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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Lument Finance Trust Inc | NYSE:LFT | NYSE | Common Stock |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| -0.01 | -0.40% | 2.50 | 2.578 | 2.50 | 2.53 | 87,015 | 01:00:00 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported):
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
(Address of principal executive offices)
(
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name
of each exchange on which registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| Item 2.02 | Results of Operations and Financial Condition. |
On May 9, 2024, Lument Finance Trust, Inc. (the “Company”) issued a press release (the “Release”) and supplemental financial information announcing its financial results for the quarter ended March 31, 2024. The Release and supplemental financial information are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and are incorporated herein by reference.
The information disclosed in “Item 2.02 Results of Operations and Financial Condition,” including Exhibits 99.1 and 99.2 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
| Item 9.01 | Exhibits. |
(d) Exhibits.
| 99.1 | Press Release of Lument Finance Trust, Inc., dated May 9, 2024. | |
| 99.2 | Supplemental Financial Information for the first quarter ended March 31, 2024. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| LUMENT Finance Trust, Inc. | ||
| Date: May 9, 2024 | By: | /s/ James A. Briggs |
| James A. Briggs | ||
| Chief Financial Officer | ||
Exhibit 99.1
Lument Finance Trust Reports First Quarter 2024 Results
NEW YORK, May 9, 2024 /PRNewswire/ — Lument Finance Trust, Inc. (NYSE: LFT) (“we”, “LFT” or “the Company”) today reported its first quarter results. Distributable earnings for the first quarter were $7.6 million, or $0.15 per share of common stock. GAAP net income attributable to common shareholders for the first quarter was $5.8 million, or $0.11 per share of common stock. The Company has also issued a detailed presentation of its results, which can be viewed at www.lumentfinancetrust.com.
Conference Call and Webcast Information
The Company will also host a conference call on Friday, May 10, 2024, at 8:30 a.m. ET to provide a business update and discuss the financial results for the first quarter of 2024. 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/Mdk5ymjEwRV
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 31313.
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 between our manager Lument Investment Management, LLC (“Manager”) and us, or our management agreement, for purposes of calculating the incentive fee payable to our Manager.
1
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
| Three Months Ended | ||||
| March 31, 2024 | ||||
| Reconciliation of GAAP to non-GAAP Information | ||||
| Net Income attributable to common shareholders | $ | 5,795,183 | ||
| Adjustments for non-Distributable Earnings | ||||
| Unrealized loss (gain) on mortgage servicing rights | (4,627 | ) | ||
| Unrealized provision for credit losses | 1,776,873 | |||
| Subtotal | 1,772,246 | |||
| Other Adjustments | ||||
| Adjustment for income taxes | 10,892 | |||
| Subtotal | 10,892 | |||
| Distributable Earnings | $ | 7,578,321 | ||
| Weighted average shares outstanding - Basic and Diluted | 52,249,299 | |||
| Distributable Earnings per weighted share outstanding - Basic and Diluted | $ | 0.15 | ||
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/ or 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.
2
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, 2023, which is available on the SEC’s website at www.sec.gov, and in 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.
Investor Relations Contact:
James Briggs
Chief Financial Officer
(212) 521-6323
james.briggs@lument.com
Media Contact:
Tyler Howard
Associate Director
(513) 403-1911
tyler.howard@lument.com
3
Exhibit 99.2
May 2024 Lument Finance Trust Q1 2024 Earnings Supplemental
Disclaimer 2 This presentation contains forward - looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect the current views of Lument Finance Trust, Inc. (NYSE: LFT) (“LFT,” the “Company,” “we,” “our,” or “us”) with respect to, among other things, the Company’s operations and financial performance. You can identify these forward - looking statements by the use of words such as “outlook,” “indicator,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “projects,” “intends,” “plans,” “estimates,” or “anticipates,” or the negative version of these words or other comparable words or other statements that do not relate strictly to historical or factual matters. Such forward - looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. The Company believes these factors include but are not limited to those described under the section entitled “Risk Factors” in its Annual Report on Form 10 - K for the year ended December 31, 2023, which is available on the SEC’s website at www.sec.gov . These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this presentation and in the filings. The forward - looking statements contained in this presentation speak only as of May 9th, 2024. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events or circumstances. This presentation includes non - GAAP financial measures, including Distributable Earnings. While we believe the non - GAAP information included in this presentation provides supplemental information to assist investors in analyzing our operating results and to assist investors in comparing our operating 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. Please refer to this presentation’s Appendix for a reconciliation of the non - GAAP financial measures included in this presentation to the most directly comparable financial measures prepared in accordance with GAAP.
