AGNC Investment Pref Share AGNC 6.5 Prep 10/15/24 E | 10-Q: FY2025 Q2 EPS: USD -0.17

EPS: As of FY2025 Q2, the actual value is USD -0.17.

Segment Revenue

• Agency RMBS: $73.3 billion as of June 30, 2025, up from $65.5 billion as of December 31, 2024.
• TBA Securities: $8.3 billion as of June 30, 2025, up from $6.9 billion as of December 31, 2024.
• CRT, Non-Agency RMBS, and CMBS: $0.7 billion as of June 30, 2025, down from $0.9 billion as of December 31, 2024.
• Other Mortgage Credit Investments: $66 million as of June 30, 2025, up from $64 million as of December 31, 2024.

Operational Metrics

• Net Income (Loss): - $140 million for the three months ended June 30, 2025, compared to - $48 million for the same period in 2024.
• Net Income (Loss) Available to Common Stockholders: - $178 million for the three months ended June 30, 2025, compared to - $80 million for the same period in 2024.
• Net Income (Loss) Per Common Share - Basic: - $0.17 for the three months ended June 30, 2025, compared to - $0.11 for the same period in 2024.
• Net Income (Loss) Per Common Share - Diluted: - $0.17 for the three months ended June 30, 2025, compared to - $0.11 for the same period in 2024.

Cash Flow

• Net Cash Provided by Operating Activities: $372 million for the six months ended June 30, 2025, compared to $0 for the same period in 2024.
• Net Cash Used in Investing Activities: - $9,171 million for the six months ended June 30, 2025, compared to - $6,479 million for the same period in 2024.
• Net Cash Provided by Financing Activities: $8,900 million for the six months ended June 30, 2025, compared to $6,614 million for the same period in 2024.

Unique Metrics

• Weighted Average Yield on Investment Securities: 4.92% as of June 30, 2025, up from 4.77% as of December 31, 2024.
• Average Projected Life CPR: 7.8% as of June 30, 2025, down from 8.3% as of March 31, 2025.
• Actual CPRs: 8.7% for the quarter ended June 30, 2025, up from 7.0% for the first quarter of 2025.

Future Outlook and Strategy

Core Business Focus

• Capital Deployment: Raised $799 million of accretive capital through the At-the-Market offering program during the second quarter of 2025, with slightly less than half deployed into higher-coupon specified pools with favorable prepayment attributes.
• Leverage: Tangible ‘at risk’ leverage of 7.6x as of June 30, 2025, compared to 7.5x as of March 31, 2025.
• Liquidity: Substantial liquidity position of $6.4 billion in unencumbered cash and Agency RMBS, representing 65% of tangible equity, up from 63% as of the first quarter of 2025.

Non-Core Business

• Hedge Performance: Longer-dated Treasury-based hedges outperformed shorter-term swap-based hedges amid the steepening yield curve.
• Interest Rate Hedges: Interest rate hedges equaled 89% of the outstanding balance of repurchase agreements used to fund the investment portfolio, TBA position, and other debt as of June 30, 2025, compared to 91% as of March 31, 2025.
• Duration Gap: 0.2 years at quarter-end, compared to 0.4 years as of March 31, 2025.

Priority

• Net Spread and Dollar Roll Income: Decreased by $0.06 to $0.38 per common share for the second quarter of 2025, primarily due to the timing of capital deployment and moderately higher swap costs.

Outlook

• Agency RMBS Performance: Anticipated bank regulatory reforms expected to drive increased bank demand, improved supply dynamics, and persistently high mortgage rates expected to temper prepayment activity.
• Government Commitment: Statements from key policymakers reaffirming the government’s commitment to preserving the credit quality of Agency RMBS and maintaining stability in the mortgage market amid potential GSE reform.
• Constructive Backdrop: Stabilizing spreads at historically wide levels, manageable supply, anticipated regulatory reforms, and reduced risk of adverse consequences of GSE reform provide a highly constructive backdrop for Agency RMBS as a fixed income asset class.