Summary of Orchid Island Capital, Inc. News Core Viewpoint Orchid Island Capital, Inc. has declared a monthly cash dividend of $0.12 per share for August 2025, with plans for regular monthly distributions to its common stockholders. The company is focused on maintaining its status as a real estate investment trust (REIT) by distributing at least 90% of its taxable income. Group 1: Dividend Announcement - The Board of Directors declared a monthly cash dividend of $0.12 per share for August 2025, payable on September 29, 2025, to stockholders of record as of August 29, 2025, with an ex-dividend date of August 29, 2025 [1] - The next common stock dividend announcement is expected on September 8, 2025 [7] Group 2: REIT Compliance and Distribution Strategy - To qualify as a REIT, the company must distribute annually at least 90% of its REIT taxable income, excluding net capital gains [2] - The company has not established a minimum distribution payment level and does not guarantee future distributions [2] Group 3: Shareholder Information - As of August 13, 2025, the company had 133,172,673 shares of common stock outstanding, an increase from 130,595,848 shares as of July 31, 2025 [3] Group 4: RMBS Portfolio Characteristics - Orchid Island Capital, Inc. invests in Agency RMBS, focusing on traditional pass-through Agency RMBS and structured Agency RMBS [4] - The company is managed by Bimini Advisors, LLC, a registered investment adviser [4] Group 5: RMBS Valuation and Characteristics - As of July 31, 2025, the total mortgage assets amounted to $7,350,578,000, with Fannie Mae and Freddie Mac representing 60.1% and 39.9% of the portfolio, respectively [11] - The company holds a significant portion of its assets in whole pool RMBS, accounting for 94.3% of total mortgage assets [12]

PART I [Financial Statements](index=4&type=section&id=ITEM%201.%20Financial%20Statements) This section presents Orchid Island Capital, Inc.'s unaudited condensed financial statements as of June 30, 2025, including balance sheets, income statements, equity statements, cash flows, and explanatory notes [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) Total assets grew to **$7.61 billion** by June 30, 2025, driven by mortgage-backed securities and funded by repurchase agreements and equity, with stockholders' equity reaching **$912.0 million** Condensed Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$7,610,631** | **$5,721,627** | | Mortgage-backed securities, at fair value | $6,993,359 | $5,253,310 | | Cash and cash equivalents | $440,756 | $309,330 | | **Total Liabilities** | **$6,698,671** | **$5,053,127** | | Repurchase agreements | $6,655,879 | $5,025,543 | | **Total Stockholders' Equity** | **$911,960** | **$668,500** | [Condensed Statements of Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Statements%20of%20Comprehensive%20Income%20(Loss)) The company reported a **$16.5 million** net loss for the six months ended June 30, 2025, primarily due to derivative losses, contrasting with a **$14.8 million** net income in the prior year Statement of Comprehensive Income (Loss) Summary (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net interest income (expense) | $42,867 | $(3,187) | $23,154 | $(697) | | (Losses) gains on derivative instruments | $(127,945) | $113,967 | $(53,286) | $26,068 | | **Net (loss) income** | **$(16,456)** | **$14,797** | **$(33,578)** | **$(4,979)** | | **Basic and diluted net (loss) income per share** | **$(0.16)** | **$0.27** | **$(0.29)** | **$(0.09)** | [Condensed Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Statements%20of%20Stockholders%27%20Equity) Stockholders' equity increased to **$912.0 million** by June 30, 2025, driven by **$344.8 million** in common stock issuances, offsetting a **$16.5 million** net loss and **$78.4 million** in dividends - For the six months ended June 30, 2025, the company issued common stock generating net proceeds of **$344.8 million** (**$205.4 million** in Q1 and **$139.4 million** in Q2)[16](index=16&type=chunk) - Cash dividends declared for the first six months of 2025 totaled **$78.4 million** (**$35.7 million** in Q1 and **$42.6 million** in Q2)[16](index=16&type=chunk) - The company repurchased and retired **1,113,000** shares for a total cost of **$7.26 million** in the second quarter of 2025[16](index=16&type=chunk) [Condensed Statements of Cash Flows](index=7&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) Net cash increased by **$121.3 million** for the six months ended June 30, 2025, with **$44.2 million** from operations, **$1.82 billion** used in investing, and **$1.89 billion** provided by financing activities Cash Flow Summary (in thousands) | Cash Flow Category | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $44,222 | $64,300 | | Net Cash Used in Investing Activities | $(1,817,749) | $(719,723) | | Net Cash Provided by Financing Activities | $1,894,802 | $712,145 | | **Net Increase in Cash** | **$121,275** | **$56,722** | [Notes to Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) Notes detail accounting policies, RMBS investments, capital raising via 'at the market' offerings, portfolio composition, repurchase agreements, derivative hedging, and related party transactions - The company is engaged in managing a leveraged investment portfolio of residential mortgage-backed securities (RMBS)[20](index=20&type=chunk) - Through June 30, 2025, the company issued **34,355,086** shares under its February 2025 Equity Distribution Agreement for net proceeds of approximately **$261.2 million**[23](index=23&type=chunk) Mortgage-Backed Securities Portfolio (in thousands) | Security Type | Fair Value (June 30, 2025) | Fair Value (Dec 31, 2024) | | :--- | :--- | :--- | | Pass-Through RMBS | $6,978,561 | $5,237,812 | | Structured RMBS | $14,798 | $15,498 | | **Total** | **$6,993,359** | **$5,253,310** | Repurchase Agreements by Maturity (in thousands) | Maturity | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Between 2 and 30 days | $4,657,644 | $4,656,303 | | Between 31 and 90 days | $1,781,505 | $192,338 | | Greater than 90 days | $216,730 | $176,902 | | **Total** | **$6,655,879** | **$5,025,543** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, including a net loss driven by derivative losses, growth in the RMBS portfolio, and an outlook on market volatility and investment opportunities [Results of Operations](index=28&type=section&id=Results%20of%20Operations) The company reported a **$16.5 million** net loss for the six months ended June 30, 2025, primarily due to derivative losses, despite improved net interest income of **$42.9 million** Net (Loss) Income Summary (in thousands) | Component | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :--- | :--- | :--- | :--- | | Net interest income (expense) | $42,867 | $(3,187) | $46,054 | | (Losses) gains on RMBS and derivative contracts | $(50,101) | $26,102 | $(76,203) | | Expenses | $(9,222) | $(8,118) | $(1,104) | | **Net (loss) income** | **$(16,456)** | **$14,797** | **$(31,253)** | GAAP vs. Economic Net Interest Income (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | GAAP Net Interest Income (Expense) | $42,867 | $(3,187) | | Economic Net Interest Income | $84,716 | $53,859 | [Financial Condition](index=37&type=section&id=Financial%20Condition) The RMBS portfolio grew to **$7.0 billion** by June 30, 2025, financed by **$6.7 billion** in repurchase agreements, maintaining a stable **7.3:1** economic leverage ratio Portfolio and Leverage Metrics | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Mortgage Assets (Fair Value) | $6,993,359 thousand | $5,253,310 thousand | | Repurchase Agreements | $6,655,879 thousand | $5,025,543 thousand | | Stockholders' Equity | $911,959 thousand | $668,500 thousand | | Economic Leverage | 7.3:1 | 7.3:1 | | Adjusted Leverage | 7.3:1 | 7.5:1 | [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains liquidity through internal cash and RMBS cash flows, supplemented by external repurchase agreements and equity offerings, which are deemed sufficient for obligations - As of June 30, 2025, the company had cash and cash equivalents of **$440.8 million**[211](index=211&type=chunk) - Primary external liquidity sources are master repurchase agreements, the TBA security market, and public or private equity/debt offerings[205](index=205&type=chunk) - The company has utilized a series of equity distribution agreements to raise capital, with the latest February 2025 agreement allowing for up to **$350 million** in share offerings[216](index=216&type=chunk) [Outlook](index=41&type=section&id=Outlook) Q2 2025 was turbulent due to tariff announcements and new legislation, yet the economy remained resilient, creating attractive investment opportunities in the Agency RMBS market - Q2 2025 market volatility was driven by the announcement of 'reciprocal' tariffs and the signing of the 'One Big Beautiful Bill Act'[217](index=217&type=chunk)[218](index=218&type=chunk) - Despite initial expectations of a slowdown, the economy has remained resilient, supported by fiscal deficits, and expectations for Fed rate cuts have been pushed further into the future[219](index=219&type=chunk)[238](index=238&type=chunk) - The