"Bimini Capital Management: Q4 2024 Earnings Call - A Pivotal Quarter for the Asset Manager!"

Ladies and gentlemen, buckle up! We're diving into the Q4 2024 earnings call of Bimini Capital Management, Inc. (OTCQB: BMNM), and let me tell you, this quarter was a rollercoaster ride! The market pivoted, the Fed made moves, and Bimini had to navigate it all. So, let's break it down!

The Fed's Moves and Market Pivot

First things first, the economic outlook shifted dramatically in Q4 2024. Inflation was falling towards the Fed’s 2% target, the labor market was cooling, and the Fed had lowered the Fed Funds rate by 50 basis points. The market expected over 200 basis points of cuts over the next 18 months. But then, BOOM! The incoming data turned, and the Fed lowered the rate by another 50 basis points in two moves. The yield curve dis-inverted, and market expectations for further rate cuts declined. Talk about a wild ride!

Orchid Island Capital's Performance

Now, let's talk about Orchid Island Capital, Inc. (NYSE: ORC), the real estate investment trust managed by Bimini. Orchid reported a net income of $5.6 million for Q4 2024, and its shareholders' equity increased slightly to $668.5 million. This performance directly impacted Bimini's advisory service revenues, which increased to $3.4 million. And get this—Orchid's shareholder base grew in late February 2025, setting the stage for another revenue boost in Q1 2025. This is a no-brainer—Orchid's performance is a key driver for Bimini's success!

Investment Portfolio Growth

Bimini's investment portfolio, managed by Royal Palm Capital, LLC, also saw significant growth. The MBS portfolio increased by $4.0 million during Q4 2024 and by $29.5 million for the year. Positive cash flows from operations allowed Bimini to expand its MBS portfolio throughout the year. The investment portfolio generated net interest income of $0.3 million, and dividends on Orchid stock were $0.2 million. Mark-to-market gains and losses on the MBS portfolio, hedge positions, and shares of Orchid netted to income of $0.1 million. This is growth, growth, growth!

Financial Performance

Despite the positive cash flows and portfolio growth, Bimini reported a net loss of $1.5 million for Q4 2024. Advisory service revenue for the quarter was $3.4 million, consisting of management fees of $2.5 million, overhead reimbursements of $0.7 million, and $0.2 million repurchase agreement and clearing services revenue. Operating expenses were $2.8 million, and an income tax provision of $2.1 million resulted in a net loss for the quarter. But here's the thing—Bimini updated its projected utilization of its deferred tax assets and increased the valuation allowance, which impacted the bottom line. This is a strategic move, folks, and it shows Bimini's commitment to long-term success.

Looking Ahead

So, what's next for Bimini Capital Management? The economic outlook remains resilient, but uncertainty has crept into the market. Interest rate levels, Federal Reserve monetary policy, and the MBS market are all up in the air. But Bimini is ready to navigate these challenges. The company's proactive approach to growing its MBS portfolio and generating positive cash flows positions it well for future success. And with Orchid's shareholder base continuing to grow, Bimini's advisory service revenues are set to increase in Q1 2025. This is a company on the move, folks, and you don't want to miss out!

In conclusion, Bimini Capital Management's Q4 2024 earnings call was a testament to the company's resilience and strategic prowess. Despite the challenges posed by the changing economic outlook and market expectations, Bimini navigated the quarter with finesse. The performance of Orchid Island Capital and Royal Palm Capital played a crucial role in Bimini's financial results, and the company's proactive approach to growing its MBS portfolio positions it well for future success. So, do this—stay tuned to Bimini Capital Management, and get ready for more growth, growth, growth!