Cherry Hill Mortgage Investment Corporation Announces Second Quarter 2024 Results
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) ha riportato i risultati per il secondo trimestre del 2024:
- Perdita netta GAAP di $1,9 milioni, pari a $0,06 per azione
- Utile disponibile per la distribuzione (EAD) di $2,3 milioni, o $0,08 per azione diluita
- Valore contabile comune per azione di $4,15 al 30 giugno 2024
- Dividendo comune ordinario dichiarato di $0,15 per azione (rendimento annualizzato del 16,4%)
- Leva del portafoglio aggregato a 4,9x
- Cassaforte non vincolata di $52,4 milioni
Tra i punti salienti vi è stata la vendita di $1,2 miliardi di UPB di MSR a basso saldo per migliorare l'efficienza del portafoglio e i piani per internalizzare la gestione al fine di ridurre le spese. L'azienda ha riportato un reddito netto da servizi di $8,9 milioni e un reddito netto da interessi di $0,2 milioni per il trimestre.
Cherry Hill Mortgage Investment (NYSE: CHMI) informó los resultados del segundo trimestre de 2024:
- Pérdida neta GAAP de $1.9 millones, o $0.06 por acción
- Ganancias disponibles para distribución (EAD) de $2.3 millones, o $0.08 por acción diluida
- Valor contable común por acción de $4.15 al 30 de junio de 2024
- Dividendo común regular declarado de $0.15 por acción (rendimiento anualizado del 16.4%)
- Apalancamiento del portafolio agregado de 4.9x
- Liquidez no restringida de $52.4 millones
Los principales puntos destacados incluyen la venta de $1.2 mil millones en UPB de MSR de bajo saldo para mejorar la eficiencia del portafolio y planes para internalizar la gestión y reducir gastos. La compañía reportó ingresos netos por servicios de $8.9 millones e ingresos netos por intereses de $0.2 millones para el trimestre.
체리 힐 모기지 투자 (NYSE: CHMI)는 2024년 2분기 결과를 보고했습니다:
- GAAP 기준 순손실 $1.9 백만, 주당 $0.06
- 배당 가능 수익 (EAD) $2.3 백만, 또는 희석 주당 $0.08
- 2024년 6월 30일 기준 주당 공통 장부 가치 $4.15
- 주당 $0.15의 정기 배당금 선언 (연환산 수익률 16.4%)
- 총 포트폴리오 레버리지 4.9배
- 제약 없는 현금 $52.4 백만
주요 하이라이트로는 포트폴리오 효율성을 개선하기 위해 저 잔액 MSR의 $1.2 billion UPB를 판매하고 비용 절감을 위해 관리 내부화 계획이 포함되어 있습니다. 회사는 이번 분기에 대한 순 서비스 수익 $8.9 백만 및 순 이자 수익 $0.2 백만을 보고했습니다.
Cherry Hill Mortgage Investment (NYSE: CHMI) a publié les résultats pour le deuxième trimestre 2024 :
- Perte nette GAAP de 1,9 million de dollars, soit 0,06 dollar par action
- Bénéfice disponible pour distribution (EAD) de 2,3 millions de dollars, soit 0,08 dollar par action diluée
- Valeur comptable des actions ordinaires de 4,15 dollars au 30 juin 2024
- Dividende commun régulier déclaré de 0,15 dollar par action (rendement annualisé de 16,4 %)
- Effet de levier du portefeuille agrégé à 4,9x
- Trésorerie non restreinte de 52,4 millions de dollars
Les faits marquants incluent la vente de 1,2 milliard de dollars UPB de MSR à faible solde pour améliorer l'efficacité du portefeuille et des projets d'internalisation de la gestion pour réduire les coûts. L'entreprise a déclaré un revenu net de services de 8,9 millions de dollars et un revenu net d'intérêts de 0,2 million de dollars pour le trimestre.
Cherry Hill Mortgage Investment (NYSE: CHMI) hat die Ergebnisse für das 2. Quartal 2024 berichtet:
- GAAP Nettverlust von 1,9 Millionen Dollar, oder 0,06 Dollar pro Aktie
- Verfügbare Erträge für die Verteilung (EAD) von 2,3 Millionen Dollar, oder 0,08 Dollar pro verwässerter Aktie
- Gemeinsamer Buchwert pro Aktie von 4,15 Dollar zum 30. Juni 2024
- Erklärung einer regulären Dividende von 0,15 Dollar pro Aktie (16,4% annualisierte Rendite)
- Kumulierte Portfoliowerkzeuge bei 4,9x
- Unrestricted Cash von 52,4 Millionen Dollar
Zu den wichtigsten Höhepunkten gehört der Verkauf von 1,2 Milliarden Dollar UPB von niedrig ausbalancierten MSRs zur Verbesserung der Portfolioeffizienz sowie die Pläne zur Internalisierung des Managements zur Senkung der Kosten. Das Unternehmen berichtete für das Quartal über ein Netto-Service-Einkommen von 8,9 Millionen Dollar und ein Netto-Zinsergebnis von 0,2 Millionen Dollar.
