Orchid Island Capital Announces Third Quarter 2024 Results
Orchid Island Capital (NYSE:ORC) reported net income of $17.3 million, or $0.24 per share, for Q3 2024. Key results include net interest income of $0.3 million and net realized/unrealized gains of $21.2 million on RMBS and derivative instruments. The company declared and paid dividends of $0.36 per share during the quarter. Book value per share decreased to $8.40 as of September 30, 2024, resulting in a total return of 2.10%. The company maintained strong liquidity with $326.7 million in cash and unpledged securities, representing about 50% of stockholders' equity. The portfolio yield increased to 5.43% from 5.05% in Q2 2024, while borrowing costs rose to 5.62% from 5.34%.
Orchid Island Capital (NYSE:ORC) ha riportato un reddito netto di 17,3 milioni di dollari, ovvero 0,24 dollari per azione, per il terzo trimestre del 2024. I risultati chiave includono un reddito netto da interessi di 0,3 milioni di dollari e guadagni realizzati/non realizzati di 21,2 milioni di dollari su RMBS e strumenti derivati. La società ha dichiarato e pagato dividendi di 0,36 dollari per azione durante il trimestre. Il valore contabile per azione è diminuito a 8,40 dollari al 30 settembre 2024, risultando in un rendimento totale del 2,10%. L'azienda ha mantenuto una forte liquidità con 326,7 milioni di dollari in contanti e titoli non gravati, rappresentando circa il 50% del capitale degli azionisti. Il rendimento del portafoglio è aumentato al 5,43% rispetto al 5,05% nel secondo trimestre del 2024, mentre i costi di prestito sono aumentati al 5,62% rispetto al 5,34%.
Orchid Island Capital (NYSE:ORC) reportó un ingreso neto de 17.3 millones de dólares, o 0.24 dólares por acción, para el tercer trimestre de 2024. Los resultados clave incluyen un ingreso neto por intereses de 0.3 millones de dólares y ganancias netas realizadas/no realizadas de 21.2 millones de dólares en RMBS e instrumentos derivados. La empresa declaró y pagó dividendos de 0.36 dólares por acción durante el trimestre. El valor contable por acción disminuyó a 8.40 dólares al 30 de septiembre de 2024, resultando en un retorno total del 2.10%. La compañía mantuvo una sólida liquidez con 326.7 millones de dólares en efectivo y valores no comprometidos, representando aproximadamente el 50% del patrimonio de los accionistas. El rendimiento de la cartera aumentó al 5.43% desde el 5.05% en el segundo trimestre de 2024, mientras que los costos de endeudamiento subieron al 5.62% desde el 5.34%.
Orchid Island Capital (NYSE:ORC)는 2024년 3분기 순이익 1,730만 달러, 즉 주당 0.24달러를 보고했습니다. 주요 결과로는 30만 달러의 순이자 수익 및 RMBS와 파생상품에 대한 2,120만 달러의 실현/미실현 이익이 포함됩니다. 이 회사는 분기 동안 주당 0.36달러의 배당금을 선언하고 지급했습니다. 2024년 9월 30일 현재 주당 장부 가치는 8.40달러로 감소하여 총 수익률은 2.10%에 달했습니다. 이 회사는 주주 자본의 약 50%를 차지하는 3억 2,670만 달러의 현금 및 미담보 증권을 보유하여 강력한 유동성을 유지했습니다. 포트폴리오 수익률은 2024년 2분기 5.05%에서 5.43%로 증가했으며, 차입 비용은 5.34%에서 5.62%로 상승했습니다.
Orchid Island Capital (NYSE:ORC) a rapporté un revenu net de 17,3 millions de dollars, soit 0,24 dollar par action, pour le troisième trimestre 2024. Les résultats clés incluent un revenu net d'intérêts de 0,3 million de dollars et des gains réalisés/non réalisés de 21,2 millions de dollars sur des RMBS et des instruments dérivés. La société a déclaré et payé des dividendes de 0,36 dollar par action pendant le trimestre. La valeur comptable par action a diminué à 8,40 dollars au 30 septembre 2024, entraînant un rendement total de 2,10 %. L'entreprise a maintenu une forte liquidité avec 326,7 millions de dollars en liquidités et titres non grevés, représentant environ 50 % des capitaux propres des actionnaires. Le rendement du portefeuille a augmenté à 5,43 % contre 5,05 % au T2 2024, tandis que les coûts d'emprunt ont augmenté à 5,62 % contre 5,34 %.
