GLEN ALLEN, Va., July 20, 2026–(BUSINESS WIRE)–Dynex Capital, Inc. (NYSE: DX; “Dynex” or the “Company”), a REIT with a long track record of generating dividends from high-quality mortgage assets, reported its second quarter financial results today. Management will host a call today at 10:00 a.m. Eastern Time to discuss the results and business outlook. Details to access the call can be found below under “Earnings Conference Call.”
Second Quarter 2026 Financial Highlights
Total economic return of $0.81 per common share, or 6.4% of beginning book value
Book value per common share of $12.90 as of June 30, 2026, an increase of $0.30 from $12.60 as of March 31, 2026
Comprehensive income of $0.80 per common share and net income of $0.80 per common share
Dividends declared of $0.51 per common share
Liquidity of $1.6 billion of cash and unpledged securities, representing 51% of total equity, as of June 30, 2026
Leverage including to-be-announced (“TBA”) securities at cost was 8.1 times shareholders’ equity as of June 30, 2026, compared to 8.6 times shareholders’ equity as of March 31, 2026
Second Quarter 2026 Portfolio and Capital Highlights
Total investment portfolio of $27.6 billion, an increase of 11% relative to March 31, 2026 driven by $2.8 billion of MBS purchases:
Agency RMBS portfolio, including TBAs, increased approximately 11% to $26.1 billion
Agency CMBS portfolio increased approximately 11% to $1.4 billion
99.99% of investment portfolio is in highly liquid Agency securities
Agency RMBS represents 95% of total portfolio; Agency CMBS represents 5% of total portfolio
Raised $391 million of common equity, net of commissions, representing approximately 30 million shares, through the Company’s at-the-market (“ATM”) program
“The second quarter of 2026 reflected continued progress in executing our disciplined raise-and-deploy strategy,” said Smriti Laxman Popenoe, Co-Chief Executive Officer and President. “In an attractive return environment, we raised $391 million of capital during the quarter and deployed it into Agency MBS opportunities. Our 6.4% total economic return demonstrates our ability to pair growth with strong performance. As the platform scales, a powerful flywheel is enhancing efficiency, strengthening resilience, broadening our access to capital, and expanding our opportunity set, supporting durable risk-adjusted returns for shareholders over time.”
As previously announced, the Company’s conference call to discuss these results is today at 10:00 a.m. Eastern Time and may be accessed via telephone by dialing (800) 330-6710 and providing the Conference Code 2120385 or by live audio webcast by clicking the “Webcast” button on the Investors page of the Company’s website (www.dynexcapital.com/investors), which also includes a slide presentation. To listen to the live conference call via telephone, please dial in at least 10 minutes before the call begins. As an alternative, participants can click here to enter their details and be connected to join the conference. The link becomes active 15 minutes prior to the scheduled start time. A full replay of the conference call will be available on the Company’s website shortly after the conclusion of the live presentation.
Summary of Second Quarter 2026 Results
The Company’s total economic return for the second quarter of 2026 of $0.81 per common share was comprised of an increase in book value of $0.30 per common share and dividends declared of $0.51 per common share. The increase in book value per common share was primarily comprised of a net gain of $102 million on the Company’s investment portfolio, net of hedges. The fair value of the Company’s Agency MBS benefited from spread tightening late in the second quarter. Although higher interest rates reduced asset valuations during the second quarter, the Company’s hedging portfolio effectively mitigated much of this impact, supporting the overall increase in book value. The Company grew its capital base by $391 million, using the net proceeds to opportunistically add $2.8 billion of Agency MBS. As a result, the total investment portfolio grew 11% to $27.6 billion compared to $24.8 billion as of March 31, 2026. Leverage including TBAs at their implied cost decreased to 8.1 times equity primarily due to the favorable performance of the Company’s portfolio.
Interest income increased compared to the first quarter of 2026, driven by the Company’s continued deployment of capital into Agency MBS purchases. Operating expenses decreased by $5 million quarter over quarter, driven by the absence of one time compensation and personnel related costs recognized during the first quarter of 2026.
