Dynex Capital, Inc. Announces Second Quarter 2024 Results
Dynex Capital (NYSE: DX) reported its Q2 2024 financial results, showing a total economic loss of $(0.31) per common share, or (2.4)% of beginning book value. The company's book value per common share decreased to $12.50 as of June 30, 2024. Dynex reported a comprehensive loss of $(0.18) per share and a net loss of $(0.15) per share. The company declared dividends of $0.39 per common share for Q2. Dynex raised $124.7 million in equity capital through a public offering and ATM issuances. The company purchased $551.1 million of higher coupon Agency RMBS and maintained a liquidity of $644.0 million. Leverage including TBA securities was 7.9 times shareholders' equity.
Dynex Capital (NYSE: DX) ha pubblicato i risultati finanziari per il secondo trimestre del 2024, registrando una perdita economica totale di $(0.31) per azione comune, pari al (2.4)% del valore contabile iniziale. Il valore contabile per azione comune è diminuito a $12.50 al 30 giugno 2024. Dynex ha riportato una perdita complessiva di $(0.18) per azione e una perdita netta di $(0.15) per azione. L'azienda ha dichiarato dividendi di $0.39 per azione comune per il secondo trimestre. Dynex ha raccolto $124.7 milioni in capitale azionario tramite un'offerta pubblica e emissioni ATM. L'azienda ha acquistato $551.1 milioni di RMBS agenziali con cedola più alta e mantenuto una liquidità di $644.0 milioni. L'indebitamento, comprese le securities TBA, era di 7.9 volte il capitale dei soci.
Dynex Capital (NYSE: DX) informó sus resultados financieros del segundo trimestre de 2024, mostrando una pérdida económica total de $(0.31) por acción común, lo que equivale al (2.4)% del valor contable inicial. El valor contable por acción común disminuyó a $12.50 a fecha del 30 de junio de 2024. Dynex reportó una pérdida integral de $(0.18) por acción y una pérdida neta de $(0.15) por acción. La compañía declaró dividendos de $0.39 por acción común para el segundo trimestre. Dynex recaudó $124.7 millones en capital accionario a través de una oferta pública y emisiones ATM. La empresa compró $551.1 millones de RMBS de agencias con cupones más altos y mantuvo una liquidez de $644.0 millones. El apalancamiento, incluyendo valores TBA, era de 7.9 veces el capital de los accionistas.
다이넥스 캐피탈(Dynex Capital, NYSE: DX)은 2024년 2분기 재무 결과를 발표하였으며, 주당 $(0.31)의 총 경제 손실을 기록했으며, 이는 시작 장부 가치의 (2.4)%에 해당합니다. 회사의 주당 장부 가치는 2024년 6월 30일 기준으로 $12.50로 감소했습니다. 다이넥스는 주당 $(0.18)의 포괄적 손실과 주당 $(0.15)의 순손실을 보고했습니다. 회사는 2분기 동안 주당 $0.39의 배당금을 선언했습니다. 다이넥스는 공모와 ATM 발행을 통해 $124.7백만의 자본을 조달했습니다. 회사는 높은 쿠폰의 기관 RMBS를 $551.1백만에 구매했습니다 그리고 $644.0백만의 유동성을 유지했습니다. TBA 증권을 포함한 레버리지는 주주 자본의 7.9배였습니다.
Dynex Capital (NYSE: DX) a publié ses résultats financiers pour le deuxième trimestre de 2024, montrant une perte économique totale de $(0.31) par action ordinaire, soit (2.4)% de la valeur comptable de départ. La valeur comptable par action ordinaire a diminué à $12.50 au 30 juin 2024. Dynex a déclaré une perte globale de $(0.18) par action et une perte nette de $(0.15) par action. L'entreprise a déclaré des dividendes de $0.39 par action ordinaire pour le deuxième trimestre. Dynex a levé $124.7 millions de capital-actions par le biais d'une offre publique et d'émissions ATM. L'entreprise a acheté $551.1 millions d'Agency RMBS à coupon plus élevé et maintenu une liquidité de $644.0 millions. L'effet de levier, y compris les titres TBA, était de 7.9 fois les fonds propres des actionnaires.
