CHMI's 2025 Report: A Test of Strategy in a Tough Mortgage Market

TINTON FALLS, NJ – February 18, 2026 – All eyes in the mortgage finance sector will turn to Cherry Hill Mortgage Investment Corporation (NYSE: CHMI) on February 25, when the company unveils its fourth-quarter and full-year 2025 financial results. The announcement, scheduled for after the market closes, represents more than just a routine financial disclosure; it is a critical litmus test of the company's strategic navigation through a year defined by stubborn interest rates, housing affordability crises, and significant market volatility.

Investors and analysts will be parsing the report and subsequent 5:00 pm ET conference call for insights into the real estate investment trust's (REIT) portfolio health, dividend sustainability, and management's outlook for 2026. The results will provide a key data point not only for CHMI stakeholders but also as a bellwether for the broader residential mortgage market.

A Look Back at a Turbulent 2025

Cherry Hill's journey through 2025 was a microcosm of the challenges facing the entire mortgage REIT sector. The year began with a strong first quarter, where the company reported earnings per share of $0.34, significantly beating analyst expectations. However, the subsequent quarters painted a picture of increasing pressure. By the second quarter, GAAP results showed a net loss of $0.03 per share, and by the third quarter, while GAAP net income returned to positive territory at $0.05 per share, the company's book value per share had eroded from $4.49 at the end of Q1 to $3.36 by the end of Q3.

A key point of concern for income-focused investors was the adjustment to the company's dividend. After maintaining a $0.15 per share quarterly dividend for the first half of the year, Cherry Hill reduced the payout to $0.10 per share for the third and fourth quarters. This decision brought the estimated total annual dividend for 2025 to $0.50, down from $0.60 in 2024.

This performance did not occur in a vacuum. The company's results directly reflect the macroeconomic headwinds that characterized 2025, forcing management to make difficult strategic decisions to balance risk and shareholder returns.

Navigating the "Higher for Longer" Rate Environment

The prevailing narrative of 2025 was the persistence of elevated interest rates. Initial hopes for significant rate cuts by the Federal Reserve dissipated as inflation proved sticky, leading the central bank to adopt a more cautious stance. Forecasts from the Mortgage Bankers Association and Fannie Mae were revised, with consensus settling on mortgage rates remaining in the mid-6% range for the year—higher than initially predicted.

This environment created a dual challenge for a company like Cherry Hill, which invests in and manages residential mortgage assets. Higher rates dampened the mortgage origination market, with the MBA revising its 2025 origination volume forecast down to $2.1 trillion. Simultaneously, it created significant volatility in the valuation of existing mortgage-backed securities (MBS), the core assets held by mREITs. Managing interest rate risk through sophisticated hedging strategies became paramount.

One of Cherry Hill's key strategic moves to counter these pressures was the internalization of its management, a process completed at the end of 2024. The company touted this move as a way to reduce operating expenses and better align management's interests with those of shareholders. The upcoming full-year 2025 results will be the first comprehensive look at the financial benefits of this structural change, and investors will expect management to quantify the cost savings and its impact on the bottom line.

The Dividend Question and Peer Benchmarks

For any REIT, the sustainability of its dividend is a primary concern for its investor base. Cherry Hill's conference call will undoubtedly feature pointed questions about the dividend's future. In the third quarter of 2025, the company's Earnings Available for Distribution (EAD) — a key metric for mREITs that measures cash available for dividends — was $0.09 per share. This figure was just shy of the newly reduced $0.10 dividend paid for the quarter, putting a spotlight on Q4 performance.

With analyst consensus for Q4 2025 earnings per share also sitting at $0.10, the margin for error appears slim. Investors will be listening for whether the company's EAD can consistently cover the current payout and for management's philosophy on capital allocation heading into 2026.

Adding another layer of pressure is the stellar performance reported by some of Cherry Hill's larger peers for 2025. Annaly Capital Management (NLY) posted a 20% economic return and a 40% total shareholder return for the year. Similarly, AGNC Investment Corp. (AGNC) delivered a 22.7% economic return and a 34.8% total stock return. While these companies operate on a different scale, their success in a difficult market sets a high benchmark and raises expectations for all players in the sector.

What to Watch for in the Full-Year Report

As the February 25th release approaches, market participants will focus on several key indicators to gauge Cherry Hill's health and future prospects:

• Earnings Available for Distribution (EAD): The primary focus will be on whether Q4 EAD sufficiently covers the $0.10 dividend, providing a signal of its sustainability.
• Book Value Per Share: After a decline through the first three quarters, any stabilization or recovery in book value will be seen as a positive sign of effective portfolio management.
• Portfolio Composition and Leverage: Details on shifts in the company's asset mix and any changes to its aggregate portfolio leverage (which stood at 5.3x in Q3) will reveal its risk appetite and strategic positioning.
• Management Outlook for 2026: Beyond the numbers, management's commentary on the housing market, interest rate trends, and their strategic plans for the coming year will be just as critical. A clear and confident roadmap can help bolster investor sentiment.
• Impact of Internalization: The report must provide clear evidence that the 2024 management internalization delivered the promised cost efficiencies and contributed positively to 2025's financial results.

The upcoming financial release is more than a backward-looking report card; it is a forward-looking statement of intent. For Cherry Hill Mortgage Investment Corporation, it is an opportunity to demonstrate its resilience and articulate a clear strategy for creating value in what promises to be another dynamic year for the U.S. mortgage market.