-bankruptcy litigation trust alleged to have standing to pursue claims that previously had been held by Extended Stay, Inc.

and the Homestead Village L.L.C.

family of companies (together “ESI”) (formerly Chapter 11 debtors, together the “Debtors”) that have emerged from bankruptcy.

Two of the lawsuits were filed in the U.S.

Bankruptcy Court for the Southern District of New York, and the third in the Supreme Court of the State of New York, New York County.

family of companies that had emerged from bankruptcy.

There were 73 defendants in the three lawsuits, including 55 corporate and partnership entities and 18 individuals.

A subsidiary of ours and certain other entities that are affiliates of ours are included as defendants.

The New York State Court action was removed to the Bankruptcy Court.

Currently, there is just a single case in Bankruptcy Court.

The lawsuits all alleged, as a factual basis and background, certain facts surrounding the June 2007 leveraged buyout of ESI from affiliates of Blackstone Capital.

Our subsidiary, Arbor ESH II, LLC, had a $ 115.0 million investment in the Series A1 Preferred Units of a holding company of Extended Stay, Inc.

The New York State Court action and one of the two federal court actions named as defendants Arbor ESH II, LLC, Arbor Commercial Mortgage, LLC (“ACM”), and ABT-ESI LLC, an entity in which we have a membership interest, among the broad group of defendants.

These two actions were commenced by substantially identical complaints.

The defendants are alleged, among other things, to have breached fiduciary and contractual duties by causing or allowing the Debtors to pay illegal dividends or other improper distributions of value at a time when the Debtors were insolvent.

The Trust also alleges that the defendants aided and abetted, induced, or participated in breaches of fiduciary duty, waste, and unjust enrichment (“Fiduciary Duty Claims”) and name a director of ours, and a former general counsel of ACM, each of whom had served on the Board of Directors of ESI for a period of time.

We are defending these two defendants and paying the costs of such defense.

On the basis of the foregoing allegations, the Trust has asserted claims under a number of common law theories, seeking the return of assets transferred by the Debtors prior to the Debtors’ bankruptcy filing.

In the third action, filed in Bankruptcy Court, the same plaintiff, the Trust, named ACM and ABT-ESI LLC, together with a number of other defendants, and asserts claims, including constructive and fraudulent conveyance claims, under state and federal statutes, as well as a claim under the Federal Debt Collection Procedure Act.

In June 2013, the Trust filed a motion to amend the lawsuits, to, among other things, (1) consolidate the lawsuits into one lawsuit, (2) remove 47 defendants from the lawsuits, none of whom are related to us, so that there are 26 remaining defendants, including 16 corporate and partnership entities and 10 individuals, and (3) reduce the counts within the lawsuits from over 100 down to 17 .

The remaining counts in the Trust’s amended complaint against our affiliates are principally state law claims for breach of fiduciary duties, waste, unlawful dividends and unjust enrichment, and claims under the Bankruptcy Code for avoidance and recovery actions, among others.

The Bankruptcy Court granted the motion to amend and the amended complaint has been filed.

The amended complaint seeks approximately $ 139.0 million in the aggregate, plus interest from the date of the alleged unlawful transfers, from director designees, portions of which are also sought from our affiliates as well as from unaffiliated defendants.

We moved to dismiss the referenced remaining actions in December 2013.

A subsidiary of ours and certain individuals and other entities that are affiliates of ours were included as defendants.

In June 2013, the Trust amended the lawsuits, to, among other things, (1) consolidate the lawsuits into one lawsuit, (2) remove 47 defendants from the lawsuits, none of whom were related to us, so that there were then 26 remaining defendants, including 16 corporate and partnership entities and 10 individuals, and (3) reduce the counts within the lawsuits from over 100 down to 17 (as consolidated, the "Action").

For more detailed information regarding the Action, please refer to Note 14 of our 2022 Annual Report.

After extensive motion practice and discovery, in early December 2022, the plaintiff and certain co-defendants, including our affiliates, commenced discussions regarding a possible settlement of the Action, and in late December 2022, those parties reached an agreement in principle to settle the Action for a total of $ 38.0 million.

We agreed to pay up to $ 7.4 million of the settlement amount, which amount was accrued in our December 31, 2022 financial statements.

In early March 2023, the parties to the settlement finalized the settlement documents and on April 25, 2023, the Bankruptcy Court approved the settlement.

Following the Bankruptcy Court approval, the parties made the agreed upon payments, the broad mutual releases became effective and on June 23, 2023, the litigation was discontinued, with prejudice.

ARBOR REALTY TRUST, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

After supplemental briefing and multiple adjourned conferences, in August 2020, the Court issued a decision granting our motion to dismiss in part, dismissing 9 of the 17 counts.

The Court permitted claims against director designees to proceed on theories of authorization of illegal dividends and breach of fiduciary duty.

The Court permitted claims against the defendant entities, including our affiliated entities, to proceed on theories of constructive fraudulent transfer and fraudulent transfer under state and federal law.

Moreover, the Court affirmatively dismissed four counts against the defendant entities to the extent they are based on distributions from certain so-called LIBOR Floor Certificates.

According to the amended complaint, the total LIBOR Floor Certificate transfers were $ 74.0 million in value.

As a result, with what remains of the amended complaint, total possible liability against the affiliated entities has correspondingly fallen, whereas total possible liability against the director designees remains at approximately $ 139.0 million.

Since the Court’s decision in August 2020, the parties have engaged in extensive discovery.

In early December 2022, the plaintiff and certain co-defendants, including our affiliates, commenced discussions regarding a possible settlement of the litigation and in late December 2022, those parties reached an agreement in principal to settle the litigation.

As part of the agreement, we agreed to pay $ 7.4 million to the plaintiff, and we have accrued that amount in our December 31, 2022 financial statements.

As of the date of this report, the parties are negotiating the settlement documents and the settlement will be subject to the approval of the United States Bankruptcy Court of the Southern District of New York.

As part of the settlement, we expect to secure certain rights against those co-defendants who have not agreed to participate in the settlement, however, we can give no assurances that will we be successful in our efforts to recover any part of the amount we have accrued.

Due to Borrowers.

11 unchanged sentences

Our operating results and cash flows include the gross asset and liability amounts related to the Securitization Entities as opposed to our net economic interests in those entities.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The assets and liabilities related to these consolidated Securitization Entities are as follows (in thousands):

December 31, 2022

December 31, 2021

December 31, 2023 December 31, 2022

Restricted cash $ 593,956 $ 710,775

Loans and investments, net 7,826,793 8,900,104

Other assets 193,822 174,382

Total assets $ 8,614,571 $ 9,785,261

Securitized debt $ 6,935,010 $ 7,849,270

8 unchanged sentences

A summary of our variable interests in identified VIEs, of which we are not the primary beneficiary, at December 31, 2023 is as follows (in thousands):

Carrying Amount (1)

Type Carrying Amount (1)

Loans $ 524,915

APL certificates 131,137

2 unchanged sentences

Agency interest only strips 162

Total $ 716,488

________________________________________

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(1) Represents the carrying amount of loans and investments before reserves.

