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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]

Financial Performance - The company reported GAAP net income attributable to common stockholders of $005 per share for Q2 2025[9] - Distributable Earnings for Q2 2025 were also $005 per share of common stock[9] - A cash dividend of $006 per share of common stock was declared for the quarter[9] - Book Value Per Share of Common Stock was $327 as of June 30, 2025[9] Portfolio Composition and Activity - As of June 30, 2025, the company's loan portfolio totaled $924 million[9] - Approximately 906% of the loan portfolio was collateralized by multifamily assets[9] - The company experienced $634 million in loan payoffs and $36 million in loan fundings during the quarter[9] - The carrying value of the floating-rate CRE loan portfolio was $905 million as of June 30, 2025[20] Capital Structure - The company held $594 million in cash and cash equivalents as of June 30, 2025[9] - The company's leverage ratio decreased from 36x to 33x quarter-over-quarter[9] - Secured financings comprised 718% of the capital structure[32]

Exhibit 99.2 August 2025 Lument Finance Trust Q2 2025 Earnings Supplemental Disclaimer This presentation contains forward-looking statements within the meaning of Se Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Ac which reflect the current views of Lument Finance Trust, Inc. (NYSE: LFT) ("LFT," t or "us") with respect to, among other things, the Company's operations and finan can identify these forward-looking statements by the use of words such as "outlo "expects," "potent ...

PART I [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's total assets decreased to $998.4 million as of June 30, 2025, from $1.13 billion at December 31, 2024, with net income for Q2 2025 at $3.7 million, down from $4.6 million in Q2 2024, and H1 2025 net income at $3.2 million, a significant drop from $11.6 million in the prior year period [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased from $1.13 billion at year-end 2024 to $998.4 million as of June 30, 2025, driven by a decrease in commercial mortgage loans held-for-investment from $1.05 billion to $905.4 million, while total liabilities also decreased from $890.7 million to $766.9 million, and total equity saw a slight reduction from $237.9 million to $231.5 million Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $59,404 | $69,173 | | Commercial mortgage loans held-for-investment, net | $905,420 | $1,048,803 | | Real estate owned, held-for-investment, net | $23,818 | $0 | | **Total Assets** | **$998,387** | **$1,128,594** | | **Liabilities** | | | | Collateralized loan obligations and secured financings, net | $709,863 | $828,390 | | **Total Liabilities** | **$766,931** | **$890,695** | | **Total Equity** | **$231,456** | **$237,899** | - The company's consolidated balance sheets include significant assets and liabilities from consolidated variable interest entities (VIEs) As of June 30, 2025, assets of consolidated VIEs totaled **$934.1 million** and liabilities totaled **$712.8 million**[10](index=10&type=chunk) [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) For the second quarter of 2025, net interest income was $7.0 million, down from $9.5 million in Q2 2024, with net income attributable to common stockholders at $2.5 million, or $0.05 per share, compared to $3.4 million, or $0.07 per share, in the prior-year quarter, and for the six-month period, net income attributable to common stockholders was $0.8 million, a sharp decline from $9.2 million year-over-year Quarterly Performance Comparison (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Interest Income | $6,961 | $9,523 | | Provision for credit losses, net | ($95) | ($1,400) | | Net Income | $3,691 | $4,598 | | Net Income Attributable to Common Stockholders | $2,506 | $3,413 | | Basic and Diluted EPS | $0.05 | $0.07 | Six-Month Performance Comparison (in thousands, except per share data) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Interest Income | $14,695 | $22,515 | | Provision for credit losses, net | ($5,792) | ($3,177) | | Net Income | $3,168 | $11,579 | | Net Income Attributable to Common Stockholders | $798 | $9,209 | | Basic and Diluted EPS | $0.02 | $0.18 | [Consolidated Statements of Changes in Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) Total equity decreased from $237.9 million at the end of 2024 to $231.5 million at June 30, 2025, primarily driven by common and preferred stock dividends totaling $9.7 million, partially offset by net income of $3.2 million and minor common stock issuances - For the six months ended June 30, 2025, total equity decreased by approximately **$6.4 million** Key activities included net income of **$3.2 million**, offset by common stock dividends of **$7.3 million** and preferred stock dividends of **$2.4 million**[16](index=16&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash provided by operating activities was $7.7 million, net cash provided by investing activities was $116.0 million, and net cash used in financing activities was $134.5 million, resulting in a net decrease in cash of $10.8 million Six-Month Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $7,705 | $14,571 | | Net Cash Provided by Investing Activities | $115,958 | $162,272 | | Net Cash (Used in) Financing Activities | ($134,480) | ($161,768) | | **Net (Decrease) Increase in Cash** | **($10,816)** | **$15,075** | - A significant non-cash investing activity was the transfer of a senior loan to Real Estate Owned (REO) valued at **$23.96 million** during the first six months of 2025[20](index=20&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of the company's accounting policies and financial activities, including the structure of its commercial mortgage loan portfolio, the use of Collateralized Loan Obligations (CLOs) as VIEs for financing, management fee structures, and the methodology for calculating the allowance for credit losses under CECL [NOTE 3 - COMMERCIAL MORTGAGE LOANS HELD-FOR-INVESTMENT](index=13&type=section&id=NOTE%203%20-%20COMMERCIAL%20MORTGAGE%20LOANS%20HELD-FOR-INVESTMENT) The commercial mortgage loan portfolio, consisting entirely of senior secured floating-rate loans, decreased to a carrying value of $905.4 million as of June 30, 2025, from $1.05 billion at year-end 2024, with the allowance for credit losses increasing to $14.3 million from $11.3 million, and the portfolio's average risk rating remaining stable at 3.5, heavily concentrated in multifamily properties (90.6%) and geographically focused in the South (36.3%) and Southwest (32.8%) Loan Portfolio Characteristics | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Unpaid Principal Balance | $924.2M | $1,065.6M | | Carrying Value (net of allowance) | $905.4M | $1,048.8M | | Loan Count | 56 | 65 | | Weighted Average Coupon | 7.9% | 8.1% | | Allowance for Credit Losses | $14.3M | $11.3M | Loan Portfolio Risk Rating (by Outstanding Principal) | Risk Rating | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 2 (Low Risk) | $80.4M | $57.8M | | 3 (Moderate Risk) | $495.5M | $616.6M | | 4 (High Risk) | $224.2M | $292.8M | | 5 (Default Risk) | $124.1M | $98.3M | | **Total** | **$924.2M** | **$1,065.6M** | - As of June 30, 2025, there were **eight loans** with a risk rating of '5' (Default Risk) totaling **$124.1 million** in principal, an increase from **six loans** totaling **$98.3 million** at year-end 2024 Several loans were placed on non-accrual status or required specific allowances for credit losses due to monetary or maturity defaults[70](index=70&type=chunk)[71](index=71&type=chunk)[78](index=78&type=chunk) - The allowance for credit losses on loans held-for-investment increased from **$11.3 million** at the beginning of the period to **$14.3 million** at the end of June 2025, after a provision of **$5.8 million** and charge-offs of **$2.9 million**[75](index=75&type=chunk) [NOTE 4 - USE OF SPECIAL PURPOSE ENTITIES AND VARIABLE INTEREST ENTITIES](index=17&type=section&id=NOTE%204%20-%20USE%20OF%20SPECIAL%20PURPOSE%20ENTITIES%20AND%20VARIABLE%20INTEREST%20ENTITIES) The company utilizes two primary Variable Interest Entities (VIEs) for financing, the 2021-FL1 CLO and the LMF 2023-1 Financing, which LFT consolidates, holding $934.1 million in assets and $712.8 million in liabilities as of June 30, 2025, with all collateralization and coverage tests met Consolidated VIE Assets and Liabilities (June 30, 2025) | Account | Amount (in millions) | | :--- | :--- | | **Assets** | | | Loans held for investment, net | $902.9 | | Real estate owned, net | $23.8 | | **Total VIE Assets** | **$934.1** | | **Liabilities** | | | Collateralized loan obligations and secured financings | $709.9 | | **Total VIE Liabilities** | **$712.8** | - The 2021-FL1 CLO's reinvestment period expired in December 2023, meaning principal proceeds now reduce the outstanding debt The LMF 2023-1 Financing has a reinvestment period through July 2025[97](index=97&type=chunk)[98](index=98&type=chunk) [NOTE 5 - REAL ESTATE OWNED](index=19&type=section&id=NOTE%205%20-%20REAL%20ESTATE%20OWNED) As of June 30, 2025, the company held two multifamily properties as Real Estate Owned (REO) with a net book value of $23.8 million, acquired during the first half of 2025 through foreclosure on defaulted bridge loans within its consolidated CLO and financing vehicles, with a weighted average occupancy of approximately 73.5% - During the first six months of 2025, the company foreclosed on two multifamily bridge loans, resulting in the acquisition of REO assets One had a net carrying value of **$13.0 million** (net of **$2.4 million** CECL reserves) and the other had a net carrying value of **$11.0 million** (net of **$0.5 million** CECL reserves)[104](index=104&type=chunk)[105](index=105&type=chunk) [NOTE 7 - SECURED TERM LOAN](index=20&type=section&id=NOTE%207%20-%20SECURED%20TERM%20LOAN) The company has a $47.75 million Secured Term Loan maturing in February 2026, with its interest rate subject to step-ups, increasing to 7.50% on February 24, 2025, and to 7.85% on June 23, 2025, secured by substantially all assets of the credit parties and in compliance with all financial covenants as of June 30, 2025 Secured Term Loan Details | Metric | Value | | :--- | :--- | | Outstanding Balance (June 30, 2025) | $47.75M | | Maturity Date | February 14, 2026 | | Interest Rate (as of June 23, 2025) | 7.85% | [NOTE 10 - RELATED PARTY TRANSACTIONS](index=23&type=section&id=NOTE%2010%20-%20RELATED%20PARTY%20TRANSACTIONS) The company is externally managed by Lument Investment Management (Lument IM), to whom it paid management fees of $2.2 million and incentive fees of $0.7 million for the six months ended June 30, 2025, with the Manager waiving $453,222 in incentive fees for this period, and also reimbursing the Manager for certain operating expenses totaling $0.9 million for the first half of 2025 Fees Paid to Manager (Six Months Ended June 30) | Fee Type | 2025 | 2024 | | :--- | :--- | :--- | | Management Fees | $2,214,753 | $2,209,196 | | Incentive Fees (incurred) | $654,309 | $2,171,752 | | Reimbursable Expenses | $899,421 | $875,074 | - The Manager agreed to waive **$453,222** in incentive fees that would have otherwise been incurred for the six months ended June 30, 2025[129](index=129&type=chunk) [NOTE 13 - EQUITY](index=25&type=section&id=NOTE%2013%20-%20EQUITY) As of June 30, 2025, the company had 52.3 million common shares and 2.4 million Series A Preferred shares outstanding, with $9.4 million remaining authorized under its $10 million stock repurchase program, and declared common dividends of $0.14 per share and preferred dividends of $0.98438 per share during the first six months of 2025, also issuing 31,837 shares under an Independent Directors Stock-for-Fees Program Dividends Declared (H1 2025) | Stock Type | Total Dividend Amount | Per Share | | :--- | :--- | :--- | | Common Stock | $7,326,421 | $0.14 | | Series A Preferred Stock | $2,362,500 | $0.98438 | - The company has a stock repurchase program with **$9.4 million** remaining authorized as of June 30, 2025 No repurchases have been made since January 2016[150](index=150&type=chunk) [NOTE 16 - SUBSEQUENT EVENTS](index=29&type=section&id=NOTE%2016%20-%20SUBSEQUENT%20EVENTS) In August 2025, subsequent to the reporting period, the company acquired a multifamily property in San Antonio, TX, through foreclosure, where the associated loan, held in the 2021-FL1 CLO, had a risk rating of '5' and an outstanding principal balance of $26.6 million as of June 30, 2025 - In August 2025, the company foreclosed on a multifamily property in San Antonio, TX The loan had an outstanding principal of **$26.6 million** and was risk-rated '5'[166](index=166&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the challenging market environment characterized by high interest rates and slowing economic growth, which has increased credit risk in the portfolio, leading to a significant year-over-year decrease in net income due to lower net interest income and higher credit loss provisions on several risk-rated '5' multifamily loans, with the loan portfolio decreasing to $0.9 billion, financed primarily by $0.7 billion in non-mark-to-market CLOs, and key performance metrics for Q2 2025 including a net income of $0.05 per share and Distributable Earnings of $0.05 per share, with a declared dividend of $0.06 per share, and book value per common share declining to $3.27 [Recent Developments and Market Conditions](index=31&type=section&id=Recent%20Developments%20and%20Market%20Conditions) The market continues to face volatility from high inflation and interest rates, slowing economic growth, and geopolitical uncertainty, with elevated Federal Reserve rates posing challenges to commercial real estate values and borrower performance, although partially mitigated by interest rate caps on 75% of performing loans - Market volatility is driven by high inflation, elevated interest rates, and slowing economic growth, which adversely impacts the real estate industry and the company's borrowers[178](index=178&type=chunk) - The Federal Reserve has held the federal funds target range at **4.25% to 4.50%** through July 2025 The prolonged period of elevated rates may adversely affect borrowers and strain the operating cash flows of collateral properties[179](index=179&type=chunk)[182](index=182&type=chunk)[183](index=183&type=chunk) [Second Quarter 2025 Summary](index=31&type=section&id=Second%20Quarter%202025%20Summary) For the second quarter of 2025, the company reported net income attributable to common stockholders of $2.5 million, or $0.05 per share, and Distributable Earnings of $2.8 million, or $0.05 per share, declared a common dividend of $0.06 per share, saw book value per common share stand at $3.27, and experienced $63.4 million in loan payoffs while funding $3.6 million in new loan participations Q2 2025 Key Metrics | Metric | Value | | :--- | :--- | | Net Income per Share | $0.05 | | Distributable Earnings per Share | $0.05 | | Common Dividend per Share | $0.06 | | Book Value per Share | $3.27 | [Key Financial Measures and Indicators](index=32&type=section&id=Key%20Financial%20Measures%20and%20Indicators) The company uses Earnings per Share, Dividends Declared, Distributable Earnings, and Book Value per Share as key indicators, with Q2 2025 Distributable Earnings at $2.8 million ($0.05/share), reconciled from GAAP net income by excluding non-cash items, and book value per common share decreasing to $3.27 from $3.40 at the end of 2024, impacted by a CECL allowance of $0.27 per share Reconciliation of Net Income to Distributable Earnings (Q2 2025) | Item | Amount (in thousands) | | :--- | :--- | | Net income attributable to common stockholders | $2,506 | | Unrealized loss on MSRs | $36 | | Unrealized provision for credit losses | $95 | | Depreciation of REO | $139 | | Adjustment for income taxes | ($4) | | **Distributable Earnings** | **$2,772** | Book Value Per Share Calculation | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total stockholders' equity | $231.4M | $237.8M | | Less: Preferred stock | ($60.0M) | ($60.0M) | | Total common stockholders' equity | $171.4M | $177.8M | | **Book value per share** | **$3.27** | **$3.40** | [Results of Operations](index=41&type=section&id=Results%20of%20Operations) Comparing Q2 2025 to Q1 2025, net income increased from a loss of $1.7 million to a gain of $2.5 million, primarily due to a significantly lower provision for credit losses in Q2, while net interest income decreased slightly from $7.7 million to $7.0 million due to a smaller loan portfolio, and on a year-over-year