AGNC Investment Corp.’s AGNC first-quarter 2025 net spread and dollar roll income per common share (excluding estimated "catch-up" premium amortization benefit) of 44 cents topped the Zacks Consensus Estimate of 41 cents. The bottom line declined from 58 cents in the year-ago quarter.

Adjusted net interest and dollar roll income of $477 million moved down 3.8% from the year-ago quarter.

The company reported a first-quarter comprehensive income per common share of 12 cents compared with 48 cents in the year-ago quarter.

Inside AGNC's Headlines

Net interest income (NII) was $159 million against net interest expenses of $30 million in the prior-year quarter. The metric missed the Zacks Consensus Estimate by 27.4%.

AGNC Investment's average asset yield on its portfolio was 4.78% in the first quarter of 2025, up from 4.53% in the first quarter of 2024.

The combined weighted average cost of funds, inclusive of interest rate swap, was 2.75% compared with 1.58% in the first quarter of 2024.

The average net interest spread (excluding estimated "catch-up" premium amortization benefits) was 2.12%, down from 2.98% in the year-ago quarter.

As of March 31, 2025, AGNC’s average tangible net book value "at risk" leverage ratio was 7.3X, up from 7X from the prior-year quarter.

In the first quarter, the company's investment portfolio bore an average actual constant prepayment rate of 7%, up from 5.7% in the year-ago quarter.

As of March 31, 2025, tangible net book value per common share (BVPS) was $8.25, down 6.7% on a year-over-year basis.

The economic return on tangible common equity was 2.4% compared with 5.7% in the year-ago quarter. This included a dividend per share of 36 cents and a modest decline of 16 cents in tangible net BVPS.

As of March 31, 2025, the company’s investment portfolio aggregated $78.9 billion. This included $70.5 billion of Agency mortgage-backed securities, $7.5 billion net forward purchases/(sales) of Agency MBS in the "to-be-announced" market ("TBA securities"), and $0.9 billion of CRT and non-Agency securities and other mortgage credit investments.

AGNC Investment’s Balance Sheet Position

As of March 31, 2025, AGNC’s cash and cash equivalents totaled $455 million, down 9.9% from the prior quarter.

AGNC's Dividend Update

In the first quarter, AGNC Investment announced a dividend of 12 cents per share each for January, February and March, totaling 36 cents per share for the quarter. Management declared $14.3 billion in common stock dividends or $48.64 per share since its initial public offering in May 2008 through the first quarter of 2025.

Story Continues

Our View on AGNC Investment

AGNC’s first-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 SurpriseAGNC 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 #2 (Buy).  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 first-quarter 2025 results on April 30.

Over the past month, the Zacks Consensus Estimate for NLY’s quarterly earnings has been revised downward to 70 cents per share over the past seven days. This indicates a 10.5% rise from the prior-year reported figure. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

Starwood Property Trust, Inc. STWD is slated to post quarterly results on May 9.

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 22% from the prior-year quarter’s reported figure.

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This article originally published on Zacks Investment Research (zacks.com).

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