Dynex Capital, Inc. Announces Fourth Quarter and Full Year 2025 Results

Dynex Capital, Inc. (the "Company") (NYSE:DX), a REIT with a long track record of generating dividends from high-quality mortgage assets, reported its fourth quarter and full year 2025 financial results today. Management will host a call today at 10:00 a.m. Eastern Time to discuss the results and business outlook. Details to access the call can be found below under "Earnings Conference Call."

Financial Performance Summary and Other Highlights

• Total economic return of $1.29 per common share, or 10.2% of beginning book value, for the fourth quarter of 2025, and $2.75 per common share, or 21.6% of beginning book value, for the full year 2025
• Book value per common share of $13.45 as of December 31, 2025 compared to $12.67 as of September 30, 2025 and $12.70 as of December 31, 2024
• Comprehensive income of $1.22 per common share and net income of $1.17 per common share for the fourth quarter of 2025; comprehensive income of $2.85 per common share and net income of $2.49 per common share for the full year 2025
• REIT taxable income for 2025 is estimated at $229 million and includes amortization of deferred tax hedge gains of approximately $100 million
• Dividends declared of $0.51 per common share for the fourth quarter of 2025 and $2.00 for the full year 2025
• Raised equity capital of $393 million during the fourth quarter of 2025 through at-the-market ("ATM") common stock issuances, bringing total capital raised for 2025 to $1.2 billion, net of issuance costs
• Purchased $3 billion in Agency RMBS and $284 million in Agency CMBS during the fourth quarter, bringing total purchases for 2025 to $8.2 billion of Agency RMBS and $1.2 billion of Agency CMBS
• Average balance of interest-earning assets increased 58% during 2025
• Liquidity of $1.4 billion as of December 31, 2025
• Leverage including to-be-announced ("TBA") securities at cost was 7.3 times shareholders' equity as of December 31, 2025
• Common shares outstanding as of January 22, 2026 were 199,585,507

Management Remarks

"2025 was a strong year for Dynex. We delivered a 29.4% total shareholder return and a 67% decade-long total return, driven by disciplined execution and rigorous risk management. Our market capitalization nearly tripled over the last 13 months as we raised and deployed capital into attractive opportunities, while strengthening our organization with refreshed leadership, a new independent auditor, and an expanded office footprint. Our strategy remains accretive to long-term value creation, and we enter 2026 resilient and focused on our shareholders," said Smriti Laxman Popenoe, Co-Chief Executive Officer and President.

"Reflecting the company's significant growth, commitment to building resilience and evolving our human capital to align with our vision, we are expanding the breadth and depth of our executive team by separating the roles of Chief Financial Officer and Chief Operating Officer," added Byron L. Boston, Chairman and Co-Chief Executive Officer. "Rob Colligan will bring his expertise to an expanded CFO role, and today we welcome Meakin Bennett as our new Chief Operating Officer. A seasoned operator with deep financial and operational expertise from Fannie Mae, Morgan Stanley, and GE Capital—and a U.S. Navy veteran—Meakin brings the leadership and discipline to continue strengthening our platform."

Earnings Conference Call

As previously announced, the Company's conference call to discuss these results is today at 10:00 a.m. Eastern Time and may be accessed via telephone by dialing (800) 330-6710 and providing the Conference Code 3915006 or by live audio webcast by clicking the "Webcast" button on the Investors page of the Company's website (www.dynexcapital.com), which includes a slide presentation. To listen to the live conference call via telephone, please dial in at least 10 minutes before the call begins. A full replay of the presentation will be available on the same webcast link on the Company's website shortly after the conclusion of the live presentation.

