2023-04-24 10:06:04 ET
Dynex Capital ( NYSE: DX ) stock fell 1.9% in Monday morning trading after the mortgage REIT's earnings available for distribution dropped into the red in the first quarter of 2023 as banking sector stresses roiled financial markets in March.
Q1 EPS available for distribution was -$0.16 compared with $0.03 in Q4 2022 and $0.44 in Q1 2022. Comprehensive income to common shareholders was -$0.54 compared with $1.17 in the prior quarter. Total economic return of -3.7% slumped from +6.2% in Q4 2022.
Q1 net interest income of -$462K compared with $6.21M in the prior quarter. Adjusted net interest income was $995K in the most recent quarter, down from $11.7M in Q4 2022 and from $25.4M in the year-ago period.
Book value per common share of $13.80 as of March 31, 2023 slipped from $14.73 at Dec. 31, 2022, primarily due to spread widening on mortgage-backed securities as a result of turmoil in the banking sector during the first quarter of 2023.
The company had more than $554M of cash and unencumbered assets as of March 31, 2023.
The company said it has hedged "a substantial portion" of its financing costs, "which has largely mitigated the rise in short term financing costs."
"We expect to drive incremental returns in the portfolio by continuing to add assets, opportunistic capital raising, and deployment," management said in the company's earnings slides. "In the long term, we believe spread tightening can also drive significant upside to returns."
Conference call at 10:00 AM ET.
Earlier, Dynex Capital GAAP EPS of $0.54
Last month, SA contributor Trapping Value took a look into this "lean, mean stock issuing machine."
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Dynex Capital posts Q1 loss as March's bank turmoil churned financial markets