PART I. FINANCIAL INFORMATION [Item 1. Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) The unaudited consolidated financial statements for the quarter ended March 31, 2025 show a net income of $167.3 million and total assets of $13.2 billion **Financial Metric (in thousands)** | Financial Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | $13,205,326 | $13,116,490 | | **Total Liabilities** | $10,561,262 | $10,590,301 | | **Total Stockholders' Equity** | $2,644,064 | $2,526,189 | **Income Statement Item (in thousands)** | Income Statement Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net Interest Income** | $69,219 | $65,106 | | **Total Other Income (Losses)** | $137,284 | $88,366 | | **Total Other Expenses** | $34,062 | $22,663 | | **Net Income** | $167,297 | $129,454 | | **Net Income Available to Common Shareholders** | $145,940 | $111,016 | | **Diluted EPS** | $1.77 | $1.36 | **Cash Flow Activity (in thousands)** | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $48,799 | $57,274 | | **Net Cash from Investing Activities** | ($175,325) | $248,336 | | **Net Cash from Financing Activities** | $295,876 | ($358,336) | | **Net Change in Cash** | $169,350 | ($52,726) | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes detail accounting policies, VIE consolidation, and valuation methods for the company's mortgage assets and related financing - The company is an internally managed REIT primarily investing in a diversified portfolio of mortgage assets, including residential mortgage loans, Non-Agency RMBS, and Agency RMBS[30](index=30&type=chunk) - The company consolidates Variable Interest Entities (VIEs) from its securitization transactions where it is determined to be the primary beneficiary; as of March 31, 2025, total assets of consolidated VIEs were **$10.1 billion** and total liabilities were **$7.0 billion**[13](index=13&type=chunk)[36](index=36&type=chunk)[188](index=188&type=chunk) **Portfolio Summary (Fair Value, in thousands)** | Portfolio Summary (Fair Value) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Non-Agency RMBS | $1,059,840 | $1,064,169 | | Agency MBS | $656,335 | $519,218 | | Loans held for investment | $10,983,840 | $11,196,678 | - The allowance for credit losses on Non-Agency RMBS increased to **$31.8 million** as of March 31, 2025, from **$28.4 million** at year-end 2024, primarily due to deterioration in cash flows on certain investments[65](index=65&type=chunk)[67](index=67&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=67&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 performance, highlighting net income of $146 million, strategic securitizations, and a disciplined portfolio approach - The company's investment portfolio at fair value as of March 31, 2025, was composed of approximately **87%** residential mortgage loans, **8%** Non-Agency RMBS, and **5%** Agency MBS[249](index=249&type=chunk) - Key business highlights for Q1 2025 include organically generating over **$187 million** in capital, investing **$149 million** in Agency Pass-through securities, and generating **$9 million** in new revenue from investment management services[253](index=253&type=chunk)[265](index=265&type=chunk)[278](index=278&type=chunk) **Key Metrics** | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | **GAAP Net Income (Loss) to Common** | $145.9M | ($168.3M) | $111.0M | | **GAAP Diluted EPS** | $1.77 | ($2.07) | $1.36 | | **Earnings Available for Distribution** | $33.5M | $30.4M | $30.6M | | **EAD per Adjusted Diluted Share** | $0.41 | $0.37 | $0.37 | | **Dividend Declared per Common Share** | $0.37 | $0.37 | $0.33 | - The company's GAAP recourse leverage ratio remained stable at **1.2:1** at the end of Q1 2025, consistent with year-end 2024[353](index=353&type=chunk)[370](index=370&type=chunk) [Results of Operations](index=78&type=section&id=Results%20of%20Operations) Net income available to common shareholders reached $146 million in Q1 2025, driven by significant unrealized gains on financial instruments - The QoQ increase in net income was primarily driven by a **$310 million** positive swing in unrealized gains on financial instruments at fair value[290](index=290&type=chunk) - The YoY increase in net income was mainly due to a **$52 million** increase in net unrealized gains on financial instruments and **$9 million** in new investment management fees, partially offset by a **$13 million** decrease in net gains on derivatives[291](index=291&type=chunk) **Net Interest Income (in thousands)** | (in thousands) | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | **GAAP Net Interest Income** | $69,219 | $65,824 | $65,106 | | **Economic Net Interest Income (Non-GAAP)** | $72,304 | $69,197 | $68,001 | [Liquidity and Capital Resources](index=97&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity improved with cash increasing by $169 million to $253 million, supported by strong financing activities - Cash and cash equivalents increased from **$84 million** at Dec 31, 2024 to **$253 million** at March 31, 2025[366](index=366&type=chunk) - Financing activities provided **$296 million** in cash, primarily from **$164 million** in net proceeds from secured financing agreements and **$780 million** in proceeds from securitized debt borrowings, offset by **$597 million** in repayments[369](index=369&type=chunk) - The company has entered into non-MTM (mark-to-market) and limited-MTM financing facilities totaling **$915 million** and **$504 million**, respectively, to reduce the risk of margin calls from price volatility[375](index=375&type=chunk) - The company has an authorized share repurchase program of **$250 million**, under which no shares were repurchased in Q1 2025, and an at-the-market (ATM) sales program with **$426 million** remaining capacity[386](index=386&type=chunk)[387](index=387&type=chunk)[388](index=388&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=108&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks include credit, interest rate, and prepayment risk, managed through hedging and diligent underwriting - The company's primary market risks are identified as credit risk, interest rate risk, prepayment risk, extension risk, basis risk, and market risk[417](index=417&type=chunk) - Credit risk is managed through independent reviews of mortgage files, obtaining representations and warranties from sellers, and closely monitoring credit loss expectations[422](index=422&type=chunk) **Interest Rate Sensitivity Analysis** | Change in Interest Rate | Projected % Change in Net Interest Income | Projected % Change in Market Value | | :--- | :--- | :--- | | +100 Basis Points | (9.23)% | (5.47)% | | +50 Basis Points | (4.56)% | (2.82)% | | -50 Basis Points | 4.78% | 3.00% | | -100 Basis Points | 9.77% | 6.23% | - The company employs a "Three Layers of Defense Approach" to Enterprise Risk Management, involving business units, an independent risk management unit, and third-party internal auditors[451](index=451&type=chunk) [Item 4. Controls and Procedures](index=119&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[456](index=456&type=chunk) - There were no material changes to the company's internal control over financial reporting during the first quarter of 2025[457](index=457&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=119&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material legal proceedings for the period - The company reported no legal proceedings[459](index=459&type=chunk) [Item 1A. Risk Factors](index=119&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's 2024 Form 10-K were reported - There have been no material changes to the risk factors set forth in the company's Form 10-K for the year ended December 31, 2024[460](index=460&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=119&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase any common stock during the quarter under its authorized $250 million share repurchase program - The company has a **$250 million** share repurchase program authorized by the Board of Directors, which includes both common and preferred stock[461](index=461&type=chunk) - No common stock was repurchased during the quarter ended March 31, 2025[463](index=463&type=chunk) [Item 5. Other Information](index=121&type=section&id=Item%205.%20Other%20Information) The company reports no other information for this item - None reported[466](index=466&type=chunk) [Item 6. Exhibits](index=121&type=section&id=Item%206.%20Exhibits) This section indexes all exhibits filed with the Form 10-Q, including corporate governance documents and officer certifications

