NYSE$ORC

Orchid Island Ca · Q2 2020 earnings

Q2 2020 earnings · · Investor relations

Briefing

Orchid Island Capital reported net income for the second quarter of 2020.

Orchid Island Capital reported a net income of $48.8 million for the second quarter of 2020, a significant increase compared to the $3.5 million reported in the same period last year, driven by net interest income and net portfolio gains.

  • Net income was $48.8 million, or $0.74 per common share.
  • Net interest income was $22.8 million, or $0.34 per common share.
  • Net realized and unrealized gains on RMBS and derivative instruments were $28.7 million, or $0.43 per share.
  • Total dividends declared and paid were $0.165 per common share.

Headline financials

Total Revenue

$22.8M

Previous: $14M+62.4%
EPS (adj)

$3.65

Previous: $0.35+942.9%
Constant prepayment rate

16.3%

No prior period
Leverage ratio

9.7

No prior period
Avg. yield on RMBS

3.5%

No prior period
Avg. cost of funds

0.6%

No prior period
Avg. economic cost of funds

1.4%

No prior period
Interest rate spread

2.9%

No prior period
Economic interest rate spread

2.1%

No prior period
Net Income

$48.8M

Previous: $3.53M+1280.5%
Operating Income

$51.5M

No prior period
Cash & Equivalents

$236M

Previous: $136M+74.1%
Total Assets

$3.7B

Previous: $3.73B-0.7%

Revenue & EPS history

Orchid Island · Revenue · Quarterly

$22.8M

Q2 2020+62.4%vs Q2 2019
Beat estimate in 6 of 16 quarters(38%)
ActualEstimate

Forward guidance

The company anticipates that current rate levels will remain over the short to medium term, which would lead to an abatement of book value volatility and relative performance driven by realized net interest margins. Focus will also remain on managing premium amortization and hedging strategy will utilize volatility linked instruments.

Tailwinds

  • Anticipate current rate levels will remain over the short to medium term.
  • Expect book value volatility to abate.
  • Relative performance to be driven by realized net interest margins.
  • Focus will remain on managing premium amortization.
  • Low level of rates will keep funding levels low and supportive of net interest margin.

Headwinds

  • Economic outlook is very uncertain given the pandemic.
  • Prepayment concerns are paramount in the current environment.
  • High speeds and potential liquidity issues could arise should market conditions deteriorate again.
  • Refinancing activity is robust and likely to become even more so as originators add capacity.
  • The re-emergence of the virus could cause a slowdown in economic activity.

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 Q2 2020

Historical avgQ2 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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