AGNC Investment Corp. (AGNC): Business Model Canvas [Dec-2025 Updated]

As a former head analyst, I've seen many ways to generate income, but AGNC Investment Corp.'s model is a classic, high-octane play on interest rates. You're looking at a highly-leveraged Mortgage REIT that, as of late 2025, is still delivering an eye-popping income stream, targeting yields near 13.85% by holding a massive $90.8 billion portfolio of credit-risk-free Agency MBS. Honestly, the magic-and the risk-lies in how they finance that portfolio, using short-term borrowing (repos) and dynamic hedging to capture the spread, which netted them $0.35 per share in Net Spread Income in Q3 2025 alone, all while managing a 7.6x leverage ratio. If you want to see exactly how this complex machine-from its Government-Sponsored Enterprise partnerships to its funding costs-is engineered to pay out those consistent monthly dividends, dive into the full Business Model Canvas below.

AGNC Investment Corp. (AGNC) - Canvas Business Model: Key Partnerships

You're looking at the core relationships that keep AGNC Investment Corp. running, the entities that provide the assets, the funding, and the management structure. It's all about access and risk management in the mortgage space.

Government-Sponsored Enterprises (GSEs): Fannie Mae, Freddie Mac, Ginnie Mae

AGNC Investment Corp. relies on the implicit or explicit backing of GSEs for the bulk of its assets. As of September 30, 2025, the total investment portfolio stood at $90.8 billion.

The concentration in GSE-backed assets is clear:

• Agency MBS and TBA securities: $90.1 billion.
• Fixed-rate securities within that total: $87.1 billion.
• 30-year MBS component: $73.0 billion.
• 30-year TBA securities, net: $13.6 billion.

Broker-dealers and banks for repurchase agreement (Repo) financing

Leverage is key, and that means short-term funding via repurchase agreements. As of September 30, 2025, the total Investment Securities Repo funding balance was $69.0 billion.

The terms of this funding relationship look like this:

Also, AGNC uses its internal structure to support this, with $33.3 billion, or 48%, of the Investment Securities Repo funded through its captive broker-dealer subsidiary, Bethesda Securities, LLC, as of September 30, 2025.

Counterparties for interest rate hedging instruments like swaps and swaptions

To manage interest rate risk on that massive funding base, AGNC uses derivatives. As of September 30, 2025, the pay fixed interest rate swap position had a notional amount of $48.1 billion.

Here are the details on those swaps:

• Average fixed pay rate: 2.47%.
• Average floating receive rate: 4.23%.
• Average maturity: 5.6 years.

The overall hedge portfolio coverage, excluding option-based hedges, was 77% of funding liabilities as of September 30, 2025.

AGNC Management, LLC as the internal manager for strategic and day-to-day operations

The day-to-day management is handled internally, which is a structural partnership. While specific management fee percentages for 2025 aren't explicitly detailed here, the operational reliance is evidenced by the internal funding mechanism through the captive broker-dealer.

The captive broker-dealer, Bethesda Securities, LLC, is a critical internal partner, handling $33.3 billion of the Investment Securities Repo as of September 30, 2025.

The management team includes President and Chief Executive Officer Peter Federico.

AGNC Investment Corp. (AGNC) - Canvas Business Model: Key Activities

You're looking at the core actions AGNC Investment Corp. takes to run its mortgage REIT business as of late 2025. These activities are all about deploying capital into mortgage assets and managing the associated funding and risks.

Active management of a large Agency MBS investment portfolio is the central function. This involves constantly adjusting the mix of assets to capture the best risk-adjusted yield. As of September 30, 2025, the total investment portfolio stood at $90.8 billion. This portfolio is overwhelmingly focused on Agency assets.

Here is the breakdown of that $90.8 billion portfolio:

The core of the strategy is in the 30-year fixed-rate Agency MBS and TBA securities, which represented 95% of the total portfolio as of September 30, 2025. The weighted average coupon on these fixed-rate securities was 5.14% at that date.

A critical, ongoing activity is securing short-term funding, primarily through repurchase agreements (repos). This is how AGNC Investment Corp. leverages its equity to purchase the large asset base. As of September 30, 2025, the amount funded through Investment Securities Repos was $69.0 billion. The weighted average interest rate on these repos for the third quarter was 4.38%, with a weighted average remaining maturity of just 13 days. That short maturity demands constant refinancing activity.

