Arbor Realty Trust Reports $30.2 Million Net Loss in Q2 2026

Arbor Realty Trust, Inc. reported a net loss of $30.2 million for the second quarter of 2026, a significant decline compared to a net income of $36.3 million in the same period last year. The company's total revenue for the quarter was $293.6 million, down from $302.0 million in the prior year, primarily driven by a decrease in net interest income, which fell to $53.1 million from $68.7 million. Interest income decreased by 4% to $230.9 million, while interest expense rose by 4% to $177.8 million, reflecting the impact of rising interest rates on the company's borrowing costs.

In terms of operational metrics, Arbor's structured loan and investment portfolio remained stable at approximately $12.11 billion, with loan originations of $689 million outpacing loan runoff of $539 million. The company modified seven loans with a total unpaid balance of $386.9 million during the quarter. Additionally, Arbor foreclosed on five loans with a net carrying value of $110.1 million, resulting in a loss of $2.5 million recorded through the provision for credit losses. The company also reported an increase in real estate owned (REO) assets, which rose to $545.9 million, primarily due to the foreclosure activity.

Arbor's Agency Business segment saw a servicing portfolio increase to $36.7 billion, with loan originations totaling $1.08 billion during the quarter. The company reported a gain on sales of $15.2 million, up 11% from the previous year, and servicing revenue of $23.9 million, although this was a decline from $27.4 million in the prior year. The company’s mortgage servicing rights (MSRs) also increased, contributing to the overall revenue.

Looking ahead, Arbor Realty Trust remains cautious about the current economic environment, particularly the elevated interest rates and their potential impact on borrower performance and real estate values. The company noted that while the elevated rate environment could benefit net interest income due to its floating-rate loan portfolio, it also poses risks of increased delinquencies and defaults. Arbor plans to continue applying disciplined underwriting and risk management practices to mitigate potential losses and maintain portfolio quality. The company also announced a share repurchase program, having repurchased approximately 3.55 million shares at an average price of $5.85 per share during the quarter, with $85.2 million remaining under the program.