Agency originations were $857 million in Q2 with strong margins of 1.69%, and loan sales totaled $807 million; mortgage servicing rights income was $10.9 million.
Balance sheet lending portfolio grew to $11.6 billion with an all-in yield of 7.86%, while total debt on core assets was $9.6 billion with an all-in cost of 6.88%.
In Q2 2025, Arbor Realty Trust produced distributable earnings of $62.5 million or $0.30 per share excluding $10.5 million of onetime realized losses from REO asset sales, translating into a 10% ROE.
Leverage was reduced by 25% to a ratio of 3:1 from a peak of 4:1 nearly three years ago, aided by new unsecured rated debt issuance.
Loan loss reserves increased by $16 million in Q2, including $6.5 million specific reserves and $9.5 million general CECL reserves due to changes in real estate value outlooks.
Net interest income dropped from $75 million in Q1 to $69 million in Q2 due to increased delinquencies, less back interest collected, and reversals related to foreclosures.
Net interest spreads declined to 1.08% from 1.26% last quarter, impacted by back interest collection variability and new nonperforming loans.
Total delinquencies decreased to $529 million at June 30 from $654 million at March 31, with 60+ day delinquencies at $472 million and less than 60 days at $57 million.
A $50 million new private placement debt was closed in August 2025 to retire $60 million of senior notes maturing the same month.
Adjusted net income per adjusted share was flat compared to last quarter and up slightly compared to the second quarter of 2024.
Adjusted operating expenses increased 3% from the first quarter and 5% from the same quarter last year, mainly due to higher incentive compensation and a $1.2 million charge related to the closure of the China Post-Venture strategy.
Adjusted operating income increased slightly compared to the prior quarter and 3% compared to the same quarter last year.
Average AUM for the quarter was flat sequentially and up 5% compared to the June 2024 quarter; year-to-date average AUM improved 7% over the prior year 6-month period.
Balance sheet remains strong with approximately $140 million of seed capital invested in seeded products and an unused $100 million revolving credit facility.
Net client cash outflows during the June quarter were $1.9 billion, driven by lower gross equity inflows and outflows, partially offset by positive fixed income flows.
Revenues for the quarter were up 2% compared to the March quarter and up 4% compared to the prior year second quarter.
Second quarter results reflect strong equity market returns across global markets, driving ending AUM to $176 billion, up 8% compared to the March quarter.
The Board declared a quarterly dividend of $0.73 per share for the June 2025 quarter, a 7% increase over the prior quarter.
The second quarter marks the 12th consecutive quarter of positive flows for the fixed income business.
Weighted average recurring fee rate for the quarter was 68 basis points, slightly up from the prior quarter.
Year-to-date 2025 revenues were up 5% compared to the first half of 2024; adjusted operating expenses increased 4% primarily from higher incentive compensation and long-term incentive award grants.
Strategic Acquisition of NewPoint Enhances Multifamily Platform and Recurring Income
NewPoint acquisition closed on July 1, 2025, expanding the company's multifamily lending platform.
Expected agency FHA volume of $4-5 billion in 2025, with $1.9 billion already closed year-to-date.
Integration of NewPoint's mortgage servicing platform is underway, with full migration expected by Q1 2026.
Anticipated earnings contribution from NewPoint to grow significantly, with GAAP net income of $23-27 million and distributable earnings of $13-17 million in 2025.
Long-term ROE for NewPoint projected to reach low teens, with immediate benefits including cost savings and increased deal flow.
Average premium per policy increased by 11.9%, with policies in-force growth of 1.7% and a strong policy retention ratio of 89.7%.
Erie Insurance Exchange's direct and assumed written premiums grew by 9.2% in Q2 2025 and 11.4% in the first half of 2025 compared to the prior year.
Excluding catastrophe losses and prior accident year reserve development, the direct current year non-catastrophe loss ratio was 94.6% in Q2 and 95.1% year-to-date 2025.
Indemnity net income was $175 million or $3.34 per diluted share in Q2 2025, up from $164 million or $3.13 per diluted share in Q2 2024.
Investment income totaled nearly $20 million in Q2 2025, up from $14 million in Q2 2024; year-to-date investment income was $39 million versus $29 million last year.
Management fee revenue increased 8.3% in Q2 to $824 million and nearly 11% year-to-date to $1.6 billion.
Non-commission expenses increased 6.1% in Q2 and 7.7% year-to-date, driven by higher IT, sales, advertising, and personnel costs.
Operating income increased nearly 5% in Q2 to almost $200 million and 7% year-to-date to $350 million, driven by higher management fee revenue.
Policyholder surplus slightly decreased from $9.3 billion at December 2024 to $9.2 billion at June 2025.
The Exchange's combined ratio was 116.9% in Q2 2025, slightly higher than 115.9% in Q2 2024, driven by catastrophic weather events contributing 20.7 points versus 16.2 points previously.
Total cost of operations increased 9.1% in Q2 and 11.5% year-to-date, with commission expenses rising over 10% in Q2 and 13.1% year-to-date.
Year-to-date combined ratio was 112.6% in 2025 compared to 111.1% in 2024, with catastrophe losses increasing to 18.5 points from 12.7 points.
Year-to-date Indemnity net income was $313 million or $5.99 per diluted share, compared to $289 million or $5.52 per diluted share last year.
Adjusted compensation and related costs of $662 million essentially flat to Q1 2025; technology, occupancy, and facility costs up 7% from Q1 2025.
Adjusted diluted earnings per share of $2.24 for Q2 2025 is in line with prior quarter's $2.23 and Q2 2024 EPS of $2.26.
Adjusted net revenue of $1.76 billion is flat to Q2 2024 and down marginally from Q1 2025.
Adjusted operating expenses of just over $1.1 billion, up 1% from Q1 2025 and 3.7% from Q2 2024.
Average equity AUM down 5% and overall average AUM down 2% from Q1 2025; effective fee rate lowered to 39.6 basis points due to mix shift and flows into lower-priced products.
Net outflows of $14.9 billion driven by U.S. equities, timing of client redemptions, and rebalancing activity coinciding with equity market snapback.
Positive net flows in fixed income, multi-asset, alternatives, and $2.5 billion net flows into ETF products.
Returned over $395 million to stockholders in first half of 2025, including $286 million in dividends and $109 million in share buybacks during Q2.
Dafinchi