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Item 8. Financial Statements and Supplementary Data

2026-02-23 compared with 2025-02-21 · 144 added, 184 removed, 975 unchanged (25% of the section changed)

68 unchanged sentences

Agency securities and non-agency securities of high credit quality net premium amortization

of the Matter As of December 31, 2024, the Company’s investment securities had a net unamortized premium balance of $1.0 billion, including interest and principal-only securities, and it recorded $123 million of net premium amortization for the year then ended.

of the Matter As of December 31, 2025, the Company's investment securities had a net unamortized premium balance of $986 million, including interest and principal-only securities, and it recorded $177 million of net premium amortization for the year then ended.

As explained in Note 2 to the financial statements, premiums or discounts associated with the purchase of Agency residential mortgage-backed securities ("Agency RMBS") and non-Agency mortgage-backed securities of high credit quality are amortized or accreted into interest income, respectively, over the projected lives of the securities, including contractual payments and estimated prepayments using the effective interest method.

21 unchanged sentences

Derivative assets, at fair value 169 205

Receivable for investment securities sold (including pledged securities of $ 149 and $0, respectively)

Receivable under reverse repurchase agreements 16,615 17,137

11 unchanged sentences

Stockholders' equity:

Preferred Stock - aggregate liquidation preference of $ 1,688

Preferred Stock - aggregate liquidation preference of $ 2,033 and $ 1,688 , respectively

Common stock - $ 0.01 par value;

1,500 shares authorized;

2,250 and 1,500 shares authorized, respectively;

1,107.6 and 897.4 shares issued and outstanding, respectively

17 unchanged sentences

Unrealized gain (loss) on investment securities measured at fair value through net income, net 2,733 ( 885 ) 1,678

Gain on derivative instruments and other investments, net 2,028 386 4,630

Total other gain (loss), net:

Gain (loss) on derivative instruments and other investments, net ( 1,082 ) 2,028 386

Total other gain, net:

1,122 955 497

2 unchanged sentences

Total operating expense 127 110 96

Net income (loss) 863 155 ( 1,190 )

Net income 1,670 863 155

Dividends on preferred stock 161 132 123

Net income (loss) available (attributable) to common stockholders $ 731 $ 32 $ ( 1,295 )

Net income (loss) $ 863 $ 155 $ ( 1,190 )

Net income available to common stockholders $ 1,509 $ 731 $ 32

Net income $ 1,670 $ 863 $ 155

Unrealized gain (loss) on investment securities measured at fair value through other comprehensive income (loss), net 268 ( 74 ) 155

Comprehensive income (loss) 789 310 ( 2,163 )

Comprehensive income 1,938 789 310

Dividends on preferred stock

Comprehensive income (loss) available (attributable) to common stockholders $ 657 $ 187 $ ( 2,268 )

Comprehensive income available to common stockholders $ 1,777 $ 657 $ 187

Weighted average number of common shares outstanding - basic

2 unchanged sentences

1,023.7 786.0 619.6

Net income (loss) per common share - basic $ 0.93 $ 0.05 $ ( 2.41 )

Net income (loss) per common share - diluted $ 0.93 $ 0.05 $ ( 2.41 )

Net income per common share - basic $ 1.48 $ 0.93 $ 0.05

Net income per common share - diluted $ 1.47 $ 0.93 $ 0.05

See accompanying notes to consolidated financial statements.

10 unchanged sentences

— — — — 155 — 155

Other comprehensive loss:

Unrealized loss on available-for-sale securities, net

Other comprehensive income:

Unrealized gain on available-for-sale securities, net

— — — — — 155 155

Stock-based compensation, net — 0.9 — 11 — — 11

Issuance of preferred stock 145 — — — — — 145

Issuance of common stock — 118.8 1 1,084 — — 1,085

Repurchase of common stock — ( 4.7 ) — ( 51 ) — — ( 51 )

Preferred dividends declared — — — — ( 123 ) — ( 123 )

2 unchanged sentences

Net income — — — — 863 — 863

Other comprehensive income:

Unrealized gain on available-for-sale securities, net — — — — — 155 155

Other comprehensive loss:

Unrealized loss on available-for-sale securities, net — — — — — ( 74 ) ( 74 )

Stock-based compensation, net — 1.0 — 18 — — 18

4 unchanged sentences

Net income — — — — 1,670 — 1,670

Other comprehensive loss:

Unrealized loss on available-for-sale securities, net — — — — — ( 74 ) ( 74 )

Other comprehensive income:

Unrealized gain on available-for-sale securities, net — — — — — 268 268

Stock-based compensation, net — 2.0 — 26 — — 26

Issuance of preferred stock 334 — — — — — 334

Issuance of common stock — 208.2 2 1,971 — — 1,973

9 unchanged sentences

Operating activities:

Net income (loss) $ 863 $ 155 $ ( 1,190 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Net income $ 1,670 $ 863 $ 155

Adjustments to reconcile net income to net cash provided by operating activities:

Amortization of premiums and discounts on mortgage-backed securities, net 177 123 201

2 unchanged sentences

Unrealized (gain) loss on investment securities measured at fair value through net income, net ( 2,733 ) 885 ( 1,678 )

Gain on derivative instruments and other securities, net ( 2,028 ) ( 386 ) ( 4,630 )

(Gain) loss on derivative instruments and other securities, net 1,082 ( 2,028 ) ( 386 )

(Increase) decrease in other assets ( 151 ) 738 ( 892 )

13 unchanged sentences

Net proceeds from (payments on) reverse repurchase agreements 1,407 ( 4,793 ) ( 4,510 )

Net proceeds from derivative instruments 803 989 2,907

Net cash provided by (used in) investing activities ( 11,169 ) ( 14,672 ) 11,188

Net proceeds from (payments on) derivative instruments ( 405 ) 803 989

Net cash used in investing activities ( 25,864 ) ( 11,169 ) ( 14,672 )

Financing activities:

2 unchanged sentences

Payments on debt of consolidated variable interest entities ( 12 ) ( 15 ) ( 17 )

Net proceeds from preferred stock issuances — — 145

Net proceeds from preferred stock issuance 334 — —

Net proceeds from common stock issuances 1,973 1,967 1,085

Payments for common stock repurchases — — ( 51 )

Cash dividends paid ( 1,601 ) ( 1,241 ) ( 1,005 )

Net cash provided by (used in) financing activities 11,083 14,227 ( 11,392 )

Net cash provided by financing activities 25,182 11,083 14,227

Net change in cash, cash equivalents and restricted cash ( 29 ) — ( 563 )

18 unchanged sentences

Government agency.

