What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-21 compared with 2024-02-20 · 643 added, 579 removed, 1845 unchanged (40% of the section changed)

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To the Stockholders and the Board of Directors of Arbor Realty Trust, Inc.

and Subsidiaries

Opinion on the Financial Statements

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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 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.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 21, 2025 expressed an unqualified opinion thereon.

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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 and the report of other auditors provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the 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 consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Valuation of Mortgage Servicing Rights

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.

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 and servicing cost.

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 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 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.

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

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

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

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

Allowance for Credit Losses

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, 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.

Description of the Matter The Company’s allowance for credit losses (“ACL”) for the structured loan portfolio was $239.0 million as of December 31, 2024.

As discussed in Note 2 to the consolidated financial statements, for structured loans with similar risk characteristics, management estimated the ACL using a third-party probability of default and loss-given default model (the “general reserve”).

The model used loss factors that were developed from the historical loss experience of loans with similar credit and default history, individual characteristics of loans currently in the portfolio, and a reasonable and supportable economic forecast to estimate expected losses over the life of the loans.

For structured loans that were considered collateral-dependent or where it was determined that foreclosure was probable, management estimated the ACL on an individual basis by comparing the estimated fair value of the collateral as of the reporting date to the net carrying value of the loan (the “specific reserve”).

The fair value of the collateral was estimated using internally-developed cash flow models or third-party appraisals.

Auditing management’s allowance for credit losses for the structured loan portfolio involved a high degree of subjectivity and was especially challenging due to the complexity of the statistical methods used to estimate the general reserve and the significant judgments required to estimate the fair value of collateral for loans that were individually evaluated for a specific reserve, which were sensitive to the use of certain market-based assumptions, including capitalization rates.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s process to measure the allowance for credit losses for the structured loan portfolio.

For example, we tested controls over the inputs into and operation and monitoring of the ACL model, the methodology and assumptions used to update collateral values and measure expected credit losses on individually evaluated loans, and management review controls over key judgments used in the evaluation of ACL model results and the estimate of collateral values for individually evaluated loans.

Our test of controls included observation of and inspection of the related documentation for certain key meetings of the Company’s CECL working group, where key judgments on current and forward-looking macroeconomic conditions, internal and external factors, and uncertainty as it relates to economic, model, or credit risks, were discussed and effectively challenged.

Our procedures over the general reserve included, among others, the involvement of EY specialists to assist us with evaluating the ACL model’s methodology, conceptual soundness, and model performance.

We performed procedures to test the completeness and accuracy of data used in the model, evaluating the economic forecast selected by management, and evaluating the reasonableness of model results.

Our procedures over the specific reserve included, among others, the testing of the completeness and accuracy of data inputs, the clerical accuracy of cash-flow models, and the involvement of EY valuation specialists to assist us with auditing management’s estimate of the fair value of collateral for a sample of loans, including testing certain key assumptions such as capitalization rates.

As part of our overall evaluation of the Company’s determination of the ACL and our search for contrary evidence, we compared the current ACL to historical loss levels and evaluated subsequent events.

/s/ Ernst & Young LLP

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February 21, 2025

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.

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.

/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.

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Investments in equity affiliates 76,312 79,303

Real estate owned, net 176,543 86,991

Due from related party 12,792 64,421

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Senior unsecured notes 1,236,147 1,333,968

Convertible senior unsecured notes, net 283,118 280,356

Convertible senior unsecured notes 285,853 283,118

Junior subordinated notes to subsidiary trust issuing preferred securities 144,686 143,896

Mortgage notes payable - real estate owned 74,897 44,339

Due to related party 4,474 13,799

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Property operating income 7,226 5,708 1,877

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

(Loss) gain on derivative instruments, net ( 8,543 ) 6,763 26,609

Other income (loss), net 8,083 7,667 ( 17,563 )

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Loss on extinguishment of debt ( 412 ) ( 1,561 ) ( 4,933 )

Gain on sale of real estate — — 3,693

Gain on real estate 3,813 — —

Income from equity affiliates 5,772 24,281 14,247

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Par Value Additional

Capital (Accumulated

Capital Retained

Earnings Total Arbor

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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

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

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 3,292,000 77,522 — — — — 77,522 — 77,522

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

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

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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

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 — — 13,113,296 131 193,530 — 193,661 — 193,661

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

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

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

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

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

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(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”).

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.

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.

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Net (charge-offs) recoveries for loss sharing obligations ( 266 ) ( 1,229 ) ( 758 )

Deferred tax (benefit) provision ( 7,349 ) ( 1,741 ) 10,892

Deferred tax benefit ( 11,613 ) ( 7,349 ) ( 1,741 )

Income from equity affiliates ( 5,772 ) ( 24,281 ) ( 14,247 )

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Change in fair value of held-for-sale loans ( 609 ) ( 2,536 ) 15,703

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

Loss (gain) on derivative instruments, net 8,543 ( 6,763 ) ( 26,609 )

Loss on sale of loans — — 11,180

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Deferred fees 25,792 21,299 57,098

Proceeds from sale of real estate, net 14,103 — —

Contributions to equity affiliates ( 19,593 ) ( 18,986 ) ( 17,809 )

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Payoffs and paydowns of securities held-to-maturity 483 4,626 19,030

Investments in real estate, net ( 3,471 ) — —

Due to borrowers and reserves ( 57,966 ) ( 141,152 ) ( 239,626 )

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Payoffs and paydowns of credit and repurchase facilities ( 9,025,305 ) ( 9,747,252 ) ( 12,153,215 )

Proceeds from mortgage note payable - REO 39,547 — —

Payoffs and paydowns of mortgage notes payable - REO ( 8,989 ) — —

Proceeds from issuance of securitized debt — — 2,762,502

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Payments of withholding taxes on net settlement of vested stock ( 4,565 ) ( 8,360 ) ( 8,188 )

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

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.

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(in thousands)

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

Repurchase of common stock ( 11,408 ) ( 37,431 ) —

Distributions to stockholders and non-controlling interest ( 394,843 ) ( 380,640 ) ( 321,739 )

Payment of deferred financing costs ( 21,239 ) ( 9,840 ) ( 50,362 )

Net cash (used in) provided by financing activities ( 2,490,314 ) ( 1,825,793 ) 1,574,368

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

Net (decrease) increase in cash, cash equivalents and restricted cash ( 877,028 ) 289,042 356,895

Cash, cash equivalents and restricted cash at beginning of period 1,537,207 1,248,165 891,270

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Supplemental schedule of non-cash investing and financing activities:

Real estate acquired in settlement of loans and investments, net 278,330 — —

Settlement of loans and investments, net of real estate ( 279,480 ) — —

Derecognition of real estate owned 177,146 — —

Loan funded in conjunction with real estate sold ( 182,485 ) — —

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

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

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

See Notes to Consolidated Financial Statements.

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our Structured Business and our Agency Business.

Through our Structured Business, we invest in a diversified portfolio of structured finance assets in the multifamily, SFR and commercial real estate markets, primarily consisting of bridge loans, in addition to mezzanine loans, junior participating interests in first mortgages and preferred and direct equity.

We also invest in real estate-related joint ventures and may directly acquire real property and invest in real estate-related notes and certain mortgage-related securities.

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We retain the servicing rights and asset management responsibilities on substantially all loans we originate and sell under the GSE and HUD programs.

We are an approved Fannie Mae DUS lender 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 are an approved Fannie Mae DUS lender nationally, a Freddie Mac Optigo ® Conventional Loan and SBL lender, seller/servicer, nationally and a HUD MAP and LEAN senior housing/healthcare lender nationally.

We also originate and retain the servicing rights on permanent financing loans underwritten using the guidelines of our existing agency loans sold to the GSEs, which we refer to as “Private Label” loans and originate and sell finance products through CMBS programs.

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federal income tax purposes.

A REIT is generally not subject to federal income tax on that portion of its REIT-taxable income that is distributed to its stockholders, provided that at least 90% of taxable income is distributed and provided that certain other requirements are met.

A REIT is generally not subject to federal income tax on that portion of its taxable income that is distributed to its stockholders;

provided that at least 90% of its taxable income is distributed and provided that certain other requirements are met.

Certain of our assets that produce non-qualifying REIT income, primarily within the Agency Business, are operated through TRS entities, which are part of our TRS Consolidated Group and are subject to U.S.

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Principles of Consolidation

The consolidated financial statements include our financial statements and the financial statements of our wholly owned subsidiaries, partnerships and other joint ventures in which we own a controlling interest, including variable interest entities (“VIEs”) of which we are the primary beneficiary.

The consolidated financial statements include our financial statements and the financial statements of our wholly owned subsidiaries, partnerships and other joint ventures in which we have a controlling interest, including variable interest entities (“VIEs”) of which we are the primary beneficiary.

Entities in which we have a significant influence are accounted for under the equity method.

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Actual results could differ from those estimates.

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

and global economies.

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

The ultimate impact of inflation, a currently high interest rate environment, bank failures, tightening of capital markets and reduced property values, both globally and to our business, makes any estimate or assumption at December 31, 2024 inherently less certain.

ARBOR REALTY TRUST, INC.

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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

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At the inception of each such investment, we determine whether such investment should be accounted for as a loan, equity interest or as real estate.

To date, we have determined that all such investments are properly accounted for and reported as loans.

At the time of purchase, we designate a debt security as available-for-sale, held-to-maturity, or trading depending on our ability and intent for the security.

Securities available-for-sale, which is included as a component of other assets in the consolidated balance sheets, is reported at fair value with the fluctuations in fair value recognized through earnings.

Held-to-maturity securities are carried at cost net of any unamortized premiums or discounts, which are amortized or accreted over the life of the securities.

For securities classified as held-to-maturity, an evaluation is performed as to whether a decline in fair value below the amortized cost basis is other-than-temporary.

The determination of other-than-temporary impairment is a subjective process requiring judgments and assumptions and is not necessarily intended to indicate a permanent decline in value.

The process includes, but is not limited to, assessment of recent market events and prospects for near-term recovery, assessment of cash flows, internal review of the underlying assets securing the investments, credit of the issuer and the rating of the security, as well as our ability and intent to hold the investment to maturity.

We closely monitor market conditions on which we base such decisions.

We do not intend to sell our held-to-maturity securities and it is not likely we will be required to sell the investments before their maturity, therefore, we carry our held-to-maturity securities at cost, net of any unamortized premiums or discounts, which are amortized or accreted over the life of the securities, and net of allowance for credit losses.

Allowance for Credit Losses.

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Our estimation of credit losses utilizes information obtained from internal and external sources relating to past events, current conditions and reasonable and supportable forecasts about the future.

We have licensed a third party model to assist with the measurement of expected credit losses, which utilizes incurred losses inherent in the portfolio.

The loss factors are determined through the generation of probability of defaults and loss given defaults for similar loans with similar credit.

These results require a significant amount of judgment applied in selecting inputs and analyzing the results produced by the models to determine the allowance for credit losses.

We have licensed a third party model to assist with the measurement of expected credit losses, which utilizes historical loss experience on similar loans.

The loss factors are determined through the generation of probability of defaults and loss given defaults for similar loans with similar credit (the "general reserve").

These results require a significant amount of judgment applied in selecting inputs and analyzing the results produced by the models to determine the general reserve.

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

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.

The reasonable and supportable forecast period is determined based on our assessment of the most likely scenario of assumptions and plausible outcomes for the U.S.

economy, level of historical loss forecast estimates, material changes in growth and credit strategy and other factors that may affect our loss experience.

We regularly evaluate the reasonable and supportable forecast period to determine if a change is needed.

We have a CECL working group consisting of members of accounting, asset management, credit risk management and capital markets that is responsible for, among other things, regularly reviewing the CECL methodology, including the adequacy of allowance levels, and ensuring that it is designed and applied in accordance with GAAP.

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

The reasonable and supportable forecast period is determined based on our assessment of the most likely scenario of assumptions and plausible outcomes for the macroeconomic environment, level of historical loss forecast estimates, material changes in growth and credit strategy and other factors that may affect our loss experience.

The macroeconomic factors that have a significant influence on our estimate of expected credit losses include price indices for commercial real estate, unemployment rates, and interest rates.

We are currently using a one year reasonable and supportable forecast period that we regularly evaluate to determine if a change is needed.

Beyond our reasonable and supportable forecast period, we generally revert to historical loss information over the remaining loan/asset period, taken from a period that most accurately reflects the expectation of conditions expected to exist during the period of reversion.

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The method of reversion selected represents the best estimate of the collectability of the investments and is reevaluated each reporting period.

We generally expect to use an average historical loss for reversion, utilizing an immediate or straight-line method for the remaining life of the investments.

We generally expect to use an average historical loss for reversion, utilizing a straight-line method for the remaining life of the investments.

