ARBOR REALTY TRUST INC

Note 1 —Description of Business

Arbor Realty Trust, Inc. (“we,” “us,” “our,” or the "Company") is a Maryland corporation formed in 2003. We are a nationwide real estate investment trust (“REIT”) and direct lender, providing loan origination and servicing for commercial real estate assets. We operate throughtwo business segments: our Structured Loan Origination and Investment Business, or “Structured Business,” and our Agency Loan Origination and Servicing Business, or “Agency Business.”

Through our Structured Business, we invest in a diversified portfolio of structured finance assets in the multifamily, single-family rental (“SFR”) and commercial real estate markets, primarily consisting of bridge loans, in addition to mezzanine loans, junior participating interests in first mortgages and preferred 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.

Through our Agency Business, we originate, sell and service a range of multifamily finance products through the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac,” and together with Fannie Mae, the government-sponsored enterprises, or “GSEs”), the Government National Mortgage Association (“Ginnie Mae”), Federal Housing Authority (“FHA”) and the U.S. Department of Housing and Urban Development (together with Ginnie Mae and FHA, “HUD”). 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 Delegated Underwriting and Servicing (“DUS”) lender nationally, a Freddie Mac Optigo®Conventional Loan and Small Balance Loan (“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 that are generally 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 conduit/commercial mortgage-backed securities ("CMBS") programs. We either sell the Private Label loans instantaneously or pool and securitize them and sell certificates in the securitizations to third party investors, while retaining the highest risk bottom tranche certificate of the securitization.

Substantially all of our operations are conducted through our operating partnership, Arbor Realty Limited Partnership (“ARLP”), for which we serve as the indirect general partner, and ARLP’s subsidiaries. We are organized to qualify as a REIT for U.S. federal income tax purposes. 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 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 taxable REIT subsidiaries (“TRS”), which are part of our TRS consolidated group (the “TRS Consolidated Group”) and are subject to U.S. 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.

Note 2 —Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), for interim financial statements and the instructions to Form 10-Q. Accordingly, certain information and footnote disclosures normally included in the consolidated financial statements prepared under GAAP have been condensed or omitted. In our opinion, all adjustments considered necessary for a fair presentation of our financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These financial statements should be read in conjunction with our financial statements and notes thereto included in our 2024 Annual Report.

Principles of Consolidation

The consolidated financial statements include our financial statements and the financial statements of our wholly owned subsidiaries, partnerships and other entities 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. Our VIEs are described in Note 15. All significant intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that could materially affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The ultimate impact of inflation, a currently high interest rate environment, tightening of capital markets and reduced property values, both globally and to our business, makes any estimate or assumption at September 30, 2025 inherently less certain.

Recently Issued Accounting Pronouncements

Significant Accounting Policies

See Item 8 – Financial Statements and Supplementary Data in our 2024 Annual Report for a description of our significant accounting policies. There have been no significant changes to our significant accounting policies since December 31, 2024.

Note 3 —Loans and Investments

Our Structured Business loan and investment portfolio consists of ($ in thousands):

(1)“Weighted Average Pay Rate” is a weighted average, based on the unpaid principal balance (“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.

(2)Including extension options, the weighted average remaining months to maturity at September 30, 2025 and December 31, 2024 was 20.3 and 22.7, respectively.

(3)The “First Dollar Loan-to-Value (“LTV”) Ratio” is calculated by comparing the total of our senior most dollar 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 absorb a total loss of our position.

(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 September 30, 2025 and December 31, 2024, bridge loans included 316 and 423, respectively, of SFR loans with a total gross loan commitment of $4.41 billion and $4.18 billion, respectively, of which $2.77 billion and $1.99 billion, respectively, was funded.

(6)Excludes exit fee receivables of $42.3 million and $46.6 million at September 30, 2025 and December 31, 2024, respectively, which is included in other assets on the consolidated balance sheets.

Concentration of Credit Risk

We are subject to concentration risk in that, at September 30, 2025, the UPB related to 64 loans with 5 different borrowers represented 9% of total assets. At December 31, 2024, the UPB related to 83 loans with 5 different borrowers represented 10% of total assets. During each of the three and nine months ended September 30, 2025 and the year ended December 31, 2024, no single loan or investment represented more than 10% of our total assets and no single investor group generated over 10% of our revenue. See Note 18 for details on our concentration of related party loans and investments.

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, payment status in accordance with current contractual terms, 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 borrower to make both principal and interest payments according to the contractual terms of the current loan agreement or, we expect to recover our investment, including accrued interest, based on the current value of the collateral and/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 the 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 September 30, 2025, and charge-offs recorded for the nine months ended September 30, 2025 is as follows ($ in thousands):

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):

Geographic Concentration Risk

At September 30, 2025, underlying properties in Texas and Florida represented 24% and 18%, respectively, of the outstanding balance of our loan and investment portfolio. At December 31, 2024, underlying properties in Texas and Florida represented 23% and 17%, respectively, of the outstanding balance of our loan and investment portfolio. No other states represented 10% or more of the total loan and investment portfolio.

Allowance for Credit Losses

A summary of the changes in the allowance for credit losses is as follows (in thousands):

(1)Represents the allowance for credit losses ontwo multifamily bridge loans that were charged-off in connection with the foreclosure of the underlying collateral as real estate owned ("REO") assets at fair value.

(2)Includes $6.3 million of reserves ontwo multifamily bridge loans that we foreclosed on and took back the underlying collateral as REO assets at fair value.

(3)Includes $25.0 million of reserves onfive multifamily bridge loans and a multifamily mezzanine loan that were charged-off in connection with the foreclosure of the underlying collateral as REO assets at fair value.

The additional provision for credit losses during the three and nine months ended September 30, 2025 was primarily attributable to specifically impaired multifamily loans, and to a lesser extent a weakening in 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. Estimates of current expected credit losses (“CECL”) for unfunded loan commitments are adjusted quarterly and correspond with the associated outstanding loans. At September 30, 2025 and December 31, 2024, we had outstanding unfunded commitments of $2.00 billion and $2.20 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 ("BTR") business.

At September 30, 2025 and December 31, 2024, accrued interest receivable related to our loans totaling $160.0 million and $154.4 million, respectively, was excluded from the estimate of credit losses, is subject to our revenue recognition policy, 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 reserve loans considered impaired by asset class is as follows ($ in thousands):

(1)Represents the UPB of 27 impaired loans (less unearned revenue and other holdbacks and adjustments) by asset class at both September 30, 2025 and December 31, 2024.

Non-performing Loans

Loans are classified as non-performing once the contractual payments exceed 60 days past due. 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 September 30, 2025,25 loans with an aggregate net carrying value of $531.8 million, net of loan loss reserves of $22.9 million, were classified as non-performing and, at December 31, 2024,26 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.

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

At both September 30, 2025 and December 31, 2024, we hadno loans contractually past due greater than 60 days that are still accruing interest.

Other Non-accrual Loans

In this challenging economic environment, we have been experiencing late and partial payments on certain loans in our structured portfolio. Therefore, 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 periods presented (in thousands).

At September 30, 2025 and December 31, 2024, there were four loans andone loan, respectively, included in the table above, with a UPB of $98.5 million and $32.0 million, respectively, that have specific reserves totaling $15.3 million and $5.0 million, respectively.

We recorded interest income on non-performing and other non-accrual loans of $2.7 million and $12.5 million during the three and nine months ended September 30, 2025, respectively, and $5.0 million and $21.6 million during the three and nine months ended September 30, 2024, respectively.

We haveten bridge loans to the same borrower collateralized by multifamily properties with a UPB and net carrying value totaling $444.8 million and $442.1 million at September 30, 2025, respectively, and a weighted average interest rate of SOFR plus 3.25%. In the first quarter of 2025, the borrower was experiencing financial difficulty, and we modified these loans to a weighted average pay rate and weighted average deferred rate of SOFR plus 1.70% and 1.55%, respectively, which stepped up to a weighted average pay rate and weighted average deferred rate of SOFR plus 2.20% and 1.05%, respectively, at June 30, 2025. In the third quarter of 2025, as the borrower continued to experience financial difficulty, we entered into a second modification that granted a forbearance of the borrower’s third quarter pay rate of interest, which totaled approximately $8 million for the three months ended September 30, 2025, and deferred payment of this amount until the maturity date of the loans. We also further modified these loans to a weighted average pay rate equal to SOFR and a weighted average deferred rate of 3.25%, with payments beginning in the fourth quarter of 2025. In connection with the second modification, we reversed certain amounts of previously accrued interest income, which is included in the $17.6 million interest income reversal disclosed in the “Loan Modifications” section below. These loans were not classified as non-performing loans at September 30, 2025, as the borrower is compliant with all of the terms and conditions of the new modification.

In addition, we havesix loans with a carrying value totaling $121.4 million at September 30, 2025, that are collateralized by a land development project. The loans do not carry a current pay rate of interest, however, five of the loans with a carrying value totaling $112.1 million entitle us to a weighted average accrual rate of interest of 9.93%. In 2008, we suspended the recording of the accrual rate of interest on these loans, as they were impaired and we deemed the collection of this interest to be doubtful. At both September 30, 2025 and December 31, 2024, we had a cumulative allowance for credit losses of $71.4 million related to these loans. 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 generally 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 the three months ended September 30, 2025 (in thousands):

(1)These loans were modified to a weighted average pay rate and deferred rate of 4.83% and 2.87%, respectively, at September 30, 2025. Substantially all of these loans (total UPB of $746.8 million) were also modified to extend the weighted average term by 13.1 months. These modifications also include loans with a total UPB of $48.0 million in which the pay rate increases from time-to-time throughout the loans' maturities.

(2)This loan was modified to reduce the interest rate to a weighted average pay rate and deferred rate of 1.00% and 5.50%, respectively, and to extend the weighted average term by 4.4 months.

(3)The total UPB of these loan modifications was $804.6 million at September 30, 2025 and represented 7.04% of our total Structured Business loan and investment portfolio at September 30, 2025.

