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Dynex Capital(DX) - 2024 Q2 - Quarterly Results
2024-07-22 11:58
[Second Quarter 2024 Results](index=1&type=section&id=Second%20Quarter%202024%20Results) [Financial Performance Summary](index=1&type=section&id=Financial%20Performance%20Summary) Dynex Capital reported a total economic loss of **$(0.31) per common share** in Q2 2024, with book value decreasing to **$12.50** Q2 2024 Key Financial Metrics | Metric | Value | | :--- | :--- | | Total Economic Loss per Common Share | $(0.31) | | Book Value per Common Share (June 30, 2024) | $12.50 | | Comprehensive Loss per Common Share | $(0.18) | | Net Loss per Common Share | $(0.15) | | Dividends Declared per Common Share | $0.39 | | Equity Capital Raised | $124.7 million | | Agency RMBS Purchased | $551.1 million | | Liquidity (June 30, 2024) | $644.0 million | | Leverage (including TBA) | 7.9x shareholders' equity | [Management Remarks](index=1&type=section&id=Management%20Remarks) Management emphasized executing the strategic plan to deliver consistent dividends and capitalize on wide mortgage market spreads - The company is executing its strategic plan to provide consistent dividends and manage capital with discipline[4](index=4&type=chunk) - Dynex raised capital to leverage the "generationally wide spreads" in the mortgage market[4](index=4&type=chunk) - Human capital and building for future success remain a key focus for the company[4](index=4&type=chunk) [Consolidated Financial Statements](index=2&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Balance Sheets](index=2&type=section&id=Consolidated%20Balance%20Sheets) Total assets and liabilities increased as of June 30, 2024, with shareholders' equity growing, while book value per common share declined to **$12.50** Balance Sheet Comparison (in thousands) | Account | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Assets | $6,683,602 | $6,369,750 | | Total Liabilities | $5,638,339 | $5,499,015 | | Total Shareholders' Equity | $1,045,263 | $870,735 | | Book Value per Common Share | $12.50 | $13.31 | [Consolidated Comprehensive Statements of Income](index=3&type=section&id=Consolidated%20Comprehensive%20Statements%20of%20Income) For Q2 2024, the company reported a net loss of **$(10.2) million**, or **$(0.15) per share**, a significant shift from Q1 net income Q2 2024 Income Statement Highlights (in thousands, except per share data) | Metric | Q2 2024 | Q1 2024 | | :--- | :--- | :--- | | Net Interest Income (Expense) | $1,287 | $(3,192) | | Total Other (Losses) Gains, Net | $(2,348) | $54,611 | | Net (Loss) Income to Common Shareholders | $(10,227) | $38,195 | | Net (Loss) Income per Common Share-Basic | $(0.15) | $0.65 | | Comprehensive (Loss) Income to Common Shareholders | $(12,013) | $20,927 | [Discussion of Second Quarter Results](index=4&type=section&id=Discussion%20of%20Second%20Quarter%20Results) [Book Value and Economic Return Analysis](index=4&type=section&id=Book%20Value%20and%20Economic%20Return%20Analysis) The total economic loss of **$(0.31) per share** in Q2 2024 resulted from a decline in book value to **$12.50**, primarily due to widening Agency RMBS spreads Q2 2024 Common Book Value Rollforward (per share) | Component | Per Common Share Impact | | :--- | :--- | | Balance as of March 31, 2024 | $13.20 | | Comprehensive Loss | See detailed components | | Capital Transactions (Net) | See detailed components | | **Balance as of June 30, 2024** | **$12.50** | - The primary driver for the decline in book value was the widening of Agency RMBS spreads relative to U.S. Treasuries[9](index=9&type=chunk) - The company raised **$124.7 million** from ATM issuances and a public offering during the quarter[9](index=9&type=chunk)[10](index=10&type=chunk) [MBS Investment Portfolio](index=4&type=section&id=MBS%20Investment%20Portfolio) Dynex added **$551.1 million** in higher-coupon Agency RMBS in Q2 2024, increasing the total investment portfolio fair value to **$8.86 billion** - The company purchased **$551.1 million** in specified pools of Agency RMBS with coupons of 5.5% or higher, which is anticipated to increase net interest income[11](index=11&type=chunk) MBS Portfolio Composition by Fair Value (in millions) | Security Type | June 30, 2024 | March 31, 2024 | | :--- | :--- | :--- | | Total Agency RMBS | $8,624.8 | $7,991.3 | | Agency CMBS | $97.5 | $111.8 | | Agency CMBS IO | $116.9 | $124.5 | | Non-Agency CMBS IO | $16.4 | $21.1 | | **Total** | **$8,855.5** | **$8,248.7** | [Financing and Net Interest Spread](index=5&type=section&id=Financing%20and%20Net%20Interest%20Spread) Total repurchase agreement borrowings increased to **$5.49 billion** in Q2 2024, with the effective yield on investments rising, resulting in an improved net interest spread of **(1.01)%** Repurchase Agreement Borrowings (in thousands) | Metric | June 30, 2024 | March 31, 2024 | | :--- | :--- | :--- | | Total Balance | $5,494,428 | $5,284,708 | | Weighted Average Rate | 5.46% | 5.46% | | WAVG Original Term (Days) | 94 | 76 | Portfolio Performance Comparison | Metric | Q2 2024 | Q1 2024 | | :--- | :--- | :--- | | Effective Yield on Investments | 4.46% | 4.36% | | Cost of Funds (Repo) | (5.47)% | (5.51)% | | Net Interest Spread | (1.01)% | (1.15)% | [Hedging Portfolio](index=6&type=section&id=Hedging%20Portfolio) The company uses derivatives to hedge interest rate risk, holding **$5.4 billion** in U.S. Treasury futures and **$10.0 million** in interest rate swaps - As of June 30, 2024, the company held short positions in U.S. Treasury futures with a total notional amount of approximately **$5.4 billion** and interest rate swaps with a notional amount of **$10.0 million**[17](index=17&type=chunk) - The company's remaining estimated net deferred tax hedge gains from its interest rate hedging portfolio was **$848.8 million** as of June 30, 2024[18](index=18&type=chunk) Projected Recognition of Remaining Hedge Gains (in thousands) | Period | Projected Amount | | :--- | :--- | | Third quarter 2024 | $26,687 | | Fourth quarter 2024 | $26,784 | | Fiscal year 2025 | $107,939 | | Fiscal year 2026 and thereafter | $687,428 | | **Total** | **$848,838** | [Non-GAAP Financial Measures](index=7&type=section&id=Non-GAAP%20Financial%20Measures) Dynex uses non-GAAP measures like EAD and adjusted net interest income to show portfolio returns, reporting an EAD loss of **$(8.1) million** for Q2 2024 - Management believes non-GAAP measures like EAD and adjusted net interest income are useful for investors as they measure the portfolio's return based on effective yield, net of financing and recurring costs[22](index=22&type=chunk) Reconciliation to EAD (in thousands, except per share) | Metric | Q2 2024 | Q1 2024 | | :--- | :--- | :--- | | Comprehensive (loss) income to common shareholders | $(12,013) | $20,927 | | EAD to common shareholders | $(8,095) | $(17,684) | | EAD per common share | $(0.12) | $(0.30) | Reconciliation to Adjusted Net Interest Income (in thousands) | Metric | Q2 2024 | Q1 2024 | | :--- | :--- | :--- | | Net interest income (expense) | $1,287 | $(3,192) | | Adjusted net interest income (expense) | $1,071 | $(4,460) | [Other Information](index=8&type=section&id=Other%20Information) [Forward-Looking Statements](index=8&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements subject to risks and uncertainties, with actual results potentially differing due to economic and geopolitical factors - The report includes forward-looking statements regarding future performance, interest rates, and strategies, which are subject to inherent risks[26](index=26&type=chunk) - Key risk factors include changes in domestic economic conditions, geopolitical events (e.g., wars in Ukraine and between Israel and Hamas), changes in interest rates and credit spreads, and Federal Reserve policy changes[26](index=26&type=chunk)[27](index=27&type=chunk) [Company Description](index=9&type=section&id=Company%20Description) Dynex Capital, Inc. is an internally managed REIT focused on generating dividend income and long-term returns from diversified U.S. real estate assets - Dynex Capital is an internally managed REIT that finances diversified U.S. real estate assets to generate dividend income and long-term returns[29](index=29&type=chunk)
Dynex: Maintaining Hold, Despite An Enhanced Asset-Liability Relationship
seekingalpha.com· 2024-05-29 20:28
stanciuc Our coverage today revisits our stance on Dynex Capital, Inc. (NYSE:DX), a mortgage REIT we last covered in February. Back then, we assigned a Hold rating to the asset due to a forecasted drop and economically driven inversion of the yield curve. As shown in the following diagram, our rating history on Dynex is quite accurate due to our successful outlook/s on mortgage rates and funding costs. However, additional events have occurred within the economy since our latest coverage, prompting us to upd ...
