What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-20 compared with 2025-02-21 · 107 added, 99 removed, 868 unchanged (19% of the section changed)

36 unchanged sentences

The fair value of mortgage-backed securities is based on independent pricing sources and/or third-party broker quotes, when available.

Because the price estimates may vary, the Company must make certain judgments and assumptions about the appropriate price to use to calculate the fair values based on various techniques including observing the most recent transactions for like or identical assets, market credit spreads, and model driven approaches.

Because the price estimates may vary, the Company must make certain judgments and assumptions about the appropriate price to use to calculate the fair values based on various techniques.

We identified the valuation of mortgage-backed securities as a critical audit matter.

The principal considerations for our determination are:

(i) the potential for bias in how the Company subjectively selects the price from multiple pricing sources to determine the fair value of the mortgage-backed securities and (ii) the audit effort involved, including the involvement of valuation professionals with specialized skill and knowledge.

The principal consideration for our determination was the especially challenging nature of the audit effort involved, which included the use of valuation professionals with specialized skill and knowledge.

The primary procedures we performed to address this critical audit matter included:

Testing the design, implementation, and operating effectiveness of controls relating to the valuation of mortgaged-backed securities in the Company’s process to select the price from multiple pricing sources to determine the fair value.

Assessing the range of values used for each investment position, and evaluating the price selected for potential bias by comparing the selected price to the high, low and average of the range of pricing sources.

Utilizing personnel with specialized skill and knowledge in valuation to:

(i) develop an independent estimate of the fair value of each investment position utilizing third-party pricing services and transparent market data;

(i) develop an independent estimate of the fair value of each investment utilizing third-party pricing services and independent market data;

and (ii) comparing those fair value estimates to the fair value determined by the Company.

20 unchanged sentences

Derivative assets

Reverse repurchase agreements

$ 11,675,993 $ 5,721,627

6 unchanged sentences

Accrued interest payable

31,397 10,750

Due to affiliates

Obligation to return securities borrowed under reverse repurchase agreements, at fair value

Other liabilities

1 unchanged sentence

10,304,045 5,053,127

COMMITMENTS AND CONTINGENCIES (Note 10)

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:

26 unchanged sentences

( 6,321 ) ( 4,602 ) ( 22,642 )

Unrealized losses on mortgage-backed securities and U.S.

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

Treasury securities

200,231 ( 79,842 ) ( 18,941 )

Gains on derivative instruments

(Losses) gains on derivative instruments

( 122,669 ) 133,554 45,237

12 unchanged sentences

Direct REIT operating expenses

1,208 787 715

Other administrative

21 unchanged sentences

- - - ( 39,226 ) - ( 39,226 )

Unrealized gain on available-for-sale securities

- - - - 17 17

Cash dividends declared

50 unchanged sentences

6,321 4,602 22,642

Unrealized losses on mortgage-backed securities and U.S.

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

Treasury securities

( 200,231 ) 79,842 18,941

Realized and unrealized (gains) losses on derivative instruments

Realized and unrealized losses (gains) on derivative instruments

160,028 ( 46,370 ) 10,616

23 unchanged sentences

75,000 450,000 37,500

Net proceeds from derivative instruments

Net payments on reverse repurchase agreements

( 128,613 ) - -

NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES

Net (payments on) proceeds from derivative instruments

( 32,383 ) 24,121 15,940

NET CASH USED IN INVESTING ACTIVITIES

( 5,376,044 ) ( 1,415,487 ) ( 441,064 )

CASH FLOWS FROM FINANCING ACTIVITIES:

9 unchanged sentences

( 7,380 ) ( 3,458 ) ( 9,757 )

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

NET CASH PROVIDED BY FINANCING ACTIVITIES

5,645,103 1,483,261 396,131

23 unchanged sentences

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 December 31, 2024 , the Company issued a total of 19,842,089 shares under the June 2024 Equity Distribution Agreement for aggregate gross proceeds of approximately $ 164.9 million, and net proceeds of approximately $ 162.1 million, after commissions and fees.

