Arbor Realty Trust Reports Decline in Revenue and Profitability for Q2 2025

Arbor Realty Trust, Inc. reported its financial results for the second quarter of 2025, revealing a decline in both revenue and profitability compared to the same period in the previous year. The company recorded interest income of $240.3 million, down 19% from $297.2 million in Q2 2024. Interest expense also decreased by 18% to $171.6 million, resulting in net interest income of $68.7 million, a 22% decline from $88.0 million a year earlier. The overall net income attributable to common stockholders was $23.9 million, a significant drop of 49% from $47.4 million in the prior year.

The company's total assets increased slightly to $13.56 billion as of June 30, 2025, compared to $13.49 billion at the end of 2024. This growth was primarily driven by an increase in the structured loan and investment portfolio, which rose to $11.61 billion, up from $11.30 billion. However, the company faced challenges with loan modifications and foreclosures, with eight loans modified totaling $251.9 million and six loans foreclosed with a total unpaid balance of $188.2 million. The real estate owned (REO) assets increased to $365.2 million, reflecting the impact of these foreclosures.

In terms of strategic developments, Arbor Realty Trust successfully closed its first build-to-rent collateralized securitization vehicle, totaling $801.9 million, which included $682.6 million in investment-grade notes. The company also reported a servicing portfolio of $33.76 billion, which saw a modest increase of $277.7 million. However, the agency originations decreased to $857.1 million, indicating a challenging environment for loan origination, particularly in the GSE/Agency business.

The filing also highlighted the company's proactive measures in response to the current high-interest rate environment, which has led to increased delinquencies and defaults. Arbor Realty Trust emphasized its commitment to rigorous risk management and underwriting practices to maintain the quality of its loan portfolio. The company anticipates that the ongoing economic conditions may continue to impact its financial performance, particularly in terms of loan originations and the ability to resolve delinquent loans.

Looking ahead, Arbor Realty Trust remains cautious about the market conditions, particularly with the potential for further interest rate fluctuations and their impact on the real estate sector. The company is focused on leveraging its existing capital resources and maintaining compliance with regulatory requirements to ensure financial stability and operational flexibility in the face of these challenges.