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About Cherry Hill Mortgage Investment Corporation (CHMI)
Cherry Hill Mortgage Investment Corporation (CHMI) is a specialized financial services company operating as a real estate investment trust (REIT) in the United States. Headquartered in Moorestown, New Jersey, CHMI focuses on investing in residential mortgage assets to generate long-term, risk-adjusted returns for its shareholders. The company achieves this primarily through dividend distributions and secondarily via capital appreciation, making it an attractive option for income-focused investors.
Core Business Model and Revenue Streams
CHMI's business model is built around two primary segments: Residential Mortgage-Backed Securities (RMBS) and Servicing Related Assets. The RMBS segment primarily generates revenue through interest income earned on its portfolio of residential mortgage-backed securities. This portfolio includes agency RMBS, which are backed by government-sponsored entities, providing a measure of stability and liquidity. The Servicing Related Assets segment, on the other hand, derives income from mortgage servicing rights (MSRs), which involve managing the day-to-day operations of mortgage loans, such as collecting payments and managing escrow accounts. This dual-segment approach allows CHMI to diversify its revenue streams while leveraging opportunities in both the fixed-income and mortgage servicing markets.
Market Position and Industry Context
Operating within the broader real estate and financial services industries, CHMI is part of a competitive landscape that includes other REITs specializing in residential mortgage assets. The company's focus on RMBS and servicing-related assets positions it uniquely within the market, as it balances income generation with risk management. By investing in agency RMBS, CHMI mitigates credit risk, while its servicing-related assets provide a counterbalance to interest rate sensitivity, offering a degree of stability in varying economic conditions.
Challenges and Risk Factors
As with any REIT operating in the mortgage sector, CHMI faces several challenges, including exposure to interest rate fluctuations, prepayment risks, and housing market dynamics. Changes in interest rates can impact the value of its RMBS portfolio and the profitability of its servicing-related assets. Additionally, prepayment risks—when homeowners refinance or pay off their mortgages early—can affect the expected returns on its investments. The company's ability to navigate these challenges through effective risk management and strategic portfolio allocation is critical to its long-term success.
Value Proposition
CHMI's primary value proposition lies in its ability to deliver consistent income to shareholders through dividends, supported by a carefully managed portfolio of residential mortgage assets. The company's expertise in both RMBS and servicing-related assets allows it to capitalize on opportunities across different segments of the mortgage market, providing a balanced approach to income generation and risk mitigation.
Conclusion
Cherry Hill Mortgage Investment Corporation represents a compelling option within the REIT sector for investors seeking exposure to residential mortgage assets. By combining investments in RMBS with servicing-related assets, the company offers a diversified revenue model designed to deliver long-term, risk-adjusted returns. While it operates in a competitive and dynamic industry, CHMI's strategic focus and expertise position it as a noteworthy player in the residential mortgage investment space.
Cherry Hill Mortgage Investment (NYSE: CHMI) has announced the estimated Federal income tax treatment of its 2024 dividend distributions for both common and preferred stock. For common stock, the total distributions per share will be $0.60 annually ($0.15 quarterly), split equally between ordinary dividends ($0.30) and nondividend distributions ($0.30).
The 8.20% Series A Preferred Stock will receive total distributions of $2.05 per share for 2024, paid as $0.5125 quarterly, all classified as ordinary dividends. The 8.250% Series B Fixed-to-Floating Rate Preferred Stock will receive varying quarterly payments totaling $2.4556 per share for 2024, with payments increasing in the latter half of the year, all classified as ordinary dividends.
Cherry Hill Mortgage Investment (NYSE: CHMI) has announced its Q4 2024 dividend distributions. The company declared a common stock dividend of $0.15 per share, payable on January 31, 2025, to stockholders of record as of December 31, 2024.
Additionally, the company declared preferred stock dividends: $0.5125 per share for its 8.20% Series A Cumulative Redeemable Preferred Stock and $0.6739 per share for its 8.250% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock. Both preferred dividends will be paid on January 15, 2025, to stockholders of record as of December 31, 2024.
