CIM - Earnings call transcript Q3 2019 | Chimera Investment Corporation

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Chimera Investment Corporation, Third Quarter 2019 Earnings Conference Call and Webcast.

All lines have been placed on mute to prevent any background noise. After the speakers remarks there will be a question-and-answer session. [Operator Instructions]

pleasure Investor the Relations. my Emily over now of Mohr is to floor turn to It Please ahead. go

Emily Mohr

Thank you, Sandy, in Chimera's and thank you quarter conference everyone earnings call. third for participating

Harbor I'd review like Before we the begin Safe statement. to

in which During risk that predictions, or most statements SEC are risks are our are subject this statements on factor current events. uncertainties about projections call to making other will annual forward-looking are we quarterly expectations the which and future based filings. statements section outlined These in be and recent and assumptions quarterly

from Actual read events and these in addition results forward-looking statement annual forward-looking quarterly We may our to differ filings. you our Release in materially to encourage disclaimer Earnings statements. the and

financial During supplement the measures. and SEC reconciliation to for call comparable earnings filings our today refer we GAAP non-GAAP the discuss Please most to measures. may also

may undertake of accurate do this content not conference only this revise update disclaim this information. of or the earnings the as is Additionally, time-sensitive of and obligation any date call information to that We specifically call. contain

and I President over turn conference Officer, Executive to the Lambiase. our now Matthew will Chief

Matthew Lambiase

Good morning to quarter third Chimera call. and the earnings XXXX welcome

our Joining Operating Falvo, Chief I call on Mohit Investment of Capital our have Head our Chimera's me Rob Officer; Officer Colligan, Financial Marria, Yarlagadda, the Choudhary Victor Officer; Chief Chief and Markets.

Afterwards, changes I'll make results. a open call portfolio will the in core Rob then comments. and review Mohit the few for financial we brief up discuss will the will questions. the

I results solid economic fixed volatility the nine and XX.X% income continued for a X.X% these in first a quarter are total XXXX. of market. economic recorded for return the the third the Chimera given months return believe

X.XX%. points the the while fell XX at and at closed LIBOR the third X.XX%, XX-year the treasury quarter In ended quarter, one month quarter basis

month issuing and craziness Bond few latest the Republican that years ago. continue been Greece a result of rates to yield, negative money in interest Europe at in market was The a example bills and a reality U.S. of three drive would've Negative distort just search Japan into unthinkable return.

exhibited quarter. ended in reasons, due the The repo quarter secured September, rate financing at to funding repo markets also spiked U.S. X.XX%. overnight significant higher overnight several the technical and rates volatility the In

and jitters. resulted received in the repo rates market. market liquidity adding action at well unusual to elevated substantial The largely reserve action Their market calmed fed was and the

costs period. funding in Chimera’s elevated the remain

XXXX, considering our of our XXXX cost of fact, to fund at that end agency the similar was the the over In of borrowing had borrowing third cost repo we've two cuts surprising year. the and strikingly that's course quarter of federal at of third quarter of the rate

prepayments lowered experienced speeds Residential mortgage faster our amortization environment. interest of rate increased due premium. backed agency Faster yields the lower securities to due prepayment to

agency our and higher borrowing The put in quarter. pressure earnings lower costs on combination of the yields asset

since of However the end if agency a our some which portfolio. quarter on relief yields some prepayments seen it in steepening yield may we've offer pull-back continues and in curve,

additional fed started remain costs two further costs. cuts that see rate lower trend we funding end and quarter one funding we after Also will hopeful our to reduce or our

bond decreasing the note, bright to legacy and due senior a continue securitization rate strong for have credit. Loss market mortgage fundamentals been current the bid a On from have investors. boost expectations to low positive the home credit appreciation residential been firm loans prices in unemployment on on and

asset upside. yield class. spots redeploying pay loans very residential that mortgage We that our down offers investing agency We've fixed backed few both into of is and difficult believe income mortgage actively been a market security the in one in this

purchase billion. post residential next pipeline of of $X.X securitized with of time It have and purchased loans future commitments into busy a settled to we quarter be $X.X our to far year. and pipeline billion expect purchase end So and and over we this well diligence does over year take loans we

rate that cuts into and We hopeful value mortgage offers spread more agency the borrowing loan been think lower we're our meaningful we've summary, going our add will residential In long in be to costs, translate portfolio. credit income term forward. fed finding new beneficial backed investments than to which for securities successful should

of While of be our common to our $X.XX this continues to $X which Directors will result share, is quarter income year market, in to announced XXXX. night of positioned solid dividends an abnormal the and Last of the Border returns Chimera challenging fixed shareholders. fourth well deliver dividend for calendar per

to And Mohit. turn call I'll the now over

Mohit Marria

rate, rate the to Due and widened our interest impacting shortened, underperformed Matt. this volatility lower RMBS hedged and you, Agency Thank duration quarter. Spreads liability.

