orc8k20140611.htm



 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 11, 2014
 
Orchid Island Capital, Inc.
(Exact name of Registrant as specified in its charter)
 

 
 
 
Maryland
 
001-35236
 
27-3269228
(State or Other Jurisdiction
of Incorporation or Organization)
 
(Commission File Number)
 
(I.R.S. Employer Identification No.)
 
3305 Flamingo Drive, Vero Beach, Florida 3296
(Address of principal executive offices) (Zip code)
 
(772) 231-1400
(Registrant’s telephone number including area code)

Not Applicable
(Former name or former address, if changed from 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 5.07.                      Submission of Matters to a Vote of Security Holders.
 
 
At the annual meeting of stockholders of Orchid Island Capital, Inc. (the “Company”) held on June 11, 2014 (the “Annual Meeting”), the stockholders voted on the following matters: (i) the election of the six nominated directors, (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, 2014, (iii) the approval, on an advisory basis, of the compensation of the Company’s named executive officers, and (iv) the approval, on an advisory basis, of the frequency of future stockholder advisory votes about our executive compensation.  As of April 28, 2014, the record date for the annual meeting of stockholders, there were 9,091,665 shares of common stock outstanding and entitled to vote.
 
 
The full results of the matters voted on at the annual meeting of stockholders 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, G. Hunter Haas, IV, W Coleman Bitting, John B. Van Heuvelen, Frank P. Filipps and Ava L. Parker.
 
Nominees for Director
 
For
   
Against
   
Abstain
   
Broker Non-Votes
 
Robert E. Cauley
    2,522,454       51,513       56,103       4,904,720  
G. Hunter Haas, IV
    2,518,868       54,299       56,603       4,904,720  
W Coleman Bitting
    2,520,593       52,874       56,603       4,904,720  
John B. Van Heuvelen
    2,518,690       53,427       57,953       4,904,720  
Frank P. Filipps
    2,523,379       50,488       56,203       4,904,720  
Ava L. Parker
    2,520,644       52,323       57,103       4,904,720  

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
7,436,781
 
52,481
 
45,528
 
*

___________
 
*
No broker non-votes arose in connection with Proposal 2 due to the fact that the matter was considered “routine” under New York Stock Exchange rules.
 
 
Proposal 3 — Advisory Vote on Named Executive Officer Compensation. This advisory vote was approved upon the following vote.
 
For
 
Against
 
Abstain
 
Broker Non-Votes
2,341,106
 
185,964
 
103,000
 
4,904,720
 
Proposal 4 — Advisory Vote on the Frequency of Future Advisory Votes on Named Executive Officer Compensation.  The stockholders recommended, on an advisory basis, that future votes on named executive officer compensation be conducted every three years.
 
1 Year
 
2 Years
 
3 Years
 
Abstain
591,193
 
104,338
 
1,785,833
 
148,706
In view of these voting results and in accordance with the Board of Director’s recommendation, the Board of Directors has determined that an advisory vote on named executive officer compensation will be submitted to stockholders every three years until the next required advisory vote on the frequency of future advisory votes on named executive officer compensation.

 
 

 

 
Item 8.01.                      Other Events.
 
On June 11, 2014, the Company announced that on June 11, 2014 the Board of Directors of the Company declared a dividend for the month of June 2014 of $0.18 per share to be paid on June 30, 2014 to holders of record on June 25, 2014 with an ex-dividend date of June 23, 2014.  In addition, the Company announced certain details of its MBS portfolio as of May 30, 2014 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. These forward looking statements are based upon the Company’s present expectations, but the Company cannot assure you 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 Form 10-K for the year ended December 31, 2013.  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
 
99.1
 
Press Release dated June 11, 2014
 

 

 
 

 

SIGNATURE

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.

 
ORCHID ISLAND CAPITAL, INC.
 
Date:  June 11, 2014
 
By:          /s/ Robert E. Cauley                                                         
Name:     Robert E. Cauley
Title:       Chairman and Chief Executive Officer

 
 

 

INDEX TO EXHIBITS

     
 
Exhibit No.
 
Description
99.1
 
Press Release dated June 11, 2014

orc8k20140611x991.htm
EXHIBIT 99.1
 
 
ORCHID ISLAND CAPITAL ANNOUNCES
JUNE 2014 MONTHLY DIVIDEND AND
MAY 30, 2014 RMBS PORTFOLIO CHARACTERISTICS

·  
June 2014 Monthly Dividend of $0.18 Per Share
·  
RMBS Portfolio Characteristics as of May 30, 2014

Vero Beach, Fla., June 11, 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 June 2014. The dividend of $0.18 per share will be paid June 30, 2014, to holders of record on June 25, 2014, with an ex-dividend date of June 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.

RMBS Portfolio Characteristics

Details of the RMBS portfolio as of May 30, 2014 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 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, 2013.
 
