Orchid Island Capital (ORC) Q3 2026 Earnings
Includes $231.7 million in net realized and unrealized losses on RMBS and derivative instruments, including net interest income on interest rate swaps
How Did ORC Stock React to Q3 2026 Earnings?
Did ORC Beat Earnings? Q3 2026 Results
No. Orchid Island Capital reported Q3 2026 earnings of $-0.90 a share on Oct 22, 2026, missing the $0.29 consensus estimate by 413.0%. Revenue was $59.1M against a $59.7M estimate.
Orchid Island Capital delivered a steep miss in Q3 2026, posting a GAAP loss of $0.90 per share against a consensus estimate of $0.29, a shortfall of 413.04%, as $231.72 million in net realized and unrealized losses on RMBS and derivative instruments overwhelmed otherwise improving interest income. Revenue of $59.13 million came in just 0.90% below the $59.67 million consensus but fell 23.7% from a year ago, reflecting the sharp contraction in the company's earning asset base amid surging U.S. Treasury yields. The losses drove book value per share down $1.20 during the quarter to $6.02, producing a total return of negative 12.47% after the $0.30 per share in dividends paid. Ahead of results, at least one ratings firm downgraded the stock to a deeper sell, with shares trading near $4.93 on the NYSE. Looking forward, management expressed comfort with current positioning, noting that nearly 100% hedge coverage and a portfolio now largely priced below par create discount accretion potential and earnings stability should market conditions stabilize.
- Significant increase in interest rates globally, with benchmark U.S. Treasury yields reaching levels last seen in early 2000s
- Net realized and unrealized losses of $231.7 million on RMBS and derivative instruments
- Average yield on RMBS increased to 5.91% from 5.74% in Q2 2026
- Average cost of funds rose to 3.92% from 3.80% in Q2 2026
- High coupon bias provided relative outperformance during the sell-off
- Average interest rate spread widened to 1.99% from 1.20% year-over-year
- Average economic interest rate spread of 2.48% vs 2.40% year-over-year
- 3-month CPR of 8.4%, down from 10.9% in Q2 2026
“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.”
Orchid Island Capital CEO, on the earnings call
What Is Orchid Island Capital's Outlook?
Management expressed comfort with current portfolio positioning assuming market stabilization. CEO noted that higher coupon, low premium specified pools should provide enhanced income potential in a slow prepay environment, with additional upside from discount accretion as the majority of the portfolio is now priced below par. Nearly 100% hedge coverage, while modestly increasing funding costs, supports earnings stability. The company intends to sustain its dividend and maximize book value recovery potential if spreads recover or rates decrease.
ORC YoY Financials
| Metric | Q3 2026 | Q3 2025 | Year over year |
|---|---|---|---|
| Revenue | $59.1M | $77.5M | −23.7% |
ORC Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.