Dynex Capital, Inc.

For the second quarter ended June 30, 2026, Dynex reported book value per share of $12.90, up 2.4% from $12.60 at March 31. Total economic return was 6.4%, including $0.51 per share in common dividends and $0.30 per share from the increase in portfolio value. Net interest income rose to $0.42 per share from $0.40 in the prior quarter. The company raised $391 million of capital in the quarter, ended with adjusted leverage at 8.1% versus 8.6% last quarter, and held $1.6 billion of cash and unencumbered securities, representing over 51% of total equity. For the quarter-to-date update, management said book value as of Friday, July 17 was $12.67, and spreads were about 3 basis points wider. No next-quarter EPS or dividend guidance was given; management instead emphasized continuing to deploy capital into Agency MBS when spreads remain supportive and maintaining leverage generally in the 7.5% to 8.5% range. They also said the 2026 net Agency MBS supply forecast was lowered to $165 billion from $200 billion.

Smriti Popenoe framed the quarter as proof that Dynex’s strategy is working: grow the platform, keep liquidity high, and use Agency MBS to generate durable shareholder returns. She repeatedly emphasized a “virtuous flywheel” of performance, investor demand, accretive capital raising, and opportunistic deployment, and said the company is building scale and resilience for a more durable mortgage investment platform. Her tone was constructive and confident, but she also stressed macro caution, citing geopolitical conflict, technological change, and the need to invest in people, technology, and processes to protect capital.

Mike Sartori highlighted the core financial outcomes: book value per share of $12.90, up from $12.60; net interest income of $0.42 per share, up from $0.40; and total economic return of 6.4%. He attributed the book value improvement mainly to tighter spreads and accretive capital deployment. He also noted $391 million of capital raised in the quarter, adjusted leverage of 8.1%, and $1.6 billion of cash and unencumbered securities, which he said was over 51% of total equity and a key part of the risk management framework. On expenses, he said the company continues to track an expense ratio of 2% of total equity this year.

Analysts focused on book value quarter-to-date, mortgage spread expectations, leverage targets, AI-driven refinance risk, volatility, operating expenses, and curve positioning. Management said book value as of July 17 was $12.67 and spreads were about 3 basis points wider quarter to date; they also said spreads could settle in a 100 to 120 basis point range over time, helped by the GSE backstop. On leverage, management said 7.5% to 8.5% is a comfortable range, with flexibility to lean in during bouts of liquidity. They acknowledged AI could make refinancing faster and increase the importance of security selection, and said the specified pool market is becoming deeper and more liquid, while operating expenses are expected to stay around 2% of total equity for the full year.