Invesco Mortgage Capital (NYSE:IVR) Q4 2025 Earnings call January 30, 2026 09:00 AM ET Company ParticipantsBrian Norris - CIOGreg Seals - Head of Investor RelationsJason Stewart - Md & Head of Specialty Finance & Real Estate ResearchJason Weaver - Md & Head of Specialty Finance & Real Estate ResearchJohn Anzalone - CEOConference Call ParticipantsDouglas Harter - Director & Senior Equity Research AnalystEric Hagen - Md & Mortgage & Specialty Finance AnalystTrevor Cranston - Director & Senior Equity Research ...

Financial Data and Key Metrics Changes - Financial conditions improved during the quarter, supported by two Federal Reserve rate cuts, solid corporate earnings, and strong economic growth [4] - Book value per common share increased by 3.7% to $8.72, resulting in an 8% economic return for the quarter [7] - The liquidity position remained robust with $453 million in unrestricted cash and unencumbered assets [8] Business Line Data and Key Metrics Changes - The agency mortgage portfolio was valued at $5.4 billion, while the agency CMBS portfolio was $900 million [8] - Agency RMBS investments increased by 11% quarter over quarter, focusing on 5% and 5.5% coupons [18] - The agency CMBS allocation declined modestly due to growth in the overall portfolio, despite no new purchases [21] Market Data and Key Metrics Changes - Interest rates were generally stable, with the 10-year Treasury yield ending the year at 4.17%, 40 basis points lower than the start of the year [10] - The yield curve steepened, benefiting longer-term investments such as agency RMBS and agency CMBS [11] - Agency mortgages delivered strong performance, driven by reduced interest rate volatility and robust demand from money managers [13] Company Strategy and Development Direction - The company remains positive on agency mortgages, anticipating favorable conditions due to lower interest rate volatility and expectations for broadening demand [9] - The strategy includes a focus on specified pools with lower loan balances to enhance predictability of cash flows [19] - The company plans to selectively access the ATM for capital raising when conditions are favorable [42] Management's Comments on Operating Environment and Future Outlook - Management noted that the economic environment is supportive, with expectations for additional Federal Reserve rate cuts through 2026 [6] - The company views near-term risks as balanced, with a positive outlook for agency mortgages due to favorable supply and demand technicals [26] - Management highlighted that the current environment reflects a more normalized investment landscape, providing attractive levered returns [25] Other Important Information - The Federal Reserve ended its quantitative tightening program, which alleviated funding pressures and improved repo spreads [12] - The company reported a 4.5% increase in book value since year-end through the week of the call [25] Q&A Session Summary Question: Can you talk about your approach to leverage levels post the tightening and where you find value within the coupon stack? - Management indicated that leverage was modestly increased in Q4, reflecting a positive environment, and they are comfortable with current levels despite tighter spreads [30] Question: Have you seen any surprises in prepayment reports within the specified pool portfolio? - Management noted no significant surprises, with prepayment speeds in higher coupons increasing but less impacted due to prepayment protection [33] Question: Have you continued rotating down in coupon with new capital invested? - Management confirmed a focus on lower coupons, particularly in the 3.5-5.5 range, due to attractive conditions in the TBA dollar roll market [36] Question: Can you discuss your capital structure and ability to raise capital going forward? - Management expressed confidence in their capital structure, indicating selective access to the ATM when beneficial to shareholders [42] Question: How should we think about book value sensitivity and overall upside to further spread tightening? - Management stated that while the magnitude of change in book value to spread changes remains the same, expectations for further spread tightening are reduced [56]

