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The Board of Directors of Chimera Investment Corporation (NYSE: CIM) declared the second quarter 2012 common stock cash dividend of $0.09 per common share. This dividend is payable July 26, 2012, to common shareholders of record on June 29, 2012. The ex-dividend date is June 27, 2012.
The Company distributes dividends based on its current estimate of taxable earnings per common share, not GAAP earnings. Taxable and GAAP earnings will typically differ due to items such as differences in premium amortization, accretion of discounts, unrealized and realized gains and losses, credit loss recognition, and non-deductible general and administrative expenses.
The Company also announced today that it has estimated that as of March 31, 2012, its GAAP book value was $3.03 per share and its economic book value was $2.76 per share. In calculating book value according to GAAP, the underlying securities transferred to certain re-securitization transactions are consolidated, fair valued and presented as if they were still owned by the Company. Chimera presents estimated economic book value to reflect the value of the securities that are issued by the trusts that Chimera retains, owns and is able to dispose of, pledge or otherwise monetize, and not the underlying securities which were transferred to re-securitization trusts. The difference between GAAP book value and economic book value is primarily driven by the nature of the securities retained in certain re-securitization transactions as compared to the nature of the underlying securities in these transactions. Our estimate of economic book value has important limitations. Should we sell the assets in our portfolio, we may realize materially different proceeds from the sale than estimated as of the reporting date.
The Company had previously announced that it would delay the filing of its Form 10-K for the year ended December 31, 2011 and its Form 10-Q for the quarter ended March 31, 2012. The Company is reviewing its non-Agency residential mortgage-backed securities portfolio to determine the treatment under GAAP according to ASC 320,
Investments – Debt and Equity Securities, ASC 325-40,
Investments – Other – Beneficial Interests in Securitized Financial Assets or ASC 310-30,
Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality.
While the Company has not completed its analysis, this review may result in a material non-cash change in the GAAP accounting results of the Company that will not affect the Company’s previously announced GAAP or economic book values, actual cash flows, dividends and taxable income for any period. The Company’s dividend distributions are based on taxable income, not GAAP income, and the results of this analysis will have no impact on the Company’s prior or future dividend distributions.