SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 19, 2014 (February 18, 2014)
Orchid Island Capital, Inc.
(Exact Name of Registrant as Specified in Charter)
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Maryland
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001-35236
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27-3269228
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(State or Other Jurisdiction of Incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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3305 Flamingo Drive, Vero Beach, Florida 32963
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code (772) 231-1400
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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¨
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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¨
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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¨
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On February 18, 2014, Orchid Island Capital, Inc. (the “Company”) issued the press release attached hereto as Exhibit 99.1 announcing the Company’s results of operations for the period ended December 31, 2013. The information furnished under this “Item 2.02 Results of Operations and Financial Condition,” including the exhibit related hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any disclosure document of the Company, except as shall be expressly set forth by specific reference in such document.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
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99.1
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Press Release dated February 18, 2014
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Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Date: February19, 2014
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ORCHID ISLAND CAPITAL, INC.
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||
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By:
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/s/ Robert E. Cauley | ||
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Robert E. Cauley
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Chairman and Chief Executive Officer
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Exhibit 99.1
ORCHID ISLAND CAPITAL ANNOUNCES FOURTH QUARTER 2013 RESULTS
VERO BEACH, Fla. (February 18, 2014) – Orchid Island Capital, Inc. (NYSE MKT:ORC) ("Orchid” or the "Company"), a real estate investment trust ("REIT"), today announced results of operations for the three month period ended December 31, 2013.
Fourth Quarter 2013 Highlights
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·
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Net income of $1.4 million, or $0.43 per common share
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·
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Fourth quarter total dividend payments of $0.45 per common share
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·
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Book Value per Share of $13.40 at December 31, 2013
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·
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3.3% economic gain on common equity for the quarter, or 13.1% annualized, comprised of $0.45 dividend per common share and $0.01 decrease in net book value per common share, divided by beginning book value per share
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·
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Company to discuss results on Thursday, February 20, 2014, at 10:00 AM ET
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Details of Fourth Quarter 2013 Results of Operations
The Company reported net income of $1.4 million for the three-month period ended December 31, 2013, compared with a net loss of $0.3 million for the three month period ended December 31, 2012. The fourth quarter net income of $1.4 million included net interest income of $2.5 million, net losses of $0.6 million (which includes mark to market losses, realized gains on securities sold and gains on funding hedges), audit, legal and other professional fees of $0.1 million, management fees of $0.2 million, and other operating, general and administrative expenses of $0.1 million. During the fourth quarter, the Company sold mortgage-backed securities (“MBS”) with a market value at the time of sale of $130.7 million, resulting in realized gains of $0.3 million (based on security prices from September 30, 2013). The remaining net loss on MBS was due to fair value adjustments for the period.
Capital Allocation and Return on Invested Capital
The Company allocates capital to two MBS sub-portfolios, the pass-through MBS portfolio (“PT MBS”), and the structured MBS portfolio, consisting of interest only (“IO”) and inverse interest-only (“IIO”) securities. As of September 30, 2013, approximately 49% of the Company’s investable capital (which consists of equity in pledged PT MBS, available cash and unencumbered assets) was deployed in the PT MBS portfolio. At December 31, 2013, the allocation to the PT MBS had decreased 5% to approximately 44%.
The table below details the changes to the respective sub-portfolios during the quarter, as well as the returns generated by each.
