Invesco Mortgage Capital Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS INVESCO MORTGAGE CAPITAL INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) As of $ in thousands, except share amounts June 30, 2025 December 31, 2024 ASSETS Mortgage-backed securities, at fair value (including pledged securities of $ 4,882,659 and $ 5,129,486 , respectively; net of allowance for credit losses of $ 0 and $ 654 , respectively) 5,185,559 5,445,508 Cash and cash equivalents 59,396 73,403 Restricted cash 131,146 137,478 Due from counterparties — 580 Investment related receivable 23,538 24,870 Derivative assets, at fair value — 5,033 Other assets 731 1,162 Total assets 5,400,370 5,688,034 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Repurchase agreements 4,635,881 4,893,958 Derivative liabilities, at fair value 10,775 627 Dividends payable 22,545 24,692 Accrued interest payable 10,550 32,711 Collateral held payable 6,238 — Accounts payable and accrued expenses 1,904 1,619 Due to affiliate 3,101 3,698 Total liabilities 4,690,994 4,957,305 Commitments and contingencies (See Note 12): Stockholders' equity: Preferred Stock, par value $ 0.01 per share; 50,000,000 shares authorized: 7.50 % Fixed-to-Floating Series C Cumulative Redeemable Preferred Stock: 7,019,710 and 7,206,659 shares issued and outstanding, respectively ($ 175,493 and $ 180,166 aggregate liquidation preference, respectively) 169,760 174,281 Common Stock, par value $ 0.01 per share; 134,000,000 shares authorized; 66,307,379 and 61,729,693 shares issued and outstanding, respectively 663 617 Additional paid in capital 4,166,345 4,127,807 Accumulated other comprehensive income — 173 Retained earnings (distributions in excess of earnings) ( 3,627,392 ) ( 3,572,149 ) Total stockholders’ equity 709,376 730,729 Total liabilities and stockholders' equity 5,400,370 5,688,034 The accompanying notes are an integral part of these condensed consolidated financial statements. 1 Table of Content s INVESCO MORTGAGE CAPITAL INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended June 30, Six Months Ended June 30, $ in thousands, except share data 2025 2024 2025 2024 Interest income 70,624 68,028 144,470 136,611 Interest expense 52,895 59,393 107,920 120,973 Net interest income 17,729 8,635 36,550 15,638 Other income (loss) Gain (loss) on investments, net ( 5,268 ) ( 45,212 ) 76,890 ( 111,365 ) (Increase) decrease in provision for credit losses — ( 263 ) — ( 302 ) Equity in earnings (losses) of unconsolidated ventures — — — ( 193 ) Gain (loss) on derivative instruments, net ( 30,916 ) 28,262 ( 107,595 ) 121,423 Total other income (loss) ( 36,184 ) ( 17,213 ) ( 30,705 ) 9,563 Expenses Management fee – related party 2,831 2,945 5,827 5,806 General and administrative 2,041 1,943 3,704 3,739 Total expenses 4,872 4,888 9,531 9,545 Net income (loss) ( 23,327 ) ( 13,466 ) ( 3,686 ) 15,656 Dividends to preferred stockholders ( 3,297 ) ( 5,508 ) ( 6,638 ) ( 11,093 ) Gain (loss) on repurchase and retirement of preferred stock 57 208 46 401 Net income (loss) attributable to common stockholders ( 26,567 ) ( 18,766 ) ( 10,278 ) 4,964 Earnings (loss) per share: Net income (loss) attributable to common stockholders Basic ( 0.40 ) ( 0.38 ) ( 0.16 ) 0.10 Diluted ( 0.40 ) ( 0.38 ) ( 0.16 ) 0.10 The accompanying notes are an integral part of these condensed consolidated financial statements. 2 Table of Content s INVESCO MORTGAGE CAPITAL INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, $ in thousands 2025 2024 2025 2024 Net income (loss) ( 23,327 ) ( 13,466 ) ( 3,686 ) 15,656 Other comprehensive income (loss): Unrealized gain (loss) on mortgage-backed securities, net ( 271 ) ( 150 ) 229 ( 352 ) Reclassification of unrealized (gain) loss on sale of mortgage-backed securities to gain (loss) on investments, net ( 518 ) — ( 402 ) — Reclassification of unrealized loss on available-for-sale securities to (increase) decrease in provision for credit losses — 263 — 302 Total other comprehensive income (loss) ( 789 ) 113 ( 173 ) ( 50 ) Comprehensive income (loss) ( 24,116 ) ( 13,353 ) ( 3,859 ) 15,606 Dividends to preferred stockholders ( 3,297 ) ( 5,508 ) ( 6,638 ) ( 11,093 ) Gain (loss) on repurchase and retirement of preferred stock 57 208 46 401 Comprehensive income (loss) attributable to common stockholders ( 27,356 ) ( 18,653 ) ( 10,451 ) 4,914 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 Table of Content s INVESCO MORTGAGE CAPITAL INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY For the three months ended March 31, 2025 and June 30, 2025 (Unaudited) Additional Paid in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings (Distributions in excess of earnings) Total Stockholders’ Equity Series C Preferred Stock $ in thousands, except share amounts Common Stock Shares Amount Shares Amount Balance as of December 31, 2024 7,206,659 174,281 61,729,693 617 4,127,807 173 ( 3,572,149 ) 730,729 Net income (loss) — — — — — — 19,641 19,641 Other comprehensive income (loss) — — — — — 616 — 616 Proceeds from issuance of common stock, net of offering costs — — 4,212,057 42 35,914 — — 35,956 Stock awards — — 745 — — — — — Repurchase and retirement of preferred stock ( 90,146 ) ( 2,180 ) — — — — ( 11 ) ( 2,191 ) Common stock dividends — — — — — — ( 22,420 ) ( 22,420 ) Preferred stock dividends — — — — — — ( 3,341 ) ( 3,341 ) Amortization of equity-based compensation — — — — 176 — — 176 Balance as of March 31, 2025 7,116,513 172,101 65,942,495 659 4,163,897 789 ( 3,578,280 ) 759,166 Net income (loss) — — — — — — ( 23,327 ) ( 23,327 ) Other comprehensive income (loss) — — — — — ( 789 ) — ( 789 ) Proceeds from issuance of common stock, net of offering costs — — 282,750 3 2,276 — — 2,279 Stock awards — — 82,134 1 — — — 1 Repurchase and retirement of preferred stock ( 96,803 ) ( 2,341 ) — — — — 57 ( 2,284 ) Common stock dividends — — — — — — ( 22,545 ) ( 22,545 ) Preferred stock dividends — — — — — — ( 3,297 ) ( 3,297 ) Amortization of equity-based compensation — — — — 172 — — 172 Balance as of June 30, 2025 7,019,710 169,760 66,307,379 663 4,166,345 — ( 3,627,392 ) 709,376 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 Table of Content s INVESCO MORTGAGE CAPITAL INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY For the three months ended March 31, 2024 and June 30, 2024 (Unaudited) Additional Paid in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings (Distributions in excess of earnings) Total Stockholders’ Equity Series B Preferred