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Item 9A. Controls and Procedures

2026-02-23 compared with 2025-02-20 · 224 added, 347 removed, 896 unchanged (39% of the section changed)

19 unchanged sentences

Other Information.

Rule 10b5-1 Trading Plans

During the fiscal quarter ended December 31, 2025, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” as each term is defined in Item 408 of Regulation S-K.

Series C Preferred Stock Dividends

We declared a Series C Preferred Stock dividend of $0.46875 per share on February 18, 2026 that is payable on March 27, 2026 to stockholders of record at the close of business on March 5, 2026.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

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(a)(2) Financial Statement Schedules:

Refer to Index to Financial Statement Schedules contained herein on page 67 of this Report.

Not applicable.

(a)(3) Exhibits:

Refer to Exhibit Index starting on page 66 of this Report.

Form 10-K Summary.

Not applicable.

Exhibit Index

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3.3 Articles Supplementary classifying 4,000,000 shares of the Company's preferred stock as additional Series C Shares, incorporated by reference to Exhibit 3.3 to our Current Report on Form 8-K, filed with the SEC on March 19, 2019.

3.4 Articles Supplementary reclassifying 2,200,000 shares of authorized but unissued shares of Series B Preferred Stock as shares of Preferred Stock without designation, incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K, filed with the SEC on December 27, 2024.

3.4 Articles of Amendment of Invesco Mortgage Capital Inc., incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K, filed with the SEC on June 3, 2022.

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2009 Equity Incentive Plan (May 2021), incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q, filed with the SEC on August 4, 2021.

10.7 Equity distribution agreement, dated August 9, 2024, among Invesco Mortgage Capital Inc., IAS Operating Partnership LP, Invesco Advisers, Inc., BTIG, LLC, Citizens JMP Securities, LLC and JonesTrading Institutional Services LLC, incorporated by reference to Exhibit 1.1 to our Current Report on Form 8-K, filed with the SEC on August 9, 2024.

10.7 Equity Distribution Agreement, dated August 8, 2025 among Invesco Mortgage Capital Inc., IAS Operating Partnership LP, Invesco Advisers, Inc., BTIG, LLC, Citizens JMP Securities, LLC, Janney Montgomery Scott LLC and JonesTrading Institutional Services LLC (incorporated by reference to Exhibit 1.1 to the Current Report on Form 8-K, filed with the SEC on August 8, 2025).

19 Insider Trading Policy, incorporated by reference to Exhibit 19 to our Annual Report on Form 10-K filed with the SEC on February 22, 2024.

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§ Management contract or compensatory plan or arrangement.

(b) Exhibits :

Refer to (a)(3) above.

Refer to (a)(2) above.

* Filed herewith

** Furnished herewith

Form 10-K Summary.

Not applicable.

INDEX TO FINANCIAL STATEMENTS

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Notes to Consolidated Financial Statements

INDEX TO FINANCIAL STATEMENT SCHEDULES

Schedule IV - Mortgage Loans on Real Estate as of December 31, 2024

Report of Independent Registered Public Accounting Firm

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We have audited the accompanying consolidated balance sheets of Invesco Mortgage Capital Inc.

and its subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations, of comprehensive income (loss), of stockholders' equity and of cash flows for each of the three years in the period ended December 31, 2024, including the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”).

and its subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations, of comprehensive income (loss), of stockholders' equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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CONSOLIDATED BALANCE SHEETS

December 31, 2024 December 31, 2023

$ in thousands except share amounts

$ in thousands except share amounts December 31, 2025 December 31, 2024

Mortgage-backed securities, at fair value (including pledged securities of $ 5,879,318 and $ 5,129,486 , respectively, net of allowance for credit losses of $ 0 and $ 654 , respectively)

6,276,609 5,445,508

Treasury securities, at fair value — 11,214

Cash and cash equivalents 56,040 73,403

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Accrued interest payable 28,664 32,711

Collateral held payable — 2,475

Accounts payable and accrued expenses 1,580 1,619

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50,000,000 shares authorized:

7.75 % Fixed-to-Floating Series B Cumulative Redeemable Preferred Stock:

no shares and 4,385,997 shares issued and outstanding, respectively ($ 0 and $ 109,650 aggregate liquidation preference, respectively)

7.50 % Fixed-to-Floating Series C Cumulative Redeemable Preferred Stock:

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Common Stock, par value $ 0.01 per share;

134,000,000 and 67,000,000 shares authorized, respectively;

134,000,000 shares authorized;

71,790,532 and 61,729,693 shares issued and outstanding, respectively

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Interest income 295,287 286,546 277,929

Mortgage-backed and other securities 286,546 277,929 192,566

Commercial loan — — 1,947

Total interest income 286,546 277,929 194,513

Interest expense 219,865 249,719 228,229

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Dividends to preferred stockholders ( 13,120 ) ( 22,011 ) ( 23,153 )

Gain on repurchase and retirement of preferred stock 427 1,471 14,179

Gain (loss) on repurchase and retirement of preferred stock 14 427 1,471

Issuance and redemption costs of redeemed preferred stock — ( 3,535 ) —

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Unrealized gain (loss) on mortgage-backed securities, net 229 ( 1,051 ) ( 91 )

Reclassification of unrealized (gain) loss on sale of mortgage-backed securities to gain (loss) on investments, net ( 402 ) — —

Reclassification of unrealized loss on available-for-sale securities to (increase) decrease in provision for credit losses — 526 320

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Dividends to preferred stockholders ( 13,120 ) ( 22,011 ) ( 23,153 )

Gain on repurchase and retirement of preferred stock 427 1,471 14,179

Gain (loss) on repurchase and retirement of preferred stock 14 427 1,471

Issuance and redemption costs of redeemed preferred stock — ( 3,535 ) —

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Shares Amount Shares Amount Shares Amount

Balance at December 31, 2021 6,200,000 149,860 11,500,000 278,108 32,987,478 330 3,819,375 37,286 ( 2,882,824 ) 1,402,135

Balance as of December 31, 2022 4,537,634 109,679 7,816,470 189,028 38,710,916 387 3,901,562 10,761 ( 3,407,342 ) 804,075

Net income (loss) — — — — — — — — ( 15,859 ) ( 15,859 )

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Stock awards — — — — 50,239 — — — — —

Payments in lieu of fractional shares in connection with one-for-ten reverse stock split — — — — ( 46 ) — ( 1 ) — — ( 1 )

Repurchase and retirement of preferred stock ( 151,637 ) ( 3,665 ) ( 271,031 ) ( 6,554 ) — — — — 1,471 ( 8,748 )

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Amortization of equity-based compensation — — — — — — 569 — — 569

Balance at December 31, 2022 4,537,634 109,679 7,816,470 189,028 38,710,916 387 3,901,562 10,761 ( 3,407,342 ) 804,075

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) — — — — — — — — 59,882 59,882

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Stock awards — — — — 64,099 1 — — — 1

Redemption of preferred stock ( 4,247,989 ) ( 102,678 ) — — — — — — ( 3,535 ) ( 106,213 )

Repurchase and retirement of preferred stock ( 138,008 ) ( 3,336 ) ( 338,780 ) ( 8,193 ) — — — — 427 ( 11,102 )

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Amortization of equity-based compensation — — — — — — 586 — — 586

Balance at 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

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) — — — — — — — — 101,279 101,279

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Stock awards — — — — 77,660 1 — — — 1

Redemption of preferred stock ( 4,247,989 ) ( 102,678 ) — — — — — — ( 3,535 ) ( 106,213 )

Repurchase and retirement of preferred stock — — ( 352,528 ) ( 8,525 ) — — — — 14 ( 8,511 )

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Amortization of equity-based compensation — — — — — — 687 — — 687

Balance at December 31, 2024 — — 7,206,659 174,281 61,729,693 617 4,127,807 173 ( 3,572,149 ) 730,729

Balance as of December 31, 2025 — — 6,854,131 165,756 71,790,532 718 4,209,977 — ( 3,578,907 ) 797,544

The accompanying notes are an integral part of these consolidated financial statements.

