Dynex Capital, Inc. to Redeem Preferred Stock for Common Stock

Dynex Capital, Inc.

announced today that its Board of Directors has authorized the Company to redeem all 4,221,539 outstanding shares of the Company's Series D 9.50% Cumulative Convertible Preferred Stock. In the redemption, which is expected to be completed on or about October 15, 2010, each holder of a share of Series D Preferred Stock will receive one share of Dynex's Common Stock. This redemption is taking place pursuant to provisions of Dynex's articles of incorporation, which provide for the redemption of the Series D Preferred Stock once the closing price of Dynex's Common Stock has equaled or exceeded $10.00 per share for at least 20 out of 30 consecutive trading days. As of the close of the market today, Dynex's Common Stock has closed at or above $10.00 per share for 20 out of the most recent 28 trading days, including today. The Company noted that based on its reported June 30, 2010 book value, the redemption will be modestly accretive to book value per common share and post-redemption, reported basic and diluted earnings per share for the Company will be essentially identical.