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Lument Finance Trust, Inc.

Lument Finance Trust, Inc.LFT決算レポート

NYSE · 金融 · 不動産投資信託

Lument Finance Trust, Inc. is a US-based real estate finance firm that primarily invests in, manages, and operates credit assets tied to multifamily residential and commercial real estate. Its core offerings include bridge loans, permanent financing solutions, and structured real estate debt products for property owners and operators across the United States.

What changed in Lument Finance Trust, Inc.'s 10-K — 2024 vs 2025

Top changes in Lument Finance Trust, Inc.'s 2025 10-K

382 paragraphs added · 358 removed · 273 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Other Commercial Real Estate-Related Debt Instruments. We also expect to opportunistically originate and selectively acquire other CRE-related debt instruments, subject to maintaining our qualification as a REIT for U.S. federal income tax purposes and our exclusion or exemption from regulation under the Investment Company Act, including, but not limited to, the following: 1 • Mezzanine Loans.
Other Commercial Real Estate-Related Debt Instruments. We also expect to opportunistically originate and selectively acquire other CRE-related debt instruments, subject to maintaining our qualification as a REIT for U.S. federal income tax purposes and our exclusion or exemption from regulation under the Investment Company Act, including, but not limited to, the following: • Mezzanine Loans.
Pursuant to a management agreement between our Manager and us, our Manager is entitled to receive a base management fee, an incentive fee, and certain expense reimbursements. Our Investment Strategy We invest primarily in transitional floating rate CRE mortgage loans with an emphasis on middle-market multifamily assets.
Pursuant to the Management Agreement between our Manager and us, our Manager is entitled to receive a base management fee, an incentive fee, and certain expense reimbursements. Our Investment Strategy We invest primarily in transitional floating rate CRE mortgage loans with an emphasis on middle-market multifamily assets.
Fifth, not more than 25% of the value of our total assets may be represented by debt instruments of publicly offered REITs to the extent those debt instruments would not be real estate assets but for the inclusion of debt instruments of publicly offered REITs in the meaning of real estate assets. 4 Distribution Requirements .
Fifth, not more than 25% of the value of our total assets may be represented by debt instruments of publicly offered REITs to the extent those debt instruments would not be real estate assets but for the inclusion of debt instruments of publicly offered REITs in the meaning of real estate assets. Distribution Requirements .
Accordingly, we are generally not subject to U.S. federal income tax on the REIT taxable income that we currently distribute to our stockholders so long as we maintain our qualification as a REIT.
Accordingly, we are generally not subject to U.S. federal income tax on the REIT taxable income that we currently distribute to our 4 stockholders so long as we maintain our qualification as a REIT.
These loans may be tranched into senior and junior mezzanine loans, with the junior mezzanine lenders secured by a pledge of the equity in the senior mezzanine borrower.
These loans may be tranched into senior and 1 junior mezzanine loans, with the junior mezzanine lenders secured by a pledge of the equity in the senior mezzanine borrower.
Even if we maintain our qualification as a REIT, we may be subject to some U.S. federal, state and local taxes on our income. Taxable income generated by our taxable REIT subsidiary ("TRS"), is subject to regular corporate income tax. For the fiscal year 2024, our TRS did not generate taxable income.
Even if we maintain our qualification as a REIT, we may be subject to some U.S. federal, state and local taxes on our income. Taxable income generated by our taxable REIT subsidiary ("TRS"), is subject to regular corporate income tax. For the fiscal year 2025, our TRS did not generate taxable income.
Fourth, the aggregate value of all securities of TRSs that we hold may not exceed 20% of the value of our total assets.
Fourth, the aggregate value of all securities of TRSs that we hold may not exceed 25% of the value of our total assets.
Our Portfolio Transitional Multifamily and Commercial Real Estate Loans As of December 31, 2024, our mortgage loan investment portfolio consisted of 65 senior secured floating rate loans with an aggregate unpaid principal balance of $1.1 billion, collectively having a weighted average coupon of 8.1% and a weighted average term to maturity of 2.1 years.
Our Portfolio Transitional Multifamily and Commercial Real Estate Loans As of December 31, 2025, our mortgage loan investment portfolio consisted of 61 senior secured floating rate loans with an aggregate unpaid principal balance of $1.1 billion, collectively having a weighted average coupon of 7.2% and a weighted average term to maturity of 1.7 years.
As of December 31, 2024, Lument had approximately 600 employees located in over 30 offices throughout the United States. We have access to an extensive loan origination platform through our affiliation with Lument, which is a premier national mortgage originator and asset manager.
As of December 31, 2025, Lument had over 550 employees located in over 30 offices throughout the United States. We have access to an extensive loan origination platform through our affiliation with Lument, a premier national mortgage originator and asset manager.
(2) Weighted average coupon assumes applicable 30-day term SOFR of 4.51% as of December 31, 2024, inclusive of weighted average interest rate floor of 0.63%. As of December 31, 2024, 100.0% of the investments by total investment exposure earned a floating rate indexed to 30-day term SOFR.
(2) Weighted average coupon assumes applicable 30-day term SOFR of 3.85% as of December 31, 2025, inclusive of weighted average interest rate floor of 2.18%. As of December 31, 2025, 100.0% of the investments by total investment exposure earned a floating rate indexed to 30-day term SOFR.
We are externally managed by our manager, Lument Investment Management, LLC (the "Manager" or "Lument IM") pursuant to the terms of our management agreement. Our Manager is a subsidiary of Lument Real Estate Capital Holdings, LLC ("Lument"). Lument is a subsidiary of ORIX Corporation USA ("ORIX USA"), a diversified financial company and a subsidiary of ORIX Corporation ("ORIX").
We are externally managed by our manager, Lument Investment Management, LLC (the "Manager" or "Lument IM") pursuant to the terms of our Management Agreement (the "Management Agreement"). Our Manager is a subsidiary of Lument Real Estate Capital Holdings, LLC ("Lument").
(3) Weighted average remaining term assumes all extension options are exercised by the borrower; provided, however, that our loans may be repaid prior to such date. (4) As of December 31, 2024, $1,049,886,009 of the outstanding senior secured loans were held in VIEs and $(1,082,931) of the outstanding senior secured loans were held outside of VIEs.
(3) Weighted average remaining term assumes all extension options are exercised by the borrower; provided, however, that our loans may be repaid prior to such date. (4) As of December 31, 2025, $856,064,487 of the outstanding senior secured loans were held in VIEs and $257,983,507 of the outstanding senior secured loans were held outside of VIEs.
In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of loans and investments and offer more attractive pricing or other terms than we would.
In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of loans and investments and offer more attractive pricing or other terms than we would. Furthermore, competition for investments we target may lead to decreasing yields, which may further limit our ability to generate targeted returns.
We may utilize warehouse repurchase agreements or other forms of financing in the future. Our primary sources of income are net interest from our investment portfolio and non-interest income from our mortgage loan-related activities. Net interest income represents the interest we earn on investments less the expense of funding these investments.
Our primary sources of income are net interest from our investment portfolio and non-interest income from our mortgage loan-related activities. Net interest income represents the interest we earn on investments less the expense of funding these investments.
We may also invest in other CRE-related investments including mezzanine loans, preferred equity, CMBS, fixed rate loans, construction loans and other CRE debt instruments. We finance our current investments in transitional multifamily and other CRE loans primarily through matched term non-recourse secured borrowings, including CRE collateralized loan obligations ("CLO"), which are not subject to margin calls or additional collateralization requirements.
We finance our investments in transitional multifamily and other CRE loans through matched term non-recourse secured borrowings, including CRE collateralized loan obligations ("CLO"), which are not subject to margin calls or additional collateralization requirements and repurchase facilities, which are only subject to credit marks.
The following table details the overall statistics of our loan portfolio as of December 31, 2024: Weighted Average Loan Type Unpaid Principal Balance Carrying Value (1) Loan Count Floating Rate Loan % Coupon (2) Term (Years) (3) December 31, 2024 Loans held-for-investment Senior secured loans (4) $ 1,065,563,646 $ 1,060,123,298 65 100.0 % 8.1 % 2.1 Allowance for credit losses N/A $ (11,320,220) $ 1,065,563,646 $ 1,048,803,078 65 100.0 % 8.1 % 2.1 (1) Carrying Value includes $3,466,214 in unaccreted purchase discounts as of December 31, 2024.
The following table details the overall statistics of our loan portfolio as of December 31, 2025: Weighted Average Loan Type Unpaid Principal Balance Carrying Value (1) Loan Count Floating Rate Loan % Coupon (2) Term (Years) (3) December 31, 2025 Loans held-for-investment Senior secured loans (4) $ 1,140,268,217 $ 1,136,706,113 61 100.0 % 7.2 % 1.7 Allowance for credit losses N/A $ (22,658,121) $ 1,140,268,217 $ 1,114,047,992 61 100.0 % 7.2 % 1.7 (1) Carrying Value includes $1,657,584 in unaccreted purchase discounts as of December 31, 2025.
ORIX is a publicly traded, Tokyo-based international financial services company with assets in excess of $107 billion as of December 2024 and was ranked number 379 on Forbes 2024 Global 2000: World's Biggest Public Companies. We are a Maryland corporation that was formed in March 2012 and commenced operations in May 2012.
Lument is a subsidiary of ORIX Corporation USA ("ORIX USA"), a diversified financial company and a subsidiary of ORIX Corporation ("ORIX"). ORIX is a publicly traded, Tokyo-based international financial services company with assets in excess of $116 billion as of December 2025 and was ranked number 405 on Forbes' 2025 Global 2000: World's Biggest Public Companies.
Sustainability We are committed to investing and operating sustainably as we believe it improves long-term financial performance, mitigates risk, and helps create better outcomes for our shareholders.
However, we may not be able to achieve our business goals or expectations due to the competitive risks that we face. Sustainability We are committed to investing and operating sustainably as we believe it improves long-term financial performance, mitigates risk, and helps create better outcomes for our stockholders.
The charts below present the geographic dispersion of our loan portfolio and the property types securing our loan portfolio as of December 31, 2024: 2 MSRs As of December 31, 2024, the Company retained the servicing rights associated with residential mortgage loans ("MSRs") having an aggregate unpaid principal balance of approximately $62.1 million that we had previously transferred to three residential mortgage loan securitization trusts.
MSRs As of December 31, 2025, the Company retained the servicing rights associated with residential mortgage loans ("MSRs") having an aggregate unpaid principal balance of approximately $54.6 million that we had previously transferred to three residential mortgage loan securitization trusts. The carrying value of these MSRs at December 31, 2025 was approximately $0.6 million.
As of December 31, 2024, 92.3% of the portfolio was supported by multifamily assets. During 2024, the Company originated or acquired $58.4 million in loans and realized $391.0 million of loan repayments. This activity resulted in net repayments of $332.6 million.
As of December 31, 2025, 92.7% of the portfolio was supported by multifamily assets. During 2025, the Company originated or acquired $403.9 million in loans, realized $266.6 million of loan repayments and transitioned $62.6 million in loans to real estate owned. This activity resulted in a net loan principal balance increase of $74.7 million.
We have elected to be taxed as a REIT for U.S. federal income tax purposes.
We are a Maryland corporation that was formed in March 2012 and commenced operations in May 2012. We have elected to be taxed as a REIT for U.S. federal income tax purposes.
Furthermore, competition for investments we target may lead to decreasing yields, which may further limit our ability to generate targeted returns. 3 We believe access to our Manager's professionals and their industry expertise and relationships provide us with competitive advantages in assessing risks and determining appropriate pricing for potential investments.
We believe access to our Manager's professionals and their industry expertise and relationships provide us with competitive advantages in assessing risks and determining appropriate pricing for potential investments. We believe these relationships will enable us to compete effectively for attractive investment opportunities.
The carrying value of these MSRs at December 31, 2024 was approximately $0.6 million. The Company ceased the aggregation of residential mortgage loans in 2016 and, other than servicing our existing portfolio, we do not anticipate any residential loan activity going forward. Our Financing Strategy We seek to use leverage to increase potential returns to our stockholders.
The Company ceased the aggregation of residential mortgage loans in 2016 and, other than servicing our existing portfolio, we do not anticipate any residential loan activity going forward. For additional information regarding our portfolio as of December 31, 2025, see Part II, Item 7.
We may use non-recourse CRE CLOs, secured revolving repurchase agreements, term loan facilities, warehouse facilities, asset-specific financing structures and other forms of leverage. As of December 31, 2024, our assets were financed with match term, non-recourse CRE CLO and secured financings and one senior corporate credit facility.
"Management's Discussion and Analysis of Financial Condition and Results of Operations." Our Financing Strategy We seek to use leverage to increase potential returns to our stockholders. We may use non-recourse CRE CLOs, secured revolving repurchase agreements, term loan facilities, warehouse facilities, asset-specific financing structures and other forms of leverage.
Investment Guidelines Under the management agreement with our Manager, our Manager will be required to manage our business in accordance with certain investment guidelines and policies that have been approved by our board of directors, including each of our independent directors.
The following table details our outstanding financing arrangements as of December 31, 2025: Portfolio Financing Outstanding Principal Balance Portfolio Financing Maximum Borrowing Capacity Collateralized loan obligations $ 584,983,000 $ 584,983,000 Collateralized commercial real estate financing $ 169,655,462 $ 169,655,462 Uncommitted master repurchase agreements $ 177,193,781 $ 450,000,000 Secured lending agreements $ 17,000,000 $ 50,000,000 Secured term loan $ 47,750,000 $ 47,750,000 Total portfolio financing $ 996,582,243 $ 1,302,388,462 3 Investment Guidelines Under the Management Agreement with our Manager, our Manager will be required to manage our business in accordance with certain investment guidelines and policies that have been approved by our board of directors, including each of our independent directors.
Removed
We believe these relationships will enable us to compete effectively for attractive investment opportunities. However, we may not be able to achieve our business goals or expectations due to the competitive risks that we face.
Added
We may also invest in other CRE-related investments including mezzanine loans, preferred equity, CMBS, fixed rate loans, construction loans and other CRE debt instruments.
Added
The charts below present the geographic dispersion of our loan portfolio and the property types securing our loan portfolio as of December 31, 2025: 2 Real Estate Owned As of December 31, 2025, we owned three multifamily properties with an aggregate carrying value of $49.1 million.
Added
As of December 31, 2025, our assets were financed with match term, non-recourse CRE CLO and securitized debt obligations, an uncommitted master repurchase agreement, a term lending agreement and a senior corporate credit facility.
Added
During the year ended December 31, 2025, we: • Entered into a new $450 million Uncommitted Master Repurchase Agreement (the "Repurchase Agreement"); • Entered into a new $50 million term lending agreement (the "Loan Agreement"); and • Entered into and closed a $663.8 million managed CLO with 30-month reinvestment period providing $585.0 million of non-mark-to-market financing equating to an effective 88.12% advance rate, at a weighted average cost of capital of 30-day term SOFR plus 1.91% before transaction costs.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Risks Associated with Our Relationship with Our Manager • Our board of directors has approved very broad investment guidelines for our Manager and will not approve each investment and financing decision made by our Manager. • We are dependent on our Manager and its key personnel for our success. • There are conflicts of interest with our Manager, ORIX and ORIX affiliates that could result in decisions that are not in the best interests of our stockholders.
