Yahoo Finance Orchid Island Capital Inc (ORC) Q1 2024 Earnings Call Transcript Highlights: Key Financial ...
Net Income: $0.38 in Q1 2024, down from $0.52 in Q4 2023.
Book Value: Increased by $0.02 from the previous quarter.
Total Return: 4.18% in Q1 2024, compared to 6.05% in Q4 2023.
Dividend: Unchanged for the quarter.
Leverage: Increased slightly from 6.7 to 7.
Liquidity: Improved slightly from the end of the previous quarter.
Interest Income: Representative of the number reported for tax purposes.
Interest Expense: Actual dollars paid, consistent for tax reporting.
Gain on Hedge: Close proxy to what is reported for tax purposes.
Adjusted Economic Income Per Share: $0.47 in Q1 2024, above the dividend rate.
Release Date: April 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Hey, good morning. Thanks for taking the question. Can you talk about the repo markets on the overall health and just kind of how they're functioning right now? A: We see no signs of stress. We've actually added some counterparties and we have a few more in the works on and we're looking at some both sponsored repo and on so on through State Street. They are again, they're going to term, but anyway, no, I don't see any stress in the repo markets. We have more than adequate funding, haven't seen changes in haircuts.
Q: Yes, that's helpful color there. And then I see the move up slightly in coupon and kind of hitting that lows and the highs there in the stack. Maybe you continued to add, I guess, higher coupons in the second quarter. It's consistent with the strategy that that's been laid out A: not yet, but that's on that's still on the immediate horizon on. I'm going to be able to use the ATM in the quarter just because we did in wireless blackout and we get it paid off all the labor very modest but the plan is to continue to do that in an immediate future. So when we talk at the end of the second quarter, hopefully that will be much more progress to discuss in that regard. It's been I think there was a slide at the beginning of a deck that showed how pronounced the rate movements have been from October to December and then back to where we are today, [five point five's and six's] were consistent with that barbell strategy we discussed.
Q: Hey, good morning, guys. Here, Macao, I hope you guys are doing well and thanks again for the yes, for the slide deck and in those possible to make a I always tell people this is the best agency mortgage re slide deck. We're like a crash course in agency MBS, investing in some how you guys made it even better. A: Sure. If so, obviously, $0.12, if you look at that slide or forever. It is where we show them. Slide 8, we're running about that. Our proxy for taxable income is running above the dividend. So we will reevaluate it if there's a need for an adjustment. I mean, the obvious adjustments would be higher. But as I said, you have to look backward and forward.
Q: You guys are that the deck is great. And Rob, always like your comments on I thought your stuff on the M2 money supply was really interesting food for thought. A: Yes, that's a good outcome. I mean, as long as we don't get a violent sell-off on the long end. If we start heading north of 5% or [10%] or something we stay around here, the curve stays inverted. Book should be stable and we can earn the dividend on?
Q: Going forward as you assuming that the economy continues to muddle along and the Fed doesn't really do anything, what do you see benefiting more earnings or book value or neither? I mean, look, clarification on that might be helpful. A: I think that's the environment where volatility comes off both into a rally as well as just sort of staying here and being range-bound. Certainly that last six months have been extremely volatile. And so I think as to market processes and what exactly is going to happen when the Fed is going to be involved with a lot of hedges on the front end of the curve.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