Dynex Capital (NYSE: DX) hat seine finanziellen Ergebnisse für das zweite Quartal 2024 veröffentlicht und zeigt einen gesamtwirtschaftlichen Verlust von $(0.31) pro Stammaktie, was (2.4)% des Anfangs-Buchwerts entspricht. Der Buchwert pro Stammaktie sank zum 30. Juni 2024 auf $12.50. Dynex meldete einen umfassenden Verlust von $(0.18) pro Aktie und einen netto Verlust von $(0.15) pro Aktie. Das Unternehmen erklärte Dividenden von $0.39 pro Stammaktie für das zweite Quartal. Dynex hat $124.7 Millionen an Eigenkapital durch eine öffentliche Angebot und ATM-Emissionen gesammelt. Das Unternehmen hat $551.1 Millionen von höheren Coupon-Agentur-RMBS erworben und eine Liquidität von $644.0 Millionen aufrechterhalten. Der Hebel, einschließlich TBA-Wertpapieren, betrug 7.9-mal das Eigenkapital der Aktionäre.
- Raised $124.7 million in equity capital through public offering and ATM issuances
- Purchased $551.1 million of higher coupon Agency RMBS
- Maintained liquidity of $644.0 million
- Declared dividends of $0.39 per common share for Q2
- Total economic loss of $(0.31) per common share, or (2.4)% of beginning book value
- Book value per common share decreased to $12.50
- Comprehensive loss of $(0.18) per share
- Net loss of $(0.15) per share
Dynex Capital's Q2 2024 results show a total economic loss of
The dividend of
Dynex Capital's focus on high coupon Agency RMBS investments is a noteworthy strategy. These investments, amounting to
Investors should monitor the company's ability to navigate these leveraged positions and its performance relative to industry peers. The emphasis on human capital and strategic planning indicates a forward-looking approach, though it remains to be seen if these measures will translate into sustained profitability. Overall, Dynex's strategic investments and solid liquidity position provide a balanced perspective for retail investors considering both the risks and potential rewards.
Dynex's use of derivative instruments to hedge interest rate risks demonstrates advanced risk management practices. The company's short positions in U.S. Treasury futures and interest rate swaps help mitigate the impact of fluctuating interest rates on its portfolio. As of June 30, 2024, Dynex held
For retail investors, understanding Dynex's hedging strategy is crucial. Effective hedging can protect the company's earnings and book value from adverse market movements. However, it's important to recognize that hedging comes with its own set of costs and risks. Investors should consider Dynex's historical performance in managing these hedges and their impact on overall financial stability. The company's ability to effectively leverage these hedging instruments will be key to navigating potential market turbulence and ensuring long-term profitability.
Financial Performance Summary
-
Total economic loss of
per common share, or (2.4)% of beginning book value$(0.31) -
Book value per common share of
as of June 30, 2024$12.50 -
Comprehensive loss of
per common share and net loss of$(0.18) per common share$(0.15) -
Dividends declared of
per common share for the second quarter$0.39 -
Raised equity capital of
during the second quarter through a public offering of common stock and at-the-market ("ATM") issuances$124.7 million -
Purchased
of higher coupon Agency RMBS$551.1 million -
Liquidity of
as of June 30, 2024$644.0 million - Leverage including to-be-announced ("TBA") securities at cost was 7.9 times shareholders' equity as of June 30, 2024
Management Remarks
"Dynex continued to execute on its strategic plan to deliver consistent dividend income with disciplined capital management. We raised capital at attractive levels and are ready to take advantage of the generationally wide spreads in the mortgage market," said Byron L.
