Dynex Capital, Inc. Increases Fourth Quarter Common Stock Dividend to $0.28/Share and Announces Filing Amendment to Shelf Registration Statement for Future Opportunities

Dynex Capital, Inc. (NYSE: DX) announced today that its Board of Directors has increased the dividend on its common stock to $0.28 per share for the fourth quarter of 2011. The Company had paid $0.27 per common share quarterly since the fourth quarter of 2010. The common stock dividend will be payable on January 31, 2012 to shareholders of record as of December 30, 2011. There is no dividend reinvestment discount for the fourth quarter dividends reinvested through the Company's Dividend Reinvestment and Share Purchase Plan.

“We are happy to be able to increase our dividend this quarter. Fundamentals are strong and our portfolio continues to perform well. Most aspects of our business are showing solid results and our net interest spread has improved modestly during the quarter. Prepayments this quarter have been lower than forecast and credit performance thus far has been favorable,” said Thomas Akin, Chairman and Chief Executive Officer. “While one can never be certain of the future, these trends allowed the Board to increase our dividend this quarter. We are committed to providing an attractive risk adjusted total return to our shareholders and this dividend increase is a step in delivering on that commitment. We look forward to providing more detailed disclosure when we announce results in early 2012.”

In addition, the Company announced today that it has filed a pre-effective amendment to its universal shelf registration statement on Form S-3 (file no. 333-173551) with the Securities and Exchange Commission. The shelf registration statement was originally filed on April 15, 2011, and covers common stock, preferred stock, debt securities, warrants, shareholder rights and units consisting of two or more of the foregoing. The amendment was filed to update the registration statement for information related to the Company's ratio of earnings to fixed charges and other information. The registration statement will allow Dynex to raise capital depending on future market conditions and/or investment opportunities. The Company indicated that it expects the shelf registration statement to be declared effective by the Securities and Exchange Commission in the near future. The shelf registration statement, when declared effective, will replace the Company's previous shelf registration statement that expired in April 2011. Any offerings of securities under the shelf registration statement, and the terms of any offering, will be disclosed in a prospectus supplement filed with the Securities and Exchange Commission.