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AGNC Investment (AGNC) Tops on Q3 Net Spread and Dollar Roll
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AGNC Investment Corp.’s (AGNC - Free Report) third-quarter 2023 net spread and dollar roll income per common share (excluding estimated "catch-up" premium amortization costs) of 65 cents beat the Zacks Consensus Estimate of 57 cents. However, the bottom line declined from 84 cents in the prior-year quarter.
Adjusted net interest and dollar roll income (excluding estimated "catch-up" premium amortization costs) of $499 million moved down from $514 million in the quarter-ago period.
The company reported a third-quarter comprehensive loss per common share of $1.02 compared with the prior-year quarter’s loss of $2.01.
Inside the Headlines
Net interest income was negative $53 million against $177 million in the year-ago quarter. The Zacks Consensus Estimate was pegged at $310.2 million.
AGNC Investment's average asset yield on its portfolio was 4.26 % in the third quarter, up from 3.09% in the prior-year quarter.
The combined weighted average cost of funds, inclusive of interest rate swap, was 1.17% compared with 0.34% in the year-ago quarter.
The average net interest spread (excluding estimated "catch-up" premium amortization costs) was 3.03%, up from the 2.97% reported in the year-earlier quarter.
As of Sep 30, 2023, AGNC’s average tangible net book value "at risk" leverage ratio was 7.5 compared with 8.1 in the prior-year quarter.
In the third quarter, the company's investment portfolio bore an average actual constant prepayment rate of 7.1%, down from 9.2% in the previous-year quarter.
As of Sep 30, 2023, tangible net book value per common share (BVPS) was $8.08, down from $9.08 as of Sep 30, 2022.
The economic return on tangible common equity was negative 10.1%. This included a dividend per share of 36 cents and a decrease of 1.31 cents in tangible net BVPS.
As of Sep 30, 2023, the company’s investment portfolio aggregated $59.3 billion. This included $55.9 billion of Agency mortgage-backed securities, $2.4 million of net to-be-announced mortgage position, and $1.1 billion of credit risk transfer and non-Agency securities.
As of Sep 30, 2023, AGNC Investment’s cash and cash equivalents totaled $493 million, down from $1.01 billion as of Dec 31, 2022.
Dividend Update
In the third quarter, AGNC Investment announced a dividend of 12 cents per share each for July, August and September. Notably, management declared $12.6 billion in common stock dividends or $46.84 per common share since its initial public offering in May 2008 through third-quarter 2023.
Conclusion
In the third quarter, increasing asset yields supported 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.
AGNC Investment Corp. Price, Consensus and EPS Surprise
Performance and Upcoming Releases Dates of Other REITs
Annaly Capital Management, Inc. (NLY - Free Report) reported third-quarter earnings available for distribution (EAD) per average share of 66 cents, which surpassed the Zacks Consensus Estimate of 65 cents. The figure declined from $1.06 in the year-ago quarter.
NLY registered year-over-year declines in book value per share (BVPS) and margin, while the average yield on interest-earning assets improved.
We now look forward to the earnings releases of Invesco Mortgage Capital Inc. (IVR - Free Report) . The company is slated to post quarterly results on Nov 6.
Over the past month, the Zacks Consensus Estimate for IVR’s quarterly earnings has been unchanged at $1.47 per share, suggesting a marginal rise from the prior-year reported figure.
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AGNC Investment (AGNC) Tops on Q3 Net Spread and Dollar Roll
AGNC Investment Corp.’s (AGNC - Free Report) third-quarter 2023 net spread and dollar roll income per common share (excluding estimated "catch-up" premium amortization costs) of 65 cents beat the Zacks Consensus Estimate of 57 cents. However, the bottom line declined from 84 cents in the prior-year quarter.
Adjusted net interest and dollar roll income (excluding estimated "catch-up" premium amortization costs) of $499 million moved down from $514 million in the quarter-ago period.
The company reported a third-quarter comprehensive loss per common share of $1.02 compared with the prior-year quarter’s loss of $2.01.
Inside the Headlines
Net interest income was negative $53 million against $177 million in the year-ago quarter. The Zacks Consensus Estimate was pegged at $310.2 million.
AGNC Investment's average asset yield on its portfolio was 4.26 % in the third quarter, up from 3.09% in the prior-year quarter.
The combined weighted average cost of funds, inclusive of interest rate swap, was 1.17% compared with 0.34% in the year-ago quarter.
The average net interest spread (excluding estimated "catch-up" premium amortization costs) was 3.03%, up from the 2.97% reported in the year-earlier quarter.
As of Sep 30, 2023, AGNC’s average tangible net book value "at risk" leverage ratio was 7.5 compared with 8.1 in the prior-year quarter.
In the third quarter, the company's investment portfolio bore an average actual constant prepayment rate of 7.1%, down from 9.2% in the previous-year quarter.
As of Sep 30, 2023, tangible net book value per common share (BVPS) was $8.08, down from $9.08 as of Sep 30, 2022.
The economic return on tangible common equity was negative 10.1%. This included a dividend per share of 36 cents and a decrease of 1.31 cents in tangible net BVPS.
As of Sep 30, 2023, the company’s investment portfolio aggregated $59.3 billion. This included $55.9 billion of Agency mortgage-backed securities, $2.4 million of net to-be-announced mortgage position, and $1.1 billion of credit risk transfer and non-Agency securities.
As of Sep 30, 2023, AGNC Investment’s cash and cash equivalents totaled $493 million, down from $1.01 billion as of Dec 31, 2022.
Dividend Update
In the third quarter, AGNC Investment announced a dividend of 12 cents per share each for July, August and September. Notably, management declared $12.6 billion in common stock dividends or $46.84 per common share since its initial public offering in May 2008 through third-quarter 2023.
Conclusion
In the third quarter, increasing asset yields supported 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.
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 #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance and Upcoming Releases Dates of Other REITs
Annaly Capital Management, Inc. (NLY - Free Report) reported third-quarter earnings available for distribution (EAD) per average share of 66 cents, which surpassed the Zacks Consensus Estimate of 65 cents. The figure declined from $1.06 in the year-ago quarter.
NLY registered year-over-year declines in book value per share (BVPS) and margin, while the average yield on interest-earning assets improved.
We now look forward to the earnings releases of Invesco Mortgage Capital Inc. (IVR - Free Report) . The company is slated to post quarterly results on Nov 6.
Over the past month, the Zacks Consensus Estimate for IVR’s quarterly earnings has been unchanged at $1.47 per share, suggesting a marginal rise from the prior-year reported figure.