Capstead Mortgage Corporation Declares a $0.59 Second Quarter 2008 Common Dividend.

DALLAS -- Capstead Mortgage Corporation (NYSE: CMO) announced today that it will pay a second quarter 2008 dividend of 59 cents per common share payable on July 21, 2008 to stockholders of record as of June 30, 2008.

Commenting on the current dividend and market conditions, Andrew F. Jacobs, President and Chief Executive Officer, said, "We are pleased to increase our common dividend by over 13% to $0.59 per share for the second quarter. We anticipate reporting meaningful increases in net interest margins and financing spreads for the second quarter over the immediately preceding quarter as our portfolio continues to benefit from lower borrowing rates and a relatively benign mortgage prepayment environment.

"Conditions in the credit markets have improved considerably since early March with ample financing currently available via repurchase arrangements to support conservatively leveraged portfolios of short-duration agency-guaranteed mortgage pass-through securities. Having reduced our current portfolio leverage to approximately eight times our long-term investment capital by the end of April, we have available significant capital resources to utilize should credit market conditions weaken. We intend to continue to execute our core investment strategy of conservatively managing a leveraged portfolio of agency-guaranteed residential adjustable-rate mortgage ("ARM") securities that can produce attractive risk-adjusted returns over the long term while reducing but not eliminating sensitivity to changes in interest rates."

About Capstead

Capstead Mortgage Corporation, formed in 1985 and based in Dallas, Texas, is a self-managed real estate investment trust for federal income tax purposes. Capstead's core strategy is managing a leveraged portfolio of residential mortgage pass-through securities consisting almost exclusively of ARM securities issued and guaranteed by government-sponsored entities, either Fannie Mae or Freddie Mac, or by an agency of the federal government, Ginnie Mae. Agency-guaranteed residential mortgage pass-through securities carry an implied AAA credit rating with limited, if any, credit risk. Capstead may also augment its core portfolio with investments in credit-sensitive commercial real estate-related assets.

Forward-looking Statements

This document contains "forward-looking statements" (within the meaning of the Private Securities Litigation Reform Act of 1995) that inherently involve risks and uncertainties. Capstead's actual results and liquidity can differ materially from those anticipated in these forward-looking statements because of changes in the level and composition of the Company's investments and other factors. As discussed in the Company's filings with the Securities and Exchange Commission, these factors may include, but are not limited to, changes in general economic conditions, the availability of suitable qualifying investments from both an investment return and regulatory perspective, the availability of new investment capital, fluctuations in interest rates and levels of mortgage prepayments, deterioration in credit quality and ratings, the effectiveness of risk management strategies, the impact of leverage, liquidity of secondary markets and credit markets, increases in costs and other general competitive factors. In addition to the above considerations, actual results and liquidity related to investments in loans secured by commercial real estate are affected by borrower performance under operating and/or development plans, lessee performance under lease agreements, changes in general as well as local economic conditions and real estate markets, increases in competition and inflationary pressures, changes in the tax and regulatory environment including zoning and environmental laws, uninsured losses or losses in excess of insurance limits and the availability of adequate insurance coverage at reasonable costs, among other factors.