STOCKHOLDER PRESENTATION Q1 | AGNC Common Stock | | | --- | --- | | Ticker | Nasdaq: AGNC | | IPO Date | May 2008 | | Market Capitalization | $9.1 B | | Total Dividends Paid Since IPO1 | $14.3 B | | Total Stock Return Since IPO2 | 427% | | Dividend Yield | 15.0% | APRIL 22, 2025 THE PREMIER AGENCY RESIDENTIAL MORTGAGE REIT © 2025 AGNC Investment Corp. All Rights Reserved. 2025 IMPORTANT NOTICES Safe harbor statement under the private securities litigation reform act of 1995 This presentation contains statem ...

Group 1 - The current market is experiencing high volatility, making it challenging to publish frequent updates and forecasts [1][3] - There are emerging bargains in the price-to-book ratio space, with prices fluctuating significantly compared to book values [3][5] - The spread between Treasury rates and MBS rates remains wide, which could benefit future book values but also introduces more volatility [3] Group 2 - Agency mortgage REITs typically have book values close to their fair market values, while non-agency mortgage REITs can have book values exceeding fair market values [4] - A previous warning about AGNC being overpriced was validated as shares declined over 20%, indicating a disconnect between book values and share prices [5] Group 3 - The uncertainty surrounding Federal Reserve leadership and interest rate predictions complicates investment strategies in Treasury ETFs [6] - Investors do not necessarily need to predict Treasury rates but should focus on the valuation of stocks within the sector to assess investment odds [6] Group 4 - Preferred shares are favored for their lower risk and better yield stability compared to common shares, although they still carry some risk [7][8] - The potential for multiple cuts to the Fed Funds rate could lower floating-rate dividends, making investment in this sector more challenging [8] Group 5 - The portfolio currently holds about 33.2% in cash, with expectations to reduce this ratio over time as more investments are made [14] - The focus is on lower-risk shares that can withstand economic downturns while still providing upside potential during recoveries [11][12] Group 6 - The article includes comparisons of various companies and their preferred shares or baby bonds, highlighting specific mortgage REITs and BDCs [15][19] - Detailed charts provide insights into preferred share prices and yields, indicating potential investment opportunities [25]

