0001437071false00014370712025-02-202025-02-200001437071us-gaap:CommonStockMember2025-02-202025-02-200001437071ivr:SeriesCCumulativeRedeemablePreferredStockMember2025-02-202025-02-20

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 20, 2025
  ivrwordmarkmainimage08.jpg
Invesco Mortgage Capital Inc.

(Exact name of registrant as specified in its charter)

Maryland001-3438526-2749336
(State or other jurisdiction
of incorporation)		(Commission File Number)(IRS Employer
Identification No.)
1331 Spring Street, N.W. Suite 2500
Atlanta,Georgia30309
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (404) 892-0896
n/a
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):  
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Common Stock, par value $0.01 per shareIVRNew York Stock Exchange
7.50% Fixed-to-Floating Series C Cumulative Redeemable Preferred Stock IVR PrCNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02
Results of Operations and Financial Condition.

On February 20, 2025, Invesco Mortgage Capital Inc. (the “registrant”) issued a press release announcing its financial results for the quarter ended December 31, 2024 (the “Release”).

The Release is attached to this Report as Exhibit 99.1 and the information contained in the Release is incorporated into this Item 2.02 by this reference. The information contained in this Item 2.02 is being “furnished” and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise subject to the liabilities of that section. The information in this Item 2.02 shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, or into any filing or other document pursuant to the Exchange Act, except as otherwise expressly stated in such filing.


Item 8.01Other Events.

On February 20, 2025, the registrant issued a press release announcing that its book value per common share as of February 14, 2025 is estimated to be in the range of $8.90 to $9.26.(1)

(1) Book value per common share as of February 14, 2025 is adjusted to exclude a pro rata portion of the current quarter’s common stock dividend (which for purposes of this calculation is assumed to be the same as the previous quarter) and is calculated as total stockholders' equity less the liquidation preference of the Company's Series C Preferred Stock ($178.8 million as of February 14, 2025), divided by total common shares outstanding of 61.7 million.


Item 9.01Financial Statements and Exhibits.
(d)Exhibits.
 
Exhibit No.
Description
99.1
104Cover Page Interactive Data File (embedded within the Inline XBRL document).





SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


Invesco Mortgage Capital Inc.

