Chimera Investment Corporation

Greetings and welcome to the Chimera Investment Corporation second quarter earnings conference call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star 1 on your telephone keypad. If anyone would require operator assistance, please press star 0. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Mian Feng. Please go ahead.

Thank you, operator. And thank you, everyone, for participating in Chimera's second quarter 2025 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 events 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 disclaimers in our earnings release and 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 measures. 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, Phil Curtis.

Thank you. Good morning, and welcome to the Chimera Investment Corporation's second quarter 2025 earnings call. It's great to have you with us today. Joining me on the call are Jack McDowell, our Chief Investment Officer, and Subra Viswanathan, our Chief Financial Officer. After my remarks, Subra will review the financial results, and then Jack will review our portfolio before opening the call for questions. You may be familiar with the ancient Greek parable, the fox knows many things, but the hedgehog knows one big thing. It's a simple parable, but powerful. The fox is clever, always trying new things. The hedgehog? It just sticks to what it knows best, and the fox cannot defeat him. In Good to Great, Jim Collins took that idea and asked, what separates great companies from the rest? He found the answer was not simply trying new things. It was focus. He called it the hedgehog concept, the intersection of three key questions. What are you deeply passionate about? What can you be the best in the world at? And what drives your economic engines? A couple of years ago, we looked at ourselves in the mirror and realized we were too focused on securitizing, re-performing residential mortgage loans. We needed to change, but not by becoming something new, not by chasing the new hot idea, rather by becoming more of who we already are, something we're deeply passionate about, that we believe we can be the best at and will drive our economic engine. That's residential mortgage credit. The first step, the acquisition of the Palisades Group, which enhanced our existing expertise in residential mortgage credit, brought us third-party mortgage loan management, portfolio optimization, and third-party private capital raising. The second step was portfolio diversification. We have started selling some of our assets and have relevered some of our securitizations and used those proceeds to acquire agency RMBS, which supports our REIT and 40 Act compliance, as well as providing us with a source of liquidity and income. And more recently, to acquire 6.5 billion of Fannie Mae mortgage servicing rights through a servicing partnership. We made progress, but there's still more work to be done. The third step is the acquisition of Home Express, a leading non-QM originator with a history of growth and profitability. We currently have broad, deep experience in acquiring, financing, and managing a range of residential mortgage credit assets, both for ourselves and for others. And Home Express adds the production of those assets to our platform. But this is not just vertical integration. This is strategic clarity. With both Palisades and Home Express, we looked for companies that expanded and enhanced our existing capabilities. We expect both acquisitions to be accretive not through subtraction or reduction in headcount or other so-called cost-saving synergies, but through addition, the addition of complementary capabilities, the addition of talent, and the addition of scale and scope. So what's next? We're not done yet. We'll continue to look for opportunities to grow the platform both organically as well as adding new pieces, all the while being diligent to our core principles, our expertise in residential mortgage credit, our hedgehog status, Our new trajectory will not be linear. As we noted during the last earnings call, while we successfully relevered our NR securitization, it takes time to effectively deploy capital, especially given the volatility surrounding Liberation Day, which resulted in a short-term drag on earnings in April and May before we hit our stride in June. Also, while we believe Home Express acquisition will be meaningfully accretive to our earnings as we expect 2026 and 2027 to be especially strong years for non-QM originations, we may experience decreased earnings in the short term as we redeploy capital for the acquisition and integrate them as an operating subsidiary. We also expect to invest some of those earnings to grow the platform and our assets to support future growth of our dividend. As we look forward to the future, what's the big takeaway? We're a company that knows one big thing, residential mortgage credit, and executes it. We'll continue diversifying our portfolio and income streams, growing recurring fee income, adding liquidity, and looking for opportunities to add accretive platforms and invest in accretive assets, all with the focus of growing our assets in dividend, our total economic return, over the long term. I'll now hand it off to Subra to walk you through the financials.