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Dynex Capital said it delivered a strong Q2, with total economic return of 6.4%, book value per share rising to $12.90, and net interest income improving to $0.42 per share. Management also highlighted $391 million of accretive capital raised and a larger, more resilient capital base.
The company remains highly focused on Agency MBS, which executives called the best risk-reward in the current macro environment. Dynex said it continued deploying capital into Agency MBS as spreads stayed attractive and its portfolio grew by more than 40%.
Executives said the outlook remains constructive, with mortgage spreads supportive, refinancing activity still muted, and leverage expected to stay in a 7.5x to 8.5x range. They also flagged AI-driven refinancing risk as a reason to be increasingly selective in security choice.
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Dynex Capital (NYSE:DX) reported what executives described as a strong second quarter of 2026, citing book value growth, accretive capital issuance and continued expansion of its Agency mortgage-backed securities portfolio.
On the company's earnings call, Smriti Popenoe, co-chief executive officer and president, said Dynex generated a total economic return of 6.4% for the quarter while issuing nearly $400 million of capital. She said the company's capital base increased to $3.1 billion in the first half of the year from $2.4 billion at year-end, while its Agency MBS portfolio grew by more than 40%.
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"We are progressing well on our path, delivering consistent dividend income for our shareholders while building scale and resilience," Popenoe said. She added that since 2022, Dynex has expanded its capital base fivefold.
Michael Sartori, chief financial officer, said Dynex ended the quarter with book value per share of $12.90, up 2.4% from $12.60 at March 31. The increase was primarily driven by tighter spreads versus the prior quarter and accretive capital deployment, he said.
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The company's 6.4% total economic return included $0.51 per share in common dividends and $0.30 per share from an increase in portfolio value during the quarter. Net interest income rose to $0.42 per share from $0.40 in the prior quarter, which Sartori attributed mainly to lower funding costs, new capital deployment into investments with attractive yield profiles and earnings from the existing portfolio.
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