Cherry Hill Mortgage Investment Corporation Announces Third Quarter 2018 Results
Third Quarter 2018 Highlights
-
GAAP net income applicable to common stockholders of
$25.8 million , or$1.62 per diluted share -
Core earnings attributable to common stockholders of
$8.8 million , or$0.55 per share -
Book value of
$19.62 per share atSeptember 30, 2018 , a 1.3% improvement from$19.36 atJune 30, 2018 , net of the Company’s third quarter dividend -
Declared regular common dividend of
$0.49 per share; annualized common dividend yield at market close was 10.8% atNovember 6, 2018 -
Aggregate portfolio leverage stood at 4.7x at
September 30, 2018 -
Acquired approximately
$3.9 billion in UPB of MSRs during the quarter
“I am pleased with our performance this quarter, and happy to report
both strong core earnings and an increase to our book value,” said
Operating Results
Cherry Hill reported GAAP net income applicable to common stockholders
for the third quarter of 2018 of
Core earnings attributable to common stockholders for the third quarter
of 2018 were
| Three Months Ended September 30, |
||||||||
| 2018 | 2017 | |||||||
| (unaudited) | (unaudited) | |||||||
| Income | ||||||||
| Interest income | $ | 15,323 | $ | 11,932 | ||||
| Interest expense | 9,257 | 6,096 | ||||||
| Net interest income | 6,066 | 5,836 | ||||||
| Servicing fee income | 14,017 | 6,307 | ||||||
| Servicing costs | 2,981 | 1,626 | ||||||
| Net servicing income | 11,036 | 4,681 | ||||||
| Other income (loss) | ||||||||
| Realized loss on RMBS, net | (428 | ) | (169 | ) | ||||
| Realized loss on derivatives, net | (707 | ) | (1,480 | ) | ||||
| Unrealized gain on derivatives, net | 8,807 | 1,684 | ||||||
| Unrealized gain (loss) on investments in MSRs | 6,218 | (2,334 | ) | |||||
| Total Income | 30,992 | 8,218 | ||||||
| Expenses | ||||||||
| General and administrative expense | 1,165 | 948 | ||||||
| Management fee to affiliate | 1,599 | 948 | ||||||
| Total Expenses | 2,764 | 1,896 | ||||||
| Income Before Income Taxes | 28,228 | 6,322 | ||||||
| Provision for corporate business taxes | 729 | (537 | ) | |||||
| Net Income | 27,499 | 6,859 | ||||||
| Net loss allocated to noncontrolling interests in Operating Partnership | (364 | ) | (93 | ) | ||||
| Dividends on preferred stock | 1,372 | 593 | ||||||
| Net Income Applicable to Common Stockholders | $ | 25,763 | $ | 6,173 | ||||
| Net Income Per Share of Common Stock | ||||||||
| Basic | $ | 1.62 | $ | 0.49 | ||||
| Diluted | $ | 1.62 | $ | 0.49 | ||||
| Weighted Average Number of Shares of Common Stock Outstanding | ||||||||
| Basic | 15,864,774 | 12,703,577 | ||||||
| Diluted | 15,873,030 | 12,711,776 | ||||||
_______________
Dollar amounts in thousands, except per share amounts. Certain prior period amounts have been reclassified to conform to current period presentation.
Net unrealized loss on the Company’s RMBS portfolio for the third
quarter 2018 was approximately
| Three Months Ended September 30, |
|||||||
| 2018 | 2017 | ||||||
| (unaudited) | (unaudited) | ||||||
| Net income | $ | 27,499 | $ | 6,859 | |||
| Other comprehensive income: | |||||||
| Net unrealized gain (loss) on RMBS | (13,656 | ) | 3,405 | ||||
| Reclassification of net realized gain on RMBS included in earnings | 428 | 169 | |||||
| Other comprehensive income (loss) | (13,228 | ) | 3,574 | ||||
| Comprehensive income | $ | 14,271 | $ | 10,433 | |||
| Comprehensive income attributable to noncontrolling interests in Operating Partnership | 187 | 142 | |||||
| Dividends on preferred stock | 1,372 | 593 | |||||
| Comprehensive income attributable to common stockholders | $ | 12,712 | $ | 9,698 | |||
_______________
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
In order to mitigate duration risk and interest rate risk associated
with the Company’s RMBS, 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, realized and unrealized (gain)
loss on investments in 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 is adjusted to
exclude outstanding LTIP-OP units in the Company’s
The following table provides a reconciliation of net income to core
earnings for the three months ended
| Three Months Ended September 30, | ||||||||
| 2018 | 2017 | |||||||
| (unaudited) | (unaudited) | |||||||
| Net Income | $ | 27,499 | $ | 6,859 | ||||
| Realized loss on RMBS, net | 428 | 169 | ||||||
| Realized loss on derivatives, net | 707 | 1,480 | ||||||
| Unrealized gain on derivatives, net | (8,807 | ) | (1,684 | ) | ||||
| Unrealized loss (gain) on investments in MSRs | (6,218 | ) | 2,334 | |||||
| Tax (benefit) expense on unrealized (loss) gain on MSRs | 725 | (643 | ) | |||||
| Changes due to realization of expected cash flows | (4,042 | ) | (1,975 | ) | ||||
| Yield maintenance income | - | 750 | ||||||
| Total core earnings: | $ | 10,292 | $ | 7,290 | ||||
| Core earnings attributable to noncontrolling interests in Operating Partnership | (136 | ) | (100 | ) | ||||
| Dividends on preferred stock | 1,372 | 593 | ||||||
| Core Earnings Attributable to Common Stockholders | $ | 8,784 | $ | 6,597 | ||||
| Core Earnings Attributable to Common Stockholders, per Share | $ | 0.55 | $ | 0.52 | ||||
| GAAP Net Income Per Share of Common Stock | $ | 1.62 | $ | 0.49 | ||||
__________
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 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 1-855-327-6838 (from within the U.S.) or 1-631-891-4304 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “Cherry Hill Third Quarter 2018 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
View source version on businesswire.com: https://www.businesswire.com/news/home/20181107005888/en/
Source:
Cherry Hill Mortgage Investment Corporation
Investor Relations
(877)
870-7005
InvestorRelations@CHMIreit.com