Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 26, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | CAPSTEAD MORTGAGE CORP | ||
Entity Central Index Key | 766,701 | ||
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 Public Float | $ 1,046,834,773 | ||
Entity Common Stock, Shares Outstanding | 95,947,090 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2015 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Assets | ||
Residential mortgage investments ($13.54 and $13.48 billion pledged at December 31, 2015 and December 31, 2014, respectively) | $ 14,154,737 | $ 13,908,104 |
Cash collateral receivable from interest rate swap counterparties | 50,193 | 53,139 |
Interest rate swap agreements at fair value | 7,720 | 1,657 |
Cash and cash equivalents | 54,185 | 307,526 |
Receivables and other assets | 179,531 | 116,525 |
Total Assets | 14,446,366 | 14,386,951 |
Liabilities | ||
Secured borrowings | 12,958,394 | 12,806,843 |
Interest rate swap agreements at fair value | 26,061 | 27,034 |
Unsecured borrowings | 97,986 | 97,882 |
Common stock dividend payable | 25,979 | 34,054 |
Accounts payable and accrued expenses | 39,622 | 30,367 |
Total Liabilities | 13,148,042 | 12,996,180 |
Stockholders' equity | ||
Common stock - $0.01 par value; 250,000 shares authorized: 95,825 and 95,848 shares issued and outstanding at December 31, 2015 and December 31, 2014, respectively | 958 | 958 |
Paid-in capital | 1,310,563 | 1,325,340 |
Accumulated deficit | (346,464) | (346,885) |
Accumulated other comprehensive income | 136,095 | 227,422 |
Total stockholders' equity | 1,298,324 | 1,390,771 |
Total liabilities and equity | 14,446,366 | 14,386,951 |
Redeemable Preferred Stock [Member] | Cumulative Redeemable Preferred Stock, Series E [Member] | ||
Stockholders' equity | ||
Cumulative Preferred Stock | $ 197,172 | $ 183,936 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Assets | ||
Residential mortgage investments | $ 13,540,000 | $ 13,480,000 |
Stockholders' equity | ||
Preferred stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Preferred stock, shares authorized (in shares) | 100,000 | 100,000 |
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) | 95,825 | 95,848 |
Common stock, shares outstanding (in shares) | 95,825 | 95,848 |
Redeemable Preferred Stock [Member] | Cumulative Redeemable Preferred Stock, Series E [Member] | ||
Stockholders' equity | ||
Preferred stock, dividend rate | 7.50% | 7.50% |
Preferred stock, shares issued (in shares) | 8,156 | 7,618 |
Preferred stock, shares outstanding (in shares) | 8,156 | 7,618 |
Preferred stock, aggregate liquidation preference | $ 203,902 | $ 190,454 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Interest income | |||
Residential mortgage investments | $ 215,989 | $ 226,749 | $ 215,137 |
Other | 341 | 315 | 322 |
Interest Income | 216,330 | 227,064 | 215,459 |
Interest expense | |||
Secured borrowings | (85,521) | (65,155) | (66,368) |
Unsecured borrowings | (8,454) | (8,488) | (8,736) |
Interest expense | (93,975) | (73,643) | (75,104) |
Net interest income (expense) | 122,355 | 153,421 | 140,355 |
Other revenue (expense) | |||
Salaries and benefits | (4,392) | (4,112) | (3,962) |
Short-term incentive compensation | (4,112) | (2,115) | (3,565) |
Long term incentive compensation | (1,696) | (2,075) | (1,814) |
Other general and administrative expense | (4,798) | (4,157) | (4,476) |
Miscellaneous other revenue (expense) | 968 | (142) | (300) |
Operating expenses | (14,030) | (12,601) | (14,117) |
Income before equity in earnings of unconsolidated affiliates | 108,325 | 140,820 | 126,238 |
Equity in earnings of unconsolidated affiliates | 0 | 0 | 249 |
Net income | 108,325 | 140,820 | 126,487 |
Net income available to common stockholders | |||
Net income | 108,325 | 140,820 | 126,487 |
Less preferred stock dividends | (15,160) | (13,781) | (17,536) |
Less redemption preference premiums paid | 0 | 0 | (19,924) |
Net income (loss) available to common stockholders, basic, total | $ 93,165 | $ 127,039 | $ 89,027 |
Basic and diluted net income per common share (in dollars per share) | $ 0.97 | $ 1.33 | $ 0.93 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | |||
Net income | $ 108,325 | $ 140,820 | $ 126,487 |
Amounts related to available-for-sale securities: | |||
Change in net unrealized gains | (98,202) | 27,283 | (101,001) |
Amounts related to cash flow hedges: | |||
Change in net unrealized gains (losses) | (21,675) | (41,059) | 9,320 |
Reclassification adjustment for amounts included in net income | 28,550 | 22,055 | 16,914 |
Other comprehensive income (loss) | (91,327) | 8,279 | (74,767) |
Comprehensive income | $ 16,998 | $ 149,099 | $ 51,720 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income [Member] | Total |
Beginning Balance at Dec. 31, 2012 | $ 188,992 | $ 962 | $ 1,367,199 | $ (353,938) | $ 293,910 | $ 1,497,125 |
Net income | 0 | 0 | 0 | 126,487 | 0 | 126,487 |
Change in unrealized gain on mortgage securities, net | 0 | 0 | 0 | 0 | (101,001) | (101,001) |
Amounts related to cash flow hedges, net | 0 | 0 | 0 | 0 | 26,234 | 26,234 |
Cash dividends: | ||||||
Common | 0 | 0 | (13,830) | (104,932) | 0 | (118,762) |
Preferred | 0 | 0 | 0 | (17,536) | 0 | (17,536) |
Redemption of convertible preferred stock | (187,109) | 0 | (19,924) | 0 | 0 | (207,033) |
Conversion of preferred stock | (1,883) | 2 | 1,881 | 0 | 0 | 0 |
Issuance of Series E preferred stock | 165,756 | 0 | 0 | 0 | 0 | 165,756 |
Other additions to capital | 0 | 0 | 1,752 | 53 | 0 | 1,805 |
Common share repurchases | 0 | (6) | (7,286) | 0 | 0 | (7,292) |
Ending Balance at Dec. 31, 2013 | 165,756 | 958 | 1,329,792 | (349,866) | 219,143 | 1,365,783 |
Net income | 0 | 0 | 0 | 140,820 | 0 | 140,820 |
Change in unrealized gain on mortgage securities, net | 0 | 0 | 0 | 0 | 27,283 | 27,283 |
Amounts related to cash flow hedges, net | 0 | 0 | 0 | 0 | (19,004) | (19,004) |
Cash dividends: | ||||||
Common | 0 | 0 | (6,365) | (124,058) | 0 | (130,423) |
Preferred | 0 | 0 | 0 | (13,781) | 0 | (13,781) |
Redemption of convertible preferred stock | 0 | |||||
Issuance of Series E preferred stock | 18,180 | 0 | 0 | 0 | 0 | 18,180 |
Other additions to capital | 0 | 0 | 1,913 | 0 | 0 | 1,913 |
Ending Balance at Dec. 31, 2014 | 183,936 | 958 | 1,325,340 | (346,885) | 227,422 | 1,390,771 |
Net income | 0 | 0 | 0 | 108,325 | 0 | 108,325 |
Change in unrealized gain on mortgage securities, net | 0 | 0 | 0 | 0 | (98,202) | (98,202) |
Amounts related to cash flow hedges, net | 0 | 0 | 0 | 0 | 6,875 | 6,875 |
Cash dividends: | ||||||
Common | 0 | 0 | (16,473) | (92,744) | 0 | (109,217) |
Preferred | 0 | 0 | 0 | (15,160) | 0 | (15,160) |
Redemption of convertible preferred stock | 0 | |||||
Issuance of Series E preferred stock | 13,236 | 0 | 0 | 0 | 0 | 13,236 |
Other additions to capital | 0 | 0 | 1,696 | 0 | 0 | 1,696 |
Ending Balance at Dec. 31, 2015 | $ 197,172 | $ 958 | $ 1,310,563 | $ (346,464) | $ 136,095 | $ 1,298,324 |
CONSOLIDATED STATEMENTS OF STO7
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY [Abstract] | |||
Common per share (in dollars per share) | $ 1.14 | $ 1.36 | $ 1.24 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating activities: | |||
Net income | $ 108,325 | $ 140,820 | $ 126,487 |
Noncash items | |||
Amortization of investment premiums | 121,190 | 101,872 | 125,872 |
Amortization of equity-based awards | 2,132 | 2,390 | 2,201 |
Other depreciation and amortization | 109 | 137 | 162 |
Change in measureable hedge ineffectiveness related to interest rate swap agreements designated as cash flow hedges | (162) | 76 | (168) |
Net change in receivables, other assets, accounts payable and accrued expenses | 12,651 | 3,517 | 6,658 |
Net cash provided by operating activities | 244,245 | 248,812 | 261,212 |
Investing activities | |||
Purchases of residential mortgage investments | (3,887,051) | (3,307,963) | (3,326,345) |
Interest receivable acquired with the purchase of residential mortgage investments | (5,494) | (5,313) | (5,559) |
Principal collections on residential mortgage investments, including changes in mortgage securities principal remittance receivable | 3,419,867 | 2,785,337 | 3,516,634 |
Investment in Federal Home Loan Bank stock | (60,002) | 0 | 0 |
Net cash (used in) provided by investing activities | (532,680) | (527,939) | 184,730 |
Financing activities | |||
Proceeds from repurchase arrangements and similar borrowings | 111,006,967 | 128,594,880 | 136,909,245 |
Principal payments on repurchase arrangements and similar borrowings | (113,730,416) | (128,270,935) | (137,210,576) |
Proceeds from other secured borrowings | 5,425,000 | 0 | 0 |
Principal payments on other secured borrowings | (2,550,000) | 0 | 0 |
Decrease (increase) in cash collateral receivable from interest rate swap counterparties | 2,946 | (27,637) | 24,470 |
Cash paid to redeem convertible preferred shares | 0 | 0 | (207,033) |
Common stock repurchases | 0 | 0 | (7,292) |
Proceeds from issuance of preferred shares | 13,266 | 18,180 | 165,756 |
Other capital stock transactions | (429) | (468) | (410) |
Dividends paid | (132,240) | (140,723) | (132,191) |
Net cash provided by (used in) financing activities | 35,094 | 173,297 | (458,031) |
Net change in cash and cash equivalents | (253,341) | (105,830) | (12,089) |
Cash and cash equivalents at beginning of year | 307,526 | 413,356 | 425,445 |
Cash and cash equivalents at end of year | $ 54,185 | $ 307,526 | $ 413,356 |
BUSINESS
BUSINESS | 12 Months Ended |
Dec. 31, 2015 | |
BUSINESS [Abstract] | |
BUSINESS | NOTE 1 ¾ 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, Freddie Mac, or by an agency of the federal government, Ginnie Mae. Residential mortgage pass-through securities guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae are referred to as “Agency Securities” and are considered to have limited, if any, credit risk. |
ACCOUNTING POLICIES
ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
ACCOUNTING POLICIES [Abstract] | |
ACCOUNTING POLICIES | NOTE 2 ¾ Basis of Presentation The consolidated financial statements include the accounts of Capstead Mortgage Corporation and its wholly-owned and majority-owned subsidiaries over which it exercises control. Pursuant to variable interest entity (“VIE”) accounting principles, Capstead considers for consolidation any VIE in which it holds an interest. The Company’s captive insurance subsidiary is considered a VIE for financial reporting purposes because Capstead has the obligation to absorb its losses and the right to receive its benefits, and, as Capstead is the primary beneficiary, the accounts of the captive insurance subsidiary are consolidated. Common securities held by the Company in statutory trusts organized to issue unsecured borrowings (prior to the dissolution of these trusts in December 2013) were not considered variable interests at risk and were accounted for as investments in unconsolidated affiliates. Investments in these unconsolidated affiliates were initially recorded at cost and subsequently adjusted for the Company’s equity in the affiliates’ earnings and cash contributions and distributions. Intercompany balances and transactions are eliminated. Recent Accounting Pronouncements In June 2014 the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2014-11, Transfers and Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings and Disclosures In April 2015 the Financial Accounting Standards Board issued ASU 2015-03, Interest–Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs Receivables and other assets Unsecured borrowings Use of Estimates Fair values of financial instruments are estimated based on a market approach using available market information and appropriate valuation methodologies (Level Two Inputs); however, judgment is required in interpreting market data to develop these estimates. Fair values fluctuate on a daily basis and are influenced by changes in, and market expectations for changes in, interest rates, market liquidity conditions and levels of mortgage prepayments, as well as other factors. Accordingly, estimates of fair value are as of the balance sheet dates and are not necessarily indicative of the amounts that could be realized in a current market exchange. The use of different market assumptions and estimation methodologies may have a material effect on estimated fair values. Judgment is also exercised in making impairment conclusions and estimating impairment charges. Amortization of investment premiums on financial assets is based in part on estimates of future levels of mortgage prepayments, which are impacted by future changes in interest rates and other factors. Judgment is required in developing these estimates. While the actual level of mortgage prepayments for a given accounting period is the single largest determinant in amortizing investment premiums, if expectations for future levels of mortgage prepayments increase substantially, earnings could be adversely affected. Cash and Cash Equivalents Cash and cash equivalents Financial Assets Capstead’s financial assets consist almost exclusively of Agency Securities classified as available-for-sale and carried at fair value with unrealized gains and losses reported as a separate component of Accumulated other comprehensive income Other revenue (expense) Other revenue (expense) Other revenue (expense) Other comprehensive income Borrowings In August 2015 Capstead began receiving advances from the Federal Home Loan Bank (“FHLB”) of Cincinnati through a wholly-owned captive insurance subsidiary. These advances are secured by Agency Securities, and together with repurchase arrangements and similar borrowings, are classified as Secured borrowings Secured borrowings in the form of repurchase arrangements create exposure to the potential for failure on the part of counterparties to honor their commitment to return pledged collateral. In the event of a default by a repurchase arrangement counterparty, the Company may have difficulty recovering its collateral. To mitigate this risk, the Company monitors the creditworthiness of its counterparties and manages its exposure to any single counterparty. Capstead’s borrowings are carried at their principal balances outstanding net of related debt issuance costs and debt discounts, if applicable. Debt issuance costs associated with Unsecured borrowings Derivative Financial Instruments (“Derivatives”) Derivatives used by Capstead for risk management purposes are carried at fair value as assets or liabilities. The accounting for changes in fair value of each Derivative held depends on whether it has been designated as a hedge for accounting purposes, as well as the type of hedging relationship identified. Capstead will typically designate any Derivatives held as cash flow hedges related to a designated portion of its current and anticipated future borrowings. To qualify as a cash flow hedge, at the inception of the hedge relationship the Company must document that the hedge relationship is anticipated to be highly effective and monitor ongoing effectiveness on at least a quarterly basis. As long as the hedge relationship remains effective, the effective portion of changes in fair value of the Derivative is recorded in Accumulated other comprehensive income Interest expense Accumulated other comprehensive income Miscellaneous other revenue (expense) The Company uses interest rate swap agreements in cash flow hedge relationships in order to hedge variability in borrowing rates due to changes in the underlying benchmark interest rate related to a designated portion of its current and anticipated future borrowings. Variable-rate swap payments to be received and any measured hedge ineffectiveness are recorded in Interest expense Interest expense Derivatives create exposure to credit risk related to the potential for failure on the part of counterparties to honor their commitments. In addition, the Company is required to post collateral based on any declines in the market value of the Derivatives. In the event of default by a counterparty, the Company may have difficulty recovering its collateral and may not receive payments provided for under the terms of the Derivative. To mitigate this risk, the Company uses only well-established commercial banks as counterparties and, pursuant to recent regulatory changes, most Derivatives held at December 31, 2015 