[Press Release and CEO Update](index=1&type=section&id=Press%20Release) CEO John Anzalone discusses Q1 2025 economic performance, portfolio status, and market outlook [CEO Update](index=1&type=section&id=Update%20from%20John%20Anzalone%2C%20Chief%20Executive%20Officer) CEO John Anzalone discusses Q1 2025 economic performance, portfolio growth, and the impact of market volatility on book value - The **economic return** for **Q1 2025** was **2.6%**, comprising a **$0.34** **dividend per common share** and a **$0.11** decline in **book value per common share**[3](index=3&type=chunk) - The **debt-to-equity ratio** increased to **7.1x** as of March **31**, **2025**, up from **6.7x** at the end of the prior quarter[4](index=4&type=chunk) - The **investment portfolio** totaled **$5.9 billion**, primarily composed of **$5.0 billion** in **Agency RMBS** and **$0.9 billion** in **Agency CMBS**, with **$372 million** in **unrestricted cash and unencumbered investments**[4](index=4&type=chunk) - **Book value per common share** is estimated to have declined to a range of **$7.74** to **$8.06** as of April **30**, **2025**, due to increased interest rate volatility and deteriorating risk sentiment[5](index=5&type=chunk) [Financial and Operational Highlights](index=1&type=section&id=Financial%20and%20Operational%20Highlights) The company's Q1 2025 financial performance shows improved net income and EAD, alongside shifts in key balance sheet and interest rate metrics [Key Performance Indicators](index=1&type=section&id=Key%20performance%20indicators) Q1 2025 key performance indicators reflect improved net income and EAD, with changes in dividend, book value, and leverage Q1 2025 vs. Q4 2024 Key Metrics | Metric | Q1 2025 | Q4 2024 | | :--- | :--- | :--- | | Net income (loss) per common share | $0.26 | ($0.09) | | Earnings available for distribution per common share | $0.64 | $0.53 | | Common stock dividend per common share | $0.34 | $0.40 | | Book value per common share | $8.81 | $8.92 | | Economic return | 2.6% | (0.5)% | Detailed Financial Metrics Q1 2025 vs Q4 2024 | ($ in millions, except per share/ratio) | Q1 2025 | Q4 2024 | Variance | | :--- | :--- | :--- | :--- | | **U.S. GAAP Measures** | | | | | Net interest income | $18.8 | $13.7 | $5.1 | | Net income (loss) attributable to common stockholders | $16.3 | ($5.5) | $21.8 | | Average net interest rate margin | 0.99 % | 0.47 % | 0.52 % | | Book value per common share | $8.81 | $8.92 | ($0.11) | | Debt-to-equity ratio | 7.1 x | 6.7 x | 0.4 x | | **Non-GAAP Measures** | | | | | Earnings available for distribution | $40.0 | $32.3 | $7.7 | | Effective net interest income | $46.9 | $46.0 | $0.9 | | Effective interest rate margin | 3.27 % | 3.13 % | 0.14 % | [Portfolio and Hedging Details](index=3&type=section&id=Portfolio%20Composition) This section details the company's MBS portfolio composition, borrowing strategies, and various hedging instruments used to manage interest rate risk [MBS Portfolio](index=3&type=section&id=Portfolio%20Composition_sub) The MBS portfolio grew in Q1 2025, maintaining concentration in Agency securities with shifts towards higher coupon RMBS MBS Portfolio Composition ($ in thousands) | Category | Fair Value (Mar 31, 2025) | % of Portfolio | Fair Value (Dec 31, 2024) | % of Portfolio | | :--- | :--- | :--- | :--- | :--- | | Total 30 year fixed-rate pass through | $4,974,663 | 83.7% | $4,541,525 | 83.4% | | Agency-CMO | $73,539 | 1.2% | $70,776 | 1.3% | | Agency CMBS | $890,372 | 15.0% | $816,147 | 15.0% | | Non-Agency CMBS | — | —% | $9,836 | 0.2% | | Non-Agency RMBS | $7,215 | 0.1% | $7,224 | 0.1% | | **Total MBS portfolio** | **$5,945,789** | **100.0%** | **$5,445,508** | **100.0%** | [Borrowings](index=3&type=section&id=Borrowings) Total borrowings increased in Q1 2025, with a decreased weighted average interest rate and shorter maturity Borrowings Summary ($ in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Amount Outstanding | $5,354,561 | $4,893,958 | | Weighted Average Interest Rate | 4.47% | 4.80% | | Weighted Average Remaining Maturity (days) | 25 | 29 | [TBA Derivatives](index=3&type=section&id=TBA%20derivatives) The company's net TBA derivative contracts showed a reduced net carrying value liability in Q1 2025 with offsetting notional amounts Net TBA Derivatives Summary ($ in thousands) | Metric | As of March 31, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Net Notional Amount | $— | $— | | Net Implied Cost Basis | $219 | $606 | | Net Carrying Value - Liability | ($219) | ($606) | [Interest Rate Swaps](index=4&type=section&id=interest%20rate%20swaps) The company increased its use of interest rate swaps for hedging, extending maturity and locking in higher fixed pay rates Interest Rate Swaps Summary ($ in thousands) | Metric | As of March 31, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Total Notional Amount | $3,640,000 | $3,265,000 | | Weighted Average Fixed Pay Rate | 1.29% | 0.97% | | Weighted Average Floating Receive Rate | 4.41% | 4.49% | | Weighted Average Years to Maturity | 6.4 | 5.3 | [Futures Contracts](index=4&type=section&id=futures%20contracts) The company significantly reduced its short position in U.S. Treasury futures during Q1 2025, primarily in Ultra 10-year contracts U.S. Treasury Futures Notional Amount - Short ($ in thousands) | Futures Type | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 10 year U.S. Treasury | $400,000 | $136,000 | | Ultra 10 year U.S. Treasury | $315,000 | $1,057,000 | | 30 year U.S. Treasury | $187,500 | $209,000 | | **Total** | **$902,500** | **$1,402,000** | [Capital Activities](index=4&type=section&id=Capital%20Activities) The company's capital activities for Q1 2025 include common stock dividends, preferred stock dividends, and share issuances and repurchases [Dividends](index=4&type=section&id=Dividends) The company declared common stock and Series C Preferred Stock dividends for Q1 2025 - Declared a **common stock dividend** of **$0.34** per share for **Q1 2025**[22](index=22&type=chunk) - Declared a **Series C Preferred Stock** dividend of **$0.46875** per share, payable in June **2025**[22](index=22&type=chunk) [Stock Issuances and Repurchases](index=4&type=section&id=Issuances%20of%20Common%20Stock) The company issued common stock through its at-the-market program and repurchased Series C Preferred Stock in Q1 2025 - Sold **4,212,057** shares of common stock for **net proceeds** of **$36.0 million** through its at-the-market program[23](index=23&type=chunk) - Repurchased and retired **90,146** shares of **Series C Preferred Stock** for a **total cost** of **$2.2 million**[24](index=24&type=chunk) [Portfolio and Liquidity Update](index=5&type=section&id=Portfolio%20and%20Liquidity%20Update%20as%20of%20April%2030%2C%202025) This section provides an update on the company's investment portfolio and liquidity position as of April 30, 2025 [April 30, 2025 Update](index=5&type=section&id=Portfolio%20and%20Liquidity%20Update%20as%20of%20April%2030%2C%202025_sub) As of April 30, 2025, the company's investment portfolio decreased, with a lower estimated debt-to-equity ratio and maintained liquidity Portfolio and Liquidity Snapshot as of April 30, 2025 | Metric | Value | | :--- | :--- | | Total investment portfolio | $5.1 billion | | Portfolio Composition | 82% Agency RMBS, 18% Agency CMBS | | Unrestricted cash and unencumbered investments | ~$336 million | | Estimated debt-to-equity ratio | 6.4x | [Financial Statements](index=6&type=section&id=Financial%20Statements) This section presents the company's condensed consolidated financial statements, including statements of operations, comprehensive income, and balance sheets [Condensed Consolidated Statements of Operations](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Q1 2025 net