Orchid Island Capital Announces Second Quarter 2025 Results
Orchid Island Capital (NYSE:ORC) reported a challenging second quarter 2025, with a net loss of $33.6 million, or $0.29 per share. The quarter was marked by significant market turbulence driven by trade tensions and legislative changes. Key financial metrics include:
- Net interest income of $23.2 million ($0.20 per share)
- Total expenses of $5.0 million ($0.04 per share)
- Net realized and unrealized losses of $51.7 million ($0.45 per share)
- Book value decreased to $7.21 per share
- Total return of -4.66%
- Strong liquidity position of $492.5 million
The company maintained a borrowing capacity exceeding $6.7 billion across 24 active lenders, with an adjusted leverage ratio of 7.3 to 1. Despite market challenges, management sees attractive return opportunities in the Agency RMBS market.
Orchid Island Capital (NYSE:ORC) ha riportato un secondo trimestre 2025 difficile, con una perdita netta di 33,6 milioni di dollari, pari a 0,29 dollari per azione. Il trimestre è stato caratterizzato da una significativa turbolenza del mercato causata da tensioni commerciali e cambiamenti legislativi. I principali indicatori finanziari includono:
- Reddito netto da interessi di 23,2 milioni di dollari (0,20 dollari per azione)
- Spese totali di 5,0 milioni di dollari (0,04 dollari per azione)
- Perdite nette realizzate e non realizzate di 51,7 milioni di dollari (0,45 dollari per azione)
- Valore contabile sceso a 7,21 dollari per azione
- Rendimento totale di -4,66%
- Solida posizione di liquidità di 492,5 milioni di dollari
L'azienda ha mantenuto una capacità di indebitamento superiore a 6,7 miliardi di dollari distribuiti su 24 finanziatori attivi, con un rapporto di leva finanziaria rettificato di 7,3 a 1. Nonostante le difficoltà di mercato, la direzione vede opportunità di rendimento interessanti nel mercato Agency RMBS.
Orchid Island Capital (NYSE:ORC) reportó un segundo trimestre de 2025 desafiante, con una pérdida neta de 33,6 millones de dólares, o 0,29 dólares por acción. El trimestre estuvo marcado por una significativa turbulencia en el mercado debido a tensiones comerciales y cambios legislativos. Los principales indicadores financieros incluyen:
- Ingreso neto por intereses de 23,2 millones de dólares (0,20 dólares por acción)
- Gastos totales de 5,0 millones de dólares (0,04 dólares por acción)
- Pérdidas netas realizadas y no realizadas de 51,7 millones de dólares (0,45 dólares por acción)
- Valor contable reducido a 7,21 dólares por acción
- Retorno total de -4,66%
- Fuerte posición de liquidez de 492,5 millones de dólares
La compañía mantuvo una capacidad de endeudamiento superior a 6,7 mil millones de dólares entre 24 prestamistas activos, con una ratio de apalancamiento ajustada de 7,3 a 1. A pesar de los desafíos del mercado, la dirección ve oportunidades atractivas de retorno en el mercado Agency RMBS.
Orchid Island Capital (NYSE:ORC)은 2025년 2분기에 어려운 실적을 보고했으며, 순손실 3,360만 달러, 주당 0.29달러의 손실을 기록했습니다. 이 분기는 무역 긴장과 입법 변화로 인한 시장의 큰 변동성이 특징이었습니다. 주요 재무 지표는 다음과 같습니다:
- 순이자수익 2,320만 달러 (주당 0.20달러)
- 총 비용 500만 달러 (주당 0.04달러)
- 순실현 및 미실현 손실 5,170만 달러 (주당 0.45달러)
- 장부가치는 주당 7.21달러로 감소
- 총 수익률 -4.66%
- 강력한 유동성 보유액 4억 9,250만 달러
회사는 24개의 활성 대출기관과 함께 67억 달러 이상의 차입 능력을 유지했으며, 조정된 레버리지 비율은 7.3 대 1입니다. 시장의 어려움에도 불구하고 경영진은 에이전시 RMBS 시장에서 매력적인 수익 기회를 보고 있습니다.
Orchid Island Capital (NYSE:ORC) a annoncé un deuxième trimestre 2025 difficile, avec une perte nette de 33,6 millions de dollars, soit 0,29 dollar par action. Le trimestre a été marqué par une forte turbulence du marché due aux tensions commerciales et aux changements législatifs. Les principaux indicateurs financiers sont :
- Revenu net d’intérêts de 23,2 millions de dollars (0,20 dollar par action)
- Dépenses totales de 5,0 millions de dollars (0,04 dollar par action)
- Pertes nettes réalisées et non réalisées de 51,7 millions de dollars (0,45 dollar par action)
- Valeur comptable en baisse à 7,21 dollars par action
- Rendement total de -4,66%
- Position de liquidité solide de 492,5 millions de dollars
La société a maintenu une capacité d’emprunt supérieure à 6,7 milliards de dollars auprès de 24 prêteurs actifs, avec un ratio d’endettement ajusté de 7,3 pour 1. Malgré les défis du marché, la direction voit des opportunités de rendement attractives sur le marché des Agency RMBS.
