Financial Data and Key Metrics Changes - ARMOUR reported a total economic return of 10.63% for Q4 2025, benefiting from MBS spreads tightening and a lower interest rate environment [4] - GAAP net income available to common stockholders was $208.7 million, or $1.86 per share, with net interest income at $50.4 million [4] - Distributable earnings available to common stockholders was $79.8 million, or $0.71 per common share [4] - Quarter-end book value increased to $18.63 per common share, up 6.5% from September 30 [5] Business Line Data and Key Metrics Changes - ARMOUR's mortgage assets now total over $20 billion, with a portfolio growth of more than 10% from the end of Q3 2025 [9] - The portfolio remains nearly 100% agency MBS, agency CMBS, or US Treasuries, with over $3 billion of MBS pools added in Q4 and early Q1 [12] Market Data and Key Metrics Changes - The market is experiencing declining rate volatility and easing funding costs, supported by the Fed's efforts to lower rates [10] - Aggregate portfolio prepayments averaged 11.1 CPR through Q4 2025 and Q1 2026 to date, compared to 8.1 CPR in Q3 2025 [15] Company Strategy and Development Direction - ARMOUR views agency MBS as a high conviction opportunity, with a strategy focused on stress testing liquidity and systematic hedging [9][20] - The company aims to maintain an attractive and stable dividend, with a medium-term outlook [7][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the current market conditions, anticipating continued favorable returns from MBS [10][20] - The administration's focus on lowering mortgage spreads is expected to support a stable mortgage market, with GSEs playing a crucial role [10] Other Important Information - ARMOUR raised approximately $3.8 million of capital by issuing preferred stock and has raised about $138 million under its common-at-the-market program [6][5] - The company has launched a new investor presentation to provide additional insights into its portfolio transformation [20] Q&A Session Summary Question: Outlook for portfolio and interest-bearing assets growth in 2026 - Management indicated that growth depends on market behavior and capital raising opportunities [24] Question: Incremental returns on new investments - Current levered yield on 30-year 5s is around 15%, with potential for further spread tightening [29] Question: Likelihood of government actions to lower mortgage rates - Management noted that while some actions have been taken, further measures may introduce complexities [34] Question: Current liquidity position - Liquidity is approximately 54% of total equity, reflecting moderate leverage and steady conditions [37] Question: Risk of faster prepayments with lower mortgage rates - Management acknowledged increased prepayment risk but stated that the portfolio is structured to mitigate this risk [39]

Financial Data and Key Metrics Changes - ARMOUR reported a total economic return of 10.63% for Q4 2025, benefiting from MBS spreads tightening and a lower interest rate environment [4] - GAAP net income available to common stockholders was $208.7 million, or $1.86 per share, while net interest income was $50.4 million [4] - Distributable earnings available to common stockholders were $79.8 million, or $0.71 per common share [4] - Quarter-end book value increased to $18.63 per common share, up 6.5% from September 30 [5] Business Line Data and Key Metrics Changes - ARMOUR's mortgage assets now total over $20 billion, with a portfolio growth of more than 10% from the end of Q3 2025 [9] - The portfolio remains nearly 100% agency MBS, agency CMBS, or DOS, with a net balance sheet duration of 0.14 years [12] - The company added over $3 billion of MBS pools and DOS across Q4 and early Q1 [12] Market Data and Key Metrics Changes - The market's appeal remains anchored in declining rate volatility and easing funding costs, supported by the Fed's efforts to lower rates [10] - Aggregate portfolio prepayments averaged 11.1 CPR through Q4 2025 and Q1 2026 to date, compared to 8.1 CPR in Q3 2025 [15] - The 30-year mortgage rate has remained in a tight 6%-6.3% band, recently shifting toward the low end of that range [15] Company Strategy and Development Direction - ARMOUR views agency MBS as a high conviction opportunity, with a focus on maintaining moderate leverage and a strong capital liquidity position [9] - The company aims to pay an attractive and stable dividend, with a medium-term outlook [20] - ARMOUR's strategy includes stress testing liquidity, applying systematic hedging, and deploying capital when opportunities arise [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the positioning and strategy for 2026, anticipating continued favorable conditions for MBS [20] - The administration's focus on lowering mortgage spreads is expected to support a stable mortgage market [10] - Management noted that further declines in mortgage rates will require lower long-end Treasury yields, which have not declined in sync with front-end rate cuts [16] Other Important Information - ARMOUR raised approximately $3.8 million of capital by issuing preferred stock and $138 million under its common-at-the-market program [6][7] - The company has launched a new investor presentation to provide additional insights into the portfolio's transformation over time [20] Q&A Session Summary Question: Outlook for portfolio and interest-bearing assets growth in 2026 - Management indicated that growth depends on market behavior and capital raising opportunities [24] Question: Incremental returns on new investments given spread tightening - Current levered yield on thirty of fives is around 15%, with potential for additional returns from spread tightening and curve steepening [29] Question: Likelihood of further government actions to lower mortgage rates - Management noted that while some actions have been taken, further steps may introduce complexities that could counteract stability in mortgage spreads [34] Question: Current liquidity position and near-term outlook - Management confirmed liquidity is about 54% of total equity, reflecting moderate leverage and steady liquidity [37] Question: Risk of faster prepayments as mortgage rates lower - Management acknowledged increased prepayment risk but stated the portfolio is structured to mitigate this risk [39]

