AGNC Investment Corp. (AGNC) Business Profile

What it does

AGNC Investment Corp. is an internally managed mortgage real estate investment trust, or REIT, that invests primarily in securities backed by U.S. residential mortgages. It was organized in 2008 and is headquartered in Bethesda, Maryland. Peter J. Federico is its chief executive officer.

Rather than selling homes or making mortgages its principal business, AGNC buys investments that receive payments from pools of home loans. Its main holdings are agency residential mortgage-backed securities, or Agency RMBS. The principal and interest payments on these securities are guaranteed by government-sponsored enterprises such as Fannie Mae and Freddie Mac, or by a U.S. government agency such as Ginnie Mae.

The company uses borrowed money to finance much of its portfolio. It earns interest on its investments and incurs borrowing and hedging costs; gains and losses on investments and hedges also affect its income. AGNC manages the portfolio, financing and hedges as market conditions change.

AGNC can also invest in securities backed by multifamily mortgages and in housing or real estate assets without agency guarantees. Its objective is to generate long-term shareholder returns with a substantial yield component, primarily through monthly dividend distributions. As a REIT, it must meet tax requirements, including an annual distribution requirement.

How it makes money

AGNC earns interest on mortgage securities and finances those investments mainly through collateralized repurchase agreements, commonly called repos. It also records realized gains and losses on investments and hedges. Borrowing and hedging costs reduce the income generated by its assets.

Agency mortgage pass-through securities give AGNC an interest in pools of residential loans. Borrowers’ monthly principal and interest payments pass through to security holders after guarantee and servicing fees. AGNC can also hold collateralized mortgage obligations, which are structured instruments backed by pools of Agency RMBS.

Another instrument is the to-be-announced, or TBA, contract: an agreement to buy or sell Agency RMBS whose specific bonds are identified shortly before settlement. AGNC can finance exposure through a TBA dollar roll, selling a contract for the current month and buying a similar one for a later month. The difference in contract prices represents dollar roll income, economically equivalent to interest income less an implied financing cost.

AGNC adjusts its investment, funding and hedging strategies based on market conditions and its assessment of available investments. As a REIT, it is required to distribute annually 90% of taxable income and intends to distribute 100% within the applicable time limits.

For 2025, net spread and dollar roll income, a non-GAAP measure, was $1.50 per diluted common share. It was reported on 26 October 2026 that third-quarter net spread and dollar roll income was $0.37 per share, against $0.36 in dividends declared.

Customers and how it sells

AGNC participates in the U.S. housing market as an investor in mortgage securities. Its income comes from investments tied to mortgage payments rather than from sales of a conventional product to individual homebuyers. Mortgage borrowers make payments on the loans underlying the pools, and the resulting principal and interest are passed through to security holders after fees.

Its primary investment market is U.S. Agency RMBS. Fannie Mae, Freddie Mac and Ginnie Mae guarantee principal and interest payments on the agency securities in which AGNC invests. AGNC may also purchase agency securities backed by multifamily properties, as well as mortgage and real estate assets that do not carry an agency guarantee.

For non-agency residential securities, the company focuses primarily on underlying mortgages secured by U.S. residential properties. It also intends to focus its commercial mortgage-backed securities investments on collateral secured by commercial properties in the United States.

AGNC obtains investment exposure through securities and TBA contracts. As of December 31, 2025, 30-year fixed-rate Agency RMBS and TBAs represented 95% of its investment portfolio.

Suppliers and costs

AGNC’s principal financing cost is borrowing against its investments. In a repo transaction, it sells an asset and simultaneously agrees to repurchase it at a future date. Its repo borrowings are generally short-term, with maturities typically ranging from one day to one year. Financing rates are primarily affected by short-term benchmark rates and liquidity in agency repo and short-term funding markets.

The company uses multiple repo counterparties. It also finances part of its portfolio through its wholly owned broker-dealer, Bethesda Securities, which has access to bilateral and tri-party repo funding and can raise funding through the Fixed Income Clearing Corporation’s General Collateral Finance Repo service. Access to that service depends on the subsidiary meeting its regulatory and membership requirements.

