What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-04-25 compared with 2024-10-25 · 379 added, 466 removed, 1116 unchanged (43% of the section changed)

3 unchanged sentences

($ in thousands, except per share data)

September 30,

Mortgage-backed securities, at fair value (includes pledged assets of $ 6,692,991 and $ 5,209,068 , respectively)

6 unchanged sentences

Restricted cash

11,612 28,396

Accrued interest receivable

10 unchanged sentences

Accrued interest payable

13,293 10,750

Due to affiliates

6 unchanged sentences

20,000,000 shares authorized;

no shares issued and outstanding as of September 30, 2024 and December 31, 2023

no shares issued and outstanding as of March 31, 2025 and December 31, 2024

Common Stock, $ 0.01 par value;

100,000,000 shares authorized, 78,082,645 shares issued and outstanding as of September 30, 2024 and 51,636,074 shares issued and outstanding as of December 31, 2023

200,000,000 shares authorized, 107,786,614 shares issued and outstanding as of March 31, 2025 and 82,622,464 shares issued and outstanding as of December 31, 2024

Additional paid-in capital

9 unchanged sentences

ORCHID ISLAND CAPITAL, INC.

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

For the Nine and Three Months Ended September 30, 2024 and 2023

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

For the Three Months Ended March 31, 2025 and 2024

($ in thousands, except per share data)

Nine Months Ended September 30,

Three Months Ended September 30,

Three Months Ended March 31,

Interest income

$ 81,090 $ 48,871

Interest expense

Net interest (expense) income

Realized gains (losses) on mortgage-backed securities

( 61,377 ) ( 51,361 )

Net interest income (expense)

19,713 ( 2,490 )

Realized losses on mortgage-backed securities

Unrealized gains (losses) on mortgage-backed securities and U.S.

Treasury securities

77,592 ( 61,895 )

(Losses) gains on derivative and other hedging instruments

Net portfolio income (loss)

( 74,659 ) 87,899

Net portfolio income

21,348 23,514

Management fees

1 unchanged sentence

Incentive compensation

( 207 ) ( 89 )

Directors' fees and liability insurance

3 unchanged sentences

Total expenses

Net income (loss)

Unrealized gains on U.S.

Treasury securities measured at fair value through other comprehensive net income (loss)

Comprehensive net income (loss)

Basic and diluted net income (loss) per share

$ 17,122 $ 19,776

Unrealized gains (losses) on U.S.

Treasury securities measured at fair value through other comprehensive net income

Comprehensive net income

$ 17,372 $ 19,729

Basic and diluted net income per share

$ 0.18 $ 0.38

Weighted Average Shares Outstanding

95,174,719 51,604,135

See Notes to Financial Statements

1 unchanged sentence

CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY

For the Nine Months Ended September 30, 2024 and 2023

For the Three Months Ended March 31, 2025 and 2024

(in thousands)

Comprehensive

Balances, June 30, 2024

64,824 $ 648 $ 920,913 $ ( 365,636 ) $ 7 $ 555,932

- - - 17,320 - 17,320

Unrealized gain on available-for-sale securities

- - - - 48 48

Cash dividends declared ($ 0.36 per share)

- - ( 26,887 ) - - ( 26,887 )

Stock based awards and amortization

8 - 232 - - 232

Issuance of common stock pursuant to public offerings, net

13,314 134 109,757 - - 109,891

Shares repurchased and retired

( 63 ) ( 1 ) ( 511 ) - - ( 512 )

Balances, September 30, 2024

78,083 $ 781 $ 1,003,504 $ ( 348,316 ) $ 55 $ 656,024

Balances, June 30, 2023

Balances, January 1, 2025

82,622 $ 826 $ 1,010,306 $ ( 342,771 ) $ 139 $ 668,500

8 unchanged sentences

25,142 252 205,172 - - 205,424

Shares repurchased and retired

Balances, September 30, 2023

Balances, March 31, 2025

107,787 $ 1,078 $ 1,180,062 $ ( 325,649 ) $ 389 $ 855,880

12 unchanged sentences

( 373 ) ( 3 ) ( 2,775 ) - - ( 2,778 )

Balances, September 30, 2024

78,083 $ 781 $ 1,003,504 $ ( 348,316 ) $ 55 $ 656,024

Balances, January 1, 2023

36,765 368 779,602 ( 341,207 ) - 438,763

- - - ( 66,353 ) - ( 66,353 )

Unrealized gain on available-for-sale securities

- - - - 16 16

Cash dividends declared ($ 1.44 per share)

- - ( 62,301 ) - - ( 62,301 )

Stock based awards and amortization

60 1 1,240 - - 1,241

Issuance of common stock pursuant to public offerings, net

15,880 157 159,281 - - 159,438

Shares repurchased and retired

( 373 ) ( 3 ) ( 3,960 ) - - ( 3,963 )

Balances, September 30, 2023

Balances, March 31, 2024

52,786 $ 528 $ 841,790 $ ( 360,657 ) $ ( 30 ) $ 481,631

2 unchanged sentences

CONDENSED STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2024 and 2023

For the Three Months Ended March 31, 2025 and 2024

($ in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

$ 17,122 $ 19,776

Adjustments to reconcile net income to net cash provided by operating activities:

Stock based compensation

Discount accretion on U.S.

Treasury Bills

Realized (gains) losses on mortgage-backed securities

( 243 ) ( 140 )

Net discount accretion on U.S.

Treasury securities

( 120 ) ( 1,221 )

Realized losses on mortgage-backed securities

Unrealized (gains) losses on mortgage-backed securities and U.S.

Treasury securities

( 77,592 ) 61,895

Realized and unrealized losses (gains) on derivative instruments

91,315 ( 39,176 )

Changes in operating assets and liabilities:

Accrued interest receivable

( 8,474 ) ( 663 )

( 469 ) ( 530 )

Accrued interest payable

2 unchanged sentences

NET CASH PROVIDED BY OPERATING ACTIVITIES

25,779 45,009

CASH FLOWS FROM INVESTING ACTIVITIES:

From mortgage-backed securities investments:

( 1,710,118 ) ( 345,032 )

Sales and maturities

168,634 221,733

Principal repayments

132,994 74,338

Purchases of U.S.

Treasury securities, available-for-sale

( 49,622 ) ( 98,643 )

Proceeds from maturity of U.S.

Treasury securities, available-for-sale

25,000 100,000

Net (payments on) proceeds from derivative instruments

( 93,402 ) 8,435

NET CASH USED IN INVESTING ACTIVITIES

( 1,526,514 ) ( 39,169 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from repurchase agreements

14,563,906 8,529,398

Principal payments on repurchase agreements

( 13,170,808 ) ( 8,523,549 )

Cash dividends

( 32,679 ) ( 18,564 )

Proceeds from issuance of common stock, net of issuance costs

205,424 13,109

Common stock repurchases, including shares withheld from employee stock awards for payment of taxes

NET CASH PROVIDED BY FINANCING ACTIVITIES

( 69 ) ( 2,903 )

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

1,565,774 ( 2,509 )

NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of the period

335,053 200,289

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of the period

$ 400,092 $ 203,620

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid during the period for:

$ 58,833 $ 46,531

See Notes to Financial Statements

1 unchanged sentence

NOTES TO CONDENSED FINANCIAL STATEMENTS

September 30, 2024

March 31, 2025

ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

5 unchanged sentences

From incorporation through November 24, 2010, Orchid’s only activity was the issuance of common stock to Bimini.

On October 29, 2021, Orchid entered into an equity distribution agreement (the “October 2021 Equity Distribution Agreement”) with four sales agents pursuant to which the Company could offer and sell, from time to time, up to an aggregate amount of $ 250,000,000 of shares of the Company’s common stock in transactions that were deemed to be “at the market” offerings and privately negotiated transactions.

The Company issued a total of 9,742,188 shares under the October 2021 Equity Distribution Agreement for aggregate gross proceeds of approximately $ 151.8 million, and net proceeds of approximately $ 149.3 million, after commissions and fees, prior to its termination in March 2023.

On March 7, 2023, Orchid entered into an equity distribution agreement (the “March 2023 Equity Distribution Agreement”) with three sales agents pursuant to which the Company could offer and sell, from time to time, up to an aggregate amount of $ 250,000,000 of shares of the Company’s common stock in transactions that were deemed to be “at the market” offerings and privately negotiated transactions.

The Company issued a total of 24,675,497 shares under the March 2023 Equity Distribution Agreement for aggregate gross proceeds of approximately $ 228.8 million and net proceeds of approximately $ 225.0 million, after commissions and fees, prior to its termination in June 2024.

On June 11, 2024, Orchid entered into an equity distribution agreement (the “June 2024 Equity Distribution Agreement”) with three sales agents pursuant to which the Company may offer and sell, from time to time, up to an aggregate amount of $ 250,000,000 of shares of the Company’s common stock in transactions that are deemed to be “at the market” offerings and privately negotiated transactions.

Through September 30, 2024 , t he Company issued a total of 15,309,022 shares under the June 2024 Equity Distribution Agreement for aggregate gross proceeds of approximately $ 128.6 million, and net proceeds of approximately $ 126.5 million, after commissions and fees.

Subsequent to September 30, 2024 , t he Company issued a total of 332,000 shares under the June 2024 Equity Distribution Agreement for aggregate gross proceeds of approximately $ 2.7 million , and net proceeds of approximately $ 2.7 million, after commissions and fees.

On June 11, 2024, Orchid entered into an equity distribution agreement (the “June 2024 Equity Distribution Agreement”) with three sales agents pursuant to which the Company could offer and sell, from time to time, up to an aggregate amount of $ 250,000,000 of shares of the Company’s common stock in transactions that were deemed to be “at the market” offerings and privately negotiated transactions.

The Company issued a total of 30,513,253 shares under the June 2024 Equity Distribution Agreement for aggregate gross proceeds of approximately $ 250.0 million and net proceeds of approximately $ 245.8 million, after commissions and fees, prior to its termination in February 2025.

On February 24, 2025, Orchid entered into an equity distribution agreement (the “February 2025 Equity Distribution Agreement”) with four sales agents pursuant to which the Company may offer and sell, from time to time, up to an aggregate amount of $ 350,000,000 of shares of the Company’s common stock in transactions that are deemed to be “at the market” offerings and privately negotiated transactions.

Through March 31, 2025 , t he Company issued a total of 14,470,882 shares under the February 2025 Equity Distribution Agreement for aggregate gross proceeds of approximately $ 123.7 million, and net proceeds of approximately $ 121.7 million, after commissions and fees .

Basis of Presentation and Use of Estimates

2 unchanged sentences

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of results for the interim period have been included.

Operating results for the nine and three month periods ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 .

Operating results for the three month period ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025 .

The balance sheet at December 31, 2024 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements.

3 unchanged sentences

The significant estimates affecting the accompanying financial statements are the fair values of RMBS and derivatives.

Management believes the estimates and assumptions underlying the financial statements are reasonable based on the information available as of September 30, 2024 .

Management believes the estimates and assumptions underlying the financial statements are reasonable based on the information available as of March 31, 2025 .

Variable Interest Entities ( “ VIEs ” )

9 unchanged sentences

(in thousands)

September 30, 2024

March 31, 2025

December 31, 2024

2 unchanged sentences

Restricted cash

11,612 28,396

Total cash, cash equivalents and restricted cash

3 unchanged sentences

The Company has not experienced any losses related to these balances.

The Federal Deposit Insurance Corporation insures eligible accounts up to $250,000 per depositor at each financial institution.

Restricted cash balances are uninsured, but are held in separate customer accounts that are segregated from the general funds of the counterparty.

9 unchanged sentences

Treasury securities"), primarily to satisfy collateral requirements of derivative counterparties.

The Company has elected to account for its investment in RMBS and U.S.

Treasury securities under the fair value option.

Electing the fair value option requires the Company to record changes in fair value in net income, which, in management’s view, more appropriately reflects the results of the Company’s operations for a particular reporting period and is consistent with the underlying economics and how the portfolio is managed.

The Company has elected to account for its investment in RMBS under the fair value option.

The Company recorded changes in fair value in net income.

The Company has designated its U.S.

Treasury securities purchased after August 2023 as available-for-sale, and changes in fair value during the period for reasons other than expected credit losses are recognized in other comprehensive income (loss).

The Company records securities transactions on the trade date.

5 unchanged sentences

Treasury securities are based on quoted prices for identical assets in active markets.

Income on PT RMBS and T-Notes is based on the stated interest rate of the security.

