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AGNC Investment Q2 Earnings Miss Estimates, Book Value Declines Y/Y
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Key Takeaways
AGNC posted Q2 net spread income of 38 cents per share, missing estimates and down from 53 cents a year ago.
The company's average asset yield rose to 4.87%, but the cost of funds climbed to 2.86% from 2% last year.
AGNC posted a negative 1% economic return on tangible equity, including a 44-cent dip in book value per share.
AGNC Investment Corp.’s (AGNC - Free Report) second-quarter 2025 net spread and dollar roll income per common share (excluding estimated "catch-up" premium amortization benefit) of 38 cents missed the Zacks Consensus Estimate of 42 cents. The bottom line declined from 53 cents in the year-ago quarter.
Adjusted net interest and dollar roll income of $457 million moved down 5.2% from the year-ago quarter.
The company reported a second-quarter comprehensive loss per common share of 13 cents, relatively flat from the year-ago quarter.
Results were adversely impacted by a decline in tangible net book value per share (BVPS) and net interest spread. Nonetheless, a rise in average asset yield on the portfolio was positive.
Inside AGNC's Headlines
Net interest income (NII) was $162 million against net interest expenses of $3 million in the prior-year quarter. The metric missed the Zacks Consensus Estimate by 36.2%.
AGNC Investment's average asset yield on its portfolio was 4.87% in the second quarter of 2025, up from 4.69% in the second quarter of 2024.
The combined weighted average cost of funds, inclusive of interest rate swap, was 2.86% compared with 2% in the second quarter of 2024.
The average net interest spread (excluding estimated "catch-up" premium amortization benefits) was 2.01%, down from 2.69% in the year-ago quarter.
As of June 30, 2025, AGNC’s average tangible net book value "at risk" leverage ratio was 7.6X, up from 7.4X from the prior-year quarter.
In the second quarter, the company's investment portfolio bore an average actual constant prepayment rate of 7.8%, down from 9.2% in the year-ago quarter.
As of June 30, 2025, tangible net BVPS was $7.81, down 7% on a year-over-year basis.
The economic return on tangible common equity was negative 1% compared with negative 0.9% in the year-ago quarter. This included a dividend per share of 36 cents and a decline of 44 cents in tangible net BVPS.
As of June 30, 2025, the company’s investment portfolio aggregated $82.3 billion. This included $73.3 billion of Agency mortgage-backed securities, $8.3 billion net forward purchases/(sales) of Agency MBS in the "to-be-announced" market ("TBA securities"), and $0.7 billion of CRT and non-Agency securities and other mortgage credit investments.
AGNC Investment’s Balance Sheet Position
As of June 30, 2025, AGNC’s cash and cash equivalents totaled $656 million, down 44.2% from the prior quarter.
AGNC's Dividend Update
AGNC Investment announced a dividend of 36 cents per share for the second quarter. Management declared $14.7 billion or $49.36 per share in common stock dividends since its initial public offering in May 2008 through the second quarter of 2025.
Our View on AGNC Investment
AGNC’s second-quarter results benefited from an increase in asset yields. The company’s portfolio repositioning moves cushion it from higher interest rates and prepayments. However, lower tangible book value per share and net interest spread were concerning.
AGNC Investment Corp. Price, Consensus and EPS Surprise
Annaly Capital Management, Inc. (NLY - Free Report) is slated to report second-quarter 2025 results on July 23.
Over the past month, the Zacks Consensus Estimate for NLY’s quarterly earnings has been unchanged at 70 cents per share over the past seven days. This indicates a 4.4% rise from the prior-year reported figure.
Starwood Property Trust, Inc. (STWD - Free Report) is slated to post quarterly results on August 7.
Over the past month, the Zacks Consensus Estimate for STWD’s quarterly earnings has been revised upward to 46 cents per share over the past seven days. This indicates a decline of 4.2% from the prior-year quarter’s reported figure.
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AGNC Investment Q2 Earnings Miss Estimates, Book Value Declines Y/Y
Key Takeaways
AGNC Investment Corp.’s (AGNC - Free Report) second-quarter 2025 net spread and dollar roll income per common share (excluding estimated "catch-up" premium amortization benefit) of 38 cents missed the Zacks Consensus Estimate of 42 cents. The bottom line declined from 53 cents in the year-ago quarter.
Adjusted net interest and dollar roll income of $457 million moved down 5.2% from the year-ago quarter.
The company reported a second-quarter comprehensive loss per common share of 13 cents, relatively flat from the year-ago quarter.
Results were adversely impacted by a decline in tangible net book value per share (BVPS) and net interest spread. Nonetheless, a rise in average asset yield on the portfolio was positive.
Inside AGNC's Headlines
Net interest income (NII) was $162 million against net interest expenses of $3 million in the prior-year quarter. The metric missed the Zacks Consensus Estimate by 36.2%.
AGNC Investment's average asset yield on its portfolio was 4.87% in the second quarter of 2025, up from 4.69% in the second quarter of 2024.
The combined weighted average cost of funds, inclusive of interest rate swap, was 2.86% compared with 2% in the second quarter of 2024.
The average net interest spread (excluding estimated "catch-up" premium amortization benefits) was 2.01%, down from 2.69% in the year-ago quarter.
As of June 30, 2025, AGNC’s average tangible net book value "at risk" leverage ratio was 7.6X, up from 7.4X from the prior-year quarter.
In the second quarter, the company's investment portfolio bore an average actual constant prepayment rate of 7.8%, down from 9.2% in the year-ago quarter.
As of June 30, 2025, tangible net BVPS was $7.81, down 7% on a year-over-year basis.
The economic return on tangible common equity was negative 1% compared with negative 0.9% in the year-ago quarter. This included a dividend per share of 36 cents and a decline of 44 cents in tangible net BVPS.
As of June 30, 2025, the company’s investment portfolio aggregated $82.3 billion. This included $73.3 billion of Agency mortgage-backed securities, $8.3 billion net forward purchases/(sales) of Agency MBS in the "to-be-announced" market ("TBA securities"), and $0.7 billion of CRT and non-Agency securities and other mortgage credit investments.
AGNC Investment’s Balance Sheet Position
As of June 30, 2025, AGNC’s cash and cash equivalents totaled $656 million, down 44.2% from the prior quarter.
AGNC's Dividend Update
AGNC Investment announced a dividend of 36 cents per share for the second quarter. Management declared $14.7 billion or $49.36 per share in common stock dividends since its initial public offering in May 2008 through the second quarter of 2025.
Our View on AGNC Investment
AGNC’s second-quarter results benefited from an increase in asset yields. The company’s portfolio repositioning moves cushion it from higher interest rates and prepayments. However, lower tangible book value per share and net interest spread were concerning.
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 #3 (Hold). 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 second-quarter 2025 results on July 23.
Over the past month, the Zacks Consensus Estimate for NLY’s quarterly earnings has been unchanged at 70 cents per share over the past seven days. This indicates a 4.4% rise from the prior-year reported figure.
Starwood Property Trust, Inc. (STWD - Free Report) is slated to post quarterly results on August 7.
Over the past month, the Zacks Consensus Estimate for STWD’s quarterly earnings has been revised upward to 46 cents per share over the past seven days. This indicates a decline of 4.2% from the prior-year quarter’s reported figure.