LFT

Image source: The Motley Fool. Friday, Aug. 14, 2026 at 8:30 a.m. ET CEO - Jim Flynn CFO - Jim Briggs President - Greg Calvert Portfolio Manager - Zach Halpern Investor Relations - Andrew Tsang Operator: Good morning, and thank you for joining the Lument Finance Trust Second Quarter 2026 Earnings Call. Today's call is being recorded and will be made available via webcast on the company's website. I would now like to turn the call over to Andrew Tsang with Investor Relations at Lument Investment Management. Please go ahead. Andrew Tsang: Good morning, everyone. Thank you for joining our call to discuss Lument Finance Trust's Second Quarter 2026 Financial Results. With me on the call today are Jim Flynn, our CEO; Jim Briggs, our CFO; Greg Calvert, our President; and Zach Halpern, our Portfolio Manager. Last evening, we filed our 10-Q with the SEC and issued a press release to provide details on our recent financial results. We also provided a supplemental earnings presentation, which can be found on our website. Before handing the call over to Jim Flynn, I'd like to remind everyone that certain statements made during the course of this call are not based on historical information and may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. These results and uncertainties are discussed in the company's reports filed with the SEC, in particular, the Risk Factors section of our Form 10-K and Form 10-Qs. It is not possible to predict or identify all such risks, and listeners are cautioned not to place undue reliance on these forward-looking statements. The company undertakes no obligation to update any of these forward-looking statements. Further, certain non-GAAP financial measures will be discussed on this conference call. A presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Reconciliations of these non-GAAP financial measures to the most comparable measures prepared in accordance with GAAP can be accessed through our filings with the SEC. For the second quarter of 2026, we reported a GAAP net loss of $0.18 and distributable loss of $0.10 per share of common stock. In June, we had declared a quarterly dividend of $0.04 per share with respect to the second quarter, in line with the prior quarterly dividend. I'll now turn the call over to Jim Flynn. Please go ahead. James Flynn: Thank you, Andrew. Good morning, everyone. Welcome to the Lument Finance Trust's earnings call for the second quarter of 2026. We appreciate you joining us today. We also wanted to express our appreciation to our investors for their patience, support and continued engagement as we work through issues in the legacy portfolio. We recognize the challenges that the company has faced, and we remain focused every day on improving outcomes for our shareholders. Looking at the economic and market conditions in the country today, conditions remain generally stable. There is continued uncertainty around monetary policy weighing on investment activity. Recent economic data has increased uncertainty regarding the path of the Fed, including whether short-term rates may remain elevated for longer than previously expected. Long-term rates also remain elevated, continuing to pressure transaction activity and real estate valuations. Within multifamily, fundamentals continue to improve as the sector moves beyond peak supply levels. Rent growth remains modest, long-term demand drivers, including housing affordability challenges, continue to support the multifamily rental sector. Capital markets remain active with liquidity available across warehouse securitization and institutional lending channels strong through the first half of this year. The CRE CLO market continues to be an important source of financing for multifamily mortgage assets and investor demand for floating rate credit remains relatively strong, particularly for repeat issuers with proven track records. Active asset management remains our highest priority. We continue to work closely with borrowers and operating partners to maximize outcomes across both performing and nonperforming investments. We continue to proactively evaluate resolution strategies for legacy assets while maintaining a disciplined approach to credit. While the market for certain legacy assets remain soft, we are beginning to see an acceleration in resolution activity, including both negotiated sales and other paths to monetize or stabilize challenged positions. We continue to work tirelessly to resolve these assets in a manner that protects value, improves liquidity and positions the company to reinvest capital efficiently. On the portfolio side, during the quarter, we were intentional about managing liquidity on our balance sheet to support ongoing portfolio management efforts while selectively redeploying CLO capital when available. We generally held on to cash from nonsecuritized asset loan payoffs. Our financing profile remains well positioned following the refinancing initiatives completed earlier this year. We believe our current liquidity position remains appropriate to support asset resolution activities, portfolio management and selective capital deployment opportunities. As capital becomes available through resolutions and repayments, our objective is to redeploy it efficiently into investments that meet our credit standards and are expected to be accretive to earnings. We're being disciplined on timing and asset selection, but we are also focused on ensuring that the company's capital is put back to work as efficiently and quickly as possible. Our Board of Directors recently approved a 10-for-1 reverse stock split of our common stock after having determined that such actions were in the best interest of the company and its stockholders, providing flexibility to maintain compliance with the applicable New York Stock Exchange listing requirements and support an efficient public market for the company's common stock. The reverse stock split is expected to become effective at the close of business on Wednesday, September 9, and the company's common stock is expected to begin trading on a split-adjusted basis on the New York Stock Exchange at the opening of trading on Thursday, September 10, under the existing ticker symbol LFT. The reverse stock split will affect all stockholders uniformly and will not alter any stockholders' percentage ownership interest in the company, except with respect to treatment of fractional shares, which will be paid out in cash. We have also posted for our investors a reverse stock split FAQ document on our website. We believe the reverse stock split is an important step toward reducing technical pressure on the public stock price and supporting a more orderly market for our shares. While this action does not change the underlying economics of the company, we believe it helps address one of the external pressures on the stock and allows investors to focus more clearly on the value of the portfolio, our asset resolution progress and our earnings trajectory. Our priorities remain unchanged. We are committed to resolving legacy assets, protecting book value and thoughtfully redeploying capital into high-quality multifamily investments. We appreciate the continued patience and support of our investors and capital partners as we execute on this plan. While we recognize the resolution of our nonperforming and REO assets remains challenging, we are seeing improving momentum in deal resolutions and sales activity. As those resolutions occur, we intend to reinvest capital efficiently and on a disciplined basis. We remain committed to fully deploying our capital in 2027, which we believe will be an important driver of improved earnings and over time, enhance shareholder value. We recognize there is still work to do and the timing of certain MPL and REO resolutions remain subject to market conditions. That said, we believe the company has the support of its capital partners, a clear path to redeployment and the platform capabilities necessary to move forward constructively. With that, I'd like to turn the call over to Jim Briggs, who will provide details regarding our financial results. Jim? James Briggs: Thanks, Jim. Good morning. Last night, we filed our quarterly report on Form 10-Q and provided a supplemental investor presentation on our website, which we'll be referring to during our remarks. Supplemental investor presentation has been uploaded to the webcast as well for your reference. On Pages 4 through 7 of the presentation, you'll find key updates and an earnings summary for the quarter. For the second quarter of 2026, we reported net loss to common stockholders of $9.2 million or $0.18 per share. We reported a distributable loss of $5.3 million or $0.10 per share. There are a few Q2 P&L items I'd like to highlight. Our Q2 net interest income was $4.5 million, a sequential decline from $5.7 million recorded in Q1. This was primarily driven by a lower average performing loan portfolio balance quarter-over-quarter as we chose to build liquidity during the quarter rather than reinvest principal repayments from loans held outside of CLO. The ending outstanding UPB of the total portfolio was approximately $1 billion compared to $1.13 billion as of March 31. The weighted average coupon of our loan portfolio declined to 704 basis points compared to 709 basis points in the prior quarter due to payoffs of higher spread loans relative to newly acquired assets as well as a slight decline in the average SOFR rate during the period. Although we had greater payoffs compared to Q1, our exit fee income was relatively flat to prior quarter and recognition of extension fee income was down by about $300,000 quarter-over-quarter. Our total operating expenses, including fees to our manager, were higher quarter-on-quarter at $3.9 million versus $3.7 million. Primary driver was higher reimbursable expenses compared to Q1, driven primarily by resource allocation. Difference between reported GAAP net loss and distributable loss during the quarter was primarily attributable to an $8.6 million net provision for credit losses recorded in the period, $5.1 million of realized losses on mortgage loans and REO included in distributable and $390,000 of depreciation on REO. The $8.6 million in net provision for credit losses recorded during the quarter, which is excluded from distributable earnings was driven primarily by specific reserves on a risk-rated 5 loans. As of June 30, we had 6 loans rated risk-rated 5, all collateralized by multifamily assets. Greg will provide a bit more detail in his remarks. We evaluated our risk-rated 5 loans individually to determine whether asset-specific reserves were necessary. During the quarter, we recorded specific provisions related to 2 loans downgraded to a 5 risk rating in the quarter and 3 loans that were already risk-rated 5 at March 31, including 1 property that was foreclosed upon and transferred to REO during the period. Specific reserves totaled $7.4 million at quarter end, representing approximately 18% of the associated UPB of specifically evaluated assets. The $5.1 million in realized losses included in distributable