(4)At September 30, 2025, modified loans with a UPB of $32.2 million have specific reserves totaling $3.6 million.

(5)Includes loans with a total UPB of $473.2 million which were previously modified. Using the SOFR rate at September 30, 2025, these loans were modified from a weighted average pay rate and deferred rate of 5.86% and 1.56%, respectively, to a weighted average pay rate and deferred rate of 4.19% and 3.23%, respectively.

The following table represents the UPB of loan modifications, as of the modification date, made to borrowers experiencing financial difficulty during the nine months ended September 30, 2025 (in thousands):

(1)These loans were modified to a weighted average pay rate and deferred rate of 4.95% and 2.71%, respectively, at September 30, 2025. A portion of these loans (total UPB of $972.0 million) were also modified to extend the weighted average term by 14.5 months. These modifications also include loans with a total UPB of $556.3 million in which the pay rate increases from time-to-time throughout the loans' maturities.

(2)These loans were modified to reduce the interest rate to a weighted average pay rate and deferred rate of 4.72% and 1.74%, respectively, at September 30, 2025 and to extend the weighted average term by 18.6 months.

(3)These loan modifications included amending certain terms, such as reallocating and/or replenishment of reserves, providing for a temporary and conditional forbearance of foreclosure and temporarily delaying past due interest payments.

(4)The total UPB of these loan modifications was $1.91 billion at September 30, 2025 and represented 16.70% of our total Structured Business loan and investment portfolio at September 30, 2025.

(5)At September 30, 2025, modified loans with a UPB of $143.3 million have specific reserves totaling $12.0 million.

(6)Includes loans with a total UPB of $993.3 million which were previously modified. Using the SOFR rate at September 30, 2025, these loans were modified from a weighted average pay rate and deferred rate of 6.22% and 1.38%, respectively, to a weighted average pay rate and deferred rate of 4.36% and 3.16%, respectively.

The following table represents the UPB of loan modifications, as of the modification date, made to borrowers experiencing financial difficulty during the three months ended September 30, 2024 (in thousands):

(1)These loans were modified to a weighted average pay rate and deferred rate of 6.01% and 2.58%, respectively, at September 30, 2024. A portion of these loans (total UPB of $618.8 million) were also modified to extend the weighted average term by 19.0 months. These modifications also include loans with a total UPB of $341.9 million in which the pay rate increases from time-to-time throughout the loans' maturities.

(2)These loans were modified to extend the weighted average term by 12.0 months.

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

(4)The total UPB of these loan modifications was $1.15 billion at September 30, 2024 and represented 10.0% of our total Structured Business loan and investment portfolio at September 30, 2024.

(5)At September 30, 2024, modified loans with a total UPB of $85.4 million have specific reserves totaling $8.1 million.

(6)Includes loans with a total UPB of $327.2 million which were previously modified. Using the SOFR rate at September 30, 2024, these loans were modified from a weighted average pay rate and deferred rate of 7.99% and 0.40%, respectively, to a weighted average pay rate and deferred rate of 6.38% and 2.02%, respectively.

The following table represents the UPB of loan modifications, as of the modification date, made to borrowers experiencing financial difficulty during the nine months ended September 30, 2024 (in thousands):

(1)These loans were modified to a weighted average pay rate and deferred rate of 6.40% and 2.22%, respectively, at September 30, 2024. A significant portion of these loans (total UPB of $1.62 billion) were also modified to extend the weighted average term by 19.5 months. These modifications also include loans with a total UPB of $341.9 million in which the pay rate increases from time-to-time throughout the loans' maturities.

(2)These loans were modified to extend the weighted average term by 10.5 months.

(3)This loan was modified to reduce the weighted average interest rate by 0.72%.

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

(5)The total UPB of these loan modifications was $3.53 billion at September 30, 2024 and represented 30.5% of our total Structured Business loan and investment portfolio at September 30, 2024.

(6)At September 30, 2024, modified loans with a total UPB of $326.2 million have specific reserves totaling $43.8 million.

(7)Includes loans with a total UPB of $327.2 million which were previously modified. Using the SOFR rate at September 30, 2024, these loans were modified from a weighted average pay rate and deferred rate of 7.99% and 0.40%, respectively, to a weighted average pay rate and deferred rate of 6.38% and 2.02%, respectively.

During the three and nine months ended September 30, 2025, we recorded $1.4 million and $7.1 million, respectively, of deferred interest on the loans that we modified during 2025 and $7.7 million and $30.9 million, respectively, for loans previously modified or resolved. During the three and nine months ended September 30, 2024, we recorded $10.3 million and $17.6 million, respectively, of deferred interest on the loans that we modified during 2024 and $4.1 million and $13.3 million, respectively, for loans previously modified or resolved. All of these amounts include deferred interest recorded on loans previously disclosed under "Loan Resolutions". During the three and nine months ended September 30, 2025, we reversed through interest income $17.6 million and $25.2 million, respectively, of interest receivable that was previously accrued on modified loans that we deemed the collection of interest was doubtful. During both the three and nine months ended September 30, 2024, we reversed through interest income $1.1 million of interest receivable that was previously accrued on modified loans that we deemed the collection of interest was doubtful.

At September 30, 2025 and December 31, 2024, we have recorded deferred interest totaling $71.7 million and $61.3 million, respectively, on all modified loans to borrowers experiencing financial difficulty, which includes deferred interest from loan resolutions. The deferred interest is included in other assets on the consolidated balance sheets.

At September 30, 2025 and December 31, 2024, we had future funding commitments on modified loans with borrowers experiencing financial difficulty of $20.6 million and $56.4 million, respectively, which are generally subject to performance covenants that must be met by the borrower to receive funding.

All loan modifications completed in the past 12 months were performing pursuant to their contractual terms at September 30, 2025, except fortwenty-one loans with a total UPB of $504.7 million, which includes sixteen loans with a total UPB of $416.3 million that were modified to provide temporary rate relief through a pay and accrual feature. Since these loans are not performing pursuant to their modified terms, these loans are classified as non-accrual loans. Five of these loans with a UPB of $130.3 million have a specific loan loss reserve of $24.3 million. The remaining sixteen loans with a total UPB of $374.3 million have no specific reserves as the estimated fair value of the properties exceeded our carrying value at September 30, 2025.

There wereno other material loan modifications, refinancings and/or extensions during the three and nine months ended September 30, 2025 and 2024 for borrowers experiencing financial difficulty.

Loan Resolutions

In June 2025, we exercised our right to foreclose onthree properties in San Antonio, Texas that were the underlying collateral for a bridge loan with a UPB of $77.7 million, an interest rate of 5.25% with a SOFR floor of 0.50%, and a net carrying value of $66.6 million, which includes loan loss reserves of $3.5 million. At foreclosure, we recorded an additional loss of $5.9 million to the provision for credit losses on the consolidated statements of income and charged-off the $9.4 million loan loss reserve. We simultaneously sold the properties for $65.0 million to a new borrower and provided a $65.0 million bridge loan with an interest rate of SOFR plus 2.00% for years one and two, and SOFR plus 3.00% for year three, subject to SOFR floors of 4.25%,5.25% and 6.25% in years one, two and three, respectively. The new loan was deemed to be a significant financing component of the transaction and, as a result, we recorded a loss and corresponding liability of $0.8 million as an adjustment to the purchase price, which will be accreted into interest income over the life of the loan.

In April 2025, we exercised our right to foreclose ontwo properties in Austin, Texas that were the underlying collateral for a non-performing bridge loan with a UPB of $21.2 million, an interest rate of SOFR plus 4.00% with a SOFR floor of 0.25%, and a net carrying value of $21.7 million. At foreclosure, we recorded an additional loss of $1.0 million to the provision for credit losses on the consolidated statements of income. We sold the properties in June 2025 for $20.7 million to a new borrower and provided a $19.2 million bridge loan with an interest rate of SOFR plus 2.00% in year one and SOFR plus 3.00% in year two. The new loan was deemed to be a significant financing component of the transaction and, as a result, we recorded a loss and corresponding liability of $0.1 million as an adjustment to the purchase price, which will be accreted into interest income over the life of the loan.

In April 2025, we exercised our right to foreclose ontwo properties in Orange Park, Florida that were the underlying collateral for a non-performing bridge loan with a UPB of $17.0 million, an interest rate of SOFR plus 4.38% with a SOFR floor of 2.46% and a net carrying value of $15.7 million. At foreclosure, we recorded an additional loss of $0.3 million to the provision for credit losses on the consolidated statements of income. We sold the properties in June 2025 for $15.4 million to a new borrower and provided a $14.8 million bridge loan with an interest rate of SOFR plus 1.50%. The new loan was deemed to be a significant financing component of the transaction and, as a result, we recorded a loss and corresponding liability of $0.6 million as an adjustment to the purchase price, which will be accreted into interest income over the life of the loan.

In the fourth quarter of 2024, we exercised our right to foreclose ontwo properties in Houston, Texas, that were the underlying collateral fortwo 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 providedtwo new bridge loans totaling $67.6 million with a weighted average fixed interest rate of 4.25% for the firsttwo years and 5.75% in the third year. The new loans were 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 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 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 September 30, 2025, 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 46% noncontrolling 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.

See Note 9 for additional loan resolution details.

Interest Reserves

Given the transitional nature of some of our real estate loans, we may require funds to be placed into an interest reserve as required by the contracts to cover debt service costs. At September 30, 2025 and December 31, 2024, we had total interest reserves of $254.5 million and $215.4 million, respectively, on 453 loans and 589 loans, respectively, with a total UPB of $8.18 billion and $8.65 billion, respectively.

Note 4 —Loans Held-for-Sale

Our GSE loans held-for-sale are typically sold within 60 days of loan origination, while our non-GSE loans are generally expected to be sold to third parties or securitized within 180 days of loan origination. Loans held-for-sale, net consists of the following (in thousands):

During the three and nine months ended September 30, 2025, we sold $2.03 billion and $3.56 billion, respectively, of loans held-for-sale. During the three and nine months ended September 30, 2024, we sold $1.12 billion and $3.34 billion, respectively, of loans held-for-sale.