Summary of Fourth Quarter and Full Year 2025 Results

The Company's total economic return ("TER") for the fourth quarter of 2025 of $1.29 per common share was comprised of an increase in book value of $0.78 per common share and dividends declared of $0.51 per common share. For the year ended December 31, 2025, the Company's TER of $2.75 per common share was comprised of an increase in book value of $0.75 per common share and dividends declared of $2.00 per common share. The increase in book value for both periods was largely driven by asset appreciation. The Company grew its capital base and added to its mortgage-backed securities portfolio throughout the year and benefitted from lower repurchase agreement financing rates following the three U.S. Federal Funds rate cuts in 2025.

The following tables summarize the changes in the Company's financial position during the fourth quarter and fiscal year 2025:

Investment Portfolio and Financing

The following table provides detail on the Company's MBS investments, including TBA securities, as of the periods indicated:

The following table provides detail on the Company's repurchase agreement borrowings outstanding as of the dates indicated:

The following table provides details on the performance of the Company's MBS, repurchase agreement financing, and interest rate swaps for the fourth quarter of 2025 compared to the prior quarter:

Hedging Portfolio

The following tables provide details on the Company's interest rate hedging portfolio as of the dates indicated:

The following table provides detail on the Company's "gain (loss) on derivatives, net" recognized in the Company's consolidated statements of comprehensive income (loss) during the periods indicated:

The Company typically designates certain of its interest rate derivatives as hedges for tax purposes. Gains and losses realized upon maturity or termination of derivatives designated as hedges for tax purposes are amortized into the Company's REIT taxable income over the original periods hedged by those derivatives. These hedge gains are not included in the Company's current or future earnings available for distribution ("EAD"), a non-GAAP measure, but will be part of the Company's future distribution requirements. The table below provides the projected amortization of the Company's net deferred tax hedge gains that may be recognized as taxable income over the periods indicated, given conditions known as of December 31, 2025; however, uncertainty inherent in the forward interest rate curve makes future realized gains and losses difficult to estimate, and as such, these projections are subject to change for any given period.

Non-GAAP Financial Measures

In evaluating the Company's financial and operating performance, management considers book value per common share, total economic return to common shareholders, and other operating results presented in accordance with GAAP as well as certain non-GAAP financial measures, which include earnings available for distribution ("EAD") to common shareholders (including per common share) and economic net interest income (and the related metric economic net interest spread). Management believes these non-GAAP financial measures may be useful to investors because they are viewed by management as a measure of the investment portfolio's return based on the effective yield of its investments, net of financing costs and, with respect to EAD, net of other normal recurring operating income/expenses.

Drop income/loss generated by TBA dollar roll positions, which is included in "gain (loss) on derivatives instruments, net" on the Company's consolidated statements of comprehensive income, is included in EAD because management views drop income/loss as the economic equivalent of net interest income on the underlying Agency security from trade date to settlement date. However, drop income/loss does not represent the total realized gain/loss from the Company's TBA securities.

Management also includes net periodic interest from its interest rate swaps, which is included in "gain (loss) on derivatives instruments, net", in each of these non-GAAP measures because interest rate swaps are used by the Company to economically hedge the impact of changing interest rates on its borrowing costs from repurchase agreements, and including net periodic interest from interest rate swaps is a helpful indicator of the Company's total financing cost in addition to GAAP interest expense.

Non-GAAP financial measures are not a substitute for GAAP earnings and may not be comparable to similarly titled measures of other REITs because they may not be calculated in the same manner. Furthermore, though EAD is one of several factors our management considers in determining the appropriate level of distributions to common shareholders, it should not be utilized in isolation, and it is not an accurate indication of the Company's REIT taxable income or its distribution and dividend requirements in accordance with the Internal Revenue Code.

Reconciliations of each non-GAAP measure to certain GAAP financial measures are provided below.