Risks Associated with Our Relationship with Our Manager • Our board of directors has approved very broad investment guidelines for our Manager and will not approve each investment and financing decision made by our Manager. • We are dependent on our Manager and its key personnel for our success. • There are conflicts of interest in our relationship with our Manager, ORIX and ORIX affiliates that could result in decisions that are not in the best interests of our stockholders.
Further, significant physical effects of climate change including extreme weather events such as hurricanes, floods, droughts or fires, can also have an adverse impact on certain of our borrowers' properties. As the effects of climate change increase, we expect the frequency and impact of weather and climate related events and conditions to increase as well.
Further, significant physical effects of climate change including extreme weather events such as hurricanes, floods, droughts or fires, can also have an adverse impact on certain of our borrowers' properties. As the effects of climate change increase, we can expect the frequency and impact of weather and climate related events and conditions to increase as well.
If we identify a material weakness in our internal controls over financial reporting, if we are unable to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner or to assert that our internal controls over financial reporting is effective or, if required, our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal controls over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected.
If we identify a material weakness in our internal controls over financial reporting, if we are unable to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner or to assert that our internal controls over financial reporting are effective or, if required, our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal controls over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected.
Due to the generally short-term nature of transitional floating-rate commercial mortgage loans, our CLOs and secured financings include a reinvestment period during which principal repayments and prepayments on our commercial mortgage loans may be reinvested in similar assets, subject to meeting certain eligibility criteria.
Due to the generally short-term nature of transitional floating-rate commercial mortgage loans, our CLOs and secured financings include a reinvestment period during which principal repayments and prepayments on our commercial mortgage loans may be reinvested in similar assets, subject to meeting certain eligibility criteria.
These claims would be subject to significant delay and, if and when received, may be substantially less than the damages we actually incur. Master repurchase agreements, credit facilities, or other financings that we may use in the future to finance our assets may require us to provide additional collateral or pay down debt.
These claims would be subject to significant delay and, if and when received, may be substantially less than the damages we actually incur. Master repurchase agreements, credit facilities, or other financings that we use or may use in the future to finance our assets may require us to provide additional collateral or pay down debt.
As a general matter, decisions with respect to ORIX and its affiliates’ proprietary accounts are made by the ORIX investment committee, which is different from the investment committee making investment decisions on behalf of the Manager for the Company.
As a general matter, decisions with respect to ORIX and its affiliates’ proprietary accounts are made by the ORIX investment committee, which is different from the investment committee making investment decisions for the Manager on behalf of the Company.
Our Manager could be subject to civil liability, criminal liability or sanction, including revocation or denial of its registration as an investment adviser, revocation of the licenses of its employees, censures, fines or temporary suspension or permanent bar from conducting business, if it is found to have violated any of laws or regulations applicable to it.
Our Manager could be subject to civil liability, criminal liability or sanction, including revocation or denial of its registration as an investment adviser, revocation of the licenses of its employees, censures, fines or temporary suspension or permanent bar from conducting business, if it is found to have violated any of the laws or regulations applicable to it.
However, there are certain exceptions to this rule, including: (1) part of the income and gain recognized by certain qualified employee pension trusts with respect to our stock may be treated as UBTI if shares of our stock are predominantly held by qualified employee pension trusts, and we are required to rely on a special look-through rule for purposes of meeting one of the REIT ownership tests, and we are not operated in a manner to avoid treatment of such income or gain as UBTI; (2) part of the income and gain recognized by a tax-exempt investor with respect to our stock would constitute UBTI if the investor incurs debt in order to acquire the stock; (3) part or all of the income or gain recognized with respect to our stock by social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts and qualified group legal services plans which are exempt from U.S. federal income taxation under the Internal Revenue Code may be treated as UBTI; and (4) to the extent that we are (or a part of us, or a disregarded subsidiary of ours, is) a "taxable mortgage pool," or if we hold residual interests in a REMIC, a portion of the distributions paid to a tax-exempt stockholder that is allocable to excess inclusion income may be treated as UBTI.
However, there are certain exceptions to this rule, including: (1) part of the income and gain recognized by certain qualified employee pension trusts with respect to our stock may be treated as UBTI if shares of our stock are predominantly held by qualified employee pension trusts, and we are required to rely on a special look-through rule for purposes of meeting one of the REIT ownership tests, and we are not operated in a manner to avoid treatment of such income or gain as UBTI; (2) part of the income and gain recognized by a tax-exempt investor with respect to our stock would constitute UBTI if the investor incurs debt in order to acquire the stock; (3) part or all of the income or gain recognized with respect to our stock by social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts and qualified group legal services plans which are exempt from U.S. federal income taxation under the Internal Revenue Code may be treated as UBTI; (4) to the extent that we are (or a part of us, or a disregarded subsidiary of ours, is) a "taxable mortgage pool," or if we hold residual interests in a REMIC; and (5) a portion of the distributions paid to a tax-exempt stockholder that is allocable to excess inclusion income may be treated as UBTI.
Although these transactions are intended to reduce our exposure to various risks, hedging may fail to protect or could adversely affect us because, among other things: • hedging can be expensive, particularly during periods of volatile or rapidly changing interest rates; • available hedges may not correspond directly with the risks for which protection is sought; • the duration of the hedge may not match the duration of the related liability; • the amount of income that a REIT may earn from certain hedging transactions is limited by U.S. federal income tax provisions governing REITs; • the credit quality of a hedging counterparty may be downgraded to such an extent that it impairs our ability to sell or assign our side of the hedging transaction; and • the hedging counterparty may default on its obligation to pay.
Although these transactions are intended to reduce our exposure to various risks, hedging may fail to protect or could adversely affect us because, among other things: • hedging can be expensive, particularly during periods of volatile or rapidly changing interest rates; • available hedges may not correspond directly with the risks for which protection is sought; • the duration of the hedge may not match the duration of the related liability; • the amount of income that a REIT may earn from certain hedging transactions is limited by U.S. federal income tax provisions governing REITs; • the credit quality of a hedging counterparty may be downgraded to such an extent that it impairs our ability to sell or assign our side of the hedging transaction; and 19 • the hedging counterparty may default on its obligation to pay.
In addition, we have agreed to indemnify our Manager, its officers, stockholders, members, managers, directors, personnel, trustees, partners, stockholders, equity holders, any person controlling or 22 controlled by our Manager and any person providing sub-advisory services to our Manager with respect to all expenses, losses, damages, liabilities, demands, charges and claims arising from acts or omissions of our Manager not constituting bad faith, willful misconduct, gross negligence or reckless disregard of duties, performed in good faith in accordance with and pursuant to the management agreement.
In addition, we have agreed to indemnify our Manager, its officers, stockholders, members, managers, directors, personnel, trustees, partners, stockholders, equity holders, any person controlling or controlled by our Manager and any person providing sub-advisory services to our Manager with respect to all expenses, losses, damages, liabilities, demands, charges and claims arising from acts or omissions of our Manager not constituting bad faith, willful misconduct, gross negligence or reckless disregard of duties, performed in good faith in accordance with and pursuant to the Management Agreement.
In certain situations, we may: • acquire investments subject to rights of senior classes, special servicers or collateral managers under intercreditor, servicing agreements or securitization documents; • pledge our investments as collateral for financing arrangements; • acquire only a minority and/or non-controlling participation in an underlying investment; 10 • co-invest with others through partnership, joint ventures or other entities, thereby acquiring non-controlling interests; or • rely on independent third-party management or servicing with respect to the management of an asset.
In certain situations, we may: • acquire investments subject to rights of senior classes, special servicers or collateral managers under intercreditor, servicing agreements or securitization documents; • pledge our investments as collateral for financing arrangements; • acquire only a minority and/or non-controlling participation in an underlying investment; • co-invest with others through partnership, joint ventures or other entities, thereby acquiring non-controlling interests; or • rely on independent third-party management or servicing with respect to the management of an asset.
Such affiliate relationships may influence our Manager in deciding whether to select a service provider because our Manager may have financial or other business incentives to recommend and engage an ORIX affiliate, even if another person or vendor may be more qualified to provide the applicable service, or may provide such service at a more favorable rate or arrangement. 20 • Shared Personnel: In addition to responsibilities with respect to the management and investment activities of LFT, the Manager, its affiliates and their personnel could have similar responsibilities with respect to ORIX and its affiliates and could have other business commitments.
Such affiliate relationships may influence our Manager in deciding whether to select a service provider because our Manager may have financial or other business incentives to recommend and engage an ORIX affiliate, even if another person or vendor may be more qualified to provide the applicable service, or may provide such service at a more favorable rate or arrangement. • Shared Personnel: In addition to responsibilities with respect to the management and investment activities of LFT, the Manager, its affiliates and their personnel could have similar responsibilities with respect to ORIX and its affiliates and could have other business commitments.
As permitted by Maryland law, our charter eliminates the liability of our directors and officers to us and our stockholders for money damages, except for liability resulting from: • actual receipt of an improper benefit or profit in money, property or services; or 26 • a final judgment based upon a finding of active and deliberate dishonesty by the director or officer that was material to the cause of action adjudicated.
As permitted by Maryland law, our charter eliminates the liability of our directors and officers to us and our stockholders for money damages, except for liability resulting from: • actual receipt of an improper benefit or profit in money, property or services; or • a final judgment based upon a finding of active and deliberate dishonesty by the director or officer that was material to the cause of action adjudicated.
If general interest rates and credit spreads decline at the same time, the proceeds of such prepayments received during such periods are likely to be reinvested in assets yielding less than the yields on the 15 assets that were prepaid. We may not be able to reinvest the principal repaid at the same or higher yield of the original investments.
If general interest rates and credit spreads decline at the same time, the proceeds of such prepayments received during such periods are likely to be reinvested in assets yielding less than the yields on the assets that were prepaid. We may not be able to reinvest the principal repaid at the same or higher yield of the original investments.
Those provisions are (i) a classified board; (ii) a two-thirds vote requirement for removing a director; (iii) a requirement that the number of directors be fixed only by vote of the directors; (iv) a requirement that a vacancy on the board be filled only by affirmative vote of a majority of the remaining directors in office and for the remainder of the full term of the class of directors in which the vacancy occurred; (v) and a majority requirement for the calling of a special meeting of stockholders.
Those provisions are (i) a classified board; (ii) a two-thirds vote requirement for removing a director; (iii) a requirement that the number of 26 directors be fixed only by vote of the directors; (iv) a requirement that a vacancy on the board be filled only by affirmative vote of a majority of the remaining directors in office and for the remainder of the full term of the class of directors in which the vacancy occurred; (v) and a majority requirement for the calling of a special meeting of stockholders.
If rising interest rates cause us to be unable to acquire a sufficient volume 8 of transitional floating-rate multifamily and CRE loans and other mortgage related investments with a yield that is above our borrowing cost, our ability to satisfy our investment objectives and to generate income and make distributions to our stockholders may be adversely affected.
If rising interest rates cause us to be unable to acquire a sufficient volume of transitional floating-rate multifamily and CRE loans and other mortgage related investments with a yield that is above our borrowing cost, our ability to satisfy our investment objectives and to generate income and make distributions to our stockholders may be adversely affected.
Our net interest margins will be dependent upon a positive spread between the returns on our asset portfolio and our overall cost of funding. Our Manager’s risk management tools include software and services licensed or purchased from third parties, in addition to proprietary systems and analytical methods developed internally.
Our net interest margins will be dependent upon a positive spread between the returns on our asset 17 portfolio and our overall cost of funding. Our Manager’s risk management tools include software and services licensed or purchased from third parties, in addition to proprietary systems and analytical methods developed internally.
Our Manager will have great latitude within the broad parameters of our investment guidelines in determining the types and amounts of mortgage related investments it may decide are attractive investments for us, which could result in investment returns that are substantially below expectations or that result in losses, which would adversely affect our business operations and results.
Our Manager will have great latitude 20 within the broad parameters of our investment guidelines in determining the types and amounts of mortgage related investments it may decide are attractive investments for us, which could result in investment returns that are substantially below expectations or that result in losses, which would adversely affect our business operations and results.
To the extent that LFT holds securities or other financial interests (e.g., bank debt) in a company with rights, preferences and privileges that are different than interests held by an Investing Party in the same company, the Manager and its affiliates may be presented with decisions when LFT’s interests and the interests of the Investing Parties conflict.
To the extent that LFT holds securities or other financial interests (e.g., bank debt) in a company with 21 rights, preferences and privileges that are different than interests held by an Investing Party in the same company, the Manager and its affiliates may be presented with decisions when LFT’s interests and the interests of the Investing Parties conflict.
While the terms of such financings are 21 negotiated with such borrowers, in certain circumstances it may be customary or beneficial for legal, tax, regulatory or other reasons for such transactions to involve both the Company and an affiliated lender, or proceeds from one transaction may be used to pay off another such transaction.
While the terms of such financings are negotiated with such borrowers, in certain circumstances it may be customary or beneficial for legal, tax, regulatory or other reasons for such transactions to involve both the Company and an affiliated lender, or proceeds from one transaction may be used to pay off another such transaction.
In addition, the occurrence of a natural disaster (such as an earthquake, tornado, hurricane, or a flood) or a significant adverse climate change may cause a sudden decrease in the value of real estate in the area or areas affected and would likely reduce the value of the properties securing debt instruments that we purchase.
In addition, the occurrence of a natural disaster (such as an earthquake, fire, tornado, hurricane, or a flood) or a significant adverse climate change may cause a sudden decrease in the value of real estate in the area or areas affected and would likely reduce the value of the properties securing debt instruments that we purchase.
In the future, our independent registered public accounting firm may be required to formally attest to the effectiveness of our internal 12 controls over financial reporting on an annual basis. The process of designing, implementing and testing the internal controls over financial reporting required to comply with this obligation is time consuming, costly and complicated.
In the future, our independent registered public accounting firm may be required to formally attest to the effectiveness of our internal controls over financial reporting on an annual basis. The process of designing, implementing and testing the internal controls over financial reporting required to comply with this obligation is time consuming, costly and complicated.
In addition, foreclosure may create a negative public perception of the collateral property, resulting in a diminution of its value. Even if we are successful in foreclosing on a mortgage loan, the liquidation proceeds upon sale of the underlying real estate may not be sufficient to recover our investment.
In addition, 15 foreclosure may create a negative public perception of the collateral property, resulting in a diminution of its value. Even if we are successful in foreclosing on a mortgage loan, the liquidation proceeds upon sale of the underlying real estate may not be sufficient to recover our investment.
Our investments may include subordinated tranches of CMBS, which are a subordinated class of security in a structure of securities collateralized by a pool of mortgage loans and, accordingly, is the first or among the first to bear the loss upon a restructuring or liquidation of the underlying collateral and the last to receive payment of interest and principal.
Our investments may include subordinated tranches of CMBS, which are a subordinated class of security in a structure of securities collateralized by a pool of mortgage loans and, accordingly, are the first or among the first to bear the loss upon a restructuring or liquidation of the underlying collateral and the last to receive payment of interest and principal.
