Financial Data and Key Metrics Changes - Orchid Island Capital reported a net income of $0.24 per share for Q3 2024, compared to a loss of $0.09 in Q2 2024 [4] - Book value decreased from $8.58 to $8.40, while total return for the quarter was positive at 2.1% [4] - The company declared dividends of $3.12 for the quarter, and liquidity was slightly up compared to Q2 [4] Business Line Data and Key Metrics Changes - The portfolio's average balances increased significantly during the quarter, with a 20% growth in the portfolio size due to the issuance of $110 million in shares [12][13] - The weighted average coupon rose by 22 basis points from 4.72% to 4.94%, and the yield on the portfolio expanded by approximately 38 basis points from 5.05% to 5.43% [13] Market Data and Key Metrics Changes - Mortgage speeds increased modestly from 7.6% to 8.8% during the quarter, influenced by a rally in rates [4] - The spread of mortgages to the 10-year treasury increased from 132 basis points to over 142 basis points, indicating a significant reversal in the market [8] - The MOVE index, which measures volatility, trended higher, indicating elevated market uncertainty [10] Company Strategy and Development Direction - The company has adopted a barbell strategy with a bias towards higher coupon mortgages, aiming to position itself favorably in the current market conditions [22] - Management expressed a cautious outlook regarding the potential for further Fed easing, indicating that the market may have overestimated the timing and extent of rate cuts [22][54] Management's Comments on Operating Environment and Future Outlook - Management noted a resilient economy, with GDP growth expected around 3%, suggesting that rates may not decline significantly in the near term [7] - The upcoming election is viewed as a wildcard that could impact market conditions, with potential implications for economic growth and interest rates [6][7] - Management acknowledged the uncertainty in the market and the challenges posed by volatility, which is expected to remain elevated [28] Other Important Information - The company raised $110 million through its ATM program, leading to a substantial increase in its portfolio size [12] - Management highlighted the importance of maintaining a defensive posture in the current economic environment, with a focus on managing leverage and maintaining dividend levels [54] Q&A Session Summary Question: Does the purchase of higher coupon mortgages reflect an expectation of little relief in benchmark mortgage rates? - Management indicated a bias towards higher coupons due to the potential for rates to rise, suggesting that the outlook is asymmetric with more room for rates to increase than decrease [24][25] Question: What is the risk appetite regarding the swap position and expected volatility? - Management noted that while the portfolio grew by 20%, the swap positions did not increase proportionately, reflecting a cautious approach amid expected volatility [27][28] Question: How does the company view the potential for a bear steepening of the yield curve? - Management expressed concern that a bear steepening could negatively impact the portfolio, particularly higher coupon securities, but indicated a willingness to adjust leverage to maintain yield [33][34] Question: How does the company assess overall performance and shareholder return? - Management emphasized a focus on total return and indicated a potential shift towards under-distribution to retain capital in light of current market conditions [54][56]

