Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 05, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'CAPSTEAD MORTGAGE CORP | ' |
Entity Central Index Key | '0000766701 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' |
Entity Voluntary Filers | 'No | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 95,810,735 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-14 | ' |
CONSOLIDATED_BALANCE_SHEETS_UN
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | Redeemable Preferred Stock [Member] | Redeemable Preferred Stock [Member] | ||
Cumulative Redeemable Preferred Stock, Series E [Member] | Cumulative Redeemable Preferred Stock, Series E [Member] | |||
Assets | ' | ' | ' | ' |
Residential mortgage investments ($13.40 and $13.12 billion pledged under repurchase arrangements at September 30, 2014 and December 31, 2013, respectively) | $13,722,281 | $13,475,874 | ' | ' |
Cash collateral receivable from interest rate swap counterparties | 42,716 | 25,502 | ' | ' |
Interest rate swap agreements at fair value | 2,397 | 5,005 | ' | ' |
Cash and cash equivalents | 438,622 | 413,356 | ' | ' |
Receivables and other assets | 117,436 | 96,231 | ' | ' |
Total Assets | 14,323,452 | 14,015,968 | ' | ' |
Liabilities | ' | ' | ' | ' |
Repurchase arrangements and similar borrowings | 12,749,762 | 12,482,900 | ' | ' |
Interest rate swap agreements at fair value | 18,276 | 11,304 | ' | ' |
Unsecured borrowings | 100,000 | 100,000 | ' | ' |
Common stock dividend payable | 34,040 | 30,872 | ' | ' |
Accounts payable and accrued expenses | 25,621 | 25,109 | ' | ' |
Total Liabilities | 12,927,699 | 12,650,185 | ' | ' |
Stockholders' equity | ' | ' | ' | ' |
Cumulative Preferred Stock | ' | ' | 182,102 | 165,756 |
Common stock - $0.01 par value; 250,000 shares authorized: 95,811 and 95,807 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively | 958 | 958 | ' | ' |
Paid-in capital | 1,327,595 | 1,329,792 | ' | ' |
Accumulated deficit | -346,885 | -349,866 | ' | ' |
Accumulated other comprehensive income | 231,983 | 219,143 | ' | ' |
Stockholders' Equity Attributable to Parent | 1,395,753 | 1,365,783 | ' | ' |
Total Liabilities and Equity | $14,323,452 | $14,015,968 | ' | ' |
CONSOLIDATED_BALANCE_SHEETS_UN1
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, except Per Share data, unless otherwise specified | Redeemable Preferred Stock [Member] | Redeemable Preferred Stock [Member] | ||
Cumulative Redeemable Preferred Stock, Series E [Member] | Cumulative Redeemable Preferred Stock, Series E [Member] | |||
Residential mortgage investments | $13,400,000 | $13,120,000 | ' | ' |
Common stock, par value (in dollars per share) | $0.01 | $0.01 | ' | ' |
Common stock, shares authorized (in shares) | 250,000 | 250,000 | ' | ' |
Common stock, shares issued (in shares) | 95,811 | 95,807 | ' | ' |
Common stock, shares outstanding (in shares) | 95,811 | 95,807 | ' | ' |
Preferred stock, shares authorized (in shares) | 100,000 | 100,000 | ' | ' |
Preferred stock, par value (in dollars per share) | $0.10 | $0.10 | ' | ' |
Preferred stock, shares issued (in shares) | ' | ' | 7,544 | 6,861 |
Preferred stock, shares outstanding (in shares) | ' | ' | 7,544 | 6,861 |
Preferred stock, aggregate liquidation preference | ' | ' | $188,593 | $171,521 |
Preferred stock, dividend rate (in hundredths) | ' | ' | 7.50% | ' |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Interest income: | ' | ' | ' | ' |
Residential mortgage investments | $53,862 | $46,643 | $170,399 | $156,683 |
Other | 78 | 48 | 216 | 267 |
Interest income | 53,940 | 46,691 | 170,615 | 156,950 |
Interest expense: | ' | ' | ' | ' |
Repurchase arrangements and similar borrowings | -16,099 | -15,759 | -47,048 | -50,976 |
Unsecured borrowings | -2,122 | -2,186 | -6,366 | -6,560 |
Interest expense | -18,221 | -17,945 | -53,414 | -57,536 |
Net interest income (expense) | 35,719 | 28,746 | 117,201 | 99,414 |
Other revenue (expense): | ' | ' | ' | ' |
Salaries and benefits | -999 | -1,017 | -3,116 | -2,904 |
Short-term incentive compensation | -613 | -1,333 | -1,550 | -2,213 |
Long term incentive compensation | -624 | -469 | -1,874 | -1,344 |
Other general and administrative expense | -1,058 | -1,203 | -3,228 | -3,382 |
Miscellaneous other revenue (expense) | -34 | -86 | -87 | -251 |
Operating expenses | -3,328 | -4,108 | -9,855 | -10,094 |
Income before equity in earnings of unconsolidated affiliates | 32,391 | 24,638 | 107,346 | 89,320 |
Equity in earnings of unconsolidated affiliates | 0 | 64 | 0 | 194 |
Net income | 32,391 | 24,702 | 107,346 | 89,514 |
Net income available to common stockholders: | ' | ' | ' | ' |
Net income | 32,391 | 24,702 | 107,346 | 89,514 |
Less dividends on preferred shares | -3,529 | -3,188 | -10,216 | -14,325 |
Less redemption preference premiums paid | 0 | 0 | 0 | -19,924 |
Net income (loss) available to common stockholders, basic, total | $28,862 | $21,514 | $97,130 | $55,265 |
Net income per common share: | ' | ' | ' | ' |
Basic (in dollars per share) | $0.30 | $0.23 | $1.02 | $0.58 |
Diluted (in dollars per share) | $0.30 | $0.23 | $1.02 | $0.58 |
Weighted average common shares outstanding: | ' | ' | ' | ' |
Basic (in dollars per share) | 95,405 | 95,268 | 95,384 | 95,139 |
Diluted (in dollars per share) | 95,677 | 95,416 | 95,614 | 95,373 |
Cash dividends declared per share: | ' | ' | ' | ' |
Common (in dollars per share) | $0.34 | $0.31 | $1.02 | $0.93 |
Cumulative Preferred Stock, Series A [Member] | ' | ' | ' | ' |
Cash dividends declared per share: | ' | ' | ' | ' |
Preferred stock Dividend (in dollars per share) | $0 | $0 | $0 | $0.72 |
Cumulative Convertible Preferred Stock, Series B [Member] | ' | ' | ' | ' |
Cash dividends declared per share: | ' | ' | ' | ' |
Preferred stock Dividend (in dollars per share) | $0 | $0 | $0 | $0.57 |
Cumulative Redeemable Preferred Stock, Series E [Member] | ' | ' | ' | ' |
Cash dividends declared per share: | ' | ' | ' | ' |
Preferred stock Dividend (in dollars per share) | $0.47 | $0.47 | $1.41 | $0.79 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Other comprehensive income (loss) | ' | ' | ' | ' |
Net income | $32,391 | $24,702 | $107,346 | $89,514 |
Amounts related to available-for-sale securities: | ' | ' | ' | ' |
Change in net unrealized gains | -10,720 | -27,539 | 22,465 | -104,037 |
Amounts related to cash flow hedges: | ' | ' | ' | ' |
Change in net unrealized losses | 97 | -10,867 | -25,557 | 9,136 |
Reclassification adjustment for amounts included in net income | 5,826 | 3,698 | 15,932 | 13,548 |
Other comprehensive income (loss) | -4,797 | -34,708 | 12,840 | -81,353 |
Comprehensive income (loss) | $27,594 | ($10,006) | $120,186 | $8,161 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Operating activities: | ' | ' |
Net income | $107,346 | $89,514 |
Noncash items: | ' | ' |
Amortization of investment premiums | 75,713 | 101,072 |
Amortization of equity-based awards | 2,074 | 1,640 |
Other depreciation and amortization | 104 | 124 |
Change in measureable hedge ineffectiveness related to interest rate swap agreements designated as cash flow hedges | -44 | -148 |
Net change in receivables, other assets, accounts payable and accrued expenses | -2,453 | 1,924 |
Net cash provided by operating activities | 182,740 | 194,126 |
Investing activities: | ' | ' |
Purchases of residential mortgage investments | -2,379,111 | -2,876,277 |
Interest receivable acquired with the purchase of residential mortgage investments | -3,776 | -4,824 |
Principal collections on residential mortgage investments, including changes in mortgage securities principal remittance receivable | 2,064,608 | 2,790,124 |
Net cash used in investing activities | -318,279 | -90,977 |
Financing activities: | ' | ' |
Proceeds from repurchase arrangements and similar borrowings | 101,952,385 | 107,161,141 |
Principal payments on repurchase arrangements and similar borrowings | -101,685,521 | -107,326,800 |
(Increase) decrease in cash collateral receivable from interest rate swap counterparties | -17,214 | 22,143 |
Cash paid to redeem Series A & B preferred shares | 0 | -207,033 |
Common share repurchases | 0 | -7,292 |
Proceeds from issuance of preferred shares | 16,346 | 164,310 |
Other capital stock transactions | -468 | -522 |
Dividends paid | -104,723 | -99,439 |
Net cash provided by (used in) financing activities | 160,805 | -293,492 |
Net change in cash and cash equivalents | 25,266 | -190,343 |
Cash and cash equivalents at beginning of period | 413,356 | 425,445 |
Cash and cash equivalents at end of period | $438,622 | $235,102 |
BUSINESS
BUSINESS | 9 Months Ended |
Sep. 30, 2014 | |
BUSINESS [Abstract] | ' |
BUSINESS | ' |
NOTE 1 ¾ BUSINESS | |
Capstead Mortgage Corporation operates as a self-managed real estate investment trust for federal income tax purposes (a “REIT”) and is based in Dallas, Texas. Unless the context otherwise indicates, Capstead Mortgage Corporation, together with its subsidiaries, is referred to as “Capstead” or the “Company.” Capstead earns income from investing in a leveraged portfolio of residential mortgage pass-through securities consisting almost exclusively of adjustable-rate mortgage (“ARM”) securities issued and guaranteed by government-sponsored enterprises, either Fannie Mae or Freddie Mac (together, the “GSEs”), or by an agency of the federal government, Ginnie Mae. Residential mortgage pass-through securities guaranteed by the GSEs or Ginnie Mae are referred to as “Agency Securities” and are considered to have limited, if any, credit risk. |
BASIS_OF_PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2014 | |
BASIS OF PRESENTATION [Abstract] | ' |
BASIS OF PRESENTATION | ' |
NOTE 2 ¾ BASIS OF PRESENTATION | |
Interim Financial Reporting and Reclassifications | |
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the quarter and nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the calendar year ending December 31, 2014. For further information refer to the audited consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2013. Certain prior period short- and long-term incentive compensation amounts have been reclassified from Salaries and benefits to separate line items in the Statements of Income to conform to the current year presentation. | |
Recent Accounting Pronouncements | |
In June 2014 the Financial Accounting Standards Board issued ASU 2014-11, Transfers and Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings and Disclosures (the “ASU”). The ASU requires repurchase-to-maturity transactions to be accounted for as financings and eliminates existing guidance regarding so-called “linked transactions” between a buyer of securities and a seller that also provides related repurchase financings. The ASU also introduces new disclosure requirements and is effective for periods beginning after December 15, 2014. Adoption of the ASU is not expected to have any effect on Capstead’s financial statements. |
NET_INCOME_PER_COMMON_SHARE
NET INCOME PER COMMON SHARE | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
NET INCOME PER COMMON SHARE [Abstract] | ' | ||||||||||||||||
NET INCOME PER COMMON SHARE | ' | ||||||||||||||||
NOTE 3 ¾ NET INCOME PER COMMON SHARE | |||||||||||||||||
Basic net income per common share is computed by dividing net income, after deducting preferred share dividends and adjusting for the impact of unvested stock awards deemed to be participating securities, by the weighted average number of common shares outstanding, calculated excluding unvested stock awards. | |||||||||||||||||
Diluted net income per common share is computed by dividing net income available to common stockholders, after adding dividends on the Company’s Series A and B convertible preferred shares (prior to their redemption in June 2013 and when such shares were dilutive), by the basic weighted average number of common shares and common share equivalents outstanding, giving effect to equity awards and convertible preferred shares when such awards and shares were dilutive. The Series A and B preferred shares were considered dilutive whenever basic net income per common share exceeded each Series’ dividend divided by the applicable conversion rates. Shares of the Company’s 7.50% Series E Cumulative Redeemable Preferred Stock first issued in May 2013 are contingently convertible into common shares only upon the occurrence of a change in control and are therefore not considered dilutive securities absent such an occurrence. Unvested stock awards that are deemed participating securities are included in the calculation of diluted net income per common share, if dilutive, under either the two-class method or the treasury stock method, depending upon which method produces the more dilutive result. Components of the computation of basic and diluted net income per common share for the indicated periods were as follows (dollars in thousands, except per share amounts): | |||||||||||||||||
Quarter Ended | Nine Months Ended | ||||||||||||||||
30-Sep | 30-Sep | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Basic net income per common share | |||||||||||||||||
Numerator for basic net income per common share: | |||||||||||||||||
Net income | $ | 32,391 | $ | 24,702 | $ | 107,346 | $ | 89,514 | |||||||||
Redemption premiums paid on Series A and Series B preferred shares* | – | – | – | (19,924 | ) | ||||||||||||
Preferred share dividends | (3,529 | ) | (3,188 | ) | (10,216 | ) | (14,325 | ) | |||||||||
Earnings participation of unvested stock awards | (24 | ) | (32 | ) | (58 | ) | (96 | ) | |||||||||
$ | 28,838 | $ | 21,482 | $ | 97,072 | $ | 55,169 | ||||||||||
Denominator for basic net income per common share: | |||||||||||||||||
Weighted average common shares outstanding | 95,793 | 95,761 | 95,779 | 95,647 | |||||||||||||
Average unvested stock awards outstanding | (388 | ) | (493 | ) | (395 | ) | (508 | ) | |||||||||
95,405 | 95,268 | 95,384 | 95,139 | ||||||||||||||
$ | 0.3 | $ | 0.23 | $ | 1.02 | $ | 0.58 | ||||||||||
Diluted net income per common share | |||||||||||||||||
Numerator for diluted net income per common share: | |||||||||||||||||
Net income available to common stockholders | $ | 28,838 | $ | 21,482 | $ | 97,072 | $ | 55,169 | |||||||||
Dividends on dilutive convertible preferred shares | – | – | – | 44 | |||||||||||||
$ | 28,838 | $ | 21,482 | $ | 97,072 | $ | 55,213 | ||||||||||
Denominator for diluted net income per common share: | |||||||||||||||||
Basic weighted average common shares outstanding | 95,405 | 95,268 | 95,384 | 95,139 | |||||||||||||
Net effect of dilutive equity awards | 272 | 148 | 230 | 133 | |||||||||||||
Net effect of dilutive convertible preferred shares | – | – | – | 101 | |||||||||||||
95,677 | 95,416 | 95,614 | 95,373 | ||||||||||||||
$ | 0.3 | $ | 0.23 | $ | 1.02 | $ | 0.58 | ||||||||||
Potentially dilutive securities excluded from the computation of net income per share because the effect of inclusion was antidilutive were as follows (in thousands): | |||||||||||||||||
Quarter Ended | Nine Months Ended | ||||||||||||||||
30-Sep | 30-Sep | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Antidilutive convertible preferred shares* | – | – | – | 16,539 | |||||||||||||
Antidilutive equity awards excludable under the treasury stock method | – | 35 | – | 35 | |||||||||||||
* | The Series A and Series B preferred shares were redeemed in June 2013 (See NOTE 9). |
RESIDENTIAL_MORTGAGE_INVESTMEN
RESIDENTIAL MORTGAGE INVESTMENTS | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
RESIDENTIAL MORTGAGE INVESTMENTS [Abstract] | ' | ||||||||||||||||||||||||
RESIDENTIAL MORTGAGE INVESTMENTS | ' | ||||||||||||||||||||||||
NOTE 4 ¾ RESIDENTIAL MORTGAGE INVESTMENTS | |||||||||||||||||||||||||
Residential mortgage investments classified by collateral type and interest rate characteristics as of the indicated dates were as follows (dollars in thousands): | |||||||||||||||||||||||||
Unpaid | Investment Premiums | Amortized Cost Basis | Carrying | Net | Average | ||||||||||||||||||||
Principal | Amount (a) | WAC (b) | Yield(b) | ||||||||||||||||||||||
Balance | |||||||||||||||||||||||||
30-Sep-14 | |||||||||||||||||||||||||
Agency Securities: | |||||||||||||||||||||||||
Fannie Mae/Freddie Mac: | |||||||||||||||||||||||||
Fixed-rate | $ | 1,717 | $ | 5 | $ | 1,722 | $ | 1,724 | 6.64 | % | 6.17 | % | |||||||||||||
ARMs | 10,377,592 | 334,371 | 10,711,963 | 10,948,745 | 2.53 | 1.62 | |||||||||||||||||||
Ginnie Mae ARMs | 2,660,875 | 92,454 | 2,753,329 | 2,764,458 | 2.65 | 1.5 | |||||||||||||||||||
13,040,184 | 426,830 | 13,467,014 | 13,714,927 | 2.56 | 1.6 | ||||||||||||||||||||
Residential mortgage loans: | |||||||||||||||||||||||||
Fixed-rate | 1,896 | 2 | 1,898 | 1,898 | 6.97 | 5.76 | |||||||||||||||||||
ARMs | 3,373 | 14 | 3,387 | 3,387 | 3.86 | 2.89 | |||||||||||||||||||
5,269 | 16 | 5,285 | 5,285 | 4.97 | 3.84 | ||||||||||||||||||||
Collateral for structured financings | 2,035 | 34 | 2,069 | 2,069 | 8.1 | 7.64 | |||||||||||||||||||
$ | 13,047,488 | $ | 426,880 | $ | 13,474,368 | $ | 13,722,281 | 2.56 | 1.6 | ||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||
Agency Securities: | |||||||||||||||||||||||||
Fannie Mae/Freddie Mac: | |||||||||||||||||||||||||
Fixed-rate | $ | 2,158 | $ | 6 | $ | 2,164 | $ | 2,167 | 6.67 | % | 6.47 | % | |||||||||||||
ARMs | 10,675,620 | 343,452 | 11,019,072 | 11,231,057 | 2.58 | 1.76 | |||||||||||||||||||
Ginnie Mae ARMs | 2,145,639 | 74,396 | 2,220,035 | 2,233,495 | 2.64 | 1.64 | |||||||||||||||||||
12,823,417 | 417,854 | 13,241,271 | 13,466,719 | 2.59 | 1.74 | ||||||||||||||||||||
Residential mortgage loans: | |||||||||||||||||||||||||
Fixed-rate | 2,633 | 3 | 2,636 | 2,636 | 6.99 | 5.63 | |||||||||||||||||||
ARMs | 4,244 | 18 | 4,262 | 4,262 | 3.81 | 3.35 | |||||||||||||||||||
6,877 | 21 | 6,898 | 6,898 | 5.03 | 4.2 | ||||||||||||||||||||
