Q1 2026 Dynex Capital Inc Earnings Call Transcript
Key Points
- Dynex Capital Inc (DX) reported a 5.6% increase in book value per share since the end of the quarter, indicating strong performance.
- The company successfully grew its total capital base by 18% during the quarter, deploying funds as MBS spreads widened.
- Net interest income increased from $0.28 to $0.40 per share, driven by declining financing costs.
- Dynex Capital Inc (DX) maintained a strong liquidity position with $1.3 billion in cash and unencumbered securities, representing over 46% of total equity.
- The company strategically reduced exposure to the most callable agency MBS, enhancing portfolio resilience and potential returns.
- Economic return for the quarter was negative 2.5%, with a decrease in book value of $0.85 per share.
- Leverage increased to 8.6 times total equity, which could pose risks if market conditions worsen.
- General and administrative expenses rose quarter-over-quarter due to one-time items, impacting overall profitability.
- The geopolitical situation, particularly the war in Iran, contributed to increased market volatility, affecting performance.
- The company faces challenges in achieving tighter mortgage spreads due to unpredictable policy and market conditions.
(audio in progress) Vice President of Investor Relations. Please go ahead.
Thank you, operator, and good morning, everyone. The press release associated with today's call was issued and filed with the SEC this morning, April 20, 2026. You may view the press release on the homepage of the Dynex website at dynexcapital.com, as well as on the SEC's website at sec.gov.
Before we begin, we wish to remind you that this conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words believe, expect, forecast, anticipate, estimate, project, plan, and similar expressions identify forward-looking statements that are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified.
The company's actual results and timing of certain events could differ considerably from those projected and/or contemplated by those forward-looking statements as a result of unforeseen external factors or risks.
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