Core Viewpoint - Lument Finance Trust, Inc. has successfully closed a $663.8 million managed Commercial Real Estate Collateralized Loan Obligation (CRE CLO), enhancing its financing capabilities and investment portfolio [1][2]. Group 1: Financial Details - The company placed approximately $585.0 million of investment grade securities with institutional investors, providing term financing on a non-mark-to-market, non-recourse basis [1]. - The CRE CLO includes a 30-month reinvestment period, an advance rate of 88.1%, and a weighted average interest rate at issuance of Term SOFR plus 1.91%, before transaction costs [1]. - The initial collateral pool consists of 32 first lien floating rate mortgage loans secured by 49 multifamily and commercial real estate properties across the United States [2]. Group 2: Collateral and Management - A portion of the collateral was owned by Lument Finance Trust prior to the closing of LMNT 2025-FL3, while the remaining collateral was acquired from an affiliate of Lument Investment Management, LLC, at par plus accrued interest [2]. - The weighted average collateral spread was approximately 321 basis points over one-month SOFR [2]. - J.P. Morgan Securities LLC acted as the sole structuring agent, lead manager, and sole bookrunner for LMNT 2025-FL3, with Citizens JMP Securities, LLC serving as co-manager [3]. Group 3: Company Overview - Lument Finance Trust is focused on investing in, financing, and managing a portfolio of commercial real estate debt investments, primarily in transitional floating rate commercial mortgage loans with an emphasis on middle-market multi-family assets [5].

Core Viewpoint - Lument Finance Trust, Inc. has announced the pricing of a $663.8 million managed Commercial Real Estate Collateralized Loan Obligation (CRE-CLO), LMNT 2025-FL3, which is expected to provide term financing on a non-mark-to-market, non-recourse basis [1] Group 1: Financial Details - The company anticipates approximately $585.0 million of investment grade securities to be placed with institutional investors [1] - LMNT 2025-FL3 features a 30-month reinvestment period and an advance rate of 88.1% [1] - The weighted average interest rate at issuance is Term SOFR plus 1.91%, before transaction costs [1] Group 2: Redemption and Closing - On November 18, 2025, the company redeemed LFT 2021-FL1, which had $436.4 million of investment grade securities outstanding at the time of redemption [1] - LMNT 2025-FL3 is expected to close on or around December 10, 2025, subject to customary closing conditions [1] Group 3: Management and Structure - J.P. Morgan Securities LLC is acting as the sole structuring agent, lead manager, and sole bookrunner for LMNT 2025-FL3, while Citizens JMP Securities, LLC is acting as co-manager [2] - Lument Finance Trust is focused on investing in, financing, and managing a portfolio of commercial real estate debt investments, primarily in transitional floating rate commercial mortgage loans with an emphasis on middle-market multi-family assets [4]

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Financial Data and Key Metrics Changes - For Q3 2025, the company reported a GAAP net income of approximately $700,000 or $0.01 per share, and distributable earnings of approximately $1 million or $0.02 per share [11][4] - Net interest income for Q3 was $5.1 million, down from $7 million in Q2, primarily due to a decline in the average outstanding unpaid principal balance (UPB) of the portfolio and the reversal of certain accrued interest [12][11] - Total operating expenses decreased slightly to $3.1 million in Q3 from $3.2 million in Q2, mainly due to lower fees paid to the manager [12] Business Line Data and Key Metrics Changes - The loan portfolio consisted of 51 floating-rate loans with an aggregate UPB of approximately $840 million, with a weighted average floating rate of SOFR plus 355 basis points [17] - The weighted average risk rating remained flat at 3.5, with 46% of loans rated 3 or better, down from 63% in the previous quarter [17][18] Market Data and Key Metrics Changes - The multifamily sector showed stable fundamentals with modest rent growth and strong occupancy rates, supported by a slowdown in new supply [6] - Year-to-date issuance in the CRECLO market exceeded $25 billion, indicating healthy liquidity and investor confidence [6] Company Strategy and Development Direction - The company aims to redeploy capital into its core lending strategy focused on middle-market multifamily properties, emphasizing