Cherry Hill Mortgage Investment Corporation (NYSE:CHMI) Q4 2023 Earnings Conference Call March 7, 2024 5:00 PM ET

Company Participants

Garrett Edson - Investor Relations

Jay Lown - President and Chief Executive Officer

Julian Evans - Chief Investment Officer

Michael Hutchby - Chief Financial Officer

Conference Call Participants

Mikhail Goberman - JMP Securities

Operator

Good day, and thank you for standing by. Welcome to the Cherry Hill Mortgage Investment Corporation Fourth Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded.

I would now like to hand the conference over to your speaker today, Garrett Edson, with Investor Relations. Please go ahead.

Garrett Edson

We’d like to thank you for joining us today for Cherry Hill Mortgage Investment Corporation’s fourth quarter 2023 conference call.

In addition to this call, we have filed a press release that was distributed earlier this afternoon and posted to the Investor Relations section of our website at www.chmireit.com.

On today’s call, management’s prepared remarks and answers to your questions may contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ from those discussed today. Examples of forward-looking statements include those related to interest income, financial guidance, IRRs, future expected cash flows, as well as prepayment and recapture rates, delinquencies and non-GAAP financial measures such as earnings available for distribution or EAD, and comprehensive income.

Forward-looking statements represent management’s current estimates and Cherry Hill assumes no obligation to update any forward-looking statements in the future. We encourage listeners to review the more detailed discussions related to these forward-looking statements contained in the Company’s filings with the SEC and the definitions contained in the financial presentations available on the Company’s website.

Today’s conference call is hosted by Jay Lown, President and CEO; Julian Evans, the Chief Investment Officer; and Michael Hutchby, the Chief Financial Officer.

Now, I will turn the call over to Jay.

Jay Lown

Thanks, Garrett, and welcome to our fourth quarter 2023 earnings call. On our prior call, we talked about how we were laser focused on risk management as the 10-year crossed 5% and agency mortgage spreads significantly widened. To that end, we proactively positioned our portfolio for flat to higher rates and to mitigate the spread widening we were seeing in the summer and early fall by hedging out a portion of our basis risk in our RMBS portfolio with TBAs. By doing this, we had a strong third quarter and successfully preserved the vast majority of our shareholders' equity, while others such as Agency REITs were considerably impacted by the spread widening.