By: /s/ Mark Gregson
Mark Gregson
Chief Financial Officer


Date: February 20, 2025


Exhibit 99.1
ivrwordmarkmainimage08a.jpg
Press Release
For immediate release

Greg Seals,
Investor Relations
404-439-3323

Invesco Mortgage Capital Inc. Reports Fourth Quarter 2024 Financial Results
Atlanta - February 20, 2025 -- Invesco Mortgage Capital Inc. (NYSE: IVR) (the “Company”) today announced financial results for the quarter ended December 31, 2024.
•Net loss per common share of $0.09 compared to net income of $0.63 in Q3 2024
•Earnings available for distribution per common share(1) of $0.53 compared to $0.68 in Q3 2024
•Common stock dividend of $0.40 per common share, unchanged from Q3 2024
•Book value per common share(2) of $8.92 compared to $9.37 as of September 30, 2024
•Economic return(3) of (0.5)% compared to 5.4% in Q3 2024
•Improved capital structure through redemption of Series B Preferred Stock
Update from John Anzalone, Chief Executive Officer
“Long-term Treasury yields rose sharply during the fourth quarter as the disinflationary trend stalled and market participants recalibrated their expectations for future monetary and fiscal policy. The resulting interest rate volatility and reduced investor demand drove underperformance relative to interest rate hedges on our Agency RMBS. Positively, this was partially offset by improved risk premiums on our Agency CMBS as demand for stable cash flow profiles increased. Against this backdrop, book value per common share decreased 4.8% to $8.92 and, when combined with our $0.40 per share common stock dividend, resulted in an economic return of (0.5)% for the quarter. As of February 14, 2025, our book value per common share is estimated to be between $8.90 and $9.26.(4)
“We notably improved our capital structure and reduced our cost of capital by funding the redemption of our Series B Preferred Stock in December with lower cost repurchase agreements. As a result, our debt-to-equity ratio increased to 6.7x at the end of the fourth quarter, up from 6.1x at the end of the third quarter. As of the end of the quarter, approximately 85% of our $5.4 billion investment portfolio was invested in Agency RMBS and 15% was invested in Agency CMBS. We maintained a sizeable balance of unrestricted cash and unencumbered investments totaling $389 million.
“Our earnings available for distribution(1) declined during the fourth quarter as we recognized a one-time charge associated with the redemption of our Series B Preferred Stock. In addition, we diversified the composition of our interest rate hedges, reducing our exposure to changes in swap spreads by increasing our allocation to U.S. Treasury futures. While this negatively impacted our effective net interest income(1) for the quarter, we stand to benefit from future normalization of the yield curve.
“In the near-term, we remain cautious on Agency RMBS as shifting expectations for monetary and fiscal policy may result in elevated interest rate volatility, reducing investor demand. Our long-term outlook for Agency RMBS is favorable, however, as we expect demand to improve in higher coupons given attractive valuations, an eventual decline in interest rate volatility, and a steeper yield curve. Lastly, we expect a gradual increase in Agency CMBS new issuance to be met with robust investor demand, as the sector continues to offer value relative to other fixed income investments due to its prepayment protection and attractive risk-adjusted return profiles.”
(1) Earnings available for distribution (and by calculation, earnings available for distribution per common share) and effective net interest income are non-Generally Accepted Accounting Principles (“GAAP”) financial measures. Refer to the section entitled “Non-GAAP Financial Measures” for important disclosures and reconciliations to the most comparable U.S. GAAP measures.
(2) Book value per common share as of December 31, 2024 and September 30, 2024 is calculated as total stockholders' equity less the liquidation preference of the Company's Series B Preferred Stock and Series C Preferred Stock ($0 and $180.2 million as of December 31, 2024, respectively, and $106.2 million and $181.9 million as of September 30, 2024, respectively), divided by total common shares outstanding.
(3) Economic return for the quarter ended December 31, 2024 is defined as the change in book value per common share from September 30, 2024 to December 31, 2024 of $(0.45); plus dividends declared of $0.40 per common share; divided by the September 30, 2024 book value per common share of $9.37. Economic return for the quarter ended September 30, 2024 is defined as the change in book value per common share from June 30, 2024 to September 30, 2024 of $0.10; plus dividends declared of $0.40 per common share; divided by the June 30, 2024 book value per common share of $9.27.
(4) Book value per common share as of February 14, 2025 is adjusted to exclude a pro rata portion of the current quarter’s common stock dividend (which for purposes of this calculation is assumed to be the same as the previous quarter) and is calculated as total stockholders' equity less the liquidation preference of the Company's Series C Preferred Stock ($178.8 million as of February 14, 2025), divided by total common shares outstanding of 61.7 million.
1

Key performance indicators for the quarters ended December 31, 2024 and September 30, 2024 are summarized in the table below.
($ in millions, except share amounts)Q4 ‘24Q3 ‘24Variance
Average Balances (1)
(unaudited)(unaudited)
Average earning assets (at amortized cost)$5,440.7 $5,566.3 ($125.6)
Average borrowings$4,865.6 $5,004.5 ($138.9)
Average total stockholders' equity$798.4 $845.7 ($47.3)
U.S. GAAP Financial Measures
Total interest income$76.1 $73.8 $2.3 
Total interest expense$62.4 $66.3 ($3.9)
Net interest income$13.7 $7.5 $6.2 
Total expenses$4.8 $4.7 $0.1 
Net income (loss) attributable to common stockholders($5.5)$35.3 ($40.8)
Average earning asset yields5.60 %5.31 %0.29 %
Average cost of funds5.13 %5.30 %(0.17)%
Average net interest rate margin0.47 %0.01 %0.46 %
Period-end weighted average asset yields (2)
5.42 %5.41 %0.01 %
Period-end weighted average cost of funds4.80 %5.15 %(0.35)%
Period-end weighted average net interest rate margin0.62 %0.26 %0.36 %
Book value per common share (3)
$8.92 $9.37 ($0.45)
Earnings (loss) per common share (basic)($0.09)$0.63 ($0.72)
Earnings (loss) per common share (diluted)($0.09)$0.63 ($0.72)
Debt-to-equity ratio6.7 x6.1 x0.6 x
Non-GAAP Financial Measures (4)
Earnings available for distribution$32.3 $38.3 ($6.0)
Effective interest expense$30.1 $25.4 $4.7 
Effective net interest income$46.0 $48.4 ($2.4)
Effective cost of funds2.47 %2.03 %0.44 %
Effective interest rate margin3.13 %3.28 %(0.15)%
Earnings available for distribution per common share$0.53 $0.68 ($0.15)
Economic debt-to-equity ratio6.7 x6.1 x0.6 x
(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 B Preferred Stock and Series C Preferred Stock ($0 and $180.2 million as of December 31, 2024, respectively, and $106.2 million and $181.9 million as of September 30, 2024, respectively), 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.
2

