third quarter 2026
Filed Oct 29, 2026Cherry Hill reported GAAP net loss applicable to common stockholders of $3.9 million, or $0.11 per share, while EAD attributable to common stockholders was $5.2 million, or $0.14 per diluted share.
Third-quarter GAAP results were negative, driven primarily by a $51.8 million unrealized loss on RMBS measured at fair value through earnings, while EAD remained positive at $5.2 million and net servicing income increased sequentially.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net interest income, three months ended September 30, 2026GAAP | $4.53M | – | – |
| Interest income, three months ended September 30, 2026GAAP | $14.20M | – | – |
| Interest expense, three months ended September 30, 2026GAAP | 9,672 | – | – |
| Servicing fee income, three months ended September 30, 2026GAAP | $9.76M | – | – |
| Servicing costs, three months ended September 30, 2026GAAP | 2,235 | – | – |
| Net servicing income, three months ended September 30, 2026GAAP | $7.52M | – | – |
| Realized loss on RMBS, net, three months ended September 30, 2026GAAP | - | – | – |
| Realized gain on derivatives, net, three months ended September 30, 2026GAAP | $10.59M | – | – |
| Realized gain on acquired assets, net, three months ended September 30, 2026GAAP | - | – | – |
| Unrealized loss on RMBS, measured at fair value through earnings, net, three months ended September 30, 2026GAAP | (51,776) | – | – |
| Unrealized gain (loss) on derivatives, net, three months ended September 30, 2026GAAP | $32.10M | – | – |
| Unrealized gain (loss) on investments in Servicing Related Assets, three months ended September 30, 2026GAAP | $4.09M | – | – |
| Credit loss and impairment on other assets, three months ended September 30, 2026GAAP | (500) | – | – |
| Total other loss, three months ended September 30, 2026GAAP | −$5.50M | – | – |
| Total Income, three months ended September 30, 2026GAAP | $6.56M | – | – |
| General and administrative expense, three months ended September 30, 2026GAAP | $4.64M | – | – |
| Compensation and benefits, three months ended September 30, 2026GAAP | $1.83M | – | – |
| Total Expenses, three months ended September 30, 2026GAAP | $6.47M | – | – |
| Income Before Income Taxes, three months ended September 30, 2026GAAP | $ 87 | – | – |
| Provision for corporate business taxes, three months ended September 30, 2026GAAP | $1.56M | – | – |
| Net Income (Loss), three months ended September 30, 2026GAAP | −$1.47M | – | – |
| Net Income (Loss) Applicable to Common Stockholders, three months ended September 30, 2026GAAP | −$3.87M | – | – |
| Net Income (Loss) Per Share of Common Stock, basic, three months ended September 30, 2026GAAP | $ (0.11) | – | – |
| Net Income (Loss) Per Share of Common Stock, diluted, three months ended September 30, 2026GAAP | $ (0.11) | – | – |
| Weighted Average Number of Shares of Common Stock Outstanding, basic, three months ended September 30, 2026GAAP | 36,779,326 | – | – |
| Weighted Average Number of Shares of Common Stock Outstanding, diluted, three months ended September 30, 2026GAAP | 36,779,326 | – | – |
| Unrealized loss on RMBS, available-for-sale, net, three months ended September 30, 2026GAAP | −$8.93M | – | – |
| Comprehensive income (loss), three months ended September 30, 2026GAAP | −$10.40M | – | – |
| Comprehensive income (loss) attributable to common stockholders, three months ended September 30, 2026GAAP | −$12.67M | – | – |
| EAD, three months ended September 30, 2026non-GAAP | $7.78M | – | – |
| EAD attributable to common stockholders, three months ended September 30, 2026non-GAAP | $5.25M | – | – |
| EAD attributable to common stockholders, per diluted share, three months ended September 30, 2026non-GAAP | $ 0.14 | – | – |
| Common book value per diluted share at September 30, 2026GAAP | $2.73 | – | – |
| Net interest spread for the RMBS portfolio at September 30, 2026other | 3.45% | – | – |
| Aggregate portfolio leverage at September 30, 2026other | 5.19x | – | – |
Capital returns
- Declared regular common dividend of $0.10 per share for the third quarter of 2026, payable in cash on October 30, 2026 to common stockholders of record as of the close of business on September 30, 2026.
- Declared a dividend of $0.5125 per share on the 8.20% Series A Cumulative Redeemable Preferred Stock for the third quarter 2026, paid in cash on October 15, 2026.
- Declared a dividend of $0.6162 per share on the 8.250% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock for the third quarter 2026, paid in cash on October 15, 2026.
- Annualized common dividend yield was 15.4% based on the closing sale price of the Company’s common stock as reported by the NYSE on October 28, 2026.
What drove it
- Net servicing income was $7.5 million and net interest income was $4.5 million.
