orc2022proxy

DEF 14A 1 orc2022proxy.htm DEFINITIVE PROXY orc2022proxy

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED

IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934

Filed by the Registrant

Filed by a Party other than the Registrant

☐

Check the appropriate box:

☐

Preliminary Proxy Statement

☐

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

☐

Definitive Additional Materials

☐

Soliciting Material under §240.14a-12

ORCHID ISLAND CAPITAL,

INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

No fee required.

☐

Fee paid previously with preliminary materials.

☐

Fee paid on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1)

and 0-11.

3305 Flamingo Drive

Vero

Beach, Florida 32963

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON JUNE 14, 2022

Dear Stockholder:

The 2022 Annual Meeting of Stockholders of Orchid Island Capital, Inc.,

a Maryland corporation, will be held

at our principal executive office, located at 3305 Flamingo Drive,

Vero

Beach, Florida on June 14, 2022, at 9:00

a.m., Eastern Time, for the following purposes:

To elect six directors,

each to hold office until the next annual meeting of stockholders and until his

or her

successor is elected and qualified;

To ratify the appointment

of BDO USA, LLP as our independent registered public accounting firm

for the

year ending December 31, 2022;

To approve, by

a non-binding vote, our executive compensation; and

To transact such

other business as may properly come before the annual meeting or any adjournments or

postponements thereof.

The Board of Directors has fixed the close of business on April 14, 2022 as the record

date for the annual

meeting. Only holders of record of our common stock, $0.01 par value per share,

as of that date are entitled to notice

of, and to vote at, the annual meeting and any adjournment or postponement

thereof. A list of stockholders entitled

to vote at the annual meeting will be available at the annual meeting.

Your

vote is very important. If you do not provide voting instructions, your shares

will not be voted or

counted on several important matters. We

urge you to vote as soon as possible after you receive these proxy

materials, even if you plan on attending the annual meeting. These materials

explain how to vote via mail,

phone or Internet.

Admission to the annual meeting will be by admission ticket only.

If you are a stockholder of record and plan to

attend, tear off the admission ticket from the top half of your proxy

card and bring it and a photo ID with you so that

you may gain admission to the meeting. If your shares are held through a broker,

please contact your broker and

request that the broker obtain an admission ticket for you or provide you with evidence

of your share ownership,

which will gain you admission to the annual meeting.

By Order of the Board of Directors,

Robert E. Cauley

Chairman of the Board and CEO

Vero

Beach, Florida

April 21, 2022

TABLE OF CONTENTS

Page

Proxy Statement

Proxy Statement Summary

Corporate Governance Practices and Stockholder Outreach

Environmental, Social and Governance (“ESG”) Achievements and

Highlights

General Information About Voting

Proposal 1: Election of Directors

Nominees for Director

Corporate Governance

Compensation Committee Interlocks and Insider Participation

Compensation of Directors

Proposal 2: To

Ratify the Selection of Independent Registered Public Accounting Firm

Pre-Approval Policies and Procedures of Our Audit Committee

Fee Disclosure

Audit Committee Report

Executive Officers

Compensation Discussion and Analysis

Compensation Committee Report

Executive Compensation

Proposal 3: To

Approve, By Non-Binding Vote,

the Company’s Executive Compensation

Security Ownership of Management and Certain Beneficial Owners

Delinquent Section 16(a) Reports

Code of Business Conduct and Ethics

Certain Relationships and Related Parties

Stockholder Communications

Proposals of Stockholders

“Householding” of Proxy Statement and Annual Report

2021 Annual Report

Other Matters

Adjournments

- 1 -

ORCHID ISLAND CAPITAL,

INC.

3305 Flamingo Drive

Vero

Beach, Florida 32963

(772) 231-1400

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON JUNE 14, 2022

This proxy statement is furnished in connection with the solicitation of proxies by

the Board of Directors (the

“Board of Directors” or the “Board”) of Orchid Island Capital, Inc.,

a Maryland corporation, for use at our 2022

Annual Meeting of Stockholders (the “Annual Meeting”) to be held

on June 14, 2022, at 9:00 a.m. Eastern Time

the principal executive office of Orchid Island Capital,

Inc., 3305 Flamingo Drive, Vero

Beach, Florida 32963, and

for the purposes set forth in the accompanying Notice of Annual Meeting

of Stockholders, and at any adjournments

or postponements to the meeting. Unless the context requires otherwise, references

in this proxy statement to

“ORC,” “our company,”

“we,” “us” and the “Company” refer to Orchid Island Capital, Inc.

This proxy statement, the accompanying proxy card and our annual

report to stockholders, which includes our

annual report on Form 10-K with audited financial statements for the

year ended December 31, 2021 (our “2021

Annual Report”), are first being sent to our common stockholders on or about

April 21, 2022.

IMPORTANT

NOTICE REGARDING THE AVAILABILITY

OF PROXY MATERIALS

FOR THE

ANNUAL MEETING OF STOCKHOLDERS TO

BE HELD ON JUNE 14, 2022:

This proxy statement and our 2021 Annual Report are available on

the Internet at

https://ir.orchidislandcapital.com

. On this website, you will be able to access this proxy statement, our 2021

Annual

Report,

and any amendments or supplements to the foregoing material that is required to be furnished

stockholders.

At the Annual Meeting, action will be taken to:

(i)

elect six directors, each to hold office until the next annual meeting

of stockholders and until his or her

successor is elected and qualified;

(ii)

ratify the appointment of BDO USA, LLP (“BDO”) as our independent registered

public accounting firm

for the fiscal year ending December 31, 2022; and

(iii) approve, by a non-binding vote, our executive compensation.

At the discretion of the proxy holders, proxies may be voted on any other business that

may properly come

before the Annual Meeting or any adjournment of the Annual Meeting.

- 2 -

PROXY STATEMENT

SUMMARY

This summary highlights certain information contained elsewhere

in this proxy statement. This summary

does not contain all of the information you should consider,

and you should read the entire proxy statement

carefully before voting.

Our Company

Orchid Island Capital, Inc., a Maryland corporation (“Orchid,” the “Company,”

“we” or “us”), is a specialty

finance company that invests in residential mortgage-backed securities (“RMBS”).

The principal and interest

payments of these RMBS are guaranteed by the Federal National Mortgage

Association (“Fannie Mae”), the Federal

Home Loan Mortgage Corporation (“Freddie Mac”) or the Government

National Mortgage Association (“Ginnie

Mae” and, collectively with Fannie Mae and Freddie Mac, the “GSEs”) and

are backed primarily by single-family

residential mortgage loans. We

refer to these types of RMBS as “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 the GSEs, and (ii) structured

Agency RMBS, such as interest only securities, inverse interest only securities and

principal only securities, among

other types of structured Agency RMBS. We

are organized and conduct our operations to qualify

to be taxed as a

real estate investment trust (a “REIT”) for U.S. federal income tax purposes.

ITEMS OF BUSINESS AND VOTING RECOMMENDATIONS

Items for Vote

Board Recommendation

1. Elect the six directors named in this proxy statement

.....................................................

FOR all nominees

2. Ratify the appointment of BDO USA, LLP as the Company’s independent registered

public accounting firm for 2022 ................................................................

.....................

3. Approve, by a non-binding vote, the overall executive compensation philosophy as

described in the “Executive Compensation” section of this proxy statement .................

FOR

Stockholders may be asked to consider any other business properly brought

before the meeting or any

adjournment or postponement thereof. The Board is not aware of any other business

that might be brought before the

meeting.

VOTING AND ADMISSION TO 2022

ANNUAL MEETING OF STOCKHOLDERS

Voting

. Stockholders as of the record date, April 14, 2022, will be entitled to vote.

Each share of common stock

outstanding on the record date is entitled to one vote for each share of our common

stock held.

Even if you plan to attend our Annual Meeting in person, please cast your vote

as soon as possible by:

Accessing the Internet

Calling toll-free from the

United States, U.S. territories

and Canada

Mailing your signed proxy or

voting instruction form

Check your

proxy or voting instruction form

for the web address of our Internet voting site and toll-free

telephone voting number.

Each stockholder’s vote is important. Please submit your vote and

proxy via the Internet, by telephone, or

complete, sign, date and return your proxy or voting instruction form.

- 3 -

CORPORATE GOVERNANCE

PRACTICES AND STOCKHOLDER OUTREACH

Corporate Governance Highlights

●

Held 19 Board meetings in 2021.

●

Independent directors met in executive sessions.

●

All director nominees serve on no more than three public company boards.

●

One-third of our directors are women.

●

One of our directors is African-American and another is a member of the LGBTQ+

community.

●

Bylaw Amendments. In 2019, we changed our Bylaws so that the power

to alter, amend or repeal the

Company’s Bylaws is no longer

vested exclusively with the Board. The Company’s

stockholders, in

addition to the Board, now have the power to alter,

amend or repeal the Bylaws and to make new Bylaw

provisions, in each case by the affirmative vote of the holders of a majority

of the shares of common stock

in the Company then outstanding and entitled to vote on the proposed amendment.

●

Compensation “Clawback” Policy.

Incentive compensation paid to named executive officers whose actions

cause, or contribute to, a restatement of the Company’s

reported financial or operating results is subject to

recoupment.

●

Minimum Stock Ownership Guidelines. We

have robust stock ownership and retention policies for our

directors and executive officers.

●

Policy Prohibiting Pledging and Hedging. Directors and executive

officers are prohibited from engaging in

short-selling, pledging, or hedging transactions in the Company’s

securities.

●

Annual Board and Committee Self-Evaluations.

●

In 2021, we began the process of internalizing certain repurchase agreement

trading, clearing and related

administrative services,

which will provide the Company greater control over these processes and

enhance

risk oversight over these functions.

Director Elections

●

Annual election of all directors.

●

Majority Vote

and Director Resignation Policy.

In 2019, we changed the voting standard for director

elections from a plurality voting standard to a majority voting standard

in uncontested elections, and

adopted a director resignation policy,

whereby incumbent directors who fail to receive a majority of the

votes cast are required to tender a letter of resignation to the Board.

Board Independence

●

Four of six director nominees are independent.

●

All Board committees consist solely of independent directors.

●

Lead Independent Director – Frank P.

Filipps.

●

Two independent director

nominees have been determined to be “audit committee financial experts”.

- 4 -

Stockholder Outreach

●

We have continued

our stockholder outreach efforts and intend to expand our stockholder

outreach efforts

further in the future. In response to stockholder feedback, and in line with

our ongoing evaluation of our

corporate governance practices and commitment to improved transparency,

we have adopted several

enhancements to our corporate governance and added enhanced disclosure

to our proxy statement.

ENVIRONMENTAL, SOCIAL

AND GOVERNANCE (“ESG”) ACHIEVEMENTS AND HIGHLIGHTS

The

Company

views

effective

oversight

and

management of

ESG

issues and

their associated

risks

by the

full

Board as important

to the execution

of its business

and to its

success. We

seek to drive

financial performance

while

engaging in environmentally and socially

responsible business practices grounded in

sound corporate governance. We

believe that disclosure

about our

ESG practices allows

our stockholders to

see our

company holistically and

understand

its trajectory beyond

business fundamentals

and financial

metrics. Although

we have a

limited ability to

take action

on a large scale because we only have

one office and no employees, we continue

to seek to manage our business in a

way that provides positive financial, environmental and social outcomes

for our stakeholders.

Environmental Initiatives

The Company has undertaken a number of green initiatives that conserve energy and reduce waste in an effort to

minimize the impact of our operations on the environment.

Recycling

use

outside

vendor

collect

all paper

products

produced

by our

operations

collect

and

recycle the paper

on a regular basis.

Whenever possible, we

recycle electronic equipment

and ink cartridges

and use

recycled paper products to further reduce our impact on the environment.

Reusable Drinkware

. We

provide employees of our

Manager with reusable drinkware

to reduce disposable cups

and single use drink products.

Reduced Electricity Usage

. We attempt to minimize

our use of electricity in operating our business. The

primary uses of electricity in our business are lighting, temperature

control and technology. While we are

limited in

our ability to limit the use of electricity for our use of technology,

we have made investments into our office to

reduce the amount of electricity used in lighting and temperature control. For example,

we have reduced the wattage

of all office lighting to the fullest extent possible and installed shutters

on all windows to reduce the effect of

sunlight on the ambient temperature inside our office building.

We also installed Icynene

insulation to further

reduce our consumption of electricity.

These collective actions permit us to maintain a comfortable temperature

our office with the minimal consumption of electricity.

Socially Conscious

The employees

of our

Manager drive

our success

and we

are committed

to investing

in their

professional

and

personal development. We

strive to create

a dynamic environment

where all employees

of our Manager

can achieve

and contribute.

The employees

of our

Manager enjoy

what we

believe are

excellent subsidized

health and

wellness

benefits,

reimbursed

professional

training

and

development,

on-site

food

and

beverages

and

telecommuting

opportunities.

value

diversity

and

inclusion

the

employees

our

Manager

and

our

Board

Directors.

were

recognized

in 2020

Women

on Boards

because

50% of

our

external directors

and

33% of

our

entire Board

are

women.

Among the Manager’s employees, 28% are women.

In addition, one of our directors is African-American and another is a member of the

LGBTQ+ community.

- 5 -

The Company

plays an

integral role

in providing

permanent financing

for residential

mortgages originated

for

American

homeowners

across

the

United

States,

and

thus

supports

home

ownership

the

United

States.

Home

ownership

has

long

been

considered

important

way

for

individuals

create

wealth

and

develop

strong

communities.

As of

December

31,

2021,

the Company

owned

Agency

RMBS backed

by 26,118

home

loans and

owned a partial interest in Agency RMBS backed by 635,749 more home loans. Of these loans approximately

20.4%

were made

to first

time home

buyers. Approximately

99.9% of

our assets

are backed

by loans

made to

Americans

with GSE conforming loan sizes, homeowners who make up the backbone

of the American economy.

Governance Highlights

are

committed

sound

corporate

governance,

which

strengthens

the

accountability

our

Board

and

promotes the long-term interests of our

stockholders. We believe that our corporate governance standards and policies

yield honest, transparent and

accountable directors and executive

officers. The summary

below highlights our Board

and leadership practices and notable stockholder rights, as further discussed

below.

●

Majority of directors are independent (4 out of 6 current directors)

●

All Board committees are composed of independent directors

●

Independent directors conduct executive sessions

●

Directors maintain open communication and strong working relationships

among themselves and

regular access to management

●

Directors conduct robust annual Board and committee self-assessment process

●

Directors and executives adhere to minimum stock ownership guidelines

●

Executives are prohibited from pledging, hedging or engaging in

short sales involving our securities

●

Executives are subject to a claw-back policy

●

No stockholder rights plan or “poison pill”

●

Majority voting for the uncontested election of directors where directors

are elected by a majority of

the votes cast

●

Stockholders have the right to amend bylaws

●

All directors elected annually (declassified Board)

●

Annual say-on-pay voting

●

Stockholder engagement efforts

●

Annual review of succession planning for senior management

●

Two Audit Committee

financial experts

●

Full member of National Association of Corporate Directors that provides

our directors with access to

Board education opportunities

●

Board members and senior management attend seminars conducted by industry

experts covering

accounting, corporate governance and legal issues

- 6 -

●

Company maintains a Code of Business Conduct and Ethics, Code of

Ethics for Senior Financial

Officers and Corporate Governance Guidelines

●

Company maintains a Confidential Whistleblower Policy and Related Party

Transaction Policy

Governance Documents

Governance policies and other governance documents are available on

the Company’s website at:

https://ir.orchidislandcapital.com

. The information on our website is not a part of this proxy statement.

