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Sep 30, 2023
AGNC Q3 2023 Earnings Report
Announced third quarter 2023 financial results, showing a comprehensive loss per common share and a decrease in tangible net book value per common share, but generated net spread and dollar roll income, excluding 'catch-up' premium amortization.
Key Takeaways
AGNC Investment Corp. reported a comprehensive loss of $(1.02) per common share, which included a net loss of $(0.68) per common share. The tangible net book value per common share decreased by $(1.31) to $8.08. The company generated $0.65 net spread and dollar roll income per common share, excluding estimated 'catch-up' premium amortization benefit. The economic return on tangible common equity was -10.1% for the quarter.
Comprehensive loss per common share was $(1.02).
Net spread and dollar roll income per common share was $0.65, excluding estimated 'catch-up' premium amortization benefit.
Tangible net book value per common share decreased to $8.08.
Economic return on tangible common equity was -10.1%.
AGNC
AGNC
Forward Guidance
Management anticipates a durable and attractive investment environment will emerge once the uncertainties associated with the current market subside.
Positive Outlook
- The current opportunity for both levered and unlevered investments in Agency MBS remains historically attractive on both an absolute and relative basis.
- AGNC raised over $430 million through accretive equity raises under its at-the-market offering program.
- AGNC's liquidity throughout the quarter remained in line with typical operating parameters.
- The company believes that a durable and attractive investment environment will emerge.
- The company believes that once the uncertainties associated with the current market environment subside, a durable and attractive investment environment will emerge.
Challenges Ahead
- A complex set of domestic and global factors, including heightened geopolitical risks, Treasury supply concerns, and an approaching inflection point in the Federal Reserve's monetary policy, drove the significant volatility and underperformance in the Treasury and other fixed income markets
- Agency MBS typically underperform in environments in which Treasury securities experience considerable price instability and the market struggles to find a new equilibrium.
- AGNC's economic return for the quarter was -10.1%, comprised of $0.36 of dividends per common share and a $(1.31) decline in tangible net book value per common share as a result of the significant mortgage spread widening during the quarter.
- The Company's tangible net book value per common share was $8.08 per share, a decrease of -14.0% for the quarter compared to $9.39 per share as of June 30, 2023.
- The Company recorded a net loss of $(316) million in other gain (loss), net, or $(0.51) per common share, compared to a net gain of $378 million, or $0.63 per common share, for the prior quarter.