orc20230606_8k.htm
false 0001518621 0001518621 2023-06-14 2023-06-14
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): June 14, 2023
 
Orchid Island Capital, Inc.
(Exact Name of Registrant as Specified in Charter)
 
Maryland
001-35236
27-3269228
(State or Other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)
 
3305 Flamingo Drive, Vero Beach, Florida 32963
(Address of Principal Executive Offices) (Zip Code)
 
Registrant’s telephone number, including area code (772) 231-1400
 
N/A
(Former Name or Former Address, if Changed Since Last Report)
 
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class:
Trading symbol:         
Name of each exchange on which registered:
Common Stock, par value $0.01 per share
ORC
NYSE
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
 

 
 
Item 5.07.     Submission of Matters to a Vote of Security Holders.
 
At the 2023 Annual Meeting of Stockholders (the “Annual Meeting”) of Orchid Island Capital, Inc. (the “Company”), the Company’s stockholders voted on the following matters: (i) the election of the six nominated directors to the Company’s board of directors (the “Board”), (ii) the ratification of the appointment of BDO USA, LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2023 and (iii) the approval, on an advisory basis, of the compensation of the Company’s named executive officers. As of April 14, 2023, the record date for the Annual Meeting, there were 39,134,901 shares of the Company’s common stock, par value $0.01 per share (“Common Stock”) outstanding and entitled to vote.
 
The full results of the matters voted on at the Annual Meeting are set forth below:
 
Proposal 1—Election of Directors. The following nominees were elected to our Board to serve until the next annual meeting of the Company’s stockholders or until his or her successor is elected and qualified: Robert E. Cauley, George H. Haas, IV, W Coleman Bitting, Frank P. Filipps, Paula Morabito and Ava L. Parker.
 
 
Nominee for Director
 
For
 
Against
 
Abstain
 
Broker Non-Votes
Robert E. Cauley
 
11,872,647
 
647,251
 
225,158
 
11,479,669
George H. Haas, IV
 
11,271,041
 
1,284,181
 
189,834
 
11,479,669
W Coleman Bitting
 
11,880,101
 
666,639
 
198,316
 
11,479,669
Frank P. Filipps
 
11,859,116
 
697,751
 
188,189
 
11,479,669
Paula Morabito
 
11,858,866
 
698,718
 
187,472
 
11,479,669
Ava L. Parker
 
11,873,615
 
684,233
 
187,208
 
11,479,669
 
Proposal 2—Ratification of Appointment of Independent Registered Public Accounting Firm. This proposal was ratified upon the following vote.
 
For
 
Against
 
Abstain
 
Broker Non-Votes
22,896,594
 
685,849
 
642,282
 
N/A
 
Proposal 3—Advisory Vote on Named Executive Officer Compensation. This advisory vote was approved upon the following vote.
 
For
 
Against
 
Abstain
 
Broker Non-Votes
10,828,777
 
1,501,445
 
414,834
 
11,479,669
 
Item 8.01. Other Events.
 
On June 14, 2023, the Company announced that the Board declared a dividend for the month of June 2023 of $0.16 per share of Common Stock, to be paid on July 27, 2023 to holders of record on June 30, 2023, with an ex-dividend date of June 29, 2023. In addition, the Company announced certain details of its RMBS portfolio as of May 31, 2023 as well as certain other information regarding the Company. A copy of the Company’s press release announcing the dividend and the other information regarding the Company is attached hereto as Exhibit 99.1 and incorporated herein by this reference.
 
Caution About Forward-Looking Statements.
 
This Current Report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws, including, but not limited to, statements about the Company’s distributions. These forward-looking statements are based upon the Company’s present expectations, but the Company cannot assure investors that actual results will not vary from the expectations contained in the forward-looking statements. Investors should not place undue reliance upon forward looking statements. For further discussion of the factors that could affect outcomes, please refer to the “Risk Factors” section of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022. All forward-looking statements speak only as of the date on which they are made. New risks and uncertainties arise over time, and it is not possible to predict those events or how they may affect the Company. Except as required by law, the Company is not obligated to, and does not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
 
 

 
Item 9.01. Financial Statements and Exhibits.
 
(d) Exhibits
 
Exhibit No.
 
