Dynex Capital (DX) investor relations material

Executive summary

• Achieved a 10.3% total economic return for Q3 2025, with book value per common share rising to $12.67 and comprehensive income of $1.20 per share, reversing prior losses.

• Portfolio fair value increased to $15.8 billion, with 93% in Agency RMBS, and market capitalization at $1.8 billion as of September 30, 2025.

• Maintained a disciplined, risk-managed approach, focusing on high-quality, liquid Agency MBS and active hedging strategies.

• Raised $254 million in equity capital via ATM issuances in Q3 and $776 million year to date, supporting portfolio and equity growth.

• Operating environment remains complex, with persistent inflation, labor market slowdown, and geopolitical risks.

Financial highlights

• Net interest income for Q3 2025 was $30.6 million, up from $23.1 million in Q2 2025, with economic net interest income at $44.9 million.

• Book value per common share increased to $12.67 from $11.95 sequentially.

• Leverage decreased to 7.5x shareholders' equity, primarily from asset appreciation.

• Liquidity at quarter end exceeded $1 billion, representing over 50% of total equity.

• Annualized dividend yield stood at 16.6% for common stock, with $0.51 per share declared for Q3 2025.

Outlook and guidance

• Management expects continued improvement in financing rates in Q4 2025 due to a 25 basis point cut in the Federal Funds rate.

• Positioned for a residential mortgage rebound, with a focus on high-quality Agency MBS and readiness to pivot as market opportunities arise.

• Ongoing capital raising and deployment through the ATM program is anticipated.

• Monitoring for quick shifts in market sentiment and persistent surprises in private credit markets.

• Management anticipates policy and regulatory shifts to support housing affordability and less restrictive Fed policy.