The following is a summary of the Invesco Mortgage Capital Inc. (IVR) Q4 2023 Earnings Call Transcript:
Financial Performance:
Invesco Mortgage Capital's book value per common share for Q4 2023 stood at $10, a 0.7% increase from September 30th.
The company reported an economic return of 4.7% for the quarter, including a $0.40 common stock dividend.
Debt-to-equity ratio declined to 5.7 times from 6.4 at the end of Q3.
The firm's investment portfolio by the end of the quarter stood at $5.1 billion, largely invested in agency mortgages.
Earnings available for distribution per common share was $0.95, down from $1.51 for the preceding quarter due to falling interest income on investments and interest rate swaps.
As of February 16th, the estimated book value per common share was between $9.50 and $9.88.
Business Progress:
In Q4 2023, Invesco Mortgage Capital decreased leverage to reduce risk amidst growing interest rate volatility.
The company expects a favourable environment for agency mortgages in 2024 owing to a possible drop in interest rate volatility, favourable valuations, and funding conditions.
Invesco has been slowly repurchasing preferred stocks in the open market.
The company signaled plans of making capital through the ATM to balance the capital structure.
The firm's portfolio decreased by 7% quarter-over-quarter owing to increased interest rate volatility.
To lessen the risk, invested in specific pool securities were net sold, totalling approximately $1.7 billion in October.
Invesco is poised to navigate mortgage market volatility in the future and capitalize on wide Agency RMBS spreads.
The company ended Q4 with a hedge ratio of 91% and is positioned to raise leverage if market conditions warrant, given its current liquidity position.
More details: Invesco Mortgage Capital Inc IR
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