Market Overview

Invesco Mortgage Capital Inc. Reports First Quarter 2018 Financial Results

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Invesco Mortgage Capital Inc. Reports First Quarter 2018 Financial Results

The Company continues to benefit from a diversified strategy

Basic EPS of $0.37, Core EPS* of $0.45

Q1 common stock dividend maintained at $0.42 per share

PR Newswire

ATLANTA, May 3, 2018 /PRNewswire/ -- Invesco Mortgage Capital Inc. (NYSE:IVR) (the "Company") today announced financial results for the quarter ended March 31, 2018.

Financial Summary:

  • Q1 2018 net income attributable to common stockholders of $41.5 million or $0.37 basic earnings per common share ("EPS") compared to $137.4 million or $1.23 basic EPS in Q4 2017
  • Q1 2018 core earnings* of $50.4 million or core EPS of $0.45 compared to $52.5 million or core EPS of $0.47 in Q4 2017
  • Q1 2018 book value per diluted common share** of $17.16 compared to $18.35 at Q4 2017
  • Economic return*** of (4.2)% for the quarter
  • Q1 2018 common stock dividend maintained at $0.42 per share

"We are pleased to report another quarter of strong core earnings that exceed our first quarter common stock dividend," said John Anzalone, Chief Executive Officer. "While higher interest rates and increased asset volatility during the quarter presented challenges, our seasoned residential and commercial real estate assets and disciplined risk management served us well. We continue to believe we are well positioned to capitalize on emerging investment opportunities to the extent further volatility creates compelling valuations."

* Core earnings (and by calculation, core earnings per common share) are non-Generally Accepted Accounting Principles ("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.

** Book value per diluted common share is calculated as total equity less the liquidation preference of our Series A Preferred Stock ($140.0 million), Series B Preferred Stock ($155.0 million) and Series C Preferred Stock ($287.5 million); divided by total common shares outstanding plus Operating Partnership Units convertible into shares of common stock (1,425,000 shares).

*** Economic return for the quarter ended March 31, 2018 is defined as the change in book value per diluted common share from December 31, 2017 to March 31, 2018 of -$1.19; plus dividends declared of $0.42 per common share; divided by the December 31, 2017 book value per diluted common share of $18.35.

Key performance indicators for the quarters ended March 31, 2018 and December 31, 2017 are summarized in the table below.

($ in millions, except share amounts)

Q1 '18

Q4 '17

Variance

Average Balances

(unaudited)

(unaudited)


Average earning assets (at amortized costs)

$18,131.0


$18,313.2


-$182.2


Average borrowings

$15,652.3


$15,909.6


-$257.3


Average equity

$2,119.0


$2,206.9


-$87.9






U.S. GAAP Financial Measures




Total interest income

$153.2


$153.0


$0.2


Total interest expense

$68.1


$59.9


$8.2


Net interest income

$85.1


$93.0


-$7.9


Total expenses

$12.0


$12.0


$0.0


Net income (loss) attributable to common stockholders

$41.5


$137.4


-$95.9






Average earning asset yields

3.38

%

3.34

%

0.04

%

Cost of funds

1.74

%

1.51

%

0.23

%

Net interest rate margin

1.64

%

1.83

%

-0.19

%





Book value per diluted common share*

$17.16


$18.35


-$1.19


Earnings (loss) per common share (basic)

$0.37


$1.23


-$0.86


Earnings (loss) per common share (diluted)

$0.37


$1.18


-$0.81


Debt-to-equity ratio

6.2

x

6.0

x

0.2

x





Non-GAAP Financial Measures**




Core earnings

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