<PAGE>
 
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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549

                                   FORM 10-Q

   X    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
 -----  EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED:  MARCH 31, 1997

                                       OR

        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
-----   SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM                 TO
                               ---------------    ------------------

COMMISSION FILE NUMBER:  33-42337

                       CAPSTEAD SECURITIES CORPORATION IV
             (Exact name of Registrant as specified in its Charter)

                  DELAWARE                      75-2390594
         (State or other jurisdiction of      (I.R.S. Employer
         incorporation or organization)       Identification No.)

         2711 NORTH HASKELL, DALLAS, TEXAS          75204
      (Address of principal executive offices)    (Zip Code)

       Registrant's telephone number, including area code (214) 874-2323

The Registrant meets the conditions set forth in General Instruction H(1)(a) and
(b) for Form 10-Q and is therefore filing this Form under the reduced disclosure
format.

Indicate by check mark whether the Registrant (1) has filed all documents and
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  YES  [X]  NO 
                                               -----    -----

                     APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the last practicable date.

Common Stock ($1.00 par value)                           1,000 as of May 8, 1997

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<PAGE>
 
                       CAPSTEAD SECURITIES CORPORATION IV
                                   FORM 10-Q
                      FOR THE QUARTER ENDED MARCH 31, 1997


                                     INDEX



                                                                  PAGE
                                                                  ----
                        PART I.-- FINANCIAL INFORMATION
 
ITEM 1. Financial Statements
 
 Balance Sheet -- March 31, 1997 and December 31, 1996.............  1
 
 Statement of Operations -- Quarter Ended March 31, 1997 and 1996..  2
 
 Statement of Cash Flows -- Quarter Ended March 31, 1997 and 1996..  3
 
 Notes to Financial Statements.....................................  4
 
ITEM 2. Management's Discussion and Analysis of
        Financial Condition and Results of Operations..............  6
 

                         PART II. -- OTHER INFORMATION

ITEM 6. Exhibits and Reports on Form 8-K...........................  7

SIGNATURES.........................................................  8
<PAGE>
 
                        PART I. -- FINANCIAL INFORMATION
                       CAPSTEAD SECURITIES CORPORATION IV
                                 BALANCE SHEET
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)


ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
                                         MARCH 31, 1997     DECEMBER 31, 1996
                                         --------------     -----------------
                                           (UNAUDITED)
<S>                                      <C>                <C>
 
ASSETS
 Mortgage securities collateral              $732,387            $766,812
 Cash and cash equivalents                         44               2,675
 Other assets                                   2,214               2,493
                                             --------            --------
 
                                             $734,645            $771,980
                                             ========            ========
 
LIABILITIES
 Collateralized mortgage securities          $721,063            $754,631
 Accrued expenses                                  32                  30
                                             --------            --------
 
                                              721,095             754,661
                                             --------            --------
 
STOCKHOLDER'S EQUITY
 Common stock - $1 par value,
  1,000 shares authorized,
  issued and outstanding                            1                   1
 Paid-in capital                               14,078              17,713
 Unrealized gain on debt securities             2,153               2,646
 Accumulated deficit                           (2,682)             (3,041)
                                             --------            --------
 
                                               13,550              17,319
                                             --------            --------
 
                                             $734,645            $771,980
                                             ========            ========
</TABLE>

See accompanying notes to financial statements.

                                      -1-
<PAGE>
 
                       CAPSTEAD SECURITIES CORPORATION IV
                            STATEMENT OF OPERATIONS
                                  (UNAUDITED)
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                       QUARTER ENDED MARCH 31
                                      ------------------------
                                          1997        1996
                                      -----------   ----------
<S>                                   <C>           <C>
 
INTEREST INCOME:
 Mortgage securities collateral          $15,748     $22,391
 Receivable from Parent                       38          10
                                         -------     -------
 
  Total interest income                   15,786      22,401
                                         -------     -------
 
Interest expense on collateralized
 mortgage securities                      14,872      21,012
                                         -------     -------
 
   Net interest income                       914       1,389
                                         -------     -------
 
OTHER EXPENSES:
 Management fees                               3           3
 Professional fees and other                  37          34
 Pool insurance                              515         790
                                         -------     -------
 
  Total other expenses                       555         827
                                         -------     -------
 
Net income                               $   359     $   562
                                         =======     =======
 
</TABLE>

See accompanying notes to financial statements.

