CHIMERA INVESTMENT CORPORATION RELEASES 4TH QUARTER AND FULL YEAR 2016 EARNINGS

Released : February 14, 2017

  • 4TH QUARTER GAAP EARNINGS OF $1.17 PER COMMON SHARE
  • 4TH QUARTER CORE EARNINGS(1) OF $0.65 PER COMMON SHARE
  • FULL YEAR GAAP EARNINGS OF $2.92 PER COMMON SHARE UP FROM $1.25 PER COMMON SHARE IN 2015
  • FULL YEAR CORE EARNINGS OF $2.42 PER COMMON SHARE UP FROM $2.37 PER COMMON SHARE IN 2015
  • GAAP BOOK VALUE OF $15.87 PER COMMON SHARE UP FROM $15.70 PER COMMON SHARE IN 2015, COMPARED TO $16.18 IN 3RD QUARTER 2016

NEW YORK--(BUSINESS WIRE)-- “Chimera’s portfolio produced a positive total return despite a significant rise in long term interest rates in the fourth quarter of 2016,” said Matthew Lambiase, Chimera’s CEO and President. “Full year 2016 included meaningful new investments in securitized mortgage loans which helped us grow earnings. We finished our first calendar year as an internally managed company and remain committed to creating value for our shareholders.”

(1) Core earnings is a non-GAAP measure. See additional discussion on page 5.

 
Note: All per common share amounts presented on a diluted basis.
 

Other Information

Chimera Investment Corporation is a publicly traded real estate investment trust, or REIT, that is primarily engaged in real estate finance. We were incorporated in Maryland on June 01, 2007 and commenced operations on November 21, 2007. We invest, either directly or indirectly through our subsidiaries, in RMBS, residential mortgage loans, Agency CMBS, commercial mortgage loans, real estate-related securities and various other asset classes. We have elected and believe that we are organized and have operated in a manner that enables us to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, or the Code.

Please visit www.chimerareit.com and click on Investor Relations for additional information about us.

 
CHIMERA INVESTMENT CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands, except share and per share data)
    December 31, 2016   December 31, 2015
Assets:        
Cash and cash equivalents   $ 177,714   $ 114,062
Non-Agency RMBS, at fair value 3,330,063 3,675,841
Agency MBS, at fair value 4,167,754 6,514,824
Securitized loans held for investment, at fair value 8,753,653 4,768,416
Accrued interest receivable 79,697 66,247
Other assets 166,350 189,796
Derivatives, at fair value, net   9,677     15,460  
Total assets (1)   $ 16,684,908     $ 15,344,646  
Liabilities:
Repurchase agreements, MBS ($7.0 billion and $8.8 billion pledged as collateral, respectively) $ 5,600,903 $ 7,439,339
Securitized debt, collateralized by Non-Agency RMBS ($1.8 billion and $2.1 billion pledged as collateral, respectively) 334,124 529,415
Securitized debt at fair value, collateralized by loans held for investment ($8.8 billion and $4.8 billion pledged as collateral, respectively) 6,941,097 3,720,496
Payable for investments purchased 520,532 560,641
Accrued interest payable 48,670 37,432
Dividends payable 97,005 90,097
Accounts payable and other liabilities 16,694 11,404
Derivatives, at fair value   2,350     9,634  
Total liabilities (1)   $ 13,561,375     $ 12,398,458  
Stockholders' Equity:
Preferred Stock: par value $0.01 per share; 8% Series A cumulative redeemable; 100,000,000 shares authorized, 5,800,000 and 0 shares issued and outstanding, respectively ($145,000 liquidation preference) $ 58 $
Common stock: par value $0.01 per share; 300,000,000 shares authorized, 187,739,634 and 187,711,868 shares issued and outstanding, respectively 1,877 1,877
Additional paid-in-capital 3,508,779 3,366,568
Accumulated other comprehensive income 718,106 773,791
Cumulative earnings 2,443,184 1,891,239
Cumulative distributions to stockholders   (3,548,471 )   (3,087,287 )
Total stockholders' equity   $ 3,123,533     $ 2,946,188  
Total liabilities and stockholders' equity   $ 16,684,908     $ 15,344,646  
 
