CIM - Earnings call transcript Q4 2024 | Chimera Investment Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to Chimera Investment Corporation Fourth Quarter and Full Year 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Victor Falvo, Head of Capital Markets and Investor Relations. Thank you.

You may begin.

Victor Falvo

thank Full for Call. Year and Fourth in operator, and Quarter XXXX you, you, participating everyone, Chimera's Thank Earnings Conference

we to like begin, safe Before statements. harbor review the I'd

forward-looking Actual annual in encourage call, quarterly Factors results to uncertainties, our events statements, or will risks the statements section events. current and filings. most based future the which statements about this that quarterly expectations these During be and We and recent and differ statements. and and forward-looking other which in you predictions assumptions from Risk materially our in -- we filings. earnings are release may SEC projections are our annual read on outlined statement These were forward-looking disclaimers to making are subject

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

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

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

Phillip Kardis

Quarter to XXXX morning, Corporation's Good and Chimera Investment Earnings welcome Fourth Call.

Vic for Jack my Relations. are results, financial will our me Officer; Investor Viswanathan, opening and will our and Head then Chief Dan Risk and Jack Chief of Subra portfolio Markets After Thakkar, the Joining Falvo, the review on before Investment review call Officer; call and Credit Financial our Capital McDowell, Officer; Subra remarks, questions. our our the Chief

year of reversals. another XXXX was

rates and X.X% high to of in in from continued The progress first saw a the part on improved September. reducing X.X% April inflation of long-term year

points with as not half second basis market softening expected. labor rate their Fed of the rates the the inflation did final react However, Long-term the year. by meetings of Fed the XXX fund over three stall reduced saw in reduction year the

at XXX For the XXXXs, cutting points up X.X%, despite XX-year rate back first the the cut. rose to cycles time dating basis in seven the year the finishing Fed

the future the During treasuries the about political The of basis increased the rates, environment uncertainty the due for premium to term strength unevenness points, fourth housing the XX-year which of market's the face and by modest challenges quarter affordability continued underlying reflects market various before economy. and to at and XX September, peaked mortgage dropped in The including ending long-term activity XX-year issues. and a X.X% May rates, X.X% year average many interest in fixed the at the supply/demand factors, to year uptick at in started X.X%. rate to leading XXXX, X.X%,

lock-in declined Unsurprisingly, the sales of the home owned of homes lowest to sales year since be the believe And the XXXX, to continuation XXXX, consecutive reflecting for previously the we what suffered. third level effects.

but from XXXX. is construction were estimated of home which XXXX, for demand completed be of But homes built above that in new and the was March level completed New to which under in slightly sale peak for since newly supply, X home months is homes, were to RTL strong balanced reflecting inventory months, represents X.X believe we X.X supportive market. market what sell months. its the December highest new slightly from of sale December. in new The homes that in peaked hit homes The for new number are up construction down

further Index. that improvement We equity. house the to quarter quarter third believe the homeowners third and due side, Housing X.X% appreciation existing is Price the in according prices the prices U.S. home home increase. positive On this to FAHs Between XXXX positive portfolio price continue for XXXX, rose our to

defaults, by our for products. particularly Residential rising to in securitized credit and performance XXXX, home securities business for driven low prices credit levels asset-backed strong of Another homeowners' was equity. fundamentals other spreads positive development was and record due robust

non-Agency XXXX spreads structure of and In billion, bottom indicators of gross ended at with the strong XXXX, especially was approximately credit doubling almost capital flattening very tightened issuance levels in the $XXX strong as $XX significantly. issuance credit RMBS billion. at addition, were from technical Investor demand curves

So source senior while debt proceeds mean CMOs. We invested as floating $XXX what diversified did for securitized we we December liquidity to transition loans Consistent XXXX. we mortgage committed did issued loans, XXXX? equity other tranches our all small invested or We portfolio and We RPLs what non-QM as the these our as from packed in seek mean to of capital We our purchase XXXX-RX. we million deploy the XXXX, In by in loans of believe residential a newly with strategy investments investments them of an third-party in attractive in mortgage and we year. subordinate balance we to of XXXX liquidity this commercial income. rate strategy, raises which and CIM loans. acquisition. securitizations, in purchased purchased deployed return loans. in XXXX reperforming increase And Palisades agency raise We in this will our two and for in provide that quarter, fourth securitize it in and for managed sources

