Cherry Hill Mortgage (NYSE: CHMI) swings to Q1 2026 GAAP loss as RMBS marks bite
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Cherry Hill Mortgage Investment Corporation reported a small GAAP loss for first-quarter 2026 after unrealized RMBS losses outweighed core income. The company posted GAAP net loss applicable to common stockholders of $2.0 million, or $0.05 per diluted share, versus $0.14 per share in the prior quarter.
Earnings available for distribution attributable to common stockholders were $5.3 million, or $0.14 per diluted share, up from $0.11 in fourth-quarter 2025, reflecting stronger cash earnings. Net interest income was $4.5 million and net servicing income was $7.9 million, partially offset by a $12.4 million unrealized loss on RMBS and a $1.4 million unrealized loss on servicing-related assets.
The MSR portfolio had $15.6 billion in unpaid principal balance and a $213.5 million carrying value at March 31, 2026. The RMBS portfolio totaled about $1.2 billion, with a 4.98% weighted-average coupon and 27-year weighted-average maturity, and was hedged with interest rate swaps, TBAs, Treasury futures and Eris SOFR swap futures. GAAP book value was $3.23 per diluted share, net of the first-quarter dividend. The board declared a $0.10 common dividend and continued quarterly preferred dividends.
Positive
- Earnings available for distribution improved, rising to $5.3 million, or $0.14 per diluted share, from $3.9 million, or $0.11 per diluted share, in the prior quarter, indicating stronger underlying cash earnings despite GAAP volatility.
Negative
- GAAP results deteriorated sharply, moving from $5.3 million of net income applicable to common stockholders ($0.14 per diluted share) in Q4 2025 to a $2.0 million net loss in Q1 2026 ($0.05 loss per diluted share), driven by sizable unrealized RMBS and servicing-related losses.
Insights
GAAP swings to loss on unrealized RMBS marks, while cash earnings and EAD improve.
Cherry Hill reported GAAP net loss applicable to common stockholders of $2.0 million, or $0.05 per diluted share, versus net income of $5.3 million, or $0.14 per share, in Q4 2025. The shift reflects a $12.4 million unrealized loss on RMBS and a $1.4 million unrealized loss on servicing-related assets, partly offset by a $6.1 million unrealized gain on derivatives.
Core cash performance was steadier. Earnings available for distribution attributable to common stockholders rose to $5.3 million, or $0.14 per diluted share, from $0.11 in the prior quarter, supported by $4.5 million of net interest income and $7.9 million of net servicing income. The MSR portfolio’s unpaid principal balance reached $15.6 billion with a $213.5 million carrying value, while the RMBS book was about $1.2 billion with a 4.98% coupon.
The company ended the quarter with GAAP book value of $3.23 per diluted share, net of the Q1 common dividend of $0.10. A 5.5x debt-to-equity ratio and substantial hedging—interest rate swaps of $833.7 million notional and TBAs of $384.3 million short—underscore sensitivity to rates and spreads. Future filings will show whether April’s cited stabilization, combined with this hedge profile, reduces earnings volatility.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
GAAP net income applicable to common: -$2.0 million
GAAP EPS: -$0.05 per diluted share
EAD to common stockholders: $5.3 million
+5 more
8 metrics
GAAP net income applicable to common
-$2.0 million
Q1 2026 net loss applicable to common stockholders
GAAP EPS
-$0.05 per diluted share
Q1 2026 net income (loss) per common share
EAD to common stockholders
$5.3 million
Q1 2026 earnings available for distribution to common
EAD per diluted share
$0.14 per share
Q1 2026 EAD attributable to common stockholders
Net interest income
$4.5 million
Q1 2026 consolidated net interest income
Net servicing income
$7.9 million
Q1 2026 servicing fee income net of servicing costs
GAAP book value per share
$3.23 per diluted share
GAAP book value as of March 31, 2026, net of dividend
MSR UPB
$15.6 billion
Unpaid principal balance of MSR portfolio at March 31, 2026
Key Terms
Earnings available for distribution, RMBS, Mortgage servicing rights (MSRs), debt-to-equity ratio, +1 more
5 terms
Earnings available for distribution financial
"Earnings available for distribution (“EAD”) is a non-GAAP financial measure that we define as GAAP net income (loss), excluding realized gain (loss) on RMBS..."