Hedging is another cost of running the portfolio. AGNC adjusts hedges, leverage and the interest-rate sensitivity of its investments as conditions change. Its agency pass-through securities also have guarantee and servicing fees deducted from the underlying borrowers’ payments before they reach security holders.

AGNC had 54 full-time employees as of December 31, 2025.

Competitive position

AGNC competes to acquire mortgage assets against other mortgage REITs, government entities, banks, specialty finance companies, public and private funds, insurers and other financial institutions. Some competitors may be willing to pay different prices because they have lower funding costs, access to funding sources unavailable to AGNC, or do not face the same REIT and investment-company constraints.

The company’s peer group includes Annaly Capital Management, ARMOUR Residential REIT, Dynex Capital, Invesco Mortgage Capital, Orchid Island Capital and Two Harbors Investment. AGNC manages its portfolio by assessing the risk and return of available assets and their underlying loan characteristics.

One funding channel is Bethesda Securities, its wholly owned broker-dealer. Through that subsidiary, AGNC can access bilateral and tri-party repo and the General Collateral Finance Repo service. AGNC states that the subsidiary provides greater funding depth and diversity than traditional bilateral repo alone, while lowering funding costs and collateral requirements.

Our reading: The broker-dealer’s funding access is a potentially useful advantage, but it depends on continuing regulatory and membership compliance. Our reading: Investment selection and active hedging are central capabilities, though competition from investors with different funding costs and regulatory constraints limits the evidence of a durable moat.

Growth opportunities

AGNC can expand its investment portfolio by acquiring mortgage securities and using financing to support those purchases. Its portfolio totaled $94.8 billion as of December 31, 2025, an increase of $21.5 billion for the year. That included a $6.1 billion increase in its TBA position to $13.0 billion.

The company sizes the Agency market at $9 trillion. Its strategy is to maintain a portfolio consisting predominantly of Agency RMBS while retaining the ability to invest in agency multifamily securities and other mortgage or real estate assets without agency guarantees. Asset selection involves evaluating relative risk and return and the characteristics of the underlying loans.

AGNC issued $345 million and $2.0 billion of new preferred and common equity capital, respectively, during 2025. It can also use repo borrowing and TBA dollar rolls to finance investments. The company generally expects leverage to be within six to ten times tangible stockholders’ equity, although it may operate outside that range under certain conditions.

Looking ahead, AGNC expects net spread and dollar roll income to benefit from factors including lower funding costs following the September, October and December 2025 rate cuts. It also notes that higher hedging costs and reduced mortgage spreads, if they materialize, could offset some or all of those benefits.

Structural risks

• Mortgage spreads: Spread risk is inherent in AGNC’s leveraged Agency RMBS portfolio. Its hedges are generally not designed to protect net book value from changes in the spread between investment yields and the benchmark rates linked to its hedges.
• Leverage and financing: Significant leverage increases the risk of substantial losses. Repo-market disruption, higher short-term rates, declining collateral values or higher lender haircuts can affect financing availability and requirements.
• Interest rates and prepayments: AGNC is exposed to interest-rate, prepayment and extension risks. It may not fully hedge them, and some hedges intended for larger rate moves may be relatively ineffective during smaller changes.
• Broker-dealer access: Bethesda Securities must continue to meet regulatory and membership requirements to access funding through the General Collateral Finance Repo service. Changes to clearing margin requirements could also limit transactions.
• REIT qualification: Failure to qualify as a REIT would have adverse tax consequences. REIT income and asset tests also restrict certain investments and hedging activities.
• Key personnel: The loss of an executive officer or other key employee may materially adversely affect the business.

Bottom line

Our reading

AGNC is a leveraged investor in U.S. mortgage securities, with income tied to investment yields, financing costs and hedging results. [item1] Its agency focus and broker-dealer funding access shape the business, while short-term financing and mortgage-spread movements leave book value exposed even when principal and interest are guaranteed. [item1; item1a] Portfolio growth can expand its investment base, but it also requires capital and financing. [item7]