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Here are 1-3 brief analogies to describe Dynex Capital (DX):

• Goldman Sachs, but focused on mortgage-backed securities. (This highlights its role as a sophisticated financial investor and trader in a specific debt market.)
• An apartment REIT (like Equity Residential), but for mortgage loans instead of physical buildings. (This explains its Real Estate Investment Trust (REIT) structure, but clarifies that it profits from mortgage debt rather than owning physical property.)

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• Mortgage-Backed Securities (MBS) Investments: Acquisition and management of a diversified portfolio primarily consisting of agency residential and commercial mortgage-backed securities.
• Financing and Leverage: Utilizing repurchase agreements to finance their portfolio investments and enhance returns.
• Interest Rate Risk Management: Employing interest rate hedges, such as swaps and swaptions, to mitigate the impact of interest rate volatility on their portfolio.

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Dynex Capital (DX) - Major Customers

Dynex Capital (symbol: DX) is a mortgage Real Estate Investment Trust (mREIT). Unlike a traditional company that sells physical products or services to customers, Dynex Capital operates primarily as an investor in financial assets, specifically agency residential mortgage-backed securities (MBS).

Therefore, Dynex Capital does not have "customers" in the conventional sense who purchase goods or services directly from them. Instead, its business involves engaging in financial transactions with a variety of other financial institutions as counterparties in the capital markets.

While Dynex Capital does not "sell" a product or service to other companies in the traditional sense, its primary business interactions are conducted with these other financial institutions. These interactions include:

• Sellers of Mortgage-Backed Securities (MBS): Dynex Capital purchases MBS from various broker-dealers and investment banks in the secondary market. These institutions facilitate the buying and selling of securities.
• Repurchase Agreement (Repo) Counterparties: To finance its investments, Dynex Capital enters into repurchase agreements with large commercial banks and investment banks. These institutions provide financing against Dynex Capital's MBS holdings.
• Derivative Counterparties: For hedging interest rate risk, Dynex Capital utilizes derivative instruments (such as interest rate swaps) with various financial institutions.

Due to the transactional nature of financial markets and the wide array of financial institutions Dynex Capital transacts with, the company does not typically have identifiable "major customers" or disclose specific names of these counterparties as "customers." The relationships are dynamic and spread across numerous market participants rather than concentrated with a few key buyers of a product or service.

In summary, Dynex Capital's business is centered on financial market activities where its counterparties are primarily other financial institutions (e.g., investment banks, commercial banks, broker-dealers), rather than selling products or services to a defined customer base.

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Byron L. Boston, Chairman and Co-Chief Executive Officer

Byron L. Boston joined Dynex Capital's board in 2012 and has served as CEO or Co-CEO and Co-Chief Investment Officer since January 2014. He was President of the Company from March 2012 to December 2020, and held the position of Chief Investment Officer since April 2008. Boston's career includes building two successful public companies. He launched Sunset Financial Resources, a mortgage Real Estate Investment Trust (REIT) specializing in high-quality residential and commercial loans and securities, which was later sold in 2006. He previously gained experience in mortgage-backed securities and bond trading with Credit Suisse First Boston and Lehman Brothers, and at Freddie Mac, he developed and led the initial investment plan to grow their retained portfolio.

Smriti L. Popenoe, Co-Chief Executive Officer and President

Smriti L. Popenoe joined Dynex Capital's Board in September 2023 and serves as Co-CEO and President of the Company. She previously held the role of Chief Investment Officer from 2014 through 2024. Her career includes serving as Chief Risk Officer at PHH Corporation, a provider of mortgage banking and fleet management outsourcing services. As Senior Vice President with Wells Fargo (Wachovia Bank), she managed a $100+ billion investment portfolio and guided the team through the 2009 financial crisis. Popenoe also served as Senior Vice President, Investments, with Sunset Financial Resources, a startup mortgage REIT, where she contributed to its development. She began her investment career at Freddie Mac, where she managed a portfolio that grew to $500 billion.

Robert S. Colligan, Chief Financial Officer and Chief Operating Officer

Robert S. Colligan is the Chief Financial Officer and Chief Operating Officer of Dynex Capital, Inc. He joined Dynex in August 2022 as Chief Financial Officer and was appointed to the additional role of Chief Operating Officer in July 2024. Prior to joining Dynex, Mr. Colligan served as Chief Financial Officer at Chimera Investment Corporation, a real estate investment trust focused on residential mortgage loans, asset securitization, and mortgage-related securities. He also held the position of Controller at Starwood Capital Group. Earlier in his career, Mr. Colligan worked for Merrill Lynch and Bear Stearns, focusing on financial reporting, strategy, and investor relations, and began his career at PricewaterhouseCoopers.

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1. Interest Rate Risk

   Dynex Capital's business model, as a mortgage real estate investment trust (mREIT) specializing in Agency mortgage-backed securities (MBS), is highly sensitive to fluctuations in interest rates. Changes in interest rates can negatively impact the market value of its MBS portfolio, leading to mark-to-market losses and potential book value erosion. Rising interest rates specifically increase the company's borrowing costs, particularly for its repurchase agreement financing, which can compress net interest income and overall profitability. Conversely, while hedging strategies are employed to mitigate these risks, they can also eat into profits.