Portfolio Composition
The following table summarizes the Company's MBS portfolio as of December 31, 2024 and September 30, 2024.
As of  
December 31, 2024September 30, 2024
$ in thousandsFair ValuePercentage of PortfolioPeriod-end Weighted Average YieldFair ValuePercentage of PortfolioPeriod-end Weighted Average Yield
Agency RMBS:
30 year fixed-rate pass-through coupon:
4.0%369,321 6.8 %4.67 %577,105 9.8 %4.66 %
4.5%658,218 12.1 %4.95 %703,865 12.0 %4.95 %
5.0%836,197 15.3 %5.35 %1,147,475 19.5 %5.27 %
5.5%1,196,335 22.0 %5.59 %1,260,678 21.5 %5.59 %
6.0%1,481,454 27.2 %5.97 %1,418,691 24.2 %5.98 %
Total 30 year fixed-rate pass-through4,541,525 83.4 %5.50 %5,107,814 87.0 %5.43 %
Agency-CMO70,776 1.3 %9.20 %73,199 1.2 %9.91 %
Agency CMBS816,147 15.0 %4.59 %675,074 11.5 %4.64 %
Non-Agency CMBS9,836 0.2 %8.91 %9,936 0.2 %8.91 %
Non-Agency RMBS7,224 0.1 %11.13 %7,673 0.1 %9.31 %
Total MBS portfolio5,445,508 100.0 %5.42 %5,873,696 100.0 %5.41 %
The following table presents certain characteristics of the Company's borrowings as of December 31, 2024 and September 30, 2024.
As of
$ in thousandsDecember 31, 2024September 30, 2024
Amount OutstandingWeighted Average Interest RateWeighted Average Remaining Maturity (days)Amount OutstandingWeighted Average Interest RateWeighted Average Remaining Maturity (days)
Repurchase agreements - Agency RMBS4,112,219 4.80 %294,535,956 5.15 %33
Repurchase agreements - Agency CMBS781,739 4.77 %32648,929 5.16 %25
Total borrowings4,893,958 4.80 %295,184,885 5.15 %32
The tables below present certain characteristics of the Company's interest rate swaps whereby the Company pays interest at a fixed rate and receives floating interest based on the secured overnight financing rate (“SOFR”) as of December 31, 2024 and September 30, 2024.
$ in thousandsAs of December 31, 2024
MaturitiesNotional
Amount		Weighted Average Fixed Pay RateWeighted Average Floating Receive RateWeighted Average Years to Maturity
Less than 3 years1,730,000 1.06 %4.49 %2.2
3 to 5 years375,000 0.39 %4.49 %4.3
5 to 7 years750,000 0.57 %4.49 %5.8
Greater than 10 years410,000 1.83 %4.49 %18.9
Total3,265,000 0.97 %4.49 %5.3
3

