UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, ~~2014~~2015

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to ___________

Commission File Number: 001-32171

Bimini Capital Management, Inc.

(Exact name of registrant as specified in its charter)


Maryland		72-1571637
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3305 Flamingo Drive, Vero Beach, Florida 32963

(Address of principal executive offices) (Zip Code)

(772) 231-1400

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer ¨ Smaller Reporting Company ý

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No ý

Indicate the number of shares outstanding of each of the Registrant’s classes of common stock, as of the latest practicable date:

Title of each Class	Latest Practicable Date	Shares Outstanding
Class A Common Stock, $0.001 par value	August ~~8, 2014~~5, 2015		~~12,313,758~~12,355,045
Class B Common Stock, $0.001 par value	August ~~8, 2014~~5, 2015		31,938
Class C Common Stock, $0.001 par value	August ~~8, 2014~~5, 2015		31,938

BIMINI CAPITAL MANAGEMENT, INC.

TABLE OF CONTENTS

	Page

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements		1
Consolidated Balance Sheets as of June 30, ~~2014~~2015 (unaudited) and December 31, ~~2013~~2014		1
Consolidated Statements of Operations (unaudited) for the six and three months ended June 30, ~~2014~~2015 and ~~2013~~2014		2
Consolidated Statement of Stockholders’ Equity (unaudited) for the six months ended June 30, ~~2014~~2015		3
Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, ~~2014~~2015 and ~~2013~~2014		4
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		2926
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk		5452
ITEM 4. Controls and Procedures		5452

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings		5553
ITEM 1A. Risk Factors		5653
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds		5654
ITEM 3. Defaults Upon Senior Securities		5654
ITEM 4. Mine Safety Disclosures		5654
ITEM 5. Other Information		5654
ITEM 6. Exhibits		5655
SIGNATURES		5756

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BIMINI CAPITAL MANAGEMENT, INC.	BIMINI CAPITAL MANAGEMENT, INC.							BIMINI CAPITAL MANAGEMENT, INC.
CONSOLIDATED BALANCE SHEETS	CONSOLIDATED BALANCE SHEETS							CONSOLIDATED BALANCE SHEETS

		(Unaudited)							(Unaudited)
		June 30, 2014			December 31, 2013				June 30, 2015			December 31, 2014
ASSETS:
Mortgage-backed securities, at fair value
Pledged to counterparties		$	907,677,107		$	372,102,248			$	105,812,917		$	116,026,180
Unpledged			43,963,577			17,238,710				1,948,249			1,804,852
Total mortgage-backed securities			951,640,684			389,340,958				107,761,166			117,831,032
Cash and cash equivalents			37,162,543			11,959,292				7,009,072			4,699,059	��
Restricted cash			3,992,200			2,557,165				2,547,550			733,660
Orchid Island Capital, Inc. common stock, at fair value										11,004,464			12,810,728
Retained interests in securitizations			3,135,010			2,530,834				2,141,458			1,899,684
Accrued interest receivable			4,089,321			1,720,726				440,267			460,326
Property and equipment, net			3,643,358			3,663,437				3,537,405			3,584,603
Derivative asset, at fair value			1,199,700			-
Deferred tax assets, net			2,154,025			-				1,428,754			1,900,064
Other assets			2,994,415			2,755,234				2,652,616			2,960,042
Total Assets		$	1,010,011,256		$	414,527,646			$	138,522,752		$	146,879,198

LIABILITIES AND EQUITY
LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:
Repurchase agreements		$	854,026,395		$	353,396,075			$	101,205,930		$	109,963,995
Junior subordinated notes due to Bimini Capital Trust II			26,804,440			26,804,440				26,804,440			26,804,440
Payable for unsettled security purchased			6,828,538			-
Accrued interest payable			360,506			142,055				89,111			94,397
Other liabilities			2,338,510			826,660				4,065,873			814,597
Total Liabilities			890,358,389			381,169,230				132,165,354			137,677,429

COMMITMENTS AND CONTINGENCIES

EQUITY:
STOCKHOLDERS' EQUITY:
Preferred stock			-			-				-			-
Common stock			12,359			11,574				12,410			12,388
Additional paid-in capital			334,108,498			334,810,312				334,571,864			334,522,850
Accumulated deficit			(327,379,125	)		(333,078,313	)			(328,226,876	)		(325,333,469	)
Stockholders’ equity			6,741,732			1,743,573				6,357,398			9,201,769
Noncontrolling interests			112,911,135			31,614,843
Total Equity			119,652,867			33,358,416
Total Liabilities and Equity		$	1,010,011,256		$	414,527,646

The following table includes assets to be used to settle liabilities of the consolidated variable interest entity ("VIE"). These assets and liabilities are included in the consolidated balance sheets above. See Note 15 for additional information on our consolidated VIE.
ASSETS:
Mortgage-backed securities		$	876,004,251		$	351,222,512
Cash and cash equivalents and restricted cash			36,868,745			10,615,027
Accrued interest receivable and other assets			5,513,490			1,738,508
LIABILITIES:
Repurchase agreements			783,700,849			318,557,054
Payable for unsettled securities purchased			6,828,538			-
Accrued interest payable and other liabilities			2,015,928			171,721
Total Liabilities and Stockholders' Equity									$	138,522,752		$	146,879,198
See Notes to Consolidated Financial Statements	See Notes to Consolidated Financial Statements							See Notes to Consolidated Financial Statements

1-1-

BIMINI CAPITAL MANAGEMENT, INC.	BIMINI CAPITAL MANAGEMENT, INC.													BIMINI CAPITAL MANAGEMENT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS	CONSOLIDATED STATEMENTS OF OPERATIONS													CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)	(Unaudited)													(Unaudited)
For the Six and Three Months Ended June 30, 2014 and 2013
For the Six and Three Months Ended June 30, 2015 and 2014														For the Six and Three Months Ended June 30, 2015 and 2014

		Six Months Ended June 30,						Three Months Ended June 30,							Six Months Ended June 30,						Three Months Ended June 30,
		2014			2013			2014			2013				2015			2014			2015			2014
Interest income		$	11,235,494		$	4,005,840		$	7,119,482		$	2,479,678			$	2,281,256		$	11,235,494		$	1,074,122		$	7,119,482
Interest expense			(1,182,616	)		(607,559	)		(728,277	)		(360,853	)			(198,334	)		(1,182,616	)		(98,142	)		(728,277	)
Net interest income, before interest on junior subordinated notes			10,052,878			3,398,281			6,391,205			2,118,825				2,082,922			10,052,878			975,980			6,391,205
Interest expense on junior subordinated notes			(488,517	)		(495,565	)		(245,334	)		(248,367	)			(491,461	)		(488,517	)		(247,988	)		(245,334	)
Net interest income			9,564,361			2,902,716			6,145,871			1,870,458				1,591,461			9,564,361			727,992			6,145,871
Unrealized gains (losses) on mortgage-backed securities			11,266,428			(10,885,051	)		9,698,117			(10,412,972	)
Realized gains (losses) on mortgage-backed securities			4,049,477			(873,987	)		2,980,121			(933,940	)
Unrealized (losses) gains on mortgage-backed securities																(197,399	)		11,266,428			(1,026,695	)		9,698,117
Realized gains on mortgage-backed securities																-			4,049,477			-			2,980,121
(Losses) gains on derivative instruments			(7,590,975	)		6,596,069			(5,873,958	)		7,071,631				(1,009,075	)		(7,590,975	)		5,625			(5,873,958	)
Net portfolio income (deficiency)			17,289,291			(2,260,253	)		12,950,151			(2,404,823	)
Net portfolio income (loss)																384,987			17,289,291			(293,078	)		12,950,151

Other income:
Gains (losses) on retained interests in securitizations			2,446,586			1,755,179			2,252,897			(229,647	)
Gains on release of loan loss reserves			-			3,037,260			-			3,037,260
Other expense			(20,253	)		(8,716	)		(10,125	)		(6,237	)
Gains on retained interests in securitizations																2,538,580			2,446,586			1,052,824			2,252,897
Unrealized losses on Orchid Island Capital, Inc. common stock																(1,806,264	)		-			(1,992,780	)		-
Orchid Island Capital, Inc. dividends																1,060,198			-			530,099			-
Management fees																1,868,700			-			1,013,900			-
Other expense, net																(22,153	)		(20,253	)		(10,174	)		(10,125	)
Total other income			2,426,333			4,783,723			2,242,772			2,801,376				3,639,061			2,426,333			593,869			2,242,772

Expenses:
Compensation and related benefits			1,357,307			852,971			911,134			421,727				1,263,444			1,357,307			594,653			911,134
Directors' fees and liability insurance			543,512			390,707			302,950			222,305				342,703			543,512			174,937			302,950
Orchid Island Capital, Inc. IPO expenses			-			3,042,333			-			546
Audit, legal and other professional fees			1,088,791			722,942			688,541			366,226				1,047,451			1,088,791			712,674			688,541
Direct REIT operating expenses			229,316			233,672			114,133			98,767				36,858			229,316			18,055			114,133
Other administrative			391,075			342,231			236,354			174,603
Settlement of litigation																3,500,000			-			-			-
Other administrative expenses																118,688			391,075			33,735			236,354
Total expenses			3,610,001			5,584,856			2,253,112			1,284,174				6,309,144			3,610,001			1,534,054			2,253,112

Net income (loss) before income tax (benefit) provision			16,105,623			(3,061,386	)		12,939,811			(887,621	)
Income tax (benefit) provision			(2,131,758	)		39,386			25,601			3,386
Net (loss) income before income tax provision (benefit)																(2,285,096	)		16,105,623			(1,233,263	)		12,939,811
Income tax provision (benefit)																608,311			(2,131,758	)		271,216			25,601

Net income (loss)			18,237,381			(3,100,772	)		12,914,210			(891,007	)
Less: Income (loss) attributable to noncontrolling interests			12,538,193			(530,963	)		9,584,234			(1,091,947	)
Net (loss) income																(2,893,407	)		18,237,381			(1,504,479	)		12,914,210
Less: income attributable to noncontrolling interests																-			12,538,193			-			9,584,234

Net Income (Loss) attributable to Bimini Capital stockholders		$	5,699,188		$	(2,569,809	)	$	3,329,976		$	200,940
Net (Loss) Income attributable to Bimini Capital stockholders															$	(2,893,407	)	$	5,699,188		$	(1,504,479	)	$	3,329,976

Basic and Diluted Net Income (Loss) Per Share of:
Basic and Diluted Net (Loss) Income Per Share of:
CLASS A COMMON STOCK
Basic and Diluted		$	0.47		$	(0.24	)	$	0.27		$	0.02			$	(0.23	)	$	0.47		$	(0.12	)	$	0.27
CLASS B COMMON STOCK
Basic and Diluted		$	0.47		$	(0.24	)	$	0.27		$	0.02			$	(0.23	)	$	0.47		$	(0.12	)	$	0.27
Weighted Average Shares Outstanding:
CLASS A COMMON STOCK
Basic and Diluted			12,071,977			10,626,491			12,294,879			10,984,756				12,339,358			12,071,977			12,346,224			12,294,879
CLASS B COMMON STOCK
Basic and Diluted			31,938			31,938			31,938			31,938				31,938			31,938			31,938			31,938
See Notes to Consolidated Financial Statements	See Notes to Consolidated Financial Statements													See Notes to Consolidated Financial Statements

2-2-

BIMINI CAPITAL MANAGEMENT, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
For the Six Months Ended June 30, 2014

Stockholders' Equity
Common Additional Accumulated Noncontrolling
Stock Paid-in Capital Deficit Interests Total
Balances, January 1, 2014 $ 11,574 $ 334,810,312 $ (333,078,313 ) $ 31,614,843 $ 33,358,416
Net income - - 5,699,188 12,538,193 18,237,381
Issuance of common shares of
Orchid Island Capital, Inc. - (1,004,447 ) - 76,120,369 75,115,922
Cash dividends paid to
noncontrolling interests - - - (7,378,350 ) (7,378,350 )
Issuance of Class A common shares
for equity plan exercises 527 204,891 - - 205,418
Amortization of equity plan compensation - - - 16,080 16,080
Class A common shares sold
directly to employees 258 97,742 - - 98,000

Balances, June 30, 2014 $ 12,359 $ 334,108,498 $ (327,379,125 ) $ 112,911,135 $ 119,652,867
See Notes to Consolidated Financial Statements

BIMINI CAPITAL MANAGEMENT, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
For the Six Months Ended June 30, 2015

	Stockholders' Equity
		Common		Additional			Accumulated
		Stock		Paid-in Capital			Deficit				Total
Balances, January 1, 2015		$	12,388		$	334,522,850		$	(325,333,469	)		$	9,201,769
Net loss			-			-			(2,893,407	)			(2,893,407	)
Issuance of Class A common shares for board compensation			22			39,669			-				39,691
Amortization of equity plan compensation			-			9,345			-				9,345

Balances, June 30, 2015		$	12,410		$	334,571,864		$	(328,226,876	)		$	6,357,398
See Notes to Consolidated Financial Statements

3-3-

BIMINI CAPITAL MANAGEMENT, INC.	BIMINI CAPITAL MANAGEMENT, INC.							BIMINI CAPITAL MANAGEMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS	CONSOLIDATED STATEMENTS OF CASH FLOWS							CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)	(Unaudited)							(Unaudited)
For the Six Months Ended June 30, 2014 and 2013
For the Six Months Ended June 30, 2015 and 2014								For the Six Months Ended June 30, 2015 and 2014

		2014			2013				2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)		$	18,237,381		$	(3,100,772	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Stock based compensation and equity plan amortization			221,498			40,744
Net (loss) income									$	(2,893,407	)	$	18,237,381
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Stock based compensation										49,036			221,498
Depreciation			54,629			60,545				47,198			54,629
Deferred income tax benefit			(2,154,025	)		-
(Gains) losses on mortgage-backed securities			(15,315,905	)		11,759,038
Deferred income tax provision (benefit)										471,310			(2,154,025	)
Losses (gains) on mortgage-backed securities										197,399			(15,315,905	)
Gains on retained interests in securitizations			(2,446,586	)		(1,755,179	)			(2,538,580	)		(2,446,586	)
Gains on release of loan loss reserves			-			(3,037,260	)
Unrealized losses on Orchid Island Capital, Inc. common stock										1,806,264			-
Realized and unrealized losses on interest rate swaptions			1,285,300			-				-			1,285,300
Changes in operating assets and liabilities:
Accrued interest receivable			(2,368,595	)		(867,636	)			20,059			(2,368,595	)
Other assets			(239,673	)		308,535				307,426			(239,673	)
Accrued interest payable			218,451			(22,028	)			(5,286	)		218,451
Other liabilities			245,850			(124,413	)			3,251,276			245,850
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES			(2,261,675	)		3,261,574
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES										712,695			(2,261,675	)

CASH FLOWS FROM INVESTING ACTIVITIES:
From mortgage-backed securities investments:
Purchases			(1,003,577,756	)		(460,089,739	)			(986,194	)		(1,003,577,756	)
Sales			434,601,973			214,734,292				-			434,601,973
Principal repayments			28,820,992			20,974,437				10,858,661			28,820,992
Payments received on retained interests in securitizations			1,842,410			1,628,594				2,296,806			1,842,410
Increase in restricted cash			(1,435,035	)		(8,470,313	)			(1,813,890	)		(1,435,035	)
Purchases of property and equipment			(34,550	)		(10,940	)			-			(34,550	)
Purchase of interest rate swaptions, net of margin cash received			(1,219,000	)		-				-			(1,219,000	)
NET CASH USED IN INVESTING ACTIVITIES			(541,000,966	)		(231,233,669	)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES										10,355,383			(541,000,966	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from repurchase agreements			3,523,211,129			1,972,626,965				451,679,644			3,523,211,129
Principal repayments on repurchase agreements			(3,022,580,809	)		(1,776,723,801	)			(460,437,709	)		(3,022,580,809	)
Issuance of common shares of Orchid Island Capital, Inc.			75,115,922			35,400,000				-			75,115,922
Cash dividends paid to noncontrolling interests			(7,378,350	)		(1,274,399	)			-			(7,378,350	)
Class A common shares sold directly to employees			98,000			-				-			98,000
NET CASH PROVIDED BY FINANCING ACTIVITIES			568,465,892			230,028,765
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES										(8,758,065	)		568,465,892

NET INCREASE IN CASH AND CASH EQUIVALENTS			25,203,251			2,056,670				2,310,013			25,203,251
CASH AND CASH EQUIVALENTS, beginning of the period			11,959,292			6,592,561				4,699,059			11,959,292
CASH AND CASH EQUIVALENTS, end of the period		$	37,162,543		$	8,649,231			$	7,009,072		$	37,162,543

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest		$	1,452,682		$	1,125,152			$	695,081		$	1,452,682
Income taxes		$	22,267		$	39,386			$	137,001		$	22,267

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITY:
Security acquired settled in later period		$	6,828,538		$	-
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES:
Securities acquired settled in later period									$	-		$	6,825,538
See Notes to Consolidated Financial Statements	See Notes to Consolidated Financial Statements							See Notes to Consolidated Financial Statements

4-4-

BIMINI CAPITAL MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

June 30, ~~2014~~2015

NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Organization and Business Description

Bimini Capital Management, Inc., a Maryland corporation (“Bimini Capital”), was formed in September 2003 for the purpose of creating and managing a leveraged investment portfolio consisting of residential mortgage-backed securities (“MBS”). Bimini Capital has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). As a REIT, Bimini Capital is generally not subject to federal income tax on its REIT taxable income provided that it distributes to its stockholders at least 90% of its REIT taxable income on an annual basis. In addition, a REIT must meet other provisions of the Code to retain its special tax status. Bimini Capital’s website is located at http://www.biminicapital.com.

As used in this document, discussions related to the “Company”, refer to the consolidated entity, including Bimini Capital, our wholly-owned subsidiaries, and our consolidated variable interest entity (“VIE”). References to “Bimini Capital” and the “parent” refer to Bimini Capital Management, Inc. as a separate entity.

On February 20, 2013, Orchid Island Capital, Inc. (“Orchid”) completed the initial public offering (“IPO”) of its common stock. Prior to the completion of its IPO, Orchid was a wholly-owned qualified REIT subsidiary of Bimini Capital. ~~During~~Since Orchid’s IPO and until December 31, 2014, Orchid ~~has completed additional offerings of its common stock, and through June 30,~~was consolidated as a variable interest entity (“VIE”). Effective December 31, 2014, Orchid ~~continues to be consolidated as our VIE.~~ was deconsolidated.

As used in this document, discussions related to REIT qualifying activities include the MBS portfolios of both Bimini Capital and ~~Orchid.~~

Orchid for 2014, and only the MBS portfolio of Bimini Capital for 2015. Discussions related to the “Company” refer to the consolidated entity, including Bimini Capital, our wholly-owned subsidiaries, and, through December 31, 2014, our VIE. References to “Bimini Capital” and the “parent” refer to Bimini Capital Management, Inc. as a separate entity. Discussions related to Bimini Capital’s taxable REIT subsidiaries or non-REIT eligible assets refer to Bimini Advisors, Inc. and its wholly-owned subsidiary, Bimini Advisors, LLC (together “Bimini Advisors”), and MortCo TRS, LLC ~~(“MortCo”)~~ and its consolidated ~~subsidiaries.~~subsidiaries (“MortCo”).

Consolidation

The accompanying consolidated financial statements include the accounts of Bimini Capital, ~~Orchid,~~ Bimini Advisors and ~~MortCo, as well as~~MortCo. The accounts of Orchid are included in the ~~wholly-owned subsidiaries~~consolidated statements of ~~MortCo.~~operations for the six and three months ended June 30, 2014, and in the statement of cash flows for the six months ended June 30, 2014. All inter-company accounts and transactions have been eliminated from the consolidated financial statements.

~~ASC~~Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) Topic 810, Consolidation ~~(“ASC 810”)~~, requires the consolidation of a VIE by an enterprise if it is deemed the primary beneficiary of the VIE. Further, ASC 810 requires a qualitative assessment to determine the primary beneficiary of a VIE, ~~and~~an ongoing ~~assessments~~assessment of whether an enterprise is the primary beneficiary of a VIE, ~~as well as~~and additional disclosures for entities that have variable interests in VIEs.

From the effective date of Orchid’s IPO and until December 31, 2014, management concluded, pursuant to ASC 810, that Orchid was a VIE. As a result, subsequent to Orchid’s IPO and until December 31, 2014, the Company consolidated Orchid in its financial statements. The results of operations of Orchid were included in the Company’s 2014 consolidated statements of operations and cash flows, however, net income attributable to Bimini Capital stockholders did not include the portion of net income attributable to noncontrolling interests.

5-5-

~~At the time of Orchid’s IPO and as of June 30,~~In December 2014, management ~~has concluded~~re-evaluated the conditions resulting in the consolidation of Orchid ~~is a VIE because Orchid's equity holders lack the ability through voting rights to make decisions about its activities that have a significant effect on the success of Orchid. Management has also~~and concluded that, ~~Bimini Capital is the primary beneficiary of~~due to Bimini’s decreased percentage ownership interest in Orchid, ~~because, under the management agreement between Bimini Advisors and Orchid, Bimini Capital has the power to direct the activities of Orchid that most significantly impact its economic performance.~~there was no longer a variable interest requiring consolidation. As a result, ~~subsequent to Orchid’s IPO and through June 30, 2014,~~in accordance with ASC 810, the Company ~~has continued to consolidate~~deconsolidated Orchid ~~in its Consolidated Financial Statements. While~~from the consolidated balance sheet as of December 31, 2014. However, as a VIE which was deconsolidated on December 31, 2014, Orchid’s results of operations ~~of Orchid are~~were included in the Company’s Consolidated Financial Statements, net loss attributable to Bimini Capital stockholders does not include the portion attributable to noncontrolling interests. Additionally, noncontrolling interestsconsolidated statements of operations and cash flows through December 31, 2014, and are excluded in ~~Orchid are recorded in our Consolidated Balance Sheets and our Consolidated Statement of Equity within the equity section but separate from the stockholders’ equity.~~subsequent periods.

Assets recognized as a result of consolidating Orchid doin prior periods did not represent additional assets that could be used to satisfy claims against Bimini Capital’s ~~assets.~~assts. Conversely, liabilities recognized as a result of consolidating Orchid dodid not represent additional claims on Bimini Capital’s assets; rather, they ~~represent~~represented claims against the assets of Orchid. Creditors and stockholders of Orchid have no recourse to the assets of Bimini Capital.

As further described in Note 7, Bimini Capital has a common share investment in a trust used in connection with the issuance of Bimini Capital’s junior subordinated notes. Pursuant to ASC 810, Bimini Capital’s common share investment in the trust has not been consolidated in the financial statements of Bimini Capital, and accordingly, this investment has been accounted for on the equity method.

Liquidity

~~Material~~In 2006 and 2007, there were significant losses incurred ~~by the Company in 2006 and 2007~~which were attributable to the former mortgage origination operations of ~~MortCo~~MortCo. These losses significantly reduced Bimini Capital’s equity capital base and the size of its MBS portfolio when compared to pre-2006 levels. ~~Litigation costs stemming from both the former operations of MortCo and Bimini Capital itself~~This caused the Company’s overhead to be high in relation to its portfolio size. The smaller capital base made it difficult to generate sufficient net interest income to cover expenses.

Beginning in 2007, the Company began a series of actions to respond to the losses and their impact on our capital ~~base, the Company took significant steps~~base. One of these actions was to ~~reduce the leverage in its balance sheet, reduce its debt service costs, reduce expenses, settle various litigation matters,~~evaluate and ~~alter its investment strategy for holding MBS securities. In addition, the Company evaluated and pursued~~pursue capital raising opportunities for Orchid. ~~After pursuing several efforts to raise capital at Orchid,~~ Orchid completed its initial public offering of common stock on February 20, 2013. Bimini Capital and Bimini Advisors acted as sponsor to Orchid by agreeing to fund all underwriting, legal and other costs of the offering, which totaled approximately $3.0 million during the year ended December 31, 2013. Orchid has no obligation or intent to reimburse Bimini Capital and Bimini Advisors, either directly or indirectly, for the offering costs; therefore, they were expensed in the Company’s consolidated statement of operations. As of March 31, 2014, Orchid reached $100 million of stockholders equity for the first time. As a result, inIn accordance with the management agreement between Bimini Advisors and Orchid, Bimini Advisors ~~will begin to allocate~~receives fees for managing the MBS portfolio of Orchid, and certain overhead costs are allocated to Orchid on a pro rata basis commencing on July 1, 2014. As a stockholder of Orchid, Bimini Capital will ~~continue to~~ share in distributions ~~if any,~~when paid by Orchid to its stockholders. These actions improved the Company’s liquidity outlook.

At June 30, ~~2014,~~2015, the Company had cash and cash equivalents of approximately ~~$37.2~~$7.0 million, an MBS portfolio of approximately ~~$951.6~~$107.8 million and an equity capital base of approximately ~~$119.7 million, including approximately $6.7 million attributable to the stockholders of Bimini Capital and $112.9 million attributable to noncontrolling interests.~~$6.4 million. The Company generated cash flows of approximately ~~$37.7~~$13.2 million from principal and interest payments on its MBS portfolio and approximately ~~$1.8~~$2.3 million from retained interests in securitizations during the six months ended June 30, ~~2014.~~2015. In addition, during the six months ended June 30, 2015, the Company received approximately $2.3 million in management fees and expense reimbursements as manager of Orchid and approximately $1.1 in dividends from its investment in Orchid common shares. However, if cash resources are, at any time, insufficient to satisfy the Company’s liquidity requirements, such as when cash ~~flow~~flows from operations are materially negative, the Company may be required to pledge additional assets to meet margin calls, liquidate assets, sell additional debt or equity securities or pursue other financing alternatives.

