Q3 FY2026
Filed Oct 29, 2026Invesco Mortgage Capital Inc. reported a Q3 2026 net loss attributable to common stockholders of ($98.8) million, with book value per common share declining to $6.74 and economic return of (11.6)%.
A substantial loss on investments and wider Agency RMBS and Agency CMBS spreads drove a ($98.8) million common-stockholder loss, a 16.1% decline in book value per common share, and an (11.6)% economic return, despite higher effective net interest income and earnings available for distribution.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 total interest incomeGAAP | $99M | $13.6 million | – |
| Q3 2026 total interest expenseGAAP | $65M | $9.7 million | – |
| Q3 2026 net interest incomeGAAP | $33.9M | $3.8 million | – |
| Q3 2026 gain (loss) on investments, netGAAP | ($402,062) thousand | – | – |
| Q3 2026 gain (loss) on derivative instruments, netGAAP | $277.7M | – | – |
| Q3 2026 total other income (loss)GAAP | ($124,380) thousand | – | – |
| Q3 2026 total expensesGAAP | $5.2M | ($0.3) million | – |
| Q3 2026 management fee – related partyGAAP | $3.63M | – | – |
| Q3 2026 general and administrative expenseGAAP | $1.56M | – | – |
| Q3 2026 net income (loss)GAAP | ($95,637) thousand | – | – |
| Q3 2026 net income (loss) attributable to common stockholdersGAAP | ($98.8) million | ($130.6) million | – |
| Q3 2026 basic earnings (loss) per common shareGAAP | ($0.92) | ($1.26) | – |
| Q3 2026 diluted earnings (loss) per common shareGAAP | ($0.92) | ($1.26) | – |
| Q3 2026 average earning assetsGAAP | $7.57B | $943.3 million | – |
| Q3 2026 average earning asset yieldsGAAP | 5.23 % | 0.08 % | – |
| Q3 2026 average borrowingsGAAP | $6.75B | $827.0 million | – |
| Q3 2026 average cost of fundsGAAP | 3.85 % | 0.12 % | – |
| Q3 2026 average net interest rate marginGAAP | 1.38 % | (0.04) % | – |
| Q3 2026 period-end weighted average asset yieldsGAAP | 5.28 % | (0.01) % | – |
| Q3 2026 period-end weighted average cost of fundsGAAP | 3.97 % | 0.21 % | – |
| Q3 2026 period-end weighted average net interest rate marginGAAP | 1.31 % | (0.22) % | – |
| Q3 2026 book value per common shareother | $6.74 | ($1.29) | – |
| Q3 2026 economic returnother | (11.6)% | – | – |
| September 30, 2026 debt-to-equity ratioGAAP | 7.6 x | 1.3 x | – |
| Q3 2026 earnings available for distributionnon-GAAP | $50.3M | $3.2 million | – |
| Q3 2026 earnings available for distribution per common sharenon-GAAP | $0.47 | ($0.03) | – |
| Q3 2026 effective interest expensenon-GAAP | $45.1M | $10.5 million | – |
| Q3 2026 effective net interest incomenon-GAAP | $53.9M | $3.0 million | – |
| Q3 2026 effective cost of fundsnon-GAAP | 2.67 % | 0.34 % | – |
| Q3 2026 effective interest rate marginnon-GAAP | 2.56 % | (0.26) % | – |
| September 30, 2026 economic debt-to-equity rationon-GAAP | 8.3 x | 0.8 x | – |
| Nine months ended September 30, 2026 net interest incomeGAAP | $91.07M | – | – |
| Nine months ended September 30, 2026 net income (loss) attributable to common stockholdersGAAP | ($90,076) thousand | – | – |
| Nine months ended September 30, 2026 basic earnings (loss) per common shareGAAP | ($0.95) | – | – |
| Nine months ended September 30, 2026 diluted earnings (loss) per common shareGAAP | ($0.95) | – | – |
| Nine months ended September 30, 2026 earnings available for distributionnon-GAAP | $142.1M | – | – |
| Nine months ended September 30, 2026 earnings available for distribution per common sharenon-GAAP | $1.50 | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Capital returns
- During the three months ended September 30, 2026, the Company declared monthly common stock dividends totaling $0.36 per share.
- During the three months ended September 30, 2026, the Company declared a Series C Preferred Stock dividend of $0.46875 per share.
- During the three months ended September 30, 2026, the Company issued 6,706,923 shares of common stock for net proceeds of $51.0 million through its at-the-market program.
- During the three months ended September 30, 2026, the Company repurchased and retired 17,415 shares of Series C Preferred Stock with a carrying value of $421,000.
What drove it
- The investment portfolio totaled $8.0 billion at quarter end, consisting of $6.6 billion of Agency RMBS, $0.7 billion of Agency TBA, and $0.7 billion of Agency CMBS.
- Agency RMBS spreads widened materially and Agency CMBS spreads widened modestly as interest-rate volatility increased and investor risk appetite weakened.
- The Company reduced its Agency CMBS allocation and redeployed proceeds into Agency RMBS opportunities during the latter part of the quarter.
- Total investment portfolio including TBAs was $7,966,890 thousand as of September 30, 2026, compared with $8,150,931 thousand as of June 30, 2026.
- Agency RMBS represented $6,625,817 thousand, or 83.2 %, of the portfolio as of September 30, 2026, compared with $5,983,629 thousand, or 73.4 %, as of June 30, 2026.
- Agency CMBS represented $681,179 thousand, or 8.5 %, of the portfolio as of September 30, 2026, compared with $901,894 thousand, or 11.1 %, as of June 30, 2026.
