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Edited Transcript of CIM earnings conference call or presentation 2-May-17 1:00pm GMT

Thomson Reuters StreetEvents

Q1 2017 Chimera Investment Corp Earnings Call

NEW YORK May 3, 2017 (Thomson StreetEvents) -- Edited Transcript of Chimera Investment Corp earnings conference call or presentation Tuesday, May 2, 2017 at 1:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Emily Mohr

* Matthew J. Lambiase

Chimera Investment Corporation - CEO, President and Director

* Mohit Marria

Chimera Investment Corporation - CIO

* Robert Colligan

Chimera Investment Corporation - CFO

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Conference Call Participants

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* Douglas Michael Harter

Crédit Suisse AG, Research Division - Director

* Eric Hagen

Keefe, Bruyette, & Woods, Inc., Research Division - Analyst

* Joel Jerome Houck

Wells Fargo Securities, LLC, Research Division - MD and Senior Analyst

* Steven Cole Delaney

JMP Securities LLC, Research Division - MD, Director of Specialty Finance Research and Senior Research Analyst

* Trevor John Cranston

JMP Securities LLC, Research Division - Director and Senior Research Analyst

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Presentation

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Operator [1]

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Ladies and gentlemen, thank you for standing by. Welcome to the Chimera Investment Corporation First Quarter 2017 Conference Call and Webcast. (Operator Instructions) It is now my pleasure to turn the floor over to Emily Mohr of Investor Relations. Please go ahead.

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Emily Mohr, [2]

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Thank you, Marie, and thank you, everyone, for participating in Chimera's First Quarter 2017 Earnings Conference Call. Before we begin, I'd like to review the safe harbor statement. During this call, we will be making forward-looking statements, which are predictions, projections or other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties, which are outlined in the Risk Factors section in our most recent annual and quarterly SEC filings. Actual events and results may differ materially from these forward-looking statements. We encourage you to read the forward-looking statement disclaimer in our earnings release in addition to our quarterly and annual filings.

During the call today, we may also discuss non-GAAP financial measures. Please refer to our SEC filings and earnings supplement for reconciliation to the most comparable GAAP measure. Additionally, the content of this conference call may contain time-sensitive information that is accurate only as of the date of this earnings call. We do not undertake and specifically disclaim any obligation to update or revise this information. I will now turn the conference over to our President and Chief Executive Officer, Matthew Lambiase. Please go ahead.

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Matthew J. Lambiase, Chimera Investment Corporation - CEO, President and Director [3]

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Thank you, Emily. Good morning, and welcome to the First Quarter 2017 Chimera Investment Corporation Earnings Call. Joining me on the call this morning, I have Mohit Marria, our Chief Investment Officer; Rob Colligan, our Chief Financial Officer; Choudhary Yarlagadda, our Chief Operating Officer; and Victor Falvo, the Head of our Capital Market.

I'll make some brief comments, and then Mohit will discuss the portfolio activity, and afterwards, Rob will review the financial results for the period. We will open the call for questions afterward.

Chimera had a very busy first quarter. This quarter we purchased and securitized $4.1 billion of seasoned performing residential loans and issued $325 million of Series B preferred stock. $3.2 billion of the loans purchased occurred near the end of the quarter, while the preferred stock was issued midperiod. The timing and expenses related those transactions produced some noisy financial results for the quarter. Our reported core income does not capture the full run rate of these new investments. And also, as we've discussed on earlier earnings calls, securitization deal costs are taken upfront, and they reduce core income in the period that we execute the deals. We expect our core income to increase in the second quarter when the full run rate of the new assets is realized. In order to expand our balance sheet and acquire new -- these new loans, Chimera raised additional permanent capital issuing a new Series B preferred stock. In February, we launched a $75 million deal and due to strong investor demand, we successfully grew the preferred stock deal and raised $325 million in new capital. This capital raise enabled us to purchase the new loans, and we continue to deploy new capital to grow our balance sheet. The preferred stock is accretive to our common shareholders. With the transaction this quarter, Chimera now consolidates over $12 billion seasoned small balance residential loans under its balance sheet. In our opinion, the size and the scale of this portfolio would be very difficult to recreate, and this portfolio differentiates Chimera from its competitors. We now have over 140,000 loans with an average coupon of 7% and an average balance of just $90,000.