active asset management and resolving legacy positions efficiently [10] - The recent financing agreement with J.P. Morgan provides up to $450 million in aggregate advances, enhancing the company's flexibility to manage capital and pursue new financing opportunities [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in having a good handle on the portfolio and identified known issues, with no expectation of further downgrades unless market conditions change [23] - The company remains focused on asset management and cash preservation while looking to add new assets as market conditions stabilize [24] Other Important Information - The company recorded a provision for credit losses of approximately $900,000 and charged off $200,000 against the allowance for an asset that went REO in Q3 [13] - The total equity at the end of the quarter was approximately $230 million, with a total book value of common stock at approximately $170 million or $3.25 per share [15] Q&A Session Summary Question: Have the bulk of the issues in the portfolio been identified? - Management feels confident in their understanding of the portfolio and believes they have identified all known issues, with no expectation of further downgrades unless market conditions change [23] Question: What is the focus for portfolio growth in the coming quarters? - The company plans to focus on asset management while also looking to add new assets, supported by the new financing [24] Question: What is the timing for expectations for REO sales? - REO sales timing is asset-specific, with potential for quick disposals or longer-term holds depending on the asset's condition and management improvements [25][26] Question: Is there any change in the relationship with ORC USA? - There is no change in the relationship, and the acquisition of Hilco is not expected to create any material conflict with LFT's business [31] Question: How does the value increase of REO affect shareholders? - Any increase in value after foreclosure would benefit the shareholders of LFT, as the company owns the REO [32] Question: Can the new financing with J.P. Morgan be used to retire existing debt? - The J.P. Morgan line provides flexibility and liquidity that can indirectly support the retirement of existing debt, but not directly [43]

Financial Performance - Q3 2025 GAAP net income attributable to common stockholders was $001 per share[9] - Q3 2025 Distributable Earnings was $002 per share[9] - A cash dividend for the quarter of $004 per share of common stock was declared[9] - Book Value Per Share of Common Stock was $325 as of September 30, 2025[9] Portfolio Composition and Activity - As of September 30, 2025, the loan investment portfolio totaled $822 million[9] - Approximately 896% of the loan portfolio was collateralized by multifamily assets[9] - The loan portfolio had a weighted average note rate of SOFR + 355%[9] - The Company experienced $488 million of loan payoffs during the quarter, with 995% of payoffs from multifamily properties[9, 22] Capital Structure and Financing - As of September 30, 2025, the Company held cash and cash equivalents of $560 million[9] - The leverage ratio declined quarter-over-quarter from 33x to 32x[9] - The company entered into an uncommitted master repurchase agreement with JPMorgan Chase Bank, N A to provide up to $450 million to finance first mortgage loans[9]

Financial Performance - Q3 2025 GAAP net income attributable to common stockholders was $0.01 per share, while Distributable Earnings were $0.02 per share[7]. - Net interest income for the three months ended September 30, 2025, was $2,051,462, down 78.4% from $9,484,403 for the same period in 2024[38]. - Net income attributable to common stockholders decreased significantly from $5,095,684 in September 2024 to $658,597 in September 2025, a decline of approximately 87.1%[38]. - Distributable earnings for the three months ended September 30, 2025, were $995,520, down from $2,771,648 in the previous quarter, reflecting a decrease of approximately 64.0%[43]. - Dividends declared per share of common stock decreased from $0.08 in September 2024 to $0.04 in September 2025, a reduction of 50%[38]. Asset and Liability Management - As of September 30, 2025, total assets amounted to $955.7 million, while total liabilities were $725.6 million, resulting in total equity of $230.1 million[8]. - Total assets decreased from $1,128,594,378 as of December 31, 2024, to $955,719,357 as of September 30, 2025, representing a decline