Why did CIMpD's Q4 earnings miss forecasts?

Chimera Investment Corporation's (CIM) Q4 earnings missed forecasts due to several key factors:

1. **Decline in Net Interest Income**: Chimera's net interest income (NII) decreased from $104.2 million in the previous quarter to $76.9 million, and from $154.6 million in the same quarter a year ago. This decline was primarily due to the impact of high-interest rates on the company's business. The yield on average interest-earning assets was 6%, while the average cost of funds was 4.5%. The reduction in NII reflects the challenging environment for mortgage REITs caused by rising interest rates and economic uncertainties.
2. **Provision for Credit Losses**: Chimera's provision for credit losses increased by $1.34 million, reaching $2.33 million in the previous quarter and $3.06 million a year ago. This indicates a growing risk profile and potential loan defaults, which can negatively impact earnings.
3. **Portfolio Changes and Asset Valuations**: Chimera made significant changes to its portfolio, including reducing its Agency RMBS and CMBS portfolios and decreasing its non-agency MBS portion. These changes may have led to temporary disruptions in earnings as the company adjusted to new investment strategies.

In summary, Chimera's Q4 earnings miss was primarily due to a decline in net interest income and increased provision for credit losses, influenced by the high-interest rate environment and portfolio adjustments.