PART I. FINANCIAL INFORMATION Item 1. Financial Statements The unaudited consolidated financial statements for AGNC Investment Corp. as of June 30, 2025, and for the three and six-month periods then ended, detail the company's financial position and performance Consolidated Balance Sheets The Consolidated Balance Sheets reflect an increase in total assets, liabilities, and stockholders' equity as of June 30, 2025, driven by growth in Agency securities and repurchase agreements Consolidated Balance Sheet Summary (in millions) | Account | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $102,021 | $88,015 | | Agency securities, at fair value | $73,232 | $65,367 | | Receivable under reverse repurchase agreements | $21,362 | $17,137 | | Total Liabilities | $91,674 | $78,253 | | Repurchase agreements | $69,153 | $60,798 | | Obligation to return securities borrowed | $21,305 | $16,676 | | Total Stockholders' Equity | $10,347 | $9,762 | Consolidated Statements of Comprehensive Income The Consolidated Statements of Comprehensive Income show a net loss for both the three and six months ended June 30, 2025, primarily due to significant net losses on derivative instruments Statement of Comprehensive Income Summary (in millions, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income (Expense) | $162 | $(3) | $321 | $(33) | | Total Other Gain (Loss), Net | $(274) | $(21) | $(355) | $476 | | Net Income (Loss) | $(140) | $(48) | $(90) | $395 | | Comprehensive Income (Loss) | $(92) | $(66) | $51 | $300 | | Net Income (Loss) per Common Share - Diluted | $(0.17) | $(0.11) | $(0.17) | $0.46 | | Dividends Declared per Common Share | $0.36 | $0.36 | $0.72 | $0.72 | Notes to Consolidated Financial Statements The notes provide detailed disclosures on the company's organization, significant accounting policies, and specifics on financial statement line items - The company invests primarily in Agency residential mortgage-backed securities (Agency RMBS) with principal and interest guaranteed by a U.S. GSE or Government agency, funding these investments mainly through collateralized borrowings structured as repurchase agreements21 - AGNC operates as a real estate investment trust (REIT), requiring it to distribute at least 90% of its taxable income to stockholders annually to generally avoid corporate income tax22 - The company uses a variety of derivative instruments to hedge market risks, including interest rate swaps, swaptions, U.S. Treasury securities, and TBA securities, with changes in fair value reported in earnings as these are not designated as accounting hedges3839 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial performance and condition, highlighting significant market volatility during Q2 2025 which led to underperformance of Agency RMBS and a negative economic return Executive Overview In Q2 2025, significant market volatility led to Agency RMBS underperformance, resulting in a -1.0% economic loss on tangible common equity for AGNC Q2 2025 Performance Summary | Metric | Value | | :--- | :--- | | Economic Return on Tangible Common Equity | -1.0% | | Comprehensive Loss per Diluted Common Share | $(0.13) | | Dividends Declared per Common Share | $0.36 | | Decrease in Tangible Net Book Value per Share | $(0.44) | - The company raised $799 million of accretive capital through its At-the-Market (ATM) offering program during the second quarter130 - Tangible 'at risk' leverage was 7.6x at quarter-end, and the company maintained a strong liquidity position of $6.4 billion in unencumbered cash and Agency RMBS, representing 65% of tangible equity130 Financial Condition AGNC's total investment portfolio grew to $82.3 billion as of June 30, 2025, primarily concentrated in fixed-rate Agency RMBS and TBA securities Investment Portfolio Composition (in billions) | Investment Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Agency RMBS | $73.3 | $65.5 | | Net TBA securities | $8.3 | $6.9 | | CRT, non-Agency RMBS & CMBS | $0.7 | $0.9 | | Other mortgage credit investments | $0.1 | $0.1 | | Total Investment Portfolio | $82.3 | $73.3 | Results of