Chimera Investment (CIM) Approves One-for-Five Reverse Split; Boosts Dividend

Chimera Investment (NYSE: CIM) announced that the Board of Directors has approved a reverse stock split of Chimera’s outstanding shares of common stock at a ratio of 1-for-5, increased the first quarter dividend and set the quarterly dividend for the remainder of 2015.

Reverse Stock Split

The reverse stock split is expected to take effect at about 5:00 p.m. Eastern Time on April 6, 2015 (the “Effective Time”). At the Effective Time, every five issued and outstanding shares of common stock of Chimera will be converted into one share of common stock of Chimera. In addition, at the Effective Time, the number of authorized shares will also be reduced on a five for one basis. The par value of each share of common stock will remain unchanged. At the market open on April 7, 2015, the common stock will continue trading on the NYSE under the symbol “CIM” but will be assigned a new CUSIP number: 16934Q 208. “We believe that our existing stockholders will benefit from our ability to attract a broader range of investors as a result of the reverse split.” said Matthew Lambiase, Chimera’s CEO and President.

As a result of the reverse stock split, the number of outstanding shares of Chimera’s common stock will be reduced from approximately 1 billion to approximately 200 million. Concurrently, the authorized number of shares of common stock will be reduced from 1.5 billion to 300 million.

No fractional shares will be issued in connection with the reverse stock split. Instead, each stockholder holding fractional shares will be entitled to receive, in lieu of such fractional shares, cash in an amount determined on the basis of the average closing price of Chimera’s common stock on the NYSE for the three consecutive trading days ending on April 6, 2015. The reverse stock split will apply to all of Chimera’s authorized and outstanding shares of common stock as of the Effective Time. Stockholders of record will be receiving information from Computershare, Chimera’s transfer agent, regarding their stock ownership following the reverse stock split and cash in lieu of fractional share payments, if applicable. Stockholders who hold their shares in brokerage accounts or “street name” are not required to take any action in connection with the reverse stock split.

2015 Dividends

The Board of Directors of Chimera today announced the declaration of its first quarter 2015 cash dividend of $0.096 per common share, a 7% increase from the fourth quarter 2014 dividend. The first quarter dividend of $0.096 per common share does not reflect the effect of the reverse stock split and would be equivalent to $0.48 per common share on a reverse stock split 1 for 5 adjusted basis. This dividend is payable April 30, 2015, to common stockholders of record on March 31, 2015. The ex-dividend date is March 27, 2015.

The Board of Directors also announced that it intends to set a consistent quarterly dividend for the second, third and fourth quarters of 2015. After the completion of the reverse stock split, Chimera’s second, third and fourth quarter dividend is each expected to be set at $0.48 per share on a reverse stock split adjusted basis.

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. Portions of the dividend may be ordinary income, capital gains or a return of capital.

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