Subsequent to December 31, 2024 , the Company issued a total of 10,671,164 shares under the June 2024 Equity Distribution Agreement for aggregate gross proceeds of approximately $ 85.1 million, and net proceeds of approximately $ 83.8 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 gross proceeds from the sales 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 could offer and sell, from time to time, up to an aggregate amount of $ 350,000,000 of gross proceeds from the sales of shares of the Company’s common stock in transactions that are deemed to be “at the market” offerings and privately negotiated transactions.

On July 28, 2025, the February 2025 Equity Distribution Agreement was amended to increase the aggregate amount of gross proceeds from the sales of shares that may be offered by $ 150,000,000 to a total of $ 500,000,000 .

The Company issued a total of 59,492,504 shares under the February 2025 Equity Distribution Agreement for aggregate gross proceeds of approximately $ 445.1 million and net proceeds of approximately $ 438.0 million, after commissions and fees, prior to its termination in October 2025.

On October 27, 2025, Orchid entered into an equity distribution agreement (the “October 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 $ 500,000,000 of shares of the Company’s common stock in transactions that are deemed to be “at the market” offerings and privately negotiated transactions.

Through December 31, 2025 , the Company issued a total of 30,265,963 shares under the October 2025 Equity Distribution Agreement for aggregate gross proceeds of approximately $ 223.1 million, and net proceeds of approximately $ 219.7 million, after commissions and fees.

Subsequent to December 31, 2025 , the Company issued a total of 8,707,492 shares under the October 2025 Equity Distribution Agreement for aggregate gross proceeds of approximately $ 66.2 million, and net proceeds of approximately $ 65.2 million, after commissions and fees.

Basis of Presentation and Use of Estimates

70 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"), and 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"), federal funds ("Fed Funds") and ERIS SOFR Swap 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.

1 unchanged sentence

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

The Company enters into short-sales of U.S.

Treasury securities by borrowing the securities under reverse repurchase agreements and selling them into the market.

The Company account for these as securities borrowing transactions and recognize an obligation to return the borrowed securities at fair value on our accompanying balance sheets based on the value of the underlying U.S.

Treasury security as of the reporting date.

Gains and losses associated with U.S.

Treasury security short positions are recognized in gain (loss) on derivative instruments, net in our statements of comprehensive income (loss).

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.

13 unchanged sentences

Repurchase agreements are accounted for as collateralized financing transactions, which are carried at their contractual amounts, including accrued interest, as specified in the respective agreements.

Reverse Repurchase Agreements and Obligations to Return Securities Borrowed under Reverse Repurchase Agreements

The Company borrows securities to cover short sales of U.S.

Treasury securities through reverse repurchase transactions under our master repurchase agreements.

We account for these as securities borrowing transactions and recognize an obligation to return the borrowed securities at fair value on the balance sheet based on the value of the underlying borrowed securities as of the reporting date.

The securities received as collateral in connection with our reverse repurchase agreements mitigate our credit risk exposure to counterparties.

Our reverse repurchase agreements typically have maturities of 30 days or less.

Manager Compensation

22 unchanged sentences

Recent Accounting Pronouncements

In November 2023, the FASB issued ASU No.

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

Improvements to Reportable Segment Disclosures ”.

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.

ASU 2023 - 07 is effective for fiscal years beginning after December 15, 2023, with early adoption allowed.

We adopted this guidance as of January 1, 2024, and the adoption did not have a material impact on our financial statements.

Refer to Note 15, "Segment Information," for new disclosures resulting from the adoption of ASU 2023 - 07.

In November 2024, the FASB issued ASU No.

In November 2024, the Financial Accounting Standards Board ("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.

The amendments in the ASU require disclosures about specific types of expenses included in the expense captions presented on the 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.

