Cherry Hill Mortgage Investment Corporation Announces Second Quarter 2015 Results
Second Quarter 2015 Highlights
-
Increased book value per share by 0.9% to
$20.96 as ofJune 30, 2015 from$20.78 as ofMarch 31, 2015 -
Generated GAAP net income applicable to common stockholders of
$11.2 million , or$1.49 per share for second quarter 2015 -
CHMI Insurance Company, LLC , the Company’s captive insurance subsidiary was admitted as a member of theFederal Home Loan Bank of Indianapolis (the “FHLBI”) at the end of the quarter -
Produced core earnings of
$0.48 per share, or$3.6 million , for second quarter 20151 -
Declared dividend of
$0.49 per share for second quarter 2015 -
12.1% annualized dividend yield based on closing stock price on
June 30, 2015 -
Realized interest income of
$6.2 million ,$3.0 million of which was generated by the Excess MSR portfolio, for second quarter 2015, compared to realized interest income of$6.1 million for second quarter 2014 -
Aggregate portfolio leverage stood at 2.5x as of
June 30, 2015 -
Completed acquisition of
Aurora Financial Group , providing the Company with an approximate$712 million MSR portfolio as ofJune 30, 2015
“The quality of our investment portfolio contributed to the increase in
our book value despite a volatile market environment,” stated
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_______________ 1 Core Earnings is a non-GAAP financial measure. See “Core Earnings” later in this release for an explanation of how the Company calculates this non-GAAP financial measure and for a reconciliation to net income (loss), the most directly comparable financial measure calculated in accordance with GAAP. |
Operating Results
Cherry Hill reported GAAP net income applicable to common stockholders
for the second quarter of 2015 of
Core earnings, which excludes non-recurring unrealized and realized
gains or losses and adjusts for outstanding LTIP units in the Company’s
operating partnership, for the second quarter of 2015 were
| Three Months Ended June 30, | ||||||||
| 2015 | 2014 | |||||||
| Income | ||||||||
| Interest income | $ | 6,199 | $ | 6,137 | ||||
| Interest expense | 1,346 | 1,006 | ||||||
| Net interest income | 4,853 | 5,131 | ||||||
| Servicing fee income | 156 | - | ||||||
| Servicing costs | 94 | - | ||||||
| Amortization of MSRs | 60 | - | ||||||
| Net servicing income | 2 | - | ||||||
| Other income (loss) | ||||||||
| Realized gain (loss) on RMBS, net | (115) | 75 | ||||||
| Realized gain (loss) on derivatives, net | (52) | (187) | ||||||
| Realized gain (loss) on acquired assets, net | 174 | - | ||||||
| Unrealized gain (loss) on derivatives, net | 2,835 | (2,705) | ||||||
| Unrealized gain (loss) on investments in Excess MSRs | 4,827 | (1,648) | ||||||
| Unrealized gain (loss) on investments in MSRs | 38 | - | ||||||
| Total Income | 12,562 | 666 | ||||||
| Expenses | ||||||||
| General and administrative expense | 634 | 641 | ||||||
| Management fee to affiliate | 690 | 679 | ||||||
| Total Expenses | 1,324 | 1,320 | ||||||
| Income (Loss) Before Income Taxes | 11,238 | (654) | ||||||
| Provision for corporate business taxes | (70) | 1 | ||||||
| Net Income (Loss) | 11,308 | (655) | ||||||
| Net (income) loss allocated to noncontrolling interests | (103) | 3 | ||||||
| Net Income (Loss) Applicable to Common Stockholders | $ | 11,205 | $ | (652) | ||||
| Net income (Loss) Per Share of Common Stock | ||||||||
| Basic | $ | 1.49 | $ | (0.09) | ||||
| Diluted | $ | 1.49 | $ | (0.09) | ||||
| Weighted Average Number of Shares of Common Stock Outstanding | ||||||||
| Basic | 7,509,543 | 7,504,572 | ||||||
| Diluted | 7,509,543 | 7,509,543 | ||||||
|
_______________ Unaudited. Dollar amounts in thousands, except per share amounts. |
||||||||
The net unrealized loss on the Company’s RMBS portfolio for the second
