Most recent News Alert: Western Asset Mortgage Capital (NYSE:WMC)

Western Asset Mortgage Capital Corporation (NYSE:WMC) stock raised 1.11% and closed at $9.11 on Monday. The stock opened the session at $9.01 and touched its highest price point at $9.22. Its recent trading capacity is 237082 shares versus to its average trading volume of 312867 shares. The company’s stock’s lowest price point for the session stood at $9.01.WMC traded as low as $ 8.54 in the past 52 weeks, and shares hit its peak level to $10.95.

Western Asset Mortgage Capital Corporation (NYSE:WMC) reported its results for the fourth quarter and the year ended December 31, 2017.

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.
  • Economic return on book value was 5.3% for the quarter.
  • 79% annualized net interest margin on our investment portfolio.
  • Issued $115.0 million aggregate principal amount of 6.75% convertible senior unsecured notes, which included the underwriter’s $15.0 million over-allotment.
  • 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.
  • Economic return on book value was 20.6% for the year.
  • 06% annualized net interest margin.
  • 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%.

Dividend

On December 21, 2017, the Company declared a regular cash dividend of $0.31 per share for each common share. Since its inception in May 2012, the Company has declared and paid total dividends of $15.30 per share in a combination of cash and stock.

MANAGEMENT COMMENTARY

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.”

“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.”

Shares of Western Asset Mortgage Capital Corporation have been recently spotted trading -16.80% off of the 52-week high price. On the other end, company shares have been noted 6.67% away from the low price over the last 52-weeks. 52 week range of the stock remained $ 8.54 – 10.95. Switching over to some distances from popular moving averages, we see that the stock has been recorded -4.91% away from the 50 day moving average and -10.19% away from the 200 day moving average. Moving closer, we can see that shares have been trading 0.18% off of the 20-day moving average.

Warren Becky

Warren Becky

Warren Becky joined us, after more than 10 years of experience in writing financial and business news, most recently as Investment Editor and writer. He also has a vast knowledge of stock trading. He earned bachelor degree from Union College with a focus in Business Administration. Warren is the Senior Editor and market movers section. He also holds an MBA from Penn State University. He has two daughter and two children. Address: 2129 Maud Street, ESKO, Minnesota Email: Warrenbecky@stocksgeeks.com Zip Code: 55733 Contact number: 302-722-7537

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