At September 30, 2025 and December 31, 2024, there wereno loans held-for-sale that were 90 days or more past due, and there wereno loans held-for-sale that were placed on a non-accrual status.

Note 5 —Capitalized Mortgage Servicing Rights

Our capitalized mortgage servicing rights (“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 6.3 years and 6.9 years at September 30, 2025 and December 31, 2024, respectively.

A summary of our capitalized MSR activity is as follows (in thousands):

We collected prepayment fees totaling $0.5 million and $2.4 million during the three and nine months ended September 30, 2025, respectively, and $0.4 million and $1.2 million during the three and nine months ended September 30, 2024, respectively, which are included as a component of servicing revenue, net on the consolidated statements of income. At September 30, 2025 and December 31, 2024, no MSRs were considered impaired.

The expected amortization of capitalized MSRs recorded at September 30, 2025 is as follows (in thousands):

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

Note 6 —Mortgage Servicing

Product and geographic concentrations that impact our servicing revenue are as follows ($ in thousands):

(1)Excludes loans which we are not collecting a servicing fee.

(2)Represents four bridge loans sold by our Structured Business that we are servicing.

(3)No other individual state represented 4% or more of the total.

At September 30, 2025 and December 31, 2024, our weighted average servicing fee was 36.2 basis points and 37.8 basis points, respectively. At September 30, 2025 and December 31, 2024, we held total escrow balances (including unfunded collateralized loan obligation holdbacks) of approximately $1.41 billion and $1.45 billion, respectively, of which approximately $1.40 billion and $1.41 billion, respectively, is not included in our consolidated balance sheets. 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.

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

Note 7 —Securities Held-to-Maturity

Agency Private Label Certificates (“APL certificates”). In connection with our Private Label securitizations, we retain the most subordinate class of the APL certificates in satisfaction of credit risk retention requirements. At September 30, 2025, we held APL certificates with an initial face value of $192.8 million, which were purchased at a discount for $119.0 million. 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 5.6 years. The weighted average effective interest rate was 8.84% at both September 30, 2025 and December 31, 2024, including the accretion of a portion of the discount deemed collectible. Approximately $63.6 million is estimated to mature in one to five years and $129.2 million is estimated to mature in five to ten years.

Agency B Piece Bonds. Freddie Mac may choose to hold, sell or securitize loans we sell to them under the Freddie Mac SBL program. As part of the securitizations under the SBL program, we have the ability to purchase the B Piece bond through a bidding process, which represents the bottom 10%, or highest risk, of the securitization. At September 30, 2025, we held 49%, or $106.2 million initial face value, ofseven B Piece bonds, which were previously purchased at a discount for $74.7 million, and sold the remaining 51% to a third party. These securities are collateralized by a pool of multifamily mortgage loans, bear interest at an initial weighted average variable rate of 3.74% and have an estimated weighted average remaining maturity of 12.4 years. The weighted average effective interest rate was 11.50% and 11.76% at September 30, 2025 and December 31, 2024, respectively, including the accretion of a portion of the discount deemed collectible. Approximately $37.0 million is estimated to mature after ten years.

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

A summary of the changes in the allowance for credit losses for our securities held-to-maturity is as follows (in thousands):

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

We recorded interest income (including the amortization of discount) related to these investments of $3.6 million and $10.7 million during the three and nine months ended September 30, 2025, respectively, and $3.0 million and $11.3 million during the three and nine months ended September 30, 2024, respectively.

Note 8 —Investments in Equity Affiliates

We account for all investments in equity affiliates under the equity method. A summary of these investments is as follows (in thousands):

AWC Real Estate Opportunity Partners I LP. In the first quarter of 2025, in accordance with the fund’s objectives, AWC brought in an additional capital partner who committed to a $3.0 million investment. The new partner further diluted our interest in the fund to a 46% limited partnership interest, from 49% at December 31, 2024. Certain investments made by AWC were in qualified properties that have outstanding bridge loans originated by us totaling $108.5 million and a $13.0 million Fannie Mae DUS loan we continue to service. During the three and nine months ended September 30, 2025, we made contributions of $2.4 million and $6.1 million, respectively, and recorded a loss of $0.6 million and $0.8 million, respectively, related to this investment. During the nine months ended September 30, 2025, we received distributions of $1.0 million, which were classified as returns of capital. Interest income recorded from the bridge loans was $2.1 million and $6.4 million for the three and nine months ended September 30, 2025, respectively. During the nine months ended September 30, 2024, we received net capital distributions of $11.2 million, which were classified as returns of capital. During the three and nine months ended September 30, 2024 we recorded a loss of $0.2 million and $0.4 million, respectively, from our investment in AWC. We also made $5.1 million and $13.6 million of additional contributions to the fund during the three and nine months ended September 30, 2024, respectively. Interest income recorded from the bridge loans was $2.4 million and $9.0 million for the three and nine months ended September 30, 2024, respectively.

Fifth Wall Ventures ("Fifth Wall"). During the three and nine months ended September 30, 2025, we recorded a loss of $0.1 million and income of $0.7 million, respectively, and made contributions of $0.7 million and $2.6 million, respectively. During the nine months ended September 30, 2025, we received distributions of $1.4 million, which were classified as returns of capital. During the three and nine months ended September 30, 2024, we recorded a loss of $0.3 million and income of $0.1 million, respectively, and made contributions of $0.1 million and $0.8 million, respectively.

AMAC Holdings III LLC (“AMAC III”). During the three and nine months ended September 30, 2025, we recorded a loss of $0.8 million and $2.6 million, respectively, and made contributions of $0.9 million for the nine months ended September 30, 2025. During the three and nine months ended September 30, 2024, we recorded a loss of $0.5 million and of $1.7 million, respectively, and during the nine months ended September 30, 2024, we made contributions of $2.6 million.

The Cypress at Wesley Park. In the third quarter of 2025, we originated a $15.0 million Fannie Mae loan, which was used to purchase a recently constructed SFR portfolio in Florida, and invested $0.3 million of equity for an approximate 5% ownership interest in the portfolio. The loan was sold to Fannie Mae during the quarter. Operating results from this investment were de minimus this period.

Arbor Residential Investor LLC ("ARI"). We invested $9.6 million for a 50% interest in ARI, with our former manager, Arbor Commercial Mortgage, LLC (“ACM”), holding the remaining 50%. ARI was formed to hold a 50% interest in Wakefield Investment Holdings LLC (“Wakefield”), an entity that was formed with a third party to hold a controlling interest (initially 65%) in a residential mortgage banking business. During the nine months ended September 30, 2025, we recorded a loss of $1.7 million and during the three and nine months ended September 30, 2024, we recorded a loss of $1.0 million and $0.1 million, respectively, to income from equity affiliates in our consolidated statements of income. Additionally, during the three and nine months ended September 30, 2025, we received distributions of $16.4 million and $22.5 million, respectively, and during the nine months ended September 30, 2024, we received distributions of $7.7 million, which were classified as returns of capital.

In April 2025, Wakefield entered into an agreement to sell its interest in the residential mortgage banking business for $117.3 million. Based on the terms of this agreement, $22.0 million was allocated to us, which is equivalent to the carrying value of our investment, and therefore we did not record a gain or loss on the transaction. The transaction closed once the entire sales price was paid, which was due in installments as follows: $15.0 million on or before April 1, 2025; $15.0 million on or before April 30, 2025; and the remaining $87.3 million on or before December 15, 2025. The first two installments were made in April, for which we received $5.6 million as our allocable share, and the final installment was made on July 31, 2025, for which we received $16.4 million as our allocable share.

Lexford Portfolio. During the three and nine months ended September 30, 2025, we received distributions from this investment of $51.0 million and $54.4 million, respectively, and recognized income of $48.0 million and $51.4 million, respectively, net of $3.0 million in transaction related expenses. The distribution received in the third quarter of 2025 related to the sales of a portion of Lexford's multifamily asset portfolio. During the three and nine months ended September 30, 2024, we received distributions and recognized income of $4.9 million and $9.0 million, respectively.

See Note 18 for details of certain investments described above.

Note 9 —Real Estate Owned

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

At September 30, 2025, our REO assets were comprised of twelve multifamily properties, two office buildings andtwo land parcels. At December 31, 2024, our REO assets were comprised offour multifamily properties, two office buildings andtwo land parcels.

During the three and nine months ended September 30, 2025, we foreclosed ontwo andtwelve multifamily bridge loans, respectively, with an aggregate net carrying value of $107.8 million and $368.1 million, respectively, (net of specific CECL reserves of $16.6 million and $25.7 million, respectively) and received ownership of the underlying collateral as REO assets. Upon foreclosure, during the three and nine months ended September 30, 2025, we charged off $16.6 million and $25.0 million, respectively, of CECL reserves and recovered $0.7 million for the nine months ended September 30, 2025. Additionally, we recognized a lossof $1.7 million, which was recorded through (loss) gain on real estate on the consolidated statements of income during the nine months ended September 30, 2025.

During the three and nine months ended September 30, 2025, we soldone andfour multifamily REO assets, respectively, for $10.1 million and $94.1 million, respectively, and during the nine months ended September 30, 2025, repaid mortgage notes outstanding of $49.1 million. During the three and nine months ended September 30, 2025, we recognized a loss of $0.2 million and a gain of $1.6 million, respectively, excluding the loss associated with the significant financing component discussed below. Additionally, we provided new bridge loan financing to the new borrowers totaling $10.1 million and $93.6 million, respectively. The bridge loans bear interest as follows: One loan has a fixed rate of 4.75% for the first year,5.50% for the second year and 6.00% for the third year, one loan bears interest at a rate of SOFR plus 2.00%, one loan bears interest at a rate of 7.32%, subject to a floor of SOFR plus 3.00%, and one loan bears interest at a rate of 5.00% subject to a floor of SOFR plus 0.50% in the first year,5.60% subject to a floor of SOFR +1.10% in the second year and 6.00% subject to a floor of SOFR plus 1.50% in the third year. Three of the new financings provided were deemed to be a significant financing component of the transactions and, as a result, for thethree and nine months ended September 30, 2025, we recorded a loss and corresponding liability of $0.4 million and $3.2 million, respectively, as an adjustment to the purchase price, which will be accreted into interest income over the life of the loans. The net losses of these transactions were recorded through (loss) gain on real estate on the consolidated statements of income.