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

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

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

If particular assets no longer display risk characteristics that are similar to those of the pool, we may decide to revise our pools or perform an individual assessment of expected credit losses.

Loans for which the borrower or sponsor is experiencing financial difficulty, and where repayment of the loan is expected substantially through the operation or sale of the underlying collateral, are considered collateral dependent loans.

For collateral dependent loans, we use the

ARBOR REALTY TRUST, INC.

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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.

If particular assets no longer display risk characteristics that are similar to those of the pool, we may decide to revise our pools or perform an individual assessment of expected credit losses.

If it is determined that a foreclosure is probable, or we expect repayment through the operation or sale of the collateral and the borrower is experiencing financial difficulty, we calculate expected credit losses based on the fair value of the collateral as of the reporting date.

practical expedient under CECL which allows us to measure expected losses based on the difference between the collateral’s fair value and the amortized cost basis of the loan (the "specific reserve").

When the repayment or satisfaction of the loan is dependent on a sale, rather than operations of the collateral, the fair value is adjusted for the estimated costs to sell the collateral.

If foreclosure is probable, we measure expected losses using the fair value of the collateral as of the reporting date.

During the loan review process, if we determine that it is probable that we will be unable to collect all amounts due for both principal and interest according to the contractual terms of a loan because the borrower is experiencing financial difficulty, or where foreclosure is probable, we evaluate whether that loan is impaired and a specific reserve is required.

We consider the capitalization and market discount rates, as well as the borrower’s operating income and cash flows, in estimating the value of the underlying collateral when determining if a loan is impaired.

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Such appraisals may be used as an additional source of valuation information only and no adjustments are made to appraisals.

If, upon completion of the valuation, the fair value of the underlying collateral securing the impaired loan is less than the net carrying value of the loan, we record a specific allowance for credit losses with a corresponding charge to the provision for credit losses and remove the impaired loan from the CECL analysis described above.

If a loan modification constitutes a concession whereas we do not receive ample consideration in return for the modification, and the borrower is experiencing financial difficulties and cannot repay the loan under the current terms, then the modification is considered by us to be a troubled debt restructuring.

If, upon completion of the valuation, the fair value of the underlying collateral securing the impaired loan is less than the net carrying value of the loan, we record a specific reserve for credit losses with a corresponding charge to the provision for credit losses and remove the impaired loan from the general reserve CECL analysis described above.

In order to improve long-term collectibility efforts, we may agree to amend or modify loans to certain borrowers experiencing financial difficulty based on specific facts and circumstances in order to avoid foreclosure and repossession of the underlying collateral.

The loan modifications to borrowers experiencing financial difficulty may include a delay in payments, including payment deferrals, term extensions, principal forgiveness and interest rate reductions, or a combination thereof.

We record interest on modified loans on an accrual basis to the extent the modified loan is contractually current.

The allowance for credit losses on a troubled debt restructuring is measured using the same method as all other loans held for investment.

The allowance for credit losses on loan modifications is measured using the same method as all other loans held for investment.

Charge-offs to the allowance for credit losses occur when losses are confirmed through the receipt of cash or other consideration from the completion of a sale;

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

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.

We record a charge-off 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.

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Fannie Mae bears any remaining loss.

In addition, under the terms of the master loss-sharing agreement with Fannie Mae, we are responsible for funding 100 % of mortgage delinquencies (principal and interest) and servicing advances (taxes, insurance and foreclosure costs) until the amounts advanced exceed 5 % of the UPB at the date of default.

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

ARBOR REALTY TRUST, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

at the date of default.

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

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

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Historically, initial loss recognition occurs at or before a loan becomes 60 days delinquent.

In instances where payment under the guaranty on a loan is determined to be probable and estimable (as the loan is probable of, or is, in foreclosure), we record a liability for the estimated allowance for loss-sharing (a “specific reserve”) by transferring the guarantee obligation recorded on the loan to the specific reserve with any adjustments to this reserve amount recorded in provision for loss sharing in the statements of income.

In instances where payment under the guaranty on a loan is determined to be probable and estimable (as the loan is probable of, or is, in foreclosure), we record a liability for the estimated loss-sharing specific reserve by transferring the guarantee obligation recorded on the loan to the specific reserve with any adjustments to this reserve amount recorded in provision for loss sharing in the statements of income.

The amount of the allowance considers our assessment of the likelihood of repayment by the borrower or key principal(s), the risk characteristics of the loan, the loan’s risk rating, historical loss experience, adverse situations affecting individual loans, the estimated disposition value of the underlying collateral, and the level of risk sharing.

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We invest in joint ventures that are formed to invest in real estate-related assets or businesses.

These joint ventures are not majority owned or controlled by us or are VIEs for which we are not the primary beneficiary, and are not consolidated in our financial statements.

These investments are recorded under either the equity or cost method of accounting as deemed appropriate.

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

These joint ventures are not majority owned or controlled by us or are VIEs for which we are not the primary beneficiary, and are not

ARBOR REALTY TRUST, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

consolidated in our financial statements.

These investments are recorded under either the equity or cost method of accounting as deemed appropriate.

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 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.

Goodwill and Other Intangible Assets.

Significant judgement is required to estimate the fair value of intangible assets and in assigning their estimated useful lives.

Accordingly, we typically seek the assistance of independent third party valuation specialists for significant intangible assets.

We typically use independent third party valuation specialists to assist us in estimating the fair value of intangible assets and in assigning their estimated useful lives.

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

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Real Estate Owned and Held-For-Sale.

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.

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

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

Real estate acquired is recorded in other assets on our consolidated balance sheets.

We allocate the purchase price of our real estate acquisitions to land, building, tenant improvements, origination asset of the in-place leases, intangibles for the value of any above or below market leases at fair value and to any other identified intangible assets or liabilities.

We allocate our real estate acquisitions to land, building, tenant improvements, origination asset of the in-place leases, intangibles for the value of any above or below market leases at fair value and to any other identified intangible assets or liabilities based on their relative fair values.

We amortize the value allocated to in-place leases over the remaining lease term, which is reported in depreciation and amortization expense on our consolidated statements of income.

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Real estate assets that are expected to be disposed of are valued at the lower of the asset’s carrying amount or its fair value less costs to sell.

We recognize sales of real estate properties upon closing.

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

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.

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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.

We recognize sales of real estate properties, including the respective gains and losses, upon closing, when control of the asset transfers to the buyer, when it is probable that we will collect substantially all of the agreed upon consideration, and we are not obligated to perform significant activities after the sale.

Hedging Activities and Derivatives .

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Interest income is recognized on the accrual basis as it is earned.

In certain instances, the borrower pays an additional amount of interest at the time the loan is closed, an origination fee, a prepayment fee and/or deferred interest upon maturity.

In certain instances, the borrower pays an additional amount of interest at the time the loan is closed, an origination fee, a prepayment fee, an exit fee and/or deferred interest upon maturity.

In some cases, interest income may also include the amortization or accretion of premiums and discounts arising from the purchase or origination of the loan or security.

This additional income, net of any direct loan origination costs incurred, is deferred and accreted into interest income on an effective yield or “interest” method adjusted for actual prepayment activity over the life of the related loan or security as a yield adjustment.

Income recognition is suspended for loans when, in our opinion, a full recovery of all contractual principal and/or interest is not probable.

We record interest on modified loans on an accrual basis to the extent the modified loan is contractually current.

Income recognition is suspended and all accrued interest to date is reversed for loans when, in our opinion, a full recovery of all contractual principal and/or interest is not probable.

Income recognition is resumed when the loan becomes contractually current, and performance is resumed.

We record interest income on certain impaired loans to the extent cash is received, as the borrower continues to make interest payments.

We record loan loss reserves related to these loans when it is deemed that full recovery of principal and accrued interest is not probable.

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,

ARBOR REALTY TRUST, INC.

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based on the underlying collateral and operations of the asset.

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, as well as the strength and guarantee of the sponsors.

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

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Recognition of income on loans with funded interest reserves are accounted for in the same manner as loans without funded interest reserves.

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.

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.

We classify loans as non-accrual and recognize income only to the extent cash is received on:

(1) all loans that exceed 60 days past due (otherwise referred to as non-performing loans);

and (2) loans that are 60 days past due or less, if we have determined there is reasonable doubt about collectability of all principal and interest.

When a loan is placed on non-accrual status, all accrued interest to date is reversed and full income recognition resumes when the loan becomes contractually current and performance has recommenced.

Additionally, interest income is recorded when earned from equity participation interests, referred to as equity kickers.

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Interest income is recognized on the accrual basis as it is earned from loans held-for-sale.

Property operating income — Property operating income represents income associated with the operations of commercial real estate properties classified as real estate owned and included in other assets on our consolidated balance sheets.

Property operating income — Property operating income represents income associated with the operations of commercial real estate properties classified as real estate owned.

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.

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We organize and conduct our operations to qualify as a REIT and to comply with the provisions of the Internal Revenue Code with respect thereto.

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 its taxable income that is distributed to its stockholders;

provided that at least 90% of its taxable income is distributed and provided that certain other requirements are met.

Certain REIT income may be subject to state and local income taxes.

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federal, state and local income taxes.

In general, our TRS entities may hold assets that the REIT cannot hold directly and may engage in real estate or non-real estate-related business.

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

In general, our TRS entities may hold assets that the REIT cannot hold directly and may engage in real estate

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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.

or non-real estate-related business.

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.

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.

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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.

Reclassification

Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period financial statements.

Our real estate owned assets and mortgage notes payable previously recorded within other assets and other liabilities on our consolidated balance sheets are now recorded to real estate owned, net and mortgage notes payable - real estate owned for all periods presented.

Recently Adopted Accounting Pronouncements

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

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures, which expands disclosures about a public entity’s reportable segments and requires more enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how a public entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources.

Fiscal year 2024, with early adoption permitted The adoption of this guidance did not have a material impact on our consolidated financial statements and we have included the required enhanced disclosures within Note 21.

ARBOR REALTY TRUST, INC.

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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):

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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.

We are not early adopting and will add the necessary disclosures upon adoption.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses, which requires disclosures of expenses in the income statement by breaking down expenses into specific categories, such as purchases of inventory, employee compensation, and costs related to depreciation and amortization, and presenting them in a clear, tabular format.

Fiscal year 2026, with early adoption permitted We are currently assessing the impact this guidance will have on our consolidated financial statements and will make all necessary additional disclosure requirements once adopted.

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.

In March 2024, the FASB issued ASU 2024-01, Scope Application of Profits Interest and Similar Awards, effective in the first quarter of 2025.

We currently do not have any transactions that fall under the scope of this ASU;

therefore, the adoption is not expected to have an impact on our consolidated financial statements.

ARBOR REALTY TRUST, INC.

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Preferred equity investments 148,845 1 % 27 6.42 % 53.9 62 % 79 %

Construction - multifamily 4,367 < 1 % 2 9.97 % 20.8 0 % 42 %

SFR permanent loans 3,082 < 1 % 1 9.36 % 10.3 0 % 40 %

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

Total UPB 11,304,956 100 % 776 6.90 % 13.1 2 % 80 %

Allowance for credit losses ( 238,967 )

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

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

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

Allowance for credit losses ( 195,664 )

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________________________________________

(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.

(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 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.

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(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.

(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.

(5) At December 31, 2024 and 2023, bridge loans included 423 and 354 , respectively, of SFR loans with a total gross loan commitment of $ 4.18 billion and $ 2.86 billion, respectively, of which $ 1.99 billion and $ 1.32 billion, respectively, was funded.

(6) Excludes exit fee receivables of $ 46.6 million and $ 38.5 million at December 31, 2024 and 2023, respectively, which is included in other assets on the consolidated balance sheets.

Concentration of Credit Risk

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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.

Each credit risk rating has benchmark guidelines that pertain to debt-service coverage ratios, LTV ratios, borrower strength, asset quality, and funded cash reserves.

Other factors such as guarantees, market strength, and remaining loan term and borrower equity are also reviewed and factored into determining the credit risk rating assigned to each loan.

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

Each credit risk rating has benchmark guidelines that pertain to debt-service coverage ratios, LTV ratios, borrower strength, asset quality, payment status in accordance with current contractual terms,

ARBOR REALTY TRUST, INC.

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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.

A risk rating of substandard indicates we anticipate the loan may require a modification of some kind.

A risk rating of doubtful indicates we expect the loan to underperform over its term, and there could be loss of interest and/or principal.

Further, while the above are the primary guidelines used in determining a certain risk rating, subjective items such as borrower strength, market strength or asset quality may result in a rating that is higher or lower than might be indicated by any risk rating matrix.

and funded cash reserves.

Other factors such as guarantees, market strength, and remaining loan term and borrower equity are also reviewed and factored into determining the credit risk rating assigned to each loan.