- Declared regular common dividend of $0.15 per share, with 16.4% annualized yield
- Sold $1.2 billion UPB of low-balance MSRs to enhance portfolio efficiency
- Plans to internalize management to reduce expenses
- Net servicing income of $8.9 million
- Unrestricted cash of $52.4 million
- GAAP net loss of $1.9 million, or $0.06 per share
- Common book value per share decreased to $4.15
- Net realized loss on RMBS of $1.9 million
- Net unrealized loss of $4.4 million on RMBS
- Net unrealized loss of $3.0 million on derivatives
- Net unrealized loss of $3.3 million on investments in Servicing Related Assets
Insights
Cherry Hill Mortgage Investment 's Q2 2024 results present a mixed picture. The company reported a GAAP net loss of
The company's book value per share decreased to
The company's decision to internalize management could lead to reduced expenses in the future, potentially improving profitability. The sale of
Cherry Hill's Q2 results reveal some concerning trends. The net interest income of only
The company's strategy of using interest rate swaps, TBAs and Treasury futures to mitigate risks is prudent, but the effectiveness of these hedges in a volatile market remains to be seen. The debt-to-equity ratio of 4.9x is relatively high for a mortgage REIT, potentially limiting flexibility in adverse market conditions.
The internalization of management could be a positive long-term move, potentially aligning interests more closely with shareholders and reducing costs. However, investors should monitor the transition closely for any disruptions. The high dividend yield of
Cherry Hill's Q2 results highlight several risk factors. The unrealized losses on RMBS and derivatives underscore the company's exposure to market volatility. While the use of hedging instruments is commendable, the effectiveness of these strategies in protecting book value needs careful evaluation.
The high leverage ratio of 4.9x amplifies both potential gains and losses, increasing the company's vulnerability to market shocks. The unrestricted cash position of
The decision to internalize management could potentially improve risk oversight, but the transition period may introduce operational risks. The high dividend yield of
Second Quarter 2024 and Other Recent Highlights
- In July 2024, the Company’s Board of Directors, based on the recommendation of a special committee comprised of independent and disinterested directors, authorized and approved internalizing management of the Company and directed the Company's officers to take all actions necessary to effect the internalization.
-
GAAP net loss applicable to common stockholders of
$1.9 million $0.06 -
Earnings available for distribution (“EAD”) attributable to common stockholders of
$2.3 million $0.08 -
Common book value per share of
$4.15 -
GAAP net loss applicable to common stockholders, EAD attributable to common stockholders and common book value per share were each impacted by
$0.06 -
Declared regular common dividend of
$0.15 16.4% based on the closing sale price of the Company’s common stock as reported by the NYSE on August 7, 2024. -
As of August 7, 2024, 395,897 shares of
8.250% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock had been repurchased, totaling$9.4 million $40.6 million - Aggregate portfolio leverage stood at 4.9x at June 30, 2024.
-
As of June 30, 2024, the Company had unrestricted cash of
$52.4 million
“We continue to proactively manage our portfolio, navigating spread and volatility risks,” said Jay Lown, President and CEO of Cherry Hill Mortgage Investment Corporation. “Notably, we sold approximately
Operating Results
Cherry Hill reported GAAP net loss applicable to common stockholders for the second quarter of 2024 of
Earnings available for distribution attributable to common stockholders for the second quarter of 2024 were
Three Months Ended |
|||||||
June 30,
|
|
March 31,
|
|||||
(unaudited) |
(unaudited) |
||||||
Income |
|
|
|
|
|
|
|
Interest income |
$ |
13,677 |
$ |
12,741 |
|||
Interest expense |
|
|
13,510 |
|
|
13,648 |
|
Net interest income (expense) |
|
167 |
|
(907) |
|||
Servicing fee income |
|
|
12,349 |
|
|
12,891 |
|
Servicing costs |
3,455 |
2,634 |
|||||
Net servicing income |
|
|
8,894 |
|
|
10,257 |
|
Other income (loss) |
|||||||
Realized loss on RMBS, net |
|
|
(1,859) |
|
|
- |
|
Realized gain on investments in MSRs, net |
741 |
- |
|||||
Realized gain on derivatives, net |
|
|
9,430 |
|
|
6,252 |
|
Unrealized loss on RMBS, measured at fair value through earnings, net |
(4,440) |
(8,321) |
|||||
Unrealized gain (loss) on derivatives, net |
|
|
(3,042) |
|
|
12,324 |
|
Unrealized loss on investments in Servicing Related Assets |
