Bimini Capital Management, Inc. (OTCBB:BMNM), (“Bimini Capital,”
“Bimini,” or the “Company”) today announced results of operations
for the three month period ended December 31, 2017.
Fourth Quarter 2017 Highlights
- Net loss of $18.4 million, or $1.45 per common share
- Income tax provision of $18.1 million, or $1.43 per common
share
- Book value per share of $4.40
- Company to discuss results on Friday, March 9, 2018, at 10:00
AM ET
Details of Fourth Quarter 2017 Results of
Operations
The Company reported net loss of $18.4 million, for the three
month period ended December 31, 2017. The results for the
quarter included advisory services revenue of $2.0 million,
interest and dividend income of $2.6 million, interest expense of
$1.0 million, net realized and unrealized losses of $2.1 million,
operating expenses of $1.9 million and an income tax provision of
$18.1 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 December 31,
2017, Bimini’s statement of operations included a fair value
adjustment of $(1.4) million and dividends of $0.6 from its
investment in Orchid common stock. Also during the three
months ended December 31, 2017, Bimini recorded $2.0 million in
advisory services revenue for managing Orchid’s portfolio
consisting of $1.6 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 Securities |
Sub-total |
Total |
Market Value -
September 30, 2017 |
$ |
195,151,197 |
|
$ |
1,642,730 |
|
$ |
1,196,476 |
|
$ |
2,839,206 |
|
$ |
197,990,403 |
|
Securities
Purchased |
|
18,290,339 |
|
|
- |
|
|
- |
|
|
- |
|
|
18,290,339 |
|
Return of
Investment |
|
n/a |
|
|
(189,166 |
) |
|
(76,966 |
) |
|
(266,132 |
) |
|
(266,132 |
) |
Pay-downs |
|
(4,552,224 |
) |
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
(4,552,224 |
) |
Premium Lost Due to
Pay-downs |
|
(369,454 |
) |
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
(369,454 |
) |
Mark to
Market (Losses) Gains |
|
(1,341,047 |
) |
|
23,133 |
|
|
(82,886 |
) |
|
(59,753 |
) |
|
(1,400,800 |
) |
Market Value - December 31, 2017 |
$ |
207,178,811 |
|
$ |
1,476,697 |
|
$ |
1,036,624 |
|
$ |
2,513,321 |
|
$ |
209,692,132 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The tables below present the allocation of capital between the
respective portfolios at December 31, 2017 and September 30, 2017,
and the return on invested capital for each sub-portfolio for the
three month period ended December 31, 2017. 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 0.8% and (1.3)%,
respectively, for the fourth quarter of 2017. The combined
portfolio generated a return on invested capital of approximately
0.4%.
|
Capital Allocation |
|
|
Structured Security Portfolio |
|
|
Pass-Through |
Interest-Only |
Inverse Interest |
|
|
|
Portfolio |
Securities |
Only Securities |
Sub-total |
Total |
December 31, 2017 |
|
|
|
|
|
|
|
|
|
|
Market
Value |
$ |
207,178,811 |
|
$ |
1,476,697 |
|
$ |
1,036,624 |
|
$ |
2,513,321 |
|
$ |
209,692,132 |
|
Cash
equivalents and restricted cash(1) |
|
8,619,350 |
|
|
- |
|
|
- |
|
|
- |
|
|
8,619,350 |
|
Repurchase Agreement Obligations |
|
(200,182,751 |
) |
|
- |
|
|
- |
|
|
- |
|
|
(200,182,751 |
) |
(2) |
$ |
15,615,410 |
|
$ |
1,476,697 |
|
$ |
1,036,624 |
|
$ |
2,513,321 |
|
$ |
18,128,731 |
|
|
|
86.1% |
|
|
8.2% |
|
|
5.7% |
|
|
13.9% |
|
|
100.0% |
|
September 30, 2017 |
|
|
|
|
|
|
|
|
|
|
Market
Value |
$ |
195,151,197 |
|
$ |
1,642,730 |
|
$ |
1,196,476 |
|
$ |
2,839,206 |
|
$ |
197,990,403 |
|
Cash
equivalents and restricted cash(1) |
|
5,974,532 |
|
|
- |
|
|
- |
|
|
- |
|
|
5,974,532 |
|
Repurchase Agreement Obligations |
|
(187,373,780 |
) |
|
- |
|
|
- |
|
|
- |
|
|
(187,373,780 |
) |
(2) |
$ |
13,751,949 |
|
$ |
1,642,730 |
|
$ |
1,196,476 |
|
$ |
2,839,206 |
|
$ |
16,591,155 |
|
|
|
82.9% |
|
|
9.9% |
|
|
7.2% |
|
|
17.1% |
|
|
100.0% |
|
(1) Amount excludes restricted cash of $133,510 and $173,420 at
December 31, 2017 and September 30, 2017, 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.