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.

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 current loan agreement or based on our current assessment of the collateral value of the property or financial strength of the guarantors.

A risk rating of substandard indicates we have observed weaknesses in one or more of the loan's credit quality factors and we anticipate the loan may require a modification of some kind to avoid a loss of interest and/or principal.

A risk rating of doubtful indicates we expect the loan to underperform over its term, there could be loss of interest and/or principal, and we may need to take action to protect our investment including foreclosing on the underlying collateral.

Further, while the above are the primary guidelines used in determining a certain risk rating, subjective items such as financial strength of guarantors, market strength, asset quality, or a borrower's ability to perform under modified loan terms may result in a rating that is higher or lower than might be indicated by any risk rating matrix.

A summary of the loan portfolio’s internal risk ratings and LTV ratios by asset class at December 31, 2024, and charge-offs recorded during 2024 is as follows ($ in thousands):

UPB by Origination Year Total Wtd.

LTV Ratio Wtd.

Asset Class / Risk Rating 2024 2023 2022 2021 2020 Prior

Pass $ 308,228 $ 41,713 $ 69,000 $ 10,205 $ 2,010 $ 24,823 $ 455,979

Pass/Watch 357,724 308,353 1,012,593 462,709 119,860 113,100 2,374,339

Special Mention 79,618 31,344 2,340,782 2,958,064 — 94,529 5,504,337

Substandard — 658 159,100 206,277 — 21,700 387,735

Doubtful 12,460 — 193,850 159,379 14,800 9,765 390,254

Total Multifamily $ 758,030 $ 382,068 $ 3,775,325 $ 3,796,634 $ 136,670 $ 263,917 $ 9,112,644 2 % 83 %

Single-Family Rental:

Percentage of portfolio 81 %

Pass $ 246,234 $ 32,875 $ 10,683 $ — $ — $ — $ 289,792

Pass/Watch 422,063 410,419 356,567 94,503 41,848 — 1,325,400

Special Mention — 31,043 139,125 107,155 87,967 — 365,290

Doubtful 5,704 10,786 — — — — 16,490

Total Single-Family Rental $ 674,001 $ 485,123 $ 506,375 $ 201,658 $ 129,815 $ — $ 1,996,972 0 % 61 %

Percentage of portfolio 18 %

Pass $ 7,282 $ — $ — $ — $ — $ — $ 7,282

Special Mention — — — — 3,500 — 3,500

Substandard — — — — — 127,928 127,928

Total Land $ 7,282 $ — $ — $ — $ 3,500 $ 127,928 $ 138,710 0 % 96 %

Percentage of portfolio 1 %

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

Total Office $ — $ — $ — $ — $ 35,410 $ — $ 35,410 0 % 94 %

Percentage of portfolio < 1 %

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 0 % 100 %

Percentage of portfolio < 1 %

Grand Total $ 1,439,313 $ 867,191 $ 4,281,700 $ 3,998,292 $ 305,395 $ 413,065 $ 11,304,956 2 % 80 %

Charge-offs $ 464 $ — $ 4,077 $ 7,668 $ — $ — $ 12,209

ARBOR REALTY TRUST, INC.

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At December 31, 2023, underlying properties in Texas and Florida represented 24 % and 17 %, respectively, of the outstanding balance of our loan and investment portfolio.

No other state represented 10 % or more of the total loan and investment portfolio.

No other states represented 10% or more of the total loan and investment portfolio.

ARBOR REALTY TRUST, INC.

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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

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Provision for credit losses (net of recoveries) 19,254 98 — — 461 89 ( 584 ) 19,318

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

Ending balance $ 37,961 $ 78,068 $ 5,819 $ 1,700 $ 780 $ 8,162 $ 69 $ 132,559

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.

________________________

(1) Includes $ 8.4 million of specific reserves on two multifamily bridge loans that we foreclosed on and took back the underlying collateral as REO assets at fair value.

During 2024, we recorded a $ 55.5 million provision for credit losses, net of recoveries, on our structured portfolio.

The additional provision for credit losses was primarily attributable to specifically impaired multifamily loans and the impact from the macroeconomic outlook of the commercial real estate market.

Our estimate of allowance for credit losses on our structured portfolio, including related unfunded loan commitments, was based on a reasonable and supportable forecast period that reflects recent observable data, including price indices for commercial real estate, unemployment rates, and interest rates.

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.

Our CECL allowance for unfunded loan commitments is adjusted quarterly and corresponds with the associated outstanding loans.

At December 31, 2024 and 2023, we had outstanding unfunded commitments of $ 2.20 billion and $ 1.31 billion, respectively, that we are obligated to fund as borrowers meet certain requirements.

The outstanding unfunded commitments are predominantly related to our SFR build-to-rent business.

At December 31, 2024 and 2023, accrued interest receivable related to our loans totaling $ 154.4 million and $ 124.2 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):

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

ARBOR REALTY TRUST, INC.

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December 31, 2023

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

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

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(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.

Non-performing and Other Non-accrued Loans

(1) Represents the UPB of twenty-seven and nineteen impaired loans (less unearned revenue and other holdbacks and adjustments) by asset class at December 31, 2024 and 2023, respectively.

Non-performing 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.

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

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

At December 31, 2024, twenty-six loans with an aggregate net carrying value of $ 598.9 million, net of related loan loss reserves of $ 23.8 million, were classified as non-performing and, at December 31, 2023, sixteen loans with a total net carrying value of $ 235.6 million, net of related loan loss reserves of $ 27.1 million, were classified as non-performing.

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

December 31, 2024 December 31, 2023

UPB Less Than

Past Due Greater Than

Past Due UPB Less Than

Past Due Greater Than

UPB Carrying Value UPB Carrying Value

Multifamily $ 649,227 $ 620,072 $ 271,532 $ 260,129

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Total $ 651,847 $ 622,682 $ 274,152 $ 262,739

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.

At both December 31, 2024 and 2023, we had no loans contractually past due greater than 60 days that are still accruing interest.

Other Non-accrual Loans

In this challenging economic environment, we began experiencing late and partial payments on certain loans in our structured portfolio.

Beginning in the fourth quarter of 2023, for loans that are 60 days past due or less, if we have determined there is reasonable doubt about collectability of all principal and interest, we classify those loans as non-accrual and recognize interest income only when cash is received.

The table below is a summary of those loans that are 60 days past due or less that we have classified as non-accrual, and changes to those loans for the period presented (in thousands).

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Year ended December 31, 2024

Beginning balance ( twenty-four multifamily bridge loans)

Loans that progressed to greater than 60 days past due ( 676,881 )

Loans modified or paid off (1) ( 1,103,676 )

Additional loans that are now less than 60 days past due experiencing late and partial payments 991,068

Ending balance ( nine multifamily bridge loans)

________________________

(1) The modifications included bringing the loans current by paying past due interest owed (see Loan Modifications section below).

There were no other non-accrual loans that were 60 days or less past due at December 31, 2024.

During the year ended December 31, 2024 and 2023, we recorded $ 23.2 million and $ 92.5 million, respectively, of interest income on non-performing and other non-accrual loans.

In addition, we have six loans with a carrying value totaling $ 121.4 million at December 31, 2024, that are collateralized by a land development project.

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At both December 31, 2024 and 2023, we had a cumulative allowance for credit losses of $ 71.4 million related to these loans.

The loans are subject to certain risks

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.

Loan Modifications

We may agree to amend or modify loans to certain borrowers experiencing financial difficulty based on specific facts and circumstances in order to improve long-term collectability efforts and avoid foreclosure and repossession of the underlying collateral.

The loan modifications to borrowers experiencing financial difficulty may include a delay in payments, including payment deferrals, term extensions, principal forgiveness, interest rate reductions, or a combination thereof.

We record interest on modified loans on an accrual basis to the extent the modified loan is contractually current and we believe it is ultimately collectible.

The allowance for credit losses on loan modifications is measured using the same method as all other loans held for investment.

As part of the modifications of each of these loans, we expect borrowers to invest additional capital to recapitalize their projects, which the vast majority have funded in the form of either, or a combination of:

(1) reallocation of and/or additional deposits into interest, renovation and/or general reserves;

(2) the purchase of a new rate cap;

(3) a principal paydown of the loan;

and (4) bringing any delinquent loans current by paying past due interest owed.

The following table represents the UPB of loan modifications, as of the modification date, made to borrowers experiencing financial difficulty during 2024 and the deferred interest recorded on those loans at December 31, 2024 (in thousands):

Asset Class Payment Deferrals With/Without Term Extensions (1) Term Extensions (2) Rate Reductions With/Without Term Extensions (3) Other (4) Total (5)(6) December 31, 2024 Deferred Interest (7)

Multifamily $ 2,312,067 $ 984,372 $ 134,630 $ 574,491 $ 4,005,560 $ 28,600

Single-Family Rental 74,078 — 38,479 — 112,557 570

Total UPB $ 2,386,145 $ 984,372 $ 173,109 $ 574,491 $ 4,118,117 $ 29,170

________________________

(1) These loans were modified to a weighted average pay rate and deferred rate of 5.99 % and 2.06 %, respectively, at December 31, 2024 and to extend the weighted average term by 14.4 months.

These modifications include loans with a total UPB of $ 379.0 million in which the pay rate increases from time-to-time throughout the loans maturities.

(2) These loans were modified to extend the maturity date.

The weighted average term extension was 11.7 months.

ARBOR REALTY TRUST, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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:

(1) reduce the interest rate on both loans to the greater of:

(i) LIBOR plus 5.50 % and (ii) 6.50 %, and (2) to extend the maturity three years to December 2024.

A portion of the foregoing interest equal to 2.00 % was deferred to payoff and would have been waived if the loan was paid off by December 31, 2022, which did not take place.

The loan modification agreement also included a $ 6.0 million required principal paydown, which occurred at the closing of the modification transaction, and an $ 8.0 million principal reduction once the borrower deposited an additional reserve of $ 4.6 million, which took place in 2021 and was charged-off against the previously recorded allowance for credit losses.

In 2019, we purchased $ 50.0 million of a $ 110.0 million bridge loan, which was collateralized by a hotel property and scheduled to mature in December 2023.

In 2021, we recorded a $ 7.5 million allowance for credit losses due to a reduction in the appraised value of the property.

In 2021, we purchased the remaining $ 60.0 million bridge loan at a discount for $ 39.9 million, which we determined had experienced a more than insignificant deterioration in credit quality since origination and, therefore, deemed to be a purchased loan with credit deterioration.

The $ 20.1 million discount was classified as a noncredit discount and no portion of the discount was allocated to allowance for credit losses at the date of purchase, since the appraised value of the property was greater than the purchase price.

Shortly after the purchase, we entered into a forbearance agreement with the borrower to temporarily reduce the interest rate from LIBOR plus 3.00 % with a 1.50 % LIBOR floor to a pay rate of 1.00 % and to include a $ 10.0 million principal reduction if the loan is paid off by March 2, 2021.

In 2021, we entered into a second forbearance agreement that temporarily eliminated the pay rate, extended the principal reduction payoff deadline to June 30, 2021 and increased the interest rate to an unaccrued default rate of 9.50 %, which was deferred until payoff.

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.

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

(3) These loans were modified to extend the weighted average term by 23.6 months and to reduce the weighted average interest rate by 0.62 %.

(4) These loan modifications included amending certain terms, such as reallocating and/or replenishment of reserves.

(5) The total UPB of the loan modifications made during 2024 was $ 3.97 billion at December 31, 2024 and represents 35 % of our total Structured Business loans and investments portfolio.

(6) At December 31, 2024, modified loans with a total UPB of $ 413.4 million have specific reserves totaling $ 44.3 million.

(7) These amounts are included in other assets on the consolidated balance sheets.

The following table represents the UPB of loan modifications, as of the modification date, made to borrowers experiencing financial difficulty during 2023 and the deferred interest recorded on those loans at December 31, 2024 (in thousands):

Asset Class Payment Deferrals With Term Extensions (1)(2) December 31, 2024 Deferred Interest (3)

Multifamily $ 398,461 $ 9,945

________________________

(1) These loans were modified to a weighted average pay rate and deferred rate of 5.92 % and 2.16 % at December 31, 2024, respectively, and to extend the weighted average term by 14.6 months.

(2) The total UPB of the loan modifications made during 2023 was $ 351.8 million at December 31, 2024 and represents 3 % of our total Structured Business loans and investments portfolio.

(3) The deferred interest balance was $ 2.3 million at December 31, 2023.

These amounts are included in other assets on the consolidated balance sheets.

At December 31, 2024, we had future funding commitments on modified loans with borrowers experiencing financial difficulty of $ 56.4 million, which are generally subject to performance covenants that must be met by the borrower to receive funding.