We believe that we do not meet the definition of investment company under Section 3(a)(1)(A) of the Investment Company Act because we do not engage primarily, or hold ourselves out as being engaged primarily, in the business of investing, reinvesting or trading in securities. Rather, we are primarily engaged in a non-investment company businesse related to real estate.
We believe that we do not meet the definition of investment company under Section 3(a)(1)(A) of the Investment Company Act because we do not engage primarily, or hold ourselves out as being engaged primarily, in the business of investing, reinvesting or trading in securities. Rather, we are primarily engaged in a non-investment company business related to real estate.
These actions could have the effect of reducing our income and the amount available for distribution to our stockholders. 28 In addition to the asset tests set forth above, to maintain our REIT qualification, we must continually satisfy tests concerning, among other things, the sources of our income, the amounts we distribute to our stockholders and the ownership of our stock.
These actions could have the effect of reducing our income and the amount available for distribution to our stockholders. In addition to the asset tests set forth above, to maintain our REIT qualification, we must continually satisfy tests concerning, among other things, the sources of our income, the amounts we distribute to our stockholders and the ownership of our stock.
Failure to comply with our financial covenants could result in an event of default, termination of the credit facility and acceleration of all amounts owing under our credit facility and gives the counterparty the right to exercise certain other remedies under the credit agreement, unless we were able to 17 negotiate a waiver.
Failure to comply with our financial covenants could result in an event of default, termination of the credit facility and acceleration of all amounts owing under our credit facility and gives the counterparty the right to exercise certain other remedies under the credit agreement, unless we were able to negotiate a waiver.
In servicing and administering the loans, each of the Manager and its affiliates may take into account these relationships or the relationships of its affiliates with obligors or issuers and their respective affiliates, which can create a conflict of interest. Various affiliates of the Manager also have relationships with investors, including institutional investors and their senior management.
In servicing and administering the loans, each of the Manager and its affiliates may take into account these relationships or the relationships of its affiliates with obligors or issuers and their respective affiliates, which can create a conflict of interest. Various affiliates of the Manager also have relationships 22 with investors, including institutional investors and their senior management.
In addition, rising interest rates 23 would result in increased interest expense on our variable rate debt, thereby reducing cash flow and our ability to service our indebtedness and make distributions to our stockholders. An increase in interest rates may have an adverse effect on the market price of our stock and our ability to make distributions to our stockholders.
In addition, rising interest rates would result in increased interest expense on our variable rate debt, thereby reducing cash flow and our ability to service our indebtedness and make distributions to our stockholders. An increase in interest rates may have an adverse effect on the market price of our stock and our ability to make distributions to our stockholders.
We generally rely on guidance published by the SEC or its staff, or on our own analyses, to determine which assets are qualifying real estate assets and real estate-related assets. 24 Certain of our subsidiaries may seek to rely on Rule 3a-7 under the Investment Company Act.
We generally rely on guidance published by the SEC or its staff, or on our own analyses, to determine which assets are qualifying real estate assets and real estate-related assets. Certain of our subsidiaries may seek to rely on Rule 3a-7 under the Investment Company Act.
If rules or regulations were to extend to us or our affiliates the regulatory and supervisory requirements, such as capital and liquidity standards, currently applicable to banks, then the regulatory and operating costs associated therewith could adversely impact the implementation of our investment strategy and our returns.
If rules, regulations or legislation were to extend to us or our affiliates the regulatory and supervisory requirements, such as capital and liquidity standards, currently applicable to banks, then the regulatory and operating costs associated therewith could adversely impact the implementation of our investment strategy and our returns.
If we cannot meet these requirements, the lender or counterparty could accelerate our indebtedness, increase the interest rate on advanced funds and terminate our ability to borrow funds from it, which could materially and adversely affect our financial condition and ability to implement our investment strategy.
If we cannot 18 meet these requirements, the lender or counterparty could accelerate our indebtedness, increase the interest rate on advanced funds and terminate our ability to borrow funds from it, which could materially and adversely affect our financial condition and ability to implement our investment strategy.
We have utilized and may utilize in the future non-recourse securitizations to finance our loans and investments, which may expose us to risks that could result in losses. We have utilized and may utilize in the future, non-recourse securitizations of our portfolio investment to generate cash for funding new loans and investments and other purposes.
We have utilized and may utilize in the future non-recourse securitizations to finance our loans and investments, which may expose us to risks that could result in losses. We have utilized and may utilize in the future, non-recourse securitizations of our portfolio investments to generate cash for funding new loans and investments and other purposes.
The U.S. federal income tax rules dealing with REITs constantly are under review by persons involved in the legislative process, the IRS, and the U.S. Treasury, which results in statutory changes as well as frequent revisions to regulations and interpretations.
The U.S. federal income tax rules dealing with REITs constantly 30 are under review by persons involved in the legislative process, the IRS, and the U.S. Treasury, which results in statutory changes as well as frequent revisions to regulations and interpretations.
If the properties that we invest in are unable to obtain 9 affordable insurance coverage, the value of those investments could decline and in the event of an uninsured loss, we could lose all or a portion of our investment.
If the properties that we invest in are unable to obtain affordable insurance coverage, the value of those investments could decline and in the event of an uninsured loss, we could lose all or a portion of our investment.
These Affiliated Mortgage Providers provide mortgage financing to third parties and other ORIX affiliates that seek to lend to existing borrowers of LFT assets when, the loan is nearing maturity or the borrower is seeking alternative financing.
These Affiliated Mortgage Providers provide mortgage financing to third parties and other ORIX affiliates that seek to lend to existing borrowers of LFT assets when a loan is nearing maturity or the borrower is seeking alternative financing.
We may not be able to reinvest the principal repaid at the same or higher yield of the original investment. Rising interest rates generally reduce the demand for mortgage loans due to the higher cost of borrowing.
We may not be able to reinvest the principal repaid at the same or higher yield of the original investment. 8 Rising interest rates generally reduce the demand for mortgage loans due to the higher cost of borrowing.
The properties underlying our CRE loans may be subject to other unknown liabilities that could adversely affect the value of these properties, and as a result, our investments. 14 Properties underlying our commercial real estate loans may be subject to other unknown or unquantifiable liabilities that may adversely affect the value of our investments.
The properties underlying our CRE loans may be subject to other unknown liabilities that could adversely affect the value of these properties, and as a result, our investments. Properties underlying our commercial real estate loans may be subject to other unknown or unquantifiable liabilities that may adversely affect the value of our investments.
We cannot assure you that we would be able to complete any such originations, acquisitions or on favorable terms, or at all. Any or all of the above could materially and adversely affect us.
We cannot assure you that we would be able to complete any such originations, acquisitions or dispositions on favorable terms, or at all. Any or all of the above could materially and adversely affect us.
The Dodd-Frank Act established the Financial Stability Oversight Council (the “FSOC”), which is comprised of representatives of all the major U.S. financial regulators, to act as the financial system’s systemic risk regulator.
The Dodd-Frank Act established 11 the Financial Stability Oversight Council (the “FSOC”), which is comprised of representatives of all the major U.S. financial regulators, to act as the financial system’s systemic risk regulator.
There are certain types of losses, generally of a catastrophic nature, such as earthquakes, floods, hurricanes, terrorism or acts of war, which may be uninsurable or not economically insurable.
There are certain types of losses, generally of a catastrophic nature, such as earthquakes, floods, fires, hurricanes, terrorism or acts of war, which may be uninsurable or not economically insurable.
The ability of the Company to invest in such loans will be dependent upon the ability of the Manager to secure financing for such origination, either from another affiliate of the Manager or from a third party.
The ability of the Company to invest in such loans will be dependent upon the ability of the Manager to secure financing for such loans, either from another affiliate of the Manager or from a third party.
The estimated fair values of such subordinated interests tend to be much more sensitive to adverse economic downturns and underlying borrower developments than more senior securities.
The estimated fair 12 values of such subordinated interests tend to be much more sensitive to adverse economic downturns and underlying borrower developments than more senior securities.
Federal Reserve indicating in 2025 an expectation of slower rate decreases moving forward. A slower-than-expected decrease, or a further increase, in interest rates would continue to present a challenge to real estate valuation. Our business model is such that rising interest rates will generally increase our net interest income, while declining rates will generally decrease our net interest income.
Federal Reserve indicating in 2026 an expectation of slower rate decreases moving forward. A slower-than-expected decrease, or a further increase, in interest rates would continue to present a challenge to real estate valuation. Our business model is such that rising interest rates will generally increase our net interest income, while declining rates will generally decrease our net interest income.
Conflicts of interest may arise as a result of certain personnel serving in dual or multiple capacities (e.g. officers, directors, principals, employee, partners, managers, members, agents, nominees) including with respect to the allocation of time, services and resources of such personnel. Dual role situations exist across the business.
Conflicts of interest may arise as a result of certain personnel serving in dual or multiple capacities (e.g. officers, directors, principals, employees, partners, managers, members, agents, nominees), including with respect to the allocation of time, services and resources of such personnel. Dual role situations exist across the business.
As of December 31, 2024, 100% of our loans by unpaid principal balance earned a floating rate of interest and were financed with liabilities that require interest payments based on floating rates, which resulted in an amount of net equity that is positively correlated to rising interest rates.
As of December 31, 2025, 100% of our loans by unpaid principal balance earned a floating rate of interest and were financed with liabilities that require interest payments based on floating rates, which resulted in an amount of net equity that is positively correlated to rising interest rates.
Notwithstanding the current period of relatively high interest rates, the U.S. Federal Reserve began decreasing rates in 2024. Although decelerating, inflation remains above the U.S. Federal Reserve's target levels. Despite multiple federal fund rate decreases over the course of 2024, interest rates have remained elevated, with the U.S.
Notwithstanding the current period of relatively high interest rates, the U.S. Federal Reserve began decreasing rates in 2024. Although decelerating, inflation remains above the U.S. Federal Reserve's target levels. Despite multiple federal fund rate decreases over the course of 2024 and 2025, interest rates have remained elevated, with the U.S.
The initial term of our management agreement with our Manager matured on January 3, 2023, and automatically renewed for a one-year renewal term on such date and will automatically renew every year thereafter unless it is terminated in accordance with its terms.
The initial term of our Management Agreement with our Manager expired on January 3, 2023, and automatically renewed for a one-year renewal term on such date and will automatically renew every year thereafter unless it is terminated in accordance with its terms.
This is a particular concern in the western and northeastern United States, where some of the most extensive and stringent environmental laws and building construction standards in the U.S. have been enacted and where we have properties securing our investment portfolio.
This is a particular concern in the western and northeastern United States, where some of the most extensive and stringent environmental, health and safety laws and building construction standards in the U.S. have been enacted and where we have properties securing our investment portfolio.
These restrictions could prevent the Company from participating in an attractive investment opportunity in which it would have otherwise participated. The Manager or its affiliates, from time to time, originate loans in which participations and/or assignments may be purchased by the Company.
These restrictions could prevent the Company from participating in an attractive investment opportunity in which it would have otherwise participated. The Manager or its affiliates, from time to time, sources loans in which participations and/or assignments may be purchased by the Company.
Our estimates and judgments are based on a number of factors, including assumptions regarding projected cash flow from the collateral securing our loans, capitalization rates, leasing, creditworthiness of major tenants, occupancy rates, likelihood of repayment in full at the maturity of a loan, availability of financing, exit plan, actions of other lenders and other factors deemed necessary by Management, all of which remain uncertain and are subjective.
Our estimates and judgments are based on a number of factors, including assumptions regarding projected cash flow from the collateral securing our loans, capitalization rates, leasing, occupancy rates, likelihood of repayment in full at the maturity of a loan, availability of financing, exit plan, actions of other lenders and other factors deemed necessary by management, all of which remain uncertain and are subjective.
Qualifying as a REIT involves highly technical and complex provisions of the Internal Revenue Code. 29 Qualification as a REIT involves the application of highly technical and complex Internal Revenue Code provisions for which only limited judicial and administrative authorities exist. Even a technical or inadvertent violation could jeopardize our REIT qualification.
Qualification as a REIT involves the application of highly technical and complex Internal Revenue Code provisions for which only limited judicial and administrative authorities exist. Even a technical or inadvertent violation could jeopardize our REIT qualification.
We anticipate that the aggregate value of the securities of our TRS will be less than 20% of the value of our total assets (including our TRS securities). Furthermore, we intend to monitor the value of our investments in our TRS for the purpose of ensuring compliance with TRS-ownership limitations.
We anticipate that the aggregate value of the securities of our TRS will be less than 25% of the value of our total assets (including our TRS securities). Furthermore, we intend to monitor the value of our investments in our TRS for the purpose of ensuring compliance with TRS-ownership limitations.
Risks Related to Financing and Hedging • Our strategy involves leverage, which may amplify losses and there is no specific limit on the amount of leverage we may use. • We may incur significant additional debt in the future, which will subject us to increased risk of loss and may reduce cash available for distributions to our stockholders. • There can be no assurance that our Manager will be able to prevent mismatches in the maturities of our assets and liabilities. • We have financed, and may in the future seek to finance, certain of our CRE loans via CLOs or secured financings and such transactions involve risks, including that the sponsor of such transactions will receive distributions from the CLO or secured financing only if the CLO or secured financing generates enough income to pay all the investors in senior tranches and all CLO or secured financing expenses. • Lenders generally require us to enter into restrictive covenants relating to our operations. • An increase in our borrowing costs relative to the interest that we receive on investments in our mortgage related investments may adversely affect our profitability and cash available for distributions to our stockholders. • We have utilized and may utilize in the future non-recourse securitizations to finance our loans and investments, which may expose us to risks that could result in losses. • Our loans and investments may be subject to fluctuations in interest rates that may not be adequately protected, or protected at all, by our hedging strategies.
Risks Related to Financing and Hedging • Our strategy involves leverage, which may amplify losses and there is no specific limit on the amount of leverage we may use. • We may incur significant additional debt in the future, which will subject us to increased risk of loss and may reduce cash available for distributions to our stockholders. • There can be no assurance that our Manager will be able to prevent mismatches in the maturities of our assets and liabilities. • We have financed, and may in the future seek to finance, certain of our CRE loans via CLOs or secured financings and such transactions involve risks, including that the sponsor of such transactions will receive distributions from the CLO or secured financing only if the CLO or secured financing generates enough income to pay all the investors in senior tranches and all CLO or secured financing expenses. • Master repurchase agreements, credit facilities, or other financings that we use or may use in the future to finance our assets may require us to provide additional collateral or pay down debt. • Lenders generally require us to enter into restrictive covenants relating to our operations. • An increase in our borrowing costs relative to the interest that we receive on investments in our mortgage related investments may adversely affect our profitability and cash available for distributions to our stockholders. • We have utilized and may utilize in the future non-recourse securitizations to finance our loans and investments, which may expose us to risks that could result in losses. • Our loans and investments may be subject to fluctuations in interest rates that may not be adequately protected, or protected at all, by our hedging strategies.
However, since 2022, in light of increasing inflation, the U.S. Federal Reserve increased benchmark interest rates eleven times. These increases increased our borrowers' interest payments, adversely affected commercial property real estate values, and could result in loan non-performance, modification, defaults, foreclosures, and/or property sales, which could result in us realizing losses on our investments.
