Business Wire | Nov 5, 2020 04:17PM EST

Bimini Capital Management Announces Third Quarter 2020 Results

Nov. 05, 2020

VERO BEACH, Fla.--(BUSINESS WIRE)--Nov. 05, 2020--Bimini Capital Management, Inc. (OTCQB:BMNM), ("Bimini Capital," "Bimini," or the "Company"), today announced results of operations for the three month period ended September 30, 2020.

Third Quarter 2020 Highlights

* Net income of $1.3 million, or $0.11 per common share * Book value per share of $1.93 * Company to discuss results on Friday, November 6, 2020, at 10:00 AM ET

Impact of the COVID-19 Pandemic

Beginning in mid-March 2020, the global pandemic associated with the novel coronavirus COVID-19 ("COVID-19") and related economic conditions began to impact our financial position and results of operations. As a result of the economic, health and market turmoil brought about by COVID-19, the Agency MBS market experienced severe dislocations. This resulted in falling prices of our assets and increased margin calls from our repurchase agreement lenders. Further, as interest rates declined, we faced additional margin calls related to our hedge positions. In order to maintain our leverage ratio at prudent levels, maintain sufficient cash and liquidity, reduce risk and satisfy margin calls, we sold assets at levels significantly below their carrying values and closed several of our hedge positions. We timely satisfied all margin calls. The Agency MBS market largely stabilized after the Federal Reserve announced on March 23, 2020 that it would purchase Agency MBS and U.S. Treasuries in the amounts needed to support smooth market functioning. Largely as a result of actions taken by the Fed in late March, Agency RMBS valuations have substantially increased since March 31, 2020.

Management invoked the Company's Disaster Recovery Plan in mid-March and its employees have been working remotely since that time. Prior planning resulted in the successful implementation of this plan and key operational team members maintain daily communication.

Details of Third Quarter 2020 Results of Operations

The Company reported net income of $1.3 million for the three month period ended September 30, 2020. The results for the quarter included advisory services revenue of $1.6 million, interest and dividend income of $1.1 million, interest expense of $0.3 million, net realized and unrealized gains of $1.1 million, operating expenses of $1.6 million and an income tax provision of $0.6 million.

Management of Orchid Island Capital, Inc.

Orchid is managed and advised by Bimini. As Manager, Bimini is responsible for administering Orchid's business activities and day-to-day operations. Pursuant to the terms of the management agreement, Bimini Advisors provides Orchid with its management team, including its officers, along with appropriate support personnel.

Bimini also maintains a common stock investment in Orchid which is accounted for under the fair value option, with changes in fair value recorded in the statement of operations for the current period. For the three months ended September 30, 2020, Bimini's statement of operations included a fair value adjustment of $0.8 million and dividends of $0.5 million from its investment in Orchid's common stock. Also during the three months ended September 30, 2020, Bimini recorded $1.6 million in advisory services revenue for managing Orchid's portfolio consisting of $1.2 million of management fees and $0.4 million in overhead reimbursement.

Capital Allocation and Return on Invested Capital

The Company allocates capital between two MBS sub-portfolios, the pass-through MBS portfolio ("PT MBS") and the structured MBS portfolio, consisting of interest only ("IO") and inverse interest-only ("IIO") securities. The table below details the changes to the respective sub-portfolios during the quarter.

Portfolio Activity for the Quarter

Structured Security Portfolio

Pass-Through Interest-Only Inverse Interest

Portfolio Securities Only Sub-total Total Securities

MarketValue - $ 52,345,097 $ 441,282 $ 31,138 $ 472,420 $ 52,817,517June 30, 2020

Securities 22,306,462 - - - 22,306,462purchased

Return of n/a (55,059) (2,320) (57,379) (57,379)investment

Pay-downs (2,197,867) n/a n/a n/a (2,197,867)

Premiumlost due to (235,822) n/a n/a n/a (235,822)pay-downs

Mark tomarket 564,343 (52,462) (263) (52,725) 511,618gains (losses)

MarketValue - $ 72,782,213 $ 333,761 $ 28,555 $ 362,316 $ 73,144,529September 30, 2020

The tables below present the allocation of capital between the respective portfolios at September 30, 2020 and June 30, 2020, and the return on invested capital for each sub-portfolio for the three month period ended September 30, 2020. Capital allocation is defined as the sum of the market value of securities held, less associated repurchase agreement borrowings, plus cash and cash equivalents and restricted cash associated with repurchase agreements. Capital allocated to non-portfolio assets is not included in the calculation.

