Lument Finance Trust, Inc. (LFT) reported a net income of $17.9 million, or $0.34 per share, for the fiscal year ending December 31, 2024, reflecting a 19.5% increase from the previous year's net income of $15.0 million, or $0.29 per share. The company's total revenue for the year was $119.4 million, primarily driven by a 12% increase in interest income from commercial mortgage loans held for investment, which rose to $119.4 million from $106.8 million in 2023. This growth in revenue was partially offset by a rise in interest expenses, which increased to $80.8 million from $74.8 million, leading to a net interest income of $41.4 million, up 20% from $34.4 million in the prior year.
In terms of operational changes, LFT's investment strategy remains focused on transitional floating-rate commercial real estate (CRE) mortgage loans, with a significant emphasis on middle-market multifamily assets. As of December 31, 2024, the company held a portfolio of 65 senior secured floating-rate loans with an aggregate unpaid principal balance of $1.1 billion, 92.3% of which was supported by multifamily assets. The company originated or acquired $58.4 million in loans during the year while experiencing $391 million in loan repayments, resulting in net repayments of $332.6 million.
LFT's financing strategy includes non-recourse collateralized loan obligations (CLOs) and secured financings, which totaled approximately $1.4 billion as of December 31, 2024. The company reported that its financing arrangements are not subject to margin calls or additional collateralization requirements, providing a stable funding base for its operations. The average spread on its secured borrowings was 2.26% as of the end of the year, with all borrowings being term-matched to the underlying loans.
Looking ahead, LFT's management expressed cautious optimism regarding the company's ability to navigate the current economic landscape characterized by elevated interest rates and inflation. The U.S. Federal Reserve's recent rate cuts in 2024 may provide some relief, but the company remains vigilant about potential impacts on its borrowers' cash flows and overall market liquidity. The company aims to maintain its REIT qualification by distributing at least 90% of its taxable income, which may limit its ability to retain earnings for growth. As of December 31, 2024, LFT had unrestricted cash and cash equivalents of $69.2 million, positioning it to meet short-term liquidity needs while continuing to pursue its investment strategy.
About Lument Finance Trust, Inc.
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