orc8k20140109.htm



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):  January 9, 2014

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))


 
 

 


 
ITEM 8.01.  OTHER EVENTS.

On January 9, 2014, Orchid Island Capital, Inc. (the “Company”) announced that on January 9, 2014 the Board of Directors of the Company declared a dividend for the month of January 2014 of $0.18 per share to be paid on January 31, 2014 to holders of record on January 27, 2014 with an ex-dividend date of January 23, 2014.  In addition, the Company announced the details of its MBS portfolio as of December 31, 2013.  A copy of the Company’s press release announcing the dividend and portfolio summary is attached hereto as Exhibit 99.1 and incorporated herein by this reference.

ITEM 9.01  FINANCIAL STATEMENTS AND EXHIBITS.

(d)  Exhibits
     
99.1
Press Release dated January 9, 2014



 
 

 


 

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: January 10, 2014
        ORCHID ISLAND CAPITAL, INC.
 
     
     
 
By:
/s/ Robert E. Cauley   
   
Robert E. Cauley
 
   
Chairman and Chief Executive Officer
 


orc8k20140109x991.htm
EXHIBIT 99.1
 
ORCHID ISLAND CAPITAL ANNOUNCES
JANUARY 2014 MONTHLY DIVIDEND AND
DECEMBER 31, 2013 MBS PORTFOLIO CHARACTERISTICS

·  
January 2014 Monthly Dividend of $0.18 Per Share
·  
Estimated Book Value Per Share at December 31, 2013 of $13.40
·  
MBS Portfolio Characteristics as of December 31, 2013

Vero Beach, Fla., January 9, 2014 - Orchid Island Capital, Inc. (the “Company”) (NYSE MKT:ORC) announced that today the Board of Directors declared a monthly cash dividend for the month of January 2014. The dividend of $0.18 per share will be paid January 31, 2014, to holders of record on January 27, 2014, with an ex-dividend date of January 23, 2014.

The Company intends to make regular monthly cash distributions to its stockholders. 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 certain percentages 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.

Estimated December 31, 2013 Book Value Per Share

The Company’s estimated book value per share as of December 31, 2013 was $13.40.  Book value per share is regularly used as a valuation metric by various equity analysts that follow the Company and may be deemed a non-GAAP financial measure pursuant to Regulation G. The Company computes book value per share by dividing total stockholders' equity by the total number of shares outstanding of the Company's Common Stock. At December 31, 2013, the Company's preliminary estimated total stockholders' equity was approximately $44.8 million with 3,341,665 Common shares outstanding. These figures and the resulting estimated book value per share are preliminary, subject to change, and subject to audit by the Company’s independent registered public accounting firm.

MBS Portfolio Characteristics

Details of the MBS portfolio as of December 31, 2013 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.
 
 
·  
MBS Assets by Agency
·  
Investment Company Act of 1940 Whole Pool Test Results
·  
Repurchase agreement exposure by counterparty
·  
MBS Risk Measures

About Orchid Island Capital, Inc.

Orchid Island Capital, Inc. is a specialty finance company that invests in Agency RMBS that are either traditional pass-through Agency RMBS or structured Agency RMBS. Orchid Island Capital, Inc. intends to elect to be taxed as a real estate investment trust for federal income tax purposes.


 
 

 


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 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 Form 10-K for the year ended December 31, 2012.


MBS Valuation Characteristics
                                   
(in thousands of $s)
                                   
                     
Percentage
   
Weighted
   
Realized
 
   
Current
   
Fair
   
Current
   
of
   
Average
   
Dec 2013 CPR
 
Asset Category
 
Face
   
Value
   
Price
   
Portfolio
   
Coupon
   
(Reported in Jan)
 
As of December 31, 2013
                                   
Adjustable Rate MBS
  $ 4,935     $ 5,334       108.08       1.52 %     3.92 %     0.27 %
10-1 Hybrid Rate MBS
    76,952       76,118       98.92       21.67 %     2.56 %     2.63 %
Hybrid Adjustable Rate MBS
    76,952       76,118       98.92       21.67 %     2.56 %     2.63 %
15 Year Fixed Rate MBS
    21,817       22,284       102.14       6.34 %     3.00 %     1.29 %
20 Year Fixed Rate MBS
    30,743       31,400       102.14       8.94 %     3.50 %     1.78 %
30 Year Fixed Rate MBS
    183,537       191,839       104.52       54.63 %     4.26 %     3.91 %
Total Fixed Rate MBS
    236,097       245,523       103.99       69.91 %     4.05 %     3.39 %
Total Pass-through MBS
    317,984       326,975       102.83       93.10 %     3.70 %     3.16 %
Interest-Only Securities
    128,534       19,206       14.94       5.47 %     4.39 %     20.29 %
Inverse Interest-Only Securities
    37,678       5,042       13.38       1.43 %     5.92 %     12.94 %
Structured MBS
    166,212       24,248       14.59       6.90 %     4.71 %     18.62 %
Total Mortgage Assets
  $ 484,196     $ 351,223       -       100.00 %     3.77 %     8.47 %


