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AGNC Stock Dips Despite Q2 Earnings Beat, Book Value Improves Y/Y
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Key Takeaways
AGNC posted Q2 net spread and dollar roll income of 40 cents, beating estimates, but shares fell 2.7%.
AGNC's NII rose to $305 million, while tangible net BVPS increased 9.9% year over year
Higher funding costs and prepayment rates pressured spreads despite portfolio and book value growth.
AGNC Investment Corp. (AGNC - Free Report) reported second-quarter 2026 net spread and dollar roll income per common share of 40 cents, topping the Zacks Consensus Estimate by 5.3%. The metric increased 5.3% from the year-ago quarter’s 38 cents.
Results benefited from higher net interest income (NII), an increase in tangible net book value per share (BVPS) and growth in the investment portfolio. However, a lower net interest spread, a rise in the weighted average cost of funds and elevated prepayment rates were concerning. Given the concern, AGNC shares plunged nearly 2.7% in yesterday’s trading session.
Adjusted net interest and dollar roll income available to common stockholders of $533 million rose 16.6% from the year-ago quarter.
Inside AGNC's Headlines
NII came in at $305 million, rising from $162 million a year earlier, but missing the consensus estimate by 16.3%.
AGNC Investment's average asset yield on its portfolio was 4.89% in the second quarter of 2026, up from 4.87% in the second quarter of 2025.
The combined weighted average cost of funds, inclusive of interest rate swaps, was 2.89%, up from 2.86% in the second quarter of 2025.
The average net interest spread (excluding estimated “catch-up” premium amortization costs) was 2%, down from 2.01% in the year-ago quarter.
As of June 30, 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 second quarter, the company's investment portfolio bore an average actual constant prepayment rate of 13%, up from 8.7% in the year-ago quarter.
As of June 30, 2026, tangible net BVPS was $8.58, up 9.9% on a year-over-year basis.
The economic return on tangible common equity was 6.7% against the economic loss on tangible common equity of 1% in the year-ago quarter.
As of June 30, 2026, the company’s investment portfolio aggregated $97.2 billion. This included $86.8 billion in Agency mortgage-backed securities, $9.7 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 June 30, 2026, AGNC’s cash and cash equivalents totaled $457 million, down from $493 million in the prior quarter.
AGNC's Dividend Update
AGNC Investment declared dividends of 36 cents per share for the second quarter. Management declared $16.3 billion, or $50.80 per share in common stock dividends, since its initial public offering in May 2008 through the second quarter of 2026.
Our View on AGNC Investment
Overall, AGNC delivered a solid second-quarter performance, with earnings surpassing expectations and net interest income increasing significantly year over year. An improvement in tangible net book value, expansion of the investment portfolio and a positive economic return were encouraging. However, the slight contraction in net interest spread, higher funding costs and elevated prepayment rates remain concerns. The company’s decent liquidity position, portfolio scale and consistent dividend payout continue to support its financial position.
AGNC Investment Corp. Price, Consensus and EPS Surprise
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AGNC Stock Dips Despite Q2 Earnings Beat, Book Value Improves Y/Y
Key Takeaways
AGNC Investment Corp. (AGNC - Free Report) reported second-quarter 2026 net spread and dollar roll income per common share of 40 cents, topping the Zacks Consensus Estimate by 5.3%. The metric increased 5.3% from the year-ago quarter’s 38 cents.
Results benefited from higher net interest income (NII), an increase in tangible net book value per share (BVPS) and growth in the investment portfolio. However, a lower net interest spread, a rise in the weighted average cost of funds and elevated prepayment rates were concerning. Given the concern, AGNC shares plunged nearly 2.7% in yesterday’s trading session.
Adjusted net interest and dollar roll income available to common stockholders of $533 million rose 16.6% from the year-ago quarter.
Inside AGNC's Headlines
NII came in at $305 million, rising from $162 million a year earlier, but missing the consensus estimate by 16.3%.
AGNC Investment's average asset yield on its portfolio was 4.89% in the second quarter of 2026, up from 4.87% in the second quarter of 2025.
The combined weighted average cost of funds, inclusive of interest rate swaps, was 2.89%, up from 2.86% in the second quarter of 2025.
The average net interest spread (excluding estimated “catch-up” premium amortization costs) was 2%, down from 2.01% in the year-ago quarter.
As of June 30, 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 second quarter, the company's investment portfolio bore an average actual constant prepayment rate of 13%, up from 8.7% in the year-ago quarter.
As of June 30, 2026, tangible net BVPS was $8.58, up 9.9% on a year-over-year basis.
The economic return on tangible common equity was 6.7% against the economic loss on tangible common equity of 1% in the year-ago quarter.
As of June 30, 2026, the company’s investment portfolio aggregated $97.2 billion. This included $86.8 billion in Agency mortgage-backed securities, $9.7 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 June 30, 2026, AGNC’s cash and cash equivalents totaled $457 million, down from $493 million in the prior quarter.
AGNC's Dividend Update
AGNC Investment declared dividends of 36 cents per share for the second quarter. Management declared $16.3 billion, or $50.80 per share in common stock dividends, since its initial public offering in May 2008 through the second quarter of 2026.
Our View on AGNC Investment
Overall, AGNC delivered a solid second-quarter performance, with earnings surpassing expectations and net interest income increasing significantly year over year. An improvement in tangible net book value, expansion of the investment portfolio and a positive economic return were encouraging. However, the slight contraction in net interest spread, higher funding costs and elevated prepayment rates remain concerns. The company’s decent liquidity position, portfolio scale and consistent dividend payout continue to support its financial position.
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
Ellington Financial (EFC - Free Report) is expected to report second-quarter 2026 results on Aug. 06.
Over the past week, the Zacks Consensus Estimate for ARR’s quarterly earnings has been unchanged at 46 cents per share.
Starwood Property Trust, Inc. (STWD - Free Report) is expected to post second-quarter 2026 results on Aug. 06.
Over the past seven days, the Zacks Consensus Estimate for STWD’s quarterly earnings has been unchanged at 41 cents per share.