U.S.-based income new and we the across services, this capital-light third-party acquisition, ability manages estate represents spectrum acquisition XXXX, third income, management specializing the parties of invests the providing credit. Palisades the closed Through manager a residential a residential we of and and December, advisory in which assets estate asset grow behalf on we Palisades investment in believe a of alternative finally, source real and in broad of Founded And began Group, real basis. products. fee-based credit our on to

manner In We to continue a are fee-based management an income grow portfolio, continue approach portfolio revenue liquidity in and diversify uncertain What are and for our to to our in disciplined XXXX, expecting to operate expect plans XXXX? stream. we increase our environment.

grow to portfolio. Agency loans, expect to While look we RMBS acquire to securitize our we'll and continue for opportunities mortgage

will compliance, liquidity RMBS volatility, and dividends of In the source in stable more protection. addition provide provide our regulatory supporting acquisitions, business and to opportunistic we asset diversification, periods portfolio for a Agency believe of and

our agency to are our which hedge as roots a opportunities returning intend will provide portfolio to REIT. We we our growing for also of we our hybrid rights, loan potential servicing portfolio, as believe well By mortgage a dividends. to help look income acquire to source as diverse

the them us have deals. our future Palisade's recent our manager portfolio. to With our platform efficiency on of asset that securitization, performance existing returns combining strategy revenue. diversification most Palisades and the of resecuritizations our believe of our we across the shareholders acquisition, of drive add services we We through to and with as embarked to advisory expect Palisade's including securitizations, will allow to the ours enhancing

of accretive the -- we've to the those It's will to fee-for-service process, of our investments Lastly, acquisition early income. see we continue but earnings. the fee-based in be -- based to begun believe

look to through into we beyond, expand look our external will to investment organic XXXX for move opportunities grow we and nondiscretionary a growth. and combination As of grow and management and to asset and services continue advisory

plan allows capabilities asset In on management in our operational to and drive enhance expand us we addition, and technology efficiencies. that investing

existing and portfolio source strategy. to that from We to relever as diversification return initiatives the portfolio growth of our expect for come our funds we

next notices outstanding of call resecuritize couple securitizations, to months. on we issued and in our of NR the expect all have the We loans

for to R of capital capital the expect call we securitizations opportunities some also to XXXX. in addition, raise We'll in In look markets.

Finally, finance notes limited securitizations long-term non-mark-to-market retained we from opportunities to seek financing continue to with our facilities. or

XXX and We non-mark-to-market XXXX. coming were able we discussed to investments. into the an due flat, than we deploy interest in greater enter By in new approximately have reduction rate. had January better facility, basis were larger increasing million expensive the As terms size to but we facility in in a new able the with receive $XX point expense of past, our to is facility

growth dividend a goal book the portfolio, more stable We that to designed business, growing to Our benefit our good stock XX% that provide to current income and to new implement and price quarterly of feel will about finding build opportunities, relative and is increased by value. we sources our are initiatives XXXX. diversified we're durable, our and

lastly, shareholders. growth business opportunities expand over And our believe turn call review the acquisition or the additional our and our now provide to for Palisades financial results. we will will Subra strengthen further I to for of and

Subramaniam Viswanathan

will the fourth book per I for financial net highlights was income quarter million Phil. the for quarter was at $X.XX the value review fourth you, share. Chimera's share. the Thank $XX.XX for GAAP $X.XX loss per GAAP XXXX. per fourth year end the or $XX.X of GAAP or $XXX.X net was quarter million of full And share.

year, quarter dividends on our our XX.X% GAAP the XXXX. X.X%, the quarter, common value which the declared share. book fourth dividend return in on $X.XX economic value quarterly negative of and a For And for was was full includes based change positive in per economic book return the

the income $XXX or an On $XX.X net year the earnings for full $X.XX million or was fourth for and net $X.XX share. per for per income share, million quarter available distribution basis, was