All of the above modified loans were performing pursuant to their contractual terms at December 31, 2024, except for twelve loans with a total UPB of $ 395.8 million which were modified in 2024.

Since these loans are not performing pursuant to their modified terms, these loans are classified as non-accrual loans.

Three of these loans with a UPB of $ 100.4 million have a specific reserve of $ 20.2 million.

The remaining nine loans with a total UPB of $ 295.4 million have no specific reserves as the estimated fair value of the properties exceeded our carrying value at December 31, 2024.

Seven of the twelve loans with a total UPB of $ 204.6 million were modified to provide temporary rate relief through a pay and accrual feature.

There were no other material loan modifications, refinancings and/or extensions during 2024, 2023 or 2022 for borrowers experiencing financial difficulty.

Loan Resolutions

In the fourth quarter of 2024, we exercised our right to foreclose on two properties in Houston, Texas, that were the underlying collateral for two bridge loans with an aggregate UPB of $ 73.3 million, a weighted average interest rate of SOFR plus 3.29 %, with a weighted average SOFR floor of 0.68 %, and an aggregate net carrying value of $ 56.5 million, which includes loan loss reserves totaling $ 9.0 million and holdback reserves totaling $ 8.2 million.

At foreclosure, we recorded a $ 7.7 million loan loss recovery and charged-off the remaining loan loss reserves of $ 1.3 million.

Additionally, we simultaneously sold both properties for $ 67.6 million to a new borrower and provided two new bridge loans totaling $ 67.6 million with a weighted average fixed interest rate of 4.25 % for the first two years and 5.75 % in the third year.

The new financing was deemed to be a significant financing component of the transaction and, as a result, we recorded a loss and corresponding liability totaling $ 5.0 million as an adjustment to the purchase price, which will be accreted into interest income over the life of the loan.

The gains and losses of this transaction were recorded through the provision for credit losses (net of recoveries) on the consolidated statements of income.

In July 2024, we exercised our right to foreclose on a property in Waco, Texas, that was the underlying collateral for a non-performing bridge loan with a UPB of $ 12.7 million, an interest rate of SOFR plus 3.75 %, with a SOFR floor of 0.10 %, and a net carrying value of $ 11.3 million, which was net of a $ 1.5 million loan loss reserve.

At foreclosure, we recorded a $ 1.0 million loan loss recovery and charged-off the remaining loan loss reserve.

Additionally, we simultaneously sold the property for $ 12.3 million to a new borrower and provided a new $ 12.3 million bridge loan with an interest rate of SOFR, with a SOFR floor of 5.25 %, which was deemed to be a significant financing component of the transaction.

As a result, we recorded a loss and corresponding liability of $ 1.0 million as an

ARBOR REALTY TRUST, INC.

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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.

adjustment to the purchase price which will be accreted into interest income over the life of the loan.

The gains and losses of this transaction were recorded through the provision for credit losses (net of recoveries) on the consolidated statements of income.

In July 2024, we exercised our right to foreclose on a property in Savannah, Georgia, that was the underlying collateral for a non-performing bridge loan with a UPB of $ 7.3 million, an interest rate of SOFR plus 3.75 %, with a SOFR floor of 0.10 %, and a net carrying value of $ 6.6 million, which was net of a $ 0.8 million loan loss reserve.

At foreclosure, we recorded a $ 0.8 million loan loss recovery and a gain of $ 0.3 million.

Additionally, we simultaneously sold the property for $ 7.7 million to a new borrower and provided a new $ 7.3 million bridge loan with a fixed pay rate of 4.00 % and a fixed accrual rate of 2.00 % that is deferred to payoff, which was deemed to be a significant financing component of the transaction.

As a result, we recorded a loss and corresponding liability of $ 0.5 million as an adjustment to the purchase price which will be accreted into interest income over the life of the loan.

The gains and losses of this transaction were recorded through the provision for credit losses (net of recoveries).

In April 2024, we exercised our right to foreclose on a group of properties in Houston, Texas, that were the underlying collateral for a bridge loan with a UPB of $ 100.3 million.

We simultaneously sold the properties for $ 101.3 million to a newly formed entity, which was initially capitalized with $ 15.0 million of equity and a new $ 95.3 million bridge loan that we provided at SOFR plus 3.00 %.

At December 31, 2024, total equity invested was $ 21.2 million and is made up of $ 9.4 million from AWC Real Estate Opportunity Partners I LP ("AWC”), a fund in which we have a 49 % non-controlling limited partnership interest (see Note 8 for details) and $ 11.8 million from multiple independent ownership groups.

AWC and one of the other equity members are the co-managing members of the entity that owns the real estate.

We did not record a loss on the original bridge loan and received all past due interest owed.

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 classified as real estate owned 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 April 2023, we exercised our right to foreclose on a group of properties in Houston, Texas, that are the underlying collateral for 4 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 totaling $ 239.4 million with a fixed pay rate increasing over time from 3.00 % to 5.00 %, while deferring up to a weighted average rate of SOFR plus 3.47 %.

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.

At December 31, 2024 and 2023, we have deferred interest totaling $ 22.2 million and $ 10.3 million accrued, respectively, related to these new loans, which is included in other assets.

In 2022, we sold four 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.

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At December 31, 2024 and 2023, we had total interest reserves of $ 215.4 million and $ 156.1 million, respectively, on 589 loans and 537 loans, respectively, with an aggregate UPB of $ 8.65 billion and $ 8.44 billion, respectively.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Note 4 — Loans Held-for-Sale, Net

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Fannie Mae $ 171,235 $ 477,212

Private Label 50,235 152,735

Freddie Mac 159,201 50,235

FHA 65,589 4,832

Private Label 38,962 11,350

SFR - Fixed Rate 3,246 8,696

Freddie Mac 4,832 8,938

438,233 552,325

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During 2024, 2023 and 2022, we sold $ 4.61 billion, $ 4.89 billion and $ 5.44 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.

During 2022, we recorded a net impairment loss of $ 5.2 million on seven Private Label loans held-for-sale with a UPB of $ 129.9 million and a net carrying value of $ 116.4 million.

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

At December 31, 2024 and 2023, 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

Our capitalized MSRs reflect commercial real estate MSRs derived primarily from loans sold in our Agency Business or acquired MSRs.

The discount rates used to determine the present value of all our MSRs throughout the periods presented were between 8 % - 14 % (representing a weighted average discount rate of 12 %) based on our best estimate of market discount rates.

The weighted average estimated life remaining of our MSRs was 6.9 years and 8.0 years at December 31, 2024 and 2023, respectively.

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We collected prepayment fees totaling $ 3.0 million and $ 6.4 million during 2024 and 2023, respectively, which are included as a component of servicing revenue, net on the consolidated statements of income.

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

At December 31, 2024 and 2023, no MSRs were considered impaired.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The expected amortization of capitalized MSRs recorded at December 31, 2024 is as follows (in thousands):

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

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Note 6 – Mortgage Servicing

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At December 31, 2024 and 2023, our weighted average servicing fee was 37.8 basis points and 39.1 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.

At December 31, 2024 and 2023, we held total escrow balances (including unfunded CLO hold backs) of approximately $ 1.45 billion and $ 1.60 billion, respectively, of which approximately $ 1.41 billion and $ 1.54 billion is not included in our consolidated balance sheets at December 31, 2024 and 2023, respectively.

These escrows are maintained in separate accounts at several federally insured depository

ARBOR REALTY TRUST, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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.

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

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Prepayment fees 2,984 6,387 48,197

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

Write-offs and payoffs of MSRs ( 8,500 ) ( 14,736 ) ( 44,502 )

Amortization of MSRs ( 68,422 ) ( 63,093 ) ( 59,876 )

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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 6.3 years.

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.

The weighted average effective interest rate was 8.84 % and 8.85 % at December 31, 2024 and 2023, respectively, including the accretion of a portion of the discount deemed collectible.

Approximately $ 192.8 million is estimated to mature in five to ten years.

Agency B Piece Bonds.

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The weighted average effective interest rate was 11.76 % and 11.28 % at December 31, 2024 and 2023, respectively, including the accretion of a portion of the discount deemed collectible.

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.

Approximately $ 37.2 million is estimated to mature after ten years.

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

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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

Year Ended December 31, 2024 Year Ended December 31, 2023

Certificates B Piece

Bonds Total APL

Certificates B Piece

Beginning balance $ 2,272 $ 3,984 $ 6,256 $ 2,783 $ 370 $ 3,153

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Ending balance $ 1,658 $ 9,188 $ 10,846 $ 2,272 $ 3,984 $ 6,256

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.

The allowance for credit losses on our held-to-maturity securities consists of (1) a general reserve 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, and (2) a specific reserve for underlying loans that are probable of, or is, in foreclosure.

The issuers continue to make timely principal and interest payments and we continue to accrue interest on all our securities.

At December 31, 2023, no other-than-temporary impairment was recorded on our held-to-maturity securities.

We recorded interest income (including the amortization of discount) related to these investments of $ 15.9 million, $ 13.6 million and $ 18.6 million during 2024, 2023 and 2022, respectively.

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1,895 1,895 —

The Park at Via Terrossa 606 — 21,845

JT Prime 425 425 —

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We account for our ownership interest in ARI under the equity method of accounting and ARI accounts for its ownership interest in Wakefield under the equity method of accounting.

During 2023, 2022 and 2021, we recorded income of $ 0.6 million, $ 4.9 million and $ 34.6 million, respectively, to income from equity affiliates in the consolidated statements of income.

During 2024, 2023 and 2022, we recorded a loss of $ 1.2 million, income of $ 0.6 million and income of $ 4.9 million, respectively, to income from equity affiliates in the consolidated statements of income.

We also received $ 7.7 million and $ 15.0 million in cash distributions from this investment during 2024 and 2023, respectively, which were classified as returns of capital.

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During 2024, 2023 and 2022, we recorded losses associated with this investment of $ 2.3 million, $ 1.9 million and $ 2.4 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.

ARBOR REALTY TRUST, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

2024 and 2023, we made contributions of $ 4.1 million and $ 0.7 million, respectively, and received cash distributions of $ 1.1 million in 2023, which were classified as returns of capital, related to this investment.

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.

During 2024 and 2023, we made contributions of $ 1.1 million and $ 1.0 million, respectively, and recorded income associated with this investment of $ 0.1 million and a loss of $ 1.2 million, respectively.

Operating results from this investment were de minimis for 2022.

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.

In the fourth quarter of 2023, we committed to a $ 24.0 million investment, of which $ 11.7 million was initially funded, 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 1 % general partnership interest, of which $ 0.3 million was funded at December 31, 2024.

In the second quarter of 2024, in accordance with the fund's objectives, AWC brought in an additional capital partner who committed to a $ 25.0 million investment ($ 16.3 million was funded at December 31, 2024) in exchange for a 51 % non-controlling limited partnership interest and 17.5 % of the general partner's interest in the fund.

This new equity partner diluted our limited partnership interest in the fund to a 49 % non-controlling limited partnership interest.

Additionally, AWC invested $ 9.4 million for a 44 % interest in a newly formed entity, which purchased a group of properties in Houston, Texas, that were the collateral for a $ 100.3 million bridge loan that we foreclosed on simultaneously with the sale.

We sold the Houston properties for $ 101.3 million, which was primarily financed with a new $ 95.3 million bridge loan we provided at SOFR plus 3 %.

See Note 3 for details.

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

The remaining $ 14.3 million of capital invested in the fund was used to purchase four additional qualified investments and to pay for legal and administrative expenses primarily related to the formation of the fund.

We provided a $ 13.0 million Fannie Mae DUS loan and a $ 13.2 million bridge loan to the owners of the real estate on two of these investments.

During 2024, we made contributions of $ 13.6 million, received distributions of $ 11.2 million, which were classified as returns of capital, and recorded a loss of $ 0.5 million related to this investment.

Interest income recorded from the $ 95.3 million and $ 13.2 million bridge loans was $ 5.4 million for the year ended December 31, 2024.

ARSR DPREF I LLC.

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

During 2024, we recorded income associated with this investment of $ 0.7 million and received distributions of $ 0.4 million which were classified as returns of capital.

Lightstone Value Plus REIT L.P.

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

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.

The Park at Via Terrossa.

In the first quarter of 2024, we contributed $ 0.6 million, for a 5 % interest in a multifamily property.

Operating results from this investment were de minimis during 2024.

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

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We own a less than $ 0.1 million noncontrolling equity interest in Lexford, a portfolio of multifamily assets.

In 2023 and 2022, we received distributions from this investment and recognized income totaling $ 12.2 million and $ 11.1 million, net of expenses, respectively.

As a result of COVID-19, Lexford did not make any distributions to its equity holders in 2021.

