Cherry Hill Mortgage Investment Corporation Announces First Quarter 2019 Results
First Quarter 2019 Highlights
-
GAAP net loss applicable to common stockholders of
$22.6 million , or$1.36 per share -
Core earnings attributable to common stockholders of
$10.0 million , or$0.60 per share -
Book value of
$17.54 per share atMarch 31, 2019 , a 0.2% decline fromDecember 31, 2018 , net of the Company’s first quarter dividend -
Declared regular common dividend of
$0.49 per share; annualized common dividend yield at market close was 11.5% atMay 8, 2019 -
Aggregate portfolio leverage stood at 4.7x at
March 31, 2019 - Increased UPB of MSR portfolio by approximately 11% during the quarter
-
In February, the Company completed an offering of 2,000,000 shares of
its 8.250% Series B Fixed-to-Floating Rate Cumulative Redeemable
Preferred Stock, resulting in net proceeds of approximately
$48.4 million , before offering expenses
“We opened 2019 with another quarter of strong core earnings, driven
primarily by the asset composition of our portfolio,” said
Operating Results
Cherry Hill reported GAAP net loss applicable to common stockholders for
the first quarter of 2019 of
Core earnings attributable to common stockholders for the first quarter
of 2019 were
Three Months Ended March 31, | |||||||||
2019 | 2018 | ||||||||
(unaudited) | (unaudited) | ||||||||
Income | |||||||||
Interest income | $ | 16,969 | $ | 13,415 | |||||
Interest expense | 10,744 | 7,543 | |||||||
Net interest income | 6,225 | 5,872 | |||||||
Servicing fee income | 17,188 | 8,650 | |||||||
Servicing costs | 3,821 | 1,712 | |||||||
Net servicing income | 13,367 | 6,938 | |||||||
Other income (loss) | |||||||||
Realized loss on RMBS, net | - | (4,881) | |||||||
Realized gain (loss) on derivatives, net | (7,476) | 13 | |||||||
Unrealized gain (loss) on derivatives, net | (8,272) | 19,626 | |||||||
Unrealized gain (loss) on investments in MSRs | (27,175) | 12,498 | |||||||
Total Income (Loss) | (23,331) | 40,066 | |||||||
Expenses | |||||||||
General and administrative expense | 963 | 877 | |||||||
Management fee to affiliate | 1,809 | 1,315 | |||||||
Total Expenses | 2,772 | 2,192 | |||||||
Income (Loss) Before Income Taxes | (26,103) | 37,874 | |||||||
Provision for (Benefit from) corporate business taxes | (4,965) | 2,635 | |||||||
Net Income (Loss) | (21,138) | 35,239 | |||||||
Net (income) loss allocated to noncontrolling interests in Operating Partnership | 349 | (456) | |||||||
Dividends on preferred stock | 1,841 | 1,213 | |||||||
Net Income (Loss) Applicable to Common Stockholders | $ | (22,630) | $ | 33,570 | |||||
Net Income (Loss) Per Share of Common Stock | |||||||||
Basic | $ | (1.36) | $ | 2.64 | |||||
Diluted | $ | (1.36) | $ | 2.64 | |||||
Weighted Average Number of Shares of Common Stock Outstanding | |||||||||
Basic | 16,646,114 | 12,713,265 | |||||||
Diluted | 16,654,370 | 12,721,464 |
_______________ |
Dollar amounts in thousands, except per share amounts. Certain prior period amounts have been reclassified to conform to current period presentation. |
|
Net unrealized gain on the Company’s RMBS portfolio for the first
quarter 2019 was approximately
Three Months Ended |
|||||||||||
2019 | 2018 | ||||||||||
(unaudited) | (unaudited) | ||||||||||
Net Income (Loss) | $ | (21,138) | $ | 35,239 | |||||||
Other comprehensive income: | |||||||||||
Net unrealized gain (loss) on RMBS | 31,981 | (35,924) | |||||||||
Reclassification of net realized gain on RMBS included in earnings | - | 4,881 | |||||||||
Other comprehensive income (loss) | 31,981 | (31,043) | |||||||||
Comprehensive income | $ | 10,843 | $ | 4,196 | |||||||
Comprehensive income attributable to noncontrolling interests in Operating Partnership | 179 | 54 | |||||||||
Dividends on preferred stock | 1,841 | 1,213 | |||||||||
