Dynex Capital(DX) - 2025 Q1 - Quarterly Results

Financial Performance - Total economic return of $0.33 per common share, representing 2.6% of beginning book value, with dividends declared of$ 0.47 per common share and a decline in book value of $(0.14) per common share[5] - Comprehensive income of$ 0.16 per common share, while net loss was $(0.06) per common share for the first quarter of 2025[8] - Book value per common share decreased to$ 12.56 as of March 31, 2025, down from $12.70 as of December 31, 2024[7] Capital and Liquidity - Raised equity capital of$ 240 million through at-the-market common stock issuances, net of issuance costs[5] - Liquidity position stood at $790 million as of March 31, 2025[5] Assets and Liabilities - Total assets increased to$ 9.04 billion as of March 31, 2025, compared to $8.18 billion as of December 31, 2024[7] - Total liabilities increased to$ 7.65 billion as of March 31, 2025, up from $6.99 billion as of December 31, 2024[7] Interest Income and Expenses - Net interest income rose to$ 17.13 million for the first quarter of 2025, compared to $6.89 million in the previous quarter[8] - For Q1 2025, total interest income increased to$ 95,059,000 from $88,496,000 in Q4 2024, representing an increase of 1.77%[12] - The net interest income for Q1 2025 was$ 17,133,000, up from $6,887,000 in Q4 2024, indicating a significant increase of 148.5%[23] - Economic net interest income rose to$ 27,984,000 in Q1 2025, compared to $18,813,000 in Q4 2024, reflecting a growth of 48.5%[23] - The economic net interest spread improved to 0.79% in Q1 2025 from 0.41% in Q4 2024[23] Investment Activities - The company purchased$ 895 million in Agency RMBS and $55 million in Agency CMBS during the quarter[5] - The average balance of Agency RMBS increased to$ 7,726,081,000 in Q1 2025 from $7,181,923,000 in Q4 2024, a rise of 7.6%[12] - The effective yield on Agency RMBS improved to 4.66% in Q1 2025 from 4.59% in Q4 2024[12] Derivatives and Risk Management - The company experienced a net loss on derivatives of$ 118,088,000 in Q1 2025, compared to a gain of $276,670,000 in Q4 2024[15] - The company reported a net periodic interest from interest rate swaps of$ 10,851,000 in Q1 2025, slightly down from $11,926,000 in Q4 2024[23] - The projected amortization of net deferred tax hedge gains is estimated at$ 100,144,000 for fiscal year 2025, including $24.9 million for Q1 2025[17] Shareholder Information - The weighted average common shares increased to 90,492,327 in Q1 2025 from 81,145,733 in Q4 2024[23] Company Strategy and Environment - Dynex Capital, Inc. focuses on ethical stewardship of stakeholders' capital and employs comprehensive risk management strategies[28] - The company operates as a REIT and is internally managed to maximize stakeholder alignment[28] - The performance of the investment portfolio is influenced by cash flow, prepayment rates, and credit performance[26] - Changes in Federal Reserve policies regarding Agency RMBS, Agency CMBS, and U.S. Treasuries significantly impact market conditions and asset prices[26] - The company faces risks related to the cost and availability of financing, including potential changes in regulations affecting financial institutions[26] - Increased competition and changes in government regulations are key factors affecting the company's business environment[26] - The company is exposed to risks from defaults by borrowers on loans underlying MBS[26] - There is uncertainty regarding continued government support of the U.S. financial system and housing markets[26] - The company emphasizes the importance of the quality of performance from third-party service providers for critical operations[26] - Forward-looking statements are subject to various risks and uncertainties, and the company undertakes no obligation to update them[27]