Dynex Capital, Inc. · NYSE:DX
Dynex Capital — MoneyShow San Francisco 2012
18 slides from Dynex Capital's conference presentation, Aug 24, 2012
Slide 1: Finding Yield in a Zero Rate World
Exhibit 99.1 The MoneyShow San Francisco Finding Yield in a Zero Rate World August 24, 2012
Slide 2: Safe Harbor Statement
Safe Harbor Statement NOTE: This presentation contains certain statements that are not historical facts and that constitute “ forward-looking statements ” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements in this presentation addressing expectations, assumptions,
Slide 3: Ways Investors Can Find Yield
MLPs ~ 5% Annuities ~ 4.5% S&P 500 Equities ~ 2.1% Treasury Bonds 2 Yr ~.29% MREITS ~ 10%+ Ways Investors Can Find Yield: Indicated yields based on publicly available information as of August 22, 2012. Actual yields may vary substantially from the amounts indicated above
Slide 4: Our Guiding Principles
Our Guiding Principles Our Mission Our Core Values • Generate dividends for shareholders • Manage leverage conservatively • Remain owner-operators • Maintain a culture of integrity and employ the highest ethical standards • Provide a strong risk management culture • Focus on long-term shareholder va
Slide 5: DX Snapshot
Market Highlights: (as of 8/20/12) Large NOL carryforward for unique total return opportunity Diversified investment strategy investing in residential and commercial mortgage assets Significant inside ownership and experienced management team Internally managed REIT commenced operations in 1988 DX S
Slide 6: Summary of Results
Dividends and Earnings Per Share* Book Value Per Share Net Interest Spread Return on Average Equity* Summary of Results *As presented on this slide, Q3-2011 earnings per share and return on average equity exclude the impact of certain items (EPS Ex-Items). EPS Ex-Items for Q3-2011 excludes from GAAP
Slide 7: Book Value
Book Value Growth Since 2008 $8.07 $9.08 $9.64 $9.20 $9.66 6/30/2012
Slide 8: Trading Comparables
Trading Comparables Yields Portfolio Leverage Source: J.P. Morgan and Company data For DX, indicated yield is ROE for 2Q 2012 and for all others, indicated yield is dividend yield as of 8/17/2012
Slide 9: Our Portfolio Strategy
Our Portfolio Strategy OUR GOAL IS TO LIMIT CREDIT, INTEREST RATE, PREPAYMENT, AND EXTENSION RISK IN OUR INVESTMENT PORTFOLIO BY CONSTRUCTING A PORTFOLIO WITH: Agency and Non-Agency Securities Short Duration Assets High Credit Quality Prepayment Protection Low Leverage
Slide 10: DX Investment Portfolio
Agency/Non-Agency Portfolio Expected Maturity/Reset Distribution Residential/Commercial DX Investment Portfolio (as of June 30, 2012) <15 16-40 41-60 61-84 85-120 120-125 Months to Maturity/Reset
Slide 11: DX Portfolio Detail
Dollar Prepayment Premium Exposure Credit Quality DX Portfolio Detail (as of June 30, 2012) *Agency MBS are considered AAA rated as of the date presented
Slide 12: CMBS Portfolio
Asset Type Credit Quality Non-Agency Vintage Collateral CMBS Portfolio (as of June 30, 2012) By year of origination $ in millions $ in millions * Agency CMBS are considered AAA - rated as of the date presented
Slide 13: Portfolio Performance
Net Interest Spread (quarter ended) Prepayment Performance Leverage and ROE Portfolio Performance *As presented on this slide, Q3-2011 return on average equity is calculated based on a measure that excludes the impact of certain items on earnings per share (EPS Ex-Items). EPS Ex-Items for Q3-2011 wa
Slide 14: Dynex Value Proposition
Internally Managed and Publicly Traded Since 1988 Diversified Investment Strategy Large Tax NOL Significant Insider Ownership Dynex Value Proposition Source: SNL +105.19%
Slide 15: Appendix
APPENDIX
Slide 16: Slide 16
Slide 17: Capital Allocation (as of June 30, 2012)
Capital Allocation (as of June 30, 2012) (1) At June 30, 2012, associated financing for investments includes repurchase agreements, and securitization financing issued to third parties (the latter of which are presented on the Company ’ s balance sheet as “ non-recourse collateralized financing ” ).
Slide 18: Selected Financial Highlights
Selected Financial Highlights (as of and for the quarter ended) Financial Highlights: ($000 except per share amounts) Jun 30, 2012 Mar 31, 2012 Dec 31, 2011 Sept 30, 2011 Jun 30, 2011 Total Investments 3,628,163 $ 3,276,170 $ 2,500,976 $ 2,595,574 $ 2,591,097 $ Total Assets 3,729,197 3,349,056 2,582