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Chimera Investment (CIM) 6 Nov 24 2024 Q3 Earnings call transcript

AInvestThursday, Nov 7, 2024 4:33 am ET
1min read

Victor Falvo, Head of Capital Markets, led Chimera Investment Corporation's Third Quarter 2024 Earnings Call, where executives discussed financial performance, strategic acquisitions, and market opportunities. The call highlighted the company's robust earnings and positive outlook for the future.

Financial Performance and Strategic Acquisitions

Chimera Investment Corporation reported a strong third quarter with GAAP net income of $113.7 million, driven by a robust housing market and strategic acquisitions. The company's economic return on GAAP book value was 6.8%, and it increased the quarterly dividend by 12% over the past two quarters. These results reflect Chimera's ability to navigate market conditions and seize opportunities effectively.

Market Opportunities and Strategic Acquisitions

Chimera's acquisition of the Palisades Group, an alternative asset manager specializing in residential mortgage credit, was a significant highlight. This acquisition will enable Chimera to provide fee-based asset management services to third parties, expand its capabilities, and add a new source of unsecured funding through the capital markets. The deal is expected to close in the fourth quarter and will bring Chimera's notional value of loans and real estate owned, advised, or managed to over $30 billion.

Market Outlook and Future Prospects

The Federal Reserve's decision to lower short-term interest rates and Chimera's strategic acquisitions are seen as positive for the company's future prospects. The robust housing market, low delinquency and default rates, and increasing investor demand for mortgage credit securities are key factors driving Chimera's growth. The company expects non-agency RMBS issuances to reach $100 billion in 2024, a 40% increase from 2023. This growth aligns with Chimera's residential credit strategy and its focus on generating attractive returns for shareholders.

Conclusion

Chimera Investment Corporation's third quarter earnings call underscored the company's strong financial performance, strategic acquisitions, and positive market outlook. The acquisition of the Palisades Group and the Federal Reserve's decision to lower interest rates are expected to further strengthen Chimera's position in the market and drive future growth. With a robust housing market and a focus on generating attractive returns for shareholders, Chimera is well-positioned for continued success.

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