Stock Series C Preferred Stock $ in thousands, except share amounts Common Stock Shares Amount Shares Amount Shares Amount Balance as of December 31, 2023 4,385,997 106,014 7,545,439 182,474 48,460,626 484 4,011,138 698 ( 3,518,143 ) 782,665 Net income (loss) — — — — — — — — 29,122 29,122 Other comprehensive income (loss) — — — — — — — ( 163 ) — ( 163 ) Proceeds from issuance of common stock, net of offering costs — — — — 365,838 4 3,314 — — 3,318 Stock awards — — — — ( 870 ) — — — — — Repurchase and retirement of preferred stock ( 93,347 ) ( 2,256 ) ( 95,917 ) ( 2,320 ) — — — — 193 ( 4,383 ) Common stock dividends — — — — — — — — ( 19,530 ) ( 19,530 ) Preferred stock dividends — — — — — — — — ( 5,585 ) ( 5,585 ) Amortization of equity-based compensation — — — — — — 128 — — 128 Balance as of March 31, 2024 4,292,650 103,758 7,449,522 180,154 48,825,594 488 4,014,580 535 ( 3,513,943 ) 785,572 Net income (loss) — — — — — — — — ( 13,466 ) ( 13,466 ) Other comprehensive income (loss) — — — — — — — 113 — 113 Proceeds from issuance of common stock, net of offering costs — — — — 1,761,155 18 16,034 — — 16,052 Stock awards — — — — 50,855 — — — — — Repurchase and retirement of preferred stock ( 44,661 ) ( 1,080 ) ( 105,492 ) ( 2,551 ) — — — — 208 ( 3,423 ) Common stock dividends — — — — — — — — ( 20,255 ) ( 20,255 ) Preferred stock dividends — — — — — — — — ( 5,508 ) ( 5,508 ) Amortization of equity-based compensation — — — — — — 131 — — 131 Balance as of June 30, 2024 4,247,989 102,678 7,344,030 177,603 50,637,604 506 4,030,745 648 ( 3,552,964 ) 759,216 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 Table of Content s INVESCO MORTGAGE CAPITAL INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended June 30, $ in thousands 2025 2024 Cash Flows from Operating Activities Net income (loss) ( 3,686 ) 15,656 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Amortization of premiums and (discounts), net ( 3,392 ) ( 6,719 ) Realized and unrealized (gain) loss on derivative instruments, net 164,305 ( 32,865 ) (Gain) loss on investments, net ( 76,890 ) 111,365 Increase (decrease) in provision for credit losses — 302 (Gain) loss from investments in unconsolidated ventures in excess of distributions received — 193 Other amortization 349 259 Changes in operating assets and liabilities: (Increase) decrease in operating assets 1,769 ( 1,783 ) Increase (decrease) in operating liabilities ( 22,475 ) 4,068 Net cash provided by (used in) operating activities 59,980 90,476 Cash Flows from Investing Activities Purchase of mortgage-backed securities ( 1,073,240 ) ( 624,425 ) Distributions from investments in unconsolidated ventures, net — 307 Principal payments from mortgage-backed securities 233,995 153,021 Proceeds from sale of mortgage-backed securities 1,179,303 568,331 Proceeds from sale of U.S. Treasury securities — 10,755 Settlement (termination) of swaps, TBAs and futures, net ( 149,124 ) 26,338 Net change in due from counterparties and collateral held payable on derivative instruments 580 ( 1,279 ) Net cash provided by (used in) investing activities 191,514 133,048 Cash Flows from Financing Activities Proceeds from issuance of common stock 38,231 19,370 Repurchase of preferred stock ( 4,475 ) ( 7,806 ) Proceeds from repurchase agreements 24,111,314 17,949,216 Principal repayments of repurchase agreements ( 24,369,391 ) ( 18,147,017 ) Net change in due from counterparties and collateral held payable on repurchase agreements 6,238 ( 2,475 ) Payments of dividends ( 53,750 ) ( 50,007 ) Net cash provided by (used in) financing activities ( 271,833 ) ( 238,719 ) Net change in cash, cash equivalents and restricted cash ( 20,339 ) ( 15,195 ) Cash, cash equivalents and restricted cash, beginning of period 210,881 198,637 Cash, cash equivalents and restricted cash, end of period 190,542 183,442 Supplement Disclosure of Cash Flow Information Interest paid 130,082 116,223 Non-cash Investing and Financing Activities Information Dividends declared not paid 22,545 20,255 Unsettled receivables recorded within investment related receivable — 9,020 The accompanying notes are an integral part of these condensed consolidated financial statements. 6 Table of Content s INVESCO MORTGAGE CAPITAL INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1 – Organization and Business Operations Invesco Mortgage Capital Inc. (the “Company” or “we”) is a Maryland corporation primarily focused on investing in, financing and managing mortgage-backed securities (“MBS”) and other mortgage-related assets. As of June 30, 2025, we were invested in: • residential mortgage-backed securities (“RMBS”) that are guaranteed by a U.S. government agency such as the Government National Mortgage Association (“Ginnie Mae”), or a federally chartered corporation such as the Federal National Mortgage Association (“Fannie Mae”) or the Federal Home Loan Mortgage Corporation (“Freddie Mac”) (collectively “Agency RMBS”); and • commercial mortgage-backed securities (“CMBS”) that are guaranteed by a U.S. government agency such as Ginnie Mae or a federally chartered corporation such as Fannie Mae or Freddie Mac (collectively “Agency CMBS”). During the periods presented in these condensed consolidated financial statements, we also invested in CMBS and RMBS that are not guaranteed by a U.S. government agency or a federally chartered corporation (“non-Agency CMBS” and “non-Agency RMBS”, respectively), U.S. Treasury securities and a real estate-related financing arrangement in the form of an unconsolidated venture. We conduct our business through IAS Operating Partnership L.P. (the “Operating Partnership”) and have one operating segment. Refer to Note 13 - “Segment Information” of our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 for additional information on our operating segment. We are externally managed and advised by Invesco Advisers, Inc. (our “Manager”), a registered investment adviser and an indirect, wholly-owned subsidiary of Invesco Ltd. (“Invesco”), a leading independent global investment management firm. We elected to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes under the provisions of the Internal Revenue Code of 1986. To maintain our REIT qualification, we are generally required to distribute at least 90 % of our REIT taxable income to our stockholders annually. We operate our business in a manner that permits our exclusion from the “Investment Company” definition under the Investment Company Act of 1940, as amended (the “1940 Act”). Note 2 – Summary of Significant Accounting Policies Basis of Presentation and Consolidation Certain disclosures included in our Annual Report on Form 10-K are not required to be included on an interim basis in our quarterly reports on Form 10-Q. We have condensed or omitted these disclosures. Therefore, this Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2024. Our condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and consolidate the financial statements of the Company and its controlled subsidiaries. All significant intercompany transactions, balances, revenues and expenses are eliminated upon consolidation. Certain reclassifications have been made to prior period amounts to conform to the current period presentation. