Invesco Mortgage Capital Inc. Reports Fourth Quarter 2025 Financial Results

Rhea-AI Summary

Invesco Mortgage Capital (NYSE: IVR) reported Q4 2025 results for the quarter ended December 31, 2025. Book value per share rose to $8.72 and economic return was 8.0% for the quarter. Net income per common share was $0.68 and earnings available for distribution per share were $0.56. The Company declared a common dividend of $0.36 and shifted dividend frequency from quarterly to monthly.

The investment portfolio totaled $6.3 billion (primarily Agency RMBS $5.4 billion), debt-to-equity was 7.0x, and unrestricted cash and unencumbered investments were $453.3 million.

Positive

• Book value per common share increased to $8.72
• Economic return of 8.0% for Q4 2025
• Investment portfolio of $6.3 billion, including $5.4 billion Agency RMBS
• Maintained $453.3 million unrestricted cash and unencumbered investments
• Dividend increased to $0.36 and dividend frequency changed to monthly

Negative

• Effective interest expense rose to $30.2 million (+15% vs Q3 2025)
• Debt-to-equity ratio increased to 7.0x at quarter end
• Net income per common share declined to $0.68 from $0.74

News Market Reaction

-3.48%

1 alert

-3.48% News Effect

On the day this news was published, IVR declined 3.48%, reflecting a moderate negative market reaction.

Data tracked by StockTitan Argus on the day of publication.

Key Figures

Net income per share: $0.68 Earnings available for distribution/share: $0.56 Common dividend per share: $0.36 +5 more

8 metrics

Net income per share $0.68 Q4 2025 vs $0.74 in Q3 2025

Earnings available for distribution/share $0.56 Q4 2025 vs $0.58 in Q3 2025

Common dividend per share $0.36 Q4 2025, up from $0.34 in Q3 2025

Book value per share $8.72 As of Dec 31, 2025 vs $8.41 Sept 30, 2025

Economic return 8.0% Q4 2025 vs 8.7% in Q3 2025

Investment portfolio size $6.3 billion Q4 2025: $5.4B Agency RMBS, $0.9B Agency CMBS

Unrestricted cash & unencumbered investments $453.3 million Balance at Q4 2025 quarter end

Debt-to-equity ratio 7.0x As of Dec 31, 2025 vs 6.7x Sept 30, 2025

Market Reality Check

Price: $8.71 Vol: Volume 2,436,365 vs 20-da...

normal vol

$8.71 Last Close

Volume Volume 2,436,365 vs 20-day average 2,742,776 suggests trading near typical activity ahead of this release. normal

Technical Price 8.95 is trading above the 200-day MA of 7.74, indicating a pre-news uptrend.

Peers on Argus

IVR was down 0.78% pre-release while key mortgage REIT peers were mixed: CMTG -3...

IVR was down 0.78% pre-release while key mortgage REIT peers were mixed: CMTG -3.78%, RC -3.49%, vs KREF +1.82% and TRTX +1.98%, suggesting stock-specific rather than uniform sector pressure.

Previous Earnings Reports

5 past events · Latest: Oct 30 (Positive)

Same Type Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Oct 30	Q3 2025 earnings	Positive	+5.0%	Returned to profit, higher book value and strong 8.7% economic return.
Jul 24	Q2 2025 earnings	Negative	+0.9%	Net loss, negative economic return and book value decline despite steady dividend.
May 07	Q1 2025 earnings	Positive	+1.4%	Improved net income and higher distributable earnings with positive economic return.
Feb 20	Q4 2024 earnings	Negative	-0.9%	Quarterly net loss, lower distributable earnings and book value decline.
Nov 05	Q3 2024 earnings	Positive	-1.8%	Return to profit and higher book value but lower distributable earnings.

Pattern Detected

Earnings releases for IVR have often been followed by modest single-digit price moves, with mixed alignment between fundamental tone and price action. Positive quarters with improving book value and economic return have sometimes seen supportive reactions, but there are also instances where strong reported metrics coincided with negative next-day performance, indicating that expectations and positioning play a meaningful role.

Recent Company History

Over the last five earnings cycles from Q3 2024 through Q3 2025, IVR has alternated between profitable and loss-making quarters, while actively managing leverage and its Agency RMBS/CMBS portfolio. Book value and economic return have swung from negative in Q4 2024 and Q2 2025 to solid rebounds in Q1–Q3 2025. Dividends mostly held at $0.34–$0.40 per share. Today’s Q4 2025 report extends this sequence of detailed updates on earnings, book value and capital structure.

Historical Comparison

+2.0% avg move · Across the last five earnings releases, IVR’s average next-day move was about 2.01%, giving a baseli...

earnings

+2.0%

Average Historical Move earnings

Across the last five earnings releases, IVR’s average next-day move was about 2.01%, giving a baseline for gauging how the market may react to this Q4 2025 report.

Results show a path from Q4 2024 losses and book value pressure to improving economics in Q1–Q3 2025, with leverage, portfolio mix and dividends actively adjusted through the earnings cycles.

Market Pulse Summary

This announcement highlights Q4 2025 results with net income of $0.68 per share, earnings available ...

