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AGNC Investment (AGNC) Beats on Q4 Net Spread and Dollar Roll

AGNC Investment Corp.’s AGNC fourth-quarter 2022 net spread and dollar roll income per common share (excluding estimated "catch-up" premium amortization costs) of 74 cents per share beat the Zacks Consensus Estimate of 67 cents. The bottom line declined from 75 cents in the prior-year quarter. Our estimate for the same was pegged at 57 cents.

Adjusted net interest and dollar roll income (excluding catch-up premium amortization) was $451 million, rising from the quarter-ago number of $440 million.

The company reported a fourth-quarter comprehensive income per common share of $1.17 against the prior-year quarter’s loss of 31 cents.

Inside the Headlines

Net interest income of $25 million plunged 89.9% year over year.

AGNC Investment's average asset yield on its portfolio was 3.14% in the fourth quarter, up from 1.98% in the prior-year quarter.

In the reported quarter, the combined weighted average cost of funds, inclusive of the interest rate swap, was 0.94% against the total benefit of 0.02% in the prior-year quarter.

The average net interest spread (excluding catch-up premium amortization) was 2.74%, up from 2.15% reported in the prior-year quarter.

AGNC Investment’s tangible net book value "at risk" leverage ratio was 7.8 as of Dec 31, 2022, compared with 7.6 in the prior-year quarter.

In the fourth quarter, the company's investment portfolio bore a weighted average actual constant prepayment rate (CPR) of 6.8%, down from 18.6% in the prior-year quarter.

As of Dec 31, 2022, tangible net book value per share (BVPS) was $9.84, down from $15.75 as of Dec 31, 2021.

The annualized economic loss on tangible common equity for the company in the reported quarter was 12.3%. This included a dividend per share of 36 cents and an increase of 76 cents in tangible net BVPS.

As of Dec 31, 2022, the company’s investment portfolio aggregated $59.5 billion. This included $39.5 billion of Agency mortgage-backed securities, $18.6 million of net to-be-announced mortgage position and $1.4 billion of credit risk transfer and non-Agency securities.

As of Dec 31, 2022, AGNC Investment’s cash and cash equivalents totaled $1.02 billion, up from $976 million as of Sep 30, 2022.

Dividend Update

In the fourth quarter, AGNC Investment announced a dividend of 12 cents per share each for October, November and December. Notably, the company declared $12 billion in common stock dividends or $45.76 per common share since its initial public offering in May 2008 through fourth-quarter 2022.


In the fourth quarter, rising asset yields aided the results. In a bid to navigate the monetary policy transition, the company has defensively positioned itself with prudent asset-selection efforts and timely portfolio adjustment. Going forward, investments in agency MBS will drive attractive risk-adjusted returns.

Also, mortgage rates increased on a sequential basis, limiting refinancing activities in the quarter. This likely reduced the CPR levels for the company.

AGNC Investment Corp. Price, Consensus and EPS Surprise

AGNC Investment Corp. Price, Consensus and EPS Surprise
AGNC Investment Corp. Price, Consensus and EPS Surprise

AGNC Investment Corp. price-consensus-eps-surprise-chart | AGNC Investment Corp. Quote

AGNC Investment currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Release Dates of Other REITs

We now look forward to the earnings releases of Annaly Capital Management, Inc. NLY and Starwood Property Trust STWD.

Annaly is scheduled to report quarterly figures on Feb 8. NLY currently carries a Zacks Rank of 3.

Starwood Property Trust is scheduled to report quarterly figures on Mar 1. STWD currently carries a Zacks Rank of 3.

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