Forward Looking Statements

This release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "forecast," "anticipate," "estimate," "project," "plan," "may," "could," "will," "continue" and similar expressions identify forward-looking statements that are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Forward-looking statements in this release, including statements made in Ms. Popenoe's quote, may include, without limitation, statements regarding the Company's financial performance in future periods, future interest rates, future market credit spreads, management's views on expected characteristics of future investment and macroeconomic environments, central bank strategies, prepayment rates and investment risks, future investment strategies, future leverage levels and financing strategies, the use of specific financing and hedging instruments and the future impacts of these strategies, future actions by the Federal Reserve, and the expected performance of the Company's investments. The Company's actual results and timing of certain events could differ materially from those projected in or contemplated by the forward-looking statements as a result of unforeseen external factors. These factors may include, but are not limited to, the Company's ability to find suitable investment opportunities; changes in domestic economic conditions; geopolitical conflicts and uncertainty and the related impacts on macroeconomic conditions as a result of such conflicts and uncertainty; tariffs that the U.S. imposes on trading partners or tariffs imposed on the U.S. from trading partners; global and domestic government policy changes and the ability or inability to react to rapidly changing global economic policies; changes in interest rates and credit spreads, including the repricing of interest-earning assets and interest-bearing liabilities; the Company's investment portfolio performance, particularly as it relates to cash flow, prepayment rates, and credit performance; the impact on markets and asset prices from changes in the Federal Reserve's policies regarding purchases of Agency RMBS, Agency CMBS, and U.S. Treasuries; actual or anticipated changes in Federal Reserve monetary policy or the monetary policy of other central banks; adverse reactions in U.S. financial markets related to actions of foreign central banks or the economic performance of foreign economies, including in particular China, Japan, the European Union, and the United Kingdom; uncertainty concerning the long-term fiscal health and stability of the United States; the cost and availability of financing, including the future availability of financing due to changes to regulation of, and capital requirements imposed upon, financial institutions; the cost and availability of new equity capital; changes in the Company's use of leverage; changes to the Company's investment strategy, operating policies, dividend policy, or asset allocations; the quality of performance of third-party servicer providers, including the Company's sole third-party service provider for our critical operations and trade functions; the loss or unavailability of the Company's third-party service provider's service and technology that supports critical functions of the Company's business related to the Company's trading and borrowing activities due to outages, interruptions, or other failures; the level of defaults by borrowers on loans underlying MBS; changes in the Company's industry; increased competition; changes in government policy or regulations affecting the Company's business; changes or volatility in the repurchase agreement financing markets and other credit markets; changes to the market for interest rate swaps and other derivative instruments, including changes to margin requirements on derivative instruments; uncertainty regarding continued government support of the U.S. financial system and U.S. housing and real estate markets, or to reform the U.S. housing finance system including the resolution of the conservatorship of Fannie Mae and Freddie Mac; the composition of the Board of Governors of the Federal Reserve; the political environment in the U.S.; the effect on economic conditions from any U.S. federal government shutdown or the risk of such a shutdown; systems failures or cybersecurity incidents; and exposure to current and future claims and litigation. For additional information on risk factors that could affect the Company's forward-looking statements, see the Company's Annual Report on Form 10-K for the year ended December 31, 2024, and other reports filed with and furnished to the Securities and Exchange Commission.

All forward-looking statements are qualified in their entirety by these and other cautionary statements that the Company makes from time to time in its filings with the Securities and Exchange Commission and other public communications. The Company cannot assure the reader that it will realize the results or developments the Company anticipates or, even if substantially realized, that they will result in the consequences or affect the Company or its operations in the way the Company expects. As a result of these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements included herein or that may be made elsewhere from time to time by, or on behalf of, the Company. Forward-looking statements speak only as of the date made. The Company undertakes no obligation to update or revise any forward-looking statements to reflect events or circumstances arising after the date on which they were made, except as otherwise required by law.

Company Description

Dynex Capital, Inc. (NYSE:DX) is a leading internally managed REIT with a long track record of delivering attractive dividends through the disciplined risk management of investments in high‑quality mortgage assets backed by U.S. residential and commercial real estate. Additional information is available at www.dynexcapital.com.

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Alison Griffin

(804) 217-5897