Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - CAPSTEAD MORTGAGE CORP | d431276d8k.htm |
| EX-99.1 - PRESS RELEASE - CAPSTEAD MORTGAGE CORP | d431276dex991.htm |
| EX-99.3 - THIRD QUARTER 2012 INVESTOR FACT SHEET - CAPSTEAD MORTGAGE CORP | d431276dex993.htm |
 CAPSTEAD
Information as of September 30, 2012
Investor Presentation
Exhibit 99.2 |
 Safe
Harbor Statement - Private Securities Litigation Reform Act of 1995
Cautionary Statement Concerning Forward-looking Statements
This
document
contains
“forward-looking
statements”
within
the
meaning
of
the
Private
Securities
Litigation
Reform
Act
of
1995.
Forward-looking
statements
include,
without
limitation,
any
statement
that
may
predict,
forecast,
indicate
or
imply
future
results,
performance
or
achievements,
and
may
contain
the
words
“believe,”
“anticipate,”
“expect,”
“estimate,”
“intend,”
“will
be,”
“will
likely
continue,”
“will
likely
result,”
or
words
or
phrases
of
similar
meaning.
Forward-looking
statements
are
based
largely
on
the
expectations
of
management
and
are
subject
to
a
number
of
risks
and
uncertainties
including,
but
not
limited
to,
the
following:
In
addition
to
the
above
considerations,
actual
results
and
liquidity
are
affected
by
other
risks
and
uncertainties
which
could
cause
actual
results
to
be
significantly
different
from
those
expressed
or
implied
by
any
forward-looking
statements
included
herein.
It
is
not
possible
to
identify
all
of
the
risks,
uncertainties
and
other
factors
that
may
affect
future
results.
In
light
of
these
risks
and
uncertainties,
the
forward-looking
events
and
circumstances
discussed
herein
may
not
occur
and
actual
results
could
differ
materially
from
those
anticipated
or
implied
in
the
forward-looking
statements.
Forward-looking
statements
speak
only
as
of
the
date
the
statement
is
made
and
the
Company
undertakes
no
obligation
to
update
or
revise
any
forward-looking
statements,
whether
as
a
result
of
new
information,
future
events
or
otherwise.
Accordingly,
readers
of
this
document
are
cautioned
not
to
place
undue
reliance
on
any
forward-looking
statements
included
herein.
–
changes in general economic conditions;
–
fluctuations in interest rates and levels of mortgage
prepayments;
–
the effectiveness of risk management strategies;
–
the impact of differing levels of leverage employed;
–
liquidity of secondary markets and credit markets;
–
the availability of financing at reasonable levels and terms to
support investing on a leveraged basis;
–
the availability of new investment capital;
–
the availability of suitable qualifying investments from both
an investment return and regulatory perspective;
–
changes in legislation or regulation affecting Fannie Mae and
Freddie Mac (together, the “GSEs”) and similar federal
government agencies and related guarantees;
–
deterioration in credit quality and ratings of existing or future
issuances of GSE or Ginnie Mae Securities;
–
changes in legislation or regulation affecting exemptions for
mortgage REITs from regulation under the Investment
Company Act of 1940; and
–
increases in costs and other general competitive factors.
2 |
 Company Summary
Proven Strategy
Experienced
Management Team
Aligned with
Stockholders
Overview of Capstead Mortgage Corporation
•
Founded in 1985, Capstead is the oldest publicly-traded Agency mortgage
REIT. •
At September 30, 2012, we had a total investment portfolio of $14.31 billion,
supported by long- term investment capital of $1.66 billion levered 7.96
times.* •
Our five-year compound annual total return of 22.0% exceeded the Russell 2000
Index and the NAREIT Mortgage Index.**
•
We invest exclusively in residential adjustable-rate mortgage (ARM) securities
issued and guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae.
Agency-guaranteed mortgage securities are considered to have little, if
any, credit risk. •
Our focus on short-duration ARM securities augmented with 2-year interest
rate swap agreements differentiates us from our peers because ARM
securities reset to more current interest rates within
a
relatively
short
period
of
time.