(1) The Company's consolidated statements of financial condition include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations and liabilities of the VIE for which creditors do not have recourse to the primary beneficiary (Chimera Investment Corporation). As of December 31, 2016 and December 31, 2015, total assets of consolidated VIEs were $10,761,954 and $7,031,278, respectively, and total liabilities of consolidated VIEs were $7,300,163 and $4,262,017, respectively.
 
 
CHIMERA INVESTMENT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except share and per share data)
  For the Year Ended
December 31, 2016   December 31, 2015   December 31, 2014
Net Interest Income:    
Interest income (1) $ 934,068 $ 872,737 $ 687,795
Interest expense (2)   347,857     259,365     147,785  
Net interest income   586,211     613,372     540,010  
Other-than-temporary impairments:
Total other-than-temporary impairment losses (9,589 ) (8,700 ) (8,713 )
Portion of loss recognized in other comprehensive income   (48,398 )   (58,744 )   (55,279 )
Net other-than-temporary credit impairment losses   (57,987 )   (67,444 )   (63,992 )
Other investment gains (losses):
Net unrealized gains (losses) on derivatives 50,093 67,385 (103,496 )
Realized gains (losses) on terminations of interest rate swaps (60,616 ) (98,949 )
Net realized gains (losses) on derivatives   (44,886 )   (83,073 )   (82,852 )
Net gains (losses) on derivatives   (55,409 )   (114,637 )   (186,348 )
Net unrealized gains (losses) on financial instruments at fair value 59,552 (158,433 ) 193,534
Net realized gains (losses) on sales of investments 18,155 77,074 91,709
Gain (loss) on deconsolidation (256 ) 47,846
Gains (losses) on Extinguishment of Debt   (477 )   (5,930 )   (2,184 )
Total other gains (losses)   21,821     (202,182 )   144,557  
Other income:
Other income   95,000         23,783  
Total other income   95,000         23,783  
Other expenses:
Management fees 24,609 32,514
Expense recoveries from Manager       (6,906 )   (8,936 )
Net management fees       17,703     23,578  
Provision for loan losses, net (232 )
Compensation and benefits 26,901 10,544
General and administrative expenses 17,516 31,633 20,403
Servicing Fees of consolidated VIEs 31,178 25,244 10,004
Deal Expenses   17,424     8,272     1,398  
Total other expenses   93,019     93,396     31,368  
Income (loss) before income taxes 552,026 250,350 589,207
Income taxes   83     1     2  
Net income (loss)   $ 551,943     $ 250,349     $ 589,205  
 
Dividend on preferred stock 2,449
             
Net income (loss) available to common shareholders   $ 549,494     $ 250,349     $ 589,205  
 
Net income (loss) per share available to common shareholders:            
Basic   $ 2.93     $ 1.25     $ 2.87  
Diluted   $ 2.92     $ 1.25     $ 2.87  
 
Weighted average number of common shares outstanding:            
Basic   187,728,634     199,563,196     205,450,095  
Diluted   188,024,838     199,650,177     205,508,769  
 
Dividends declared per share of common stock $ 2.44 $ 1.92 $ 1.80
 
(1) Includes interest income of consolidated VIEs of $678,623, $575,715, and $428,992 for the years ended December 31, 2016, 2015, and 2014 respectively.
(2) Includes interest expense of consolidated VIEs of $249,708, $191,922 and $119,103 for the years ended December 31, 2016, 2015, 2014 respectively.
 