Company Overview 3 Key Investment Highlights Strong Sponsorship/Ownership • Access to extensive loan origination platform through affiliation with Lument, a premier national mortgage originator and asset manager. • Experienced management team with an average of 20+ years of industry experience across multiple economic cycles. • Affiliation with ORIX Corporation USA, the US subsidiary of ORIX Corporation, the publicly traded Tokyo - based international financial services firm. • The Company is an externally - managed real estate investment trust focused on investing in, financing and managing a portfolio of commercial real estate debt investments. • The Company is externally managed by Lument Investment Management LLC, an affiliate of ORIX Corporation USA. Attractive Investment Profile • Emphasis on middle market multifamily debt investments which are well positioned for the current environment. • Strong credit and asset management capabilities. • Attractive financing source via match term, non - recourse, non mark - to - market, collateralized financing structures.
Q1 2024 Updates 4 Note: (1) We believe that Distributable Earnings provides meaningful information to consider in addition to our net income (los s) and cash flows from operating activities determined in accordance with GAAP. Distributable Earnings mirrors how we calculated Core Earnings in the past. Please see Appendix for reconciliation to GAAP. (2) See Appendix for definition of Book Value Per Share of Common Stock. (3) Based on carrying value. (4) If all extensions are exercised by the borrowers, the CRE loan portfolio will have a weighted average remaining term of 3 3 months. Financial Results • Q1 2024 GAAP net income attributable to common stockholders of $0.11 per share of common stock. • Q1 2024 Distributable Earnings (1) of $0.15 per share of common stock. • On March 15, 2024, the Company declared a cash dividend for the quarter of $0.07 per share of common stock. • The Company also declared a cash dividend for the quarter of $0.49219 per share of 7.875% Cumulative Redeemable Series A Preferred Stock. • Q1 2024 Book Value Per Share of Common Stock of $3.50 (2) . Notable Activity • During the quarter, the Company experienced $97.4 million of loan payoffs. Portfolio Performance • As of March 31, 2024, the Company’s investment portfolio consisted of floating - rate CRE loans of which approximately 93.6% (3) were collateralized by multifamily assets. • As of March 31, 2024, the Company’s $1.3 billion loan portfolio had a weighted average remaining term of 11 months (4) , a weighted average interest rate of SOFR + 3.60%, and unamortized purchase discounts of $6.3 million. • The weighted average risk rating of the portfolio remained unchanged from the prior quarter at 3.5, with 76.9% of the portfolio rated “3” (Moderate Risk) or better. • No asset - specific reserves were recorded during the period. Capitalization • The floating - rate CRE loan portfolio is financed primarily through the Company’s two outstanding non - mark - to - market secured financings: • $762.5 million of investment grade notes issued through LMNT 2021 - FL1. • $317.7 million of investment grade notes issued through LMF 2023 - 1. • As of March 31, 2024, the Company held cash and cash equivalents of $64.6 million with a leverage ratio of 4.7x, a decrease of 0.3x from 5.0x in the prior quarter. • No corporate debt maturities until 2026.
Q1 2024 Balance Sheet Summary 5 Balance Sheet (thousands) March 31, 2024 (1) Commercial mortgage loans held - for - investment (net of allowance for credit losses) $1,285,479 Cash and cash equivalents 64,573 Restricted cash (2) 72 Accrued interest receivable 8,463 Investment related receivable 17,320 Other assets (3) 2,284 Total assets $1,378,192 Secured financings (4) $1,075,890 Credit facility (4) 47,282 Other liabilities 12,084 Total liabilities $1,135,257 Total equity $242,935 Total liabilities / total equity 4. 7x Book Value Per Share of Common Stock (5) $3.50 Note: (1) See Appendix for detailed consolidated balance sheet, including the Company’s consolidated variable interest entities (“VIE’s”). (2) Restricted cash held by LMF 2023 - 1 is available for investment in eligible mortgage assets. (3) Includes mortgage servicing rights, carried at fair value of $0.7 million. (4) Outstanding principal amount of investment grade notes issued by LMNT 2021 - FL1 and LMF 2023 - 1 is $762.5 million and $317.7 million, respectively. The unpaid principal balance of the credit facility is $47.8 million. For GAAP purposes, these liabilities are carried at their outstanding unpaid principal balance, net of any una mor tized discounts and debt issuance costs. (5) See Appendix for definition of Book Value Per Share of Common Stock.