6 unchanged sentences

The additional shares issued have the same terms as the original issuance.

During 2021, we completed the public offerings of 8,050,000 shares of 6.25 % Series F fixed-to-floating rate cumulative redeemable preferred stock, 5,750,000 shares of 6.25 % Series E cumulative redeemable preferred stock, and 9,200,000 shares of 6.375 % Series D cumulative redeemable preferred stock.

The Series F, Series E and Series D preferred stock are not redeemable by us prior to October 12, 2026, August 11, 2026 and June 2, 2026, respectively.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The Series D, Series E and Series F preferred stock are not redeemable by us prior to June 2, 2026, August 11, 2026 and October 12, 2026, respectively.

Common Stock.

In November 2022, we amended the equity distribution agreement with JMP Securities LLC ("JMP").

In accordance with the terms of the amendment, we may offer and sell up to 25,000,000 shares of our common stock in "At-The-Market"

equity offerings through JMP by means of ordinary brokers' transactions or otherwise at market prices prevailing at the time of sale, or at negotiated prices.

During 2022, we sold 18,860,788 shares of our common stock for net proceeds of $ 285.0 million.

At December 31, 2022, we had 18,290,000 shares available under the amended agreement.

In the first quarter of 2022, we completed a public offering of 7,475,000 shares of our common stock (including the full exercise of the overallotment) for $ 16.57 per share and received net proceeds of $ 123.7 million after deducting the underwriter’s discount and other offering expenses.

The proceeds from this offering were used to make investments related to our business and for general corporate purposes.

We maintain a share repurchase program providing for the repurchase of up to $ 100.0 million of our outstanding common stock.

The repurchase of our common stock may be made from time to time in the open market, in privately negotiated transactions or in compliance with a Rule 10b5-1 plan based on our stock price, general market conditions, applicable legal requirements and other factors.

We have an equity distribution agreement with JMP Securities LLC ("JMP") where we may offer and sell up to 25,000,000 shares of our common stock in "At-The-Market" equity offerings through JMP by means of ordinary brokers' transactions or otherwise at market prices prevailing at the time of sale, or at negotiated prices.

During 2023, we sold 13,113,296 shares of our common stock at an average price of $ 14.77 per share for net proceeds of $ 193.7 million.

At December 31, 2023, we had 5,176,704 shares available under the agreement.

In March 2023, the Board of Directors authorized a share repurchase program providing for the repurchase of up to $ 50.0 million of our outstanding common stock.

The repurchase of our common stock may be made from time to time in the open market, through privately negotiated transactions, or otherwise in compliance with Rule 10b-18 and Rule 10b5-1 under the Securities Exchange Act of 1934, based on our stock price, general market conditions, applicable legal requirements and other factors.

The program may be discontinued or modified at any time.

We did not repurchase shares of our common stock under this program during 2022.

During 2023, we repurchased 3,545,604 shares of our common stock under this program at a total cost of $ 37.4 million and an average cost of $ 10.56 per share.

In December 2023, the Board of Directors authorized an increase to the remaining availability under the share repurchase program to $ 150.0 million.

At December 31, 2023, there was $ 150.0 million available for repurchase under this program.

7 unchanged sentences

Dividends declared (on a per share basis) for the year ended December 31, 2023 are as follows:

Preferred Stock

Declaration Date

February 16, 2022

January 3, 2022

April 1, 2022

July 27, 2022

November 2, 2022

September 30, 2022

Common Stock Preferred Stock

Declaration Date Dividend Declaration Date Series D Series E Series F

February 15, 2023 $ 0.40 January 3, 2023 $ 0.3984375 $ 0.390625 $ 0.390625

May 3, 2023 $ 0.42 March 31, 2023 $ 0.3984375 $ 0.390625 $ 0.390625

July 26, 2023 $ 0.43 June 30, 2023 $ 0.3984375 $ 0.390625 $ 0.390625

October 25, 2023 $ 0.43 September 29, 2023 $ 0.3984375 $ 0.390625 $ 0.390625

December 29, 2023 $ 0.3984375 $ 0.390625 $ 0.390625

Common Stock – On February 14, 2024, the Board of Directors declared a cash dividend of $ 0.43 per share of common stock.

The dividend is payable on March 15, 2024 to common stockholders of record as of the close of business on March 4, 2024.

Preferred Stock – On January 3, 2023, the Board of Directors declared cash dividends of $ 0.3984375 per share of Series D preferred stock and $ 0.390625 per share of both Series E and Series F preferred stock.

These amounts reflect dividends from October 30, 2022 through January 29, 2023 and are payable on January 31, 2023 to preferred stockholders of record on January 15, 2023.

We have determined that 100 % of the common stock and preferred stock dividends paid during 2023, 2022 and 2021 represented ordinary income to our stockholders for income tax purposes.

1 unchanged sentence

As a result, no portion of the 2023 dividends should be treated as excess inclusion income for federal income tax purposes.

Deferred Compensation.

We have a stock incentive plan under which the Board of Directors has the authority to issue shares of stock to certain employees, officers and directors.

ARBOR REALTY TRUST, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Deferred Compensation.

We have a stock incentive plan under which the Board of Directors has the authority to issue shares of stock to certain employees, officers and directors.

During 2023, we issued 943,788 shares of restricted common stock to our employees and members of our Board of Directors under the 2020 Amended Omnibus Stock Incentive Plan (the “2020 Plan”) with a total grant date fair value of $ 11.3 million, of which:

7 unchanged sentences

The deferred awards have no voting rights and are eligible to receive dividend equivalents equal to the dividends on our common stock as, and when, declared by our Board of Directors.

During 2022, we issued 652,596 shares of restricted common stock to our employees and members of our Board of Directors under the 2020 Amended Omnibus Stock Incentive Plan (the “2020 Plan”) with a total grant date fair value of $ 11.1 million, of which:

(1) 232,899 shares with a grant date fair value of $ 4.0 million were fully vested on the grant date;

(2) 217,840 shares with a grant date fair value of $ 3.7 million vested in 2023;

(3) 181,968 shares with a grant date fair value of $ 3.1 million will vest in 2024;

(4) 9,951 shares with a grant date fair value of $ 0.2 million will vest in 2025;

and (5) 9,938 shares with a grant date fair value of $ 0.2 million will vest in 2026.

We issued 25,012 fully vested restricted stock units (“RSUs”) with a grant date fair value of $ 0.4 million to certain members of our Board of Directors and 189,873 RSUs with a grant date fair value of $ 3.3 million that vest in full in the first quarter of 2025 to our chief executive officer.