Agency RMBS market has lagged but offers elevated returns, and the company has increased its capital base to capitalize on these favorable investment opportunities[239](index=239&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=46&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks include interest rate, prepayment, spread, liquidity, extension, and counterparty credit risks, with hedging strategies and sensitivity analysis presented - The company's primary market risks include interest rate risk, prepayment risk, spread risk, liquidity risk, extension risk, and counterparty credit risk[244](index=244&type=chunk) Interest Rate Sensitivity Analysis (as of June 30, 2025) | Change in Interest Rate | Estimated Change in Portfolio Market Value | Estimated Change in Book Value | | :--- | :--- | :--- | | -100 Basis Points | (0.94)% | (7.22)% | | -50 Basis Points | (0.31)% | (2.38)% | | **Base** | **0.00%** | **0.00%** | | +50 Basis Points | (0.03)% | (0.23)% | | +100 Basis Points | (0.38)% | (2.92)% | [Controls and Procedures](index=49&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no significant changes to internal control over financial reporting - Based on an evaluation as of June 30, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[266](index=266&type=chunk) - No significant changes to internal control over financial reporting occurred during the quarter ended June 30, 2025[267](index=267&type=chunk) PART II [Legal Proceedings](index=51&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is not involved in any material pending legal proceedings - The company is not party to any material pending legal proceedings[269](index=269&type=chunk) [Risk Factors](index=51&type=section&id=ITEM%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred since the December 31, 2024 Annual Report on Form 10-K - As of June 30, 2025, there have been no material changes in risk factors from those set forth in the Annual Report on Form 10-K for the year ended December 31, 2024[270](index=270&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company had no unregistered equity sales in Q2 2025 but repurchased **1,113,224** shares at a weighted average price of **$6.52** under its stock repurchase program Share Repurchase Activity (Q2 2025) | Period | Total Shares Repurchased | Weighted Average Price Paid Per Share | Shares Purchased as Part of Program | | :--- | :--- | :--- | :--- | | April 2025 | 1,113,224 | $6.52 | 1,113,224 | | May 2025 | - | - | - | | June 2025 | 2,786 | $7.01 | - | | **Total** | **1,116,010** | **$6.52** | **1,113,224** | - As of the end of April 2025, **2,719,137** shares remained available for repurchase under the authorized program[273](index=273&type=chunk) [Defaults upon Senior Securities](index=51&type=section&id=ITEM%203.%20Defaults%20upon%20Senior%20Securities) The company reports no defaults on senior securities - None[274](index=274&type=chunk) [Mine Safety Disclosures](index=51&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not Applicable[275](index=275&type=chunk) [Other Information](index=51&type=section&id=ITEM%205.%20Other%20Information) No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025 - No directors or officers adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the second quarter of 2025[276](index=276&type=chunk) [Exhibits](index=52&type=section&id=ITEM%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, officer certifications, and XBRL data files - Exhibits filed include Articles of Amendment, Amended and Restated Bylaws, CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act, and Inline XBRL documents[278](index=278&type=chunk)

Financial Data and Key Metrics Changes - The company reported a loss of $0.29 per share in Q2 2025, compared to income of $0.18 per share in Q1 2025. Excluding realized and unrealized losses, net income was $0.16 per share, unchanged from Q1 [5] - Book value decreased from $7.94 per share at the end of Q1 to $7.21 at the end of Q2. Total return for the quarter was negative 4.66%, compared to positive 2.6% in Q1 [5] - The company maintained dividends of $0.36 in both quarters [5] Business Line Data and Key Metrics Changes - Average mortgage-backed securities (MBS) during the quarter increased to $6.9 billion from just under $6 billion in Q1. The leverage ratio decreased from $7.8 billion at the end of Q1 to $7.3 billion at the end of Q2 [6] - Prepayment speeds increased to 10.1% in Q2 from 7.8% in Q1, while liquidity rose to 54% from 52% [6] Market Data and Key Metrics Changes - The market experienced significant volatility due to reciprocal tariffs and