ADAMZ — Adamas Trust, Inc. 7.000% Series G Cumulative Redeemable Preferred Stock

Summary of ADAMZ 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 and a 3.76% return on adjusted 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, with a net interest spread of 145 basis points.
• Total Investment Portfolio: Reached $10.9 billion, with significant capital deployment across residential investment strategies.

2. Strategic Updates and Business Highlights

• Investment Strategy: Focused on three core pillars: Agency RMBS (56% of equity), single-family credit through BPL rental loans, and a scaled origination platform.
• Capital Deployment: Over $1 billion in acquisitions during Q1, 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 Activity: Plans to issue 5-6 BPL rental securitizations this year, supported by strong underwriting quality.

3. Forward Guidance and Outlook

• Positive Outlook: Management remains optimistic about the year ahead, focusing on scaling EAD and growing book value through disciplined investment.
• Market Conditions: Anticipates continued demand for mortgage credit and a more accommodative capital framework, supporting ongoing capital allocation strategies.
• Dividend Growth: Discussions regarding potential increases in distributions are ongoing, with a focus on sustainable earnings growth.

4. Bad News, Challenges, or Points of Concern

• Market Volatility: The geopolitical situation, particularly the conflict in Iran, has introduced volatility and uncertainty in the market.
• Stock Valuation: Shares are trading at a significant discount (32% to adjusted book value), indicating a disconnect between market price and intrinsic value.
• Securitization Spreads: The pricing of BPL rental securitizations widened in April compared to January, reflecting broader market conditions.

5. Notable Q&A Insights

• Dividend Coverage: Management emphasized a focus on sustainably growing EAD while preserving book value, indicating that dividend increases will be considered carefully.
• Book Value Drivers: Gains in book value were attributed to strong derivative performance and a successful property sale, highlighting the importance of both recurring and nonrecurring income.
• Constructive's Performance: The origination platform is expected to stabilize and grow, with a focus on aligning production with Adamas' investment standards.
• Capital Efficiency: Constructive is not fully utilizing available capital, suggesting potential for growth without immediate additional capital needs.

This summary captures the key aspects of Adamas Trust's Q1 2026 earnings call, highlighting both the positive developments and the challenges faced by the company.