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Mar 31, 2023
Invesco Mortgage Capital Q1 2023 Earnings Report
Announced financial results with net income per share of $0.39 and earnings available for distribution per common share of $1.50.
Key Takeaways
Invesco Mortgage Capital Inc. reported financial results for the quarter ended March 31, 2023. The company's book value per common share ended the quarter at $12.61, representing a modest decline of 1.4% from year end, and when combined with our $0.40 common dividend produced an economic return of 1.7% for the quarter. Earnings available for distribution remained strong at $1.50 per common share.
Net income per common share was $0.39, compared to $0.84 in Q4 2022.
Earnings available for distribution per common share was $1.50, compared to $1.46 in Q4 2022.
Common stock dividend was $0.40 per common share, compared to $0.65 in Q4 2022.
Book value per common share was $12.61, compared to $12.79 at Q4 2022.
Forward Guidance
Invesco Mortgage Capital anticipates compelling opportunities for new investments in Agency RMBS due to historically attractive valuations and reduced demand from the Federal Reserve and commercial banks. The conclusion of the Federal Reserve’s tightening cycle is expected to reduce interest rate volatility, providing a tailwind for their target assets.
Positive Outlook
- Agency RMBS are at historically attractive valuations.
- Reduced demand from the Federal Reserve and commercial banks will provide compelling opportunities for new investments.
- The conclusion of the Federal Reserve’s tightening cycle will result in a reduction in interest rate volatility.
- Hedging strategy benefits from low-cost, pay-fixed swaps with a weighted average maturity of over seven years.
- Company retains capital and enhance book value by continuing to invest in Agency RMBS
Challenges Ahead
- Volatile environment for Agency residential mortgage-backed securities (“Agency RMBS”) continued during the first quarter of 2023.
- Strong performance in January was more than offset by sharp underperformance in February and March amidst the slowing disinflationary trend in economic data and turmoil in the regional banking sector.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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