However, between 2022 and late 2024, in light of increasing inflation, the U.S. Federal Reserve increased benchmark interest rates eleven times. These increases increased our borrowers' interest payments, adversely affected commercial property real estate values, and could result in loan non-performance, modification, defaults, foreclosures, and/or property sales, which could result in us realizing losses on our investments.
Moreover, the CECL model may create more volatility in the level of our allowance for credit losses. If we are required to materially increase our level of allowance for credit losses for any reason, such increase could adversely affect our business, financial condition and results of operations.
Moreover, the CECL model may create more volatility in the level of our allowance for credit losses. If we are required to materially increase our level of allowance for credit losses for any reason, such increase could adversely affect our business, financial condition and results of operations. CECL reserves are difficult to estimate.
These risks are discussed more fully below and include, but are not limited to, risks related to: Risks Related to Our Investment Strategy and Our Businesses • We may be unable to operate our business successfully or generate sufficient revenue to make or sustain distributions to our stockholders. • If we fail to develop, enhance and implement strategies to adapt to changing conditions in the mortgage industry and capital markets, our business, financial condition, results of operations and our ability to make distributions to our stockholder may be adversely affected. • We may change our target assets, investment or financing strategies and other operational policies without stockholder consent, which may adversely affect our business, financial condition, results of operations and our ability to make distributions to our stockholders. • Our floating-rate commercial mortgage loans are subject to various risks, such as interest rate risk, prepayment risk, real estate risk and credit risk. • Difficulty in redeploying the proceeds from repayments of our existing loans and investments may cause our financial performance and returns to investors to suffer. • Transitional mortgage loans involve greater risk than conventional mortgage loans. • An increase in interest rates may cause a decrease in the volume of certain of our target assets, which could adversely affect our ability to acquire assets that satisfy our investment objectives and to generate income and make distributions to our stockholders. • Fluctuations in interest rates could reduce our ability to generate income on our loans and other investments, which could adversely affect our ability to acquire assets that satisfy our investment objectives and to generate income and make distributions to our stockholders. • Our real estate investments are subject to risks particular to real property.
These risks are discussed more fully below and include, but are not limited to, risks related to: Risks Related to Our Investment Strategy and Our Businesses • We may be unable to operate our business successfully or generate sufficient revenue to make or sustain distributions to our stockholders. • If we fail to develop, enhance and implement strategies to adapt to changing conditions in the mortgage industry and capital markets, our business, financial condition, results of operations and our ability to make distributions to our stockholders may be adversely affected. • We may change our target assets, investment or financing strategies and other operational policies without stockholder consent, which may adversely affect our business, financial condition, results of operations and our ability to make distributions to our stockholders. • Our floating-rate commercial mortgage loans are subject to various risks, such as interest rate risk, prepayment risk, real estate risk and credit risk. • Difficulty in redeploying the proceeds from repayments of our existing loans and investments may cause our financial performance and returns to investors to suffer. • Transitional mortgage loans involve greater risk than conventional mortgage loans. • An increase in interest rates may cause a decrease in the volume of certain of our target assets, which could adversely affect our ability to acquire assets that satisfy our investment objectives and to generate income and make distributions to our stockholders. • Fluctuations in interest rates could reduce our ability to generate income on our loans and other investments, which could adversely affect our ability to acquire assets that satisfy our investment objectives and to generate income and make distributions to our stockholders. • We have in the past and may in the future acquire ownership of property securing our loans through foreclosure or deed-in-lieu of foreclosure.
Third, no more than 5% of the value of our total assets can consist of the securities of any one issuer. Fourth, no more than 20% of our total assets can be represented by securities of one or more TRSs.
Third, no more than 5% of the value of our total assets can consist of the securities of any one issuer. Fourth, no more than 25% of our total assets can be represented by securities of one or more TRSs.
We have not established a minimum distribution payment level on our common stock and our ability to make distributions may be adversely affected by the risk factors described in this Annual Report on Form 10-K.
We have not established a minimum distribution payment level on our common stock and our ability to make distributions has been and in the future may be adversely affected by the risk factors described in this Annual Report on Form 10-K.
The Management Agreement automatically renews for successive one year terms beginning January 3, 2023 and each January 3 thereafter, unless it is sooner terminated upon written notice delivered to the Company or Manager, as applicable, no later than 180 days prior to a renewal date either (i) by the Company upon the affirmative vote of at least two-thirds (2/3) of the independent directors of the Board or by a vote of at least two-thirds of the Company's outstanding shares of common stock, based upon a determination that (a) the Manager’s performance is unsatisfactory and materially detrimental to the Company or (b) the compensation payable to the Manager under the Management Agreement is not fair to the Company (provided that in the instance of (b), we shall not have the right to terminate the Management Agreement if the Manager agrees to continue to provide services under the Management Agreement at fees that at least two-thirds of the independent directors of the Board determine to be fair, provided further that in the instance of (b), the Manager will be afforded the opportunity to renegotiate its compensation prior to termination) or (ii) by the Manager.
The Management Agreement automatically renews for successive one year terms beginning January 3, 2023 and each January 3 thereafter, unless it is sooner terminated upon written notice delivered to the Manager by the Company no later than 180 days prior to a renewal date either (i) upon the affirmative vote of at least two-thirds (2/3) of the independent directors of the Board or (ii) by a vote of at least two-thirds of the Company's outstanding shares of common stock (excluding those shares held by the Manager or an affiliate thereof), in either case based upon a determination that (a) the Manager’s performance is unsatisfactory and materially detrimental to the Company or (b) the compensation payable to the Manager under the Management Agreement is not fair to the Company (provided that in the instance of (b), we shall not have the right to terminate the Management Agreement if the Manager agrees to continue to provide services under the Management Agreement at fees that at least two-thirds of the independent directors of the Board determine to be fair, provided further that in the instance of (b), the Manager will be afforded the opportunity to renegotiate its compensation prior to termination).
While ASU 2016-13 does not require any particular method for determining the allowance for credit losses, it does specify the allowance should be based on relevant information about past events, including historical loss experience, current portfolio and market conditions, and reasonable and supportable forecasts for the expected contractual term adjusted for prepayment and extensions, where applicable, of each loan.
While ASC 326 does not require any particular method for determining the allowance for credit losses, it does specify the allowance should be based on relevant information about past events, including historical loss experience, current portfolio and market conditions, and reasonable and supportable forecasts for the expected contractual term adjusted for prepayment and extensions, where applicable, of each loan.
We may be exposed to environmental liabilities with respect to properties to which we take title. In the course of our business, we may take title to real estate, and, if we do take title, we could be subject to environmental liabilities with respect to these properties.
We may be exposed to environmental liabilities with respect to properties to which we take title. In the course of our business, we have taken and may in the future take title to real estate, and, if we do take title, we could be subject to environmental liabilities with respect to these properties.
In addition, other than a few narrow exceptions, ASU 2016-13 requires that all financial instruments subject to the CECL model have some amount of reserve to reflect the GAAP Principle underlying the CECL model that all loans, debt securities, and similar assets have some inherent risk of loss, regardless of credit quality, subordinate capital, or other mitigating factors.
In addition, other than a few narrow exceptions, ASC 326 requires that all financial instruments subject to the CECL model have some amount of reserve to reflect the GAAP Principle underlying the CECL model that all loans, debt securities, and similar assets have some inherent risk of loss, regardless of credit quality, subordinate capital, or other mitigating factors.
Master repurchase agreements or other financing we may enter into in the future, involve the risk that the market value of the assets pledged or sold by us to the provider of the financing may decline in value, in which case the lender or counterparty may require us to provide additional collateral or lead to margin calls that may require us to repay all or a portion of the funds advanced.
Our master repurchase agreement, term financing agreement, and additional repurchase agreements or other financings we may enter into in the future, involve the risk that the market value of the assets pledged or sold by us to the provider of the financing may decline in value, in which case the lender or counterparty may require us to provide additional collateral or lead to margin calls that may require us to repay all or a portion of the funds advanced.
We may enter into repurchase agreements, and our rights under such repurchase agreements may be subject to the effects of the bankruptcy laws in the event of the bankruptcy or insolvency of us or our counterparties under the repurchase agreements.
We have entered into, and may in the future enter into, repurchase agreements, and our rights under such repurchase agreements may be subject to effects of the bankruptcy laws in the event of the bankruptcy or insolvency of us or our counterparties under the repurchase agreements.
Risks Related to Financing and Hedging Our strategy involves leverage, which may amplify losses and there is no specific limit on the amount of leverage that we may use. We leverage our portfolio investments in our target assets principally through borrowings under collateralized loan obligations.
Risks Related to Financing and Hedging Our strategy involves leverage, which may amplify losses, and there is no specific limit on the amount of leverage that we may use. We leverage our portfolio investments in our target assets principally through borrowings under collateralized loan obligations, master repurchase agreements and other financing arrangements.
However, the assets that we acquire may not appreciate in value and, in fact, may decline in value, and the assets that we acquire may experience defaults of interest and/or principal payments. Accordingly, we may not be able to realize gains or income from our assets.
However, the assets that we acquire may not appreciate in value and, in fact, may decline in value, and the assets that we acquire have experienced and may in the future continue to experience defaults of interest and/or principal payments. Accordingly, we may not be able to realize gains or income from our assets.
Notwithstanding the current period of relatively high interest rates, the U.S. Federal Reserve began decreasing rates in 2024. Although decelerating, inflation remains above the U.S. Federal Reserve's target levels. Despite multiple federal fund rate decreases over the course of 2024, interest rates have 7 remained elevated, with the U.S.
Notwithstanding the current period of relatively high interest rates, the U.S. Federal Reserve began decreasing rates in 2024. Although decelerating, inflation remains above the U.S. Federal Reserve’s target levels. Despite multiple federal funds rate decreases over the course of 2024 and 2025, interest rates have remained elevated, with the U.S.
Such restrictions and requirements could increase our costs or require additional technology and capital investments by our borrowers, which could adversely affect our results of operations.
Such restrictions and requirements could increase our costs or require additional technology and capital investments by our property owners, which could adversely affect our results of operations.
Lument Investment Holdings, LLC and Hunt Companies Equity Holdings, LLC and James C. Hunt (together, the "Hunt Investors") hold a significant interest in our outstanding common stock. As of March 1, 2025, Lument Investment Holdings, LLC owned 27.4% of our outstanding common stock and the Hunt Investors owned 12.2% of our outstanding common stock. In addition, James C.
Lument Investment Holdings, LLC and Hunt Companies Equity Holdings, LLC and James C. Hunt (together, the "Hunt Investors") hold a significant interest in our outstanding common stock. As of March 1, 2026, Lument Investment Holdings, LLC owned 27.3% of our outstanding common stock and the Hunt Investors owned 12.3% of our outstanding common stock. In addition, James C.
Some of the factors that negatively affect the market price of our securities include: • changes in our dividend rates or frequency of payments thereof; • actual or anticipated variations in our quarterly operating results; • changes in our earnings estimates or publication of research reports about us or the real estate industry; • changes in market valuations of similar companies; • adverse market reaction to any increased indebtedness we incur in the future; • additions to or departures of our Manager’s key personnel; • actions by our stockholders; • speculation in the press or investment community; • trading prices of common and preferred equity securities issued by REITs and other similar companies; • failure to satisfy REIT requirements; • general economic and financial conditions; • government action or regulation; and • our issuance of additional preferred equity or debt securities.
Accordingly, no assurance can be given as to the ability of our stockholders to sell their securities or the price that our stockholders may obtain for their securities. 23 Some of the factors that negatively affect the market price of our securities include: • changes in our dividend rates or frequency of payments thereof; • actual or anticipated variations in our quarterly operating results; • changes in our earnings estimates or publication of research reports about us or the real estate industry; • changes in market valuations of similar companies; • adverse market reaction to any increased indebtedness we incur in the future; • additions to or departures of our Manager’s key personnel; • actions by our stockholders; • speculation in the press or investment community; • trading prices of common and preferred equity securities issued by REITs and other similar companies; • failure to satisfy REIT requirements; • general economic and financial conditions; • government action or regulation; and • our issuance of additional preferred equity or debt securities.
Federal Reserve indicating in 2025 an expectation of slower rate decreases moving forward. A slower-than-expected decrease, or a further increase, in interest rates would continue to present a challenge to real estate valuation.
Federal Reserve indicating in early 2026 an expectation of slower rate decreases moving forward. A slower‐than‐expected decrease, or a further increase, in interest rates would continue to present a challenge to real estate valuations.
We urge you to consult your tax advisor concerning the effects of U.S. federal, state, local and foreign tax laws to you with regard to an investment in shares of our stock. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Your investment has various U.S. federal income tax risks. We urge you to consult your tax advisor concerning the effects of U.S. federal, state, local and non U.S. tax laws to you with regard to an investment in shares of our stock. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
In addition, the inability to securitize our portfolio may hurt our performance and our ability to grow our business. 18 In addition, the securitization of our portfolio might magnify our exposure to losses because any equity interest or other subordinate interest we retain in the issuing entity would be subordinate to the notes issued to investors and we would, therefore, absorb all of the losses sustained with respect to a securitized pool of assets before the owners of the notes experience any losses.
In addition, the securitization of our portfolio might magnify our exposure to losses because any equity interest or other subordinate interest we retain in the issuing entity would be subordinate to the notes issued to investors and we would, therefore, absorb all of the losses sustained with respect to a securitized pool of assets before the owners of the notes experience any losses.
Further, validating third-party pricing for illiquid assets may be more subjective than for liquid assets. Any illiquidity of our investments may make it difficult for us to sell such investments if the need or desire arises.
In addition, mortgage-related assets generally experience periods of illiquidity. Further, validating third-party pricing for illiquid assets may be more subjective than for liquid assets. Any illiquidity of our investments may make it difficult for us to sell such investments if the need or desire arises.
A prolonged economic recession and declining real estate values could impair our assets and harm our operations. The risks associated with our business are more severe during economic recessions and are compounded by declining real estate values. The transitional multifamily and other CRE loans in which we may invest will be particularly sensitive to these risks.
The risks associated with our business are more severe during economic recessions and are compounded by declining real estate values. The transitional multifamily and other CRE loans in which we may invest will be particularly sensitive to these risks.
Investors should consult their own tax advisors regarding the effect of this change on their effective tax rate with respect to REIT dividends. REIT distribution requirements could adversely affect our ability to execute our business plan.
Investors should consult their own tax advisors regarding their effective tax rate with respect to REIT dividends. REIT distribution requirements could adversely affect our ability to execute our business plan.
Also, as a result of this competition, desirable investments in these assets may be limited in the future and we may not be able to take advantage of attractive investment opportunities from time to time, as we can provide no assurance that we will be able to identify and make investments that are consistent with our investment objectives.
Also, as a result of this competition, desirable investments in these assets may be limited in the future and we may not be able to take advantage of attractive investment opportunities from time to time, as we can provide no assurance that we will be able to identify and make investments that are consistent with our investment objectives. 13 A prolonged economic recession and declining real estate values could impair our assets and harm our operations.