Analysis

This announcement highlights Q4 2025 results with net income of $0.68 per share, earnings available for distribution of $0.56, an increased common dividend of $0.36, and book value per share rising to $8.72. The company reports an investment portfolio of $6.3 billion and a debt-to-equity ratio of 7.0x. Investors may watch how future quarters balance dividend policy, leverage, and economic return versus earlier 2025 earnings releases.

Key Terms

earnings available for distribution, non-gaap, agency rmbs, agency cmbs, +4 more

8 terms

earnings available for distribution financial

"Earnings available for distribution per common share(1) of $0.56..."

Earnings available for distribution are the portion of a company’s profit that remains after paying taxes, meeting legal or contractual reserves, and covering any required debt or operating obligations — essentially the cash the business can legally and practically give to shareholders or unitholders. Investors watch this number because it shows how much income a company can return as dividends or distributions, similar to the money left in a household account after paying bills and savings goals.

non-gaap financial

"is a non-Generally Accepted Accounting Principles ("GAAP") financial measure."

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

agency rmbs financial

"drove notable outperformance in Agency RMBS relative to Treasuries..."

A pool of home loans packaged into a bond whose principal and interest payments are backed or guaranteed by a government-sponsored mortgage agency. Think of it as many mortgages bundled together with an insurance-like promise that reduces the chance of borrower default; investors buy them for steady income but must watch interest-rate moves and homeowners paying off or refinancing early, which can change returns.

agency cmbs financial

"... consisted of $5.4 billion Agency RMBS and $0.9 billion Agency CMBS..."

Agency CMBS are bonds made by pooling commercial real estate loans (like office, retail or apartment mortgages) and selling slices to investors, with the offering issued or guaranteed by a government-backed agency. They matter because the agency backing typically lowers default risk and makes the bonds easier to buy and sell, so investors treat them like a relatively safer, more liquid way to get income — but they still face interest-rate and prepayment risks.

repurchase agreements financial

"Repurchase agreements - Agency RMBS | | 4,758,568 | | 4.04 %..."

A repurchase agreement is a short-term loan where one party sells a security and promises to buy it back shortly after at a slightly higher price, effectively using the security as collateral. Investors care because these deals lubricate the plumbing of money markets—keeping cash flowing, helping set short-term interest rates, and affecting borrowing costs and liquidity that can influence asset prices and market stability.

interest rate swaps financial

"characteristics of the Company's interest rate swaps whereby the Company pays fixed..."

A contract between two parties to exchange streams of interest payments, typically swapping a fixed-rate payment for a floating-rate payment or vice versa. Think of it like two neighbors agreeing to trade the type of mortgage payments they make to reduce uncertainty or take advantage of expected rate moves; investors care because swaps change a company’s borrowing costs and risk exposure, which can materially affect cash flow, creditworthiness, and valuation.

secured overnight financing rate financial

"receives floating interest rates based on the secured overnight financing rate..."

A secured overnight financing rate (SOFR) is a daily benchmark interest rate that reflects the cost of borrowing cash overnight using U.S. Treasury securities as collateral. Think of it as the market price to “rent” cash for a day with a very safe pledge, similar to paying a short-term rental fee for money backed by government bonds. Investors track SOFR because it underpins pricing for loans, bonds and derivatives, so movements change borrowing costs, interest income and the valuation of interest-rate–linked positions.

u.s. treasury futures financial

"characteristics of the Company's U.S. Treasury futures contracts as of December 31, 2025..."

U.S. Treasury futures are standardized contracts traded on exchanges that promise the delivery or cash settlement of U.S. government bonds or notes at a set price on a future date. They let investors lock in or bet on future interest rates and bond prices—similar to reserving a product today at a fixed price—so they are widely used to protect portfolios from interest-rate swings, speculate on rate moves, and gauge market expectations for U.S. borrowing costs.

AI-generated analysis. Not financial advice.

ATLANTA, Jan. 29, 2026 /PRNewswire/ -- Invesco Mortgage Capital Inc. (NYSE: IVR) (the "Company") today announced financial results for the quarter ended December 31, 2025.

• Net income per common share of $0.68 compared to $0.74 in Q3 2025
• Earnings available for distribution per common share⁽¹⁾ of $0.56 compared to $0.58 in Q3 2025
• Common stock dividend of $0.36 per common share compared to $0.34 in Q3 2025
• Book value per common share⁽²⁾ of $8.72 compared to $8.41 as of September 30, 2025
• Economic return⁽³⁾ of 8.0% compared to 8.7% in Q3 2025

Update from John Anzalone, Chief Executive Officer

"During the fourth quarter, financial conditions improved, underpinned by two interest rate cuts from the Federal Reserve, robust corporate earnings and strong economic growth. This supportive backdrop, along with lower interest rate volatility and broadening investor demand, drove notable outperformance in Agency RMBS relative to Treasuries across the coupon stack. Additionally, swap spreads continued their widening trend, providing an additional positive contribution to performance. These factors led to a 3.7% increase in book value per common share to $8.72 at quarter end, and when combined with our increased dividend of $0.36, resulted in a positive economic return of 8.0% for the quarter.

"We modestly increased our debt-to-equity ratio to 7.0x as of quarter end, up from 6.7x as of September 30, 2025, reflecting the improved investment environment and enabling the Company to further benefit from positive Agency RMBS performance. At quarter end, our $6.3 billion investment portfolio consisted of $5.4 billion Agency RMBS and $0.9 billion Agency CMBS, and we maintained a sizable balance of unrestricted cash and unencumbered investments totaling $453.3 million.

