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AGNC Investment Q1 Earnings Top Estimates, Book Value Improves Y/Y
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Key Takeaways
AGNC Q1 earnings of 42 cents beat estimates, though fall from the prior-year level.
AGNC sees higher asset yields and NII, but spread narrows as funding costs rise.
AGNC book value per share rises y/y despite higher prepayments and economic loss.
AGNC Investment Corp. (AGNC - Free Report) reported first-quarter of 2026 net spread and dollar roll income per common share of 42 cents, topping the Zacks Consensus Estimate by 16.7%. However, the metric declined 4.5% from the year-ago quarter’s 44 cents.
Adjusted net interest and dollar roll income available to common stockholders of $547 million rose 14.7% from the year-ago quarter.
Results benefited from rallies in average asset yield and net interest income (NII). Also, a rise in tangible net book value per share (BVPS) on the portfolio was positive. However, a reduced net interest spread and a higher weighted average cost of funds were concerning.
Inside AGNC's Headlines
NII came in at $319 million, rising from $159 million a year earlier, but missing the consensus estimate by 3.7%.
AGNC Investment's average asset yield on its portfolio was 4.95% in the first quarter of 2026, up from 4.78% in the first quarter of 2025.
The combined weighted average cost of funds, inclusive of interest rate swap, was 2.92%, up from 2.75% in the first quarter of 2025.
The average net interest spread (excluding estimated “catch-up” premium amortization benefits) was 2.06%, down from 2.12% in the year-ago quarter.
As of March 31, 2026, AGNC’s average tangible net book value “at risk” leverage ratio was 7.4X compared with 7.5X in the prior-year quarter.
In the first quarter, the company's investment portfolio bore an average actual constant prepayment rate of 13.2%, up from 7% in the year-ago quarter.
As of March 31, 2026, tangible net BVPS was $8.38, up 1.6% on a year-over-year basis.
The economic loss on tangible common equity was 1.6% against the economic return on tangible common equity of 2.4% in the year-ago quarter.
As of March 31, 2026, the company’s investment portfolio aggregated $94.7 billion. This included $84.4 billion in Agency mortgage-backed securities, $9.5 billion in 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 March 31, 2026, AGNC’s cash and cash equivalents totaled $493 million, up from $450 million in the prior quarter.
AGNC's Dividend Update
AGNC Investment declared dividends of 36 cents per share for the first quarter. Management declared $15.9 billion or $50.44 per share in common stock dividends since its initial public offering in May 2008 through the first quarter of 2026.
Our View on AGNC Investment
Overall, AGNC delivered a mixed first-quarter performance, with earnings surpassing expectations primarily due to a stronger net interest spread and higher income generation. However, underlying pressures, such as a slight contraction in net interest spread and elevated prepayment rates, highlight ongoing challenges in the interest rate environment. While the company’s solid dividend payout and portfolio scale continue to support investor appeal, its performance going forward will likely depend on how effectively it navigates funding costs, leverage and market volatility.
AGNC Investment Corp. Price, Consensus and EPS Surprise
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AGNC Investment Q1 Earnings Top Estimates, Book Value Improves Y/Y
Key Takeaways
AGNC Investment Corp. (AGNC - Free Report) reported first-quarter of 2026 net spread and dollar roll income per common share of 42 cents, topping the Zacks Consensus Estimate by 16.7%. However, the metric declined 4.5% from the year-ago quarter’s 44 cents.
Adjusted net interest and dollar roll income available to common stockholders of $547 million rose 14.7% from the year-ago quarter.
Results benefited from rallies in average asset yield and net interest income (NII). Also, a rise in tangible net book value per share (BVPS) on the portfolio was positive. However, a reduced net interest spread and a higher weighted average cost of funds were concerning.
Inside AGNC's Headlines
NII came in at $319 million, rising from $159 million a year earlier, but missing the consensus estimate by 3.7%.
AGNC Investment's average asset yield on its portfolio was 4.95% in the first quarter of 2026, up from 4.78% in the first quarter of 2025.
The combined weighted average cost of funds, inclusive of interest rate swap, was 2.92%, up from 2.75% in the first quarter of 2025.
The average net interest spread (excluding estimated “catch-up” premium amortization benefits) was 2.06%, down from 2.12% in the year-ago quarter.
As of March 31, 2026, AGNC’s average tangible net book value “at risk” leverage ratio was 7.4X compared with 7.5X in the prior-year quarter.
In the first quarter, the company's investment portfolio bore an average actual constant prepayment rate of 13.2%, up from 7% in the year-ago quarter.
As of March 31, 2026, tangible net BVPS was $8.38, up 1.6% on a year-over-year basis.
The economic loss on tangible common equity was 1.6% against the economic return on tangible common equity of 2.4% in the year-ago quarter.
As of March 31, 2026, the company’s investment portfolio aggregated $94.7 billion. This included $84.4 billion in Agency mortgage-backed securities, $9.5 billion in 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 March 31, 2026, AGNC’s cash and cash equivalents totaled $493 million, up from $450 million in the prior quarter.
AGNC's Dividend Update
AGNC Investment declared dividends of 36 cents per share for the first quarter. Management declared $15.9 billion or $50.44 per share in common stock dividends since its initial public offering in May 2008 through the first quarter of 2026.
Our View on AGNC Investment
Overall, AGNC delivered a mixed first-quarter performance, with earnings surpassing expectations primarily due to a stronger net interest spread and higher income generation. However, underlying pressures, such as a slight contraction in net interest spread and elevated prepayment rates, highlight ongoing challenges in the interest rate environment. While the company’s solid dividend payout and portfolio scale continue to support investor appeal, its performance going forward will likely depend on how effectively it navigates funding costs, leverage and market volatility.
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 Peer Releases
ARMOUR Residential REIT (ARR - Free Report) is expected to report first-quarter 2026 results on April 22.
Over the past week, the Zacks Consensus Estimate for ARR’s quarterly earnings has been unchanged at 73 cents per share.
Starwood Property Trust, Inc. (STWD - Free Report) is expected to post first-quarter 2026 results on May 8.
Over the past seven days, the Zacks Consensus Estimate for STWD’s quarterly earnings has been unchanged at 43 cents per share.