Earnings Conference Call
As previously announced, the Company's conference call to discuss these results is today at 10:00 a.m. Eastern Time and may be accessed via telephone in
Consolidated Balance Sheets (unaudited) |
|
|
|
||||
($s in thousands except per share data) |
June 30, 2024 |
|
December 31, 2023 |
||||
ASSETS |
|
|
|
||||
Cash and cash equivalents |
$ |
286,132 |
|
|
$ |
119,639 |
|
Cash collateral posted to counterparties |
|
123,131 |
|
|
|
118,225 |
|
Mortgage-backed securities (including pledged of |
|
6,193,139 |
|
|
|
6,038,948 |
|
Due from counterparties |
|
27,379 |
|
|
|
1,313 |
|
Derivative assets |
|
8,461 |
|
|
|
54,361 |
|
Accrued interest receivable |
|
28,323 |
|
|
|
28,727 |
|
Other assets, net |
|
17,037 |
|
|
|
8,537 |
|
Total assets |
$ |
6,683,602 |
|
|
$ |
6,369,750 |
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
||||
Liabilities: |
|
|
|
||||
Repurchase agreements |
$ |
5,494,428 |
|
|
$ |
5,381,104 |
|
Due to counterparties |
|
49,606 |
|
|
|
95 |
|
Derivative liabilities |
|
2,032 |
|
|
|
— |
|
Cash collateral posted by counterparties |
|
19,382 |
|
|
|
46,001 |
|
Accrued interest payable |
|
54,567 |
|
|
|
53,194 |
|
Accrued dividends payable |
|
12,785 |
|
|
|
10,320 |
|
Other liabilities |
|
5,539 |
|
|
|
8,301 |
|
Total liabilities |
|
5,638,339 |
|
|
|
5,499,015 |
|
|
|
|
|
||||
Shareholders’ equity: |
|
|
|
||||
Preferred stock |
$ |
107,843 |
|
|
|
107,843 |
|
Common stock |
|
747 |
|
|
|
570 |
|
Additional paid-in capital |
|
1,620,355 |
|
|
|
1,404,431 |
|
Accumulated other comprehensive loss |
|
(177,556 |
) |
|
|
(158,502 |
) |
Accumulated deficit |
|
(506,126 |
) |
|
|
(483,607 |
) |
Total shareholders' equity |
|
1,045,263 |
|
|
|
870,735 |
|
Total liabilities and shareholders’ equity |
$ |
6,683,602 |
|
|
$ |
6,369,750 |
|
|
|
|
|
||||
Preferred stock aggregate liquidation preference |
$ |
111,500 |
|
|
$ |
111,500 |
|
Book value per common share |
$ |
12.50 |
|
|
$ |
13.31 |
|
Common shares outstanding |
|
74,707,776 |
|
|
|
57,038,247 |
|
Consolidated Comprehensive Statements of Income (unaudited) |
|
Six Months Ended |
|||||||||
|
Three Months Ended |
|
|||||||||
($s in thousands except per share data) |
June 30, 2024 |
|
March 31, 2024 |
|
June 30, 2024 |
||||||
INTEREST INCOME (EXPENSE) |
|
|
|
|
|
||||||
Interest income |
$ |
76,054 |
|
|
$ |
71,525 |
|
|
$ |
147,580 |
|
Interest expense |
|
(74,767 |
) |
|
|
(74,717 |
) |
|
|
(149,484 |
) |
Net interest income (expense) |
|
1,287 |
|
|
|
(3,192 |
) |
|
|
(1,904 |
) |
|
|
|
|
|
|
||||||
OTHER GAINS (LOSSES) |
|
|
|
|
|
||||||
Realized loss on sales of investments, net |
|
(1,506 |
) |
|
|
— |
|
|
|
(1,506 |
) |
Unrealized loss on investments, net |
|
(41,977 |
) |
|
|
(70,024 |
) |
|
|
(112,001 |
) |
Gain on derivative instruments, net |
|
41,135 |
|
|
|
124,635 |
|
|
|
165,771 |
|