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Portfolio Activity for the Quarter
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||||||||||||||||||||
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Structured Security Portfolio
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||||||||||||||||||||
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Pass-Through
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Interest Only
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Inverse Interest
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||||||||||||||||||
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Portfolio
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Securities
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Only Securities
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Sub-total
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Total
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||||||||||||||||
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Market Value - September 30, 2013
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$ | 311,017,146 | $ | 15,370,698 | $ | 5,399,089 | $ | 20,769,787 | $ | 331,786,933 | ||||||||||
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Securities Purchased
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148,547,890 | 10,431,760 | - | 10,431,760 | 158,979,650 | |||||||||||||||
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Securities Sold
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(122,957,670 | ) | (7,693,921 | ) | - | (7,693,921 | ) | (130,651,591 | ) | |||||||||||
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Gain (Loss) on Sale
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335,301 | (42,750 | ) | - | (42,750 | ) | 292,551 | |||||||||||||
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Return on Investment
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n/a | (1,453,896 | ) | (413,764 | ) | (1,867,660 | ) | (1,867,660 | ) | |||||||||||
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Pay-downs
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(5,657,390 | ) | n/a | n/a | n/a | (5,657,390 | ) | |||||||||||||
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Premium Lost Due to Pay-downs
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(224,331 | ) | n/a | n/a | n/a | (224,331 | ) | |||||||||||||
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Mark to Market (Losses) Gains
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(4,085,773 | ) | 2,593,918 | 56,205 | 2,650,123 | (1,435,650 | ) | |||||||||||||
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Market Value - December 31, 2013
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$ | 326,975,173 | $ | 19,205,809 | $ | 5,041,530 | $ | 24,247,339 | $ | 351,222,512 | ||||||||||
The tables below present the allocation of capital between the respective portfolios at December 31, 2013 and September 30, 2013, and the return on invested capital for each sub-portfolio for the three-month period ended December 31, 2013. The return on invested capital in the PT MBS and structured MBS portfolios was approximately (4.2)% and 12.9%, respectively, for the fourth quarter of 2013. The combined portfolio generated a return on invested capital of approximately 4.6%.
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Capital Allocation
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Structured Security Portfolio
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Pass-Through
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Interest Only
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Inverse Interest
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Portfolio
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Securities
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Only Securities
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Sub-total
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Total
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||||||||||||||||
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December 31, 2013
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Market Value
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$ | 326,975,173 | $ | 19,205,809 | $ | 5,041,530 | $ | 24,247,339 | $ | 351,222,512 | ||||||||||
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Cash
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10,615,027 | - | - | - | 10,615,027 | |||||||||||||||
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Repurchase Agreement Obligations(1)
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(318,557,054 | ) | - | - | - | (318,557,054 | ) | |||||||||||||
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Total
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$ | 19,033,146 | $ | 19,205,809 | $ | 5,041,530 | $ | 24,247,339 | $ | 43,280,485 | ||||||||||
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% of Total
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44.0 | % | 44.4 | % | 11.6 | % | 56.0 | % | 100.0 | % | ||||||||||
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September 30, 2013
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Market Value
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$ | 311,017,146 | $ | 15,370,698 | $ | 5,399,089 | $ | 20,769,787 | $ | 331,786,933 | ||||||||||
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Cash
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10,481,831 | - | - | - | 10,481,831 | |||||||||||||||
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Repurchase Agreement Obligations
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(301,656,523 | ) | - | - | - | (301,656,523 | ) | |||||||||||||
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Total
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$ | 19,842,454 | $ | 15,370,698 | $ | 5,399,089 | $ | 20,769,787 | $ | 40,612,241 | ||||||||||
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% of Total
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48.9 | % | 37.8 | % | 13.3 | % | 51.1 | % | 100.0 | % | ||||||||||
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(1)
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At December 31, 2013, there were outstanding repurchase agreement balances of $3.6 million and $3.0 million secured by interest-only and inverse interest-only securities, respectively. We entered into these arrangements to generate additional cash to invest in pass-through MBS; therefore, we have not considered these balances to be allocated to the structured securities strategy.
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Returns for the Quarter
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Structured Security Portfolio
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Pass-Through
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Interest Only
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Inverse Interest
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Portfolio
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Securities
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Only Securities
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Sub-total
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Total
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Income / (loss) (net of repo cost)
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$ | 2,416,605 | $ | (91,658 | ) | $ | 171,761 | $ | 80,103 | $ | 2,496,708 | |||||||||
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Realized and unrealized gains / (losses)
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(3,974,803 | ) | 2,551,168 | 56,205 | 2,607,373 | (1,367,430 | ) | |||||||||||||
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Hedge gains
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732,500 | n/a | n/a | n/a | 732,500 | |||||||||||||||
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Total Return
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$ | (825,698 | ) | $ | 2,459,510 | $ | 227,966 | $ | 2,687,476 | $ | 1,861,778 | |||||||||
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Beginning Capital Allocation
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$ | 19,842,454 | $ | 15,370,698 | $ | 5,399,089 | $ | 20,769,787 | $ | 40,612,241 | ||||||||||
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Return on Invested Capital for the Quarter(1)
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(4.2 | )% | 16.0 | % | 4.2 | % | 12.9 | % | 4.6 | % | ||||||||||
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(1)
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Calculated by dividing the Total Return by the Beginning Capital Allocation, expressed as a percentage.
