0001140361-26-008094
SEC filingCherry Hill Mortgage Investment Corporation reported FY 2025 results with total income of $23.3 million and net income of $6.9 million. However, after accounting for dividends on preferred stock of $9.8 million, the company reported a net loss applicable to common stockholders of -$3.0 million. Key revenue drivers included net interest income of $11.3 million and net servicing income of $34.0 million, partially offset by realized and unrealized losses on investments. The company maintained a strong balance sheet with total assets of $1.54 billion and stockholders' equity of $238.5 million. Cash flow from operations was positive at $19.1 million, while investing activities used $66.7 million primarily for RMBS purchases. The company continues to operate as a REIT, distributing substantially all taxable income to stockholders.
Cherry Hill Mortgage Investment Corporation reported FY 2025 financial results with total income of $23.3 million and net income of $6.9 million. The company generated net interest income of $11.3 million from interest income of $61.1 million and interest expense of $49.8 million. Net servicing income contributed $34.0 million from servicing fee income of $43.3 million less servicing costs of $9.3 million. However, the company experienced significant unrealized losses on derivatives of -$39.8 million and unrealized losses on investments in Servicing Related Assets of -$18.8 million, partially offset by unrealized gains on RMBS of $35.6 million. Total expenses were $14.2 million, consisting of general and administrative expenses of $7.7 million and compensation and benefits of $6.5 million. After accounting for dividends on preferred stock of $9.8 million, the net loss applicable to common stockholders was -$3.0 million.
The company's revenue streams are primarily derived from two sources: interest income and servicing fee income. Interest income totaled $61.1 million, while servicing fee income was $43.3 million. The company also realized gains on derivatives of $7.0 million and realized gains on acquired assets of $2,000. However, these were partially offset by realized losses on RMBS of -$6.0 million. The company's investment portfolio includes RMBS valued at $1.21 billion and investments in Servicing Related Assets valued at $214.8 million. The document indicates the company operates through two segments: investments in RMBS and investments in Servicing Related Assets, though specific segment financial data is not provided in the XBRL data.
The company's profitability was impacted by significant fair value adjustments on its investment portfolio. While net interest income margin was positive at $11.3 million, the company experienced substantial unrealized losses on derivatives (-$39.8 million) and Servicing Related Assets (-$18.8 million). Total expenses of $14.2 million represented 60.9% of total income. The provision for corporate business taxes was $2.2 million. The company's accumulated deficit stood at -$270.4 million as of December 31, 2025. The net income margin, calculated as net income divided by total income, was 29.6%.
The company generated $19.1 million in cash from operating activities, primarily from net income of $6.9 million adjusted for non-cash items including unrealized gains on RMBS of $35.6 million and unrealized losses on derivatives of -$39.8 million. Investing activities used $66.7 million, mainly for purchases of RMBS totaling $247.7 million, partially offset by principal paydowns of $100.2 million and proceeds from sales of $99.8 million. Financing activities provided $39.3 million, with significant borrowings under repurchase agreements of $10.23 billion offset by repayments of $10.17 billion. The balance sheet shows total assets of $1.54 billion, including $1.21 billion in RMBS and $214.8 million in Servicing Related Assets. Total liabilities were $1.30 billion, primarily consisting of repurchase agreements of $1.14 billion and notes payable of $145.2 million. Stockholders' equity was $238.5 million, with cash and cash equivalents of $54.9 million and restricted cash of $7.5 million.
The company's principal objective is to generate attractive current yields and risk-adjusted total returns for stockholders through dividend distributions and capital appreciation. As a REIT, the company must distribute at least 90% of its REIT taxable income to stockholders and currently expects to distribute substantially all taxable income. The company faces risks related to interest rate changes, which can impact prepayment speeds on mortgage loans and the value of its assets. Wider spreads between asset yields and funding costs could negatively impact book value, while tighter spreads could have a positive impact. The company attempts to mitigate credit risk through loan-level due diligence and ongoing monitoring of acquired MSRs. The company's hedging strategy using interest rate swap agreements is subject to valuation changes based on interest rate movements.