$ in thousandsAs of September 30, 2024
MaturitiesNotional
Amount		Weighted Average Fixed Pay RateWeighted Average Floating Receive RateWeighted Average Years to Maturity
Less than 3 years1,730,000 1.93 %4.96 %2.1
3 to 5 years575,000 0.33 %4.96 %3.4
5 to 7 years950,000 0.54 %4.96 %5.8
7 to 10 years100,000 3.61 %4.96 %9.3
Greater than 10 years435,000 1.84 %4.96 %19.0
Total3,790,000 1.37 %4.96 %5.4
The table below presents certain characteristics of the Company's futures contracts as of December 31, 2024 and September 30, 2024.
As of December 31, 2024As of September 30, 2024
$ in thousandsNotional Amount - ShortNotional Amount - Short
10 year U.S. Treasury futures136,000 — 
Ultra 10 year U.S. Treasury futures1,057,000 490,000 
30 year U.S. Treasury futures209,000 — 
Total1,402,000 — 
The following table summarizes certain characteristics of the Company's TBAs accounted for as derivatives as of December 31, 2024. The Company did not have any TBAs outstanding as of September 30, 2024.
$ in thousandsAs of December 31, 2024
Notional AmountImplied Cost BasisImplied Market ValueNet Carrying Value - Asset (Liability)
5.5% TBA purchase contracts100,000 99,800 99,173 (627)
5.5% TBA sales contracts(100,000)(99,194)(99,173)21 
Net TBA derivatives— 606 — (606)
Capital Activities
Dividends
As previously announced on December 19, 2024, the Company declared a common stock dividend of $0.40 per share paid on January 24, 2025 to its stockholders of record as of the close of business on December 30, 2024. The Company declared a Series C Preferred Stock dividend on February 19, 2025 of $0.46875 per share payable on March 27, 2025 to its stockholders of record on March 5, 2025.
Issuances of Common Stock
The Company sold 993,837 shares of common stock for net proceeds of $8.3 million during the fourth quarter through its at-the-market program.
Redemption of Series B Preferred Stock
On December 27, 2024, the Company redeemed all outstanding shares of Series B Preferred Stock for a cash redemption price of $25.00 per share.
Repurchases of Series C Preferred Stock
During the three months ended December 31, 2024, the Company repurchased and retired 70,864 shares of Series C Preferred Stock for a total cost of $1.7 million.

4

About Invesco Mortgage Capital Inc.
Invesco Mortgage Capital Inc. is a real estate investment trust that primarily focuses on investing in, financing and managing mortgage-backed securities and other mortgage-related assets. Invesco Mortgage Capital Inc. 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, February 21, 2025, 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 March 7, 2025 by calling:

866-363-4045 (North America) or 1-203-369-0206 (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, 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, credit 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.



5

INVESCO MORTGAGE CAPITAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
 Three Months EndedYears Ended
$ in thousands, except share dataDecember 31, 2024September 30, 2024December 31, 2023December 31, 2024December 31, 2023
(unaudited)(unaudited)(unaudited)
Interest income76,110 73,825 62,082 286,546 277,929 
Interest expense62,431 66,315 53,780 249,719 228,229 
Net interest income13,679 7,510 8,302 36,827 49,700 
Other income (loss)
Gain (loss) on investments, net(187,714)165,168 165,340 (133,911)(107,280)
(Increase) decrease in provision for credit losses(236)80 (108)(458)(320)
Equity in earnings (losses) of unconsolidated ventures— — (5)(193)(1)
Gain (loss) on derivative instruments, net182,556 (127,345)(141,580)176,634 61,838 
Other investment income (loss), net2 — — 2 (66)
Total other income (loss)(5,392)37,903 23,647 42,074 (45,829)
Expenses
Management fee – related party3,172 2,888 3,053 11,866 12,290 
General and administrative1,609 1,805 1,697 7,153 7,440 
Total expenses4,781 4,693 4,750 19,019 19,730 
Net income (loss) 3,506 40,720 27,199 59,882 (15,859)
Dividends to preferred stockholders(5,444)(5,474)(5,679)(22,011)(23,153)
Gain on repurchase and retirement of preferred stock1 25 760 427 1,471 
Issuance and redemption costs of redeemed preferred stock(3,535)— — (3,535)— 
Net income (loss) attributable to common stockholders(5,472)35,271 22,280 34,763 (37,541)
Earnings (loss) per share:
Net income (loss) attributable to common stockholders
Basic(0.09)0.63 0.46 0.65 (0.85)
Diluted(0.09)0.63 0.46 0.65 (0.85)







6

INVESCO MORTGAGE CAPITAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

 
Three Months EndedYears Ended
$ in thousandsDecember 31, 2024September 30, 2024December 31, 2023December 31, 2024December 31, 2023
(unaudited)(unaudited)(unaudited)
Net income (loss)3,506 40,720 27,199 59,882 (15,859)
Other comprehensive income (loss):
Unrealized gain (loss) on mortgage-backed securities, net(412)(287)607 (1,051)(91)
Reclassification of unrealized loss on available-for-sale securities to (increase) decrease in provision for credit losses224 — 108 526 320 
Reclassification of amortization of net deferred (gain) loss on de-designated interest rate swaps to interest expense— — (900)— (10,405)
Currency translation adjustments on investment in unconsolidated venture— — — — (10)
Reclassification of currency translation loss on investment in unconsolidated venture to other investment income (loss), net— — — — 123 
Total other comprehensive income (loss)(188)(287)(185)(525)(10,063)
Comprehensive income (loss)3,318 40,433 27,014 59,357 (25,922)
Dividends to preferred stockholders(5,444)(5,474)(5,679)(22,011)(23,153)
Gain on repurchase and retirement of preferred stock1 25 760 427 1,471 
Issuance and redemption costs of redeemed preferred stock(3,535)— — (3,535)— 
Comprehensive income (loss) attributable to common stockholders(5,660)34,984 22,095 34,238 (47,604)