basis for the six-month period, net income fell sharply from $9.2 million in H1 2024 to $0.8 million in H1 2025, driven by a $7.8 million decrease in net interest income and a $2.6 million increase in other expenses - The increase in net income from Q1 2025 to Q2 2025 was mainly driven by a decrease in the provision for credit losses, from a **$5.7 million** provision in Q1 to a **$0.1 million** provision in Q2[255](index=255&type=chunk)[254](index=254&type=chunk) - The decrease in net income for the six months ended June 30, 2025 compared to the same period in 2024 was primarily due to a **$7.8 million** reduction in net interest income and a **$2.6 million** increase in total other expense, largely from higher credit loss provisions[268](index=268&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) The company's primary liquidity sources are cash flow from operations, proceeds from stock issuance, and debt facilities, with unrestricted cash at $59.4 million as of June 30, 2025, and a total debt-to-equity ratio of 3.3:1 on a GAAP basis, facing heightened risk of using unrestricted cash to purchase defaulted assets out of its CLOs to satisfy coverage tests, though management believes current liquidity is sufficient for short-term needs, with long-term requirements dependent on additional financing - Unrestricted cash and cash equivalents decreased to **$59.4 million** at June 30, 2025, from **$69.2 million** at December 31, 2024[282](index=282&type=chunk) - The company's total debt to equity ratio was **3.3:1** as of June 30, 2025 The ratio of recourse debt to equity was much lower at **0.2:1**[283](index=283&type=chunk)[284](index=284&type=chunk) - There is a heightened possibility that the Company may need to use unrestricted cash to purchase defaulted mortgage assets out of its CLO structures to ensure compliance with interest and overcollateralization coverage tests[280](index=280&type=chunk) [Quantitative and Qualitative Disclosures about Market Risks](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risks) The company has indicated that this item is not applicable for this reporting period - Not applicable[299](index=299&type=chunk) [Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the most recently completed fiscal quarter - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[301](index=301&type=chunk) - No changes occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[302](index=302&type=chunk) PART II - Other Information [Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) The company is not involved in any material legal proceedings as of the reporting date - As of the report date, the company is not subject to any legal proceedings that it considers to be material[303](index=303&type=chunk) [Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors since the Annual Report on Form 10-K for the year ended December 31, 2025, with risks disclosed in the Q1 2025 10-Q incorporated by reference - No material changes to risk factors have occurred since the company's Annual Report on Form 10-K for the year ended December 31, 2025[304](index=304&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the period - None[305](index=305&type=chunk) [Defaults Upon Senior Securities](index=48&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the period - None[306](index=306&type=chunk) [Other Information](index=48&type=section&id=Item%205.%20Other%20Information) During the quarter ended June 30, 2025, no directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement during the quarter[308](index=308&type=chunk) [Exhibits](index=49&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the report, including CEO and CFO certifications and XBRL data files - The exhibits filed with the report include certifications from the CEO and CFO pursuant to Sarbanes-Oxley Sections 302 and 906, as well as XBRL Interactive Data Files[312](index=312&type=chunk)

Core Points - Lument Finance Trust, Inc. reported a GAAP net income of $2.5 million for Q2 2025, equating to $0.05 per share of common stock [1] - Distributable earnings for the same period were $2.8 million, also $0.05 per share of common stock [1] - The company will host a conference call on August 11, 2025, to discuss these financial results [2] Financial Performance - The reconciliation of GAAP to non-GAAP information shows net income attributable to common shareholders at $2,505,731, with adjustments leading to distributable earnings of $2,771,648 [10] - Distributable earnings are defined as GAAP net income adjusted for non-cash items and one-time events, providing a clearer picture of the company's operational performance [5][7] Company Overview - Lument Finance Trust focuses on investing in, financing, and managing a portfolio of commercial real estate debt investments, primarily in transitional floating rate commercial mortgage loans [11] - The company is externally managed by Lument Investment Management LLC [11]

