ADAMI — Adamas Trust, Inc.

Summary of Adamas Trust Q3 2025 Earnings Call

1. Key Financial Results and Metrics

• Earnings Distribution Amount (EDA): Increased to $0.24 per share, up from $0.22 in Q2, marking the sixth consecutive quarterly increase.
• Dividend: Raised to $0.23 per share, reflecting strong earnings growth.
• Investment Portfolio: Grew to $10.4 billion from $8.6 billion in the previous quarter, a 20% increase.
• Adjusted Net Interest Income per Share: Rose 7% quarter-over-quarter and 47% year-over-year to $0.47.
• Net Interest Spread: Stable at 150 basis points.
• Net Unrealized Gains: Recorded $54.9 million, primarily from improved valuations in Agency RMBS.
• GAAP and Adjusted Book Value per Share: Ended at $9.20 and $10.38, respectively, representing increases of 1% and 1.2% compared to Q2.

2. Strategic Updates and Business Highlights

• Rebranding: Transitioned to Adamas Trust, symbolizing a broader strategic vision beyond geographic affiliation.
• Capital Rotation Strategy: Shifted focus from multifamily exposure to Agency RMBS, which now represents 57% of total capital, nearly tripling from a year ago.
• Acquisition of Constructive: Completed the acquisition of the remaining 50% interest in Constructive, enhancing control over origination and product development.
• BPL Rental Loans: Grew to $1.16 billion, with a 24% quarter-over-quarter increase, indicating strong performance in this segment.
• Securitization Activity: Successfully priced two securitizations totaling $645 million, benefiting from favorable market conditions.

3. Forward Guidance and Outlook

• Earnings Growth: Anticipated continued improvement in recurring earnings due to a full quarter of interest income from recent investments.
• Capital Allocation: Plans to maintain a balanced approach between Agency RMBS and credit investments, with a more measured pace of agency allocation moving forward.
• Integration of Constructive: Expected to become a significant driver of earnings growth as efficiencies are realized.

4. Bad News, Challenges, or Points of Concern

• Higher Corporate Debt Interest Expense: Resulting from the issuance of senior unsecured notes in July.
• Increased G&A Expenses: Rose to $23.3 million due to the consolidation of Constructive and higher incentive compensation.
• Competitive Pressures: The BPL bridge market remains highly competitive, impacting purchase volumes and pass-through rates.
• Regulatory Risks: Uncertainty around GSE reforms and their potential impact on the mortgage sector and capital allocation strategies.

5. Notable Q&A Insights

• GSE Developments: Management remains cautious about potential GSE reforms and their implications, emphasizing a balanced approach to opportunities in the non-QM space.
• Leverage Strategy: Current leverage levels are seen as appropriate, with agency leverage targeted around 8x and credit leverage below 1x.
• Share Repurchase Strategy: Considered an incremental investment strategy, but management is cautious about the long-term impact on equity shrinkage versus asset opportunities.
• Payoff Rates in Mezzanine Portfolio: Expected to remain elevated, with potential for slightly higher paydowns in the near term due to portfolio seasoning.

Overall, Adamas Trust reported strong financial results and strategic advancements in Q3 2025, while also acknowledging competitive pressures and regulatory uncertainties that could impact future performance.