Capstead Mortgage (CMO) 8-K Cautionary Statement Concerning Forward-looking Statements

CAPSTEAD

Information as of September 30, 2011

Investor Presentation

Exhibit 99.1

Safe Harbor Statement -

Private Securities Litigation Reform Act of 1995

Cautionary Statement Concerning Forward-looking Statements

This

document

contains

“forward-looking

statements”

within

the

meaning

of

the

Private

Securities

Litigation

Reform

Act

of

1995.

Forward-looking

statements

include,

without

limitation,

any

statement

that

may

predict,

forecast,

indicate

or

imply

future

results,

performance

or

achievements,

and

may

contain

the

words

“believe,”

“anticipate,”

“expect,”

“estimate,”

“intend,”

“project,”

“will

be,”

“will

likely

continue,”

“will

likely

result,”

or

words

or

phrases

of

similar

meaning.

Forward-looking

statements

are

based

largely

on

the

expectations

of

management

and

are

subject

to

a

number

of

risks

and

uncertainties

including,

but

not

limited

to,

the

following:

In

addition

to

the

above

considerations,

actual

results

and

liquidity

are

affected

by

other

risks

and

uncertainties

which

could

cause

actual

results

to

be

significantly

different

from

those

expressed

or

implied

by

any

forward-looking

statements

included

herein.

It

is

not

possible

to

identify

all

of

the

risks,

uncertainties

and

other

factors

that

may

affect

future

results.

In

light

of

these

risks

and

uncertainties,

the

forward-looking

events

and

circumstances

discussed

herein

may

not

occur

and

actual

results

could

differ

materially

from

those

anticipated

or

implied

in

the

forward-looking

statements.

Forward-looking

statements

speak

only

as

of

the

date

the

statement

is

made

and

the

Company

undertakes

no

obligation

to

update

or

revise

any

forward-looking

statements,

whether

as

a

result

of

new

information,

future

events

or

otherwise.

Accordingly,

readers

of

this

document

are

cautioned

not

to

place

undue

reliance

on

any

forward-looking

statements included herein.

–

changes in general economic conditions;

–

fluctuations in interest rates and levels of mortgage

prepayments;

–

the effectiveness of risk management strategies;

–

the impact of differing levels of leverage employed;

–

liquidity of secondary markets and credit markets;

–

the availability of financing at reasonable levels and terms to

support investing on a leveraged basis;

–

the availability of new investment capital;

–

the availability of suitable qualifying investments from both

an investment return and regulatory perspective;

–

changes in legislation or regulation affecting the GSEs and

similar federal government agencies and related guarantees;

–

changes in legislation or regulation affecting exemptions for

mortgage REITs from regulation under the Investment

Company Act of 1940;

–

deterioration in credit quality and ratings of existing or future

issuances of GSE or Ginnie Mae Securities; and

–

increases in costs and other general competitive factors.

2

Company Summary

Proven Strategy

Experienced

Management Team

Aligned with

Stockholders

Overview of Capstead Mortgage Corporation

•

Founded in 1985, Capstead is the oldest publicly-traded Agency mortgage REIT.

•

At September 30, 2011, we had a total investment portfolio of $12.24 billion, supported by long-

term investment capital of $1.35 billion levered 8.21 times.*

•

Our five-year compound annual total return of 19.8% exceeds that of most of our peers.**

•

We invest exclusively in residential adjustable-rate mortgage (ARM) securities issued and

guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae.  Agency-guaranteed mortgage securities

are considered to have little, if any, credit risk.

•

Our focus on short-duration ARM securities augmented with interest rate swap agreements

differentiates us from our peers because ARM securities reset to

more current interest rates within

a relatively short period of time.  This allows for the recovery

of financing spreads diminished

during periods of rising interest rates and smaller fluctuations

in portfolio values from changes in

interest rates compared to fixed-rate mortgage securities.  With this strategy, Capstead  is

recognized as the most defensively-positioned Agency mortgage REIT.

•

Our prudently leveraged portfolio provides financial flexibility

to manage changing market

conditions.

•

Our executive officers have over 80 years of combined mortgage finance industry

experience, including 75 years at Capstead.

•

We are self-managed with low operating costs and rely heavily on performance-based

compensation.  This structure greatly enhances the alignment of management interests

with those of our stockholders.

3

*   Long-term investment capital includes stockholders’

equity and unsecured borrowings, net of investments in related unconsolidated affiliates.

