DX · Dynex Capital, Inc.

Dynex Capital reported a challenging first quarter of 2026, with a net loss of $0.41 per share and a comprehensive loss of $0.42 per share, resulting in a total economic return of negative 2.5%. The primary driver was a $140 million net loss on the investment portfolio, net of hedges, attributed to widening mortgage spreads late in the quarter. This caused book value per share to decline to $12.60 from $13.45 at year-end 2025. Despite the losses, the company executed significant capital deployment, raising $442 million through at-the-market equity issuances and deploying $6.0 billion in net investment purchases, primarily into Agency MBS. This expansion increased adjusted leverage to 8.6 times equity, financed largely through repurchase agreement borrowings. Interest income rose to $257.4 million as capital was deployed, while repurchase agreement financing costs declined 33 basis points, benefiting from Federal Reserve rate cuts in 2025. Operating expenses included a $3.4 million increase in share-based compensation expense due to accelerated vesting conditions associated with the departure of the former chief financial officer. Management, led by Co-CEO Smriti Laxman Popenoe, emphasized disciplined execution and rigorous risk management, stating that current asset returns continue to support healthy long-term performance and that growing scale positions the company to deliver durable shareholder value. The company maintained its quarterly dividend at $0.51 per share.