Adamas Posts $1.89 Per-Share Loss as Book Value Falls in Third Quarter
Key Facts
Adamas Trust reported a generally accepted accounting principles (GAAP) loss of $1.89 per share in the third quarter of 2026, despite recording earnings available for distribution of $0.30 per share, up 25% year over year. The company declared a quarterly cash dividend of the same amount, saying earnings available for distribution fully covered its recently increased dividends. Book metrics, however, reflected clear pressure on asset values: book value fell to $7.93 per share on September 30, down 21.9% from the previous quarter. Adjusted book value also declined to $8.88 per share, down 19.6% quarter over quarter. The results highlight the contrast between the company’s ability to cover dividends and the losses and decline in portfolio value during a period marked by higher interest rates and market volatility.
Net interest income was $48.8 million, down 2.8% from the previous quarter, while adjusted net interest income rose 2.4% to $51.5 million. The divergence between the two measures offers a mixed picture of income from assets: the adjusted measure improved quarter over quarter, while total net interest income declined. At the same time, the company posted a negative quarterly economic return of 19.00%, and the return calculated on adjusted book value was negative 16.92%. These figures put the decline in book value in the broader context of quarterly performance, rather than reducing it to income movements alone. The reported figures did not attribute the per-share loss to a single item, while the chief executive explained the factors weighing on asset valuations.
The chief executive said higher interest rates and volatility contributed to the decline in adjusted book value, with the impact stemming primarily from lower valuations of agency mortgage-backed securities. He added that the company used short positions in TBA contracts in the second half of the quarter to reduce exposure to interest-rate and spread risk during September’s volatility. After quarter-end, it reduced those positions by 76%. The move points to an adjustment of hedges after the volatile period, alongside the continued effect of lower valuations of mortgage securities on book value. The chief executive said the decline in adjusted book value was "primarily driven by lower valuations of agency mortgage-backed securities."
On dividends, Adamas declared $0.30 per share for the third quarter, up 11.1% from the previous quarter. The company said earnings available for distribution fully covered its recently increased dividends; those earnings were $0.30 per share, up 25% from the same period a year earlier. Comparing growth in earnings available for distribution with the quarterly increase in dividends provides context for the company’s decision on cash returns to shareholders. The dividend, however, did not prevent book value from falling by more than one-fifth from the previous quarter. This reflects the difference between what earnings available for distribution measure and changes in the recorded value of shareholders’ equity during the quarter.
The company expanded its new residential investments by $1.6 billion during the quarter, including $1.2 billion in agency investments and $390.1 million in business-purpose loans. The unpaid original balance of its commercial-purpose rental loan portfolio was $2.6 billion. The company said the portfolio had an average FICO score of 751, an average loan-to-value ratio of 70%, and average debt-service coverage of 1.35 times. These figures come as the portfolio recorded a decline in book value, highlighting continued investment expansion alongside the valuation pressure cited by the chief executive. Management is scheduled to discuss the quarterly results on a call on October 29, 2026, at 9:00 a.m. Eastern time.
Adamas shares closed at $7.86 on October 27, 2026, according to EL7 data. Aurora Innovation’s quarterly results had not been confirmed in an open official announcement among the information available; the company had said it would release third-quarter results after the market close on October 28, 2026. Aurora scheduled a business review call for the same day at 5:00 p.m. Eastern time. In its second-quarter shareholder letter, the company maintained its 2026 revenue outlook of between $14 million and $16 million and said the fourth quarter could contribute more than half of the year’s revenue. Aurora revenue was $2 million in the second quarter of 2026, compared with $1 million in the same period of 2025, while its net loss widened to $270 million from $201 million.