Arbor(ABR) - 2025 Q1 - Quarterly Report

Loan Originations and Portfolio Performance - Loan originations totaled $605.9 million, while the fee-based servicing portfolio increased slightly to$33.48 billion[290]. - The structured loan and investment portfolio balance increased to $11.49 billion from$11.30 billion, driven by loan originations exceeding loan runoff by $325.2 million[301]. - The company originated loans totaling$747.1 million in Q1 2025, with a weighted average interest rate of 8.64%[303]. - The company experienced a decrease in loan originations and an increase in loan delinquencies due to the prolonged high interest rate environment[296]. - Delinquent loans totaled $582.5 million as of March 31, 2025, compared to$524.5 million at December 31, 2024[309]. Financial Performance - Net income attributable to common stockholders for Q1 2025 was $30.4 million, down$27.4 million (47%) from $57.9 million in Q1 2024[312]. - Interest income for Q1 2025 was$240.7 million, a decrease of $80.6 million (25$57.3 million, a decrease of 40.7% from $96.7 million in Q1 2024[359]. - The decrease in gain on sales, including fee-based services, was primarily due to a 33$354.5 million[318]. - The decrease in income from mortgage servicing rights (MSRs) was primarily due to a 31% decrease in loan commitment volume, totaling $288.8 million[319]. Interest Rates and Economic Conditions - The Federal Reserve lowered the federal funds rate three times in 2024, totaling a reduction of 100 basis points, which may continue to impact net interest income[291]. - The current high interest rate environment may lead to decreased origination volumes and increased delinquencies, potentially affecting future financial performance[350]. - The weighted average current interest pay rate for the portfolio was 6.94$949.8 million, with 19 borrowers investing additional capital for temporary rate relief[294]. - Credit and repurchase facilities increased by $1.22 billion, primarily due to refinancing loans from the unwind of two CLOs with a new$1.15 billion repurchase facility[304]. - Securitized debt decreased by $1.34 billion, mainly due to the unwind of CLO 14 and CLO 19 totaling$1.08 billion and paydowns on remaining securitizations of $260.1 million[304]. - Total structured debt outstanding was$9.49 billion as of March 31, 2025, with 52% or $4.98 billion not containing mark-to-market provisions[334]. Cash Flow and Liquidity - Cash flows provided by operating activities totaled$150.5 million for the three months ended March 31, 2025, driven by net cash inflows from loan sales[337]. - Cash flows used in investing activities amounted to $314.8 million, primarily due to loan originations of$733.1 million[338]. - Cash flows used in financing activities totaled $146.5 million, including$1.34 billion in payoffs on securitizations[339]. - The company had approximately $315 million in cash and liquidity as of April 29, 2025, alongside a$33.48 billion agency servicing portfolio generating $126 million annually[335]. Regulatory and Market Environment - The FHFA set 2025 Caps for Fannie Mae and Freddie Mac at$73 billion each, totaling $146 billion, an increase from 2024 Caps[300]. - The ongoing adverse economic conditions have created liquidity constraints, impacting the ability to execute investments on attractive terms[330]. - The company is subject to REIT distribution requirements, mandating at least 90% of REIT-taxable income to be distributed annually, impacting its ability to retain earnings[336].