Q1 2024 Income Statement Summary 6 Summary Income Statement (thousands) Three Months Ended March 31, 2024 Net interest income $12,993 Total other income (loss) (1,734) Operating expenses (4,268) Benefit (provision) from income taxes (11) Preferred dividends (1,185) Net income attributable to common stockholders $5,795 Weighted average shares outstanding during the period, basic and diluted 52,249,299 Net income attributable to common stockholders per share $0.11 GAAP Net Income to Distributable Earnings Reconciliation (thousands) Three Months Ended March 31, 2024 Net Income attributable to common stockholders $5,795 Adjustments: Unrealized (gains) losses on mortgage servicing rights (5) Unrealized provision for credit losses 1,777 Provision for (benefit from) income taxes 11 Distributable Earnings (1) $7,578 Weighted average shares outstanding during the period, basic and diluted 52,249,299 Distributable Earnings per share of common stock $0.15 Dividend per share of common stock $0.07 Note: (1) See Appendix for definition of Distributable Earnings and reconciliation to GAAP.
Earnings and Book Value Per Share of Common Stock 7 $0.04 $0.11 $0.10 $0.15 $0.06 $0.07 $0.07 $0.07 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Distributable Earnings Dividends $3.43 $3.46 $3.46 $3.50 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Distributable Earnings (1) & Dividends Per Share of Common Share Book Value Per Share of Common Stock (2) Note: (1) See Appendix for definition of Distributable Earnings. (2) See Appendix for definition of Book Value Per Share of Common Stock.
Investment Portfolio 8 Geographic Concentration (2) Multifamily , $1,203.1 , 93.6% Seniors Housing & Healthcare , $75.1 , 5.8% Self Storage , $7.3 , 0.6% Property Type (2) $1,285.5 Note: (1) Based on carrying value. (2) $ In millions, based on carrying value. • On March 31, 2024, the Company owned a portfolio of floating - rate CRE loans with a carrying value of $1.3 billion. 93.6% (1) of the portfolio was invested in loans collateralized by multifamily assets. • The Company anticipates that it will continue to focus on investment opportunities within multifamily credit. The Company does not currently own any hospitality, retail, or office loan assets and has limited exposure to seniors housing and self - storage. TX , $390.1 , 30.3% FL , $210.1 , 16.3% GA , $140.5 , 10.9% NJ , $96.5 , 7.5% NC , $59.2 , 4.6% Other States , $389.1 , 30.3% $1,285.5
Q1 2024 Loan Activity 9 Multifamily , $97.4 , 100.0% Q1 Payoffs by Property Type (1) $97.4 • The Company experienced $97.4 million of loan payoffs during the quarter. Note: (1) $ In millions, based on carrying value. (2) Portfolio balances shown based on carrying value net of allowances. “Other Activity” consists of the accrued deferred ori gi nation fees and purchase discount accretion. Portfolio Activity (2) $1,383.9 $(97.4) $(1.8) $0.8 $1,285.5 Q4 2023 Portfolio Payoffs / Sales Provision for Loan Losses Other Activity Q1 2024 Portfolio