Total other (losses) gains, net |
|
(2,348 |
) |
|
|
54,611 |
|
|
|
52,264 |
|
|
|
|
|
|
|
||||||
EXPENSES |
|
|
|
|
|
||||||
General and administrative expenses |
|
(6,642 |
) |
|
|
(10,880 |
) |
|
|
(17,523 |
) |
Other operating expense, net |
|
(601 |
) |
|
|
(421 |
) |
|
|
(1,022 |
) |
Total operating expenses |
|
(7,243 |
) |
|
|
(11,301 |
) |
|
|
(18,545 |
) |
|
|
|
|
|
|
||||||
Net (loss) income |
|
(8,304 |
) |
|
|
40,118 |
|
|
|
31,815 |
|
Preferred stock dividends |
|
(1,923 |
) |
|
|
(1,923 |
) |
|
|
(3,847 |
) |
Net (loss) income to common shareholders |
$ |
(10,227 |
) |
|
$ |
38,195 |
|
|
$ |
27,968 |
|
|
|
|
|
|
|
||||||
Other comprehensive income: |
|
|
|
|
|
||||||
Unrealized loss on available-for-sale investments, net |
|
(1,786 |
) |
|
|
(17,268 |
) |
|
|
(19,054 |
) |
Total other comprehensive loss |
|
(1,786 |
) |
|
|
(17,268 |
) |
|
|
(19,054 |
) |
Comprehensive (loss) income to common shareholders |
$ |
(12,013 |
) |
|
$ |
20,927 |
|
|
$ |
8,914 |
|
|
|
|
|
|
|
||||||
Weighted average common shares-basic |
|
66,954,870 |
|
|
|
59,008,316 |
|
|
|
63,003,545 |
|
Weighted average common shares-diluted |
|
66,954,870 |
|
|
|
59,717,332 |
|
|
|
63,913,156 |
|
Net (loss) income per common share-basic |
$ |
(0.15 |
) |
|
$ |
0.65 |
|
|
$ |
0.44 |
|
Net (loss) income per common share-diluted |
$ |
(0.15 |
) |
|
$ |
0.64 |
|
|
$ |
0.44 |
|
Dividends declared per common share |
$ |
0.39 |
|
|
$ |
0.39 |
|
|
$ |
0.78 |
|
Discussion of Second Quarter Results
The Company's total economic loss of
($s in thousands except per share data) |
Net Changes
|
|
Components of
|
|
Common Book
|
|
Per
|
|||||||
Balance as of March 31, 2024 (1) |
|
|
|
|
$ |
847,032 |
|
|
$ |
13.20 |
||||
Net interest income |
|
|
$ |
1,287 |
|
|
|
|
|
|||||
Operating expenses |
|
|
|
(7,243 |
) |
|
|
|
|
|||||
Preferred stock dividends |
|
|
|
(1,923 |
) |
|
|
|
|
|||||
Changes in fair value: |
|
|
|
|
|
|
|
|||||||
MBS and loans |
$ |
(45,269 |
) |
|
|
|
|
|
|
|||||
TBAs |
|
(22,985 |
) |
|
|
|
|
|
|
|||||
|
|
64,210 |
|
|
|
|
|
|
|
|||||
Interest rate swaps |
|
(90 |
) |
|
|
|
|
|
|
|||||
Total net change in fair value |
|
|
|
(4,134 |
) |
|
|
|
|
|||||
Comprehensive loss to common shareholders |
|
|
|
|
|
(12,013 |
) |
|
|
|||||
Capital transactions: |
|
|
|
|
|
|
|
|||||||
Net proceeds from stock issuance (2) |
|
|
|
|
|
125,568 |
|
|
|
|||||
Common dividends declared |
|
|
|
|
|
(26,824 |
) |
|
|
|||||
Balance as of June 30, 2024 (1) |
|
|
|
|
$ |
933,763 |
|
|
$ |
12.50 |
(1) |
Amounts represent total shareholders' equity less the aggregate liquidation preference of the Company's preferred stock of |
|
(2) |
Net proceeds from common stock issuances includes |
During the second quarter of 2024, the Company added
|
June 30, 2024 |
|
March 31, 2024 |
||||||||||||||||
($ in millions) |
Par Value |
|
Fair Value |
|
