Orchid Island Capital Announces Estimated Third Quarter 2024 Results, October 2024 Monthly Dividend and September 30, 2024 RMBS Portfolio Characteristics

Rhea-AI Summary

Orchid Island Capital (NYSE: ORC) announced its estimated third quarter 2024 results, October 2024 monthly dividend, and September 30, 2024 RMBS portfolio characteristics. Key points include:

- October 2024 monthly dividend of $0.12 per share of common stock, payable on November 27, 2024
- Estimated book value per share as of September 30, 2024 of $8.40
- Estimated GAAP net income of $0.24 per share for Q3 2024, including $0.29 per share of net realized and unrealized gains on RMBS and derivative instruments
- Estimated 2.1% total return on equity for Q3 2024
- 78,414,645 shares of common stock outstanding as of October 16, 2024

The company's estimated total stockholders' equity was approximately $656.0 million as of September 30, 2024. These figures are preliminary and subject to review.

Positive

• Monthly dividend of $0.12 per share announced for October 2024
• Estimated GAAP net income of $0.24 per share for Q3 2024
• Estimated 2.1% total return on equity for Q3 2024
• Net realized and unrealized gains of $0.29 per share on RMBS and derivative instruments

Negative

• Decrease in book value per share of $0.18 from June 30, 2024 to September 30, 2024
• Total dividends declared ($0.36) exceed estimated net income ($0.24) for Q3 2024

Insights

Financial Analyst

Orchid Island Capital's Q3 2024 results show mixed signals. The estimated book value per share of $8.40 represents a slight decrease from the previous quarter, indicating some pressure on the company's equity. However, the estimated GAAP net income of $0.24 per share, including $0.29 per share in net realized and unrealized gains on RMBS and derivative instruments, suggests positive operational performance.

The company's total return on equity of 2.1% for the quarter is modest but positive, reflecting a combination of dividend payments and changes in book value. The monthly dividend of $0.12 per share maintains a consistent income stream for investors, but it's important to note that the total dividends declared ($0.36) exceeded the estimated net income ($0.24) for the quarter.

The increase in outstanding shares from 64.8 million in June to 78.1 million in September indicates significant capital raising, which could dilute existing shareholders but also provides capital for potential growth. Overall, while the company is maintaining its dividend policy, investors should closely monitor the sustainability of these payments relative to earnings and book value trends.

REIT Specialist

Orchid Island Capital's Q3 2024 report highlights several key aspects typical of REIT operations. The company's commitment to monthly dividends aligns with REIT requirements to distribute at least 90% of taxable income. However, the statement that they "have not established a minimum distribution payment level and is not assured of its ability to make distributions to stockholders in the future" is a standard disclaimer that underscores the potential volatility in REIT distributions.

The estimated book value per share of $8.40 and total stockholders' equity of approximately $656.0 million provide a snapshot of the company's net asset value. The 2.1% total return on equity for the quarter is positive but relatively low, which may raise questions about the company's ability to generate substantial returns in the current market environment.

The RMBS portfolio characteristics mentioned, though details are not provided, are important for assessing the company's investment strategy and risk exposure. Investors should pay close attention to these metrics, as they directly impact the company's ability to generate income and maintain its dividend policy in the long term.

• October 2024 Monthly Dividend of $0.12 Per Share of Common Stock
• Estimated Book Value Per Share as of September 30, 2024 of $8.40
• Estimated GAAP net income of $0.24 per share for the quarter ended September 30, 2024, including an estimated $0.29 per share of net realized and unrealized gains on RMBS and derivative instruments
• Estimated 2.1% total return on equity for the quarter ended September 30, 2024
• Estimated book value, net income and total return on equity amounts are preliminary, subject to change, and subject to review by the Company’s independent registered public accounting firm
• RMBS Portfolio Characteristics as of September 30, 2024
• Next Dividend Announcement Expected November 13, 2024

VERO BEACH, Fla., Oct. 16, 2024 (GLOBE NEWSWIRE) -- Orchid Island Capital, Inc. (the “Company”) (NYSE: ORC) announced today that the Board of Directors of the Company declared a monthly cash dividend for the month of October 2024. The dividend of $0.12 per share will be paid November 27, 2024 to holders of record of the Company’s common stock on October 31, 2024, with an ex-dividend date of October 31, 2024. The Company plans on announcing its next common stock dividend on November 13, 2024.

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 October 16, 2024, the Company had 78,414,645 shares of common stock outstanding. As of September 30, 2024, the Company had 78,082,645 shares of common stock outstanding. As of June 30, 2024, the Company had 64,824,374 shares of common stock outstanding.