Financial Data and Key Metrics Changes - ARMOUR reported a total economic return of 10.63% for Q4 2025, benefiting from MBS spreads tightening and a lower interest rate environment [4] - GAAP net income available to common stockholders was $208.7 million, or $1.86 per share, with net interest income at $50.4 million [4] - Distributable earnings available to common stockholders were $79.8 million, or $0.71 per common share [4] - Quarter-end book value increased to $18.63 per common share, up 6.5% from September 30 [5] Business Line Data and Key Metrics Changes - ARMOUR's mortgage assets exceeded $20 billion, with a portfolio growth of over 10% from the end of Q3 2025 [8] - The portfolio remains nearly 100% agency MBS, agency CMBS, or US Treasuries, with a net balance sheet duration of 0.14 years [11] - Aggregate portfolio prepayments averaged 11.1 CPR through Q4 2025 and Q1 2026 to date, compared to 8.1 CPR in Q3 2025 [13] Market Data and Key Metrics Changes - The market's appeal remains anchored in declining rate volatility and easing funding costs, supported by the Fed's efforts to lower rates [9] - The 30-year mortgage rate has remained in a tight 6%-6.3% band, with recent shifts toward the low end of that range [13] - Repo conditions have improved materially, with repo rates averaging roughly SOFR plus 15 basis points [16] Company Strategy and Development Direction - ARMOUR views agency MBS as a high conviction opportunity, expecting continued favorable conditions in 2026 [8] - The company aims to maintain a consistent and predictable return profile for its assets, focusing on stress testing liquidity and systematic hedging [19] - The administration's focus on lowering mortgage spreads is expected to support a stable mortgage market, with GSEs playing a crucial role [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the positioning and strategy for 2026, highlighting the importance of capital raising and investment opportunities [23] - The company anticipates that further declines in mortgage rates will require lower long-end Treasury yields, which have not declined in sync with front-end rate cuts [14] - Management noted that the risk of faster prepayments has increased, but the portfolio has been structured to mitigate this risk [37] Other Important Information - ARMOUR raised approximately $3.8 million of capital by issuing preferred stock and around $138 million through its common-at-the-market program [5][6] - The company has declared cash dividends of $0.24 per outstanding common share for January and February 2026 [6] Q&A Session Summary Question: Outlook for portfolio and interest-bearing assets growth in 2026 - Management indicated that growth depends on market behavior and capital raising opportunities, with no definitive outlook provided [23] Question: Incremental returns on new investments given spread tightening - Current levered yield on thirty of fives is around 15%, with potential for additional returns from further spread tightening and curve steepening [28][29] Question: Likelihood of government actions to lower mortgage rates - Management noted that while some actions have been taken, further steps may introduce complexities that could counteract the goal of stable mortgage spreads [33] Question: Current liquidity position and near-term outlook - Management confirmed liquidity at about 54% of total equity, reflecting moderate leverage and steady liquidity [36] Question: Risk of faster prepayments with lower mortgage rates - Management acknowledged the increased risk of faster prepayments but emphasized that the portfolio is structured to handle this risk [37]

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] - Agency CMBS risk premiums remained largely unchanged, with no new purchases made during the quarter [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] - The TBA dollar roll market showed notable improvement, indicating strong demand for Agency mortgage collateral amid limited net supply [16] 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 focusing on specified pools with lower loan balances to enhance predictability of future 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 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 [26] - The conclusion of quantitative tightening and the announcement of T-bill purchases by the Fed are seen as tailwinds for the company's strategy [25] - Management expressed confidence in the liquidity position, providing a cushion for potential market stress [26] Other Important Information - The Federal Reserve ended its quantitative tightening program, which had reduced its Treasury and Agency mortgage holdings by over $2.2 trillion since mid-2022 [5] - The company modestly increased leverage to 7 times, consistent with the constructive investment environment [7] Q&A Session Summary Question: Can you talk about your approach to leverage level post the tightening and where you are finding value within the coupon stack? - The company increased leverage slightly in the fourth quarter due to a positive environment, and is comfortable with current levels despite tighter spreads [30] - Good value is being found primarily in the 3.5% to 5.5% coupon range [31] Question: Have you seen any surprises within prepay reports in the specified pool portfolio? - No significant surprises were noted; prepayment speeds increased in higher coupons but were less impacted due to prepayment protection [33] Question: Have you continued rotating down in coupon with new capital invested? - The company is focusing on lower coupons for future purchases, particularly in the belly of the coupon stack [36] Question: Can you talk about your capital structure and ability to raise capital going forward? - The company feels it is in a better place regarding capital structure and selectively accesses the ATM when beneficial to shareholders [42] Question: How should we think about book value sensitivity and overall upside to further spread tightening? - The magnitude of change in book value to spread changes remains the same, but expectations for further spread tightening are reduced [56]

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]

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 ...

