AGNC Investment Corp. Q4 FY2024 earnings call

Favorable investment themes for agency mortgage-backed securities in 2024. Fed policy changes impact. 2025 outlook for agency MBS supply and demand balanced. AGNC's 2024 economic return. Fourth quarter tangible book value per share decline. Equity issuance in fourth quarter. Investment portfolio changes in fourth quarter, including adding agency MBS, adjusting coupon stack, TBA position details, non-agency securities portfolio change, and adding treasury-based hedges.

AGNC in 2024 had a positive economic return of 13.2%. For the fourth quarter, it had a comprehensive loss of $0.11 per common share, with economic return on tangible common equity negative 0.6%. Raised $511 million of common stock in the fourth quarter. Average and ending leverage was 7.2 times tangible equity. Unencumbered cash and agency MBS at quarter end was $6.1 billion or 66% of tangible equity. Net spread and dollar roll income declined by $0.06 to $0.37 per common share in the fourth quarter.

Outlook for agency mortgage-backed securities in 2025 is favorable. Expect agency spreads to remain in current attractive trading range. Current monetary policy provides positive foundation for high quality fixed income instruments. Supply and demand outlook for agency MBS is well balanced with upside demand possible.

Monetary and fiscal policy uncertainty. Interest rate volatility. Uncertainty regarding housing finance system policy changes.

Q: Bose George asked about potential magnitude of equity issuance this year and ROE math when funding with treasury futures versus swaps.

A: Peter Federico responded on equity issuance approach, capital management, and ROE math related to treasury and swap hedges.

Q: Doug Harter asked about dividend outlook and volatility cost.

A: Peter Federico discussed dividend outlook based on cost of capital and ROE, and volatility impact.

Q: Crispin Love asked about hedge ratio change and agency MBS demand.

A: Peter Federico and Christopher Kuehl answered on hedge ratio reason and agency MBS demand.

Q: Trevor Cranston asked about leverage target and relative value of TBAs versus spec pools.

A: Peter Federico and Christopher Kuehl responded on leverage and TBA vs spec pool relative value.

Q: Eric Hagen asked about prepayment speeds projection and bank regulation impact on repo.

A: Peter Federico answered on prepayment speeds and bank regulation impact.

Q: Jason Stewart asked about impact of ATM timing and treasuries on earnings.

A: Peter Federico and Bernie Bell responded.

Q: Harsh Hemnani asked about risks to base case spreads.

A: Peter Federico and Christopher Kuehl answered on risks to spreads.