Financial Data and Key Metrics Changes - For Q1 2025, the company reported a GAAP net loss of approximately $1.7 million or $0.03 per share, and distributable earnings of approximately $4 million or $0.08 per share [4][16] - Interest income decreased to $7.7 million from $9.4 million in Q4 2024, primarily due to declines in the SOFR benchmark rate and deleveraging of secured financings [16] - Total operating expenses were largely flat at $2.6 million in Q1 compared to $2.8 million in Q4 [17] - The total equity at the end of the quarter was approximately $232 million, with a book value of common stock at approximately $172 million or $3.29 per share, down from $3.40 [20] Business Line Data and Key Metrics Changes - The portfolio consisted of 61 floating rate note loans with an aggregate unpaid principal balance of approximately $1 billion, with 92% collateralized by multifamily properties [20] - The weighted average note floating rate was SOFR plus 355 basis points, with a weighted average remaining term of approximately 40 months [21] - The number of loans risk rated at three or better decreased to 60% from 64% in the prior quarter, while the weighted average risk rating remained flat at 3.5 [21] Market Data and Key Metrics Changes - The multifamily sector showed resilience despite low rent growth, with robust occupancy rates and a deceleration in multifamily construction starts due to financing scarcity and increased costs [9][10] - The company noted a favorable environment for multifamily investments due to steady demand and limited new supply, despite challenges faced by potential homebuyers [10] Company Strategy and Development Direction - The company is focused on active asset management, monitoring borrower performance, and market trends to maximize recovery values [11] - A proactive approach is taken to manage liquidity, with a considerable amount of unrestricted cash held on the balance sheet [12] - The company is exploring options for new secured financing to enhance flexibility and access the CRE CLO market [13] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about investment opportunities in 2025, despite ongoing economic uncertainties [9] - The company anticipates potential resolutions for problem loans in the next three to six months, depending on market conditions and sponsor relationships [41][43] - Management acknowledged the challenges faced by sponsors and the importance of reinvestment in assets to prevent deterioration [47] Other Important Information - The company executed several successful loan modifications and extensions to preserve value and enhance downside protection [11] - Specific reserves for credit losses increased to $11.1 million, reflecting a net increase of $7.3 million from the prior quarter [18] Q&A Session Summary Question: Can you characterize the pipeline today and the level of net originations needed to maintain current dividend capacity? - Management indicated confidence in origination levels, stating that there are assets available for deployment when capacity allows, despite recent market volatility [30][31] Question: Are there alternative financing options being considered before the next CLO? - Management confirmed that opportunities exist in both bank and private credit markets, which may provide more flexible interim financing options [36][38] Question: What is the outlook for problem loans under asset management? - Management sees potential for resolutions in the near term, emphasizing the importance of sponsor relationships and the need for reinvestment in assets [40][41] Question: Is the rise in nonaccruals primarily a cash flow issue for sponsors? - Management acknowledged that cash flow issues are prevalent, affecting both asset performance and sponsor investment in properties [47] Question: How do current market conditions compare to previous assessments of strong fundamentals? - Management maintained that while overall market conditions remain strong, specific assets have faced challenges due to sponsor performance and investment decisions [49][50]

Financial Data and Key Metrics Changes - For Q1 2025, the company reported a GAAP net loss of approximately $1.7 million or $0.03 per share, and distributable earnings of approximately $4 million or $0.08 per share [4][15] - Interest income decreased to $7.7 million from $9.4 million in Q4 2024, primarily due to declines in the SOFR benchmark rate and deleveraging of secured financings [15] - Total operating expenses were largely flat at $2.6 million in Q1 compared to $2.8 million in Q4 [16] - The total book value of common stock decreased to approximately $172 million or $3.29 per share from $3.40 as of December 31, driven by an increase in the allowance for credit losses [20] Business Line Data and Key Metrics Changes - The portfolio consisted of 61 floating rate note loans with an aggregate unpaid principal balance of approximately $1 billion, with 92% collateralized by multifamily properties [21] - The weighted average note floating rate was SOFR plus 355 basis points, with a weighted average risk rating remaining flat at 3.5 [22] Market Data and Key Metrics Changes - The multifamily sector showed resilience despite low rent growth, with robust occupancy rates and a deceleration in multifamily construction starts due to financing scarcity and increased construction costs [10] - The company noted a favorable environment for multifamily investments due to steady demand and limited new supply [10] Company Strategy and Development Direction - The company is focused on active asset management, monitoring borrower performance, and market trends to maximize recovery values [11] - A proactive approach is taken to manage liquidity, holding a considerable amount of unrestricted cash rather than deploying it into new loan assets [12] - The company is exploring options for new secured financing to enhance flexibility and access the CRE CLO market [13] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about investment opportunities in 2025, despite ongoing economic uncertainties [9] - The company anticipates potential volatility in the market but remains committed to preserving capital and