Orchid Island Capital (NYSE:ORC) berichtete über einen Nettoertrag von 17,3 Millionen Dollar, oder 0,24 Dollar pro Aktie, für das 3. Quartal 2024. Zu den wichtigsten Ergebnissen gehören ein Nettozinsüberschuss von 0,3 Millionen Dollar sowie realisierte/irrealisierte Gewinne von 21,2 Millionen Dollar aus RMBS und Derivaten. Das Unternehmen erklärte und zahlte Dividenden in Höhe von 0,36 Dollar pro Aktie im Laufe des Quartals. Der Buchwert pro Aktie fiel zum 30. September 2024 auf 8,40 Dollar, was zu einer Gesamtrendite von 2,10% führte. Das Unternehmen verfügte über eine starke Liquidität mit 326,7 Millionen Dollar in Bar und nicht verpfändeten Wertpapieren, was etwa 50% des Eigenkapitals der Aktionäre entspricht. Die Portfolio-Rendite stieg von 5,05% im 2. Quartal 2024 auf 5,43%, während die Kreditkosten von 5,34% auf 5,62% anstiegen.
- Net income of $17.3 million ($0.24 per share) in Q3 2024, compared to net loss of $80.1 million in Q3 2023
- Portfolio yield increased to 5.43% from 5.05% in Q2 2024
- Strong liquidity position of $326.7 million in cash and unpledged securities
- Net realized and unrealized gains of $21.2 million on RMBS and derivative instruments
- Book value per share decreased by $0.18 to $8.40
- Borrowing costs increased to 5.62% from 5.34% in Q2 2024
- Net interest income of only $0.3 million, less than $0.01 per share
Insights
VERO BEACH, Fla., Oct. 24, 2024 (GLOBE NEWSWIRE) -- Orchid Island Capital, Inc. (NYSE:ORC) ("Orchid” or the "Company"), a real estate investment trust ("REIT"), today announced results of operations for the three month period ended September 30, 2024.
Third Quarter 2024 Results
- Net income of
$17.3 million , or$0.24 per common share, which consists of: - Net interest income of
$0.3 million , or less than$0.01 per common share - Total expenses of
$4.3 million , or$0.06 per common share - Net realized and unrealized gains of
$21.2 million , or$0.29 per common share, on RMBS and derivative instruments, including net interest income on interest rate swaps - Third quarter dividends declared and paid of
$0.36 per common share - Book value per common share of
$8.40 at September 30, 2024 - Total return of
2.10% , comprised of$0.36 dividend per common share and$0.18 decrease in book value per common share, divided by beginning book value per common share
Other Financial Highlights
- Orchid maintained a strong liquidity position of
$326.7 million in cash and cash equivalents and unpledged securities, or approximately50% of stockholders' equity as of September 30, 2024 - Borrowing capacity in excess of September 30, 2024 outstanding repurchase agreement balances of
$5,230.9 million , spread across 25 active lenders - Company to discuss results on Friday, October 25, 2024, at 10:00 AM ET
- Supplemental materials to be discussed on the call can be downloaded from the investor relations section of the Company’s website at https://ir.orchidislandcapital.com
Management Commentary
Commenting on the third quarter results, Robert E. Cauley, Chairman and Chief Executive Officer, said, “The long-awaited impacts of tight monetary policy orchestrated by the Federal Reserve appear to have finally had the desired impacts on inflation and the imbalances in the labor market. Inflation is closing in on the Fed’s
“For the third quarter of 2024 Orchid Island generated an economic return of
“We were able to raise additional capital at attractive levels via our ATM program and increase the size of the portfolio while maintaining leverage levels. Looking forward, we anticipate investment opportunities to remain attractive with potential total returns that could improve if the Fed were to continue easing monetary policy. Absent such a development, total returns available today are still quite attractive and hedged net-interest spreads are ample in relation to the current dividend level.”