In 2024 and 2023, we received distributions from this investment and recognized income totaling $ 9.0 million and $ 12.2 million, respectively.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

East River Portfolio.

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Equity Participation Interest.

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.

During 2023, we received $ 14.5 million 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.

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

See Note 19 for details of certain investments described above.

Note 9 — Real Estate Owned

A summary of our REO assets is as follows (in thousands):

December 31, 2024 December 31, 2023

Multifamily Office Land Total Multifamily Office Land Total

Land $ 29,171 $ 13,599 $ 7,947 $ 50,717 $ 3,148 $ 12,028 $ 7,947 $ 23,123

Building and intangible assets 99,812 35,561 — 135,373 26,953 42,781 — 69,734

Impairment loss

— ( 2,500 ) — ( 2,500 ) — — — —

Accumulated depreciation and amortization

( 4,497 ) ( 2,550 ) — ( 7,047 ) ( 2,168 ) ( 3,698 ) — ( 5,866 )

Real estate owned, net $ 124,486 $ 44,110 $ 7,947 $ 176,543 $ 27,933 $ 51,111 $ 7,947 $ 86,991

At December 31, 2024, our REO assets were comprised of four multifamily properties, two office buildings and two land parcels.

At December 31, 2023, our REO assets were comprised of one multifamily property, three office buildings and two land parcels.

At December 31, 2024 and 2023, we had mortgage notes payable totaling $ 74.9 million and $ 44.3 million, respectively, which are collateralized by our REO assets.

At December 31, 2024 and 2023, our multifamily properties had a weighted average occupancy rate of approximately 77 % and 98 %, respectively.

At December 31, 2024, both our office buildings were vacant, and at December 31, 2023, two office buildings were vacant and the third building was 89 % occupied.

During 2024, we foreclosed on three multifamily bridge loans and took back the underlying collateral as REO assets.

These properties have a total carrying value of $ 97.4 million at December 31, 2024.

During 2024, we sold an office REO asset for $ 14.2 million, repaid the mortgage note outstanding of $ 9.0 million, and recognized a $ 3.8 million gain.

During 2024 and 2023, we recorded depreciation expense related to the REO assets of $ 3.7 million and $ 2.9 million, respectively.

Our REO assets had restricted cash balances due to escrow requirements totaling $ 2.9 million and $ 1.4 million at December 31, 2024 and 2023, respectively.

Subsequent Event.

In January and February 2025, we foreclosed on and took back three multifamily properties collateralizing bridge loans with a total UPB of $ 101.6 million.

ARBOR REALTY TRUST, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

See Note 18 for details of certain investments described above.

Note 10 — Goodwill and Other Intangible Assets

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$ 72,410 $ ( 40,917 ) $ 31,493 $ 72,410 $ ( 37,658 ) $ 34,752

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

The amortization expense recorded for these intangible assets was $ 3.3 million in 2024 and $ 4.7 million in both 2023 and 2022.

At December 31, 2024, the weighted average remaining lives of our amortizable finite-lived intangible assets and the estimated annual amortization expense are as follows ($ in thousands):

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Finite‑lived intangible assets:

Broker relationships 0.5 $ 1,693 $ — $ — $ —

Borrower relationships 1.5 $ 1,440 $ 780 $ —

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215,832 215,459 336,193 6.97 % 386,576 385,779 589,533 7.68 %

$ 500 M repurchase facility

$ 1 B repurchase facility

782,956 781,812 1,055,321 7.20 % 448,411 447,490 597,205 8.38 %

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134,368 134,189 203,135 6.53 % 263,061 262,820 362,465 7.55 %

$ 225 M credit facility

$ 250 M repurchase facility

— — — — — — — —

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74,925 74,896 109,920 6.59 % 107,355 107,324 141,130 7.44 %

$ 200 M repurchase facility

156,329 155,676 214,441 6.98 % 46,403 45,969 68,762 8.04 %

$ 150 M credit facility

108,861 108,696 145,148 7.43 % 120,645 120,610 162,068 8.05 %

$ 134 M loan specific credit facilities

134,131 133,965 181,108 6.59 % 120,660 120,328 161,700 6.91 %

$ 100 M repurchase facility (5)

— — — — 32,599 32,579 41,522 7.03 %

$ 50 M credit facility (6)

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— — — — — — — —

$ 25 M credit facility

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

Repurchase facility - securities (2)(7) 18,549 18,549 — 6.12 % 31,033 31,033 — 7.15 %

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$ 62,196 $ 62,196 $ 62,372 5.48 % $ 73,011 $ 73,011 $ 73,781 6.49 %

$ 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

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137,878 137,762 138,793 5.84 % — — — —

$ 100 M joint repurchase facility (2)

28,656 28,611 38,962 6.34 % 7,945 7,833 11,350 7.77 %

$ 50 M credit facility

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(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, 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.

(4) In December 2024, we terminated this facility.

(5) This facility matured in October 2024 and was not renewed.

(6) In June 2024, we terminated this facility.

(7) At December 31, 2024 and 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 $ 26.6 million and $ 43.1 million, respectively.

(8) These amounts exclude outstanding mortgage notes payable on our REO assets with a debt carrying value of $ 74.9 million and $ 44.3 million as of December 31, 2024 and 2023, respectively.

ARBOR REALTY TRUST, INC.

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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.

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.

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Joint Repurchase Facility.

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.

We have a $ 2.00 billion joint repurchase facility that 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.

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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 facility bears interest at SOFR plus 2.50 %.

We have a $ 1.00 billion repurchase facility to finance SFR loans that has an interest rate ranging from SOFR plus 2.50 % 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 $ 750.0 million repurchase facility of which $ 500.0 million may be used to finance performing loans and $ 250.0 million may be used to finance non-performing loans that matures in December 2026, with the ability to extend the maturity in one-year increments, subject to lender approval.

The $ 500.0 million portion of the facility has an interest rate of SOFR plus 1.75 %, with a SOFR floor of 0.15 % and will increase to SOFR plus 2.25 %, with a 0.15 % SOFR floor in March 2026.

The $ 250.0 million portion of the facility has an interest rate of SOFR plus 3.25 %, with a SOFR floor of 2.50 %.

We have a $ 650.0 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 2025.

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

We have a $ 400.0 million credit facility to finance performing and non-performing loans that bears interest at SOFR plus 3.25 %, with a SOFR floor of 1.00 %.

The facility matures in March 2027.

We have a $ 350.0 million repurchase facility to finance bridge loans that matures in March 2025, with a one-year extension option.

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 $ 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.

We have a $ 250.0 million repurchase facility to finance multifamily construction loans that matures in September 2027, with the ability to extend the maturity in one-year increments, subject to lender approval.

The facility has an interest rate of SOFR plus 3.25 %, with a SOFR floor of 2.00 %.

We have a $ 250.0 million repurchase facility to finance bridge loans that bears interest ranging from SOFR plus 2.00 % to 2.65 % 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 $ 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 bridge and construction loans that 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.

In January 2025, this facility was increased to $ 400.0 million and the maturity was extended from January 2025 to January 2027, with a one-year extension option.

We have a $ 200.0 million repurchase facility to finance SFR loans that matures in March 2027, 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 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.

We have a $ 150.0 million credit facility to finance SFR loans that matures in October 2025.

This facility bears interest at SOFR plus 3.00 %, with an all-in floor of 5.50 %.

ARBOR REALTY TRUST, INC.

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We have several loan specific credit facilities totaling $ 134.1 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 %.

The facilities bear interest ranging from SOFR plus 1.91 % to 2.40 %, with a SOFR floor up to 2.40 %, and Prime plus 0.85 %, with a Prime floor of 6.15 %.

The facilities mature between June 2025 and August 2027.

We have a $ 40.0 million credit facility used to purchase loans that bears interest at 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 SOFR plus 3.00 %.

This line matures in April 2025 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.

This facility bears interest ranging from SOFR plus 1.50 % to 3.50 % and matures in July 2025, with a one-year extension option.

Agency Business.

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We have a $ 750.0 million ASAP agreement with Fannie Mae providing us with a warehousing credit facility for mortgage loans that are to be sold to Fannie Mae and serviced under the Fannie Mae DUS program.

The ASAP agreement is not a committed line, has no expiration date and bears interest at a rate of SOFR plus 1.15 %, with a 0.25 % SOFR floor.

We have a $ 500.0 million repurchase facility that bears interest at a rate of SOFR plus 1.48 % and matures in November 2024.

We have a $ 200.0 million credit facility that bears interest at a rate of SOFR plus 1.40 % and matures in March 2024.

We have a $ 100.0 million credit facility that bears interest at a rate of SOFR plus 1.46 % and matures in July 2024.

This facility includes a $ 37.5 million sublimit for principal and interest advances we make as the primary servicer to Fannie Mae in connection with potential delinquent loans under the Fannie Mae forbearance program, which bears interest at a rate of SOFR plus 1.86 %.

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

The ASAP agreement is not a committed line, has no expiration date and bears interest at SOFR plus 1.15 %, with a 0.25 % SOFR floor.

We have a $ 500.0 million repurchase facility that bears interest at SOFR plus 1.48 % and matures in November 2025.

We have a $ 200.0 million credit facility that bears interest at SOFR plus 1.40 % and matures in March 2025.

We have a $ 200.0 million credit facility that bears interest at SOFR plus 1.35 % and matures in July 2025.

We have the ability to borrow up to an additional $ 200.0 million under this facility at the lenders discretion determined on a loan-by-loan basis.

We have a $ 50.0 million credit facility that bears interest at SOFR plus 1.35 % and matures in September 2025.

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.

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CLO 14 326,238 326,238 6.11 % 452,751 452,526 —

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

Total CLOs (5) 4,581,374 4,572,055 6.35 % 5,806,502 5,803,208 88,000

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

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

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(2) At December 31, 2024 and 2023, the aggregate weighted average note rate for our CLOs, including certain fees and costs, was 6.59 % and 7.37 %, respectively, and the Q Series securitization was 7.46 % and 7.99 %, 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.

(3) At December 31, 2024 and 2023, 46 and 12 loans, respectively, with a total UPB of $ 1.60 billion and $ 308.3 million, respectively, were deemed a "credit risk" as defined by the CLO indentures.

A credit risk asset is generally defined as one that, in the CLO collateral manager's reasonable business judgment, has a significant risk of becoming a defaulted asset.

(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 $ 43.4 million and $ 63.9 million at December 31, 2024 and 2023, respectively.

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

(5) The replenishment period for all CLOs has ended:

CLO 14 - September 2023, CLO 15 – December 2023, CLO 16 – March 2024, CLO 19 – May 2024, CLO 17 – June 2024, and CLO 18 – August 2024.

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

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As of the CLO closing date, the notes were secured by a portfolio of loan obligations with a face value of $ 976.9 million, consisting primarily of bridge loans that were contributed from our existing loan portfolio, and cash.

The financing has an approximate two-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 $ 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,

The financing had an approximate two-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.

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 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

ARBOR REALTY TRUST, INC.

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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 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.

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 $ 1.70 billion, 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.

The financing had an approximate 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.

Initially, the proceeds of the issuance of the securities also included $ 347.3 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 $ 2.05 billion, representing leverage of 81 %.

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As of the CLO closing date, the notes were secured by a portfolio of loan obligations with a face value of $ 1.79 billion, consisting primarily of bridge loans that were contributed from our existing loan portfolio, and cash.

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

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

Initially, the proceeds of the issuance of the securities also included $ 315.0 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 $ 2.10 billion, representing leverage of 82 %.

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As of the CLO closing date, the notes were secured by a portfolio of loan obligations with a face value of $ 1.19 billion, consisting primarily of bridge loans that were contributed from our existing loan portfolio, and cash.

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

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

Initially, the proceeds of the issuance of the securities also included $ 313.0 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 $ 1.50 billion, representing leverage of 83 %.

4 unchanged sentences

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 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.

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

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 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.

3 unchanged sentences

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 June 2024, we unwound CLO 15, redeeming the remaining outstanding notes totaling $ 674.4 million, which were paid primarily from the refinancing of the remaining assets within our other CLO vehicles and credit and repurchase facilities.

CLO 13 and 12.

1 unchanged sentence

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.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Freddie Mac Q Series Securitization.

2 unchanged sentences

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 pay 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 2.00 % plus SOFR, excluding fees and transaction costs, and are payable monthly.

Securitization Paydowns.

During 2024, outstanding notes totaling $ 896.5 million on our CLOs and $ 58.1 million on the Q Series securitization have been paid down.