The individuals decided to defer the receipt of the common stock, to which the RSUs are converted into, to a future date.

The deferred awards have no voting rights and are eligible to receive dividend equivalents equal to the dividends on our common stock as, and when, declared by our Board of Directors.

In 2021, we issued 384,758 shares of restricted common stock to our employees and members of our Board of Directors under the 2020 Plan with a total grant date fair value of $ 6.4 million, of which:

1 unchanged sentence

(2) 101,475 shares with a grant date fair value of $ 1.7 million vested in 2022;

(3) 88,788 shares with a grant date fair value of $ 1.5 million will vest in 2023;

(3) 88,788 shares with a grant date fair value of $ 1.5 million vested in 2023;

(4) 25,479 shares with a grant date fair value of $ 0.4 million will vest in 2024;

2 unchanged sentences

In July 2021, we granted our chief executive officer 165,746 shares of performance based restricted stock with a grant date fair value of $ 3.0 million, which vest in full in July 2024.

In 2020, we granted 314,957 shares of restricted common stock with a total grant date fair value of $ 3.4 million to our employees.

One third of the shares vested as of the grant date and one third vested on each of the first and second anniversaries of the grant date.

In 2020, we granted 52,735 shares of fully vested common stock with a grant date fair value of $ 0.5 million to members of our Board of Directors.

In 2020, we granted our chief executive officer 45,928 shares of restricted common stock with a grant date fair value of $ 0.5 million and 275,569 of performance-based restricted stock units with a grant date fair value of $ 0.1 million.

One quarter of the restricted common stock vest on the grant date and one quarter vest on each of the first, second and third anniversaries of the grant date.

The performance-based restricted stock units vest at the end of a four-year performance period based on our achievement of certain total stockholder return objectives.

In 2020, we also granted our chief executive officer 313,152 shares of performance-based restricted stock with a grant date fair value of $ 2.9 million as a result of achieving goals related to the integration of the Acquisition.

The performance-based restricted stock vest in full three years after the grant date.

In 2023, 2022 and 2021, previously granted performance-based restricted stock units of 352,427 units, 381,503 units and 448,980 units, respectively, fully vested based on achieving the performance objectives for the four-year periods ended December 31, 2022, 2021 and 2020, respectively.

6 unchanged sentences

At December 31, 2023, total unrecognized compensation cost related to unvested restricted common stock was $ 8.1 million, which is expected to be recognized ratably over the remaining weighted-average vesting period of 1.8 years.

Earnings Per Share.

Basic EPS is calculated by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding during each period inclusive of unvested restricted stock with full dividend participation rights.

Diluted EPS is calculated by dividing net income (loss) by the weighted average number of shares of common stock

ARBOR REALTY TRUST, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Earnings Per Share.

Diluted EPS is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding, plus the additional dilutive effect of common stock equivalents during each period.

outstanding, plus the additional dilutive effect of common stock equivalents during each period.

Our common stock equivalents include the weighted average dilutive effect of restricted stock units granted to our chief executive officer, OP Units and convertible senior unsecured notes.

A reconciliation of the numerator and denominator of our basic and diluted EPS computations ($ in thousands, except share and per share data) is as follows:

A reconciliation of the numerator and denominator of our basic and diluted EPS computations is as follows ($ in thousands, except share and per share data):

Year Ended December 31,

2023 2022 2021

Basic Diluted Basic Diluted Basic Diluted

Net income attributable to common stockholders (1) $ 330,065 $ 330,065 $ 284,829 $ 284,829 $ 317,412 $ 317,412

8 unchanged sentences

Net income per common share (1) $ 1.79 $ 1.75 $ 1.72 $ 1.67 $ 2.30 $ 2.28

________________________________________

(1) Net of preferred stock dividends.

1 unchanged sentence

(3) Beginning January 1, 2022, the effective date we adopted ASU 2020-06, we started utilizing the if-converted method of calculating EPS to reflect the impact of our convertible senior notes.

For 2021 and 2020, the convertible senior notes impacted diluted EPS if the average price of our common stock exceeded the conversion price, as calculated in accordance with the terms of the indenture.

See Note 2 for details.

For 2021, the convertible senior notes impacted diluted EPS if the average price of our common stock exceeded the conversion price, as calculated in accordance with the terms of the indenture.

(4) Our chief executive officer was granted restricted stock units, which vest at the end of a four-year performance period based upon our achievement of total stockholder return objectives.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Note 17 — Income Taxes

We are organized and conduct our operations to qualify as a REIT and to comply with the provisions of the Internal Revenue Code.

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 REIT–taxable income is distributed and provided that certain other requirements are met.

A REIT is generally not subject to federal income tax on taxable income which it distributes to its stockholders, provided that it distributes at least 90% of its REIT–taxable income and meets certain other requirements.

Certain REIT income may be subject to state and local income taxes.

We did not have any REIT–federal taxable income, net of dividends paid and net operating loss deductions, for 2022, 2021 and 2020, and therefore, have not provided for REIT federal income tax expense in either year.

We have elected to retain excess inclusion income rather than passing it through to our stockholders.

We did not have any REIT–federal taxable income, net of dividends paid and net operating loss deductions, for 2023, 2022 and 2021, and therefore, have not provided for REIT federal income tax expense in any of those years.

In 2023, 2022 and 2021, the REIT incurred no state income tax expense.

Certain of our assets and operations that would not otherwise comply with the REIT requirements, such as the Agency Business and our residential mortgage banking joint venture, are owned or conducted through our taxable REIT subsidiaries (the “TRS Consolidated Group”), the majority of the income of which is subject to U.S.

We have elected to retain excess inclusion income rather than passing it through to our stockholders.

Certain of our assets and operations that would not otherwise comply with the REIT requirements, such as the Agency Business and our residential mortgage banking joint venture, are owned or conducted through our TRS Consolidated Group, the majority of the income of which is subject to U.S.

federal, state and local income taxes.

1 unchanged sentence

For 2023, 2022 and 2021, we recorded a provision for income taxes related to the assets held in the TRS Consolidated Group and the REIT in the amount of $ 27.3 million, $ 17.5 million and $ 46.3 million, respectively.

In 2023, the change in the valuation allowance previously recorded at the TRS Consolidated Group on the deferred tax assets was released in the amount of $ 0.3 million.

In 2022, the change in the valuation allowance previously recorded at the TRS Consolidated Group on the deferred tax assets was due to the impact of state tax rate changes.

In 2021, a $ 0.1 million valuation allowance previously recorded at the TRS Consolidated Group on the deferred tax assets subject to loss limitation rules was released.

In 2020, the change in valuation allowance was due to the impact of state tax rate changes.