**  Compound annual growth rate is based on cumulative total returns assuming an investment in Capstead was made September 30, 2006 and dividends were reinvested.

Market Snapshot

(dollars in thousands, except per share amounts)

4

Capstead’s Prudent Use of Leverage

5

**

Borrowings under repurchase arrangements divided by long-term investment capital.

During the third quarter of 2011 we increased our portfolio leverage modestly to approximately 8.21 to one.  In

our view, borrowing at current levels represents an appropriate and prudent use of leverage for an agency-

guaranteed ARM securities portfolio in today’s market conditions. 

Through the first three quarters of 2011 we raised $195 million in new common equity capital and $3 million in

Series B preferred equity capital using our at-the-market continuous offering program.

($ in millions)

Portfolio Leverage*

Long-Term Investment Capital

$661

$860

$1,114

$1,127

$1,194

$1,297

$1,351

79%

78%

77%

75%

75%

67%

58%

14%

15%

16%

16%

21%

27%

13%

8%

8%

15%

12%

9%

9%

8%

$

$250

$500

$750

$1,000

$1,250

12/31/07

12/31/08

12/31/09

12/31/10

3/31/11

6/30/11

9/30/11

Common Stock

Preferred Stock

Trust Prefered Securities, net

9.84x

7.85x

6.67x

6.91x

7.91x

8.05x

8.21x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

12/31/07

12/31/08

12/31/09

12/31/10

3/31/11

6/30/11

9/30/11

$100

$182

$1,069

Common Stock

Preferred Stock

Trust Preferred Securities, net

36%

64%

27%

73%

Capstead’s Proven Short-Duration Investment Strategy

6

As of September 30, 2011

As of September 30, 2011

Low

risk

agency-guaranteed

residential

ARM

securities

financed

primarily

with

30-90

day

“repo”

borrowings,

augmented

with

two-year

interest

rate

swap

agreements

for

hedging

purposes.

Residential ARM Securities Portfolio

Repurchase Arrangements & Similar Borrowings

Total: $11.09 billion

*    Based on fair market value as of the indicated balance sheet date. 

Total: $12.24 billion*

•

Most of our securities are backed by well-seasoned mortgage

loans with coupon interest rates that reset at least annually or

begin doing so after an initial fixed-rate period of five years or

less.

•

We have long-term relationships with numerous lending

counterparties.  As of September 30, 2011, we had borrowings

outstanding with 25 counterparties with exposure to any single

counterparty limited to 4.1% or less of long-term investment

capital.  Exposure to the October 31, 2011 bankruptcy of MF

Global is limited to less than $150,000.

•

Third quarter borrowing rates remained at favorable levels. 

Average repo borrowing rates ended the quarter at 0.27%

(0.54% including related interest rate swaps).

•

At September 30, 2011 we held $4.0 billion notional amount of 

currently-paying

two-year

interest rate swaps requiring fixed rate

payments averaging 0.98% with average maturities of 11

months.  An additional $1.3 billion notional amount of two-year

swaps were held at quarter-end that require fixed rate payments

averaging 0.69% for two-year periods that commence on various

dates between October 2011 and April 2012.

•

The duration of our investment portfolio and related ‘repo’

borrowings was approximately 10¼

months and 7¼

months,

respectively, at September 30, 2011.  This  resulted in a net

duration

gap

of

approximately

3

months.

Duration

is

a

measure

of market price sensitivity to interest rate movements.

Longer-to-Reset

ARMs

$3.30

Billion

Current-Reset

ARMs

$8.94 Billion

Borrowings Hedged with

Currently-Paying

Interest Rate Swaps

$4.00 Billion

Unhedged

Borrowings

$7.09

Billion

Capstead’s Stockholder Friendly Structure

7

Quarter

Nine Months

Ended

Ended

Sept. 30, 2011*

Sept. 30, 2011*

Compensation-related expenses:

  Fixed:

Salaries and related deferred compensation match,

payroll taxes, insurance and other benefits

_0.25%

_0.29%

  Variable:

Incentive Compensation

**

0.42

0.44

72% and 71% of quarter and

Dividend Equivalent Rights

0.08

0.08

year-to-date compensation-related

Performance Stock Awards

0.11

0.12

expenses, respectively, were

Related deferred compensation match and payroll taxes

0.04

0.05

performance-based

0.65

0.69

0.90

0.98

Other platform expenses

0.26

0.31

         1.16%

         1.29%

*

Expressed as a percentage of average long-term investment capital (LTIC). 