Income on PT RMBS is based on the stated interest rate of the security.

Premiums or discounts present at the date of purchase are not amortized.

Premium lost and discount accretion resulting from monthly principal repayments are reflected in unrealized gains (losses) on RMBS in the statements of comprehensive income (loss).

Premium lost and discount accretion resulting from monthly principal repayments are reflected in unrealized gains (losses) on RMBS in the statements of comprehensive income.

For IO securities, the income is accrued based on the carrying value and the effective yield.

2 unchanged sentences

For IIO securities, effective yield and income recognition calculations also take into account the index value applicable to the security.

Income on U.S.

Treasury securities is based on the stated interest rate (if any) of the security.

Premiums or discounts associated with the purchase are amortized or accreted income over the life of the investment and reported in the statements of comprehensive income as interest income.

Changes in fair value of investments for which the fair value option is elected are recorded in earnings and reported as unrealized gains or losses on mortgage-backed securities and U.S.

Treasury securities in the accompanying statements of comprehensive income (loss).

Realized gains and losses on sales of investments for which the fair value option has been elected, using the specific identification method, are reported as a separate component of net portfolio income on the statements of comprehensive income (loss).

Treasury Bills are zero -coupon bonds that are purchased at a discount to the par amount.

This discount is accreted into income over the life of the investment and reported in the statements of comprehensive income (loss) as interest income.

Treasury securities in the accompanying statements of comprehensive income.

Changes in fair value of U.S.

6 unchanged sentences

The Company uses derivative and other hedging instruments to manage interest rate risk, facilitate asset/liability strategies and manage other exposures, and it may continue to do so in the future.

The principal instruments that the Company has used to date are T-Note, Secured Overnight Financing Rate ("SOFR"), federal funds (“Fed Funds”) futures contracts, short positions in U.S.

The principal instruments that the Company has used to date are T-Note, Secured Overnight Financing Rate ("SOFR"), and federal funds (“Fed Funds”) futures contracts, short positions in U.S.

Treasury securities, interest rate swaps, options to enter in interest rate swaps (“interest rate swaptions”), dual digital options, interest rate caps and floors, and “to-be-announced” (“TBA”) securities transactions, but the Company may enter into other derivative and other hedging instruments in the future.

The Company accounts for TBA securities as derivative instruments.

Gains and losses associated with TBA securities transactions are reported in gain (loss) on derivative instruments in the accompanying statements of comprehensive income (loss).

Gains and losses associated with TBA securities transactions are reported in gain (loss) on derivative instruments in the accompanying statements of comprehensive income.

Derivative and other hedging instruments are carried at fair value, and changes in fair value are recorded in income as gains or losses on derivative and other hedging instruments for each period.

37 unchanged sentences

Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023 - 07 "Segment Reporting (Topic 820 ):

Improvements to Reportable Segment Disclosures .

ASU 2023 - 07 requires additional disclosures about reportable segments’ significant expenses on an interim and annual basis.

The guidance in ASU 2023 - 07 is effective in annual periods beginning after December 15, 2023 and subsequent interim periods.

The Company does not expect the provisions of ASU 2023 - 07 to have a significant impact on its future financial statements.

On December 31, 2024, we adopted ASU No.

2023 - 07, “ Segment Reporting (Topic 280 ):

Improvements to Reportable Segment Disclosures ” in our Annual Report on Form 10 -K.

The ASU is applicable to our interim periods beginning in 2025, The amendments in the ASU require disclosures to include significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the CODM when deciding how to allocate resources.

The adoption did not have a material impact on our financial statements.

In November 2024, the FASB issued ASU No.

2024 - 03, "Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220 - 40 ):

Disaggregation of Income Statement Expenses ".

The amendments in the ASU require disclosures about specific types of expenses included in the expense captions presented on the Consolidated Statements of Income, as well as disclosures about selling expenses.

ASU 2024 - 03 is effective for fiscal years beginning after December 15, 2026, with early adoption allowed.

We are currently evaluating the impact of adoption on our financial disclosures.

MORTGAGE-BACKED SECURITIES, AT FAIR VALUE

The following table presents the Company’s RMBS portfolio that are remeasured at fair value through earnings as of September 30, 2024 and December 31, 2023 :

The following table presents the Company’s RMBS portfolio that are remeasured at fair value through earnings as of March 31, 2025 and December 31, 2024 :

(in thousands)

September 30, 2024

March 31, 2025

December 31, 2024

13 unchanged sentences

The cost information in the table above represents the aggregate current par value, multiplied by the purchase price of each security in the portfolio.

The notional balance for the interest-only securities portfolio was $ 88.8 million and $ 98.6 million as of September 30, 2024 and December 31, 2023, respectively.

The notional balance for the inverse interest-only securities portfolio was $ 23.4 million and $ 26.8 million as of September 30, 2024 and December 31, 2023, respectively.

The following table is a summary of the Company’s net gain (loss) from the sale of RMBS for the nine months ended September 30, 2024 and 2023.

The notional balance for the interest-only securities portfolio was $ 83.4 million and $ 85.8 million as of March 31, 2025 and December 31, 2024 , respectively.

The notional balance for the inverse interest-only securities portfolio was $ 21.3 million and $ 22.0 million as of March 31, 2025 and December 31, 2024 , respectively.

The following table is a summary of the Company’s net gain (loss) from the sale of RMBS for the three months ended March 31, 2025 and 2024 .

(in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Proceeds from sales of RMBS (1)

2 unchanged sentences

( 169,932 ) ( 221,733 )

Net gain on sales of RMBS

Net (loss) gain on sales of RMBS

$ ( 1,298 ) $ -

Gross gain on sales of RMBS

Gross loss on sales of RMBS

Net gain on sales of RMBS

During the nine months ended September 30, 2024 , the Company resecuritized RMBS with a fair value of $ 221.7 million by transferring the RMBS into a larger RMBS that is backed by the transferred RMBS.

Net (loss) gain on sales of RMBS

$ ( 1,298 ) $ -

During the three months ended March 31, 2024, the Company resecuritized RMBS with a fair value of $ 221.7 million by transferring the RMBS into a larger RMBS that is backed by the transferred RMBS.

The Company retained the entire larger RMBS.

1 unchanged sentence

TREASURY SECURITIES, AVAILABLE-FOR-SALE

As of September 30, 2024 and December 31, 2023 , the Company held U.S.

Treasury securities with a fair value of approximately $ 99.5 million and $ 148.8 million, respectively, that were classified as available-for-sale.

The following table presents the amortized cost, gross unrealized holding gains and losses, and fair value of available-for-sale investments as of March 31, 2025 and December 31, 2024 .

Treasury securities are held primarily to satisfy collateral requirements of the Company's repurchase and derivative counterparties.

The amortized cost, gross unrealized holding gains and losses, and fair value of available-for-sale investments as of September 30, 2024 and December 31, 2023 are as follows:

The amortized cost, gross unrealized holding gains and losses, and fair value of available-for-sale investments as of March 31, 2025 and December 31, 2024 are as follows:

(in thousands)

September 30, 2024

Treasury Bill maturing 10/24/2024

March 31, 2025

Treasury Note, 4.625%, 6/30/2026 Maturity

$ 100,343 $ 389 $ - $ 100,732

3 unchanged sentences

December 31, 2024

Treasury Bill maturing 1/2/2024

$ 49,671 $ 9 $ - $ 49,680

Treasury Bill maturing 2/15/2024

49,992 8 - 50,000

Treasury Bill maturing 4/30/2024

Treasury Note, 4.625%, 6/30/2026 Maturity

$ 100,412 $ 139 $ - $ 100,551

6 unchanged sentences

If the fair value of the pledged securities declines, lenders will typically require the Company to post additional collateral or pay down borrowings to re-establish agreed upon collateral requirements, referred to as "margin calls." Similarly, if the fair value of the pledged securities increases, lenders may release collateral back to the Company.

As of September 30, 2024 , the Company had met all margin call requirements.

As of September 30, 2024 and December 31, 2023 , the Company’s repurchase agreements had remaining maturities as summarized below:

As of March 31, 2025 , the Company had met all margin call requirements.

As of March 31, 2025 and December 31, 2024 , the Company’s repurchase agreements had remaining maturities as summarized below:

($ in thousands)

September 30, 2024

Fair market value of securities pledged, including accrued interest receivable

March 31, 2025

Fair value of securities pledged, including accrued interest receivable

$ - $ 3,212,736 $ 3,376,939 $ 133,479 $ 6,723,154

4 unchanged sentences

December 31, 2024

Fair market value of securities pledged, including accrued interest receivable

Fair value of securities pledged, including accrued interest receivable

$ - $ 4,850,491 $ 199,993 $ 181,437 $ 5,231,921

3 unchanged sentences

- 4.66 % 4.56 % 4.76 % 4.66 %

In addition, cash pledged to counterparties for repurchase agreements was approximately $ 9.2 million as of September 30, 2024 .

There was no cash pledged to counterparties for repurchase agreements as of December 31, 2023.

In addition, cash pledged to counterparties for repurchase agreements was approximately $ 2.8 million and $ 22.8 million as of March 31, 2025 and December 31, 2024 , respectively.

If, during the term of a repurchase agreement, a lender files for bankruptcy, the Company might experience difficulty recovering its pledged assets, which could result in an unsecured claim against the lender for the difference between the amount loaned to the Company plus interest due to the counterparty and the fair value of the collateral pledged to such lender, including the accrued interest receivable and cash posted by the Company as collateral.

At September 30, 2024 , the Company had an aggregate amount at risk (the difference between the amount loaned to the Company, including interest payable and securities posted by the counterparty (if any), and the fair value of securities and cash pledged (if any), including accrued interest on such securities) with all counterparties of approximately $ 221.0 million.

The Company did not have an amount at risk with any individual counterparty that was greater than 10% of the Company’s equity at September 30, 2024 or December 31, 2023 .

At March 31, 2025 , the Company had an aggregate amount at risk (the difference between the amount loaned to the Company, including interest payable and securities posted by the counterparty (if any), and the fair value of securities and cash pledged (if any), including accrued interest on such securities) with all counterparties of approximately $ 290.8 million.

The Company did not have an amount at risk with any individual counterparty that was greater than 10% of the Company’s equity at March 31, 2025 or December 31, 2024 .

DERIVATIVE AND OTHER HEDGING INSTRUMENTS

The table below summarizes fair value information about the Company’s derivative and other hedging instruments assets and liabilities as of September 30, 2024 and December 31, 2023 .

The table below summarizes fair value information about the Company’s derivative and other hedging instruments assets and liabilities as of March 31, 2025 and December 31, 2024 .

(in thousands)

1 unchanged sentence

Balance Sheet Location

September 30, 2024

March 31, 2025

December 31, 2024

2 unchanged sentences

$ 6,267 $ 4,574

Payer swaption (long position)

Derivative assets, at fair value

TBA securities

13 unchanged sentences

Other liabilities

Interest rate swaption contracts

Restricted cash

( 1,403 ) ( 4,282 )

Total margin balances on derivative contracts

$ ( 512 ) $ ( 1,377 )

Fed Funds, T-Note and SOFR futures are cash and securities settled futures contracts on their respective underlying or delivery eligible underlying U.S.

T-Note and SOFR futures are cash and securities settled futures contracts on their respective underlying or delivery eligible underlying U.S.

Treasury security, with gains and losses credited or charged to the Company’s cash accounts on a daily basis.

A minimum balance, or “margin”, is required to be maintained in the account on a daily basis.

The tables below present information related to the Company’s T-Note and SOFR futures positions at September 30, 2024 and December 31, 2023 .

The tables below present information related to the Company’s T-Note and SOFR futures positions at March 31, 2025 and December 31, 2024 .