swaps terminated to This of our the investments rate to rate better interest total movements. such sensitivity rate our exhibit notional adjust movements. positioned is construction billion of XX% we and that duration X.X either for our interest or portfolio The of payment nearly portfolio protection low further explicitly portfolio quarter have

explicit CMBS, which in $X seasoned penalties, loan environments. rate protection balance of lower These $X.X durability call loans The RMBS. and investments Agency CMBS portfolio billion billion provide Agency $XX.X include carry prepayment securitized Non-Agency of billion and low legacy and

characteristics, seasoned portfolio to legacy non-Agency continues loan and portfolio to prepayments well. general balances loan protection, implicit very and our age, non-client benefits While due from RMBS on their prepay well perform mortgage our

due has in remainder of in $X.X The RMBS rate Agency prepayment rates experienced portfolio low interest increase to an billion our environment.

received in loan As credits our purchases pass-throughs, reinvesting RMBS. have pay-downs residential in through been we have both mortgage agency non-Agency the we

capital finally We fix-and-flip to by we purchasing in our $XX added loans a pay had and warehouse residential reduced increased $XXX in portfolio. loans, for Agency by transition Overall in our loans. we due million to productive billion reperforming very mortgage referred credit $X.X our mostly to holdings CMBS We quarter allocation sometimes our downs. million, as

size, of We re-performing a our CIM Chimera loan of and the previously with average loans closed this average with securitizations underlying had XXX,XXX securitized coupon and warehouse. purchased XXX held quarter. consolidated three XXXX-RX loan loan weighted Million in The X.XX%.

debt issued securitized with cost Chimera as XXX X.XX%. transaction a were month in loans The of the a XXX million season.

We loans of with deal lastly, balance average this third average XXXX-INBX. with year, loans we securitized Prime X.XX%. old, average an And XXX,XXX loan our were of million deal XXXX, The LTV had coupon securitized CIM our first an loans on Prime CIM million XX%. of of of XXXX-JX. months investor underlying $XXX Jumbo $XXX six average The for an

The underlying Chimera’s consolidate were balance of average with an investor balance loan XXX,XXX and old, XX%. an sheet. of loans The LTV investor Both months investor coupon Prime of loans an do on average had X.XX%. five average not average on Jumbo deals loan with

loans end. CIM XXXX-X, into called in CIM was warehouse. with relevered continued Securitization of We CIM loans that activity our post-quarter from of our We $XXX million securitized callable which deal last million and XXXX-RX. $XXX XXXX-RX XXXX

these on our on earnings details more give will fourth call. transactions quarter We

stated, been have Matt reallocating As in our busy agency we investments. credit pay-downs portfolio mortgage into

credit term portfolio to as continue an mortgage favor investment. attractive long We

with totaling loans of callable billion unpaid commitments pipeline made post billion $X.X principal opportunities is robust is opportunities XXXX with Our balance. $X.X CIM future X end. quarter of of deals in with full

financials. I turn will now to to quarterly Rob the discuss call over our

Rob Colligan

economic per Thanks end value was dividend XXXX. and was the change per quarter and or third third quarterly share. X.X% quarter return share. value of Mohit. quarter our the the value book GAAP on the the the based million of third financial review I'll quarter in $XX.XX book highlights third at on $X.XX $XX GAAP share book common income for GAAP per the was for net

or core $XXX third the a was income On the Economic million quarter third net was quarter basis, interest million. share. for net $XX per $X.XX income for

net average X.X:X. interest on Total asset funds the yield interest-earning third average leverage was quarter, For for X.X:X, was the at spread while recourse third X.X%. of cost X.X%, and our quarter X.X% leverage the our the was ended quarter was

were our fees was our XX.X%, net average on was quarter, equity quarter. on interest excluding For third with return transaction and Expenses last GAAP and XX.X%. $XX million, servicing economic line the return in for the equity expenses quarter

concludes we’ll remarks, now That open call questions. the for our and

Operator

Credit [Operator Instructions] Doug first Your of the from comes of Suisse. Harter question line

