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American Capital Agency Corp. (AGNC)

  • Mon, Feb. 2, 4:15 PM
    • Q4 net spread and dollar roll income of $0.92 per share vs. $0.85 in Q3. Quarterly dividend run rate was $0.66.
    • Net book value per share of $25.74 vs. $25.54 one quarter earlier. Today's close of $21.43 is a 16.7% discount to book.
    • Q4 economic return - dividends plus the change in book value - of 3.4% or 13.4% annualized. Full-year economic return of 18.5%.
    • CPR of 9% down 100 basis points from Q3. Net interest rate spread of 1.85% down five basis points.
    • "At risk" leverage of 6.9x vs. 6.7x in Q3.
    • Conference call tomorrow at 11 ET
    • Previously: American Capital Agency beats by $0.11 (Feb. 2)
    • AGNC flat after hours
  • Mon, Feb. 2, 4:05 PM
  • Sun, Feb. 1, 5:35 PM
  • Oct. 27, 2014, 4:18 PM
    • Q3 net spread and dollar roll income of $0.85 vs. $0.87 in Q2. Quarterly dividend was $0.65..
    • Net book value per share of $25.54 down 2.7% from the end of Q2. Today's close of $23.20 is a 9.2% discount to book. Decrease in book value combined with dividend makes for an annualized 1.1% economic loss for the Q.
    • CPR of 10% up 100 basis points from Q2.
    • "At risk" leverage of 6.7x vs. 7.1x in Q2.
    • Net interest rate spread of 1.9% up six basis points from Q2.
    • No shares repurchased during quarter. Buyback program ($992M remaining) is extended through year-end 2015.
    • Conference call tomorrow at 11 ET
    • Previously: American Capital Agency beats by $0.10
    • AGNC -0.4% AH
    | Comment!
  • Oct. 27, 2014, 4:03 PM
  • Oct. 26, 2014, 5:35 PM
  • Jul. 28, 2014, 4:16 PM
    • Net spread and dollar roll income of $0.87 per share compares $0.71 in Q1, and to the $0.65 dividend.
    • Book value per share of $26.26 up 7.2% from June 30 book value of $24.49. Today's close of $23.69 is a 9.8% discount to book. Dividend plus boost in book value translates to 9.9% economic ROE for Q2.
    • CPR of 9% up 200 basis points from Q1.
    • Net interest spread of 1.84% up 25 basis points from Q1.
    • Average "at risk" leverage of 7.1x vs. 7.2x in Q1.
    • CIO Kain takes a victory lap: "Our results this quarter were bolstered by several important strategic decisions ... Most important was our decision to maintain our leverage as we believed the supply and demand outlook for agency MBS was very positive despite the tapering of Fed purchases."
    • Conference call tomorrow at 11 ET
    • AGNC +1.3% AH
    • Previously: American Capital Agency beats by $0.19
  • Jul. 28, 2014, 4:05 PM
    • American Capital Agency (NASDAQ:AGNC): Q2 adj. EPS of $0.87 beats by $0.19.
    • Press Release
    | Comment!
  • Jul. 27, 2014, 5:35 PM
  • Apr. 28, 2014, 4:15 PM
    • Economic net income of $1.18 per share, with $0.71 net spread and dollar roll income vs. expectations of $0.68. Q1 dividend was $0.65.
    • Book value per share of $24.49 after $0.65 dividend is up from $23.93 at the end of last year.
    • Size of agency MBS portfolio is $70.5B, up from $68.2B at the end of last year. $352M invested in other mortgage REITs - produced $49M, or $0.14 per share gain from dividends and appreciation during Q.
    • 7.6x "at risk" leverage as of the March 31 vs. 7.5x at end of 2013.
    • Portfolio CPR of 7% down from 8% a quarter ago. Adjusted net interest spread of 1.59% is up 17 basis points.
    • 3.4M shares repurchased - 1% of the float - during quarter at average price of $22.10. Since the end of 2012, company has repurchased 46.3M shares, or 12% of the float.
    • CIO Kain: "We remain optimistic ... To this point, April has been a very good month."
    • CC tomorrow at 11 ET
    • Previously: American Capital Agency Corp. EPS of -$0.41
    • Source: Press Release
    • AGNC flat AH
  • Apr. 28, 2014, 4:03 PM
  • Apr. 27, 2014, 5:35 PM
  • Feb. 26, 2014, 10:20 AM
    • In sharp contrast to the views at American Capital (AGNC +0.5%), Annaly (NLY +3.2%) CEO Wellington Denehan-Norris - speaking on the earnings call - says it makes more sense to lever up and directly buy mortgage-related assets than repurchasing shares or buying the stock of other mREITs.
