From The Motley Fool · Motley Fool Transcribing · · 3m
Dynex Q3 2026 Earnings Decline
Dynex reports 15.4% book value drop as mortgage spreads widen.
In brief
Dynex reports 15.4% book value drop as mortgage spreads widen. Dynex's book value per share fell to $10.91 after wider mortgage-backed securities spreads and higher interest rate volatility. Originally reported by The Motley Fool.
Book Value Decline
Dynex's book value per share dropped to $10.91 as of Sept. 30, 2026, a 15.4% decline from $12.90 as of June 30, 2026.
Total Economic Return
Dynex reported a total economic return of -11.5% for Q3 2026, reflecting the book value decline and $0.51 per share dividend.
Investment Portfolio Growth
Dynex's total investment portfolio increased to $28.3 billion, driven by $3.2 billion in Agency MBS purchases.
Agency RMBS Portfolio
Dynex's Agency RMBS portfolio stood at $26.8 billion, a 3% increase from June 30, 2026.
Agency CMBS Portfolio
Dynex's Agency CMBS portfolio totaled $1.5 billion, representing 5% of the total investment portfolio.
Comprehensive Loss
Dynex reported a comprehensive loss of $1.49 per share compared with $0.80 per share comprehensive income in Q2 2026.
Net Capital Raised
Dynex raised $384 million net capital, including $268 million in common equity through at-the-market program and $116 million in preferred stock.
Preferred Equity Issuance
Dynex issued $116 million net proceeds from 9.375% Series D preferred stock, its first preferred offering in over six years.
Liquidity Position
Dynex maintained $1.3 billion in cash and unencumbered securities, representing 42% of total equity as of Sept. 30, 2026.
Leverage Ratio
Dynex's leverage ratio increased to 9.0 times shareholders' equity from 8.1 times at June 30, 2026.
Economic Net Interest Spread
Dynex's economic net interest spread remained stable at 1.18% as asset yields increased to 5% and financing costs rose to 3.82%.
Repo Financing
Dynex had $24.19 billion in repo financing across more than 25 counterparties.
General and Administrative Expenses
Dynex's G&A expenses represented 2% of total equity on an annualized basis, down 40% from same period in 2025.
Interest Rate Sensitivity
Dynex models a 0.5% decline in common equity for a 50 basis point rise in interest rates.
Spread Sensitivity
Dynex's spread sensitivity increased to 5.7% common equity impact per 10 basis points of spread movement.
Static Return on Equity
Dynex's static ROE on new investments ranges from 20% in lower coupons to 25% in current coupons.
Refinance Incentive
Dynex reports 1% of outstanding mortgages have refinance incentive as most agency mortgages trade below par.
Estimated Book Value
Dynex's estimated book value per share was $10.95 as of Oct. 16, 2026.
Preferred Equity Composition
Dynex's preferred equity now represents 7% of total equity base, up from 3% prior to Series D offering.
Repo Spreads
Dynex's repo spreads remained stable at 12 to 15 basis points to SOFR.
The main idea
Dynex's book value per share fell to $10.91 after wider mortgage-backed securities spreads and higher interest rate volatility.
