Cherry Hill Mortgage’s 29% Premium Deal: $9B Merger Opens Door to Bigger Upside – Quarterly Update Report

MITT Deal Unlocks Value and Preserves Further Upside arsenic 2Q26 EAD Beats Expectations

• The MITT transaction materially improves worth realization for CHMI shareholders portion preserving meaningful information successful the combined platform. CHMI entered into a definitive statement to beryllium acquired by TPG Mortgage Investment Trust (MITT), with closing targeted for 4Q26. The $3.10 signing worth represents a 29% premium to CHMI's unaffected $2.41 stock terms and astir 0.98x June 30 BVPS of $3.16, portion astir 30% of announced information is currency and CHMI holders clasp astir 27% ownership of the combined company. Through the fixed 0.3063 speech ratio, the banal constituent provides some near-term worth realization and continued vulnerability to MITT's earnings, publication worth and imaginable rerating pursuing closing.

• Strategically, the merger creates a larger and much diversified residential owe REIT with a clearer way to net and valuation upside. The combined concern portfolio is expected to full astir $9.0 billion, portion absorption expects $7-$9 cardinal of yearly operating efficiencies, 2027 net accretion and little pro forma economical leverage of astir 2.9x. TPG's nonstop ~$20 cardinal / $0.52-per-share currency contribution, proprietary securitization capabilities and acquisition originating, acquiring and managing MSRs adhd further support, with greater scale, little portion costs and broader capital-allocation flexibility providing aggregate avenues for worth instauration crossed the combined platform.

• 2Q26 EAD bushed expectations arsenic stronger RMBS transportation and dollar-roll income drove the champion quarterly halfway net show since 1Q25. EAD accrued to $0.15/share from $0.14 successful 1Q26 and $0.11 successful 4Q25, portion dividend sum expanded to astir 1.5x connected the $0.10 quarterly payout. The stronger-than-expected people supported an upward revision successful the Street's 2026E EAD estimation to $0.59/share from $0.55, with existent estimates of $0.15/share for some 3Q26E and 4Q26E.

• Lower backing costs and wider RMBS spreads improved the prime of 2Q26 net contempt higher prepayments and humble book-value pressure. Net involvement income roseate to $4.7 million, RMBS nett involvement dispersed widened to astir 3.45% from 2.90%, and aggregate leverage declined to 5.02x from 5.49x, portion unrestricted currency accrued to $52.1 cardinal from $46.7 million. Offsetting these gains, RMBS CPR accrued to 9.7%, MSR CPR roseate to 6.3%, BVPS declined modestly to $3.16 from $3.23, and Real Genius required a $2.8 cardinal impairment.

• Valuation is present anchored by the transaction, portion MITT's valuation spread versus peers and merger synergies sphere meaningful upside. At $2.79, CHMI trades astatine astir 0.88x publication and 4.7x 2026E EAD, portion MITT trades astatine astir 0.6x publication and 5.6x NTM net versus adjacent averages of astir 0.9x and 6.4x. The fixed speech ratio truthful gives CHMI holders continued vulnerability to immoderate normalization successful MITT's valuation, portion expected yearly operating efficiencies, 2027 net accretion, and greater standard supply further avenues for worth creation.