Orchid Island Capital (NYSE:ORC) meldete ein herausforderndes zweites Quartal 2025 mit einem Nettoverlust von 33,6 Millionen US-Dollar, bzw. 0,29 US-Dollar pro Aktie. Das Quartal war geprägt von erheblicher Marktvolatilität aufgrund von Handelskonflikten und legislativen Änderungen. Wichtige Finanzkennzahlen umfassen:
- Nettozinsertrag von 23,2 Millionen US-Dollar (0,20 US-Dollar pro Aktie)
- Gesamtausgaben von 5,0 Millionen US-Dollar (0,04 US-Dollar pro Aktie)
- Netto realisierte und nicht realisierte Verluste von 51,7 Millionen US-Dollar (0,45 US-Dollar pro Aktie)
- Buchwert sank auf 7,21 US-Dollar pro Aktie
- Gesamtrendite von -4,66%
- Starke Liquiditätsposition von 492,5 Millionen US-Dollar
Das Unternehmen behielt eine Kreditaufnahmefähigkeit von über 6,7 Milliarden US-Dollar bei 24 aktiven Kreditgebern bei, mit einem bereinigten Verschuldungsgrad von 7,3 zu 1. Trotz der Marktherausforderungen sieht das Management attraktive Renditechancen im Agency-RMBS-Markt.
- Strong liquidity position of $492.5 million (54% of stockholders' equity)
- Diversified borrowing capacity across 24 active lenders
- Conservative leverage ratio of 7.3 to 1
- Maintained quarterly dividend of $0.36 per share
- Net loss of $33.6 million ($0.29 per share) in Q2 2025
- Significant net realized and unrealized losses of $51.7 million
- Book value declined by $0.73 per share
- Negative total return of -4.66% for the quarter
- Agency RMBS sector failed to fully recover from market turmoil
Insights
ORC reported Q2 2025 net loss of $33.6M amid market turbulence, with book value declining to $7.21 per share.
Orchid Island Capital's Q2 2025 results reveal significant challenges, with a net loss of $33.6 million ($0.29 per share) compared to a $5.0 million loss in Q2 2024. The negative performance was primarily driven by $51.7 million in realized and unrealized losses on RMBS and derivative instruments, overshadowing the positive net interest income of $23.2 million.
The company's book value per share declined by $0.73 to $7.21, representing a negative quarterly total return of 4.66% when factoring in the $0.36 dividend payment. This decline signals erosion in shareholder value despite dividend maintenance.
Management attributed the poor performance to market turbulence stemming from two major catalysts: announced reciprocal tariffs by the Trump administration and the passage of the "One Big Beautiful Bill Act." These events created volatility resembling the COVID-19 aftermath, forcing Orchid to reduce its balance sheet and incur permanent losses to maintain prudent leverage levels.
The Agency RMBS market, Orchid's primary investment sector, failed to fully recover unlike other risk assets, resulting in negative excess returns for the quarter. Portfolio yields slightly decreased from 5.41% to 5.38%, while borrowing costs improved marginally from 4.29% to 4.23%.
Despite these challenges, Orchid maintains a strong liquidity position of $492.5 million (54% of stockholders' equity) and has diversified its repurchase agreement funding across 24 active lenders. The company's adjusted leverage ratio stands at 7.3:1, positioned at the lower end of its historical range.
The prepayment rate on Orchid's portfolio increased to a 3-month CPR of 10.1% from 7.8% in the previous quarter, potentially indicating higher refinancing activity in response to interest rate fluctuations. The company's effective duration decreased to 3.271 from 4.200, suggesting a reduced sensitivity to interest rate changes compared to year-end 2024.
VERO BEACH, Fla., July 24, 2025 (GLOBE NEWSWIRE) -- (July 24, 2025) – Orchid Island Capital, Inc. (NYSE:ORC) ("Orchid” or the "Company"), a real estate investment trust ("REIT"), today announced results of operations for the three month period ended June 30, 2025.
