Invesco Mortgage Capital 4Q income skyrockets from year earlier
Invesco Mortgage Capital's (IVR) fourth-quarter earnings rose fourfold, as the company benefited from investing proceeds from stock offerings. The Atlanta real estate investment trust earned $40.9 million, or $1 a share, for the three months ended Dec. 31, up from about $10.5 million, or $1.02 a share, a year earlier. Interest income for the quarter increased to $50.9 million and the company's portfolio mortgage-backed securities rose to $5.6 billion at the end of 2010, up from $3.1 billion at Sept. 30. Average earning assets for the fourth quarter more than doubled to $4.9 billion from $2.4 billion. "We saw exciting opportunities to invest in the fourth quarter, particularly in late December," said President and Chief Executive Richard King. "During the quarter we completed two successful follow-on common stock offerings and quickly invested the capital opportunistically in our target. Our balanced portfolio approach resulted in a $0.21 increase in our book value per share while maintaining stable earnings per share and producing a strong $0.97 dividend." The constant prepayment rate of Invesco's agency residential MBS continued to outperform. The rate for the company's 15-year agency RMBS portfolio was 12% compared with about 28.8% for bonds with similar characteristics, according to Invesco. The 30-year portfolio had a constant prepayment rate 14.6%, compared to about 27.8% for similar bonds. Agency hybrid adjustable rate mortgage bonds had a three-month CPR of 15.8% and the non-agency RMBS portfolio prepaid at 16%. Overall, Invesco's weighted average rate was 12.8%. Write to Jason Philyaw.