Orchid Island Capital (ORC) Q2 2024 earnings summary

Executive summary

• Reported a net loss of $5.0 million, or $0.09 per share, for Q2 2024, reversing from net income in the prior quarter and Q2 2023.

• Book value per share declined to $8.58 at June 30, 2024, from $9.12 sequentially and $9.10 at year-end.

• Total return for Q2 2024 was -1.97%, compared to 4.18% in Q1 2024.

• Declared and paid $0.36 per share in dividends for Q2 2024.

• Portfolio size increased by 16.6% during the quarter, supported by $100.7 million in new equity capital.

Financial highlights

• Interest income for Q2 2024 was $53.1 million, up $13.2 million year-over-year; net interest expense was $0.7 million.

• Economic income per share was $0.50, stable over the last three quarters.

• Net realized and unrealized gains on RMBS and derivatives totaled $0.1 million.

• Liquidity stood at $265.3 million, representing 48% of stockholders' equity.

• Repurchase obligations totaled $4,345.7 million at a weighted average borrowing rate of 5.46%.

Outlook and guidance

• Management expects the Fed may begin rate cuts in 2024, with market expectations for two to three 25 bps cuts by year-end.

• Portfolio positioned for a steepening or inverted yield curve and low prepayment activity, with attractive investment opportunities if monetary policy eases.

• Management remains comfortable with current positioning and expects stable book value and attractive income.