earnings related to 3 assets that were fully resolved in the quarter. These included discounted payoffs on 2 previous 5 risk-rated loans, 1 in Philadelphia and 1 in Des Moines, with proceeds generally consistent with their March 31 net carrying values. In addition, we sold 1 REO property in San Antonio for $12.1 million and recognized a small GAAP gain on that sale. The realized losses reflected in distributable earnings this period were primarily attributable to prior period reserves and impairments recorded on those assets. At quarter end, our CLO's capital was substantially fully deployed at an 88% advance rate and a cost of funds of SOFR plus 1.91. As of June 30, a portion of our loan and REO portfolio were pledged to warehouse facilities that provided financing at an effective advance rate of 68% and a weighted average cost of funds of SOFR plus 209. We ended Q2 with an unrestricted cash balance of $29 million and FL3 was substantially fully deployed. Company's total book equity at the end of the quarter was approximately $205 million. The total book value of common stock was approximately $145 million or $2.76 per share, decreasing sequentially from $2.97 a share at March 31. I will now turn the call over to Greg Calvert to provide details on the company's investment activity and portfolio performance during the quarter. Greg? Greg Calvert: Thank you, Jim. During the second quarter, LFT acquired or funded 4 loans with an aggregate UPB of $91 million and experienced $184 million of loan payoffs. As of June 30, our total loan portfolio consisted of 51 floating rate loans with an aggregate unpaid principal balance of approximately $1 billion, a weighted average floating rate of 330 basis points over SOFR and an unamortized aggregate purchase discount of approximately $800,000. The weighted average remaining term of our book as of quarter end was approximately 18 months, assuming all available extensions are exercised by our borrowers. 100% of the portfolio was indexed to 1-month SOFR and 91.7% of the portfolio was collateralized by multifamily properties. As of June 30, approximately 81% of the loans in our portfolio were risk rated at 3 or better compared to 77% at March 31. Our weighted average risk rating quarter-over-quarter remained stable at 3.1. During the quarter, we had several positive asset resolutions, including the resolutions of the 2 loan assets Jim mentioned in his remarks, which had been risk-rated 5 as of March 31 and for which we received payoff proceeds consistent with March 31 net carrying values. As of June 30, we had 6 risk-rated 5 loans with an aggregate principal amount of $98 million or approximately 10% of the unpaid principal balance of our quarter end investment portfolio. Four of these loans with an aggregate UPB of $62 million were also risk-rated 5 as of the prior quarter due to either maturity or monetary default. Two of these loans with an aggregate UPB of $36 million were downgraded to a 5 risk rating for the first time due to monetary default. As of quarter end, the REO portfolio in total consisted of 4 multifamily properties with an aggregate carrying value of approximately $61.6 million and a weighted average occupancy rate of approximately 67%. During the period, we completed the sale of 1 San Antonio REO asset with a carrying value of $12.2 million. We also foreclosed on a multifamily property in Arlington, Texas. The $16.7 million loan associated with that property had been risk-rated of 5 as of March 31. Subsequent to quarter end, we foreclosed on a multifamily property in Dallas, Texas. This property had a $21.9 million mortgage loan associated with it and was risk-rated 5 as of 6/30. We have been very active in seeking positive asset resolutions and maximizing recovery values and are pleased with the significant progress we have made so far, yet we understand that there is still more work to be done on behalf of our shareholders. With that, I'll pass it back to Jim Flynn for his closing remarks and questions. James Flynn: Thanks, Greg. I'd like to thank everyone for joining us today and for your continued partnership and support. We recognize and appreciate the patience of our investors as we work through our legacy assets and reposition the company for improved earnings. We remain focused on resolving those challenged assets, redeploying capital efficiently and moving the company toward a fully invested higher earning portfolio in 2027. Importantly, we continue to have the support of our capital partners as we move forward, and we believe the actions we are taking today position LFT to create value for our shareholders over time. With that, I'll ask the operator to open the call for questions. Operator: [Operator Instructions] Your first question is from [indiscernible]. Unknown Attendee: I've been a shareholder for many, many years, and I see the book value declining considerably along with the stock price, which is what I'm concerned about. And your dividend, which I bought many years ago, has declined also significantly. I see what you're paying now. And my question is, I don't know how you're going to continue to pay that. And a very simple question I have, it's just a sign of scale. I don't think there's any company that's smaller than your company as far as assets and market cap in this particular space. There's another company I own, Cherry Hill, which recently made a merger with MITT. And my question is, I see your expenses going up. I don't blame you. Inflation is there, people got to burn money. Everything costs money these days. But do you see an opportunity to merge with another company because of the scale just doesn't make sense or just sell the assets since you said the book value is $2.70. James Flynn: Thank you for the question. Thank you for your time as a shareholder. We appreciate that support. I think that you've certainly identified a challenge, which we've discussed in the past, is our size and compared to many of the larger competitors in the space, that is accurate. It's also one of the reasons our portfolio probably on average has distressed assets in the same relative percentages as the peer set. Our challenge is our size, and so we've held liquidity on our books and not redeploy that capital. So that's further suppressed earnings in addition to losses that have been taken on underperforming loans. So that's one of the drivers, as you point out. And as we move through these assets and redeploy capital, we should be able to improve earnings as we move forward. In terms of evaluating potential M&A opportunities or other strategic alternatives, that is something that we continue to do with our bankers, with anyone that has discussions with us, with our Board. All of those options are evaluated as they come up. Unfortunately, over the past couple of years, we've been unable to execute on any of those that were discussed. And to the extent something came forward, we certainly would discuss that with the Board and take any alternatives that could create shareholder value seriously, and we'll continue to do so as we move forward. Unknown Attendee: The other question is how about just wrapping up and selling the assets at $2.75 before they get any lower? James Flynn: So that's a fair question, certainly a consideration of our Board and the management and discussions with the Board. The one caveat I would say is if you take a look at the market, the market for selling portfolios of assets of this type, particularly some of the older vintage multifamily assets, if we were to attempt to sell that into the market, it might be difficult to sell the entire portfolio at those recoverable values. But as you point out, I think to the extent there is a strategic investor or someone that we were able to find, it would be something we would have to consider as a management team and the Board. Unknown Attendee: The concern I have is the book value, not just of you, but of many of these companies in the space that they are overinflated. The book value should be what you should be able to receive, in my opinion. James Flynn: Well, we believe that our book value does represent what we will receive on these assets. Unknown Attendee: Okay. Listen, I've taken enough of your time. I appreciate you answering my questions. As I said, I've been a shareholder prior to when you raised money through a REIT's offering. So you can see how long I go back. And this has been the most disappointing REIT that I have. I have a significant portfolio of REITs, and this has been the most significant. Hopefully, you could turn this around. I remember when I bought this, everybody said you were conservative and that this would be a very, very good management company. And that's why I bought the stock. So hopefully, you guys can turn it around or make a decision to look out for the shareholders instead of having the increase in expenses. That's sort of like an insult to me as a shareholder. Everybody has to suffer. The stock is down, but I think the employees -- the management should take some responsibility and the best responsibility is one word, money. So that's all the questions I have. I appreciate the time that I had here, and I appreciate your answers. And again, I hope you look out for the shareholders. That's my concern. Thank you very much. James Flynn: We appreciate both your questions and your time as an investor. Operator: Your next question is from Lee Zulch from OVERCAP. Lee Zulch: Is the 12/15/'25 stock repurchase program still in effect? Is the $10 million there to buy common shares? James Flynn: I will defer to Jim Briggs on the timing of that agreement. But in general, the question around repurchasing shares and other strategic alternatives are all on the table in discussions with our Board to answer it. I think the underlying question is, the technical question on whether that agreement is... James Briggs: That is still open. Yes. Operator: Your next question is from John [indiscernible]. Unknown Analyst: So if the stock buyback plan is still open and your stock is trading for 25% of NAV, why hasn't the board and management actually made any stock repurchases in the open market? James Flynn: So any discussion around stock repurchases or other alternatives also have to reflect the full view of liquidity and maintain liquidity to make sure that we can resolve underperforming assets. But certainly, our current stock price does not reflect what we believe is the fair value of our assets, and it is something that we will continue to discuss with the board around whether we take any action in that regard. Unknown Analyst: So any thoughts on how to close that gap? James Flynn: I mean, there are several, right? So certainly, you mentioned stock repurchase would certainly help. The primary way for us to improve book value is to work through assets and get them resolved off our books and redeployed efficiently. Today, we have roughly $1 billion of assets outstanding, including nonperforming loans. We should be closer to $1.4 billion. That's a significant drag on earnings, not to mention that a portion of those assets are some $300 