Adamas Trust, Inc. - 9.125% Senior Notes Due 2030 Q3 FY2025 earnings call

• Rebranding to Adamas Trust symbolizes strength and durability, with Q3 marking a strategically significant period.
• EAD rose to $0.24 per share (6th consecutive quarterly increase), dividend increased to $0.23 per share.
• Investment portfolio grew to $10.4 billion from $8.6 billion, with highest quarterly net investment activity of $1.8 billion (20% increase).
• Acquired remaining 50% of Constructive, strengthening position in housing investment ecosystem.
• Agency RMBS now 57% of total capital, tripling capital allocation from a year ago.
• G&A expenses increased due to consolidation of Constructive and higher incentive compensation; portfolio operating expenses declined, with nonrecurring costs related to senior unsecured notes and securitizations.

Agency RMBS: Represented 57% of total capital, with a quarterly net investment increase of $1.8 billion (20%), ending the quarter at $6.7 billion. BPL rental: Reached $1.16 billion, a 24% quarter-over-quarter growth, with 60-plus days delinquencies at 1.3%. BPL bridge: Declined 4% to $919 million in the quarter. Multifamily: Completed exit of joint venture portfolio, mezzanine portfolio had a 32.4% payoff rate. Constructive: Acquired remaining 50%, generated $14.1 million mortgage banking income, with a $2.3 million return for the quarter.

• Expect to further advance EAD in Q4 with full quarter of interest income.
• Agency allocation to continue growing but at a more deliberate pace.
• Constructive expected to be a meaningful driver of earnings growth as integration progresses.
• Share repurchase considered as an incremental capital allocation avenue, balanced with asset opportunities.

• Factors causing actual results to differ from expectations detailed in press release and SEC filings.
• Competition in BPL bridge market intensifying, putting pressure on purchase volumes and pass-through rates.
• Uncertainty around GSE reform and its impact on the mortgage sector.

Q: How are GSE developments impacting capital allocation and regulatory factors in BPL space?

A: Jason Serrano discussed GSE reform implications and continued focus on agency allocation.

Q: Update on book value and leverage?

A: Adjusted book value up 2.5%-3% as of Oct 28, leverage on credit side up to 0.9x, agency leverage targeted around 8x.

Q: Deployment of capital from mezz and bridge and share repurchase?

A: Capital from mezz and bridge to be deployed opportunistically, share repurchase considered but balanced with asset opportunities.