Cherry Hill Mortgage Investment (CHMI) - 2025 Q2 - Quarterly Report

Cautionary Statement Concerning Forward-Looking Information Forward-looking statements are subject to substantial risks and uncertainties regarding future business and financial outcomes - The Company's forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and generally beyond its control, covering future business results, financial condition, liquidity, operations, plans, and objectives[41] - Key forward-looking subjects include investment objectives, business strategy, internal management ability after November 2024, legal claims, capital raising, financing, leverage, investment timing, Servicing Related Assets acquisition, distribution capacity, market competition, hedging strategies, market/economic trends, regulatory actions, interest rate changes, REIT qualification, and projected prepayment/default rates[42] - Actual results may differ materially due to factors such as capital market volatility, economic conditions, regulatory developments, inflationary trends, changes in business strategy, investment opportunities, operational and regulatory risks, additional costs from management agreement termination, and changes in interest rates or the general economy[45] PART I. FINANCIAL INFORMATION This part presents the Company's unaudited consolidated financial statements and management's financial analysis Item 1. Consolidated Financial Statements This section presents the Company's unaudited consolidated financial statements and detailed notes on its financial position Consolidated Balance Sheets Total assets, liabilities, and equity slightly decreased, with RMBS and Servicing Related Assets as key assets | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | % Change | | :-------------------- | :------------ | :---------------- | :----- | :------- | | Assets | | | | | | RMBS, at fair value | $1,152,443 | $1,122,420 | $30,023 | 2.67% | | Servicing Related Assets, at fair value | $224,601 | $233,658 | $(9,057) | -3.87% | | Cash and cash equivalents | $58,042 | $46,313 | $11,729 | 25.32% | | Restricted cash | $9,953 | $24,446 | $(14,493) | -59.29% | | Derivative assets | $12,105 | $30,048 | $(17,943) | -59.72% | | Receivables and other assets | $33,515 | $34,290 | $(775) | -2.26% | | Total Assets | $1,490,659 | $1,491,175 | $(516) | -0.03% | | Liabilities | | | | | | Repurchase agreements | $1,072,294 | $1,077,257 | $(4,963) | -0.46% | | Derivative liabilities | $10,902 | $3,869 | $7,033 | 181.78% | | Notes payable | $149,381 | $151,226 | $(1,845) | -1.22% | | Dividends payable | $7,643 | $7,011 | $632 | 9.01% | | Accrued expenses and other liabilities | $18,026 | $18,190 | $(164) | -0.90% | | Total Liabilities | $1,258,246 | $1,257,553 | $693 | 0.06% | | Stockholders' Equity | | | | | | Total Stockholders' Equity | $232,413 | $233,622 | $(1,209) | -0.52% | Consolidated Statements of Income (Loss) Net income for Q2 2025 reversed prior quarter's loss, but H1 2025 showed a net loss, driven by unrealized losses on derivatives | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Interest income | $14,813 | $13,677 | $29,614 | $26,418 | | Interest expense | $12,172 | $13,510 | $24,807 | $27,158 | | Net interest income (expense) | $2,641 | $167 | $4,807 | $(740) | | Servicing fee income | $10,933 | $12,349 | $21,906 | $25,240 | | Servicing costs | $1,952 | $3,455 | $4,497 | $6,089 | | Net servicing income | $8,981 | $8,894 | $17,409 | $19,151 | | Realized loss on RMBS, net | $(2,053) | $(1,859) | $(6,045) | $(1,859) | | Realized gain on derivatives, net | $14,838 | $9,430 | $19,472 | $15,682 | | Unrealized gain (loss) on RMBS, measured at fair value through earnings, net | $3,508 | $(4,440) | $18,288 | $(12,761) | | Unrealized gain (loss) on derivatives, net | $(19,147) | $(3,042) | $(41,888) | $9,282 | | Unrealized loss on investments in Servicing Related Assets | $(2,731) | $(3,312) | $(9,056) | $(6,569) | | Total Income | $6,037 | $6,579 | $2,987 | $22,927 | | Total Expenses | $3,355 | $5,131 | $7,124 | $8,720 | | Net Income (Loss) | $1,561 | $784 | $(5,431) | $12,840 | | Net Income (Loss) Applicable to Common Stockholders | $(935) | $(1,864) | $(10,248) | $7,802 | | Basic EPS | $(0.03) | $(0.06) | $(0.32) | $0.26 | | Diluted EPS | $(0.03) | $(0.06) | $(0.32) | $0.26 | Consolidated Statements of Comprehensive Income (Loss) Comprehensive income was positive for Q2 and H1 2025, reversing prior year's loss, driven by net income and unrealized gains on RMBS | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income (loss) | $1,561 | $784 | $(5,431) | $12,840 | | Unrealized gain (loss) on RMBS, available-for-sale, net | $320 | $(3,734) | $7,170 | $(10,330) | | Net other comprehensive income (loss) | $320 | $(3,734) | $7,170 | $(10,330) | | Comprehensive income (loss) | $1,881 | $(2,950) | $1,739 | $2,510 | | Comprehensive loss attributable to common stockholders | $(616) | $(5,522) | $(3,209) | $(2,324) | Consolidated Statements of Changes in Stockholders' Equity Total stockholders' equity slightly decreased, influenced by common stock issuances, net loss, and other comprehensive income | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Common Stock Shares | 36,045,092 | 31,625,073 | 4,420,019 | | Common Stock Amount | $365 | $322 | $43 | | Additional Paid-in Capital | $394,004 | $381,069 | $12,935 | | Accumulated Deficit | $(270,241) | $(249,643) | $(20,598) | | Accumulated Other Comprehensive Loss | $(100) | $(7,270) | $7,170 | | Total Cherry Hill Mortgage Investment Corporation Stockholders' Equity | $229,892 | $230,342 | $(450) |