To manage the inherent mismatch between long-duration assets and short-term funding, AGNC engages in dynamic hedging of interest rate and prepayment risk using derivatives. This is non-negotiable for survival in this space. As of September 30, 2025, the portfolio of interest rate swaps, U.S. Treasury positions, and option-based hedges covered 68% of the total funding liabilities. Specifically, the pay fixed interest rate swap position had a notional amount of $48.1 billion, with an average fixed pay rate of 2.47%.

The company actively manages its capital structure through capital raising via common and preferred stock offerings to support growth and maintain liquidity. During the third quarter of 2025, AGNC executed two key actions:

• Issued 31.0 million shares of common equity through At-the-Market (ATM) offerings, bringing in net proceeds of $309 million.
• Raised $345 million through the issuance of 8.75% Series H Fixed-Rate preferred equity.

Finally, to maintain its status as a Real Estate Investment Trust (REIT), AGNC must adhere to distribution requirements, making distributing monthly dividends to maintain REIT tax status a required activity. For the third quarter of 2025, dividends declared totaled $0.36 per common share ($0.12 per month). Since its initial public offering in May 2008 through Q3 2025, the company has declared a cumulative total of $15.1 billion in common stock dividends, or $49.72 per common share.

AGNC Investment Corp. (AGNC) - Canvas Business Model: Key Resources

You're looking at the core assets that power AGNC Investment Corp.'s operations as of late 2025. These aren't just line items; they are the actual capital and intellectual property that drive the business.

Large, high-quality portfolio of Agency MBS, guaranteed against credit losses.

The investment portfolio, which is fundamentally composed of securities guaranteed against credit losses, grew significantly through Q3 2025. As of September 30, 2025, the total investment portfolio stood at $90.8 billion. This portfolio is heavily weighted toward Agency MBS and related forward positions, which is the core asset class for AGNC Investment Corp. The concentration in 30-year fixed-rate Agency MBS and TBA securities was 95% of the total portfolio on that date.

Here's the quick math on that portfolio breakdown as of September 30, 2025:

The fixed-rate Agency MBS and TBA securities component had a weighted average coupon of 5.14% at the end of the third quarter. The projected portfolio life CPR (Constant Prepayment Rate) averaged 8.6% as of September 30, 2025.

Significant liquidity: $7.2 billion in unencumbered cash and Agency MBS as of Q3 2025.

You need dry powder to navigate this market, and AGNC Investment Corp. maintained a substantial buffer. The firm held $7.2 billion in unencumbered cash and Agency MBS as of September 30, 2025. Honestly, this liquidity position was quite strong, representing 66% of the Company's tangible equity at that quarter end.

Other key financial metrics supporting the resource base include:

• Tangible Net Book Value per Common Share: $8.28 as of September 30, 2025.
• Quarterly Increase in TNBV: $0.47 per common share, or 6.0%, from June 30, 2025.
• Tangible Net Book Value 'at Risk' Leverage: 7.6x as of September 30, 2025.
• Dividends Declared for Q3 2025: $0.36 per common share.

Sophisticated in-house risk management and investment team expertise.

The team's expertise is shown through their active management of balance sheet risk. As of September 30, 2025, the hedge portfolio covered 77% of funding liabilities, not counting option-based hedges. This compares to 86% at the end of the prior quarter. The overall tangible net book value 'at risk' leverage was maintained at 7.6x.

Captive broker-dealer subsidiary, Bethesda Securities, LLC, for funding execution.

This subsidiary is a structural component used to help execute funding, which is critical for a leveraged investment vehicle like AGNC Investment Corp. The funding for the investment portfolio as of September 30, 2025 included $69.0 billion of repurchase agreements.

AGNC Investment Corp. (AGNC) - Canvas Business Model: Value Propositions

AGNC Investment Corp. offers investors a primary value proposition centered on generating substantial current income from a portfolio of high-quality, government-backed assets.

The high-yield income stream is a core offering, with a reported dividend yield around 13.85% as of late 2025. This is supported by consistent monthly cash distributions. The next scheduled monthly dividend payment was $0.12 per share, payable on December 9, 2025, to stockholders of record as of November 28, 2025. AGNC Investment Corp. has declared a cash dividend of $0.12 per share of common stock for October 2025.

Here are the key figures underpinning the income proposition:

The structure provides investors with exposure to the low credit-risk Agency MBS market. AGNC Investment Corp. invests in Agency residential mortgage-backed securities, which benefit from a guarantee against credit losses by Fannie Mae, Freddie Mac, or Ginnie Mae. This investment strategy is executed via a leveraged structure, utilizing repurchase agreements to finance its Agency MBS assets. The company manages this leverage dynamically, intending to protect the portfolio from interest rate and other market risks.

