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 16, 2020
 
Orchid Island Capital, Inc.
(Exact name of registrant as specified in its 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 annual meeting of stockholders of Orchid Island Capital, Inc. (the “Company”) held on June 16, 2020 (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, 2020, (iii) the approval, on an advisory basis, of the compensation of the Company’s named executive officers and (iv) the recommendation, on an advisory basis, of the frequency of future advisory votes on the compensation of the Company’s named executive officers. As of April 14, 2020, the record date for the Annual Meeting, there were 66,236,639 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, 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 
   
25,520,718
     
1,138,300
     
337,017
     
27,272,791
 
George H. Haas, IV 
   
24,614,809
     
2,028,894
     
352,332
     
27,272,791
 
W Coleman Bitting 
   
25,548,038
     
1,084,019
     
363,978
     
27,272,791
 
Frank P. Filipps 
   
25,550,922
     
1,093,638
     
351,475
     
27,272,791
 
Paula Morabito 
   
25,568,999
     
1,095,856
     
331,180
     
27,272,791
 
Ava L. Parker 
   
25,557,241
     
1,084,180
     
354,614
     
27,272,791
 
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
51,470,494
1,762,044
1,036,288
*
 
*
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
23,743,039
2,427,510
825,486
27,272,791

 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 year.
One Year
Two Years
Three Years
Abstain
23,435,474
550,862
2,292,574
717,125
 In view of these voting results and in accordance with the Board of Directors’ recommendation, the Board of Directors has determined that an advisory vote on named executive officer compensation will be submitted to stockholders every year 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 16, 2020, the Company announced that the Board of Directors of the Company declared a dividend for the month of June 2020 of $0.055 per share to be paid on July 29, 2020 to holders of record on June 30, 2020, with an ex-dividend date of June 29, 2020. In addition, the Company announced certain details of its RMBS portfolio as of May 31, 2020 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 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 Form 10-K for the year ended December 31, 2019.  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


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 16, 2020
        ORCHID ISLAND CAPITAL, INC.
 
 
 
 
 
 
 
 
By:
/s/ Robert E. Cauley
 
 
 
Robert E. Cauley
 
 
 
Chairman and Chief Executive Officer
 

EXHIBIT 99.1


ORCHID ISLAND CAPITAL ANNOUNCES
JUNE 2020 MONTHLY DIVIDEND AND
MAY 31, 2020 RMBS PORTFOLIO CHARACTERISTICS

June 2020 Monthly Dividend of $0.055 Per Share of Common Stock
RMBS Portfolio Characteristics as of May 31, 2020
Next Dividend Announcement Expected July 15, 2020

Vero Beach, Fla., June 16, 2020 - Orchid Island Capital, Inc. (the “Company”) (NYSE:ORC) announced today that the Board of Directors (the “Board”) declared a monthly cash dividend for the month of June 2020. The dividend of $0.055 per share will be paid July 29, 2020, to holders of record of the Company’s common stock on June 30, 2020, with an ex-dividend date of June 29, 2020.  The Company plans on announcing its next common stock dividend after the Board’s meeting on July 15, 2020.

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 16, 2020 and May 31, 2020 the Company had 66,216,748 shares of common stock outstanding.  As of March 31, 2020, the Company had 66,236,639 shares of common stock outstanding.

Estimated June 12, 2020 Book Value Per Share

The estimated range of the Company’s book value per share as of June 12, 2020 was $5.30 and $5.40.  The Company computes book value per share by dividing total stockholders' equity by the total number of outstanding shares of common stock. At June 12, 2020, the Company's preliminary estimated total stockholders' equity range was approximately $351.0 million to $357.6 million with 66,216,748 shares of common stock outstanding. These figures and the resulting estimated book value per share as of June 12, 2020 are preliminary, subject to change, and have not been audited or verified by any third party. The market prices used to compute the fair market value of the pass-through residential mortgage backed certificates issued by Freddie Mac, Fannie Mae or Ginnie Mae (“RMBS”) and structured RMBS positions were obtained from JP Morgan Pricing Direct.  Swap and futures marks were obtained from the Chicago Mercantile Exchange closing marks.  Swaption marks were obtained from the counterparty to the trade and verified internally for reasonableness.  Closing to-be-announced securities prices were obtained from Bloomberg.

RMBS Portfolio Characteristics

Details of the RMBS portfolio as of May 31, 2020 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 Form 10-K for the year ended December 31, 2019.

