CHMI-PA — Cherry Hill Mortgage Investment Corporation

Cherry Hill Mortgage Investment Corporation (CHMI-PA) Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• GAAP Net Income: $5.3 million, or $0.14 per diluted share.
• Comprehensive Income: $6.5 million, or $0.18 per diluted share.
• Earnings Available for Distribution (EAD): $3.9 million, or $0.11 per share.
• Book Value per Common Share: Increased to $3.44 from $3.36 in Q3 2025.
• Net Interest Spread for RMBS Portfolio: 2.52%, lower than the previous quarter.
• Financial Leverage: Maintained at 5.4x.
• Unrestricted Cash: $55 million on the balance sheet.

2. Strategic Updates and Business Highlights

• The company’s portfolio performance benefited from tighter mortgage spreads and a steeper yield curve.
• Continued growth in the strategic partnership with Real Genius LLC, a digital mortgage technology company, which is expected to enhance operational efficiency and customer experience.
• The MSR portfolio had a UPB of $15.9 billion, with a market value of approximately $215 million, representing 40% of equity capital.
• The RMBS portfolio accounted for approximately 79% of investable assets.

3. Forward Guidance and Outlook

• Management remains optimistic about potential Fed rate cuts and their impact on mortgage rates, which could stimulate growth for Real Genius and the broader mortgage market.
• The company plans to seek additional investment opportunities to enhance business growth while maintaining strong liquidity and prudent leverage.
• Anticipates a modest increase in book value of about 1% by March 31, 2026.

4. Bad News, Challenges, or Points of Concern

• The net interest spread decreased due to lower dollar roll income and interest earned on payer swaps.
• The MSR portfolio's recapture rate remains low, with expectations for continued low prepayment speeds given current mortgage rate levels.
• Market conditions have shown signs of volatility, with spreads tightening in January but widening again in February, indicating potential instability.
• The overall mortgage universe is only about 19% refinanceable at current rates, limiting growth potential.

5. Notable Q&A Insights

• Management noted a recent tightening of spreads but acknowledged a subsequent widening, indicating a more cautious market outlook.
• The company is monitoring the performance of its RMBS portfolio, with expectations for CPR to normalize around 20% if mortgage rates decline to 5.5%.
• There was discussion about share buybacks, with management indicating they are focused on growth and stock price recovery rather than immediate repurchases.
• A significant drop in general and administrative expenses (30%) was attributed to nonrecurring costs from the previous quarter.

This summary captures the essential elements of Cherry Hill Mortgage Investment Corporation's Q4 2025 earnings call, highlighting both the positive aspects of performance and the challenges faced by the company.