Third Quarter 2026
Filed Oct 28, 2026Filed under $ADAMAdamas Trust reported a GAAP basic loss per share of $1.89, while earnings available for distribution per common share was $0.30, up 25% year-over-year.
EAD per common share rose 25% year-over-year and fully covered the $0.30 common dividend, but a $471,875 unrealized loss, net contributed to a GAAP net loss attributable to common stockholders of $ (170,983) and book value per common share declined to $7.93 from $10.16 in the prior quarter.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Interest income, three months ended September 30, 2026GAAP | $181.2M | – | – |
| Interest expense, three months ended September 30, 2026GAAP | $132.4M | – | – |
| Total net interest income, three months ended September 30, 2026GAAP | $48.80M | down 2.8% quarter-over-quarter | – |
| Adjusted net interest income, three months ended September 30, 2026non-GAAP | $51.49M | up 2.4% quarter-over-quarter | – |
| Yield on average interest earning assets, three months ended September 30, 2026non-GAAP | 5.95 % | – | – |
| Average financing cost, three months ended September 30, 2026non-GAAP | (4.55) % | – | – |
| Net interest spread, three months ended September 30, 2026non-GAAP | 1.40 % | – | – |
| Total net loss from real estate, three months ended September 30, 2026GAAP | (2,761) | – | – |
| Total other loss income, three months ended September 30, 2026GAAP | (168,232) | – | – |
| Unrealized losses, net, three months ended September 30, 2026GAAP | (471,875) | – | – |
| Gains on derivative instruments, net, three months ended September 30, 2026GAAP | 298,961 | – | – |
| Mortgage banking activities, net, three months ended September 30, 2026GAAP | 10,856 | – | – |
| Total general, administrative and operating expenses, three months ended September 30, 2026GAAP | 39,956 | – | – |
| Loss from operations before income taxes, three months ended September 30, 2026GAAP | (162,152) | – | – |
| Net loss, three months ended September 30, 2026GAAP | (162,130) | – | – |
| Net loss attributable to Company's common stockholders, three months ended September 30, 2026GAAP | −$171.0M | – | – |
| Basic loss per common share, three months ended September 30, 2026GAAP | $ (1.89) | – | – |
| Diluted loss per common share, three months ended September 30, 2026GAAP | $ (1.89) | – | – |
| Earnings available for distribution attributable to Company's common stockholders, three months ended September 30, 2026non-GAAP | $26.96M | – | – |
| Earnings available for distribution per common share - basic, three months ended September 30, 2026non-GAAP | $ 0.30 | – | up 25% year-over-year |
| GAAP book value per common shareGAAP | $ 7.93 | down 21.9% quarter-over-quarter | – |
| Adjusted book value per common sharenon-GAAP | $ 8.88 | down 19.6% quarter-over-quarter | – |
| Total net interest income, nine months ended September 30, 2026GAAP | 147,417 | – | – |
| Net loss attributable to Company's common stockholders, nine months ended September 30, 2026GAAP | −$90.66M | – | – |
| Basic loss per common share, nine months ended September 30, 2026GAAP | $ (1.01) | – | – |
| Diluted loss per common share, nine months ended September 30, 2026GAAP | $ (1.01) | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Investment Portfolio, total net interest income, three months ended September 30, 2026The filing reported total other loss income of (183,467) and loss from operations before income taxes of $ (142,037) for the segment. | $58.52M | – | – |
| Constructive, total net interest income, three months ended September 30, 2026Mortgage banking activities, net were $ 10,856, while the Constructive segment reported loss from operations before income taxes of $ (1,896). | $ 469 | – | – |
| Investment Portfolio, total net interest income, nine months ended September 30, 2026The segment reported total other loss income of (133,357) and loss from operations before income taxes of $ (10,014). | $174.6M | – | – |
| Constructive, total net interest income, nine months ended September 30, 2026Mortgage banking activities, net were $ 42,394 and the Constructive segment reported loss from operations before income taxes of $ (1,898). | $1.45M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Capital returns
- Declared third quarter common stock dividend of $0.30 per share, representing a 15.4% annualized yield.
- Raised common stock dividend to $0.30, an increase of 11.1% quarter-over-quarter.
- $1.6 billion in cumulative common stock dividends declared since June 2004.
- Raised net proceeds of $4.3 million under the common stock at-the-market program at an average price of $10.18 per share, accretive to book value per share.
What drove it
- Acquired $1.6 billion of new single-family residential investments during the quarter, including $1.2 billion of Agency investments and $390.1 million of business purpose loans.
- BPL-Rental portfolio grew to $2.6 billion in UPB, with average FICO of 751, average LTV of 70% and average DSCR of 1.35x.
- Constructive originated $405.8 million of business purpose loans in the quarter and surpassed $7.4 billion in cumulative originations since inception in 2017.
- Issued $340.6 million BPL-Rental securitization with a 5.73% effective cost and net financing spread of 136 bps.
- Issued $115.0 million re-securitization of non-Agency RMBS with a 6.88% effective cost and net financing spread of 250 bps.
- Issued $90.0 million of 9.600% Senior Notes due 2031 resulting in net proceeds of approximately $86.6 million.
- Increased warehouse capacity to $3.8 billion, up $150.0 million in the quarter.
- TBA short positions were reduced by 76% subsequent to quarter-end.
