Lument Finance Trust Inc. reported a second-quarter loss on Tuesday, citing a decline in net interest income as the primary driver of its financial performance.
The New York-based mortgage real estate investment trust posted a net loss of $15.2 million, or 28 cents per share, for the three months ended June 30. This compared with net income of $1.8 million, or 3 cents per share, in the same period a year earlier. Revenue fell 19% to $22.1 million.
The company attributed the loss to lower net interest income, which dropped 24% year-over-year to $16.3 million. Lument Finance Trust manages a portfolio of mortgage-backed securities and residential loans, primarily focused on government-sponsored enterprise mortgage-backed securities.
In addition to the quarterly results, Lument Finance Trust announced plans to implement a reverse stock split in a bid to improve its share price. The company proposed a 1-for-15 reverse stock split, subject to shareholder approval. The reverse split is intended to increase the stock’s price and enhance its marketability, though it does not change the company’s underlying financial position.
Lument Finance Trust’s shares have traded below $1 for much of the past year, a level often associated with delisting risks from major exchanges. The reverse split aims to address this concern by elevating the share price above the threshold.
The company’s board of directors declared the reverse stock split, which will require approval at a future shareholders’ meeting. No date for the meeting has been set. Lument Finance Trust did not provide updated financial guidance in its earnings release.
Shares of Lument Finance Trust were down 3% at $0.52 in after-hours trading on Tuesday following the release of the results.