Cherry Hill Mortgage Investment (NYSE: CHMI) has transitioned to become a fully integrated, internally managed mortgage REIT, terminating its management agreement with Cherry Hill Mortgage Management, effective November 14, 2024. The internalization involves new employment arrangements with the senior management team and supporting personnel. No termination fee is required, and management fees will cease. The company expects this change to reduce expenses and enhance earnings. Additionally, the Board's special committee has concluded its strategic alternatives review, deciding to continue pursuing the company's residential mortgage investment strategy as an internally managed entity.
Cherry Hill Mortgage Investment (NYSE: CHMI) reported Q3 2024 results with a GAAP net loss of $14.8 million ($0.49 per share). The company posted earnings available for distribution of $2.5 million ($0.08 per share). Key metrics include common book value per share of $4.02, unrestricted cash of $50.2 million, and aggregate portfolio leverage of 5.3x. The company declared a regular common dividend of $0.15 per share, representing an annualized yield of 18.6%. Net servicing income was $8.5 million, while net interest income was $0.1 million. The MSR portfolio's unpaid principal balance stood at $17.6 billion with a carrying value of $226.8 million.
Cherry Hill Mortgage Investment (NYSE: CHMI) has scheduled its third quarter 2024 earnings release for November 12, 2024, after market close. The company will host a conference call the same day at 5:00 pm Eastern Time to discuss the results. Investors can access the live webcast through the company's website at www.chmireit.com, with an online archive available for one year. Participants can join via telephone using domestic (1-800-715-9871) or international (1-646-307-1963) numbers with Conference ID: 9439976.
Cherry Hill Mortgage Investment (NYSE: CHMI) has announced its dividend distributions for the third quarter of 2024. The company's Board of Directors declared a common stock dividend of $0.15 per share, payable on October 31, 2024, to shareholders of record as of September 30, 2024. Additionally, preferred stock dividends were declared: $0.5125 per share for the 8.20% Series A Cumulative Redeemable Preferred Stock and $0.6986 per share for the 8.250% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock. Both preferred stock dividends will be paid on October 15, 2024, to shareholders of record as of September 30, 2024.
Cherry Hill Mortgage Investment (NYSE: CHMI) reported results for Q2 2024:
- GAAP net loss of $1.9 million, or $0.06 per share
- Earnings available for distribution (EAD) of $2.3 million, or $0.08 per diluted share
- Common book value per share of $4.15 as of June 30, 2024
- Declared regular common dividend of $0.15 per share (16.4% annualized yield)
- Aggregate portfolio leverage at 4.9x
- Unrestricted cash of $52.4 million
Key highlights include selling $1.2 billion UPB of low-balance MSRs to enhance portfolio efficiency and plans to internalize management to reduce expenses. The company reported net servicing income of $8.9 million and net interest income of $0.2 million for the quarter.
Cherry Hill Mortgage Investment (NYSE: CHMI) has announced its schedule for the release of second quarter 2024 financial results. The company will disclose its earnings after the market closes on August 8, 2024, followed by a conference call at 5:00 pm Eastern Time on the same day to discuss the results.
Investors and interested parties can access a live webcast of the conference call through the investor relations section of CHMI's website at www.chmireit.com. The webcast will be archived on the site for one year after the call. For those wishing to participate via telephone, registration is required, after which dial-in information will be provided.
Cherry Hill Mortgage Investment (NYSE: CHMI) announced that its Board of Directors has approved the internalization of the Company's management. This comes after a recommendation from the Special Committee, composed of entirely independent and disinterested board members, to terminate the management agreement with Cherry Hill Mortgage Management, The internalization is part of a broader exploration of strategic alternatives by the Special Committee. The timeline for completing this exploration remains undefined, and there is no guarantee that it will result in any transaction beyond the internalization. The Company will only disclose further developments when deemed appropriate or legally required.
Cherry Hill Mortgage Investment (NYSE: CHMI) has announced its common and preferred dividends for the second quarter of 2024. A dividend of $0.15 per share will be paid on CHMI’s common stock on July 31, 2024, to shareholders of record as of June 28, 2024.
Additionally, the Board of Directors has declared a dividend of $0.5125 per share on the 8.20% Series A Cumulative Redeemable Preferred Stock and $0.6995 per share on the 8.250% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock. These dividends will be payable on July 15, 2024, to shareholders of record as of June 28, 2024.
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