The managed leverage is a key component for enhancing returns, as evidenced by the reported leverage metrics as of the end of the third quarter of 2025. The tangible net book value 'at risk' leverage ratio was 7.6x as of September 30, 2025, which was unchanged from June 30, 2025. The average 'at risk' leverage ratio for the third quarter was 7.5x tangible net book value.

Further details supporting the value proposition include performance and balance sheet strength as of September 30, 2025:

• Economic return on tangible common equity for Q3 2025 was 10.6%.
• Net spread and dollar roll income per common share for Q3 2025 was $0.35.
• Tangible net book value per common share was $8.28.
• Liquidity position stood at $7.2 billion of unencumbered cash and Agency MBS, constituting 66% of tangible equity at quarter end.
• The investment portfolio aggregated $90.8 billion.

AGNC Investment Corp. (AGNC) - Canvas Business Model: Customer Relationships

You're looking at how AGNC Investment Corp. (AGNC) keeps its stockholders engaged, and honestly, for a mortgage REIT, it all boils down to the steady stream of cash. The primary relationship is a highly automated, consistent monthly dividend distribution directly to stockholders, which is the core value proposition for this segment.

For the November 2025 distribution, the declared cash dividend was $0.12 per share of common stock, payable on December 9, 2025, to shareholders of record as of November 28, 2025. This maintains their monthly payout frequency, a key feature for income-focused investors. The annual dividend stands at $1.44 per share, translating to a trailing dividend yield of approximately 13.85% based on recent pricing. Since its May 2008 initial public offering, AGNC Investment Corp. has declared a cumulative total of $15.1 billion in common stock dividends, or $49.72 per common share through the third quarter of 2025.

Transparency is maintained through formal channels, which is crucial for a publicly traded REIT. You can access detailed performance metrics and forward-looking statements via the Investor Relations section of the AGNC Investment Corp. website.

• Investor Relations contact is available via phone at (301) 968-9300 or email at IR@AGNC.com.
• Quarterly Stockholder Presentations are a regular feature, with the Q3 2025 presentation released on October 21, 2025.
• The Q2 2025 Stockholder Presentation was available on July 22, 2025, and the Q1 2025 presentation on April 22, 2025.
• The company also provides access to SEC Filings, Annual Reports, and Tax Information.

The relationship with the broader investor base is almost entirely transactional, mediated by the infrastructure of the capital markets. You buy or sell shares through your brokerage account, and AGNC Investment Corp. is the counterparty in the underlying asset management structure. The company has taken steps to ensure it has the flexibility to issue more stock to fund its investment activity, which directly impacts the shareholder base.

Here's the quick math on that flexibility: As of the February 21, 2025, record date for the Annual Meeting, there were 915,463,675 shares of Common Stock entitled to vote. To support future capital needs, stockholders approved increasing the total authorized number of common shares from 1,500,000,000 to 2,250,000,000 in April 2025. This structural change directly affects the pool of shares available for trading and distribution, underpinning the transactional nature of the relationship.

AGNC Investment Corp. (AGNC) - Canvas Business Model: Channels

You're looking at how AGNC Investment Corp. gets its capital and communicates with the market; for a mortgage REIT, these channels are all about accessing public markets for equity and debt, and then being transparent about the results.

The Nasdaq Global Select Market for Common and Preferred Stock Trading

AGNC Investment Corp. common stock trades on the Nasdaq-GS (Nasdaq Global Select Market). This is the primary venue for liquidity for both common and preferred shares, including the depositary shares representing the preferred stock, such as the Series H shares trading under the symbol AGNCZ. As of November 16, 2025, the market capitalization for AGNC Investment Corp. stood at $10.89B. A more recent quote showed a Market Cap of $11,156,330,328. The 52-week trading range for the common stock was between a low of $7.85 and a high of $10.6282. On a recent day, the share volume was 39,547,365, significantly higher than the Average Volume of 21,354,756.

At-the-Market (ATM) Equity Offering Programs for Capital Raising

AGNC Investment Corp. actively uses At-the-Market (ATM) equity offering programs to raise common equity capital directly into the market, which helps fund its investment portfolio growth. This is a key channel for continuously topping up equity capital without a large, single-day issuance event. Here's how the ATM activity looked recently:

• In the third quarter of 2025, AGNC issued 31.0 million shares of common equity through ATM offerings.
• These Q3 2025 ATM issuances generated net proceeds of $309 million.
• For comparison, in the second quarter of 2025, the company issued 92.6 million shares via ATM for net proceeds totaling $799 million.