In May 2015, Bimini Capital agreed to settle a legal action as more fully described in Note 10. In connection with the settlement and in accordance with GAAP, a loss of $3.5 million has been charged to operations for the six months ended June 30, 2015. Although payments under the settlement agreement will reduce the Company’s liquidity, management believes that the Company will be able to generate sufficient cash from its operations to meet the payment obligations as they come due.

6-6-

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six and three month periods ended June 30, ~~2014~~2015 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2014.~~2015.

The consolidated balance sheet at December 31, ~~2013~~2014 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete consolidated financial statements. For further information, refer to the financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2013.~~2014.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates affecting the accompanying consolidated financial statements include the fair values of MBS, investment in Orchid common shares, Eurodollar futures contracts, interest rate ~~swaption,~~swaptions, retained interests, ~~and~~ asset valuation allowances and deferred tax allowances.

Statement of Comprehensive (Loss) Income ~~(Loss)~~

In accordance with ~~FASB~~ ASC Topic 220, Comprehensive Income, a statement of comprehensive (loss) income has not been included as the Company has no items of other comprehensive ~~income.~~income (loss). Comprehensive (loss) income ~~(loss)~~ is the same as net (loss) income ~~(loss)~~ for all periods presented.

Cash and Cash Equivalents and Restricted Cash

Cash and cash equivalents include cash on deposit with financial institutions and highly liquid investments with original maturities of three months or ~~less. Restricted~~less at the time of purchase. At June 30, 2015, restricted cash consisted of approximately ~~$3,992,000 and approximately $2,557,000 at June 30, 2014 and December 31, 2013, respectively, represents~~$0.5 million of cash held by a broker as margin on Eurodollar futures ~~contracts.~~contracts and $2.1 million of cash held on deposit as collateral with repurchase agreement counterparties. At December 31, 2014, restricted cash consisted of approximately $0.5 million of cash held by a broker as margin on Eurodollar futures contracts and $0.3 million of cash held on deposit as collateral with repurchase agreement counterparties.

The Company maintains cash balances at ~~three~~four banks, and, at times, balances may exceed federally insured limits. The Company has not experienced any losses related to these balances. The Federal Deposit Insurance Corporation insures eligible accounts up to $250,000 per depositor at each financial institution. At June 30, ~~2014,~~2015, the Company’s cash deposits exceeded federally insured limits by approximately ~~$36.1~~$6.0 million. Restricted cash balances are uninsured, but are held in separate customer accounts that are segregated from the general funds of the counterparty. The Company ~~uses~~limits uninsured balances to only large, well-known ~~bank~~banks and derivative counterparties and believes that it is not exposed to significant credit risk on cash and cash equivalents or restricted cash balances.

7-7-

Mortgage-Backed Securities

The Company invests primarily in mortgage pass-through (“PT”) certificates, collateralized mortgage obligations, and interest-only (“IO”) securities and inverse interest-only (“IIO”) securities representing interest in or obligations backed by pools of mortgage-backed loans (collectively, “MBS”). ~~These investments meet the requirements to be classified as available for sale under ASC 320-10-25,~~ ~~Debt and Equity Securities~~ ~~(which requires the securities to be carried at fair value on the balance sheet with changes in fair value charged to other comprehensive income, a component of stockholders’ equity). However, the~~The Company has elected to account for its investment in MBS under the fair value option. Electing the fair value option requires the Company to record changes in fair value in the consolidated statement of operations, which, in management’s view, more appropriately reflects the results of our operations for a particular reporting period and is consistent with the underlying economics and how the portfolio is managed.

The Company records MBS transactions on the trade date. Security purchases that have not settled as of the balance sheet date are included in the MBS balance with an offsetting liability recorded, whereas securities sold that have not settled as of the balance sheet date are removed from the MBS balance with an offsetting receivable recorded.

The fair value of the Company’s investment in MBS is governed by ~~FASB~~ ASC Topic 820, Fair Value Measurement. The definition of fair value in ~~FASB~~ ASC Topic 820 focuses on the price that would be received to sell the asset or paid to transfer the liability in an orderly transaction between market participants at the measurement date. The fair value measurement assumes that the transaction to sell the asset or transfer the liability either occurs in the principal market for the asset or liability, or in the absence of a principal market, occurs in the most advantageous market for the asset or liability. Estimated fair values for MBS are based on ~~the average of~~independent pricing sources and/or third-party broker quotes, ~~received and/or independent pricing sources~~ when available.

Income on PT MBS is based on the stated interest rate of the security. Premiums or discounts present at the date of purchase are not amortized. Premium lost and discount accretion resulting from monthly principal repayments are reflected in unrealized gains (losses) on MBS in the consolidated statements of operations. For IO securities, the income is accrued based on the carrying value and the effective yield. The difference between income accrued and the interest received on the security is characterized as a return of investment and serves to reduce the asset’s carrying value. At each reporting date, the effective yield is adjusted prospectively from the reporting period based on the new estimate of prepayments and the contractual terms of the security. For IIO securities, effective yield and income recognition calculations also take into account the index value applicable to the security. Changes in fair value of MBS during each reporting period are recorded in earnings and reported as unrealized gains or losses on mortgage-backed securities in the accompanying consolidated statements of operations. The amount reported as unrealized gains or losses on mortgage backed securities thus captures the net effect of changes in the fair market value of securities caused by market developments and any premium or discount lost as a result of principal repayments during the period.

Orchid Island Capital, Inc. Common Stock

At the date of Orchid’s deconsolidation, the Company elected the fair value option for its continuing investment in Orchid common shares. The change in the fair value of this investment and dividends received on this investment are reflected in other income in the consolidated statements of operations for the six and three months ended June 30, 2015. We estimate the fair value of our investment in Orchid on a market approach using “Level 1” inputs based on the quoted market price of Orchid’s common stock. Electing the fair value option requires the Company to record changes in fair value in the consolidated statements of operations, which, in management’s view, more appropriately reflects the results of our operations for a particular reporting period and is consistent with how the investment is managed.

Retained Interests in Securitizations

From 2004 to 2006, MortCo participated in securitization transactions as part of its mortgage origination business. Retained interests in the securitization transactions were initially recorded at their fair value when issued by MortCo. Subsequent adjustments to fair value are reflected in earnings. Quoted market prices for these assets are generally not available, so the Company estimates fair value based on the present value of expected future cash flows using management’s best estimates of key assumptions, which include expected credit losses, prepayment speeds, weighted-average life, and discount rates commensurate with the inherent risks of the asset.

-8-

Derivative Financial Instruments

The Company uses derivative instruments to manage interest rate risk, facilitate asset/liability strategies and manage other exposures, and it may continue to do so in the future. The principal instruments that the Company has used to date are Eurodollar futures contracts and options to enter in interest rate swaps (“interest rate swaptions”), but it may enter into other transactions in the future.

The Company has elected to not treat any of its derivative financial instruments as ~~hedges.~~hedges in order to align the accounting treatment of its derivative instruments with the treatment of its portfolio assets under the fair value option. FASB ASC Topic 815, Derivatives and Hedging, requires that all derivative instruments be carried at fair value. Changes in fair value are recorded in earnings for each period.

Holding derivatives creates exposure to credit risk related to the potential for failure on the part of counterparties to honor their commitments. In addition, the Company may be required to post collateral based on any declines in the market value of the derivatives. In the event of default by a counterparty, the Company may have difficulty recovering its collateral and may not receive payments provided for under the terms of the agreement. To mitigate this risk, the Company uses well-established commercial banks as counterparties.

Financial Instruments

~~FASB~~ ASC Topic 825, Financial Instruments, requires disclosure of the fair value of financial instruments for which it is practicable to estimate that value, either in the body of the financial statements or in the accompanying notes. MBS, Orchid Island Capital, Inc. common stock, Eurodollar futures contracts, interest rate swaptions and retained interests in securitization transactions ~~and mortgage loans held for sale~~ are accounted for at fair value in the consolidated balance sheets. The methods and assumptions used to estimate fair value for these instruments are presented in Note 13 of the consolidated financial statements.

The estimated fair value of cash and cash equivalents, restricted cash, accrued interest receivable, other assets, repurchase agreements, ~~payable for unsettled securities purchased,~~ accrued interest payable and other liabilities generally approximates their carrying value as of June 30, ~~2014~~2015 and December 31, ~~2013,~~2014, due to the short-term nature of these financial instruments.

It is impractical to estimate the fair value of the Company’s junior subordinated notes. Currently, there is a limited market for these types of instruments and the Company is unable to ascertain what interest rates would be available to the Company for similar financial instruments. Information regarding carrying amount, effective interest rate and maturity date for these instruments is presented in Note 7 to the consolidated financial statements.

Property and Equipment, net

Property and equipment, net, consists of computer equipment with a depreciable life of 3 years, office furniture and equipment with depreciable lives of 8 to 20 years, land which has no depreciable life, and buildings and improvements with depreciable lives of 30 years. Property and equipment is recorded at acquisition cost and depreciated using the straight-line method over the estimated useful lives of the assets.

Repurchase Agreements

The Company finances the acquisition of the majority of its PT MBS through the use of repurchase agreements under master repurchase agreements. Pursuant to ASC Topic 860, Transfers and Servicing, the Company accounts for repurchase transactions as collateralized financing transactions, which are carried at their contractual amounts, including accrued interest, as specified in the respective agreements.

-9-

Share-Based Compensation

The Company follows the provisions of ~~FASB~~ ASC ~~topic~~Topic 718, Compensation – Stock Compensation, to account for stock and stock-based awards. For stock and stock-based awards issued to employees, a compensation charge is recorded against earnings over the vesting period based on the fair value of the award. Payments pursuant to dividend equivalent rights, which are granted along with certain equity based awards, are charged to stockholders’ equity when dividends are declared. The Company applies a zero forfeiture rate for its equity based awards, as such awards have been granted to a limited number of employees and historical forfeitures have been minimal. A significant forfeiture, or an indication that significant forfeitures may occur, would result in a revised forfeiture rate which would be accounted for prospectively as a change in an estimate. For transactions with non-employees in which services are performed in exchange for the Company’s common stock or other equity instruments, the transactions are recorded on the basis of the fair value of the service received or the fair value of the equity instruments issued, whichever is more readily measurable at the date of issuance.

Earnings Per Share

The Company follows the provisions of ~~FASB~~ ASC Topic 260, Earnings Per Share, which requires companies with complex capital structures, common stock equivalents or two (or more) classes of securities that participate in dividend distributions to present both basic and diluted earnings per share (“EPS”) on the face of the consolidated statement of operations. Basic EPS is calculated as income available to common stockholders divided by the weighted average number of common shares outstanding during the period. Diluted EPS is calculated using the ~~“if converted”~~treasury stock or two-class method, as applicable for common stock equivalents. However, the common stock equivalents are not included in computing diluted EPS if the result is anti-dilutive.

Outstanding shares of Class B Common Stock, participating and convertible into Class A Common Stock, are entitled to receive dividends in an amount equal to the dividends declared on each share of Class A Common Stock if, as and when authorized and declared by the Board of Directors. Accordingly, shares of the Class B Common Stock are included in the computation of basic EPS using the two-class method and, consequently, are presented separately from Class A Common Stock.

The shares of Class C Common Stock are not included in the basic EPS computation as these shares do not have participation rights. The outstanding shares of Class B and Class C Common Stock are not included in the computation of diluted EPS for the Class A Common Stock as the conditions for conversion into shares of Class A Common Stock were not met.

Income Taxes

Bimini Capital has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”), and Orchid, until the closing of its IPO on February 20, 2013, was a “qualified REIT subsidiary” of Bimini Capital under the Code. Beginning with its short tax period commencing on February 20, 2013 and ending December 31, 2013, Orchid has qualified and elected to be taxed as a REIT, and filed a REIT tax return separate from Bimini Capital.. REITs are generally not subject to federal income tax on their REIT taxable income provided that they distribute to their stockholders at least 90% of their REIT taxable income on an annual basis. In addition, a REIT must meet other provisions of the Code to retain its tax status. At June 30, ~~2014,~~2015, management believes that the Company has complied with the Code requirements and Bimini Capital continues to qualify as a REIT. As further described in Note 11, Income Taxes, Bimini Advisors and MortCo are taxpaying entities for income tax purposes and are taxed separately from Bimini ~~Capital and Orchid.~~

Capital.

The Company’s U.S. federal income tax returns for years ended on or after December 31, ~~2010~~2011 remain open for examination. Although management believes its calculations for tax returns are correct and the positions taken thereon are reasonable, the final outcome of tax audits could be materially different from the tax returns filed by the Company, and those differences could result in significant costs or benefits to the Company.

The Company measures, recognizes and presents its uncertain tax positions in accordance with ~~FASB~~ ASC Topic 740, Income Taxes. Under that guidance, the Company assesses the likelihood, based on their technical merit, that tax positions will be sustained upon examination based on the facts, circumstances and information available at the end of each period. The measurement of uncertain tax positions is adjusted when new information is available, or when an event occurs that requires a change.

~~Reclassifications~~

~~Certain prior period amounts have been reclassified to conform to the current period presentations.~~

10-10-

Recent Accounting Pronouncements

In June 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-12, Compensation-Stock Compensation: Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. ASU 2014-12 requires that performance targets that affect vesting and that could be achieved after the requisite service period be treated as performance conditions. The effective date of ASU 2014-12 is for interim and annual reporting periods beginning after December 15, 2015. The ASU is not expected to materially impact the Company’s consolidated financial statements.

In June 2014, the FASB issued ASU 2014-11, Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures. ASU 2014-11 amends the accounting guidance for repurchase-to-maturity transactions and repurchase agreements executed as repurchase financings, and requires additional disclosure about certain transactions by the transferor. ASU 2014-11 is effective for certain transactions that qualify for sales treatment for the first interim or annual period beginning after December 15, 2014. The new disclosure requirements for repurchase agreements, securities lending transactions and repurchase-to-maturity transactions that qualify for secured borrowing treatment is effective for annual periods beginning after December 15, 2014 and for interim periods beginning after March 15, 2015. ~~We currently record our repurchase arrangements as secured borrowings and do not anticipate that ASU 2014-11 will have a material impact on the Company’s consolidated financial statements.~~

~~In July 2013, the FASB issued ASU 2013-11,~~ ~~Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists~~. This new standard requires the netting of unrecognized tax benefits against a deferred tax asset for a loss or other carryforward that would apply in settlement of the uncertain tax positions. Under the new standard, unrecognized tax benefits will be netted against all available same-jurisdiction loss or other tax carryforwards that would be utilized, rather than only against carryforwards that are created by the unrecognized tax benefits. The ASU is effective beginning January 1, 2014 on either a prospective or retrospective basis. The guidance represents a change in financial statement presentation only and the adoption of this ASU did not have a material impact on the Company’s consolidated financial results.

~~In June 2013, the FASB issued ASU 2013-08,~~ ~~Financial Services – Investment Companies (Topic 946): Amendments to the Scope, Measurement, and Disclosure Requirements~~. The amendments in this Update modify the guidance for determining whether an entity is an investment company, update the measurement requirements for noncontrolling interests in other investment companies and require additional disclosures for investment companies under US GAAP. The amendments in the Update develop a two-tiered approach for the assessment of whether an entity is an investment company which requires an entity to possess certain fundamental characteristics while allowing judgment in assessing other typical characteristics. The amendments in this Update also revise the measurement guidance in Topic 946 such that investment companies must measure noncontrolling ownership interests in other investment companies at fair value, rather than applying the equity method of accounting to such interests. The new guidance became effective beginning January 1, 2014. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.

~~In February 2013, the FASB issued ASU 2013-04,~~ ~~Liabilities (Topic 405) - Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date ("ASU 2013-04")~~. The objective of this ASU is to provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date, except for obligations addressed within existing US GAAP. The amendments in ASU 2013-04 became effective for fiscal years, and interim periods within those years, beginning after December 15, 2013, and should be retrospectively applied to all prior periods presented for those obligations resulting from joint and several liability arrangements within the ASU's scope that exist at the beginning of an entity's fiscal year of adoption. The adoption of this ASU had no impact on the Company’s consolidated financial statements.

NOTE 2. MORTGAGE-BACKED SECURITIES

The following table presents the Company’s MBS portfolio as of June 30, ~~2014~~2015 and December 31, ~~2013:~~2014:

(in thousands)
	June 30, 2014		December 31, 2013		June 30, 2015		December 31, 2014
Pass-Through MBS:
Hybrid Adjustable-rate Mortgages	$	75,734	$	90,487	$	121	$	442
Adjustable-rate Mortgages		4,650		5,334
Fixed-rate Mortgages		820,831		267,481		101,160		112,174
Total Pass-Through MBS		901,215		363,302		101,281		112,616
Structured MBS:
Interest-Only Securities		39,608		20,443		3,345		2,276
Inverse Interest-Only Securities		10,818		5,596		3,135		2,939
Total Structured MBS		50,426		26,039		6,480		5,215
Total	$	951,641	$	389,341	$	107,761	$	117,831

~~Included in the table above at June 30, 2014 are $876.0 million of MBS assets that may only be used to settle liabilities of the consolidated VIE.~~

The following table summarizes the Company’s MBS portfolio as of June 30, ~~2014~~2015 and December 31, ~~2013,~~2014, according to the contractual maturities of the securities in the portfolio. Actual maturities of MBS investments are generally shorter than stated contractual maturities and are affected by the contractual lives of the underlying mortgages, periodic payments of principal, and prepayments of principal.

(in thousands)
	June 30, 2014		December 31, 2013		June 30, 2015			December 31, 2014
Less than one year	$	16	$	46
Greater than five years and less than ten years		1,134		1,520		$	10		$	16
Greater than or equal to ten years		950,491		387,775			107,751			117,815
Total	$	951,641	$	389,341		$	107,761		$	117,831

The Company generally pledges its MBS assets as collateral under repurchase agreements. At June 30, 2014 and December 31, 2013, the Company had unpledged securities totaling $44.0 million and $17.2 million, respectively. The unpledged balance at June 30, 2014 includes an unsettled security purchase with a fair value of approximately $6.8 million that will be pledged as collateral under a repurchase agreement on its respective settlement date in July 2014.

-11-

NOTE 3. RETAINED INTERESTS IN SECURITIZATIONS

The following table summarizes the estimated fair value of the Company’s retained interests in asset backed securities as of June 30, ~~2014~~2015 and December 31, ~~2013:~~2014:

(in thousands)
Series	Issue Date	June 30, 2014		December 31, 2013		Issue Date	June 30, 2015		December 31, 2014
HMAC 2004-1	March 4, 2004	$	19	$	-
HMAC 2004-2	May 10, 2004		589		-	May 10, 2004	$	216	$	320
HMAC 2004-3	June 30, 2004		977		1,518	June 30, 2004		694		753
HMAC 2004-4	August 16, 2004		1,192		654	August 16, 2004		368		496
HMAC 2004-5	September 28, 2004		358		359	September 28, 2004		386		331
HMAC 2004-6						November 17, 2004		477		-
Total		$	3,135	$	2,531		$	2,141	$	1,900

NOTE 4. REPURCHASE AGREEMENTS

As of June 30, ~~2014,~~2015, the Company had outstanding repurchase agreement obligations of approximately $854.0 million with a net weighted average borrowing rate of 0.35%. These agreements were collateralized by MBS with a fair value, including accrued interest, of approximately $911.1 million. As of December 31, 2013, the Company had outstanding repurchase agreement obligations of approximately $353.4$101.2 million with a net weighted average borrowing rate of 0.39%. These agreements were collateralized by MBS with a fair value, including accrued interest, of approximately ~~$373.4~~$106.2 million, and cash pledged to counterparties of approximately $2.1 million. As of December 31, 2014, the Company had outstanding repurchase agreement obligations of approximately $110.0 million with a net weighted average borrowing rate of 0.36%. These agreements were collateralized by MBS with a fair value, including accrued interest, of approximately $116.4 million, and cash pledged to counterparties of approximately $0.3 million.

As of June 30, ~~2014~~2015 and December 31, ~~2013,~~2014, the Company’s repurchase agreements had remaining maturities as summarized below:

($ in thousands)
	OVERNIGHT		BETWEEN 2			BETWEEN 31			GREATER						OVERNIGHT		BETWEEN 2			BETWEEN 31			GREATER
	(1 DAY OR		AND			AND			THAN						(1 DAY OR		AND			AND			THAN
	LESS)		30 DAYS			90 DAYS			90 DAYS			TOTAL			LESS)		30 DAYS			90 DAYS			90 DAYS		TOTAL
June 30, 2014
June 30, 2015
Fair value of securities pledged, including accrued
interest receivable	$	-	$	643,035		$	262,977		$	5,052		$	911,064		$	-	$	87,826		$	18,377		$	-	$	106,203
Repurchase agreement liabilities associated with
these securities	$	-	$	605,018		$	244,279		$	4,729		$	854,026		$	-	$	84,939		$	16,267		$	-	$	101,206
Net weighted average borrowing rate		-		0.35	%		0.34	%		0.38	%		0.35	%		-		0.38	%		0.43	%		-		0.39	%
December 31, 2013
December 31, 2014
Fair value of securities pledged, including accrued
interest receivable	$	-	$	357,338		$	16,081		$	-		$	373,419		$	-	$	114,433		$	1,998		$	-	$	116,431
Repurchase agreement liabilities associated with
these securities	$	-	$	337,977		$	15,419		$	-		$	353,396		$	-	$	108,074		$	1,890		$	-	$	109,964
Net weighted average borrowing rate		-		0.39	%		0.37	%		-			0.39	%		-		0.36	%		0.33	%		-		0.36	%

-12-

~~As of June 30, 2014, the outstanding repurchase obligations of the consolidated VIE included in the table above was $783.7 million.~~

If, during the term of a repurchase agreement, a lender files for bankruptcy, the Company might experience difficulty recovering its pledged assets, which could result in an unsecured claim against the lender for the difference between the amount loaned to the Company plus interest due to the counterparty and the fair value of the collateral pledged to such lender, including the accrued interest receivable, and cash posted by the Company as collateral, if any. At June 30, ~~2014~~2015 and December 31, ~~2013,~~2014, the Company had ~~a maximum~~an aggregate amount at risk (the difference between the amount loaned to the Company, including interest payable, and the fair value of securities and cash pledged (if any), including accrued interest on such securities) with all counterparties of approximately ~~$56.7~~$7.0 million and $19.9 million, respectively. At June 30, 2014, the Company did not have an amount at risk with any repurchase agreement counterparty greater than 10% of the Company’s equity. Summary information regarding amounts at risk with individual counterparties greater than ~~10% of equity at December 31, 2013 is as follows:~~

($ in thousands)
% of Weighted
Stockholders' Average
Amount Equity Maturity
Repurchase Agreement Counterparties at Risk at Risk (in Days)
December 31, 2013
Citigroup Global Markets, Inc. $5,487 16.4% 11

At June 30, 2014 and December 31, 2013, Bimini Capital had a maximum amount at risk (the difference between the amount loaned to Bimini Capital, including interest payable, and the fair value of securities and cash pledged (if any), including accrued interest on such securities) of approximately $4.2 million and $1.6$6.7 million, respectively. Summary information regarding amounts at risk with individual counterparties greater than 10% of stockholders’ equity ~~attributable to Bimini Capital~~ at June 30, ~~2014~~2015 and December 31, ~~2013~~2014 is as follows:

($ in thousands)
			% of			Weighted				% of			Weighted
			Stockholders'			Average				Stockholders'			Average
	Amount		Equity			Maturity		Amount		Equity			Maturity
Repurchase Agreement Counterparties	at Risk		at Risk			(in Days)		at Risk		at Risk			(in Days)
June 30, 2014
June 30, 2015
Citigroup Global Markets, Inc.								$	2,532		39.8	%		14
JVB Financial Group, LLC									1,517		23.9	%		10
ED&F Man Capital Markets Inc.	$	1,520		22.5	%		65		1,465		23.0	%		33
South Street Securities, LLC									812		12.8	%		20
CRT Capital Group, LLC									685		10.8	%		15
December 31, 2014
JVB Financial Group, LLC		788		11.7	%		11	$	1,807		19.6	%		8
Suntrust Robinson Humphrey, Inc.		776		11.5	%		28
December 31, 2013
Suntrust Robinson Humphrey, Inc.	$	715		41.0	%		3
JVB Financial Group, LLC		559		32.1	%		21
ED&F Man Capital Markets Inc.									1,490		16.2	%		22

NOTE 5. DERIVATIVE FINANCIAL INSTRUMENTS

In connection with its interest rate risk management strategy, the Company economically hedges a portion of the cost of its repurchase agreement funding and junior subordinated notes by entering into derivatives, such as Eurodollar futures contracts and an interest rate ~~swaption.~~swaptions, but may enter into other contracts in the future. The Company has not elected hedging treatment under GAAP, and as such all gains or losses (realized and unrealized) on these instruments are reflected in earnings for all periods presented.

As of June 30, 2015 and December 31, ~~2013,~~2014, such instruments were comprised entirely of Eurodollar futures contracts. Eurodollar futures are cash settled futures contracts on an interest rate, with gains or losses credited or charged to the Company’s account on a daily basis and reflected in earnings as they occur. A minimum balance, or “margin”, is required to be maintained in the account on a daily basis. The Company is exposed to the changes in value of the futures by the amount of margin held by the broker. This margin represents the collateral the Company has posted for its open positions and is recorded on the consolidated balance ~~sheet~~sheets as part of restricted cash.

