Orchid Island Capital Announces Estimated Fourth Quarter 2020 Results, January 2021 Monthly Dividend and December 31, 2020 RMBS Portfolio Characteristics

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Rhea-AI Summary

Orchid Island Capital (NYSE:ORC) has declared a monthly cash dividend of $0.065 per share for January 2021, payable on February 24, 2021. Stockholders on record as of January 29, 2021 will receive this payment, with an ex-dividend date of January 28, 2021. The company, which must distribute at least 90% of its REIT taxable income to maintain its tax status, generated an estimated net income per share of $0.23 for the quarter ending December 31, 2020.

Positive

Monthly cash dividend of $0.065 provides income support for shareholders.
Estimated net income per share of $0.23 indicates performance strength.

Negative

Company's ability to maintain future distributions is uncertain.
Net realized and unrealized losses on RMBS and derivatives of $0.07 per share could affect future earnings.

01/14/2021 - 04:11 PM

Orchid Island Capital, Inc. (the “Company”) (NYSE:ORC) announced today that the Board of Directors (the “Board”) declared a monthly cash dividend for the month of January 2021. The dividend of $0.065 per share will be paid February 24, 2021 to holders of record on January 29, 2021, with an ex-dividend date of January 28, 2021. The Company plans on announcing its next dividend after the Board’s meeting on February 10, 2021.

The Company intends to make regular monthly cash distributions to its holders of common stock. In order to qualify as a real estate investment trust (“REIT”), the Company must distribute annually to its stockholders an amount at least equal to 90% of its REIT taxable income, determined without regard to the deduction for dividends paid and excluding any net capital gain. The Company will be subject to income tax on taxable income that is not distributed and to an excise tax to the extent that a certain percentage of its taxable income is not distributed by specified dates. The Company has not established a minimum distribution payment level and is not assured of its ability to make distributions to stockholders in the future.

As of January 14, 2021, the Company had 76,381,365 shares of common stock outstanding. As of December 31, 2020, the Company had 76,073,317 shares of common stock outstanding. As of September 30, 2020, the Company had 69,295,962 shares of common stock outstanding.

Estimated December 31, 2020 Book Value Per Share

The Company’s estimated book value per share as of December 31, 2020 was $5.46. The Company computes book value per share by dividing total stockholders' equity by the total number of outstanding shares of common stock. At December 31, 2020, the Company's preliminary estimated total stockholders' equity was approximately $415.3 million with 76,073,317 shares of common stock outstanding. These figures and the resulting estimated book value per share are preliminary, subject to change, and subject to review by the Company’s independent registered public accounting firm.

Estimated Net Income Per Share and Realized and Unrealized Gains and Losses on RMBS and Derivative Instruments

The Company estimates it generated net income per share of $0.23, which includes $0.07 per share of net realized and unrealized losses on RMBS and derivative instruments for the quarter ended December 31, 2020. These amounts compare to total dividends declared during the quarter of $0.195 per share. Net income per common share calculated under generally accepted accounting principles can, and does, differ from our REIT taxable income. The Company views REIT taxable income as a better indication of income to be paid in the form of a dividend rather than net income. Many components of REIT taxable income can only be estimated at this time and our monthly dividends declared are based on both estimates of REIT taxable income to be earned over the course of the current quarter and calendar year and a longer-term estimate of the REIT taxable income of the Company. These figures are preliminary, subject to change, and subject to review by the Company’s independent registered public accounting firm.

Estimated Total Return on Equity

The Company’s estimated total return on equity for the quarter ended December 31, 2020 was 4.0%. The Company calculates total return on equity as the sum of dividends declared and paid during the quarter plus changes in book value during the quarter, divided by the Company’s stockholders’ equity at the beginning of the quarter. The total return was $0.215 per share, comprised of dividends per share of $0.195 and an increase in book value per share of $0.02 from September 30, 2020.

RMBS Portfolio Characteristics

Details of the RMBS portfolio as of December 31, 2020 are presented below. These figures are preliminary and subject to change and, with respect to figures that will appear in the Company’s financial statements and associated footnotes as of and for the quarter ended December 31, 2020, are subject to review by the Company’s independent registered public accounting firm.

RMBS Valuation Characteristics
RMBS Assets by Agency
Investment Company Act of 1940 Whole Pool Test Results
Repurchase Agreement Exposure by Counterparty
RMBS Risk Measures

About Orchid Island Capital, Inc.