We also invest in other types of mortgage and mortgage-related securities, such as credit risk transfer ("CRT") securities and non-Agency residential and commercial mortgage-backed securities ("non-Agency RMBS" and "CMBS," respectively), where repayment of principal and interest is not guaranteed by a GSE or U.S.

We also invest in Agency multifamily mortgage-backed securities ("Agency multifamily MBS") that are similarly guaranteed by the GSEs and in other types of mortgage and mortgage-related securities, such as credit risk transfer ("CRT") securities and non-Agency residential and commercial mortgage-backed securities ("non-Agency RMBS" and "CMBS," respectively), where repayment of principal and interest is not guaranteed by a GSE or U.S.

Government agency, and other assets related to the housing, mortgage or real estate markets.

16 unchanged sentences

Agency RMBS consist of residential mortgage pass-through securities and collateralized mortgage obligations ("CMOs") guaranteed by the Federal National Mortgage Association ("Fannie Mae"), Federal Home Loan Mortgage Corporation ("Freddie Mac," and together with Fannie Mae, the "GSEs") or the Government National Mortgage Association ("Ginnie Mae").

CRT securities are risk sharing instruments issued by the GSEs, and similarly structured transactions issued by third-party market participants, that synthetically transfer a portion of the risk associated with credit losses within pools of conventional residential mortgage loans from the GSEs and/or third parties to private investors.

Unlike Agency RMBS, full repayment of the original principal balance of CRT securities is not guaranteed by a GSE or U.S.

Agency multifamily MBS consist of securities backed by one or more mortgage loans secured by one or more multifamily properties that are similarly guaranteed by a GSE.

Our investments in Agency multifamily MBS primarily consist of securities issued under Fannie Mae's Delegated Underwriting and Servicing ("DUS") program, which are generally backed by a single mortgage loan secured by a single property and include lender risk-sharing.

CRT securities are risk sharing instruments issued by the GSEs, and similarly structured transactions issued by third-party market participants, that synthetically transfer a portion of the risk associated with credit losses within pools of conventional residential and multifamily mortgage loans from the GSEs and/or third parties to private investors.

Unlike Agency RMBS and Agency multifamily MBS, full repayment of the original principal balance of CRT securities is not guaranteed by a GSE or U.S.

Government agency;

rather, "credit risk transfer" is achieved by writing down the outstanding principal balance of the CRT securities if credit losses on a related pool of loans exceed certain thresholds.

By reducing the amount that they are obligated to repay to holders of CRT securities, the GSEs and/or other third parties offset credit losses on the related loans.

By reducing the principal amount that they are obligated to repay to holders of CRT securities, the GSEs and/or other third parties offset credit losses on the related loans.

Non-Agency RMBS and CMBS (together, "non-Agency MBS") are backed by residential and commercial mortgage loans, respectively, packaged and securitized by a private institution, such as a commercial bank.

29 unchanged sentences

Repurchase arrangements involve the sale and a simultaneous agreement to repurchase the securities at a future date.

We maintain a beneficial interest in the specific securities pledged during the term of each repurchase arrangement

and we receive the related principal and interest payments.

We maintain a beneficial interest in the specific securities pledged during the term of each repurchase arrangement and we receive the related principal and interest payments.

Pursuant to ASC Topic 860, Transfers and Servicing , we account for repurchase agreements as collateralized financing transactions, which are carried at their contractual amounts (cost), plus accrued interest.

2 unchanged sentences

We borrow securities to cover short sales of U.S.

Treasury securities through reverse repurchase transactions under our master repurchase agreements (see Derivative Instruments below).

Treasury securities through reverse repurchase transactions (see Derivative Instruments below).

We account for these as securities borrowing transactions and recognize an obligation to return the borrowed securities at fair value on the balance sheet based on the value of the underlying borrowed securities as of the reporting date.

29 unchanged sentences

We purchase interest rate swaptions to help mitigate the potential impact of larger, more rapid changes in interest rates on the performance of our investment portfolio.

Interest rate swaptions provide us the option to enter into an interest rate swap agreement for a predetermined notional amount, stated term and pay and receive interest rates in the future.

Interest rate swaptions provide us the option to enter into an interest rate swap

agreement for a predetermined notional amount, stated term and pay and receive interest rates in the future.

Our interest rate swaption agreements are not subject to central clearing.

The difference between the premium paid and the fair value of the swaption is reported in gain (loss) on derivative instruments and other securities, net in our consolidated statements of comprehensive income.

If a swaption expires unexercised, the realized loss on the swaption would be equal to the premium

If a swaption expires unexercised, the realized loss on the swaption would be equal to the premium paid.

If we sell or exercise a swaption, the realized gain or loss on the swaption would be equal to the difference between the cash or the fair value of the underlying interest rate swap and the premium paid.

34 unchanged sentences

We make inquiries of third-party pricing sources to understand the significant inputs and assumptions they used to determine their prices and that they are derived from orderly transactions, particularly during periods of elevated market turbulence and reduced market liquidity.

We also review third-party price estimates and perform procedures to validate their reasonableness, including an analysis of the range of estimates for each position, comparison to recent trade activity for similar securities and for consistency with market conditions observed as of the measurement date.

would indicate and we cannot obtain an understanding from the third-party source as to the significant inputs used to determine the price.

We also review third-party price estimates and perform procedures to validate their reasonableness, including

an analysis of the range of estimates for each position, comparison to recent trade activity for similar securities and for consistency with market conditions observed as of the measurement date.

While we do not adjust prices we obtain from pricing sources, we will exclude prices for securities from our estimation of fair value if we determine based on our validation procedures and our market knowledge and expertise that the price is significantly different from what observable market data would indicate and we cannot obtain an understanding from the third-party source as to the significant inputs used to determine the price.