Financial Data and Key Metrics Changes - Financial conditions improved during Q4 2025, supported by two Federal Reserve rate cuts and strong economic growth, leading to an 8% economic return for the quarter and a 3.7% increase in book value per common share to $8.72 [3][5][19] - The company's portfolio at year-end was valued at $6.3 billion, with $5.4 billion in Agency mortgages and $900 million in Agency CMBS [6][18] Business Line Data and Key Metrics Changes - The Agency RMBS portfolio increased by 11% quarter over quarter, focusing on 5% and 5.5% coupons, while the allocation in 6% and 6.5% coupons declined due to paydowns [14][15] - Agency CMBS risk premiums remained largely unchanged, with no new purchases made during the quarter, but the sector continues to provide benefits through prepayment protection and fixed maturities [16][17] Market Data and Key Metrics Changes - The 10-year Treasury yield ended the year at 4.17%, with a steepening yield curve benefiting longer-term investments [8][9] - Agency mortgages delivered strong performance in 2025, driven by reduced interest rate volatility and increased demand from GSEs [11][12] Company Strategy and Development Direction - The company remains positive on Agency mortgages, viewing conditions as favorable due to lower interest rate volatility and expectations for broadening demand [6][21] - The strategy includes selectively accessing the ATM for capital raising when conditions are favorable, with a focus on maintaining a robust capital structure [36][40] Management's Comments on Operating Environment and Future Outlook - Management noted that while near-term risks are balanced, the current environment of low volatility in interest rates and spreads is expected to provide a positive backdrop for agency mortgages over the long term [21] - The conclusion of quantitative tightening and the announcement of T-bill purchases by the Fed have solidified funding markets, serving as a tailwind for the company's strategy [20][21] Other Important Information - The liquidity position remains strong, with $453 million in unrestricted cash and unencumbered assets [6] - The company modestly increased leverage to 7 times, consistent with the constructive investment environment [5][6] Q&A Session Summary Question: How is the company approaching leverage levels post the tightening? - The company increased leverage slightly in Q4, reflecting a positive environment, and remains comfortable with current levels despite tighter spreads [25] Question: Have there been any surprises in prepayment reports for higher coupons? - No significant surprises were noted; prepayment speeds increased in higher coupons but were less impacted due to prepayment protection [27] Question: Is the decision on the ATM solely based on stock price? - The decision is based on a combination of price to book and the availability of accretive investment opportunities [40] Question: What would trigger a tighter spread range for MBS? - An increase in the GSEs' caps or a notable increase in the pace of purchases could signal a tighter spread range [46] Question: How should investors think about book value sensitivity to spread changes? - The magnitude of change in book value to spread changes remains consistent, but expectations for further spread tightening are reduced [50]

Invesco Mortgage Capital Inc. (NYSE:IVR) ranks among the most undervalued REIT stocks to buy right now. On January 16, Compass Point lifted its price target for Invesco Mortgage Capital Inc. (NYSE:IVR) to $9.50 from $9, retaining a Buy rating on the mortgage REIT. The firm identified wider-than-average mortgage spreads as a possible driver of book value per share increase. Compass Point forecasts these margins to narrow as fixed-income fluctuation falls and the yield curve grows steeper. Pixabay/Public D ...

Fourth Quarter 2025 Earnings Call Invesco Mortgage Capital Inc. January 30, 2026 John Anzalone Kevin Collins Mark Gregson David Lyle Brian Norris Chief Executive Officer President Chief Financial Officer Chief Operating Officer Chief Investment Officer Cautionary Notice Regarding Forward-Looking Statements This presentation and comments made in the associated conference call, may include statements and information that constitute "forward-looking statements" within the meaning of the U.S. securities laws as ...

