Capstead Mortgage Corp. (NYSE:CMO) Q3 2019 Earnings Conference Call - Final Transcript

Oct 24, 2019 • 09:00 am ET

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Capstead Mortgage Corp. (NYSE:CMO) Q3 2019 Earnings Conference Call - Final Transcript

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Q & A
Executive
Phillip A. Reinsch

tell you. We're amortizing under our effective yield method with a lifetime speed assumption, and so the level yield calculation pretty much throws out what your amortization is going to do. And that's just how it rose. So you're seeing less -- you're seeing a more -- a less aggressive amortization of our premium than from years ago.

Analyst
Steve Delaney

Right.

Executive
Phillip A. Reinsch

And we think that's appropriate. And...

Analyst
Steve Delaney

Oh, yes, I'm not questioning it. I totally think it's appropriate. And I was just trying to rationalize the two. And what I'm hearing you say, Phil, is while you have a lifetime expectation, you are still going to be impacted in terms of amortization based on actual speed. Is that -- so I think I was...

Executive
Phillip A. Reinsch

That's absolutely right. And that's the way it should be. You've got -- if you're running low or high, that's going to have an incremental impact on your overall effective yield for the life of your investment and will be accounted for in the current period when that occurs.

Analyst
Steve Delaney

Okay. Well, I think I'll follow up when I'm going domestic [Phonetic] I'll follow up with Lance and just see how we can tighten things up. And just -- I said last, but just one final thing. Your swap, your repositioning of your swaps in the quarter, do you have any estimate of what impact that, that had on either GAAP or core earnings?

Executive
Phillip A. Reinsch

Well, we tried to give a data point that would help you get there by indicating what our average fixed swap rate was of 2.14% average fixed, and at the end of the quarter it stood at 2.04%. Now we do have some swaps burning off in the fourth quarter that are at lower levels so that will impact future swap rates as well. But that should be able to help you quantify to some extent.

Analyst
Steve Delaney

Yeah, I've got that in the notes. Okay, thanks for the comments.

Executive
Phillip A. Reinsch

You bet.

Operator
Operator

This concludes the question-and-answer session. I would like to turn the conference back over to Lindsey Crabbe for any closing remarks.

Executive
Lindsey Crabbe

Thanks again for joining us today. If you have further questions, please give us a call. We look forward to speaking with you next quarter.

Operator
Operator

[Operator Closing Remarks]