The returns on invested capital in the PT MBS and structured MBS portfolios were approximately 13.6% and (7.8)%, respectively, for the third quarter of 2020. The combined portfolio generated a return on invested capital of approximately 12.2%.

Capital Allocation

Structured Security Portfolio

Pass-Through Interest-Only Inverse Interest

Portfolio Securities Only Sub-total Total Securities

September 30, 2020

Market $ 72,782,213 $ 333,761 $ 28,555 $ 362,316 $ 73,144,529value

Cashequivalentsand 7,089,067 - - - 7,089,067restrictedcash^(1)

Repurchaseagreement (70,685,172) - - - (70,685,172)obligations

Total^(2) $ 9,186,108 $ 333,761 $ 28,555 $ 362,316 $ 9,548,424

% of 96.2% 3.5% 0.3% 3.8% 100.0% Total

June 30, 2020

Market $ 52,345,097 $ 441,282 $ 31,138 $ 472,420 $ 52,817,517value

Cashequivalentsand 5,673,314 - - - 5,673,314restrictedcash^(1)

Repurchaseagreement (51,617,000) - - - (51,617,000)obligations

Total^(2) $ 6,401,411 $ 441,282 $ 31,138 $ 472,420 $ 6,873,831

% of 93.1% 6.4% 0.5% 6.9% 100.0% Total

(1)

Amount excludes restricted cash of $1,075 and $1,680 at September 30, 2020 and June 30, 2020, respectively, related to trust preferred debt funding hedges.

(2)

Invested capital includes the value of the MBS portfolio and cash equivalents and restricted cash, reduced by repurchase agreement borrowings.

Amount excludes restricted cash of $1,075 and $1,680 at September 30,(1) 2020 and June 30, 2020, respectively, related to trust preferred debt funding hedges.

Invested capital includes the value of the MBS portfolio and cash(2) equivalents and restricted cash, reduced by repurchase agreement borrowings.

Returns for the Quarter Ended September 30, 2020

Structured Security Portfolio

Pass-Through

Interest-Only

Inverse Interest

Portfolio

Securities

Only Securities

Sub-total

Total

Interest income (net of repo cost)

$

545,186

$

14,301

$

1,716

$

16,017

$

561,203

Realized and unrealized gains (losses)

328,521

(52,462)

(263)

(52,725)

275,796

Total Return

$

873,707

$

(38,161)

$

1,453

$

(36,708)

$

836,999

Beginning capital allocation

$

6,401,411

$

441,282

$

31,138

$

472,420

$

6,873,831

Return on invested capital for the quarter(1)

13.6%

(8.6)%

4.7%

(7.8)%

12.2%

Returns for the Quarter Ended September 30, 2020

Structured Security Portfolio

Pass-Through Interest-Only Inverse Interest

Portfolio Securities Only Sub-total Total Securities

Interestincome $ 545,186 $ 14,301 $ 1,716 $ 16,017 $ 561,203(net of repo cost)

Realizedandunrealized 328,521 (52,462) (263) (52,725) 275,796gains(losses)

Total $ 873,707 $ (38,161) $ 1,453 $ (36,708) $ 836,999 Return

Beginningcapital $ 6,401,411 $ 441,282 $ 31,138 $ 472,420 $ 6,873,831allocation

Return oninvestedcapital 13.6% (8.6)% 4.7% (7.8)% 12.2%for the quarter^(1)

(1)

Calculated by dividing the Total Return by the Beginning Capital Allocation, expressed as a percentage.

