AGNC Funding Q3 earnings high consensus, helped by hedging, repositioning (NASDAQ:AGNC)

AGNC Funding (NASDAQ:AGNC) stated Monday its asset repositioning and important hedge place helped push the mortgage REIT’s internet unfold and greenback roll earnings up in Q3 from Q2 amid a unstable marketplace for MBSs.

Tangible internet ebook worth per frequent share of $9.08 at Sept. 30 fell from $11.43 at June 30, and AGNC’s financial return of tangible frequent fairness within the quarter was -17.4% vs. -10.1% in Q2. AGNC (AGNC) inventory slipped 1.2% in Monday after-hours buying and selling.

Q3 internet unfold and greenback roll earnings per share of $0.84, beating the $0.69 consensus, rose from $0.83 within the earlier quarter. The determine excludes $0.03 per share of estimated “catch-up’ premium amortization value because of change in projected fixed prepayment fee (“CPR”) estimates. It contains $0.23 per frequent share of greenback roll earnings related to the corporate’s $20.3B common internet lengthy place in company mortgage-backed securities within the “to-be-announced” (“TBA”) market.

“Broad-based weak point within the monetary markets, and glued earnings markets particularly, continued within the third quarter of 2022 as world macroeconomic and financial coverage uncertainty intensified,,” stated AGNC President and CEO Peter Federico. “Throughout these kind of monetary market downturns, particularly these by which bond market liquidity is proscribed, U.S. Treasury and Company mortgage-backed securities typically initially expertise extra hostile valuation impacts, as these devices are best for buyers, together with bond funds managing redemption exercise, to transform to money.”

The corporate’s annualized internet curiosity unfold, together with the TBA positions and rate of interest swaps and excluding “catch-up” premium amortization, for Q3 was 2.81%, up from 2.70% in Q2.

Money and unencumbered company MBS totaled ~$3.6B at Sept. 30, 2022 elevated from ~$2.8B at June 30.

AGNC’s funding portfolio weighted common CPR was 9.2% vs. 12.4% within the prior quarter.

The weighted common projected CPR for the remaining lifetime of the corporate’s company securities held as of Sept. 30, 2022 declined to 7.0% from 7.2% at June 30.

Convention name on Oct. 25 at 8:30 AM ET.

Earlier, AGNC Funding (AGNC) non-GAAP EPS of $0.84 beats by $0.15