Collateral for structured financings | 2,220 | 37 | 2,257 | 2,257 | 8.09 | 7.68 | |||||||||||||||||||
$ | 12,832,514 | $ | 417,912 | $ | 13,250,426 | $ | 13,475,874 | 2.59 | 1.74 | ||||||||||||||||
(a) | Includes unrealized gains and losses for residential mortgage investments classified as available-for-sale (see NOTE 10). | ||||||||||||||||||||||||
(b) | 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 the indicated balance sheet date. Net WAC is expressed as a percentage calculated on an annualized basis on the unpaid principal balances of the mortgage loans underlying these investments. Average yield is presented for the quarter then ended, and is based on the cash component of interest income expressed as a percentage calculated on an annualized basis on average amortized cost basis (the “cash yield”) less the effects of amortizing investment premiums. Investment premium amortization is determined using the interest method and incorporates actual and anticipated future mortgage prepayments. | ||||||||||||||||||||||||
Because of federal government support for the GSEs, Agency Securities are considered to have limited, if any, credit risk. Residential mortgage loans held by Capstead were originated prior to 1995 when the Company operated a mortgage conduit and the related credit risk is borne by the Company. Collateral for structured financings consists of private residential mortgage securities that are backed by loans obtained through this mortgage conduit and are pledged to secure repayment of related structured financings. Credit risk for these securities is borne by the related bondholders. The maturity of Residential mortgage investments is directly affected by prepayments of principal on the underlying mortgage loans. Consequently, actual maturities will be significantly shorter than the portfolio’s weighted average contractual maturity of 289 months. | |||||||||||||||||||||||||
Fixed-rate investments consist of residential mortgage loans and Agency Securities backed by residential mortgage loans with fixed rates of interest. Adjustable-rate investments generally are ARM Agency Securities backed by residential mortgage loans that have coupon interest rates that adjust at least annually to more current interest rates or begin doing so after an initial fixed-rate period. After the initial fixed-rate period, if applicable, mortgage loans underlying ARM securities typically either (i) adjust annually based on specified margins over the one-year Constant Maturity U.S. Treasury Note Rate (“CMT”) or the one-year London interbank offered rate (“LIBOR”), (ii) adjust semiannually based on specified margins over six-month LIBOR, or (iii) adjust monthly based on specified margins over indices such as one-month LIBOR, the Eleventh District Federal Reserve Bank Cost of Funds Index, or over a rolling twelve month average of the one-year CMT index, usually subject to periodic and lifetime limits, or caps, on the amount of such adjustments during any single interest rate adjustment period and over the contractual term of the underlying loans. | |||||||||||||||||||||||||
Capstead classifies its ARM securities based on each security’s average number of months until coupon reset (“months to roll”). Months to roll is an indicator of asset duration which is a measure of market price sensitivity to interest rate movements. A shorter duration generally indicates less interest rate risk. Current-reset ARM securities have months to roll of less than 18 months while longer-to-reset ARM securities have months to roll of 18 months or greater. As of September 30, 2014, the average months to roll for the Company’s $7.61 billion (amortized cost basis) in current-reset ARM securities was 6.2 months while the average months-to-roll for the Company’s $5.86 billion (amortized cost basis) in longer-to-reset ARM securities was 39.8 months. | |||||||||||||||||||||||||
INVESTMENTS_IN_UNCONSOLIDATED_
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | 9 Months Ended |
Sep. 30, 2014 | |
INVESTMENTS IN UNCONSOLIDATED AFFILIATES [Abstract] | ' |
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | ' |
NOTE 5 ¾ INVESTMENTS IN UNCONSOLIDATED AFFILIATES | |
To facilitate the issuance of Unsecured borrowings, in 2006 and 2005 Capstead formed and capitalized three Delaware statutory trusts through the issuance to the Company of the trusts’ common securities totaling $3.1 million (see NOTE 8). In December 2013 the Company simplified its capital structure by dissolving the trusts and distributing the related junior subordinated notes (originally issued to the trusts by the Company) to the holders of the trusts’ common and preferred securities. Prior to dissolution, the Company’s equity in the earnings of the trusts consisted solely of the common trust securities’ pro rata share in interest accruing on junior subordinated notes issued to the trusts. |
REPURCHASE_ARRANGEMENTS_AND_SI
REPURCHASE ARRANGEMENTS AND SIMILAR BORROWINGS | 9 Months Ended | |||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||
REPURCHASE ARRANGEMENTS AND SIMILAR BORROWINGS [Abstract] | ' | |||||||||||||||||
REPURCHASE ARRANGEMENTS AND SIMILAR BORROWINGS | ' | |||||||||||||||||
NOTE 6 ¾ REPURCHASE ARRANGEMENTS AND SIMILAR BORROWINGS | ||||||||||||||||||
Capstead pledges its Residential mortgage investments as collateral under repurchase arrangements with commercial banks and other financial institutions, referred to as counterparties, the terms and conditions of which are negotiated on a transaction-by-transaction basis when each such borrowing is initiated or renewed. Repurchase arrangements entered into by the Company involve the sale and a simultaneous agreement to repurchase the transferred assets at a future date, typically with terms of 30 to 90 days, and are accounted for as borrowings. The Company maintains the beneficial interest in the specific securities pledged during the borrowing’s term of the repurchase arrangement and receives the related principal and interest payments. The amount borrowed is generally equal to the fair value of the assets pledged, as determined by the lending counterparty, less an agreed-upon discount, referred to as a “haircut.” Interest rates on these borrowings are fixed based on prevailing rates corresponding to the terms of the borrowings, and interest is paid at the termination of the repurchase arrangement at which time the Company may enter into a new repurchase arrangement at prevailing haircuts and rates with the same counterparty or repay that counterparty and negotiate financing with a different counterparty. None of the Company’s counterparties are obligated to renew or otherwise enter into new repurchase arrangements at the conclusion of existing repurchase arrangements. In response to declines in fair value of pledged securities due to changes in market conditions or the publishing of monthly security pay down factors, lenders typically require the Company to post additional securities as collateral, pay down borrowings or fund cash margin accounts with the counterparties in order to re-establish the agreed-upon collateral requirements. These actions are referred to as margin calls. Conversely, in response to increases in fair value of pledged securities, the Company routinely margin calls its lending counterparties in order to release posted collateral. | ||||||||||||||||||
Repurchase arrangements and similar borrowings (and related pledged collateral, including accrued interest receivable), classified by collateral type and remaining maturities, and related weighted average borrowing rates as of the indicated dates were as follows (dollars in thousands): | ||||||||||||||||||
Collateral Type | Collateral | Accrued | Borrowings | Average | ||||||||||||||
Carrying | Interest | Outstanding | Borrowing | |||||||||||||||
Amount | Receivable | Rates | ||||||||||||||||
30-Sep-14 | ||||||||||||||||||
Borrowings with maturities of 30 days or less: | ||||||||||||||||||
Agency Securities | $ | 11,007,943 | $ | 22,583 | $ | 10,471,646 | 0.3 | % | ||||||||||
Borrowings with maturities greater than 30 days: | ||||||||||||||||||
Agency Securities (31 to 90 days) | 519,510 | 1,099 | 497,530 | 0.31 | ||||||||||||||
Agency Securities (greater than 90 days) | 1,870,094 | 3,927 | 1,778,517 | 0.52 | ||||||||||||||
Similar borrowings: | ||||||||||||||||||
Collateral for structured financings* | 2,069 | – | 2,069 | 8.1 | ||||||||||||||
$ | 13,399,616 | $ | 27,609 | $ | 12,749,762 | 0.33 | ||||||||||||
Quarter-end borrowing rates adjusted for effects of related derivative financial instruments (“Derivatives”) held as cash flow hedges (see NOTE 7) | 0.52 | |||||||||||||||||
31-Dec-13 | ||||||||||||||||||
Borrowings with maturities of 30 days or less: | ||||||||||||||||||
Agency Securities | $ | 12,169,534 | $ | 28,195 | $ | 11,578,211 | 0.38 | % | ||||||||||
Borrowings with maturities greater than 30 days: | ||||||||||||||||||
Agency Securities (31 to 90 days) | 951,966 | 2,068 | 902,432 | 0.38 | ||||||||||||||
Similar borrowings: | ||||||||||||||||||
Collateral for structured financings* | 2,257 | – | 2,257 | 8.09 | ||||||||||||||
$ | 13,123,757 | $ | 30,263 | $ | 12,482,900 | 0.38 | ||||||||||||
Quarter-end borrowing rates adjusted for effects of related Derivatives held as cash flow hedges | 0.49 | |||||||||||||||||
* | The maturity of structured financings is directly affected by prepayments on the related mortgage pass-through securities pledged as collateral. Additionally, these financings are subject to redemption by the residual bondholders. | |||||||||||||||||
Average borrowings outstanding differed from respective quarter-end balances during the indicated periods primarily due to changes in portfolio levels and differences in the timing of portfolio acquisitions relative to portfolio runoff as illustrated below (dollars in thousands): | ||||||||||||||||||
Quarter Ended | ||||||||||||||||||
30-Sep-14 | 31-Dec-13 | |||||||||||||||||
Average | Average | Average | Average | |||||||||||||||
Borrowings | Rate | Borrowings | Rate | |||||||||||||||
Average borrowings and rates adjusted for the effects of related Derivatives held as cash flow hedges for the indicated quarters | $ | 12,690,463 | 0.51 | % | $ | 12,510,701 | 0.49% |
USE_OF_DERIVATIVE_FINANCIAL_IN
USE OF DERIVATIVE FINANCIAL INSTRUMENTS, OFFSETTING DISCLOSURES AND CHANGES IN OTHER COMPREHENSIVE INCOME BY COMPONENT | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
USE OF DERIVATIVE FINANCIAL INSTRUMENTS, OFFSETTING DISCLOSURES AND CHANGES IN OTHER COMPREHENSIVE INCOME BY COMPONENT [Abstract] | ' | ||||||||||||||||||||||||
USE OF DERIVATIVE FINANCIAL INSTRUMENTS, OFFSETTING DISCLOSURES AND CHANGES IN OTHER COMPREHENSIVE INCOME BY COMPONENT | ' | ||||||||||||||||||||||||
NOTE 7 ¾ USE OF DERIVATIVE FINANCIAL INSTRUMENTS, OFFSETTING DISCLOSURES AND CHANGES IN OTHER COMPREHENSIVE INCOME BY COMPONENT | |||||||||||||||||||||||||
To help mitigate exposure to higher interest rates, Capstead typically uses currently-paying and forward-starting, one-month LIBOR-indexed, pay-fixed, receive-variable, interest rate swap agreements that require interest payments for two-year terms. These Derivatives are designated as cash flow hedges of the variability of the underlying benchmark interest rate of current and forecasted 30- to 90-day borrowings under repurchase arrangements. This hedge relationship establishes a relatively stable fixed rate on related borrowings because the variable-rate payments received on the swap agreements offset a significant portion of the interest accruing on the related borrowings, leaving the fixed-rate swap payments as the Company’s effective borrowing rate, subject to certain adjustments. These adjustments include differences between variable rate payments received on the swap agreements and related unhedged borrowing rates as well as the effects of measured hedge ineffectiveness. Additionally, changes in fair value of these Derivatives tend to partially offset opposing changes in fair value of the Company’s residential mortgage investments that can occur in response to changes in market interest rates. | |||||||||||||||||||||||||
During the quarter and nine months ended September 30, 2014 Capstead entered into new forward-starting swap agreements with notional amounts totaling $500 million and $1.90 billion, respectively. These swap agreements require fixed rate interest payments averaging 0.72% and 0.61%, respectively, for two-year periods commencing on various dates between April 2014 and January 2015. Also during these periods, $200 million and $800 million notional amount of swaps requiring fixed rate interest payments averaging 0.51% and 0.53%, respectively, matured, while $700 million and $3.50 billion notional amount of previously-acquired, forward-starting swaps requiring fixed rate interest payments averaging 0.56% and 0.51%, respectively, moved into current-pay status. At September 30, 2014, the Company’s portfolio of financing-related swap positions had the following characteristics (dollars in thousands): | |||||||||||||||||||||||||
Period of Contract Expiration | Notional | Average Fixed Rate | |||||||||||||||||||||||
Amount | Payment Requirement | ||||||||||||||||||||||||
Currently-paying contracts: | |||||||||||||||||||||||||
Fourth quarter 2014 | $ | 500,000 | 0.58 | % | |||||||||||||||||||||
First quarter 2015 | 1,100,000 | 0.5 | |||||||||||||||||||||||
Second quarter 2015 | 200,000 | 0.43 | |||||||||||||||||||||||
Third quarter 2015 | 400,000 | 0.47 | |||||||||||||||||||||||
Fourth quarter 2015 | 1,200,000 | 0.45 | |||||||||||||||||||||||
First quarter 2016 | 1,700,000 | 0.51 | |||||||||||||||||||||||
Second quarter 2016 | 1,100,000 | 0.47 | |||||||||||||||||||||||
Third quarter 2016 | 700,000 | 0.56 | |||||||||||||||||||||||
(average expiration: 13 months) | 6,900,000 | 0.5 | |||||||||||||||||||||||
Forward-starting contracts: | |||||||||||||||||||||||||
Fourth quarter 2016 | 800,000 | 0.66 | |||||||||||||||||||||||
First quarter 2017 | 100,000 | 0.9 | |||||||||||||||||||||||
(average expiration: 24 months) | 900,000 | 0.69 | |||||||||||||||||||||||
(average expiration: 14 months) | $ | 7,800,000 | |||||||||||||||||||||||
In addition to portfolio financing-related swap positions, in 2010 the Company entered into three forward-starting, three-month LIBOR-indexed, pay-fixed, receive-variable, interest rate swap agreements with notional amounts totaling $100 million and average fixed rates of 4.09% with 20-year payment terms coinciding with the floating-rate terms of the Company’s Unsecured borrowings which begin between October 2015 and September 2016. These Derivatives are designated as cash flow hedges of the variability of the underlying benchmark interest rate associated with the floating-rate terms of these long-term borrowings (see NOTE 8). | |||||||||||||||||||||||||
Interest rate swap agreements are measured at fair value on a recurring basis primarily using Level Two Inputs in accordance with “Fair Value Measurements and Disclosures” (“ASC 820”). In determining fair value estimates for these Derivatives, Capstead utilizes the standard methodology of netting the discounted future fixed cash payments and the discounted future variable cash receipts which are based on expected future interest rates derived from observable market interest rate curves. The Company also incorporates both its own nonperformance risk and its counterparties’ nonperformance risk in determining the fair value of these Derivatives. In considering the effect of nonperformance risk, the Company considered the impact of netting and credit enhancements, such as collateral postings and guarantees, and has concluded that counterparty risk is not significant to the overall valuation of these agreements. | |||||||||||||||||||||||||
The following tables include fair value and other related disclosures regarding all Derivatives held as of and for the indicated periods (in thousands): | |||||||||||||||||||||||||
Balance Sheet | September 30, | December 31, | |||||||||||||||||||||||
Location | 2014 | 2013 | |||||||||||||||||||||||
Balance sheet-related | |||||||||||||||||||||||||
Swap agreements in a gain position (an asset) related to: | |||||||||||||||||||||||||
Borrowings under repurchase arrangements | (a) | $ | 2,397 | $ | 1,094 | ||||||||||||||||||||
Unsecured borrowings | (a) | – | 3,911 | ||||||||||||||||||||||
Swap agreements in a loss position (a liability) related to: | |||||||||||||||||||||||||
Borrowings under repurchase arrangements | (a) | (7,026 | ) | (11,304 | ) | ||||||||||||||||||||
Unsecured borrowings | (a) | (11,250 | ) | – | |||||||||||||||||||||
Related net interest payable | (b) | (8,916 | ) | (5,493 | ) | ||||||||||||||||||||
$ | (24,795 | ) | $ | (11,792 | ) | ||||||||||||||||||||
(a) | The fair value of Derivatives with realized and unrealized gains are aggregated and recorded as an asset on the face of the Balance Sheets separately from the fair value of Derivatives with realized and unrealized losses that are recorded as a liability. The amount of unrealized losses scheduled to be recognized in the Statements of Income over the next twelve months primarily in the form of fixed-rate swap payments in excess of current market rates totaled $15.5 million at September 30, 2014. | ||||||||||||||||||||||||
(b) | Included in “Accounts payable and accrued expenses” on the face of the Balance Sheets. | ||||||||||||||||||||||||
Location of | |||||||||||||||||||||||||
Gain or (Loss) | |||||||||||||||||||||||||
Recognized | Quarter Ended | Nine Months Ended | |||||||||||||||||||||||
in | 30-Sep | 30-Sep | |||||||||||||||||||||||
Net Income | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
Income statement-related | |||||||||||||||||||||||||
Components of effect on interest expense: | |||||||||||||||||||||||||
