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Sep 30, 2022
AGNC Q3 2022 Earnings Report
Announced financial results reflecting a challenging quarter marked by broad-based weakness in financial markets, particularly fixed income, and prioritized risk management amidst elevated volatility and diminished liquidity.
Key Takeaways
AGNC Investment Corp. reported a comprehensive loss per common share of $(2.01) for Q3 2022. The company focused on risk management, maintaining an average 'at risk' leverage ratio of 8.1x tangible net book value and a hedge ratio of 118% of funding liabilities. Despite market challenges, net spread and dollar roll income per common share, excluding ‘catch-up’ premium amortization, improved modestly to $0.84.
Comprehensive loss per common share was $(2.01), including a net loss of $(1.31) per common share.
Net spread and dollar roll income per common share was $0.84, excluding estimated 'catch-up' premium amortization benefit.
Tangible net book value per common share decreased to $9.08, a decrease of -20.6% from the previous quarter.
Dividends declared per common share totaled $0.36 for the third quarter.
Forward Guidance
Management indicated that wider spreads provide correspondingly higher projected returns on a go-forward basis for the portfolio, and at current valuation levels, Agency MBS are as attractive as they have been in AGNC’s nearly fifteen-year history.
Positive Outlook
- Wider spreads provide correspondingly higher projected returns for the portfolio.
- Agency MBS are as attractive as they have been in AGNC’s nearly fifteen-year history at current valuation levels.
- AGNC continued to prioritize risk management.
- Net spread and dollar roll income per common share improved modestly.
- The company maintained a significant hedge position.
Challenges Ahead
- Broad-based weakness in the financial markets continued.
- Fixed income markets experienced intensified global macroeconomic and monetary policy uncertainty.
- Agency MBS underperformed in the third quarter.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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