Invesco Mortgage Capital Inc. Reports Second Quarter 2025 Financial Results
ATLANTA, July 24, 2025 /PRNewswire/ -- Invesco Mortgage Capital Inc. (NYSE:IVR) (the "Company") today announced financial results for the quarter ended June 30, 2025.
Net loss per common share of $0.40 compared to net income of $0.26 in Q1 2025
Earnings available for distribution per common share(1) of $0.58 compared to $0.64 in Q1 2025
Common stock dividend of $0.34 per common share, unchanged from Q1 2025
Book value per common share(2) of $8.05 compared to $8.81 as of March 31, 2025
Economic return(3) of (4.8)% compared to 2.6% in Q1 2025
Update from John Anzalone, Chief Executive Officer
"Financial markets began the second quarter under pressure, driven by a sharply negative reaction to the tariff announcements on April 2nd, which triggered a spike in interest rate volatility and a selloff in risk assets. Following the announcement of the 90-day pause in tariff implementation on April 9th, markets began to recover as trade policy tail risks diminished and interest rate volatility trended lower. Agency RMBS performance followed a similar trajectory to other risk assets, underperforming significantly in early April before rebounding as the quarter progressed. However, valuations on our interest rate swap hedges were negatively impacted as trade policy-related volatility combined with fiscal policy concerns to drive swap spreads notably tighter. These factors resulted in an economic return for the quarter of (4.8)%, consisting of our $0.34 dividend per common share and a $0.76 decline in book value per common share.
"We ended the second quarter with a debt-to-equity ratio of 6.5x, down from 7.1x as of March 31, 2025, reflecting our belief that elevated near term uncertainty regarding trade, fiscal and monetary policy warrants a modestly more defensive posture. At quarter end, our $5.2 billion investment portfolio consisted of $4.3 billion Agency RMBS and $0.9 billion Agency CMBS, and we maintained a sizeable balance of unrestricted cash and unencumbered investments totaling $362 million.
"As of July 18, 2025, we estimate book value per common share to be between $7.99 and $8.31(4), as Agency RMBS performed well at the beginning of the third quarter. Although our near-term outlook for Agency RMBS remains cautious, our longer-term outlook for the sector is favorable, as we expect investor demand to strengthen in higher coupons given attractive valuations and a steeper yield curve. In addition, we remain positive on Agency CMBS as limited issuance, strong fundamental performance and stable cash flow profiles should provide favorable support for this sector."
(1) Earnings available for distribution (and by calculation, earnings available for distribution per common share) is a non-Generally Accepted Accounting Principles ("GAAP") financial measure. Refer to the section entitled "Non-GAAP Financial Measures" for important disclosures and a reconciliation to the most comparable U.S. GAAP measure.
(2) Book value per common share as of June 30, 2025 and March 31, 2025 is calculated as total stockholders' equity less the liquidation preference of the Company's Series C Preferred Stock ($175.5 million as of June 30, 2025 and $177.9 million as of March 31, 2025), divided by total common shares outstanding.
(3) Economic return for the quarter ended June 30, 2025 is defined as the change in book value per common share from March 31, 2025 to June 30, 2025 of ($0.76); plus dividends declared of $0.34 per common share; divided by the March 31, 2025 book value per common share of $8.81. Economic return for the quarter ended March 31, 2025 is defined as the change in book value per common share from December 31, 2024 to March 31, 2025 of ($0.11); plus dividends declared of $0.34 per common share; divided by the December 31, 2024 book value per common share of $8.92.
(4) Book value per common share as of July 18, 2025 is adjusted to exclude a pro rata portion of the current quarter's common stock dividend (which for purposes of this calculation is assumed to be the same as the previous quarter) and is calculated as total stockholders' equity less the liquidation preference of the Company's Series C Preferred Stock ($175.1 million as of July 18, 2025), divided by total common shares outstanding of 66.3 million.
Key performance indicators for the quarters ended June 30, 2025 and March 31, 2025 are summarized in the table below.
($ in millions, except share amounts)
Q2 2025
Q1 2025
Variance
Average Balances (1)
(unaudited)
(unaudited)
Average earning assets (at amortized cost)
$5,078.9
$5,422.6
($343.7)
Average borrowings
$4,577.6
$4,930.2
($352.6)
Average total stockholders' equity
$709.9
$754.7
($44.8)
U.S. GAAP Financial Measures
Total interest income
$70.6
$73.8
($3.2)
Total interest expense
$52.9
$55.0
($2.1)
Net interest income
$17.7
$18.8
($1.1)
Total expenses
$4.9
$4.7
$0.2
Net income (loss) attributable to common stockholders
($26.6)
$16.3
($42.9)
Average earning asset yields
5.56 %
5.45 %
0.11 %
Average cost of funds
4.62 %
4.46 %
0.16 %
Average net interest rate margin
0.94 %
0.99 %
(0.05) %
Period-end weighted average asset yields (2)
5.46 %
5.51 %
(0.05) %
Period-end weighted average cost of funds
4.48 %
4.47 %
0.01 %
Period-end weighted average net interest rate margin
0.98 %
1.04 %
(0.06) %
Book value per common share (3)
$8.05
$8.81
($0.76)
Earnings (loss) per common share (basic)
($0.40)
$0.26
($0.66)
Earnings (loss) per common share (diluted)
($0.40)
$0.26
($0.66)
Debt-to-equity ratio
6.5x
7.1x
(0.6x)
Non-GAAP Financial Measures (4)
Earnings available for distribution
$38.2
$40.0
($1.8)
Effective interest expense
$24.3
$26.9
($2.6)
Effective net interest income
$46.4
$46.9
($0.5)
Effective cost of funds
2.12 %
2.18 %
(0.06) %
Effective interest rate margin
3.44 %
3.27 %
0.17 %
Earnings available for distribution per common share
$0.58
$0.64
($0.06)
Economic debt-to-equity ratio
6.5x
7.1x
(0.6x)
(1) Average earning assets, average borrowings and average total stockholders' equity are calculated based on the weighted month-end balances of mortgage-backed securities at amortized cost, repurchase agreement borrowings and total U.S. GAAP stockholders' equity, respectively.
