Cherry Hill Mortgage Investment Corporation (CHMI) Q3 2025 Earnings Call Summary

1Key Financial Results and Metrics

GAAP Net Income: $2 million, or $0.05 per diluted share.

Comprehensive Income: $4.5 million, or $0.12 per diluted share.

Earnings Available for Distribution (EAD): $3.3 million, or $0.09 per share.

Book Value per Share: Increased to $3.36 from $3.34 in Q2 2025.

Net Asset Value (NAV): Up approximately $1.1 million (0.5%) from June 30, 2025.

Financial Leverage: Maintained at 5.3x.

Unrestricted Cash: $55 million at quarter-end.

2Strategic Updates and Business Highlights

Dividend Adjustment: The Board declared a dividend of $0.10 per share, viewed as more sustainable and aligned with earnings power.

Partnership with Real Genius LLC: Progressing positively; the partnership aims to enhance digital mortgage technology and improve customer experience.

Portfolio Adjustments: Shifted RMBS portfolio to capitalize on lower interest rates, focusing on lower coupon mortgages due to increased demand for duration.

3Forward Guidance and Outlook

Economic Monitoring: Management is closely observing the economic landscape, particularly the Fed's monetary policy and its impact on mortgage rates.

Growth Opportunities: Plans to seek additional investment opportunities that are accretive to the business.

Expectations for Prepayment Speeds: Anticipated increase in agency prepayment speeds as mortgage rates fluctuate, particularly for higher coupon mortgages.

4Challenges and Points of Concern

Expense Increases: General and administrative expenses rose by 12.5% sequentially, attributed to personnel changes and professional fees. Future reductions in these costs are anticipated.

Servicing Costs: Noted an increase in servicing costs due to the absence of a deboarding fee that had previously lowered expenses.

Low Recapture Rates: The MSR portfolio is expected to maintain low recapture rates and prepayment speeds in the near term, limiting growth potential.

5Notable Q&A Insights

Future Partnerships: Management expressed openness to exploring additional strategic partnerships if they align with the company’s skill set and are deemed accretive.

Expense Management: Apeksha Patel indicated that the rise in G&A and compensation costs was due to recent personnel changes, with expectations for these costs to decrease moving forward.

Book Value Update: As of October 31, 2025, book value per share was reported to be up 1.2% from September 30, 2025, prior to any fourth-quarter dividend accrual. Overall, CHMI's Q3 2025 results reflect a stable financial position with strategic adjustments in response to market conditions, while also highlighting areas of concern regarding expenses and prepayment rates.