Core Viewpoint - AGNC Investment offers a high dividend yield of over 17%, significantly higher than the S&P 500's yield of less than 1.5%, indicating a strong investment opportunity despite market volatility [1]. Group 1: Company Overview - AGNC Investment is a real estate investment trust (REIT) that invests in mortgage-backed securities (MBS) backed by government agencies, making it a low-risk investment [2]. - The company employs leverage to enhance returns, which increases its risk profile, but it believes this strategy will not pose problems in the current market [3]. Group 2: Financial Position - As of the end of the first quarter, AGNC had a tangible 'at risk' leverage of 7.5x and $6 billion in unencumbered cash and Agency MBS, indicating a strong liquidity position compared to its $78.9 billion investment portfolio [3]. - The REIT's investment portfolio produced an economic return of 2.4% in the first quarter, while its stock delivered a total return of 7.8% to investors despite a declining stock market [5]. Group 3: Market Environment - Market volatility has increased following tariff announcements, leading to wider Agency MBS spreads, but this has also increased anticipated portfolio returns [6]. - The current environment is viewed as compelling for MBS investments, with the potential for high returns on both levered and unlevered bases [6]. Group 4: Investment Outlook - AGNC Investment is positioned to weather market instability and continue generating sufficient returns to maintain its high monthly dividend, providing investors with a meaningful income stream [7]. - The company's returns, rather than earnings, are the primary driver of its dividend policy, suggesting a focus on return generation in the current market [6].

Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on AGNC Investment (AGNC), and highlights the importance of using these recommendations in conjunction with other analytical tools like Zacks Rank for making informed investment decisions [1][5][10]. Brokerage Recommendations for AGNC - AGNC Investment has an average brokerage recommendation (ABR) of 1.93, indicating a consensus between Strong Buy and Buy, based on recommendations from 15 brokerage firms [2][14]. - Out of the 15 recommendations, seven are classified as Strong Buy and two as Buy, which represent 46.7% and 13.3% of the total recommendations, respectively [2]. Limitations of Brokerage Recommendations - Studies indicate that brokerage recommendations have limited success in guiding investors towards stocks with the highest price increase potential [5]. - Analysts from brokerage firms often exhibit a positive bias due to vested interests, leading to a disproportionate number of favorable ratings compared to negative ones [6][10]. Zacks Rank as an Alternative - Zacks Rank categorizes stocks into five groups based on earnings estimate revisions, providing a more reliable indicator of a stock's price performance in the near future [8][11]. - The Zacks Rank is updated more frequently than the ABR, reflecting timely changes in earnings estimates, which are strongly correlated with near-term stock price movements [12]. AGNC's Earnings Estimates - The Zacks Consensus Estimate for AGNC Investment has increased by 3.4% over the past month to $1.67, indicating growing optimism among analysts regarding the company's earnings prospects [13]. - This increase in consensus estimates, along with other factors, has resulted in a Zacks Rank of 2 (Buy) for AGNC Investment, suggesting a favorable outlook for the stock [14].

Group 1 - The article emphasizes a value investing approach, focusing on an owner's mindset and a long-term investment horizon [1] - The author does not engage in short selling or writing sell articles, indicating a preference for long-term investment strategies [1] - There is a clear separation between personal opinions and any potential business relationships with companies mentioned, ensuring unbiased analysis [2] Group 2 - The article does not provide specific investment recommendations or advice, highlighting the importance of individual investor suitability [3] - It clarifies that past performance is not indicative of future results, reinforcing the need for careful consideration in investment decisions [3]