Earnings available for distribution are the portion of a company’s profit that remains after paying taxes, meeting legal or contractual reserves, and covering any required debt or operating obligations — essentially the cash the business can legally and practically give to shareholders or unitholders. Investors watch this number because it shows how much income a company can return as dividends or distributions, similar to the money left in a household account after paying bills and savings goals.
RMBS financial
"we remain focused on thoughtfully and proactively managing our diversified portfolio of RMBS and MSRs as uncertainty persists."
Residential mortgage-backed securities (RMBS) are investments made by pooling many home loans and selling slices of the resulting stream of mortgage payments to investors. They matter because they convert homeowners’ monthly payments into tradable income: the cash you receive and the price you pay depend on borrowers’ ability to pay, interest rates and housing market health—think of buying a share in a neighborhood’s mortgage cash flow, with corresponding income and risk.
Mortgage servicing rights (MSRs) financial
"the Company’s RMBS and MSRs, Cherry Hill used interest rate swaps, TBAs, Treasury futures and Eris SOFR swap futures."
debt-to-equity ratio financial
"Net interest spread for the RMBS portfolio stood at 2.90% and the debt-to-equity ratio on the aggregate portfolio ended the quarter at 5.5x."
Debt-to-equity ratio shows how much a company relies on borrowed money compared with the owners’ funds; think of it as the amount of debt owed for every dollar of owner’s savings. Investors use it to judge financial risk and flexibility — a higher number means more borrowing and potentially greater interest burden or vulnerability in downturns, while a lower number suggests a more conservative, less risky balance sheet.
Eris SOFR swap futures financial
"the Company held interest rate swaps with a notional amount of $833.7 million, TBAs... and Eris SOFR swap futures with a notional amount of ($59.5) million."
Eris SOFR swap futures are standardized contracts that let buyers and sellers lock in the future level of interest rates tied to the Secured Overnight Financing Rate (SOFR), using the swap market as the reference. Think of them like a forward-looking price tag on borrowing costs that investors, lenders and treasurers use to hedge against or bet on interest-rate moves; they matter because they help manage the risk and cost of borrowing across time.
Earnings Snapshot
GAAP net income applicable to common: -$2.0 million
Q1 2026
GAAP net income applicable to common
-$2.0 million
from $5.3 million in Q4 2025
GAAP diluted EPS
-$0.05
from $0.14 in Q4 2025
EAD to common stockholders
$5.3 million
from $3.9 million in Q4 2025
EAD per diluted share
$0.14
from $0.11 in Q4 2025
GAAP book value per diluted share
$3.23
as of March 31, 2026, net of Q1 dividend
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 7, 2026
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation)
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Commission File Number:
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(IRS Employer Identification No.)
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(Address of principal executive offices, including zip code)
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this
chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new
or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which
registered
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Results of Operations and Financial Condition.
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On May 7, 2026, Cherry Hill Mortgage Investment Corporation (the “Company”) reported its results of operations for the quarter ended
March 31, 2026. A copy of the press release is furnished as Exhibit 99.1.
The information in this Current Report on Form 8-K, including the exhibit attached hereto, is being furnished and shall not be deemed
“filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as
amended.
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Financial Statements and Exhibits.
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(d)
Exhibits:
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99.1
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Press release, dated May 7, 2026.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be
signed on its behalf by the undersigned, hereunto duly authorized.
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CHERRY HILL MORTGAGE INVESTMENT
CORPORATION
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By:
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/s/ Apeksha Patel
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Apeksha Patel
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Date: May 7, 2026
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Chief Financial Officer and Treasurer
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EXHIBIT INDEX
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Exhibit
Number
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Description
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99.1
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Press release, dated May 7, 2026
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Exhibit 99.1
CHERRY HILL MORTGAGE INVESTMENT CORPORATION
ANNOUNCES FIRST QUARTER 2026 RESULTS
TINTON FALLS, NJ – May 7, 2026 — Cherry Hill Mortgage Investment Corporation (NYSE: CHMI) (“Cherry Hill” or the “Company”) today reported results for the first quarter
2026.
First Quarter 2026 Highlights
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GAAP net loss applicable to common stockholders of $2.0 million, or $0.05 per share.
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•
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Earnings available for distribution (“EAD”) attributable to common stockholders of $5.3 million, or $0.14 per diluted share.
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•
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Common book value per share of $3.23 at March 31, 2026.
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•
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Declared regular common dividend of $0.10 per share; annualized common dividend yield was 15.5% based on the closing sale price of the Company’s common stock as reported by
the NYSE on May 6, 2026.
