Western Asset Mortgage Capital Corporation Announces Fourth Quarter And Full Year 2017 Results

PASADENA, Calif., March 5, 2018

Fourth Quarter 2017 Highlights

• December 31, 2017 book value per share of $11.15, net of fourth quarter common dividend of $0.31 per share declared on December 21, 2017.
• GAAP net income of $21.4 million, or $0.51 per basic and diluted share.
• Core earnings plus drop income of $13.0 million, or $0.31 per basic and diluted share.^1,2
• Economic return on book value was 5.3%^1,3 for the quarter.
• 1.79% annualized net interest margin on our investment portfolio. ^1,4
• Issued $115.0 million aggregate principal amount of 6.75% convertible senior unsecured notes, which included the underwriter's $15.0 million over-allotment.
• 7.2x leverage as of December 31, 2017 (7.5x leverage when adjusted for net TBA positions).
• Acquired $254.0 million in target assets, including $195.5 million credit sensitive assets.
• Repurchased 125,722 common shares at an average price of $9.80 per share.

Full Year 2017 Highlights

• Full year book value per common share increased by $0.88 per share to $11.15, net of annual dividends.
• Maintained a consistent $0.31 per share quarterly common dividend throughout 2017 for total annual common dividends of $1.24 per share.
• GAAP net income of $85.1 million, or $2.03 per basic and diluted share.
• Core earnings plus drop income of $50.2 million, or $1.20 per basic and diluted share.^1,2
• Economic return on book value was 20.6%^1,3 for the year.
• 2.06% annualized net interest margin. ^1,4
• Repositioned our investment portfolio:
• Acquired $1.8 billion in Agency CMBS and $402.7 million credit sensitive assets.
• Reduced Agency RMBS exposure by $622.5 million and legacy Non-Agency exposure by $246.0 million.
• Restructured our hedge positions, reducing our swap related interest expense by 48.3% year-over year.
• Recorded total expenses of $17.8 million, a year-over-year decrease of $3.5 million or 16.3%.

1	Non – GAAP measure.
2	Drop income is income derived from the use of 'to-be-announced' forward contract ("TBA") dollar roll transactions which is a component of our gain (loss) on derivative instruments on our consolidated statement of operations, but is not included in core earnings. Drop income was approximately $181 thousand and $1.9 million for the three months and the year ended December 31, 2017, respectively. ARIVA.DE Börsen-Geflüster Kurse Western Asset Mortgage Capital Corp -   0,00%
3	Economic return is calculated by taking the sum of: (i) the total dividends declared; and (ii) the change in book value during the period and dividing by the beginning book value.
4	Includes interest-only securities accounted for as derivatives, total return swap and the cost of interest rate swaps.

MANAGEMENT COMMENTARY

"As we look back on 2017, we delivered an exceptional fourth quarter and full year, generating an economic return on book value of 5.3% for the fourth quarter and 20.6% for the year, driven by strong consistent quarterly earnings and an increase in our book value of 8.6% for the year," said Jennifer Murphy, Chief Executive Officer of the Company. "We are continuing to reap the benefits of our repositioned and diversified portfolio and our focus on achieving operational efficiencies. Our ability to draw upon 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 continued to enable us to deliver on our primary goal of providing our shareholders with an attractive dividend that is supported by sustainable core earnings, as well as the potential for appreciation in the value of our portfolio. In 2018, we will continue to focus on the objectives of maintaining strong core earnings while preserving our book value through portfolio diversification and risk management, with the overriding goal of providing our shareholders with an attractive risk-adjusted total economic return."

Anup Agarwal, Chief Investment Officer of the Company, commented, "Our strong performance, for 2017, was driven by contributions across our holdings and reflects the benefit of our strategy of investing in a diversified portfolio in a number of subsectors of the mortgage market. In late 2016 and throughout 2017,  we implemented the repositioning of our portfolio with the primary objective of reducing our exposure to Agency RMBS and redeploying our capital into sectors that we believed provided more attractive risk-adjusted returns, which included Agency CMBS and credit sensitive investments, such as residential whole and bridge loans, re-performing loans that are packaged in well-structured securitization and commercial mezzanine loans, including junior tranches of Non-Agency CMBS. In 2018, under current market conditions we expect to look to add more credit sensitive investments, while continuing to reduce our Agency RMBS exposure.  Our strategy paid off in 2017 and although of course there are no guarantees we believe that it will do so in 2018 as well, despite the recent volatility seen in the broader fixed income markets. We believe that investing in a diversified portfolio across a number of sub-sectors of the mortgage market is appropriate in this environment, and in our opinion, positions us well to continue generating attractive risk-adjusted returns for our shareholders."

2017 Quarterly Results

The below table reflects a summary of our operating results (dollars in thousands, except per share data):

	For the Three Months Ended
GAAP Results	December 31, 2017				September 30, 2017				June 30, 2017				March 31, 2017
Net Interest Income	$	18,012			$	18,565			$	19,648			$	19,693
Other Income (Loss):
Realized gain (loss) on sale of investments, net	(2)				1,830				(2,488)				21,258
Other than temporary impairment	(2,972)				(7,225)				(6,579)				(6,097)
Unrealized gain (loss), net	(6,730)				5,249				35,017				(5,140)
Gain (loss) on derivative instruments, net	19,327				7,217				(18,555)				(4,697)
Other, net	190				216				222				403
Other Income (loss)	9,813				7,287				7,617				5,727
Total Expenses	4,206				4,240				4,466				4,866
Income (loss) before income taxes	23,619				21,612				22,799				20,554
Income tax provision (benefit)	2,215				(1,155)				2,115				312
Net income (loss)	$	21,404			$	22,767			$	20,684			$	20,242
Net income (loss) per Common Share – Basic/Diluted	$	0.51			$	0.54			$	0.49			$	0.48
Non-GAAP Results
Core earnings plus drop income(1)	$ Werbung Mehr Nachrichten zur Western Asset Mortgage Capital Corp Aktie kostenlos abonnieren E-Mail-Adresse Bitte überprüfe deine die E-Mail-Adresse. Benachrichtigungen von ARIVA.DE (Mit der Bestellung akzeptierst du die Datenschutzhinweise) -1 Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink. Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte. Andere Nutzer interessierten sich auch für folgende News 24.04.24 - PR Newswire Oxford Instruments Plc - Holding(s) in Company 24.04.24 - PR Newswire Cohen & Steers Capital Management - Form 8.3 - Tritax Big Box REIT plc 24.04.24 - PR Newswire Boeing Company - First Quarter Financial Results Solarboom 2024:    5 Gründe die für diese Aktie sprechen… weiterlesen» Anzeige wo-site-teaser-box-16746_site-teaser-box_2024-04-24_08%253A00%253A00_2024-04-25_09%253A00%253A59