Solid Cash Flows: Fed Tightening

Government Policy will Continue to Drive Returns ● Rising central bank balance sheets support the spread environment. • The fragile global economy is vulnerable to shocks. Bouts of volatility will occur and create opportunity to invest capital. Maintaining liquidity and flexibility will be key to driving returns. • The Federal Reserve has created a unique situation with the runoff of MBS from their balance sheet, which we believe presents an accretive long-term investment opportunity. • While spreads may be volatile in the near term, in the long-term, we believe our macro view supports investing in GSE guaranteed assets that will be an attractive fixed income alternative for a broad group of investors. • We believe the limitation of the GSEs portfolios by various regulators and potential legislation is likely and will create future opportunities to invest capital. • Credit risk transfer in multi-family and single family sectors • Other future opportunities from changing GSE footprint DYNEX CAPITAL INC. 12

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