Orchid Island Capital posted a net loss of $0.90 per share.
Book value per share declined to $6.02 at quarter end.
Management repurchased 6.62 million shares since the second quarter ended.
On its third quarter of 2026 earnings call, held on Oct. 23, 2026, Orchid Island Capital (NYSE:ORC) announced a net loss of $0.90 per share. The company operates as a real estate investment trust (REIT), a business that invests in residential mortgage securities using borrowed capital to generate interest income. Shifts in borrowing costs and asset valuations directly drive shareholder returns over time. Three things management said stand out.
Spreading interest rate volatility created temporary price drops across residential mortgage-backed securities, which are pools of home loans packaged for investors. Management sees higher prospective yields making new investments compelling despite recent market fluctuations.
So I think the asset class does look attractive. We'll talk more about that later in the call. We have had some tightening this week, but they still look attractive, and returns in the market are still quite attractive.
-- Robert Cauley, Chairman and Chief Executive Officer
Trading at a substantial discount to book value (the net asset value per share) creates an opportunity to retire stock cheaply. Management views buying back shares below book value as an efficient return of capital.
We're at such an extreme discount now. As Hunter mentioned, we're comfortably below 80% of book. So it's a pretty attractive return.
-- Robert Cauley, Chairman and Chief Executive Officer
Maintaining net interest margin, the difference between income earned on assets and interest paid on borrowings, remains essential for dividend safety. Portfolio yields continue aligning with taxable income to cover payouts without straining capital.
I think the earnings level of the portfolio is pretty much in line with the dividend. As Hunter mentioned, tax-wise, it's right on top of it.
-- Robert Cauley, Chairman and Chief Executive Officer
Rate pressures are stabilizing after a rocky third quarter, allowing management to keep portfolio size steady. The business uses interest rate hedging (derivative contracts that shield against rising borrowing costs) to protect capital while monitoring leverage.
So our intention now is to retain the portfolio at this size. And as I said, we'll probably reinvest paydowns, may actually add some. So we're comfortable.
-- Robert Cauley, Chairman and Chief Executive Officer
Navigating deep stock discounts remains key as management balances share repurchases with purchases of higher-yielding assets.
So we manage as best we can given the price of the stock relative to book and try to generate the returns that we do and see how we stack up.
-- Robert Cauley, Chairman and Chief Executive Officer
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