Portfolio Credit 10 • As of March 31, 2024, 97.1 % of the Company’s portfolio was performing (1) , with 76.9% of the portfolio rated “3” (Moderate Risk) or better. • Weighted average risk rating (2) of 3.5 remained unchanged quarter over quarter. 98.8% 95.0% 96.7% 97.1% 5.1% 5.3% 5.3% 5.3% -1.00% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 6/30/23 9/30/23 12/31/23 3/31/24 % Performing Average 1M SOFR Asset Performance (1) Weighted Average Risk Rating (2) Note: (1) An asset is defined as performing if it is not in default, or not on non - accrual status. (2)Weighted average risk rating is weighted based on carrying value of portfolio assets. 3.4 3.4 3.5 3.5 2.90 3.00 3.10 3.20 3.30 3.40 3.50 3.60 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 6/30/2023 9/30/2023 12/31/2023 3/31/2024 1 2 3 4 5 Weighted Avg Risk Rating
Q1 2024 Capital Structure Overview 11 78.8% 13.3% 4.4% 3.5% Secured Financing Common Equity Preferred Equity Term Loan $1,370.8 Capital Structure Composition (1) Capital Structure Detail Note: (1) In millions. LFT total capitalization is a non - GAAP measure which excludes certain Balance Sheet items; Please see App endix for reconciliation to GAAP. (2) Secured financing shown at par value. LMNT 2021 - FL1 GAAP carrying value of $761.3 million includes $1.3 million of unamorti zed debt issuance costs. LMF 2023 - 1 carrying value of $314.6 million includes $3.1 million of unamortized debt issuance costs. (3) Term loan shown at par value. GAAP carrying value of $47.3 million includes $0.5 million of unamortized debt issuance cos ts . (4) Preferred equity shown at $60 million liquidation preference. (5) Noncontrolling interest was $99,500 as of 3/31/2024 and is excluded from common equity above. Match Term Non - Recourse Financing • The Company does not currently utilize repurchase or warehouse facility financing and therefore is not subject to margin calls on any of its assets from repo or warehouse lenders. • Primary sources of financing include two secured financings (LMNT 2021 - FL1 and LMF 2023 - 1), preferred stock, and a corporate term loan. ($ in millions) Secured Financings (2) Maturity Date Rate Advance Rate Amount LMNT 2021-FL1 July 2032 S + 1.57% 82.1% $762.5 LMF 2023-1 Financing June 2039 S + 3.14% 82.2% $317.7 Credit Facilities Term Loan (3) February 2026 7.25% $47.8 Total Debt $1,128.0 Equity Preferred Equity (4) N/A 7.875% $60.0 Book Value of Common Equity (5) N/A $182.8 Total Capitalization (1) $1,370.8
$0.01 - $0.01 - $0.02 - $0.03 - $0.04 +25 bps 0 bps -25 bps -50 bps -75 bps -100 bps Net Interest Income Sensitivity to Shifts in Term SOFR 12 Floating Rate Assets (3) $1,300 Floating Rate Liabilities (4) - $1,080 Net Exposure $220 Floating - Rate Exposure (2) Net Interest Income Per Share Sensitivity to Change in SOFR (5) Note: (1) The Company converted its LIBOR - based loans and CLO liabilities to term SOFR on July 6 th , 2023. (2) In millions. Net Exposure represents UPB of floating rate portfolio assets net of par value of secured floating rate debt o utstanding. (3) Figure reflects unpaid principal balance of floating - rate loan portfolio. (4) Comprised of outstanding securitization notes related to 2021 - FL1 and LMF 2023 - 1, both of which are indexed to one - month SO FR. Figure reflects par value of notes. (5) Annualized impact per common share. Assumes starting 30 - day term SOFR of 5.31%. • 100% floating - rate loan portfolio. • 100% of portfolio is indexed to 30 - day term SOFR (1) .