Core Viewpoint - Invesco Mortgage Capital Inc. reported improved financial results for Q4 2025, driven by favorable economic conditions, including interest rate cuts and strong corporate earnings, leading to an 8.0% economic return for the quarter [2][9]. Financial Performance - Book value per common share increased by 3.7% to $8.72 at the end of Q4 2025, compared to $8.41 at the end of Q3 2025 [2][9]. - Net income per common share was $0.68, down from $0.74 in Q3 2025 [9]. - Earnings available for distribution per common share decreased to $0.56 from $0.58 in Q3 2025 [9]. Investment Portfolio - The investment portfolio totaled $6.3 billion, comprising $5.4 billion in Agency RMBS and $0.9 billion in Agency CMBS [3]. - The average earning assets increased to $5,868.9 million from $5,382.2 million in Q3 2025 [8]. - The debt-to-equity ratio rose to 7.0x from 6.7x, reflecting a more favorable investment environment [3]. Economic Environment - The company remains optimistic about Agency RMBS due to reduced interest rate volatility and increased investor demand, with Fannie Mae and Freddie Mac planning to purchase $200 billion in Agency RMBS [4]. - Agency CMBS is noted for its attractive risk-adjusted yields and stable cash flow profile [4]. Capital Activities - A common stock dividend of $0.36 per share was declared, with a shift from quarterly to monthly dividend payments starting at $0.12 per share [20]. - The company issued 849,987 shares of common stock for net cash proceeds of $7.2 million during the quarter [21]. - The company repurchased 76,356 shares of Series C Preferred Stock with a carrying value of $1.8 million [22].

Financial Data and Key Metrics Changes - The company's book value per share increased by 5% from $19.25 in the prior quarter to $20.21 as of December 31, 2025 [23] - Economic return for Q4 was 8.6%, bringing the full-year economic return to 20.2% [23][24] - Earnings Available for Distribution (EAD) per share rose by $0.01 to $0.74, exceeding the dividend for the quarter [24] - Economic leverage ratio decreased to 5.6x, down from the previous quarter [25] Business Line Data and Key Metrics Changes - Agency portfolio ended 2025 at $93 billion, increasing by nearly $6 billion quarter-over-quarter and $22 billion year-over-year [9] - Residential credit portfolio reached $8 billion, up $1.1 billion quarter-over-quarter [13] - Mortgage Servicing Rights (MSR) portfolio increased to $3.8 billion, a $280 million increase quarter-over-quarter [17] Market Data and Key Metrics Changes - Fixed income markets showed strong performance, with the U.S. aggregate bond index registering the highest total return since 2020 [7] - The yield curve steepened as short-term yields fell while long-term yields rose modestly [7] - Swap spreads widened due to a shift from Quantitative Tightening to balance sheet expansion by the Fed [8] Company Strategy and Development Direction - The company aims to increase capital allocation to residential credit and MSR while maintaining agency as the anchor of the portfolio [21][77] - The non-QM market is expected to grow, providing competitive advantages in loan selection and execution [20] - The company plans to remain patient and opportunistic in capital allocation, focusing on diversified housing finance strategies [22] Management's Comments on Operating Environment and Future Outlook - The macroeconomic environment remains solid, with the labor market showing signs of softness but limited layoffs [5][6] - Management expressed confidence in the durability of the swaps market as a hedge and the overall strength of the diversified housing finance model [32][21] - Risks include global fiscal issues and potential complacency in asset markets, which could lead to increased volatility [60][61] Other Important Information - The company raised $560 million of common equity in Q4, totaling $2.9 billion for the year [9] - The efficiency ratio improved to 1.31% for Q4, with a full-year ratio of 1.42% [27] Q&A Session Summary Question: Update on mark-to-market book values - The book value was up 4%, inclusive of dividend accrual, with a slight increase noted after the call [30] Question: Portfolio returns and comfort level with dividends - The company expects mid-teens returns and feels confident about the dividend's safety for 2026 [31][32] Question: MSR portfolio insulation from lower interest rates - The company is set up to be active in the current coupon MSR market and expects origination to pick up [36][40] Question: Impact of G-fee cuts on prepayment environment - A G-fee cut on purchase loans is seen as appropriate, but broad cuts could damage the MBS market [46] Question: Attractiveness of raising capital in different spread environments - Wider spreads are more attractive for raising capital, but current stability provides confidence [51][52] Question: Risks that could change the low-risk environment - Global fiscal issues and asset market euphoria are noted as significant risks [60][61] Question: Opportunities in low-coupon MBS - The valuation on low-coupon MBS is tight, and better ways to manage risk are available [67] Question: Likelihood of GSE portfolio caps being increased - Uncertainty remains regarding the increase of portfolio caps, with no clear answer available [82]

Fourth Quarter and Full Year 2025 Earnings Presentation January 26, 2025 1 Safe Harbor Statement NOTE: This presentation contains certain statements that are not historical facts and that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Statements in this presentation addressing expectations, assumptions, beliefs, projections, estimates, future plans, strategies, and events, developments that we expect or anticipate will occur in the future, ...