This
allows
for
the
recovery
of
financing
spreads
diminished
during
periods
of
rising
interest
rates
and
smaller
fluctuations
in
portfolio
values
from
changes
in
interest rates compared to fixed-rate mortgage securities. With this
strategy, Capstead is recognized as the most defensively-positioned
Agency mortgage REIT from an interest rate risk perspective.
•
Our
prudently
leveraged
portfolio
provides
financial
flexibility
to
manage
changing
market
conditions.
•
Our top four executive officers have 85 years of combined mortgage finance
industry experience, including 80 years at Capstead.
•
We are self-managed with low operating costs and a focus on
performance-based compensation
for
our
executive
officers.
This
structure
greatly
enhances
the
alignment
of
management interests with those of our stockholders.
3
* Long-term
investment
capital
includes
stockholders’
equity
and
unsecured
borrowings,
net
of
investments
in
related
unconsolidated
affiliates.
** Compound annual growth rate is based on cumulative total returns assuming
an investment in Capstead was made September 30, 2007 and dividends were reinvested. |
 Market
Snapshot (dollars in thousands, except per share amounts)
4
Perpetual Preferred
Trust
Total Long
-Term
Common
Series A
Series B
Preferred
Investment Capital
NYSE Stock Ticker
CMO
CMOPRA
CMOPRB
Shares outstanding
(a)
98,956
186
16,493
Cost of preferred capital
(a)
11.44%
11.15%
8.49%
10.23%
Price as of October 26, 2012
$12.13
$22.25
$14.94
Book Value per common share
(a)
$13.88
Price as a multiple of
September
30,
2012
book value
87.4%
Recorded value
(a)
$1,374,835
$2,604
$186,388
$99,978
$1,663,805
Market capitalization
as of
October 26, 2012
$1,200,336
$4,139
$246,405
$99,978
$1,550,858
(a)
As of September
30, 2012
. |
 Capstead’s Prudent Use of Leverage
5
**
Borrowings under repurchase arrangements divided by long-term investment
capital. Portfolio leverage remained relatively stable during the third
quarter of 2012 at approximately eight times long-term investment
capital. In our view, borrowing at current levels represents an appropriate and prudent use of leverage
for an agency-guaranteed ARM securities portfolio in today’s market
conditions. During the quarter and nine months ending September 30,
2012, respectively, we raised $21 million and $142 million in new common
equity capital using our at-the-market continuous offering program. This program was
suspended with the October 30, 2012 announcement of a $100 million common stock buy
back program. ($ in millions)
Portfolio Leverage*
Long-Term Investment Capital
$860
$1,114
$1,127
$1,393
$1,502
$1,580
$1,664
67%
75%
75%
80%
81%
82%
83%
11%
21%
16%
16%
13%
12%
12%
7%
7%
9%
9%
12%
6%
6%
$
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
12/31/08
12/31/09
12/31/10
12/31/11
3/31/12
6/30/12
9/30/12
Common Stock
Preferred Stock
Trust Prefered Securities, net
7.85x
6.67x
6.91x
8.15x
8.05x
8.05x
7.96x
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
7.0x
8.0x
9.0x
12/31/08
12/31/09
12/31/10
12/31/11
3/31/12
6/30/12
9/30/12
$100
$189
$1,375
Common Stock
Preferred Stock
Trust Preferred Securities, net |
 28%
72%
42%
58%
Capstead’s Proven Short-Duration Investment Strategy
6
As of September 30, 2012
As of September 30, 2012
Low risk agency-guaranteed residential ARM securities financed primarily with
30-90 day “repo” borrowings, augmented with two-year
interest rate swap agreements for hedging purposes. Residential ARM Securities
Portfolio Repurchase Arrangements & Similar Borrowings
Total: $13.25 billion
* Based on fair market value as of the indicated balance sheet
date. Total: $14.30 billion*
•
Most of our securities are backed by well-seasoned mortgage
loans with coupon interest rates that reset at least annually or
begin doing so after an initial fixed-rate period of five years or
less.
•
We have long-term relationships with numerous lending
counterparties. As of September 30, 2012, we had borrowings
outstanding with 24 counterparties.
