Adamas Trust, Inc. (ADAM) Q2 2026 Earnings: Revenue $174M (+23.8%)
ADAM — Q2 2026 Financial Report Analysis
Q2 · Fiscal year 2026 · Published by Pham Hop
Adamas Trust's recurring earnings rose 36% to $0.30 a share and book value climbed to $10.16 as a larger, more leveraged mortgage portfolio and $48.8M of hedge gains offset rising rates; spread stayed flat near 1.5%.
Revenue
$174M
+23.8% YoY
Net income
$43M
Diluted EPS
$0.47
This period vs a year ago
Same period last year
This period
Revenue▲+23.8%
≈$141M
$174M
Year-ago figures (≈) are worked out from the growth rate the company reported. Each row has its own scale.
A bigger, more leveraged portfolio lifted recurring earnings 36%, while hedges covered the rate hit
Adamas Trust (formerly New York Mortgage Trust) is a mortgage REIT: it borrows short-term money to buy mortgage bonds and home loans, and earns the gap between what those assets yield and what the borrowing costs. In the second quarter of 2026 that gap in dollars — net interest income — rose 37.8% from a year earlier to $50.2 million. The cause was a larger portfolio rather than a wider margin. The company added $1.5 billion of new investments in the quarter, and its portfolio reached about $11.7 billion. GAAP net income to common shareholders was $43.4 million ($0.47 per diluted share), against a $3.5 million loss a year earlier. The size of that swing comes mostly from mark-to-market accounting, explained below. The company's own recurring-earnings measure rose from $0.22 to $0.30 per share.
At a glance
Earnings available for distribution: $0.30 per share, up 36.4%. This is the company's measure of recurring income before the paper gains and losses on its holdings, and it is what the board looks at when setting the dividend. It now pays for the $0.27 Q2 dividend with a little to spare.
Book value per share: $10.16, up 11.5% year over year and 1.8% on the quarter. Book value is what the company's assets would be worth to shareholders after all debts and preferred stock are paid off. For a mortgage REIT it matters more than earnings, and it has now risen four quarters in a row.
Net interest spread: 1.48%, compared with 1.50% a year ago. Spread is the yield on its assets minus its borrowing cost, and it is still no wider. Income grew because the company borrowed more (recourse leverage rose from 5.0x to 5.5x equity since December), not because each dollar invested earns more.
The numbers
Interest income is shown as the top line: a mortgage REIT has no sales revenue in the usual sense.
Metric
Q2 2026
Q2 2025
YoY Change
Read 0 community reports on Adamas Trust, Inc., or write your own.Write a report
Interest income (top line)
$174.4M
$140.9M
+23.8%
Interest expense
$124.2M
$104.5M
+18.9%
Net interest income
$50.2M
$36.4M
+37.8%
Net income to common shareholders (GAAP)
$43.4M
-$3.5M
n/m (loss a year ago)
Diluted EPS (GAAP)
$0.47
-$0.04
n/m
Earnings available for distribution per share (non-GAAP)
$0.30
$0.22
+36.4%
Book value per common share
$10.16
$9.11
+11.5%
Adjusted book value per share (non-GAAP)
$11.05
$10.26
+7.7%
Yield on average interest-earning assets (non-GAAP)
6.03%
6.48%
-0.45 pts
Net interest spread (non-GAAP)
1.48%
1.50%
-0.02 pts
Common dividend declared
$0.27
$0.20
+35.0%
n/m = not meaningful, because the year-ago figure was a loss. For the first half, GAAP net income to common shareholders was $80.3 million ($0.87 diluted), up from $26.8 million ($0.29).
The quarterly economic return was 4.51%. That is the change in book value plus the dividend, as a share of starting book value: ($10.16 − $9.98 + $0.27) ÷ $9.98. Measured on adjusted book value it was 4.81%.
Where the income came from
The company splits its interest-earning book into Agency securities, single-family credit, multi-family credit and a corporate line. Agency securities are mortgage bonds whose principal is guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae. Single-family credit means home loans and non-guaranteed mortgage bonds, where Adamas carries the default risk. For Q2 2026 (all non-GAAP, company-adjusted figures):
Book
Avg. assets
Asset yield
Financing cost
Spread
Adjusted net interest income
Agency
$6.88B
5.64%
3.89%
1.75%
$36.9M
Single-family credit
$3.83B
6.77%
5.20%
1.57%
$20.5M
Multi-family credit
$0.06B
12.30%
—
12.30%
$1.7M
Corporate/other
$0.35B
4.60%
7.00%
-2.40%
-$8.8M
Total
$11.11B
6.03%
4.55%
1.48%
$50.3M
Agency bonds now produce about 73% of adjusted net interest income. They carry no credit risk, but their prices move with interest rates, which is why the hedging book matters. The corporate line loses $8.8 million a quarter. That is the interest on the company's own unsecured notes and debentures, at an average cost of 7.00%.
Over the quarter the company bought $798.3 million of Agency investments and $632.3 million of business purpose loans. These are loans to property investors rather than homeowners: rental-property mortgages ("BPL-Rental") and short-term fix-and-flip loans ("BPL-Bridge"). The bridge loans carry a weighted average coupon of 10.31%. Rental loans are the larger category, at $2.3 billion of unpaid principal. It financed $521.2 million of rental loans through two securitizations (bundling loans into bonds sold to investors) at a 5.48% effective cost. After quarter-end it priced a further $341 million at 5.73%.
