IVR-PC · Invesco Mortgage Capital Inc.

Invesco Mortgage Capital Inc. reported a challenging first quarter of 2026, swinging to a net loss of $0.28 per share from net income of $0.68 in the prior quarter. The deterioration was primarily driven by a 7.3% decline in book value to $8.08 per share, resulting in a negative economic return of 3.2%. Incoming CEO Kevin Collins attributed the performance to a difficult market environment characterized by rising geopolitical tensions, higher energy prices, and renewed inflation concerns, which increased interest rate volatility and pushed U.S. Treasury yields higher. These dynamics caused higher coupon Agency RMBS to underperform relative to Treasuries. Despite the GAAP net loss, the Company generated non-GAAP Earnings Available for Distribution (EAD) of $0.55 per share, slightly down from $0.56 in the fourth quarter of 2025. Net interest income improved to $27.0 million from $21.3 million, driven by a decrease in the average cost of funds to 3.92% from 4.20%. The economic debt-to-equity ratio increased to 7.5x from 7.0x, largely reflecting the reduced equity base. The Company maintained strong liquidity with $493.1 million in unrestricted cash and unencumbered investments and raised $133.6 million through its ATM program. Management expressed a constructive outlook for Agency RMBS in the second quarter, citing improved risk sentiment and attractive spread levels.