Before I hand the call over to them, I need to remind you that any forward-looking statements made during today's call are subject to risks and uncertainties we've discussed at length in our annual and quarterly SEC filings. Actual events and results can differ materially from those forward-looking statements. The content of this conference call also contains time-sensitive information that is accurate only as of today, July 25, 2012, and the company undertakes no obligations to make any revisions to the statements or to update these statements to reflect events or circumstances occurring after this conference call. That's it for me. It's Michael Hough.
Michael R. Hough
Good morning. Thanks, everyone, for joining our call today and for your interest in Hatteras. As we typically do, after the prepared remarks, we'll open for Q&A with our entire management team.
I just want to make a couple of quick points here before we get into the nuts and bolts. We generated a solid return for shareholders in the second quarter, with dividends and book value change adding to a total return of about 15% annualized for the quarter. There was some noise around leverage mainly from the capital rates at the end of the first quarter and some isolated bond sales. We'll give more detail on that in a minute.Now before I turn it over to Ben and Ken for that detail, just a little color on the market environment that we're in today. This March, there's been a straight line drop in rates to once again, all-time lows across the curve, which does make the earnings environment certainly more challenging. A 10-year has dropped almost 100 basis points from the highs in March and the entire curve has adjusted to reflect the current economic and global realities. However, the earnings opportunities remain robust, especially considering the almost 0 rate world ramp. The mortgage yield curve is still positive and ARMs remain a very attractive security to leverage and effectively hedge.