Prepayments

For the third quarter of 2020, the Company received approximately $2.3 million in scheduled and unscheduled principal repayments and prepayments, which equated to a 3-month constant prepayment rate ("CPR") of approximately 15.8% for the third quarter of 2020. Prepayment rates on the two MBS sub-portfolios were as follows (in CPR):

(1) Calculated by dividing the Total Return by the Beginning Capital Allocation, expressed as a percentage.

Prepayments

For the third quarter of 2020, the Company received approximately $2.3 million in scheduled and unscheduled principal repayments and prepayments, which equated to a 3-month constant prepayment rate ("CPR") of approximately 15.8% for the third quarter of 2020. Prepayment rates on the two MBS sub-portfolios were as follows (in CPR):

PT Structured

MBS Sub- MBS Sub- Total

Three Months Ended Portfolio Portfolio Portfolio

September 30, 2020 13.0 32.0 15.8

June 30, 2020 12.4 25.0 15.3

March 31, 2020 11.6 18.1 13.7

December 31, 2019 15.6 15.6 15.6

September 30, 2019 9.5 16.2 10.5

June 30, 2019 9.9 14.6 10.5

March 31, 2019 5.7 13.4 6.8

Portfolio

The following tables summarize the MBS portfolio as of September 30, 2020 and December 31, 2019:

($ in thousands)

Weighted

Percentage Average

of Weighted Maturity

Fair Entire Average in Longest

Asset Category Value Portfolio Coupon Months Maturity

September 30, 2020

Fixed Rate MBS $ 72,782 99.5% 3.97% 337 15-Aug-50

Interest-Only MBS 334 0.5% 3.54% 289 15-Jul-48

Inverse Interest-Only MBS 29 0.0% 5.85% 224 15-May-39

Total MBS Portfolio $ 73,145 100.0% 3.97% 337 15-Aug-50

December 31, 2019

Fixed Rate MBS $ 216,231 99.3% 4.25% 316 1-Nov-49

Interest-Only MBS 1,024 0.5% 3.65% 281 15-Jul-48

Inverse Interest-Only MBS 586 0.2% 4.77% 254 25-Apr-41

Total MBS Portfolio $ 217,841 100.0% 4.25% 316 1-Nov-49

($ in thousands)

September 30, 2020

December 31, 2019

Percentage of

Percentage of

Agency

Fair Value

Entire Portfolio

Fair Value

Entire Portfolio

Fannie Mae

$

40,579

55.5%

$

203,321

93.3%

Freddie Mac

32,566

44.5%

14,499

6.7%

Ginnie Mae

-

0.0%

21

0.0%

Total Portfolio

$

73,145

100.0%

$

217,841

100.0%

($ in thousands)

September 30, 2020 December 31, 2019

Percentage of Percentage of

Agency Fair Value Entire Fair Value Entire Portfolio Portfolio

Fannie Mae $ 40,579 55.5% $ 203,321 93.3%

Freddie Mac 32,566 44.5% 14,499 6.7%

Ginnie Mae - 0.0% 21 0.0%

Total Portfolio $ 73,145 100.0% $ 217,841 100.0%

September 30, 2020

December 31, 2019

Weighted Average Pass Through Purchase Price

$

109.74

$

107.12

Weighted Average Structured Purchase Price

$

4.96

$

6.39

Weighted Average Pass Through Current Price

$

112.59

$

108.77

Weighted Average Structured Current Price

$

3.5

$

6.91

Effective Duration (1)

3.184

3.196

September 30, December 31, 2020 2019

Weighted Average Pass Through Purchase $ 109.74 $ 107.12Price

Weighted Average Structured Purchase $ 4.96 $ 6.39Price

Weighted Average Pass Through Current $ 112.59 $ 108.77Price

Weighted Average Structured Current $ 3.5 $ 6.91Price

Effective Duration ^(1) 3.184 3.196

(1)