"Given the meaningful decline in interest rate volatility, we remain constructive on Agency RMBS, though we view near-term risks as balanced following the sector's strong performance, reinforced by the recent announcements that Fannie Mae and Freddie Mac will purchase $200 billion in Agency RMBS. In addition, Agency CMBS continues to offer attractive risk-adjusted yields and diversification benefits, given its stable cash flow profile and lower sensitivity to interest rate fluctuations. Longer term, the environment for Agency MBS investments is likely to remain favorable given reduced interest rate volatility and expectations for broadening investor demand and a steeper yield curve."

(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 December 31, 2025 and September 30, 2025 is calculated as total stockholders' equity less the liquidation preference of the Company's Series C Preferred Stock ($171.4 million as of December 31, 2025 and $173.3 million as of September 30, 2025), divided by total common shares outstanding.

(3) Economic return for the quarter ended December 31, 2025 is defined as the change in book value per common share from September 30, 2025 to December 31, 2025 of $0.31; plus dividends declared of $0.36 per common share; divided by the September 30, 2025 book value per common share of $8.41. Economic return for the quarter ended September 30, 2025 is defined as the change in book value per common share from June 30, 2025 to September 30, 2025 of $0.36; plus dividends declared of $0.34 per common share; divided by the June 30, 2025 book value per common share of $8.05.

Key performance indicators for the quarters ended December 31, 2025 and September 30, 2025 are summarized in the table below.

$ in millions, except share amounts	Q4 2025	Q3 2025	Variance
Average Balances (1)	(unaudited)	(unaudited)
Average earning assets (at amortized cost)	$5,868.9	$5,382.2	$486.7
Average borrowings	$5,393.7	$4,889.8	$503.9
Average total stockholders' equity	$793.0	$748.0	$45.0
U.S. GAAP Financial Measures
Total interest income	$77.9	$72.9	$5.0
Total interest expense	$56.6	$55.3	$1.3
Net interest income	$21.3	$17.6	$3.7
Total expenses	$4.6	$4.5	$0.1
Net income (loss) attributable to common stockholders	$48.2	$50.2	($2.0)
Average earning asset yields	5.31 %	5.42 %	(0.11) %
Average cost of funds	4.20 %	4.52 %	(0.32) %
Average net interest rate margin	1.11 %	0.90 %	0.21 %
Period-end weighted average asset yields (2)	5.37 %	5.42 %	(0.05) %
Period-end weighted average cost of funds	4.04 %	4.35 %	(0.31) %
Period-end weighted average net interest rate margin	1.33 %	1.07 %	0.26 %
Book value per common share (3)	$8.72	$8.41	$0.31
Earnings (loss) per common share (basic)	$0.68	$0.74	($0.06)
Earnings (loss) per common share (diluted)	$0.68	$0.74	($0.06)
Debt-to-equity ratio	7.0x	6.7x	0.3x
Non-GAAP Financial Measures (4)
Earnings available for distribution	$39.9	$39.0	$0.9
Effective interest expense	$30.2	$26.2	$4.0
Effective net interest income	$47.7	$46.8	$0.9
Effective cost of funds	2.24 %	2.14 %	0.10 %
Effective interest rate margin	3.07 %	3.28 %	(0.21) %
Earnings available for distribution per common share	$0.56	$0.58	($0.02)
Economic debt-to-equity ratio	7.0x	6.7x	0.3x

(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 ($171.4 million as of December 31, 2025 and $173.3 million as of September 30, 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 December 31, 2025 and September 30, 2025.

			As of
			December 31, 2025						September 30, 2025
$ in thousands			Fair Value		Percentage of Portfolio		Period-end Weighted Average Yield		Fair Value		Percentage of Portfolio		Period-end Weighted Average Yield
Agency RMBS:
30 year fixed-rate pass-through coupon:
	4.5 %		785,584		12.5 %		4.89 %		745,869		13.0 %		4.91 %
	5.0 %		1,486,801		23.7 %		5.20 %		1,238,419		21.5 %		5.24 %
	5.5 %		1,534,654		24.5 %		5.51 %		1,224,244		21.3 %		5.56 %
	6.0 %		1,283,242		20.4 %		5.93 %		1,340,686		23.3 %		5.93 %
	6.5 %		218,879		3.5 %		6.14 %		229,541		4.0 %		6.14 %
Total 30 year fixed-rate pass-through			5,309,160		84.6 %		5.46 %		4,778,759		83.1 %		5.51 %
Agency CMO			69,320		1.1 %		9.18 %		70,960		1.2 %		10.18 %
Agency CMBS			898,129		14.3 %		4.62 %		899,519		15.7 %		4.62 %
Total MBS portfolio			6,276,609		100.0 %		5.37 %		5,749,238		100.0 %		5.42 %

The following table summarizes certain characteristics of the Company's borrowings as of December 31, 2025 and September 30, 2025.

