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AGNC Investment (AGNC) Tops on Q4 Net Spread and Dollar Roll
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AGNC Investment Corp.’s (AGNC - Free Report) fourth-quarter 2023 net spread and dollar roll income per common share (excluding estimated "catch-up" premium amortization benefit) of 60 cents beat the Zacks Consensus Estimate of 49 cents. However, the bottom line declined from 65 cents in the prior-quarter.
Adjusted net interest and dollar roll income (excluding estimated "catch-up" premium amortization benefits) of $497 million moved down from $499 million in the quarter-ago period.
The company reported fourth-quarter comprehensive income per common share of $1. It incurred a loss of $1.02 in the prior quarter.
Inside the Headlines
Net interest income was negative $26 million compared with negative $53 million in the prior quarter. The Zacks Consensus Estimate was pegged at $351 million.
AGNC Investment's average asset yield on its portfolio was 4.55% in the fourth quarter, up from 4.26% in the prior-quarter.
The combined weighted average cost of funds, inclusive of interest rate swap, was 1.39% compared with 1.17% in the prior quarter.
The average net interest spread (excluding estimated "catch-up" premium amortization benefits) was 3.08%, up from 3.03% in the earlier quarter.
As of Dec 31, 2023, AGNC’s average tangible net book value "at risk" leverage ratio was 7.4 compared with 7.5 in the prior quarter.
In the fourth quarter, the company's investment portfolio bore an average actual constant prepayment rate of 6.2%, down from 7.1% in the previous quarter.
As of Dec 31, 2023, tangible net book value per common share (BVPS) was $8.70, up from $8.08 as of Sep 30, 2023.
The economic return on tangible common equity was 12.1%. In the prior quarter the metric was negative 10.1%. This included a dividend per share of 36 cents and an increase of 62 cents in tangible net BVPS.
As of Dec 31, 2023, the company’s investment portfolio aggregated $60.2 billion. This included $53.8 billion of Agency mortgage-backed securities, $5.4 million of net to-be-announced mortgage position and $1.1 billion of credit risk transfer and non-Agency securities.
As of Dec 31, 2023, AGNC Investment’s cash and cash equivalents totaled $518 million, up from $493 billion as of Sep 30, 2023.
Dividend Update
In the fourth quarter, AGNC Investment announced a dividend of 12 cents per share each for October, November and December. Notably, management declared $12.9 billion in common stock dividends or $47.20 per common share since its initial public offering in May 2008 through fourth-quarter 2023.
Conclusion
In the fourth 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
Annaly Capital Management, Inc. (NLY - Free Report) is slated to announce fourth-quarter 2023 results on Feb 7.
Over the past month, the Zacks Consensus Estimate for NLY’s quarterly earnings has been unchanged at 64 cents per share, suggesting a 28.1% decline from the prior-year reported figure.
We are also looking forward to the earnings release of Apollo Commercial Real Estate Finance, Inc. (ARI - Free Report) . The company is slated to post quarterly results on Feb 6.
Over the past month, the Zacks Consensus Estimate for ARI’s quarterly earnings has been unchanged at 34 cents per share, suggesting a 9.7% rise from the prior-year reported figure.
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AGNC Investment (AGNC) Tops on Q4 Net Spread and Dollar Roll
AGNC Investment Corp.’s (AGNC - Free Report) fourth-quarter 2023 net spread and dollar roll income per common share (excluding estimated "catch-up" premium amortization benefit) of 60 cents beat the Zacks Consensus Estimate of 49 cents. However, the bottom line declined from 65 cents in the prior-quarter.
Adjusted net interest and dollar roll income (excluding estimated "catch-up" premium amortization benefits) of $497 million moved down from $499 million in the quarter-ago period.
The company reported fourth-quarter comprehensive income per common share of $1. It incurred a loss of $1.02 in the prior quarter.
Inside the Headlines
Net interest income was negative $26 million compared with negative $53 million in the prior quarter. The Zacks Consensus Estimate was pegged at $351 million.
AGNC Investment's average asset yield on its portfolio was 4.55% in the fourth quarter, up from 4.26% in the prior-quarter.
The combined weighted average cost of funds, inclusive of interest rate swap, was 1.39% compared with 1.17% in the prior quarter.
The average net interest spread (excluding estimated "catch-up" premium amortization benefits) was 3.08%, up from 3.03% in the earlier quarter.
As of Dec 31, 2023, AGNC’s average tangible net book value "at risk" leverage ratio was 7.4 compared with 7.5 in the prior quarter.
In the fourth quarter, the company's investment portfolio bore an average actual constant prepayment rate of 6.2%, down from 7.1% in the previous quarter.
As of Dec 31, 2023, tangible net book value per common share (BVPS) was $8.70, up from $8.08 as of Sep 30, 2023.
The economic return on tangible common equity was 12.1%. In the prior quarter the metric was negative 10.1%. This included a dividend per share of 36 cents and an increase of 62 cents in tangible net BVPS.
As of Dec 31, 2023, the company’s investment portfolio aggregated $60.2 billion. This included $53.8 billion of Agency mortgage-backed securities, $5.4 million of net to-be-announced mortgage position and $1.1 billion of credit risk transfer and non-Agency securities.
As of Dec 31, 2023, AGNC Investment’s cash and cash equivalents totaled $518 million, up from $493 billion as of Sep 30, 2023.
Dividend Update
In the fourth quarter, AGNC Investment announced a dividend of 12 cents per share each for October, November and December. Notably, management declared $12.9 billion in common stock dividends or $47.20 per common share since its initial public offering in May 2008 through fourth-quarter 2023.
Conclusion
In the fourth 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.
Upcoming Releases Dates of Other REITs
Annaly Capital Management, Inc. (NLY - Free Report) is slated to announce fourth-quarter 2023 results on Feb 7.
Over the past month, the Zacks Consensus Estimate for NLY’s quarterly earnings has been unchanged at 64 cents per share, suggesting a 28.1% decline from the prior-year reported figure.
We are also looking forward to the earnings release of Apollo Commercial Real Estate Finance, Inc. (ARI - Free Report) . The company is slated to post quarterly results on Feb 6.
Over the past month, the Zacks Consensus Estimate for ARI’s quarterly earnings has been unchanged at 34 cents per share, suggesting a 9.7% rise from the prior-year reported figure.