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AGNC InvestmentsNASDAQ:AGNC) Q1 earnings beat the average analyst estimate even with the challengingGeopolitical risk and growing inflation concerns have a negative impact on investment environments. Expected tighter monetary policies.
President and CEO Peter Federico stated that “major monetary policy transitions can be always difficult for fixed income market,” particularly Agency mortgage-backed securities (“MBS”) He said that the company is now set up to increase returns on new investments.
Federico stated, “Following the substantial repricing in Agency MBS over these two quarters we now believe that levered returns on many segments the Agency MBS Market are attractive on both an absolute or relative basis and adequately compensation investors for the risks associated the current environment.”
The tangible net book value per common shares fell to $13.12 at March 31, 2021 from $15.75 at December 31, 2021. AGNC’s (AGNC’s) economic return on tangible equity in the quarter was -14.4%, compared to -1.8% for Q4 2021.
Q1 net spread, dollar roll income per shares of $0.72 beats the consensus estimate of $0.64. This compares with $0.75 in quarter précédent. The $0.30 per share estimated “catch up” premium amortization cost due change in projected constant payment rate (“CPR”) estimates is not included in the figure. It also includes $0.29 per share of common dollar roll income as a result of the company’s $23.6B net long position in agency-backed securities in “to-be announced” market.
The annualized net interest spread for the company, including the TBA situation and interest rate swaps but excluding “catchup” premium amortization, was 2.19% in Q1. This is an increase of 2.15% from the previous quarter.
Cash and unencumbered agency MBS totaled $3.5B on March 31, 2022, compared with $4.9B on Dec. 31, 2021.
AGNC’s average CPR for investment portfolios was 14.5% in Q1 and 18.6% in Q4.
The weighted average predicted CPR for the remaining term of the company’s agency securities as of March 31, 2020 was 7.9%, compared to 10.9% as of December 31, 2021.
ConferenceCallOn May 3, at 8:30 AM ET
AGNC Investment (AGNC), non-GAAP earnings of $0.72 beats $0.08