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•
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Aggregate portfolio leverage stood at 5.5x at March 31, 2026.
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•
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As of March 31, 2026, the Company had unrestricted cash of $46.7 million.
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“The first quarter was marked by unprecedented geopolitical actions that created significant volatility, and our team reacted quickly and decisively to protect
shareholder interests and mitigate risk,” said Jay Lown, President and CEO of Cherry Hill Mortgage Investment Corporation. “While we are encouraged by the stabilization we saw in April, we remain focused on thoughtfully and proactively managing our
diversified portfolio of RMBS and MSRs as uncertainty persists.”
Operating Results
Cherry Hill reported GAAP net loss applicable to common stockholders for the first quarter of 2026 of $2.0 million, or $0.05 per basic and diluted weighted average
common share outstanding. Reported GAAP net loss was determined based primarily on the following: $4.5 million of net interest income, $7.9 million of net servicing income, a net realized loss of $0.1 million on derivatives, a net unrealized loss
of $12.4 million on RMBS measured at fair value through earnings, a net unrealized gain of $6.1 million on derivatives, a net unrealized loss of $1.4 million on investments in Servicing Related Assets, and general and administrative expenses and
compensation and benefits in the aggregate amount of $3.3 million.
Earnings available for distribution attributable to common stockholders for the first quarter of 2026 were $5.3 million, or $0.14 per basic and diluted weighted
average common share outstanding. For a reconciliation of GAAP net income to non-GAAP earnings available for distribution, please refer to the reconciliation table accompanying this release.
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Three Months Ended
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March 31, 2026
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December 31, 2025
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(unaudited)
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(unaudited)
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Income
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Interest income
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$
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15,850
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$
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15,838
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Interest expense
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11,394
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12,628
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Net interest income
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4,456
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3,210
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Servicing fee income
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10,219
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10,629
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Servicing costs
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2,289
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2,481
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Net servicing income
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7,930
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8,148
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Other income (loss)
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Realized loss on derivatives, net
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(70
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)
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(1,939
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)
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Unrealized gain (loss) on RMBS, measured at fair value through earnings, net
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(12,436
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6,560
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Unrealized gain (loss) on derivatives, net
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6,121
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(361
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Unrealized loss on investments in Servicing Related Assets
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(1,361
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(3,857
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Total Income
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4,640
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11,761
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Expenses
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General and administrative expense
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1,693
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1,544
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Compensation and benefits
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1,579
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1,740
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Total Expenses
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3,272
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3,284
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Income Before Income Taxes
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1,368
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8,477
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Provision for corporate business taxes
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939
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619
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Net Income
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429
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7,858
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Net income allocated to noncontrolling interests in Operating Partnership
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(6
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(130
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Dividends on preferred stock
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(2,391
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(2,436
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)
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Net Income (Loss) Applicable to Common Stockholders
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$
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(1,968
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$
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5,292
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Net Income (Loss) Per Share of Common Stock
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Basic
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$
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(0.05
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$
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0.14
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Diluted
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$
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(0.05
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$
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0.14
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Weighted Average Number of Shares of Common Stock Outstanding
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Basic
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36,593,018
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36,593,018
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Diluted
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36,593,018
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36,630,066
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Dollar amounts in thousands, except per share amounts.
Net unrealized loss on the Company’s RMBS portfolio classified as available-for-sale that are reported in accumulated other comprehensive income was approximately $2.4
million.
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Three Months Ended
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March 31, 2026
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December 31, 2025
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(unaudited)
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(unaudited)
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Net Income
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$
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429
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$
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7,858
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Other comprehensive income (loss):
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Unrealized gain (loss) on RMBS, available-for-sale, net
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(2,442
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1,173
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Net other comprehensive income (loss)
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(2,442
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1,173
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Comprehensive income (loss)
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$
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(2,013
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$
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9,031
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Comprehensive (income) loss attributable to noncontrolling interests in Operating Partnership
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29
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(142
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Dividends on preferred stock
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(2,391
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(2,436
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Comprehensive income (loss) attributable to common stockholders
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$
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(4,375
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)
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$
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6,453
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Dollar amounts in thousands.
Portfolio Highlights for the Quarter Ended March 31, 2026
The Company realized net servicing fee income of $7.9 million, net interest income of $4.5 million and other loss of $7.7 million, primarily related to an unrealized
loss on RMBS and an unrealized loss on investments in Servicing Related Assets, partially offset by an unrealized gain on derivatives. The unpaid principal balance for the MSR portfolio stood at $15.6 billion as of March 31, 2026 and the carrying
value of the MSR portfolio ended the quarter at $213.5 million. Net interest spread for the RMBS portfolio stood at 2.90% and the debt-to-equity ratio on the aggregate portfolio ended the quarter at 5.5x.