Details of Third Quarter 2024 Results of Operations
The Company reported net income of
Prepayments
For the quarter ended September 30, 2024, Orchid received
Structured | ||||||
PT RMBS | RMBS | Total | ||||
Three Months Ended | Portfolio (%) | Portfolio (%) | Portfolio (%) | |||
September 30, 2024 | 8.8 | 6.4 | 8.8 | |||
June 30, 2024 | 7.6 | 7.1 | 7.6 | |||
March 31, 2024 | 6.0 | 5.9 | 6.0 | |||
December 31, 2023 | 5.4 | 7.9 | 5.5 | |||
September 30, 2023 | 6.1 | 5.7 | 6.0 | |||
June 30, 2023 | 5.6 | 7.0 | 5.6 | |||
March 31, 2023 | 3.9 | 5.7 | 4.0 | |||
Portfolio
The following tables summarize certain characteristics of Orchid’s PT RMBS (as defined below) and structured RMBS as of September 30, 2024 and December 31, 2023:
($ in thousands) | |||||||||||||
Weighted | |||||||||||||
Percentage | Average | ||||||||||||
of | Weighted | Maturity | |||||||||||
Fair | Entire | Average | in | Longest | |||||||||
Asset Category | Value | Portfolio | Coupon | Months | Maturity | ||||||||
September 30, 2024 | |||||||||||||
Fixed Rate RMBS | $ | 5,427,069 | 99.7 | % | 4.94 | % | 327 | 1-Oct-54 | |||||
Interest-Only Securities | 15,382 | 0.3 | % | 4.01 | % | 214 | 25-Jul-48 | ||||||
Inverse Interest-Only Securities | 353 | 0.0 | % | 0.00 | % | 264 | 15-Jun-42 | ||||||
Total Mortgage Assets | $ | 5,442,804 | 100.0 | % | 4.90 | % | 325 | 1-Oct-54 | |||||
December 31, 2023 | |||||||||||||
Fixed Rate RMBS | $ | 3,877,082 | 99.6 | % | 4.33 | % | 334 | 1-Nov-53 | |||||
Interest-Only Securities | 16,572 | 0.4 | % | 4.01 | % | 223 | 25-Jul-48 | ||||||
Inverse Interest-Only Securities | 358 | 0.0 | % | 0.00 | % | 274 | 15-Jun-42 | ||||||
Total Mortgage Assets | $ | 3,894,012 | 100.0 | % | 4.30 | % | 331 | 1-Nov-53 | |||||
($ in thousands) | ||||||||||||
September 30, 2024 | December 31, 2023 | |||||||||||
Percentage of | Percentage of | |||||||||||
Agency | Fair Value | Entire Portfolio | Fair Value | Entire Portfolio | ||||||||
Fannie Mae | $ | 3,692,047 | 67.8 | % | $ | 2,714,192 | 69.7 | % | ||||
Freddie Mac | 1,750,757 | 32.2 | % | 1,179,820 | 30.3 | % | ||||||
Total Portfolio | $ | 5,442,804 | 100.0 | % | $ | 3,894,012 | 100.0 | % | ||||
September 30, 2024 | December 31, 2023 | |||||
Weighted Average Pass-through Purchase Price | $ | 102.72 | $ | 104.10 | ||
Weighted Average Structured Purchase Price | $ | 18.74 | $ | 18.74 | ||
Weighted Average Pass-through Current Price | $ | 98.89 | $ | 95.70 | ||
Weighted Average Structured Current Price | $ | 14.02 | $ | 13.51 | ||
Effective Duration (1) | 3.490 | 4.400 |
(1 | ) | Effective duration is the approximate percentage change in price for a 100 basis point change in rates. An effective duration of 3.490 indicates that an interest rate increase of |
Financing, Leverage and Liquidity
As of September 30, 2024, the Company had outstanding repurchase obligations of approximately
($ in thousands) | |||||||||||
Weighted | Weighted | ||||||||||
Total | Average | Average | |||||||||
Outstanding | % of | Borrowing | Maturity | ||||||||
Counterparty | Balances | Total | Rate | in Days | |||||||
ABN AMRO Bank N.V. | $ | 381,192 | 7.29 | % | 5.37 | % | 15 | ||||
Merrill Lynch, Pierce, Fenner & Smith | 379,748 | 7.26 | % | 5.20 | % | 35 | |||||
ASL Capital Markets Inc. | 346,397 | 6.62 | % | 5.35 | % | 31 | |||||
Cantor Fitzgerald & Co | 289,468 | 5.53 | % | 5.30 | % | 11 | |||||
DV Securities, LLC Repo | 274,284 | 5.24 | % | 5.24 | % | 19 | |||||
Mitsubishi UFJ Securities (USA), Inc | 263,580 | 5.04 | % | 5.35 | % | 23 | |||||
J.P. Morgan Securities LLC | 254,798 | 4.87 | % | 5.33 | % | 9 | |||||
Banco Santander SA | 248,472 | 4.75 | % | 5.33 | % | 49 | |||||
Daiwa Securities America Inc. | 247,191 | 4.73 | % | 5.04 | % | 28 | |||||
Citigroup Global Markets Inc | 244,746 | 4.68 | % | 5.04 | % | 25 | |||||
Wells Fargo Bank, N.A. | 241,641 | 4.62 | % | 5.29 | % | 16 | |||||
ING Financial Markets LLC | 225,593 | 4.31 | % | 5.01 | % | 39 | |||||