 
For the Quarter Ended

 December 31, 2016 

 

 September 30, 2016 

 

 June 30, 2016 

 

 March 31, 2016 

    (dollars in thousands, except per share data)
Net Interest Income:
Interest income $ 260,823 $ 250,953 $ 221,096 $ 201,194
Interest expense   106,737     94,911     83,227     62,981  
Net interest income   154,086     156,042     137,869     138,213  
Other-than-temporary impairments:
Total other-than-temporary impairment losses (1,034 ) (993 ) (3,139 ) (4,423 )
Portion of loss recognized in other comprehensive income   (13,746 )   (10,581 )   (17,816 )   (6,255 )
Net other-than-temporary credit impairment losses   (14,780 )   (11,574 )   (20,955 )   (10,678 )
Net gains (losses) on derivatives 115,523 13,360 (47,755 ) (136,537 )
Net unrealized gains (losses) on financial instruments at fair value (20,664 ) 32,999 30,347 16,871
Gain (loss) on deconsolidation
Gain (loss) on Extinguishment of Debt 1,334 (45 ) (1,766 )
Net realized gains (losses) on sales of investments 11,121 3,079 6,631 (2,674 )
Other Income 95,000
Total other expenses   24,698     21,031     31,987     15,302  
Net income   $ 221,903     $ 172,817     $ 74,127     $ 83,098  
Dividend on preferred stock   $ 2,449     $     $     $  
Net income (loss) available to common shareholders   $ 219,454     $ 172,817     $ 74,127     $ 83,098  
Net income per common share-basic   $ 1.17     $ 0.92     $ 0.39     $ 0.44  
 

Core earnings

Core earnings is a non-GAAP measure and is defined as GAAP net income excluding unrealized gains on the aggregate portfolio, impairment losses, realized gains on sales of investments, realized gains or losses on futures, realized gains or losses on swap terminations, gain on deconsolidation, extinguishment of debt and certain other non-recurring gains or losses. As defined, core earnings include interest income and expense as well as realized losses on interest rate swaps used to hedge interest rate risk. Management believes that the presentation of core earnings is useful to investors because it can provide a useful measure of comparability to our other REIT peers, but has important limitations. We believe core earnings as described above helps evaluate our financial performance without the impact of certain transactions but is of limited usefulness as an analytical tool. Therefore, core earnings should not be viewed in isolation and is not a substitute for net income or net income per basic share computed in accordance with GAAP.

The following table provides GAAP measures of net income and net income per basic share available to common stockholders for the periods presented and details with respect to reconciling the line items to core earnings and related per average basic common share amounts:

 
For the Year Ended

 December 31, 2016 

 

 December 31, 2015 

 

 December 31, 2014 

(dollars in thousands, except per share data)
GAAP Net income available to common stockholders $ 549,494     $ 250,349     $ 589,205  
Adjustments:
Net other-than-temporary credit impairment losses 57,987 67,444 63,992
Net unrealized (gains) losses on derivatives (50,093 ) (67,385 ) 103,496
Net unrealized (gains) losses on financial instruments at fair value (59,552 ) 158,433 (193,534 )
Net realized (gains) losses on sales of investments (18,155 ) (77,074 ) (91,709 )
(Gains) losses on extinguishment of debt 477 5,930 2,184
Realized (gains) losses on terminations of interest rate swaps 60,616 98,949
Net realized (gains) losses on derivatives - Futures(1) 9,170 35,523 38,552
Total other (gains) losses (95,000 )   256     (71,629 )
Core Earnings $ 454,944     $ 472,425     $ 440,557  
         
GAAP net income per basic common share $ 2.93     $ 1.25     $ 2.87  
Core earnings per basic common share(2) $ 2.42     $ 2.37     $ 2.14  
 
 
For the Quarters Ended

December 31,
2016

 

September 30,
2016

 

June 30,
2016

 

March 31,
2016

 

