# Invesco Mortgage Capital Inc. (IVR) Informational only - not investment advice. CIK: 0001437071 SIC: 6798 Real Estate Investment Trusts SIC breadcrumb: [Finance, Insurance, And Real Estate](/division/H/) > [Holding And Other Investment Offices](/major-group/67/) > [SIC 6798 Real Estate Investment Trusts](/industry/6798/) Latest 10-K filed: 2026-02-23 SEC page: https://www.sec.gov/edgar/browse/?CIK=1437071 Filing source: https://www.sec.gov/Archives/edgar/data/1437071/000143707126000015/ivr-20251231.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 295287000 | USD | 2025 | 2026-02-23 | | Net income | 101279000 | USD | 2025 | 2026-02-23 | | Assets | 6475894000 | USD | 2025 | 2026-02-23 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-23. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001437071.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | | 545,055,000 | 643,016,000 | 778,367,000 | 280,166,000 | 169,202,000 | 194,513,000 | 277,929,000 | 286,546,000 | 295,287,000 | | Net income | 254,411,000 | 348,607,000 | -70,790,000 | 364,101,000 | -1,674,352,000 | -90,000,000 | -402,924,000 | -15,859,000 | 59,882,000 | 101,279,000 | | Diluted EPS | 1.98 | 2.75 | -1.03 | 2.42 | -98.93 | -4.82 | -12.21 | -0.85 | 0.65 | 1.32 | | Operating cash flow | 295,797,000 | 290,601,000 | 304,264,000 | 343,359,000 | 170,459,000 | 152,292,000 | 196,083,000 | 237,787,000 | 183,160,000 | 157,085,000 | | Assets | 15,706,238,000 | 18,657,256,000 | 17,813,505,000 | 22,346,545,000 | 8,632,851,000 | 8,443,841,000 | 5,097,395,000 | 5,284,209,000 | 5,688,034,000 | 6,475,894,000 | | Liabilities | 13,436,054,000 | 16,000,378,000 | 15,526,808,000 | 19,414,646,000 | 7,265,693,000 | 7,041,706,000 | 4,293,320,000 | 4,501,544,000 | 4,957,305,000 | 5,678,350,000 | | Stockholders' equity | 2,241,560,000 | 2,630,491,000 | 2,286,697,000 | 2,931,899,000 | 1,367,158,000 | 1,402,135,000 | 804,075,000 | 782,665,000 | 730,729,000 | 797,544,000 | | Cash and cash equivalents | 161,788,000 | 88,381,000 | 135,617,000 | 172,507,000 | 148,011,000 | 357,134,000 | 175,535,000 | 76,967,000 | 73,403,000 | 56,040,000 | ### Ratios ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Net margin | | 63.96% | -11.01% | 46.78% | | -53.19% | | -5.71% | 20.90% | 34.30% | | Return on equity | 11.35% | 13.25% | -3.10% | 12.42% | -122.47% | -6.42% | -50.11% | -2.03% | 8.19% | 12.70% | | Return on assets | 1.62% | 1.87% | -0.40% | 1.63% | -19.40% | -1.07% | -7.90% | -0.30% | 1.05% | 1.56% | | Liabilities / equity | 5.99 | 6.08 | 6.79 | 6.62 | 5.31 | 5.02 | 5.34 | 5.75 | 6.78 | 7.12 | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-06. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001437071.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q2 | 2022-06-30 | | | -3.52 | reported discrete quarter | | 2022-Q3 | 2022-09-30 | | | -2.78 | reported discrete quarter | | 2023-Q1 | 2023-03-31 | | | 0.39 | reported discrete quarter | | 2023-Q2 | 2023-03-31 | | 21,463,000 | | reported discrete quarter | | 2023-Q2 | 2023-06-30 | 71,428,000 | | -0.03 | reported discrete quarter | | 2023-Q3 | 2023-06-30 | | 4,078,000 | | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 75,132,000 | | -1.62 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | 62,082,000 | 27,199,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | 68,583,000 | 29,122,000 | 0.49 | reported discrete quarter | | 2024-Q2 | 2024-03-31 | | 29,122,000 | | reported discrete quarter | | 2024-Q2 | 2024-06-30 | 68,028,000 | | -0.38 | reported discrete quarter | | 2024-Q3 | 2024-06-30 | | -13,466,000 | | reported discrete quarter | | 2024-Q3 | 2024-09-30 | 73,825,000 | | 0.63 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | 76,110,000 | 3,506,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 73,846,000 | 19,641,000 | 0.26 | reported discrete quarter | | 2025-Q2 | 2025-03-31 | | 19,641,000 | | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 70,624,000 | | -0.40 | reported discrete quarter | | 2025-Q3 | 2025-06-30 | | -23,327,000 | | reported discrete quarter | | 2025-Q3 | 2025-09-30 | 72,916,000 | | 0.74 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | 77,901,000 | 51,494,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 79,641,000 | -19,904,000 | -0.28 | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1437071/000143707126000038/ivr-20260331.htm Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high Filing date: 2026-05-06 Report date: 2026-03-31 ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. In this quarterly report on Form 10-Q, or this "Quarterly Report," we refer to Invesco Mortgage Capital Inc. and its consolidated subsidiaries as "we," "us," "our Company," or "our," unless we specifically state otherwise or the context indicates otherwise. We refer to our external manager, Invesco Advisers, Inc., as our "Manager" and we refer to the indirect parent company of our Manager, Invesco Ltd. together with its consolidated subsidiaries (which does not include us), as "Invesco." The following discussion should be read in conjunction with our condensed consolidated financial statements and the accompanying notes to our condensed consolidated financial statements, which are included in Item 1 of this Quarterly Report, as well as the information contained in our most recent annual report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”). Forward-Looking Statements We make forward-looking statements in this Quarterly Report and other filings we make with the SEC within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and such statements are intended to be covered by the safe harbor provided by the same. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond our control. These forward-looking statements include information about possible or assumed future results of our business, investment strategies, financial condition, liquidity, results of operations, plans, objectives and our views on domestic and global market conditions (including the Agency RMBS, Agency CMBS and residential and commercial real estate markets). When we use the words “believe,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” “project,” “forecast” or similar expressions and future or conditional verbs such as “will,” “may,” “could,” “should,” and “would,” and any other statement that necessarily depends on future events, we intend to identify forward-looking statements, although not all forward-looking statements may contain such words. The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. You should not place undue reliance on these forward-looking statements. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us. We caution you not to rely unduly on any forward-looking statements and urge you to carefully consider the factors described under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Report and our Annual Report on Form 10-K. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 18 Table of Contents Executive Summary We are a Maryland corporation primarily focused on investing in, financing and managing mortgage-backed securities (“MBS”) and other mortgage-related assets. Our objective is to provide attractive risk-adjusted returns to our stockholders, primarily through dividends and secondarily through capital appreciation. As of March 31, 2026, 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 “FNMA”) or the Federal Home Loan Mortgage Corporation (“Freddie Mac” or “FHLMC”) (collectively “Agency RMBS”); •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”); and •to-be-announced securities forward contracts (“TBAs”) to purchase Agency RMBS. 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). We continuously evaluate new investment opportunities to complement our current investment portfolio by expanding our target assets and portfolio diversification. We conduct our business through our wholly-owned subsidiary, IAS Operating Partnership L.P. (the “Operating Partnership”). We are externally managed and advised by our Manager, an indirect wholly-owned subsidiary of Invesco. We have 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 1940 Act. 19 Table of Contents Market Conditions and Impacts Macroeconomic factors that affect our business include inflation, economic growth, employment conditions, public policy, fiscal and monetary policy, interest rates, interest rate volatility, financial conditions, spread premiums, residential and commercial real estate prices, credit availability, the health of the banking system, consumer spending, personal income and corporate earnings. Of these macroeconomic factors, financial conditions, inflation, employment conditions, monetary policy, interest rates and interest rate volatility had the most direct impact on our performance and financial condition during the first quarter of 2026. Following a strong recovery in the second half of 2025 and impressive start to the new year, financial conditions deteriorated in the latter half of the first quarter, initially weakening as market volatility rose amid signs of a softening labor market. The decline accelerated following the outbreak of conflict in the Middle East toward the end of February to end the quarter notably weaker. Against this backdrop of heightened geopolitical risk, equity markets reacted negatively with the S&P 500 and NASDAQ declining 4.6% and 7.1%, respectively. Credit markets followed a similar trajectory, as valuations across investment-grade credit, high yield bonds and emerging market debt came under pressure amid the sharp increase in volatility. Inflation readings trended mostly higher during the first quarter, remaining above the Federal Reserve’s 2% target. The headline consumer price index (“CPI”) ended the quarter at 3.3%, up from 2.7% in December, reflecting a sharp rise in energy and commodity prices stemming from the outbreak of conflict in the Middle East. Core CPI, which excludes food and energy, remained steady at 2.6%. Amid heightened uncertainty around energy prices, investors revised inflation expectations higher, most clearly reflected in Treasury inflation-protected securities breakeven rates. The two-year breakeven rose sharply higher to 3.25% at quarter-end, up from 2.30% at year-end, while the five-year breakeven increased to 2.60%. The Federal Open Market Committee (“FOMC”) kept the benchmark Federal Funds target rate unchanged at both meetings during the quarter, citing a balance between the risks of a weakening labor market and persistently elevated inflation. Expectations for future monetary policy action, as reflected in the Fed Funds futures market, were influenced by heightened volatility stemming from increased geopolitical risks related to the conflict in the Middle East. The futures market began the quarter with expectations for two rate cuts by year-end, driven by signs of