AGNCO — 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.
• Economic return on tangible common equity was negative 1.6%, driven by a $0.50 decrease in tangible net book value per share and $0.36 in dividends declared.
• As of late April, tangible net book value per share increased approximately 6% for the month, recovering much of the Q1 decline.
• Leverage at the end of Q1 was 7.4x tangible equity, up slightly from 7.2x in Q4 2025.
• Net spread and dollar roll income rose to $0.42 per common share, up $0.07 from the previous quarter, aided by a 25 basis point increase in net interest spread.

2. Strategic Updates and Business Highlights:

• Agency MBS performance was impacted by geopolitical events, particularly the war in Iran, which increased interest rate volatility and widened spreads.
• The company adjusted its portfolio, focusing on lower coupon specified pools, which outperformed higher coupon MBS due to increased demand from money managers.
• AGNC raised $401 million in common equity through an at-the-market offering, benefiting from trading at a premium to tangible net book value.
• The company emphasized the importance of maintaining a strong liquidity position, with $7 billion in unencumbered cash and Agency MBS.

3. Forward Guidance and Outlook:

• Despite challenges from geopolitical risks, AGNC maintains a favorable outlook for Agency MBS, citing improved return profiles and demand dynamics.
• The company anticipates that actions from the administration to enhance housing affordability could further benefit mortgage performance.
• AGNC expects net spread and dollar roll income to remain in the high 30s to low 40s cents per share over the near term, with a potential return on equity in the 15% to 17% range.

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

• The negative economic return in Q1 reflects the impact of wider mortgage spreads and increased volatility due to geopolitical tensions.
• Uncertainty around future Fed rate cuts and ongoing geopolitical risks pose challenges for the investment environment.
• Bond fund inflows have begun to slow, which could impact future performance and investment strategies.
• The company noted that the current hedge ratio remains low compared to historical levels, indicating potential exposure to interest rate fluctuations.

5. Notable Q&A Insights:

• Management indicated that the GSEs are expected to act opportunistically in the current environment, which could provide support for mortgage spreads.
• The company is focused on optimizing leverage in response to market conditions, aiming to balance returns with risk management.
• AGNC's strategy includes maintaining a positive duration gap for prepayment protection, while also leveraging improved TBA financing conditions.
• The management expressed confidence in their ability to navigate volatility and capitalize on favorable market conditions as they arise.