• GAAP Net Income: $113.7 million or $1.39 per share.

• GAAP Book Value: $22.35 per share at the end of the third quarter.

• Economic Return on GAAP Book Value: 6.8% for the third quarter; 15.6% year-to-date 2024.

• Earnings Available for Distribution: $29.9 million or $0.36 per share.

• Economic Net Interest Income: $71.5 million for the third quarter.

• Yield on Average Interest-Earning Assets: 6.1%.

• Average Cost of Funds: 4.5%.

• Net Interest Spread: 1.6%.

• Total Leverage: 3.9 to 1.

• Recourse Leverage: 1.2 to 1.

• Total Cash and Unencumbered Assets: $648 million at the end of the quarter.

• Common Stock Dividend: Increased to $0.37 per share in Q3, up from $0.35 in Q2 and $0.33 in Q1.

• Expenses (Excluding Servicing Fees and Transaction Expenses): $12.8 million for the third quarter.

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Release Date: November 06, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Chimera Investment Corp (NYSE:CIM) reported a GAAP net income of $113.7 million or $1.39 per share for the third quarter.

• The company increased its quarterly dividend by 12% over the past two quarters, reflecting confidence in its financial performance.

• Chimera Investment Corp (NYSE:CIM) successfully closed a $468 million securitization of seasoned RPLs, enhancing its capital structure.

• The acquisition of Palisades Group is expected to strengthen Chimera's residential credit expertise and provide new growth opportunities.

• The company has a strong cash position with $648 million in total cash and unencumbered assets, supporting liquidity and future investments.

Negative Points

• Chimera Investment Corp (NYSE:CIM) has seen a flat book value compared to the end of the second quarter, indicating limited growth in asset value.

• The company faces challenges in finding suitable opportunities in the home equity lending space, which could limit diversification.

• Interest rate volatility poses a risk to Chimera's portfolio, with potential impacts on net interest spread and earnings.

• The company's economic net interest spread is relatively low at 1.6%, which may constrain profitability.

• Chimera Investment Corp (NYSE:CIM) has significant exposure to floating rate liabilities, which could be affected by interest rate changes.

Q & A Highlights

Q: Can you discuss the opportunities in home equity lending and whether Chimera plans to participate in this area? A: Phillip Kardis, President and CEO, mentioned that Chimera is exploring the home equity lending space, which Palisades has experience in. However, they have not yet found a suitable opportunity to pursue.