Profile: Dynex Capital, Inc. (DX)

Dynex Capital, Inc. (Dynex), incorporated on December 18, 1987, is a specialty finance company. The Company organized as a real estate investment trust (REIT), which invests in mortgage loans and securities on a leveraged basis. The Company invests in residential mortgage-backed securities (MBS), issued or guaranteed by a federally chartered corporation, such as Federal National Mortgage Corporation (Fannie Mae), or Federal Home Loan Mortgage Corporation (Freddie Mac), or an agency of the United States government, such as Government National Mortgage Association (Ginnie Mae). The Company also invests in securitized residential and commercial mortgage loans, non-agency mortgage-backed securities, or non-Agency MBS, and, through a joint venture, commercial mortgage-backed securities (CMBS).

The Company’s Agency MBS are comprised primarily of Hybrid Agency adjustable rate mortgages (ARMs) and Agency ARMs and, to a lesser extent, fixed-rate Agency MBS. At December 31, 2008, the Company had approximately $218.1 million in Hybrid Agency ARMs and approximately $93.4 million in Agency ARMs. Its Agency MBS portfolio collateralized approximately $274.2 million in repurchase agreement borrowings as of December 31, 2008.

Dynex also has investments in securitized commercial mortgage and single-family residential loans. At December 31, 2008, it had $172.0 million in securitized commercial mortgage loans and $71.9 million in securitized single-family mortgage loans. It also has other investments in non-Agency MBS, equity securities, and an investment in a joint-venture which owns CMBS, which were issued by us in 1997 and 1998. The total of these investments was $15.5 million at December 31, 2008. The Company’s other investments include non-Agency MBS and equity securities, unsecuritized delinquent property tax receivables, and unsecuritized single-family and commercial mortgage loans.