Western Asset Mortgage Capital (WMC) Reports Q3 Core EPS of $0.35

November 2, 2016 4:51 PM EDT
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Western Asset Mortgage Capital (NYSE: WMC) reported Q3 core EPS of $0.35.

"I am pleased to report that we delivered another solid performance in the third quarter, generating an economic return on book value of 7.1% and higher sequential core earnings plus drop income of $14.8 million, or $0.35 per share. We remained focused on our long-term goal of generating strong total return for our shareholders through attractive dividends derived from sustainable core earnings and appreciation in the value of our portfolio. In our view, WMC's strategic advantage in pursuing this goal is its ability to draw on the deep investment experience and team at Western Asset Management Company, our Manager, as well as the breadth of its global investment, risk management, and operational infrastructure," said Jennifer Murphy, Chief Executive Officer of the Company. "Our third quarter dividend of $0.31 per share reflects our commitment to paying an attractive dividend based on the sustainable earnings power of the portfolio balanced with our focus on maintaining greater stability in our book value."

Anup Agarwal, Chief Investment Officer of the Company, commented, "Despite interest rate volatility during the quarter, our portfolio performed well, driven by tightening spreads across all of our sector holdings and a positive contribution from our hedge positions, and as a result, our book value increased sequentially by 4.3%, net of our third quarter dividend. In addition, we increased our Agency RMBS, Whole-Loans and TBA exposure during the third quarter, enabling us to increase our core earnings plus drop income by approximately $2.2 million, or $0.05 per share, when compared to the second quarter 2016."

"We are pleased with our financial results for the quarter and remain optimistic going forward. Our current expectations are for ongoing, yet slow economic growth and a "lower for longer" interest rate environment in the U.S. Given these conditions, we believe that a balanced portfolio consisting of both Agency RMBS and credit-sensitive investments continues to be appropriate. We continually monitor the relative value of opportunities across the broad mortgage universe, in an effort to achieve an optimal risk-adjusted total economic return for our shareholders," Mr. Agarwal concluded.

For earnings history and earnings-related data on Western Asset Mortgage Capital (WMC) click here.

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