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

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2027 275,000 273,927 4.50 % 275,000 273,444 4.50 %

5.75 % Notes (4)

2024 — — — 110,000 109,721 4.75 %

2024 — — — 90,000 89,903 5.75 %

5.625 % Notes

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

$ 1,245,000 $ 1,236,147 5.73 % $ 1,345,000 $ 1,333,968 5.41 %

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We have the right to redeem the notes within three months prior to the maturity date at a redemption price equal to 100% of the aggregate principal amount, plus accrued and unpaid interest.

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(4) These notes can be redeemed by us at any time prior to the maturity date, at a redemption price equal to 100 % of the aggregate principal amount, plus a “make-whole” premium and accrued and unpaid interest.

We have the right to redeem the notes on the maturity date at a redemption price equal to 100 % of the aggregate principal amount, plus accrued and unpaid interest.

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

In October 2024, we issued $ 100.0 million aggregate principal amount of 9.00 % senior unsecured notes due October 2027 in a private offering.

We received proceeds of $ 98.4 million from the issuance, after deducting the underwriting discount and other offering expenses.

We used the proceeds to pay down debt 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.

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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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

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

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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 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.

In 2020, we issued $ 275.0 million aggregate principal amount of 4.50 % senior unsecured notes due in March 2027 in a private offering.

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

In 2019, we issued $ 110.0 million aggregate principal amount of 4.75 % senior unsecured notes due in October 2024 in a private offering.

We received proceeds of $ 108.2 million from the issuance, after deducting the underwriting discount and other offering expenses.

In 2019, we issued $ 90.0 million aggregate principal amount of 5.75 % senior unsecured notes due in April 2024 in a private offering.

We received proceeds of $ 88.2 million from the issuance, after deducting the underwriting discount and other offering expenses.

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 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.

The following senior unsecured notes matured during 2023 and 2024:

• in April 2023, we redeemed our 8.00 % notes totaling $ 70.8 million;

• in May 2023, we redeemed the remaining $ 78.8 million of our 5.625 % notes;

• in April 2024, we redeemed our 5.75 % notes totaling $ 90.0 million;

• in October 2024, we redeemed our 4.75 % notes totaling $ 110.0 million.

Convertible Senior Unsecured Notes

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.

We received proceeds of $ 279.3 million, net of discounts and fees.

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.

The initial conversion rate was 59.8480 shares of common stock per $1,000 of principal representing a conversion price of $ 16.71 per share of common stock.

We received proceeds of $ 279.3 million, net of discounts and fees.

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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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.

At December 31, 2024, the 7.50 % Convertible Notes had a conversion rate of 61.0757 shares of common stock per $1,000 of principal, which represented a conversion price of $ 16.37 per share of common stock.

We used $ 203.1 million of the net proceeds from our 7.50 % Convertible Notes to repurchase a portion of our 4.75 % convertible senior notes and expensed $ 3.3 million of deferred financing fees into loss on extinguishment of debt on the consolidated statements of income.

The remaining $ 66.1 million of our 4.75 % convertible notes were redeemed at maturity in 2022.

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.

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During 2023, we incurred interest expense on the 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 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.

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.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

deferred financing fees, respectively.

Including the amortization of the deferred financing fees, our weighted average total cost of the convertible notes was 8.43 % and 8.42 % at December 31, 2024 and 2023, respectively.

Junior Subordinated Notes

The carrying values of borrowings under our junior subordinated notes were $ 144.7 million and $ 143.9 million at December 31, 2024 and 2023, respectively, which is net of a deferred amount of $ 8.3 million and $ 9.0 million, respectively, (which is amortized into interest expense over the life of the notes) and deferred financing fees of $ 1.4 million and $ 1.5 million, respectively.

These notes have maturities ranging from March 2034 through April 2037 and pay interest quarterly at a floating rate based on LIBOR.

These notes have maturities ranging from March 2034 through April 2037 and pay interest quarterly at a floating rate.

The weighted average note rate was 7.18 % and 8.48 % at December 31, 2024 and 2023, respectively.

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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.

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

However, we may not have sufficient liquidity available to do so at such time.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Our CLO compliance tests as of the most recent determination dates in January 2025 are as follows:

Cash Flow Triggers CLO 14 CLO 15 CLO 16 CLO 17 CLO 18 CLO 19

Cash Flow Triggers CLO 14 CLO 16 CLO 17 CLO 18 CLO 19

Overcollateralization (1)

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Limit 118.76 % 120.21 % 121.51 % 123.03 % 119.30 %

Pass / Fail Pass Pass Pass Pass Pass Pass

Pass / Fail Pass Pass Pass Pass Pass

Interest Coverage (2)

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Limit 120.00 % 120.00 % 120.00 % 120.00 % 120.00 %

Pass / Fail Pass Pass Pass Pass Pass Pass

Pass / Fail Pass Pass Pass Pass Pass

________________________________________

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(2) The interest coverage ratio divides interest income by interest expense for the classes senior to those retained by us.

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Our CLO overcollateralization ratios as of the determination dates subsequent to each quarter are as follows:

Determination (1) CLO 14 CLO 15 CLO 16 CLO 17 CLO 18 CLO 19

Determination (1) CLO 14 CLO 16 CLO 17 CLO 18 CLO 19

January 2025 137.46 % 136.19 % 122.10 % 123.89 % 119.56 %

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Ending balance $ 83,150 $ 71,634

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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.

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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.

The current expected loss related to loss-sharing was based on a collective pooling basis with similar risk characteristics, a reasonable and supportable forecast and a reversion period based on our average historical losses through the remaining contractual term of the portfolio.

The general reserve related to loss-sharing was based on a collective pooling basis with similar risk characteristics, a reasonable and supportable forecast and a reversion period based on our average historical losses through the remaining contractual term of the portfolio.

In instances where payment under the loss-sharing obligations of a loan is determined to be probable and estimable (as the loan is probable of, or is, in foreclosure), we record a liability for the estimated loss-sharing specific reserve.

When we settle a loss under the DUS loss-sharing model, the net loss is charged-off against the previously recorded loss-sharing obligation.

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We would be liable for this amount only if all of the loans we service for Fannie Mae, for which we retain some risk of loss, were to default and all of the collateral underlying these loans was determined to be without value at the time of settlement.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Note 13 — Derivative Financial Instruments

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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.

These commitments meet the definition of a derivative and are recorded at fair value, including the effects of interest rate movements which are reflected as a component of gain (loss) on derivative instruments, net in the consolidated statements of income.

These commitments meet the definition of a derivative and are recorded at fair value, including the effects of interest rate movements which are reflected as a component of (loss) gain on derivative instruments, net in the consolidated statements of income.

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 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.

During 2024, 2023 and 2022, we recorded net losses of $ 3.7 million, net gains of of $ 8.8 million and net losses of $ 3.6 million, respectively, from changes in the fair value of these derivatives and $ 51.3 million, $ 69.9 million and $ 69.3 million, respectively, of income from MSRs.

See Note 14 for details.

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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.

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.

These instruments 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.

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

The counterparties have the right to re-pledge the collateral posted, but have the obligation to return 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, 2024 and 2023, we had $ 2.3 million and $ 1.5 million, respectively, included in others assets, which was comprised of cash posted as collateral of $ 2.0 million and $ 1.9 million, respectively, and net liability positions of $ 0.3 million and $ 0.4 million, respectively, from the fair value of our treasury futures.

During 2024, 2023 and 2022, we recorded realized and unrealized gains of $ 0.1 million and $ 0.6 million, realized gains and unrealized losses of $ 1.6 million and $ 3.7 million, and realized and unrealized gains of $ 26.9 million and $ 3.5 million, respectively, to our Agency Business.

ARBOR REALTY TRUST, INC.

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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):

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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 44 $ 396,024 Other assets/other liabilities $ 95 $ ( 4,209 )

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Senior unsecured notes 1,245,000 1,236,147 1,160,154 1,345,000 1,333,968 1,214,331

Convertible senior unsecured notes, net 287,500 283,118 301,156 287,500 280,356 287,834

Convertible senior unsecured notes 287,500 285,853 287,500 287,500 283,118 301,156

Junior subordinated notes 154,336 144,686 109,099 154,336 143,896 106,444

Mortgage notes payable - real estate owned 74,897 74,897 74,495 44,339 44,339 44,103

Derivative financial instruments 354,300 4,209 4,209 138,270 1,021 1,021

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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.

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Level 1 —Inputs are unadjusted and quoted prices exist in active markets for identical assets or liabilities, such as government, agency and equity securities.

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Level 2—Inputs (other than quoted prices included in Level 1) are observable for the asset or liability through correlation with market data.

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Loans and investments, net.

Fair values of loans and investments that are not impaired are estimated using inputs based on direct capitalization rate and discounted cash flow methodologies using discount rates, which, in our opinion, best reflect current market interest rates that would be offered for loans with similar characteristics and credit quality (Level 3).

Fair values of loans and investments that are not impaired are estimated using inputs based on direct capitalization rate and discounted cash flow methodology using discount rates, which, in our opinion, best reflect current market interest rates that would be offered for loans with similar characteristics and credit quality (Level 3).

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).

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Fair values are estimated using inputs based on discounted future net cash flow methodology (Level 3).

MSRs are initially recorded at fair value and are carried at amortized cost.

The fair value of MSRs is estimated using a process that involves the use of independent third party valuation experts, supported by commercially available discounted cash flow models and analysis of current market data.

The key inputs used in estimating fair value include the contractually specified servicing fees, prepayment speed of the underlying loans, discount rate, annual per loan cost to service loans, delinquency rates, late charges and other economic factors.

The key inputs used in estimating fair value include the discount rate and contractually specified servicing fees, and to a lessor extent the prepayment speed of the underlying loans annual per loan cost to service loans, delinquency rates, late charges and other economic factors.

Securities held-to-maturity, net.

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We also consider the impact of counterparty non-performance risk when measuring the fair value of these derivatives.

Credit and repurchase facilities.

Fair values for credit and repurchase facilities of the Structured Business are estimated using discounted cash flow methodology, using discount rates, which, in our opinion, best reflect current market interest rates for financing with similar characteristics and credit quality (Level 3).

Credit facilities, repurchase facilities, and mortgage notes payable.

Fair values for credit and repurchase facilities and mortgage notes payable of the Structured Business are estimated using discounted cash flow methodology, using discount rates, which, in our opinion, best reflect current market interest rates for financing with similar characteristics and credit quality (Level 3).

The majority of our credit and repurchase facilities for the Agency Business bear interest at rates that are similar to those available in the market currently and fair values are estimated using Level 2 inputs.

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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).

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Senior unsecured notes.

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If quotes from active markets are unavailable, then the fair values are estimated utilizing current market quotes received from inactive markets (Level 2).

Convertible senior unsecured notes, net.

Convertible senior unsecured notes.

Fair values are estimated using current market quotes received from inactive markets (Level 2).

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

We measure certain financial assets and financial liabilities at fair value on a recurring basis.

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________________________________________

(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.

(1) We had an allowance for credit losses of $ 143.7 million relating to twenty-seven impaired loans with an aggregate carrying value, before loan loss reserves, of $ 589.0 million at December 31, 2024.

The fair values of these impaired loans are based on the value of the underlying collateral.

(2) We have an impairment of $ 1.4 million related to four loans held-for-sale with an aggregate carrying value, before unrealized impairment losses, of $ 14.6 million.

Loan impairment assessments.

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Impaired loans:

Weighted Average Minimum / Maximum

Multifamily $ 383,513 Discounted cash flows Capitalization rate 6.19 % 5.75 % - 7.25 %

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Revenue growth rate 3.00 % 3.00 %

Discount rate 11.25 %

Retail 11,745 Discounted cash flows Capitalization rate 9.25 %

Revenue growth rate 3.00 %

Derivative financial instruments:

Rate lock commitments 428 Discounted cash flows W/A discount rate 13.38 %

Retail $ 11,775 Sales comparative Price per acre $ 165 $ 165

The derivative financial instruments using Level 3 inputs are outstanding for short periods of time (generally less than 60 days).

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Ending balance $ — $ 428 $ 354

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):

The components of fair value and other relevant information associated with our forward sales commitments and the estimated fair value of cash flows from servicing on loans held-for-sale are as follows (in thousands):

December 31, 2024 Notional/

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Impairment Loss Total Fair Value

Rate lock commitments $ 26,800 $ 428 $ 759 $ — $ 1,187

Forward sale commitments $ 396,024 $ — $ — $ — $ —

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Note 15 — Commitments and Contingencies

Impact of COVID-19.

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.

Agency Business Commitments.

We must make certain representations and warranties concerning each loan we originate for the GSE or HUD programs.

The representations and warranties relate to our practices in the origination and servicing of the loans and the accuracy of the information being provided by us.

In the event of a breach of any representation or warranty, the GSEs or HUD could require us to repurchase a loan, even if the loan is not in default.

Our obligation to repurchase the loan is independent of our risk-sharing obligations.

