AGNC Investment Q3 earnings miss consensus; economic return climbs

AGNC Investment (NASDAQ:AGNC) Q3 earnings dipped from both the prior and year-ago quarters even as its tangible net book value increased from the prior quarter, boosting its economic return.

Q3 net spread and dollar roll income per share of $0.43, trailing the average analyst estimate of $0.50, fell from $0.53 in Q2 and $0.65 in last year’s Q3.

The current quarter excludes $0.03 per share of estimated “catch-up” premium amortization cost due to change in projected constant prepayment rate (“CPR”) estimates.

Tangible net book value of $8.82 per common share at Sept. 30, 2024, climbed from $8.40 at June 30. Economic return on tangible common equity grew to 9.3% from -0.9% in the prior quarter. Q3 2024 economic return is comprised of $0.36 dividends per common share and $0.42 increase in tangible net book value per common share.

AGNC (AGNC) stock edged up 0.1% in Monday after-hours trading.

The REIT’s annualized net interest spread, including the TBA position and interest rate swaps and excluding “catch-up” premium amortization, was 2.21% vs. 2.69% in Q2.

Its fixed-rate agency MBS and TBA securities’ weighted average coupon was 4.90% at Sept. 30, 2024, vs. 4.95% at June 30.

During the quarter, AGNC (AGNC) issued 78.1M common shares through its at-the-market offerings for net proceeds of $781M.

“As a levered and hedged investor in agency MBS, AGNC’s return opportunities are most favorable when agency MBS spreads to benchmark rates are wide and stable and interest rates and monetary policy are less volatile,” said President and CEO Peter Federico. “Our year-to-date performance – a 13.8% unannualized economic return – reflects both the benefits of our active portfolio management and the increasingly positive macroeconomic conditions.”

Conference call on Oct. 22 at 8:30 AM ET.

Earlier, AGNC Investment non-GAAP EPS of $0.43 misses by $0.07