AGNC Investment Corp. Announces Second Quarter 2025 Financial Results
BETHESDA, Md., July 21, 2025 /PRNewswire/ -- AGNC Investment Corp. ("AGNC" or the "Company") (NASDAQ:AGNC) today announced financial results for the quarter ended June 30, 2025.
SECOND QUARTER 2025 FINANCIAL HIGHLIGHTS
$(0.13) comprehensive loss per common share, comprised of:
$(0.17) net loss per common share
$0.05 other comprehensive income ("OCI") per common share on investments marked-to-market through OCI
$0.38 net spread and dollar roll income per common share1
Excludes $0.01 per common share of estimated "catch-up" premium amortization benefit due to change in projected constant prepayment rate ("CPR") estimates
$7.81 tangible net book value per common share as of June 30, 2025
Decreased $(0.44) per common share, or -5.3%, from $8.25 per common share as of March 31, 2025
$0.36 dividends declared per common share for the second quarter
-1.0% economic return on tangible common equity for the quarter
Comprised of $0.36 dividends per common share and $(0.44) decrease in tangible net book value per common share
OTHER SECOND QUARTER HIGHLIGHTS
$82.3 billion investment portfolio as of June 30, 2025, comprised of:
$73.3 billion Agency MBS
$8.3 billion net forward purchases/(sales) of Agency MBS in the "to-be-announced" market ("TBA securities")
$0.7 billion credit risk transfer ("CRT") and non-Agency securities and other mortgage credit investments
7.6x tangible net book value "at risk" leverage as of June 30, 2025
7.5x average tangible net book value "at risk" leverage for the quarter
Unencumbered cash and Agency MBS totaled $6.4 billion as of June 30, 2025
Excludes unencumbered CRT and non-Agency securities
Represents 65% of the Company's tangible equity as of June 30, 2025
7.8% average projected portfolio life CPR as of June 30, 2025
8.7% actual portfolio CPR for the quarter
2.01% annualized net interest spread for the quarter2
Issued 92.6 million shares of common equity through At-the-Market ("ATM") Offerings for net proceeds of $799 million
___________
1.
Represents a non-GAAP measure. Please refer to the Reconciliation of GAAP Comprehensive Income (Loss) to Net Spread and Dollar Roll Income and Use of Non-GAAP Financial Information included in this release for additional information.
2.
Please refer to Net Interest Spread Components by Funding Source included in this release for additional information regarding the Company's annualized net interest spread.
MANAGEMENT REMARKS"Following the administration's 'Liberation Day' tariff announcement in early April, financial markets repriced significantly to reflect greater governmental policy risk and its potentially adverse impact on the economy and monetary policy. Interest rate volatility also increased notably, and investor sentiment turned sharply negative," said Peter Federico, the Company's President, Chief Executive Officer and Chief Investment Officer. "Although most asset class valuations retraced the April losses and ultimately increased quarter-over-quarter, Agency MBS were an exception, as spreads to benchmark rates widened moderately during the second quarter. As a result of this underperformance, AGNC's economic return for the second quarter was -1.0%.
"Looking ahead, we continue to have a favorable outlook for levered and hedged Agency MBS investments. Mortgage spreads to benchmark rates remain elevated by historical standards and range-bound, an extremely favorable return environment. Supply dynamics remain in balance with demand, and bank participation in the Agency MBS markets appears poised to increase following the adoption of anticipated regulatory changes. Finally, and perhaps most importantly, the administration has reiterated its intent to preserve Agency MBS' pristine credit profile and to maintain or reduce current mortgage spreads to benchmark rates. Collectively, we believe these dynamics provide a very positive backdrop for AGNC's investment activities."
"AGNC's -1.0% economic return on tangible common equity in the second quarter was comprised of $0.36 of dividends per common share and a $(0.44) decline in tangible net book value per common share, driven by moderately wider mortgage spreads to benchmark rates," said Bernice Bell, the Company's Executive Vice President and Chief Financial Officer. "AGNC's net spread and dollar roll income was $0.38 per common share for the second quarter. As a result of our risk management positioning and ample liquidity at the end of the first quarter, AGNC was able to navigate the substantial financial market volatility in April with our portfolio intact, and we opportunistically added assets at attractive levels using accretive capital raised through our At-the-Market program. Finally, AGNC concluded the second quarter with tangible 'at risk' leverage of 7.6x and a substantial liquidity position of $6.4 billion of unencumbered cash and Agency MBS, which constituted 65% of our tangible equity."