These loans are on average 11 years old. To date, we've witnessed moderate prepayments and better credit performance than our purchase assumptions on this portfolio. And we continue to believe that small balance residential loans offer one of the most attractive investment options in the fixed income market.

During the quarter, our investment team successfully executed 4 nonrated securitizations to finance the new loan acquisitions. Chimera has proven itself once again to be a leader in risk retention securitizations. There are 15 securitizations financing our $12 billion small balance residential loan portfolio, making us one of the largest participants in the new issue mortgage markets. When we sponsor securitizations, we have the ability to create higher-yielding investments for our portfolio rather than just simply purchasing bonds in the secondary market. The bonds that we retain are generally locked out from prepayments, which allows our higher-yielding investments to be outstanding for longer periods of time, which is a true benefit in the low interest rate environment. Chimera also retains the optional right to call and refinance the securitizations, which gives us a pipeline of investment options for the future.

The ability to acquire differentiated mortgage assets and finance them to a securitization is our core business, and this strategy affords us the ability to produce relatively high income for our investors, while allowing us to operate at lower recourse leverage than our competitors. We continue to operate in a defensive recourse leverage, which gives us dry powder to be opportunistic if assets cheapen in the future.

Looking forward, we believe that we ended the first quarter in a much stronger place than where we started it. We feel good about our portfolio. And we believe we're well-positioned to continue to produce high relative income for our investors in the quarters ahead. Now with that, I'll turn it over to Mohit to discuss the changes in the portfolio and the market.

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Mohit Marria, Chimera Investment Corporation - CIO [4]

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Thank you, Matt, and good morning, everyone. I will briefly review macroeconomic factors, then go over the investment activity for the quarter.

Unlike the fourth quarter of 2016, the first quarter of 2017 experienced lower rate volatility with minimal changes in rates quarter-over-quarter. The 2-year and 10-year U.S. Treasury rates each closed the quarter within 5 basis points of where they began, and the yields were flattened by a little less than 10 basis points. The Federal Reserve raised short interest rates by 25 basis points in March, though the announcement by the Fed had minimal impact, as it was very much anticipated by the market. Looking forward, our expectation for interest rate is not too different than market consensus. We're expecting 1, maybe 2 more rate hikes in 2017, followed by the Fed focusing on shrinking its balance sheet. Consistent with the Treasury rate market, pricing in the agency mortgage market was little change quarter-over-quarter. Other fixed income assets, residential credits, CRT, CMBS, high-yield and investment-grade corporate bonds, however, experienced strong performance due to the spread timing during the quarter. The size and coupon distribution of our residential Agency portfolio was relatively unchanged on the quarter, and our Agency CMBS was modestly larger, $60 million, as we continue to add prepayment protection to our portfolio given the uncertainty around the rates market. Residential mortgage credit continues to perform well. The universal seasoned mortgage credit continues to shrink, while housing and homeownership fundamentals continue to experience stable to improving trends.

Both S&P Case-Shiller HPI Index and the housing starts were up 5.8% and 9.2%, respectively, year-over-year, and U.S. homebuilder confidence is at the highest level since 2005. With that as the backdrop, we continue to execute upon our risk retention securitized loan strategy. As Matt mentioned, we purchased and securitized $4.1 billion in loans this quarter in 4 separate transactions. We briefly discussed on our last earnings call that we securitized $526 million loans in January. We followed that up with $331 million CIM 2017-2 in Feb and $3.23 billion CIM 2017-3 and 4 in late March. The $4.1 billion loans were purchased from multiple sellers; however, the underlying characteristics were all very similar and complemented our existing portfolio of seasoned small balance performing loans.

Chimera retained a face amount of $640 million in these securitizations, and we expect to generate mid-teen levered returns like the deals we issued in 2016. Collectively, CIM 2017 1 through 4 have a weighted average coupon of 6.95%, a weighted average loan age of 139 months and an average loan balance of $84,000. The combined pool of loans had a weighted average FICO of 668 and a loan-to-value ratio of 89%. Like in the Agency MBS sector, loans with low loan balances are more expensive to refinance, which help create lower and more consistent prepayment rates for our portfolio. Chimera's securitized loan portfolio in total is performing better than our original expectations. We continue to experience prepays in the high single digits, and defaults and severities are lower than our original purchase assumptions, which is consistent with the strong housing statistics talked about earlier.

