From The Motley Fool · Matt DiLallo · · 1m
AGNC Investment Corp Earnings Report Analysis
AGNC Investment Corp's earnings report shows mixed results: negative returns but strong capital raise opportunities.
In brief
AGNC Investment Corp's earnings report shows mixed results: negative returns but strong capital raise opportunities. AGNC Investment Corp reported a negative 12.7% economic return but raised $992 million in equity capital at a premium to book value. Originally reported by The Motley Fool.
Third Quarter Results
AGNC Investment Corp reported a negative 12.7% economic return during the third quarter.
“Fixed income markets experienced significant pressure in the third quarter, particularly in the final weeks of September, as fixed income investor sentiment turned decidedly bearish, interest rates increased sharply, and interest rate volatility spiked”
Declining Spread Income
Net spread income declined from $0.40 per share to $0.37 per share for the third quarter.
Tangible Net Book Value Drop
Tangible net book value per share tumbled 16.9% to $7.13.
Leverage Ratio Increase
Leverage ratio increased from 7.4x to 7.9x, exceeding its target range of 7.0x to 7.5x.
Capital Raise Opportunity
AGNC raised $992 million in equity capital at a premium to tangible net book value.
Agency MBS Outlook
Agency MBS returns are more attractive at current valuation levels with mortgage spreads approaching upper end of trading range.
The headline
AGNC Investment Corp reported a negative 12.7% economic return but raised $992 million in equity capital at a premium to book value.