The RMBS portfolio had a book value and carrying value of approximately $1.2 billion at quarter-end March 31, 2026. The portfolio had a weighted average coupon of
4.98% and weighted average maturity of 27 years.
In order to mitigate duration risk and interest rate risk associated with the Company’s RMBS and MSRs, Cherry Hill used interest rate swaps, TBAs, Treasury futures and
Eris SOFR swap futures. At quarter end March 31, 2026, the Company held interest rate swaps with a notional amount of $833.7 million, TBAs with a notional amount of ($384.3) million, Treasury futures with a notional amount of $6.0 million and Eris
SOFR swap futures with a notional amount of ($59.5) million.
As of March 31, 2026, Cherry Hill’s GAAP book value was $3.23 per diluted share, net of the first quarter dividend.
Dividends
On March 12, 2026, the Board of Directors declared a quarterly dividend of $0.10 per share of common stock for the first quarter of 2026. The dividend was paid in cash
on April 30, 2026 to common stockholders of record as of the close of business on March 31, 2026. Additionally, the Board of Directors declared a dividend of $0.5125 per share on the Company’s 8.20% Series A Cumulative Redeemable Preferred Stock
and a dividend of $0.5978 per share on the Company’s 8.250% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock for the first quarter 2026. The dividends were paid in cash on April 15, 2026 to Series A and B Preferred stockholders
of record as of the close of business on March 31, 2026.
Earnings Available for Distribution
Earnings available for distribution (“EAD”) is a non-GAAP financial measure that we define as GAAP net income (loss), excluding realized gain (loss) on RMBS,
unrealized gain (loss) on RMBS measured at fair value through earnings, realized and unrealized gain (loss) on derivatives, realized gain (loss) on acquired assets, realized and unrealized gain (loss) on investments in MSRs (net of any estimated
MSR amortization) and any tax expense (benefit) on realized and unrealized gain (loss) on MSRs. MSR amortization refers to the portion of the change in fair value of the MSR that is primarily due to the realization of cashflows, runoff resulting
from prepayments and an adjustment for any gain or loss on the capital used to purchase the MSR. EAD also includes interest rate swap periodic interest income (expense) and drop income on TBA dollar roll transactions, which are included in
“Realized gain (loss) on derivatives, net” on the consolidated statements of income (loss). EAD is adjusted to exclude outstanding LTIP-OP Units in our Operating Partnership and dividends paid on our preferred stock.
EAD is provided for purposes of potential comparability to other issuers that invest in residential mortgage-related assets. We believe providing investors with EAD,
in addition to related GAAP financial measures, may provide investors some insight into our ongoing operational performance. However, the concept of EAD does have significant limitations, including the exclusion of realized and unrealized gains
(losses), and given the apparent lack of a consistent methodology among issuers for defining EAD, it may not be comparable to similarly titled measures of other issuers, which define EAD differently from us and each other. As a result, EAD should
not be considered a substitute for our GAAP net income (loss) or as a measure of our liquidity. While EAD is one indicia of the Company’s earnings capacity, it is not the only factor considered in setting a dividend and is not the same as REIT
taxable income which is calculated in accordance with the rules of the IRS.
The following table provides a reconciliation of net income to EAD for the three months ended March 31, 2026 and December 31, 2025.
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Three Months Ended
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March 31,
2026
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December 31,
2025
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(unaudited)
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(unaudited)
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Net Income
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$
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429
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$
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7,858
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Realized loss on derivatives, net ¹
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4,297
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6,497
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Unrealized loss (gain) on RMBS, measured at fair value through earnings, net
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12,436
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(6,560
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)
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Unrealized loss (gain) on derivatives, net
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(6,121
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)
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361
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Unrealized gain on investments in MSRs, net of estimated MSR amortization
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(4,981
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)
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(3,053
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)
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Tax expense on realized and unrealized gain on MSRs
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1,704
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1,307
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Total EAD:
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$
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7,764
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$
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6,410
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EAD attributable to noncontrolling interests in Operating Partnership
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(113
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)
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(92
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)
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Dividends on preferred stock
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(2,391
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)
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(2,436
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)
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EAD Attributable to Common Stockholders
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$
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5,260
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$
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3,882
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EAD Attributable to Common Stockholders, per Diluted Share
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$
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0.14
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$
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0.11
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GAAP Net Income (Loss) Per Share of Common Stock, per Diluted Share
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$
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(0.05
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)
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$
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0.14
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Dollar amounts in thousands, except per share amounts.