**

Incentive compensation is based on a 10% participation in returns on LTIC in excess of benchmark returns (greater of 10% or the average 10-year Treasury rate

plus 2.0%), capped at 50 basis points of LTIC and subject to Compensation Committee discretion.

•

Self-managed with low operating costs.

•

Our board of directors requires management to hold a significant

amount of CMO stock based on a

multiple of each executive’s base salary.  Currently approximately 1.5% of outstanding shares are held

by executive management and the board of directors.

•

Pay structure is variable through compensation elements that focus on “pay for performance.”

•

Management is incented to grow the Company by issuing common equity capital when it is accretive to

book value and earnings, rather than to increase compensation or

external management fees.

•

Bottom line: management prospers when stockholders prosper.

Capstead’s Third Quarter 2011 Highlights

•

Earnings of $41.0 million or $0.43 per diluted common share.

•

Our financing spread on mortgage assets* averaged 1.60%, reflecting lower ARM loan coupon interest rate resets and

marginally higher mortgage prepayments.

•

Our book value increased $0.04 to $12.50 per common share.

•

We raised $54 million in new equity capital using our at-the-market continuous offering program contributing $0.04 to the

increase in book value per common share.

•

Our investment portfolio increased 7% or $816

million to $12.24 billion and our portfolio leverage increased modestly to 8.2

times our long-term investment capital.

•

Operating expense as a percentage of long-term investment capital averaged 1.16%.

•

Comments from our October 26, 2011 earnings press release:

“Market conditions remain favorable for investing in agency-guaranteed residential ARM securities on a leveraged basis, with

attractive risk-adjusted returns achievable in today’s stable financing environment.  During the third quarter we increased our portfolio

by 7%, deploying $54

million in new equity capital raised under our continuous offering program.  Portfolio leverage increased by a

more modest 2% to 8.21 times our long-term investment capital.

“Mortgage prepayments during the third quarter remained at favorable levels, albeit somewhat higher than what we experienced

during the previous quarter.  This reflects the factors we articulated in our second quarter earnings release, namely, elevated

prepayment rates on newer originations as a result of declining mortgage interest rates, while prepays on more seasoned securities

will continue to be suppressed by low housing prices and credit problems being experienced by many of these borrowers.

“The fundamental difference between our investment portfolio and those of our peers is our focus on investing solely in ARM

securities.  At quarter-end these securities were backed by mortgages requiring borrowers to make payments predicated on rates

averaging a relatively low 3.60%. Additionally, 73% of our portfolio was invested in ARM securities backed by mortgage loans that will

reset in rate in less than eighteen months, typically to a lower

interest rate in today’s environment. As a result, most borrowers with

mortgage loans underlying securities in our portfolio lack the ability to meaningfully lower their mortgage payments even if they can

overcome the other impediments to refinancing mentioned above.  For these reasons, we expect prepays to remain largely in check in

the fourth quarter.**

“With the lackluster performance of the economy and global economic headwinds, we believe the current interest rate environment

will likely persist for some time.  If this proves to be the case, we anticipate portfolio yields on our current-reset ARM securities will

continue trending lower as coupon interest rates on the underlying mortgage loans reset to lower rates.  We also expect that borrowing

rates will remain relatively low with declining hedging costs providing some offset to declining portfolio yields.”

8

*  See page 16 for discussion of use of financing spread on mortgage assets, a non-GAAP financial measure.

**  Portfolio runoff averaged 19.3% on an annualized basis during the third quarter (a constant prepayment rate, or CPR of 16.9%).  October portfolio runoff declined to

18.7% (a 16.3% CPR), and available November runoff information indicates prepays have declined further.

Recent Regulatory Initiatives

9

•

Revisions to the Administration’s Home Affordable Refinancing Program (HARP) may lead to

higher, but still modest, participation levels in this program limited primarily to higher-coupon

mortgages.  Therefore HARP is not expected to meaningfully impact our portfolio’s

prepayment performance.

•

GSE reform efforts appear stalled until after the 2012 elections

with changes expected to take

years to implement.

