Edgar Filing: ARBOR REALTY TRUST INC

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2018

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-32136

Arbor Realty Trust, Inc.

(Exact name of registrant as specified in its charter)

Maryland		20-0057959
(State or other jurisdiction of incorporation)		(I.R.S. Employer Identification No.)

333 Earle Ovington Boulevard, Suite 900
Uniondale, NY
(Address of principal executive offices)

11553
(Zip Code)

(Registrant’s telephone number, including area code): (516) 506-4200

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer x	Smaller reporting company o

Non-accelerated filer	o (Do not check if a smaller reporting company)		Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. Common stock, $0.01 par value per share: 75,390,813 outstanding as of July 27, 2018.

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INDEX

PART I. FINANCIAL INFORMATION	2
Item 1. Financial Statements (Unaudited)	2
Consolidated Balance Sheets	2
Consolidated Statements of Income	3
Consolidated Statements of Comprehensive Income	4
Consolidated Statement of Changes in Equity	5
Consolidated Statements of Cash Flows	6
Notes to Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	48
Item 3. Quantitative and Qualitative Disclosures about Market Risk	62
Item 4. Controls and Procedures	63
PART II. OTHER INFORMATION	63
Item 1. Legal Proceedings	63
Item 1A. Risk Factors	63
Item 6. Exhibits	63
Signatures	65

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Forward-Looking Statements

The information contained in this quarterly report on Form 10-Q is not a complete description of our business or the risks associated with an investment in Arbor Realty Trust, Inc. We urge you to carefully review and consider the various disclosures made by us in this report.

This report contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to, among other things, the operating performance of our investments and financing needs. We use words such as “anticipate,” “expect,” “believe,” “intend,” “should,” “will,” “may” and similar expressions to identify forward-looking statements, although not all forward-looking statements include these words. Forward-looking statements are based on certain assumptions, discuss future expectations, describe future plans and strategies, contain projections of results of operations or of financial condition or state other forward-looking information. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. These forward-looking statements involve risks, uncertainties and other factors that may cause our actual results in future periods to differ materially from forecasted results. Factors that could have a material adverse effect on our operations and future prospects include, but are not limited to, changes in economic conditions generally and the real estate market specifically; adverse changes in our status with government-sponsored enterprises affecting our ability to originate loans through such programs; changes in interest rates; the quality and size of the investment pipeline and the rate at which we can invest our cash; impairments in the value of the collateral underlying our loans and investments; changes in federal and state laws and regulations, including changes in tax laws; the availability and cost of capital for future investments; and competition. Readers are cautioned not to place undue reliance on any of these forward-looking statements, which reflect our views as of the date of this report. The factors noted above could cause our actual results to differ significantly from those contained in any forward-looking statement.

Additional information regarding these and other risks and uncertainties we face is contained in our annual report on Form 10-K for the year ended December 31, 2017 (the “2017 Annual Report”) filed with the Securities and Exchange Commission (“SEC”) on February 23, 2018 and in our other reports and filings with the SEC.

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We are under no duty to update any of the forward-looking statements after the date of this report to conform these statements to actual results.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

($ in thousands, except share and per share data)

	June 30,			December 31,
	2018			2017
	(Unaudited)
Assets:
Cash and cash equivalents	$	106,968		$	104,374
Restricted cash	173,686			139,398
Loans and investments, net	3,064,798			2,579,127
Loans held-for-sale, net	311,487			297,443
Capitalized mortgage servicing rights, net	257,021			252,608
Securities held-to-maturity, net	50,342			27,837
Investments in equity affiliates	24,144			23,653
Real estate owned, net	14,650			16,787
Due from related party	10,162			688
Goodwill and other intangible assets	118,965			121,766
Other assets	72,097			62,264
Total assets	$	4,204,320		$	3,625,945

Liabilities and Equity:
Credit facilities and repurchase agreements	$	910,504		$	528,573
Collateralized loan obligations	1,590,644			1,418,422
Debt fund	68,270			68,084
Senior unsecured notes	122,343			95,280
Convertible senior unsecured notes, net	235,431			231,287
Junior subordinated notes to subsidiary trust issuing preferred securities	139,909			139,590
Related party financing	—			50,000
Due to related party	335			—
Due to borrowers	78,159			99,829
Allowance for loss-sharing obligations	31,402			30,511
Other liabilities	83,811			99,813
Total liabilities	3,260,808			2,761,389

Commitments and contingencies (Note 14)

Equity:
Arbor Realty Trust, Inc. stockholders’ equity:
Preferred stock, cumulative, redeemable, $0.01 par value: 100,000,000 shares authorized; special voting preferred shares; 21,230,769 shares issued and outstanding; 8.25% Series A, $38,788 aggregate liquidation preference; 1,551,500 shares issued and outstanding; 7.75% Series B, $31,500 aggregate liquidation preference; 1,260,000 shares issued and outstanding; 8.50% Series C, $22,500 aggregate liquidation preference; 900,000 shares issued and outstanding	89,508			89,508
Common stock, $0.01 par value: 500,000,000 shares authorized; 68,570,617 and 61,723,387 shares issued and outstanding, respectively	686			617
Additional paid-in capital	766,933			707,450
Accumulated deficit	(87,128		)	(101,926		)
Accumulated other comprehensive income	—			176
Total Arbor Realty Trust, Inc. stockholders’ equity	769,999			695,825
Noncontrolling interest	173,513			168,731
Total equity	943,512			864,556
Total liabilities and equity	$	4,204,320		$	3,625,945

See Notes to Consolidated Financial Statements.