During the six months ended June 30, 2014, the Company, through Orchid, was a party to interest rate swaption ~~agreements. At June 30, 2014, the Company had one outstanding swaption agreement~~agreements which ~~grants~~granted the Company the right but not the obligation to enter into an underlying pay fixed interest rate swap (“payer swaption”). The Company may also enter into swaption agreements that provide the Company the option to enter into a receive fixed interest rate swap (“receiver swaption”).

~~Derivative Assets (Liability), at Fair Value~~

~~The table below summarizes fair value information about our derivative assets and liability as of June 30, 2014 and December 31, 2013.~~

(in thousands)
Derivative Instruments and Related Accounts Balance Sheet Location June 30, 2014 December 31, 2013
Assets
Eurodollar futures - Margin posted to counterparty Restricted cash $ 3,992 $ 2,557
Payer swaption Derivative assets, at fair value 1,200 -
$ 5,192 $ 2,557
Liability
Payer swaption - Margin posted by counterparty Other liabilities $ (1,266 ) $ -

14-13-

The tables below present information related to the Company’s Eurodollar futures positions at June 30, ~~2014~~2015 and December 31, ~~2013.~~2014.

($ in thousands)
As of June 30, 2015
	Repurchase Agreement Funding Hedges
	Average		Weighted			Weighted
	Contract		Average			Average
	Notional		Entry			Effective			Open
Expiration Year	Amount		Rate			Rate			Equity(1)
2015	$	43,000		0.79	%		0.48	%	$	(67	)
2016		56,000		1.45	%		1.04	%		(231	)
2017		56,000		2.23	%		1.81	%		(239	)
2018		56,000		2.65	%		2.23	%		(118	)
Total / Weighted Average	$	53,833		1.84	%		1.44	%	$	(655	)

($ in thousands)
Eurodollar Futures Positions (Consolidated)
As of June 30, 2014
As of June 30, 2015
	Repurchase Agreement Funding Hedges								Junior Subordinated Debt Funding Hedges								Junior Subordinated Debt Funding Hedges
	Weighted			Average					Weighted			Average					Average		Weighted			Weighted
	Average			Contract					Average			Contract					Contract		Average			Average
	LIBOR			Notional		Open			LIBOR			Notional		Open			Notional		Entry			Effective			Open
Expiration Year	Rate			Amount		Equity(1)			Rate			Amount		Equity(1)			Amount		Rate			Rate			Equity(1)
2015		0.65	%	$	580,000	$	(795	)		0.63	%	$	26,000	$	(222	)	$	26,000		1.65	%		0.45	%	$	(156	)
2016		1.54	%		586,500		150			1.58	%		26,000		(50	)		26,000		1.77	%		1.04	%		(189	)
2017		2.46	%		430,000		192			2.46	%		26,000		(7	)		26,000		2.49	%		1.81	%		(177	)
2018		2.97	%		420,000		(457	)		2.92	%		26,000		(3	)		26,000		2.94	%		2.23	%		(93	)
Total / Weighted Average		1.71	%	$	509,733	$	(910	)		1.75	%	$	26,000	$	(282	)	$	26,000		2.18	%		1.39	%	$	(615	)

($ in thousands)
Eurodollar Futures Positions (Consolidated)
As of December 31, 2013
Repurchase Agreement Funding Hedges Junior Subordinated Debt Funding Hedges
Weighted Average Weighted Average
Average Contract Average Contract
LIBOR Notional Open LIBOR Notional Open
Expiration Year Rate Amount
Equity(1)
Rate Amount
Equity(1)

2014 0.40 % $ 262,500 $ (189 ) 0.35 % $ 26,000 $ (428 )
2015 0.80 % 275,000 (146 ) 0.80 % 26,000 (176 )
2016 1.90 % 250,000 1,367 1.74 % 26,000 9
2017 3.03 % 250,000 2,291 - - -
2018 3.77 % 250,000 1,575 - - -
Total / Weighted Average 2.02 % $ 257,353 $ 4,898 0.89 % $ 26,000 $ (595 )

~~The tables below present information related solely to Bimini Capital’s Eurodollar futures positions at June 30, 2014 and December 31, 2013~~.

($ in thousands)
Eurodollar Futures Positions (Parent-Only)
	Repurchase Agreement Funding Hedges
As of December 31, 2014
	June 30, 2014								December 31, 2013						Repurchase Agreement Funding Hedges
	Weighted			Average					Weighted		Average				Average		Weighted			Weighted
	Average			Contract					Average		Contract				Contract		Average			Average
	LIBOR			Notional		Open			LIBOR		Notional		Open		Notional		Entry			Effective			Open
Expiration Year	Rate			Amount		Equity			Rate		Amount		Equity(1)		Amount		Rate			Rate			Equity(1)
2015		0.63	%	$	30,000	$	(5	)		-	$	-	$	-	$	36,500		0.65	%		0.63	%	$	(5	)
2016		1.60	%		36,500		(9	)		-		-		-		56,000		1.45	%		1.54	%		46
2017		2.46	%		30,000		(10	)		-		-		-		56,000		2.23	%		2.23	%		(3	)
2018		2.92	%		30,000		(5	)		-		-		-		56,000		2.65	%		2.51	%		(38	)
Total / Weighted Average		1.75	%	$	31,857	$	(29	)		-	$	-	$	-	$	50,429		1.72	%		1.72	%	$	-

15-14-

($ in thousands)
Eurodollar Futures Positions (Parent-Only)
	Junior Subordinated Debt Funding Hedges
As of December 31, 2014
	June 30, 2014								December 31, 2013								Junior Subordinated Debt Funding Hedges
	Weighted			Average					Weighted			Average					Average		Weighted			Weighted
	Average			Contract					Average			Contract					Contract		Average			Average
	LIBOR			Notional		Open			LIBOR			Notional		Open			Notional		Entry			Effective			Open
Expiration Year	Rate			Amount		Equity			Rate			Amount		Equity(1)			Amount		Rate			Rate			Equity(1)
2014		-		$	-	$	-			0.35	%	$	26,000	$	(428	)
2015		0.63	%		26,000		(222	)		0.80	%		26,000		(176	)	$	26,000		1.48	%		0.57	%	$	(237	)
2016		1.58	%		26,000		(50	)		1.74	%		26,000		9			26,000		1.77	%		1.54	%		(61	)
2017		2.46	%		26,000		(7	)		-			-		-			26,000		2.49	%		2.23	%		(67	)
2018		2.92	%		26,000		(3	)		-			-		-			26,000		2.94	%		2.51	%		(56	)
Total / Weighted Average		1.75	%	$	26,000	$	(282	)		0.89	%	$	26,000	$	(595	)	$	26,000		2.06	%		1.60	%	$	(421	)

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

~~The table below presents information related to the Company’s interest rate swaption position at June 30, 2014.~~

($ in thousands)
Option Underlying Swap
Fixed Receive
Fair Months to Notional Pay Rate Term
Expiration Cost Value Expiration Amount Rate (LIBOR) (Years)
≤ 1 year $1,520 $1,200 11.5 $100,000 2.38% 3 Month 5

~~Gain (Loss)~~Loss (Gain) From Derivative Instruments, Net

The ~~tables~~table below ~~present~~presents the effect of the Company’s derivative financial instruments on the consolidated statements of operations for the six and three months ended June 30, 2015 and 2014. The consolidated information for 2014 ~~and 2013.~~includes the activity of Orchid, as it was included in the consolidated statements of operations for those periods.

(in thousands)
	Consolidated					Parent-Only					Consolidated						Parent-Only
Six Months Ended June 30,	2014			2013		2014			2013		2015			2014			2015			2014
Eurodollar futures contracts (short positions)	$	(6,306	)	$	6,596	$	(170	)	$	228	$	(1,009	)	$	(6,306	)	$	(1,009	)	$	(170	)
Payer swaptions		(1,285	)		-		-			-		-			(1,285	)		-			-
	$	(7,591	)	$	6,596	$	(170	)	$	228
Net losses on derivative instruments											$	(1,009	)	$	(7,591	)	$	(1,009	)	$	(170	)

(in thousands)
	Consolidated					Parent-Only					Consolidated					Parent-Only
Three Months Ended June 30,	2014			2013		2014			2013		2015		2014			2015		2014
Eurodollar futures contracts (short positions)	$	(4,745	)	$	7,071	$	(146	)	$	220	$	6	$	(4,745	)	$	6	$	(146	)
Payer swaptions		(1,129	)		-		-			-		-		(1,129	)		-		-
	$	(5,874	)	$	7,071	$	(146	)	$	220
Net gains (losses) on derivative instruments											$	6	$	(5,874	)	$	6	$	(146	)

Credit Risk-Related Contingent Features

The use of derivatives creates exposure to credit risk relating to potential losses that could be recognized in the event that the counterparties to these instruments fail to perform their obligations under the contracts. We attempt to minimize this risk by limiting our counterparties for instruments which are not centrally cleared on a registered exchange to major financial institutions with acceptable credit ratings and monitoring positions with individual counterparties. In addition, we may be required to pledge assets as collateral for our derivatives, whose amounts vary over time based on the market value, notional amount and remaining term of the derivative contract. In the event of a default by a counterparty, we may not receive payments provided for under the terms of our derivative agreements, and may have difficulty obtaining our assets pledged as collateral for our derivatives. The cash and cash equivalents pledged as collateral for our derivative instruments are included in restricted cash on our consolidated balance sheets.

-15-

NOTE 6. OFFSETTING ASSETS AND LIABILITIES

The Company’s derivatives and repurchase agreements are subject to underlying agreements with master netting or similar arrangements, which provide for the right of offset in the event of default or in the event of bankruptcy of either party to the transactions. The Company reports its assets and liabilities subject to these arrangements on a gross basis.

The following ~~tables present~~table presents information regarding those assets and liabilities subject to such arrangements as if the Company had presented them on a net basis as of June 30, ~~2014~~2015 and December 31, ~~2013.~~2014.

(in thousands)
Offsetting of Assets
Gross Amount Not Offset
in the Balance Sheet
Net Amount Financial
Gross Amount Gross Amount of Assets Instruments Cash
of Recognized Offset in the Presented in the Received as Received as Net
Assets Balance Sheet Balance Sheet Collateral Collateral Amount
June 30, 2014
Derivative asset - Payer swaption $ 1,200 $ - $ 1,200 $ - $ (1,200 ) $ -
December 31, 2013
Derivative asset $ - $ - $ - $ - $ - $ -

(in thousands)
Offsetting of Liabilities	Offsetting of Liabilities																			Offsetting of Liabilities
										Gross Amount Not Offset																			Gross Amount Not Offset in the
										in the Balance Sheet																Net Amount			Consolidated Balance Sheet
							Net Amount			Financial													Gross Amount			of Liabilities			Financial
	Gross Amount			Gross Amount			of Liabilities			Instruments										Gross Amount			Offset in the			Presented in the			Instruments				Cash
	of Recognized			Offset in the			Presented in the			Posted as				Cash Posted			Net			of Recognized			Consolidated			Consolidated			Posted as				Posted as				Net
	Liabilities			Balance Sheet			Balance Sheet			Collateral				Collateral			Amount			Liabilities			Balance Sheet			Balance Sheet			Collateral				Collateral				Amount
June 30, 2014
June 30, 2015
Repurchase Agreements		$	854,026		$	-		$	854,026		$	(854,026	)		$	-		$	-		$	101,206		$	-		$	101,206		$	(99,146	)		$	(2,060	)		$	-
December 31, 2013
December 31, 2014
Repurchase Agreements		$	353,396		$	-		$	353,396		$	(353,396	)		$	-		$	-		$	109,964		$	-		$	109,964		$	(109,706	)		$	(258	)		$	-

The amounts disclosed for collateral received by or posted to the same counterparty are limited to the amount sufficient to reduce the asset or liability presented in the consolidated balance sheet to zero in accordance with ASU No. 2011-11, as amended by ASU No. 2013-01. The fair value of the actual collateral received by or posted to the same counterparty typically exceeds the amounts presented. See Notes 4 and 5 for a discussion of collateral posted for, or received against, ~~or for~~ repurchase obligations and derivative instruments.

NOTE 7. TRUST PREFERRED SECURITIES

During 2005, Bimini Capital sponsored the formation of a statutory trust, known as Bimini Capital Trust II (“BCTII”) of which 100% of the common equity is owned by Bimini Capital. It was formed for the purpose of issuing trust preferred capital securities to third-party investors and investing the proceeds from the sale of such capital securities solely in junior subordinated debt securities of Bimini Capital. The debt securities held by BCTII are the sole assets of BCTII.

As of June 30, ~~2014~~2015 and December 31, ~~2013,~~2014, the outstanding principal balance on the junior subordinated debt securities owed to BCTII was $26.8 million. The BCTII trust preferred securities and Bimini Capital's BCTII Junior Subordinated Notes have a rate of interest that floats at a spread of 3.50% over the prevailing three-month LIBOR rate. As of June 30, ~~2014,~~2015, the interest rate was ~~3.73%~~3.79%. The BCTII trust preferred securities and Bimini Capital's BCTII Junior Subordinated Notes require quarterly interest distributions and ~~are~~became redeemable at Bimini Capital's option, in whole or in part and without penalty, beginning December 15, 2010. Bimini Capital's BCTII Junior Subordinated Notes are subordinate and junior in right of payment of all present and future senior indebtedness.

~~The trust~~BCTII is a VIE because the holders of the equity investment at risk do not have adequate decision making ability over ~~the trust's~~BCTII’s activities. Since Bimini Capital's investment in ~~the trust's~~BCTII’s common equity securities was financed directly by ~~the trust~~BCTII as a result of its loan of the proceeds to Bimini Capital, that investment is not considered to be an equity investment at risk. Since Bimini Capital's common share investment in BCTII is not a variable interest, Bimini Capital is not the primary beneficiary of BCTII. Therefore, Bimini Capital has not consolidated the financial statements of BCTII into its consolidated financial statements.

-16-

The accompanying consolidated financial statements present Bimini Capital's BCTII Junior Subordinated Notes issued to ~~the trust~~BCTII as a liability and Bimini Capital's investment in the common equity securities of BCTII as an asset (included in other assets). For financial statement purposes, Bimini Capital records payments of interest on the Junior Subordinated Notes issued to BCTII as interest expense.

NOTE 8. ~~CAPITAL~~COMMON STOCK

At June 30, ~~2014~~2015 and December 31, ~~2013,~~2014, Bimini Capital’s ~~capital~~common stock is comprised of the following:

		June 30, 2014		December 31, 2013			June 30, 2015		December 31, 2014
Preferred stock, $0.001 par value; 10,000,000 shares authorized; designated, 1,800,000	Preferred stock, $0.001 par value; 10,000,000 shares authorized; designated, 1,800,000					Preferred stock, $0.001 par value; 10,000,000 shares authorized; designated, 1,800,000
	shares as Class A Redeemable and 2,000,000 shares as Class B Redeemable; no					shares as Class A Redeemable and 2,000,000 shares as Class B Redeemable; no
	shares issued and outstanding as of June 30, 2014 and December 31, 2013	$	-	$	-	shares issued and outstanding as of June 30, 2015 and December 31, 2014	$	-	$	-
Class A Common Stock, $0.001 par value; 98,000,000 shares designated: 12,295,182
Class A Common Stock, $0.001 par value; 98,000,000 shares designated: 12,346,376						Class A Common Stock, $0.001 par value; 98,000,000 shares designated: 12,346,376
	shares issued and outstanding as of June 30, 2014 and 11,509,756 shares					shares issued and outstanding as of June 30, 2015 and 12,324,391 shares
	issued and outstanding as of December 31, 2013		12,295		11,510	issued and outstanding as of December 31, 2014		12,346		12,324
Class B Common Stock, $0.001 par value; 1,000,000 shares designated, 31,938 shares	Class B Common Stock, $0.001 par value; 1,000,000 shares designated, 31,938 shares					Class B Common Stock, $0.001 par value; 1,000,000 shares designated, 31,938 shares
	issued and outstanding as of June 30, 2014 and December 31, 2013		32		32	issued and outstanding as of June 30, 2015 and December 31, 2014		32		32
Class C Common Stock, $0.001 par value; 1,000,000 shares designated, 31,938 shares	Class C Common Stock, $0.001 par value; 1,000,000 shares designated, 31,938 shares					Class C Common Stock, $0.001 par value; 1,000,000 shares designated, 31,938 shares
	issued and outstanding as of June 30, 2014 and December 31, 2013		32		32	issued and outstanding as of June 30, 2015 and December 31, 2014		32		32
							$	12,410	$	12,388

Issuances of Common Stock

The table below presents information related to the ~~Company’s~~Bimini Capital’s Class A Common Stock issued during the six ~~and three~~ months ended June 30, ~~2014~~2015 and ~~2013.~~2014.

	Six Months Ended June 30,				Three Months Ended June 30,
Shares Issued Related To:	2014		2013		2014		2013		2015	2014
Directors' compensation		27,531		-		27,531		-	21,985	27,531
Vesting incentive plan shares(1)		500,000		16,204		-		-	-	500,000
Shares sold directly to employees(1)		257,895		-		-		-	-	257,895
Total shares of Class A Common Stock issued		785,426		16,204		27,531		-	21,985	785,426

(1)	See Note 9, Stock Incentive Plans, for details of these issuances.

There were no issuances of ~~the Company's~~Bimini Capital's Class B Common Stock and Class C Common Stock during the six ~~and three~~ months ended June 30, ~~2014~~2015 and ~~2013.~~2014.

NOTE 9. STOCK INCENTIVE PLANS

On August 12, 2011, Bimini Capital’s shareholders approved the 2011 Long Term Compensation Plan (the “2011 Plan”) to assist the Company in recruiting and retaining employees, directors and other service providers by enabling them to participate in the success of Bimini Capital and to associate their ~~interest~~interests with those of the Company and its stockholders. The 2011 plan is intended to permit the grant of stock options, stock appreciation rights (“SARs”), stock awards, performance units and other equity-based and incentive awards. The maximum aggregate number of shares of Common Stock that may be issued under the 2011 Plan pursuant to the exercise of options and SARs, the grant of stock awards or other equity-based awards and the settlement of incentive awards and performance units is equal to 4,000,000 shares.

In October 2012, Orchid adopted the 2012 Equity Incentive Plan (the “2012 Plan”) to recruit and retain employees, directors and other service providers, including employees of Bimini Capital and other affiliates. The 2012 Plan provides for the award of stock options, stock appreciation rights, stock award, 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 is administered by the Compensation Committee of Orchid’s Board of Directors except that Orchid’s full Board of Directors will administer awards made to directors who are not employees of Orchid or its affiliates. The 2012 Plan provides for awards of up to an aggregate of 10% of the issued and outstanding shares of Orchid’s common stock (on a fully diluted basis) at the time of the awards, subject to a maximum aggregate 4,000,000 shares of Orchid common stock that may be issued under the Incentive Plan.

Phantom share awards represent a right to receive a share of Bimini Capital's Class A Common Stock. These awards do not have an exercise price and are valued at the fair value of Bimini Capital’s Class A Common Stock at the date of the grant. The grant date value is amortized to compensation expense on a straight-line basis over the vesting period of the respective award. The phantom shares vest, based on the employees’ continuing employment, following a schedule as provided in the individual grant agreements. Compensation expense recognized for phantom shares was approximately $41,000 and $20,000 for the six and three months ended June 30, 2013, respectively. During the six months ended June 30, 2014, there was no compensation expense recognized for the phantom share awards issued, as such awards were in settlement of the 2013 bonus liability accrued at December 31, 2013, as described below. Dividends paid on unsettled awards are charged to stockholders’ equity when declared.

19-17-

~~A summary of Bimini’s phantom share activity during six months ended June 30, 2014 and 2013 is presented below:~~Share Awards

2014 2013
Weighted- Weighted-
Average Average
Grant-Date Grant-Date
Shares Fair Value Shares Fair Value
Nonvested, at January 1 - $ - 367,844 $ 1.11
Granted during the period 500,000 0.38 - -
Vested during the period (500,000 ) 0.38 (16,204 ) 0.97
Nonvested, at June 30 - $ - 351,640 $ 1.12

In February 2014, the Compensation Committee of the Board of Directors of Bimini Capital (the “Committee”) approved certain performance bonuses for members of management. These bonuses were awarded primarily in recognition of management’s capital raising efforts in 2013. The bonuses, which were paid on February 19, 2014 (the “Bonus Date”), consisted of cash and fully vested shares of the Company’s common stock issued under the 2011 Plan. In particular, executive officers received bonuses totaling approximately $422,000, consisting of 500,000 shares of the Company’s common stock with an approximate value of $190,000, and cash of approximately $232,000 which, at the officer’s election, could be used to purchase newly issued shares directly from the Company. Under this election, the officers purchased 257,895 shares of the Company’s common stock. For purposes of these bonuses, shares of the Company’s common stock were valued based on the closing price of the Company’s common stock on the Bonus Date. The expense related to this bonus was accrued at December 31, 2013 and dodoes not affect the results of operations for the six and three months ended June 30, 2014.

A summary of ~~Orchid’s incentive~~ share award activity during the six months ended June 30, 2014 is presented below:

Weighted- Weighted-
Average Average
Grant-Date Remaining
Shares Fair Value Life
Restricted common stock, at January 1, 2014 - $ - -
Restricted common stock granted during the period 26,944 12.32 -
Vested during the period (2,944 ) 13.06 -
Restricted common stock, at June 30, 2014 24,000 $ 12.23 2.8 Years

			Weighted-
			Average
			Grant-Date
	Shares		Fair Value
Fully vested shares granted		500,000	$	0.38

~~On April 25, 2014, Orchid’s Compensation~~Performance Units

The Committee ~~granted each of its non-employee directors 6,000 shares of restricted common stock subject~~may issue Performance Units under the 2011 Plan to ~~a three year vesting schedule whereby 2,000 shares of~~certain officers and employees. “Performance Units” represent the ~~award vest on the first, second and third anniversaries of the award date. Directors have all the rights of any other Orchid stockholder with respect to the awards, including the~~participant’s right to receive ~~dividends~~an amount, based on the value of a specified number of shares of Common Stock, if the terms and ~~vote~~conditions prescribed by the ~~shares.~~Committee are satisfied. The ~~awards~~Committee will determine the requirements that must be satisfied before Performance Units are ~~subject~~earned, including but not limited to ~~forfeiture should the director no longer be a member of the Board of Directors of Orchid prior~~any applicable performance period and performance goals. Performance goals may relate to the ~~respective vesting dates. In June 2014,~~Company’s financial performance or the ~~non-employee directors also received a total of 2,944~~participant’s performance or such other criteria determined by the Committee, including goals stated with reference to the performance measures discussed below. If Performance Units are earned, they will be settled in cash, shares of immediately vested stock awards as part of their compensation for service on Orchid’s board of directors. Compensation expense recognized for restricted shares was approximately $55,000 for both the six and three months endedCommon Stock or a combination thereof.

The following table presents information related to Performance Units outstanding at June 30, ~~2014.~~2015 and December 31, 2014:

	June 30, 2015		December 31, 2014
Nonvested performance units outstanding at period end		31,500		31,500
Weighted-average grant date fair price	$	1.78	$	1.78
Unrecognized compensation expense at period end	$	45,946	$	55,291
Weighted-average remaining vesting term (in years)		2.50		3.00
Intrinsic value of unvested shares at period end	$	88,200	$	59,850

NOTE 10. COMMITMENTS AND CONTINGENCIES

~~Outstanding~~ Litigation

The Company ismay from time to time be involved in various lawsuits and claims, both ~~actual~~pending and ~~potential,~~threatened, including some that it has asserted against others, in which monetary and other damages are sought. These lawsuits and claims relate primarily to contractual disputes arising out of the ordinary course of the Company’s business. The outcome of such lawsuits and claims, as well as the costs to defend them, is inherently ~~unpredictable. However,~~unpredictable, and management ~~believes that, in the aggregate, the outcome of all lawsuits and claims involving the Company will not have~~may choose to settle certain matters based on a material effect on the Company’s consolidated financial position or liquidity; however, any such outcome may be material to the results of operations of any particular period in which costs, if any, are recognized.cost-benefit analysis.

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A complaint by a note-holder in Preferred Term Securities XX (“PreTSL XX”) was filed on July 16, 2010 in the Supreme Court of the State of New York, New York County, against Bimini Capital, the Bank of New York Mellon (“~~BNYM”~~BNY Mellon”)~~, PreTSL XX, Ltd.~~ and Hexagon Securities LLC (“Hexagon”). and nominal defendants BNY Mellon and Preferred Term Securities XX, Ltd. (“PreTSL XX”), captioned Hildene Capital Management, LLC, et al. v. The Bank of New York Mellon, et. al. The complaint, filed by Hildene Capital Management, LLC and Hildene Opportunities Fund, Ltd. (“Hildene”), ~~alleges~~alleged that Hildene suffered losses as a result of ~~Bimini’s~~Bimini Capital’s repurchase of all outstanding fixed/floating rate capital securities of Bimini Capital Trust II for less than par value from PreTSL XX in October 2009. Hildene ~~has~~ alleged claims against ~~BNYM~~BNY Mellon for breach of the Indenture, breach of fiduciary duties and breach of the covenant of good faith and fair dealing, and claims against Bimini Capital for tortious interference with contract, aiding and abetting breach of fiduciary duty, unjust enrichment and “rescission/illegality.” Hildene also alleged derivative claims brought in the name of Nominal Defendant ~~BNYM.~~BNY Mellon. (Subsequently, Hexagon and Nominal Defendant PreTSL XX were voluntarily dismissed without prejudice by Hildene.) PreTSL XX, Ltd. moved to intervene as an additional plaintiff in the action, and Bimini ~~Capital~~ and ~~BNYM~~BNY Mellon opposed that motion. The court granted PreTSL XX, Ltd.’s motion to intervene and the Appellate Division, First Department affirmed that decision. In May 2013, Hildene voluntarily dismissed its purported derivative claims brought in the name of ~~BNYM,~~BNY Mellon, including its claim for “rescission/illegality.” On April 14, 2014 and May 18, 2014, Stipulations of Partial Discontinuance were filed with the court that dismissed all claims between and among Hildene and ~~BNYM,~~BNY Mellon, and PreTSL XX and ~~BNYM. The parties have completed discovery~~BNY Mellon.