		As of
$ in thousands		December 31, 2025						September 30, 2025
		Amount Outstanding		Weighted Average Interest Rate		Weighted Average Remaining Maturity (days)		Amount Outstanding		Weighted Average Interest Rate		Weighted Average Remaining Maturity (days)
Repurchase agreements - Agency RMBS		4,758,568		4.04 %		24		4,292,146		4.35 %		20
Repurchase agreements - Agency CMBS		860,687		4.04 %		20		857,935		4.35 %		24
Total borrowings		5,619,255		4.04 %		23		5,150,081		4.35 %		21

The following tables summarize certain characteristics of the Company's interest rate swaps whereby the Company pays fixed interest rates and receives floating interest rates based on the secured overnight financing rate as of December 31, 2025 and September 30, 2025.

$ in thousands		As of December 31, 2025
Maturities		Notional Amount		Weighted Average Fixed Pay Rate		Weighted Average Floating Receive Rate		Weighted Average Years to Maturity
Less than 3 years		2,155,000		1.21 %		3.87 %		1.4
3 to 5 years		950,000		0.54 %		3.87 %		4.6
7 to 10 years		305,000		4.12 %		3.87 %		9.1
Greater than 10 years		410,000		1.83 %		3.87 %		17.9
Total		3,820,000		1.34 %		3.87 %		4.6

 

$ in thousands		As of September 30, 2025
Maturities		Notional Amount		Weighted Average Fixed Pay Rate		Weighted Average Floating Receive Rate		Weighted Average Years to Maturity
Less than 3 years		1,555,000		0.31 %		4.24 %		1.9
3 to 5 years		450,000		0.47 %		4.24 %		4.5
5 to 7 years		500,000		0.61 %		4.24 %		5.1
7 to 10 years		430,000		4.13 %		4.24 %		9.3
Greater than 10 years		445,000		1.99 %		4.24 %		19.0
Total		3,380,000		1.08 %		4.24 %		5.9

The following table summarizes certain characteristics of the Company's U.S. Treasury futures contracts as of December 31, 2025 and September 30, 2025.

		As of
		December 31, 2025		September 30, 2025
$ in thousands		Notional Amount - Short		Notional Amount - Short
10 year U.S. Treasury futures		420,000		520,000
Ultra 10 year U.S. Treasury futures		455,000		290,000
30 year U.S. Treasury futures		215,000		190,000
Total		1,090,000		1,000,000

Capital Activities

Dividends

As previously announced on December 18, 2025, the Company declared a common stock dividend of $0.36 per share paid on January 23, 2026 to its stockholders of record as of the close of business on December 29, 2025. Additionally, the Company announced that it changed its common dividend declaration and payment frequency from quarterly to monthly, with the first monthly dividend of $0.12 per share declared on January 15, 2026.

Issuances of Common Stock

During the three months ended December 31, 2025, the Company issued 849,987 shares of common stock for net cash proceeds of $7.2 million through its at-the-market program.

Repurchases of Preferred Stock

During the three months ended December 31, 2025, the Company repurchased and retired 76,356 shares of Series C Preferred Stock with a carrying value of $1.8 million.

About Invesco Mortgage Capital Inc.

The Company is a real estate investment trust that primarily focuses on investing in, financing and managing mortgage-backed securities and other mortgage-related assets. The Company is externally managed and advised by Invesco Advisers, Inc., a registered investment adviser and an indirect wholly-owned subsidiary of Invesco Ltd., a leading independent global investment management firm.

Earnings Call

Members of the investment community and the general public are invited to listen to the Company's earnings conference call on Friday, January 30, 2026, at 9:00 a.m. ET, by calling one of the following numbers:

North America Toll Free:	888-982-7409
International:	1-212-287-1625
Passcode:	Invesco

An audio replay will be available until 5:00 pm ET on February 13, 2026 by calling:

866-363-1806 (North America) or 1-203-369-0194 (International)

The presentation slides that will be reviewed during the call will be available on the Company's website at www.invescomortgagecapital.com.

Cautionary Notice Regarding Forward-Looking Statements

This press release, the related presentation and comments made in the associated conference call, may include statements and information that constitute "forward-looking statements" within the meaning of the U.S. securities laws as defined in the Private Securities Litigation Reform Act of 1995, and such statements are intended to be covered by the safe harbor provided by the same. Forward-looking statements include our views on the risk positioning of our portfolio, domestic and global market conditions (including the Agency RMBS, Agency CMBS and residential and commercial real estate markets), the market for our target assets, our financial performance, including our earnings available for distribution, economic return, comprehensive income and changes in our book value, our intention and ability to pay dividends, our ability to continue performance trends, the stability of portfolio yields, interest rates, spreads, prepayment trends, financing sources, cost of funds, our leverage, liquidity, capital structure and equity allocation. In addition, words such as "believes," "expects," "anticipates," "intends," "plans," "estimates," "projects," "forecasts," and future or conditional verbs such as "will," "may," "could," "should," and "would" as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements.

Forward-looking statements are not guarantees, and they involve risks, uncertainties and assumptions. There can be no assurance that actual results will not differ materially from our expectations. We caution investors not to rely unduly on any forward-looking statements and urge you to carefully consider the risks identified under the captions "Risk Factors," "Forward-Looking Statements" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our annual report on Form 10-K and quarterly reports on Form 10-Q, which are available on the Securities and Exchange Commission's website at www.sec.gov.

All written or oral forward-looking statements that we make, or that are attributable to us, are expressly qualified by this cautionary notice. We expressly disclaim any obligation to update the information in any public disclosure if any forward-looking statement later turns out to be inaccurate.