The following is a description of the valuation methodologies used for financial instruments measured at fair value on a recurring basis classified as Level 2 inputs.

24 unchanged sentences

Goodwill is the cost of an acquisition in excess of the fair value of identified assets acquired and liabilities assumed and is recognized as an asset on our consolidated balance sheets.

As of December 31, 2024 and 2023, we had $ 526 million of goodwill related to our acquisition of AGNC Management, LLC, our former manager, on July 1, 2016.

As of December 31, 2025 and 2024, we had $ 526 million of

goodwill related to our acquisition of AGNC Management, LLC, our former manager, on July 1, 2016.

Goodwill is not subject to amortization but must be tested for impairment at least annually and at interim periods when events or circumstances may make it more likely than not that an impairment has occurred.

If a qualitative analysis indicates that there may be an impairment, a quantitative analysis is performed.

The quantitative analysis requires that we compare the carrying value of the

identified reporting unit comprising the goodwill to the reporting unit's fair value.

The quantitative analysis requires that we compare the carrying value of the identified reporting unit comprising the goodwill to the reporting unit's fair value.

If the reporting unit's carrying value is greater than its fair value, an impairment charge is recognized to the extent the carrying amount of the reporting unit exceeds its fair value.

97 unchanged sentences

RMBS excludes other mortgage credit investments of $ 70 million and $ 64 million as of December 31, 2025 and 2024, respectively.

Our CRT securities reference the performance of loans underlying Agency RMBS issued by Fannie Mae or Freddie Mac, which were subject to their underwriting standards.

Our CRT securities primarily reference the performance of single-family and multifamily mortgage loans underlying Agency RMBS and CMBS issued by Fannie Mae or Freddie Mac, which are subject to the respective agency's underwriting standards.

The remainder of our CRT holdings reference single-family loans originated and issued by third-party market participants and may not be subject to the same standards.

The actual maturities of our investment securities are generally shorter than their stated contractual maturities.

50 unchanged sentences

See Note 9 for a summary of changes in accumulated OCI.

During fiscal years 2024, 2023 and 2022, we received principal repayments on available-for-sale securities of $ 0.6 billion, $ 0.7 billion and $ 1.5 billion, respectively.

During fiscal years 2025, 2024 and 2023, we received principal repayments on available-for-sale securities of $ 534 million , $ 588 million and $704 million, respectively.

Repurchase Agreements and Reverse Repurchase Agreements

21 unchanged sentences

Total $ 85,286 3.97 % 11 $ 60,798 4.76 % 11

As of December 31, 2024 and 2023, $ 25.4 billion and $ 16.7 billion, respectively, of our investment securities repurchase agreements and all of our U.S.

As of December 31, 2025 and 2024, $ 27.5 billion and $ 25.4 billion, respectively, of our investment securities repurchase agreements and $ 10.9 billion and $ 1.4 billion, respectively, of our U.S.

Treasury repurchase agreements had an overnight maturity of one business day and none of our repurchase agreements were due on demand.

20 unchanged sentences

TBA and forward settling non-Agency securities Derivative assets, at fair value 77 61

Treasury futures - long Derivative assets, at fair value 3 —

Treasury futures - short Derivative assets, at fair value 8 83

4 unchanged sentences

TBA and forward settling non-Agency securities Derivative liabilities, at fair value ( 6 ) ( 87 )

Treasury futures - short Derivative liabilities, at fair value — ( 336 )

SOFR futures contracts - long Derivative liabilities, at fair value — ( 7 )

Credit default swaps 1

Derivative liabilities, at fair value — —

Total derivative liabilities, at fair value

7 unchanged sentences

As of December 31, 2025 and 2024, the net fair value of our interest rate swaps excluding the recognition of variation margin settlements as a direct reduction of carrying value (see Note 2) was a net asset (liability) of $ 1.3 billion and $ 2.3 billion, respectively.

As of December 31, 2023, the net fair value of our credit default swaps excluding the recognition of variation margin settlements was a net asset (liability) of $( 6 ) million.

The following tables summarize certain characteristics of our derivative and other hedging instruments outstanding as of December 31, 2025 and 2024 (dollars in millions):

15 unchanged sentences

As of December 31, 2025, 95 % and 5 % of notional amount receive index references SOFR and OIS, respectively.

As of December 31, 2023, 80 % and 20 % of notional amount receive index references SOFR and OIS, respectively.

Receive Fixed / Pay Variable

Interest Rate Swaps December 31, 2024

December 31, 2023

Years to Maturity Notional

Amount Average

Fixed Receive

(Years) Notional

Amount Average

Fixed Receive

> 1 to ≤ 3 years $ — — % — % 0.0 $ ( 1,000 ) 5.38 % 4.65 % 1.5

________________________________

Pay index references SOFR.

As of 2024, 82 % and 18 % of notional amount receive index references SOFR and OIS, respectively.

Payer Swaptions Option Underlying Payer Swap

24 unchanged sentences

> 10 years ( 2,162 ) ( 2,210 ) ( 2,175 ) ( 1,782 ) ( 1,829 ) ( 1,756 )

Treasury securities $ ( 16,207 ) $ ( 15,882 ) $ ( 15,101 ) $ ( 9,855 ) $ ( 9,475 ) $ ( 9,354 )

Treasury securities, net $ ( 2,920 ) $ ( 2,913 ) $ ( 2,975 ) $ ( 16,207 ) $ ( 15,882 ) $ ( 15,101 )

________________________________

3 unchanged sentences

Treasury securities totaling $ 13.5 billion and $ 1.6 billion, at fair value, respectively, had a weighted average yield of 3.67 % and 4.27 %, respectively.

Treasury Futures December 31, 2024 December 31, 2023

Treasury Futures 1

December 31, 2025 December 31, 2024

Years to Maturity Notional

6 unchanged sentences

> 10 years ( 3,210 ) ( 3,718 ) ( 3,710 ) 8 ( 2,291 ) ( 2,669 ) ( 2,608 ) 61

Treasury futures $ ( 4,373 ) $ ( 4,969 ) $ ( 4,886 ) $ 83 $ ( 6,429 ) $ ( 7,168 ) $ ( 7,504 ) $ ( 336 )

Treasury futures, net $ 1,396 $ 1,457 $ 1,468 $ 11 $ ( 4,373 ) $ ( 4,969 ) $ ( 4,886 ) $ 83

________________________________

As of December 31, 2025 and 2024, short U.S.