6 unchanged sentences

December 31, 2024

Pass-Through RMBS Certificates:

Fixed-rate Mortgages

$ 5,431,274 $ 5,540,596 $ 5,237,812 $ 4,051,145 $ 4,198,424 $ 3,877,082

Total Pass-Through Certificates

Fixed-rate RMBS

$ 10,345,029 $ 10,558,236 $ 10,615,570 $ 5,431,274 $ 5,540,596 $ 5,237,812

Structured RMBS Certificates:

Interest-Only Securities (2)

n/a 17,334 15,308 n/a 19,839 16,572

Inverse Interest-Only Securities (3)

n/a 1,498 190 n/a 1,825 358

Total Structured RMBS Certificates

- 16,103 13,088 - 18,832 15,498

22 unchanged sentences

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

Treasury securities are held primarily to satisfy collateral requirements of its repurchase and derivative counterparties.

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

(in thousands)

2 unchanged sentences

$ 100,136 $ 395 $ - $ 100,531

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

December 31, 2023

Treasury Bill, 1/2/2024 Maturity

Treasury Note, 0.75%, 5/31/2026 Maturity

34,579 23 - 34,602

Treasury Bill, 2/15/2024 Maturity

$ 134,715 $ 418 $ - $ 135,133

Treasury Bill, 4/30/2024 Maturity

December 31, 2024

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

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

2 unchanged sentences

government, the Company has not recorded an allowance for credit losses.

REPURCHASE AGREEMENTS AND REVERSE REPURCHASE AGREEMENTS

Repurchase Agreements

19 unchanged sentences

- 4.66 % 4.56 % 4.76 % 4.66 %

In addition, cash pledged to counterparties as collateral for repurchase agreements was approximately $ 22.8 million as of December 31, 2024 .

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

In addition, cash pledged to counterparties as collateral for repurchase agreements was approximately $ 51.2 million and $ 22.8 million as of December 31, 2025 and 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 December 31, 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 $ 214.3 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 December 31, 2024 and 2023 .

As of December 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 $ 455.6 million.

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

Reverse Repurchase Agreements

As of December 31, 2025 , the Company had $ 128.6 million of reverse repurchase agreements outstanding, for which we had associated obligations to return borrowed securities at fair value of $ 128.7 million.

The Company had no reverse repurchase agreements outstanding as of December 31, 2024.

DERIVATIVE AND OTHER HEDGING INSTRUMENTS

8 unchanged sentences

$ 8,237 $ 4,574

Payer swaptions (long positions)

Derivative assets, at fair value

TBA securities

13 unchanged sentences

Restricted cash

Interest rate swaption contracts

Restricted cash

TBA securities

Other liabilities

( 360 ) ( 4,282 )

Total margin balances on derivative contracts

3 unchanged sentences

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 December 31, 2024 and 2023 .

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

($ in thousands)

8 unchanged sentences

60,000 4.03 % 4.14 % 575

($ in thousands)

December 31, 2023

Expiration Year

Treasury Note Futures Contracts (Short Positions)(2)

March 2024 5-year T-Note futures (Mar 2024 - Mar 2029 Hedge Period)

$ 421,500 4.36 % 4.04 % $ ( 9,936 )

March 2024 10-year Ultra futures (Mar 2024 - Mar 2034 Hedge Period)

320,000 4.38 % 4.39 % ( 11,393 )

SOFR Futures Contracts (Short Positions)

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

$ 97,500 3.73 % 3.69 % $ ( 44 )

June 2026 3-Month SOFR futures (Mar 2026 - Jun 2026 Hedge Period)

8 unchanged sentences

97,500 3.21 % 3.11 % ( 90 )

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

ERIS SOFR Swap Futures Contracts (Short Positions) (3)

March 2026 5-Year Term, 3.75% fixed rate (Mar 2026 - Mar 2031 Hedge Period)

$ 10,000 3.48 % 3.45 % $ ( 13 )

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

($ in thousands)

December 31, 2024

Expiration Year

Treasury Note Futures Contracts (Short Positions)(2)

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

$ 312,500 4.22 % 4.37 % $ 1,890

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

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

93,500 4.30 % 4.49 % 1,119

March 2024 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.