million, including REO are inefficiently financed or not financed at all. That is the biggest drag on our earnings. And so working through these assets, I should point out, having 3 resolutions last quarter, we expect to have several more here over the next quarter or 2 and really move through that legacy portfolio, which will allow us to move forward with redeploying that capital efficiently. That's the biggest drag. But along the way, we're going to continue to see if there are certain other potential opportunities to enhance the book value or the trading price of our shares relative to book value. Unknown Analyst: Okay. And we appreciate you holding these calls and talking to shareholders and investors. Operator: Your next question is from [ Greg Bennett ]. Unknown Attendee: On your supplemental data, when you have a closing date for a loan and then you have a maturity date, you look at some of these loans that were done in '21, let's say, I take this as the problem portfolio. Am I correct that most of these problem loans are the ones that were done in '21 and '22? Would that be correct? James Flynn: That would generally be correct, maybe into early '23, but that is generally the, kind of across the industry and our portfolio, the time of the most challenged assets, typically valuation issues, meaning they were overvalued to begin with. Unknown Attendee: So when we're looking at these and the maturity date, there are some that I'll see that the closing date was '21, but they will have an -- how many of these have an extension, I guess, what I'm trying to get at. You take a loan that was done in '21 and you see that the maturity date is '27 now, that would have been a 6-year loan. That maturity date, should there be an asterisk next to that, that tells us that you actually did a loan extension that we can -- we could identify maybe these were the weaker loans. Does the maturity date include a loan extension? Or is that what the original term was? James Flynn: So it would be what the current maturity date is in the supplemental. And I'll ask the team to step in if I say anything wrong. But most of our bridge loans have a total maturity of 5 years, usually 3 years initial term with 2, 1-year extensions. Occasionally, it's 2 with 3, 1-year extensions. And the outside maturity date is listed as that 5-year period. But for any loan that has gone through a modification with an extended maturity date, the maturity date in the supplemental would be listed as the current maturity date. So we can provide that data in future supplementals to be clear. But for loans that were done in '21 that have a maturity date of '27, that would be an extension because we don't have any loans that have an initial maturity beyond 6 years -- I mean, beyond 5 years. I don't know if [indiscernible] is back or -- okay, go ahead. Unknown Attendee: Go ahead, finish. James Flynn: Well, I was just going to say, I suspect that someone doesn't have the data right at their fingertips, but we can certainly provide that in the future. But if anyone else on the team has that, meaning the number of extensions. Some of them extend it for more too, right? At the end of the 3 years and then they get an initial period because of some agreement that they've reached with us on an extension, typically a pay down. Unknown Attendee: Yes. So the problem loans have to do with just the management of a property that has finished its remodeling or its construction that they're just not managed well? Or is it because they're still using the loan to put capital renovation in the property? James Flynn: So any troubled loan, we're generally no longer advancing on in terms of the last question. In terms of management, it's a bit of a mixed bag. Certainly, in some cases, it's due to management. Most often, it's because sponsors have themselves run out of capital. These are not their only properties or only loans, and they just no longer have the capital to commit to the assets that they have, whether in our portfolio or others. And what happens when sponsors no longer invest capital, even minor things is, properties deteriorate, which make it harder to rent new units. And so I think the answer to your question is, in many cases, it is bad management. It's not necessarily that sponsors don't know how to do it or what to do. It's that they no longer have the resources as they've held on to these assets for an extended period waiting for the market to turn better, the submarket that they're in, thinking places like Houston or San Antonio and those types of city markets that have struggled. And so they just kind of run out of money and resources. It doesn't mean they don't know -- in many cases, it doesn't mean that they don't know what they're doing. It just means that they no longer have capital. And that's a challenging environment where you've had cap rates expand, you've had increases in interest rates. And so that sponsor doesn't have capital to put into the asset. We are trying to work with them to exit the asset, hopefully at our loan proceeds. But at this point, in many cases, as we've seen below loan proceeds, and that process is, frankly, a challenging one with some sponsors who are unwilling to cut their losses, so to speak, and move on. That's something that has accelerated a bit here in 2026, moving toward a resolution, but that is the biggest problem that sponsors acquired assets at valuation levels that have since declined meaningfully, their expenses have gone up and their resources have been drained. Unknown Attendee: Going forward, when you do commit to loans, I mean, obviously, there's a lack of confidence based on the stock price. So I'm wondering from a management point of view or from ORIX sponsor, if there's some way of -- well, first of all, the commitment going forward that maybe you only invest in 2 rated loans to try to improve, I guess, what the quality of the portfolio is. I don't know if that would matter or not. And then the other thing is -- go ahead. James Flynn: Well, I would just say we've certainly evaluated investment criteria and have considered sponsor strength as one of the key components here in terms of common themes among struggling assets. Again, I think the portfolio for multifamily assets across the entire industry, not just LFT's portfolio, has seen significant struggles in assets that were acquired during that period of -- identified in the '21 to '23 period. They were acquired at a time of lower interest rates, lower expenses and lower cap rates. All 3 of those things have moved meaningfully against those owners. And so we've taken a particularly closer look and identify stronger sponsors on newer assets, those with deeper pockets, more capital, more experience and those that have not necessarily grown as significantly as many investors -- many sponsors did during that period. So that is certainly something that we have done. And if you look at our portfolio that's been invested since that period, it's performed quite well. Unknown Attendee: One thought I have, and I don't know if this is available or not, but part of the reason for investing in your company had to have been the relationship with Lument and then the parent company ORIX. And I don't know, I mean, this would be self-serving, but since the insiders own roughly -- if you think about it, the insiders own roughly 45% of this company, the publicly traded company with ORIX, I guess, the largest shareholder. If there's some way from a -- to build investor confidence back in the price of ORIX or the sponsor, basically, I don't know how you would do it, but taking back these assets for like a preferred stock in the company and allow the parent company to work this out. I mean we -- they're the ones who put these loans on. I mean they were the ones that -- you didn't buy these from a broker. I mean, part of the appeal of investing in this is that you weren't relying on third parties to bring you these deals. These were all underwritten and done in-house by the parent company, which we pay a management fee. That might be a crazy idea, but the idea -- closing the discount is not going to happen until we see the tide turning. And the way to turn the tide faster would be to, I think, to eliminate the lack of confidence that investors -- we're a small group now. And with the reverse split, we're going to be even smaller. So is that possible to do that? James Flynn: Well, is it possible? I'm sure it's possible. But in terms of looking at the portfolio and finding ways for -- whether through our parent or other investors to find ways to -- basically, what I would say is to kind of box that risk or move that risk of those -- what is now a shrinking part of the portfolio, but still having a meaningful impact on earnings, both again, as I said, in losses and from effectively and efficiently deploying capital. What you described minus the -- I won't say, "Oh, the parent is committing to doing anything like that," but the idea of trying to box that risk into a portfolio of loans that could be set aside and work through is something that we certainly have been and are evaluating. To the extent we can figure something out that's accretive to the shareholders, we certainly would like to do so, and we'll explore that opportunity as we move forward here. So I think your question and your thought is a good one, and there are opportunities we're looking at with investors about ways that we could possibly do that or something like that. Unknown Attendee: Yes. In your comments, you framed that the outlook is starting to look more positive for some of these problem loans. But I mean, I see the San Antonio property paid off $11 million, whatever. But -- so you have that. So now you're down to what, $50 million of real estate owned. I mean, I don't know if -- I don't have a sense necessarily that real estate owned or problem assets is necessarily getting better. Is that -- you indicated... James Flynn: So what's happening -- what's starting to turn, again, we're looking at markets that have been -- that have not seen good news for several years that we're seeing occupancy increasing, vacancy declining, absorption increasing, limited supply contracting or being limited, right? So those dynamics are starting to happen in markets that haven't seen that for years. And so to clarify maybe my remarks, what we're starting to see is some positive momentum in markets that have struggled for years in rental growth, occupancy, vacancy and deal momentum, right? We're starting to see a few deals get done. What we've seen for a couple of years now is assets go under contract or at least initial LOIs for sale. These are performing and nonperforming, and those sales fall through for whatever reason, usually something in diligence comes up or the market just moves against and the buyer walks away. What we've seen in a couple of instances, including this quarter is that we got to a resolution. It's not positive relative to the original loan amount, but it's positive to move the asset off our books to recapture that liquidity and to be able to redeploy it into performing