CHMI-PA — Cherry Hill Mortgage Investment Corporation

Cherry Hill Mortgage Investment Corporation (CHMI-PA) Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• GAAP Net Loss: $2 million, or $0.05 per diluted share.
• Comprehensive Loss: $4.4 million, or $0.12 per diluted share.
• Earnings Available for Distribution (EAD): $5.3 million, or $0.14 per share.
• Book Value per Share: Decreased to $3.23 from $3.44 at the end of Q4 2025, a decline of 6.1%.
• Economic Return: Negative 3.2% for the quarter.
• Net Interest Margin (NIM): Improved to 2.9%, up from the previous quarter, driven by reduced interest expenses.
• Financial Leverage: Remained stable at 5.5x.
• Unrestricted Cash: $47 million on the balance sheet.

2. Strategic Updates and Business Highlights:

• The company has focused on managing interest rate exposure amid geopolitical volatility, particularly due to the war with Iran, which impacted market conditions.
• A strategic partnership with Real Genius, a digital mortgage technology firm, is progressing as planned.
• The MSR portfolio (Mortgage Servicing Rights) had a UPB of $15.6 billion, with a market value of approximately $213 million, representing 41% of equity capital.

3. Forward Guidance and Outlook:

• The company anticipates continued market volatility in the near term, particularly until geopolitical tensions stabilize.
• Management expressed cautious optimism about potential improvements in mortgage spreads as the geopolitical situation resolves.
• They expect to maintain a proactive approach in managing the portfolio and exploring additional investment opportunities.

4. Bad News, Challenges, or Points of Concern:

• The geopolitical situation has created significant market volatility, leading to a decline in book value and economic returns.
• The company experienced a negative economic return and a decrease in book value, indicating challenges in the current market environment.
• The MSR portfolio's recapture rate remains low, and the refinancing incentive is minimal due to current mortgage rates.
• There are concerns regarding the potential for further volatility and uncertainty in the market, which could impact future performance.

5. Notable Q&A Insights:

• Management indicated that any new investment opportunities would be funded by reallocating from other asset classes, emphasizing a careful evaluation of risk-return profiles.
• They noted that current mortgage spreads are attractive, with potential returns on RMBS projected between 15% to mid-teens, and MSR returns between 10% to 12% on a levered basis.
• Book value per share saw a nearly 2% increase from March 31, 2026, as of April 30, 2026, indicating a slight recovery post-quarter end.
• Future volatility is expected to remain elevated until geopolitical tensions are resolved, with management monitoring the situation closely.

This summary encapsulates the key financial metrics, strategic initiatives, outlook, challenges, and insights from the Q&A session, providing a balanced view of Cherry Hill Mortgage Investment Corporation's current status and future direction.