(3,312) |
(3,257) |
|||||
Total Income |
|
|
6,579 |
|
|
16,348 |
|
Expenses |
|||||||
General and administrative expense |
|
|
3,371 |
|
|
1,841 |
|
Management fee to affiliate |
1,760 |
1,748 |
|||||
Total Expenses |
|
|
5,131 |
|
|
3,589 |
|
Income Before Income Taxes |
|
1,448 |
|
12,759 |
|||
Provision for corporate business taxes |
|
|
664 |
|
|
703 |
|
Net Income |
|
784 |
|
12,056 |
|||
Net income allocated to noncontrolling interests in Operating Partnership |
|
|
(19) |
|
|
(235) |
|
Dividends on preferred stock |
(2,555) |
(2,307) |
|||||
Gain (loss) on repurchase and retirement of preferred stock |
|
|
(74) |
|
|
152 |
|
Net Income (Loss) Applicable to Common Stockholders |
$ |
(1,864) |
$ |
9,666 |
|||
Net Income (Loss) Per Share of Common Stock |
|
|
|
|
|
|
|
Basic |
$ |
(0.06) |
$ |
0.32 |
|||
Diluted |
|
$ |
(0.06) |
|
$ |
0.32 |
|
Weighted Average Number of Shares of Common Stock Outstanding |
|||||||
Basic |
|
|
29,978,791 |
|
|
29,978,134 |
|
Diluted |
30,029,960 |
30,019,969 |
|||||
_______________ |
|||||||
Dollar amounts in thousands, except per share amounts. |
|||||||
Net unrealized loss on the Company’s RMBS portfolio classified as available-for-sale that are reported in accumulated other comprehensive loss was approximately
Three Months Ended |
|||||||
June 30,
|
|
March 31,
|
|||||
(unaudited) |
(unaudited) |
||||||
Net Income |
|
$ |
784 |
|
$ |
12,056 |
|
Other comprehensive loss: |
|||||||
Unrealized loss on RMBS, available-for-sale, net |
|
|
(3,734) |
|
|
(6,596) |
|
Net other comprehensive loss |
|
|
(3,734) |
|
(6,596) |
||
Comprehensive income (loss) |
|
$ |
(2,950) |
|
$ |
5,460 |
|
Comprehensive (income) loss attributable to noncontrolling interests in Operating Partnership |
57 |
(106) |
|||||
Dividends on preferred stock |
|
|
(2,555) |
|
|
(2,307) |
|
Gain (loss) on repurchase and retirement of preferred stock |
(74) |
152 |
|||||
Comprehensive income (loss) attributable to common stockholders |
|
$ |
(5,522) |
|
$ |
3,199 |
|
_____________ |
|||||||
Dollar amounts in thousands. |
|||||||
Portfolio Highlights for the Quarter Ended June 30, 2024
The Company realized net servicing fee income of
The RMBS portfolio had a book value and carrying value of approximately
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 June 30, 2024, the Company held interest rate swaps with a notional amount of
As of June 30, 2024, Cherry Hill’s GAAP book value was
Dividends
On June 13, 2024, the Board of Directors declared a quarterly dividend of
Earnings Available for Distribution
Earnings available for distribution (“EAD”) is a non-GAAP financial measure that we define as GAAP net income (loss), excluding realized gain (loss) on RMBS, unrealized gain (loss) on RMBS measured at fair value through earnings, realized and unrealized gain (loss) on derivatives, realized gain (loss) on acquired assets, realized and unrealized gain (loss) on investments in MSRs (net of any estimated MSR amortization) and any tax expense (benefit) on realized and unrealized gain (loss) on MSRs. MSR amortization refers to the portion of the change in fair value of the MSR that is primarily due to the realization of cashflows, runoff resulting from prepayments and an adjustment for any gain or loss on the capital used to purchase the MSR. EAD also includes interest rate swap periodic interest income (expense) and drop income on TBA dollar roll transactions, which are included in “Realized gain (loss) on derivatives, net” on the consolidated statements of income (loss). EAD is adjusted to exclude outstanding LTIP-OP Units in our Operating Partnership and dividends paid on our preferred stock.
EAD is provided for purposes of potential comparability to other issuers that invest in residential mortgage-related assets. The Company believes providing investors with EAD, in addition to related GAAP financial measures, may provide investors some insight into the Company’s ongoing operational performance. However, the concept of EAD does have significant limitations, including the exclusion of realized and unrealized gains (losses), and given the apparent lack of a consistent methodology among issuers for defining EAD, it may not be comparable to similarly titled measures of other issuers, which define EAD differently from us and each other. As a result, EAD should not be considered a substitute for the Company’s GAAP net income (loss) or as a measure of the Company’s liquidity. While EAD is one indicia of the Company’s earnings capacity, it is not the only factor considered in setting a dividend and is not the same as REIT taxable income which is calculated in accordance with the rules of the IRS.
