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Pasadena’s Western Asset Mortgage Capital Results All Short of Wall Street Expectations

Published on Thursday, May 4, 2017 | 6:10 pm

Pasadena-based Western Asset Mortgage Capital Corp. has posted a first-quarter net income of $20.2 million, after reporting a loss in the same period a year earlier, the company reported Wednesday.

The real estate investment company posted net revenue of $19.69 million in the period. As of March 31, 2017, the Company owned an aggregate investment portfolio totaling $3.0 billion.

Western Asset Mortgage said it had net income of 48 cents per share. Earnings, adjusted for non-recurring gains, came to 22 cents per share, falling short of projected earnings. The average estimate by three analysts surveyed by Zacks Investment Research was for earnings of 31 cents per share.

“I am pleased to report that we delivered an economic return on book value of 4.8% during the first quarter while significantly repositioning our portfolio for improved risk-adjusted returns and greater stability,” said Jennifer Murphy, CEO. “We generated core earnings plus drop income of $0.25 per share, which was impacted by our portfolio repositioning, as we chose to forego some net interest income in order to better position the portfolio to generate higher returns.”

Anup Agarwal, Chief Investment Officer, said the fixed income markets during the first quarter were much more stable relative to the fourth quarter of 2016.

“As a result, our portfolio holdings increased in value over the course of the quarter,” Agarwal said. “Our performance was driven by contributions across our holdings and reflects the benefit of our strategy of investing in a diversified portfolio in a number of sub-sectors of the mortgage market.”

Western Asset Mortgage Capital Corporation is a real estate investment trust that invests in, acquires and manages a diverse portfolio assets consisting of Agency RMBS, Non-Agency RMBS, CMBS, ABS, Residential and Commercial Whole-Loans and other financial assets.

The company is externally managed and advised by Western Asset Management Company, an investment advisor registered with the Securities and Exchange Commission and a wholly-owned subsidiary of Legg Mason, Inc.

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