Constructive: more revenue and more cost, roughly breakeven
Constructive Loans, the business-purpose-loan originator the company took over in July 2025, is new to the income statement this year. That makes the year-over-year cost comparison look worse than the underlying business is. General and administrative expenses more than doubled, from $11.8 million to $25.6 million, and the 10-Q attributes the increase to "the inclusion of Constructive's results following its consolidation in the third quarter of 2025." On the other side, $16.2 million of mortgage banking income (gains from making and selling loans) appeared, from zero a year ago.
The segment table shows Constructive on its own lost $0.7 million before tax in Q2. It had $15.6 million of other income and $16.8 million of expenses, including $4.8 million of loan origination costs. It originated $427.6 million of loans in the quarter, measured by loan commitments. $381.5 million of Constructive-originated loans were transferred into Adamas's own portfolio, where they earn interest. So far the value of the acquisition lies in supplying assets to the portfolio, not in profit from the origination business itself.
What the headline numbers hide
GAAP profit is inflated by hedge gains; recurring earnings are the better guide. The gap between GAAP net income ($43.4 million) and earnings available for distribution ($27.1 million) is mostly mark-to-market. Rising interest rates cut the value of the company's bonds and loans, producing $8.5 million of unrealized losses and $13.0 million of realized losses. But the derivatives it holds as hedges gained $48.8 million. The hedges more than covered the portfolio losses, which is how book value rose in a quarter when rates went up. It also means that in a quarter when rates fall, GAAP EPS could drop sharply even if nothing changes in the business.
Hedging turned from income into a cost. Earnings available for distribution count the regular interest the company pays or receives on its interest-rate swaps (contracts that fix its borrowing rate). A year ago those swaps earned it a net $3.7 million in the quarter; in Q2 2026 they cost it $1.7 million. That $5.4 million swing held back recurring earnings. They rose $7.1 million anyway, from $20.0 million to $27.1 million.
Cash flow roughly matches recurring earnings. First-half operating cash flow was $89.2 million. Stripping out the cash tied up in loans Constructive originates to sell, it was $50.3 million. That is close to first-half earnings available for distribution of about $53.6 million, so recurring earnings are turning into cash. GAAP net income ($139.6 million before non-controlling interests) is a much weaker guide to cash.
Q1's GAAP number carried a one-off. In Q1 2026 a multi-family apartment property was sold for about $130.7 million, booking a $52.3 million gain. Only about $13.8 million of that belonged to common shareholders; the rest belonged to outside partners in the property. It is why first-half "other income" ($54.6 million) is so far above last year's ($4.2 million).
No buyback or tax effect. Basic shares outstanding fell only 0.4% year over year (90.3 million to 90.0 million), and as a REIT the company pays almost no income tax. The earnings improvement came from operations and hedging, not from share count or tax.
Asset yields are falling. The portfolio's average yield slipped each quarter, from 6.48% a year ago to 6.03%, as Agency bonds became a larger share. Borrowing costs fell by about the same amount, so the spread held at around 1.5%. If funding costs stop falling while yields keep drifting down, the spread will shrink.
Credit is stable. Of the company's acquired and originated residential loans, 95.1% were current and 3.5% were 90 or more days past due at June 30. The figures at December 31 were 95.0% and 3.6%.
Takeaway: The 36% rise in recurring earnings came from a larger portfolio and more borrowing. The spread was flat at about 1.5%, and leverage went from 5.0x to 5.5x equity in six months. Earnings are growing, but only by taking on more debt. The board raised the Q3 dividend to $0.30, so the payout now uses up all of Q2's recurring earnings, with no cushion left.
Outlook
Management gave no numeric earnings guidance. The CEO's comment in the earnings release points to continued growth in the investment platform and "further shareholder value." Three things since quarter-end matter:
Dividend raised again, to $0.30 for Q3 (declared August 11, payable October 28). That is the second increase in two quarters, from $0.23 to $0.27 to $0.30. It matches Q2's $0.30 of earnings available for distribution exactly, so Q3 recurring earnings need to keep rising just for the dividend to stay covered.
More expensive corporate debt. On August 14 the company sold $90 million of 9.600% senior notes due 2031. That adds to the corporate line, which already loses $8.8 million a quarter, unless the money is invested at yields above 9.6%.
Securitization costs are rising. Rental-loan securitizations priced at 5.48% in Q2 and 5.73% after quarter-end. Financing costs on new credit assets are going up, not down.
Our view: the portfolio can keep growing, and the hedges limited the damage from rising rates in Q2. The risk is that earnings growth now depends on adding leverage at a roughly unchanged 1.5% spread. Meanwhile, marginal funding costs are rising and the dividend has caught up with earnings. For Q3 (expected around late October to early November, based on the company's recent late-month reporting pattern), watch three things: whether recurring earnings per share stay at or above $0.30; whether net interest spread holds near 1.5%; and whether Constructive's segment moves from breakeven to a profit.
Source: Adamas Trust Form 10-Q for the quarter ended June 30, 2026 (filed July 31, 2026), and the Q2 2026 earnings release (Form 8-K Exhibit 99.1, July 29, 2026). Post-quarter items are from 8-Ks filed August 11 and August 14, 2026.