of approximately 15.3%[36]. - Total liabilities decreased from $890,695,346 as of December 31, 2024, to $725,647,056 as of September 30, 2025, a reduction of about 18.5%[36]. - Total stockholders' equity decreased from $237,799,532 as of December 31, 2024, to $230,072,301 as of September 30, 2025, a decline of approximately 3.2%[36]. Loan Portfolio Details - As of September 30, 2025, the Company's loan investment portfolio was valued at $822 million, with approximately 89.6% collateralized by multifamily assets[7][18]. - The total unpaid principal across the CRE loan portfolio is approximately $839.75 million, with an average spread of 3.55%[34]. - The average loan-to-value (LTV) ratio for the portfolio stands at 71.70%[34]. - The highest unpaid principal in the portfolio is $51.38 million for a multifamily loan in Dayton Beach, with a spread of 3.16%[33]. - Loan 31 has an unpaid principal of approximately $13.67 million, with a spread of 3.86% and an LTV of 65.70%[34]. - The portfolio includes loans with varying maturities, with the earliest closing date being December 16, 2021, and the latest being December 20, 2024[33][34]. - The average initial term for loans in the portfolio is approximately 47 months[34]. - The Company has a diversified multifamily loan portfolio across various states, including Texas, Florida, and New Jersey[33][34]. Risk and Credit Quality - The weighted average risk rating of the loan portfolio was 3.6, with 45.7% rated "3" (Moderate Risk) or better[24]. - The allowance for credit losses at the end of the period was $14,020,408, down from $14,252,268 at the beginning of the period, indicating a slight improvement in credit quality[41]. - The company reported a release of provision for credit losses of $29,660 for the three months ended September 30, 2025, compared to a provision of $(317,448) in the same period of 2024[38]. Capital Structure and Financing - The leverage ratio declined from 3.3x to 3.2x quarter-over-quarter[7]. - The Company held cash and cash equivalents of $56.0 million as of September 30, 2025[8]. - The floating-rate CRE loan portfolio was primarily financed through two secured financings totaling $671.3 million[7][26]. - 100% of the loan portfolio is indexed to the 30-day term SOFR, indicating a complete floating-rate exposure[30]. - The sensitivity analysis indicates a net exposure of $840 million, with potential changes in interest rates affecting net interest income per share[29]. Dividend and Shareholder Returns - The Company declared a cash dividend of $0.04 per share of common stock for the quarter[7].

Financial Performance - Net income attributable to common stockholders was $0.7 million, or $0.01 per share of common stock[196]. - Distributable Earnings amounted to $1.0 million, or $0.02 per share of common stock[196]. - The company reported a net income attributable to common stockholders of $658,597 for the three months ended September 30, 2025, compared to $2,505,731 for the previous quarter[204][209]. - For the three months ended September 30, 2025, net income attributable to common stockholders was $658,597, a decrease from $2,505,731 for the three months ended June 30, 2025[272][274]. - For the nine months ended September 30, 2025, the net income attributable to common stockholders was $1,456,802, a decrease of 89.8% from $14,304,312 for the same period in 2024[287]. - Net interest income for the three months ended September 30, 2025, was $5,051,462, down from $6,960,779 in the previous quarter, primarily due to a $61.2 million decrease in the weighted-average principal balance of the loan portfolio[275]. - Net interest income decreased from $31,999,947 in the nine months ended September 30, 2024 to $19,746,775 in 2025, primarily due to a $269.1 million decrease in the weighted-average principal balance of the loan portfolio[288]. - Total expenses for the three months ended September 30, 2025, were $3,077,163, slightly lower than $3,156,065 for the three months ended June 30, 2025[272]. - The company recognized a provision for credit losses of $5,762,769 for the nine months ended September 30, 2025, compared to $3,494,024 for the same period in 2024[286]. - The company experienced a loss of $133,562 in other income and expense for the three months ended September 30, 2025, compared to a loss of $118,025 in the previous quarter[280]. Loan Portfolio and Financing - The senior loan portfolio is $0.8 billion, 100% floating rate with an average spread to 30-day term SOFR of 