5 -Year T-Note futures contracts were valued at a price of $ 106.30 at December 31, 2024 and $ 108.77 at December 31, 2023 .

The contract values of the short positions were $ 332.2 million and $ 458.5 million at December 31, 2024 and 2023 , respectively.

10 -Year T-Note futures contracts were valued at a price of $ 108.75 , with a contract value of the short positions of $ 101.7 million at December 31, 2024 .

10 -Year Ultra futures contracts were valued at price of $ 111.31 at December 31, 2024 and $ 112.89 at December 31, 2023 .

The contract value of the short positions was $ 36.2 million and $ 361.3 million at December 31, 2024 and 2023 , respectively.

5 -Year T-Note futures contracts were valued at a price of $ 109.30 as of December 31, 2025 and $ 106.30 as of December 31, 2024 .

The contract values of the short positions were $ 133.9 million and $ 332.2 million as of December 31, 2025 and 2024 , respectively.

10 -Year T-Note futures contracts were valued at a price of $ 112.44 as of December 31, 2025 and $ 108.75 as of December 31, 2024 ..

The contract values of the short positions were $ 101.2 million and $ 101.7 million as of December 31, 2025 and 2024 , respectively.

10 -Year Ultra futures contracts were valued at price of $ 115.02 as of December 31, 2025 and $ 111.31 as of December 31, 2024 .

The contract value of the short positions was $ 69.0 million and $ 36.2 million as of December 31, 2025 and 2024 , respectively.

( 3 ) ERIS swap futures are exchange traded futures that replicate the cash flows of an underlying swap position.

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 December 31, 2024 and 2023 .

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

($ in thousands)

15 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 interest rate swaption position at December 31, 2023.

($ in thousands)

Underlying Swap

December 31, 2023

Payer Swaptions (long positions)

$ 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 December 31, 2025 and 2024 .

($ in thousands)

Long (Short)(1)

December 31, 2025

4 unchanged sentences

- 34 - ( 34 )

- ( 215 ) - 215

- 218 - ( 218 )

( 275,000 ) ( 277,696 ) ( 278,996 ) ( 1,300 )

( 155,000 ) ( 161,103 ) ( 161,127 ) ( 24 )

$ ( 180,000 ) $ ( 189,107 ) $ ( 189,937 ) $ ( 830 )

December 31, 2024

1 unchanged sentence

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

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

30-Year TBA securities:

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

4 unchanged sentences

Net carrying value represents the difference between the market value and the cost basis of the TBA securities as of period-end and is reported in derivative assets (liabilities), at fair value in the balance sheets.

( 5 ) The Company has entered into offsetting long and short positions for these coupons.

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

8 unchanged sentences

Payer swaptions (short positions)

- 4,113 ( 81,050 )

Interest rate caps

- ( 219 ) 919

Dual digital option

5 unchanged sentences

1,687 ( 230 ) ( 4,860 )

Treasury securities (short positions)

$ ( 122,669 ) $ 133,554 $ 45,237

30 unchanged sentences

December 31, 2025

$ 12,549 $ - $ 360 $ 12,909

Treasury securities - fair value

- 128,724 - 128,724

$ 12,549 $ 128,724 $ 360 $ 141,633

December 31, 2024

Assets Pledged to Orchid

$ 4,465 $ - $ 4,282 $ 8,747

21 unchanged sentences

1,015 - 1,015 - ( 360 ) 655

Reverse repurchase agreements

128,613 - 128,613 ( 128,613 ) - -

$ 137,865 $ - $ 137,865 $ ( 128,613 ) $ ( 360 ) $ 8,892

December 31, 2024

1 unchanged sentence

$ 4,574 $ - $ 4,574 $ - $ - $ 4,574

Interest rate swaptions

TBA securities

4,703 - 4,703 - ( 4,282 ) 421

51 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.

1 unchanged sentence

As of December 31, 2025 , the Company had entered into twelve equity distribution agreements, eleven of which have either been terminated because all shares were sold or were replaced with a subsequent agreement.