The following tables summarize the changes in the Company’s financial position during the second quarter of 2026:
|
($s in thousands except per share data) |
Net Changes in Fair Value |
Components of Comprehensive Income |
Common Equity Rollforward |
|||||||||
|
Balance as of March 31, 2026 (1) |
$ |
2,609,770 |
||||||||||
|
Net interest income |
$ |
93,783 |
||||||||||
|
Net periodic interest from interest rate swaps |
542 |
|||||||||||
|
Operating expenses |
(16,213 |
) |
||||||||||
|
Preferred stock dividends |
(2,650 |
) |
||||||||||
|
Changes in fair value: |
||||||||||||
|
MBS and other |
$ |
(26,487 |
) |
|||||||||
|
TBAs |
(19,229 |
) |
||||||||||
|
U.S. Treasury futures |
16,568 |
|||||||||||
|
Interest rate swaps |
135,239 |
|||||||||||
|
Interest rate swaptions |
(4,275 |
) |
||||||||||
|
Total net change in fair value |
101,816 |
|||||||||||
|
Comprehensive income to common shareholders |
177,278 |
|||||||||||
|
Capital transactions: |
||||||||||||
|
Net proceeds from stock issuance (2) |
392,295 |
|||||||||||
|
Common dividends declared |
(115,776 |
) |
||||||||||
|
Balance as of June 30, 2026 (1) |
$ 3,063,567 |
|||||||||||
($s in thousands except per share data)
Components of Comprehensive Income
Balance as of March 31, 2026 (1)
Net periodic interest from interest rate swaps
Total net change in fair value
Comprehensive income to common shareholders
Net proceeds from stock issuance (2)
Balance as of June 30, 2026 (1)
|
(1) |
Amounts represent total shareholders’ equity less the aggregate liquidation preference of the Company’s preferred stock of $111,500. |
|
|
(2) |
Net proceeds from stock issuances includes approximately $391 million from ATM issuances and approximately $1.0 million from amortization of share-based compensation, net of grants. |
|
Amounts represent total shareholders’ equity less the aggregate liquidation preference of the Company’s preferred stock of $111,500.
Net proceeds from stock issuances includes approximately $391 million from ATM issuances and approximately $1.0 million from amortization of share-based compensation, net of grants.
Investment Portfolio and Financing
The following table provides detail on the Company’s MBS investments, including TBA securities, as of the periods indicated:
|
June 30, 2026 |
March 31, 2026 |
|||||||||||||||||||||||
|
($ in thousands) |
Amortized Cost/Implied Cost Basis |
Unrealized Gain (Loss) |
Fair Value |
% of Portfolio |
Amortized Cost/Implied Cost Basis |
Unrealized Gain (Loss) |
Fair Value |
% of Portfolio |
||||||||||||||||
|
Fixed rate Agency RMBS: |
||||||||||||||||||||||||
|
2.0% coupon |
$ |
1,467,013 |
$ |
(125,450 |
) |
$ |
1,341,563 |
5 % |
$ |
1,164,966 |
$ |
(123,207 |
) |
$ |
1,041,759 |
4 % |
||||||||
|
2.5% coupon |
728,917 |
(91,725 |
) |
637,192 |
2 % |
646,466 |
(91,863 |
) |
554,603 |
2 % |
||||||||||||||
|
4.0% coupon |
1,065,039 |
(7,546 |
) |
1,057,493 |
4 % |
286,876 |
(14,047 |
) |
272,829 |
1 % |
||||||||||||||
|
4.5% coupon (1) |
2,147,675 |
(1,055 |
) |
2,146,620 |
8 % |
1,636,907 |
(340 |
) |
1,636,567 |
7 % |
||||||||||||||
|
5.0% coupon |
7,969,870 |
(27,255 |
) |
7,942,615 |
29 % |
7,434,011 |
(13,877 |
) |
7,420,134 |
30 % |
||||||||||||||
|
5.5% coupon |
9,028,071 |
(545 |
) |
9,027,526 |
33 % |
9,145,191 |
7,351 |
9,152,542 |
37 % |
|||||||||||||||
|
6.0% coupon |
1,459,407 |
1,280 |
1,460,687 |
5 % |
1,537,251 |
1,529 |
1,538,780 |
6 % |
||||||||||||||||
|
TBA 4.0% |
11,259 |
(28 |
) |
11,231 |
— % |
— |
— |
— |
— % |
|||||||||||||||
|
TBA 4.5% (2) |
1,039,010 |
5,571 |
1,044,581 |
4 % |
1,230,544 |
(2,970 |
) |
1,227,574 |
5 % |
|||||||||||||||
|
TBA 5.0% |
856,769 |
2,181 |
858,950 |
3 % |
600,548 |
(6,075 |
) |
594,473 |
3 % |
|||||||||||||||
|
TBA 5.5% |
602,276 |
