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Dynex Capital (DX) just wrapped up its Q1 2025 earnings, and for once in this market, the word “predictable” isn’t a bad thing.

Book value came in right on the money, missing our projections by just 0.3%. That’s about as close as it gets, especially in the agency mREIT space where basis risk and market swings can throw things off quarter to quarter. The company also delivered exactly what we expected from core earnings (EAD), missing by less than a penny. DX’s strong net interest income and stable hedging performance helped lift results - while a slight uptick in expenses held things back just a touch.

The company expanded its agency MBS portfolio during the quarter, deploying capital raised while shares were trading above book value. They also held their derivatives composition steady, with only minor tweaks. That strategy helped DX avoid the kind of valuation noise that’s plagued some peers.

DX’s estimated REIT taxable income (ERTI) wasn’t officially released, but based on modeling by The REIT Forum, it likely exceeded Q1 dividend payouts - always a good sign for sustainability.

One small downside? DX’s book value slightly underperformed expectations in April (after the quarter ended), but the variance came down to modeling vs. actual portfolio tweaks - not a fundamental issue.

Overall, DX remains in solid shape. Core earnings are heading in the right direction, hedging strategies are in check, and book value movement is impressively stable for this sector.

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This article was compiled by my assistant. If there are any mistakes, blame him - I certainly will.