Orchid Island Capital, Inc. reported a net loss of $16.5 million, or $0.16 per share, for the six months ended June 30, 2025, a significant decline from the net income of $14.8 million, or $0.27 per share, recorded in the same period of 2024. The company also experienced a larger net loss of $33.6 million, or $0.29 per share, for the three months ended June 30, 2025, compared to a loss of $5.0 million, or $0.09 per share, in the prior year. The decline in profitability was attributed to a combination of increased interest expenses and realized losses on mortgage-backed securities (MBS), which totaled $9.3 million for the six-month period.
Total interest income for the first half of 2025 reached $173.4 million, up from $101.9 million in the same period of 2024, driven by a 35 basis point increase in the yield on average residential mortgage-backed securities (RMBS) and a $2.4 billion increase in average RMBS. However, interest expenses also rose to $130.5 million from $105.1 million, reflecting a $25.4 million increase due to higher average outstanding borrowings. The company's total assets increased to $7.6 billion as of June 30, 2025, compared to $5.7 billion at the end of 2024, primarily due to the growth in its RMBS portfolio.
Operationally, Orchid Island Capital has been active in capital raising, having issued a total of 34.4 million shares under its February 2025 Equity Distribution Agreement, generating approximately $265.4 million in gross proceeds. The company also repurchased 1.1 million shares at an average price of $6.52 during the second quarter of 2025, with a remaining authorization for 2.7 million shares under its stock repurchase program. As of June 30, 2025, the company had cash and cash equivalents of $440.8 million, providing a solid liquidity position to support its operations and potential investments.
Looking ahead, Orchid Island Capital's management remains cautious amid ongoing market volatility influenced by economic conditions and interest rate fluctuations. The company continues to focus on its investment strategy in Agency RMBS, which includes both traditional pass-through securities and structured RMBS. The management anticipates that the current economic environment, characterized by high fiscal deficits and evolving monetary policy, will present both challenges and opportunities for the company's portfolio management and capital allocation strategies. The company aims to maintain its REIT status by distributing at least 90% of its taxable income to shareholders, with a dividend of $0.12 per share declared for payment in August 2025.
About Orchid Island Capital, Inc.
Orchid Island Capital, Inc. is a Maryland-based REIT that invests in residential mortgage-backed securities (RMBS), primarily agency-backed pass-through and structured securities. It focuses on generating attractive long-term returns through strategic asset allocation, leveraging, and risk management. The company relies on external management, maintains a focus on interest rate and prepayment risks, and distributes at least 90% of taxable income to shareholders.
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