PR Newswire
PASADENA, Calif., May 7, 2018
PASADENA, Calif., May 7, 2018 /PRNewswire/ -- Western Asset Mortgage Capital Corporation (the "Company" or "WMC") (NYSE: WMC) today reported its results for the first quarter ended March 31, 2018.
FIRST QUARTER 2018 HIGHLIGHTS
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 statements of operations, but is not included in core earnings. Drop income was $1.0 million or $0.02 per share for the three months ended March 31, 2018. |
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. |
5 | Excludes $1.3 billion in a securitized commercial loan of a consolidated variable interest entity. |
MANAGEMENT COMMENTARY
"I am very pleased to report that we delivered an economic return on book value of 4.8% during the first quarter, driven by core earnings plus drop income of $0.34 per share, an increase of 9.7% from the fourth quarter of 2017 and an increase in our book value of 2.0%," said Jennifer Murphy, Chief Executive Officer of the Company. "The significant repositioning of the asset composition of our portfolio that occurred over the course of 2017 and has continued in the first quarter contributed to our strong results, particularly as the fixed income markets have experienced increased volatility. Our first quarter dividend remained stable at $0.31 per share for the eighth quarter in a row, which reflects our commitment to our long-term goal of generating attractive total returns for our shareholders, while also providing for greater book value stability."
Anup Agarwal, Chief Investment Officer of the Company, commented, "Our solid performance for the quarter is a continuation of our portfolio repositioning into credit sensitive investments, as well as taking steps to improve the portfolio's interest rate risk profile by both lowering the duration and decreasing the convexity risk. During the quarter, we acquired $486 million of target assets, including $404 million of credit sensitive investments. These purchases occurred across a number of sub-sectors of the mortgage market, supporting our goal of holding a diversified portfolio of securities that offer what we believe to be the best risk-adjusted returns over our investment horizon."
"Based on current market conditions and our outlook, we will continue to proactively manage our portfolio by monitoring the relative value of opportunities across the broad mortgage universe, in an effort to achieve an optimal risk-adjusted total economic return. We believe this approach is the best way to pursue our objectives of strong core earnings and an attractive dividend and positions us well to continue to create value for our shareholders," Mr. Agarwal concluded.
OPERATING RESULTS
The below table reflects a summary of our operating results:
| For the Three Months Ended | ||||||
GAAP Results | March 31, 2018 | | December 31, 2017 | ||||
| | | | ||||
Net Interest Income | $ | 19,030 | | | $ | 18,012 | |
Other Income (Loss): | | | | ||||
Realized gain (loss) on sale of investments, net | 575 | | | (2) | | ||
Other than temporary impairment | (2,916) | | | (2,972) | | ||
Unrealized gain (loss), net | (68,961) | | | (6,730) | | ||
Gain (loss) on derivative instruments, net | 79,582 | | | 19,327 | | ||
Other, net | 47 | | | 190 | | ||
Other Income (loss) | 8,327 | | | 9,813 | | ||
Total Expenses | 5,315 | | | 4,206 | | ||
Income (loss) before income taxes | 22,042 | | | 23,619 | | ||
Income tax provision (benefit) | 313 | | | 2,215 | | ||
Net income (loss) | $ | 21,729 | | | $ | 21,404 | |
| | | | ||||
Net income (loss) per Common Share – Basic/Diluted | $ | 0.52 | | | $ | 0.51 | |
Non-GAAP Results | | | | ||||
Core earnings plus drop income(1) | $ | 14,149 | | | $ | 12,998 | |
Core earnings plus drop income per Common Share – Basic/Diluted | 0.34 | | | 0.31 | | ||
Weighted average yield(2) | 4.16 | % | | 3.82 | % | ||
Effective cost of funds(3) | 2.50 | % | | 2.22 | % | ||
Annualized net interest margin(2)(3) | 1.90 | % | | 1.79 | % | ||
Annualized CPR on Agency RMBS | 11.0 | % | | 10.0 | % |
| |
(1) | For a reconciliation of GAAP Income to Core earnings, please refer to the Reconciliation of Core Earnings at the end of this press release. |
(2) Werbung Mehr Nachrichten zur Western Asset Mortgage Capital Corp Aktie kostenlos abonnieren
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