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Jun 30, 2020
Orchid Island Q2 2020 Earnings Report
Orchid Island Capital reported net income for the second quarter of 2020.
Key Takeaways
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.
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.
Positive Outlook
- 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.
Challenges Ahead
- 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.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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