Financial Data and Key Metrics Changes - The total economic return for the fourth quarter was 10.2%, consisting of $0.51 of common dividends and a $0.78 increase in book value per share [25] - For the year, the book value increased by $0.75, and $2 of dividends per common share were declared, paid monthly [25] - Comprehensive income for the quarter was $190 million and $354 million for the year [25] - The company ended the quarter with leverage of 7.3x total equity and a strong liquidity position of $1.4 billion in cash and unencumbered securities, representing over 55% of total equity [25] Business Line Data and Key Metrics Changes - The TBA and mortgage-backed securities portfolio started the year at $9.8 billion, grew to $15.8 billion at the end of September, and ended the year at $19.4 billion [27] - The current book value is estimated to be in the range of $13.85-$14.05 per share, up 3%-4% from year-end [28] - The company raised $1.5 billion over the last 13 months at the most accretive levels in its history [25] Market Data and Key Metrics Changes - The company experienced a 29.4% total shareholder return in 2025, driven by both dividend income and significant share price performance [8] - The total equity market capitalization, including preferred shares, was $3 billion as of the end of last week [8] - The company raised and invested over $1 billion in 2025, with a price-to-book valuation rising [16] Company Strategy and Development Direction - The company aims to create a resilient business at the intersection of capital markets and real estate finance, focusing on disciplined execution and long-term value creation [7][30] - The management emphasizes the importance of adapting to changing environments and maintaining a performance-first mentality [4][6] - The company is evolving its business steadily, fine-tuning people, processes, technology, and structure to align with its strategy [13] Management's Comments on Operating Environment and Future Outlook - Management highlighted the impact of government policy on asset returns, indicating that it is one of the most powerful forces shaping the market [14] - The company is prepared for a wider range of outcomes and has tilted its risk appetite towards liquidity and flexibility [10] - The management expressed confidence in the mortgage market's stability and the potential for attractive returns due to rising global demand for income [11][20] Other Important Information - The company has added depth and breadth to its team, including a new Chief Operating Officer and expanded corporate development capabilities [9] - The management noted that the current environment is characterized by policy complexity, shifting rate expectations, and geopolitical crosscurrents [8] Q&A Session Summary Question: Can you quantify where you see incremental investment returns today? - Management indicated that hedged ROEs are in the mid-teens with leverage around 7x, and with targeted leverage in the low 8s, ROEs could reach mid- to high teens [33] Question: How does this compare to three months ago given the spread tightening? - The dynamic is roughly between 150 and 300 basis points tighter than at the end of the last quarter [35] Question: Can you discuss the probability of politically motivated actions to improve housing affordability? - Management acknowledged the historical role of GSEs in managing housing and indicated that government intervention is possible [48][49] Question: What are the current opportunities for capital deployment? - Management noted that the belly of the coupon stack, primarily fives, has been the most interesting, with opportunities across the coupon stack [55] Question: How do you see the GSEs' longer-term role in the market? - Management believes that the $200 billion cap could be extended and that GSEs will continue to play a significant role in the market [73]

Financial Data and Key Metrics Changes - The total economic return for Q4 2025 was 10.2%, with a common dividend of $0.51 and a book value increase of $0.78 per share [23] - For the full year 2025, the book value increased by $0.75, and total comprehensive income was $354 million [23][24] - The company ended the quarter with leverage of 7.3x total equity and maintained a strong liquidity position with $1.4 billion in cash and unencumbered securities [23] Business Line Data and Key Metrics Changes - The TBA and mortgage-backed securities portfolio grew from $9.8 billion at the beginning of the year to $19.4 billion by year-end, with current holdings at approximately $22 billion [24] - The company raised and invested over $1 billion in 2025, benefiting from spread tightening in the second half of the year [15][24] Market Data and Key Metrics Changes - The company noted that MBS spreads have tightened significantly, with current spreads being 150 to 300 basis points tighter than at the end of the previous quarter [33] - The return environment is expected to improve due to policy support for housing finance and higher liquidity [17] Company Strategy and Development Direction - The company emphasizes a performance-first mentality and ethical stewardship of shareholders' capital, focusing on risk management and adaptability [4][5] - The management team is committed to evolving the business steadily, fine-tuning processes and technology to align with strategic goals [12] - The company aims to leverage rising global demand for income and the expansion of passive investing to strengthen its shareholder base and lower its cost of capital [11][12] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of government policy in shaping asset returns and indicated a more stable and supportive framework for the mortgage market [13][14] - The company is prepared for a wider range of outcomes in a rapidly changing global landscape, with a focus on liquidity and flexibility [10][12] - Management expressed confidence in the company's ability to generate reliable dividends backed by a resilient portfolio [11] Other Important Information - The company has made significant investments in its team and infrastructure, including the appointment of a new Chief Operating Officer [9] - General and administrative expenses as a percentage of capital decreased from 2.9% to 2.1% year-over-year, reflecting operational efficiency [26] Q&A Session Summary Question: Can you quantify where you see incremental investment returns today? - Management indicated that hedged ROEs are in the mid-teens with leverage around 7x, and with targeted leverage in the low 8s, ROEs could reach mid- to high teens [31] Question: How does the current spread tightening compare to previous quarters? - The dynamic is that spreads are now between 150 and 300 basis points tighter than at the end of the previous quarter [33] Question: What is the probability of politically motivated actions to improve housing affordability? - Management acknowledged the historical role of GSEs in managing housing and indicated that government intervention is possible and anticipated [44] Question: Where has the capital raised in January been deployed? - The company is finding opportunities primarily in the belly of the coupon stack, particularly in fives and five and a halves [50] Question: What is the appropriate size of the portfolio given current opportunities? - Management believes there are significant opportunities to generate alpha and that the portfolio can grow while still maintaining strong performance [60]

