Orchid Island Capital Reports $20M Q1 Loss and $57.1M Net Interest Income
Orchid Island Capital reported a first-quarter net loss of $20.0 million, driven by $69.6 million in RMBS and derivative losses that offset $57.1 million of net interest income. The REIT declared a $0.36 per share dividend, ended March 31 with $7.08 book value and $759 million liquidity.
1. Q1 Financial Results
Orchid Island Capital recorded a net loss of $20.0 million, or $0.11 per share, for the quarter ended March 31, 2026. Net interest income was $57.1 million ($0.30 per share) against $7.4 million in expenses, with net realized and unrealized losses of $69.6 million. The company declared and paid a $0.36 per share dividend, resulting in a $0.46 per share decline in book value to $7.08.
2. RMBS Portfolio Performance
The yield on Orchid’s Agency RMBS portfolio rose from 5.57% to 5.75% quarter over quarter, while borrowing costs on repurchase agreements fell from 4.14% to 3.84%. Scheduled and unscheduled principal repayments totaled $404.7 million, translating to a 14.7% constant prepayment rate for the quarter.
3. Liquidity and Capital Position
As of March 31, 2026, Orchid held $759.0 million in cash, cash equivalents and unpledged securities, representing 55% of stockholders’ equity. The REIT maintained borrowing capacity in excess of $10.9 billion across 28 active lenders.
4. Market Conditions and Outlook
Management noted that geopolitical tensions on February 28 triggered interest rate volatility and widening mortgage spreads, eroding book value. With implied volatility retracing and spreads tightening post-quarter end, the company affirmed its dividend and sees historically attractive return prospects in a flatter yield curve environment.