labor market softness. However, as commodity and energy prices surged, those expectations reversed, with futures markets subsequently indicating that the FOMC is likely to maintain its current policy stance through the remainder of 2026. Interest rates increased across the U.S. Treasury yield curve during the quarter, reflecting market expectations for higher inflation as elevated energy prices continued to work their way through the economy. The two-year U.S. Treasury yield increased by 33 basis points to 3.80%, the five-year yield rose by 23 basis points to 3.94% and the ten-year yield rose by 16 basis points to 4.31%. Interest rate volatility also moved higher during the quarter, driven by rising concerns around a weakening labor market and increasing geopolitical risks. Against this macroeconomic backdrop, Agency RMBS delivered mixed performance relative to interest rate hedges during the quarter, as lower coupons performed well while higher coupons underperformed. Excess returns relative to U.S. Treasuries were strong in January as the robust performance in the second half of 2025 carried over into the new year, supported by declining interest rate volatility and the announcement of a $200 billion Agency MBS purchase program by Fannie Mae and Freddie Mac. Following the initial post-announcement surge of demand, however, performance languished, as profit-taking and uncertainty regarding the implementation of the purchase program emerged alongside a modest move higher in interest rate volatility. Underperformance accelerated in March at the onset of the geopolitical turmoil in the Middle East, as interest rate volatility rose sharply given higher interest rates and increased expectations for tighter monetary policy. Although lower coupon performance remained positive throughout the quarter, higher coupons were negatively impacted by rising prepayment concerns in the beginning of the quarter and their elevated sensitivity to increased interest rate volatility in the latter half of the quarter. In addition, swap spreads tightened notably during the quarter, negatively impacting Agency RMBS hedged with swaps relative to those hedged with U.S. Treasuries. Despite elevated market volatility, heightened geopolitical concerns and relatively elevated supply, Agency CMBS risk premiums contracted during the first quarter as issuance was met with continued investor demand, particularly from banks and money managers attracted to the sector’s high-quality collateral, stable cash flows and relative value versus other spread products. 20 Table of Contents Market Rates As of March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 One Quarter Change One Year Change Interest Rates Effective federal funds rate 3.64  % 3.64  % 4.09  % 4.33  % 4.33  % —  % (0.69) % One-month SOFR 3.66  % 3.69  % 4.13  % 4.34  % 4.32  % (0.03) % (0.66) % 2 Year U.S. Treasury 3.80  % 3.47  % 3.60  % 3.72  % 3.91  % 0.33  % (0.11) % 5 Year U.S. Treasury 3.94  % 3.71  % 3.73  % 3.79  % 3.98  % 0.23  % (0.04) % 10 Year U.S. Treasury 4.31  % 4.15  % 4.15  % 4.23  % 4.24  % 0.16  % 0.07  % 30 Year U.S. Treasury 4.89  % 4.83  % 4.73  % 4.77  % 4.61  % 0.06  % 0.28  % As of (in basis points) March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 One Quarter Change One Year Change Swap Spreads (1) 2 year (17) (16) (22) (23) (17) (1) — 5 year (33) (26) (35) ( [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Published MD&A gate trimmed front/tail over-capture. Confidence: high Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The discussion and analysis disclosed herein apply to material changes in our consolidated financial statements for 2025 and 2024. For the comparison of 2024 and 2023, see the Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our 2024 Annual Report on Form 10-K, filed with the SEC on February 20, 2025. The following discussion should be read in conjunction with our consolidated financial statements and the accompanying notes to our consolidated financial statements, which are included in Part IV, Item 15 of this Report. Overview We are a Maryland corporation primarily focused on investing in, financing and managing MBS and other mortgage-related assets. Our objective is to provide attractive risk-adjusted returns to our stockholders, primarily through dividends and secondarily through capital appreciation. Factors Impacting Our Operating Results Our operating results can be affected by a number of factors and primarily depend on the level of our net interest income and the market value of our assets. Our net interest income, which includes the amortization of purchase premiums and accretion of purchase discounts, varies primarily as a result of changes in market interest rates and prepayment speeds, as measured by the constant prepayment rate (“CPR”) on our assets. Interest rates and prepayment speeds vary according to the type of investment, conditions in the financial markets, competition and other factors, none of which can be predicted with any certainty. The market value of our assets can be impacted by spreads and the supply of, and demand for, assets in which we invest. Market Conditions and Impacts Macroeconomic factors that affect our business include inflation, economic growth, employment conditions, public policy, fiscal and monetary policy, interest rates, interest rate volatility, financial conditions, spread premiums, residential and commercial real estate prices, credit availability, the health of the banking system, consumer spending, personal income and 40 Table of Contents corporate earnings. Of these macroeconomic factors, financial conditions, inflation, employment conditions, monetary policy, interest rates and interest rate volatility had the most direct impact on our performance and financial condition during 2025. Financial conditions ended 2025 slightly improved, falling sharply after elevated uncertainty around U.S. trade policy in April before rebounding over the remainder of the year. Conditions remained accommodative in the fourth quarter as the Federal Open Market Committee (“FOMC”) reduced rates twice, volatility measures remained subdued and equity markets performed well. During the fourth quarter, the S&P 500 Index and the NASDAQ continued their strong performance, posting gains of 2.3% and 2.6%, respectively. For 2025, the S&P 500 gained 16.4% and the NASDAQ was up 20.4%. Credit market valuations improved over the course of 2025 and ended the fourth quarter largely unchanged, despite experiencing a period of notable deterioration driven primarily by uncertainty regarding U.S. trade policy. Inflation readings trended modestly lower during 2025 but continued to exceed the Federal Reserve’s 2% target. The headline consumer price index (“CPI”) ended the year at 2.7%, down from 2.9% in December 2024. Core CPI (CPI excluding food and energy) declined from 3.2% to 2.6%. The disinflationary trend was also evident in the fourth quarter, as headline CPI decreased from 3.0% to 2.7% and core CPI declined modestly from 3.0% to 2.6%. Investors responded to the improved inflation readings by lowering expectations for future inflation, most directly reflected in Treasury inflation-protected securities breakeven rates. The two-year breakeven ended the year at 2.30% (down from 2.63% at the end of September and 2.54% in December 2024) and the five-year breakeven ended at 2.27% (down from 2.45% in September and 2.39% last December). The labor market weakened in 2025, as the economy added 181,000 jobs compared to 1.5 million jobs in 2024. This weakening trend continued during the fourth quarter, as the economy lost 51,000 jobs. Despite inflation remaining above the Federal Reserve’s 2% target, the FOMC responded to the weakening job market by lowering its benchmark Federal Funds target rate by 25 basis points on three occasions during 2025, including at both meetings in the fourth quarter. By year-end, Federal Funds futures priced in expectations for an additional 50 basis points of rate cuts by the end of 2026, reflecting investor anticipation of a more accommodative Federal Reserve moving forward. The FOMC ended its program of quantitative tightening during the fourth quarter after reducing its portfolio of U.S. Treasury securities and Agency MBS by over $2.2 trillion since June 2022. Interest rates declined across the U.S. Treasury yield curve in 2025, reflecting market expectations for a more accommodative monetary policy stance and continued weakness in the labor market. The two-year U.S. Treasury security yield fell 78 basis points to 3.47%, the five-year yield declined 68 basis points to 3.71% and the ten-year yield decreased by 43 basis points to 4.15%. Interest rates were little changed during the fourth quarter, as the yield on two-year U.S. Treasury securities decreased by 13 basis points, while the yields on five- and ten-year U.S. Treasury securities fell by two basis points and remained unchanged, respectively. Despite increasing significantly in April after the U.S. trade policy announcements, interest rate volatility declined notably throughout the remainder of the year. This decline reflected market expectations for an accommodative Federal Reserve, which were confirmed when the FOMC lowered its benchmark rate by 25 basis points at each of the last three meetings of 2025. Against this macroeconomic backdrop, Agency RMBS delivered robust performance during the fourth quarter, capping an exceptional year for the sector. Relative to U.S. Treasury securities, 2025 marked the strongest calendar-year performance for Agency RMBS since 2010, which is particularly notable given the ongoing runoff in Agency RMBS from the Federal Reserve’s balance sheet and the continued lack of meaningful demand from commercial banks. Three key themes emerged in the second half of the year that supported valuations following the sector’s underperformance amid April’s trade policy-related instability: a sharp decline in interest rate volatility, significant inflows into fixed income funds and mortgage REITs, and the unexpected emergence of Fannie Mae and Freddie Mac as additional sources of demand. With organic net supply totaling just $164 billion for the year, money manager, mortgage REIT and GSE demand drove higher valuations. As a result, the sector outperformed investment grade corporates relative to U.S. Treasury securities for the first time since 2018. Prepayment speeds increased modestly but remained low, constrained by subdued housing activity and mortgage rates that, despite falling nearly 100 basis points over the year, remain elevated. Premiums on higher coupon specified pool collateral were well supported by the decline in mortgage rates, improving notably in the second half of the year. Agency CMBS risk premiums finished 2025 largely unchanged, retracing the spread widening seen in April amid heightened U.S. trade policy uncertainties. The rebound in valuations began in mid-to-late April and continued through the fourth quarter, supported by improving clarity in trade relations and growing confidence in the path toward monetary policy easing. Additionally, slightly higher issuance levels relative to the prior year were well absorbed due to money manager inflows and continued bank demand for stable cash flow profiles. 