the passage of a major bill, impacting the overall market outlook [8][9] - The U.S. Treasury curve has been steepening, which is significant for levered MBS investors as it makes hedging positions using swaps more attractive [13][20] Company Strategy and Development Direction - The company is shifting its portfolio strategy towards a more concentrated production coupon bias, moving away from a barbell approach. This strategy has been beneficial in the current steepening yield curve environment [36] - The company expects the investment environment for Agency RMBS to remain attractive, with production coupon spreads at historically wide levels [45] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the economy despite challenges such as tariffs and high mortgage rates. They anticipate continued strong economic performance driven by government deficits and spending [26][99] - The company expects refinancing activity to remain low due to high mortgage rates and affordability issues, which could make higher coupon assets attractive [24][70] Other Important Information - The company raised $140 million in new equity during the quarter, which was deployed into higher coupon specified pools [45] - The funding environment remains stable, with ample liquidity and no issues in adding repo counterparties [47] Q&A Session Summary Question: Increase in shares and capital raising strategy - Management confirmed an increase in shares due to a capital raise and indicated that future capital raising would depend on stock price and market conditions [54][56] Question: Premium risk in high coupon pools - Management acknowledged the premium risk but noted that the prepayment experience on lower pay-up pools has been favorable, suggesting a cautious but optimistic approach [57][59] Question: Updated book value - Management provided an estimate of a 3-cent decline in book value quarter-to-date, indicating ongoing market fluctuations [65] Question: Outlook for prepayment speeds - Management expects prepayment speeds to remain muted in the third quarter, with seasonal factors influencing the outlook [68][70] Question: MBS spreads and interest rate expectations - Management discussed the potential for MBS spreads to widen or tighten based on economic conditions and emphasized the resilience of the mortgage market despite challenges [91][96]

Financial Performance - The company reported a net loss of $0.29 per share for Q2 2025, compared to a net income of $0.18 per share in Q1 2025 [11] - Book value decreased from $7.94 in Q1 2025 to $7.21 in Q2 2025 [11] - Average MBS balances increased from $5,996 million in Q1 2025 to $6,866 million in Q2 2025 [15] - Economic leverage ratio remained constant at 7.8 in both Q1 and Q2 2025 [15] - Liquidity increased from 52.2% in Q1 2025 to 54.0% in Q2 2025 [15] Portfolio & Hedging - The company increased its allocation to 30yr 5.5%, 6.0%, and 6.5% coupons by $555 million, $145 million, and $86 million, respectively, while decreasing allocation to 30yr 4.0% and 5.0% by $334 million and $137 million, respectively [47] - Total notional balance of hedge positions was $(4,881.8) million [59] - Interest rate swaps had a notional balance of $(3,843.3) million with a weighted average pay fix rate of 3.30% [59] - The company's hedge positions covered 58% of its repo funding liability [59]

Core Insights - Orchid Island Capital, Inc. reported a net loss of $33.6 million for the second quarter of 2025, compared to a net loss of $5.0 million in the same period of 2024, indicating significant financial challenges [6][7][8] - The company experienced a turbulent market environment influenced by reciprocal tariffs and the passage of the One Big Beautiful Bill Act, which shifted market focus from trade to domestic issues [4][5] - Despite the overall market recovery, the Agency RMBS sector did not fully recover, leading to negative excess returns for the quarter [5][6] Financial Performance - The interest income on the portfolio increased by approximately $11.2 million from the first quarter of 2025 [6] - The yield on average Agency RMBS decreased slightly from 5.41% in Q1 2025 to 5.38% in Q2 2025 [6] - The company declared and paid dividends of $0.36 per common share during the second quarter [7] Balance Sheet and Capital Allocation - As of June 30, 2025, the book value per common share was $7.21, down from a decrease of $0.73 per share during the quarter [7][25] - The company maintained a strong liquidity position with $492.5 million in cash and cash equivalents, representing approximately 54% of stockholders' equity [7][13] - The total mortgage