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Prepayments
For the quarter, Orchid received $7.5 million in scheduled and unscheduled principal repayments and prepayments, which equated to a constant prepayment rate (“CPR”) of approximately 9.9% for the fourth quarter of 2013. Prepayment rates on the two MBS sub-portfolios were as follows: (in CPR).
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Structured
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PT MBS
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MBS
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Total
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Three Months Ended,
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Portfolio (%)
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Portfolio (%)
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Portfolio (%)
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December 31, 2013
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5.3 | 17.9 | 9.9 | |||||||||
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September 30, 2013
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6.5 | 28.2 | 12.6 | |||||||||
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June 30, 2013
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6.5 | 29.8 | 16.3 | |||||||||
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March 31, 2013
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9.2 | 33.0 | 20.0 | |||||||||
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December 31, 2012
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1.1 | 42.3 | 28.6 | |||||||||
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September 30, 2012
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4.2 | 38.7 | 25.0 | |||||||||
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June 30, 2012
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0.2 | 41.4 | 38.7 | |||||||||
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March 31, 2012
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11.0 | 31.2 | 23.8 | |||||||||
Portfolio
As of December 31, 2013, Orchid’s MBS portfolio consisted of $351.2 million of agency or government MBS at fair value and had a weighted average coupon of 3.77%. The following tables summarize Orchid’s agency and government MBS as of December 31, 2013 and December 31, 2012:
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(in thousands)
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|||||||||
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Weighted
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Weighted
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||||||||
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Percentage
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Average
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Average
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Weighted
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Weighted
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|||||
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of
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Weighted
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Maturity
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Coupon
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Average
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Average
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||||
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Fair
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Entire
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Average
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in
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Longest
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Reset in
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Lifetime
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Periodic
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||
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Asset Category
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Value
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Portfolio
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Coupon
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Months
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Maturity
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Months
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Cap
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Cap
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December 31, 2013
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Adjustable Rate MBS
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$
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5,334
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1.5%
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3.92%
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247
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1-Sep-35
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3.77
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10.13%
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2.00%
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Fixed Rate MBS
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245,523
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69.9%
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4.05%
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323
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1-Dec-43
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NA
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NA
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NA
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Hybrid Adjustable Rate MBS
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76,118
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21.7%
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2.56%
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350
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1-Aug-43
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109.6
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7.56%
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2.00%
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Total Mortgage-backed Pass-through
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326,975
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93.1%
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3.70%
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328
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1-Dec-43
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102.67
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7.72%
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2.00%
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Interest-Only Securities
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19,206
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5.5%
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4.39%
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261
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25-Nov-40
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NA
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NA
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NA
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Inverse Interest-Only Securities
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5,042
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1.4%
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5.92%
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317
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15-Dec-40
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NA
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6.08%
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NA
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Total Structured MBS
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24,248
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6.9%
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4.71%
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272
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15-Dec-40
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NA
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NA
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NA
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Total Mortgage Assets
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$
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351,223
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100.0%
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3.77%
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324
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1-Dec-43
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NA
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NA
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NA
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December 31, 2012
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|||||||||
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Adjustable Rate MBS
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$
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6,531
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5.7%
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4.20%
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258
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1-Sep-35
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3.46
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10.04%
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2.00%
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Fixed Rate MBS
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43,589
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37.8%
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3.24%
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181
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1-Dec-40
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NA
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NA
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NA
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Hybrid Adjustable Rate MBS
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59,485