Financial Performance - Net income for the nine months ended September 30, 2024, was $32.1 million, or $0.53 per share, compared to a net loss of $66.4 million, or $1.58 per share, for the same period in 2023[119] - The company reported a net loss of $66.353 million for the three months ended September 30, 2023, with a net loss per share of $1.58, while for the same period in 2024, the net income was $17.320 million, translating to a net income per share of $0.24[125] - The company reported net portfolio income of $44.5 million for the nine months ended September 30, 2024, compared to a net loss of $51.9 million for the same period in 2023, indicating a change of $96.4 million[119] - Economic net interest income for the nine months ended September 30, 2024, was $86.1 million, compared to $45.6 million for the same period in 2023, indicating a substantial improvement in economic performance[138] Interest Income and Expenses - Interest income increased by $41.6 million to $169.6 million for the nine months ended September 30, 2024, compared to $128.0 million for the same period in 2023[119] - Interest income from RMBS assets for the nine months ended September 30, 2024, was $169.6 million, an increase of $41.6 million from $128.0 million in the same period of 2023, driven by a 106 basis point increase in yield[136] - Total interest expense for the nine months ended September 30, 2024, was $172,428 thousand, up from $149,593 thousand in the same period of 2023, a rise of 15%[151] - The company incurred net interest expense of $2.8 million for the nine months ended September 30, 2024, compared to $21.6 million for the same period in 2023, reflecting a significant decrease in net interest expense[136] Shareholder Activities - The company repurchased a total of 5,144,602 shares at an aggregate cost of approximately $77.5 million, with a weighted average price of $15.07 per share since the inception of the stock repurchase program[115] - The company issued a total of 24,675,497 shares under the March 2023 Equity Distribution Agreement for aggregate gross proceeds of approximately $228.8 million[111] - The company issued a total of 15,309,022 shares under the June 2024 Equity Distribution Agreement for aggregate gross proceeds of approximately $128.6 million, with net proceeds of approximately $126.5 million[191] Risk Management - The company utilized various derivative instruments to hedge interest rate risks, which are not included in GAAP interest expense, allowing for a clearer view of economic interest expense[129] - The company faces liquidity risk due to financing long-term assets with shorter-term borrowings, which could lead to increased margin calls if the value of pledged Agency RMBS or derivative instruments decreases[233] - Counterparty credit risk exists related to potential losses if counterparties to repurchase agreements and derivative contracts fail to perform, despite efforts to mitigate this risk through collateral adjustments[236] Market Conditions - The Fed lowered the Fed Funds rate by 50 basis points in late September 2024, marking the first interest rate cut since March 2023, which is expected to impact the company's operations positively[194] - The anticipated increase in mortgage refinance applications following the Fed Funds rate cut in September 2024 may accelerate the balance sheet reduction process[201] - The Agency RMBS index generated a total return of 0.2% for Q2 2024, compared to 4.3% for the S&P 500, indicating modest performance in the risk asset category[199] Operational Efficiency - Total expenses for the nine months ended September 30, 2024, were $12.4 million, a decrease of $2.1 million from $14.5 million for the same period in 2023[119] - Management fees for the nine months ended September 30, 2024, were $6,867,000, a decrease of $1,349,000 (16.4%) compared to $8,216,000 for the same period in 2023[162] - The company has sufficient short-term and long-term liquidity and capital resources for acquisitions, repayments on borrowings, and dividend payments[180] Dividend Information - The company intends to pay regular monthly dividends, having declared a dividend of $0.12 per share to be paid on November 27, 2024[217] - The company reported a total dividend payout of $67.65 per share since its IPO, amounting to $685.335 million[217] Portfolio Performance - The RMBS portfolio as of September 30, 2024, consisted of $5,442.8 million in Agency RMBS at fair value, with a weighted average coupon of 4.90%[169] - Unrealized gains on RMBS for the nine months ended September 30, 2024, were $161.919 million, compared to a loss of $210.159 million in the same period of 2023[159] - The average RMBS held increased to $4,984,279 thousand for the three months ended September 30, 2024, compared to $4,447,098 thousand for the same period in 2023, reflecting a growth of 12%[141] Economic Indicators - The 30-year fixed-rate mortgage rate as of September 30, 2024, was 6.08%, down from 7.31% in the same period of 2023[157] - The average 10-year U.S. Treasury rate as of September 30, 2024, was 3.80%, down from 4.57% in the same period of 2023[157] - The average SOFR for the three months ended September 30, 2024, was 5.16%, compared to 5.32% for the same period in 2023, indicating a decrease of 0.16%[152] Internal Controls - There were no significant changes in the company's internal control over financial reporting during the most recent fiscal quarter that materially affected its effectiveness[239] - The company has effective disclosure controls and procedures in place, ensuring timely communication of information to management[238]

Financial Performance - The company reported net income of $17320 thousand, or $0.24 per share, for Q3 2024 [7] - Book value decreased from $8.58 in Q2 2024 to $8.40 in Q3 2024, a decrease of 1.97% [5] - The total return for Q3 2024 was 2.10% [5] - The company declared a dividend of $0.36 per share for both Q2 and Q3 2024 [5] Portfolio Characteristics - The average MBS balances were $4203 million in Q3 2024, compared to $4984 million in Q2 2024 [5] - The economic leverage ratio increased from 7.1 in Q2 2024 to 7.6 in Q3 2024 [5] - The portfolio's weighted average coupon increased from 4.72% on June 30, 2024, to 4.94% on September 30, 2024 [21, 25] - The realized yield on the portfolio increased from 5.05% to 5.43% between June 30, 2024, and September 30, 2024 [21] Hedging and Funding - The company's hedge positions covered approximately 76% of its repo funding liability (excluding TBA shorts) [29] - The total notional balance of hedge positions (excluding short TBAs) was $(3955.2) million [29] - The company held short TBA positions of $(300.0) million (FNCL 3.0) [29]