Treasury futures totaling $( 3.7 ) billion and $( 4.9 ) billion, at fair value, respectively.

As of December 31, 2025, long U.S.

Treasury futures totaling $ 5.2 billion, at fair value.

Net carrying value represents the difference between the fair market value and the cost basis (or the forward price to be paid/(received) for the underlying U.S.

23 unchanged sentences

Net carrying value represents the difference between the fair market value and the cost basis (or the forward price to be paid/(received) for the underlying Agency security) of the TBA contract as of period-end and is reported in derivative assets/(liabilities), at fair value in our consolidated balance sheets.

As of December 31, 2024 and 2023, we held SOFR futures contracts with a long notional position of $ 1.2 billion and $ 0.9 billion, respectively, measured on a two-year swap equivalent basis, with a net carrying value of $( 7 ) million and $( 10 ) million, respectively.

As of December 31, 2023, we held centrally cleared credit default swaps ("CDS") with a notional value of $ 95 million that referenced the Markit CDX Investment Grade or High Yield Grade Index, maturing in December 2028.

Under the terms of these contracts, we made fixed periodic payments equal to 1% per annum of the notional value and we were entitled to receive payments in the event of qualifying credit events.

As of December 31, 2023, the credit default swaps had a market value of $( 6 ) million and a carrying value of zero dollars, net of variation margin settlements.

Pursuant to rules governing central clearing activities, we recognized variation margin settlements as a direct reduction of the carrying value of the CDS asset or liability.

As of December 31, 2024, we held SOFR futures contracts with a long notional position of $ 1.2 billion, measured on a two-year swap equivalent basis, with a net carrying value of $( 7 ) million.

Gain (Loss) From Derivative Instruments and Other Securities, Net

8 unchanged sentences

TBA securities, net $ 6,955 167,650 ( 161,425 ) $ 13,180 $ 318

Forward settling non-Agency securities $ — — — $ — —

Interest rate swaps - payer $ 39,646 54,746 ( 29,760 ) $ 64,632 ( 518 )

Interest rate swaps - receiver $ ( 1,000 ) — 1,000 $ — ( 9 )

Credit default swaps - buy protection $ ( 96 ) ( 192 ) 288 $ — ( 7 )

Payer swaptions $ 2,000 1,500 ( 3,500 ) $ — ( 29 )

3 unchanged sentences

Treasury futures contracts - short position $ ( 4,373 ) ( 12,270 ) 13,433 $ ( 3,210 ) ( 110 )

Treasury futures contracts - long position $ — 5,956 ( 1,350 ) $ 4,606 ( 10 )

Fiscal Year 2024:

1 unchanged sentence

Interest rate swaps - payer $ 44,476 12,095 ( 16,925 ) $ 39,646 1,020

Interest rate swaps - receive, net $ — ( 1,000 ) — $ ( 1,000 ) 4

Interest rate swaps - receiver $ ( 1,000 ) — 1,000 $ — ( 9 )

Credit default swaps - buy protection $ ( 96 ) ( 192 ) 288 $ — ( 7 )

4 unchanged sentences

Treasury futures contracts - short position $ ( 6,429 ) ( 12,473 ) 14,529 $ ( 4,373 ) 387

Treasury futures contracts - long position $ — 750 ( 750 ) $ — 22

Fiscal Year 2023:

TBA securities, net $ 19,050 164,465 ( 178,183 ) $ 5,332 $ 49

Forward settling non-Agency securities $ 450 — ( 450 ) $ — —

Interest rate swaps - payer $ 47,825 5,746 ( 9,095 ) $ 44,476 666

Interest rate swaps - receiver $ — ( 1,000 ) — $ ( 1,000 ) 4

Credit default swaps - buy protection $ ( 215 ) ( 1,322 ) 1,441 $ ( 96 ) ( 13 )

7 unchanged sentences

Additionally, as of December 31, 2024 and 2023, we held SOFR futures contracts with a long notional position of $ 1.2 billion and $ 0.9 billion, respectively, measured on a two-year swap equivalent basis.

For fiscal years December 31, 2024 and 2023, we recognized a gain (loss) of $ 13 million and $( 10 ) million, respectively, on our SOFR futures contracts in gain (loss) on derivative instruments and other securities, net in our consolidated statements of comprehensive income.

For fiscal years 2025, 2024 and 2023, we recognized a gain (loss) of $ 20 million, $ 13 million and $( 10 ) million, respectively , on our SOFR futures contracts in gain (loss) on derivative instruments and other securities, net in our consolidated statements of comprehensive income.

Pledged Assets

Our funding agreements require us to fully collateralize our obligations under the agreements based upon our counterparties' collateral requirements and their determination of the fair value of the securities pledged as collateral, which

fluctuates with changes in interest rates, credit quality and liquidity conditions within the investment banking, mortgage finance and real estate industries.

Our derivative contracts similarly require us to fully collateralize our obligations under such agreements, which will vary over time based on similar factors as well as our counterparties' determination of the value of the derivative contract.

We are typically required to post initial margin upon execution of derivative transactions, such as under our interest rate swap agreements and TBA contracts, and subsequently post or receive variation margin based on daily fluctuations in fair value.

Our brokerage and custody agreements and the clearing organizations utilized by our wholly-owned captive broker-dealer subsidiary, Bethesda Securities, LLC, also require that we post minimum daily clearing deposits.

If we breach our collateral requirements, we will be required to fully settle our obligations under the agreements, which could include a forced liquidation of our pledged collateral.

Our counterparties also apply a "haircut" to our pledged collateral, which means our collateral is valued at slightly less than market value and limits the amount we can borrow against our securities.

This haircut reflects the underlying risk of the specific collateral and protects our counterparty against a change in its value.

Our agreements do not specify the haircut;

rather, haircuts are determined on an individual transaction basis.

