BETHESDA, Md., April 8, 2020 /PRNewswire/ -- AGNC Investment
Corp. (Nasdaq: AGNC) ("AGNC" or the "Company") announced today that
its Board of Directors has declared a cash dividend of $0.12 per share of common stock for April 2020. The dividend is payable on
May 11, 2020 to common stockholders
of record as of April 30, 2020.
The Company also reaffirmed its intention to continue its practice
of reporting monthly estimates of tangible net book value per share
of common stock in conjunction with its monthly dividend
declarations.
"Consistent with the decline in AGNC's book value during the
first quarter of 2020 stemming from the financial market
dislocations associated with the COVID-19 pandemic, AGNC today
announced its revised monthly dividend level of $0.12 per common share," said Gary Kain, the Company's Chief Executive Officer
and Chief Investment Officer. "Importantly, this reduction in
AGNC's dividend also provides the Company greater flexibility to
take advantage of attractive investment opportunities presented by
the current environment and to reinvest earnings in excess of our
dividend back into our business over time. The agency
mortgage-backed securities ("Agency MBS") market has continued to
strengthen since quarter end in large part due to the ongoing
support from the Federal Reserve.
"Looking ahead, we believe AGNC is well-positioned to generate
very attractive risk-adjusted returns in the current
environment. A significant portion of the decline in our book
value during the first quarter was driven by reduced price premiums
for higher quality specified pools, which we believe will reverse
over time. We expect that disruptions to the housing market
and mortgage origination operations related to COVID-19 will cause
prepayment speeds for these pools to be materially lower than what
might otherwise be expected. We believe that our retention of
almost all of these assets through the recent market turmoil will
be a meaningful driver of our future returns. In addition,
Agency MBS funding markets were fully functional throughout this
recent crisis and continue to provide attractive funding
opportunities for our portfolio. In light of these factors,
we believe Agency MBS assets, which enjoy a guarantee of timely
principal and interest payments from the GSEs, provide compelling
risk-adjusted returns despite a very challenging credit
backdrop."
The Company also provided today an update regarding first
quarter financial results and its investment portfolio:
- As of March 31, 2020, estimated
tangible net book value per share of common stock1 was
approximately $13.60, after
deductions for common and preferred dividends declared through
March 31, 2020, a year-to-date
decline of approximately 23%.
- Projected net spread and dollar roll income for the first
quarter, excluding estimated "catch-up" premium amortization cost,
is estimated to be in the range of $0.55 to $0.58 per
share of common stock.2
- As of March 31, 2020, estimated
cash and unencumbered Agency MBS were approximately $3.5 billion, which did not include approximately
$1.2 billion of capital plus excess
margin held at the Company's broker-dealer subsidiary Bethesda
Securities or $0.3 billion of
unencumbered non-Agency securities.
- As of March 31, 2020, AGNC's "at
risk" leverage was approximately 9.4x.3
- As of March 31, 2020, AGNC's
total investment portfolio was approximately $93 billion, which included approximately
$21 billion of To-Be-Announced
("TBA") Agency MBS and $1.1 billion
of non-Agency securities. The tables below include a summary of the
Company's 30-year and 15-year fixed rate Agency MBS holdings as of
March 31, 2020, excluding net TBA
securities, (dollars in millions):
|
|
|
|
|
|
|
|
|
30-Year Fixed Rate
Agency MBS as of 3/31/20
|
|
15-Year Fixed Rate
Agency MBS as of 3/31/20
|
Coupon
|
Fair Market
Value
|
Specified Pool %
4
|
|
Coupon
|
Fair Market
Value
|
Specified Pool %
4
|
≤ 3.0%
|
$5,531
|
15%
|
|
≤ 2.5%
|
$894
|
75%
|
3.5%
|
18,626
|
88%
|
|
3.0%
|
2,048
|
92%
|
4.0%
|
25,777
|
91%
|
|
3.5%
|
1,770
|
93%
|
≥ 4.5%
|
13,000
|
98%
|
|
≥ 4.0%
|
1,119
|
91%
|
30-Year
MBS
|
$62,934
|
85%
|
|
15-Year
MBS
|
$5,831
|
90%
|
- The Company's previously announced $1
billion share repurchase program, which was authorized by
our Board of Directors in July 2019,
remains in effect. As of the date of this press release, the
Company has $0.9 billion in remaining repurchase capacity
available under the program.