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, which are necessary for a fair statement of our financial condition and results of operations for the periods presented. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. Examples of estimates include, but are not limited to, estimates of the fair values of financial instruments, interest income on mortgage-backed securities and allowances for credit losses. Actual results may differ from those estimates. Significant Accounting Policies There have been no changes to our accounting policies included in Note 2 to the consolidated financial statements of our Annual Report on Form 10-K for the year ended December 31, 2024. 7 Table of Content s Note 3 – Mortgage-Backed Securities The following tables summarize our MBS portfolio by asset type as of June 30, 2025 and December 31, 2024. As of June 30, 2025 $ in thousands Principal/ Notional Balance Unamortized Premium (Discount) Amortized Cost Unrealized Gain/ (Loss), net Fair Value Period- end Weighted Average Yield (1) Agency RMBS: 30 year fixed-rate pass-through 4,209,138 ( 42,246 ) 4,166,892 55,311 4,222,203 5.58 % Agency-CMO (2) 507,276 ( 443,291 ) 63,985 7,850 71,835 9.75 % Agency CMBS 898,526 ( 6,553 ) 891,973 ( 452 ) 891,521 4.62 % Total 5,614,940 ( 492,090 ) 5,122,850 62,709 5,185,559 5.46 % (1) Period-end weighted average yield is based on amortized cost as of June 30, 2025 and incorporates future prepayment and loss assumptions when appropriate. Total represents period-end weighted average yield of all mortgage-backed securities. (2) All Agency collateralized mortgage obligations (“Agency-CMO”) are interest-only securities (“Agency IO”). As of December 31, 2024 $ in thousands Principal/Notional Balance Unamortized Premium (Discount) Amortized Cost Allowance for Credit Losses Unrealized Gain/ (Loss), net Fair Value Period- end Weighted Average Yield (1) Agency RMBS: 30 year fixed-rate pass-through 4,626,174 ( 87,357 ) 4,538,817 — 2,708 4,541,525 5.50 % Agency-CMO (2) 529,137 ( 461,674 ) 67,463 — 3,313 70,776 9.20 % Agency CMBS 845,736 ( 5,830 ) 839,906 — ( 23,759 ) 816,147 4.59 % Non-Agency CMBS 11,000 — 11,000 ( 654 ) ( 510 ) 9,836 8.91 % Non-Agency RMBS (3)(4)(5) 248,957 ( 242,334 ) 6,623 — 601 7,224 11.13 % Total 6,261,004 ( 797,195 ) 5,463,809 ( 654 ) ( 17,647 ) 5,445,508 5.42 % (1) Period-end weighted average yield is based on amortized cost as of December 31, 2024 and incorporates future prepayment and loss assumptions when appropriate. Total represents period-end weighted average yield of all mortgage-backed securities. (2) All Agency-CMO are Agency IO. (3) Non-Agency RMBS is 66.4 % fixed rate, 33.0 % variable rate and 0.6 % floating rate based on fair value. Coupon payments on variable rate investments are based upon changes in the underlying hybrid adjustable-rate mortgage loan coupons, while coupon payments on floating rate investments are based upon a spread to a reference index. (4) Of the total discount in non-Agency RMBS, $ 2.1 million is non-accretable calculated using the principal/notional balance and based on estimated future cash flows of the securities. (5) Non-Agency RMBS includes non-Agency IO which represent 96.7 % of principal/notional balance, 34.2 % of amortized cost and 31.0 % of fair value. 8 Table of Content s We have elected the fair value option for all of our MBS held as of June 30, 2025. We believe the fair value option election more appropriately reflects the results of our operations because MBS fair value changes are accounted for in the same manner as fair value changes in economic hedging instruments. The following table presents the fair value of our available-for-sale securities and securities accounted for under the fair value option by asset type as of December 31, 2024. As of December 31, 2024 $ in thousands Available-for-sale Securities Securities under Fair Value Option Total Fair Value Agency RMBS: 30 year fixed-rate pass-through — 4,541,525 4,541,525 Agency-CMO — 70,776 70,776 Agency CMBS — 816,147 816,147 Non-Agency CMBS 9,836 — 9,836 Non-Agency RMBS 5,114 2,110 7,224 Total 14,950 5,430,558 5,445,508 The components of the carrying value of our MBS portfolio as of June 30, 2025 and December 31, 2024 are presented below. Accrued interest receivable on our MBS portfolio, which is recorded within investment related receivable on our condensed consolidated balance sheets, was $ 23.5 million as of June 30, 2025 (December 31, 2024: $ 24.9 million). As of June 30, 2025 December 31, 2024 $ in thousands MBS Interest-Only Securities Total MBS Interest-Only Securities Total Principal/notional balance 5,107,664 507,276 5,614,940 5,491,175 769,829 6,261,004 Unamortized premium 32,079 — 32,079 19,651 — 19,651 Unamortized discount ( 80,878 ) ( 443,291 ) ( 524,169 ) ( 116,744 ) ( 700,102 ) ( 816,846 ) Allowance for credit losses — — — ( 654 ) — ( 654 ) Gross unrealized gains (1) 64,848 8,105 72,953 22,443 5,817 28,260 Gross unrealized losses (1) ( 9,989 ) ( 255 ) ( 10,244 ) ( 43,376 ) ( 2,531 ) ( 45,907 ) Fair value 5,113,724 71,835 5,185,559 5,372,495 73,013 5,445,508 (1) Gross unrealized gains and losses includes gains (losses) recognized in net income for securities accounted for under the fair value option as well as gains (losses) for available-for-sale securities which are recognized as adjustments to other comprehensive income. Realization occurs upon sale or settlement of such securities. Further detail on the components of our total gains (losses) on investments, net for the three and six months ended June 30, 2025 and 2024 is provided below in this Note 3. The following table summarizes our MBS portfolio according to estimated weighted average life classifications as of June 30, 2025 and December 