On May 15, 2015, Hildene and ~~are currently briefing summary judgment motions. A trial date for the action has not yet been scheduled.~~ Bimini Capital ~~denies that~~agreed to settle the ~~repurchase~~case, and on July 10, 2015, a Stipulation of Discontinuance was ~~improper~~filed dismissing all claims and ~~intends to continue to defend the suit vigorously.~~

~~On March 2, 2011, Orchid Island TRS, LLC, formerly known as Opteum Financial Services, LLC~~counterclaims between and ~~presently known as MortCo, LLC (“Opteum Financial”)~~among Hildene and Opteum Mortgage Acceptance Corporation (“Opteum Acceptance”) (collectively referred to herein as “MortCo”) received a cover letter dated March 1, 2011 from Massachusetts Mutual Life Insurance Company (“Mass Mutual”) enclosing a draft complaint against MortCo.Bimini Capital. In summary, Mass Mutual alleges that it purchased residential mortgage-backed securities offered by MortCo in August 2005 and the first quarter of 2006 and that MortCo made false representations and warranties in connection with the ~~sale~~settlement and in accordance with GAAP, a loss of $3.5 million was accrued at March 31, 2015 and has been charged to operations for the ~~securities~~six months ended June 30, 2015 and included in ~~violation of Mass Gen. Laws Ch. 110A § 410(a)(2) (the “Massachusetts Blue Sky Law”). In its cover letter, Mass Mutual claims it is entitled to damages~~other liabilities in ~~excess of $25 million. However, no monetary demand is contained within~~ the ~~draft complaint and the actual damages Mass Mutual claims to have incurred is uncertain.~~

~~Mass Mutual has not filed the complaint or initiated litigation. Pursuant to its request, on March 14, 2011 Mass Mutual and MortCo entered into a Tolling Agreement through~~ June 1, 2011 so that Mass Mutual could address its allegations against MortCo without incurring litigation costs. Mass Mutual never contacted MortCo to schedule such discussions. On August 22, 2011, the parties extended the Tolling Agreement through June 1, 2013, and on May 31, 2013, the parties extended the Tolling Agreement through December 2, 2013. To date, MortCo is aware of no action taken by Mass Mutual, and the Tolling Agreement appears to have expired by its own terms. MortCo denies Opteum Financial or Opteum Acceptance, individually or collectively, made false representations and warranties in connection with the sale of securities to Mass Mutual. Mass Mutual has taken no action to prosecute its claim against MortCo, and the range of loss or potential loss, if any, cannot reasonably be estimated. Should Mass Mutual initiate litigation, MortCo will defend such litigation vigorously.30, 2015 consolidated balance sheet.

NOTE 11. INCOME TAXES

REIT Activities

Generally, REITs are not subject to federal income tax on REIT taxable income distributed to its shareholders. REIT taxable income or loss, as generated by qualifying REIT activities, is computed in accordance with the Internal Revenue Code, which is different from the financial statement net income or loss as computed in accordance with GAAP. Depending on the number and size of the various items or transactions being accounted for differently, the differences between the Company’s REIT taxable income or loss and its GAAP financial statement net income or loss can be substantial and each item can affect several years.

As of December 31, ~~2013,~~2014, Bimini Capital had ~~an estimated~~a REIT tax net operating loss carryforward (“NOL carryforwards” or “NOLs”) of approximately ~~$17.9~~$17.3 million that is immediately available to offset future REIT taxable income. ~~The~~These REIT ~~tax net operating loss carryforwards~~NOLs will expire in years 2028 through ~~2033.~~

~~As discussed in Note 1, Orchid was a qualified~~2034, if not previously used to offset future REIT subsidiary of Bimini Capital until the closing of its IPO and all of its activities were included with the activities of Bimini Capital through that date. Subsequent to the closing of its IPO, Orchid is taxed separately from Bimini Capital.taxable income.

Taxable REIT Subsidiaries

As taxable REIT subsidiaries (“TRS”), Bimini Advisors and MortCo are tax paying entities for income tax purposes and are taxed separately from Bimini Capital ~~Orchid~~ and from each other. Therefore, Bimini Advisors and MortCo each separately report an income tax provision or benefit based on their own taxable activities. For the six months ended June 30, 2015 and 2014, MortCo and ~~2013, neither TRS had~~Bimini Advisors did not have taxable income primarily due to the utilization of their respective NOL carryforwards. The Company’s payment of taxes reported on the consolidated statement of cash flows results from alternative minimum taxes (“AMT”) which become due when NOLs are used to offset taxable income.

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The ~~TRS~~ income tax provision (benefit) ~~provision~~ for the six and three months ended June 30, 2015 and 2014 ~~and 2013 differs from~~is solely attributable to the ~~amount~~TRSs. For Bimini Advisors, the provision for the year 2015 periods is determined by applying the statutory Federal rate of 35% to ~~the~~its pre-tax income or ~~loss~~loss. During 2014, a benefit was recorded for the release of Bimini Advisor’s deferred tax valuation allowance related to an intangible asset and NOL carryforwards. For MortCo, its provision is generally zero, and it differs from the statutory Federal rate due primarily to the recording of, and adjustments to, the deferred tax asset valuation allowances and the release of the deferred tax valuation allowance related to ~~an intangible asset and~~ NOL carryforwards. The payment of AMT is included in the provision in the period it is paid.

Bimini Advisors has available at June 30, ~~2014~~2015 estimated federal and Florida NOL carryforwards of approximately ~~$2.3~~$0.4 million which begin to expire in 2031 and are fully available to offset future federal and Florida taxable income. In connection with Orchid’s IPO, Bimini Advisors paid for, and expensed for GAAP purposes, certain offering costs totaling approximately $3.2 million. For tax purposes, these offering costs created an intangible asset related to the management agreement with a tax basis of $3.2 million. The deferred tax assets related to the NOL carryforwards and the intangible asset at June 30, ~~2014~~2015 total approximately ~~$2.2~~$1.4 million.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

As of December 31, 2013, the Company did not believe that it had sufficient positive evidence to conclude that the realization of its deferred tax assets was more likely than not; therefore, a valuation allowance was provided for the entire balance of the deferred tax assets. During ~~the six months ended June 30,~~ 2014, the Company re-evaluated ~~this~~its previous position regarding its ability to realize Bimini Advisors’ deferred tax liability and determined that ~~due to increased projected management fee revenue and the ability to allocate certain overhead expenses to Orchid,~~ there iswas sufficient positive evidence to conclude that the realization of Bimini Advisors’ deferred tax assets iswas more likely than not. As a result, Bimini Advisors recorded a deferred income tax benefit of approximately $2.2 million during the six months ended June 30, 2014 related to the release of the valuation allowance.

As of June 30, ~~2014,~~2015, MortCo has estimated federal NOL carryforwards of approximately ~~$264.9~~$261.5 million and estimated available Florida NOLs of approximately ~~$37.5~~$34.1 million, both of which will begin to expire in 2025, and are fully available to offset future federal and Florida taxable income, respectively. The net deferred tax assets for MortCo at June 30, ~~2014~~2015 are approximately ~~$95.3~~$94.0 million. As of June 30, ~~2014~~2015 and December 31, ~~2013, the Company~~2014, management did not believe that it had sufficient positive evidence to conclude that the realization of MortCo’s deferred tax assets was more likely than not; therefore, a valuation allowance was provided for the entire balance of MortCo’s deferred tax assets.

MortCo holds residual interests in various real estate mortgage investment conduits (“REMICs”), which were issued in 2004, 2005 and 2006, some of which generate excess inclusion income (“EII”), a type of taxable income pursuant to specific provisions of the Code. In 2008, based on a re-evaluation of its tax position regarding REMIC income, MortCo recorded a liability of approximately $2.1 million for taxes, interest and penalties related to this uncertain tax position during 2008. During 2010 (as part of the filing of its 2009 tax returns), MortCo reached a tax filing position related to the EII taxable income, reported EII taxable income of approximately $2.1 million, paid $0.8 million of income tax, interest and penalties, and included a notice of inconsistent treatment in its tax returns. Because of the uncertainty surrounding the taxation of EII, MortCo accounted for the pre-2008 tax position as being more likely than not that the tax position would not be fully sustained upon examination. On September 15, 2013, the statute of limitations for the IRS to challenge MortCo’s pre-2008 tax position expired. As such, the remaining balance of the liability recorded in 2008 was reversed during the year ended December 31, 2013, which resulted in a tax benefit of $1.3 million. MortCo continues to file its tax returns following its 2009 tax filing position, and it continues to include a notice of inconsistent treatment in each return.

NOTE 12. EARNINGS PER SHARE

Shares of Class B Common Stock, participating and convertible into Class A Common Stock, are entitled to receive dividends in an amount equal to the dividends declared on each share of Class A Common Stock if, and when, authorized and declared by the Board of Directors. Following the provisions of FASB ASC 260, the Class B Common Stock is included in the computation of basic EPS using the two-class method, and consequently is presented separately from Class A Common Stock. Shares of Class B Common Stock are not included in the computation of diluted Class A EPS as the conditions for conversion to Class A Common Stock were not met at June 30, ~~2014~~2015 and ~~2013.~~2014.

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Shares of Class C Common Stock are not included in the basic EPS computation as these shares do not have participation rights. Shares of Class C Common Stock are not included in the computation of diluted Class A EPS as the conditions for conversion to Class A Common Stock were not met at June 30, ~~2014~~2015 and ~~2013.~~2014.

~~Bimini Capital had~~The Company has dividend eligible stock incentive plan shares that were outstanding during the six and three months ended June 30, ~~2013.~~2015. The basic and diluted per share computations include these unvested incentive plan shares if there is income available to Class A Common Stock, as they have dividend participation rights. The stock incentive plan shares have no contractual obligation to share in losses. Because there is no such obligation, the incentive plan shares are not included in the basic and diluted EPS computations when no income is available to Class A Common Stock even though they are considered participating securities.

The table below reconciles the numerator and denominator of EPS for the six and three months ended June 30, ~~2014~~2015 and ~~2013.~~2014.

(in thousands, except per-share information)
	Six Months Ended June 30,						Three Months Ended June 30,
	2015			2014			2015			2014
Basic and diluted EPS per Class A common share:
(Loss) income attributable to Class A common shares:
Basic and diluted	$	(2,886	)	$	5,684		$	(1,500	)	$	3,321
Weighted average common shares:
Class A common shares outstanding at the balance sheet date		12,346			12,295			12,346			12,295
Effect of weighting		(7	)		(223	)		-			-
Weighted average shares-basic and diluted		12,339			12,072			12,346			12,295
(Loss) income per Class A common share:
Basic and diluted	$	(0.23	)	$	0.47		$	(0.12	)	$	0.27

(in thousands, except per-share information)
Six Months Ended June 30, Three Months Ended June 30,
2014 2013 2014 2013
Basic and diluted EPS per Class A common share:
Income (loss) attributable to Class A common shares:
Basic and diluted $ 5,684 $ (2,562 ) $ 3,321 $ 200
Weighted average common shares:
Class A common shares outstanding at the balance sheet date 12,295 10,633 12,295 10,633
Unvested dividend-eligible stock incentive plan shares
outstanding at the balance sheet date - - - 352
Effect of weighting (223 ) (7 ) - -
Weighted average shares-basic and diluted 12,072 10,626 12,295 10,985
Income (loss) per Class A common share:
Basic and diluted $ 0.47 $ (0.24 ) $ 0.27 $ 0.02

(in thousands, except per-share information)
	Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,
	2014		2013			2014		2013		2015			2014		2015			2014
Basic and diluted EPS per Class B common share:
Income (loss) attributable to Class B common shares:
(Loss) income attributable to Class B common shares:
Basic and diluted	$	15	$	(8	)	$	9	$	1	$	(7	)	$	15	$	(4	)	$	9
Weighted average common shares:
Class B common shares outstanding at the balance sheet date		32		32			32		32		32			32		32			32
Weighted average shares-basic and diluted		32		32			32		32		32			32		32			32
Income (loss) per Class B common share:
(Loss) income per Class B common share:
Basic and diluted	$	0.47	$	(0.24	)	$	0.27	$	0.02	$	(0.23	)	$	0.47	$	(0.12	)	$	0.27

NOTE 13. FAIR VALUE

Authoritative accounting literature establishes a framework for using fair value to measure assets and liabilities and defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) as opposed to the price that would be paid to acquire the asset or received to assume the liability (an entry price). A fair value measure should reflect the assumptions that market participants would use in pricing the asset or liability, including the assumptions about the risk inherent in a particular valuation technique, the effect of a restriction on the sale or use of an asset and the risk of non-performance. Required disclosures include stratification of balance sheet amounts measured at fair value based on inputs the Company uses to derive fair value measurements. These stratifications are:

·	Level 1 valuations, where the valuation is based on quoted market prices for identical assets or liabilities traded in active markets (which include exchanges and over-the-counter markets with sufficient volume),

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Level 2 valuations, where the valuation is based on quoted market prices for similar instruments traded in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market, and

Level 3 valuations, where the valuation is generated from model-based techniques that use significant assumptions not observable in the market, but observable based on Company-specific data. These unobservable assumptions reflect the Company’s own estimates for assumptions that market participants would use in pricing the asset or liability. Valuation techniques typically include option pricing models, discounted cash flow models and similar techniques, but may also include the use of market prices of assets or liabilities that are not directly comparable to the subject asset or liability.

The Company’s MBS are valued using Level 2 valuations, and such valuations currently are determined by the Company based on ~~the average of~~independent pricing sources and/or third-party broker quotes, ~~and/or by independent pricing sources~~ when available. Because the price estimates may vary, the Company must make certain judgments and assumptions about the appropriate price to use to calculate the fair values. Alternatively, the Company could opt to have the value of all of our MBS positions determined by either an independent third-party or do so internally.

MBS, retained interests, Eurodollar futures contracts, Orchid common stock and interest rate ~~swaption~~swaptions were recorded at fair value on a recurring basis during the six and three months ended June 30, ~~2014~~2015 and ~~2013.~~2014. When determining fair value measurements, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset. When possible, the Company looks to active and observable markets to price identical assets. When identical assets are not traded in active markets, the Company looks to market observable data for similar assets. Fair value measurements for the retained interests are generated by a model that requires management to make a significant number of assumptions.

The following table presents financial assets and liabilities measured at fair value on a recurring basis as of June 30, ~~2014~~2015 and December 31, ~~2013:~~2014:

(in thousands)
			Quoted Prices								Quoted Prices
			in Active		Significant						in Active		Significant
			Markets for		Other		Significant				Markets for		Other		Significant
			Identical		Observable		Unobservable				Identical		Observable		Unobservable
	Fair Value		Assets		Inputs		Inputs		Fair Value		Assets		Inputs		Inputs
	Measurements		(Level 1)		(Level 2)		(Level 3)		Measurements		(Level 1)		(Level 2)		(Level 3)
June 30, 2014
June 30, 2015
Mortgage-backed securities	$	951,641	$	-	$	951,641	$	-	$	107,761	$	-	$	107,761	$	-
Eurodollar futures contracts		3,992		3,992		-		-		488		488		-		-
Orchid Island Capital, Inc. common stock										11,004		11,004		-		-
Retained interests		3,135		-		-		3,135		2,141		-		-		2,141
Payer swaption		1,200		-		1,200		-
December 31, 2013
December 31, 2014
Mortgage-backed securities	$	389,341	$	-	$	389,341	$	-	$	117,831	$	-	$	117,831	$	-
Eurodollar futures contracts		2,557		2,557		-		-		476		476		-		-
Orchid Island Capital, Inc. common stock										12,811		12,811		-		-
Retained interests		2,531		-		-		2,531		1,900		-		-		1,900

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The following table illustrates a roll forward for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months ended June 30, ~~2014~~2015 and ~~2013:~~2014:

(in thousands)
	Retained Interests						Retained Interests
	2014			2013			2015			2014
Balances, January 1	$	2,531		$	3,336		$	1,900		$	2,531
Gain included in earnings		2,447			1,755			2,539			2,447
Collections		(1,843	)		(1,628	)		(2,298	)		(1,843	)
Balances, June 30	$	3,135		$	3,463		$	2,141		$	3,135

During the six months ended June 30, ~~2014~~2015 and ~~2013,~~2014, there were no transfers of financial assets or liabilities between levels 1, 2 or 3.

Our retained interests are valued based on a discounted cash flow approach. These values are sensitive to changes in unobservable inputs, including: estimated prepayment speeds, default rates and loss severity, weighted-average life, and discount rates. Significant increases or decreases in any of these inputs may result in significantly different fair value measurements.

The following table summarizes the significant quantitative information about our level 3 fair value measurements as of June 30, ~~2014.~~2015.

Retained interests fair value (in thousands)			$	3,135			$	2,141
		CPR Range				CPR Range
Prepayment Assumption		(Weighted Average)				(Weighted Average)
Constant Prepayment Rate		10% (10%)				10% (10%)
		Severity Range				Severity
Default Assumptions	Probability of Default	(Weighted Average)		Range Of Loss Timing	Probability of Default	(Weighted Average)		Range Of Loss Timing
Real Estate Owned	100%	23.80% - 45.70% (34.50%)		Next 10 Months	100%	35%		Next 10 Months
Loans in Foreclosure	100%	23.80% - 45.70% (34.50%)		Month 4 - 13	100%	35%		Month 4 - 13
Loans 90 Day Delinquent	100%	45%		Month 11-28	100%	45%		Month 11-28
Loans 60 Day Delinquent	85%	45%		Month 11-28	85%	45%		Month 11-28
Loans 30 Day Delinquent	75%	45%		Month 11-28	75%	45%		Month 11-28
Current Loans	2.50% - 4.25%	45%		Month 29 and Beyond	2.5%	45%		Month 29 and Beyond
		Remaining Life Range		Discount Rate Range		Remaining Life Range		Discount Rate Range
Cash Flow Recognition	Valuation Technique	(Weighted Average)		(Weighted Average)	Valuation Technique	(Weighted Average)		(Weighted Average)
Nominal Cash Flows	Discounted Cash Flow	9.4 - 16.3 (10.7)		27.50% (27.50%)	Discounted Cash Flow	0.2 - 13.2 (6.5)		27.50% (27.50%)
Discounted Cash Flows	Discounted Cash Flow	0.5 - 15.6 (1.0)		27.50% (27.50%)	Discounted Cash Flow	0.2 - 3.6 (1.0)		27.50% (27.50%)

NOTE 14. RELATED PARTY TRANSACTIONS

Frank E. Jaumot is a shareholder in an accounting firm from which the Company receives accounting and tax services. Mr. Jaumot is both a director and a shareholder of Bimini Capital and a shareholder of Orchid. Professional fees incurred with this firm were $52,000 ~~and $67,000~~ for the six months ended June 30, ~~2014~~2015 and ~~2013, respectively~~.$52,000 for the six months ended June 30, 2014.

NOTE 15. CONSOLIDATED VARIABLE INTEREST ENTITY AND NONCONTROLLING INTERESTS

As discussed in Note 1, Orchid completed its IPO on February 20, 2013. Bimini Capital owned 100% of the outstanding common stock of Orchid prior to the IPO, and approximately 29.38% immediately after the IPO. Orchid operates as a mortgage REIT and was formed in order to increase Bimini Capital’s assets under management to generate additional revenues to cover operating costs. Orchid entered into a management agreement with Bimini Advisors under which Bimini Advisors will be responsible for administering the business activities and day-to-day operations of Orchid. Bimini Advisors receives a monthly management fee for these services and, commencing as of July 1, 2014, reimbursement for certain overhead expenses. Bimini Capital and Bimini Advisors acted as sponsors of the Orchid IPO and paid approximately $3.0 million of IPO related expenses during the six months ended June 30, 2013. The Company did not provide any further financial support to Orchid in connection with its IPO.

As discussed in Note 1, Orchid completed additional offerings of its common stock during the six months ended June 30, 2014. As a result of these offerings, at June 30, 2014 Bimini owns approximately 10.2% of the outstanding common stock of Orchid.

~~The table below presents the effects of the transactions above on the changes in equity attributable to Bimini Capital stockholders during the six months ended June 30, 2014 and 2013.~~

($ in thousands)
2014 2013
Net income (loss) attributable to Bimini Capital $ 5,699 $ (2,570)
Transfers from the noncontrolling interests
Increase in Bimini Capital's paid-in capital for the sale of 2,360,000 common shares of Orchid - 278
Decrease in Bimini Capital's paid-in capital for the sale of 6,290,443 common shares of Orchid
and the effect of the 24,000 shares of unvested restricted shares of Orchid (see Note 9) (1,004) -
Change from net income (loss) attributable to Bimini Capital and transfers from noncontrolling interest $ 4,695 $ (2,292)

The noncontrolling interests reported in the Company’s consolidated financial statements represent the portion of equity ownership in Orchid held by stockholders other than Bimini Capital. Noncontrolling interest is presented in the equity section of the consolidated balance sheets, separate from stockholders’ equity attributed to Bimini Capital. Net income of Orchid is allocated between the noncontrolling interests and to Bimini Capital in proportion to their relative ownership interests in Orchid.

~~The following is a roll forward of the noncontrolling interest during the six months ended June 30, 2014 and 2013.~~

(in thousands)
2014 2013
Balance, January 1 $ 31,615 $ -
Issuance of common shares of Orchid Island Capital, Inc. 76,120 35,122
Net income attributed to noncontrolling interest 12,538 (531 )
Amortization of Orchid Island Capital, Inc. equity plan compensation 16 -
Cash dividends paid to noncontrolling interest (7,378 ) (1,275 )
Balance, June 30 $ 112,911 $ 33,316

A VIE is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (ii) has equity investors who lack the characteristics of a controlling financial interest. A VIE is consolidated by its primary beneficiary. The primary beneficiary has both the power to direct the activities that most significantly impact the entity's economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE.

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As discussed in Note 1, Orchid completed its IPO on February 20, 2013. Management ~~has~~ concluded that, after the close of its IPO, Orchid iswas a VIE because Orchid's equity holders lack the ability through voting rights to make decisions about its activities that have a significant effect on its success. Management ~~has~~ also concluded that Bimini Capital iswas the primary beneficiary of Orchid because, under the terms of the management agreement, Bimini Capital ~~has~~had the power to direct the activities of Orchid that most significantly impact its economic performance including asset selection, asset and liability management and investment portfolio risk management. As a result, subsequent to Orchid’s IPO, and ~~through June 30,~~until December 31, 2014, the Company continued to consolidate Orchid in its ~~Consolidated Financial Statements. This conclusion will be re-evaluated~~consolidated financial statements.

Orchid completed additional offerings of its common stock during the year ended December 31, 2014. Management continued to re-evaluate the conditions resulting in the consolidation of Orchid and at December 31, 2014 concluded that, due to Bimini’s decreased percentage ownership interest in Orchid, there was no longer a variable interest requiring consolidation. In accordance with ASC 810, the Company deconsolidated Orchid from the consolidated balance sheet as of December 31, 2014. Orchid’s activities were included in the consolidated statements of operations, equity and cash flows through December 31, 2014 and are excluded in subsequent ~~reporting periods as~~periods.

The table below presents the ~~relationship between~~effects of the above on the changes in equity attributable to Bimini Capital stockholders during the six months ended June 30, 2014.

($ in thousands)
Net income attributable to Bimini Capital	$	5,699
Transfers from the noncontrolling interests
Decrease in Bimini Capital's paid-in capital for the sale of 6,290,443 common shares of Orchid
and the effect of the 24,000 shares of unvested restricted shares of Orchid		(1,004	)
Change from net income attributable to Bimini Capital and transfers from noncontrolling interest	$	4,695

Net income of Orchid for the six and ~~Orchid changes.~~three months ended June 30, 2014 is allocated between the noncontrolling interests and to Bimini Capital in proportion to their relative ownership interests in Orchid. The following is a roll forward of the noncontrolling interest during the six months ended June 30, 2014.