Description
  Press Release dated  June 14, 2023
104
 
Cover Page Interactive Data File (embedded within the Inline XBRL document)
 
 

 
 
Signatures
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Date: June 14, 2023
 
ORCHID ISLAND CAPITAL, INC.
   
   
 
By:
/s/ Robert E. Cauley
   
Robert E. Cauley
   
Chairman and Chief Executive Officer
 
 
ex_530319.htm

 

 

ORCHID ISLAND CAPITAL ANNOUNCES

JUNE 2023 MONTHLY DIVIDEND AND

MAY 31, 2023 RMBS PORTFOLIO CHARACTERISTICS

 

 

June 2023 Monthly Dividend of $0.16 Per Share of Common Stock

 

RMBS Portfolio Characteristics as of May 31, 2023

 

Next Dividend Announcement Expected July 12, 2023 

 

Vero Beach, Fla., June 14, 2023 - Orchid Island Capital, Inc. (the “Company”) (NYSE: ORC) announced today that the Board of Directors of the Company declared a monthly cash dividend for the month of June 2023. The dividend of $0.16 per share will be paid July 27, 2023 to holders of record of the Company’s common stock on June 30, 2023, with an ex-dividend date of June 29, 2023. The Company plans on announcing its next common stock dividend on July 12, 2023.

 

The Company intends to make regular monthly cash distributions to its holders of common stock. In order to qualify as a real estate investment trust (“REIT”), the Company must distribute annually to its stockholders an amount at least equal to 90% of its REIT taxable income, determined without regard to the deduction for dividends paid and excluding any net capital gain. The Company will be subject to income tax on taxable income that is not distributed and to an excise tax to the extent that a certain percentage of its taxable income is not distributed by specified dates. The Company has not established a minimum distribution payment level and is not assured of its ability to make distributions to stockholders in the future.

 

As of June 14, 2023, the Company had 42,036,854 shares of common stock outstanding. As of May 31, 2023, the Company had 39,371,053 shares of common stock outstanding. As of March 31, 2023, the Company had 39,085,756 shares of common stock outstanding.

 

RMBS Portfolio Characteristics

 

Details of the RMBS portfolio as of May 31, 2023 are presented below. These figures are preliminary and subject to change. The information contained herein is an intra-quarter update created by the Company based upon information that the Company believes is accurate:

 

 

RMBS Valuation Characteristics

 

RMBS Assets by Agency

 

Investment Company Act of 1940 (Whole Pool) Test Results

 

Repurchase Agreement Exposure by Counterparty

 

RMBS Risk Measures

 

About Orchid Island Capital, Inc.

 

Orchid Island Capital, Inc. is a specialty finance company that invests on a leveraged basis in Agency RMBS. Our investment strategy focuses on, and our portfolio consists of, two categories of Agency RMBS: (i) traditional pass-through Agency RMBS, such as mortgage pass-through certificates and collateralized mortgage obligations issued by Fannie Mae, Freddie Mac or Ginnie Mae, and (ii) structured Agency RMBS. The Company is managed by Bimini Advisors, LLC, a registered investment adviser with the Securities and Exchange Commission.

 

Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements include, but are not limited to, statements about the Company’s distributions. These forward-looking statements are based upon Orchid Island Capital, Inc.’s present expectations, but these statements are not guaranteed to occur. Investors should not place undue reliance upon forward-looking statements. For further discussion of the factors that could affect outcomes, please refer to the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

 

 

 

RMBS Valuation Characteristics

 

($ in thousands)

                                                                                           
                                                                         

Realized

             
                                                                   

Realized

   

Mar 23 -

             
                                                                    May-23     May-23              
                                   

Net

                   

Weighted

   

CPR

   

CPR

             
                                    Weighted                     Average     (1-Month)     (3-Month)     Modeled Interest  
   

Current

   

Fair

   

% of

   

Current

   

Average

                   

Maturity

   

(Reported

   

(Reported

   

Rate Sensitivity (1)

 

Type

 

Face

   

Value

   

Portfolio

   

Price

   

Coupon

   

GWAC

   

Age

   

(Months)

   

in June)

   

in June)

   

(-50 BPS)

   

(+50 BPS)

 

Fixed Rate RMBS

                                                                                               