See Note 3 for details of properties foreclosed and sold within the same reporting period.

At September 30, 2025 and December 31, 2024, we had mortgage notes payable totaling $190.7 million and $74.9 million, respectively, which are collateralized by our REO assets. Interest rates on the mortgage notes range from PRIME plus 1.35% to SOFR plus 3.25%, with maturities spanning from December 2025 to June 2027.

At September 30, 2025 and December 31, 2024, our multifamily REO properties had a weighted average occupancy rate of approximately 37% and 77%, respectively. At both September 30, 2025 and December 31, 2024, both our office buildings were vacant.

We recorded depreciation expense related to the REO assets of $4.3 million and $11.8 million for the three and nine months ended September 30, 2025, respectively, and $0.8 million and $2.1 million for the three and nine months ended September 30, 2024, respectively.

Subsequent Event. In October 2025, we foreclosed onfive loans with a total UPB of $127.4 million that have specific reserves totaling $17.8 million.

Note 10 —Debt Obligations

Credit and Repurchase Facilities

Borrowings under our credit and repurchase facilities are as follows ($ in thousands):

(1)At September 30, 2025 and December 31, 2024, debt carrying value for the Structured Business was net of unamortized deferred finance costs of $9.9 million and $8.6 million, respectively, and for the Agency Business was net of unamortized deferred finance costs of $0.4 million and $0.2 million, respectively.

(2)At September 30, 2025 and December 31, 2024, all credit and repurchase facilities are variable rate loans.

(3)These facilities are subject to margin call provisions associated with changes in interest spreads.

(4)A portion of this facility was used to finance a fixed-rate SFR permanent loan reported through our Agency Business, which has been paid off.

(5)At September 30, 2025 and December 31, 2024, this facility was collateralized by certificates retained by us from our Freddie Mac Q Series securitization (“Q Series securitization”) with a principal balance of $26.5 million and $26.6 million, respectively. At

September 30, 2025, this facility was also collateralized by investment grade notes we retained from our BTR CLO 1 securitization with a principal balance of $41.0 million.

(6)The commitment amount under this facility expiressix months after the lender provides written notice. We then have an additionalsix months to repurchase the underlying loans.

(7)This facility has $500.0 million available for financing performing loans and $250.0 million available for financing non-performing loans.

(8)We have the ability to extend the maturity of this facility inone-year increments, subject to lender approval.

(9)These amounts exclude outstanding mortgage notes payable on our REO assets with a debt carrying value of $190.7 million and $74.9 million at September 30, 2025 and December 31, 2024, respectively.

(10)This facility matures at the latest maturity date of all purchased assets, which is currently June 2028.

(11)This facility was amended to temporarily increase its original amount of $500.0 million to $1.00 billion through September 2025, and subsequently to $750.0 million through November 2025.

(12)This facility matured in October 2025 and was not renewed.

Structured Business

At September 30, 2025 and December 31, 2024, the weighted average interest rate for the credit and repurchase facilities of our Structured Business, including certain fees and costs, such as structuring, commitment, non-use and warehousing fees, was 7.03% and 7.43%, respectively. The leverage on our loan and investment portfolio financed through our credit and repurchase facilities, excluding the securities repurchase facility and the working capital facility, was 68% and 67% at September 30, 2025 and December 31, 2024, respectively.

In September 2025, we amended the interest rate on a loan specific credit facility to SOFR plus 1.85% with a floor of 2.20% and extended the maturity to August 2026.

In August 2025, we amended a $1.00 billion repurchase facility to allow loans over 60 days delinquent to remain in the facility for up totwo years. Permitted delinquent loans have an interest rate of SOFR plus 3.00% and can comprise up to 10% of the outstanding facility balance, or up to 15% at the lender's discretion.

In July 2025, we amended a $2.00 billion joint repurchase facility, shared by the Structured and Agency businesses, to reduce the facility size to $1.50 billion and extended the maturity to July 2027, with aone-year extension option.

In May 2025, we amended the interest rate on a $150.0 million repurchase facility to SOFR plus 2.50%, with an all-in floor of 5.50%, from SOFR plus 3.00%, with an all-in floor of 5.50%, contingent upon certain designated loans remaining in the facility through August 2025.

In March 2025, we entered into a $1.15 billion repurchase facility to finance the loans primarily held in our CLOs. This facility has a 24-month reinvestment period through March 2027. The facility has an interest rate of SOFR plus 1.85% and matures at the latest maturity date of all purchased assets, which is currently February 2028. Additionally, this facility is approximately 88% non-recourse to us and has an 80% advance rate.

In January 2025, we amended a $200.0 million repurchase facility to increase the facility size to $400.0 million and extend the maturity to January 2027, with aone-year extension option.

Agency Business

In August 2025, we amended our $75.0 million letter of credit agreement which secures our obligations under the Fannie Mae DUS program and the Freddie Mac SBL program to extend the maturitytwo years to September 2027.

Securitized Debt

We account for securitized debt transactions on our consolidated balance sheet as financing facilities. These transactions are considered VIEs for which we are the primary beneficiary and are consolidated in our financial statements. The investment grade notes and guaranteed certificates issued to third parties are treated as secured financings and are non-recourse to us.

Borrowings and the corresponding collateral under our securitized debt transactions are as follows ($ in thousands):

(1)Debt carrying value is net of $20.2 million and $9.5 million of deferred financing fees at September 30, 2025 and December 31, 2024, respectively.

(2)At September 30, 2025 and December 31, 2024, the aggregate weighted average note rate for our collateralized loan obligations ("CLO"), including certain fees and costs, was 6.42% and 6.59%, respectively, and the Q Series securitization was 7.46% at December 31, 2024.

(3)At September 30, 2025 and December 31, 2024,54 and 46 loans, respectively, with a total UPB of $2.02 billion and $1.60 billion, 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 $12.5 million and $43.4 million at September 30, 2025 and December 31, 2024, respectively.

(5)The replenishment period for the following CLOs has ended: CLO 14 - September 2023, CLO 16 – March 2024, CLO 19 – May 2024, CLO 17 – June 2024 and CLO 18 – August 2024.

(6)All third party amounts have been paid down and only our tranches remain.

CLO 20. In August 2025, we completed CLO 20, through a wholly owned subsidiary, issuing nine tranches of CLO notes totaling $1.05 billion. Of the total CLO notes issued, $933.2 million consisted of investment grade notes issued to third party investors. The remaining $116.8 million were below investment grade notes retained by us. As of the CLO closing date, the notes were secured by a portfolio of real estate related assets and cash with a face value of $926.8 million, with the real estate related assets primarily comprised of first-lien mortgage bridge loans contributed from our existing loan portfolio. The CLO has an approximate two and a half year replacement period, during which principal and sale proceeds from the underlying loans may be reinvested into qualifying replacement loan obligations, subject to conditions outlined in the indenture. Thereafter, the outstanding debt balance will decrease as loans are repaid. Initially, the proceeds of the issuance also included $123.2 million for the purpose of acquiring additional loan obligations within 180 days from the CLO closing date, of which $42.5 million has been utilized to date, with the remaining amount expected to be fully utilized. Following the 180 day ramp up period and assuming the entire committed amount under the senior revolving note is utilized, the issuer will own loan obligations with a face value of $1.05 billion, representing leverage of 89%. The notes sold to third parties had an initial weighted average interest rate of 1.82% plus term SOFR, with interest payable monthly.

BTR CLO 1. In May 2025, we completed BTR CLO 1, through a wholly owned subsidiary, issuing 11 tranches of CLO notes totaling $801.9 million. Of the total CLO notes issued, $682.6 million consisted of investment grade notes, $41.0 million of which were retained by us (including $31.8 million we financed), with the remainder issued to third party investors. The remaining $119.3 million were below investment grade notes and fully retained by us. As of the CLO closing date, the notes were secured by a portfolio of real estate related assets and cash with a face value of $583.6 million, with the real estate related assets primarily comprised of first-lien mortgage construction and bridge loans secured by build-to-rent properties contributed from our existing loan portfolio. The CLO has an approximatetwo-year replacement period, during which principal and sale proceeds from the underlying loans may be reinvested into qualifying replacement loan obligations, subject to conditions outlined in the indenture. The CLO also includes a $200.0 million senior revolving note, which may be used to fund construction draws, acquire collateral at closing, or purchase replacement assets during the replacement period, of which $114.1 million had been drawn at September 30, 2025. Thereafter, the outstanding debt balance will decrease as loans are repaid. Initially, the proceeds of the issuance also included $50.0 million for the purpose of acquiring additional loan obligations within 180 days from the CLO closing date, which we subsequently utilized, resulting in the issuer owning loan obligations with a face value of $801.9 million, representing leverage of 80%, or 84% after factoring in the financed portion of our retained investment grade notes. The notes sold to third parties had an initial weighted average interest rate of 2.48% plus term SOFR, with interest payable monthly.

CLO 14 and 19. In March 2025, we unwound CLO 14 and 19, redeeming the remaining outstanding notes totaling $1.08 billion, which were repaid from a new $1.15 billion repurchase facility. We expensed $2.3 million of deferred financing fees related to the unwind of these CLOs, into loss on extinguishment of debt on the consolidated statements of income.

Securitization Paydowns. During the nine months ended September 30, 2025, outstanding notes totaling $852.1 million on our existing CLOs and Q Series securitization have been paid down.

