Orchid Island Capital Stock Earnings Reports

Orchid Island Capital reported a Q1 2026 net loss of $0.11 per share versus Q4 net income of $0.62; book value fell to $7.08 from $7.54 at year-end. Portfolio size grew materially (average balance ~ $11B vs $9.5B in Q4) and leverage ticked up slightly (7.9% vs 7.4%). The company declared the same quarterly dividend ($0.36). Mortgage spreads were volatile in the quarter (sharp tighten after the GSE purchase announcement, then widening with geopolitical shocks), but have partially retraced into April. Management deployed capital opportunistically (~$1.6B purchases in Q1) into agency specified pools with emphasis on call-protected, production coupons (concentrated in 5%–6% coupons and 92% in specified pools with payup protection). They modestly reduced weighted average coupon and increased swap usage in the hedge book; duration gap remained small (net long DV01 ~ $372k) and hedge coverage ~65% of repo. Funding conditions improved meaningfully (repo funding ~11–13 bps over SOFR). Management is constructive on the market—citing stable rates, low implied volatility, tighter swap spreads and improved funding—and believes the environment is favorable for levered agency MBS investing, while noting the war in the Middle East remains the primary macro risk. Modeled returns on the combined portfolio (inclusive of hedges at current funding) are in the mid-teens (roughly 15%–17% ROE).