Consequently, our funding agreements and derivative contracts expose us to credit risk relating to potential losses that could be recognized if our counterparties fail to perform their obligations under such agreements.

We minimize this risk by limiting our counterparties to major financial institutions with acceptable credit ratings or to registered clearinghouses and U.S.

government agencies, and we monitor our positions with individual counterparties.

In the event of a default by a counterparty, we may have difficulty obtaining our assets pledged as collateral to such counterparty and may not receive payments as and when due to us under the terms of our derivative agreements.

In the case of centrally cleared instruments, we could be exposed to credit risk if the central clearing agency or a clearing member defaults on its respective obligation to perform under the contract.

However, we believe that the risk is minimal due to the clearing exchanges' initial and daily mark-to-market margin requirements, clearinghouse guarantee funds and other resources that are available in the event of a clearing member default.

As of December 31, 2024, our maximum amount at risk with any counterparty related to our repurchase agreements, excluding the Fixed Income Clearing Corporation, was less than 2 % of our tangible stockholders' equity (or the excess/shortfall of the value of collateral pledged/received over our repurchase agreement liabilities/reverse repurchase agreement receivables).

As of December 31, 2024, 9 % of our tangible stockholder's equity was at risk with the Fixed Income Clearing Corporation.

Our funding agreements require us to fully collateralize our obligations based on our counterparties' collateral requirements and their determination of the fair value of the securities pledged, which fluctuates with changes in interest rates, credit spreads, liquidity, and overall market conditions.

Bilateral funding agreements typically include a "haircut," or discount applied to the market value of pledged collateral, which reflects the risk characteristics of the underlying securities.

Haircuts are determined on a transaction-specific basis and are not contractually fixed under the applicable Master Repurchase Agreement.

Margin requirements for centrally cleared repurchase agreements executed through the Fixed Income Clearing Corporation ("FICC") are determined in accordance with the FICC's clearing rules.

These include an initial margin requirement, calculated daily using a Value-at-Risk ("VaR") model, which takes into account any offsetting risk sensitivities of positions such as repos and reverse repos and is intended to protect the FICC against potential future exposure from a member default.

The FICC also imposes variation margin based on amounts borrowed plus accrued interest, adjusted daily for fluctuations in collateral value, which is intended to cover our current repo exposure.

Initial margin posted to the FICC may also be mutualized, meaning it can be used to absorb losses from the default of another clearing member, subject to applicable caps and withdrawal provisions.

We are also required to post collateral under our derivative agreements.

These agreements typically require the posting of initial margin at inception and the daily exchange of variation margin as market values change.

Initial margin for derivatives is generally based on counterparty risk models, including VaR-based approaches, and is intended to cover potential future exposure in the event of a default.

Variation margin reflects current exposure and serves to settle gains and losses on a daily basis.

Our funding and derivative agreements expose us to credit risk in the event a counterparty fails to perform its obligations.

We seek to mitigate this risk by actively monitoring our collateral positions and limiting our counterparties to registered clearinghouses and regulated financial institutions, including banks and broker-dealers (both bank affiliated and independent) with acceptable credit ratings.

In the event of a counterparty default, we may experience delays or losses in recovering pledged collateral or receiving payments due.

We believe the credit risk associated with centrally cleared transactions is limited by the clearinghouses' daily margin practices, mutualized loss protections, designations as systemically important financial market utilities, and other risk management safeguards.

As of December 31, 2025, our maximum amount at risk with any counterparty related to our repurchase agreements (i.e., the excess/shortfall of the value of collateral pledged/received over our repurchase agreement liabilities/reverse repurchase agreement receivables), excluding the FICC, was less than 2 % of our tangible stockholders' equity.

As of December 31, 2025, less than 10 % of our tangible stockholders' equity was at risk with the FICC.

Assets Pledged to Counterparties

38 unchanged sentences

> 2 and ≤ 3 months 496 503 2 146 149 —

> 3 months — — — — — —

Total $ 87,420 $ 87,440 $ 430 $ 62,168 $ 64,882 $ 279

1 unchanged sentence

Includes $ 30 million and $ 33 million of retained interests in our consolidated VIEs pledged as collateral under repurchase agreements as of December 31, 2025 and 2024, respectively.

Excludes $ 397 million of repledged U.S.

Treasury securities received as collateral from counterparties as of December 31, 2023.

Assets Pledged from Counterparties

33 unchanged sentences

December 31, 2025

Interest rate swap agreements, at fair value 1

$ — $ — $ — $ — $ — $ —

TBA securities, at fair value 1

32 unchanged sentences

TBA securities — 77 — — 61 —

SOFR Futures — — — — — —

Treasury futures

11 — — 83 — —

Total $ 13,488 $ 81,877 $ — $ 1,658 $ 66,470 $ —

3 unchanged sentences

Interest rate swaps 1

Credit default swaps 1

TBA securities — 6 — — 87 —

Treasury futures — — — 336 — —

SOFR Futures — — — 7 — —

2 unchanged sentences

As of December 31, 2025 and 2024, the net fair value of our interest rate swaps excluding the recognition of variation margin settlements as a direct reduction of carrying value was a net asset (liability) of $ 1.3 billion and $ 2.3 billion, respectively, based on "Level 2" inputs.

As of December 31, 2024 and 2023, the net fair value of our credit default swaps excluding the recognition of variation margin settlements was a net asset (liability) of $ 0 million and $( 6 ) million, respectively, based on "Level 2" inputs.

See Notes 2 and 5 for additional details.

Excluded from the table above are financial instruments reported at cost and other mortgage credit investments reported under the equity method of accounting in our consolidated financial statements.

14 unchanged sentences

Weighted average number of common shares outstanding - diluted 1,023.7 786.0 619.6

Net income (loss) available (attributable) to common stockholders $ 731 $ 32 $ ( 1,295 )

Net income (loss) per common share - basic $ 0.93 $ 0.05 $ ( 2.41 )

Net income (loss) per common share - diluted $ 0.93 $ 0.05 $ ( 2.41 )

For the year ended December 31, 2022, 1.1 million of potentially dilutive unvested time- and performance-based RSUs outstanding were excluded from the computation of diluted net income (loss) per common share because including them would have been anti-dilutive for the period.

