Exhibit 99.2
2Q 2012
ABOUT US
Capstead is based in Dallas, Texas and is listed on the New York Stock Exchange (symbol CMO). Having been formed in 1985, we hold the distinction of being the old est of the publicly-traded mortgage REITs.
Proven Strategy
We in vest in a leveraged portfolio of residential adjustable-rate mortgage (“ARM”) securities issued and guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae.
Our investment strategy differentiates us from our peers because ARM securities reset to more current interest rates within a relatively short period of time allowing 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.
Quality Assets
Agency-guaranteed residential mortgage securities are considered to have little, if any, credit risk, particularly given federal government support for Fannie Mae and Freddie Mac. These mortgage investments are highly liquid and can be financed with multiple funding providers through standard repurchase arrangements.
Conservatively Financed
We prudently leverage our portfolio to provide financial flexibility needed to successfully manage through periods of changing market conditions, and we have long-standing relationships with numerous lending counterparties. Further, our use of interest rate swap agreements helps mitigate the effects of rising short-term interest rates.
Experienced Management in a Stockholder Friendly Structure
Our management team has 85 years of combined mortgage finance industry experience. 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.
Long-Term
Investment Capital
(in millions)
Portfolio Leverage*
Total Assets
(in millions)
Long-term Unsecured Borrowings, net
Preferred Stock, recorded amount
Common Stock
Common Stock
$ 1,580
1,393 $100
$ 1,114 1,127 $189
$ $
$ 860
$1,291
08 09 10 11 12*
*As of June 30, 2012
$12.73 billion
$1.58 billion
8.05:1
Portfolio Leverage
Repurchase Arrangements and Similar Borrowings divided by Long-Term Investment Capital
08 $7,729 (in Total
millions
09 $8,629) Assets
10 $8,999
11 $12,845
12* $14,411
Capstead Mortgage Corporation
8401 North Central Expressway • Suite 800 Dallas, Texas 75225-4410 www.capstead.com
2Q 2012
SECOND QUARTER HIGHLIGHTS
Reported earnings of $43.3 million, or $0.40 per diluted common share.
Declared second quarter dividend of $0.40 per common share.
Book value in creased by $0.19 to $13.2 3 per common share at June 30, 2012.
In creased investment portfolio by $787 million to $13.80 billion at June 30, 2012.
Portfolio leverage remained unchanged at 8.05 times long-term investment capital.
Total financing spreads averaged 1.37%, a decrease of 15 basis points.
Raised $62 million in new common equity capital during the quarter.
Operating costs as a percentage of average long-term investment capital decreased 13 basis points to 1.06%.
QUARTERLY RESULTS
June | 30, March 31, Dec. 31, Sept. 30, June 30, |
(In thousands, except per share data) 2012 2012 2011 2011 2011
Interest in come $ 65,963 $ 65,883 $ 63,981 $ 62,949 $ 63,194
Interest expense* (18,638) (1 6,290) (1 7,743) (17,9 30) (15,894)
Net interest margin 47,325 49,593 46,238 45,019 47,300
Miscellaneous other revenue (expense) 78 (104) (32) (45) (534)
Incentive compensation (1,295) (1,538) (1,548) (1,429) (1,487)
Salaries and benefits (1,682) (1,827) (1,698) (1,631) (1 ,672)
Other general and administrative expense (1,091) (954) (992) (911) (1 ,066)
(3,990) (4,423) (4,270) (4,016) (4,759)
Net income 43,335 45,170 41,968 41,003 42,541
Diluted earnings per common share 0.4 0 0.44 0.43 0.43 0.48
Common dividends per share 0.4 0 0.43 0.43 0.44 0.48
New equity capital 62,633 63,333 39,159 54,197 83,453
Common shares outstanding (EOQ) 97,456 92,951 88,287 85,256 81,311
* Including $2.2 million of interest charges on unsecured borrowings for each period presented.
Firm Rating*
B. Riley & Co. Buy
Compass Point Research Neutral
Deutsche Bank Hold
FBR Capital Markets Outperform
JMP Securities LLC Buy
Keefe, Bruyette & Woods Outperform
Macquarie Outperform
RBC Capital Markets Sector perform
Sterne Agee Neutral
Stifel Nicolaus Buy
Wells Fargo Market Weight
Wunderlich Buy
Ownership % of Shares
Institution Outstanding**
BlackRock Fund Advisors 5.56
Wells Capital Management In c. 4.41
Vanguard Group In c. 3.92
Thornburg Investment Management In c 3.08
Clough Capital Partners LP 2.58
Jennison Associates LLC 2.35
State Street Global Advisors In c. 1.91
Northern Trust Global Investments Ltd. 1.82
JPMorgan Asset Management 1.81
Thompson Siegel & Walmsley LLC 1.62
Common Stock Information
NYSE Ticker: CMO
Price as of 8/10/12: $13.86
52-wk High/Low: $14.29 / $10.00
2Q Dividend: $0.40
Dividend yield: 11.5%
(based on annualized 2Q dividend)
2Q Avg Daily Vol: 864,000 shares
Series A/Series B
Preferred Stock Info
NYSE Ticker: CMOPRA / CMOPRB
Prices as of 8/10/12: $23.63 / $15.75
Redemption Price: $16.40 / $12.50
Liquidation Preference: $16.40 / $11.38
Conversion Ratio: 1.6574 / 0.6403
Annualized Dividend: $1.60 / $1.26
Dividend yield: 6.8% / 8.0%
Continuous Offering Program
When conditions warrant, we make
use of an at-the-market, continuous
offering program to raise additional
equity capital.
Total Average Financing Spreads
(in basis points)
223
174
159 156
137
FY FY FY FY Q2
08 09 10 11 12*
*As of June 30, 2012
** % based on available filings as of August 14, 2012 and shares outstanding as of June 30, 2012.
Capstead Mortgage Corporation
8401 North Central Expressway • Suite 800 • Dallas, Texas 75225-4410 800.358.2323 • invrel@ capstead.com • www.capstead.com