- 7 -

GENERAL INFORMATION

ABOUT VOTING

Solicitation of Proxies

The enclosed proxy is solicited by and on behalf of our Board. We

will bear the expense of soliciting proxies

for the Annual Meeting, including the mailing cost. In addition to solicitation

by mail, our officers or an agent of our

designation may solicit proxies from stockholders by telephone, e-mail,

facsimile or personal interview.

Our officers

receive no additional compensation for such services. Upon request, we will reimburse

brokers, dealers, banks and

trustees, or their nominees, for reasonable expenses incurred by them in forwarding

our proxy materials to beneficial

owners of our common stock.

Votin

Securities

The Board of Directors has fixed the close of business on April 14, 2022 as the

record date (the “Record Date”)

for determining the holders of our common stock entitled to receive

notice of and to vote at the Annual Meeting and

any adjournments

or postponements thereof. On the Record Date, there were 177,117,186

shares of our common

stock outstanding. Only common stockholders of record on the Record

Date are entitled to vote at the Annual

Meeting, and such stockholders will be entitled to one vote for each share of our

common stock held, which may be

given in person or by proxy duly authorized in writing by mail, by telephone

or by Internet.

Voting

If you hold shares of our common stock in your own name as a holder of record,

you may instruct the proxies to

vote your shares through any of the following methods:

By Telephone

or the Internet

: Common stockholders can vote their shares via telephone or the Internet as

instructed in the proxy card.

By Mail

: A common stockholder may elect to vote by mail and should complete,

sign and date the proxy card

and mail it in the pre-addressed envelope that accompanies the delivery of

the proxy card. For common stockholders

of record, proxy cards submitted by mail must be received by the date

and time of the Annual Meeting. For common

stockholders that hold their shares through an intermediary,

such as a broker, bank or other nominee, the voting

instruction form submitted by mail must be mailed by the deadline imposed by

your bank, broker or other agent for

your shares to be voted.

In Person

: Shares of common stock held in your name as the stockholder of record may be voted

by you in

person at the Annual Meeting. Shares of common stock held beneficially in

street name may be voted by you in

person at the Annual Meeting only if you obtain a “legal” proxy from the broker

or other agent that holds your

shares giving you the right to vote the shares and bring that “legal” proxy to

the meeting.

Quorum

A quorum will be present at the Annual Meeting if the holders of a majority of the outstanding

shares entitled to

vote are present, in person or by proxy.

If you have returned valid voting instructions or if you hold your shares in

your own name as a holder of record and attend the Annual Meeting in person with

your proxy, your shares will be

counted for the purpose of determining whether there is a quorum. If a quorum

is not present, the Annual Meeting

may be postponed or adjourned until a quorum has been obtained. Because

there were 177,117,186 eligible votes

of the Record Date, we will need at least 88,558,593 votes present in person

or by proxy at the Annual Meeting for a

quorum to exist.

Abstentions and “Broker Non-Votes”

A “broker non-vote” occurs when a broker,

bank or other nominee holding shares of common stock on your

behalf votes the shares on some matters but not others because that holder does

not have discretionary voting power

for that particular item and has not received instructions from the beneficial

owner. Pursuant to Maryland law,

abstentions

and broker non-votes are counted as present for purposes of determining the presence of

a quorum.

- 8 -

Under the rules of the New York

Stock Exchange (the “NYSE”), brokerage firms may have the discretionary

authority to vote their customers’ shares on certain routine matters for which

they do not receive voting instructions,

including the ratification of the independent registered public accounting

firm. The other proposals included in this

proxy statement are not considered “routine” matters, and therefore brokers

holding shares beneficially owned by

their clients do not have the ability to cast votes, unless the brokers have received instructions

from the beneficial

owners of the shares. As a result, it is important that you provide instructions

to your broker so that your shares will

be counted in those matters.

Vote

Required to Approve an Item of Business

Election of Directors (Proposal

. The affirmative vote of a majority of all of the votes cast at a meeting of

stockholders duly called and at which a quorum is present is necessary for

the election of directors. For purposes of

Proposal 1, abstentions and broker non-votes will not be counted as votes cast and

will have no effect on the result

of the vote.

Ratification of Appointment of BDO (Proposal

. The affirmative vote of a majority of all of the votes cast at a

meeting of stockholders duly called and at which a quorum is present is required

to ratify the appointment of BDO

as our independent registered public accounting firm for the year

ending December 31, 2021. For purposes of the

vote on Proposal 2, abstentions will not be counted as votes cast and will have no effect

on the result of the vote.

Approval of our Executive Compensation

(Proposal 3).

The affirmative vote of a majority of all of the votes

cast at a meeting of stockholders duly called and at which a quorum is present is required

to approve, by a non-

binding vote, our executive compensation. For purposes of the vote on Proposal

3, abstentions and broker non-votes

will not be counted as votes

cast and will have no effect on the result of the vote.

If you sign and return your proxy card without giving specific voting instructions,

your shares will be voted as

recommended by our Board.

Right to Revoke Proxy

You

have the right to revoke your proxy at any time before the Annual Meeting. If you are a holder of record,

you may contact our corporate secretary and request that another proxy card

be sent to you. Alternatively, you

may

use the Internet or the telephone to authorize a new proxy and revoke your

old proxy, even if you previously

mailed

in a proxy card. The latest-dated, properly completed proxy that you

submit, whether through the Internet, by

telephone or by mail, will count as your vote. Please note that if you

submit a later proxy authorization by mail, your

reauthorization will not be effective unless it is received by our

corporate secretary prior to the start of the Annual

Meeting. Attendance at the Annual Meeting will not by itself constitute revocation

of a previously submitted,

properly completed proxy.

If your shares are held in street name, you must contact your bank, broker or other

nominee and follow their procedures for changing your vote instructions.

- 9 -

PROPOSAL 1: ELECTION OF DIRECTORS

Pursuant to our corporate charter, holders of

our common stock elect each of the members of the Board of

Directors annually. The

Board has set six directors as the number to be elected at the Annual Meeting and has

nominated the individuals named below.

All nominees are currently directors of the Company and have been

previously elected by our stockholders. Each nominee has been nominated

by the Nominating and Corporate

Governance Committee of the Board of Directors, in accordance with our bylaws,

to stand for re-election at the

Annual Meeting and

to hold office until our annual meeting to be held in 2023 and until his or her

successor is duly

elected and qualified. It is expected that each of the nominees will be able to serve,

but if any such nominee is

unable to serve for any reason, the proxies reserve discretion to vote

or refrain from voting for a substitute nominee

or nominees. A common stockholder using the enclosed form of proxy can vote

for or against any or all of the

nominees or may abstain from voting for any or all of the nominees.

We believe that

all of our director nominees possess the personal and professional qualifications necessary

serve as a member of our Board of Directors. Our directors have been evaluated

by the Nominating and Corporate

Governance Committee pursuant to the guidelines described below

under “Nominating and Corporate Governance

Committee,” and the determination was made that each of them fulfills and

exceeds the qualities that we look for in

members of our Board of Directors. Messrs. Cauley and Haas are affiliates

of Bimini Advisors, LLC, which is the

Company’s manager (the “Manager”).

The Board has determined that each of our director nominees, other than

Messrs. Cauley and Haas, is an independent director as discussed below under

“Director Independence.”

The information set forth below is current as of April 21, 2022 with respect

to each nominee for election at the

Annual Meeting. The business address of each nominee is Orchid Island

Capital, Inc., 3305 Flamingo Dr., Vero

Beach, Florida 32963. We

have highlighted specific attributes for each Board member below.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE

FOR

THE ELECTION OF ALL DIRECTOR NOMINEES.

- 10 -

NOMINEES FOR DIRECTOR

ROBERT E. CAULEY,

CFA

Chairman, President and Chief Executive Officer

Director since August 2010

Age 63

Mr. Cauley has been our Chairman,

President and Chief Executive Officer (“CEO”) since August

2010 and is

the President, Chairman and CEO of our Manager.

Mr. Cauley co-founded Bimini Capital

Management, Inc.

(“Bimini”) in 2003 and has served as its CEO and Chairman of the Board of

Directors since April 2008. He served

as Vice-Chairman, Chief Financial

Officer and Chief Investment Officer prior

to April 2008. Prior to co-founding

Bimini in 2003, Mr. Cauley

was a vice-president and portfolio manager at Federated Investors in Pittsburgh

from

1996 to 2003. Prior to 1996, Mr. Cauley

was a member of the ABS/MBS structuring desk at Lehman Brothers from

1994 to 1996 and a credit analyst at Barclays Bank, PLC from 1992 to 1994. Mr.

Cauley is a CPA (inactive

status)

and served in the United States Marine Corps for four years. We

believe that Mr. Cauley should

continue to serve as

a member of our Board of Directors due to his experience managing a publicly-traded

REIT and his career as a

RMBS portfolio manager.

GEORGE H. HAAS, IV

Chief Financial Officer and Chief Investment Officer

Director since August 2010

Age 45

Mr. Haas has been our Chief Financial

Officer and Chief Investment Officer since

August 2010 and has served

on our Board of Directors since August 2010. Mr.

Haas is the Chief Investment Officer and Chief Financial Officer

of our Manager. Mr.

Haas has been the President, Chief Investment Officer and Chief

Financial Officer of Bimini

since April 2008. Prior to assuming those roles with Bimini, he was Bimini’s

Senior Vice President and

Head of

Research and Trading. Mr.

Haas joined Bimini in May 2004 as Vice

President and Head of Mortgage Research. He

has over 21 years of experience in the mortgage industry and has managed trading

operations for the portfolio since

his arrival in May 2004. Mr. Haas has

approximately 14 years of experience as a member of senior management

of a

publicly-traded REIT.

He has also been a member of the Board of Managers of Royal Palm Capital, LLC since

2007. Prior to joining Bimini, Mr.

Haas worked in the mortgage industry at both National City Mortgage and

Homeside Lending, Inc. We

believe that Mr. Haas should continue to

serve as a member of our Board of Directors

due to his experience as the Chief Financial Officer of a publicly-traded

REIT and his experience in the mortgage

industry.

W COLEMAN BITTING

Director since February 2013

Age 56

Mr. Bitting has maintained

a private consulting practice focused on REITs

since July 2007. Mr. Bitting was a

Founding Partner and Head of Corporate Finance at Flagstone Securities (“Flagstone”),

a leading investment bank

that specialized in mortgage REITs

and finance companies, from 2000 to February 2007. Flagstone managed

than 40 equity offerings raising more than $5 billion of equity capital.

Flagstone helped clients build investment and

liability management practices. Prior to Flagstone, Mr.

Bitting held senior equity research positions at Stifel,

Nicholas & Co. Inc. and Kidder, Peabody

& Co., Inc. Due to his significant capital markets experience and

experience analyzing and advising REITs,

we believe Mr. Bitting should

continue to serve as a member of our

Board of Directors.

- 11 -

FRANK P.

FILIPPS

Director since February 2013

Age 74

From 2005 to July 2008, Mr. Filipps served

as the Chairman and Chief Executive Officer of Clayton Holdings,

Inc., a mortgage services company,

leading it through its initial public offering and listing on the Nasdaq, as well as

its subsequent sale. Prior to that, Mr.

Filipps was employed by the Radian Group, Inc., spending two years as Senior

Vice President and Chief Financial Officer,

one year as Executive Vice President and

Chief Operating Officer and

10 years as Chairman and Chief Executive Officer.

In his time with the Radian Group, Inc., Mr.

Filipps led the

company through its initial public offering and listing on

the NYSE. Prior to his tenure with the Radian Group, Inc.,

Mr. Filipps spent 17 years with American

International Group, Inc. (“AIG”) (NYSE: AIG), where he held multiple

Vice President-level positions

and was the President, Chief Executive Officer and founder of

AIG Capital

Corporation, the first non-insurance financial company within AIG, which

focused on interest rate swaps, foreign

exchange and equity arbitrage and leveraged buyout bridge financing.

Mr. Filipps has served as a director

and the

chair of the audit committee of Impac Mortgage Holdings, Inc. (NYSE Amex:

IMH) since 1995, as a director of

Primus Guaranty,

Ltd. (NYSE: PRSG) from 2002 through 2014 and as chair of its compensation committee

from

2002 to 2006 and its nominating and corporate governance committee from

2007 to 2011. Mr.

Filipps has also

served as a director of Ready Capital Corporation (f/k/a Sutherland Asset Management

Corp.) (NYSE: RC) since

2014,

and as chair of its audit committee since 2016. He has also served as a director and chairman

of the

governance committee of Fortegra Financial Corp. (NYSE: FRF) from

2010 through 2014 and as chair of its

nominating and governance committee from 2010 to 2011

and its compensation committee since 2012. Due to his

financial and business expertise, diversified management background,

extensive experience with real estate-related

and mortgage services companies, and experience as a director of other public

companies, we believe Mr. Filipps

should continue to serve as a member of our Board of Directors.

AVA

L. PARKER

Director since February 2013

Age 59

In 2015, Ms. Parker was appointed as the 5th President,

and the first female president, of Palm Beach State

College. Palm Beach State serves over 40,000 students annually and

offers Bachelors and Associates degrees, and

awards technical certificates. Prior to her appointment to Palm Beach State College,

she served as the Executive

Vice President and Chief Operating

Officer of Florida Polytechnic University from 2012-2015.

On March 30, 2022,

Ms. Parker was appointed to the board of directors of MasTec,

Inc. (NYSE: MTZ), a publicly traded infrastructure

construction company.

From 2001-2015, Ms. Parker was a partner in the law firm of Lawrence & Parker,

PA, where

she served as bond counsel and underwriter’s counsel in connection

with municipal finance transactions as well as

assisted for-profit and not-for-profit clients with corporate organization,

development and interpretation of contracts

and litigation issues. From 2002-2015, Ms. Parker also served as the President of

Linking Solutions, Inc., which

provided training, technical support and program management services in

the public and private sectors. Ms. Parker

has served as a director of Professional Holding Corp. (Nasdaq: PFHD) since 2020.

She has also served as a director

of the American Association of Community Colleges (“AACC”) since 2020,

and as a member of AACC’s Executive

Committee since 2021, where she chairs AACC’s

Committee on Audit and Finance.

In 2006, Ms. Parker was

appointed to the Jacksonville Transportation

Authority Board of Directors, and served as a Board Member from

2006-2015 and Chairman from 2009-2010. Ms. Parker also served

as a Board Member from 2002-2012 and Chair of

the State of Florida Board of Governors of the State University System from

2010-2012. Due to her experience as an

executive, her leadership on several private, state and municipal boards,

and her experience with complex financial

transactions and corporate counseling, we believe Ms. Parker should

continue to serve as a member of our Board of

Directors.

- 12 -

PAULA MORABITO

Director since December 2017

Age 66

Ms. Morabito was an audit partner at Ernst & Young,

LLP,

where she served as a Real Estate, Hospitality and

Construction Leader of the Southeast Region, a position she held from 2007 through

her retirement in 2016. Ms.