Financial Performance - Comprehensive income per common share for Q1 2025 was $0.12, consisting of $0.02 net income and $0.10 other comprehensive income[5] - Net income available to common stockholders decreased to $15 million in Q1 2025 from $86 million in Q4 2024, a decline of 82.6%[36] - Comprehensive income available to common stockholders was $108 million in Q1 2025, compared to a loss of $93 million in Q4 2024[36] - Economic return on tangible common equity for the quarter was 2.4%, driven by $0.36 dividends and a $0.16 decline in tangible net book value[5] - Economic return on tangible common equity was 2.4% for the three months ended March 31, 2025, compared to a loss of (0.6)% in the previous quarter[43] Dividends - Dividends declared per common share for the first quarter totaled $0.36[5] - Total dividends declared since the IPO in May 2008 reached $14.3 billion, or $49.00 per common share[30] - Dividends declared per common share remained stable at $0.36 for both Q1 2025 and Q4 2024[36] - AGNC Investment Corp. has paid over $14 billion in common stock dividends since its inception, indicating a strong commitment to returning value to shareholders[51] Assets and Liabilities - Total assets increased to $95,889 million as of March 31, 2025, up from $88,015 million at December 31, 2024, representing a growth of 3.2%[34] - Total liabilities rose to $85,847 million as of March 31, 2025, compared to $78,253 million at December 31, 2024, an increase of 9.8%[34] - The investment portfolio totaled $78.9 billion, with $70.5 billion in Agency MBS and $7.5 billion in net forward purchases/sales of Agency MBS[5] Income and Interest - Net interest income for Q1 2025 was $159 million, compared to $115 million in Q4 2024, reflecting a 38.3% increase[36] - Interest income for Q1 2025 was $846 million, slightly down from $856 million in Q4 2024[36] - The annualized net interest spread for Q1 was 2.12%, up from 1.91% in the previous quarter[19] - Average total cost of funds improved to 2.75% in Q1 2025, down from 2.89% in Q4 2024[41] - Average funding cost for repurchase agreements was 4.45% for the three months ended March 31, 2025, down from 4.86% in the prior quarter[43] Shareholder Equity - Tangible net book value per common share decreased by $0.16, or -1.9%, to $8.25 as of March 31, 2025[5] - Average stockholders' equity increased to $9.935 billion as of March 31, 2025, compared to $9.637 billion at December 31, 2024, reflecting a growth of 3.1%[43] - The tangible net book value per common share decreased to $8.25 in Q1 2025 from $8.41 in Q4 2024[34] Investment Performance - Net spread and dollar roll income increased to $0.44 per common share from $0.37 in the prior quarter[20] - Net spread and dollar roll income available to common stockholders increased to $403 million in Q1 2025 from $329 million in Q4 2024, representing a 22.5% growth[39] - Adjusted net interest and dollar roll income for Q1 2025 was $477 million, compared to $405 million in Q4 2024, reflecting a 17.8% increase[41] - Unrealized gain on investment securities measured at fair value through net income was $1,183 million in Q1 2025, compared to a loss of $1,895 million in Q4 2024[36] Market and Economic Conditions - Forward-looking statements indicate potential risks including changes in monetary policy and market conditions that could impact future performance[54] - The company utilizes dynamic risk management strategies to protect its portfolio from interest rate and market risks, enhancing its investment stability[50] - The company primarily invests in Agency residential mortgage-backed securities (Agency MBS), which are guaranteed against credit losses by government-sponsored entities[50] Other Information - Archived audio of the stockholder call will be available for a limited time, allowing stakeholders to review the discussions and insights shared[48] - The company emphasizes the importance of non-GAAP financial measures, such as net spread and dollar roll income, to provide greater transparency into its financial performance[55] - The average tangible net book value "at risk" leverage during the period was calculated by dividing the sum of daily weighted average Investment Securities Repo and other debt by the average stockholders' equity adjusted to exclude goodwill[52] - AGNC's business serves as a significant source of private capital for the U.S. residential housing market, reflecting its role in the broader economy[51] - The company plans to continue leveraging its expertise in managing mortgage assets across various market cycles to optimize returns[51]

Core Viewpoint - AGNC Investment Corp. reported a favorable economic return of 2.4% for Q1 2025, despite broader market declines, with a total stock return of 7.8% when dividends are reinvested [5][10]. Financial Highlights - The company declared dividends of $0.36 per common share for the first quarter [10][26]. - The tangible net book value per common share decreased by 1.9% to $8.25 from $8.41 at the end of Q4 2024 [7][10]. - The investment portfolio totaled $78.9 billion, primarily consisting of $70.5 billion in Agency MBS [8][10]. Economic Performance - The economic return on tangible common equity was composed of $0.36 in dividends and a $(0.16) decline in tangible net book value per common share [6][10]. - The net spread and dollar roll income increased to $0.44 per common share from $0.37 in the previous quarter [10][17]. Investment Portfolio - As of March 31, 2025, the weighted average coupon for fixed-rate Agency MBS and TBA securities was 5.03%, slightly up from 5.02% in the previous quarter [9][10]. - The company's investment portfolio included 96% in 30-year fixed-rate Agency MBS [8][10]. Leverage and Liquidity - The tangible 'at risk' leverage ratio was 7.5x as of March 31, 2025, with a liquidity position of $6.0 billion in unencumbered cash and Agency MBS [6][20][10]. - The average cost of funds for the first quarter was 2.75%, down from 2.89% in the prior quarter [15][31]. Market Conditions - Investor sentiment turned cautious due to potential governmental policy actions impacting economic growth and inflation, leading to a flight to high-quality assets [5][6]. - Following the April tariff announcement, financial market volatility increased, resulting in wider Agency MBS spreads [6][10].

