CHMI-PB — Cherry Hill Mortgage Investment Corporation

Cherry Hill Mortgage Investment Corporation (CHMI-PB) 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 Common Share: Decreased to $3.23 from $3.44 at year-end 2025, a decline of 6.1%.
• Economic Return: Negative 3.2% for the quarter.
• NAV: Down $7.9 million or 3.3% relative to December 31, 2025.
• Financial Leverage: Consistent at 5.5x.
• Unrestricted Cash: $47 million on the balance sheet.

2. Strategic Updates and Business Highlights

• The company has been actively managing interest rate exposure, which helped mitigate impacts on book value amid geopolitical volatility.
• Strategic partnership with Real Genius, a digital mortgage technology firm, is progressing as planned.
• The MSR portfolio had a UPB of $15.6 billion with a market value of approximately $213 million, representing 41% of equity capital.
• RMBS portfolio accounted for approximately 42% of equity capital, with a net interest margin (NIM) of 2.9%, improved from the previous quarter due to reduced interest expenses.

3. Forward Guidance and Outlook

• Expect continued market volatility in the near term due to geopolitical tensions, particularly in the Middle East.
• Management remains focused on proactive portfolio management and seeking accretive investment opportunities.
• If stabilization occurs, potential returns for RMBS could range from mid-teens to high-teens on a levered basis, while MSR returns could be between 10% to 12%.

4. Bad News, Challenges, or Points of Concern

• The geopolitical situation has led to increased market volatility, impacting mortgage spreads and overall performance.
• The decline in book value and economic return indicates challenges in maintaining shareholder value amidst external pressures.
• The recapture rate for the MSR portfolio remains low due to minimal refinancing incentives, which could limit future earnings potential.
• Ongoing geopolitical risks may continue to affect market stability and investor sentiment.

5. Notable Q&A Insights

• Management indicated that any new investment opportunities would be funded by reallocating from existing asset classes, emphasizing a careful evaluation of risk-return profiles.
• Questions about future return profiles highlighted that if stabilization persists, there could be positive impacts on portfolio returns, but volatility remains a concern.
• As of April 30, book value per share had increased nearly 2% from March 31, indicating some recovery in value post-quarter-end, despite ongoing market challenges.

This summary encapsulates the key financial metrics, strategic initiatives, forward guidance, challenges, and insights from the Q&A session, providing a comprehensive overview of Cherry Hill Mortgage Investment Corporation's performance and outlook for Q1 2026.