AGNC Investment Q3 swings to net loss on Agency MBS market weakness
AGNC•AGNC Investment swung to a $1.36 billion net loss in Q3 as Agency MBS weakness weighed on results; tangible net book value per share fell 17%.
1. Quarterly results
AGNC Investment reported a $1.36 billion Q3 net loss, or $1.17 per share, and net interest income of $402 million. Tangible net book value per share fell 17%.
2. Market and spread pressure
The company said rising interest rates and increased volatility led to pronounced weakness in Agency MBS, while its annualized net interest spread fell to 1.86% from 2.00% in the prior quarter, reflecting higher funding costs and lower asset yields.
3. Outlook and share issuance
AGNC expects Agency MBS performance to improve if Treasury market volatility subsides. It said spreads are near multi-year highs and supply-demand technicals remain balanced as mortgage originations stay low. The company issued $992 million in common stock through ATM offerings after its inclusion in the S&P MidCap 400 Index.
