Company: ADAMM
Filing Date: 2025-05-02
Form Type: 10-Q
Source: 0001273685-25-000047
Chunk: 170

Company: ADAMAS TRUST, INC.
Filing Date: 2025-05-02
Form: 10-Q
Item: Part I, Item 2
Chunk 170
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 capital allocation decisions depend on prevailing market conditions, among other factors, and may change over time in response to opportunities available in different economic and capital market environments.

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Current Market Conditions and Commentary

The results of our business operations are affected by a number of factors, many of which are beyond our control, and primarily depend on, among other things, the level of our net interest income and the market value of our assets, which are driven by numerous factors including changes in interest rates and the supply and demand for mortgage-, housing- and credit-related assets in the marketplace, market volatility, our ability to identify and acquire assets on favorable terms, our ability to dispose of assets from time to time on favorable terms, the ability of our operating partners, tenants and borrowers of our loans and those that underlie our investment securities to meet their payment obligations, the terms and availability of adequate financing and capital, general economic and real estate conditions (both on a national and local level), the impact of government actions in the real estate, mortgage, credit and financial markets, and the credit performance of our credit sensitive assets.

Financial markets experienced volatility and declines in performance in the first quarter of 2025 followed by further deterioration after quarter end, due in part to the implementation of tariffs and trade policy uncertainty. Mortgage-related markets remained challenged in the first quarter of 2025 as borrowers remained sensitive to higher interest rates and origination volumes were down by some measures, among other considerations. The Dow Jones Industrial Average finished the first quarter of 2025 down 1.28%, and the Nasdaq Composite Index finished the first quarter of 2025 down 10.42%. Trade, interest rate and monetary policy uncertainty, mixed inflation data and geopolitical instability have further cautioned a number of economic outlooks, with concerns regarding the potential for stagflation growing. We anticipate that due to uncertainty related to trade policy, inflation, interest rates, monetary policy, the U.S. debt limit and the implementation of the new U.S. presidential administration’s policies, markets and the pricing for many of our assets will continue to experience volatility in 2025.

The market conditions discussed below significantly influence our investment strategy and results:

Select U.S. Financial and Economic Data. The U.S. economy contracted in the first quarter of 2025 with real gross domestic product (“GDP”) decreasing by 0.3% (advanced estimate) annualized rate, as compared to the annualized 2.4% GDP growth in the fourth quarter of 2024 and annualized 1.