Amount of loss reclassified from Accumulated other comprehensive income related to the effective portion of active positions | $ | (5,826 | ) | $ | (3,698 | ) | $ | (15,932 | ) | $ | (13,548 | ) | |||||||||||||
Amount of gain (loss) recognized (ineffective portion) | 45 | (23 | ) | (123 | ) | 73 | |||||||||||||||||||
Increase in interest expense and decrease in Net income as a result of the use of Derivatives | * | $ | (5,781 | ) | $ | (3,721 | ) | $ | (16,055 | ) | $ | (13,475 | ) | ||||||||||||
Other comprehensive income-related | |||||||||||||||||||||||||
Amount of gain (loss) recognized in Other comprehensive income(loss) (effective portion) | $ | 97 | $ | (10,867 | ) | $ | (25,557 | ) | $ | 9,136 | |||||||||||||||
* | Included in “Interest expense: Repurchase arrangements and similar borrowings” on the face of the Statements of Income. | ||||||||||||||||||||||||
Capstead’s swap agreements and borrowings under repurchase arrangements are subject to master netting arrangements in the event of default on, or termination of, any one contract. See NOTE 6 for more information on the Company’s use of repurchase arrangements. The following tables provide disclosures concerning offsetting of financial liabilities and Derivatives as of the indicated dates (in thousands): | |||||||||||||||||||||||||
Offsetting of Derivative Assets | |||||||||||||||||||||||||
Gross | Net Amounts | Gross Amounts Not Offset | |||||||||||||||||||||||
Gross | Amounts | of Assets | in the Balance Sheet(a) | ||||||||||||||||||||||
Amounts of | Offset in | Presented in | Cash | ||||||||||||||||||||||
Recognized | the Balance | the Balance | Financial | Collateral | Net | ||||||||||||||||||||
Assets | Sheet | Sheet | Instruments | Received | Amount | ||||||||||||||||||||
As of September 30, 2014: | |||||||||||||||||||||||||
Counterparty 2 | $ | – | $ | 262 | $ | 262 | $ | (262 | ) | $ | – | $ | – | ||||||||||||
Counterparty 4 | 1,373 | 762 | 2,135 | (2,135 | ) | – | – | ||||||||||||||||||
$ | 1,373 | $ | 1,024 | $ | 2,397 | $ | (2,397 | ) | $ | – | $ | – | |||||||||||||
As of December 31, 2013: | |||||||||||||||||||||||||
Counterparty 1 | $ | 3,911 | $ | – | $ | 3,911 | $ | (3,911 | ) | $ | – | $ | – | ||||||||||||
Counterparty 2 | 634 | – | 634 | (634 | ) | – | – | ||||||||||||||||||
Counterparty 4 | 460 | – | 460 | (460 | ) | – | – | ||||||||||||||||||
$ | 5,005 | $ | – | $ | 5,005 | $ | (5,005 | ) | $ | – | $ | – | |||||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||||||||||||||||||
Gross | Net Amounts | Gross Amounts Not Offset | |||||||||||||||||||||||
Gross | Amounts | of Liabilities | in the Balance Sheet (c) | ||||||||||||||||||||||
Amounts of | Offset in | Presented in | Cash | ||||||||||||||||||||||
Recognized | the Balance | the Balance | Financial | Collateral | Net | ||||||||||||||||||||
Liabilities(b) | Sheet | Sheet (a) | Instruments | Pledged | Amount | ||||||||||||||||||||
As of September 30, 2014: | |||||||||||||||||||||||||
Derivatives by counterparty: | |||||||||||||||||||||||||
Counterparty 1 | $ | 15,785 | $ | – | $ | 15,785 | $ | – | $ | (15,785 | ) | $ | – | ||||||||||||
Counterparty 2 | 5,316 | 262 | 5,578 | (262 | ) | (5,316 | ) | – | |||||||||||||||||
Counterparty 3 | 620 | – | 620 | – | (620 | ) | – | ||||||||||||||||||
Counterparty 4 | 4,447 | 762 | 5,209 | (2,135 | ) | (3,074 | ) | – | |||||||||||||||||
26,168 | 1,024 | 27,192 | (2,397 | ) | (24,795 | ) | – | ||||||||||||||||||
Repurchase arrangements and similar borrowings | 12,752,311 | – | 12,752,311 | (12,752,311 | ) | – | – | ||||||||||||||||||
$ | 12,778,479 | $ | 1,024 | $ | 12,779,503 | $ | (12,754,708 | ) | $ | (24,795 | ) | $ | – | ||||||||||||
As of December 31, 2013: | |||||||||||||||||||||||||
Derivatives by counterparty: | |||||||||||||||||||||||||
Counterparty 1 | $ | 6,002 | $ | – | $ | 6,002 | $ | (3,911 | ) | $ | (2,091 | ) | $ | – | |||||||||||
Counterparty 2 | 6,352 | – | 6,352 | (634 | ) | (5,718 | ) | – | |||||||||||||||||
Counterparty 3 | 1,581 | – | 1,581 | – | (1,581 | ) | – | ||||||||||||||||||
Counterparty 4 | 2,862 | – | 2,862 | (460 | ) | (2,402 | ) | – | |||||||||||||||||
16,797 | – | 16,797 | (5,005 | ) | (11,792 | ) | – | ||||||||||||||||||
Repurchase arrangements and similar borrowings | 12,487,604 | – | 12,487,604 | (12,487,604 | ) | – | – | ||||||||||||||||||
$ | 12,504,401 | $ | – | $ | 12,504,401 | $ | (12,492,609 | ) | $ | (11,792 | ) | $ | – | ||||||||||||
(a) | Amounts presented are limited to recognized liabilities and cash collateral received associated with the indicated counterparty sufficient to reduce the related Net Amount to zero in accordance with ASU No. 2011-11, as amended by ASU No. 2013-01. | ||||||||||||||||||||||||
(b) | Amounts include accrued interest of $8.9 million and $5.5 million on interest rate swap agreements and $2.5 million and $4.7 million on repurchase arrangements and similar borrowings, included in “Accounts payable and accrued expenses” on the face of the Balance Sheets as of September 30, 2014 and December 31, 2013, respectively. | ||||||||||||||||||||||||
(c) | Amounts presented are limited to recognized assets and collateral pledged associated with the indicated counterparty sufficient to reduce the related Net Amount to zero in accordance with ASU No. 2011-11, as amended by ASU No. 2013-01. | ||||||||||||||||||||||||
Changes in Accumulated other comprehensive income by component for the quarter and nine months ended September 30, 2014 were as follows (in thousands): | |||||||||||||||||||||||||
Gains and Losses | Unrealized Gains | Total | |||||||||||||||||||||||
on Cash Flow Hedges | and Losses on | ||||||||||||||||||||||||
Available-for-Sale Securities | |||||||||||||||||||||||||
Balance at June 30, 2014 | $ | (21,853 | ) | $ | 258,633 | $ | 236,780 | ||||||||||||||||||
Activity for the quarter ended September 30, 2014: | |||||||||||||||||||||||||
Other comprehensive income (loss) before reclassifications | 97 | (10,720 | ) | (10,623 | ) | ||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income | 5,826 | – | 5,826 | ||||||||||||||||||||||
Other comprehensive income (loss) | 5,923 | (10,720 | ) | (4,797 | ) | ||||||||||||||||||||
Balance at September 30, 2014 | $ | (15,930 | ) | $ | 247,913 | $ | 231,983 | ||||||||||||||||||
Balance at December 31, 2013 | $ | (6,305 | ) | $ | 225,448 | $ | 219,143 | ||||||||||||||||||
Activity for the nine months ended September 30, 2014: | |||||||||||||||||||||||||
Other comprehensive income (loss) before reclassifications | (25,557 | ) | 22,465 | (3,092 | ) | ||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income | 15,932 | – | 15,932 | ||||||||||||||||||||||
Other comprehensive income (loss) | (9,625 | ) | 22,465 | 12,840 | |||||||||||||||||||||
Balance at September 30, 2014 | $ | (15,930 | ) | $ | 247,913 | $ | 231,983 |
UNSECURED_BORROWINGS
UNSECURED BORROWINGS | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
UNSECURED BORROWINGS [Abstract] | ' | ||||||||
UNSECURED BORROWINGS | ' | ||||||||
NOTE 8 ¾ UNSECURED BORROWINGS | |||||||||
Unsecured borrowings consist of 30-year junior subordinated notes originally issued in 2005 and 2006 to three special-purpose statutory trusts formed to issue $3.1 million of the trusts’ common securities to Capstead and to privately place $100 million of so-called trust preferred securities with unrelated third party investors. In December 2013 the statutory trusts were dissolved after the subordinated notes were distributed to the holders of the trusts’ common and preferred securities. Included in Receivables and other assets are $2.1 million in remaining issue costs at September 30, 2014 associated with the original issuance of these notes. Note balances and related weighted average interest rates as of September 30, 2014 and December 31, 2013 (calculated including issue cost amortization) were as follows (dollars in thousands): | |||||||||
Borrowings | Average | ||||||||
Outstanding | Rate * | ||||||||
Junior subordinated notes associated with: | |||||||||
Capstead Mortgage Trust I | $ | 35,000 | 8.31 | % | |||||
Capstead Mortgage Trust II | 40,000 | 8.46 | |||||||
Capstead Mortgage Trust III | 25,000 | 8.78 | |||||||
$ | 100,000 | 8.49 | |||||||
* | The indicated weighted average rates have been in effect since issuance. After considering cash flow hedges that coincide with the floating rate terms of these borrowings that begin in October and December 2015 for the notes associated with Capstead Mortgage Trusts I and II and September 2016 for the notes associated with Capstead Mortgage Trust III, the effective borrowing rate during the final 20 years of these borrowings will average 7.56%, subject to certain adjustments for the effects of measured hedge ineffectiveness, if any. | ||||||||
The notes associated with Capstead Mortgage Trust I mature in October 2035 and are currently redeemable, in whole or in part, without penalty, at the Company’s option. The notes associated with Capstead Mortgage Trust II mature in December 2035 and are redeemable, in whole or in part, without penalty, at the Company’s option anytime on or after December 15, 2015. The notes associated with Capstead Mortgage Trust III mature in September 2036 and are redeemable, in whole or in part, without penalty, at the Company’s option anytime on or after September 15, 2016. |
CAPITAL_TRANSACTIONS
CAPITAL TRANSACTIONS | 9 Months Ended |
Sep. 30, 2014 | |
CAPITAL TRANSACTIONS [Abstract] | ' |
CAPITAL TRANSACTIONS | ' |
NOTE 9 ¾ CAPITAL TRANSACTIONS | |
In May 2013 Capstead completed a public offering of 6.8 million shares ($170.0 million face amount) of its 7.50% Series E Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share. The Series E preferred shares are redeemable at the Company’s option for $25.00 per share, plus any accumulated and unpaid dividends, on or after May 13, 2018. Proceeds of the offering after underwriting fees and other costs totaled $164.3 million and together with $42.7 million of cash on hand were used to fund the June 2013 redemption of the Company’s Series A and B perpetual preferred shares. The preferred shares that were redeemed had redemption preferences aggregating $207.0 million, a total of $19.9 million in excess of these shares’ recorded amounts on the Company’s balance sheet. This redemption preference premium is reflected as a $0.21 per common share reduction in net income available to common stockholders on the face of the Company’s Statements of Income for the nine months ended September 30, 2013. | |
In late 2013 the Company began issuing additional Series E preferred shares through an at-the-market continuous offering program. During the quarter and nine months ended September 30, 2014, the Company issued 105,000 and 683,000 Series E preferred shares at average prices of $23.82 and $23.94, net of expenses, for net proceeds of $2.5 million and $16.3 million, respectively. No Series E preferred shares were issued subsequent to quarter-end through November 5, 2014. | |
Between November 2012 and January 2013, the Company repurchased 3.6 million common shares at a cost of $42.4 million pursuant to a $100 million common share repurchase program. In July 2014 this program was suspended indefinitely. | |
Additional amounts of Series E preferred capital and new common equity capital may be raised in the future under continuous offering programs or by other means, subject to market conditions, compliance with federal securities laws and blackout periods associated with the dissemination of earnings and dividend announcements and other important Company-specific news. |
DISCLOSURES_REGARDING_FAIR_VAL
DISCLOSURES REGARDING FAIR VALUES OF FINANCIAL INSTRUMENTS | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
DISCLOSURES REGARDING FAIR VALUES OF FINANCIAL INSTRUMENTS [Abstract] | ' | ||||||||||||||||
DISCLOSURES REGARDING FAIR VALUES OF FINANCIAL INSTRUMENTS | ' | ||||||||||||||||
NOTE 10 ¾ DISCLOSURES REGARDING FAIR VALUES OF FINANCIAL INSTRUMENTS | |||||||||||||||||
This note provides fair value-related disclosures as of the indicated balance sheet dates for Capstead’s financial assets and liabilities, most of which are influenced by changes in, and market expectations for changes in, interest rates and market liquidity conditions, as well as other factors beyond the control of management. All fair values were determined using Level 2 Inputs in accordance with ASC 820. | |||||||||||||||||
Residential mortgage investments, nearly all of which are mortgage securities classified as available-for-sale, are measured at fair value on a recurring basis. In determining fair value estimates for mortgage securities, the Company considers recent trading activity for similar investments and pricing levels indicated by lenders in connection with designating collateral for repurchase arrangements, provided such pricing levels are considered indicative of actual market clearing transactions. In determining fair value estimates for longer-term borrowings under repurchase arrangements, the Company considers pricing levels indicated by lenders for entering into new transactions using similar pledged collateral with terms equal to the remaining terms of the longer-term borrowings. In determining fair value estimates for unsecured borrowings, the Company considers current pricing for financial instruments with similar characteristics. Excluded from these disclosures are financial instruments for which the Company’s cost basis is deemed to approximate fair value due primarily to the short duration of these instruments, which are valued using primarily Level 1 measurements, including Cash and cash equivalents, cash collateral receivable from, or payable to, interest rate swap counterparties, receivables, payables and borrowings under repurchase arrangements with initial terms of 120 days or less. See NOTE 7 for information relative to the valuation of interest rate swap agreements. | |||||||||||||||||
Fair value-related disclosures for financial instruments other than debt securities were as follows as of the indicated dates (in thousands): | |||||||||||||||||
30-Sep-14 | 31-Dec-13 | ||||||||||||||||
Carrying | Fair | Carrying | Fair | ||||||||||||||
Amount | Value | Amount | Value | ||||||||||||||
Financial assets: | |||||||||||||||||
Residential mortgage loans | $ | 5,285 | $ | 5,400 | $ | 6,898 | $ | 7,000 | |||||||||
Interest rate swap agreements | 2,397 | 2,397 | 5,005 | 5,005 | |||||||||||||
Financial liabilities: | |||||||||||||||||
Repurchase arrangements with initial terms of greater than 120 days | 1,778,517 | 1,778,700 | 36,299 | 36,300 | |||||||||||||
Unsecured borrowings | 100,000 | 100,400 | 100,000 | 101,000 | |||||||||||||
Interest rate swap agreements | 18,276 | 18,276 | 11,304 | 11,304 | |||||||||||||
Fair value-related disclosures for debt securities were as follows as of the indicated dates (in thousands): | |||||||||||||||||
Amortized | Gross Unrealized | ||||||||||||||||
Cost Basis | Gains | Losses | Fair Value | ||||||||||||||
30-Sep-14 | |||||||||||||||||
Agency Securities classified as available-for-sale: | |||||||||||||||||
Fannie Mae/Freddie Mac | $ | 10,711,999 | $ | 242,301 | $ | 5,517 | $ | 10,948,783 | |||||||||
Ginnie Mae | 2,753,329 | 16,838 | 5,709 | 2,764,458 | |||||||||||||
Residential mortgage securities classified as held-to-maturity | 3,754 | 128 | – | 3,882 | |||||||||||||
31-Dec-13 | |||||||||||||||||
Agency Securities classified as available-for-sale: | |||||||||||||||||
Fannie Mae/Freddie Mac | 11,019,116 | 224,456 | 12,468 | 11,231,104 | |||||||||||||
Ginnie Mae | 2,220,035 | 18,384 | 4,924 | 2,233,495 | |||||||||||||
Residential mortgage securities classified as held-to-maturity | 4,376 | 211 | – | 4,587 | |||||||||||||
30-Sep-14 | 31-Dec-13 | ||||||||||||||||
Fair | Unrealized | Fair | Unrealized | ||||||||||||||
Value | Loss | Value | Loss | ||||||||||||||
Securities in an unrealized loss position: | |||||||||||||||||
One year or greater | $ | 689,189 | $ | 6,491 | $ | 39,030 | $ | 380 | |||||||||
Less than one year | 1,680,345 | 4,735 | 2,857,724 | 17,012 | |||||||||||||
$ | 2,369,534 | $ | 11,226 | $ | 2,896,754 | $ | 17,392 | ||||||||||
Capstead’s investment strategy involves managing a leveraged portfolio of seasoned, short-duration ARM Agency Securities and management expects these securities will be held until payoff absent a major shift in strategy or a severe contraction in the Company’s ability to obtain financing to support its portfolio. Declines in fair value caused by increases in interest rates are typically modest for investments in short-duration ARM Agency Securities compared to investments in longer-duration ARM or fixed-rate assets. These declines are generally recoverable in a relatively short period of time as coupon interest rates on the underlying mortgage loans reset to rates more reflective of the then current interest rate environment. | |||||||||||||||||
From a credit risk perspective, federal government support for the GSEs helps ensure that fluctuations in value due to credit risk associated with these securities will be limited. Given that (a) any existing unrealized losses on mortgage securities held by the Company are not attributable to credit risk and declines in fair value of ARM securities due to changes in interest rates are generally recoverable in a relatively short period of time, (b) the Company typically holds its investments to maturity, and (c) it is more likely than not that the Company will not be required to sell any of its investments given the resiliency of the financing market for Agency Securities, none of these investments are considered other-than-temporarily impaired at September 30, 2014. |
COMPENSATION_PROGRAMS
COMPENSATION PROGRAMS | 9 Months Ended | ||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||
COMPENSATION PROGRAMS [Abstract] | ' | ||||||||||||||||||||||||||||
COMPENSATION PROGRAMS | ' | ||||||||||||||||||||||||||||
