Cherry Hill Mortgage Investment Corporation Announces Second Quarter 2020 Results
Second Quarter 2020 Highlights
-
GAAP net loss applicable to common stockholders of
$12.4 million , or$0.73 per share -
Core earnings attributable to common stockholders of
$7.9 million , or$0.47 per share -
Book value of
$13.41 per share atJune 30, 2020 , a 2.3% reduction from$13.73 atMarch 31, 2020 , net of the Company’s second quarter dividend. Approximately 70% of the reduction was due to paying half of the first quarter common dividend in stock -
Declared regular common dividend of
$0.27 per share, annualized common dividend yield at market close was 10.8% atAugust 7, 2020 -
Aggregate portfolio leverage stood at 4.4x at
June 30, 2020 -
As of
June 30 , the Company had unrestricted cash of approximately$94.5 million
“We are pleased with our earnings performance this quarter. Our second quarter results are reflective of our decisive efforts to minimize the negative impact to our portfolio from the market dislocation due to COVID 19,” said
Operating Results
Cherry Hill reported GAAP net loss applicable to common stockholders for the second quarter of 2020 of
Core earnings attributable to common stockholders for the second quarter of 2020 were
Three Months Ended |
|||||||||
2020 |
|
|
2019 |
|
|||||
|
|
(unaudited) |
|
(unaudited) |
|
||||
Income |
|||||||||
Interest income |
|
$ |
10,132 |
|
|
$ |
17,216 |
|
|
Interest expense |
3,425 |
|
11,707 |
|
|||||
Net interest income |
|
|
6,707 |
|
|
|
5,509 |
|
|
Servicing fee income |
18,032 |
|
18,362 |
|
|||||
Servicing costs |
|
|
6,594 |
|
|
|
4,103 |
|
|
Net servicing income |
|
11,438 |
|
|
14,259 |
|
|||
Other income (loss) |
|
|
|
|
|
|
|
||
Realized loss on RMBS, net |
(1,769 |
) |
- |
|
|||||
Realized loss on investments in MSRs, net |
|
|
(11,347 |
) |
|
|
- |
|
|
Realized gain (loss) on derivatives, net |
4,558 |
|
(365 |
) |
|||||
Realized loss on acquired assets, net |
|
|
(548 |
) |
|
|
- |
|
|
Unrealized loss on derivatives, net |
(4,581 |
) |
(3,819 |
) |
|||||
Unrealized gain on investments in Excess MSRs |
|
|
- |
|
|
|
- |
|
|
Unrealized loss on investments in MSRs |
(17,025 |
) |
(44,042 |
) |
|||||
Total Loss |
|
|
(12,567 |
) |
|
|
(28,458 |
) |
|
Expenses |
|||||||||
General and administrative expense |
|
|
1,420 |
|
|
|
1,138 |
|
|
Management fee to affiliate |
1,974 |
|
1,934 |
|
|||||
Total Expenses |
|
|
3,394 |
|
|
|
3,072 |
|
|
Loss Before Income Taxes |
|
(15,961 |
) |
|
(31,530 |
) |
|||
Benefit from corporate business taxes |
|
|
(5,837 |
) |
|
|
(4,372 |
) |
|
Net Loss |
|
(10,124 |
) |
|
(27,158 |
) |
|||
Net income loss allocated to noncontrolling interests in |
|
|
180 |
|
|
|
438 |
|
|
Dividends on preferred stock |
2,461 |
|
2,593 |
|
|||||
Net Loss Applicable to Common Stockholders |
|
$ |
(12,405 |
) |
|
$ |
(29,313 |
) |
|
Net Loss Per Share of Common Stock |
|||||||||
Basic |
|
$ |
(0.73 |
) |
|
$ |
(1.75 |
) |
|
Diluted |
$ |
(0.73 |
) |
$ |
(1.75 |
) |
|||
Weighted Average Number of Shares of Common Stock Outstanding |
|
|
|
|
|
|
|
||
Basic |
16,881,987 |
|
16,776,472 |
|
|||||
Diluted |
|
|
16,895,408 |
|
|
|
16,789,261 |
|
|
_________
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 2020 was approximately
Three Months Ended |
|||||||
2020 |
|
2019 |
|||||
|
|
(unaudited) |
|
(unaudited) |
|
||
Net Loss |
$ |
(10,124) |
$ |
(27,158) |
|||
Other comprehensive income: |
|
|
|
|
|
|
|
Net unrealized gain on RMBS |
|
14,017 |
25,536 |
||||
Reclassification of net realized gain on RMBS included in earnings |
|
|
1,769 |
|
|
- |
|
Other comprehensive income |
|
|
15,786 |
|
25,536 |
||
Comprehensive income (loss) |
|
$ |
5,662 |
|
$ |
(1,622) |
|
Comprehensive income (loss) attributable to noncontrolling interests in |
113 |
(29) |
|||||
Dividends on preferred stock |
|
|
2,461 |
|
|
2,593 |
|
Comprehensive income (loss) attributable to common stockholders |
$ |
3,088 |
$ |
(4,186) |
_________
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 both 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
As of
Dividends
On
Core Earnings
Core earnings is a non-GAAP financial measure and is currently defined by the Company as GAAP net income (loss), excluding realized gain (loss) on RMBS, realized and unrealized gain (loss) on investments in MSRs (net of any estimated MSR amortization), realized and unrealized gain (loss) on derivatives and realized (gain) loss on acquired assets. 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 |
|||||||
2020 |
|
2019 |
|||||
|
|
(unaudited) |
|
(unaudited) |
|
||
Net Loss |
$ |
(10,124) |
$ |
(27,158) |
|||
Realized loss on RMBS, net |
|
|
1,769 |
|
|
- |
|
Realized loss (gain) on derivatives, net |
|
(4,558) |
365 |
||||
Realized loss on investments in MSRs, net |
|
|
11,347 |
|
|
- |
|
Realized loss on acquired assets, net |
|
548 |
- |
||||
Unrealized loss on derivatives, net |
|
|
4,581 |
|
|
3,819 |
|
Unrealized loss (gain) on investments in MSRs, net of estimated MSR amortization |
11,801 |
38,733 |
(1) |
||||
Tax expense on unrealized gain on MSRs |
|
|
(4,832) |
|
|
(4,249) |
|
Total core earnings: |
$ |
10,532 |
$ |
11,510 |
|||
Core earnings attributable to noncontrolling interests in |
|
|
(193) |
|
|
(185) |
|
Dividends on preferred stock |
2,461 |
2,593 |
|||||
Core Earnings Attributable to Common Stockholders |
|
$ |
7,878 |
|
$ |
8,732 |
|
Core Earnings Attributable to Common Stockholders, per Diluted Share |
$ |
0.47 |
$ |
0.52 |
|||
GAAP Net Loss Per Share of Common Stock, per Diluted Share |
|
$ |
(0.73) |
|
$ |
(1.75) |
|
_________
Dollar amounts in thousands, except per share amounts. Certain prior period amounts have been reclassified to conform to current period presentation.
1 MSR amortization for periods that ended prior to
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 1-877-407-9716 (from within the
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/20200810005566/en/
Investor Relations
(877) 870-7005
InvestorRelations@chmireit.com
Source: