#United States #Atlanta #Invesco #Q2 2025 #Mortgage Capital

Invesco Mortgage Capital Inc. Reports Q2 2025 Financial Results

Invesco Mortgage Capital Inc. (NYSE: IVR) released its financial results for the second quarter of 2025, highlighting several challenges faced during this period. For the quarter ending June 30, 2025, the company reported a net loss of $0.40 per common share, a sharp contrast to the net income of $0.26 seen in the previous quarter, Q1 2025.

Key Financial Highlights

Highlights from the quarterly report include:

• - Earnings Available for Distribution: The earnings available for distribution per common share was reported at $0.58, decreasing from $0.64 in Q1 2025.
• - Dividends: The common stock dividend remained steady at $0.34 per share, unchanged from the previous quarter.
• - Book Value per Share: The book value per common share fell to $8.05 from $8.81 as of March 31, 2025.
• - Economic Return: The economic return for the quarter stood at a negative 4.8%, sharply down from the positive 2.6% seen in the prior quarter.

Market Conditions Impact

John Anzalone, Chief Executive Officer of Invesco, attributed these results in part to adverse market conditions. The financial markets began the quarter under significant pressure, particularly following the adverse reactions to tariff announcements that occurred on April 2, resulting in increased volatility in interest rates and a selloff in riskier assets.

Fortunately, after the U.S. government announced a 90-day pause on tariff implementations on April 9, the markets showed signs of recovery as trade policy risks lessened, leading to a gradual decline in interest rate volatility.

Despite these challenges, the performance of Agency Residential Mortgage-Backed Securities (RMBS) mirrored the broader risk asset market, showing underperformance early in April before recovering as the quarter progressed. However, fluctuations related to interest rate swaps transactions negatively affected valuations, driven by concerns over trade policies hampering fiscal stability.

Financial Position

Invesco concluded the second quarter with a debt-to-equity ratio of 6.5, which reflects a decrease from 7.1 in the first quarter. This change indicates a slightly more defensive investment approach given the prevailing market uncertainties surrounding trade, fiscal, and monetary policies.

At the end of June, Invesco’s investment portfolio was valued at approximately $5.2 billion, consisting of $4.3 billion in Agency RMBS and $0.9 billion in Agency Commercial Mortgage-Backed Securities (CMBS). They also maintained a robust cash reserve of $362 million from unrestricted cash and unencumbered investments.

Looking Ahead

As of July 18, 2025, Invesco’s estimated book value per common share is projected to be between $7.99 and $8.31, buoyed by positive performance from Agency RMBS at the third quarter's beginning. Although a cautious stance remains in place toward Agency RMBS for the immediate future, there is optimism for the longer-term outlook due to expected strengthening in investor demand and favorable market conditions for the sector.

The company remains similarly positive about Agency CMBS, citing limited issuance, strong performance metrics, and stable cash flow which are all anticipated to provide support in the upcoming periods.

Conclusion

Invesco Mortgage Capital Inc. continues to navigate a turbulent financial landscape while striving to deliver returns to its shareholders amid various economic challenges. The upcoming earnings call scheduled for July 25, 2025, will further elaborate on these results and provide additional context to investors and analysts alike.