Morabito had been with Ernst & Young,

LLP for over 25 years and held various leadership positions in the

organization, serving on both the Southeast Region

Assurance Operating Committee and the Real Estate Operating

Committee during her tenure. Ms. Morabito currently serves as a consultant

with Morabito Consulting LLC. Due to

the insight she brings from approximately 35 years of experience and

leadership in the accounting and real estate

finance industry,

we believe Ms. Morabito should continue to serve as a member of our Board of Directors.

CORPORATE GOVERNANCE

We believe that

we have implemented effective corporate governance

policies and observe good corporate

governance procedures and practices. We

have adopted a number of written policies, including corporate

governance guidelines, a code of business conduct and ethics, a code of ethics for

senior financial officers, a

whistleblower policy and charters for our Audit Committee, Compensation

Committee and Nominating and

Corporate Governance Committee. These written policies can be found on our

website at

https://ir.orchidislandcapital.com

As part of our ongoing efforts to review and evaluate our corporate governance,

we have adopted several

corporate governance improvements in the past five years, including

the following (as described in more detail

below):

●

Information Technology

Disclosure.

We included

enhanced disclosure in this proxy statement about our

information technology systems, the Board’s

oversight role in cybersecurity and the Company’s

efforts to

mitigate security breaches.

●

ESG Disclosure

. We included

disclosure in this proxy statement about our ESG achievements and

highlights.

●

Majority Vote

and Director Resignation Policy

. We changed the voting

standard for director elections from

a plurality voting standard to a majority voting standard in uncontested

elections and adopted a director

resignation policy,

whereby incumbent directors who fail to receive a majority of the votes cast are required

to promptly tender a letter of resignation to the Board.

●

Bylaw Amendments

. We changed our

Bylaws so that the power to alter, amend or repeal

the Company’s

Bylaws is no longer vested exclusively with the Board. The Company’s

stockholders, in addition to the

Board, now have the power to alter, amend or

repeal the Bylaws and to make new Bylaw provisions, in

each case by the affirmative vote of the holders of a majority of

the shares of common stock in the

Company then outstanding and entitled to vote on the proposed amendment.

●

Compensation “Clawback” Policy

. Incentive compensation paid to named executive officers whose

actions

cause, or contribute to, a restatement of the Company’s

reported financial or operating results is subject to

recoupment via the Company’s compensation

“clawback” policy.

●

Minimum Stock Ownership Guidelines

. We adopted robust

stock ownership and retention policies for our

directors and executive officers.

●

Policy Prohibiting Pledging and Hedging

. Directors and executive officers are prohibited from engaging

short-selling, pledging, or hedging transactions in the Company’s

securities.

- 13 -

Stockholder Outreach

We have continued

our stockholder outreach efforts and intend to expand our stockholder outreach

efforts

further in the future. In response to stockholder feedback, and in line with

our ongoing evaluation of our corporate

governance practices and commitment to improved transparency,

we have adopted several enhancements to our

corporate governance and added enhanced disclosure to our proxy statement.

The Company looks forward to

continuing to find innovative ways to engage with its stockholders.

Board of Directors Composition

Our business and affairs are managed under the direction of our

Board of Directors. Members of our Board of

Directors are kept informed of our business through discussions with our

chairman, CEO and other officers, by

reviewing materials provided to them, and participating in regular meetings

of our Board of Directors and its

committees. The Board of Directors is currently comprised of six directors,

all of whom stand for election annually.

The Board of Directors is elected by our stockholders to oversee management

of the Company.

During the year ended December 31, 2021, our Board of Directors held

19 meetings. Each director standing for

election attended more than 75 percent of the meetings of our Board of Directors

and committees on which he or she

served that were held during the period for which such person was a director.

Directors are expected to attend all

meetings of the Board, meetings of committees on which they serve, and

annual meetings of stockholders. All of our

directors attended the 2021 annual meeting, and all of our directors are expected

to attend the Annual Meeting this

year.

Director

Independence

The NYSE Listed Company Manual outlines the requirements for

a director to be deemed independent by the

NYSE, including the mandate that our Board affirmatively

determine that each of our directors has no material

relationship with us that would impair their independence. Our Board

of Directors has reviewed both direct and

indirect transactions and relationships that each of our directors had

or maintained with us and our management. Our

Board of Directors affirmatively determined that four

of our current directors are independent directors under the

NYSE Listed Company Manual based upon the fact that they did not have any material

relationships with us other

than as directors and holders of our securities. Our current independent directors

are W Coleman Bitting, Frank P.

Filipps, Paula Morabito and Ava

L. Parker. Robert E. Cauley and

George H. Haas, IV are not considered

independent because they are employees of Bimini, which is the sole member

of our Manager. Therefore, our Board

of Directors is comprised of a majority of independent directors.

Board Diversity

We do not

have a formal policy about diversity,

but the Nominating and Corporate Governance Committee does

consider certain types of diversity when nominating director candidates

to the Board, including differences of

viewpoint, professional experience, education, skill, other personal qualities

and attributes, race, gender and national

origin. One-third of our directors are women. In addition, one of our directors is African

-American and another is a

member of the LGBTQ+ community.

Board Meetings and Committees

The Board of Directors currently has three standing committees: the Audit Committee,

the Compensation

Committee and the Nominating and Corporate Governance Committee. The

charter of each Board committee is

available on the Corporate Governance section of our website at

https://ir.orchidislandcapital.com

and will be made

available in print to any stockholder upon written request delivered to our corporate

secretary at Orchid Island

Capital, Inc., 3305 Flamingo Drive, Vero

Beach, Florida 32963.

The following table reflects the composition of each of the Board of Director’s

standing committees as of April

14, 2022 and the number of meetings held during 2021.

- 14 -

Audit

Compensation

Nominating and

Corporate Governance

W Coleman Bitting

.............

Frank P.

Filipps ..................

Paula Morabito ...................

Ava L. Parker .....................

Number of Meetings

.........

_______________

Chair of Committee

Member of Committee

Audit Committee

Mr. Filipps chairs our

Audit Committee. The Board of Directors has determined that each of Mr.

Filipps and

Ms. Morabito qualifies as an “audit committee financial expert,” as that term

is defined by Item 407(d)(5)(ii) of

Regulation S-K. In addition, the Board of Directors has determined

that each member of the Audit Committee is

financially literate and able to read and understand fundamental financial statements.

The Board of Directors has

also determined that each of W Coleman Bitting, Frank P.

Filipps and Paula Morabito are independent as defined in

Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the “Exchange

Act”), and as defined in the NYSE

Listed Company Manual and our Corporate Governance Guidelines. The

Audit Committee assists our Board of

Directors in overseeing:

●

our accounting and financial reporting processes;

●

the integrity and audits of our financial statements;

●

our compliance with legal and regulatory requirements;

●

the qualifications and independence of our independent registered public

accounting firm; and

●

the performance of our independent registered public accounting

firm and any internal auditors.

The Audit Committee is also responsible for engaging our independent

registered public accounting firm,

reviewing with the independent registered public accounting firm the plans

and results of the audit engagement,

approving professional services provided by the independent registered

public accounting firm, reviewing the

independence of the independent registered public accounting firm, considering

the range of audit and non-audit

fees and reviewing the adequacy of our internal accounting controls.

The Audit Committee’s purpose and

responsibilities are more fully set forth in the Audit Committee charter,

which is available in the Corporate

Governance section of our website at

https://ir.orchidislandcapital.com

Compensation Committee

Mr. Bitting chairs our Compensation

Committee. The Compensation Committee exercises all powers delegated

to it by the Board of Directors in connection with compensation matters, which

include reviewing our overall

executive officer and director compensation structure,

policies and programs, making determinations as to

appropriate levels of executive officer compensation, administering

the issuance of any equity awards and making

recommendations to the Board of Directors with respect to our incentive

compensation plans and equity-based plans

and other compensation-related matters. Our Compensation Committee may

designate a sub-committee of at least

one member to address specific issues on behalf of the committee. The Compensation

Committee’s purpose and

responsibilities are more fully set forth in the Compensation Committee charter,

which is available in the Corporate

Governance section of our website at

https://ir.orchidislandcapital.com

- 15 -

Nominating and Corporate Governance Committee

Ms. Parker chairs the Nominating and Corporate Governance Committee, which

is responsible for seeking,

considering and recommending to our full Board of Directors qualified candidates

for election as directors and

recommending a slate of nominees for election as directors at the Annual

Meeting. It also periodically prepares and

submits the committee’s selection

criteria for director nominees to our Board of Directors for adoption. It reviews

and makes recommendations on matters involving the general operation of our

Board of Directors and our corporate

governance, and annually recommends to our Board of Directors nominees

for each committee of our Board of

Directors. In addition, the committee annually facilitates the assessment of

our Board of Directors’ performance as a

whole and of the individual directors and reports thereon to our Board of Directors.

Before each annual meeting of stockholders, the Nominating and

Corporate Governance Committee considers

the nomination of all directors whose terms expire at the next annual meeting

of stockholders and also will consider

new candidates whenever there is a vacancy on the Board or whenever

a vacancy is anticipated due to a change in

the size or composition of the Board, a retirement of a director or for any other

reason. The Nominating and

Corporate Governance Committee identifies director candidates based on recommendations

from directors,

stockholders, management and others. The committee may in the future

engage the services of third-party search

firms to assist in identifying or evaluating director candidates. No such

firm was engaged in 2021.

Our Nominating and Corporate Governance Committee charter provides

that the committee will consider

nominations for membership on our Board by our stockholders. The

rules that must be followed for the committee to

consider nominations are contained in the committee’s

charter and our bylaws and include the following:

(i)

the nominating stockholder must have owned, for at least six months prior

to the date the nomination is

submitted, shares of the Company’s

common stock or preferred stock, if any,

entitled to vote for directors;

(ii)

the nomination must be received by the Committee pursuant to the Company’s

bylaws, which, among other

things, requires notice to be provided at least 120 days, but not more than 150 days,

before the first anniversary of

the mailing date for the proxy materials applicable to the annual meeting

prior to the annual meeting for which such

nomination is proposed for submission; and

(iii) a detailed statement that includes the

qualifications, as well as the written consent, of each nominated

person must accompany each nomination submitted, as well as any

information required by the Company’s

bylaws.

The Nominating and Corporate Governance Committee evaluates the effectiveness

of the Board as a whole and

of each individual director annually and identifies any areas in which the

Board would be better served by adding

new members with different skills, backgrounds or areas of experience.

The Board considers director candidates,

including those nominated by stockholders, based on a number of factors

including: whether the Board member will

be “independent,” as such term is defined by the NYSE listing standards; whether

the candidate possesses the

highest personal and professional ethics, integrity and values; whether the candidate

contributes to the overall

diversity of the Board; and whether the candidate has an inquisitive and objective

perspective, practical wisdom and

mature judgment. Candidates are also evaluated on their understanding

of our business, experience and willingness

to devote adequate time to carrying out their duties. The Nominating

and Corporate Governance Committee also

monitors the mix of skills, experience and background to assure that the

Board has the necessary composition to

effectively perform its oversight function.

The following list summarizes a number of the competencies currently represented

by our director nominees

that we believe are important to their oversight of our business and operations.

Leadership

Investment Activities

Governance

Public Company Executive Experience

Mortgage-Backed Securities

Audit

Public Company Board Experience

Counterparty Risk Management

Compensation

Investor Relations

Finance

Regulatory Compliance

Capital Markets

Hedging

- 16 -

The Nominating and Corporate Governance Committee’s

purpose and responsibilities are more fully set forth in

the Nominating and Corporate Governance Committee charter,

which is available in the Corporate Governance

section of our website at

https://ir.orchidislandcapital.com

Board of Directors Leadership Structure

The Board of Directors believes it should maintain flexibility to select the Chairman

of the Board and the CEO

based on criteria and qualifications that the Board deems to be in the best interests of

the Company. At this time,

the

positions of Chairman of the Board and CEO are combined. Robert E. Cauley holds

these positions and leads our

Board of Directors meetings. The Board believes Mr.

Cauley’s extensive experience

and knowledge regarding the

Company’s business positions him

to provide the most effective and competent leadership of the Company

and the

Board. As a founding officer of the Company and a co-founder of

our Manager, Mr.

Cauley has the familiarity and

expertise to best understand opportunities and risks facing the Company,

and the Board believes that he is in the best

position to lead both the Company and the Board.

The Board also recognizes the importance of strong independent leadership,

and therefore also has a lead

independent director, Frank P.

Filipps. The duties and responsibilities of the lead independent director

include the

following:

●

Following consultation with the Chairman and CEO and other directors,

providing input into and approving

Board meeting agendas and schedules, assuring that there is sufficient

time for discussion of all agenda

items;

●

Calling special meetings or executive sessions of the Board and calling

and presiding at executive sessions

or meetings of non-management or independent directors and, as appropriate,

providing feedback to the

Chairman and CEO and otherwise serving as a liaison between the independent

directors and the Chairman;

●

Working

with committee chairs to ensure coordinated coverage of Board responsibilities;

●

Facilitating communication between the Board and senior management,

including advising the Chairman

and CEO of the Board’s informational

needs and approving the types and forms of information sent to the

Board;

●

Serving as an additional point of contact for Board members and

stockholders and being available for

consultation and direct communication with major stockholders; and

●

Staying informed about the strategy and performance of the Company

and reinforcing that expectation for

all Board members.

Each of the Board of Directors’ standing committees are chaired by

independent directors, and in that capacity,

they are able to call meetings, set agendas and direct the attention of those committees on

a wide range of corporate

matters. Given the nature and scope of our current operations and our small management

team, the Board of

Directors believes that our current leadership structure and allocation of responsibilities

is appropriate while

maintaining strong independence.

Board Role in Risk Oversight

The Board of Directors as a whole has responsibility for risk oversight, with reviews

of certain areas being

conducted by the relevant Board committees. The Audit Committee oversees management

of financial risks and

risks relating to potential conflicts of interest. The Compensation Committee

is responsible for overseeing the

management of risks relating to compensation arrangements. The

Nominating and Corporate Governance

Committee manages risks associated with the size, composition and

independence of the Board of Directors. These

committees provide reports periodically to the full Board of Directors. The

oversight responsibility of the Board of

Directors and its committees is supported by management reporting processes

that are designed to provide visibility

to the Board of Directors about the identification, assessment and management

of critical risks. These areas of focus

include strategic, operational, financial and reporting, compensation,

cybersecurity and information technology,

- 17 -

legal and compliance and other risks. The management reporting

process includes regular reports from the CEO,

which are provided with input from the senior management team.

The Company believes oversight of cybersecurity risk is the responsibility of

the full Board. The Board

considers the Company's cybersecurity posture and risk exposure with

management taking into consideration our

operations and the types of data retained on our systems as part of its periodic review

of the Company’s risk

management. Our primary business involves investments in Agency RMBS, which

are securities backed primarily

by single-family residential mortgage loans.

We do not receive personal

information on individual mortgage

borrowers. Mr. Bitting has significant

knowledge in information technology oversight as a result of his experience

managing and overseeing information technology at Flagstone.

