ADAMN — Adamas Trust, Inc.

Adamas Trust Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• GAAP Earnings per Share (EPS): $0.41, a 26% increase from the prior quarter.
• Earnings Available for Distribution (EAD): $0.29 per share, up 26% quarter-over-quarter and 45% year-over-year.
• Dividend: $0.23 per share, with EAD exceeding dividends by 26%.
• GAAP Book Value: Increased 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 the previous quarter.
• Economic Return: 6.35% on GAAP book value and 3.76% on adjusted book value.

2. Strategic Updates and Business Highlights:

• The company reported strong performance despite a volatile macro environment influenced by geopolitical tensions, particularly in the Middle East.
• Adamas Trust's investment strategy focuses on three pillars: Agency RMBS (56% of equity capital), single-family credit through BPL rental loans, and a scaled origination platform.
• The company successfully integrated its Constructive platform, which contributed positively to earnings and is expected to enhance profitability moving forward.
• Capital deployment exceeded $1 billion in acquisitions during the quarter, with significant investments in both agency and residential credit strategies.

3. Forward Guidance and Outlook:

• Management maintains a positive outlook for 2026, anticipating continued growth in EAD and book value through disciplined investment and capital allocation.
• The company expects to capitalize on increased demand for mortgage credit and a more favorable capital framework.
• Future discussions with the Board will focus on potential dividend growth, with a commitment to sustainable earnings growth.

4. Bad News, Challenges, or Points of Concern:

• Despite strong results, shares are trading at a significant discount (32% to adjusted book value), indicating a disconnect between market price and intrinsic value.
• The agency market experienced volatility, with spreads widening due to geopolitical events, which could impact future performance.
• The multifamily portfolio is seeing heightened redemption activity, with an annualized payoff rate of 30%, which may affect capital availability for reinvestment.

5. Notable Q&A Insights:

• Management emphasized the importance of aligning dividend growth with sustainable earnings, indicating that discussions on increasing distributions are ongoing.
• The book value increase was attributed to strong earnings performance, derivative gains, and a successful property sale within the mezzanine lending portfolio.
• Constructive's origination strategy is evolving, with a focus on aligning production with Adamas’ investment objectives, while maintaining strong credit quality.
• The company is optimistic about the securitization market's stability, despite fluctuations in spreads, and plans to issue multiple BPL rental securitizations throughout the year.

Overall, Adamas Trust reported strong financial results in Q1 2026, demonstrating resilience amid market volatility. The company is strategically positioned for growth, with a focus on enhancing earnings and addressing the valuation gap in its stock.