income attributable to common stockholders showed a significant recovery from the prior quarter's loss Condensed Consolidated Statements of Operations ($ in thousands) | | Three Months Ended Mar 31, 2025 | Three Months Ended Dec 31, 2024 | | :--- | :--- | :--- | | Net interest income | 18,821 | 13,679 | | Total other income (loss) | 5,479 | (5,392) | | Total expenses | 4,659 | 4,781 | | Net income (loss) | 19,641 | 3,506 | | **Net income (loss) attributable to common stockholders** | **16,289** | **(5,472)** | | **Basic earnings (loss) per share** | **$0.26** | **($0.09)** | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME%20(LOSS)) Comprehensive income attributable to common stockholders for Q1 2025 was positive, reversing the prior quarter's loss Condensed Consolidated Statements of Comprehensive Income (Loss) ($ in thousands) | | Three Months Ended Mar 31, 2025 | Three Months Ended Dec 31, 2024 | | :--- | :--- | :--- | | Net income (loss) | 19,641 | 3,506 | | Total other comprehensive income (loss) | 616 | (188) | | **Comprehensive income (loss)** | **20,257** | **3,318** | | **Comprehensive income (loss) attributable to common stockholders** | **16,905** | **(5,660)** | [Condensed Consolidated Balance Sheets](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 31, 2025, total assets and liabilities increased, with a rise in stockholders' equity Condensed Consolidated Balance Sheets ($ in thousands) | | As of March 31, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | **ASSETS** | | | | Mortgage-backed securities, at fair value | 5,945,789 | 5,445,508 | | Cash and cash equivalents | 42,894 | 73,403 | | **Total assets** | **6,158,764** | **5,688,034** | | **LIABILITIES AND EQUITY** | | | | Repurchase agreements | 5,354,561 | 4,893,958 | | **Total liabilities** | **5,399,598** | **4,957,305** | | **Total stockholders' equity** | **759,166** | **730,729** | | **Total liabilities and stockholders' equity** | **6,158,764** | **5,688,034** | [Non-GAAP Financial Measures](index=9&type=section&id=Non-GAAP%20Financial%20Measures) The company presents non-GAAP measures such as Earnings Available for Distribution, effective interest metrics, and economic debt-to-equity ratio to provide additional insights into performance [Earnings Available for Distribution (EAD)](index=9&type=section&id=Earnings%20Available%20for%20Distribution) EAD, a non-GAAP measure, increased in Q1 2025, reflecting the portfolio's income-generating ability for dividends - **EAD** is calculated by adjusting **GAAP net income** for items such as **net gains/losses on investments and derivatives**, and **TBA dollar roll income**, to provide a consistent measure of operating performance[40](index=40&type=chunk)[41](index=41&type=chunk) Reconciliation of Net Income to EAD ($ in thousands) | | Three Months Ended Mar 31, 2025 | Three Months Ended Dec 31, 2024 | | :--- | :--- | :--- | | Net income (loss) attributable to common stockholders | 16,289 | (5,472) | | Adjustments (net) | 23,758 | 37,725 | | **Earnings available for distribution** | **40,047** | **32,253** | | **EAD per common share** | **$0.64** | **$0.53** | [Effective Interest Metrics](index=11&type=section&id=Effective%20Interest%20Expense%2FEffective%20Cost%20of%20Funds%2FEffective%20Net%20Interest%20Income%2FEffective%20Interest%20Rate%20Margin) Effective interest metrics in Q1 2025 demonstrate the positive impact of hedging on funding costs and interest spread - **Effective interest metrics** are calculated by adjusting **GAAP interest expense** and **net interest income** for the contractual **net interest** on **interest rate swaps**, which are recorded in gain/loss on derivatives under **GAAP**[48](index=48&type=chunk)[49](index=49&type=chunk) Reconciliation of GAAP to Effective Interest Metrics (Q1 2025) | Metric | GAAP | Adjustment for Swaps | Effective (Non-GAAP) | | :--- | :--- | :--- | :--- | | Net