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By Scott Kennedy, Produced with Colorado Wealth Management Fund Introduction DX remains a Hold with a risk rating of 3. Q2 came in as expected: A small BV beat (1.6%) and core earnings right on target. Strong capital raises and timely MBS purchases helped offset early-quarter volatility. ERTI is still close to covering the dividend, but any sustained shortfall could pressure payouts later in 2025. Dynex Capital Quarterly BV Fluctuation: Minor Outperformance (1.6% Variance). Core Earnings/EAD: Basically an ...

| UNITED STATES | | | --- | --- | | SECURITIES AND EXCHANGE COMMISSION | | | Washington, DC 20549 | | | FORM 10-Q | | | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ☒ | | | For the quarterly period ended June 30, 2025 | | | or | | | ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | | | Commission File Number: 001-09819 | | | DYNEX CAPITAL, INC. | | | (Exact name of registrant as specified in its charter) | | | Virginia | 5 ...

Pearl Gray is a proprietary investment fund and independent market research firm. We primarily focus on Fixed-Income and Preferred Shares. However, our Seeking Alpha readers can expect a cross-asset blend, extending to analysis of equity REITs, Investment Funds, and Banks.Kindly note that our published content is dispensed as Independent Analysis and Doesn't Constitute Financial Advice. For any content-related concerns, contact our Head of Research: Steve Booyens, CFA or leave a message in the comments sect ...

Dynex Capital(DX) published its second-quarter 2025 earnings on July 21, reporting an 8.3 debt-to-equity ratio, while quarter-end liquidity stood at $891 million, or 55% of total equity. Portfolio expansion accelerates Dynex Capital growthThe portfolio expanded, reaching $14 billion. This expansion -- over 50% above the prior year -- was funded by disciplined capital raises that boosted market capitalization to more than $1.5 billion as of June 30."This quarter, Dynex crossed another milestone. Our market c ...

Financial Data and Key Metrics Changes - The company's market capitalization as of June 30 is over $1,500,000,000, representing nearly 50% growth since June 2024 [8] - Net interest income continues to trend upwards as new investments with attractive yields are added to the portfolio [10] - The portfolio has grown to $14,000,000,000, which is 25% larger since the end of the first quarter and over 50% larger than the same time last year [12] Business Line Data and Key Metrics Changes - The company raised $560,000,000 of new capital this year, allowing it to continue raising capital at a premium to book value [11] - The portfolio's liquidity at quarter end was $891,000,000, or 55% of total equity, indicating a strong liquidity position [12] Market Data and Key Metrics Changes - Agency mortgage-backed securities (MBS) continue to offer attractive returns, with ROEs on newly acquired positions ranging from the mid-teens to low 20% [19] - Mortgages remain extremely cheap relative to corporate bonds, with a mixed technical picture in the medium term affecting spread tightening [20] Company Strategy and Development Direction - The company is focused on raising capital, deploying it into historically cheap investments, and managing its portfolio carefully through volatile periods [7] - A strategic increase in leverage from 7.4% to 8.3% was executed as the policy environment became more supportive [17] - The company is building a world-class operating platform by bringing several functions in-house to achieve scale and retain institutional knowledge [13] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of a proactive approach to navigating market volatility and uncertainty [16] - The current environment is viewed as highly favorable for long-term capital deployment, with wide agency MBS spreads allowing for historic returns [23] - Management expressed confidence in the company's positioning to capitalize on market dynamics and generate strong risk-adjusted returns [23] Other Important Information - The company has appointed Michael Angelo as the chief legal officer and corporate secretary, bringing relevant experience from various financial institutions [5] Q&A Session Summary Question: Can you talk about the leverage range you're targeting? - Management indicated that leverage has been flexed down when the risk environment does not warrant incremental risk, and they are currently at a level that reflects a return to normal [29][30] Question: What are the conditions that might require other investors to be more active in the mortgage-backed space? - Management noted that banks would likely return when they see actual Fed rate cuts, while money managers have been overweight mortgages relative to corporates [40][41] Question: What are your thoughts on swap spreads and their future? - Management stated that current swap spreads are attractive, providing a large margin of safety, and they expect to continue generating strong returns despite potential fluctuations [46][48] Question: How do you view the coupon allocation between pools versus TBAs? - Management explained that they are working into a larger pool position, which offers more certainty in cash flows and is expected to be as attractive as thirty-year RMBS [62][63] Question: Can you provide an overview of the returns on Agency CMBS relative to RMBS? - Management highlighted that Agency CMBS offers a stable economic return profile and is being considered for its compelling return potential in the current market [60][62]