Our Agency Business is subject to supervision by certain regulatory agencies.

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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 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.

From time to time, we may become involved in legal proceedings arising in the ordinary course of our business.

Except as set forth below under “Securities Class Action,” we are not currently a party to any material legal proceedings, and we are not aware of any pending or threatened legal proceeding against us that we believe could have an adverse effect on our business, operating results or financial condition.

Because the results of legal proceedings is inherently unpredictable and uncertain, we are currently unable to predict whether it will have a material adverse effect on our business, financial condition or results of operations.

Securities Class Action

On July 31, 2024, a purported shareholder filed a securities class action lawsuit against us and certain of our executive officers in the United States District Court for the Eastern District of New York (the “Court”), alleging violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder.

The plaintiffs seek to represent a class of shareholders who purchased our shares of common stock between May 7, 2021 and July 11, 2024.

On November 5, 2024, the Court approved the motion appointing the lead plaintiffs and their counsel.

An amended complaint was filed by the lead plaintiffs on January 21, 2025.

The amended complaint alleges that we have made false and misleading statements and/or failed to disclose material information in connection with allegedly overriding internal controls, engaging in substandard lending practices and not complying with agency requirements.

The plaintiffs are seeking damages in an unspecified amount, as well as attorneys’ fees and costs.

We believe that the allegations in the lawsuit are without merit, and we intend to vigorously defend against the claims.

At this time, we are unable to determine whether an unfavorable outcome is probable or to estimate reasonably possible losses.

Extended Stay Litigation

This litigation was settled and discontinued in 2023.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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.

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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 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.

In June 2013, the Trust amended the lawsuits, to, among other things, (1) consolidate the lawsuits into one lawsuit, (2) dismiss certain defendants from the lawsuits, none of whom were related to us, and (3) reduce the counts within the lawsuits.

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.

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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.

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For more detailed information regarding the Action, please refer to Note 15 of our 2022 Annual Report.

Due to Borrowers.

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We are not obligated to provide, have not provided, and do not intend to provide financial support to any of the Securitization Entities.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Unconsolidated VIEs .

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________________________________________

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(1) Represents the carrying amount of loans and investments before reserves.

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Preferred Stock.

In the first quarter of 2022, we completed a public offering of an additional 3,292,000 shares of 6.25 % Series F fixed-to-floating rate cumulative redeemable preferred stock, generating net proceeds of $ 77.1 million after deducting the underwriting discount and other offering expenses.

The additional shares issued have the same terms as the original issuance.

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.

Holders of the Series F preferred stock are entitled to receive cumulative dividends at a fixed rate equal to 6.25 % from the date of issuance through October 29, 2026 and at a floating rate equal to a benchmark rate (which is expected to be the three-month term SOFR) plus a spread of 5.442 % per annum beginning October 30, 2026;

provided that in no event should the rate be lower than 6.125 %.

Common Stock.

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.

In May 2024, we entered into a new equity distribution agreement with JMP Securities LLC ("JMP").

In accordance with the terms of the agreement, we may offer and sell up to 30,000,000 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 2024, we sold 661,708 shares of our common stock at an average price of $ 15.16 per share for net proceeds of $ 10.0 million.

At December 31, 2024, we had 29,338,292 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.

During 2023, the Board of Directors authorized a share repurchase program providing for the repurchase of up to $ 150.0 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 Exchange Act, based on our stock price, general market conditions, applicable legal requirements and other factors.

The program may be discontinued or modified at any time.

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.

During April 2024, we repurchased 935,739 shares of our common stock under the share repurchase program at a total cost of $ 11.4 million and an average cost of $ 12.19 per share.

At December 31, 2024, there was $ 138.6 million available for repurchase under this program.

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The OP Units are entitled to receive distributions if and when our Board of Directors authorizes and declares common stock distributions.

The OP Units are also redeemable for cash, or at our option, for shares of our common stock on a one -for-one basis.

The OP Units are also redeemable

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for cash, or at our option, for shares of our common stock on a one -for-one basis.

At December 31, 2024, there were 16,293,589 OP Units outstanding, which represented 7.9 % of the voting power of our outstanding stock.

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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

February 14, 2024 $ 0.43 March 29, 2024 $ 0.3984375 $ 0.390625 $ 0.390625

May 1, 2024 $ 0.43 June 28, 2024 $ 0.3984375 $ 0.390625 $ 0.390625

July 31, 2024 $ 0.43 September 27, 2024 $ 0.3984375 $ 0.390625 $ 0.390625

October 30, 2024 $ 0.43 December 30, 2024 $ 0.3984375 $ 0.390625 $ 0.390625

Common Stock – On February 19, 2025, the Board of Directors declared a cash dividend of $ 0.43 per share of common stock.

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As a result, no portion of the 2024 dividends should be treated as excess inclusion income for federal income tax purposes.

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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:

(1) 299,710 shares with a grant date fair value of $ 3.6 million were fully vested on the grant date;

During 2024, we issued 828,073 shares of restricted common stock to certain employees and members of our Board of Directors under the Amended Omnibus Stock Incentive Plan with a total grant date fair value of $ 10.9 million, of which:

(1) 268,869 shares with a grant date fair value of $ 3.5 million vested in 2024;

(2) 244,794 shares with a grant date fair value of $ 3.2 million will vest in 2025;

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and (5) 34,750 shares with a grant date fair value of $ 0.5 million will vest in 2028.

We issued 40,796 fully vested restricted stock units (“RSUs”) with a grant date fair value of $ 0.5 million to certain members of our Board of Directors and 247,275 RSUs with a grant date fair value of $ 2.9 million that vest in full in the first quarter of 2026 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.

During 2024, we issued our chief executive officer 309,775 shares of restricted common stock with a grant date fair value of $ 3.9 million that vest in full in the first quarter of 2027.

We also issued 36,688 fully vested restricted stock units (“RSUs”) with a grant date fair value of $ 0.5 million to certain members of our Board of Directors, who have decided to defer the receipt of the common stock, into which the RSUs are converted, to a future date pursuant to a pre-established deferral election.

During 2024, we withheld 273,163 shares from the net settlement of restricted common stock by employees for payment of withholding taxes on shares that vested.

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and (5) 34,722 shares with a grant date fair value of $ 0.4 million will vest in 2027.

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.

We issued 40,796 RSUs with a grant date fair value of $ 0.5 million to certain members of our Board of Directors and 247,275 RSUs with a grant date fair value of $ 2.9 million that vest in full in the first quarter of 2026 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) 144,951 shares with a grant date fair value of $ 2.4 million vested on the grant date;

During 2022, we issued 652,596 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 $ 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;

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and (5) 9,938 shares with a grant date fair value of $ 0.2 million will vest in 2026.

In April 2021, we granted our chief executive officer 184,729 shares of restricted common stock with a grant date fair value of $ 3.1 million that vest in full in April 2024.

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 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.

The 352,427 units, 381,503 units and 448,980 units vested in full and were net settled for 172,513 shares, 186,772 shares and 229,083 shares, respectively, of common stock in 2023, 2022 and 2021.

We issued 25,012 fully vested RSUs with a grant date fair

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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 2024, 2023 and 2022, previously granted performance-based restricted stock units of 275,569 units, 352,427 units and 381,503 units, respectively, to our chief executive officer fully vested based on achieving the performance objectives for the four-year periods ended December 31, 2023, 2022 and 2021, respectively.

The 275,569 units vested in full and were not net settled.

The 352,427 units and 381,503 units vested in full and were net settled for 172,513 shares and 186,772 shares, respectively, of common stock in 2023 and 2022.

respectively.

In addition, 313,152 shares, 246,508 shares and 294,985 shares of performance-based restricted stock granted in 2020, 2019 and 2018, respectively, vested in 2023, 2022 and 2021, respectively, which were net settled for 153,287 shares, 120,665 shares and 150,530 shares, respectively, of common stock.

In addition, 313,152 shares and 246,508 shares of performance-based restricted stock granted to our chief executive officer in 2020 and 2019, respectively, vested in 2023 and 2022, respectively, which were net settled for 153,287 shares and 120,665 shares, respectively, of common stock.

Further, 165,746 shares and 184,729 shares of restricted common stock granted to our chief executive officer in 2021 vested in 2024, of which the 165,746 shares were net settled for 81,132 shares of common stock and the 184,729 shares were not net settled.

During 2024, 2023 and 2022, we recorded total stock-based compensation expense of $ 13.4 million, $ 14.2 million and $ 14.2 million, respectively, to employee compensation and benefits and $ 0.8 million, $ 0.7 million and $ 0.8 million, respectively, to selling and administrative expense.

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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

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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.

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.

Our common stock equivalents include the weighted average dilutive effect of RSUs, OP Units and convertible senior unsecured notes.

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):

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Dilutive effect of convertible notes (3) — — — 17,294,392 — 16,900,204

Dilutive effect of restricted stock units (4) — 613,990 — 552,621 — 933,233

Dilutive effect of RSUs (4) — 531,872 — 613,990 — 552,621

Weighted average shares outstanding 188,701,149 205,526,610 184,641,642 218,843,613 165,355,167 199,112,630

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(1) Net of preferred stock dividends.

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(2) We consider OP Units to be common stock equivalents as the holders have voting rights, the right to distributions and the right to redeem the OP Units for the cash value of a corresponding number of shares of common stock or a corresponding number of shares of common stock, at our election.

(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, 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.

(3) The year ended December 31, 2024 excludes interest expense of $ 24.3 million, and potentially dilutive shares of 17,487,435 , attributable to convertible debt since their effect would have been anti-dilutive.

(4) Our chief executive officer was granted RSUs, which vest at the end of a four-year performance period based upon our achievement of total stockholder return objectives.

Note 18 — 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 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.

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 taxable income and meets certain other requirements.

Certain REIT income may be subject to state and local income taxes.

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federal, state and local income taxes.

The TRS Consolidated Group had no federal net operating losses remaining from prior years.

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, 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.

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A summary of our pre-tax GAAP income is as follows (in thousands):

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Total income tax expense $ 13,478 $ 27,347 $ 17,484

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A reconciliation of our effective income tax rate as a percentage of pre-tax income to the U.S.

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Effective income tax rate 4.6 % 6.4 % 4.7 %

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The significant components of our deferred tax assets and liabilities of our TRS Consolidated Group are as follows (in thousands):

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Loan loss reserves 7,084 7,088

Net operating and capital loss carryforwards 188 454

Valuation allowance — ( 294 )

Net operating loss carryforwards 234 188

Other 396 346

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At both December 31, 2024 and 2023, 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, 2024 and 2023, the TRS Consolidated Group had state net operating loss carryforwards of $ 0.2 million, which will begin to expire in 2036.

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During 2024, 2023 and 2022, we incurred $ 3.3 million, $ 3.2 million and $ 3.3 million, respectively, of costs for services provided and employees seconded to the Service Recipients, all of which are reimbursable to us and included in due from related party on the consolidated balance sheets.

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Other Related Party Transactions.

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Due to related party was $ 4.5 million and $ 13.8 million at December 31, 2024 and 2023, respectively, and consisted of loan payoffs, holdbacks and escrows to be remitted to our affiliated servicing operations related to real estate transactions.

Investments in equity affiliates, which represent related parties under GAAP, and their related disclosures, are included in Note 8.

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

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executives’ charter.

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 2024, 2023 and 2022, we reimbursed the aircraft owner $ 0.5 million, $ 0.8 million and $ 1.1 million, respectively, for the flights chartered by our executives pursuant the agreement.

In July 2024, we committed to fund a $ 62.4 million bridge loan ( none of which was funded at December 31, 2024) 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 3.34 % equity interest in the borrowing entity.

The loan has an interest rate of SOFR plus 4.25 % with a SOFR floor of 3.50 % and matures in July 2027.

Interest income recorded from this loan was $ 0.1 million for 2024.

In May 2024, we committed to fund a $ 42.5 million bridge loan ($ 4.5 million was funded at December 31, 2024) 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 2.28 % equity interest in the borrowing entity.

The loan has an interest rate of SOFR plus 4.25 % with a SOFR floor of 3.50 % and matures in May 2027.

Interest income recorded from this loan was $ 0.2 million for 2024.

In May 2023, we committed to fund a $ 56.9 million bridge loan ($ 50.1 million was funded at December 31, 2024) for an SFR build-to-rent construction project.

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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.

Interest income recorded from this loan was $ 3.2 million and $ 0.4 million for 2024 and 2023, respectively.

In 2022, we purchased a $ 46.2 million bridge loan originated by ACM at par ($ 7.4 million was funded at December 31, 2024) 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 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.

Interest income recorded from this loan was $ 0.7 million and $ 0.2 million for 2024 and 2023, respectively.