•

Recently announced SEC review of exclusions for mortgage REITs from regulation under the

Investment Company Act of 1940 (40 Act):

–

Concept Release; Request for Comments (Release No. IC-29778) solicits views about the application of

the 40 Act to mortgage REITs and similar companies, including “suggestions on the steps the

Commission

should

take

to

provide

greater

clarity,

consistency

or

regulatory

certainty”

with

respect

to

past exclusionary rulemaking under Section 3(c)5(C).  The Release represents a potential precursor to

new rulemaking by the SEC that could limit the ability of mortgage REITs to be excluded from regulation

under the 40 Act.

–

We believe that the process of codifying the Commission’s rulemaking over the last 50 years into clear

and comprehensive guidelines could potentially solidify and expand the REIT industry’s critical role in

facilitating capital formation for residential housing.  However, should the SEC pursue rulemaking that

would require mortgage REITs to register as investment companies

under the 40 Act, our use of

leverage would be sharply curtailed absent congressional intervention.

Appendix

CAPSTEAD

10

*

*

*

*

*

2.1 7%

2.36%

2.60%

4.1 3%

5.22%

5.64%

2.38%

0.57%

3.53%

5.1 2%

1 .73%

0.59%

0.66%

   0.55%

1 .60%

0.52%

1 .69%

2.40%

1 .94%

1 .77%

1 .83%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

12/31/07

12/31/08

12/31/09

12/31/10

3/31/11

6/30/11

9/30/11

Yield

Borrowing Rate

Financing Spread

$7.04

$8.07

$8.52

$10.43

$11.42

$12.24

79%

88%

77%

60%

51%

78%

73%

27%

21%

12%

23%

40%

49%

22%

$7.44

$0.00

$3.00

$6.00

$9.00

$12.00

12/31/07

12/31/08

12/31/09

12/31/10

3/31/11

6/30/11

9/30/11

Current-Reset ARMs

Longer-to-Reset ARMs

Capstead’s Historical Financial Overview

11

*  See page 16 for discussion of use of financing spread on mortgage assets, a non-GAAP financial measure.

**  Defined as annualized net income available to common stockholders divided by average common equity capital.

($ in billions)

Residential ARM Securities Portfolio

Financing Spread on Mortgage Assets*

Book Value Per Common Share

Annualized Return on Average Common Equity**

$9.25

$9.14

$11.99

$12.02

$12.15

$12.46

$12.50

$0.00

$3.00

$6.00

$9.00

$12.00

12/31/07

12/31/08

12/31/09

12/31/10

3/31/11

6/30/11

9/30/11

2.3%

21.0%

14.9%

12.7%

13.7%

15.4%

13.3%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

12/31/07

12/31/08

12/31/09

12/31/10

3/31/11

6/30/11

9/30/11

Yield

Borrowing Rate

Financing Spread

Current-Reset ARMs

Longer-to-Reset ARMs

Year ended

Quarter ended

Year ended

Quarter ended

Comparative Balance Sheets

(dollars in thousands, except per share amounts)

12

Comparative Quarterly Income Statements

(dollars in thousands, except per share amounts) (unaudited)

13

Sept. 2011

June 2011

March 2011

Dec. 2010

Sept. 2010

Interest income:

Mortgage securities and similar investments

62,890

$          

63,136

$          

53,141

$          

50,902

$          

40,614

$          

Other

59

58

113

140

111

62,949

63,194

53,254

51,042

40,725

Interest expense:

Repurchase arrangements and similar borrowings

(15,744)

(13,706)

(12,322)

(11,892)

(11,096)

Unsecured borrowings

(2,186)

(2,187)

(2,187)

(2,187)

(2,186)

Other

  -

(1)

(4)

(2)

  -

(17,930)

(15,894)

(14,513)

(14,081)

(13,282)

45,019

47,300

38,741

36,961

27,443

Other revenue (expense):

Miscellaneous other revenue (expense)

(109)

(599)

(218)

(174)

(427)

Incentive compensation

(1,429)

(1,487)

(1,233)

(1,327)

(983)

Salaries and benefits

(1,631)

(1,672)

(1,700)

(1,566)

(1,425)

Other general and administrative expense

(911)

(1,066)

(963)

(932)

(999)

(4,080)

(4,824)

(4,114)

(3,999)

(3,834)