($ in thousands)

September 30, 2024

March 31, 2025

Expiration Year

T-Note Futures Contracts (Short Positions)(2)

December 2024 10-year T-Note futures (Dec 2024 - Dec 2034 Hedge Period)

$ 12,500 3.73 % 3.62 % $ ( 88 )

SOFR Futures Contracts (Short Positions)

December 2024 3-Month SOFR futures (Sep 2024 - Dec 2024 Hedge Period)

Treasury Note Futures Contracts (Short Positions)(2)

June 2025 5-year T-Note futures (Jun 2025 - Jun 2030 Hedge Period)

$ 377,500 4.16 % 3.94 % $ ( 3,371 )

March 2025 3-Month SOFR futures (Dec 2024 - Mar 2025 Hedge Period)

June 2025 10-year T-Note futures (Jun 2025 - Jun 2035 Hedge Period)

193,500 4.23 % 4.09 % ( 1,692 )

June 2025 3-Month SOFR futures (Mar 2025 - Jun 2025 Hedge Period)

June 2025 10-year Ultra futures (Jun 2025 - Jun 2035 Hedge Period)

137,500 4.37 % 4.24 % ( 1,611 )

SOFR Futures Contracts (Short Positions)

September 2025 3-Month SOFR futures (Jun 2025 - Sep 2025 Hedge Period)

12 unchanged sentences

28,750 3.56 % 3.44 % ( 35 )

June 2027 3-Month SOFR futures (Mar 2027 - Jun 2027 Hedge Period)

28,750 3.56 % 3.46 % ( 30 )

($ in thousands)

1 unchanged sentence

Expiration Year

T-Note Futures Contracts (Short Positions)(2)

Treasury Note Futures Contracts (Short Positions)(2)

March 2025 5-year T-Note futures (Mar 2025 - Mar 2030 Hedge Period)

2 unchanged sentences

93,500 4.30 % 4.49 % 1,119

SOFR Futures Contracts (Short Positions)

June 2024 3-Month SOFR futures (Mar 2024 - Jun 2024 Hedge Period)

$ 25,000 5.08 % 4.99 % $ ( 24 )

September 2024 3-Month SOFR futures (Jun 2024 - Sep 2024 Hedge Period)

25,000 4.67 % 4.52 % ( 39 )

December 2024 3-Month SOFR futures (Sep 2024 - Dec 2024 Hedge Period)

25,000 4.27 % 4.10 % ( 44 )

March 2025 3-Month SOFR futures (Dec 2024 - Mar 2025 Hedge Period)

25,000 3.90 % 3.73 % ( 43 )

June 2025 3-Month SOFR futures (Mar 2025 - Jun 2025 Hedge Period)

25,000 3.58 % 3.42 % ( 41 )

September 2025 3-Month SOFR futures (Jun 2025 - Sep 2025 Hedge Period)

25,000 3.37 % 3.21 % ( 39 )

December 2025 3-Month SOFR futures (Sep 2025 - Dec 2025 Hedge Period)

25,000 3.25 % 3.10 % ( 37 )

March 2026 3-Month SOFR futures (Dec 2025 - Mar 2026 Hedge Period)

March 2025 10-year Ultra futures (Mar 2025 - Mar 2035 Hedge Period)

32,500 4.25 % 4.58 % 914

Open equity represents the cumulative gains (losses) recorded on open futures positions from inception.

10 -Year T-Note futures contracts were valued at a price of $ 114.28 at September 30, 2024 and $ 112.89 at December 31, 2023 .

The contract values of the short positions were $ 14.3 million and $ 361.2 million at September 30, 2024 and December 31, 2023 , respectively.

5 -Year T-Note futures contracts were valued at a price of $ 108.77 at December 31, 2023 .

The contract value of the short position was $ 458.5 million at December 31, 2023 .

5 -Year T-Note futures contracts were valued at a price of $ 108.16 at March 31, 2025 and $ 106.30 at December 31, 2024 .

The contract values of the short positions were $ 408.3 million and $ 332.2 million at March 31, 2025 and December 31, 2024 , respectively.

10 -Year T-Note futures contracts were valued at a price of $ 111.22 at March 31, 2025 and $ 108.75 at December 31, 2024 .

The contract values of the short positions were $ 215.2 million and $ 101.6 million at March 31, 2025 and December 31, 2024 , respectively.

10 -Year Ultra futures contracts were valued at a price of $ 114.13 at March 31, 2025 and $ 111.31 at December 31, 2024 .

The contract values of the short positions were $ 156.9 million and $ 36.2 million at March 31, 2025 and December 31, 2024 , respectively.

Under its interest rate swap agreements, the Company typically pays a fixed rate and receives a floating rate ("payer swaps") based on an index, such as SOFR.

1 unchanged sentence

The Company is typically required to post margin on its interest rate swap agreements.

The table below presents information related to the Company’s interest rate swap positions at September 30, 2024 and December 31, 2023 .

The table below presents information related to the Company’s interest rate swap positions at March 31, 2025 and December 31, 2024 .

($ in thousands)

September 30, 2024

March 31, 2025

Expiration > 1 to ≤ 5 years

13 unchanged sentences

We also exchange daily settlements of "variation margin" based upon changes in fair value, as measured by the exchanges.

The table below presents information related to the Company’s payer swaption position at December 31, 2023 .

($ in thousands)

Underlying Swap

December 31, 2023

Payer Swaption (long position)

$ 1,619 $ 72 5.0 $ 800,000 5.40 % SOFR

We purchase interest rate swaptions to help mitigate the potential impact of larger, more rapid changes in interest rates on the performance of our investment portfolio.

Interest rate swaptions provide us the option to enter into an interest rate swap agreement for a predetermined notional amount, stated term and pay and receive interest rates in the future.

Our interest rate swaption agreements are not subject to central clearing.

The difference between the premium paid and the fair value of the swaption is reported in gain (loss) on derivative and other hedging instruments in our statements of comprehensive income (loss).

If a swaption expires unexercised, the realized loss on the swaption would be equal to the premium paid.

If we sell or exercise a swaption, the realized gain or loss on the swaption would be equal to the difference between the cash or the fair value of the underlying interest rate swap and the premium paid.

The following table summarizes the Company’s contracts to purchase and sell TBA securities as of September 30, 2024 and December 31, 2023 .

The following table summarizes the Company’s contracts to purchase and sell TBA securities as of March 31, 2025 and December 31, 2024 .

($ in thousands)

September 30, 2024

March 31, 2025

15-Year TBA securities:

4 unchanged sentences

5.0% $ 50,000 $ 50,074 $ 49,742 $ ( 332 )

5.0% ( 250,000 ) ( 242,725 ) ( 247,657 ) ( 4,932 )

30-Year TBA securities:

3.0% ( 200,000 ) ( 174,406 ) ( 169,703 ) 4,703

5 unchanged sentences

Gain (Loss) From Derivative and Other Hedging Instruments, Net

The table below presents the effect of the Company’s derivative and other hedging instruments on the statements of comprehensive income (loss) for the nine and three months ended September 30, 2024 and 2023 .

The table below presents the effect of the Company’s derivative and other hedging instruments on the statements of comprehensive income for the three months ended March 31, 2025 and 2024 .

(in thousands)

Nine Months Ended September 30,

Three Months Ended September 30,

Three Months Ended March 31,

Interest rate futures contracts (short position)

2 unchanged sentences

( 62,843 ) 59,098

Payer swaptions (short positions)

- 4,113 - ( 718 )

Payer swaptions (long positions)

( 72 ) ( 7,389 ) - 1,613

Interest rate caps

- ( 415 ) - 493

Dual digital option

( 500 ) - ( 105 ) -

Interest rate floors (short positions)

- ( 1,143 ) - 73

Interest rate floors (long positions)

- 2,666 - 137

TBA securities (short positions)

( 3,370 ) 31,120 ( 16,315 ) 21,511

TBA securities (long positions)

$ ( 74,659 ) $ 87,899

$ ( 26,858 ) $ 194,253 $ ( 140,825 ) $ 142,042

Credit Risk-Related Contingent Features

9 unchanged sentences

Assets Pledged to Counterparties

The table below summarizes the Company’s assets pledged as collateral under repurchase agreements and derivative agreements by type, including securities pledged related to securities sold but not yet settled, as of September 30, 2024 and December 31, 2023 .

(in thousands)

September 30, 2024

March 31, 2025

December 31, 2024

12 unchanged sentences

Assets Pledged from Counterparties

The table below summarizes assets pledged to the Company from counterparties under repurchase agreements and derivative agreements as of September 30, 2024 and December 31, 2023 .

The table below summarizes assets pledged to the Company from counterparties under repurchase agreements and derivative agreements as of March 31, 2025 and December 31, 2024 .

(in thousands)

September 30, 2024

March 31, 2025

December 31, 2024

10 unchanged sentences

As a result, derivative assets and liabilities associated with centrally cleared derivatives for which the CME or LCH serves as the central clearing party are presented as if these derivatives had been settled as of the reporting date.

The following table presents information regarding those assets and liabilities subject to such arrangements as if the Company had presented them on a net basis as of September 30, 2024 and December 31, 2023 .

The following table presents information regarding those assets and liabilities subject to such arrangements as if the Company had presented them on a net basis as of March 31, 2025 and December 31, 2024 .

(in thousands)

4 unchanged sentences

Offset in the

September 30, 2024

March 31, 2025

Interest rate swaps

15 unchanged sentences

as Collateral

September 30, 2024

March 31, 2025

Repurchase Agreements

12 unchanged sentences

Common Stock Issuances

During the nine months ended September 30, 2024 and the year ended December 31, 2023 , the Company completed the following public offerings of shares of its common stock.

During the three months ended March 31, 2025 and the year ended December 31, 2024 , the Company completed the following public offerings of shares of its common stock.

($ in thousands, except per share amounts)

4 unchanged sentences

$ 8.17 25,142,046 $ 205,424

At the Market Offering Program(3)

Second Quarter

25,142,046 $ 205,424

At the Market Offering Program (3)

Third Quarter

8.25 13,314,022 109,891

26,794,480 $ 223,698

At the Market Offering Program (3)

First Quarter

9 unchanged sentences

7.86 4,533,067 35,630

31,327,547 $ 259,328

Weighted average price received per share is after deducting the underwriters’ discount, if applicable, and other offering costs.

Net proceeds are net of the underwriters’ discount, if applicable, and other offering costs.

The Company has entered into eleven equity distribution agreements, ten of which have either been terminated because all shares were sold or were replaced with a subsequent agreement.

The Company has entered into 13 equity distribution agreements, 12 of which have either been terminated because all shares were sold or were replaced with a subsequent agreement.

Stock Repurchase Program

9 unchanged sentences

The stock repurchase program has no termination date.

From the inception of the stock repurchase program through September 30, 2024 , the Company repurchased a total of 5,144,602 shares at an aggregate cost of approximately $ 77.5 million , including commissions and fees, for a weighted average price of $ 15.07 per share.

During the nine months ended September 30, 2024 , the Company repurchased a total of 396,241 shares at an aggregate cost of approximately $ 3.3 million , including commissions and fees, for a weighted average price of $ 8.30 per share.

From the inception of the stock repurchase program through March 31, 2025 , the Company repurchased a total of 5,144,602 shares at an aggregate cost of approximately $ 77.5 million , including commissions and fees, for a weighted average price of $ 15.07 per share.

The Company did not repurchase any shares during the three months ended March 31, 2025 .

During the year ended December 31, 2024 , the Company repurchased a total of 396,241 shares at an aggregate cost of approximately $ 3.3 million, including commissions and fees, for a weighted average price of $ 8.30 per share.

The remaining authorization under the stock repurchase program as of October 24, 2024 was 3,832,361 shares.

Subsequent to March 31, 2025 , the Company repurchased a total of 1,113,224 shares at an aggregate cost of approximately $ 7.3 million, including commissions and fees, for a weighted average price of $ 6.52 per share.

The remaining authorization under the stock repurchase program as of April 25, 2025 was 2,719,137 shares.

Cash Dividends

6 unchanged sentences

$ 68.370 $ 753,469

On October 16, 2024 , the Company declared a dividend of $ 0.12 per share to be paid on November 27, 2024 .

The effect of this dividend is included in the table above but is not reflected in the Company’s financial statements as of September 30, 2024 .

On April 9, 2025 , the Company declared a dividend of $ 0.12 per share to be paid on May 29, 2025 .

The effect of this dividend is included in the table above but is not reflected in the Company’s financial statements as of March 31, 2025 .

STOCK INCENTIVE PLAN

13 unchanged sentences

PUs are subject to forfeiture should the participant no longer serve as an executive officer or employee of the Company or the Manager.

Compensation expense for the PUs, included in incentive compensation on the statements of comprehensive income (loss), is recognized over the remaining vesting period once it becomes probable that the performance conditions will be achieved.

The following table presents information related to PUs outstanding during the nine months ended September 30, 2024 and 2023 .

Compensation expense for the PUs, included in incentive compensation on the statements of comprehensive income, is recognized over the remaining vesting period once it becomes probable that the performance conditions will be achieved.

The following table presents information related to PUs outstanding during the three months ended March 31, 2025 and 2024 .