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

($ in thousands, except share and per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Interest income	$	59,295		$	34,468		$	110,908		$	67,993
Interest expense	37,884			20,411			71,271			39,848
Net interest income	21,411			14,057			39,637			28,145
Other revenue:
Gain on sales, including fee-based services, net	15,622			18,830			33,815			38,001
Mortgage servicing rights	17,936			17,254			37,571			37,284
Servicing revenue, net	10,871			6,609			20,418			11,403
Property operating income	2,964			2,863			5,874			6,086
Other income, net	(470		)	(821		)	2,408			(1,707		)
Total other revenue	46,923			44,735			100,086			91,067
Other expenses:
Employee compensation and benefits	26,815			21,825			56,309			41,666
Selling and administrative	8,873			7,835			17,789			15,529
Property operating expenses	2,856			2,622			5,652			5,260
Depreciation and amortization	1,845			1,816			3,691			3,713
Impairment loss on real estate owned	2,000			1,500			2,000			2,700
Provision for loss sharing (net of recoveries)	348			532			821			2,212
Provision for loan losses (net of recoveries)	(2,127		)	(1,760		)	(1,802		)	(2,456		)
Management fee - related party	—			2,673			—			6,673
Total other expenses	40,610			37,043			84,460			75,297
Income before gain on extinguishment of debt, income (loss) from equity affiliates and income taxes	27,724			21,749			55,263			43,915
Gain on extinguishment of debt	—			—			—			7,116
Income (loss) from equity affiliates	1,387			(3		)	2,132			760
(Provision for) benefit from income taxes	(4,499		)	(3,435		)	4,285			(9,536		)
Net income	24,612			18,311			61,680			42,255
Preferred stock dividends	1,888			1,888			3,777			3,777
Net income attributable to noncontrolling interest	5,557			4,494			14,547			10,935
Net income attributable to common stockholders	$	17,167		$	11,929		$	43,356		$	27,543

Basic earnings per common share	$	0.26		$	0.21		$	0.68		$	0.51
Diluted earnings per common share	$	0.25		$	0.21		$	0.66		$	0.50

Weighted average shares outstanding:
Basic	65,683,057			56,652,334			63,773,306			54,071,085
Diluted	90,055,170			79,064,503			87,420,543			76,365,118

Dividends declared per common share	$	0.25		$	0.18		$	0.46		$	0.35

See Notes to Consolidated Financial Statements.

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(in thousands)

	Three Months Ended June 30,					Six Months Ended June 30,
	2018		2017			2018			2017
Net income	$	24,612	$	18,311		$	61,680		$	42,255
Unrealized loss on securities available-for-sale, at fair value	—		(147		)	—			(118		)
Reclassification of net unrealized gains on available-for-sale securities into accumulated deficit (Note 2)	—		—			(176		)	—
Reclassification of net realized loss on derivatives designated as cash flow hedges into earnings	—		—			—			238
Comprehensive income	24,612		18,164			61,504			42,375
Less:
Comprehensive income attributable to noncontrolling interest	5,557		4,453			14,504			10,972
Preferred stock dividends	1,888		1,888			3,777			3,777
Comprehensive income attributable to common stockholders	$	17,167	$	11,823		$	43,223		$	27,626

See Notes to Consolidated Financial Statements.

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited)

($ in thousands, except shares)

Six Months Ended June 30, 2018

	Preferred Stock Shares	Preferred Stock Value		Common Stock Shares		Common Stock Par Value		Additional Paid- in Capital		Accumulated Deficit			Accumulated Other Comprehensive Income			Total Arbor Realty Trust, Inc. Stockholders’ Equity			Noncontrolling Interest			Total Equity

Balance — December 31, 2017	24,942,269	$	89,508	61,723,387		$	617	$	707,450	$	(101,926	)	$	176		$	695,825		$	168,731		$	864,556
Issuance of common stock, net				6,452,700		65		55,842								55,907						55,907
Stock-based compensation				396,030		4		3,641								3,645						3,645
Forfeiture of unvested restricted stock				(1,500	)											—						—
Distributions - common stock										(28,727		)				(28,727		)				(28,727		)
Distributions - preferred stock										(3,777		)				(3,777		)				(3,777		)
Distributions - preferred stock of private REIT										(7		)				(7		)				(7		)
Distributions - noncontrolling interest																			(9,765		)	(9,765		)
Net income										47,133						47,133			14,547			61,680
Reclassification of net unrealized gains on available-for-sale securities into accumulated deficit										176			(176		)	—						—
Balance — June 30, 2018	24,942,269	$	89,508	68,570,617		$	686	$	766,933	$	(87,128	)	$	—		$	769,999		$	173,513		$	943,512

See Notes to Consolidated Financial Statements.