Doug Harter

Thanks.

in talk new relative Can each about kind and quarter types in and those of both, the legacy kind post attractiveness production assets? active were of end. loans just You of you quarter of of the

Mohit Marria

Sure, of we in with good Mohit. This did the RPL morning year. July start is I’ll Doug. this transaction that

calls, prior were comfortable the them was and to we what box with we’re term in we market. able at attractive did loans that to finance on credit July. continue stated As find That in we the securitizations

know We out leverage debt the continue double and $XXX the a X.XX% debt performance again. retained you returns that the investment digits. improved some to the piece with of to million off remain we at delivers years and know deal we’ve our issued and/or on year call term did lever three that – on a financed have But over rates low; and three to next and extent the a a in it, embedded now

a the side of On as loans also of piece, smaller loans, are the so investor and digits. there and But to the jumbo new on are leverage they again, type. given again that the lever much profile better the credit issue there returns collateral the sort retained relates it investments double

keeps in originated to mix loan season acquiring addition purchases the the So they newly in us are both attractive. both, re-performing collateral. side It the on on

Doug Harter

that product or pace just picked it the Mohit and of the side. about course activity? led gain this quarter Can changed in materially you market the third re-performing then like has third talk of to then the as activity on seems And to in it up quarter has more what pick-up is

Mohit Marria

Sure.

GSEs I’d I GSE’s loans bank parties, bit culminated lot and is focused acquired think activity of and aggregation needed but are on primary activity know just source unwound. you aggregation be that throughout guess for in you in or to be non-GSE has longer so taken the future, sellers seller. of dealer lot to the are balance multiple some QX of know the has the we are year, amount of our time loan us the sheets going the a in and risk sources. other the I is A continued been that from a QX. We've a – say

we those of sales. You were beneficiary know the

the have from like funds, to said, do, to between week we that’s there's eight stuff trade to time the And a period, the time I it we that the and four takes. diligence commit all to

commitments lot of that quarter. happened So, we’ve call and our a QX in mentioned late our on for earnings the QX

quarter post here will as we've to improve have we and you securitization of deals in So pieces. build you'll into lines, reduce will these and know no our settle, the full heels we activity we returns see retained cost the acquisitions QX then and the probably the in full will on see and end the that do on you’ll borrowing QX the effect warehouse which that, impact committed early then

Doug Harter

Mohit. Thank you,

Operator

comes Lee of the question next Markets. from line Capital Kenneth Your RBC of

Kenneth Lee

the within this markets quarter taking questions. remarks, and you whether for my volatility impact for prepared the the guys? in any and there curious repo impact thanks you upon from just any the whether within Hi, was but there's I’m wondering touched there and

Matthew Lambiase

subsequently impact. time. purchase the we But days volatility The of balances stabilized, picked few they for a the in had have providing much T-Bills made September. or stabilize and to or only No, by over haven't disruption the end at that and the of in up has rolled in quarter didn't announcements end. especially head late but an most into our exhibited a of We decade that has was as volatility fed we QX done repo, that, in year reverse

want like had repeat you – in and we this year, make seen spike sure to similar As a that they doesn't year. itself turn last for QX I think recall the

Matthew Lambiase

after say and very it as the was our have was generally we repo out short in say come paper usually funding. down I just period, would to I we rates our put were in that phenomenon. quarter. We overnight. don’t started an fact general overnight paper, over than matter the a would overnight It elevated longer just repos roll that of and and the term – Yeah, don't

Kenneth Lee

positions. if of assumptions have you quick prepared to helpful. you, of duration. hedging And you Got with touched the adjusting upon the interest relative regarding in policy remarks of terms one very or either hedging could within in terms what kind I rates just if I fed us you share follow-up adjusting the just your this Thanks. the wonder can, and

Rob Colligan

now Sure. cuts two about Matt in of as one prepared this potentially We’ll afternoon. between them remarks, out end. later I know year we one, his said mean rate find expect and you

hedges in our holdings. reducing You balance know approach proactive there taken agency hedges as in think we’ve accordingly, I extent year a was we're the holdings, the a of the currently. think I better To as change, the adjust to but this good another our well we’ll duration credit spot

