ATLANTA, March 27,
2023 /PRNewswire/ -- Invesco Mortgage Capital Inc.
(the "Company") (NYSE: IVR) today announced that its Board of
Directors declared a cash dividend of $0.40 per share of common stock for the first
quarter of 2023. The dividend will be paid on April 27, 2023 to stockholders of record on
April 10, 2023, with an ex-dividend
date of April 6, 2023.
"Our investment portfolio continues to generate strong earnings
available for distribution despite the sharp increase in short-term
interest rates given a high percentage of our funding is hedged
with a relatively low-cost legacy swap portfolio. We reduced our
common stock dividend to retain capital and enhance book value by
continuing to invest in agency residential mortgage-backed
securities ("Agency RMBS") at historically attractive valuations.
We believe this represents a compelling environment for longer-term
investors. The dividend reduction allows us to pay a competitive
dividend consistent with Agency RMBS market levered returns and
helps increase the ratio of our common stock to total stockholders'
equity," said John Anzalone, Chief
Executive Officer.
Given recent market volatility, the Company has elected to
provide the following preliminary financial information. The below
estimates are subject to change.
Estimated Results of Operations for the Two Months Ended
February 28, 2023
For the two months ended February 28,
2023, the Company recorded estimated net income per share
attributable to common stockholders in the range of $0.99 to $1.01 and
estimated earnings available for distribution per common share, a
non-U.S. generally accepted accounting principles ("non-GAAP")
financial measure, in the range of $0.99 to $1.01. The
table below provides a reconciliation of estimated net income per
share attributable to common stockholders, the most directly
comparable U.S. GAAP measure, to estimated earnings available for
distribution per common share.
|
Two Months
Ended
|
|
February 28,
2023
|
|
Estimated net income
per share attributable to common stockholders
(Basic)(1)
|
$0.99 to
$1.01
|
|
Estimated Non-GAAP
earnings available for distribution adjustments:
|
|
|
Loss on investments,
net
|
$0.48
|
|
Realized and
unrealized gain on derivative instruments, net
|
$(0.40)
|
|
Amortization of net
deferred gain on de-designated interest rate swaps
|
$(0.08)
|
|
Estimated earnings
available for distribution per common
share(1)
|
$0.99 to
$1.01
|
|
|
|
(1)
|
Estimated net income
per share attributable to common stockholders (basic) and estimated
earnings available for distribution per common share for the two
months ended February 28, 2023 have been reduced by $0.10 per
common share to account for cumulative quarterly dividends declared
on the Company's Series B and Series C Preferred Stock.
|
Earnings available for distribution per common share is equal to
earnings available for distribution divided by the basic weighted
average number of common shares outstanding. A description of
earnings available for distribution, including the reasons
management uses this measure, is provided below under "Non-GAAP
Financial Measures".
Portfolio and Liquidity Update as of March 17, 2023
- Total investment portfolio of $5.5
billion, including $5.3
billion of Agency RMBS
- Unrestricted cash and unencumbered investments totaling
approximately $454 million
- 90% of $4.9 billion repurchase
agreement borrowings hedged with a net $4.4
billion notional of pay fixed/receive floating interest rate
swaps
- Debt-to-equity ratio estimated to be 5.9x
- Economic debt-to-equity ratio(1) estimated to be
5.9x
- No direct counterparty exposure to Credit Suisse
|
(1)
|
Economic debt-to-equity
ratio is a non-GAAP financial measure calculated as debt-to-equity
ratio adjusted to include the implied cost basis of to-be-announced
securities forward contracts of $0.4 million as of March 17,
2023.
|
Book Value as of March 17,
2023
- Estimated book value per common share(1) of
$11.96 to $12.44 as of March 17,
2023
|
(1)
|
Estimated book value
per common share excludes a pro rata portion of the first quarter
$0.40 per common share dividend and is calculated as (i) total
equity less the liquidation preference of outstanding Series B
Preferred Stock ($113.4 million) and Series C Preferred Stock
($195.4 million), divided by (ii) total shares of common stock
outstanding of 41.6 million as of March 17, 2023.
|
The preliminary financial information set forth above reflects
the Company's estimates with respect to such information, based on
information currently available to management, and may vary from
the Company's actual financial results as of and for the periods
noted above. Further, these estimates are not a comprehensive
statement or estimate of the Company's financial results or
financial condition. These estimates should not be viewed as a
substitute for financial statements prepared in accordance with
U.S. GAAP, and they are not necessarily indicative of the results
to be achieved in any future period. Accordingly, a reader should
not place undue reliance on these estimates.