In 2021, valuation allowance previously recorded at the TRS Consolidated Group on the deferred tax assets subject to loss limitation rules was released in the amount of $ 0.1 million.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

A summary of our pre-tax GAAP income is as follows (in thousands):

Year Ended December 31,

2023 2022 2021

Pre‑tax GAAP income:

REIT $ 320,045 $ 303,320 $ 239,356

TRS Consolidated Group 107,858 67,991 184,736

2 unchanged sentences

Year Ended December 31,

2023 2022 2021

Current tax provision:

Federal $ 26,269 $ 14,167 $ 27,454

State 8,427 5,058 7,939

Total 34,696 19,225 35,393

Deferred tax (benefit) provision:

Federal $ ( 5,272 ) $ ( 1,373 ) $ 8,287

State ( 1,783 ) ( 370 ) 2,744

Valuation allowance ( 294 ) 2 ( 139 )

Total ( 7,349 ) ( 1,741 ) 10,892

Total income tax expense $ 27,347 $ 17,484 $ 46,285

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

A reconciliation of our effective income tax rate as a percentage of pre-tax income to the U.S.

1 unchanged sentence

Year Ended December 31,

2023 2022 2021

federal statutory rate 21.0 % 21.0 % 21.0 %

1 unchanged sentence

State and local income taxes, net of federal tax benefit 1.2 % 1.0 % 2.0 %

Other ( 0.1 ) % ( 0.1 ) % ( 0.2 ) %

Effective income tax rate 6.4 % 4.7 % 10.9 %

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The significant components of our deferred tax assets and liabilities of our TRS Consolidated Group are as follows (in thousands):

4 unchanged sentences

Valuation allowance — ( 294 )

Other 346 441

Deferred tax assets, net $ 34,766 $ 30,515

1 unchanged sentence

Mortgage servicing rights $ 28,286 $ 26,975

Intangibles 5,565 6,457

Interest in equity affiliates—net 2,719 6,237

Deferred tax liabilities, net $ 36,570 $ 39,669

At December 31, 2022, our TRS Consolidated Group, had approximately $ 30.5 million of deferred tax assets, net of a $ 0.3 million valuation allowance.

The deferred tax assets consist of expenses not currently deductible, loan loss reserves, net operating loss and capital loss carryforwards.

Our TRS Consolidated Group's deferred tax assets are offset by approximately $ 39.7 million in deferred tax liabilities consisting of timing differences from mortgage servicing rights, intangibles and investments in equity affiliates.

At December 31, 2021, our TRS Consolidated Group, had $ 33.2 million of deferred tax assets, net of a $ 0.3 million valuation allowance.

The deferred tax assets consist of expenses not currently deductible, loan loss reserves and net operating loss and capital loss carryforwards.

Our TRS Consolidated Group's deferred tax assets are offset by $ 44.1 million in deferred tax liabilities consisting of timing differences from mortgage servicing rights, intangibles and investments in equity affiliates.

At both December 31, 2023 and 2022, the REIT (excluding the TRS Consolidated Group) had no federal net operating loss carryforwards and no capital loss carryforwards.

At both December 31, 2022 and 2021, the TRS Consolidated Group had no federal net operating loss carryforwards remaining and capital loss carryforwards of $ 1.1 million, which will expire through 2023.

At both December 31, 2023 and 2022, the TRS Consolidated Group had no federal net operating loss carryforwards remaining.

During 2023, the TRS Consolidation Group utilized in full its capital loss carryforward of approximately $ 1.1 million.

At both December 31, 2023 and 2022, the TRS Consolidated Group had state net operating loss carryforwards of $ 0.2 million, which will begin to expire in 2036.

The TRS Consolidated Group is currently under audit in certain state and local jurisdictions for tax years 2017-2021.

While the impact of the current income tax examinations was undetermined, it is not expected to be material to our consolidated financial statements.

While the impact of the current income tax examinations were undetermined, it is not expected to be material to our consolidated financial statements.

We have assessed our tax positions for all open years, which includes 2017-2023, and have concluded that there were no material uncertainties to be recognized.

We have not recognized any interest and penalties related to tax uncertainties for the years ended 2017 through 2023.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Note 18 — Agreements and Transactions with Related Parties

6 unchanged sentences

Due to related party was $ 13.8 million and $ 12.4 million at December 31, 2023 and 2022, respectively, and consisted of loan payoffs, holdbacks and escrows to be remitted to our affiliated servicing operations related to real estate transactions.

In July 2022, we purchased a $ 46.2 million bridge loan originated by ACM at par (none of which was funded at December 31, 2022) for an SFR build-to-rent construction project.

In certain instances, our business requires our executives to charter privately owned aircraft in furtherance of our business.

We have an aircraft time-sharing agreement with an entity controlled by our chief executive officer that owns a private aircraft.

Pursuant to the agreement, we reimburse the aircraft owner for the required costs under Federal Aviation Administration regulations for the flights our

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

executives’ charter.

During 2023, 2022 and 2021, we reimbursed the aircraft owner $ 0.8 million, $ 1.1 million and $ 0.2 million, respectively, for the flights chartered by our executives pursuant the agreement.

In May 2023, we committed to fund a $ 56.9 million bridge loan ($ 6.0 million was funded at December 31, 2023) for an SFR build-to-rent construction project.

Two of our officers made minority equity investments totaling $ 0.5 million, representing approximately 4 % of the total equity invested in the project.

The loan has an interest rate of SOFR plus 5.50 % with a SOFR floor of 3.25 % and matures in December 2025, with two six-month extension options.

Interest income recorded from this loan was $ 0.4 million for 2023.

In July 2022, we purchased a $ 46.2 million bridge loan originated by ACM at par ($ 6.3 million was funded at December 31, 2023) for an SFR build-to-rent construction project.

A consortium of investors (which includes, among other unaffiliated investors, certain of our officers with a minority ownership interest) owns 70 % of the borrowing entity and an entity indirectly owned and controlled by an immediate family member of our chief executive officer owns 10 % of the borrowing entity.

The loan has an interest rate of SOFR plus 5.50 % and is scheduled to mature in March 2025.

The loan has an interest rate of SOFR plus 5.50 % and matures in March 2025.

Interest income recorded from this loan was $ 0.2 million for 2023.

In April 2022, we committed to fund a $ 67.1 million bridge loan (none of which was funded at December 31, 2023) in an SFR build-to-rent construction project.

An entity owned by an immediate family member of our chief executive officer also made an equity investment in the project and owns a 2.25 % equity interest in the borrowing entity.

The bridge loan has an interest rate of SOFR plus 4.625 % with a SOFR floor of 0.25 % and matures in May 2025.

Interest income recorded from this loan was $ 0.1 million for 2022.

In February 2022, we committed to fund a $ 39.4 million bridge loan (none of which was funded at December 31, 2022) in an SFR build-to-rent construction project.

