Cherry Hill Mortgage Investment ((CHMI)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Cherry Hill Mortgage Investment Corporation’s recent earnings call painted a generally positive picture, with highlights of increased GAAP net income, book value, and promising strategic partnerships. Despite these positive notes, the company acknowledged some challenges, particularly with rising operating expenses and servicing costs, which tempered the overall enthusiasm.
GAAP Net Income
Cherry Hill Mortgage reported a GAAP net income applicable to common stockholders of $0.05 per diluted share, alongside a comprehensive income of $4.5 million or $0.12 per diluted share. This performance underscores the company’s ability to generate income in a challenging market environment.
Book Value Increase
The company saw a slight increase in its book value per common share, rising to $3.36 from $3.34 as of June 30, 2025. This increment, although modest, reflects the company’s steady financial health and resilience.
Strategic Partnership with Real Genius
Cherry Hill Mortgage’s partnership with Real Genius LLC, a digital mortgage technology company, is gaining traction. This collaboration is expected to drive growth, particularly as mortgage rates decline, offering a promising avenue for future expansion.
Dividend Adjustments
In a strategic move, the company adjusted its dividend to $0.10 per share. This decision aligns with its earnings power and reflects a cautious approach to maintaining financial stability while rewarding shareholders.
Portfolio Performance
The company’s MSR portfolio had an unpaid principal balance (UPB) of $16.2 billion, with a market value of approximately $219 million. Additionally, the RMBS portfolio’s net interest spread increased to 2.87%, indicating improved portfolio performance.
Operating Expenses Increase
Operating expenses rose to $3.8 million for the quarter, driven by personnel changes and professional fees. This increase highlights the company’s ongoing investments in its workforce and operations.
Servicing Costs
There was a sequential rise in servicing costs, attributed to the absence of deboarding fee reimbursement seen in the previous quarter. This increase is a point of concern that the company will need to address moving forward.
Forward-Looking Guidance
Cherry Hill Mortgage’s management provided forward-looking guidance, emphasizing their strategic positioning to benefit from declining interest rates and lower funding costs. They expect agency prepayment speeds to increase and highlighted the growth potential from their partnership with Real Genius LLC, especially as 30-year mortgage rates hover around 6%.
In conclusion, Cherry Hill Mortgage Investment Corporation’s earnings call reflected a cautiously optimistic outlook, with positive financial metrics and strategic initiatives offset by rising costs. Investors will be keenly watching how the company navigates these challenges while capitalizing on growth opportunities in the evolving mortgage market.