Concerns
- The Company reported a quarterly economic return of (19.00)% and quarterly economic return on adjusted book value of (16.92)%.
- GAAP book value per common share declined to $7.93 from $10.16 at June 30, 2026, and adjusted book value per common share declined to $8.88 from $11.05.
- Unrealized losses, net were (471,875), partially offset by gains on derivative instruments, net of 298,961.
- Management attributed the decline in adjusted book value primarily to lower valuations for Agency mortgage securities amid rising interest rates and volatility.
- Net interest spread was 1.40 %, compared with 1.48 % in the prior quarter and 1.51 % in the prior-year quarter.
What to watch
- Management's handling of the remaining TBA short position, which it expects to manage based upon market conditions.
- Agency mortgage-security valuations, interest-rate changes and market volatility, which management identified as drivers of adjusted book value.
- Whether the $0.30 EAD per common share continues to cover the $0.30 common dividend.
- The pace and financing economics of BPL-Rental investment, originations and securitizations.
- The effect of the $90.0 million of 9.600% Senior Notes due 2031 and warehouse capacity of $3.8 billion on financing costs and leverage.
Balance sheet and cash flow
- Cash and cash equivalents were $ 262,360 as of September 30, 2026, compared with $ 210,333 as of December 31, 2025.
- Total Assets were $ 13,524,175 as of September 30, 2026, compared with $ 12,638,847 as of December 31, 2025.
- Repurchase agreements and warehouse facilities were $ 7,460,119 as of September 30, 2026, compared with $ 6,753,417 as of December 31, 2025.
- Collateralized debt obligations were 3,791,951 as of September 30, 2026, compared with 3,511,802 as of December 31, 2025.
- Senior unsecured notes were 434,607 as of September 30, 2026, compared with 360,437 as of December 31, 2025.
- Company's stockholders' equity was 1,276,151 as of September 30, 2026, compared with 1,426,922 as of December 31, 2025.
- Company Economic Recourse Leverage Ratio was 4.8x, compared with 5.5x at June 30, 2026 and 5.0x at September 30, 2025.
- Portfolio Economic Recourse Leverage Ratio was 4.4x, compared with 5.2x at June 30, 2026 and 4.7x at September 30, 2025.
Analysis
Adamas Trust produced $ 48,797 of GAAP total net interest income in the third quarter, compared with $ 50,209 in the prior quarter and $ 36,586 in the prior-year quarter. Adjusted net interest income increased to $ 51,493 from $ 50,274 in the prior quarter, while EAD attributable to common stockholders was $ 26,965 and EAD per common share was $ 0.30. The $0.30 EAD per common share fully covered the declared $0.30 common dividend, and management stated that EAD per common share was up 25% year-over-year.
GAAP results were dominated by valuation movements. Unrealized losses, net were (471,875), while gains on derivative instruments, net were 298,961. Those items contributed to total other loss income of (168,232), a loss from operations before income taxes of (162,152), and net loss attributable to common stockholders of $ (170,983), or $ (1.89) per basic and diluted common share. Management attributed the adjusted-book-value decline primarily to lower valuations for Agency mortgage securities in an environment of rising interest rates and volatility.
Book value and portfolio returns weakened sharply during the quarter. GAAP book value per common share fell to $ 7.93 from $ 10.16 at June 30, 2026, and adjusted book value per common share fell to $ 8.88 from $ 11.05. The Company reported quarterly economic return of (19.00)% and economic return on adjusted book value of (16.92)%. Net interest spread was 1.40 %, below 1.48 % in the preceding quarter and 1.51 % in the prior-year quarter.
Portfolio activity and financing remained active. The Company acquired $1.6 billion of new single-family residential investments, including $1.2 billion of Agency investments and $390.1 million of business purpose loans, while Constructive originated $405.8 million of business purpose loans. Adamas issued BPL-Rental and non-Agency RMBS securitizations, issued $90.0 million of 9.600% Senior Notes due 2031, and increased warehouse capacity to $3.8 billion. Company Economic Recourse Leverage Ratio decreased to 4.8x from 5.5x in the prior quarter, reflecting a net short TBA position whose cost basis reduced the ratio.
There was no quantitative forward earnings guidance in the release. Management said it entered the fourth quarter with financial flexibility and cited attractive mortgage-asset investment opportunities following repricing. Near-term attention centers on Agency spread and rate volatility, the remaining TBA short exposure after a 76% reduction subsequent to quarter-end, net interest spread, and whether EAD continues to support the increased common dividend.
Management, verbatim
The third quarter presented a challenging market environment, with the rise in interest rates and volatility resulting in a decline in adjusted book value primarily driven by lower valuations for our Agency mortgage securities.
Jason Serrano, Chief Executive Officer
Our underlying business fundamentals remain strong, supported by solid credit performance, substantial liquidity, and earnings available for distribution that fully covered our recently increased dividend.
Jason Serrano, Chief Executive Officer
Not in the filing
stated, not guessed- Quantitative forward guidance for revenue, gross margin, operating expenses, tax rate, earnings, EAD, book value, dividends, capital allocation or leverage was not provided.
- Prior outlook section was not provided.
- Operating cash flow was not provided.
- Free cash flow was not provided.
- A consolidated total revenue line was not provided.
- Gross margin was not provided.
- GAAP and non-GAAP operating-income metrics were not provided as separately labeled operating income.
- Share repurchases were not provided.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.