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What were the key takeaways from Adamas's earnings call?

- **Strategic Rebranding Success**: EDA up 6 consecutive quarters to $0.24, dividend increased 29% to $0.23, with Agency RMBS portfolio tripling to $6.7B.
- **Constructive Integration**: Full ownership of BPL originator drives $14.1M in mortgage banking income, with 94% of Q3 originations in high-margin BPL Rental.
- **Financial Strength**: $10.4B investment portfolio, 47% YoY net interest income growth, and book value up 1.2% QoQ to $10.38.
- **Leverage Management**: 5x recourse leverage reflects disciplined capital deployment, with credit book leverage <1x via securitization.
- **Share Value**: 30% discount to book value highlights undervaluation, with Agency RMBS alone trading at 17% premium.

**【CEO Summary Section】**
- Adamas rebranded to reflect a broader strategic vision, with EDA rising to $0.24 per share (6th consecutive quarterly increase) and dividend increased to $0.23 per share.
- Agency RMBS now comprises 57% of total capital ($6.7B), up from 19% a year ago, driving earnings durability.
- Acquired full ownership of Constructive Loans, a leading BPL originator, to capitalize on housing affordability trends.
- Shares trade at 30% discount to adjusted book value, with Agency RMBS alone valued 17% above current price.

**【CFO Financial Commentary】**
- Investment portfolio grew to $10.4B (21% QoQ), with EAD per share up 9% to $0.24 and net interest income per share at $0.47 (47% YoY growth).
- Constructive contributed $14.1M in mortgage banking income, despite $3.8M net loss due to integration costs.
- Leverage ratios increased to 5x (recourse) and 4.7x (portfolio), driven by Agency RMBS acquisitions and Constructive consolidation.
- GAAP and adjusted book value per share rose to $9.20 and $10.38, respectively.

**【President's Market Update】**
- Q3 investment activity reached $2.3B, with $1.8B allocated to Agency RMBS and $262M to BPL Bridge loans.
- BPL Rental portfolio grew 24% to $1.16B, with 98% of loans having prepayment penalties and 60+ day delinquencies at 1.3%.
- Constructive originated $439M in loans (94% BPL Rental), with Adamas purchasing <50% of production to maintain market access.
- Multifamily JV exited, with mezzanine portfolio generating a 32.4% payoff rate (vs. 25.8% historical average).

**【Q&A Highlights】**
- Agency allocation to slow from 57% (Q3) as spreads tighten, with focus shifting to BPL Rental and Constructive origination.
- Share buybacks considered but balanced against asset allocation opportunities; no Q3 repurchases due to capital deployment.
- Book value up 2.5%-3% YTD, driven by Agency RMBS and whole loan valuation improvements.
- Leverage on credit book expected to remain below 1x, with securitization market access key to financing strategy.

Adamas Trust, Inc. (ADAM) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

ADAM

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