Appendix
3/31/2024 CRE Loan Portfolio Details 14 Continued on the following page Note: (1) LTV as of the date the loan was originated by an affiliate. LTV has not been updated for any subsequent draws or loan modifications and is not reflective of any changes in value which may have occurred subsequent to the origination date. # Loan Name Closing Date Maturity Date Property Type City State Unpaid Principal Balance Note Spread Unamortized Discount/Premium Initial Term (months) As-Is LTV at Origination (1) 1 Loan 1 12/16/2021 1/3/2025 Multifamily Daytona FL 51,375,000 3.16% 0 37 71.70% 2 Loan 2 6/8/2021 7/5/2024 Multifamily Chattanooga TN 33,360,000 3.76% 0 37 79.76% 3 Loan 3 11/22/2019 4/5/2024 Multifamily Virginia Beach VA 33,227,466 4.11% 0 53 77.10% 4 Loan 4 3/22/2022 4/5/2025 Multifamily Seneca SC 31,876,244 3.35% (547,294) 37 74.54% 5 Loan 5 6/28/2022 7/3/2025 Multifamily Dallas TX 31,602,808 3.90% (449,810) 36 71.59% 6 Loan 6 12/29/2021 1/6/2025 Multifamily Multi NC 30,709,146 3.96% 0 36 59.90% 7 Loan 7 6/8/2021 7/5/2024 Multifamily Miami FL 30,576,666 3.31% 0 37 74.26% 8 Loan 8 5/20/2021 6/6/2024 Multifamily Marietta GA 30,220,508 3.21% (8,361) 37 77.02% 9 Loan 9 8/25/2022 9/5/2025 Multifamily Wilmington NC 28,653,440 4.00% 0 36 71.45% 10 Loan 10 6/7/2021 7/5/2024 Multifamily San Antonio TX 27,569,521 3.51% (2,165) 37 80.00% 11 Loan 11 11/2/2021 11/5/2024 Multifamily Melbourne FL 26,049,291 3.81% (153,724) 36 72.09% 12 Loan 12 8/26/2021 8/5/2024 Multifamily Clarkston GA 25,440,413 3.61% (728) 35 79.00% 13 Loan 13 11/15/2021 12/6/2024 Multifamily El Paso TX 24,330,000 3.21% 0 37 75.96% 14 Loan 14 10/18/2021 11/6/2024 Multifamily Cherry Hill NJ 23,348,000 3.11% 0 37 72.40% 15 Loan 15 8/26/2021 9/5/2024 Multifamily Union City GA 22,872,354 3.46% (2,501) 36 70.40% 16 Loan 16 4/27/2022 5/5/2025 Multifamily North Brunswick NJ 22,182,443 3.40% (119,952) 36 79.90% 17 Loan 17 3/22/2022 4/5/2025 Multifamily York PA 21,934,375 3.30% (489,334) 37 79.17% 18 Loan 18 11/16/2021 12/5/2024 Multifamily Dallas TX 21,916,753 3.31% (6,836) 37 73.54% 19 Loan 19 7/8/2022 8/5/2025 Multifamily Arlington TX 21,818,465 3.75% (288,166) 37 67.10% 20 Loan 20 8/31/2021 9/6/2024 Multifamily Houston TX 21,644,684 3.41% (1,454) 36 74.20% 21 Loan 21 11/29/2022 12/5/2025 Seniors Housing & Healthcare Glendale WI 20,360,000 4.00% 0 36 45.00%
3/31/2024 CRE Loan Portfolio Details 15 Continued on the following page Note: (1) LTV as of the date the loan was originated by an affiliate. LTV has not been updated for any subsequent draws or loan modifications and is not reflective of any changes in value which may have occurred subsequent to the origination date. # Loan Name Closing Date Maturity Date Property Type City State Unpaid Principal Balance Note Spread Unamortized Discount/Premium Initial Term (months) As-Is LTV at Origination (1) 22 Loan 22 6/10/2022 7/5/2025 Multifamily Various GA 20,250,372 3.75% (293,429) 37 75.79% 23 Loan 23 11/5/2021 11/5/2024 Multifamily Orlando FL 19,625,274 3.11% (3,944) 36 78.05% 24 Loan 24 4/13/2022 5/5/2025 Multifamily Decatur GA 18,989,494 3.55% (305,685) 37 75.70% 25 Loan 25 11/21/2022 12/5/2025 Seniors Housing & Healthcare Houston TX 18,920,000 4.00% 0 37 67.00% 26 Loan 26 11/23/2021 12/5/2024 Multifamily Orange NJ 18,834,024 3.31% (4,062) 36 78.00% 27 Loan 27 2/2/2022 2/6/2025 Multifamily Houston TX 18,660,822 3.50% (115,127) 36 77.50% 28 Loan 28 2/11/2022 3/5/2025 Multifamily Tampa FL 18,599,480 3.60% 0 37 77.99% 29 Loan 29 5/26/2022 6/6/2024 Multifamily Brooklyn NY 17,263,000 3.75% 0 24 64.30% 