Effective duration is the approximate percentage change in price for a 100 basis point change in rates. An effective duration of 3.184 indicates that an interest rate increase of 1.0% would be expected to cause a 3.184% decrease in the value of the MBS in the Company's investment portfolio at September 30, 2020. An effective duration of 3.196 indicates that an interest rate increase of 1.0% would be expected to cause a 3.196% decrease in the value of the MBS in the Company's investment portfolio at December 31, 2019. These figures include the structured securities in the portfolio but not the effect of the Company's hedges. Effective duration quotes for individual investments are obtained from The Yield Book, Inc.

Financing and Liquidity

As of September 30, 2020, the Company had outstanding repurchase obligations of approximately $70.7 million with a net weighted average borrowing rate of 0.26%. These agreements were collateralized by MBS with a fair value, including accrued interest, of approximately $73.3 million. At September 30, 2020, the Company's liquidity was approximately $5.9 million, consisting of unpledged MBS and cash and cash equivalents.

We may pledge more of our structured MBS as part of a repurchase agreement funding, but retain cash in lieu of acquiring additional assets. In this way, we can, at a modest cost, retain higher levels of cash on hand and decrease the likelihood we will have to sell assets in a distressed market in order to raise cash. Below is a list of outstanding borrowings under repurchase obligations at September 30, 2020.

Effective duration is the approximate percentage change in price for a 100 basis point change in rates. An effective duration of 3.184 indicates that an interest rate increase of 1.0% would be expected to cause a 3.184% decrease in the value of the MBS in the Company's investment(1) portfolio at September 30, 2020. An effective duration of 3.196 indicates that an interest rate increase of 1.0% would be expected to cause a 3.196% decrease in the value of the MBS in the Company's investment portfolio at December 31, 2019. These figures include the structured securities in the portfolio but not the effect of the Company's hedges. Effective duration quotes for individual investments are obtained from The Yield Book, Inc.

Financing and Liquidity

As of September 30, 2020, the Company had outstanding repurchase obligations of approximately $70.7 million with a net weighted average borrowing rate of 0.26%. These agreements were collateralized by MBS with a fair value, including accrued interest, of approximately $73.3 million. At September 30, 2020, the Company's liquidity was approximately $5.9 million, consisting of unpledged MBS and cash and cash equivalents.

We may pledge more of our structured MBS as part of a repurchase agreement funding, but retain cash in lieu of acquiring additional assets. In this way, we can, at a modest cost, retain higher levels of cash on hand and decrease the likelihood we will have to sell assets in a distressed market in order to raise cash. Below is a list of outstanding borrowings under repurchase obligations at September 30, 2020.

($ in thousands)

Repurchase Agreement Obligations

Weighted Weighted

Total Average Average

Outstanding % of Borrowing Amount Maturity

Counterparty Balances Total Rate at Risk (in ^(1) Days)

Mirae Asset Securities $ 49,027 69.4% 0.26% $ 2,562 64(USA) Inc.

South Street Securities, 7,302 10.3% 0.30% 227 225LLC

Citigroup Global Markets, 6,077 8.6% 0.25% 496 19Inc.

Mitsubishi UFJ Securities 4,936 7.0% 0.22% 384 41(USA), Inc.

JVB Financial Group, LLC 3,343 4.7% 0.30% 208 15

$ 70,685 100.0% 0.26% $ 3,877 73

(1)

Equal to the fair value of securities sold (including accrued interest receivable) and cash posted as collateral, if any, minus the sum of repurchase agreement liabilities, accrued interest payable and securities posted by the counterparty (if any).

Hedging

In connection with its interest rate risk management strategy, the Company economically hedges a portion of the cost of its repurchase agreement funding and also its junior subordinated notes by entering into derivative financial instrument contracts. The Company has not elected hedging treatment under U.S. generally accepted accounting principles ("GAAP") in order to align the accounting treatment of its derivative instruments with the treatment of its portfolio assets under the fair value option election. As such, all gains or losses on these instruments are reflected in earnings for all periods presented. As of September 30, 2020, such instruments were comprised entirely of Eurodollar futures contracts.

