Question · Q4 2025
Matthew Ertner asked about the potential impact of policies banning institutional investors from the rental space on Adamas Trust's business, specifically regarding the profile of their borrowers. He also inquired about the company's stance on share repurchases and whether any were executed in the fourth quarter. Finally, Ertner questioned Adamas Trust's approach to agency leverage given the tighter spread environment and GSE backstop.
Answer
Nicholas Mah, President, believes a ban on institutional SFR ownership would be positive for Constructive's business, as their loans are originated to individual investors, not large institutions, with all 2025 borrowers owning less than 80 single-family properties. Jason Serrano, CEO, explained that share repurchases are consistently evaluated against other capital allocation opportunities for accretive value, but no shares were repurchased in Q4. He noted that repurchases are a permanent capital reduction. Regarding agency leverage, Jason Serrano stated it declined slightly to 7.7x in Q4, and while historically it has run higher (8x-8.5x), it will likely trend on the lower end for now, with potential to go higher depending on market conditions.
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