Moreover, some of the mortgage-backed securities that we acquire may have been issued with original issue discount. We will be required to report such original issue discount based on a constant yield method and will be taxed based on the assumption that all future projected payments due on such mortgage-backed securities will be made.
We will be required to report such original issue discount based on a constant yield method and will be taxed based on the assumption that all future projected payments due on such mortgage-backed securities will be made.
Internal Revenue Service, or the IRS, will not contend that our interests in subsidiaries or in securities of other issuers will not cause a violation of the REIT requirements. 27 If we were to fail to maintain our REIT qualification in any taxable year and were not able to qualify for, or fail to satisfy the requirements of certain statutory relief provisions, we would be subject to U.S. federal income tax, including any applicable alternative minimum tax, on our taxable income at regular corporate rates, and dividends paid to our stockholders would not be deductible by us in computing our taxable income.
If we were to fail to maintain our REIT qualification in any taxable year and were not able to qualify for, or fail to satisfy the requirements of certain statutory relief provisions, we would be subject to U.S. federal income tax, including any applicable alternative minimum tax, on our taxable income at regular corporate rates, and dividends paid to our stockholders would not be deductible by us in computing our taxable income.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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The ORIX USA Information Technology and Cybersecurity Team's responsibilities cover three main areas: (i) operations and engineering, (ii) threat detection and response, and (iii) governance. The ORIX USA CTO leads the cybersecurity team with over four years of experience at ORIX USA and 18 prior years of experience at a large asset management firm.
The ORIX USA Information Technology and Cybersecurity Team's responsibilities cover three main areas: (i) operations and engineering, (ii) threat detection and response, and (iii) governance. The ORIX USA CTO leads the cybersecurity team with over five years of experience at ORIX USA and 18 prior years of experience at a large asset management firm.
The ORIX USA CTO, leads the ORIX USA Information Technology and Cybersecurity Team responsible for managing information security at ORIX USA's asset management business, including its cybersecurity strategy and program, which encompasses annual employee training about cybersecurity risks and new employee onboarding about ORIX USA's security policies.
The ORIX USA CTO leads the ORIX USA Information Technology and Cybersecurity Team responsible for managing information security at ORIX USA's asset management business, including its cybersecurity strategy and program, which encompasses quarterly cybersecurity awareness and new employee onboarding about ORIX USA's security policies.
Periodically, at least annually, ORIX USA's CTO and/or other members of the ORIX USA Information Technology and Cybersecurity Team will present to the Audit Committee on various topics relating to ORIX USA's technology risks, including ORIX USA's cybersecurity program (including the results of cybersecurity tabletop exercises), cybersecurity issues (including those relating to data protection, insider threats, regulatory changes and geopolitical cyber threat management) and risk management (including the results of periodic technology audits).
Our Manager relies on ORIX USA and ORIX USA Information Technology and Cybersecurity Team, including the ORIX USA Chief Technology Officer ("CTO"), to provide us with a comprehensive cybersecurity risk management program. 31 Periodically, at least annually, ORIX USA's CTO and/or other members of the ORIX USA Information Technology and Cybersecurity Team will present to the Audit Committee on various topics relating to ORIX USA's technology risks, including ORIX USA's cybersecurity program (including the results of cybersecurity tabletop exercises), cybersecurity issues (including those relating to data protection, insider threats, regulatory changes and geopolitical cyber threat management) and risk management (including the results of periodic technology audits).
Cybersecurity Risk Management and Strategy ORIX USA has engaged HCLTech ("HCL") to manage all infrastructure and cybersecurity services for ORIX USA and its subsidiaries, under the governance of the ORIX information and cybersecurity leadership team. HCL has over twenty-five years' experience in cybersecurity, nine cybersecurity delivery centers strategically placed across the globe, and employs over 7,000 cybersecurity professionals.
Cybersecurity Risk Management and Strategy ORIX USA has engaged HCLTech ("HCL") to manage all infrastructure and cybersecurity services for ORIX USA and its subsidiaries, under the governance of the ORIX information and cybersecurity leadership team. HCL has over twenty-eight years' experience in cybersecurity, ten Cybersecurity Fusion Centers ("CSFC") strategically placed across the globe, and employs over 8,000 cybersecurity professionals.
HCL will deliver the managed security services to ORIX USA from its Offshore Management Center (OMC) and Cybersecurity Fusion Centers (CSFC) providing 24x7 operations that cover ORIX USA's cybersecurity landscape including network security, email security, endpoint security, data security, application security, cloud security, privileged access management, vulnerability management, cybersecurity incident response, cybersecurity third-party risk, cybersecurity awareness training, phishing simulations and identity and access management.
HCL delivers managed security services to ORIX USA from its Offshore Management Center ("OMC") and CSFCs providing 24x7 operations including security information and event management ("SIEM") and security orchestration, automation and response ("SOAR") platforms which cover ORIX USA's cybersecurity landscape including network security, email security, endpoint security, data security, application security, cloud security, privileged access management, vulnerability management, cybersecurity incident response, cybersecurity third-party risk, cybersecurity awareness training, phishing simulations and identity and access management.
The plan and run books are tested annually through cybersecurity tabletop simulations where incident response technical, and executive team members go through real-world scenarios focused on current cybersecurity threats. ORIX USA’s cybersecurity incident response plan provides for escalation of identified cybersecurity threats and incidents, including, as appropriate, to our management.
ORIX USA maintains a cybersecurity incident response capability that includes detailed policies, plans and modular run books and maps designed around different types of cybersecurity incidents. The plan and run books are tested annually through cybersecurity tabletop simulations where incident response, technical, and executive team members go through real-world scenarios focused on current cybersecurity threats.
Accordingly, we rely and Manager relies on ORIX USA and its cybersecurity risk management program to identify, assess and manage material risks to our business from cybersecurity threats.
Accordingly, we rely and our Manager relies on ORIX USA and its cybersecurity risk management program to identify, assess and manage material risks to our business from cybersecurity threats. To date, cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected the Company, including our business strategy, results of operations or financial condition.
Web application firewalls are designed to protect external facing applications, while our email security gateway utilizes machine learning and multilayered detection techniques designed to filter malicious emails. 31 The ORIX USA Information Technology and Cybersecurity Team monitors security events via a SIEM (security information and event management) and SOAR (security orchestration, automation, and response) platform.
Web application firewalls are designed to protect external facing applications, while our email security gateway utilizes machine learning and multilayered detection techniques designed to filter malicious emails. Mobile device management software is employed with the objective of protecting corporate email and data on mobile devices and is designed to prevent unauthorized data transfer.
To date, cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected nor, are they reasonably likely to materially affect the Company, including our business strategy, results of operations or financial condition. For a discussion of how risks from cybersecurity threats affect our business see, "Part I. Item IA.
For a discussion of how risks from cybersecurity threats affect our business see, "Part I. Item 1A.
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Our Manager relies on ORIX USA and ORIX USA Information Technology and Cybersecurity Team, including the ORIX USA Chief Technology Officer ("CTO"), to provide us with a comprehensive cybersecurity risk management program.
Added
ORIX USA’s cybersecurity incident response plan provides for escalation of identified cybersecurity threats and incidents, including, as appropriate, to our management.
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Mobile device management software is employed with the objective of protecting corporate email and data on mobile devices and is designed to prevent unauthorized data transfer. ORIX USA maintains a cybersecurity incident response capability that includes detailed policies, plans and modular run books and maps designed around different types of cybersecurity incidents.

Item 2. Properties

Properties — owned and leased real estate

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ITEM 2. PROPERTIES We do not own any real estate or other physical properties. We maintain our corporate headquarters at 230 Park Avenue, 20th Floor, New York, NY 10169 in office space furnished to us by our Manager.
ITEM 2. PROPERTIES We maintain our corporate headquarters at 230 Park Avenue, 20th Floor, New York, NY 10169 in office space furnished to us by our Manager. We reimburse our Manager under the Management Agreement between us for lease and other related expenses incurred in furnishing us with our offices.
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We reimburse our Manager under the Management Agreement between us for lease and other related expenses incurred in furnishing us with our offices. We believe that our property is maintained in good condition and is suitable and adequate for our purposes.
Added
We believe that our property is maintained in good condition and is suitable and adequate for our purposes. For an overview of our real estate investments, see Note 5 to our consolidated financial statements.
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Overview We are a Maryland corporation that is focused on investing in, originating, financing and managing a portfolio of CRE debt investments.
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In January 2020, we entered into a series of transactions with subsidiaries of ORIX USA, a diversified financial company with the ability to provide investment capital and asset management services to clients in the corporate, real estate and municipal finance sectors.
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We entered into a new management agreement with Lument IM, while another affiliate of ORIX USA purchased an ownership stake of approximately 5.0% through a privately placed stock issuance. On February 22, 2022, the affiliate purchased an additional 13,071,895 shares of common stock from the transferable common stock rights offering, increasing its beneficial ownership in the Company to approximately 27.4%.
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These transactions have enhanced the scale of LFT and are expected to generate shareholder value through leveraging ORIX USA's expansive originations, asset management and servicing platform. Lument IM is an affiliate of Lument, a nationally recognized leader in multifamily and seniors housing and health care finance. The Company leverages Lument's broad platform and significant expertise when originating and underwriting investments.
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We invest primarily in transitional floating rate CRE mortgage loans with an emphasis on middle market multifamily assets. We may also invest in other CRE-related investments including mezzanine loans, preferred equity, commercial mortgage-backed securities, fixed rate loans, construction loans and other CRE debt instruments.
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We finance our current investments in transitional multifamily and other CRE loans primarily through matched term non-recourse secured borrowings, including CLOs, which are not subject to margin calls or additional collateralization requirements. We may utilize warehouse repurchase agreements or other forms of financing in the future.
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Our primary sources of income are net interest from our investment portfolio and non-interest income from our mortgage loan-related activities. Net interest income represents the interest income we earn on investments less the expense of funding these investments.
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Our investments typically have the following characteristics: • Sponsors with experience in particular real estate sectors and geographic markets; • Located in U.S. markets with multiple demand drivers, such as growth in employment and household formation; • Fully funded principal balance greater than $5 million and generally less than $75 million; • Loan to Value ratio up to 85% of as-is value and up to 75% of as stabilized value; • Floating rate loans tied to one-month term SOFR, and/or in the future potentially other index replacement; and • Three-year term with two one-year extension options.
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We believe that our current investment strategy provides significant opportunities to achieve attractive risk-adjusted returns for our stockholders over time. However, to capitalize on the investment opportunities at different points in the economic and real estate investment cycle, we may modify or expand our investment strategy.
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We believe that the flexibility of our strategy, which is supported by significant CRE experience of Lument's investment team, and the extensive resources of ORIX USA, will allow us to take advantage of changing market conditions to maximize risk-adjusted returns to our stockholders.
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We have elected to be taxed as a REIT and comply with the provisions of the Internal Revenue Code with respect thereto. Accordingly, we are generally not subject to federal income tax on our REIT taxable income that we currently distribute to our stockholders so long as we maintain our qualification as a REIT.
Removed
Our continued qualification as a REIT depends on our ability to meet, on a continuing basis, various complex requirements under the Internal Revenue Code relating to, among other things, the source of our gross income, the composition and values of our assets, our distribution levels and the concentration of ownership of our capital stock.
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Even if we maintain our qualification as a REIT, we may become subject to some federal, state and local taxes on our income generated in our wholly owned TRS, Five Oaks Acquisition Corp. ("FOAC").
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Recent Developments The last several quarters have been characterized by significant volatility in global markets, driven by heightened inflation, higher interest rates, slowing economic growth, geopolitical uncertainty and instability in the banking sector following multiple bank failures.
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Inflation reached generational highs in many economies, prompting central banks to take monetary policy tightening actions that have and are likely to continue to create headwinds to economic growth. Notwithstanding the current period of relatively high interest rates, the U.S. Federal Reserve began decreasing rates in 2024. Although decelerating, inflation remains above the U.S. Federal Reserve's target levels.
Removed
Despite multiple federal fund rate decreases over the course of 2024, interest rates have remained elevated, with the U.S. Federal reserve indicating in 2025 an expectation of slower rate decreases moving forward.
Removed
Although our business model is such that higher interest rates will, all else being equal, correlate to increases in our net income, interest rates remaining elevated for an extended period of time may adversely affect our existing borrowers.
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Additionally, higher interest rates and unpredictable geopolitical landscape may cause further dislocation in the 32 capital markets resulting in a continual reduction of available liquidity and an increase in borrowing costs. A lack of liquidity for a prolonged period of time could limit our ability to grow our business.
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It remains difficult to predict the full impact of recent events and any future changes in interest rate or inflation. 2024 Highlights Operating results • Net income attributable to common stockholders of $17.9 million, or $0.34 per share of common stock • Distributable Earnings of $23.2 million, or $0.44 per share of common stock • Declared aggregate quarterly common dividends of $16.2 million, or $0.31 per share of common stock in addition to a special dividend of $4.7 million, or $0.09 per share of common stock.
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In the second quarter we increased the common dividend from $0.07 per share of common stock to $0.08 per share of common stock, a 14% increase from the first quarter.
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The fourth quarter dividend of $0.08 per share of common stock produced an annualized yield of 12.4% on our closing stock price as of December 31, 2024 • Book value of common stock as of December 31, 2024 was $177.8 million, or $3.40 per share of book value of common stock Investment Activity • Acquired three loans with an initial unpaid principal balance of $58.4 million and a weighted average interest rate of 30-day term SOFR plus 3.35% • Experienced $391.0 million in loan payoffs • $1.1 billion senior loan portfolio is 100% floating rate with an average spread to 30-day term SOFR of 3.58%, excluding unamortized purchase discounts of $3.5 million and deferred loan fees of $1.2 million as of December 31, 2024 • Multifamily assets represent 92.3% of loan portfolio Portfolio Financing • Non-mark-to-market financing is $0.8 billion with an average spread to 30-day term SOFR of 2.26% as of December 31, 2024, representing 100% of our secured financings

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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ITEM 3. LEGAL PROCEEDINGS From time to time, we are or may become involved in various claims and legal actions arising in the ordinary course of business. As of December 31, 2024, we were not involved in any material legal proceedings. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 33 PART II
ITEM 3. LEGAL PROCEEDINGS From time to time, we are or may become involved in various claims and legal actions arising in the ordinary course of business. As of December 31, 2025, we were not involved in any material legal proceedings. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 32 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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As of March 17, 2025, there were 17 registered holders. The number of beneficial stockholders is substantially greater than the number of holders of record as a large portion of our stock is held in "street name" through banks or broker dealers. Dividends Dividends on our common stock are paid on a quarterly basis.
As of March 17, 2026, there were 14 registered holders of our common stock. The number of beneficial stockholders is substantially greater than the number of holders of record as a large portion of our stock is held in "street name" through banks or broker dealers. Dividends Dividends on our common stock are paid on a quarterly basis.
See Item 1A, "Risk Factors," and Item 7, “Management’s Discussion and Analysis of Financial Conditions and Results of Operations," of this Annual Report on Form 10-K, for information regarding the sources of funds used for dividends and for a discussion of factors, if any, which may adversely affect our ability to pay dividends at the same level in 2025 and thereafter.