The following table provides a reconciliation of net income to EAD for the three months ended June 30, 2024 and March 31, 2024:
Three Months Ended |
|||||||
June 30,
|
|
March 31,
|
|||||
(unaudited) |
(unaudited) |
||||||
Net Income |
|
$ |
784 |
|
$ |
12,056 |
|
Realized loss on RMBS, net |
|
1,859 |
- |
||||
Realized loss (gain) on derivatives, net ¹ |
|
|
(508) |
|
|
3,109 |
|
Realized gain on investments in MSRs, net |
(741) |
- |
|||||
Unrealized loss on RMBS, measured at fair value through earnings, net |
|
|
4,440 |
|
|
8,321 |
|
Unrealized loss (gain) on derivatives, net |
3,042 |
(12,324) |
|||||
Unrealized gain on investments in MSRs, net of estimated MSR amortization |
|
|
(5,247) |
|
|
(5,937) |
|
Tax expense on realized and unrealized gain on MSRs |
1,325 |
1,199 |
|||||
Total EAD: |
|
$ |
4,954 |
|
$ |
6,424 |
|
EAD attributable to noncontrolling interests in Operating Partnership |
(100) |
(125) |
|||||
Dividends on preferred stock |
|
|
(2,555) |
|
|
(2,307) |
|
EAD Attributable to Common Stockholders |
$ |
2,299 |
$ |
3,992 |
|||
EAD Attributable to Common Stockholders, per Diluted Share |
|
$ |
0.08 |
|
$ |
0.13 |
|
GAAP Net Income (Loss) Per Share of Common Stock, per Diluted Share |
$ |
(0.06) |
$ |
0.32 |
|||
_________ |
|||||||
Dollar amounts in thousands, except per share amounts. |
|||||||
|
|||||||
Additional Information
Additional information regarding Cherry Hill’s financial condition and results of operations can be found in its Annual Report on Form 10-Q for the quarter ended June 30, 2024 filed with the Securities and Exchange Commission on August 8, 2024. In addition, an investor presentation with supplemental information regarding Cherry Hill, its business and its financial condition as of June 30, 2024 and its results of operations for the second quarter 2024 has been posted to the Investor Relations section of Cherry Hill’s website, www.chmireit.com. Cherry Hill will discuss the investor presentation on the conference call referenced below.
Webcast and Conference Call
The Company’s management will host a conference call today at 5:00 pm Eastern Time. A copy of this earnings release and the investor presentation referenced above will be posted to the Investor Relations section of Cherry Hill’s website, www.chmireit.com. All interested parties are welcome to participate on the live call.
A live webcast of the conference call will be available in the investor relations section of the Company’s website at www.chmireit.com. To listen to the live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software. An online archive of the webcast will be available on the Company’s website for one year following the call.
Participants may register for the conference call here. Once registered, dial-in information for the call will be made available.
About Cherry Hill Mortgage Investment Corporation
Cherry Hill Mortgage Investment Corporation is a real estate finance company that acquires, invests in and manages residential mortgage assets in
Forward-Looking Statements
This press release contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws, including, among others, statements relating to the Company’s long-term growth opportunities and strategies, the Company's ability to complete the internalization and achieve cost savings resulting from being an internally managed company, the Company's ability to expand its market opportunities and create its own Excess MSRs and its ability to generate sustainable and attractive risk-adjusted returns for stockholders. These forward-looking statements are based upon the Company’s present expectations, but these statements are not guaranteed to occur. For a description of factors that may cause the Company's actual results or performance to differ from its forward-looking statements, please review the information under the heading “Risk Factors” included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, and other documents filed by the Company with the Securities and Exchange Commission.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240808415298/en/
Cherry Hill Mortgage Investment Corporation
Investor Relations
(877) 870-7005
InvestorRelations@chmireit.com
Source: Cherry Hill Mortgage Investment Corporation
FAQ
What was Cherry Hill Mortgage Investment 's (CHMI) earnings per share for Q2 2024?
What was CHMI's book value per share as of June 30, 2024?
What dividend did Cherry Hill Mortgage Investment (CHMI) declare for Q2 2024?
What was Cherry Hill Mortgage Investment 's (CHMI) net servicing income for Q2 2024?
What strategic move did Cherry Hill Mortgage Investment (CHMI) make regarding its MSR portfolio in Q2 2024?