The loan has an interest rate of SOFR plus 4.63 % with a SOFR floor of 0.25 % and matures in May 2025.

Interest income recorded from this loan was $ 0.2 million and $ 0.1 million for 2023 and 2022, respectively.

In February 2022, we committed to fund a $ 39.4 million bridge loan ($ 9.4 million was funded at December 31, 2023) in an SFR build-to-rent construction project.

An entity owned by an immediate family member of our chief executive officer also made an equity investment in the project and owns a 2.25 % equity interest in the borrowing entity.

The bridge loan has an interest rate of LIBOR plus 4.00 % with a LIBOR floor of 0.25 % and matures in March 2025.

Interest income recorded from this loan was $ 0.1 million for 2022.

The loan had an interest rate of LIBOR plus 4.00 % with a LIBOR floor of 0.25 %, that was changed to SOFR in July 2023, and matures in March 2025.

Interest income recorded from this loan was $ 0.4 million and $ 0.1 million for 2023 and 2022, respectively.

In 2021, we invested $ 4.2 million for 49.3 % interest in a limited liability company (“LLC”) which purchased a retail property for $ 32.5 million and assumed an existing $ 26.0 million CMBS loan.

2 unchanged sentences

In 2021, we originated a $ 63.4 million bridge loan to a third party to purchase a multifamily property from a multifamily-focused commercial real estate investment fund sponsored and managed by our chief executive officer and one of his immediate family members, which fund has no continued involvement with the property following the purchase.

The loan has an interest rate of LIBOR plus 3.75 % with a LIBOR floor of 0.25 % and matures in March 2024.

Interest income recorded from this loan was $ 3.7 million and $ 2.1 million for 2022 and 2021, respectively.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

In 2020, we committed to fund a $ 32.5 million bridge loan which was upsized to $ 41.5 million in September 2022, ($ 12.3 million was funded at December 31, 2022) and made a $ 3.5 million preferred equity investment in an SFR build-to-rent construction project.

The loan had an interest rate of LIBOR plus 3.75 % with a LIBOR floor of 0.25 %, that was changed to SOFR in July 2023, and was scheduled to mature in March 2024.

In December 2023, this loan paid off in full.

Interest income recorded from this loan was $ 5.6 million, $ 3.7 million and $ 2.1 million for 2023, 2022 and 2021, respectively.

In 2020, we committed to fund a $ 32.5 million bridge loan, and made a $ 3.5 million preferred equity investment in an SFR build-to-rent construction project.

An entity owned by an immediate family member of our chief executive officer also made an equity investment in the project and owns a 21.8 % equity interest in the borrowing entity.

The bridge loan has an interest rate of LIBOR plus 5.5 % with a LIBOR floor of 0.75 %, the preferred equity investment has a 12.0 % fixed rate and both loans mature in October 2023.

Interest income recorded from these loans was $ 1.3 million, $ 0.5 million and less than $ 0.1 million for 2022, 2021 and 2020, respectively.

In 2020, we committed to fund a $ 30.5 million bridge loan , which was upsized to $ 38.8 million in September 2022, and we made a $ 4.6 million preferred equity investment in a SFR build-to-rent construction project.

The bridge loan had an interest rate of LIBOR plus 5.50 % with a LIBOR floor of 0.75 %, that was changed to SOFR in July 2023, and the preferred equity investment has a 12.00 % fixed rate.

Both loans were scheduled to mature in December 2023.

In November 2023, the bridge loan was upsized to a maximum of $ 39.9 million ($ 31.4 million was funded at December 31, 2023) and the maturity date for both loans was extended to October 2024.

Interest income recorded from these loans was $ 2.8 million, $ 1.3 million and $ 0.5 million for 2023, 2022 and 2021, respectively.

In 2020, we committed to fund a $ 30.5 million bridge loan , and we made a $ 4.6 million preferred equity investment in a SFR build-to-rent construction project.

ACM and an entity owned by an immediate family member of our chief executive officer also made equity investments in the project and own an 18.9 % equity interest in the borrowing entity.

The bridge loan ($ 17.6 million was funded at December 31, 2022) has an interest rate of LIBOR plus 5.5 % with a LIBOR floor of 0.75 % and matures in May 2023 and the preferred equity investment has a 12.0 % fixed rate and matures in April 2023.

The bridge loan had an interest rate of LIBOR plus 5.50 % with a LIBOR floor of 0.75 % and was scheduled to mature in May 2023.

The preferred equity investment has a 12.00 % fixed rate and was scheduled to mature in April 2023.

In April 2023, the bridge loan was upsized to a maximum of $ 38.8 million ($ 36.3 million was funded at December 31, 2023), and the interest rate was changed to SOFR plus 5.25 % with a SOFR floor of 1.00 %.

In addition, the maturity on both loans was extended to May 2025.

Interest income recorded from these loans was $ 3.6 million, $ 1.6 million and $ 0.6 million for 2023, 2022 and 2021, respectively.

In 2020, we originated a $ 14.8 million Private Label loan and a $ 3.4 million mezzanine loan on two multifamily properties owned in part by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns a 50 % interest in the borrowing entity.

The Private Label loan bears interest at a 3.1 % fixed rate and the mezzanine loan bears interest at a 9.0 % fixed rate and both loans mature in April 2030.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

officer) which owns a 50 % interest in the borrowing entity.

In 2020, we sold the Private Label loan to an unconsolidated affiliate of ours.

The mezzanine loan bears interest at a 9.00 % fixed rate and matures in April 2030.

Interest income recorded from the mezzanine loan was $ 0.3 million for all periods presented.

We have a $ 35.0 million bridge loan and a $ 9.6 million preferred equity interest on an office building.

The property is controlled by a third party.

The day-to-day operations are currently being managed by an immediate family member, or one of his affiliated entities, of our chief executive officer.

We had a $ 35.0 million bridge loan and a $ 10.0 million preferred equity interest on an office building.

The bridge loan was scheduled to mature in October 2023 and the preferred equity investment was scheduled to mature in June 2027.

The day-to-day operations were being managed by an affiliated entity of an immediate family member of our chief executive officer.

In September 2021, we entered into a forbearance agreement with the borrower on the outstanding bridge loan to defer all interest owed until maturity or early payoff.

Interest income recorded from these loans was $ 1.3 million and $ 1.6 million for 2021 and 2020, respectively.

In certain instances, our business requires our executives to charter privately owned aircraft in furtherance of our business.

We have an aircraft time-sharing agreement with an entity controlled by our chief executive officer that owns a private aircraft.

Pursuant to the agreement, we reimburse the aircraft owner for the required costs under Federal Aviation Administration regulations for the flights our executives’ charter.

During 2022, 2021 and 2020, we reimbursed the aircraft owner $ 1.1 million, $ 0.2 million and $ 0.5 million, respectively, for the flights chartered by our executives pursuant the agreement.