See Item 1A, "Risk Factors," and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations," of this Annual Report on Form 10-K, for information regarding the sources of funds used for dividends and for a discussion of factors, if any, which may adversely affect our ability to pay dividends at the same level in 2026 and thereafter.
Under this program, we have discretion to determine the dollar amount of common shares to be repurchased and the timing of any repurchases in compliance with applicable law and regulations. The program does not have an expiration date. The Company did not purchase any common shares under the plan during the twelve months ended December 31, 2024. 34
Under this program, we have discretion to determine the dollar amount of common shares to be repurchased and the timing of any repurchases in compliance with applicable law and regulations. The program does not have an expiration date. The Company did not purchase any common shares under the plan during the twelve months ended December 31, 2025. 33
The following table presents cash dividends declared on our common stock from January 1, 2023 through December 31, 2024: Common Dividends Declared per Share Declaration Date Amount Record Date Date of Payment March 16, 2023 $ 0.06 March 31, 2023 April 17, 2023 June 14, 2023 $ 0.06 June 30, 2023 July 17, 2023 September 14, 2023 $ 0.07 September 29, 2023 October 16, 2023 December 14, 2023 $ 0.07 December 29, 2023 January 16, 2024 March 15, 2024 $ 0.07 March 28, 2024 April 15, 2024 June 13, 2024 $ 0.08 June 28, 2024 July 15, 2024 September 16, 2024 $ 0.08 September 30, 2024 October 15, 2024 December 12, 2024 $ 0.08 December 31, 2024 January 15, 2025 December 12, 2024 $ 0.09 December 31, 2024 January 15, 2025 Purchases of Equity Securities by the Issuer and Affiliated Purchasers On December 16, 2015, we announced a share repurchase program, pursuant to which our Board authorized us to repurchase up to $10 million of our common shares.
The following table presents cash dividends declared on our common stock from January 1, 2024 through December 31, 2025: Common Dividends Declared per Share Declaration Date Amount Record Date Date of Payment March 15, 2024 $ 0.07 March 28, 2024 April 15, 2024 June 13, 2024 $ 0.08 June 28, 2024 July 15, 2024 September 16, 2024 $ 0.08 September 30, 2024 October 15, 2024 December 12, 2024 $ 0.08 December 31, 2024 January 15, 2025 December 12, 2024 $ 0.09 December 31, 2024 January 15, 2025 March 19, 2025 $ 0.08 March 31, 2025 April 15, 2025 June 20, 2025 $ 0.06 June 30, 2025 July 15, 2025 September 16, 2025 $ 0.04 September 30, 2025 October 15, 2025 December 11, 2025 $ 0.04 December 31, 2025 January 15, 2026 Purchases of Equity Securities by the Issuer and Affiliated Purchasers On December 16, 2015, we announced a share repurchase program, pursuant to which our Board authorized us to repurchase up to $10 million of our common shares.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information On March 17, 2025, the last reported sales price for our common stock on the New York Stock Exchange under symbol "LFT" was $2.74. Holders At December 31, 2024, there were 52,309,209 shares of our common stock outstanding.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information On March 17, 2026, the last reported sales price for our common stock on the New York Stock Exchange under the symbol "LFT" was $1.38. Holders At December 31, 2025, there were 52,399,265 shares of our common stock outstanding.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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For the year ended December 31, 2024, we experienced loan payoffs on 23 loans with net principal balances of $314.5 million which generated exit fees of $2.6 million included in interest income and 5 loans with net principal balances of $46.9 million which waived exit fees of $0.6 million resulting in a reduction to expense reimbursement of $0.3 million included in operating expenses reimbursable to Manager.
For the year ended December 31, 2024, we experienced loan payoffs on 23 loans with a net principal balances of $314.5 million which generated exit fees of $2.6 million included in interest income and 5 loans with a net principal balances of $46.9 million which waived exit fees of $0.6 million resulting in a reduction to expense reimbursement of $0.3 million included in operating expenses reimbursable to Manager.
Expenses We incurred management and incentive fees of $6,630,571 for the year ended December 31, 2024 representing amounts payable to our Manager under our management agreement. We also incurred operating expenses of $6,877,462, of which $1,799,570 was payable to our Manager and $5,077,892 was payable to third parties.
For the year ended December 31, 2024, we incurred management and incentive fees of $6,630,571, representing amounts payable to our Manager under our Management Agreement. We also incurred operating expenses of $6,877,462, of which $1,799,570 was payable to our Manager and $5,077,892 was payable to third parties.
This loss was primarily driven by provision for credit losses of $5,275,122 primarily due to specific reserves taken on risk-rated "5" multifamily loans, changes in macroeconomic assumptions employed in determining the Company's model-based general reserve and the impact of net unrealized losses on mortgage servicing rights of $42,686 as a result of reduction in principal balance in the period which more than offset mortgage servicing income of $137,230.
This loss was primarily driven by provision for credit losses of $5,275,122 primarily due to specific reserves taken on risk-rated "5" multifamily loans, changes in macroeconomic assumptions employed in determining the Company's model-based general reserve and the impact of net unrealized losses on mortgage servicing rights of $42,686 as a result of a reduction in principal balance in the period which more than offset net mortgage servicing income of $137,230.
However, to the extent that we seek to invest in additional commercial mortgage loans, we will in part be dependent on our ability to issue additional collateralized loan obligations to secure alternative financing facilities or to raise additional common or preferred equity. Notwithstanding the current period of relatively high interest rates, the U.S. Federal Reserve began decreasing rates in 2024.
However, to the extent that we seek to invest in additional commercial mortgage loans, we will in part be dependent on our ability to issue additional collateralized loan obligations, secure alternative financing facilities or to raise additional common or preferred equity. Notwithstanding the current period of relatively high interest rates, the U.S. Federal Reserve began decreasing rates in 2024.
See Note 11 Commitments and Contingencies to our consolidated financial statements for further discussion of unfunded commitments. (2) Committed Principal Amount includes funded participations by LFT-affiliated entities and third parties that are syndicated/sold. (3) LTV as of the date the loan was originated by a Hunt/ORIX affiliate and is calculated after giving effect to capex and earn-out reserves, if applicable.
See Note 11 Commitments and Contingencies to our consolidated financial statements for further discussion of unfunded commitments. (2) Committed Principal Amount includes funded participations by LFT-affiliated entities and third parties that are syndicated/sold. (3) LTV as of the date the loan was originated by a ORIX affiliate and is calculated after giving effect to capex and earn-out reserves, if applicable.
The CRE CLOs and other secured financings we have entered into, and may in the future enter into, include certain interest coverage tests, overcollateralization coverage tests or other tests that, if not met, may result in a change in the priority of distributions, which may result in the reduction or elimination of distributions to the subordinate debt and equity tranches retained by us until the tests have been met or certain senior classes of securities have been paid in full.
The CRE CLOs and other secured financings we have entered into, and may in the future enter into, include certain interest coverage tests, overcollateralization coverage tests, financial or other tests that, if not met, may result in a change in the priority of distributions, which may result in the reduction or elimination of distributions to the subordinate debt and equity tranches retained by us until the tests have been met or certain senior classes of securities have been paid in full.
On July 12, 2023, we closed LMF 2023-1 placing $270.4 million of an investment-grade rated senior secured floating-rate loan with a private lender, issued and sold approximately $47.3 million of investment-grade rated notes to an affiliate of our Manager and retained the subordinate interests in the issuing vehicle of approximately $68.6 million.
On July 12, 2023, we closed LMF 2023-1 Financing, placing $270.4 million of an investment-grade rated senior secured floating-rate loan with a private lender, issued and sold approximately $47.3 million of investment-grade rated notes to an affiliate of our Manager and retained the subordinate interests in the issuing vehicle of approximately $68.6 million.
Prepayment risk is the risk that principal will be repaid at a different rate than anticipated, causing the return on certain investments to be less than expected. As we receive prepayments of principal on our assets, any premiums paid on such assets are amortized against interest income.
Prepayment speeds . Prepayment risk is the risk that principal will be repaid at a different rate than anticipated, causing the return on certain investments to be less than expected. As we receive prepayments of principal on our assets, any premiums paid on such assets are amortized against interest income.
The term of such backstop guarantee was the earlier of the contractual maturity of the underlying mortgage and its repayment in full. However, the incidence of claims for breaches of representations and warranties over time is considered unlikely to occur more than five years from the sale of a mortgage.
The term of such backstop guarantee was the earlier of the contractual maturity of the underlying mortgage and its repayment in full. 44 However, the incidence of claims for breaches of representations and warranties over time is considered unlikely to occur more than five years from the sale of a mortgage.
For the year ended December 31, 2024, our cash flows from operating activities were primarily driven by interest received from the junior retained notes and preferred shares of the 2021-FL1 CLO and LMF 2023-1 Financing of $37.8 million interest received from our senior secured loans held outside the VIEs we consolidate of $3.8 million, interest received on cash accounts of $2.7 million and cash received from mortgage servicing rights of $0.1 million exceeding cash interest expense paid on our Secured Term Loan of $3.5 million, management and incentive fees of $6.6 million, expense reimbursements of $1.8 million and other operating expenditures of $5.3 million.
For the year ended December 31, 2024, our cash flows from operating activities were primarily driven by $37.8 million of interest received from the junior retained notes and preferred shares of 2021-FL1 CLO and LMF 2023-1 Financing, interest received on cash accounts of $2.7 million, $3.8 million of interest received from our senior secured loans held outside the VIE we consolidate and $0.1 million of cash received from mortgage servicing rights exceeding cash interest expense paid on our Secured Term Loan of $3.5 million, management and incentive fees of $6.6 million, expense reimbursements of $1.8 million and other operating expenditures of $5.3 million.
We intend to continue to maintain a level of liquidity in relation to our assets that enables us to meet reasonably anticipated investment requirements and unforeseen business needs but that also allows us to be substantially invested in our target assets.
We intend to continue to maintain a level of liquidity in relation to our assets that enables us to meet reasonably anticipated investment requirements, margin requirements and unforeseen business needs but that also allows us to be substantially invested in our target assets.
For the 43 period beyond which the Company is able to make reasonable and supportable forecasts, the Company reverts, on a straight-line basis over four quarters, to the historical loss information derived from CRE data set.
For the period beyond which the Company is able to make reasonable and supportable forecasts, the Company reverts, on a straight-line basis over four quarters, to the historical loss information derived from CRE data set.
Key Financial Measure and Indicators As a real estate investment trust, we believe the key financial measures and indicators for our business are earnings per share, dividends declared, Distributable Earnings, and book value per share of common stock.
Key Financial Measures and Indicators As a real estate investment trust, we believe the key financial measures and indicators for our business are earnings per share, dividends declared, Distributable Earnings, and book value per share of common stock.
In 35 general, an increase in prepayment rates accelerates the amortization of purchase premiums, thereby reducing the interest income earned on the assets. Conversely, discounts on such assets are accreted into interest income. In general, an increase in prepayment rates accelerates the accretion of purchase discounts, thereby increasing the interest earned on the assets.
In general, an increase in prepayment rates accelerates the amortization of purchase premiums, thereby reducing the interest income earned on the assets. Conversely, discounts on such assets are accreted into interest income. In general, an increase in prepayment rates accelerates the accretion of purchase discounts, thereby increasing the interest earned on the assets.
As of December 31, 2024, 99.9% of our investments by total investment exposure earned a floating rate of interest, of which 100.0% were indexed to 30-day term SOFR, and all of our collateralized loan obligations and secured financings were indexed to 30-day term SOFR, and as a result we are less sensitive to variability in our net interest income resulting from interest rate changes.
As of December 31, 2025, 99.9% of our investments by total investment exposure earned a floating rate of interest, of which 100.0% were indexed to 30-day term SOFR, and all of our collateralized loan obligations and secured financings were indexed to 30-day term SOFR, and as a result we are less sensitive to variability in our net interest income resulting from interest rate changes.
As of December 31, 2024 and December 31, 2023, 100.0% of the investments by total investment exposure earned a floating rate indexed to 30-day term SOFR. (3) Weighted average remaining term assumes all extension options are exercised by the borrower; provided, however, that our loans may be repaid prior to such date.
As of December 31, 2025 and December 31, 2024, 100.0% of the investments by total investment exposure earned a floating rate indexed to 30-day term SOFR. (3) Weighted average remaining term assumes all extension options are exercised by the borrower; provided, however, that our loans may be repaid prior to such date.
As of December 31, 2024 and December 31, 2023, we were in compliance with these covenants. The Credit Agreement contains events of default that are customary for facilities of this type, including, but not limited to, nonpayment of principal, interest, fees and other amounts when due, violation of covenants, cross default with material indebtedness, and change of control.
As of December 31, 2025 and December 31, 2024, we were in compliance with these covenants. The Credit Agreement contains events of default that are customary for facilities of this type, including, but not limited to, nonpayment of principal, interest, fees and other amounts when due, violation of covenants, cross default with material indebtedness, and change of control.
The Company determines its allowance for credit loss estimate based on the weighting of multiple macroeconomic forecast scenarios driven by macroeconomic variables such as gross domestic product ("GDP"), unemployment rate, federal funds target rate and core personal consumption expenditure ("CPR") among others, during the reasonable and supportable forecast period.
The Company determines its allowance for credit loss estimate based on the weighting of multiple macroeconomic forecast scenarios driven by macroeconomic variables such as gross domestic product ("GDP"), unemployment rate, federal funds target rate and core personal consumption expenditure ("PCE") among others, during the reasonable and supportable forecast period.
As of December 31, 2024, pursuant to an Assumption Agreement dated December 31, 2018, among MAXEX Clearing LLC and FOAC, MAXEX Clearing LLC assumed all of FOAC's obligations under its backstop guarantees and agreed to indemnify and hold FOAC harmless against any losses, liabilities, costs, expenses and obligations under the backstop guarantees. See Note 11 for further information.
As of December 31, 2025, pursuant to an Assumption Agreement dated December 31, 2018, among MAXEX Clearing LLC and FOAC, MAXEX Clearing LLC assumed all of FOAC's obligations under its backstop guarantees and agreed to indemnify and hold FOAC harmless against any losses, liabilities, costs, expenses and obligations under the backstop guarantees. See Note 11 for further information.
The financing had an initial two-and-a-half year reinvestment period that allows principal proceeds of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture. Thereafter, the outstanding debt balance will be reduced as loans are repaid.
The financing has an initial two-and-a-half year reinvestment period that allows principal proceeds of the loan obligations to be in reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture. Thereafter, the outstanding debt balance will be reduced as loans are repaid.
On August 23, 2021 we drew an additional $7.5 million of our Secured Term Loan pursuant to the Third Amendment. As of December 31, 2024, our balance sheet included $47.8 million of a secured term loan and $0.8 billion in collateralized loan financing, gross of discounts and debt issuance costs.
On August 23, 2021 we drew an additional $7.5 million of our Secured Term Loan pursuant to the Third Amendment. As of December 31, 2025, our balance sheet included $47.8 million of a secured term loan and $0.8 billion in collateralized loan financing, gross of discounts and debt issuance costs.
In addition, decreases in property values reduce the value of the collateral and potential proceeds available to a borrower to repay the underlying loans, which could also cause us to suffer losses. As of December 31, 2024, 97.8% of the commercial mortgage loans in our portfolio were current as to principal and interest.