|
Returns for the Quarter |
|
|
Structured Security Portfolio |
|
|
Pass-Through |
Interest-Only |
Inverse Interest |
|
|
|
Portfolio |
Securities |
Only Securities |
Sub-total |
Total |
Income (net of repo
cost) |
$ |
1,270,121 |
|
$ |
976 |
|
$ |
22,758 |
|
$ |
23,734 |
|
$ |
1,293,855 |
|
Realized and unrealized
(losses) gains |
|
(1,710,501 |
) |
|
23,133 |
|
|
(82,886 |
) |
|
(59,753 |
) |
|
(1,770,254 |
) |
Hedge
gains(1) |
|
546,138 |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
546,138 |
|
|
$ |
105,758 |
|
$ |
24,109 |
|
$ |
(60,128 |
) |
$ |
(36,019 |
) |
$ |
69,739 |
|
Beginning
Capital Allocation |
|
13,751,949 |
|
|
1,642,730 |
|
|
1,196,476 |
|
|
2,839,206 |
|
|
16,591,155 |
|
Return
on Invested Capital for the Quarter(2) |
|
0.8% |
|
|
1.5% |
|
|
(5.0)% |
|
|
(1.3)% |
|
|
0.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes gains of approximately $237,000 associated with
trust preferred funding hedges.(2) Calculated by dividing the
Total Return by the Beginning Capital Allocation, expressed as a
percentage.
Prepayments
For the fourth quarter of 2017, the Company received
approximately $4.8 million in scheduled and unscheduled principal
repayments and prepayments, which equated to a constant prepayment
rate (“CPR”) of approximately 8.8% for the fourth quarter of
2017. Prepayment rates on the two MBS sub-portfolios were as
follows (in CPR):
|
PT |
Structured |
|
|
MBS Sub- |
MBS Sub- |
Total |
Three Months Ended, |
Portfolio |
Portfolio |
Portfolio |
December 31, 2017 |
7.2 |
16.9 |
8.8 |
September 30, 2017 |
5.2 |
18.8 |
8.3 |
June 30, 2017 |
5.9 |
20.4 |
9.9 |
March 31, 2017 |
4.8 |
18.8 |
8.8 |
December 31, 2016 |
5.5 |
27.3 |
11.1 |
September 30, 2016 |
9.4 |
19.7 |
13.6 |
June 30, 2016 |
7.8 |
20.4 |
12.6 |
March 31,
2016 |
11.8 |
16.6 |
14.3 |
Portfolio
The following tables summarize the MBS portfolio as of December
31, 2017 and 2016.
($ in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
Weighted |
|
|
|
|
Percentage |
|
Average |
|
|
|
|
of |
Weighted |
Maturity |
|
|
|
Fair |
Entire |
Average |
in |
Longest |
Asset Category |
|
Value |
Portfolio |
Coupon |
Months |
Maturity |
December 31, 2017 |
|
|
|
|
|
|
Fixed Rate MBS |
$ |
207,179 |
98.8 |
% |
4.21 |
% |
321 |
1-Dec-47 |
Interest-Only
Securities |
|
1,476 |
0.7 |
% |
3.43 |
% |
229 |
25-Dec-39 |
Inverse
Interest-Only Securities |
|
1,037 |
0.5 |
% |
5.01 |
% |
278 |
25-Apr-41 |
Total
Mortgage Assets |
$ |
209,692 |
100.0 |
% |
4.21 |
% |
320 |
1-Dec-47 |
December 31, 2016 |
|
|
|
|
|
|
Fixed Rate MBS |
|
124,299 |
95.4 |
% |
4.24 |
% |
347 |
1-Oct-46 |
Interest-Only
Securities |
|
2,654 |
2.0 |
% |
3.48 |
% |
245 |
25-Dec-39 |
Inverse
Interest-Only Securities |
|
3,349 |
2.6 |
% |
5.52 |
% |
325 |
25-Dec-46 |
Total
Mortgage Assets |
$ |
130,302 |
100.0 |
% |
4.26 |
% |
344 |
25-Dec-46 |
|
|
|
|
|
|
|
|
|
($ in
thousands) |
|
|
|
|
|
|
|
|
|
|
December 31, 2017 |
|
December 31, 2016 |
|
|
|
|
Percentage of |
|
|
|
Percentage of |
Agency |
|
Fair Value |
|
Entire Portfolio |
|
Fair Value |
|
Entire Portfolio |
Fannie Mae |
$ |
178,581 |
|
85.2 |
% |
$ |
120,961 |
|
92.8 |
% |
Freddie Mac |
|
30,896 |
|
14.7 |
% |
|
8,870 |
|
6.8 |
% |
Ginnie
Mae |
|
215 |
|
0.1 |
% |
|
471 |
|
0.4 |
% |
Total
Portfolio |
$ |
209,692 |