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(in thousands)

	Six Months Ended June 30,
	2018			2017

Operating activities:
Net income	$	61,680		$	42,255
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	3,691			3,713
Stock-based compensation	3,645			2,986
Amortization and accretion of interest and fees, net	7,658			1,842
Amortization of capitalized mortgage servicing rights	23,802			23,716
Originations of loans held-for-sale	(2,080,393		)	(2,288,694		)
Proceeds from sales of loans held-for-sale, net of gain on sale	2,064,486			2,569,203
Payoffs and paydowns of loans held-for-sale	22			73
Mortgage servicing rights	(37,571		)	(37,284		)
Write-off of capitalized mortgage servicing rights from payoffs	10,078			6,497
Impairment loss on real estate owned	2,000			2,700
Provision for loan losses (net of recoveries)	(1,802		)	(2,456		)
Provision for loss sharing (net of recoveries)	821			2,212
Net charge-offs for loss sharing obligations	70			(1,822		)
Deferred tax (benefit) provision	(13,135		)	937
Income from equity affiliates	(2,132		)	(760		)
Gain on extinguishment of debt	—			(7,116		)
Changes in operating assets and liabilities	(24,307		)	(11,240		)
Net cash provided by operating activities	18,613			306,762

Investing Activities:
Loans and investments funded and originated, net	(875,212		)	(551,468		)
Payoffs and paydowns of loans and investments	429,133			456,251
Internalization of management team	—			(25,000		)
Deferred fees	6,309			3,015
Investments in real estate, net	(220		)	(433		)
Contributions to equity affiliates	(2,460		)	(650		)
Distributions from equity affiliates	2,807			374
Purchase of securities held-to-maturity, net	(21,637		)	(7,838		)
Payoffs and paydowns of securities held-to-maturity	519			8
Proceeds from insurance settlements, net	1,294			1,014
Due to borrowers and reserves	(58,585		)	(753		)
Net cash used in investing activities	(518,052		)	(125,480		)

Financing activities:
Proceeds from repurchase agreements, loan participations and credit facilities	3,971,279			4,343,816
Payoffs and paydowns of repurchase agreements, loan participations and credit facilities	(3,588,443		)	(4,744,921		)
Payoffs and paydowns of collateralized loan obligations	(267,750		)	—
Payoffs of senior unsecured notes	(97,860		)	—
Payoff of related party financing	(50,000		)	—
Payoffs of junior subordinated notes to subsidiary trust issuing preferred securities	—			(12,691		)
Proceeds from issuance of collateralized loan obligations	441,000			279,000
Proceeds from issuance of senior unsecured notes	125,000			—
Proceeds from issuance of convertible senior unsecured notes	—			13,750
Proceeds from issuance of common stock, net	55,907			76,225
Receipts on swaps and returns of margin calls from counterparties	—			431
Distributions paid on common stock	(28,727		)	(19,781		)
Distributions paid on noncontrolling interest	(9,765		)	(7,431		)
Distributions paid on preferred stock	(3,777		)	(3,777		)
Distributions paid on preferred stock of private REIT	(7		)	(7		)
Payment of deferred financing costs	(10,536		)	(5,857		)
Net cash provided by (used in) financing activities	536,321			(81,243		)
Net increase in cash, cash equivalents and restricted cash	36,882			100,039
Cash, cash equivalents and restricted cash at beginning of period	243,772			167,960
Cash, cash equivalents and restricted cash at end of period	$	280,654		$	267,999

See Notes to Consolidated Financial Statements.

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Continued)

(in thousands)

	Six Months Ended June 30,
	2018		2017

Supplemental cash flow information:
Cash used to pay interest	$	58,675	$	35,142
Cash used to pay taxes	$	10,698	$	13,452

Supplemental schedule of non-cash investing and financing activities:
Distributions accrued on 8.25% Series A preferred stock	$	267	$	267
Distributions accrued on 7.75% Series B preferred stock	$	203	$	203
Distributions accrued on 8.50% Series C preferred stock	$	159	$	159

See Notes to Consolidated Financial Statements.

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

June 30, 2018

Note 1 — Description of Business

Arbor Realty Trust, Inc. (“we,” “us,” or “our”) is a Maryland corporation formed in 2003. We operate through two business segments: our Structured Loan Origination and Investment Business (“Structured Business”) and our Agency Loan Origination and Servicing Business (“Agency Business”). Through our Structured Business, we invest in a diversified portfolio of structured finance assets in the multifamily and commercial real estate markets, primarily consisting of bridge and mezzanine loans, including junior participating interests in first mortgages, preferred and direct equity. We may also 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 the “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”) and conduit/commercial mortgage-backed securities (“CMBS”) programs. 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 Multifamily Conventional Loan lender, seller/servicer, in New York, New Jersey and Connecticut, a Freddie Mac affordable, manufactured housing, senior housing and small balance loan (“SBL”) lender, seller/servicer, nationally and a HUD MAP and LEAN senior housing/healthcare lender nationally.

We have operated the Agency Business since July 2016 when we acquired it from Arbor Commercial Mortgage, LLC (“ACM” or our “Former Manager”). We were externally managed and advised by ACM and, effective May 31, 2017, terminated the existing management agreement with ACM to fully internalize our management team. Refer to our 2017 Annual Report for details of our acquisition of the Agency Business (the “Acquisition”) and termination of the management agreement.

Substantially all of our operations are conducted through our operating partnership, Arbor Realty Limited Partnership (“ARLP”), for which we serve as the general partner, and ARLP’s subsidiaries. We are organized to qualify as a real estate investment trust (“REIT”) for U.S. federal income tax purposes. Certain of our assets that produce non-qualifying income, primarily within the Agency Business, are operated through taxable REIT subsidiaries (“TRS”), which is part of our TRS consolidated group (the “TRS Consolidated Group”) and is subject to U.S. federal, state and local income taxes. See Note 17 — Income Taxes for details.

Note 2 — Basis of Presentation and Significant Accounting Policies

Basis of Presentation

Our interim 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 2017 Annual Report.

