CHMI · Cherry Hill Mortgage Investment Corporation
Know the company
Company overview
Cherry Hill earns interest from residential mortgage securities and income from mortgage servicing rights, giving it different ways to earn money from home loans. The securities provide investment interest, while servicing rights provide income tied to the mortgage servicing business. Borrowing helps finance the portfolio, but interest charges, employee costs and other operating expenses reduce what remains for shareholders. Understanding those costs alongside the income from each business gives a clearer picture of what supports the dividend than looking at the size of the portfolio alone.
Business
REIT
Listing
CHMI · New York Stock Exchange
Reporting period
2026-06-30
Dividend schedule
Quarterly
How the business works
Cherry Hill's earnings still leave a useful margin over the annual dividend, but the higher yield in this update does not mean the payment has become better supported. Fly High's annual earnings and dividend figures are unchanged, while the share price is lower.
The operating picture deserves some caution. In the June quarter, lower borrowing expense helped cushion weaker mortgage interest and servicing fees, rather than both businesses producing stronger income. The dividend support would look more convincing if those income streams stabilized and common book value stopped eroding. For now, the earnings cushion is encouraging, but preserving the capital behind each share remains an important test for future payments.
Financial snapshot: 2026-06-30. Research reviewed 2026-10-17. The annual earnings comparison is from 2026-10-17. The business and balance-sheet figures below relate to the reporting period shown.
The assets it owns
$1.398 billion total assetsReported by Cherry Hill Mortgage Investment Corporation
Cherry Hill's mortgage securities and servicing rights are carried at estimated fair value rather than simply at their purchase prices. Changes in servicing-right values flow through reported profit, while securities valuations can affect either profit or shareholders' equity, depending on their accounting treatment. These movements matter to the capital behind each share, but they are different from the interest and servicing income the investments generate.
Share of consolidated total assets at 2026-06-30; other assets are the arithmetic residual. This is not a loan-seniority or sector allocation.
Annual earnings of $0.56 per share compare with $0.40 in annual dividends. Coverage is 140.00%. Earnings cover the payment in this update. Keep watching whether that support holds up.
Mortgage interest slipped to $14.7 million in the June 2026 quarter from $15.9 million in March, as securities sales and larger charges for amortizing purchase premiums reduced income. Those premiums are the extra paid above face value. Servicing fees also fell as portfolio size changed, while servicing costs were broadly steady and changes in borrowing levels reduced the interest bill.
The financing savings help, but the mortgage businesses were not strengthening together. Because servicing costs did not fall alongside fees, stabilizing portfolio income matters as much as keeping borrowing costs down. Improvement on both sides would make the earnings behind the dividend more convincing.
Cherry Hill finances its mortgage securities with short-term repurchase agreements, which work as loans secured by those investments. The securities remain on its balance sheet and Cherry Hill receives their interest and principal repayments, while paying interest to the financing counterparty.
Borrowing allows the shareholder capital to support a larger investment portfolio, but the useful return is what remains after financing costs. A larger asset base only strengthens dividend support when the extra investment income is worthwhile after that borrowing bill.
Lower mortgage rates can encourage early repayments, cutting short servicing cash flows and reducing returns on securities purchased above face value. Higher rates create a different challenge: slower repayments can leave Cherry Hill holding lower-yielding securities for longer, potentially beyond the life of the hedges intended to protect them.
A rate cut is therefore not an automatic improvement in the earnings behind the dividend. Arrangements with subservicers aim to replace some servicing rights when loans refinance, but the practical test is whether servicing cash flows and mortgage returns hold up together, rather than whether rates simply rise or fall.
A wider gap between investment yields and financing costs can make new purchases more rewarding, but the same market move can reduce the value of assets Cherry Hill already owns. If lenders then require more collateral, the company may need to sell investments to reduce its borrowings.
That trade-off makes financial flexibility important to income as well as asset values. Better potential returns on new purchases offer less comfort if meeting collateral calls means selling investments that would otherwise keep producing income.
Agency payment guarantees support Cherry Hill's mortgage securities. However, the report for June 30, 2026 also identifies a $2.3 million quarterly credit-loss provision on a separate note and a $0.5 million impairment of a strategic preferred-equity investment.
The Agency guarantees are a meaningful strength, but they do not cover those separate investments. The strategic-investment write-down adds to the existing concern about the impaired note, because further losses could reduce earnings and common capital.
At June 30, 2026, Cherry Hill held $52.062 million of cash and equivalents plus $25.434 million of restricted cash. Repurchase borrowings were $1.009 billion across 18 counterparties, with a 20-day weighted average remaining maturity and a 4.5% weighted average collateral haircut. No individual counterparty exposure exceeded 5% of company equity.
Fly High assessment: Counterparty diversification and available cash help, but this financing needs frequent renewal and can require additional collateral. Restricted cash cannot be treated as freely available funding. Watch liquidity alongside changes in mortgage prices and collateral requirements.
Calculated common book value was approximately $3.16 per share at June 30, 2026 versus $3.44 at December 31, 2025. The calculation subtracts the $109.644 million preferred liquidation preference from parent stockholders equity, excluding non-controlling interests, and divides by common shares outstanding. First-half GAAP net income attributable to common shareholders was a $0.632 million loss.
Fly High assessment: The approximately 8% decline is material erosion in the capital behind each common share. Future recurring earnings and asset recoveries need to stabilize that capital. The calculated book values and GAAP loss do not replace Fly High matching earnings figures.
Alongside the income trend, watch whether recovery expectations for the impaired note and strategic investment hold up. Further write-downs would take more from earnings and common capital, so containing those losses would make the dividend's earnings cushion more reassuring.
Net asset value
Latest recorded asset value per share$3.16Share price compared with recorded asset value21.20% discount
Financial data through October 17, 2026.
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U.S. federal · Tax year 2025
Dividend tax treatment
Cherry Hill estimated its 2025 common-stock distributions as 25% ordinary dividends and 75% return of capital.
Total ordinary dividends
25%
Qualified dividends
Not confirmed
Capital-gain distributions
0%
Return of capital
75%
The company calls this breakdown an estimate. The January 26 company release explicitly describes an estimate. Qualified dividends and Section 199A were not established by this source. Your Form 1099-DIV may show a different final mix. See the company's estimate.
Tax year: 2025. Total distributions: $0.55 per share.
Tax details and source
Total ordinary dividends (includes qualified)
25%
Section 199A portion (within ordinary dividends)
Not confirmed
Exempt-interest distributions
0%
Reporting form
Form 1099-DIV
Source date
2026-01-26
Qualified dividends are included in total ordinary dividends. Section 199A is a separate designation within ordinary dividends, not extra income or qualified dividend income.
Your account type, holding period and circumstances affect treatment. Use your broker’s tax statement for filing. Return of capital generally reduces cost basis; amounts beyond basis can be taxable. IRS dividend guidance.