In addition, decreases in property values reduce the value of the collateral and potential proceeds available to a borrower to repay the underlying loans, which could also cause us to suffer losses. As of December 31, 2025, 97.8% of the commercial mortgage loans in our portfolio were current as to principal and interest.
Accordingly, if such tests are not satisfied, we, as holders of the subordinate debt and equity interests in the applicable CRE CLO or secured financing, may experience a significant reduction in our cash flow from those interests, which would impact our liquidity. Prepayment speeds .
Accordingly, if such tests are not satisfied, we, as holders of the subordinate debt and equity interests in the applicable CRE CLO or secured financing, may experience a significant reduction in our cash flow from those interests, which would impact our liquidity.
While the interest rate spreads of our secured borrowings are fixed until they are repaid, the terms, including spreads, of newly originated loans are subject to uncertainty based on a variety of factors, including market and competitive conditions, which remain uncertain and volatile in the current inflationary environment.
Currently, the interest rate spreads of our secured borrowings are fixed until they are repaid, the terms, including spreads, of newly originated loans are subject to uncertainty based on a variety of factors, including market and competitive conditions, which remain uncertain and volatile in the current inflationary environment.
We continue to work with our borrowers to address issues as they arise while seeking to preserve the credit attributes of our loan. However, we cannot assure you that these efforts will be successful, and we may experience payment delinquencies, defaults, foreclosures or losses.
We continue to work with our borrowers to address issues as they arise while seeking to preserve the credit attributes of our loans. However, we cannot assure you that these efforts will be successful, and we may experience payment delinquencies, defaults, foreclosures or losses.
A consolidated subsidiary of LFT retained the subordinate interests in the issuing vehicle of approximately $68.6 million. The Senior Debt has an initial weighted average spread of approximately 0.0314 basis points over 30-day term SOFR, excluding fees and transaction costs.
A consolidated subsidiary of LFT retained the subordinate interests in the issuing vehicle of approximately $68.6 million. The Senior Debt has an initial weighted average spread of approximately 314.0 basis points over 30-day term SOFR, excluding fees and transaction costs.
We anticipate debate on residential housing and mortgage reform to continue through 2025 and beyond, but a deep divide persists between factions in Congress and as such it remains unclear what shape any reform would take and what impact, if any, reform would have on mortgage REITs.
We anticipate debate on residential housing and mortgage reform to continue through 2026 and beyond, but a deep divide persists between factions in Congress and as such it remains unclear what shape any reform would take and what impact, if any, reform would have on mortgage REITs.
Investing Activities For the year ended December 31, 2024, net cash provided by investing activities totaled $334.1 million. This was a result of cash received from the principal repayment of commercial mortgage loans exceeding the cash used for the purchase and funding of commercial mortgage loans held for investment during the period.
For the year ended December 31, 2024, net provided by investing activities totaled $334.1 million. This was a result of cash received from the principal repayment of commercial mortgage loans held-for-investment exceeding the cash used for the purchase and funding of commercial mortgage loans held for investment for the year ended December 31, 2024.
Off-Balance Sheet Arrangements As of December 31, 2024, we did not maintain any relationships with unconsolidated financial partnerships, or special purpose or variable interest entities established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Off-Balance Sheet Arrangements As of December 31, 2025, we did not maintain any relationships with unconsolidated financial partnerships, or special purpose or variable interest entities established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
However, to the extent that we seek to invest in additional commercial mortgage loans, outside of our secured borrowings, we will in part be dependent on our ability to issue additional collateralized loan obligations, to secure alternative financing facilities or to raise additional common or preferred equity.
However, to the extent that we seek to invest in additional commercial mortgage loans, outside of our secured borrowings, we will in part be dependent on our ability to issue additional collateralized loan obligations, master repurchase agreements, to secure alternative financing facilities or to raise additional common or preferred equity.
The Senior Debt matures on the payment date in July 2032, unless it is sooner repaid or redeemed in accordance with its terms. The financing has an initial two-year reinvestment period that allows principal proceeds of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture.
The Senior Debt matures on the payment date in July 2032, unless it is sooner repaid or redeemed in accordance with its terms. The financing had an initial two-year reinvestment period that allowed principal proceeds of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture.
In the case of significant increase in interest rates, the additional debt service payments due from our borrowers may strain the operating cash flows of the real estate assets underlying our mortgages and/or impact their ability to be refinanced at such higher interest rates, potentially, contribute to non-performance or, in severe cases, default.
In the case of a significant increase in interest rates or the continued elevation in current rates, the additional debt service payments due from our borrowers may strain the operating cash flows of the real estate assets underlying our mortgages and/or impact their ability to be refinanced at such higher interest rates potentially contribute to non-performance or, in severe cases, default.
Further, as of December 31, 2024, we had not guaranteed any obligations of unconsolidated entities or entered into any commitment or intent to provide funding to any such entities.
Further, as of December 31, 2025, we had not guaranteed any obligations of unconsolidated entities or entered into any commitment or intent to provide funding to any such entities.
The Company expects to use this proxy data set, or variants of it, unless the Company develops its own sufficient history of realized losses. The Company determined the key variables driving its allowance for credit losses estimate are debt service coverage ratio and LTV ratio. Other notable variables include property type, property location and loan vintage.
The Company uses this proxy data set, or variants of it, unless the Company develops its own sufficient history of realized losses. The Company determined the key variables driving its allowance for credit losses estimate are debt service coverage ratio and LTV ratio. Other notable variables include property type, property location and loan vintage.
Additionally, we have reviewed the loans designated as Default Risk for impairment. Impairment of these loans, which are collateral dependent, is measured by comparing the estimated fair value of the underlying collateral, less costs to sell, to the book value of the respective loan.
Additionally, we have reviewed the loans designated as Default Risk for specific credit reserves. 35 Impairment of these loans, which are collateral dependent, is measured by comparing the estimated fair value of the underlying collateral, less costs to sell, to the book value of the respective loan.
For the year ended December 31, 2023, our cash flows from operating activities were primarily driven by $34.0 million of interest received from the junior retained notes and preferred shares of 2021-FL1 CLO and LMF 2023-1 Financing, interest received on cash accounts of $2.4 million, $1.5 million of interest received from our senior secured loans held outside the VIE we consolidate and $0.2 million of cash received from mortgage servicing rights exceeding cash interest expense paid on our Secured Term Loan of $3.5 million, management and incentive fees of $4.3 million, expense reimbursements of $1.9 million and other operating expenditures of $3.5 million.
For the year ended December 31, 2025, our cash flows from operating activities were primarily driven by interest received from the junior retained notes and preferred shares of the 2021-FL1 CLO, LMF 2023-1 Financing and LMNT 2025-FL3 CLO of $20.4 million interest received from our senior secured loans held outside the VIEs we consolidate of $0.3 million, interest received on cash accounts of $2.3 million and cash received from mortgage servicing rights of $0.2 million exceeding cash interest expense paid on our Secured Term Loan of $3.7 million, management and incentive fees of $4.6 million, expense reimbursements of $1.9 million and other operating expenditures of $5.3 million.
As of December 31, 2024, our aggregate unaccreted purchase discount was $3.5 million, and accordingly we do not believe this to be a material risk to interest income for us at present. Additionally, we are subject to prepayment risk associated with the terms of our secured borrowings.
As of December 31, 2025, our aggregate unaccreted purchase discount was $1.7 million, and accordingly we do not believe this to be a material risk to interest income for us at present. Additionally, we are subject to prepayment risk associated with the terms of our secured borrowings.
The weighted average risk rating of our total loan exposure was 3.5 as of December 31, 2024 and December 31, 2023, respectively.
The weighted average risk rating of our total loan exposure was 3.2 and 3.5 as of December 31, 2025 and December 31, 2024, respectively.
We have acquired twenty-nine loans and seventeen funded loan advances with an initial aggregate unpaid principal balance of $473.1 million with an aggregate purchase discount of $8.1 million. All of our other commercial mortgage loans were acquired at par.
We have acquired twenty-nine loans and nineteen funded loan advances with an initial aggregate unpaid principal balance of $474.1 million with an aggregate purchase discount of $8.2 million. All of our other commercial mortgage loans were acquired at par.
Changes in market interest rates . Generally, our business model is such that rising interest rates will increase our net interest income, while declining interest rates will decrease our net interest income.
Generally, our business model is such that rising interest rates will increase our net interest income, while declining interest rates will decrease our net interest income.
The assets of the 2021-FL1 CLO and LMF 2023-1 are restricted and can only be used to fulfill their respective obligations, and accordingly the obligations of the trust, which we classify as collateralized loan obligations, do not have any recourse to us as the consolidator of the trust.
The assets of the LMF 2023-1 Financing and LMNT 2025-FL3 CLO are restricted and can only be used to fulfill their respective obligations, and accordingly the obligations of the trust, which we classify as collateralized loan obligations, do not have any recourse to us as the consolidator of the trust.
Financing Activities For the year ended December 31, 2024, net cash used in financing activities totaled $341.2 million. This was due to payments of common stock dividends of $15.7 million, payments of preferred stock dividends of $4.7 million, and repayment of collateralized loan obligations of $320.8 million.
For the year ended December 31, 2024, net cash used in financing activities totaled $341.2 million and primarily related to payments of common stock dividends of $15.7 million, payment of preferred stock dividends of $4.7 million and repayment of collateralized loan obligations of $320.8 million.
As of December 31, 2024, we had unrestricted cash and cash equivalents of $69.2 million, compared to $51.2 million as of December 31, 2023. As of December 31, 2024, we had $47.8 million in outstanding principal under our Senior Secured Term Loan, with a borrowing rate of 7.25%.
As of December 31, 2025, we had unrestricted cash and cash equivalents of $23.1 million, compared to $69.2 million as of December 31, 2024. 48 As of December 31, 2025, we had $47.8 million in outstanding principal under our Senior Secured Term Loan, with a borrowing rate of 7.25%.
The measurement of expected credit losses under CECL is applicable to financial assets measured at amortized cost, and off-balance credit exposures such as unfunded loan commitments. The allowance for credit losses required under ASC 2016-13 is included in "Allowance for credit losses" on our consolidated balance sheets.
The measurement of expected credit losses under CECL is applicable to financial assets measured at amortized cost, and off-balance credit exposures such as unfunded loan commitments. The allowance for credit losses required under the FASB ASC Topic " Financial Instruments - Credit Losses ," or ASC 326, is included in "Allowance for credit losses" on our consolidated balance sheets.
This risk is partially mitigated during the underwriting process, which generally includes a requirement for our borrowers to purchase interest rate cap contracts with an unaffiliated third-party, provide an interest rate reserve deposit, and/or provide other structural protections. As of December 31, 2024, 79.7% of our performing loans have interest rate caps with a weighted-average strike price of 2.4%.
This risk is partially mitigated during the underwriting process, which generally includes a requirement for our borrowers to purchase interest rate cap contracts with an unaffiliated third-party, provide an interest rate reserve deposit, and/or provide other structural protections. As of December 31, 2025, 72.6% of our performing loans have interest rate caps with a weighted-average strike price of 3.9%.
Forward-Looking Statements Regarding Liquidity Based upon our current portfolio, leverage rate and available borrowing arrangements, we believe that the net proceeds of our prior equity sales, combined with cash flow from operations and available borrowing capacity will be sufficient to enable us to meet anticipated short-term (one year or less) liquidity requirements to fund our investment activities, pay fees under our management agreement, fund our distributions to stockholders and for other general corporate expenses.
The maximum potential future payment amount we could be required to pay under these indemnification obligations may be unlimited. 49 Forward-Looking Statements Regarding Liquidity Based upon our current portfolio, leverage rate and available financing arrangements, we believe that the net proceeds of our prior equity sales, combined with cash flow from operations and available borrowing capacity will be sufficient to enable us to meet anticipated short-term (one year or less) liquidity requirements to fund our investment activities, pay fees under our Management Agreement, fund our distributions to stockholders and for other general corporate expenses.
Earnings Per Share and Dividends Declared The following table sets forth the calculation of basic and diluted net income per share and dividends declared per share: Three Months Ended December 31, Year Ended December 31, 2024 2024 2023 Net income attributable to common stockholders $ 3,604,879 $ 17,909,190 $ 14,974,496 Weighted-average shares outstanding, basic and diluted 52,300,100 52,274,904 52,231,296 Net income per share, basic and diluted $ 0.07 $ 0.34 $ 0.29 Dividends declared per share $ 0.17 $ 0.40 $ 0.26 Distributable Earnings Distributable Earnings is a non-GAAP financial measure, which we define as GAAP net income (loss) attributable to holders of common stock, or, without duplication, owners of our subsidiaries, 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 Board and approved by a majority of the Company's independent directors.
Earnings (Loss) Per Share and Dividends Declared The following table sets forth the calculation of basic and diluted net income per share and dividends declared per share: 36 Three Months Ended December 31, Year Ended December 31, 2025 2025 2024 Net (loss) income attributable to common stockholders $ (8,942,111) $ (7,485,309) $ 17,909,190 Weighted-average shares outstanding, basic and diluted 52,381,724 52,344,316 52,274,904 Net (loss) income per share, basic and diluted $ (0.17) $ (0.14) $ 0.34 Dividends declared per share $ 0.04 $ 0.22 $ 0.40 Distributable Earnings (Loss) Distributable Earnings is a non-GAAP financial measure, which we define as GAAP net income (loss) attributable to holders of common stock, or, without duplication, owners of our subsidiaries, 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 Board and approved by a majority of the Company's independent directors.
On July 12, 2023, the Company entered into and closed a matched-term non-recourse collateralized commercial real estate financing (the "LMF 2023-1 Financing"), secured by $386.4 million of first lien floating-rate multifamily mortgage assets and is not subject to margin calls or additional collateralization requirements.
On November 18, 2025, the Company optionally redeemed the 2021-FL1 CLO in full. On July 12, 2023, the Company entered into and closed a matched-term non-recourse collateralized commercial real estate financing (the "LMF 2023-1 Financing"), secured by $386.4 million of first lien floating-rate multifamily mortgage assets and not subject to margin calls or additional collateralization requirements.
As of December 31, 2024, 100.0% of the investments by total exposure earned a floating rate indexed to 30-day term SOFR. Weighted average coupon for the financings assumes applicable 30-day term SOFR of 4.40% as of December 31, 2024 and spread of 2.26% as of December 31, 2024.
As of December 31, 2025, 100.0% of the investments by total exposure earned a floating rate indexed to 30-day term SOFR. Weighted average coupon for the financings assumes applicable 30-day term SOFR of 3.74% as of December 31, 2025 and spread of 2.24% as of December 31, 2025.
For the year ended December 31, 2023, net cash used in investing activities totaled $316.7 million. This was a result of the cash used for the purchase and funding of commercial mortgage loans held for investment exceeding the principal repayment of commercial mortgage loans held-for-investment for the year ended December 31, 2023.
Investing Activities For the year ended December 31, 2025, net cash used in investing activities totaled $142.8 million. This was a result of cash used for the purchase and funding of commercial mortgage loans held for investment exceeding the principal repayment of commercial mortgage loans held for investment during the period.