41 Table of Contents Market Rates As of December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 One Quarter Change One Year Change Interest Rates Effective federal funds rate 3.64  % 4.09  % 4.33  % 4.33  % 4.33  % (0.45) % (0.69) % One-month SOFR 3.69  % 4.13  % 4.34  % 4.32  % 4.33  % (0.44) % (0.64) % 2 year U.S. Treasury 3.47  % 3.60  % 3.72  % 3.91  % 4.25  % (0.13) % (0.78) % 5 year U.S. Treasury 3.71  % 3.73  % 3.79  % 3.98  % 4.39  % (0.02) % (0.68) % 10 year U.S. Treasury 4.15  % 4.15  % 4.23  % 4.24  % 4.58  % —  % (0.43) % 30 year U.S. Treasury 4.83  % 4.73  % 4.77  % 4.61  % 4.78  % 0.10  % 0.05  % As of (in basis points) December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 One Quarter Change One Year Change Swap Spreads (1) 2 year (16) (22) (23) (17) (16) 6 — 5 year (26) (35) (37) (31) (34) 9 8 10 year (37) (49) (54) (45) (50) 12 13 30 year (68) (80) (87) (79) (85) 12 17 30 Year Mortgage Spreads vs. 5/10 Year U.S. Treasury Securities Blend (2) FNMA 2.0% 83 82 90 75 65 1 18 FNMA 2.5% 87 88 95 83 74 (1) 13 FNMA 3.0% 81 88 96 86 77 (7) 4 FNMA 3.5% 70 87 98 87 78 (17) (8) FNMA 4.0% 80 89 100 88 76 (9) 4 FNMA 4.5% 92 100 114 105 91 (8) 1 FNMA 5.0% 110 119 130 122 108 (9) 2 FNMA 5.5% 111 135 149 142 126 (24) (15) FNMA 6.0% 93 124 161 147 140 (31) (47) FNMA 6.5% 47 100 127 116 135 (53) (88) 10 Year Agency CMBS Spreads vs. U.S. Treasury Securities (3) FHLMC K 37 37 42 45 41 — (4) FNMA DUS 46 44 47 49 47 2 (1) (1)Swap spreads represent the difference between the fixed rate coupon of an interest rate swap and the yield on a U.S. Treasury security with a similar maturity. (2)Mortgage spreads represent the difference between the yield on the Agency TBA and the blended average yield of five year and ten year U.S. Treasury securities. (3)Agency CMBS spreads represent the difference between the yields on new issue Freddie Mac K Certificates and Fannie Mae Delegated Underwriting and Servicing MBS (“DUS”) and a U.S. Treasury security with a similar maturity. Outlook Given the meaningful decline in interest rate volatility, we remain constructive on Agency RMBS, though we view near-term risks as balanced following the sector's strong performance, reinforced by the recent announcements that Fannie Mae and Freddie Mac will purchase $200 billion in Agency RMBS. In addition, Agency CMBS continues to offer attractive risk-adjusted yields and diversification benefits given its stable cash flow profile and lower sensitivity to interest rate fluctuations. 42 Table of Contents Longer term, the environment for Agency MBS investments is likely to remain favorable given reduced interest rate volatility and expectations for broadening investor demand and a steeper yield curve. Investment Activities The table below shows the composition of our investment portfolio as of December 31, 2025 and 2024. $ in thousands As of December 31, 2025 2024 Agency RMBS: 30 year fixed-rate pass-through, at fair value 5,309,160  4,541,525  Agency CMO, at fair value 69,320  70,776  Agency CMBS, at fair value 898,129  816,147  Non-Agency CMBS, at fair value —  9,836  Non-Agency RMBS, at fair value —  7,224  Total investment portfolio 6,276,609  5,445,508  As of December 31, 2025 and 2024, our holdings of 30 year fixed-rate Agency RMBS represented approximately 85% and 83% of our total investment portfolio, respectively. Our 30 year fixed-rate Agency RMBS holdings as of December 31, 2025 and 2024 consisted of specified pools with coupon distributions as shown in the table below. As of December 31, 2025 2024 $ in thousands Fair Value Percentage Period-end Weighted Average Yield Fair Value Percentage Period-end Weighted Average Yield 4.0% —  —  % —  % 369,321  8.1  % 4.67  % 4.5% 785,584  14.8  % 4.89  % 658,218  14.5  % 4.95  % 5.0% 1,486,801  28.0  % 5.20  % 836,197  18.4  % 5.35  % 5.5% 1,534,654  28.9  % 5.51  % 1,196,335  26.3  % 5.59  % 6.0% 1,283,242  24.2  % 5.93  % 1,481,454  32.7  % 5.97  % 6.5% 218,879  4.1  % 6.14  % —  —  % —  % Total 30 year fixed-rate Agency RMBS 5,309,160  100.0  % 5.46  % 4,541,525  100.0  % 5.50  % Our holdings of Agency RMBS are primarily focused on specified pools with attractive prepayment profiles. We seek to capitalize on the impact of prepayments on our investment portfolio by purchasing specified pools with characteristics that optimize borrower incentive to prepay for both our premium and discount priced investments. The table below shows the specified pool characteristics of our 30 year fixed-rate Agency RMBS holdings as of December 31, 2025 and 2024. As of December 31, 2025 2024 $ in thousands Fair Value Percentage Fair Value Percentage Specified pool characteristic: Geographic location 942,347  17.7  % 741,428  16.3  % Loan balance 2,111,999  39.8  % 1,961,771  43.2  % High loan-to-value ratio 870,125  16.4  % 509,459  11.2  % Low credit score 1,384,689  26.1  % 1,328,867  29.3  % Total 30 year fixed-rate Agency RMBS 5,309,160  100.0  % 4,541,525  100.0  % As of December 31, 2025 and 2024, our holdings of Agency CMBS represented approximately 14% and 15% of our total investment portfolio, respectively. These securities offer attractive risk-adjusted yields and diversification benefits. Further, the hedging costs associated with these holdings are economical as Agency CMBS is less sensitive to interest rate risk given prepayment protection and scheduled balloon maturity payments. As of December 31, 2025, approximately 81% of our Agency CMBS holdings were Fannie Mae DUS and 19% were Freddie Mac Multifamily Participation Certificates. 43 Table of Contents We sold our remaining investments in non-Agency securities during 2025. As of December 31, 2024, our holdings of non-Agency securities represented less than 1% of our total investment portfolio. Financing and Other Liabilities We finance the majority of our investment portfolio through repurchase agreements. Repurchase agreements are generally settled on a short-term basis, usually from one to six months, and bear interest at rates that are expected to move in close relationship to the secured overnight financing rate (“SOFR”). The following table presents the amount of collateralized borrowings outstanding under repurchase agreements as of the end of each quarter, the average amount outstanding during the quarter and the maximum balance outstanding during the quarter. $ in thousands Collateralized Borrowings Under Repurchase Agreements Quarter Ended Quarter-end Balance Average Quarterly Balance (1) Maximum Balance (2) March 31, 2024 4,393,908  4,419,757  4,531,261  June 30, 2024 4,260,475  4,251,953  4,269,254  September 30, 2024 5,184,885  5,004,504  5,184,885  December 31, 2024 4,893,958  4,865,582  4,943,054  March 31, 2025 5,354,561  4,930,237  5,354,561  June 30, 2025 4,635,881  4,577,566  4,635,881  September 30, 2025 5,150,081  4,889,782  5,150,081  December 31, 2025 5,619,255  5,393,719  5,619,255  (1)Average quarterly balance for each period is based on month-end balances. (2)Amount represents the maximum borrowings at month-end during each of the respective periods. Hedging Instruments We enter into interest rate swap agreements that are designed to mitigate the effects of changes in interest rates for a portion of our borrowings. Under these swap agreements, we generally pay fixed interest rates and receive floating interest rates indexed to SOFR. To a lesser extent, we have in the past entered into and may in the future enter into interest rate swap agreements whereby we make floating interest rate payments indexed to SOFR and receive fixed interest rate payments as part of our overall risk management strategy. We actively manage our interest rate swap portfolio as the size and composition of our investment portfolio changes. During the year ended December 31, 2025, we entered into interest rate swaps with a notional amount of $1.3 billion and terminated or settled interest rate swaps with a notional amount of $790.0 million. We also use U.S. Treasury futures contracts as an alternative way to help mitigate the potential impact of changes in interest rates on our performance. During the year ended December 31, 2025, we entered into U.S. Treasury futures contracts with a notional amount of $5.6 billion and terminated or settled U.S. Treasury futures contracts with a notional amount of $5.9 billion. Daily variation margin for interest rate swaps and U.S. Treasury futures contracts is characterized as settlement of the derivative itself rather than collateral and is recorded as a realized gain or loss in our consolidated statements of operations. Additionally, we have used and may in the future use short positions in TBAs to manage risk and economically hedge a portion of our exposure to changes in Agency RMBS valuations. 44 Table of Contents Capital Activities 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. 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  For information on dividends declared during the years ended December 31, 2025 and 2024, see Note 10 - “Stockholders' Equity" of our consolidated financial statements in Part IV, Item 15 of this annual report on Form 10-K. During the years ended December 31, 2025 and 2024, we did not repurchase any shares of our common stock. 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, 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. We redeemed all outstanding shares of our Series B Preferred Stock in December 2024. 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. Book Value per Common Share We calculate book value per common share as follows. As of December 31, In thousands except per share amounts 2025 2024 2023 Numerator (adjusted equity): Total equity 797,544  730,729  782,665  Less: Liquidation preference of Series B Preferred Stock —  —  (109,650) Less: Liquidation preference of Series C Preferred Stock (171,353) (180,166) (188,636) Total adjusted equity 626,191  550,563  484,379  Denominator (number of shares): Common stock outstanding 71,791  61,730  48,461  Book value per common share 8.72  8.92  10.00  Our book value per common share decreased 2.2% as of December 31, 2025 compared to December 31, 2024. The decrease in our book value per common share was primarily due to losses on derivative instruments, dividends declared and expenses, which were partially offset by net interest income and gains on investments. Refer to Item 7A. “Quantitative and Qualitative Disclosures About Market Risk” for interest rate risk and its impact on fair value. Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with U.S. GAAP, which requires the use of estimates and assumptions that involve the exercise of judgment and use of assumptions as to future uncertainties. Accounting estimates and assumptions discussed in this section are those that we consider to be the most critical to an understanding of our financial statements because they involve significant judgments and uncertainties. All of these estimates reflect our best judgment about current, and for some estimates, future economic and market conditions and their effects based on information available as of the date of these financial statements. If conditions change from those expected, it is possible that the judgments and estimates described below could change, which may result in a change in valuation of our investment portfolio or derivative instruments and a change in our interest income recognition among other effects. 45 Table of Contents Mortgage-Backed Securities. 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%). Under the fair value option, we recognize changes in fair value in our consolidated statement of operations. In our view, 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. We determine the fair value of our MBS by obtaining valuations from an independent source. If the fair value of a security is not available from a third-party pricing service, we may estimate the fair value of the security using a variety of methods including other pricing services, discounted cash flow analysis, matrix pricing, option adjusted spread models and other fundamental analysis of observable market factors. It is possible that changes in these inputs could change the valuation estimate. Refer to the preceding discussion under “Market Conditions and Impacts” for information on how conditions in 2025 impacted valuations of our Agency securities, which constituted substantially all of our investment portfolio during 2025. Additionally, refer to Item 7A. “Quantitative and Qualitative Disclosures About Market Risk” for the estimated impact of an instantaneous shift in the yield curve on the market value of our interest rate-sensitive instruments. Interest Income Recognition. Interest income on MBS is accrued based on the outstanding principal or notional balance of the securities and their contractual terms. 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. 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. One of the most significant factors impacting our interest income recognition is changes in long-term interest rates. When interest rates fall, prepayments will generally increase and when interest rates rise, prepayments will generally decrease. However, there are a variety of factors that may impact the rate of prepayments on our securities. Accordingly, under different conditions, we could report materially different amounts. Prepayment rates on our mortgage-backed securities accelerated in 2025 compared to 2024 as interest rates declined. Refer to Item 7A. “Quantitative and Qualitative Disclosures About Market Risk” for an estimate of the percentage change in our net interest income, including interest paid or received under interest rate swaps, caused by an instantaneous 50 and 100 basis points increase or decrease in interest rates. Accounting for Derivative Financial Instruments. We use or have used derivatives to manage interest rate risk and as an alternative means of investing in and financing Agency RMBS. We record all derivatives on our consolidated balance sheets at fair value. Refer to Note 2 - “Summary of Significant Accounting Policies” of our consolidated financial statements included in Part IV, Item 15 of this Report for a description of how we determine the fair value of our U.S. Treasury futures contracts, interest rate swaps and TBAs. As of December 31, 2025, all of our U.S. Treasury futures contracts were exchange-traded, and all of our interest rate swaps were centrally cleared by a registered clearing organization. Changes in the fair value of our derivatives are recorded in gain (loss) on derivative instruments, net in our consolidated statement of operations. Further information is provided in Note 6 - “Derivatives and Hedging Activities” of our consolidated financial statements included in Part IV, Item 15 of this Report. The factors that impact valuations of our TBAs are similar to those that impact valuations of our Agency RMBS. Valuations of U.S. Treasury futures contracts are impacted by changes in interest rates. Valuations of interest rate swaps are impacted by changes in swap rates, which includes changes in interest rates as well as changes in swap spreads. We recognized net losses on our interest rate swaps and U.S. Treasury futures contracts in 2025 as rates declined. 46 Table of Contents Results of Operations The table below presents information from our consolidated statements of operations for the years ended December 31, 2025, 2024 and 2023. Years Ended December 31, $ in thousands, except share data 2025 2024 2023 Interest income 295,287  286,546  277,929  Interest expense 219,865  249,719  228,229  Net interest income 75,422  36,827  49,700  Other income (loss) Gain (loss) on investments, net 149,344  (133,911) (107,280) (Increase) decrease in provision for credit losses —  (458) (320) Equity in earnings (losses) of unconsolidated ventures —  (193) (1) Gain (loss) on derivative instruments, net (104,926) 176,634  61,838  Other investment income (loss), net —  2  (66) Total other income (loss) 44,418  42,074  (45,829) Expenses Management fee — related party 11,295  11,866  12,290  General and administrative 7,266  7,153  7,440  Total expenses 18,561  19,019  19,730  Net income (loss) 101,279  59,882  (15,859) Dividends to preferred stockholders (13,120) (22,011) (23,153) Gain (loss) on repurchase and retirement of preferred stock 14  427  1,471  Issuance and redemption costs of redeemed preferred stock —  (3,535) —  Net income (loss) attributable to common stockholders 88,173  34,763  (37,541) Earnings (loss) per share: Net income (loss) attributable to common stockholders Basic 1.32  0.65  (0.85) Diluted 1.32  0.65  (0.85) Weighted average number of shares of common stock: Basic 66,881,856  53,773,405  44,073,815  Diluted 66,883,654  53,775,143  44,073,815  Interest Income and Average Earning Asset Yields The table below presents information related to our average earning assets and earning asset yields for the years ended December 31, 2025, 2024 and 2023.  Years ended December 31, $ in thousands 2025 2024 2023 Average earning assets (1) 5,439,209  5,208,204  5,106,473  Average earning asset yields (2) 5.43  % 5.50  % 5.44  % (1)Average balances for each period are based on weighted month-end balances. (2)Average earning asset yields for the period were calculated by dividing interest income, including amortization of premiums and discounts, by average earning assets based on the amortized cost of the investments. All yields are annualized. Total average earning assets increased $231.0 million for the year ended December 31, 2025 compared to 2024. Changes in our average earning assets are a factor of our total stockholders' equity and our desired leverage levels. Average earning asset yields decreased 7 basis points for the year ended December 31, 2025 compared to 2024. Changes in our average earning asset yields are driven by the composition of our investments, amortized cost of our securities and prepayment rates. 47 Table of Contents Our interest income includes coupon interest and net (premium amortization) discount accretion as shown in the table below. Years Ended December 31, $ in thousands 2025 2024 2023 Interest income Coupon interest 296,581  281,080  271,856  Net (premium amortization) discount accretion (1,294) 5,466  6,073  Total interest income 295,287  286,546  277,929  Our interest income increased $8.7 million for the year ended December 31, 2025 compared to 2024 due to higher average earning assets, which was partially offset by lower average earning asset yields. Prepayment Speeds Our Agency RMBS portfolio is subject to inherent prepayment risk primarily driven by changes in interest rates, which impacts the amount of premium and discount on the purchase of these securities that is recognized into interest income. Generally, in an environment of falling interest rates, prepayment speeds will increase as homeowners are more likely to prepay their existing mortgage and refinance into a lower borrowing rate. In an environment of rising interest rates, prepayment speeds will generally decrease as homeowners are not as incentivized to refinance. For Agency RMBS where we do not estimate prepayments, premium amortization and discount accretion are not impacted by prepayments until actual prepayments occur. For Agency RMBS purchased at a substantial premium relative to par value, expected future prepayment speeds are estimated on at least a quarterly basis. Faster prepayment rates on securities purchased at a premium relative to par value result in higher premium amortization and a decrease in interest income. Conversely, faster prepayment rates on securities purchased at a discount relative to par value result in higher discount accretion and an increase in interest income. The following table presents net (premium amortization) discount accretion recognized during 2025, 2024 and 2023. Years Ended December 31, $ in thousands 2025 2024 2023 Agency RMBS (1,726) 4,948  5,160  Agency CMBS 444  433  —  Non-Agency CMBS —  496  1,101  Non-Agency RMBS (12) (410) (479) U.S. Treasury securities —  (1) 291  Net (premium amortization) discount accretion (1,294) 5,466  6,073  The change in net (premium amortization) discount accretion for the year ended December 31, 2025 compared to 2024 was primarily a result of repositioning a portion of our investment portfolio into higher coupon securities that have higher amortized costs relative to par value. Our interest income is subject to interest rate risk. Refer to Item 7A. “Quantitative and Qualitative Disclosures about Market Risk” for more information relating to interest rate risk and its impact on our operating results. 