Lument Finance Trust's Second Quarter 2024 Results
Lument Finance Trust, Inc. ("LFT") has announced its financial results for the second quarter of 2024. The company reported a GAAP net income attributable to common shareholders of $3.4 million, translating to $0.07 per share. Meanwhile, the distributable earnings for the quarter were $4.8 million, or $0.09 per share.
Understanding Non-GAAP Financial Measures
In its financial disclosures, LFT has presented non-GAAP measures, specifically "Distributable Earnings". These measures differ from GAAP (Generally Accepted Accounting Principles). Distributable Earnings are calculated by adjusting the GAAP net income to exclude non-cash items like equity compensation and depreciation, and include realized losses not captured in GAAP net income.
Why Non-GAAP Measures?
LFT believes that these measures provide investors with additional insights to better analyze company performance and compare it with peers. However, it should be noted that these measures should not replace or be considered superior to GAAP measures.
Distributable Earnings: A Closer Look
Distributable Earnings is a vital metric for LFT, as it gives a clearer picture of the income available for dividends. As a Real Estate Investment Trust (REIT), LFT is required to distribute at least 90% of its taxable income annually, with dividends being a key attraction for investors.
Key Components
- Adjustments Excluded: Non-cash equity compensation, depreciation, certain unrealized gains or losses.
- Loan Losses: Realized losses are included when loans are deemed non-recoverable.
GAAP to Distributable Earnings Reconciliation
For the quarter ending June 30, 2024, LFT has provided a detailed reconciliation:
- Net Income to Shareholders: $3,413,445
- Adjustments: Including $1,399,703 for credit losses.
- Distributable Earnings: Totaling $4,822,392
The weighted average shares outstanding stood at 52,266,174, resulting in Distributable Earnings per share of $0.09.
About Lument Finance Trust
LFT is a Maryland corporation that focuses on commercial real estate debt investments, primarily transitional floating-rate mortgage loans. Their emphasis is on middle-market multi-family assets. Managed by Lument Investment Management LLC, the company continues to leverage its expertise in financing and managing its portfolio effectively.
For investors and potential stakeholders, understanding these financial metrics is crucial in assessing LFT’s financial health and future prospects. Always consider both GAAP and non-GAAP measures to get a comprehensive view of the company's performance.
