AGNC (AGNC) Q3 2025 Earnings Call Transcript

Motley Fool Transcribing, The Motley Fool

Mon, January 26, 2026 astatine 9:41 AM CST 46 min read

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Oct. 21, 2025 astatine 8:30 a.m. ET

• Chief Executive Officer — Peter Federico

• Chief Financial Officer — Bernice Bell

Peter Federico: Good morning, and convey you each for joining our league call. In the 3rd quarter, the Federal Reserve's pivot to a little restrictive monetary argumentation stance and the easing of fiscal argumentation concerns drove robust fiscal marketplace show and a important betterment successful capitalist sentiment. Agency mortgage-backed securities were 1 of the best-performing fixed income plus classes during the 4th and person present outperformed U.S. treasuries for 5 consecutive months, a series of outperformance that has not happened since 2013. In this favorable concern environment, AGNC generated a precise beardown economical instrumentality of 10.6%, comprised of our charismatic monthly dividend and publication worth appreciation.

At its September meeting, the Fed lowered the national funds complaint arsenic expected and signaled further monetary argumentation accommodation with the anticipation of complaint cuts astatine the October and December meetings. On the fiscal argumentation side, the transition of the taxation measure aboriginal successful the 4th and respective affirmative tariff developments eased immoderate of the concerns that dampened the concern outlook successful the 2nd quarter. These investor-friendly developments led to a worldly diminution successful involvement complaint volatility and contributed to the outperformance of Agency MBS. As we person discussed, a fig of emerging factors enactment our constructive outlook for bureau mortgage-backed securities. The archetypal relates to the improved dispersed situation for Agency MBS.

Over the past 4 years, the dispersed scope betwixt bureau securities and benchmark rates has go progressively good defined with incremental capitalist request consistently emerging erstwhile spreads commercialized adjacent the precocious extremity of the range. In addition, the medication has begun to absorption connected owe spreads arsenic a means of improving lodging affordability. In an interrogation successful precocious September, the Treasury Secretary reinforced this presumption erstwhile helium said, "The truly important happening is that we either support owe spreads oregon constrictive them further to assistance the American people." This absorption connected spreads by the medication is bully for Agency MBS and bully for our business. Second, the proviso and request dynamic for bureau mortgage-backed securities continues to beryllium good balanced.

With the superior owe complaint persistently supra 6%, the nett caller proviso of Agency MBS this twelvemonth volition beryllium astir $200 billion, the little extremity of archetypal expectations. At the aforesaid time, the request outlook has improved. Bank request for Agency MBS has been comparatively muted this year, but should summation arsenic regulatory reforms get implemented. The wealth manager assemblage is different important root of request for Agency MBS. Demand from this assemblage accrued meaningfully successful the 3rd quarter, arsenic the favorable displacement successful monetary argumentation led to $180 cardinal of enslaved money inflows, which are present moving somewhat up of past year's pace. Third, the financing marketplace for Agency MBS remains strong.