Bridge Financing and Loan Portfolio - Lument closed over $198 million in balance sheet bridge financing in December 2024, supporting the lease-up, acquisition, and construction of seven multifamily properties across six states, totaling more than 1,500 units [1] - An additional $170 million in bridge loans are under application and expected to close in early 2025 [1][2] - Lument's bridge program targets loans of $10 million and up, secured by multifamily, affordable housing, or seniors housing properties, with interest-only, floating-rate loans ranging from six to 36 months [3] Borrower Interest and Market Demand - Borrower interest increased significantly during the fourth quarter of 2024, with expectations of further demand as new construction transitions towards stabilization [2] - The bridge program is seen as an effective way to support clients' strategic objectives during market evolution, with a seamless transition into permanent financing [3] Loan Portfolio and Management - Lument Investment Management manages a nearly $1.2 billion loan portfolio as of September 30, 2024, with approximately 93.2% collateralized by multifamily assets [4] - The company serves as the external manager and advisor to Lument Finance Trust, Inc, a publicly traded REIT focused on commercial real estate debt investments [4] Company Overview - Lument, a subsidiary of ORIX Corporation USA, is a national leader in commercial real estate finance, offering a comprehensive set of capital solutions for multifamily, affordable housing, seniors housing, and healthcare real estate [5] - The company provides Fannie Mae, Freddie Mac, FHA, USDA, and balance sheet bridge financing, along with a full range of capital markets lending products and real estate advisory solutions [5] - Lument has over 600 employees in more than 30 offices across the United States [5] Specific Loan Examples - $60 million lease-up refinance for a multifamily property in Olympia, WA [6] - $37 million lease-up refinance for a multifamily property in Macon, GA [6] - $31 million phased lease-up refinance for a build-to-rent (BTR) property in Dayton, OH [6] - $25 million phased lease-up refinance for a build-to-rent (BTR) property in Groveport, OH [6] - $22 million timing refinance for an affordable housing property in Miami, FL [6] - $17 million lease-up acquisition financing for a multifamily property in Lafayette, IN [6] - $6 million timing refinance for an age-restricted multifamily property in Bellflower, CA [6]

Group 1 - Lument Finance Trust, Inc. declared a cash dividend of $0.08 per share for the fourth quarter of 2024 and a one-time special cash dividend of $0.09 per share due to real estate investment trust tax considerations, both payable on January 15, 2025 [1] - The Company also announced a cash dividend of $0.4921875 per share of 7.875% Cumulative Redeemable Series A Preferred Stock, payable on January 15, 2025 [2] - LFT focuses 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 [3]

Core Viewpoint - Lument Finance (LFT) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which are crucial for stock price movements [1][2][4]. Earnings Estimates and Stock Performance - The Zacks rating system is based on changes in earnings estimates, which have a strong correlation with near-term stock price movements [3][5]. - For the fiscal year ending December 2024, Lument is expected to earn $0.43 per share, reflecting a 65.4% increase from the previous year [7]. - Over the past three months, the Zacks Consensus Estimate for Lument has increased by 3.2% [7]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [6]. - Lument's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [9].

Financial Data and Key Metrics Changes - For Q3 2024, the company reported GAAP net income of approximately $5.1 million or $0.10 per share, with distributable earnings also at $0.10 per share [6][15] - Net interest income for Q3 was $9.5 million, largely flat compared to Q2 2024 [15] - Total operating expenses decreased to $2.9 million in Q3 from $3.5 million in Q2, primarily due to lower accrual of incentive fees [17] - The company's total equity at the end of the quarter was approximately $243 million, with a book value of common stock at approximately $183 million or $3.50 per share, slightly up from $3.48 per share as of June 30 [22] Business Line Data and Key Metrics Changes - The portfolio consisted of 75 floating rate loans with an aggregate unpaid principal balance of approximately $1.2 billion, with 93% collateralized by multifamily properties [23] - The weighted average risk rating of the portfolio remained steady at 3.6, with four loans rated five, representing approximately 7% of the total portfolio [26][27] Market Data and Key Metrics Changes - The company noted stability in asset cap rates and a modest increase in property acquisition activity as investors returned to the market [8] - The weighted average cost of funds for the CLO was SOFR plus 164 basis points, with an effective advance rate of approximately 79% [13][22] Company Strategy and Development Direction - The company aims to continue delivering stable dividends by focusing on multifamily credit and leveraging the manager's origination pipeline [9] - Securitization via CLO remains a potential financing path, with careful consideration of alternatives to align with the overall financing strategy [14] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the US economic outlook, citing signs of cooling inflation and low unemployment [7] - The company believes it has likely reached peak stress in the multifamily credit market, with expectations for continued demand and rent increases despite higher rates [77][79] Other Important Information - The company experienced $51 million in loan payoffs during the quarter and quickly redeployed this capital into two new multifamily loan assets [10][23] - The company maintained its specific loss reserves at approximately $900,000, with no additions deemed necessary during the quarter [21] Q&A Session Summary Question: Visibility into the pipeline after quarter-end and potential delays from sponsors - Management acknowledged uncertainty post-election but noted that while some sponsors may delay projects, there remains an expectation for business to be done in the coming year [31][36] Question: Clarification on CLO financing costs and market conditions - Management confirmed the current CLO cost of funds and indicated that while attractive, it is not permanent as the company deleverages [41][42] Question: Expectations for repayment and timing of new CLO transactions - Management indicated that repayment activity has been choppy but expects to see a return to historical norms, with potential for a new CLO transaction in the first half of 2025 [45][50] Question: Credit outlook and peak stress in multifamily credit - Management believes peak stress has likely been reached, with known issues being manageable and a positive outlook for the multifamily market over the next three to five years [73][79] Question: Factors affecting reinvestment activity - Management stated that reinvestment activity is directly correlated to loan payoffs, and the current lack of reinvestment is due to fewer payoffs and the deleveraging of existing CLOs [81][82]

