Cherry Hill Mortgage Investment Corporation Announces First Quarter 2025 Results
TINTON FALLS, N.J.--(BUSINESS WIRE)--May 06, 2025--
Cherry Hill Mortgage Investment Corporation $(CHMI)$ ("Cherry Hill" or the "Company") today reported results for the first quarter 2025.
First Quarter 2025 Highlights
-- GAAP net loss applicable to common stockholders of $9.3 million, or $0.29
per share.
-- Earnings available for distribution ("EAD") attributable to common
stockholders of $5.4 million, or $0.17 per diluted share.
-- Common book value per share of $3.58 at March 31, 2025.
-- Declared regular common dividend of $0.15 per share; annualized common
dividend yield was 20.1% based on the closing sale price of the Company's
common stock as reported by the NYSE on May 5, 2025.
-- Aggregate portfolio leverage stood at 5.2x at March 31, 2025.
-- As of March 31, 2025, the Company had unrestricted cash of $47.3 million.
"We were pleased to complete our first full quarter as an integrated, internally managed mortgage REIT," said Jay Lown, President and CEO of Cherry Hill Mortgage Investment Corporation. "Looking ahead, while we closely monitor the macro environment, we are focused on growing our portfolio responsibly as we seek to deliver strong risk-adjusted returns and maximize shareholder value."
Operating Results
Cherry Hill reported GAAP net loss applicable to common stockholders for the first quarter of 2025 of $9.3 million, or $0.29 per basic and diluted weighted average common share outstanding. Reported GAAP net loss was determined based primarily on the following: $2.2 million of net interest income, $8.4 million of net servicing income, a net realized loss on RMBS of $4.0 million, a net realized gain of $4.6 million on derivatives, a net unrealized gain of $14.8 million on RMBS measured at fair value through earnings, a net unrealized loss of $22.7 million on derivatives, a net unrealized loss of $6.3 million on investments in Servicing Related Assets, and general and administrative expenses, compensation and benefits in the aggregate amount of $3.8 million.
Earnings available for distribution attributable to common stockholders for the first quarter of 2025 were $5.4 million, or $0.17 per basic and diluted weighted average common share outstanding. For a reconciliation of GAAP net loss to non-GAAP earnings available for distribution, please refer to the reconciliation table accompanying this release.
Three Months Ended
-------------------------------------
March 31, 2025 December 31, 2024
---------------- -------------------
(unaudited) (unaudited)
Income
Interest income $ 14,801 $ 15,053
Interest expense 12,635 14,393
----------- --------------
Net interest income 2,166 660
Servicing fee income 10,973 11,606
Servicing costs 2,545 3,123
----------- --------------
Net servicing income 8,428 8,483
Other income (loss)
Realized loss on
RMBS, net (3,992) (1,085)
Realized gain on
derivatives, net 4,634 13,627
Unrealized gain
(loss) on RMBS,
measured at fair
value through
earnings, net 14,780 (31,674)
Unrealized gain
(loss) on
derivatives, net (22,741) 21,838
Unrealized gain
(loss) on
investments in
Servicing Related
Assets (6,325) 6,876
----------- --------------
Total Income (Loss) (3,050) 18,725
Expenses
General and
administrative
expense 2,059 2,507
Compensation and
benefits 1,710 1,096
Management fee to
affiliate - 858
----------- --------------
Total Expenses 3,769 4,461
----------- --------------
Income (Loss) Before
Income Taxes (6,819) 14,264
Provision for corporate
business taxes 173 2,450
----------- --------------
Net Income (Loss) (6,992) 11,814
Net (income) loss
allocated to
noncontrolling
interests in Operating
Partnership 133 (232)
Dividends on preferred
stock (2,454) (2,513)
----------- --------------
Net Income (Loss)
Applicable to Common
Stockholders $ (9,313) $ 9,069
Net Income (Loss) Per
Share of Common Stock
Basic $ (0.29) $ 0.29
Diluted $ (0.29) $ 0.29
Weighted Average Number
of Shares of Common
Stock Outstanding
Basic 31,690,657 31,569,065
Diluted 31,690,657 31,578,138
Dollar amounts in thousands, except per share amounts.
Net unrealized gain on the Company's RMBS portfolio classified as available-for-sale that are reported in accumulated other comprehensive income was approximately $6.9 million.
Three Months Ended
--------------------------------------
March 31, 2025 December 31, 2024
---------------- -------------------
(unaudited) (unaudited)
Net Income (Loss) $ (6,992) $ 11,814
Other comprehensive
income (loss):
Unrealized gain (loss)
on RMBS,
available-for-sale,
net 6,850 (10,795)
------------ --- --------------
Net other comprehensive
income (loss) 6,850 (10,795)
------------ --- --------------
Comprehensive income
(loss) $ (142) $ 1,019
Comprehensive (income)
loss attributable to
noncontrolling interests
in Operating
Partnership 3 (19)
Dividends on preferred
stock (2,454) (2,513)
------------ --- --------------
Comprehensive loss
attributable to common
stockholders $ (2,593) $ (1,513)
Dollar amounts in thousands.
Portfolio Highlights for the Quarter Ended March 31, 2025
The Company realized net servicing fee income of $8.4 million, net interest income of $2.2 million and other loss of $13.6 million, primarily related to unrealized losses on derivatives, an unrealized loss on investments in Servicing Related Assets and a realized loss on the RMBS portfolio, partially offset by an unrealized gain on RMBS and realized gain on derivatives. The unpaid principal balance for the MSR portfolio stood at $17.0 billion as of March 31, 2025 and the carrying value of the MSR portfolio ended the quarter at $227.3 million. Net interest spread for the RMBS portfolio stood at 3.55% and the debt-to-equity ratio on the aggregate portfolio ended the quarter at 5.2x.
The RMBS portfolio had a book value and carrying value of approximately $1.1 billion at quarter-end March 31, 2025. The portfolio had a weighted average coupon of 4.88% and weighted average maturity of 28 years.
In order to mitigate duration risk and interest rate risk associated with the Company's RMBS and MSRs, Cherry Hill used interest rate swaps, TBAs and Treasury futures. At quarter end March 31, 2025, the Company held interest rate swaps with a notional amount of $804.3 million, TBAs with a notional amount of ($406.7) million, and Treasury futures with a notional amount of $91.7 million.
As of March 31, 2025, Cherry Hill's GAAP book value was $3.58 per diluted share, net of the first quarter dividend.
Dividends
On March 13, 2025, the Board of Directors declared a quarterly dividend of $0.15 per share of common stock for the first quarter of 2025. The dividend was paid in cash on April 30, 2025 to common stockholders of record as of the close of business on March 31, 2025. Additionally, the Board of Directors declared a dividend of $0.5125 per share on the Company's 8.20% Series A Cumulative Redeemable Preferred Stock and a dividend of $0.6372 per share on the Company's 8.250% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock for the first quarter 2025. The dividends were paid in cash on April 15, 2025 to Series A and B Preferred stockholders of record as of the close of business on March 31, 2025.
Earnings Available for Distribution
(MORE TO FOLLOW) Dow Jones Newswires
May 06, 2025 16:15 ET (20:15 GMT)
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