Reclassification

Certain prior period amounts have been reclassified to conform to the current period presentation. See the following “Recently Adopted Accounting Pronouncements” section for the cash flows impact of the retrospective adoption of Accounting Standards Update (“ASU”) 2016-18, Statement of Cash Flows: Restricted Cash and ASU 2016-15, Statement of Cash Flows.

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

June 30, 2018

Principles of Consolidation

These consolidated financial statements include our financial statements and the financial statements of our wholly owned subsidiaries, partnerships and other joint ventures in which we own 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. See Note 15 — Variable Interest Entities for information about our VIEs. All significant intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires us 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.

Significant Accounting Policies

We describe our significant accounting policies in our 2017 Annual Report. There have been no significant changes in our significant accounting policies since December 31, 2017.

Recently Adopted Accounting Pronouncements

Description	Adoption Date	Effect on Financial Statements
Since 2014, the Financial Accounting Standards Board (“FASB”) has issued several amendments to its guidance on revenue recognition. The amended guidance, among other things, introduces a new framework for a single comprehensive model that can be used when accounting for revenue and supersedes most current revenue recognition guidance, including that which pertains to specific industries. The core principle states that an entity should recognize revenue to depict the transfer of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for such goods and services. It also requires expanded quantitative and qualitative disclosures that will enable financial statement users to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Most revenue associated with financial instruments, including interest and loan origination fees, along with gains and losses on investment securities, derivatives and sales of financial instruments are excluded from the scope of the guidance.	First quarter of 2018.	The adoption of this guidance did not have a material impact on our consolidated financial statements. This standard may impact the timing of gains on certain future sales of real estate.

In November 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-18, Statement of Cash Flows: Restricted Cash. This ASU requires changes in the total of cash, cash equivalents, restricted cash, and restricted cash equivalents to be shown in the statement of cash flows. Previous guidance required the change in cash and cash equivalents be shown on the statement of cash flows, with cash used to fund restricted cash and restricted cash equivalents shown as a component of operating, investing, or financing activities. Entities are now also required to reconcile the total of cash, cash equivalents, restricted cash, and restricted cash equivalents as presented in the statement of cash flows to the related captions in the balance sheet when these balances are presented separately in the balance sheet.	First quarter of 2018.	This guidance required retrospective adoption, therefore, we adjusted the cash flow statement for the comparable prior period. The following table shows the impact of the adoption of this guidance, as well as the adoption of ASU 2016-15 described below.

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

June 30, 2018

Description		Adoption Date		Effect on Financial Statements
In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows. This ASU provides eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows.		First quarter of 2018.		This guidance required retrospective adoption, therefore, we reclassified $1.0 million of proceeds from insurance settlements from net cash provided by operating activities to net cash used in investing activities for the six months ended June 30, 2017. In addition, we chose the cummulative earnings approach for distributions received from equity method investees, which did not result in any changes in the way we account for such distributions. The following table shows the impact of the adoption of this guidance, as well as the adoption of ASU 2016-18 described above.

(in thousands)	Six Months Ended June 30, 2017
As previously reported under GAAP applicable at the time
Cash and cash equivalents at beginning of period	$	138,645
Net decrease in cash and cash equivalents	(57,886		)
Cash and cash equivalents at end of period	80,759
Net cash provided by operating activities: changes in operating assets and liabilities	(10,270		)
Net cash used in investing activities	(126,494		)
Net cash used in financing activities	(239,307		)

As currently reported under ASU 2016-18 and ASU 2016-15
Cash, cash equivalents and restricted cash at beginning of period	$	167,960
Net increase in cash, cash equivalents and restricted cash	100,039
Cash, cash equivalents and restricted cash at end of period	267,999
Net cash provided by operating activities: changes in operating assets and liabilities	(11,240		)
Net cash used in investing activities	(125,480		)
Net cash provided by (used in) financing activities	(81,243		)

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall: Consensuses of the FASB Emerging Issues Task Force. This ASU requires that unconsolidated equity investments not accounted for under the equity method be recorded at fair value, with changes in fair value recorded through net income. The accounting principles that permitted available-for-sale classification with unrealized holding gains and losses recorded in other comprehensive income for equity securities will no longer be applicable. In addition, financial liabilities measured using the fair value option will need to present any change in fair value caused by a change in instrument-specific credit risk separately in other comprehensive income.

First quarter of 2018.

The adoption of this guidance did not have a material impact on our consolidated financial statements. In connection with the adoption of this ASU, we reclassified $0.2 million of unrealized gains on available-for-sale securities from accumulated other comprehensive income to accumulated deficit.

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ARBOR REALTY TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

June 30, 2018

Recently Issued Accounting Pronouncements

The following table is not intended to represent all recently issued accounting pronouncements that are not yet effective and which have not yet been adopted by us. This table should be read in conjunction with the recently issued accounting pronouncements section included in our 2017 Annual Report.

Description		Effective Date		Effect on Financial Statements
In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation to expand the scope of ASC Topic 718, Compensation - Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees.		First quarter of 2019.		We have evaluated ASU 2018-07 and determined the adoption of this standard will not have a significant impact on our consolidated financial statements.

