Lument Finance Trust, Inc. reported a net loss attributable to common stockholders of $9.2 million, or $0.18 per share, for the second quarter of 2026, a significant decline from a net income of $2.5 million, or $0.05 per share, in the same period last year. The company's total revenues for the quarter were $18.9 million, primarily driven by interest income from commercial mortgage loans, which decreased from $20.9 million in the previous quarter. The decline in net interest income was attributed to a reduction in the weighted-average principal balance of the loan portfolio and an increase in provisions for credit losses, which totaled $8.6 million for the quarter.
Comparatively, Lument's financial performance for the first half of 2026 showed a net loss of $10.2 million, or $0.19 per share, compared to a net income of $798,205, or $0.02 per share, for the same period in 2025. The company’s total assets decreased to $1.12 billion as of June 30, 2026, down from $1.22 billion at the end of 2025. This decline was primarily due to a reduction in commercial mortgage loans held-for-investment, which fell to $991.7 million from $1.14 billion. The allowance for credit losses increased to $21.2 million, reflecting heightened credit risk in the portfolio.
In terms of operational developments, Lument Finance Trust has been active in managing its loan portfolio, with significant loan payoffs totaling $184 million during the quarter. The company also foreclosed on two multifamily properties, which contributed to its real estate owned (REO) assets, now valued at approximately $50.7 million. The REO properties had a weighted average occupancy rate of 66.7% as of June 30, 2026. The company’s management team continues to monitor the credit performance of its investments closely, with 93.1% of the commercial mortgage loans in the portfolio current as to principal and interest.
Looking ahead, Lument Finance Trust is navigating a challenging market characterized by elevated interest rates and economic uncertainty. The company has announced plans for a 1-for-10 reverse stock split to regain compliance with the New York Stock Exchange's minimum share price requirement, following a notice of deficiency received in July 2026. The reverse stock split is expected to reduce the number of outstanding shares from approximately 52.5 million to about 5.2 million. The company remains focused on maintaining liquidity and capital resources to support its investment activities while adapting to changing market conditions.
About Lument Finance Trust, Inc.
Lument Finance Trust, Inc. is a REIT specializing in commercial real estate debt investments, primarily originating and managing transitional floating-rate mortgage loans focused on middle-market multifamily assets. It invests in CRE loans, mezzanine debt, preferred equity, and securities, financed through non-recourse CLOs and secured financings. The company leverages extensive origination platforms, targeting attractive risk-adjusted returns in the U.S. real estate market.
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