Adamas Trust (ADAM) Q3 2024 earnings summary

Executive summary

• Reported net income attributable to common stockholders of $32.4 million, or $0.36 per share, for Q3 2024, reversing a loss in the prior year and driven by a shift to recurring interest income and portfolio rotation away from low-yield multifamily assets.

• Total adjusted net interest income rose 39% year-over-year to $29 million, reflecting deliberate balance sheet growth and focus on stable income investments.

• Portfolio grew by $1 billion (17%) from last quarter and over one-third year-to-date, reaching $6.9 billion as of September 30, 2024.

• Management plans to deploy excess liquidity for continued portfolio growth, with no corporate debt maturities until 2026.

• Ongoing asset sales and new debt issuances supported portfolio growth amid volatile market and interest rate conditions.

Financial highlights

• Q3 2024 EPS was $0.36; undepreciated EPS was $0.39.

• Book value per share was $9.83 (up 1.44% QoQ); adjusted book value per share was $10.87 (down 1.36% QoQ).

• Interest income for Q3 2024 was $108.4 million, up from $65.2 million in Q3 2023; net interest income was $20.2 million, up from $16.8 million.

• Yield on average interest earning assets was 6.69%, with a net interest spread of 1.32%.

• Paid a $0.20 per share dividend, unchanged from the prior quarter.

Outlook and guidance

• Positioned for growth in 2025 with a strong balance sheet, growing income base, and no corporate debt maturities until 2026.

• Expect recurring earnings to move closer to the current dividend as portfolio rotation continues.

• Management expects continued selective acquisition of single-family and multi-family credit assets, with prudent liability management.

• Leverage is expected to rise as the portfolio grows, with an emphasis on longer-term and non-mark-to-market financing.

• Anticipate robust activity in multifamily and other sectors resuming in early 2025 after a seasonal and rate-driven slowdown.