INVESCO MORTGAGE CAPITAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
	Three Months Ended						Years Ended
$ in thousands, except share data	December 31, 2025		September 30, 2025		December 31, 2024		December 31, 2025		December 31, 2024
Interest income	77,901		72,916		76,110		295,287		286,546
Interest expense	56,643		55,302		62,431		219,865		249,719
Net interest income	21,258		17,614		13,679		75,422		36,827
Other income (loss)
Gain (loss) on investments, net	22,914		49,540		(187,714)		149,344		(133,911)
(Increase) decrease in provision for credit losses	—		—		(236)		—		(458)
Equity in earnings (losses) of unconsolidated ventures	—		—		—		—		(193)
Gain (loss) on derivative instruments, net	11,887		(9,218)		182,556		(104,926)		176,634
Other investment income (loss), net	—		—		2		—		2
Total other income (loss)	34,801		40,322		(5,392)		44,418		42,074
Expenses
Management fee – related party	2,806		2,662		3,172		11,295		11,866
General and administrative	1,759		1,803		1,609		7,266		7,153
Total expenses	4,565		4,465		4,781		18,561		19,019
Net income (loss)	51,494		53,471		3,506		101,279		59,882
Dividends to preferred stockholders	(3,221)		(3,261)		(5,444)		(13,120)		(22,011)
Gain (loss) on repurchase and retirement of preferred stock	(30)		(2)		1		14		427
Issuance and redemption costs of redeemed preferred stock	—		—		(3,535)		—		(3,535)
Net income (loss) attributable to common stockholders	48,243		50,208		(5,472)		88,173		34,763
Earnings (loss) per share:
Net income (loss) attributable to common stockholders
Basic	0.68		0.74		(0.09)		1.32		0.65
Diluted	0.68		0.74		(0.09)		1.32		0.65

 

INVESCO MORTGAGE CAPITAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
	Three Months Ended						Years Ended
$ in thousands	December 31, 2025		September 30, 2025		December 31, 2024		December 31, 2025		December 31, 2024
Net income (loss)	51,494		53,471		3,506		101,279		59,882
Other comprehensive income (loss):
Unrealized gain (loss) on mortgage-backed securities, net	—		—		(412)		229		(1,051)
Reclassification of unrealized (gain) loss on sale of mortgage-backed securities to gain (loss) on investments, net	—		—		—		(402)		—
Reclassification of unrealized loss on available-for-sale securities to (increase) decrease in provision for credit losses	—		—		224		—		526
Total other comprehensive income (loss)	—		—		(188)		(173)		(525)
Comprehensive income (loss)	51,494		53,471		3,318		101,106		59,357
Dividends to preferred stockholders	(3,221)		(3,261)		(5,444)		(13,120)		(22,011)
Gain (loss) on repurchase and retirement of preferred stock	(30)		(2)		1		14		427
Issuance and redemption costs of redeemed preferred stock	—		—		(3,535)		—		(3,535)
Comprehensive income (loss) attributable to common stockholders	48,243		50,208		(5,660)		88,000		34,238

 

INVESCO MORTGAGE CAPITAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
	As of
$ in thousands, except share amounts	December 31, 2025		December 31, 2024
ASSETS
Mortgage-backed securities, at fair value (including pledged securities of $5,879,318 and $5,129,486,      respectively; net of allowance for credit losses of $0 and $654, respectively)	6,276,609		5,445,508
Cash and cash equivalents	56,040		73,403
Restricted cash	110,391		137,478
Due from counterparties	—		580
Investment related receivable	27,848		24,870
Derivative assets, at fair value	4,412		5,033
Other assets	594		1,162
Total assets	6,475,894		5,688,034
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Repurchase agreements	5,619,255		4,893,958
Derivative liabilities, at fair value	—		627
Dividends payable	25,845		24,692
Accrued interest payable	28,664		32,711
Accounts payable and accrued expenses	1,580		1,619
Due to affiliate	3,006		3,698
Total liabilities	5,678,350		4,957,305
Stockholders' equity:
Preferred Stock, par value $0.01 per share; 50,000,000 shares authorized:
7.50% Fixed-to-Floating Series C Cumulative Redeemable Preferred Stock: 6,854,131 and      7,206,659 shares issued and outstanding, respectively ($171,353 and $180,166 aggregate      liquidation preference, respectively)	165,756		174,281
Common Stock, par value $0.01 per share; 134,000,000 shares authorized; 71,790,532 and 61,729,693      shares issued and outstanding, respectively	718		617
Additional paid in capital	4,209,977		4,127,807
Accumulated other comprehensive income	—		173
Retained earnings (distributions in excess of earnings)	(3,578,907)		(3,572,149)
Total stockholders' equity	797,544		730,729
Total liabilities and stockholders' equity	6,475,894		5,688,034

Non-GAAP Financial Measures

The table below shows the non-GAAP financial measures the Company uses to analyze its operating results and the most directly comparable U.S. GAAP measures. The Company believes these non-GAAP measures are useful to investors in assessing its performance as discussed further below.