($ in thousands, except per share data)

Nine Months Ended September 30,

Three Months Ended March 31,

Unvested, beginning of period

1 unchanged sentence

18,137 8.27 36,773 8.62

Forfeited (1)

- - ( 14,365 ) 12.48

Vested and issued

10 unchanged sentences

The Company has issued, and may in the future issue additional, immediately vested common stock under the Incentive Plans to certain executive officers and employees of its Manager.

The following table presents information related to fully vested common stock issued during the nine months ended September 30, 2024 and 2023 .

All of the fully vested shares of common stock issued during the nine months ended September 30, 2024 and 2023 , and the related compensation expense, were granted with respect to service performed during the fiscal years ended December 31, 2023 and 2022, respectively.

The following table presents information related to fully vested common stock issued during the three months ended March 31, 2025 and 2024 .

All of the fully vested shares of common stock issued during the three months ended March 31, 2025 and 2024 , and the related compensation expense, were granted with respect to service performed during the fiscal years ended December 31, 2024 and 2023 , respectively.

($ in thousands, except per share data)

Nine Months Ended September 30,

Three Months Ended March 31,

Fully vested shares granted

3 unchanged sentences

Compensation expense related to fully vested shares of common stock awards (1)

The awards issued during the years ended December 31, 2025 and 2024 were granted with respect to service performed in 2024 and 2023, respectively.

Compensation expense accrued related to the share awards was $ 0.2 million for both three month periods ended March 31, 2025 and 2024.

Deferred Stock Units

1 unchanged sentence

Each DSU represents a right to receive one share of the Company’s common stock.

Beginning in 2022, each non-employee director could elect to receive all of his or her compensation in the form of DSUs.

Each non-employee director may elect to receive all of his or her compensation in the form of DSUs.

The DSUs are immediately vested and are settled at a future date based on the election of the individual participant.

Compensation expense for the DSUs is included in directors’ fees and liability insurance in the statements of comprehensive income (loss).

Compensation expense for the DSUs is included in directors’ fees and liability insurance in the statements of comprehensive income.

The DSUs contain dividend equivalent rights, which entitle the participant to receive distributions declared by the Company on common stock.

1 unchanged sentence

The DSUs do not include the right to vote the underlying shares of common stock.

The following table presents information related to the DSUs outstanding during the nine months ended September 30, 2024 and 2023 .

The following table presents information related to the DSUs outstanding during the three months ended March 31, 2025 and 2024 .

($ in thousands, except per share data)

Nine Months Ended September 30,

Three Months Ended March 31,

Outstanding, beginning of period

9 unchanged sentences

From time to time, the Company may become involved in various claims and legal actions arising in the ordinary course of business.

Management is not aware of any reported or unreported contingencies at September 30, 2024 .

Management is not aware of any reported or unreported contingencies at March 31, 2025 .

The Company will generally not be subject to U.S.

4 unchanged sentences

EARNINGS PER SHARE (EPS)

The Company had dividend eligible PUs and DSUs that were outstanding during the nine and three months ended September 30, 2024 and 2023 .

The Company had dividend eligible PUs and DSUs that were outstanding during the three months ended March 31, 2025 and 2024 .

The basic and diluted per share computations include these unvested PUs and DSUs if there is income available to common stock, as they have dividend participation rights.

1 unchanged sentence

Because there is no such obligation, the unvested PUs and DSUs are not included in the basic and diluted EPS computations when no income is available to common stock even though they are considered participating securities.

The table below reconciles the numerator and denominator of EPS for the nine and three months ended September 30, 2024 and 2023 .

The table below reconciles the numerator and denominator of EPS for the three months ended March 31, 2025 and 2024 .

(in thousands, except per share information)

Nine Months Ended September 30,

Three Months Ended September 30,

Three Months Ended March 31,

Basic and diluted EPS per common share:

Numerator for basic and diluted EPS per share of common stock:

Net income (loss) - Basic and diluted

Net income - Basic and diluted

$ 17,122 $ 19,776

Weighted average shares of common stock:

Shares of common stock outstanding at the balance sheet date

107,787 52,826

Unvested dividend eligible share based compensation outstanding at the balance sheet date

Effect of weighting

( 12,870 ) ( 1,440 )

Weighted average shares-basic and diluted

Net income (loss) per common share:

95,175 51,604

Net income per common share:

Basic and diluted

$ 0.18 $ 0.38

Anti-dilutive incentive shares not included in calculation

26 unchanged sentences

The fair value of interest rate swaptions and dual digital options are determined using an option pricing model.

RMBS (based on the fair value option), U.S.

Treasury securities, derivatives and TBA securities were recorded at fair value on a recurring basis during the nine and three months ended September 30, 2024 and 2023 .

Treasury securities, derivatives and TBA securities were recorded at fair value on a recurring basis during the three months ended March 31, 2025 and 2024 .

When determining fair value measurements, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset.

1 unchanged sentence

When identical assets are not traded in active markets, the Company looks to market observable data for similar assets.

The estimated fair value of cash and cash equivalents, restricted cash, accrued interest receivable, receivable for securities sold, other assets, due to affiliates, repurchase agreements, payable for unsettled securities purchased, accrued interest payable and other liabilities generally approximates their carrying values due to the short-term nature of these financial instruments as of September 30, 2024 and December 31, 2023 .

The Company estimates the fair value of the cash and cash equivalents using Level 1 inputs, and the accrued interest receivable, receivable for securities sold, other assets, due to affiliates, repurchase agreements, payable for unsettled securities purchased, accrued interest payable and other liabilities using Level 2 inputs.

The following table presents financial assets (liabilities) measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023 .

The following table presents financial assets (liabilities) measured at fair value on a recurring basis as of March 31, 2025 and December 31, 2024 .

Derivative contracts are reported as a net position by contract type, and not based on master netting arrangements.

1 unchanged sentence

Quoted Prices

September 30, 2024

March 31, 2025

Mortgage-backed securities

$ - $ 6,738,094 $ -

Treasury securities

3 unchanged sentences

Mortgage-backed securities

$ - $ 5,253,310 $ -

Treasury securities

Interest rate swaps

Interest rate swaptions

TBA securities

During the nine and three months ended September 30, 2024 and 2023 , there were no transfers of financial assets or liabilities between levels 1, 2 or 3.

During the three months ended March 31, 2025 and 2024 , there were no transfers of financial assets or liabilities between levels 1, 2 or 3.

RELATED PARTY TRANSACTIONS

14 unchanged sentences

Should the Company terminate the management agreement without cause, it will pay the Manager a termination fee equal to three times the average annual management fee, as defined in the management agreement, before or on the last day of the term of the agreement.

Total expenses recorded for the management fee, allocated overhead and repurchase agreement trading, clearing and administrative services were approximately $ 9.4 million and $ 3.3 million for the nine and three months ended September 30, 2024 , respectively, and $ 10.5 million and $ 3.6 million for the nine and three months ended September 30, 2023 , respectively.

At September 30, 2024 and December 31, 2023 , the net amount due to affiliates was approximately $ 1.2 million and $ 1.0 million, respectively.

Total expenses recorded for the management fee, allocated overhead and repurchase agreement trading, clearing and administrative services were approximately $ 3.6 million and $ 2.9 million for the three months ended March 31, 2025 and 2024, respectively.

At March 31, 2025 and December 31, 2024 , the net amount due to affiliates was approximately $ 1.3 million and $ 1.2 million, respectively.

Other Relationships with Bimini

1 unchanged sentence

Haas, IV, the Company’s Chief Financial Officer, Chief Investment Officer, Secretary and a member of the Board of Directors, also serves as the Chief Financial Officer, Chief Investment Officer and Treasurer of Bimini and owns shares of common stock of Bimini.

In addition, as of September 30, 2024 , Bimini owned 569,071 shares, or 0.7 %, of the Company’s common stock.

In addition, as of March 31, 2025 , Bimini owned 569,071 shares, or 0.5 %, of the Company’s common stock.

SEGMENT INFORMATION

The Company follows ASC 280, Segment Reporting , which establishes standards for the way public business enterprises report information about operating segments in annual financial statements and requires that those enterprises report selected information about operating segments in financial statements issued to shareholders.

The Company’s Chief Operating Decision Maker ("CODM"), its CEO, assesses performance and allocates resources based on company-wide financial information.

The Company derives nearly all of its income from interest on its RMBS portfolio.

Consequently, the Company has determined that it operates in a single reportable segment and the strategic purpose of all operating activities is to support that one segment.

The CODM evaluates company-wide performance based on multiple performance measures, including, but not limited to net income and net interest income.

The CODM does not generally evaluate our performance using asset or historical cash flow information.

Since the Company operates in one operating segment, all required financial segment information can be found in the financial statements.

Significant expenses within net income that are used to evaluate performance are each separately presented in the statements of comprehensive income.

The Company does not distinguish between markets or segments for the purpose of internal reporting.

The Company's segment assets are presented in the Company's Balance Sheets under total assets.

MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

22 unchanged sentences

Capital Raising Activities

On October 29, 2021, we entered into an equity distribution agreement (the “October 2021 Equity Distribution Agreement”) with four sales agents pursuant to which we could offer and sell, from time to time, up to an aggregate amount of $250,000,000 of shares of our common stock in transactions that were deemed to be “at the market” offerings and privately negotiated transactions.

We issued a total of 9,742,188 shares under the October 2021 Equity Distribution Agreement for aggregate gross proceeds of approximately $151.8 million, and net proceeds of approximately $149.3 million, after commissions and fees, prior to its termination in March 2023.

On March 7, 2023, we entered into an equity distribution agreement (the “March 2023 Equity Distribution Agreement”) with three sales agents pursuant to which we could offer and sell, from time to time, up to an aggregate amount of $250,000,000 of shares of our common stock in transactions that were deemed to be “at the market” offerings and privately negotiated transactions.

We issued a total of 24,675,497 shares under the March 2023 Equity Distribution Agreement for aggregate gross proceeds of approximately $228.8 million and net proceeds of approximately $225.0 million, after commissions and fees, prior to its termination in June 2024.

On June 11, 2024, we entered into an equity distribution agreement (the “June 2024 Equity Distribution Agreement”) with three sales agents pursuant to which we may offer and sell, from time to time, up to an aggregate amount of $250,000,000 of shares of our common stock in transactions that are deemed to be “at the market” offerings and privately negotiated transactions.

Through September 30, 2024, we issued a total of 15,309,022 shares under the June 2024 Equity Distribution Agreement for aggregate gross proceeds of approximately $128.6 million, and net proceeds of approximately $126.5 million, after commissions and fees.

Subsequent to September 30, 2024, we issued a total of 332,000 shares under the June 2024 Equity Distribution Agreement for aggregate gross proceeds of approximately $2.7 million, and net proceeds of approximately $2.7 million, after commissions and fees.

On June 11, 2024, we entered into an equity distribution agreement (the “June 2024 Equity Distribution Agreement”) with three sales agents pursuant to which we could offer and sell, from time to time, up to an aggregate amount of $250,000,000 of shares of our common stock in transactions that were deemed to be “at the market” offerings and privately negotiated transactions.

We issued a total of 30,513,253 shares under the June 2024 Equity Distribution Agreement for aggregate gross proceeds of approximately $250.0 million and net proceeds of approximately $245.8 million, after commissions and fees, prior to its termination in February 2025.

On February 24, 2025, we entered into an equity distribution agreement (the “February 2025 Equity Distribution Agreement”) with four sales agents pursuant to which we may offer and sell, from time to time, up to an aggregate amount of $350,000,000 of shares of our common stock in transactions that are deemed to be “at the market” offerings and privately negotiated transactions.

Through March 31, 2025, we issued a total of 14,470,882 shares under the February 2025 Equity Distribution Agreement for aggregate gross proceeds of approximately $123.7 million, and net proceeds of approximately $121.7 million, after commissions and fees.

Stock Repurchase Agreement

7 unchanged sentences

This stock repurchase program has no termination date.

During the nine months ended September 30, 2024 , the Company repurchased a total of 396,241 shares of its common stock at an aggregate cost of approximately $ 3.3 million , including commissions and fees, for a weighted average price of $ 8.30 per share.

The Company did not repurchase any shares during the three months ended March 31, 2025 .

Subsequent to March 31, 2025, the Company repurchased a total of 1,113,224 shares at an aggregate cost of approximately $7.3 million, including commissions and fees, for a weighted average price of $6.52 per share.

The remaining authorization under the stock repurchase program as of April 25, 2025 was 2,719,137 shares.