% of
|
|
Par Value |
|
Fair Value |
|
% of
|
||||||||
30-year fixed rate RMBS: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
$ |
682,622 |
|
|
$ |
543,906 |
|
6.1 |
% |
|
$ |
696,233 |
|
|
$ |
559,217 |
|
6.8 |
% |
|
|
583,629 |
|
|
|
485,088 |
|
5.5 |
% |
|
|
598,717 |
|
|
|
502,714 |
|
6.1 |
% |
|
|
340,558 |
|
|
|
315,611 |
|
3.6 |
% |
|
|
347,937 |
|
|
|
326,119 |
|
4.0 |
% |
|
|
1,387,896 |
|
|
|
1,317,480 |
|
14.9 |
% |
|
|
1,363,175 |
|
|
|
1,307,279 |
|
15.8 |
% |
|
|
1,996,271 |
|
|
|
1,941,874 |
|
21.9 |
% |
|
|
2,037,775 |
|
|
|
2,000,866 |
|
24.3 |
% |
|
|
1,073,941 |
|
|
|
1,066,340 |
|
12.0 |
% |
|
|
885,118 |
|
|
|
887,012 |
|
10.8 |
% |
|
|
288,922 |
|
|
|
292,118 |
|
3.3 |
% |
|
|
— |
|
|
|
— |
|
— |
% |
TBA |
|
262,000 |
|
|
|
240,303 |
|
2.7 |
% |
|
|
262,000 |
|
|
|
242,974 |
|
2.9 |
% |
TBA |
|
183,000 |
|
|
|
172,821 |
|
2.0 |
% |
|
|
223,000 |
|
|
|
212,529 |
|
2.6 |
% |
TBA |
|
275,000 |
|
|
|
266,310 |
|
3.0 |
% |
|
|
518,000 |
|
|
|
505,941 |
|
6.1 |
% |
TBA |
|
1,982,000 |
|
|
|
1,945,775 |
|
22.0 |
% |
|
|
1,250,000 |
|
|
|
1,244,696 |
|
15.1 |
% |
TBA |
|
37,000 |
|
|
|
37,142 |
|
0.4 |
% |
|
|
200,000 |
|
|
|
201,961 |
|
2.4 |
% |
Total Agency RMBS |
$ |
9,092,839 |
|
|
$ |
8,624,768 |
|
97.4 |
% |
|
$ |
8,381,955 |
|
|
$ |
7,991,308 |
|
96.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Agency CMBS |
$ |
102,299 |
|
|
$ |
97,482 |
|
1.1 |
% |
|
$ |
117,984 |
|
|
$ |
111,762 |
|
1.4 |
% |
Agency CMBS IO |
|
(1 |
) |
|
|
116,853 |
|
1.3 |
% |
|
|
(1 |
) |
|
|
124,484 |
|
1.5 |
% |
Non-Agency CMBS IO |
|
(1 |
) |
|
|
16,386 |
|
0.2 |
% |
|
|
(1 |
) |
|
|
21,105 |
|
0.2 |
% |
Total |
$ |
9,195,138 |
|
|
$ |
8,855,489 |
|
100.0 |
% |
|
$ |
8,499,939 |
|
|
$ |
8,248,659 |
|
100.0 |
% |
(1) |
|
CMBS IO do not have underlying par values. |
The following table provides detail on the Company's repurchase agreement borrowings outstanding as of the dates indicated:
|
|
June 30, 2024 |
|
March 31, 2024 |
||||||||||||
Remaining Term to Maturity |
|
Balance |
|
Weighted
|
|
WAVG
|
|
Balance |
|
Weighted
|
|
WAVG
|
||||
($s in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Less than 30 days |
|
$ |
2,350,410 |
|
5.46 |
% |
|
99 |
|
$ |
2,440,188 |
|
5.48 |
% |
|
58 |
30 to 90 days |
|
|
3,015,537 |
|
5.47 |
% |
|
89 |
|
2,305,208 |
|
5.46 |
% |
|
71 |
|
91 to 180 days |
|
|
128,481 |
|
5.43 |
% |
|
113 |
|
|
539,312 |
|
5.42 |
% |
|
182 |
Total |
|
$ |
5,494,428 |
|
5.46 |
% |
|
94 |
|
$ |
5,284,708 |
|
5.46 |
% |
|
76 |
The following table provides information about the performance of the Company's MBS (including TBA securities) and repurchase agreement financing for the second quarter of 2024 compared to the prior quarter:
|
Three Months Ended |
||||||||||||||||||
|
June 30, 2024 |
|
March 31, 2024 |
||||||||||||||||
($s in thousands) |
Interest
|
|
Average
|
|
