Orchid Island Capital, Inc (ORC). Achieves Positive Net Income a nd Generates $38.01 Million in Revenue in the First Quarter of 2023
Orchid Island Capital, Inc., a real estate investment trust (REIT) specializing in residential mortgage-backed securities (MBS), has announced its financial results for the first quarter of 2023. The company reported a net income of $3.53 million for the quarter, marking a significant improvement compared to the net loss of $148.73 million recorded in the same period last year. Orchid Island Capital also generated $38.01 million in revenue during the first quarter of 2023.
Financial Statements
Orchid Island Capital's condensed balance sheet as of March 31, 2023, reveals total assets amounting to $4.27 billion, showing an increase compared to $3.87 billion as of December 31, 2022. The company's assets primarily consist of mortgage-backed securities, which were valued at $3.99 billion. Additionally, Orchid Island Capital held U.S. Treasury Notes valued at $36.81 million, cash and cash equivalents totaling $143.22 million, and other assets.
On the liabilities side, the company's repurchase agreements amounted to $3.77 billion, reflecting an increase from $3.38 billion at the end of 2022. Other liabilities stood at $3.37 million. Orchid Island Capital's total liabilities amounted to $3.81 billion.
Statements of Operations
For the three months ended March 31, 2023, Orchid Island Capital reported interest income of $38.01 million. The company's interest expense amounted to $42.22 million, resulting in a net interest expense of $4.21 million. Orchid Island Capital recorded net portfolio income of $8.53 million after accounting for realized and unrealized gains and losses on mortgage-backed securities, U.S. Treasury Notes, and derivative instruments.
The company's expenses for the quarter included management fees of $2.64 million, allocated overhead of $0.58 million, and incentive compensation of $0.47 million, among others. Total expenses amounted to $5.00 million.
Consequently, Orchid Island Capital achieved a net income of $3.53 million for the first quarter of 2023, compared to a net loss of $148.73 million in the same period last year. The company's basic and diluted net income per share stood at $0.09, with a weighted average of 38.49 million shares outstanding.
Statements of Stockholders' Equity and Cash Flows
During the first quarter of 2023, Orchid Island Capital's stockholders' equity increased to $451.36 million from $438.76 million at the beginning of the period. This increase was primarily driven by net income for the quarter.
In terms of cash flows, the company reported a net cash used in operating activities of $2.63 million. Orchid Island Capital utilized $448.89 million in investing activities, mainly from purchases and net payments on mortgage-backed securities and derivative instruments. However, the company received $400.26 million in financing activities, primarily through proceeds from repurchase agreements.
As a result, Orchid Island Capital experienced a net decrease in cash, cash equivalents, and restricted cash of $51.26 million during the first quarter of 2023. The company ended the quarter with a total of $185.96 million in cash, cash equivalents, and restricted cash.
These financial results demonstrate Orchid Island Capital's improved performance, achieving positive net income and generating revenue of $38.01 million in the first quarter of 2023. The company's focus on residential mortgage-backed securities and prudent investment strategies have contributed to its success in a challenging economic environment.