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1.
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Excludes drop income on TBA dollar rolls of $419,000 and $167,000 and interest rate swap periodic interest income of $3.8 million and $4.4 million for the three-month
periods ended March 31, 2026 and December 31, 2025, respectively.
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Additional Information
Additional information regarding Cherry Hill’s financial condition and results of operations will be available in its Quarterly Report on Form 10-Q for the quarter
ended March 31, 2026, which will be filed with the Securities and Exchange Commission. In addition, an investor presentation with supplemental information regarding Cherry Hill, its business and its financial condition as of March 31, 2026 and its
results of operations for the quarter ended March 31, 2026 will be posted to the Investor Relations section of Cherry Hill’s website, www.chmireit.com. Cherry Hill will discuss the investor presentation on the conference call referenced below.
Webcast and Conference Call
The Company’s management will host a conference call today at 5:00 pm Eastern Time. A copy of this earnings release and the investor presentation referenced above will
be posted to the Investor Relations section of Cherry Hill’s website, www.chmireit.com. All interested parties are welcome to participate on the live call.
A live webcast of the conference call will be available in the investor relations section of the Company’s website at www.chmireit.com. To
listen to the live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software. An online archive of the webcast will be available on the Company’s website
for one year following the call.
To Participate in the Telephone Conference Call:
Participants may register for the conference call here. Once
registered, dial-in information for the call will be made available.
About Cherry Hill Mortgage Investment Corporation
Cherry Hill Mortgage Investment Corporation is a real estate finance company that acquires, invests in and manages residential mortgage assets in the United States.
For additional information, visit www.chmireit.com.
Forward-Looking Statements
This press release contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws,
including, among others, statements relating to the Company’s long-term growth opportunities and strategies and the Company’s ability to expand its market opportunities and create its own Excess MSRs and its ability to generate sustainable and
attractive risk-adjusted returns for stockholders. These forward-looking statements are based upon the Company’s present expectations, but these statements are not guaranteed to occur. For a description of factors that may cause the Company’s
actual results or performance to differ from its forward-looking statements, please review the information under the heading “Risk Factors” included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, and other
documents filed by the Company with the Securities and Exchange Commission.
Contact:
Cherry Hill Mortgage Investment Corporation
Investor Relations
(877) 870-7005
InvestorRelations@chmireit.com
FAQ
How did Cherry Hill Mortgage Investment Corporation (CHMI) perform in Q1 2026?
Cherry Hill reported a GAAP net loss applicable to common stockholders of $2.0 million, or $0.05 per diluted share. The loss was mainly driven by a $12.4 million unrealized loss on RMBS and a $1.4 million unrealized loss on servicing-related assets, partly offset by derivative gains.
What were Cherry Hill Mortgage’s earnings available for distribution in Q1 2026?
Earnings available for distribution attributable to common stockholders were $5.3 million, or $0.14 per diluted share. This compares with $3.9 million, or $0.11 per diluted share, in the prior quarter, reflecting stronger core cash earnings despite GAAP losses from market-driven valuation changes.
What is the size of Cherry Hill Mortgage’s MSR and RMBS portfolios as of March 31, 2026?
The MSR portfolio had $15.6 billion of unpaid principal balance and a $213.5 million carrying value. The RMBS portfolio had approximately $1.2 billion of book and carrying value, with a 4.98% weighted-average coupon and 27-year weighted-average maturity, supported by extensive interest rate hedges.
What dividends did Cherry Hill Mortgage (CHMI) declare for first-quarter 2026?
The board declared a quarterly common dividend of $0.10 per share, paid April 30, 2026. It also declared first-quarter dividends of $0.5125 per share on the 8.20% Series A preferred and $0.5978 per share on the 8.250% Series B preferred, paid April 15, 2026.
How is Cherry Hill Mortgage managing interest rate and duration risk in Q1 2026?
To manage RMBS and MSR interest rate and duration risk, Cherry Hill used interest rate swaps with $833.7 million notional, TBAs with negative $384.3 million notional, $6.0 million of Treasury futures, and negative $59.5 million of Eris SOFR swap futures, all as of March 31, 2026.