Kenneth Lee

much. you. you Got Thank very

Operator

of question Your next of comes line Hagen the KBW. Eric from

Eric Hagen

of agency us segment morning run good the segment? guys. for pass-through just on the tease portfolio part you’d the In the commercial amount can you versus Thanks. Hey, leverage

Matthew Lambiase

Eric. Hey

is know the were some products think run they leverage other we You with agency both terms. somewhere financing I against both –

I leverage about is just isolation on an XX:X. the that think there looking XX at to

Eric Hagen

Okay.

it’s be So clear just the both. same to in

Matthew Lambiase

mean the more of yeah. look up terms. Both in I financing fungible some at broken They we in when have aggregate, they sort not are it given similar capacity. both

Rob Colligan

I'll just Eric, add.

do over have are You you available on sheet, digging thing commitments haircuts fund similar. do CMBS CMBS Agency the balance The on know the look Agency or the the at construction one what's Agency very sheet they if when the time. pass-throughs market, in into for we you're and site and balance

not in little carried away. sheet, put purchase, balance There's until fund timing a we on of of time. not and bit them sheet as assets yet in balance it's if are on the the we payable So period over got for all repo component where a a that the them securities right we

Matthew Lambiase

is it if you to from That's dollar think and an the right. at both On them a basis larger, on much term leverage XXx basis look percentage a individually, but pass-through XXx. obviously portfolio absolute would be I

Eric Hagen

remind That's you on okay, can guys us comes and trying thank back earnings gauge of up core And you in RMBS, great. as core slow the premium the speeds if it if through it, accounting, helpful prepay a and a Got the lifetime to catch amortize you. or color, Agency if out just there’s do you down. I'm of make core. when prepaid direction Thanks. assumption speed out on

Matthew Lambiase

call what model. We retrospective Sure. don't some adjustment for an make a

other we material our now an attribute a so don't though of make pick adjustment agency earnings, it. only slow I'll mention if the is thing of fair majority majority that. So up agencies The catch-up know for pass-throughs you that we down or through speeds, carried don't at that the have our value are have to in

will just that make XX% rates those know make would to agencies we of adjustments prospective speeds but roughly over be question, adjustments you that say XXXX catch-up, them core back for we change have just time in don't that would still the move I of bought and the – original your any and speed. to get majority So our pick-up, before to we retrospective as

Eric Hagen

of helpful, Okay, X.X%. during changed yield quarter-over-quarter the yield what portfolio into off. great. was are new were the sensitive I And that rolling in thank coming segment assumptions just lower you. or is then a X.X% the than the credit at That's think is from credit Was lower it that quarter that investments because

Matthew Lambiase

rolling billion the the Yes, it’s $X.X obviously lower and where acquired are the that’s of the investments, of loans newer with we that pay-downs is market on yielding assets some at off. the yields, higher

Eric Hagen

off like pay virtually and rate everything on replaced Great, take those And when that looks quarter, you okay. you was terminated And you that what basically it the then those. the took off. in you swaps did guys the

rate So pay book what's now? on swap overall the the

Matthew Lambiase

quarter. number I the get receive pay off, about we The The billion is in of XXX what pay currently the end is XXX you. $X.X of I rate have; for took of of stands the could and as notional don't rate The at, swaps. rate portfolio total that

Eric Hagen

swaps your book third you early by sense off judging fair? the just I is And guys relatively value that took that those performance, quarter, in

Matthew Lambiase

in some Yeah, we in August. off took and we some off July early took

Eric Hagen

comments. the Super! Thanks for Thank you, guys.

Matthew Lambiase

Thank you.

Operator

of the from Laws of James. next line Your Raymond question comes Stephen

Stephen Laws

morning. good Hi,

trying You know quantify balance, to thinking that. about the repo

repo amount that and within I is rolled Is LIBOR or $X how expect this by resetting that points month think around points. dropped the past basis Clearly basis of should at I fair entire look quarter XX XX XX days. and or we’re the think had to two has we end down about days XX here resetting the about think first it quarter? billion you cost

Matthew Lambiase

mean financing we December, uptick was I QX in as I rates of ended mentioned as an there again overnight. we Yes, sort think

basis already, given the I is mentioned rates in would had getting. we the downtick it rolling yes, of are you that in rolled in financing we we’re say know we’re the repo October we that seeing would into reflect but the most short As but two’s. points, say on -- Talk] stuff [Cross agency very Talk] I [Cross for products, probably low LIBOR,

Stephen Laws

color, thank helpful That's you.