assets increased to $6.993 billion as of June 30, 2025, compared to $5.253 billion at the end of 2024 [10][47] Portfolio Characteristics - The company allocated approximately 98.1% of its investable capital to the PT RMBS portfolio as of June 30, 2025 [26] - The return on invested capital for the PT RMBS portfolio was approximately (4.1)%, while the structured RMBS portfolio generated a return of 3.5% [32][33] Market Conditions and Strategy - The company faced challenges in the Agency RMBS market, which continued to experience volatility and did not recover fully from the turmoil earlier in the quarter [5][6] - The management believes that the company is well-positioned to capture attractive returns in the current market environment [5]

Core Viewpoint - Both Orchid Island Capital (ORC) and Starwood Property Trust (STWD) are mortgage REITs with different investment strategies, where ORC focuses on agency residential mortgage-backed securities and STWD has a diversified portfolio including commercial real estate lending [1][2] Summary of ORC - ORC exclusively invests in Agency residential mortgage-backed securities (RMBS), which limits credit risks but increases sensitivity to interest rate movements [3] - The recent decline in mortgage rates is expected to improve ORC's book value as spreads in the Agency market tighten, enhancing net interest spread and overall yield [4] - ORC has a strong dividend yield of 20.4% and has increased its dividend three times in the past five years, with $446.5 million in cash and no debt as of March 31, 2025, indicating sustainable capital distribution [5] Summary of STWD - STWD's investment strategy includes commercial mortgage-backed securities (CMBS) and related commercial real estate assets, with a diversified portfolio valued at $1.02 billion as of March 31, 2025 [6] - The company has engaged in acquisitions and divestitures to optimize its portfolio, including the sale of 16 retail properties for $387.1 million, recognizing a gain of $92 million [7] - STWD has a concerning liquidity position with $692 million in cash and long-term debt of $18.4 billion, which may pose risks in a worsening macroeconomic environment [8] Performance and Valuation - In the past three months, STWD shares rose by 6.9% while ORC shares increased by 9.3%, outperforming the industry growth of 6.2% [11] - ORC is trading at a 12-month forward P/E of 0.79X, lower than its five-year median of 0.90X, while STWD is at 1.03X, lower than its five-year median of 1.04X [14] - The Zacks Consensus Estimate for ORC's earnings indicates significant growth of 450% in 2025 and 39.7% in 2026, while STWD's earnings are expected to decline by 8.9% in 2025 [18][20] Investment Outlook - ORC is viewed as a more resilient and better-valued option due to its focus on Agency RMBS in a declining rate environment, strong liquidity, and high dividend yield [22] - In contrast, STWD's heavy debt burden and weaker earnings outlook raise concerns, making ORC the more compelling opportunity for investors seeking stable income with lower risk [23]

Core Viewpoint - Orchid Island Capital, Inc. (ORC) is expected to report second-quarter 2025 earnings on July 24, with a consensus estimate of $0.15, indicating a 266.7% year-over-year increase in earnings [1][8]. Group 1: Earnings Performance - ORC has a history of earnings surprises, outperforming the Zacks Consensus Estimate in two of the last four quarters, with an average earnings surprise of 101.39% [2]. - The consensus estimate for ORC's earnings has remained unchanged at 15 cents over the past week [2]. Group 2: Market Conditions Impacting Performance - Despite Federal Reserve interest rate cuts in 2024, mortgage rates have not significantly decreased, remaining in the mid-to-upper 6% range, which has led to growth in refinancing activities and origination volumes [3]. - A significant portion of ORC's mortgage-backed securities (MBS) holdings is expected to have experienced higher constant prepayment rates, positively impacting net premium amortization and supporting growth in interest income and average asset yield [4][8]. Group 3: Financial Metrics - The primary-secondary spread averaged 1.06% in Q2 2025, slightly down from 1.12% in Q1 2025, indicating increased market volatility [4]. - ORC is likely to have seen a decline in its book value per share due to stable primary-secondary spreads and increased mortgage rate volatility [5][8]. Group 4: Earnings Prediction Model - The current model does not predict an earnings beat for ORC, as it has an Earnings ESP of 0.00% and a Zacks Rank of 3 (Hold) [6][7].

