Invesco Mortgage Capital Earnings Call Transcripts
Fiscal Year 2026
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Economic return of 3.8% was achieved in Q2 2026, with a modest book value decline and strong portfolio growth fueled by $118 million in new capital. Agency RMBS and CMBS outperformed, supported by favorable market dynamics and robust hedging.
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Book value declined 7.9% in Q1 2026, but improved 2% post-quarter. Portfolio grew to $7.3B, with increased focus on Agency RMBS and TBA. Leadership transition and capital structure changes position the company for future growth.
Fiscal Year 2025
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Book value per share rose 3.7% to $8.72 in Q4 2025, with an 8% economic return and increased leverage to 7x. Agency mortgages outperformed, supported by Fed rate cuts, GSE purchases, and lower volatility, while capital structure and liquidity improved.
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Book value per share rose 4.5% to $8.41, with an 8.7% economic return for Q3 2025. Leverage increased to 6.7%, and the agency RMBS portfolio grew 13%. The outlook remains favorable due to lower volatility, a steeper yield curve, and supportive regulatory changes.
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Q2 saw early volatility from tariff news, but risk assets rebounded as conditions stabilized. Economic return was -4.8%, with a lower debt-to-equity ratio and a cautious near-term outlook, but long-term prospects for agency mortgages and CMBS remain positive.
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Tightening financial conditions and policy uncertainty led to increased volatility and a decline in book value, but a positive economic return of 2.6% was achieved in Q1. The portfolio shifted toward higher coupon agency RMBS, reduced leverage, and remains well-positioned for long-term recovery as market conditions stabilize.
Fiscal Year 2024
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Book value per share fell 4.8% in Q4, with a -0.5% economic return, as Agency RMBS underperformed Treasuries amid higher rates and volatility. Capital structure improved via Series B Preferred Stock redemption, and the outlook for Agency mortgages remains favorable as volatility moderates.
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Book value per share rose 1.1% to $9.37 in Q3, with a 5.4% economic return, but post-quarter volatility led to a 5.8% estimated book value decline. Portfolio shifts included increased agency CMBS exposure and a focus on higher coupon RMBS, while leverage and liquidity remained strong.
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Second quarter saw an 8% book value decline and negative 4.1% economic return, but EAD per share remained above the dividend. Portfolio focus is on agency RMBS and CMBS, with robust liquidity and a positive outlook as interest rate volatility is expected to decline.