Company: CIMO
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001628280-25-038345
Chunk: 14

Company: CHIMERA INVESTMENT CORP
Filing Date: 2025-08-06
Form: 10-Q
Item: Item 2
Chunk 14
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2025, as compared to $241 million for the six months ended June 30, 2024. The increase was primarily driven by an increase in interest expense on our secured financing agreements collateralized by Agency RMBS of $15 million, driven by higher borrowings to finance our Agency CMO and Agency Pass-through purchases during the six months ended June 30, 2025, as compared to the prior period. Additionally, the interest expense on our Long Term Debt increased to $7 million during the six months ended June 30, 2025 as compared to $1 million for the six months ended June 30, 2024, driven by our additional unsecured long term debt issuance. 

These increases were offset by a decrease in our average securitized debt balance of $486 million, which decreased our interest expense on Securitized debt by $1 million during the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. As we rebalanced our investment portfolio, we reduced our average secured financing agreements collateralized by Agency CMBS and Non-Agency RMBS, which combined with lower financing costs, decreased our interest expense on secured financing agreements collateralized by Agency CMBS and Non-Agency RMBS by $5 million during the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. 

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 derivatives 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 derivatives, which is presented as a part of Net gains (losses) on derivatives in our Consolidated Statements of Operations. Interest rate swaps and Swap futures are used to manage the increase in interest paid on secured financing agreements in a rising rate environment. Presenting the net contractual interest payments on interest rate derivatives with the interest paid on interest-bearing liabilities reflects our total contractual interest payments. We believe this presentation is useful to investors because it depicts the economic value of our investment strategy by showing all components of interest expense and net interest income of our investment portfolio. However, Economic net interest income should not be viewed in isolation and is not a substitute for net interest income computed in accordance with GAAP. Where indicated, interest expense, adjusting for any interest earned on