Weekly Real Estate News
Invesco Mortgage Capital reported a $98.8 million third-quarter loss attributable to common shareholders Thursday as interest-rate volatility and weaker mortgage-backed securities valuations pushed its book value sharply lower.
The Atlanta-based mortgage real estate investment trust reported a GAAP loss of $0.92 per common share for the quarter ended September 30, compared with net income of $31.8 million, or $0.34 per share, in the second quarter.
The company announced the results October 29 at 4:15 p.m. Eastern. Its book value fell to $6.74 per common share at quarter-end, down from $8.03 at June 30, a 16.1% decline.
Negative return despite continued distributions
Including $0.36 per common share in monthly dividends paid during the quarter, Invesco reported an economic return of negative 11.6%, compared with positive 3.8% in the second quarter. Economic return reflects the change in book value plus dividends; it is distinct from the GAAP earnings figure.
Earnings available for distribution, a non-GAAP measure that excludes certain investment and derivative gains and losses, were $50.3 million, or $0.47 per common share, compared with $47.1 million, or $0.50 per share, in the prior quarter.
Portfolio and leverage
Invesco’s investment portfolio totaled approximately $8.0 billion at September 30, consisting of $6.6 billion in agency residential mortgage-backed securities, $700 million in agency forward securities and $700 million in agency commercial mortgage-backed securities.
The company’s debt-to-equity ratio increased to 7.6 times from 6.3 times at the end of June. Its economic debt-to-equity ratio, which includes financing associated with forward positions, rose to 8.3 times from 7.5 times. Unrestricted cash and unencumbered investments totaled $401.3 million.
Agency securities carry guarantees against certain credit losses, but those guarantees do not protect investors from declines in market value when interest rates rise or spreads widen. A leveraged portfolio can experience significant book-value changes even without widespread mortgage defaults.
Why mortgage investors are watching
The report highlights a different source of pressure from the troubled commercial-property loans weighing on some credit-focused mortgage REITs. Invesco’s quarter was principally a story about market prices, interest rates, hedging and leverage in agency-backed mortgage securities.
Invesco said it issued approximately 6.7 million common shares through an at-the-market program during the quarter, raising about $51 million in net proceeds.
Source: Invesco Mortgage Capital third-quarter earnings release, October 29, 2026.
