Company: CIMO
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001409493-25-000028
Chunk: 11

Company: CHIMERA INVESTMENT CORP
Filing Date: 2025-11-06
Form: 10-Q
Item: Item 2
Chunk 11
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 cash balances, along with the short-term uninvested proceeds from our bond issuance, earned lower yields and created a temporary drag on earnings.

As a result of these strategic liquidity actions, our earnings available for distribution declined by approximately $0.02 per share to $0.37 per share during the quarter.

Consistent with prior quarters, yields on mortgage loans and securitized products continued to tighten. This trend persisted through the quarter, with spreads on the senior bonds within our securitizations, primarily reflected as securitized debt liabilities, tightening more significantly than the spreads on the underlying mortgage loan assets.

As a result, the fair values of both our mortgage loans and securitized debt increased during the quarter. However, because the valuation increase in securitized debt (a liability) exceeded the corresponding gains in mortgage asset values, the net effect was a modest decline in book value, as the asset appreciation only partially offset the liability impact.

The combination of higher valuations on securitized debt liabilities, along with elevated transaction and severance expenses during the quarter, contributed to a decrease in book value per share of 3.2%, to $20.24 as of September 30, 2025.

Strategy Outlook

We expect the reminder of the year in many ways to be a continuation of the first nine months, defined in part by policy uncertainty, tariff announcements, geopolitical risks, and U.S. fiscal concerns. We anticipate markets will continue to vacillate around labor, growth, and inflation data, alongside ongoing speculation with respect to the pace of monetary policy easing. 

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Against this backdrop, we are committed to maintaining flexibility, exploring opportunities to expand our platform capabilities, and strategically repositioning our investment portfolio. 

The completion of the HomeXpress Acquisition adds diversification of our existing revenue sources. It also gives us the ability to manufacture assets for investment in our portfolio and/or offered to managed portfolios. This optionality creates opportunities for the originated asset to be used to either support our investment strategy and/or support our dividend paying objectives.

The repositioning of our investment portfolio is an ongoing initiative that will take time to fully implement, as we adjust our strategy in response to changing market conditions by shifting our asset allocations across various asset classes as interest rate and credit cycles change over time. We are committed to diversifying the portfolio and finding ways to produce liquidity both organically and through our access to capital markets. We intend to maintain sufficient liquidity and optionality to capitalize on market opportunities aligned with our portfolio and business growth