Non-GAAP Financial Measure		Most Directly Comparable U.S. GAAP Measure
Earnings available for distribution (and by calculation, earnings available for distribution per common share)		Net income (loss) attributable to common stockholders (and by calculation, basic earnings (loss) per common share)
Effective interest expense (and by calculation, effective cost of funds)		Total interest expense (and by calculation, cost of funds)
Effective net interest income (and by calculation, effective interest rate margin)		Net interest income (and by calculation, net interest rate margin)
Economic debt-to-equity ratio		Debt-to-equity ratio

The non-GAAP financial measures used by the Company's management should be analyzed in conjunction with U.S. GAAP financial measures and should not be considered substitutes for U.S. GAAP financial measures. In addition, the non-GAAP financial measures may not be comparable to similarly titled non-GAAP financial measures of its peer companies.

Earnings Available for Distribution

The Company's business objective is to provide attractive risk-adjusted returns to its stockholders, primarily through dividends and secondarily through capital appreciation. The Company uses earnings available for distribution as a measure of its investment portfolio's ability to generate income for distribution to common stockholders and to evaluate its progress toward meeting this objective. The Company calculates earnings available for distribution as U.S. GAAP net income (loss) attributable to common stockholders adjusted for (gain) loss on investments, net; realized (gain) loss on derivative instruments, net; unrealized (gain) loss on derivative instruments, net; TBA dollar roll income; (gain) loss on repurchase and retirement of preferred stock and foreign currency (gains) losses, net. The Company may add and has added additional reconciling items to its earnings available for distribution calculation as appropriate.

By excluding the gains and losses discussed above, the Company believes the presentation of earnings available for distribution provides a consistent measure of operating performance that investors can use to evaluate its results over multiple reporting periods and, to a certain extent, compare to its peer companies. However, because not all of the Company's peer companies use identical operating performance measures, the Company's presentation of earnings available for distribution may not be comparable to other similarly titled measures used by its peer companies. The Company excludes the impact of gains and losses when calculating earnings available for distribution because, when analyzed in conjunction with its U.S. GAAP results, earnings available for distribution provides additional detail of its investment portfolio's earnings capacity. In addition, certain gains and losses represent one-time events.

Furthermore, gains and losses have not been accounted for consistently under U.S. GAAP. Under U.S. GAAP, certain gains and losses may be reflected in net income whereas other gains and losses may be reflected in other comprehensive income. For example, a portion of the Company's mortgage-backed securities were historically classified as available-for-sale securities, and changes in the valuation of these securities were recorded in other comprehensive income on its condensed consolidated balance sheets. The Company elected the fair value option for its mortgage-backed securities purchased on or after September 1, 2016, and changes in the valuation of these securities are recorded in other income (loss) in the condensed consolidated statements of operations.

To maintain qualification as a REIT, U.S. federal income tax law generally requires that the Company distribute at least 90% of its REIT taxable income annually. Because the Company views earnings available for distribution as a consistent measure of its investment portfolio's ability to generate income for distribution to common stockholders, earnings available for distribution is one metric, but not the exclusive metric, that is used to determine the amount, if any, of dividends on common stock. However, earnings available for distribution should not be considered as an indication of the Company's taxable income, a guaranty of its ability to pay dividends or as a proxy for the amount of dividends it may pay, as earnings available for distribution excludes certain items that impact its cash needs.

Earnings available for distribution is an incomplete measure of the Company's financial performance and there are other factors that impact the achievement of the Company's business objective. The Company cautions that earnings available for distribution should not be considered as an alternative to net income (determined in accordance with U.S. GAAP), or as an indication of the Company's cash flow from operating activities (determined in accordance with U.S. GAAP), a measure of the Company's liquidity, or as an indication of amounts available to fund its cash needs. 

The table below provides a reconciliation of U.S. GAAP net income (loss) attributable to common stockholders to earnings available for distribution for the following periods.

	Three Months Ended						Years Ended
	December 31, 2025		September 30, 2025		December 31, 2024		December 31, 2025		December 31, 2024
$ in thousands, except per share data
Net income (loss) attributable to common stockholders	48,243		50,208		(5,472)		88,173		34,763
Adjustments:
(Gain) loss on investments, net	(22,914)		(49,540)		187,714		(149,344)		133,911
Realized (gain) loss on derivative instruments, net(1)	18,863		49,189		(157,864)		217,176		(11,405)
Unrealized (gain) loss on derivative instruments, net(1)	(4,354)		(10,833)		7,629		(6)		(3,467)
TBA dollar roll income(2)	—		—		249		1,147		1,366
(Gain) loss on repurchase and retirement of preferred stock	30		2		(1)		(14)		(427)
Foreign currency (gains) losses, net(3)	—		—		(2)		—		(2)
Subtotal	(8,375)		(11,182)		37,725		68,959		119,976
Earnings available for distribution	39,868		39,026		32,253		157,132		154,739
Basic income (loss) per common share	0.68		0.74		(0.09)		1.32		0.65
Earnings available for distribution per common share(4)	0.56		0.58		0.53		2.35		2.88

(1)	U.S. GAAP gain (loss) on derivative instruments, net on the condensed consolidated statements of operations includes the following components.