2. Leverage and Funding Risk

   Dynex Capital employs a highly leveraged investment strategy, primarily financing its MBS portfolio through short-term repurchase agreements. While leverage can amplify returns, it also significantly increases the risk of volatility in results. This reliance on short-term debt exposes the company to refinancing challenges and liquidity constraints, especially in a rising rate environment or during periods of market stress. Margin calls, where lenders demand additional collateral due to declining asset values, could force Dynex Capital to sell assets at unfavorable prices, further eroding shareholder value. As of September 30, 2025, Dynex reported a leverage ratio including To-Be-Announced (TBA) securities, of 7.5 times shareholders' equity.

3. Dividend Sustainability Risk

   Dynex Capital is known for offering a high dividend yield; however, its dividend payout ratio has frequently exceeded 100% of earnings, indicating that the company is paying out more in dividends than it earns. This suggests that the company may be funding its dividends from sources beyond net income, such as capital or debt, which poses a significant risk to the long-term sustainability of the dividend. Wall Street analysts have expressed caution regarding this high payout ratio, suggesting it is a major concern for the dividend's future viability. As a REIT, Dynex is legally obligated to distribute 90% of its taxable income, adding to the pressure to maintain payouts.

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Dynex Capital (DX) operates as a mortgage Real Estate Investment Trust (mREIT) primarily focused on investing in mortgage-backed securities (MBS). The company's main products are investments in Agency and, to a lesser extent, non-Agency MBS, from which it generates income through net interest spread. Dynex Capital principally serves the U.S. residential mortgage market.

The addressable market for Dynex Capital's main products is the U.S. mortgage-backed securities market. This market is substantial, with over $11 trillion in outstanding securities. As of 2025, the U.S. Mortgaged Backed Securities Market size is estimated at $15.55 trillion and is projected to grow to $22.43 trillion by 2030. The North American region currently holds the largest share of this market. Specifically, Agency MBS, which constitute the majority of Dynex Capital's portfolio, make up a significant portion of the U.S. securitized market, reported as $14 trillion as of December 31, 2024.

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Dynex Capital (symbol: DX) is expected to drive future revenue growth over the next 2-3 years through several key strategies and market dynamics:

1. Strategic Capital Raising and Deployment: Dynex Capital has consistently demonstrated its ability to raise new equity capital, which is then strategically deployed into its investment portfolio. For instance, in the third quarter of 2025, the company raised $254 million in new common equity capital, contributing to a year-to-date total of $776 million. In 2024, they raised $332.0 million. This expanded capital base allows for further investment in income-generating assets.
2. Growth and Active Management of Investment Portfolio: The company actively grows and manages its portfolio, primarily consisting of Agency Residential Mortgage-Backed Securities (RMBS) and Agency Commercial Mortgage-Backed Securities (CMBS). The portfolio expanded by 10% in Q3 2025 compared to the prior quarter, and over 50% since the beginning of the year. In the third quarter of 2025 alone, Dynex purchased $2.4 billion in Agency RMBS and $464 million in Agency CMBS, adding higher-yielding assets that contribute to increased net interest income.
3. Favorable Interest Rate Environment and Net Interest Margin Expansion: Dynex Capital anticipates benefits from potential Federal Open Market Committee (FOMC) rate cuts, which are expected to positively impact its net interest margin in the upcoming quarters. A decline in interest rates can lead to asset appreciation and tightening of mortgage spreads, enhancing the profitability of its leveraged portfolio.
4. Opportunistic Positioning in Agency RMBS and CMBS: The company focuses on opportunistic positioning and disciplined risk management to capitalize on attractive returns offered by Agency RMBS spreads and seize opportunities in Agency CMBS. This involves actively managing the portfolio to adapt to market conditions and generate strong returns from these high-quality, liquid fixed-income products.
5. Expansion of Operational Capabilities: The opening of a new office in New York City is a strategic move designed to enhance trading and portfolio management capabilities. This expansion aims to attract top talent and strengthen relationships with business partners, which is expected to lead to more efficient investment strategies and ultimately contribute to revenue growth.

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Share Repurchases

• Dynex Capital announced an Equity Buyback for $100 million worth of its shares in April 2024.

Share Issuance

• The company issued $521.8 million worth of stock in the first half of 2025.
• In the third quarter of 2025, Dynex Capital raised $254 million, net of issuance costs, through at-the-market common stock issuances.
• Shareholders approved an amendment in May 2025 to increase the number of authorized common shares from 180,000,000 to 360,000,000.

Outbound Investments

• In the third quarter of 2025, Dynex Capital purchased $2.4 billion in Agency Residential Mortgage-Backed Securities (RMBS) and $464 million in Agency Commercial Mortgage-Backed Securities (CMBS).
• During the second quarter of 2025, the company invested $1.9 billion in Agency RMBS, $364 million in Agency CMBS, and increased To-Be-Announced (TBA) investments by $953 million.
• Dynex Capital's investment portfolio, primarily composed of Agency MBS, grew to $11.3 billion in total assets by the second quarter of 2025, up from $9.0 billion in the first quarter of 2025.