were entered into through Derivative exchanges established in part to mitigate credit risk. Cash collateral receivable from interest rate swap counterparties Residential mortgage investments Cash collateral payable to interest rate swap counterparties Long-term Incentive Compensation Capstead provides its employees and its directors with long-term incentive compensation in the form of equity-based awards. Equity-based compensation costs are initially measured at the estimated fair value of the awards on the grant date developed using appropriate valuation methodologies, as adjusted for estimates of future award forfeitures. Valuation methodologies used and subsequent expense recognition is dependent upon each award’s service and performance conditions, the latter also referred to as performance metrics. Compensation costs for stock awards subject only to service conditions are measured at the closing stock price on the dates of grant and are recognized as expense on a straight-line basis over the requisite service periods for the awards, as adjusted for changes in estimated, and ultimately actual, forfeitures. Compensation costs for components of stock awards and restricted stock units (“RSUs”) subject to nonmarket-based performance metrics (i.e. metrics not predicated on changes in the Company’s stock price), are measured at the closing stock price on the dates of grant, adjusted for the probability of achieving benchmarks included in the performance metrics. These initial cost estimates are recognized as expense over the requisite performance periods, as adjusted for changes in estimated, and ultimately actual, forfeitures and performance. Compensation costs for components of RSUs subject to market-based performance metrics are measured at the dates of grant using Monte Carlo simulations which incorporate into the valuations the inherent uncertainty regarding achieving the market-based performance metrics. These initial valuation amounts are recognized as expense over the requisite performance periods, subject only to adjustments for forfeitures. Income Taxes Capstead Mortgage Corporation and its qualified REIT subsidiaries (“Capstead REIT”) have elected to be taxed as a REIT. As a result, Capstead REIT is not taxed on taxable income distributed to stockholders if certain REIT qualification tests are met. Capstead’s policy is to distribute 100% of the taxable income of the REIT, after application of available tax attributes, within the time limits prescribed by the Internal Revenue Code (the “Code”), which may extend into the subsequent taxable year. The Company may find it advantageous from time to time to elect taxable REIT subsidiary status for certain of its subsidiaries in which case taxable income of any such subsidiary would be subject to federal and, where applicable, state or local income taxes. Any such income taxes are accounted for using the liability method. Related deferred income tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company has not recognized any liabilities for unrecognized tax benefits using a “more likely than not” threshold for the recognition and measurement of the financial statement effects of tax positions taken on a tax return filing. Should any such liabilities be recognized in future periods, the Company will record related interest and penalties in Other eneral and administrative expense Dividend Classification Capstead records common and preferred stock dividends in the Accumulated deficit Stockholders’ equity Paid-in capital Net income |
NET INCOME PER COMMON SHARE
NET INCOME PER COMMON SHARE | 12 Months Ended |
Dec. 31, 2015 | |
NET INCOME PER COMMON SHARE [Abstract] | |
NET INCOME PER COMMON SHARE | NOTE 3 ¾ Basic net income per common share is computed by dividing net income, after (a) deducting dividends paid or accrued on preferred stock, (b) deducting any preferred stock redemption premiums paid and (c) allocating earnings to equity awards deemed to be participating securities pursuant to the two-class method, by the average number of shares of common stock outstanding, calculated excluding unvested stock awards. Participating securities include unvested equity awards that contain non-forfeitable rights to dividends prior to vesting. Diluted net income per common share is computed by dividing the numerator used to compute basic net income per common share (after adding back dividends on shares of convertible preferred stock prior to their redemption in June 2013 and when such shares were dilutive) by the denominator used to compute basic net income per common share, further adjusted for the dilutive effect, if any, of equity awards and shares of preferred stock when and if convertible into shares of common stock. Shares of the Company’s 7.50% Series E Cumulative Redeemable Preferred Stock are contingently convertible into shares of common stock only upon the occurrence of a change in control and therefore are not considered dilutive securities absent such an occurrence. Any unvested equity 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 were as follows for the indicated periods (dollars in thousands, except per share amounts) Year ended December 31 2015 2014 2013 Basic net income per common share Numerator for basic net income per common share: Net income $ 108,325 $ 140,820 $ 126,487 Preferred stock dividends (15,160 ) (13,781 ) (17,536 ) Redemption preference premiums paid on convertible preferred stock – – (19,924 ) Earnings participation of unvested equity awards (123 ) (95 ) (139 ) $ 93,042 $ 126,944 $ 88,888 Denominator for basic net income per common share: Average number of shares of common stock outstanding 95,817 95,789 95,679 Average unvested stock awards outstanding (308 ) (398 ) (506 ) 95,509 95,391 95,173 $ 0.97 $ 1.33 $ 0.93 Diluted net income per common share Numerator for diluted net income per common share: Numerator for basic net income per common share $ 93,042 $ 126,944 $ 88,888 Dividends on dilutive convertible preferred stock – – 44 $ 93,042 $ 126,944 $ 88,932 Denominator for diluted net income per common share: Denominator for basic net income per common share 95,509 95,391 95,173 Net effect of dilutive equity awards 192 238 145 Net effect of dilutive convertible preferred stock – – 75 95,701 95,629 95,393 $ 0.97 $ 1.33 $ 0.93 Securities that could be potentially dilutive in the future that were not included in the computation of diluted net income per common share include 15,000, 15,000 and 273,000 anti-dilutive equity awards excludable under the treasury stock method for 2015, 2014 and 2013, respectively. |
RESIDENTIAL MORTGAGE INVESTMENT
RESIDENTIAL MORTGAGE INVESTMENTS | 12 Months Ended |
Dec. 31, 2015 | |
RESIDENTIAL MORTGAGE INVESTMENTS [Abstract] | |
RESIDENTIAL MORTGAGE INVESTMENTS | NOTE 4 ¾ Residential mortgage investments Unpaid Principal Balance Investment Premiums Amortized Cost Basis Carrying Amount (a) Net WAC (b) Average Yield (b ) December 31, 2015 Agency Securities: Fannie Mae/Freddie Mac: Fixed-rate $ 796 $ 2 $ 798 $ 799 6.61 % 6.11 % ARMs 10,014,401 317,545 10,331,946 10,487,785 2.55 1.63 Ginnie Mae ARMs 3,542,541 119,225 3,661,766 3,660,455 2.61 1.30 13,557,738 436,772 13,994,510 14,149,039 2.57 1.55 Residential mortgage loans: Fixed-rate 1,155 1 1,156 1,156 6.76 5.12 ARMs 2,650 11 2,661 2,661 3.73 3.20 3,805 12 3,817 3,817 4.65 3.83 Collateral for structured financings 1,850 31 1,881 1,881 8.12 7.81 $ 13,563,393 $ 436,815 $ 14,000,208 $ 14,154,737 2.57 1.55 December 31, 2014 Agency Securities: Fannie Mae/Freddie Mac: Fixed-rate $ 1,660 $ 4 $ 1,664 $ 1,665 6.63 6.45 ARMs 10,230,419 328,781 10,559,200 10,800,332 2.51 1.72 Ginnie Mae ARMs 2,983,659 103,911 3,087,570 3,099,168 2.63 1.53 13,215,738 432,696 13,648,434 13,901,165 2.54 1.69 Residential mortgage loans: Fixed-rate 1,848 2 1,850 1,850 6.96 5.46 ARMs 3,046 13 3,059 3,059 3.73 3.14 4,894 15 4,909 4,909 4.95 3.97 Collateral for structured financings 1,997 33 2,030 2,030 8.11 7.62 $ 13,222,629 $ 432,744 $ 13,655,373 $ 13,908,104 2.54 1.69 (a) Includes unrealized gains and losses for residential mortgage investments classified as available-for-sale. (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 year 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. Agency Securities are considered to have limited, if any, credit risk because the timely payment of principal and interest is guaranteed by Fannie Mae and Freddie Mac, which are federally chartered corporations, or Ginnie Mae, which is an agency of the federal government. 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 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 investments based on 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 investments have months to roll of less than 18 months while longer-to-reset ARM investments have months to roll of 18 months or greater. As of December 31, 2015, the average months to roll for the Company’s $7.96 billion (amortized cost basis) in current-reset ARM investments was 6.6 months while the average months to roll for the Company’s $6.04 billion (amortized cost basis) in longer-to-reset ARM investments was 42.2 months. |
INVESTMENTS IN UNCONSOLIDATED A
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | 12 Months Ended |
Dec. 31, 2015 | |
INVESTMENTS IN UNCONSOLIDATED AFFILIATES [Abstract] | |
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | NOTE 5 ¾ To facilitate the issuance of Unsecured borrowings |
SECURED BORROWINGS
SECURED BORROWINGS | 12 Months Ended |
Dec. 31, 2015 | |
SECURED BORROWINGS [Abstract] | |
SECURED BORROWINGS | NOTE 6 ¾ Capstead pledges its Residential mortgage investments as collateral for secured borrowings primarily in the form of repurchase arrangements with commercial banks and other financial institutions. In August 2015 the Company began supplementing its borrowings under repurchase arrangements with advances from the FHLB of Cincinnati (collectively referred to as “counterparties” or “lending counterparties”). Repurchase arrangements entered into by the Company involve the sale and a simultaneous agreement to repurchase the transferred assets at a future date and are accounted for as financings transferring ownership of the pledged collateral to the bank and simultaneously agreeing to repurchase the transferred assets at a future date. On January 12, 2016 the FHLB system regulator finalized rules originally proposed in 2014 that generally preclude captive insurers from remaining members beyond February 19, 2017 with transition rules that require outstanding advances to be repaid upon maturity or by that date. In response to this action, the Company has reduced outstanding FHLB advances to $750 million as of February 26, 2016 and anticipates migrating remaining balances away from the FHLB by November 2016. The Company’s ownership interest in FHLB stock held in connection with advance activity and totaling $60.0 million at December 31, 2015, is expected to be redeemed by December 31, 2016. The terms and conditions of secured borrowings are negotiated on a transaction-by-transaction basis when each such borrowing is initiated or renewed. pledged, as determined by the lending counterparty, less an agreed-upon discount, referred to as a “haircut.” Interest rates are generally fixed None of the Company’s lending counterparties are obligated to renew or otherwise enter into new borrowings at the conclusion of existing borrowings. Secured borrowings Collateral Type Collateral Carrying Amount Accrued Interest Receivable Borrowings Outstanding Average Borrowing Rates December 31, 2015 Borrowings under repurchase arrangements with maturities of 30 days or less: Agency Securities $ 9,080,363 $ 18,504 $ 8,585,336 0.67 % Borrowings under repurchase arrangements with maturities greater than 30 days: Agency Securities (31 to 90 days) 423,710 861 346,177 0.63 Agency Securities (greater than 90 days) 1,073,254 2,519 1,150,000 0.75 Similar borrowings: Collateral for structured financings 1,881 – 1,881 8.12 10,579,208 21,884 10,083,394 FHLB advances 2,956,908 11,422 2,875,000 0.43 $ 13,536,116 $ 33,306 $ 12,958,394 0.62 Year-end borrowing rates adjusted for effects of related Derivatives held as cash flow hedges 0.85 December 31, 2014 Borrowings under repurchase arrangements with maturities of 30 days or less: Agency Securities $ 10,401,080 $ 24,045 $ 9,878,889 0.35 % Borrowings under repurchase arrangements with maturities greater than 30 days: Agency Securities (31 to 90 days) 1,205,570 2,248 1,150,924 0.35 Agency Securities (greater than 90 days) 1,874,892 4,640 1,775,000 0.56 Similar borrowings: Collateral for structured financings 2,030 – 2,030 8.11 $ 13,483,572 $ 30,933 $ 12,806,843 0.38 Year-end borrowing rates adjusted for effects of related Derivatives held as cash flow hedges 0.58 Average secured borrowings outstanding differed from respective year-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): Year ended December 31 2015 2014 Average Borrowings Average Rate Average Borrowings Average Rate Average borrowings and rates adjusted for the effects of related Derivatives held as cash flow hedges for the indicated years $ 13,047,509 0.66 % $ 12,651,061 0.52 % Interest paid on Secured borrowings |
USE OF DERIVATIVES, OFFSETTING
USE OF DERIVATIVES, OFFSETTING DISCLOSURES AND CHANGES IN OTHER COMPREHENSIVE INCOME BY COMPONENT | 12 Months Ended |
Dec. 31, 2015 | |
USE OF DERIVATIVES, OFFSETTING DISCLOSURES AND CHANGES IN OTHER COMPREHENSIVE INCOME BY COMPONENT [Abstract] | |
USE OF DERIVATIVES, OFFSETTING DISCLOSURES AND CHANGES IN OTHER COMPREHENSIVE INCOME BY COMPONENT | NOTE 7 ¾ In addition to entering into longer-maturity secured borrowings when available at attractive rates and terms, Capstead attempts to mitigate exposure to higher interest rates by entering into 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 secured borrowings. 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 designated 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 2015 Capstead entered into swap agreements with notional amounts of $3.60 billion. These swap agreements require fixed-rate interest payments averaging 0.77% for two-year periods commencing on various dates between January 2015 and January 2016. Also during 2015, $2.90 billion notional amount of swaps requiring fixed-rate interest payments averaging 0.47% matured. At December 31, 2015, the Company’s financing-related swap positions had the following characteristics (dollars in thousands): Period of Contract Expiration Notional Amount Average Fixed-Rate Payment Requirement Currently-paying contracts: First quarter 2016 (expired January 4, 2016) $ 1,700,000 0.51 % Second quarter 2016 1,100,000 0.47 Third quarter 2016 700,000 0.56 Fourth quarter 2016 800,000 0.66 First quarter 2017 1,000,000 0.72 Second quarter 2017 900,000 0.74 Third quarter 2017 400,000 0.74 Fourth quarter 2017 1,500,000 0.79 8,100,000 Forward-starting contracts: First quarter 2018 300,000 0.92 $ 8,400,000 In 2010 the Company entered into 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 Interest rate swap agreements are measured at fair value on a recurring basis primarily using Level Two Inputs in accordance with ASU 2010-06, Fair Value Measurements and Disclosures (Topic 820) Balance Sheet December 31 Location 2015 2014 Balance sheet-related Swap agreements in a gain position (an asset) related to Secured borrowings (a) $ 7,720 $ 1,657 Swap agreements in a loss position (a liability) related to: Secured borrowings (a) (1,051 ) (6,332 ) Unsecured borrowings (a) (25,010 ) (20,702 ) Related net interest payable (b) (10,942 ) (9,516 ) $ (29,283 ) $ (34,893 ) (a) The fair value of Derivatives with unrealized gains are aggregated and recorded as an asset on the face of the Balance Sheets separately from the fair value of Derivatives with 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 $5.6 million at December 31, 2015. (b) Included in “Accounts payable and accrued expenses” on the face of the Balance Sheets. Location of Gain or (Loss) Recognized in Year ended December 31 Net Income 2015 2014 2013 Income statement-related Components of effect on interest expense: Amount of loss reclassified from Accumulated other comprehensive income $ (28,550 ) $ (22,055 ) $ (16,914 ) Amount of gain (loss) recognized (ineffective portion) (924 ) (473 ) 24 Increase in interest expense and decrease in Net income * $ (29,474 ) $ (22,528 ) $ (16,890 ) Other comprehensive income-related Amount of gain (loss) recognized in Other comprehensive income (loss) $ (21,675 ) $ (41,059 ) $ 9,320 * Included in “Interest expense: Secured 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. The Company finances its Residential mortgage investments Secured borrowings Offsetting of Derivative Assets Gross Amounts of Recognized Assets Gross Amounts Offset in the Balance Sheet Net Amounts of Assets Presented in the Balance Sheet Gross Amounts Not Offset in the Balance Sheet (a) Net Amount Financial Instruments Cash Collateral Received December 31, 2015 Counterparty 2 $ – $ 23 $ 23 $ (23 ) $ – $ – Counterparty 4 4,758 2,939 7,697 (7,697 ) – – $ 4,758 $ 2,962 $ 7,720 $ (7,720 ) $ – $ – December 31, 2014 Counterparty 2 $ – $ 95 $ 95 $ (95 ) $ – $ – Counterparty 4 1,128 434 1,562 (1,562 ) – – $ 1,128 $ 529 $ 1,657 $ (1,657 ) $ – $ – Offsetting of Financial Liabilities and Derivative Liabilities Gross Amounts of Recognized Liabilities (b) Gross Amounts Offset in the Balance Sheet Net Amounts of Liabilities Presented in the Balance Sheet (a) Gross Amounts Not Offset in the Balance Sheet (c) Net Amount Financial Instruments Cash Collateral Pledged December 31, 2015 Derivatives by counterparty: Counterparty 1 $ 26,311 $ – $ 26,311 $ – $ (26,311 ) $ – Counterparty 2 776 23 799 (23 ) (776 ) – Counterparty 4 6,954 2,939 9,893 (7,697 ) (2,196 ) – 34,041 2,962 37,003 (7,720 ) (29,283 ) – Borrowings under repurchase arrangements 10,090,846 – 10,090,846 (10,090,846 ) – – $ 10,124,887 $ 2,962 $ 10,127,849 $ (10,098,566 ) $ (29,283 ) $ – December 31, 2014 Derivatives by counterparty: Counterparty 1 $ 24,533 $ – $ 24,533 $ – $ (24,533 ) $ – Counterparty 2 4,042 95 4,137 (95 ) (4,042 ) – Counterparty 3 736 – 736 – (736 ) – Counterparty 4 6,710 434 7,144 (1,562 ) (5,582 ) – 36,021 529 36,550 (1,657 ) (34,893 ) – Borrowings under repurchase arrangements 12,812,947 – 12,812,947 (12,812,947 ) – – $ 12,848,968 $ 529 $ 12,849,497 $ (12,814,604 ) $ (34,893 ) $ – (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 $10.9 million and $9.5 million on interest rate swap agreements and $9.3 million and $6.1 million on borrowings under repurchase arrangements, included in “Accounts payable and accrued expenses” on the face of the Balance Sheets as of December 31, 2015 and December 31, 2014, 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 Gains and Losses on Cash Flow Hedges Unrealized Gains and Losses on Available-for-Sale Securities Total Balance at December 31, 2012 $ (32,539 ) $ 326,449 $ 293,910 Activity for the year ended December 31, 2013: Other comprehensive income (loss) before reclassifications 9,320 (101,001 ) (91,681 ) Amounts reclassified from accumulated other comprehensive income 16,914 – 16,914 Other comprehensive 26,234 (101,001 ) (74,767 ) Balance at December 31, 2013 (6,305 ) 225,448 219,143 Activity for the year ended December 31, 2014: Other comprehensive income (loss) before reclassifications (41,059 ) 27,283 (13,776 ) Amounts reclassified from accumulated other comprehensive income 22,055 – 22,055 Other comprehensive income (loss) (19,004 ) 27,283 8,279 Balance at December 31, 2014 (25,309 ) 252,731 227,422 Activity for the year ended December 31, 2015: Other comprehensive income (loss) before reclassifications (21,675 ) (98,202 ) (119,877 ) Amounts reclassified from accumulated other comprehensive income 28,550 – 28,550 Other comprehensive income (loss) 6,875 (98,202 ) (91,327 ) Balance at December 31, 2015 $ (18,434 ) $ 154,529 $ 136,095 |
UNSECURED BORROWINGS
UNSECURED BORROWINGS | 12 Months Ended |
Dec. 31, 2015 | |
UNSECURED BORROWINGS [Abstract] | |
UNSECURED BORROWINGS | NOTE 8 ¾ Unsecured borrowings consist of 30-year junior subordinated notes issued in 2005 and 2006 and maturing in 2035 and 2036, for a total face amount of $100 million. In 2015 the Company retrospectively adopted ASU 2015-03, which requires debt issuance costs to be recorded as direct deductions from the carrying amounts of the related liabilities, consistent with debt discounts. Note balances net of deferred issuance costs, and related weighted average interest rates as of the indicated dates (calculated including issuance cost amortization and ) were as follows (dollars in thousands): December 31, 2015 December 31, 2014 Borrowings Outstanding Average Rate Borrowings Outstanding Average Rate Junior subordinated notes maturing in: October 2035 ($35,000 face amount) $ 34,234 7.91 % $ 34,196 8.51 % December 2035 ($40,000 face amount) 39,244 7.68 39,202 8.64 September 2036 ($25,000 face amount) 24,508 8.96 24,484 8.97 $ 97,986 8.08 $ 97,882 8.68 * The average borrowing rate for total unsecured borrowings, adjusted for the effects of related Derivatives held for hedging purposes, will decline to 7.77% effective September 15, 2016, coinciding with the 20-year floating rate period of the September 2036 notes. The notes maturing in October 2035 and December 2035 are currently redeemable, in whole or in part, without penalty, at the Company’s option. The notes maturing in September 2036 are redeemable, in whole or in part, without penalty, at the Company’s option anytime on or after September 15, 2016. Related interest paid was $8.4 million, $8.4 million, and $8.6 million during 2015, 2014, and 2013, respectively. |
DISCLOSURES REGARDING FAIR VALU
DISCLOSURES REGARDING FAIR VALUES OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2015 | |
DISCLOSURES REGARDING FAIR VALUES OF FINANCIAL INSTRUMENTS [Abstract] | |
DISCLOSURES REGARDING FAIR VALUES OF FINANCIAL INSTRUMENTS | NOTE 9 ¾ 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. With the exception of the fair value of lending counterparty investments, all fair values were determined using Level 2 Inputs in accordance with ASU 2010-06, Fair Value Measurements and Disclosures (Topic 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 the Company considers recent trading activity for similar investments and pricing levels indicated by lenders in connection with designating collateral for secured borrowings, provided such pricing levels are considered indicative of actual market clearing transactions. In determining fair value estimates for Secured borrowings with initial terms of greater than 120 days, 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 these borrowings. Unsecured borrowings Excluded from these disclosures are financial instruments for which 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 secured borrowings 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): December 31, 2015 December 31, 2014 Carrying Amount Fair Value Carrying Amount Fair Value Financial assets: Residential mortgage loans $ 3,817 $ 3,900 $ 4,909 $ 5,000 Lending counterparty investments 65,002 65,002 5,000 5,000 Portfolio-related interest rate swap agreements 7,720 7,720 1,657 1,657 Financial liabilities: Secured borrowings with initial terms of greater than 120 days 3,246,177 3,245,000 2,128,517 2,128,400 Unsecured borrowings 97,986 77,200 97,882 100,500 Interest rate swap agreements: Portfolio-related 1,051 1,051 6,332 6,332 Unsecured borrowings-related 25,010 25,010 20,702 20,702 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 December 31, 2015 Agency Securities classified as available-for-sale: Fannie Mae/Freddie Mac $ 10,331,965 $ 166,794 $ 10,954 $ 10,487,805 Ginnie Mae 3,661,766 11,705 13,016 3,660,455 Residential mortgage securities classified as 2,660 44 – 2,704 December 31, 2014 Agency Securities classified as available-for-sale: Fannie Mae/Freddie Mac 10,559,231 243,351 2,218 10,800,364 Ginnie Mae 3,087,570 16,755 5,157 3,099,168 Residential mortgage securities classified as held-to-maturity 3,663 124 – 3,787 December 31, 2015 December 31, 2014 Fair Value Unrealized Loss Fair Value Unrealized Loss Securities in an unrealized loss position: One year or greater $ 597,652 $ 4,259 $ 706,839 $ 5,320 Less than one year 4,468,844 19,711 1,095,724 2,055 $ 5,066,496 $ 23,970 $ 1,802,563 $ 7,375 Capstead’s investment strategy involves managing a leveraged portfolio of relatively 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 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 were considered other-than-temporarily impaired at December 31, 2015. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2015 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | NOTE 10 ¾ Capstead REIT and a subsidiary for which the Company has elected taxable REIT subsidiary status file separate tax returns in U.S. federal and state jurisdictions, where applicable. Provided Capstead REIT remains qualified as a REIT and all its taxable income is distributed to stockholders within allowable time limits, no income taxes are due on this income. Accordingly, no provision has been made for income taxes for Capstead REIT. Taxable income, if any, of the Company’s taxable REIT subsidiary, which is largely dormant, is fully taxable and provision is made for any resulting income taxes. The Company is no longer subject to examination and the related assessment of tax by federal, state, or local tax authorities for years before 2012, with the possible exception of certain information reporting and disclosure penalties with respect to earlier years. Management believes any such amounts would not have a material adverse effect on the Company’s financial condition. The Company’s effective tax rate differs substantially from statutory federal income tax rates primarily due to the benefit of Capstead REIT’s status as a REIT, along with other items affecting the Company’s effective tax rate as illustrated below for the indicated periods (in thousands): Year ended December 31 2015 2014 2013 Income taxes computed at the federal statutory rate $ 37,914 $ 49,287 $ 44,270 Benefit of REIT status (37,913 ) (49,283 ) (44,270 ) Income taxes computed on income of Capstead’s sole taxable REIT subsidiary 1 4 – Change in net deferred income tax assets (1 ) (4 ) 1 Other – – (1 ) Income tax provision $ – $ – $ – No income taxes were paid during 2015, 2014 or 2013. At December 31, 2015 Capstead REIT had $20.8 million in net capital loss carryforwards that expire after 2019. Significant components of the Company’s taxable REIT subsidiary’s deferred income tax assets and liabilities were as follows as of the indicated dates (in thousands): December 31 2015 2014 Deferred income tax assets: Alternative minimum tax credit (a) $ 1,941 $ 1,941 Net operating loss carryforwards (b) 57 58 Other 20 20 2,018 2,019 Deferred income tax liabilities – – Net deferred tax assets $ 2,018 $ 2,019 Valuation allowance (c) $ 2,018 $ 2,019 (a) Alternative minimum tax credit carryforwards can be utilized to offset payment of federal income taxes on future taxable income, if any, earned by this subsidiary, subject to certain limitations. (b) Excludes $3.5 million in remaining net operating loss carryforwards which expire beginning after 2019. Should these carryforwards be utilized, they will be excluded for purposes of calculating the Company’s provision for income taxes. Any such utilization will, however, reduce actual taxes payable. (c) Because this subsidiary is not expected to earn significant amounts of taxable income, related net deferred tax assets are fully reserved at December 31, 2015. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2015 | |
STOCKHOLDERS' EQUITY [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 11 ¾ On January 27, 2016 Capstead’s board of directors authorized the repurchase of up to $100 million in common stock when such repurchases are deemed appropriate relative to portfolio reinvestment options and liquidity needs. Any repurchases made pursuant to the program will be made in the open market from time to time in accordance with and as permitted by securities laws and other legal requirements. The timing, manner, price and amount of any repurchases will be determined by the Company in its discretion and will be subject to economic and market conditions, stock price, applicable legal requirements and other factors. In addition, the Company may enter into Rule 10b5-1 plans under which repurchases can be made. The authorization does not obligate the Company to acquire any particular amount of common stock and repurchases under the program and the program itself may be suspended or discontinued at the Company’s discretion without prior notice. No shares were repurchased pursuant to this program as of February 26, 2016. During 2015, 2014 and 2013, additions to common equity capital related to equity-based awards to directors and employees totaled $1.7 million, $1.9 million and $1.8 million, respectively, consisting primarily of amounts related to stock awards and also including net proceeds from the exercise of option awards. See NOTE 12 for further information pertaining to long-term equity-based awards. 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 of $25.00 per share. Shares of the Series E preferred stock 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 then-outstanding convertible preferred stock. The shares of the convertible preferred stock 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 balance sheet. This redemption preference premium is reflected as a $0.21 per common share reduction in net income available to common stockholders for the year ended December 31, 2013. In late 2013 Capstead began issuing additional shares of 7.50% Series E Cumulative Redeemable Preferred Stock through an at-the-market continuous offering program. Shares of Series E preferred stock issued under this program, issue prices and proceeds, both presented net of underwriting fees and other costs were as follows for the indicated periods: Year Ended December 31, Shares Net Issue Price Net Proceeds 2015 538,000 $ 24.61 $ 13,236,000 2014 757,000 24.01 18,180,000 2013 61,000 23.78 1,447,000 Capstead’s charter provides that if its board of directors determines in good faith that the direct or indirect ownership of shares of the Company’s common stock has become concentrated to an extent which would cause Capstead REIT to fail to qualify as a REIT, the Company may redeem or repurchase, at fair market value, any number of shares of common or preferred stock sufficient to maintain or bring such ownership into conformity with the Code. In addition, the Company may refuse to transfer or issue shares of common or preferred stock to any person whose ownership of such shares would result in Capstead REIT being unable to comply with the requirements of the Code. Finally, the charter provides that the Company may redeem or refuse to transfer any of its shares to prevent the imposition of a penalty tax as a result of ownership of such shares by certain disqualified organizations, including governmental bodies and tax-exempt entities that are not subject to tax on unrelated business taxable income. |
COMPENSATION PROGRAMS
COMPENSATION PROGRAMS | 12 Months Ended |
Dec. 31, 2015 | |
COMPENSATION PROGRAMS [Abstract] | |