assets. So to be clear, it's more about resolving, right? Having these assets continue to remain on the books and linger is a drag at any value. So optimistic is the wrong word, but there are signs in these markets that we could see some deal momentum. I would also offer that we're not the only lender that are trying to sell or dispose of assets in these markets. And so that has put some pressure on going back quarters now. But even as we go forward, we'll continue to see other lenders kind of having the same experience, which means we might see some struggling or distressed assets coming to market from several lenders in the same places. That would be the only caveat. But to be clear, I'm not suggesting that these are complete turnaround stories. It's just relative to where we are, we're starting to see some aspects change. Unknown Attendee: Okay. One other comment for trying to build the investor confidence. Is there any way of these loans that are underwritten by the parent? Is there any provision in there going forward? These aren't bought from brokers, you guys are underwriting it where the trust has a put provision that, a, if we don't like the way this is turning out, we do have the ability to put some of these loans back to the parent. I mean, that would be something that... James Flynn: I mean the loans are underwritten by Lument. It was owned by ORIX, and we underwrite the loans, obviously. I don't think that, that is a market provision. I don't -- having a put right back to the manager when a loan goes bad would be a challenge to get our parent or probably any parent to agree to. But certainly evaluating when assets have gone bad, how we can revise underwriting standards or look at assets differently, we'll continue to do. And as I said earlier, we will continue to explore all opportunities and options to speedily move these resolutions off the balance sheet with the help of existing and/or new investors. But we have not found an opportunity to date that has been something that we feel would be accretive to shareholder value. Hopefully, we can do so here in the coming quarters, but we haven't been able to as of yet. Unknown Attendee: Okay. One other question. Distributable loss, I don't think -- I'm not familiar with that term. What does that mean to a shareholder in the company? The terminology distributable loss, it sounds like free cash flow, but this is -- that's something when you get your year-end taxes, 1099 that, that's considered a loss. Do you know that for individual investors what that might mean? James Flynn: So the distributable loss in -- I'm not a tax expert, but distributable loss is a GAAP concept and it's not a tax concept. Unknown Attendee: Okay. That's fine. Hopefully -- I guess I'm getting off this call, and I'm not sensing that necessarily the tide is necessarily turning, but I guess we'll see in the next couple of quarters. James Flynn: Yes. Really appreciate your support. Operator: Your next question is from Martin Brody. Unknown Attendee: On the last call, I asked many questions that I was going to ask. I'm a long-suffering shareholder, too. I go back to several name changes, [indiscernible] I think it was originally. So in the middle of June, June 15, the quarter was almost over, and you declared a second quarter dividend of $0.04, which thrilled me at the time, but it sort of misled me a little bit because I was assuming that you were paying $0.04, then at least you had some positive income on earnings available for distribution. Can you tell me why you did that when the -- as I said, the quarter was almost over, so you clearly knew the state of income expenses at that point. James Flynn: So whenever we discuss the dividend, we share with our Board and discuss with the Board the current projections for the quarter and for the year and for, frankly, the future. Based on the projections at the time, we felt that $0.04 dividend was appropriate for the quarter based on where we expected things to be. A few of the resolutions resulted in bigger losses upon ultimate sale or payoff than we were expecting. And as we go through the dividend discussion in our next quarter with the Board, we'll evaluate the current projections for this quarter and for the next several quarters and go through the same discussion we do each quarter. It's a quarterly discussion based on not just that quarter, but the year anticipated and expected returns. Unknown Attendee: Okay. Next question is, this is probably impossible, but you have an outside manager of which you pay a considerable fee to, and I understand that, but that is taking a larger and larger percentage of income. Is it possible to internalize management? James Flynn: I'm sorry, is it possible for -- can you -- I missed the last part. Unknown Attendee: Internalize management. James Flynn: To lower the fee -- internalize. Unknown Attendee: Both, actually. Thanks for bringing that up. Lower the fee and internalize management. Both ways would save money, of course. James Flynn: Yes. Well, I don't think that, that is likely. But what I would point out, I think internalizing management would actually increase fees. There's a cap on reimbursable fees and expenses that a standalone public company of this size would likely go beyond. But there's currently no plans to internalize the manager. Unknown Attendee: I'm not quite sure. It would -- seems like a fairly simple business, but maybe I'm wrong. One last question has to do with stock trade. so at the end of June, I think it was the day before they went ex dividend, there was a 5 million share print at the end of the day, which is, as you know, massive. And in fact, a year ago, approximately at the same time, there was also 5 million share print. And I was surprised that there was no reporting of this. Can you shed any light on that? I'm sure you're aware of it. James Briggs: Yes. I can answer that, Jim. LFT a year ago -- a little over a year ago at this point, as you point out, there was a big print at the end of June. LFT had been added to the FTSE Russell 3000. So what you saw a year ago and change and what you saw this past June was the effects of any activity from that rebalancing and index funds that were indexing to the Russell 3000 that we were in. So, yes, that explains that big print June of '25 when LFT was added. And when LFT was pulled out, that became effective at the close of business on that day that showed a big print. So there was a lot of activity that day as well. Unknown Attendee: Okay, great. That answers that question. I had no idea they were removed. Operator: There are no further questions at this time. Please proceed with the closing remarks. James Flynn: I want to thank our investors for joining today, again, for your patience. I appreciate the questions and feedback and support, and we'll continue to work to improve the earnings profile and increase our -- with intent to increase our trading price relative to book value. Thank you all. We'll speak next quarter. Operator: Ladies and gentlemen, the conference has now ended. Thank you all for joining. You may now disconnect your lines. Before you buy stock in Lument Finance Trust, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Lument Finance Trust wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $432,621!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,314!* That performance is why people listen. With a track record of beating the S&P 500 by nearly 5x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 20, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Lument Finance (LFT) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management is prioritizing the resolution of legacy assets, particularly older vintage multifamily loans from the 2021-2023 period that were impacted by cap rate expansion and sponsor capital exhaustion. The company intentionally built liquidity by holding cash from non-securitized loan payoffs rather than immediate reinvestment, resulting in a sequential decline in net interest income. Performance was pressured by specific reserves on risk-rated 5 loans and realized losses from discounted payoffs, though management noted proceeds were generally consistent with previous net carrying values. Multifamily fundamentals are showing signs of stabilization as the sector moves beyond peak supply, with demand supported by long-term housing affordability challenges. The 10-for-1 reverse stock split was implemented to maintain NYSE compliance and reduce technical pressure on the share price, aiming to shift investor focus toward underlying portfolio value. Management attributes the current earnings drag to approximately $300 million in assets that are either inefficiently financed or unfinanced, representing a significant opportunity for future redeployment. The company maintains a strategic goal to be fully invested by 2027, which management believes will be the primary driver for improved earnings and shareholder value. Future capital deployment will focus on higher-quality multifamily investments with deeper-pocketed sponsors to mitigate the risks observed in the legacy portfolio. Management expects an acceleration in resolution activity for non-performing loans and REO assets through negotiated sales and stabilization efforts over the coming quarters. Guidance assumes that as liquidity is recaptured from legacy resolutions, it will be redeployed into performing assets to close the current $400 million gap in the target portfolio size. Recorded an $8.6 million net provision for credit losses, primarily driven by specific reserves on six loans rated risk-rated 5. Realized $5.1 million in losses included in distributable earnings related to the resolution of two risk-rated 5 loans and one REO sale. The company was removed from the FTSE Russell 3000 index in June 2026, resulting in significant trading volume due to index fund rebalancing. Operating expenses increased due to higher reimbursable expenses driven by intensified resource allocation for asset management. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management acknowledged that the company's small size is a challenge but stated that previous strategic discussions over the past two years failed to result in an executable transaction. The Board continues to evaluate all options, including M&A and portfolio sales, though selling the entire portfolio at current recoverable values remains difficult in the current market. While a $10 million repurchase program remains open, management emphasized the need to maintain liquidity to resolve underperforming assets first. Management agreed the current stock price does not reflect fair value but views asset resolution and redeployment as the most effective way to close the valuation gap. Management clarified that while loans are underwritten in-house, the failures were largely due to industry-wide shifts in interest rates and cap rates affecting 2021-2023 vintages. Management is exploring ways to 'box' the risk of the shrinking legacy portfolio but noted that 'put' provisions back to the parent company are not market-standard and unlikely.

