You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: This is Alison Griffin, Vice President, Investor Relations.
With me on the call I have Byron Boston, Chief Executive Officer; Smriti Popenoe, President and Chief Investment Officer; and Steve Benedetti, Executive Vice President, Chief Financial Officer and Chief Operating Officer.
And with that, I now have the pleasure of turning the call over to our CEO, Byron Boston.
As CEO of Dynex, I'm very proud to report that in 2020 we delivered a 15.2% total economic return and a 17% total shareholder return.
I've been at Dynex for 13 years and no other year has demanded as much active decision making as 2020.
We stuck with our discipline and excelled.
We didn't just protect shareholders money.
We made money for our shareholders in 2020.
Our book value increased and we delivered a solid dividend.
This performance stands in contrast to most other mortgage REIT and many other investment alternatives for investors seeking income.
Now as you can see on Slide 5, Dynex has now delivered industry leading performance on a one-year, three-year and five-year basis.
And when you look at our long-term chart on Page 17, you can see that we have delivered solid returns through multiple market cycles during my tenure at Dynex Capital.
This performance reflects my distinct philosophy of how to manage a mortgage REIT for the long term and that same philosophy is guiding our investment approach today.
We believe in risk management first, followed by disciplined capital allocation.
As experienced and skilled investors, we have been cautious about leveraging lower credit illiquid assets since 2016.
When spreads are tight, this strategy looks attractive during short term, but ultimately crumbles when liquidity dissipates in a crisis.
This is what happened last year when the prices of illiquid assets dropped dramatically as COVID-19 intensified and creditors demanded more cash or margin in response.
The takeaway here is that, it was no surprise that the market reacted the way it did.
We witnessed the same reaction in every major crisis in recent memory.
The Dynex management team has successfully managed through these intensified risk events throughout our careers and we were prepared.
2020 was a challenging year, but in our opinion, not a black swan event.
As we indicated at the beginning of 2020, we saw the global risk environment intensifying.
So, we were prepared for increased volatility.
While it is impossible to predict the timing of specific events, we foresaw a higher risk profile building in the global financial markets.
Our experience and insight gave us the edge to actively manage our portfolio to provide our shareholders strong returns.
We managed our book exactly as we told investors we would.
For years, we have emphasized liquidity and diversity in our portfolio, and this discipline served us well in 2020.
Our 2020 performance was not a coincidence or good luck, but rather years of thoughtful planning around our portfolio and a team of talented people ready to actively manage the book of business in volatile times.
As a CEO and coach, I could not be prouder.
Now from a human capital perspective, we have a world-class team with unmatched skills and experience.
And 2020 was the year when the management team mattered more than anything.
Our team has weathered significant crises in the past and long-term capital management to the Great Recession.
And as we have learned again this past year, nothing surpasses experience.
We have the institutional knowledge to address many market disruptions and to identify new opportunities that may come along.
Our team is diverse, which is critical to our strategy.
Risks do not stay within borders, and our teams worldwide perspective is invaluable when dealing with a global crisis.
Now, COVID-19 disrupted many work environments, but we already had the advantage of enabling our people to work remotely long before it became a necessity.
Just as risk is border-less, so is talent.
Our employees were accustomed to working outside the office.
So, we remained calm, focused during the quarantine, filtered out the noise to actively manage our risk, and effectively maintained key relationships and the confidence with lenders, regulators and investors.
So in the past 12 months we have taken a strategic view on both sides of the balance sheet with the goal of being able to grow and scale the Company efficiently, and in a stakeholder-friendly manner.
We made several moves.
We retired two of our higher cost preferred stock issues and we replaced them with our new Dynex Capital Preferred C. And during the last two weeks, we issued approximately $56 million in common equity in line with our long-term strategy to grow our capital base.
It's very important to note the return environment is conducive for absorbing any costs associated with our capital activities.
Our ultimate goal is to increase our stock's liquidity and offer investors the opportunity to invest in Dynex via multiple products, including our fixed dividend C Preferred, and our higher yielding common stock.
We've been in business for 30 years and we are fully committed to delivering solid cash flow, and attractive total returns to our shareholders well into the future.
Now as a company, our greater purpose is to support two of our main stakeholders and constituencies, the individual savers and the communities across America.
We are building this company for the long term, because we believe in America, and our role in helping individual savers achieve a respectable return on their savings from financing of real estate assets.
The capital that we bring to the table is critical for housing and the real estate community.
As long as savers need cash income and housing and real estate finance exist in America, our business model will remain relevant and critical.
Most importantly, we are deeply committed to the highest ethical standards because savers need management teams with integrity as stewards of the capital.
Our management team operates with integrity and an unwavering commitment to our values and to supporting our community.
We take our fiduciary responsibility very seriously and strive to be good stewards of capital, transparent in our actions and good corporate citizen.
At Dynex, we are building a diverse and multi-generational organization with a 30-year vision that we believe will create enormous value for shareholders, stand the test of time and prepare us for the future.
I feel fantastic about 2020, and I'm very positive about 2021 and beyond.
Before I turn over the call, I want to highlight that we have promoted Smriti Popenoe to President of our Company.