•
Third quarter 2012 borrowing rates averaged 41 basis points,
up from 37 basis points during the second quarter. Average
repo borrowing rates ended the quarter at 0.41% (0.56% after
considering currently-paying interest rate swaps).
•
At September 30, 2012 we held $3.70
billion notional amount
of currently-paying two-year
interest rate swaps requiring fixed
rate payments averaging 0.78% with average maturities of ten
months. An additional $2.30 billion notional amount of two-year
forward-starting swaps were held at quarter-end that will begin
requiring fixed rate payments averaging 0.50% for two-year
periods on various dates between October 2012 and October
2013.
•
The duration of our investment portfolio and related ‘repo’
borrowings was approximately 10½
months and 8 months,
respectively, at September 30, 2012. This resulted in a net
duration gap of approximately 2½
months. Duration is a
measure of market price sensitivity to interest rate movements.
Longer-to-Reset
ARMs
$5.96 Billion
Current-Reset
ARMs
$8.34 Billion
Borrowings Hedged with
Currently-Paying
Interest Rate Swaps
$3.70 Billion
(excludes forward-
starting swaps)
Unhedged
Borrowings
$9.55 Billion |
 Financing Spread Analysis
As of September 30, 2012 (unaudited)
7
7
2012
2011
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Yields on residential mortgage investments:
(a)
Cash yields
2.65%
2.71%
2.74%
2.77%
2.84%
2.97%
2.94%
Investment premium amortization
(0.79)
(0.67)
(0.60)
(0.66)
(0.67)
(0.59)
(0.58)
Adjusted yields
1.86
2.04
2.14
2.11
2.17
2.38
2.36
Related borrowing rates:
(b)
Unhedged borrowing rates
0.41
0.37
0.32
0.32
0.25
0.25
0.29
Fixed swap rates
0.78
0.80
0.85
0.90
0.98
1.02
1.07
Adjusted borrowing rates
0.56
0.54
0.49
0.54
0.57
0.55
0.59
Financing spreads on residential mortgage
investments
1.30
1.50
1.65
1.57
1.60
1.83
1.77
2012
2011
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Financing spreads on residential mortgage
investments
1.30%
1.50%
1.65%
1.57%
1.60%
1.83%
1.77%
Impact of yields on other interest-earning assets
*
(0.05)
(0.06)
(0.06)
(0.04)
(0.05)
(0.04)
(0.05)
Impact of
borrowing rates on
unsecured borrowings
and other interest-paying liabilities*
(0.06)
(0.07)
(0.07)
(0.07)
(0.08)
(0.09)
(0.10)
Total financing spreads
1.19
1.37
1.52
1.46
1.47
1.70
1.62
(a) Cash yields are based on the cash component of interest income.
Investment premium amortization is determined using the interest method and incorporates
actual and anticipated future mortgage prepayments. Both are expressed as a
percentage calculated on an annualized basis on average amortized cost basis
for the indicated periods.
(b)
Unhedged
borrowing
rates
represent
average
rates
on
repurchase
agreements
and
similar
borrowings.
Fixed
swap
rates
represent
the
average
fixed
rates
on
currently-paying interest rate swap agreements used to hedge short-term
borrowing rates. Adjusted borrowing rates reflect unhedged borrowing rates and
swap
rates
as
well
as
differences
between
variable
rate
payments
received
on
the
Company's
currently-paying
swap
agreements,
which
typically
are
based on
one-month LIBOR, and unhedged borrowing rates as well as any measured hedge
ineffectiveness, calculated on an annualized basis on average outstanding
balances for the indicated periods.
Financing
spreads
on
residential
mortgage
investments,
a
non-GAAP
financial
measure,
differs
from
total
financing
spreads,
an
all-inclusive
GAAP
measure, that is based on all interest-earning assets and all
interest-paying liabilities. The Company believes that presenting financing spreads on
residential
mortgage
investments
provides
useful
information
for
evaluating
the
performance
of
the
Company's
portfolio.
The
following
reconciles
these
two measures.
