Summary of Adamas Trust Q2 2026 Earnings Call

1Key Financial Results and Metrics

GAAP Earnings: $43.4 million or $0.48 per share.

Earnings Available for Distribution (EAD): $0.30 per share, marking a 36% year-over-year increase and exceeding the quarterly dividend of $0.27 per share.

Book Value: GAAP book value increased by 1.8% to $10.16 per share; adjusted book value rose 2.3% to $11.05 per share.

Net Interest Income: Increased to $50.2 million; adjusted net interest income at $50.3 million.

Economic Return: 4.5% on GAAP book value and 4.8% on adjusted book value.

Investment Portfolio Growth: Expanded by over $800 million to $11.7 billion, a 36% increase year-over-year.

2Strategic Updates and Business Highlights

The company has diversified into three main business segments: Agency RMBS, residential credit (business purpose lending), and a vertically integrated origination platform (Constructive).

Adamas achieved its ninth increase in EAD over the last ten quarters, demonstrating consistent earnings momentum.

The company capitalized on market volatility to grow its investment portfolio, purchasing $1.5 billion in single-family assets.

Constructive, the business purpose lending platform, originated $428 million in loans, with 71% of these loans purchased by Adamas.

The company is focused on maintaining a disciplined capital allocation strategy and improving operational efficiencies.

3Forward Guidance and Outlook

Management expressed optimism about future earnings growth and book value stability, emphasizing the strength of their diversified portfolio.

The company aims to continue expanding recurring earnings and closing the valuation gap between share price and book value.

Constructive is expected to improve funding costs and reduce operating expenses, targeting a 15% annual return on equity (ROE).

4Challenges and Points of Concern

The company noted a 2.3% decline in adjusted book value quarter-to-date as of July 28, 2026.

Market volatility and rising interest rates have pressured asset valuations, particularly impacting Agency RMBS.

Competitive pressures in the business purpose lending market were acknowledged, though institutional demand remains strong.

There is a cautious approach to increasing leverage, with current levels at 5.5x, which may rise as non-core assets are resolved.

5Notable Q&A Insights

Management indicated that the pipeline for Constructive remains strong, with higher desired loan coupons expected.

Future capital deployment will prioritize areas with the best risk-adjusted returns, particularly in residential credit.

The company is not earmarking specific proceeds for particular strategies but will deploy capital based on market conditions.

Securitization costs are influenced by rising interest rates, but Adamas has successfully priced deals tighter than the broader market.

The multifamily portfolio is performing well, with consistent payoff rates and no delinquent loans, allowing for capital redeployment into higher-yielding strategies. Overall, Adamas Trust demonstrated strong financial performance in Q2 2026, with a focus on strategic growth and operational efficiency, while navigating challenges presented by market volatility and competitive pressures.