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AGNC Nasdaq· AGNC Investment
Earnings report Q4 2023

AGNC's Performance Affected by Rising Repo Funding Costs and Declining TBA Dollar Roll Income

Segments of Revenue

The main source of revenue for AGNC is its investment in Agency RMBS. The company's net spread and dollar roll income, a non-GAAP measure, totaled $2.61 per diluted common share for the fiscal year 2023, compared to $3.11 for 2022.

Strengths

AGNC's performance was primarily driven by changes in Agency RMBS spreads to benchmark interest rates and interest rate volatility. Higher asset yields and the company's pay-fixed/receive-variable interest rate swap portfolio largely offset the rising repo funding costs and declining TBA dollar roll income during the year.

Challenges

The company faced challenges in the form of rising repo funding costs and declining TBA dollar roll income. These factors have led to a decrease in the net spread and dollar roll income per diluted common share from $3.11 in 2022 to $2.61 in 2023.

Noteworthy

Despite the challenges, the company's total economic return on tangible common equity was 3.0% for 2023, which is a significant improvement from a loss of 28.4% in 2022.

Summary

AGNC's performance in 2023 was marked by a decrease in net spread and dollar roll income per diluted common share, primarily due to rising repo funding costs and declining TBA dollar roll income. However, the company managed to offset these challenges to some extent through higher asset yields and its pay-fixed/receive-variable interest rate swap portfolio. The company's total economic return on tangible common equity improved significantly from the previous year, indicating a positive trend despite the challenges.

Source documents

Form 10-K  filed on Feb 22, 2024
69 pages scanned

Reference data

Company financials Q4 revenue 440M
Analyst estimates Q4 EPS missed by -4.43%
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