- Total Agency TBAs were $659,894 thousand, or 8.3 %, as of September 30, 2026, compared with $1,201,022 thousand, or 14.7 %, as of June 30, 2026.
Concerns
- Net loss attributable to common stockholders was ($98.8) million, compared with net income attributable to common stockholders of $31.8 million in Q2 2026.
- Net loss on investments was ($402,062) thousand in Q3 2026.
- Book value per common share declined by 16.1% to $6.74 at quarter end.
- Period-end weighted average net interest rate margin declined to 1.31 % from 1.53 % in Q2 2026.
- Effective interest rate margin declined to 2.56 % from 2.82 % in Q2 2026.
- Economic debt-to-equity ratio increased to 8.3 x from 7.5 x as of June 30, 2026.
- The Company cited uncertainty surrounding inflation, monetary policy, and geopolitical developments as elevated.
What to watch
- Agency RMBS and Agency CMBS spread movements, interest-rate volatility, and their effect on book value.
- Whether Agency RMBS redeployment and changes in Agency CMBS and TBA allocations affect portfolio yield and earnings available for distribution.
- Funding costs and leverage after period-end weighted average cost of funds increased to 3.97 % and economic debt-to-equity ratio reached 8.3 x.
- The sustainability of monthly common dividends totaling $0.36 per share relative to earnings available for distribution per common share of $0.47.
- Management's outlook for increased participation by GSEs, banks, money managers, and other institutional investors in Agency RMBS.
Balance sheet and cash flow
- Cash and cash equivalents were $215,078 thousand as of September 30, 2026, compared with $56,040 thousand as of December 31, 2025.
- Restricted cash was $211,453 thousand as of September 30, 2026, compared with $110,391 thousand as of December 31, 2025.
- Total assets were $7,794,803 thousand as of September 30, 2026, compared with $6,475,894 thousand as of December 31, 2025.
- Repurchase agreements were $6,842,947 thousand as of September 30, 2026, compared with $5,619,255 thousand as of December 31, 2025.
- Total stockholders' equity was $903,368 thousand as of September 30, 2026, compared with $797,544 thousand as of December 31, 2025.
- Unrestricted cash and unencumbered investments totaled $401.3 million at quarter end.
- No operating cash flow, investing cash flow, financing cash flow, or free cash flow was reported.
Analysis
The third quarter was defined by a sharp deterioration in portfolio marks rather than a loss of recurring income capacity. Net loss attributable to common stockholders was ($98.8) million, compared with net income attributable to common stockholders of $31.8 million in Q2 2026. The principal driver was a ($402,062) thousand loss on investments, partially offset by $277,682 thousand of gain on derivative instruments. Management attributed the pressure to materially wider Agency RMBS spreads, modestly wider Agency CMBS spreads, and higher interest-rate volatility.
Book value per common share declined by 16.1% to $6.74 from $8.03 as of June 30, 2026. Including monthly common dividends totaling $0.36 per share, the Company reported an economic return of (11.6)% for the quarter, compared with 3.8% in Q2 2026. This book-value movement is the central reported measure of the impact from spread widening on the mortgage investment portfolio.
Underlying interest income expanded with the balance sheet. Total interest income increased to $99.0 million from $85.4 million, while net interest income increased to $33.9 million from $30.1 million. Average earning assets increased to $7,574.3 million from $6,631.0 million and average borrowings rose to $6,754.7 million from $5,927.7 million. However, the average net interest rate margin narrowed to 1.38 % from 1.42 %, and effective interest rate margin declined to 2.56 % from 2.82 %, as funding costs increased.
Earnings available for distribution increased to $50.3 million from $47.1 million, although earnings available for distribution per common share declined to $0.47 from $0.50. The Company issued 6,706,923 common shares for net proceeds of $51.0 million through its at-the-market program. It also maintained monthly common dividends totaling $0.36 per share. The reported per-share earnings available for distribution exceeded the declared common dividend total, while the filing cautions that this non-GAAP measure is not an indication of taxable income or a guaranty of dividends.
Portfolio positioning shifted toward Agency RMBS. Agency RMBS increased to $6,625,817 thousand, or 83.2 % of the portfolio, while Agency CMBS declined to $681,179 thousand, or 8.5 %, and total Agency TBAs declined to $659,894 thousand, or 8.3 %. Leverage rose, with debt-to-equity at 7.6 x and economic debt-to-equity at 8.3 x. Management described financing markets as orderly, cited $401.3 million of unrestricted cash and unencumbered investments, and expressed a constructive outlook for Agency RMBS and Agency CMBS following recent spread widening. No quantitative forward guidance was provided.
Management, verbatim
Against this backdrop, our portfolio generated negative returns relative to Treasuries, although the impact was partially offset by improvement in swap spreads.
Kevin Collins, Chief Executive Officer
Book value declined by 16.1% to $6.74 at quarter end, and when combined with our monthly dividends, resulted in an economic return of (11.6)% for the quarter.
Kevin Collins, Chief Executive Officer
Our outlook for both Agency RMBS and Agency CMBS remains constructive.
Kevin Collins, Chief Executive Officer
Not in the filing
stated, not guessed- Total revenue was not reported.
- Segment revenue and segment operating results were not reported.
- Gross profit and gross margin were not reported.
- Operating income and operating margin were not reported.
- Cash flow from operating activities, investing activities, financing activities, and free cash flow were not reported.
- Quantitative forward revenue, earnings, margin, expense, tax-rate, dividend, portfolio, leverage, or other financial guidance was not provided.
- Prior outlook was not provided.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.