NOTE 11 ¾ COMPENSATION PROGRAMS | |||||||||||||||||||||||||||||
The compensation committee of Capstead’s board of directors (the “Committee”) administers all compensation programs for employees including salaries, short- and long-term incentive compensation, including equity-based awards, as well as other benefit programs. After reviewing existing programs and practices and soliciting feedback from investors during 2013, the Committee made a number of important changes that became effective in 2013 and early 2014. The most prominent changes involved replacing an absolute return-based but discretionary bonus program with a largely nondiscretionary and formulaic, target-based annual incentive compensation program focusing more on relative return metrics and implementing a new performance-based long-term incentive compensation program. | |||||||||||||||||||||||||||||
Short-term Incentive Compensation Programs | |||||||||||||||||||||||||||||
Through June 30, 2013, the Committee utilized an incentive formula that allowed for participation in Capstead’s earnings in excess of a pre-established performance threshold, subject to a maximum amount, or cap. Awards made under this annual incentive compensation program were at the Committee’s discretion as to (i) the amount actually awarded, (ii) its allocation among executives and with other employees and (iii) the form of payment (e.g., cash or equity awards). This program was replaced with a new annual incentive compensation program for key executives referred to as the “2013 Program.” The 2013 Program determined levels of annual cash incentive compensation based on relative performance metrics measured against the Company’s peers in the mortgage REIT industry and the attainment of individual goals and objectives for participating executives. The relative performance metrics used were relative economic return (change in book value plus dividends) and relative operating efficiency (operating expenses divided by Unsecured borrowings and Stockholders’ equity), calculated for the full year and prorated for the six month period during which the program was effective in 2013. The 2013 Program defined maximum payout percentages based on a multiple of salary for each program metric thereby limiting the amount payable to each participating executive. For 2014 the Committee added an absolute economic return performance metric to this program which measures performance against established return levels. | |||||||||||||||||||||||||||||
Included in Accounts payable and accrued expenses at September 30, 2014 are accruals totaling $1.1 million for the 2014 annual incentive compensation program as well as separately determined bonus amounts for officers and employees not participating in this program. Recognized in Short-term incentive compensation are $391,000 and $883,000 related to these programs for the quarter and nine months ended September 30, 2014, respectively. | |||||||||||||||||||||||||||||
In 2008 the Committee instituted an additional performance-based short-term incentive compensation program for key executives that provides for quarterly cash payments equal to per share dividends declared on Capstead’s common stock multiplied by a notional amount of non-vesting or “phantom” common shares (“Dividend Equivalent Rights” or “DERs”). DERs are not attached to any stock or option awards and only represent the right to receive the same cash distributions that the Company’s common stockholders are entitled to receive during the term of the grants, subject to certain conditions, including continuous service. DERs outstanding at September 30, 2014 totaled 654,000. All grants expire July 1, 2015. Included in Accounts payable and accrued expenses are third quarter 2014 DERs distribution amounts totaling $222,000 that were paid in October 2014. Recognized in Short-term incentive compensation are $222,000 and $667,000 related to the DERs program for the quarter and nine months ended September 30, 2014, respectively. | |||||||||||||||||||||||||||||
Long-term Equity-based Incentive Awards | |||||||||||||||||||||||||||||
Capstead sponsors equity-based award plans to provide for the issuance of stock awards, restricted stock unit awards, option awards and other long-term equity-based incentive awards to directors and employees. In May 2014 stockholders approved the Amended and Restated 2014 Flexible Incentive Plan, which provides for the issuance of up to five million common shares pursuant to future equity-based awards as well as other incentive awards that recognize the creation of value for stockholders and promote the Company’s long-term growth and success. At September 30, 2014, the Plan had 4,965,000 common shares remaining available for future issuances. | |||||||||||||||||||||||||||||
In December 2013 the Committee adopted a new performance-based long-term incentive compensation program granting key executives a total of 242,505 restricted stock units. These units are convertible into common shares following a three-year performance period ending December 31, 2016 contingent upon whether, and to what extent, defined performance levels established for certain relative and absolute return performance metrics are met or exceeded. The relative return metrics measure the Company’s performance against its peers in the mortgage REIT industry on the basis of relative economic return and relative total stockholder return (change in stock price plus reinvested dividends). An absolute economic return metric measures performance against established return levels. For conversion purposes, each performance metric is assigned a weighting and the Company’s performance relative to each metric is calculated separately. The actual number of common shares the units can convert into for each of the metrics, if any, can range from one-half of a common share per unit if that metric’s minimum threshold of performance is met, to two common shares per unit if the related maximum performance threshold is met or exceeded, adjusted for the weighting assigned to the metric. If a metric’s minimum performance threshold is not met, no shares are issuable under that metric. Dividends accrue from the date of grant and will be paid in cash when the units convert into common shares based on the number of common shares ultimately issued, if any. | |||||||||||||||||||||||||||||
Under a prior absolute return performance-based stock award program, the Committee granted stock awards from 2008 through 2012 to all employees with staggered three-year vesting periods subject to Capstead generating annualized returns in excess of established return levels. If the required returns are not generated during a three-year measurement period, vesting will be deferred and a new three-year measurement period will be established to include the subsequent year, up to and including the seventh calendar year after the year of grant. Any remaining unvested awards issued under this program will expire if the required returns are not generated for the final three-year measurement period. Information pertaining to absolute return performance-based stock awards issued to employees pursuant to this program is as follows: | |||||||||||||||||||||||||||||
Final | Remaining Shares with | ||||||||||||||||||||||||||||
Grant Date | Total | Measurement | Initial Measurement Periods | ||||||||||||||||||||||||||
Year of | Fair Value | Original | Period Ends | Ending December 31 | |||||||||||||||||||||||||
Grant | Per Share | Grants | Forfeited | 31-Dec | 2014 | 2015 | 2016 | ||||||||||||||||||||||
2008 (a) | $ | 10.18 | 140,658 | 5,464 | n/ | a | – | – | – | ||||||||||||||||||||
2009 (b) | 14.33 | 110,917 | 4,571 | n/ | a | – | – | – | |||||||||||||||||||||
2010 (c) | 12.44 | 128,766 | 5,759 | 2017 | 61,499 | – | – | ||||||||||||||||||||||
2011 | 12.72 | 132,490 | 5,050 | 2018 | 63,722 | 63,718 | – | ||||||||||||||||||||||
2012 | 11.67 | 145,399 | 5,697 | 2019 | – | 69,853 | 69,849 | ||||||||||||||||||||||
(a) | The absolute return metrics for the three-year measurement periods ending December 31, 2012 and 2011 were met resulting in the vesting of 67,595 shares associated with the second 50% of this grant in January 2013 and 67,599 shares associated with the first 50% of this grant in February 2012. | ||||||||||||||||||||||||||||
(b) | The absolute return metrics for the three-year measurement periods ending December 31, 2013 and 2012 were met resulting in the vesting of 52,915 shares associated with the second 50% of this grant in January 2014 and 53,431 shares associated with the first 50% of this grant in January 2013. | ||||||||||||||||||||||||||||
(c) | The absolute return metric for the first three-year measurement period ending December 31, 2013 was met resulting in the vesting of 61,508 shares associated with the first 50% of this grant in January 2014. | ||||||||||||||||||||||||||||
In December 2013 the Committee granted service-based stock awards for 35,703 common shares with a grant date fair value of $12.34 to employees that weren’t awarded performance-based restricted stock units. These awards vest January 2, 2017. As a component of the Company’s director compensation program, directors are granted stock awards annually upon election or re-election to the board of directors that vest approximately one year from issuance. In April 2014, director grants awarded in 2013 for 28,000 shares with a grant date fair value of $13.02 vested. In July 2014, director stock awards for 35,000 shares with a grant date fair value of $13.16 were granted that vest in July 2015. In January 2014 the remaining 22,164 shares associated with 2007 service-based stock awards issued to all employees vested. | |||||||||||||||||||||||||||||
Performance-based and service-based stock award activity for quarter and nine months ended September 30, 2014 is summarized below: | |||||||||||||||||||||||||||||
Weighted Average | |||||||||||||||||||||||||||||
Number of | Grant Date | ||||||||||||||||||||||||||||
Shares | Fair Value | ||||||||||||||||||||||||||||
Unvested stock awards outstanding at December 31, 2013 | 528,931 | $ | 12.51 | ||||||||||||||||||||||||||
Grants | 35,000 | 13.16 | |||||||||||||||||||||||||||
Vestings | (164,587 | ) | 13.23 | ||||||||||||||||||||||||||
Unvested stock awards outstanding at September 30, 2014 | 399,344 | 12.28 | |||||||||||||||||||||||||||
During the quarter and nine months ended September 30, 2014, the Company recognized in Long-term incentive compensation $372,000 and $1.1 million, respectively, related to amortization of the grant date fair value of employee performance-based and service-based stock awards. The amounts amortized for these periods assumed that performance metrics, if applicable, would continue to be met for related initial measurement periods. In addition, the Company recognized in Other general and administrative expense $77,000 and $199,000 related to amortization of the grant date fair value of service-based director stock awards during the quarter and nine months ended September 30, 2014, respectively. Unrecognized compensation expense for unvested stock awards totaled $1.8 million as of September 30, 2014, to be expensed over a weighted average period of 1.3 years (assumes minimal employee and director attrition and, if applicable, absolute return performance metrics being met for related initial measurement periods). | |||||||||||||||||||||||||||||
During the quarter and nine months ended September 30, 2014 the Company recognized in Long-term incentive compensation $252,000 and $755,000, respectively, related to the performance-based restricted stock units granted in December 2013. A grant date fair value of $12.45 was assigned to each unit based on estimated outcomes for each nonmarket-based performance metric and a Monte Carlo simulation for the relative total stockholder return performance metric. Assuming certain targeted performance levels are achieved and there are no forfeitures, $3.0 million can be expected to be expensed over the related three-year performance period. However, the value associated with the nonmarket-based performance metrics is subject to change over the units’ performance period. Actual expense assuming no forfeitures will range from a minimum of $625,000 (the grant date fair value of the total stockholder return performance metric and assuming no shares are ultimately issued under the terms of these grants because the Company’s performance for all performance metrics was less than the related minimum threshold performance levels) to approximately $5.4 million assuming maximum performance levels are met or exceeded for all performance metrics resulting in the issuance of 485,010 common shares. | |||||||||||||||||||||||||||||
All service-based stock awards receive dividends on a current basis without risk of forfeiture if the related awards do not vest. All outstanding performance-based stock awards and restricted stock units defer the payment of dividends accruing between the grant dates and the end of related performance periods. If performance-based stock awards do not vest or to the extent restricted stock units do not convert into common shares, the related accrued dividends will be forfeited. Included in Common stock dividend payable at September 30, 2014 is estimated dividends payable pertaining to these awards totaling $1.6 million. | |||||||||||||||||||||||||||||
Option awards currently outstanding have ten-year contractual terms from the grant date and were issued with strike prices equal to the quoted market prices of the Company’s common shares on the date of grant. The fair value of option awards was estimated on the date of grant using a Black-Scholes option pricing model. The Company estimated option exercises, expected holding periods and forfeitures based on past experience and expectations for option performance and employee or director attrition. Risk-free rates were based on market rates for the expected life of the options. Expected dividends were based on historical experience and expectations for future performance. Expected volatility factors were based on historical experience. No option awards have been granted since 2010. | |||||||||||||||||||||||||||||
Option award activity for the nine months ended September 30, 2014 is summarized below: | |||||||||||||||||||||||||||||
Number of | Weighted Average | ||||||||||||||||||||||||||||
Shares | Exercise Price | ||||||||||||||||||||||||||||
Option awards outstanding at December 31, 2013 | 77,500 | $ | 11.75 | ||||||||||||||||||||||||||
Expirations | (10,000 | ) | 14.41 | ||||||||||||||||||||||||||
Exercises (aggregate intrinsic value: $67,000) | (27,500 | ) | 10.63 | ||||||||||||||||||||||||||
Option awards outstanding at September 30, 2014 | 40,000 | 11.86 | |||||||||||||||||||||||||||
All outstanding option awards are exercisable at September 30, 2014. These awards have a weighted average remaining contractual term of 3.7 years and an aggregate intrinsic value of $25,000. | |||||||||||||||||||||||||||||
Other Benefit Programs | |||||||||||||||||||||||||||||
Capstead sponsors a qualified defined contribution retirement plan for all employees and a nonqualified deferred compensation plan for certain of its executives. In general the Company matches up to 50% of a participant’s voluntary contribution up to a maximum of 6% of a participant’s base salary and annual incentive compensation payments and makes discretionary contributions of up to another 3% of such compensation regardless of participation in the plans. Company contributions are subject to certain vesting requirements that have been met by nearly all of Capstead’s current employees. During the quarter and nine months ended September 30, 2014, the Company recognized in Salaries and benefits $68,000 and $187,000, respectively, related to contributions to these plans. |
NET_INCOME_PER_COMMON_SHARE_Ta
NET INCOME PER COMMON SHARE (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
NET INCOME PER COMMON SHARE [Abstract] | ' | ||||||||||||||||
Components of Computation of Basic and Diluted Net Income Per Common Share | ' | ||||||||||||||||
Components of the computation of basic and diluted net income per common share for the indicated periods were as follows (dollars in thousands, except per share amounts): | |||||||||||||||||
Quarter Ended | Nine Months Ended | ||||||||||||||||
30-Sep | 30-Sep | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Basic net income per common share | |||||||||||||||||
Numerator for basic net income per common share: | |||||||||||||||||
Net income | $ | 32,391 | $ | 24,702 | $ | 107,346 | $ | 89,514 | |||||||||
Redemption premiums paid on Series A and Series B preferred shares* | – | – | – | (19,924 | ) | ||||||||||||
Preferred share dividends | (3,529 | ) | (3,188 | ) | (10,216 | ) | (14,325 | ) | |||||||||
Earnings participation of unvested stock awards | (24 | ) | (32 | ) | (58 | ) | (96 | ) | |||||||||
$ | 28,838 | $ | 21,482 | $ | 97,072 | $ | 55,169 | ||||||||||
Denominator for basic net income per common share: | |||||||||||||||||
Weighted average common shares outstanding | 95,793 | 95,761 | 95,779 | 95,647 | |||||||||||||
Average unvested stock awards outstanding | (388 | ) | (493 | ) | (395 | ) | (508 | ) | |||||||||
95,405 | 95,268 | 95,384 | 95,139 | ||||||||||||||
$ | 0.3 | $ | 0.23 | $ | 1.02 | $ | 0.58 | ||||||||||
Diluted net income per common share | |||||||||||||||||
Numerator for diluted net income per common share: | |||||||||||||||||
Net income available to common stockholders | $ | 28,838 | $ | 21,482 | $ | 97,072 | $ | 55,169 | |||||||||
Dividends on dilutive convertible preferred shares | – | – | – | 44 | |||||||||||||
$ | 28,838 | $ | 21,482 | $ | 97,072 | $ | 55,213 | ||||||||||
Denominator for diluted net income per common share: | |||||||||||||||||
