Capstead Mortgage Corporation (NYSE: CMO) announced today that the underwriters of its recent public offering of 8 million shares of common stock, which closed on February 1, 2008, have exercised their option to purchase 600,000 additional shares of the total 1.2 million share over-allotment at the public offering price of $15.50 per share less underwriting discounts and commissions. Capstead expects to receive aggregate net proceeds of approximately $8.9 million from the sale of the additional shares, which would bring aggregate net proceeds of the offering to approximately $126.7 million after underwriting discounts, commissions and estimated offering expenses. Capstead expects to close the sale of additional shares on or about Friday, February 8, 2008 subject to the satisfaction of customary closing conditions.

Capstead intends to use the net proceeds from the sale of additional shares to finance purchases of additional adjustable-rate mortgage, or ARM, Fannie-Mae, Freddie Mac or Ginnie Mae-guaranteed residential mortgage-backed securities, on a leveraged basis, and for general corporate purposes.

Bear, Stearns & Co. Inc. and Deutsche Bank Securities Inc. acted as joint book-running managers for the offering, with Keefe, Bruyette & Woods, Inc. and JMP Securities LLC acting as co-managers.

All of the shares are being offered by Capstead from its existing shelf registration statement. This press release shall not constitute an offer to sell or a solicitation of an offer to buy shares of common stock, nor shall there be any sale of shares of common stock in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

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 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 securities carry an actual or 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.