COMPENSATION PROGRAMS | NOTE 12 ¾ The compensation committee of Capstead’s board of directors (the “Committee”) is responsible for establishing, implementing, and monitoring the Company’s compensation program and practices. In 2013 the Committee implemented largely nondiscretionary and formulaic, target-based incentive compensation programs for key executives. These programs utilize multiple pre-established performance goals (referred to as “metrics”) and defined threshold, target and maximum award amounts determined by reference to established percentages of base salaries. Prior to granting awards, the Committee reviews the Company’s programs, implementing any desired changes in performance metrics and the composition of mortgage REIT industry peer groups used for relative performance metric measurement purposes, as well as establishing each executive’s targeted award opportunity. Equity-based awards and other long-term incentive awards are made pursuant to the Company’s Amended and Restated 2014 Flexible Incentive Plan, approved by stockholders in May 2014. At December 31, 2015, this plan had 4,397,739 shares of common stock remaining available for future issuances. Short-Term Incentive Compensation Programs Under the provisions of Capstead’s annual incentive compensation program, each participating executive has an overall target award opportunity equal to 125% of base salary. Awards are earned based on (a) relative and absolute economic return (change in book value per share of common stock plus common stock dividends divided by beginning book value per share), (b) relative operating cost efficiency (operating expenses divided by Unsecured borrowings and Stockholders’ equity ), and (c) attainment of stated individual goals and objectives. Each performance metric is assigned a weighting and performance relative to each metric is calculated separately. No awards can be earned for performance below defined threshold return levels and awards are capped for performance above defined maximum return levels. Accounts payable and accrued expenses participating Short-term incentive compensation The Committee administers 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 shares of common stock (“Dividend Equivalent Rights” or “DERs”). DERs 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. In April 2015 the Committee issued 90,000 DERs to a new executive and 90,000 DERs were forfeited by a departing executive. Included in Accounts payable and accrued expenses are fourth quarter 2015 DERs distribution amounts totaling $170,000 that were paid in January 2016. Recognized in Short-term incentive compensation are $746,000, $889,000 and $811,000 related to 654,000 outstanding DERs during 2015, 2014 and 2013, respectively. In February 2016 the Committee modified the relative weightings of the various metrics in the annual incentive compensation program for 2016 primarily to place more emphasis on absolute economic return at adjusted threshold, target and maximum return levels, while decreasing other relative weightings. Additionally, maximum payout percentages related to achieving or exceeding individual goals and objectives were increased and the term of outstanding DERs was extended to December 31, 2016. Long-term Equity-based Awards – Performance-based RSUs Capstead’s performance-based long-term incentive compensation program for key executives provides for the grant of performance-based RSUs that are convertible into shares of common stock following three-year performance periods, 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 on the basis of relative economic return and relative total stockholder return (change in stock price plus reinvested dividends). The absolute economic return metric measures performance against defined 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 shares of common stock the units can convert into for each of the metrics, if any, can range from one-half of a share per unit if that metric’s threshold level of performance is met, to two shares per unit if the related maximum level of performance is met or exceeded, adjusted for the weighting assigned to the metric. If a metric’s threshold performance level 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 shares of common stock based on the number of shares ultimately issued, if any. Pursuant to this program, in February 2016, January 2015 and December 2013 the Committee granted 269,354, 247,512 and 242,505 RSUs with three-year performance periods ending December 31, 2018, 2017 and 2016, respectively. Related initial grant date fair values of $8.03, $8.83 and $12.45 were assigned to each unit, respectively. With the 2015 departure of a participating executive, 37,199 and 36,467 RSUs issued in 2015 and 2013, respectively, were forfeited. Long-term incentive compensation Included in Common Stock dividends payable at December 31, 2015 and 2014 are estimated dividends payable pertaining to these awards of $289,000 and $213,000, respectively. Long-term Equity-based Awards – Stock Awards Under a performance-based stock award program last utilized in 2012, the Committee granted common stock awards to all employees with staggered three-year vesting periods. These awards vest if annualized returns in excess of established return levels are generated during three-year measurement periods. Vesting can be deferred and a new three-year measurement period 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 each award’s final three-year measurement period. Grants under this program for 125,221, 114,423 and 121,026 shares vested during 2015, 2014 and 2013, respectively. Average grant date fair values for these grants were $12.58, $13.31 and $12.01, respectively. Grants for another 118,784 shares with an average grant date fair value of $12.17 vested in January 2016 pertaining to initial measurement periods ending December 31, 2015. Remaining grants for 62,137 shares with average grant date fair values of $11.67 are scheduled to vest in February 2017, assuming performance criteria and service conditions are met. In February 2016 the Committee granted service-based stock awards for 67,337 shares of common stock with a grant date fair value of $9.32 per share to key executives. These awards vest in February 2019 assuming service conditions are met. In January 2016 and December of 2014 and 2013, respectively, the Committee granted service-based stock awards for 61,272, 37,237 and 35,703 shares of common stock with grant date fair values of $7.87, $12.47 and $12.34 per share to employees not awarded RSUs. These awards vest in January of 2019, 2018 and 2017, respectively, assuming service conditions are met. As a component of the Company’s director compensation program, directors are granted common stock awards annually upon election or re-election to the board of directors that vest approximately one year from issuance. In July 2015, director common stock awards for a total of 35,000 shares granted in July 2014 with a grant date fair value of $13.16 per share vested and new awards, also for a total of 35,000 shares, with a grant date fair value of $11.41 per share were granted that will vest on July 15, 2016. Performance-based and service-based stock award activity for the year ended December 31, 2015 is summarized below: Number of Shares Weighted Average Grant Date Fair Value Unvested stock awards outstanding at December 31, 2014 436,581 $ 12.29 Grants 35,000 11.41 Forfeitures (22,499 ) 12.00 Vestings ( 160,221 ) 12.71 Unvested stock awards outstanding at December 31, 2015 288,861 11.98 During 2015, 2014 and 2013, the Company recognized in Long-term incentive compensation Other general and administrative expense Service-based stock awards issued to employees not awarded RSUs and to directors receive dividends on a current basis without risk of forfeiture if the related awards do not vest. Outstanding performance-based stock awards and stock awards issued to key executives defer the payment of dividends accruing between the grant dates and the end of related performance or service periods. If these awards do not vest, the related accrued dividends will be forfeited. Included in Common stock dividend payable Long-term Equity-based Awards – Option Awards At December 31, 2015 option awards for 40,000 shares of common stock were outstanding with a weighted average strike price of $11.86. These awards are currently exercisable, have aggregate intrinsic value and have a weighted average remaining contractual term of 2.5 years. No option awards were exercised in 2015. The total intrinsic value of option awards exercised during 2014 and 2013 was $67,000 and $26,000, respectively. All outstanding option awards were granted prior to 2010, have ten-year contractual terms and were issued with strike prices equal to the closing market price of Capstead’s common stock on the dates of grant. The fair value of these awards was estimated at that time using a Black-Scholes option pricing model and was expensed over the related vesting periods. 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. The Company also 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 2015, 2014 and 2013, the Company recognized in Salaries and benefits |
QUARTERLY RESULTS (UNAUDITED)
QUARTERLY RESULTS (UNAUDITED) | 12 Months Ended |
Dec. 31, 2015 | |
QUARTERLY RESULTS (UNAUDITED) [Abstract] | |
QUARTERLY RESULTS (UNAUDITED) | NOTE 13 ¾ Summarized quarterly results of operations were as follows (in thousands, except per share amounts). First Quarter Second Quarter Third Quarter Fourth Quarter Year Ended December 31, 2015 Interest income on residential mortgage investments ( before investment premium amortization) $ 83,723 $ 83,398 $ 83,808 $ 86,250 Investment premium amortization (25,078 ) (33,057 ) (34,323 ) (28,732 ) Related interest expense (19,214 ) (20,098 ) (22,272 ) (23,937 ) 39,431 30,243 27,213 33,581 Other interest income (expense) * (2,029 ) (2,023 ) (2,034 ) (2,027 ) Other revenue (expense) ** (3,445 ) (3,276 ) (4,112 ) (3,197 ) Net income $ 33,957 $ 24,944 $ 21,067 $ 28,357 Basic and diluted net income per common share $ 0.32 $ 0.22 $ 0.18 $ 0.26 Year Ended December 31, 2014 Interest income on residential mortgage investments ( before investment premium amortization) $ 81,733 $ 82,233 $ 82,146 $ 82,509 Investment premium amortization (22,288 ) (25,141 ) (28,284 ) (26,159 ) Related interest expense (15,407 ) (15,542 ) (16,099 ) (18,107 ) 44,038 41,550 37,763 38,243 Other interest income (expense) * (2,061 ) (2,045 ) (2,044 ) (2,023 ) Other revenue (expense) ** (3,586 ) (2,941 ) (3,328 ) (2,746 ) Net income $ 38,391 $ 36,564 $ 32,391 $ 33,474 Basic and diluted net income per common share $ 0.37 $ 0.35 $ 0.30 $ 0.31 * Consists principally of interest on unsecured borrowings. ** Consists of general and administrative expenses, including compensation-related costs, and miscellaneous other revenue (expenses). |
ACCOUNTING POLICIES (Policies)
ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
ACCOUNTING POLICIES [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of Capstead Mortgage Corporation and its wholly-owned and majority-owned subsidiaries over which it exercises control. Pursuant to variable interest entity (“VIE”) accounting principles, Capstead considers for consolidation any VIE in which it holds an interest. The Company’s captive insurance subsidiary is considered a VIE for financial reporting purposes because Capstead has the obligation to absorb its losses and the right to receive its benefits, and, as Capstead is the primary beneficiary, the accounts of the captive insurance subsidiary are consolidated. Common securities held by the Company in statutory trusts organized to issue unsecured borrowings (prior to the dissolution of these trusts in December 2013) were not considered variable interests at risk and were accounted for as investments in unconsolidated affiliates. Investments in these unconsolidated affiliates were initially recorded at cost and subsequently adjusted for the Company’s equity in the affiliates’ earnings and cash contributions and distributions. Intercompany balances and transactions are eliminated. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2014 the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2014-11, Transfers and Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings and Disclosures In April 2015 the Financial Accounting Standards Board issued ASU 2015-03, Interest–Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs Receivables and other assets Unsecured borrowings |
Use of Estimates | Use of Estimates Fair values of financial instruments are estimated based on a market approach using available market information and appropriate valuation methodologies (Level Two Inputs); however, judgment is required in interpreting market data to develop these estimates. Fair values fluctuate on a daily basis and are influenced by changes in, and market expectations for changes in, interest rates, market liquidity conditions and levels of mortgage prepayments, as well as other factors. Accordingly, estimates of fair value are as of the balance sheet dates and are not necessarily indicative of the amounts that could be realized in a current market exchange. The use of different market assumptions and estimation methodologies may have a material effect on estimated fair values. Judgment is also exercised in making impairment conclusions and estimating impairment charges. Amortization of investment premiums on financial assets is based in part on estimates of future levels of mortgage prepayments, which are impacted by future changes in interest rates and other factors. Judgment is required in developing these estimates. While the actual level of mortgage prepayments for a given accounting period is the single largest determinant in amortizing investment premiums, if expectations for future levels of mortgage prepayments increase substantially, earnings could be adversely affected. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents |
Financial Assets | Financial Assets Capstead’s financial assets consist almost exclusively of Agency Securities classified as available-for-sale and carried at fair value with unrealized gains and losses reported as a separate component of Accumulated other comprehensive income Other revenue (expense) Other revenue (expense) Other revenue (expense) Other comprehensive income |
Borrowings | Borrowings In August 2015 Capstead began receiving advances from the Federal Home Loan Bank (“FHLB”) of Cincinnati through a wholly-owned captive insurance subsidiary. These advances are secured by Agency Securities, and together with repurchase arrangements and similar borrowings, are classified as Secured borrowings Secured borrowings in the form of repurchase arrangements create exposure to the potential for failure on the part of counterparties to honor their commitment to return pledged collateral. In the event of a default by a repurchase arrangement counterparty, the Company may have difficulty recovering its collateral. To mitigate this risk, the Company monitors the creditworthiness of its counterparties and manages its exposure to any single counterparty. Capstead’s borrowings are carried at their principal balances outstanding net of related debt issuance costs and debt discounts, if applicable. Debt issuance costs associated with Unsecured borrowings |
Derivative Financial Instruments ("Derivatives") | Derivative Financial Instruments (“Derivatives”) Derivatives used by Capstead for risk management purposes are carried at fair value as assets or liabilities. The accounting for changes in fair value of each Derivative held depends on whether it has been designated as a hedge for accounting purposes, as well as the type of hedging relationship identified. Capstead will typically designate any Derivatives held as cash flow hedges related to a designated portion of its current and anticipated future borrowings. To qualify as a cash flow hedge, at the inception of the hedge relationship the Company must document that the hedge relationship is anticipated to be highly effective and monitor ongoing effectiveness on at least a quarterly basis. As long as the hedge relationship remains effective, the effective portion of changes in fair value of the Derivative is recorded in Accumulated other comprehensive income Interest expense Accumulated other comprehensive income Miscellaneous other revenue (expense) The Company uses interest rate swap agreements in cash flow hedge relationships in order to hedge variability in borrowing rates due to changes in the underlying benchmark interest rate related to a designated portion of its current and anticipated future borrowings. Variable-rate swap payments to be received and any measured hedge ineffectiveness are recorded in Interest expense Interest expense Derivatives create exposure to credit risk related to the potential for failure on the part of counterparties to honor their commitments. In addition, the Company is required to post collateral based on any declines in the market value of the Derivatives. In the event of default by a counterparty, the Company may have difficulty recovering its collateral and may not receive payments provided for under the terms of the Derivative. To mitigate this risk, the Company uses only well-established commercial banks as counterparties and, pursuant to recent regulatory changes, most Derivatives held at December 31, 2015 were entered into through Derivative exchanges established in part to mitigate credit risk. Cash collateral receivable from interest rate swap counterparties Residential mortgage investments Cash collateral payable to interest rate swap counterparties |