Factors that Affect our Results of Operations and Financial Condition

2 unchanged sentences

interest rate trends;

changes in our cost of funds, including increases in the Fed Funds rate that are controlled by the Federal Reserve (the "Fed") that occurred in 2023, the decrease in the Fed Funds rate in 2024, or potential additional decreases in the Fed Funds rate;

changes in our cost of funds, including decreases in the Fed Funds rate that are controlled by the Federal Reserve (the "Fed") that occurred in 2024, or potential additional changes in the Fed Funds rate;

the difference between Agency RMBS yields and our funding and hedging costs;

13 unchanged sentences

Results of Operations

Described below are the Company’s results of operations for the nine and three months ended September 30, 2024, as compared to the Company’s results of operations for the nine and three months ended September 30, 2023.

Net Income (Loss) Summary

Net income for the nine months ended September 30, 2024 was $32.1 million, or $0.53 per share.

Net loss for the nine months ended September 30, 2023 was $66.4 million, or $1.58 per share.

Net income for the three months ended September 30, 2024 was $17.3 million, or $0.24 per share.

Net loss for the three months ended September 30, 2023 was $80.1 million, or $1.68 per share.

The components of net income (loss) for the nine and three months ended September 30, 2024 and 2023 , along with the changes in those components are presented in the table below:

Described below are the Company’s results of operations for the three months ended March 31, 2025, as compared to the Company’s results of operations for the three months ended March 31, 2024.

Net Income Summary

Net income for the three months ended March 31, 2025 was $17.1 million, or $0.18 per share.

Net income for the three months ended March 31, 2024 was $19.8 million, or $0.38 per share.

The components of net income for the three months ended March 31, 2025 and 2024 , along with the changes in those components are presented in the table below:

(in thousands)

Nine Months Ended September 30,

Three Months Ended September 30,

Three Months Ended March 31,

Interest income

Interest expense

Net interest (expense) income

Gains (losses) on RMBS and derivative contracts

Net portfolio income (loss)

Net income (loss)

Net interest income (expense)

Gains on RMBS and derivative contracts

Net portfolio income

GAAP and Non-GAAP Reconciliations

2 unchanged sentences

We have elected to account for our Agency RMBS under the fair value option.

Securities held under the fair value option are recorded at estimated fair value, with changes in the fair value recorded as unrealized gains or losses through the statements of comprehensive income (loss).

Securities held under the fair value option are recorded at estimated fair value, with changes in the fair value recorded as unrealized gains or losses through the statements of comprehensive income.

In addition, we have not designated our derivative financial instruments used for hedging purposes as hedges for accounting purposes, but rather hold them for economic hedging purposes.

Changes in fair value of these instruments are presented in a separate line item in the Company’s statements of comprehensive income (loss) and are not included in interest expense.

Changes in fair value of these instruments are presented in a separate line item in the Company’s statements of comprehensive income and are not included in interest expense.

As such, for financial reporting purposes, interest expense and cost of funds are not impacted by the fluctuation in value of the derivative instruments.

6 unchanged sentences

The table below presents a reconciliation of our net income (loss) determined in accordance with GAAP and net earnings excluding realized and unrealized gains and losses.

Described below are the Company’s results of operations for the nine months ended September 30, 2024 and 2023, and for each quarter in 2024 to date and 2023.

Described below are the Company’s results of operations for each quarter in 2025 to date and 2024.

Net Earnings Excluding Realized and Unrealized Gains and Losses

(in thousands, except per share data)

Income (Loss)

Three Months Ended

September 30, 2024

June 30, 2024

March 31, 2025

3 unchanged sentences

March 31, 2024

Nine Months Ended

September 30, 2024

September 30, 2023

Includes realized and unrealized gains (losses) on RMBS and derivative financial instruments, including net interest income or expense on interest rate swaps.

23 unchanged sentences

The non-GAAP measures help management to evaluate its financial position and performance without the effects of certain transactions and GAAP adjustments that are not necessarily indicative of our current investment portfolio or operations.

The unrealized gains or losses on derivative instruments presented in our statements of comprehensive income (loss) are not necessarily representative of the total interest rate expense that we will ultimately realize.

The unrealized gains or losses on derivative instruments presented in our statements of comprehensive income are not necessarily representative of the total interest rate expense that we will ultimately realize.

This is because as interest rates move up or down in the future, the gains or losses we ultimately realize, and which will affect our total interest rate expense in future periods, may differ from the unrealized gains or losses recognized as of the reporting date.

3 unchanged sentences

Therefore, the economic value of our investment strategy should not be viewed in isolation and is not a substitute for interest expense and net interest income computed in accordance with GAAP.

The tables below present a reconciliation of the adjustments to interest expense shown for each period relative to our derivative instruments, and the income statement line item, gains (losses) on derivative instruments, calculated in accordance with GAAP for the nine months ended September 30, 2024 and 2023, and for each quarter of 2024 to date and 2023.

Gains (Losses) on Derivative Instruments

5 unchanged sentences

Three Months Ended

September 30, 2024

June 30, 2024

March 31, 2025

3 unchanged sentences

March 31, 2024

Nine Months Ended

September 30, 2024

September 30, 2023

Economic Interest Expense and Economic Net Interest Income

3 unchanged sentences

Three Months Ended

September 30, 2024

June 30, 2024

March 31, 2025

3 unchanged sentences

March 31, 2024

Nine Months Ended

September 30, 2024

September 30, 2023

Reflects the effect of derivative instrument hedges for only the period presented.

2 unchanged sentences

Net Interest Income (Expense)

During the nine months ended September 30, 2024 , we incurred net interest expense of $2.8 million consisting of $169.6 million of interest income from RMBS assets offset by $172.4 million of interest expense on borrowings.

For the comparable period ended September 30, 2023 , we incurred $21.6 million of net interest expense, consisting of $128.0 million of interest income from RMBS assets offset by $149.6 million of interest expense on borrowings.

The $41.6 million increase in interest income was due to a 106 basis point ("bps") increase i n the yield on average RMBS, combined with a $223.7 million increase in average RMBS .

The $22.8 million increase in interest expense was due to a 47 bps increase in the average cost of funds, combined with an $217.2 million increase in average outstanding borrowings.

During the three months ended September 30, 2024 , we earned net interest income of $0.3 million consisting of $67.6 million of interest income from RMBS assets offset by $67.3 million of interest expense on borrowings.

For the comparable period ended September 30, 2023 , we incurred $8.6 million of net interest expense, consisting of $50.1 million of interest income from RMBS assets offset by $58.7 million of interest expense on borrowings.

The $17.5 million increase in interest income was due to a 92 bps increase in the yield on average RMBS, combined with a $537.2 million increase in average RMBS .

The $8.6 million increase in interest expense was due to an 18 bps increase in the average cost of funds, combined with a $474.0 million increase in average outstanding borrowings.

On an economic basis, our interest expense on borrowings for the nine months ended September 30, 2024 and 2023 was $83.5 million and $82.5 million , respectively, resulting in $86.1 million and $45.6 million of economic net interest income, respectively.

On an economic basis, our interest expense on borrowings for the three months ended September 30, 2024 and 2023 was $35.4 million and $34.3 million , respectively, resulting in $32.3 million and $15.8 million of economic net interest income, respectively.

The tables below provide information on our portfolio average balances, interest income, yield on assets, average borrowings, interest expense, cost of funds, net interest income and net interest spread for the nine months ended September 30, 2024 and 2023, and each quarter of 2024 to date and 2023 on both a GAAP and economic basis.

During the three months ended March 31, 2025 , we earned net interest income of $19.7 million consisting of $81.1 million of interest income from RMBS assets offset by $61.4 million of interest expense on borrowings.

For the comparable period ended March 31, 2024 , we incurred $2.5 million of net interest expense, consisting of $48.9 million of interest income from RMBS assets offset by $51.4 million of interest expense on borrowings.

The $32.2 million increase in interest income was due to a 38 basis point ("bps") increase in the yield on average RMBS, combined with a $2.1 billion increase in average RMBS .

The $10.0 million increase in interest expense was due to a 125 bps decrease in the average cost of funds, combined with a $2.0 billion increase in average outstanding borrowings.

On an economic basis, our interest expense on borrowings for the three months ended March 31, 2025 and 2024 was $40.5 million and $23.8 million , respectively, resulting in $40.6 million and $25.1 million of economic net interest income, respectively.

The tables below provide information on our portfolio average balances, interest income, yield on assets, average borrowings, interest expense, cost of funds, net interest income (expense) and net interest spread for each quarter of 2025 to date and 2024 on both a GAAP and economic basis.

($ in thousands)

3 unchanged sentences

Three Months Ended

September 30, 2024

June 30, 2024

March 31, 2025

3 unchanged sentences

March 31, 2024

Nine Months Ended

September 30, 2024

September 30, 2023

($ in thousands)

Net Interest Expense

Net Interest Income (Expense)

Net Interest Spread

Three Months Ended

September 30, 2024

June 30, 2024

March 31, 2025

3 unchanged sentences

March 31, 2024

Nine Months Ended

September 30, 2024

September 30, 2023

Portfolio yields and costs of borrowings presented in the tables above and the tables on pages 30 and 31 a re calculated based on the average balances of the underlying investment portfolio/borrowings balances and are annualized for the periods presented.

Portfolio yields and costs of borrowings presented in the tables above and the tables on page 29 a re calculated based on the average balances of the underlying investment portfolio/borrowings balances and are annualized for the periods presented.

Average balances for quarterly periods are calculated using two data points, the beginning and ending balances.

3 unchanged sentences

Average Asset Yield

The table below presents the average portfolio size, income and yields of our respective sub-portfolios, consisting of structured RMBS and PT RMBS, for the nine months ended September 30, 2024 and 2023, and for each quarter of 2024 to date and 2023.

The table below presents the average portfolio size, income and yields of our respective sub-portfolios, consisting of structured RMBS and PT RMBS, for each quarter of 2025 to date and 2024.

($ in thousands)

3 unchanged sentences

Three Months Ended

September 30, 2024

June 30, 2024

March 31, 2025

3 unchanged sentences

March 31, 2024

Nine Months Ended

September 30, 2024

September 30, 2023

Interest Expense and the Cost of Funds

We had average outstanding borrowings of $4.2 billion and $4.0 billion and total interest expense of $172.4 million and $149.6 million for the nine months ended September 30, 2024 and 2023, respectively.

Our average cost of funds was 5.51% for the nine months ended September 30, 2024, compared to 5.04% for the comparable period in 2023.

The $22.8 million increase in interest expense was due to the 47 bps increase in the average cost of funds, combined with a $217.2 million increase in average outstanding borrowings during the nine months ended September 30, 2024, as compared to the comparable period in 2023.

We had average outstanding borrowings of $4.8 billion and $4.3 billion and total interest expense of $67.3 million and $58.7 million for the three months ended September 30, 2024 and 2023, respectively.

Our average cost of funds was 5.62% for the three months ended September 30, 2024, compared to 5.44% for the comparable period in 2023.

The $8.6 million increase in interest expense was due to the 18 bps increase in the average cost of funds, combined with a $474.0 million increase in average outstanding borrowings during the three months ended September 30, 2024, as compared to the comparable period in 2023.

Our economic interest expense was $83.5 million and $82.5 million for the nine months ended September 30, 2024 and 2023, respectively.

There was an 11 bps decrease in the average economic cost of funds to 2.67% for the nine months ended September 30, 2024, from 2.78% for the nine months ended September 30, 2023.

Our economic interest expense was $35.4 million and $34.3 million for the three months ended September 30, 2024 and 2023, respectively.

There was a 22 bps decrease in the average economic cost of funds to 2.96% for the three months ended September 30, 2024, from 3.18% for the three months ended September 30, 2023.

We had average outstanding borrowings of $5.7 billion and $3.7 billion and total interest expense of $61.4 million and $51.4 million for the three months ended March 31, 2025 and 2024, respectively.

Our average cost of funds was 4.29% for the three months ended March 31, 2025, compared to 5.54% for the comparable period in 2024.

The $10.0 million increase in interest expense was due to the 125 bps decrease in the average cost of funds, combined with a $2.0 billion increase in average outstanding borrowings during the three months ended March 31, 2025, as compared to the comparable period in 2024.

Our economic interest expense was $40.5 million and $23.8 million for the three months ended March 31, 2025 and 2024, respectively.

There was a 27 bps increase in the average economic cost of funds to 2.83% for the three months ended March 31, 2025, from 2.56% for the three months ended March 31, 2024.