Our economic million. net $XX.X the fourth quarter for was interest income

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

our $X.X ended financing exposure company unencumbered hedging, billion outstanding and with cash had assets. the $XXX At we For liabilities. total rate and in repo the year on million liquidity, year-end, forwarding

was weighted interest hedges rate billion. We pay pay our X.XX% a had or a a fixed The maturity in company rate Our average $X.X representing of on had X.XX%. total company a less interest repo at limited of net this pay in average $X.X X-year XX% rate recourse X option of January. in million The agreements fixed of had position non- with $X.X a executed features either on $XXX fixed swaption also outstanding our funding. than with weighted floating rate We obligations year. swaps long billion billion rate mark-to-market secured swap of

as X-year I-X. spread CIM In net year-end, short position out on treasury future I-X closed XXXX of XXXX securitization we in At we the our show contracts securitizations. will closed securitization, certain strategy execution to This was January, mitigate part on to risk CIM interest of January. protect

For quarter interest our net income, of XX.X%. equity XXXX, economic on fourth the return was

excluding and expenses average equity was lower general, year-over-year, X.X%. return was equity related return Palisades to marginally XX.X%, on acquisition. EAD were while expenses lastly, negative And GAAP servicing and the administrative Our our average compensation, on

Our transaction reduced lower in year were due expenses securitization XXXX. during activity significantly to the

fourth $X.X the from primarily However, million, Palisades acquisition. to expenses these expenses related in increased by quarter

call portfolio. the our turn to now review will Jack I to over

Unknown Executive

Thanks, Subra, excited be and good morning, to everyone. here. I'm

start Before dedicated on mortgage to diving a credit back portfolio, I introduction about I'd share where a securitization and to began on I career both like my has buy deal structured responsible then spent entire nearly little and background. brief acquiring, into been sell asset-backed bit going with and My the for managing to XXXXs risks. the and side, late residential after and the mortgage focusing execution years worked on the and teams side, X on credit I financial structuring structuring. security before both leading products. crisis,

they even little with building Core Palisades objective be objective Chimera access work and over just to December. we individuals a integration cohesive is cofounded of now the a want over It worked to strong. opportunities team. to fostering rewarding the their and we're activities. to clients the the years of across efforts. motivated ago, entire and of acquisition providing of over extend a months the through with credit to part that variety incredibly challenging more I a teams proud the special was weeks thanks We're unit, of between culture. team been and integrate as collaboration and the deeply report patiently what now into core the and I well a diversified highly management A to since grateful has to built, spectrum been happy that last excited and XX of asset professionals single investment mortgage have progressing early X in I'm has I'm the tirelessly X team Chimera for teams

to the on portfolio. Moving

by points interest early full slightly where while marked rates credit was basis same quarter The between third sloping XX quarter. At tightened. moved As rise curve. Agency and significant the to was the the since X-year by Bill spreads mentioned, spreads the yield first spread quarter had XX-year a also and the non-agency widened in a fourth wider positively treasury time, MBS we XXXX, compared

and it not change interest also deterioration. changes mark-to-market GAAP While this rate spreads of in credit environment basis. a opportunities, provided unexpected investment important the our compelling book the on any rates and was impacted in note value a It's credit to that negatively result book result direct value the of

with further credit strong and we acquisition. enhance risk to In our fact, level credit performance Palisades products, management loan capabilities expect asset various remained our across the

allows locking financed Recall, margin primarily net to supporting nonrecourse paying our us portfolio in credit loan is This interest our our isolate securitization. using ability. term and dividend risk while

debt, movements question nonrecourse we through volatility we While since Q&A, end of financing to due will compared come rate advantages also increased movements. sharp value has during And periods it securitization of business value provides X% can anticipate GAAP this year-end. recourse introduce the structural since yesterday, book to rate and spread in up estimate approximately book our leverage

consisting $XXX $XXX of ended quarter, and of short-duration of billion we sellers the purchased of the During CMOs, billion MBS. with and billion non-agency $XX.X net $X.X in residential of million Agency loans million year a were residential of loans, $XX.X we $XXX and RMBS portfolio, transition million investment agency