31, 2024 . As of $ in thousands June 30, 2025 December 31, 2024 Greater than one year and less than five years 532,275 10,045 Greater than or equal to five years 4,653,284 5,435,463 Total 5,185,559 5,445,508 9 Table of Content s The following tables present the estimated fair value and gross unrealized losses of our MBS by length of time that such securities have been in a continuous unrealized loss position as of June 30, 2025 and December 31, 2024. As of June 30, 2025 Less than 12 Months 12 Months or More Total $ in thousands Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses Number of Securities Agency RMBS: 30 year fixed-rate pass-through 668,419 ( 1,387 ) 9 — — — 668,419 ( 1,387 ) 9 Agency-CMO 4,124 ( 1 ) 1 1,553 ( 254 ) 1 5,677 ( 255 ) 2 Agency CMBS 446,539 ( 8,602 ) 19 — — — 446,539 ( 8,602 ) 19 Total (1) 1,119,082 ( 9,990 ) 29 1,553 ( 254 ) 1 1,120,635 ( 10,244 ) 30 (1) Fair value option has been elected for all securities in an unrealized loss position. As of December 31, 2024 Less than 12 Months 12 Months or More Total $ in thousands Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses Number of Securities Fair Value Unrealized Losses Number of Securities Agency RMBS: 30 year fixed-rate pass-through (1) 2,251,552 ( 18,897 ) 29 — — — 2,251,552 ( 18,897 ) 29 Agency-CMO (1) — — — 18,909 ( 2,300 ) 5 18,909 ( 2,300 ) 5 Agency CMBS (1) 792,031 ( 23,949 ) 49 — — — 792,031 ( 23,949 ) 49 Non-Agency CMBS (2) 9,836 ( 510 ) 1 — — — 9,836 ( 510 ) 1 Non-Agency RMBS (3) — — — 1,322 ( 251 ) 9 1,322 ( 251 ) 9 Total 3,053,419 ( 43,356 ) 79 20,231 ( 2,551 ) 14 3,073,650 ( 45,907 ) 93 (1) Fair value option has been elected for all Agency securities in an unrealized loss position. (2) Unrealized losses on non-Agency CMBS were included in accumulated other comprehensive income. These losses were not reflected in an allowance for credit losses based on a comparison of discounted expected cash flows to current amortized cost basis. (3) Includes non-Agency IO with a fair value of $ 1.1 million for which the fair value option has been elected. Such securities have unrealized losses of $ 231,000 . We were required to evaluate our available-for-sale MBS for credit losses. During the three and six months ended June 30, 2025, we sold our remaining available-for-sale MBS for cash proceeds of $ 4.9 million and $ 15.1 million, respectively, and recognized net gains upon sale of $ 518,000 and $ 402,000 , respectively. The following table presents a roll-forward of our allowance for credit losses. Three Months Ended June 30, Six Months Ended June 30, $ in thousands 2025 2024 2025 2024 Beginning allowance for credit losses — ( 359 ) ( 654 ) ( 320 ) Additional (increases) decreases to the allowance for credit losses on securities that had an allowance recorded in a previous period — ( 263 ) — ( 302 ) Reductions for securities sold — — 654 — Ending allowance for credit losses — ( 622 ) — ( 622 ) 10 Table of Content s The following table summarizes the components of our total gain (loss) on investments, net for the three and six months ended June 30, 2025 and 2024. Three Months Ended June 30, Six Months Ended June 30, $ in thousands 2025 2024 2025 2024 Gross realized gains on sale of MBS 4,247 — 5,170 148 Gross realized losses on sale of MBS ( 2,420 ) ( 6,529 ) ( 8,809 ) ( 9,899 ) Net unrealized gains (losses) on MBS accounted for under the fair value option ( 7,095 ) ( 38,683 ) 80,529 ( 101,156 ) Net unrealized gains (losses) on U.S. Treasury securities — — — ( 372 ) Net realized gains (losses) on U.S. Treasury securities — — — ( 86 ) Total gain (loss) on investments, net ( 5,268 ) ( 45,212 ) 76,890 ( 111,365 ) The following tables present components of interest income recognized for the three and six months ended June 30, 2025 and 2024. For the three months ended June 30, 2025 $ in thousands Coupon Interest Net (Premium Amortization)/Discount Accretion Interest Income Agency RMBS 60,597 ( 521 ) 60,076 Agency CMBS 10,164 114 10,278 Non-Agency RMBS 47 51 98 Other (inclusive of interest earned on cash balances) 172 — 172 Total interest income 70,980 ( 356 ) 70,624 For the three months ended June 30, 2024 $ in thousands Coupon Interest Net (Premium Amortization)/Discount Accretion Interest Income Agency RMBS 61,248 1,595 62,843 Agency CMBS 4,256 165 4,421 Non-Agency CMBS 126 130 256 Non-Agency RMBS 274 ( 110 ) 164 Other (inclusive of interest earned on cash balances) 344 — 344 Total interest income 66,248 1,780 68,028 11 Table of Content s For the six months ended June 30, 2025 $ in thousands Coupon Interest Net (Premium Amortization)/Discount Accretion Interest Income Agency RMBS 123,864 ( 341 ) 123,523 Agency CMBS 20,041 209 20,250 Non-Agency CMBS 77 — 77 Non-Agency RMBS 296 ( 12 ) 284 Other (inclusive of interest earned on cash balances) 336 — 336 Total interest income 144,614 ( 144 ) 144,470 For the six months ended June 30, 2024 $ in thousands Coupon Interest Net (Premium Amortization)/Discount Accretion Interest Income Agency RMBS 127,377 2,732 130,109 Agency CMBS 4,760 170 4,930 Non-Agency CMBS 251 257 508 Non-Agency RMBS 554 ( 235 ) 319 U.S. Treasury Securities 22 ( 1 ) 21 Other (inclusive of interest earned on cash balances) 724 — 724 Total interest income 133,688 2,923 136,611 Note 4 – Borrowings We finance the majority of our investment portfolio through repurchase agreements. Our repurchase agreements bear interest at a contractually agreed upon rate and generally have maturities ranging from one to six months . We account for our repurchase agreements as secured borrowings since we maintain effective control of the financed assets. Our repurchase agreements are subject to certain financial covenants. We were in compliance with all of these covenants as of June 30, 2025. The following tables summarize certain characteristics of our borrowings as of June 30, 2025 and December 31, 2024. Refer to Note 5 - "Collateral Positions" for collateral pledged and held under our repurchase agreements. As of $ in thousands June 30, 2025 December 31, 2024 Amount Outstanding Weighted Average Interest Rate Weighted Average Remaining Maturity (days) Amount Outstanding Weighted Average Interest Rate Weighted Average Remaining Maturity (days) Repurchase Agreements - Agency RMBS 3,798,981 4.48 % 24 4,112,219 4.80 % 29 Repurchase Agreements - Agency CMBS 836,900 4.48 % 26 781,739 4.77 % 32 Total Borrowings 4,635,881 4.48 % 24 4,893,958 4.80 % 29 12 Table of Content s Note 5 - Collateral Positions The following table