Invesco Mortgage Capital Inc. today reported that its previously issued consolidated financial statements as of and for the years ended December 31, 2013 and 2014 and the interim consolidated financial statements as of and for the quarter ended March 31, 2013 and all subsequent quarters through the quarter ended March 31, 2015, need to be restated and should no longer be relied upon.  The restatements are due to an error in the GAAP accounting treatment for certain of the company's assets – specifically, credit risk transfer securities issued by government-sponsored enterprises and interest-only strips of residential mortgage-backed securities that are guaranteed by a U.S. government agency.

The company determined that these assets should be viewed for GAAP accounting purposes as hybrid financial instruments which require that a portion of the changes in fair value of such assets be reflected in "income" rather than "other comprehensive income," and a portion of interest received from such assets to be classified as "derivative income" rather than "interest income."

The company does not believe that the restatements will impact the company's previously reported book value, economic return, operating expenses, leverage ratios, taxable income or comprehensive income (loss) attributable to common stockholders.  Likewise, the restatements are not expected to impact the company's business strategy or its qualification as a REIT.

The company expects to report book value per diluted common share^* for the second quarter of 2015 of $18.62.  Additionally, the company anticipates reporting economic return⁺ for the three months and six months ended June 30, 2015 of -1.5% and 3.7%, respectively.  The company also anticipates reporting a total debt-to-equity ratio⁺⁺ of 6.9x as of June 30, 2015. 

The company intends to file its second quarter Form 10-Q on or before August 17, 2015.  The Company intends to file a comprehensive 2014 Form 10-K/A (including amended financial information for the periods of March 31, 2013 through December 31, 2014) and first quarter 2015 Form 10-Q/A shortly prior to filing its second quarter Form 10-Q.