- A realized gain on derivatives of $10.6 million, an unrealized gain on derivatives of $32.1 million, and an unrealized gain of $4.1 million on investments in Servicing Related Assets partially offset RMBS and credit-related losses.
- The Company used interest rate swaps, TBAs, Treasury futures and Eris SOFR swap futures to mitigate duration risk and interest rate risk associated with RMBS and MSRs.
Concerns
- The Company recorded a $51.8 million unrealized loss on RMBS measured at fair value through earnings.
- The Company recorded $0.5 million of credit loss and impairment on other assets.
- General and administrative expense was $4.6 million, compared with $2.1 million for the three months ended June 30, 2026.
- The Company reported GAAP net loss applicable to common stockholders of $3.9 million.
- Net unrealized loss on RMBS classified as available-for-sale and reported in accumulated other comprehensive income was approximately $8.9 million.
- The pending transaction with TPG Mortgage Investment Trust, Inc. introduces completion, approval, transaction-cost and execution risks described in the filing.
What to watch
- Completion of the pending transaction with TPG Mortgage Investment Trust, Inc., which had an implied transaction value of $117.5 million when announced on August 10, 2026.
- Future changes in interest rates, credit spreads, prepayment rates, default rates, market volatility and mortgage market conditions identified in the filing.
- RMBS valuation movements, derivative results, credit loss and impairment on other assets, and MSR portfolio performance.
- The Company will not host a webcast or conference call due to the pending transaction with TPG Mortgage Investment Trust, Inc.
Balance sheet and cash flow
- Unrestricted cash was $41.2 million as of September 30, 2026.
- The unpaid principal balance for the MSR portfolio was $14.9 billion as of September 30, 2026.
- The carrying value of the MSR portfolio was $215.2 million at September 30, 2026.
- The RMBS portfolio had a book value of approximately $1.1 billion and a carrying value of approximately $1.0 billion at September 30, 2026.
- The RMBS portfolio weighted average coupon was 5.08% and weighted average maturity was 27 years at September 30, 2026.
- Interest rate swaps had a notional amount of $767.3 million at September 30, 2026.
- TBAs had a notional amount of ($415.4) million at September 30, 2026.
- Treasury futures had a notional amount of ($68.1) million at September 30, 2026.
- Eris SOFR swap futures had a notional amount of ($91.7) million at September 30, 2026.
Analysis
Cherry Hill reported a GAAP net loss applicable to common stockholders of $3.9 million, or $0.11 per basic and diluted share, for the third quarter of 2026. The principal reported driver was a $51.8 million unrealized loss on RMBS measured at fair value through earnings. This was partially offset by a $32.1 million unrealized gain on derivatives, a $10.6 million realized gain on derivatives, and a $4.1 million unrealized gain on investments in Servicing Related Assets. The Company also recorded $0.5 million of credit loss and impairment on other assets.
Core reported income streams were comparatively stable sequentially. Net servicing income was $7.5 million, compared with $7.4 million for the three months ended June 30, 2026, as servicing fee income was $9.8 million and servicing costs were $2.2 million. Net interest income was $4.5 million, compared with $4.7 million in the preceding quarter. EAD attributable to common stockholders was $5.2 million, or $0.14 per diluted share, compared with $5.5 million, or $0.15 per diluted share, for the three months ended June 30, 2026.
Expenses and taxes weighed on the quarter. General and administrative expense was $4.6 million versus $2.1 million in the preceding quarter, while compensation and benefits was $1.8 million versus $1.9 million. The provision for corporate business taxes was $1.6 million compared with $0.1 million for the three months ended June 30, 2026. Comprehensive loss attributable to common stockholders was $12.7 million, including an $8.9 million unrealized loss on available-for-sale RMBS reported in other comprehensive income.
At quarter-end, common GAAP book value was $2.73 per diluted share, net of the third quarter dividend, and aggregate portfolio leverage was 5.19x. Unrestricted cash was $41.2 million. The Company declared a regular common dividend of $0.10 per share, while the annualized common dividend yield was 15.4% based on the October 28, 2026 NYSE closing sale price. The operating outlook is dominated by the pending transaction with TPG Mortgage Investment Trust, Inc.; Cherry Hill provided no forward financial guidance and will not host a results webcast or conference call because of the pending transaction.
Not in the filing
stated, not guessed- Revenue was not reported.
- Segment revenue was not reported.
- Gross margin was not reported.
- Operating income was not reported.
- Prior-year comparable figures and year-over-year changes were not reported for the third-quarter metrics.
- Operating cash flow was not reported.
- Free cash flow was not reported.
- Total debt was not reported.
- Share repurchases were not reported.
- Forward financial guidance was not provided.
- Prior outlook was not provided.
- Named executive commentary and named executive quotes were not provided.
Written by an AI language model 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 checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.