Interest Income ($M) | $18.8 | $28.1 | $46.9 | | Net Interest Rate Margin | 0.99% | 2.28% | 3.27% | | Total Interest Expense ($M) | $55.0 | ($28.1) | $26.9 | | Cost of Funds | 4.46% | (2.28)% | 2.18% | [Economic Debt-to-Equity Ratio](index=12&type=section&id=Economic%20Debt-to-Equity%20Ratio) The economic debt-to-equity ratio, including off-balance sheet financing, increased in Q1 2025 - The **economic debt-to-equity ratio** is a **non-GAAP measure** that adds the implied cost basis of **TBAs** to **total debt** to provide what management believes is a more complete view of at-risk leverage[55](index=55&type=chunk) Debt-to-Equity Ratio Calculation | Ratio | As of March 31, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Debt-to-equity ratio (GAAP) | 7.1x | 6.7x | | Economic debt-to-equity ratio (Non-GAAP) | 7.1x | 6.7x | [Other Information](index=5&type=section&id=Other%20Information) This section provides general company information, earnings call details, and average balance sheet metrics [Company and Earnings Call Information](index=5&type=section&id=About%20Invesco%20Mortgage%20Capital%20Inc.) Invesco Mortgage Capital Inc. is a REIT managed by Invesco Advisers, with Q1 2025 earnings call details provided - The company is a **REIT** externally managed by **Invesco Advisers, Inc.**, focusing on investing in **mortgage-backed securities** and other mortgage-related assets[25](index=25&type=chunk) - An earnings call was scheduled for **9:00 a.m. ET** on May **8**, **2025**, with access details provided for investors and the public[26](index=26&type=chunk) [Average Balances](index=13&type=section&id=Average%20Balances) Q1 2025 average earning assets and borrowings show shifts in yields and costs of funds compared to prior periods Average Balances and Yields/Costs | ($ in thousands) | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Average earning assets | 5,422,552 | 5,440,662 | 4,972,242 | | Average earning asset yields | 5.45 % | 5.60 % | 5.52 % | | Average borrowings | 4,930,237 | 4,865,582 | 4,419,757 | | Average cost of funds | 4.46 % | 5.13 % | 5.57 % |

Core Viewpoint - Invesco Mortgage Capital is experiencing significant stock depreciation and is expected to report a decline in earnings per share (EPS) while showing substantial revenue growth in the upcoming earnings disclosure [1][2]. Group 1: Stock Performance - Invesco Mortgage Capital closed at $6.35, reflecting a +0.32% change from the previous session, which is lower than the S&P 500's daily gain of 1.81% [1]. - The stock has depreciated by 25.44% over the past month, underperforming the Finance sector's loss of 4.82% and the S&P 500's loss of 6.14% [1]. Group 2: Earnings and Revenue Estimates - The anticipated EPS for the upcoming earnings report is $0.56, indicating a 34.88% decline compared to the same quarter last year [2]. - Revenue is expected to be $14.79 million, showing a 111.29% increase compared to the year-ago quarter [2]. - For the full year, projected earnings are $2.22 per share, reflecting a -22.92% change from the previous year, while revenue is expected to be $92.8 million, demonstrating a +151.99% change [3]. Group 3: Analyst Forecasts and Rankings - Recent revisions to analyst forecasts for Invesco Mortgage Capital are important as they reflect short-term business trends and analysts' confidence in the company's performance [4]. - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), currently rates Invesco Mortgage Capital at 4 (Sell), with a consensus EPS projection that has decreased by 11.04% in the past 30 days [6]. Group 4: Valuation Metrics - Invesco Mortgage Capital is trading at a Forward P/E ratio of 2.86, which is a discount compared to the industry average Forward P/E of 7.02 [7]. - The REIT and Equity Trust industry, part of the Finance sector, has a Zacks Industry Rank of 229, placing it in the bottom 8% of over 250 industries [7].