Core Insights - Orchid Island Capital, Inc. (ORC) estimates a net loss of 29 cents per share for Q2 2025, primarily due to losses on residential mortgage-backed securities (RMBS) and derivative instruments [1][9] - The estimated book value per share is $7.21, reflecting a 15.9% year-over-year decline, with a negative total return on equity of 4.7% as of June 30, 2025 [2][9] Financial Performance - As of June 30, 2025, Orchid's RMBS portfolio value is estimated at $6.9 million, indicating a challenging quarter due to net realized and unrealized losses [3][9] - Over the past three months, ORC shares have increased by 18.6%, outperforming the industry growth of 14% [7] Competitive Landscape - AGNC Investment focuses on leveraged investments in Agency RMBS, with a portfolio value of $70.5 billion as of March 31, 2025, and a tangible net book value of $8.25 per share [5] - Annaly Capital Management primarily invests in Agency mortgage-backed securities, holding $75 billion in Agency MBS as of March 31, 2025, with a book value per share of $19.02 [6] Valuation Metrics - Orchid trades at a forward price-to-tangible (P/TB) ratio of 1.03X, which is above the industry average of 1X [10] - The Zacks Consensus Estimate for ORC's earnings in 2025 and 2026 suggests significant year-over-year increases of 394.4% and 24.5%, respectively [13]

Main Announcements & Financial Highlights This section outlines Orchid Island Capital's recent dividend declaration and preliminary financial results for the second quarter of 2025 [Dividend Announcement](index=1&type=section&id=Dividend%20Announcement) Orchid Island Capital declared a $0.12 per share monthly cash dividend for July 2025, affirming its commitment to regular distributions to maintain REIT status by distributing at least 90% of taxable income annually July 2025 Dividend Details | Metric | Detail | | :--- | :--- | | Dividend per Share | $0.12 | | Record Date | July 31, 2025 | | Ex-Dividend Date | July 31, 2025 | | Payment Date | August 28, 2025 | - To qualify as a REIT, the Company must annually distribute at least **90%** of its REIT taxable income to stockholders[3](index=3&type=chunk) - The next common stock dividend announcement is planned for **August 13, 2025**[2](index=2&type=chunk) [Estimated Second Quarter 2025 Financial Results](index=1&type=section&id=Estimated%20Second%20Quarter%202025%20Financial%20Results) The company reported preliminary unaudited Q2 2025 results, including an estimated book value of **$7.21** per share, a GAAP net loss of **$(0.29)** per share, and a negative total return on equity of **(4.7)%**, all subject to auditor review Q2 2025 Estimated Financial Highlights (as of June 30, 2025) | Metric | Value | | :--- | :--- | | Book Value per Share | $7.21 | | GAAP Net Loss per Share | $(0.29) | | Total Return on Equity | (4.7)% | | Total Stockholders' Equity | ~$912.0 million | - The total return of **$(0.37) per share** for the quarter was comprised of **$0.36** in dividends per share and a decrease in book value of **$(0.73)** per share from March 31, 2025[7](index=7&type=chunk) - The estimated net loss includes approximately **$0.45 per share** of net realized and unrealized losses on Residential Mortgage-Backed Securities (RMBS) and derivative instruments[6](index=6&type=chunk) Common Stock Outstanding Trend | Date | Shares Outstanding | | :--- | :--- | | June 30, 2025 | 126,566,926 | | March 31, 2025 | 107,786,614 | RMBS Portfolio Characteristics (as of June 30, 2025) This section details the company's Residential Mortgage-Backed Securities (RMBS) portfolio composition, risk management, and counterparty exposures as of June 30, 2025 [Portfolio Composition and Risk Profile](index=3&type=section&id=Portfolio%20Composition%20and%20Risk%20Profile) As of June 30, 2025, the company's **$7.0 billion** mortgage asset portfolio is predominantly traditional pass-through RMBS, with a **$(4.88) billion** hedging strategy in place to manage interest rate risk Mortgage Asset