	Three Months Ended						Years Ended
	December 31, 2025		September 30, 2025		December 31, 2024		December 31, 2025		December 31, 2024
$ in thousands
Realized gain (loss) on derivative instruments, net	(18,863)		(49,189)		157,864		(217,176)		11,405
Unrealized gain (loss) on derivative instruments, net	4,354		10,833		(7,629)		6		3,467
Contractual net interest income (expense) on interest rate swaps	26,396		29,138		32,321		112,244		161,762
Gain (loss) on derivative instruments, net	11,887		(9,218)		182,556		(104,926)		176,634

(2)	A TBA dollar roll is a series of derivative transactions where TBAs with the same specified issuer, term and coupon but different settlement dates are simultaneously bought and sold. The TBA settling in the later month typically prices at a discount to the TBA settling in the earlier month. TBA dollar roll income represents the price differential between the TBA price for current month settlement compared to the TBA price for forward month settlement. The Company includes TBA dollar roll income in earnings available for distribution because it is the economic equivalent of interest income on the underlying Agency RMBS, less an implied financing cost, over the forward settlement period. TBA dollar roll income is a component of gain (loss) on derivative instruments, net on the Company's condensed consolidated statements of operations.
(3)	Foreign currency gains (losses), net represents foreign currency transaction gains and losses and is included in other investment income (loss), net on the condensed consolidated statements of operations.
(4)	Earnings available for distribution per common share is equal to earnings available for distribution divided by the basic weighted average number of common shares outstanding.

The table below presents the components of earnings available for distribution for the following periods.

	Three Months Ended						Years Ended
$ in thousands	December 31, 2025		September 30, 2025		December 31, 2024		December 31, 2025		December 31, 2024
Effective net interest income (1)	47,654		46,752		46,000		187,666		198,589
TBA dollar roll income	—		—		249		1,147		1,366
Equity in earnings (losses) of unconsolidated ventures	—		—		—		—		(193)
(Increase) decrease in provision for credit losses	—		—		(236)		—		(458)
Total expenses	(4,565)		(4,465)		(4,781)		(18,561)		(19,019)
Subtotal	43,089		42,287		41,232		170,252		180,285
Dividends to preferred stockholders	(3,221)		(3,261)		(5,444)		(13,120)		(22,011)
Issuance and redemption costs of redeemed preferred stock	—		—		(3,535)		—		(3,535)
Earnings available for distribution	39,868		39,026		32,253		157,132		154,739

(1)	See below for a reconciliation of net interest income to effective net interest income, a non-GAAP measure.

Effective Interest Expense/Effective Cost of Funds/Effective Net Interest Income/Effective Interest Rate Margin

The Company calculates effective interest expense (and by calculation, effective cost of funds) as U.S. GAAP total interest expense adjusted for contractual net interest income (expense) on its interest rate swaps that is recorded as gain (loss) on derivative instruments, net. The Company views its interest rate swaps as an economic hedge against increases in future market interest rates on its borrowings. The Company adds back the net payments or receipts on its interest rate swap agreements to its total U.S. GAAP interest expense because the Company uses interest rate swaps to add stability to interest expense.

The Company calculates effective net interest income (and by calculation, effective interest rate margin) as U.S. GAAP net interest income adjusted for contractual net interest income (expense) on its interest rate swaps that is recorded as gain (loss) on derivative instruments, net.

The Company believes the presentation of effective interest expense, effective cost of funds, effective net interest income and effective interest rate margin measures, when considered together with U.S. GAAP financial measures, provides information that is useful to investors in understanding the Company's borrowing costs and operating performance.

The following tables reconcile total interest expense to effective interest expense and cost of funds to effective cost of funds for the following periods.

	Three Months Ended
	December 31, 2025				September 30, 2025				December 31, 2024
$ in thousands	Reconciliation		Cost of Funds / Effective Cost of Funds		Reconciliation		Cost of Funds / Effective Cost of Funds		Reconciliation		Cost of Funds / Effective Cost of Funds
Total interest expense	56,643		4.20 %		55,302		4.52 %		62,431		5.13 %
Less: Contractual net interest           expense (income) on interest           rate swaps recorded as gain           (loss) on derivative           instruments, net	(26,396)		(1.96) %		(29,138)		(2.38) %		(32,321)		(2.66) %
Effective interest expense	30,247		2.24 %		26,164		2.14 %		30,110		2.47 %

 

	Years Ended December 31,
	2025				2024
$ in thousands	Reconciliation		Cost of Funds / Effective Cost of Funds		Reconciliation		Cost of Funds / Effective Cost of Funds
Total interest expense	219,865		4.44 %		249,719		5.39 %
Less: Contractual net interest expense (income) on interest rate           swaps recorded as gain (loss) on derivative instruments, net	(112,244)		(2.27) %		(161,762)		(3.49) %
Effective interest expense	107,621		2.17 %		87,957		1.90 %

The following tables reconcile net interest income to effective net interest income and net interest rate margin to effective interest rate margin for the following periods.