(in thousands)
Balance, January 1, 2014	$	31,615
Issuance of common shares of Orchid Island Capital, Inc.		76,120
Net income attributed to noncontrolling interest		12,538
Amortization of Orchid Island Capital, Inc. equity plan compensation		16
Cash dividends paid to noncontrolling interest		(7,378	)
Balance, June 30, 2014	$	112,911

27-24-

~~The following table presents the assets and liabilities of Orchid that are reflected on our consolidated balance sheets at June 30, 2014 and December 31, 2013 (excluding intercompany balances).~~

(in thousands)
June 30, 2014 December 31, 2013
ASSETS:
Mortgage-backed securities, at fair value
Pledged to counterparties $ 833,384 $ 335,775
Unpledged 42,620 15,448
Total mortgage-backed securities 876,004 351,223
Cash and cash equivalents 33,285 8,169
Restricted cash 3,584 2,446
Accrued interest receivable 3,798 1,559
Derivative asset, at fair value 1,200 -
Other assets 515 179
Total Assets $ 918,386 $ 363,576

LIABILITIES:
Repurchase agreements $ 783,701 $ 318,557
Payable for unsettled security purchased 6,829 -
Accrued interest payable 308 91
Other liabilities 1,708 80
Total Liabilities $ 792,546 $ 318,728

The following table summarizes the operating results of Orchid (excluding intercompany transactions) for the six and three months ended June 30, 2014, ~~and for the period beginning February 20, 2013 (the date of its IPO) through June 30, 2013~~ which are reflected in ~~our~~the consolidated statements of operations for the six and three months ended June 30, ~~2014 and 2013.~~2014.

(in thousands)
Six Months Ended June 30, Three Months Ended June 30,
2014
2013(1)
2014 2013
Interest income $ 10,372 $ 3,460 $ 6,589 $ 2,429
Interest expense (1,087 ) (459 ) (676 ) (322 )
Net interest income 9,285 3,001 5,913 2,107
Unrealized gains (losses) on mortgage-backed securities 10,124 (8,618 ) 8,584 (9,130 )
Realized gains (losses) on mortgage-backed securities 3,891 (824 ) 2,980 (923 )
(Losses) gains on derivative financial instruments (7,421 ) 6,368 (5,728 ) 6,852
Net portfolio income (deficiency) 15,879 (73 ) 11,749 (1,094 )

Expenses:
Accrued incentive compensation 225 - 225 -
Directors' fees and liability insurance 240 124 156 83
Audit, legal and other professional fees 245 152 172 106
Direct REIT operating expenses 88 74 44 36
Other administrative 118 53 88 41
Total expenses 916 403 685 266

Net income (loss) $ 14,963 $ (476 ) $ 11,064 $ (1,360 )

~~(1)~~

~~Consists of the period beginning February 20, 2013 through June 30, 2013.~~

(in thousands)
	Six Months Ended			Three Months Ended
	June 30, 2014			June 30, 2014
Interest income	$	10,372		$	6,589
Interest expense		(1,087	)		(676	)
Net interest income		9,285			5,913
Unrealized gains on mortgage-backed securities		10,124			8,584
Realized gains on mortgage-backed securities		3,891			2,980
Losses on derivative instruments		(7,421	)		(5,728	)
Net portfolio income		15,879			11,749

Expenses:
Accrued incentive compensation		225			225
Directors' fees and liability insurance		240			156
Audit, legal and other professional fees		245			172
Direct REIT operating expenses		88			44
Other administrative		118			88
Total expenses		916			685

Net income	$	14,963		$	11,064

28-25-

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and notes to those statements included in Item 1 of this Form 10-Q. The discussion may contain certain forward-looking statements that involve risks and uncertainties. Forward-looking statements are those that are not historical in nature. As a result of many factors, such as those set forth under “Risk Factors” in our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q, our actual results may differ materially from those anticipated in such forward-looking statements.

Overview

As used in this document, references to “Bimini Capital,” the parent company, and to or the general management of Bimini Capital’s portfolio of MBS refer to Bimini Capital Management, Inc. Through February 19, 2013, Bimini Capital's consolidated financial statements include Orchid Island Capital, Inc. ("Orchid") as a wholly-owned qualified REIT subsidiary. Orchid completed an initial public offering ("IPO") of its common stock effective February 20, 2013. After that date, Orchid continues to be consolidated as a variable interest entity (“VIE”) as described below. As used in this document, discussions related to REIT qualifying activities include the MBS portfolios of Bimini Capital and Orchid. References to Bimini Capital’s taxable REIT subsidiaries or non-REIT eligible assets refer to Bimini Advisors, Inc. and Bimini Advisors, LLC (together, “Bimini Advisors”) and to MortCo TRS, LLC (“MortCo”) and its consolidated subsidiaries. MortCo, which was previously named Opteum Financial Services, LLC, (referred to as “OFS”) was renamed Orchid Island TRS, LLC (referred to as “OITRS”) effective July 3, 2007 and then renamed MortCo TRS, LLC effective March 8, 2011. Hereinafter, any historical mention, discussion or references to Opteum Financial Services, LLC, Orchid Island TRS, LLC, OFS or to OITRS (such as in previously filed documents or Exhibits) now means MortCo. References to the “Company” refer to the consolidated entity which is the consolidation of Bimini Capital, Orchid, Bimini Advisors, MortCo and MortCo’s consolidated subsidiaries.

Bimini Capital was formed in September 2003 to invest primarily in residential ~~mortgage related~~mortgage-backed securities (“MBS”) 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”). The Company deploys its capital into two core strategies. The two strategies are a levered MBS portfolio and an unlevered structured MBS portfolio. The leverage applied to the MBS portfolio will typically be less than twelve to one. The Company manages its portfolio of agency MBS and structured MBS to generate income derived from the net interest margin of its MBS portfolio, levered predominantly under repurchase agreement funding, net of associated hedging costs, and the interest income derived from its unlevered portfolio of structured MBS. Beginning in 2013, and as further described below, the Company, through its wholly-owned subsidiary, also began to be an external manager of the portfolio of Orchid, and from this arrangement the Company receives management fees and expense reimbursements. In addition, the Company receives dividends from its investment in Orchid common shares. The Company treats its ~~remaining~~ junior subordinated notes as an equity capital equivalent. The Company is self-managed and self-advised and has elected to be taxed as a REIT for U.S. federal income tax purposes.

As used in this document, references to “Bimini Capital,” the parent company, and to or the general management of Bimini Capital’s portfolio of MBS refer to Bimini Capital Management, Inc. Through February 19, 2013, Bimini Capital's consolidated financial statements include Orchid Island Capital, Inc. ("Orchid") as a wholly-owned qualified REIT subsidiary. Orchid completed an initial public offering ("IPO") of its common stock effective February 20, 2013. After that date, and until December 31, 2014, Orchid continued to be consolidated as a variable interest entity (“VIE”) as described below. As used in this document, discussions related to REIT qualifying activities include the MBS portfolios of both Bimini Capital and Orchid through December 31, 2014, and Bimini Capital only in 2015. References to Bimini Capital’s taxable REIT subsidiaries or non-REIT eligible assets refer to Bimini Advisors, Inc., and its wholly-owned subsidiary, Bimini Advisors, LLC (together as “Bimini Advisors”) and to MortCo TRS, LLC and its consolidated subsidiaries (collectively, “MortCo”). MortCo, which was previously named Opteum Financial Services, LLC, (referred to as “OFS”) was renamed Orchid Island TRS, LLC (referred to as “OITRS”) effective July 3, 2007 and then renamed MortCo TRS, LLC effective March 8, 2011. Hereinafter, any historical mention, discussion or references to Opteum Financial Services, LLC, Orchid Island TRS, LLC, OFS or to OITRS (such as in previously filed documents or Exhibits) now mean MortCo.

Management of Orchid

Upon completion of its initial public offering, Orchid became externally managed and advised by Bimini Advisors pursuant to the terms of a management agreement. As Manager, Bimini Advisors 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 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 delegated to it.

Factors that Affect our Results of Operations and Financial Condition

A variety of industry and economic factors may impact our results of operations and financial condition. These factors include:

·	interest rate trends;

·	the difference between Agency MBS yields and our funding and hedging costs;

·	competition for investments in Agency MBS;

·	~~recent~~ actions taken by the Federal Reserve and the U.S. Treasury;

·	prepayment rates on mortgages underlying our Agency MBS, and credit trends insofar as they affect prepayment rates; and

·	other market developments.

-26-

In addition, a variety of factors relating to our business may also impact our results of operations and financial condition. These factors include:

·	our degree of leverage;

·	our access to funding and borrowing capacity;

·	our borrowing costs;

·	our hedging activities;

·	the market value of our investments; and

·	the requirements to qualify as a REIT and the requirements to qualify for a registration exemption under the Investment Company Act.

Consolidation of Orchid Island Capital, Inc.

Subsequent to Orchid’s IPO and ~~as of June 30,~~until December 31, 2014, management ~~has~~ concluded that Orchid iswas a VIE, as defined in generally accepted accounting principles, because Orchid’s equity holders ~~lack~~lacked the ability through voting rights to make decisions about the activities that have a significant effect on the success of Orchid. Management ~~has~~ also concluded that Bimini Capital iswas the primary beneficiary of Orchid because, under the management agreement between Bimini Advisors and Orchid, Bimini Capital ~~has~~had the power to direct the activities of Orchid that most significantly impact its economic performance. As a result, subsequent to Orchid’s IPO and ~~through June 30,~~until December 31, 2014, the Company ~~has~~ continued to consolidate Orchid in its ~~Consolidated Financial Statements even though, as of June 30, 2014, Bimini owned 10.2% of the outstanding common stock of Orchid.~~consolidated financial statements.

~~The noncontrolling interests reported~~In December 2014, management of Bimini Capital re-evaluated the conditions resulting in the ~~Company’s consolidated financial statements represent the portion~~consolidation of ~~equity~~Orchid and concluded that, due to Bimini Capital’s decreased percentage ownership interest in Orchid, ~~held by stockholders other than Bimini Capital. Noncontrolling interests is presented~~there was no longer a variable interest requiring consolidation. As a result, in accordance with ASC 810, the ~~equity section of~~Company deconsolidated Orchid from the consolidated balance ~~sheets, separate from~~sheet as of December 31, 2014. However, as a VIE which was deconsolidated on December 31, 2014, Orchid’s results of operations were included in the consolidated statements of operations, equity ~~attributed to Bimini Capital. Net~~and cash flows through December 31, 2014, and are excluded in subsequent periods.

During the period of time in which Orchid was a VIE, the net income of Orchid ishas been allocated ~~between~~to the noncontrolling interests and to Bimini Capital in proportion to their relative ownership interests in Orchid.

The consolidation of Orchid’s assets and liabilities with those of Bimini Capital and its wholly-owned subsidiaries ~~gives~~during the period of time in which Orchid was a VIE gave the appearance of a much larger organization. However, the assets recognized as a result of consolidating Orchid dodid not represent additional assets that could be used to satisfy claims against Bimini Capital’s assets, nor dodid they represent amounts that are available to be distributed to Bimini Capital’s stockholders. Conversely, liabilities recognized as a result of consolidating Orchid dodid not represent additional claims on Bimini Capital’s assets; rather, they ~~represent~~represented claims against the assets of Orchid.

Impact of Consolidation on Period-to-Period Comparisons

The discussion and tables set forth below present information as of certain dates and for certain periods of time in which Orchid was consolidated as a VIE. In ~~addition~~particular, unless stated otherwise balance sheet data as of March 31, 2014, June 30, 2014 and September 30, 2014 and statement of operations data for the year ended December 31, 2014 and each quarter of 2014 reflect the consolidation of Orchid as a VIE.

-27-

The discussion and tables set forth below also present information as of certain dates and for certain periods of time in which Orchid was not consolidated as a VIE. Unless stated otherwise, balance sheet data as of December 31, 2014, March 31, 2015 and June 30, 2015, statement of operations data for the six and three months ended June 30, 2015, and the statement of cash flows for the six months ended June 30, 2015 do not reflect the consolidation of Orchid as a VIE.

Certain discussion and tables below provide period-to-period comparisons in which Orchid was consolidated on the first date or period and deconsolidated on the second date or period. The changes reflected in those period-to-period comparisons are due in large part to the ~~presentation~~consolidation (or deconsolidation) of the Company’s consolidated portfolio activities in this section, we have also provided additional discussion related to the portfolio activities of Bimini Capital on its own. We believe that this “parent-only” information along with the consolidated presentation provides useful information about the activities that are relevant to shareholders of Bimini Capital.Orchid.

Dividends To Stockholders

In order to maintain its qualification as a REIT, Bimini Capital is required (among other provisions) to annually distribute dividends to its stockholders in an amount at least equal to, generally, 90% of Bimini Capital’s REIT taxable income. REIT taxable income is a term that describes Bimini Capital’s operating results calculated in accordance with rules and regulations promulgated pursuant to the Internal Revenue Code. ~~Beginning with its initial short tax period ended December 31, 2013, Orchid expects to qualify and elect to be taxed as a REIT. As such, the same taxation rules apply separately to Orchid.~~

REIT taxable income is computed differently from net income as computed in accordance with generally accepted accounting principles ("GAAP net income"), as reported in the Company’s accompanying consolidated financial statements. Depending on the number and size of the various items or transactions being accounted for differently, the differences between REIT taxable income and GAAP net income can be substantial and each item can affect several reporting periods. ~~Generally,~~Certain of these items are timing or temporary differences between years; for example, an item that may be a deduction for GAAP net income in the current year may not be a deduction for REIT taxable income until a later year. Others are permanent differences that only impact either GAAP or tax. The most significant differences are as follows: the results of the Company’s taxable REIT subsidiaries do not impact REIT taxable income, unrealized gains or losses on the MBS do not impact REIT taxable income, interest income on MBS securities is computed differently for REIT taxable income and GAAP, and for tax reporting purposes Orchid’s IPO expenses (which were paid by Bimini Advisors) are considered capital costs.

A REIT may be subject to a federal excise tax if it distributes less than 85% of its REIT taxable income by the end of the calendar year. Accordingly, dividends are based on its REIT taxable income (after considering the possible impact of applying NOLs to the income as described below in “Net Operating Losses”), as determined for federal income tax purposes, as opposed to its net income computed in accordance with GAAP (as reported in the accompanying consolidated financial statements).

During the six and three months ended June 30, ~~2014,~~2015, Bimini Capital made no dividend ~~distributions as a separately reporting tax REIT.~~distributions. All distributions are made at the discretion of the Company’s Board of Directors and will depend on the Company’s results of operations, financial conditions, maintenance of REIT status, availability of net operating losses and other factors that may be deemed relevant. Bimini Capital ~~declared a special dividend in December 2009 and a regular dividend in each of the six quarters thereafter. Bimini Capital~~ continues to evaluate its dividend payment policy. However, as more fully described below, due to net operating losses (“NOLs”) incurred in prior periods, Bimini Capital is unlikely to declare and pay dividends to stockholders until such ~~net operating losses~~NOLs have been consumed.

Orchid paid its first dividend on March 27, 2013 to stockholders of record as of March 25, 2013 in an amount of $0.135 per share of its common stock. Orchid has also paid dividends each month since then for a total amount of $1.395 per share of its common stock during 2013 and $1.08 during the six months ended June 30, 2014.

-28-

Net Operating Losses

As described above, a REIT may be subject to a federal excise tax if it distributes less than 85% of its REIT taxable income by the end of a calendar year. In calculating the amount of excise tax payable in a given year, if any, Bimini Capital reduces REIT taxable income by distributions made to stockholders in the form of dividends and/or NOL carryforwards from prior years, to the extent any are available. Since income subject to excise tax is REIT taxable income less qualifying dividends and the application of NOLs, if a REIT has sufficient NOLs it could apply such NOLs against its taxable income and avoid excise taxes without paying qualifying dividends to stockholders. Accordingly, if in future periods Bimini Capital has taxable income, it can avoid the obligation to pay excise taxes by applying the estimated ~~$17.9~~$17.3 million of NOLs available as of December 31, ~~2013~~2014 against such taxable income until the NOLs are exhausted in lieu of making distributions to stockholders. Further, Bimini Capital could avoid the obligation to pay excise taxes through a combination of qualifying dividends and the application of NOLs. In any case, future distributions to stockholders are expected to be less than REIT taxable income until the existing NOLs are consumed.

Results of Operations

Described below are the Company’s results of operations for the six and three months ended June 30, ~~2014,~~2015, as compared to the six and three months ended June 30, ~~2013.~~2014.

Net (Loss) Income ~~(Loss)~~ Summary

Consolidated net ~~income~~loss for the six months ended June 30, ~~2014~~2015 was $2.9 million, or $0.23 basic and diluted loss per share of Class A Common Stock, as compared to consolidated net income of $5.7 million, or $0.47 basic and diluted income per share of Class A Common Stock, ~~as compared to consolidated net loss of $2.6 million, or $0.24 basic and diluted loss per share of Class A Common Stock,~~ for the six months ended June 30, ~~2013.~~2014.

Consolidated net ~~income~~loss for the three months ended June 30, ~~2014~~2015 was ~~$3.3~~$1.5 million, or ~~$0.27~~$0.12 basic and diluted ~~income~~loss per share of Class A Common Stock, as compared to consolidated net income of ~~$0.2~~$3.3 million, or ~~$0.02~~$0.27 basic and diluted income per share of Class A Common Stock, for the three months ended June 30, ~~2013.~~2014.

The components of net (loss) income ~~(loss)~~ for the six and three months ended June 30, ~~2014~~2015 and ~~2013,~~2014, along with the changes in those components are presented in the table below:

(in thousands)
	Six Months Ended June 30,									Three Months Ended June 30,
	2015			2014(1)			Change			2015			2014(1)			Change
Net portfolio interest	$	2,083		$	10,053		$	(7,970	)	$	976		$	6,391		$	(5,415	)
Interest expense on junior subordinated notes		(491	)		(489	)		(2	)		(248	)		(245	)		(3	)
(Losses) gains on MBS and derivative instruments		(1,207	)		7,725			(8,932	)		(1,021	)		6,804			(7,825	)
Net portfolio income (loss)		385			17,289			(16,904	)		(293	)		12,950			(13,243	)
Other income		3,639			2,426			1,213			594			2,243			(1,649	)
Expenses, including income taxes		(6,917	)		(1,478	)		(5,439	)		(1,805	)		(2,279	)		474
Net (loss) income		(2,893	)		18,237			(21,130	)		(1,504	)		12,914			(14,418	)
Income attributable to
noncontrolling interests		-			12,538			(12,538	)		-			9,584			(9,584	)
Net (loss) income attributable to
Bimini Capital Management, Inc.	$	(2,893	)	$	5,699		$	(8,592	)	$	(1,504	)	$	3,330		$	(4,834	)

(in thousands)
Six Months Ended June 30, Three Months Ended June 30,
2014 2013 Change 2014 2013 Change
Net portfolio interest income $ 10,053 $ 3,398 $ 6,655 $ 6,391 $ 2,119 $ 4,272
Interest expense on junior subordinated notes (489 ) (496 ) 7 (245 ) (248 ) 3
Gains (losses) on MBS and derivative instruments 7,725 (5,162 ) 12,887 6,804 (4,275 ) 11,079
Net portfolio income (deficiency) 17,289 (2,260 ) 19,549 12,950 (2,404 ) 15,354
Other income 2,426 4,784 (2,358 ) 2,243 2,801 (558 )
Expenses, including income taxes (1,478 ) (5,625 ) 4,147 (2,279 ) (1,288 ) (991 )
Net income (loss) 18,237 (3,101 ) 21,338 12,914 (891 ) 13,805
Income (loss) attributable to
noncontrolling interests 12,538 (531 ) 13,069 9,584 (1,092 ) 10,676
Net income (loss) attributable to
Bimini Capital Management, Inc. $ 5,699 $ (2,570 ) $ 8,269 $ 3,330 $ 201 $ 3,129

(1)	Information presented in the table above for the six and three months ended June 30, 2014 includes the activities of Orchid Island Capital, Inc.

As described below, “other income” includes gains on fair value adjustments on retained interests in securitizations. During the six and three months ended June 30, 2013, “other income” also includes approximately $3.0 million for the reversal of reserves related to certain loans MortCo had originated in its prior business.-29-

GAAP and Non-GAAP Reconciliation

To date, the Company has used derivatives, specifically interest rate futures contracts, such as Eurodollar futures contracts, and an interest rate ~~swaption,~~swaptions, to hedge a portion of the interest rate risk on its repurchase agreements and junior subordinate notes in a rising rate environment. Each ~~Eurodollar~~interest rate futures contract covers a specific three month period, but the Company typically has many contracts in place at any point in time — usually covering several years in the aggregate. ~~We currently have one interest rate swaption agreement in place, giving us the option to enter into a swap covering future periods.~~

The Company has not elected to designate its derivative holdings for hedge accounting treatment under the Financial Accounting Standards Board, (the “FASB”), Accounting Standards Codification, (“ASC”), Topic 815, Derivatives and Hedging. Changes in fair value of these instruments are presented in a separate line item in the Company’s consolidated statements of operations and not included in interest expense. As such, for financial reporting purposes, interest expense and cost of funds are not impacted by the fluctuation in value of the derivative instruments. In the future, the Company may use other derivative instruments to hedge its interest expense and/or elect to designate its derivative holdings for hedge accounting treatment.

For the purpose of computing economic net interest income and ratios relating to cost of funds measures, GAAP interest expense has been adjusted to reflect the realized gains or losses on specific derivative instruments that pertain to each period presented. As of June 30, ~~2014,~~2015, the Company has Eurodollar futures contracts in place through ~~2018, and one interest rate swaption agreement in place covering periods beginning in 2015 through 2020.~~2018. Adjusting our interest expense for the periods presented by the gains or losses on all derivative instruments would not accurately reflect our economic interest expense for these periods.

For each period presented, the Company has combined the effects of the derivative financial instruments in place for the respective period with the actual interest expense incurred on repurchase agreements and junior subordinated notes to reflect total expense for the applicable period. Interest expense, including the effect of derivative instruments for the period, is referred to as economic interest expense. Net interest income, when calculated to include the effect of derivative instruments for the period, is referred to as economic net interest income.

However, ~~under ASC 815,~~ because the Company has not elected hedging treatment under ASC Topic 815, the gains or losses on all of the Company’s derivative instruments held during the period are reflected in our consolidated statements of operations. This presentation includes gains or losses on all contracts in effect during the reporting period, including those covering both the current period as well as future periods.

The Company believes that economic interest expense and economic net interest income provides meaningful information to consider, in addition to the respective amounts prepared in accordance with GAAP. The non-GAAP measures help the Company to evaluate its financial position and performance without the effects of certain transactions and GAAP adjustments that are not necessarily indicative of its current investment portfolio or operations. The realized and unrealized gains or losses presented in the Company’s consolidated statements of operations are not necessarily representative of the total interest rate expense that the Company will ultimately realize. This is because as interest rates move up or down in the future, the gains or losses the Company ultimately realizes, and which will affect the Company’s total interest rate expense in future periods, may differ from the unrealized gains or losses recognized as of the reporting date.

The Company’s presentation of the economic value of its hedging strategy has important limitations. First, other market participants may calculate economic interest expense and economic net interest income differently than the Company calculates them. Second, while the Company believes that the calculation of the economic value of our hedging strategy described above helps to present our financial position and performance, it may be of limited usefulness as an analytical tool. Therefore, the economic value of the Company’s investment strategy should not be viewed in isolation and is not a substitute for interest expense and net interest income computed in accordance with GAAP.

-30-

The tables below present a reconciliation of the adjustments to interest expense shown for each period relative to our derivative instruments, and the ~~income statement~~consolidated statements of operations line item, ~~gains (losses)~~losses on derivative instruments, calculated in accordance with GAAP for the six months ended June 30, 2015 and 2014 and ~~2013 and~~for each quarter ~~during 2014~~in 2015 and ~~2013.~~

2014.