Despite a continued tightening and shrinking universe of residential mortgage credit product and a relatively low level of residential mortgage-backed securitizations in the market, portfolio team has continued to source product and execute upon our risk-retention strategy. With a continued improving performance in seasoned residential mortgages and the decreased amount of outstanding RMBS securities available for purchase, our CIM deals continue to meet strong investor demand, affording us the ability to add high yielding assets to our long-term investment portfolio. We continue to deploy the capital raised and are optimistic that we'll be fully invested in the near future. I will now turn the call over to Rob to review the financial results.

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Robert Colligan, Chimera Investment Corporation - CFO [5]

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Thanks, Mohit. I'll now review financial highlights for the quarter. GAAP book value at the end of the first quarter was $16.20 per share, and our total return on GAAP book value is 5.3% based on the quarterly change in book value and the first quarter dividend. GAAP net income for the first quarter was $158 million compared to $219 million last quarter.

On a core basis, net income for the first quarter was $96 million or $0.51 per share compared to $121 million or $0.65 per share last quarter. Securitization deal expenses reduced core income by $0.06 for the first quarter. Also amortization related to our Agency portfolio reduced income by approximately $0.06 compared to the fourth quarter. And our most recent preferred stock offerings, while successful, temporarily reduced earnings by $0.01.

Net interest income for the first quarter was $141 million compared to $154 million last quarter. The decrease in net interest income relates primarily to our Agency portfolio and the related slowdown in prepayment fees in the fourth quarter as the 10-year Treasury rate rose dramatically post-election in November. Our yield on average interest-earning assets was 6.5% for the quarter compared to 6.9% last quarter. Our average cost of funds was 3.5%, up slightly from last quarter, and our net interest spread was 3% compared to 3.4% last quarter. Total leverage for the first quarter was 4.6:1, while recourse leverage ended the quarter at 1.7:1. Our net interest return on equity was 16% for the quarter compared to 19% last quarter, and a return on average equity was 20% for the quarter compared to 29% last quarter. Expenses for the first quarter, excluding servicing fees and deal expenses, were $12 million, slightly lower than the fourth quarter. In 2017, we expect these expenses to be $12 million to $13 million per quarter. That concludes our remarks, and we'll now open the call for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Your first question comes from the line of Douglas Harter of Crédit Suisse.

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Douglas Michael Harter, Crédit Suisse AG, Research Division - Director [2]

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I was hoping you could talk about your capital mix. How you -- what type of capacity do you think you have for additional preferreds?

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Robert Colligan, Chimera Investment Corporation - CFO [3]

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Well, we raised a fair amount over the last 6 months between the Series A and Series B. They've been very accretive for us as Mohit and the team have found investments that are yielding in the mid-teens. The excess earnings over the preferred yield is accretive to the common holders. And we have found some interesting deals that we've talked about and Mo has provided details, and we'll continue to be opportunistic. But we haven't given out any other guidance as far as near-term capital raises. And if we plan on raising more, I think we'd have an announcement.

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Matthew J. Lambiase, Chimera Investment Corporation - CEO, President and Director [4]

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Yes, I would just add to that to say that we're still working through the capital that we raised in investing. As you saw in the quarter's recourse leverage numbers, they're down quarter-over-quarter, and that's just really because as we invest in the marketplace, it takes us a lot longer -- it's not just like buying agencies and going out and putting $1 billion or $2 billion on. It takes Mo and the team quite a bit longer to actually invest in the marketplace. So we're still working through that. We don't have any immediate needs for more capital. I would say, just in general, with a company like ours, you probably just have a little bit more room for preferreds, I would imagine, but I don't think that there's a tremendous amount of capital more out there on the common base that we have.

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Douglas Michael Harter, Crédit Suisse AG, Research Division - Director [5]

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Got it. And just on -- to follow-up on that. I guess, how much more rooms you have on leverage to sort of fully deploy the capital that you raised last quarter?

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Matthew J. Lambiase, Chimera Investment Corporation - CEO, President and Director [6]

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Yes, I think we are at 1.7 at the end of last quarter in terms of recourse leverage. I could see ourselves going back up to 2 turns of recourse leverage over, say, this quarter or in the third quarter, I mean, if we're successful in finding investments. I think we have to take the leverage up here over time as we find good investments. But the biggest issue for us is really making sure that we're finding good assets in the marketplace that we like and that fit in with the portfolio. And I think, I've been very happy with the team. I think, they've been finding a lot of very good assets. And I'll tell you the way pricing is going in the market, you're seeing very strong pricing in residential mortgage credit. There's just not a lot of supply out there. And I think, when I think about this portfolio next year, I think we'll all be very happy shareholders that we were able to buy as much as we did in the first quarter, and Mo has been working with the team to continue to add. And I think, just the way pricing is going, it's going to be a good thing to have a lot of these assets on the books.

