Business Context and Reporting Period
Company: Adamas Trust, Inc. (formerly New York Mortgage Trust, Inc., renamed September 3, 2025)
Filing Type: Form 10-Q
Reporting Period: Quarter ended September 30, 2025 (Q3 2025)
Business Overview: Adamas is an internally-managed REIT focused on residential mortgage assets, including Agency RMBS, residential loans, and multi-family assets. A significant strategic development in Q3 2025 was the acquisition of the remaining 50% ownership interest in Constructive Loans, LLC ("Constructive"), a business purpose loan lender, resulting in full consolidation of its operations.
Key Financial Metrics
| Metric | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 |
|---|---|---|---|---|
| Net Income (Loss) Attributable to Common Stockholders | $32.7 million | $32.4 million | $59.5 million | $(62.0) million |
| Diluted EPS | $0.36 | $0.36 | $0.65 | $(0.68) |
| Total Assets | $12.4 billion | $9.2 billion (Dec 31, 2024) | N/A | N/A |
| Net Interest Income | $36.6 million | $20.2 million | $106.1 million | $57.1 million |
| Unrealized Gains, Net | $54.9 million | $96.9 million | $197.7 million | $41.0 million |
| Cash and Cash Equivalents | $185.3 million | $167.4 million (Dec 31, 2024) | N/A | N/A |
| Total Liabilities | $11.0 billion | $7.8 billion (Dec 31, 2024) | N/A | N/A |
| Stockholders' Equity | $1.39 billion | $1.39 billion (Dec 31, 2024) | N/A | N/A |
Material Changes vs. Prior Period
- Portfolio Expansion: Total assets increased by approximately $3.2 billion from year-end 2024, driven by a record $1.8 billion in Agency RMBS acquisitions and $522 million in business purpose loans during Q3 2025.
- Constructive Acquisition: The July 15, 2025 acquisition of the remaining 50% of Constructive resulted in $14.1 million of mortgage banking income and $3.8 million in loan origination costs for the quarter. This also led to a significant increase in General and Administrative expenses ($23.3 million in Q3 2025 vs. $11.9 million in Q3 2024).
- Real Estate Wind-down: The Company completed the disposition of its multi-family joint venture equity investments during Q3 2025. Consequently, "Net Loss from Real Estate" improved significantly to a loss of $3.9 million in Q3 2025 compared to $7.5 million in Q3 2024, primarily due to reduced expenses from de-consolidated assets.
- Debt Issuance: The Company issued $115.0 million of 9.875% Senior Notes due 2030 and $82.5 million of 9.125% Senior Notes due 2030 during the nine months ended September 30, 2025, increasing senior unsecured notes from $159.2 million to $356.9 million.
- Derivative Performance: Net losses on derivative instruments decreased significantly to $13.0 million in Q3 2025 from $60.6 million in Q3 2024, driven by favorable interest rate movements impacting swap valuations.
Guidance, Outlook, and Risks
- Dividend Increase: The Board declared a quarterly common stock dividend of $0.23 per share, a 15% increase from the prior quarter, reflecting sustained earnings momentum.
- Strategic Outlook: Management expects to maintain a disciplined approach to portfolio growth, leveraging the integrated Constructive origination platform to scale recurring earnings. The focus remains on high-quality, income-producing assets with less price sensitivity to credit deterioration.
- Market Risks:
- Interest Rate Risk: A 100 basis point increase in interest rates is estimated to decrease annualized adjusted net interest income by approximately $65.2 million. Conversely, a 100 basis point decrease is estimated to increase it by $65.1 million.
- Liquidity Risk: Approximately 68% of the Company's debt (excluding mortgages and CDOs) is subject to mark-to-market margin calls. The Company maintains $180.9 million in unrestricted cash and $459.6 million in unencumbered investment securities to meet potential margin requirements.
- Trade Policy: Ongoing uncertainty regarding U.S. trade policy and tariffs poses risks to economic growth and inflation, which could impact borrower performance and asset valuations.
- Unusual Items: The Company recognized $50.5 million in net realized losses for the nine months ended September 30, 2025, primarily related to the sale of U.S. Treasury securities and losses on foreclosed properties. This contrasts with $19.4 million in realized losses for the same period in 2024.
Investor Verification Checklist
- Constructive Integration: Verify the actual run-rate of mortgage banking income and the impact of increased G&A expenses on long-term profitability post-acquisition.
- Leverage Ratios: Confirm the Company Recourse Leverage Ratio (5.0x) and Portfolio Recourse Leverage Ratio (4.7x) remain within target ranges as the portfolio expands.
- Margin Call Exposure: Assess the sufficiency of unencumbered assets ($459.6 million) relative to the 68% of debt subject to mark-to-market financing.
- Real Estate Disposition: Confirm the complete wind-down of multi-family joint venture equity investments and the absence of residual liabilities from the disposal group.
- Dividend Sustainability: Evaluate the coverage of the increased $0.23 dividend against Earnings Available for Distribution (EAD) of $0.24 per share for the quarter.