255 |
602,531 |
2 % |
— |
— |
— |
— % |
||||||||||||||||
|
Total Agency RMBS |
$ |
26,375,306 |
$ |
(244,317 |
) |
$ |
26,130,989 |
95 % |
$ |
23,682,760 |
$ |
(243,499 |
) |
$ |
23,439,261 |
95 % |
||||||||
|
Agency CMBS |
$ |
1,387,141 |
$ |
(9,978 |
) |
$ |
1,377,163 |
5 % |
$ |
1,246,548 |
$ |
(1,747 |
) |
$ |
1,244,801 |
5 % |
||||||||
|
CMBS IO |
75,970 |
(632 |
) |
75,338 |
— % |
81,484 |
(242 |
) |
81,242 |
— % |
||||||||||||||
|
Total |
$ |
27,838,417 |
$ |
(254,927 |
) |
$ |
27,583,490 |
100 % |
$ |
25,010,792 |
$ |
(245,488 |
) |
$ |
24,765,304 |
100 % |
||||||||
|
(1) Includes a par value of $9 million of 4.5% 15-year Agency RMBS as of June 30, 2026 and March 31, 2026. |
||||||||||||||||||||||||
|
(2) Includes notional amount of $440 million of 4.5% 15-year TBA securities as of June 30, 2026 and $540 million as of March 31, 2026. |
||||||||||||||||||||||||
Amortized Cost/Implied Cost Basis
Amortized Cost/Implied Cost Basis
(1) Includes a par value of $9 million of 4.5% 15-year Agency RMBS as of June 30, 2026 and March 31, 2026.
(2) Includes notional amount of $440 million of 4.5% 15-year TBA securities as of June 30, 2026 and $540 million as of March 31, 2026.
The following table provides detail on the Company’s repurchase agreement borrowings outstanding as of the dates indicated:
|
June 30, 2026 |
March 31, 2026 |
|||||||||||||
|
Remaining Term to Maturity |
Balance |
Weighted Average Rate |
WAVG Original Term to Maturity |
Balance |
Weighted Average Rate |
WAVG Original Term to Maturity |
||||||||
|
($s in thousands) |
||||||||||||||
|
Less than 30 days |
$ |
9,949,865 |
3.78 % |
76 |
$ |
8,026,127 |
3.81 % |
77 |
||||||
|
30 to 90 days |
9,852,555 |
3.78 % |
91 |
12,451,246 |
3.80 % |
95 |
||||||||
|
91 to 180 days |
2,842,322 |
3.79 % |
181 |
568,084 |
3.75 % |
173 |
||||||||
|
Total |
$ |
22,644,742 |
3.79 % |
96 |
$ |
21,045,457 |
3.80 % |
90 |
||||||
Remaining Term to Maturity
WAVG Original Term to Maturity
WAVG Original Term to Maturity
The following table provides details on the performance of the Company’s MBS, net of financing for the second quarter of 2026 compared to the prior quarter:
|
Three Months Ended |
|||||||||||||||||||
|
June 30, 2026 |
March 31, 2026 |
||||||||||||||||||
|
($s in thousands) |
Interest Income/Expense |
Average Balance (1)(2) |
Effective Yield/ Financing Cost(3)(4) |
Interest Income/Expense |
Average Balance (1)(2) |
Effective Yield/ Financing Cost(3)(4) |
|||||||||||||
|
Agency RMBS |
$ |
280,970 |
$ |
22,581,412 |
4.98 |
% |
$ |
236,350 |
$ |
18,926,563 |
5.00 |
% |
|||||||
|
Agency CMBS |
13,522 |
1,254,886 |
4.26 |
% |
12,530 |
1,177,399 |
4.26 |
% |
|||||||||||
|
CMBS IO(5) |
1,748 |
78,595 |
8.70 |
% |
1,781 |
84,531 |
8.23 |
% |
|||||||||||
|
Other investments |
6 |
445 |
3.89 |
% |
6 |
461 |
3.98 |
% |
|||||||||||
|
Subtotal |
296,246 |
23,915,338 |
4.95 |
% |
250,667 |
20,188,954 |
4.97 |
% |
|||||||||||
|
Cash equivalents |
6,505 |
6,723 |
|||||||||||||||||
|
Total interest income |
$ |
302,751 |
$ |
257,390 |
|||||||||||||||
|
Repurchase agreement financing |
(208,968 |
) |
21,803,737 |
(3.79 |
)% |
(178,136 |
) |
18,470,997 |
(3.86 |
)% |
|||||||||
|
Net interest income/net interest spread |
$ |
93,783 |
1.16 |
% |
$ |
79,254 |
1.11 |
% |
|||||||||||
|
Net periodic interest from interest rate swaps |
542 |
0.01 |
% |
1,698 |
0.04 |
% |
|||||||||||||
|
Economic net interest income (6) |
$ |
94,325 |
1.17 |
% |
$ |
80,952 |
1.15 |
% |
|||||||||||
|
*Table Note: Data may not foot due to rounding. |
|||||||||||||||||||
Repurchase agreement financing
Net interest income/net interest spread
Net periodic interest from interest rate swaps
Economic net interest income (6)
*Table Note: Data may not foot due to rounding.