Marex Capital Markets Inc. | 223,192 | 4.27 | % | 5.00 | % | 21 | |||||
Goldman, Sachs & Co | 208,485 | 3.99 | % | 5.32 | % | 16 | |||||
Bank of Montreal | 204,522 | 3.91 | % | 5.31 | % | 15 | |||||
South Street Securities, LLC | 194,516 | 3.72 | % | 5.20 | % | 19 | |||||
Clear Street LLC | 193,535 | 3.70 | % | 5.21 | % | 48 | |||||
Mirae Asset Securities (USA) Inc. | 193,120 | 3.69 | % | 5.26 | % | 26 | |||||
StoneX Financial Inc. | 159,098 | 3.04 | % | 5.03 | % | 21 | |||||
The Bank of Nova Scotia | 149,958 | 2.87 | % | 5.29 | % | 15 | |||||
RBC Capital Markets, LLC | 143,225 | 2.74 | % | 5.31 | % | 45 | |||||
Nomura Securities International, Inc. | 75,278 | 1.44 | % | 5.31 | % | 15 | |||||
Lucid Prime Fund, LLC | 48,322 | 0.92 | % | 5.29 | % | 17 | |||||
Wells Fargo Securities, LLC | 23,004 | 0.44 | % | 5.06 | % | 25 | |||||
Lucid Cash Fund USG LLC | 17,506 | 0.33 | % | 5.31 | % | 17 | |||||
Total / Weighted Average | $ | 5,230,871 | 100.00 | % | 5.24 | % | 25 | ||||
Hedging
In connection with its interest rate risk management strategy, the Company economically hedges a portion of the cost of its repurchase agreement funding against a rise in interest rates by entering into derivative financial instrument contracts. The Company has not elected hedging treatment under U.S. generally accepted accounting principles (“GAAP”) in order to align the accounting treatment of its derivative instruments with the treatment of its portfolio assets under the fair value option election. As such, all gains or losses on these instruments are reflected in earnings for all periods presented. At September 30, 2024, such instruments were comprised of U.S. Treasury note (“T-Note”) and Secured Overnight Financing Rate ("SOFR") futures contracts, interest rate swap agreements and contracts to sell to-be-announced ("TBA") securities.
The table below presents information related to the Company’s T-Note and SOFR futures contracts at September 30, 2024.
($ in thousands) | |||||||||||||
September 30, 2024 | |||||||||||||
Average | Weighted | Weighted | |||||||||||
Contract | Average | Average | |||||||||||
Notional | Entry | Effective | Open | ||||||||||
Expiration Year | Amount | Rate | Rate | Equity(1) | |||||||||
T-Note Futures Contracts (Short Positions)(2) | |||||||||||||
December 2024 10-year T-Note futures (Dec 2024 - Dec 2034 Hedge Period) | $ | 12,500 | 3.73 | % | 3.62 | % | $ | (88 | ) | ||||
SOFR Futures Contracts (Short Positions) | |||||||||||||
December 2024 3-Month SOFR futures (Sep 2024 - Dec 2024 Hedge Period) | $ | 241,250 | 4.78 | % | 4.73 | % | $ | (110 | ) | ||||
March 2025 3-Month SOFR futures (Dec 2024 - Mar 2025 Hedge Period) | 129,250 | 4.23 | % | 4.04 | % | (242 | ) | ||||||
June 2025 3-Month SOFR futures (Mar 2025 - Jun 2025 Hedge Period) | 129,000 | 3.77 | % | 3.52 | % | (333 | ) | ||||||
September 2025 3-Month SOFR futures (Jun 2025 - Sep 2025 Hedge Period) | 129,000 | 3.49 | % | 3.21 | % | (356 | ) | ||||||
December 2025 3-Month SOFR futures (Sep 2025 - Dec 2025 Hedge Period) | 129,000 | 3.31 | % | 3.07 | % | (320 | ) | ||||||
March 2026 3-Month SOFR futures (Dec 2025 - Mar 2026 Hedge Period) | 129,000 | 3.21 | % | 3.00 | % | (275 | ) | ||||||
June 2026 3-Month SOFR futures (Mar 2026 - Jun 2026 Hedge Period) | 104,000 | 3.15 | % | 2.97 | % | (178 | ) | ||||||
September 2026 3-Month SOFR futures (Jun 2026 - Sep 2026 Hedge Period) | 104,000 | 3.11 | % | 2.98 | % | (137 | ) | ||||||
December 2026 3-Month SOFR futures (Sep 2026 - Dec 2026 Hedge Period) | 29,000 | 3.34 | % | 3.01 | % | (96 | ) | ||||||
March 2027 3-Month SOFR futures (Dec 2026 - Mar 2027 Hedge Period) | 16,250 | 3.10 | % | 3.04 | % | (10 | ) |
(1) | Open equity represents the cumulative gains (losses) recorded on open futures positions from inception. |
(2) | 10-Year T-Note futures contracts were valued at a price of |
The table below presents information related to the Company’s interest rate swap positions at September 30, 2024.
