[Management View]
Invesco Mortgage Capital reported a 4.5% increase in book value per common share to $8.41, driven by gains in agency mortgage-backed securities. The company achieved an 8.7% economic return, combining book value growth with a $0.34 dividend. Management emphasized a disciplined approach to capital structure, focusing on equity issuance and targeted preferred buybacks.

[Outlook]
The company remains optimistic about agency mortgages, expecting investor demand to broaden due to lower interest rate volatility and a steeper yield curve. Invesco plans to maintain a balanced risk approach and anticipates further easing of monetary policy to support agency mortgages over the long term.

[Financial Performance]
Year-over-year, Invesco's leverage increased slightly, with a debt-to-equity ratio rising to 6.7 times from 6.5 times. The investment portfolio totaled $5.7 billion, with significant growth in the agency RMBS portfolio, which increased by 13% quarter over quarter.

[Q&A Highlights]
Question 1: Trevor Cranston asked about the changes in the hedge portfolio and the company's position on the yield curve.
Answer: Brian Norris explained that the company has reduced its steepener position, moving more hedges to the front end of the curve. The net duration is slightly long due to premium-priced pools, and the company prefers interest rate swaps over treasury futures.

Question 2: Trevor Cranston inquired about returns on marginal capital deployment relative to the dividend level.
Answer: Brian Norris stated that levered gross returns were in the upper teens, consistent with the dividend to book yield, supporting the current dividend level.

Question 3: Doug Harter asked about the impact of preferred buybacks and common stock issuance on book value.
Answer: John Anzalone noted that preferred buybacks were minimal, with a $2 million buyback having little impact. The company has not issued common stock recently due to trading at a discount but will consider buybacks if conditions are favorable.

Question 4: Doug Harter queried the relative value between agency CMBS and agency MBS.
Answer: Brian Norris highlighted that agency CMBS offers attractive ROE and convexity benefits, but the company would need to see more compression between agency CMBS and RMBS returns before shifting significantly towards CMBS.

[Sentiment Analysis]
Analysts maintained a constructive tone, focusing on strategic capital adjustments and market conditions. Management expressed confidence in their strategic approach and the supportive market environment.

[Quarterly Comparison]
| Metric | Q3 2025 | Q2 2025 |
|-----------------------------|---------|---------|
| Book Value per Share | $8.41 | $8.05 |
| Economic Return | 8.7% | N/A |
| Debt-to-Equity Ratio | 6.7x | 6.5x |
| Agency RMBS Portfolio Growth| 13% | N/A |

[Risks and Concerns]
The company faces potential risks from interest rate volatility and changes in monetary policy. The preference for interest rate swaps over treasury futures indicates a strategic approach to managing these risks.

[Final Takeaway]
Invesco Mortgage Capital demonstrated strong performance in Q3 2025, with significant book value growth and economic returns. The company's strategic focus on capital structure adjustments and market adaptation positions it well for future growth. Management's disciplined approach and favorable market conditions support a positive outlook for agency mortgages and continued shareholder returns.