The financial estimates provided above reflect the views and
assumptions of the Company's management based on information
currently available to them in connection with the preparation of
the Company's financial statements as of and for the quarter ended
March 31, 2020. Management has
not yet completed procedures to verify the completeness and
accuracy of this information. Furthermore, this information is
unaudited and has not been verified or reviewed by any third party,
including the Company's independent auditors. Additional
information learned through completion of its financial closing
procedures or otherwise may require the Company to make adjustments
to these operating estimates, which could cause the Company's
actual financial results to be materially different.
Estimates are subject to inherent uncertainties, and investors
should not place undue reliance on them. The Company
undertakes no obligation to update or revise these estimates.
For further information or questions, please contact Investor
Relations at (301) 968-9300 or IR@AGNC.com.
ABOUT AGNC INVESTMENT CORP.
AGNC Investment Corp. is
an internally-managed real estate investment trust that invests
primarily in residential mortgage-backed securities for which the
principal and interest payments are guaranteed by a U.S.
Government-sponsored enterprise or a U.S. Government agency.
For further information, please refer to www.AGNC.com.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements.
Forward-looking statements are based on estimates, projections,
beliefs and assumptions of management of the Company at the time of
such statements and are not guarantees of future performance.
Forward-looking statements involve risks and uncertainties in
predicting future results and conditions. Actual results could
differ materially from those projected in these forward-looking
statements due to a variety of important factors, including,
without limitation, changes in interest rates, changes in the yield
curve, changes in prepayment rates, the availability and terms of
financing, changes in the market value of the Company's assets,
general economic conditions, market conditions, conditions in the
market for Agency securities (including the levels of market
volatility and transaction price discovery), and legislative and
regulatory changes that could adversely affect the business of the
Company. Certain factors that could cause actual results to differ
materially from those contained in the forward-looking statements,
are included in the Company's periodic reports filed with
the Securities and Exchange Commission ("SEC"). Copies
are available on the SEC's website, www.sec.gov. The
Company disclaims any obligation to update or revise any
forward-looking statements based on the occurrence of future
events, the receipt of new information, or otherwise.
1 Estimated tangible net book value per share of
common stock is based upon 567.7 million shares outstanding as of
March 31, 2020.
2 Projected net spread and dollar roll income,
excluding "catch-up" premium amortization cost, per share of common
stock is a non-GAAP measure. It is measured as (i) net interest
income (GAAP measure) of approximately $0.12 per common share adjusted to (a) exclude
retrospective "catch-up" adjustments to premium amortization cost
due to an increase in the Company's projected CPR estimates for
securities acquired prior to the first quarter of 2020 of
approximately $0.44 per common share,
(b) include TBA dollar roll income of approximately $0.03 per common share, and (c) include interest
rate swap net periodic income of approximately $0.06 per common
share, less (ii) total operating expense and dividends on preferred
stock (GAAP measures), each approximately $0.04 per common
share. The Company believes that this non-GAAP measure
provides greater transparency into the information used by the
Company's management in its financial and operational
decision-making and that it provides additional context for users
of its financial information to consider when evaluating
the Company's current performance and operations. However,
this measure is an incomplete measure of its estimated financial
results as computed in accordance with GAAP and should be
considered as supplementary to and not as a substitute for results
computed in accordance with GAAP. In addition, not all companies
use identical calculations, and the Company's presentation of
non-GAAP measure estimates may not be comparable to other
similarly-named measures of other companies. Accordingly,
undue reliance should not be placed on this non-GAAP measure. A
more complete presentation and reconciliation of non-GAAP measures
and related information will be provided in the Company's
announcement of its financial results and its periodic report to be
filed with the SEC for the quarter ended March 31, 2020. For
additional information pertaining to the Company's use of non-GAAP
measures, please refer to its Annual Report on Form 10-K for the
fiscal year ended December 31, 2019.
3 "At risk" leverage is calculated as the sum of
Agency and non-Agency repurchase agreements, net TBA position (at
cost), and net receivable/payable for unsettled investment
securities divided by total stockholders' equity, adjusted to
exclude goodwill. "At Risk" leverage ratio excludes US Treasury
repurchase agreements.
4 Specified pools include pools backed by lower
balance loans with original loan balances of up to $200K, HARP pools (defined as pools that were
issued between May 2009 and
Dec 2018 and backed by 100% refinance
loans with original LTVs ≥ 80%) and pools backed by loans 100%
originated in N.Y. and Puerto
Rico. Lower balance pools have a wtd. avg. original loan
balance of $116 K for 15-year and
$119 K for 30-year securities as of
Mar 31, 2020. HARP pools have a wtd.
avg. original LTV of 119% for 15-year and 136% for 30-year
securities as of Mar 31, 2020.
CONTACT:
Investor Relations - (301) 968-9300
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SOURCE AGNC Investment Corp.