Invesco Mortgage Capital (IVR) Q2 2024 earnings summary

Executive summary

• Q2 2024 was marked by elevated interest rate volatility, a net loss per common share of $0.38, and an 8% decline in book value per share to $9.27, with economic return at (4.1%).

• Earnings available for distribution per share remained steady at $0.86, above the $0.40 dividend.

• Portfolio focus remained on agency RMBS and CMBS, with robust liquidity and capital to deploy as conditions improve.

• Issued $16.1 million in common stock and repurchased $3.6 million in preferred stock during the quarter.

• Operates as a REIT, distributing at least 90% of taxable income annually; externally managed by Invesco Advisers, Inc.

Financial highlights

• Net loss attributable to common stockholders was $18.8 million for Q2 2024 ($0.38 per share); book value per share declined from $10.08 to $9.27.

• Earnings available for distribution totaled $42.3 million, or $0.86 per share, unchanged from Q1 2024.

• Interest income was $68.0 million, with net interest income of $8.6 million and an effective interest rate margin of 4.09%.

• Investment portfolio totaled $5 billion: $4.6 billion in agency RMBS (including TBA) and $400 million in agency CMBS.

• Unrestricted cash and unencumbered investments totaled $446 million at quarter end.

Outlook and guidance

• Management expects a steeper yield curve and lower interest rate volatility, with a positive outlook for agency RMBS as disinflationary trends support potential monetary easing.

• Book value per common share as of August 2, 2024, estimated between $9.21 and $9.59.

• Continued emphasis on higher coupon specified pools and diversification across pool characteristics.

• Agency CMBS risk premiums contracted due to limited new issuance and strong investor demand.