Invesco Mortage Capital (IVR) Tops Q1 EPS by 2c

May 5, 2021 5:54 PM EDT

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Invesco Mortage Capital (NYSE: IVR) reported Q1 EPS of $0.11, $0.02 better than the analyst estimate of $0.09.

Update from John Anzalone, Chief Executive Officer

"We are pleased to announce core earnings of $0.11 per common share for the first quarter of 2021. The increase in our core earnings was largely a result of the successful deployment of $161.0 million in proceeds from common equity capital raises during the quarter into Agency residential mortgage-backed securities ("Agency RMBS") investments, in addition to an attractive reinvestment environment in the latter half of the quarter. Our higher core earnings covered the increase in our common stock dividend to $0.09 per common share. At quarter-end, almost all of our $9.1 billion investment portfolio was invested in Agency RMBS, and we maintained a sizeable balance of unrestricted cash and unencumbered investments totaling $692.9 million.

"Despite continued strong demand from the Federal Reserve and banks, lower coupon Agency RMBS underperformed during the quarter as volatility increased and hedge adjusted returns became less attractive. The higher interest rate environment and expectations for slowing prepayment speeds led to a repricing of premiums on specified pool Agency RMBS. These developments resulted in a 5.4% decrease in book value per common share and a (3.1%) economic return for the quarter. As we move into the second quarter, slowing prepayment speeds and persistent demand from the Federal Reserve are expected to provide support for Agency RMBS valuations."

For earnings history and earnings-related data on Invesco Mortage Capital (IVR) click here.

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