Invesco Mortgage reports Q2 EPS 58c, consensus 58c

John Anzalone, Chief Executive Officer, said, “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, 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.”