Basic weighted average common shares outstanding | 95,405 | 95,268 | 95,384 | 95,139 | |||||||||||||
Net effect of dilutive equity awards | 272 | 148 | 230 | 133 | |||||||||||||
Net effect of dilutive convertible preferred shares | – | – | – | 101 | |||||||||||||
95,677 | 95,416 | 95,614 | 95,373 | ||||||||||||||
$ | 0.3 | $ | 0.23 | $ | 1.02 | $ | 0.58 | ||||||||||
Potentially Dilutive Securities Excluded from Computation of Net Income Per Common Share | ' | ||||||||||||||||
Potentially dilutive securities excluded from the computation of net income per share because the effect of inclusion was antidilutive were as follows (in thousands): | |||||||||||||||||
Quarter Ended | Nine Months Ended | ||||||||||||||||
30-Sep | 30-Sep | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Antidilutive convertible preferred shares* | – | – | – | 16,539 | |||||||||||||
Antidilutive equity awards excludable under the treasury stock method | – | 35 | – | 35 | |||||||||||||
* | The Series A and Series B preferred shares were redeemed in June 2013 (See NOTE 9). |
RESIDENTIAL_MORTGAGE_INVESTMEN1
RESIDENTIAL MORTGAGE INVESTMENTS (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
RESIDENTIAL MORTGAGE INVESTMENTS [Abstract] | ' | ||||||||||||||||||||||||
Schedule of Residential Mortgage Investments | ' | ||||||||||||||||||||||||
Residential mortgage investments classified by collateral type and interest rate characteristics as of the indicated dates were as follows (dollars in thousands): | |||||||||||||||||||||||||
Unpaid | Investment Premiums | Amortized Cost Basis | Carrying | Net | Average | ||||||||||||||||||||
Principal | Amount (a) | WAC (b) | Yield(b) | ||||||||||||||||||||||
Balance | |||||||||||||||||||||||||
30-Sep-14 | |||||||||||||||||||||||||
Agency Securities: | |||||||||||||||||||||||||
Fannie Mae/Freddie Mac: | |||||||||||||||||||||||||
Fixed-rate | $ | 1,717 | $ | 5 | $ | 1,722 | $ | 1,724 | 6.64 | % | 6.17 | % | |||||||||||||
ARMs | 10,377,592 | 334,371 | 10,711,963 | 10,948,745 | 2.53 | 1.62 | |||||||||||||||||||
Ginnie Mae ARMs | 2,660,875 | 92,454 | 2,753,329 | 2,764,458 | 2.65 | 1.5 | |||||||||||||||||||
13,040,184 | 426,830 | 13,467,014 | 13,714,927 | 2.56 | 1.6 | ||||||||||||||||||||
Residential mortgage loans: | |||||||||||||||||||||||||
Fixed-rate | 1,896 | 2 | 1,898 | 1,898 | 6.97 | 5.76 | |||||||||||||||||||
ARMs | 3,373 | 14 | 3,387 | 3,387 | 3.86 | 2.89 | |||||||||||||||||||
5,269 | 16 | 5,285 | 5,285 | 4.97 | 3.84 | ||||||||||||||||||||
Collateral for structured financings | 2,035 | 34 | 2,069 | 2,069 | 8.1 | 7.64 | |||||||||||||||||||
$ | 13,047,488 | $ | 426,880 | $ | 13,474,368 | $ | 13,722,281 | 2.56 | 1.6 | ||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||
Agency Securities: | |||||||||||||||||||||||||
Fannie Mae/Freddie Mac: | |||||||||||||||||||||||||
Fixed-rate | $ | 2,158 | $ | 6 | $ | 2,164 | $ | 2,167 | 6.67 | % | 6.47 | % | |||||||||||||
ARMs | 10,675,620 | 343,452 | 11,019,072 | 11,231,057 | 2.58 | 1.76 | |||||||||||||||||||
Ginnie Mae ARMs | 2,145,639 | 74,396 | 2,220,035 | 2,233,495 | 2.64 | 1.64 | |||||||||||||||||||
12,823,417 | 417,854 | 13,241,271 | 13,466,719 | 2.59 | 1.74 | ||||||||||||||||||||
Residential mortgage loans: | |||||||||||||||||||||||||
Fixed-rate | 2,633 | 3 | 2,636 | 2,636 | 6.99 | 5.63 | |||||||||||||||||||
ARMs | 4,244 | 18 | 4,262 | 4,262 | 3.81 | 3.35 | |||||||||||||||||||
6,877 | 21 | 6,898 | 6,898 | 5.03 | 4.2 | ||||||||||||||||||||
Collateral for structured financings | 2,220 | 37 | 2,257 | 2,257 | 8.09 | 7.68 | |||||||||||||||||||
$ | 12,832,514 | $ | 417,912 | $ | 13,250,426 | $ | 13,475,874 | 2.59 | 1.74 | ||||||||||||||||
(a) | Includes unrealized gains and losses for residential mortgage investments classified as available-for-sale (see NOTE 10). | ||||||||||||||||||||||||
(b) | 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 the indicated balance sheet date. Net WAC is expressed as a percentage calculated on an annualized basis on the unpaid principal balances of the mortgage loans underlying these investments. Average yield is presented for the quarter then ended, and is based on the cash component of interest income expressed as a percentage calculated on an annualized basis on average amortized cost basis (the “cash yield”) less the effects of amortizing investment premiums. Investment premium amortization is determined using the interest method and incorporates actual and anticipated future mortgage prepayments. |
REPURCHASE_ARRANGEMENTS_AND_SI1
REPURCHASE ARRANGEMENTS AND SIMILAR BORROWINGS (Tables) | 9 Months Ended | |||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||
REPURCHASE ARRANGEMENTS AND SIMILAR BORROWINGS [Abstract] | ' | |||||||||||||||||
Schedule of Repurchase Arrangements and Similar Borrowings | ' | |||||||||||||||||
Repurchase arrangements and similar borrowings (and related pledged collateral, including accrued interest receivable), classified by collateral type and remaining maturities, and related weighted average borrowing rates as of the indicated dates were as follows (dollars in thousands): | ||||||||||||||||||
Collateral Type | Collateral | Accrued | Borrowings | Average | ||||||||||||||
Carrying | Interest | Outstanding | Borrowing | |||||||||||||||
Amount | Receivable | Rates | ||||||||||||||||
30-Sep-14 | ||||||||||||||||||
Borrowings with maturities of 30 days or less: | ||||||||||||||||||
Agency Securities | $ | 11,007,943 | $ | 22,583 | $ | 10,471,646 | 0.3 | % | ||||||||||
Borrowings with maturities greater than 30 days: | ||||||||||||||||||
Agency Securities (31 to 90 days) | 519,510 | 1,099 | 497,530 | 0.31 | ||||||||||||||
Agency Securities (greater than 90 days) | 1,870,094 | 3,927 | 1,778,517 | 0.52 | ||||||||||||||
Similar borrowings: | ||||||||||||||||||
Collateral for structured financings* | 2,069 | – | 2,069 | 8.1 | ||||||||||||||
$ | 13,399,616 | $ | 27,609 | $ | 12,749,762 | 0.33 | ||||||||||||
Quarter-end borrowing rates adjusted for effects of related derivative financial instruments (“Derivatives”) held as cash flow hedges (see NOTE 7) | 0.52 | |||||||||||||||||
31-Dec-13 | ||||||||||||||||||
Borrowings with maturities of 30 days or less: | ||||||||||||||||||
Agency Securities | $ | 12,169,534 | $ | 28,195 | $ | 11,578,211 | 0.38 | % | ||||||||||
Borrowings with maturities greater than 30 days: | ||||||||||||||||||
Agency Securities (31 to 90 days) | 951,966 | 2,068 | 902,432 | 0.38 | ||||||||||||||
Similar borrowings: | ||||||||||||||||||
Collateral for structured financings* | 2,257 | – | 2,257 | 8.09 | ||||||||||||||
$ | 13,123,757 | $ | 30,263 | $ | 12,482,900 | 0.38 | ||||||||||||
Quarter-end borrowing rates adjusted for effects of related Derivatives held as cash flow hedges | 0.49 | |||||||||||||||||
* | The maturity of structured financings is directly affected by prepayments on the related mortgage pass-through securities pledged as collateral. Additionally, these financings are subject to redemption by the residual bondholders. | |||||||||||||||||
Schedule of Average Borrowings Outstanding | ' | |||||||||||||||||
Average borrowings outstanding differed from respective quarter-end balances during the indicated periods primarily due to changes in portfolio levels and differences in the timing of portfolio acquisitions relative to portfolio runoff as illustrated below (dollars in thousands): | ||||||||||||||||||
Quarter Ended | ||||||||||||||||||
30-Sep-14 | 31-Dec-13 | |||||||||||||||||
Average | Average | Average | Average | |||||||||||||||
Borrowings | Rate | Borrowings | Rate | |||||||||||||||
Average borrowings and rates adjusted for the effects of related Derivatives held as cash flow hedges for the indicated quarters | $ | 12,690,463 | 0.51 | % | $ | 12,510,701 | 0.49% |
USE_OF_DERIVATIVE_FINANCIAL_IN1
USE OF DERIVATIVE FINANCIAL INSTRUMENTS, OFFSETTING DISCLOSURES AND CHANGES IN OTHER COMPREHENSIVE INCOME BY COMPONENT (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
USE OF DERIVATIVE FINANCIAL INSTRUMENTS, OFFSETTING DISCLOSURES AND CHANGES IN OTHER COMPREHENSIVE INCOME BY COMPONENT [Abstract] | ' | ||||||||||||||||||||||||
Schedule of Swap Agreements Expiration Period and Characteristics | ' | ||||||||||||||||||||||||
At September 30, 2014, the Company’s portfolio of financing-related swap positions had the following characteristics (dollars in thousands): | |||||||||||||||||||||||||
Period of Contract Expiration | Notional | Average Fixed Rate | |||||||||||||||||||||||
Amount | Payment Requirement | ||||||||||||||||||||||||
Currently-paying contracts: | |||||||||||||||||||||||||
Fourth quarter 2014 | $ | 500,000 | 0.58 | % | |||||||||||||||||||||
First quarter 2015 | 1,100,000 | 0.5 | |||||||||||||||||||||||
Second quarter 2015 | 200,000 | 0.43 | |||||||||||||||||||||||
Third quarter 2015 | 400,000 | 0.47 | |||||||||||||||||||||||
Fourth quarter 2015 | 1,200,000 | 0.45 | |||||||||||||||||||||||
First quarter 2016 | 1,700,000 | 0.51 | |||||||||||||||||||||||
Second quarter 2016 | 1,100,000 | 0.47 | |||||||||||||||||||||||
Third quarter 2016 | 700,000 | 0.56 | |||||||||||||||||||||||
(average expiration: 13 months) | 6,900,000 | 0.5 | |||||||||||||||||||||||
Forward-starting contracts: | |||||||||||||||||||||||||
Fourth quarter 2016 | 800,000 | 0.66 | |||||||||||||||||||||||
First quarter 2017 | 100,000 | 0.9 | |||||||||||||||||||||||
(average expiration: 24 months) | 900,000 | 0.69 | |||||||||||||||||||||||
(average expiration: 14 months) | $ | 7,800,000 | |||||||||||||||||||||||
Impact of Derivative Instruments on Statements of Financial Performance and Financial Position | ' | ||||||||||||||||||||||||
The following tables include fair value and other related disclosures regarding all Derivatives held as of and for the indicated periods (in thousands): | |||||||||||||||||||||||||
Balance Sheet | September 30, | December 31, | |||||||||||||||||||||||
Location | 2014 | 2013 | |||||||||||||||||||||||
Balance sheet-related | |||||||||||||||||||||||||
Swap agreements in a gain position (an asset) related to: | |||||||||||||||||||||||||
Borrowings under repurchase arrangements | (a) | $ | 2,397 | $ | 1,094 | ||||||||||||||||||||
Unsecured borrowings | (a) | – | 3,911 | ||||||||||||||||||||||
Swap agreements in a loss position (a liability) related to: | |||||||||||||||||||||||||
Borrowings under repurchase arrangements | (a) | (7,026 | ) | (11,304 | ) | ||||||||||||||||||||
Unsecured borrowings | (a) | (11,250 | ) | – | |||||||||||||||||||||
Related net interest payable | (b) | (8,916 | ) | (5,493 | ) | ||||||||||||||||||||
$ | (24,795 | ) | $ | (11,792 | ) | ||||||||||||||||||||
(a) | The fair value of Derivatives with realized and unrealized gains are aggregated and recorded as an asset on the face of the Balance Sheets separately from the fair value of Derivatives with realized and unrealized losses that are recorded as a liability. The amount of unrealized losses scheduled to be recognized in the Statements of Income over the next twelve months primarily in the form of fixed-rate swap payments in excess of current market rates totaled $15.5 million at September 30, 2014. | ||||||||||||||||||||||||
(b) | Included in “Accounts payable and accrued expenses” on the face of the Balance Sheets. | ||||||||||||||||||||||||
Location of | |||||||||||||||||||||||||
Gain or (Loss) | |||||||||||||||||||||||||
Recognized | Quarter Ended | Nine Months Ended | |||||||||||||||||||||||
in | 30-Sep | 30-Sep | |||||||||||||||||||||||
Net Income | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
Income statement-related | |||||||||||||||||||||||||
Components of effect on interest expense: | |||||||||||||||||||||||||
Amount of loss reclassified from Accumulated other comprehensive income related to the effective portion of active positions | $ | (5,826 | ) | $ | (3,698 | ) | $ | (15,932 | ) | $ | (13,548 | ) | |||||||||||||
Amount of gain (loss) recognized (ineffective portion) | 45 | (23 | ) | (123 | ) | 73 | |||||||||||||||||||
Increase in interest expense and decrease in Net income as a result of the use of Derivatives | * | $ | (5,781 | ) | $ | (3,721 | ) | $ | (16,055 | ) | $ | (13,475 | ) | ||||||||||||
Other comprehensive income-related | |||||||||||||||||||||||||
Amount of gain (loss) recognized in Other comprehensive income(loss) (effective portion) | $ | 97 | $ | (10,867 | ) | $ | (25,557 | ) | $ | 9,136 | |||||||||||||||
* | Included in “Interest expense: Repurchase arrangements and similar borrowings” on the face of the Statements of Income. | ||||||||||||||||||||||||
Schedule Of Offsetting Disclosures For All Derivatives Held And Repurchase Arrangements And Similar Borrowings Outstanding Table [Text Block] | ' | ||||||||||||||||||||||||
The following tables provide disclosures concerning offsetting of financial liabilities and Derivatives as of the indicated dates (in thousands): | |||||||||||||||||||||||||
Offsetting of Derivative Assets | |||||||||||||||||||||||||
Gross | Net Amounts | Gross Amounts Not Offset | |||||||||||||||||||||||
Gross | Amounts | of Assets | in the Balance Sheet(a) | ||||||||||||||||||||||
Amounts of | Offset in | Presented in | Cash | ||||||||||||||||||||||
Recognized | the Balance | the Balance | Financial | Collateral | Net | ||||||||||||||||||||
Assets | Sheet | Sheet | Instruments | Received | Amount | ||||||||||||||||||||
As of September 30, 2014: | |||||||||||||||||||||||||
Counterparty 2 | $ | – | $ | 262 | $ | 262 | $ | (262 | ) | $ | – | $ | – | ||||||||||||
Counterparty 4 | 1,373 | 762 | 2,135 | (2,135 | ) | – | – | ||||||||||||||||||
$ | 1,373 | $ | 1,024 | $ | 2,397 | $ | (2,397 | ) | $ | – | $ | – | |||||||||||||
As of December 31, 2013: | |||||||||||||||||||||||||
Counterparty 1 | $ | 3,911 | $ | – | $ | 3,911 | $ | (3,911 | ) | $ | – | $ | – | ||||||||||||
Counterparty 2 | 634 | – | 634 | (634 | ) | – | – | ||||||||||||||||||
Counterparty 4 | 460 | – | 460 | (460 | ) | – | – | ||||||||||||||||||
$ | 5,005 | $ | – | $ | 5,005 | $ | (5,005 | ) | $ | – | $ | – | |||||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||||||||||||||||||
Gross | Net Amounts | Gross Amounts Not Offset | |||||||||||||||||||||||
Gross | Amounts | of Liabilities | in the Balance Sheet (c) | ||||||||||||||||||||||
Amounts of | Offset in | Presented in | Cash | ||||||||||||||||||||||
Recognized | the Balance | the Balance | Financial | Collateral | Net | ||||||||||||||||||||
Liabilities(b) | Sheet | Sheet (a) | Instruments | Pledged | Amount | ||||||||||||||||||||
As of September 30, 2014: | |||||||||||||||||||||||||
Derivatives by counterparty: | |||||||||||||||||||||||||
Counterparty 1 | $ | 15,785 | $ | – | $ | 15,785 | $ | – | $ | (15,785 | ) | $ | – | ||||||||||||
Counterparty 2 | 5,316 | 262 | 5,578 | (262 | ) | (5,316 | ) | – | |||||||||||||||||
Counterparty 3 | 620 | – | 620 | – | (620 | ) | – | ||||||||||||||||||
Counterparty 4 | 4,447 | 762 | 5,209 | (2,135 | ) | (3,074 | ) | – | |||||||||||||||||
26,168 | 1,024 | 27,192 | (2,397 | ) | (24,795 | ) | – | ||||||||||||||||||
Repurchase arrangements and similar borrowings | 12,752,311 | – | 12,752,311 | (12,752,311 | ) | – | – | ||||||||||||||||||
$ | 12,778,479 | $ | 1,024 | $ | 12,779,503 | $ | (12,754,708 | ) | $ | (24,795 | ) | $ | – | ||||||||||||
As of December 31, 2013: | |||||||||||||||||||||||||
Derivatives by counterparty: | |||||||||||||||||||||||||
Counterparty 1 | $ | 6,002 | $ | – | $ | 6,002 | $ | (3,911 | ) | $ | (2,091 | ) | $ | – | |||||||||||
Counterparty 2 | 6,352 | – | 6,352 | (634 | ) | (5,718 | ) | – | |||||||||||||||||
Counterparty 3 | 1,581 | – | 1,581 | – | (1,581 | ) | – | ||||||||||||||||||
Counterparty 4 | 2,862 | – | 2,862 | (460 | ) | (2,402 | ) | – | |||||||||||||||||
16,797 | – | 16,797 | (5,005 | ) | (11,792 | ) | – | ||||||||||||||||||
Repurchase arrangements and similar borrowings | 12,487,604 | – | 12,487,604 | (12,487,604 | ) | – | – | ||||||||||||||||||
$ | 12,504,401 | $ | – | $ | 12,504,401 | $ | (12,492,609 | ) | $ | (11,792 | ) | $ | – | ||||||||||||
(a) | Amounts presented are limited to recognized liabilities and cash collateral received associated with the indicated counterparty sufficient to reduce the related Net Amount to zero in accordance with ASU No. 2011-11, as amended by ASU No. 2013-01. | ||||||||||||||||||||||||
(b) | Amounts include accrued interest of $8.9 million and $5.5 million on interest rate swap agreements and $2.5 million and $4.7 million on repurchase arrangements and similar borrowings, included in “Accounts payable and accrued expenses” on the face of the Balance Sheets as of September 30, 2014 and December 31, 2013, respectively. | ||||||||||||||||||||||||
(c) | Amounts presented are limited to recognized assets and collateral pledged associated with the indicated counterparty sufficient to reduce the related Net Amount to zero in accordance with ASU No. 2011-11, as amended by ASU No. 2013-01. | ||||||||||||||||||||||||
Changes in Accumulated Other Comprehensive Income | ' | ||||||||||||||||||||||||
Changes in Accumulated other comprehensive income by component for the quarter and nine months ended September 30, 2014 were as follows (in thousands): | |||||||||||||||||||||||||
Gains and Losses | Unrealized Gains | Total | |||||||||||||||||||||||
on Cash Flow Hedges | and Losses on | ||||||||||||||||||||||||
Available-for-Sale Securities | |||||||||||||||||||||||||
Balance at June 30, 2014 | $ | (21,853 | ) | $ | 258,633 | $ | 236,780 | ||||||||||||||||||
Activity for the quarter ended September 30, 2014: | |||||||||||||||||||||||||
Other comprehensive income (loss) before reclassifications | 97 | (10,720 | ) | (10,623 | ) | ||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income | 5,826 | – | 5,826 | ||||||||||||||||||||||
Other comprehensive income (loss) | 5,923 | (10,720 | ) | (4,797 | ) | ||||||||||||||||||||
Balance at September 30, 2014 | $ | (15,930 | ) | $ | 247,913 | $ | 231,983 | ||||||||||||||||||
