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AGNC Investment (AGNC) Earnings In line With Estimates in Q4

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AGNC Investment Corp. (AGNC - Free Report) reported fourth-quarter 2017 net spread and dollar roll income of 62 cents per share that came in line with the Zacks Consensus Estimate. The figure came in above the prior-quarter tally of 59 cents per share. However, net spread and dollar roll income for full-year 2017 came in at $2.46 per share, missing the Zacks Consensus Estimate of $2.55.

Further, the fourth-quarter comprehensive income per common share came in at 44 cents, way below the 99 cents recorded in the prior quarter.

Also, as of Dec 31, 2017, the company’s tangible net book value per share was $19.69, down from $19.78 as of Sep 30, 2017.

The economic return on tangible common equity for the company during the reported quarter was 2.3%. This included dividend per share of 54 cents and a decrease of 9 cents in tangible net book value per share.

Net interest income (NII) of $212 million came in above the prior-quarter figure of $178 million. Further, it easily surpassed the Zacks Consensus Estimate of $204.3 million. For full-year 2017, NII came in at $769 million, missing the Zacks Consensus Estimate of $761.3 million.

Inside the Headlines

As of Dec 31, 2017, the company’s investment portfolio aggregated $72.8 billion. This included $71.9 billion of Agency mortgage backed securities (MBS) and to-be-announced (TBA) securities, $0.9 billion of credit risk transfer (CRT) and non-agency securities and $29 million of investments in REIT equity securities consisting of shares of MTGE Investment.

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 8.1x as of Dec 31, 2017, against 8.0x as of Sep 30, 2017.

For the fourth quarter, the company's investment portfolio bore a weighted average constant repayment rate (CPR) of 10.1%, down from 12.1% in the prior quarter.

Excluding net TBA position, AGNC Investment's average asset yield was 2.84% for the reported quarter, up from 2.72% recorded in the previous quarter.

For the fourth quarter, combined average cost of funds inclusive of interest rate swap costs, came in at 1.52%, an increase from 1.46% for the prior quarter.

Annualized net interest margin including TBA securities and interest rate swap costs for the quarter came in at 1.35%, up from 1.34% reported in the prior quarter.

Also, as of Dec 31, 2017, AGNC Investment’s cash and cash equivalents totaled around $1.05 billion, down from $1.10 billion as of Sep 30, 2017.

Dividend Update

In the fourth quarter, AGNC Investment announced monthly dividends of 18 cents per share for October, November and December. Notably, the company had announced a total of $7.5 billion in common stock dividends or $37.16 per common share, since its initial public offering in May 2008 through fourth-quarter 2017.

AGNC Investment Corp. Price, Consensus and EPS Surprise

AGNC Investment currently sports a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

We now look forward to the fourth-quarter earnings releases of some other companies like EPR Properties (EPR - Free Report) , Lamar Advertising Company (LAMR - Free Report) and Outfront Media Inc. (OUT - Free Report) . EPR Properties is scheduled to announce results on Feb 28 while Lamar Advertising Company and Outfront Media are slated to report on Feb 27.

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