Vero Beach, FL – October 15, 2025 – Orchid Island Capital, Inc. (NYSE: ORC), a prominent mortgage real estate investment trust (mREIT), today announced a monthly cash dividend of $0.12 per common share for October 2025. This declaration signifies a continued commitment to its income-focused distribution strategy, offering an attractive yield to shareholders in a financial landscape increasingly shaped by anticipated Federal Reserve interest rate adjustments and broader economic shifts.

The consistent $0.12 per share payout, which translates to a forward dividend yield nearing an impressive 19.83% based on recent stock prices, positions Orchid Island Capital as a compelling option for income-seeking investors. The dividend is scheduled to be paid on November 26, 2025, to shareholders of record as of October 31, 2025, with the ex-dividend date also set for October 31, 2025. This routine announcement comes alongside the release of estimated preliminary third-quarter 2025 financial results, providing a snapshot of the company's performance and operational resilience.

Detailed Coverage: ORC's Dividend in Focus

Orchid Island Capital's Board of Directors formally declared the October 2025 dividend, maintaining a payout consistent with previous months. This decision underscores the company's operational stability and its adherence to its mandate as an mREIT, which requires distributing a significant portion of its taxable income to shareholders to maintain favorable tax status.

Timeline of Events:

• October 15, 2025: Orchid Island Capital officially announced the October 2025 monthly cash dividend, coupled with the release of estimated preliminary third-quarter 2025 results.
• October 31, 2025: This marks both the record date and the ex-dividend date for the October dividend.
• November 12, 2025: The company plans to announce its next common stock dividend.
• November 26, 2025: The payment date for the October 2025 dividend.

Key Players and Financial Context: The primary entities involved include Orchid Island Capital, Inc. (NYSE: ORC) itself, its Board of Directors, and its common stockholders. Financial analysts and investors are closely scrutinizing this announcement, particularly given the mREIT sector's sensitivity to interest rate fluctuations.

Alongside the dividend, ORC provided estimated preliminary financial metrics for the third quarter ended September 30, 2025. These estimates, subject to auditor review, include an estimated GAAP net income of $0.53 per share, which incorporates approximately $0.37 per share of net realized and unrealized gains on Residential Mortgage-Backed Securities (RMBS) and derivative instruments. The company also reported an estimated book value per share of $7.33 as of September 30, 2025, and an estimated total return on equity of 6.6% for the third quarter.

Initial market reaction to ORC's dividend announcement has been largely neutral, with analysts noting the $0.12 per share dividend is "in line with previous" and aligns with the routine distribution cadence for mortgage REITs. However, the high forward dividend yield prompts closer scrutiny into the sustainability and underlying financial health of the trust, particularly given its operational model of investing in Agency RMBS and generating income from interest rate spreads.

This announcement unfolds against a backdrop of dynamic broader financial market conditions. As of October 15, 2025, the banking sector is showing signs of resurgence, with major players like Bank of America (NYSE: BAC) reporting strong Q3 2025 earnings. Simultaneously, the Federal Reserve is reportedly concerned with protecting the labor market, leading to expectations of further interest rate reductions at the October and December Federal Open Market Committee (FOMC) meetings. However, persistent inflation and ongoing US-China tariff tensions continue to pose risks, creating a mixed and watchful environment for the REIT sector.

Impact on Companies: Winners and Losers

Orchid Island Capital's (NYSE: ORC) declaration of a stable monthly dividend for October 2025, set against a backdrop of anticipated Federal Reserve rate cuts, has distinct implications for the company, its competitors, and the broader financial sector.

Orchid Island Capital (NYSE: ORC): Potential Winner The consistent $0.12 dividend is likely to bolster investor confidence in ORC's ability to generate steady income, potentially attracting more income-focused investors. The expected rate cuts are generally favorable for mREITs, as lower short-term interest rates reduce ORC's borrowing costs, thereby improving its net interest margin. While rising rates typically depress fixed-rate mortgage security values, a falling or stable rate environment can stabilize or positively impact ORC's RMBS portfolio, especially with effective hedging strategies in place. The company's management of prepayment risk through its portfolio composition and hedging strategies will be crucial.

Direct Competitors and Other mREITs: Potential Winners and Losers The mREIT sector is highly sensitive to interest rate fluctuations. The expected rate cuts suggest a more favorable environment, but individual performance will vary based on specific strategies and risk management.

