Cherry Hill Mortgage Investment Corporation Announces Second Quarter 2017 Results
Second Quarter 2017 Highlights and Subsequent Events
-
GAAP net loss applicable to common stockholders of
$1.5 million , or$0.12 per diluted share -
Core earnings of
$6.7 million , or$0.53 per share -
Book value of
$19.94 per share atJune 30, 2017 , a 0.8% decrease net of the Company’s second quarter dividend -
Declared regular dividend of
$0.49 per share; annualized dividend yield at market close was 10.2% atAugust 7, 2017 -
Aggregate portfolio leverage stood at 4.82x at
June 30, 2017 -
Entered into
$20 million MSR term loan -
Subsequent to
June 30, 2017 , entered into a subservicing agreement and flow MSR purchase agreement with new partner that allows the purchase of up to$2.0 billion a month in conventional MSR purchases over the next 24 months
“The flow and subservicing agreements fulfill two strategic goals,”
stated
Operating Results
Cherry Hill reported a GAAP net loss applicable to common stockholders
for the second quarter of 2017 of
Core earnings for the second quarter of 2017 were
| Three Months Ended June 30, | ||||||
| 2017 | 2016 | |||||
| Income | ||||||
| Interest income | $ | 10,002 | $ | 7,135 | ||
| Interest expense | 4,292 | 1,885 | ||||
| Net interest income | 5,710 | 5,250 | ||||
| Servicing fee income | 5,493 | 1,574 | ||||
| Servicing costs | 991 | 501 | ||||
| Net servicing income (loss) | 4,502 | 1,073 | ||||
| Other income (loss) | ||||||
| Realized gain (loss) on RMBS, net | (77) | 235 | ||||
| Realized gain (loss) on investments in Excess MSRs, net | - | - | ||||
| Realized gain (loss) on derivatives, net | (1,797) | (299) | ||||
| Unrealized gain (loss) on derivatives, net | (4,633) | (1,228) | ||||
| Unrealized gain (loss) on investments in Excess MSRs | - | (149) | ||||
| Unrealized gain (loss) on investments in MSRs | (4,507) | (3,076) | ||||
| Total Income (Loss) | (802) | 1,806 | ||||
| Expenses | ||||||
| General and administrative expense | 1,045 | 822 | ||||
| Management fee to affiliate | 1,162 | 690 | ||||
| Total Expenses | 2,207 | 1,512 | ||||
| Income (Loss) Before Income Taxes | (3,009) | 294 | ||||
| (Benefit from) provision for corporate business taxes | (1,344) | 10 | ||||
| Net Income (Loss) | (1,665) | 284 | ||||
| Net (income) loss allocated to noncontrolling interests in Operating Partnership | 119 | (1) | ||||
| Net Income (Loss) Applicable to Common Stockholders | $ | (1,546) | $ | 283 | ||
| Net income (Loss) Per Share of Common Stock | ||||||
| Basic | $ | (0.12) | $ | 0.04 | ||
| Diluted | $ | (0.12) | $ | 0.04 | ||
| Weighted Average Number of Shares of Common Stock Outstanding | ||||||
| Basic | 12,695,090 | 7,509,543 | ||||
| Diluted | 12,701,715 | 7,520,616 | ||||
| _______________ |
| Unaudited. 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 second
quarter 2017 was approximately
| Three Months Ended June 30, | ||||||
| 2017 | 2016 | |||||
| Net income (loss) | $ | (1,665) | $ | 284 | ||
| Other comprehensive income (loss): | ||||||
| Net unrealized gain (loss) on RMBS | 5,810 | 4,730 | ||||
| Reclassification of net realized (gain) loss on RMBS included in earnings | 77 | (235) | ||||
| Other comprehensive income (loss) | 5,887 | 4,495 | ||||
| Comprehensive income (loss) | $ | 4,222 | $ | 4,779 | ||
| Comprehensive income (loss) attributable to noncontrolling interests in Operating Partnership | (43) | 68 | ||||
| Comprehensive income (loss) attributable to common stockholders | $ | 4,265 | $ | 4,711 | ||
| _______________ |
| Unaudited. 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 value of approximately
In order to mitigate duration risk and interest rate risk associated
with the Company’s RMBS, Cherry Hill used interest rate swaps, swaptions
and TBAs. At quarter end of
As of
Dividend
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, realized and unrealized (gain)
loss on investments in Excess MSRs and MSRs, realized and unrealized
gain (loss) on derivatives, and changes in fair value of MSRs primarily
due to realization of expected cashflows (runoff). Core earnings are
adjusted to exclude outstanding LTIP-OP units in our
The following table provides a reconciliation of net income to core
earnings for the three months ended
|
Three Months Ended June 30, |
||||||
| 2017 |
2016(1) |
|||||
| Net income (loss) | $ | (1,665) | $ | 284 | ||
| Realized (gain) loss on RMBS, net | 77 | (235) | ||||
| Realized (gain) loss on investments in Excess MSRs, net | - | - | ||||
| Realized (gain) loss on derivatives, net | 1,797 | 299 | ||||
| Unrealized (gain) loss on derivatives, net | 4,633 | 1,228 | ||||
| Unrealized (gain) loss on investments in Excess MSRs | - | 149 | ||||
| Unrealized (gain) loss on investments in MSRs | 4,507 | 3,076 | ||||
| Tax (benefit) expense on unrealized (gain) loss on MSRs | (1,491) | 96 | ||||
| Estimated "catch up" premium amortization (benefit) cost | - | 134 | ||||
| Changes due to realization of expected cash flows | (1,803) | (990) | ||||
| Yield maintenance income | 750 | - | ||||
| Total core earnings: | $ | 6,805 | $ | 4,041 | ||
| Core earnings attributable to noncontrolling interests in Operating Partnership | (75) | (59) | ||||
| Core Earnings Attributable to Common Stockholders | $ | 6,730 | $ | 3,982 | ||
| Core Earnings Attributable to Common Stockholders, per Share | $ | 0.53 | $ | 0.53 | ||
| GAAP Net income (Loss) Per Share of Common Stock | $ | (0.12) | $ | 0.04 | ||
| __________ |
| Unaudited. Dollar amounts in thousands, except per share amounts. Certain prior period amounts have been reclassified to conform to current period presentation. |
| (1)Reflects revised method of calculating MSR amortization. |
Additional Information
Additional information regarding Cherry Hill’s financial condition and
results of operations can be found in its Quarterly Report on Form 10-Q
for the quarter ended
Webcast and Conference Call
The Company’s management will host a conference call today at
The conference call may be accessed by dialing 1-877-407-9039 (from within the U.S.) or 1-201-689-8470 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “Cherry Hill Second Quarter 2017 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