Orchid Island Capital (ORC) Q1 2026 earnings summary

Executive summary

• Reported a net loss of $20.0 million, or $0.11 per share, for Q1 2026, down from net income of $0.62 per share in Q4 2025 and $17.1 million in Q1 2025.

• Book value per share declined to $7.08 from $7.54 at year-end 2025.

• Portfolio size increased, with average balance rising to $11 billion from $9.5 billion sequentially.

• Declared dividends of $0.36 per share, unchanged from Q4.

• Significant market volatility due to geopolitical events and shifting Fed policy impacted results.

Financial highlights

• Net interest income was $57.1 million, with economic net interest income at $71.7 million for Q1 2026.

• Realized yield on the portfolio increased to 5.75% from 5.57% quarter-over-quarter.

• Economic net interest spread rose to 2.47% from 2.30% sequentially.

• Leverage ratio increased to 7.9 from 7.4 at the end of Q4.

• Repurchase agreement borrowing costs decreased to 3.79% from 4.14% in Q4 2025.

Outlook and guidance

• Management expects continued market uncertainty due to the ongoing war in Iran, inflation, and Fed policy ambiguity.

• Modeled returns for the combined portfolio, including hedges and current funding, are in the 15%-17% ROE range.

• Portfolio positioned with substantial call protection and limited exposure to elevated prepayment risk.

• Growth is seen as accretive to earnings, with expense ratio declining as the company scales.

• Dividend rate has been slightly revised, with comfort in sustainability.