Dynex Cap Reports Q2 2026 Results: Full Earnings Call Transcript

Dynex Cap (NYSE: DX ) held its second-quarter earnings conference call on Monday. Below is the complete transcript from the call. This content is powered APIs. 1 billion.

1. 42 per share. 6 billion in cash and unencumbered securities, representing 51% of total equity, providing flexibility for future opportunities. Management highlighted the importance of risk management amid geopolitical and technological changes, with a focus on building a durable mortgage investment platform.

The company raised $391 million capital, deployed into agency MBS opportunities, and expects continued attractive returns as spreads remain favorable. 5, capitalizing on market volatility and liquidity to optimize investment opportunities. The outlook remains constructive with stable mortgage rates and strong demand for fixed income, positioning the company for durable income and shareholder value creation. Full Transcript OPERATOR Turning the conference over to Ms.

Kaitlyn Mauritz, Head of Capital Markets and Investor Relations. Please go ahead. Kaitlyn Mauritz, Head of Capital Markets and Investor Relations Thank you, Operator, and thank you to everyone joining us today for Dynex Cap's second quarter 2026 earnings conference call. J.

Connelly, Chief Investment Officer. Before we begin, I'd like to remind you that today's discussion may include forward‑looking statements. These statements are based on current expectations, forecasts, and assumptions and are subject to risks, uncertainties, and other factors that could cause actual results to differ materially. For additional information regarding these risks and factors, please refer to our filings with the SEC, available in the Investors section of our website and on the SEC's website.

Dynex Cap undertakes no obligation to update or revise any forward‑looking statements. com, as well as on the SEC's website. We may also reference our earnings presentation during today's call, which is available on our Investors page. With that, I'll turn the call over to Smriti for opening remarks.

Smriti Papineau, Co‑Chief Executive Officer and President Thank you, Kate, and good morning, everyone. I'm pleased to report a strong performance quarter for Dynex Cap. 4% was achieved alongside healthy capital issuance of nearly $400 million for the quarter. 4 billion at year‑end, and we grew our portfolio of agency MBS by over 40%.

We are progressing well on our path, delivering consistent dividend income for our shareholders while building scale and resilience. Since 2022, we have expanded our capital base by five times and continue to see a significant opportunity to thoughtfully build the company. From here we are executing our strategy for a more durable mortgage investment platform with a valuation that is consistent with our strong track record, increasing relevance, and scale. I want to give some context for our strategic thinking.

First, why agency MBS? Our conviction in agency MBS as the core of our strategy is high. Agency MBS are among the most liquid and cycle‑tested asset classes, with a demonstrated ability to withstand periods of market stress over the past 40 years. In the last decade, our macro opinion led us to focus more on liquidity and flexibility.

We therefore allocated most of our capital to the agency sector. The compelling return, liquidity, and flexibility of this asset class are unmatched. It drove our outperformance in 2020 as well as in the Fed hiking cycle of 2022 to 2025. In our view, agency MBS remains the best risk‑reward across our investment universe for this macro environment.

Hence, our approach is to invest in agency MBS while building the capital base and strengthening the operating platform. Second, what is the imperative to grow and scale? The reasons are twofold. The most straightforward, relevant reason is valuation.

Larger companies, often regardless of delivered performance, typically earn a better valuation metric. This is further bolstered by the popularity of passive investing. As passive funds receive more cash, they allocate based on size to larger companies, and in our view, this provides a structural tailwind for the expansion of Dynex Cap. By delivering both performance and size, we believe we can garner higher valuations for our business and ultimately bring greater value to our shareholders.

The other component driving our strategic thinking is risk management. As a macro‑focused investor, we continuously evaluate global trends. We currently see increased risks related to both geopolitical conflict and technological change, reinforcing our focus on continuing to build resilience across our business and operations. While we cannot predict the ultimate impact of AI, we are preparing by investing in people and technology and strengthening the processes that protect capital, sus