(2) Period-end weighted average asset yields are based on amortized cost as of period-end and incorporate future prepayment and loss assumptions when appropriate.
(3) Book value per common share is calculated as total stockholders' equity less the liquidation preference of the Company's Series C Preferred Stock ($175.5 million as of June 30, 2025 and $177.9 million as of March 31, 2025), divided by total common shares outstanding.
(4) Earnings available for distribution (and by calculation, earnings available for distribution per common share), effective interest expense (and by calculation, effective cost of funds), effective net interest income (and by calculation, effective interest rate margin), and economic debt-to-equity ratio are non-GAAP financial measures. Refer to the section entitled "Non-GAAP Financial Measures" for important disclosures and a reconciliation to the most comparable U.S. GAAP measures of net income (loss) attributable to common stockholders (and by calculation, basic earnings (loss) per common share), total interest expense (and by calculation, cost of funds), net interest income (and by calculation, net interest rate margin) and debt-to-equity ratio.
Portfolio Composition
The following table summarizes certain characteristics of the Company's MBS portfolio as of June 30, 2025 and March 31, 2025.
As of
June 30, 2025
March 31, 2025
$ in thousands
Fair Value
Percentage ofPortfolio
Period-endWeightedAverageYield
Fair Value
Percentage ofPortfolio
Period-endWeightedAverageYield
Agency RMBS:
30 year fixed-rate pass-through coupon:
4.5 %
640,423
12.3 %
4.95 %
657,554
11.1 %
4.95 %
5.0 %
967,373
18.6 %
5.32 %
993,414
16.7 %
5.32 %
5.5 %
1,035,347
20.0 %
5.58 %
1,414,961
23.8 %
5.58 %
6.0 %
1,259,271
24.3 %
5.95 %
1,471,826
24.8 %
5.97 %
6.5 %
319,789
6.2 %
6.16 %
436,908
7.3 %
6.16 %
Total 30 year fixed-rate pass-through
4,222,203
81.4 %
5.58 %
4,974,663
83.7 %
5.61 %
Agency-CMO
71,835
1.4 %
9.75 %
73,539
1.2 %
10.02 %
Agency CMBS
891,521
17.2 %
4.62 %
890,372
15.0 %
4.62 %
Non-Agency RMBS
—
— %
— %
7,215
0.1 %
11.53 %
Total MBS portfolio
5,185,559
100.0 %
5.46 %
5,945,789
100.0 %
5.51 %
The following table summarizes certain characteristics of the Company's borrowings as of June 30, 2025 and March 31, 2025.
As of
$ in thousands
June 30, 2025
March 31, 2025
AmountOutstanding
WeightedAverageInterest Rate
WeightedAverage
RemainingMaturity (days)
AmountOutstanding
WeightedAverageInterest Rate
WeightedAverageRemainingMaturity (days)
Repurchase agreements - Agency RMBS
3,798,981
4.48 %
24
4,512,054
4.48 %
24
Repurchase agreements - Agency CMBS
836,900
4.48 %
26
842,507
4.46 %
30
Total borrowings
4,635,881
4.48 %
24
5,354,561
4.47 %
25
The following table summarizes certain characteristics of TBAs accounted for as derivatives as of March 31, 2025. We did not have any TBAs outstanding as of June 30, 2025.
$ in thousands
As of March 31, 2025
Notional Amount
Implied Cost Basis
Implied MarketValue
Net Carrying Value - Asset (Liability)
6.5% TBA purchase contracts
400,000
411,610
412,448
838
6.5% TBA sale contracts
(400,000)
(411,391)
(412,448)
(1,057)
Net TBA derivatives
—
219
—
(219)
The following tables summarize certain characteristics of the Company's interest rate swaps whereby the Company pays interest at a fixed rate and receives floating interest based on the secured overnight financing rate as of June 30, 2025 and March 31, 2025.
$ in thousands
As of June 30, 2025
Maturities
Notional
Amount
WeightedAverage FixedPay Rate
WeightedAverage FloatingReceive Rate
WeightedAverage Years toMaturity
Less than 3 years
1,380,000
0.31 %
4.45 %
2.0
3 to 5 years
375,000
0.39 %
4.45 %
3.8
5 to 7 years
750,000
0.57 %
4.45 %
5.3
7 to 10 years
555,000
4.14 %
4.45 %
9.6
Greater than 10 years
445,000
1.99 %
4.45 %
19.3
Total
3,505,000
1.19 %
4.45 %
6.3
$ in thousands
As of March 31, 2025
Maturities
Notional
Amount
