Tuesday, October 30, 2012

American Capital Agency's Q3 Results: Decreased Leverage and Lower Prepayments, And A New $500 Million Repurchase Plan


On Monday, October 29, American Capital Agency Corp. (AGNC) reported Q3 income of $1.3 billion or $3.98 per share, and net book value of $32.49 per share. On a per share basis, this is an increase to book value of $3.08 per share, from the last reported book value of $29.41 at the end of Q2. AGNC's estimated taxable EPS for Q3 was $1.36, a $0.26 decline from Q2.

AGNC's actual constant prepayment rate during the third quarter was 9%, a decrease from 10% during both the first and second quarters of 2012. Most of AGNC's peer agency mREITs sustained far higher CPRs during the first half of 2012, indicating that AGNC has been competently managing its portfolio in order to mitigate both its leverage and prepayment risks.


See a chart of AGNC's book value per quarter:



See a chart of AGNC's spreads per quarter:




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