Financial Data and Key Metrics Changes - Earnings available for distribution improved by 11% and book value increased by 7.4% with an economic return of 9.2% for the quarter [6][13] - GAAP net income for the first quarter was $145.9 million or $1.77 per share, while economic net interest income was $72.3 million [13][14] - The yield on average interest-earning assets was 5.9% and the average cost of funds was 4.4%, resulting in a net interest spread of 1.5% [14] Business Line Data and Key Metrics Changes - Third-party loans under management by Palisades Advisory Services increased by 43% year over year, reaching nearly $24 billion [7] - The company managed a total of nearly $37 billion in assets, including on-balance sheet assets and those managed for others [7] - The company executed impactful balance sheet moves, including cash-out refinancing that unlocked $187 million [8][27] Market Data and Key Metrics Changes - National home price growth was 3.9% year over year, with varying performance across regions [21] - Existing home sales declined to a 4 million unit annualized pace, marking the slowest first quarter since 2009 [21] - Delinquency rates remained stable at 8.9%, with prepayments decreasing to 5.5% [23] Company Strategy and Development Direction - The company aims to build a hybrid mortgage REIT that is resilient and diversified, focusing on diversifying the portfolio and growing recurring fee income [11][30] - The strategy includes adding Agency RMBS assets and evaluating MSR opportunities to generate attractive returns [29][30] - The company is focused on disciplined risk management and thoughtful portfolio construction [30] Management's Comments on Operating Environment and Future Outlook - Management noted that despite market volatility, the company is holding steady and expects to continue growing third-party loans under management [10] - The outlook for the third-party business remains positive, with expectations for growth depending on the mortgage market [42] - Management expressed caution regarding capital deployment due to ongoing macroeconomic uncertainty [29] Other Important Information - The company ended the quarter with $697 million in total cash and unencumbered assets [14] - The company refinanced two structured repo lines, extending maturities and lowering costs, which released an additional $100 million in cash [26][55] Q&A Session Summary Question: Clarification on book value performance - Management indicated that book value was down about 40 basis points as of the beginning of the second quarter [33] Question: Timing for deploying freed-up investment capital - Approximately 33% to 40% of the $187 million has been deployed, with a focus on building liquidity [35][36] Question: Outlook for third-party business growth - Management is bullish on growth potential, depending on the mortgage market and new client acquisitions [42] Question: Sensitivity to higher delinquency rates - Management noted that delinquencies in the RPL portfolio are stable and not a major concern, while monitoring trends in non-QM portfolios [60][63] Question: Details on new loan facilities and advance rates - Management did not disclose specific advance rates but confirmed that the facilities are structured repo facilities with banking relationships [64][66]