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Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Amortization of mortgage-backed and other securities premiums and (discounts), net ( 13,310 ) ( 14,380 ) ( 1,118 )

Amortization of premiums and (discounts), net ( 5,658 ) ( 13,310 ) ( 14,380 )

Realized and unrealized (gain) loss on derivative instruments, net 217,170 ( 14,872 ) 177,170

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Net change in due from counterparties and collateral held payable on derivative instruments 580 ( 580 ) 1,584

Principal payments from commercial loan held-for-investment — — 23,917

Net cash provided by (used in) investing activities ( 892,868 ) ( 497,430 ) ( 536,803 )

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Repurchase of preferred stock ( 8,511 ) ( 11,102 ) ( 8,748 )

Cash paid in lieu of fractional shares in connection with one-for-ten reverse stock split — — ( 1 )

Proceeds from repurchase agreements 48,362,061 38,471,781 41,084,893

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Non-cash Investing and Financing Activities Information

Net change in unrealized gain (loss) on mortgage-backed securities classified as available-for-sale 525 ( 229 ) ( 6,280 )

Dividends declared not paid 25,845 24,692 19,384

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government agency such as Ginnie Mae or a federally chartered corporation such as Fannie Mae or Freddie Mac (collectively “Agency CMBS”).

• CMBS that are not guaranteed by a U.S.

government agency or a federally chartered corporation (“non-Agency CMBS”);

• RMBS that are not guaranteed by a U.S.

government agency or a federally chartered corporation (“non-Agency RMBS”).

During the periods presented in these consolidated financial statements, we also invested in a commercial mortgage loan, U.S.

During the periods presented in these 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 real estate-related financing arrangements in the form of unconsolidated ventures.

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(our “Manager”), a registered investment adviser and an indirect, wholly-owned subsidiary of Invesco Ltd.

(“Invesco”), a leading independent global investment management firm.

(“Invesco”), an 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.

To maintain our REIT qualification, we are required to distribute at least 90 % of our REIT taxable income to our stockholders annually, and we will generally not be subject to U.S.

federal or state corporate income tax to the extent that we distribute all of our annual taxable income to our stockholders on a timely basis.

It is our intention to distribute 100 % of our taxable income within the time limits prescribed by the Internal Revenue Code.

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”).

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Basis of Presentation and Consolidation

Common share amounts prior to June 3, 2022 have been adjusted on a retroactive basis to reflect our one-for-ten reverse stock split, which was effected following the close of business on June 3, 2022.

Our consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S.

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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 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

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Actual results may differ from those estimates.

Translation of Foreign Currencies

The functional currency of the Company and its subsidiaries is U.S.

Transactions in foreign currencies are recorded at the rates of exchange prevailing on the date of the transactions.

At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are remeasured at the rates prevailing at the balance sheet date.

Gains and losses arising on revaluation are included in other investment income (loss), net on the consolidated statements of operations.

Our reporting currency is U.S.

We previously had an investment in an unconsolidated venture whose functional currency was the Euro.

Upon consolidation, the assets and liabilities of our investment in an unconsolidated venture were translated to U.S.

dollars using the period-end exchange rates.

Equity accounts were translated at historical rates, except for the change in retained earnings during the year, which were the result of the income statement translation process.

Revenue and expense accounts were translated using the weighted average exchange rate during the period.

The cumulative translation adjustments associated with the investment in the unconsolidated venture were originally recorded in accumulated other comprehensive income (loss), a component of consolidated stockholders’ equity and reclassified to the consolidated statement of operations in the first quarter of 2023.

We have historically hedged foreign currency exposure with derivative financial instruments.

Refer to Note 7 - “Derivatives and Hedging Activities” for further information.

Fair Value Measurements

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Our MBS are classified as Level 2 measurements in the fair value hierarchy.

Our futures contracts are valued based on exchange pricing for identical instruments and classified as Level 1 measurements in the fair value hierarchy.

Treasury futures contracts are valued based on exchange pricing for identical instruments and classified as Level 1 measurements in the fair value hierarchy.

Interest rate swaps are valued using the daily settlement price, or fair value, determined by the clearing exchange based on a pricing model that references observable market data, including current benchmark rates and the forward yield curve.

The valuation methodology for TBAs is similar to that of our Agency RMBS.

The valuation methodology for to-be-announced securities forward contracts (“TBAs”) is similar to that of our Agency RMBS.

Our interest rate swaps and TBAs are classified as Level 2 measurements in the fair value hierarchy.

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Transparency tools are also available from the pricing services which help us understand data points and/or market inputs used for pricing securities.

We also review daily price movements for interest rate swaps, futures contracts, currency forward contracts and TBAs.

We also review daily price movements for interest rate swaps, U.S.

Treasury futures contracts and TBAs.

Price movements exceeding pre-defined tolerance levels are investigated using an alternate price from another pricing service as well as available market information.

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A questionnaire is sent to pricing services which requests information such as changes in methodologies, business recovery preparedness, internal controls and confirmation that evaluations are generated based on market data.

An independent pricing service valued our commercial loan investment using a discounted cash flow analysis.

The yield used in the discounted cash flow analysis was determined by comparing the features of the loan to the interest rates and terms required by lenders in the new loan origination market for similar loans and the yield required by investors acquiring mezzanine loans in the secondary market as well as a comparison of current market and collateral conditions to those present at origination.

Mortgage-Backed Securities

We record our purchases of MBS on the trade date and report these securities at fair value as described above in the Fair Value Measurements section of this Note 2 to our consolidated financial statements.

Approximately $ 5.4 billion or 99.7 % of our MBS are accounted for under the fair value option as of December 31, 2024 (December 31, 2023:

$ 5.0 billion or 99.7 %).

Under the fair value option, we recognize changes in fair value in our consolidated statements of operations as unrealized gains and losses.

In our view, this election more appropriately reflects the results of our operations because fair value changes are accounted for in the same manner as fair value changes in our economic hedging instruments.

We elected the fair value option for all MBS purchased on or after September 1, 2016 and all RMBS interest-only securities.

We classify the remaining balance of our MBS as available-for-sale ($ 15.0 million or 0.3 % as of December 31, 2024;

$ 15.7 million or 0.3 % as of December 31, 2023).

Unrealized gains or losses on available-for-sale securities are recorded in accumulated other comprehensive income, a separate component of stockholders' equity, until sale or disposition of the investment.

Upon sale or disposition, the cumulative gain or loss previously reported in stockholders' equity is recognized in income.

We have elected the fair value option for all of our MBS held as of December 31, 2025 (December 31, 2024:

$ 5.4 billion or 99.7 % of our MBS).

Under the fair value option, we recognize changes in fair value in our consolidated statements of operations.

In our view, the 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 our economic hedging instruments.

We elected the fair value option for all MBS purchased on or after September 1, 2016.

Our MBS that were held as of December 31, 2024 for which we had not elected the fair value option were classified as available-for-sale, with unrealized gains or losses recorded in accumulated other comprehensive income, a separate component of stockholders' equity, until sale or disposition of the investment.

Upon sale or disposition, the cumulative gain or loss previously reported in stockholders' equity was recognized in income.

Realized gains and losses from sales of MBS are determined based upon the specific identification method.

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Allowances for Credit Losses on Available-for-Sale Securities

For non-Agency RMBS and non-Agency CMBS that are classified as available-for-sale, we use a discounted cash flow method to estimate and recognize an allowance for credit losses.

