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

1Key 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.

2Strategic 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.

3Forward 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%.

4Bad 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.

5Notable 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.