Second Quarter 2025 Results
- Net loss of
$33.6 million , or$0.29 per common share, which consists of: - Net interest income of
$23.2 million , or$0.20 per common share - Total expenses of
$5.0 million , or$0.04 per common share - Net realized and unrealized losses of
$51.7 million , or$0.45 per common share, on RMBS and derivative instruments, including net interest income on interest rate swaps - Second quarter dividends declared and paid of
$0.36 per common share - Book value per common share of
$7.21 at June 30, 2025 - Total return of (4.66)%, comprised of
$0.36 dividend per common share and$0.73 decrease in book value per common share, divided by beginning book value per common share
Other Financial Highlights
- Orchid maintained a strong liquidity position of
$492.5 million in cash and cash equivalents and unpledged securities, or approximately54% of stockholders' equity as of June 30, 2025 - Borrowing capacity in excess of June 30, 2025 outstanding repurchase agreement balances of
$6.7 billion , spread across 24 active lenders - Company to discuss results on Friday, July 25, 2025, at 10:00 AM ET
- Supplemental materials to be discussed on the call can be downloaded from the investor relations section of the Company’s website at https://ir.orchidislandcapital.com
Management Commentary
Commenting on the second quarter results, Robert E. Cauley, Chairman and Chief Executive Officer, said, “The second quarter of 2025 was a very turbulent period for financial markets, with two large catalysts driving the volatility. The initial shock, and clearly the larger of the two, were reciprocal tariffs announced by the Trump administration in early April. After the announcement, market conditions resembled those following the outbreak of Covid-19, if only slightly less severe. A week later, the administration announced a pause in implementation of the tariffs for 90 days and markets slowly recovered some semblance of stability. While market conditions remained volatile for the balance of the quarter, the market slowly grew less affected by subsequent developments on the tariff front and most risk assets recovered fully. The second catalyst – the administration's successful passage of the One Big Beautiful Bill Act – refocused the market on domestic issues versus trade. In conjunction with this shift in market focus, the incoming economic data proved resilient and expectations for Fed rate cuts continued to subside and get pushed further into the future.
“Notably for the Company, while risk assets generally recovered from the severe turmoil early in the quarter, the Agency RMBS sector did not fully recover, as least versus comparable duration hedges, resulting in negative excess returns for the quarter. We were forced to respond to severe market conditions in early April and reduce the balance sheet in order to maintain prudent levels of leverage – incurring modest permanent losses in the process. The Agency RMBS market continued to languish into the third quarter; however, returns available in the market remain very attractive. The Company continued to increase its capital base during the second quarter while maintaining leverage levels on the lower end of our historical range. As a result, Orchid believes that it is well positioned to capture the attractive returns available in the market currently as well as benefit if and when the Agency RMBS market recovers from the widening during the second quarter.”
Details of Second Quarter 2025 Results of Operations
The Company reported net loss of
Prepayments
For the quarter ended June 30, 2025, Orchid received
| Structured | |||
| PT RMBS | RMBS | Total | |
| Three Months Ended | Portfolio (%) | Portfolio (%) | Portfolio (%) |
| June 30, 2025 | 10.1 | 6.3 | 10.1 |
| March 31, 2025 | 7.8 | 4.5 | 7.8 |
| December 31, 2024 | 10.6 | 7.0 | 10.5 |
| September 30, 2024 | 8.8 | 6.4 | 8.8 |
| June 30, 2024 | 7.6 | 7.1 | 7.6 |
| March 31, 2024 | 6.0 | 5.9 | 6.0 |
Portfolio
The following tables summarize certain characteristics of Orchid’s PT RMBS (as defined below) and structured RMBS as of June 30, 2025 and December 31, 2024:
| ($ in thousands) | ||||||||
| Weighted | ||||||||
| Percentage | Average | |||||||
| of | Weighted | Maturity | ||||||
| Fair | Entire | Average | in | Longest | ||||
| Asset Category | Value | Portfolio | Coupon | Months | Maturity | |||
| June 30, 2025 | ||||||||
| Fixed Rate RMBS | $ | 6,978,561 | 99.8 | % | 5.45 | % | 333 | 1-Jul-55 |
