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.

Quarterly Dividend: Increased to $0.27 per share, well-covered by EAD.

Book Value: GAAP book value rose to $10.16 per share (up 1.8%), and adjusted book value increased to $11.05 per share (up 2.3%).

Net Interest Income: Increased to $50.2 million; net interest spread improved to 148 basis points.

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

2Strategic Updates and Business Highlights

Diversification Strategy: Adamas has transformed into a diversified mortgage REIT with three main income sources: Agency RMBS, residential credit (business purpose lending), and a vertically integrated origination platform (Constructive).

Constructive Performance: Originated $428 million in business purpose loans, with a focus on maintaining quality and operational efficiencies.

Market Position: The company is recognized for its strong performance, with its stock significantly outperforming the broader mortgage REIT index by approximately 46% over the past year.

Securitization Activity: Completed two BPL rental securitizations totaling approximately $521 million, pricing tighter than the broader market.

3Forward Guidance and Outlook

Earnings Growth: Management is optimistic about continuing to grow recurring earnings and book value through disciplined capital allocation and operational efficiencies.

Market Conditions: While the agency market has seen some volatility, there is confidence in the ability to generate strong risk-adjusted returns, particularly in residential credit.

Cost Savings: Constructive is expected to realize approximately $3 million in annual cost savings, which will positively impact earnings in the latter half of 2026 and into 2027.

4Challenges and Points of Concern

Market Volatility: The company is navigating a volatile market environment, including a bear flattener of the treasury curve, which may impact asset valuations.

Interest Rate Impact: Higher interest rates have pressured asset valuations, particularly for Agency RMBS, leading to some unrealized losses.

Competition: Increased competition in the business purpose lending space is noted, although demand remains strong from institutional investors.

5Notable Q&A Insights

Constructive Trends: The pipeline for Constructive remains strong, with higher coupon loans expected. However, there is no definitive guidance on whether overall volume will increase or decrease.

Capital Deployment: Incremental capital is expected to be directed towards residential credit rather than rotating out of agency positions, maintaining a stable allocation to agencies.

Leverage Strategy: Current leverage is at 5.5x, with potential for slight increases as non-core assets are resolved and redeployed into higher-yielding strategies. Overall, Adamas Trust reported a solid quarter with continued growth in earnings and book value, while also navigating challenges posed by market volatility and competition. The company remains focused on disciplined execution and strategic growth initiatives.