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Mar 31, 2021
Orchid Island Q1 2021 Earnings Report
Orchid Island Capital reported a net loss for Q1 2021, driven by net realized and unrealized losses on RMBS and derivative instruments, while net interest income provided a positive contribution.
Key Takeaways
Orchid Island Capital reported a net loss of $29.4 million, or $0.34 per common share, for the first quarter of 2021. The results were impacted by net realized and unrealized losses on RMBS and derivative instruments, although net interest income contributed positively. The company's book value per common share stood at $4.94 at the end of the quarter.
Net loss of $29.4 million, or $0.34 per common share, was reported.
Net interest income was $24.9 million, or $0.29 per common share.
Net realized and unrealized losses on RMBS and derivative instruments totaled $50.8 million, or $0.60 per common share.
Book value per common share was $4.94 at March 31, 2021.
Forward Guidance
Orchid Island Capital anticipates that the portfolio should continue to generate attractive yields, barring another episode of extreme market volatility.
Positive Outlook
- The portfolio's low-coupon bias has increased.
- The concentration in higher quality specified pools has decreased.
- The combination of higher rates/lower dollar prices and the reduction in higher quality specified pools lowered the weighted average price of the portfolio by 2.8 basis points.
- The company expects these developments to lead to lower premium amortization rates going forward.
- The company believes that the current portfolio construction should perform well in the current, higher rate environment.
Challenges Ahead
- The substantial move in the market and the increase in rates during the first quarter of 2021 negatively impacted the company's book value.
- The company repositioned hedge positions and eliminated lower coupon dollar roll positions pending a stabilization in rates.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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