Fourth Quarter and Full Year 2025 Earnings Presentation January 26, 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, ...

Financial Performance - Total economic return of $1.29 per common share for Q4 2025, and $2.75 per common share for the full year 2025, representing 10.2% and 21.6% of beginning book value respectively [3] - Comprehensive income of $1.22 per common share for Q4 2025 and $2.85 per common share for the full year 2025 [3] - As of December 31, 2025, the comprehensive income to common shareholders was $354,303 thousand, reflecting a total net change in fair value of $258,122 thousand [13] - The company reported a comprehensive income to common shareholders of $189,606,000 for the three months ended December 31, 2025, compared to $162,527,000 for the previous quarter [31] - Earnings available for distribution (EAD) to common shareholders was $34,399,000 for the three months ended December 31, 2025, up from $33,599,000 in the prior quarter [31] Book Value and Dividends - Book value per common share increased to $13.45 as of December 31, 2025, up from $12.67 as of September 30, 2025 [3] - Dividends declared of $0.51 per common share for Q4 2025 and $2.00 for the full year 2025 [3] Capital and Liquidity - Raised $393 million in equity capital during Q4 2025, totaling $1.2 billion for the year [3] - Liquidity of $1.4 billion as of December 31, 2025 [3] Asset Management - Purchased $3 billion in Agency RMBS and $284 million in Agency CMBS during Q4 2025, totaling $8.2 billion and $1.2 billion for the year respectively [3] - Average balance of interest-earning assets increased by 58% during 2025 [3] - The total Agency RMBS fair value as of December 31, 2025, was $18,122,483 thousand, with an unrealized gain of $22,571 thousand [15] - The total Agency CMBS fair value as of December 31, 2025, was $1,218,343 thousand, with an unrealized gain of $5,236 thousand [15] Interest Income and Expenses - The net interest income for the fourth quarter of 2025 was $177,036 thousand, compared to $149,679 thousand in the prior quarter [18] - The economic net interest income for the fourth quarter of 2025 was $51,082 thousand, with an effective yield of 0.99% [18] - The average balance of Agency RMBS for the fourth quarter of 2025 was $12,712,611 thousand, yielding an effective interest rate of 4.98% [18] - The total interest income from Agency CMBS for the fourth quarter of 2025 was $9,992 thousand, with an effective yield of 4.27% [18] - The net interest spread increased to 0.75% from 0.46% quarter-over-quarter [31] Leverage and Borrowings - Leverage was 7.3 times shareholders' equity as of December 31, 2025 [3] - The total balance of repurchase agreement borrowings outstanding as of December 31, 2025, was $13,904,231 thousand, with a weighted average interest rate of 4.10% [17] Derivatives and Hedging - The company recognized a net gain on derivatives of $73,781,000 for the three months ended December 31, 2025, compared to a loss of $10,694,000 in the previous quarter [31] - The projected amortization of net deferred tax hedge gains is estimated at $558,232,000 over the next several fiscal years, with $95,972,000 expected in fiscal year 2026 [25] - The notional amount of interest rate swaps increased to $9,685,000,000 from $7,860,000,000 quarter-over-quarter [31] - The average fixed pay rate for 3-5 year interest rate swaps remained stable at 3.42% for both periods [22] Unrealized Gains - The company experienced an unrealized gain on U.S. Treasury futures of $50,038,000 for the quarter ended December 31, 2025, compared to a gain of $41,174,000 in the previous quarter [31]