15yr 4.0

  $ 385     $ 378       0.01 %   $ 98.11       4.00 %     4.54 %     61       118       0.8 %     0.8 %   $ 6     $ (6 )

15yr Total

    385       378       0.01 %     98.11       4.00 %     4.54 %     61       118       0.8 %     0.8 %     6       (6 )

30yr 3.0

    2,491,193       2,225,540       56.94 %     89.34       3.00 %     3.44 %     25       331       5.7 %     4.5 %     73,146       (74,378 )

30yr 3.5

    205,664       192,340       4.92 %     93.52       3.50 %     4.03 %     39       311       7.5 %     8.1 %     5,449       (5,498 )

30yr 4.0

    586,559       555,714       14.22 %     94.74       4.00 %     4.78 %     16       342       9.6 %     6.1 %     14,160       (15,276 )

30yr 4.5

    358,032       347,112       8.88 %     96.95       4.50 %     5.45 %     11       348       5.1 %     6.0 %     6,753       (7,656 )

30yr 5.0

    575,409       568,297       14.54 %     98.76       5.00 %     5.93 %     9       350       3.3 %     5.3 %     10,124       (11,857 )

30yr Total

    4,216,857       3,889,003       99.50 %     92.23       3.56 %     4.16 %     21       335       6.0 %     5.1 %     109,632       (114,665 )

Total Pass Through RMBS

    4,217,242       3,889,381       99.51 %     92.23       3.56 %     4.16 %     21       335       6.0 %     5.1 %     109,638       (114,672 )

Structured RMBS

                                                                                               

IO 20yr 4.0

    9,851       1,074       0.03 %     10.90       4.00 %     4.57 %     137       96       10.5 %     10.7 %     6       (7 )

IO 30yr 3.0

    3,086       376       0.01 %     12.19       3.00 %     3.64 %     100       249       0.7 %     0.8 %     2       (3 )

IO 30yr 4.0

    87,328       16,192       0.41 %     18.54       4.00 %     4.60 %     105       246       8.2 %     7.1 %     (335 )     236  

IO 30yr 4.5

    3,736       700       0.02 %     18.75       4.50 %     4.99 %     155       191       5.3 %     7.2 %     (6 )     2  

IO 30yr 5.0

    2,052       409       0.01 %     19.95       5.00 %     5.36 %     155       193       13.8 %     16.5 %     (7 )     4  

IO Total

    106,053       18,751       0.48 %     17.68       4.01 %     4.60 %     111       229       8.2 %     7.4 %     (339 )     233  

IIO 30yr 4.0

    29,644       451       0.01 %     1.52       0.00 %     4.40 %     68       281       3.5 %     3.5 %     104       (91 )

Total Structured RMBS

    135,697       19,202       0.49 %     14.15       3.13 %     4.55 %     102       241       7.2 %     6.6 %     (236 )     142  
                                                                                                 

Total Mortgage Assets

  $ 4,352,939     $ 3,908,583       100.00 %             3.55 %     4.18 %     24       333       6.0 %     5.2 %   $ 109,403     $ (114,530 )

 

   

Average

 

Hedge

 

Modeled Interest

 
   

Notional

 

Period

 

Rate Sensitivity (1)

 

Hedge

 

Balance

 

End

 

(-50 BPS)

   

(+50 BPS)

 

5-Year Treasury Future(2)

  $ (471,500 )

Sep-23

  $ (9,873 )   $ 9,725  

10-Year Treasury Future(3)

    (95,000 )

Sep-23

    (3,176 )     3,116  

10-Year Ultra Treasury Future(4)

    (154,200 )

Sep-23

    (7,538 )     7,174  

Swaps

    (1,879,000 )

Jun-29

    (47,499 )     45,752  

TBA

    (700,000 )

Jun-23

    (20,050 )     20,868  

Swaptions

    (533,000 )

Aug-24

    (4,227 )     6,869  

Hedge Total

  $ (3,832,700 )     $ (92,363 )   $ 93,504  

Rate Shock Grand Total

            $ 17,040     $ (21,026 )

 

(1)

Modeled results from Citigroup Global Markets Inc. Yield Book. Interest rate shocks assume instantaneous parallel shifts and horizon prices are calculated assuming constant LIBOR option-adjusted spreads. These results are for illustrative purposes only and actual results may differ materially.

