AGNC(US:AGNC)2025-10-31 20:05Financial Performance - AGNC generated total comprehensive income of $0.78 per diluted common share and an economic return of 10.6% on tangible common equity for Q3 2025[134]. - Net income available to common stockholders for the three months ended September 30, 2025, was $764 million, compared to $313 million for the same period in 2024, reflecting a significant increase of 143.5%[170]. - Economic interest income for the three months ended September 30, 2025, was $1,052 million, up from $819 million in the same period of 2024, marking a rise of 28.4%[177]. - Comprehensive income available to common stockholders for Q3 2025 was $825 million, compared to $513 million in Q3 2024[199]. - Economic interest income, excluding "catch-up" premium amortization, was $233 million for the three months ended September 30, 2025, up from $203 million, representing a 15% increase[182]. Investment Portfolio - The investment portfolio totaled $90.8 billion as of September 30, 2025, an increase of $8.5 billion from the prior quarter[136]. - As of September 30, 2025, the company's investment portfolio totaled $90.8 billion, up from $73.3 billion as of December 31, 2024[152]. - The fair value of Agency RMBS increased to $76.3 billion as of September 30, 2025, compared to $65.5 billion at the end of 2024[152]. - The total fixed rate Agency RMBS and TBA securities amounted to $87.124 billion as of September 30, 2025, compared to $70.910 billion at the end of 2024[152]. - The average investment portfolio increased by 23% for both the three and nine months ended September 30, 2025, compared to the prior year period[182]. Leverage and Liquidity - Tangible "at risk" leverage remained at 7.6x, with a liquidity position of $7.2 billion, representing 66% of tangible equity[138]. - The tangible net book value "at risk" leverage ratio as of September 30, 2025, was 7.6:1, consistent with the previous quarter[184]. - The company expects leverage to remain between six and twelve times the amount of tangible stockholders' equity[207]. - Unencumbered assets totaled approximately $7.3 billion as of September 30, 2025, representing 66% of tangible equity, compared to $6.2 billion or 67% of tangible equity as of December 31, 2024[221]. - The maximum amount at risk with any repurchase agreement counterparties was less than 2% of tangible stockholders' equity as of September 30, 2025[224]. Interest Rates and Spreads - The average interest rate on mortgage borrowings decreased by 98 basis points for the three months ended September 30, 2025, due to lower short-term interest rates[194]. - The average net interest spread for Q3 2025 was 1.78%, down from 2.21% in Q3 2024[198]. - The average asset yield for Q3 2025 was 4.95%, up from 4.73% in Q3 2024[198]. - The average aggregate cost of funds for Q3 2025 was (3.17)%, compared to (2.52)% in Q3 2024[198]. - The interest rate hedge ratio declined to 77% of total funding liabilities as of September 30, 2025, compared to 86% as of June 30, 2025[143]. Asset Management and Risk - AGNC's disciplined approach to asset selection and risk management positions it well to generate favorable risk-adjusted returns in a volatile market[133]. - The company actively manages counterparty risk by monitoring collateral positions and limiting counterparties to registered clearinghouses and regulated financial institutions[223]. - The company aims to maintain excess liquidity by holding unencumbered liquid assets to satisfy collateral requirements[221]. - The company does not maintain relationships with unconsolidated entities or financial partnerships for off-balance sheet arrangements as of September 30, 2025[227]. - The company has authorized a stock repurchase plan with an aggregate repurchase price of $1.0 billion remaining through December 31, 2026[226]. Market Conditions - The expected net new issuance of Agency RMBS in 2025 is approximately $200 billion, towards the lower end of initial expectations[130]. - The Fed's recent monetary policy shift is expected to support the relative outperformance of Agency RMBS[128]. - The vitality of the Agency RMBS and TBA markets allows the company to generate liquidity through asset sales under most conditions[225]. - The average one-year CPR forecast for Agency RMBS indicates a stable prepayment activity outlook[218]. - The credit spread for CRT M2 was 151 basis points as of September 30, 2025, a decrease of 4 basis points from the previous quarter[152].