Operations This section provides a detailed analysis of operating results, heavily utilizing non-GAAP measures to explain performance Net Spread and Dollar Roll Income per Share (Non-GAAP) | Period | Per Common Share - Diluted | | :--- | :--- | | Q2 2025 | $0.38 | | Q2 2024 | $0.53 | | H1 2025 | $0.81 | | H1 2024 | $1.11 | Net Interest Spread (Non-GAAP) | Period | Average Net Interest Spread | | :--- | :--- | | Q2 2025 | 2.01% | | Q2 2024 | 2.69% | | H1 2025 | 2.07% | | H1 2024 | 2.83% | - Tangible net book value 'at risk' leverage ended Q2 2025 at 7.6:1, up slightly from 7.5:1 at the end of Q1 2025 and 7.2:1 at year-end 2024169 Liquidity and Capital Resources Management asserts that the company has sufficient liquidity and capital, with primary sources being unencumbered assets, repurchase agreements, and TBA dollar roll financing - As of June 30, 2025, unencumbered assets totaled approximately $6.5 billion, consisting of $6.4 billion in cash and unencumbered Agency RMBS and $0.1 billion in unencumbered credit assets, representing 66% of tangible equity206 - Total mortgage borrowings stood at $74.2 billion as of June 30, 2025, with 89% from repurchase agreements and other debt, and 11% from TBA and forward settling securities193 - The weighted average haircut and initial margin on repurchase agreements was approximately 3.0% as of June 30, 2025, down from 3.2% at year-end 2024205 Quantitative and Qualitative Disclosures About Market Risk This section details the primary market risks AGNC is exposed to, including interest rate, prepayment, spread, liquidity, and credit risks Interest Rate Sensitivity on Tangible Net Book Value Per Common Share (as of June 30, 2025) | Change in Interest Rate | Estimated Change in Tangible Net Book Value Per Common Share | | :--- | :--- | | -75 Basis Points | -3.1% | | -50 Basis Points | -0.7% | | +25 Basis Points | -1.2% | | +50 Basis Points | -3.2% | | +75 Basis Points | -6.5% | MBS Spread Sensitivity on Tangible Net Book Value Per Common Share (as of June 30, 2025) | Change in MBS Spread | Estimated Change in Tangible Net Book Value Per Common Share | | :--- | :--- | | -50 Basis Points | +26.1% | | -25 Basis Points | +13.1% | | +10 Basis Points | -5.2% | | +25 Basis Points | -13.1% | | +50 Basis Points | -26.1% | - The company's estimated duration gap, a measure of the difference in interest rate sensitivity between its assets and liabilities (including hedges), was 0.2 years as of June 30, 2025223 Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of June 30, 2025, and concluded that they were effective - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025245 - No material changes to the internal control over financial reporting occurred during the last fiscal quarter246 PART II. OTHER INFORMATION Legal Proceedings The company reports that it is not currently subject to any material litigation, nor is any material litigation threatened against it, other than routine proceedings arising in the ordinary course of business - AGNC is not subject to any material litigation as of the reporting date248 Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to risk factors were reported for the quarter249 Other Information This section discloses that on May 15, 2025, Peter Federico, the company's President, CEO, and CIO, adopted a Rule 10b5-1 trading arrangement for the potential sale of up to 137,393 shares of common stock, set to expire on November 26, 2025 - On May 15, 2025, CEO Peter Federico adopted a Rule 10b5-1 trading plan for the sale of up to 137,393 shares of common stock, expiring November 26, 2025253 Exhibits This section provides an index of the exhibits filed with the Form 10-Q, including corporate governance documents, instruments defining the rights of security holders, and certifications by the CEO and CFO as required by the Sarbanes-Oxley Act - The exhibit list includes the company's Code of Ethics and Conduct, adopted July 17, 2025, and certifications from the CEO and CFO pursuant to Sections 302(a) and 906 of the Sarbanes-Oxley Act254256
AGNC INVT(AGNCL) - 2025 Q2 - Quarterly Report