We calculate the allowance for credit losses as the difference between the investment's amortized cost basis and expected cash flows discounted at the effective interest rate used to recognize interest income on the investment.

In developing an expectation of credit losses, we use internal models that analyze the loans underlying each investment and evaluate factors including, but not limited to, delinquency status, loan-to-value ratios, borrower credit scores, occupancy status and geographic concentration.

We place reliance on these internal models in determining credit quality.

We record an allowance for credit losses as a contra-asset on the consolidated balance sheets and a provision for credit losses in the consolidated statements of operations.

Credit losses are accreted into earnings over time at the effective interest rate used to recognize interest income.

Subsequent favorable or adverse changes in the amount of expected credit losses are recognized immediately in earnings.

If the allowance for credit losses has been reduced to zero, we reflect the remaining favorable changes as a prospective adjustment to the effective interest rate of the investment.

The allowance for credit losses is limited to the amount by which the investment’s amortized cost exceeds fair value.

When the allowance for credit losses is limited, the effective interest rate used to recognize interest income and accrete credit losses is prospectively adjusted.

We do not record an allowance for credit losses when an investment’s fair value exceeds its amortized cost.

Recoveries of amounts previously written off relating to improvements in cash flows are recognized in earnings when received.

We record provisions for credit losses, reductions in provisions for credit losses, accretion of credit losses, and recoveries of amounts previously written off within (increase) decrease in provision for credit losses in our consolidated statements of operations.

When we determine that we intend to sell, or more likely than not will be required to sell, an available-for-sale security in an unrealized loss position before we recover its amortized cost, we write off any allowance for credit losses and write down the investment’s amortized cost to its fair value.

We record the write off of the allowance for credit losses within (increase) decrease in provision for credit losses on our consolidated statements of operations and write down of the available-for-sale security within gain (loss) on investments, net in our consolidated statements of operations.

We present accrued interest receivable separately from our investment portfolio on our consolidated balance sheets.

We do not estimate an allowance for credit losses on accrued interest receivable because we write off accrued interest receivable as a reduction to interest income if it is not received when due.

Prior to the sale of our MBS that were classified as available-for-sale, we were required to evaluate those securities for credit losses.

Allowances for credit losses were estimated based on a comparison of the investment's amortized cost basis to its discounted expected cash flows.

Credit losses were recorded within (increase) decrease in provisions for credit losses in our consolidated statements of operations.

Treasury Securities

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Treasury securities are recognized within gain (loss) on investments, net in our consolidated statements of operations.

Commercial Loan Held-For-Investment

We reported our commercial loan investment at fair value as described in the Fair Value Measurements section of this Note 2 to the consolidated financial statements.

We recorded changes in fair value within gain (loss) on investments, net in our consolidated statements of operations.

Interest Income Recognition

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Premiums or discounts are amortized or accreted into interest income over the life of the investment using the effective interest method.

For Agency MBS that cannot be prepaid in such a way that we would not recover substantially all of our initial investment, interest income recognition is based on contractual cash flows.

We do not estimate prepayments in applying the effective interest method.

Interest income on our MBS where we may not recover substantially all of our initial investment is based on estimated future cash flows.

We estimate future expected cash flows at the time of purchase and determine the effective interest rate based on these estimated cash flows and our purchase price.

Over the life of the investments, we update these estimated future cash flows and compute a revised yield based on the current amortized cost of the investment, unless those changes are reflected in an allowance for credit losses.

In situations where an allowance for credit losses is limited by the fair value of the investment, we compute the yield as the rate that equates expected future cash flows to the current fair value of the investment.

In estimating these future cash flows, there are a number of assumptions that are subject to uncertainties and contingencies, including but not limited to the rate and timing of principal payments (prepayments, repurchases, defaults and liquidations), the pass through or coupon rate, and interest rate fluctuations.

Over the life of the investments, we update these estimated future cash flows and compute a revised yield based on the current amortized cost of the investment In estimating these future cash flows, there are a number of assumptions that are subject to uncertainties and contingencies, including but not limited to the rate and timing of principal payments, the pass through or coupon rate and interest rate fluctuations.

These uncertainties and contingencies are difficult to predict and are subject to future events that may impact our estimate and our interest income.

Changes in our original or most recent cash flow projections may result in a prospective change in interest income recognized on these securities, or the amortized cost of these securities, including write-offs of amortized cost when certain amounts are deemed uncollectible.

For non-Agency RMBS not of high credit quality, when actual cash flows vary from expected cash flows, the difference is recorded as an adjustment to the amortized cost of the security, unless those changes are reflected in an allowance for credit losses, and the security's yield is revised prospectively.

For Agency RMBS and Agency CMBS that cannot be prepaid in such a way that we would not recover substantially all of our initial investment, interest income recognition is based on contractual cash flows.

We do not estimate prepayments in applying the effective interest method.

Commercial Loans

We recognized interest income from commercial loans when earned and deemed collectible, or until a loan became past due based on the terms of the loan agreement.

Changes in our original or most recent cash flow projections may result in a prospective change in interest income recognized on these securities, or the amortized cost of these securities.

For non-Agency RMBS not of high credit quality, when actual cash flows varied from expected cash flows, the difference was recorded as an adjustment to the amortized cost of the security and the security's yield was revised prospectively.

Treasury Securities

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Treasury securities is accrued based on the outstanding principal balance of the securities and their contractual terms.

Interest income on U.S.

Treasury securities is recognized within mortgage-backed and other securities interest income on our consolidated statements of operations.

Cash and Cash Equivalents

We consider all highly liquid investments that have original or remaining maturity dates of three months or less when purchased to be cash equivalents.

At December 31, 2024, we had cash and cash equivalents in excess of the FDIC deposit insurance limit of $ 250,000 per institution.

As of December 31, 2025, we had cash and cash equivalents in excess of the FDIC deposit insurance limit of $ 250,000 per institution.

We mitigate our risk of loss by actively monitoring our counterparties.

Restricted Cash

Restricted cash represents cash posted with counterparties as collateral for various derivative instruments.

Cash posted with counterparties as collateral is not available for general corporate purposes.

Restricted cash represents initial margin posted on our interest rate swaps and futures contracts.

Cash posted as initial margin is not available for general corporate purposes.

Due from Counterparties / Collateral Held Payable

Due from counterparties represents cash posted with our counterparties as collateral for our derivatives and repurchase agreements.

Collateral held payable represents cash posted with us by counterparties as collateral under our derivatives and repurchase agreements.

If we receive collateral other than cash from our counterparties, such assets are not included in our consolidated balance sheets.

If we either sell such assets or pledge the assets as collateral under a repurchase agreement, the cash received and the corresponding liability is reflected on the consolidated balance sheets .

Due from counterparties represents cash variation margin posted with our counterparties as collateral on our TBAs and repurchase agreements.

Collateral held payable represents cash variation margin posted with us by counterparties as collateral on our TBAs and repurchase agreements.

If we receive collateral other than cash from our counterparties under repurchase agreements, such assets are not included in our consolidated balance sheets.

If we either sell such assets or pledge the assets as collateral under a repurchase agreement, the cash received and the corresponding liability are reflected on the consolidated balance sheets.

Investment Related Receivable / Investment Related Payable

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Investment related payable consists of liabilities for mortgage-backed securities that we have purchased but have not settled with the seller.

Investments in Unconsolidated Ventures

Our non-controlling investments in unconsolidated ventures were included in other assets in our consolidated balance sheets and accounted for under the equity method.

Capital contributions, distributions, profits and losses of the entities were allocated in accordance with the terms of the entities’ operating agreements.

Such allocations may differ from the stated percentage interests, if any, as a result of preferred returns and allocation formulas as described in the entities' operating agreements.