Investment Banks and Underwriters for Debt and Preferred Equity Issuance

When AGNC issues preferred equity, it relies on a syndicate of major investment banks to underwrite the offering. This channel is critical for accessing large pools of capital efficiently. For the September 2025 issuance of the 8.75% Series H Fixed-Rate Cumulative Redeemable Preferred Stock depositary shares, the gross proceeds targeted were $300 million. The net proceeds to AGNC Investment Corp., before expenses, totaled $290,550,000 from the sale of 12,000,000 depositary shares at $25.00 per share. The underwriting discount amounted to $9,450,000 in total.

The primary intermediaries used for this capital raise included several joint book-running managers and a co-manager:

Direct Communication via SEC Filings and Investor Webcasts

AGNC Investment Corp. maintains a regular cadence of direct communication with investors and analysts, primarily through mandatory SEC filings and scheduled investor presentations. This ensures compliance and provides necessary updates on performance and strategy. The company uses its Investor Relations website to distribute materials, including filings made on Form S-3 for offerings.

The quarterly reporting cycle dictates the timing of these key communication events:

• Q3 2025 Earnings Release was after market close on October 20, 2025, followed by a Stockholder Call/Webcast on October 21, 2025, at 8:30 am ET.
• Q2 2025 Stockholder Presentation occurred on July 22, 2025, at 8:30 AM EDT.
• Q1 2025 Earnings Release was after market close on April 21, 2025, with the call on April 22, 2025, at 8:30 am ET.

For those unable to attend live, an archived audio of the stockholder call and the slide presentation are made available on the AGNC website, for example, the Q3 2025 recording was available through November 4, 2025. Finance: draft 13-week cash view by Friday.

AGNC Investment Corp. (AGNC) - Canvas Business Model: Customer Segments

You're looking at who AGNC Investment Corp. serves, which boils down to those chasing yield, the big money managers, and the fixed-income crowd. Honestly, for a Mortgage REIT, the customer base is pretty straightforward: capital providers looking for distribution.

Income-focused individual investors seeking high dividend yields

This segment is primarily the retail investor base, attracted by AGNC Investment Corp.'s commitment to monthly distributions. They are the bedrock of the common equity base. As of late 2025, this group represents the majority ownership slice.

• Retail investors own approximately 63.62% of AGNC Investment Corp. stock.
• The declared monthly common stock dividend for November 2025 was $0.12 per share.
• The annual dividend on the common stock is $1.44 per share, translating to a dividend yield of 13.85% as of late 2025.
• Since its May 2008 initial public offering through the third quarter of 2025, AGNC Investment Corp. has declared a total of $15.1 billion in common stock dividends, which equates to $49.72 per common share.

Institutional investors, including hedge funds and asset managers

These are the large funds, index trackers, and active managers that hold significant blocks of AGNC Investment Corp. shares. They are focused on the total return profile, often using AGNC as a yield-enhancement tool within larger fixed-income or equity strategies. You see a lot of the major players here.

Here's a look at the institutional footprint as of late 2025, based on filings through Q3 2025:

The top institutional holders as of September 30, 2025, included:

• Vanguard Group Inc. holding 96,440,345 shares.
• Blackrock, Inc. holding 56,207,331 shares.
• Geode Capital Management LLC holding 27,501,497 shares.
• State Street Corp. holding 17,155,565 shares.

Preferred stockholders seeking a fixed-rate income stream, e.g., 8.75% Series H

This group buys AGNC Investment Corp.'s preferred stock, which offers a more predictable, though typically lower, yield profile than the common stock, often with seniority in the capital structure. The Series H issuance in late 2025 is a prime example of this segment's demand for high, fixed-rate income.

The 8.75% Series H Fixed-Rate Cumulative Redeemable Preferred Stock, expected to issue around September 10, 2025, is a key offering for this segment.

• Series H Dividend Rate: A fixed rate equal to 8.75% per annum of the $25,000 liquidation preference per share.
• Series H Depositary Share Public Offering Price: $25.00 per depositary share.
• Net Proceeds to AGNC Investment Corp. from Series H (estimated): $290,550,000 (assuming no exercise of the underwriters overallotment option).
• Capital Fortification from Series H: The company raised -$345 million from the 8.75% Series H preferred equity offering.

Other preferred series also serve this segment, with their rates fluctuating or resetting. For instance, for the dividend period ending October 14, 2025, the Series C Depositary Shares had a rate of 9.69038% per annum.

The aggregate liquidation preference for the existing preferred stock series as of Q1 2025 shows the scale of this capital base:

If you're managing a portfolio, you defintely want to track the total capital stack this represents.

