INVESCO MORTGAGE CAPITAL INC

2025 earnings call. All participants will be in listen-only mode until the question and answer session. At that time, if you would like to ask a question, please press star followed by 1 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, I'm 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, condescomortgagecapital.com. This information can be found by going to the investor relations section on the website. Our presentation today will include forward-looking statements and certain non-GAAP financial measures. Please review the disclosures in slide two of the presentation regarding the statements and measures. reconciliations gap. 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 and thank you for joining us today. I'll now turn the call over to Invesco Mortgage Capital CEO, John Ancelot.

Good morning and welcome to Invesco Mortgage Capital's third 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 strong momentum that began in mid-April continued throughout the third quarter as expectations for easing monetary policy strong corporate earnings, and improved economic growth fueled rallies across the financial markets. Financial conditions remained accommodative as volatility measures declined sharply and equity markets performed well, with the S&P 500 index and NASDAQ both posting strong gains. Inflation measures continued to run hotter than the Federal Reserve's 2% target over the quarter, with the headline consumer price index rising to 3% in September, up from 2.7 in June. while the core CPI increased from 2.9% to 3%. Investor expectations for future inflation, seen through TIPS break-even rates, increased modestly, reflecting concerns about the potential impact of fiscal and trade policies on consumer prices. Meanwhile, prior to the pause in data caused by the government shutdown on October 1st, labor market data pointed to continued sluggish growth. The economy added an average of 51,000 jobs in July and August, down slightly from 55,000 per month in the second quarter, while the headline unemployment rate increased to 4.3% in August. Despite persistent inflation above the Fed's target, the FOMC lowered its benchmark federal funds target rate by 25 basis points in mid-September, citing signs of a weaker labor market. On Wednesday, the FOMC cut its target rate in additional 25 basis points to a range of 3.75 to 4% and announced the end of quantitative tightening. Futures pricing now indicates that investors expect three more cuts before the end of next year. Interest rates declined across the Treasury yield curve during the quarter, with shorter maturities leading the way. This also reflected market expectations for a more accommodative policy stance from the Federal Reserve and continued weakness in the labor market. Interest rate volatility declined notably throughout the quarter on growing consensus for easing monetary policy. As a result, agency mortgages performed well during the third quarter, benefiting from the persistent decline in interest rate volatility as well as the overall supportive environment for risk assets. While demand from commercial banks and overseas investors remained relatively subdued, The seed bidding of the yield curve in the front end improved investor sentiment for agency mortgages. Gap performance was broadly distributed across the 30-year conventional mortgage coupon stack, with discount coupons recording the largest gains. Performance in higher coupons was dampened by elevated prepayment risk, as 30-year mortgage rates declined approximately 50 basis points during the quarter. Positively, premiums on specified pool collateral improved in higher coupons as investors sought prepayment protection. Agency CMBS risk premiums declined quarter over quarter as investor demand increased with broader financial markets. These factors led to a 4.5% increase in book value for common share to $8.41 a quarter end. And when combined with our 34-cent dividend, resulted in a positive economic return of 8.7% for the quarter. Leverage ticked up slightly as our debt-to-equity ratio increased to 6.7% at the end of the quarter, up from 6.5 times as we continued to reduce the percentage of our capital structure comprised of preferred stock and position the company to further benefit from positive agency RMBS performance. During the quarter, we raised $36 million by issuing common stock through our ATM program, maintaining a disciplined approach to ensure that this activity benefits existing shareholders. At quarter end, our $5.7 billion investment portfolio consisted of 4.8 billion agency mortgages and $0.9 billion agency CMBS, and we retained a sizable balance of unrestricted cash and unencumbered investments totaling $423 million. As of last night's close, we estimate book value is up approximately 1.5% since quarter end. Given the notable decline in interest rate volatility, we remain constructive on agency mortgages, and we view near-term risks as balanced following its recent strong performance. Our longer-term outlook for this sector remains favorable, as we expect investment demand to broaden given lower interest rate volatility, a steeper yield curve, attractive valuations, and the end of quantitative tightening. In addition, agency CMBS continues to offer attractive risk-adjusted yields and diversification benefits relative to our agency mortgage holdings, supported by its stable cash flow profile and lower sensitivity to industry fluctuations. Lastly, we believe anticipated changes to bank regulatory capital rules would increase investor demand for agency mortgages and agency CMBS, providing further tailwinds for both sectors. Now I'll turn the call over to Brian to provide more details.