Cherry Hill Mortgage Investment Corp (CHMI): Results of Operations and Financial Condition
Cherry Hill Mortgage Investment Corp (CHMI) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 CHERRY HILL MORTGAGE INVESTMENT CORPORATION ANNOUNCES SECOND QUARTER 2026 RESULTS TINTON FALLS, NJ – August 10, 2026 — Cherry Hill Mortgage Investment Corporation (NYSE: CHMI) (“Cherry Hill” or the “Company”) today reported results for the second quarter 2026. Second
How this was made
The 30-second read
Why it matters
Traders should treat this as a combined earnings-and-M&A catalyst: Q2 numbers inform baseline earnings/distribution capacity, while the definitive merger terms and premiums drive the primary valuation and spread trade.
Market read
Definitive M&A terms plus Q2 financials create a near-term catalyst for CHMI valuation, with likely focus on deal spread, closing probability, and distribution expectations.
What to watch
Deal completion risk (regulatory/financing/closing conditions) and how the market values CHMI’s MSR and hedging book can matter more than the headline EAD or dividend yield.
Cherry Hill reported GAAP net income applicable to common stockholders of $1.3 million, or $0.04 per share, and EAD attributable to common stockholders of $5.5 million, or $0.15 per diluted share, while announcing a definitive merger agreement with MITT.
GAAP net income applicable to common stockholders improved from a loss in the prior quarter and EAD attributable to common stockholders increased, but the quarter included realized and unrealized portfolio losses, credit loss and impairment, and higher operating expenses. The announced MITT transaction is expected to close in the fourth quarter of 2026, subject to customary conditions.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Interest income (dollar amounts in thousands)GAAP | $14,740 | – | – |
| Interest expense (dollar amounts in thousands)GAAP | $10,004 | – | – |
| Net interest income (dollar amounts in thousands)GAAP | $4,736 | – | – |
| Servicing fee income (dollar amounts in thousands)GAAP | $9,692 | – | – |
| Servicing costs (dollar amounts in thousands)GAAP | $2,319 | – | – |
| Net servicing income (dollar amounts in thousands)GAAP | $7,373 | – | – |
| Realized loss on RMBS, net (dollar amounts in thousands)GAAP | $(1,047) | – | – |
| Realized gain (loss) on derivatives, net (dollar amounts in thousands)GAAP | $12,139 | – | – |
| Realized gain on acquired assets, net (dollar amounts in thousands)GAAP | $2 | – | – |
| Unrealized loss on RMBS, measured at fair value through earnings, net (dollar amounts in thousands)GAAP | $(860) | – | – |
| Unrealized gain (loss) on derivatives, net (dollar amounts in thousands)GAAP | $(9,299) | – | – |
| Unrealized loss on investments in Servicing Related Assets (dollar amounts in thousands)GAAP | $(2,351) | – | – |
| Credit loss and impairment on other assets (dollar amounts in thousands)GAAP | $(2,815) | – | – |
| Total other loss (dollar amounts in thousands)GAAP | $(4,231) | – | – |
| Total Income (dollar amounts in thousands)GAAP | $7,878 | – | – |
| General and administrative expense (dollar amounts in thousands)GAAP | $2,128 | – | – |
| Compensation and benefits (dollar amounts in thousands)GAAP | $1,889 | – | – |
| Total Expenses (dollar amounts in thousands)GAAP | $4,017 | – | – |
| Income Before Income Taxes (dollar amounts in thousands)GAAP | $3,861 | – | – |
| Provision for corporate business taxes (dollar amounts in thousands)GAAP | $67 | – | – |
| Net Income (dollar amounts in thousands)GAAP | $3,794 | – | – |
| Net income allocated to noncontrolling interests in Operating Partnership (dollar amounts in thousands)GAAP | $(55) | – | – |
| Dividends on preferred stock (dollar amounts in thousands)GAAP | $(2,403) | – | – |
| Net Income (Loss) Applicable to Common Stockholders (dollar amounts in thousands)GAAP | $1,336 | – | – |
| Net Income (Loss) Per Share of Common Stock, BasicGAAP | $0.04 | – | – |
| Net Income (Loss) Per Share of Common Stock, DilutedGAAP | $0.04 | – | – |
| Weighted Average Number of Shares of Common Stock Outstanding, BasicGAAP | 36,605,698 | – | – |
| Weighted Average Number of Shares of Common Stock Outstanding, DilutedGAAP | 36,739,399 | – | – |
