Cherry Hill Mortgage Investment Corporation Announces Third Quarter 2020 Results
Third Quarter 2020 Highlights
-
GAAP net loss applicable to common stockholders of
$3.2 million , or$0.19 per share -
Core earnings attributable to common stockholders of
$8.2 million , or$0.48 per share -
Common book value per share of
$11.74 atSeptember 30, 2020 -
Declared regular common dividend of
$0.27 per share, annualized common dividend yield at market close was 11.0% atNovember 6, 2020 -
Aggregate portfolio leverage stood at 4.6x at
September 30, 2020 -
As of
September 30 , the Company had unrestricted cash of approximately$95 million
“We generated core earnings that exceeded our dividend again this quarter while maintaining a strong balance sheet going into year end,” said
Operating Results
Cherry Hill reported GAAP net loss applicable to common stockholders for the third quarter of 2020 of
Core earnings attributable to common stockholders for the third quarter of 2020 were
Three Months Ended |
|||||||
2020 |
|
2019 |
|||||
|
|
(unaudited) |
|
(unaudited) |
|
||
Income |
|||||||
Interest income |
|
$ |
10,001 |
|
$ |
19,383 |
|
Interest expense |
(18) |
12,635 |
|||||
Net interest income |
|
|
10,019 |
|
|
6,748 |
|
Servicing fee income |
14,365 |
18,687 |
|||||
Servicing costs |
|
|
5,266 |
|
|
4,102 |
|
Net servicing income |
|
9,099 |
|
14,585 |
|||
Other income (loss) |
|
|
|
|
|
|
|
Realized gain on RMBS, available-for-sale, net |
6,722 |
275 |
|||||
Realized gain (loss) on derivatives, net |
|
|
(7,841) |
|
|
12,627 |
|
Realized gain (loss) on acquired assets, net |
(95) |
54 |
|||||
Unrealized gain (loss) on derivatives, net |
|
|
3,702 |
|
|
(2,133) |
|
Unrealized loss on investments in Servicing Related Assets |
(20,972) |
(37,514) |
|||||
Total Income (Loss) |
|
|
634 |
|
|
(5,358) |
|
Expenses |
|||||||
General and administrative expense |
|
|
1,503 |
|
|
1,194 |
|
Management fee to affiliate |
1,989 |
2,042 |
|||||
Total Expenses |
|
|
3,492 |
|
|
3,236 |
|
Loss Before Income Taxes |
|
(2,858) |
|
(8,594) |
|||
Benefit from corporate business taxes |
|
|
(2,116) |
|
|
(4,285) |
|
Net Loss |
|
(742) |
|
(4,309) |
|||
Net loss allocated to noncontrolling interests in |
|
|
10 |
|
|
65 |
|
Dividends on preferred stock |
2,459 |
2,459 |
|||||
Net Loss Applicable to Common Stockholders |
|
$ |
(3,191) |
|
$ |
(6,703) |
|
Net Loss Per Share of Common Stock |
|||||||
Basic |
|
$ |
(0.19) |
|
$ |
(0.40) |
|
Diluted |
$ |
(0.19) |
$ |
(0.40) |
|||
Weighted Average Number of Shares of Common Stock Outstanding |
|
|
|
|
|
|
|
Basic |
17,054,634 |
16,883,816 |
|||||
Diluted |
|
|
17,076,858 |
|
|
16,896,605 |
|
_______________
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 2020 was approximately
Three Months Ended |
|||||||
2020 |
|
2019 |
|||||
|
|
(unaudited) |
|
(unaudited) |
|
||
Net Loss |
$ |
(742) |
$ |
(4,309) |
|||
Other comprehensive income (loss): |
|
|
|
|
|
|
|
Net unrealized gain on RMBS |
|
4,612 |
15,826 |
||||
Reclassification of net realized loss on RMBS included in earnings |
|
|
(6,722) |
|
|
(275) |
|
Other comprehensive income (loss) |
|
|
(2,110) |
|
15,551 |
||
Comprehensive income (loss) |
|
$ |
(2,852) |
|
$ |
11,242 |
|
Comprehensive income (loss) attributable to noncontrolling interests in |
(49) |
181 |
|||||
Dividends on preferred stock |
|
|
2,459 |
|
|
2,459 |
|
Comprehensive income (loss) attributable to common stockholders |
$ |
(5,262) |
$ |
8,602 |
_______________
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 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 |
$ |
(742) |
$ |
(4,309) |
|||
Realized gain on RMBS, net |
|
|
(6,722) |
|
|
(275) |
|
Realized loss (gain) on derivatives, net |
|
7,841 |
(12,627) |
||||
Realized loss (gain) on acquired assets, net |
|
|
95 |
|
|
(54) |
|
Unrealized loss (gain) on derivatives, net |
(3,702) |
2,133 |
|||||
Unrealized loss on investments in MSRs, net of estimated MSR amortization |
|
|
15,091 |
|
|
29,105 |
|
Tax expense on realized and unrealized gain on MSRs |
(1,017) |
(4,364) |
|||||
Total core earnings: |
|
$ |
10,844 |
|
$ |
9,609 |
|
Core earnings attributable to noncontrolling interests in |
(198) |
(153) |
|||||
Dividends on preferred stock |
|
|
2,459 |
|
|
2,459 |
|
Core Earnings Attributable to Common Stockholders |
$ |
8,187 |
$ |
6,997 |
|||
Core Earnings Attributable to Common Stockholders, per Diluted Share |
|
$ |
0.48 |
|
$ |
0.41 |
|
GAAP Net Loss Per Share of Common Stock, per Diluted Share |
$ |
(0.19) |
$ |
(0.40) |
_________
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 1-877-407-9716 (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
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Investor Relations
(877) 870-7005
InvestorRelations@chmireit.com
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