Interest income recorded from these loans was $ 1.3 million for 2021.

In the fourth quarter of 2023, we converted these loans in the building to a common equity investment.

See Note 3 for details.

In 2019, we, along with ACM, certain executives of ours and a consortium of independent outside investors, formed AMAC III, a multifamily-focused commercial real estate investment fund sponsored and managed by our chief executive officer and one of his immediate family members.

We committed to a $ 30.0 million investment ($ 25.9 million was funded at December 31, 2023) for an 18 % interest in AMAC III.

During 2022, 2021 and 2020, we received cash distributions totaling $ 0.5 million, $ 3.8 million and $ 0.1 million, respectively, and recorded a loss of $ 2.4 million, $ 1.3 million and $ 0.9 million, respectively, associated with this investment.

During 2023, 2022 and 2021, we recorded losses of $ 1.9 million, $ 2.4 million and $ 1.3 million, respectively, and received cash distributions totaling $ 1.1 million and $ 0.5 million in 2023 and 2022, respectively, associated with this investment.

In 2019, AMAC III originated a $ 7.0 million mezzanine loan to a borrower with which we have an outstanding $ 34.0 million bridge loan.

In 2020, for full satisfaction of the mezzanine loan, AMAC III became the owner of the property.

Also in 2020, the $ 34.0 million bridge loan was refinanced with a $ 35.4 million bridge loan, which bears interest at a rate of LIBOR plus 3.5 % and matures in August 2023.

We also originated a $ 15.6 million Private Label loan in 2019 to a borrower which is 100 % owned by AMAC III, which bears interest at a 3.735 % fixed rate and matures in January 2030.

In 2020, we sold the Private Label loan to an unconsolidated affiliate of ours.

Also in 2020, the $ 34.0 million bridge loan was refinanced with a $ 35.4 million bridge loan, which bore interest at a rate of LIBOR plus 3.50 %, that was changed to SOFR in July 2023, and was scheduled to mature in August 2023, which was extended to August 2024.

Interest income recorded from the bridge loan was $ 3.1 million, $ 1.9 million and $ 1.3 million for 2023, 2022 and 2021, respectively.

In 2018, we originated a $ 21.7 million bridge loan on a multifamily property owned in part by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns 75 % in the borrowing entity.

The loan has an interest rate of LIBOR plus 4.75 % with a LIBOR floor of 0.25 % and matures in August 2023.

The loan had an interest rate of LIBOR plus 4.75 % with a LIBOR floor of 0.25 %, that was changed to SOFR in July 2023, and was scheduled to mature in August 2023, which was extended to August 2024.

Interest income recorded from this loan was $ 2.2 million, $ 1.4 million and $ 1.3 million for 2023, 2022 and 2021, respectively.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

In 2017, we originated two bridge loans totaling $ 28.0 million on two multifamily properties owned in part by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns 45 % of the borrowing entity.

The loans had an interest rate of LIBOR plus 5.25 % with LIBOR floors ranging from 1.24 % to 1.54 % and were scheduled to mature in 2020.

The borrower refinanced these loans with a $ 31.1 million bridge loan we originated in 2019 with an interest rate of LIBOR plus 4.0 %, a LIBOR floor of 1.8 %, which was scheduled to mature in October 2022.

In May 2022, these loans paid off in full.

Interest income recorded from this loan was $ 0.8 million for 2022 and $ 1.9 million for both 2021 and 2020.

The borrower refinanced these loans with a $ 31.1 million bridge loan we originated in 2019 with an interest rate of LIBOR plus 4.00 % and a LIBOR floor of 1.80 %, which was scheduled to mature in October 2022.

In May 2022, this loan paid off in full.

Interest income recorded from this loan was $ 0.8 million and $ 1.9 million for 2022 and 2021, respectively.

In 2017, we originated a $ 46.9 million Fannie Mae loan on a multifamily property owned in part by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers) which owns a 17.6 % interest in the borrowing entity.

5 unchanged sentences

Upon the sale, we received a 1 % loan assumption fee which was governed by existing loan agreements that were in place when the loan was originated in 2015, prior to such purchase.

In July 2023, the Fannie Mae loan was paid off in full.

Servicing revenue recorded from this loan was less than $ 0.1 million for all periods presented.

In 2016, we originated $ 48.0 million of bridge loans on six multifamily properties owned in part by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns interests ranging from 10.5 % to 12.0 % in the borrowing entities.

The loans had an interest rate of LIBOR plus 4.5 % with a LIBOR floor of 0.25 % and were scheduled to mature in 2019.

In 2017, a $ 6.8 million loan on one property paid off in full and in 2018 four additional loans totaling $ 28.3 million paid off in full.

In 2019, $ 10.9 million of the $ 12.9 million remaining bridge loan paid off, with the $ 2.0 million remaining UPB converting to a mezzanine loan with a fixed interest rate of 10.0 % and a January 2024 maturity.

Interest income recorded from the mezzanine loan was $ 0.2 million for all period presented.

In 2019, we converted an existing bridge loan into a $ 2.0 million mezzanine loan with a fixed interest rate of 10.00 % and a January 2024 maturity.

In January 2024, the maturity was extended one year to January 2025.

Interest income recorded from this loan was $ 0.2 million for all period presented.

The underlying multifamily property is owned in part by a consortium of investors (which includes, among other unaffiliated investors, certain of our officers and our chief executive officer) which owns interests ranging from 10.5 % to 12.0 % in the borrowing entities .

In 2015, we invested $ 9.6 million for 50 % of ACM’s indirect interest in a joint venture with a third party that was formed to invest in a residential mortgage banking business.

1 unchanged sentence

We recorded income from equity affiliates related to this investment of $ 0.6 million, $ 4.9 million and $ 34.6 million for 2023, 2022 and 2021, respectively.

During 2022 and 2021, we also received cash distributions totaling $ 23.8 million and $ 28.0 million, respectively, from this investment, which were classified as returns of capital.

Interest income recorded from loans that were paid off prior to 2022 totaled $ 0.5 million and $ 3.4 million for 2021 and 2020, respectively.

ARBOR REALTY TRUST, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

During 2023 and 2022, we also received cash distributions totaling $ 15.0 million and $ 23.8 million, respectively, from this investment, which were classified as returns of capital.

We, along with an executive officer of ours and a consortium of independent outside investors, hold equity investments in a portfolio of multifamily properties referred to as the “Lexford” portfolio, which is managed by an entity owned primarily by a consortium of affiliated investors, including our chief executive officer and an executive officer of ours.

10 unchanged sentences

The bad boy guarantees may become a liability for us upon standard “bad” acts such as fraud or a material misrepresentation by Lexford or us.

At December 31, 2022, this debt had an aggregate outstanding balance of $ 582.8 million and is scheduled to mature through 2029.