Financial Performance - Net income per common share was $0.68, a decrease from $0.74 in Q3 2025, while earnings available for distribution per common share was $0.56, down from $0.58[9][12] - Net income attributable to common stockholders for the year ended December 31, 2025, was $88,173,000, a substantial increase from $34,763,000 in 2024[30] - Net income attributable to common stockholders for Q4 2025 was $48,243,000, compared to a loss of $5,472,000 in Q4 2024, representing a significant recovery[45] - Comprehensive income for the year ended December 31, 2025, was $101,106,000, compared to $59,357,000 in 2024, indicating a significant improvement[32] Investment Portfolio - The company's investment portfolio totaled $6.3 billion, consisting of $5.4 billion in Agency RMBS and $0.9 billion in Agency CMBS[4] - The company’s mortgage-backed securities at fair value increased to $6,276,609,000 as of December 31, 2025, from $5,445,508,000 in 2024[35] Dividends - The company declared a common stock dividend of $0.36 per share, an increase from $0.34 in Q3 2025, and announced a shift to monthly dividend payments[21] - Earnings available for distribution increased to $39,868,000 in Q4 2025 from $32,253,000 in Q4 2024, reflecting a year-over-year growth of 23.5%[48] Interest Income and Expenses - Total interest income for Q4 2025 was $77.9 million, an increase of $5.0 million from Q3 2025, while total interest expense rose to $56.6 million[12] - Interest income for Q4 2025 was $77,901,000, an increase from $72,916,000 in Q3 2025 and $76,110,000 in Q4 2024[30] - Total interest expense for Q4 2025 was $56,643,000, with an effective interest expense of $30,247,000, resulting in an effective cost of funds of 2.24%[52] - Average cost of funds decreased to 4.20% in Q4 2025 from 5.13% in Q4 2024, reflecting improved funding efficiency[61] Assets and Liabilities - Total assets as of December 31, 2025, were $6,475,894,000, compared to $5,688,034,000 as of December 31, 2024, reflecting a growth of approximately 13.9%[35] - Total liabilities as of December 31, 2025, were $5,678,350,000, up from $4,957,305,000 in 2024, reflecting an increase of approximately 14.5%[35] Ratios - The debt-to-equity ratio increased to 7.0x from 6.7x as of September 30, 2025, reflecting an improved investment environment[4][12] - The debt-to-equity ratio as of December 31, 2025, was 7.0, up from 6.7 as of September 30, 2025[58] Earnings and Margins - The average net interest rate margin improved to 1.11% in Q4 2025, up from 0.90% in Q3 2025[12] - Basic income per common share for Q4 2025 was $0.68, up from a loss of $0.09 per share in Q4 2024[45] - Effective net interest income for Q4 2025 was $47,654,000, with an effective interest rate margin of 3.07%[54] - Average earning assets rose to $5,868,897,000 in Q4 2025, compared to $5,440,662,000 in Q4 2024, indicating a growth of 7.9%[61] Shareholder Actions - The company issued 849,987 shares of common stock for net cash proceeds of $7.2 million during Q4 2025[22] - The company repurchased and retired 76,356 shares of Series C Preferred Stock with a carrying value of $1.8 million during Q4 2025[23] Derivative Instruments - The company reported a realized loss on derivative instruments of $18,863,000 in Q4 2025, compared to a gain of $157,864,000 in Q4 2024[46] - The company did not report any TBA dollar roll income in Q4 2025, compared to $249,000 in Q4 2024[48]

ATLANTA, Jan. 29, 2026 /PRNewswire/ -- Invesco Mortgage Capital Inc. (NYSE: IVR) (the "Company") today announced financial results for the quarter ended December 31, 2025. Update from John Anzalone, Chief Executive Officer "During the fourth quarter, financial conditions improved, underpinned by two interest rate cuts from the Federal Reserve, robust corporate earnings and strong economic growth. This supportive backdrop, along with lower interest rate volatility and broadening investor demand, drove notabl ...

Key Takeaways IVR to report 4Q25 earnings on Jan. 29, after market close, with earnings expected to rise y/y.Lower rate volatility and Fed cuts in Q4 likely tightened mortgage spreads and improved IVR's book value.Falling mortgage rates boosted refinancing and origination, raising servicing amortization for IVR.Invesco Mortgage Capital Inc. (IVR) is scheduled to report fourth-quarter 2025 results on Jan. 29, 2026, after market close. The company’s quarterly earnings available for distribution per common sha ...

In the current session, the stock is trading at $8.87, after a 0.23% spike. Over the past month, Invesco Mortgage Capital Inc. (NYSE:IVR) stock increased by 6.12%, and in the past year, by 8.59%. With performance like this, long-term shareholders are optimistic but others are more likely to look into the price-to-earnings ratio to see if the stock might be overvalued.Invesco Mortgage Capital P/E Compared to CompetitorsThe P/E ratio is used by long-term shareholders to assess the company's market performance ...

ATLANTA, Jan. 21, 2026 /PRNewswire/ -- Invesco Mortgage Capital Inc. (NYSE: IVR) will announce its fourth quarter 2025 results Thursday, January 29, 2026, after market close. A conference call and audio webcast to review fourth quarter 2025 results will be held on Friday, January 30, 2026, at 9:00 a.m. ET. Scheduled to speak are John Anzalone, Chief Executive Officer; Brian Norris, Chief Investment Officer; Kevin Collins, President; David Lyle, Chief Operating Officer and Mark Gregson, Chief Financial Offi ...