| Interest-Only Securities | 14,550 | 0.2 | % | 4.01 | % | 206 | 25-Jul-48 | |
| Inverse Interest-Only Securities | 248 | 0.0 | % | 0.00 | % | 255 | 15-Jun-42 | |
| Total Mortgage Assets | $ | 6,993,359 | 100.0 | % | 5.42 | % | 331 | 1-Jul-55 |
| December 31, 2024 | ||||||||
| Fixed Rate RMBS | $ | 5,237,812 | 99.7 | % | 5.03 | % | 330 | 1-Nov-54 |
| Interest-Only Securities | 15,308 | 0.3 | % | 4.01 | % | 212 | 25-Jul-48 | |
| Inverse Interest-Only Securities | 190 | 0.0 | % | 0.00 | % | 261 | 15-Jun-42 | |
| Total Mortgage Assets | $ | 5,253,310 | 100.0 | % | 4.99 | % | 328 | 1-Nov-54 |
| ($ in thousands) | |||||||||
| June 30, 2025 | December 31, 2024 | ||||||||
| Percentage of | Percentage of | ||||||||
| Agency | Fair Value | Entire Portfolio | Fair Value | Entire Portfolio | |||||
| Fannie Mae | $ | 4,421,358 | 63.2 | % | $ | 3,693,032 | 70.3 | % | |
| Freddie Mac | 2,572,001 | 36.8 | % | 1,560,278 | 29.7 | % | |||
| Total Portfolio | $ | 6,993,359 | 100.0 | % | $ | 5,253,310 | 100.0 | % | |
| June 30, 2025 | December 31, 2024 | ||||
| Weighted Average Pass-through Purchase Price | $ | 102.38 | $ | 102.45 | |
| Weighted Average Structured Purchase Price | $ | 18.74 | $ | 18.74 | |
| Weighted Average Pass-through Current Price | $ | 99.98 | $ | 96.44 | |
| Weighted Average Structured Current Price | $ | 14.65 | $ | 14.38 | |
| Effective Duration (1) | 3.271 | 4.200 | |||
| (1 | ) | Effective duration is the approximate percentage change in price for a 100 basis point change in rates. An effective duration of 3.271 indicates that an interest rate increase of |
Financing, Leverage and Liquidity
As of June 30, 2025, the Company had outstanding repurchase obligations of approximately
| ($ in thousands) | |||||||
| Weighted | Weighted | ||||||
| Total | Average | Average | |||||
| Outstanding | % of | Borrowing | Maturity | ||||
| Counterparty | Balances | Total | Rate | in Days | |||
| Wells Fargo Bank, N.A. | $ | 385,253 | 5.75 | % | 4.47 | % | 18 |
| RBC Capital Markets, LLC | 382,428 | 5.75 | % | 4.47 | % | 18 | |
| J.P. Morgan Securities LLC | 348,072 | 5.23 | % | 4.48 | % | 16 | |
| Mirae Asset Securities (USA) Inc. | 338,514 | 5.09 | % | 4.53 | % | 110 | |
| ASL Capital Markets Inc. | 329,804 | 4.96 | % | 4.47 | % | 24 | |
| ABN AMRO Bank N.V. | 324,113 | 4.87 | % | 4.47 | % | 67 | |
| Marex Capital Markets Inc. | 310,890 | 4.67 | % | 4.47 | % | 59 | |
| Citigroup Global Markets Inc | 307,521 | 4.62 | % | 4.49 | % | 29 | |
| Goldman, Sachs & Co | 306,838 | 4.61 | % | 4.48 | % | 29 | |
| DV Securities, LLC Repo | 298,080 | 4.48 | % | 4.48 | % | 41 | |
| ING Financial Markets LLC | 295,129 | 4.43 | % | 4.48 | % | 31 | |
| Daiwa Securities America Inc. | 294,156 | 4.42 | % | 4.48 | % | 21 | |
| StoneX Financial Inc. | 284,546 | 4.28 | % | 4.47 | % | 17 | |
| South Street Securities, LLC | 281,970 | 4.24 | % | 4.47 | % | 62 | |
| Clear Street LLC | 281,435 | 4.23 | % | 4.48 | % | 68 | |
| Cantor Fitzgerald & Co | 278,749 | 4.19 | % | 4.47 | % | 16 | |
| Merrill Lynch, Pierce, Fenner & Smith | 260,220 | 3.91 | % | 4.50 | % | 21 | |
| MUFG Securities Canada, Ltd. | 256,787 | 3.86 | % | 4.45 | % | 8 | |
| Mitsubishi UFJ Securities (USA), Inc. | 250,750 | 3.77 | % | 4.49 | % | 16 | |
| The Bank of Nova Scotia | 246,144 | 3.70 | % | 4.48 | % | 28 | |
| Bank of Montreal | 228,211 | 3.43 | % | 4.48 | % | 21 | |
| Banco Santander SA | 186,933 | 2.81 | % | 4.48 | % | 16 | |
| Nomura Securities International, Inc. | 144,308 | 2.17 | % | 4.47 | % | 56 | |
| Lucid Prime Fund, LLC | 35,028 | 0.53 | % | 4.48 | % | 17 | |
| Total / Weighted Average | $ | 6,655,879 | 100.00 | % | 4.48 | % | 35 |
Hedging
In connection with its interest rate risk management strategy, the Company economically hedges a portion of the cost of its repurchase agreement funding against a rise in interest rates by entering into derivative financial instrument contracts. The Company has not elected hedging treatment under U.S. generally accepted accounting principles (“GAAP”) in order to align the accounting treatment of its derivative instruments with the treatment of its portfolio assets under the fair value option election. As such, all gains or losses on these instruments are reflected in earnings for all periods presented. At June 30, 2025, such instruments were comprised of U.S. Treasury note (“T-Note”) and Secured Overnight Financing Rate ("SOFR") futures contracts, interest rate swap agreements and contracts to sell to-be-announced ("TBA") securities.