30 Loan 30 3/31/2022 4/5/2025 Multifamily Tallahassee FL 16,956,276 3.30% (341,568) 36 74.80% 31 Loan 31 11/10/2022 12/5/2025 Seniors Housing & Healthcare Austin TX 16,690,000 4.00% 0 37 65.00% 32 Loan 32 12/1/2021 12/5/2024 Multifamily Horn Lake MS 15,449,323 3.41% (11,673) 36 75.70% 33 Loan 33 2/1/2022 2/5/2025 Multifamily San Antonio TX 15,400,000 3.45% 0 36 79.79% 34 Loan 34 4/6/2022 4/4/2025 Multifamily Vineland NJ 15,347,180 3.75% (231,868) 36 77.00% 35 Loan 35 4/6/2022 4/5/2025 Multifamily Haltom City TX 15,156,425 3.45% (235,915) 36 74.10% 36 Loan 36 12/2/2021 12/6/2024 Multifamily Colorado Springs CO 15,010,343 3.11% 0 36 72.48% 37 Loan 37 2/22/2022 3/5/2025 Multifamily Philadelphia PA 15,000,000 3.80% 0 36 80.00% 38 Loan 38 6/15/2022 7/5/2025 Multifamily Denton TX 14,511,455 3.90% (8,425) 37 73.00% 39 Loan 39 7/26/2022 8/5/2025 Multifamily Atlanta GA 14,351,599 3.65% (253,084) 36 65.15% 40 Loan 40 4/27/2022 5/5/2025 Multifamily Houston TX 14,171,704 3.70% (209,847) 36 79.60% 41 Loan 41 1/13/2022 2/5/2025 Multifamily Indianapolis IN 14,119,842 3.75% (148,918) 37 80.00% 42 Loan 42 11/21/2022 12/5/2025 Seniors Housing & Healthcare Southlake TX 14,030,000 4.00% 0 37 48.00% 43 Loan 43 12/28/2021 1/3/2025 Multifamily Houston TX 14,000,000 3.25% (199,045) 36 71.22% 44 Loan 44 5/13/2022 6/5/2025 Multifamily Decatur AL 13,885,769 3.50% (111,969) 37 59.21%
3/31/2024 CRE Loan Portfolio Details 16 Continued on the following page Note: (1) LTV as of the date the loan was originated by an affiliate. LTV has not been updated for any subsequent draws or loan modifications and is not reflective of any changes in value which may have occurred subsequent to the origination date. # Loan Name Closing Date Maturity Date Property Type City State Unpaid Principal Balance Note Spread Unamortized Discount/Premium Initial Term (months) As-Is LTV at Origination (1) 45 Loan 45 4/12/2021 5/5/2024 Multifamily Cedar Park TX 13,666,721 3.86% 0 37 66.70% 46 Loan 46 6/10/2022 7/5/2025 Multifamily Blakely PA 13,625,505 3.90% (93,166) 37 75.00% 47 Loan 47 10/6/2023 10/4/2024 Multifamily Garfield NJ 13,191,852 4.00% 0 12 65.50% 48 Loan 48 12/13/2021 1/5/2025 Multifamily Evansville IN 12,600,000 3.41% 0 37 74.30% 49 Loan 49 12/28/2021 1/3/2025 Multifamily Houston TX 12,322,717 3.25% (90,937) 36 71.20% 50 Loan 50 1/25/2022 2/6/2025 Multifamily Corpus Christi TX 12,249,079 3.55% (137,716) 36 78.76% 51 Loan 51 5/12/2022 6/5/2025 Multifamily Ypsilanti MI 11,926,591 3.50% (179,969) 37 68.40% 52 Loan 52 12/10/2021 1/5/2025 Multifamily Los Angeles CA 11,662,582 3.61% (261,761) 37 67.93% 53 Loan 53 3/4/2022 3/5/2025 Multifamily Houston TX 11,467,505 3.45% (248,625) 36 78.30% 54 Loan 54 4/14/2022 5/5/2025 Multifamily Irving TX 11,287,602 3.50% (182,312) 37 74.90% 55 Loan 55 10/28/2021 11/6/2024 Multifamily Tampa FL 11,202,535 3.06% 0 36 75.70% 56 Loan 56 4/23/2021 5/6/2024 Multifamily Tualatin OR 10,986,357 3.31% (684) 36 73.90% 57 Loan 57 5/3/2022 5/5/2025 Multifamily Port Richey FL 10,818,945 3.55% (215,083) 36 79.05% 58 Loan 58 9/30/2021 10/4/2024 Multifamily Clearfield UT 10,795,000 3.26% 0 36 67.98% 59 Loan 59 12/29/2021 1/3/2025 Multifamily Phoenix AZ 10,615,094 3.76% (5,400) 36 75.90% 60 Loan 60 6/28/2022 7/4/2025 Multifamily Colorado Springs CO 10,531,845 3.90% 0 36 73.06% 61 Loan 61 12/2/2021 12/6/2024 Multifamily Tomball TX 9,975,000 3.51% 0 36 68.50% 62 Loan 62 11/23/2021 12/5/2024 Multifamily Atlanta GA 9,856,000 3.46% 0 36 79.50% 63 Loan 63 1/14/2022 2/5/2025 Multifamily Houston TX 9,609,250 3.60% 0 37 78.76% 64 Loan 64 7/14/2022 8/5/2025 Multifamily Bradenton FL 9,429,206 3.90% (73,762) 37 74.40% 65 Loan 65 8/5/2022 8/5/2025 Multifamily San Antonio TX 9,127,649 4.35% (41,043) 36 75.00% 66 Loan 66 10/29/2021 11/5/2024 Multifamily Riverside MO 8,717,380 3.51% (5,008) 36 76.60%