• Potential Winners: Agency mREITs with robust hedging strategies, similar to ORC, are likely to benefit from easing interest rates. Companies like AGNC Investment Corp. (NASDAQ: AGNC), Annaly Capital Management (NYSE: NLY), and Two Harbors Investment Corp. (NYSE: TWO), which are significant players in the Agency MBS space, could see improved profitability and potentially maintain or increase their dividends. Well-diversified mREITs such as Ellington Financial Inc. (NYSE: EFC), which invests in a broad array of financial assets, may also be well-positioned.
• Potential Losers: mREITs that have not effectively hedged against interest rate changes or have mismatched asset-liability durations could face challenges. Similarly, those with significant exposure to non-Agency or commercial mortgages without strong credit quality might struggle. If ORC's dividend is perceived as strong and sustainable, mREITs unable to match competitive payouts might experience reduced investor interest.

Companies in Related Financial Sectors:

• Mortgage Originators/Lenders: Anticipated rate cuts are expected to reduce mortgage rates, stimulating demand for new mortgages and refinancing activity. This would directly benefit originators and lenders like PennyMac Mortgage Investment Trust (NYSE: PMT).
• Banks (Traditional Lenders): While lower rates can compress net interest margins, a "risk-on" environment and increased economic activity could indirectly benefit banks by stimulating lending and growth.
• Fixed-Income Investors/Bond Market: Declining bond yields could make high-dividend mREITs more attractive to income-seeking investors compared to traditional fixed-income products.

Wider Significance: Industry Trends and Ripple Effects

Orchid Island Capital's (NYSE: ORC) consistent dividend for October 2025 carries broader significance for the mREIT sector and the financial markets, especially as of October 15, 2025, with evolving interest rate policies.

Broader Industry Trends for mREITs: The mREIT industry is entering a more positive phase, partly due to expected Federal Reserve rate cuts. Mortgage rates have already seen declines, with further decreases anticipated, which generally reduces mREIT financing costs and can stabilize or increase MBS asset values. However, challenges persist, particularly for commercial mREITs still grappling with problem loans. ORC's dividend aligns with the mREIT sector's role in providing strong income streams, underpinned by its estimated Q3 2025 financial performance.

Potential Ripple Effects:

• Competitive Pressure: A robust dividend from ORC can pressure other mREITs to demonstrate similar financial stability and shareholder returns, potentially leading to a divergence in investor sentiment.
• Investor Confidence: ORC's stable dividend can reinforce confidence in the mREIT sector, potentially increasing investment in mREIT-focused funds.
• Influence on Partners: ORC's financial health signals a stable counterparty for mortgage originators and servicers, influencing future collaborations, especially as some mREITs consider acquiring such entities.

Regulatory or Policy Implications: mREITs must distribute at least 90% of their taxable income to maintain favorable tax status. ORC's regular dividend underscores its adherence to these critical IRS rules. The regulatory environment for REITs is becoming more complex, with increasing demands for compliance across financial, regulatory, and operational standards. Legislative changes, such as the "One Big Beautiful Bill Act," which expands the ability for REITs to hold Taxable REIT Subsidiary (TRS) securities starting in 2026, could offer new opportunities for diversification.

Historical Precedents: Historically, dividend actions by REITs have significant market impact. While dividend cuts often trigger sharp sell-offs, consistent or increased dividends, like ORC's, project an image of stability. Companies like Realty Income Corporation (NYSE: O), known for its long history of consecutive monthly dividends, exemplify how consistent payouts can foster investor loyalty and set industry benchmarks. ORC's continued monthly dividend, though with a shorter history, demonstrates a similar commitment to regular distributions, which is particularly noteworthy given the interest rate pressures many REITs have faced in 2025.

What Comes Next: Navigating the Future

The October 2025 dividend declaration positions Orchid Island Capital (NYSE: ORC) and the broader mREIT sector for a dynamic period, driven by anticipated interest rate shifts and evolving market conditions.

Short-Term Possibilities for ORC (Late 2025 - Early 2026):

• Sustained Dividend Attractiveness: The high forward yield will likely continue to attract income-focused investors.
• Book Value and Earnings Volatility: ORC's performance remains sensitive to interest rate fluctuations and MBS spread volatility.
• Leverage Management: Effective management of financing costs will be crucial for maintaining profitability.