The Board will review the Company’s

cybersecurity

program and risk exposure with management on at least an annual basis and will receive

reports from management

on these matters from time to time. The Board may also conduct additional

cybersecurity reviews or receive

additional updates or reports as it deems necessary.

Majority Vote and Director Resignation Policy

The Company’s Bylaws include

a majority voting standard in uncontested elections (in which a nominee is

elected only if the votes cast “for” his or her election exceed the votes cast “against” his

or her election). The

Bylaws also include a plurality voting standard in contested elections, which

includes an election for which, as of

the date that is fourteen (14) days in advance of the date the Company files its definitive

proxy statement, there are

more nominees for election than positions on the Board to be filled by

that election.

Pursuant to the Company’s

Corporate Governance Guidelines, which include a director resignation provision,

incumbent directors who fail to receive a majority of the votes cast are required

to promptly tender a letter of

resignation to the Board, and the Nominating and Corporate Governance

Committee of the Board will make a

recommendation to the Board on whether to accept or reject the resignation,

or whether any other action should be

taken. Taking into

account the recommendation of the Nominating and Corporate Governance Committee, the

Board will determine whether to accept or reject any such resignation, or what

other action should be taken within

120 days from the date of the certification of the election results, and the Company

will report such decision in a

Current Report on Form 8-K filed with the U.S. Securities and Exchange

Commission (“SEC”).

Bylaw Amendments

The Bylaws also provide that the Company’s

stockholders, in addition to the Board, shall have the power to

alter, amend or repeal the Bylaws and to make new

Bylaw provisions, in each case by the affirmative vote of the

holders of a majority of the shares of common stock in the Company then outstanding and

entitled to vote on the

proposed amendment. Stockholders must submit proposed amendments

to the Company’s Bylaws in compliance

with the Company’s Bylaws.

Policy Prohibiting Pledging and Hedging

The Company has a Policy Prohibiting Pledging and Hedging that applies to all officers

and directors of the

Company and provides that such individuals are prohibited from (i) making

or maintaining any pledges of securities

of the Company or otherwise holding securities of the Company in a margin

account, or (ii) engaging in any hedging

transactions with respect to securities of the Company,

such as prepaid variable forward contracts, equity swaps,

collars, and exchange funds.

Minimum Stock Ownership Guidelines

Each executive officer is required to retain an amount equal to at least 66%

of the net shares received through

the Company’s stock incentive plans.

“Net shares” are those shares that remain after shares are sold or netted to pay

the exercise price of stock options (if applicable) and withholding taxes.

There is no minimum time period required

for executive officers to achieve the stock ownership guidelines.

Directors who are not also executive officers of the Company are

required to hold shares of the Company’s

common stock or deferred stock units (“DSUs”) with a value equal to three times the

amount of the annual cash

retainer paid to directors. Directors are required to achieve the stock ownership

guideline by January 10, 2023 (the

- 18 -

fifth anniversary of the adoption of the stock ownership guidelines) or within five

years of first appointment to the

Board, whichever is later. Until the stock

ownership guideline is achieved, each director is encouraged to retain 60%

of net shares or DSUs received through the Company’s

stock incentive plans.

Incentive Compensation Recoupment Policy

Pursuant to its Incentive Compensation Recoupment Policy (“Clawback

Policy”), in the event of a required

restatement of the Company’s financial

statements due to material non-compliance with any financial reporting

requirement under applicable securities laws (a “Restatement”), the

Compensation Committee has the right, as to

each named executive officer of the Company (each, a “Covered

Executive”), to cause the Company to require the

reimbursement or forfeiture by such Covered Executive, to the extent permitted

by applicable law, of up to an

amount equal to the difference between (i) the Incentive Compensation

(as defined below) paid to such Covered

Executive based on the original financial information and (ii) the Incentive

Compensation that would have been paid

to such Covered Executive based on the information included in the Restatement,

as determined by the

Compensation Committee in its sole discretion.

For purposes of the Clawback Policy,

“Incentive Compensation”

means any cash, equity or equity-based

compensation, payment or award granted under any of the Company’s

incentive compensation plans (including

awards subject to service-based, performance-based or other conditions, or

any combination of the foregoing) that is

(i) granted, earned or vested based wholly or in part upon the attainment of

any financial reporting measure (which

includes, without limitation, the Company’s

stock price or total stockholder return) and (ii) deemed to be received

by the Covered Executive, in each case, during the fiscal period(s)

affected or covered by the Restatement, including

any fiscal period ending prior to December 13, 2017, the effective date

of the Clawback Policy. For

purposes of the

Clawback Policy, Incentive

Compensation is deemed to be received during the fiscal period in which the applicable

financial reporting measure is attained, even if the payment or grant occurs

later. Notwithstanding the foregoing,

the Compensation Committee determines that a Restatement is required,

the Incentive Compensation that may be

subject to recoupment under the Clawback Policy will be limited to

Incentive Compensation received during the two

completed fiscal years immediately preceding the date upon which the

Compensation Committee makes such

determination.

Cybersecurity

Both our Manager and our Board of Directors place a high priority on maintaining

security over our financial

information that can be accessed via the Internet and mitigating information

security risks. The Company contracts

with a third-party security firm to provide threat detection and conduct

annual testing on our systems. The Company

contracts with a third-party security firm to provide threat detection and conduct

annual testing on our systems. This

third-party security firm also provides training to our Manager’s

employees, helping our Manager’s information

technology team to maintain a state-of-the-art cyber security system and

stay up to date on the latest threats and

counter measures available. At least annually,

our Manager has the information technology team make a formal

presentation to our Board of Directors to keep the Board apprised of the

level of cyber security that exists to protect

our financial information and the latest threats that have emerged.

Our Manager’s information technology team

attends continuing education seminars provided by leading security and software

providers in the industry and

receives timely alerts to any new viruses or cyber threats as they occur.

We are not aware of any

material security

breach to date.

Accordingly, we have not incurred

any expenses over the last three years on information security

breaches.

COMPENSATION COMMITTEE

INTERLOCKS AND INSIDER PARTICIPATION

No member of the Compensation Committee was at any time during 2021 an officer

or employee of ours or any

of our affiliates, nor is any member a former officer

of ours or any of our affiliates. In addition, no executive officer

of the Company currently serves as a director or member of the Compensation

Committee of any entity that has one

or more executive officers serving as one of our directors.

- 19 -

COMPENSATION OF

DIRECTORS

2021 Compensation

Our non-employee director compensation program was designed

to link long-term equity-based compensation

awards to the preservation of stockholders’ book value per share and promote

equity accumulation and ownership

by our directors. These factors promote significant alignment between non-employee

director compensation and

both the interests of our long-term stockholders and the risk-management

emphasis of our investment philosophy.

Our non-employee director compensation for 2021 consisted of annual

cash and equity retainers and meeting

fees, as set forth in the table below.

Annual cash retainer

70,000

(1)

Board and Committee Meeting Fee (in person attendance)

1,500

Board and Committee Meeting Fee (telephonic attendance)

1,000

Annual Equity Compensation

(2)

60,000

_______________

(1)

The Chair of the Audit Committee received an additional annual cash retainer of $12,500, and the Chairs of the

Compensation Committee and the Nominating and Corporate Governance Committee each received an additional annual

cash retainer of $7,500. Cash retainers were paid in four substantially equal installments at the end of each calendar quarter

in 2021.

(2)

Each non-employee director also received equity compensation with a target aggregate value of $60,000 during 2021. As

explained below, equity awards are granted quarterly in the form of deferred stock units (“DSUs”) under the Orchid Island

Capital, Inc. 2021 Equity Incentive Plan (the “2021 Plan”).

Additionally, each independent

director receives reimbursement for travel and hotel expenses associated with

attending such Board and committee meetings, as well as for his or her attendance

at other meetings or events

related to the Company.

Non-employee directors may also be reimbursed for out-of-pocket expenses incurred

attending conferences or educational seminars that relate to their Board

services. These retainer fees are paid

quarterly.

As described in the above table, annual equity compensation was granted

to each non-employee director in the

form of DSUs at the end of each calendar quarter in 2021. Each DSU represents a right

to receive one share of the

Company’s common

stock. The DSUs are immediately vested and are settled at a future date based on the election

of the individual participant. The DSUs provide non-employee directors

with dividend equivalent rights, which

entitle the director to receive distributions declared by the Company on common

stock. These dividend equivalent

rights are settled in cash or additional DSUs at the participant’s

election. The DSUs do not include the right to vote

the underlying shares of common stock. For 2021, the target value

of each quarter’s equity award was set at

$15,000. The use of multiple grants during each calendar year emphasizes

our commitment to risk-assessment and

risk-management throughout each fiscal year.

The following table sets forth the compensation paid to non-employee directors

during 2021:

- 20 -

Director Compensation*

Fees Earned or

Name

Paid in Cash

(1)

Stock Awards

(2)

Total

W Coleman Bitting

112,500

60,000

172,500

Frank P.

Filipps

122,500

60,000

182,500

Ava L. Parker

108,500

60,000

168,500

Paula Morabito

104,000

60,000

164,000

_______________

Columns for “Option Awards,” “Non-Equity Incentive Plan Compensation,” “Changes in Pension Value

and Nonqualified

Compensation Earnings” and “All Other Compensation” have been omitted because they were not applicable.

(1)

Amount represents the fees earned by each of our non-employee directors during 2021.

(2)

Amount represents the aggregate grant date fair value of DSUs granted to each non-employee director during 2021

computed in accordance with the rules of Financial Accounting Standards Board Accounting Standards Codification Topic

718 (“FASB ASC Topic

718”). For information regarding assumptions underlying the valuation of equity awards, see Note

8 to our consolidated financial statements included in our annual report on Form 10-K for the year ended December 31,

2021. None of the directors held unvested stock-based awards as of December 31, 2021.

2022 Compensation

In December 2021, the Board approved a Director Cash Compensation

Deferral Election form, allowing non-

employee directors to receive payment of cash compensation in the form of

current cash, deferred cash or deferred

stock units beginning in 2022.

- 21 -

PROPOSAL 2: TO RATIFY

THE SELECTION OF INDEPENDENT REGISTERED PUBLIC

ACCOUNTING FIRM

Our Audit Committee has selected the accounting firm of BDO USA, LLP to serve as our

independent

registered public accounting firm for the year ending December 31, 2022,

subject to ratification of this appointment

by our stockholders. Action by stockholders is not required by law in the

appointment of an independent registered

public accounting firm, but this appointment is submitted by the Board

of Directors in order to give the stockholders

a voice in the designation of auditors. If the appointment is not ratified by

the stockholders, the Board of Directors

will reconsider its choice of BDO as our independent registered public

accounting firm. BDO has advised us that

neither it nor any member thereof has any financial interest, direct or indirect,

in the Company in any capacity. BDO

has served as our independent registered public accounting firm since our

formation in August 2010.

The Company anticipates that a representative of BDO will be present

at the Annual Meeting, will be given the

opportunity to make a statement if he or she so desires and will be available to respond

to appropriate questions.

THE BOARD RECOMMENDS A VOTE FOR

THE RATIFICATION

OF THE SELECTION OF BDO USA, LLP

AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.

- 22 -

PRE-APPROVAL

POLICIES AND PROCEDURES OF OUR AUDIT COMMITTEE

Our Audit Committee must pre-approve, to the extent required by

applicable law, all audit services and

permissible non-audit services provided by our independent registered public

accounting firm, except for any de

minimis non-audit services. All of the fees reflected below were approved by

our Audit Committee.

FEE DISCLOSURE

The following table lists the fees for services rendered by BDO, our independent

registered public accounting

firm for the years ended December 31, 2021 and 2020:

Fee Category

2021

2020

Audit Fees

636,670

637,800

Audit-Related Fees

Tax Fees

All Other Fees

Total Fees

636,670

637,800

Audit Fees

“Audit Fees” relate to fees and expenses billed by BDO for the annual audit, including

the audit of our financial

statements, review of our quarterly financial statements and for comfort

letters and consents related to stock

issuances and other corporate transactions.

Fees for the years ended December 31, 2021 and 2020 include $131,670

and $117,800, respectively,

for the audit related services performed in connection with the issuance of comfort

letters and consents related to stock issuances and the filing of registration

statements.

Audit-Related Fees

“Audit-Related Fees” consist of fees and expenses for assurance and related

services that are reasonably related

to the performance of the audit or review of our financial statements that are not

“Audit Fees.”

Tax Fees

“Tax Fees” consist of fees

and related expenses billed for professional services for tax compliance, tax

advice

and tax planning. These services include assistance regarding federal

and state tax compliance and tax planning and

structuring.

All Other Fees

“All Other Fees” consist of fees and expenses for products and services that are not

“Audit Fees,” “Audit-

Related Fees” or “Tax

Fees.”

- 23 -

AUDIT COMMITTEE REPORT

The Audit Committee reports to and acts on behalf of our Board of Directors

by providing oversight of our

financial management, independent auditor and financial reporting

controls and accounting policies and procedures.

Our management is responsible for preparing our financial statements and

systems of internal control, and the

independent auditor is responsible for auditing those financial statements and expressing

its opinion as to whether

the financial statements present fairly,

in all material respects, our financial position, results of operations and cash

flows in conformity with generally accepted accounting principles and internal

controls over financial reporting. The

Audit Committee is responsible for overseeing the conduct of these activities by

our management and the

independent auditor.

In this context, the Audit Committee has:

●

Met and held discussions with management and the independent auditor.

Management represented to the

Audit Committee that our financial statements as of and for the year ended

December 31, 2021 were

prepared in accordance with generally accepted accounting principles,

and the Audit Committee has

reviewed and discussed the quality,

not just the acceptability, of

the accounting principles, the

reasonableness of significant judgments and the clarity of disclosures included

in our financial statements

with management and the independent auditor.

●

Discussed with the independent auditor matters required to be discussed

by the applicable auditing

standards of the Public Company Accounting Oversight Board

as periodically amended (including

significant accounting policies, alternative accounting treatments and

estimates, judgments and

uncertainties) and the SEC.

●

Received the written disclosures and the letter from the independent auditor

required by the applicable

requirements of the Public Company Accounting Oversight Board regarding

the independent auditor’s

communications with the Audit Committee concerning independence,

and the Audit Committee and the

independent auditor have discussed the auditor’s independence from

the Company and our management,

including the matters in those written disclosures.

●

Discussed with our independent auditor, with

and without management present, their evaluations of our

internal accounting controls and the overall quality of our financial reporting.

The members of the Audit Committee are not currently professionally engaged

in the practice of auditing or

accounting and as such, cannot be considered experts in the field of auditing

or accounting, including with respect to

auditor independence. Members of the Audit Committee rely,

without independent verification, on the information

provided to them and on the representations made by management and BDO. Accordingly,

the Audit Committee’s

oversight does not provide an independent basis to determine that management

has maintained appropriate

accounting and financial reporting principles or appropriate internal

controls over financial reporting and procedures

designed to assure compliance with accounting standards and applicable

laws and regulations. Furthermore, our

considerations and discussions referred to above do not assure that (i) the

audit of our financial statements has been

carried out in accordance with generally accepted auditing standards,

(ii) our financial statements are presented in

accordance with generally accepted accounting principles or (iii) BDO is, in fact,

“independent.”

Based upon these reviews and discussions, the Audit Committee recommended to

the Board of Directors that

our audited financial statements be included in our 2021 Annual Report

for filing with the SEC.