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51.5%
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2.69%
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357
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1-Nov-42
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100.51
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7.69%
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2.00%
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Total Mortgage-backed Pass-through
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109,605
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95.0%
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3.00%
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281
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1-Nov-42
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90.91
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7.93%
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2.00%
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Interest-Only Securities
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2,884
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2.5%
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3.52%
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151
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25-Dec-39
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NA
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NA
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NA
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Inverse Interest-Only Securities
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2,891
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2.5%
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6.13%
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309
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25-Nov-40
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NA
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6.34%
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NA
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Total Structured MBS
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5,775
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5.0%
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4.83%
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230
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25-Nov-40
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NA
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NA
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NA
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Total Mortgage Assets
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$
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115,380
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100.0%
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3.09%
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278
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1-Nov-42
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NA
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NA
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NA
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(in thousands)
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December 31, 2013
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December 31, 2012
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Percentage of
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Percentage of
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|||||||||||||||
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Agency
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Fair Value
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Entire Portfolio
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Fair Value
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Entire Portfolio
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||||||||||||
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Fannie Mae
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$ | 211,062 | 60.09 | % | $ | 113,235 | 98.14 | % | ||||||||
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Freddie Mac
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121,842 | 34.69 | % | 2,145 | 1.86 | % | ||||||||||
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Ginnie Mae
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18,319 | 5.22 | % | - | - | |||||||||||
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Total Portfolio
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$ | 351,223 | 100.00 | % | $ | 115,380 | 100.00 | % | ||||||||
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December 31, 2013
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December 31, 2012
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|||||||
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Weighted Average Pass Through Purchase Price
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$ | 105.60 | $ | 105.65 | ||||
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Weighted Average Structured Purchase Price
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$ | 12.11 | $ | 9.91 | ||||
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Weighted Average Pass Through Current Price
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$ | 102.83 | $ | 105.81 | ||||
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Weighted Average Structured Current Price
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$ | 14.59 | $ | 7.84 | ||||
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Effective Duration (1)
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4.188 | 1.209 | ||||||
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(1)
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Effective duration of 4.188 indicates that an interest rate increase of 1.0% would be expected to cause a 4.188% decrease in the value of the MBS in the Company’s investment portfolio at December 31, 2013. An effective duration of 1.209 indicates that an interest rate increase of 1.0% would be expected to cause a 1.209% decrease in the value of the MBS in the Company’s investment portfolio at December 31, 2012. These figures include the structured securities in the portfolio, but not the effect of the Company’s funding cost hedges.
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Financing, Leverage and Liquidity
As of December 31, 2013, the Company had outstanding repurchase obligations of approximately $318.6 million with a net weighted average borrowing rate of 0.39%. These agreements were collateralized by MBS with a fair value, including accrued interest, of approximately $337.0 million. The Company’s leverage ratio at December 31, 2013 was 7.1 to 1. At December 31, 2013, the Company’s liquidity was approximately $23.6 million, consisting of unpledged MBS and cash and cash equivalents. To enhance our liquidity even further, we may pledge more of our structured MBS as part of a repurchase agreement funding, but retain the cash in lieu of acquiring additional assets. In this way we can, at a modest cost, retain higher levels of cash on hand and decrease the likelihood we will have to sell assets in a distressed market in order to raise cash. Below is a listing of outstanding borrowings under repurchase obligations at December 31, 2013.
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(in thousands)
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||||||||||||||||||||
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Weighted
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Weighted
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|||||||||||||||||||
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Total
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Average
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Average
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||||||||||||||||||
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Outstanding
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% of
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Borrowing
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Amount
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Maturity
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||||||||||||||||
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Counterparty
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Balances
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Total
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Rate
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at Risk(1)
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in Days
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|||||||||||||||
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Citigroup Global Markets, Inc.
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$ | 98,956 | 31.1 | % | 0.38 | % | $ | 5,487 | 11 | |||||||||||
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South Street Securities, LLC
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49,411 | 15.5 | % | 0.41 | % | 2,248 | 13 | |||||||||||||
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Suntrust Robinson Humphrey, Inc.
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47,010 | 14.8 | % | 0.37 | % | 2,384 | 10 | |||||||||||||
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Cantor Fitzgerald & Co.
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39,185 | 12.3 | % | 0.38 | % | 2,005 | 22 | |||||||||||||
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Mizuho Securities USA, Inc.
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26,727 | 8.4 | % | 0.49 | % | 2,936 | 9 | |||||||||||||
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Morgan Stanley & Co. LLC
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20,073 | 6.3 | % | 0.37 | % | 1,191 | 13 | |||||||||||||
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CRT Capital Group, LLC
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15,146 | 4.8 | % | 0.39 | % | 764 | 18 | |||||||||||||
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KGS - Alpha Capital Markets, L.P.
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11,894 | 3.7 | % | 0.39 | % | 841 | 16 | |||||||||||||
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Goldman, Sachs & Co.
