FARMINGDALE, N.J. - Cherry Hill Mortgage (NYSE:CHMI) Investment Corporation (NYSE: CHMI) announced Monday that its board of directors has decided to internalize the company's management. This decision, recommended by a special committee of independent board members, will terminate the existing management agreement with Cherry Hill Mortgage Management, LLC, and transition the company to a fully integrated, internally managed mortgage real estate investment trust (REIT).
The move follows a strategic review initiated by the special committee, as disclosed in an April 22, 2024, press release. While the internalization process is a significant outcome of this review, the committee continues to consider other strategic alternatives. However, the company has not set a formal deadline for completing this review and has stated it will not provide updates until the process is finalized or further disclosure is deemed necessary or legally required.
Cherry Hill Mortgage Investment Corporation specializes in acquiring, investing in, and managing residential mortgage assets across the United States. The decision to shift to an internal management structure is part of the company's broader efforts to streamline operations and potentially enhance value for stockholders.
The company has emphasized that the internalization and ongoing strategic review are in the best interests of the company and its shareholders. As the company transitions to the new management structure, it has ensured that the necessary steps will be taken to implement the changes smoothly.
This announcement is based on a press release statement from Cherry Hill Mortgage Investment Corporation.
In other recent news, Cherry Hill Mortgage Investment Corporation reported mixed results for Q1 2024, with a GAAP net income of $0.32 per diluted share. The company experienced a slight decrease in book value per common share to $4.49, but still declared and paid dividends across its common and preferred stock. A Special Committee has been formed to explore strategic alternatives for enhancing shareholder value, reflecting a proactive approach to corporate governance.
The company's strategic positioning in mortgage servicing rights (MSRs) and residential mortgage-backed securities (RMBS) was discussed, along with the potential impact of interest rate volatility on future repurchase borrowings. Cherry Hill Mortgage also highlighted its hedging activities and operational expenses, which totaled $3.6 million for the quarter.
The company anticipates continued market volatility and plans to actively manage its portfolio, with a focus on RMBS due to its more compelling risk-return profile compared to MSR.
Despite some challenges, including a minor decrease in the book value per common share, Cherry Hill Mortgage remains committed to delivering shareholder value and adapting its strategies in response to market fluctuations.
InvestingPro Insights
As Cherry Hill Mortgage Investment Corporation (NYSE: CHMI) navigates a significant transition to internal management, real-time data and analysis from InvestingPro provides a deeper understanding of the company's financial health and market position. According to InvestingPro Data, CHMI's market capitalization stands at $109.87 million, with a notably high dividend yield of 16.44% as of the last twelve months leading up to Q1 2024. This substantial yield is a key highlight for income-focused investors, especially considering the company's impressive track record of maintaining dividend payments for 12 consecutive years.
InvestingPro Tips suggest that despite the company not being profitable over the last twelve months, analysts are optimistic about CHMI's future, expecting net income growth and predicting profitability for the current year. Additionally, they anticipate sales growth in the current year, which could be a positive signal for potential investors looking at the company's revenue-generating capability. The company's price/book ratio as of the last twelve months leading up to Q1 2024 is 0.81, which may appeal to value investors seeking assets that could be undervalued compared to their book value.
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