This article first appeared on GuruFocus. GAAP Net Loss: $9.2 million, or $0.18 per share, for Q2 2026. Distributable Loss: $5.3 million, or $0.10 per share, for Q2 2026. Net Interest Income: $4.5 million, down from $5.7 million in Q1 2026. Total Operating Expenses: $3.9 million, up from $3.7 million in Q1 2026. Net Provision for Credit Losses: $8.6 million recorded in Q2 2026. Realized Losses: $5.1 million on mortgage loans and REO included in distributable earnings. Total Portfolio UPB: Approximately $1 billion as of June 30, 2026, down from $1.13 billion on March 31, 2026. Weighted Average Loan Coupon: Declined to 704 basis points from 709 basis points in the prior quarter. Loan Acquisitions/Fundings: 4 loans with an aggregate UPB of $91 million during Q2. Loan Payoffs: $184 million during Q2. Total Book Equity: Approximately $205 million at quarter end. Book Value per Share: $2.76, down from $2.97 on March 31, 2026. Unrestricted Cash Balance: $29 million at the end of Q2. REO Portfolio: Four multifamily properties with an aggregate carrying value of approximately $61.6 million. Warning! GuruFocus has detected 3 Warning Signs with LFT. Is LFT fairly valued? Test your thesis with our free DCF calculator. Release Date: August 14, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Lument Finance Trust Inc (NYSE:LFT) is seeing an acceleration in resolution activity for legacy assets, including negotiated sales and other paths to monetize or stabilize challenged positions. The company successfully resolved three assets in the quarter, including two risk-rated 5 loans and one REO property, with proceeds generally consistent with their net carrying values. Portfolio credit quality is improving, with approximately 81% of loans risk-rated 3 or better as of June 30, up from 77% in the prior quarter. The company's financing profile is well-positioned following refinancing initiatives, with CLO capital substantially fully deployed at an 88% advance rate. Management is actively evaluating strategic alternatives, including M&A opportunities and ways to 'box' legacy risk, to enhance shareholder value. The Board approved a 10-for-1 reverse stock split to address technical pressure on the stock price and support a more orderly market for shares. Lument Finance Trust Inc (NYSE:LFT) reported a GAAP net loss of $0.18 per share and a distributable loss of $0.10 per share for the second quarter of 2026. Book value per share declined sequentially to $2.76 from $2.97, reflecting continued credit losses and provisions. The company recorded an $8.6 million net provision for credit losses, driven by specific reserves on risk-rated 5 loans, and $5.1 million in realized losses. The portfolio continues to shrink, with total UPB declining to approximately $1 billion from $1.13 billion, as the company chose to build liquidity rather than reinvest. The REO portfolio remains a drag, with four multifamily properties carrying a value of $61.6 million and a low weighted average occupancy rate of approximately 67%. Operating expenses increased quarter-over-quarter to $3.9 million, driven by higher reimbursable expenses, which drew criticism from shareholders. Q: A long-term shareholder expressed deep concern over the significant decline in book value and stock price, questioning the sustainability of the dividend and whether the company's small scale makes a merger or outright sale of assets a more logical option than continuing operations.A: James Flynn (CEO) acknowledged the challenge of the company's size relative to peers, noting that it has held liquidity and not redeployed capital, which has suppressed earnings. He confirmed that the board and management continuously evaluate M&A and other strategic alternatives with bankers, but have not yet found an executable deal. Regarding a potential sale, he noted that selling the entire portfolio at recoverable values would be difficult in the current market, but the board would seriously consider any strategic investor offer. Q: An investor asked why the board and management have not made any open-market stock repurchases given that the stock trades at roughly 25% of NAV, despite the $10 million repurchase program still being in effect.A: James Flynn (CEO) explained that any discussion around stock repurchases must reflect a full view of liquidity needs to resolve underperforming assets. He stated that the current stock price does not reflect the fair value of assets, and the primary way to close the gap is to work through legacy assets and redeploy capital efficiently. He highlighted that the company has roughly $1 billion of assets outstanding, including non-performing loans, and should be closer to $1.4 billion, which is a significant drag on earnings. Q: A shareholder asked if the company has considered "wrapping up and selling the assets at $2.75 before they get any lower," expressing concern that book values in the sector are overinflated.A: James Flynn (CEO) responded that this is a fair question and a consideration for the board. He noted that the market for selling portfolios of older vintage multifamily assets is very soft, making it difficult to sell the entire portfolio at recoverable values. However, he affirmed that the company believes its book value does represent what it will receive on these assets. Q: An investor asked whether the problem loans in the portfolio are primarily those originated in 2021 and 2022, and whether the maturity dates listed in the supplemental data include extensions, which would help identify weaker loans.A: James Flynn (CEO) confirmed that the most challenged assets generally originated in 2021 through early 2023, typically due to valuation issues. He clarified that the supplemental data lists the current maturity date, and for loans done in 2021 with a 2027 maturity, that would reflect an extension since the company does not have loans with an initial maturity beyond five years. He committed to providing extension data in future supplementals. Q: A shareholder asked why the company declared a $0.04 dividend in mid-June when the quarter was almost over and it was clear the company was facing losses, and whether the dividend was misleading.A: James Flynn (CEO) explained that dividend decisions are made with the board based on current projections for the quarter and year. At the time of the declaration, the $0.04 dividend seemed appropriate based on expectations, but a few resolutions resulted in bigger losses upon ultimate sale or payoff than expected. He confirmed that the dividend is a quarterly discussion based on anticipated returns. Q: An investor asked whether it is possible to internalize management or lower the management fee to save money, given the company's small size and the fee's growing percentage of income.A: James Flynn (CEO) stated that internalizing management is not likely and would actually increase fees, as a standalone public company of this size would likely exceed the cap on reimbursable fees and expenses. He confirmed there are currently no plans to internalize the manager. Q: An investor asked about a massive 5 million share print at the end of June, which also occurred approximately a year ago, and whether the company was aware of the reason.A: James Briggs (CFO) explained that LFT had been added to the FTSE Russell 3000 index a little over a year ago. The big print in June of 2025 was the effect of index funds buying shares when LFT was added, and the print this past June was the effect of LFT being removed from the index, which became effective at the close of business on that day. Q: An investor asked whether the company has considered having the parent company, ORIX, take back problem assets in exchange for preferred stock to build investor confidence and close the discount to book value.A: Greg Calvert (President) responded that while it is possible, the company is evaluating ways to "box that risk" into a portfolio of loans that could be set aside and worked through. He noted that the company is exploring opportunities with investors about ways to potentially do this, but has not found an opportunity to date that would be accretive to shareholders. Q: An investor asked whether the company's outlook for problem loans is actually improving, noting that the San Antonio REO sale and other resolutions do not seem to indicate a turning tide.A: James Flynn (CEO) clarified that the positive momentum is in markets that have struggled for years, with occupancy increasing, vacancy declining, and absorption increasing. He noted that while assets have gone under contract and fallen through for years, the company has now seen a couple of instances, including this quarter, where it reached a resolution. He emphasized that the goal is to move assets off the books and recapture liquidity to redeploy into performing assets, rather than a complete turnaround story. Q: An investor asked whether there is any provision in loans underwritten by the parent company that would allow the trust to put loans back to the parent if they do not perform well.A: James Flynn (CEO) stated that having a put right back to the manager when a loan goes bad would be a challenge to get the parent to agree to, as it is not a market provision. He confirmed that the company will continue to explore all opportunities to speedily move resolutions off the balance sheet with the help of existing or new investors, but has not found an accretive opportunity to date. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

NEW YORK, Aug. 13, 2026 /PRNewswire/ -- Lument Finance Trust, Inc. (NYSE: LFT) ("we", "LFT" or "the Company") today reported its second quarter results and also announced that its Board of Directors has unanimously approved a 1-for-10 reverse stock split of the Company's issued and outstanding shares of common stock (the "Reverse Stock Split"). Second Quarter 2026 Results GAAP net loss attributable to common shareholders for the second quarter was $9.2 million, or $0.18 per share of common stock. Distributable Loss for the second quarter was $5.3 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 lumentfinancetrust.com. Reverse Stock Split The Reverse Stock Split is being implemented in order to regain compliance with applicable New York Stock Exchange listing requirements and support an efficient public trading market for the Company's common stock. The Reverse Stock Split is expected to become effective at 5:00 pm Eastern Time on September 9, 2026 (the "Effective Time"). Accordingly, at the Effective Time, every ten issued and outstanding shares of the Company's common stock will be converted into one share of common stock. The Company's common stock is expected to begin trading on a split-adjusted basis on the New York Stock Exchange at the opening of trading on September 10, 2026 (the first trading day after the Effective Time), under the existing ticker symbol "LFT", with a new CUSIP number: 55025L306. The Reverse Stock Split will affect all stockholders uniformly and will not alter any stockholder's percentage ownership interest in the Company, except with respect to the treatment of fractional shares. No fractional shares will be issued in connection with the Reverse Stock Split. Stockholders who would otherwise be entitled to receive a fractional share as a result of the Reverse Stock Split will receive cash in lieu of such fractional share. The Reverse Stock Split is expected to reduce the number of issued and outstanding shares of the Company's common stock from approximately 52.5 million shares to approximately 5.3 million shares. Stockholders holding shares in book-entry form or through a bank, broker or other nominee will have their positions automatically adjusted to reflect the Reverse Stock Split and will not be required to take any action in connection