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By Brandon Hornback
Cherry Hill Mortgage Investment Corp. (NYSE: CHMI) delivered stable performance in the third quarter, just as much friendlier market conditions should clear the way for valuation upside.
Core net interest income edged up slightly to $3.3 million, net interest spreads remained stable around 2.87%, and book value rose slightly to $3.36 during the third quarter of 2025. As policy shifts towards easier funding conditions and a pause in quantitative tightening, the macro backdrop for 2026 looks decidedly improved.
The income engine is also warming up. Earnings available for distribution (EAD) remained steady this quarter but are expected to climb to $0.58 per share by 2026, supported by lower repo costs, a portfolio tilt toward lower/mid-coupon Agency RMBS, and a seasoned MSR portfolio where prepayments remain capped at current levels.
Also emerging is a growth option with a quiet build: The Real Genius partnership is on track, using a modern direct-to-consumer funnel, designed to drive lead-sourced MSR growth, higher recapture, and data-informed cross-sell as mortgage rates trend lower. It’s early, but the infrastructure is in place for volume growth to enhance both fee and servicing economics.
Year-to-date G&A spending is below last year, and internalization costs are decreasing — a positive sign for operating leverage as spreads and marks continue to drive earnings.
Valuations speak for themselves, at 0.7x P/B and 4.1x 2026E EAD, CHMI looks primed for a re-rating, while its 16.9% yield continues to reward investors for patience.
Download the full report to see how funding tailwinds combined with a robust execution turn stability into upside.
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Read Exec Edge’s Initiation on Cherry Hill Here
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