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Dynex Capital (NYSE:DX) Q4 results, reported on Monday, came in strong as longer-dated bond yields fell during the quarter on optimism that the Federal Reserve will start cutting borrowing costs in 2024.
The mortgage REIT’s Q4 comprehensive income to common shareholders of $1.44 per share jumped from -$1.59 in the prior quarter. Total economic return of 11.8% compared with -11.0% in Q3. EPS available for distribution came in at -$0.24 vs. -$0.28 in Q3.
For Q4, the company’s comprehensive income consisted of realized gains of $40.4M from interest rate hedges, it noted.
Net interest expense was -$2.28M compared with $2.26M in Q3. Adjusted net interest spread of -1.06% vs. -1.09% in Q3.
Book value per common share of $13.31 at Dec. 31, 2023 rose from $12.25 at Sept. 30, 2023. The increase was mainly the result of higher prices on Agency MBS relative to U.S. Treasury futures, which resulted in net gains of $381.6M on the company’s investment portfolio, outpacing net losses of -$287.0M on its interest rate hedges.
Dynex Capital (DX) stock perked up 1% in Monday morning trading.
Conference call at 10:00 a.m. ET.