Gains (Losses) on Derivative Instruments - Recognized in Income Statement (GAAP)
(in thousands)
Junior
Repurchase Subordinated
Agreements Debt Total
Three Months Ended
June 30, 2014 $ (5,757 ) $ (117 ) $ (5,874 )
March 31, 2014 (1,693 ) (24 ) (1,717 )
December 31, 2013 729 (38 ) 691
September 30, 2013 (2,283 ) (167 ) (2,450 )
June 30, 2013 6,841 230 7,071
March 31, 2013 (481 ) 6 (475 )
Six Months Ended
June 30, 2014 $ (7,450 ) $ (141 ) $ (7,591 )
June 30, 2013 6,360 236 6,596

Gains (Losses) on Derivative Instruments - Recognized in Consolidated Statement of Operations (GAAP)
(in thousands)
				Junior
	Repurchase			Subordinated
Three Months Ended	Agreements			Debt			Total
Consolidated
June 30, 2015	$	7		$	(1	)	$	6
March 31, 2015		(687	)		(328	)		(1,015	)
December 31, 2014		(9,719	)		(287	)		(10,006	)
September 30, 2014		3,257			149			3,406
June 30, 2014		(5,757	)		(117	)		(5,874	)
March 31, 2014		(1,693	)		(24	)		(1,717	)
Bimini Capital Only
June 30, 2015	$	7		$	(1	)	$	6
March 31, 2015		(687	)		(328	)		(1,015	)
December 31, 2014		(158	)		(287	)		(445	)
September 30, 2014		200			149			349
June 30, 2014		(29	)		(117	)		(146	)
March 31, 2014		-			(24	)		(24	)


(in thousands)
				Junior
	Repurchase			Subordinated
Six Months Ended	Agreements			Debt			Total
Consolidated
June 30, 2015	$	(680	)	$	(329	)	$	(1,009	)
June 30, 2014		(7,450	)		(141	)		(7,591	)
Bimini Capital Only
June 30, 2015	$	(680	)	$	(329	)	$	(1,009	)
June 30, 2014		(29	)		(141	)		(170	)

33-31-

Losses on Derivative Instruments - Attributed to Current Period (Non-GAAP)
(in thousands)
				Junior
	Repurchase			Subordinated
Three Months Ended	Agreements			Debt			Total
Consolidated
June 30, 2015	$	(9	)	$	(64	)	$	(73	)
March 31, 2015		(1	)		(54	)		(55	)
December 31, 2014		(145	)		(136	)		(281	)
September 30, 2014		(24	)		(141	)		(165	)
June 30, 2014		(3	)		(127	)		(130	)
March 31, 2014		(136	)		(109	)		(245	)
Bimini Capital Only
June 30, 2015	$	(9	)	$	(64	)	$	(73	)
March 31, 2015		(1	)		(54	)		(55	)
December 31, 2014		-			(136	)		(136	)
September 30, 2014		-			(141	)		(141	)
June 30, 2014		-			(127	)		(127	)
March 31, 2014		(106	)		(109	)		(215	)

Gains (Losses) on Derivative Instruments - Attributed to Current Period (Non-GAAP)
(in thousands)
Junior
Repurchase Subordinated
Agreements Debt Total
Three Months Ended
June 30, 2014 $ (3 ) $ (127 ) $ (130 )
March 31, 2014 (136 ) (109 ) (245 )
December 31, 2013 (153 ) (94 ) (247 )
September 30, 2013 (121 ) (79 ) (200 )
June 30, 2013 (79 ) (105 ) (184 )
March 31, 2013 (121 ) (101 ) (222 )
Six Months Ended
June 30, 2014 $ (139 ) $ (236 ) $ (375 )
June 30, 2013 (200 ) (206 ) (406 )


(in thousands)
				Junior
	Repurchase			Subordinated
Six Months Ended	Agreements			Debt			Total
Consolidated
June 30, 2015	$	(10	)	$	(118	)	$	(128	)
June 30, 2014		(139	)		(236	)		(375	)
Bimini Capital Only
June 30, 2015	$	(10	)	$	(118	)	$	(128	)
June 30, 2014		(106	)		(236	)		(342	)

Gains (Losses) on Derivative Instruments - Attributed to Future Periods (Non-GAAP)	Gains (Losses) on Derivative Instruments - Attributed to Future Periods (Non-GAAP)										Gains (Losses) on Derivative Instruments - Attributed to Future Periods (Non-GAAP)
(in thousands)
					Junior										Junior
		Repurchase			Subordinated							Repurchase			Subordinated
		Agreements			Debt			Total
Three Months Ended												Agreements			Debt			Total
Consolidated
June 30, 2015												$	16		$	63		$	79
March 31, 2015													(686	)		(274	)		(960	)
December 31, 2014													(9,574	)		(151	)		(9,725	)
September 30, 2014													3,281			290			3,571
June 30, 2014		$	(5,754	)	$	10		$	(5,744	)			(5,754	)		10			(5,744	)
March 31, 2014			(1,557	)		85			(1,472	)			(1,557	)		85			(1,472	)
December 31, 2013			882			56			938
September 30, 2013			(2,162	)		(88	)		(2,250	)
June 30, 2013			6,920			335			7,255
March 31, 2013			(360	)		107			(253	)
Six Months Ended
Bimini Capital Only
June 30, 2015												$	16		$	63		$	79
March 31, 2015													(686	)		(274	)		(960	)
December 31, 2014													(158	)		(151	)		(309	)
September 30, 2014													199			290			489
June 30, 2014		$	(7,311	)	$	95		$	(7,216	)			(29	)		10			(19	)
June 30, 2013			6,560			442			7,002
March 31, 2014													106			85			191

-32-

(in thousands)
				Junior
	Repurchase			Subordinated
Six Months Ended	Agreements			Debt			Total
Consolidated
June 30, 2015	$	(670	)	$	(211	)	$	(881	)
June 30, 2014		(7,311	)		95			(7,216	)
Bimini Capital Only
June 30, 2015	$	(670	)	$	(211	)	$	(881	)
June 30, 2014		77			95			172

Economic Net Portfolio Interest Income	Economic Net Portfolio Interest Income													Economic Net Portfolio Interest Income
(in thousands)	(in thousands)													(in thousands)
				Interest Expense on Repurchase Agreements						Net Portfolio							Interest Expense on Repurchase Agreements							Net Portfolio
						Effect of				Interest Income									Effect of					Interest Income
		Interest		GAAP		Non-GAAP		Economic		GAAP		Economic			Interest		GAAP		Non-GAAP			Economic		GAAP		Economic
		Income		Basis		Hedges(1)		Basis(2)		Basis		Basis(3)
Three Months Ended	Three Months Ended														Income		Basis		Hedges(1)			Basis(2)		Basis		Basis(3)
Consolidated														Consolidated
June 30, 2015															$	1,074	$	98	$	(9	)	$	107	$	976	$	967
March 31, 2015																1,207		100		(1	)		101		1,107		1,106
December 31, 2014																13,168		1,213		(145	)		1,358		11,955		11,810
September 30, 2014																10,035		886		(24	)		910		9,149		9,125
June 30, 2014		$	7,119	$	728	$	3	$	731	$	6,391	$	6,388			7,119		728		(3	)		731		6,391		6,388
March 31, 2014			4,116		454		136		590		3,662		3,526			4,116		454		(136	)		590		3,662		3,526
December 31, 2013			3,021		343		153		496		2,678		2,525
September 30, 2013			2,768		329		121		450		2,439		2,318
June 30, 2013			2,480		361		79		440		2,119		2,040
March 31, 2013			1,526		247		121		368		1,279		1,158
Six Months Ended
Bimini Capital Only														Bimini Capital Only
June 30, 2015															$	1,074	$	98	$	(9	)	$	107	$	976	$	967
March 31, 2015																1,207		100		(1	)		101		1,107		1,106
December 31, 2014																1,022		87		1			86		935		936
September 30, 2014																749		67		-			67		682		682
June 30, 2014		$	11,235	$	1,182	$	139	$	1,321	$	10,053	$	9,914			530		52		(1	)		53		478		477
June 30, 2013			4,006		608		200		808		3,398		3,198
March 31, 2014																333		43		(106	)		149		290		184


(in thousands)
			Interest Expense on Repurchase Agreements							Net Portfolio
					Effect of					Interest Income
	Interest		GAAP		Non-GAAP			Economic		GAAP		Economic
Six Months Ended	Income		Basis		Hedges(1)			Basis(2)		Basis		Basis(3)
Consolidated
June 30, 2015	$	2,281	$	198	$	(10	)	$	208	$	2,083	$	2,073
June 30, 2014		11,235		1,182		(139	)		1,321		10,053		9,914
Bimini Capital Only
June 30, 2015	$	2,281	$	198	$	(10	)	$	208	$	2,083	$	2,073
June 30, 2014		863		95		(107	)		202		768		661

(1)	Reflects the effect of derivative instrument hedges for only the period presented.

(2)	Calculated by ~~subtracting~~adding the effect of derivative instrument hedges attributed to the period presented from GAAP interest expense.

(3)	Calculated by ~~adding~~subtracting the effect of derivative instrument hedges attributed to the period presented to GAAP net portfolio interest income.

34-33-

Economic Net Interest Income
(in thousands)
Net Portfolio Interest Expense on Junior Subordinated Notes
Interest Income Effect of Net Interest Income
GAAP Economic GAAP Non-GAAP Economic GAAP Economic
Basis
Basis(1)
Basis
Hedges(2)

Basis(3)
Basis
Basis(4)

Three Months Ended
June 30, 2014 $ 6,391 $ 6,388 $ 245 $ (127 ) $ 372 $ 6,146 $ 6,016
March 31, 2014 3,662 3,526 243 (109 ) 352 3,419 3,174
December 31, 2013 2,678 2,525 249 (94 ) 343 2,429 2,182
September 30, 2013 2,439 2,318 251 (80 ) 331 2,188 1,987
June 30, 2013 2,119 2,040 248 (105 ) 353 1,871 1,687
March 31, 2013 1,279 1,158 247 (101 ) 348 1,032 810
Six Months Ended
June 30, 2014 $ 10,053 $ 9,914 $ 488 $ (236 ) $ 724 $ 9,565 $ 9,190
June 30, 2013 3,398 3,198 495 (206 ) 701 2,903 2,497

Economic Net Interest Income
(in thousands)
	Net Portfolio				Interest Expense on Junior Subordinated Notes
	Interest Income						Effect of					Net Interest Income
	GAAP		Economic		GAAP		Non-GAAP			Economic		GAAP		Economic
Three Months Ended	Basis		Basis(1)		Basis		Hedges(2)			Basis(3)		Basis		Basis(4)
Consolidated
June 30, 2015	$	976	$	967	$	248	$	(64	)	$	312	$	728	$	655
March 31, 2015		1,107		1,106		243		(54	)		297		864		809
December 31, 2014		11,955		11,810		248		(136	)		384		11,707		11,426
September 30, 2014		9,149		9,125		248		(141	)		389		8,901		8,736
June 30, 2014		6,391		6,388		245		(127	)		372		6,146		6,016
March 31, 2014		3,662		3,526		243		(109	)		352		3,419		3,174
Bimini Capital Only
June 30, 2015	$	976	$	967	$	248	$	(64	)	$	312	$	728	$	655
March 31, 2015		1,107		1,106		243		(54	)		297		864		809
December 31, 2014		935		935		248		(136	)		384		687		551
September 30, 2014		682		682		248		(141	)		389		434		293
June 30, 2014		478		478		245		(127	)		372		233		106
March 31, 2014		290		184		243		(109	)		352		47		(168	)

(in thousands)
	Net Portfolio				Interest Expense on Junior Subordinated Notes
	Interest Income						Effect of					Net Interest Income
	GAAP		Economic		GAAP		Non-GAAP			Economic		GAAP		Economic
Six Months Ended	Basis		Basis(1)		Basis		Hedges(2)			Basis(3)		Basis		Basis(4)
Consolidated
June 30, 2015	$	2,083	$	2,073	$	491	$	(118	)	$	609	$	1,592	$	1,464
June 30, 2014		10,053		9,914		488		(236	)		724		9,565		9,190
Bimini Capital Only
June 30, 2015	$	2,083	$	2,073	$	491	$	(118	)	$	609	$	1,592	$	1,464
June 30, 2014		768		662		488		(236	)		724		280		(62	)

(1)	Calculated by adding the effect of derivative instrument hedges attributed to the period presented to GAAP net portfolio interest income.

(2)	Reflects the effect of derivative instrument hedges for only the period presented.

(3)	Calculated by subtracting the effect of derivative instrument hedges attributed to the period presented from GAAP interest expense.

(4)	Calculated by ~~adding~~subtracting the effect of derivative instrument hedges attributed to the period presented tofrom GAAP net interest income.

Net Portfolio Income

During the six months ended June 30, 2015, the Company generated $2.1 million of net portfolio interest income, consisting of $2.3 million of interest income from MBS assets offset by $0.2 million of interest expense on repurchase liabilities. For the comparable period ended June 30, 2014, the Company generated $10.1 million of net portfolio interest income, consisting of $11.2 million of interest income from MBS assets offset by $1.2 million of interest expense on repurchase liabilities. ~~For the comparable period ended June 30, 2013, the Company generated $3.4~~The $8.9 million ~~of net portfolio interest income, consisting of $4.0 million of interest income from MBS assets offset by $0.6 million of interest expense on repurchase liabilities. The $7.2 million increase~~decrease in interest income and ~~$0.6~~$1 million ~~increase~~decrease in interest expense for the six months ended June 30, ~~2014~~2015 primarily reflects the ~~deployment~~deconsolidation of Orchid’s assets and liabilities from the ~~proceeds from Orchid’s~~balance sheet beginning December 31, 2014 ~~common stock offerings into~~and the ~~MBS portfolio~~effect this had on ~~a leveraged basis.~~the Company’s consolidated statement of operations.

The Company’s economic interest expense on repurchase liabilities for the six months ended June 30, 2015 and 2014 ~~and 2013~~ was ~~$1.3~~$0.2 million and ~~$0.8~~$1.3 million, respectively, resulting in ~~$9.9~~$2.1 million and ~~$3.2~~$9.9 million of economic net portfolio interest income, respectively.

-34-

During the ~~six~~three months ended June 30, ~~2014, Bimini Capital~~2015, the Company generated ~~$0.8~~$1.0 million of net portfolio interest income, consisting of ~~$0.9~~$1.1 million of interest income from MBS assets offset by $0.1 million of interest expense on repurchase liabilities. For the comparable period ended June 30, 2013, Bimini Capital generated $0.1 million of net portfolio interest income, consisting of $0.2 million of interest income from MBS assets offset by $0.1 million of interest expense on repurchase liabilities.

~~During~~ the three months ended June 30, 2014, the Company generated $6.4 million of net portfolio interest income, consisting of $7.1 million of interest income from MBS assets offset by $0.7 million of interest expense on repurchase liabilities. For the three months ended June 30, 2013, the Company generated $2.1 million of net portfolio interest income, consisting of $2.5 million of interest income from MBS assets offset by $0.4 million of interest expense on repurchase liabilities. The deployment of the proceeds from Orchid’s ~~common stock offerings~~capital raising activities in 2014 on a leveraged basis, ~~was~~followed by the deconsolidation of Orchid as of December 31, 2014, were the main ~~driver~~reasons for the ~~increase~~decrease in both interest income and interest expense for the three months ended June 30, ~~2014~~2015 as compared to the same period in ~~2013.~~2014.

The Company’s economic interest expense on repurchase liabilities for the three months ended June 30, 2015 and 2014 ~~and 2013~~ was ~~$0.7~~$0.1 million and ~~$0.4~~$0.7 million, respectively, resulting in ~~$6.4~~$1.0 million and ~~$2.0~~$6.4 million of economic net portfolio interest income, respectively.

The discussion above and in the following sections related to the Company’s net portfolio income during the six and three months ended June 30, 2014 includes the activities of Orchid as a VIE. Orchid’s activities are not included for the six and three months June 30, 2015. During the six months ended June 30, 2015, Bimini Capital generated $2.1 million of net portfolio interest income, consisting of $2.3 million of interest income from MBS assets offset by $0.2 million of interest expense on repurchase liabilities. For the comparable period ended June 30, 2014, Bimini Capital generated $0.8 million of net portfolio interest income, consisting of $0.9 million of interest income from MBS assets offset by $0.1 million of interest expense on repurchase liabilities.

During the three months ended June 30, 2015, Bimini Capital generated $0.98 million of net portfolio interest income, consisting of $1.07 million of interest income from MBS assets offset by $0.10 million of interest expense on repurchase liabilities. For the three months ended June 30, 2014, Bimini Capital generated $0.48 million of net portfolio interest income, consisting of $0.53 million of interest income from MBS assets offset by $0.05 million of interest expense on repurchase liabilities. For the three months ended June 30, 2013, Bimini Capital generated $0.01 million of net portfolio interest income, consisting of $0.05 million of interest income from MBS assets offset by $0.04 million of interest expense on repurchase liabilities.

The tables below provide consolidated information on our portfolio average balances, interest income, yield on assets, average repurchase agreement balances, interest expense, cost of funds, net interest income and net interest rate spread for the six months ended June 30, ~~2014~~2015 and ~~2013~~2014 and each quarter in ~~2014~~2015 and ~~2013~~2014 on both a GAAP and economic basis.

($ in thousands)
	Average				Yield on			Average		Interest Expense				Average Cost of Funds
	MBS		Interest		Average			Repurchase		GAAP		Economic		GAAP			Economic
Three Months Ended	Held(1)		Income(2)		MBS			Agreements(1)		Basis		Basis(2)		Basis			Basis(3)
Consolidated
June 30, 2015	$	111,674	$	1,074		3.85	%	$	103,750	$	98	$	107		0.38	%		0.41	%
March 31, 2015		116,709		1,207		4.14	%		108,129		100		101		0.37	%		0.37	%
December 31, 2014		1,466,048		13,168		3.59	%		1,442,905		1,213		1,358		0.34	%		0.38	%
September 30, 2014		1,108,367		10,035		3.62	%		1,096,611		886		910		0.32	%		0.33	%
June 30, 2014		882,591		7,119		3.23	%		783,323		728		731		0.37	%		0.37	%
March 31, 2014		601,441		4,116		2.74	%		533,008		454		590		0.34	%		0.44	%
Bimini Capital Only
June 30, 2015	$	111,674	$	1,074		3.85	%	$	103,750	$	98	$	107		0.38	%		0.41	%
March 31, 2015		116,709		1,207		4.14	%		108,129		100		101		0.37	%		0.37	%
December 31, 2014		103,696		1,022		3.94	%		96,591		87		86		0.36	%		0.36	%
September 30, 2014		82,599		749		3.63	%		76,772		67		67		0.35	%		0.35	%
June 30, 2014		70,710		530		3.00	%		65,849		53		53		0.32	%		0.32	%
March 31, 2014		51,951		333		2.57	%		48,106		43		149		0.36	%		1.24	%

-35-

($ in thousands)
Average Yield on
MBS Average Average Interest Expense Average Cost of Funds
Securities Interest MBS Repurchase GAAP Economic GAAP Economic

Held(1)

Income(2)
Securities
Agreements(1)
Basis
Basis(2)
Basis
Basis(3)

Three Months Ended
June 30, 2014 $ 882,591 $ 7,119 3.23 % $ 783,323 $ 728 $ 731 0.37 % 0.37 %
March 31, 2014 601,441 4,116 2.74 % 533,008 454 590 0.34 % 0.44 %
December 31, 2013 380,341 3,021 3.18 % 345,068 343 496 0.40 % 0.57 %
September 30, 2013 375,950 2,768 2.94 % 341,468 329 450 0.39 % 0.53 %
June 30, 2013 392,429 2,480 2.53 % 350,714 361 440 0.41 % 0.50 %
March 31, 2013 286,226 1,526 2.13 % 252,763 247 368 0.39 % 0.58 %
Six Months Ended
June 30, 2014 $ 742,016 $ 11,235 3.03 % $ 658,165 $ 1,182 $ 1,321 0.36 % 0.40 %
June 30, 2013 339,327 4,006 2.36 % 301,738 608 808 0.40 % 0.54 %

($ in thousands)
	Average				Yield on			Average		Interest Expense				Average Cost of Funds
	MBS		Interest		Average			Repurchase		GAAP		Economic		GAAP			Economic
Six Months Ended	Held(1)		Income(2)		MBS			Agreements(1)		Basis		Basis(2)		Basis			Basis(3)
Consolidated
June 30, 2015	$	114,192	$	2,281		4.00	%	$	105,939	$	198	$	208		0.37	%		0.39	%
June 30, 2014		742,016		11,235		3.03	%		658,165		1,182		1,321		0.36	%		0.40	%
Bimini Capital Only
June 30, 2015	$	114,192	$	2,281		4.00	%	$	105,939	$	198	$	208		0.37	%		0.39	%
June 30, 2014		61,330		863		2.82	%		56,978		96		202		0.34	%		0.71	%

($ in thousands)
Net Portfolio Net Portfolio
Interest Income Interest Spread
GAAP Economic GAAP Economic
Basis
Basis(2)
Basis
Basis(4)

Three Months Ended
June 30, 2014 $ 6,391 $ 6,388 2.86 % 2.86 %
March 31, 2014 3,662 3,526 2.40 % 2.30 %
December 31, 2013 2,678 2,525 2.78 % 2.61 %
September 30, 2013 2,438 2,317 2.55 % 2.41 %
June 30, 2013 2,119 2,040 2.12 % 2.03 %
March 31, 2013 1,279 1,158 1.74 % 1.55 %
Six Months Ended
June 30, 2014 $ 10,053 $ 9,914 2.67 % 2.63 %
June 30, 2013 3,398 3,198 1.96 % 1.82 %

($ in thousands)
	Net Portfolio				Net Portfolio
	Interest Income				Interest Spread
	GAAP		Economic		GAAP			Economic
Three Months Ended	Basis		Basis(2)		Basis			Basis(4)
Consolidated
June 30, 2015	$	976	$	967		3.47	%		3.44	%
March 31, 2015		1,107		1,106		3.77	%		3.77	%
December 31, 2014		11,955		11,810		3.25	%		3.21	%
September 30, 2014		9,149		9,125		3.30	%		3.29	%
June 30, 2014		6,391		6,388		2.86	%		2.86	%
March 31, 2014		3,662		3,526		2.40	%		2.30	%
Bimini Capital Only
June 30, 2015	$	976	$	967		3.47	%		3.44	%
March 31, 2015		1,107		1,106		3.77	%		3.77	%
December 31, 2014		935		935		3.58	%		3.58	%
September 30, 2014		682		682		3.28	%		3.28	%
June 30, 2014		478		478		2.68	%		2.68	%
March 31, 2014		290		184		2.21	%		1.33	%


($ in thousands)
	Net Portfolio				Net Portfolio
	Interest Income				Interest Spread
	GAAP		Economic		GAAP			Economic
Six Months Ended	Basis		Basis(2)		Basis			Basis(4)
Consolidated
June 30, 2015	$	2,083	$	2,073		3.63	%		3.61	%
June 30, 2014		10,053		9,914		2.67	%		2.63	%
Bimini Capital Only
June 30, 2015	$	2,083	$	2,073		3.63	%		3.61	%
June 30, 2014		768		662		2.48	%		2.11	%

(1)

Portfolio yields and costs of borrowings presented in the ~~table~~tables above and the tables on pages ~~37 and 39~~37-40 are calculated based on the average balances of the underlying investment portfolio/repurchase agreement balances and are annualized for the periods presented. Average balances for quarterly periods are calculated using two data points, the beginning and ending balances.

(2)	Economic interest expense and economic net interest income presented in the tables above and the tables on page 39 include the effect of derivative instrument hedges for only the period presented.

(3)	Represents interest cost of our borrowings and the effect of derivative instrument hedges attributed to the period related to hedging activities divided by Average MBS Held.

(4)	Economic Net Interest Spread is calculated by subtracting Average Economic Cost of Funds from Yield on Average ~~MBS Securities.~~MBS.

36-36-

Interest Income and Average Earning Asset Yield

Interest income for the Company was $2.3 million for the six months ended June 30, 2015 and $11.2 million for the six months ended June 30, ~~2014~~2014. Average MBS holdings were $114.2 million and ~~$4.0~~$742.0 million for the six months ended June 30, ~~2013. Average MBS holdings were $742.0 million~~2015 and ~~$339.3 million for the six months ended June 30,~~ 2014, ~~and 2013,~~ respectively. The ~~$7.2~~$8.9 million ~~increase~~decrease in interest income was due to a ~~$402.7~~$627.8 million ~~increase~~decrease in average MBS holdings, combined with a 6797 basis point increase in yields. The ~~increase~~decrease in average MBS during the six months ended June 30, ~~2014~~2015 reflects the ~~deployment~~deconsolidation of Orchid’s assets as of December 31, 2014.

Interest income for the Company was $1.1 million for the three months ended June 30, 2015 and $7.1 million for the three months ended June 30, 2014. Average MBS holdings were $111.7 million and $882.6 million for the three months ended June 30, 2015 and 2014, respectively. The $6.0 million decrease in interest income was due to a $770.9 million decrease in average MBS holdings as a result of the ~~proceeds~~deconsolidation of ~~Orchid’s common stock offerings during~~Orchid as of December 31, 2014, oncombined with a ~~leveraged basis.~~62 basis point increase in yields.

Interest income for Bimini Capital was $2.3 million for the six months ended June 30, 2015 and $0.9 million for the six months ended June 30, ~~2014~~2014. Average MBS holdings were $114.2 million and ~~$0.2~~$61.3 million for the six months ended June 30, ~~2013. Average MBS holdings were $61.3 million~~2015 and ~~$45.6 million for the six months ended June 30,~~ 2014, ~~and 2013,~~ respectively. The ~~$0.7~~$1.4 million increase in interest income was due to a combination of a ~~210~~118 basis point increase in yields and a ~~$15.8~~$52.9 million increase in average MBS holdings.

Interest income for ~~the Company~~Bimini Capital was ~~$7.1~~$1.07 million for the three months ended June 30, ~~2014~~2015 and $2.5 million for the three months ended June 30, 2013. Average MBS holdings were $882.6 million and $392.4 million for the three months ended June 30, 2014 and 2013, respectively. The $4.6 million increase in interest income was due to a $490.2 million increase in average MBS holdings, combined with a 70 basis point increase in yields. The increase in average MBS during the three months ended June 30, 2014 reflects the deployment of the proceeds of Orchid’s 2014 common stock offerings, on a leveraged basis.

~~Interest income for Bimini Capital was~~ $0.53 million for the three months ended June 30, ~~2014~~2014. Average MBS holdings were $111.7 million and ~~$0.05~~$70.7 million for the three months ended June 30, ~~2013. Average MBS holdings were $70.7 million~~2015 and ~~$42.7 million for the three months ended June 30,~~ 2014, ~~and 2013,~~ respectively. The ~~$0.48~~$0.54 million increase in interest income was due to a combination of a ~~252~~85 basis point increase in yields and a ~~$28.0~~$41.0 million increase in average MBS holdings.

The ~~table~~tables below ~~presents~~present the consolidated average portfolio size, income and yields of our respective sub-portfolios, consisting of structured MBS and pass-through MBS (“PT MBS”). for the six months ended June 30, 2015 and 2014 and for each quarter during 2015 and 2014.