TANGIBLE NET BOOK VALUE PER COMMON SHAREAs of June 30, 2025, the Company's tangible net book value per common share was $7.81 per share, a decrease of -5.3% for the quarter compared to $8.25 per share as of March 31, 2025. The Company's tangible net book value per common share excludes $526 million, or $0.50 and $0.55 per share, of goodwill as of June 30 and March 31, 2025, respectively.
INVESTMENT PORTFOLIOAs of June 30, 2025, the Company's investment portfolio totaled $82.3 billion, comprised of:
$81.6 billion of Agency MBS and TBA securities, including:
$79.4 billion of fixed-rate securities, comprised of:
$70.5 billion 30-year MBS,
$8.1 billion 30-year TBA securities, net, and
$0.8 billion 15 and 20-year MBS and TBA securities; and
$2.2 billion of collateralized mortgage obligations ("CMOs"), adjustable-rate and other Agency securities; and
$0.7 billion of CRT and non-Agency securities and other mortgage credit investments.
As of June 30, 2025, 30-year fixed-rate Agency MBS and TBA securities represented 96% of the Company's investment portfolio, unchanged from March 31, 2025.As of June 30, 2025, the Company's fixed-rate Agency MBS and TBA securities' weighted average coupon was 5.13%, compared to 5.03% as of March 31, 2025, comprised of the following weighted average coupons:
5.14% for 30-year fixed-rate securities;
4.33% for 15-year fixed-rate securities; and
3.11% for 20-year fixed-rate securities.
The Company accounts for TBA securities and other forward settling securities as derivative instruments and recognizes TBA dollar roll income in other gain (loss), net on the Company's financial statements. As of June 30, 2025, such positions had a fair value of $8.3 billion and a GAAP net carrying value of $101 million reported in derivative assets/(liabilities) on the Company's balance sheet, compared to $7.5 billion and $44 million, respectively, as of March 31, 2025.
CONSTANT PREPAYMENT RATESThe Company's weighted average projected CPR for the remaining life of its Agency securities held as of June 30, 2025 decreased to 7.8% from 8.3% as of March 31, 2025. The Company's weighted average CPR for the second quarter was 8.7%, compared to 7.0% for the prior quarter.
The weighted average cost basis of the Company's investment portfolio was 101.2% of par value as of June 30, 2025. The Company's investment portfolio generated net premium amortization cost of $(30) million, or $(0.03) per common share, for the second quarter, which includes a "catch-up" premium amortization benefit of $11 million, or $0.01 per common share, due to a decrease in the Company's CPR projections for certain securities acquired prior to the second quarter. This compares to net a premium amortization cost for the prior quarter of $(39) million, or $(0.04) per common share, including a "catch-up" premium amortization (cost) of $(2) million, or less than $(0.01) per common share.
ASSET YIELDS, COST OF FUNDS AND NET INTEREST RATE SPREAD The Company's average asset yield on its investment portfolio, excluding the TBA position, was 4.89% for the second quarter, compared to 4.78% for the prior quarter. Excluding "catch-up" premium amortization, the Company's average asset yield was 4.83% for the second quarter, compared to 4.80% for the prior quarter. Including the TBA position and excluding "catch-up" premium amortization, the Company's average asset yield for the second quarter was 4.87%, unchanged from the prior quarter.
For the second quarter, the weighted average interest rate on the Company's repurchase agreements was 4.44%, compared to 4.45% for the prior quarter. For the second quarter, the Company's TBA position had an implied financing cost of 4.29%, compared to 4.34% for the prior quarter. Inclusive of interest rate swaps, the Company's combined weighted average cost of funds for the second quarter was 2.86%, compared to 2.75% for the prior quarter.
The Company's annualized net interest spread, including the TBA position and interest rate swaps and excluding "catch-up" premium amortization, for the second quarter was 2.01%, compared to 2.12% for the prior quarter.