3.55%[196]. - Multifamily assets represent 89.6% of the loan portfolio[196]. - As of September 30, 2025, 92.7% of the commercial mortgage loans in the portfolio were current as to principal and interest[197]. - Non-mark-to-market financing was $0.7 billion as of September 30, 2025, representing 100% of secured financings[191]. - 60.6% of performing loans have interest rate caps with a weighted-average strike price of 2.27%[195]. - The company acquired 29 loans and 17 funded loan advances with an initial aggregate unpaid principal balance of $473.1 million and an aggregate purchase discount of $8.1 million[199]. - The balance of commercial mortgage loans held-for-investment was $821,843,480, down from $1,048,803,078 at December 31, 2024[212]. - The weighted average coupon for loans held-for-investment as of September 30, 2025, was 7.8%, with a weighted average remaining term of 1.3 years[212][213]. - The company secured a total loan commitment of $978,521,791 with an average loan-to-value (LTV) ratio of 71.7% across its multifamily properties[217]. - The average loan per unit is $151,630, with the highest unit loan amount reaching $269,852 in Chicago, IL[217]. - The company completed the 2021-FL1 CLO, issuing $903.8 million in total CLO notes, with $833.8 million being investment grade[250]. - On July 12, 2023, the company secured $386.4 million in financing through LMF 2023-1 Financing, with a weighted average spread of approximately 314 basis points over 30-day term SOFR[251]. - As of September 30, 2025, the principal value of collateralized loan obligations was $836.1 million, with a carrying value of $819.1 million and a weighted average coupon of 7.77%[252]. Real Estate Owned (REO) and Credit Losses - The company has a total of $59,469,749 in real estate owned across various multifamily properties[217]. - At September 30, 2025, the company's Real Estate Owned (REO) assets totaled $49.3 million for held-for-investment properties and $8.9 million for held-for-sale properties[241]. - The weighted average occupancy rate of the company's REO properties was approximately 73.5% as of September 30, 2025[245]. - The allowance for credit losses as of September 30, 2025, was $14,020,408, impacting the carrying value of loans held-for-investment[212][214]. - The company identified a loan in Colorado Springs, CO, with an unpaid principal value of $10.3 million requiring a specific allowance for credit losses of $1.3 million[221]. - The company reported no impaired loans, non-accrual loans, or loans in maturity default other than the identified loan as of September 30, 2025[220]. - The company identified a loan in Tallahassee, FL, with an unpaid principal value of $17.0 million, requiring a specific allowance for credit losses of $2.9 million due to monetary default[227]. - The company continues to work with borrowers to address issues as they arise while seeking to preserve the credit attributes of its loans[238]. - The company incurred management and incentive fees of $3,515,799 for the nine months ended September 30, 2025, a decrease from $5,507,768 in 2024[290]. Dividends and Liquidity - The company intends to continue making regular quarterly distributions to common stockholders, with a cash dividend rate of $0.04 per share for Q3 2025 declared on September 16, 2025[315]. - The company has historically made regular monthly distributions but switched to quarterly distributions starting from Q3 2018[314]. - If taxable income is not fully paid by year-end, the company may declare a special dividend to meet distribution requirements[315]. - The company believes that net proceeds from prior equity sales, combined with cash flow from operations and available borrowing capacity, will be sufficient to meet anticipated short-term liquidity requirements[308]. - Long-term liquidity and capital resource requirements will depend on obtaining additional debt financing and equity capital, including long-term credit facilities and public or private offerings of equity or debt securities[309]. - To maintain REIT qualification, the company must distribute at least 90% of its "REIT taxable income," limiting its ability to retain earnings for operations[310]. - As of September 30, 2025, the company had unrestricted cash and cash equivalents of $56.0 million, down from $69.2 million as of December 31, 2024[301]. - The total debt to equity ratio was 3.1:1 on a GAAP basis as of September 30, 2025, with $669.8 million in non-recourse liabilities from consolidated CLOs[302].

