CHIMERA INVESTMENT CORP 8-K
NegativeEarnings
Higher rates and wider mortgage spreads cut GAAP book value 16.5% Q/Q; spread pressure also turned Residential Origination’s net origination margin negative.
Filed 2026-11-05 06:45 ET
- 2.02 Results of Operations
- 9.01 Financial Statements and Exhibits
Summary
Q3 2026 results. Higher interest rates and mortgage-spread widening drove valuation losses and a 16.5% Q/Q decline in GAAP book value per common share to $14.82.
Developments
- Completed the inaugural $291M Prism securitization after quarter-end, backed by HomeXpress-originated loans. Chimera had committed to purchase $797M of loans for the platform during the quarter, supporting its loan aggregation and securitization business.
- Third-party asset management loans under management rose 7% during the quarter to $27.6B. Transaction volume by unpaid balance increased to $4.9B from $2.8B in Q2 as higher transaction activity offset asset paydowns.
Results
| Metric | Q3 2026 | Change | 9M 2026 |
|---|---|---|---|
| Net income | -$172M | vs -$580K Y/Y, vs $17.4M Q/Q | -$199M-198% Y/Y |
| Diluted EPS | -$2.31 | vs -$0.27 Y/Y, vs -$0.05 Q/Q | -$3.14-288% Y/Y |
| Cash and cash equivalents | $357M | -20% Q/Q | — |
| Diluted shares | 83.9M | +2.9% Y/Y, +0.1% Q/Q | 83.8M+1.3% Y/Y |
What moved the numbers
- GAAP net loss available to common shareholders was $(194)M, while non-GAAP earnings available for distribution (EAD), a measure of investment portfolio income for distribution, was $32.3M, or $0.38 per adjusted diluted share. A $391M net unrealized loss on financial instruments was partly offset by $208M in net gains on derivatives; EAD covered 84% of the $0.45 common dividend.
- Residential Origination funded $1.1B of production, up 27% Y/Y, but its net origination margin fell to -7 bp from 124 bp in Q2 as volatility and wider spreads pressured loan-sale gains. The segment recorded a $(2.4)M net loss available to common shareholders and $439K of non-GAAP earnings before taxes, depreciation and amortization.
- Sold $800M of lower-coupon Agency mortgage-backed securities and purchased $1.9B of higher-coupon securities; the portfolio’s average coupon rose to 5.67% from 5.28%. A $2.4B short position in to-be-announced securities was added as a risk-management measure.
- Cash was $357M and unencumbered assets were $203M at quarter-end; total leverage was 6.5x and recourse leverage was 4.1x.
Figures extracted from the filings and checked against their text; changes and verdicts computed from them. These tables cover the whole earnings day, with the other 8-K of this earnings day.
The summary is written by an AI model reading the filing.
Model 005 · prompt v189 · 2026-11-05 20:54:11Z