48 Table of Contents Interest Expense and Cost of Funds The table below presents information related to our borrowings and cost of funds for the years ended December 31, 2025, 2024 and 2023. Years ended December 31, $ in thousands 2025 2024 2023 Total average borrowings (1) 4,948,937  4,637,086  4,540,252  Maximum borrowings during the period (2) 5,619,255  5,184,885  4,987,006  Cost of funds (3) 4.44  % 5.39  % 5.03  % (1)Average borrowings for each period are based on weighted month-end balances. (2)Amount represents the maximum borrowings at month-end during each of the respective periods. (3)Average cost of funds is calculated by dividing annualized interest expense, including amortization of net deferred gain (loss) on de-designated interest rate swaps, by our average borrowings. Total average borrowings increased $311.9 million for the year ended December 31, 2025 compared to 2024. Changes in our average borrowings are a factor of our total stockholders' equity and our desired leverage levels. Our average cost of funds decreased 95 basis points for the year ended December 31, 2025 compared to 2024. Changes in our cost of funds are substantially driven by the Federal Funds target rate, which was set at a range of 4.25% to 4.50% for the majority of 2025 and a range of 5.25% to 5.50% for the majority of 2024. The table below presents the components of interest expense for the years ended December 31, 2025, 2024 and 2023. Years ended December 31, $ in thousands 2025 2024 2023 Interest expense Interest expense on repurchase agreement borrowings 219,865  249,719  238,634  Amortization of net deferred (gain) loss on de-designated interest rate swaps —  —  (10,405) Total interest expense 219,865  249,719  228,229  Our interest expense decreased $29.9 million for the year ended December 31, 2025 compared to 2024 due to a lower cost of funds, which was partially offset by an increase in average borrowings. Net Interest Income The table below presents the components of net interest income for the years ended December 31, 2025, 2024 and 2023. Years ended December 31, $ in thousands 2025 2024 2023 Interest income 295,287  286,546  277,929  Interest expense Interest expense on repurchase agreement borrowings 219,865  249,719  238,634  Amortization of net deferred (gain) loss on de-designated interest rate swaps —  —  (10,405) Total interest expense 219,865  249,719  228,229  Net interest income 75,422  36,827  49,700  Net interest rate margin 0.99  % 0.11  % 0.41  % Our net interest income, which equals total interest income less total interest expense, and our net interest rate margin, which equals the yield on our average earning assets for the period less the average cost of funds, increased for the year ended December 31, 2025 compared to 2024 due to a lower cost of funds, which was partially offset by a decrease in average earning asset yields. Our cost of funds is generally more sensitive to changes in interest rates than the yield on our investment portfolio, which is largely comprised of 30 year fixed-rate Agency RMBS. 49 Table of Contents Gain (Loss) on Investments, net The table below summarizes the components of gain (loss) on investments, net for the years ended December 31, 2025, 2024 and 2023. Years Ended December 31, $ in thousands 2025 2024 2023 Net realized gains (losses) on sale of MBS (2,417) (9,124) (158,028) Net unrealized gains (losses) on MBS accounted for under the fair value option 151,761  (124,329) 50,364  Net unrealized gains (losses) on U.S. Treasury securities —  (372) 372  Net realized gains (losses) on U.S. Treasury securities —  (86) 12  Total gain (loss) on investments, net 149,344  (133,911) (107,280) During the year ended December 31, 2025, we sold MBS and realized net losses of $2.4 million (2024: net losses of $9.1 million). Net realized losses during the year ended December 31, 2025 primarily reflect sales of Agency RMBS during the first quarter as we rotated the portfolio into higher coupons. Net realized losses during the year ended December 31, 2024 primarily reflect sales of 4.0% to 5.0% coupon Agency RMBS with a portion of the proceeds being used to purchase Agency CMBS. As of December 31, 2025, all of our MBS were accounted for under the fair value option (December 31, 2024: $5.4 billion or 99.7%). Under the fair value option, changes in fair value are recognized in income on the consolidated statements of operations. We recorded net unrealized gains on our MBS portfolio accounted for under the fair value option of $151.8 million in 2025 (2024: net unrealized losses of $124.3 million). Net unrealized gains for the year ended December 31, 2025 were primarily due to the decline in interest rates and MBS spreads during the year, as valuations on fixed-rate securities increased as interest rates fell and spreads tightened. Net unrealized losses for the year ended December 31, 2024 were due to lower valuations on Agency RMBS and Agency CMBS given an increase in interest rates. We did not hold any U.S. Treasury securities during the year ended December 31, 2025. We recorded net realized and unrealized losses of $458,000 on a U.S. Treasury security during the year ended December 31, 2024. (Increase) Decrease in Provision for Credit Losses As of December 31, 2025, we no longer own any securities that are classified as available-for-sale and subject to evaluation for credit losses. We recorded a provision for credit losses of $458,000 on a single non-Agency CMBS for the year ended December 31, 2024. Equity in Earnings (Losses) of Unconsolidated Ventures For the year ended December 31, 2024, we recorded equity in losses of unconsolidated ventures of $193,000. We received a final distribution from our sole remaining unconsolidated venture during the first quarter of 2024, and the venture was dissolved in April 2024. Gain (Loss) on Derivative Instruments, net We record all derivatives on our consolidated balance sheets at fair value. 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. 50 Table of Contents The tables below summarize the components of our gain (loss) on derivative instruments, net for the following periods. $ in thousands Year ended December 31, 2025 Derivative Instruments 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 (162,830) 112,244  686  (49,900) U.S. Treasury futures contracts (56,313) —  (1,286) (57,599) TBAs 1,967  —  606  2,573  Total (217,176) 112,244  6  (104,926) $ in thousands Year ended December 31, 2024 Derivative Instruments 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 (47,581) 161,762  610  114,791  U.S. Treasury futures contracts 58,000  —  3,463  61,463  TBAs 986  —  (606) 380  Total 11,405  161,762  3,467  176,634  $ in thousands Year ended December 31, 2023 Derivative Instruments 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 (177,628) 239,008  918  62,298  Currency forward contracts (18) —  —  (18) TBAs (1,880) —  1,438  (442) Total (179,526) 239,008  2,356  61,838  As of December 31, 2025 and 2024, we held the following interest rate swaps whereby we pay fixed interest rates and receive floating interest rates based upon SOFR. $ in thousands As of December 31, 2025 As of December 31, 2024 Derivative instrument Notional Amount Weighted Average Fixed Pay Rate Weighted Average Floating Receive Rate Weighted Average Years to Maturity Notional Amount Weighted Average Fixed Pay Rate Weighted Average Floating Receive Rate Weighted Average Years to Maturity Interest rate swaps 3,820,000  1.34  % 3.87  % 4.6 3,265,000  0.97  % 4.49  % 5.3 We use interest rate swaps to manage our exposure to changing interest rates and add stability to our borrowings costs. During the year ended December 31, 2025, we entered into interest rate swaps with a notional amount of $1.3 billion and terminated or settled interest rate swaps with a notional amount of $790.0 million (2024: $2.6 billion of additions and $3.4 billion of terminations or settlements). We recorded net losses of $49.9 million on interest rate swaps for the year ended December 31, 2025 due to a decline in swap rates on maturities less than 15 years (2024: net gains of $114.8 million). 51 Table of Contents As of December 31, 2025 and 2024, we held the following U.S. Treasury futures contracts. As of December 31, 2025 December 31, 2024 $ in thousands Notional Amount - Short Notional Amount - Short 10 year U.S. Treasury futures 420,000  136,000  Ultra 10 year U.S. Treasury futures 455,000  1,057,000  30 year U.S. Treasury futures 215,000  209,000  Total 1,090,000  1,402,000  We use U.S. Treasury futures contracts as an alternative way to help mitigate the potential impact of changes in interest rates on our performance. During the year ended December 31, 2025, we entered into U.S. Treasury futures contracts with a notional amount of $5.6 billion and terminated or settled U.S. Treasury futures contracts with a notional amount of $5.9 billion (2024: $2.8 billion of additions and $1.4 billion of terminations or settlements). We recognized net losses of $57.6 million on U.S. Treasury futures contracts for the year ended December 31, 2025 due to a decline in interest rates (2024: net gains of $61.5 million). We primarily use TBAs that we do not intend to physically settle on the contractual settlement date in long positions as an alternative means of investing in and financing Agency RMBS. During the second quarter of 2025, we also used short positions in TBAs in response to heightened market volatility to manage risk and economically hedge a portion of our exposure to changes in Agency RMBS valuations. We recorded net gains of $2.6 million on TBAs during the year ended December 31, 2025 (2024: $380,000). Expenses For the year ended December 31, 2025, we incurred management fees of $11.3 million (2024: $11.9 million). Our management fees are determined by our average stockholders' equity. Refer to Note 9 – “Related Party Transactions” of our consolidated financial statements in Part IV, Item 15 of this Report for a discussion of our relationship with our Manager and a description of how our fees are calculated. For the year ended December 31, 2025, our general and administrative expenses not covered under our management agreement amounted to $7.3 million (2024: $7.2 million). General and administrative expenses not covered under our management agreement primarily consist of directors and officers insurance, legal costs, accounting, auditing and tax services, filing fees and miscellaneous general and administrative costs. Gain (Loss) on Repurchase and Retirement of 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 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. Gains and losses on repurchases and retirements of preferred stock represent the difference between the consideration transferred and the carrying value of the preferred stock. Issuance and Redemption Costs of Redeemed Preferred Stock On December 27, 2024, we redeemed all issued and outstanding shares of our Series B Preferred Stock for $106.2 million. The cash redemption price for each share of Series B Preferred Stock was $25.00. The excess of the consideration transferred over carrying value was accounted for as a deemed dividend and resulted in a reduction of $3.5 million in net income attributable to common stockholders during the year ended December 31, 2024. Net Income (Loss) attributable to Common Stockholders For the year ended December 31, 2025, our net income attributable to common stockholders was $88.2 million (2024: $34.8 million) or $1.32 basic and diluted net income per average share available to common stockholders (2024: $0.65). The change in net income attributable to common stockholders compared to 2024 was primarily due to: (i) net gains on investments of $149.3 million compared to net losses on investments of $133.9 million in 2024; (ii) net losses on derivative instruments of $104.9 million compared to net gains of $176.6 million in 2024 and (iii) a $38.6 million increase in net interest income. For further information on the changes in net gain (loss) on investments, net gain (loss) on derivative instruments, and changes in net interest income, see preceding discussion under “Gain (Loss) on Investments, net”, “Gain (Loss) on Derivative Instruments, net” and “Net Interest Income”. 