Repurchase Agreements

We have financed our purchases of mortgage-backed securities primarily through the use of repurchase agreements.

Repurchase agreements are treated as collateralized financing transactions and are carried at their contractual amounts, including accrued interest, as specified in the respective agreements.

Repurchase agreements are treated as collateralized financing transactions and are carried at their contractual amounts, including accrued interest that is recorded as accrued interest payable in our consolidated balance sheets, as specified in the respective agreements.

We record the mortgage-backed securities and the related repurchase agreement financing on a gross basis in our consolidated balance sheets, and the corresponding interest income and interest expense on a gross basis in our consolidated statements of operations.

Dividends Payable

Dividends payable represent dividends declared at the balance sheet date that are payable to common stockholders and preferred stockholders.

Dividends payable represent dividends declared at the balance sheet date that are payable to common stockholders and/or preferred stockholders.

Earnings (Loss) per Share

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Comprehensive Income

Our comprehensive income consists of net income, as presented in the consolidated statements of operations, adjusted for unrealized gains and losses on MBS purchased before September 1, 2016, reclassification of unrealized losses on available-for-sale securities to (increase) decrease in provision for credit losses;

Our comprehensive income consists of net income, as presented in the consolidated statements of operations, adjusted as appropriate for items such as unrealized gains and losses on available-for-sale MBS;

reclassification of unrealized gains and losses upon sale of available-for-sale MBS to gain (loss) on investments, net;

reclassification of unrealized losses on available-for-sale securities to (increase) decrease in provision for credit losses;

reclassification of amortization of net deferred gains and losses on de-designated interest rate swaps to repurchase agreements interest expense and currency translation adjustments on an investment in an unconsolidated venture.

Unrealized gains and losses on our MBS purchased before September 1, 2016 are reclassified into net income upon their sale.

Unrealized gains and losses on available-for-sale MBS were reclassified into net income upon their sale.

Accounting for Derivative Financial Instruments

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Changes in the fair value of our derivatives are recorded in gain (loss) on derivative instruments, net in our consolidated statements of operations.

Net interest paid or received under our interest rate swaps is also recognized in gain (loss) on derivative instruments, net in our consolidated statements of operations.

Net interest paid or received under our interest rate swaps is also recognized in gain

(loss) on derivative instruments, net in our consolidated statements of operations.

Cash receipts or payments that are attributed to contractual interest earned or incurred on interest rate swaps are classified as cash flows from operating activities in our consolidated statements of cash flows.

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Amounts recorded in accumulated other comprehensive income (loss) (“AOCI”) before we discontinued cash flow hedge accounting for our interest rate swaps were reclassified to interest expense on repurchase agreements on the consolidated statements of operations as interest was accrued and paid on the related repurchase agreements over the remaining original life of the interest rate swap agreements.

We evaluate the terms and conditions of our holdings of futures contracts, currency forward contracts and TBAs to determine if an instrument has the characteristics of an investment or should be considered a derivative under U.S.

Accordingly, futures contracts, currency forward contracts and TBAs having the characteristics of derivatives are accounted for at fair value with such changes recognized in gain (loss) on derivative instruments, net in the consolidated statements of operations.

The fair value of these futures contracts, currency forward contracts and TBAs is included in derivative assets or derivative liabilities on the consolidated balance sheets.

We elected to be taxed as a REIT commencing with our taxable year ended December 31, 2009.

We evaluate the terms and conditions of our U.S.

Treasury futures contracts, currency forward contracts and TBAs to determine if an instrument has the characteristics of an investment or should be considered a derivative under U.S.

Accordingly, U.S.

Treasury futures contracts, currency forward contracts and TBAs having the characteristics of derivatives are accounted for at fair value with such changes recognized in gain (loss) on derivative instruments, net in the consolidated statements of operations.

The fair value of interest rate swaps, U.S.

Treasury futures contracts, currency forward contracts and TBAs is included in derivative assets or derivative liabilities on the consolidated balance sheets.

Daily variation margin received or paid on interest rate swaps and U.S.

Treasury futures contracts is accounted for as settlement of the derivative itself rather than as collateral and is recorded as a reduction in the corresponding derivative asset or derivative liability.

We elected to be taxed as a REIT.

Accordingly, we will generally not be subject to U.S.

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REIT taxable income will generally differ from net income because the determination of REIT taxable income is based on tax regulations and not financial accounting principles.

We did not incur an income tax liability for the years ended December 31, 2024 and 2023 and do not expect to incur an income tax liability for the year ended December 31, 2025.

Accordingly, our effective tax rate was 0% and we did not pay any income tax.

We have net operating loss carryforwards that do not expire and capital loss carryforwards that expire five years after the fiscal tax years in which they were created.

We do not recognize our net operating loss carryforwards or capital loss carryforwards as deferred tax assets on our consolidated balance sheets because we do not expect to incur income taxes.

We have elected to treat one of our subsidiaries as a taxable REIT subsidiary (“TRS”).

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federal, state and local corporate income taxes.

Our TRS did not generate material taxable income for the years ended December 31, 2024, 2023 and 2022.

Our TRS did not generate taxable income for the years ended December 31, 2025, 2024 and 2023.

We do not have any accruals for uncertain tax positions.

We would recognize interest and penalties related to uncertain tax positions, if any, as income tax expense, which would be included in general and administrative expenses.

Accounting Pronouncements Recently Adopted

In November 2023, the Financial Accounting Standards Board issued an accounting standards update intended to improve reportable segment disclosure requirements on an annual and interim basis.

The amendments require, among other items, enhanced disclosures around significant segment expenses regularly provided to the chief operating decision maker

(“CODM”), as well as the CODM's title and position.

Additionally, the amendments expand the scope of all segment reporting disclosure requirements to include those entities with only a single operating segment, such as us.

Refer to Note 13 “Segment Information” for our segment disclosures.

Our tax returns for tax years 2022 and forward are open to examination by the IRS.

We would recognize interest and penalties, if any, as income tax expense, which would be included in general and administrative expenses.

Recently Issued Accounting Pronouncements

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We are currently evaluating the impact of the new standard.

We reviewed all other recently issued accounting standards updates and determined that they were not expected to have a significant impact on our consolidated financial statements when adopted or did not have a significant impact on our consolidated financial statements upon adoption.

Note 3 – Mortgage-Backed Securities

The following tables summarize our MBS portfolio by asset type at December 31, 2024 and 2023.

The following tables summarize our MBS portfolio by asset type as of December 31, 2025 and 2024.

As of December 31, 2025

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(Discount) Amortized

Cost Allowance for Credit Losses Unrealized

Cost Unrealized

(Loss), net Fair

Value Period-

Value Period-end

30 year fixed-rate pass-through 5,223,764 ( 33,396 ) 5,190,368 118,792 5,309,160 5.46 %

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Agency CMBS 898,047 ( 6,317 ) 891,730 6,399 898,129 4.62 %

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 6,606,785 ( 464,118 ) 6,142,667 133,942 6,276,609 5.37 %

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(2) All Agency collateralized mortgage obligations (“Agency CMO”) are interest-only securities (“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 (“ARM”) 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 interest-only securities (“non-Agency IO”) which represent 96.7 % of principal/notional balance, 34.2 % of amortized cost and 31.0 % of fair value.

As of December 31, 2024

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Cost Allowance for Credit Losses Unrealized

(Loss), net Fair Value Period-

(Loss), net Fair

Value Period-end

30 year fixed-rate pass-through 4,626,174 ( 87,357 ) 4,538,817 — 2,708 4,541,525 5.50 %

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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 %

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Total represents period-end weighted average yield of all mortgage-backed securities.

(2) All Agency Agency-CMO are Agency IO.

(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 ARM loan coupons, while coupon payments on floating rate investments are based upon a spread to a reference index.

