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NEW YORK - Chimera Investment Corporation (NYSE:CIM), a mortgage REIT with a market capitalization of $1.12 billion and a strong track record of maintaining dividend payments for 19 consecutive years, announced Tuesday it has entered into a definitive agreement to acquire HomeXpress Mortgage Corp., a non-QM mortgage originator operating in 46 states and Washington D.C. According to InvestingPro analysis, Chimera currently trades at an attractive P/E ratio of 9x and shows signs of being undervalued based on its Fair Value assessment.
Under the terms of the agreement, Chimera will pay the adjusted book value of HomeXpress as of the month prior to closing, plus a premium consisting of $120 million in cash and approximately 2.08 million shares of Chimera common stock. The company’s robust financial position, evidenced by its "GOOD" Financial Health score from InvestingPro, supports this strategic acquisition. Get access to 6 more exclusive ProTips and comprehensive analysis in the Pro Research Report.
HomeXpress, headquartered in Santa Ana, California, originated approximately $2.5 billion in mortgage loans in 2024 and $1.2 billion through May 2025. The company has about 300 employees and reported pre-tax net income of $47 million in 2024 with $115 million in total equity as of March 31, 2025.
"We believe that the transaction is the natural next step in the transformation of Chimera," said Phillip J. Kardis II, President and CEO of Chimera, in the press release statement. "Bringing together Chimera’s strong history of loan securitization, structured finance, and third-party loan management and advisory services with HomeXpress’ loan origination platform is expected to create a powerful combination."
Following the acquisition, HomeXpress will operate as a subsidiary of Chimera, with current President and CEO Kyle Walker and key members of the senior management team continuing to lead the business.
The transaction is expected to close during the fourth quarter of 2025, subject to customary closing conditions. Chimera expects the acquisition to be accretive to earnings in 2026.
Wells Fargo acted as financial advisor to Chimera, while Piper Sandler & Co. advised HomeXpress and Seer Capital Management, from which Chimera is acquiring HomeXpress.
In other recent news, Chimera Investment Corporation reported its first-quarter 2025 earnings, revealing an earnings per share (EPS) of $0.41, which fell short of the forecasted $0.44. Despite this, the company significantly exceeded revenue expectations, posting $206.5 million against a forecast of $75.97 million. UBS analyst Doug Harter upgraded Chimera’s stock rating from Neutral to Buy, citing stronger-than-expected book value performance and improved near-term earnings forecasts as reasons for the upgrade. The analyst also raised the price target to $15.00 from $11.50, noting the company’s potential for increased dividends. Additionally, Chimera announced a second-quarter cash dividend of $0.37 per share, maintaining its consistent dividend policy. The company also disclosed that it recently acquired Palisades Advisory Services, which has enhanced its service offerings. In other developments, Chimera’s stockholders ratified the appointment of Ernst & Young LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025.
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