|
100.0 |
% |
$ |
130,302 |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
Entire Portfolio |
|
December 31, 2017 |
|
December 31, 2016 |
Weighted Average Pass
Through Purchase Price |
$ |
109.06 |
$ |
110.31 |
Weighted Average
Structured Purchase Price |
$ |
6.02 |
$ |
6.74 |
Weighted Average Pass
Through Current Price |
$ |
107.13 |
$ |
107.54 |
Weighted Average
Structured Current Price |
$ |
7.06 |
$ |
10.40 |
Effective
Duration (1) |
|
3.832 |
|
4.769 |
(1) Effective duration of 3.832 indicates that an interest rate
increase of 1.0% would be expected to cause a 3.832% decrease in
the value of the MBS in the Company’s investment portfolio at
December 31, 2017. An effective duration of 4.769 indicates
that an interest rate increase of 1.0% would be expected to cause a
4.769% decrease in the value of the MBS in the Company’s investment
portfolio at December 31, 2016. These figures include the
structured securities in the portfolio but not the effect of the
Company’s funding cost hedges. Effective duration quotes for
individual investments are obtained from The Yield Book, Inc.
Financing, Leverage and Liquidity
As of December 31, 2017, the Company had outstanding repurchase
obligations of approximately $200.2 million with a net weighted
average borrowing rate of 1.52%. These agreements were
collateralized by MBS with a fair value, including accrued
interest, of approximately $210.0 million. At December 31,
2017, the Company’s liquidity was approximately $6.5 million,
consisting of unpledged MBS and cash and cash equivalents.
We may pledge more of our structured MBS as part of a repurchase
agreement funding, but retain cash in lieu of acquiring additional
assets. In this way, we can, at a modest cost, retain higher
levels of cash on hand and decrease the likelihood we will have to
sell assets in a distressed market in order to raise cash. Below is
a listing of outstanding borrowings under repurchase obligations at
December 31, 2017.
($ in
thousands) |
|
|
|
|
|
|
|
|
|
Repurchase Agreement Obligations |
|
|
|
|
|
|
Weighted |
|
|
Weighted |
|
|
Total |
|
|
|
Average |
|
|
Average |
|
|
Outstanding |
|
% of |
|
Borrowing |
|
Amount |
Maturity |
Counterparty |
|
Balances |
|
Total |
|
Rate |
|
at Risk(1) |
(in Days) |
ED&F Man Capital
Markets, Inc. |
$ |
81,204 |
|
40.6 |
% |
|
1.53 |
% |
$ |
4,505 |
45 |
Citigroup Global
Markets, Inc. |
|
35,421 |
|
17.7 |
% |
|
1.58 |
% |
|
2,661 |
49 |
Mirae Asset Securities
(USA) Inc. |
|
29,338 |
|
14.7 |
% |
|
1.50 |
% |
|
1,608 |
28 |
South Street
Securities, LLC |
|
28,099 |
|
14.0 |
% |
|
1.55 |
% |
|
1,645 |
35 |
KGS -
Alpha Capital Markets, L.P. |
|
26,121 |
|
13.0 |
% |
|
1.39 |
% |
|
1,313 |
16 |
|
$ |
200,183 |
|
100.0 |
% |
|
1.52 |
% |
$ |
11,732 |
38 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Equal to the fair value of securities sold plus accrued
interest receivable and cash posted as collateral (if any), minus
the sum of repurchase agreement liabilities and accrued interest
payable.
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 December 31, 2017, such instruments were
comprised entirely of Eurodollar futures contracts.
The table below presents information related to outstanding
Eurodollar futures positions at December 31, 2017.