maximizing risk-adjusted returns [11] Other Important Information - The company recognized a net increase in the allowance for credit losses of $5.7 million, with seven loans risk rated five, representing approximately 11% of the unpaid principal balance [17][22] - The unrestricted cash balance at the end of Q1 was $64 million, with effective leverage from securitizations at 77% [19] Q&A Session Summary Question: Can you characterize the pipeline today and the level of net originations needed to maintain current dividend capacity? - Management indicated that there are assets available for deployment and expressed confidence in maintaining origination levels despite recent market volatility [31][32] Question: Are there other financing options being considered before the next CLO? - Management confirmed that they are exploring both bank and private credit options for more flexible interim financing [36][37] Question: What is the outlook for problem loans and potential resolutions? - Management sees the potential for resolutions in the next three to six months, emphasizing the importance of sponsor relationships and the need for reinvestment in assets [40][41] Question: Is the rise in nonaccruals a cash flow issue for sponsors? - Management acknowledged that cash flow issues are prevalent, affecting both asset performance and sponsor investment [48][49] Question: How does the current market condition compare to previous strong fundamentals? - Management noted that while the overall market remains strong, some sponsors have not followed through on their commitments, leading to asset deterioration [50][51]

Financial Performance - The Company reported a GAAP net loss attributable to common stockholders of $0.03 per share for Q1 2025[9] - Distributable Earnings for Q1 2025 were $0.08 per share of common stock[9] - A cash dividend of $0.08 per share of common stock was declared for the quarter[9] - Book Value Per Share of Common Stock was $3.29 as of March 31, 2025[9] Portfolio Composition and Activity - As of March 31, 2025, 91.7% of the $1 billion loan portfolio was collateralized by multifamily assets[9] - The loan portfolio had a weighted average remaining initial term of 5 months and a weighted average note rate of SOFR + 3.55%[9] - The Company experienced $54.7 million of loan payoffs during the quarter, with 100% of those payoffs in multifamily properties[9, 22, 25] Capital Structure and Financing - As of March 31, 2025, the Company held $63.5 million in cash and cash equivalents, and the leverage ratio declined to 3.6x[9] - Secured financings include $489.6 million of investment grade notes issued through 2021-FL1 CLO and $284.8 million of investment grade notes issued through LMF 2023-1[9, 12] - The capital structure is composed of 73.5% secured financing, 16.3% common equity, 5.7% preferred equity, and 4.5% term loan[31] Portfolio Credit Quality - As of March 31, 2025, 89.3% of the Company's portfolio was performing, with 59.9% of the portfolio rated "3" (Moderate Risk) or better[29] - The portfolio weighted average risk rating was 3.5[9, 29]

```markdown [Company Overview](index=3&type=section&id=Company%20Overview) [Company Profile and Strategy](index=3&type=section&id=Company%20Profile%20and%20Strategy) LFT is an externally-managed REIT focused on commercial real estate debt, primarily multifamily, leveraging Lument's origination platform - The Company is an externally-managed REIT focused on investing in, financing, and managing a portfolio of commercial real estate debt investments[7](index=7&type=chunk) - LFT is managed by Lument Investment Management, LLC, an affiliate of ORIX Corporation USA, which is a subsidiary of the publicly traded ORIX Corporation[6](index=6&type=chunk)[7](index=7&type=chunk) - Key investment highlights include access to Lument's loan origination platform, a focus on middle-market multifamily debt, and the use of match-term, non-recourse, non-mark-to-market financing[6](index=6&type=chunk) [Q1 2025 Updates](index=4&type=section&id=Q1%202025%20Updates) LFT reported a Q1 2025 GAAP net loss of **$(0.03) per share**, with Distributable Earnings of **$0.08 per share** matching the dividend Q1 2025 Key Metrics | Category | Metric | Value | | :--- | :--- | :--- | | **Financial Results** | GAAP net loss per share | $(0.03) | | | Distributable Earnings per share | $0.08 | | | Quarterly dividend per common share | $0.08 | | | Book Value Per Share of Common Stock | $3.29 | | **Portfolio** | Loan Payoffs | $54.7 million | | | Multifamily Asset Concentration | 91.7% | | | Loan Portfolio Value | $1.0 billion | | | Weighted Average Risk Rating | 3.5 | | **Capitalization** | Leverage Ratio (Total Liabilities / Total Equity) | 3.6x | | | Cash and Cash Equivalents | $63.5 million | - The floating-rate CRE loan portfolio is primarily financed through two non-mark-to-market secured financings: the 2021-FL1 CLO and LMF 2023-1[8](index=8&type=chunk) [Financial Performance](index=5&type=section&id=Financial%20Performance) [Q1 2025 Balance Sheet Summary](index=5&type=section&id=Q1%202025%20Balance%20Sheet%20Summary) As of March 31, 2025, total assets were approximately **$1.06 billion**, liabilities stood at **$829.5 million**, and equity was **$232.0 million**, resulting in a **3.6x** leverage ratio Balance Sheet Summary (as of March 31, 2025) | (in thousands) | Amount | | :--- | :--- | | **Total assets** | **$1,061,517** | | Commercial mortgage loans held-for-investment (net) | $988,781 | | Cash and cash equivalents | $63,520 | | **Total liabilities** | **$829,469** | | Secured