	Three Months Ended
	December 31, 2025				September 30, 2025				December 31, 2024
$ in thousands	Reconciliation		Net Interest Rate Margin / Effective Interest Rate Margin		Reconciliation		Net Interest Rate Margin / Effective Interest Rate Margin		Reconciliation		Net Interest Rate Margin / Effective Interest Rate Margin
Net interest income	21,258		1.11 %		17,614		0.90 %		13,679		0.47 %
Add: Contractual net interest income         (expense) on interest rate swaps         recorded as gain (loss) on         derivative instruments, net	26,396		1.96 %		29,138		2.38 %		32,321		2.66 %
Effective net interest income	47,654		3.07 %		46,752		3.28 %		46,000		3.13 %

 

	Years Ended December 31,
	2025				2024
$ in thousands	Reconciliation		Net Interest Rate Margin / Effective Interest Rate Margin		Reconciliation		Net Interest Rate Margin / Effective Interest Rate Margin
Net interest income	75,422		0.99 %		36,827		0.11 %
Add: Contractual net interest income (expense) on interest rate         swaps recorded as gain (loss) on derivative instruments, net	112,244		2.27 %		161,762		3.49 %
Effective net interest income	187,666		3.26 %		198,589		3.60 %

Economic Debt-to-Equity Ratio

The following table shows the Company's debt-to-equity ratio and the Company's economic debt-to-equity ratio as of December 31, 2025 and September 30, 2025. The Company's debt-to-equity ratio is calculated in accordance with U.S. GAAP and is the ratio of total debt to total stockholders' equity.

The Company presents an economic debt-to-equity ratio, a non-GAAP financial measure of leverage that considers the impact of the off-balance sheet financing of its investments in TBAs that are accounted for as derivative instruments under U.S. GAAP. The Company includes these types of TBAs at implied cost basis in its measure of leverage because a forward contract to acquire Agency RMBS in the TBA market carries similar risks to Agency RMBS purchased in the cash market and funded with on-balance sheet liabilities. Similarly, a contract for the forward sale of Agency RMBS has substantially the same effect as selling the underlying Agency RMBS and reducing the Company's on-balance sheet funding commitments. The Company believes that presenting its economic debt-to-equity ratio, when considered together with its U.S. GAAP financial measure of debt-to-equity ratio, provides information that is useful to investors in understanding how management evaluates at-risk leverage and gives investors a comparable statistic to those of other mortgage REITs who also invest in TBAs and present a similar non-GAAP measure of leverage.

	As of
$ in thousands	December 31, 2025		September 30, 2025
Repurchase agreements	5,619,255		5,150,081
Total stockholders' equity	797,544		769,581
Debt-to-equity ratio (1)	7.0		6.7
Economic debt-to-equity ratio (2)	7.0		6.7

(1)	Debt-to-equity ratio is calculated as the ratio of total repurchase agreements to total stockholders' equity.
(2)	Economic debt-to-equity ratio is calculated as the ratio of total repurchase agreements and TBAs at implied cost basis (none as of December 31, 2025 or September 30, 2025) to total stockholders' equity.

Average Balances

The table below presents information related to the Company's average earning assets, average earning asset yields, average borrowings and average cost of funds for the following periods.

	Three Months Ended						Years Ended
$ in thousands	December 31, 2025		September 30, 2025		December 31, 2024		December 31, 2025		December 31, 2024
Average earning assets (1)	5,868,897		5,382,189		5,440,662		5,439,209		5,208,204
Average earning asset yields (2)	5.31 %		5.42 %		5.60 %		5.43 %		5.50 %
Average borrowings (3)	5,393,719		4,889,782		4,865,582		4,948,937		4,637,086
Average cost of funds (4)	4.20 %		4.52 %		5.13 %		4.44 %		5.39 %

(1)	Average balances for each period are based on weighted month-end balances.
(2)	Average earning asset yields for each period are calculated by dividing interest income, including amortization of premiums and discounts, by average earning assets based on the amortized cost of the investments. All yields are annualized.
(3)	Average borrowings for each period are based on weighted month-end balances.
(4)	Average cost of funds is calculated by dividing annualized interest expense by average borrowings.

 

Greg Seals,
Investor Relations
404-439-3323

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SOURCE Invesco Mortgage Capital Inc.

FAQ

What were Invesco Mortgage Capital (IVR) Q4 2025 earnings per share and economic return?

Net income per common share was $0.68; economic return for Q4 2025 was 8.0%. According to the company, the economic return reflects a $0.31 book value increase plus $0.36 dividends divided by the prior quarter book value.

How did IVR's book value and dividend change in Q4 2025?

Book value per common share rose to $8.72 and the common dividend was increased to $0.36. According to the company, dividend frequency also changed from quarterly to monthly with the first monthly payment declared January 15, 2026.

What is the size and composition of IVR's investment portfolio as of December 31, 2025?

The portfolio totaled $6.3 billion, with approximately $5.4 billion in Agency RMBS and $0.9 billion in Agency CMBS. According to the company, Agency RMBS made up roughly 84.6% of the MBS portfolio by fair value.

Did IVR's borrowing costs or leverage change in Q4 2025?

Debt-to-equity increased to 7.0x and effective interest expense rose to $30.2 million. According to the company, higher borrowings and market funding rates contributed to higher effective interest expense versus Q3 2025.

How much cash and unencumbered investments did IVR hold at quarter end?

IVR reported $453.3 million of unrestricted cash and unencumbered investments at December 31, 2025. According to the company, this liquidity position supports portfolio flexibility and potential opportunistic deployment.

Did IVR complete any equity or preferred capital actions in Q4 2025?

Yes. IVR issued 849,987 common shares for net proceeds of $7.2 million and repurchased 76,356 Series C preferred shares for $1.8 million. According to the company, these were executed during the three months ended December 31, 2025.