NET SPREAD AND DOLLAR ROLL INCOMEThe Company recognized net spread and dollar roll income (a non-GAAP financial measure) for the second quarter of $0.38 per common share, compared to $0.44 per common share for the prior quarter. Net spread and dollar roll income excludes $0.01 and less than $(0.01) per common share of estimated "catch-up" premium amortization benefit / (cost) for the second quarter and prior quarter, respectively.
The Company's cost of funds, net interest rate spread and net spread and dollar income excludes the impact of the Company's U.S. Treasury hedges and other supplemental interest rate hedges. For additional information regarding the Company's U.S. Treasury hedges, please refer to the schedule of Key Statistics included in this release.
A reconciliation of the Company's total comprehensive income (loss) to net spread and dollar roll income and additional information regarding the Company's use of non-GAAP measures are included later in this release.
LEVERAGEAs of June 30, 2025, $66.0 billion of repurchase agreements, $8.2 billion of net TBA dollar roll positions (at cost) and $0.1 billion of other debt were used to fund the Company's investment portfolio. The remainder, or approximately $3.2 billion, of the Company's repurchase agreements was used to fund short-term purchases of U.S. Treasury securities ("U.S. Treasury Repo") and is not included in the Company's leverage measurements. Inclusive of its TBA position and net payable/(receivable) for unsettled investment securities, the Company's tangible net book value "at risk" leverage ratio was 7.6x as of June 30, 2025, compared to 7.5x as of March 31, 2025. The Company's average "at risk" leverage ratio for the second quarter was 7.5x tangible net book value, compared to 7.3x for the prior quarter.
As of June 30, 2025, the Company's repurchase agreements used to fund its investment portfolio ("Investment Securities Repo") had a weighted average interest rate of 4.49%, compared to 4.47% as of March 31, 2025, and a weighted average remaining maturity of 16 days, compared to 19 days as of March 31, 2025. As of June 30, 2025, $34.7 billion, or 53%, of the Company's Investment Securities Repo was funded through the Company's captive broker-dealer subsidiary, Bethesda Securities, LLC.
HEDGING ACTIVITIES As of June 30, 2025, interest rate swaps, U.S. Treasury positions, swaptions and other interest rate hedges equaled 89% of the Company's outstanding balance of Investment Securities Repo, TBA position and other debt, compared to 91% as of March 31, 2025.
As of June 30, 2025, the Company's pay fixed interest rate swap position totaled $45.1 billion in notional amount, had an average fixed pay rate of 2.10%, an average floating receive rate of 4.44% and an average maturity of 5.0 years, compared to $47.8 billion, 1.91%, 4.40% and 5.0 years, respectively, as of March 31, 2025.
As of June 30, 2025, the Company had a net short U.S. Treasury position of $20.0 billion, net payer swaptions totaling $1.9 billion and a two-year swap equivalent long SOFR futures position of $1.2 billion outstanding, compared to $15.7 billion, $1.9 billion and $1.2 billion, respectively, as of March 31, 2025.
OTHER GAIN (LOSS), NETFor the second quarter, the Company recorded a net loss of $(274) million in other gain (loss), net, or $(0.27) per common share, compared to a net loss of $(81) million, or $(0.09) per common share, for the prior quarter. Other gain (loss), net for the second quarter was comprised of:
$(177) million of net realized losses on sales of investment securities;
$270 million of net unrealized gains on investment securities measured at fair value through net income;
$282 million of interest rate swap periodic income;
$(518) million of net losses on interest rate swaps;
$(9) million of net losses on interest rate swaptions;
$3 million of net gains on SOFR futures;
$(135) million of net losses on U.S. Treasury positions;
$24 million of TBA dollar roll income;
$(13) million of net mark-to-market losses on TBA securities;
$(3) million of other interest income (expense), net; and
$2 million of other miscellaneous gains.
OTHER COMPREHENSIVE INCOMEDuring the second quarter, the Company recorded other comprehensive income of $48 million, or $0.05 per common share, consisting of net unrealized gains on the Company's Agency securities recognized through OCI, compared to $93 million, or $0.10 per common share, of other comprehensive income for the prior quarter.