MBS Assets by Agency
           
Investment Company Act of 1940 (Whole Pool) Test
 
(in thousands of $s)
           
(in thousands of $s)
           
         
Percentage
           
Percentage
 
   
Fair
   
of
     
Fair
   
of
 
Asset Category
 
Value
   
Portfolio
 
Asset Category
 
Value
   
Portfolio
 
As of December 31, 2013
           
As of December 31, 2013
           
Fannie Mae
  $ 211,063       60.1 %
Whole Pool Assets
  $ 281,088       80.0 %
Freddie Mac
    121,842       34.7 %
Non Whole Pool Assets
    70,135       20.0 %
Ginnie Mae
    18,318       5.2 %
Total Mortgage Assets
  $ 351,223       100.0 %
Total Mortgage Assets
  $ 351,223       100.0 %                  


 
 

 



Repurchase Agreement Exposure By Counterparty
                   
(in thousands of $s)
                   
               
Weighted
   
         
% of
   
Average
   
   
Total
   
Total
   
Maturity
 
Longest
As of December 31, 2013
 
Borrowings
   
Debt
   
in Days
 
Maturity
Citigroup Global Markets Inc
  $ 98,840       31.0 %     11  
1/15/2014
South Street Securities, LLC
    49,411       15.5 %     13  
1/23/2014
Suntrust Robinson Humphrey, Inc
    47,010       14.8 %     10  
1/10/2014
Cantor Fitzgerald & Co
    39,185       12.3 %     22  
1/24/2014
Mizuho Securities USA, Inc
    26,727       8.4 %     9  
1/13/2014
Morgan Stanley & Co
    20,073       6.3 %     13  
1/13/2014
CRT Capital Group, LLC
    15,146       4.8 %     18  
1/24/2014
KGS-Alpha Capital Markets, L.P
    11,894       3.7 %     16  
1/24/2014
Goldman, Sachs & Co
    10,155       3.2 %     70  
3/11/2014
Total Borrowings
  $ 318,441       100.0 %     15  
3/11/2014


MBS Risk Measures
                                   
(in thousands of $s)
                                   
Mortgage Assets
                                   
         
Weighted
                         
         
Average
   
Weighted
   
Weighted
   
Modeled
   
Modeled
 
         
Months
   
Average
   
Average
   
Interest
   
Interest
 
         
To Next
   
Lifetime
   
Periodic
   
Rate
   
Rate
 
   
Fair
   
Coupon Reset
   
Cap
   
Cap Per Year
   
Sensitivity
   
Sensitivity
 
Asset Category
 
Value
   
(if applicable)
   
(if applicable)
   
(if applicable)
   
(-50 BPS)*
   
(+50 BPS)*
 
As of December 31, 2013
                                   
Adjustable Rate MBS
  $ 5,334       4       10.13 %     2.00 %   $ 13     $ (22 )
Hybrid Adjustable Rate MBS
    76,118       108       7.56 %     2.00 %     2,157       (2,444 )
Total Fixed Rate MBS
    245,523       n/a       n/a       n/a       6,385       (7,646 )
Total Pass-through MBS
    326,975       n/a       n/a       n/a       8,555       (10,112 )
Interest-Only Securities
    19,206       n/a       n/a       n/a       (2,950 )     2,070  
Inverse Interest-Only Securities
    5,042       2       6.08 %     n/a       183       (240 )
Structured MBS
    24,248       n/a       n/a       n/a       (2,767 )     1,830  
Total Mortgage Assets
  $ 351,223       n/a       n/a       n/a     $ 5,788     $ (8,282 )
Funding Hedges
                                               
                                   
Modeled
   
Modeled
 
                                   
Interest
   
Interest
 
                   
Average
   
Hedge
   
Rate
   
Rate
 
                   
Notional
   
Period
   
Sensitivity
   
Sensitivity
 
                   
Balance
   
End Date
   
(-50 BPS)*
   
(+50 BPS)*
 
Eurodollar Futures Contracts - Short Positions
    $ 257,353    
Dec-2018
    $ (4,816 )   $ 5,469  
Grand Total
                                  $ 972     $ (2,813 )

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


 
 

 


Contact:

Orchid Island Capital, Inc.
Robert E. Cauley
3305 Flamingo Drive, Vero Beach, Florida 32963
Telephone: (772) 231-1400