7

INVESCO MORTGAGE CAPITAL INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of
December 31, 2024December 31, 2023
$ in thousands, except share amounts
ASSETS
Mortgage-backed securities, at fair value (including pledged securities of $5,129,486 and $4,712,185, respectively; net of allowance for credit losses of $654 and $320, respectively)
5,445,508 5,045,306 
U.S. Treasury securities, at fair value— 11,214 
Cash and cash equivalents73,403 76,967 
Restricted cash137,478 121,670 
Due from counterparties580 — 
Investment related receivable24,870 26,604 
Derivative assets, at fair value5,033 939 
Other assets 1,162 1,509 
Total assets5,688,034 5,284,209 
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Repurchase agreements4,893,958 4,458,695 
Derivative liabilities, at fair value627 — 
Dividends payable24,692 19,384 
Accrued interest payable32,711 15,787 
Collateral held payable— 2,475 
Accounts payable and accrued expenses1,619 1,296 
Due to affiliate3,698 3,907 
Total liabilities4,957,305 4,501,544 
Commitments and contingencies (1)
Stockholders' equity:
Preferred Stock, par value $0.01 per share; 50,000,000 shares authorized:
7.75% Fixed-to-Floating Series B Cumulative Redeemable Preferred Stock: no shares and 4,385,997 shares issued and outstanding, respectively ($0 and $109,650 aggregate liquidation preference, respectively)
— 106,014 
7.50% Fixed-to-Floating Series C Cumulative Redeemable Preferred Stock: 7,206,659 and 7,545,439 shares issued and outstanding, respectively ($180,166 and $188,636 aggregate liquidation preference, respectively)
174,281 182,474 
Common Stock, par value $0.01 per share; 134,000,000 and 67,000,000 shares authorized, respectively; 61,729,693 and 48,460,626 shares issued and outstanding, respectively
617 484 
Additional paid in capital4,127,807 4,011,138 
Accumulated other comprehensive income173 698 
Retained earnings (distributions in excess of earnings)(3,572,149)(3,518,143)
Total stockholders’ equity730,729 782,665 
Total liabilities and stockholders' equity5,688,034 5,284,209 
(1)See Note 14 of the Company's consolidated financial statements filed in Part IV, Item 15 of the Company's Annual Report on Form 10-K for the year ended December 31, 2024.


8

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 MeasureMost 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 ratioDebt-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 on repurchase and retirement of preferred stock; foreign currency (gains) losses, net and amortization of net deferred (gain) loss on de-designated interest rate swaps.
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 (i) when analyzed in conjunction with its U.S. GAAP results, earnings available for distribution provides additional detail of its investment portfolio’s earnings capacity and (ii) gains and losses are not accounted for consistently under U.S. GAAP. Under U.S. GAAP, certain gains and losses are reflected in net income whereas other gains and losses are reflected in other comprehensive income. For example, a portion of the Company's mortgage-backed securities are classified as available-for-sale securities, and changes in the valuation of these securities are recorded in other comprehensive income on its 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 consolidated statements of operations. In addition, certain gains and losses represent one-time events. The Company may add and has added additional reconciling items to its earnings available for distribution calculation as appropriate.
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, determined without regard to the deduction for dividends paid and excluding net capital gains. The Company has historically distributed at least 100% of its REIT taxable income. 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 the Company's board of directors uses to determine the amount, if any, and the payment date 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.
9