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Operator [7]

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Your next question comes from the line of Trevor Cranston of JMP Securities.

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Trevor John Cranston, JMP Securities LLC, Research Division - Director and Senior Research Analyst [8]

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Just a follow-up question to the comment on the strength you've seen in pricing on residential credit assets. Can you talk about, generically, if you're still seeing the same type of returns with what you bought in the first quarter? And what you're looking at currently kind of versus where they were in the later part of 2016?

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Mohit Marria, Chimera Investment Corporation - CIO [9]

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Sure, Trevor. This is Mohit. So on the legacy CUSIP side, spreads continued to tighten. So levered returns are probably inching lower. On the loan strategy that we've implemented, yes, there's tightening in sort of the loan space itself, but the secured debt that you're issuing is also tightening. So your levered returns on the loan space that you're attaining, although in slightly is still attractive in double digits to what we'll end up retaining in the securitizations we've done in Q1 and any potential future securitization. The secured debt has come in quite a bit on new issue deals given the lack of bonds available for the investor community.

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Trevor John Cranston, JMP Securities LLC, Research Division - Director and Senior Research Analyst [10]

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Got it. That make sense. And then a follow-up on the capital structure question. To the extent after you maybe increased leverage a little bit and finished deploying your current -- or the raise from the first quarter, if you continue to find attractive opportunities beyond that, would you guys be looking at selling down the Agency portfolio currently as an option? Are you kind of happy with the way that portfolio is performing and looking to keep it roughly at the current size?

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Matthew J. Lambiase, Chimera Investment Corporation - CEO, President and Director [11]

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We will -- we look at that as our liquidity portfolio. So we'd be definitely -- in my opinion, we probably look to, in the short run, bringing that down a little bit. We always have to have it to meet our 40 Act, and we also like to have it for liquidity. I think it's just a good shock absorber, if you will, on the balance sheet. But we're still working through the capital that we already raised. So we don't have anything to announce or talk about for further capital raises.

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Operator [12]

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Your next question comes from the line of Bose George of KBW.

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Eric Hagen, Keefe, Bruyette, & Woods, Inc., Research Division - Analyst [13]

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It's Eric on for Bose. Given how tight credit spreads are in the market today and especially considering the level of appreciation that has already taken place in the legacy non-agency market, would you say there has been any meaningful change in the appetite that you're seeing from investors who participate in the loan securitizations you've sold? I assume you have a good relationship with the investor base who buys bonds from your securitizations. And you know generally, what drives their decision-making for buying your senior bonds out of your deals? So what, if anything, do you think would make it more difficult for you to place those bonds with investors going forward?

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Mohit Marria, Chimera Investment Corporation - CIO [14]

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Honestly -- Eric, this is Mohit again. I think the demand for the asset is so strong currently that we've actually gotten reverse inquiry from more investors than bonds we have to offer them, which is what's leaving spreads tighter on the securitized debt side. I think liquidity issue or some other geopolitical risk, obviously, could affect the markets and spreads could maintain or tick up a little bit wider. But I don't see that happening in the near future.

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Matthew J. Lambiase, Chimera Investment Corporation - CEO, President and Director [15]

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Yes, I'm continuously amazed by how quickly -- when we bring a deal out and Mo starts marketing, how quickly the senior bonds get sold. I think there's tremendous amount of demand from depositories, from insurance companies, from mutual funds. I mean, it's just -- there is just not -- to my opinion, it just doesn't seem like there's enough spread product in the market to satiate all the demand that we're seeing. So I think we're in a very good position. I think -- as I said before, I think that continues. I just don't see the supply coming out into the marketplace to -- in the near future at least in residential mortgage credit. I think the only downside would be if the Fed Reserve starts -- we really want to see what happens with the Agency market, maybe next year when they start not reinvesting, maybe that could widen things out a little bit here. But the technicals right now in the residential mortgage credit are very strong, and I don't see them really abating.