Long-term Incentive Compensation | Long-term Incentive Compensation Capstead provides its employees and its directors with long-term incentive compensation in the form of equity-based awards. Equity-based compensation costs are initially measured at the estimated fair value of the awards on the grant date developed using appropriate valuation methodologies, as adjusted for estimates of future award forfeitures. Valuation methodologies used and subsequent expense recognition is dependent upon each award’s service and performance conditions, the latter also referred to as performance metrics. Compensation costs for stock awards subject only to service conditions are measured at the closing stock price on the dates of grant and are recognized as expense on a straight-line basis over the requisite service periods for the awards, as adjusted for changes in estimated, and ultimately actual, forfeitures. Compensation costs for components of stock awards and restricted stock units (“RSUs”) subject to nonmarket-based performance metrics (i.e. metrics not predicated on changes in the Company’s stock price), are measured at the closing stock price on the dates of grant, adjusted for the probability of achieving benchmarks included in the performance metrics. These initial cost estimates are recognized as expense over the requisite performance periods, as adjusted for changes in estimated, and ultimately actual, forfeitures and performance. Compensation costs for components of RSUs subject to market-based performance metrics are measured at the dates of grant using Monte Carlo simulations which incorporate into the valuations the inherent uncertainty regarding achieving the market-based performance metrics. These initial valuation amounts are recognized as expense over the requisite performance periods, subject only to adjustments for forfeitures. |
Income Taxes | Income Taxes Capstead Mortgage Corporation and its qualified REIT subsidiaries (“Capstead REIT”) have elected to be taxed as a REIT. As a result, Capstead REIT is not taxed on taxable income distributed to stockholders if certain REIT qualification tests are met. Capstead’s policy is to distribute 100% of the taxable income of the REIT, after application of available tax attributes, within the time limits prescribed by the Internal Revenue Code (the “Code”), which may extend into the subsequent taxable year. The Company may find it advantageous from time to time to elect taxable REIT subsidiary status for certain of its subsidiaries in which case taxable income of any such subsidiary would be subject to federal and, where applicable, state or local income taxes. Any such income taxes are accounted for using the liability method. Related deferred income tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company has not recognized any liabilities for unrecognized tax benefits using a “more likely than not” threshold for the recognition and measurement of the financial statement effects of tax positions taken on a tax return filing. Should any such liabilities be recognized in future periods, the Company will record related interest and penalties in Other eneral and administrative expense |
Dividend Classification | Dividend Classification Capstead records common and preferred stock dividends in the Accumulated deficit Stockholders’ equity Paid-in capital Net income |
NET INCOME PER COMMON SHARE (Ta
NET INCOME PER COMMON SHARE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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 were as follows for the indicated periods (dollars in thousands, except per share amounts): Year ended December 31 2015 2014 2013 Basic net income per common share Numerator for basic net income per common share: Net income $ 108,325 $ 140,820 $ 126,487 Preferred stock dividends (15,160 ) (13,781 ) (17,536 ) Redemption preference premiums paid on convertible preferred stock – – (19,924 ) Earnings participation of unvested equity awards (123 ) (95 ) (139 ) $ 93,042 $ 126,944 $ 88,888 Denominator for basic net income per common share: Average number of shares of common stock outstanding 95,817 95,789 95,679 Average unvested stock awards outstanding (308 ) (398 ) (506 ) 95,509 95,391 95,173 $ 0.97 $ 1.33 $ 0.93 Diluted net income per common share Numerator for diluted net income per common share: Numerator for basic net income per common share $ 93,042 $ 126,944 $ 88,888 Dividends on dilutive convertible preferred stock – – 44 $ 93,042 $ 126,944 $ 88,932 Denominator for diluted net income per common share: Denominator for basic net income per common share 95,509 95,391 95,173 Net effect of dilutive equity awards 192 238 145 Net effect of dilutive convertible preferred stock – – 75 95,701 95,629 95,393 $ 0.97 $ 1.33 $ 0.93 |
RESIDENTIAL MORTGAGE INVESTME24
RESIDENTIAL MORTGAGE INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
RESIDENTIAL MORTGAGE INVESTMENTS [Abstract] | |
Schedule of Residential Mortgage Investments | Residential mortgage investments Unpaid Principal Balance Investment Premiums Amortized Cost Basis Carrying Amount (a) Net WAC (b) Average Yield (b ) December 31, 2015 Agency Securities: Fannie Mae/Freddie Mac: Fixed-rate $ 796 $ 2 $ 798 $ 799 6.61 % 6.11 % ARMs 10,014,401 317,545 10,331,946 10,487,785 2.55 1.63 Ginnie Mae ARMs 3,542,541 119,225 3,661,766 3,660,455 2.61 1.30 13,557,738 436,772 13,994,510 14,149,039 2.57 1.55 Residential mortgage loans: Fixed-rate 1,155 1 1,156 1,156 6.76 5.12 ARMs 2,650 11 2,661 2,661 3.73 3.20 3,805 12 3,817 3,817 4.65 3.83 Collateral for structured financings 1,850 31 1,881 1,881 8.12 7.81 $ 13,563,393 $ 436,815 $ 14,000,208 $ 14,154,737 2.57 1.55 December 31, 2014 Agency Securities: Fannie Mae/Freddie Mac: Fixed-rate $ 1,660 $ 4 $ 1,664 $ 1,665 6.63 6.45 ARMs 10,230,419 328,781 10,559,200 10,800,332 2.51 1.72 Ginnie Mae ARMs 2,983,659 103,911 3,087,570 3,099,168 2.63 1.53 13,215,738 432,696 13,648,434 13,901,165 2.54 1.69 Residential mortgage loans: Fixed-rate 1,848 2 1,850 1,850 6.96 5.46 ARMs 3,046 13 3,059 3,059 3.73 3.14 4,894 15 4,909 4,909 4.95 3.97 Collateral for structured financings 1,997 33 2,030 2,030 8.11 7.62 $ 13,222,629 $ 432,744 $ 13,655,373 $ 13,908,104 2.54 1.69 (a) Includes unrealized gains and losses for residential mortgage investments classified as available-for-sale. (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 year 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. |
SECURED BORROWINGS (Tables)
SECURED BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
SECURED BORROWINGS [Abstract] | |
Schedule of Secured Borrowings | Secured borrowings Collateral Type Collateral Carrying Amount Accrued Interest Receivable Borrowings Outstanding Average Borrowing Rates December 31, 2015 Borrowings under repurchase arrangements with maturities of 30 days or less: Agency Securities $ 9,080,363 $ 18,504 $ 8,585,336 0.67 % Borrowings under repurchase arrangements with maturities greater than 30 days: Agency Securities (31 to 90 days) 423,710 861 346,177 0.63 Agency Securities (greater than 90 days) 1,073,254 2,519 1,150,000 0.75 Similar borrowings: Collateral for structured financings 1,881 – 1,881 8.12 10,579,208 21,884 10,083,394 FHLB advances 2,956,908 11,422 2,875,000 0.43 $ 13,536,116 $ 33,306 $ 12,958,394 0.62 Year-end borrowing rates adjusted for effects of related Derivatives held as cash flow hedges 0.85 December 31, 2014 Borrowings under repurchase arrangements with maturities of 30 days or less: Agency Securities $ 10,401,080 $ 24,045 $ 9,878,889 0.35 % Borrowings under repurchase arrangements with maturities greater than 30 days: Agency Securities (31 to 90 days) 1,205,570 2,248 1,150,924 0.35 Agency Securities (greater than 90 days) 1,874,892 4,640 1,775,000 0.56 Similar borrowings: Collateral for structured financings 2,030 – 2,030 8.11 $ 13,483,572 $ 30,933 $ 12,806,843 0.38 Year-end borrowing rates adjusted for effects of related Derivatives held as cash flow hedges 0.58 |
Schedule of Average Borrowings Outstanding | Average secured borrowings outstanding differed from respective year-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): Year ended December 31 2015 2014 Average Borrowings Average Rate Average Borrowings Average Rate Average borrowings and rates adjusted for the effects of related Derivatives held as cash flow hedges for the indicated years $ 13,047,509 0.66 % $ 12,651,061 0.52 % |
USE OF DERIVATIVES, OFFSETTIN26
USE OF DERIVATIVES, OFFSETTING DISCLOSURES AND CHANGES IN OTHER COMPREHENSIVE INCOME BY COMPONENT (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
USE OF DERIVATIVES, OFFSETTING DISCLOSURES AND CHANGES IN OTHER COMPREHENSIVE INCOME BY COMPONENT [Abstract] | |
Schedule of Swap Agreements Expiration Period and Characteristics | At December 31, 2015, the Company’s financing-related swap positions had the following characteristics (dollars in thousands): Period of Contract Expiration Notional Amount Average Fixed-Rate Payment Requirement Currently-paying contracts: First quarter 2016 (expired January 4, 2016) $ 1,700,000 0.51 % Second quarter 2016 1,100,000 0.47 Third quarter 2016 700,000 0.56 Fourth quarter 2016 800,000 0.66 First quarter 2017 1,000,000 0.72 Second quarter 2017 900,000 0.74 Third quarter 2017 400,000 0.74 Fourth quarter 2017 1,500,000 0.79 8,100,000 Forward-starting contracts: First quarter 2018 300,000 0.92 $ 8,400,000 |
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 December 31 Location 2015 2014 Balance sheet-related Swap agreements in a gain position (an asset) related to Secured borrowings (a) $ 7,720 $ 1,657 Swap agreements in a loss position (a liability) related to: Secured borrowings (a) (1,051 ) (6,332 ) Unsecured borrowings (a) (25,010 ) (20,702 ) Related net interest payable (b) (10,942 ) (9,516 ) $ (29,283 ) $ (34,893 ) (a) The fair value of Derivatives with unrealized gains are aggregated and recorded as an asset on the face of the Balance Sheets separately from the fair value of Derivatives with 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 $5.6 million at December 31, 2015. (b) Included in “Accounts payable and accrued expenses” on the face of the Balance Sheets. Location of Gain or (Loss) Recognized in Year ended December 31 Net Income 2015 2014 2013 Income statement-related Components of effect on interest expense: Amount of loss reclassified from Accumulated other comprehensive income $ (28,550 ) $ (22,055 ) $ (16,914 ) Amount of gain (loss) recognized (ineffective portion) (924 ) (473 ) 24 Increase in interest expense and decrease in Net income * $ (29,474 ) $ (22,528 ) $ (16,890 ) Other comprehensive income-related Amount of gain (loss) recognized in Other comprehensive income (loss) $ (21,675 ) $ (41,059 ) $ 9,320 * Included in “Interest expense: Secured borrowings” on the face of the Statements of Income. |
Schedule of Offsetting Disclosures for Asset Derivatives Held and Repurchase Arrangements and Similar Borrowings Outstanding | The following tables provide disclosures concerning offsetting of financial liabilities and Derivatives as of the indicated dates (in thousands): Offsetting of Derivative Assets Gross Amounts of Recognized Assets Gross Amounts Offset in the Balance Sheet Net Amounts of Assets Presented in the Balance Sheet Gross Amounts Not Offset in the Balance Sheet (a) Net Amount Financial Instruments Cash Collateral Received December 31, 2015 Counterparty 2 $ – $ 23 $ 23 $ (23 ) $ – $ – Counterparty 4 4,758 2,939 7,697 (7,697 ) – – $ 4,758 $ 2,962 $ 7,720 $ (7,720 ) $ – $ – December 31, 2014 Counterparty 2 $ – $ 95 $ 95 $ (95 ) $ – $ – Counterparty 4 1,128 434 1,562 (1,562 ) – – $ 1,128 $ 529 $ 1,657 $ (1,657 ) $ – $ – |
Schedule of Offsetting Disclosures for Liability Derivatives Held and Repurchase Arrangements and Similar Borrowings Outstanding | Offsetting of Financial Liabilities and Derivative Liabilities Gross Amounts of Recognized Liabilities (b) Gross Amounts Offset in the Balance Sheet Net Amounts of Liabilities Presented in the Balance Sheet (a) Gross Amounts Not Offset in the Balance Sheet (c) Net Amount Financial Instruments Cash Collateral Pledged December 31, 2015 Derivatives by counterparty: Counterparty 1 $ 26,311 $ – $ 26,311 $ – $ (26,311 ) $ – Counterparty 2 776 23 799 (23 ) (776 ) – Counterparty 4 6,954 2,939 9,893 (7,697 ) (2,196 ) – 34,041 2,962 37,003 (7,720 ) (29,283 ) – Borrowings under repurchase arrangements 10,090,846 – 10,090,846 (10,090,846 ) – – $ 10,124,887 $ 2,962 $ 10,127,849 $ (10,098,566 ) $ (29,283 ) $ – December 31, 2014 Derivatives by counterparty: Counterparty 1 $ 24,533 $ – $ 24,533 $ – $ (24,533 ) $ – Counterparty 2 4,042 95 4,137 (95 ) (4,042 ) – Counterparty 3 736 – 736 – (736 ) – Counterparty 4 6,710 434 7,144 (1,562 ) (5,582 ) – 36,021 529 36,550 (1,657 ) (34,893 ) – Borrowings under repurchase arrangements 12,812,947 – 12,812,947 (12,812,947 ) – – $ 12,848,968 $ 529 $ 12,849,497 $ (12,814,604 ) $ (34,893 ) $ – (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 $10.9 million and $9.5 million on interest rate swap agreements and $9.3 million and $6.1 million on borrowings under repurchase arrangements, included in “Accounts payable and accrued expenses” on the face of the Balance Sheets as of December 31, 2015 and December 31, 2014, 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 Gains and Losses on Cash Flow Hedges Unrealized Gains and Losses on Available-for-Sale Securities Total Balance at December 31, 2012 $ (32,539 ) $ 326,449 $ 293,910 Activity for the year ended December 31, 2013: Other comprehensive income (loss) before reclassifications 9,320 (101,001 ) (91,681 ) Amounts reclassified from accumulated other comprehensive income 16,914 – 16,914 Other comprehensive 26,234 (101,001 ) (74,767 ) Balance at December 31, 2013 (6,305 ) 225,448 219,143 Activity for the year ended December 31, 2014: Other comprehensive income (loss) before reclassifications (41,059 ) 27,283 (13,776 ) Amounts reclassified from accumulated other comprehensive income 22,055 – 22,055 Other comprehensive income (loss) (19,004 ) 27,283 8,279 Balance at December 31, 2014 (25,309 ) 252,731 227,422 Activity for the year ended December 31, 2015: Other comprehensive income (loss) before reclassifications (21,675 ) (98,202 ) (119,877 ) Amounts reclassified from accumulated other comprehensive income 28,550 – 28,550 Other comprehensive income (loss) 6,875 (98,202 ) (91,327 ) Balance at December 31, 2015 $ (18,434 ) $ 154,529 $ 136,095 |
UNSECURED BORROWINGS (Tables)
UNSECURED BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
UNSECURED BORROWINGS [Abstract] | |
Schedule of Subordinated Note Balances and Related Weighted Average Interest Rates | Note balances net of deferred issuance costs, and related weighted average interest rates as of the indicated dates (calculated including issuance cost amortization and adjusted for effects of related currently-paying Derivatives held as cash flow hedges ) were as follows (dollars in thousands): December 31, 2015 December 31, 2014 Borrowings Outstanding Average Rate Borrowings Outstanding Average Rate Junior subordinated notes maturing in: October 2035 ($35,000 face amount) $ 34,234 7.91 % $ 34,196 8.51 % December 2035 ($40,000 face amount) 39,244 7.68 39,202 8.64 September 2036 ($25,000 face amount) 24,508 8.96 24,484 8.97 $ 97,986 8.08 $ 97,882 8.68 * The average borrowing rate for total unsecured borrowings, adjusted for the effects of related Derivatives held for hedging purposes, will decline to 7.77% effective September 15, 2016, coinciding with the 20-year floating rate period of the September 2036 notes. |
DISCLOSURES REGARDING FAIR VA28
DISCLOSURES REGARDING FAIR VALUES OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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): December 31, 2015 December 31, 2014 Carrying Amount Fair Value Carrying Amount Fair Value Financial assets: Residential mortgage loans $ 3,817 $ 3,900 $ 4,909 $ 5,000 Lending counterparty investments 65,002 65,002 5,000 5,000 Portfolio-related interest rate swap agreements 7,720 7,720 1,657 1,657 Financial liabilities: Secured borrowings with initial terms of greater than 120 days 3,246,177 3,245,000 2,128,517 2,128,400 Unsecured borrowings 97,986 77,200 97,882 100,500 Interest rate swap agreements: Portfolio-related 1,051 1,051 6,332 6,332 Unsecured borrowings-related 25,010 25,010 20,702 20,702 |