Invesco Mortgage Capital (IVR) closed the latest trading day at $8.17, indicating a +0.49% change from the previous session's end. This move outpaced the S&P 500's daily loss of 0.33%. Meanwhile, the Dow experienced a drop of 0.37%, and the technology-dominated Nasdaq saw a decrease of 0.53%.The real estate investment trust's shares have seen a decrease of 8.03% over the last month, not keeping up with the Finance sector's loss of 0.51% and the S&P 500's loss of 4.03%.The investment community will be closel ...

Company Performance - Invesco Mortgage Capital (IVR) closed at $8.74, reflecting a -0.46% change from the previous day, which is less than the S&P 500's daily loss of 0.22% [1] - The stock has decreased by 1.35% over the past month, contributing to the Finance sector's decline of 3.33% and the S&P 500's loss of 7.48% [1] Earnings Estimates - The upcoming earnings release is anticipated with a consensus estimate of revenue at $14.79 million, representing a 111.29% increase compared to the same quarter last year [2] - For the entire fiscal year, earnings are projected at $2.13 per share and revenue at $92.8 million, indicating changes of -26.04% and +151.99% respectively from the previous year [2] Analyst Sentiment - Recent changes to analyst estimates for Invesco Mortgage Capital suggest a shifting business landscape, with positive revisions indicating optimism regarding the company's profitability [3] - The Zacks Rank system, which reflects these estimate changes, provides a rating system that can help investors make informed decisions [4] Valuation Metrics - Invesco Mortgage Capital is currently trading at a Forward P/E ratio of 4.12, which is a discount compared to the industry average Forward P/E of 8.67 [6] - The REIT and Equity Trust industry, part of the Finance sector, has a Zacks Industry Rank of 210, placing it in the bottom 17% of over 250 industries [6]

Financial Data and Key Metrics Changes - Book value per common share decreased by 4.8% to $8.92, resulting in an economic return of negative 0.5% for the quarter when combined with a $0.40 dividend per share [11][12][33] - Earnings available for distribution declined from $0.68 in Q3 to $0.53 in Q4 due to a one-time charge associated with the redemption of Series B preferred stock [14] Business Line Data and Key Metrics Changes - Agency RMBS portfolio decreased by 11% quarter-over-quarter as lower coupon specified pools were sold to manage leverage and fund agency CMBS purchases [24] - Approximately 85% of the $5.4 billion investment portfolio was invested in agency mortgages, with 15% in agency CMBS [13] Market Data and Key Metrics Changes - Long-term treasury yields ended the quarter sharply higher, with the two-year breakeven rising from 1.77% in September to 2.54% by year-end [7][8] - Agency RMBS underperformed treasury during Q4, primarily in lower coupons due to a sharp rise in interest rates limiting demand for discount securities [9][10] Company Strategy and Development Direction - The company remains cautious on agency mortgages in the near term due to shifting expectations for monetary and fiscal policy, which may lead to elevated interest rate volatility [15] - Long-term outlook for agency mortgages is favorable, expecting improved demand in higher coupons as interest rate volatility declines [15] Management's Comments on Operating Environment and Future Outlook - Management noted that the economic environment remains uncertain, with expectations for only one to two additional cuts in the federal funds target rate through the end of 2025 [8][9] - The company believes it is well-positioned to navigate current mortgage market volatility due to moderate leverage and robust liquidity [33][34] Other Important Information - The company improved its capital structure by redeeming Series E preferred stock, funded primarily with lower-cost repurchase agreements [12][32] - The debt-to-equity ratio increased to 6.7 times at the end of Q4, up from 6.1 times at the end of Q3 [13] Q&A Session Summary Question: How does the company view the risk-reward trade-off of agency RMBS and agency CMBS? - The company added most agency CMBS exposure at the beginning of Q4, but as spreads tightened, it became less attractive compared