In Q1 2026, Invesco Mortgage Capital recorded a net loss of $23.1 million, or $0.28 per share, compared to net income of $48.2 million, or $0.68 per share in Q4 2025. Earnings available for distribution per share dipped to $0.55 versus $0.56, while monthly dividends remained at $0.36 per share. Book value per share fell 7.3% to $8.08, producing an economic return of -3.2% against +8.0% in the prior quarter. Debt-to-equity improved to 6.1x, though economic debt-to-equity rose to 7.5x due to the book-value decline.

At March 31, the firm’s $7.3 billion investment portfolio comprised $5.2 billion in Agency RMBS, $1.2 billion in Agency TBAs and $0.9 billion in Agency CMBS. Unrestricted cash and unencumbered investments totaled $493.1 million, bolstering liquidity amid volatility. Average earning assets increased to $5.95 billion, driving net interest income up to $27.0 million from $21.3 million sequentially.

Management pointed to rising geopolitical tensions, higher energy prices and renewed inflation concerns as drivers of interest rate volatility that widened RMBS spreads and pressured returns. While Agency CMBS delivered stable yields, RMBS underperformance and swap-spread tightening outweighed gains. Entering Q2, improved risk sentiment, manageable RMBS issuance and Basel capital proposal benefits are expected to underpin demand and present attractive spread entry points.