Bimini Capital Management, Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Bimini Capital Management, Inc. filed its 2023 10-K, detailing financial performance, MBS portfolio changes, and segment-based expense allocation.</b>

AI Summary

BIMINI CAPITAL MANAGEMENT, INC. (BMNM) filed a Annual Report (10-K) with the SEC on March 8, 2024. Bimini Capital Management, Inc. reported its fiscal year 2023 results, ending December 31, 2023. The notional balance for the structured MBS portfolio was $18.9 million as of December 31, 2023, down from $21.8 million in 2022. The filing includes income from PPP loan forgiveness and gains/losses on Eurodollar futures contracts. Advisory services revenue was received by Bimini Advisors from Royal Palm. Operating expenses are allocated based on each segment's proportional share of total revenues.

Why It Matters

For investors and stakeholders tracking BIMINI CAPITAL MANAGEMENT, INC., this filing contains several important signals. The company's financial results and portfolio performance are detailed, providing insight into its real estate investment trust operations. Understanding the segment-based expense allocation and revenue sources like advisory services from Royal Palm is crucial for assessing operational efficiency and diversification.

Risk Assessment

Risk Level: — BIMINI CAPITAL MANAGEMENT, INC. shows moderate risk based on this filing. The company operates as a real estate investment trust, which can be sensitive to interest rate fluctuations and market conditions, as indicated by the mention of Eurodollar futures contracts and MBS portfolio notional balances.

Analyst Insight

Investors should review the detailed financial statements and risk factors in the 10-K to assess the company's exposure to market volatility and its strategies for managing its MBS portfolio.

Key Numbers

• 18.9 million — Structured MBS Portfolio Notional Balance (As of December 31, 2023)
• 21.8 million — Structured MBS Portfolio Notional Balance (As of December 31, 2022)

Key Players & Entities

• BIMINI CAPITAL MANAGEMENT, INC. (company) — Filer name
• Opteum Inc. (company) — Former company name
• BIMINI MORTGAGE MANAGEMENT INC (company) — Former company name
• Royal Palm (company) — Source of advisory services revenue
• Bimini Advisors (company) — Recipient of advisory services revenue

FAQ

Risk Factors

• Market Conditions [medium — market]: The company's operations are subject to the risks associated with the real estate and mortgage markets, including interest rate volatility.

Industry Context

Bimini Capital Management operates as a real estate investment trust (REIT), focusing on investments in mortgage-related assets.

Regulatory Implications

As a publicly traded company, Bimini Capital Management is subject to the reporting requirements of the Securities and Exchange Commission (SEC), including the filing of annual reports on Form 10-K.

What Investors Should Do

1. Review the detailed financial statements and notes to understand the company's revenue streams and expense structure.
2. Analyze the changes in the structured MBS portfolio and the impact of market conditions on its value.
3. Examine the company's risk factors section for a comprehensive understanding of potential challenges and uncertainties.

Key Dates

• 2023-12-31: Fiscal Year End — Reporting period for the 10-K filing.
• 2024-03-08: Filing Date — Date the 10-K was filed with the SEC.

Glossary

MBS

Mortgage-Backed Securities (Key asset class for the company, with portfolio balances reported.)

Eurodollar futures contracts

Financial derivatives used to hedge against interest rate risk. (Indicates hedging activities related to debt instruments.)

PPP loan

Paycheck Protection Program loan. (Forgiveness of this loan contributed to income.)

Year-Over-Year Comparison

This filing is the annual 10-K for the fiscal year ended December 31, 2023, providing a comprehensive overview of the company's performance and financial position compared to previous periods.

Key Financial Figures

• $0.001 — e of Each Class Class A Common Stock, $0.001 par value Indicate by check mark if th
• $250 million — t of: One-twelfth of 1.5% of the first $250 million of Orchid's equity, as defined in the m
• $500 m — $250 million and less than or equal to $500 million, and One-twelfth of 1.00% of Orc
• $500 million — of Orchid's equity that is greater than $500 million. Orchid is obligated to reimburse Bimi

Filing Documents

• bcmi20231231_10k.htm (10-K) — 2527KB
• ex_597626.htm (EX-21.1) — 7KB
• ex_597627.htm (EX-31.1) — 12KB
• ex_597628.htm (EX-31.2) — 12KB
• ex_597629.htm (EX-32.1) — 6KB
• ex_597630.htm (EX-32.2) — 5KB
• bcmi20221231_10kimg001.jpg (GRAPHIC) — 4KB
• 0001437749-24-007121.txt (&nbsp;) — 9103KB
• bmnm-20231231.xsd (EX-101.SCH) — 69KB
• bmnm-20231231_cal.xml (EX-101.CAL) — 50KB
• bmnm-20231231_def.xml (EX-101.DEF) — 461KB
• bmnm-20231231_lab.xml (EX-101.LAB) — 369KB
• bmnm-20231231_pre.xml (EX-101.PRE) — 489KB
• bcmi20231231_10k_htm.xml (XML) — 1489KB