VERO BEACH, Fla., Oct. 24, 2024 (GLOBE NEWSWIRE) -- Orchid Island Capital, Inc. (NYSE:ORC) ("Orchid” or the "Company"), a real estate investment trust ("REIT"), today announced results of operations for the three month period ended September 30, 2024. Third Quarter 2024 Results Net income of $17.3 million, or $0.24 per common share, which consists of:Net interest income of $0.3 million, or less than $0.01 per common shareTotal expenses of $4.3 million, or $0.06 per common shareNet realized and unrealized ga ...

VERO BEACH, Fla., Oct. 07, 2024 (GLOBE NEWSWIRE) -- Orchid Island Capital, Inc. (NYSE:ORC) ("Orchid" or the "Company"), a real estate investment trust ("REIT"), today announced that it will release results for the third quarter of 2024 following the close of trading on the New York Stock Exchange on Thursday, October 24, 2024. Earnings Conference Call Details An earnings conference call and live audio webcast will be hosted Friday, October 25, 2024, at 10:00 AM ET. Participants can register and receive dial ...

TORTOLA, British Virgin Islands, Aug. 22, 2024 (GLOBE NEWSWIRE) -- Orca Energy Group Inc. ("Orca" or the "Company" and includes its subsidiaries and affiliates) (TSX-V: ORC.A, ORC.B) today announces that it has filed its condensed consolidated interim financial statements and management's discussion and analysis for the three and six month periods ended June 30, 2024 ("Q2 2024") with the Canadian securities regulatory authorities. All amounts are in United States dollars ("$") unless otherwise stated. Highl ...

TORTOLA, British Virgin Islands, Aug. 21, 2024 (GLOBE NEWSWIRE) -- Orca Energy Group Inc. ("Orca" or the "Company") (TSX-V: ORC.A, ORC.B) today announced that its Board of Directors has declared a quarterly cash dividend of $0.10 (Cdn) per Class A Common Voting Share ("Class A Shares") of the Company and $0.10 (Cdn) per Class B Subordinate Voting Share ("Class B Shares") of the Company. The dividend will be payable on October 14 , 2024 to holders of Class A Shares and Class B Shares of record on September 3 ...

TORTOLA, British Virgin Islands, Aug. 07, 2024 (GLOBE NEWSWIRE) -- Orca Energy Group Inc. ("Orca" or the "Company" and includes its subsidiaries and affiliates) (TSX-V: ORC.A, ORC.B) announces that its 100% wholly-owned subsidiaries, PanAfrican Energy (Tanzania) ("PAET") and Pan African Energy Corporation (Mauritius) ("PAEM"), have issued a notice of dispute in respect of an investment treaty claim under the Agreement on Promotion and Reciprocal Protection of Investment between the Government of the Republi ...

Net Income (Loss)4 Q2 24 Q2 24 $(0.09) $8.58 Total Return 2 Q2 24 Q2 24 (1.97)% $0.36 Orchid Island Capital (NYSE:ORC) reported earnings last week where results were mostly in line with expectations. The company reported a net loss of 9 cents per share for the quarter, and its book value dropped from $9.12 to $8.58 during the quarter. The total return margin carne at -1.97%, significantly down from the previous quarter's 4.18%. Despite these worsening conditions, the company kept its dividend same as before ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Orchid Island Capital, Inc. | --- | --- | |----------------|-------| | | | | | | | | | | | | | | | | 27-3269228 | | | | | | | | | (I.R.S. | | | | | | Identification | | Securities registered pursuant to Section 12(b) of the Act: Indicate by check mark whether the registrant has submitted electronically every Interactive ...