Dynex Capital, Inc. reported its financial results for the third quarter of 2026, disclosing a net loss of $1.34 per common share and a comprehensive loss of $1.49 per common share. The company reported a total economic return of $(1.48) per common share, or an 11.5% decline relative to beginning book value. As of September 30, 2026, the company’s book value per common share stood at $10.91, a decrease of $(1.99) from the $12.90 level reported as of June 30, 2026.
The decline in book value was primarily attributed to wider Agency mortgage-backed security (MBS) spreads, which drove a net decrease in the fair value of the investment portfolio. Gains from the company's interest rate hedging portfolio partially offset these losses. Despite the quarterly loss, the company declared dividends of $0.51 per common share during the period.
In terms of portfolio activity, Dynex Capital raised $384 million of capital during the quarter, including $268 million through an at-the-market (ATM) program and $116 million from the issuance of 9.375% Series D fixed-rate cumulative redeemable preferred stock. The net proceeds were used to opportunistically add $3.2 billion of Agency MBS to the portfolio. This resulted in a total investment portfolio of $28.3 billion, a 3% increase from the prior quarter.
The investment portfolio is heavily concentrated in highly liquid Agency securities, comprising 99.99% of total assets. Agency RMBS represents 95% of the portfolio, while Agency CMBS represents 5%. As of September 30, 2026, the company maintained liquidity of $1.3 billion in cash and unpledged securities, representing 42% of total equity. Leverage, including to-be-announced (TBA) securities at cost, was 9.0 times shareholders' equity, up from 8.1 times in the previous quarter.
