FARMINGDALE, N.J. – Cherry Hill Mortgage Investments, Inc. (NYSE: CHMI) announced Monday that its Board of Directors has decided to internalize the management of the Company. The decision, recommended by a special committee of independent board members, will terminate the current management agreement with Cherry Hill Mortgage Management, LLC and transform the Company into a fully internally managed, fully integrated real estate investment trust.
This move follows a strategic review initiated by the Special Committee, as disclosed in a press release issued on April 22, 2024. While the absorption process is an important outcome of this review, the Committee continues to consider other strategic alternatives. However, the Company has not set a formal deadline for the completion of this review and stated that it will not provide updates until the process is completed or further disclosure is deemed necessary or legally required.
Cherry Hill Mortgage Investment Corporation specializes in the acquisition, investment and management of residential mortgage assets throughout the United States. The decision to move to an internal management structure is part of the company’s broader efforts to streamline operations and enhance potential shareholder value.
The company stressed that the merger process and the ongoing strategic review are in the best interests of the company and its shareholders, and with the company’s transition to the new management structure, it has been keen to take the necessary steps to implement the changes smoothly.
This announcement is based on a press release issued by Cherry Hill Mortgage Investment Corporation.
In other recent news, Cherry Hill Mortgage Investment Corporation reported mixed results for the first quarter of 2024, with GAAP net income of $0.32 per diluted share. The company saw a slight decline in book value per common share to $4.49, but declared and paid a dividend on its common and preferred stock. A special committee was formed to explore strategic alternatives to enhance shareholder value, reflecting a proactive approach to corporate governance.
The company’s strategic position in mortgage servicing rights and residential mortgage-backed securities was also discussed, along with the potential impact of interest rate volatility on future repurchases. Cherry Hill Mortgage also highlighted its hedging activities and operating expenses, which totaled $3.6 million during the quarter.
The Company expects continued market volatility and plans to actively manage its portfolio, focusing on mortgage-backed securities (RMBS) due to their more compelling return and risk profile compared to mortgage-backed securities (MSRs).
Despite some challenges, including a slight decline in book value per common share, Cherry Hill Mortgage remains committed to delivering shareholder value and adapting its strategies in response to market volatility.
InvestingPro Insights
As Cherry Hill Mortgage Investment Corporation (NYSE: CHMI) transitions to in-house management, InvestingPro’s real-time data and analytics provide a deeper understanding of the company’s financial health and market position. According to InvestingPro’s data, CHMI has a market cap of $109.87 million, with a remarkably high dividend yield of 16.44% as of the trailing twelve months through Q1 2024. This high yield is a highlight for income-focused investors, especially given the company’s impressive track record of maintaining dividend payments for 12 consecutive years.
InvestingPro’s advice suggests that despite the company not making a profit over the past twelve months, analysts are optimistic about CHMI’s future, and are expecting net income and profitability to grow for the current year. Additionally, they are expecting sales to grow for the current year, which could be a positive sign for potential investors looking at the company’s ability to generate revenue. The company’s price-to-book ratio as of the trailing twelve months through Q1 2024 is 0.81, which could attract value-seeking investors who may be undervalued.
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