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 96.9 % of principal/notional balance, 37.6 % of amortized cost and 31.7 % of fair value.

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 and December 31, 2023.

We have elected the fair value option for all of our RMBS interest-only securities and our MBS purchased on or after September 1, 2016.

As of December 31, 2024 and December 31, 2023, approximately 99.7 % of our MBS were accounted for under the fair value option.

December 31, 2024 December 31, 2023

$ in thousands Available-for-sale Securities Securities under Fair Value Option Total

Fair Value Available-for-sale Securities Securities under Fair Value Option Total

(5) Non-Agency RMBS includes interest-only securities (“non-Agency IO”) which represent 96.7 % of principal/notional balance, 34.2 % of amortized cost and 31.0 % of fair value.

We have elected the fair value option for all of our MBS held as of December 31, 2025.

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.

December 31, 2024

$ in thousands Available-for-sale Securities Securities under Fair Value Option Total Fair Value

30 year fixed-rate pass-through — 4,541,525 4,541,525

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Total 14,950 5,430,558 5,445,508

The components of the carrying value of our MBS portfolio at December 31, 2024 and 2023 are presented below.

Accrued interest receivable on our MBS portfolio, which is recorded within investment related receivable on our consolidated balance sheets, was $ 24.9 million at December 31, 2024 (December 31, 2023:

The components of the carrying value of our MBS portfolio as of December 31, 2025 and 2024 are presented below.

Accrued interest receivable on our MBS portfolio, which is recorded within investment related receivable on our consolidated balance sheets, was $ 27.8 million as of December 31, 2025 (December 31, 2024:

$ 24.9 million).

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Fair value 6,207,289 69,320 6,276,609 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 years ended December 31, 2024 and 2023 is provided below within this Note 3.

(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, solely with respect to December 31, 2024, gains (losses) for available-for-sale securities which were recognized as adjustments to other comprehensive income.

Realization occurred upon sale or settlement of such securities.

Further detail on the components of our total gains (losses) on investments, net for the years ended December 31, 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 December 31, 2025 and 2024.

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Total 6,276,609 5,445,508

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 at December 31, 2024 and 2023.

As of December 31, 2025 Less than 12 Months 12 Months or More Total

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30 year fixed-rate pass-through 463,455 ( 753 ) 6 — — — 463,455 ( 753 ) 6

2,251,552 ( 18,897 ) 29 — — — 2,251,552 ( 18,897 ) 29

Agency CMO 3,863 ( 43 ) 1 — — — 3,863 ( 43 ) 1

— — — 18,909 ( 2,300 ) 5 18,909 ( 2,300 ) 5

Agency CMBS 56,903 ( 480 ) 4 273,789 ( 4,152 ) 11 330,692 ( 4,632 ) 15

524,221 ( 1,276 ) 11 273,789 ( 4,152 ) 11 798,010 ( 5,428 ) 22

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 are recorded in accumulated other comprehensive income.

These losses are 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 .

(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

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Losses Number of Securities

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)

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(1) Fair value option has been elected for all Agency securities in an unrealized loss position.

(2) Unrealized losses on non-Agency CMBS are recorded in accumulated other comprehensive income.

These losses are not reflected in an allowance for credit losses based on a comparison of discounted expected cash flows to current amortized cost basis.

(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 year ended December 31, 2025, we sold our remaining available-for-sale MBS for cash proceeds of $ 15.1 million and recognized net gains upon sale of $ 402,000 .

We did not sell any available-for-sale MBS during the years ended December 31, 2024 or 2023.

The following table presents a roll-forward of our allowance for credit losses.

$ in thousands Years Ended December 31,

2025 2024 2023

Beginning allowance for credit losses ( 654 ) ( 320 ) —

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Write-offs charged against the allowance 124 —

Reductions for securities sold 654 — —

Ending allowance for credit losses — ( 654 ) ( 320 )

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Net unrealized gains (losses) on MBS accounted for under the fair value option 151,761 ( 124,329 ) 50,364

Net unrealized gains (losses) on commercial loan — — 404

Net unrealized gains (losses) on U.S.

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For the Year ended December 31, 2025

$ in thousands Coupon

Interest Net (Premium

Amortization)/ Discount Accretion Interest

$ in thousands Coupon Interest Net (Premium Amortization)/ Discount Accretion Interest Income

Agency RMBS 255,075 ( 1,726 ) 253,349

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Non-Agency RMBS 296 ( 12 ) 284

Treasury securities 22 ( 1 ) 21

Other (inclusive of interest earned on cash balances) 593 — 593

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For the Year ended December 31, 2024

$ in thousands Coupon

Interest Net (Premium Amortization)/Discount Accretion Interest

$ in thousands Coupon Interest Net (Premium Amortization)/Discount Accretion Interest Income

Agency RMBS 258,864 4,948 263,812

Agency CMBS 19,259 433 19,692

Non-Agency CMBS 498 496 994

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For the Year ended December 31, 2023

$ in thousands Coupon

Interest Net (Premium Amortization)/Discount Accretion Interest

$ in thousands Coupon Interest Net (Premium Amortization)/Discount Accretion Interest Income

Agency RMBS 266,193 5,160 271,353

4 unchanged sentences

Total 271,856 6,073 277,929

Note 4 – U.S.

Treasury Securities

We did not hold any U.S.

Treasury securities as of December 31, 2024.

The following table presents the components of the carrying value of our U.S.

Treasury security as of December 31, 2023.

We classified the security as a trading security and sold the security in 2024.

$ in thousands December 31, 2023

Principal balance 10,000

Unamortized premium 842

Amortized cost 10,842

Unrealized gain (loss) 372

Fair value 11,214

Note 4 – Borrowings

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Our repurchase agreements are subject to certain financial covenants.

We were in compliance with all of these covenants as of December 31, 2024.

The following tables summarize certain characteristics of our repurchase agreements at December 31, 2024 and 2023.

We were in compliance with all of these covenants as of December 31, 2025 and 2024.

The following table summarizes certain characteristics of our borrowings as of December 31, 2025 and 2024.

Refer to Note 5 - “Collateral Positions” for collateral pledged and held under our repurchase agreements.

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Repurchase agreements - Agency RMBS 4,758,568 4.04 % 24 4,112,219 4.80 % 29

Repurchase Agreements - Agency CMBS 781,739 4.77 % 32 — N/A N/A

Repurchase agreements - Agency CMBS 860,687 4.04 % 20 781,739 4.77 % 32

Total borrowings 5,619,255 4.04 % 23 4,893,958 4.80 % 29

Note 5 – Collateral Positions

The following table summarizes the fair value of collateral that we pledged and held under our repurchase agreements, interest rate swaps, futures contracts, and TBAs as of December 31, 2024 and 2023.

The following table summarizes the fair value of collateral that we pledged and held under our repurchase agreements and derivative instruments as of December 31, 2025 and 2024.

Refer to Note 2 - “Summary of Significant Accounting Policies - Fair Value Measurements” for a description of how we determine fair value.

Agency RMBS and Agency CMBS collateral pledged is included in mortgage-backed securities on our consolidated balance sheets.

Cash collateral pledged on centrally cleared interest rate swaps and futures contracts is classified as restricted cash on our consolidated balance sheets.

Cash collateral pledged on centrally cleared interest rate swaps and U.S.

Treasury futures contracts is classified as restricted cash on our consolidated balance sheets.

Cash collateral pledged on TBAs accounted for as derivatives is classified as due from counterparties on our consolidated balance sheets.

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Non-cash collateral held is only recognized if the counterparty defaults or if we sell the pledged collateral.

As of December 31, 2024 and 2023, we did not recognize any non-cash collateral held on our consolidated balance sheets.