52 Table of Contents Non-GAAP Financial Measures The table below shows the non-GAAP financial measures we use to analyze our operating results and the most directly comparable U.S. GAAP measures. We believe these non-GAAP measures are useful to investors in assessing our performance as discussed further below. Non-GAAP Financial Measure Most Directly Comparable U.S. GAAP Measure Earnings available for distribution (and by calculation, earnings available for distribution per common share) Net income (loss) attributable to common stockholders (and by calculation, basic earnings (loss) per common share) Effective interest expense (and by calculation, effective cost of funds) Total interest expense (and by calculation, cost of funds) Effective net interest income (and by calculation, effective interest rate margin) Net interest income (and by calculation, net interest rate margin) Economic debt-to-equity ratio Debt-to-equity ratio The non-GAAP financial measures used by management should be analyzed in conjunction with U.S. GAAP financial measures and should not be considered substitutes for U.S. GAAP financial measures. In addition, the non-GAAP financial measures may not be comparable to similarly titled non-GAAP financial measures of our peer companies. Earnings Available for Distribution Our business objective is to provide attractive risk-adjusted returns to our stockholders, primarily through dividends and secondarily through capital appreciation. We use earnings available for distribution as a measure of our investment portfolio’s ability to generate income for distribution to common stockholders and to evaluate our progress toward meeting this objective. We calculate earnings available for distribution as U.S. GAAP net income (loss) attributable to common stockholders adjusted for (gain) loss on investments, net; realized (gain) loss on derivative instruments, net; unrealized (gain) loss on derivative instruments, net; TBA dollar roll income; (gain) loss on repurchase and retirement of preferred stock; foreign currency (gains) losses, net and amortization of net deferred (gain) loss on de-designated interest rate swaps. We may add and have added additional reconciling items to our earnings available for distribution calculation as appropriate. By excluding the gains and losses discussed above, we believe the presentation of earnings available for distribution provides a consistent measure of operating performance that investors can use to evaluate our results over multiple reporting periods and, to a certain extent, compare to our peer companies. However, because not all of our peer companies use identical operating performance measures, our presentation of earnings available for distribution may not be comparable to other similarly titled measures used by our peer companies. We exclude the impact of gains and losses when calculating earnings available for distribution because, when analyzed in conjunction with our U.S. GAAP results, earnings available for distribution provides additional detail of our investment portfolio’s earnings capacity. In addition, certain gains and losses represent one-time events. Furthermore, gains and losses have not been accounted for consistently under U.S. GAAP. Under U.S. GAAP, certain gains and losses may be reflected in net income whereas other gains and losses may be reflected in other comprehensive income. For example, a portion of our mortgage-backed securities were historically classified as available-for-sale securities, and changes in the valuation of these securities were recorded in other comprehensive income on our consolidated balance sheets. We elected the fair value option for our mortgage-backed securities purchased on or after September 1, 2016, and changes in the valuation of these securities are recorded in other income (loss) in our consolidated statements of operations. To maintain our qualification as a REIT, U.S. federal income tax law generally requires that we distribute at least 90% of our REIT taxable income annually. Because we view earnings available for distribution as a consistent measure of our investment portfolio's ability to generate income for distribution to common stockholders, earnings available for distribution is one metric, but not the exclusive metric, that is used to determine the amount, if any, of dividends on our common stock. However, earnings available for distribution should not be considered as an indication of our taxable income, a guaranty of our ability to pay dividends or as a proxy for the amount of dividends we may pay, as earnings available for distribution excludes certain items that impact our cash needs. Earnings available for distribution is an incomplete measure of our financial performance and there are other factors that impact the achievement of our business objective. We caution that earnings available for distribution should not be considered as an alternative to net income (determined in accordance with U.S. GAAP) or as an indication of our cash flow from operating activities (determined in accordance with U.S. GAAP), a measure of our liquidity or as an indication of amounts available to fund our cash needs. 53 Table of Contents The table below provides a reconciliation of U.S. GAAP net income (loss) attributable to common stockholders to earnings available for distribution for the following periods. Years Ended December 31, $ in thousands, except per share data 2025 2024 2023 Net income (loss) attributable to common stockholders 88,173  34,763  (37,541) Adjustments: (Gain) loss on investments, net (149,344) 133,911  107,280  Realized (gain) loss on derivative instruments, net (1) 217,176  (11,405) 179,526  Unrealized (gain) loss on derivative instruments, net (1) (6) (3,467) (2,356) TBA dollar roll income (2) 1,147  1,366  697  (Gain) loss on repurchase and retirement of preferred stock (14) (427) (1,471) Foreign currency (gains) losses, net (3) —  (2) 66  Amortization of net deferred (gain) loss on de-designated interest rate swaps (4) —  —  (10,405) Subtotal 68,959  119,976  273,337  Earnings available for distribution 157,132  154,739  235,796  Basic earnings (loss) per common share 1.32  0.65  (0.85) Earnings available for distribution per common share (5) 2.35  2.88  5.35  (1)U.S. GAAP gain (loss) on derivative instruments, net on the consolidated statements of operations includes the following components. Years Ended December 31, $ in thousands 2025 2024 2023 Realized gain (loss) on derivative instruments, net (217,176) 11,405  (179,526) Unrealized gain (loss) on derivative instruments, net 6  3,467  2,356  Contractual net interest income (expense) on interest rate swaps 112,244  161,762  239,008  Gain (loss) on derivative instruments, net (104,926) 176,634  61,838  (2)A TBA dollar roll is a series of derivative transactions where TBAs with the same specified issuer, term and coupon but different settlement dates are simultaneously bought and sold. The TBA settling in the later month typically prices at a discount to the TBA settling in the earlier month. TBA dollar roll income represents the price differential between the TBA price for current month settlement compared to the TBA price for forward month settlement. We include TBA dollar roll income in earnings available for distribution because it is the economic equivalent of interest income on the underlying Agency RMBS, less an implied financing cost, over the forward settlement period. TBA dollar roll income is a component of gain (loss) on derivative instruments, net on our consolidated statements of operations. (3)     Foreign currency gains (losses), net includes foreign currency transaction gains and losses and the reclassification of currency translation adjustments that were previously recorded in accumulated other comprehensive income and is included in other investment income (loss), net on the consolidated statements of operations. (4)    U.S. GAAP interest expense on the consolidated statements of operations includes the following components. Years Ended December 31, $ in thousands 2025 2024 2023 Interest expense on repurchase agreement borrowings 219,865  249,719  238,634  Amortization of net deferred (gain) loss on de-designated interest rate swaps —  —  (10,405) Total interest expense 219,865  249,719  228,229  (5)    Earnings available for distribution per common share is equal to earnings available for distribution divided by the basic weighted average number of common shares outstanding. 