Core Viewpoint - Lument Finance Trust, Inc. reported its third quarter results, showing a GAAP net income of $0.7 million, or $0.01 per share, and distributable earnings of $1.0 million, or $0.02 per share of common stock [1]. Financial Performance - GAAP net income attributable to common shareholders for Q3 2025 was $0.7 million [1]. - Distributable earnings for the same period were reported at $1.0 million [1]. - The company will host a conference call on November 13, 2025, to discuss these financial results [2]. Non-GAAP Financial Measures - Distributable earnings are defined as GAAP net income adjusted for certain non-cash items and one-time events, providing a clearer picture of the company's operational performance [5][8]. - The calculation of distributable earnings excludes unrealized provisions for credit losses, with loan losses recognized when deemed non-recoverable [6][9]. Company Overview - Lument Finance Trust, Inc. focuses on investing in, financing, and managing a portfolio of commercial real estate debt investments, primarily in transitional floating rate commercial mortgage loans [11].

Group 1 - The article emphasizes a long-only investment strategy that evaluates companies from an operational and buy-and-hold perspective, focusing on long-term earnings power and competitive dynamics rather than market-driven price actions [1] - Quipus Capital's approach suggests that most investment calls will be holds, indicating a cautious stance in a bullish market, with only a small fraction of companies deemed suitable for buying at any given time [1] - The hold articles are intended to provide valuable information for future investors and introduce a healthy skepticism towards the prevailing market optimism [1] Group 2 - The article does not disclose any stock, option, or derivative positions in the companies mentioned, nor does it plan to initiate any such positions in the near future [2] - The opinions expressed in the article are solely those of the author and are not influenced by any business relationships with the companies discussed [2] - Seeking Alpha clarifies that past performance does not guarantee future results and that the views expressed may not reflect the overall stance of the platform [3]

Financial Data and Key Metrics Changes - For Q2 2025, the company reported net income to common stockholders of approximately $2.5 million or $0.05 per share, and distributable earnings of approximately $2.8 million or $0.05 per share [12] - Q2 net interest income was $7 million, a decline from $7.7 million recorded in Q1 [12] - Total operating expenses increased to $3.2 million in Q2 from $2.6 million in Q1 [13] - The company's total equity at the end of the quarter was approximately $231 million, with a total book value of common stock at approximately $171 million or $3.27 per share, decreasing from $3.29 per share as of March 31 [18] Business Line Data and Key Metrics Changes - The company experienced $63 million in loan payoffs and advanced new loan financings of $3.6 million during Q2 [19] - The total loan exposure in the portfolio consisted of 56 floating rate loans with an aggregate unpaid principal balance of approximately $924 million [19] - The weighted average risk rating remained flat at 3.5, with approximately 63% of the loans rated three or better compared to 60% in the prior quarter [19] Market Data and Key Metrics Changes - The multifamily sector conditions are broadly stable, with modest to flat rent growth and a rebound in national occupancy as new supply slows [7] - The CRE CLO market saw over $17 billion in new issuances in 2025 compared to approximately $6.5 billion in 2024, indicating improving liquidity and investor appetite [8] Company Strategy and Development Direction - The company focuses on maximizing value for shareholders through positive asset management outcomes and a portfolio refinancing plan [10] - The core investment strategy remains unchanged, leveraging the managers' origination and asset management platforms as a competitive advantage [10] Management Comments on Operating Environment and Future Outlook - The US economic environment is mixed but generally stable, with moderating inflation and potential for healthier commercial real estate capital flows [6][7] - The company maintains a conservative liquidity posture, holding a significant balance of unrestricted cash to manage challenged credits [9] Other Important Information - The company recognized approximately $400,000 of exit fees during Q2 compared to approximately $750,000 in the prior quarter [12] - Specific credit reserves were set to $7.6 million as of June 30, a decrease of $3.5 million versus the prior quarter [15] Q&A Session Summary - There were no questions during the Q&A session [23]