Chimera Investment (CIM) Q2 2024 earnings summary

Executive summary

• Book value per share for Q2 2024 was $21.27, with a 1.4% economic return and a 6% dividend increase to $0.35 per share.

• Issued $65 million of 9% unsecured senior notes, received inaugural investment-grade rating, and completed a 1-for-3 reverse stock split.

• Actively managed portfolio with significant agency and non-agency investments, including RPL and RMBS purchases.

• Sponsored first RPL securitization since May 2023 and committed to purchase a pool of RPLs.

• Book value remained stable despite higher interest rates and market volatility.

Financial highlights

• GAAP net income for Q2 2024 was $33.9 million ($0.41–$0.42 per share); earnings available for distribution were $30.3 million ($0.37 per share).

• Economic net interest income for Q2 2024 was $72.4–$73 million, with a net interest margin of 2.3%.

• Return on average equity for Q2 2024 was 8.57%; economic net interest income return on equity was 10.81–11.1%.

• GAAP leverage at quarter end was 3.8:1; recourse leverage was 1.0:1.

• Average yield on interest-earning assets was 5.9%; average cost of funds was 4.2–4.24%.

Outlook and guidance

• Management expects to continue acquiring and securitizing mortgage loans, focusing on call optimization and maintaining low leverage.

• Hedges are positioned for uncertain rate environments, with flexibility if the Fed holds rates higher through 2025.

• Fed rate cut expectations depend on inflation trends; management remains optimistic about future performance.