3/31/2024 CRE Loan Portfolio Details 17 Note: (1) LTV as of the date the loan was originated by an affiliate. LTV has not been updated for any subsequent draws or loan modifications and is not reflective of any changes in value which may have occurred subsequent to the origination date. # Loan Name Closing Date Maturity Date Property Type City State Unpaid Principal Balance Note Spread Unamortized Discount/Premium Initial Term (months) As-Is LTV at Origination (1) 67 Loan 67 6/22/2022 7/3/2025 Multifamily Des Moines IA 8,175,500 4.00% 0 36 72.03% 68 Loan 68 5/26/2022 6/5/2025 Multifamily Haltom City TX 8,116,833 4.00% (72,028) 36 74.38% 69 Loan 69 6/24/2022 7/6/2025 Multifamily Moncks Corner SC 7,934,160 4.15% 0 36 67.80% 70 Loan 70 6/3/2022 6/5/2025 Self Storage Deer Park NY 7,367,500 3.60% (57,051) 36 72.50% 71 Loan 71 9/28/2021 10/4/2024 Multifamily Chicago IL 7,286,000 3.76% 0 36 75.90% 72 Loan 72 7/1/2021 7/5/2024 Multifamily Harker Heights TX 7,169,838 3.71% 0 36 72.30% 73 Loan 73 10/7/2022 11/5/2024 Multifamily Fairborn OH 7,000,000 4.10% 0 25 79.10% 74 Loan 74 10/24/2022 11/6/2024 Seniors Housing & Healthcare Various FL 6,100,000 4.50% 0 24 71.00% 75 Loan 75 4/8/2022 5/5/2025 Multifamily St. Petersburg FL 6,096,412 4.00% (78,539) 37 75.50% 76 Loan 76 5/21/2021 6/6/2024 Multifamily Youngtown AZ 5,994,000 3.76% 0 37 71.40% 77 Loan 77 7/14/2021 8/6/2024 Multifamily Birmingham AL 5,913,912 3.81% (368) 37 71.69% 78 Loan 78 11/19/2021 12/5/2024 Multifamily Huntsville AL 5,519,604 3.86% (1,290) 37 78.75% 79 Loan 79 4/30/2021 5/5/2024 Multifamily Daytona Beach FL 5,285,500 3.76% 0 36 77.40% 80 Loan 80 12/13/2021 1/5/2025 Multifamily Evansville IN 5,250,000 3.41% 0 37 73.90% 81 Loan 81 10/6/2023 10/4/2024 Multifamily Garfield NJ 4,808,148 4.00% 0 12 65.50% Total / Average 1,299,971,777 3.60% (6,289,627) 36 73.02%
Consolidated Balance Sheets 18
Consolidated Statement of Income 19
Detailed Walk of Allowance for Loan Losses 20
Reconciliation of Net Income to Distributable Earnings 21 For the Three Months Ended GAAP to Distributable Earnings Reconciliation March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 Reconciliation of GAAP to non - GAAP Information Net income attributable to common stockholders $5,795,183 $3,828,893 $5,174,685 $1,389,185 Adjustments for non - Distributable earnings Unrealized losses (gains) on mortgage servicing rights (4,627) 56,334 (1,573) (206) Unrealized provision for credit losses 1,776,873 1,357,254 791,563 555,083 Subtotal 1,772,246 1,413,588 789,990 554,877 Other Adjustments Recognized compensation expense related to restricted common stock - - - 2,836 Adjustment for income taxes 10,892 (4,057) 19,803 223 Subtotal 10,892 (4,057) 19,803 3,059 Distributable Earnings $7,578,321 $5,238,424 $5,984,478 $1,947,121 Weighted average shares outstanding, b asic and diluted 52,249,299 52,231,722 52,231,152 52,231,152 Distributable Earnings per share of common stock , b asic and diluted $0.15 $0.10 $0.11 $0.04
Detailed Walk of Capitalization as of 3/31/2024 22 (in 000's) 3/31/2024 Total GAAP liabilities and stockholders' equity $1,378,092 Adjustments for Capitalization ( - ) Accrued interest payable (3,851) ( - ) Dividends payable (4,659) ( - ) Fees and expenses payable to Manager (3,073) ( - ) Other accounts payable and accrued expenses (502) ( + ) Other capitalized financing & issuance costs 4,823 LFT Capitalization $1,370,832
