INVESCO MORTGAGE CAPITAL INC

Welcome to the Invesco Mortgage Capital fourth quarter 2025 earnings call. All participants will be on the listen-only mode until the question and answer session. At that time, to ask a question, press the star followed by one on your telephone. As a reminder, this call is being recorded. I'll 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 on slide two of the presentation regarding the statements and measures as well as the appendix for 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 and thank you for joining us today. I'll now turn the call over to Invesco Mortgage Capital CEO, John Anzalone.

Good morning, and welcome to Invesco Mortgage Capital's fourth quarter earnings call. I will offer brief remarks before turning the call over to our chief investment officer, Brian Norris. Joining us for Q&A are President Kevin Collins, COO Dave Lyle, and CFO Mark Gregson. Financial conditions improved during the quarter, supported by two Federal Reserve rate cuts. Solid corporate earnings improved financial conditions and strong economic growth. Equity markets extended their gains, credit spreads remained tight, and agency mortgages outperformed treasuries, aided by lower rate volatility and a supportive supply and demand environment. Inflation readings trended modestly lower during the quarter, with headline CPI at 2.7% and core CPI at 2.6%. Investors responded by reducing inflation expectations. reflected in lower breakeven rates on inflation-protected Treasury bonds. Even with continued economic growth, the U.S. labor market continued to exhibit weakness as the economy lost 67,000 jobs during the quarter. Despite inflation running above target, the FOMC cut the federal funds target rate by 25 basis points at each of its last three meetings in 2025, citing labor market weakness. The Federal Reserve also ended its quantitative tightening program after reducing its treasury and agency mortgage holdings by more than $2.2 trillion since mid-2022, specifying that mortgage paydowns would be reinvested into treasury bills going forward. Markets are pricing in an additional 50 basis points of cuts through 2026. Interest rates were generally stable during the quarter, and the decline in interest rate volatility that began after the sharp increase in April continued into year end. With market expectations shifting towards a more accommodative monetary policy stance, agency mortgages delivered its strongest calendar year performance relative to U.S. Treasury since 2010. Key drivers included a decline in interest rate volatility, broad inflows into fixed income, and increased demand from Fannie Mae and Freddie Mac's investment portfolios. Agency CMBS spreads finished the year slightly tighter as markets gained confidence in the path towards monetary policy easing and improved clarity in U.S. trade policy. Higher issuance levels are readily absorbed, given money manager inflows and continued bank demand for assets with stable cash flows. These factors led to a 3.7% increase in our book value per common share to $8.72, and combined with our recently increased dividend of 36 cents, resulted in an 8% economic return for the quarter. We modestly increased leverage to seven times, consistent with the constructive investment environment. At year end, our $6.3 billion portfolio included $5.4 billion in agency mortgages, 900 million in agency CMBS, and our liquidity position remained robust with 453 million in unrestricted cash and unencumbered assets. We remain positive on agency mortgages following the sharp decline in volatility, though we view near-term risks as balanced given recent strong performance in the announcement of 200 billion in agency mortgage purchases by Fannie Mae and Freddie Mac. Agency CMBS continues to provide attractive risk-adjusted yields and diversification benefits. Longer term, we believe conditions for agency mortgages will remain favorable given lower interest rate volatility and expectations for broadening demand and a steeper yield curve. I'll now turn the call over to Brian for additional detail.