Note 3 — Loans and Investments

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

	June 30, 2018			Percent of Total		Loan Count	Wtd. Avg. Pay Rate (1)		Wtd. Avg. Remaining Months to Maturity	Wtd. Avg. First Dollar LTV Ratio (2)		Wtd. Avg. Last Dollar LTV Ratio (3)

Bridge loans	$	2,891,974		92	%	167	6.58	%	20.3	0	%	73	%
Preferred equity investments	151,604			5	%	10	8.18	%	73.7	60	%	85	%
Mezzanine loans	91,301			3	%	10	10.28	%	19.8	21	%	68	%
	3,134,879			100	%	187	6.76	%	22.8	4	%	74	%
Allowance for loan losses	(58,733		)
Unearned revenue	(11,348		)
Loans and investments, net	$	3,064,798

	December 31, 2017

Bridge loans	$	2,422,105		91	%	150	6.10	%	20.9	0	%	72	%
Preferred equity investments	142,892			6	%	12	6.47	%	68.7	64	%	90	%
Mezzanine loans	87,541			3	%	8	10.78	%	24.8	20	%	63	%
	2,652,538			100	%	170	6.28	%	23.6	4	%	73	%
Allowance for loan losses	(62,783		)
Unearned revenue	(10,628		)
Loans and investments, net	$	2,579,127

(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 that is required to be paid monthly as stated in the individual loan agreements. Certain loans and investments that require an additional rate of interest “Accrual Rate” to be paid at maturity are not included in the weighted average pay rate as shown in the table.

(2) 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.

(3) 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.

Concentration of Credit Risk

We are subject to concentration risk in that, at June 30, 2018, the UPB related to 49 loans with five different borrowers represented 25% of total assets. At December 31, 2017, the UPB related to 42 loans with five different borrowers represented 24% of total assets. During both the six months ended June 30, 2018 and the year ended December 31, 2017, no single loan or investment represented more than 10% of our total assets and no single investor group generated over 10% of our revenue.

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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, 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 loan to make both principal and interest payments according to the contractual terms of the loan agreement, and is not considered impaired. A risk rating of substandard indicates we anticipate the loan may require a modification of some kind. A risk rating of doubtful indicates we expect the loan to underperform over its term, and there could be loss of interest and/or principal. Further, while the above are the primary guidelines used in determining a certain risk rating, subjective items such as borrower strength, market strength or asset quality may result in a rating that is higher or lower than might be indicated by any risk rating matrix.

As a result of the loan review process, at June 30, 2018 and December 31, 2017, we identified eight loans and investments that we consider higher-risk loans that had a carrying value, before loan loss reserves, of $128.2 million and $126.5 million, respectively, and a weighted average last dollar LTV ratio of 92% and 93%, respectively.

A summary of the loan portfolio’s weighted average internal risk ratings and LTV ratios by asset class is as follows ($ in thousands):

	June 30, 2018
Asset Class	UPB		Percentage of Portfolio		Wtd. Avg. Internal Risk Rating	Wtd. Avg. First Dollar LTV Ratio		Wtd. Avg. Last Dollar LTV Ratio

Multifamily	$	2,389,630	76	%	pass/watch	4	%	73	%
Self Storage	301,830		10	%	pass/watch	0	%	72	%
Land	133,811		4	%	substandard	0	%	90	%
Office	123,060		4	%	special mention	0	%	64	%
Healthcare	92,465		3	%	pass	0	%	81	%
Hotel	55,975		2	%	pass/watch	23	%	74	%
Retail	36,408		1	%	pass/watch	8	%	76	%
Commercial	1,700		<1	%	doubtful	63	%	63	%
Total	$	3,134,879	100	%	pass/watch	4	%	74	%

	December 31, 2017

Multifamily	$	1,925,529	73	%	pass/watch	4	%	72	%
Self Storage	301,830		11	%	pass	0	%	71	%
Land	132,828		5	%	substandard	0	%	90	%
Office	107,853		4	%	pass/watch	1	%	64	%
Healthcare	55,615		2	%	pass/watch	0	%	74	%
Hotel	90,725		3	%	special mention	37	%	81	%
Retail	36,458		1	%	pass/watch	8	%	66	%
Commercial	1,700		<1	%	doubtful	63	%	63	%
Total	$	2,652,538	100	%	pass/watch	4	%	73	%

Geographic Concentration Risk

As of June 30, 2018, 20%, 19% and 10% of the outstanding balance of our loan and investment portfolio had underlying properties in New York, Texas and California, respectively. As of December 31, 2017, 23%, 21% and 11% of the outstanding balance of our loan and investment portfolio had underlying properties in Texas, New York and California, respectively.

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June 30, 2018

Impaired Loans and Allowance for Loan Losses

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017

Allowance at beginning of period	$	63,108		$	83,016		$	62,783		$	83,712
Provision for loan losses	1,325			—			1,650			—
Charge-offs	(3,173		)	—			(3,173		)	—
Recoveries of reserves	(2,527		)	(1,760		)	(2,527		)	(2,456		)
Allowance at end of period	$	58,733		$	81,256		$	58,733		$	81,256

During the three and six months ended June 30, 2018, we determined that the fair value of the underlying collateral (land development project) securing six loans with a carrying value of $120.9 million was less than the net carrying value of the loans, which resulted in a provision for loan losses of $1.3 million and $1.7 million, respectively.

During the three and six months ended June 30, 2018, we settled, for $31.6 million, a non-performing preferred equity investment in a hotel property with a net carrying value of $29.1 million, resulting in a reserve recovery of $2.5 million and a charge-off of $3.2 million. In addition, we received a payment and recorded a recovery of $0.9 million related to a written-off junior participation interest in an office building.