Composition (Fair Value) | Asset Type | Fair Value ($) | % of Portfolio | | :--- | :--- | :--- | | Pass-Through RMBS | 6,978,561,000 | 99.79% | | Structured RMBS | 14,798,000 | 0.21% | | **Total Mortgage Assets** | **$6,993,359,000** | **100.00%** | - The largest holdings within the fixed-rate RMBS portfolio are securities with **6.0%** and **6.5%** coupons, which together constitute over **52%** of the total portfolio fair value[12](index=12&type=chunk) Hedging Instruments (Notional Balance) | Hedge Type | Notional Balance ($) | | :--- | :--- | | Swaps | (3,843,300,000) | | Treasury Futures | (913,500,000) | | SOFR & ERIS Futures | (125,000,000) | | **Total Hedges** | **$(4,881,800,000)** | - After accounting for hedges, the portfolio's modeled sensitivity to a **+50 basis point** interest rate shock is a net loss of **$(1.5) million**, while a **-50 basis point** shock results in a net loss of **$(22.2) million**[12](index=12&type=chunk) [Portfolio Allocation and Counterparty Exposure](index=4&type=section&id=Portfolio%20Allocation%20and%20Counterparty%20Exposure) The company's RMBS portfolio consists entirely of Agency securities, primarily Fannie Mae and Freddie Mac, with **$6.66 billion** in diversified borrowings across 24 counterparties, the largest being Wells Fargo Bank at **5.8%** RMBS Assets by Agency | Agency | Fair Value ($ thousands) | % of Portfolio | | :--- | :--- | :--- | | Fannie Mae | 4,421,357 | 63.2% | | Freddie Mac | 2,572,002 | 36.8% | | **Total** | **$6,993,359** | **100.0%** | - Under the Investment Company Act of 1940 test, **95.9%** of the company's mortgage assets are classified as 'Whole Pool Assets'[15](index=15&type=chunk) Top 5 Borrowing Counterparties | Counterparty | Borrowings ($ thousands) | % of Total | | :--- | :--- | :--- | | Wells Fargo Bank, N.A. | 385,253 | 5.8% | | RBC Capital Markets, LLC | 382,428 | 5.7% | | J.P. Morgan Securities LLC | 348,072 | 5.2% | | Mirae Asset Securities (USA) Inc. | 338,514 | 5.1% | | ASL Capital Markets Inc. | 329,804 | 5.0% | | **Total Borrowings** | **$6,655,879** | **100.0%** |

Core Points - Orchid Island Capital, Inc. declared a monthly cash dividend of $0.12 per share for July 2025, payable on August 28, 2025, to shareholders of record as of July 31, 2025 [1] - The company aims to make regular monthly cash distributions to its common stockholders to comply with REIT regulations, which require at least 90% of taxable income to be distributed annually [2] - As of July 9, 2025, the company had 126,715,437 shares of common stock outstanding, an increase from 126,566,926 shares as of June 30, 2025 [3] - The estimated book value per share as of June 30, 2025, was $7.21, with total stockholders' equity approximately $912.0 million [4] - The company reported an estimated net loss per share of $0.29 for the quarter ended June 30, 2025, which includes $0.45 per share of net realized and unrealized losses on RMBS and derivative instruments [5] - The estimated total return on equity for the quarter ended June 30, 2025, was (4.7)%, calculated as the sum of dividends declared and changes in book value [6] - The company invests in Agency RMBS, focusing on traditional pass-through Agency RMBS and structured Agency RMBS [7] Financial Highlights - The total dividends declared during the quarter were $0.36 per share, indicating a net loss exceeding the dividends paid [5] - The estimated total return on equity was $(0.37) per share, consisting of $0.36 in dividends and a decrease in book value of $(0.73) [6] - The company's RMBS portfolio as of June 30, 2025, included significant investments in Fannie Mae and Freddie Mac securities, with a total mortgage asset value of approximately $6.99 billion [13] Borrowings and Risk Management - The company had total borrowings of $6.66 billion as of June 30, 2025, with a weighted average interest rate of 4.47% [15] - The company is exposed to interest rate risks, with various hedging instruments in place to manage these risks [12][16]