Our reperforming of $XXX residential loans prime collateralized of properties, million seasoned loans billion million of residential XXX loan loans. by book $XXX legacy jumbo of investment includes million transition $X.X and

the portfolio's Our result loan which an ago performance seasoned delevered balance majority home a basis principal with from of stable average serious X.X% about and of today's rate right XXX and and as years or flat makes on reperforming XX-year last points mortgage The values. just loan of of XX approximately remained quarter-over-quarter period year. below sits the our GAAP loan-to-value The down were at up assets, rate amortization have of same XX%. at interest average the Credit delinquencies in X% is ratio years fixed over effectively with estimated rising originated portfolio, $XX,XXX X.X%. considerably vast average X.X% portfolio on

range. remained speeds mortgage for QX that last range-bound X% in rates, and X% with have to the holding Given X continued elevated the prepayments years, in

our the the our -- communities, many our While and with including recent are exposure and to thoughts wildfires, limited portfolio Southern families of California has those friends Southern colleagues. in affected all individuals close

have As and exposure, preliminary longitude Four for square buffer and while properties within properties zone to damage. property-level the wildfire located XX confirmed of we of have boundaries. coordinates, our these using change, subject a X,XXX foot latitude

having borrowers of to to confirmed two due have a requesting affected We as relocate cases smoke assistance of damage. result

asset loan impacted to and monitor team our properly support, with servicing partners receive and in to communication is ensure our Our mitigated. mortgage developments management remain fluid continues actively borrowers close coordination is exposure

events. affected areas our we public, inaccessible do material or currently remain expect the some any close impact to not While economic on portfolio from these

with securitized briefly speak ended residential about $X.X the by collateralized I'll year billion portfolio. of nonrecourse financing portfolio financing. our We loan

billion or securitizations $X.X well recourse of interest or by non-agency loans, rate repo, collateralized some nearly half or portfolios. retained liabilities our our $X.X MBS importantly, and our we mark-to-market. Additionally, agency had combination was floating a of secured limited Of was non-mark-to-market and secured $X.X as billion $X.X of of XX% billion as and billion

part points during XX declined by Our easing. policy the average to basis quarter Reserve funding cost Federal repo due in

with $XXX portfolio. the attributable increase XX% increased of growth in to agency During the year, by our CMO recourse over million, the financing the

$XXX of effectively ratio Subsequent closed average January, investor at We a the across ended X.X% retained in investors rate, a an of we with securities, structure, subordinate interest-only These and to XX% demand interest of our up capital year-end, in funds from strong securitization institutional million selling we securities. an $XX representing XX%. loans loan-to-value XXXX, average structure of average of senior million and of first XXX capital carry and score million $XXX credit of loans. cost X.X% the financing

we our EAD X.XX%, rate interest active rate a floating preferred order our in reducing a liabilities, rate of maintain primarily weighted We of our of floating floating dividend locking on fixed ability. swaps risk pay maintain of equity. interest the to with our hedges to approximately with average billion rate for rate to XX%, paying or in XX% the including fixed liabilities effectively related purpose ended hedges, rate and respect With year $X.X our rate

fixed swaption X.XX% we futures with X-year $XXX shorting $X billion rate by addition, interest of a In liability $XX million the of and at exercising strike. a hedges January, further million cap purchasing a pay in swap our optimized rate X.XX%,

Moving portfolio a to and enjoy on topic We seasoned, construction. reperforming consistently stable portfolio well-equitized of the loans. of paying

Phil's are this opening the can be to we diversification Capital remarks, and foundation develop echo However, investment a excited to committed portfolio. that about securities. redeem unencumbered or and to for use retain effort to we to opportunity and further resilient our paydowns portfolio also delevered in that and where right securitizations from from organically embedded senior the call cash the sourced equity assets, our capital is diversified

to loans into fundamentals unlocking securitization. into a us rights, optimism call capital we or Credit elect effect new will the that in priced into to complementary the of each refinance In finance case, ability asset these the we sell many classes. are and has exercise strong can As give is either redeploy this investments. housing them

the areas on allocations our Currently, portfolio risk enhance that servicing continue return. agency of include that durability short allocation potential We making our loans. and are to construction, to in believe diversification, will we believe areas possible the duration, to focused transition high-yielding enhance to portfolio focus increase MBS we of the purposeful and residential perhaps mortgage our overall risk-adjusted rights long-term have supplement profile our allocations

