Orchid Island Capital ORC Q3 2026 earnings

“The third quarter of 2026 presented very challenging market conditions as we witnessed a significant increase in interest rates across the globe. Benchmark U.S. treasury yields reached levels last seen in the early 2000s. The Agency RMBS market was particularly impacted and there was widespread deleveraging and forced selling, with implied interest rate volatility spiking higher as well. Going into the sell-off Orchid had hedge coverage at over 90% of our funding levels and a high coupon bias which proved beneficial as higher coupons generated better absolute returns – or less negative – during the period. To counteract the leverage ratio expansion as our book value declined, we opted to focus on our hedges by both increasing both the notional balances – to near 100% coverage – and duration of our hedges versus solely relying on asset sales. Secondly, we used a combination of modest asset sales – less than $400 million – and retaining our monthly pay-downs to limit the leverage expansion. We took advantage of the depressed stock price to repurchase approximately 6.6 million shares to date since the end of the second quarter and did so strategically when the stock price was trading at a significant discount to our book value. Throughout the quarter we were able to maintain ample liquidity.