As of December 31, 2025 and 2024, we did not hold any cash or non-cash collateral.

$ in thousands As of

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Total collateral pledged 5,989,709 5,267,544

Collateral Held December 31, 2024 December 31, 2023

Repurchase Agreements

Non-cash collateral — 39,130

Total repurchase agreements collateral held — 41,605

Repurchase Agreements

Collateral pledged with our repurchase agreement counterparties is segregated in our books and records.

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Interest Rate Swaps

As of December 31, 2024 and 2023, all of our interest rate swaps were centrally cleared by a registered clearing organization such as the Chicago Mercantile Exchange through a Futures Commission Merchant (“FCM”).

We are 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.

As of December 31, 2025 and 2024, all of our interest rate swaps were centrally cleared by the Chicago Mercantile Exchange (“CME”), a registered clearing organization, through a Futures Commission Merchant (“FCM”).

We are 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.

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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 consolidated statement of operations.

Treasury Futures Contracts

We are required to pledge initial margin and daily variation margin for our U.S.

Treasury futures contracts that is based on the fair value of our contracts as determined by our FCM.

The daily variation margin payment for our U.S.

Treasury futures contracts is characterized as settlement of the U.S.

Treasury futures contract itself rather than collateral and is recorded as gain (loss) on derivative instruments, net in our consolidated statement of operations.

Our TBAs provide for bilateral collateral pledging based on market value as determined by our counterparties.

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We principally manage our exposures to a wide variety of business and operational risks through management of our core business activities.

We manage economic risks, including interest rate, liquidity, credit and foreign exchange rate risk primarily by managing the amount, sources, and duration of our investments, borrowings, and the use of derivative financial instruments.

Specifically, we use derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates or foreign exchange rates.

We manage economic risks, including interest rate, liquidity and credit risk primarily by managing the amount, sources, and duration of our investments, borrowings, and the use of derivative financial instruments.

Our derivative financial instruments are used to manage differences in the amount, timing, and duration of our known or expected cash receipts and our known or expected cash payments principally related to our investments and borrowings.

The following table summarizes changes in the notional amount of our derivative instruments during 2025.

$ in thousands Notional Amount as of December 31, 2023 Additions Settlement,

or Exercise Notional Amount as of December 31, 2024

$ in thousands Notional Amount as of December 31, 2024 Additions Settlement, Termination, Expiration or Exercise Notional Amount as of December 31, 2025

Interest rate swaps 3,265,000 1,345,000 ( 790,000 ) 3,820,000

Futures Contracts — 2,842,000 ( 1,440,000 ) 1,402,000

Treasury futures contracts 1,402,000 5,632,000 ( 5,944,000 ) 1,090,000

TBA purchase contracts 100,000 2,556,700 ( 2,656,700 ) —

TBA sale contracts ( 100,000 ) ( 2,556,700 ) 2,656,700 —

Total 4,065,000 5,482,000 ( 4,880,000 ) 4,667,000

Refer to Note 5 - “Collateral Positions” for further information regarding our collateral pledged to and received from our derivative counterparties.

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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 part of our interest rate risk management strategy.

Our objectives in using interest rate derivatives are to manage our exposures to interest rate movements and to add stability to our borrowings costs.

To accomplish these objectives, we primarily use interest rate swaps and U.S.

Treasury 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.

To a lesser extent, we have also used interest rate swap contracts whereby we make floating-rate payments to a counterparty in exchange for the receipt of fixed-rate amounts as part of our overall risk management strategy.

To a lesser extent, we have in the past entered into and may in the future enter into interest rate swap contracts whereby we make floating-rate payments to a counterparty in exchange for the receipt of fixed-rate amounts as part of our overall risk management strategy.

In 2013, we discontinued cash flow hedge accounting for our interest rate swaps.

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We reclassified $ 10.4 million as a decrease to interest expense during the year ended December 31, 2023.

$ 19.7 million as a decrease).

As of December 31, 2025 and 2024, there were no gains or losses on discontinued cash flow hedges remaining in accumulated other comprehensive income.

As of December 31, 2024 and 2023, 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 .

As of December 31, 2025 and 2024, we had interest rate swaps whereby we pay fixed interest rates and receive floating interest rates based on the secured overnight financing rate (“SOFR”) with the following maturities outstand ing .

$ in thousands As of December 31, 2025

Maturities Notional

Amount Weighted Average Fixed Pay Rate Weighted Average Floating Receive Rate Weighted Average Years to Maturity

Maturities Notional Amount Weighted Average Fixed Pay Rate Weighted Average Floating Receive Rate Weighted Average Years to Maturity

Less than 3 years 2,155,000 1.21 % 3.87 % 1.4

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$ 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

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

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Total 3,265,000 0.97 % 4.49 % 5.3

Futures Contracts

We also 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 December 31, 2024.

We did not hold any futures contracts as of December 31, 2023.

As of December 31, 2024

$ in thousands Notional Amount - Short

Treasury Futures Contracts

Treasury futures contracts to help mitigate the potential impact of changes in interest rates on our performance.

The table below presents certain details of our U.S.

Treasury futures contracts as of December 31, 2025 and 2024.

$ in thousands December 31, 2025 December 31, 2024

Notional Amount - Short Notional Amount - Short

Treasury futures 420,000 136,000

3 unchanged sentences

Total 1,090,000 1,402,000

Currency Forward Contracts

We have historically used currency forward contracts to help mitigate the potential impact of changes in foreign currency exchange rates on our investments denominated in foreign currencies.

We recognize realized and unrealized gains and losses associated with the purchases or sales of currency forward contracts in gain (loss) on derivative instruments, net in our consolidated statements of operations.

We did not have any currency forward contracts outstanding as of December 31, 2024 or December 31, 2023.

We primarily use TBAs that we do not intend to physically settle on the contractual settlement date as an alternative means of investing in and financing Agency RMBS.

The following table summarizes certain characteristics of our TBAs accounted for as derivatives as of December 31, 2024.

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 table 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 December 31, 2025.

2 unchanged sentences

TBA purchase contracts 100,000 99,800 99,173 ( 627 )

TBA sales contracts ( 100,000 ) ( 99,194 ) ( 99,173 ) 21

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 consolidated balance sheets.

Tabular Disclosure of the Effect of Derivative Instruments on the Balance Sheet

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 our consolidated balance sheets as of December 31, 2025 and 2024.

1 unchanged sentence

Derivative Assets Derivative Liabilities

As of December 31, 2024 As of December 31, 2023 As of December 31, 2024 As of December 31, 2023

December 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024

Sheet Fair Value Fair Value Balance

1 unchanged sentence

Interest rate swaps asset 2,235 1,549 Interest rate swaps liability — —

Futures Contract 3,463 — Futures Contract — —

Treasury futures contracts 2,177 3,463 U.S.

Treasury futures contracts — —

TBAs — 21 TBAs — 627

1 unchanged sentence

Tabular Disclosure of the Effect of Derivative Instruments on the Income Statement

The following tables summarize the effect of interest rate swaps, futures contracts, TBAs and currency forward contracts reported in gain (loss) on derivative instruments, net on the consolidated statements of operations for the years ended December 31, 2024, 2023 and 2022.

The following tables summarize the effect of interest rate swaps, U.S.

Treasury futures contracts, TBAs and currency forward contracts reported in gain (loss) on derivative instruments, net on the consolidated statements of operations for the years ended December 31, 2025, 2024 and 2023.