Comprehensive income attributable to common stockholders | $ | 8,823 | $ | 2,929 |
_______________ |
Dollar amounts in thousands. Certain prior period amounts have been reclassified to conform to current period presentation. |
Portfolio Highlights for the Quarter Ended
The Company realized servicing fee income of
The RMBS portfolio had a book and carrying value of approximately
In order to mitigate duration risk and interest rate risk associated
with the Company’s RMBS and MSRs, Cherry Hill used interest rate swaps,
swaptions, TBAs and Treasury futures. At quarter end
As of
Dividends
On
Core Earnings
Core earnings is a non-GAAP financial measure and is defined by the
Company as GAAP net income (loss) applicable to common stockholders,
excluding realized gain (loss) on RMBS, unrealized (gain) loss on
investments in MSRs, and realized and unrealized gain (loss) on
derivatives. Core earnings is adjusted to exclude outstanding LTIP-OP
Units in our
The following table provides a reconciliation of net income (loss) to
core earnings for the three months ended
Three Months Ended March 31, | ||||||||||
2019 | 2018 | |||||||||
(unaudited) | (unaudited) | |||||||||
Net Income (Loss) | $ | (21,138) | $ | 35,239 | ||||||
Realized loss on RMBS, net | - | 4,881 | ||||||||
Realized loss (gain) on derivatives, net | 7,476 | (13) | ||||||||
Unrealized loss (gain) on derivatives, net | 8,272 | (19,626) | ||||||||
Unrealized loss (gain) on investments in MSRs | 27,175 | (12,498) | ||||||||
Tax (benefit) expense on unrealized (loss) gain on MSRs | (4,739) | 2,444 | ||||||||
Changes due to realization of expected cash flows | (5,027) | (2,493) | ||||||||
Total core earnings: | $ | 12,019 | $ | 7,934 | ||||||
Core earnings attributable to noncontrolling interests in Operating Partnership | (198) | (103) | ||||||||
Dividends on preferred stock | 1,841 | 1,213 | ||||||||
Core Earnings Attributable to Common Stockholders | $ | 9,980 | $ | 6,618 | ||||||
Core Earnings Attributable to Common Stockholders, per Share | $ | 0.60 | $ | 0.52 | ||||||
GAAP Net Income (Loss) Per Share of Common Stock | $ | (1.36) | $ | 2.64 |
__________ |
Dollar amounts in thousands, except per share amounts. Certain prior period amounts have been reclassified to conform to current period presentation. |
Additional Information
Additional information regarding Cherry Hill’s financial condition and
results of operations can be found in its Annual Report on Form 10-K for
the year ended
Webcast and Conference Call
The Company’s management will host a conference call today at
The conference call may be accessed by dialing 1-877-407-9716 (from within the U.S.) or 1-201-493-6779 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “Cherry Hill First Quarter 2019 Earnings Call.”
A telephonic replay of the conference call will also be available two
hours following the completion of the call through
About
Forward-Looking Statements
This press release contains forward looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 and
other federal securities laws, including, among others, statements
relating to the Company’s long-term growth opportunities and strategies,
expand its market opportunities and create its own Excess MSRs and its
ability to generate sustainable and attractive risk-adjusted returns for
stockholders. These forward looking statements are based upon the
Company’s present expectations, but these statements are not guaranteed
to occur. For a description of factors that may cause the Company's
actual results or performance to differ from its forward-looking
statements, please review the information under the heading “Risk
Factors” included in the Company's Annual Report on Form 10-K for the
year ended
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Source:
Cherry Hill Mortgage Investment Corporation
Investor Relations
(877)
870-7005
InvestorRelations@chmireit.com