These estimates, which are the responsibility of the Company's
management, were prepared by the Company's management and are based
upon a number of assumptions. Additional items that may require
adjustments to these estimates may be identified and could result
in material changes to these estimates. These estimates are
inherently uncertain and the Company undertakes no obligation to
update this information. The preliminary financial data included in
this press release has been prepared by, and is the responsibility
of, the Company's management. PricewaterhouseCoopers LLP ("PwC")
has not audited, reviewed, compiled or applied agreed-upon
procedures with respect to the preliminary financial data.
Accordingly, PwC does not express an opinion or any other form of
assurance with respect thereto.
Non-GAAP Financial Measures
Earnings Available
for Distribution
The Company believes the presentation of earnings available for
distribution provides a consistent measure of operating performance
that investors can use to evaluate its results over multiple
reporting periods and, to a certain extent, compare to its peer
companies. However, because not all of the Company's peer companies
use identical operating performance measures, the Company's
presentation of earnings available for distribution may not be
comparable to other similarly titled measures used by its peer
companies. The Company excludes the impact of gains and losses when
calculating earnings available for distribution because (i) when
analyzed in conjunction with its U.S. GAAP results, earnings
available for distribution provides additional detail of its
investment portfolio's earnings capacity and (ii) gains and losses
are not accounted for consistently under U.S. GAAP. Under U.S.
GAAP, certain gains and losses are reflected in net income whereas
other gains and losses are reflected in other comprehensive
income.
Because the Company views earnings available for distribution as
a consistent measure of its investment portfolio's ability to
generate income for distribution to common stockholders, earnings
available for distribution is one metric, but not the exclusive
metric, that the Company's board of directors uses to determine the
amount, if any, and the payment date of dividends on common stock.
However, earnings available for distribution should not be
considered as an indication of the Company's taxable income, a
guaranty of its ability to pay dividends or as a proxy for the
amount of dividends it may pay, as earnings available for
distribution excludes certain items that impact its cash needs.
Earnings available for distribution is an incomplete measure of
the Company's financial performance and there are other factors
that impact the achievement of the Company's business objective.
The Company cautions that earnings available for distribution
should not be considered as an alternative to net income
(determined in accordance with U.S. GAAP), or as an indication of
the Company's cash flow from operating activities (determined in
accordance with U.S. GAAP), a measure of the Company's liquidity,
or as an indication of amounts available to fund its cash
needs.
About Invesco Mortgage Capital Inc.
Invesco Mortgage Capital Inc. is a real estate investment trust
that primarily focuses on investing in, financing and managing
mortgage-backed securities and other mortgage-related assets.
Invesco Mortgage Capital Inc. is externally managed and advised by
Invesco Advisers, Inc., a subsidiary of Invesco Ltd. (NYSE: IVZ), a
leading independent global investment management firm. Additional
information is available at www.invescomortgagecapital.com.
Cautionary Notice Regarding Forward-Looking
Statements
This press release may include statements and information that
constitute "forward-looking statements" within the meaning of the
U.S. securities laws as defined in the Private Securities
Litigation Reform Act of 1995, as amended, and such statements are
intended to be covered by the safe harbor provided by the same.
Forward-looking statements are subject to substantial risks and
uncertainties, many of which are difficult to predict and are
generally beyond the Company's control. These forward-looking
statements include those related to our intention and ability to
pay dividends, as well as any other statements other than
statements of historical fact. The words "believe," "expect,"
"anticipate," "estimate," "plan," "continue," "intend," "should,"
"may," or similar expressions and future or conditional verbs such
as "will," "may," "could," "should," and "would," and any other
statement that necessarily depends on future events, are intended
to identify forward-looking statements.
Any forward-looking statement speaks only as of the date on
which it is made. New risks and uncertainties arise over time, and
it is not possible to predict those events or how they may affect
the Company. Except as required by law, the Company is not
obligated to, and does not intend to, update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
Investor Relations Contact: Matt Seitz, 404-439-3323
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SOURCE Invesco Mortgage Capital Inc.