Since all of our repurchase agreements are short-term, changes in market rates directly affect our interest expense.

Our average cost of funds calculated on a GAAP basis was 46 bps above the one-month average SOFR and 25 bps above the six-month average SOFR for the quarter ended September 30, 2024.

Our average economic cost of funds was 220 bps below the average one-month SOFR and 241 bps below the average six-month SOFR for the quarter ended September 30, 2024.

The average term to maturity of the outstanding repurchase agreements was 25 days at September 30, 2024 and 26 days at December 31, 2023.

The tables below present the average balance of borrowings outstanding, interest expense and average cost of funds, and average one-month and six-month SOFR rates for the nine months ended September 30, 2024 and 2023, and for each quarter in 2024 to date and 2023, on both a GAAP and economic basis.

Our average cost of funds calculated on a GAAP basis was 4 bps below the one-month average SOFR and 26 bps below the six-month average SOFR for the quarter ended March 31, 2025.

Our average economic cost of funds was 150 bps below the average one-month SOFR and 172 bps below the average six-month SOFR for the quarter ended March 31, 2025.

The average term to maturity of the outstanding repurchase agreements was 40 days at March 31, 2025 and 26 days at December 31, 2024.

The tables below present the average balance of borrowings outstanding, interest expense and average cost of funds, and average one-month and six-month SOFR rates for each quarter in 2025 to date and 2024, on both a GAAP and economic basis.

($ in thousands)

2 unchanged sentences

Three Months Ended

September 30, 2024

June 30, 2024

March 31, 2025

3 unchanged sentences

March 31, 2024

Nine Months Ended

September 30, 2024

September 30, 2023

Average GAAP Cost of Funds

3 unchanged sentences

Three Months Ended

September 30, 2024

June 30, 2024

March 31, 2025

3 unchanged sentences

March 31, 2024

Nine Months Ended

September 30, 2024

September 30, 2023

Gains or Losses

The table below presents our gains or losses for the nine and three months ended September 30, 2024 and 2023.

The table below presents our gains or losses for the three months ended March 31, 2025 and 2024.

(in thousands)

Nine Months Ended September 30,

Three Months Ended September 30,

Realized gains (losses) on sales of RMBS

Three Months Ended March 31,

Realized losses on sales of RMBS

Unrealized gains (losses) on RMBS and U.S.

2 unchanged sentences

Treasury securities

Gains on T-Note futures

(Losses) gains on interest rate futures

(Losses) gains on interest rate swaps

Gains on payer swaptions (short positions)

Losses on payer swaptions (long positions)

Losses on interest rate caps

Losses on dual digital option

Losses on interest rate floors (short positions)

Gains on interest rate floors (long positions)

(Losses) gains on TBA securities (short positions)

Gains (losses) on TBA securities (long positions)

Gains on TBA securities (short positions)

Gains on TBA securities (long positions)

Total (losses) gains from derivative instruments

1 unchanged sentence

However, we have sold, and may continue to sell, existing assets to acquire new assets, which our management believes might have higher risk-adjusted returns in light of current or anticipated interest rates, federal government programs or general economic conditions or to manage our balance sheet as part of our asset/liability management strategy.

During the nine months ended September 30, 2024, we received proceeds of $288.2 million.

Approximately $221.7 million of these proceeds consisted of pools that were consolidated into a larger pool and simultaneously acquired by us.

During the three months ended March 31, 2025, we received proceeds of $168.6 million from sales of RMBS, resulting in losses of approximately $1.3 million.

During the three months ended March 31, 2024, we received proceeds of $221.7 million from sales of RMBS.

The 2024 sales consisted entirely of pools that were consolidated into a larger pool and simultaneously acquired by us.

No gain or loss was recorded on this resecuritization.

During the three months ended September 30, 2024, we received proceeds of approximately $66.5 million from the sales of RMBS, resulting in gains of approximately $0.5 million.

We did not sell any RMBS during the three and nine months ended September 30, 2023.

Realized and unrealized gains and losses on RMBS are driven in part by changes in yields and interest rates, the spreads that Agency RMBS trade relative to comparable duration U.S.

4 unchanged sentences

The table below presents historical interest rate data for each quarter end during 2025 to date and 2024.

September 30, 2024

June 30, 2024

March 31, 2025

11 unchanged sentences

Using the fair value accounting method, premiums or discounts to the face value of the PT RMBS present at the date of purchase are not amortized.

Premium lost and discount accretion resulting from monthly principal repayments are reflected in unrealized gains (losses) on RMBS in the statements of comprehensive income (loss).

The following table adjusts the Company’s interest income as reported on the Company’s statements of comprehensive income (loss) for the periods indicated to show interest income adjusted for premium amortization and discount accretion on its mortgage-backed security investments.

Premium lost and discount accretion resulting from monthly principal repayments are reflected in unrealized gains (losses) on RMBS in the statements of comprehensive income.

The following table adjusts the Company’s interest income as reported on the Company’s statements of comprehensive income for the periods indicated to show interest income adjusted for premium amortization and discount accretion on its mortgage-backed security investments.

The purpose of presenting this non-GAAP measure of interest income is to provide management and investors with an alternative way of evaluating yield on RMBS that may be more comparable to some of the Company's peers who amortize premiums and discounts on their PT RMBS investments.

6 unchanged sentences

Three Months Ended

September 30, 2024

June 30, 2024

March 31, 2025

3 unchanged sentences

March 31, 2024

As reported in the Company’s statements of comprehensive income (loss) using the fair value accounting method.

As reported in the Company’s statements of comprehensive income using the fair value accounting method.

Premium amortization/discount accretion for each period is calculated using the beginning of period market value of all securities.

2 unchanged sentences

See “—GAAP and Non-GAAP Reconciliations,” for a description of our non-GAAP measures.

For the nine and three months ended September 30, 2024, the Company’s total operating expenses were approximately $12.4 million and $4.3 million, compared to approximately $14.5 million and $4.6 million for the nine and three months ended September 30, 2023.

The table below presents a breakdown of operating expenses for the nine and three months ended September 30, 2024 and 2023.

For the three months ended March 31, 2025, the Company’s total operating expenses were approximately $4.2 million, compared to approximately $3.7 million for the three months ended March 31, 2024.

The table below presents a breakdown of operating expenses for the three months ended March 31, 2025 and 2024.

(in thousands)

Nine Months Ended September 30,

Three Months Ended September 30,

Three Months Ended March 31,

Management fees

Overhead allocation

Accrued incentive compensation

Allocated overhead

Incentive compensation

Directors fees and liability insurance

3 unchanged sentences

Total expenses

As of December 31, 2023, the Company had accrued a liability of $0.6 million for bonuses to be paid to the Manager's employees.

During the first nine months of 2024, the Company awarded shares of Company common stock with a fair value of $0.3 million.

Accrued incentive compensation for the nine months ended September 30, 2024 includes a reversal of the over accrual of this liability.

As of December 31, 2024 and 2023, the Company had accrued liabilities of $0.6 million for bonuses to be paid to the Manager's employees.

During the first three months of 2025 and 2024 the Company awarded shares of Company common stock with a fair value of $0.2 million and $0.3 million, respectively.

Accrued incentive compensation for the three months ended March 31, 2025 and 2024 includes a reversal of the over accrual of these liabilities.

We are externally managed and advised by Bimini Advisors, LLC (the “Manager”) pursuant to the terms of a management agreement.

12 unchanged sentences

The following table summarizes the management fee and overhead allocation expenses for the nine months ended September 30, 2024 and 2023, and for each quarter in 2024 to date and 2023.

The following table summarizes the management fee and overhead allocation expenses for each quarter in 2025 to date and 2024.

($ in thousands)

1 unchanged sentence

Three Months Ended

September 30, 2024

June 30, 2024

March 31, 2025

3 unchanged sentences

March 31, 2024

Nine Months Ended

September 30, 2024

September 30, 2023

Financial Condition:

Mortgage-Backed Securities

As of September 30, 2024, our RMBS portfolio consisted of $5,442.8 million of Agency RMBS at fair value and had a weighted average coupon on assets of 4.90%.

During the nine months ended September 30, 2024, we received principal repayments of $310.3 million, compared to $237.9 million for the nine months ended September 30, 2023.

The average three month prepayment speeds for the quarters ended September 30, 2024 and 2023 were 8.8% and 6.0%, respectively.

As of March 31, 2025, our RMBS portfolio consisted of $6.7 billion of Agency RMBS at fair value and had a weighted average coupon on assets of 5.30%.

During the three months ended March 31, 2025, we received principal repayments of $133.0 million, compared to $74.3 million for the three months ended March 31, 2024.

The average three month prepayment speeds for the quarters ended March 31, 2025 and 2024 were 7.8% and 6.0%, respectively.

The following table presents the 3-month constant prepayment rate (“CPR”) experienced on our structured and PT RMBS sub-portfolios, on an annualized basis, for the quarterly periods presented.

5 unchanged sentences

Portfolio (%)

September 30, 2024

June 30, 2024

March 31, 2025

3 unchanged sentences

March 31, 2024

The following tables summarize certain characteristics of the Company’s PT RMBS and structured RMBS as of September 30, 2024 and December 31, 2023:

The following tables summarize certain characteristics of the Company’s PT RMBS and structured RMBS as of March 31, 2025 and December 31, 2024:

($ in thousands)

Asset Category

September 30, 2024

March 31, 2025

Fixed Rate RMBS

8 unchanged sentences

($ in thousands)

September 30, 2024

March 31, 2025

December 31, 2024

4 unchanged sentences

Total Portfolio

September 30, 2024

March 31, 2025

December 31, 2024

5 unchanged sentences

Effective duration is the approximate percentage change in price for a 100 bps change in rates.

An effective duration of 3.490 indicates that an interest rate increase of 1.0% would be expected to cause a 3.490% decrease in the value of the RMBS in the Company’s investment portfolio at September 30, 2024.

An effective duration of 3.560 indicates that an interest rate increase of 1.0% would be expected to cause a 3.560% decrease in the value of the RMBS in the Company’s investment portfolio at March 31, 2025.

An effective duration of 4.200 indicates that an interest rate increase of 1.0% would be expected to cause a 4.200% decrease in the value of the RMBS in the Company’s investment portfolio at December 31, 2024.

1 unchanged sentence

Effective duration quotes for individual investments are obtained from The Yield Book, Inc.

The following table presents a summary of portfolio assets acquired during the nine months ended September 30, 2024 and 2023, including securities purchased during the period that settled after the end of the period, if any.

The following table presents a summary of portfolio assets acquired during the three months ended March 31, 2025 and 2024, including securities purchased during the period that settled after the end of the period, if any.

($ in thousands)

4 unchanged sentences

Pass-through RMBS

Structured RMBS

As of September 30, 2024, we had established borrowing facilities in the repurchase agreement market with a number of commercial banks and other financial institutions and had borrowings in place with 25 of these counterparties.

As of March 31, 2025, we had established borrowing facilities in the repurchase agreement market with a number of commercial banks and other financial institutions and had borrowings in place with 24 of these counterparties.

None of these lenders are affiliated with the Company.

1 unchanged sentence

We believe our established repurchase agreement borrowing facilities provide borrowing capacity in excess of our needs.

As of September 30, 2024, we had obligations outstanding under the repurchase agreements of approximately $5,230.9 million with a net weighted average borrowing cost of 5.24%.

As of March 31, 2025, we had obligations outstanding under the repurchase agreements of approximately $6.4 billion with a net weighted average borrowing cost of 4.46%.

The remaining maturity of our outstanding repurchase agreement obligations ranged from 11 to 168 days, with a weighted average remaining maturity of 40 days.

Securing the repurchase agreement obligations as of September 30, 2024 are RMBS with an estimated fair value, including accrued interest, of approximately $5,461.0 million, and cash pledged to counterparties of approximately $9.2 million.

Through October 25, 2024, we have been able to maintain our repurchase facilities with comparable terms to those that existed at September 30, 2024, with maturities through November 20, 2024.

Securing the repurchase agreement obligations as of March 31, 2025 are RMBS with an estimated fair value, including accrued interest, of approximately $6.7 billion, and cash pledged to counterparties of approximately $2.8 million.

Through April 25, 2025, we have been able to maintain our repurchase facilities with comparable terms to those that existed at March 31, 2025, with maturities through September 15, 2025.

The table below presents information about our period end, maximum and average balances of borrowings for each quarter in 2025 to date and 2024.