By the Audit Committee:

Frank P.

Filipps, Chair

W Coleman Bitting

Paula Morabito

- 24 -

EXECUTIVE OFFICERS

The following sets forth certain information with respect to our named

executive officers:

Name

Age

Position

Robert E. Cauley ..................

Chief Executive Officer, President and Chairman of the Board

George H. Haas, IV ..............

Chief Financial Officer, Chief Investment Officer, Secretary and

Director

Biographical information on Mr.

Cauley and Mr. Haas is provided above.

- 25 -

COMPENSATION DISCUSSION

AND ANALYSIS

Our Compensation Discussion and Analysis describes our compensation

program, objectives and policies for

the executive officers named in this proxy statement and our executive

officers generally.

Overview of Compensation Program and Philosophy

We have no

employees. We are externally

managed by our Manager pursuant to a management agreement

between our Manager and us. Our executive officers

and other key professionals are employees of our Manager,

which we refer to as our Manager’s employees, and, except as described

below, are compensated by Bimini

for their

services to us. We reimburse

our Manager for our allocable share of the compensation of our Chief Financial

Officer, including, without

limitation, annual base salary,

any related withholding taxes and employee benefits based

on the percentage of time spent on our affairs. We

also make awards under our incentive compensation plans and

equity-based plans from time to time. Our management agreement provides

that our Manager will provide us with a

management team, including our Chief Executive Officer,

Chief Financial Officer and Chief Investment Officer

similar positions. Each of our officers are employees

of Bimini. The Compensation Committee of Bimini’s

Board of

Directors will determine the levels of base salary and cash incentive compensation

that may be earned by our

officers based on factors as Bimini may determine are

appropriate. Bimini will also determine whether and to what

extent our officers will be provided with pension, long-term

or deferred compensation and other employee benefits

plans and programs. We

expect that Bimini will use proceeds from the management agreement and overhead

sharing

agreement in part to pay compensation to its officers and employees.

Compensation Committee Consideration of the 2021 Advisory Vote of our Stockholders on Executive

Compensation

At our 2021 annual meeting of stockholders, we provided our stockholders

with the opportunity to cast an

advisory vote on executive compensation. Over 92% of the votes cast (i.e.,

excluding abstentions and broker non-

votes) on the 2021 Say-on-Pay vote were voted in favor of the proposal. We

have considered the results of the 2021

vote and believe the support of our stockholders for that proposal indicates that

our stockholders are supportive of

our approach to executive compensation. Thus, we did not make changes

to our executive compensation

arrangements in response to the vote. In the future, we will continue to consider

the outcome of our Say-on-Pay

votes when making compensation decisions regarding our named executive

officers.

Compensation Philosophy

We seek superior

risk-adjusted returns for our stockholders relative to other returns available

to fixed income

and equity investors. We

are willing to accept lesser returns in order to mitigate the volatility and possible loss of

stockholders’ equity.

Our compensation program seeks to:

●

reward superior performance relative to peer group performance;

●

emphasize consistent performance relative to market-driven interest rates;

●

promote book value preservation;

●

reduce peer-influenced, risk-taking incentives; and

●

evaluate such performance over time frames as long as five years.

Compensation Paid by our Manager to our Named Executive Officers in 2021

Other than as described in “—2021 Compensation Components—Equity-Based Compensation

,” we did not pay

any compensation to our named executive officers during

the year ended December 31, 2021. The compensation

that we reimbursed to our Manager for our allocable share of the compensation

of our Chief Financial Officer is set

forth below in “Certain Relationships and Related Transactions

—Management Agreement.”

- 26 -

Messrs. Cauley and Haas also serve as the executive officers of Bimini,

which is a public company that files its

Exchange Act reports with the SEC. Our Manager is a wholly-owned subsidiary

of Bimini. Bimini’s compensation

committee sets the compensation of Messrs. Cauley and Haas on an annual

basis. See Bimini’s proxy statement for

its 2021 annual stockholders meeting for a description of Messrs. Cauley’s

and Haas’ compensation paid by Bimini

and Bimini’s compensation philosophy.

The Company does not have any input into how Bimini’s

compensation

committee determines the compensation paid to Messrs. Cauley and Haas. Bimini’s

compensation of Messrs. Cauley

and Haas is tied to various performance metrics of Bimini Capital and its varied operations

– principally the

management of its own RMBS portfolio and acting as the external manager of the

Company via a subsidiary.

For the fiscal year ended December 31, 2021, our Manager has informed us

that 32%,

or approximately $3.2

million, of the management fee paid by the Company to the Manager would have

been allocable to named executive

officer compensation based on the percentage of net revenues allocable

to the asset management segment of its

operations, as reported by the Manager in the notes to its financial statements included

in its Form 10-K for the year

ended December 31, 2021. Of this compensation, our Manager has informed us that

approximately 43% was fixed

and 57% was variable or incentive pay.

Our Manager and its affiliates do not use a specific formula to calculate

the

variable or incentive pay portion of our named executive officers’

compensation. Additionally,

our Manager and its

affiliates do not explicitly set future variable or incentive

compensation on the basis of the compensation the named

executive officers earned in prior years. Generally,

in determining each executive’s variable or

incentive pay, our

Manager has informed us that its compensation committee takes into account

factors such as the individual’s

position, his or her contribution to the Manager,

market practices, and the recommendations of our Compensation

Committee. We did

not, nor did our Manager or its affiliates, retain a compensation

consultant in connection with

the compensation of our named executive officers

in 2021.

Compensation Policies and Practices as They Relate to Risk Management

We pay our

Manager a management fee that is a percentage of our stockholders’ equity,

as defined in the

management agreement. This management fee is not tied to our performance

and, as a result, we believe this

management fee is not reasonably likely to have a material adverse effect

on us. We have designed

the incentives

related to award grants to employees of our Manager under the 2021

Plan, as such policies and practices relate to or

affect risk taking by our Manager on our behalf, in a manner that we believe

will not cause our Manager to seek to

make higher risk investments. This is largely because potential

awards under the 2021 Plan payable to employees of

our Manager avoid placing undue emphasis on the maximization of net income

at the expense of other criteria, such

as preservation of capital, to achieve higher awards. We

have designed our award criteria related to the 2021 Plan in

an effort to provide the proper incentives to our Manager’s

employees to maximize our performance in order to

serve the best interests of our stockholders. Our Board of Directors and the Compensation

Committee monitors our

award criteria related to our incentive compensation plans and the 2021

Plan to determine whether its risk

management objectives are being met with respect to incentivizing our

Manager’s employees.

2021 Compensation Components

Cash and Other Compensation

Our named executive officers and other personnel who conduct

our regular business are employees of our

Manager. Accordingly,

we do not pay or accrue any salaries to our officers. However,

we may elect to pay cash

incentive awards to our officers in the future.

Equity-Based Compensation

As with our non-employee directors, our Compensation Committee may,

from time to time, grant equity awards

in the form of options, stock awards, stock appreciation rights, Performance Units (as

defined below), incentive

awards or other equity-based awards to the employees of our Manager,

which includes our named executive

officers, pursuant to the 2021 Plan. We

expect these awards to be designed to align the interests of the employees of

our Manager with those of our stockholders by allowing the employees of our Manager

to share in the creation of

value for our stockholders through stock appreciation and dividends.

We expect these

equity awards generally to be

subject to vesting requirements over a number of years, and designed to promote

the retention of employees and

executives of our Manager and to achieve strong performance for our

company. These awards will further

provide

- 27 -

flexibility to us in our ability to enable our Manager to attract, motivate and retain

talented individuals at our

Manager.

We believe our

compensation policies are particularly appropriate since we are an externally managed

REIT. To

qualify as a REIT for federal income tax purposes, regulations require us to distribute

to our stockholders each

calendar year at least 90% of our REIT taxable income (including certain

items of non-cash income), determined

without regard to the deduction for dividends paid and excluding net capital gain.

As a result, we believe that our

stockholders are principally interested in receiving attractive risk-adjusted

dividends and stability in book value.

Accordingly, we want

to provide an incentive to our directors and the employees of our Manager

that rewards

success in achieving these goals. We

believe that equity-based awards are consistent with our stockholders’

interest

in book value stability, as these individuals

will be incentivized to protect book value for stockholders over time. We

believe that this alignment of interests provides an incentive to our Manager’s

employees to implement strategies

that will enhance our long-term performance and promote growth in

dividends while preserving book value.

As described below in “—Performance Awards”

and “—2021 Long-Term Equity

Incentive Compensation

Plan,” the Company has historically approved annual compensation plans

under the Orchid Island Capital, Inc. 2012

Equity Incentive Plan (the “2012 Plan”) and approved an annual incentive

compensation plan under the 2021 Plan

pursuant to which if certain performance goals are met over one-, three- and five-year

performance periods,

participants in such annual incentive compensation plans will receive performance

-based bonuses. In 2021,

performance bonuses were paid out for performance achieved as of December

31, 2020 with respect to each of (i)

the one-year performance goal under the 2020 Long-Term

Equity Incentive Compensation Plan (the “2020

LTICP”),

(ii) the three-year performance goal under the 2018 Long-Term

Equity Incentive Compensation Plan (the

“2018 LTICP”),

and (iii) the five-year performance goal under the 2016 Long-Term

Equity Incentive Compensation

Plan (the “2016 LTICP”).

See “Executive Compensation—Summary Compensation Table

—Summary

Compensation Table”

and “Executive Compensation—Summary Compensation Table

—Grants of Plan-Based

Awards

Table” for a discussion

of the bonuses paid out during 2021.

Performance Awards

The Compensation Committee may also grant performance awards, which

may be granted either alone or in

addition to other awards. Performance awards may be stock-based awards

or cash-based awards (in either case,

“Performance Units”). The performance criteria that apply to performance

awards and the period on which

performance is measured (the “Performance Period”) shall be determined

by the Compensation Committee.

Dividend equivalent rights may be granted in conjunction with a performance

award. Dividend equivalents will be

subject to the same vesting requirements as the performance award and will be

accumulated and paid after, and only

to the extent that, the performance objectives for the performance award are achieved.

At the conclusion of the

Performance Period, which may not be shorter than twelve months, the

Compensation Committee shall evaluate the

degree to which any applicable performance goals have been achieved and

the performance awards have been

earned and shall cause to be delivered the amount earned in either cash, shares,

other property, or any combination

thereof, in the sole discretion of the Compensation Committee at the time

of payment.

As described below in “—2021 Long-Term

Equity Incentive Compensation Plan,” the Company has

historically approved annual compensation plans under the 2012

Plan and approved an annual incentive

compensation plan under the 2021 Plan pursuant to which if certain performance

goals are met over one-, three-

and

five-year performance periods, participants in such annual

incentive compensation plans will receive performance-

based bonuses, as determined by the Compensation Committee in its sole discretion.

Historically these bonuses have

been settled 50% in immediately vested shares of common stock and

50% in Performance Units. In 2021,

performance bonuses were paid out for performance achieved as of December

31, 2020 with respect to each of (i)

the one-year performance goal under the 2020 LTICP,

(ii) the three-year performance goal under the 2018 LTICP

and (iii) the five-year performance goal under the 2016 LTICP.

See “Executive Compensation—Summary

Compensation Table

—Summary Compensation Table”

and “Executive Compensation—Summary Compensation

Table—Grants of Plan-Based

Awards

Table” for a discussion

of the bonuses paid out during 2021, and see “—

Compensation Decisions Following Fiscal Year

End—2022 Long-Term

Equity-Based Incentive Awards”

for a

discussion of Performance Units granted to our executive officers for

performance achieved as of December 31,

2021.

- 28 -

2021 Long-Term Equity Incentive Compensation Plan

During March 2021, we adopted the 2021 Long-Term

Equity Incentive Compensation Plan (the “2021

LTICP”).

The Compensation Committee adopted the 2021 LTICP

to continue its implementation of our

compensation philosophy,

several factors of which are described in more detail below.

●

Superior Performance Relative to Peer Group

Performance

. The Compensation Committee determines a

potential performance bonus based on our financial performance compared

to the financial performance of

the Peer Group (as hereinafter defined).

●

Consistent Performance Relative to Market-Driven Interest

Rates

. Returns we can earn are, to a certain

extent, correlated with the interest rate on the current-coupon Agency

RMBS (the “Agency RMBS rate”).

The Compensation Committee determines a potential performance bonus

based on our financial

performance compared with the Agency RMBS rate. Setting such a market-driven

benchmark creates

incentives to achieve attractive financial performance without exposing

us to inappropriate risk taking such

as might be encouraged by:

●

low absolute interest rates;

●

a small difference between the Agency RMBS rate and the

comparable duration U.S. Treasury

obligations; or

●

excess emphasis on peer-relative performance.

●

Book Value

Preservation

. One of the most significant performance factors for any Agency RMBS REIT is

an event of book value impairment, which occurs when market dislocations

force asset sales and the

realization of significant losses of stockholders’ equity.

Such events have occurred in the past when interest

rates rose sharply,

the capital markets faced significant liquidity challenges or when the Federal Reserve

changed monetary policy unexpectedly.

We seek to minimize the impact

of these events, and make this

success a significant element of differentiation from our peers.

The Compensation Committee determines a

potential performance bonus based on our book value performance compared

with the book value

performance of our Peer Group. Because book value performance is part of the

calculation of financial

performance for us and our Peer Group, we believe that the addition of a potential performance

bonus

focused specifically on book value performance adds emphasis to our focus on

book value. Additionally,

the performance of unvested equity-based compensation awards

will be adversely affected by events of

book value impairment and positively affected by events of

extraordinary book value preservation.

●

Peer-Influenced, Risk-Taking

Incentives

. One of the easiest ways to increase returns is to take extra risk,

whether owning longer duration assets, using more leverage or reducing hedge

coverage. In our opinion,

one unintended consequence of peer-relative incentive

compensation programs is that they encourage peer-

relative risk taking. Further, if several of our peers also

focus on peer-relative performance, there is a

perverse incentive among these companies to continually add risk to improve relative

performance. We

seek to avoid participating in a “risk-taking arms race” relative to our Peer Group.

The Compensation

Committee sets the relative sizes of the three distinct potential performance

bonuses in order to limit the

influence of the risk-taking strategies adopted by our Peer Group.

●

Time Frames as Long as Five Years

. We evaluate our

performance over one-, three-

and five-year time

frames, evaluating our performance compared with benchmarks established

at the beginning of each period.

In our opinion, a focus on longer-time frames creates a level of

continuity in strategy implementation that

could be disrupted by focusing on maximizing a sequence of single year returns.

The longer time frames

are more likely to capture periods when successful risk-avoidance

is material to our financial performance,

a feature which aligns this choice with our emphasis on risk management

and book value preservation. The

Compensation Committee uses larger performance

bonuses for strong performance generated over the

three-

and five-year time frames.

- 29 -

All employees of the Manager, and employees

of entities affiliated with the Manager are eligible to participate

in the 2021 LTICP.

These employees are referred to as “Participants.” For the avoidance of doubt,

Messrs. Cauley

and Haas are Participants in the 2021 LTICP.

