Cherry Hill Mortgage Investment Corporation (CHMI) Q3 2024 earnings summary

Executive summary

• GAAP net loss applicable to common stockholders was $14.8 million, or $0.49 per share, for Q3 2024, with book value per share at $4.02, down from $4.15 in the prior quarter.

• Earnings available for distribution (EAD) were $2.5 million, or $0.08 per share, impacted by special committee expenses.

• Portfolio composition remained stable, with agency RMBS and MSR each representing about 42% of equity capital; focus remains on pairing MSRs with agency RMBS for risk-adjusted returns.

• Management is closely monitoring macroeconomic and political factors, including the U.S. presidential election and Fed actions, and expects volatility to moderate as 2025 approaches.

• Declared a regular common dividend of $0.15 per share, with an annualized yield of 18.6%.

Financial highlights

• Net loss applicable to common stockholders was $14.8 million for Q3 2024; comprehensive income attributable to common stockholders was $1.3 million, or $0.04 per share.

• Book value per share declined from $4.15 to $4.02 sequentially.

• EAD attributable to common stockholders was $2.5 million, or $0.08 per diluted share.

• Aggregate portfolio leverage was 5.3x at quarter-end, with $50 million in unrestricted cash.

• Net interest spread for the RMBS portfolio was 3.22%.

Outlook and guidance

• Management expects at least one more Fed rate cut in 2024 and is positioning the portfolio for further easing.

• Capital deployment will continue to favor agency RMBS due to its superior risk-adjusted return profile.

• Book value per share is estimated to be down 4%-5% from quarter-end as of last Friday, before any fourth quarter dividend accrual.

• Forward-looking statements highlight risks from interest rates, prepayment rates, and loan losses.

• Management expects sufficient liquidity to meet obligations over the next twelve months.