with the Reverse Stock Split. The Company reserves the right to abandon or delay the Reverse Stock Split and will inform stockholders of any changes to its plans. For the benefit of its investors, the Company has also posted a Reverse Stock Split FAQ document on the Investor Relations page of its website. Conference Call and Webcast Information The Company will also host a conference call on Friday, August 14, 2026, at 8:30 a.m. ET to provide a business update and discuss the financial results for the second quarter of 2026. The conference call may be accessed by dialing 1-800-836-8184 (U.S.) or 1-646-357-8785 (international). Note: there is no passcode; please ask the operator to be joined into the Lument Finance Trust call. A live webcast, on a listen-only basis, is also available and can be accessed through the URL: https://app.webinar.net/nok7BevLPR1 For those unable to listen to the live broadcast, a recorded replay will be available for on-demand viewing approximately one hour after the end of the event through the Company's website lumentfinancetrust.com and by telephone dial-in. The replay call-in number is 1-888-660-6345 (U.S.) or 1-646-517-4150 (international) with passcode 70381. Non-GAAP Financial Measures In this release, the Company presents certain financial measures that are not calculated according to generally accepted accounting principles in the United States ("GAAP"). Specifically, the Company is presenting distributable earnings, which constitutes a non-GAAP financial measure within the meaning of Item 10(e) of Regulation S-K and is net income under GAAP. While we believe the non-GAAP information included in this press release provides supplemental information to assist investors in analyzing our results, and to assist investors in comparing our results with other peer issuers, these measures are not in accordance with GAAP, and they should not be considered a substitute for, or superior to, our financial information calculated in accordance with GAAP. The methods of calculating non-GAAP financial measures may differ substantially from similarly titled measures used by other companies. Our GAAP financial results and the reconciliations from these results should be carefully evaluated. Distributable Earnings Distributable Earnings or Loss is a non-GAAP measure, which we define as GAAP net income (loss) attributable to holders of common stock computed in accordance with GAAP, including realized losses not otherwise included in GAAP net income (loss) and excluding (i) non-cash equity compensation, (ii) depreciation and amortization, (iii) any unrealized gains or losses or other similar non-cash items that are included in net income for that applicable reporting period, regardless of whether such items are included in other comprehensive income (loss) or net income (loss), and (iv) one-time events pursuant to changes in GAAP and certain material non-cash income or expense items after discussions with the Company's Board of Directors and approved by a majority of the Company's independent directors. Distributable Earnings mirrors how we calculate "Core Earnings" pursuant to the terms of our management agreement with our manager, Lument Investment Management, LLC ("Manager"), for purposes of calculating the incentive fee payable to our Manager. While Distributable Earnings excludes the impact of any unrealized provisions for credit losses, any loan losses are charged off and realized through Distributable Earnings when deemed non-recoverable. Non-recoverability is determined (i) upon the resolution of a loan (i.e. when the loan is repaid, fully or partially, or in the case of foreclosures, when the underlying asset is sold), or (ii) with respect to any amount due under any loan, when such amount is determined to be non-collectible. We believe that Distributable Earnings provides meaningful information to consider in addition to our net income (loss) and cash flows from operating activities determined in accordance with GAAP. We believe Distributable Earnings is a useful financial metric for existing and potential future holders of our common stock as historically, over time, Distributable Earnings has been a strong indicator of our dividends per share of common stock. As a REIT, we generally must distribute annually at least 90% of our taxable income, subject to certain adjustments, and therefore we believe our dividends are one of the principal reasons stockholders may invest in our common stock. Furthermore, Distributable Earnings help us to evaluate our performance excluding the effects of certain transactions and GAAP adjustments that we believe are not necessarily indicative of our current loan portfolio and operations and is a performance metric we consider when declaring our dividends. Distributable Earnings does not represent net income (loss) or cash generated from operating activities and should not be considered as an alternative to GAAP net income (loss), or an indication of GAAP cash flows from operations, a measure of our liquidity, or an indication of funds available for our cash needs. About LFT LFT is a Maryland corporation focused on investing in, financing and managing a portfolio of commercial real estate debt investments. The Company primarily invests in transitional floating rate commercial mortgage loans with an emphasis on middle-market multi-family assets. LFT is externally managed and advised by Lument Investment Management LLC, a Delaware limited liability company. Additional Information and Where to Find It Investors, security holders and other interested persons may find additional information regarding the Company at the SEC's website at sec.gov, the Company website at lumentfinancetrust.com, or by directing requests to: Lument Finance Trust, 230 Park Avenue, 20th Floor, New York, NY 10169, Attention: Investor Relations. Forward-Looking Statements Certain statements included in this press release constitute forward-looking statements intended to qualify for the safe harbor contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act, as amended. Forward-looking statements are subject to risks and uncertainties. You can identify forward-looking statements by use of words such as "believe," "expect," "anticipate," "project," "estimate," "plan," "continue," "intend," "should," "may," "will," "seek," "would," "could," or similar expressions or other comparable terms, or by discussions of strategy, plans or intentions. Forward-looking statements are based on the Company's beliefs, assumptions and expectations of its future performance, taking into account all information currently available to the Company on the date of this press release or the date on which such statements are first made. Actual results may differ from expectations, estimates and projections. You are cautioned not to place undue reliance on forward-looking statements in this press release and should consider carefully the factors described in Part I, Item IA "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, which is available on the SEC's website at sec.gov, and in the Company's other current or periodic filings with the SEC, when evaluating these forward-looking statements. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond the Company's control. Except as required by applicable law, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. View original content to download multimedia:https://www.prnewswire.com/news-releases/lument-finance-trust-reports-second-quarter-2026-results-and-announces-reverse-stock-split-302851390.html

NEW YORK, Aug. 10, 2026 /PRNewswire/ -- Lument Finance Trust, Inc. (NYSE: LFT) ("we,"; "LFT" or "the Company") announced today that it expects to file its Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, with the Securities and Exchange Commission on Thursday, August 13, 2026, after the market closes, and invites investors and other interested parties to listen to its live conference call via telephone or webcast on Friday, August 14, 2026, at 8:30 a.m. eastern time. The conference call may be accessed by dialing 1-800-836-8184 (U.S.) or 1-646-357-8785 (international). Note: there is no passcode; please ask the operator to be joined into the Lument Finance Trust call. A live webcast, on a listen-only basis, is also available and can be accessed through the URL: https://app.webinar.net/nok7BevLPR1 For those unable to listen to the live broadcast, a recorded replay will be available for on-demand viewing approximately one hour after the end of the event through the Company's website https://lumentfinancetrust.com/ and by telephone dial-in. The replay call-in number is 1-888-660-6345 (U.S.) or 1-646-517-4150 (international) with passcode 70381. About LFT LFT is a Maryland corporation focused on investing in, financing and managing a portfolio of commercial real estate debt investments. The Company primarily invests in transitional floating rate commercial mortgage loans with an emphasis on middle-market multi-family assets. LFT is externally managed and advised by Lument Investment Management, a Delaware limited liability company. Additional Information and Where to Find ItInvestors, security holders and other interested persons may find additional information regarding the Company at the SEC's Internet site at https://www.sec.gov/, the Company website at https://lumentfinancetrust.com, or by directing requests to: Lument Finance Trust, 230 Park Avenue, 20th Floor, New York, NY 10169, Attention: Investor Relations. Forward-Looking StatementsCertain statements included in this press release constitute forward-looking statements intended to qualify for the safe harbor contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act, as amended. Forward-looking statements are subject to risks and uncertainties. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans and objectives. You can identify forward-looking statements by use of words such as "believe," "expect," "anticipate," "project," "estimate," "plan," "continue," "intend," "should," "may," "will," "seek," "would," "could," or similar expressions or other comparable terms, or by discussions of strategy, plans or intentions. Forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us on the date of this press release or the date on which such statements are first made. Actual results may differ from expectations, estimates and projections. You are cautioned not to place undue reliance on forward-looking statements in this press release and should consider carefully the factors described in Part I, Item IA "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, which is available on the Securities and Exchange Commission's ("SEC") website at www.sec.gov, and in the Company's other current or periodic filings with the SEC, when evaluating these forward-looking statements. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond our control. Except as required by applicable law, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. View original content to download multimedia:https://www.prnewswire.com/news-releases/lument-finance-trust-announces-quarter-end-earnings-release-and-investor-call-dates-302847518.html