The tables below present information related to outstanding Eurodollar futures contracts at September 30, 2020.

Equal to the fair value of securities sold (including accrued interest(1) receivable) and cash posted as collateral, if any, minus the sum of repurchase agreement liabilities, accrued interest payable and securities posted by the counterparty (if any).

Hedging

In connection with its interest rate risk management strategy, the Company economically hedges a portion of the cost of its repurchase agreement funding and also its junior subordinated notes by entering into derivative financial instrument contracts. The Company has not elected hedging treatment under U.S. generally accepted accounting principles ("GAAP") in order to align the accounting treatment of its derivative instruments with the treatment of its portfolio assets under the fair value option election. As such, all gains or losses on these instruments are reflected in earnings for all periods presented. As of September 30, 2020, such instruments were comprised entirely of Eurodollar futures contracts.

The tables below present information related to outstanding Eurodollar futures contracts at September 30, 2020.

($ in thousands)

As of September 30, 2020

Junior Subordinated Debt Funding Hedges

Average Weighted Weighted

Contract Average Average

Notional Entry Effective Open

Expiration Year Amount Rate Rate Equity^(1)

2021 $ 1,000 1.02% 0.20% $ (8)

Total / Weighted Average $ 1,000 1.02% 0.20% $ (8)

(1)

Open equity represents the cumulative gains (losses) recorded on open futures positions from inception.

Book Value Per Share

The Company's Book Value Per Share at September 30, 2020 was $1.93. The Company computes Book Value Per Share by dividing total stockholders' equity by the total number of shares outstanding of the Company's Class A Common Stock. At September 30, 2020, the Company's stockholders' equity was $22.4 million, with 11,608,555 Class A Common shares outstanding.

Stock Repurchase Plan

On March 26, 2018, the Board of Directors of Bimini Capital Management, Inc. (the "Company") approved a Stock Repurchase Plan ("Repurchase Plan"). Pursuant to Repurchase Plan, the Company may purchase up to 500,000 shares of its Class A Common Stock from time to time, subject to certain limitations imposed by Rule 10b-18 of the Securities Exchange Act of 1934, as amended. Share repurchases may be executed through various means, including, without limitation, open market transactions. The Repurchase Plan does not obligate the Company to purchase any shares. The Repurchase Plan was originally set to expire on November 15, 2018, but it has been extended by the Board of Directors, and it is currently set to expire on November 15, 2021.

Since inception of the program through September 30, 2020, the Company repurchased a total of 70,404 shares at an aggregate cost of approximately $166,945, including commissions and fees, for a weighted average price of $2.37 per share.

Management Commentary

Commenting on the third quarter, Robert E. Cauley, Chairman and Chief Executive Officer, said, "After suffering through the most dramatic contraction of economic activity and financial market turmoil ever witnessed during the first quarter of 2020, the second quarter was one of substantial recovery and the third a continuation of that recovery, albeit at a much more modest pace. The financial markets are functioning as they did prior to the chaos that erupted this March, in large part because of the substantial intervention by the Fed and the government. Critically for us, the quantitative easing undertaken by the Fed in which they buy U.S. Treasuries and Agency MBS securities on a regular basis each week has continued and the Fed is likely to continue doing so until the economy has substantially recovered.

"While the recovery in the third quarter was not as robust as that which occurred during the second quarter, the Company continued to recover none-the-less, as did Orchid Island Capital. Orchid's capital base continued to recover during the third quarter, resulting in a one percent increase in our advisory service revenues over the prior quarter. Orchid Island's shareholders' equity as of September 30, 2020 was 4.75% below the level as of December 31, 2019, but 22.3% above the level at March 31, 2020 and 8.9% above the level at June 30, 2020.