Top Notch mREIT, 12.5% Yield: Dynex Capital
Seeking Alpha· 2024-05-14 11:35
PeopleImages Co-authored Treading Softly When approaching a problem, it's best to have multiple strategies at hand, as relying solely on one plan can often lead to failure. Leaving your options open can benefit you, but only if you don't leave them open for too long. It's important to be patient, but we shouldn't let analysis paralyze us. I've been very open about my viewpoints on where I think agency MBS is going. I also have been very open about my favorite picks in this sector. In recent weeks, we have d ...
Dynex Capital(DX) - 2024 Q1 - Quarterly Report
2024-04-26 20:24
| 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 March 31, 2024 | | 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 52-1549373 | | (State or other ...
Dynex Capital(DX) - 2024 Q1 - Earnings Call Transcript
2024-04-22 15:43
Dynex Capital, Inc. (NYSE:DX) Q1 2024 Earnings Conference Call April 22, 2024 10:00 AM ET Company Participants Alison Griffin - Vice President of Investor Relations Byron Boston - Chairman and Chief Executive Officer Robert Colligan - Executive Vice President and Chief Financial Officer Smriti Popenoe - President and Chief Investment Officer Conference Call Participants Bose George - KBW Douglas Harter - UBS Matthew Erdner - Jones Trading Eric Hagen - BTIG Operator Thank you for standing by. My name is Jael ...
Dynex Capital(DX) - 2024 Q1 - Quarterly Results
2024-04-22 12:04
PRESS RELEASE FOR IMMEDIATE RELEASE CONTACT: Alison Griffin April 22, 2024 (804) 217-5897 DYNEX CAPITAL, INC. ANNOUNCES FIRST QUARTER 2024 RESULTS GLEN ALLEN, Va. -- Dynex Capital, Inc. ("Dynex" or the "Company") (NYSE: DX) reported its first quarter 2024 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." Financial Performance Summary Management Rema ...
Dynex Capital, Inc. Announces the Appointments of Andrew Gray and Alexander Crawford to Its Board of Directors
Businesswire· 2024-03-12 20:26
GLEN ALLEN, Va.--(BUSINESS WIRE)--Dynex Capital, Inc. (NYSE: DX) (the “Company”) announced today that its Board of Directors (the “Board”) has appointed Andrew Gray and Alexander Crawford as independent directors, effective March 6, 2024. Mr. Gray has been appointed to the Audit Committee, Compensation Committee, and Investment Committee, and Mr. Crawford has been appointed to the Audit Committee, Compensation Committee, Strategy Committee, and Investment Committee. Today's announcement reflects the Company ...
Preferreds Weekly Review: Agency mREIT Results Turn Up
Seeking Alpha· 2024-02-26 02:11
Lemon_tm/iStock via Getty Images Welcome to another installment of our Preferreds Market Weekly Review, where we discuss preferred stock and baby bond market activity from both the bottom-up, highlighting individual news and events, as well as the top-down, providing an overview of the broader market. We also try to add some historical context as well as relevant themes that look to be driving markets or that investors ought to be mindful of. This update covers the period through the third week of Febru ...
Dynex Capital(DX) - 2023 Q4 - Annual Report
2024-02-25 16:00
UNITED STATES | SECURITIES AND EXCHANGE COMMISSION | | --- | | Washington, DC 20549 | | FORM 10-K | | Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ☒ | | For the fiscal year ended December 31, 2023 | | 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 52-1549373 | | (State or other jurisdic ...
Dynex Capital: Unfavorable Spread Changes Look Set To Occur
Seeking Alpha· 2024-02-24 11:05
sakchai vongsasiripat/Moment via Getty Images It's been a few months since we covered Dynex Capital (NYSE:DX). Since then, the mortgage REIT has performed staggeringly well. Sure, much of its momentum has been due to a broad-based market upturn. Nevertheless, Dynex has returned well for a fixed-income asset. Previous Rating on DX (Seeking Alpha) With Dynex's performance in arrears, it's time to re-engage and provide a fresh outlook. A Turning point Has Emerged Funding and Asset Spreads Let's start off by lo ...