Income before equity in earnings of unconsolidated affiliates

40,939

42,476

34,627

32,962

23,609

Equity in earnings of unconsolidated affiliates

64

65

65

65

64

Net income

41,003

$          

42,541

$          

34,692

$          

33,027

$          

23,673

$          

Net income per diluted common share

$0.43

$0.48

$0.41

$0.40

$0.27

Average long-term investment capital

1,350,693

$     

1,253,747

$     

1,158,254

$     

1,123,699

$     

1,110,084

$     

Average balance of mortgage assets

11,609,545

10,601,719

8,993,926

8,110,095

7,313,810

Investment premium amortization

19,672

15,519

12,832

11,098

17,689

Portfolio runoff *

Average financing spread on mortgage assets**

                   1.56

                   35.6%

                   1.60

                   19.3%

                   1.83

                   17.1%

                   1.77

                   19.9%

                   1.89

                   19.4%

*    Represents total runoff (scheduled payments and prepayments).  The constant prepayment rate, or CPR, represents only prepayments and will typically be 150 to 250

basis points lower than the total runoff rate during any given period.

**   See page 16 for discussion of use of financing spread on mortgage assets, a non-GAAP financial measure.

Yield / Cost Analysis

(dollars in thousands, unaudited)

14

Basis

Yield/Cost

Runoff

Basis

Yield/Cost

Runoff

Agency-guaranteed securities:

Fannie Mae/Freddie Mac:

   Fixed-rate

$             4,350

6.66%

11.0%

$             4,549

6.49%

26.5%

   ARMs

10,306,710

2.11

20.2

9,479,889

2.36

17.4

Ginnie Mae ARMs

1,285,708

2.57

11.7

1,104,040

2.54

13.4

11,596,768

2.16

19.3

10,588,478

2.38

17.1

Unsecuritized residential mortgage loans:

Fixed-rate

3,328

6.62

7.1

3,375

6.50

5.1

ARMs

6,100

3.52

7.4

6,482

3.98

26.1

9,428

4.61

7.3

9,857

4.84

20.8

3,349

7.54

3.6

3,384

7.88

10.2

11,609,545

2.17*

19.3

10,601,719

2.38*

17.1

Other interest-earning assets

275,854

0.09

196,281

0.12

11,885,399

2.12

10,798,000

2.34

30-day to 90-day interest rates, as adjusted

     for hedging results

10,806,280

0.57

9,798,257

0.55

Structured financings

3,349

7.54

3,384

7.88

10,809,629

0.57

9,801,641

0.55

Other interest-paying liabilites

96

0.08

3,482

0.10

Unsecured borrowings

103,095

8.49

103,095

8.49

10,912,820

0.65

9,908,218

0.64

Capital employed/Total financing spread

$        972,579

1.47

$        889,782

1.70

Financing spread on mortgage assets**

1.60

1.83

Secured borrowings based on:

Collateral for structured financings

Third Quarter 2011 Average

Second Quarter 2011 Average

*   Includes yield adjustments for investment premium amortization of 68 and 59 basis points, respectively.

**  See page 16 for discussion of use of financing spread on mortgage assets, a non-GAAP financial measure.

*

Fully

indexed

net

weighted

average

coupon,

or

WAC,

represents

the

coupon

upon

one

or

more

resets

using

interest

rates

indices

as

of

September

30,

2011

and

the

applicable                      

net margin.

NOTE:  Excludes $10

million of fixed-rate investments.

Fully

Indexed

Average

Months

Principal

       Cost Basis            

Fair Market

Net

Net

Net

to

Balance

Premiums

($)

%

Value

WAC

WAC*

Margins

Roll

Current-reset ARMs:

Fannie Mae Agency Securities

$

5,807,713

$135,358

$

5,943,071

102.33

$

6,082,778

2.52%

2.28%

1.70%

5.2

Freddie Mac Agency Securities

2,144,227

60,794

2,205,021

102.84

2,257,526

3.31

2.44

1.84

7.1

Ginnie Mae Agency Securities

567,017

10,402

577,419

101.83

585,125

2.69

1.66

1.51

6.8

Residential Mortgage Loans

6,001    

22

6,023    

100.37

6,106

  3.48

   2.38

    2.05

     4.6

8,524,958

206,576

8,731,534

102.42

8,931,535

2.73

2.28

1.72

5.8

Longer-to-reset ARMs:

