Cherry Hill Mortgage Investment (US:CHMI)2024-11-12 21:39Financial Performance - The company reported a net loss of $12,444 thousand for the three months ended September 30, 2024, compared to a net income of $15,885 thousand for the same period in 2023[14]. - Net income for the three months ended September 30, 2024, was a loss of $12,444 million, compared to a profit of $15,885 million for the same period in 2023[16]. - Comprehensive income for the nine months ended September 30, 2024, was $6,466 million, compared to a loss of $4,779 million in the same period last year[16]. - The company experienced a net loss of $1,040 million attributable to common stockholders for the nine months ended September 30, 2024, compared to a loss of $12,079 million in the same period of 2023[16]. - The company reported a net income of $15.885 million for the quarter ending June 30, 2023, compared to a net loss of $19.322 million for the previous quarter[17]. - For the nine months ended September 30, 2024, the company reported a net income of $396,000, a significant decrease from a net income of $10,421,000 for the same period in 2023[39]. - The company reported a net loss of $12,444,000 for the three months ended September 30, 2024, compared to a net income of $15,885,000 for the same period in 2023[39]. - The company reported a total of 80 RMBS securities with a weighted average coupon of 4.64% as of December 31, 2023[43]. Assets and Liabilities - Total assets increased to $1,551,389 thousand as of September 30, 2024, compared to $1,392,992 thousand as of December 31, 2023, representing a growth of approximately 11.4%[12]. - Total liabilities increased to $1,311,693 thousand as of September 30, 2024, from $1,134,617 thousand as of December 31, 2023, marking an increase of approximately 15.6%[12]. - The company’s accumulated deficit increased to $(253,944) thousand as of September 30, 2024, compared to $(233,161) thousand as of December 31, 2023[12]. - Net assets increased to $239,696,000 as of September 30, 2024, from $258,375,000 as of December 31, 2023[40]. - The company reported total liabilities of $4,749,000 as of September 30, 2024[90]. Income and Expenses - Net interest income for the three months ended September 30, 2024, was $109 thousand, a decrease from a net interest expense of $473 thousand for the same period in 2023[14]. - Interest income for the three-month period ended September 30, 2024, was $14.3 million, an increase of $650,000 from $12.864 million in the same period of 2023[39]. - Interest expense for the three months ended September 30, 2024, was $14.218 million, compared to $13.337 million for the same period in 2023, reflecting an increase of approximately 6.6%[39]. - General and administrative expense for the nine months ended September 30, 2024, was $8,623 million, compared to $5,144 million for the same period in 2023[132]. - The company recognized share-based compensation expense of $230,809 for the three-month period ended September 30, 2024, compared to $169,059 for the same period in 2023, indicating a year-over-year increase of approximately 36.4%[62]. Investments and Market Risks - The company is subject to significant credit and market risks associated with its investments in RMBS and derivatives, which could impact future performance[22]. - The fair value of RMBS investments was determined to be $28.3 million for purchases made during the nine-month period ended September 30, 2024[24]. - The company’s investments in RMBS consist solely of Agency RMBS as of September 30, 2024[40]. - The company has elected the fair value option for its investments in MSRs, recording valuation adjustments quarterly to reflect changes in fair value[127]. - The fair value of the company's RMBS portfolio as of September 30, 2024, is estimated at 930,979 thousand dollars, with a potential change of 3,644 thousand dollars (0.39%) under a 0.25% interest rate increase scenario[176]. Stockholder Equity and Dividends - Preferred stock dividends amounted to $2,594 thousand for the three months ended September 30, 2024, compared to $2,462 thousand in the same period last year[14]. - The company declared an additional cash dividend of $0.0096 per share for the second quarter Series B Preferred Stock, paid on October 15, 2024[54]. - The Series A Preferred Stock has a cumulative cash dividend rate of 8.20% per annum, equivalent to $2.05 per annum per share[53]. - The company has a Common Stock ATM Program with an aggregate offering price increased to $150.0 million, with approximately $49.3 million remaining as of September 30, 2024[55]. Management and Operational Changes - The company plans to internalize management and terminate the existing Management Agreement, which is expected to enhance operational efficiency[19]. - The management fee paid to the Manager is 1.5% per annum of the company's stockholders' equity, with the Management Agreement set to expire on October 22, 2025, and automatically renew unless terminated[65]. - A termination fee of approximately $18.4 million is due following the company's announcement to internalize management[165]. Regulatory and Taxation Matters - The company has elected to be taxed as a REIT, which allows it to avoid federal income taxes as long as it distributes its taxable income to stockholders[19]. - The provision for Corporate Business Taxes for the three months ended September 30, 2024, was $285,000, a decrease from $1.276 million in the same period of the previous year[110]. - The effective tax rate for the three months ended September 30, 2024, was 21.0%[111]. Future Outlook and Strategic Plans - The company expects to meet its long-term liquidity requirements through cash on hand and potential additional borrowings[154]. - The company anticipates that a rise in interest rates could negatively impact the market value of its assets, excluding servicing-related assets[171]. - The company actively manages risks related to credit quality, interest rates, liquidity, and prepayment speeds to provide attractive risk-adjusted returns[169].