During the three and six months ended June 30, 2017, a fully reserved multifamily mezzanine loan with a UPB of $1.8 million paid off in full, resulting in a $1.8 million reserve recovery. In addition, during the first quarter of 2017, we recorded a reserve recovery of $0.7 million on a multifamily bridge loan.

The ratio of net recoveries to the average loans and investments outstanding were de minimus for all periods presented.

There were no loans for which the fair value of the collateral securing the loan was less than the carrying value of the loan for which we had not recorded a provision for loan loss as of June 30, 2018 and 2017.

We have six loans with a carrying value totaling $120.9 million at June 30, 2018, which mature in September 2018, that are collateralized by a land development project. The loans do not carry a current pay rate of interest, but five of the loans with a carrying value totaling $111.5 million entitle us to a weighted average accrual rate of interest of 8.89%. 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 June 30, 2018 and December 31, 2017, we had cumulative allowances for loan losses of $50.7 million and $49.1 million, respectively, 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 in compliance with all of the terms and conditions of the loans.

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

	June 30, 2018						Three Months Ended June 30, 2018				Six Months Ended June 30, 2018
Asset Class	UPB		Carrying Value (1)		Allowance for Loan Losses		Average Recorded Investment (2)		Interest Income Recognized		Average Recorded Investment (2)		Interest Income Recognized

Land	$	132,559	$	125,693	$	55,533	$	131,985	$	—	$	131,823	$	—
Hotel	—		—		—		17,375		—		17,375		—
Office	2,279		2,279		1,500		2,281		31		2,284		60
Commercial	1,700		1,700		1,700		1,700		—		1,700		—
Total	$	136,538	$	129,672	$	58,733	$	153,341	$	31	$	153,181	$	60

	December 31, 2017						Three Months Ended June 30, 2017				Six Months Ended June 30, 2017

Land	$	131,086	$	124,812	$	53,883	$	131,086	$	—	$	131,086	$	—
Hotel	34,750		34,750		5,700		34,750		60		34,750		371
Office	2,288		2,288		1,500		27,556		27		27,558		51
Commercial	1,700		1,700		1,700		1,700		—		1,700		—
Multifamily	—		—		—		880		—		1,271		22
Total	$	169,824	$	163,550	$	62,783	$	195,972	$	87	$	196,365	$	444

(1) Represents the UPB of four impaired loans (less unearned revenue and other holdbacks and adjustments) by asset class at both June 30, 2018 and December 31, 2017.

(2) Represents an average of the beginning and ending UPB of each asset class.

At June 30, 2018, two loans with an aggregate net carrying value of $0.8 million, net of related loan loss reserves of $1.7 million, were classified as non-performing. At December 31, 2017, two loans with an aggregate net carrying value of $29.1 million, net of related loan loss reserves of $7.4 million, were classified as non-performing. 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.

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

	June 30, 2018						December 31, 2017
Asset Class	Carrying Value		Less Than 90 Days Past Due		Greater Than 90 Days Past Due		Carrying Value		Less Than 90 Days Past Due		Greater Than 90 Days Past Due

Commercial	$	1,700	$	—	$	1,700	$	1,700	$	—	$	1,700
Hotel	—		—		—		34,750		—		34,750
Office	831		—		831		—		—		—
Total	$	2,531	$	—	$	2,531	$	36,450	$	—	$	36,450

At both June 30, 2018 and December 31, 2017, there were no loans contractually past due 90 days or more that were still accruing interest.

There were no loan modifications, refinancings and/or extensions during the six months ended June 30, 2018 that were considered troubled debt restructurings. During the six months ended June 30, 2017, there was a $34.8 million loan to a hotel property that was modified and considered a troubled debt restructuring as a result of a forbearance agreement entered into with the borrower in the second quarter of 2017. This loan was subsequently classified as non-performing. This loan was modified to increase the total recovery of the combined principal and interest. There were no other loans in which we considered the modifications to be troubled debt restructurings and no additional loans considered to be impaired as a result of our troubled debt restructuring analysis performed during the six months ended June 30, 2018 and 2017.

Given the transitional nature of some of our real estate loans, we may require funds to be placed into an interest reserve, based on contractual requirements, to cover debt service costs. At June 30, 2018, we had total interest reserves of $47.6 million on 92 loans with an aggregate UPB of $1.89 billion. At December 31, 2017, we had total interest reserves of $52.5 million on 81 loans with an aggregate UPB of $1.57 billion.

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June 30, 2018

Note 4 — Loans Held-for-Sale, Net

Loans held-for-sale, net consists of the following (in thousands):

	June 30, 2018			December 31, 2017

Fannie Mae	$	204,658		$	243,717
Freddie Mac	102,357			47,545
FHA	1,119			987
	308,134			292,249
Fair value of future MSR	4,754			5,806
Unearned discount	(1,401		)	(612		)
Loans held-for-sale, net	$	311,487		$	297,443

Our loans held-for-sale, net are typically sold within 60 days of loan origination and the gain on sales are included in gain on sales, including fee-based services, net in the consolidated statements of income. During the three and six months ended June 30, 2018, we sold $1.02 billion and $2.08 billion, respectively, of loans held-for-sale and recorded gain on sales of $14.8 million and $32.2 million, respectively. During the three and six months ended June 30, 2017, we sold $1.20 billion and $2.57 billion, respectively, of loans held-for-sale and recorded gains on sales of $17.6 million and $35.7 million, respectively. At June 30, 2018 and December 31, 2017, there were no loans held-for-sale that were 90 days or more past due, and there were no 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 from loans sold in our Agency Business. The discount rates used to determine the present value of our MSRs throughout the periods presented for all MSRs were between 8% - 15% (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 7.3 years and 7.2 years at June 30, 2018 and December 31, 2017, respectively.

