Q2 2024 Dynex Capital Inc Earnings Call Transcript
Key Points
- Dynex Capital Inc (DX) achieved a significant milestone with total equity surpassing $1 billion for the first time in its 36-year history.
- The company raised $125 million of new capital, with a portion already invested and the remainder reserved for future opportunities.
- Net interest income was positive this quarter due to higher-than-expected paydowns on older, lower-yielding assets and the addition of newer, higher-yielding assets.
- Expenses for the second quarter were down, with equity-based compensation expected to recur only annually in the first quarter going forward.
- Dynex Capital Inc (DX) maintains a high degree of liquidity, positioning itself to capitalize on attractive long-term returns in the second half of 2024.
- Economic return was a negative 2.4% for the quarter, impacted by a 20 basis point increase in the 10-year treasury and wider spreads.
- The company issued 10.5 million shares at $11.88 per share, which was below book value, raising concerns about shareholder dilution.
- The macroeconomic environment remains vulnerable to exogenous shocks, which could result in bouts of volatility.
- The company's stock continues to trade at a discount relative to forward returns, indicating potential undervaluation by the market.
- There are risks associated with potential policy changes and fiscal policy shifts, particularly in the context of upcoming elections.
Thank you for standing by. My name is Erik, and I will be your conference operator today. At this time, I would like to welcome everyone to the Dynex Capital second quarter earnings conference call. (Operator Instructions)
I would now like to turn the call over to Alison Griffin, Vice President of Investor Relations. Please go ahead.
Good morning, and thank you for joining us for Dynex Capital second quarter 2024 earnings call. The press release associated with today's call was issued and filed with the SEC this morning, July 22, 2024. You may view the press release on the homepage of the Dynex website at dynexcapital.com, as well as on the SEC's website at sec.gov.
Before we begin, I wish to remind you that this conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words believe, expect, forecast, anticipate, estimate, project, plan and similar expressions identify forward-looking statements that are inherently subject
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