4 unchanged sentences

Three Months Ended

September 30, 2024

June 30, 2024

March 31, 2025

7 unchanged sentences

Adjusted leverage is calculated by dividing our repurchase agreements by stockholders' equity.

Our economic leverage at September 30, 2024 was 7.6 to 1, compared to 6.7 to 1 as of December 31, 2023.

Our adjusted leverage at September 30, 2024 was 8.0 to 1, compared to 7.9 to 1 as of December 31, 2023.

Our economic leverage at March 31, 2025 was 7.8 to 1, compared to 7.3 to 1 as of December 31, 2024.

Our adjusted leverage at March 31, 2025 was 7.5 to 1, compared to 7.5 to 1 as of December 31, 2024.

The following table presents information related to our historical leverage.

1 unchanged sentence

Stockholders'

September 30, 2024

June 30, 2024

March 31, 2025

36 unchanged sentences

rather haircuts are determined on an individual repo transaction basis.

Throughout the nine months ended September 30, 2024, haircuts on our pledged collateral remained stable and as of September 30, 2024, our weighted average haircut was approximately 4.3% of the value of our collateral.

Throughout the three months ended March 31, 2025, haircuts on our pledged collateral remained stable and as of March 31, 2025, our weighted average haircut was approximately 4.3% of the value of our collateral.

TBAs represent a form of off-balance sheet financing and are accounted for as derivative instruments.

14 unchanged sentences

In future periods, we expect to continue to finance our activities in a manner that is consistent with our current operations through repurchase agreements.

As of September 30, 2024, we had cash and cash equivalents of $322.1 million.

We generated cash flows of $459.4 million from principal and interest payments on our RMBS and had average repurchase agreements outstanding of $4,175.2 million during the nine months ended September 30, 2024.

As of March 31, 2025, we had cash and cash equivalents of $396.4 million.

We generated cash flows of $200.9 million from principal and interest payments on our RMBS and had average repurchase agreements outstanding of $5.7 billion during the three months ended March 31, 2025.

As described more fully below, we may also access liquidity by selling our equity or debt securities in public offerings or private placements.

Capital Expenditures

At March 31, 2025, we had no material commitments for capital expenditures.

Stockholders ’ Equity

September 30, 2024, we

issued a total of 15,309,022 shares under the June 2024 Equity Distribution Agreement for aggregate gross proceeds of approximately $128.6 million, and net proceeds of approximately $126.5 million, after commissions and fees.

Subsequent to

September 30, 2024, we

issued a total of 332,000 shares under the June 2024 Equity Distribution Agreement for aggregate gross proceeds of approximately $2.7 million, and net proceeds of approximately $2.7 million, after commissions and fees.

On June 11, 2024, we entered into an equity distribution agreement (the “June 2024 Equity Distribution Agreement”) with three sales agents pursuant to which we could offer and sell, from time to time, up to an aggregate amount of $250,000,000 of shares of the our common stock in transactions that were deemed to be “at the market” offerings and privately negotiated transactions.

Economic Summary

The trajectory of the economy that existed as the second quarter of 2024 ended continued into the third quarter.

The trend was apparent in the incoming economic data, the level of interest rates and the outlook for monetary policy on the part of the Fed.

With respect to the latter, the Fed finally lowered the Fed Funds rate in late September by 50 basis points, the first interest rate cut since the Fed stopped tightening monetary policy in March of 2023.

The move was well telegraphed by various Fed officials during their public comments leading up to the event as the Fed was careful not to surprise the market with the cut.

Throughout the third quarter, incoming labor market and inflation data was consistent with the Fed’s view that inflation was approaching its 2% target and would soon get there.

The Fed's focus has shifted to the labor market and ensuring the supply/demand balance that had led to a low unemployment rate and outsized wage gains did not slow too much and jeopardize its efforts to fulfill its second mandate of full employment.

Further, elevated interest rate levels had materially impacted the housing market and other interest rate sensitive sectors of the economy, so the Fed feared that if the labor market cooled too much then economic growth could as well.

The manufacturing side of the economy was already weak, so all things considered the Fed's movement of monetary policy back towards the neutral rate was consistent with its mandates.

Unlike the inflation and labor market data, consumer spending levels and economic growth generally – as measured by GDP – were still quite robust during the third quarter and, in the case of the latter, trending at or above sustainable trend growth rates.

However, as long as inflation data continued to move towards its target level – and such data was already there when three- or six-month measures were annualized – the Fed appeared comfortable lowering the Fed Funds rate to ensure the labor market did not cool too much.

As the fourth quarter of 2024 begins, the latest reading on the labor market appears to have reversed the slowing trend apparent over the last several months as the September reading was very strong, previous months data was revised higher and the unemployment rate declined.

Also, in late September, the government revised previously released data on gross domestic income (“GDI”), another measure of economic growth.

GDI data over the past several quarters had been quite low and inconsistent with GDP data and consumer spending levels.

Most economists believed the GDI data painted the more accurate picture of the true level of economic growth in the economy.

However, the GDI data was revised higher and was now consistent with the GDP data.

Together with the latest labor market data, the economy now appears quite healthy and the market expects that the Fed will be more conservative in the timing and extent of further reductions in the Fed Funds rate.

The first quarter of 2025 was essentially a continuation of the fourth quarter of 2024, at least for the first two months or so.

Incoming economic data continued to reflect robust economic activity and a healthy labor market – casting additional doubt on the need for any easing of monetary policy on the part of the Fed.

This was consistent with the slow reversal in the outlook for Fed monetary policy that began not long after their initial 50 basis point cut in September of 2024.

The economic data was consistent with an economy that was clearly not slowing or a threat to enter a contraction soon.

Further, inflation data was stubbornly still above the Fed’s 2% target range and increasing slightly, which was consistent with behavior exhibited during the first quarter of recent years.

Public comments by Fed officials clearly indicated the Fed was willing to be patient and content to watch the evolution of incoming economic data going forward before making any further adjustments to policy.

During the years following the COVID-19 pandemic in 2020, fiscal and monetary policies were very pro-cyclical and led to elevated levels of inflation and fiscal deficits.

The combined effects of the pro-growth policies led the equity markets higher.

However, another major development that occurred – in this case predominantly in 2024 – was the emergence of a new technology related to artificial intelligence (“AI”).

The potential impact of this technology on the economy was immense and led to even greater gains in the market prices generally and in particular of the stock prices of the companies involved, leading to record valuations.

In early 2025 a competing technology emerged in China that appeared to deliver the same performance as domestic technologies but at a substantially lower cost.

This led to considerable weakness in the U.S.

domestic stock market and AI tech companies in particular – the leaders of the previous equity market record performance.

In addition, incoming economic data began to soften later during the first quarter of 2025, and readings on consumer sentiment began to decline sharply.

In March of 2025, the Trump administration introduced the first of several tariffs.

The administration indicated there was more to come in the near future, and market expectations for growth and inflation began to erode quickly.

Sentiment was further depressed when some incoming economic data was consistent with stagflation – the combination of slowing economic growth and inflation.

In early April, the Trump administration announced substantial additional new tariffs on what was termed “Liberation Day” – the magnitude and extent of which were far in excess of market expectations.

The impact of the announcements was severe.

Risk assets of all kinds were sold, and price declines were substantial.

Even more troubling, safe haven assets such as U.S.

Treasury securities declined in price just as severely.

De-leveraging occurred as investors sold assets to raise cash, causing valuations to plunge further.

Volatility in interest rates and equities surged and market functioning deteriorated.

More significantly, fear grew that the new tariffs were so extreme that the trade wars they would likely trigger could materially alter the existing global trade regime and jeopardize the supremacy of the U.S.

dollar and U.S.

Treasury securities as the reserve currency and benchmark risk free asset, respectively.

Fortunately, before market functioning could deteriorate further, the Trump administration announced a 90 day pause before implementing the reciprocal tariffs – the most extreme tariffs announced – to allow time for trade partners to negotiate modifications to the tariffs.

As the second quarter continues, there remains substantial uncertainty about how events will unfold surrounding the tariffs and global trade, and their impact on the markets and the Company.

Interest Rates

Over the course of the third quarter of 2024, interest rates continued to decrease as they had through the last two months of the second quarter.

After the yield on the 10-year T-Note peaked at 4.7% in late April 2024, the yield trended downward until hitting a year-to-date low near 3.6% on September 16, 2024.

However, the GDI revisions in late September, coupled with the resurgence in the labor market data released in early October, drove 10-year U.S.

Treasury rates back above 4% in early October.

Otherwise, the U.S Treasury and swap curves steepened throughout the third quarter of 2024.

The spread between the 2-year and 10-year T-Notes turned positive in early September 2024 for the first time since mid-2022, ending the longest period of inversion ever recorded.

As noted above, the Fed reduced the overnight Fed Funds rate at its meeting in September by 50 basis points.

Given developments discussed above that occurred prior to the Fed’s meeting in September – cooling inflation data, a slowing labor market and comments by Fed officials regarding their desire to start to remove overly restrictive monetary policy – the market anticipated two such 50 basis point cuts and at least one additional 25 basis point cut by year-end based on price levels in the futures and related markets.

The developments late in the third quarter of 2024 and early in the fourth quarter of 2024 – the GDI revisions, September labor market report and even the September inflation report released in early October, which was slightly higher than expectations – have reduced market expectations of further Fed Funds rate cuts this year to less than two more 25 basis point cuts.

Some economists believe the economy may have achieved a “soft” landing after the 500+ basis point hikes initiated by the Fed.

A soft landing refers to the outcome where the economy does not suffer a contraction or even slowdown growth following a tightening cycle by the Fed.

Such instances are very rare, and it remains to be seen if this will prove to be the case.

Interest rate volatility embedded in interest rate derivatives, as measured by the MOVE index, was elevated throughout the third quarter of 2024 and even increased further still late in the quarter after the Fed Funds rate cut, likely in response to the developments discussed above, geopolitical events in the Middle East and uncertainty surrounding the U.S.

presidential election in November.

The value of the index approached a year-to-date high reading in early October.

Given that uncertainty surrounding these same events remains, it is likely interest rate volatility will remain elevated through the fourth quarter of 2024.

T he Agency RMBS Market

As the economic data, particularly inflation, moderated over the course of the second quarter of 2024, market participants expected that should the trend continue the Fed would soon begin loosening monetary policy and the curve slope would normalize and become positively sloped again.

Risk assets of all kinds performed very well for the second quarter as investors became comfortable short-term rates had peaked and would soon be heading lower, reducing funding costs and enhancing levered returns on risk assets.

Lower risk assets also generated positive returns, such as Agency RMBS, but the returns were modest.

The Agency RMBS index generated a total return for the quarter of 0.2%, and 0.3% for Fannie Mae Agency RMBS.

Versus comparable duration U.S.

Treasuries (a proxy for hedge adjusted returns), the returns were (0.2)% and (0.25)%, respectively.

These returns for the second quarter of 2024 compare to 4.3% for the S&P 500, 1.1% for the high yield index and absolute returns of between 1.0% and 1.7% for the various sub-sectors of the non-Agency RMBS indices.

Within the stack of 30-year, fixed rate Agency RMBS (the asset class in which the Company invests the vast majority of its capital), absolute returns tracked the coupons of the securities - the higher the coupon, the higher the return.

The return for 2.0% coupon securities was 0.1% for the second quarter, the lowest return, and 1.3% for 7.0% coupon securities, the highest return and coupon.

Within the stack of 30-year, fixed rate Agency RMBS, excess returns versus comparable duration swaps for the second quarter (a proxy for hedged returns) were better for coupons on the lower and higher end of the coupon range, with returns for the middle coupons lagging.

The lowest coupon securities, 2.0%, 2.5%, 3.0% and 3.5%, had excess returns of (0.1)%.

The highest coupons securities, 6.5% and 7.0%, had excess returns of (0.2)% and 0.0%, respectively.

The middle coupon security returns, 4.0% coupons through 6.0% coupons, had excess returns between (0.3)% and (0.6)%.

The pivot in market outlook for Fed monetary policy that occurred during the fourth quarter of 2024 and led to interest rates rising steadily continued into the first quarter of 2025.

The yield on the 10-year T-Note was close to 3.6% in September of 2024 just after the Fed lowered the Fed Funds rate by 50 basis points at the September meeting of the FOMC.

However, yields began to rise steadily not long thereafter as economic data was not consistent with an economy on the verge of a recession and inflation was stubbornly above the Fed’s 2% target.

By late 2024, the yield on the 10-year T-Note was over 4.6% and close to 4.8% in early January of 2025.