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Eric Hagen, Keefe, Bruyette, & Woods, Inc., Research Division - Analyst [16]

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Right. That's helpful. I had a question on leverage too, but I think you guys touched on that very well. The financing on your securitizations is mostly tied to 1 month LIBOR. Is that right? And it looks like your financing costs stayed flat at like 4.4% quarter-over-quarter on that portfolio, even though LIBOR was up 20 basis points. I'm just trying to reconcile that.

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Robert Colligan, Chimera Investment Corporation - CFO [17]

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Yes, I mean, as Matt mentioned in his opening comments, the senior debt that we've issued receives all the principal paydowns. So our net balances there would shrink by the amount of money that comes in on these loans. So the overall universe of -- our balances in the secured debt is also lower, which is why the yields are not that meaningfully different given that the balances are smaller quarter-over-quarter.

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Eric Hagen, Keefe, Bruyette, & Woods, Inc., Research Division - Analyst [18]

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Okay.

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Robert Colligan, Chimera Investment Corporation - CFO [19]

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Even with LIBOR having gone up, like you said, 20, 25 basis points in Q1.

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Operator [20]

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Your next question comes from the line of Joel Houck of Wells Fargo.

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Joel Jerome Houck, Wells Fargo Securities, LLC, Research Division - MD and Senior Analyst [21]

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Just a follow-up on the Agency equity allocation. How low, Matt, can that go and still be 40 Act compliant? Like what's the floor on that?

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Robert Colligan, Chimera Investment Corporation - CFO [22]

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Yes, well, sure -- Joel, this is Rob. I think we've said in the past, we can take it down to $2 billion to $3 billion and still pass our 40 Act test. So I don't think much has changed in that space. So I think that's where we'd be comfortable, plus, as Matt said earlier, we would probably want about that amount anyway for general liquidity purposes.

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Joel Jerome Houck, Wells Fargo Securities, LLC, Research Division - MD and Senior Analyst [23]

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Okay, good. And on that -- on the Agency repo, it looks like there's been a consistent theme of shortening duration on the repo. Can you talk about that a little bit. It used to run 80 to 90, now it's running kind of 20 to 30 days.

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Mohit Marria, Chimera Investment Corporation - CIO [24]

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Sure, Joe. This is Mohit again. So the reason we've sort of kept the Agency repo short is to take advantage of opportunities that present themselves in the residential credit space to the extent we need to potentially sell some agencies to fund some of those purchases. In addition to that, the rate outlook by the Fed, potentially 2 or 3 rate hikes, some people -- lenders are building in that. So we're being cognizant of how much we think is actually going to happen. So we're keeping repo short as just another management tool to manage expenses.

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Joel Jerome Houck, Wells Fargo Securities, LLC, Research Division - MD and Senior Analyst [25]

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So that would be a way of saying, you think the forward curve might be ahead of itself and you don't want to overpay for a longer dated repo.

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Mohit Marria, Chimera Investment Corporation - CIO [26]

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That's right, that's right.

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Joel Jerome Houck, Wells Fargo Securities, LLC, Research Division - MD and Senior Analyst [27]

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Okay. And then -- so you guys, the Agency yields dropped from 4.1% to 3%. Is there like a catch-up factor there or something going on?

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Robert Colligan, Chimera Investment Corporation - CFO [28]

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So in the fourth quarter, with the 10-year backing up, we had a pretty sizeable catch-up. So -- if you look at our portfolio on a supplement, we have a lot of 3.5s and 4s. So for us to have a yield of 4.1% almost implies par, even at a discount on the agencies which, as you know, just doesn't happen. There was a bump clearly in the fourth quarter that didn't recur in the first quarter. But I don't have it exactly in front of me. I think we're closer to 3% or 3.1% on the Agency yields, which is probably a more normal run rate.

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Joel Jerome Houck, Wells Fargo Securities, LLC, Research Division - MD and Senior Analyst [29]

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Okay. And then last one. That makes sense. The last one...

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Robert Colligan, Chimera Investment Corporation - CFO [30]

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Compared -- just to add to, compared to our peers, if you look at our Agency portfolio versus others, I think our gross yields and spreads are just as good if not better than anyone else.

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Joel Jerome Houck, Wells Fargo Securities, LLC, Research Division - MD and Senior Analyst [31]

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No, I would agree. Last quarter, you got rid of the economic book value. Is that because the appreciation has caught up so that there's not much difference between GAAP and economic anymore?