more a defensive periods pivot dynamically opportunities market relative we the or they more securities programs. of can capture agency base the we to allocation and asset credit allow The posture to portfolio to subordinate opportunities quickly portion stress. liquid intended from value less retained into will That liquid ratchet relative our is the balance take securitization of agency with us up emerge allocation portfolio to to a liquid provide when the during

important return only the book rates. near-term Not MSRs produce as component offset portfolio strategy. our to attractive we loan of see investment movements value can risk-adjusted do as natural a interest hedge one we as in but also with that can serve an asset class volatility our Similarly, associated an help and view

and to team investment Our in deploying spectrum, to infrastructure products a continue to source manage the these resources seek the has and quarters come. reach across we residential and

Turning to resources.

most optimize proprietary key and management the infrastructure, our and our capabilities efficiency teams designed One of phase tools our management outcomes combined of and strength asset mitigation, the is and work scaled default platform drive of compelling portfolio. advanced servicing to management data These pre-acquisition the investment from technologies. across post-closing partners empower workflows enhancing with loss are to asset we by the diligence, through due level closely and our aspects performance

In out since having the on we services the asset Palisade's on to first this as plan X the roll the named by initiative in just manager And this our continuing already acquisition, capability of step the we securitization taken first weeks have first advisory broader portfolio. and XXXX. across

Phil's to would about Finally, acquisition. I like reiterate Palisade's comments

capability Our diversified discretionary solutions, with includes revenue third-party experienced residential in asset fee-based nondiscretionary products providing clients and accounts to our opportunity investment This private growth years. access steady portfolios. separate by customized a presents has significant bonds. recent grow credit asset-backed and credit to Palisades management and

enhance serve other under institutional broader foundations and allocators. resources to including institutional Chimera by the managers, endowments, these a unlock uniting to platform, investors we and clients, and insurance However, expect of capabilities scaled range our asset companies, ability substantial

base The provider to highly a these not of capital complementary diverse clients enhances positions stress. but our sourcing solutions and REIT the our our see market in from advisory reach, as also We credit periods for our funds portfolio. investment as only team market partnerships efforts

of position and combination our credit. in strengthens leader Palisades team as the a closing, In the Chimera mortgage

committed this industry, move we is in and discipline remains within team executing XXXX. concludes focus with passionate pride our strategy our great takes the combined dynamic central and activities our and to Our That and team into our remarks. as

the open questions. call will We now up for

Operator

question Today's KBW. George first from Instructions] Bose coming [Operator with is

Bose George

looks incremental what the ROEs normalized you and be current ROE, just Can going like as higher you for see which to rate environment, about given talk longer. it's the

Unknown Executive

this Bose, Jack. is

of which looking referring sort I and the at portfolio, you're to on, mid-teens going respect is be in areas return, on to where of we opportunities to with of driver those has the about certainly, entire MSRs that in higher-yielding side position that within allocate market and that, the assets being in when what the on our portfolio, our we're seeking mean, to the capital. intended respect us target With invested we're assets allowing will be hitting those types ROE, but portfolio, do And that think notwithstanding if reinvest in a MBS, currently producing. returns to to what the said, the the of of that agency area. receiving the normalized with paydowns, And think we of in Just at today I we're what are effect our re-levering targets. deals. RTL a return than least have we not investing all focused to purpose as necessarily are is we're into seeking

Bose George

kind so of the portfolio ROE, to to way basis on time for for that say, a to, line double-digit about there net happen? think And a the to forward net roll is a

Unknown Executive

When where of it's we it to with to at in some relevering prepared have our about come of securitizations going Yes. I talk least areas of about rights. that have the lot, market and conditions. a a a we availability think that's from really where capital, is mentioned question, remarks, we mean that our and we function good call the things we respect organically

we're deals of deals what investments. so the redeploying are impact looking to And and those into at that those economic constantly understand calling new

for mind balance to really timeline what sort predict to XXXX. the but the that's it's is the is reposition top of something hard portfolio, definitely that of So of

Bose George

then of Okay. quarter, forward roll talk value just change? you just the of switching just the to value. sort about book drivers the over this And Can book Great.

