AGNC Investment Q4 Earnings Miss Estimates, Book Value Improves Y/Y

AGNC Investment Corp.’s AGNC fourth-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 37 cents. Also, the bottom line declined 5.4% from the year-ago quarter.

Results were adversely impacted by a decline in average asset yield and reduced net interest spread. Further, a higher weighted average cost of funds was another concern. However, a rise in tangible net book value per share (BVPS) on the portfolio was positive.

Adjusted net interest and dollar roll income available to common stockholders of $457 million moved up 12.8% from the year-ago quarter.

The company reported fourth-quarter comprehensive income per common share of 89 cents against a comprehensive loss of 11 cents per common share in the year-ago quarter.

In 2025, net spread and dollar roll income per common share of $1.50 per share missed the consensus estimate of $1.53 and declined from $1.88 in 2024. Adjusted net interest and dollar roll income was $1.8 billion, up 1% from 2024.

Inside AGNC's Headlines

Net interest income (NII) was $206 million against net interest expense of $115 million in the prior-year quarter. The metric missed the Zacks Consensus Estimate by 36.3%.

For 2025, NII was $675 million, which missed the Zacks Consensus Estimate of $792.3 million. The metric compared favorably with $18 million of NII in 2024.

AGNC Investment's average asset yield on its portfolio was 4.87% in the fourth quarter of 2025, down from 5.02% in the fourth quarter of 2024.

The combined weighted average cost of funds, inclusive of interest rate swap, was 3.10%, up from 2.89% in the fourth quarter of 2024.

The average net interest spread (excluding estimated "catch-up" premium amortization benefits) was 1.81%, down from 1.91% in the year-ago quarter.

As of Dec. 31, 2025, AGNC’s average tangible net book value "at risk" leverage ratio was 7.2X, unchanged from the prior-year quarter.

In the fourth quarter, the company's investment portfolio bore an average actual constant prepayment rate of 9.7%, up from 9.6% in the year-ago quarter.

As of Dec. 31, 2025, tangible net BVPS was $8.88, up 5.6% on a year-over-year basis.

The economic return on tangible common equity was 11.6% against the economic loss on tangible common equity of 0.6% in the year-ago quarter.

As of Dec. 31, 2025, the company’s investment portfolio aggregated $94.8 billion. This included $81.1 billion of Agency mortgage-backed securities, $13 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 Dec. 31, 2025, AGNC’s cash and cash equivalents totaled $450 million, the same as the prior quarter.

AGNC's Dividend Update

AGNC Investment announced a dividend of 36 cents per share for the fourth quarter. Management declared $15.5 billion or $50.08 per share in common stock dividends since its initial public offering in May 2008 through the fourth quarter of 2025.

Our View on AGNC Investment

AGNC’s declining average asset yield, reduced net interest spread and higher weighted average cost of funds are likely to weigh on portfolio performance in the near term. Additionally, volatility in the mortgage market poses another risk to its investment performance. However, the company’s portfolio repositioning moves cushion it from higher interest rates and prepayments. Along with this, an improvement in tangible book value is expected to support the company’s future performance.
 

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 seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Peer Releases

Annaly Capital Management, Inc. NLY is slated to report fourth-quarter and full-year 2025 results on Jan. 28.

Over the past week, the Zacks Consensus Estimate for NLY’s quarterly earnings has been unchanged at 72 cents per share. This indicates no change from the prior-year quarter.

Starwood Property Trust, Inc. STWD is expected to post fourth-quarter and full-year 2025 results soon.

Over the past seven days, the Zacks Consensus Estimate for STWD’s quarterly earnings has been unchanged at 41 cents per share. This implies a decrease of 14.6% from the prior-year quarter.

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

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