Increase in Authorized Shares

On February 14, 2025, the Company amended its charter, increasing the number of shares authorized to 220,000,000 , consisting of 200,000,000 shares of Common Stock, $ 0.01 par value per share, and 20,000,000 shares of Preferred Stock, $ 0.01 value per share.

The aggregate par value of all authorized shares of stock having par value is $ 2,200,000 .

Stock Repurchase Program

7 unchanged sentences

The timing, manner, price and amount of any repurchases will be determined by the Company in its discretion and will be subject to economic and market conditions, stock price, applicable legal requirements and other factors.

The authorization does not obligate the Company to acquire any particular amount of common stock and the program may be suspended or discontinued at the Company’s discretion without prior notice.

The stock repurchase program has no termination date.

The authorization does not obligate the Company to acquire any particular amount of common stock.

The stock repurchase program may be suspended or discontinued at the Company’s discretion without prior notice and has no termination date.

From the inception of the stock repurchase program through December 31, 2025 , the Company repurchased a total of 6,257,826 shares at an aggregate cost of approximately $ 84.8 million, including commissions and fees, for a weighted average price of $ 13.55 per share.

9 unchanged sentences

1.440 190,930

$ 69.570 $ 940,793

On January 7, 2026 , the Company declared a dividend of $ 0.12 per share to be paid on February 26, 2026 .

32 unchanged sentences

Weighted-average remaining vesting term (in years)

The number of shares of common stock issuable upon the vesting of the remaining outstanding PUs as of December 31, 2023 was reduced by 14,365 shares as a result of a book value impairment event that occurred pursuant to the terms of the long term equity incentive compensation plans (the “Plans”) established under the Company’s Incentive Plans.

( 1 ) During 2025, a participant's service as an employee of the Manager ended resulting in the forfeiture of 2,393 PUs as provided in the Plans (as defined below).

( 2 ) During 2024, the number of shares of common stock issuable upon the vesting of the remaining outstanding PUs as of December 31, 2023 was reduced by 14,365 shares as a result of a book value impairment event that occurred pursuant to the terms of the long term equity incentive compensation plans (the “Plans”) established under the Company’s Incentive Plans.

The book value impairment event occurred when the Company's book value per share declined by more than 15 % during the quarter ended September 30, 2023 and the Company’s book value per share decline from July 1, 2023 to December 31, 2023 was more than 10 %.

15 unchanged sentences

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.

16 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 December 31, 2024 .

Management is not aware of any reported or unreported contingencies as of December 31, 2025 .

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

1 unchanged sentence

A REIT must generally distribute at least 90% of its REIT taxable income, determined without regard to the deductions for dividends paid and excluding net capital gain, to its stockholders annually to maintain REIT status.

An amount equal to the sum of 85% of its REIT ordinary income and 95% of its REIT capital gain net income, plus certain undistributed income from prior taxable years, must be distributed within the taxable year in order to avoid the imposition of an excise tax.

The remaining balance may be distributed up to the end of the following taxable year, provided the REIT elects to treat such amount as a prior year distribution and meets certain other requirements.

46 unchanged sentences

The Company’s U.S.

Treasury securities are based on quoted prices for identical instruments in active markets and are classified as Level 1 assets.

Treasury securities that are based on quoted prices for identical instruments in active markets are classified as Level 1 assets.

treasury securities are considered Level 2 investments when they were issued before the most recent issue and were still outstanding at measurement day.

The Company’s futures contracts are Level 1 valuations, as they are exchange-traded instruments and quoted market prices are readily available.

19 unchanged sentences

TBA securities

Obligation to return securities borrowed under reverse repurchase agreements

- ( 128,724 ) -

December 31, 2024

3 unchanged sentences

Interest rate swaps

Interest rate swaptions

TBA securities

- ( 12,694 ) -

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

25 unchanged sentences

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 evaluates company-wide performance based on multiple performance measures.

The primary measure of segment performance is net income.

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

2 unchanged sentences

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.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

1 unchanged sentence

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-K

Item 8. Financial Statements and Supplementary Data