Unknown Executive

in they're at the value in correlated. in a typically, it mean, the this loans they again, in year having mean, our our book to I loans some short curve one December. heightened to rise effect spreads debt. curve I is relative that was debt, I we was Jack. the lot somewhat and then the how fourth the the of is can yield see a saw look driven we Yes. of the the quarter was bigger impact and credit the somewhat if our mean, look securitized relative the securitized disproportionate of a change the steepening for loans had on with Where, is you in thing somewhat -- respect in versus -- the securitized at debt And of as change well, end, nuanced end by to move particular, that longer interesting value value you the But -- year. the to entire saw nuanced December, of that

I was the overall a relative to securitize by $X think that, increased loan like $X that. value something there where million difference, million

value all So somewhat large driven an changes the really and view sheet by anomaly. is as loans in our we debt in part. you portfolio, of do versus that investment But our think balance it securitized of if about

Operator

The is UBS. next Harter of question coming from Doug

Douglas Harter

talk that adding a or kind the around dampen talked the book of look comfort just about accepting little about potential you thoughts your volatility You add that value Can volatility MSR. currently? with potentially to might to other bit hedges

Unknown Executive

question. Yes, good

our financing securitizing those the in interest net dividend-paying buying term are loans you structures. and if structures. financing our structures residential as margin financing focused in our long term Those loans really them think and on lock allow So in nonrecourse strategy, as about ability is us to our effectively strategy

that on allows believe isolate So the risk we are our focus things that to us core competency. credit and

or this retained portions refinance the the of we our have So we our where of our strategy on to point been has repo the that hedging rate some up liabilities, of securities on non-agency focused some securitizations. floating

So our of locking if all they earnings and hedges, our at been focused dividend-paying you on ability. look in really further have

taken here just the as of investor, volatility. that have hold -- position the value as accepting we're a and buy So the risk we think I sit book we today

relates hedging derivatives. it as with to However,

in that yielding derivative it the to we're diluting we of portfolio being instead that earnings as yield important with our is with book the hedge, to a as or you value. add very stabilize MSR flowing out, do construction Now strategy, a effort that doing But cash portfolio the to element overall asset pointed to to able diluting allocation see portfolio. an

Douglas Harter

I buy hold and guess just strategy. on the

retained are pieces you that the the Or you mentioned, mark-to-market those As risk those lever non-mark-to-market Is be need all hedged? in there pieces. retained subordinates to facilities? of on

Unknown Executive

question. Yes, great that's a

combination. So it's a

I think about half we mark-to-market recourse some the say some the I mark-to-market. I provide have and as quick have to want in answer our retained it our of that on of do yes, our we is, financing is pieces materials. as The well non-agency that -- agency is and of so guess it

retained to rate is portions facilities. made into the these securitizations and fixed put less big continue Some non-mark-to-market we the course of non-mark-to-market. is have The even and push liquid over that it of so the of last year continue to do to

Operator

is of from The Hagan next BTIG. Eric coming question

Eric Hagen

or increase During did you liquidity the and can margin for interest that quarter in share call? response in call, you how cash to rates, receive margin the a posted you much

Phillip Kardis

So this is Phil.

really That's nothing immaterial. some significant. were that margin we So calls that received

Eric Hagen

Can response about thinking share interest just the Maybe maybe of the for conditions guys flow in are you to to market. to you like the turning cut securitization Fed rates? Okay. changing capital how in expectations

Unknown Executive

of as coming mean XXXX tightening you spreads credit I into course over see well Yes. as the have can XXXX. been

call and we're seek our that to analysis as our through it. of exercise perspective, to and from of rights pull we we part all out the economic into that go account, take capital as looking redeploy and So

capital thought we of at XXXX something that favorable the yesterday, in about. the capital There So notwithstanding that structure demand last throughout the this of the strong we end structure, deal CPI did bottom we to was that through deal news was the demand. conditions, that first that came good be was out our continues especially down just morning, talked

think first was down time to in that the history. I sold we've a BB

Operator

is next JMP. Cranston Trevor question The of from Citizens coming

Trevor Cranston

or you MSRs MSR the like some elaborate sort a if how on the seasoned, looking maybe to volatility. color so? type that of what help of to adding mentioned class next kind or to into more current on coupon some of help also as product Can if potentially just coupon? asset new asset hedge of provide guys are much it's book little deploy lower class partially bit capital a at, it's over year you'd you You And bit be a little value looking approximate

