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AGNC Investment Q3 Earnings Miss Estimates, Asset Yield Improves
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AGNC Investment Corp.’s (AGNC - Free Report) third-quarter 2024 net spread and dollar roll income per common share (excluding estimated "catch-up" premium amortization benefit) of 43 cents missed the Zacks Consensus Estimate of 47 cents. Also, the bottom line declined from the 65 cents reported in the previous quarter.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Adjusted net interest and dollar roll income of $420 million moved down 12.9% from the previous quarter.
The company reported a third-quarter comprehensive income per common share of 64 cents against a comprehensive loss of 13 cents in the prior quarter.
Inside AGNC's Headlines
Net interest expenses were $64 million compared with $3 million in the prior quarter. The Zacks Consensus Estimate was pegged at $219.3 million.
AGNC Investment's average asset yield on its portfolio was 4.73% in the third quarter, up from 4.69% reported in the prior quarter.
The combined weighted average cost of funds, inclusive of interest rate swap, was 2.52% compared with 2% in the prior quarter.
The average net interest spread (excluding estimated "catch-up" premium amortization benefits) was 2.21%, down from 2.69% in the previous quarter.
As of Sept. 30, 2024, AGNC’s average tangible net book value "at risk" leverage ratio was 7.2X, which remained unchanged from the prior quarter.
In the third quarter, the company's investment portfolio bore an average actual constant prepayment rate of 7.3%, up from 7.1% in the previous quarter.
As of Sept. 30, 2024, tangible net book value per common share (BVPS) was $8.82, up 5% sequentially.
The economic return on tangible common equity was 9.3% against negative 0.9% in the previous quarter. This included a dividend per share of 36 cents and an increase of 42 cents in tangible net BVPS.
As of Sept. 30, 2024, the company’s investment portfolio aggregated $73.1 billion. This included $68 billion of Agency mortgage-backed securities, $4.1 million of net forward purchases of Agency MBS in the to-be-announced market, and $1 billion of credit risk transfer and non-Agency securities and other mortgage credit investments.
AGNC’s Balance Sheet Position
As of Sept. 30, 2024, AGNC Investment’s cash and cash equivalents totaled $507 million, down 4.3% from the prior quarter.
AGNC's Dividend Update
In the third quarter, AGNC Investment announced a dividend of 12 cents per share each for July, August and September. Management declared $13.7 billion in common stock dividends or $48.28 per share since its initial public offering in May 2008 through the third quarter of 2024.
Our View on AGNC
AGNC’s third-quarter results benefited from an increase in asset yields. The company’s strategic portfolio repositioning moves cushion it from higher interest rates and prepayments. However, lower net interest spread and increased weighted average cost of funds acted as headwinds.
AGNC Investment Corp. Price, Consensus and EPS Surprise
Annaly Capital Management, Inc. (NLY - Free Report) is slated to report third-quarter 2024 results on Oct. 23.
Over the past month, the Zacks Consensus Estimate for NLY’s quarterly earnings has remained unchanged at 67 cents per share over the past seven days. This indicates a 1.52% rise from the prior-year reported figure.
Starwood Property Trust, Inc. (STWD - Free Report) is slated to post quarterly results on Nov. 6.
Over the past month, the Zacks Consensus Estimate for STWD’s quarterly earnings has been unchanged at 46 cents per share over the past seven days. This indicates a decline of 6.12% from the prior-year quarter’s reported figure.
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AGNC Investment Q3 Earnings Miss Estimates, Asset Yield Improves
AGNC Investment Corp.’s (AGNC - Free Report) third-quarter 2024 net spread and dollar roll income per common share (excluding estimated "catch-up" premium amortization benefit) of 43 cents missed the Zacks Consensus Estimate of 47 cents. Also, the bottom line declined from the 65 cents reported in the previous quarter.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Adjusted net interest and dollar roll income of $420 million moved down 12.9% from the previous quarter.
The company reported a third-quarter comprehensive income per common share of 64 cents against a comprehensive loss of 13 cents in the prior quarter.
Inside AGNC's Headlines
Net interest expenses were $64 million compared with $3 million in the prior quarter. The Zacks Consensus Estimate was pegged at $219.3 million.
AGNC Investment's average asset yield on its portfolio was 4.73% in the third quarter, up from 4.69% reported in the prior quarter.
The combined weighted average cost of funds, inclusive of interest rate swap, was 2.52% compared with 2% in the prior quarter.
The average net interest spread (excluding estimated "catch-up" premium amortization benefits) was 2.21%, down from 2.69% in the previous quarter.
As of Sept. 30, 2024, AGNC’s average tangible net book value "at risk" leverage ratio was 7.2X, which remained unchanged from the prior quarter.
In the third quarter, the company's investment portfolio bore an average actual constant prepayment rate of 7.3%, up from 7.1% in the previous quarter.
As of Sept. 30, 2024, tangible net book value per common share (BVPS) was $8.82, up 5% sequentially.
The economic return on tangible common equity was 9.3% against negative 0.9% in the previous quarter. This included a dividend per share of 36 cents and an increase of 42 cents in tangible net BVPS.
As of Sept. 30, 2024, the company’s investment portfolio aggregated $73.1 billion. This included $68 billion of Agency mortgage-backed securities, $4.1 million of net forward purchases of Agency MBS in the to-be-announced market, and $1 billion of credit risk transfer and non-Agency securities and other mortgage credit investments.
AGNC’s Balance Sheet Position
As of Sept. 30, 2024, AGNC Investment’s cash and cash equivalents totaled $507 million, down 4.3% from the prior quarter.
AGNC's Dividend Update
In the third quarter, AGNC Investment announced a dividend of 12 cents per share each for July, August and September. Management declared $13.7 billion in common stock dividends or $48.28 per share since its initial public offering in May 2008 through the third quarter of 2024.
Our View on AGNC
AGNC’s third-quarter results benefited from an increase in asset yields. The company’s strategic portfolio repositioning moves cushion it from higher interest rates and prepayments. However, lower net interest spread and increased weighted average cost of funds acted as headwinds.
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 #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Release Dates of Other REITs
Annaly Capital Management, Inc. (NLY - Free Report) is slated to report third-quarter 2024 results on Oct. 23.
Over the past month, the Zacks Consensus Estimate for NLY’s quarterly earnings has remained unchanged at 67 cents per share over the past seven days. This indicates a 1.52% rise from the prior-year reported figure.
Starwood Property Trust, Inc. (STWD - Free Report) is slated to post quarterly results on Nov. 6.
Over the past month, the Zacks Consensus Estimate for STWD’s quarterly earnings has been unchanged at 46 cents per share over the past seven days. This indicates a decline of 6.12% from the prior-year quarter’s reported figure.