Q4 2025 AGNC Investment Corp Earnings Call Transcript
Key Points
- AGNC Investment Corp (AGNC) achieved an impressive full-year economic return of 22.7% in 2025, with a notable 11.6% return in the fourth quarter.
- The company's total stock return in 2025 was 34.8%, significantly outperforming the S&P 500.
- AGNC's portfolio of agency mortgage-backed securities benefited from a favorable investment environment, driven by the Fed's shift towards lower short-term rates and reduced interest rate volatility.
- The company maintained a strong liquidity position with $7.6 billion in cash and unencumbered agency MBS, representing 64% of tangible equity.
- AGNC's strategic use of interest rate swaps in its hedge portfolio positions it to benefit from anticipated future rate cuts, enhancing net spread and dollar roll income.
- AGNC's leverage decreased to 7.2 times tangible equity by the end of the fourth quarter, down from 7.6 times in the previous quarter, indicating a more cautious approach.
- The company's net spread and dollar roll income remained unchanged for the quarter at $0.35 per common share, with a slight drag due to nonrecurring performance-related compensation.
- The average projected Life CPR of AGNC's portfolio increased to 9.6% from 8.6% in the prior quarter, reflecting lower mortgage rates and potential prepayment risks.
- AGNC's economic return on new capital is expected to be in the 13% to 15% range, which is closer to the breakeven ROE, potentially impacting future dividend coverage.
- The company faces potential risks from government actions that could negatively impact mortgage spreads, such as streamlined refinance or changes in G-fees.
(audio in progress) AGNC Investment Corp fourth-quarter 2025 shareholder call.
(Operator Instructions)
Please note this event is being recorded.
I would now like to turn the conference over to Katie Wisecarver in Investor Relations. Please go ahead.
Thank you all for joining AGNC Investment Corp's fourth-quarter 2025 earnings call.
Before we begin, I'd like to review the Safe Harbor statement.
This conference call and corresponding slide presentation contains statements that to the extent they are not recitations of historical fact, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All such forward-looking statements are intended to be subject to the safe harbor protection provided by the reform Act. Actual outcomes and results could differ materially from those forecasts due to the impact of many factors beyond the control of AGNC. All forward-looking statements included in
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