Invesco Mortgage Capital Inc · NYSE:IVR
Invesco Mortgage Capital — Q2 2009 Earnings Presentation
12 slides from Invesco Mortgage Capital's earnings presentation, Aug 11, 2009
Slide 1: 2009 Second Quarter Investor Call
Invesco Mortgage Capital Inc. 2009 Second Quarter Investor Call August 11, 2009 Richard J. King President & Chief Executive Officer John M. Anzalone Chief Investment Officer Donald R. Ramon Chief Financial Officer
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation, and comments made in the associated conference call today, may include “forward-looking statements.” Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, targets, expectations, anticipations, assumptions, e
Slide 3: Discussion Topics
Discussion Topics 1. Business Overview 2. Investment Portfolio 3. Questions and Answers 2
Slide 4: Business Overview
Business Overview • Externally managed by Invesco Institutional (N.A.) Inc. • Worldwide Fixed Income • Invesco Real Estate • WL Ross • Completed IPO in July ’09 raising $201.2mn net of offering costs • Acquired $829.4mn portfolio • Obtained $630.6mn repo financing for Agency RMBS • Obtained $40.1mn
Slide 5: Investment Strategy
Investment Strategy • RMBS and CMBS with attractive risk-adjusted yields • Obtain government financing when available • Maintain a short duration gap • Diversify balance sheet risk for assets and liabilities 4
Slide 6: Discussion Topics
Discussion Topics 1. Business Overview 2. Investment Portfolio 3. Questions and Answers 5
Slide 7: Portfolio Composition
Portfolio Composition (1) Equity Allocation Strategy Target Actual Non-Agency 45% to 55% 38% Agency 45% to 55% 44% CMBS 10% to 15% 4% Pending Deployment 14% Total 100% Mortgage Backed Securities Investment Weighted Premium Average Average ($ in Thousands) Principal (Discount) Basis Coupon Yield Agen
Slide 8: Agency RMBS
Agency RMBS • Agency Hybrids — Predominantly Interest-Only Pools — 7 CPR in July ‘09 • 15 Year Fixed Rate Collateral — Purchased in lieu of Agency Hybrids — Seasoned and Loan Balance Paper — 10 CPR in July ‘09 • 30 Year Fixed Rate Collateral — Concentration in Higher Coupons (6% and 6.5%) — Every Po
Slide 9: Non-Agency RMBS
Non-Agency RMBS • Credit — Mix of Prime and Alt-A Collateral — Focus on 2005 and 2006 Vintages — Senior or Super-Senior Tranches — No exposure to Option ARM Collateral — Positive Yields in “Worst Case” Stress Scenario • Prepayments — Average Purchase Price was $61.35 — Our Non-Agency RMBS Paid 18 CP
Slide 10: CMBS
CMBS • 6.04% Average Yield • 3.91% Cost of Financing — Financed through the Fed’s TALF Program — 5 Year Term, Maturing in July 2014 • 2.13% Net Interest Margin • Collateral — Average Purchase Price was $95 — All of our Purchases are from the 2005 Vintage — CMBS positions are Match Funded 9
Slide 11: Expenses and Dividend Policy
Expenses and Dividend Policy G&A Expense • Management fee 1.5% of equity • Public company expense range 1.7% - 1.9% — D&O Insurance, Auditing, Accounting, Tax, Legal, CFO, etc. — Higher than IPO estimates due to reduced offering size Dividend Strategy • Quarterly dividends beginning with Q3 ’09 • Ta
Slide 12: Questions and Answers
Questions and Answers 2009 Second Quarter Investor Call August 11, 2009
Invesco Mortgage Capital — Q2 2009 Earnings Presentation on 6ix