Estimated September 30, 2024 Book Value Per Share

The Company’s estimated book value per share as of September 30, 2024 was $8.40.  The Company computes book value per share by dividing total stockholders' equity by the total number of outstanding shares of common stock. At September 30, 2024, the Company's preliminary estimated total stockholders' equity was approximately $656.0 million with 78,082,645 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 a net income per share of $0.24 for the quarter ended September 30, 2024, which includes an estimated $0.29 per share of net realized and unrealized gains on RMBS and derivative instruments. These amounts compare to total dividends declared during the quarter of $0.36 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 September 30, 2024 was 2.1%. 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 $0.18 per share, comprised of dividends per share of $0.36 and a decrease in book value per share of $0.18 from June 30, 2024.

RMBS Portfolio Characteristics

Details of the RMBS portfolio as of September 30, 2024 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 September 30, 2024, 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, 2023.

RMBS Valuation Characteristics
($ in thousands)
																										Realized
																							Realized			Jul -24 -
																							Sep-24			Sep-24
													Net								Weighted		CPR			CPR
													Weighted								Average		(1-Month)			(3-Month)			Modeled Interest
		Current			Fair			% of			Current		Average								Maturity		(Reported			(Reported			Rate Sensitivity (1)
Type		Face			Value			Portfolio			Price		Coupon			GWAC			Age		(Months)		in Oct)			in Oct)			(-50 BPS)				(+50 BPS)
Fixed Rate RMBS
30yr 3.0			1,313,569			1,192,650		21.91	%		90.79		3.00	%		3.46	%		42		312		4.9	%		6.4	%			36,156				(37,050	)
30yr 3.5			180,159			170,463		3.13	%		94.62		3.50	%		4.04	%		55		293		7.3	%		8.6	%			4,631				(4,728	)
30yr 4.0			534,812			515,427		9.47	%		96.38		4.00	%		4.64	%		68		285		3.2	%		4.6	%			11,715				(12,733	)
30yr 4.5			312,192			308,236		5.66	%		98.73		4.50	%		5.44	%		27		330		5.5	%		6.8	%			5,377				(6,191	)
30yr 5.0			517,497			518,746		9.53	%		100.24		5.00	%		5.93	%		25		330		7.9	%		7.0	%			7,905				(9,531	)
30yr 5.5			259,123			265,083		4.87	%		102.30		5.50	%		6.43	%		18		338		3.3	%		5.8	%			3,498				(4,475	)
30yr 6.0			1,248,052			1,287,954		23.66	%		103.20		6.00	%		6.98	%		9		347		11.7	%		9.5	%			8,892				(12,035	)
30yr 6.5			776,146			806,065		14.81	%		103.85		6.50	%		7.43	%		9		348		15.8	%		11.9	%			5,418				(7,020	)
30yr 7.0			346,282			362,445		6.66	%		104.67		7.00	%		7.94	%		11		343		22.4	%		22.7	%			2,291				(2,777	)
30yr Total			5,487,832			5,427,069		99.71	%		98.89		4.94	%		5.72	%		27		327		9.3	%		8.8	%			85,883				(96,540	)
Total Pass Through RMBS			5,487,832			5,427,069		99.71	%		98.89		4.94	%		5.72	%		27		327		9.3	%		8.8	%			85,883				(96,540	)
Structured RMBS
IO 20yr 4.0			7,414			693		0.01	%		9.35		4.00	%		4.57	%		153		81		11.0	%		11.5	%			3				(4	)
IO 30yr 3.0			2,690			376		0.01	%		13.98		3.00	%		3.64	%		116		234		0.9	%		1.2	%			(2	)			-
IO 30yr 4.0			73,719			13,339		0.25	%		18.09		4.00	%		4.60	%		121		230		5.8	%		6.3	%			(424	)			302
IO 30yr 4.5			3,218			620		0.01	%		19.26		4.50	%		4.99	%		171		176		8.6	%		7.8	%			(11	)			7
IO 30yr 5.0			1,733			354		0.01	%		20.45		5.00	%		5.37	%		171		177		1.1	%		4.4	%			(10	)			7
IO Total			88,774			15,382		0.28	%		17.33		4.01	%		4.60	%		126		214		6.1	%		6.6	%			(444	)			312
IIO 30yr 4.0			23,450			353		0.01	%		1.50		0.00	%		4.40	%		84		264		0.6	%		5.7	%			121				(99	)
Total Structured RMBS			112,224			15,735		0.29	%		14.02		3.17	%		4.55	%		117		225		4.9	%		6.4	%			(323	)			213
Total Mortgage Assets		$	5,600,056		$	5,442,804		100.00	%				4.90	%		5.70	%		29		325		9.2	%		8.8	%		$	85,560			$	(96,327	)

						Hedge		Modeled Interest
		Notional				Period		Rate Sensitivity (1)
Hedge		Balance				End		(-50 BPS)				(+50 BPS)
3-Month SOFR Futures(2)		$	(455,900	)		Oct-25		$	(5,699	)		$	5,699
10-Year Treasury Future(3)			(12,500	)		Dec-24			(410	)			397
Swaps			(3,486,800	)		Jun-30			(91,274	)			88,057
TBA			(300,000	)		Oct-24			(8,387	)			8,827
Swaptions			-			Jan-00			-				-
Hedge Total		$	(4,255,200	)				$	(105,770	)		$	102,980
Rate Shock Grand Total								$	(20,210	)		$	6,653

(1)	Modeled results from Citigroup Global Markets Inc. Yield Book. Interest rate shocks assume instantaneous parallel shifts and horizon prices are calculated assuming constant SOFR option-adjusted spreads. These results are for illustrative purposes only and actual results may differ materially.
(2)	Amounts for SOFR futures contracts represents the average quarterly notional amount.
(3)	Ten-year Treasury futures contracts were valued at prices of $114.28 at September 30, 2024. The market value of the short position was $14.3 million.