Unknown Executive

portfolio have Yes, allocation a host portfolio, function perspective, the sort I resecuritizations model sort in of but out order that to here. things, I'll really we reverse our is model of much that from I to including say. From to market mean able mean sure. capital relevers start it's and how of do an hard getting doing. pull of we're we're conditions, whole a internal

hard answer. that are to on in direction. a laser-focused we definitive say moving give that it's I will So

course So the to of XXXX. come more there over

Just like we MSRs make as mean I value. we really an One, asset seeking MSR a are the portfolio. class, the where different reasons. for couple see of we allocations within to purposeful

buck, value of And money. core But the to front portfolio point next of construction, It's want a out a from order if get X, component us the the substantive at whatever things buying let's it's -- the coupons how in to this to at look money that. portfolio any more from MSR, for just bang trade in relative effect a over the of really perspective. at thinking In where attributes So also at have we duration will, X, are of we X not years. the time. have MSRs going to most you versus look is are obviously, look negative an X, about do

attractive market So have those looking are think coupon there the at characteristics this prepayment the lot for of because have at value and in time, lower of it, these of relative just and recapture some less that point folks I having a as originators. a to value coupons component there's lot more that volatility, current a

overall the we really is. offset, duration when context is coupon where So think we'll about the stack and portfolio. look of how going relative it the MSRs across is we're what it putting to stabilize But value it, see the in

portfolio, objectives. this. to had in did for an If with coupons. We I to a more guess more we -- achieve we We allocation. we current would have it if capital our coupon lower end just could So equity allocate less order I'll have of

Trevor Cranston

Got it.

And reform could likelihood of could around thoughts to Okay. what talk that of for present bit Chimera little and about guys your a GSE were kind That's happening? up helpful. you opportunities the end that then maybe if

Unknown Executive

seem out Yes. in mean, I to think with we of I stated kind are policy, when guess include about what committee. last I security, fall come about has start is efficiency. to government the you the tough tariffs is a privatization. priorities. Secretary and HUD privatization I that and our probably, government GSE have one. we mean, The talk much it question investment guess the immigration, bucket trade I of how week, border I They about into comments and mean, administration's to third it that's made new sort efficiency. of think GSE

hard not is be whether of going top it's to mind So say. or to

homeownership. likely risks? seek to day. us And spreads of build that be leg opportunities our much sounds or as go to present like cause could had have a material today do sort to is and we to agency as to do finance to seems is the one privatization, be MBS that consensus a housing focus when path come we be is that could policymakers to doesn't ensure going anything want portfolio, be going that negatively if of I perhaps impact thing headlines It possible effect some to will And will objectives so agencies, to we'll negative market opportunities to this seek it's the From a which of opportunities out, down housing of to core not -- the it increasing you sort that it by one of I not headlines the long perspective, likely perspective, on what we headlines widen. if process. that guess, if agencies the policy, do of be it the in lay of for -- to is driven we our mean will, that clear from guess the of a our think want or even like for promote bit on the just and disrupt do I market.

focus towards then core non-agency move the of of a The space. is, on other be products products privatization, the do some can more and one they could into the if element more where do they move eventuality that scenario some non-core

Beyond that, it's really anybody's guess, I would say.

Operator

Thank you. Mr. I'd to this like At Kardis for comments. time, back turn the floor to closing over

Phillip Kardis

you and quarter earnings again. to participating Thank call, to for I'd in quarter look you I our thank speaking everyone XXXX XX,XXXst to earnings forward fourth on like call. our

Operator

This you and for event. thank gentlemen, participation. Ladies concludes your today's

this log webcast day. your may rest You and disconnect enjoy the the at of your off lines and time,

Chimera Investment (CIM) 12 Feb 252024 Q4 Earnings call transcript