At December 31, 2023, this debt had an aggregate outstanding balance of approximately $ 600.0 million and is scheduled to mature through 2029.

Several of our executives, including our chief financial officer, senior counsel and our chairman, chief executive officer and president, hold similar positions for ACM.

7 unchanged sentences

We have the option to increase the employer match based on our operating results.

In 2022, we recorded $ 1.6 million and, in both 2021 and 2020, we recorded $ 0.8 million of expenses associated with the 401(k) Plan, which is included in employee compensation and benefits in our consolidated statements of income .

In 2023, 2022 and 2021, we recorded $ 1.2 million, $ 1.0 million and $ 0.8 million, respectively, of expenses associated with the 401(k) Plan, which is included in employee compensation and benefits in our consolidated statements of income.

Deferred Compensation.

7 unchanged sentences

At December 31, 2023 and 2022, we had recorded liabilities totaling $ 37.6 million and $ 28.7 million, respectively, and assets of $ 30.2 million and $ 24.7 million, respectively, related to the Deferred Comp Plan, which is included in other liabilities and other assets, respectively, in our consolidated balance sheets.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Note 20 — Segment Information

1 unchanged sentence

Specifically identifiable costs are recorded directly to each business segment.

For items not specifically identifiable, costs have been allocated between the business segments using the most meaningful allocation methodologies, which was predominately direct labor costs (i.e., time spent working on each business segment).

For items not specifically identifiable, costs have been allocated between the business segments using the most meaningful allocation methodologies, which was

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

predominately direct labor costs (i.e., time spent working on each business segment).

Such costs include, but are not limited to, compensation and employee related costs, selling and administrative expenses and stock-based compensation.

Year Ended December 31, 2023

Eliminations (1)

Business Agency

Business Other (1) Consolidated

Interest income $ 1,279,433 $ 51,786 $ — $ 1,331,219

17 unchanged sentences

Provision for credit losses (net of recoveries) 70,344 3,102 — 73,446

Litigation settlement

Total other expenses 158,034 157,795 — 315,829

2 unchanged sentences

Income from equity affiliates 24,281 — — 24,281

Provision for income taxes

Benefit from (provision for) income taxes 803 ( 28,150 ) — ( 27,347 )

Net income 274,896 125,660 — 400,556

Preferred stock dividends 41,369 — — 41,369

5 unchanged sentences

Year Ended December 31, 2022

Eliminations (1)

Business Agency

Business Other (1) Consolidated

Interest income $ 903,622 $ 44,779 $ — $ 948,401

7 unchanged sentences

Property operating income 1,877 — — 1,877

Loss on derivative instruments, net

Other income, net

Gain on derivative instruments, net — 26,609 — 26,609

Other income (loss), net ( 2,360 ) ( 15,203 ) — ( 17,563 )

Total other revenue ( 483 ) 228,760 — 228,277

6 unchanged sentences

Provision for credit losses (net of recoveries) 19,770 1,399 — 21,169

Litigation settlement 7,350 — — 7,350

Total other expenses 115,388 141,676 — 257,064

Income before extinguishment of debt, sale of real estate, income from equity affiliates and income taxes

Income before extinguishment of debt, income from equity affiliates and income taxes 249,092 112,905 — 361,997

Loss on extinguishment of debt ( 4,933 ) — — ( 4,933 )

Sale of real estate

Income from equity affiliates 14,247 — — 14,247

Provision for income taxes ( 821 ) ( 16,663 ) — ( 17,484 )

Net income 257,585 96,242 — 353,827

Preferred stock dividends 40,954 — — 40,954

5 unchanged sentences

Year Ended December 31, 2021

Eliminations (1)

Business Agency

Business Other (1) Consolidated

Interest income $ 427,039 $ 39,048 $ — $ 466,087

18 unchanged sentences

Total other expenses 54,308 143,716 — 198,024

Income before extinguishment of debt, sale of real estate, income from equity affiliates and income taxes

Income before extinguishment of debt, gain on real estate, income from equity affiliates and income taxes 185,972 203,234 — 389,206

Loss on extinguishment of debt ( 3,374 ) — — ( 3,374 )

(Loss) gain on sale of real estate

Gain on real estate 2,466 1,227 — 3,693

Income from equity affiliates 34,567 — — 34,567

Provision for income taxes ( 5,940 ) ( 40,345 ) — ( 46,285 )

Net income 213,691 164,116 — 377,807

Preferred stock dividends 21,888 — — 21,888

1 unchanged sentence

Net income attributable to common stockholders $ 191,803 $ 164,116 $ ( 38,507 ) $ 317,412

________________________________________

(1) Includes income allocated to the noncontrolling interest holders not allocated to the two reportable segments.

3 unchanged sentences

December 31, 2023

Structured Business

Agency Business

Structured Business Agency Business Consolidated

Cash and cash equivalents $ 619,487 $ 309,487 $ 928,974

7 unchanged sentences

Other assets and due from related party 453,073 101,629 554,702

Total assets $ 14,137,511 $ 1,601,125 $ 15,738,636

Debt obligations $ 11,520,492 $ 413,327 $ 11,933,819

12 unchanged sentences

Other assets and due from related party 367,837 81,022 448,859

Total assets $ 15,628,270 $ 1,410,715 $ 17,038,985

Debt obligations $ 13,195,120 $ 305,442 $ 13,500,562

6 unchanged sentences

Year Ended December 31,

2023 2022 2021

Origination Data:

Structured Business

Bridge loans (1)

Multifamily $ 415,330 $ 5,468,222 $ 9,101,139

SFR 524,060 613,819 415,501

939,390 6,082,041 9,516,640

Mezzanine / Preferred Equity 43,953 69,606 203,875

SFR - Permanent loans

Total new loan originations $ 983,343 $ 6,151,647 $ 9,720,515

(1) 2022 and 2021 includes 132 and 103 SFR loans, respectively, with a UPB of $ 613.8 million and $ 389.2 million, respectively.

During 2022, 2021 and 2020, we committed to fund SFR loans totaling $ 1.08 billion, $ 729.5 million and $ 261.5 million, respectively.