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 December 31, 2015 Agency Securities classified as available-for-sale: Fannie Mae/Freddie Mac $ 10,331,965 $ 166,794 $ 10,954 $ 10,487,805 Ginnie Mae 3,661,766 11,705 13,016 3,660,455 Residential mortgage securities classified as 2,660 44 – 2,704 December 31, 2014 Agency Securities classified as available-for-sale: Fannie Mae/Freddie Mac 10,559,231 243,351 2,218 10,800,364 Ginnie Mae 3,087,570 16,755 5,157 3,099,168 Residential mortgage securities classified as held-to-maturity 3,663 124 – 3,787 |
Securities in Unrealized Loss Position | December 31, 2015 December 31, 2014 Fair Value Unrealized Loss Fair Value Unrealized Loss Securities in an unrealized loss position: One year or greater $ 597,652 $ 4,259 $ 706,839 $ 5,320 Less than one year 4,468,844 19,711 1,095,724 2,055 $ 5,066,496 $ 23,970 $ 1,802,563 $ 7,375 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
INCOME TAXES [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | The Company’s effective tax rate differs substantially from statutory federal income tax rates primarily due to the benefit of Capstead REIT’s status as a REIT, along with other items affecting the Company’s effective tax rate as illustrated below for the indicated periods (in thousands): Year ended December 31 2015 2014 2013 Income taxes computed at the federal statutory rate $ 37,914 $ 49,287 $ 44,270 Benefit of REIT status (37,913 ) (49,283 ) (44,270 ) Income taxes computed on income of Capstead’s sole taxable REIT subsidiary 1 4 – Change in net deferred income tax assets (1 ) (4 ) 1 Other – – (1 ) Income tax provision $ – $ – $ – |
Components of Deferred Tax Assets and Liabilities | Significant components of the Company’s taxable REIT subsidiary’s deferred income tax assets and liabilities were as follows as of the indicated dates (in thousands): December 31 2015 2014 Deferred income tax assets: Alternative minimum tax credit (a) $ 1,941 $ 1,941 Net operating loss carryforwards (b) 57 58 Other 20 20 2,018 2,019 Deferred income tax liabilities – – Net deferred tax assets $ 2,018 $ 2,019 Valuation allowance (c) $ 2,018 $ 2,019 (a) Alternative minimum tax credit carryforwards can be utilized to offset payment of federal income taxes on future taxable income, if any, earned by this subsidiary, subject to certain limitations. (b) Excludes $3.5 million in remaining net operating loss carryforwards which expire beginning after 2019. Should these carryforwards be utilized, they will be excluded for purposes of calculating the Company’s provision for income taxes. Any such utilization will, however, reduce actual taxes payable. (c) Because this subsidiary is not expected to earn significant amounts of taxable income, related net deferred tax assets are fully reserved at December 31, 2015. |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
STOCKHOLDERS' EQUITY [Abstract] | |
Schedule of Series E Preferred Stock Issued Prices and Proceeds Presented Net of Underwriting Fees and Other Costs | Shares of Series E preferred stock issued under this program, issue prices and proceeds, both presented net of underwriting fees and other costs were as follows for the indicated periods: Year Ended December 31, Shares Net Issue Price Net Proceeds 2015 538,000 $ 24.61 $ 13,236,000 2014 757,000 24.01 18,180,000 2013 61,000 23.78 1,447,000 |
COMPENSATION PROGRAMS (Tables)
COMPENSATION PROGRAMS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
COMPENSATION PROGRAMS [Abstract] | |
Schedule of Performance and Service Based Stock Award Activity | Performance-based and service-based stock award activity for the year ended December 31, 2015 is summarized below: Number of Shares Weighted Average Grant Date Fair Value Unvested stock awards outstanding at December 31, 2014 436,581 $ 12.29 Grants 35,000 11.41 Forfeitures (22,499 ) 12.00 Vestings ( 160,221 ) 12.71 Unvested stock awards outstanding at December 31, 2015 288,861 11.98 |
QUARTERLY RESULTS (Tables)
QUARTERLY RESULTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
QUARTERLY RESULTS (UNAUDITED) [Abstract] | |
Summarized Quarterly Results of Operations | Summarized quarterly results of operations were as follows (in thousands, except per share amounts). First Quarter Second Quarter Third Quarter Fourth Quarter Year Ended December 31, 2015 Interest income on residential mortgage investments ( before investment premium amortization) $ 83,723 $ 83,398 $ 83,808 $ 86,250 Investment premium amortization (25,078 ) (33,057 ) (34,323 ) (28,732 ) Related interest expense (19,214 ) (20,098 ) (22,272 ) (23,937 ) 39,431 30,243 27,213 33,581 Other interest income (expense) * (2,029 ) (2,023 ) (2,034 ) (2,027 ) Other revenue (expense) ** (3,445 ) (3,276 ) (4,112 ) (3,197 ) Net income $ 33,957 $ 24,944 $ 21,067 $ 28,357 Basic and diluted net income per common share $ 0.32 $ 0.22 $ 0.18 $ 0.26 Year Ended December 31, 2014 Interest income on residential mortgage investments ( before investment premium amortization) $ 81,733 $ 82,233 $ 82,146 $ 82,509 Investment premium amortization (22,288 ) (25,141 ) (28,284 ) (26,159 ) Related interest expense (15,407 ) (15,542 ) (16,099 ) (18,107 ) 44,038 41,550 37,763 38,243 Other interest income (expense) * (2,061 ) (2,045 ) (2,044 ) (2,023 ) Other revenue (expense) ** (3,586 ) (2,941 ) (3,328 ) (2,746 ) Net income $ 38,391 $ 36,564 $ 32,391 $ 33,474 Basic and diluted net income per common share $ 0.37 $ 0.35 $ 0.30 $ 0.31 * Consists principally of interest on unsecured borrowings. ** Consists of general and administrative expenses, including compensation-related costs, and miscellaneous other revenue (expenses). |
ACCOUNTING POLICIES (Details)
ACCOUNTING POLICIES (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes [Abstract] | |
Percentage of taxable income to be distributed | 100.00% |
Minimum [Member] | |
Derivative [Line Items] | |
Interest owed on hedged borrowings rest to market rates | 30 days |
Maximum [Member] | |
Derivative [Line Items] | |
Interest owed on hedged borrowings rest to market rates | 90 days |
NET INCOME PER COMMON SHARE - C
NET INCOME PER COMMON SHARE - Components of Computation of Basic and Diluted Net Income Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Numerator for basic net income per common share [Abstract] | |||
Net income | $ 108,325 | $ 140,820 | $ 126,487 |
Preferred stock dividends | (15,160) | (13,781) | (17,536) |
Redemption preference premiums paid on Convertible preferred stock | 0 | 0 | (19,924) |
Earnings participation of unvested equity awards | (123) | (95) | (139) |
Numerator for basic net income per common share | $ 93,042 | $ 126,944 | $ 88,888 |
Denominator for basic net income per common share [Abstract] | |||
Average number of shares of common stock outstanding (in shares) | 95,817 | 95,789 | 95,679 |
Average unvested stock awards outstanding (in shares) | (308) | (398) | (506) |
Denominator for basic net income per common share (in shares) | 95,509 | 95,391 | 95,173 |
Basic net income per common share (in dollars per share) | $ 0.97 | $ 1.33 | $ 0.93 |
Numerator for diluted net income per common share [Abstract] | |||
Numerator for basic net income per common share | $ 93,042 | $ 126,944 | $ 88,888 |
Dividends on dilutive convertible preferred stock | 0 | 0 | 44 |
Numerator for diluted net income per common share | $ 93,042 | $ 126,944 | $ 88,932 |
Denominator for diluted net income per common share [Abstract] | |||
Denominator for basic net income per common share (in shares) | 95,509 | 95,391 | 95,173 |
Net effect of dilutive equity awards (in shares) | 192 | 238 | 145 |
Net effect of dilutive convertible preferred stock (in shares) | 0 | 0 | 75 |
Denominator for diluted net income per common share (in shares) | 95,701 | 95,629 | 95,393 |
Diluted net income per common share (in dollars per share) | $ 0.97 | $ 1.33 | $ 0.93 |
NET INCOME PER COMMON SHARE - P
NET INCOME PER COMMON SHARE - Potentially Dilutive Securities Excluded from Computation of Net Income Per Common Share (Details) - shares | 1 Months Ended | 12 Months Ended | ||
May. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Anti-dilutive equity awards excludable under the treasury stock (in shares) | 15,000 | 15,000 | 273,000 | |
7.50% Cumulative Redeemable Preferred Stock, Series E [Member] | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Preferred stock dividend rate | 7.50% | |||
Redeemable Preferred Stock [Member] | 7.50% Cumulative Redeemable Preferred Stock, Series E [Member] | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Preferred stock dividend rate | 7.50% | 7.50% |
RESIDENTIAL MORTGAGE INVESTME36
RESIDENTIAL MORTGAGE INVESTMENTS - Schedule of Residential Mortgage Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | ||
Schedule Of Residential Mortgage Investments [Line Items] | |||
Unpaid Principal Balance | $ 13,563,393 | $ 13,222,629 | |
Investment Premiums | 436,815 | 432,744 | |
Amortized Cost Basis | 14,000,208 | 13,655,373 | |
Carrying Amount | [1] | $ 14,154,737 | $ 13,908,104 |
Net WAC | [2] | 2.57% | 2.54% |
Average Yield | [2] | 1.55% | 1.69% |
Agency Securities [Member] | |||
Schedule Of Residential Mortgage Investments [Line Items] | |||
Unpaid Principal Balance | $ 13,557,738 | $ 13,215,738 | |
Investment Premiums | 436,772 | 432,696 | |
Amortized Cost Basis | 13,994,510 | 13,648,434 | |
Carrying Amount | [1] | $ 14,149,039 | $ 13,901,165 |
Net WAC | [2] | 2.57% | 2.54% |
Average Yield | [2] | 1.55% | 1.69% |
Agency Securities [Member] | Fixed-Rate [Member] | |||
Schedule Of Residential Mortgage Investments [Line Items] | |||
Unpaid Principal Balance | $ 796 | $ 1,660 | |
Investment Premiums | 2 | 4 | |
Amortized Cost Basis | 798 | 1,664 | |
Carrying Amount | [1] | $ 799 | $ 1,665 |
Net WAC | [2] | 6.61% | 6.63% |
Average Yield | [2] | 6.11% | 6.45% |
Agency Securities [Member] | ARMs [Member] | |||
Schedule Of Residential Mortgage Investments [Line Items] | |||
Unpaid Principal Balance | $ 10,014,401 | $ 10,230,419 | |
Investment Premiums | 317,545 | 328,781 | |
Amortized Cost Basis | 10,331,946 | 10,559,200 | |
Carrying Amount | [1] | $ 10,487,785 | $ 10,800,332 |
Net WAC | [2] | 2.55% | 2.51% |
Average Yield | [2] | 1.63% | 1.72% |
Agency Securities [Member] | Ginnie Mae ARMs [Member] | |||
Schedule Of Residential Mortgage Investments [Line Items] | |||
Unpaid Principal Balance | $ 3,542,541 | $ 2,983,659 | |
Investment Premiums | 119,225 | 103,911 | |
Amortized Cost Basis | 3,661,766 | 3,087,570 | |
Carrying Amount | [1] | $ 3,660,455 | $ 3,099,168 |
Net WAC | [2] | 2.61% | 2.63% |
Average Yield | [2] | 1.30% | 1.53% |
Residential Mortgage Loans [Member] | |||
Schedule Of Residential Mortgage Investments [Line Items] | |||
Unpaid Principal Balance | $ 3,805 | $ 4,894 | |
Investment Premiums | 12 | 15 | |
Amortized Cost Basis | 3,817 | 4,909 | |
Carrying Amount | [1] | $ 3,817 | $ 4,909 |
Net WAC | [2] | 4.65% | 4.95% |
Average Yield | [2] | 3.83% | 3.97% |
Residential Mortgage Loans [Member] | Fixed-Rate [Member] | |||
Schedule Of Residential Mortgage Investments [Line Items] | |||
Unpaid Principal Balance | $ 1,155 | $ 1,848 | |
Investment Premiums | 1 | 2 | |
Amortized Cost Basis | 1,156 | 1,850 | |
Carrying Amount | [1] | $ 1,156 | $ 1,850 |
Net WAC | [2] | 6.76% | 6.96% |
Average Yield | [2] | 5.12% | 5.46% |
Residential Mortgage Loans [Member] | ARMs [Member] | |||
Schedule Of Residential Mortgage Investments [Line Items] | |||
Unpaid Principal Balance | $ 2,650 | $ 3,046 | |
Investment Premiums | 11 | 13 | |
Amortized Cost Basis | 2,661 | 3,059 | |
Carrying Amount | [1] | $ 2,661 | $ 3,059 |
Net WAC | [2] | 3.73% | 3.73% |
Average Yield | [2] | 3.20% | 3.14% |
Collateral for Structured Financings [Member] | |||
Schedule Of Residential Mortgage Investments [Line Items] | |||
Unpaid Principal Balance | $ 1,850 | $ 1,997 | |
Investment Premiums | 31 | 33 | |
Amortized Cost Basis | 1,881 | 2,030 | |
Carrying Amount | [1] | $ 1,881 | $ 2,030 |
Net WAC | [2] | 8.12% | 8.11% |
Average Yield | [2] | 7.81% | 7.62% |
[1] | Includes unrealized gains and losses for residential mortgage investments classified as available-for-sale. | ||
[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 year 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 INVESTME37
RESIDENTIAL MORTGAGE INVESTMENTS (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Schedule Of Residential Mortgage Investments [Line Items] | |
Mortgage securities weighted average contractual maturity, months | 291 months |
Available for sale ARM securities, current-reset | $ 7,960 |
Available for sale ARM securities, longer-to-reset | $ 6,040 |
Current-Reset ARMs [Member] | |
Schedule Of Residential Mortgage Investments [Line Items] | |
Agency securities average months to roll, months | 6 months 18 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 | 42 months 6 days |
Longer-To-Reset ARMs [Member] | Minimum [Member] | |
Schedule Of Residential Mortgage Investments [Line Items] | |
Agency securities months to roll | 18 months |
INVESTMENTS IN UNCONSOLIDATED38
INVESTMENTS IN UNCONSOLIDATED AFFILIATES (Details) $ in Millions | Dec. 31, 2013USD ($) |
INVESTMENTS IN UNCONSOLIDATED AFFILIATES [Abstract] | |
Issuance of common securities | $ 3.1 |
SECURED BORROWINGS (Details)
SECURED BORROWINGS (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Feb. 26, 2016 | |
Repurchase Arrangements And Similar Borrowings, Including Interest Rate Hedging Activity [Line Items] | ||||
Total collateral carrying amount | $ 13,540,000 | $ 13,480,000 | ||
Effective interest rate | 0.66% | 0.52% | ||
Average borrowings for the effects of related derivatives held as cash flow hedges | $ 13,047,509 | $ 12,651,061 | ||
Interest paid on secured borrowings | $ 79,100 | $ 59,700 | $ 71,100 | |
Year-End Borrowing Rates Adjusted for Effects of Related Derivatives Held as Cash Flow Hedges [Member] | ||||
Repurchase Arrangements And Similar Borrowings, Including Interest Rate Hedging Activity [Line Items] | ||||
Effective interest rate | 0.85% | 0.58% | ||
FHLB Advances [Member] | ||||
Repurchase Arrangements And Similar Borrowings, Including Interest Rate Hedging Activity [Line Items] | ||||
Collateral carrying amount for FHLB advances | $ 2,956,908 | |||
Accrued Interest Receivable | 11,422 | |||
Borrowings outstanding for FHLB advance | $ 2,875,000 | |||
Effective interest rate | 0.43% | |||
Receivables and other assets | $ 60,000 | |||
FHLB Advances [Member] | Subsequent Event [Member] | ||||
Repurchase Arrangements And Similar Borrowings, Including Interest Rate Hedging Activity [Line Items] | ||||
Borrowings outstanding for FHLB advance | $ 750,000 | |||
Agency Securities [Member] | ||||
Repurchase Arrangements And Similar Borrowings, Including Interest Rate Hedging Activity [Line Items] | ||||
Collateral Carrying Amount | 10,579,208 | $ 13,483,572 | ||
Accrued Interest Receivable | 21,884 | 30,933 | ||
Borrowings outstanding | 10,083,394 | $ 12,806,843 | ||
Effective interest rate | 0.38% | |||
Agency Securities [Member] | Borrowings with Maturities of 30 Days or Less [Member] | ||||
Repurchase Arrangements And Similar Borrowings, Including Interest Rate Hedging Activity [Line Items] | ||||
Collateral Carrying Amount | 9,080,363 | $ 10,401,080 | ||
Accrued Interest Receivable | 18,504 | 24,045 | ||
Borrowings outstanding | $ 8,585,336 | $ 9,878,889 | ||
Effective interest rate | 0.67% | 0.35% | ||
Agency Securities [Member] | Borrowings with Maturities of 31 to 90 Days [Member] | ||||
Repurchase Arrangements And Similar Borrowings, Including Interest Rate Hedging Activity [Line Items] | ||||
Collateral Carrying Amount | $ 423,710 | $ 1,205,570 | ||
Accrued Interest Receivable | 861 | 2,248 | ||
Borrowings outstanding | $ 346,177 | $ 1,150,924 | ||
Effective interest rate | 0.63% | 0.35% | ||
Agency Securities [Member] | Borrowings with Maturities Greater than 90 Days [Member] | ||||
Repurchase Arrangements And Similar Borrowings, Including Interest Rate Hedging Activity [Line Items] | ||||
Collateral Carrying Amount | $ 1,073,254 | $ 1,874,892 | ||
Accrued Interest Receivable | 2,519 | 4,640 | ||
Borrowings outstanding | $ 1,150,000 | $ 1,775,000 | ||
Effective interest rate | 0.75% | 0.56% | ||
Agency Securities [Member] | FHLB Advances [Member] | ||||
Repurchase Arrangements And Similar Borrowings, Including Interest Rate Hedging Activity [Line Items] | ||||
