Dynex Capital reported a significant decline in book value for the third quarter of 2026, falling to $10.91 per share from $12.90 in the prior quarter. The decline was primarily driven by wider Agency mortgage-backed securities (MBS) spreads, which resulted in net losses on asset valuations that were only partially mitigated by the company's interest rate hedging portfolio. Earnings available for distribution (EAD) of $0.38 per share slightly missed the analyst estimate of $0.39.
Key Highlights
- Book value per common share decreased by $1.99 sequentially to $10.91 as of September 30, 2026.
- Total economic return was negative $1.48 per common share, representing a loss of 11.5% of beginning book value.
- Leverage including TBA securities increased to 9.0 times shareholders' equity, up from 8.1 times in the previous quarter.
- The company raised $384 million in net capital, including $268 million through common equity ATM issuances and $116 million from a new preferred stock series.
- Total investment portfolio grew 3% to $28.3 billion, with 99.99% of holdings concentrated in liquid Agency securities.