December 31,
2015

(dollars in thousands, except per share data)
GAAP Net income available to common stockholders $ 219,454     $ 172,817     $ 74,127     $ 83,098     $ 115,380  
Adjustments:
Net other-than-temporary credit impairment losses 14,780 11,574 20,955 10,678 14,696
Net unrealized (gains) losses on derivatives (101,475 ) (27,628 ) (22,100 ) 101,110 (46,842 )
Net unrealized (gains) losses on financial instruments at fair value 20,664 (32,999 ) (30,347 ) (16,871 ) 69,793
Net realized (gains) losses on sales of investments (11,121 ) (3,079 ) (6,631 ) 2,674 (34,285 )
(Gains) losses on extinguishment of debt (1,334 ) 45 1,766 (8,906 )
Realized (gains) losses on terminations of interest rate swaps 60,158 458 (754 )
Net realized (gains) losses on Futures (1) (19,628 ) 7,823 (635 ) 21,609 (9,018 )
Total other (gains) losses 256
Other income             (95,000 )    
Core Earnings $ 121,340     $ 128,553     $ 95,527     $ 109,522     $ 100,320  
                 
GAAP net income per basic common share $ 1.17     $ 0.92     $ 0.39     $ 0.44     $ 0.61  
Core earnings per basic common share(2) $ 0.65     $ 0.68     $ 0.51     $ 0.58     $ 0.53  
 
(1)   Included in net realized gains (losses) on derivatives in the Consolidated Statements of Operations.
(2) We note that core and taxable earnings will typically differ, and may materially differ, due to differences on realized gains and losses on investments and related hedges, credit loss recognition, timing differences in premium amortization, accretion of discounts, equity compensation and other items.
 
 

The following tables provide a summary of the Company’s RMBS portfolio at December 31, 2016 and December 31, 2015.

 
    December 31, 2016
   

Principal or
Notional Value
at Period-End
(dollars in
thousands)

 

Weighted
Average
Amortized
Cost Basis

 

Weighted
Average Fair
Value

 

Weighted
Average
Coupon

 

Weighted
Average Yield
at Period-End (1)

Non-Agency RMBS        
Senior $ 3,190,947 $ 55.76 $ 78.69 4.3 % 15.5 %
Senior, interest-only 5,648,339 5.18 4.49 1.5 % 11.7 %
Subordinated 673,259 70.83 82.21 3.8 % 9.2 %
Subordinated, interest-only 266,927 5.20 4.50 1.1 % 13.5 %
Agency MBS
Residential pass-through 2,594,570 105.78 104.29 3.9 % 3.0 %
Commercial pass-through 1,331,543 102.64 98.91 3.6 % 2.9 %
Interest-only 3,356,491 4.53 4.31 0.8 % 3.5 %
                     
    December 31, 2015
   

Principal or
Notional Value
at Period-End
(dollars in
thousands)

 

Weighted
Average
Amortized
Cost Basis

 

Weighted
Average Fair
Value

 

Weighted
Average
Coupon

 

Weighted
Average Yield
at Period-End (1)

Non-Agency RMBS
Senior $ 3,651,869 $ 57.47 $ 77.39 3.8 % 13.7 %
Senior, interest-only 5,426,029 4.95 4.32 1.7 % 12.9 %
Subordinated 762,466 69.25 79.26 3.2 % 8.8 %
Subordinated, interest-only 284,931 5.34 3.95 1.2 % 10.9 %
Agency MBS
Residential pass-through 5,045,418 105.07 104.41 3.7 % 2.8 %
Commercial pass-through 952,091 102.27 102.28 3.4 % 2.9 %
Interest-only 6,722,472 4.17 4.06 0.8 % 3.4 %
                     
 
(1) Bond Equivalent Yield at period end.
 
 

At December 31, 2016 and December 31, 2015, the repurchase agreements collateralized by RMBS had the following remaining maturities.