quarter 2015 was approximately
| Three Months Ended June 30, | ||||||||
| 2015 | 2014 | |||||||
| Net income (loss) | $ | 11,308 | $ | (655) | ||||
| Other comprehensive income (loss): | ||||||||
| Net unrealized gain (loss) on RMBS | (6,280) | 5,670 | ||||||
| Reclassification of net realized (gain) loss on RMBS in earnings | 115 | (75) | ||||||
| Other comprehensive income (loss) | (6,165) | 5,595 | ||||||
| Comprehensive income (loss) | $ | 5,143 | $ | 4,940 | ||||
| Comprehensive income (loss) attributable to noncontrolling interests | 47 | 62 | ||||||
| Comprehensive income (loss) attributable to common stockholders | $ | 5,096 | $ | 4,878 | ||||
|
_______________ Unaudited. Dollar amounts in thousands. |
||||||||
Portfolio Highlights for the Quarter Ended
The Company realized interest 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
and TBAs. At quarter end
As of
Dividend
On
Core Earnings
Core earnings is a non-GAAP financial measure and is defined as GAAP net income (loss) applicable to common stockholders, excluding realized gain (loss) on RMBS, realized gain (loss) on derivatives, realized gain (loss) on acquired assets, unrealized gain (loss) on derivatives, unrealized gain (loss) on investments in Excess MSRs and unrealized gain (loss) on investments in MSRs and adjusted to exclude outstanding LTIP units in the Company’s operating partnership. Core earnings are provided for purposes of comparability to other issuers that invest in residential mortgage-related assets. The Company believes providing investors with core earnings, in addition to related GAAP financial measures, gives investors greater transparency into the Company’s ongoing operational performance. The concept of core earnings does have significant limitations, including the exclusion of realized and unrealized gains (losses), and may not be comparable to similarly-titled measures of other peers, which may use different calculations. As a result, core earnings should not be considered a substitute for the Company’s GAAP net income (loss) or as a measure of the Company’s liquidity.
The following table provides a reconciliation of net income to core
earnings for the three months ended
| Three Months Ended June 30, | ||||||||
| 2015 | 2014 | |||||||
| Net income (loss) | $ | 11,308 | $ | (655) | ||||
| Realized gain (loss) on RMBS, net | 115 | (75) | ||||||
| Realized gain (loss) on derivatives, net | 52 | 187 | ||||||
| Realized gain (loss) on acquired assets, net | (174) | - | ||||||
| Unrealized gain (loss) on derivatives, net | (2,835) | 2,705 | ||||||
| Unrealized gain (loss) on investments in Excess MSRs | (4,827) | 1,648 | ||||||
| Unrealized gain (loss) on investments in MSRs | (38) | - | ||||||
| Total core earnings: | $ | 3,601 | $ | 3,810 | ||||
| Core earnings attributable to noncontrolling interests | (33) | (22) | ||||||
| Core Earnings Attributable to Common Stockholders | $ | 3,568 | $ | 3,788 | ||||
| Core Earnings Attributable to Common Stockholders, per Share | $ | 0.48 | $ | 0.50 | ||||
| GAAP Net income (Loss) Per Share of Common Stock | $ | 1.49 | $ | (0.09) | ||||
|
_______________ Unaudited. Dollar amounts in thousands, except per share amounts. |
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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 quarterly period ended
Webcast and Conference Call
The Company’s management will host a conference call on
The conference call may be accessed by dialing 1-877-407-3982 (from within the U.S.) or 1-201-493-6780 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “Cherry Hill Second Quarter 2015 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,
its ability to complete the pending Aurora transaction, its ability to
execute on the anticipated strategy of purchasing full MSRs, 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