Orchid Island Capital, Inc. is a specialty finance company that invests on a leveraged basis in Agency RMBS. Our investment strategy focuses on, and our portfolio consists of, two categories of Agency RMBS: (i) traditional pass-through Agency RMBS, such as mortgage pass-through certificates and collateralized mortgage obligations issued by Fannie Mae, Freddie Mac or Ginnie Mae, and (ii) structured Agency RMBS. The Company is managed by Bimini Advisors, LLC, a registered investment adviser with the Securities and Exchange Commission.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements include, but are not limited to, statements about the Company’s distributions. These forward-looking statements are based upon Orchid Island Capital, Inc.’s present expectations, but these statements are not guaranteed to occur. Investors should not place undue reliance upon forward-looking statements. For further discussion of the factors that could affect outcomes, please refer to the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and Quarterly Report on Form 10-Q for the three months ended March 31, 2020.

RMBS Valuation Characteristics
($ in thousands)
												Realized	Realized
												Dec 2020	Oct - Dec		Modeled		Modeled
								Net			Weighted	CPR	2020 CPR		Interest		Interest
					%			Weighted			Average	(1-Month)	(3-Month)		Rate		Rate
		Current		Fair	of		Current	Average			Maturity	(Reported	(Reported		Sensitivity		Sensitivity
Type		Face		Value	Portfolio		Price	Coupon	GWAC	Age	(Months)	in Jan)	in Jan)		(-50 BPS)⁽¹⁾		(+50 BPS)⁽¹⁾
Pass Through RMBS
Fixed Rate CMO	$	128,951	$	137,453	3.26%	$	106.59	4.00%	4.40%	42	312	35.50%	25.42%	$	(100)	$	(19)
15yr 4.0		666		720	0.02%		108.20	4.00%	4.49%	32	123	22.95%	17.45%		7		(7)
15yr Total		666		720	0.02%		108.20	4.00%	4.49%	32	123	22.95%	17.45%		7		(7)
20yr 2.0		249,144		259,441	6.16%		104.13	2.00%	2.86%	2	238	1.41%	1.66%		579		(1,173)
20yr Total		249,144		259,441	6.16%		104.13	2.00%	2.86%	2	238	1.41%	1.66%		579		(1,173)
30yr 2.5		816,270		869,278	20.65%		106.49	2.50%	3.33%	3	355	3.82%	7.27%		9,440		(16,753)
30yr 3.0		741,511		813,838	19.33%		109.75	3.00%	3.49%	5	354	7.32%	18.09%		13,576		(17,303)
30yr 3.5		1,151,156		1,270,263	30.17%		110.35	3.50%	3.98%	13	343	19.83%	17.38%		11,303		(16,630)
30yr 4.0		183,879		208,168	4.94%		113.21	4.00%	4.51%	28	325	20.42%	23.54%		3,391		(3,823)
30yr 4.5		96,264		108,658	2.58%		112.87	4.50%	5.00%	19	338	29.67%	26.64%		910		(1,006)
30yr 5.0		26,807		30,380	0.72%		113.33	5.00%	5.62%	34	319	30.40%	30.95%		317		(320)
30yr Total		3,015,887		3,300,585	78.40%		109.44	3.18%	3.76%	9	348	12.87%	16.88%		38,937		(55,835)
Total Pass Through RMBS		3,394,648		3,698,199	87.84%		108.94	3.13%	3.72%	10	338	12.89%	16.65%		39,423		(57,034)
Structured RMBS
Interest-Only Securities		264,010		28,696	0.68%		10.87	4.00%	4.57%	78	268	45.29%	44.30%		(2,433)		4,035
Total Structured RMBS		264,010		28,696	0.68%		10.87	4.00%	4.57%	78	268	45.29%	44.30%		(2,433)		4,035
Long TBA Positions
FNCL 2.0 TBA		465,000		483,090	11.47%		103.89	2.00%							5,781		(9,527)
Total Long TBA		465,000		483,090	11.47%		103.89	2.00%							5,781		(9,527)
Total Mortgage Assets	$	4,123,658	$	4,209,985	100.00%			3.06%	3.78%	15	333	15.23%	20.12%	$	42,771	$	(62,526)

Interest

Average

Hedge

Rate

Notional

Period

Sensitivity

Hedge

Balance

End

(-50 BPS)⁽¹⁾

(+50 BPS)⁽¹⁾

Eurodollar Futures

(50,000)

Dec-2021

(250)

250

Swaps

(820,000)

Apr-2025

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