Orchid Island Capital reported a GAAP net loss of $178.9 million for the third quarter of 2026, primarily driven by $231.7 million in net realized and unrealized losses on its RMBS and derivative portfolio. Book value per share declined to $6.02, matching the company's preliminary guidance, as mortgage REITs faced extreme interest rate volatility and spread widening during the period.
Key Highlights
- Book value per share fell 16.6% to $6.02 at September 30, 2026, resulting in a total economic return of (12.47)% for the quarter.
- Net interest income of $59.1 million ($0.30 per share) exceeded the analyst estimate of $0.27, supported by an average RMBS yield increase to 5.91%.
- Economic leverage ratio increased to 8.6 to 1, while management raised hedge coverage to nearly 100% of funding levels to mitigate rising rates.
- The company repurchased 4.95 million shares in the third quarter and an additional 1.67 million shares in October to date at a significant discount to book value.
- Constant prepayment rates (CPR) slowed to 8.4% from 10.9% in the prior quarter, which helped preserve interest income potential.