($ in thousands)
	Average MBS Held						Interest Income							Realized Yield on Average MBS
	PT		Structured				PT		Structured					PT			Structured
Three Months Ended	MBS		MBS		Total		MBS		MBS			Total		MBS			MBS			Total
Consolidated
June 30, 2015	$	105,368	$	6,306	$	111,674	$	1,031	$	43		$	1,074		3.91	%		2.75	%		3.85	%
March 31, 2015		111,035		5,674		116,709		1,090		117			1,207		3.93	%		8.25	%		4.14	%
December 31, 2014		1,397,518		68,530		1,466,048		13,719		(551	)		13,168		3.93	%		(3.21	)%		3.59	%
September 30, 2014		1,048,424		59,943		1,108,367		10,266		(231	)		10,035		3.92	%		(1.55	)%		3.62	%
June 30, 2014		833,497		49,094		882,591		8,303		(1,184	)		7,119		3.98	%		(9.64	)%		3.23	%
March 31, 2014		564,540		36,901		601,441		4,852		(736	)		4,116		3.44	%		(7.97	)%		2.74	%
Bimini Capital Only
June 30, 2015	$	105,368	$	6,306	$	111,674	$	1,031	$	43		$	1,074		3.91	%		2.75	%		3.85	%
March 31, 2015		111,035		5,674		116,709		1,090		117			1,207		3.93	%		8.25	%		4.14	%
December 31, 2014		98,552		5,144		103,696		957		65			1,022		3.89	%		5.01	%		3.94	%
September 30, 2014		79,390		3,209		82,599		784		(35	)		749		3.95	%		(4.36	)%		3.63	%
June 30, 2014		69,298		1,412		70,710		629		(99	)		530		3.63	%		(27.87	)%		3.00	%
March 31, 2014		50,315		1,636		51,951		450		(117	)		333		3.58	%		(28.49	)%		2.57	%

-37-

($ in thousands)
Average MBS Held Interest Income Realized Yield on Average MBS
PT Structured PT Structured PT Structured
MBS MBS Total MBS MBS Total MBS MBS Total
Three Months Ended
June 30, 2014 $ 833,497 $ 49,094 $ 882,591 $ 8,303 $ (1,184 ) $ 7,119 3.98 % (9.64 )% 3.23 %
March 31, 2014 564,540 36,901 601,441 4,852 (736 ) 4,116 3.44 % (7.97 )% 2.74 %
December 31, 2013 355,868 24,473 380,341 3,011 10 3,021 3.38 % 0.16 % 3.18 %
September 30, 2013 352,252 23,698 375,950 2,704 64 2,768 3.07 % 1.07 % 2.94 %
June 30, 2013 366,862 25,567 392,429 2,805 (325 ) 2,480 3.06 % (5.09 )% 2.53 %
March 31, 2013 268,024 18,202 286,226 1,714 (188 ) 1,526 2.56 % (4.13 )% 2.13 %
Six Months Ended
June 30, 2014 $ 699,018 $ 42,998 $ 742,016 $ 13,155 $ (1,920 ) $ 11,235 3.76 % (8.93 )% 3.03 %
June 30, 2013 317,443 21,884 339,327 4,519 (513 ) 4,006 2.85 % (4.69 )% 2.36 %

($ in thousands)
	Average MBS Held						Interest Income							Realized Yield on Average MBS
	PT		Structured				PT		Structured					PT			Structured
Six Months Ended	MBS		MBS		Total		MBS		MBS			Total		MBS			MBS			Total
Consolidated
June 30, 2015	$	108,202	$	5,990	$	114,192	$	2,121	$	160		$	2,281		3.92	%		5.36	%		4.00	%
June 30, 2014		699,018		42,998		742,016		13,155		(1,920	)		11,235		3.76	%		(8.93	)%		3.03	%
Bimini Capital Only
June 30, 2015	$	108,202	$	5,990	$	114,192	$	2,121	$	160		$	2,281		3.92	%		5.36	%		4.00	%
June 30, 2014		59,806		1,524		61,330		1,079		(216	)		863		3.61	%		(28.21	)%		2.82	%

Interest Expense on Repurchase Agreements and the Cost of Funds

Average outstanding repurchase agreements for the Company were ~~$658.2~~$105.9 million and ~~$301.7~~$658.2 million, generating interest expense of ~~$1.2~~$0.2 million and ~~$0.6~~$1.2 million for the six months ended June 30, ~~2014~~2015 and ~~2013,~~2014, respectively. Our average cost of funds was ~~0.36%~~0.37% and ~~0.40%~~0.36% for six months ended June 30, ~~2014~~2015 and ~~2013,~~2014, respectively. There was a 41 basis point ~~decrease~~increase in the average cost of funds and a ~~$356.4~~$552.2 million ~~increase~~decrease in average outstanding repurchase agreements during the six months ended June 30, ~~2014~~2015 as compared to the six months ended June 30, ~~2013.~~2014. The ~~increase~~decrease in average outstanding repurchase agreements, and the corresponding ~~increase~~decrease in interest expense, reflects the ~~leveraging by~~deconsolidation of Orchid as of ~~the proceeds from its common stock offerings during~~December 31, 2014.

The Company’s economic interest expense was ~~$1.3~~$0.2 million and ~~$0.8~~$1.3 million for the six months ended June 30, ~~2014~~2015 and ~~2013,~~2014, respectively. There was a 141 basis point decrease in the average economic cost of funds to 0.39% for the six months ended June 30, 2015 from 0.40% for the six months ended June 30, ~~2014 from 0.54% for the six months ended June 30, 2013.~~2014. The ~~absolute~~ increase in economic interest expense was primarily due to the increase in average outstanding repurchase agreements during the six months ended June 30, ~~2014, while~~2015, partially offset by the decrease in ~~economic interest expense in percentage terms was primarily due to~~ the ~~effect of derivative instruments.~~

Average outstanding repurchase agreements for Bimini Capital were $57.0 million and total interest expense was $0.1 million for the six months ended June 30, 2014. During the six months ended June 30, 2013, average outstanding repurchase agreements for Bimini Capital were $40.3 million and total interest expense was $0.1 million. Bimini Capital’s average cost of funds was 0.34% and 0.42% for the six months ended June 30, 2014 and 2013, respectively.

~~Bimini Capital’s economic interest expense was $0.2 million and $0.2 million for the six months ended June 30, 2014 and 2013, respectively. There was a 36 basis point decrease in the average~~ economic cost of funds ~~to 0.71% for the six months ended June 30, 2014 from 1.07% for the six months ended June 30, 2013.~~rate.

Average outstanding repurchase agreements for the Company were ~~$783.3~~$103.7 million and ~~$350.7~~$783.3 million, generating interest expense of ~~$0.7~~$0.1 million and ~~$0.4~~$0.7 million for the three months ended June 30, ~~2014~~2015 and ~~2013,~~2014, respectively. Our average cost of funds was ~~0.37%~~0.38% and ~~0.41%~~0.37% for three months ended June 30, ~~2014~~2015 and ~~2013,~~2014, respectively. There was a 41 basis point ~~decrease~~increase in the average cost of funds and a ~~$432.6~~$679.6 million ~~increase~~decrease in average outstanding repurchase agreements during the three months ended June 30, ~~2014~~2015 as compared to the three months ended June 30, 2013. The increase in average outstanding repurchase agreements, and the corresponding increase in interest expense, reflects the leveraging by Orchid of the proceeds from its common stock offerings during 2014.

The Company’s economic interest expense was ~~$0.7~~$0.1 million and ~~$0.4~~$0.7 million for the three months ended June 30, ~~2014~~2015 and ~~2013,~~2014, respectively. There was a 134 basis point ~~decrease~~increase in the average economic cost of funds to 0.41% for the three months ended June 30, 2015 from 0.37% for the three months ended June 30, ~~2014 from 0.50% for the three months ended June 30, 2013.~~2014. The ~~absolute~~ increase in economic interest expense was primarily due to the increase in average outstanding repurchase agreements during the three months ended June 30, ~~2014, while~~2015, partially offset by the decrease in the economic cost of funds rate.

Average outstanding repurchase agreements for Bimini Capital were $105.9 million and total interest expense was $0.2 million for the six months ended June 30, 2015. During the six months ended June 30, 2014, average outstanding repurchase agreements for Bimini Capital were $57.0 million and total interest expense was $0.1 million. Bimini Capital’s average cost of funds was 0.37% and 0.34% for the six months ended June 30, 2015 and 2014, respectively.

Bimini Capital’s economic interest expense was $0.2 million for each of the six months ended June 30, 2015 and 2014. There was a 32 basis point decrease in ~~percentage terms was primarily due~~the average economic cost of funds to 0.39% for the ~~effect of derivative instruments.~~six months ended June 30, 2015 from 0.71% for the six months ended June 30, 2014.

-38-

Average outstanding repurchase agreements for Bimini Capital were $103.7 million and total interest expense was $0.10 million for the three months ended June 30, 2015. During the three months ended June 30, 2014, average outstanding repurchase agreements for Bimini Capital were $65.8 million and total interest expense was $0.05 million for the three months ended June 30, 2014. During the three months ended June 30, 2013, average outstanding repurchase agreements for Bimini Capital were $38.1 million and total interest expense was $0.04 million. Bimini Capital’s average cost of funds was ~~0.32%~~0.38% and ~~0.41%~~0.32% for the three months ended June 30, ~~2014~~2015 and ~~2013,~~2014, respectively.

Bimini Capital’s economic interest expense was ~~$0.05~~$0.11 million and ~~$0.11~~$0.05 million for the three months ended June 30, ~~2014~~2015 and ~~2013,~~2014, respectively. There was a 889 basis point ~~decrease~~increase in the average economic cost of funds to 0.41% for the three months ended June 30, 2015 from 0.32% for the three months ended June 30, ~~2014 from 1.20% for the three months ended June 30, 2013.~~2014.

Because all of our repurchase agreements are short-term, changes in market rates directly affect our interest expense. The Company’s average cost of funds calculated on a GAAP basis was 2220 basis points above the average one-month LIBOR and 42 basis points below the average six-month LIBOR for the quarter ended June 30, 2015. The Company’s average economic cost of funds was 23 basis points above the average one-month LIBOR and 1 basis point above the average six-month LIBOR for the quarter ended June 30, ~~2014. The Company’s average economic cost of funds was 22 basis points above the average one-month LIBOR and 4 basis points above the average six-month LIBOR for the quarter ended June 30, 2014.~~2015. The average term to maturity of the outstanding repurchase agreements increased from 1514 days at December 31, ~~2013~~2014 to 2720 days at June 30, ~~2014.~~2015.

The tables below present the consolidated average outstanding balances under our repurchase agreements, interest expense and average economic cost of funds, and average one-month and six-month LIBOR rates for the six months ended June 30, ~~2014~~2015 and ~~2013~~2014 and each quarter in ~~2014~~2015 and ~~2013~~2014 on both a GAAP and economic basis.

($ in thousands)
	Average
	Balance of		Interest Expense				Average Cost of Funds
	Repurchase		GAAP		Economic		GAAP			Economic
Three Months Ended	Agreements		Basis		Basis		Basis			Basis
Consolidated
June 30, 2015	$	103,750	$	98	$	107		0.38	%		0.41	%
March 31, 2015		108,129		100		101		0.37	%		0.37	%
December 31, 2014		1,442,905		1,213		1,358		0.34	%		0.38	%
September 30, 2014		1,096,611		886		910		0.32	%		0.33	%
June 30, 2014		783,323		728		731		0.37	%		0.37	%
March 31, 2014		533,008		454		590		0.34	%		0.44	%
Bimini Capital Only
June 30, 2015	$	103,750	$	98	$	107		0.38	%		0.41	%
March 31, 2015		108,129		100		101		0.37	%		0.37	%
December 31, 2014		96,591		87		86		0.36	%		0.36	%
September 30, 2014		76,772		67		67		0.35	%		0.35	%
June 30, 2014		65,849		53		53		0.32	%		0.32	%
March 31, 2014		48,106		43		149		0.36	%		1.24	%


($ in thousands)
	Average
	Balance of		Interest Expense				Average Cost of Funds
	Repurchase		GAAP		Economic		GAAP			Economic
Six Months Ended	Agreements		Basis		Basis		Basis			Basis
Consolidated
June 30, 2015	$	105,939	$	198	$	208		0.37	%		0.39	%
June 30, 2014		658,165		1,182		1,321		0.36	%		0.40	%
Bimini Capital Only
June 30, 2015	$	105,939	$	198	$	208		0.37	%		0.39	%
June 30, 2014		56,978		96		202		0.34	%		0.71	%

-39-

($ in thousands)
Average
Balance of Interest Expense Average Cost of Funds
Repurchase GAAP Economic GAAP Economic
Agreements Basis Basis Basis Basis
Three Months Ended
June 30, 2014 $ 783,323 $ 728 $ 731 0.37 % 0.37 %
March 31, 2014 533,008 454 590 0.34 % 0.44 %
December 31, 2013 345,068 343 496 0.40 % 0.57 %
September 30, 2013 341,468 329 450 0.39 % 0.53 %
June 30, 2013 350,714 361 440 0.41 % 0.50 %
March 31, 2013 252,763 247 368 0.39 % 0.58 %
Six Months Ended
June 30, 2014 $ 658,165 $ 1,182 $ 1,321 0.36 % 0.40 %
June 30, 2013 301,738 608 808 0.40 % 0.54 %

							Average GAAP Cost of Funds						Average Economic Cost of Funds
							Relative to Average						Relative to Average
	Average LIBOR						One-Month			Six-Month			One-Month			Six-Month
Three Months Ended	One-Month			Six-Month			LIBOR			LIBOR			LIBOR			LIBOR
Consolidated
June 30, 2015		0.18	%		0.40	%		0.20	%		(0.02	)%		0.23	%		0.01	%
March 31, 2015		0.17	%		0.35	%		0.20	%		0.02	%		0.20	%		0.02	%
December 31, 2014		0.16	%		0.34	%		0.18	%		0.00	%		0.22	%		0.04	%
September 30, 2014		0.15	%		0.33	%		0.17	%		(0.01	)%		0.18	%		0.00	%
June 30, 2014		0.15	%		0.33	%		0.22	%		0.04	%		0.22	%		0.04	%
March 31, 2014		0.16	%		0.34	%		0.18	%		0.00	%		0.28	%		0.10	%
Bimini Capital Only
June 30, 2015		0.18	%		0.40	%		0.20	%		(0.02	)%		0.23	%		0.01	%
March 31, 2015		0.17	%		0.35	%		0.20	%		0.02	%		0.20	%		0.02	%
December 31, 2014		0.16	%		0.34	%		0.20	%		0.02	%		0.20	%		0.02	%
September 30, 2014		0.15	%		0.33	%		0.20	%		0.02	%		0.20	%		0.02	%
June 30, 2014		0.15	%		0.33	%		0.17	%		(0.01	)%		0.17	%		(0.01	)%
March 31, 2014		0.16	%		0.34	%		0.20	%		0.02	%		1.08	%		0.90	%

Average GAAP Cost of Funds Average Economic Cost of Funds
Relative to Average Relative to Average
Average LIBOR One-Month Six-Month One-Month Six-Month
One-Month Six-Month LIBOR LIBOR LIBOR LIBOR
Three Months Ended
June 30, 2014 0.15 % 0.33 % 0.22 % 0.04 % 0.22 % 0.04 %
March 31, 2014 0.16 % 0.34 % 0.18 % 0.00 % 0.28 % 0.10 %
December 31, 2013 0.17 % 0.36 % 0.23 % 0.04 % 0.40 % 0.21 %
September 30, 2013 0.19 % 0.40 % 0.20 % (0.01 )% 0.34 % 0.13 %
June 30, 2013 0.20 % 0.43 % 0.21 % (0.02 )% 0.30 % 0.07 %
March 31, 2013 0.21 % 0.48 % 0.18 % (0.09 )% 0.37 % 0.10 %
Six Months Ended
June 30, 2014 0.16 % 0.33 % 0.20 % 0.03 % 0.24 % 0.07 %
June 30, 2013 0.20 % 0.46 % 0.20 % (0.06 )% 0.34 % 0.08 %



							Average GAAP Cost of Funds						Average Economic Cost of Funds
							Relative to Average						Relative to Average
	Average LIBOR						One-Month			Six-Month			One-Month			Six-Month
Six Months Ended	One-Month			Six-Month			LIBOR			LIBOR			LIBOR			LIBOR
Consolidated
June 30, 2015		0.18	%		0.38	%		0.19	%		(0.01	)%		0.21	%		0.01	%
June 30, 2014		0.16	%		0.33	%		0.20	%		0.03	%		0.24	%		0.07	%
Bimini Capital Only
June 30, 2015		0.18	%		0.38	%		0.19	%		(0.01	)%		0.21	%		0.01	%
June 30, 2014		0.16	%		0.33	%		0.18	%		0.01	%		0.55	%		0.38	%

Junior Subordinated Notes

Interest expense on the Company’s junior subordinated debt securities was ~~$0.49~~$0.5 million for each of the six months ended June 30, ~~2014 compared to $0.50 million for the comparable period in 2013.~~2015 and 2014. The average rate of interest paid for the six months ended June 30, ~~2014~~2015 was ~~3.74%~~3.76% compared to ~~3.79%~~3.74% for the comparable period in ~~2013.~~2014.

Interest expense on the Company’s junior subordinated debt securities was ~~$0.25~~$0.2 million for each of the three ~~months~~month periods ended June 30, ~~2014 compared to $0.25 million for the comparable period in 2013.~~2015 and 2014. The average rate of interest paid for the three months ended June 30, ~~2014~~2015 was ~~3.73%~~3.77% compared to ~~3.78%~~3.73% for the comparable period in ~~2013.~~2014.

The junior subordinated debt securities pay interest at a floating rate. The rate is adjusted quarterly and set at a spread of 3.50% over the prevailing three-month LIBOR rate on the determination date. As of June 30, ~~2014,~~2015, the interest rate was ~~3.73%~~3.79%.

39-40-

Gains or Losses and Other Income

The table below presents the Company’s gains or losses and other income for the six and three months ended June 30, ~~2014~~2015 and ~~2013.~~2014.

(in thousands)
Six Months Ended June 30, Three Months Ended June 30,
2014 2013 Change 2014 2013 Change
Realized gains (losses) on sales of MBS $ 4,049 $ (874 ) $ 4,923 $ 2,980 $ (934 ) $ 3,914
Unrealized gains (losses) on MBS 11,266 (10,885 ) 22,151 9,698 (10,413 ) 20,111
Total gains (losses) on MBS 15,315 (11,759 ) 27,074 12,678 (11,347 ) 24,025
(Losses) gains on Eurodollar futures (6,306 ) 6,596 (12,902 ) (4,745 ) 7,072 (11,817 )
Gains on retained interests 2,447 1,755 692 2,253 (230 ) 2,483
Loss on payer swaptions (1,285 ) - (1,285 ) (1,129 ) - (1,129 )
Gains on release of loan loss reserves - 3,037 (3,037 ) - 3,037 (3,037 )

(in thousands)
	Six Months Ended June 30,									Three Months Ended June 30,
	2015			2014			Change			2015			2014			Change
Realized gains on sales of MBS	$	-		$	4,049		$	(4,049	)	$	-		$	2,980		$	(2,980	)
Unrealized (losses) gains on MBS		(197	)		11,266			(11,463	)		(1,027	)		9,698			(10,725	)
Total (losses) gains on MBS		(197	)		15,315			(15,512	)		(1,027	)		12,678			(13,705	)
(Losses) gains on Eurodollar futures		(1,009	)		(6,306	)		5,297			6			(4,745	)		4,751
Gains on retained interests		2,539			2,447			92			1,053			2,253			(1,200	)
Loss on payer swaption		-			(1,285	)		1,285			-			(1,129	)		1,129
Unrealized losses on Orchid Island Capital, Inc.		(1,806	)		-			(1,806	)		(1,993	)		-			(1,993	)
Orchid Island Capital, Inc. dividends		1,060			-			1,060			530			-			530
Mangement fees		1,869			-			1,869			1,014			-			1,014

We invest in MBS with the intent to earn net income from the realized yield on those assets over ~~their~~the related funding and hedging costs, and not for purposes of making short term gains from ~~sales.~~trading in these securities. However, we have sold, and may continue to sell, existing assets to acquire new assets, which our management believes might have higher risk-adjusted returns in light of current or anticipated interest rates, federal government programs or general economic conditions or to manage our balance sheet as part of our asset/liability management strategy. During the six months ended June 30, 2015, the Company did not dispose of any MBS. For the six and three months ended June 30, 2014, the Company received proceeds of $434.6 million and $279.5 million, respectively, from the sales of ~~MBS compared to $214.7 million and $146.5 million, for the six and three months ended June 30, 2013, respectively.~~MBS.

The ~~increase~~higher MBS trading activities in ~~sales volume reflects the repositioning of our portfolio following Orchid’s equity offerings in 2014. The net realized gains (losses) on MBS for~~ the six and three months ended June 30, 2014 reflects the repositioning of our portfolio following Orchid’s capital raising activities. The fair value adjustments on MBS for the six months ended June 30, 2015 and ~~2013~~2014 were the result of ~~sales executed to replace securities that no longer offered attractive risk adjusted returns with those that did. Gains (losses)~~changes in market conditions. Losses on Eurodollar futures contracts ~~are a result of lower (higher) short term and intermediate term rates and~~reflect the ~~resulting impact on implied forward rates~~declining LIBOR during the six ~~and three~~ months ended June 30, ~~2014~~2015 and ~~2013.~~2014. The table below presents historical interest rate data for each quarter end during ~~2014~~2015 and ~~2013.~~2014.

15 Year 30 Year Three
10 Year Fixed-Rate Fixed-Rate Month
Three Months Ended,
Treasury Rate(1)

Mortgage Rate(2)

Mortgage Rate(2)

Libor(3)

June 30, 2014 2.52 % 3.27 % 4.16 % 0.23 %
March 31, 2014 2.72 % 3.36 % 4.34 % 0.23 %
December 31, 2013 3.03 % 3.48 % 4.46 % 0.24 %
September 30, 2013 2.62 % 3.52 % 4.49 % 0.25 %
June 30, 2013 2.48 % 3.17 % 4.07 % 0.27 %
March 31, 2013 1.85 % 2.76 % 3.57 % 0.28 %

				15 Year			30 Year			Three
	10 Year			Fixed-Rate			Fixed-Rate			Month
Three Months Ended	Treasury Rate(1)			Mortgage Rate(2)			Mortgage Rate(2)			Libor(3)
June 30, 2015		2.34	%		3.19	%		3.98	%		0.28	%
March 31, 2015		1.93	%		3.04	%		3.77	%		0.27	%
December 31, 2014		2.17	%		3.13	%		3.86	%		0.25	%
September 30, 2014		2.51	%		3.31	%		4.16	%		0.23	%
June 30, 2014		2.52	%		3.27	%		4.16	%		0.23	%
March 31, 2014		2.72	%		3.36	%		4.34	%		0.23	%

(1)	Historical 10 Year Treasury Rates are obtained from quoted end of day prices on the ~~CBOE.~~Chicago Board Options Exchange.

(2)	Historical 30 Year and 15 Year Fixed Rate Mortgage Rates are obtained from Freddie Mac’s Primary Mortgage Market Survey.

(3)	Historical LIBOR are obtained from the Intercontinental Exchange Benchmark Administration Ltd.

The retained interests in securitizations represent the residual net interest spread remaining after payments on the notes issued through the securitization. Fluctuations in value of retained interests are primarily driven by projections of future interest rates (the forward LIBOR curve), the discount rate used to determine the present value of the residual cash flows and prepayment and loss estimates on the underlying mortgage loans. During the six and three months ended June 30, ~~2014,~~2015, the Company recorded gains on retained interests of ~~$2.4~~$2.5 million and ~~$2.3~~$1.1 million, respectively, compared to gains ~~(losses)~~ of ~~$1.8~~$2.4 million and ~~($0.2)~~$2.3 million, respectively, for the six and three months ended June 30, ~~2013.~~2014.

40-41-

Operating Expenses

For the six and three months ended June 30, ~~2014,~~2015, the Company’s total operating expenses were approximately ~~$3.6~~$6.3 million and ~~$2.3~~$1.5 million, respectively, compared to approximately ~~$5.6~~$3.6 million and ~~$1.3~~$2.3 million for the six and three months ended June 30, ~~2013, repsectively.~~2014, respectively. The table below presents a breakdown of operating expenses for the six and three months ended June 30, ~~2014~~2015 and ~~2013.~~2014.

(in thousands)
Six Months Ended June 30, Three Months Ended June 30,
2014 2013 Change 2014 2013 Change
Compensation and benefits $ 1,357 $ 853 $ 504 $ 911 $ 422 $ 489
Legal fees 624 263 361 445 176 269
Accounting, auditing and other professional fees 465 460 5 244 190 54
Directors’ fees and liability insurance 544 391 153 303 222 81
Direct REIT operating expenses 229 234 (5 ) 114 99 15
Other G&A expenses 391 342 49 236 174 62
Orchid Island Capital, Inc. IPO expenses(1)
- 3,042 (3,042 ) - 1 (1 )
$ 3,610 $ 5,585 $ (1,975 ) $ 2,253 $ 1,284 $ 969

~~(1)~~

Consists of underwriting, legal and other costs associated with the Orchid IPO, which was completed on February 20, 2013. Bimini Capital and Bimini Advisors acted as the sponsor of the offering by paying all such expenses.