Financial Data and Key Metrics Changes - The company's market capitalization as of June 30 is over $1.5 billion, representing nearly 50% growth since June 2024 [8] - Net interest income continues to trend upwards as new investments with attractive yields are added to the portfolio [10] - The portfolio has grown to $14 billion, a 25% increase since the end of the first quarter and over 50% larger than the same time last year [12] Business Line Data and Key Metrics Changes - The company raised $560 million of new capital this year, allowing it to continue raising capital at a premium to book value [11] - The investment portfolio grew by over $3 billion in the quarter, reflecting a strategic increase in leverage from 7.4% to 8.3% [16] Market Data and Key Metrics Changes - Agency mortgage-backed securities (MBS) continue to offer attractive liquidity, credit quality, and return potential, with ROEs on newly acquired positions ranging from the mid-teens to low 20% [18] - Mortgage spreads remain wide, and the net supply of Agency RMBS is low by historical standards, creating a medium-term headwind for spread tightening [19] Company Strategy and Development Direction - The company is focused on raising capital, deploying it into historically cheap investments, and managing its portfolio through volatile periods [7] - A long-term strategy to build a world-class operating platform includes bringing several functions in-house to enhance scale and organizational resilience [13] - The company aims to be the manager of choice for the agency mortgage market, leveraging its position as a significant player in the mortgage REIT community [42] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the current environment as highly favorable for long-term capital deployment, with wide agency MBS spreads supported by a technical backdrop [22] - The company is well-prepared to capitalize on market dynamics and generate strong risk-adjusted returns despite potential volatility [22] Other Important Information - The company has appointed Michael Angelo as the chief legal officer and corporate secretary, bringing relevant experience from various financial institutions [5] Q&A Session Summary Question: Can you talk about the leverage range you're targeting? - Management indicated that leverage has been flexed down when the risk environment does not warrant incremental risk, and they are currently at a level that reflects a return to normal [29][30] Question: What conditions might require other investors to be more active in the mortgage-backed space? - Management noted that banks would likely return when they see actual Fed rate cuts, while money managers have been active due to attractive mortgage valuations relative to corporates [38][40] Question: What is the current thinking behind the coupon allocation between pools versus TBAs? - Management explained that they are favoring a larger pool position due to the stable economic return profile and the ability to hedge effectively with interest rate swaps [56][62] Question: Any thoughts on adding longer duration as you go down in coupon on the hedge side? - Management confirmed that their hedges remain focused on the longer part of the curve, targeting a duration that is generally flat with the overall portfolio [72][74] Question: Any one-time items in the G&A expense line item? - Management indicated that the first half of the year tends to be higher due to annual meetings and compensation increases, but they expect expenses to trend down in the latter half of the year [76]

Second Quarter 2025 Earnings Presentation July 21, 2025 1 Safe Harbor Statement NOTE: This presentation contains certain statements that are not historical facts and that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Statements in this presentation addressing expectations, assumptions, beliefs, projections, estimates, future plans, strategies, and events, developments that we expect or anticipate will occur in the future, and future opera ...

Exhibit 99.1 PRESS RELEASE FOR IMMEDIATE RELEASE CONTACT: Alison Griffin July 21, 2025 (804) 217-5897 DYNEX CAPITAL, INC. ANNOUNCES SECOND QUARTER 2025 RESULTS GLEN ALLEN, Va. -- Dynex Capital, Inc. ("Dynex" or the "Company") (NYSE: DX) reported its second quarter 2025 financial results today. Management will host a call today at 10:00 a.m. Eastern Time to discuss the results and business outlook. Details to access the call can be found below under "Earnings Conference Call." Second Quarter Financial Perfor ...

Industry Overview - The Zacks REIT and Equity Trust industry is experiencing volatility in mortgage rates due to macroeconomic uncertainty, leading to earnings pressure in the near term [1] - The industry consists of mortgage REITs (mREITs) that invest in and originate mortgages and mortgage-backed securities (MBS), focusing on residential or commercial mortgage markets [3] - Agency securities, backed by the federal government, are considered safer investments, limiting credit risks for mREITs [3] Current Challenges - High interest rates and volatility in mortgage markets are causing slight decreases in tangible book values for agency mortgage REITs, although they have been more stable than in 2023 [4] - The central bank's decision to maintain steady interest rates, despite a previous cut of 100 basis points in 2024, is increasing earnings pressure for highly leveraged mREITs [5] - Many industry players are cutting dividends to levels that can be covered by earnings, potentially leading to capital outflows and further declines in book values [5] Investment Strategies - mREITs are adopting a conservative approach to investments, focusing on risk and liquidity management, which may impede portfolio growth and robust returns in the short term [6] - Despite lower mortgage rates compared to last year, the demand for purchase applications and refinancing is improving, indicating some latent market demand [7] Performance Metrics - The Zacks REIT and Equity Trust industry ranks 162, placing it in the bottom 34% of 246 Zacks industries, indicating underperformance in the near term [8] - The industry's current-year earnings estimate has decreased by 6.5% over the last year, reflecting a negative earnings outlook [9] - Over the past year, the industry has gained 2.7%, underperforming the broader Zacks Finance sector's rise of 18.7% and the S&P 500's growth of 12.5% [11] Valuation - The industry is trading at a trailing 12-month price-to-book (P/BV) ratio of 1.00X, compared to the S&P 500's 8.42X, indicating a significant discount [14] - The Zacks Finance sector's trailing 12-month P/BV is 4.26X, further highlighting the industry's undervaluation [16] Company Highlights - **Annaly Capital Management (NLY)**: Focuses on prudent asset selection and capital allocation, with a diversified investment strategy that includes traditional Agency MBSs and non-agency assets. The company's 2025 earnings are estimated at $2.87 per share, reflecting a 6.3% year-over-year increase [19][22] - **Dynex Capital (DX)**: Engages in mortgage and consumer finance, with a focus on multi-family and commercial real estate loans. The company's 2025 earnings estimates are $1.97 per share, indicating a significant year-over-year jump of 662.9% [25][28] - **Ellington Financial (EFC)**: Invests in a diverse array of financial assets, including residential and commercial mortgage loans. The company's 2025 earnings estimates are $1.65 per share, showing a year-over-year growth of 13% [31][34]