($ in thousands) | ||||||||||||
Average | ||||||||||||
Fixed | Average | Average | ||||||||||
Notional | Pay | Receive | Maturity | |||||||||
Amount | Rate | Rate | (Years) | |||||||||
Expiration > 1 to ≤ 5 years | $ | 1,450,000 | 1.69 | % | 5.41 | % | 3.6 | |||||
Expiration > 5 years | 2,036,800 | 3.55 | % | 5.35 | % | 7.2 | ||||||
$ | 3,486,800 | 2.78 | % | 5.37 | % | 5.7 | ||||||
The following table summarizes our contracts to sell TBA securities as of September 30, 2024.
($ in thousands) | ||||||||||||||
Notional | ||||||||||||||
Amount | Net | |||||||||||||
Long | Cost | Market | Carrying | |||||||||||
(Short)(1) | Basis(2) | Value(3) | Value(4) | |||||||||||
September 30, 2024 | ||||||||||||||
30-Year TBA securities: | ||||||||||||||
$ | (300,000 | ) | $ | (271,195 | ) | $ | (269,027 | ) | $ | 2,168 | ||||
$ | (300,000 | ) | $ | (271,195 | ) | $ | (269,027 | ) | $ | 2,168 |
(1) | Notional amount represents the par value (or principal balance) of the underlying Agency RMBS. |
(2) | Cost basis represents the forward price to be paid (received) for the underlying Agency RMBS. |
(3) | Market value represents the current market value of the TBA securities (or of the underlying Agency RMBS) as of period-end. |
(4) | Net carrying value represents the difference between the market value and the cost basis of the TBA securities as of period-end and is reported in derivative assets (liabilities) at fair value in our balance sheets. |
Dividends
In addition to other requirements that must be satisfied to qualify as a REIT, we must pay annual dividends to our stockholders of at least
(in thousands, except per share data) | ||||||
Year | Per Share Amount | Total | ||||
2013 | $ | 6.975 | $ | 4,662 | ||
2014 | 10.800 | 22,643 | ||||
2015 | 9.600 | 38,748 | ||||
2016 | 8.400 | 41,388 | ||||
2017 | 8.400 | 70,717 | ||||
2018 | 5.350 | 55,814 | ||||
2019 | 4.800 | 54,421 | ||||
2020 | 3.950 | 53,570 | ||||
2021 | 3.900 | 97,601 | ||||
2022 | 2.475 | 87,906 | ||||
2023 | 1.800 | 81,127 | ||||
2024 - YTD(1) | 1.200 | 76,738 | ||||
Totals | $ | 67.650 | $ | 685,335 |
(1) | On October 16, 2024, the Company declared a dividend of |
Book Value Per Share
The Company's book value per share at September 30, 2024 was
Capital Allocation and Return on Invested Capital
The Company allocates capital to two RMBS sub-portfolios, the pass-through RMBS portfolio, consisting of mortgage pass-through certificates issued by Fannie Mae, Freddie Mac or Ginnie Mae (the “GSEs”) and collateralized mortgage obligations (“CMOs”) issued by the GSEs (“PT RMBS”), and the structured RMBS portfolio, consisting of interest-only (“IO”) and inverse interest-only (“IIO”) securities. As of September 30, 2024, approximately
The table below details the changes to the respective sub-portfolios during the quarter.