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10,155 | 3.1 | % | 0.37 | % | 493 | 70 | |||||||||||||
| $ | 318,557 | 100.0 | % | 0.39 | % | $ | 18,349 | 15 | ||||||||||||
Hedging
In connection with its interest rate risk management strategy, the Company economically hedges a portion of the cost of its repurchase agreement funding by entering into derivative financial instrument contracts. The Company has not elected hedging treatment under GAAP, and as such, all gains or losses on these instruments are reflected in earnings for all periods presented. As of December 31, 2013, such instruments were comprised entirely of Eurodollar futures contracts with an average contract notional amount of $250.0 million to $270.0 million and a weighted average fixed LIBOR rate of 2.02%.
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(in thousands)
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||||||||||||
|
Average
|
||||||||||||
|
Weighted
|
Contract
|
|||||||||||
|
Average
|
Notional
|
Open
|
||||||||||
|
Expiration Year
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LIBOR Rate
|
Amount
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Equity(1)
|
|||||||||
|
2014
|
0.40 | % | $ | 262,500 | $ | (189 | ) | |||||
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2015
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0.80 | % | 275,000 | (146 | ) | |||||||
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2016
|
1.90 | % | 250,000 | 1,367 | ||||||||
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2017
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3.03 | % | 250,000 | 2,291 | ||||||||
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2018
|
3.77 | % | 250,000 | 1,575 | ||||||||
| 2.02 | % | $ | 4,898 | |||||||||
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(1)
|
Open equity represents the cumulative gains (losses) recorded on open futures positions.
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Dividends
To qualify as a REIT, we must pay annual dividends to our stockholders of at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and excluding any net capital gains. We intend to pay regular monthly dividends to our stockholders and have declared the following dividends since our IPO
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Declaration Date
|
Record Date
|
Payment Date
|
Per Share Amount
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Total
|
||||||
|
March 8, 2013
|
March 25, 2013
|
March 27, 2013
|
$ | 0.135 | $ | 451,125 | ||||
|
April 10, 2013
|
April 25, 2013
|
April 30, 2013
|
0.135 | 451,125 | ||||||
|
May 9, 2013
|
May 28, 2013
|
May 31, 2013
|
0.135 | 451,125 | ||||||
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June 10, 2013
|
June 25, 2013
|
June 28, 2013
|
0.135 | 451,125 | ||||||
|
July 9, 2013
|
July 25, 2013
|
July 31, 2013
|
0.135 | 451,125 | ||||||
|
August 12, 2013
|
August 26, 2013
|
August 30, 2013
|
0.135 | 451,125 | ||||||
|
September 10, 2013
|
September 25, 2013
|
September 30, 2013
|
0.135 | 451,125 | ||||||
|
October 10, 2013
|
October 25, 2013
|
October 31, 2013
|
0.135 | 451,125 | ||||||
|
November 12, 2013
|
November 25, 2013
|
November 27, 2013
|
0.135 | 451,125 | ||||||
|
December 11, 2013
|
December 26, 2013
|
December 30, 2013
|
0.180 | 601,500 | ||||||
|
January 9, 2014
|
January 27, 2014
|
January 31, 2014
|
0.180 | 925,500 | ||||||
|
February 11, 2014
|
February 25, 2014
|
February 28, 2014
|
0.180 | 974,100 | ||||||
Book Value Per Share
The Company's Book Value Per Share at December 31, 2013 was $13.40. The Company computes Book Value Per Share by dividing total stockholders' equity by the total number of shares outstanding of the Company's common stock. At December 31, 2013, the Company's stockholders' equity was $44.8 million with 3,341,665 shares of common stock outstanding.
Secondary Offering
The Company completed a secondary offering of 1,800,000 common shares on January 23, 2014 at a price of $12.50 per share. The underwriters exercised their overallotment option in full for an additional 270,000 shares on January 29, 2014. The net proceeds to the Company were approximately $24.2 million which were invested in Agency MBS securities on a leveraged basis. The Company disclosed a summary of the composition of the MBS portfolio as of January 31, 2014 in a press release dated February 11, 2014. Included in the press release was the Company’s estimated Book Value Per Share as of January 31, 2014 of $12.76.