$ in thousands Year ended December 31, 2025

Not Designated as

hedging instrument Realized gain (loss) on derivative instruments, net Contractual net

Hedging Instruments Realized Gain (Loss) on Derivative Instruments, Net Contractual Net

Interest Income (Expense) Unrealized

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Interest rate swaps ( 162,830 ) 112,244 686 ( 49,900 )

Futures Contracts 58,000 — 3,463 61,463

Treasury futures contracts ( 56,313 ) — ( 1,286 ) ( 57,599 )

TBAs 1,967 — 606 2,573

2 unchanged sentences

Not Designated as

hedging instrument Realized gain (loss) on derivative instruments, net Contractual net

Hedging Instruments Realized Gain (Loss) on Derivative Instruments, Net Contractual Net

Interest Income (Expense) Unrealized

1 unchanged sentence

Interest rate swaps ( 47,581 ) 161,762 610 114,791

Currency Forward Contracts ( 18 ) — — ( 18 )

Treasury futures contracts 58,000 — 3,463 61,463

TBAs 986 — ( 606 ) 380

2 unchanged sentences

Not Designated as

hedging instrument Realized gain (loss) on derivative instruments, net Contractual net

Hedging Instruments Realized Gain (Loss) on Derivative Instruments, Net Contractual Net

Interest Income (Expense) Unrealized

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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 consolidated balance sheets as of December 31, 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 assets of $ 1.5 million related to centrally cleared interest rate swaps and $ 3.5 million related to future contracts as of December 31, 2024 (December 31, 2023:

asset of $ 939,000 related to centrally cleared interest rate swaps) are not included in the table below as a result of this characterization of daily variation margin.

The daily variation margin payments for centrally cleared interest rate swaps and U.S.

Treasury futures contracts are characterized as settlement of the derivative itself rather than collateral.

Our derivative assets of $ 2.2 million related to centrally cleared interest rate swaps and $ 2.2 million related to U.S.

Treasury futures contracts as of December 31, 2025 (December 31, 2024:

assets of $ 1.5 million and $ 3.5 million related to centrally cleared interest rate swaps and U.S.

Treasury futures contracts, respectively) are not included in the table below as a result of this characterization of daily variation margin.

As of December 31, 2025

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(Received) Pledged Net Amount

Derivatives (1) (2)

21 — 21 — — 21

Total Assets 21 — 21 — — 21

Derivatives (1) (2)

( 627 ) — ( 627 ) — 580 ( 47 )

Repurchase agreements (1)

12 unchanged sentences

(Received) Pledged Net Amount

Derivatives (2) (3)

21 — 21 — — 21

Total assets 21 — 21 — — 21

Derivatives (2) (3)

( 627 ) — ( 627 ) — 580 ( 47 )

Repurchase agreements (1)

1 unchanged sentence

Total liabilities ( 4,894,585 ) — ( 4,894,585 ) 4,893,958 580 ( 47 )

(1) Amounts represent derivative assets and derivative liabilities which could potentially be offset against other derivative assets, derivative liabilities and cash collateral pledged or received.

(2) Cash collateral pledged by us on our derivatives was $ 138.1 million as of December 31, 2024 (December 31, 2023:

$ 121.7 million) of which $ 137.5 million relates to initial margin pledged on centrally cleared interest rate swaps and futures contracts (December 31, 2023:

$ 121.7 million for centrally cleared interest rate swaps).

Centrally cleared interest rate swaps are excluded from the tables above.

We held no cash collateral on our derivatives as of December 31, 2024 or December 31, 2023.

(1) The fair value of securities pledged against our borrowings under repurchase agreements was $ 5.9 billion as of December 31, 2025 (December 31, 2024:

$ 5.1 billion).

We held no cash collateral under repurchase agreements as of December 31, 2024 (December 31, 2023:

$ 2.5 million).

We held no cash collateral under repurchase agreements as of December 31, 2025 or December 31, 2024.

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 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 $ 110.4 million as of December 31, 2025 (December 31, 2024:

$ 138.1 million) of which $ 110.4 million relates to initial margin pledged on centrally cleared interest rate swaps and U.S.

Treasury futures contracts (December 31, 2024:

$ 137.5 million).

Centrally cleared interest rate swaps and U.S.

Treasury futures contracts are excluded from the tables above.

We held no cash collateral on our derivatives as of December 31, 2025 or December 31, 2024.

Note 8 – Fair Value of Financial Instruments

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Derivative assets (2)

2,177 2,235 — 4,412

Total assets 2,177 6,278,844 — 6,281,021

Derivative liabilities — 627 — 627

Total liabilities — 627 — 627

As of December 31, 2024

Fair Value Measurements Using:

$ in thousands Level 1 Level 2 Level 3 NAV as a practical expedient (3)

$ in thousands Level 1 Level 2 Level 3 Total at

Mortgage-backed securities (1)

— 5,445,508 — 5,445,508

Treasury securities (2)

— 11,214 — — 11,214

Derivative assets (2)

Other assets — — — 500 500

3,463 1,570 — 5,033

Total assets 3,463 5,447,078 — 5,450,541

Derivative liabilities (2)

Total liabilities — 627 — 627

(1) For more detail about the fair value of our MBS, refer to Note 3 - “Mortgage-Backed Securities”.

(2) For more information on U.S.

Treasury securities, refer to Note 4 - “U.S.

Treasury Securities”.

(3) Our investment in an unconsolidated ventures was valued using the net asset value (“NAV”) as a practical expedient and was not subject to redemption, although investors could sell or transfer their interest at the approval of the general partner of the underlying funds.

The unconsolidated venture made its final distribution in the first quarter of 2024.

The following table presents the carrying value and estimated fair value of our financial instruments that are not carried at fair value on the consolidated balance sheets at December 31, 2024 and December 31, 2023.

(2) Derivative assets and derivative liabilities include U.S.

Treasury 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 consolidated balance sheets as of December 31, 2025 and December 31, 2024.

December 31, 2025 December 31, 2024

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$ 1.6 million).

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 consolidated balance sheets.

Management Fee

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Termination Fee

If we terminate our management agreement, we owe our Manager a termination fee equal to three times the sum of our average annual management fee during the 24 -month period before termination, calculated as of the end of the most recently completed fiscal quarter.

If we elect to terminate our management agreement other than for cause, we owe our Manager a termination fee equal to three times the sum of our average annual management fee during the 24 -month period before termination, calculated as of the end of the most recently completed fiscal quarter.

Note 10 – Stockholders’ Equity

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In May 2022, our board of directors approved a share repurchase program for our Series B and Series C Preferred Stock.

During the year ended December 31, 2024, we repurchased and retired 138,008 shares of Series B Preferred Stock (prior to the redemption discussed below) and 338,780 shares of Series C Preferred Stock and recorded a gain on repurchase and retirement of preferred stock of $ 427,000 .

During the year ended December 31, 2023, we repurchased and retired 151,637 shares of Series B Preferred Stock and 271,031 shares of Series C Preferred Stock and recorded a gain on repurchase and retirement of preferred stock of $ 1.5 million.

During the year ended December 31, 2025, we repurchased and retired 352,528 shares of Series C Preferred Stock.

During the year ended December 31, 2024, we repurchased and retired 138,008 shares of Series B Preferred Stock prior to redemption and 338,780 shares of Series C Preferred Stock.

As of December 31, 2025, we had authority to repurchase 354,131 additional shares of our Series C Preferred Stock under the current preferred stock share repurchase program.

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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.

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.

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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 that time, except under circumstances intended to preserve our qualification as a REIT or upon the occurrence of a change in control.

In May 2022, our board of directors approved a one-for-ten reverse split of outstanding shares of our common stock.

The reverse stock split was effected following the close of business on June 3, 2022 (the “Effective Time”).

At the Effective Time, every ten issued and outstanding shares of our common stock were converted into one share of our common stock.

No fractional shares were issued in connection with the reverse stock split.

Instead, each stockholder holding fractional shares received cash, in lieu of such fractional shares, in an amount determined based on the closing price of our common stock at the Effective Time.