to agency RMBS, which performed well in early Q1 [36][38][40] Question: What is the company's comfort level with the current dividend? - The board will review various factors, including projected ROEs and competitive dividend yields, before making a recommendation on the dividend [41][43][44] Question: Will there be any incremental changes to the hedge position going forward? - The company is comfortable with the current hedge mix but will continue to monitor swap spreads and may target 20-30% of treasury futures in the current environment [47][49][51] Question: Is the cautious outlook on agency mortgages rate-driven or related to GSE reform? - The market has not reacted to GSE reform headlines, and the company's cautiousness is primarily due to ongoing monetary and fiscal policy uncertainties [54][56][58]

Fourth Quarter 2024 Earnings Call Invesco Mortgage Capital Inc. February 21, 2025 John Anzalone Kevin Collins Mark Gregson David Lyle Brian Norris Chief Executive Officer President Chief Financial Officer Q4 2024 Results | Financial Results | | | Investment Allocation3 | | | | --- | --- | --- | --- | --- | --- | | | Q4 24 | Q3 24 | | | | | Net income (loss) per common share | $(0.09) | $0.63 | | | | | Earnings available for distribution per | $0.53 | $0.68 | Credit Portfolio | | Agency RMBS 83.4% | | common ...

Group 1: Earnings Performance - Invesco Mortgage Capital reported quarterly earnings of $0.53 per share, missing the Zacks Consensus Estimate of $0.66 per share, and down from $0.95 per share a year ago, representing an earnings surprise of -19.70% [1] - The company posted revenues of $13.68 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 7.64%, compared to year-ago revenues of $8.3 million [2] - Over the last four quarters, the company has surpassed consensus EPS estimates just once and has not been able to beat consensus revenue estimates [2] Group 2: Stock Performance and Outlook - Invesco Mortgage Capital shares have increased by approximately 10.6% since the beginning of the year, outperforming the S&P 500's gain of 4.5% [3] - The current consensus EPS estimate for the coming quarter is $0.57 on $14.79 million in revenues, and for the current fiscal year, it is $2.49 on $92.8 million in revenues [7] - The estimate revisions trend for Invesco Mortgage Capital is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Group 3: Industry Context - The REIT and Equity Trust industry, to which Invesco Mortgage Capital belongs, is currently in the bottom 45% of the Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact investor sentiment [5]

Investment Strategy and Portfolio Management - As of December 31, 2024, the company was primarily invested in Agency MBS, with a focus on providing attractive risk-adjusted returns to stockholders through dividends and capital appreciation[13]. - The company has a diversified investment portfolio that includes Agency RMBS, Agency CMBS, non-Agency CMBS, and non-Agency RMBS, with a strategy to manage interest rate risk through a hedge portfolio[27]. - The company emphasizes a disciplined investment approach, focusing on rigorous quantitative and qualitative analysis to maximize risk-adjusted returns[21]. - The company evaluates investment opportunities based on expected risk-adjusted returns relative to comparable investments and macroeconomic factors[26]. - The company has a strong focus on asset selection and relative value within the mortgage market, aiming to build a diversified portfolio[24]. - The investment committee periodically reviews the portfolio for risk characteristics, investment performance, and compliance with investment policies[23]. - The company employs an active portfolio management strategy, which may expose it to greater losses and lower returns compared to passive strategies[74]. Risk Management - Risk management strategies include monitoring interest rate risk and employing various hedging techniques to mitigate potential mismatches[48]. - The company regularly evaluates credit risk based on economic indicators such as GDP, unemployment, and housing trends[50]. - The company faces competition from various entities, including REITs and financial institutions, which may limit its ability to acquire desirable