Financial Data and Key Metrics Changes - Earnings available for distribution improved by 11% and book value increased by 7.4% with an economic return of 9.2% for the quarter [6] - GAAP net income for the first quarter was $145.9 million or $1.77 per share, while GAAP book value at the end of the quarter was $21.17 per share [13] - Economic net interest income for the first quarter was $72.3 million with a yield on average interest-earning assets of 5.9% and an average cost of funds of 4.4%, resulting in a net interest spread of 1.5% [14] Business Line Data and Key Metrics Changes - Third-party loans under management by Palisades Advisory Services increased by 43% year over year, reaching nearly $24 billion [7] - The company executed impactful balance sheet moves, including cash-out refinancing that unlocked $187 million [8] - The company settled $100 million in residential transition loans during the quarter, expecting mid-teen levered returns [9] Market Data and Key Metrics Changes - National home price growth was 3.9% year over year, with varying performance across regions [22] - Existing home sales declined to a 4 million unit annualized pace, marking the slowest first quarter since 2009 [22] - Delinquency rates remained stable at 8.9% for the re-performing loan portfolio, with prepayments at 5.5% [24] Company Strategy and Development Direction - The company aims to build a hybrid mortgage REIT that is resilient and diversified, focusing on diversifying the portfolio and growing recurring fee income [11][32] - The strategy includes adding Agency RMBS assets and evaluating MSR opportunities to generate attractive returns [31] - The company is focused on disciplined risk management and thoughtful portfolio construction to support attractive risk-adjusted returns [32] Management's Comments on Operating Environment and Future Outlook - Management noted that despite market volatility, the company is holding steady and expects to continue growing third-party loans under management [10] - The current book value is estimated to be flat to slightly down, with a focus on building liquidity [10][36] - Management expressed cautious optimism regarding the growth potential of the third-party business, depending on the mortgage market [42] Other Important Information - The company ended the quarter with $697 million in total cash and unencumbered assets, enhancing liquidity [14] - The company refinanced two structured repo lines, extending maturities and lowering costs, which unlocked additional cash for investment [27] Q&A Session Summary Question: Clarification on book value performance - Management indicated that book value was down about 40 basis points as of the latest update [35] Question: Timing for deploying freed-up investment capital - Approximately 33% to 40% of the $187 million has been deployed, with a focus on building liquidity [36][37] Question: Outlook for third-party business growth - Management is bullish on growth potential, depending on the mortgage market and client acquisition [42] Question: Sensitivity to higher delinquency rates - Management noted that delinquencies in the re-performing loan portfolio are stable and not considered high for that product type [58][62] Question: Details on new loan facilities and advance rates - Management did not disclose specific advance rates but confirmed that the facilities are structured repo facilities with limited mark-to-market features [63][65]

Q1 2025 Highlights - Book value per share increased by 74% from $1972 in Q4 2024 to $2117 in Q1 2025[13] - Earnings Available for Distribution (EAD) was $041 per share[13] - Economic Return was 92%[13] - Dividends declared were $037 per share[13] Securitization and Investments - Sponsored a $288 million Non-QM securitization (CIM 2025-I1)[13] - Re-securitized $646 million of loans extracting $187 million of capital for reinvestment[13] - Purchased $149 million of Agency specified pools in March[13] - Settled $100 million of residential transition loans (RTL) during the quarter with an 89% net rate[13] Financing and Hedging - Extended a maturing non-mark-to-market facility to February 2027[13] - Refinanced a maturing non-mark-to-market secured repo facility at a lower interest rate[13] - Converted the remaining $500 million swaption position into a 1-year swap with a fixed pay rate of 345%[13] - Added $155 million of SOFR swap futures with a par equivalent pay fixed rate of 384%[13] - Purchased a $10 billion 2-year interest rate cap with a strike rate of 395%[13] Portfolio and Loan Performance - Total Current Unpaid Principal Balance (UPB) of residential mortgage loans is $113 billion[23] - Weighted Average Loan Size is $110K[23] - Weighted Average Coupon is 601%[23] - 60+ Days Delinquency rate is 92%[23]

CHIMERA INVESTMENT CORPORATION REPORTS 1ST QUARTER 2025 EARNINGS Investor Relations 888-895-6557 www.chimerareit.com FOR IMMEDIATE RELEASE NEW YORK - (BUSINESS WIRE) - Chimera Investment Corporation (NYSE:CIM) today announced its financial results for the first quarter ended March 31, 2025. PRESS RELEASE NYSE: CIM CHIMERA INVESTMENT CORPORATION 630 Fifth Ave, Suite 2400 New York, New York 10111 CHIMERA INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION Financial Highlights : (1) (2) Earni ...

