Capstead Mortgage Corporation Declares Dividends on Its Preferred Stocks.

DALLAS -- The Board of Directors of Capstead Mortgage Corporation (NYSE:CMO) announced today that it will pay the regular quarterly dividend of $0.40 per share on the $1.60 Cumulative Preferred Stock, Series A (NYSE:CMOpA), and the regular monthly dividend of $0.105 per share on the $1.26 Cumulative Convertible Preferred Stock, Series B (NYSE:CMOpB). The dividends are payable on December 30 to stockholders of record as of December 19, 2005.

Holders of the Series A and Series B preferred shares may convert into shares of the Company's common stock at any time. Each Series A Preferred share is currently convertible into 1.5351 shares of common stock. Each Series B Preferred share is currently convertible into 0.5918 shares of common stock. Holders of the Series A and Series B preferred shares are advised to carefully consider whether it is economically advantageous to convert into common shares, considering the conversion ratio relative to the prevailing market prices and/or dividends of both the common and preferred shares.

Any conversion requested after one or more preferred record dates within the quarter and on or before the record date for payment of the quarterly dividend on the common shares, will require the payment to the Company of all such preferred share dividends declared and paid for the corresponding quarter.

Capstead Mortgage Corporation operates as a real estate investment trust earning income from investing in real estate-related assets on a leveraged basis and from other investment strategies.