COMMON STOCK DIVIDENDSDuring the second quarter, the Company declared dividends of $0.12 per share to common stockholders of record as of April 30, May 30, and June 30, 2025, totaling $0.36 per share for the quarter. Since its May 2008 initial public offering through the second quarter of 2025, the Company has declared a total of $14.7 billion in common stock dividends, or $49.36 per common share.
FINANCIAL STATEMENTS, OPERATING PERFORMANCE AND PORTFOLIO STATISTICSThe following measures of operating performance include net spread and dollar roll income; economic interest income; economic interest expense; and the related per common share measures and financial metrics derived from such information, which are non-GAAP financial measures. Please refer to "Use of Non-GAAP Financial Information" later in this release for further discussion of non-GAAP measures.
AGNC INVESTMENT CORP.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share data)
June 30,2025
March 31,2025
December 31,2024
September 30,2024
June 30,2024
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Assets:
Agency securities, at fair value (including pledged securities of $67,375, $63,275, $59,952, $62,331 and $54,999, respectively)
$ 73,232
$ 70,363
$ 65,367
$ 67,938
$ 59,586
Agency securities transferred to consolidated variable interest entities, at fair value (pledged securities)
91
95
97
106
106
Credit risk transfer securities, at fair value (including pledged securities of $558, $595, $590, $588 and $647, respectively)
613
640
633
620
683
Non-Agency securities, at fair value, and other mortgage credit investments (including pledged securities of $30, $173, $206, $224 and $213, respectively)
109
290
315
334
317
U.S. Treasury securities, at fair value (including pledged securities of $3,554, $3,268, $1,565, $2,527 and $2,319, respectively)
3,565
3,280
1,575
2,570
2,441
Cash and cash equivalents
656
455
505
507
530
Restricted cash
1,216
1,263
1,266
1,279
1,376
Derivative assets, at fair value
155
98
205
157
131
Receivable for investment securities sold (including pledged securities of $0, $908, $0, $1,612 and $0, respectively)
—
909
—
1,706
—
Receivable under reverse repurchase agreements
21,362
17,604
17,137
13,494
13,662
Goodwill
526
526
526
526
526
Other assets
496
366
389
353
327
Total assets
$ 102,021
$ 95,889
$ 88,015
$ 89,590
$ 79,685
Liabilities:
Repurchase agreements
$ 69,153
$ 66,138
$ 60,798
$ 65,979
$ 56,947
Debt of consolidated variable interest entities, at fair value
60
62
64
69
71
Payable for investment securities purchased
392
1,843
74
324
208
Derivative liabilities, at fair value
106
70
94
53
64
Dividends payable
164
148
143
134
125
Obligation to return securities borrowed under reverse repurchase agreements, at fair value
21,305
17,180
16,676
13,009
13,248
Accounts payable and other liabilities
494
406
404
366
370
Total liabilities
91,674
85,847
78,253
79,934
71,033
Stockholders' equity:
Preferred Stock - aggregate liquidation preference of $1,688
1,634
1,634
1,634
1,634
1,634
Common stock - $0.01 par value; 1,041.7, 949.0, 897.4, 844.2 and 766.1 shares issued and outstanding, respectively
10
9
9
8
8
Additional paid-in capital
18,575
17,769
17,264
16,746
15,960
Retained deficit
(9,422)
(8,872)
(8,554)
(8,320)
(8,338)
Accumulated other comprehensive loss
(450)
(498)
(591)
(412)
(612)
Total stockholders' equity
10,347
10,042
9,762
9,656
8,652
Total liabilities and stockholders' equity
$ 102,021
$ 95,889
$ 88,015
$ 89,590
$ 79,685
Tangible net book value per common share 1
$ 7.81
$ 8.25
$ 8.41
$ 8.82
$ 8.40
AGNC INVESTMENT CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
(unaudited)
Three Months Ended
June 30,2025
March 31,2025
December 31,2024
September 30,2024
June 30,2024
Interest income:
Interest income
$ 830
$ 846
$ 856
$ 756
$ 695
Interest expense
668
687
741
820
698
Net interest income (expense)
162
159
115
(64)
(3)
Other gain ...