*
Other interest-earning assetsconsist of overnight investments and cash
collateral receivable from interest rate swap counterparties. Other interest-paying
liabilities consist of long-term unsecured borrowings (at a borrowing rate of
8.49%) that the Company considers a component of its long-term investment capital
and cash collateral payable to interest rate swap counterparties.
|
 Capstead’s Stockholder Friendly Structure
8
Quarter
Nine Months
Ended
Ended
Sept. 30, 2012
*
Sept. 30, 2012
*
Compensation-related expenses:
Fixed:
Salaries and related deferred compensation match,
payroll taxes, insurance and other benefits
0.22%
0.23%
Variable:
Incentive Compensation
**
0.19
0.31
64% and 70% of quarter and
Dividend Equivalent Rights
0.06
0.06
year-to-date compensation -
Performance Stock Awards
0.12
0.12
related expenses, respectively,
Related deferred compensation match and payroll taxes
0.02
0.04
were performance-based
0.39
0.53
0.61
0.76
Other platform expenses
0.27
0.28
0.88%
1.04%
*
Expressed as a percentage of average long-term investment capital (LTIC).
**
Incentive compensation is based on a 10% participation in returns on LTIC in excess
of benchmark returns (greater of 10% or the average 10-year Treasury rate
plus 2.0%), capped at 50 basis points of LTIC and subject to Compensation Committee
discretion. •
Self-managed with low operating costs.
•
Our
board
of
directors
requires
management
to
hold
a
significant
amount
of
CMO
stock
based
on
a
multiple of each executive’s base salary. Our most recent proxy
statement discloses that as of February 22, 2012 our directors and
executive officers beneficially owned 1.9% of our common shares. •
Pay structure is variable through compensation elements that focus on “pay for
performance.” •
Management is incented to grow the Company by issuing common equity capital when it
is accretive to book
value
and
earnings
as
opposed
to
increasing
compensation
or
external
management
fees.
•
Bottom line: our management prospers when our stockholders prosper.
|
 *
Net WAC, or weighted average coupon, is the weighted average interest rate of the
mortgage loans underlying the indicated investments, net of servicing and other fees, as of September 30,
2012. Net WAC is expressed as a percentage calculated on an annualized basis
on the unpaid principal balance of the mortgage loans underlying these investments. Fully indexed WAC
represents the weighted average coupon upon one or more resets using interest rate
indexes and net margins, as of September 30, 2012. Gross WAC is the weighted average interest rate of
the mortgage loans underlying the indicated investments, including servicing and
other fees paid by borrowers, as of September 30, 2012. NOTE: Excludes
$9 million of fixed-rate investments. Key Elements of Capstead’s ARM
Portfolio As of September 30, 2012 (dollars in thousands, unaudited)
9
9
Fully
Average
Months
Principal
Investment
Amortized Cost Basis
Fair Market
Net
Indexed
Net
to
Balance
Premiums
($)
%
Value
WAC*
WAC*
Margins
Roll
Current-reset ARMs:
Fannie Mae Agency Securities
$
5,245,789
$124,156
$
5,369,945
102.
37
$5,563,949
2.48%
2.38%
1.70%
5.0
Freddie Mac Agency Securities
1,893,205
52,414
1,945,619
102.
77
2,016,109
2.83
2.52
1.84
6.2
Ginnie Mae Agency Securities
729,351
16,575
745,926
10
2.27
760,018
2.46
1.70
1.51
6.6
Residential Mortgage L
oans
5,139
20
5,159
100.
39
5,22
9
3.51
2.45
2.04
4.5
7,873,
484
193,1
65
8,066,649
102.
45
8,345,305
2.56
2.35
1.71
5.4
Longer-to-reset ARMs:
Fannie Mae Agency Securities
2,920,898
113,555
3,034,453
103.
89
3,080,110
3.00
2.74
1.77
44.2
Freddie Mac Agency Securities
1,827,336
73,461
1,900,797
10
4.02
1,926,073
2.97
2.80
1.84
49.8
Ginnie Mae Agency Securities
898,895
33,757
932,652
103.
76
952,409
3.04
1.69
1.51
32.6
5,647,129
220,773
5,867,902
103.
