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 1.8% to $10.16 per share; adjusted book value increased 2.3% to $11.05 per share.

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

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

2Strategic Updates and Business Highlights

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

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

Securitization Activity: Completed two BPL rental securitizations totaling approximately $521 million, with a weighted average effective cost of 5.48%.

Market Positioning: The company is well-positioned to capitalize on market opportunities, with a strong pipeline of desirable loans and institutional demand for business purpose loans.

3Forward Guidance and Outlook

Earnings Growth: Management is optimistic about continuing earnings growth and book value stability in the second half of 2026.

Capital Deployment: Plans to utilize incremental capital for higher-return opportunities in residential credit while maintaining a stable allocation to Agency RMBS.

Operational Improvements: Expected cost savings from operational efficiencies in Constructive are anticipated to enhance profitability in the latter half of 2026.

4Bad News, Challenges, or Points of Concern

Market Volatility: The company faced a challenging market backdrop, including a bear flattening of the treasury curve and rising interest rates, which pressured asset valuations.

Securitization Costs: The effective cost of BPL securitizations has increased due to higher interest rates, which could impact profitability.

Book Value Decline: Adjusted book value was estimated to have decreased by approximately 2.3% quarter-to-date as of July 28, 2026.

5Notable Q&A Insights

Constructive Trends: The pipeline for Constructive remains strong, with higher coupons expected in future loans. Institutional demand has been robust despite market volatility.

Capital Rotation Strategy: Management indicated that capital from resolved non-core strategies would be rotated into higher-return residential credit opportunities rather than increasing leverage on existing core assets.

Leverage Management: Current leverage is at 5.5x, with potential for slight increases as non-core assets are resolved, but this is not aimed at seeking higher returns for its own sake. Overall, Adamas Trust reported solid financial performance in Q2 2026, demonstrating resilience in a volatile market while strategically positioning itself for future growth. However, rising interest rates and market pressures present ongoing challenges that the company will need to navigate.