NEW YORK, March 15, 2022 /PRNewswire/ -- Lument Finance
Trust, Inc. (NYSE: LFT) ("we", "LFT" or the "Company")
today reported its fourth quarter and full year 2021 results. Net
income attributable to common stockholders for the fourth quarter
was $2.5 million, or $0.10 per share of common
stock, and for the full year was $7.4 million,
or $0.30 per share of common stock. Distributable
earnings for the fourth quarter was $2.6 million,
or $0.11 per share of common stock, and for the full year
was $9.7 million, or $0.39 per share of common
stock. The Company has also issued a detailed presentation of
its results, which can be viewed
at www.lumentfinancetrust.com.
The Company also announced the declaration of a cash dividend
of $0.06 per share of common stock with respect to the
first quarter of 2022. The dividend is payable on April
15, 2022 to common stockholders of record as of the close of
business on March 31, 2022.
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 April 15, 2022 to
preferred stockholders of record as of the close of business on
April 1, 2022.
Performance Highlights – Full Year 2021
- Increased size of the CRE investment portfolio by 83% from
$547 million as of 12/31/20 to $1.0
billion as of 12/31/21
- Achieved a dividend coverage ratio of 108% for the full year on
a distributable EPS basis
- Continued to demonstrate strong asset performance with zero
delinquencies, monetary defaults, or impairments in the investment
portfolio
- Maintained multifamily investment focus, increasing multifamily
investment exposure from 90% as of 12/31/20 to 92% as of year-end 12/31/21
- Raised $58.1 million of preferred
equity via successful offering of 2.4 million shares of 7.875%
Series A Cumulative Redeemable Preferred Stock at $25.00 per share
- Successfully closed a $1.0
billion commercial real estate collateralized loan
obligation ("LMNT 2021-FL1") and redeemed all outstanding bonds of
two prior CRE CLOs in conjunction with the transaction
- Subsequent to year-end 2021, the Company raised approximately
$81.1 million of net proceeds and
issued 27.3 million new shares of common stock via a transferable
rights offering. This transaction increased the Company's
total common equity book value by approximately 75%
- Gained incremental sell-side equity research coverage during
the year
Conference Call and Webcast Information
The Company
will host a conference call on Wednesday, March, 16, 2022 at
8:30 AM ET to provide a business
update and fourth quarter and full year 2021 results. The
conference call may be accessed by dialing 1-888-336-7151 (US) or
1-412-902-4251 (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://www.webcaster4.com/Webcast/Page/2022/44892
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 1-877-344-7529 (US) or
1-412-317-0088 (International) with passcode 3493488.
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
Beginning in the fourth quarter
of 2020, the Company changed the name of it non-GAAP financial
measure from Core Earnings to Distributable Earnings. Although
calculated the same way as Core Earnings, the Company believes the
name change to Distributable Earnings better reflects what this
non-GAAP financial measure presents.
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) incentive compensation payable
to the Manager, (iii) depreciation and amortization, (iv) any
unrealized gains or losses or other similar non-cash items that are
included in net income for that applicable repotting period,
regardless of whether such items are included in other
comprehensive income (loss) or net income (loss), and (v) 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 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 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
|
|
Year Ended
|
|
|
December 31,
2021
|
|
December 31,
2020
|
|
December 31,
2021
|
|
December 31,
2020
|
Reconciliation of
GAAP to non-GAAP Information
|
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders
|
|
$
2,478,911
|
|
$
2,464,678
|
|
$
7,414,722
|
|
$
8,434,770
|
Adjustments for
non-Distributable Earnings
|
|
|
|
|
|
|
|
|
Unrealized loss on
mortgage servicing rights
|
|
56,106
|
|
177,476
|
|
356,772
|
|
1,780,528
|
Purchase premium
payoffs
|
|
-
|
|
-
|
|
150,990
|
|
-
|
Loss on
extinguishment of debt
|
|
-
|
|
-
|
|
1,663,926
|
|
-
|
Subtotal
|
|
56,106
|
|
177,476
|
|
2,171,688
|
|
1,780,528
|
Other
Adjustments
|
|
|
|
|
|
|
|
|
Recognized
compensation expense related to restricted
common stock
|
|
4,741
|
|
2,949
|
|
15,608
|
|
20,392
|
Adjustment for income
taxes
|
|
109,336
|
|
(38,861)
|
|
77,894
|
|
(476,248)
|
Subtotal
|
|
114,077
|
|
(35,912)
|
|
93,502
|
|
(455,856)
|
|
|
|
|
|
|
|
|
|
Distributable
Earnings
|
|
$
2,649,094
|
|
$
2,606,242
|
|
$
9,679,912
|
|
$
9,759,442
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding, basic and diluted
|
|
24,947,883
|
|
24,943,383
|
|
24,945,824
|
|
24,934,505
|
Distributable
Earnings per weighted share, basic and diluted
|
|
$
0.11
|
|
$
0.10
|
|
$
0.39
|
|
$
0.39
|
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 OREC Investment
Management, LLC d/b/a Lument Investment Management,
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.
Forward-Looking Statements
Certain statements included
in this press release, any related webcast / conference call, and
other oral statements made by our representatives from time to time
may 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. Statements regarding
the following subjects, among others, may be forward-looking: the
return on equity; the yield on investments; the ability to borrow
to finance assets; and risks associated with investing in real
estate assets, including changes in business conditions and the
general economy. 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/or
any related webcast / conference call and should consider carefully
the factors described in Part I, Item IA "Risk Factors" in our
annual reports on Form 10-K, our quarterly reports on Form 10-Q,
and other current or periodic filings with the Securities and
Exchange Commission ("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. Additionally, many of these
risks and uncertainties are currently amplified by and will
continue to be amplified by, or in the future may be amplified by,
the COVID-19 outbreak. Additional information concerning these and
other risk factors are contained in our 2021 10-K which is
available on the Securities and Exchange Commission's website
at www.sec.gov. Except as required by applicable law,
we disclaim any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
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SOURCE Lument Finance Trust, Inc.