For the quarter ended March 31, locally based Arbor reported netincome for the quarter of $9.7 million, or $0.58 per basic anddiluted common share, compared to net income for the quarter endedMarch 31, 2004 of $3.1 million, or $0.38 per basic and dilutedcommon share. During the quarter, Arbor originated eleven loans andinvestments totaling $244 million and total revenues were $23.5million, an increase of 187% from the first quarter of 2004. Of thenew loans and investments, six were mezzanine loans totaling $128million, two were bridge loans totaling $60 million, two werejunior participating interests totaling $50 million and one was apreferred equity investment of $6 million.

Last year's IPO provided a "solid foundation for futureperformance," Kaufman said. "Common equity is our most preciousasset." He believes that despite aggressive competition, Arbor cancontinue at its current level in its national portfolio and stillhave adequate growth. "Our philosophy has been that we won't make aloan unless we're willing to own the asset." The pipeline is goodand filled with repeat buyers, he added.

Diversification is one key for Arbor, particularly in itsfinancing sources. Kaufman pointed out the firm has made progressin "diversifying and stabilizing our financing sources. With theaddition of a $305 million CDO debt facility, a new $50-millionsecured financing facility and the issuance of $27 million oflong-term junior subordinated notes, we believe we are wellpositioned to finance future growth of the portfolio."

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