Financial Data and Key Metrics Changes - AGNC reported total comprehensive income of $0.12 per common share for Q1 2025, with an economic return on tangible common equity of 2.4% [15] - The net interest rate spread increased by 21 basis points to 2.12%, driven by higher asset yields and lower funding costs [17] - Quarter-end leverage increased to 7.5 times tangible equity, up from 7.2 times at year-end [15][16] Business Line Data and Key Metrics Changes - Net spread and dollar roll income increased by $0.07 to $0.44 per common share, attributed to a higher net interest rate spread and a larger asset base [16] - The average projected life CPR in the portfolio increased to 8.3% from 7.7% at year-end, while actual CPRs averaged 7% for the quarter, down from 9.6% in the previous quarter [18] Market Data and Key Metrics Changes - The agency MBS market experienced significant pressure, with the current coupon spread to a blend of 5- and 10-year treasury rates widening to 160 basis points [10] - The asset portfolio totaled $79 billion at quarter-end, up about $5 billion from the prior quarter, with 77% of assets having favorable prepayment characteristics [21][22] Company Strategy and Development Direction - The company believes that agency MBS provide compelling return opportunities, especially in light of the deteriorating economic outlook [13] - Regulatory relief is expected to lead to greater demand for agency MBS from banks, which could benefit the treasury and swap markets [23] Management's Comments on Operating Environment and Future Outlook - Management noted that macroeconomic uncertainty is likely to remain elevated in the near term, but the outlook for agency MBS is favorable [14][23] - The management emphasized the importance of maintaining a strong liquidity position to navigate market volatility [45] Other Important Information - The company raised $509 million of common equity through its at-the-market offering program at a premium to tangible net book value, generating meaningful accretion for shareholders [16] - The weighted average coupon of the portfolio remained steady at just over 5% [22] Q&A Session Summary Question: Update on book value - Management indicated that the book value was down in the range of 7.5% to 8% as of the end of last week due to further mortgage spread widening [29] Question: Comfort level with the dividend - Management stated that the total cost of capital has increased, but expected returns still align well with that cost [36][39] Question: Managing extreme rate volatility - Management highlighted that a strong liquidity position allowed them to navigate the volatility without changing asset composition [44][46] Question: Outlook on leverage and hedge ratio - Management expressed comfort with current leverage levels and indicated that spreads at current levels allow for attractive returns without excessive leverage [52][54] Question: Changes to hedge portfolio - Management confirmed that there have not been any substantial changes to the hedge portfolio post-quarter end [100] Question: Prepayment environment and convexity risk - Management noted that the portfolio has more call risk than extension risk, with a significant portion having embedded prepayment protection [120][123] Question: Impact of levered investors on mortgage spreads - Management did not see any force deleveraging impacting the current repricing in the mortgage market, attributing it to bond fund redemptions instead [126][129]

Core Viewpoint - AGNC Investment Corp. reported a decline in net spread and dollar roll income per common share for Q1 2025, although it exceeded consensus estimates. The company faces challenges with lower tangible book value and net interest spread despite benefiting from increased asset yields [1][9]. Financial Performance - The net spread and dollar roll income per common share was 44 cents, surpassing the Zacks Consensus Estimate of 41 cents, but down from 58 cents in the same quarter last year [1]. - Comprehensive income per common share was 12 cents, a significant decrease from 48 cents in the prior year [2]. - Adjusted net interest and dollar roll income totaled $477 million, a 3.8% decline from the previous year [1]. - Net interest income was $159 million, missing the Zacks Consensus Estimate by 27.4%, with net interest expenses of $30 million [3]. - The average asset yield on the portfolio increased to 4.78% from 4.53% year-over-year [3]. Cost and Leverage - The combined weighted average cost of funds rose to 2.75% from 1.58% in the prior year [3]. - The average net interest spread decreased to 2.12%, down from 2.98% in the year-ago quarter [4]. - The average tangible net book value "at risk" leverage ratio was 7.3X, up from 7X year-over-year [4]. Investment Portfolio - As of March 31, 2025, the investment portfolio totaled $78.9 billion, including $70.5 billion in Agency mortgage-backed securities [6]. - The portfolio experienced an average actual constant prepayment rate of 7%, up from 5.7% in the previous year [4]. Book Value and Dividends - Tangible net book value per common share was $8.25, reflecting a 6.7% decline year-over-year [5]. - The economic return on tangible common equity was 2.4%, down from 5.7% in the prior year, including a dividend per share of 36 cents [5]. - The company declared a total dividend of 36 cents per share for the first quarter, with cumulative dividends of $14.3 billion since its IPO [8]. Market Position - AGNC Investment's first-quarter results were positively impacted by increased asset yields and portfolio repositioning, which help mitigate risks from higher interest rates and prepayments [9]. - The company currently holds a Zacks Rank 2 (Buy) [10].