($ in
thousands) |
|
|
|
|
|
|
|
|
|
|
Repurchase Agreement Funding
Hedges |
|
|
Average |
|
Weighted |
|
Weighted |
|
|
|
|
Contract |
|
Average |
|
Average |
|
|
|
|
Notional |
|
Entry |
|
LIBOR |
|
Open |
Expiration Year |
|
Amount |
|
Rate |
|
Rate |
|
Equity(1) |
2018 |
$ |
60,000 |
|
1.90 |
% |
|
1.97 |
% |
$ |
41 |
|
2019 |
|
60,000 |
|
2.32 |
% |
|
2.27 |
% |
|
(31 |
) |
2020 |
|
60,000 |
|
2.60 |
% |
|
2.36 |
% |
|
(145 |
) |
2021 |
|
60,000 |
|
2.80 |
% |
|
2.42 |
% |
|
(230 |
) |
Total /
Weighted Average |
$ |
60,000 |
|
2.41 |
% |
|
2.25 |
% |
$ |
(365 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
($ in
thousands) |
|
|
|
|
|
|
|
|
|
|
Junior Subordinated Debt Funding
Hedges |
|
|
Average |
|
Weighted |
|
Weighted |
|
|
|
|
Contract |
|
Average |
|
Average |
|
|
|
|
Notional |
|
Entry |
|
LIBOR |
|
Open |
Expiration Year |
|
Amount |
|
Rate |
|
Rate |
|
Equity(1) |
2018 |
$ |
26,000 |
|
1.84 |
% |
|
1.97 |
% |
$ |
33 |
2019 |
|
26,000 |
|
1.63 |
% |
|
2.27 |
% |
|
166 |
2020 |
|
26,000 |
|
1.95 |
% |
|
2.36 |
% |
|
107 |
2021 |
|
26,000 |
|
2.22 |
% |
|
2.42 |
% |
|
51 |
Total /
Weighted Average |
$ |
26,000 |
|
1.91 |
% |
|
2.25 |
% |
$ |
357 |
|
|
|
|
|
|
|
|
|
|
|
(1) Open equity represents the cumulative gains (losses)
recorded on open futures positions.
Book Value Per Share
The Company's Book Value Per Share at December 31, 2017 was
$4.40. 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 December 31,
2017, the Company's stockholders’ equity was $55.7 million with
12,660,627 Class A Common shares outstanding.
Management Commentary
Commenting on the fourth quarter, Robert E. Cauley, Chairman and
Chief Executive Officer, said, “The fourth quarter of 2017 was
another strong growth quarter for Bimini. This caps a strong
year as we continue to take advantage of our tax net operating loss
carryforwards to organically grow our MBS portfolio at our
subsidiary, Royal Palm Capital. While the Tax Cuts and Jobs Act,
passed late in the year, lowered the corporate rate from 35% to 21%
and therefore caused us to record a significant tax provision of
$18.1 million primarily due to the lowered value of our deferred
tax asset, we continued to generate positive net cash flows to
deploy into the MBS portfolio. As the external manager of
Orchid Island Capital, our management fees increase as Orchid
Island is able to grow its capital base. During the fourth
quarter of 2017 Orchid grew its capital base by approximately 12%
and approximately 39% for all of 2017. This caused our
advisory services revenue to increase by 5% in the fourth quarter
of 2017 and 35% for the year. The incremental revenues
enabled us to grow the MBS portfolio at Royal Palm by 6% for the
fourth quarter of 2017 and 61% for all of 2017. As the
portfolio grows our net interest income typically grows as well,
depending on changes in the average yield of our assets in relation
to our funding costs. For the fourth quarter of 2017 our net
interest income grew by 28% and the sum of our net interest income
and dividends on our Orchid Island shares increased by 22%.
For the year the comparable figures are 22% and 30%.
“As Orchid Island management fees increase and/or the Royal Palm
portfolio grows, the potential net interest income generated by the
MBS portfolio grows. With the tax net operating losses we are
able to retain any net income and increase the size of the
portfolio further. We intend to use this organic growth model
to utilize our available loss carryovers. We estimate these
loss carryovers to be $19.1 million at Bimini and $253.5 million at
Royal Palm as of December 31, 2017
Turning to macroeconomic developments for the quarter, the
fourth quarter of 2017 marked a reversal of the trend in place for
the first nine months of the year. The shifts that occurred were
numerous. Perhaps the most significant from a long-term
perspective was the surprise success the Trump administration had
in passing a substantive tax package – The Tax Cuts and Jobs Act of
2017 (the “Act”). The significance of the Act was
two-fold. On the one hand, its passage ended the Trump
administration’s string of legislative failures, and on the other,
we believe the legislation should be stimulative for the economy –
at least for the first five years after passage and before certain
provisions are reduced or eliminated. The effect of the
passage of the Act was reinforced by strong economic data that
bolstered the “risk on” sentiment in the markets. The equity
markets continued to set new record high closes almost daily, while
other risk assets, such as commodities and investment grade and
sub-investment grade debt, continued to perform very well.