Effective
|
|
Interest
|
|
Average
|
|
Effective
Cost of
|
||||||||
Agency RMBS |
$ |
67,927 |
|
|
$ |
6,153,663 |
|
4.42 |
% |
|
$ |
64,281 |
|
|
$ |
5,938,131 |
|
4.33 |
% |
Agency CMBS |
|
792 |
|
|
|
105,321 |
|
2.97 |
% |
|
|
925 |
|
|
|
119,286 |
|
3.04 |
% |
CMBS IO(5) |
|
2,868 |
|
|
|
146,161 |
|
7.25 |
% |
|
|
2,654 |
|
|
|
160,261 |
|
6.28 |
% |
Non-Agency MBS and other |
|
19 |
|
|
|
1,437 |
|
5.00 |
% |
|
|
22 |
|
|
|
1,773 |
|
4.86 |
% |
|
|
71,606 |
|
|
|
6,406,582 |
|
4.46 |
% |
|
|
67,882 |
|
|
|
6,219,451 |
|
4.36 |
% |
Cash equivalents |
|
4,448 |
|
|
|
|
|
|
|
3,643 |
|
|
|
|
|
||||
Total interest income |
$ |
76,054 |
|
|
|
|
|
$ |
71,525 |
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Repurchase agreement financing |
|
(74,767 |
) |
|
|
5,410,282 |
|
(5.47 |
)% |
|
|
(74,717 |
) |
|
|
5,365,575 |
|
(5.51 |
)% |
Net interest income (expense)/net interest spread |
$ |
1,287 |
|
|
|
|
(1.01 |
)% |
|
$ |
(3,192 |
) |
|
(1.15 |
)% |
(1) |
|
Average balance for assets is calculated as a simple average of the daily amortized cost and excludes securities pending settlement if applicable. |
(2) |
|
Average balance for liabilities is calculated as a simple average of the daily borrowings outstanding during the period. |
(3) |
|
Effective yield is calculated by dividing interest income by the average balance of asset type outstanding during the reporting period. Unscheduled adjustments to premium/discount amortization/accretion, such as for prepayment compensation, are not annualized in this calculation. |
(4) |
|
Cost of funds is calculated by dividing annualized interest expense by the total average balance of borrowings outstanding during the period with an assumption of 360 days in a year. |
(5) |
|
CMBS IO ("Interest only") includes Agency and non-Agency issued securities. |
Hedging Portfolio
The Company uses derivative instruments to hedge exposure to interest rate risk arising from its investment and financing portfolio, and some of these derivatives are designated as hedges for tax purposes. As of June 30, 2024, the Company held short positions in 10-year
Realized gains and losses on interest rate hedges are recognized in GAAP net income in the same reporting period in which the derivative instrument matures or is terminated by the Company, but are not included in the Company's earnings available for distribution ("EAD"), a non-GAAP measure, during any reporting period. On a tax basis, realized gains and losses on derivative instruments designated as hedges for tax purposes are amortized into the Company's REIT taxable income over the original periods hedged by those derivatives. The benefit expected to be recognized in taxable income is estimated to be
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 June 30, 2024; 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.
