Core Insights - Chimera Investment Corporation reported a decline in earnings available for distribution to $0.39 per diluted share, missing analysts' estimates by approximately 15% [1] - GAAP earnings per diluted share fell to $0.17, down from $0.41 in Q2 2024, while GAAP interest income revenue increased to $201.3 million [1] Financial Performance - Non-GAAP EPS for Q2 2025 was $0.39, below the estimate of $0.46, but up 5.4% from $0.37 in Q2 2024 [2] - GAAP EPS decreased by 58.5% year-over-year from $0.41 in Q2 2024 [2] - Economic net interest income (Non-GAAP) was $69.1 million, down 4.5% from $72.4 million in Q2 2024 [2] - The GAAP book value per share decreased to $20.91, with a modest economic return of 0.5% [7] Business Overview - Chimera specializes in investing in residential mortgage assets, focusing on generating income from a diversified asset portfolio [3] - The company invests primarily in mortgage-backed securities and residential mortgage loans, while also managing risk and regulatory compliance [3][4] Strategic Initiatives - The company is expanding its investment in Agency residential mortgage-backed securities, which increased from 3.7% of the portfolio at year-end 2024 to 18.2% by June 30, 2025, valued at approximately $2.68 billion [5] - Loans held for investment decreased from 88.0% to 74.6% of the book, while non-Agency RMBS allocations slightly dropped [6] - The company is pursuing acquisitions, including HomeXpress Mortgage Corporation, to enhance its origination capabilities [5][10] Risk Management - Cash reserves increased to $250 million, and secured financing agreements rose to $4.56 billion, indicating a focus on maintaining high liquidity [9] - GAAP leverage increased to 4.5x, reflecting larger Agency MBS positions, while serious delinquencies in the reperforming loan portfolio remained steady at 8.9% [10] Outlook - Management did not provide explicit financial guidance but indicated a focus on deploying recently unlocked capital, with 30% to 40% already invested early in Q3 2025 [14] - Key risks include rising market leverage and increasing non-QM delinquency rates, which may impact future performance [15]