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SUBSEQUENT EVENTS
12 Months Ended
Dec. 31, 2019
Subsequent Events [Abstract]  
Subsequent Events [Text Block]

NOTE 19. SUBSEQUENT EVENTS

On March 11, 2020, the World Health Organization declared the novel strain of coronavirus (COVID-19) a global pandemic and recommended containment and mitigation measures worldwide. We cannot, reasonably estimate the length or severity of this pandemic and its ultimate effect on the markets. As of the date of this filing, this global pandemic has had a significant impact on financial markets and economic activity, in addition to the health of hundreds of thousands of people across the globe. Interest rates have significantly declined, establishing new all-time low yields across the US Treasury maturity curve. There are concerns in the RMBS markets that there may be elevated levels of prepayment activity. The typical smooth operation of financial markets has become erratic recently, prompting significant policy responses from the Federal Reserve (“Fed”), as well as central banks across the globe. The Federal government is working on a substantial fiscal stimulus package and it is expected to be signed into law. While all markets have been affected, performance appears to have been highly correlated with the risk or credit profile of the asset in question. High-risk assets generally have performed poorly relative to low risk assets during this recent period of market volatility. Royal Palm’s MBS portfolio remains 100% invested in Agency RMBS assets. However, the Agency RMBS market has been impacted by the broader market turmoil as well and we may suffer losses on the disposition of assets, experience above average margin call activity and may not have access to repurchase agreement funding to the extent we have in the past. To date the funding markets, with considerable support from the Fed, have continued to operate relatively smoothly. The market turmoil has also impacted Orchid Island Capital, Inc.’s portfolio, as well and Orchid may suffer declines in its shareholders equity, which in turn would impact the amount of management fees we receive through our advisory services segment and potentially the dividends we receive. Also, any decline in the value of Orchid’s common stock price would impact the book value of Bimini. In light of these developments, we will re-evaluate our deferred tax asset and corresponding valuation allowance at the end of the first quarter of 2020 and going forward.

These developments and their effect on the world’s economy and health will likely continue to play out over the balance of the year, and maybe beyond. At this time, it is too early to tell what the ultimate effect will be on economic activity across the globe and the markets the Company operates in – Agency MBS.