(in thousands) | |||||||||||||||||||
Portfolio Activity for the Quarter | |||||||||||||||||||
Structured Security Portfolio | |||||||||||||||||||
Inverse | |||||||||||||||||||
Pass- | Interest | Interest | |||||||||||||||||
Through | Only | Only | |||||||||||||||||
Portfolio | Securities | Securities | Sub-total | Total | |||||||||||||||
Market value - June 30, 2024 | $ | 4,509,084 | $ | 16,447 | $ | 224 | $ | 16,671 | $ | 4,525,755 | |||||||||
Securities purchased | 959,202 | - | - | - | 959,202 | ||||||||||||||
Securities sold | (66,509 | ) | - | - | - | (66,509 | ) | ||||||||||||
Gains on sales | 510 | - | - | - | 510 | ||||||||||||||
Return of investment | n/a | (581 | ) | - | (581 | ) | (581 | ) | |||||||||||
Pay-downs | (137,137 | ) | n/a | n/a | n/a | (137,137 | ) | ||||||||||||
Discount accretion due to pay-downs | 5,048 | n/a | n/a | n/a | 5,048 | ||||||||||||||
Mark to market gains (losses) | 156,871 | (484 | ) | 129 | (355 | ) | 156,516 | ||||||||||||
Market value - September 30, 2024 | $ | 5,427,069 | $ | 15,382 | $ | 353 | $ | 15,735 | $ | 5,442,804 | |||||||||
The tables below present the allocation of capital between the respective portfolios at September 30, 2024 and June 30, 2024, and the return on invested capital for each sub-portfolio for the three month period ended September 30, 2024.
($ in thousands) | ||||||||||||||||||||
Capital Allocation | ||||||||||||||||||||
Structured Security Portfolio | ||||||||||||||||||||
Inverse | ||||||||||||||||||||
Pass- | Interest | Interest | ||||||||||||||||||
Through | Only | Only | ||||||||||||||||||
Portfolio | Securities | Securities | Sub-total | Total | ||||||||||||||||
September 30, 2024 | ||||||||||||||||||||
Market value | $ | 5,427,069 | $ | 15,382 | $ | 353 | $ | 15,735 | $ | 5,442,804 | ||||||||||
Cash | 333,717 | - | - | - | 333,717 | |||||||||||||||
Borrowings(1) | (5,230,871 | ) | - | - | - | (5,230,871 | ) | |||||||||||||
Total | $ | 529,915 | $ | 15,382 | $ | 353 | $ | 15,735 | $ | 545,650 | ||||||||||
% of Total | 97.1 | % | 2.8 | % | 0.1 | % | 2.9 | % | 100.0 | % | ||||||||||
June 30, 2024 | ||||||||||||||||||||
Market value | $ | 4,509,084 | $ | 16,447 | $ | 224 | $ | 16,671 | $ | 4,525,755 | ||||||||||
Cash | 257,011 | - | - | - | 257,011 | |||||||||||||||
Borrowings(2) | (4,345,704 | ) | - | - | - | (4,345,704 | ) | |||||||||||||
Total | $ | 420,391 | $ | 16,447 | $ | 224 | $ | 16,671 | $ | 437,062 | ||||||||||
% of Total | 96.2 | % | 3.8 | % | 0.1 | % | 3.8 | % | 100.0 | % |
(1) | At September 30, 2024, there were outstanding repurchase agreement balances of |
(2) | At June 30, 2024, there were outstanding repurchase agreement balances of |
The return on invested capital in the PT RMBS and structured RMBS portfolios was approximately
($ in thousands) | ||||||||||||||||||||
Returns for the Quarter Ended September 30, 2024 | ||||||||||||||||||||
Structured Security Portfolio | ||||||||||||||||||||
Inverse | ||||||||||||||||||||
Pass- | Interest | Interest | ||||||||||||||||||
Through | Only | Only | ||||||||||||||||||
Portfolio | Securities | Securities | Sub-total | Total | ||||||||||||||||
Income (net of borrowing cost) | $ | 21 | $ | 319 | $ | - | $ | 319 | $ | 340 | ||||||||||
Realized and unrealized gains (losses) | 162,429 | (484 | ) | 129 | (355 | ) | 162,074 | |||||||||||||
Derivative losses | (140,825 | ) | n/a | n/a | n/a | (140,825 | ) | |||||||||||||
Total Return | $ | 21,625 | $ | (165 | ) | $ | 129 | $ | (36 | ) | $ | 21,589 | ||||||||
Beginning Capital Allocation | $ | 420,391 | $ | 16,447 | $ | 224 | $ | 16,671 | $ | 437,062 | ||||||||||
Return on Invested Capital for the Quarter(1) | 5.1 | % | (1.0 | )% | 57.6 | % | (0.2 | )% | 4.9 | % | ||||||||||
Average Capital Allocation(2) | $ | 475,153 | $ | 15,915 | $ | 289 | $ | 16,204 | $ | 491,357 | ||||||||||
Return on Average Invested Capital for the Quarter(3) | 4.6 | % | (1.0 | )% | 44.6 | % | (0.2 | )% | 4.4 | % |
(1) | Calculated by dividing the Total Return by the Beginning Capital Allocation, expressed as a percentage. |
(2) | Calculated using two data points, the Beginning and Ending Capital Allocation balances. |
(3) | Calculated by dividing the Total Return by the Average Capital Allocation, expressed as a percentage. |
Stock Offerings