Being a Participant does not entitle the individual to an award under

the 2021 Plan. The Compensation Committee has absolute sole discretion

over all aspects of the 2021 LTICP,

including the ability to reduce the amount of any bonus award or

the size of the bonus pool even if the performance

objectives and other terms of the 2021 LTICP

were satisfied.

Participants are eligible to earn awards under the 2021 LTICP

for performance over the next one-year,

three-

year and five-year periods. A bonus pool was established under the

2021 LTICP for

each of the one-, three-

and

five-year measurement periods. The amount credited to the bonus

pool is based on the Company’s performance

under each of the three performance measures of the 2021 LTICP

for each of the three measurement periods. The

Compensation Committee, in its discretion, will determine each Participant’s

award (i.e., the percentage of the

bonus pool paid to each Participant) following the end of each of the one-,

three-

and five-year performance periods,

subject to each Participant’s

continued service relationship with the Company on such determination

date.

The maximum amount that may be credited to the bonus pool for each measurement

period equaled the average

management fees paid by the Company to the Manager (pursuant to the

terms of the management agreement

between the Company and the Manager) for such period multiplied by

the applicable percentage described in the

table below. Under the

2021 LTICP,

the maximum bonus pool for awards to be issued for performance

during (i) the

one-year measurement period ended December 31, 2021 equaled 20%

of the management fees paid for 2021, (ii) the

three-year measurement period ending December 31, 2023 will equal

35% of the average management fees

(calculated on an annual basis) paid for 2021 through 2023

and (iii) the five-year measurement period ending

December 31, 2025 will equal 45% of the average management fees (calculated

on an annual basis) paid for 2021

through 2025.

As noted above, the amount credited to the bonus pool for each measurement

period reflects the Company’s

performance measured against three criteria (which are described below).

The table below illustrates the maximum

amount that could be credited to the bonus pool for each measurement

period (as a percentage of the average

management fees for the applicable period). The table also shows the amount

that could be credited to the bonus

pool for each measurement period (also as a percentage of the average

management fees for the applicable period)

for achievement of objectives with respect to each of the performance criteria.

For example, the maximum amount

that could be credited to the bonus pool for the three-year measurement period

based on Agency RMBS rate relative

performance (as defined below) is 10.50% of the average management

fees paid for 2021 through 2023.

1-year

3-year

5-year

Peer-relative financial performance...............................................

9.00%

15.75%

20.25%

Agency RMBS rate relative performance......................................

6.00%

10.50%

13.50%

Peer-relative book value performance

...........................................

5.00%

8.75%

11.25%

Total Measurement Period ................................

............................

20.00%

35.00%

45.00%

The Compensation Committee established the following performance

measures and the performance thresholds

that must be satisfied for awards to be earned under the 2021 LTICP.

Peer-Relative Financial Performance

. No amount is earned for this performance measure unless the Company’s

financial performance for the applicable measurement period exceeds

the mean of the financial performance of the

companies in the Peer Group (defined below) for the applicable measurement

period. The financial performance of

the Company and those in the Peer Group equals the sum of total dividends

paid during the measurement period and

the change in book value during the measurement period divided by the book

value on the first day of the applicable

measurement period. The companies in the “Peer Group” consist of AGNC Investment

Corp., Annaly Capital

Management, Inc., Arlington Asset Investment Corp., ARMOUR Residential

REIT, Inc., Capstead

Mortgage

Corporation, Cherry Hill Mortgage Investment Corporation, Dynex

Capital, Inc. and Invesco Mortgage Capital Inc.

Agency RMBS Rate Relative Performance

. The Company’s performance

under this performance measure

equaled the percentage determined by dividing the sum of the change

in book value per share during the applicable

measurement period and total dividends paid per share during the measurement

period by the book value per share

on the first day of such measurement period. No amount is earned for this performance

measure unless the

Company’s performance,

as calculated in the preceding sentence for the applicable measurement period,

exceeds the

- 30 -

Agency RMBS rate of 1.342% on January 1, 2021

plus 400 bps, or 5.342%, multiplied by the number of years in the

measurement period.

Peer-Relative Book Value

Performance

. No amount will be earned for this performance measure unless the

Company’s change in book

value for the applicable measurement period (calculated in accordance with

the

following sentence) exceeds the mean change in book value for the companies in the

Peer Group. The change in

book value for the Company and those in the Peer Group will be determined by subtracting

the book value on the

first day of the measurement period from the book value on the last day in the measurement

period, with such

amount divided by the book value on the first day of the measurement period.

If the Company’s results for

a performance measure equal or are less than the threshold for a measurement

period, no amount will be added to the bonus pool for the measurement period

with respect to that measurement

criteria. The table below details the amounts by which the Company’s

performance must exceed the threshold

performance measures described above for the maximum bonus award to be

added to the bonus pool. Linear

interpolation will be used for results falling between the threshold and

the result that must be achieved to earn the

maximum award.

1-year

3-year

5-year

Peer-relative financial performance........................

Threshold + 5.0%

Threshold + 10.0%

Threshold + 15.0%

Agency RMBS rate relative performance...............

Threshold + 5.0%

Threshold + 10.0%

Threshold + 15.0%

Peer-relative book value performance

....................

Threshold + 2.0%

Threshold + 4.0%

Threshold + 6.0%

The Committee anticipates that 50% of earned bonuses will be paid

to Participants in immediately vested shares

of the Company’s common stock

and 50% will be paid in the form of Performance Units, all of which will be issued

under the 2021 Plan. The number of immediately vested shares of the

Company’s common stock and Performance

Units to be issued in satisfaction of the earned bonuses will be determined by dividing

the dollar amount of each

Participant’s award (i.e.,

the percentage of the bonus pool paid to each Participant) by the average closing price

the Company’s common stock on

the NYSE for the 10 trading days preceding the grant date of the common stock

and Performance Units, rounded down to the nearest whole number.

The Performance Units will vest at the rate of

10% per quarter commencing with the first quarter after the one-year anniversary

of the end of the applicable

measurement period, with the Participant receiving one share of the

Company’s common stock for each

Performance Unit that vests. The Participant must continue to be employed

by the Company as of the end of each

such quarter in order to vest in the number of Performance Units scheduled to vest on that date.

The Performance Units will contain dividend equivalent rights which entitle

the Participants to receive

distributions declared by the Company on common stock. One Performance

Unit is equivalent to one share of

common stock for purposes of the dividend equivalent rights. Other than

dividend equivalent rights, the

Performance Units do not entitle the Participants to any of the rights of a stockholder

of the Company.

The number of outstanding Performance Units actually earned by

a Participant and settled on the applicable

vesting date may be adjusted if any of the following events occur:

Book Value

Impairment

. A “Book Value

Impairment” will occur if over any two consecutive quarters the

following conditions are satisfied: (i) the Company’s

book value per share declines by 15% or more during the first

of such two quarters and (ii) the Company’s

book value per share decline from the beginning of such two quarters

the end of such two quarters is at least 10%. If a Book Value

Impairment occurs, then the number of Performance

Units that are outstanding as of the last day of such two quarter period shall be reduced

by 15%.

Extraordinary Book Value

Preservation

. “Extraordinary Book Value

Preservation” will occur in any quarter in

which the following conditions are satisfied: (i) the median change in the book

value per share of specified peer

companies (the “Median Book Value

Decline”) is a decline of 6% or more and (ii) the Company’s

book value per

share either (a) increases or (b) declines by a percentage that is less than 50% of the Median Book

Value

Decline. If

an event of Extraordinary Book Value

Preservation occurs, then the number of Performance Units that are

outstanding as of the last day of the quarter in which the Extraordinary Book Value

Preservation has occurred will

be increased by 5 basis points for every 1 basis point of difference

between the Company’s book value

per share

percentage change and the Median Book Value

Decline during such quarter.

- 31 -

Outperform All Peer Companies

. The Company will “Outperform All Peer Companies” in any quarter

in which

the following conditions are satisfied: (i) the specified peer companies

all experience a decline in book value per

share and (ii) the Company’s book

value per share either (a) increases or (b) declines by an amount that is less than

the decline experienced by each peer company.

If the Company Outperforms All Peer Companies in any quarter,

then the number of Performance Units that are outstanding as of the last day of such quarter shall

increase by 10%.

As described below under “Executive Compensation—Potential Payments Upon

Termination or Change

Control,” in the event of a Change in Control (as defined in the 2021 Plan) or a Participant’s

termination of service

due to his or her death or disability,

all of his or her unvested Performance Units will become fully vested as of the

date of such Change in Control or termination of service, as applicable, without

any adjustment in the event of a

Book Value

Impairment, Extraordinary Book Value

Preservation or if the Company Outperforms All Peer

Companies.

The Compensation Committee designated the following REITs

(collectively,

the “Peer Group”) for purposes of

the financial performance benchmarks. The Compensation Committee believes

investors evaluate us in the context

of our performance relative to other mortgage REITs

with similar investment strategies. We

consider these

companies to be the most relevant for purposes of benchmarking our financial

performance and our primary

competitors for both capital and executive talent.

AGNC Investment Corp. (NYSE: AGNC)

Annaly Capital Management Inc. (NYSE: NLY)

Arlington Asset Investment Corp. (NYSE: AAIC)

ARMOUR Residential REIT,

Inc. (NYSE: ARR)*

Capstead Mortgage Corp. (NYSE: CMO)

Cherry Hill Mortgage Investment Corp. (NYSE: CHMI)*

Dynex Capital, Inc. (NYSE: DX)

Invesco Mortgage Capital Inc. (NYSE: IVR)

Externally managed

Compensation Decisions Following Fiscal Year End

2022 Long-Term Incentive Compensation Plan

On February 16, 2022, the Compensation Committee approved the 2022

Long-Term Equity Incentive

Compensation Plan (the “2022 LTICP

”). The 2022 LTICP

generally has the same construct as described above for

the 2021 LTICP.

Messrs. Cauley and Haas are participants in the 2022 LTICP.

2022 Long-Term Equity-Based Incentive Awards

On March 28, 2022, pursuant to the 2021 LTICP,

the 2019

Long-Term Equity

Incentive Compensation Plan

(the “2019 LTICP

”) and the 2017 Long-Term

Equity Incentive Compensation Plan (the “2017 LTICP”)

we made

equity awards to Mr. Cauley and

Mr. Haas for their service to us during

2021. The equity awards were comprised

50% of immediately vested shares of common stock and 50% of Performance

Units, in each case, granted under the

2021 Plan, and were made based on the Company’s

achievement of the one-year performance goals under the 2021

LTICP,

the three-year performance goals under the 2019 LTICP

and the five-year performance goals under the 2017

LTICP.

The equity awards made to Mr. Cauley

consisted of 77,352 immediately vested shares of common stock and

77,352 Performance Units. The equity awards made to Mr.

Haas consisted of 58,947 immediately vested shares of

common stock and 58,947 Performance Units. See “Executive Compensation

—Narrative Disclosure to Summary

Compensation Table

and Grants of Plan-Based Awards

Table—Supplemental

Compensation Table”

for a discussion

of the equity awards granted to each of our named executive officers

in 2022 for 2021 performance.

- 32 -

COMPENSATION COMMITTEE

REPORT

The Compensation Committee of the Company has reviewed and discussed

the Compensation Discussion and

Analysis required by Item 402(b) of Regulation S-K with management

and, based on such review and discussions,

the Compensation Committee recommended to the Board that the Compensation

Discussion and Analysis be

included in this proxy statement.

By the Compensation Committee:

W Coleman Bitting, Chair

Frank P.

Filipps

Ava L. Parker

- 33 -

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth the information required by Item 402 of

Regulation S-K promulgated by the SEC.

The amounts shown represent the compensation paid to the named executive

officers (who, for avoidance of doubt,

are employees of the Manager) as consideration for services rendered

to the Company.

Summary Compensation Table*

Name

Year

Stock Awards

(1)

Total

Robert E. Cauley

2021

737,788

President and Chief Executive Officer

2020

2019

George H. Haas, IV

2021

562,242

Chief Financial Officer

2020

2019

_______________

Columns for “Salary,” “Option Awards,”

“Bonus,” “Non-Equity Incentive Plan Compensation,” “Changes in Pension Value

and Nonqualified Compensation Earnings” and “All Other Compensation” have been omitted because they were not

applicable in any of the last three fiscal years.

(1)

Amounts reported in this column for 2021 represent the grant date fair value of stock awards granted in 2021 for

performance obtained as of December 31, 2020, computed in accordance with FASB ASC Topic

718. Neither Messrs.

Cauley or Haas received equity-based awards in 2020 because certain performance goals were not met as of December 31,

2019 under the 2019 LTICP,

2017 LTICP and the 2015 LTICP.

Similarly, neither of the named executive officers received

equity-based awards in 2019 because certain performance goals were not met under the applicable incentive plans as of

December 31, 2018.

Grants of Plan-Based Awards*

Estimated

Future Payouts

of Shares or Units

All Other Stock

of Stock Under

Awards: Number

Grant Date Fair

Grant

Award

Equity Incentive

of Shares or

Value of Stock and

Name

Date

Plan Awards (#)

Units of Stock

(3)

Option Awards

(4)

Robert E. Cauley

March 22, 2021

(1)

March 17, 2021

62,705

368,894

March 22, 2021

(2)

March 17, 2021

62,705

368,894

George H. Haas, IV

March 22, 2021

(1)

March 17, 2021

47,785

281,121

March 22, 2021

(2)

March 17, 2021

47,785

281,121

_______________

Columns for "Estimated Future Payouts under Non-Equity Incentive Plan Awards," "All Other Option Awards"

and

"Exercise or Base Price of Option Awards" have been omitted because they were not applicable.

(1)

In March 2021, Performance Units were issued under the 2012 Plan with respect to 2020 service to the Company based on

achievement of performance goals under the 2020 LTICP,

2018 LTICP and 2016 LTICP,

as described in “Compensation

Discussion and Analysis—2021 Compensation Components—Equity-Based Compensation” and “Compensation Discussion

and Analysis—2021 Compensation Components—Performance Awards.”

Beginning in 2022, 10% of the Performance

Units granted to Messrs. Cauley and Haas in 2021 will vest on the fifth day prior to the end of the first ten calendar quarters

- 34 -

beginning on March 26, 2022, subject to each named executive officer’s continued service relationship with the Company

on each applicable vesting date.

As described in the Compensation Discussion and Analysis under “2021 Compensation

Components—Performance Awards” and “2021 Long-Term

Equity Incentive Compensation Plan,” Performance Units do

not have threshold, target and maximum values as contemplated by SEC rules. Instead, the Company must achieve certain

performance goals for Performance Units to be granted, and the number of Performance Units that actually become earned

at the end of the applicable measurement period may be adjusted prior to the applicable vesting date based on the occurrence

of certain performance-related events.

(2)

In March 2021, immediately vested common stock was awarded under the 2012 Plan with respect to 2020 service to the

Company based on achievement of performance goals under the 2020 LTICP,

2018 LTICP and 2016 LTICP,

as described in

“Compensation Discussion and Analysis—2021 Compensation Components—Equity-Based Compensation” and

“Compensation Discussion and Analysis—2021 Compensation Components—Performance Awards.”

(3)

Of these amounts, 23,667 and 17,370 shares, respectively, were surrendered by Messrs. Cauley and Haas to meet federal

income tax withholding obligations associated with the awards of fully vested shares of common stock.