|
(1) |
Average balance for assets is calculated as a simple average of the daily amortized cost and excludes securities pending settlement if applicable. |
|
|
(2) |
Average balance for liabilities is calculated as a simple average of the daily repurchase agreement borrowings outstanding during the period. |
|
|
(3) |
Effective yield is calculated by dividing annualized interest income by the average balance of asset type outstanding during the reporting period. Unscheduled adjustments to premium/discount amortization/accretion, such as for prepayment compensation, are not annualized in this calculation. |
|
|
(4) |
Financing cost is calculated by dividing annualized interest expense by the total average balance of borrowings outstanding during the period with an assumption of 360 days in a year. |
|
|
(5) |
CMBS IO (“Interest only”) includes Agency and non-Agency issued securities. |
|
|
(6) |
Represents a non-GAAP measure. See “Non-GAAP Financial Measures” below for a reconciliation to the most comparable GAAP financial measure. |
|
Average balance for assets is calculated as a simple average of the daily amortized cost and excludes securities pending settlement if applicable.
Average balance for liabilities is calculated as a simple average of the daily repurchase agreement borrowings outstanding during the period.
Effective yield is calculated by dividing annualized interest income by the average balance of asset type outstanding during the reporting period. Unscheduled adjustments to premium/discount amortization/accretion, such as for prepayment compensation, are not annualized in this calculation.
Financing cost is calculated by dividing annualized interest expense by the total average balance of borrowings outstanding during the period with an assumption of 360 days in a year.
CMBS IO (“Interest only”) includes Agency and non-Agency issued securities.
Represents a non-GAAP measure. See “Non-GAAP Financial Measures” below for a reconciliation to the most comparable GAAP financial measure.
The following tables provide details on the Company’s interest rate hedging portfolio as of the dates indicated:
|
June 30, 2026 |
March 31, 2026 |
|||||||||||||
|
Derivative Type |
Notional Amount |
WAVG Fixed Pay Rate |
Notional Amount |
WAVG Fixed Pay Rate |
||||||||||
|
($s in thousands) |
||||||||||||||
|
5-year U.S. Treasury futures |
$ |
(750,000 |
) |
n/a |
$ |
— |
n/a |
|||||||
|
10-year U.S. Treasury futures |
(2,516,500 |
) |
n/a |
(1,917,500 |
) |
n/a |
||||||||
|
30-year U.S. Treasury futures |
(991,800 |
) |
n/a |
(1,231,600 |
) |
n/a |
||||||||
|
$ |
(4,258,300 |
) |
$ |
(3,149,100 |
) |
|||||||||
|
3-5 year interest rate swaps |
$ |
4,375,000 |
3.45 |
% |
$ |
4,400,000 |
3.43 |
% |
||||||
|
5-7 year interest rate swaps |
4,060,000 |
3.65 |
% |
4,060,000 |
3.65 |
% |
||||||||
|
7-10 year interest rate swaps |
5,065,000 |
3.86 |
% |
4,120,000 |
3.85 |
% |
||||||||
|
15-20 year interest rate swaps |
590,000 |
4.40 |
% |
— |
— |
% |
||||||||
|
$ |
14,090,000 |
$ |
12,580,000 |
|||||||||||
5-year U.S. Treasury futures
10-year U.S. Treasury futures
30-year U.S. Treasury futures
3-5 year interest rate swaps
5-7 year interest rate swaps
7-10 year interest rate swaps
15-20 year interest rate swaps
|
June 30, 2026 |
March 31, 2026 |
|||||||||||
|
($s in thousands) |
Notional Amount |
Average Fixed Receive Rate |
Notional Amount |
Average Fixed Receive Rate |
||||||||
|
Interest rate swaptions |
$ |
… |
||||||||||
Average Fixed Receive Rate
Average Fixed Receive Rate