 
 
 

 
 
RMBS Valuation Characteristics
                                   
($ in thousands)
                                   
                     
Percentage
   
Weighted
   
Realized
 
   
Current
   
Fair
   
Current
   
of
   
Average
   
May 2014 CPR
 
Asset Category
 
Face
   
Value
   
Price
   
Portfolio
   
Coupon
   
(Reported in Jun)
 
As of May 30, 2014
                                   
Adjustable Rate RMBS
  $ 4,298     $ 4,676       108.78       0.54 %     4.10 %     0.19 %
10-1 Hybrid Rate RMBS
    75,342       76,043       100.93       8.77 %     2.55 %     9.20 %
Hybrid Adjustable Rate RMBS
    75,342       76,043       100.93       8.77 %     2.55 %     9.20 %
15 Year Fixed Rate RMBS
    83,693       88,459       105.70       10.20 %     3.40 %     4.24 %
20 Year Fixed Rate RMBS
    124,241       132,504       106.65       15.27 %     3.93 %     3.59 %
30 Year Fixed Rate RMBS
    476,609       521,585       109.44       60.12 %     4.56 %     4.41 %
Total Fixed Rate RMBS
    684,543       742,548       108.47       85.59 %     4.31 %     4.25 %
Total Pass-through RMBS
    764,183       823,267       107.73       94.90 %     4.15 %     4.78 %
Interest-Only Securities
    264,077       34,392       13.02       3.96 %     4.31 %     16.21 %
Inverse Interest-Only Securities
    73,732       9,884       13.41       1.14 %     6.03 %     12.63 %
Structured RMBS
    337,809       44,276       13.11       5.10 %     4.69 %     15.36 %
Total Mortgage Assets
  $ 1,101,992     $ 867,543               100.00 %     4.18 %     8.13 %

 
RMBS Assets by Agency
           
Investment Company Act of 1940 (Whole Pool) Test
 
($ in thousands)
           
($ in thousands)
           
         
Percentage
           
Percentage
 
   
Fair
   
of
     
Fair
   
of
 
Asset Category
 
Value
   
Portfolio
 
Asset Category
 
Value
   
Portfolio
 
As of May 30, 2014
           
As of May 30, 2014
           
Fannie Mae
  $ 536,239       61.8 %
Whole Pool Assets
  $ 730,550       84.2 %
Freddie Mac
    320,072       36.9 %
Non Whole Pool Assets
    136,993       15.8 %
Ginnie Mae
    11,232       1.3 %
Total Mortgage Assets
  $ 867,543       100.0 %
Total Mortgage Assets
  $ 867,543       100.0 %                  

 
Repurchase Agreement Exposure By Counterparty
                   
($ in thousands)
                   
               
Weighted
   
         
% of
   
Average
   
   
Total
   
Total
   
Maturity
 
Longest
As of May 30, 2014
 
Borrowings
   
Debt
   
in Days
 
Maturity
Citigroup Global Markets Inc
  $ 155,346       19.9 %     49  
8/27/2014
Cantor Fitzgerald & Co
    80,710       10.3 %     17  
6/23/2014
KGS-Alpha Capital Markets, L.P
    76,191       9.8 %     38  
10/3/2014
Morgan Stanley & Co
    66,373       8.5 %     81  
8/19/2014
CRT Capital Group, LLC
    64,558       8.3 %     67  
8/25/2014
Mitsubishi UFJ Securities (USA), Inc
    58,841       7.5 %     14  
7/25/2014
Goldman, Sachs & Co
    56,637       7.3 %     56  
7/28/2014
ED&F Man Capital Markets Inc
    53,094       6.8 %     52  
8/1/2014
J.P. Morgan Securities LLC
    48,328       6.2 %     41  
7/11/2014
Mizuho Securities USA, Inc
    41,035       5.3 %     38  
7/10/2014
South Street Securities, LLC
    40,062       5.0 %     17  
6/27/2014
Suntrust Robinson Humphrey, Inc
    39,948       5.1 %     5  
6/6/2014
Total Borrowings
  $ 781,123       100.0 %     42  
10/3/2014
 
 
 
 
 

 
 
 
RMBS Risk Measures
                                   
($ in thousands)
                                   
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)(1)
   
(+50 BPS)(1)
 
As of May 30, 2014
                                   
Adjustable Rate RMBS
  $ 4,676       1       10.16 %     2.00 %   $ 6     $ (14 )
Hybrid Adjustable Rate RMBS
    76,043       105       7.55 %     2.00 %     1,755       (2,157 )
Total Fixed Rate RMBS
    742,548       n/a       n/a       n/a       15,018       (19,996 )
Total Pass-through RMBS
    823,267       n/a       n/a       n/a       16,779       (22,167 )
Interest-Only Securities
    34,392       n/a       n/a       n/a       (6,499 )     6,482  
Inverse Interest-Only Securities
    9,884       1       6.18 %     n/a       (476 )     31  
Structured RMBS
    44,276       n/a       n/a       n/a       (6,975 )     6,513  
Total Mortgage Assets
  $ 867,543       n/a       n/a       n/a     $ 9,804     $ (15,654 )
Funding Hedges
                                               
                                   
Modeled
   
Modeled
 
                                   
Interest
   
Interest
 
                   
Average
   
Hedge
   
Rate
   
Rate
 
                   
Notional
   
Period
   
Sensitivity
   
Sensitivity
 
                   
Balance
   
End Date
   
(-50 BPS)(1)
   
(+50 BPS)(1)
 
Eurodollar Futures Contracts - Short Positions
    $ 500,000    
Dec-2018
    $ (8,525 )   $ 9,883  
Payer Swaption
                    100,000    
Mar-2020
    $ (405 )   $ 883  
Grand Total
                                  $ 874     $ (4,888 )

 
(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 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