Book Value Per Share of Common Stock as of 3/31/2024 23 (in 000's) Book Value per Share of Common Stock Total stockholders’ equity $242,935 ( - ) Preferred equity (1) (60,000) ( - ) Non - controlling interest (100) Common equity $182,836 Shares outstanding 52,257,315 Book Value Per Share of Common Stock $3.50 Note: (1) Reflects 2.4 million shares of the Company’s 7.875% Series A Cumulative Redeemable Preferred Stock outstanding at a $ 25 liquidation preference per share.
Key Definitions 24 “ Book Value Per Share of Common Stock ” is calculated as: a) total stockholders’ equity computed in accordance with GAAP less the value of the issued and outstanding preferred stock at its stated liquidation preference of $25.00 per share, divided by b) the weight ed average number of shares of common stock issued and outstanding during the period, basic and diluted. “ Distributable Earnings ” is a non - GAAP measure, which we define as GAAP net income (loss) attributable to holders' of common stock, or, without duplication, owners of the Company's subsidiaries, computed in accordance with GAAP, including realized losses not ot her wise 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. We also add back one - time charges such as acquisition costs and one - time gains/losses on the early extinguishment of debt and redemption of preferred stock. Distributable Earnings mirrors how we calculate Core Earnings pursu ant to the terms of our management agreement between our Manager and us, or our Management Agreement, for purposes of calculating the incentive fee payable to our Manager. While Distributable Earnings excludes the impact of any unrealized provisions for credi t l osses, any loan losses are charged off and realized through Distributable Earnings when deemed non - recoverable. Non - recoverability is determine d (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 underlyi ng 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 c ash flows from operating activities determined in accordance with GAAP. We believe Distributable Earnings is a useful financial metric for e xis ting and potential future holders of our common stock as historically, over time, Distributable Earnings has been a strong indicator o f o ur dividends per share. As a REIT, we generally must distribute annually at least 90% of our taxable income, subject to certain adjustment s, and therefore we believe our dividends are one of the principal reasons stockholders may invest in our common stock. Refer to Note 16 to ou r c onsolidated financial statements for further discussion of our distribution requirements as a REIT. Furthermore, Distributable Earnings h elp us to evaluate our performance excluding the effects of certain transactions and GAAP adjustments that we believe are not necessarily indica tiv e 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 con sid ered as an alternative to GAAP net income (loss), or an indication of GAAP cash flows from operations, a measure of our liquidity, or an in dication of funds available for our cash needs. In addition, our methodology for calculating Distributable Earnings may differ from the m eth odologies employed by other companies to calculate the same or similar performance measures, and accordingly, our reported Distributabl e E arnings may not be comparable to the Distributable Earnings reported by other companies.
May 2024
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