Group 1: Annaly Capital and Dynex Capital - Annaly Capital (NLY) offers a 12.9% dividend, supported by income, with potential for price gains as mortgage rates decline [2][3] - The mortgage REIT operates as a "financial landlord," owning government-backed mortgages that appreciate in value when long-term rates fall [3] - Since the recommendation, Annaly has returned 14% in two months (115% annualized), while Dynex Capital (DX) has provided 5% gains (56% annualized) [5] Group 2: AI and Power Generation - The Trump administration and Northeastern governors have proposed a plan requiring tech giants to fund new power plants, ensuring they pay for electricity regardless of usage [8] - This initiative is expected to generate approximately $15 billion in new power plant construction, creating long-term, contract-backed revenue for power generators and utilities [10] - Reaves Utility Income Fund (UTG) offers a diversified investment in power companies, providing a 6.3% monthly dividend, benefiting from the anticipated demand for electricity from AI data centers [11][12]

Group 1 - Annaly Capital Management (NLY) is a significant player in the mortgage REIT sector and has been recommended as a "Buy" [1] - Dynex Capital is mentioned as a direct competitor for investor capital in the same sector [1] - The analysis aims to identify profitable and undervalued investment opportunities primarily in the U.S. market [1] Group 2 - The author combines roles as an Investment Consultant and Active Intraday Trader to maximize returns [1] - The approach includes a combination of macro-economic analysis and real-world trading experience [1] - The goal is to build a balanced portfolio of U.S. securities [1]

Group 1 - Annaly Capital Management (NLY) is a significant player in the mortgage REIT sector and has been recommended as a "Buy" [1] - Dynex Capital is mentioned as a direct competitor for investor capital alongside Annaly Capital Management [1] - The analysis aims to identify profitable and undervalued investment opportunities primarily in the U.S. market to build a high-yield, balanced portfolio [1]

Core Viewpoint - Dynex Capital, Inc. will release its financial results for the fourth quarter and full year 2025 on January 26, 2026, before market open, and will host a conference call to discuss these results [1]. Group 1: Financial Results Announcement - The financial results will be released before market open on January 26, 2026 [1]. - A conference call and live audio webcast will take place at 10:00 a.m. ET on the same day [1]. Group 2: Webcast and Conference Call Details - The live audio webcast will be accessible on the Investors page of the Dynex Capital website, with an archive available approximately two hours after the live call [2]. - Participants wishing to join the conference call via telephone should dial in at least 10 minutes prior to the start time and provide the conference code [3]. Group 3: Company Overview - Dynex Capital operates at the intersection of capital markets and the U.S. housing finance system, focusing on transforming residential real estate into long-term yields for shareholders [4]. - The company is committed to ethical stewardship, expert risk management, disciplined capital allocation, and social responsibility [4]. - As a real estate investment trust (REIT), Dynex Capital generates dividend income and long-term total returns through financing real estate assets, supporting the growth of housing communities in the U.S. [4].

Core Viewpoint - Dynex Capital, Inc. has declared a cash dividend of $0.17 per common share for January 2026, reflecting the company's ongoing commitment to returning value to shareholders [1] Dividend Announcement - The cash dividend of $0.17 per common share is scheduled to be paid on February 2, 2026 [1] - Shareholders of record as of January 21, 2026, will be eligible to receive the dividend [1] Company Overview - Dynex Capital operates at the intersection of capital markets and the U.S. housing finance system [1] - The company utilizes its expertise to transform residential real estate into compelling long-term yield opportunities [1]

Core Insights - Rida Morwa, a seasoned investment and commercial banker with over 35 years of experience, leads the Investing Group High Dividend Opportunities, focusing on high-yield investment strategies since 1991 [1] Group 1: Investment Strategy - The service aims for a targeted safe yield of over 9% through various high-yield investments [1] - Features include a model portfolio with buy/sell alerts, preferred and baby bond portfolios for conservative investors, and regular market updates [1] Group 2: Community and Education - The service emphasizes community and education, promoting the belief that investors should not invest alone [1]