“A second significant event that impacted the markets during the
fourth quarter actually occurred late in the third quarter.
Following the September 2017 meeting of the Federal Reserve Open
Market Committee (the “FOMC”), chair Yellen stated the Federal
Reserve (the “Fed”) viewed recent soft inflation data as owing to
transitory factors and that they remained confident that inflation
would trend towards their 2% target level over the medium
term. This acknowledgement by the Fed that they would look
past soft inflation data in the near term, and continue to remove
accommodation, forced the market to reprice expectations for
additional interest rate hikes. Just prior to the September 2017
meeting, the market was pricing in an approximately 50% chance of
one hike by the Fed over the next 12 months. In contrast, the Fed’s
most recent “dot plot” implies three interest rate hikes in
2018. By January 2018, the market was pricing over 2.5 hikes
in 2018, and the gap that existed in August and early September
2017 had essentially been closed. Further, the yield on the
10-year U.S. T-Note reached 2.406% by December 29, 2017, and
surpassed 2.9% in February 2018. This represents a
significant movement from August 2017 when the 10-year U.S. T-Note
was threatening to break below 2%. Combined, these two events drove
the yield curve flatter, with the January 29, 2018 yield spread
between the 5-year U.S. T-Note and 30-year U.S. Treasury Bond at
the lowest level since late 2007.
“The mortgage market was impacted by these events in a positive
way. The strong “risk on” tone of the markets continued to
drive spreads available in the various investment grade and
sub-investment grade markets tighter. By comparison, Agency
MBS spreads appeared relatively attractive and continued to tighten
over the course of the fourth quarter. In early January 2018,
the spread of the 30-year, fixed rate conventional mortgage to the
10-year U.S. T-Note hit its tightest level since early 2013.
This spread has since widened as longer-term rates continue to inch
higher, as extension fears entered the market. Extension
refers to the phenomenon by which the weighted average life of a
mortgage cash flow extends as prepayment activity slows due to
higher prevailing mortgage rates available to borrowers. Going
forward, the balance between the volume of mortgage supply –
generally a function of the level of available mortgage rates and
prepayment levels - and the effect of reduced purchases by the Fed
will be critical for Agency MBS performance.”
Summarized Financial Statements
The following is a summarized presentation of the unaudited
consolidated balance sheets as of December 31, 2017, and 2016,
and the unaudited consolidated statements of operations for the
calendar quarters and years ended December 31, 2017 and 2016.
Amounts presented are subject to change.
BIMINI CAPITAL MANAGEMENT, INC. |
CONSOLIDATED BALANCE SHEETS |
(Unaudited - Amounts Subject to
Change) |
|
|
|
|
|
|
|
December 31, 2017 |
|
December 31, 2016 |
ASSETS |
|
|
|
|
Mortgage-backed
securities |
$ |
209,692,132 |
$ |
130,301,989 |
Cash equivalents and
restricted cash |
|
8,752,860 |
|
5,651,437 |
Investment in Orchid
Island Capital, Inc. |
|
14,105,934 |
|
15,108,240 |
Retained interests in
securitizations |
|
653,380 |
|
1,113,736 |
Accrued interest
receivable |
|
746,121 |
|
512,760 |
Deferred tax assets,
net |
|
44,524,584 |
|
63,833,063 |
Other
assets |
|
6,113,786 |
|
6,349,179 |
Total
Assets |
$ |
284,588,797 |
$ |
222,870,404 |
|
|
|
|
|
LIABILITIES AND
EQUITY |
|
|
|
|
Repurchase
agreements |
$ |
200,182,751 |
$ |
121,827,586 |
Junior subordinated
notes |
|
26,804,440 |
|
26,804,440 |
Other
liabilities |
|
1,909,358 |
|
2,091,480 |
Total
Liabilities |
|
228,896,549 |
