Company: CIMO
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0001628280-25-006426
Chunk: 435

Company: CHIMERA INVESTMENT CORP
Filing Date: 2025-02-19
Form: 10-K
Item: Item 7
Chunk 435
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3.

Interest Expense

Interest expense decreased by $14 million, or 3%, to $496 million for the year ended December 31, 2024, as compared to $510 million for the year ended December 31, 2023. This decrease in interest expense for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily driven by a decrease in our average interest-bearing liabilities and the Federal Reserve's 100 basis points rate cut. 

As we rebalanced our investment portfolio, we reduced our average secured financing agreements collateralized by Agency CMBS, Non-Agency RMBS and Loans held for investment by $428 million, which combined with lower financing costs due to Fed rate cuts, decreased our interest expense on secured financing agreements collateralized by Loans held for investments, Non-agency RMBS, and Agency CMBS by $19 million, $20 million, and $5 million, respectively, during the year ended December 31, 2024, as compared to the year ended December 31, 2023. This was partially offset by an increase in interest expense on our secured financing agreements collateralized by Agency RMBS by $17 million, driven by higher borrowings to finance our Agency CMO purchases, and Long term debt expense of $7 million during the year ended December 31, 2024, as compared to the year ended December 31, 2023. Interest expense on our secured debt increased slightly by $1 million, to $294 million during the year ended December 31, 2024, as compared to $293 million in the prior year. Our average securitized debt balances decreased by $478 million during the year ended December 31, 2024, as compared to the year ended December 31, 2023, but we had an increase in our average yield on our debt of 20 basis points which primarily drove the slight increase in interest expense.

Economic Net Interest Income

Our Economic net interest income is a non-GAAP financial measure that equals GAAP net interest income adjusted for net periodic interest cost of interest rate swaps and excludes interest earned on cash. For the purpose of computing economic net interest income and ratios relating to cost of funds measures throughout this section, interest expense includes net payments on our interest rate swaps, which is presented as a part of Net gains (losses) on derivatives in our Consolidated Statements of Operations. Interest rate swaps are used to manage the increase in interest