AGNC Investment Corp. reported its financial results for the first quarter of 2026, revealing a total comprehensive loss of $156 million, or $(0.18) per diluted common share. This marks a significant decline from the previous quarter, where the company recorded a comprehensive income of $143 million, or $0.89 per diluted common share. The company's net income available to common stockholders for the quarter was $(192 million), compared to a profit of $15 million in the same period last year. The decline in profitability was attributed to a combination of factors, including increased interest expenses and losses on investment securities.
The company's interest income for the quarter rose to $1.05 billion, up from $846 million in the prior year, primarily driven by a larger investment portfolio. However, interest expenses also increased to $731 million from $687 million, leading to a net interest income of $319 million, a decrease from $159 million in the previous year. The company's total assets increased to $118.9 billion as of March 31, 2026, compared to $115.1 billion at the end of 2025, largely due to an increase in agency securities, which rose to $84.4 billion from $81.0 billion.
AGNC's investment strategy has seen a shift, with the company rotating a portion of its portfolio towards lower coupon specified pools, resulting in a decrease in the weighted average coupon from 5.12% to 4.95%. The company also reported an increase in its average projected life constant prepayment rate (CPR) to 10.3% from 9.6% in the previous quarter. The leverage ratio, measured as "at risk" leverage, was reported at 7.4x tangible equity, slightly up from 7.2x at the end of 2025.
In terms of operational developments, AGNC's hedge ratio increased to 83% as of March 31, 2026, reflecting a greater allocation to interest rate swaps in its hedge portfolio. The notional balance of interest rate swaps rose to $76.5 billion, representing 89% of total funding liabilities. The company continues to manage its liquidity and capital resources effectively, maintaining $7.0 billion in unencumbered cash and Agency RMBS, which represents 60% of tangible equity.
Looking ahead, AGNC remains cautiously optimistic about the Agency RMBS market, despite the challenges posed by geopolitical tensions and rising interest rates. The company believes that the underlying fundamentals for Agency RMBS remain strong, with potential for improved performance as market conditions stabilize. AGNC plans to continue its active management strategy, adjusting its portfolio in response to evolving market dynamics to enhance shareholder value.
About AGNC Investment Corp.
AGNC Investment Corp. is a leading provider of private capital to the U.S. housing market, primarily investing in Agency residential mortgage-backed securities (RMBS). With a focus on enhancing liquidity in the mortgage market, AGNC targets homeowners and investors. The company employs an active management strategy to optimize returns while maintaining REIT status. AGNC aims to distribute 100% of its taxable income, ensuring attractive yields for stockholders.
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