Balance at December 31, 2013 | $ | (6,305 | ) | $ | 225,448 | $ | 219,143 | ||||||||||||||||||
Activity for the nine months ended September 30, 2014: | |||||||||||||||||||||||||
Other comprehensive income (loss) before reclassifications | (25,557 | ) | 22,465 | (3,092 | ) | ||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income | 15,932 | – | 15,932 | ||||||||||||||||||||||
Other comprehensive income (loss) | (9,625 | ) | 22,465 | 12,840 | |||||||||||||||||||||
Balance at September 30, 2014 | $ | (15,930 | ) | $ | 247,913 | $ | 231,983 |
UNSECURED_BORROWINGS_Tables
UNSECURED BORROWINGS (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
UNSECURED BORROWINGS [Abstract] | ' | ||||||||
Schedule of Subordinated Note Balances and Related Weighted Average Interest Rates | ' | ||||||||
Note balances and related weighted average interest rates as of September 30, 2014 and December 31, 2013 (calculated including issue cost amortization) were as follows (dollars in thousands): | |||||||||
Borrowings | Average | ||||||||
Outstanding | Rate * | ||||||||
Junior subordinated notes associated with: | |||||||||
Capstead Mortgage Trust I | $ | 35,000 | 8.31 | % | |||||
Capstead Mortgage Trust II | 40,000 | 8.46 | |||||||
Capstead Mortgage Trust III | 25,000 | 8.78 | |||||||
$ | 100,000 | 8.49 | |||||||
* | The indicated weighted average rates have been in effect since issuance. After considering cash flow hedges that coincide with the floating rate terms of these borrowings that begin in October and December 2015 for the notes associated with Capstead Mortgage Trusts I and II and September 2016 for the notes associated with Capstead Mortgage Trust III, the effective borrowing rate during the final 20 years of these borrowings will average 7.56%, subject to certain adjustments for the effects of measured hedge ineffectiveness, if any. |
DISCLOSURES_REGARDING_FAIR_VAL1
DISCLOSURES REGARDING FAIR VALUES OF FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
DISCLOSURES REGARDING FAIR VALUES OF FINANCIAL INSTRUMENTS [Abstract] | ' | ||||||||||||||||
Financial Instruments Other than Debt Securities | ' | ||||||||||||||||
Fair value-related disclosures for financial instruments other than debt securities were as follows as of the indicated dates (in thousands): | |||||||||||||||||
30-Sep-14 | 31-Dec-13 | ||||||||||||||||
Carrying | Fair | Carrying | Fair | ||||||||||||||
Amount | Value | Amount | Value | ||||||||||||||
Financial assets: | |||||||||||||||||
Residential mortgage loans | $ | 5,285 | $ | 5,400 | $ | 6,898 | $ | 7,000 | |||||||||
Interest rate swap agreements | 2,397 | 2,397 | 5,005 | 5,005 | |||||||||||||
Financial liabilities: | |||||||||||||||||
Repurchase arrangements with initial terms of greater than 120 days | 1,778,517 | 1,778,700 | 36,299 | 36,300 | |||||||||||||
Unsecured borrowings | 100,000 | 100,400 | 100,000 | 101,000 | |||||||||||||
Interest rate swap agreements | 18,276 | 18,276 | 11,304 | 11,304 | |||||||||||||
Fair Value and Related Disclosures for Debt Securities | ' | ||||||||||||||||
Fair value-related disclosures for debt securities were as follows as of the indicated dates (in thousands): | |||||||||||||||||
Amortized | Gross Unrealized | ||||||||||||||||
Cost Basis | Gains | Losses | Fair Value | ||||||||||||||
30-Sep-14 | |||||||||||||||||
Agency Securities classified as available-for-sale: | |||||||||||||||||
Fannie Mae/Freddie Mac | $ | 10,711,999 | $ | 242,301 | $ | 5,517 | $ | 10,948,783 | |||||||||
Ginnie Mae | 2,753,329 | 16,838 | 5,709 | 2,764,458 | |||||||||||||
Residential mortgage securities classified as held-to-maturity | 3,754 | 128 | – | 3,882 | |||||||||||||
31-Dec-13 | |||||||||||||||||
Agency Securities classified as available-for-sale: | |||||||||||||||||
Fannie Mae/Freddie Mac | 11,019,116 | 224,456 | 12,468 | 11,231,104 | |||||||||||||
Ginnie Mae | 2,220,035 | 18,384 | 4,924 | 2,233,495 | |||||||||||||
Residential mortgage securities classified as held-to-maturity | 4,376 | 211 | – | 4,587 | |||||||||||||
Securities in Unrealized Loss Position | ' | ||||||||||||||||
30-Sep-14 | 31-Dec-13 | ||||||||||||||||
Fair | Unrealized | Fair | Unrealized | ||||||||||||||
Value | Loss | Value | Loss | ||||||||||||||
Securities in an unrealized loss position: | |||||||||||||||||
One year or greater | $ | 689,189 | $ | 6,491 | $ | 39,030 | $ | 380 | |||||||||
Less than one year | 1,680,345 | 4,735 | 2,857,724 | 17,012 | |||||||||||||
$ | 2,369,534 | $ | 11,226 | $ | 2,896,754 | $ | 17,392 |
COMPENSATION_PROGRAMS_Tables
COMPENSATION PROGRAMS (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||
COMPENSATION PROGRAMS [Abstract] | ' | ||||||||||||||||||||||||||||
Schedule of Performance-Based Stock Awards | ' | ||||||||||||||||||||||||||||
Information pertaining to absolute return performance-based stock awards issued to employees pursuant to this program is as follows: | |||||||||||||||||||||||||||||
Final | Remaining Shares with | ||||||||||||||||||||||||||||
Grant Date | Total | Measurement | Initial Measurement Periods | ||||||||||||||||||||||||||
Year of | Fair Value | Original | Period Ends | Ending December 31 | |||||||||||||||||||||||||
Grant | Per Share | Grants | Forfeited | 31-Dec | 2014 | 2015 | 2016 | ||||||||||||||||||||||
2008 (a) | $ | 10.18 | 140,658 | 5,464 | n/ | a | – | – | – | ||||||||||||||||||||
2009 (b) | 14.33 | 110,917 | 4,571 | n/ | a | – | – | – | |||||||||||||||||||||
2010 (c) | 12.44 | 128,766 | 5,759 | 2017 | 61,499 | – | – | ||||||||||||||||||||||
2011 | 12.72 | 132,490 | 5,050 | 2018 | 63,722 | 63,718 | – | ||||||||||||||||||||||
2012 | 11.67 | 145,399 | 5,697 | 2019 | – | 69,853 | 69,849 | ||||||||||||||||||||||
(a) | The absolute return metrics for the three-year measurement periods ending December 31, 2012 and 2011 were met resulting in the vesting of 67,595 shares associated with the second 50% of this grant in January 2013 and 67,599 shares associated with the first 50% of this grant in February 2012. | ||||||||||||||||||||||||||||
(b) | The absolute return metrics for the three-year measurement periods ending December 31, 2013 and 2012 were met resulting in the vesting of 52,915 shares associated with the second 50% of this grant in January 2014 and 53,431 shares associated with the first 50% of this grant in January 2013. | ||||||||||||||||||||||||||||
(c) | The absolute return metric for the first three-year measurement period ending December 31, 2013 was met resulting in the vesting of 61,508 shares associated with the first 50% of this grant in January 2014. | ||||||||||||||||||||||||||||
Schedule of Performance and Service-Based Stock Award Activity | ' | ||||||||||||||||||||||||||||
Performance-based and service-based stock award activity for quarter and nine months ended September 30, 2014 is summarized below: | |||||||||||||||||||||||||||||
Weighted Average | |||||||||||||||||||||||||||||
Number of | Grant Date | ||||||||||||||||||||||||||||
Shares | Fair Value | ||||||||||||||||||||||||||||
Unvested stock awards outstanding at December 31, 2013 | 528,931 | $ | 12.51 | ||||||||||||||||||||||||||
Grants | 35,000 | 13.16 | |||||||||||||||||||||||||||
Vestings | (164,587 | ) | 13.23 | ||||||||||||||||||||||||||
Unvested stock awards outstanding at September 30, 2014 | 399,344 | 12.28 | |||||||||||||||||||||||||||
Schedule Of Option Award Activity | ' | ||||||||||||||||||||||||||||
Option award activity for the nine months ended September 30, 2014 is summarized below: | |||||||||||||||||||||||||||||
Number of | Weighted Average | ||||||||||||||||||||||||||||
Shares | Exercise Price | ||||||||||||||||||||||||||||
Option awards outstanding at December 31, 2013 | 77,500 | $ | 11.75 | ||||||||||||||||||||||||||
Expirations | (10,000 | ) | 14.41 | ||||||||||||||||||||||||||
Exercises (aggregate intrinsic value: $67,000) | (27,500 | ) | 10.63 | ||||||||||||||||||||||||||
Option awards outstanding at September 30, 2014 | 40,000 | 11.86 |
NET_INCOME_PER_COMMON_SHARE_Ba
NET INCOME PER COMMON SHARE - Basic and Diluted Net Income Per Common Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Numerator for basic net income per common share: [Abstract] | ' | ' | ' | ' |
Net income | $32,391 | $24,702 | $107,346 | $89,514 |
Redemption premiums paid on Series A and Series B preferred shares | 0 | 0 | 0 | -19,924 |
Preferred share dividends | -3,529 | -3,188 | -10,216 | -14,325 |
Earnings participation of unvested stock awards | -24 | -32 | -58 | -96 |
Numerator for basic net income per common share | 28,838 | 21,482 | 97,072 | 55,169 |
Denominator for basic net income per common share: [Abstract] | ' | ' | ' | ' |
Weighted average common shares outstanding (in shares) | 95,793 | 95,761 | 95,779 | 95,647 |
Average unvested stock awards outstanding (in shares) | -388 | -493 | -395 | -508 |
Denominator for basic net income per common share (in shares) | 95,405 | 95,268 | 95,384 | 95,139 |
Basic net income per common share (in dollars per share) | $0.30 | $0.23 | $1.02 | $0.58 |
Numerator for diluted net income per common share: [Abstract] | ' | ' | ' | ' |
Net income available to common stockholders | 28,838 | 21,482 | 97,072 | 55,169 |
Dividends on dilutive convertible preferred shares | 0 | 0 | 0 | 44 |
Numerator for diluted net income per common share | $28,838 | $21,482 | $97,072 | $55,213 |
Denominator for diluted net income per common share: [Abstract] | ' | ' | ' | ' |
Basic weighted average common shares outstanding (in shares) | 95,405 | 95,268 | 95,384 | 95,139 |
Net effect of dilutive equity awards | 272 | 148 | 230 | 133 |
Net effect of dilutive convertible preferred shares (in shares) | 0 | 0 | 0 | 101 |
Denominator for diluted net income per common share (in shares) | 95,677 | 95,416 | 95,614 | 95,373 |
Diluted net income per common share (in dollars per share) | $0.30 | $0.23 | $1.02 | $0.58 |
NET_INCOME_PER_COMMON_SHARE_Po
NET INCOME PER COMMON SHARE - Potentially Dilutive Securities (Details) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||||
NET INCOME PER COMMON SHARE [Abstract] | ' | ' | ' | ' | ||||
Antidilutive convertible preferred shares (in shares) | 0 | [1] | 0 | [1] | 0 | [1] | 16,539 | [1] |
Antidilutive equity awards excludable under the treasury stock method | 0 | 35 | 0 | 35 | ||||
[1] | The Series A and Series B preferred shares were redeemed in June 2013. |
RESIDENTIAL_MORTGAGE_INVESTMEN2
RESIDENTIAL MORTGAGE INVESTMENTS - Schedule of Residential Mortgage Investments (Details) (USD $) | 9 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 | ||
Schedule Of Residential Mortgage Investments [Line Items] | ' | ' | ||
Unpaid Principal Balance | $13,047,488 | $12,832,514 | ||
Investment Premiums | 426,880 | 417,912 | ||
Amortized Cost Basis | 13,474,368 | 13,250,426 | ||
Carrying Amount | 13,722,281 | [1] | 13,475,874 | [1] |
Net WAC (in hundredths) | 2.56% | [2] | 2.59% | [2] |
Average Yield (in hundredths) | 1.60% | [2] | 1.74% | [2] |
Agency Securities [Member] | ' | ' | ||
Schedule Of Residential Mortgage Investments [Line Items] | ' | ' | ||
Unpaid Principal Balance | 13,040,184 | 12,823,417 | ||
Investment Premiums | 426,830 | 417,854 | ||
Amortized Cost Basis | 13,467,014 | 13,241,271 | ||
Carrying Amount | 13,714,927 | [1] | 13,466,719 | [1] |
Net WAC (in hundredths) | 2.56% | [2] | 2.59% | [2] |
Average Yield (in hundredths) | 1.60% | [2] | 1.74% | [2] |
Agency Securities [Member] | Fixed-Rate [Member] | ' | ' | ||
Schedule Of Residential Mortgage Investments [Line Items] | ' | ' | ||
Unpaid Principal Balance | 1,717 | 2,158 | ||
Investment Premiums | 5 | 6 | ||
Amortized Cost Basis | 1,722 | 2,164 | ||
Carrying Amount | 1,724 | [1] | 2,167 | [1] |
Net WAC (in hundredths) | 6.64% | [2] | 6.67% | [2] |
Average Yield (in hundredths) | 6.17% | [2] | 6.47% | [2] |
Agency Securities [Member] | ARMs [Member] | ' | ' | ||
Schedule Of Residential Mortgage Investments [Line Items] | ' | ' | ||
Unpaid Principal Balance | 10,377,592 | 10,675,620 | ||
Investment Premiums | 334,371 | 343,452 | ||
Amortized Cost Basis | 10,711,963 | 11,019,072 | ||
Carrying Amount | 10,948,745 | [1] | 11,231,057 | [1] |
Net WAC (in hundredths) | 2.53% | [2] | 2.58% | [2] |
Average Yield (in hundredths) | 1.62% | [2] | 1.76% | [2] |
Agency Securities [Member] | Ginnie Mae ARMs [Member] | ' | ' | ||
Schedule Of Residential Mortgage Investments [Line Items] | ' | ' | ||
Unpaid Principal Balance | 2,660,875 | 2,145,639 | ||
Investment Premiums | 92,454 | 74,396 | ||
Amortized Cost Basis | 2,753,329 | 2,220,035 | ||
Carrying Amount | 2,764,458 | [1] | 2,233,495 | [1] |
Net WAC (in hundredths) | 2.65% | [2] | 2.64% | [2] |
Average Yield (in hundredths) | 1.50% | [2] | 1.64% | [2] |
Residential Mortgage Loans [Member] | ' | ' | ||
Schedule Of Residential Mortgage Investments [Line Items] | ' | ' | ||
Unpaid Principal Balance | 5,269 | 6,877 | ||
Investment Premiums | 16 | 21 | ||
Amortized Cost Basis | 5,285 | 6,898 | ||
Carrying Amount | 5,285 | [1] | 6,898 | [1] |
Net WAC (in hundredths) | 4.97% | [2] | 5.03% | [2] |
Average Yield (in hundredths) | 3.84% | [2] | 4.20% | [2] |
Residential Mortgage Loans [Member] | Fixed-Rate [Member] | ' | ' | ||
Schedule Of Residential Mortgage Investments [Line Items] | ' | ' | ||
Unpaid Principal Balance | 1,896 | 2,633 | ||
Investment Premiums | 2 | 3 | ||
Amortized Cost Basis | 1,898 | 2,636 | ||
Carrying Amount | 1,898 | [1] | 2,636 | [1] |
Net WAC (in hundredths) | 6.97% | [2] | 6.99% | [2] |
Average Yield (in hundredths) | 5.76% | [2] | 5.63% | [2] |
Residential Mortgage Loans [Member] | ARMs [Member] | ' | ' | ||
Schedule Of Residential Mortgage Investments [Line Items] | ' | ' | ||
Unpaid Principal Balance | 3,373 | 4,244 | ||
Investment Premiums | 14 | 18 | ||
Amortized Cost Basis | 3,387 | 4,262 | ||
Carrying Amount | 3,387 | [1] | 4,262 | [1] |
Net WAC (in hundredths) | 3.86% | [2] | 3.81% | [2] |
Average Yield (in hundredths) | 2.89% | [2] | 3.35% | [2] |
Collateral For Structured Financings [Member] | ' | ' | ||
Schedule Of Residential Mortgage Investments [Line Items] | ' | ' | ||
Unpaid Principal Balance | 2,035 | 2,220 | ||
Investment Premiums | 34 | 37 | ||
Amortized Cost Basis | 2,069 | 2,257 | ||
Carrying Amount | $2,069 | [1] | $2,257 | [1] |
Net WAC (in hundredths) | 8.10% | [2] | 8.09% | [2] |
Average Yield (in hundredths) | 7.64% | [2] | 7.68% | [2] |
[1] | Includes unrealized gains and losses for residential mortgage investments classified as available-for-sale (see NOTE 10). | |||
[2] | 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 the indicated balance sheet date. Net WAC is expressed as a percentage calculated on an annualized basis on the unpaid principal balances of the mortgage loans underlying these investments. Average yield is presented for the quarter then ended, and is based on the cash component of interest income expressed as a percentage calculated on an annualized basis on average amortized cost basis (the cash yield) less the effects of amortizing investment premiums. Investment premium amortization is determined using the interest method and incorporates actual and anticipated future mortgage prepayments. |
RESIDENTIAL_MORTGAGE_INVESTMEN3
RESIDENTIAL MORTGAGE INVESTMENTS - Additional Information (Details) (USD $) | 9 Months Ended |
In Billions, unless otherwise specified | Sep. 30, 2014 |
Schedule Of Residential Mortgage Investments [Line Items] | ' |
Mortgage securities weighted average contractual maturity, months | '289 months |
Available for sale ARM securities, current-reset | $7.61 |
Available for sale ARM securities, longer-to-reset | $5.86 |
Current-Reset ARMs [Member] | ' |
Schedule Of Residential Mortgage Investments [Line Items] | ' |
Agency securities average months to roll, months | '6 months 6 days |
Current-Reset ARMs [Member] | Maximum [Member] | ' |
Schedule Of Residential Mortgage Investments [Line Items] | ' |
Agency securities months to roll | '18 months |
Longer-To-Reset ARMs [Member] | ' |
Schedule Of Residential Mortgage Investments [Line Items] | ' |
Agency securities average months to roll, months | '39 months 24 days |
Longer-To-Reset ARMs [Member] | Minimum [Member] | ' |
Schedule Of Residential Mortgage Investments [Line Items] | ' |
Agency securities months to roll | '18 months |
INVESTMENTS_IN_UNCONSOLIDATED_1
INVESTMENTS IN UNCONSOLIDATED AFFILIATES - Trusts (Details) (USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
INVESTMENTS IN UNCONSOLIDATED AFFILIATES [Abstract] | ' |
Issuance of common securities | $3.10 |
REPURCHASE_ARRANGEMENTS_AND_SI2
REPURCHASE ARRANGEMENTS AND SIMILAR BORROWINGS - Collateral and Rates (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||||||||||||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | ||
Minimum [Member] | Maximum [Member] | Quarter-End Borrowing Rates Adjusted For Effects Of Related Derivatives Held As Cash Flow Hedges [Member] | Quarter-End Borrowing Rates Adjusted For Effects Of Related Derivatives Held As Cash Flow Hedges [Member] | Agency Securities [Member] | Agency Securities [Member] | Agency Securities [Member] | Agency Securities [Member] | Agency Securities [Member] | Agency Securities [Member] | Agency Securities [Member] | Agency Securities [Member] | Agency Securities [Member] | |||||
Borrowings With Maturities Of 30 Days Or Less [Member] | Borrowings With Maturities Of 30 Days Or Less [Member] | Borrowings With Maturities of 31 to 90 Days [Member] | Borrowings With Maturities of 31 to 90 Days [Member] | Borrowings With Maturities Greater Than 90 Days [Member] | Similar Borrowings [Member] | Similar Borrowings [Member] | |||||||||||
Repurchase Arrangements And Similar Borrowings, Including Interest Rate Hedging Activity [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Maturity period of repurchase arrangements | ' | ' | 'P30D | 'P90D | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Collateral Carrying Amount | $13,400,000 | $13,120,000 | ' | ' | ' | ' | $13,399,616 | $13,123,757 | $11,007,943 | $12,169,534 | $519,510 | $951,966 | $1,870,094 | $2,069 | [1] | $2,257 | [1] |
