Cherry Hill Mortgage Investment Corporation (CHMI) reported its financial results for the fiscal year ending December 31, 2024, revealing a net income of $12.2 million, a significant recovery from a net loss of $35.5 million in the previous year. The company's interest income increased to $55.8 million from $50.0 million, driven by the acquisition of new securities and the replacement of lower-yielding assets. However, interest expenses also rose to $55.8 million, up from $51.6 million, primarily due to increased repurchase obligations. The net interest income remained marginally positive at $29, compared to a negative $1.7 million in 2023.
In terms of operational changes, CHMI transitioned to an internally managed structure on November 14, 2024, after terminating its management agreement with Cherry Hill Mortgage Management, LLC. This internalization is expected to yield cost savings and enhance alignment between management and stockholder interests. The company now operates with a dedicated executive team, which includes President and CEO Jeffrey Lown II and CFO Michael Hutchby. As of December 31, 2024, CHMI had 12 full-time employees, a notable increase from previous years when it was externally managed.
The company’s investments in servicing-related assets, primarily mortgage servicing rights (MSRs), totaled approximately $234 million as of December 31, 2024, down from $254 million in 2023. The aggregate unpaid principal balance of the MSRs was about $17.3 billion. The geographic distribution of these assets showed significant exposure to states like California (14.6%) and Virginia (8.7%). Additionally, CHMI's portfolio of residential mortgage-backed securities (RMBS) was valued at $1.1 billion, with a weighted average yield of 4.91%.
Looking ahead, CHMI's management expressed cautious optimism regarding future performance, contingent on market conditions and interest rate fluctuations. The company plans to continue leveraging its portfolio while managing risks associated with interest rates and credit quality. The Federal Reserve's recent easing of monetary policy, including a reduction in the federal funds rate, is anticipated to lower funding costs and potentially increase net interest income. However, management acknowledged the inherent uncertainties in the market, particularly regarding prepayment speeds and the overall economic environment.
In summary, Cherry Hill Mortgage Investment Corporation's financial performance in 2024 marked a recovery from the previous year's losses, supported by strategic internal management and a focus on servicing-related assets and RMBS. The company remains vigilant about market conditions and is positioned to adapt its strategies as necessary to maintain its REIT status and optimize returns for shareholders.
About Cherry Hill Mortgage Investment Corp
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