ADAM

Business Context and Reporting Period

Company: Adamas Trust, Inc. (formerly New York Mortgage Trust, Inc., renamed September 3, 2025)
Filing Type: Form 10-K
Reporting Period: Fiscal Year Ended December 31, 2025
Business Overview: Adamas is an internally-managed REIT focused on mortgage-related residential assets and fixed-income investments. The company operates two segments: an investment portfolio (Agency RMBS, residential loans, non-Agency RMBS) and Constructive (a wholly-owned subsidiary originating business purpose loans). In July 2025, Adamas acquired the remaining 50% interest in Constructive, consolidating its financial results.

Key Financial Metrics

Material Changes vs. Prior Period

• Portfolio Expansion: The investment portfolio grew by approximately $3.1 billion (42%) to $10.5 billion, driven by $4.1 billion in Agency RMBS acquisitions and $1.7 billion in business purpose loans.
• Constructive Acquisition: Full consolidation of Constructive (completed July 15, 2025) added $26.6 million in mortgage banking income and $8.1 million in loan origination costs for the period.
• Real Estate Wind-down: The company completed the disposition of the majority of its multi-family joint venture equity investments, reducing exposure to this asset class. Multi-family assets now represent a smaller portion of the balance sheet.
• Debt Issuance: Issued $197.5 million in senior unsecured notes (9.125% due 2030 and 9.875% due 2030) and completed four securitizations totaling $945.5 million in net proceeds.
• Dividend Increase: Quarterly dividends increased to $0.23 per share in the third and fourth quarters of 2025, a 15% increase from the first half of the year.

Guidance, Outlook, and Risks

Management Commentary: Management expects to maintain a disciplined approach to portfolio growth, leveraging the Constructive origination platform to scale recurring earnings. The strategy emphasizes assets with less price sensitivity to credit deterioration (Agency RMBS) and higher-quality business purpose loans.

Subsequent Events (Post-Dec 31, 2025):

• Issued $90.0 million of 9.250% Senior Notes due 2031 (January 2026).
• Redeemed $100.0 million of 2026 Senior Notes (February 2026).
• Extended common and preferred stock repurchase programs to March 31, 2027.

Key Risks:

• Interest Rate Risk: Mismatches between asset yields and borrowing costs; sensitivity of asset values to rate changes.
• Liquidity and Leverage: Reliance on short-term repurchase agreements subject to margin calls; increased leverage ratios (5.0x recourse) compared to prior year.
• Credit Risk: Exposure to business purpose loans and non-Agency RMBS, which carry higher default risk than Agency securities.
• Regulatory: Risks related to maintaining REIT qualification and Investment Company Act exemptions.

Investor Verification Checklist

• Leverage Sustainability: Verify the company's ability to manage the increased recourse leverage ratio (5.0x) in a volatile interest rate environment.
• Constructive Integration: Assess the performance of the newly consolidated Constructive segment and its contribution to recurring earnings.
• Preferred Stock Dividends: Monitor the transition of Series D, E, and F preferred stock from fixed to floating rates, which could increase dividend costs.
• Asset Quality: Review delinquency rates and loss severity for the business purpose loan portfolio and non-Agency RMBS.
• Liquidity Buffers: Confirm the adequacy of unencumbered assets ($454 million in securities, $206 million in cash) to meet potential margin calls.