Dynex Capital stock slips 2% on third quarter earnings miss

Investing.com -- On Monday, Dynex Capital, Inc. (NYSE: DX) reported a third quarter loss that missed analyst expectations.

The mortgage REIT’s stock declined 2.20% in pre-market trading following the results.

The company posted a net loss of -$1.34 per common share for the third quarter of 2026, significantly below the analyst consensus of $0.39. Net interest income totaled $101.56 million, falling short of the $112.54 million estimate. The quarter’s results reflected wider Agency MBS spreads that drove down the fair value of the company’s investment portfolio, though gains on interest rate hedges partially offset these losses.

Book value per common share declined to $10.91 as of September 30, 2026, down $1.99 from $12.90 at the end of the prior quarter. The company reported a comprehensive loss of -$1.49 per common share and declared dividends of $0.51 per common share. Net interest income increased from $93.78 million in the second quarter, driven by a 10% growth in average interest-earning assets.

"We believe today’s Agency mortgage market presents a compelling forward investment opportunity," said Smriti Laxman Popenoe, Co-Chief Executive Officer and President. "Late-quarter volatility and wider mortgage spreads reduced our reported book value, and that repricing has created an attractive forward return opportunity."

The company raised $384 million of capital during the quarter, including $268 million of common equity through its at-the-market program and $116 million through the issuance of 9.375% Series D preferred stock. Dynex deployed the proceeds to purchase $3.2 billion of Agency MBS, growing its total investment portfolio 3% to $28.3 billion from $27.6 billion at June 30, 2026.

Leverage including TBA securities increased to 9.0 times shareholders’ equity from 8.1 times in the prior quarter, primarily due to lower book value. The company maintained liquidity of $1.3 billion in cash and unpledged securities, representing 42% of total equity.

Original Article

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