Subsequent Event. In October 2025, we unwound CLO 16, redeeming the remaining outstanding notes totaling $482.1 million, which were repaid from the refinancing of the remaining assets within CLO 20 and the availability in our credit and repurchase facilities.

Senior Unsecured Notes

A summary of our senior unsecured notes is as follows ($ in thousands):

(1)At September 30, 2025 and December 31, 2024, the carrying value is net of deferred financing fees of $16.8 million and $8.9 million, respectively.

(2)At September 30, 2025 and December 31, 2024, the aggregate weighted average note rate, including certain fees and costs, was 6.71% and 6.02%, respectively.

(3)These notes can be redeemed by us prior to three months before 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 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.

In July 2025, we issued $500.0 million aggregate principal amount of 7.875% senior unsecured notes due July 2030 in a private offering. We used a portion of the net proceeds from this offering to repay our remaining outstanding $287.5 million 7.50% convertible notes due August 2025 and to add approximately $200.0 million of liquidity.

Convertible Senior Unsecured Notes

In August 2025, our 7.50% convertible senior unsecured notes with a UPB totaling $287.5 million matured and were fully settled with a portion of the net proceeds received from our 7.875% senior unsecured notes issued in July 2025.

The UPB and net carrying value of our convertible notes at December 31, 2024 were as follows (in thousands):

During the three months ended September 30, 2025, we incurred interest expense on the notes totaling $2.0 million, of which $1.8 million and $0.2 million related to the cash coupon and deferred financing fees, respectively. During the nine months ended September 30, 2025, we incurred interest expense on the notes totaling $14.2 million, of which $12.6 million and $1.6 million related to the cash coupon and deferred financing fees, respectively. During the three months ended September 30, 2024, we incurred interest expense on the notes totaling $6.1 million, of which $5.4 million and $0.7 million related to the cash coupon and deferred financing fees, respectively. During the nine months ended September 30, 2024, we incurred interest expense on the notes totaling $18.3 million, of which $16.2 million and $2.1 million related to the cash coupon and deferred financing fees, respectively. Including the amortization of the deferred financing fees, our weighted average total cost of the notes was 8.43% at December 31, 2024.

Junior Subordinated Notes

The carrying values of borrowings under our junior subordinated notes were $145.3 million and $144.7 million at September 30, 2025 and December 31, 2024, respectively, which is net of a deferred amount of $7.8 million and $8.3 million, respectively, (which is amortized into interest expense over the life of the notes) and deferred financing fees of $1.3 million and $1.4 million, respectively. 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 6.85% and 7.18% at September 30, 2025 and December 31, 2024, respectively. Including certain fees and costs, the weighted average note rate was 6.93% and 7.26% at September 30, 2025 and December 31, 2024, respectively.

Debt Covenants

Credit and Repurchase Facilities and Unsecured Debt. The credit and repurchase facilities and unsecured debt (senior and convertible notes) contain various financial covenants, including, but not limited to, minimum liquidity requirements, minimum net worth requirements, minimum unencumbered asset requirements, as well as certain other debt service coverage ratios, debt to equity ratios and minimum servicing portfolio tests. We were in compliance with all financial covenants and restrictions at September 30, 2025.

CLOs. Our CLO vehicles contain interest coverage and asset overcollateralization covenants that must be met as of the waterfall distribution date in order for us to receive such payments. If we fail these covenants in any of our CLOs, all cash flows from the applicable CLO would be diverted to repay principal and interest on the outstanding CLO bonds and we would not receive any residual payments until that CLO regained compliance with such tests. Our CLOs were in compliance with all such covenants at September 30, 2025, as well as on the most recent determination dates in October 2025. 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. However, we may not have sufficient liquidity available to do so at such time.

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

(1)The overcollateralization ratio divides the total principal balance of all collateral in the CLO by the total principal balance of the bonds associated with the applicable ratio. To the extent an asset is considered a defaulted security, the asset’s principal balance for purposes of the overcollateralization test is the lesser of the asset’s market value or the principal balance of the defaulted asset multiplied by the asset’s recovery rate which is determined by the rating agencies. Rating downgrades of CLO collateral will generally not have a direct impact on the principal balance of a CLO asset for purposes of calculating the CLO overcollateralization test unless the rating downgrade is below a significantly low threshold (e.g., CCC-) as defined in each CLO vehicle.

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

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

(1)This table represents the quarterly trend of our overcollateralization ratio, however, the CLO determination dates are monthly and we were in compliance with this test for all periods presented.

The ratio will fluctuate based on the performance of the underlying assets, transfers of assets into the CLOs prior to the expiration of their respective replenishment dates, purchase or disposal of other investments, and loan payoffs. No payment due under the junior subordinated indentures may be paid if there is a default under any senior debt and the senior lender has sent notice to the trustee. The junior subordinated indentures are also cross-defaulted with each other.

Note 11 —Allowance for Loss-Sharing Obligations

Our allowance for loss-sharing obligations related to the Fannie Mae DUS program is as follows (in thousands):

When a loan is sold under the Fannie Mae DUS program, we undertake an obligation to partially guarantee the performance of the loan. A liability is recognized for the fair value of the guarantee obligation undertaken for the non-contingent aspect of the guarantee and is removed only upon either the expiration or settlement of the guarantee. At September 30, 2025 and December 31, 2024, we had $35.4 million and $34.8 million, respectively, of guarantee obligations included in the allowance for loss-sharing obligations.

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 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. The settled loss is often net of any previously advanced principal and interest payments in accordance with the DUS program, which are reflected as reductions to the proceeds needed to settle losses. At September 30, 2025 and December 31, 2024, we had outstanding advances of $3.5 million and $1.9 million, respectively, which were netted against the allowance for loss-sharing obligations.

At September 30, 2025 and December 31, 2024, our allowance for loss-sharing obligations, associated with expected losses under CECL, was $60.4 million and $48.3 million, respectively, and represented 0.26% and 0.21%, respectively, of our Fannie Mae servicing portfolio. During the three and nine months ended September 30, 2025, we recorded an increase in CECL reserves of $5.6 million and $12.1 million, respectively. During the three and nine months ended September 30, 2024, we recorded an increase in CECL reserves of $4.0 million and $8.8 million, respectively.

At September 30, 2025 and December 31, 2024, the maximum quantifiable liability associated with our guarantees under the Fannie Mae DUS agreement was $4.48 billion and $4.30 billion, respectively. The maximum quantifiable liability is not representative of the actual loss we would incur. 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.

Note 12 —Derivative Financial Instruments

We enter into derivative financial instruments to manage exposures that arise from business activities resulting in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates and credit risk. We do not use these derivatives for speculative purposes, but are instead using them to manage our interest rate and credit risk exposure.

Agency Rate Lock and Forward Sale Commitments. We enter into contractual commitments to originate and sell mortgage loans at fixed prices with fixed expiration dates. The commitments become effective when the borrower “rate locks” a specified interest rate within time frames established by us. All potential borrowers are evaluated for creditworthiness prior to the extension of the commitment. Market risk arises if interest rates move adversely between the time of the rate lock by the borrower and the sale date of the loan to an investor. To mitigate the effect of the interest rate risk inherent in providing rate lock commitments to borrowers under the GSE programs, we enter into a forward sale commitment with the investor simultaneously with the rate lock commitment with the borrower. The forward sale contract locks in an interest rate and price for the sale of the loan. The terms of the contract with the investor and the rate lock with the borrower are matched in substantially all aspects, with the objective of eliminating interest rate risk to the extent practical. 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. 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 the three and nine months ended September 30, 2025, we recorded net losses of $2.1 million and net gains of $3.3 million, respectively, from changes in the fair value of these derivatives and income from MSRs of $15.5 million and $34.6 million, respectively. During the three and nine months ended September 30, 2024, we recorded net gains of $1.2 million and $0.9 million, respectively, from changes in the fair value of these derivatives and income from MSRs of $13.2 million and $37.9 million, respectively. See Note 13 for details.

Treasury Futures and Credit Default Swaps. We enter into over-the-counter treasury futures and credit default swaps to hedge our interest rate and credit risk exposure inherent in (1) our held-for-sale Agency Business Private Label loans from the time the loans are rate locked until sale or securitization, and (2) our Agency Business SFR – fixed rate loans from the time the loans are originated until the time they can be financed with match term fixed rate securitized debt. Our treasury futures typically have athree-month maturity and are tied to thefive-year andten-year treasury rates. Our credit default swaps typically have afive-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 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 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 September 30, 2025 and December 31, 2024, we had $1.4 million and $2.3 million, respectively, included in others assets, which was comprised of cash posted as collateral of $1.7 million and $2.0 million, respectively, and net liability and net asset positions of $0.3 million and $0.3 million, respectively, from the fair value of our treasury futures.

During the three months ended September 30, 2025, we recorded realized losses of $0.8 million and unrealized gains of $0.7 million to our Agency Business, related to our swaps. During the nine months ended September 30, 2025, we recorded realized losses of $1.3 million and unrealized losses of $0.5 million to our Agency Business, related to our swaps. During the three months ended September 30, 2024, we recorded realized gains of $0.2 million and unrealized losses of $0.1 million to our Agency Business, related to our swaps. During the nine months ended September 30, 2024, we recorded realized losses of $0.3 million and unrealized gains of $0.3 million, respectively, to our Agency Business, related to our swaps.

A summary of our non-qualifying derivative financial instruments in our Agency Business is as follows ($ in thousands):

Note 13 —Fair Value

Fair value estimates are dependent upon subjective assumptions and involve significant uncertainties resulting in variability in estimates with changes in assumptions. The following table summarizes the principal amounts, carrying values and the estimated fair values of our financial instruments (in thousands):

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. Determining which category an asset or liability falls within the hierarchy requires judgment and we evaluate our hierarchy disclosures each quarter. Hierarchical levels directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities are as follows:

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

Level 2—Inputs (other than quoted prices included in Level 1) are observable for the asset or liability through correlation with market data. Level 2 inputs may include quoted market prices for a similar asset or liability, interest rates and credit risk. Examples include non-government securities, certain mortgage and asset-backed securities, certain corporate debt and certain derivative instruments.

