Chimera Investment Corporation (NYSE:CIM, Financial) today announced its financial results for the second quarter ended June 30, 2023.
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Financial Highlights:
- 2ND QUARTER GAAP NET INCOME OF $0.08 PER DILUTED COMMON SHARE
- 2ND QUARTER EARNINGS AVAILABLE FOR DISTRIBUTION(1) OF $0.12 PER DILUTED COMMON SHARE.
- GAAP BOOK VALUE OF $7.29 PER COMMON SHARE
Business Highlights:
Second Quarter
- Repurchased 5.8 million shares for $33 million at an average price of $5.66 per share.
- Settled $475 million of non-qualifying investor owned residential mortgage loans and $160 million of seasoned re-performing residential mortgage loans and contributed them to securitizations.
-
Sponsored five securitizations during the quarter:
- $451 million CIM 2023-R3
- $67 million CIM 2023-NR2
- $394 million CIM 2023-R4
- $236 million CIM 2023-I1
- $239 million CIM 2023-I2
- Reduced our recourse financing exposure by $509 million and replaced it with non-recourse financing.
“We believe that the steps we have taken during the first half of the year have put us in a good position to reduce our financing costs as well as to take advantage of future investment opportunities”, said Phillip Kardis, CEO.
(1) | Earnings available for distribution per adjusted diluted common share is a non-GAAP measure. See additional discussion on page 6. |
Other Information
Chimera Investment Corporation is a publicly traded real estate investment trust, or REIT, that is primarily engaged in the business of investing directly or indirectly through its subsidiaries, on a leveraged basis, in a diversified portfolio of mortgage assets, including residential mortgage loans, Non-Agency RMBS, Agency CMBS, Agency RMBS, and other real estate related securities.
CHIMERA INVESTMENT CORPORATION | ||||||
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION | ||||||
(dollars in thousands, except share and per share data) | ||||||
(Unaudited) | ||||||
June 30, 2023 | December 31, 2022 | |||||
Cash and cash equivalents | $ | 200,940 | $ | 264,600 | ||
Non-Agency RMBS, at fair value (net of allowance for credit losses of $13 million and $7 million, respectively) | 1,092,205 | 1,147,481 | ||||
Agency MBS, at fair value | 136,326 | 430,944 | ||||
Loans held for investment, at fair value | 11,929,537 | 11,359,236 | ||||
Accrued interest receivable | 71,281 | 61,768 | ||||
Other assets | 73,026 | 133,866 | ||||
Derivatives, at fair value | 6,328 | 4,096 | ||||
Total assets (1) | $ | 13,509,643 | $ | 13,401,991 | ||
Liabilities: | ||||||
Secured financing agreements ($3.9 billion and $4.7 billion pledged as collateral, respectively, and includes $354 million and $374 million at fair value, respectively) | $ | 2,686,522 | $ | 3,434,765 | ||
Securitized debt, collateralized by Non-Agency RMBS ($262 million and $276 million pledged as collateral, respectively) | 77,195 | 78,542 | ||||
Securitized debt at fair value, collateralized by Loans held for investment ($11.4 billion and $10.0 billion pledged as collateral, respectively) | 8,041,276 | 7,100,742 | ||||
Payable for investments purchased | 7,071 | 9,282 | ||||
Accrued interest payable | 37,425 | 30,696 | ||||
Dividends payable | 52,344 | 64,545 | ||||
Accounts payable and other liabilities | 28,407 | 16,616 | ||||
Total liabilities (1) | $ | 10,930,240 | $ | 10,735,188 | ||
Commitments and Contingencies (See Note 15) | ||||||
Stockholders' Equity: | ||||||
Preferred Stock, par value of $0.01 per share, 100,000,000 shares authorized: | ||||||
8.00% Series A cumulative redeemable: 5,800,000 shares issued and outstanding, respectively ($145,000 liquidation preference) | $ | 58 | $ | 58 | ||
8.00% Series B cumulative redeemable: 13,000,000 shares issued and outstanding, respectively ($325,000 liquidation preference) | 130 | 130 | ||||
7.75% Series C cumulative redeemable: 10,400,000 shares issued and outstanding, respectively ($260,000 liquidation preference) | 104 | 104 | ||||
8.00% Series D cumulative redeemable: 8,000,000 shares issued and outstanding, respectively ($200,000 liquidation preference) | 80 | 80 | ||||