|
150,723,506 |
Stockholders' equity |
|
55,692,248 |
|
72,146,898 |
Total
Liabilities and Equity |
$ |
284,588,797 |
$ |
222,870,404 |
Class A Common Shares
outstanding |
|
12,660,627 |
|
12,631,627 |
Book
value per share |
$ |
4.40 |
$ |
5.71 |
BIMINI CAPITAL MANAGEMENT, INC. |
CONSOLIDATED STATEMENTS OF
OPERATIONS |
(Unaudited - Amounts Subject to
Change) |
|
|
|
|
|
|
|
|
|
|
|
Years Ended |
|
Three Months Ended |
|
|
December 31, |
|
December 31, |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Advisory services |
$ |
7,431,359 |
|
$ |
5,488,691 |
|
$ |
2,033,340 |
|
$ |
1,558,158 |
|
Interest and dividend
income |
|
8,573,041 |
|
|
6,578,741 |
|
|
2,617,636 |
|
|
1,870,673 |
|
Interest
expense |
|
(3,033,367 |
) |
|
(1,855,984 |
) |
|
(1,008,925 |
) |
|
(541,303 |
) |
Net revenues |
|
12,971,033 |
|
|
10,211,448 |
|
|
3,642,051 |
|
|
2,887,528 |
|
(Losses) gains |
|
(3,672,718 |
) |
|
59,938 |
|
|
(2,114,684 |
) |
|
(1,041,931 |
) |
Expenses |
|
6,402,785 |
|
|
5,743,664 |
|
|
1,851,398 |
|
|
1,662,700 |
|
Net income (loss)
before income tax benefit |
|
2,895,530 |
|
|
4,527,722 |
|
|
(324,031 |
) |
|
182,897 |
|
Income
tax expense (benefit) |
|
19,378,150 |
|
|
1,141,718 |
|
|
18,094,969 |
|
|
(976,181 |
) |
Net
(loss) income |
$ |
(16,482,620 |
) |
$ |
3,386,004 |
|
$ |
(18,419,000 |
) |
$ |
1,159,078 |
|
|
|
|
|
|
|
|
|
|
Basic and Diluted Net (loss) income Per Share
of: |
|
|
|
|
|
|
|
|
CLASS A COMMON
STOCK |
$ |
(1.30 |
) |
$ |
0.27 |
|
$ |
(1.45 |
) |
$ |
0.09 |
|
CLASS B
COMMON STOCK |
$ |
(1.30 |
) |
$ |
0.27 |
|
$ |
(1.45 |
) |
$ |
0.09 |
|
|
|
Consolidated |
|
|
Three Months Ended December 31, |
Key Balance Sheet Metrics |
|
2017 |
|
2016 |
|
Average MBS(1) |
|
$ |
203,841,267 |
|
$ |
131,951,832 |
|
Average repurchase
agreements(1) |
|
|
193,778,266 |
|
|
123,909,309 |
|
Average equity(1) |
|
|
64,898,520 |
|
|
71,565,545 |
|
|
|
|
|
|
|
Key Performance
Metrics |
|
|
|
|
|
Average yield on
MBS(2) |
|
|
3.88% |
|
|
3.89% |
|
Average cost of
funds(2) |
|
|
1.41% |
|
|
0.81% |
|
Average economic cost
of funds(3) |
|
|
1.77% |
|
|
1.20% |
|
Average interest rate
spread(4) |
|
|
2.47% |
|
|
3.08% |
|
Average
economic interest rate spread(5) |
|
|
2.11% |
|
|
2.69% |
|
(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. is an asset manager
that invests primarily 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).
Through our wholly-owned subsidiary, Bimini
Advisors Holdings, LLC ("Bimini Advisors"), we serve as the
external manager of Orchid Island Capital, Inc. ("Orchid"). Orchid
is a publicly-traded real estate investment trust (NYSE:ORC).
Orchid is managed to earn returns on the spread between the yield
on its assets and its costs, including the interest expense on the
funds it borrows. As Orchid’s external manager, Bimini Advisors
receives management fees and expense reimbursements for managing
Orchid's investment portfolio 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 Advisors is at all
times subject to the supervision and oversight of Orchid's board of
directors and has only such functions and authority as are
delegated to it.
We also manage the portfolio of our wholly-owned
subsidiary, Royal Palm Capital, LLC (“Royal Palm”). Royal Palm is
managed with an investment strategy similar to that of
Orchid. Bimini Capital Management, Inc. and its subsidiaries
are headquartered in Vero Beach, Florida.
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, March 9, 2018, 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 5979217. 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.
CONTACT:Bimini Capital Management, Inc.Robert E. Cauley,
772-231-1400Chairman and Chief Executive
Officerwww.biminicapital.com
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