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 EndedYears Ended
December 31,
2024		September 30,
2024		December 31,
2023		December 31,
2024		December 31,
2023
$ in thousands, except per share data
Net income (loss) attributable to common stockholders(5,472)35,271 22,280 34,763 (37,541)
Adjustments:
(Gain) loss on investments, net187,714 (165,168)(165,340)133,911 107,280 
Realized (gain) loss on derivative instruments, net(1)
(157,864)172,797 199,137 (11,405)179,526 
Unrealized (gain) loss on derivative instruments, net(1)
7,629 (4,569)(8,576)(3,467)(2,356)
TBA dollar roll income(2)
249 39 — 1,366 697 
(Gain) on repurchase and retirement of preferred stock(1)(25)(760)(427)(1,471)
Foreign currency (gains) losses, net(3)
(2)— — (2)66 
Amortization of net deferred (gain) loss on de-designated interest rate swaps(4)
— — (900)— (10,405)
Subtotal37,725 3,074 23,561 119,976 273,337 
Earnings available for distribution32,253 38,345 45,841 154,739 235,796 
Basic income (loss) per common share(0.09)0.63 0.46 0.65 (0.85)
Earnings available for distribution per common share(5)
0.53 0.68 0.95 2.88 5.35 

(1) U.S. GAAP gain (loss) on derivative instruments, net on the consolidated statements of operations includes the following components.
 Three Months EndedYears Ended
December 31,
2024		September 30,
2024		December 31,
2023		December 31,
2024		December 31,
2023
$ in thousands
Realized gain (loss) on derivative instruments, net157,864 (172,797)(199,137)11,405 (179,526)
Unrealized gain (loss) on derivative instruments, net(7,629)4,569 8,576 3,467 2,356 
Contractual net interest income (expense) on interest rate swaps32,321 40,883 48,981 161,762 239,008 
Gain (loss) on derivative instruments, net182,556 (127,345)(141,580)176,634 61,838 

(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 versus 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 consolidated statements of operations.

(3)     Foreign currency gains (losses), net includes foreign currency transaction gains and losses and the reclassification of currency translation adjustments that were previously recorded in accumulated other comprehensive income and is included in other investment income (loss), net on the consolidated statements of operations.

10

(4)    U.S. GAAP interest expense on the consolidated statements of operations includes the following components.
 Three Months EndedYears Ended
December 31,
2024		September 30,
2024		December 31,
2023		December 31,
2024		December 31,
2023
$ in thousands
Interest expense on repurchase agreement borrowings62,431 66,315 54,680 249,719 238,634 
Amortization of net deferred (gain) loss on de-designated interest rate swaps— — (900)— (10,405)
Total interest expense62,431 66,315 53,780 249,719 228,229 

(5)    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.

Three Months Ended Years Ended
$ in thousandsDecember 31,
2024		September 30,
2024		December 31,
2023		December 31,
2024		December 31,
2023
Effective net interest income (1)
46,000 48,393 56,383 198,589 278,303 
TBA dollar roll income249 39 — 1,366 697 
Equity in earnings (losses) of unconsolidated ventures— — (5)(193)(1)
(Increase) decrease in provision for credit losses(236)80 (108)(458)(320)
Total expenses(4,781)(4,693)(4,750)(19,019)(19,730)
Subtotal41,232 43,819 51,520 180,285 258,949 
Dividends to preferred stockholders(5,444)(5,474)(5,679)(22,011)(23,153)
Issuance and redemption costs of redeemed preferred stock(3,535)— — (3,535)— 
Earnings available for distribution32,253 38,345 45,841 154,739 235,796 
(1)See below for a reconciliation of net interest income to effective net interest income, a non-GAAP measure.

11

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 and the amortization of net deferred gains (losses) on de-designated interest rate swaps that is recorded as interest expense. 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 excludes the amortization of net deferred gains (losses) on de-designated interest rate swaps from its calculation of effective interest expense because the Company does not consider the amortization a current component of its borrowing costs.
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 and amortization of net deferred gains (losses) on de-designated interest rate swaps that is recorded as interest expense.
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,
2024		September 30,
2024		December 31,
2023
$ in thousandsReconciliationCost of Funds / Effective Cost of FundsReconciliationCost of Funds / Effective Cost of FundsReconciliationCost of Funds / Effective Cost of Funds
Total interest expense62,431 5.13 %66,315 5.30 %53,780 5.76 %
Add: Amortization of net deferred gain (loss) on de-designated interest rate swaps
— — %— — %900 0.09 %
Less: Contractual net interest expense (income) on interest rate swaps recorded as gain (loss) on derivative instruments, net(32,321)(2.66)%(40,883)(3.27)%(48,981)(5.24)%
Effective interest expense
30,110 2.47 %25,432 2.03 %5,699 0.61 %
Years Ended December 31,
 20242023
$ in thousandsReconciliationCost of Funds / Effective Cost of FundsReconciliationCost of Funds / Effective Cost of Funds
Total interest expense249,719 5.39 %228,229 5.03 %
Add: Amortization of net deferred gain (loss) on de-designated interest rate swaps
— — %10,405 0.23 %
Less: Contractual net interest expense (income) on interest rate swaps recorded as gain (loss) on derivative instruments, net(161,762)(3.49)%(239,008)(5.26)%
Effective interest expense
87,957 1.90 %(374)— %