And this is another reason that I'm excited as the CEO and a coach.
All of our stakeholders should be elated about her promotion, and what this means for the future of Dynex.
As I said earlier, we have a 30-year vision that include getting the right people in the right places with the right skill sets and experience.
The fourth quarter continued the excellent performance for the Company for 2020.
For the quarter on a per common share basis we recorded comprehensive income of $1.23, total economic return of $1.22 or 6.7% based on the beginning book value per share of $18.25 and core net operating income of $0.45.
For the year on a per common share basis, we reported comprehensive income of $2.88, total economic return of $2.73 and core net operating income of $1.94.
2020 performance was highlighted by active portfolio and risk management and dynamic capital allocation, which enabled us to take advantage of improving asset valuations over the year, and declining funding costs.
Realized and unrealized investment in TBA gains, net of hedges, were approximately $1.83 per common share, driving a large part of the comprehensive income and total economic return for the year.
For the fourth quarter, both comprehensive income and total economic return were bolstered by the strong performance of lower coupon RMBS during the quarter, particularly in TBA securities relative to associated hedges and to a lesser extent increasing value on CMBS IO securities.
Core net operating income sequentially declined from $0.61 last quarter to $0.45 this quarter, principally as a result of the smaller average balance of interest-earning assets and modestly declining asset yields.
In addition, general and administrative expenses increased $2.1 million during the fourth quarter from year end incentive compensation accruals reflecting a catch-up adjustment for accrued bonus expense for management's achievements of its corporate goals and objectives this year.
Net interest spread and adjusted net interest spread, both slightly declined by 2 basis points respectively quarter-over-quarter.
Prepayments increased, but were well within expected ranges.
Agency RMBS prepayment speeds were 17.1 CPR for the quarter.
While overall portfolio CPRs including the CMBS portfolio were approximately 15.1 CPR.
Adjusted net interest spread continues to benefit from the favorable TBA dollar roll conditions versus on balance sheet repo.
As a reminder, the Company utilizes the perspective method for amortizing investment premiums, and as such, our results fully reflect the actual realized prepayments during the quarter and do not include cumulative catch up amortization adjustments that are based on long-term assumptions and could potentially distort near-term results.
As it relates to book value, the driver of the $0.83 per share increase during the fourth quarter was net gains from continued spread tightening on investment assets, particularly in both lower coupon TBAs and pools.
Treasury future hedges also helped to offset the impact on investment valuations from the sell-off in interest rates during the quarter.
We estimate that book value per common share at the end of January is up approximately 1%, inclusive of the impact of the capital raise announced last week.
We ended the year with investment assets, including TBA securities of $4.2 billion and leverage at 6.3 times shareholders equity similar to the end of the third quarter.
Overall investment assets, including TBA securities were down on an average basis by approximately 7% as compared to last quarter.
This quarter we added 15-year agency RMBS investments through TBA positions and overall the portfolio composition is approximately 84% RMBS investments, including TBA securities and approximately 16% invested in CMBS and CMBS IO.
Let me also mention that the tax character of the dividends on the Company's equity capital.
For 2020, dividends in both the preferred stock and common stock were a 100% capital gain income.
Let me start by saying that I appreciate the confidence that the Board and Byron has placed in me.
I'm honored and delighted to serve the Company's shareholders in my new role as the President.
I'm going to briefly cover our 2020 performance and then shift to our outlook for 2021.
In extreme volatility events like March 2020, there can be a lot of risk and with that comes opportunity.
With thorough planning and expecting the probability of such events, we were positioned with higher levels of liquidity.
We successfully managed the portfolio rapidly in February before conditions deteriorated, positioned ourselves to weather the extraordinary market events of March, and rebalanced our investments in April to take advantage of the remarkable recovery in asset prices through year end.
Our annual total economic return of 15% is only the third best in Dynex's history since 2008, but it is remarkable in that it was earned in an outlier year like 2020.
Moving on to 2021.
I'll start with a summary of our macroeconomic view.
To deal with the pandemic and its after effects, central banks have implemented highly accommodative policies, designed to increase employment, increase inflation and put the economy on a growing trajectory.
A flood of unprecedented liquidity has raised the price of financial assets globally.
Governments around the world are also implementing debt financed fiscal policy to close the gap on lost GDP from the pandemic and to drive future growth.
This is likely going to lead to a period of massive deficits.
Against this backdrop of unprecedented monetary and fiscal stimulus, we have the health crisis that much of the globe is still dealing with.
In the near term, we expect to see a period where there is a tug-of-war between the negative impacts of the pandemic and the positive impacts of the vaccine.
In the medium term, the stimulus plus the impacts of more vaccination could eventually lead to a period of higher growth, as more of our services-driven economy is able to come back online.
The Fed also remains committed to a broad recovery in employment, and an overshoot of inflation over 2%.
In the long term, we believe the world has been permanently reshaped by the pandemic and its impact will continue for many years to come across broad segment of our economy and many aspects of our daily lives.
This will continue to be a focus for Dynex in our macroeconomic process.
Right now, our macroeconomic view leads us to prepare for a somewhat bumpy transition to a steeper yield curve as one of the more probable scenarios for 2021.