Projected Period of Recognition for Remaining Hedge Gains, Net |
|
June 30, 2024 |
|
|
|
($ in thousands) |
|
Third quarter 2024 |
|
$ |
26,687 |
Fourth quarter 2024 |
|
|
26,784 |
Fiscal year 2025 |
|
|
107,939 |
Fiscal year 2026 and thereafter |
|
|
687,428 |
|
$ |
848,838 |
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 EAD to common shareholders (including per common share) and adjusted net interest income/expense. 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 and expenses. Drop income 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 these non-GAAP financial measures because management views drop income as the economic equivalent of net interest income (interest income less implied financing cost) on the underlying Agency security from trade date to settlement date. Management also includes periodic interest benefit/cost from its interest rate swaps, which are also included in "gain (loss) on derivatives instruments, net", in adjusted net interest income/expense 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 periodic interest benefit/cost from interest rate swaps is a helpful indicator of the Company’s total cost of financing in addition to GAAP interest expense. However, these 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 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 nor its distribution requirements in accordance with the Internal Revenue Code of 1986, as amended.
Reconciliations of the non-GAAP financial measures used in this earnings release to the most directly comparable GAAP financial measures are presented below.
|
Three Months Ended |
||||||
($s in thousands except per share data) |
June 30, 2024 |
|
March 31, 2024 |
||||
Comprehensive (loss) income to common shareholders |
$ |
(12,013 |
) |
|
$ |
20,927 |
|
Less: |
|
|
|
||||
Change in fair value of investments, net (1) |
|
45,269 |
|
|
|
87,292 |
|
Change in fair value of derivative instruments, net (2) |
|
(41,351 |
) |
|
|
(125,903 |
) |
EAD to common shareholders |
$ |
(8,095 |
) |
|
$ |
(17,684 |
) |
|
|
|
|
||||
Weighted average common shares |
|
66,955 |
|
|
|
59,008 |
|
EAD per common share |
$ |
(0.12 |
) |
|
$ |
(0.30 |
) |
|
|
|
|
||||
Net interest income (expense) |
$ |
1,287 |
|
|
$ |
(3,192 |
) |
Net periodic interest benefit from interest rate swaps |
|
17 |
|
|
|
— |
|
TBA drop loss (3) |
|
(233 |
) |
|
|
(1,268 |
) |
Adjusted net interest income (expense) |
$ |
1,071 |
|
|
$ |
(4,460 |
) |
Operating expenses |
|
(7,243 |
) |
|
|
(11,301 |
) |
Preferred stock dividends |
|
(1,923 |
) |
|
|
(1,923 |
) |
EAD to common shareholders |
$ |
(8,095 |
) |
|
$ |
(17,684 |
) |
(1) |
|
Amount includes realized and unrealized gains and losses from the Company's MBS. |
(2) |
|
Amount includes unrealized gains and losses from changes in fair value of derivatives (including TBAs accounted for as derivative instruments) and realized gains and losses on terminated derivatives and excludes TBA drop income and net periodic interest benefit/cost from interest rate swaps. |
(3) |
|
TBA drop income/loss is calculated by multiplying the notional amount of the TBA dollar roll positions by the difference in price between two TBA securities with the same terms but different settlement dates. |
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 Mr.
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. 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. 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.
Company Description
Dynex Capital, Inc. is a financial services company committed to ethical stewardship of stakeholders' capital, employing comprehensive risk management and disciplined capital allocation to generate dividend income and long-term total returns through the diversified financing of real estate assets in
View source version on businesswire.com: https://www.businesswire.com/news/home/20240722180962/en/
Alison Griffin
(804) 217-5897
Source: Dynex Capital, Inc.
FAQ
What was Dynex Capital's (DX) total economic loss for Q2 2024?
How much equity capital did Dynex Capital (DX) raise in Q2 2024?
What was Dynex Capital's (DX) book value per common share as of June 30, 2024?