Over the course of the balance of the first quarter of 2025, interest rates gradually declined as sentiment indicators declined to levels not seen in several years, triggered by declines in U.S.

equity markets – albeit off of record high levels – persistent inflation and expectations economic growth was about to slow.

The economic data itself over this period was mixed – labor markets were weakening slowly, manufacturing activity was improving slightly but off of very low levels, and the service sector was slowing, but off of robust levels.

Towards the end of the first quarter, the yield on the 10-year T-Note was trading between 4.15% and 4.30%.

At this point in the quarter stagflation fears were emerging.

The yield on the 2-year T-Note followed a similar path over this period.

When expectations for substantial additional Fed easing were high late in the third quarter of 2024 the 2-year T-Note yield was approximately 3.6% before rising steadily over the course of the fourth quarter of 2024 and through February of 2025 to a yield of between 4.2% and 4.4%.

This range was essentially level with the Fed Funds level – implying the market did not expect monetary policy changes over the next two years.

As sentiment readings declined late in the first quarter the 2-year T-Note yield declined towards 4.0% and so far during the second quarter the yield has ranged between 3.7% and 4.0%.

With the severe market turmoil triggered by the Trump administration's tariff announcements, the market now anticipates the Fed will have to lower monetary policy by approximately 75 basis points by the end of 2025, as the market now expects the tariffs to trigger a growth slowdown if not outright recession in 2025.

During the week of April 4th, the yield on the 10-year T-Note rose by approximately 50 basis points – one of the largest one-week increases ever.

The Agency RMBS Market

As a proxy for the performance of the Agency RMBS market during the first quarter of 2025, the spread of the 30-year, fixed rate current coupon to the 10-year T-Note traded in a narrow range throughout the first quarter of 2025 of between 120 and 130 basis points.

When the Trump administration announced substantial additional tariffs on April 2, 2025, risk assets of all types came under tremendous selling pressure as deleveraging occurred, even with Agency RMBS.

The spread of the current coupon then expanded to over 140 basis points, and to almost 180 basis points versus the 5-year T-Note.

This spread to the 5-year T-Note was generally less than 150 basis points during the first quarter of 2025 but came within 12 basis points of the peak spread it reached in the fall of 2023 – its highest level since the COVID-19 onset in March of 2020.

The Agency RMBS index generated a return for the first quarter of 3.0% and a return of 0.4% versus comparable duration swaps, as compared to 2.4% and -0.3%, respectively for these measures, for the investment grade corporate index, and 1.0% and -1.1%, respectively for these measures, for high yield debt.

Total returns for U.S.

Treasury securities and most sectors of the fixed income markets generated positive total returns for the quarter, although excess returns versus comparable duration swaps were mixed.

Within Agency RMBS for the first quarter of 2025, conventional 30-year mortgages generated a total return of 2.7%, 15-year mortgages generated a total return of 2.9% and Ginnie Mae 30-year mortgages generated a total return of 2.4%.

Versus comparable duration swaps the returns were 0.4%, 0.6% and 0.3% for 30-year conventional, 15-year conventional and Ginnie Mae 30-year mortgages, respectively.

The Company invests predominantly in 30-year conventional mortgages.

Returns with the 30-year stack of coupons were fairly even, but correlated with the duration of the respective securities, as lower coupon, longer duration bonds generated the highest total returns and the highest coupon – 7.0% - generated slightly lower total returns.

The range for the lower portion of the coupon stack was 3.0% to 3.3% (for coupons up to 4.5%) and 2.6% to 2.9% for higher coupons.

Excess returns versus comparable duration swaps were inversely related to coupons, as the higher coupons generated excess returns as high as 1.4% but excess returns for lower coupons were generally between 0.3% and 0.5%.

Recent Legislative and Regulatory Developments

10 unchanged sentences

On May 1, 2024, the FOMC announced the Fed’s decision to reduce its balance sheet by a maximum of $25 billion of U.S.

Treasuries and remove the cap on Agency RMBS reduction, with any amounts in excess of $35 billion per month being reinvested in U.S.

Treasury securities and remove the cap on Agency RMBS reduction, with any amounts in excess of $35 billion per month being reinvested in U.S.

Treasury securities.

Relatively high interest rates and slow prepayment speeds have kept the balance sheet reduction for Agency RMBS below $20 billion per month throughout 2024, although an increase in mortgage refinance applications following the announcement of the Fed Funds rate cut in September 2024 may accelerate the process.

As of August 2024, the Fed had reduced its balance sheet for Agency RMBS by approximately $440 billion from the peak to $2.3 trillion, shedding approximately 32% of the Agency RMBS added during pandemic quantitative easing and representing the lowest level since June 2021.

On March 19, 2025, the FOMC announced the Fed's decision to reduce its balance sheet by a maximum of $5 billion of U.S.

Treasury securities beginning April 1, 2025.

Relatively high interest rates and slow prepayment speeds have kept the balance sheet reduction for Agency RMBS below $20 billion per month throughout 2024 and the first quarter of 2025.

As of March 31, 2025, the Fed had reduced its balance sheet for Agency RMBS by approximately $551 billion from the peak to $2.2 trillion, shedding approximately 40% of the Agency RMBS added during pandemic quantitative easing and representing the lowest level since May 2021.

On September 14, 2021, the U.S.

Treasury and the FHFA suspended certain policy provisions in the Enterprise capital framework established in December 2020, including limits on loans acquired for cash consideration, multifamily loans, loans with higher risk characteristics and second homes and investment properties.

Effective April 26, 2022, the FHFA further amended this framework by, among other things, replacing the fixed leverage buffer equal to 1.5% of an Enterprise’s adjusted total assets with a dynamic leverage buffer equal to 50% of an Enterprise’s stability capital buffer, reducing the risk weight floor from 10% to 5%, and removing the requirement that the Enterprises must apply an overall effectiveness adjustment to their credit risk transfer exposures.

On June 14, 2022, the Enterprises announced that they would each charge a 50 bps fee for commingled securities issued on or after July 1, 2022 to cover the additional capital required for such securities under the Enterprise capital framework, which was subsequently reduced on January 19, 2023 to 9.375 bps for commingled securities issued on or after April 1, 2023 to address industry concern that the fee posed a risk to the fungibility of the Uniform Mortgage-Backed Security and negatively impacted liquidity and pricing in the market for TBA securities.

On November 30, 2023, the FHFA published a final rule, which became effective April 1, 2024, which will, among other things, reduce the risk weight and credit conversion factor for guarantees on commingled securities to 5% and 50%, respectively;

replace the current exposure methodology with the standardized approach for counterparty credit risk as the method for computing exposure and risk-weighted asset amounts for derivatives and cleared transactions;

update the credit score assumption to 680 for single-family mortgage exposures originated without a representative credit score;

and introduce a risk weight of 20% for guarantee assets.

On November 30, 2023, the FHFA published a final rule, which became effective April 1, 2024, which reduced the risk weight and credit conversion factor for guarantees on commingled securities to 5% and 50%, respectively;

replaced the current exposure methodology with the standardized approach for counterparty credit risk as the method for computing exposure and risk-weighted asset amounts for derivatives and cleared transactions;

updated the credit score assumption to 680 for single-family mortgage exposures originated without a representative credit score;

and introduced a risk weight of 20% for guarantee assets.

On January 2, 2025, the U.S.

Treasury and FHFA entered into a letter agreement deleting the September 2021 Provisions entirely, as well as providing additional guidance on the process for a potential end to the conservatorship of the Enterprises.

In March 2025, the Trump administration's nominee for FHFA director, Bill Pulte, was confirmed and replaced 14 board members at the Enterprises.

Although this led to some speculation in the market regarding an end to conservatorship, the new FHFA director signaled a more cautious approach, stating that significant study on the impact to mortgage rates would need to be done prior to any privatization of the Enterprises.

On July 27, 2023, the federal banking regulators, including the Office of the Comptroller of the Currency, (the "OCC") the FDIC and the Fed, jointly issued a proposed rule that would revise large bank capital requirements (the "Basel III Endgame").

43 unchanged sentences

In order to protect our net interest margin against increases in short-term interest rates, we may enter into interest rate swaps, which economically convert our floating-rate repurchase agreement debt to fixed-rate debt or utilize other hedging instruments such as Fed Funds, SOFR and T-Note futures contracts, dual digital options or interest rate swaptions.

The long-awaited impacts of tight monetary policy orchestrated by the Fed appear to have finally slowed inflation sufficiently such that the Fed could re-focus on its second mandate – full employment in the economy.

The labor market data over the course of the second and third quarters of 2024 reflected greater balance between the supply and demand for labor, such that hiring and wage growth were slowing and the unemployment rate was rising gradually.

In late September 2024, the Fed reduced the Fed funds rate by 50 basis points, and the market anticipated it was the first of many such cuts.

In contrast, growth in the economy, as measured by both GDP and GDI as well as consumer spending, has remained robust throughout.

However, the non-farm payroll report for September 2024, released in early October, as well as the latest readings on inflation suggest that the Fed may be more conservative in the timing and extent of further reductions in the Fed Funds rate than the market had expected at the beginning of the third quarter.

Interest rates decreased over the course of the third quarter of 2024, continuing the trend started in late April 2024.

Treasury curve also steepened as the market anticipated additional easing of monetary policy by the Fed and the spread between the 2-year and 10-year T-Notes finally turned positive in early September 2024 after being inverted since mid-2022, the longest inversion ever.

Cheaper funding levels coupled with a still healthy economy were supportive of risk assets, and domestic fixed income securities all generated positive returns for the quarter.

Agency RMBS also generated positive excess returns versus comparable duration swaps.

Based on recent positive economic data, it is unclear how much further the Fed will go in relaxing monetary policy.

Further, geo-political events around the world, especially in the Middle East, as well as the U.S.

presidential election in November, are cause for uncertainty in the outlook for markets and the economy.

The market in which the Company invests the preponderance of its capital, the Agency RMBS market, has performed well so far in 2024, and potential returns available in the market remain attractive.

While additional Fed Funds rate cuts by the Fed may be supportive of the Company’s earnings going forward, the Company also expects that its hedge positions in place will allow it to continue to generate attractive dividends if current market rates persist.

The outlook for the U.S.

economy, interest rates and monetary policy – all critical factors impacting the markets the Company invests its capital in – began to change late in the first quarter and so far in the second quarter of 2025.

However, the performance of the Company for the first quarter of 2025 was impacted by market conditions prior to this change.

Conversely, the outlook for the Company going forward will be impacted by events that occurred recently.

While economic data and events generally are never uniformly stable or consistent, the first quarter of 2025 was relatively uneventful.

Interest rates were generally range bound, and volatility was low for most of the quarter.

These are ideal conditions for a levered investment strategy in Agency RMBS.

Accordingly, the Company and the Agency RMBS market generated attractive returns for the period.

The Company’s stock also traded well during the quarter – at least until the last week of the quarter.

The Company was able to take advantage of the calm conditions and price performance of its common stock and raise additional capital, generally at a slight premium to book value, and deploy the proceeds in an attractive investment environment.

The tariff announcements late in the first quarter and in early April of 2025 brought these favorable market conditions to an abrupt end.

In fact, conditions were reminiscent of March 2020 when the COVID-19 pandemic led to an abrupt de-leveraging that materially depressed prices of all asset classes.

The Company sold a significant amount of assets in early April as needed to maintain leverage at acceptable levels and was able to do so without suffering material permanent losses to date.

It is not clear if these conditions have subsided fully or if they will return.

Accordingly, the Company intends to maintain prudent leverage and ample liquidity while the threat of turbulent market conditions persists.

Critical Accounting Estimates

3 unchanged sentences

There have been no changes to our critical accounting estimates as discussed in our annual report on Form 10-K for the year ended December 31, 2024.

Capital Expenditures

At September 30, 2024, we had no material commitments for capital expenditures.

In addition to other requirements that must be satisfied to continue to qualify as a REIT, we must pay annual dividends to our stockholders of at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and excluding any net capital gains.

5 unchanged sentences

2025 - YTD(1)

On October 16, 2024, the Company declared a dividend of $0.12 per share to be paid on November 27, 2024.

The effect of this dividend is included in the table above but is not reflected in the Company’s financial statements as of September 30, 2024.

On April 9, 2025, the Company declared a dividend of $0.12 per share to be paid on May 29, 2025.

The effect of this dividend is included in the table above but is not reflected in the Company’s financial statements as of March 31, 2025.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements