Adamas Trust's Adjusted Book Value Falls on Agency Valuations

The Tip Desk · November 10, 2026 · 3 min read

GAAP basic loss was $1.89 a share as book value per share fell 21.9% to $7.93, while earnings available for distribution held at $0.30.

Adamas Trust, Inc. (ADAM) reported a GAAP basic loss of $1.89 a share for the three months ended September 30, 2026, reversing $0.48 of earnings in the prior quarter as book value per share fell 21.9% to $7.93 from $10.16.

The internally managed REIT said the decline in adjusted book value was primarily driven by lower valuations for Agency mortgage securities amid a rise in interest rates and volatility. Adjusted book value per share fell 19.6% to $8.88 from $11.05. Quarterly economic return flipped to (19.00)% from 4.51%, and economic return on adjusted book value flipped to (16.92)% from 4.81%. Cumulative stockholder return was (14.2)% for the quarter, versus 31.2% in the second quarter.

Chief Executive Officer Jason Serrano said the company proactively managed spread and convexity risks in the Agency securities portfolio through short TBA positions, lowering net Agency exposure as market volatility intensified. Since quarter-end, the company said it had significantly reduced those TBA short positions, reflecting its view of receding Agency spread tail risks. TBA shorts added in the latter half of the third quarter were reduced 76%, with the remaining position expected to be managed based on market conditions.

Earnings available for distribution per common share held at $0.30, up 25% year-over-year, after a 3.4% sequential rise in the prior quarter. The company declared a $0.30 common dividend, an 11.1% increase from the $0.27 declared in the second quarter, for a 15.4% annualized yield. Serrano said earnings available for distribution fully covered the recently increased dividend.

Total net interest income declined 2.8% to $48.8 million from $50.2 million, reversing a 3.7% sequential increase in the prior quarter. Total adjusted net interest income rose 2.4% to $51.5 million from $50.3 million. Adjusted net interest income by category was $39.3 million for Agency, $21.3 million for Single-Family Credit, $1.2 million for Multi-Family Credit and a $10.3 million loss for Corporate/Other. Overall net interest spread was 1.40%.

The Investment Portfolio segment posted $58.5 million of total net interest income and an $183.5 million other loss. Constructive contributed $0.5 million of net interest income and $12.3 million of other income. Consolidated loss from operations before income taxes was $162.2 million.

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. The BPL-Rental portfolio grew to $2.6 billion in unpaid principal balance from $2.3 billion, with average FICO of 751, average LTV of 70% and average DSCR of 1.35x. Constructive originated $405.8 million of business purpose loans, taking cumulative originations since 2017 to $7.4 billion.

Financing included a $340.6 million BPL-Rental securitization at a 5.73% effective cost and 136 bps net financing spread, a $115.0 million non-Agency RMBS re-securitization at 6.88% cost and 250 bps spread, and $90.0 million of 9.600% senior notes due 2031. Warehouse capacity increased $150.0 million to $3.8 billion. Company Economic Recourse Leverage Ratio was 4.8x and Portfolio Economic Recourse Leverage Ratio 4.4x, versus 5.5x and 5.2x in the prior quarter.

After quarter-end, the company issued a $313.1 million BPL-Rental securitization at a 6.40% effective cost and 159 bps net financing spread. Serrano said the repricing of mortgage assets has created some of the most attractive investment opportunities the company has seen in several quarters, and that it entered the fourth quarter with financial flexibility and continued focus on disciplined portfolio management.