talk place you You whole agreements know following have loan about on the the the up know can and sourcing, you in purpose business you on for loans sourcing side, loan loan.

have additional at maybe in provide have bring do sides that Would you or any the you the something own from looked you your create you on would others you pipeline to Some whole in-house can agreement or sourcing like acquisitions. place? color loan know

Matthew Lambiase

Sure.

have So on with agreement side, we those originate investor of the the you know loans finance securitizations. stuff to sort new we some an term then that them on and jumbo issue through and conduits partnerships acquire have and just

where fix-and-flip former transition with that require. the origination and business of we guidelines performance you we know the relationships underpinning are the have on the the loans loans We residential comfortable and

You attractively I – need originator, have we're growing again know, currently. would sourcing I that the of is at needed collateral more if to require that. capital for is get But be growing happy business, we businesses that pretty and those it the pipeline are grow sort an or those think originator necessary becomes to look as to think I their and

Matthew Lambiase

add just to I’d Yeah, that.

there's anything think the different our pricing quality I of seeing in and seeing term the with is we're pretty that doing. us products we're And reason pretty through than for securitization I to put the process, a good. do are the we don't think short that it, can amount currently of we're happy that we

think bit seeing are right are a open markets a spot. we we the of now, think I and think we're in products for and quite securitization good I

Stephen Laws

if again, And we there's attractive size. other basket know could like Are that there? security Great! just volume opportunities we maybe investment but opportunities touch or about either should new not seeing touch limited growing there, relative agency the to as that I should finally, it portfolio remaining forward, how the think you're same seeing commercial sequentially. Is basically as stats, we it flat think you that looks is – you on maybe how but or on move

Matthew Lambiase

it's and an small to You say drive, think a It's amount and last good a come think didn't know, bid would a we add idiosyncratic originations see to squarts think at we we I tremendous basically, I in the And the you up current wanted I see market on, interesting to I to we position and and buy and relatively more. lot that it’s market. of a quarter to the the paper for big us bid portfolio. level axe think, don't have really

Rob Colligan

Yeah, get that's that. right, and I

I I credit deploy found there think the to housing that our returns and think are very the side conditions, compelling give belief on the we’ve of the sort opportunity macro-economic capital. and in

Stephen Laws

morning. your Great! you. this Thank I comments appreciate

Operator

the of Your Matthew comes of next line Hallett question from Nomura.

Matthew Hallett

Thanks for taking my question.

deals You sense is what to you billion the today? is financing the I wanted in is know those and get $X.X rate think of a that XXXX. securitization I as callable you mentioned think where market do on of just

Matthew Lambiase

Sure.

I’ll about the where is So talk market today.

RX that is cost the being what's as The our in to is were not a deal, this we traditional at and in was the deal. finance remarks, mentioned which this able three one QX. – deal year, basis X.XX%. mentioned will reperforming in I That opening securitizations debt the non-rated we callable completed we mimic year XXXX As of XXXX

lot depending are where rates a the volatility remain again, I and here. they’ve think year-over-year, of rates on exhibited

to a there's financing that for context. term that cash in a of from to grab investor financing and a be we be side plenty there's think costs and assets senior I going be deployed, needs think costs, should similar

costs and ability that obviously a rated down have also could go little bring We in financing the the bit past, more. to

benefit cost cost of best So at. the on it's term a just and to balance those way between analysis securitizations what's

financing just being callable year, entire the currently this you on next As X.XX aggregate where those are secured far side, and coupon. debt to around that’s the not the a billion exclusively the know financed, $X.X on as cost our but portfolio as is loan

material and So going pick-up to if – they to those economic rates be it’s remain to are the assets. a refinance where

Matthew Hallett

reported was call it last – deals. that On the from, that the Right, that down quarter. as should so X.X it these trended should Talk]. class, I down continue you think of came that down X.X we funding coming trend [Cross expect resecuritize Is sort and and

Mohit Marria

That's hoping. we the are we're things Those evaluate. what

think takeout coming costs equal, there’s the an if rate sentiment are component, we You given and I the the component and expect all equity change what sort else and doing, financing to of you know is know fed reducing the down. be remains would in – and financing

