Invesco Mortgage Capital Inc. (NYSE:IVR) Q3 2019 Earnings Conference Call - Final Transcript

Nov 08, 2019 • 09:00 am ET


Invesco Mortgage Capital Inc. (NYSE:IVR) Q3 2019 Earnings Conference Call - Final Transcript


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Welcome to Invesco Mortgage Capital Inc.'s Third Quarter 2019 Investor Conference Call. All participants, will be on a listen-only mode until the question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded.

And now, I would like to turn the call over to Brandon Burke in Investor Relations. Mr. Burke, you may begin.

Brandon Burke

Well, thank you, and welcome to the Invesco Mortgage Capital third quarter 2019 earnings call. The management team and I are delighted you've joined us, and we look forward to sharing with you our prepared remarks and conducting a question-and-answer session. Before turning the call over to our CEO, John Anzalone, I wanted to provide a reminder that statements made in this conference call and the related presentation may include forward-looking statements, which reflect management's expectations about future events and our overall plans and performance.

These forward-looking statements are made as of today and are not guarantees. They involve risks, uncertainties and assumptions and there could be no assurance that actual results will not differ materially from our expectations. For a discussion of these risks and uncertainties, please see the risks described in our most recent Annual Report on Form 10-K and subsequent filings with the SEC.

Invesco makes no obligation to update any forward-looking statement. We may also discuss non-GAAP financial measures during today's call. Reconciliations of these non-GAAP financial measures may be found at the end of our earnings presentation. To view the slide presentation today, you may access our website at and click on the Q3 2019 Earnings Presentation link under Investor Relations.

Again, welcome and thank you for joining us today. I'll now turn the call over to John Anzalone. John?

John Anzalone

Good morning, and welcome to IVR's third quarter earnings call. Joining me on the call this morning are Brian Norris, our CIO; Kevin Collins, our President and Head of Commercial Credit; Lee Phegley, our CFO; and Dave Lyle, our COO and Head of Residential Credit.

I am pleased to announce core earnings of $0.47 per share, which once again exceeded our $0.45 dividend. Our book value remained stable, despite a relative volatile backdrop, increasing 0.6% to $16.31 per share. The combination of our dividend and our increase in book value, produced an economic return of 3.4% for the quarter, bringing our year-to-date economic return to 15.7%.

Our team achieved this performance despite another fairly tumultuous quarter in which we saw the 10-year trade in a 67 basis point band, volatility increased across most asset classes, and funding markets disrupted to the point that the Fed had to intervene. Despite the turmoil, IVR was able to raise another $219 million of capital during the quarter. That capital was put to work quickly at accretive levels as we were able to invest the proceeds in late August when the agency market had just experienced a significant widening event as interest rates bottomed.

Before turning the call over to Brian, I want to spend a few minutes explaining at a high level how