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AGNC Investment (AGNC) Q1 Net Spread and Dollar Roll Beat

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AGNC Investment Corp. AGNC reported first-quarter 2021 net spread and dollar roll income (excluding estimated catch-up premium amortization costs) of 76 cents per share, beating the Zacks Consensus Estimate of 64 cents. Also, the reported figure improved from the first-quarter 2020 figure of 57 cents.

Adjusted net interest and dollar roll income (excluding catch-up premium amortization) was $457 million, surpassing the Zacks Consensus Estimate of $412 million. The reported figure also improved from the year-ago figure of $357 million.

Net interest income of $528 million significantly surged from the prior-year quarter’s $65 million.

The company reported first-quarter comprehensive income per common share of $1.33 compared with the prior quarter’s $1.16.

Also, as of Mar 31, 2021, its tangible net book value per share (“BVPS”) was $17.72, up 6% from $16.71 as of Dec 31, 2020. Also, it compares favorably with BVPS of $13.62 as of Mar 31, 2020.

The economic loss on tangible common equity for the company in the reported quarter was 8.2%. This included a dividend per share of 36 cents and an increase of $1.01 in tangible net BVPS.

Inside the Headlines

As of Mar 31, 2021, the company’s investment portfolio aggregated $90.3 billion. This included $63.6 billion of Agency mortgage backed securities, $24.8 billion of to-be-announced (TBA) securities and $1.9 billion of credit risk transfer and non-Agency securities.

Inclusive of its net TBA position and net payable/ (receivable) for unsettled securities, AGNC Investment’s tangible net book value "at risk" leverage ratio was 7.7X as of Mar 31, 2021, compared with 8.5X in the prior quarter.

For the March-end quarter, the company's investment portfolio bore a weighted average actual constant prepayment rate of 24.6%, down from 27.6% witnessed in fourth-quarter 2020.

Excluding net TBA position, AGNC Investment's average asset yield on its portfolio, excluding the net TBA position, was 3.78 % in the first quarter, up from 1.64% recorded in the previous quarter.

For the March-end quarter, the combined average cost of funds, inclusive of interest rate swap costs, was 0.02%, down from 0.05% witnessed in the previous quarter.

Average net interest spread (excluding catch-up premium amortization) was 2 %, down from 2.02% reported in the prior quarter.

Also, as of Mar 31, 2021, AGNC Investment’s cash and cash equivalents totaled $963 million, down from $1.01 billion as of Dec 31, 2020.

Dividend Update and Share Repurchase

In the first quarter, AGNC Investment announced a dividend of 12 cents per share each for January, February and March. Notably, the company announced $10.6 billion in common stock dividends or $43.24 per common share since its initial public offering in May 2008 through first-quarter 2021.

In the first quarter, it repurchased 13.4 million shares or $215 million of its common stock for an average price of $16.05 per share.

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.

We now look forward to the earnings releases of other REITs like Digital Realty Trust, Inc. DLR, Cousins Properties CUZ and CubeSmart CUBE. All three companies are slated to report first-quarter earnings on Apr 29.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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AGNC Investment Corp. (AGNC) : Free Stock Analysis Report

Cousins Properties Incorporated (CUZ) : Free Stock Analysis Report

Digital Realty Trust, Inc. (DLR) : Free Stock Analysis Report

CubeSmart (CUBE) : Free Stock Analysis Report

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