financings | $772,285 | | **Total equity** | **$232,048** | | **Total liabilities / total equity** | **3.6x** | | **Book Value Per Share of Common Stock** | **$3.29** | [Q1 2025 Income Statement Summary](index=6&type=section&id=Q1%202025%20Income%20Statement%20Summary) For Q1 2025, the company reported a GAAP net loss of **$1.7 million** or **$(0.03) per share**, with Distributable Earnings of **$4.0 million** or **$0.08 per share** covering the quarterly dividend Income Statement & Distributable Earnings (Three Months Ended March 31, 2025) | (in thousands, except per share data) | Amount | | :--- | :--- | | Net interest income | $7,735 | | Total other income (loss) | $(5,655) | | Net income attributable to common stockholders | $(1,708) | | **Net income per share** | **$(0.03)** | | **Distributable Earnings** | **$4,021** | | **Distributable Earnings per share** | **$0.08** | | **Dividend per share** | **$0.08** | [Earnings and Book Value Per Share Trends](index=7&type=section&id=Earnings%20and%20Book%20Value%20Per%20Share%20Trends) In Q1 2025, Distributable Earnings per share decreased to **$0.08** but covered the dividend, while book value per share continued its gradual decline to **$3.29** Quarterly Per Share Performance | Quarter | Distributable EPS | Dividends Per Share | Book Value Per Share | | :--- | :--- | :--- | :--- | | Q3 2024 | $0.10 | $0.08 | $3.48 | | Q4 2024 | $0.10 | $0.08 | $3.40 | | Q1 2025 | $0.08 | $0.08 | $3.29 | [Investment Portfolio](index=8&type=section&id=Investment%20Portfolio) [Portfolio Composition](index=8&type=section&id=Portfolio%20Composition) As of March 31, 2025, the **$1.0 billion** investment portfolio is **91.7%** concentrated in multifamily assets, with no hospitality, retail, or office loan exposure - The portfolio consists of floating-rate CRE loans with a carrying value of **$1.0 billion**[19](index=19&type=chunk) Portfolio Composition by Property Type (by Carrying Value) | Property Type | Percentage | | :--- | :--- | | Multifamily | 91.7% | | Seniors Housing & Healthcare | 7.7% | | Self Storage | 0.6% | - The company anticipates continuing its focus on investment opportunities within multifamily credit and does not currently own any hospitality, retail, or office loan assets[19](index=19&type=chunk) [Q1 2025 Loan Activity](index=9&type=section&id=Q1%202025%20Loan%20Activity) In Q1 2025, the company saw **$54.7 million** in multifamily loan payoffs and a **$5.7 million** provision for loan losses, decreasing the portfolio's carrying value to **$988.2 million** - The company experienced **$54.7 million** of loan payoffs during the quarter, entirely from the multifamily sector[20](index=20&type=chunk)[21](index=21&type=chunk) Q1 2025 Portfolio Activity (by Carrying Value) | (in millions) | Amount | | :--- | :--- | | Q4 2024 Portfolio | $1,048.8 | | Q1 2025 Payoffs / Sales | $(54.7) | | Provision for Loan Losses | $(5.7) | | Other Activity | $0.4 | | **Q1 2025 Portfolio** | **$988.2** | [Portfolio Credit](index=10&type=section&id=Portfolio%20Credit) As of March 31, 2025, performing loans decreased to **89.3%**, with the weighted average risk rating stable at **3.5**, and seven loans totaling **$108.4 million** assigned a high-risk '**5**' rating - As of March 31, 2025, **89.3%** of the company's portfolio was performing, with **59.9%** of the portfolio rated '**3**' (Moderate Risk) or better[25](index=25&type=chunk) Portfolio Credit Trends | Metric | Q4 2024 | Q1 2025 | Change | | :--- | :--- | :--- | :--- | | % Performing | 90.8% | 89.3% | Down | | Weighted Avg Risk Rating | 3.5 | 3.5 | Stable | - During Q1 2025, management applied a '**5**' risk-rating (highest risk) to seven loans with an aggregate principal value of **$108.4 million**[25](index=25&type=chunk) [Capital Structure and Interest Rate Sensitivity](index=11&type=section&id=Capital%20Structure%20and%20Interest%20Rate%20Sensitivity) [Q1 2025 Capital Structure Overview](index=11&type=section&id=Q1%202025%20Capital%20Structure%20Overview) The company's **$1.05 billion** capital structure is primarily composed of secured, non-recourse financing (**73.5%**) and equity (**22.0%**), avoiding margin call risk from warehouse facilities Capital Structure Composition as of 3/31/2025 | Component | Amount (in millions) | Percentage | | :--- | :--- | :--- | | Secured Financing | $822.1 | 73.5% | | Term Loan | $47.8 | 5.7% | | Preferred Equity | $60.0 | 5.7% | | Common Equity | $171.9 | 16.3% | | **Total Capitalization** | **$1,054.0** | **100.0%** | - The company does not utilize repurchase or warehouse facility financing, avoiding margin call risk from such lenders[28](index=28&type=chunk) - Primary financing sources are two secured financings (2021-FL1 CLO and LMF 2023-1), preferred stock, and a corporate term loan[28](index=28&type=chunk) [Net Interest Income Sensitivity](index=12&type=section&id=Net%20Interest%20Income%20Sensitivity) The company's **$1.01 billion** floating-rate loan portfolio has a net floating-rate asset exposure of **$237 million**, making net interest income sensitive to SOFR changes - The company has a net floating-rate asset exposure of **$237 million**, as its **$1.011 billion** in floating-rate assets exceeds its **$774 million** in floating-rate liabilities[30](index=30&type=chunk) Sensitivity of Net Interest Income Per Share to SOFR Changes | Change in SOFR | Impact on NII Per Share | | :--- | :--- | | +25 bps | +$0.01 | | -25 bps | -$0.01 | | -50 bps | -$0.02 | | -75 bps | -$0.03 | | -100 bps | -$0.03 | - **100%** of the loan portfolio is floating-rate and