Common stock: par value $0.01 per share; 500,000,000 shares authorized, 226,344,682 and 231,824,192 shares issued and outstanding, respectively | 2,263 | 2,318 | ||||
Additional paid-in-capital | 4,289,449 | 4,318,388 | ||||
Accumulated other comprehensive income | 210,674 | 229,345 | ||||
Cumulative earnings | 4,132,332 | 4,038,942 | ||||
Cumulative distributions to stockholders | (6,055,687 | ) | (5,922,562 | ) | ||
Total stockholders' equity | $ | 2,579,403 | $ | 2,666,803 | ||
Total liabilities and stockholders' equity | $ | 13,509,643 | $ | 13,401,991 | ||
(1) The Company's consolidated statements of financial condition include assets of consolidated variable interest entities, or VIEs, that can only be used to settle obligations and liabilities of the VIE for which creditors do not have recourse to the primary beneficiary (Chimera Investment Corporation). As of June 30, 2023, and December 31, 2022, total assets of consolidated VIEs were $11,116,487 and $10,199,266, respectively, and total liabilities of consolidated VIEs were $7,756,156 and $6,772,125, respectively. |
Net Income (Loss) | |||||||||||||
(dollars in thousands, except share and per share data) | |||||||||||||
(unaudited) | |||||||||||||
For the Quarters Ended | For the Six Months Ended | ||||||||||||
June 30, 2023 | March 31, 2023 | June 30, 2023 | June 30, 2022 | ||||||||||
Net interest income: | |||||||||||||
Interest income (1) | $ | 196,859 | $ | 189,250 | $ | 386,109 | $ | 397,532 | |||||
Interest expense (2) | 131,181 | 119,615 | 250,796 | 142,939 | |||||||||
Net interest income | 65,678 | 69,635 | 135,313 | 254,593 | |||||||||
Increase (decrease) in provision for credit losses | 2,762 | 3,062 | 5,824 | 4,737 | |||||||||
Other investment gains (losses): | |||||||||||||
Net unrealized gains (losses) on derivatives | 17,994 | (8,551 | ) | 9,443 | (1,618 | ) | |||||||
Realized gains (losses) on derivatives | (6,822 | ) | (34,134 | ) | (40,957 | ) | — | ||||||
Periodic interest cost of swaps, net | 4,159 | 2,819 | 6,977 | — | |||||||||
Net gains (losses) on derivatives | 15,331 | (39,866 | ) | (24,537 | ) | (1,618 | ) | ||||||
Net unrealized gains (losses) on financial instruments at fair value | 6,954 | 64,592 | 71,546 | (609,412 | ) | ||||||||
Net realized gains (losses) on sales of investments | (21,758 | ) | (5,264 | ) | (27,022 | ) | — | ||||||
Gains (losses) on extinguishment of debt | 4,039 | 2,309 | 6,348 | (2,897 | ) | ||||||||
Other investment gains (losses) | (421 | ) | 117 | (303 | ) | 980 | |||||||
Total other gains (losses) | 4,145 | 21,888 | 26,032 | (612,947 | ) | ||||||||
Other expenses: | |||||||||||||
Compensation and benefits | 7,677 | 10,491 | 18,168 | 20,211 | |||||||||
General and administrative expenses | 6,471 | 5,778 | 12,247 | 11,657 | |||||||||
Servicing and asset manager fees | 8,408 | 8,417 | 16,825 | 18,607 | |||||||||
Transaction expenses | 8,456 | 6,409 | 14,865 | 10,531 | |||||||||
Total other expenses | 31,012 | 31,095 | 62,105 | 61,006 | |||||||||
Income (loss) before income taxes | 36,049 | 57,366 | 93,416 | (424,097 | ) | ||||||||
Income taxes | 25 | — | 26 | 24 | |||||||||
Net income (loss) | $ | 36,024 | $ | 57,366 | $ | 93,390 | $ | (424,121 | ) | ||||
Dividends on preferred stock | 18,438 | 18,438 | 36,875 | 36,845 | |||||||||
Net income (loss) available to common shareholders | $ | 17,586 | $ | 38,928 | $ | 56,515 | $ | (460,966 | ) | ||||
Net income (loss) per share available to common shareholders: | |||||||||||||
Basic | $ | 0.08 | $ | 0.17 | $ | 0.24 | $ | (1.95 | ) | ||||
Diluted | $ | 0.08 | $ | 0.17 | $ | 0.24 | $ | (1.95 | ) | ||||
Weighted average number of common shares outstanding: | |||||||||||||
Basic | 231,628,141 | 231,994,620 | 231,810,368 | 236,156,868 | |||||||||
Diluted | 233,867,501 | 235,201,614 | 234,690,759 | 236,156,868 | |||||||||
(1) Includes interest income of consolidated VIEs of $149,674 and $140,209 for the quarters ended June 30, 2023 and 2022, respectively, and $289,576 and $271,275 for the six months ended June 30, 2023 and 2022, respectively. |
(2) Includes interest expense of consolidated VIEs of $72,624 and $50,193 for the quarters ended June 30, 2023 and 2022, respectively, and $132,776 and $92,684 for the six months ended June 30, 2023 a |