Number of Loans Originated 150 318 422

SFR Commitments $ 1,150,687 $ 1,086,833 $ 760,448

Loan runoff $ 3,354,055 $ 3,818,554 $ 2,516,771

Agency Business

Origination Volumes by Investor:

Fannie Mae $ 3,773,532 $ 2,919,566 $ 3,389,312

Freddie Mac 756,827 1,353,001 1,016,142

Private Label 299,934 217,542 1,436,853

FHA 257,199 188,394 430,320

SFR - Fixed Rate 19,328 89,683 136,931

Total $ 5,106,820 $ 4,768,186 $ 6,409,558

Total loan commitment volume $ 5,207,148 $ 5,146,718 $ 6,347,752

Agency Business Loan Sales Data:

Fannie Mae $ 3,469,340 $ 3,139,414 $ 3,675,763

Freddie Mac 715,530 1,456,595 1,081,702

Private Label 441,319 515,086 985,094

FHA 240,079 241,457 480,275

SFR - Fixed Rate 22,931 86,071 192,335

Total $ 4,889,199 $ 5,438,623 $ 6,415,169

Sales margin (fee-based services as a % of loan sales) (1) 1.48 % 1.34 % 1.92 %

MSR rate (MSR income as a % of loan commitments) 1.34 % 1.35 % 2.05 %

(1) 2022 includes $ 17.1 million of gains recognized on Swaps related to the Private Label loans sold in the three months ended March 31, 2022, which is included in gain (loss) on derivative instruments, net in the consolidated statements of income.

________________________________________

(1) 2022 includes $ 17.1 million of gains recognized on treasury futures related to Private Label loans sold, which is included in gain (loss) on derivative instruments, net in the consolidated statements of income.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

December 31, 2023

Servicing Portfolio

Key Servicing Metrics for Agency Business:

Portfolio UPB

(basis points)

Portfolio UPB Wtd.

(basis points) Wtd.

Fannie Mae $ 21,264,578 47.4 7.4

Freddie Mac 5,181,933 24.0 8.5

Private Label 2,510,449 19.5 6.7

FHA 1,359,624 14.4 19.2

Bridge 379,425 10.9 3.2

SFR - Fixed Rate 287,446 20.1 5.1

Total $ 30,983,455 39.1 8.0

December 31, 2022

Fannie Mae $ 19,038,124 50.2 8.0

Freddie Mac 5,153,207 25.0 9.0

Private Label 2,074,859 18.5 7.6

FHA 1,155,893 14.9 19.5

Bridge 301,182 12.5 1.7

SFR - Fixed Rate 274,764 19.8 6.0

Total $ 27,998,029 41.1 8.6

ARBOR REALTY TRUST, INC.

2 unchanged sentences

($ in thousands)

Type Location Periodic

Terms (1) Maturity

Date (2) Interest Pay

Index (3) Prior Liens Face

Amount (4) Carrying

Amount (5) Carrying

Bridge Loans:

Bridge loans less than 3% of carrying amount of total loans (6):

L+ 2.50 % to 6.75 %

L Floor 0.10 % to 2.50 %

SOFR+ 2.65 % to 5.00 %

Multifamily Various IO / PI 2024 - 2026 SOFR+ 0.00 % to 5.75 %

$ — $ 10,789,936 $ 10,665,252 $ —

SOFR Floor 0.10 % to 5.36 %

Fixed 3.00 % to 12.00 %

Single‑Family Rental

L+ 3.50 % to 6.75 %

L Floor 0.25 % to 2.25 %

SOFR+ 2.65 % to 6.25 %

Single‑Family Rental Various IO / PI 2024 - 2026 SOFR+ 0.00 % to 6.25 %

— 1,316,803 1,301,522 —

SOFR Floor 0.10 % to 5.36 %

L Floor 0.15 %

L Floor 0.29 %

L+ 5.00 % to 5.35 %

L Floor 2.15 % to 2.63 %

Student Housing

L Floor 0.25 % to 2.25 %

L+ 3.50 % to 4.00 %

L Floor 1.00 % to 2.50 %

Land CA IO 2025 SOFR+ 4.00 %

— 118,595 40,726 —

SOFR Floor 0.15 %

Office NY IO 2024 SOFR+ 3.50 %

— 35,410 35,268 —

Retail CT IO 2024 SOFR+ 3.50 %

— 12,500 10,127 —

SOFR Floor 1.00 %

Total Bridge Loans less than 3% of carrying amount of total loans — 12,273,244 12,052,895 —

Total Bridge Loans — 12,273,244 12,052,895 —

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

Schedule IV — Loans and other Lending Investments ( Continued )

($ in thousands)

Mezzanine Loans:

Mezzanine loans less than 3% of carrying amount of total loans (6):

Fixed 3.50 % to 13.00 %

L Floor 1.00 %

Multifamily Various IO / PI 2024 - 2034 Fixed 3.50 % to 14.00 %

1,203,261 232,104 223,008 —

Land CA IO 2024 Fixed 0.00 %

— 9,333 9,333 —

Retail Various IO 2024 SOFR+ 3.50 %

— 7,020 6,100 —

SOFR Floor 1.00 %

Fixed 12.00 %

2 unchanged sentences

Preferred equity investments less than 3% of carrying amount of total loans (6):

Fixed 4.00 % to 13.00 %

Fixed 12.00 %

Multifamily Various IO / PI 2024 - 2033 Fixed 0.00 % to 16.00 %

439,722 75,941 71,020 —

Land TX IO 2024 - 2025 Fixed 0.00 %

— 8,100 7,910 —

Commercial NY IO 2024 Fixed 6.00 %

29,792 1,700 — —

Total Preferred Equity Investments 469,514 85,741 78,930 —

Other loans less than 3% of carrying amount of total loans (6):

Single‑Family Rental

L + 3.98 % to 4.90 %

L Floor 0.25 %

(1) IO = Interest Only, PI = Principal and Interest, L = LIBOR.

Single‑Family Rental Various IO / PI 2024 - 2025 SOFR + 3.98 % to 4.90 %

— 7,564 7,540 —

SOFR Floor 0.25 %

— 7,564 7,540 —

Total Loans $ 1,672,775 $ 12,615,006 $ 12,377,806 $ —

________________________________________

(1) IO = Interest Only, PI = Principal and Interest.

(2) Maturity date does not include possible extensions.

(3) References to LIBOR are to one-month LIBOR unless specifically stated otherwise.

(3) References to SOFR are to one-month SOFR unless specifically stated otherwise.

(4) During 2023, $ 1.74 billion of loans were extended.

4 unchanged sentences

SCHEDULE IV — LOANS AND OTHER LENDING INVESTMENTS (Continued)

($ in thousands)

The following table reconciles our loans and investments carrying amounts for the periods indicated (in thousands):

Year Ended December 31,

2023 2022 2021

Balance at beginning of year $ 14,254,674 $ 11,981,048 $ 5,285,868

7 unchanged sentences

Loan payoffs and paydowns ( 3,354,055 ) ( 3,818,554 ) ( 2,516,771 )

( 3,818,554 )

( 2,516,771 )

( 1,243,694 )

Unfunded loan commitments (1) ( 260,789 ) ( 376,404 ) ( 623,639 )

5 unchanged sentences

Balance at end of year $ 12,377,806 $ 14,254,674 $ 11,981,048

________________________________________

(1) In accordance with certain loans and investments, we have outstanding unfunded commitments that we are obligated to fund as the borrowers meet certain requirements.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data