"Our MBS portfolio increased from $52.8 million as of June 30, 2020, to $73.1 million at September 30, 2020. This led to a 15.0% increase in interest income. In addition, we increased our share holdings of Orchid Island by 100,000 shares and Orchid raised its dividend during the quarter, resulting in a 27% increase in dividend income. Interest expense, both on our repurchase agreements and our trust preferred debt, decreased by 11%. As a result of all these improvements, net revenues increased 11% for the quarter.

"With respect to the outlook going forward, the economy has yet to fully recover from the steep contraction during the first quarter of 2020, despite massive intervention by both the Fed and the Trump administration. There remains significant uncertainty surrounding the timing of a full recovery in economic activity and a return to life as it existed before the virus emerged. However, the current market environment, despite elevated levels of prepayments stemming from the low absolute level of rates available to borrowers, continues to offer low to mid teen returns on levered Agency RMBS investments with reduced book value volatility. As the same generally applies to Orchid Island, the prospects for our advisory services revenues and dividend income are likewise favorable."

Summarized Consolidated Financial Statements

The following is a summarized presentation of the unaudited consolidated balance sheets as of September 30, 2020, and December 31, 2019, and the unaudited consolidated statements of operations for the nine and three months ended September 30, 2020 and 2019. Amounts presented are subject to change.

(1) Open equity represents the cumulative gains (losses) recorded on open futures positions from inception.

Book Value Per Share

The Company's Book Value Per Share at September 30, 2020 was $1.93. The Company computes Book Value Per Share by dividing total stockholders' equity by the total number of shares outstanding of the Company's Class A Common Stock. At September 30, 2020, the Company's stockholders' equity was $22.4 million, with 11,608,555 Class A Common shares outstanding.

Stock Repurchase Plan

On March 26, 2018, the Board of Directors of Bimini Capital Management, Inc. (the "Company") approved a Stock Repurchase Plan ("Repurchase Plan"). Pursuant to Repurchase Plan, the Company may purchase up to 500,000 shares of its Class A Common Stock from time to time, subject to certain limitations imposed by Rule 10b-18 of the Securities Exchange Act of 1934, as amended. Share repurchases may be executed through various means, including, without limitation, open market transactions. The Repurchase Plan does not obligate the Company to purchase any shares. The Repurchase Plan was originally set to expire on November 15, 2018, but it has been extended by the Board of Directors, and it is currently set to expire on November 15, 2021.

Since inception of the program through September 30, 2020, the Company repurchased a total of 70,404 shares at an aggregate cost of approximately $166,945, including commissions and fees, for a weighted average price of $2.37 per share.

Management Commentary

Commenting on the third quarter, Robert E. Cauley, Chairman and Chief Executive Officer, said, "After suffering through the most dramatic contraction of economic activity and financial market turmoil ever witnessed during the first quarter of 2020, the second quarter was one of substantial recovery and the third a continuation of that recovery, albeit at a much more modest pace. The financial markets are functioning as they did prior to the chaos that erupted this March, in large part because of the substantial intervention by the Fed and the government. Critically for us, the quantitative easing undertaken by the Fed in which they buy U.S. Treasuries and Agency MBS securities on a regular basis each week has continued and the Fed is likely to continue doing so until the economy has substantially recovered.

"While the recovery in the third quarter was not as robust as that which occurred during the second quarter, the Company continued to recover none-the-less, as did Orchid Island Capital. Orchid's capital base continued to recover during the third quarter, resulting in a one percent increase in our advisory service revenues over the prior quarter. Orchid Island's shareholders' equity as of September 30, 2020 was 4.75% below the level as of December 31, 2019, but 22.3% above the level at March 31, 2020 and 8.9% above the level at June 30, 2020.

"Our MBS portfolio increased from $52.8 million as of June 30, 2020, to $73.1 million at September 30, 2020. This led to a 15.0% increase in interest income. In addition, we increased our share holdings of Orchid Island by 100,000 shares and Orchid raised its dividend during the quarter, resulting in a 27% increase in dividend income. Interest expense, both on our repurchase agreements and our trust preferred debt, decreased by 11%. As a result of all these improvements, net revenues increased 11% for the quarter.