Matthew Hallett

and okay, you a the look but patch, that then looking there’s at re-performing that for which that. and got There's of I a let loan And just up and for price RPL year. set Great, back to of kind and $XX we the look in mentioned you're competitors they've something look talk jumbo GSEs obviously sort mean until ‘XX, market GSE doing mixture down, doing QM today the loans. lot or XXXX, one not billion are off we're pipeline of because to here shrinking me is just this by market books of themselves just your the at you get new we’ll from then is liquid at comment the issue investor mean I running reform. we're of out a a If getting you XXXX. naturally, their coming know investor like

the how going you give type credit sort GSE Anything acquisitions in the toward deals. next on of moving start terms year non-QM it at mix look out? terms more Do come these on think you of in of to Do expect can be of XXXX I side? equal mean two? what those that are to an loans can you to it you tell will

Mohit Marria

plus we going supply loan north the come refinance that's be still market. of the $X.X Again, by Outside to to for of shrinking, loans we although GSEs, billion owned so that to can the speaking RPL of earnings, I start think out I'll for billion that bid already of next grow with have and still and Sure. the are RPL. absorbed that ample $XX going year, they're have

And the to in of even built on addition originated this jumbo, newly whether haven't investor, whether doing the loan network that, relationship at it's non-QM though two been last over packages. stuff, even it's we side, years, we've active looked we've

didn't numbers the we cared. have Just would make sense where

for assets it's going whether patch see be work, those numbers QM opportunity do the capital and those away in deployed we and if mortgage But market, that. the more relationships, creating we we would private to the have

I think we done we you've this seen year, year. XXXX one three last jumbo did deals, investor from we've two XXXX, to completed deals, one as did we've

the it Chimera. I better So the lower continue for footprint, think would side, and to GSE upticks, new are on that issue and better the hopefully side, is we the opportunities new origination the

Matthew Hallett

preferred just have term And a thinking it you job clearly or or about that you guys strong source to – access more so management, be agency you continue just done capital a you allocation a of capital very capital book where debt balance as, could so more great sheet in debt. and could think have

that of Just as a do are they you capital? more at thinking if sort of agency source opportunities would than these book arise you about and look thought, it,

Matthew Lambiase

that’s Matt exactly Yes, right. think I

the run-off and we’ll portfolio time our redeploy agencies the agency and to and it I put. really definitely is there issue I to look it, takes that the and guess run-off think

credit, normal we capital job we're quarter. that's always securitized Mohit it really has into the think pretty and over to, putting course managing I have what of mortgage managing and the the that an So out coming this through differential so in that's and timing between residential run-off done good

about trying you we doing I the our the think good the think capital a would mean have months, of you pretty job when credit pipeline, as I part. of securitize know we're agency actively over two source are our credit I say four match next residential to look the but think about the to that at for the and pay-downs you be them. we thinking perfect, agencies that mortgage

Matthew Hallett

a Thanks Great! guys. lot,

Operator

Your Steve comes next Delaney of from JMP Securities. question

Steve Delaney

believe of thanks. the you and I him. just billion credit deployment? Matt, to that that you XXXX billion, mentioned for Thank guys. maybe mix $X.X roughly so you the you mix me you closer morning loan are won't of looking I beat know Could But loan good Good about just whole a make $X.X pipeline repeat near-term question, sort talk sort that at. you. the within in,

Matthew Lambiase

Steve. hey Yes,

assets in pipeline. loans the in, loans as profile the or credit and similar far As will numbers some of down the to the wrote Perhaps bringing we have here. we're it assets the very be you currently the

the mid-high balance the area, WACC going to committed, not. are in in XXX,XXX So the billion 'XXs, performing, average to the of going loan to $X.X this and so average is these it's loans around X the is that’s be be seasonally are the be going you LTVs all know

Mohit Marria

all not that's our loans. re-performing jumbo, season not of that's That’s $X.X programs, investor RPLs, loan billion

Steve Delaney

been on of concentrating here years. couple product That's had and know it. the for last the really Got well guys you

Mohit Marria

performing for product really the well been And really that's us.

Steve Delaney

with purpose. don't would know a how we've that, and the business I'm just BPL in know whole subtleties. you of So just else conversation FNF, real it's occupied, but got quick look you I everything whole NQM your Matt, there owner called can the acronyms, call thing SFR, mean this. bucket I whether throwing when sort we follow-up There’s split see residential you to go are But you at can on think of I all on crazy. I what the BPL, so so many

ahead, go off. – Kind the of you I I'm sorry. cut

Mohit Marria

No, ahead, I'm go sorry.