   

 December 31, 2016 

 December 31, 2015 

(dollars in thousands)
Overnight $ $

1 to 29 days 2,947,604 3,312,902
30 to 59 days 958,956 2,501,513
60 to 89 days 407,625 246,970
90 to 119 days 559,533 430,026
Greater than or equal to 120 days   727,185     947,928
Total   $ 5,600,903     $ 7,439,339
 
 

The following table summarizes certain characteristics of our portfolio at December 31, 2016 and December 31, 2015.

   
   

 December 31, 2016 

 

 December 31, 2015 

Interest earning assets at period-end (1) $ 16,251,470 $ 14,959,081
Interest bearing liabilities at period-end $ 12,876,124 $ 11,689,250
GAAP Leverage at period-end 4.1:1 4.0:1
GAAP Leverage at period-end (recourse) 1.8:1 2.5:1
Portfolio Composition, at amortized cost
Non-Agency RMBS 9.0 % 10.4 %
Senior 3.9 % 4.7 %
Senior, interest only 1.9 % 1.9 %
Subordinated 3.1 % 3.7 %
Subordinated, interest only 0.1 % 0.1 %
RMBS transferred to consolidated VIEs 7.6 % 10.1 %
Agency MBS 27.7 % 46.0 %
Residential 17.8 % 37.2 %
Commercial 8.9 % 6.8 %
Interest-only 1.0 % 2.0 %
Securitized loans held for investment 55.7 % 33.5 %
Fixed-rate percentage of portfolio 88.4 % 84.7 %
Adjustable-rate percentage of portfolio 11.6 % 15.3 %
Annualized yield on average interest earning assets for the periods ended 6.4 % 6.0 %
Annualized cost of funds on average borrowed funds for the periods ended (2)   3.0 %   2.5 %
 
(1) Excludes cash and cash equivalents.
(2) Includes the effect of realized losses on interest rate swaps.
 
 

Economic Net Interest Income

Our “Economic net interest income” is a non-GAAP financial measure, that equals interest income, less interest expense and realized losses on our interest rate swaps. Realized losses on our interest rate swaps are the periodic net settlement payments made or received. For the purpose of computing economic net interest income and ratios relating to cost of funds measures throughout this section, interest expense includes net payments on our interest rate swaps, which is presented as a part of Realized gains (losses) on derivatives in our Consolidated Statements of Operations and Comprehensive Income. Interest rate swaps are used to manage the increase in interest paid on repurchase agreements in a rising rate environment. Presenting the net contractual interest payments on interest rate swaps with the interest paid on interest-bearing liabilities reflects our total contractual interest payments. We believe this presentation is useful to investors because it depicts the economic value of our investment strategy by showing actual interest expense and net interest income. Where indicated, interest expense, including interest payments on interest rate swaps, is referred to as economic interest expense. Where indicated, net interest income reflecting interest payments on interest rate swaps, is referred to as economic net interest income.

The following table reconciles the GAAP and non-GAAP measurements reflected in the Management’s Discussion and Analysis of Financial Condition and Results of Operations.

                 
   

GAAP
Interest
Income

 

GAAP
Interest
Expense

 

Net
Realized
Losses on
Interest
Rate
Swaps

  Other(2)  

Economic
Interest
Expense

 

GAAP
Net
Interest
Income

 

Net
Realized
Losses on
Interest
Rate
Swaps

 

Other (1)(2)

 

Economic
Net
Interest
Income

For the Year Ended December 31, 2016   $ 934,068     $ 347,857     $ 28,107     $     $ 375,964     $ 586,211     $ (28,107 )   $ (882 )   $ 557,222
For the Year Ended December 31, 2015   $ 872,737     $ 259,365     $ 47,227     $ (2,217 )   $ 304,375     $ 613,372     $ (47,227 )   $ 1,218     $ 567,363
For the Year Ended December 31, 2014   $ 687,795     $ 147,785     $ 52,522     $     $ 200,307     $ 540,010     $ (52,522 )   $ (22 )   $ 487,466

 