"With respect to the outlook going forward, the economy has yet to fully recover from the steep contraction during the first quarter of 2020, despite massive intervention by both the Fed and the Trump administration. There remains significant uncertainty surrounding the timing of a full recovery in economic activity and a return to life as it existed before the virus emerged. However, the current market environment, despite elevated levels of prepayments stemming from the low absolute level of rates available to borrowers, continues to offer low to mid teen returns on levered Agency RMBS investments with reduced book value volatility. As the same generally applies to Orchid Island, the prospects for our advisory services revenues and dividend income are likewise favorable."

Summarized Consolidated Financial Statements

The following is a summarized presentation of the unaudited consolidated balance sheets as of September 30, 2020, and December 31, 2019, and the unaudited consolidated statements of operations for the nine and three months ended September 30, 2020 and 2019. Amounts presented are subject to change.

BIMINI CAPITAL MANAGEMENT, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited - Amounts Subject To Change)



September 30, December 31, 2020 2019

ASSETS

Mortgage-backed securities $ 73,144,529 $ 217,840,953

Cash equivalents and restricted cash 7,090,142 12,385,117

Orchid Island Capital, Inc. common stock, at 13,002,739 8,892,211fair value

Accrued interest receivable 234,431 750,875

Deferred tax assets, net 24,003,192 33,288,536

Other assets 4,688,344 6,331,256

Total Assets $ 122,163,377 $ 279,488,948



LIABILITIES AND STOCKHOLDERS' EQUITY

Repurchase agreements $ 70,685,172 $ 209,954,000

Long-term debt 27,618,048 27,481,121

Other liabilities 1,430,201 2,076,836

Total Liabilities 99,733,421 239,511,957

Stockholders' equity 22,429,956 39,976,991

Total Liabilities and Stockholders' Equity $ 122,163,377 $ 279,488,948

Class A Common Shares outstanding 11,608,555 11,608,555

Book value per share $ 1.93 $ 3.44

BIMINI CAPITAL MANAGEMENT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited - Amounts Subject to Change)

Nine Months Ended September 30,

Three Months Ended September 30,

2020

2019

2020

2019

Advisory services

$

4,969,143

$

5,052,251

$

1,629,463

$

1,791,135

Interest and dividend income

4,414,075

7,064,908

1,097,276

2,011,198

Interest expense

(1,923,671)

(4,850,365)

(304,296)

(1,391,324)

Net revenues

7,459,547

7,266,794

2,422,443

2,411,009

Other (expense) income

(10,703,929)

(1,154,292)

1,119,443

(1,038,796)

Expenses

5,006,794

4,825,373

1,615,748

1,606,384

Net (Loss) income before income tax provision

(8,251,176)

1,287,129

1,926,138

(234,171)

Income tax provision

9,295,859

942,364

608,351

537,945

Net (loss) income

$

(17,547,035)

$

344,765

$

1,317,787

$

(772,116)

Basic and Diluted Net Income (Loss) Per Share of:

CLASS A COMMON STOCK

$

(1.51)

$

0.03

$

0.11

$

(0.07)

CLASS B COMMON STOCK

$

(1.51)

$

0.03

$

0.11

$

(0.07)

BIMINI CAPITAL MANAGEMENT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited - Amounts Subject to Change)



Nine Months Ended September Three Months Ended 30, September 30,

2020 2019 2020 2019

Advisory services $ 4,969,143 $ 5,052,251 $ 1,629,463 $ 1,791,135

Interest and dividend 4,414,075 7,064,908 1,097,276 2,011,198income

Interest expense (1,923,671) (4,850,365) (304,296) (1,391,324)

Net revenues 7,459,547 7,266,794 2,422,443 2,411,009

Other (expense) income (10,703,929) (1,154,292) 1,119,443 (1,038,796)

