Cherry Hill Mortgage Investment Corp (NYSE:CHMI) Q2 2020 Earnings Conference Call - Final Transcript

Aug 10, 2020 • 05:00 pm ET


Cherry Hill Mortgage Investment Corp (NYSE:CHMI) Q2 2020 Earnings Conference Call - Final Transcript


Loading Event

Loading Transcript


Greetings. Welcome to the Cherry Hill Mortgage Investment Corporation Second Quarter 2020 Earnings Call. [Operator Instructions]

I will now turn the conference over to your host, Rory Rumore. You may begin.

Rory Rumore

We'd like to thank you for joining us today for Cherry Hill Mortgage Investment Corporation's second quarter 2020 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

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, IRR, future expected cash flows as well as prepayment and recapture rates, delinquencies and non-GAAP financial measures such as core 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, Rory, and welcome to today's call. We hope you and your families are remaining safe and healthy, and we appreciate you joining us this afternoon. I'd like to begin the call by thanking our entire team for their continued efforts to manage through what has been a most challenging environment these last five months. Their hard work and dedication impresses me every day. The team continues to work remotely with no disruption in productivity.

The second quarter could be described as a rebuilding period, where we work to stabilize our portfolios and closely monitor our risk as the pandemic continued to greatly impact the economy in the country. The US experienced record high unemployment numbers paired with record low GDP, keeping rates near historic lows throughout the second quarter, yet equities pushed higher in anticipation of COVID vaccines and better economic times. As we noted on our prior call, liquidity was of paramount importance as we navigated through these challenges, and we stayed focused on our core strategies and competencies throughout the second quarter. We remain committed to our portfolio as constructed with both RMBS and MSRs, and believe the two asset classes provide investors with compelling returns, and together, effectively hedge book value across multiple interest rate scenarios.

In the midst of the pandemic, we overcame many challenges, and I am pleased with our performance for the second quarter. We reduced the leverage on our aggregate portfolio from 5 times at the end of March to 4.4 times at the end of June, and ended the quarter with $94 million in unrestricted cash on