Dynex Capital books 21.6% annual return as mortgage REIT scales

Dynex Capital (NYSE:DX) reported a standout 2025 fiscal year, characterized by a total economic return of 21.6% and a massive expansion of its interest-earning asset base.

The mortgage real estate investment trust (mREIT) benefited from a sharp recovery in book value during the final months of the year, signaling robust performance in the agency-backed mortgage market.

For the fourth quarter, Dynex recorded a total economic return of $1.29 per common share, or 10.2% of its beginning book value.

This pushed the company's book value per share to $13.45 as of December 31, 2025, up significantly from $12.67 at the end of the third quarter and $12.70 at the start of the year.

The company was exceptionally active in the capital markets, raising $393 million in equity during the fourth quarter alone.

For the full year, Dynex brought in $1.2 billion in net capital through at-the-market (ATM) stock issuances.

This fresh capital was immediately deployed into high-quality assets; the company purchased $3 billion in Agency Residential Mortgage-Backed Securities (RMBS) in the fourth quarter, bringing its total 2025 purchases across RMBS and Commercial MBS to $9.4 billion.

By the end of 2025, Dynex had grown its average balance of interest-earning assets by 58%.

Despite this rapid scaling, the company maintained a disciplined leverage ratio of 7.3 times shareholders' equity and held a substantial liquidity cushion of $1.4 billion.

On the earnings front, Dynex reported comprehensive income of $2.85 per share for the full year.

REIT taxable income is estimated at $229 million, a figure bolstered by approximately $100 million in amortization from deferred tax hedge gains.

Shareholders were rewarded with total dividends of $2 per share for the year, including $0.51 declared in the fourth quarter.