Accrued Interest Receivable | ' | ' | ' | ' | ' | ' | 27,609 | 30,263 | 22,583 | 28,195 | 1,099 | 2,068 | 3,927 | 0 | [1] | 0 | [1] |
Borrowings Outstanding | 12,749,762 | 12,482,900 | ' | ' | ' | ' | 12,749,762 | 12,482,900 | 10,471,646 | 11,578,211 | 497,530 | 902,432 | 1,778,517 | 2,069 | [1] | 2,257 | [1] |
Average Borrowing Rates (in hundredths) | ' | ' | ' | ' | 0.52% | 0.49% | 0.33% | 0.38% | 0.30% | 0.38% | 0.31% | 0.38% | 0.52% | 8.10% | [1] | 8.09% | [1] |
Average borrowings adjusted amount | $12,690,463 | $12,510,701 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Average borrowings rates adjusted for effects related cash flow derivatives (in hundredths) | 0.51% | 0.49% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
[1] | The maturity of structured financings is directly affected by prepayments on the related mortgage pass-through securities pledged as collateral and these financings are subject to redemption by the residual bondholders. |
USE_OF_DERIVATIVE_FINANCIAL_IN2
USE OF DERIVATIVE FINANCIAL INSTRUMENTS, OFFSETTING DISCLOSURES AND CHANGES IN OTHER COMPREHENSIVE INCOME BY COMPONENT - Schedule of Swap Agreements (Details) (USD $) | 9 Months Ended | 12 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2010 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | |
Interest Rate SWAP Currently-Paying Contracts [Member] | Interest Rate SWAP Currently-Paying Contracts [Member] | Interest Rate SWAP Currently-Paying Contracts [Member] | Interest Rate SWAP Currently-Paying Contracts [Member] | Interest Rate SWAP Currently-Paying Contracts [Member] | Interest Rate SWAP Currently-Paying Contracts [Member] | Interest Rate SWAP Currently-Paying Contracts [Member] | Interest Rate SWAP Currently-Paying Contracts [Member] | Interest Rate SWAP Currently-Paying Contracts [Member] | Interest Rate SWAP Forward-Starting Contracts [Member] | Interest Rate SWAP Forward-Starting Contracts [Member] | Interest Rate SWAP Forward-Starting Contracts [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap New One [Member] | Interest Rate Swap New One [Member] | Interest Rate Swap New Two [Member] | Interest Rate Swap New Two [Member] | Interest Rate Swap Expired One [Member] | Interest Rate Swap Expired One [Member] | Repurchase Arrangements And Similar Borrowings [Member] | Repurchase Arrangements And Similar Borrowings [Member] | ||
Fourth Quarter 2014 [Member] | First Quarter 2015 [Member] | Second Quarter 2015 [Member] | Third Quarter 2015 [Member] | Fourth Quarter 2015 [Member] | First Quarter 2016 [Member] | Second quarter 2016 [Member] | Third Quarter 2016 [Member] | Fourth Quarter 2016 [Member] | First Quarter 2017 [Member] | |||||||||||||||
Derivative Instruments And Hedging Activities [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
SWAP agreement notional amount during period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $100,000,000 | ' | ' | $500,000,000 | $1,900,000,000 | ' | ' | ' | ' | ' | ' |
SWAP agreement average interest rate during period (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.09% | ' | ' | 0.72% | 0.61% | ' | ' | ' | ' | ' | ' |
Swap agreement notional amount expiring during period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 700,000,000 | 3,500,000,000 | 200,000,000 | 800,000,000 | ' | ' |
SWAP agreement average interest rate expiring during period (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.56% | 0.51% | 0.51% | 0.53% | ' | ' |
Notional Amount | 7,800,000,000 | 6,900,000,000 | 500,000,000 | 1,100,000,000 | 200,000,000 | 400,000,000 | 1,200,000,000 | 1,700,000,000 | 1,100,000,000 | 700,000,000 | 900,000,000 | 800,000,000 | 100,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Average Fixed Rate Payment Requirement (in hundredths) | ' | 0.50% | 0.58% | 0.50% | 0.43% | 0.47% | 0.45% | 0.51% | 0.47% | 0.56% | 0.69% | 0.66% | 0.90% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payment term of LIBOR interest rate agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '20 years | ' | ' | '2 years | ' | ' | ' | ' | ' | ' | ' |
Derivative instruments unrealized losses to be recognized | 15,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued Interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $8,900,000 | $5,500,000 | ' | ' | ' | ' | ' | ' | $2,500,000 | $4,700,000 |
USE_OF_DERIVATIVE_FINANCIAL_IN3
USE OF DERIVATIVE FINANCIAL INSTRUMENTS, OFFSETTING DISCLOSURES AND CHANGES IN OTHER COMPREHENSIVE INCOME BY COMPONENT - Balance Sheet and Income Statement Location (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |||||
Balance sheet-related [Abstract] | ' | ' | ' | ' | ' | |||||
Interest rate swap agreements at fair value, net assets (liability) | ($24,795) | ' | ($24,795) | ' | ($11,792) | |||||
Income statement-related [Abstract] | ' | ' | ' | ' | ' | |||||
Amount of loss reclassified from Accumulated other comprehensive income related to the effective portion of active positions | 5,826 | 3,698 | 15,932 | 13,548 | ' | |||||
Other Comprehensive Income (Loss) [Member] | ' | ' | ' | ' | ' | |||||
Other comprehensive income related [Abstract] | ' | ' | ' | ' | ' | |||||
Amount of gain (loss) recognized in other comprehensive income (loss) (effective portion) | 97 | -10,867 | -25,557 | 9,136 | ' | |||||
Interest Expense [Member] | ' | ' | ' | ' | ' | |||||
Income statement-related [Abstract] | ' | ' | ' | ' | ' | |||||
Amount of loss reclassified from Accumulated other comprehensive income related to the effective portion of active positions | -5,826 | -3,698 | -15,932 | -13,548 | ' | |||||
Amount of gain (loss) recognized (ineffective portion) | 45 | -23 | -123 | 73 | ' | |||||
Increase in interest expense and decrease in Net income as a result of the use of Derivatives | -5,781 | [1] | -3,721 | [1] | -16,055 | [1] | -13,475 | [1] | ' | |
Accounts Payable and Accrued Liabilities [Member] | ' | ' | ' | ' | ' | |||||
Balance sheet-related [Abstract] | ' | ' | ' | ' | ' | |||||
Related net interest payable | -8,916 | [2] | ' | -8,916 | [2] | ' | -5,493 | [2] | ||
Borrowings Under Repurchase Arrangements [Member] | Other Assets [Member] | ' | ' | ' | ' | ' | |||||
Balance sheet-related [Abstract] | ' | ' | ' | ' | ' | |||||
Swap agreements in a gain position (an asset) related to borrowings | 2,397 | [3] | ' | 2,397 | [3] | ' | 1,094 | [3] | ||
Swap agreements in a loss position (a liability) related to borrowings | -7,026 | [3] | ' | -7,026 | [3] | ' | -11,304 | [3] | ||
Unsecured Borrowings [Member] | Other Assets [Member] | ' | ' | ' | ' | ' | |||||
Balance sheet-related [Abstract] | ' | ' | ' | ' | ' | |||||
Swap agreements in a gain position (an asset) related to borrowings | 0 | [3] | ' | 0 | [3] | ' | 3,911 | [3] | ||
Swap agreements in a loss position (a liability) related to borrowings | ($11,250) | [3] | ' | ($11,250) | [3] | ' | $0 | [3] | ||
[1] | Included in "Interest expense: Repurchase arrangements and similar borrowings" on the face of the Statements of Income. | |||||||||
[2] | Included in "Accounts payable and accrued expenses" on the face of the Balance Sheets. | |||||||||
[3] | The fair value of Derivatives with realized and unrealized gains are aggregated and recorded as an asset on the face of the Balance Sheets separately from the fair value of Derivatives with realized and unrealized losses that are recorded as a liability. The amount of unrealized losses scheduled to be recognized in the Statements of Income over the next twelve months primarily in the form of fixed-rate swap payments in excess of current market rates totaled $15.5 million at September 30, 2014. |
USE_OF_DERIVATIVE_FINANCIAL_IN4
USE OF DERIVATIVE FINANCIAL INSTRUMENTS, OFFSETTING DISCLOSURES AND CHANGES IN OTHER COMPREHENSIVE INCOME BY COMPONENT - Offsetting Assets and Liabilities (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Offsetting of derivative assets [Abstract] | ' | ' | ||
Gross Amounts of Recognized Assets | $2,397 | $5,005 | ||
Net Amounts of Assets Presented in the Balance Sheet | 24,795 | 11,792 | ||
Cash Collateral Received | 42,716 | 25,502 | ||
Offsetting of financial liabilities and derivative liabilities [Abstract] | ' | ' | ||
Gross Amounts of Recognized Liabilities | 18,276 | 11,304 | ||
Counterparty 1 [Member] | ' | ' | ||
Offsetting of derivative assets [Abstract] | ' | ' | ||
Gross Amounts of Recognized Assets | ' | 3,911 | ||
Gross Amounts Offset in the Balance Sheet | ' | 0 | ||
Net Amounts of Assets Presented in the Balance Sheet | ' | 3,911 | ||
Financial Instruments | ' | -3,911 | [1] | |
Cash Collateral Received | ' | 0 | [1] | |
Net Amount | ' | 0 | ||
Offsetting of financial liabilities and derivative liabilities [Abstract] | ' | ' | ||
Gross Amounts of Recognized Liabilities | 15,785 | [2] | 6,002 | [2] |
Gross Amounts Offset in the Balance Sheet | 0 | 0 | ||
Net Amounts of Liabilities Presented in the Balance Sheet | 15,785 | [1] | 6,002 | [1] |
Financial Instruments | 0 | [3] | -3,911 | [3] |
Cash Collateral Pledged | -15,785 | [3] | -2,091 | [3] |
Net Amount | 0 | 0 | ||
Counterparty 2 [Member] | ' | ' | ||
Offsetting of derivative assets [Abstract] | ' | ' | ||
Gross Amounts of Recognized Assets | 0 | 634 | ||
Gross Amounts Offset in the Balance Sheet | 262 | 0 | ||
Net Amounts of Assets Presented in the Balance Sheet | 262 | 634 | ||
Financial Instruments | -262 | [1] | -634 | [1] |
Cash Collateral Received | 0 | [1] | 0 | [1] |
Net Amount | 0 | 0 | ||
Offsetting of financial liabilities and derivative liabilities [Abstract] | ' | ' | ||
Gross Amounts of Recognized Liabilities | 5,316 | [2] | 6,352 | [2] |
Gross Amounts Offset in the Balance Sheet | 262 | 0 | ||
Net Amounts of Liabilities Presented in the Balance Sheet | 5,578 | [1] | 6,352 | [1] |
Financial Instruments | -262 | [3] | -634 | [3] |
Cash Collateral Pledged | -5,316 | [3] | -5,718 | [3] |
Net Amount | 0 | 0 | ||
Counterparty 3 [Member] | ' | ' | ||
Offsetting of financial liabilities and derivative liabilities [Abstract] | ' | ' | ||
Gross Amounts of Recognized Liabilities | 620 | [2] | 1,581 | [2] |
Gross Amounts Offset in the Balance Sheet | 0 | 0 | ||
Net Amounts of Liabilities Presented in the Balance Sheet | 620 | [1] | 1,581 | [1] |
Financial Instruments | 0 | [3] | 0 | [3] |
Cash Collateral Pledged | -620 | [3] | -1,581 | [3] |
Net Amount | 0 | 0 | ||
Counter party 4 [Member] | ' | ' | ||
Offsetting of derivative assets [Abstract] | ' | ' | ||
Gross Amounts of Recognized Assets | 1,373 | 460 | ||
Gross Amounts Offset in the Balance Sheet | 762 | 0 | ||
Net Amounts of Assets Presented in the Balance Sheet | 2,135 | 460 | ||
Financial Instruments | -2,135 | [1] | -460 | [1] |
Cash Collateral Received | 0 | [1] | 0 | [1] |
Net Amount | 0 | 0 | ||
Offsetting of financial liabilities and derivative liabilities [Abstract] | ' | ' | ||
Gross Amounts of Recognized Liabilities | 4,447 | [2] | 2,862 | [2] |
Gross Amounts Offset in the Balance Sheet | 762 | 0 | ||
Net Amounts of Liabilities Presented in the Balance Sheet | 5,209 | [1] | 2,862 | [1] |
Financial Instruments | -2,135 | [3] | -460 | [3] |
Cash Collateral Pledged | -3,074 | [3] | -2,402 | [3] |
Net Amount | 0 | 0 | ||
Derivative Counterparties [Member] | ' | ' | ||
Offsetting of derivative assets [Abstract] | ' | ' | ||
Gross Amounts of Recognized Assets | 1,373 | 5,005 | ||
Gross Amounts Offset in the Balance Sheet | 1,024 | 0 | ||
Net Amounts of Assets Presented in the Balance Sheet | 2,397 | 5,005 | ||
Financial Instruments | -2,397 | [1] | -5,005 | [1] |
Cash Collateral Received | 0 | [1] | 0 | [1] |
Net Amount | 0 | 0 | ||
Offsetting Financial Liabilities and Derivative Liabilities [Member] | ' | ' | ||
Offsetting of financial liabilities and derivative liabilities [Abstract] | ' | ' | ||
Gross Amounts of Recognized Liabilities | 12,778,479 | [2] | 12,504,401 | [2] |
Gross Amounts Offset in the Balance Sheet | 1,024 | 0 | ||
Net Amounts of Liabilities Presented in the Balance Sheet | 12,779,503 | [1] | 12,504,401 | [1] |
Financial Instruments | -12,754,708 | [3] | -12,492,609 | [3] |
Cash Collateral Pledged | -24,795 | [3] | -11,792 | [3] |
Net Amount | 0 | 0 | ||
Offsetting Financial Liabilities and Derivative Liabilities [Member] | Repurchase Arrangements and Similar Borrowings [Member] | ' | ' | ||
Offsetting of financial liabilities and derivative liabilities [Abstract] | ' | ' | ||
Gross Amounts of Recognized Liabilities | 12,752,311 | [2] | 12,487,604 | [2] |
Gross Amounts Offset in the Balance Sheet | 0 | 0 | ||
Net Amounts of Liabilities Presented in the Balance Sheet | 12,752,311 | [1] | 12,487,604 | [1] |
Financial Instruments | -12,752,311 | [3] | -12,487,604 | [3] |
Cash Collateral Pledged | 0 | [3] | 0 | [3] |
Net Amount | 0 | 0 | ||
Offsetting Financial Liabilities and Derivative Liabilities [Member] | Derivative Counterparties [Member] | ' | ' | ||
Offsetting of financial liabilities and derivative liabilities [Abstract] | ' | ' | ||
Gross Amounts of Recognized Liabilities | 26,168 | [2] | 16,797 | [2] |
Gross Amounts Offset in the Balance Sheet | 1,024 | 0 | ||
Net Amounts of Liabilities Presented in the Balance Sheet | 27,192 | [1] | 16,797 | [1] |
Financial Instruments | -2,397 | [3] | -5,005 | [3] |
Cash Collateral Pledged | -24,795 | [3] | -11,792 | [3] |
Net Amount | $0 | $0 | ||
[1] | Amounts presented are limited to recognized liabilities and cash collateral received associated with the indicated counterparty sufficient to reduce the related Net Amount to zero in accordance with ASU No. 2011-11, as amended by ASU No. 2013-01. | |||
[2] | Amounts include accrued interest of $8.9 million and $5.5 million on interest rate swap agreements and $2.5 million and $4.7 million on repurchase arrangements and similar borrowings, included in "Accounts payable and accrued expenses" on the face of the Balance Sheets as of September 30, 2014 and December 31, 2013, respectively. | |||
[3] | Amounts presented are limited to recognized assets and collateral pledged associated with the indicated counterparty sufficient to reduce the related Net Amount to zero in accordance with ASU No. 2011-11, as amended by ASU No. 2013-01. |
USE_OF_DERIVATIVE_FINANCIAL_IN5
USE OF DERIVATIVE FINANCIAL INSTRUMENTS, OFFSETTING DISCLOSURES AND CHANGES IN OTHER COMPREHENSIVE INCOME BY COMPONENT - Changes in AOCI (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Accumulated other comprehensive income (loss) [Line Items] | ' | ' | ' | ' |
Beginning Balance | $236,780 | ' | $219,143 | ' |
Other comprehensive income (loss) before reclassifications | -10,623 | ' | -3,092 | ' |
Amount of loss reclassified from Accumulated other comprehensive income related to the effective portion of active positions | 5,826 | 3,698 | 15,932 | 13,548 |
Other comprehensive income (loss) | -4,797 | -34,708 | 12,840 | -81,353 |
Ending Balance | 231,983 | ' | 231,983 | ' |
Gains and Losses on Cash Flow Hedges [Member] | ' | ' | ' | ' |
Accumulated other comprehensive income (loss) [Line Items] | ' | ' | ' | ' |
Beginning Balance | -21,853 | ' | -6,305 | ' |
Other comprehensive income (loss) before reclassifications | 97 | ' | -25,557 | ' |
Amount of loss reclassified from Accumulated other comprehensive income related to the effective portion of active positions | 5,826 | ' | 15,932 | ' |
Other comprehensive income (loss) | 5,923 | ' | -9,625 | ' |
Ending Balance | -15,930 | ' | -15,930 | ' |
Unrealized Gains and Losses on Available-for-sale Securities [Member] | ' | ' | ' | ' |
Accumulated other comprehensive income (loss) [Line Items] | ' | ' | ' | ' |
Beginning Balance | 258,633 | ' | 225,448 | ' |
Other comprehensive income (loss) before reclassifications | -10,720 | ' | 22,465 | ' |
Amount of loss reclassified from Accumulated other comprehensive income related to the effective portion of active positions | 0 | ' | 0 | ' |
Other comprehensive income (loss) | -10,720 | ' | 22,465 | ' |
Ending Balance | $247,913 | ' | $247,913 | ' |
UNSECURED_BORROWINGS_Trusts_De
UNSECURED BORROWINGS - Trusts (Details) (USD $) | 9 Months Ended | ||
Sep. 30, 2014 | Dec. 31, 2013 | ||
Debt Instrument [Line Items] | ' | ' | |
Junior subordinated notes maturity term | '30 years | ' | |
Issuance of common securities | ' | $3,100,000 | |
Remaining issue costs | 2,100,000 | ' | |
Junior subordinated notes borrowings outstanding | 100,000,000 | 100,000,000 | |
Average rate (in hundredths) | 8.49% | [1] | ' |
Debt instrument remaining term | '20 years | ' | |
Effective borrowing rate considering cash flow hedges | 7.56% | ' | |
Special Purpose Statutory Trusts [Member] | ' | ' | |
Debt Instrument [Line Items] | ' | ' | |
Issuance of common securities | ' | 3,100,000 | |
Proceeds from private placement of preferred securities | 100,000,000 | ' | |
Capstead Mortgage Trust I [Member] | ' | ' | |
Debt Instrument [Line Items] | ' | ' | |
Junior subordinated notes borrowings outstanding | 35,000,000 | ' | |
Average rate (in hundredths) | 8.31% | [1] | ' |
Junior subordinated notes, maturity period | 1-Oct-35 | ' | |
Capstead Mortgage Trust II [Member] | ' | ' | |
Debt Instrument [Line Items] | ' | ' | |
Junior subordinated notes borrowings outstanding | 40,000,000 | ' | |
Average rate (in hundredths) | 8.46% | [1] | ' |
Junior subordinated notes, maturity period | 1-Dec-35 | ' | |
Junior subordinated notes, earliest redemption option exercise date | 15-Dec-15 | ' | |
Capstead Mortgage Trust III [Member] | ' | ' | |
Debt Instrument [Line Items] | ' | ' | |
Junior subordinated notes borrowings outstanding | $25,000,000 | ' | |
Average rate (in hundredths) | 8.78% | [1] | ' |
Junior subordinated notes, maturity period | 1-Sep-36 | ' | |
Junior subordinated notes, earliest redemption option exercise date | 15-Sep-16 | ' | |