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

	Three Months Ended June 30, 2018									Six Months Ended June 30, 2018
	Acquired			Originated			Total			Acquired			Originated			Total
Balance at beginning of period	$	131,934		$	123,798		$	255,732		$	143,270		$	109,338		$	252,608
Additions	—			18,493			18,493			—			38,293			38,293
Amortization	(7,517		)	(4,420		)	(11,937		)	(15,512		)	(8,290		)	(23,802		)
Write-downs and payoffs	(4,400		)	(867		)	(5,267		)	(7,741		)	(2,337		)	(10,078		)
Balance at end of period	$	120,017		$	137,004		$	257,021		$	120,017		$	137,004		$	257,021

	Three Months Ended June 30, 2017									Six Months Ended June 30, 2017
Balance at beginning of period	$	180,945		$	57,986		$	238,931		$	194,801		$	32,942		$	227,743
Additions	—			19,083			19,083			—			45,553			45,553
Amortization	(9,660		)	(2,168		)	(11,828		)	(20,122		)	(3,594		)	(23,716		)
Write-downs and payoffs	(3,096		)	(7		)	(3,103		)	(6,490		)	(7		)	(6,497		)
Balance at end of period	$	168,189		$	74,894		$	243,083		$	168,189		$	74,894		$	243,083

We collected prepayment fees of $4.9 million and $8.7 million during the three and six months ended June 30, 2018, respectively, which are included as a component of servicing revenue, net on the consolidated statements of income. During the three and six months ended June 30, 2017, we collected prepayment fees totaling $2.1 million and $4.1 million, respectively. As of June 30, 2018 and December 31, 2017, we had no valuation allowance recorded on any of our MSRs.

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June 30, 2018

The expected amortization of capitalized MSRs recorded as of June 30, 2018 is shown in the table below. Actual amortization may vary from these estimates (in thousands).

Year	Amortization
2018 (six months ending 12/31/2018)	$	23,934
2019	45,327
2020	40,340
2021	33,259
2022	26,708
2023	22,303
Thereafter	65,150
Total	$	257,021

Note 6 — Mortgage Servicing

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

June 30, 2018
Product Concentrations					Geographic Concentrations
			Percent of			UPB Percentage
Product	UPB		Total		State	of Total
Fannie Mae	$	12,794,277	75	%	Texas	21	%
Freddie Mac	3,730,980		22	%	North Carolina	10	%
FHA	585,017		3	%	California	8	%
Total	$	17,110,274	100	%	New York	8	%
					Georgia	6	%
					Florida	6	%
					Other (1)	41	%
					Total	100	%

December 31, 2017
Product Concentrations					Geographic Concentrations
			Percent of			UPB Percentage
Product	UPB		Total		State	of Total
Fannie Mae	$	12,502,699	77	%	Texas	22	%
Freddie Mac	3,166,134		20	%	North Carolina	10	%
FHA	537,482		3	%	California	8	%
Total	$	16,206,315	100	%	New York	8	%
					Georgia	6	%
					Florida	6	%
					Other (1)	40	%
					Total	100	%

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

At June 30, 2018 and December 31, 2017, our weighted average servicing fee was 46.9 basis points and 47.7 basis points, respectively. We held cash in escrow for these loans totaling $482.8 million and $477.9 million at June 30, 2018 and December 31, 2017, respectively, which is not reflected 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 these escrow deposits, generally based on a market rate of interest negotiated with the financial institutions that hold the escrow deposits. Interest earned on escrows, net of interest paid to the borrower, was $2.7 million and $4.9 million during the three and six months ended June 30, 2018, respectively, and $1.1 million and $1.8 million during the three and six months ended June 30, 2017, respectively, and is a component of servicing revenue, net in the consolidated statements of income.

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June 30, 2018

Note 7 — Securities Held-to-Maturity

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 option to purchase the bottom tranche bond, generally referred to as the “B Piece,” that represents the bottom 10%, or highest risk, of the securitization. During the six months ended June 30, 2018, we purchased two B Piece bonds with an initial face value of $31.2 million, at a discount, for $21.6 million. As of June 30, 2018, we retained 49%, or $72.2 million initial face value, of five B Piece bonds, which were purchased at a discount for $48.8 million, and sold the remaining 51% to a third party at par. These held-to-maturity securities are carried at cost, net of unamortized discounts, and are collateralized by a pool of multifamily mortgage loans, bear interest at an initial weighted average variable rate of 3.63% and have an estimated weighted average maturity of 5.7 years. The weighted average effective interest rate was 11.42% and 12.97% at June 30, 2018 and December 31, 2017, respectively, including the accretion of discount. Approximately $10.8 million is estimated to mature within one year, $31.0 million is estimated to mature after one year through five years, $20.4 million is estimated to mature after five years through ten years and $9.2 million is estimated to mature after ten years.