Net income available to common stockholders $ 1,509 $ 731 $ 32

Net income per common share - basic $ 1.48 $ 0.93 $ 0.05

Net income per common share - diluted $ 1.47 $ 0.93 $ 0.05

Stockholders' Equity

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As of December 31, 2025 and 2024, 13,800 , 10,350 , 16,100 , 23,000 and 6,900 shares of preferred stock were designated as 7.00 % Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock, 6.875 % Series D Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock, 6.50 % Series E Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock, 6.125 % Series F Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock and 7.75 % Series G Fixed-Rate Reset Cumulative Redeemable Preferred Stock, respectively, (referred to as "Series C, D, E, F and G Preferred Stock", respectively).

As of December 31, 2025, an additional 13,800 shares were designated as 8.75 % Series H Fixed-Rate Cumulative Redeemable Preferred stock (referred to as "Series H Preferred Stock").

As of December 31, 2025 and 2024, 13,000 , 9,400 , 16,100 , 23,000 and 6,000 shares of Series C, D, E, F and G Preferred Stock, respectively, were issued and outstanding.

As of December 31, 2025, an additional 13,800 shares of Series H Preferred Stock were issued and outstanding.

Each share of preferred stock is represented by 1,000 depositary shares.

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The following table includes a summary of preferred stock depositary shares issued and outstanding as of December 31, 2025 (dollars and shares in millions):

Cumulative Redeemable Preferred Stock 1

Issue Date Depositary

Cumulative Redeemable Preferred Stock Issue Date Depositary

Outstanding Carrying

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Series G September 14, 2022 6.0 145 150 7.75000% October 15, 2027

Series H September 10, 2025 13.8 334 345 8.75000% October 15, 2030

Total 81.3 $ 1,968 $ 2,033

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The depositary shares underlying our preferred stock accrue dividends at an initial annual fixed rate of the $25.00 liquidation preference per depositary share from the issuance date up to, but not including, the fixed-to-floating rate or fixed-rate-reset conversion date;

thereafter, dividends will accrue on a floating rate or fixed-rate-reset basis equal to the conversion rate plus a fixed spread.

The Series C, D and E per annum dividend rates represent the rates in effect as of December 31, 2024.

The Series C, D and E dividends accrue at a rate equal to the 3-Month CME Term SOFR plus 0.26161%, plus spreads of 5.111 %, 4.332 % and 4.993 %, respectively, per annum, resetting quarterly in accordance with the certificate of designations for such series and the Adjustable Interest Rate (LIBOR) Act of 2021 (the “LIBOR Act”).

At the conclusion of the fixed rate period (the conversion date) for the Series F Preferred Stock, the dividend for such series will accrue at a rate equal to the 3-Month CME Term SOFR plus 0.26161%, plus a spread of 4.697 % per annum, resetting

quarterly in accordance with the certificate of designations for such series and the LIBOR Act.

The depositary shares underlying our preferred stock accrue dividends on the $25.00 liquidation preference per depositary share from the issuance date until they are redeemed in accordance with their terms.

The per annum dividend rates for the depositary shares underlying the Series C, D, E and F Preferred Stock represent the rates in effect as of December 31, 2025, and are reset quarterly.

The depositary shares underlying the Series G Preferred Stock accrue dividends at an initial annual fixed rate until the fixed-rate-reset conversion date, after which dividends on these depositary shares accrue on a fixed-rate-reset basis equal to the conversion rate plus a fixed spread.

The depositary shares underlying the Series H Preferred Stock accrue dividends at a fixed rate.

The Series C, D, E and F dividends accrue at a rate equal to the 3-Month CME Term SOFR plus 0.26161%, plus spreads of 5.111 %, 4.332 %, 4.993 % and 4.697 %, respectively, per annum, resetting quarterly in accordance with the certificate of designations for such series and the Adjustable Interest Rate (LIBOR) Act of 2021 (the "LIBOR Act").

At the conclusion of the fixed rate period for the Series G Preferred Stock, the dividend will accrue at a floating rate equal to the 5-Year US Treasury rate plus a spread of 4.39 % per annum and will reset in accordance with the certificate of designations for such series.

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We are authorized by our Board to enter into agreements with sales agents to publicly offer and sell shares of our common stock in privately negotiated and/or at-the-market transactions from time-to-time up to a maximum aggregate offering price of our common stock.

The following table includes a summary of shares of our common stock sold under the sales agreements during fiscal years 2024, 2023 and 2022 (in millions, except for per share data).

The following table includes a summary of shares of our common stock issued under the sales agreements for fiscal years 2025, 2024 and 2023 (in millions, except for per share data).

As of December 31, 2025, shares of our common stock with an aggregate offering price of $ 0.7 billion remained authorized for issuance under this program through December 31, 2026.

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Common Stock Repurchase Program

We are authorized by our Board to repurchase shares of our common stock in open market, through privately negotiated transactions, or pursuant to a trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.

The following table includes a summary of shares of our common stock repurchased during fiscal year 2022 (in millions, except for per share data).

We are authorized by our Board to repurchase shares of our common stock in the open market, through privately negotiated transactions, or pursuant to a trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.

During fiscal years 2023, 2024 and 2025, we did not repurchase shares under this program.

As of December 31, 2024, shares of our common stock with an aggregate repurchase price of $ 1.0 billion remained authorized for repurchase through December 31, 2026.

Common Stock Repurchases Average Price Paid Per Share 1

Shares Net Cost

Fiscal Year 2022 $ 10.78 4.7 $ 51

As of December 31, 2025, $ 1.0 billion remained authorized to repurchase shares of our common stock through December 31, 2026.

