INVESCO MORTGAGE CAPITAL INC

first quarter 2025 earnings call. All participants will be in a listen-only mode until the question and answer session. At that time, to ask a question, press the star followed by the one on your telephone. As a reminder, this call is being 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. 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 that slide to the presentation. regarding the 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 nor 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 Invesco Mortgage Capital's CEO, John Anselm.

John? Good morning, and welcome to Invesco Mortgage Capital's first 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 is our President, Kevin Collins, our COO, Dave Lyle, and our CFO, Mark Gregson. The first quarter of 2025 is characterized by tightening financial conditions. as both equity markets and credit spreads reacted negatively to anticipated U.S. fiscal and trade policies. Although inflation measures stabilized during the quarter, investors increased expectations for future inflation, given concerns about the potential impact of U.S. trade-related policies. As inflation forecasts were increasing, softer employment data and fears the combination of potential trade wars and fiscal austerity would contribute to an economic slowdown led to a repricing of the market's expectations of future monetary policy. The Fed Fund's futures market as of quarter end reflected a further 75 basis point reduction of the target rate through the end of the year. Interest rates dropped across the maturity spectrum during the quarter, while short-dated interest rate volatility increased, reflecting the market's shifting expectations of monetary and trade policy, while longer-dated volatility declined modestly. Despite weaker market sentiment, agency mortgages performance was largely consistent with treasuries, with higher coupons modestly outperforming hedges as longer-dated interest rate volatility trended lower. Supply and demand technicals for higher coupon agency mortgages were supported, as originations remained subdued given slower housing seasonals and elevated mortgage rates, while banks, money managers, and mortgage REITs met added exposure during the quarter. Prepayment speeds remained at low levels given limited purchase and refinancing activity. However, a notable decline in mortgage rates in the latter half of the quarter should result in faster prepayment speeds in the coming months as the decline coincided with the seasonal increase in housing activity. Premiums on specified pool collateral were largely unchanged during the quarter as the move lower in mortgage rates led to support for prepayment protections. Additionally, agency CMBS risk premiums increased during the quarter, reflecting weakness in broader fixed income markets. In this environment, our portfolio produced a positive economic return for the quarter of 2.6%, consisting of our $0.34 dividend and a modest $0.11 decline in book value to $8.81. Following additional trade policy announcements on April 2nd, financial conditions tightened further, and investors and investor inflation expectations declined as concerns about an economic slowdown outweighed concerns about potentially higher prices. Agency mortgages significantly underperformed treasuries, and the initial reaction to the announcement saw interest rate volatility spike sharply higher and risk assets sell off across those fixed income inequities as markets priced in potentially slower economic growth. Hedge funds were selling U.S. treasuries and receiving swaps due and unwind of a previous trade where they purchased treasuries and hedged them with swaps. This caused swaps to move sharply tighter, negatively impacting book value. Given this challenging environment, our book value for common share declined in April, and our estimate for April 30th is between $7.74 and $8.06. Given elevated interest rate volatility and continued policy uncertainty, We remain cautious on agency mortgages in the near term. However, our long-term outlook is favorable, as we expect investor demand to improve in higher coupons given attractive valuations and eventual decline in interest rate volatility and a steeper yield curve. Lastly, while agency CMBS risk premiums may remain elevated, limited issuance, strong fundamental performance, and stable cash flow profiles should provide favorable support for the sector. Now, I'll turn the call over to Brian to provide more details.