indexed to 30-day term SOFR[31](index=31&type=chunk) [Appendix](index=13&type=section&id=Appendix) [CRE Loan Portfolio Details](index=14&type=section&id=CRE%20Loan%20Portfolio%20Details) The appendix details the **61** CRE loans as of March 31, 2025, with a total unpaid principal balance of **$1,010.9 million** and an average LTV at origination of **72.43%** CRE Loan Portfolio Summary (as of 3/31/2025) | Metric | Value | | :--- | :--- | | Number of Loans | 61 | | Total Unpaid Principal Balance | $1,010,888,938 | | Weighted Average Note Spread | 3.55% | | Average Initial Term (months) | 40 | | Average As-Is LTV at Origination | 72.43% | [Consolidated Financial Statements](index=16&type=section&id=Consolidated%20Financial%20Statements) This section provides detailed consolidated financial statements, including balance sheets, income statements, and allowance for loan losses, for a comprehensive financial overview [Consolidated Balance Sheets](index=16&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets decreased to **$1.06 billion** and liabilities to **$829.5 million**, while the allowance for credit losses significantly increased to **$17.1 million** Balance Sheet Comparison (in millions) | Account | March 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | $1,061.5 | $1,128.6 | | Commercial mortgage loans, net | $988.8 | $1,048.8 | | Allowance for credit losses | $(17.1) | $(11.3) | | Total Liabilities | $829.5 | $890.7 | | Total Equity | $232.0 | $237.9 | [Consolidated Statement of Income](index=17&type=section&id=Consolidated%20Statement%20of%20Income) For Q1 2025, the company reported a net loss of **$0.5 million**, a significant decline from Q1 2024's **$7.0 million** net income, driven by lower net interest income and higher credit loss provisions Statement of Income Comparison (Three Months Ended) | (in millions) | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Net interest income | $7.7 | $13.0 | | Provision for credit losses, net | $(5.7) | $(1.8) | | Net (loss) income | $(0.5) | $7.0 | | Net (loss) income attributable to common stockholders | $(1.7) | $5.8 | | Basic and diluted (loss) income per share | $(0.03) | $0.11 | [Detailed Walk of Allowance for Loan Losses](index=18&type=section&id=Detailed%20Walk%20of%20Allowance%20for%20Loan%20Losses) The allowance for credit losses increased by **$5.7 million** in Q1 2025, rising from **$11.3 million** to **$17.1 million**, a significant increase in provisions year-over-year Allowance for Credit Losses (in millions) | | Three months ended March 31, 2025 | | :--- | :--- | | Beginning Balance | $11.32 | | Provision for credit losses | $5.74 | | **Ending Balance** | **$17.06** | [Reconciliation of Net Income to Distributable Earnings](index=19&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Distributable%20Earnings) This table reconciles the GAAP net loss of **$1.7 million** to Distributable Earnings of **$4.0 million** for Q1 2025, primarily by adding back the **$5.7 million** unrealized provision for credit losses Q1 2025 GAAP to Distributable Earnings Reconciliation (in thousands) | Line Item | Mar 31, 2025 | | :--- | :--- | | Net income attributable to common stockholders | $(1,708) | | Unrealized provision for credit losses | $5,698 | | Other Adjustments | $31 | | **Distributable Earnings** | **$4,021** | | **Distributable Earnings per share** | **$0.08** | [Capitalization and Book Value Reconciliation](index=20&type=section&id=Capitalization%20and%20Book%20Value%20Reconciliation) This section provides detailed calculations for the company's total capitalization and book value per common share as of March 31, 2025 [Detailed Walk of Capitalization](index=20&type=section&id=Detailed%20Walk%20of%20Capitalization) The reconciliation adjusts total GAAP liabilities and equity of **$1.061 billion** to arrive at the company's total capitalization of **$1.054 billion**, with specific adjustments for payables and capitalized costs - Total GAAP liabilities and equity of **$1.061 billion** are reconciled to a total capitalization figure of **$1.054 billion** by adjusting for certain payables and capitalized costs[42](index=42&type=chunk) [Book Value Per Share of Common Stock](index=21&type=section&id=Book%20Value%20Per%20Share%20of%20Common%20Stock) Book value per common share is calculated by subtracting preferred equity from total stockholders' equity and dividing by common shares outstanding, resulting in **$3.29 per share** Book Value Per Common Share Calculation (as of 3/31/2025) | (in thousands, except share data) | Amount | | :--- | :--- | | Total stockholders' equity | $232,048 | | ( - ) Preferred equity | $(60,000) | | Common equity | $171,949 | | Shares outstanding | 52,324,472 | | **Book Value Per Share of Common Stock** | **$3.29** | [Key Definitions](index=22&type=section&id=Key%20Definitions) This section defines "Book Value Per Share of Common Stock" and "Distributable Earnings," a non-GAAP measure excluding non-cash items used for performance evaluation and dividend determination - "Book Value Per Share of Common Stock" is defined as total stockholders' equity less the liquidation preference of preferred stock, divided by the number of common shares outstanding[46](index=46&type=chunk) - "Distributable Earnings" is a non-GAAP measure that adjusts GAAP net income by excluding non-cash items such as unrealized gains/losses and provisions for credit losses. It is a key metric for management and the board in evaluating performance and considering dividends[47](index=47&type=chunk)[48](index=48&type=chunk) ```