INVESCO MORTGAGE CAPITAL INC

and recorded. Now I would like to turn the call over to Greg Seals in Investor Relations. Mr. Seals, you may begin the call.

Thanks, Operator, and to all of you joining us on Invesco Mortgage Capital's quarterly earnings call. In addition to today's press release, we have provided a presentation that covers the topics we plan to address today. The press release and presentation are available on our website, InvescoMortgageCapital.com. This information can be found by going to the investor relations section of the website. Our presentation today will include forward-looking statements and certain non-GAAP financial measures. Please review the disclosures on slide two of the presentation regarding these statements and measures, as well as the appendix for the appropriate reconciliations to GAAP. Finally, Invesco Mortgage Capital is not responsible for and does not edit or guarantee the accuracy of our earnings teleconference transcripts provided by third parties. The only authorized webcasts are located on our website. Again, welcome. Thank you for joining us today. I'll now turn the call over to IVR's CEO, John Angelo.

Good morning, and welcome to Invesco Mortgage Capital's fourth quarter earnings call. I'll provide some brief comments before turning the call over to our chief investment officer, Brian Norris, to discuss our portfolio in more detail. Also joining us on the call this morning for Q&A Our President, Kevin Collins, our COO, Dave Weil, and our CFO, Mark Gregson. Long-term treasury yields ended the quarter sharply higher as the disinflationary trend stalled and market participants dealt with fresh uncertainty regarding the impacts of future monetary, fiscal, and trade policies. Expectations for future inflation reflected in TIPS breakevens rose over the course of the quarter with the two-year breakeven ending the year at 250 2.54%, up from 1.77% in September. This trend has continued into this year, as the two-year breakeven is now comfortably above 3%. These uncertainties, combined with a robust labor market, led to a recalibration of the market's expectations for future monetary policy. Following 100 basis points of reductions in the federal funds target rate over the course of the third and fourth quarters, Fed funds futures markets expectations as of year end 2024 reflected only one to two additional cuts in the target rate through the end of 25. This compares to an expectation of 10 cuts through the end of 25 priced in as recently as mid-September. Against this macroeconomic backdrop, agency RMES underperformed treasuries during the fourth quarter. Underperformers during the quarter primarily took place in lower coupons. as a sharp move higher interest rates, limited demand for discount securities. Although industry volatility moved higher during the quarter, supply and demand technicals for higher coupon agency mortgages were supported as supply was limited while bank and overseas demand improved. Couponing speeds largely remained at low levels given limited housing activity and elevated mortgage rates. Trading was on higher coupon specified pool collateral declined modestly given the increase in interest rates. remained relatively well supported as implied financing via the dollar world market for PBA investments remained largely unattractive throughout the quarter. Agency CMBS risk premiums contracted notably during the fourth quarter given increased optimism regarding renewed bank demand for stable cash flow profiles amidst elevated interest rate volatility and relatively modest new issuance. Against this backdrop, The value for common share decreased 4.8% to $8.92 per share, and when combined with our 40 cent per share common stock dividend, resulted in an economic return of a negative half a percent for the quarter. As of 2025, agency mortgage performance has been modestly positive, with interest rate volatility stabilizing as the market's outlook for future monetary policy has coalesced around one or two additional cuts from the FOMC this year. As of February 14, 2025, we estimate our book value for common share to be between $8.90 and $9.26 per share. We notably improved our capital structure and reduced our cost of capital by funding the redemption of our Series B preferred stock in December, primarily with lower cost repurchase agreements. As a result, our debt-to-equity ratio increased to 6.7 times at the end of the fourth quarter, up from 6.1 times at the end of the third quarter. At the end of the year, approximately 85% of our $5.4 billion investment portfolio was invested in agency mortgages, and 15% was invested in agency CMVFs. And we maintained a sizable balance of unrestricted cash and unencumbered investments totaling $389 million. Our earnings available for distribution declined from 68 cents in the third quarter to 53 cents in the fourth quarter, as we recognized a one-time charge associated with the redemption of our Series B preferred stock. In addition, we diversified the composition of our interest rate hedges, reducing our exposure to changes in swap spreads by increasing our allocation to U.S. Treasury futures. While this negatively impacted our effective net interest income for the quarter, we stand to benefit from future normalization of the yield curve. In the near term, we remain cautious on agency mortgages as shifting expectations for monetary and fiscal policy may result in elevated interest rate volatility, reducing investor demand. Our long-term outlook for agency mortgages is favorable, however, as we expect demand to improve in higher coupons given attractive valuations and eventual decline in interest rate volatility and a steeper yield curve. Lastly, we expect a gradual increase in agency CMDS new issuance to be met with robust investor demand as the sector continues to offer value relative to other fixed-income investments due to its prepayment protection and attractive risk-adjusted return profiles. Now, I'll turn the call over to Brian to go through the portfolio in more detail.