Core Viewpoint - SolarBank Corporation has secured up to US$100 million in project-based financing from CIM Group to accelerate its growth as an independent power producer, focusing on a portfolio of 97 MW of solar power projects in the U.S. [1][2] Group 1: Financing Details - The financing will be structured as a preferred equity investment into a new joint venture entity called New HoldCo, formed between CIM and SolarBank's subsidiary, Abundant Solar Power Inc. [1][2] - SolarBank will retain a majority ownership interest in 21 solar energy projects with a total capacity of 97 MW, assuming full funding is achieved [2]. - CIM will acquire non-convertible preferred equity interests in New HoldCo and will receive a semi-annual coupon of 3% on the aggregate investment [4]. Group 2: Project Structure and Operations - New HoldCo will purchase membership interests of project companies that own the 97 MW capacity from ASP, with a payment structure of 20% at mechanical completion and 80% at substantial completion of each project [2][4]. - Each project is expected to sell investment tax credits (ITCs) to creditworthy third-party buyers under tax credit transfer agreements [3]. Group 3: Company Background - SolarBank Corporation focuses on developing renewable and clean energy projects, including solar, Battery Energy Storage Systems (BESS), and EV Charging projects, with a development pipeline exceeding one gigawatt [8]. - CIM Group has a history of delivering over $60 billion in essential real estate and infrastructure projects, emphasizing community impact and environmental sustainability [7].

Group 1 - The Chimera Investment Corporation 9.0% senior notes due 2029 (NYSE: CIMN) were previously assigned a 'Buy' rating due to their attractive coupon, seniority in the capital structure, and favorable risk/reward profile [1] - Binary Tree Analytics (BTA) focuses on providing transparency and analytics for capital markets instruments, particularly in closed-end funds (CEFs), exchange-traded funds (ETFs), and special situations, aiming for high annualized returns with low volatility [1] Group 2 - The article expresses the author's personal opinions and indicates a beneficial long position in CIMN shares through various means [2]

Group 1 - The article suggests that investors should prepare to invest in preferred stock and baby bonds due to anticipated interest rate hikes by the Federal Reserve [1] - The author highlights a significant background in nuclear engineering and environmental engineering, indicating a strong analytical foundation for investment decisions [1] Group 2 - The article includes a disclosure of long positions in various preferred stocks, indicating a strategic investment approach [2] - It emphasizes that past performance does not guarantee future results, reflecting a cautious perspective on investment outcomes [3]

Core Viewpoint - Chimera Investment (CIM) shares experienced a significant rally of 9.7%, closing at $11.49, following a broader market rally driven by optimism around tariff pauses [1][2] Company Performance - Chimera is expected to report quarterly earnings of $0.38 per share, reflecting a year-over-year increase of 5.6%, with revenues projected at $70.4 million, an 8.1% increase from the previous year [3] - The consensus EPS estimate for Chimera has remained unchanged over the last 30 days, indicating stability in earnings expectations [4] Market Context - The stock price surge is linked to Trump's announcement of a 90-day pause on reciprocal tariffs for most trading partners, which alleviates immediate trade war fears and improves economic outlook [2] - The tariff pause is anticipated to ease cost pressures, enhancing margins and profitability for mREIT stocks, including Chimera [2] Industry Comparison - Chimera belongs to the Zacks REIT and Equity Trust industry, where another stock, Angel Oak Mortgage (AOMR), closed 4.8% higher at $8.03, despite a -20.1% return over the past month [4] - Angel Oak's consensus EPS estimate has remained unchanged at $0.27, representing a year-over-year change of 145.5% [5]

Core Insights - The preferred stock of Chimera (NYSE: CIM.PR.D) was recommended for its 10.0% dividend yield and a significant margin of safety in the dividend [1] Group 1 - The preferred stock has provided outstanding returns since the initial recommendation [1] - The author has a background in chemical engineering and economics, indicating a strong analytical foundation for investment decisions [1] - The author emphasizes the importance of fundamental and technical analysis in investment strategies, particularly using options for both investing and trading [1]