AGNC — AGNC Investment Corp.

AGNC Investment Corp. Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• AGNC reported a comprehensive loss of $0.18 per common share for Q1 2026.
• Economic return on tangible common equity was negative 1.6%, driven by a $0.50 decrease in tangible net book value per share, despite $0.36 in dividends declared.
• As of late April, tangible net book value per common share increased by approximately 6% for the month.
• Leverage at the end of Q1 was 7.4x tangible equity, slightly up from 7.2x in Q4 2025.
• Significant liquidity position of $7 billion in unencumbered cash and Agency MBS, representing 60% of tangible equity.
• Net spread and dollar roll income rose to $0.42 per common share, up $0.07 from the previous quarter.

2. Strategic Updates and Business Highlights:

• Agency MBS performance was influenced by divergent themes: strong performance in January and February due to government actions, followed by volatility in March due to geopolitical tensions.
• AGNC's portfolio totaled $95 billion, with purchases of $1.7 billion in predominantly low coupon specified pools.
• The weighted average coupon on the portfolio decreased to 4.95% from 5.12% in Q4 2025.
• Increased focus on lower coupon MBS due to heightened demand from money managers.
• Active capital management strategy continued with $401 million raised through an at-the-market offering at a premium to book value.

3. Forward Guidance and Outlook:

• The outlook for Agency MBS is cautiously optimistic, with expectations of improved performance if geopolitical tensions ease and monetary policy becomes more accommodative.
• AGNC believes current spread levels present compelling value, with potential returns estimated between 15% to 17%.
• The demand outlook for Agency MBS improved, with expectations for lower supply due to rising mortgage rates.

4. Bad News, Challenges, or Points of Concern:

• The economic return was negative due to wider mortgage spreads, reflecting increased interest rate volatility and geopolitical uncertainty.
• The potential for further volatility remains a concern, particularly with ongoing geopolitical tensions in the Middle East.
• The company noted that bond fund inflows have slowed in Q2 2026 compared to the previous two years, which could impact future performance.

5. Notable Q&A Insights:

• Management indicated that while the hedge ratio has increased slightly, it remains lower than historical levels, reflecting a cautious approach amid uncertainty.
• The GSEs' opportunistic buying strategy is expected to stabilize mortgage spreads and could provide a supportive environment for AGNC to capitalize on.
• There was discussion about the timing of equity raises, with management noting that the recent capital issuance was beneficial in a volatile environment and accretive to existing shareholders.
• The company remains focused on managing prepayment risks while capitalizing on favorable TBA financing conditions, allowing for flexibility in portfolio management.

Overall, AGNC's Q1 2026 results reflect a mix of challenges due to market volatility and geopolitical risks, but also highlight strategic positioning and a favorable outlook for Agency MBS under certain conditions.