| Net other comprehensive income (loss) (dollar amounts in thousands)GAAP | $502 | – | – |
| Comprehensive income (loss) (dollar amounts in thousands)GAAP | $4,296 | – | – |
| Comprehensive income (loss) attributable to common stockholders (dollar amounts in thousands)GAAP | $1,831 | – | – |
| Total EAD (dollar amounts in thousands)non-GAAP | $8,042 | – | – |
| EAD attributable to noncontrolling interests in Operating Partnership (dollar amounts in thousands)non-GAAP | $(117) | – | – |
| EAD Attributable to Common Stockholders (dollar amounts in thousands)non-GAAP | $5,522 | – | – |
| EAD Attributable to Common Stockholders, per Diluted Sharenon-GAAP | $0.15 | – | – |
| Common book value per diluted shareGAAP | $3.16 | – | – |
| Aggregate portfolio leverageother | 5.02x | – | – |
| Net interest spread for the RMBS portfolioother | 3.45% | – | – |
Capital returns
- Declared regular common dividend of $0.10 per share for the second quarter of 2026, paid in cash on July 31, 2026 to common stockholders of record as of the close of business on June 30, 2026.
- Declared a dividend of $0.5125 per share on the 8.20% Series A Cumulative Redeemable Preferred Stock for the second quarter 2026, paid in cash on July 15, 2026.
- Declared a dividend of $0.6045 per share on the 8.250% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock for the second quarter 2026, paid in cash on July 15, 2026.
- Annualized common dividend yield was 16.6% based on the closing sale price of the Company’s common stock as reported by the NYSE on August 7, 2026.
What drove it
- Net interest income was $4,736, compared with $4,456 in the prior quarter.
- Net servicing income was $7,373, compared with $7,930 in the prior quarter.
- A $12,139 realized gain on derivatives was partly offset by a $(9,299) unrealized loss on derivatives.
- The quarter included $(1,047) of realized loss on RMBS, $(860) of unrealized loss on RMBS measured at fair value through earnings, $(2,351) of unrealized loss on investments in Servicing Related Assets, and $(2,815) of credit loss and impairment on other assets.
- Total other loss was $(4,231), compared with $(7,746) in the prior quarter.
Concerns
- Servicing fee income was $9,692 versus $10,219 in the prior quarter, while servicing costs were $2,319 versus $2,289.
- General and administrative expense was $2,128 versus $1,693 in the prior quarter, and compensation and benefits was $1,889 versus $1,579.
- EAD excludes a range of realized and unrealized gains and losses, credit loss and impairment, transaction-related expenses, and specified tax items. The Company states that EAD has significant limitations and should not be considered a substitute for GAAP net income (loss) or a measure of liquidity.
- The merger is subject to customary closing conditions, including approval of both MITT and CHMI stockholders.
What to watch
- Completion of the MITT merger, which the companies expect to close in the fourth quarter of 2026.
- The merger consideration of 0.3063 shares of MITT common stock and $0.93 in cash per CHMI common share.
- RMBS, derivatives and Servicing Related Assets valuation movements, which affected GAAP earnings during the quarter.
- Credit loss and impairment on other assets, reported at $(2,815) for the quarter.
- The relationship between common dividends of $0.10 per share and EAD attributable to common stockholders of $0.15 per diluted share.
Balance sheet and cash flow
- Unrestricted cash was $52.1 million as of June 30, 2026.
- The MSR portfolio had an unpaid principal balance of $15.2 billion and a carrying value of $211.1 million as of June 30, 2026.
- The RMBS portfolio had a book value and carrying value of approximately $1.1 billion at June 30, 2026.
- The RMBS portfolio had a weighted average coupon of 5.08% and weighted average maturity of 27 years.
- At June 30, 2026, interest rate swaps had a notional amount of $767.3 million, TBAs had a notional amount of ($266.9) million, Treasury futures had a notional amount of $28.4 million, and Eris SOFR swap futures had a notional amount of ($82.0) million.
- Net unrealized gain on the RMBS portfolio classified as available-for-sale and reported in accumulated other comprehensive income was approximately $0.5 million.