(2)

Five-year Treasury futures contracts were valued at prices of $109.08 at May 31, 2023. The market value of the short position was $514.3 million.

(3) Ten-year Treasury futures contracts were valued at prices of $114.47 at May 31, 2023. The market value of the short position was $108.8 million.

(4)

Ten-year Ultra Treasury futures contracts were valued at prices of $120.45 at May 31, 2023. The market value of the short position was $185.7 million.

 

 

 

 

RMBS Assets by Agency

               

($ in thousands)

               
           

Percentage

 
   

Fair

   

of

 

Asset Category

 

Value

   

Portfolio

 

As of May 31, 2023

               

Fannie Mae

  $ 2,568,837       65.7 %

Freddie Mac

    1,339,746       34.3 %

Total Mortgage Assets

  $ 3,908,583       100.0 %

 

 

Investment Company Act of 1940 Whole Pool Test

 

($ in thousands)

               
           

Percentage

 
   

Fair

   

of

 

Asset Category

 

Value

   

Portfolio

 

As of May 31, 2023

               

Non-Whole Pool Assets

  $ 151,156       3.9 %

Whole Pool Assets

    3,757,427       96.1 %

Total Mortgage Assets

  $ 3,908,583       100.0 %

 

Borrowings By Counterparty

                                 

($ in thousands)

                                 
                   

Weighted

   

Weighted

   
           

% of

   

Average

   

Average

   
   

Total

   

Total

   

Repo

   

Maturity

 

Longest

As of May 31, 2023

 

Borrowings

   

Debt

   

Rate

   

in Days

 

Maturity

J.P. Morgan Securities LLC

  $ 346,217       9.3 %     5.17 %     15  

7/24/2023

Merrill Lynch, Pierce, Fenner & Smith

    329,566       8.8 %     5.20 %     14  

6/27/2023

RBC Capital Markets, LLC

    315,578       8.5 %     5.19 %     45  

7/17/2023

Mirae Asset Securities (USA) Inc.

    302,785 (1)     8.1 %     5.21 %     61  

9/1/2023

Daiwa Securities America Inc.

    249,655       6.7 %     5.14 %     16  

6/16/2023

Marex Capital Markets Inc.

    234,631       6.3 %     5.18 %     12  

6/28/2023

ING Financial Markets LLC

    232,481       6.2 %     5.20 %     15  

6/15/2023

Cantor Fitzgerald & Co

    223,843       6.0 %     5.20 %     17  

7/13/2023

ABN AMRO Bank N.V.

    220,568       5.9 %     5.12 %     13  

6/13/2023

ASL Capital Markets Inc.

    210,573       5.6 %     5.19 %     16  

6/16/2023

Citigroup Global Markets Inc

    184,408       4.9 %     5.28 %     28  

6/30/2023

StoneX Financial Inc.

    179,020       4.8 %     5.20 %     7  

6/9/2023

Mitsubishi UFJ Securities (USA), Inc

    168,879       4.5 %     5.28 %     19  

6/21/2023

Wells Fargo Bank, N.A.

    164,094       4.4 %     5.17 %     7  

6/9/2023

Goldman, Sachs & Co

    124,645       3.3 %     5.24 %     11  

6/23/2023

Banco Santander SA

    113,151       3.0 %     5.27 %     23  

6/23/2023

Bank of Montreal

    75,710       2.0 %     5.21 %     15  

6/15/2023

South Street Securities, LLC

    37,163       1.0 %     5.14 %     16  

6/16/2023

Lucid Cash Fund USG LLC

    11,382       0.3 %     5.18 %     15  

6/15/2023

Lucid Prime Fund, LLC

    9,371       0.3 %     5.18 %     15  

6/15/2023

Total Borrowings

  $ 3,733,720       100.0 %     5.19 %     21  

9/1/2023

 

(1) Included in this balance is $254.1 million of floating rate repurchase agreements priced at overnight SOFR + 15 basis points.

 

 

Contact:

 

Orchid Island Capital, Inc.

Robert E. Cauley

3305 Flamingo Drive, Vero Beach, Florida 32963

Telephone: (772) 231-1400