Question-and-Answer Session
Operator
(Operator Instructions). Our first question comes from the line of Steve Delaney with JMP Securities. Please proceed with your question.
Steve Delaney - JMP Securities
Good morning, Andy, and congratulations to you and the team on a great quarter.
Andy Jacobs
Thanks Steve.
Steve Delaney – JMP Securities
First thing here, the additional $600 million in swaps that were added subsequent to year-end, I just wanted to confirm that and putting those on, they were related to new investments made in the fourth quarter along with the 900. So I guess the way I’m looking at it is swaps that were added were $1.5 billion and the net portfolio growth in the fourth quarter was like 2.4. So about swaps represented about 60% the [ARMDS] portfolio growth, is that correct?
Andy Jacobs
Well, as I mentioned earlier we are hedging our longer-reset securities for a duration of about a year and quarter. So yes, those were in conjunction with fourth quarter purchases and as well as purchases in the New Year.
Steve Delaney – JMP Securities
Okay, oh, you're saying that some of that 600 had to do with purchases in January as well.
Andy Jacobs
Yes.
Steve Delaney – JMP Securities
Okay, well that's what I was trying to understand, the exact [percent] what securities the swaps were related to, but you would not include the January 28, raise in that or are you speaking to purchases made earlier in January?
Andy Jacobs
We're just hedging our portfolio on a macro basis.
Steve Delaney – JMP Securities
Okay
Andy Jacobs
Our duration gap in line and obviously we know that we have proactively walk-ons in January and February.
Steve Delaney – JMP Securities
Okay and switching to the short reset part of the portfolio. I mean it looks like it still was one of the unique characteristic with Capstead versus your peers. I think it was close to 70% back in September and still over 50% of the book at the end of December. I was just curious if you guys are seeing any changes in consumer behavior. I know in the past you said to close -- like 3:1 and 5:1 are approaching reset, which is a catch on fire in terms of prepaid fees. And given what's going on with home price declines and inside our mortgage credit, I was wondering if you've seen any change of behavior and whether you are expecting to get longer, larger and longer sales that of those resetting average?
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