Business

ITEM 1. Business. 1

Risk Factors

ITEM 1A. Risk Factors . 9

Unresolved Staff Comments

ITEM 1B. Unresolved Staff Comments. 28

Cybersecurity

ITEM 1C. Cybersecurity 28

Properties

ITEM 2. Properties. 30

Legal Proceedings

ITEM 3. Legal Proceedings. 30

Mine Safety Disclosures

ITEM 4. Mine Safety Disclosures. 30 PART II

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. 31

Reserved

ITEM 6. Reserved. 31

Management's Discussion and Analysis of Financial Condition and Results of Operations

ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. 32

Quantitative and Qualitative Disclosures About Market Risk

ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk. 51

Financial Statements and Supplementary Data

ITEM 8. Financial Statements and Supplementary Data. 52

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. 79

Controls and Procedures

ITEM 9A. Controls and Procedures. 79

Other Information

ITEM 9B. Other Information. 80

Disclosure Regarding Foreign Jurisdictions the Prevent Inspections

ITEM 9C. Disclosure Regarding Foreign Jurisdictions the Prevent Inspections. 80 PART III

Directors, Executive Officers and Corporate Governance

ITEM 10. Directors, Executive Officers and Corporate Governance. 81

Executive Compensation

ITEM 11. Executive Compensation. 81

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. 81

Certain Relationships and Related Transactions, and Director Independence

ITEM 13. Certain Relationships and Related Transactions, and Director Independence. 81

Principal Accountant Fees and Services

ITEM 14. Principal Accountant Fees and Services. 81 PART IV

Exhibits and Financial Statement Schedules

ITEM 15. Exhibits and Financial Statement Schedules. 82

Form 10-K Summary

ITEM 16. Form 10-K Summary. 84 Table of Contents SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS We make forward-looking statements in this Report that are subject to risks and uncertainties. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans and objectives. When we use the words "believe," "expect," "anticipate," "estimate," "intend," "should," "may," "plans," "projects," "will," or similar expressions, or the negative of these words, we intend to identify forward-looking statements. Statements regarding the following subjects are forward-looking by their nature: our business and investment strategy; our expected operating results; our ability to acquire investments on attractive terms; the effect of prepayment rates on the value of our assets; our ability to access the capital markets; our ability to obtain future financing arrangements; our ability to successfully hedge the interest rate risk and prepayment risk associated with our portfolio; our understanding of our competition and our ability to compete effectively; our ability to quantify risk based on historical experience; our ability to forecast our tax attributes, which are based upon various facts and assumptions, and our ability to protect and use our NOLs to offset future taxable income, including whether our shareholder rights plan will be effective in preventing an ownership change that would significantly limit our ability to utilize such NOLs; expected capital expenditures; the impact of technology on our operations and business; our ability to maintain our exemption from the obligation to register under the Investment Company Act of 1940, as amended (the "Investment Company Act"); market trends; the effect of actual, anticipated or proposed actions of the U.S. government, including the U.S. Federal Reserve (the "Fed"), the Federal Housing Finance A

BUSINESS

ITEM 1. BUSINESS Overview Bimini Capital Management, Inc., a Maryland corporation ("Bimini Capital" and, collectively with its subsidiaries, the "Company," "we", "us" or "our") is a specialty finance company that operates in two business segments: investing in mortgage-backed securities ("MBS") and Orchid Island Capital, Inc. ("Orchid") common stock in our own portfolio, and serving as the external manager of Orchid which also invests in MBS. In both cases, the principal and interest payments of these MBS are guaranteed by Fannie Mae, Freddie Mac or the Government National Mortgage Association ("Ginnie Mae" and, collectively with Fannie Mae and Freddie Mac, "GSEs") and are backed primarily by single-family residential mortgage loans. We refer to these types of MBS as "Agency MBS." The investment strategy focuses on, and the portfolios consist of, two categories of Agency MBS: (i) traditional pass-through Agency MBS, such as mortgage pass-through certificates and collateralized mortgage obligations ("CMOs") issued by the GSEs and (ii) structured Agency MBS, such as interest only securities ("IOs"), inverse interest only securities ("IIOs") and principal only securities ("POs"), among other types of structured Agency MBS. The Company's operations are classified into two reportable segments: the asset management segment and the investment portfolio segment. The investment portfolio segment includes the investment activities conducted at Bimini Capital's wholly-owned subsidiary, Royal Palm Capital, LLC ("Royal Palm"). The investment portfolio segment receives revenue in the form of interest and dividend income on its investments. References to the general management of the Company's portfolio of MBS refer to the operations of Royal Palm. The Company, through Royal Palm's wholly-owned subsidiary, Bimini Advisors Holdings, LLC ("Bimini Advisors"), serves as the external manager of Orchid and from this arrangement the Company receives management fees and expense reim

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View this 10-K filing on SEC EDGAR