                                      -2-
<PAGE>
 
                       CAPSTEAD SECURITIES CORPORATION IV
                            STATEMENT OF CASH FLOWS
                                  (UNAUDITED)
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                         QUARTER ENDED MARCH 31
                                                         ----------------------
                                                            1997        1996
                                                         ----------  ---------- 
<S>                                                      <C>         <C>
OPERATING ACTIVITIES:
 Net income                                                $    359   $    562
 Noncash item - amortization of
  discount and premium                                          143        272
 Net change in other assets and
  accrued expenses                                              281        167
                                                           --------   --------
     Net cash provided by operating
      activities                                                783      1,001
                                                           --------   --------
 
INVESTING ACTIVITIES:
 Mortgage securities collateral:
  Principal collections on collateral                        35,169     66,236
  Decrease in accrued interest receivable                       259        513
  Increase in short-term investments                         (1,555)    (1,666)
                                                           --------   --------
     Net cash provided by
      investing activities                                   33,873     65,083
                                                           --------   --------
 
FINANCING ACTIVITIES:
 Collateralized mortgage securities:
  Principal payments on securities                          (33,285)   (64,062)
  Decrease in accrued interest payable                         (367)      (692)
 Capital distributions                                       (3,635)    (1,357)
                                                           --------   --------
     Net cash used by
      financing activities                                  (37,287)   (66,111)
                                                           --------   --------
 
Net change in cash and cash equivalents                      (2,631)       (27)
 
Cash and cash equivalents at beginning
 of period                                                    2,675        469
                                                           --------   --------
Cash and cash equivalents at end of
 period                                                    $     44   $    442
                                                           ========   ========
 
</TABLE>

See accompanying notes to financial statements.

                                      -3-
<PAGE>
 
                       CAPSTEAD SECURITIES CORPORATION IV
                         NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1997
                                  (UNAUDITED)


NOTE A -- BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the quarter ended March 31, 1997 are not necessarily
indicative of the results that may be expected for the calendar year ending
December 31, 1997.  For further information refer to the financial statements
and footnotes thereto included in the Capstead Securities Corporation IV annual
report on Form 10-K for the year ended December 31, 1996.

NOTE B -- DISCLOSURES REGARDING FAIR VALUES OF MORTGAGE SECURITIES COLLATERAL

The estimated fair values of mortgage securities collateral have been determined
using available market information and appropriate valuation methodologies.
However, considerable judgment is required in interpreting market data to
develop these estimates.  In addition, fair values fluctuate on a daily basis.
Accordingly, estimates presented herein are not necessarily indicative of the
amounts that could be realized in a current market exchange.  The use of
different market assumptions and/or estimation methodologies may have a material
effect on estimated fair value amounts.

Fair values are estimated using quoted market prices, when available, including
quotes made by Capstead Mortgage Corporation's lenders in connection with
designating collateral for repurchase arrangements.

The following tables summarize fair value disclosures for mortgage securities
collateral held available-for-sale and held-to-maturity for the periods
indicated (in thousands):
<TABLE>
<CAPTION>
                                  AS OF  MARCH 31, 1997
                      ------------------------------------------
                                  GROSS       GROSS
                                UNREALIZED  UNREALIZED    FAIR
                        COST      GAINS       LOSSES     VALUE
                      --------  ----------  ----------  --------
<S>                   <C>       <C>         <C>         <C>
Available-for-sale    $ 76,805     $ 2,153     $  -     $ 78,958
Held-to-maturity       653,429      12,315      196      665,548
                      --------     -------     ----     --------
                      $730,234     $14,468     $196     $744,506
                      ========     =======     ====     ========
<CAPTION>
                                 AS OF DECEMBER 31, 1996
                      ------------------------------------------
                                  GROSS       GROSS
                                UNREALIZED  UNREALIZED    FAIR
                        COST      GAINS       LOSSES     VALUE
                      --------  ----------  ----------  --------
<S>                   <C>       <C>         <C>         <C>
Available-for-sale    $ 81,539     $ 2,646     $  -     $ 84,185
Held-to-maturity       682,627      14,327      206      696,748
                      --------     -------     ----     --------
                      $764,166     $16,973     $206     $780,933
                      ========     =======     ====     ========
</TABLE>

                                      -4-
<PAGE>
 
The maturity of mortgage securities collateral is directly affected by the rate
of principal prepayments by mortgagors.  In addition, upon redemption of
remaining bonds outstanding pursuant to clean-up calls, released collateral may
be sold.  Such sales are deemed maturities under the provisions of Statement of
Financial Accounting Standards No. 115.  No such redemptions occurred during the
three months ended March 31, 1997 or 1996.

NOTE C -- NET INTEREST INCOME ANALYSIS

The following table summarizes the amount of interest income and interest
expense and the average effective interest rates for mortgage securities
collateral and collateralized mortgage securities for the respective periods
(dollars in thousands):
<TABLE>
<CAPTION>
                                      QUARTER ENDED MARCH 31
                               ------------------------------------
                                     1997               1996
                               -----------------  -----------------
                                        AVERAGE            AVERAGE
                               AMOUNT     RATE    AMOUNT     RATE
                               -------  --------  -------  --------
<S>                            <C>      <C>       <C>      <C>
Interest income on mortgage
 securities collateral         $15,748     8.52%  $22,391     8.50%
Interest expense on
 collateralized mortgage
 securities                     14,872     8.19    21,012     8.10
                               -------            -------  
Net interest                   $   876            $ 1,379
                               =======            =======
 
</TABLE>

The following table summarizes the amount of change in interest income on
mortgage securities collateral and interest expense on collateralized mortgage
securities due to changes in effective interest rates versus changes in volume
for the quarter ended March 31, 1997 compared to the same period in 1996 (in
thousands):
<TABLE>
<CAPTION>
                                      RATE*      VOLUME*       TOTAL
                                      ------     --------     --------
<S>                                   <C>        <C>          <C>
                                                          