The table below presents information related to the Company’s T-Note and SOFR futures contracts at June 30, 2025.
| ($ in thousands) | |||||||||
| June 30, 2025 | |||||||||
| Average | Weighted | Weighted | |||||||
| Contract | Average | Average | |||||||
| Notional | Entry | Effective | Open | ||||||
| Expiration Year | Amount | Rate | Rate | Equity(1) | |||||
| U.S. Treasury Note Futures Contracts (Short Positions)(2) | |||||||||
| September 2025 5-year T-Note futures (Sep 2025 - Sep 2030 Hedge Period) | $ | 487,500 | 4.03 | % | 3.72 | % | $ | (6,198 | ) |
| September 2025 10-year T-Note futures (Sep 2025 - Sep 2035 Hedge Period) | 228,500 | 4.23 | % | 3.96 | % | (3,842 | ) | ||
| September 2025 10-year Ultra futures (Sep 2025 - Sep 2035 Hedge Period) | 197,500 | 4.48 | % | 4.20 | % | (4,649 | ) | ||
| SOFR Futures Contracts (Short Positions) | |||||||||
| September 2025 3-Month SOFR futures (Jun 2025 - Sep 2025 Hedge Period) | $ | 28,750 | 4.05 | % | 4.33 | % | $ | 82 | |
| December 2025 3-Month SOFR futures (Sep 2025 - Dec 2025 Hedge Period) | 28,750 | 3.83 | % | 4.01 | % | 53 | |||
| March 2026 3-Month SOFR futures (Dec 2025 - Mar 2026 Hedge Period) | 28,750 | 3.69 | % | 3.67 | % | (6 | ) | ||
| June 2026 3-Month SOFR futures (Mar 2026 - Jun 2026 Hedge Period) | 28,750 | 3.61 | % | 3.40 | % | (59 | ) | ||
| September 2026 3-Month SOFR futures (Jun 2026 - Sep 2026 Hedge Period) | 28,750 | 3.57 | % | 3.18 | % | (111 | ) | ||
| December 2026 3-Month SOFR futures (Sep 2026 - Dec 2026 Hedge Period) | 28,750 | 3.55 | % | 3.07 | % | (141 | ) | ||
| March 2027 3-Month SOFR futures (Dec 2026 - Mar 2027 Hedge Period) | 28,750 | 3.56 | % | 3.03 | % | (151 | ) | ||
| June 2027 3-Month SOFR futures (Mar 2027 - Jun 2027 Hedge Period) | 28,750 | 3.56 | % | 3.05 | % | (148 | ) | ||
| ERIS SOFR Swap Futures Contracts (Short Positions)(3) | |||||||||
| September 2025 5-Year Term, | $ | 10,000 | 3.71 | % | 3.40 | % | $ | (129 | ) |
| (1 | ) | Open equity represents the cumulative gains (losses) recorded on open futures positions from inception. |
| (2 | ) | 5-Year T-Note futures contracts were valued at a price of |
| (3 | ) | ERIS swap futures are exchange traded futures that replicate the cash flows of an underlying swap position. |
The table below presents information related to the Company’s interest rate swap positions at June 30, 2025.
| ($ in thousands) | |||||||
| Average | |||||||
| Fixed | Average | Average | |||||
| Notional | Pay | Receive | Maturity | ||||
| Amount | Rate | Rate | (Years) | ||||
| Expiration > 1 to ≤ 5 years | $ | 1,822,500 | 2.87 | % | 4.45 | % | 3.9 |
| Expiration > 5 years | 2,020,800 | 3.69 | % | 4.48 | % | 7.2 | |
| $ | 3,843,300 | 3.30 | % | 4.46 | % | 5.7 | |
Dividends
In addition to other requirements that must be satisfied to qualify as a REIT, we must pay annual dividends to our stockholders of at least
| (in thousands, except per share data) | |||||
| Year | Per Share Amount | Total | |||
| 2013 | $ | 6.975 | $ | 4,662 | |
| 2014 | 10.800 | 22,643 | |||
| 2015 | 9.600 | 38,748 | |||
| 2016 | 8.400 | 41,388 | |||
| 2017 | 8.400 | 70,717 | |||
| 2018 | 5.350 | 55,814 | |||
| 2019 | 4.800 | 54,421 | |||
| 2020 | 3.950 | 53,570 | |||
| 2021 | 3.900 | 97,601 | |||
| 2022 | 2.475 | 87,906 | |||
| 2023 | 1.800 | 81,127 | |||
| 2024 | 1.440 | 96,309 | |||
| 2025 - YTD(1) | 0.840 | 93,603 | |||
| Totals | $ | 68.730 | $ | 798,509 | |
| (1 | ) | On July 9, 2025, the Company declared a dividend of |
Book Value Per Share
The Company's book value per share at June 30, 2025 was
Capital Allocation and Return on Invested Capital
The Company allocates capital to two RMBS sub-portfolios, the pass-through RMBS portfolio, consisting of mortgage pass-through certificates issued by Fannie Mae, Freddie Mac or Ginnie Mae (the “GSEs”) and collateralized mortgage obligations (“CMOs”) issued by the GSEs (“PT RMBS”), and the structured RMBS portfolio, consisting of interest-only (“IO”) and inverse interest-only (“IIO”) securities. As of June 30, 2025, approximately
The table below details the changes to the respective sub-portfolios during the quarter.
