Adamas Raises Dividend as Earnings Turn Positive
Net interest income rose 37.8% from a year earlier to $50.2 million.
Adamas Trust (ADAM), a residential mortgage investor, reported second-quarter earnings of $0.48 a share, reversing a year-earlier loss of $0.04 a share. Net income available to common stockholders rose to $43.4 million from $36.9 million in the first quarter and a $3.5 million loss a year earlier.
The quarter extended a recovery in book value while a wider interest spread helped offset declining asset yields. Book value rose for a fourth consecutive quarter, increasing 1.8% sequentially and 11.5% from a year earlier to $10.16 a share.
Net interest income increased 3.7% from the first quarter and 37.8% from a year earlier to $50.2 million. Interest income rose 1.4% sequentially to $174.4 million, while interest expense increased a slower 0.4% to $124.2 million. Compared with a year earlier, interest income climbed 23.8% and interest expense rose 18.9%.
The net interest spread widened four basis points from the first quarter to 1.48%, though it remained below the year-earlier 1.50%. The yield on average interest-earning assets declined to 6.03% from 6.07% sequentially and 6.48% a year earlier, continuing a slide from the second half of 2024.
Other income fell 44.2% sequentially to $45.2 million as $48.8 million of derivative gains were partly offset by $13.0 million of realized losses and $8.5 million of unrealized losses. Income from operations before taxes consequently declined to $53.1 million from $86.7 million in the first quarter, while remaining above the year-earlier $4.3 million. Operating expenses held near $40.0 million sequentially but more than doubled from a year earlier, including $4.8 million of loan-origination costs.
The investment-portfolio segment produced $87.0 million of net income available to common stockholders. The newly reported Constructive segment recorded a $0.7 million loss as $16.8 million of expenses exceeded $15.6 million of other income. Adamas acquired about $1.5 billion of single-family residential investments during the quarter, and Constructive originated $427.6 million of business-purpose loans.
Those purchases expanded the Agency portfolio to $7.2 billion and the BPL-Rental portfolio to $2.3 billion of unpaid principal balance. Residential loans rose 9.7% from year-end to $4.78 billion, helping lift total assets to $12.96 billion, while repurchase agreements and warehouse borrowings increased 4.6% to $7.07 billion.
Adamas raised its quarterly common dividend 17.4% to $0.27 a share, 35% above the year-earlier payout. Earnings available for distribution increased to $0.30 a share, leaving the measure three cents above the new dividend.