As of December 31, 2024, the ratio of our recourse debt to equity was 0.2:1. As of December 31, 2024, we consolidated the assets and liabilities of the 2021-FL1 CLO and LMF 2023-1 collateralized financings.
As of December 31, 2025, the ratio of our recourse debt to equity was 0.2:1. As of December 31, 2025, we consolidated the assets and liabilities of the LMF 2023-1 Financing and LMNT 2025-FL3 CLO collateralized financings.
Income Tax Expense For the year ended December 31, 2024 the Company recognized a provision for income taxes in the amount of $18,808 and for the year ended December 31, 2023, the Company recognized a provision for income taxes in the amount of $5,723.
Income Tax Expense For the year ended December 31, 2025 the Company recognized a provision for income taxes in the amount of $8,193 and for the year ended December 31, 2024, the Company recognized a provision for income taxes in the amount of $18,808.
On December 12, 2024, we announced that our board of directors had declared a cash dividend rate for the fourth quarter of 2024 of $0.08 per share of common stock and a one-time special cash dividend of $0.09 per share of common stock.
On December 12, 2024, we announced that our board of directors had declared a cash dividend rate for the fourth quarter of 2024 of $0.08 per share of common stock and a one-time special cash dividend of $0.09 per share of common stock. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS Not applicable
(2) Weighted average coupon assumes applicable 30-day term SOFR of 4.51% and 5.33% as of December 31, 2024 and December 31, 2023, respectively, inclusive of weighted average interest rate floor of 0.63% and 0.38%, respectively.
(2) Weighted average coupon assumes applicable 30-day term SOFR of 3.85% and 4.51% as of December 31, 2025 and December 31, 2024, respectively, inclusive of weighted average interest rate floor of 2.18% and 0.63%, respectively.
The Company estimates the allowance for credit losses for its portfolio on a collective basis, including unfunded loan commitments, for loans that share similar risk characteristics. The calculation is applied at the loan level.
The allowance for credit losses attributed to unfunded loan commitments is included in "Other liabilities" on the consolidated balance sheets. The Company estimates the allowance for credit losses for its portfolio on a collective basis, including unfunded loan commitments, for loans that share similar risk characteristics. The calculation is applied at the loan level.
We finance our commercial mortgage loans primarily with non-recourse secured borrowings, the maturities of which are matched to the maturities of the loans, and which are not subject to margin calls or additional collateralization requirements.
We finance our commercial mortgage loans with non-recourse secured borrowings, the maturities of which are matched to the maturities of the loans, and which are not subject to margin calls or additional collateralization requirements, as well as, a master repurchase agreement and a term financing agreement.
For the year ended December 31, 2023, we experienced loan payoffs on 12 loans with net principal balance of $152.6 million which generated exit fees of $1.9 million included in interest income and 7 loans with net principal balance of $112.7 million which waived exit fees of $1.0 million resulting in a reduction to expense reimbursement of $0.5 million included in operating expenses reimbursable to Manager.
For the year ended December 31, 2025, we experienced loan payoffs on 31 loans with net principal balances of $185.4 million which generated exit fees of $1.7 million included in interest income and 6 loans with net principal balances of $81.2 million which waived exit fees of $0.8 million resulting in a reduction to expense reimbursement of $0.4 million included in operating expenses reimbursable to Manager.
All of our current financing arrangements are not subject to credit or capital markets mark-to-market provisions.
All of our current financing arrangements are not subject to credit or capital markets mark-to-market provisions with the exception of our master repurchase agreement.
Secured Term Loan In January 2020, we entered into a $40.25 million secured term loan with an initial maturity of February 2025. In April 2021, we entered into an amendment, providing, among other things, an incremental secured term loan in the amount of $7.5 million and a one-year maturity extension to February 2026.
In April 2021, we entered into an amendment, providing, among other things, an incremental secured term loan in the amount of $7.5 million and a one-year maturity extension to February 2026. In August 2021, the Company drew down the $7.5 million incremental secured term loan.
Operating Activities 47 For the years ended December 31, 2024 and December 31, 2023, net cash provided by operating activities totaled $27.1 million and $24.7 million, respectively.
Operating Activities For the years ended December 31, 2025 and December 31, 2024, net cash provided by operating activities totaled $10.0 million and $27.1 million, respectively.
For the year ended December 31, 2024, we recorded earnings per share of $0.34, declared aggregate common dividends of $0.40 per share, and reported $0.44 per share of Distributable Earnings.
For the year ended December 31, 2025, we recorded loss per share of $0.14, declared aggregate common dividends of $0.22 per share, and reported $0.14 per share of Distributable Earnings.
Due to shorter maturities of transitional floating-rate commercial mortgage loans, our secured borrowings include a reinvestment period during which principal repayments and prepayments on our commercial mortgage loans may be reinvested in similar assets, subject to meeting certain eligibility criteria.
Due to shorter maturities of transitional floating-rate commercial mortgage loans, our secured borrowings include a reinvestment period during which principal repayments and prepayments on our commercial mortgage loans may be reinvested in similar assets, subject to meeting certain eligibility criteria. The reinvestment period for LMF 2023-1 Financing expired in July 2025 and LMNT 2025-FL3 remains in place through May 2028.
As of December 31, 2024, 99.0% of the loans in our commercial mortgage loan portfolio are structured with SOFR floors with a weighted average SOFR floor of 0.63%, none of which currently has a floor greater than the current spot interest rate.
As of December 31, 2025, 100.0% of the loans in our commercial mortgage loan portfolio are structured with SOFR floors with a weighted average SOFR floor of 2.18%, of which 18.8% had an interest rate floor greater than the current spot interest rate.
Net Interest Income For the years ended December 31, 2024 and December 31, 2023, our net interest income was $41,356,609 and $34,392,996, respectively.
Net Interest Income For the years ended December 31, 2025 and December 31, 2024, our net interest income was $25,113,203 and $41,356,609, respectively.
The increase was primarily due to (i) a $44.1 million increase in weighted-average principal balance of our loan portfolio; (ii) a 16bps increase in weighted-average floating rate of our loan portfolio; (iii) a 7bps increase in weighted-average spread on the loan portfolio; (iv) an increase in exit/extension fees of $1.1 million for our loan portfolio for the year-ended December 31, 2024, compared to the corresponding period in 2023 and (v) accretion of purchase discount of $2.5 million for the year-ended December 31, 2024, compared to the corresponding period in 2023, and (vi) a one-time income of $2.8 million related to the resolution of the defaulted Columbus, Ohio loan.
The decrease was primarily due to (i) a $284.9 million decrease in weighted-average principal balance of our loan portfolio resulting in a decrease to interest income of $35.2 million; (ii) an increase in interest income adjustment due to non-accrual loans of $3.3 million; (iii) a 97bps decrease in weighted-average floating rate of our loan portfolio; (iv) a 7bps decrease in weighted-average spread on the loan portfolio; (v) a decrease in exit fees of $1.0 million for our loan portfolio for the year-ended December 31, 2025, compared to the corresponding period in 2024; (vi) a decrease in accretion of purchase discount of $1.6 million for the year-ended December 31, 2025, compared to the corresponding period in 2024; (vii) a 20bps increase in weighted-average spread of our secured borrowing liabilities and (viii) one-time income of $2.5 million related to the resolution of the defaulted Columbus, Ohio loan for the year ended December 31, 2025.
As disclosed above, we experienced an increase of $1.1 million in exit and extension fees for the year ended December 31, 2024.
As disclosed above, we experienced a decrease of $1.0 million in exit fees for the year ended December 31, 2025.
The carrying value for LMF 2023-1 Financing is net of debt issuance costs of $2,308,507 as of December 31, 2024. (2) Weighted average coupon assumes applicable 30-day term SOFR of 4.51% as of December 31, 2024, inclusive of weighted average interest rate floors of 0.63%.
The carrying value for LMF 2023-1 Financing is net of debt issuance costs of $1,292,096 and the carrying value of LMNT 2025-FL3 CLO is net of debt issuance costs of $4,912,883 as of December 31, 2025. (3) Weighted average coupon assumes applicable 30-day term SOFR of 3.86% as of December 31, 2025,inclusive of weighted average interest rate floors of 2.55%.
For the year ended December 31, 2023, we incurred management and incentive fees of $4,335,904 representing amounts payable to our Manager under our management agreement. We also incurred operating expenses of $7,917,970, of which $1,897,699 was payable to our Manager and $6,020,271 was payable to third parties.
Expenses We incurred management and incentive fees of $4,595,458 for the year ended December 31, 2025, representing amounts payable to our Manager under our Management Agreement. We also incurred operating expenses of $7,926,374, of which $1,723,142 was payable to our Manager and $6,203,232 was payable to third parties.
(5) As of December 31, 2024, $1,049,886,009 of the outstanding senior secured loans were held in VIEs and $(1,082,931) of the outstanding senior secured loans were held outside of VIEs. As of December 31, 2023, $1,375,277,312 of the outstanding senior secured loans were held in VIEs and $8,603,886 of the outstanding senior secured loans were held outside of VIEs.
(5) As of December 31, 2025, $856,064,487 of the outstanding senior secured loans were held in VIEs and $257,983,507 of the outstanding senior secured loans were held outside of VIEs. As of December 31, 2024, $1,049,886,009 of the outstanding senior secured loans were held in VIEs and $(1,082,931) of the outstanding senior secured loans were held outside of VIEs.
For the three months ended December 31, 2024, we recorded earnings per share of $0.07, declared a quarterly common dividend of $0.08 per share, declared a one-time special dividend of $0.09 per share, and reported $0.10 per share of Distributable Earnings. In addition, our book value per share was $3.40 per share.
For the three months ended December 31, 2025, we recorded loss per share of $0.16, declared a quarterly common dividend of $0.04 per share, and reported $0.01 per share of Distributable Loss. In addition, our book value per share was $3.03 per share.
The change in underlying risk rating consisted of loans that paid off with a risk rating of "3" of $277.5 million, a risk rating of "4" of $67.1 million and a risk rating of "5" of $45.7 million, offset by purchases of commercial mortgage loans with a risk rating of "2" of $27.1 million and a risk rating of "3" of $31.3 million during the year ended December 31, 2024.
The change in underlying risk rating consisted of loans that paid off with a risk rating of "2" of $27.1 million, a risk rating of "3" of $208.2 million, a risk rating of "4" of $23.2 million and a risk rating of "5" of $8.1 million, offset by funding of loans with a risk rating of "2" of $96.1 million, a risk rating of "3" of $306.8 million and a risk rating of "5" of $0.9 million during the year ended December 31, 2025.
Federal Reserve declined to make any additional changes to interest rates, holding the federal funds target range at 4.25% to 4.50%. Therefore, interest rates remain elevated, and the timing, direction and extent of any future interest rate changes remain uncertain.
Federal Reserve lowered the federal funds rate by 0.25% to a current target range of 3.50% - 3.75%. Interest rates to remain elevated, and the timing, direction and extent of any future interest rate changes remain uncertain.
Thereafter, the outstanding debt balance will be reduced as loans are repaid. The following table presents certain loan and borrowing characteristics of 2021-FL1 CLO and LMF 2023-1 Financing as of December 31, 2024: As of December 31, 2024 Collateralized Loan Obligations Count Principal Value Carrying Value (1) Wtd. Avg.
The following table presents certain loan and borrowing characteristics of LMF 2023-1 Financing and LMNT 2025-FL3 CLO as of December 31, 2025: As of December 31, 2025 Collateralized Loan Obligations Count Principal Value (1) Carrying Value (2) Wtd. Avg.
As of December 31, 2024, the carrying value of these non-recourse liabilities aggregated to $828.4 million. As of December 31, 2024, our total debt to equity ratio was 3.7:1 on a GAAP basis. As of December 31, 2024, LCMT had $6.7 million of unfunded commitments related to loans held in LFT 2021-FL1, Ltd.
As of December 31, 2025, the carrying value of these non-recourse liabilities aggregated to $748.4 million. As of December 31, 2025, our total debt to equity ratio was 3.4:1 on a GAAP basis.
The year-over-year increase in tax expense primarily reflects the change in gross deferred revenue at FOAC due to the change in unrealized loss on mortgage servicing rights. 46 Liquidity and Capital Resources Liquidity is a measurement of our ability to meet potential cash requirements, including ongoing commitments to pay dividends, fund investments, comply with margin requirements, if any, and repay borrowings and other general business needs.
Liquidity and Capital Resources Liquidity is a measurement of our ability to meet potential cash requirements, including ongoing commitments to pay dividends, fund investments, comply with margin requirements, if any, and repay borrowings and other general business needs.
Of the total CLO notes issued $833.8 million were investment grade notes issued to third-party investors and $70.0 million were below investment-grade notes retained by us.
Of the total CLO notes issued, $585.0 million were investment grade notes issued to third party investors and $35.7 million were below investment-grade and were retained by us. In addition, we retained a $43.1 million income note.
The year-over-year increase in expenses primarily reflects earned incentive fees of $2.2 million as well as an increase in accounting, administration, audit, management, professional and secured financing fees which more than offset a decrease in legal, insurance, discontinued deal costs and reimbursable fees. Other Loss For the year ended December 31, 2024, we incurred other loss of $5,180,578.
The year-over-year decrease in expenses primarily reflects a decrease to incentive, accounting, administration, audit, professional, investor relations and CLO fees, which more than offset an increase in legal fees and discontinued deal costs. Other Income and Expense 47 For the year ended December 31, 2025, we incurred other loss of $15,328,487.
Cash Flows The following table sets forth changes in cash, cash equivalents and restricted cash for the years ended December 31, 2024 and December 31, 2023: For the years ended December 31, 2024 2023 Cash Flows From Operating Activities 27,129,666 24,738,341 Cash Flows From Investing Activities 334,089,347 (316,720,169) Cash Flows From Financing Activities (341,172,107) 296,132,655 Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash $ 20,046,906 $ 4,150,827 During the year ended December 31, 2024, cash, cash equivalents and restricted cash increased by $20.0 million and for the year ended December 31, 2023, cash, cash equivalents and restricted cash increased by $4.2 million.
Cash Flows The following table sets forth changes in cash, cash equivalents and restricted cash for the years ended December 31, 2025 and December 31, 2024: For the years ended December 31, 2025 2024 Cash Flows Provided By Operating Activities 10,098,533 27,129,666 Cash Flows (Used In)/Provided By Investing Activities (142,919,473) 334,089,347 Cash Flows Provided By (Used In) Financing Activities 87,874,924 (341,172,107) Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash $ (44,946,016) $ 20,046,906 During the year ended December 31, 2025, cash, cash equivalents and restricted cash decreased by $44.9 million and for the year ended December 31, 2024, cash, cash equivalents and restricted cash increased by $20.0 million.
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. 36 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.
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.
Our secured term loan matures in February 2026, our collateralized loan financing is term-matched and matures in 2039 or later and our collateralized financing is match-termed and matures in 2032 or later.
Our secured term loan matured in February 2026, and was amended at such time to extend the maturity to February 2030. Our collateralized financing is match-termed and matures in 2032 or later and our collateralized loan financing is term-matched and matures in 2043 or later.

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