| (in thousands) | |||||||||||||||||||
| Portfolio Activity for the Quarter | |||||||||||||||||||
| Structured Security Portfolio | |||||||||||||||||||
| Inverse | |||||||||||||||||||
| Pass- | Interest | Interest | |||||||||||||||||
| Through | Only | Only | |||||||||||||||||
| Portfolio | Securities | Securities | Sub-total | Total | |||||||||||||||
| Market value - March 31, 2025 | $ | 6,723,011 | $ | 14,850 | $ | 233 | $ | 15,083 | $ | 6,738,094 | |||||||||
| Securities purchased | 1,018,145 | - | - | - | 1,018,145 | ||||||||||||||
| Securities sold | (565,271 | ) | - | - | - | (565,271 | ) | ||||||||||||
| Losses on sales | (7,990 | ) | - | - | - | (7,990 | ) | ||||||||||||
| Return of investment | n/a | (561 | ) | - | (561 | ) | (561 | ) | |||||||||||
| Pay-downs | (198,598 | ) | n/a | n/a | n/a | (198,598 | ) | ||||||||||||
| Premium lost due to pay-downs | (1,471 | ) | n/a | n/a | n/a | (1,471 | ) | ||||||||||||
| Mark to market gains | 10,735 | 261 | 15 | 276 | 11,011 | ||||||||||||||
| Market value - June 30, 2025 | $ | 6,978,561 | $ | 14,550 | $ | 248 | $ | 14,798 | $ | 6,993,359 | |||||||||
The tables below present the allocation of capital between the respective portfolios at June 30, 2025 and March 31, 2025 and the return on invested capital for each sub-portfolio for the three month period ended June 30, 2025.
| ($ in thousands) | |||||||||||||||||||
| Capital Allocation | |||||||||||||||||||
| Structured Security Portfolio | |||||||||||||||||||
| Inverse | |||||||||||||||||||
| Pass- | Interest | Interest | |||||||||||||||||
| Through | Only | Only | |||||||||||||||||
| Portfolio | Securities | Securities | Sub-total | Total | |||||||||||||||
| June 30, 2025 | |||||||||||||||||||
| Market value | $ | 6,978,561 | $ | 14,550 | $ | 248 | $ | 14,798 | $ | 6,993,359 | |||||||||
| Cash | 456,328 | - | - | - | 456,328 | ||||||||||||||
| Borrowings(1) | (6,655,879 | ) | - | - | - | (6,655,879 | ) | ||||||||||||
| Total | $ | 779,010 | $ | 14,550 | $ | 248 | $ | 14,798 | $ | 793,808 | |||||||||
| % of Total | 98.1 | % | 1.9 | % | 0.0 | % | 1.9 | % | 100.0 | % | |||||||||
| March 31, 2025 | |||||||||||||||||||
| Market value | $ | 6,723,011 | $ | 14,850 | $ | 233 | $ | 15,083 | $ | 6,738,094 | |||||||||
| Cash | 400,092 | - | - | - | 400,092 | ||||||||||||||
| Borrowings(2) | (6,418,641 | ) | - | - | - | (6,418,641 | ) | ||||||||||||
| Total | $ | 704,462 | $ | 14,850 | $ | 233 | $ | 15,083 | $ | 719,545 | |||||||||
| % of Total | 97.9 | % | 2.1 | % | 0.0 | % | 2.1 | % | 100.0 | % | |||||||||
| (1 | ) | At June 30, 2025, there were outstanding repurchase agreement balances of |
| (2 | ) | At March 31, 2025, there were outstanding repurchase agreement balances of |
The return on invested capital in the PT RMBS and structured RMBS portfolios was approximately (4.1)% and
| ($ in thousands) | |||||||||||||||||||
| Returns for the Quarter Ended June 30, 2025 | |||||||||||||||||||
| Structured Security Portfolio | |||||||||||||||||||
| Inverse | |||||||||||||||||||
| Pass- | Interest | Interest | |||||||||||||||||
| Through | Only | Only | |||||||||||||||||
| Portfolio | Securities | Securities | Sub-total | Total | |||||||||||||||
| Income (net of borrowing cost) | $ | 22,895 | $ | 259 | $ | - | $ | 259 | $ | 23,154 | |||||||||
| Realized and unrealized gains | 1,274 | 261 | 15 | 276 | 1,550 | ||||||||||||||
| Derivative losses | (53,286 | ) | n/a | n/a | n/a | (53,286 | ) | ||||||||||||
| Total Return | $ | (29,117 | ) | $ | 520 | $ | 15 | $ | 535 | $ | (28,582 | ) | |||||||
| Beginning Capital Allocation | $ | 704,462 | $ | 14,850 | $ | 233 | $ | 15,083 | $ | 719,545 | |||||||||
| Return on Invested Capital for the Quarter(1) | (4.1 | )% | 3.5 | % | 6.4 | % | 3.5 | % | (4.0 | )% | |||||||||
| Average Capital Allocation(2) | $ | 741,736 | $ | 14,700 | $ | 241 | $ | 14,941 | $ | 756,677 | |||||||||
| Return on Average Invested Capital for the Quarter(3) | (3.9 | )% | 3.5 | % | 6.2 | % | 3.6 | % | (3.8 | )% | |||||||||
| (1 | ) | Calculated by dividing the Total Return by the Beginning Capital Allocation, expressed as a percentage. |
| (2 | ) | Calculated using two data points, the Beginning and Ending Capital Allocation balances. |
| (3 | ) | Calculated by dividing the Total Return by the Average Capital Allocation, expressed as a percentage. |
Stock Offerings
On March 7, 2023, we entered into an equity distribution agreement (the “March 2023 Equity Distribution Agreement”) with three sales agents pursuant to which we could offer and sell, from time to time, up to an aggregate amount of
