ADAMM — Adamas Trust, Inc.

Summary of Adamas Trust Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• GAAP Earnings Per Share (EPS): $0.41, a 26% increase from the previous quarter.
• Earnings Available for Distribution (EAD): $0.29 per share, up 26% quarter-over-quarter and 45% year-over-year.
• Dividend: $0.23, resulting in a 6.35% economic return on GAAP book value.
• GAAP Book Value: Increased by 4% to $9.98; adjusted book value rose 1.6% to $10.80.
• Net Interest Income: Increased to $48.2 million from $46.3 million in Q4 2025.
• G&A Expenses: Decreased slightly to $24.5 million from $25.1 million in the previous quarter.

2. Strategic Updates and Business Highlights

• The company reported strong performance across its investment portfolio, with a focus on Agency RMBS and BPL rental loans.
• Investment Activity: Over $1 billion deployed in acquisitions, with $510 million in agency strategy and $502 million in residential credit.
• Constructive Integration: Transitioned from a cost center to a profit contributor, generating $2.5 million in profit for the quarter.
• Securitization Strategy: Plans to issue 5 to 6 BPL rental securitizations this year, supported by strong underwriting quality.
• Balance Sheet Strength: Issued $90 million in senior unsecured notes, retiring $100 million in near-term debt, enhancing liquidity and flexibility.

3. Forward Guidance and Outlook

• Management maintains a positive outlook for 2026, focusing on scaling the constructive platform and increasing recurring income.
• Anticipates continued growth in EAD and book value through disciplined investment and capital allocation.
• The company is optimistic about closing the valuation gap between market price and intrinsic value through consistent execution.

4. Bad News, Challenges, or Points of Concern

• The stock trades at a significant discount to intrinsic value, with a 32% discount to adjusted book value.
• Market volatility, particularly due to geopolitical tensions, may impact future performance and capital deployment strategies.
• The agency market experienced significant volatility, with spreads widening sharply, affecting investment strategies.
• The multifamily portfolio is experiencing higher-than-average redemption activity, which could impact future cash flows.

5. Notable Q&A Insights

• Dividend Coverage: Management is focused on sustainably growing EAD before making decisions on increasing dividends.
• Book Value Drivers: Gains from derivative instruments and a successful property sale contributed to book value growth.
• Constructive's Performance: The origination platform is expected to stabilize and grow, with a focus on aligning credit quality with investment strategies.
• Market Conditions: The company is navigating market volatility and adjusting its strategies accordingly, particularly in securitization pricing and capital allocation.

Overall, Adamas Trust's Q1 2026 results reflect strong financial performance and strategic execution, despite facing market volatility and valuation challenges. The company is positioned for growth while maintaining a focus on disciplined capital management.