The following is a summary of the held-to-maturity securities we held (in thousands):

June 30, 2018
	Face Value		Carrying Value		Unrealized (Loss) Gain			Estimated Fair Value
B Piece bonds	$	71,222	$	50,342	$	(189	)	$	50,153

December 31, 2017
B Piece bonds	$	40,566	$	27,837	$	602	$	28,439

As of June 30, 2018, no impairment was recorded on these held-to-maturity securities. During the three and six months ended June 30, 2018, we recorded interest income of $0.5 million and $1.1 million, respectively, and, during the three and six months ended June 30, 2017, we recorded interest income of $0.3 million and $0.4 million, respectively, related to these investments.

Note 8 — Investments in Equity Affiliates

We account for all investments in equity affiliates under the equity method. The following is a summary of our investments in equity affiliates (in thousands):

	Investments in Equity Affiliates at				UPB of Loans to Equity Affiliates at
Equity Affiliates	June 30, 2018		December 31, 2017		June 30, 2018

Arbor Residential Investor LLC	$	19,631	$	19,193	$	—
West Shore Café	2,193		2,140		1,688
Lightstone Value Plus REIT L.P	1,895		1,895		—
JT Prime	425		425		—
East River Portfolio	—		—		—
Lexford Portfolio	—		—		280,500
Total	$	24,144	$	23,653	$	282,188

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Arbor Residential Investor LLC (“ARI”). During the three and six months ended June 30, 2018, we recorded income of $0.7 million and $0.8 million, respectively, and, during both the three and six months ended June 30, 2017, we recorded a loss of $0.7 million to income (loss) from equity affiliates in our consolidated statements of income related to our investment in this residential mortgage banking business. In addition, during the first quarter of 2018, we made a $2.4 million payment for our proportionate share of a litigation settlement related to this investment, which was distributed back to us by our equity affiliate.

During both the six months ended June 30, 2018 and 2017, we received cash distributions totaling $0.4 million (which were classified as returns of capital) in connection with a joint venture that invests in non-qualified residential mortgages purchased from ARI’s origination platform. During all periods presented, we recorded income of less than $0.1 million to income (loss) from equity affiliates in our consolidated statements of income related to this investment.

Lexford Portfolio. During the three and six months ended June 30, 2018, we received distributions of $0.6 million and $1.2 million, respectively, and, during the three and six months ended June 30, 2017, we received distributions of $0.6 million and $1.3 million, respectively, from this equity investment, which was recognized as income. See Note 18 — Agreements and Transactions with Related Parties for details.

Note 9 — Real Estate Owned

Our real estate assets at both June 30, 2018 and December 31, 2017 were comprised of a hotel property and an office building.

Real Estate Owned

	June 30, 2018									December 31, 2017
(in thousands)	Hotel Property			Office Building			Total			Hotel Property			Office Building			Total

Land	$	3,294		$	4,509		$	7,803		$	3,294		$	4,509		$	7,803
Building and intangible assets	30,918			2,010			32,928			30,699			2,010			32,709
Less: Impairment loss	(13,307		)	(2,500		)	(15,807		)	(13,307		)	(500		)	(13,807		)
Less: Accumulated depreciation and amortization	(9,505		)	(769		)	(10,274		)	(9,228		)	(690		)	(9,918		)
Real estate owned, net	$	11,400		$	3,250		$	14,650		$	11,458		$	5,329		$	16,787

For the six months ended June 30, 2018 and 2017, our hotel property had a weighted average occupancy rate of 58% and 57%, respectively, a weighted average daily rate of $116 and $117, respectively, and weighted average revenue per available room of $67 for both periods. The operation of a hotel property is seasonal with the majority of revenues earned in the first two quarters of the calendar year. Of the total impairment losses recorded on our hotel property of $13.3 million, $1.5 million and $2.7 million were recorded during the three and six months ended June 30, 2017, respectively.

Our office building was fully occupied by a single tenant until April 2017 when the lease expired. The building is currently vacant. During the three months ended June 30, 2018, based on discussions with market participants, we determined that the office building exhibited indicators of impairment and performed an impairment analysis. As a result of this impairment analysis, we recorded an impairment loss of $2.0 million.

Our real estate owned assets had restricted cash balances totaling $0.8 million and $0.7 million at June 30, 2018 and December 31, 2017, respectively, due to escrow requirements.

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June 30, 2018

Note 10 — Debt Obligations

Credit Facilities and Repurchase Agreements

The following table outlines borrowings under our credit facilities and repurchase agreements ($ in thousands):

				June 30, 2018						December 31, 2017
	Current Maturity	Extended Maturity	Note Rate	Debt Carrying Value (1)		Collateral Carrying Value		Wtd. Avg. Note Rate		Debt Carrying Value (1)		Collateral Carrying Value		Wtd. Avg. Note Rate
Structured Business

$375 million repurchase facility	Mar. 2020	Mar. 2021	L + 1.75% to 3.50%	$	258,712	$	354,500	4.39	%	$	102,350	$	145,850	3.90	%

$100 million repurchase facility	June 2019	June 2020	L + 1.75% to 2.00%	79,764		111,317		3.92	%	2,445		6,600		3.61	%

$75 million credit facility	Dec. 2018	N/A	L + 1.75% to 2.50%	24,901		36,799		3.89	%	—		—		—

$75 million credit facility	June 2019	N/A	L + 2.00%	2,894		4,700		4.15	%	8,999		16,000		3.61	%

$50 million credit facility	Feb. 2019	N/A	L + 2.00%	28,555		35,700		4.15	%	32,538		40,700		3.61	%

$50 million credit facility	Sept. 2019	Sept. 2021	L + 2.50% to 3.25%	—		—		—		3,581		4,625