91
5,958,592
3.00
2.59
1.75
44.1
$13,520,613
$413,9
38
$13,934,551
10
3.06
$14,303,897
2.74
2.45
1.73
21.6
Gross WAC
(rate
paid by borrow
ers)*
3.37 |
 Appendix
CAPSTEAD
10
******************
******************
******************
******************
****************** |
 Capstead’s Third Quarter 2012 Highlights
•
Earnings of $40.0 million or $0.35
per diluted common share.
•
Our average financing spreads on residential mortgage investments decreased 20 basis
points to 1.30%. •
Our book value increased $0.65 to $13.88 per common share.
•
We raised $21 million in new common equity capital using our at-the-market
continuous offering program contributing $0.01 to the increase in book value
per common share. •
Portfolio
leverage
remained
relatively
stable
during
the
quarter
at
approximately
eight
times
long-term
investment
capital.
•
Operating expense as a percentage of long-term investment capital decreased 18
basis points to 0.88%. •
Comments from our October 24, 2012 earnings press release:
“With
the
apparent
weakening
of
the
global
economy
and
the
recent
announcement
by
the
Federal
Reserve
Open
Market
Committee
of
a
significant
new
fixed-rate
mortgage
bond
buying
program
referred
to
as
QE3,
pricing
in
the
secondary
markets
for
agency-guaranteed
residential
mortgage
securities
of
all
durations,
including
ARM
securities,
has
risen
considerably.
While
favorable
to
reported
book
values,
higher
pricing
levels contribute to lower yields on new acquisitions and puts upward pressure on
mortgage prepayment rates as mortgage originators begin offering
lower
mortgage
rates
to
consumers.
During
the
third
quarter
the
portfolio
increased
$514
million
to
$14.31
billion
while
portfolio
leverage
declined slightly to 7.96 times our long-term investment capital, from 8.05
times at June 30, 2012 in large part due to increases in our book value as a
result of higher portfolio values. In our view, leverage of approximately eight to one represents an appropriate and prudent use of leverage
for an agency-guaranteed residential ARM securities portfolio in today’s
market conditions. “Mortgage prepayments for the third quarter of 2012
increased approximately 2.8 CPR to 18.7% CPR quarter over quarter reflecting lower
prevailing mortgage interest rates available to consumers as well as higher
seasonal prepayment patterns. This increase in prepayments contributed
to over $5 million in additional investment premium amortization, which
negatively impacted portfolio yields and net interest margins for the
quarter. While mortgage interest rates may continue declining as a consequence of QE3, we believe certain characteristics of our portfolio
lessen the risk of experiencing sharply higher prepayment levels. Central to
this belief, and the fundamental difference between our investment portfolio
and those of our peers, is our focus on investing solely in ARM securities. As of the end of the third quarter our portfolio was backed by
mortgages requiring borrowers to make payments predicated on rates averaging a
relatively low 3.37%, of which 56% were originated prior to 2009.
Mortgage
prepayments
on
securities
backed
by
more
seasoned
loans
have
been
partially
suppressed
by
low
housing
prices
and
credit
problems being experienced by many of these borrowers, even as prepayments on newer
originations have increased. As a result, many borrowers with mortgage
loans underlying securities in our portfolio lack the ability to meaningfully lower their mortgage payments even if they
can
overcome
all
of
these
impediments
to
refinancing.
For
these
reasons,
we
expect
mortgage
prepayments
will
remain
at
manageable
levels.
“With the weighted average coupons of an increasing number of mortgage loans
underlying our current-reset ARM securities approaching
fully-indexed
levels,
we
anticipate
the
impact
to
portfolio
yields
from
coupon
resets
to
be
relatively
modest
in
the
coming
quarters,
absent
significant
declines
in
six-
and
twelve-month
indices.
Though
slightly
higher
during
the
third
quarter,
our
borrowing
costs
remained
largely
in
check
reflecting
market
expectations
that
short-term
interest
rates
may
stay
at
extremely
low
levels
into
2015.
This
has
allowed
us
the
opportunity to continue to enter into forward-starting two-year interest
rate swap agreements at rates considerably lower than our currently-paying
swaps, most of which mature in 2013.