Management Commentary
Commenting on the fourth quarter, Robert E. Cauley, Chairman and Chief Executive Officer, said, “What we expected to occur late in the second quarter or during the third quarter finally occurred late in the fourth quarter. The Federal Reserve began their long awaited tapering program. The initial move was announced after the December meeting and the Fed decided to reduce monthly purchases of both US Treasury securities and Agency MBS by $5 billion per month beginning in January 2014. The Federal Reserve announced another reduction in their asset purchase at the January 2014 meeting and by same amounts in both cases. The market was not terribly surprised by the announcement in December, although there was probably more market participants expecting the first move to come in the first quarter of 2014 rather than December. The Agency MBS market rallied as the current coupon, 30 year mortgage tightened by approximately 10 basis points into year end. The Treasury market on the other hand sold off and the high yield for the 10 year US Treasury note was reached on December 31, 2013. With the way the Christmas holiday fell during the week, trading desks were thinly staffed and market liquidity was very low after the taper announcement. This no doubt exacerbated the move in the Treasury market. As the economic data steadily improved over the fourth quarter and rates rose, prepayment activity naturally slowed. The mortgage bankers refinance index fell below 2500 in July and below 1500 in late December 2013. With the seasonal trough typically occurring in late Q4 and Q1, prepayment speeds should remain muted until the March speeds are released in early April. As a result, premium amortization on our pass through MBS has been muted.
“With respect to changes in the portfolio, we were quite active. We reduced our exposure to hybrid pass through MBS by $44 million and redeployed the proceeds into 30 year, fixed rate MBS. Our short reset ARM positions were essentially unchanged absent run off and remain a very small percentage of the portfolio. Within the fixed rate sub-portfolio, we sold lower coupon 30 year securities and some slightly seasoned 4.5%, 30 year pass throughs and purchased more 4.5%, 30 year securities and some 4% and 5% pass throughs. The fixed rate allocation is now 69.9% of the portfolio versus 55.7% at September 30, 2013. Hybrids securities are now 21.7% of the portfolio versus 36.2% at September 30, 2013. Within the fixed rate allocation, we are more heavily skewed towards 30 year versus 15 year securities as the weighted-average maturity of the fixed rate sub-portfolio was 323 months at year end versus 310 months at September 30, 2013. Within the structured securities sub-portfolio, we increased the allocation of our capital by approximately $3.5 million, or from 51.1% of our capital at September 30, 2013 to 56.0% at year end. We also made changes to the composition of the IO sub-portfolio above and beyond increasing the allocation by selling securities that had appreciated in value as prepayment speeds slowed and; therefore, offered little additional up-rate protection. The proceeds were deployed in securities that simply offered better up-rate protection. In sum, the portfolio as constructed at year end offers significantly more income potential as a result of the combination of higher weighted average coupons and slowing prepayment speeds. We have retained adequate up-rate protection, but are also cognizant of the potential for a rally in rates and the risk such an event poses. The market appeared quite convinced rates could only move higher into 2014 and when markets are overwhelmingly positioned for one outcome, bad things can and often do happen.”
Earnings Conference Call Details
An earnings conference call and live audio webcast will be hosted Thursday, February 20, 2014, at 10:00 AM ET. The conference call may be accessed by dialing toll free (877) 341-5668. International callers dial (224) 357-2205. The conference passcode is 2078210. A live audio webcast of the conference call can be accessed via the investor relations section of the Company’s website at www.orchidislandcapital.com , and an audio archive of the webcast will be available for approximately one year.
About Orchid Island Capital, Inc.
Orchid Island Capital, Inc. is a specialty finance company that invests on a leveraged basis in Agency RMBS. Our investment strategy focuses on, and our portfolio consists of, two categories of Agency RMBS: (i) traditional pass-through Agency RMBS and (ii) structured Agency RMBS, such as CMOs, IOs, IIOs and POs, among other types of structured Agency RMBS. Orchid is managed by Bimini Advisors, LLC, a registered investment adviser with the Securities and Exchange Commission.
Forward Looking Statements
Statements herein relating to matters that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. The reader is cautioned that such forward-looking statements are based on information available at the time and on management's good faith belief with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in such forward-looking statements. Important factors that could cause such differences are described in Orchid Island Capital, Inc.'s filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Orchid Island Capital, Inc. assumes no obligation to update forward-looking statements to reflect subsequent results, changes in assumptions or changes in other factors affecting forward-looking statements.