RMBS Valuation Characteristics
 
($ in thousands)
                                                                       
                                                   
Realized
   
Realized
             
                                                   
May 2020
   
Mar - May
   
Modeled
   
Modeled
 
                           
Net
               
Weighted
   
CPR
   
2020 CPR
   
Interest
   
Interest
 
               
%
         
Weighted
               
Average
   
(1-Month)
   
(3-Month)
   
Rate
   
Rate
 
   
Current
   
Fair
   
of
   
Current
   
Average
               
Maturity
   
(Reported
   
(Reported
   
Sensitivity
   
Sensitivity
 
Type
 
Face
   
Value(1)
   
Portfolio
   
Price
   
Coupon
   
GWAC
   
Age
   
(Months)
   
in Jun)
   
in Jun)
   
(-50 BPS)(2)
   
(+50 BPS)(2)
 
Pass Through RMBS
                                                                       
Post Reset ARM
 
$
944
   
$
977
     
0.03
%
 
$
103.50
     
4.51
%
   
4.96
%
   
190
     
171
     
0.00
%
   
0.00
%
 
$
3
   
$
(2
)
Fixed Rate CMO
   
158,092
     
169,611
     
4.99
%
   
107.29
     
4.00
%
   
4.40
%
   
35
     
321
     
27.70
%
   
17.92
%
   
395
     
(570
)
15yr 2.0 TBA
   
250,000
     
256,992
     
7.56
%
   
102.80
     
2.00
%
   
n/a
     
n/a
     
n/a
     
n/a
     
n/a
     
2,891
     
(3,541
)
15yr 4.0
   
1,253
     
1,349
     
0.04
%
   
107.65
     
4.00
%
   
4.49
%
   
25
     
141
     
0.63
%
   
61.44
%
   
17
     
(17
)
15yr Total
   
251,253
     
258,341
     
7.60
%
   
102.82
     
2.01
%
   
4.49
%
   
25
     
141
     
0.63
%
   
61.44
%
   
2,908
     
(3,558
)
30yr 3.0
   
363,162
     
384,601
     
11.31
%
   
105.90
     
3.00
%
   
3.88
%
   
5
     
350
     
5.80
%
   
14.72
%
   
2,565
     
(4,415
)
30yr 3.5
   
1,241,365
     
1,356,604
     
39.91
%
   
109.28
     
3.50
%
   
4.03
%
   
8
     
348
     
13.75
%
   
11.24
%
   
12,802
     
(18,267
)
30yr 4.0
   
488,805
     
545,365
     
16.04
%
   
111.57
     
4.00
%
   
4.52
%
   
15
     
341
     
10.48
%
   
9.81
%
   
7,375
     
(8,945
)
30yr 4.5
   
338,989
     
381,662
     
11.23
%
   
112.59
     
4.50
%
   
5.00
%
   
15
     
342
     
15.58
%
   
16.89
%
   
3,306
     
(3,886
)
30yr 5.0
   
232,717
     
264,821
     
7.79
%
   
113.80
     
5.00
%
   
5.51
%
   
24
     
332
     
24.78
%
   
23.46
%
   
2,532
     
(2,724
)
30yr Total
   
2,665,038
     
2,933,053
     
86.29
%
   
110.06
     
3.78
%
   
4.35
%
   
11
     
345
     
13.26
%
   
13.10
%
   
28,580
     
(38,237
)
Total Pass Through RMBS
   
3,075,327
     
3,361,982
     
98.91
%
   
109.32
     
3.65
%
   
4.36
%
   
13
     
344
     
14.06
%
   
13.43
%
   
31,886
     
(42,367
)
Structured RMBS
                                                                                               
Interest-Only Securities
   
360,499
     
37,070
     
1.09
%
   
10.28
     
4.00
%
   
4.59
%
   
71
     
276
     
35.23
%
   
31.32
%
   
(1,934
)
   
3,627
 
Total Structured RMBS
   
360,499
     
37,070
     
1.09
%
   
10.28
     
4.00
%
   
4.59
%
   
71
     
276
     
35.23
%
   
31.32
%
   
(1,934
)
   
3,627
 
Total Mortgage Assets
 
$
3,435,826
   
$
3,399,052
     
100.00
%
           
3.69
%
   
4.38
%
   
19
     
336
     
16.30
%
   
15.48
%
 
$
29,952
   
$
(38,740
)
                                                                                                 
                                                                                   
Interest
   
Interest
 
   
Average
   
Hedge
                                                                   
Rate
   
Rate
 
   
Notional
   
Period
                                                                   
Sensitivity
   
Sensitivity
 
Hedge
 
Balance
   
End
                                                                   
(-50 BPS)(2)
   
(+50 BPS)(2)
 