Steve Delaney

trying NQM, sense a two between the next for your the or So, more have the say of out as most as we and at which of you to do split I look going and you lets two? I'm those just look it guess what kind the one loans investor more year those over opportunity find likely to

Mohit Marria

how you on even the tremendous with define grow going growth mean, projected the years think the QM sector over last I depending that patch more it, it’s and to again I has had non-QM two away. and

On had has purpose non-QM, that sure again with. durations The the shorter are side, the significantly product than business to on growth. that begin is which already

Steve Delaney

Indeed!

Mohit Marria

have XX You purpose to ranges environment months. QX a portfolio $XXX now created, think loan to wanted and on rate short given know we through duration the and volatility maturity We of the average XX the million. we've the aggregated assets just between months business

portfolio cash coupon. for as us. is very The that X.XX, target that's attractive WACC on net a attractive We have and very

I growth. like said seen has side, non-QM The tremendous

think product, the pricing challenged, it there and us. at like the It's stabilize pricing has challenged sources continue to just bit as we you look to know rates that. a stabilize have been little a we little I would is that for on and find prepayment but

Steve Delaney

probably Got that the for guys. it. than on This color on was BPL. more Yes, you helpful. the product eyes very Thank

Mohit Marria

you, Steve. Thank

Operator

Instructions]. [Operator

Your the next Office. of comes question from Family Cooperman Lee of Omega line

Lee Cooperman

I thanks. call have that the some have. on the don't hi, Yes knowledge these technical of folks

do me we much dry could fully spread some which we top-down a earn not we've employed? So, powder How ask questions. employed have you we let just where are simple or

or think below being in earnings number do earnings? quarter, recurring dividend, quarter do above powder, earnings powder, the secondly, recurring look you that this How the $X.XX normalized below as of which you normalized powder? And you the see match earning at earning representative recurring represents

lifetime these the I be one think, to exposure most in to rates rates, going but question people third days is our rising on effect to rising rates? assume are ask going up. sooner than it's go I'd what's our And the of

Matthew Lambiase

awful frame levered lot I around, company, but this. like Lee we keep don't powder we're Well, dry think would so an I it a of

on agency of a go asset have that them we balance we bit investments. would to found if securities look credit sheet class at our We mortgage-backed as and an quite we good

I think residential about upside. the credit right we now feel way is the there’s still market good that mortgage, mortgage

yield loan upside collateral finance with I seasoned upside and securitizations, with and to can think today the these I appreciation an the can many and still buy we the and we'll pricing think so improve, that packages I working if the That them. in in continues people on, have into going think re-performing home calls future future. we

part. and And a to such is the doing there got and has I agency investments. into say is think of credit to And finding such residential is great done deploy our why Mohit those I we done for our job – what us mortgage has mortgage dry a dry credit we're portfolio, That's team we've powder hard it's find I'd the guess great plenty job we're it. taking powder residential investments find when

do to dry I that that think make credit, a need and agency to investments – in or think think sheet it’s capacity foreseeable going a from got I we to future, for don't from So balance the from that. I and plenty come book our we powder money have of

Lee Cooperman

you job guys a done the terrific have Well, running in company.

earnings is $X upon think now to I you said enlarge don't peak the represents you'd run that you earning the what that So coming rate interpret have years. over of we hope power,

Matthew Lambiase

Well, I mean, yeah.

easy you tells that anybody a Let's market just here very that and mortgage strategy frank. just they'd I this operate sits be fixed is abnormal market and income to say, levered in, an is not this a think

make focused the and very tough bet to in don't value. very to ranch value our the is a dollar market are maintaining and making We that and then pennies on lose want constant. we sure a book few This book stays

we always with in those we're good a trying I feel earnings. the like spot two balance and So right think it's to now risks,

Lee Cooperman

continue Thank I'm I Good, to on have you a very you. time, thank this much. that you congratulate very call Every fine and view. on I doing guys job

Matthew Lambiase

Thank you.

Mohit Marria

Thank you. support. Appreciate your

Operator

floor no any additional closing are at comments. for further time. back this now questions to Matt the or over turn will There I

Matthew Lambiase

Chimera the less and I'd for you XXXX to speaking to quarter volatility third looking just thank forward the call. for earnings to hoping us joining New in you. We're everybody Thank like on Year.

Operator

Thank you. This concludes today’s call. conference

You disconnect. may now

Chimera Investment (CIM) 30 Oct 192019 Q3 Earnings call transcript