On June 11, 2024, we entered into an equity distribution agreement (the “June 2024 Equity Distribution Agreement”) with three sales agents pursuant to which we could offer and sell, from time to time, up to an aggregate amount of
On February 24, 2025, we entered into an equity distribution agreement (the “February 2025 Equity Distribution Agreement”) with four sales agents pursuant to which we may offer and sell, from time to time, up to an aggregate amount of
Stock Repurchase Program
On July 29, 2015, the Company’s Board of Directors authorized the repurchase of up to 400,000 shares of our common stock. The timing, manner, price and amount of any repurchases is determined by the Company in its discretion and is subject to economic and market conditions, stock price, applicable legal requirements and other factors. The authorization does not obligate the Company to acquire any particular amount of common stock and the program may be suspended or discontinued at the Company’s discretion without prior notice. On February 8, 2018, the Board of Directors approved an increase in the stock repurchase program for up to an additional 904,564 shares of the Company’s common stock. Coupled with the 156,751 shares remaining from the original 400,000 share authorization, the increased authorization brought the total authorization to 1,061,316 shares, representing
From the inception of the stock repurchase program through June 30, 2025, the Company repurchased a total of 6,257,826 shares at an aggregate cost of approximately
Earnings Conference Call Details
An earnings conference call and live audio webcast will be hosted Friday, July 25, 2025, at 10:00 AM ET. Participants can register and receive dial-in information at https://register-conf.media-server.com/register/BI0d2dafe0d2034d3da70db1419b0b2dd0. A live audio webcast of the conference call can be accessed at https://edge.media-server.com/mmc/p/hzi7tu5t or via the investor relations section of the Company's website at https://ir.orchidislandcapital.com. An audio archive of the webcast will be available for 30 days after the call.
About Orchid Island Capital, Inc.
Orchid Island Capital, Inc. is a specialty finance company that invests on a leveraged basis in Agency RMBS. Our investment strategy focuses on, and our portfolio consists of, two categories of Agency RMBS: (i) traditional pass-through Agency RMBS, such as mortgage pass-through certificates, and CMOs issued by the GSEs, and (ii) structured Agency RMBS, such as IOs, IIOs and principal only securities, among other types of structured Agency RMBS. Orchid is managed by Bimini Advisors, LLC, a registered investment adviser with the Securities and Exchange Commission.
Forward-Looking Statements
Statements herein relating to matters that are not historical facts, including, but not limited to statements regarding interest rates, inflation, liquidity, pledging of our structured RMBS, funding levels and spreads, prepayment speeds, portfolio composition, positioning and repositioning, hedging levels, leverage ratio, dividends, investment and return opportunities, the supply and demand for Agency RMBS and the performance of the Agency RMBS sector generally, the effect of actual or expected actions of the U.S. government, including the Fed, market expectations, capital raising, future opportunities and prospects of the Company, the stock repurchase program, geopolitical uncertainty and general economic conditions (including the effects of tariffs, trade wars, inflation, the U.S. deficit, and the strength of the U.S. dollar), are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. The reader is cautioned that such forward-looking statements are based on information available at the time and on management's good faith belief with respect to 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 Orchid Island Capital, Inc.'s filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Orchid Island Capital, Inc. assumes no obligation to update forward-looking statements to reflect subsequent results, changes in assumptions or changes in other factors affecting forward-looking statements.
CONTACT:
Orchid Island Capital, Inc.
Robert E. Cauley
Chairman and Chief Executive Officer
772-231-1400
https://ir.orchidislandcapital.com
Summarized Financial Statements
The following is a summarized presentation of the unaudited balance sheets as of June 30, 2025, and December 31, 2024, and the unaudited quarterly statements of operations for the six and three months ended June 30, 2025 and 2024. Amounts presented are subject to change.