Eurodollar Futures
 
$
(50,000
)
 
Dec-2021
                                                                   
$
(438
)
 
$
438
 
Swaps
   
(748,500
)
 
Aug-2024
                                                                     
(15,768
)
   
17,385
 
5-Year Treasury Futures
   
(69,000
)
 
Sep-2020
                                                                     
(2,314
)
   
2,073
 
Swaptions
   
(500,000
)
 
Mar-2021(3)
                                                                     
(367
)
   
1,673
 
Hedge Total
 
$
(1,367,500
)
                                                                         
$
(18,887
)
 
$
21,569
 
Rate Shock Grand Total
                                                                                 
$
11,065
   
$
(17,171
)

(1)
Amounts in the tables above include assets with a fair value of approximately $54.4 million sold in May 2020, which settle in June 2020.
(2)
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.
(3)
Five-year treasury futures contracts were valued at prices of $125.63 at May 31, 2020.  The market value of the short position was $86.7 million.

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(1)(2)
   
Portfolio
 
Asset Category
 
Value(1)(2)
   
Portfolio
 
As of May 31, 2020
           
As of May 31, 2020
           
Fannie Mae
 
$
1,939,520
     
61.7
%
Non-Whole Pool Assets
 
$
303,124
     
9.6
%
Freddie Mac
   
1,202,540
     
38.3
%
Whole Pool Assets
   
2,838,936
     
90.4
%
Total Mortgage Assets
 
$
3,142,060
     
100.0
%
Total Mortgage Assets
 
$
3,142,060
     
100.0
%
                                   

(1)
Amounts in the tables above include assets with a fair value of approximately $54.4 million sold in May 2020, which settle in June 2020.
(2)
Amounts in the tables above exclude long TBA positions with a market value of approximately $257.0 million.


Borrowings By Counterparty
               
($ in thousands)
               
           
Weighted
Weighted
 
       
% of
 
Average
Average
 
   
Total
 
Total
 
Repo
Maturity
Longest
As of May 31, 2020
 
Borrowings(1)
 
Debt
 
Rate
in Days
Maturity
Mirae Asset Securities (USA) Inc.
$
382,893
 
12.3%
 
0.25%
54
8/11/2020
Wells Fargo Bank, N.A.
 
345,195
 
11.3%
 
0.26%
11
6/19/2020
Merrill Lynch, Pierce, Fenner & Smith
 
287,769
 
9.5%
 
0.31%
11
6/11/2020
Mitsubishi UFJ Securities (USA), Inc
 
252,510
 
8.3%
 
0.26%
15
6/26/2020
ABN AMRO Bank N.V.
 
234,098
 
7.7%
 
0.30%
40
8/12/2020
Cantor Fitzgerald & Co
 
233,541
 
7.7%
 
0.28%
40
7/14/2020
Citigroup Global Markets Inc
 
219,673
 
7.2%
 
0.33%
13
6/18/2020
ASL Capital Markets Inc.
 
209,492
 
6.9%
 
0.25%
47
7/28/2020
J.P. Morgan Securities LLC
 
196,560
 
6.5%
 
0.33%
15
6/25/2020
RBC Capital Markets, LLC
 
187,875
 
6.2%
 
0.27%
14
6/26/2020
ING Financial Markets LLC
 
94,878
 
3.1%
 
0.26%
18
6/18/2020
Daiwa Securities America Inc.
 
80,991
 
2.7%
 
0.32%
57
8/12/2020
Barclays Capital Inc
 
78,290
 
2.6%
 
0.38%
12
6/12/2020
South Street Securities, LLC
 
77,817
 
2.6%
 
0.29%
246
5/13/2021
Lucid Cash Fund USG LLC
 
54,607
 
1.8%
 
0.32%
11
6/11/2020
ED&F Man Capital Markets Inc
 
36,749
 
1.2%
 
0.25%
47
7/22/2020
Bank of Montreal
 
32,157
 
1.1%
 
0.27%
11
6/11/2020
J.V.B. Financial Group, LLC
 
26,639
 
0.9%
 
0.25%
22
6/22/2020
Austin Atlantic Asset Management Co.
 
11,554
 
0.4%
 
0.30%
3
6/3/2020
Mizuho Securities USA, Inc
 
1,339
 
0.0%
 
1.62%
23
6/23/2020
Total Borrowings
$
3,044,627
 
100.0%
 
0.28%
32
5/13/2021

(1)
In May 2020, the Company sold assets with a fair value of approximately $54.4 million, which settle in June 2020 that collateralize approximately $51.9 million of repurchase agreements included in the table above.

Contact:

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