(4)

Amount represents the aggregate grant date fair value of immediately vested shares of common stock and Performance

Units, as applicable, calculated in accordance with FASB ASC Topic

718 and based on the average market closing price of

our common stock for the 10 day period ending on March 19, 2021.

Narrative Disclosure to Summary Compensation Table

and Grants of Plan-Based Awards

Table

Based on the application of our compensation principles and the Company’s

achievement of performance goals

under each of the 2021 LTICP,

2019

LTICP and

2017

LTICP,

as described in “Compensation Discussion and

Analysis—Compensation Decisions Following Fiscal Year

End—2022

Long-Term Equity-Based

Incentive

Awards,”

the Compensation Committee approved the performance bonuses shown

in the table below for the named

executive officers in March 2022. Because the size of each named

executive officer’s performance bonus (i.e., the

percentage of the relevant bonus pool under each of the 2021 LTICP,

2019 LTICP

and 2017 LTICP

to be granted to

each named executive officer) was unknown until March 2022

such that the awards were not granted to the named

executive officers until March 2022, these awards are not

included in the Summary Compensation Table

or the

Grants of Plan-Based Awards

table above. The table is not a substitute for, and should

be read together with the

Summary Compensation Table,

which presents 2021 named executive officer compensation

in accordance with SEC

disclosure rules and includes additional compensation elements and other

important information.

Supplemental Compensation Table

Performance

Name

Stock Awards

(1)

Unit Awards

(2)

Total

Robert E. Cauley

256,037

512,074

President and Chief Executive Officer

George H. Haas, IV

195,117

390,234

Chief Financial Officer

_______________

(1)

Amounts represent the grant date fair value of immediately vested shares of common stock calculated in accordance with

FASB ASC Topic

718 granted to each of our named executive officers on March 28, 2022, with respect to 2021 service to

the Company. Messrs. Cauley and Haas were awarded 77,352 and 58,947 shares of common stock, respectively, with a

value of $3.31 per share. Of these amounts, 28,590 and 21,428 shares, respectively, were surrendered by Messrs. Cauley and

Haas to meet federal income tax withholding obligations associated with the awards.

(2)

Amounts represent the grant date fair value of Performance Units calculated in accordance with FASB ASC Topic

718

granted to each of our named executive officers on March 28, 2022, with respect to 2021 service to the Company. Messrs.

Cauley and Haas were awarded 77,352 and 58,947 Performance Units, respectively, with a value of $3.31 per share.

Beginning in 2023, 10% of the Performance Units granted to Messrs. Cauley and Haas in 2022 will vest on the fifth day

prior to the end of the first ten calendar quarters beginning on March 26, 2023, subject to each named executive officer’s

continued service relationship with the Company on each applicable vesting date, and subject to adjustment as described in

the Compensation Discussion and Analysis under “2021 Long-Term Equity Incentive Compensation Plan.”

- 35 -

Outstanding Equity Awards

for Fiscal Year

-Ended December 31, 2021

The following table reflects our outstanding equity awards as of December 31,

2021:

Equity Incentive

Plan Awards:

Number of

Market or Payout

Number of

Market Value

Unearned Shares,

Value of Unearned

Shares or Units

of Shares

Units or Other

Shares, Units or

of Stock That

Units of Stock That

Rights That Have

Other Rights That

Name

Have Not Vested (#)

Have Not Vested

Not Vested (#)

(1)

Have Not Vested

(2)

Robert E. Cauley

62,705

282,173

George H. Haas, IV

47,785

215,033

_______________

Columns related to option awards have been omitted because they were not applicable.

(1)

Amounts represent the number of unvested Performance Units granted on March 22, 2021 with respect to performance

achieved under the 2020 LTICP,

2018 LTICP and 2016 LTICP.

Beginning in 2022, 10% of the Performance Units granted

to Messrs. Cauley and Haas in 2021 will vest on the fifth day prior to the end of the first ten calendar quarters beginning on

March 26, 2022, subject to each named executive officer’s continued service relationship with the Company on each

applicable vesting date. As described in the Compensation Discussion and Analysis under “2021 Compensation

Components—Performance Awards” and “2021 Long-Term

Equity Incentive Compensation Plan,” Performance Units do

not have threshold, target and maximum values as contemplated by SEC rules. Instead, the Company must achieve certain

performance goals for Performance Units to be granted, and the number of Performance Units that actually become earned

at the end of the applicable measurement period may be adjusted prior to the applicable vesting date based on the occurrence

of certain performance-related events.

(2)

The amounts in this column were calculated by multiplying $4.50, the closing price of our common stock on December 31,

2021, by the number of awards reported.

Option Exercises and Stock Vested

Stock Awards

Number of

Shares Acquired

Value Realized

Name

on Vesting (#)

(1)

on Vesting ($)

(2)

Robert E. Cauley

1,951

10,906

George H. Haas, IV

1,596

8,923

_______________

Columns related to option awards have been omitted because they were not applicable.

(1)

This column represents the number of Performance Units held by each named executive officer that vested during 2021.

(2)

This column reflects the aggregate market value realized by each named executive officer upon vesting, calculated by

multiplying the number of Performance Units that vested (including shares withheld for tax withholding purposes) by the

closing price of our common stock on the applicable vesting date.

Pension Benefits

We do not

sponsor any qualified or non-qualified defined benefit pension plans.

- 36 -

Non-qualified Deferred Compensation

We do not

have any non-qualified deferred compensation plans.

Potential Payments Upon Termination or Change in Control

We are not party

to any agreements or arrangements with either of our named executive officers

providing for

cash severance payments or benefits upon such named executive officer’s

termination of employment for any reason

or upon a change in control of the Company.

However, pursuant to the terms of the 2020

LTICP,

2018 LTICP and

2016 LTICP,

all unvested Performance

Units held by Messrs. Cauley and Haas vest immediately upon (i) a “Change in

Control” (as defined in the 2012

Plan and the 2021 Plan and described below) and (ii) upon such named executive

officer’s termination of service as

an executive officer of the Company due to his death

or disability, in each case, so long as such named

executive

officer was serving as an executive officer of

the Company at the time of such Change in Control or termination of

service. To the

extent any of the adjustment events set forth in the applicable incentive plans with respect

to such

Performance Units (i.e., a book value impairment, extraordinary book value preservation

or if the Company

outperforms all peer companies) occurs prior to settlement of the accelerated

Performance Units, no adjustment to

the number of Performance Units earned by each named executive officer

will occur.

The value of such Performance Units held by Mr.

Cauley as of December 31, 2021 was approximately

$282,173, and the value of such Performance Units held by Mr.

Haas as of December 31, 2021 was approximately

$215,033, in each case, calculated by multiplying the number of unvested Performance

Units held by such named

executive officer by $4.50, the closing price of our common stock on

December 31, 2021.

“Change in Control” is defined in each of the 2012 Plan and the 2021 Plan to generally

mean (i) any

transaction

or series

of transactions

whereby

any person,

other

than

the Company,

any of

its subsidiaries

or any

Company

benefit

plan,

acquires

beneficial

ownership

of more

than

50% of

the total

combined

voting

power

the Company’s

securities,

(ii)

the current

members

of the

Board

(together

with

those

new members

of the

Board

approved

by a

two-thirds

vote

of the

current

Board

members)

cease

to constitute

a majority

of the

Board

for any

reason

during

any consecutive

two-year

period,

or (iii)

the consummation

by the

Company

of a

merger,

consolidation,

reorganization

or business

combination

or a

sale of

all or

substantially

all of

the Company’s

assets,

unless

the Company’s

stockholders

own more

than

50% of

the combined

voting

power

and common

stock

of the

successor

or purchasing

entity.

CEO Pay Ratio

The Company does not have any employees and does not provide any compensation

to the CEO. As a result,

the pay ratio disclosure of the median of the annual total compensation of all Company

employees excluding the

CEO and the annual total compensation of the CEO is not applicable.

- 37 -

PROPOSAL 3: TO APPROVE, BY A NON-BINDING

VOTE, THE COMPANY’S

EXECUTIVE

COMPENSATION

We are asking

our stockholders to provide a non-binding “say-on-pay” advisory approval

of the compensation

of our named executive officers as disclosed in the “Compensation

Discussion and Analysis” section of this proxy

statement.

THE BOARD RECOMMENDS A VOTE FOR

THE FOLLOWING RESOLUTION REGARDING THE “SAY

-ON-PAY”

VOTE APPROVING THE OVERALL COMPENSATION

PHILOSOPHY

RESOLVED

, that stockholders approve, on an advisory basis, compensation

of the named executive officers,

as described in the proxy statement, including the Compensation Discussion and

Analysis, the Summary

Compensation Table

and the other related tables and disclosures.

Our Board of Directors is committed to corporate governance best practices and

recognizes the significant

interest of stockholders in executive compensation matters.

We are providing

this advisory vote as required

pursuant to Section 14A of the Exchange Act.

The stockholder vote will not be binding on us or the Board of

Directors, and it will not be construed as overruling any decision by us or the Board of

Directors or creating or

implying any change to, or additional, fiduciary duties for us or the Board of

Directors.

As discussed in the Compensation Discussion and Analysis section of this proxy

statement, we are externally

managed by the Manager, pursuant to the management

agreement between our Manager and us.

In 2021, we did not

have any employees that we compensated directly with salaries or other

cash compensation.

Our named executive

officers are employees of Bimini.

Our named executive officers' compensation was paid by Bimini, the parent

our Manager, out of its earnings, the management

fees we pay to our Manager, and any expense reimbursements

pay our Manager.

We grant our named executive

officers performance based bonuses from time to time, which in

2021 was comprised of awards of Performance Units and immediately

vested shares of common stock.

We do not

provide our named executive officers with pension benefits, termination

payments or other

incidental payments.

As discussed in the Compensation Discussion and Analysis section of this proxy

statement, our Board of

Directors believes that our compensation program is directly linked

to our principal business objective of generating

income for our stockholders.

For example:

●

our Compensation Committee may grant employees of our Manager

equity awards intended to align

their interests with those of our stockholders by allowing our named executive officers

to share in the

creation of value for our stockholders through stock appreciation and dividends.

●

these equity awards are generally subject to vesting requirements over

a number of years, and are

designed to promote the retention of management and to achieve strong

performance for our company.

●

these awards further provide flexibility to us in our ability to enable our Manager

to attract, motivate

and retain talented individuals.

For these reasons, the Board of Directors recommends that stockholders vote in favor

of the proposed

resolution. While this vote is not binding on us, it will provide information to our

Compensation Committee and our

management regarding investor sentiment about our executive compensation

philosophy, policies and practices.

will consider this information as appropriate when making decisions regarding

executive compensation.

- 38 -

Securities Authorized for Issuance Under Equity Compensation Plans

In April 2021, our Board of Directors adopted and our stockholders approved,

the 2021 Plan to replace the 2012

Plan. The 2021 Plan provides for the award of stock options, stock appreciation

rights, stock awards, Performance

Units, other equity-based awards (and dividend equivalents with respect

to awards of Performance Units and other

equity-based awards) and incentive awards. The 2021 Plan is administered by

the Compensation Committee of our

Board of Directors except that our Board of Directors will administer awards made

to directors who are not

employees of us or our affiliates. The 2021 Plan provides

for awards of up to an aggregate of 10% of the issued and

outstanding shares of our common stock (on a fully diluted basis) at the time

of the awards, subject to a maximum

aggregate of 7,366,623 shares of our common stock.

In October 2012, our Board of Directors adopted and Bimini, then our

sole stockholder, approved the 2012

Plan. The 2012 Plan provided for the award of stock options, stock appreciation

rights, stock awards, Performance

Units, other equity-based awards (and dividend equivalents with respect

to awards of Performance Units and other

equity-based awards) and incentive awards. The 2012 Plan provided for awards

of up to an aggregate of 10% of the

issued and outstanding shares of our common stock (on a fully diluted basis) at

the time of the awards, subject to a

maximum aggregate of 4,000,000 shares of our common stock. No further

grants will be made under the 2012 Plan,

but outstanding awards made under the 2012 Plan will continue under the terms

of the 2012 Plan and any award

agreements executed in connection with such outstanding awards. The

Compensation Committee of our Board of

Directors continues to administer outstanding awards under the 2012

Plan, except that our Board of Directors

administers awards made to directors who are not employees of us or our affiliates.

The following table sets forth certain information regarding our equity

compensation plans as of December 31,

2021.

Equity Compensation Plan Information

Number of

securities remaining

available for future

Number of

issuance under equity

securities to be issued

Weighted-average

compensation plans

upon exercise of

exercise price of

(excluding securities

outstanding options,

reflected in

warrants and rights

column (a))

Name

(a)

(b)

(c)

Equity compensation plans approved

276,199

7,336,371

by security holders

Equity compensation plans not

approved by security holders

Total

276,199

7,336,371

SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN

BENEFICIAL OWNERS

The following table sets forth certain information as of April 14, 2022 relating

to the beneficial ownership of

our common stock by (i) all persons that we know beneficially own more than

5% of our outstanding common

stock, (ii) each of our named executive officers and directors, and

(iii) all of our executive officers and directors as a

group. In accordance with SEC rules, beneficial ownership includes:

●

all shares the investor actually owns beneficially or of record;

●

all shares over which the investor has or shares voting or dispositive control (such

as in the capacity as a

general partner of an investment fund); and

- 39 -

●

all shares the investor has the right to acquire within 60 days (such as upon

exercise of options that are

currently vested or which are scheduled to vest within 60 days after April

14, 2022).

Knowledge of the beneficial ownership of our common stock is drawn solely

from statements filed with the

SEC pursuant to Section 13(d) or 13(g) of the Exchange Act. Except as otherwise

indicated, to our knowledge, each

stockholder listed below has sole voting and investment power with respect

to the shares beneficially owned by the

stockholder.

Unless otherwise indicated, all shares are owned directly and the indicated person

has sole voting and

investment power. Except

as indicated in the table below, the business address

of the stockholders listed below is the

address of our principal executive office, 3305 Flamingo

Drive, Vero

Beach, Florida 32963.

Amount and

Nature of

Percent

Beneficial

Name of Beneficial Owner

Ownership

Class

Beneficial owners of more than 5%:

BlackRock, Inc.

(1)

12,474,516

7.0%

55 East 52nd Street

New York, NY 10055

Directors and Named Executive Officers:

Robert E. Cauley

(2)

203,484

George H. Haas, IV

170,970

W Coleman Bitting

(3)

60,108

Frank P.

Filipps

(3)

66,463

Paula Morabito

(4)

53,996

Ava L. Parker

(5)

63,019

All Directors and Executive Officers as a Group

618,040

_______________

Represents less than 1% of the outstanding common stock.

(1)

Information based on a Schedule 13G filed with the SEC on February 3, 2022 by BlackRock, Inc. (“BlackRock”).

BlackRock has (a) sole voting power over 12,311,957 shares; (b) shared voting power over zero shares; (c) sole dispositive

power over 12,474,516 shares; and (d) shared dispositive power over zero shares. BlackRock beneficially owns 12,474,516

shares. This total includes shares on behalf of BlackRock Advisors, LLC, Aperio Group, LLC, BlackRock Asset

Management Canada Limited, BlackRock Fund Advisors, BlackRock Institutional Trust Company, N.A., BlackRock

Financial Management, Inc. and BlackRock Investment Management, LLC.

