Orchid Island Capital Announces December 2021 Monthly Dividend, November 30, 2021 RMBS Portfolio Characteristics and Increase in Stock Repurchase Program

Rhea-AI Summary

Orchid Island Capital, Inc. (NYSE: ORC) announced a monthly cash dividend of $0.065 per share for December 2021, payable on January 27, 2022, to shareholders of record by December 31, 2021. The ex-dividend date is December 30, 2021. Additionally, the company has increased its stock repurchase program by 16,861,994 shares, now totaling 17,699,305 shares available for buyback, representing 10% of its outstanding shares. This program aims to enhance shareholder value while complying with REIT distribution requirements.

Positive

• Monthly dividend payment of $0.065 per share enhances shareholder returns.
• Increased stock repurchase program by 16,861,994 shares signifies confidence in stock value.

Negative

• No minimum distribution payment level established raises concerns about future dividend sustainability.

• December 2021 Monthly Dividend of $0.065 Per Share of Common Stock
• RMBS Portfolio Characteristics as of November 30, 2021
• Next Dividend Announcement Expected January 13, 2022

VERO BEACH, Fla.--(BUSINESS WIRE)-- Orchid Island Capital, Inc. (the “Company”) (NYSE: ORC) announced today that the Board of Directors of the Company (the “Board”) declared a monthly cash dividend for the month of December 2021. The dividend of $0.065 per share will be paid January 27, 2022, to holders of record of the Company’s common stock on December 31, 2021, with an ex-dividend date of December 30, 2021. The Company plans on announcing its next common stock dividend on January 13, 2022.

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 December 9, 2021 and November 30, 2021, the Company had 176,993,049 shares of common stock outstanding. As of September 30, 2021, the Company had 153,318,351 shares of common stock outstanding.

Stock Repurchase Program

On July 29, 2015, the Board authorized the repurchase of up to 2,000,000 shares of the Company’s common stock. On February 8, 2018, the Board approved an increase in the stock repurchase program for up to an additional 4,522,822 shares of the Company's common stock. Coupled with the 783,757 shares remaining from the original 2,000,000 share authorization, the increased authorization brought the total authorization to 5,306,579 shares, representing 10% of the Company’s then outstanding share count. From the inception of the stock repurchase program through September 30, 2021, the Company repurchased a total of 5,685,511 shares at an aggregate cost of approximately $40.4 million, including commissions and fees, for a weighted average price of $7.10 per share. The remaining authorization under the repurchase program as of September 30, 2021, was 837,311 shares. Today, the Board approved an increase in the number of shares of the Company’s common stock available in the stock repurchase program for up to an additional 16,861,994 shares, bringing the remaining authorization under the stock repurchase program to 17,699,305 shares, representing approximately 10% of the Company’s currently outstanding shares of common stock.

As part of the stock repurchase program, shares may be purchased in open market transactions, block purchases, through privately negotiated transactions, or pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Open market repurchases will be made in accordance with Exchange Act Rule 10b-18, which sets certain restrictions on the method, timing, price and volume of open market stock repurchases. 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.

RMBS Portfolio Characteristics

Details of the RMBS portfolio as of November 30, 2021 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 and stock repurchase program. 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, 2020.

RMBS Valuation Characteristics
($ in thousands)
																				Realized		Realized
																				Nov 2021		Sep - Nov			Modeled			Modeled
												Net						Weighted		CPR		2021 CPR			Interest			Interest
							%					Weighted						Average		(1-Month)		(3-Month)			Rate			Rate
		Current			Fair		of			Current		Average						Maturity		(Reported		(Reported			Sensitivity			Sensitivity
Type		Face			Value		Portfolio			Price		Coupon		GWAC		Age		(Months)		in Dec)		in Dec)			(-50 BPS)(1)			(+50 BPS)(1)
Pass Through RMBS
15yr 2.5	$	217,687		$	227,829		3.41%		$	104.66		2.50%		2.87%		11		164		13.3%		10.8%		$	3,545		$	(4,072)
15yr 4.0		435			465		0.01%			106.92		4.00%		4.54%		43		137		0.7%		63.9%			6			(7)
15yr Total		218,122			228,294		3.42%			104.66		2.50%		2.88%		12		164		13.3%		10.9%			3,551			(4,079)
30yr 2.5		1,091,766			1,123,047		16.81%			102.87		2.50%		3.32%		7		352		8.8%		10.7%			16,546			(24,654)
30yr 3.0		4,390,215			4,652,413		69.64%			105.97		3.00%		3.48%		8		351		9.1%		8.9%			78,699			(106,098)
30yr 3.5		336,241			364,865		5.46%			108.51		3.50%		4.01%		20		334		17.8%		21.7%			5,738			(7,236)
30yr 4.0		111,923			121,590		1.82%			108.64		4.00%		4.75%		27		331		16.3%		16.1%			1,209			(1,482)
30yr Total		5,930,145			6,261,915		93.73%			105.59		2.96%		3.50%		9		350		9.7%		10.1%			102,192			(139,470)
Total Pass Through RMBS		6,148,267			6,490,209		97.14%			105.56		2.94%		3.48%		9		343		9.8%		10.1%			105,743			(143,549)
Structured RMBS
IO 20yr 3.0		389,429			38,582		0.58%			9.91		3.00%		3.69%		65		169		27.9%		30.3%			(3,613)			2,591
IO 20yr 4.0		13,985			1,734		0.03%			12.40		4.00%		4.58%		119		114		20.1%		19.6%			(32)			20
IO 30yr 3.0		93,686			12,860		0.19%			13.73		3.00%		3.65%		51		300		14.2%		20.8%			(1,263)			963
IO 30yr 3.5		692,600			109,594		1.64%			15.82		3.47%		4.02%		49		302		22.8%		21.2%			(11,540)			9,007
IO 30yr 4.0		181,472			24,354		0.36%			13.42		4.00%		4.56%		68		284		27.6%		30.8%			(2,062)			1,995
IO 30yr 4.5		4,918			817		0.01%			16.62		4.50%		4.99%		137		210		21.0%		22.5%			(75)			63
IO 30yr 5.0		2,767			476		0.01%			17.20		5.00%		5.36%		137		210		40.2%		30.9%			(36)			34
IO Total		1,378,857			188,417		2.82%			13.66		3.39%		3.99%		57		260		24.3%		26.2%			(18,621)			14,673
IIO 30yr 4.0		46,019			2,414		0.04%			5.25		3.75%		4.41%		50		301		20.9%		23.1%			(141)			(75)
Total Structured RMBS		1,424,876			190,831		2.86%			13.39		3.40%		4.00%		57		261		24.2%		26.0%			(18,762)			14,598
Total Mortgage Assets	$	7,573,143		$	6,681,040		100.00%					3.03%		3.58%		18		328		12.5%		12.9%		$	86,981		$	(128,951)