In 2022, we committed to fund a $ 67.1 million bridge loan ($ 37.0 million was funded at December 31, 2024) 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 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.

Interest income recorded from this loan was $ 1.6 million, $ 0.2 million and $ 0.1 million for 2024, 2023 and 2022, respectively.

In 2022, we committed to fund a $ 39.4 million bridge loan ($ 32.3 million was funded at December 31, 2024) 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 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.

The loan has an interest rate of SOFR plus 4.00 % with a SOFR floor of 0.25 % and matures in March 2025.

Interest income recorded from this loan was $ 1.9 million, $ 0.4 million and $ 0.1 million for 2024, 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.

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An entity owned by an immediate family member of our chief executive officer also made an investment in the LLC for a 10 % ownership, is the managing member and holds the right to purchase our interest in the LLC.

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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 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.

The loan had an interest rate of SOFR plus 3.75 % with a SOFR floor of 0.25 % and was scheduled to mature in March 2024.

In December 2023, the loan was paid off in full.

Interest income recorded from this loan was $ 5.6 million and $ 3.7 million for 2023 and 2022, 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 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.

The bridge loan has an interest rate of SOFR plus 3.75 % with a SOFR floor of 0.75 % 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.

In November 2023, the bridge loan was upsized to a maximum of $ 39.9 million ($ 39.5 million was funded at December 31, 2024) and the maturity on the bridge loan and preferred equity investment were both extended to May 2025.

Interest income recorded from these loans was $ 4.2 million, $ 2.8 million and $ 1.3 million for 2024, 2023 and 2022, respectively.

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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 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.

The bridge loan had an interest rate of SOFR plus 4.25 % with a SOFR floor of 1.00 % and was scheduled to mature in May 2023 and 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 ($ 33.8 million was funded at December 31, 2024), and the maturity on both loans was extended to May 2025 .

Interest income recorded from these loans was $ 4.4 million, $ 3.6 million and $ 1.6 million for 2024, 2023 and 2022, 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

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officer) which owns a 50 % interest in the borrowing entity.

In 2020, we sold the Private Label loan to an unconsolidated affiliate of ours.

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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 for 2021.

In the fourth quarter of 2023, we converted these loans in the building to a common equity investment.

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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 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.

We invested $ 30.0 million for an 18 % interest in AMAC III.

During 2024, 2023 and 2022, we recorded losses of $ 2.3 million, $ 1.9 million and $ 2.4 million, respectively.

During 2024 and 2023, we made contributions of $ 4.1 million and $ 0.7 million, respectively, and received cash distributions of $ 1.1 million in 2023 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 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.

Also in 2020, the $ 34.0 million bridge loan was refinanced with a $ 35.4 million bridge loan, which bears interest at SOFR plus 3.50 %, and was scheduled to mature in August 2024, which was extended to February 2025.

Interest income recorded from the bridge loan was $ 3.1 million, $ 3.1 million and $ 1.9 million for 2024, 2023 and 2022, respectively.

In February 2025, we modified this loan to extend the maturity three years in exchange for an immediate paydown of $ 0.3 million and an additional paydown of $ 1.7 million to be made on or prior to March 31, 2025.

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.

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 January 2024, the maturity was extended to January 2025, and we are currently in negotiations with this borrower to further extend the maturity.

Interest income recorded from this loan was $ 0.2 million for all period presented.

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 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.

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 4.00 % 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.

The loan has an interest rate of SOFR plus 4.75 % with a SOFR floor of 0.25 %, and was scheduled to mature in November 2024, which was extended to February 2025.

In the fourth quarter of 2024, we recorded a $ 5.5 million specific reserve on this loan.

Interest income recorded from this bridge loan was $ 2.2 million, $ 2.2 million and $ 1.4 million for 2024, 2023 and 2022, respectively.

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2025, we modified this loan to extend the maturity two years in exchange for $ 3.0 million of additional collateral and a $ 2.5 million paydown to be made in February 2026.

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.

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Ginkgo subsequently sold the majority of its interest in this property and owned a 3.6 % interest at December 31, 2024.

We carry a maximum loss-sharing obligation with Fannie Mae on this loan of up to 20 % of the original UPB.

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 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.

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.

At December 31, 2024, we had an indirect interest of 12.3 % in this entity.

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.

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

We recorded a loss from equity affiliates related to this investment of $ 1.2 million, income of $ 0.6 million and income of $ 4.9 million for 2024, 2023 and 2022, respectively.

During 2024 and 2023, we also received cash distributions totaling $ 7.7 million and $ 15.0 million, respectively, from this investment, which were classified as returns of capital.

15 unchanged sentences

Furthermore, one of our directors serves as the trustee and co-trustee of two of the Kaufman Entities that hold membership interests in ACM.

At December 31, 2023, ACM holds 2,535,870 shares of our common stock and 10,615,085 OP Units, which represents approximately 6.4 % of the voting power of our outstanding stock.

At December 31, 2024, ACM holds 2,535,870 shares of our common stock and 10,597,566 OP Units, which represents 6.4 % of the voting power of our outstanding stock.

Our Board of Directors approved a resolution under our charter allowing our chief executive officer and ACM, (which our chief executive officer has a controlling equity interest in), to own more than the 5 % ownership interest limit of our common stock as stated in our amended charter.

6 unchanged sentences

We have a non-qualified deferred compensation plan (the “Deferred Comp Plan”) which is offered to certain full-time employees and is subject to the rules of section 409A of the Internal Revenue Code.

The Deferred Comp Plan can be modified or discontinued at any time.

The Deferred Comp Plan can be

ARBOR REALTY TRUST, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

modified or discontinued at any time.

All eligible participating employees may defer a portion of their compensation and, depending on the participant eligibility requirements met, we are contractually obligated to:

5 unchanged sentences

Note 21 — Segment Information

As described in Note 1, we operate through two business segments – our Structured Business and our Agency Business.

The summarized statements of income and balance sheet data, as well as certain other data, by segment are included in the following tables ($ in thousands).

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

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).

Such costs include, but are not limited to, compensation and employee related costs, selling and administrative expenses and stock-based compensation.

Intersegment revenue and expenses have been eliminated in the computation of total revenue and operating income.

Our chief operating decision maker (“CODM”) is Ivan Kaufman, our Chief Executive Officer.

The CODM uses both net interest income and net income for each segment predominantly in the annual budget and forecasting process.

The CODM considers both budget and actual results on a quarterly basis for both profit measures when making decisions about the allocation of operating and capital resources to each segment.

The CODM also uses segment net interest income and net income to assess the performance of each segment by comparing the results of each segment with one another and in determining the compensation of certain employees.

ARBOR REALTY TRUST, INC.

1 unchanged sentence

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, 2024

10 unchanged sentences

Property operating income 7,226 — — 7,226

Gain on derivative instruments, net — 6,763 — 6,763

Loss on derivative instruments, net — ( 8,543 ) — ( 8,543 )

Other income, net 7,255 828 — 8,083

2 unchanged sentences

Employee compensation and benefits 67,187 87,728 — 154,915

Commissions — 26,779 — 26,779

Selling and administrative 26,922 28,009 — 54,931

1 unchanged sentence

Depreciation and amortization 6,296 3,259 — 9,555

Provision for loss sharing (net of recoveries) — 15,695 — 15,695

Provision for credit losses (net of recoveries) 70,344 3,102 — 73,446

Provision for loss sharing — 11,782 — 11,782

Provision for loan losses (net of recoveries) 63,953 4,590 — 68,543

Total other expenses 171,752 162,147 — 333,899

Income before extinguishment of debt, income from equity affiliates and income taxes 251,373 153,810 — 405,183

Income before extinguishment of debt, gain on real estate, income from equity affiliates and income taxes 173,824 114,400 — 288,224

Loss on extinguishment of debt ( 412 ) — — ( 412 )

Gain on real estate 3,813 — — 3,813

Income from equity affiliates 5,772 — — 5,772

20 unchanged sentences

Gain on derivative instruments, net — 6,763 — 6,763

Other income (loss), net ( 2,360 ) ( 15,203 ) — ( 17,563 )

Other income, net 4,868 2,799 — 7,667

Total other revenue 10,576 282,445 — 293,021

1 unchanged sentence

Employee compensation and benefits 53,507 87,760 — 141,267

Commissions — 18,521 — 18,521

Selling and administrative 23,234 28,026 — 51,260

3 unchanged sentences

Provision for credit losses (net of recoveries) 70,344 3,102 — 73,446

Litigation settlement 7,350 — — 7,350

Total other expenses 158,034 157,795 — 315,829

2 unchanged sentences

Income from equity affiliates 24,281 — — 24,281

Provision for income taxes ( 821 ) ( 16,663 ) — ( 17,484 )

Benefit from (provision for) income taxes 803 ( 28,150 ) — ( 27,347 )

Net income 274,896 125,660 — 400,556

17 unchanged sentences

Property operating income 1,877 — — 1,877

Loss on derivative instruments, net — ( 2,684 ) — ( 2,684 )

Other income, net 7,491 75 — 7,566

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

1 unchanged sentence

Employee compensation and benefits 56,032 81,903 — 137,935

Commissions — 23,890 — 23,890

Selling and administrative 26,059 27,931 — 53,990

3 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, gain on real estate, income from equity affiliates and income taxes 185,972 203,234 — 389,206

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 )

Gain on real estate 2,466 1,227 — 3,693

Income from equity affiliates 14,247 — — 14,247

18 unchanged sentences

Investments in equity affiliates 76,312 — 76,312

Real estate owned, net 176,543 — 176,543

Goodwill and other intangible assets 12,500 75,619 88,119

13 unchanged sentences

Investments in equity affiliates 79,303 — 79,303

Real estate owned, net 86,991 — 86,991

Goodwill and other intangible assets 12,500 78,878 91,378

14 unchanged sentences

SFR 869,141 524,060 613,819

Land 10,350 — —

1,324,126 939,390 6,082,041

Mezzanine / Preferred Equity 97,305 43,953 69,606

Construction - Multifamily 4,368 — —

Total New Loan Originations $ 1,425,799 $ 983,343 $ 6,151,647

Number of Loans Originated 170 150 318

SFR Commitments $ 1,150,687 $ 1,086,833 $ 760,448

SFR $ 1,438,841 $ 1,150,687 $ 1,086,833

Construction - Multifamily 101,000 — —

Total Commitments $ 1,539,841 $ 1,150,687 $ 1,086,833

Loan runoff $ 2,691,583 $ 3,354,055 $ 3,818,554

6 unchanged sentences

SFR - Fixed Rate 27,314 19,328 89,683

Total $ 5,106,820 $ 4,768,186 $ 6,409,558

Total New Loan Originations $ 4,470,773 $ 5,106,820 $ 4,768,186

Total Loan Commitment Volume $ 4,443,972 $ 5,207,148 $ 5,146,718

5 unchanged sentences

SFR - Fixed Rate 27,314 22,931 86,071

Total $ 4,889,199 $ 5,438,623 $ 6,415,169

Total Loan Sales $ 4,609,686 $ 4,889,199 $ 5,438,623

Sales Margin (fee-based services as a % of loan sales) (1) 1.63 % 1.48 % 1.34 %

1 unchanged sentence

________________________________________

(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.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(1) 2022 includes $ 17.1 million of gains recognized on treasury futures related to Private Label loans sold, which is included in (loss) gain on derivative instruments, net in the consolidated statements of income.

December 31, 2024

39 unchanged sentences

SOFR Floor 0.15 %

Fixed 13.00 %

Office NY IO 2025 SOFR+ 3.50 %

3 unchanged sentences

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 — 10,893,106 10,652,225 —

8 unchanged sentences

SOFR Floor 1.00 %

Fixed 12.00 %

Total Mezzanine Loans 1,335,133 255,556 234,749 —

9 unchanged sentences

Other loans less than 3% of carrying amount of total loans (6):

Single‑Family Rental Various IO / PI 2024 - 2025 SOFR + 3.98 % to 4.90 %

Single‑Family Rental Various IO / PI 2025 SOFR + 4.90 %

— 3,082 3,078 —

SOFR Floor 0.25 %

Construction - Multifamily Various IO 2026 - 2027 SOFR+ 5.50 %

— 4,367 3,531 —

SOFR Floor 4.00 %

Total Other Loans — 7,449 6,609 —

Total Loans $ 2,291,951 $ 11,304,956 $ 11,033,997 $ —

24 unchanged sentences

Unearned revenue and costs ( 19,001 ) ( 13,772 ) ( 51,808 )

Reclassification to real estate owned ( 39,400 ) ( 31,200 ) ( 880 )

Reclassification to real estate owned, net ( 100,025 ) ( 39,400 ) ( 31,200 )

Provision for loan losses ( 68,472 ) ( 73,580 ) ( 20,818 )

7 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