summarizes the fair value of collateral that we pledged and held under our repurchase agreements and derivative instruments as of June 30, 2025 and December 31, 2024. Refer to Note 2 - “Summary of Significant Accounting Policies - Fair Value Measurements” of our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 for a description of how we determine fair value. Agency RMBS and Agency CMBS collateral pledged is included in mortgage-backed securities on our condensed consolidated balance sheets. Cash collateral pledged on centrally cleared interest rate swaps and futures contracts is classified as restricted cash on our condensed consolidated balance sheets. Cash collateral pledged on to-be-announced securities forward contracts (“TBAs”) accounted for as derivatives is classified as due from counterparties on our condensed consolidated balance sheets. Cash collateral held that is not restricted for use is included in cash and cash equivalents on our condensed consolidated balance sheets and the liability to return the collateral is included in collateral held payable. Non-cash collateral held is only recognized if the counterparty defaults or if we sell the pledged collateral. As of June 30, 2025 and December 31, 2024, we did not recognize any non-cash collateral held on our condensed consolidated balance sheets. $ in thousands As of Collateral Pledged June 30, 2025 December 31, 2024 Repurchase Agreements: Agency RMBS 3,991,138 4,323,626 Agency CMBS 891,521 805,860 Total repurchase agreements collateral pledged 4,882,659 5,129,486 Derivative Instruments: Cash — 580 Restricted cash 131,146 137,478 Total derivative instruments collateral pledged 131,146 138,058 Total Collateral Pledged: Mortgage-backed securities 4,882,659 5,129,486 Cash — 580 Restricted cash 131,146 137,478 Total Collateral Pledged 5,013,805 5,267,544 As of Collateral Held June 30, 2025 December 31, 2024 Repurchase Agreements: Cash 6,238 — Non-cash collateral 13,863 — Total repurchase agreements collateral held 20,101 — Repurchase Agreements Collateral pledged with our repurchase agreement counterparties is segregated in our books and records. The repurchase agreement counterparties have the right to resell and repledge the collateral posted but have the obligation to return the pledged collateral, or substantially the same collateral if agreed to by us, upon maturity of the repurchase agreement. Under the repurchase agreements, the respective lender retains the contractual right to mark the underlying collateral to fair value. We would be required to provide additional collateral to fund margin calls if the value of pledged assets declined. We intend to maintain a level of liquidity that will enable us to meet any reasonably anticipated margin calls. The ratio of our total repurchase agreements collateral pledged to our total repurchase agreements outstanding was 105 % as of June 30, 2025 (December 31, 2024: 105 %) based on the fair value of the securities as reported in our condensed consolidated balance sheets. Interest Rate Swaps As of June 30, 2025 and December 31, 2024, all of our interest rate swaps were centrally cleared by a registered clearing organization such as the Chicago Mercantile Exchange (“CME”) through a Futures Commission Merchant (“FCM”). We are 13 Table of Content s required to pledge initial margin and daily variation margin for our centrally cleared interest rate swaps that is based on the fair value of our contracts as determined by our FCM. Collateral pledged with our FCM is segregated in our books and records and can be in the form of cash or securities. Daily variation margin for centrally cleared interest rate swaps is characterized as settlement of the derivative itself rather than collateral and is recorded as gain (loss) on derivative instruments, net in our condensed consolidated statements of operations. Certain of our FCM agreements include cross default provisions. Futures Contracts We are required to pledge initial margin and daily variation margin for our futures contracts that is based on the fair value of our contracts as determined by our FCM. The daily variation margin payment for our futures contracts is characterized as settlement of the futures contract itself rather than collateral and is recorded as gain (loss) on derivative instruments, net in our condensed consolidated statement of operations. TBAs Our TBAs provide for bilateral collateral pledging based on market value as determined by our counterparties. Collateral pledged with our TBA counterparties is segregated in our books and records and can be in the form of cash or securities. Our counterparties have the right to repledge the collateral posted and have the obligation to return the pledged collateral, or substantially the same collateral, if agreed to by us, as the market value of the contracts changes. Note 6 – Derivatives and Hedging Activities The following table summarizes changes in the notional amount of our derivative instruments during 2025. $ in thousands Notional Amount as of December 31, 2024 Additions Settlement, Termination, Expiration or Exercise Notional Amount as of June 30, 2025 Interest Rate Swaps 3,265,000 725,000 ( 485,000 ) 3,505,000 Futures Contracts 1,402,000 2,927,000 ( 3,499,000 ) 830,000 TBA Purchase Contracts 100,000 2,556,700 ( 2,656,700 ) — TBA Sale Contracts ( 100,000 ) ( 2,556,700 ) 2,656,700 — Total 4,667,000 3,652,000 ( 3,984,000 ) 4,335,000 Refer to Note 5 - "Collateral Positions" for further information regarding our collateral pledged to and received from our derivative counterparties. Interest Rate Swaps At each settlement date, we typically refinance each repurchase agreement at the market interest rate at that time. Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposures to interest rate movements. To accomplish these objectives, we primarily use interest rate swaps, as well as futures contracts, as part of our interest rate risk management strategy. Under the terms of our interest rate swap contracts, we make fixed-rate payments to a counterparty in exchange for the receipt of floating-rate amounts over the life of the agreements without exchange of the underlying notional amount. As of June 30, 2025 and December 31, 2024, we had interest rate swaps whereby we pay interest at a fixed rate and receive floating interest based on the secured overnight financing rate (“SOFR”) with the following maturities outstand ing . $ in thousands As of June 30, 2025 Maturities Notional Amount Weighted Average Fixed Pay Rate Weighted Average Floating Receive Rate Weighted Average Years to Maturity Less than 3 years 1,380,000 0.31 % 4.45 % 2.0 3 to 5 years 375,000 0.39 % 4.45 % 3.8 5 to 7 years 750,000 0.57 % 4.45 % 5.3 7 to 10 years 555,000 4.14 % 4.45 % 9.6 Greater than 10 years 445,000 1.99 % 4.45 % 19.3 Total 3,505,000 1.19 % 4.45 % 6.3 14 Table of Content s $ in thousands As of December 31, 2024 Maturities Notional Amount Weighted Average Fixed Pay Rate Weighted Average Floating Receive Rate Weighted Average Years to Maturity Less than 3 years 1,730,000 1.06 % 4.49 % 2.2 3 to 5 years 375,000 0.39 % 4.49 % 4.3 5 to 7 years 750,000 0.57 % 4.49 % 5.8 Greater than 10 years 410,000 1.83 % 4.49 % 18.9 Total 3,265,000 0.97 % 4.49 % 5.3 Futures Contracts We use futures contracts to help mitigate the potential impact of changes in interest rates on our performance. The table below presents certain details of our futures contracts as of June 30, 2025 and December 31, 2024. As of June 30, 2025 December 31, 2024 $ in thousands Notional Amount - Short Notional Amount - Short 10 year U.S. Treasury futures 360,000 136,000 Ultra 10 year U.S. Treasury futures 280,000 1,057,000 30 year U.S. Treasury futures 190,000 209,000 Total 830,000 1,402,000 TBAs TBAs are forward contracts for the purchase or sale of Agency RMBS that specify the price, issuer, term and coupon of the securities to be delivered, but the actual securities are not identified until shortly before the TBA settlement date. Our primary use of TBAs that we do not intend to physically settle has been in long positions as an alternative means of investing in and financing Agency RMBS. During the second quarter of 2025, we used short positions in TBAs to manage risk and economically hedge a portion of our exposure to changes in Agency RMBS valuations. The tables below presents certain characteristics of our TBAs accounted for as derivatives as of December 31, 2024. We did not have any TBAs outstanding as of June 30, 2025. $ in thousands As of December 31, 2024 Notional Amount Implied Cost Basis Implied Market Value Net Carrying Value - Asset (Liability) (1) TBA Purchase Contracts 100,000 99,800 99,173 ( 627 ) TBA Sale Contracts ( 100,000 ) ( 99,194 ) ( 99,173 ) 21 Net TBA Derivatives — 606 — ( 606 ) (1) Derivative assets and derivative liabilities related to TBAs are presented gross on the condensed consolidated balance sheets. 15 Table of Content s Tabular Disclosure of the Effect of Derivative Instruments on the Balance Sheets The table below presents the fair value of our derivative financial instruments, as well as their classification on the condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024. $ in thousands Derivative Assets Derivative Liabilities As of As of June 30, 2025 December 31, 2024 June 30, 2025 December 31, 2024 Balance Sheets Fair Value Fair Value Balance Sheets Fair Value Fair Value Interest Rate Swaps Asset — 1,549 Interest Rate Swaps Liability 6,394 — Futures Contracts — 3,463 Futures Contracts 4,381 — TBAs — 21 TBAs — 627 Total Derivative Assets — 5,033 Total Derivative Liabilities 10,775 627 The following tables summarize the effect of interest rate swaps, futures contracts and TBAs reported in gain (loss) on derivative instruments, net on the condensed consolidated statements of operations for the three and six months ended June 30, 2025 and 2024. $ in thousands Three Months Ended June 30, 2025 Derivative not designated as hedging instrument Realized gain (loss) on derivative instruments, net Contractual net interest income (expense) Unrealized gain (loss), net Gain (loss) on derivative instruments, net Interest Rate Swaps ( 36,316 ) 28,631 ( 8,485 ) ( 16,170 ) Futures Contracts ( 9,834 ) — ( 3,672 ) ( 13,506 ) TBAs ( 1,458 ) — 218 ( 1,240 ) Total ( 47,608 ) 28,631 ( 11,939 ) ( 30,916 ) $ in thousands Three Months Ended June 30, 2024 Derivative not designated as hedging instrument Realized gain (loss) on derivative instruments, net Contractual net interest income (expense) Unrealized gain (loss), net Gain (loss) on derivative instruments, net Interest Rate Swaps ( 22,871 ) 43,271 8,860 29,260 TBAs 527 — ( 1,525 ) ( 998 ) Total ( 22,344 ) 43,271 7,335 28,262 $ in thousands Six Months Ended June 30, 2025 Derivative not designated as hedging instrument Realized gain (loss) on derivative instruments, net Contractual net interest income (expense) Unrealized gain (loss), net Gain (loss) on derivative instruments, net Interest Rate Swaps ( 112,575 ) 56,710 ( 7,943 ) ( 63,808 ) Futures Contracts ( 38,516 ) — ( 7,844 ) ( 46,360 ) TBAs 1,967 — 606 2,573 Total ( 149,124 ) 56,710 ( 15,181 ) ( 107,595 ) $ in thousands Six Months Ended June 30, 2024 Derivative not designated as hedging instrument Realized gain (loss) on derivative instruments, net Contractual net interest income (expense) Unrealized gain (loss), net Gain (loss) on derivative instruments, net Interest Rate Swaps 25,811 88,558 8,052 122,421 TBAs 527 — ( 1,525 ) ( 998 ) Total 26,338 88,558 6,527 121,423 16 Table of Content s Note 7 – Offsetting Assets and Liabilities Certain of our repurchase agreements and derivative transactions are governed by underlying agreements that generally provide for a right of offset under master netting arrangements (or similar agreements) in the event of default or in the event of bankruptcy of either party to the transactions. Assets and liabilities subject to such arrangements are presented on a gross basis on the condensed consolidated balance sheets. The following tables present information about the assets and liabilities that are subject to master netting arrangements (or similar agreements) and can potentially be offset on our condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024. The daily variation margin payments for centrally cleared interest rate swaps and futures contracts are characterized as settlement of the derivative itself rather than collateral. Our derivative liabilities of $ 6.4 million and $ 4.4 million related to centrally cleared interest rate swaps and futures contracts, respectively, as of June 30, 2025 (December 31, 2024: assets of $ 1.5 million and $ 3.5 million related to centrally cleared interest rate swaps and futures contracts, respectively) are not included in the table below as a result of this characterization of daily variation margin. As of June 30, 2025 Gross Amounts Not Offset with Financial Assets (Liabilities) in the Balance Sheets $ in thousands Gross Amounts of