RMBS Assets by Agency
($ in thousands)
					Percentage
		Fair			of
Asset Category		Value			Portfolio
As of September 30, 2024
Fannie Mae		$	3,692,047		67.8	%
Freddie Mac			1,750,757		32.2	%
Total Mortgage Assets		$	5,442,804		100.0	%

Investment Company Act of 1940 Whole Pool Test
($ in thousands)
					Percentage
		Fair			of
Asset Category		Value			Portfolio
As of September 30, 2024
Non-Whole Pool Assets		$	161,835		3.0	%
Whole Pool Assets			5,280,969		97.0	%
Total Mortgage Assets		$	5,442,804		100.0	%

Borrowings By Counterparty
($ in thousands)
								Weighted			Weighted
					% of			Average			Average
		Total			Total			Repo			Maturity		Longest
As of September 30, 2024		Borrowings			Debt			Rate			in Days		Maturity
ABN AMRO Bank N.V.		$	381,192		7.3	%		5.37	%		15		10/15/2024
Merrill Lynch, Pierce, Fenner & Smith			379,748		7.3	%		5.20	%		35		11/15/2024
ASL Capital Markets Inc.			346,397		6.6	%		5.35	%		31		11/15/2024
Cantor Fitzgerald & Co			289,468		5.5	%		5.30	%		11		10/18/2024
DV Securities, LLC Repo			274,284		5.2	%		5.24	%		19		10/28/2024
Mitsubishi UFJ Securities (USA), Inc			263,580		5.0	%		5.35	%		23		10/28/2024
J.P. Morgan Securities LLC			254,798		4.9	%		5.33	%		9		10/25/2024
Banco Santander SA			248,472		4.8	%		5.33	%		49		11/18/2024
Daiwa Securities America Inc.			247,191		4.7	%		5.04	%		28		11/19/2024
Citigroup Global Markets Inc			244,746		4.7	%		5.04	%		25		10/25/2024
Wells Fargo Bank, N.A.			241,641		4.6	%		5.29	%		16		10/16/2024
ING Financial Markets LLC			225,593		4.3	%		5.01	%		39		11/8/2024
Marex Capital Markets Inc.			223,192		4.3	%		5.00	%		21		10/21/2024
Goldman, Sachs & Co			208,485		4.0	%		5.32	%		16		10/16/2024
Bank of Montreal			204,522		3.9	%		5.31	%		15		10/15/2024
South Street Securities, LLC			194,516		3.7	%		5.20	%		19		10/24/2024
Clear Street LLC			193,535		3.7	%		5.21	%		48		11/20/2024
Mirae Asset Securities (USA) Inc.			193,120		3.7	%		5.26	%		26		11/18/2024
StoneX Financial Inc.			159,098		3.0	%		5.03	%		21		10/21/2024
The Bank of Nova Scotia			149,958		2.9	%		5.29	%		15		10/15/2024
RBC Capital Markets, LLC			143,225		2.7	%		5.31	%		45		11/14/2024
Nomura Securities International, Inc.			75,278		1.4	%		5.31	%		15		10/15/2024
Lucid Prime Fund, LLC			48,322		0.9	%		5.29	%		17		10/17/2024
Wells Fargo Securities, LLC			23,004		0.4	%		5.06	%		25		10/25/2024
Lucid Cash Fund USG LLC			17,506		0.3	%		5.31	%		17		10/17/2024
Total Borrowings		$	5,230,871		100.0	%		5.24	%		25		11/20/2024

Contact:

Orchid Island Capital, Inc.
Robert E. Cauley
3305 Flamingo Drive, Vero Beach, Florida 32963
Telephone: (772) 231-1400

FAQ

What is Orchid Island Capital's (ORC) estimated book value per share as of September 30, 2024?

Orchid Island Capital's estimated book value per share as of September 30, 2024 is $8.40.

What is the October 2024 monthly dividend announced by Orchid Island Capital (ORC)?

Orchid Island Capital announced a monthly dividend of $0.12 per share for October 2024, payable on November 27, 2024.

What was Orchid Island Capital's (ORC) estimated total return on equity for Q3 2024?

Orchid Island Capital's estimated total return on equity for the quarter ended September 30, 2024 was 2.1%.

When will Orchid Island Capital (ORC) announce its next common stock dividend?

Orchid Island Capital plans to announce its next common stock dividend on November 13, 2024.