                                   
For the Quarter Ended December 31, 2016   $ 260,823     $ 106,737     $ 4,151     $     $ 110,888     $ 154,086     $ (4,151 )   $ 40     $ 149,975
For the Quarter Ended September 30, 2016   $ 250,953     $ 94,911     $ 4,595     $     $ 99,506     $ 156,042     $ (4,595 )   $ (105 )   $ 151,342
For the Quarter Ended June 30, 2016   $ 221,096     $ 83,227     $ 8,141     $     $ 91,368     $ 137,869     $ (8,141 )   $ (367 )   $ 129,361
For the Quarter Ended March 31, 2016   $ 201,194     $ 62,981     $ 11,220     $     $ 74,201     $ 138,213     $ (11,220 )   $ (448 )   $ 126,545
 
(1)   Primarily interest income on cash and cash equivalents.
(2) Other includes $2 million of deferred financing expenses written off during the quarter ended September 30, 2015.
 
 

The table below shows our average earning assets held, interest earned on assets, yield on average interest earning assets, average debt balance, economic interest expense, economic average cost of funds, economic net interest income, and net interest rate spread for the periods presented.

 
For the Quarter Ended
December 31, 2016   December 31, 2015
(dollars in thousands) (dollars in thousands)
   

Average
Balance

  Interest  

Average
Yield/Cost

Average
Balance

  Interest  

Average
Yield/Cost

Assets:                      
Interest-earning assets (1):        
Agency MBS $ 3,730,032 $ 38,494 4.1 % $ 5,967,169 $ 37,762 2.5 %
Non-Agency RMBS 1,390,837 32,098 9.2 % 1,452,456 27,993 7.7 %
Non-Agency RMBS transferred to consolidated VIEs 1,208,217 61,021 20.2 % 1,465,966 64,045 17.5 %
Jumbo Prime securitized residential mortgage loans held for investment 355,578 2,958 3.3 % 474,543 3,688 3.1 %
Seasoned subprime securitized residential mortgage loans held for investment   8,337,725     126,292     6.1 % 4,523,675     68,411     6.0 %
Total   $ 15,022,389     $ 260,863     6.9 % $ 13,883,809     $ 201,899     5.8 %
                       
Liabilities and stockholders' equity:                      
Interest-bearing liabilities:
Agency repurchase agreements (2) $ 3,199,755 $ 11,340 1.4 % $ 5,296,934 $ 20,045 1.5 %
Non-Agency repurchase agreements 2,499,313 18,579 3.0 % 2,095,149 12,677 2.4 %
Securitized debt, collateralized by Non-Agency RMBS 357,422 5,610 6.3 % 550,634 8,171 5.9 %
Securitized debt, collateralized by jumbo prime residential mortgage loans 261,882 2,128 3.2 % 370,160 3,041 3.3 %
Securitized debt, collateralized by seasoned subprime residential mortgage loans   6,720,323     73,231     4.4 % 3,601,082     32,694     3.6 %
Total   $ 13,038,695     $ 110,888     3.4 % $ 11,913,959     $ 76,628     2.6 %
                       
Economic net interest income/net interest rate spread       $ 149,975     3.5 %     $ 125,271     3.2 %
                       
Net interest-earning assets/net interest margin   $ 1,983,694         4.0 % $ 1,969,850         3.6 %
                       
Ratio of interest-earning assets to interest bearing liabilities   1.15           1.17          
 
(1) Interest-earning assets at amortized cost
(2) Interest includes cash paid on swaps
 
 

The table below shows our Net Income, Economic Net Interest Income and Core Earnings, each as a percentage of average equity. Return on average equity is defined as our GAAP net income (loss) as a percentage of average equity. Average equity is defined as the average of Company’s beginning and ending equity balance for the period reported. Economic Net Interest Income is a non-GAAP financial measure, that equals interest income, less interest expense and realized losses on our interest rate swaps. Core Earnings is a non-GAAP measures as defined in previous section.