Recognized Assets (Liabilities) Gross Amounts Offset in the Balance Sheets Net Amounts of Assets (Liabilities) Presented in the Balance Sheets Financial Instruments Cash Collateral (Received) Pledged Net Amount Liabilities Repurchase Agreements (1) ( 4,635,881 ) — ( 4,635,881 ) 4,635,881 — — Total Liabilities ( 4,635,881 ) — ( 4,635,881 ) 4,635,881 — — As of December 31, 2024 Gross Amounts Not Offset with Financial Assets (Liabilities) in the Balance Sheets $ in thousands Gross Amounts of Recognized Assets (Liabilities) Gross Amounts Offset in the Balance Sheets Net Amounts of Assets (Liabilities) Presented in the Balance Sheets Financial Instruments Cash Collateral (Received) Pledged Net Amount Assets Derivatives (2) (3) 21 — 21 — — 21 Total Assets 21 — 21 — — 21 Liabilities Derivatives (2) (3) ( 627 ) — ( 627 ) — 580 ( 47 ) Repurchase Agreements (1) ( 4,893,958 ) — ( 4,893,958 ) 4,893,958 — — Total Liabilities ( 4,894,585 ) — ( 4,894,585 ) 4,893,958 580 ( 47 ) (1) The fair value of securities pledged against our borrowings under repurchase agreements was $ 4.9 billion as of June 30, 2025 (December 31, 2024: $ 5.1 billion). We held $ 6.2 million of cash collateral under repurchase agreements as of June 30, 2025 (December 31, 2024: none ). Gross amounts not offset are limited to the net amount of repurchase agreement liabilities presented sufficient to reduce the net amount to zero for each counterparty. Accordingly, cash collateral held under repurchase agreements is not shown in the table above, but the obligation to return the cash collateral is separately reported within collateral held payable on the condensed consolidated balance sheets. (2) Amounts represent derivative assets and derivative liabilities which could potentially be offset against other derivative assets, derivative liabilities and cash collateral pledged or received. (3) Cash collateral pledged by us on our derivatives was $ 131.1 million as of June 30, 2025 (December 31, 2024: $ 138.1 million) of which $ 131.1 million relates to initial margin pledged on centrally cleared interest rate swaps and futures contracts (December 31, 2024: $ 137.5 million). Centrally cleared interest rate swaps and futures contracts are excluded from the tables above. We held no cash collateral on our derivatives as of June 30, 2025 or December 31, 2024. 17 Table of Content s Note 8 – Fair Value of Financial Instruments A three-level valuation hierarchy exists for disclosure of fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions. The three levels are defined as follows: • Level 1 Inputs – Quoted prices for identical instruments in active markets. • Level 2 Inputs – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. • Level 3 Inputs – Instruments with primarily unobservable value drivers. The following tables present our assets and liabilities measured at fair value on a recurring basis. As of June 30, 2025 Fair Value Measurements Using: $ in thousands Level 1 Level 2 Level 3 Total at Fair Value Assets: Mortgage-backed securities (1) — 5,185,559 — 5,185,559 Total assets — 5,185,559 — 5,185,559 Liabilities: Derivative liabilities (2) 4,381 6,394 — 10,775 Total liabilities 4,381 6,394 — 10,775 As of December 31, 2024 Fair Value Measurements Using: $ in thousands Level 1 Level 2 Level 3 Total at Fair Value Assets: Mortgage-backed securities (1) — 5,445,508 — 5,445,508 Derivative assets (2) 3,463 1,570 — 5,033 Total assets 3,463 5,447,078 — 5,450,541 Liabilities: Derivative liabilities (2) — 627 — 627 Total liabilities — 627 — 627 (1) For more detail about the fair value of our MBS, refer to Note 3 - “Mortgage-Backed Securities”. (2) Derivative assets and derivative liabilities include futures contracts as Level 1 measurements and interest rate swaps and TBAs as Level 2 measurements. The following table presents the carrying value and estimated fair value of our financial instruments that are not carried at fair value on the condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024. As of June 30, 2025 December 31, 2024 $ in thousands Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Financial Liabilities Repurchase agreements 4,635,881 4,635,851 4,893,958 4,895,017 Total 4,635,881 4,635,851 4,893,958 4,895,017 The estimated fair value of repurchase agreements is a Level 3 fair value measurement based on an expected present value technique. This method discounts future estimated cash flows using rates we determined best reflect current market interest rates that would be offered for repurchase agreements with similar characteristics and credit quality. 18 Table of Content s Note 9 – Related Party Transactions Our Manager is at all times subject to the supervision and oversight of our board of directors and has only such functions and authority as we delegate to it. Under the terms of our management agreement, our Manager and its affiliates provide us with our management team, including our officers and appropriate support personnel. Each of our officers is an employee of our Manager or one of its affiliates. We do not have any employees. Our Manager is not obligated to dedicate any of its employees exclusively to us, nor is our Manager obligated to dedicate any specific portion of time to our business. The costs of support personnel provided by our Manager for the three and six months ended June 30, 2025 reimbursed or reimbursable by us were $ 257,000 and $ 550,000 , respectively (June 30, 2024: $ 339,000 and $ 570,000 , respectively). When cash collateral is received from counterparties under repurchase agreement borrowings, it is generally invested in a money market fund for which our Manager serves as the investment adviser. These investments are included in cash and cash equivalents and the liability to return the collateral is included in collateral held payable on our condensed consolidated balance sheets. Management Fee We pay our Manager a fee equal to 1.50 % of our stockholders' equity per annum. For purposes of calculating the management fee, stockholders' equity is calculated as average month-end stockholders' equity for the prior calendar quarter as determined in accordance with U.S. GAAP. Stockholders' equity may exclude one-time events due to changes in U.S. GAAP and certain non-cash items upon approval by a majority of our independent directors. During the periods presented in these condensed consolidated financial statements, we did not pay any management fees on our investments in unconsolidated ventures that are