Total collateral carrying amount | $ 13,536,116 | |||
Accrued Interest Receivable | 33,306 | |||
Borrowings outstanding | $ 12,958,394 | |||
Effective interest rate | 0.62% | |||
Collateral for Structured Financings [Member] | Similar Borrowings [Member] | ||||
Repurchase Arrangements And Similar Borrowings, Including Interest Rate Hedging Activity [Line Items] | ||||
Collateral Carrying Amount | $ 1,881 | $ 2,030 | ||
Accrued Interest Receivable | 0 | 0 | ||
Borrowings outstanding | $ 1,881 | $ 2,030 | ||
Effective interest rate | 8.12% | 8.11% |
USE OF DERIVATIVES, OFFSETTIN40
USE OF DERIVATIVES, OFFSETTING DISCLOSURES AND CHANGES IN OTHER COMPREHENSIVE INCOME BY COMPONENT- Schedule of Swap Agreements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2010 | Dec. 31, 2014 | |
Notional Disclosures [Abstract] | |||
Notional Amount | $ 8,400,000 | ||
Derivative instruments unrealized losses to be recognized | 5,600 | ||
Interest Rate SWAP Currently-Paying Contracts [Member] | |||
Notional Disclosures [Abstract] | |||
Notional Amount | 8,100,000 | ||
Interest Rate SWAP Currently-Paying Contracts [Member] | First Quarter 2016 (Expired January 4, 2016) [Member] | |||
Notional Disclosures [Abstract] | |||
Notional Amount | $ 1,700,000 | ||
Average Fixed Rate Payment Requirement | 0.51% | ||
Interest Rate SWAP Currently-Paying Contracts [Member] | Second Quarter 2016 [Member] | |||
Notional Disclosures [Abstract] | |||
Notional Amount | $ 1,100,000 | ||
Average Fixed Rate Payment Requirement | 0.47% | ||
Interest Rate SWAP Currently-Paying Contracts [Member] | Third Quarter 2016 [Member] | |||
Notional Disclosures [Abstract] | |||
Notional Amount | $ 700,000 | ||
Average Fixed Rate Payment Requirement | 0.56% | ||
Interest Rate SWAP Currently-Paying Contracts [Member] | Fourth Quarter 2016 [Member] | |||
Notional Disclosures [Abstract] | |||
Notional Amount | $ 800,000 | ||
Average Fixed Rate Payment Requirement | 0.66% | ||
Interest Rate SWAP Currently-Paying Contracts [Member] | First Quarter 2017 [Member] | |||
Notional Disclosures [Abstract] | |||
Notional Amount | $ 1,000,000 | ||
Average Fixed Rate Payment Requirement | 0.72% | ||
Interest Rate SWAP Currently-Paying Contracts [Member] | Second Quarter 2017 [Member] | |||
Notional Disclosures [Abstract] | |||
Notional Amount | $ 900,000 | ||
Average Fixed Rate Payment Requirement | 0.74% | ||
Interest Rate SWAP Currently-Paying Contracts [Member] | Third Quarter 2017 [Member] | |||
Notional Disclosures [Abstract] | |||
Notional Amount | $ 400,000 | ||
Average Fixed Rate Payment Requirement | 0.74% | ||
Interest Rate SWAP Currently-Paying Contracts [Member] | Fourth Quarter 2017 [Member] | |||
Notional Disclosures [Abstract] | |||
Notional Amount | $ 1,500,000 | ||
Average Fixed Rate Payment Requirement | 0.79% | ||
Interest Rate SWAP Forward-Starting Contracts [Member] | First Quarter 2018 [Member] | |||
Notional Disclosures [Abstract] | |||
Notional Amount | $ 300,000 | ||
Average Fixed Rate Payment Requirement | 0.92% | ||
Interest Rate Swap Agreements [Member] | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
SWAP agreement notional amount during period | $ 3,600,000 | $ 100,000 | |
SWAP agreement average interest rate during period | 0.77% | 4.09% | |
Swap agreement notional amount expiring during period | $ 2,900,000 | ||
SWAP agreement average interest rate expiring during period | 0.47% | ||
Notional Disclosures [Abstract] | |||
Payment term of LIBOR interest rate agreement | 2 years | 20 years | |
Accrued interest | $ 10,900 | $ 9,500 | |
Interest Rate Swap Expired One [Member] | |||
Notional Disclosures [Abstract] | |||
Payment term of LIBOR interest rate agreement | 2 years | ||
Repurchase Arrangements and Similar Borrowings [Member] | |||
Notional Disclosures [Abstract] | |||
Accrued interest | $ 9,300 | $ 6,100 |
USE OF DERIVATIVES, OFFSETTIN41
USE OF DERIVATIVES, OFFSETTING DISCLOSURES AND CHANGES IN OTHER COMPREHENSIVE INCOME BY COMPONENT- Balance Sheet and Income Statement Location (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Balance sheet-related [Abstract] | ||||
Interest rate swap agreements at fair value, net assets (liability) | $ (29,283) | $ (34,893) | ||
Income statement-related [Abstract] | ||||
Amount of loss reclassified from Accumulated other comprehensive income related to the effective portion of active positions | 28,550 | 22,055 | $ 16,914 | |
Other Comprehensive Income (Loss) [Member] | ||||
Other comprehensive income related [Abstract] | ||||
Amount of gain (loss) recognized in Other comprehensive income (loss) (effective portion) | (21,675) | (41,059) | 9,320 | |
Interest Expense [Member] | ||||
Income statement-related [Abstract] | ||||
Amount of loss reclassified from Accumulated other comprehensive income related to the effective portion of active positions | (28,550) | (22,055) | (16,914) | |
Amount of gain (loss) recognized (ineffective portion) | (924) | (473) | 24 | |
Increase in interest expense and decrease in Net income as a result of the use of Derivatives | [1] | (29,474) | (22,528) | $ (16,890) |
Other Liabilities [Member] | ||||
Balance sheet-related [Abstract] | ||||
Related net interest payable | [2] | (10,942) | (9,516) | |
Secured Borrowings [Member] | Other Assets [Member] | ||||
Balance sheet-related [Abstract] | ||||
Interest rate swap agreements in a gain position (an asset) | [3] | 7,720 | 1,657 | |
Secured Borrowings [Member] | Other Liabilities [Member] | ||||
Balance sheet-related [Abstract] | ||||
Interest rate swap agreements in a loss position (a liability) | [3] | (1,051) | (6,332) | |
Unsecured Borrowings [Member] | Other Liabilities [Member] | ||||
Balance sheet-related [Abstract] | ||||
Interest rate swap agreements in a loss position (a liability) | [3] | $ (25,010) | $ (20,702) | |
[1] | Included in "Interest expense: Secured 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 unrealized gains are aggregated and recorded as an asset on the face of the Balance Sheets separately from the fair value of Derivatives with 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 $5.6 million at December 31, 2015. |
USE OF DERIVATIVES, OFFSETTIN42
USE OF DERIVATIVES, OFFSETTING DISCLOSURES AND CHANGES IN OTHER COMPREHENSIVE INCOME BY COMPONENT- Offsetting Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Offsetting of derivative assets [Abstract] | |||
Gross Amounts of Recognized Assets | $ 7,720 | $ 1,657 | |
Net Amounts of Assets Presented in the Balance Sheet | (29,283) | (34,893) | |
Cash Collateral Received | 50,193 | 53,139 | |
Offsetting Derivatives Assets [Member] | Counterparty 2 [Member] | |||
Offsetting of derivative assets [Abstract] | |||
Gross Amounts of Recognized Assets | 0 | 0 | |
Gross Amounts Offset in the Balance Sheet | 23 | 95 | |
Net Amounts of Assets Presented in the Balance Sheet | 23 | 95 | |
Financial Instruments | [1] | (23) | (95) |
Cash Collateral Received | [1] | 0 | 0 |
Net Amount | 0 | 0 | |
Offsetting Derivatives Assets [Member] | Counterparty 4 [Member] | |||
Offsetting of derivative assets [Abstract] | |||
Gross Amounts of Recognized Assets | 4,758 | 1,128 | |
Gross Amounts Offset in the Balance Sheet | 2,939 | 434 | |
Net Amounts of Assets Presented in the Balance Sheet | 7,697 | 1,562 | |
Financial Instruments | [1] | (7,697) | (1,562) |
Cash Collateral Received | [1] | 0 | 0 |
Net Amount | 0 | 0 | |
Offsetting Derivatives Assets [Member] | Derivative Counterparties [Member] | |||
Offsetting of derivative assets [Abstract] | |||
Gross Amounts of Recognized Assets | 4,758 | 1,128 | |
Gross Amounts Offset in the Balance Sheet | 2,962 | 529 | |
Net Amounts of Assets Presented in the Balance Sheet | 7,720 | 1,657 | |
Financial Instruments | [1] | (7,720) | (1,657) |
Cash Collateral Received | [1] | 0 | 0 |
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. |
USE OF DERIVATIVES, OFFSETTIN43
USE OF DERIVATIVES, OFFSETTING DISCLOSURES AND CHANGES IN OTHER COMPREHENSIVE INCOME BY COMPONENT- Offsetting Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Offsetting of financial liabilities and derivative liabilities [Abstract] | |||
Gross Amounts of Recognized Liabilities | $ 26,061 | $ 27,034 | |
Offsetting Financial Liabilities and Derivative Liabilities [Member] | |||
Offsetting of financial liabilities and derivative liabilities [Abstract] | |||
Gross Amounts of Recognized Liabilities | [1] | 10,124,887 | 12,848,968 |
Gross Amounts Offset in the Balance Sheet | 2,962 | 529 | |
Net Amounts of Liabilities Presented in the Balance Sheet | [2] | 10,127,849 | 12,849,497 |
Financial Instruments | [3] | (10,098,566) | (12,814,604) |
Cash Collateral Pledged | [3] | (29,283) | (34,893) |
Net Amount | 0 | 0 | |
Offsetting Financial Liabilities and Derivative Liabilities [Member] | Counterparty 1 [Member] | |||
Offsetting of financial liabilities and derivative liabilities [Abstract] | |||
Gross Amounts of Recognized Liabilities | [1] | 26,311 | 24,533 |
Gross Amounts Offset in the Balance Sheet | 0 | 0 | |
Net Amounts of Liabilities Presented in the Balance Sheet | [2] | 26,311 | 24,533 |
Financial Instruments | [3] | 0 | 0 |
Cash Collateral Pledged | [3] | (26,311) | (24,533) |
Net Amount | 0 | 0 | |
Offsetting Financial Liabilities and Derivative Liabilities [Member] | Counterparty 2 [Member] | |||
Offsetting of financial liabilities and derivative liabilities [Abstract] | |||
Gross Amounts of Recognized Liabilities | [1] | 776 | 4,042 |
Gross Amounts Offset in the Balance Sheet | 23 | 95 | |
Net Amounts of Liabilities Presented in the Balance Sheet | [2] | 799 | 4,137 |
Financial Instruments | [3] | (23) | (95) |
Cash Collateral Pledged | [3] | (776) | (4,042) |
Net Amount | 0 | 0 | |
Offsetting Financial Liabilities and Derivative Liabilities [Member] | Counterparty 3 [Member] | |||
Offsetting of financial liabilities and derivative liabilities [Abstract] | |||
Gross Amounts of Recognized Liabilities | [1] | 736 | |
Gross Amounts Offset in the Balance Sheet | 0 | ||
Net Amounts of Liabilities Presented in the Balance Sheet | [2] | 736 | |
Financial Instruments | [3] | 0 | |
Cash Collateral Pledged | [3] | (736) | |
Net Amount | 0 | ||
Offsetting Financial Liabilities and Derivative Liabilities [Member] | Counterparty 4 [Member] | |||
Offsetting of financial liabilities and derivative liabilities [Abstract] | |||
Gross Amounts of Recognized Liabilities | [1] | 6,954 | 6,710 |
Gross Amounts Offset in the Balance Sheet | 2,939 | 434 | |
Net Amounts of Liabilities Presented in the Balance Sheet | [2] | 9,893 | 7,144 |
Financial Instruments | [3] | (7,697) | (1,562) |
Cash Collateral Pledged | [3] | (2,196) | (5,582) |
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 | [1] | 34,041 | 36,021 |
Gross Amounts Offset in the Balance Sheet | 2,962 | 529 | |
Net Amounts of Liabilities Presented in the Balance Sheet | [2] | 37,003 | 36,550 |
Financial Instruments | [3] | (7,720) | (1,657) |
Cash Collateral Pledged | [3] | (29,283) | (34,893) |
Net Amount | 0 | 0 | |
Borrowings under Repurchase Arrangements [Member] | Offsetting Financial Liabilities and Derivative Liabilities [Member] | |||
Offsetting of financial liabilities and derivative liabilities [Abstract] | |||
Gross Amounts of Recognized Liabilities | [1] | 10,090,846 | 12,812,947 |
Gross Amounts Offset in the Balance Sheet | 0 | 0 | |
Net Amounts of Liabilities Presented in the Balance Sheet | [2] | 10,090,846 | 12,812,947 |
Financial Instruments | [3] | (10,090,846) | (12,812,947) |
Cash Collateral Pledged | [3] | 0 | 0 |
Net Amount | $ 0 | $ 0 | |
[1] | Amounts include accrued interest of $10.9 million and $9.5 million on interest rate swap agreements and $9.3 million and $6.1 million on borrowings under repurchase arrangements, included in "Accounts payable and accrued expenses" on the face of the Balance Sheets as of December 31, 2015 and December 31, 2014, respectively. | ||
[2] | Amounts presented are limited to recognized liabilities and cash collateral received associated with the indicated counterparty sufficient to reduce the related Net Amount to zero in accordance with ASU No. 2011-11, as amended by ASU No. 2013-01. | ||
[3] | Amounts presented are limited to recognized assets and collateral pledged associated with the indicated counterparty sufficient to reduce the related Net Amount to zero in accordance with ASU No. 2011-11, as amended by ASU No. 2013-01. |
USE OF DERIVATIVES, OFFSETTIN44
USE OF DERIVATIVES, OFFSETTING DISCLOSURES AND CHANGES IN OTHER COMPREHENSIVE INCOME BY COMPONENT- Changes in AOCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | $ 227,422 | $ 219,143 | $ 293,910 |
Other comprehensive income (loss) before reclassifications | (119,877) | (13,776) | (91,681) |
Amounts reclassified from accumulated other comprehensive income | 28,550 | 22,055 | 16,914 |
Other comprehensive income (loss) | (91,327) | 8,279 | (74,767) |
Ending Balance | 136,095 | 227,422 | 219,143 |
Gains and Losses on Cash Flow Hedges [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | (25,309) | (6,305) | (32,539) |
Other comprehensive income (loss) before reclassifications | (21,675) | (41,059) | 9,320 |
Amounts reclassified from accumulated other comprehensive income | 28,550 | 22,055 | 16,914 |
Other comprehensive income (loss) | 6,875 | (19,004) | 26,234 |
Ending Balance | (18,434) | (25,309) | (6,305) |
Unrealized Gains and Losses on Available-for-sale Securities [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | 252,731 | 225,448 | 326,449 |
Other comprehensive income (loss) before reclassifications | (98,202) | 27,283 | (101,001) |
Amounts reclassified from accumulated other comprehensive income | 0 | 0 | 0 |
Other comprehensive income (loss) | (98,202) | 27,283 | (101,001) |
Ending Balance | $ 154,529 | $ 252,731 | $ 225,448 |
UNSECURED BORROWINGS (Details)
UNSECURED BORROWINGS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 15, 2016 | ||
Debt Instrument [Line Items] | |||||
Junior subordinated notes maturity term | 30 years | ||||
Face amount of junior subordinated notes | $ 100,000 | ||||
Interest paid on outstanding borrowings | 79,100 | $ 59,700 | $ 71,100 | ||
Borrowings Outstanding | $ 97,986 | $ 97,882 | |||
Effective interest rate | [1] | 8.08% | 8.68% | ||
October 2035 [Member] | |||||
Debt Instrument [Line Items] | |||||
Face amount of junior subordinated notes | $ 35,000 | ||||
Junior subordinated notes, maturity period | Oct. 31, 2035 | ||||
Borrowings Outstanding | $ 34,234 | $ 34,196 | |||
Effective interest rate | [1] | 7.91% | 8.51% | ||
December 2035 [Member] | |||||
Debt Instrument [Line Items] | |||||
Face amount of junior subordinated notes | $ 40,000 | ||||
Junior subordinated notes, maturity period | Dec. 31, 2035 | ||||
Borrowings Outstanding | $ 39,244 | $ 39,202 | |||
Effective interest rate | [1] | 7.68% | 8.64% | ||
September 2036 [Member] | |||||
Debt Instrument [Line Items] | |||||
Face amount of junior subordinated notes | $ 25,000 | ||||
Junior subordinated notes, maturity period | Sep. 30, 2036 | ||||
Borrowings Outstanding | $ 24,508 | $ 24,484 | |||
Effective interest rate | [1] | 8.96% | 8.97% | ||
Junior Subordinated Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest paid on outstanding borrowings | $ 8,400 | $ 8,400 | $ 8,600 | ||
20 Year Floating Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Junior subordinated notes, earliest redemption option exercise date | Sep. 15, 2016 | ||||
Effective interest rate | 7.77% | ||||
[1] | The average borrowing rate for total unsecured borrowings, adjusted for the effects of related Derivatives held for hedging purposes, will decline to 7.77% effective September 15, 2016, coinciding with the 20-year floating rate period of the September 2036 notes. |
DISCLOSURES REGARDING FAIR VA46
DISCLOSURES REGARDING FAIR VALUES OF FINANCIAL INSTRUMENTS - Balance Sheet Location (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Financial assets [Abstract] | ||
Residential mortgage loans | $ 14,154,737 | $ 13,908,104 |
Maximum [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Repurchase arrangements with initial terms in days | 120 days | |
Carrying Amount [Member] | ||
Financial assets [Abstract] | ||
Residential mortgage loans | $ 3,817 | 4,909 |
Lending counterparty investments | 65,002 | 5,000 |
Portfolio-related interest rate swap agreements | 7,720 | 1,657 |
Financial liabilities [Abstract] | ||