| ORCHID ISLAND CAPITAL, INC. BALANCE SHEETS ($ in thousands, except per share data) (Unaudited - Amounts Subject to Change) | |||||
| June 30, 2025 | December 31, 2024 | ||||
| ASSETS: | |||||
| Mortgage-backed securities, at fair value | $ | 6,993,359 | $ | 5,253,310 | |
| U.S. Treasury securities, available-for-sale | 125,151 | 100,551 | |||
| Cash, cash equivalents and restricted cash | 456,328 | 335,053 | |||
| Accrued interest receivable | 31,982 | 23,044 | |||
| Derivative assets, at fair value | - | 9,277 | |||
| Receivable for investment securities and TBA transactions | 3,223 | - | |||
| Other assets | 588 | 392 | |||
| Total Assets | $ | 7,610,631 | $ | 5,721,627 | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
| Repurchase agreements | $ | 6,655,879 | $ | 5,025,543 | |
| Payable for investment securities and TBA transactions | 4,004 | - | |||
| Dividends payable | 15,214 | 9,940 | |||
| Derivative liabilities, at fair value | 4,359 | 332 | |||
| Accrued interest payable | 13,848 | 10,750 | |||
| Due to affiliates | 1,349 | 1,167 | |||
| Other liabilities | 4,018 | 5,395 | |||
| Total Liabilities | 6,698,671 | 5,053,127 | |||
| Total Stockholders' Equity | 911,960 | 668,500 | |||
| Total Liabilities and Stockholders' Equity | $ | 7,610,631 | $ | 5,721,627 | |
| Common shares outstanding | 126,566,926 | 82,622,464 | |||
| Book value per share | $ | 7.21 | $ | 8.09 | |
| ORCHID ISLAND CAPITAL, INC. STATEMENTS OF COMPREHENSIVE INCOME (LOSS) ($ in thousands, except per share data) (Unaudited - Amounts Subject to Change) | |||||||||||||||
| Six Months Ended June 30, | Three Months Ended June 30, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Interest income | $ | 173,379 | $ | 101,935 | $ | 92,289 | $ | 53,064 | |||||||
| Interest expense | (130,512 | ) | (105,122 | ) | (69,135 | ) | (53,761 | ) | |||||||
| Net interest income (expense) | 42,867 | (3,187 | ) | 23,154 | (697 | ) | |||||||||
| Losses (gains) on RMBS and derivative contracts | (50,101 | ) | 26,102 | (51,736 | ) | 98 | |||||||||
| Net portfolio (loss) income | (7,234 | ) | 22,915 | (28,582 | ) | (599 | ) | ||||||||
| Expenses | 9,222 | 8,118 | 4,996 | 4,380 | |||||||||||
| Net (loss) income | $ | (16,456 | ) | $ | 14,797 | $ | (33,578 | ) | $ | (4,979 | ) | ||||
| Other comprehensive income (loss) | 186 | (10 | ) | (64 | ) | 37 | |||||||||
| Comprehensive net (loss) income | $ | (16,270 | ) | $ | 14,787 | $ | (33,642 | ) | $ | (4,942 | ) | ||||
| Basic and diluted net (loss) income per share | $ | (0.16 | ) | $ | 0.27 | $ | (0.29 | ) | $ | (0.09 | ) | ||||
| Weighted Average Shares Outstanding | 104,742,591 | 54,798,596 | 114,453,216 | 57,763,857 | |||||||||||
| Dividends Declared Per Common Share: | $ | 0.72 | $ | 0.96 | $ | 0.36 | $ | 0.36 | |||||||
| Three Months Ended June 30, | |||||||
| Key Balance Sheet Metrics | 2025 | 2024 | |||||
| Average RMBS(1) | $ | 6,865,727 | $ | 4,203,416 | |||
| Average repurchase agreements(1) | 6,537,260 | 4,028,601 | |||||
| Average stockholders' equity(1) | 883,919 | 518,782 | |||||
| Adjusted leverage ratio - as of period end(2) | 7.3:1 | 7.8:1 | |||||
| Economic leverage ratio - as of period end(3) | 7.3:1 | 7.1:1 | |||||
| Key Performance Metrics | |||||||
| Average yield on RMBS(4) | 5.38 | % | 5.05 | % | |||
| Average cost of funds(4) | 4.23 | % | 5.34 | % | |||
| Average economic cost of funds(5) | 2.95 | % | 2.41 | % | |||
| Average interest rate spread(6) | 1.15 | % | (0.29 | )% | |||
| Average economic interest rate spread(7) | 2.43 | % | 2.64 | % | |||
| (1 | ) | Average RMBS, borrowings and stockholders’ equity balances are calculated using two data points, the beginning and ending balances. |
| (2 | ) | The adjusted leverage ratio is calculated by dividing ending repurchase agreement liabilities by ending stockholders’ equity. |
| (3 | ) | The economic leverage ratio is calculated by dividing ending total liabilities adjusted for net notional TBA positions by ending stockholders' equity. |
| (4 | ) | Portfolio yields and costs of funds are calculated based on the average balances of the underlying investment portfolio/borrowings balances and are annualized for the quarterly periods presented. |
| (5 | ) | Represents the interest cost of our borrowings and the effect of derivative agreements attributed to the period related to hedging activities, divided by average borrowings. |
| (6 | ) | Average interest rate spread is calculated by subtracting average cost of funds from average yield on RMBS. |
| (7 | ) | Average economic interest rate spread is calculated by subtracting average economic cost of funds from average yield on RMBS. |
FAQ
What were Orchid Island Capital's (ORC) key financial results for Q2 2025?
How did ORC's book value per share change in Q2 2025?
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What was ORC's leverage ratio and borrowing capacity as of Q2 2025?
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