Invesco Mortgage Capital Inc.

Reported second-quarter economic return was 3.8%, made up of monthly dividends of $0.12 per share and a 0.6% decline in book value per share. Earnings available for distribution declined to $0.50 from $0.55 in the first quarter. The investment portfolio ended the quarter at $8.2 billion, including $6.0 billion of Agency RMBS, $1.2 billion of Agency TBA, and $0.9 billion of Agency CMBS. Liquidity was $548.3 million of unrestricted cash and unencumbered investments, and hedges covered 97% of borrowing costs. Forward-looking, management did not give formal quarter or full-year financial guidance, but said the dividend is reviewed each quarter against EAD and that they expect to keep using ATM issuance and deploy capital mainly into 30-year 5% to 6% specified pools if conditions remain similar.

Kevin Collins emphasized disciplined investment management, prudent risk taking, and attractive risk-adjusted returns. He said the firm’s agency RMBS and agency CMBS focus, combined with Invesco’s scale and counterparty relationships, positions it to navigate uncertain markets and capitalize on opportunities. His tone was constructive but measured, repeatedly noting supportive valuations and favorable technicals while acknowledging policy, inflation, and geopolitical uncertainty.

No separate CFO prepared remarks were included beyond Q&A participation, so the financial commentary came mainly from Kevin Collins and Brian Norris. They highlighted that EAD declined from $0.55 to $0.50, book value fell 0.6%, and hedges remained at 97% of borrowing costs. Management also said unrestricted cash and unencumbered investments totaled $548.3 million, leverage was about 9x debt to common equity, and swap hedges remained the preferred tool, with 79% of hedges in interest rate swaps on a notional basis and 65% on a dollar-duration basis.

Analysts focused on the book value decline, ATM issuance, dollar-roll financing, the yield-curve outlook under Chair Warsh, and how the company would position hedges and specified pools if rates stay volatile. Management said the book value dip reflected a modestly positive duration gap, some yield-curve flattening, and a small ATM impact since shares were issued close to book. On financing, they said the 6-coupon squeeze was temporary and mostly technical. On the curve and hedging, they said their base case is that the Fed stays on hold, which could support steepening, but they kept the hedge ratio at 97% because of policy uncertainty and rising front-end volatility.