Core Insights - Lument Finance (LFT) reported revenue of $9.49 million for the quarter ended September 2024, a decrease of 0.6% year-over-year, with EPS at $0.10 compared to $0.11 in the same quarter last year [1] - The reported revenue exceeded the Zacks Consensus Estimate of $9.06 million by 4.74%, while the EPS met the consensus estimate [1] Financial Performance Metrics - Servicing income, net was $0.06 million, surpassing the average estimate of $0.05 million from two analysts [3] - Net interest income was reported at $9.48 million, below the average estimate of $9.81 million from two analysts [3] - Total Other income (loss) was -$0.30 million, significantly lower than the average estimate of $0.05 million from two analysts [3] Stock Performance - Lument's shares have returned -1.2% over the past month, contrasting with the Zacks S&P 500 composite's increase of +3.3% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Lument Finance (LFT) came out with quarterly earnings of $0.10 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.11 per share a year ago. These figures are adjusted for non-recurring items.A quarter ago, it was expected that this real estate investment trust would post earnings of $0.11 per share when it actually produced earnings of $0.09, delivering a surprise of -18.18%.Over the last four quarters, the company has surpassed consensus EPS estimates just once.Lument, whi ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ____________ Commission File No. 001-35845 FINANCE TRUST LUMENT FINANCE TRUST, INC. (Exact name of registrant as specified in its charter) Maryland 45-4966 ...

NEW YORK, Nov. 12, 2024 /PRNewswire/ -- Lument Finance Trust, Inc. (NYSE: LFT) ("we", "LFT" or "the Company") today reported its third quarter results. GAAP net income attributable to common shareholders for the third quarter was $5.1 million, or $0.10 per share of common stock.  Distributable earnings for the third quarter were $5.5 million, or $0.10 per share of common stock. The Company has also issued a detailed presentation of its results, which can be viewed at www.lumentfinancetrust.com.Conference Ca ...

Core Viewpoint - Lument Finance Trust's 2Q24 results indicate a shrinking loan book and increasing loan loss provisions, leading to a cautious outlook on future earnings despite an attractive earnings yield of approximately 14% [1][2][10] Financial Performance - Lument's 1H24 results showed an increase in loan book size compared to 1H23, attributed to nearly $320 million in debt issuance and an additional $70 million in equity investment, totaling around $400 million from a base of about $1 billion [3] - Net interest income grew to $22.5 million in 1H24 from $11.75 million, aided by a higher average Secured Overnight Financing Rate (SOFR) [5][6] - The company's net loan assets stood at $1.187 billion, while financial debt was reported at $1.048 billion [4] Loan Quality and Distress - The average credit rating of Lument's loan book deteriorated from 2.3 in 2Q22 to 3.6 in 2Q24, with 3.5% of loans rated below 3 [7] - In 2Q24, five loans were categorized as defaulted, amounting to $84 million in principal, with total loan loss provisions at only $9 million [8] Future Earnings and Financing - The maturity of the 2021 CLO, which has completed its reinvestment period, is expected to lead to a significant decrease in the loan book size, with net repayments anticipated at $80 to $90 million [9] - The company faces challenges in securing new financing, as the CLO market has been inactive, complicating efforts to replace the 2021 CLO [9] - Future earnings will be heavily influenced by the terms of new financing, which are currently uncertain [2][10] Valuation and Market Position - Lument currently offers a 13% earnings yield, but expected developments may lead to a decrease in yield over the next year [10] - The stock trades at a discount to book value, with a market cap of $130 million versus $180 million in equity, reflecting the risks associated with its loan portfolio [10] - Overall, the valuation is considered fair, but the lack of clear upside potential leads to a recommendation to hold the stock [10]

Lument Finance (LFT) came out with quarterly earnings of $0.09 per share, missing the Zacks Consensus Estimate of $0.11 per share. This compares to earnings of $0.04 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -18.18%. A quarter ago, it was expected that this real estate investment trust would post earnings of $0.13 per share when it actually produced earnings of $0.15, delivering a surprise of 15.38%. Over the last four ...