Fannie Mae Agency Securities

1,613,688

57,374

1,671,062

103.56

1,689,522

3.37

2.63

1.77

47.2

Freddie Mac Agency Securities

835,811

31,304

867,115

103.75

874,323

3.54

2.70

1.87

49.9

Ginnie Mae Agency Securities

697,667

24,854

722,521

103.56

733,866

  3.47

   1.65

   1.51

  40.0

3,147,166

113,532

3,260,698

103.61

3,297,711

  3.44

   2.43

   1.74

   46.3

$11,672,124

$320,108

$11,992,232

102.74

$12,229,246

  2.92

   2.32

   1.73

    16.7

           Gross WAC (paid by borrower)

3.60

Residential ARM Portfolio Statistics

As of September 30, 2011 (dollars in thousands, unaudited)

15

Financing Spread on

Mortgage Assets, 

Total Financing Spread, 

a

Non-GAAP 

a

GAAP Measure

Financial Measure

(a)

Interest

Income

(Expense)

Yield/Cost

Difference

Interest

Income

(Expense)

Yield/Cost

Corresponding

Second Quarter

2011

Yield/Cost

Interest income:

Mortgage assets

$

62,890

2.17%

$

–

$

62,890

2.17%

2.38%

Other interest-earning assets

(b)

59

0.09

(59)

–

–

–

62,949

2.12

(59)

62,890

2.17

2.38

Interest expense:

Secured borrowings (borrowings under

repurchase arrangements)

(15,744)

0.57

–

(15,744)

0.57

0.55

Unsecured borrowings

(c)

(2,186)

8.49

2,186

–

–

–

Other interest-paying liabilities

(d)

–

0.08

–

–

–

–

(17,930)

0.65

2,186

(15,744)

0.57

0.55

Net interest margin/financing spread

$

45,019

1.47

$

2,127

$

47,146

1.60

1.83

(a)

(b)

Other interest-earning assets consist of overnight investments and cash collateral receivable from interest rate swap counterparties.

(c)

Unsecured borrowings consist of junior subordinated notes with original terms of 30 years issued in 2005 and 2006 by Capstead to statutory trusts formed to issue $3.1 million of the

trusts’ common securities to Capstead and to privately place $100.0 million of preferred securities to unrelated third party investors.  Capstead reflects its investment in the trusts as

unconsolidated affiliates and considers the unsecured borrowings, net of these affiliates, a component of its long-term investment capital.

(d)

Other interest-paying liabilities consist of cash collateral payable to interest rate swap counterparties.

Use of Financing Spread on Mortgage Assets,

a Non-GAAP Financial Measure

Third Quarter 2011 (dollars in thousands, unaudited)

16

Net

interest

margin

on

mortgage

assets

and

Financing

spread

on

mortgage

assets

are

non-GAAP

financial

measures

(based

solely

on

interest

income

and

yields

on

the

Company’s

portfolio

of

mortgage

securities,

net

of

borrowings

under

repurchase

agreements).

These

measures

are

similar

to

the

all-inclusive

GAAP

measures,

Total

net

interest

margin

and

Total

financing

spread

(based

on

all

interest-earning

assets

and

all

interest-paying

liabilities).

Experienced Management Team

17

Over 80 years of combined mortgage finance industry experience, including 75 years at Capstead.

Andrew F. Jacobs –

President and Chief Executive Officer, Director

–

Has served as president and chief executive officer since 2003 and has held various executive positions at Capstead since 1988

–

Certified Public Accountant (“CPA”), member of the Board of Governors of the National Association of Real Estate Investment Trusts

(“NAREIT”), chairman of NAREIT’s Council of Mortgage REITs, member of the executive committee of the Chancellors Council of

the University of Texas System, the Executive Council of the Real Estate Finance and Investment Center at the University of Texas

at Austin, the American Institute of Certified Public Accountants (“AICPA”), and the Financial Executive International (“FEI”)

Phillip A. Reinsch

–

Executive Vice President and Chief Financial Officer, Secretary

–

Has

held

various

financial

accounting

and

reporting

positions

at

Capstead

since

1993

–

Formerly employed by Ernst & Young LLP as an audit senior manager focusing on mortgage banking and asset securitization

–

CPA, Member AICPA, FEI

Robert A. Spears

–

Executive Vice President, Director of Residential Mortgage Investments

–

Has served in asset and liability management positions at Capstead since 1994

–

Formerly Vice President of secondary marketing with NationsBanc Mortgage Corporation

Michael W. Brown –

Senior Vice President, Asset and Liability Management, Treasurer

–

Has served in asset and liability management positions at Capstead since 1994

–

MBA, Southern Methodist University, Dallas, Texas