NYSE$ORC

Orchid Island Ca · Q1 2020 earnings

Q1 2020 earnings · · Investor relations

Briefing

Orchid Island Capital reported a net loss for Q1 2020, impacted by the COVID-19 pandemic and related market conditions.

Orchid Island Capital reported a net loss of $91.2 million for the first quarter of 2020, primarily due to net realized and unrealized losses on RMBS and derivative instruments resulting from the COVID-19 pandemic's impact on financial markets. The company sold approximately $1.8 billion of RMBS and terminated interest rate swap positions to maintain liquidity and satisfy margin calls. Despite the losses, Orchid Island Capital maintained sufficient cash and liquidity and intends to continue paying monthly cash dividends.

  • Net loss of $91.2 million, or $1.41 per common share, was reported.
  • Net interest income was $19.1 million, or $0.30 per common share.
  • Net realized and unrealized losses on RMBS and derivative instruments totaled $108.2 million, or $1.68 per share.
  • A dividend of $0.24 per common share was declared and paid for the first quarter.

Headline financials

Total Revenue

$19.1M

Previous: $13.5M+41.4%
EPS (adj)

-$7.05

Previous: $1.10-740.9%
Constant prepayment rate

11.9%

No prior period
Leverage ratio

9.3

No prior period
Avg. yield on RMBS

4.4%

No prior period
Avg. cost of funds

2.1%

No prior period
Interest rate spread

2.3%

No prior period
Net Income

-$91.2M

Previous: $10.6M-960.6%
Operating Income

-$89.1M

No prior period
Cash & Equivalents

$201M

Previous: $126M+60.0%
Total Assets

$3.16B

Previous: $3.26B-2.9%

Revenue & EPS history

Orchid Island · Revenue · Quarterly

$19.1M

Q1 2020+41.4%vs Q1 2019
Beat estimate in 5 of 16 quarters(31%)
ActualEstimate

Forward guidance

Orchid Island Capital expects to largely continue to operate as before, albeit with a smaller portfolio, and intends to continue to pay monthly cash dividends. The company believes its portfolio is well-positioned to withstand elevated levels of prepayments, and it benefits from lower funding costs.

Tailwinds

  • Company expects to continue to operate.
  • Company intends to continue to pay monthly cash dividends.
  • Portfolio retains significant call protection.
  • Company is well positioned to withstand elevated levels of prepayments.
  • Company has lower funding costs to cushion the blow of a reduced portfolio size.

Headwinds

  • Economy remains entrenched in a steep contraction.
  • There is no assurance that the Fed and the Trump administration will be able to do enough to stabilize the economy and markets.
  • There remains too much uncertainty to predict when the economy will recover, or to what extent it will recover.
  • There is uncertainty about the level of prepayment activity.
  • The impact of the pandemic has meaningfully impacted the ability of many Americans to meet their monthly mortgage payments.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2020

Historical avgQ1 2020

-1.0%

Avg return

Earnings day

-2.1%

Avg return

5 days after

-3.7%

Avg return

30 days after

44%

25 / 57 earnings

Positive

+7.5%

Q4 2023

Best reaction

-12.4%

Q4 2016

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+3.2%+2.8%-1.2%
Q4 2025-5.7%-7.4%-10.0%
Q3 2025+2.7%-0.5%-3.2%
Q2 2025+1.2%-2.1%-2.3%
Q1 2025+5.1%+3.2%-0.1%
Q3 2024+1.4%+0.9%-1.4%
Q2 2024+1.3%+3.1%+4.5%
Q1 2024+1.0%-3.5%-0.7%
Q4 2023+7.5%+3.4%+8.5%
Q3 2023-1.3%+2.6%+20.8%
Q2 2023-4.0%-6.1%-14.5%
Q1 2023-1.8%-12.8%-7.5%
Q4 2022+1.7%-0.6%-8.9%
Q3 2022-0.1%+0.2%+8.0%
Q2 2022-1.9%-1.9%-19.9%
Q1 2022-4.1%+2.4%+5.2%
Q4 2021-4.8%-11.2%-5.9%
Q3 2021-1.2%-1.2%-4.4%
Q2 2021-3.1%-4.1%+0.2%
Q1 2021-1.4%-1.8%-2.0%
Q4 2020-2.1%-1.0%+2.4%
Q3 2020+1.2%+3.3%+6.8%
Q2 2020+1.2%-2.2%+1.4%
Q1 2020-5.1%-6.8%+2.0%
Q4 2019+3.2%-2.2%-59.4%
Q3 2019-4.1%-3.8%-2.9%
Q2 2019+0.6%+0.6%-13.0%
Q1 2019-1.0%-4.6%-4.9%
Q4 2018-0.6%-1.1%-3.8%
Q3 2018-3.8%-6.9%-2.2%
Q2 2018-2.1%-1.9%-4.0%
Q1 2018-2.9%-6.6%-1.9%
Q4 2017-2.7%+1.4%-2.7%
Q3 2017+2.7%-0.9%-1.6%
Q2 2017+1.7%+0.5%+2.4%
Q1 2017-3.8%-2.6%-8.3%
Q4 2016-12.4%-17.5%-18.8%
Q3 2016+3.3%+3.8%+2.9%
Q2 2016+1.1%+1.3%-3.4%
Q1 2016-10.6%
Q4 2015+3.0%
Q3 2015-10.4%
Q2 2015+3.7%
Q1 2015-0.4%
Q4 2014-6.5%
Q3 2014+0.1%
Q2 2014-0.3%
Q1 2014+1.5%
Q4 2013+1.8%
Q3 2013-0.9%
Q3 2012-0.9%
Q2 2012+0.9%
Q2 2013-1.1%
Q1 2013+0.2%
Q1 2012+0.2%
Q4 2011-3.3%
Q4 2012-3.3%
Q3 2011
Q2 2011
Q1 2011

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