54 Table of Contents The table below shows the components of earnings available for distribution for the following periods. Years Ended December 31, $ in thousands 2025 2024 2023 Effective net interest income(1) 187,666  198,589  278,303  TBA dollar roll income 1,147  1,366  697  Equity in earnings (losses) of unconsolidated ventures —  (193) (1) (Increase) decrease in provision for credit losses —  (458) (320) Total expenses (18,561) (19,019) (19,730) Subtotal 170,252  180,285  258,949  Dividends to preferred stockholders (13,120) (22,011) (23,153) Issuance and redemption costs of redeemed preferred stock —  (3,535) —  Earnings available for distribution 157,132  154,739  235,796  (1)See below for a reconciliation of net interest income to effective net interest income, a non-GAAP measure. Earnings available for distribution increased for the year ended December 31, 2025 compared to 2024 due to the redemption of our Series B Preferred Stock in December 2024, which was partially offset by lower effective net interest income. See below for details on the change in effective net interest income. Effective Interest Expense / Effective Cost of Funds / Effective Net Interest Income / Effective Interest Rate Margin We calculate effective interest expense (and by calculation, effective cost of funds) as U.S. GAAP total interest expense adjusted for contractual net interest income (expense) on our interest rate swaps that is recorded as gain (loss) on derivative instruments, net and the amortization of net deferred gains (losses) on de-designated interest rate swaps that is recorded as interest expense. We view our interest rate swaps as an economic hedge against increases in future market interest rates on our borrowings. We add back the net payments or receipts on our interest rate swap agreements to our total U.S. GAAP interest expense because we use interest rate swaps to add stability to interest expense. We exclude the amortization of net deferred gains (losses) on de-designated interest rate swaps from our calculation of effective interest expense because we do not consider the amortization a current component of our borrowing costs. We calculate effective net interest income (and by calculation, effective interest rate margin) as U.S. GAAP net interest income adjusted for contractual net interest income (expense) on our interest rate swaps that is recorded as gain (loss) on derivative instruments, net and amortization of net deferred gains (losses) on de-designated interest rate swaps that is recorded as interest expense. We believe the presentation of effective interest expense, effective cost of funds, effective net interest income and effective interest rate margin measures, when considered together with U.S. GAAP financial measures, provides information that is useful to investors in understanding our borrowing costs and operating performance. The following table reconciles total interest expense to effective interest expense and cost of funds to effective cost of funds for the following periods. Years Ended December 31, 2025 2024 2023 $ in thousands Reconciliation Cost of Funds / Effective Cost of Funds Reconciliation Cost of Funds / Effective Cost of Funds Reconciliation Cost of Funds / Effective Cost of Funds Total interest expense 219,865  4.44  % 249,719  5.39  % 228,229  5.03  % Add: Amortization of net deferred gain (loss) on de-designated interest rate swaps —  —  % —  —  % 10,405  0.23  % Less: Contractual net interest expense (income) on interest rate swaps recorded as gain (loss) on derivative instruments, net (112,244) (2.27) % (161,762) (3.49) % (239,008) (5.26) % Effective interest expense 107,621  2.17  % 87,957  1.90  % (374) —  % 55 Table of Contents Our effective interest expense increased for the year ended December 31, 2025 compared to 2024 due to a decrease in contractual net interest income on interest rate swaps and an increase in average borrowings, which were partially offset by a lower average cost of funds. Our effective cost of funds increased for the year ended December 31, 2025 compared to 2024 due to a decrease in contractual net interest income on interest rate swaps, which was partially offset by a lower average cost of funds. In addition to changes caused by the underlying floating rate index, the amount of contractual net interest income or expense on interest rate swaps that we recognize has changed based on changes in the size and composition of our interest rate swap portfolio. We also use U.S. Treasury futures contracts, which do not earn or incur contractual interest, in lieu of certain interest rate swaps as an alternative way to help mitigate the potential impact of changing interest rates on our performance. See preceding discussion under “Gain (Loss) on Derivative Instruments, net” for details of our interest rate swap portfolio as of December 31, 2025 and 2024. The following table reconciles net interest income to effective net interest income and net interest rate margin to effective interest rate margin for the following periods. Years Ended December 31, 2025 2024 2023 $ in thousands Reconciliation Net Interest Rate Margin / Effective Interest Rate Margin Reconciliation Net Interest Rate Margin / Effective Interest Rate Margin Reconciliation Net Interest Rate Margin / Effective Interest Rate Margin Net interest income 75,422  0.99  % 36,827  0.11  % 49,700  0.41  % Less: Amortization of net deferred (gain) loss on de-designated interest rate swaps —  —  % —  —  % (10,405) (0.23) % Add: Contractual net interest income (expense) on interest rate swaps recorded as gain (loss) on derivative instruments, net 112,244  2.27  % 161,762  3.49  % 239,008  5.26  % Effective net interest income 187,666  3.26  % 198,589  3.60  % 278,303  5.44  % Our effective net interest income and effective interest rate margin decreased for the year ended December 31, 2025 compared to 2024 due to a decrease in contractual net interest income on interest rate swaps and average earning asset yields, which were partially offset by a lower average cost of funds. 56 Table of Contents Economic Debt-to-Equity Ratio The table below shows our debt-to-equity ratio and our economic debt-to-equity ratio as of December 31, 2025 and 2024. Our debt-to-equity ratio is calculated in accordance with U.S. GAAP and is the ratio of total debt to total stockholders' equity. We present an economic debt-to-equity ratio, a non-GAAP financial measure of leverage that considers the impact of the off-balance sheet financing of our investments in TBAs that are accounted for as derivative instruments under U.S. GAAP. We include these types of TBAs at implied cost basis in our measure of leverage because a forward contract to acquire Agency RMBS in the TBA market carries similar risks to Agency RMBS purchased in the cash market and funded with on-balance sheet liabilities. Similarly, a contract for the forward sale of Agency RMBS has substantially the same effect as selling the underlying Agency RMBS and reducing our on-balance sheet funding commitments. We believe that presenting our economic debt-to-equity ratio, when considered together with our U.S. GAAP financial measure of debt-to-equity ratio, provides information that is useful to investors in understanding how management evaluates our at-risk leverage and gives investors a comparable statistic to those of other mortgage REITs who also invest in TBAs and present a similar non-GAAP measure of leverage. As of $ in thousands December 31, 2025 December 31, 2024 Repurchase agreements 5,619,255  4,893,958  Total stockholders' equity 797,544  730,729  Debt-to-equity ratio (1) 7.0  6.7  Economic debt-to-equity ratio (2) 7.0  6.7  (1)Debt-to-equity ratio is calculated as the ratio of total repurchase agreements to total stockholders' equity. (2)Economic debt-to-equity ratio is calculated as the ratio of total repurchase agreements and TBAs at implied cost basis (none as of December 31, 2025; $606,000 as of December 31, 2024) to total stockholders' equity. Liquidity and Capital Resources Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to pay dividends, purchase investments, repay borrowings and fund other general business needs. Our primary sources of funds for liquidity consist of the net cash proceeds from our common equity offerings, net cash provided by operating activities, proceeds from repurchase agreements and other financing arrangements and future issuances of equity and/or debt securities. We currently believe that we have sufficient liquidity and capital resources available for the acquisition of additional investments, repayments on borrowings, margin requirements and the payment of cash dividends as required for continued qualification as a REIT. We generally maintain liquidity to pay down borrowings under financing arrangements to reduce borrowing costs and otherwise efficiently manage our long-term investment capital. Because the level of these borrowings can be adjusted on a daily basis, the level of cash and cash equivalents carried on our consolidated balance sheets is significantly less important than our potential liquidity available under borrowing arrangements or through the sale of liquid investments. However, there can be no assurance that we will maintain sufficient levels of liquidity to meet margin calls. We held cash, cash equivalents and restricted cash of $166.4 million as of December 31, 2025 (2024: $210.9 million). Our cash, cash equivalents and restricted cash change due to normal fluctuations in cash balances related to the timing of principal and interest payments, repayments of debt, and asset purchases and sales. Our operating activities provided net cash of approximately $157.1 million for the year ended December 31, 2025 (2024: $183.2 million). Our investing activities used net cash of $892.9 million for the year ended December 31, 2025 (2024: $497.4 million). Our primary use of cash from investing activities during the year ended December 31, 2025 was $2.7 billion to purchase MBS (2024: $2.2 billion). We received proceeds from sales of MBS of $1.5 billion (2024: $1.3 billion from sales of MBS and $10.8 million from sales of U.S. Treasury securities). We also generated $531.9 million from principal payments of MBS during the year ended December 31, 2025 (2024: $389.5 million) and used cash of $217.2 million to settle derivative contracts during the year ended December 31, 2025 (2024: received cash of $11.4 million). Our financing activities provided net cash of $691.3 million for the year ended December 31, 2025 (2024: $326.5 million). Our primary source of cash from financing activities during the year ended December 31, 2025 was net proceeds on our repurchase agreements of $725.3 million (2024: $435.7 million) and proceeds from issuance of common stock of $81.6 million (2024: $116.5 million). We also paid dividends of $106.9 million (2024: $105.5 million) and used $8.5 million to repurchase Series C Preferred Stock during the year ended December 31, 2025 (2024: $11.1 million to repurchase Series B Preferred Stock prior to redemption and Series C Preferred Stock). We redeemed all outstanding shares of our Series B Preferred Stock for $106.2 million in December 2024. 