Expenses 5,006,794 4,825,373 1,615,748 1,606,384

Net (Loss) incomebefore income tax (8,251,176) 1,287,129 1,926,138 (234,171)provision

Income tax provision 9,295,859 942,364 608,351 537,945

Net (loss) income $ (17,547,035) $ 344,765 $ 1,317,787 $ (772,116)



Basic and Diluted NetIncome (Loss) Per Share of:

CLASS A COMMON STOCK $ (1.51) $ 0.03 $ 0.11 $ (0.07)

CLASS B COMMON STOCK $ (1.51) $ 0.03 $ 0.11 $ (0.07)

Three Months Ended September 30,

Key Balance Sheet Metrics

2020

2019

Average MBS(1)

$

62,981,022

$

187,198,745

Average repurchase agreements(1)

61,151,086

177,565,500

Average stockholders' equity(1)

21,771,062

28,545,869

Key Performance Metrics

Average yield on MBS(2)

3.84%

3.52%

Average cost of funds(2)

0.28%

2.26%

Average economic cost of funds(3)

7.24%

2.54%

Average interest rate spread(4)

3.56%

1.26%

Average economic interest rate spread(5)

(3.40)%

0.98%

Three Months Ended September 30,

Key Balance Sheet Metrics 2020 2019

Average MBS^(1) $ 62,981,022 $ 187,198,745

Average repurchase agreements^(1) 61,151,086 177,565,500

Average stockholders' equity^(1) 21,771,062 28,545,869



Key Performance Metrics

Average yield on MBS^(2) 3.84% 3.52%

Average cost of funds^(2) 0.28% 2.26%

Average economic cost of funds^(3) 7.24% 2.54%

Average interest rate spread^(4) 3.56% 1.26%

Average economic interest rate spread^(5) (3.40)% 0.98%

(1)

Average MBS, repurchase agreements and stockholders' equity balances are calculated using two data points, the beginning and ending balances.

(2)

Portfolio yields and costs of funds are calculated based on the average balances of the underlying investment portfolio/repurchase agreement balances and are annualized for the quarterly periods presented.

(3)

Represents interest cost of our borrowings and the effect of derivative agreements attributed to the period related to hedging activities, divided by average repurchase agreements.

(4)

Average interest rate spread is calculated by subtracting average cost of funds from average yield on MBS.

(5)

Average economic interest rate spread is calculated by subtracting average economic cost of funds from average yield on MBS

About Bimini Capital Management, Inc.

Bimini Capital Management, Inc. invests primarily in, but is not limited to investing in, residential mortgage-related securities issued by the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Government National Mortgage Association (Ginnie Mae). Its objective is to earn returns on the spread between the yield on its assets and its costs, including the interest expense on the funds it borrows. In addition, Bimini generates a significant portion of its revenue serving as the manager of the MBS portfolio of Orchid Island Capital, Inc.

Forward Looking Statements

Statements herein relating to matters that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. The reader is cautioned that such forward-looking statements are based on information available at the time and on management's good faith belief with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in such forward-looking statements. Important factors that could cause such differences are described in Bimini Capital Management, Inc.'s filings with the Securities and Exchange Commission, including Bimini Capital Management, Inc.'s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Bimini Capital Management, Inc. assumes no obligation to update forward-looking statements to reflect subsequent results, changes in assumptions or changes in other factors affecting forward-looking statements.

Earnings Conference Call Details

An earnings conference call and live audio webcast will be hosted Friday, November 6, 2020, at 10:00 AM ET. The conference call may be accessed by dialing toll free (877) 312-5414. International callers dial (408) 940-3877. The conference passcode is 7955623. A live audio webcast of the conference call can be accessed via the investor relations section of the Company's website at www.biminicapital.com, and an audio archive of the webcast will be available for approximately one year.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201105006206/en/

CONTACT: Bimini Capital Management, Inc. Robert E. Cauley, 772-231-1400 Chairman and Chief Executive Officer www.biminicapital.com