NEW YORK, June 10, 2026 /PRNewswire/ -- Lument Finance Trust, Inc. (NYSE: LFT) ("LFT" or the "Company") announced the declaration of a cash dividend of $0.04 per share of common stock with respect to the second quarter of 2026. The dividend is payable on July 15, 2026, to common stockholders of record as of the close of business on June 30, 2026. The Company also announced the declaration of a cash dividend of $0.4921875 per share of 7.875% Cumulative Redeemable Series A Preferred Stock. The dividend is payable on July 15, 2026, to preferred stockholders of record as of the close of business July 1, 2026. About LFT LFT is a Maryland corporation focused on investing in, financing and managing a portfolio of commercial real estate debt investments. The Company primarily invests in transitional floating rate commercial mortgage loans with an emphasis on middle-market multi-family assets. LFT is externally managed and advised by Lument Investment Management, LLC, a Delaware limited liability company. Additional Information and Where to Find It Investors, security holders and other interested persons may find additional information regarding the Company at the SEC's Internet site at http://www.sec.gov/, the Company website www.lumentfinancetrust.com, or by directing requests to: Lument Finance Trust, 230 Park Avenue, 20th Floor, New York, NY 10169, Attention: Investor Relations. Forward Looking Statements Certain statements included in this press release constitute forward-looking statements intended to qualify for the safe harbor contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act, as amended. Forward-looking statements are subject to risks and uncertainties. You can identify forward-looking statements by use of words such as "believe," "expect," "anticipate," "project," "estimate," "plan," "continue," "intend," "should," "may," "will," "seek," "would," "could," or similar expressions or other comparable terms, or by discussions of strategy, plans or intentions. Forward-looking statements are based on the Company's beliefs, assumptions and expectations of its future performance, taking into account all information currently available to the Company on the date of this press release or the date on which such statements are first made. Actual results may differ from expectations, estimates and projections. You are cautioned not to place undue reliance on forward-looking statements in this press release and should consider carefully the factors described in Part I, Item IA "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, which is available on the SEC's website at www.sec.gov, and in the Company's other current or periodic filings with the SEC, when evaluating these forward-looking statements. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond the Company's control. Except as required by applicable law, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. View original content to download multimedia:https://www.prnewswire.com/news-releases/lument-finance-trust-inc-declares-quarterly-cash-dividends-for-its-common-and-preferred-stock-302797224.html

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributes current performance to a stabilizing multifamily sector that is moving through the later stages of an elevated supply cycle, with construction starts declining sharply. The company is prioritizing portfolio management and active engagement with borrowers to protect shareholder capital amid an uneven commercial real estate recovery. Strategic liquidity was bolstered by redeeming the LMF-2023-1 debt and refinancing collateral through warehouse facilities, alongside extending a secured corporate loan maturity to 2030. Operational focus remains on resolving legacy assets and selectively redeploying capital into new multifamily loan opportunities with strong sponsors and protective structures. Management noted that while short-term rates have declined, elevated long-term rates continue to anchor cap rates and pressure asset values, limiting access to permanent financing. The company maintained a disciplined approach to reserves, increasing specific reserves on legacy positions while benefiting from a decrease in general allowances due to macroeconomic forecast changes. Management anticipates a meaningful reduction in new multifamily supply through 2026 and 2027, which is expected to support long-term rental demand. The company intends to execute a new securitization transaction in the relative near future, contingent upon the successful resolution of specific asset-level issues. Future dividend coverage is expected to be driven by the efficient deployment of capital into securitizations rather than remaining underdeployed or deleveraging. Strategic asset management of the REO portfolio involves evaluating whether to hold assets for 2-3 quarters for 'low-hanging fruit' improvements or longer for more intensive capital reinvestment. Guidance assumes that while the Fed has shifted toward an accommodative stance, future rate cuts remain highly data-dependent on inflation and labor market conditions. Recorded a $1.2 million loss on extinguishment of debt related to unamortized deferred financing costs from the redemption of the LMF financing structure. Recognized a $1.3 million unrealized impairment expense on REO assets held for sale in San Antonio and Houston following fair value remeasurements. Transferred a Colorado Springs multifamily loan to REO during the quarter, involving a $2.4 million charge-off to specific reserves. Subsequent to quarter-end, the company completed the sale of the San Antonio REO property for $12.4 million and foreclosed on a defaulted loan in Arlington, Texas. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management aims for annual earnings to cover the annual dividend, noting that the transition from being underdeployed in 2025 is a key hurdle. The primary trigger for returning to a fully covered dividend is the ability to access capital markets for new securitizations to leverage uninvested capital efficiently. Decisions to sell or hold REO assets are based on whether the company can improve the asset's value through management or limited capital investment within a 6-to-12-month window. The San Antonio sale was timed to coincide with the spring leasing season, which management identified as the optimal window for maximizing exit value.

Interested in Lument Finance Trust, Inc.? Here are five stocks we like better. Lument Finance Trust reported a first-quarter GAAP net loss of $0.02 per share, while distributable earnings also came in at $0.02 per share. The company kept its quarterly dividend unchanged at $0.04 per share. Net interest income improved sequentially to $5.7 million from $5.4 million, helped by lower funding costs and better leverage. However, book value still slipped to $2.97 per share from $3.03 at year-end. Management remained focused on credit проблемs and REO assets, with seven risk-rated 5 loans totaling about $108 million and four REO properties carrying a combined value of $57 million. The company said it continues to redeploy capital into new multifamily loans and expects future dividend coverage to depend on more efficient capital deployment and potential securitization activity. Lument Finance Trust (NYSE:LFT) reported a first-quarter 2026 GAAP net loss while management said it continued to focus on resolving legacy credit issues, managing real estate owned assets and selectively redeploying capital into new multifamily loan investments. Andrew Tsang of Lument Investment Management said the company reported a GAAP net loss of $0.02 per common share and shareholder earnings of $0.02 per common share for the quarter. The company declared a quarterly dividend of $0.04 per common share in March, unchanged from the prior quarter. → Micron Investors Face a High-Stakes Moment After the Latest Rally Chief Financial Officer James Briggs said net loss to common stockholders totaled $1 million, or $0.02 per share. Distributable earnings were $1.1 million, or $0.02 per share. Net interest income rose sequentially to $5.7 million from $5.4 million in the fourth quarter. Briggs attributed the improvement largely to better leverage and funding costs through the company’s FL3 CRE CLO, the mid-quarter redemption of the remaining LMF financing structure and use of other facilities. The LMF financing had a weighted average cost of funds of SOFR plus 331 basis points at year-end, he said. → How Bad Could Tesla’s Cybertruck Recall Be for Shares? The weighted average coupon on the loan portfolio declined to 709 basis points from 717 basis points in the prior quarter. Briggs said the decline reflected payoffs of higher-spread loans relative to newly acquired assets, as well as a lower SOFR benchmark rate during the period. Total operating expenses, including fees to the company’s manager, were $3.7 million, down slightly from $3.8 million in the fourth quarter. Briggs said other operating expenses declined sequentially, primarily because of discontinued deal costs recorded in the prior quarter, partially offset by higher reimbursable expenses tied to fewer waived exit fees on loan payoffs. → How Berkshire’s New York Times Bet Looks Today The difference between GAAP net loss and distributable earnings was primarily tied to a $1.3 million unrealized impairment expense on REO assets held for sale, a $1.2 million loss on extinguishment of debt related to unamortized deferred financing costs from the redeemed LMF structure, a $732,000 net release of credit loss provisions and $305,000 of depreciation on REO. Chief Executive Officer James Flynn said U.S. economic conditions remained “fundamentally stable,” but added that uncertainty continued to outweigh momentum. He said the Federal Reserve has shifted toward a more accommodative stance, but the timing and scale of future rate cuts remain dependent on inflation, labor market data and broader financial stability. Within multifamily, Flynn said operating fundamentals are gradually stabilizing as the sector moves through the later stages of an elevated supply cycle. He noted that construction starts have declined sharply, which he said should lead to a meaningful reduction in new supply through 2026 and 2027. Rent growth remains modest nationally but is improving in supply-constrained markets, while high-delivery regions continue to face pressure. Flynn said long-term demand drivers for rental housing remain intact, citing affordability constraints, limited for-sale housing inventory and elevated single-family mortgage rates. However, he said elevated long-term interest rates continue to constrain commercial real estate by anchoring capitalization rates, pressuring asset values and limiting access to attractively priced permanent financing. President Greg Calvert said Lument Finance Trust acquired or funded $48 million of loan assets during the quarter, effectively redeploying approximately the same amount of aggregate principal loan repayments received during the period. Flynn said the company generated $47 million of aggregate payoffs and used reinvestment proceeds to acquire two new multifamily loan assets for $47 million, along with a $1 million minority participation related to an existing loan asset. As of March 31, the company’s total loan portfolio consisted of 57 floating-rate loans with an aggregate unpaid principal balance of approximately $1.1 billion. The portfolio had a weighted average floating rate of 331 basis points over SOFR and an unamortized aggregate purchase discount of $1.3 million. Calvert said 100% of the portfolio was indexed to one-month SOFR and 93% was collateralized by multifamily properties. The weighted average remaining term of the portfolio was approximately 19 months, assuming borrowers exercise all available extensions. Approximately 77% of the portfolio was risk rated 3 or better at quarter-end, down from 83% as of Dec. 31. Calvert said the weighted average risk rating improved to 3.1 from 3.2, primarily because one risk-rated 5 loan was transferred to REO during the period. Briggs said the company ended the quarter with unrestricted cash of $21 million. Total book value of common stock was approximately $156 million, or $2.97 per share, down from $3.03 at Dec. 31. As of March 31, Lument Finance Trust had seven loans risk rated 5, all collateralized by multifamily assets. Calvert said those loans had an aggregate principal amount