STOCKHOLDER PRESENTATION Q1 | AGNC Common Stock | | | --- | --- | | Ticker | Nasdaq: AGNC | | IPO Date | May 2008 | | Market Capitalization | $9.1 B | | Total Dividends Paid Since IPO1 | $14.3 B | | Total Stock Return Since IPO2 | 427% | | Dividend Yield | 15.0% | APRIL 22, 2025 THE PREMIER AGENCY RESIDENTIAL MORTGAGE REIT © 2025 AGNC Investment Corp. All Rights Reserved. 2025 IMPORTANT NOTICES Safe harbor statement under the private securities litigation reform act of 1995 This presentation contains statem ...

Group 1 - The current market is experiencing high volatility, making it challenging to publish frequent updates and forecasts [1][3] - There are emerging bargains in the price-to-book ratio space, with prices fluctuating significantly compared to book values [3][5] - The spread between Treasury rates and MBS rates remains wide, which could benefit future book values but also introduces more volatility [3] Group 2 - Agency mortgage REITs typically have book values close to their fair market values, while non-agency mortgage REITs can have book values exceeding fair market values [4] - A previous warning about AGNC being overpriced was validated as shares declined over 20%, indicating a disconnect between book values and share prices [5] Group 3 - The uncertainty surrounding Federal Reserve leadership and interest rate predictions complicates investment strategies in Treasury ETFs [6] - Investors do not necessarily need to predict Treasury rates but should focus on the valuation of stocks within the sector to assess investment odds [6] Group 4 - Preferred shares are favored for their lower risk and better yield stability compared to common shares, although they still carry some risk [7][8] - The potential for multiple cuts to the Fed Funds rate could lower floating-rate dividends, making investment in this sector more challenging [8] Group 5 - The portfolio currently holds about 33.2% in cash, with expectations to reduce this ratio over time as more investments are made [14] - The focus is on lower-risk shares that can withstand economic downturns while still providing upside potential during recoveries [11][12] Group 6 - The article includes comparisons of various companies and their preferred shares or baby bonds, highlighting specific mortgage REITs and BDCs [15][19] - Detailed charts provide insights into preferred share prices and yields, indicating potential investment opportunities [25]

Financial Performance - Comprehensive income per common share for Q1 2025 was $0.12, consisting of $0.02 net income and $0.10 other comprehensive income[5] - Net income available to common stockholders decreased to $15 million in Q1 2025 from $86 million in Q4 2024, a decline of 82.6%[36] - Comprehensive income available to common stockholders was $108 million in Q1 2025, compared to a loss of $93 million in Q4 2024[36] - Economic return on tangible common equity for the quarter was 2.4%, driven by $0.36 dividends and a $0.16 decline in tangible net book value[5] - Economic return on tangible common equity was 2.4% for the three months ended March 31, 2025, compared to a loss of (0.6)% in the previous quarter[43] Dividends - Dividends declared per common share for the first quarter totaled $0.36[5] - Total dividends declared since the IPO in May 2008 reached $14.3 billion, or $49.00 per common share[30] - Dividends declared per common share remained stable at $0.36 for both Q1 2025 and Q4 2024[36] - AGNC Investment Corp. has paid over $14 billion in common stock dividends since its inception, indicating a strong commitment to returning value to shareholders[51] Assets and Liabilities - Total assets increased to $95,889 million as of March 31, 2025, up from $88,015 million at December 31, 2024, representing a growth of 3.2%[34] - Total liabilities rose to $85,847 million as of March 31, 2025, compared to $78,253 million at December 31, 2024, an increase of 9.8%[34] - The investment portfolio totaled $78.9 billion, with $70.5 billion in Agency MBS and $7.5 billion in net forward purchases/sales of Agency MBS[5] Income and Interest - Net interest income for Q1 2025 was $159 million, compared to $115 million in Q4 2024, reflecting a 38.3% increase[36] - Interest income for Q1 2025 was $846 million, slightly down from $856 million in Q4 2024[36] - The annualized net interest spread for Q1 was 2.12%, up from 1.91% in the previous quarter[19] - Average total cost of funds improved to 2.75% in Q1 2025, down from 2.89% in Q4 2024[41] - Average funding cost for repurchase agreements was 4.45% for the three months ended March 31, 2025, down from 4.86% in the prior quarter[43] Shareholder Equity - Tangible net book value per common share decreased by $0.16, or -1.9%, to $8.25 as of March 31, 2025[5] - Average stockholders' equity increased to $9.935 billion as of March 31, 2025, compared to $9.637 billion at December 31, 2024, reflecting a growth of 3.1%[43] - The tangible net book value per common share decreased to $8.25 in Q1 2025 from $8.41 in Q4 2024[34] Investment Performance - Net spread and dollar roll income increased to $0.44 per common share from $0.37 in the prior quarter[20] - Net spread and dollar roll income available to common stockholders increased to $403 million in Q1 2025 from $329 million in Q4 2024, representing a 22.5% growth[39] - Adjusted net interest and dollar roll income for Q1 2025 was $477 million, compared to $405 million in Q4 2024, reflecting a 17.8% increase[41] - Unrealized gain on investment securities measured at fair value through net income was $1,183 million in Q1 2025, compared to a loss of $1,895 million in Q4 2024[36] Market and Economic Conditions - Forward-looking statements indicate potential risks including changes in monetary policy and market conditions that could impact future performance[54] - The company utilizes dynamic risk management strategies to protect its portfolio from interest rate and market risks, enhancing its investment stability[50] - The company primarily invests in Agency residential mortgage-backed securities (Agency MBS), which are guaranteed against credit losses by government-sponsored entities[50] Other Information - Archived audio of the stockholder call will be available for a limited time, allowing stakeholders to review the discussions and insights shared[48] - The company emphasizes the importance of non-GAAP financial measures, such as net spread and dollar roll income, to provide greater transparency into its financial performance[55] - The average tangible net book value "at risk" leverage during the period was calculated by dividing the sum of daily weighted average Investment Securities Repo and other debt by the average stockholders' equity adjusted to exclude goodwill[52] - AGNC's business serves as a significant source of private capital for the U.S. residential housing market, reflecting its role in the broader economy[51] - The company plans to continue leveraging its expertise in managing mortgage assets across various market cycles to optimize returns[51]

