Orchid Island Capital, Inc. is a mortgage-focused real estate investment trust, or mREIT, rather than a conventional property-owning REIT. The company was incorporated in Maryland in 2010, commenced operations later that year, and completed its initial public offering in February 2013. It is headquartered in Vero Beach, Florida, and its ...Orchid Island Capital, Inc. is a mortgage-focused real estate investment trust, or mREIT, rather than a conventional property-owning REIT. The company was incorporated in Maryland in 2010, commenced operations later that year, and completed its initial public offering in February 2013. It is headquartered in Vero Beach, Florida, and its common stock trades on the New York Stock Exchange under the ticker ORC. Robert E. Cauley serves as chairman and chief executive officer; he is associated with the company’s founding and has extensive experience in the agency mortgage-backed securities market.
The company’s core business is investing in residential mortgage-backed securities backed by single-family residential mortgages. Its portfolio can include traditional pass-through Agency RMBS, mortgage pass-through certificates, collateralized mortgage obligations, and structured Agency RMBS such as interest-only, inverse interest-only, and principal-only securities. Agency securities are generally issued or guaranteed by U.S. government-sponsored enterprises or federal agencies, which can reduce credit risk relative to non-Agency mortgage assets, although they remain exposed to interest-rate, prepayment, liquidity, market-value, and financing risks.
Orchid’s business model is based primarily on leverage. It finances mortgage assets through repurchase agreements and other secured funding arrangements, then seeks to earn income from the difference between the portfolio yield and its borrowing and hedging costs. Consequently, profitability can be highly sensitive to changes in short-term interest rates, the shape of the yield curve, mortgage prepayment speeds, collateral values, and the effectiveness of interest-rate hedges. Unlike an industrial manufacturer, Orchid does not have a conventional bill of materials, physical production process, inventory, or significant capital-expenditure program. Its principal economic inputs are mortgage securities, financing capacity, risk-management instruments, liquidity, and specialized investment-management expertise.
The company has elected to be taxed as a real estate investment trust for U.S. federal income-tax purposes. Subject to meeting applicable REIT requirements, it generally can avoid corporate-level tax on the portion of taxable income distributed to shareholders, with REIT rules generally requiring distributions of at least 90% of taxable income. This structure supports a dividend-oriented investment profile, but distributions can vary and are not guaranteed.
The supplied trailing-period data shows approximately $1.14 billion in market capitalization, a reported dividend of $1.36 per share, a price-to-book ratio of about 0.92, debt-to-equity of approximately 8.0, and a dividend yield near 20.7%. These figures should be interpreted carefully because mREIT accounting and earnings are materially affected by fair-value changes, leverage, hedging, and non-cash items. The reported full-time employee count is zero, indicating that the company relies substantially on external management and service providers rather than maintaining a large direct workforce. Key priorities for the business include preserving liquidity, managing leverage and interest-rate exposure, protecting book value, maintaining access to financing, and generating sustainable shareholder distributions.
Operator: Good day, and thank you for standing by. Welcome to the Orchid Island Capital Second Quarter 26 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a Q&A session. To ask a question during the session, you will need to press *11 on your telephone. You will then hear automated message that your hand is raised. To withdraw your question, please press *11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Melissa Alfonso, investor relations. Please go ahead.
Melissa Alfonso: Good morning, and welcome to the Second Quarter 26 Earnings Conference Call Orchid Island Capital. This call is being recorded today, 07/24/2026. At this time, the company would like to remind the listeners that statements made during today's conference call relating to matters that are not historical facts are forward looking statements subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 2 thousand. Listeners are cautioned that such forward looking statements are based on information currently available on the management's good faith, belief with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in such forward looking statements. Important factors that could cause such differences are described in the company's filings with the Securities and Exchange Commission, including the company's most recent annual report on Form 10 The company assumes no obligation to update such forward looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward looking statements. Now I would like to turn the conference over to the company's Chairman and Chief Executive Officer, Mr. Robert E. Cauley.
Operator: Please go ahead, sir.
Robert E. Cauley: Thank you, Melissa. Melissa, and good morning. I hope everybody's had a chance to download our deck as usual. We will be focused on the deck for the call. Just to begin on slide 3, we just have our table of contents. So the first thing first order of business will be our controller, Jerry Sintes, to go over our financial results. Then I will go over the market developments that occurred during the quarter. These are what shaped our decision making and our results. And then we will go through the portfolio characteristics, hedge positions, and then also our positioning going forward in our outlook on the market. So with that, I will turn it over to Jerry.
Jerry Sintes: Thank you, Bob. If we turn to Page 5, we will start with the financial highlights for the quarter. During Q2, we earned $0.44 per share That compares to a loss of $0.11 during Q1. Book value at the end of the quarter was $7.22 compared to $7.08 at the start of the quarter. Total return during the quarter was 6.2%, compared to …