Distributions to Stockholders

The following table summarizes dividends declared during fiscal years 2025, 2024 and 2023 (in millions, except per share amounts):

Dividends Declared Dividends Declared Per Share 1

Fiscal Year Dividends Declared Dividends Declared Per Share 1

Series C Preferred Stock 2

Fiscal year 2024 $ 35 $ 2.672820

Fiscal year 2023 $ 34 $ 2.660390

Fiscal year 2022 $ 25 $ 1.886880

Series D Preferred Stock

Fiscal year 2024 $ 21 $ 2.278248

Fiscal year 2023 $ 16 $ 1.718750

Fiscal year 2022 $ 16 $ 1.718750

Series E Preferred Stock

Fiscal year 2024 $ 30 $ 1.851370

Fiscal year 2023 $ 26 $ 1.625000

Fiscal year 2022 $ 26 $ 1.625000

Series F Preferred Stock

Fiscal year 2024 $ 35 $ 1.531250

Fiscal year 2023 $ 35 $ 1.531250

Fiscal year 2022 $ 35 $ 1.531250

Series G Preferred Stock

Fiscal year 2024 $ 12 $ 1.937520

Fiscal year 2023 $ 12 $ 1.937520

Fiscal year 2022 $ 4 $ 0.651220

Fiscal year 2024 $ 1,137 $ 1.440000

Fiscal year 2023 $ 896 $ 1.440000

Fiscal year 2022 $ 775 $ 1.440000

2025 $ 32 $ 2.424890

Preferred stock per share amounts are per depositary share.

The following table summarizes our tax characterization of distributions to stockholders for fiscal years 2024, 2023 and 2022.

Distributions included in the table below are based on the fiscal tax year for which the distribution is attributed to for stockholders in accordance with rules promulgated under the Internal Revenue Code:

Tax Characterization 1

Tax Year Distribution Rate 1

Ordinary Dividend Per Share Qualified Dividends Capital Gain Dividend Per Share Non-Dividend Distributions Section 199A Dividend

Series C Preferred Stock

Fiscal year 2024 $ 2.721090 $ 2.721090 $ — $ — $ — $ 2.721090

Fiscal year 2023 $ 2.546340 $ 2.546340 $ — $ — $ — $ 2.546340

Fiscal year 2022 $ 1.750000 $ 1.750000 $ — $ — $ — $ 1.750000

2024 $ 35 $ 2.672820

2023 $ 34 $ 2.660390

Series D Preferred Stock 2

Fiscal year 2024 $ 2.117545 $ 2.117545 $ — $ — $ — $ 2.117545

Fiscal year 2023 $ 1.718750 $ 1.718750 $ — $ — $ — $ 1.718750

Fiscal year 2022 $ 1.718750 $ 1.718750 $ — $ — $ — $ 1.718750

2025 $ 21 $ 2.227430

2024 $ 21 $ 2.278248

2023 $ 16 $ 1.718750

Series E Preferred Stock 2

Fiscal year 2024 $ 1.625000 $ 1.625000 $ — $ — $ — $ 1.625000

Fiscal year 2023 $ 1.625000 $ 1.625000 $ — $ — $ — $ 1.625000

Fiscal year 2022 $ 1.625000 $ 1.625000 $ — $ — $ — $ 1.625000

2025 $ 39 $ 2.394980

2024 $ 30 $ 1.851370

2023 $ 26 $ 1.625000

Series F Preferred Stock 2

Fiscal year 2024 $ 1.531250 $ 1.531250 $ — $ — $ — $ 1.531250

Fiscal year 2023 $ 1.531250 $ 1.531250 $ — $ — $ — $ 1.531250

Fiscal year 2022 $ 1.531250 $ 1.531250 $ — $ — $ — $ 1.531250

2025 $ 49 $ 2.123633

2024 $ 35 $ 1.531250

2023 $ 35 $ 1.531250

Series G Preferred Stock 2

Fiscal year 2024 $ 1.937520 $ 1.937520 $ — $ — $ — $ 1.937520

Fiscal year 2023 $ 2.104360 $ 2.104360 $ — $ — $ — $ 2.104360

Fiscal year 2024 $ 1.440000 $ 1.440000 $ — $ — $ — $ 1.440000

Fiscal year 2023 $ 1.560000 $ 1.560000 $ — $ — $ — $ 1.560000

Fiscal year 2022 $ 1.440000 $ 0.669420 $ — $ — $ 0.770580 $ 0.669420

2025 $ 12 $ 1.937520

2024 $ 12 $ 1.937520

2023 $ 12 $ 1.937520

Series H Preferred Stock 2

2025 $ 10 $ 0.759550

Common Stock 3

2025 $ 1,479 $ 1.440000

2024 $ 1,137 $ 1.440000

2023 $ 896 $ 1.440000

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Preferred stock per share amounts are per depositary share.

For the years ended December 31, 2025, 2024, and 2023, 100 % of the preferred stock dividends per share paid during each such calendar year were taxable as ordinary income.

For the years ended December 31, 2025 and 2024, 100% of common stock dividends declared in each such calendar year, totaling $ 1.44 per share, were taxable as ordinary income.

For the year ended December 31, 2023, 100% of common stock dividends paid in such calendar year, totaling $ 1.44 per share, and the $ 0.12 per share declared in December 2022 that was paid in January 2023, or $ 1.56 in total per share, were taxable as ordinary income.

Accumulated Other Comprehensive Income (Loss)

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227 ( 74 ) 92

Net loss amounts for available-for-sale securities reclassified from accumulated OCI to realized gain (loss) on sale of investment securities, net — 63 42

Net (gain) loss amounts for available-for-sale securities reclassified from accumulated OCI to realized gain (loss) on sale of investment securities, net 41 — 63

Ending Balance $ ( 323 ) $ ( 591 ) $ ( 517 )

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The CODM assesses performance using comprehensive income (loss), as reported on the consolidated statement of comprehensive income (loss).

Comprehensive income (loss) is a key determinant of the Company’s economic return, calculated as the change in tangible stockholders’ equity attributable to common stockholders plus common stock dividends declared, divided by the prior period’s tangible stockholders’ equity attributable to common stockholders.

Comprehensive income (loss) is a key determinant of the Company's economic return, calculated as the change in tangible stockholders' equity attributable to common stockholders plus common stock dividends declared, divided by the prior period's tangible stockholders' equity attributable to common stockholders, each computed on a per common share basis.

This measure is used to monitor actual results, benchmark performance against peers, and inform management's compensation.

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Stock-Based Compensation

During fiscal years 2024, 2023 and 2022, we granted RSU awards to employees with a grant date fair value of $ 10 million, $ 11 million and $ 8 million, respectively, which generally vest annually over a three-year period, and we granted RSU awards to independent directors of $ 1.2 million, $ 1.2 million and $ 1.0 million, respectively, which vest at the end of a one-year period from grant date.

We also granted PSU awards to employees which generally vest at the end of a three-year period provided that specified performance criteria are met.

During fiscal years 2025, 2024 and 2023, we granted RSU awards to employees with a total grant date fair value of $ 11 million, $ 10 million and $ 11 million, respectively, which generally vest annually over a three-year period, and to independent directors with a total grant date fair value of $ 1.1 million, $ 1.2 million and $ 1.2 million, respectively, which vest at the end of a one-year period from grant date.

During the same periods, we also granted PSU awards to employees, which vest at the end of a three-year period provided that specified performance criteria are met.

The performance criteria are based on a formula tied to our achievement of long-term economic returns consisting of the change in tangible net book value and dividends paid per common share on an absolute basis and relative to a select group of our peers.

The fair value of the PSU awards granted during fiscal years 2024, 2023 and 2022 as of the grant date was $ 10 million, $ 10 million and $ 11 million, respectively, assuming the target levels of performance are achieved.

The grant-date fair value of PSU awards totaled $ 10 million for each of fiscal years 2025, 2024 and 2023, assuming the target levels of performance are achieved.

The actual value of the awards will vary within a range of 0% to 200% of the target based on the actual performance achieved relative to the targets.

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As of December 31, 2025, 1.4 million of deferred awards, including accrued dividend equivalents, were outstanding.

During fiscal years 2024, 2023 and 2022, we recognized total compensation expense of $ 23.5 million, $ 15.0 million and $ 11.6 million, respectively, for stock-based awards to employees, and we recognized other operating expense of $ 1.2 million, $ 1.1 million and $ 1.0 million, respectively, for stock-based awards to independent directors.

Compensation expense for PSU awards is based on our estimate of the probability that the performance criteria for PSU awards will be achieved and, if applicable, includes a cumulative effect adjustment for changes in our estimate from the prior year period.

As of December 31, 2024, we estimate that 75.5 % of target for PSU awards granted in fiscal year 2022 will vest based on actual performance achieved through the end of the performance measurement period and that 115 % and 100 % of target will vest for PSU awards granted in fiscal years 2023 and 2024, respectively, based on our estimate of the probability that the performance criteria for these awards will be achieved.

During fiscal years 2025, 2024 and 2023, we recognized total compensation expense of $ 37.1 million, $ 23.5 million and $ 15.0 million, respectively, for stock-based awards to employees, and other operating expense of $ 1.1 million, $ 1.2 million and $ 1.1 million, respectively, for awards to independent directors.

Compensation expense for PSU awards is based on our estimate of the probability that the applicable performance criteria will be achieved and includes cumulative effect adjustments for changes in such estimates.

As of December 31, 2025, we estimate that PSU awards granted in fiscal year 2023 will vest at 156.9 % of target based on actual performance achieved through the end of the performance period, and that PSU awards granted in fiscal years 2024 and 2025 will vest at 140 % and 100 % of target, respectively, based on our current probability assessments.

As of December 31, 2025, we had $ 10 million of unrecognized expense related to stock-based awards that we expect to recognize over a weighted average period of 1.4 years.

The following tables summarizes awards under our 2016 Equity Plan for fiscal years 2024, 2023 and 2022:

The following tables summarize awards under our 2016 Equity Plan for fiscal years 2025, 2024 and 2023:

RSU Awards RSU Awards 1

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Vested ( 703,557 ) $ 12.28 $ 9.88

( 4,312 ) $ 13.43 $ —

Unvested balance as of December 31, 2023 2,044,081 $ 9.79 $ —

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________________________________

There were no forfeitures of awards during the fiscal years 2023 and 2024.

There were no forfeitures of awards during the periods presented.

Accrued RSU award dividend equivalents have a weighted average grant date fair value of $0.

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402,368 $ — $ —

Performance adjustment - March 2021 base grant 3

( 210,425 ) $ 15.96 $ —

Unvested balance as of December 31, 2022 4

Performance adjustment - accrued PSU dividend equivalents 3

( 87,375 ) $ — $ —

( 699,128 ) $ 14.18 $ 11.48

Unvested balance as of December 31, 2023 2,736,855 $ 10.03 $ —

1,058,466 $ 9.58 $ —

Accrued PSU dividend equivalents

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Performance adjustment - March 2022 base grant 3

( 142,273 ) $ 12.99 $ —

Performance adjustment - accrued PSU dividend equivalents 3

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281,225 $ — $ —

Other miscellaneous adjustments ( 94,048 ) $ 8.33 $ —

( 947,182 ) $ 8.56 $ 10.49

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_______________________

There were no forfeitures of awards during the periods presented.

Accrued PSU award dividend equivalents have a weighted average grant date fair value of $0.

Performance adjustments reflect adjustments for actual performance achieved relative to target, measured at the end of the performance period.

The unvested balance as of December 31, 2024 assumes actual performance achievement of 75.5 % of target for PSU awards granted in fiscal year 2022 that are scheduled to vest in fiscal year 2024 and target levels of performance (100%) for PSU awards granted in fiscal years 2023 and 2024.

The actual number of PSUs that will vest for the 2023 and 2024 PSU awards will vary within a range of 0% to 200% of the target based on the actual performance achieved relative to the targets.

As of December 31, 2024, we estimate that 115.0 % and 100.0 % of the 2023 and 2024 PSU awards, respectively, will vest based on our estimate of the probability that the performance criteria for the awards will be achieved.

Performance adjustments reflect actual performance achieved relative to target, as measured at the end of the three-year performance period on December 31, for awards scheduled to vest in the following year.

All other unvested awards at each period end are assumed to achieve target performance (100%).

For fiscal years 2025, 2024 and 2023, performance adjustments reflect actual performance of 156.9 %, 75.5 % and 66.4 %, respectively, for awards scheduled to vest in 2026, 2025, and 2024, respectively.

We did not incur an income tax liability for the years ended December 31, 2024 and 2023 and we do not expect to incur an income tax liability for the year ended December 31, 2025.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data