Dynex Capital (NYSE: DX) reported Q2 EPS of $0.36, $0.13 better than the analyst estimate of $0.23. Revenue for the quarter came in at $15 million versus the consensus estimate of $12.47 million.

Financial Highlights

• Comprehensive income of $1.15 per common share and net income of $8.31 per common share
• Quarterly total economic return to common shareholders of 6.5%
• Net interest spread and adjusted net interest spread of 1.96% and 1.96%, respectively, for the second quarter of 2020 compared to 1.32% and 1.47%, respectively, for the first quarter of 2020
• Core net operating income, a non-GAAP measure, of $0.36 per common share
• Book value per common share of $16.69 at June 30, 2020 compared to $16.07 at March 31, 2020
  • Portfolio increased $0.79 per common share in book value or 4.9%, which was partially offset by declared dividends in excess of core earnings and stock transactions totaling ($0.17) per common share
• Dividends declared of $0.43 per common share
• Leverage including TBA long positions of 8.1x shareholders' equity

Management Remarks

“We believe we are in an exceptional environment to generate solid cash flows for our shareholders," stated Byron L. Boston, President and Chief Executive Officer. "Financing rates are low and the liquid assets we are invested in offer attractive risk-adjusted returns. With this backdrop, we posted a 6.5% total economic return for our shareholders during the second quarter. Core earnings declined versus the first quarter due to our reduced leverage profile in early April. However, we were substantially re-invested by the end of the second quarter and we expect strong earnings expansion in the third quarter.”

Mr. Boston continued, “Our collective team experience and disciplined top-down approach have served us well in 2020 and continue to be the foundation of our investment management approach. Our portfolio largely consists of Agency RMBS which we believe offer the most attractive risk-adjusted return profile and provide us with better liquidity, financial flexibility, and the ability to rapidly adjust our risk-profile as market conditions warrant."

For earnings history and earnings-related data on Dynex Capital (DX) click here.