Orchid Island Capital recently released its 10-Q report. Orchid Island Capital, Inc. is a specialty finance company that invests in U.S. residential mortgage-backed securities backed by single-family mortgage loans, with a portfolio split between traditional pass-through Agency RMBS and structured Agency RMBS such as interest-only, inverse interest-only and principal-only securities. The company was incorporated in 2010, is headquartered in Vero Beach, Florida, and has elected REIT tax status.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Orchid Island said its results for the six and three months ended June 30, 2026 were shaped by interest rates, funding costs, hedging, leverage, prepayment speeds and the market value of its Agency RMBS portfolio. The company also pointed to capital raising and share repurchases as major balance-sheet actions during the period.
For the six months ended June 30, 2026, Orchid Island reported net income of $69.2 million, or $0.35 per share, compared with a net loss of $16.5 million, or $0.16 per share, in the same period of 2025. For the three months ended June 30, 2026, net income was $89.2 million, or $0.44 per share, versus a net loss of $33.6 million, or $0.29 per share, a year earlier.
Interest income rose to $322.0 million for the first half of 2026 from $173.4 million a year earlier, while interest expense increased to $205.0 million from $130.5 million. That left net interest income at $117.0 million, up from $42.9 million in the prior-year period.
Results also reflected portfolio marks and derivative activity. Losses on RMBS and derivative contracts totaled $33.6 million in the first half of 2026, compared with losses of $50.1 million in the first half of 2025. Net portfolio income was $83.4 million, versus a net portfolio loss of $7.2 million a year earlier.
For the second quarter, interest income was $164.2 million, up from $92.3 million in the prior-year quarter, and interest expense was $104.2 million, up from $69.1 million. Net interest income came to $60.0 million, compared with $23.2 million in the second quarter of 2025. The company reported gains of $36.0 million on RMBS and derivative contracts in the quarter, versus losses of $51.7 million a year earlier.
Operating expenses increased to $14.2 million for the first half of 2026 from $9.2 million in the first half of 2025. In the second quarter, expenses were $6.8 million, compared with $5.0 million in the prior-year period.
On the capital side, Orchid Island said it issued 30,513,253 shares under its June 2024 equity distribution agreement for gross proceeds of about $250.0 million and net proceeds of about $245.8 million before the agreement ended in February 2025. Under its February 2025 agreement, it issued 59,492,504 shares for gross proceeds of about $445.1 million and net proceeds of about $438.0 million before that agreement terminated in October 2025.
Under the October 2025 equity distribution agreement, the company issued 48,824,644 shares through June 30, 2026 for gross proceeds of about $360.9 million and net proceeds of about $355.2 million. In the six months ended June 30, 2026, it issued 18,558,681 shares under that agreement for gross proceeds of about $137.7 million and net proceeds of about $135.5 million.
Orchid Island also continued repurchases. Since the program began, it has repurchased 7,364,383 shares for about $92.1 million, at a weighted average price of $12.51 per share. In the six months ended June 30, 2026, it repurchased 1,106,557 shares for about $7.3 million at a weighted average price of $6.64 per share. As of July 23, 2026, 26,612,580 shares remained authorized for repurchase. As a result of these announcements, the company's shares have moved -1.29% on the market, and are now trading at a price of $6.525. For more information, read the company's full 10-Q submission here.
