Orchid Island Capital, Inc. (NYSE:ORC) Q2 2020 Earnings Conference Call - Final Transcript

Jul 31, 2020 • 10:00 am ET


Orchid Island Capital, Inc. (NYSE:ORC) Q2 2020 Earnings Conference Call - Final Transcript


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Good morning and welcome to the Second Quarter 2020 Earnings Conference Call for Orchid Island Capital. This call is being recorded today July 31, 2020.

At this time, the Company would like to remind the listeners that statements made during today's conference call relating to matters that are not historical facts are forward-looking statements subject to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995.

Listeners are cautioned that such forward-looking statements are based on information currently available on the management's good faith, belief with respect to future events that 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 the Company's files with the Securities and Exchange Commission including the Company's most recent annual report on Form 10-K. The Company assumes no obligation to update such forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking statements.

Now, I'd like to turn the conference over to the Company's Chairman and Chief Executive Officer, Mr. Bob Cauley. Please go ahead sir.

Robert E. Cauley

Thank you, operator and good morning everyone. I just want to mention that our slide deck was not put up last night, it was put up this morning. I hope everybody has had a chance to grab a copy, so that you can participate with us as we go through the presentation today.

As usual, we will follow the same kind of format starting on Page 3, the table of contents. The first item will be to discuss our results for the quarter, high level. Then I'll spend a few moments describing the market in which we operated in during the second quarter, then I'll go through our financial results in little deeper detail, and then spend the rest of the time talking about the portfolio, positioning changes we made, how we see the market evolving in the future, how we want to be positioned for that, and of course some discussion of our hedging strategy and leverage and so forth.

So with that, turning to Slide 4. Financial highlights for the quarter, the first thing I want to mention is that, Orchid had a very strong quarter. We generated an economic return of 15.8% for the quarter that is unannualized. As a result, our performance versus our peer group, which I'll describe in a little more detail in a moment, using total rate of return, based on stock price and dividends, stacks up extremely well against our peers going back throughout our history in our existence. And finally, we find ourselves, finally, in a very favorable environment, that has not always been the case. And and we've had to slug through a series of Fed rate hikes in the light, but that is not the case now and the environment that we find ourselves in is very attractive for our business model.

We recently raised our