Key Highlights

  • GAAP loss of USD 1.89 per share compared with a USD 0.21 consensus estimate and USD 0.36 profit last year.
  • Earnings available for distribution reached USD 0.30 per share, up 25% from a year earlier, and covered the dividend.
  • Book value per share dropped 21.9% from June to USD 7.93, and adjusted book value fell 19.6% to USD 8.88.
  • The company acquired USD 1.6 billion of single-family residential investments and raised its quarterly dividend 11.1% to USD 0.30.

Adamas Trust, Inc. (NASDAQ:ADAM) reported a third-quarter 2026 GAAP loss of USD 1.89 per diluted common share, compared with earnings of USD 0.36 a year earlier and a consensus estimate of USD 0.21 per share. The net loss attributable to common stockholders was USD 171.0 million, versus income of USD 32.7 million in the prior-year quarter. Rental income was USD 11.3 million.

CEO Jason Serrano described a difficult market in which higher interest rates and volatility lowered valuations on Agency mortgage securities. Total net interest income rose to USD 48.8 million from USD 36.6 million a year ago, though it slipped 2.8% from the second quarter.

Valuation Swings Behind the Loss

Other income swung to a loss of USD 168.2 million from a gain of USD 48.6 million. Unrealized losses of USD 471.9 million were partly offset by USD 299.0 million of gains on derivative instruments, and mortgage banking activities added USD 10.9 million. General, administrative and operating expenses were USD 40.0 million, down from USD 41.8 million.

The non-GAAP earnings available for distribution measure, which strips out unrealized and non-recurring items, was USD 0.30 per common share, and the company said it fully covered the dividend. Book value per share ended at USD 7.93 and the quarterly economic return was negative 19.00%. Stockholders' equity attributable to the company stood at USD 1.28 billion, and the Company Economic Recourse Leverage Ratio was 4.8 times.

Portfolio Activity and Financing

The company bought USD 1.6 billion of new single-family residential assets, including USD 1.2 billion of Agency securities and USD 390.1 million of business purpose loans. Its Constructive unit originated USD 405.8 million of such loans, and the BPL-Rental portfolio reached USD 2.6 billion in unpaid principal balance with an average FICO score of 751 and an average LTV of 70%.

Financing included a USD 340.6 million BPL-Rental securitization at a 5.73% effective cost, a USD 115.0 million re-securitization of non-Agency RMBS, and USD 90.0 million of 9.600% senior notes due 2031. Warehouse capacity rose by USD 150.0 million to USD 3.8 billion. Management added short TBA positions during September to manage spread and convexity risk, then cut them by 76% after quarter end.

Measures to Follow

Four items stand out for the next report. Adjusted book value of USD 8.88 per share is the base for measuring any recovery in Agency valuations. The remaining 24% of TBA short positions is described as managed to market conditions. The USD 0.30 dividend, a 15.4% annualized yield on the September 30 price, is set against earnings available for distribution of USD 0.30. A post-quarter USD 313.1 million BPL-Rental securitization priced at a 6.40% effective cost, versus 5.73% in the third quarter.