Interest income on mortgage                               
 securities collateral                $  58      $(6,701)     $(6,643)
Interest expense on                                       
 collateralized mortgage                                  
 securities                             228       (6,368)      (6,140)
                                      -----      -------      -------
                                                          
                                      $(170)     $  (333)     $  (503)
                                      =====      =======      =======
</TABLE>

* THE CHANGE IN INTEREST DUE TO BOTH VOLUME AND RATE HAS BEEN ALLOCATED TO
  VOLUME AND RATE CHANGES IN PROPORTION TO THE RELATIONSHIP OF THE ABSOLUTE
  DOLLAR AMOUNTS OF THE CHANGE IN EACH.

                                      -5-
<PAGE>
 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS
 
FINANCIAL CONDITION
-------------------

Capstead Securities Corporation IV (the "Company") was incorporated on August
16, 1991, as a special-purpose finance subsidiary of Capstead Mortgage
Corporation ("CMC") and commenced operations on December 23, 1991 with the
issuance of its first collateralized mortgage obligation ("CMO"), Series 1991-
VIII.  As of March 31, 1997, the Company has issued 18 CMOs with an aggregate
initial principal balance of $4,226,812,000, including two CMOs with an
aggregate initial principal balance of $551,537,000, which were recorded as
sales when issued in 1992.

RESULTS OF OPERATIONS
---------------------

Residual investments in CMOs (represented by the difference between the carrying
value of mortgage securities collateral and collateralized mortgage securities
on the balance sheet; also referred to as "CMO Investments") earned $324,000 for
the quarter ended March 31, 1997, compared to $555,000 for the same period in
1996.  Operating results produced by CMO Investments is represented by the
difference between interest income on mortgage securities collateral and
interest expense and professional fees on collateralized mortgage securities and
mortgage pool insurance expense on mortgage securities collateral.

Operating results from CMO Investments declined due primarily to a 30% decrease
in the average holdings of mortgage securities collateral during the first
quarter of 1997 compared to the same period in 1996.  This was a result of run-
off (prepayments and scheduled payments) and the redemption of CMO Series 1991-
VIII, 1992-III and 1992-IX during the fourth quarter of 1996.  Average holdings
of mortgage securities collateral were $740 million for the quarter ended March
31, 1997, compared to $1.1 billion for the corresponding prior year period.  As
a result of lower outstanding balances, income earned from the net interest
spread was lower in the current year.  The run-off rate was 19% during the
quarter ended March 31, 1997, compared to 25% during the same period in 1996.

The following table presents the weighted average yields for the periods shown:
<TABLE>
<CAPTION>
                                         QUARTER ENDED MARCH 31
                                        ------------------------
                                           1997         1996
                                        -----------  -----------
<S>                                     <C>          <C>
 
  Mortgage securities collateral           8.52%        8.50%
  Collateralized mortgage securities       8.19         8.10
                                           ----         ----
                                           
  Net interest spread                      0.33%        0.40%
                                           ====         ====
</TABLE>

Although net interest spreads can fluctuate depending on the timing of the
payoff of collateral and bonds with differing amounts of purchase premium and
bond discounts, the tendency is for CMO net interest spreads to decline as
lower-yielding, shorter-term CMO bonds are paid off prior to longer-term bonds
with relatively higher interest rates.

                                      -6-
<PAGE>
 
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

The Company's primary sources of funds are the receipt of excess cash flows on
CMO Investments (primarily the excess of principal and interest earned on the
mortgage securities collateral including reinvestment proceeds over the
principal and interest payable on the CMOs), proceeds from additional CMO
issuances and occasionally proceeds from the sale of collateral released from
the related CMOs.  In late 1996 the Company redeemed the remaining outstanding
bonds of three series of collateralized mortgage securities (Series 1991-VIII,
1992-III and 1992-IX) totaling $110,802,000 pursuant to clean-up calls.  There
have been no redemptions in 1997.  The fourth quarter 1996 sale of this released
CMO collateral to CMC and excess cash flows from CMO Investments have allowed
the return of $3,635,000 of capital during the three months ended March 31,
1997.  The Company continues to qualify as a real estate investment trust
subsidiary.


                          PART II.-- OTHER INFORMATION


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K:

(a) Exhibits:  None.

    Exhibit 27 Financial Data Schedule (electronic filing only).

(b) Reports on Form 8-K:  None.

                                      -7-
<PAGE>
 
                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                  CAPSTEAD SECURITIES CORPORATION IV



Date:  May 8, 1997         By: /s/ RONN K. LYTLE
                               -----------------------------------------
                               Ronn K. Lytle
                               Chairman and Chief Executive Officer



Date:  May 8, 1997         By: /s/ ANDREW F. JACOBS
                               -----------------------------------------
                               Andrew F. Jacobs
                               Senior Vice President - Control
                                and Treasurer

                                      -8-