1. IVR reported a net loss per share of $0.40. 2. Earnings available for distribution per share declined to $0.58. 3. Book value per share fell to $8.05 from $8.81. 4. Economic return was significantly negative at -4.8%. 5. The debt-to-equity ratio improved to 6.5x from 7.1x.
The company reported a decline in book value and net losses, which typically negative impacts investor sentiment. Historical behavior shows similar results leading to price drops when losses or reduced book values are disclosed.
The significant decreases in earnings and book value, alongside a net loss, indicate fundamental weaknesses, impacting investor confidence and stock performance directly.
The market typically reacts quickly to negative financial disclosures like losses and declines in book value, potentially impacting IVR's stock in the near term.
ATLANTA, July 24, 2025 /PRNewswire/ -- Invesco Mortgage Capital Inc. (NYSE: IVR) (the "Company") today announced financial results for the quarter ended June 30, 2025.
"Financial markets began the second quarter under pressure, driven by a sharply negative reaction to the tariff announcements on April 2nd, which triggered a spike in interest rate volatility and a selloff in risk assets. Following the announcement of the 90-day pause in tariff implementation on April 9th, markets began to recover as trade policy tail risks diminished and interest rate volatility trended lower. Agency RMBS performance followed a similar trajectory to other risk assets, underperforming significantly in early April before rebounding as the quarter progressed. However, valuations on our interest rate swap hedges were negatively impacted as trade policy-related volatility combined with fiscal policy concerns to drive swap spreads notably tighter. These factors resulted in an economic return for the quarter of (4.8)%, consisting of our $0.34 dividend per common share and a $0.76 decline in book value per common share.
"We ended the second quarter with a debt-to-equity ratio of 6.5x, down from 7.1x as of March 31, 2025, reflecting our belief that elevated near term uncertainty regarding trade, fiscal and monetary policy warrants a modestly more defensive posture. At quarter end, our $5.2 billion investment portfolio consisted of $4.3 billion Agency RMBS and $0.9 billion Agency CMBS, and we maintained a sizeable balance of unrestricted cash and unencumbered investments totaling $362 million.
"As of July 18, 2025, we estimate book value per common share to be between $7.99 and $8.31(4), as Agency RMBS performed well at the beginning of the third quarter. Although our near-term outlook for Agency RMBS remains cautious, our longer-term outlook for the sector is favorable, as we expect investor demand to strengthen in higher coupons given attractive valuations and a steeper yield curve. In addition, we remain positive on Agency CMBS as limited issuance, strong fundamental performance and stable cash flow profiles should provide favorable support for this sector."
($ in millions, except share amounts)
| Key Performance Indicators | Q2 2025 | Q1 2025 | Variance |
|---|---|---|---|
| Average earning assets (at amortized cost) | $5,078.9 | $5,422.6 | ($343.7) |
| Average borrowings | $4,577.6 | $4,930.2 | ($352.6) |
| Average total stockholders' equity | $709.9 | $754.7 | ($44.8) |
Additional financial measures include:
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.
Members of the investment community and the general public are invited to listen to the Company's earnings conference call on Friday, July 25, 2025, at 9:00 a.m. ET.
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 August 8, 2025 by calling: 866-363-1806 (North America) or 1-203-369-0194 (International).
The presentation slides will be available on the Company's website at www.invescomortgagecapital.com.
This press release may include statements and information that constitute "forward-looking statements" within the meaning of the U.S. securities laws. Forward-looking statements involve risks, uncertainties, and assumptions. 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" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" available on the Securities and Exchange Commission's website.