Group 1 - The Conservative Income Portfolio targets high-value stocks with significant margins of safety and aims to reduce volatility through well-priced options [1][3] - The Enhanced Equity Income Solutions Portfolio is designed to generate yields of 7-9% while minimizing volatility [1][3] - Trapping Value provides Covered Calls and focuses on capital preservation, while the Fixed Income Portfolio emphasizes high income potential and undervalued securities [2][3] Group 2 - Trapping Value consists of a team with over 40 years of combined experience in generating options income and capital preservation [3] - The investing group operates the Conservative Income Portfolio in collaboration with Preferred Stock Trader, featuring two income-generating portfolios and a bond ladder [3]

Group 1 - AGNC Investment offers a high dividend yield of 17%, significantly higher than the S&P 500's yield of approximately 1.3% and the average REIT yield of 4% [1] - AGNC Investment operates as a mortgage REIT, purchasing mortgages pooled into bond-like assets, differing from property-owning REITs that manage physical properties [2] - The company's focus is on total return rather than consistent and growing dividends, which may not meet the expectations of dividend-focused investors [3][5] Group 2 - AGNC Investment's dividend has been declining for over a decade, leading to reduced capital and income for investors who rely on these payouts [5] - Alternative investment options for dividend-focused investors include Realty Income, NNN REIT, and Federal Realty, which have reliable dividend growth and lower yields around 4.7% to 5.7% [6][7] - Midstream companies like Enterprise Products Partners and Enbridge also present attractive dividend options, with yields of 6.9% and 5.7% respectively, and a history of consistent dividend increases [8][9] Group 3 - Investors seeking reliable and growing dividends should consider stepping down from high yields like AGNC Investment to more stable dividend growers [10]

Group 1 - AGNC Investment is expected to face a significantly more disruptive year ahead, with economic indicators suggesting a potential recession and rising inflation expectations [1] - The equity market is characterized by daily price fluctuations that can lead to substantial long-term wealth creation or destruction [1] - Pacifica Yield focuses on long-term wealth creation by targeting undervalued high-growth companies, high-dividend stocks, REITs, and green energy firms [1]

Core Viewpoint - AGNC Investment (AGNC) has experienced significant selling pressure, resulting in a 19% decline over the past four weeks, but analysts anticipate better earnings than previously expected, indicating potential for recovery [1]. Group 1: Technical Indicators - The Relative Strength Index (RSI) is utilized to identify oversold stocks, with a reading below 30 typically indicating oversold conditions [2]. - AGNC's current RSI reading is 29.99, suggesting that the heavy selling may be exhausting, which could lead to a price rebound [5]. - The RSI helps investors identify potential entry points for stocks that have fallen below their fair value due to excessive selling pressure [3]. Group 2: Fundamental Indicators - There is a consensus among sell-side analysts that AGNC's earnings estimates for the current year have increased by 2.8% over the last 30 days, indicating a positive trend in earnings revisions [7]. - AGNC holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a turnaround [8].

AGNC Investment Corp. (AGNC) is slated to report first-quarter 2025 earnings on April 21, after market close. AGNC's peer Annaly Capital Management (NLY) is scheduled to announce quarterly numbers on April 30, while Arbor Realty Trust (ABR) is expected to come out with its performance details on May 2.AGNC Investment’s fourth-quarter 2024 results reflected an improvement in average asset yield on its portfolio, while its tangible book value was down from the prior-year quarter.The company’s earnings outpace ...

Core Insights - AGNC Investment's preferred stock has outperformed the broader market in 2023, delivering a total return of -1% compared to the S&P 500's decline of 8% [1] Performance Analysis - The S&P 500 has experienced two years of excessive returns before the current decline [1]