Chimera Posts $194M Q3 Loss as Book Value Falls to $14.82
Chimera booked a $194M GAAP loss to common shareholders in Q3 as book value fell 16.5% to $14.82; earnings available for distribution were $0.38 a share.
Chimera Investment Corporation reported a GAAP net loss available to common shareholders of $193.7 million, or $2.31 a diluted share, for the quarter ended Sept. 30, the New York mortgage real estate investment trust said Thursday.
Earnings available for distribution, a non-GAAP measure the company uses to track portfolio cash generation, were $32.3 million, or $0.38 per adjusted diluted share. GAAP book value per common share fell to $14.82 from $17.75 at the end of the second quarter, a 16.5% decline. Economic return, measured as the change in book value plus the common dividend, was negative 13.98% for the quarter, Chimera said.
What drove the book-value drop
CEO Phillip J. Kardis II said significant credit-spread widening and interest-rate volatility put pressure on book value. The company said it repositioned its Agency RMBS portfolio toward higher-coupon securities, with about 90% of specified pools now carrying coupons of 5% or higher, and maintained cash of $357.2 million at quarter-end.
Interest income was $230.7 million and net interest income was $71.2 million in the quarter, according to the company’s consolidated statement of operations. An Associated Press snapshot of the same results cited a $172.2 million net loss, $2.31 a share, adjusted earnings of 38 cents, and revenue of $230.7 million.
Origination and Prism securitization
Chimera’s residential origination segment, primarily HomeXpress, funded $1.1 billion of loans in the quarter, up 27% from a year earlier. The segment posted a net loss of about $2 million and EBTDA of $439,000, the company said.
In the investment portfolio, Chimera committed to buy $797 million of loans for securitization during the quarter, bringing year-to-date purchases to $1.1 billion. After quarter-end, it completed an inaugural $291 million Prism securitization backed by HomeXpress loans. Shares trade on the New York Stock Exchange under the ticker CIM.
Related: FS KKR Q3 Net Investment Income Rises to $0.46 a Share.
Sources: Chimera Investment Corporation, Associated Press via Yahoo Finance
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