On October 29, 2021, we entered into an equity distribution agreement (the “October 2021 Equity Distribution Agreement”) with four sales agents pursuant to which we could offer and sell, from time to time, up to an aggregate amount of
On March 7, 2023, we entered into an equity distribution agreement (the “March 2023 Equity Distribution Agreement”) with three sales agents pursuant to which we could offer and sell, from time to time, up to an aggregate amount of
On June 11, 2024, we entered into an equity distribution agreement (the “June 2024 Equity Distribution Agreement”) with three sales agents pursuant to which we may offer and sell, from time to time, up to an aggregate amount of
Stock Repurchase Program
On July 29, 2015, the Company’s Board of Directors authorized the repurchase of up to 400,000 shares of our common stock. The timing, manner, price and amount of any repurchases is determined by the Company in its discretion and is subject to economic and market conditions, stock price, applicable legal requirements and other factors. The authorization does not obligate the Company to acquire any particular amount of common stock and the program may be suspended or discontinued at the Company’s discretion without prior notice. On February 8, 2018, the Board of Directors approved an increase in the stock repurchase program for up to an additional 904,564 shares of the Company’s common stock. Coupled with the 156,751 shares remaining from the original 400,000 share authorization, the increased authorization brought the total authorization to 1,061,316 shares, representing
From the inception of the stock repurchase program through September 30, 2024, the Company repurchased a total of 5,144,602 shares at an aggregate cost of approximately
Earnings Conference Call Details
An earnings conference call and live audio webcast will be hosted Friday, October 25, 2024, at 10:00 AM ET. Participants can register and receive dial-in information at https://register.vevent.com/register/BI631347493dd04b38aa589f3e4b9f5a6d. A live audio webcast of the conference call can be accessed at https://edge.media-server.com/mmc/p/9wgzmhx7 or via the investor relations section of the Company's website at https://ir.orchidislandcapital.com. An audio archive of the webcast will be available for 30 days after the call.
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 CMOs issued by the GSEs, and (ii) structured Agency RMBS, such as IOs, IIOs and principal only securities, among other types of structured Agency RMBS. Orchid is managed by Bimini Advisors, LLC, a registered investment adviser with the Securities and Exchange Commission.
Forward Looking Statements
Statements herein relating to matters that are not historical facts, including, but not limited to statements regarding interest rates, inflation, liquidity, pledging of our structured RMBS, funding levels and spreads, prepayment speeds, portfolio composition, positioning and repositioning, hedging levels, leverage ratio, dividends, investment and return opportunities, the supply and demand for Agency RMBS and the performance of the Agency RMBS sector generally, the effect of actual or expected actions of the U.S. government, including the Fed, market expectations, capital raising, future opportunities and prospects of the Company and general economic conditions, are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. The reader is cautioned that such forward-looking statements are based on information available at the time and on management's good faith belief with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in such forward-looking statements. Important factors that could cause such differences are described in Orchid Island Capital, Inc.'s filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Orchid Island Capital, Inc. assumes no obligation to update forward-looking statements to reflect subsequent results, changes in assumptions or changes in other factors affecting forward-looking statements.
CONTACT:
Orchid Island Capital, Inc.
Robert E. Cauley, 772-231-1400
Chairman and Chief Executive Officer
https://ir.orchidislandcapital.com
Summarized Financial Statements
The following is a summarized presentation of the unaudited balance sheets as of September 30, 2024, and December 31, 2023, and the unaudited quarterly statements of operations for the nine and three months ended September 30, 2024 and 2023. Amounts presented are subject to change.