AGNC Investment Corp. (AGNC) - Canvas Business Model: Cost Structure

The Cost Structure for AGNC Investment Corp. is heavily weighted toward financing costs, given its business as a highly leveraged investor in agency Mortgage-Backed Securities (MBS). These costs are dynamic, directly tied to short-term funding rates and prepayment speeds on the underlying assets.

Interest expense on repurchase agreements represents a primary cost component. As of September 30, 2025, the weighted average interest rate on its Investment Securities Repo funding was reported at 4.38%. This is the cost to finance the majority of the investment portfolio.

The premium amortization cost on the MBS portfolio is a non-interest expense driven by investor behavior. For the third quarter of 2025, AGNC Investment Corp.'s investment portfolio generated a net premium amortization cost of $(57) million. This figure included a specific 'catch-up' premium amortization cost of $(14) million, which resulted from an increase in the projected Constant Prepayment Rate (CPR) estimates for certain securities.

Operating expenses, which include compensation for the internally-managed structure, are managed relative to the equity base. For the third quarter of 2025, the ratio of operating costs (including dividends and preferred stock dividends) to the equity base dropped to about 17%.

The cost of hedging activities is crucial for managing interest rate risk. AGNC Investment Corp. uses interest rate swaps to manage the cost of funds. As of September 30, 2025, the pay fixed interest rate swap position had a notional amount of $48.1 billion, with an average fixed pay rate of 2.47% and an average floating receive rate of 4.23%. The overall hedge portfolio, including swaps, U.S. Treasury positions, and option-based hedges, covered 68% of the Company's funding liabilities as of that date.

Professional fees and administrative overhead are embedded within the overall operating expenses. The internally-managed structure means compensation and administrative costs are direct operating expenses, which, as noted, constituted a cost ratio of approximately 17% against the equity base in Q3 2025.

Here are the key cost-related metrics from the third quarter of 2025:

The structure relies on managing the spread between asset yields and these funding costs. You can see the direct impact of funding costs on the net spread income, which was $0.35 per common share for the quarter, excluding the catch-up amortization cost.

• The weighted average actual Constant Prepayment Rate (CPR) for the quarter was 8.3%.
• The weighted average cost basis of the investment portfolio was 101.2% of par value as of September 30, 2025.
• The average 'at risk' leverage ratio for the third quarter was 7.5x tangible net book value.

AGNC Investment Corp. (AGNC) - Canvas Business Model: Revenue Streams

You're looking at the core ways AGNC Investment Corp. generates income, which is heavily concentrated in the spread between what they earn on their mortgage assets and what they pay to fund those assets. This is the engine room of a mortgage REIT, so let's look at the hard numbers from late 2025.

The primary driver is Net Interest Income (NII), which comes from the spread between Mortgage-Backed Securities (MBS) yields and funding costs. For the third quarter of 2025, the annualized net interest spread, which includes the TBA position and interest rate swaps but excludes certain amortization adjustments, was reported at 1.78%. Looking at the components, AGNC reported Net Interest Income (NII) of $148 million against net interest expenses of $64 million in the prior-year quarter, though the current quarter's NII/Expense breakdown isn't explicitly separated in the same way for Q3 2025.

A key component of the operating income is the Net spread and dollar roll income, which was $0.35 per common share in Q3 2025. This figure excludes an estimated $(0.01) per common share of 'catch-up' premium amortization cost due to changes in prepayment rate estimates.

The total revenue, reported as interest income for the quarter ending September 30, 2025, reached $903 million. For the twelve months ending Q3 2025, the reported revenue was $956.00M.

The income statement also reflects volatility from market movements through Realized and unrealized gains/losses on investment securities and derivatives. For the third quarter, AGNC recorded a net gain of $688 million in other gain (loss), net, which translated to $0.65 per common share. This gain was composed of several elements:

• Net realized losses on sales of investment securities: $(81) million.
• Net unrealized gains on investment securities measured at fair value through net income: $805 million.
• Net losses on interest rate swaps: $(272) million.

AGNC Investment Corp. maintains a small allocation to riskier assets, which contributes to revenue. The income from this small portfolio of Credit Risk Transfer (CRT) and non-Agency securities is part of the overall investment portfolio. As of September 30, 2025, the total size of this segment was $0.7 billion of the total portfolio.

Here's a breakdown of the investment portfolio as of September 30, 2025, which underpins these revenue streams:

The economic return on tangible common equity for the quarter was a strong 10.6%, comprised of $0.36 dividends declared per common share and a $0.47 increase in tangible net book value per common share.

Finance: draft 13-week cash view by Friday.