Orchid Island Capital, Inc. reported a net loss of $19.96 million, or $0.11 per share, for the first quarter of 2026, a significant decline from the net income of $17.12 million, or $0.18 per share, recorded in the same period of 2025. The company's interest income surged to $157.84 million, up from $81.09 million year-over-year, while interest expenses also increased to $100.78 million from $61.38 million. This resulted in a net interest income of $57.06 million, compared to $19.71 million in the prior year. The substantial increase in interest income was attributed to a higher average yield on the company's residential mortgage-backed securities (RMBS) portfolio, which rose to 5.75% from 5.41%.
The company's total assets grew to $12.67 billion as of March 31, 2026, up from $11.68 billion at the end of 2025. This increase was primarily driven by a rise in the fair value of mortgage-backed securities, which reached $11.34 billion, compared to $10.63 billion at the end of the previous year. The company also reported a significant increase in its cash and cash equivalents, totaling $674.02 million, compared to $665.87 million at the end of 2025. However, the accumulated deficit widened to $203.70 million from $183.74 million, reflecting ongoing challenges in profitability.
Operationally, Orchid Island Capital continued to expand its equity distribution agreements, issuing 14.56 million shares under its October 2025 Equity Distribution Agreement, generating approximately $107.77 million in net proceeds. The company has maintained a robust stock repurchase program, with 2.72 million shares remaining authorized for repurchase as of April 2026. Despite these efforts, the company faced challenges in managing its portfolio, with unrealized losses on mortgage-backed securities amounting to $115.97 million during the quarter, compared to unrealized gains of $77.59 million in the prior year.
Looking ahead, Orchid Island Capital's management expressed caution regarding the economic environment, particularly in light of rising interest rates and geopolitical tensions, including the ongoing conflict in the Middle East. The company anticipates that these factors may continue to impact its operations and financial performance. The management emphasized the importance of maintaining liquidity and managing leverage effectively, with an economic leverage ratio of 7.9 to 1 as of March 31, 2026, compared to 7.4 to 1 at the end of 2025. The company remains focused on its strategy of investing in Agency RMBS while navigating the complexities of the current market landscape.
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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