Analysis
Cherry Hill returned to GAAP net income applicable to common stockholders of $1,336 thousand, or $0.04 per diluted share, from a prior-quarter loss of $(1,968) thousand, or $(0.05) per diluted share. Total income was $7,878 thousand compared with $4,640 thousand in the prior quarter, while total expenses increased to $4,017 thousand from $3,272 thousand. The lower provision for corporate business taxes of $67 thousand, compared with $939 thousand, also accompanied the improvement in reported net income.
Core portfolio income showed divergent movements. Net interest income increased to $4,736 thousand from $4,456 thousand, while net servicing income declined to $7,373 thousand from $7,930 thousand. Servicing fee income fell to $9,692 thousand from $10,219 thousand and servicing costs increased to $2,319 thousand from $2,289 thousand. The RMBS portfolio reported a net interest spread of 3.45%, and the MSR portfolio had an unpaid principal balance of $15.2 billion and a carrying value of $211.1 million at quarter-end.
Fair-value and realized activity remained a material determinant of GAAP results. A $12,139 thousand realized gain on derivatives was offset in part by a $(9,299) thousand unrealized loss on derivatives. The Company also reported a $(1,047) thousand realized loss on RMBS, a $(860) thousand unrealized loss on RMBS measured at fair value through earnings, a $(2,351) thousand unrealized loss on investments in Servicing Related Assets, and $(2,815) thousand of credit loss and impairment on other assets. Total other loss was $(4,231) thousand, improving from $(7,746) thousand in the prior quarter.
Non-GAAP EAD attributable to common stockholders rose to $5,522 thousand, or $0.15 per diluted share, from $5,260 thousand, or $0.14 per diluted share. The Company declared a regular common dividend of $0.10 per share. It ended the quarter with unrestricted cash of $52.1 million, common book value per diluted share of $3.16, and aggregate portfolio leverage of 5.02x. The filing did not report operating cash flow, free cash flow, or a debt balance.
The principal strategic development is the definitive agreement under which MITT will acquire CHMI. CHMI common stockholders are to receive 0.3063 shares of MITT common stock and $0.93 in cash per share. Based on MITT’s August 7, 2026 closing price, the transaction implies $3.10 per CHMI common share. The companies expect closing in the fourth quarter of 2026, subject to customary closing conditions including stockholder approvals, and CHMI will not host its webcast and conference call because of the pending transaction.
Not in the filing
stated, not guessed- Prior-year comparative figures and year-over-year changes for reported metrics
- Total revenue
- Segment revenue and segment comparisons
- Gross margin
- Operating income
- Operating cash flow
- Free cash flow
- Debt balance
- Share repurchases
- Forward financial guidance
- Previous-quarter outlook or prior guidance
- Named executive commentary or quotes
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
CHMI is a residential mortgage REIT reporting quarterly results and, per the filing, has entered a definitive merger agreement to be acquired by MITT.
Ticker impact
CHMI reported Q2 2026 GAAP net income of $1.3M and declared a $0.10 common dividend, alongside a definitive merger agreement with MITT.
Likely volatility around deal-spread repricing; dividend and reported EAD may provide limited support, but deal terms dominate.
The filing discloses both quarterly financial metrics and a definitive acquisition agreement with stated consideration and premiums, which typically drives price action more than operating details.
Market effects
Residential mortgage REITs may see read-across on deal appetite and valuation for mortgage servicing and RMBS exposure.
Limited, as the disclosure is company-specific and not tied to a regional macro shock.
Low, since the transaction is within US mortgage REITs and does not indicate cross-border operational change.
Counterpoint
The reported GAAP profitability can be distorted by derivative and RMBS fair-value swings, so operating strength may not be durable into the deal close.
Key entities
- issuerCherry Hill Mortgage Investment Corporation
Reported Q2 2026 results and entered a definitive merger agreement to be acquired by MITT.
- acquirerTPG Mortgage Investment Trust, Inc.
Agreed to acquire CHMI under a definitive merger agreement with stated consideration.
- managerAG REIT Management, LLC
Manager of MITT, described as an affiliate of TPG Inc.
- parent/affiliateTPG Inc.
Referenced as the alternative asset management firm with an affiliate managing MITT.