“We
remain
confident
in
and
focused
on
our
investment
strategy
of
managing
a
conservatively
leveraged
portfolio
of
agency-guaranteed
residential
ARM
securities
that
can
produce
attractive
risk-adjusted
returns
over
the
long
term
while
reducing,
but
not
eliminating,
sensitivity
to
changes in interest rates.”
11 |
 Capstead’s Quarterly Income Statements
(dollars in thousands, except per share amounts) (unaudited)
12
September
June
March
December
September
2012
2012
2012
2011
2011
Interest income:
Residential mortgage investments
63,463
$
65,787
$
65,733
$
63,910
$
62,890
$
Other
154
176
150
71
59
63,617
65,963
65,883
63,981
62,949
Interest expense:
Repurchase arrangements and similar borrowings
(17,875)
(16,451)
(14,103)
(15,556)
(15,744)
Unsecured borrowings
(2,186)
(2,187)
(2,187)
(2,187)
(2,186)
Other
-
-
-
-
-
(20,061)
(18,638)
(16,290)
(17,743)
(17,930)
43,556
47,325
49,593
46,238
45,019
Other revenue (expense):
Miscellaneous other revenue (expense)
9
13
(169)
(97)
(109)
Incentive compensation
(781)
(1,295)
(1,538)
(1,548)
(1,429)
Salaries and benefits
(1,696)
(1,682)
(1,827)
(1,698)
(1,631)
Other general and administrative expense
(1,115)
(1,091)
(954)
(992)
(911)
(3,583)
(4,055)
(4,488)
(4,335)
(4,080)
Income before equity in earnings of unconsolidated affiliates
39,973
43,270
45,105
41,903
40,939
Equity in earnings of unconsolidated affiliates
64
65
65
65
64
Net income
40,037
$
43,335
$
45,170
$
41,968
$
41,003
$
Net income per diluted common share
$0.35
$0.40
$0.44
$0.43
$0.43
Average long-term investment capital
1,629,566
$
1,544,380
$
1,454,495
$
1,370,471
$
1,350,693
$
Average balance of mortgage assets
13,657,286
12,922,725
12,280,065
12,111,091
11,609,545
Investment premium amortization
27,151
21,699
18,496
20,054
19,672
Average CPR*
Average financing spreads on residential mortgage investments
1.57 Quarter Ended
1.30
18.7%
1.50
15.9%
15.6%
1.60
16.9%
1.65
14.5% * The constant prepayment
rate, or CPR, represents only prepayments. |
 Capstead’s Annual Income Statements –
Five Years Ended 2011
(dollars in thousands, except per share amounts) (unaudited)
13
December
December
December
December
December
2011
2010
2009
2008
2007
Interest income:
Mortgage securities and similar investments
243,077
$
199,300
$
314,100
$
398,285
$
310,698
$
Other
301
478
495
2,204
945
243,378
199,778
314,595
400,489
311,643
Interest expense:
Repurchase arrangements and similar borrowings
(57,328)
(47,502)
(120,083)
(249,706)
(266,901)
Unsecured borrowings
(8,747)
(8,747)
(8,747)
(8,747)
(8,747)
Other
(5)
(2)
-
-
-
(66,080)
(56,251)
(128,830)
(258,453)
(275,648)
177,298
143,527
185,765
142,036
35,995
Other revenue (expense):
Miscellaneous other revenue (expense)
(1,023)
(904)
(40,641)
(1,593)
(6,394)
Incentive compensation
(5,697)
(5,055)
(4,769)
(6,000)
-
Salaries
and benefits (6,701)
(6,097)
(5,655)
(4,978)
(3,423)
Other general and administrative expense
(3,932)
(4,834)
(5,696)
(3,801)
(3,248)
(17,353)
(16,890)
(56,761)
(16,372)
(13,065)
Income before equity in earnings of unconsolidated affiliates
159,945
126,637
129,004
125,664
22,930
Equity in earnings of unconsolidated affiliates
259
259
259
259
1,783
Net income
160,204
$
126,896
$
129,263
$
125,923
$
24,713
$
Net income per diluted common share
$1.75
$1.52
$1.66
$1.93
$0.19
Average long-term investment capital
1,284,057
$
1,120,647
$
1,032,853
$
813,428
$
483,703
$
Average balance of mortgage assets
10,839,749
7,665,796
7,604,530
7,630,958
5,510,503
Investment premium amortization
68,077
57,634
29,426
29,336
24,091
Average CPR*
Average financing spreads on residential mortgage investments
29.1% Year Ended