CONTACT:
Orchid Island Capital, Inc.
Robert E. Cauley, 772-231-1400
Chairman and Chief Executive Officer
www.orchidislandcapital.com
Summarized Financial Statements
The following is a summarized presentation of the unaudited balance sheets as of December 31, 2013, and December 31, 2012, and the unaudited quarterly results of operations for the calendar quarters and years ended December 31, 2013 and December 31, 2012. Amounts presented are subject to change.
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ORCHID ISLAND CAPITAL, INC.
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BALANCE SHEETS
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(Unaudited - Amounts Subject To Change)
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December 31, 2013
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December 31, 2012
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ASSETS:
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Total mortgage-backed securities
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$ | 351,222,512 | $ | 115,379,574 | ||||
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Cash, cash equivalents and restricted cash
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10,615,027 | 2,986,257 | ||||||
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Accrued interest receivable
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1,559,437 | 440,877 | ||||||
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Due from affiliates
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- | 45,126 | ||||||
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Prepaid expenses and other assets
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179,071 | 9,122 | ||||||
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Total Assets
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$ | 363,576,047 | $ | 118,860,956 | ||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Repurchase agreements
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$ | 318,557,054 | $ | 103,941,174 | ||||
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Accrued interest payable
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91,461 | 54,084 | ||||||
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Due to affiliates
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81,925 | - | ||||||
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Accounts payable, accrued expenses and other
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80,260 | 140,723 | ||||||
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Total Liabilities
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318,810,700 | 104,135,981 | ||||||
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Total Stockholders' Equity
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44,765,347 | 14,724,975 | ||||||
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Total Liabilities and Stockholders' Equity
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$ | 363,576,047 | $ | 118,860,956 | ||||
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Common shares outstanding
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3,341,665 | 154,110 | ||||||
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Book value per share
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$ | 13.40 | $ | 95.55 | ||||
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ORCHID ISLAND CAPITAL, INC.
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STATEMENTS OF OPERATIONS
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(Unaudited - Amounts Subject to Change)
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Years Ended December 31,
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Three Months Ended December 31,
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2013
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2012
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2013
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2012
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Interest income
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$ | 9,198,858 | $ | 2,697,922 | $ | 2,805,703 | $ | 473,173 | ||||||||
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Interest expense
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(1,126,204 | ) | (277,328 | ) | (308,984 | ) | (94,513 | ) | ||||||||
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Net interest income
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8,072,654 | 2,420,594 | 2,496,719 | 378,660 | ||||||||||||
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Losses
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(7,102,562 | ) | (1,153,452 | ) | (634,926 | ) | (471,418 | ) | ||||||||
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Net portfolio income (loss)
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970,092 | 1,267,142 | 1,861,793 | (92,758 | ) | |||||||||||
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Expenses
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1,668,098 | 732,799 | 416,898 | 174,455 | ||||||||||||
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Net (loss) income
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$ | (698,006 | ) | $ | 534,343 | $ | 1,444,895 | $ | (267,213 | ) | ||||||
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Basic and diluted net (loss) income per share
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$ | (0.23 | ) | $ | 0.54 | $ | 0.43 | $ | (0.27 | ) | ||||||
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Dividends Declared Per Common Share:
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$ | 1.395 | $ | - | $ | 0.450 | $ | - | ||||||||
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Three Months Ended
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December 31,
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Key Balance Sheet Metrics
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2013
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2012
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Average MBS
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$ | 341,504,724 | $ | 91,094,034 | ||||
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Average repurchase agreements
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310,106,789 | 80,256,289 | ||||||
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Average stockholders' equity
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44,794,774 | 14,858,582 | ||||||
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Leverage ratio(1)
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7.1:1
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7.1:1
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Key Performance Metrics
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Average yield on MBS
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3.29 | % | 2.08 | % | ||||
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Average cost of funds
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0.40 | % | 0.47 | % | ||||
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Average economic cost of funds
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0.45 | % | 0.78 | % | ||||
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Average interest rate spread
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2.89 | % | 1.61 | % | ||||
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Average economic interest rate spread
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2.84 | % | 1.30 | % | ||||
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(1)
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The leverage ratio is calculated by dividing total ending liabilities by ending stockholders’ equity.
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