AGNC Investment Q3 Earnings Miss Estimates, Book Value Declines Y/Y

AGNC Investment Corp.’s AGNC third-quarter 2025 net spread and dollar roll income per common share (excluding estimated "catch-up" premium amortization benefit) of 35 cents missed the Zacks Consensus Estimate of 38 cents. The bottom line declined from 43 cents in the year-ago quarter.

Adjusted net interest and dollar roll income available to common stockholders of $430 million moved up 2.4% from the year-ago quarter.

The company reported a third-quarter comprehensive income per common share of 78 cents, up from 64 cents in 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 $148 million against net interest expenses of $64 million in the prior-year quarter. The metric missed the Zacks Consensus Estimate by 45.2%.

AGNC Investment's average asset yield on its portfolio was 4.95% in the third quarter of 2025, up from 4.73% in the third quarter of 2024.

The combined weighted average cost of funds, inclusive of interest rate swap, was 3.17% compared with 2.52% in the third quarter of 2024.

The average net interest spread (excluding estimated "catch-up" premium amortization benefits) was 1.78%, down from 2.21% in the year-ago quarter.

As of Sept. 30, 2025, AGNC’s average tangible net book value "at risk" leverage ratio was 7.6X, up from 7.2X from the prior-year quarter.

In the third quarter, the company's investment portfolio bore an average actual constant prepayment rate of 8.6%, down from 13.2% in the year-ago quarter.

As of Sept. 30, 2025, tangible net BVPS was $8.28, down 6.1% on a year-over-year basis.

The economic return on tangible common equity was 10.6% compared with 9.3% in the year-ago quarter. 

As of Sept. 30, 2025, the company’s investment portfolio aggregated $90.8 billion. This included $76.3 billion of Agency mortgage-backed securities, $13.8 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 Sept. 30, 2025, AGNC’s cash and cash equivalents totaled $450 million, down 11.2% from the prior quarter.

AGNC's Dividend Update

AGNC Investment announced a dividend of 36 cents per share for the third quarter. Management declared $15.1 billion or $49.72 per share in common stock dividends since its initial public offering in May 2008 through the third quarter of 2025.

Our View on AGNC Investment

AGNC’s third-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 is slated to report third-quarter 2025 results on Oct. 22.

Over the past month, the Zacks Consensus Estimate for NLY’s quarterly earnings has been unchanged at 72 cents per share over the past seven days. This indicates a 9.1% rise from the prior-year reported figure.

Starwood Property Trust, Inc. STWD is expected to post third-quarter results on Nov. 10.

Over the past month, the Zacks Consensus Estimate for STWD’s quarterly earnings has been revised upward to 49 cents per share over the past seven days. This indicates a rise of 2.1% 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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