(2)

Includes 250 shares of common stock owned by Mr. Cauley’s son. Mr.

Cauley disclaims beneficial ownership of these

shares.

(3)

Includes 39,164 deferred stock units, each representing the right to receive one share of common stock, acquired as quarterly

grants under the 2012 Plan or 2021 Plan.

(4)

Includes 48,220 deferred stock units, each representing the right to receive one share of common stock, acquired as quarterly

grants under the 2012 Plan or 2021 Plan, or in lieu of the monthly dividend on the Company’s common stock.

(5)

Includes 54,911 deferred stock units, each representing the right to receive one share of common stock, acquired as quarterly

grants under the 2012 Plan or 2021 Plan, or in lieu of the monthly dividend on the Company’s common stock.

- 40 -

DELINQUENT SECTION 16(a) REPORTS

Our directors and executive officers are required to file reports of

initial ownership and changes in ownership of

our securities with the SEC. To

our knowledge, based solely on a review of copies of such reports filed with the

SEC and written representations that no other reports were required,

we believe that all such filing requirements

were timely met, except for one Form 4 for each of Ava

Parker and Paula Morabito, each an independent director of

the Company, in connection

with single transactions reporting the issuance of DSUs in lieu of our monthly dividend

pursuant to the reporting person’s election

for May 2021.

- 41 -

CODE OF BUSINESS CONDUCT AND ETHICS

We have adopted

a Code of Business Conduct and Ethics that is applicable to all of our officers,

directors and

employees, if any.

We have also adopted

a Code of Ethics for Senior Financial Officers that is applicable to our

principal executive officer,

principal financial officer, principal accounting

officer or controller, or persons

performing similar functions. Our Code of Business Conduct and Ethics

and our Code of Ethics for Senior Financial

Officers may be accessed from the Corporate Governance

section of our website at

https://ir.orchidislandcapital.com

, and will be made available in print to any stockholder upon written request

delivered to our corporate secretary at Orchid Island Capital, Inc., 3305

Flamingo Drive, Vero

Beach, Florida

32963. We intend

to disclose any waivers from, or amendments to, our Code of Business Conduct and

Ethics and

our Code of Ethics for Senior Financial Officers required

to be disclosed by applicable law or stock exchange listing

standards by posting a description of such waiver or amendment on our

website at

https://ir.orchidislandcapital.com

- 42 -

CERTAIN

RELATIONSHIPS

AND RELATED TRANSACTIONS

Management Agreement

We are externally

managed and advised by our Manager pursuant to the terms of a management agreement. Our

Manager is responsible for administering our business activities and day-to-day

operations, subject to the

supervision and oversight of our Board of Directors. We

pay our Manager a monthly management fee, payable in

arrears, and began reimbursing our Manager for certain expenses commencing

with the calendar quarter beginning

July 1, 2014.

Under the current management agreement, we paid our Manager aggregate

management fees of approximately

$8,156,000 for the year ended December 31, 2021 and approximately

$5,280,000 for the year ended December 31,

2020.

In addition, during the year ended December 31, 2021, we reimbursed our

Manager approximately

$1,632,000, which represents an allocation of overhead expenses, including

approximately $631,000 for the portion

of Mr. Haas’ salary due to his service

to us as our Chief Financial Officer.

The term of the management agreement

was automatically renewed in accordance with the terms of the agreement

on February 20, 2022, and will

automatically be renewed for one-year terms thereafter unless we terminate the

agreement for cause. Upon the

expiration of any automatic renewal term, our Manager may elect not to renew

the management agreement without

cause, and without penalty,

on 180-days’ prior written notice to us. Should we terminate the management agreement

without cause, we will pay to the Manager a termination fee equal to three times the

average annual management

fee, as defined in the management agreement, before or on the last day of the term

of the management agreement.

Mr. Cauley,

our Chief Executive Officer and Chairman of our Board of Directors,

also serves as Chief

Executive Officer and Chairman of the Board of Directors

of Bimini and owns 11.4% of the outstanding shares

common stock of Bimini. Mr. Haas, our

Chief Financial Officer, Chief Investment

Officer, Secretary and

a member

of our Board of Directors, also serves as the Chief Financial Officer,

Chief Investment Officer and Treasurer of

Bimini and owns 10.6% of the outstanding shares of common stock of

Bimini. In addition, as of December 31,

2021, Bimini owned 2,595,357 shares, or 1.5%, of the outstanding shares of

our common stock. Our Manager is a

wholly-owned subsidiary of Bimini.

Indemnification Agreements

We have entered

into indemnification agreements with each of our directors and executive officers.

The

indemnification agreements require, among other things, that we indemnify

our directors and certain officers to the

fullest extent permitted by law and advance to our directors and certain officers

all related expenses, subject to

reimbursement if it is subsequently determined that indemnification is not

permitted.

Related Person Transaction

Policies

Our Board of Directors adopted a policy providing that any investment transaction

between Bimini, our

Manager or any of their affiliates and us requires the prior approval of

a majority of our independent directors.

Our Board of Directors also adopted a written policy regarding the approval of

any “related person transaction,”

which is any transaction or series of transactions in which we are to be a participant,

the amount involved exceeds

$120,000 and a “related person” (as defined under SEC rules) has a direct or indirect

material interest. Under the

policy, a related person would

need to promptly disclose to the Audit Committee any related person

transaction and

all material facts about the transaction. The Audit Committee would then

assess and promptly communicate that

information to our Board of Directors. Based on its consideration of all of the

relevant facts and circumstances, the

Audit Committee will decide whether or not to approve such transaction

and will generally approve only those

transactions that do not create a conflict of interest. If we become aware of an existing

related person transaction that

has not been pre-approved under this policy,

the transaction will be referred to the Audit Committee, which will

evaluate all options available, including ratification, revision or termination

of such transaction. Our policy requires

any director who may be interested in a related person transaction to recuse himself

or herself from any

consideration of such related person transaction.

In fulfilling its responsibility,

the Audit Committee will review the relevant facts of each related person

transaction or series of related transactions and either approve, ratify or disapprove

such transaction or transactions.

- 43 -

The Audit Committee will take into account such factors as it deems necessary

or appropriate in deciding whether to

approve, ratify or disapprove any related person transaction, including

any one or more of the following:

●

the terms of the transaction;

●

the benefits to us of the transaction;

●

the availability of other sources for comparable products or services;

●

the terms available to unrelated third parties or to employees generally;

and

●

the impact on a director’s independence in the event that such director

is a party to the transaction or such

director, an immediate family member

of such director or an entity in which such director is an executive

officer or has a direct or indirect material interest is a party to the transaction.

No director may participate in any consideration or approval of a related person

transaction with respect to

which such director or any of such director’s immediate family

members is the related person or has a direct or

indirect material interest. Related person transactions will only be approved

if they are determined to be in, or not

inconsistent with, the best interests of the Company.

On an annual basis, we will solicit information from each of our directors and executive

officers to identify

related person transactions. If a related person transaction that has not

been previously approved or previously

ratified is identified, the Audit Committee will promptly consider all of the

relevant facts. If the transaction is

ongoing, the Audit Committee may ratify or request the rescission, amendment

or termination of the related person

transaction. If the transaction has been completed, the Audit Committee may

seek to rescind the transaction where

appropriate and may recommend that our Board of Directors or we take

appropriate disciplinary action where

warranted. In addition, the Audit Committee will generally review any ongoing

related person transactions on an

annual basis to determine whether to continue, modify or terminate such related person

transactions.

In addition, our Code of Business Conduct and Ethics, which is reviewed

and approved by our Board of

Directors and provided to all our directors, officers and the persons

who provide services to us pursuant to the

management agreement, requires that all such persons avoid any situations

or relationships that involve actual or

potential conflicts of interest, or perceived conflicts of interest, between an individual’s

personal interests and our

interests. Pursuant to our Code of Business Conduct and Ethics, each of these persons

must disclose any conflicts of

interest, or actions or relationships that might give rise to a conflict, to their supervisor

or our secretary. If a conflict

is determined to exist, the person must disengage from the conflict situation or

terminate his provision of services to

us. Our Chief Executive Officer,

Chief Financial Officer, principal

accounting officer and certain other persons who

may be designated by our Board of Directors, whom we collectively refer to as our financial

executives, must

consult with our Audit Committee with respect to any proposed actions or

arrangements that are not clearly

consistent with our Code of Business Conduct and Ethics. In the event that

a financial executive wishes to engage in

a proposed action or arrangement that is not consistent with our Code of

Business Conduct and Ethics, the executive

must obtain a waiver of the relevant provisions of our Code of Business Conduct and

Ethics in advance from our

Audit Committee.

- 44 -

STOCKHOLDER COMMUNICATIONS

Stockholders and other interested parties may communicate with any director,

including the Chairman of the

Board and the chairman of any committee of the Board or with the non-management

directors as a group, by

sending a letter to the attention of the appropriate person or persons (which

may be marked as confidential)

addressed in care of our corporate secretary at Orchid Island Capital, Inc.,

3305 Flamingo Drive, Vero

Beach,

Florida 32963. All communications received by our corporate secretary

will be forwarded to the intended

recipient(s). Any such communications may be made anonymously.

Concerns relating to accounting, internal controls or auditing matters are immediately

brought to the attention of

the Chair of the Audit Committee and handled in accordance with procedures approved

by the Board of Directors

with respect to such matters. A copy of such procedures for the submission and handling

of complaints or concerns

regarding accounting, internal accounting controls or auditing matters

is included in our Code of Business Conduct

and Ethics, which is published in the Corporate Governance section of our

website at

https://ir.orchidislandcapital.com

PROPOSALS OF STOCKHOLDERS

Any stockholder intending to present a proposal at our 2023 annual

meeting of stockholders and have the

proposal included in the proxy statement for such meeting must, in addition

to complying with the applicable laws

and regulations governing submissions of such proposals, submit the

proposal in writing to us no later than

December 22, 2022. To

be included in the proxy statement for the 2023 annual meeting, the proposal must comply

with the requirements as to form and substance established by the SEC and our

bylaws, and must be a proper subject

for stockholder action under Maryland law.

Pursuant to our current bylaws, any stockholder intending to nominate

a director or present a proposal at an

annual meeting of our stockholders without seeking to have such

a nomination or proposal included in the proxy

statement for such annual meeting, must notify us in writing not less than 120 days

nor more than 150 days prior to

the first anniversary of the date of the proxy statement for the preceding year’s

annual meeting. Accordingly,

any

stockholder who intends to submit such a nomination or proposal at our

2023 annual meeting of stockholders must

notify us in writing of such proposal by December 22, 2022, but in no event earlier

than November 22, 2022.

In addition, for next year’s annual meeting of stockholders, we will be

required under new SEC Rule 14a-19 to

include on our proxy card all nominees for director for whom we have

received notice under the rule, which must be

received no later than 60 calendar days prior to the anniversary of the previous year’s

annual meeting. For any such

director nominee to be included on our proxy card for next year’s annual

meeting, our corporate secretary must

receive notice under SEC Rule 14a-19 no later than April 15, 2023. Please note

that the notice requirement under

SEC Rule 14a-19 is in addition to the applicable notice requirements under

the advance notice provisions of our

bylaws described above.

Any such nomination or proposal should be sent to Orchid Island Capital, Inc., 3305

Flamingo Drive, Vero

Beach, Florida, 32963, Attn: Secretary,

and, to the extent applicable, must include the information required by our

bylaws and otherwise comply with the requirements established

by our bylaws.

“HOUSEHOLDING” OF PROXY STATEMENT

AND ANNUAL REPORT

The SEC rules allow for the delivery of a single copy of the Notice of Annual Meeting

of Stockholders or set of

proxy materials to any household at which two or more stockholders reside,

if it is believed the stockholders are

members of the same family.

This delivery method, known as “householding,” will save us printing and

mailing

costs. Duplicate account mailings will be eliminated by allowing stockholders to consent

to such elimination, or

through implied consent, if a stockholder does not request continuation of

duplicate mailings. Brokers, dealers,

banks or other nominees or fiduciaries that hold shares of our common stock

in “street” name for beneficial owners

of our common stock and that distribute proxy materials and the Notice of Annual

Meeting of Stockholders they

receive to beneficial owners may be householding. Depending upon

the practices of your broker, bank or other

nominee or fiduciary,

you may need to contact them directly to discontinue duplicate mailings to your household. If

you wish to revoke your consent to householding, you must contact your

broker, bank or other nominee or fiduciary.

- 45 -

If you hold shares of our common stock in your own name as a holder of record,

householding will not apply to

your shares. Also, if you own shares of our common stock in more

than one account, such as individually and also

jointly with your spouse, you may receive more than one set of our proxy statements and

annual reports to

stockholders. To assist us in saving

money and to provide you with better stockholder services, we encourage

registered holders of our stock to have all of your accounts registered in the

same name and address. You

may do

this, or request separate copies in the future, by contacting our transfer

agent, Continental Stock Transfer & Trust

Company, by telephone

at (212) 509-4000 or in writing at 1 State Street, 30th Floor,

New York,

New York

10004-

1561.

If you wish to request extra copies free of charge of any annual report

to stockholders or proxy statement, please

send your request to Orchid Island Capital, Inc., 3305 Flamingo

Drive, Vero

Beach, Florida 32963, Attn: Secretary,

or contact our Secretary via telephone at (772) 231-1400.

You

can also refer to our website at

https://ir.orchidislandcapital.com

. Information at, or connected to, our

website is not and should not be considered part of this proxy statement.

2021 ANNUAL REPORT

Our 2021 Annual Report is being mailed to stockholders concurrently

with this proxy statement. The 2021

Annual Report, however, is not part of

the proxy solicitation material. A copy of our 2021 Annual Report as filed

with the SEC, which includes our consolidated financial statements for

the year ended December 31, 2021, is

available on our website at

https://ir.orchidislandcapital.com

. You

may obtain additional copies of our 2021 Annual

Report free of charge by directing your request in writing to our corporate

secretary at Orchid Island Capital, Inc.,

3305 Flamingo Drive, Vero

Beach, Florida 32963.

OTHER MATTERS

So far as is known, no matters other than those described herein are expected

to come before the Annual

Meeting. It is intended, however, that the proxies

solicited hereby will be voted on any other matters which may

properly come before the meeting, or any adjournment or postponement

thereof, in the discretion of the person or

persons voting such proxies unless the stockholder has indicated on the proxy

card that the shares represented

thereby are not to be voted on such other matters.

ADJOURNMENTS

Adjournments may be made for the purpose of, among other things, soliciting

additional proxies. Any

adjournment may be made from time to time by approval of the holders of

a majority of the shares present in person

or by proxy at the Annual Meeting (whether or not a quorum exists) without further

notice other than by an

announcement made at the Annual Meeting. If the Annual Meeting is adjourned

or postponed for any reason, all

proxies will be voted at the reconvened Annual Meeting in the same manner

as such proxies would have been voted

at the original convening of the Annual Meeting (except for proxies

that have, at that time, effectively been revoked

or withdrawn). The Company does not currently intend to seek an adjournment

of the Annual Meeting.

Vero

Beach, Florida

April 21, 2022

- 46 -

- 47 -

SEC Form DEF 14A filed by Orchid Island Capital Inc.