57 Table of Contents As of December 31, 2025, the average margin requirement (weighted by borrowing amount), or the haircut, under our repurchase agreements was 4.4% for Agency RMBS and 4.9% for Agency CMBS. The haircuts ranged from a low of 3% to a high of 5% for Agency RMBS and a low of 4% to a high of 5% for Agency CMBS. Declines in the value of our securities portfolio can trigger margin calls by our lenders under our repurchase agreements. An event of default or termination event may give our counterparties the option to terminate all repurchase transactions outstanding with us and require any amount due from us to the counterparties to be payable immediately. Effects of Margin Requirements, Leverage and Spreads Our securities have values that fluctuate according to market conditions and the market value of our securities will decrease as prevailing interest rates or spreads increase. When the value of the securities pledged to secure a repurchase loan decreases to the point where the positive difference between the collateral value and the loan amount is less than the haircut, our lenders may issue a “margin call”, which means that the lender will require us to pay cash or pledge additional collateral. Under our repurchase facilities, our lenders have full discretion to determine the value of the securities we pledge to them. Most of our lenders will value securities based on recent trades in the market. Lenders also issue margin calls as the published current principal balance factors change on the pool of mortgages underlying the securities pledged as collateral when scheduled and unscheduled paydowns are announced monthly. We experience margin calls and increased collateral requirements in the ordinary course of our business. In seeking to effectively manage the margin requirements established by our lenders, we maintain a position of cash and unpledged securities. We refer to this position as our liquidity. The level of liquidity we have available to meet margin calls is directly affected by our leverage levels, our haircuts and the price changes on our securities. If interest rates increase or if spreads widen, then the value of our collateral (and our unpledged assets that constitute our liquidity) will decline, we will experience margin calls, and we will seek to use our liquidity to meet the margin calls. There can be no assurance that we will maintain sufficient levels of liquidity to meet margin calls or increased collateral requirements. If our haircuts increase, our liquidity will proportionately decrease. In addition, if we increase our borrowings, our liquidity will decrease by the amount of additional haircut on the increased level of indebtedness. Our interest rate swaps and U.S. Treasury futures contracts require us to post initial margin and daily variation margin based on subsequent changes in their fair value. Daily variation margin requirements also entitle us to receive collateral from our counterparties if the value of amounts owed to us under the derivative agreement exceeds the minimum margin requirement. We intend to maintain a level of liquidity in relation to our assets that enables us to meet reasonably anticipated margin calls and increased collateral requirements but that also allows us to be substantially invested in securities. We may misjudge the appropriate amount of our liquidity by maintaining excessive liquidity, which would lower our investment returns, or by maintaining insufficient liquidity, which would force us to liquidate assets into unfavorable market conditions and harm our results of operations and financial condition. We are subject to financial covenants in connection with our lending, derivatives and other agreements we enter into in the normal course of our business. We intend to operate in a manner that complies with all of our financial covenants. Our lending and derivative agreements provide that we may be declared in default of our obligations if our leverage ratio exceeds certain thresholds and we fail to maintain stockholders’ equity or market value above certain thresholds over specified time periods. Forward-Looking Statements Regarding Liquidity As of December 31, 2025, we held $5.9 billion of Agency securities that are financed by repurchase agreements. We also had approximately $397.3 million of unencumbered investments and unrestricted cash of $56.0 million as of December 31, 2025. As of December 31, 2025, our known contractual obligations primarily consisted of $5.6 billion of repurchase agreement borrowings with a weighted average remaining maturity of 23 days. We generally intend to refinance the majority of our repurchase agreement borrowings at market rates upon maturity. Repurchase agreement borrowings that are not refinanced upon maturity are typically repaid through the use of cash on hand or proceeds from sales of securities. Based upon our current portfolio and existing borrowing arrangements, we believe that cash flow from operations and available borrowing capacity will be sufficient to enable us to meet anticipated short-term (one year or less) liquidity requirements to fund our investment activities, pay fees under our management agreement, fund our required distributions to stockholders and fund other general corporate expenses. Our ability to meet our long-term (greater than one year) liquidity and capital resource requirements will be subject to obtaining ongoing debt financing. In addition, we may increase our capital resources by obtaining long-term credit facilities or through public or private offerings of equity or debt securities, possibly including classes of preferred stock, common stock, senior or subordinated notes and convertible notes. Such financing will depend on market conditions for capital raises and our 58 Table of Contents ability to invest such offering proceeds. If we are unable to renew, replace or expand our sources of financing on substantially similar terms, it may have an adverse effect on our business and results of operations. Exposure to Financial Counterparties We finance a substantial portion of our investment portfolio through repurchase agreements. Under these agreements, we pledge assets from our investment portfolio as collateral. Additionally, certain counterparties may require us to provide additional collateral in the event the market value of the assets declines to maintain a contractual repurchase agreement collateral ratio. If a counterparty were to default on its obligations, we would be exposed to potential losses to the extent the fair value of collateral pledged by us to the counterparty including any accrued interest receivable on such collateral exceeded the amount loaned to us by the counterparty plus interest due to the counterparty. As of December 31, 2025, one counterparty held collateral that exceeded the amounts borrowed under the related repurchase agreements by more than 5% of our stockholders’ equity. The following table summarizes our exposure to counterparties by geographic concentration as of December 31, 2025. The information is based on the geographic headquarters of the counterparty or counterparty's parent company. However, our repurchase agreements are denominated in U.S. dollars. $ in thousands Number of Counterparties Repurchase Agreement Financing Exposure North America 14  3,510,419  160,681  Asia 3  764,029  37,765  Europe (excluding United Kingdom) 2  723,946  32,814  United Kingdom 1  620,861  25,525  Total 20  5,619,255  256,785  Dividends To maintain our qualification as a REIT, U.S. federal income tax law generally requires that we distribute at least 90% of our REIT taxable income annually, determined without regard to the deduction for dividends paid and excluding net capital gains. We must pay tax at regular corporate rates to the extent that we annually distribute less than 100% of our REIT taxable income. Before we pay any dividend, whether for U.S. federal income tax purposes or otherwise, we must first meet both our operating requirements and debt service on our repurchase agreements and other debt payable. If our cash available for distribution is less than our REIT taxable income, we could be required to sell assets or borrow funds to make cash distributions, or we may make a portion of the required distribution in the form of a taxable stock distribution or distribution of debt securities. For additional information regarding the characteristics of our dividends, refer to Note 10 – “Stockholders' Equity” of our consolidated financial statements in Part IV, Item 15 of this Report. Unrelated Business Taxable Income We have not engaged in transactions that would result in a portion of our income being treated as unrelated business taxable income. Other Matters We believe that we satisfied each of the asset tests in Section 856(c)(4) of the Internal Revenue Code of 1986, as amended (the “Code”) at the end of each calendar quarter in 2025. We also believe that our revenue qualifies for the 75% source of income test and for the 95% source of income test rules for the year ended December 31, 2025. Consequently, we believe we met the REIT income and asset test as of December 31, 2025. We also met all REIT requirements regarding the stock ownership and distribution of dividends of our taxable income as of December 31, 2025. Therefore, as of December 31, 2025, we believe that we qualified as a REIT under the Code. At all times, we intend to conduct our business so that neither we nor our Operating Partnership nor the subsidiaries of our Operating Partnership are required to register as an investment company under the 1940 Act. If we were required to register as an investment company, then our use of leverage would be substantially reduced. Because we are a holding company that conducts our business through our Operating Partnership and the Operating Partnership’s wholly-owned or majority-owned subsidiaries, the securities issued by these subsidiaries that are excepted from the definition of “investment company” under Section 3(c)(1) or Section 3(c)(7) of the 1940 Act, together with any other investment securities the Operating Partnership may own, may not have a combined value in excess of 40% of the value of the Operating Partnership’s total assets (exclusive of 59 Table of Contents U.S. government securities and cash items) on an unconsolidated basis, which we refer to as the 40% test. This requirement limits the types of businesses in which we are permitted to engage in through our subsidiaries. In addition, we believe neither we nor the Operating Partnership are considered an investment company under Section 3(a)(1)(A) of the 1940 Act because they do not engage primarily or hold themselves out as being engaged primarily in the business of investing, reinvesting or trading in securities. Rather, through the Operating Partnership’s wholly-owned or majority-owned subsidiaries, we and the Operating Partnership are primarily engaged in the non-investment company businesses of these subsidiaries. IAS Asset I LLC and certain of the Operating Partnership’s other subsidiaries that we may form in the future rely upon the exclusion from the definition of “investment company” under the 1940 Act provided by Section 3(c)(5)(C) of the 1940 Act, which is available for entities “primarily engaged in the business of purchasing or otherwise acquiring mortgages and other liens on and interests in real estate.” This exclusion generally requires that at least 55% of each subsidiary’s portfolio be comprised of qualifying assets and at least 80% be comprised of qualifying assets and real estate-related assets (and no more than 20% comprised of miscellaneous assets). We calculate that as of December 31, 2025, we conducted our business so as not to be regulated as an investment company under the 1940 Act.