Long-Term Possibilities for ORC (2026 and Beyond):

• Benefit from Lower Rates: Anticipated rate cuts are expected to reduce funding costs and potentially lift asset prices, enhancing ORC's profitability and dividend capacity.
• Prepayment Risk Management: As mortgage rates decline, increased prepayments will require robust management through portfolio composition and hedging strategies.
• Portfolio Adaptation: ORC's focus on Agency RMBS may evolve to optimize returns in changing market conditions.

The mREIT Sector: Outlook and Strategic Adaptations: The mREIT sector is poised for a more favorable environment. The Federal Reserve's target interest rate range is expected to decline, with market expectations of further cuts in late 2025 and into 2026. This downward trend is a significant tailwind for mREITs, reducing borrowing costs and potentially appreciating MBS portfolios.

Short-Term Opportunities (Late 2025 - Early 2026): Improved profitability, increased mortgage origination and refinancing, and dividend stability are anticipated. Long-Term Opportunities (2026 and Beyond): Sustained favorable environment with stable lower rates, portfolio rebalancing, and increased investment activity.

Strategic Pivots and Adaptations: mREITs must maintain robust hedging strategies, dynamically manage portfolio composition, efficiently deploy capital, and potentially diversify income streams through vertical integration or strategic partnerships.

Market Opportunities and Challenges: Opportunities include tightening MBS spreads and attractive mREIT preferred shares. Challenges encompass prepayment risk, interest rate volatility, basis risk, regulatory changes, and potential economic slowdowns.

Potential Scenarios:

1. Base Case (Gradual Rate Cuts & Stable Economy): Sustained improvement in net interest margins and book values for ORC and mREITs, with stable or modest dividend increases.
2. Optimistic Case (More Aggressive Rate Cuts & Soft Landing): Significant boost to profitability and book values, strong capital appreciation, and robust dividend growth, though with amplified prepayment risk.
3. Pessimistic Case (Stagflation or Unexpected Rate Hikes): Renewed pressure on net interest margins and book values, increased funding costs, and potential dividend cuts across the sector.

Comprehensive Wrap-up: Assessing the Market Forward

Orchid Island Capital's (NYSE: ORC) October 2025 monthly dividend declaration of $0.12 per share underscores its commitment to shareholder distributions, a cornerstone of the mREIT business model. This consistency, coupled with an attractive forward yield, positions ORC as a noteworthy player for income-focused investors in a market undergoing significant transitions.

Key Takeaways: The stable $0.12 dividend reflects ORC's short-term payout strategy and its high yield is a primary draw. Preliminary Q3 2025 results indicate positive GAAP net income driven by gains on RMBS and derivatives. However, the sustainability of such gains and the company's historical challenges with profitability and leverage warrant careful consideration.

Market Assessment Moving Forward: The mREIT sector's future is intrinsically linked to the Federal Reserve's monetary policy. While anticipated rate cuts in late 2025 and into 2026 offer a potentially more favorable environment, the actual trajectory of interest rates, inflation, and broader economic conditions will dictate profitability. ORC's focus on Agency RMBS and its hedging strategies are critical in navigating this complex landscape.

Significance and Lasting Impact: ORC's sustained dividend reinforces its role in providing income streams and adhering to mREIT tax requirements. For long-term investors, the significance lies in balancing the attractive yield against inherent risks such as interest rate sensitivity, potential book value erosion, and historical dividend adjustments. The ability to maintain a stable book value and effectively manage its portfolio in dynamic rate environments will define ORC's lasting impact.

What Investors Should Watch For: In the coming months, investors should closely monitor:

1. Federal Reserve Monetary Policy and Interest Rates: Any shifts in rate policy or the yield curve.
2. Book Value Per Share: Critical for assessing an mREIT's financial health.
3. Dividend Coverage and Payout Ratio: Scrutinize the company's ability to cover its distributions from core earnings, excluding one-time gains.
4. Performance of RMBS and Derivatives Portfolio: The source of significant gains in Q3 2025.
5. Broader mREIT Sector Trends: To contextualize ORC's performance.
6. Liquidity and Leverage: With interest rates still elevated, balance sheet strength, liquidity, and conservative leverage are key differentiators for REITs.

By diligently tracking these factors, investors can better gauge the risks and opportunities associated with Orchid Island Capital and the broader mREIT sector in late 2025 and early 2026.

This content is intended for informational purposes only and is not financial advice