Western Asset Mortgage Capital Corporation Declares Fourth Quarter Dividend of $0.06 Per Share; Announces Focus on Residential Real Estate Related Investments

PASADENA, California – (BUSINESS WIRE) – Western Asset Mortgage Capital Corporation (the “Company”) (NYSE: WMC) announced today that its board of directors has approved a cash dividend of $ 0.06 per share for the fourth quarter of 2021. Today’s dividend is payable on January 26th. 2022 to ordinary shareholders registered as of December 31, 2021 with an ex-dividend date of December 30, 2021.

Additionally, the company estimates its GAAP book value per share as of November 30, 2021 at approximately $ 3.31. The estimated GAAP book value as of November 30, 2021 is unaudited, has not been verified or reviewed by our third party auditors, and is subject to normal quarterly reconciliation and other procedures. Additionally, the estimated book value is November 30, 2021 and does not include the dividend announced today. GAAP book value will fluctuate with market conditions, results of the company’s business, and other factors. The company’s current GAAP book value could differ materially from its estimated GAAP book value as of November 30, 2021.

Business updates

The company has released the following business updates.

The company announces that it intends, in consultation with its manager, Western Asset Management Company, LLC (the “Manager”), to focus on investments related to residential real estate, including but not limited to unqualified non-government mortgage loans RMBS and other related investments. The company believes that this focus will enable it to seize attractive market opportunities while maintaining alignment with the manager’s core competencies. The portfolio change is expected to be completed in the next 12 to 18 months. The company plans to exit commercial investments in its portfolio, although from time to time it may make commercial investments on an opportunistic basis.

The manager will voluntarily waive 25% of his administration fee for the duration of the calendar year 2022 only in order to support the earnings potential of the company and its transition to a residential real estate investment portfolio.

The company also extended its share buyback program with the approval of the Board of Directors. Under the expanded program, the company may repurchase up to 3,000,000 common shares through December 31, 2023. The previous authorization should expire on December 31, 2021. All purchases made under the program will be made under the extended program, open market, privately negotiated transactions, or under a trading plan that may be accepted under Rules 10b5-1 and 10b-18 of the Securities and Exchange Commission. The authorization does not require the Company to purchase any number of common shares or shares at all, and the program may be suspended or terminated at the Company’s discretion without notice.

The overall goals of management include increasing the company’s equity base in order to lower the company’s expense ratio and increase capital for investments, but from time to time when stocks are trading at a significant discount, buying back stocks can be of value create for our shareholders. The time, type, price and amount of future buybacks are determined by the company at its own discretion and are subject to economic and market conditions, the share price, the applicable statutory provisions and other factors.

In addition, in the fourth quarter the company:

• Repurchase the total of $ 8.0 million in face value of its 2022 Notes at approximately 1% over face value plus accrued interest.

• 479,808 shares of common stock were repurchased at an average price of $ 2.25.

ABOUT WESTERN ASSET MORTGAGE CAPITAL CORPORATION

Western Asset Mortgage Capital Corporation is a real estate investment trust that invests, acquires, and manages a diverse portfolio of assets consisting of total residential loans, commercial loans, agency-less CMBS, agency-less RMBS, GSE risk transfer paper, and to a lesser extent Scope of agency RMBS, agency CMBS and ABS. The Company’s investment strategy is subject to change and, for example, now changes as described above, subject to the Company’s stated investment guidelines and based on the perspective of its manager, Western Asset Management Company, LLC, as to what mix of portfolio assets it believes it offers the Company at any given time best chance-risk-opportunities. The company is externally managed and advised by Western Asset Management Company, LLC, a registered investment advisor with the Securities and Exchange Commission and a wholly-owned subsidiary of Franklin Resources, Inc. Please visit the company’s website at www.westernassetmcc.com.

FORWARDING STATEMENTS

This press release contains statements that may constitute “forward-looking statements”. For these statements, the company claims the safe haven for forward-looking statements contained in these sections. Forward-looking statements are subject to significant risks and uncertainties, many of which are difficult to predict and generally are beyond the control of the company. In particular, it is currently difficult to fully assess the impact of COVID-19, due, among other things, to the uncertainty surrounding the severity and duration of the outbreak at home and abroad and the effectiveness of federal, state and local government efforts to prevent the spread of COVID -19 and respond to its direct and indirect effects on the US economy and activity. Other factors are described in the Risk Factors section of the Company’s Annual Report on Form 10-K for the period ended December 31, 2020, which is filed with the Securities and Exchange Commission (“SEC”). The company assumes no obligation to update these statements for revisions or changes after the date of this publication unless required by law.