Level 3—Inputs reflect our best estimate of what market participants would use in pricing the asset or liability and are based on significant unobservable inputs that require a considerable amount of judgment and assumptions. Examples include certain mortgage and asset-backed securities, certain corporate debt and certain derivative instruments.

The following is a description of the valuation techniques used to measure fair value and the general classification of these instruments pursuant to the fair value hierarchy.

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 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).

Loans held-for-sale, net. Consists of originated loans that are generally expected to be transferred or sold within 60 days to 180 days of loan funding, and are valued using pricing models that incorporate observable inputs from current market assumptions or a hypothetical securitization model utilizing observable market data from recent securitization spreads and observable pricing of loans with similar characteristics (Level 2). Fair value includes the fair value allocated to the associated future MSRs and is calculated pursuant to the valuation techniques described below for capitalized mortgage servicing rights, net (Level 3).

Capitalized mortgage servicing rights, net. 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 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. Fair values are approximated using inputs based on current market quotes received from financial sources that trade such securities and are based on prevailing market data and, in some cases, are derived from third-party proprietary models based on well recognized financial principles and reasonable estimates about relevant future market conditions (Level 3).

Derivative financial instruments. Fair values of rate lock and forward sale commitments are estimated using valuation techniques, which include internally-developed models based on changes in the U.S. Treasury rate and other observable market data (Level 2). The fair value of rate lock commitments includes the fair value of the expected net cash flows associated with the servicing of the loans, see capitalized mortgage servicing rights, net above for details on the applicable valuation technique (Level 3). We also consider the impact of counterparty non-performance risk when measuring the fair value of these derivatives.

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. For these facilities, the fair values approximate their carrying values.

Securitized debt and junior subordinated notes. 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).

Senior unsecured notes. Fair values are estimated at current market quotes received from active markets when available (Level 1). 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. Fair values are estimated using current market quotes received from inactive markets (Level 2).

We measure certain financial assets and financial liabilities at fair value on a recurring basis. The fair values of these financial assets and liabilities are determined using the following input levels at September 30, 2025 (in thousands):

We measure certain financial and non-financial assets at fair value on a nonrecurring basis. The fair values of these financial and non-financial assets, if applicable, were determined using the following input levels at September 30, 2025 (in thousands):

(1)We had an allowance for credit losses of $143.5 million relating to 27 impaired loans with an aggregate carrying value, before loan loss reserves, of $630.5 million at September 30, 2025. The fair values of these impaired loans are based on the value of the underlying collateral.

(2)We have an impairment loss of $1.0 million related to 3 loans held-for-sale with an aggregate carrying value, before unrealized impairment losses, of $14.0 million.

Loan impairment assessments. Loans held for investment are intended to be held to maturity and, accordingly, are carried at cost, net of unamortized loan origination costs and fees, loan purchase discounts, and net of the allowance for credit losses, when such loan or investment is deemed to be impaired. We consider a loan impaired when, based upon current information, it is probable that all amounts due for both principal and interest will not be collected according to the contractual terms of the loan agreement. We evaluate our loans to determine if the value of the underlying collateral securing the impaired loan is less than the net carrying value of the loan, which may result in an allowance, and corresponding charge to the provision for credit losses, or an impairment loss. These valuations require significant judgments, which include assumptions regarding capitalization and discount rates, revenue growth rates, creditworthiness of major tenants, occupancy rates, availability of financing, exit plan and other factors.

Loans held-for-sale are generally expected to be transferred or sold within 60 days to 180 days of loan origination and are reported at lower of cost or market. We consider a loan classified as held-for-sale impaired if, based on current information, it is probable that we will sell the loan below par, or not be able to collect all principal and interest in accordance with the contractual terms of the loan agreement. These loans are valued using pricing models that incorporate observable inputs from current market assumptions or a hypothetical securitization model utilizing observable market data from recent securitization spreads and observable pricing of loans with similar characteristics.

The tables above and below include all impaired loans, regardless of the period in which the impairment was recognized.

Quantitative information about Level 3 fair value measurements at September 30, 2025 is as follows ($ in thousands):

The derivative financial instruments using Level 3 inputs are outstanding for short periods of time (generally less than 60 days). A roll-forward of Level 3 derivative instruments is 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):

(1)Loans held-for-sale, net are recorded at the lower of cost or market on an aggregate basis and includes fair value adjustments related to estimated cash flows from MSRs.

We measure certain assets and liabilities for which fair value is only disclosed. The fair values of these assets and liabilities are determined using the following input levels at September 30, 2025 (in thousands):

Note 14 —Commitments and Contingencies

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, the accuracy of the information being provided by us and the conformity of the loans to the terms and conditions required by the GSEs and HUD. 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. Among other things, these agencies require us to meet certain minimum net worth, operational liquidity and restricted liquidity collateral requirements, and compliance with reporting requirements. Our adjusted net worth and liquidity required by the agencies for all periods presented exceeded these requirements.

At September 30, 2025, we were required to maintain at least $23.4 million of liquid assets in one of our subsidiaries to meet our operational liquidity requirements for Fannie Mae and we had operational liquidity in excess of this requirement.

We are generally required to share the risk of any losses associated with loans sold under the Fannie Mae DUS program and are required to secure this obligation by assigning restricted cash balances and/or a letter of credit to Fannie Mae. The amount of collateral required by Fannie Mae is a formulaic calculation at the loan level by a Fannie Mae assigned tier, which considers the loan balance, risk level of the loan, age of the loan and level of risk-sharing. Fannie Mae requires restricted liquidity for Tier 2 loans of 75 basis points, 15 basis points for Tier 3 loans and 5 basis points for Tier 4 loans, which is funded over a 48-month period that begins upon delivery of the loan to Fannie Mae. A significant portion of our Fannie Mae DUS serviced loans for which we have risk sharing are Tier 2 loans. At September 30, 2025, the restricted liquidity requirement totaled $99.0 million and was satisfied with a $70.0 million letter of credit and cash issued to Fannie Mae.

At September 30, 2025, reserve requirements for the current Fannie Mae DUS loan portfolio will require us to fund $33.9 million in additional restricted liquidity over the next 48 months, assuming no further principal paydowns, prepayments, or defaults within our at-risk portfolio. Fannie Mae periodically reassesses these collateral requirements and may make changes to these requirements in the future. We generate sufficient cash flow from our operations to meet these capital standards and do not expect any changes to have a material impact on our future operations; however, future changes to collateral requirements may adversely impact our available cash.

We are subject to various capital requirements in connection with seller/servicer agreements that we have entered into with secondary market investors. Failure to maintain minimum capital requirements could result in our inability to originate and service loans for the respective investor and, therefore, could have a direct material effect on our consolidated financial statements. At September 30, 2025, we met all of Fannie Mae’s quarterly capital requirements and our Fannie Mae adjusted net worth was in excess of the required net worth. We are not subject to capital requirements on a quarterly basis for Ginnie Mae and FHA, as requirements for these investors are only required on an annual basis.

As an approved designated seller/servicer under Freddie Mac’s SBL program, we are required to post collateral to ensure that we are able to meet certain purchase and loss obligations required by this program. Under the SBL program, we are required to post collateral equal to $5.0 million, which is satisfied with a $5.0 million letter of credit.

We enter into contractual commitments with borrowers providing rate lock commitments while simultaneously entering into forward sale commitments with investors. These commitments are outstanding for short periods of time (generally less than 60 days) and are described in more detail in Note 12 and Note 13.

Debt Obligations and Operating Leases. At September 30, 2025, the maturities of our debt obligations and the minimum annual operating lease payments under leases with a term in excess of one year are as follows (in thousands):

During the three and nine months ended September 30, 2025, we recorded lease expense of $2.7 million and $8.1 million, respectively. During the three and nine months ended September 30, 2024, we recorded lease expense of $2.7 million and $8.3 million, respectively.

Unfunded Commitments. In accordance with certain structured loans and investments, we have outstanding unfunded commitments of $2.00 billion at September 30, 2025 that we are obligated to fund as borrowers meet certain requirements. 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.

Litigation. 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” and "Derivative Actions," 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 are 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.

On April 10, 2025, we served a motion to dismiss the case, which remains pending.

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.

Derivative Actions

On February 26, 2025, a purported shareholder filed a verified shareholder derivative suit in the United States District Court for the District of Maryland, derivatively and on behalf of the Company, against certain officers and directors of the Board of Directors, asserting claims for breach of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement, waste of corporate assets, violations of Section 14(a) of the Exchange Act, and contribution under the Exchange Act, arising from substantially the same facts and events as alleged in the above-mentioned Securities Class Action. The complaint seeks unspecified damages, costs and expenses, as well as other relief. On March 17, 2025, another purported shareholder filed a substantially similar verified shareholder derivative complaint, and the derivative actions were consolidated as In re Arbor Realty Trust, Inc. Stockholder Derivative Litigation, No. 1:25-cv-00639. On April 28, 2025, the Court entered a joint stipulation and order to stay the action pending resolution of the motion to dismiss in the Securities Class Action. The consolidated case is in the early stages.

On April 18, 2025, another purported shareholder filed a substantially similar verified shareholder derivative complaint in the District Court for the Eastern District of New York. On May 20, 2025, the Court entered a joint stipulation and order to stay the action pending resolution of the motion to dismiss in the Securities Class Action. This case is also in the early stages.

On July 18, 2025, a purported shareholder filed a verified shareholder derivative complaint in the Circuit Court for the Baltimore City, Maryland, derivatively and on behalf of the Company, against certain officers and directors of the Board of Directors, asserting demand refusal and a claim for breach of fiduciary duty. On September 15, 2025, the Court entered a joint stipulation and order to stay the action pending resolution of the motion to dismiss in the Securities Class Action. This case is also in the early stages.