Secured borrowings with initial terms of greater than 120 days | 3,246,177 | 2,128,517 |
Unsecured borrowings | 97,986 | 97,882 |
Interest rate swap agreements [Abstract] | ||
Portfolio-related | 1,051 | 6,332 |
Unsecured borrowings-related | 25,010 | 20,702 |
Fair Value [Member] | ||
Financial assets [Abstract] | ||
Residential mortgage loans | 3,900 | 5,000 |
Lending counterparty investments | 65,002 | 5,000 |
Portfolio-related interest rate swap agreements | 7,720 | 1,657 |
Financial liabilities [Abstract] | ||
Secured borrowings with initial terms of greater than 120 days | 3,245,000 | 2,128,400 |
Unsecured borrowings | 77,200 | 100,500 |
Interest rate swap agreements [Abstract] | ||
Portfolio-related | 1,051 | 6,332 |
Unsecured borrowings-related | $ 25,010 | $ 20,702 |
DISCLOSURES REGARDING FAIR VA47
DISCLOSURES REGARDING FAIR VALUES OF FINANCIAL INSTRUMENTS - Fair Value and Related Disclosures for Debt Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Agency Securities Classified as Available-for-sale [Member] | Fannie Mae/Freddie Mac [Member] | ||
Available-for-sale securities disclosure Items [Abstract] | ||
Available-for-sale securities, Amortized Cost Basis | $ 10,331,965 | $ 10,559,231 |
Available-for-sale securities, Gross Unrealized Gains | 166,794 | 243,351 |
Available-for-sale securities, Gross Unrealized Losses | 10,954 | 2,218 |
Available-for-sale securities, Fair Value | 10,487,805 | 10,800,364 |
Agency Securities Classified as Available-for-sale [Member] | Ginnie Mae [Member] | ||
Available-for-sale securities disclosure Items [Abstract] | ||
Available-for-sale securities, Amortized Cost Basis | 3,661,766 | 3,087,570 |
Available-for-sale securities, Gross Unrealized Gains | 11,705 | 16,755 |
Available-for-sale securities, Gross Unrealized Losses | 13,016 | 5,157 |
Available-for-sale securities, Fair Value | 3,660,455 | 3,099,168 |
Residential Mortgage Securities Classified as held-to-Maturity [Member] | ||
Held-to-maturity securities disclosure [Abstract] | ||
Held-to-maturities, Amortized Cost Basis | 2,660 | 3,663 |
Held-to-maturities, Gross Unrealized Gains | 44 | 124 |
Held-to-maturities, Gross Unrealized Losses | 0 | 0 |
Held-to-maturities, Fair Value | $ 2,704 | $ 3,787 |
DISCLOSURES REGARDING FAIR VA48
DISCLOSURES REGARDING FAIR VALUES OF FINANCIAL INSTRUMENTS - Securities in Unrealized Loss Position (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Continuous unrealized loss position, fair value [Abstract] | ||
One year or greater | $ 597,652 | $ 706,839 |
Less than one year | 4,468,844 | 1,095,724 |
Continuous unrealized loss position, Fair Value, Total | 5,066,496 | 1,802,563 |
Continuous unrealized loss position, aggregate loss [Abstract] | ||
One year or greater | 4,259 | 5,320 |
Less than one year | 19,711 | 2,055 |
Unrealized Losses, Total | $ 23,970 | $ 7,375 |
INCOME TAXES - Schedule of Effe
INCOME TAXES - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Effective income tax rate reconciliation [Abstract] | |||
Income taxes computed at the federal statutory rate | $ 37,914 | $ 49,287 | $ 44,270 |
Benefit of REIT status | (37,913) | (49,283) | (44,270) |
Income taxes computed on income of Capstead's sole taxable REIT subsidiary | 1 | 4 | 0 |
Change in net deferred income tax assets | (1) | (4) | 1 |
Other | 0 | 0 | (1) |
Income tax provision | $ 0 | $ 0 | $ 0 |
INCOME TAXES - Components of De
INCOME TAXES - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
INCOME TAXES [Abstract] | ||||
Income taxes paid | $ 0 | $ 0 | $ 0 | |
Components of deferred tax assets and liabilities [Abstract] | ||||
Alternative minimum tax credit | [1] | 1,941 | 1,941 | |
Net operating loss carryforwards | [2] | 57 | 58 | |
Other | 20 | 20 | ||
Deferred tax assets, gross, Total | 2,018 | 2,019 | ||
Deferred income tax liabilities | 0 | 0 | ||
Net deferred tax assets | 2,018 | 2,019 | ||
Valuation allowance | [3] | 2,018 | $ 2,019 | |
Net capital loss carryforwards subject to expiration amount | $ 20,800 | |||
Capital loss carryforwards, expiration date | Dec. 31, 2019 | |||
Operating loss carryforwards subject to expiration amount | $ 3,500 | |||
Operating loss carryforwards, expiration date | Dec. 31, 2019 | |||
[1] | Alternative minimum tax credit carryforwards can be utilized to offset payment of federal income taxes on future taxable income, if any, earned by this subsidiary, subject to certain limitations. | |||
[2] | Excludes $3.5 million in remaining net operating loss carryforwards which expire beginning after 2019. Should these carryforwards be utilized, they will be excluded for purposes of calculating the Company's provision for income taxes. Any such utilization will, however, reduce actual taxes payable. | |||
[3] | Because this subsidiary is not expected to earn significant amounts of taxable income, related net deferred tax assets are fully reserved at December 31, 2015. |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) | Feb. 26, 2016 | May. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jan. 27, 2016 |
Class of Stock [Line Items] | ||||||
Redemption preference premiums paid | $ 0 | $ 0 | $ 19,924,000 | |||
Subsequent Event [Member] | ||||||
Class of Stock [Line Items] | ||||||
Common stock repurchase program | $ 100,000,000 | |||||
Shares repurchased (in shares) | 0 | |||||
Cumulative Redeemable Preferred Stock, Series E [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 | 7.50% | |||||
Redeemable preferred stock, liquidation preference per share (in dollars per share) | $ 25 | |||||
Cash on hand used in capital transactions | $ 42,700,000 | |||||
Net proceeds | $ 164,300,000 | |||||
Convertible Preferred Stock [Member] | ||||||
Class of Stock [Line Items] | ||||||
Cash used for redemption of preferred stock | 207,000,000 | |||||
Redemption preference premiums paid | $ 19,900,000 | |||||
Reduction in income per share (in dollars per share) | $ 0.21 | |||||
Continuous Offering Program [Member] | Cumulative Redeemable Preferred Stock, Series E [Member] | ||||||
Class of Stock [Line Items] | ||||||
Shares (in shares) | 538,000 | 757,000 | 61,000 | |||
Net issue price (in dollars per share) | $ 24.61 | $ 24.01 | $ 23.78 | |||
Net proceeds | $ 13,236,000 | $ 18,180,000 | $ 1,447,000 | |||
Directors And Employees [Member] | ||||||
Class of Stock [Line Items] | ||||||
Additions to common equity capital related to equity-based awards | $ 1,700,000 | $ 1,900,000 | $ 1,800,000 |
COMPENSATION PROGRAMS - Other C
COMPENSATION PROGRAMS - Other Compensation Programs (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Targeted award opportunity on base salary | 125.00% | |||
Short-term incentive compensation program accruals | $ 3,400,000 | |||
Annual incentive compensation expense | 3,400,000 | $ 1,200,000 | $ 2,800,000 | |
DER, issued (in shares) | 90,000 | |||
DER, forfeited (in shares) | 90,000 | |||
Dividend Equivalent Rights Payable | 170,000 | |||
DER expense for the period | $ 746,000 | $ 889,000 | $ 811,000 | |
DER, outstanding (in shares) | 654,000 | 654,000 | 654,000 | |
Long-Term Equity-Based Awards [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common shares available for future issuance (in shares) | 4,397,739 | |||
Share awards vesting period | 3 years |
COMPENSATION PROGRAMS - Schedul
COMPENSATION PROGRAMS - Schedule of Restricted Stock Awards (Details) - USD ($) | Jul. 31, 2014 | Feb. 29, 2016 | Jan. 31, 2016 | Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Total original grants (in shares) | 35,000 | ||||||
Grant date fair value per share (in dollars per share) | $ 11.41 | ||||||
Equity instruments other than options, nonvested, number of shares [Roll Forward] | |||||||
Unvested stock awards outstanding at beginning of period (in shares) | 288,861 | 436,581 | 436,581 | ||||
Grants (in shares) | 35,000 | ||||||
Forfeitures (in shares) | (22,499) | ||||||
Vestings (in shares) | (160,221) | ||||||
Unvested stock awards outstanding at end of period (in shares) | 288,861 | 436,581 | |||||
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) | $ 11.98 | $ 12.29 | $ 12.29 | ||||
Grants (in dollars per share) | 11.41 | ||||||
Forfeitures (in dollars per share) | 12 | ||||||
Vestings (in dollars per share) | 12.71 | ||||||
Unvested stock awards outstanding at end of period (in dollars per share) | $ 11.98 | $ 12.29 | |||||
Common stock dividend payable | $ 25,979,000 | $ 34,054,000 | |||||
Long Term Equity Based Awards [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Total original grants (in shares) | 247,512 | 242,505 | |||||
Grant date fair value per share (in dollars per share) | $ 8.83 | $ 5.66 | $ 12.45 | ||||
Equity instruments other than options, nonvested, number of shares [Roll Forward] | |||||||
Grants (in shares) | 247,512 | 242,505 | |||||
Equity instruments other than options, nonvested, weighted average grant date fair value [Abstract] | |||||||
Grants (in dollars per share) | $ 8.83 | $ 5.66 | $ 12.45 | ||||
Long term incentive compensation expense | $ 818,000 | 582,000 | |||||
Common stock dividend payable | $ 289,000 | $ 213,000 | |||||
Long Term Equity Based Awards [Member] | Subsequent Event [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Total original grants (in shares) | 269,354 | ||||||
Grant date fair value per share (in dollars per share) | $ 8.03 | ||||||
Equity instruments other than options, nonvested, number of shares [Roll Forward] | |||||||
Grants (in shares) | 269,354 | ||||||
Equity instruments other than options, nonvested, weighted average grant date fair value [Abstract] | |||||||
Grants (in dollars per share) | $ 8.03 | ||||||
Long Term Equity Based Awards [Member] | December 2015 [Member] | |||||||
Equity instruments other than options, nonvested, number of shares [Roll Forward] | |||||||
Forfeitures (in shares) | (37,199) | ||||||
Long Term Equity Based Awards [Member] | December 2013 [Member] | |||||||
Equity instruments other than options, nonvested, number of shares [Roll Forward] | |||||||
Forfeitures (in shares) | (36,467) | ||||||
Service-Based Stock Awards [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Total original grants (in shares) | 37,237 | 35,703 | |||||
Grant date fair value per share (in dollars per share) | $ 12.47 | $ 12.34 | |||||
Equity instruments other than options, nonvested, number of shares [Roll Forward] | |||||||
Grants (in shares) | 37,237 | 35,703 | |||||
Equity instruments other than options, nonvested, weighted average grant date fair value [Abstract] | |||||||
Grants (in dollars per share) | $ 12.47 | $ 12.34 | |||||
Service-Based Stock Awards [Member] | Subsequent Event [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Total original grants (in shares) | 67,337 | 61,272 | |||||
Grant date fair value per share (in dollars per share) | $ 9.32 | $ 7.87 | |||||
Equity instruments other than options, nonvested, number of shares [Roll Forward] | |||||||
Grants (in shares) | 67,337 | 61,272 | |||||
Equity instruments other than options, nonvested, weighted average grant date fair value [Abstract] | |||||||
Grants (in dollars per share) | $ 9.32 | $ 7.87 | |||||
Service-Based Stock Awards [Member] | Director Stock Award [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Total original grants (in shares) | 35,000 | ||||||
Grant date fair value per share (in dollars per share) | $ 13.16 | ||||||
Equity instruments other than options, nonvested, number of shares [Roll Forward] | |||||||
Grants (in shares) | 35,000 | ||||||
Equity instruments other than options, nonvested, weighted average grant date fair value [Abstract] | |||||||
Grants (in dollars per share) | $ 13.16 | ||||||
Stock Awards Activity [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Total original grants (in shares) | 125,221 | 114,423 | 121,026 | ||||
Grant date fair value per share (in dollars per share) | $ 12.58 | $ 13.31 | $ 12.01 | ||||
Equity instruments other than options, nonvested, number of shares [Roll Forward] | |||||||
Grants (in shares) | 125,221 | 114,423 | 121,026 | ||||
Equity instruments other than options, nonvested, weighted average grant date fair value [Abstract] | |||||||
Grants (in dollars per share) | $ 12.58 | $ 13.31 | $ 12.01 | ||||
Long term incentive compensation expense | $ 878,000 | $ 1,500,000 | $ 1,800,000 | ||||
Other general and administrative expense | 436,000 | 315,000 | $ 387,000 | ||||
Total of unrecognized compensation expense for unvested stock award | $ 953,000 | ||||||
Compensation cost not yet recognized, period for recognition | 1 year 3 months 18 days | ||||||
Common stock dividend payable | $ 823,000 | $ 1,400,000 | |||||
Stock Awards Activity [Member] | January 2016 [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Total original grants (in shares) | 118,784 | ||||||
Grant date fair value per share (in dollars per share) | $ 12.17 | ||||||
Equity instruments other than options, nonvested, number of shares [Roll Forward] | |||||||
Grants (in shares) | 118,784 | ||||||
Equity instruments other than options, nonvested, weighted average grant date fair value [Abstract] | |||||||
Grants (in dollars per share) | $ 12.17 | ||||||
Stock Awards Activity [Member] | February 2017 [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Total original grants (in shares) | 62,137 | ||||||
Grant date fair value per share (in dollars per share) | $ 11.67 | ||||||
Equity instruments other than options, nonvested, number of shares [Roll Forward] | |||||||
Grants (in shares) | 62,137 | ||||||
Equity instruments other than options, nonvested, weighted average grant date fair value [Abstract] | |||||||
Grants (in dollars per share) | $ 11.67 |
COMPENSATION PROGRAMS - Sched54
COMPENSATION PROGRAMS - Schedule of Stock Option Award Activity (Details) - Employee Stock Options [Member] - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Exercisable option awards outstanding (in shares) | 40,000 | ||
Weighted average strike price (in dollars per share) | $ 11.86 | ||
Exercisable, weighted average remaining contractual term | 2 years 6 months | ||
Exercises (in shares) | 0 | ||
Intrinsic value of option awards exercised | $ 67,000 | $ 26,000 | |
Share awards contractual term | 10 years |
COMPENSATION PROGRAMS - Defined
COMPENSATION PROGRAMS - Defined Contribution Plans (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Defined Contribution Plan Disclosure [Abstract] | |||
Defined contribution plan voluntary contribution based on compensation | 50.00% | ||
Defined contribution plan, maximum annual contributions per employee | 6.00% | ||
Defined contribution plan, employer matching contribution | 3.00% | ||
Defined contribution plan, cost recognized | $ 391,000 | $ 258,000 | $ 320,000 |
QUARTERLY RESULTS (UNAUDITED) -
QUARTERLY RESULTS (UNAUDITED) - Summarized Quarterly Results of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||||||||
QUARTERLY RESULTS (UNAUDITED) [Abstract] | ||||||||||||||||||||
Interest income on residential mortgage investments (before investment premium amortization) | $ 86,250 | $ 83,808 | $ 83,398 | $ 83,723 | $ 82,509 | $ 82,146 | $ 82,233 | $ 81,733 | ||||||||||||
Investment premium amortization | (28,732) | (34,323) | (33,057) | (25,078) | (26,159) | (28,284) | (25,141) | (22,288) | $ (121,190) | $ (101,872) | $ (125,872) | |||||||||
Related interest expense | (23,937) | (22,272) | (20,098) | (19,214) | (18,107) | (16,099) | (15,542) | (15,407) | ||||||||||||
Net interest income (expense) | 33,581 | 27,213 | 30,243 | 39,431 | 38,243 | 37,763 | 41,550 | 44,038 | 122,355 | 153,421 | 140,355 | |||||||||
Other interest income (expense) | [1] | (2,027) | (2,034) | (2,023) | (2,029) | (2,023) | (2,044) | (2,045) | (2,061) | |||||||||||
Other revenue (expense) | (3,197) | [2] | (4,112) | [2] | (3,276) | [2] | (3,445) | [2] | (2,746) | [2] | (3,328) | [2] | (2,941) | [2] | (3,586) | [2] | (14,030) | (12,601) | (14,117) | |
Net income | $ 28,357 | $ 21,067 | $ 24,944 | $ 33,957 | $ 33,474 | $ 32,391 | $ 36,564 | $ 38,391 | $ 108,325 | $ 140,820 | $ 126,487 | |||||||||
Basic and diluted net income per common share (in dollars per share) | $ 0.26 | $ 0.18 | $ 0.22 | $ 0.32 | $ 0.31 | $ 0.30 | $ 0.35 | $ 0.37 | $ 0.97 | $ 1.33 | $ 0.93 | |||||||||
[1] | Consists principally of interest on unsecured borrowings. | |||||||||||||||||||
[2] | Consists of general and administrative expenses, including compensation-related costs, and miscellaneous other revenue (expenses). |