The reverse stock split applied to all of our outstanding shares of common stock and did not affect any stockholder’s ownership percentage of our common stock, except for changes resulting from the payment of cash for fractional shares.

In August 2024, the Company filed an Articles of Amendment to increase the number of shares of common stock, par value $ 0.01 per share, that the Company has authority to issue.

Effective upon filing, the Articles of Amendment amended the Charter of the Company to increase the total authorized number of shares of common stock of the Company from 67,000,000 to 134,000,000 .

As of December 31, 2024, we may sell up to 11,095,561 shares of our common stock from time to time in at-the-market or privately negotiated transactions under our equity distribution agreement with placement agents.

As of December 31, 2025, we had 19,538,020 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).

During the year ended December 31, 2024, we sold 13,204,968 shares (2023:

9,699,471 shares) of common stock in at-the-market transactions under our equity distribution agreements for proceeds of $ 116.2 million (2023:

$ 109.1 million), which is net of approximately $ 1.7 million (2023:

$ 1.5 million) in commissions and fees.

During the years ended December 31, 2024 and December 31, 2023, we did not repurchase any shares of our common stock.

As of December 31, 2024, we had authority to purchase 1,816,359 shares of our common stock through our share repurchase program.

For the year ended December 31, 2024, we granted 64,969 restricted shares of common stock to our independent directors (2023:

45,567 shares).

The table below shows issuances of our common stock under equity distribution agreements during the years ended December 31, 2025 and 2024.

Years ended December 31,

Shares in ones, $ in thousands 2025 2024

Shares sold 9,983,179 13,204,968

Fees paid to placement agents 1,034 1,475

Cash proceeds, net of fees paid to placement agents 81,625 116,460

During the years ended December 31, 2025 and 2024, we did not repurchase any shares of our common stock.

As of December 31, 2025, we had authority to repurchase 1,816,359 shares of our common stock through our common stock share repurchase program.

During the year ended December 31, 2025, we granted 77,108 restricted shares of common stock, net of forfeitures due to retirement, to our independent directors (2024:

64,969 restricted shares;

45,567 restricted shares).

Restricted shares become unrestricted shares of common stock on the first anniversary of the grant date unless forfeited, subject to certain conditions that accelerate vesting.

Accumulated Other Comprehensive Income

The following tables present the components of total other comprehensive income (loss), net and accumulated other comprehensive income (“AOCI”) at December 31, 2024 and December 31, 2023, respectively.

The tables exclude gains and losses on MBS that are accounted for under the fair value option.

Year ended December 31, 2024

$ in thousands Equity method investments Available-for-sale securities Derivatives and hedging Total

Total other comprehensive income (loss)

Unrealized gain (loss) on mortgage-backed securities, net — ( 1,051 ) — ( 1,051 )

Reclassification of unrealized loss on available-for-sale securities to (increase) decrease in provision for credit losses — 526 — 526

Total other comprehensive income (loss) — ( 525 ) — ( 525 )

AOCI balance at beginning of period — 698 — 698

Total other comprehensive income (loss) — ( 525 ) — ( 525 )

AOCI balance at end of period — 173 — 173

Changes in the balance of our accumulated other comprehensive income during the years ended December 31, 2025 and 2024 related solely to gains and losses on MBS that were not accounted for under the fair value option.

The following table presents the components of total other comprehensive income (loss) and accumulated other comprehensive income for 2023.

Year ended December 31, 2023

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Amounts recorded in AOCI before we discontinued cash flow hedge accounting for our interest rate swaps were reclassified to interest expense on the consolidated statements of operations as interest was accrued and paid on the related repurchase agreements over the remaining original life of the interest rate swap agreements.

We declared the following dividends during 2024 and 2023.

The table below summarizes the dividends we declared during 2025 and 2024.

All dividends are characterized as ordinary income in the fiscal tax year in which they were declared.

$ in thousands, except per share amounts Dividends Declared

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February 21, 2024 0.4844 2,086 March 27, 2024

November 2, 2023 0.4844 2,131 December 27, 2023

August 2, 2023 0.4844 2,167 September 27, 2023

May 8, 2023 0.4844 2,186 June 27, 2023

February 17, 2023 0.4844 2,198 March 27, 2023

$ in thousands, except per share amounts Dividends Declared

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March 26, 2024 0.40 19,530 April 26, 2024

The following table sets forth the dividends declared per share of our preferred and common stock and their related tax characterization for the fiscal tax years ended December 31, 2024 and 2023.

Tax Characterization of Dividends

Fiscal Tax Year Dividends Declared in Prior Year and Taxable in Current Year Dividends Declared and Taxable in Current Year Ordinary Dividends Return of Capital Capital Gain Distribution

Series B Preferred Stock Dividends

Fiscal tax year 2024 — 1.936700 1.936700 — —

Fiscal tax year 2023 — 1.936700 1.936700 — —

Series C Preferred Stock Dividends

Fiscal tax year 2024 — 1.875000 1.875000 — —

Fiscal tax year 2023 — 1.875000 1.875000 — —

Common Stock Dividends

Fiscal tax year 2024 — 1.600000 1.600000 — —

Fiscal tax year 2023 0.650000 1.600000 2.250000 — —

Note 11 – Earnings (Loss) per Common Share

Earnings (loss) per share for the years ended December 31, 2024, 2023 and 2022 is computed as follows.

Earnings (loss) per share for the years ended December 31, 2025, 2024 and 2023 is calculated as follows.

In thousands except per share amounts Years Ended December 31,

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Diluted 1.32 0.65 ( 0.85 )

The following potential weighted average common shares were excluded from diluted earnings per share as the effect would be antidilutive for the year ended December 31, 2023:

944 for restricted stock awards (December 31, 2022:

1,216 for restricted stock awards).

There were no antidilutive shares that were excluded from the calculation of diluted earnings per share during the years ended December 31, 2025 and 2024 (December 31, 2023:

944 shares excluded related to restricted stock awards).

Note 12 - Segment Information

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Note 14 – Subsequent Events

On February 19, 2025, we declared a Series C Preferred Stock dividend of $ 0.46875 per share payable on March 27, 2025 to our stockholders of record as of March 5, 2025.

INVESCO MORTGAGE CAPITAL INC.

AND SUBSIDIARIES

Mortgage Loans on Real Estate

As of December 31, 2024

$ in thousands

Reconciliation of Carrying Value of Mortgage Loans on Real Estate:

2024 2023 2022

Beginning balance — — 23,515

Unrealized gain — — 404

Collection of principal — — 23,919

Unrealized loss — — —

Ending balance — — —

Common Stock Issuances

Between January 1, 2026 and February 23, 2026, we issued 11,480,000 shares of common stock in at-the-market transactions under our equity distribution agreement with placement agents for cash proceeds, net of fees paid to placement agents, of $ 98.7 million.

On January 15, 2026, we declared a common stock dividend of $ 0.12 per share paid on February 13, 2026 to stockholders of record at the close of business on January 26, 2026.

On February 13, 2026, we declared a common stock dividend of $ 0.12 per share payable on March 13, 2026 to stockholders of record at the close of business on February 24, 2026.

On February 18, 2026, we declared a Series C Preferred Stock dividend of $ 0.46875 per share payable on March 27, 2026 to our stockholders of record at the close of business on March 5, 2026.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

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Stephanie Botha (principal accounting officer)

Day Director February 20, 2025

Liu Chairperson and Director February 23, 2026

/s/ Robert L.

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Kelley Director February 23, 2026

Liu Director February 20, 2025

/s/ Dennis P.

Lockhart Director February 20, 2025

/s/ Wes McMullan Director February 23, 2026

Zayicek Director February 20, 2025

/s/ Robert Waldner Director February 23, 2026

Robert Waldner

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures