AGNC Book Value per Share Falls 16.9% in Third Quarter
Key Facts
AGNC Investment reported a 16.9% decline in tangible book value per share during the third quarter of 2026, reversing growth in the previous quarter. According to the company's earnings release, tangible book value per share stood at $7.13 at the end of September, compared with $8.58 at the end of June. The company posted a net loss of $1.17 per common share during the quarter alongside the decline in book value. Comprehensive loss per common share was $1.28, according to the same earnings disclosure. Economic return on tangible common equity, which includes dividends and changes in tangible book value, was negative 12.7%.
On income, net spread and dollar roll income was $0.37 per common share during the third quarter, according to the company. The company presents this income as a non-GAAP measure in its quarterly results. The same measure stood at $0.40 per share in the second quarter, according to the previous period's earnings disclosure. Its decline coincided with a drop in the annualized net interest margin to 1.86%, compared with 2.00% in the previous quarter. The chief executive attributed pressure in fixed-income markets to interest rate movements, saying in the earnings release that "interest rates rose sharply."
The company's shareholder presentation showed that its aggregate cost of funds rose to 3.09% during the third quarter, compared with 2.89% in the previous quarter. This cost includes dollar roll financing and interest rate swaps, according to the definition in the presentation. The average cost of repurchase agreements during the quarter was 3.77%, compared with 3.74% in the previous quarter. In managing funding risk, the hedging portfolio covered 90% of funding liabilities at quarter-end, according to the shareholder presentation. The notional value of the company's pay-fixed interest rate swaps stood at $74.6 billion at the end of the period.
The company's total investment portfolio stood at $94.4 billion at the end of the third quarter, according to the earnings release. The company invests in residential mortgage securities guaranteed against credit losses by Fannie Mae, Freddie Mac or Ginnie Mae, according to its October dividend announcement. At-risk leverage, calculated on the basis of tangible book value, stood at 7.9 times at quarter-end. The results followed a second quarter in which the company generated a positive economic return of 6.7% on tangible common equity. Tangible book value per share rose 2.4% in that quarter, according to the company's second-quarter earnings disclosure.
On liquidity and capital, cash and unencumbered agency mortgage securities totaled $6.3 billion at quarter-end. The company issued 97.6 million shares during the period through its at-the-market offering program, according to the quarterly earnings release. Net proceeds from those share issuances totaled $992 million during the third quarter. The company said the share issuances sought to capitalize on higher trading volumes and that the sales were made at a premium to tangible book value. Interest rate swaps were used to manage interest rate risk, while the share issuances were tied to an opportunity to raise capital through the market.
On dividends, the company declared total dividends of $0.36 per share during the third quarter, according to its earnings release. It maintained its October monthly dividend at $0.12 per share, according to the dividend announcement and the company's dividend history. The company invests in residential mortgage securities with guarantees against credit losses provided by the agencies named in its shareholder announcement. The company set October 30, 2026 as the record date for shareholders eligible for the October dividend. The dividend is scheduled for payment on November 10, 2026, according to the schedule published in its dividend history.