managed by an affiliate of our Manager. Expense Reimbursement We are required to reimburse our Manager for operating expenses incurred on our behalf, including directors and officers insurance, accounting services, auditing and tax services, legal services, filing fees, and miscellaneous general and administrative costs. Our reimbursement obligation is not subject to any dollar limitation. The following table summarizes the costs incurred on our behalf by our Manager during the three and six months ended June 30, 2025 and 2024. Three Months Ended June 30, Six Months Ended June 30, $ in thousands 2025 2024 2025 2024 Incurred costs, prepaid or expensed 1,051 1,409 2,691 2,888 Total incurred costs, originally paid by our Manager 1,051 1,409 2,691 2,888 Note 10 – Stockholders’ Equity Preferred Stock In May 2022, our board of directors approved a share repurchase program for our Series B and Series C Preferred Stock. During the three and six months ended June 30, 2025, we repurchased and retired 96,803 and 186,949 shares of Series C Preferred Stock, respectively. During the three and six months ended June 30, 2024, we repurchased and retired 44,661 and 138,008 shares of Series B Preferred Stock, respectively, and 105,492 and 201,409 shares of Series C Preferred Stock, respectively. We redeemed all outstanding shares of our Series B Preferred Stock in December 2024. As of June 30, 2025, we had authority to repurchase 519,710 additional shares of our Series C Preferred Stock under the current preferred stock share repurchase program. Holders of our Series C Preferred Stock are entitled to receive dividends at an annual rate of 7.50 % of the liquidation preference of $ 25.00 per share or $ 1.875 per share per annum until September 27, 2027. After September 27, 2027, holders are entitled to receive dividends at a floating rate equal to three-month CME Term SOFR and the applicable credit spread adjustment ( 0.26161 %) plus a spread of 5.289 % of the $ 25.00 liquidation preference per annum. Dividends are cumulative and payable quarterly in arrears. We have the option to redeem shares of our Series C Preferred Stock on or after September 27, 2027 for $ 25.00 per share, plus any accumulated and unpaid dividends through the date of the redemption. Shares of Series C Preferred Stock are not redeemable, convertible into or exchangeable for any other property or any other securities of the Company before this time, except under circumstances intended to preserve our qualification as a REIT or upon the occurrence of a change in control. 19 Table of Content s Common Stock As of June 30, 2025, we had 6,600,754 shares of our common stock remaining available for sale from time to time in at-the-market or privately negotiated transactions under our equity distribution agreement with placement agents. These shares are registered with the SEC under our shelf registration statement (as amended and/or supplemented). The table below shows sales of our common stock under equity distribution agreements during the three and six months ended June 30, 2025 and 2024. Three Months Ended June 30, Six Months Ended June 30, Shares in ones, $ in thousands 2025 2024 2025 2024 Shares sold 282,750 1,761,155 4,494,807 2,126,993 Cash proceeds, net of fees paid to placement agents 2,163 16,059 38,231 19,378 Fees paid to placement agents 27 204 484 246 During the three and six months ended June 30, 2025 and 2024, we did not repurchase any shares of our common stock. As of June 30, 2025, we had authority to repurchase 1,816,359 shares of our common stock through our common stock share repurchase program. Accumulated Other Comprehensive Income Our accumulated other comprehensive income and other comprehensive income (loss) related to gains and losses on MBS that were not accounted for under the fair value option. Gains and losses on MBS that are accounted for under the fair value option are recorded on our condensed consolidated statements of operations within “Gain (loss) on investments, net”. Dividends The table below summarizes the dividends we declared during the six months ended June 30, 2025 and 2024. $ in thousands, except per share amounts Dividends Declared Series B Preferred Stock Per Share In Aggregate Date of Payment 2024 May 7, 2024 0.4844 2,058 June 27, 2024 February 21, 2024 0.4844 2,086 March 27, 2024 $ in thousands, except per share amounts Dividends Declared Series C Preferred Stock Per Share In Aggregate Date of Payment 2025 May 6, 2025 0.46875 3,297 June 27, 2025 February 19, 2025 0.46875 3,341 March 27, 2025 2024 May 7, 2024 0.46875 3,450 June 27, 2024 February 21, 2024 0.46875 3,499 March 27, 2024 $ in thousands, except per share amounts Dividends Declared Common Stock Per Share In Aggregate Date of Payment 2025 June 24, 2025 0.34 22,545 July 25, 2025 March 25, 2025 0.34 22,420 April 25, 2025 2024 June 24, 2024 0.40 20,255 July 26, 2024 March 26, 2024 0.40 19,530 April 26, 2024 20 Table of Content s Note 11 – Earnings (Loss) per Common Share Earnings (loss) per share for the three and six months ended June 30, 2025 and 2024 is computed as shown in the table below. Three Months Ended June 30, Six Months Ended June 30, In thousands, except per share amounts 2025 2024 2025 2024 Numerator (Income) Basic Earnings: Net income (loss) available to common stockholders ( 26,567 ) ( 18,766 ) ( 10,278 ) 4,964 Denominator (Weighted Average Shares) Basic Earnings: Shares available to common stockholders 66,006 49,365 64,434 48,949 Effect of dilutive securities: Restricted stock awards — — — 1 Dilutive Shares 66,006 49,365 64,434 48,950 Earnings (loss) per share: Net income (loss) attributable to common stockholders Basic ( 0.40 ) ( 0.38 ) ( 0.16 ) 0.10 Diluted ( 0.40 ) ( 0.38 ) ( 0.16 ) 0.10 The following potential weighted average common shares were excluded from diluted earnings per share for the three and six months ended June 30, 2025 as the effect would be antidilutive: 48 and 1,069 for restricted stock awards, respectively (three months ended June 30, 2024: 822 for restricted stock awards). Note 12 – Commitments and Contingencies Commitments and contingencies may arise in the ordinary course of business. As of June 30, 2025, we were not aware of any reported or unreported contingencies. Note 13 – Subsequent Events Dividends On August 7, 2025, we declared a Series C Preferred Stock dividend of $ 0.46875 per share payable on September 29, 2025 to our stockholders of record as of September 5, 2025. 21 Table of Content s