[1] | The indicated weighted average rates have been in effect since issuance. After considering cash flow hedges that coincide with the floating rate terms of these borrowings that begin in October and December 2015 for the notes associated with Capstead Mortgage Trusts I and II and September 2016 for the notes associated with Capstead Mortgage Trust III, the effective borrowing rate during the final 20 years of these borrowings will average 7.56%, subject to certain adjustments for the effects of measured hedge ineffectiveness, if any. |
CAPITAL_TRANSACTIONS_Details
CAPITAL TRANSACTIONS (Details) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2014 | Sep. 30, 2013 | Jan. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | 31-May-13 | Nov. 05, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | |
Cumulative Redeemable Preferred Stock, Series E [Member] | Cumulative Redeemable Preferred Stock, Series E [Member] | Cumulative Redeemable preferred Stock, Series E issuance one [Member] | Cumulative Redeemable Preferred Stock, Series E issuance two [Member] | Series A And Series B Preferred Stock [Member] | ||||||
Subsequent Event [Member] | ||||||||||
Class of Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Redeemable preferred stock, shares issued (in shares) | ' | ' | ' | ' | ' | 6,800,000 | ' | ' | ' | ' |
Redeemable preferred stock, face value | ' | ' | ' | ' | ' | $170,000,000 | ' | ' | ' | ' |
Preferred stock, dividend rate (in hundredths) | ' | ' | ' | ' | ' | 7.50% | ' | ' | ' | ' |
Redeemable preferred stock, liquidation preference per share (in dollars per share) | ' | ' | ' | ' | ' | $25 | ' | ' | ' | ' |
Reduction in income per share (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ($0.21) |
Cash used for redemption of preferred stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | 207,000,000 |
Redemption preference premiums paid | 0 | 0 | ' | 0 | 19,924,000 | ' | ' | ' | ' | 19,924,000 |
Proceeds from Issuance of Redeemable Preferred Stock | ' | ' | ' | ' | ' | 164,300,000 | ' | 2,500,000 | 16,300,000 | ' |
Cash on hand paid to redeem preferred stock | ' | ' | ' | ' | ' | 42,700,000 | ' | ' | ' | ' |
Additional shares issued (in shares) | ' | ' | ' | ' | ' | ' | 0 | 105,000 | 683,000 | ' |
Average cost per share (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | $23.82 | $23.94 | ' |
Common shares repurchased (in shares) | ' | ' | 3,600,000 | ' | ' | ' | ' | ' | ' | ' |
Common shares repurchased | ' | ' | 42,400,000 | ' | ' | ' | ' | ' | ' | ' |
Common stock repurchase program | ' | ' | $100,000,000 | ' | ' | ' | ' | ' | ' | ' |
DISCLOSURES_REGARDING_FAIR_VAL2
DISCLOSURES REGARDING FAIR VALUES OF FINANCIAL INSTRUMENTS - Balance Sheet Location (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 |
In Thousands, unless otherwise specified | Carrying Amount [Member] | Carrying Amount [Member] | Fair Value [Member] | Fair Value [Member] | Maximum [Member] | ||
Fair value, balance sheet grouping [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Investment Repurchase Agreement Initial Term | ' | ' | ' | ' | ' | ' | '120 days |
Financial assets [Abstract] | ' | ' | ' | ' | ' | ' | ' |
Residential mortgage loans | $13,722,281 | $13,475,874 | $5,285 | $6,898 | $5,400 | $7,000 | ' |
Interest rate swap agreements at fair value | 2,397 | 5,005 | 2,397 | 5,005 | 2,397 | 5,005 | ' |
Financial liabilities [Abstract] | ' | ' | ' | ' | ' | ' | ' |
Repurchase arrangements with initial terms of greater than 120 days, Fair Value | ' | ' | 1,778,517 | 36,299 | 1,778,700 | 36,300 | ' |
Unsecured borrowings | ' | ' | 100,000 | 100,000 | 100,400 | 101,000 | ' |
Interest rate swap agreements | ' | ' | $18,276 | $11,304 | $18,276 | $11,304 | ' |
DISCLOSURES_REGARDING_FAIR_VAL3
DISCLOSURES REGARDING FAIR VALUES OF FINANCIAL INSTRUMENTS - Fair Value and Related Disclosures for Debt Securities (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Residential Mortgage Securities Classified as held-to-Maturity [Member] | ' | ' |
Held-to-maturity securities disclosure [Abstract] | ' | ' |
Held-to-maturities, Amortized Cost Basis | $3,754 | $4,376 |
Held-to-maturities, Gains | 128 | 211 |
Held-to-maturities, Losses | 0 | 0 |
Held-to-maturities, Fair Value | 3,882 | 4,587 |
Fannie Mae/Freddie Mac [Member] | Agency Securities Classified as Available-for-sale [Member] | ' | ' |
Available-for-sale securities disclosure Items [Abstract] | ' | ' |
Available-for-sale securities, Amortized Cost Basis | 10,711,999 | 11,019,116 |
Available-for-sale securities, Gross Unrealized Gains | 242,301 | 224,456 |
Available-for-sale securities, Gross Unrealized Losses | 5,517 | 12,468 |
Available-for-sale securities, Fair Value | 10,948,783 | 11,231,104 |
Ginnie Mae [Member] | Agency Securities Classified as Available-for-sale [Member] | ' | ' |
Available-for-sale securities disclosure Items [Abstract] | ' | ' |
Available-for-sale securities, Amortized Cost Basis | 2,753,329 | 2,220,035 |
Available-for-sale securities, Gross Unrealized Gains | 16,838 | 18,384 |
Available-for-sale securities, Gross Unrealized Losses | 5,709 | 4,924 |
Available-for-sale securities, Fair Value | $2,764,458 | $2,233,495 |
DISCLOSURES_REGARDING_FAIR_VAL4
DISCLOSURES REGARDING FAIR VALUES OF FINANCIAL INSTRUMENTS - Securities in Unrealized Loss Position (Details) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Continuous unrealized loss position, fair value [Abstract] | ' | ' |
One year or greater | $689,189 | $39,030 |
Less than one year | 1,680,345 | 2,857,724 |
Continuous unrealized loss position, Fair Value, Total | 2,369,534 | 2,896,754 |
Continuous unrealized loss position, aggregate loss [Abstract] | ' | ' |
One year or greater | 6,491 | 380 |
Less than one year | 4,735 | 17,012 |
Unrealized Losses, Total | $11,226 | $17,392 |
COMPENSATION_PROGRAMS_Other_Co
COMPENSATION PROGRAMS - Other Compensation Programs (Details) (USD $) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2014 | |
Share Based Compensation Programs [Line Items] | ' | ' | ' |
Accounts payable and accrued expenses total | ' | ' | $1,100,000 |
Short-term incentive compensation program accruals | 391,000 | ' | 883,000 |
DER issued and outstanding (in shares) | 654,000 | ' | 654,000 |
Dividend Equivalent Rights Payable | 222,000 | ' | 222,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date | ' | 1-Jul-15 | ' |
DER expense for the period | 222,000 | ' | 667,000 |
Performance-Based Stock Awards Vesting After Three Year [Member] | ' | ' | ' |
Share Based Compensation Programs [Line Items] | ' | ' | ' |
Share awards vesting period | ' | ' | '3 years |
Stock Options [Member] | ' | ' | ' |
Share Based Compensation Programs [Line Items] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | ' | ' | '3 years 8 months 12 days |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $25,000 | ' | $25,000 |
Share awards contractual term | ' | ' | '10 years |
Long-Term Equity-Based Awards [Member] | ' | ' | ' |
Share Based Compensation Programs [Line Items] | ' | ' | ' |
Issuance of common shares pursuant to future equity-based awards (in shares) | 5,000,000 | ' | 5,000,000 |
Common shares available for future issuances | 4,965,000 | ' | 4,965,000 |
COMPENSATION_PROGRAMS_Schedule
COMPENSATION PROGRAMS - Schedule of Restricted Stock Awards (Details) (USD $) | 3 Months Ended | 9 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||||||||||||||||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jan. 31, 2013 | Feb. 29, 2012 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Jan. 31, 2014 | Jan. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Jan. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |||||||||||||
Remaining Shares Vesting In: 2014 [Member] | Year 2013 One [Member] | Year 2013 Two [Member] | Performance-Based Stock Awards [Member] | Performance-Based Stock Awards [Member] | Performance-Based Stock Awards [Member] | Performance-Based Stock Awards [Member] | Performance-Based Stock Awards [Member] | Performance-Based Stock Awards [Member] | Performance-Based Stock Awards [Member] | Performance-Based Stock Awards [Member] | Performance-Based Stock Awards [Member] | Performance-Based Stock Awards [Member] | Performance-Based Stock Awards [Member] | Performance-Based Stock Awards [Member] | Performance-Based Stock Awards [Member] | Performance-Based Stock Awards [Member] | Performance-Based Stock Awards [Member] | Performance-Based Stock Awards [Member] | Performance-Based Stock Awards [Member] | Performance-Based Stock Awards [Member] | Performance-Based Stock Awards [Member] | Performance-Based Stock Awards [Member] | Performance-Based Stock Awards [Member] | Performance-Based Stock Awards [Member] | Performance-Based Stock Awards [Member] | Performance-Based Stock Awards [Member] | Performance-Based Stock Awards [Member] | Long-term Equity Based Awards [Member] | Long-term Equity Based Awards [Member] | Long-term Equity Based Awards [Member] | Stock Awards Activity [Member] | Stock Awards Activity [Member] | Performance Based Stock Awards Vesting In Three Year [Member] | Performance Based Stock Awards Vesting In Three Year [Member] | Performance Based Stock Awards Vesting After Three Year [Member] | ||||||||||||||||||
Year 2008 [Member] | Year 2008 [Member] | Year 2008 [Member] | Year 2008 [Member] | Year 2008 [Member] | Year 2008 [Member] | Year 2009 [Member] | Year 2009 [Member] | Year 2009 [Member] | Year 2009 [Member] | Year 2009 [Member] | Year 2009 [Member] | Year 2010 [Member] | Year 2010 [Member] | Year 2010 [Member] | Year 2010 [Member] | Year 2010 [Member] | Year 2011 [Member] | Year 2011 [Member] | Year 2011 [Member] | Year 2011 [Member] | Year 2012 [Member] | Year 2012 [Member] | Year 2012 [Member] | Year 2012 [Member] | Minimum [Member] | Maximum [Member] | |||||||||||||||||||||||||||
December 31 2015 [Member] | Remaining Shares Vesting In: 2014 [Member] | Remaining Shares Vesting In: 2015 [Member] | Remaining Shares Vesting In: 2016 [Member] | December 31 2016 [Member] | Remaining Shares Vesting In: 2014 [Member] | Remaining Shares Vesting In: 2015 [Member] | Remaining Shares Vesting In: 2016 [Member] | December 31 2017 [Member] | Remaining Shares Vesting In: 2014 [Member] | Remaining Shares Vesting In: 2015 [Member] | Remaining Shares Vesting In: 2016 [Member] | December 31 2018 [Member] | Remaining Shares Vesting In: 2014 [Member] | Remaining Shares Vesting In: 2015 [Member] | Remaining Shares Vesting In: 2016 [Member] | December 31 2019 [Member] | Remaining Shares Vesting In: 2014 [Member] | Remaining Shares Vesting In: 2015 [Member] | Remaining Shares Vesting In: 2016 [Member] | ||||||||||||||||||||||||||||||||||
December 31 2015 [Member] | December 31 2015 [Member] | December 31 2015 [Member] | December 31 2016 [Member] | December 31 2016 [Member] | December 31 2016 [Member] | December 31 2017 [Member] | December 31 2017 [Member] | December 31 2017 [Member] | December 31 2018 [Member] | December 31 2018 [Member] | December 31 2018 [Member] | December 31 2019 [Member] | December 31 2019 [Member] | December 31 2019 [Member] | |||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Grant date fair value per share (in dollars per share) | $13.16 | ' | $13.16 | ' | ' | ' | $13.02 | $12.34 | ' | ' | $10.18 | [1] | ' | ' | ' | ' | ' | $14.33 | [2] | ' | ' | ' | ' | $12.44 | [3] | ' | ' | ' | $12.72 | ' | ' | ' | $11.67 | ' | ' | ' | $12.45 | ' | ' | ' | ' | ' | ' | ' | |||||||||
Total original grants (in shares) | 35,000 | ' | 35,000 | ' | ' | ' | 28,000 | 35,703 | ' | ' | 140,658 | [1] | ' | ' | ' | ' | ' | 110,917 | [2] | ' | ' | ' | ' | 128,766 | [3] | ' | ' | ' | 132,490 | ' | ' | ' | 145,399 | ' | ' | ' | 242,505 | ' | ' | ' | ' | ' | ' | ' | |||||||||
Forfeited | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,464 | [1] | ' | ' | ' | ' | ' | 4,571 | [2] | ' | ' | ' | ' | 5,759 | [3] | ' | ' | ' | 5,050 | ' | ' | ' | 5,697 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||
Remaining shares vesting in period (shares) | ' | ' | ' | ' | ' | 22,164 | ' | ' | ' | ' | ' | 0 | [1] | 0 | [1] | 0 | [1] | ' | ' | ' | 0 | [2] | 0 | [2] | 0 | [2] | ' | ' | 61,499 | [3] | 0 | [3] | 0 | [3] | ' | 63,722 | 63,718 | 0 | ' | 0 | 69,853 | 69,849 | ' | ' | ' | ' | ' | ' | ' | ' | |||
Equity instruments other than options, nonvested, number of shares [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Unvested stock awards outstanding at beginning of period (in shares) | ' | ' | 528,931 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Grants (in shares) | 35,000 | ' | 35,000 | ' | ' | ' | 28,000 | 35,703 | ' | ' | 140,658 | [1] | ' | ' | ' | ' | ' | 110,917 | [2] | ' | ' | ' | ' | 128,766 | [3] | ' | ' | ' | 132,490 | ' | ' | ' | 145,399 | ' | ' | ' | 242,505 | ' | ' | ' | ' | ' | ' | ' | |||||||||
Vestings (in shares) | ' | ' | -164,587 | ' | ' | ' | ' | ' | -67,595 | -67,599 | ' | ' | ' | ' | -52,915 | -53,431 | ' | ' | ' | ' | -61,508 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Unvested stock awards outstanding at end of period (in shares) | 399,344 | ' | 399,344 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 485,010 | ' | ' | ' | ' | ' | ||||||||||||
Percentage of performance based awards granted, actual (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | 50.00% | ||||||||||||
Equity instruments other than options, nonvested, weighted average grant date fair value [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Unvested stock awards outstanding at beginning of period (in dollars per share) | ' | ' | $12.51 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Grants (in dollars per share) | $13.16 | ' | $13.16 | ' | ' | ' | $13.02 | $12.34 | ' | ' | $10.18 | [1] | ' | ' | ' | ' | ' | $14.33 | [2] | ' | ' | ' | ' | $12.44 | [3] | ' | ' | ' | $12.72 | ' | ' | ' | $11.67 | ' | ' | ' | $12.45 | ' | ' | ' | ' | ' | ' | ' | |||||||||
Vestings (in dollars per share) | ' | ' | $13.23 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Unvested stock awards outstanding at end of period (in dollars per share) | $12.28 | ' | $12.28 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Salaries and benefits | $999,000 | $1,017,000 | $3,116,000 | $2,904,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $372,000 | $1,100,000 | $252,000 | $755,000 | ' | ||||||||||||
Other general and administrative expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 77,000 | 199,000 | ' | ' | ' | ||||||||||||
Common stock dividend payable | 34,040,000 | ' | 34,040,000 | ' | 30,872,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,600,000 | 1,600,000 | ' | ' | ' | ||||||||||||
Total of Unrecognized compensation expense for unvested stock award | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,000,000 | ' | ' | 1,800,000 | 1,800,000 | ' | ' | ' | ||||||||||||
Compensation cost not yet recognized, period for recognition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year 3 months 18 days | ' | ' | ' | ||||||||||||
Performance-based awards vested (in shares) | ' | ' | 164,587 | ' | ' | ' | ' | ' | 67,595 | 67,599 | ' | ' | ' | ' | 52,915 | 53,431 | ' | ' | ' | ' | 61,508 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||
Expected compensation expense related to stock based compensation awards | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $625,000 | $5,400,000 | ' | ' | ' | ' | ' | ||||||||||||
Expected issuance of common stock for award program (in shares) | 399,344 | ' | 399,344 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 485,010 | ' | ' | ' | ' | ' | ||||||||||||
[1] | The absolute return metrics for the three-year measurement periods ending December 31, 2012 and 2011 were met resulting in the vesting of 67,595 shares associated with the second 50% of this grant in January 2013 and 67,599 shares associated with the first 50% of this grant in February 2012. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
[2] | The absolute return metrics for the three-year measurement periods ending December 31, 2013 and 2012 were met resulting in the vesting of 52,915 shares associated with the second 50% of this grant in January 2014 and 53,431 shares associated with the first 50% of this grant in January 2013. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
[3] | The absolute return metric for the first three-year measurement period ending December 31, 2013 was met resulting in the vesting of 61,508 shares associated with the first 50% of this grant in January 2014. |
COMPENSATION_PROGRAMS_Schedule1
COMPENSATION PROGRAMS - Schedule of Stock Option Award Activity (Details) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
COMPENSATION PROGRAMS [Abstract] | ' |
Option awards outstanding at beginning of period (in shares) | 77,500 |
Weighted Average Exercise Price, option awards outstanding at beginning of year (in dollars per share) | $11.75 |
Expirations (in shares) | -10,000 |
Weighted Average Exercise Price, expirations (in dollars per share) | $14.41 |
Exercises (aggregate intrinsic value: $67,000) (in shares) | -27,500 |
Weighted Average Exercise Price, Exercises (aggregate intrinsic value: $67,000) (in dollars per share) | $10.63 |
Weighted Average Exercise Price, Option awards outstanding at end of year (in dollars per share) | $11.86 |
Option awards outstanding at end of period (in shares) | 40,000 |
Option awards aggregate intrinsic value | $67,000 |
COMPENSATION_PROGRAMS_Defined_
COMPENSATION PROGRAMS - Defined Contribution Plans (Details) (USD $) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2014 | Sep. 30, 2014 | |
Defined Contribution Plan Disclosure [Abstract] | ' | ' |
Defined contribution plan voluntary contribution based on compensation (in hundredths) | ' | 50.00% |
Defined contribution plan, maximum annual contributions per employee (in hundredths) | ' | 6.00% |
Defined contribution plan, employer matching contribution (in hundredths) | ' | 3.00% |
Defined contribution plan, cost recognized | $68,000 | $187,000 |