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Robert Colligan, Chimera Investment Corporation - CFO [32]

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There are a few reasons for that. One, obviously, we're seeing companies have some pressure on non-GAAP measures. That was one reason. And the other piece is, lot of the deals that we're doing now are the risk retention bonds. And when you look at the old disclosure, we talked about bonds that we've retained that we can sell or otherwise liquidate. That is really no longer the case. So those are the main 2 drivers of why we took that disclosure out.

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Operator [33]

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Your next question comes from the line of Steve Delaney of JMP Securities.

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Steven Cole Delaney, JMP Securities LLC, Research Division - MD, Director of Specialty Finance Research and Senior Research Analyst [34]

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Congratulations on the first quarter whole loan transactions. And if I may, I just wanted to follow-up on Trevor's question and touch on 1 or 2 other quick things on the capital structure, if I could. So you've had good success, obviously, with the retail preferreds with the 8% coupons. I'm just curious, looking at some other transactions that we've seen in the capital markets in recent months, would you also consider supplementing your common equity with unsecured senior notes or possibly convertible notes in the 5- to 7-year range and think they would come in with coupons below your 8% preferreds? Just curious, your thoughts on the corporate debt.

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Matthew J. Lambiase, Chimera Investment Corporation - CEO, President and Director [35]

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Yes, thank you for the question, Steve. Yes, in terms of things that are -- that have been happen on the table, we have looked at them in the past. And I think we're always out trying to figure out the best way to optimize both sides of our balance sheet. So again, those are -- I think some of those are very interesting transactions. My gut is that, like all credit spreads, they're probably -- the coupons and others are going to come into.

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Steven Cole Delaney, JMP Securities LLC, Research Division - MD, Director of Specialty Finance Research and Senior Research Analyst [36]

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Yes, yes. That's -- no, we're seeing it everywhere, it's hard to find yield, right? And then the last thing. Obviously, I'm sure you guys noticed that we saw very -- one of the larger mortgage REIT sprang a really good size follow-on last night, primarily with the intention of investing in Agency MBS. So I'm not going to ask you, Matt, if you plan to issue common shares, that would be inappropriate. But I'm going to phrase this way. If you were to consider issuing common shares, would you and the team need to see a fairly immediate investment opportunity beyond just the Agency MBS space?

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Matthew J. Lambiase, Chimera Investment Corporation - CEO, President and Director [37]

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Well, I think -- let me just say that we raised in the last 6 months about $470 million worth of preferred shares, which is a lot for a company with $3 billion of equity. And we have not raised to go put on Agency MBS or do anything like that. We've been very consistent and deliberate about how we go about and add to our portfolio. And as an internally managed company, we're in this for the long haul. And it's -- for me, the most important thing is for me to be able to put good assets on the books that are going to be with us forever. And that's job #1. So I don't see any real reason for us to go out -- and if the question is to go buy agencies, I don't see that is something that I have in act to do at the moment.

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Steven Cole Delaney, JMP Securities LLC, Research Division - MD, Director of Specialty Finance Research and Senior Research Analyst [38]

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Right. No, that's....

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Robert Colligan, Chimera Investment Corporation - CFO [39]

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Again, Steve, I'd just add...

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Steven Cole Delaney, JMP Securities LLC, Research Division - MD, Director of Specialty Finance Research and Senior Research Analyst [40]

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Please, Rob.

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Robert Colligan, Chimera Investment Corporation - CFO [41]

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Obviously, we raised the preferred and looked at the capital stock in a very thoughtful and methodical way. Obviously, the preferreds are permanent whereas the converts have a 5- or 7-year refinance risk to it. So we thought from evolution of the capitals back, having those in place first was important with call features in them, so we do have some flexibility. But all of those types of deals, preferreds, converts, senior notes, I think, given the way we've been investing, will all be accretive to the common, which is our goal as we're investors alongside with all of our institutional and retail investors.

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Operator [42]

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At this time, there are no further questions. I'll now return the call to Matt Lambiase for any additional or closing remarks.

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Matthew J. Lambiase, Chimera Investment Corporation - CEO, President and Director [43]

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Well, thank you very much for participating in our first quarter earnings call. And I'd just like to thank my investment team and management here. We are working to build our portfolio for the future, and I think we're on the right path. And I look forward to speaking to you next quarter.

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Operator [44]

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Thank you for participating in the Chimera First Quarter 2017 Earnings Conference Call. You may now disconnect.