investments[55]. - The company may face adverse impacts from fluctuations in interest rates and competition for financing sources[61]. - Hedging strategies are employed to mitigate risks from interest rate changes, but they may not fully protect against adverse market conditions[118]. - The company may face margin calls or increased collateral requirements from lenders if the value of secured assets decreases, which could adversely affect its financial condition and liquidity[111]. Financial Performance and Leverage - The company employs leverage to achieve return objectives, adjusting leverage based on asset price volatility and liquidity[45]. - The use of significant leverage increases the risk of substantial losses, particularly in volatile market conditions[61]. - The company may incur losses due to defaults on mortgage loans underlying its investments, which could adversely impact its financial condition[96]. - The fair value of the company's mortgage-backed securities may fluctuate due to market conditions, impacting stockholders' equity[103]. - Changes in the fair value of derivatives may lead to volatility in U.S. GAAP earnings, potentially exceeding consolidated net income in any period[150]. Regulatory Compliance and REIT Status - The company has adopted investment guidelines to ensure compliance with REIT qualifications and to avoid regulation as an investment company under the 1940 Act[15][22]. - To maintain REIT status, the company must distribute at least 90% of its net taxable income to stockholders, which could necessitate borrowing during unfavorable market conditions[180]. - The company must ensure that at least 75% of its assets consist of qualified real estate assets to maintain REIT status, which may require asset liquidation[182]. - The company is subject to a 4% nondeductible excise tax on any amount by which dividends paid are less than specified thresholds[180]. - Compliance with REIT requirements may limit the company's ability to pursue attractive investment opportunities, potentially reducing overall returns[181]. Management and Operational Risks - The company is externally managed by Invesco Advisers, Inc., which provides management expertise and analytical tools to enhance investment performance[14][19]. - The company is entirely reliant on its Manager and key personnel for success, with no separate facilities or employees[152]. - Conflicts of interest exist between the company and its Manager, potentially affecting investment decisions[153]. - The management agreement was not negotiated on an arm's-length basis, potentially resulting in less favorable terms for the company[157]. - Termination of the management agreement without cause is costly and difficult, which may hinder management changes[158]. Market Conditions and Economic Factors - Fluctuations in interest rates could adversely affect the value of investments and increase interest expenses, potentially reducing earnings and cash available for distribution to stockholders[66]. - Elevated interest rates may reduce the availability of target assets, adversely affecting the company's ability to acquire assets that meet investment objectives and generate income[71]. - The U.S. Federal Reserve's actions in the Agency RMBS market could materially impact the supply, price, and returns on Agency RMBS investments[75]. - Economic conditions such as inflation and interest rate volatility could negatively impact the value of investments and collateral, affecting liquidity[131]. Taxation and Dividend Policies - The company has not established a minimum dividend payment level, which may affect future dividend payments[161]. - The company’s ability to pay dividends is subject to various factors, including earnings and financial condition[161]. - Future tax law changes could adversely affect the company's business and financial performance, including potential increases in income tax rates[178]. - Non-U.S. stockholders may be subject to U.S. federal income tax on certain distributions, particularly those related to gains from U.S. real property interests[186]. - The company may incur U.S. federal income taxes on net income from the sale of properties classified as "dealer" properties, which would be subject to a 100% tax[189].

