INVESCO MORTGAGE CAPITAL INC

Welcome to the Invesco Mortgage Capital first quarter 2026 earnings call. All participants will be in 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. It's all of you joining us on Invesco Mortgage Capital's first quarter 2026 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 affirmative reconciliations to GAAP. Finally, if fiscal 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 IVR CEO Kevin Collins for his comments. Kevin?

Good morning, and welcome to Invesco Mortgage Capital's first quarter earnings call. I'll provide a few 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, David Lyle, and our CFO, Mark Gregson. Look, I'll begin by saying that I'm very excited to assume the role of Chief Executive Officer of Invesco Mortgage Capital, and I would like to thank and congratulate our retiring CEO, John Anzalone, for his 17-year tenure with the company. John began his service as our CIO at the time of our IPO back in 2009, and he spent the past nine years as CEO leading the company through a range of market environments and has transitioned more recently to an agency-focused strategy. So, John, please know our entire team is grateful for your leadership, and I'd also like to thank and, excuse me, I'd also like to congratulate Dave on his recent appointment to president. Dave, Brian, and I have all worked very closely with John since IVR's inception, and we're really looking forward to building on our positive momentum alongside Mark, our CFO. Importantly, we all have a shared commitment to disciplined investment management, to consistent performance, strong governance, and expanded investor engagement. And we believe our current team, our capital structure, and our investment portfolio are incredibly well positioned for the future. And looking ahead, we're excited to leverage our core competencies in agency RMBS, but also agency CMBS to continue delivering attractive outcomes for our investors. In addition to our team's long track record and experience managing residential and commercial agency mortgages, we've benefited from the insights of the Global Investment Manager, which inform our views on macroeconomic conditions, interest rate dynamics, policy developments, and broader market risks. Additionally, our deep counterparty relationships enhance our ability to source, to finance, and to hedge attractive investment opportunities. And we believe these advantages really differentiate us from our peers, and our entire management team remains committed to fully leveraging the resources and capabilities of Invesco. Now turning to market development. So, look, during the first quarter, we operated in a more challenging market environment, following the strong recovery in agency MBS valuations experienced in the second half of 2025. Financial conditions tightened as you had rising geopolitical tensions, you had higher energy prices, and renewed inflation concerns drove increased interest rate volatility and pushed U.S. Treasury yields higher across the curve. Short-term yields rose more sharply than longer-dated yields, largely reflecting a pullback in expectations for near-term monetary policy using. And at the same time, inflation expectations moved higher, with two-year tips break-evens rising to approximately 3.25% by quarter-end, up from about 2.3% at the beginning of the year. So all these dynamics weighed on risk assets broadly and resulted in higher coupon agency RBS underperformance relative to treasuries. Although our agency... agency CNBS investments performed, I would say, quite well during the quarter. The benefit was outweighed by a couple things. Increased agency RMBS risk premiums, but also notable swap spread tightening. So against this backdrop, book value declined by 7.9% to 8.08 at quarter end. And we combined with our dividends at 12 cents per month, resulted in an economic return of negative 3.2% for the quarter. In the context of evolving market conditions, Our economic debt to equity ratio increased to seven and a half turns as a quarter end from seven turns at the beginning of the year, and that largely reflects the decline in book value per share, but it also reflects our more constructive outlook on agency RPS as we enter the second quarter. By quarter end, our $7.3 billion investment portfolio consisted of $5.2 billion agency RPS, $1.2 billion agency TVA, and $0.9 billion agency CVS, and we maintained a Sizable balance of unrestricted cash and unencumbered investments totaling $493.1 billion. Our earnings available for distribution declined modestly from $0.56 in the fourth quarter of last year to $0.55 in the first quarter. And as of quarter end, we hedged 96% of our borrowing costs with interest rate swaps and U.S. Treasury futures. Entering the second quarter, agency mortgages have performed well as the risk sentiment has improved and interest rate volatility is moderated. While near-term inflation concerns remain elevated, they beat somewhat with two-year tips break evens now below 3%, suggesting a lot of stabilization and inflation expectations. And as a result, positively, our book value has improved by approximately 2% since the end of the first quarter. So looking ahead, You know, I'll note that we believe a further reduction in geopolitical tensions would likely provide additional support for risk assets. And from a supply and demand perspective, agency RMBS net issuance should remain manageable if the TSEs continue to provide steady demand and bank participations likely to increase, supported by recent Basel Capital Framework proposals that improve capital efficiency of high-quality mortgage assets. So together, these macro and market technical factors create a more constructive backdrop for agency RBS holdings, particularly as wider spread levels relative to the prior quarter offer more attractive entry points. In addition, despite elevated supply, agency CMBS continues to offer attractive risk-adjusted yields and diversification benefits, just given its stable cash flow profile and its lower sensitivity to interest rate fluctuations. And so away from market developments and away from our outlook, it's I think also worth highlighting that we successfully reduced preferred equity to less than 20% of our total equity. So that's reduced costs, but it's also benefited returns for common stockholders. We've also taken steps to deepen alignment with investors, including transitioning this year from quarterly to monthly dividend distributions. And so on that note, Kevin Porath, want to highlight that you know we have received positive feedback that our capital structure positions us competitively within the sector. Kevin Porath, And that our monthly dividend approach better aligns with cash flow needs of income investors, but it also provides important monthly touch points regarding our key financial metrics. Kevin Porath, So with that i'll now turn the call over to Brian to go through more details regarding the portfolio thanks Kevin and good morning to everyone listening to the call.