Orchid Island Capital has recently released its 10-Q report, revealing its focus on investing in residential mortgage-backed securities (RMBS) in the United States. The company's portfolio consists of traditional pass-through Agency RMBS, such as mortgage pass-through certificates, and structured Agency RMBS, including interest-only securities, inverse interest-only securities, and principal-only securities. Orchid Island Capital operates as a real estate investment trust (REIT) and aims to provide attractive risk-adjusted total returns over the long term through a combination of capital appreciation and the payment of regular monthly distributions.
In ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Orchid Island Capital outlined its capital raising activities, including entering into equity distribution agreements to offer and sell shares of its common stock, resulting in aggregate gross proceeds of approximately $228.8 million in March 2023, $250.0 million in June 2024, and approximately $420.2 million through September 30, 2025, under the February 2025 Equity Distribution Agreement. The company also disclosed its stock repurchase program, which has seen the repurchase of a total of 6,257,826 shares at an aggregate cost of approximately $84.8 million, including commissions and fees, from the inception of the program through September 30, 2025.
The report highlighted various factors that may impact Orchid Island Capital's results of operations and financial condition, including interest rate trends, changes in cost of funds, competition for investments in Agency RMBS, actions taken by the U.S. government, prepayment rates on mortgages underlying Agency RMBS, and other market developments. Additionally, the company's results of operations for the nine and three months ended September 30, 2025, were compared to the same periods in 2024, with net income for the nine months ending September 30, 2025, reported at $55.6 million, or $0.48 per share, and net income for the three months ending September 30, 2025, reported at $72.1 million, or $0.53 per share.
Orchid Island Capital also provided GAAP and non-GAAP reconciliations, including "Net Earnings Excluding Realized and Unrealized Gains and Losses," "Economic Interest Expense," "Economic Net Interest Income," "Interest Income – Inclusive of Premium Amortization/Discount Accretion," and "Yield on Average RMBS – Inclusive of Premium Amortization/Discount Accretion." The company's financial information reflects the impact of its decision to account for its Agency RMBS under the fair value option and its derivative financial instruments used for hedging purposes. Following these announcements, the company's shares moved -0.4%, and are now trading at a price of $7.44. Check out the company's full 10-Q submission here.