Financial Performance - Net loss per common share was $0.09 compared to net income of $0.63 in Q3 2024, while earnings available for distribution per common share declined to $0.53 from $0.68[7][9] - Economic return for Q4 2024 was (0.5)%, a significant drop from 5.4% in Q3 2024[6][7] - The company reported a net loss attributable to common stockholders of $5,472,000 for the three months ended December 31, 2024, compared to a net income of $22,280,000 in the same period of 2023[28] - The company reported a comprehensive income of $3,318,000 for the three months ended December 31, 2024, compared to $27,014,000 in the same period of 2023[31] - Earnings available for distribution for the three months ended December 31, 2024, was $32,253,000, a decrease from $45,841,000 in the same period of 2023, representing a decline of approximately 29.7%[42] - The basic income (loss) per common share for the three months ended December 31, 2024, was $(0.09), compared to $0.46 for the same period in 2023[42] Interest Income and Expenses - Total interest income rose to $76.1 million, while total interest expense decreased to $62.4 million, resulting in net interest income of $13.7 million[9] - Interest income for the three months ended December 31, 2024, was $76,110,000, an increase from $62,082,000 in the same period of 2023[28] - Net interest income for the year ended December 31, 2024, was $36,827,000, down from $49,700,000 in 2023[28] - Total interest expense for the three months ended December 31, 2024, was $62,431,000, compared to $54,680,000 for the same period in 2023, reflecting an increase of approximately 14.5%[46] - The effective net interest income for the three months ended December 31, 2024, was $46,000,000, down from $56,383,000 in the same period of 2023, indicating a decrease of about 18.4%[48] - The average cost of funds decreased to 5.13% from 5.30% in Q3 2024, while the average net interest rate margin improved to 0.47%[9] Asset and Equity Management - The total assets as of December 31, 2024, were $5,688,034,000, an increase from $5,284,209,000 as of December 31, 2023[33] - The company reported a decrease in total stockholders' equity from $857,003 thousand as of September 30, 2024, to $730,729 thousand as of December 31, 2024[57] - Book value per common share decreased by 4.8% to $8.92, with an estimated range of $8.90 to $9.26 as of February 14, 2025[3][7] Debt Management - The debt-to-equity ratio increased to 6.7x at the end of Q4 2024, up from 6.1x at the end of Q3 2024[3][9] - The company's debt-to-equity ratio as of December 31, 2024, was 6.7, compared to 6.1 as of September 30, 2024[57] - The economic debt-to-equity ratio as of December 31, 2024, was also 6.7, reflecting the inclusion of TBAs at implied cost basis of $606,000 thousand[58] Investment Portfolio - Approximately 85% of the $5.4 billion investment portfolio was allocated to Agency RMBS, with 15% in Agency CMBS[3] - The portfolio composition as of December 31, 2024, included 83.4% in Agency RMBS with an average yield of 5.50%[12] - The company expects a gradual increase in Agency CMBS new issuance to meet robust investor demand due to attractive risk-adjusted return profiles[4] Stockholder Actions - The company declared a common stock dividend of $0.40 per share, payable on January 24, 2025[18] - During the fourth quarter, the company sold 993,837 shares of common stock for net proceeds of $8.3 million[19] - The company redeemed all outstanding shares of Series B Preferred Stock for a cash redemption price of $25.00 per share on December 27, 2024[20] - The company repurchased and retired 70,864 shares of Series C Preferred Stock for a total cost of $1.7 million during the three months ended December 31, 2024[21] Derivative Instruments - The Company reported a realized loss on derivative instruments of $157,864,000 for the three months ended December 31, 2024, compared to a realized loss of $199,137,000 for the same period in 2023[43]

Group 1 - Invesco Mortgage Capital (IVR) closed at $8.09, with no change from the previous day, underperforming compared to the S&P 500's gain of 0.53% [1] - The stock has decreased by 2.76% over the past month, while the Finance sector gained 3.86% and the S&P 500 increased by 2.69% [1] Group 2 - Invesco Mortgage Capital is expected to report earnings of $0.66 per share, reflecting a year-over-year decline of 30.53%, with projected net sales of $14.81 million, an increase of 78.43% from the previous year [2] - Recent changes to analyst estimates for Invesco Mortgage Capital are important as they indicate short-term business trends and analyst sentiment [3] Group 3 - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), has shown that 1 stocks have returned an average annual gain of +25% since 1988, with Invesco Mortgage Capital currently holding a Zacks Rank of 3 (Hold) [5] - There has been no change in the Zacks Consensus EPS estimate for Invesco Mortgage Capital over the past month [5] Group 4 - Invesco Mortgage Capital is trading at a Forward P/E ratio of 3.25, significantly lower than the industry average of 7.87, indicating a discount compared to its peers [6] - The REIT and Equity Trust industry, part of the Finance sector, has a Zacks Industry Rank of 89, placing it in the top 36% of over 250 industries [6] Group 5 - The Zacks Industry Rank is based on the average Zacks Rank of individual stocks within the industry, with top-rated industries outperforming the bottom half by a factor of 2 to 1 [7]