12

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,
2024		September 30,
2024		December 31,
2023
$ in thousandsReconciliationNet Interest Rate Margin / Effective Interest Rate MarginReconciliationNet Interest Rate Margin / Effective Interest Rate MarginReconciliationNet Interest Rate Margin / Effective Interest Rate Margin
Net interest income13,679 0.47 %7,510 0.01 %8,302 (0.12)%
Less: Amortization of net deferred (gain) loss on de-designated interest rate swaps— — %— — %(900)(0.09)%
Add: Contractual net interest income (expense) on interest rate swaps recorded as gain (loss) on derivative instruments, net32,321 2.66 %40,883 3.27 %48,981 5.24 %
Effective net interest income
46,000 3.13 %48,393 3.28 %56,383 5.03 %
Years Ended December 31,
 20242023
$ in thousandsReconciliationNet Interest Rate Margin / Effective Interest Rate MarginReconciliationNet Interest Rate Margin / Effective Interest Rate Margin
Net interest income36,827 0.11 %49,700 0.41 %
Less: Amortization of net deferred (gain) loss on de-designated interest rate swaps— — %(10,405)(0.23)%
Add: Contractual net interest income (expense) on interest rate swaps recorded as gain (loss) on derivative instruments, net161,762 3.49 %239,008 5.26 %
Effective net interest income
198,589 3.60 %278,303 5.44 %
13

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, 2024 and September 30, 2024. 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 its 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 thousandsDecember 31, 2024September 30, 2024
Repurchase agreements4,893,958 5,184,885 
Total stockholders' equity730,729 857,003 
Debt-to-equity ratio (1)
6.7 6.1 
Economic debt-to-equity ratio (2)
6.7 6.1 
(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 ($606,000 as of December 31, 2024; none as of September 30, 2024) 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 EndedYears Ended
$ in thousandsDecember 31, 2024September 30, 2024December 31, 2023December 31, 2024December 31, 2023
Average earning assets (1)
5,440,6625,566,2994,401,4755,208,2045,106,473
Average earning asset yields (2)
5.60 %5.31 %5.64 %5.50 %5.44 %
Average borrowings (3)
4,865,5825,004,5043,746,4324,637,0864,540,252
Average cost of funds (4)
5.13 %5.30 %5.76 %5.39 %5.03 %
(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, including amortization of net deferred gain (loss) on de-designated interest rate swaps, by average borrowings.

14
v3.25.0.1
Cover
Feb. 20, 2025
Entity Information [Line Items]  
Document Type 8-K
Document Period End Date Feb. 20, 2025
Entity Registrant Name Invesco Mortgage Capital Inc.
Entity Central Index Key 0001437071
Amendment Flag false
Entity Incorporation, State or Country Code MD
Entity File Number 001-34385
Entity Tax Identification Number 26-2749336
Entity Address, Address Line One 1331 Spring Street, N.W. Suite 2500
Entity Address, City or Town Atlanta,
Entity Address, State or Province GA
Entity Address, Postal Zip Code 30309
City Area Code 404
Local Phone Number 892-0896
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Common Stock, par value $0.01 per share  
Entity Information [Line Items]  
Title of 12(b) Security Common Stock, par value $0.01 per share
Trading Symbol IVR
Security Exchange Name NYSE
7.50% Fixed-to-Floating Series C Cumulative Redeemable Preferred Stock  
Entity Information [Line Items]  
Title of 12(b) Security 7.50% Fixed-to-Floating Series C Cumulative Redeemable Preferred Stock
Trading Symbol IVR PrC
Security Exchange Name NYSE
Invesco Mortgage Capital (NYSE:IVR-C)
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