American Capital Mortgage posts loss in Q1

American Capital Mortgage posts loss in Q1 on weakness in US-backed mortgage securities

Associated Press

BETHESDA, Md. (AP) -- American Capital Mortgage Investment Corp. said Friday that it swung to a loss in the first quarter amid weakness in government-backed mortgage securities.

The real estate investment trust reported a net loss of $26.6 million, or 56 cents a share, in the January-March period. That compares with net income of $21.3 million, or $1.82 a share, in the first quarter of 2012.

Net interest income nearly tripled, to $43.5 million from $14.9 million a year earlier.

Mortgage REITs aim to borrow money at low rates, buy up mortgages that pay a higher rate, and profit from the difference.

Gary Kain, president and chief investment officer of American Capital Mortgage, cited "significant underperformance" of prices for government-backed mortgage securities during the quarter. The recovery in the U.S. housing market that began last year, with home prices rising, will enable the company to make better returns, Kain said in a statement.

The company, a subsidiary of private equity and asset management firm American Capital Ltd., launched an initial public offering in August 2011.

Shares of Bethesda, Md.-based American Capital Mortgage fell 19 cents to $25 in after-hours trading following the release of the report. The shares ended the regular trading session down 91 cents at $25.19.

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