We believe this is also a more favorable environment for higher returns.
Turning now to our current positioning and economic return outlook.
Our goal is always to manage the balance sheet to generate a total economic returns to meet or exceed the dividend.
Rather than think solely about core earnings versus the dividend, we are focused on capital preservation and generating returns over the long term.
Our experience shows that this focus results in higher total shareholder returns and creates long-term value for shareholders.
We believe the broader investment environment remains favorable with financing costs anchored well into 2022 and beyond.
First, financing costs are anchored well into '22 and beyond, agency MBS are liquid, lower risk assets.
And third, we believe the market will evolve to a steeper curve environment that is ideal for earning wider net interest spreads.
We expect returns to move into the 10% to 12% range and could offer mid-teens returns if spreads widen.
We are entering this period with solid performance quarter-to-date.
Book value since year-end is up about 1% net of the equity rate.
We have a strong liquidity position of $375 million and tremendous upside earnings power on the balance sheet.
Leverage stands slightly over 6 times today and we still believe a liquid strategy is appropriate for the environment.
Let me explain why we believe a steeper curve is possible.
While financing costs are expected to stay close to zero through 2023, the back end of the yield curve will face pressure from treasury issuance, possible increases in realized inflation and expectations for inflation, as the economy begins a path to recovery and gains traction in the second half of 2021.
This will likely result in higher long-term treasury yields.
A steeper yield curve is a very positive factor for net interest spread expansion as it offers a chance to invest at higher yields, especially as prepayments slow.
In steeper yield curve environments, agency RMBS spreads also tend to widen because they now have to compete with other assets, including treasuries that offer higher yields.
And realized volatility in steeper yield curve environment is usually higher.
This has the potential to further add to returns.
If you go back to 2012, 2015, 2018, all periods were tight MBS spreads to start the year.
The curve steepened, and MBS widened.
In 2012, it happened even with the Fed doing QE.
So, we're not predicting this will happen, we think there is a path for the scenario.
And if it happens, it will be one where we can invest capital at higher return.
We also see a scenario where the low volatility environment keep spreads range bound and book value stable.
At this point, we're seeing a massive revision to net supply number for 2021, not just because of refinancings and low mortgage rates, but also because of new household formation, a migration out of cities, home prices appreciation, all of which are causing MBS supply to balloon much higher than expected.
We believe this will afford us the opportunity to also invest at better returns.
Finally, if rates decline and the curve flattens, given the current tightness and high dollar prices of MBS, we feel that spreads will move wider in a lower rate environment.
And we have the capital and liquidity to invest in that scenario.
While they may not occur as exclusively as I've described, my point is that we believe all of these scenarios offer us the opportunity to manage and invest our capital accretively.
Our core portfolio is also positioned to benefit in a steeper curve.
This has been the market scenario so far this year.
We currently have an RMBS portfolio allocation of 20% to 15 years, which outperform in a steepener relative to 30s [Phonetic].
We've increased our allocation to long-term option based hedges to better insulate the portfolio from rising long-term rates.
You can see on Page 10 of the slide deck that the portfolio performs relatively well across several types of rate shocks, both parallel and non-parallel.
I want to reemphasize that we have tremendous earnings power on the balance sheet.
A one times increase in leverage, invested at 8% total economic return, adds $0.19 per share per year in economic return.
At 10%, that's $0.24, at 12% it's $0.29.
We think we have the room to take our total leverage up at least 2 times from today's levels at the right time and possibly higher if the return environment is better.
Here is what I'd like to leave you with.
The favorable investment environment is supported by low and stable financing costs well into 2022 and beyond.
We expect to be able to opportunistically invest our capital at more accretive levels as the market evolves over the year.
There is tremendous earnings power in the balance sheet and we're comfortable with our ability to generate returns to cover or exceed the dividend over the year.
Let me reiterate and summarize real quick.
We believe this is a favorable investment environment that has the potential to improve as the year evolves.
Having our financing costs low and stable for some time into the future is an enormous benefit for our shareholders.
Nonetheless, we continue to maintain our discipline of scenario planning to ensure we are prepared for future economic or market surprises.
Now, please take a look at the long-term chart on Slide 17 again.
And let me emphasize, for those of you who have listened to us over the years and you're long-term investors, we always close with this chart.
You'll see the difference on the chart.
We've used the Russell 2000 value index and the shift is mainly because of the unusual attraction and performance returns of this tech sector.
So we tried to create something that is a little more comparable, but we could have created charts with 10-year charts.
We could have created with numerous of other different types of vehicles, and the picture looks very similar.
This displays the power of above-average dividends, the power of a long-term risk management strategy and the power of successfully managing through major credit market corrections.
We have proven time and again in my 13-year tenure, that our philosophy, disciplined process and long-term thinking leads to superior returns, achieving over this time period what many of us could not.
The management team, our Board of Directors and I are delighted to invest alongside of our current investors because we believe in our future.
Now, there are many other investors out there who should have Dynex in their portfolio.
So, we invite you to join us.

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compname says qtrly core net operating income per share of $0.45.
qtrly core net operating income per share of $0.45 .

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