 

Return on
Average Equity

 

Economic Net
Interest
Income/Average
Equity *

 

Core
Earnings/Average
Equity

    (Ratios have been annualized)
For the Year Ended December 31, 2016   18.42 %   18.59 %   15.18 %
For the Year Ended December 31, 2015   7.52 %   17.12 %   14.20 %
For the Year Ended December 31, 2014   16.99 %   14.06 %   12.70 %

 

           
For the Quarter Ended December 31, 2016   28.82 %   19.48 %   15.76 %
For the Quarter Ended September 30, 2016   23.04 %   20.18 %   17.14 %
For the Quarter Ended June 30, 2016   10.09 %   17.61 %   13.00 %
For the Quarter Ended March 31, 2016   11.34 %   17.28 %   14.95 %
 
* Includes effect of realized losses on interest rate swaps.
 
 

The following table presents changes to Accretable Discount (net of premiums) as it pertains to our Non-Agency RMBS portfolio, excluding premiums on IOs, during the previous five quarters.

 
For the Quarters Ended
Accretable Discount (Net of Premiums)

 December 31, 2016 

 

 September 30, 2016 

 

 June 30, 2016 

 

 March 31, 2016 

 

 December 31, 2015 

    (dollars in thousands)
Balance, beginning of period $ 733,060 $ 769,764 $ 778,847 $ 824,154 $ 873,091
Accretion of discount (44,427 ) (44,455 ) (42,297 ) (45,481 ) (43,520 )
Purchases (33,987 ) 8,959 (1,001 ) (11,102 ) 1,845
Sales and deconsolidation (2,138 ) (14,386 ) (20,590 ) (35,144 )
Transfers from/(to) credit reserve, net   31,140     13,178     54,805     11,276     27,882  
Balance, end of period   $ 683,648     $ 733,060     $ 769,764     $ 778,847     $ 824,154  
 
 

Disclaimer

This press release includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Actual results may differ from expectations, estimates and projections and, consequently, readers should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “target,” “assume,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believe,” “predicts,” “potential,” “continue,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from expected results, including, among other things, those described in our Annual Report on Form 10-K for the year ended December 31, 2015, and any subsequent Quarterly Reports on Form 10-Q, under the caption “Risk Factors.” Factors that could cause actual results to differ include, but are not limited to: the state of credit markets and general economic conditions; changes in interest rates and the market value of our assets; the rates of default or decreased recovery on the mortgages underlying our target assets; the occurrence, extent and timing of credit losses within our portfolio; the credit risk in our underlying assets; declines in home prices; our ability to establish, adjust and maintain appropriate hedges for the risks in our portfolio; the availability and cost of our target assets; our ability to borrow to finance our assets and the associated costs; changes in the competitive landscape within our industry; our ability to manage various operational risks and costs associated with our business; interruptions in or impairments to our communications and information technology systems; our ability to acquire residential mortgage loans and successfully securitize the residential mortgage loans we acquire; our ability to oversee our third party sub-servicers; the impact of any deficiencies in the servicing or foreclosure practices of third parties and related delays in the foreclosure process; our exposure to legal and regulatory claims; legislative and regulatory actions affecting our business; the impact of new or modified government mortgage refinance or principal reduction programs; our ability to maintain our REIT qualification; and limitations imposed on our business due to our REIT status and our exempt status under the Investment Company Act of 1940.

Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Chimera does not undertake or accept any obligation to release publicly any updates or revisions to any forward-looking statement to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based. Additional information concerning these and other risk factors is contained in Chimera’s most recent filings with the Securities and Exchange Commission (SEC). All subsequent written and oral forward-looking statements concerning Chimera or matters attributable to Chimera or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above.

Readers are advised that the financial information in this press release is based on company data available at the time of this presentation and, in certain circumstances, may not have been audited by the company’s independent auditors.

Chimera Investment Corporation
Investor Relations
866-315-9930
www.chimerareit.com

Source: Chimera Investment Corporation