Lument Finance Trust Inc Reports Solid 2023 Results and Announces Dividends
GAAP Net Income: $3.8 million for Q4 and $15.0 million for the full year 2023.
Distributable Earnings: $5.2 million for Q4 and $13.3 million for the full year 2023.
Dividends: Declared quarterly dividends for common stock ($0.07 per share) and preferred stock ($0.4921875 per share).
Non-GAAP Financial Measures: Distributable earnings presented as a supplemental metric.
Conference Call: Scheduled for March 18, 2024, to discuss Q4 and full-year results.
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On March 15, 2024, Lument Finance Trust Inc (NYSE:LFT) released its 8-K filing, announcing its financial results for the fourth quarter and the full year of 2023. The company, which operates as a real estate investment trust (REIT), specializes in the investment, financing, and management of a portfolio of commercial real estate debt investments, focusing primarily on transitional floating-rate commercial mortgage loans.
Financial Performance and Dividend Declarations
LFT reported a GAAP net income attributable to common shareholders of $3.8 million, or $0.07 per share, for the fourth quarter, and $15.0 million, or $0.29 per share, for the full year. The company's distributable earnings, a non-GAAP financial measure, were $5.2 million, or $0.10 per share, for the fourth quarter, and $13.3 million, or $0.26 per share, for the full year. This measure is considered by LFT to be a strong indicator of its ability to pay dividends to shareholders.
Reflecting confidence in its financial position, LFT declared a cash dividend of $0.07 per share of common stock for the first quarter of 2024, payable on April 15, 2024, to shareholders of record as of March 28, 2024. Additionally, a cash dividend of $0.4921875 per share of 7.875% Cumulative Redeemable Series A Preferred Stock was announced, payable on the same date to preferred stockholders of record as of April 1, 2024.
Understanding Distributable Earnings
The concept of distributable earnings is pivotal for REITs like LFT, as it adjusts GAAP net income by excluding non-cash items and certain one-time events, providing a clearer picture of the company's operational performance and its ability to generate cash for dividends. LFT's management uses this metric to assess performance and make dividend decisions, aligning with the requirement for REITs to distribute at least 90% of their taxable income to shareholders.
"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," stated LFT in its earnings release.
However, LFT cautions that distributable earnings do not represent net income or cash flow from operations as determined by GAAP and should not be considered as an alternative to these measures.
Key Financial Metrics and Reconciliation
The reconciliation from GAAP net income to distributable earnings for the fourth quarter includes adjustments for unrealized gains or losses and non-cash items such as unrealized provisions for credit losses. For the full year, the adjustments also account for realized losses on commercial mortgage loans and compensation expense related to restricted common stock.
LFT's financial achievements, particularly in distributable earnings, underscore its ability to maintain a stable income stream and manage its loan portfolio effectively. This is crucial for investors seeking consistent dividend-paying stocks, especially in the commercial real estate sector where LFT operates.
Investors and stakeholders can access more detailed information about LFT's financial results and upcoming conference call, scheduled for March 18, 2024, on the company's website or through the provided webcast link.
For further insights into LFT's financials and strategic outlook, interested parties are encouraged to join the upcoming conference call or access the replay through the company's website or by telephone dial-in.
Lument Finance Trust Inc remains committed to transparency and shareholder value, as evidenced by its detailed financial reporting and proactive communication strategy.
Explore the complete 8-K earnings release (here) from Lument Finance Trust Inc for further details.
This article first appeared on GuruFocus.