16.0%
0.52
25.5%
2.40
16.6%
1.69
1.68
16.1%
1.94 * The constant prepayment
rate, or CPR, represents only prepayments. |
 Capstead’s Comparative Balance Sheets
(dollars in thousands, except per share amounts)
14
September 30,
December 31,
December 31,
December 31,
2012
2011
2010
2009
Assets
Residential mortgage investments
14,313,208
$
12,264,906
$
8,515,691
$
8,091,103
$
Cash collateral receivable from interest rate swap counterparties
57,737
48,505
35,289
30,485
Interest rate swap agreements at fair value
24
617
9,597
1,758
Cash and cash equivalents
500,741
426,717
359,590
409,623
Receivables and other assets
140,727
100,760
76,078
92,817
Investments in unconsolidated affiliates
3,117
3,117
3,117
3,117
15,015,554
$
12,844,622
$
8,999,362
$
8,628,903
$
Liabilities
Repurchase arrangements and similar borrowings
13,250,488
$
11,352,444
$
7,792,743
$
7,435,256
$
Cash collateral payable to interest rate swap counterparties
-
-
9,024
-
Interest rate swap agreements at fair value
41,199
31,348
16,337
9,218
Unsecured borrowings
103,095
103,095
103,095
103,095
Common stock dividend payable
36,173
38,184
27,401
37,432
Accounts payable and accrued expenses
20,772
26,844
23,337
29,961
13,451,727
11,551,915
7,971,937
7,614,962
Stockholders' Equity
Perpetual preferred stock
188,992
184,514
179,323
179,333
Common stock
1,046,621
903,653
674,202
661,724
Accumulated other comprehensive income (loss)
328,214
204,540
173,900
172,884
1,563,827
1,292,707
1,027,425
1,013,941
15,015,554
$
12,844,622
$
8,999,362
$
8,628,903
$
Book value per common share
liquidation preferences for the Series A and B preferred stock)
13.88
$12.52
$12.02
$11.99
Long-term investment capital
unsecured borrowings, net of investments in related
unconsolidated affiliates)
$1,663,805
$1,392,685
$1,127,403
$1,113,919
Portfolio leverage
divided by long-term investment capital)
7.96:1
8.15:1
6.91:1
6.67:1
(calculated
assuming
(stockholders‘
equity
and
(borrowings
under
repurchase
arrangements |
 Experienced Management Team
15
85 years of combined mortgage finance industry experience, including 80 years at
Capstead. Andrew F. Jacobs –
President and Chief Executive Officer, Director
–
Has served as president and chief executive officer since 2003 and has held various
executive positions at Capstead since 1988 –
Certified Public Accountant (“CPA”), member of the Board of Governors of
the National Association of Real Estate Investment Trusts
(“NAREIT”), chairman of NAREIT’s Council of Mortgage REITs, member
of the Executive Committee of the Chancellors Council of the University of
Texas System, the Executive Council of the Real Estate Finance and Investment Center at the University of Texas
at Austin, the American Institute of Certified Public Accountants
(“AICPA”), and the Financial Executives International (“FEI”)
Phillip A. Reinsch
–
Executive Vice President and Chief Financial Officer, Secretary
–
Has
held
various
financial
accounting
and
reporting
positions
at
Capstead
since
1993
–
Formerly employed by Ernst & Young LLP as an audit senior manager focusing on
mortgage banking and asset securitization –
CPA, Member AICPA, FEI
Robert A. Spears
–
Executive Vice President, Director of Residential Mortgage Investments
–
Has served in asset and liability management positions at Capstead since 1994
–
Formerly Vice President of secondary marketing with NationsBanc Mortgage
Corporation Michael W. Brown –
Senior Vice President, Asset and Liability Management, Treasurer
–
Has served in asset and liability management positions at Capstead since 1994
–
MBA, Southern Methodist University, Dallas, Texas |