ORCHID ISLAND CAPITAL, INC. |
BALANCE SHEETS |
($ in thousands, except per share data) |
(Unaudited - Amounts Subject to Change) |
September 30, 2024 | December 31, 2023 | |||||||
ASSETS: | ||||||||
Mortgage-backed securities, at fair value | $ | 5,442,804 | $ | 3,894,012 | ||||
U.S. Treasury securities, available-for-sale | 99,467 | 148,820 | ||||||
Cash, cash equivalents and restricted cash | 333,717 | 200,289 | ||||||
Accrued interest receivable | 22,868 | 14,951 | ||||||
Derivative assets, at fair value | 16,846 | 6,420 | ||||||
Receivable for investment securities and TBA transactions | 177 | - | ||||||
Other assets | 614 | 455 | ||||||
Total Assets | $ | 5,916,493 | $ | 4,264,947 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Repurchase agreements | $ | 5,230,871 | $ | 3,705,649 | ||||
Payable for investment securities and TBA transactions | 68 | 60,454 | ||||||
Dividends payable | 9,396 | 6,222 | ||||||
Derivative liabilities, at fair value | - | 12,694 | ||||||
Accrued interest payable | 16,372 | 7,939 | ||||||
Due to affiliates | 1,177 | 1,013 | ||||||
Other liabilities | 2,585 | 1,031 | ||||||
Total Liabilities | 5,260,469 | 3,795,002 | ||||||
Total Stockholders' Equity | 656,024 | 469,945 | ||||||
Total Liabilities and Stockholders' Equity | $ | 5,916,493 | $ | 4,264,947 | ||||
Common shares outstanding | 78,082,645 | 51,636,074 | ||||||
Book value per share | $ | 8.40 | $ | 9.10 | ||||
ORCHID ISLAND CAPITAL, INC. |
STATEMENTS OF COMPREHENSIVE INCOME (LOSS) |
($ in thousands, except per share data) |
(Unaudited - Amounts Subject to Change) |
Nine Months Ended September 30, | Three Months Ended September 30, | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Interest income | $ | 169,581 | $ | 128,030 | $ | 67,646 | $ | 50,107 | ||||||||
Interest expense | (172,428 | ) | (149,593 | ) | (67,306 | ) | (58,705 | ) | ||||||||
Net interest (expense) income | (2,847 | ) | (21,563 | ) | 340 | (8,598 | ) | |||||||||
Gains (losses) on RMBS and derivative contracts | 47,351 | (30,323 | ) | 21,249 | (66,890 | ) | ||||||||||
Net portfolio income (loss) | 44,504 | (51,886 | ) | 21,589 | (75,488 | ) | ||||||||||
Expenses | 12,387 | 14,467 | 4,269 | 4,644 | ||||||||||||
Net income (loss) | $ | 32,117 | $ | (66,353 | ) | $ | 17,320 | $ | (80,132 | ) | ||||||
Other comprehensive income | 38 | 16 | 48 | 16 | ||||||||||||
Comprehensive net income (loss) | $ | 32,155 | $ | (66,337 | ) | $ | 17,368 | $ | (80,116 | ) | ||||||
Basic and diluted net income (loss) per share | $ | 0.53 | $ | (1.58 | ) | $ | 0.24 | $ | (1.68 | ) | ||||||
Weighted Average Shares Outstanding | 60,700,959 | 42,103,532 | 72,377,373 | 47,773,409 | ||||||||||||
Dividends Declared Per Common Share: | $ | 1.080 | $ | 0.960 | $ | 0.360 | $ | 0.480 | ||||||||
Three Months Ended September 30, | ||||||||
Key Balance Sheet Metrics | 2024 | 2023 | ||||||
Average RMBS(1) | $ | 4,984,279 | $ | 4,447,098 | ||||
Average repurchase agreements(1) | 4,788,287 | 4,314,332 | ||||||
Average stockholders' equity(1) | 605,978 | 478,463 | ||||||
Adjusted leverage ratio - as of period end(2) | 8.0:1 | 9.5:1 | ||||||
Economic leverage ratio - as of period end(3) | 7.6:1 | 8.5:1 | ||||||
Key Performance Metrics | ||||||||
Average yield on RMBS(4) | 5.43 | % | 4.51 | % | ||||
Average cost of funds(4) | 5.62 | % | 5.44 | % | ||||
Average economic cost of funds(5) | 2.96 | % | 3.18 | % | ||||
Average interest rate spread(6) | (0.19 | )% | (0.93 | )% | ||||
Average economic interest rate spread(7) | 2.47 | % | 1.33 | % |
(1) | Average RMBS, borrowings and stockholders’ equity balances are calculated using two data points, the beginning and ending balances. |
(2) | The adjusted leverage ratio is calculated by dividing ending repurchase agreement liabilities by ending stockholders’ equity. |
(3) | The economic leverage ratio is calculated by dividing ending total liabilities adjusted for net notional TBA positions by ending stockholders' equity. |
(4) | Portfolio yields and costs of funds are calculated based on the average balances of the underlying investment portfolio/borrowings balances and are annualized for the quarterly periods presented. |
(5) | Represents the interest cost of our borrowings and the effect of derivative agreements attributed to the period related to hedging activities, divided by average borrowings. |
(6) | Average interest rate spread is calculated by subtracting average cost of funds from average yield on RMBS. |
(7) | Average economic interest rate spread is calculated by subtracting average economic cost of funds from average yield on RMBS. |
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