On July 29, 2025, two purported shareholders filed a verified shareholder derivative complaint in the United States District Court for the Eastern District of New York, derivatively and on behalf of the Company, against certain officers and directors of the Board of Directors, asserting demand refusal and claims for violation of Section 14(a) of the Exchange Act, breach of fiduciary duty and unjust enrichment. On October 23, 2025, the Court granted a joint motion to change venue and transferred the action to the United States District Court for the District of Maryland. This case is also in the early stages.

On August 5, 2025, a purported shareholder filed a verified shareholder derivative complaint in the United States District Court for the Eastern District of New York, derivatively and on behalf of the Company, against certain officers and directors of the Board of Directors, asserting demand futility and claims for violation of Section 14(a) of the Exchange Act, breach of fiduciary duty, and unjust enrichment.

On September 10, 2025, the Court entered a joint stipulation and order to stay the action pending resolution of the motion to dismiss in the Securities Class Action. This case is also in the early stages.

We believe that the allegations in the lawsuits 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.

Due to Borrowers. Due to borrowers represents borrowers’ funds held by us to fund certain expenditures or to be released at our discretion upon the occurrence of certain pre-specified events, and to serve as additional collateral for borrowers’ loans. While retained, these balances earn interest in accordance with the specific loan terms they are associated with.

Note 15 —Variable Interest Entities

Our involvement with VIEs primarily affects our financial performance and cash flows through amounts recorded in interest income, interest expense, provision for loan losses and through activity associated with our derivative instruments.

Consolidated VIEs. We have determined that our operating partnership, ARLP, and our CLO and Q Series securitization entities (“Securitization Entities”) are VIEs, which we consolidate.

Our Securitization Entities invest in real estate and real estate-related securities and are financed by the issuance of debt securities. We believe we hold the power necessary to direct the most significant economic activities of those entities. We also have exposure to losses to the extent of our equity interests, and rights to waterfall payments in excess of required payments to bond investors. As a result of consolidation, equity interests have been eliminated, and the consolidated balance sheets reflect both the assets held and debt issued to third parties by the Securitization Entities, prior to the unwind. Our operating results and cash flows include the gross asset and liability amounts related to the Securitization Entities as opposed to our net economic interests in those entities.

The assets and liabilities related to these consolidated Securitization Entities are as follows (in thousands):

Assets held by the Securitization Entities are restricted and can only be used to settle obligations of those entities. The liabilities of the Securitization Entities are non-recourse to us and can only be satisfied from each respective asset pool. See Note 10 for details. We are not obligated to provide, have not provided, and do not intend to provide financial support to any of the Securitization Entities.

Unconsolidated VIEs. We determined that we are not the primary beneficiary of 66 VIEs in which we have a variable interest at September 30, 2025 because we do not have the ability to direct the activities of the VIEs that most significantly impact each entity's economic performance or substantially all of the activities do not involve, or are not conducted on behalf of, the Company.

A summary of our variable interests in identified VIEs, of which we are not the primary beneficiary, at September 30, 2025 is as follows (in thousands):

(1)Represents the carrying amount of loans and investments before reserves. At September 30, 2025, $253.0 million of loans to VIEs had corresponding specific loan loss reserves of $95.8 million. The maximum loss exposure at September 30, 2025 would not exceed the carrying amount of our investment.

These unconsolidated VIEs have exposure to real estate debt of approximately $5.01 billion at September 30, 2025.

Note 16 —Equity

Common Stock. We have an equity distribution agreement with Citizens 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 the nine months ended September 30, 2025, we sold 5,898,957 shares of our common stock at an average price of $11.97 per share for net proceeds of $70.6 million. At September 30, 2025, we had 23,439,335 shares available under the agreement.

We have 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 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 September 30, 2025, there was $138.6 million available for repurchase under this program.

Noncontrolling Interest. Noncontrolling interest relates to the operating partnership units (“OP Units”) issued to satisfy a portion of the purchase price in connection with the acquisition of the agency platform of ACM in 2016. Each of these OP Units are paired withone share of our special voting preferred shares having a par value of $0.01 per share and is entitled toone vote each on any matter submitted for stockholder approval. 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 aone-for-one basis. At September 30, 2025, there were 16,173,761 OP Units outstanding, which represented 7.6% of the voting power of our outstanding stock.

Distributions. Dividends declared (on a per share basis) during the nine months ended September 30, 2025 are as follows:

Common Stock– On October 29, 2025, the Board of Directors declared a cash dividend of $0.30 per share of common stock. The dividend is payable on November 26, 2025 to common stockholders of record as of the close of business on November 14, 2025.

Deferred Compensation. During 2025, we granted 675,545 shares of restricted common stock to certain employees and Board of Directors members under the Amended Omnibus Stock Incentive Plan with a total grant date fair value of $8.3 million, of which: (1)239,741 shares with a grant date fair value of $3.0 million vested on the grant date in 2025; (2)212,729 shares with a grant date fair value of $2.6 million will vest in 2026; (3)212,921 shares with a grant date fair value of $2.6 million will vest in 2027; and (4)10,154 shares with a grant date fair value of $0.1 million will vest in 2028.

During 2025, we granted our chief executive officer 170,674 shares of restricted common stock with a grant date fair value of $2.1 million that vest in full in the first quarter of 2028. We also granted our chief executive officer up to 682,699 shares of performance-based restricted stock units (“RSUs”) with a grant date fair value of $2.7 million that vest at the end of afour-year performance period based on the achievement of certain stockholder return objectives.

We also issued 47,725 fully-vested RSUs with a grant date fair value of $0.6 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 2025, we withheld 287,684 shares from the net settlement of restricted common stock by employees for payment of withholding taxes on shares that vested.

Earnings Per Share (“EPS”). 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 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):

(1)Net of preferred stock dividends.

(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)The three and nine months ended September 30, 2025 excludes interest expense of $2.0 million and $14.2 million, respectively, and potentially dilutive shares of 6,031,516 and 13,664,112, respectively, attributable to convertible debt since their effect would have been anti-dilutive. The three and nine months ended September 30, 2024 excludes interest expense of $6.1 million and $18.3 million, respectively, and potentially dilutive shares of 17,512,742 and 17,463,320, respectively, attributable to convertible debt since their effect would have been anti-dilutive. In August 2025, our convertible debt matured and was fully settled.

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

Note 17 —Income Taxes

As a REIT, we are generally not subject to U.S. federal income tax to the extent of our distributions to stockholders and as long as certain asset, income, distribution, ownership and administrative tests are met. To maintain our qualification as a REIT, we must annually distribute at least 90% of our REIT-taxable income to our stockholders and meet certain other requirements. We may also be subject to certain state, local and franchise taxes. Under certain circumstances, federal income and excise taxes may be due on our undistributed taxable income. If we were to fail to meet these requirements, we would be subject to U.S. federal income tax, which could have a material adverse impact on our results of operations and amounts available for distributions to our stockholders. We believe that all of the criteria to maintain our REIT qualification have been met for the applicable periods, but there can be no assurance that these criteria will continue to be met in subsequent periods.

The Agency Business is operated through our TRS Consolidated Group and is subject to U.S. 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.

A summary of our income tax benefit (provision) is as follows (in thousands):

Note 18 —Agreements and Transactions with Related Parties

Support Agreement and Employee Secondment Agreement. We have a support agreement and a secondment agreement with ACM and certain of its affiliates and certain affiliates of a relative of our chief executive officer (“Service Recipients”) where we provide support services and seconded employees to the Service Recipients. The Service Recipients reimburse us for the costs of performing such services and the cost of the seconded employees. During the three and nine months ended September 30, 2025, we incurred $1.0 million and $3.0 million, respectively, and, during the three and nine months ended September 30, 2024, we incurred $0.8 million and $2.6 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.

Other Related Party Transactions. Due from related party was $29.9 million and $12.8 million at September 30, 2025 and December 31, 2024, respectively, which consisted primarily of amounts due from our affiliated servicing operations related to real estate transactions closing at the end of the quarter and amounts due from ACM for costs incurred in connection with the support and secondment agreements described above.

Due to related party was $5.4 million and $4.5 million at September 30, 2025 and December 31, 2024, respectively, and consisted of loan settlements, 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 executives’ charter. During the three and nine months ended September 30, 2025, we reimbursed the aircraft owner $0.2 million and $1.2 million, respectively, and less than $0.1 million and $0.4 million, respectively, for the three and nine months ended September 30, 2024, for the flights chartered by our executives pursuant to the agreement.

In August 2025, we originated a $4.0 million bridge loan for the acquisition of a condominium complex, of which one of our directors is the Co-Chief Executive Officer and President of an entity that is an indirect owner of the borrower. The loan has an interest rate of SOFR plus 3.25% with a SOFR floor of 4.32% and matures in August 2026. Interest income recorded from this loan was less than $0.1 million for both the three and nine months ended September 30, 2025.

In May 2025, we refinanced a $32.5 million bridge loan with a new $43.0 million bridge loan for an SFR BTR construction project. In 2020, we also made a $3.5 million preferred equity investment in the same project, of which $1.2 million was paid off in May 2025. An entity owned by an immediate family member of our chief executive officer also made an equity investment in the project and owned a 21.8% equity interest in the borrowing entity that increased to 26.6% in connection with the refinancing. Interest on the new loan decreased from SOFR plus 3.75% with a SOFR floor of 0.75% to SOFR plus 3.00% with a SOFR floor of 3.25% and matures in May 2026. The preferred equity investment has a 12.00% fixed rate and was scheduled to mature in May 2025, which was extended to May 2026. In connection with the extension, the borrower paid deferred interest of $1.9 million. Interest income recorded from these loans was $0.9 million and $2.9 million for the three and nine months ended September 30, 2025, respectively, and $1.1 million and $3.2 million for the three and nine months ended September 30, 2024, respectively.

