Q2 2024 Invesco Mortgage Capital Inc Earnings Call Transcript
Key Points
- Earnings available for distribution (EAD) per common share remained stable at $0.86, comfortably above the $0.40 dividend.
- The company maintains a sizable balance of unrestricted cash and unencumbered investments totaling $446 million.
- Invesco Mortgage Capital Inc (IVR) has a positive outlook for agency mortgages, expecting benefits from attractive valuations, favorable funding, and strong liquidity.
- The company has strategically rotated a portion of lower coupon specified pools into agency CMBS, enhancing portfolio diversification.
- Financing capacity for agency CMBS has been robust, with attractive funding levels from numerous counterparties.
- The second quarter saw a negative economic return of 4.1%, driven by an 8% decline in book value.
- Interest rate volatility led to the underperformance of agency mortgages compared to treasury hedges.
- Debt to equity ratio increased to 5.9 times from 5.6 times at the end of March, indicating higher leverage.
- The market remains volatile with increased uncertainty about monetary policy and the economy, affecting interest rate volatility.
- Specified pool pay-ups fell in the second quarter due to rising interest rates, although there was partial recovery later.
Good morning and thank you for standing by. Welcome to the Invesco Mortgage Capital second-quarter 2024 earnings call. (Operator Instructions) As a reminder, todayâs call is being recorded.
Now I would like to turn the call over to Greg Seals, Investor Relations. Mr. Seals, you may begin.
Thank you, operator. And thanks to all of you joining us on Invesco Mortgage Capital's quarterly earnings call.
In addition to today's press release, we have provided a presentation that covers the topics we plan to address today. The press release and presentation are available on our website, invescomortgagecapital.com. This information can be found by going to the Investor Relations section of our website.
Our presentation today will include forward-looking statements and certain non-GAAP financial measures. Please review the disclosures on slide 2 of the presentation regarding these statements and measures as well as the appendix for the appropriate reconciliations to GAAP. Finally,
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