Western Asset Mortgage Capital (WMC) Reports Q3 EPS of $0.33

Western Asset Mortgage Capital (NYSE: WMC) reported Q3 EPS of $0.33.

"I am pleased to report that we delivered another solid performance in the third quarter, generating core earnings plus drop income of $0.33 per share, as we continue to realize the benefits of our diversified portfolio and differentiated investment strategy," said Jennifer Murphy, Chief Executive Officer of the Company. "Our primary focus continues to be on generating consistent and sustainable core earnings that will support an attractive dividend, while improving the stability of the company\'s book value. Our economic return on book value was 3.1%, an improvement from last quarter and in a market environment that has seen an increase in interest rate volatility. Our dividend has remained consistent at $0.31 per share for ten consecutive quarters and our book value has been generally stable or rising over that period.

"The equity offering we completed in September allowed us to further invest in our target assets, which we believe will enhance the overall earnings potential of the portfolio. The offering also supports our long term goal of growing the company to achieve better scale, which we believe benefits shareholders in a number of ways, including spreading fixed costs over a larger equity base and increasing liquidity," Ms. Murphy added.

Anup Agarwal, Chief Investment Officer of the Company, commented, "Our strong core earnings for the quarter are a reflection of our ongoing shift into credit sensitive investments and shifting away from Agency RMBS, which tends to be more interest rate sensitive. We invested the proceeds from our September equity offering relatively quickly, acquiring more of our target assets. During the quarter we acquired nearly $580 million of credit sensitive investments. These purchases occurred across a number of sub-sectors of the mortgage market, but particularly in Residential Whole and Bridge Loans and Commercial Loans, where we continue to see attractive opportunities. This is consistent with our long-term goal of holding a diversified portfolio of investments that offer what we believe to be the best risk-adjusted returns over our investment horizon.

"Our current expectations are for ongoing economic growth in the U.S. with the potential for modestly higher inflation. Residential and commercial real estate markets across the country remain healthy, based on continued strong employment and high levels of consumer confidence. Against this backdrop, we believe that our strategy of investing across sub-sectors of the mortgage market, particularly in credit-sensitive investments, continues to be appropriate, and in our opinion, positions us well to continue to generate attractive risk-adjusted total economic returns 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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