    • Why rely on the management of other companies, says Norris, reminding of the 1998-99 period - another time when mREITs traded well below book value. After the collapse in Russia, it was found one "darling" in the mortgage REIT industry (no longer in business today) owned the debt of that country.
    • Satisfied with hedges currently in place, Annaly doesn't plan to add any more as it buys more MBS. After taking down leverage to 5:1 over the past year, the company is looking to bring it back towards 7:1.
    • On the growing commercial side of the business, Annaly is in talks with an originator of commercial mortgages for direct access to its assets.
    • Noting the recent sluggish economic stats, particularly as they relate to housing, management doesn't feel like the Fed will soon be in any position to tighten policy.
    • Presentation slides
    • Previous earnings coverage
    • Related ETFs: REM, MORT, MORL
  • Feb. 6, 2014, 5:12 PM
    • As he's doing with American Capital Agency (AGNC -0.6%), CIO Gary Kain is supplementing share repurchases at American Capital Mortgage (MTGE) with outright buys of the common stock of agency mortgage REITs.
    • MTGE purchased $39M of other mREIT stock in Q4, a number lifted to $54M by the end of January. Buybacks of MTGE stock in Q$ were about 1.5M shares, or roughly 3% of the float. For all 2013, the company bought back about 13% of the outstanding stock.
    • Kain on the earnings call: "Given the sizable price to book discounts in the mortgage REIT space, we believed it made sense to sell some agency MBS and buy similar MBS assets in REIT equity form at around 80% of book value. At that discount, it is equivalent to buying agency MBS 2.5 points lower in price than where you can sell them ... To us, the choice was pretty straight-forward."
    • Having had their fill of questioning Kain on the stock purchases during the AGNC call on Tuesday, analysts today spent most of their time asking about the mortgage servicer acquisition - Residential Credit Solutions. While the yield on the interest-only component of MSRs is just 5-10%, the return is higher, says Kain, because owning MSRs - which act as natural interest rate hedges - allows MTGE to pull off other hedges which cost the company money.
    • CC transcript
    • Presentation slides
  • Feb. 4, 2014, 11:51 AM
    • Addressing an analyst cadre somewhat uncomfortable with American Capital's (AGNC +1.6%) new policy of purchasing the common stock of its agency mREIT competitors (Wells' Joel Houck: Do you know their hedging strategies? What happens when one blows up?), CIO Gary Kain says the discounts to asset value are so great as to mitigate much of the risk.
    • Kain does acknowledge some risks though, and reminds that the purchase program is but a small slice of AGNC's overall portfolio ($400M of others' stock bought so far vs. nearly $600M of AGNC buybacks just in Q4).
    • For now, there won't be any disclosure of which names American Capital is buying - a position also not sitting well with those on the call. Should the positions get large enough though, regulatory filings might be required.
    • Kain also reminds that AGNC isn't just boosting risk with these purchases - instead it's selling MBS at 100 cents on the dollar to buy them back (via other mREITs) at somewhere in the area of 80 cents on the dollar.
    • Most of the mREIT sector (REM +0.7%) is ahead again today - Armour (ARR +0.9%), CYS (CYS +2.8%), Hatteras (HTS +1.6%), American Capital Mortgage (MTGE +0.6%), PennyMac (PMT +1.2%) - but Annaly (NLY -0.6%) lags, perhaps as investors feel it was far more conservatively positioned going into 2014 than AGNC was.
    • Earnings call is still ongoing
    • Previous coverage
  • Feb. 4, 2014, 11:18 AM
    • "There are numerous reasons to believe a repeat of 2013 is not in the cards," says American Capital Agency (AGNC +2.2%) CIO Gary Kain on the earnings call. He notes most traditional agency MBS investors are underweight the sector, and MBS have already priced in continued rises in interest rates.
    • Not only is American Capital aggressively repurchasing its own stock while it trades at a large discount to book value, but it bought $400M worth of other agency mREIT players ($237M in Q4, increased to $400M as of the end of January). Kain: Why buy more mortgages when you can buy the companies that own them for roughly 20% less than the value of the mortgages on their books.
    • Earnings call slides
    • Previous earnings coverage
    • Related ETFs: REM, MORT, MORL
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Company Description
American Capital Agency Corp is a real estate investment trust that invests exclusively in residential mortgage pass-through securities and collateralized mortgage obligations on a leveraged basis.
Sector: Financial
Country: United States