In May 2025, we refinanced a $30.5 million bridge loan with a new $36.2 million bridge loan, for an SFR BTR construction project. In 2020, we also made a $4.6 million preferred equity investment in the same project. ACM and an entity owned by an immediate family member of our chief executive officer also made equity investments in the project and owned a combined 18.9% equity interest in the borrowing entity that increased to 33.7% in connection with the refinancing. Interest on the new loan decreased from SOFR plus 4.25% with a SOFR floor of 1.00% to SOFR plus 3.00% with a SOFR floor of 3.25% and matures in November 2025. The preferred equity investment has a 12.00% fixed rate and was scheduled to mature in April 2023, which was extended to November 2025. In connection with the extension, the borrower paid deferred interest of $1.3 million. Interest income recorded from the loans was $0.9 million and $2.7 million for the three and nine months ended September 30, 2025, respectively, and $1.1 million and $3.3 million for the three and nine months ended September 30, 2024, respectively.

In May 2025, we refinanced a $56.9 million bridge loan with a new $58.4 million bridge loan for an SFR BTR construction project. Two of our officers made minority equity investments totaling $0.5 million, representing approximately 4% of the total equity invested in the project. Interest on the new loan decreased from SOFR plus 5.50% with a SOFR floor of 3.25% to SOFR plus 2.75% with a SOFR floor of 3.50% and matures in May 2027. Interest income recorded from the loans was $1.1 million and $3.7 million for the three and nine months ended September 30, 2025, respectively, and $1.0 million and $1.9 million for the three and nine months ended September 30, 2024, respectively.

In February 2025, we refinanced a $46.2 million bridge loan we purchased from ACM in 2022 with a new $52.6 million bridge loan ($17.8 million was funded at September 30, 2025) for an SFR BTR 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. Interest on the new loan decreased from SOFR plus 5.50% to SOFR plus 4.75% and matures in February 2027. Interest income recorded from the loans was $0.4 million and $1.0 million for the three and nine months ended September 30, 2025, respectively, and $0.2 million and $0.5 million for the three and nine months ended September 30, 2024, respectively.

In July 2024, we committed to fund a $62.4 million bridge loan ($17.8 million was funded at September 30, 2025) in an SFR BTR 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 $0.4 million and $0.7 million for the three and nine months ended September 30, 2025, respectively, and less than $0.1 million for both the three and nine months ended September 30, 2024.

In May 2024, we committed to fund a $42.5 million bridge loan ($18.8 million was funded at September 30, 2025) in an SFR BTR 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 $0.4 million and $0.8 million for the three and nine months ended September 30, 2025, respectively, and less than $0.1 million for both the three and nine months ended September 30, 2024.

In 2022, we committed to fund a $67.1 million bridge loan ($50.3 million was funded at September 30, 2025) in an SFR BTR 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 was scheduled to mature in May 2025, which was extended to May 2026. Interest income recorded from this loan was $1.1 million and $3.2 million for the three and nine months ended September 30, 2025, respectively, and $0.5 million and $0.9 million for the three and nine months ended September 30, 2024, respectively.

In 2022, we committed to fund a $39.4 million bridge loan ($39.0 million was funded at September 30, 2025) in an SFR BTR 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 4.00% with a SOFR floor of 0.25% and was scheduled to mature in March 2025, which was extended to March 2026. Interest income recorded from this loan was $0.8 million and $2.3 million for the three and nine months ended September 30, 2025, respectively, and $0.5 million and $1.2 million for the three and nine months ended September 30, 2024, 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. A portion of the property can potentially be converted to office space, of which we have the right to occupy, in part. 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.

In 2020, we originated a $14.8 million Private Label loan and a $3.4 million mezzanine loan ontwo 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 a 50% interest in the borrowing entity. In 2020, we sold the Private Label loan to an unconsolidated affiliate of ours. The mezzanine loan bears interest at a 9.00% fixed rate and matures in April 2030. Interest income recorded from the mezzanine loan was $0.1 million and $0.2 million for the three and nine months ended September 30, 2025, respectively, and less than $0.1 million and $0.2 million for the three and nine months ended September 30, 2024, respectively.

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 for an 18% interest in AMAC III. During the three and nine months ended September 30, 2025, we recorded a loss associated with this investment of $0.8 million and $2.6 million, respectively, and $0.5 million and $1.7 million for the three and nine months ended September 30, 2024, respectively. During the nine months ended September 30, 2025 we made contributions of $0.9 million. During the nine months ended September 30, 2024 we made contributions of $2.6 million. 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 has an interest rate of SOFR plus 3.50%, and was scheduled to mature in February 2025. In February 2025, we modified this loan to extend the maturity to February 2028 in exchange for a $2.0 million paydown that was made in the first quarter of 2025. In September 2025, the loan was modified to extend the maturity date to July 2028, adjust the interest rate to SOFR plus 1.00% with an all-in floor of 6.50%, and include a fixed pay rate of 1.00%, effective June 1, 2025, with the remaining balance deferred. Interest income recorded from the bridge loan was de minimus and $1.2 million for the three and nine months ended September 30, 2025, respectively, and $0.8 million and $2.4 million for the three and nine months ended September 30, 2024, respectively.

In 2019, we converted an existing bridge loan into a $2.0 million mezzanine loan with a fixed interest rate of 10.00%. 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. The loan was scheduled to mature in May 2025, which was extended to February 2029. Interest income recorded from this loan was $0.1 million and $0.2 million for the three and nine months ended September 30, 2025, respectively, and less than $0.1 million and $0.2 million for the three and nine months ended September 30, 2024, respectively.

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 owned 75% in the borrowing entity. The loan had an interest rate of SOFR plus 4.75% with a SOFR floor of 0.25%, and was scheduled to mature in February 2025, which was modified to extend the maturity to February 2027 in exchange for $3.0 million of additional collateral and a $2.5 million paydown to be made in February 2026. In 2024, we recorded a $5.5 million specific reserve on this loan. In September 2025, this loan paid off and we fully recovered the specific reserve recorded. Interest income recorded from this loan was $0.6 million and $1.6 million for the three and nine months ended September 30, 2025, respectively, and $0.6 million and $1.7 million, for the three and nine months ended September 30, 2024, respectively.

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. We carry a maximum loss-sharing obligation with Fannie Mae on this loan of up to 5% of the original UPB. Servicing revenue recorded from this loan was less than $0.1 million for all periods 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. We recorded a loss of $1.7 million related to this investment for the nine months ended September 30, 2025, and recorded a loss of $1.0 million and $0.1 million for the three and nine months ended September 30, 2024, respectively. During the three and nine months ended September 30, 2025, we received distributions of $16.4 million and $22.5 million, respectively, and during the nine months ended September 30, 2024, we received distributions of $7.7 million, which were classified as returns of capital. In April 2025, Wakefield entered into an agreement to sell its interest in the residential mortgage banking business for $117.3 million. Based on the terms of this agreement, $22.0 million was allocated to us, which is equivalent to the carrying value of our investment, and therefore, we did not record a gain or loss on the transaction. The transaction closed once the entire sales price was paid, which was due in installments as follows: $15.0 million on or before April 1, 2025; $15.0 million on or before April 30, 2025; and the remaining $87.3 million on or before December 15, 2025. The first two installments were made in April, for which we received $5.6 million as our allocable share, and the final installment was made on July 31, 2025, for which we received $16.4 million as our allocable share.

We, along with an executive officer of ours and a consortium of independent outside investors, hold equity investments in a portfolio of multifamily properties referred to as the “Lexford” portfolio, which is managed by an entity owned primarily by a consortium of affiliated investors, including our chief executive officer and an executive officer of ours. Based on the terms of the management contract, the management company is entitled to 4.75% of gross revenues of the underlying properties, along with the potential to share in the proceeds of a sale or restructuring of the debt. In 2018, the owners of Lexford restructured part of its debt and we originated 12 bridge loans totaling $280.5 million, which were used to repay in full certain existing mortgage debt and to renovate 72 multifamily properties included in the portfolio. The loans were originated in 2018, had interest rates of LIBOR plus 4.00% and were scheduled to mature in June 2021. During 2019, the borrower made payoffs and partial paydowns of principal totaling $250.0 million and in 2020, the remaining balance of the loans were refinanced with a $34.6 million Private Label loan, which bears interest at a fixed rate of 3.30% and matures in March 2030. In 2020, we sold the Private Label loan to an unconsolidated affiliate of ours. Further, as part of this 2018 restructuring, $50.0 million in unsecured financing was provided by an unsecured lender to certain parent entities of the property owners. ACM owns slightly less than half of the unsecured lender entity and, therefore, provided slightly less than half of the unsecured lender financing. In addition, during the three and nine months ended September 30, 2025, we received distributions from this investment of $51.0 million and $54.4 million, respectively, and recognized income of $48.0 million (net of $3.0 million in transaction related expenses) and $51.4 million, respectively. The distribution received in the third quarter of 2025 related to the sale of a portion of Lexford's multifamily asset portfolio. During the three and nine months ended September 30, 2024, we received distributions and recognized income of $4.9 million and $9.0 million, respectively. Separate from the loans we originated in 2018, we provide limited (“bad boy”) guarantees for certain other debt controlled by Lexford. The bad boy guarantees may become a liability for us upon standard “bad” acts such as fraud or a material misrepresentation by Lexford or us. At September 30, 2025, this debt had an aggregate outstanding balance of approximately $299.0 million and is scheduled to mature through 2029.

Several of our executives, including our chief financial officer, corporate secretary and our chairman, chief executive officer and president, hold similar positions for ACM. Our chief executive officer and his affiliated entities (“the Kaufman Entities”) together beneficially own approximately 35% of the outstanding membership interests of ACM and certain of our employees and directors also hold an ownership interest in ACM. Furthermore, one of our directors serves as the trustee and co-trustee oftwo of the Kaufman Entities that hold membership interests in ACM. At September 30, 2025, ACM holds 2,535,870 shares of our common stock and 10,483,930 OP Units, which represents 6.1% 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.

Note 19 —Segment Information

As described in Note 1, we operate throughtwo 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 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.

(1) Includes income allocated to the noncontrolling interest holders not allocated to thetwo reportable segments.

(1) Includes income allocated to the noncontrolling interest holders not allocated to thetwo reportable segments.