of approximately $108 million, representing about 10% of the unpaid principal balance of the quarter-end investment portfolio. The risk-rated 5 loans included three loans in maturity default with $51 million of aggregate unpaid principal balance, backed by multifamily properties in Philadelphia, Arlington, Texas, and Cedar Park, Texas. They also included four loans in monetary default with $57 million of aggregate unpaid principal balance, backed by multifamily properties in Tampa, Florida; Des Moines, Iowa; Tallahassee, Florida; and Ypsilanti, Michigan. Briggs said the company evaluated the seven risk-rated 5 loans individually and recorded approximately $550,000 of specific reserves. That increase was offset by a $1.3 million decrease in the general allowance, primarily driven by changes to the macroeconomic forecast. After a $2.4 million charge-off to the specific allowance for an asset transferred to REO, specific reserves totaled $15.8 million, or about 15% of the associated unpaid principal balance of specifically evaluated assets. During the quarter, the company foreclosed on one loan backed by a multifamily property in Colorado Springs. Calvert said that asset had an aggregate net carry value of $8.2 million, net of $4.2 million of specific reserves. At quarter-end, the REO portfolio consisted of four multifamily properties with an aggregate carry value of $57 million and a weighted average occupancy rate of 72%. Briggs said the company completed the sale of a San Antonio REO property at the beginning of May for net proceeds of $12.4 million, with no second-quarter profit-and-loss impact related to the sale. The company also disclosed that, after quarter-end, an Arlington, Texas defaulted loan was foreclosed on. Calvert said that asset had a net carry value of $18.2 million, net of $3.6 million of specific reserves. In response to a question from Val Albar, who was filling in for Jason Weaver of Jones Trading, Flynn said management’s expectation is to ensure that annual earnings cover the annual dividend. He said a key driver of improving dividend coverage would be the ability to deploy capital more efficiently, including through a potential new securitization transaction in the “relative near future,” depending on planned asset-level resolutions. Flynn said SOFR affects earnings, but added that leverage in securitization, appropriate loan spreads and a healthy capital markets environment on the liability side are larger factors. He said management is reviewing projections with the board over the next several quarters and years, with the goal of fully covering the dividend and, over time, potentially growing it as the portfolio is resolved and reinvested. Asked by Lee Zoltz of Ober/Cap about the sale of the San Antonio property and the outlook for other REO assets, Flynn said the company evaluates each asset based on whether it can be improved meaningfully within roughly six months without significant capital, whether a longer hold and limited reinvestment could produce better shareholder value, or whether the best option is to resolve and exit quickly. Calvert added that the REO and disposition process is highly specific to each asset, location and market backdrop, and said the company has seen general investor interest in the multifamily assets it has brought to market. Lument Finance Trust is a real estate investment trust that focuses on originating and acquiring senior secured loans backed by commercial real estate properties. Listed on the New York Stock Exchange under the ticker LFT, the company seeks to generate attractive risk‐adjusted returns by targeting floating‐rate, first‐mortgage loans across a broad range of property types, including multifamily, office, retail, industrial and hospitality. The firm's core business activity centers on deploying capital into short‐ and medium‐term financing solutions for institutional real estate owners and developers. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Lument Finance Trust Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.

NEW YORK, May 15, 2026 /PRNewswire/ -- Lument Finance Trust, Inc. (NYSE: LFT) ("we", "LFT" or "the Company") today reported its first quarter results. GAAP net loss attributable to common shareholders for the first quarter was $1.0 million, or $0.02 per share of common stock. Distributable earnings for the first quarter were $1.1 million, or $0.02 per share of common stock. The Company has also issued a detailed presentation of its results, which can be viewed at lumentfinancetrust.com. Conference Call and Webcast Information The Company will also host a conference call on Friday, May 15, 2026, at 1:00 p.m. ET to provide a business update and discuss the financial results for the first quarter of 2026. The conference call may be accessed by dialing 1-800-836-8184 (U.S.) or 1-646-357-8785 (international). Note: there is no passcode; please ask the operator to be joined into the Lument Finance Trust call. A live webcast, on a listen-only basis, is also available and can be accessed through the URL: https://app.webinar.net/a9jkw89JQ1r For those unable to listen to the live broadcast, a recorded replay will be available for on-demand viewing approximately one hour after the end of the event through the Company's website lumentfinancetrust.com and by telephone dial-in. The replay call-in number is 1-888-660-6345 (U.S.) or 1-646-517-4150 (international) with passcode 16714. Non-GAAP Financial Measures In this release, the Company presents certain financial measures that are not calculated according to generally accepted accounting principles in the United States ("GAAP"). Specifically, the Company is presenting distributable earnings, which constitutes a non-GAAP financial measure within the meaning of Item 10(e) of Regulation S-K and is net income under GAAP. While we believe the non-GAAP information included in this press release provides supplemental information to assist investors in analyzing our results, and to assist investors in comparing our results with other peer issuers, these measures are not in accordance with GAAP, and they should not be considered a substitute for, or superior to, our financial information calculated in accordance with GAAP. The methods of calculating non-GAAP financial measures may differ substantially from similarly titled measures used by other companies. Our GAAP financial results and the reconciliations from these results should be carefully evaluated. Distributable Earnings Distributable Earnings is a non-GAAP measure, which we define as GAAP net income (loss) attributable to holders of common stock computed in accordance with GAAP, including realized losses not otherwise included in GAAP net income (loss) and excluding (i) non-cash equity compensation, (ii) depreciation and amortization, (iii) any unrealized gains or losses or other similar non-cash items that are included in net income for that applicable reporting period, regardless of whether such items are included in other comprehensive income (loss) or net income (loss), and (iv) one-time events pursuant to changes in GAAP and certain material non-cash income or expense items after discussions with the Company's Board of Directors and approved by a majority of the Company's independent directors. Distributable Earnings mirrors how we calculate "Core Earnings" pursuant to the terms of our management agreement with our manager, Lument Investment Management, LLC ("Manager"), for purposes of calculating the incentive fee payable to our Manager. While Distributable Earnings excludes the impact of any unrealized provisions for credit losses, any loan losses are charged off and realized through Distributable Earnings when deemed non-recoverable. Non-recoverability is determined (i) upon the resolution of a loan (i.e. when the loan is repaid, fully or partially, or in the case of foreclosures, when the underlying asset is sold), or (ii) with respect to any amount due under any loan, when such amount is determined to be non-collectible. We believe that Distributable Earnings provides meaningful information to consider in addition to our net income (loss) and cash flows from operating activities determined in accordance with GAAP. We believe Distributable Earnings is a useful financial metric for existing and potential future holders of our common stock as historically, over time, Distributable Earnings has been a strong indicator of our dividends per share of common stock. As a REIT, we generally must distribute annually at least 90% of our taxable income, subject to certain adjustments, and therefore we believe our dividends are one of the principal reasons stockholders may invest in our common stock. Furthermore, Distributable Earnings help us to evaluate our performance excluding the effects of certain transactions and GAAP adjustments that we believe are not necessarily indicative of our current loan portfolio and operations and is a performance metric we consider when declaring our dividends. Distributable Earnings does not represent net income (loss) or cash generated from operating activities and should not be considered as an alternative to GAAP net income (loss), or an indication of GAAP cash flows from operations, a measure of our liquidity, or an indication of funds available for our cash needs. GAAP to Distributable Earnings Reconciliation About LFT LFT is a Maryland corporation focused on investing in, financing and managing a portfolio of commercial real estate debt investments. The Company primarily invests in transitional floating rate commercial mortgage loans with an emphasis on middle-market multi-family assets. LFT is externally managed and advised by Lument Investment Management LLC, a Delaware limited liability company. Additional Information and Where to Find It Investors, security holders and other interested persons may find additional information regarding the Company at the SEC's Internet site at sec.gov, the Company website at lumentfinancetrust.com, or by directing requests to: Lument Finance Trust, 230 Park Avenue, 20th Floor, New York, NY 10169, Attention: Investor Relations. Forward-Looking Statements Certain statements included in this press release constitute forward-looking statements intended to qualify for the safe harbor contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act, as amended. Forward-looking statements are subject to risks and uncertainties. You can identify forward-looking statements by use of words such as "believe," "expect," "anticipate," "project," "estimate," "plan," "continue," "intend," "should," "may," "will," "seek," "would," "could," or similar expressions or other comparable terms, or by discussions of strategy, plans or intentions. Forward-looking statements are based on the Company's beliefs, assumptions and expectations of its future performance, taking into account all information currently available to the Company on the date of this press release or the date on which such statements are first made. Actual results may differ from expectations, estimates and projections. You are cautioned not to place undue reliance on forward-looking statements in this press release and should consider carefully the factors described in Part I, Item IA "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, which is available on the SEC's website at sec.gov, and in the Company's other current or periodic filings with the SEC, when evaluating these forward-looking statements. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond the Company's control. Except as required by applicable law, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. View original content to download multimedia:https://www.prnewswire.com/news-releases/lument-finance-trust-reports-first-quarter-2026-results-302773527.html