Good morning. And welcome to the First Quarter 2015 Earnings Conference Call for Orchid Island Capital. This call is being recorded today April 28, 2015. 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 provisions 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 that respect for further -- for 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 the company’s filings 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 would like to turn the conference over to the company’s Chairman and Chief Executive Officer, Mr. Bob Cauley. Sir, please go ahead.

Thank you, Operator. As we entered 2015, the economy was humming along nicely and the market was acutely focused on any and all utterings from Janet Yellen or other Federal Reserve governors for clues as to the timing of their eventual end of the zero rate policy. Payroll growth had been robust and there were emerging signs of wage pressure. Developments in Europe were quite the opposite, with Greece renewing talk of their possible exit from the EU. With projected demand falling and supply still expanding, oil prices had fallen nearly 50% since the summer of 2014, and the dollar was strengthening. At that point, the dichotomy in relative economic performance between the U.S. and Europe was striking. On the one hand, the U.S. was clearly removed from the financial crisis and approaching the point where the Federal Reserve needed to remove accommodation in a more explicit fashion. On the other, Europe, and to a lesser extent Asia, were clearly slowing. Inflation in Europe was barely positive and GDP in China was approaching the psychologically important 7% level, below which alarm bells would be triggered. The central banks in China, Japan and Europe were still running policies to provide maximum accommodation. The long end of the U.S. treasury market rallied into January, with the yield on the 10-year U.S. Treasury reaching a low of 1.642% on January 30th. The rally at the long end of the curve was being driven by events overseas, while short rates in the U.S. were more sensitive to Fed expectations. As a result, the yield curve was flattening as we approached the end of January. The rally at the long end of the curve ended in early February with the release of the January jobs data, and then again when the February data was released…

Thank you. [Operator Instructions] Our first question comes from David Walrod with Ladenburg. Your line is open. Please go ahead.

Good morning.

Hey, Dave.

First question I have is in regards to the capital allocation, obviously, it moved down a little bit the -- in the past few portfolio. Can you talk about what you’ve done in the second quarter so far? Are we going to see that continue to move closer to 50-50 or what are you seeing?

Hey Dave, this is Hunter. As the rate -- as the rate get lows, I guess a couple of times in the first quarter. We sort of opportunistically bought IOs as they widened out a little bit. And that’s something I think we discussed in our last call that we wanted to do. We had deployed the proceeds from the ATM program throughout the fourth quarter. And we are a little heavier than we wanted to be on the past three side. So the added IOs from the first quarter, we were really sort of trying to get us back into our target range. I suspect to the extent that we are active in the ATM program again. It will be more of a repeat of that situation. IOs are still -- relative to passthroughs more difficult to find. And we have to kind of pick our spots where we feel like they offer value or as in with the case of the mid reduction we have some policy concern that creates a little bit of anxiety in the IO market which afford us the opportunity to buy at somewhat distressed levels in that sector. So we’ll just continue to, I think, pick our spot. I think they were in the range. I’d like to see the portfolio skewed a little more towards IOs on balance. But it may in fact there'll be other way a little bit if we are active in the ATM, just because that’s in the nature of the way, we put those funds to work to buy passthroughs, first and get the income earning assets on the books and hinge those up to the extent we need to and that add IOs as they present themselves.

Sure. That's helpful. And then from the standpoint if you are active in the ATM, how would you compare the return opportunities if you’re able to invest in today relative to, I guess, the existing portfolio?

I would say that they are generally in line. That all obviously depends on speeds and amortization. We did see that acceleration resolve around in January. That was reflected in the March speeds and again in April. Though they weren’t quite as high in April they were in March. We expect them to come down and to the extent, we are right. I would say that the opportunities are more or less in line. I mean obviously there are -- they are less than they were a year ago. But then the IO front, they are a little better even last year the IO securities were generally negative yielding assets. Today they are slightly positive. And the way we do it is, we’ve set our loans. We’ve taken on a lot higher coupon 30 year securities and by opportunistically buying call protected securities not the extremely high pay up types and owning those securities for what we deem to be an appropriate length of time. We were able to own them, capture fairly high amount of income. And then we’ll just roll out them into newer securities and that strategy has been working for sometime now and we expect it to continue. Again, predicted on our assumptions that speeds begin to moderate which, so far everything, all the indicators indicate that’s what’s going to happen.

Right. I would just add to that. I could say in a slightly different way. The reward to risk trade-off in this type of assets is very high right now. So in another words, we get relatively high returns, even at the sort of elevated speeds that are expected in the market for the next month or two versus the interest rate risk that these assets are exhibiting. So, Bob mentioned in his prepared remarks that we’ve experienced some negative empirical durations and that’s largely due to the fact that we had premium assets, have shortened fairly considerably over the last six months. So the portfolio has very low duration. And again, if we are right in our thinking that speeds are going to climb over the course of next few months, back to more sort of baseline levels then this asset -- then it’s particularly interesting environment to acquire more of these assets. So, I think we’ll move forward with that way of thinking.

Okay. Very helpful. Thanks much, guys.

Thanks, Dave.

Thank you. [Operator Instructions] And I’m showing no further questions at this time. And I’d like to turn the conference back to management for any closing remarks.

Thanks, Operator. Thank you for your time as always. Also to the extent that anybody has any follow-on questions, we’re in the office. Please feel free to call. The number is 772-231-1400. We are always anxious to take calls and discuss basically everything you want, so we welcome that. Otherwise, we look forward to talking to you at the end of the second quarter. Thank you.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program and you may all disconnect. Everyone have a great day.