AGNC Investment Corp.’s AGNC fourth-quarter 2024 net spread and dollar roll income per common share (excluding estimated "catch-up" premium amortization benefit) of 37 cents missed the Zacks Consensus Estimate of 42 cents. Also, the bottom line declined from 60 cents in the year-ago quarter.

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Adjusted net interest and dollar roll income of $405 million moved down 18.5% from the year-ago quarter.

The company reported a fourth-quarter comprehensive loss per common share of 11 cents against a comprehensive income of 1 cent per share in the year-ago quarter.

In 2024, net spread and dollar roll income per common share of $1.88 per share missed the consensus estimate of $1.95. However, the metric fell from $2.61 in 2023. Adjusted net interest and dollar roll income was $1.8 billion, up 9% from 2023.

Inside AGNC's Headlines

Net interest income (NII) was $115 million against net interest expenses of $26 million in the prior-year quarter. The metric missed the Zacks Consensus Estimate by 23.7%.

For 2024, NII was $18 million, which missed the Zacks Consensus Estimate of $314 billion. The metric compared favorably with $246 million of net interest expenses in 2023.

AGNC Investment's average asset yield on its portfolio was 5.02% in the fourth quarter, up from 4.55% in the fourth quarter of 2023.

The combined weighted average cost of funds, inclusive of interest rate swap, was 2.89% compared with 1.39% in the fourth quarter of 2023.

The average net interest spread (excluding estimated "catch-up" premium amortization benefits) was 1.91%, down from 3.08% in the previous quarter.

As of Dec. 31, 2024, AGNC’s average tangible net book value "at risk" leverage ratio was 7.2X, down from 7.4X from the prior-year quarter.

In the fourth quarter, the company's investment portfolio bore an average actual constant prepayment rate of 9.6%, up from 6.2% in the year-ago quarter.

As of Dec. 31, 2024, tangible net book value per common share (BVPS) was $8.41, down 3.3% on a year-over-year basis.

The economic return on tangible common equity was negative 0.6% against 12.1% in the year-ago quarter. This included a dividend per share of 36 cents and a decrease of 41 cents in tangible net BVPS.

As of Dec. 31, 2024, the company’s investment portfolio aggregated $73.3 billion. This included $65.5 billion of Agency mortgage-backed securities and $6.9 billion of net forward purchases of Agency MBS in the to-be-announced market, as well as $0.9 billion of credit risk transfer, and non-Agency securities and other mortgage credit investments.

AGNC Investment’s Balance Sheet Position

As of Dec. 31, 2024, AGNC’s cash and cash equivalents totaled $505 million, down 0.4% from the prior quarter.

AGNC's Dividend Update

In the fourth quarter, AGNC Investment announced a dividend of 12 cents per share each for October, November and December, totaling $0.36 per share for the quarter. Management declared $14 billion in common stock dividends or $48.64 per share since its initial public offering in May 2008 through the fourth quarter of 2024.

Our View on AGNC Investment

AGNC’s fourth-quarter results benefited from an increase in asset yields and higher net interest spread. The company’s strategic portfolio repositioning moves cushion it from higher interest rates and prepayments. However, lower tangible book value per share was 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 #4 (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 is slated to report fourth-quarter 2024 results on Jan. 29.

Over the past month, the Zacks Consensus Estimate for NLY’s quarterly earnings has been unchanged at 67 cents per share over the past seven days. This indicates a 1.5% decline from the prior-year reported figure.

Starwood Property Trust, Inc. STWD is slated to post quarterly results on Feb. 27.

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 20.7% from the prior-year quarter’s reported figure.

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