Core Viewpoint - AGNC Investment Corp. reported a favorable economic return of 2.4% for Q1 2025, despite broader market declines, with a total stock return of 7.8% when dividends are reinvested [5][10]. Financial Highlights - The company declared dividends of $0.36 per common share for the first quarter [10][26]. - The tangible net book value per common share decreased by 1.9% to $8.25 from $8.41 at the end of Q4 2024 [7][10]. - The investment portfolio totaled $78.9 billion, primarily consisting of $70.5 billion in Agency MBS [8][10]. Economic Performance - The economic return on tangible common equity was composed of $0.36 in dividends and a $(0.16) decline in tangible net book value per common share [6][10]. - The net spread and dollar roll income increased to $0.44 per common share from $0.37 in the previous quarter [10][17]. Investment Portfolio - As of March 31, 2025, the weighted average coupon for fixed-rate Agency MBS and TBA securities was 5.03%, slightly up from 5.02% in the previous quarter [9][10]. - The company's investment portfolio included 96% in 30-year fixed-rate Agency MBS [8][10]. Leverage and Liquidity - The tangible 'at risk' leverage ratio was 7.5x as of March 31, 2025, with a liquidity position of $6.0 billion in unencumbered cash and Agency MBS [6][20][10]. - The average cost of funds for the first quarter was 2.75%, down from 2.89% in the prior quarter [15][31]. Market Conditions - Investor sentiment turned cautious due to potential governmental policy actions impacting economic growth and inflation, leading to a flight to high-quality assets [5][6]. - Following the April tariff announcement, financial market volatility increased, resulting in wider Agency MBS spreads [6][10].

Group 1 - The Conservative Income Portfolio targets high-value stocks with significant margins of safety and aims to reduce volatility through well-priced options [1][3] - The Enhanced Equity Income Solutions Portfolio is designed to generate yields of 7-9% while minimizing volatility [1][3] - Trapping Value provides Covered Calls and focuses on capital preservation, while the Fixed Income Portfolio emphasizes high income potential and undervalued securities [2][3] Group 2 - Trapping Value consists of a team with over 40 years of combined experience in generating options income and capital preservation [3] - The investing group operates the Conservative Income Portfolio in collaboration with Preferred Stock Trader, featuring two income-generating portfolios and a bond ladder [3]