																Interest			Interest
		Average		Hedge												Rate			Rate
		Notional		Period												Sensitivity			Sensitivity
Hedge		Balance		End												(-50 BPS)(1)			(+50 BPS)(1)
Eurodollar Futures	$	(50,000)		Dec-2021											$	(63)		$	63
Swaps		(369,000)		Mar-2022												(9,551)			12,646
5-Year Treasury Future(2)		(220,000)		Mar-2022												(22,411)			19,813
10-Year Treasury Ultra(3)		(1,355,000)		Dec-2026												(35,363)			35,363
TBA		(575,000)		Dec-2020												(7,555)			11,005
Swaptions		(327,000)		Oct-2022												(6,298)			8,371
Hedge Total	$	(2,896,000)													$	(81,241)		$	87,261
Rate Shock Grand Total															$	5,740		$	(41,690)

(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 $121.40 at November 30, 2021. The market value of the short position was $448.0 million.
(3)		Ten-year Treasury Ultra futures contracts were valued at prices of $146.89 at November 30, 2021. The market value of the short position was $323.2 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		Portfolio		Asset Category			Value		Portfolio
As of November 30, 2021							As of November 30, 2021
Fannie Mae		$	5,168,848		77.4%		Non-Whole Pool Assets		$	369,047		5.5%
Freddie Mac			1,512,192		22.6%		Whole Pool Assets			6,311,993		94.5%
Total Mortgage Assets		$	6,681,040		100.0%		Total Mortgage Assets		$	6,681,040		100.0%

Borrowings By Counterparty
($ in thousands)
						Weighted		Weighted
				% of		Average		Average
		Total		Total		Repo		Maturity		Longest
As of November 30, 2021		Borrowings		Debt		Rate		in Days		Maturity
Wells Fargo Bank, N.A.	$	446,278		6.9%		0.12%		74		2/11/2022
J.P. Morgan Securities LLC		432,913		6.7%		0.13%		47		1/10/2022
Mirae Asset Securities (USA) Inc.		427,550		6.7%		0.13%		114		9/14/2022
RBC Capital Markets, LLC		422,476		6.6%		0.12%		53		1/28/2022
ABN AMRO Bank N.V.		409,797		6.4%		0.12%		82		2/11/2022
Merrill Lynch, Pierce, Fenner & Smith		393,468		6.1%		0.15%		57		1/13/2022
Mitsubishi UFJ Securities (USA), Inc		389,774		6.1%		0.21%		94		12/13/2022
Cantor Fitzgerald & Co		371,321		5.8%		0.12%		71		2/14/2022
Citigroup Global Markets Inc		325,333		5.1%		0.12%		45		12/20/2021
Goldman, Sachs & Co.		323,728		5.0%		0.15%		65		1/19/2022
Santander Bank, N.A.		309,466		4.8%		0.11%		48		12/28/2021
ASL Capital Markets Inc.		307,006		4.8%		0.13%		58		1/18/2022
ED&F Man Capital Markets Inc		303,423		4.7%		0.11%		79		2/17/2022
Nomura Securities International, Inc.		291,136		4.5%		0.13%		99		2/22/2022
ING Financial Markets LLC		274,333		4.3%		0.13%		71		1/10/2022
Bank of Montreal		248,051		3.9%		0.15%		60		1/18/2022
Daiwa Capital Markets America Inc.		215,210		3.4%		0.11%		44		12/14/2021
South Street Securities, LLC		169,182		2.6%		0.12%		45		12/23/2021
Barclays Capital Inc		140,008		2.2%		0.11%		45		12/15/2021
Austin Atlantic Asset Management Co.		96,552		1.5%		0.14%		31		12/1/2021
Lucid Cash Fund USG, LLC		90,388		1.4%		0.17%		39		12/9/2021
StoneX Financial Inc.		27,869		0.4%		0.13%		79		1/18/2022
Mizuho Securities USA, Inc		3,589		0.1%		0.56%		73		1/12/2022
Total Borrowings	$	6,418,851		100.0%		0.13%		67		12/13/2022

 

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Orchid Island Capital, Inc.

Robert E. Cauley

Telephone: (772) 231-1400

Source: Orchid Island Capital, Inc.

FAQ

What is the dividend payment for December 2021 for ORC?

The dividend payment for December 2021 is $0.065 per share.

When will the dividend for December 2021 be paid to ORC shareholders?

The dividend will be paid on January 27, 2022.

How many shares are available for repurchase under ORC's stock repurchase program?

There are now 17,699,305 shares available for repurchase under the stock repurchase program.

What is the reason for the increase in ORC's stock repurchase program?

The increase aims to enhance shareholder value by repurchasing additional shares.