Dynex Capital(NYSE) DX

Dynex helps provide funding for American homes and commercial properties. The company buys bundles of mortgage loans that pay regular interest. This income is then used to pay dividends to its shareholders.

What’s in the Investment Portfolio?

• Agency RMBS: Residential mortgage-backed securities guaranteed by U.S. government-sponsored entities like Fannie Mae or Freddie Mac.
• Agency CMBS: Commercial mortgage-backed securities backed by loans on multifamily housing properties with government-sponsored payment guarantees.
• CMBS Interest-Only: Financial assets that pay out only the interest from a pool of commercial mortgages rather than the underlying loan principal.
• Non-Agency MBS: Mortgage-backed securities that do not have payment guarantees from a government-sponsored agency.

Scaling Up with New Capital

• Raised $442 million during the first quarter of 2026 by selling 32.1 million common shares through an at-the-market program.
• Added more than $7 billion in Agency RMBS to increase the size of the investment portfolio during early 2026.
• Secured approximately $103 million in net proceeds from the sale of 8 million common shares after March 31, 2026.
• Reduced the amount of to-be-announced (TBA) securities—contracts to buy mortgage bundles in the future—by $1.3 billion in the first quarter of 2026.

Efficiency with a Small Team

Dynex manages a $24.3 billion asset portfolio with a small team of only 22 full-time employees. The company uses high levels of borrowing and interest rate hedges to navigate volatile market cycles.

The Quarterly Scorecard

• Interest income reached $257.4 million in Q1 2026, up 170.8% year-over-year.
• Net loss worsened to $80.4 million in Q1 2026 from a loss of $3.1 million in Q1 2025.
• Operating cash flow hit $69.8 million in Q1 2026, up 997.7% from $6.4 million in Q1 2025.
• Repurchase agreement borrowings rose to $21 billion by March 31, 2026, to fund new mortgage security purchases.
• Common book value per share decreased to $12.60 on March 31, 2026, from $13.45 at the end of 2025.

The Final Word

Dynex has expanded its portfolio of government-guaranteed mortgage assets while raising significant new capital through share sales. Its strategy relies on managing the gap between interest income and borrowing costs in a complex interest rate environment.