Company: ABR-PF
Filing Date: 2025-08-01
Form Type: 10-Q
Source: 0001253986-25-000014
Chunk: 260

Company: ARBOR REALTY TRUST INC
Filing Date: 2025-08-01
Form: 10-Q
Item: Part I, Item 8
Chunk 260
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 securitizations and senior unsecured notes, and a decrease in the average cost of interest-bearing liabilities, mainly from a decrease in SOFR.

Agency Business Revenue

The decrease in gain on sales, including fee-based services, net was primarily due to a 31% decrease in loan sales volume ($682.8 million), partially offset by a 12% increase in the sales margin from 1.54% to 1.72%. The increase in the sales margin was mainly due to the portfolio mix in 2025 that produced higher margins.  

The decrease in income from MSRs was primarily due to a 26% decrease in loan commitment volume ($535.8 million), partially offset by a 4% increase in the MSR rate from 1.22% to 1.27%. 

The decrease in servicing revenue, net was primarily due to a decrease in earnings on escrow balances from lower average balances and a decrease in the applicable interest rate.

Other Income (Loss)

The increases in property operating income and expenses were due to the addition of several new REO assets. This is also the reason for the increase in depreciation and amortization.

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The gains and losses on derivative instruments in 2025 and 2024 were related to changes in the fair values of our forward sale commitments and swaps held by our Agency Business as a result of changes in market interest rates as well as from the timing of GSE Agency loan sales.

The increase in other income, net was primarily due to increases in the fair values of our Private Label loans and loan fees from our Agency Business. 

Other Expenses

The decrease in employee compensation and benefits expense was primarily due to decreases in commissions and incentive compensation from lower GSE/Agency loan sales volume and bonus allocation targets.

The increase in selling and administrative expenses was primarily due to increases in legal and professional fees.

The increase in the provision for loss sharing (net of recoveries) reflects an increase in general reserves as a result of portfolio growth.

The decrease in the provision for credit losses (net of recoveries) primarily reflects a decrease is specifically impaired loans.

Loss on Extinguishment of Debt

The loss on extinguishment of debt in both 2025 and 2024 reflects deferred financing fees recognized in connection with the unwind of CLOs.

(Loss) Gain on Real Estate

The loss on real estate in 2025 is comprised of $4.3 million in loss on below market debt related to financing on the sale of several existing REO assets and a