(in thousands)
	Six Months Ended June 30,							Three Months Ended June 30,
	2015		2014		Change			2015		2014		Change
Compensation and benefits	$	1,263	$	1,357	$	(94	)	$	595	$	911	$	(316	)
Legal fees		713		624		89			536		445		91
Accounting, auditing and other professional fees		335		465		(130	)		177		244		(67	)
Directors’ fees and liability insurance		343		544		(201	)		175		303		(128	)
Direct REIT operating expenses		37		229		(192	)		18		114		(96	)
Settlement of litigation		3,500		-		3,500			-		-		-
Other G&A expenses		118		391		(273	)		33		236		(203	)
	$	6,309	$	3,610	$	2,699		$	1,534	$	2,253	$	(719	)

Financial Condition:

Mortgage-Backed Securities

As of June 30, ~~2014,~~2015, the Company’s MBS portfolio consisted of ~~$951.6~~$107.8 million of agency or government MBS at fair value and had a weighted average coupon of ~~4.17%~~4.32%. During the six months ended June 30, ~~2014,~~2015, the Company received principal repayments of ~~$28.8~~$10.9 million compared to ~~$21.0~~$28.8 million for the comparable period ended June 30, ~~2013.~~2014. The average prepayment speeds for the quarters ended June 30, 2015 and 2014 were 15.9% and ~~2013 were~~ 8.6% ~~and 19.5%~~, respectively.

The following table presents the constant prepayment rate (“CPR”) experienced on the Company’s structured and PT MBS sub-portfolios, on an annualized basis, for the quarterly periods ~~presented.~~presented (including the impact of Orchid for all periods presented prior to Orchid’s deconsolidation on December 31, 2014). CPR is a method of expressing the prepayment rate for a mortgage pool that assumes that a constant fraction of the remaining principal is prepaid each month or year. Specifically, the CPR in the chart below represents the three month prepayment rate of the securities in the respective asset category. Assets that were not owned for the entire ~~period~~quarter have been excluded from the calculation. The exclusion of certain assets during periods of high trading activity can create a very high, and often volatile, reliance on a small sample of underlying loans.The increase in prepayments during the three months ended June 30, 2015 was primarily due to the effects of lower residential mortgage rates in the previous quarter.

Structured
PT MBS MBS Total
Three Months Ended Portfolio (%) Portfolio (%) Portfolio (%)
June 30, 2014 4.1 17.0 8.6
March 31, 2014 3.9 16.0 9.8
December 31, 2013 5.1 19.2 11.0
September 30, 2013 7.1 30.1 15.1
June 30, 2013 7.2 33.0 19.5
March 31, 2013 12.7 32.6 23.9

			Structured
	PT MBS		MBS		Total
Three Months Ended	Portfolio (%)		Portfolio (%)		Portfolio (%)
June 30, 2015		16.2		15.3		15.9
March 31, 2015		9.6		12.3		10.5
December 31, 2014		4.3		15.0		8.1
September 30, 2014		7.9		18.5		12.3
June 30, 2014		4.1		17.0		8.6
March 31, 2014		3.9		16.0		9.8

41-42-

The following tables summarize certain characteristics of the ~~Company’s~~Bimini Capital’s PT MBS and structured MBS as of June 30, ~~2014~~2015 and December 31, ~~2013:~~2014:

($ in thousands)
					Weighted		Weighted
			Percentage		Average		Average	Weighted	Weighted
			of	Weighted	Maturity		Coupon	Average	Average
		Fair	Entire	Average	in	Longest	Reset in	Lifetime	Periodic
Asset Category		Value	Portfolio	Coupon	Months	Maturity	Months	Cap	Cap
June 30, 2015
Fixed Rate MBS	$	101,160	93.9%	4.29%	321	1-Dec-44	NA	NA	NA
Hybrid Adjustable Rate MBS		121	0.1%	4.00%	319	20-Jan-42	21.03	9.00%	1.00%
Total PT MBS		101,281	94.0%	4.29%	321	1-Dec-44	NA	NA	NA
Interest-Only Securities		3,345	3.1%	3.24%	251	25-Dec-39	NA	NA	n/a
Inverse Interest-Only Securities		3,135	2.9%	6.35%	308	25-Apr-41	NA	6.54%	n/a
Total Structured MBS		6,480	6.0%	4.75%	278	25-Apr-41	NA	NA	NA
Total Mortgage Assets	$	107,761	100.0%	4.32%	318	1-Dec-44	NA	NA	NA
December 31, 2014
Fixed Rate MBS	$	112,174	95.2%	4.30%	327	1-Dec-44	NA	NA	NA
Hybrid Adjustable Rate MBS		442	0.4%	4.00%	325	20-Jan-42	27.03	9.00%	1.00%
Total PT MBS		112,616	95.6%	4.30%	327	1-Dec-44	NA	NA	NA
Interest-Only Securities		2,276	1.9%	3.11%	240	25-Dec-39	NA	NA	NA
Inverse Interest-Only Securities		2,939	2.5%	6.35%	313	25-Apr-41	NA	0.80%	NA
Total Structured MBS		5,215	4.4%	4.94%	281	25-Apr-41	NA	NA	NA
Total Mortgage Assets	$	117,831	100.0%	4.33%	325	1-Dec-44	NA	NA	NA

($ in thousands)
Weighted Weighted
Percentage Average Average Weighted Weighted
of Weighted Maturity Coupon Average Average
Fair Entire Average in Longest Reset in Lifetime Periodic
Asset Category Value Portfolio Coupon Months Maturity Months Cap Cap
June 30, 2014
Adjustable Rate MBS $ 4,650 0.5% 4.11% 239 1-Sep-35 0.51 10.16% 2.00%
Fixed Rate MBS 820,831 86.3% 4.29% 313 1-Jun-44 NA NA NA
Hybrid Adjustable Rate MBS 75,734 8.0% 2.56% 344 1-Aug-43 103.04 7.57% 1.99%
Total PT MBS 901,215 94.8% 4.14% 315 1-Jun-44 97.1 7.72% 1.99%
Interest-Only Securities 39,608 4.1% 4.38% 276 25-Jan-43 NA NA NA
Inverse Interest-Only Securities 10,818 1.1% 6.03% 306 15-Dec-40 NA 6.18% NA
Total Structured MBS 50,426 5.2% 4.73% 282 25-Jan-43 NA NA NA
Total Mortgage Assets $ 951,641 100.0% 4.17% 314 1-Jun-44 NA NA NA
December 31, 2013
Adjustable Rate MBS $ 5,334 1.4% 3.92% 247 1-Sep-35 3.77 10.13% 2.00%
Fixed Rate MBS 267,481 68.7% 3.99% 314 1-Dec-43 NA NA NA
Hybrid Adjustable Rate MBS 90,487 23.2% 2.61% 349 1-Aug-43 108.23 7.61% 1.99%
Total PT MBS 363,302 93.3% 3.65% 322 1-Dec-43 102.41 7.75% 1.99%
Interest-Only Securities 20,443 5.3% 4.36% 262 25-Nov-40 NA NA NA
Inverse Interest-Only Securities 5,596 1.4% 5.91% 316 15-Dec-40 NA 6.07% NA
Total Structured MBS 26,039 6.7% 4.69% 274 15-Dec-40 NA NA NA
Total Mortgage Assets $ 389,341 100.0% 3.72% 318 1-Dec-43 NA NA NA

($ in thousands)
	June 30, 2015					December 31, 2014
			Percentage of					Percentage of
Agency	Fair Value		Entire Portfolio			Fair Value		Entire Portfolio
Fannie Mae	$	60,122		55.8	%	$	66,974		56.8	%
Freddie Mac		46,356		43.0	%		50,415		42.8	%
Ginnie Mae		1,283		1.2	%		442		0.4	%
Total Portfolio	$	107,761		100.0	%	$	117,831		100.0	%

($ in thousands)
June 30, 2014 December 31, 2013
Percentage of Percentage of
Agency Fair Value Entire Portfolio Fair Value Entire Portfolio
Fannie Mae $ 577,576 60.69 % $ 236,660 60.78 %
Freddie Mac 362,966 38.14 % 133,689 34.34 %
Ginnie Mae 11,099 1.17 % 18,992 4.88 %
Total Portfolio $ 951,641 100.00 % $ 389,341 100.00 %

	June 30, 2014		December 31, 2013		June 30, 2015		December 31, 2014
Weighted Average Pass Through Purchase Price	$	106.83	$	105.64
Weighted Average Pass-through Purchase Price					$	107.95	$	107.95
Weighted Average Structured Purchase Price	$	9.38	$	7.52	$	6.07	$	5.98
Weighted Average Pass Through Current Price	$	107.67	$	102.71
Weighted Average Pass-through Current Price					$	108.00	$	108.53
Weighted Average Structured Current Price	$	12.8	$	12.15	$	10.41	$	9.08
Effective Duration (1)		2.834		4.116		2.625		2.663

(1)

Effective duration is the approximate percentage change in price for a 100 basis point change in rates. An effective duration of ~~2.834~~2.625 indicates that an interest rate increase of 1.0% would be expected to cause a ~~2.834%~~2.625% decrease in the value of the MBS in the Company’s investment portfolio at June 30, ~~2014.~~2015. An effective duration of ~~4.116~~2.663 indicates that an interest rate increase of 1.0% would be expected to cause a ~~4.116%~~2.663% decrease in the value of the MBS in the Company’s investment portfolio at December 31, ~~2013.~~2014. These figures include the structured securities in the portfolio but do include the effect of the Company’s funding cost hedges. Effective duration quotes for individual investments are obtained from The Yield Book, Inc.

42-43-

The following table presents a summary of the Company’s portfolio assets acquired during the six months ended June 30, ~~2014~~2015 and ~~2013.~~2014.

($ in thousands)
	2014								2013								2015								2014
		Total Cost		Average Price		Weighted Average Yield				Total Cost		Average Price		Weighted Average Yield				Total Cost		Average Price		Weighted Average Yield				Total Cost		Average Price		Weighted Average Yield
PT MBS		$	978,252	$	107.50		3.07	%		$	435,754	$	104.81		2.14	%		$	-	$	-		0.00	%		$	978,252	$	107.50		3.07	%
Structured MBS			32,155		14.65		(5.02	)%			24,336		15.37		0.54	%			986		8.18		10.23	%			32,155		14.65		(5.02	)%

The Company’s portfolio of PT MBS is typically comprised of adjustable-rate MBS, fixed-rate MBS and hybrid adjustable-rate MBS. The Company generally seeks to acquire low duration assets that offer high levels of protection from mortgage prepayments provided they are reasonably priced by the market. Although the duration of an individual asset can change as a result of changes in interest rates, the Company strives to maintain a hedged PT MBS portfolio with an effective duration of less than 2.0. The stated contractual final maturity of the mortgage loans underlying the Company’s portfolio of PT MBS generally ranges up to 30 years. However, the effect of prepayments of the underlying mortgage loans tends to shorten the resulting cash flows from the Company’s investments substantially. Prepayments occur for various reasons, including refinancing of underlying mortgages and loan payoffs in connection with home sales.

The duration of the Company’s IO and IIO portfolio will vary greatly depending on the structural features of the securities. While prepayment activity will always affect the cash flows associated with the securities, the interest only nature of IO’s may cause their durations to become extremely negative when prepayments are high, and less negative when prepayments are low. Prepayments affect the durations of IIO’s similarly, but the floating rate nature of the coupon of IIOs (which is inversely related to the level of one month LIBOR) cause their price movements - and model duration - to be affected by changes in both prepayments and one month LIBOR - both current and anticipated levels. As a result, the duration of IIO securities will also vary greatly.

Prepayments on the loans underlying the Company’s MBS can alter the timing of the cash flows from the underlying loans to the Company. As a result, the Company gauges the interest rate sensitivity of its assets by measuring their effective duration. While modified duration measures the price sensitivity of a bond to movements in interest rates, effective duration captures both the movement in interest rates and the fact that cash flows to a mortgage related security are altered when interest rates move. Accordingly, when the contract interest rate on a mortgage loan is substantially above prevailing interest rates in the market, the effective duration of securities collateralized by such loans can be quite low because of expected prepayments.

The Company faces the risk that the market value of its PT MBS assets will increase or decrease at different rates than that of its structured MBS or liabilities, including its hedging instruments. Accordingly, the Company assesses its interest rate risk by estimating the duration of its assets and the duration of its liabilities. The Company generally calculates duration and effective duration using various ~~third party~~third-party models or obtains these quotes from third parties. However, empirical results and various ~~third party~~third-party models may produce different duration numbers for the same securities.

43-44-

The following sensitivity analysis shows the estimated impact on the fair value of our interest rate-sensitive investments and hedge positions as of June 30, ~~2014,~~2015, assuming rates instantaneously fall 100 basis points (“bps”), rise 100 bps and rise 200 bps, adjusted to reflect the impact of convexity, which is the measure of the sensitivity of our hedge positions and Agency MBS’ effective duration to movements in interest rates.

($ in thousands)
	Fair		$ Change in Fair Value									% Change in Fair Value									Fair		$ Change in Fair Value									% Change in Fair Value
MBS Portfolio	Value		-100BPS			+100BPS			+200BPS			-100BPS			+100BPS			+200BPS			Value		-100BPS			+100BPS			+200BPS			-100BPS			+100BPS			+200BPS
Adjustable Rate MBS	$	4,650	$	7		$	(27	)	$	(52	)		0.15	%		(0.57	)%		(1.13	)%
Hybrid Adjustable Rate MBS		75,734		2,932			(4,369	)		(8,957	)		3.87	%		(5.77	)%		(11.83	)%	$	121	$	2		$	(2	)	$	(5	)		1.25	%		(1.69	)%		(3.78	)%
Fixed Rate MBS		820,831		23,643			(44,917	)		(93,808	)		2.88	%		(5.47	)%		(11.43	)%		101,160		2,992			(4,989	)		(10,776	)		2.96	%		(4.93	)%		(10.65	)%
Interest-Only MBS		39,608		(12,685	)		12,783			18,210			(32.03	)%		32.28	%		45.98	%		3,345		(1,552	)		1,042			1,592			(46.40	)%		31.14	%		47.59	%
Inverse Interest-Only MBS		10,818		(1,377	)		(256	)		(2,094	)		(12.73	)%		(2.36	)%		(19.36	)%		3,135		(289	)		(208	)		(724	)		(9.23	)%		(6.64	)%		(23.10	)%
Total MBS Portfolio	$	951,641	$	12,520		$	(36,786	)	$	(86,701	)		1.32	%		(3.87	)%		(9.11	)%	$	107,761	$	1,153		$	(4,157	)	$	(9,913	)		1.07	%		(3.86	)%		(9.20	)%

($ in thousands)
	Notional		$ Change in Fair Value							% Change in Fair Value									Notional		$ Change in Fair Value									% Change in Fair Value
	Amount(1)		-100BPS			+100BPS		+200BPS		-100BPS			+100BPS			+200BPS			Amount(1)		-100BPS			+100BPS			+200BPS			-100BPS			+100BPS			+200BPS
Eurodollar Futures Contracts
Repurchase Agreement Hedges	$	7,646,000	$	(15,673	)	$	19,115	$	38,230		(0.83	)%		1.02	%		2.03	%	$	646,000	$	(1,294	)	$	1,615		$	3,230			(0.81	)%		1.01	%		2.03	%
Junior Subordinated Debt Hedges		364,000		(750	)		910		1,820		(0.84	)%		1.02	%		2.04	%		312,000		(603	)		780			1,560			(0.78	)%		1.01	%		2.03	%
	$	8,010,000	$	(16,423	)	$	20,025	$	40,050		(0.83	)%		1.02	%		2.03	%	$	958,000	$	(1,897	)	$	2,395		$	4,790			(0.80	)%		1.01	%		2.03	%
Payer Swaption
Repurchase Agreement Hedges	$	100,000	$	(982	)	$	3,214	$	7,823		(0.98	)%		3.21	%		7.82	%

Gross Totals																					$	(744	)	$	(1,762	)	$	(5,123	)

(1)	Represents the total cumulative contract/notional amount of Eurodollar futures ~~contracts and payer swaption outstanding.~~contracts.

In addition to changes in interest rates, other factors impact the fair value of the Company’s interest rate-sensitive investments and hedging instruments, such as the shape of the yield curve, market expectations as to future interest rate changes and other market conditions. Accordingly, in the event of changes in actual interest rates, the change in the fair value of the Company’s assets would likely differ from that shown above and such difference might be material and adverse to the Company’s stockholders.

Repurchase Agreements

As of June 30, ~~2014,~~2015, the Company had established borrowing facilities in the repurchase agreement market with ~~16 counterparties which we~~a number of commercial banks and other financial institutions and had borrowings in place with five of these counterparties. We believe these facilities provide borrowing capacity in excess of our needs. None of these lenders are affiliated with the Company. ~~As of June 30, 2014, we had funding in place with all 14 of the counterparties.~~ These borrowings are secured by the Company’s MBS and cash and bear interest rates that are based on a spread to LIBOR.

As of June 30, ~~2014,~~2015, the Company had obligations outstanding under the repurchase agreements of approximately ~~$854.0~~$101.2 million with a net weighted average borrowing cost of ~~0.35%~~0.39%. The remaining maturity of the Company’s outstanding repurchase agreement obligations ranged from 26 to 9576 days, with a weighted average maturity of 2720 days. Securing the repurchase agreement obligation as of June 30, ~~2014~~2015 are MBS with an estimated fair value, including accrued interest and receivable for securities sold, of ~~$911.1~~$106.2 million and a weighted average maturity of ~~316 months.~~320 months and cash pledged to counterparties of approximately $2.1 million. Through August ~~8, 2014,~~5, 2015, the Company has been able to maintain its repurchase facilities with comparable terms to those that existed at June 30, ~~2014~~2015 with maturities through ~~February 2,~~October 6, 2015.

44-45-

The table below presents information about our period-end and average repurchase agreement obligations for each quarter in ~~2014~~2015 and ~~2013.~~2014.

($ in thousands)
					Difference Between Ending
	Ending Balance		Average Balance		Repurchase Agreements and
	of Repurchase		of Repurchase		Average Repurchase Agreements
Three Months Ended	Agreements		Agreements		Amount			Percent
June 30, 2015		101,206		103,750		(2,544	)		(2.45	)%
March 31, 2015	$	106,294	$	108,129	$	(1,835	)		(1.70	)%
December 31, 2014		109,964		1,442,905		(1,332,941	)		(92.38	)%(1)
September 30, 2014		1,339,196		1,096,611		242,585			22.12	%(2)
June 30, 2014		854,026		783,323		70,703			9.03	%
March 31, 2014		712,620		533,008		179,612			33.70	%(3)

($ in thousands)
Difference Between Ending
Ending Balance Average Balance Repurchase Agreements and
of Repurchase of Repurchase Average Repurchase Agreements
Three Months Ended Agreements Agreements Amount Percent
June 30, 2014 $ 854,026 $ 783,323 $ 70,703 9.03 %
March 31, 2014 712,620 533,008 179,612 33.70 %(1)
December 31, 2013 353,396 345,068 8,328 2.41 %
September 30, 2013 336,739 341,468 (4,729 ) (1.38 )%
June 30, 2013 346,197 350,714 (4,517 ) (1.29 )%
March 31, 2013 355,231 252,763 102,468 40.54 %(2)

(1)	The lower ending balance relative to the average balance during the quarter ended December 31, 2014 reflects the deconsolidation of Orchid at December 31, 2014.

(2)

The higher ending balance relative to the average balance during the quarter ended September 30, 2014 reflects deployment of the proceeds, on a leveraged basis, of certain equity offerings by Orchid. During the quarter ended September 30, 2014, the Company’s investment in PT RMBS increased $294.4 million.

(3)

The higher ending balance relative to the average balance during the quarter ended March 31, 2014 reflects the deployment of the proceeds, on a leveraged basis, of Orchid’s January and March 2014 equity offerings. During the quarter ended March 31, 2014, the Company’s investment in PT RMBS increased $402.5 million.

~~(2)~~

The higher ending balance relative to the average balance during the quarter ended March 31, 2013 reflects the deployment of the proceeds, on a leveraged basis, of Orchid’s IPO. During the quarter ended March 31, 2013, the Company’s investment in PT RMBS increased $219.3 million.

Liquidity and Capital Resources

Liquidity is our ability to turn non-cash assets into cash, purchase additional investments, repay principal and interest on borrowings, fund overhead, fulfill margin calls and pay dividends. Our principal immediate sources of liquidity include cash balances, unencumbered assets, ~~and borrowings~~the availability to borrow under repurchase ~~agreements.~~agreements, and fees and dividends received from Orchid. Our borrowing capacity will vary over time as the market value of our interest earning assets varies. Our balance sheet also generates liquidity on an on-going basis through payments of principal and interest we receive on our MBS portfolio, and from cash flows received from the retained interests and the collection of servicing advances. Management believes that we currently have sufficient liquidity and capital resources available for (a) the acquisition of additional investments consistent with the size and nature of our existing MBS portfolio, (b) the repayments on borrowings, ~~and~~ (c) the payment of overhead and operating ~~expenses.~~expenses, and (d) the payment of other accrued obligations.

Because our PT MBS portfolio consists entirely of government and agency securities, we do not anticipate having difficulty converting our assets to cash should our liquidity needs ever exceed our immediately available sources of cash. Our structured MBS portfolio also consists entirely of governmental agency securities, although they typically do not trade with comparable bid / ask spreads as PT MBS. However, we anticipate that we would be able to liquidate such securities readily, even in distressed markets, although we would likely do so at prices below where such securities could be sold in a more stable market. To enhance our liquidity even further, we may pledge a portion of our structured MBS as part of a repurchase agreement funding but retain the 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.

The Company’s master repurchase agreements have no stated expiration, but can be terminated at any time at the Company’s option or at the option of the counterparty. However, once a definitive repurchase agreement under a master repurchase agreement has been entered into, it generally may not be terminated by either party. A negotiated termination can occur, but may involve a fee to be paid by the party seeking to terminate the repurchase agreement transaction.

45-46-

Under our repurchase agreement funding arrangements, we are required to post margin at the initiation of the borrowing. The margin posted represents the haircut, which is a percentage of the market value of the collateral pledged. To the extent the market value of the asset collateralizing the financing transaction declines, the market value of our posted margin will be insufficient and we will be required to post additional collateral. Conversely, if the market value of the asset pledged increases in value, we would be over collateralized and we would be entitled to have excess margin returned to us by the counterparty. Our lenders typically value our pledged securities daily to ensure the adequacy of our margin and make margin calls as needed, as do we. Typically, but not always, the parties agree to a minimum threshold amount for margin calls so as to avoid the need for nuisance margin calls on a daily basis.

As discussed above, the Company invests a portion of its capital in structured MBS. We do not fund the purchase of these investments in the repurchase market but instead purchase them directly, thus reducing – but not eliminating - the Company’s reliance on access to repurchase agreement funding. The leverage inherent in the structured securities replaces the leverage obtained by acquiring PT securities and funding them in the repurchase market. This structured MBS strategy has been a core element of the Company’s overall investment strategy since 2008. However, we have and may continue to pledge a portion of our structured MBS in order to raise our cash levels, but will not pledge these securities in order to acquire additional assets.

In an effort to increase assets under management and generate additional revenues needed to cover operating costs, Bimini Capital and Bimini Advisors acted as the sponsor of the initial public offering of common stock for Orchid, which closed on February 20, 2013. Bimini Advisors paid all of the underwriting, legal and other costs incurred in connection with the offering. Bimini Advisors did so in anticipation of receiving fees from Orchid for acting as its manager as well as the ability to share certain overhead expenses. To the extent Orchid is able to increase its capital base over time, Bimini Advisors will benefit via increased management fees. The independent members of the Orchid Board of Directors have the ability to terminate the management agreement and thus end the ability of Bimini Advisors to collect management fees and share overhead costs. However, if Orchid were to terminate the management agreement without cause, Orchid would be required to pay a termination fee to Bimini Advisors.

~~In the coming~~future periods we expect to continue to finance our activities ~~in a manner that is consistent with our operations via~~through repurchase agreements. As of June 30, ~~2014,~~2015, the Company had cash and cash equivalents of ~~$37.2~~$7.0 million. We generated cash flows of ~~$37.7~~$13.2 million from principal and interest payments on our MBS portfolio and ~~$1.8~~$2.3 million from retained interests and had average repurchase agreements outstanding of ~~$658.2~~$105.9 million during the six months ended June 30, ~~2014.~~2015. In addition, during the six months ended June 30, 2015, the Company received approximately $2.3 million in management fees and expense reimbursements as manager of Orchid and approximately $1.1 million in dividends from its investment in Orchid common shares.

In May 2015, Bimini Capital agreed to settle a legal action as more fully described in Note 10 to the consolidated financial statements. A loss of $3.5 million has been charged to operations for the six months ended June 30, 2015. Although payments under the settlement agreement will reduce the Company’s liquidity, management believes that the Company will be able to generate sufficient cash from its operations to meet the payment obligations as they come due.

The table below summarizes the effect on our liquidity and cash flows from certain future contractual obligations as of June 30, ~~2014.~~2015.

(in thousands)
	Obligations Maturing										Obligations Maturing
	Within One Year		One to Three Years		Three to Five Years		More than Five Years		Total		Within One Year		One to Three Years		Three to Five Years		More than Five Years		Total
Repurchase agreements	$	854,026	$	-	$	-	$	-	$	854,026	$	101,206	$	-	$	-	$	-	$	101,206
Interest expense on repurchase agreements(1)		535		-		-		-		535		68		-		-		-		68
Junior subordinated notes(2)		-		-		-		26,000		26,000		-		-		-		26,000		26,000
Interest expense on junior subordinated notes(1)		1,024		1,970		1,967		16,198		21,159		1,044		1,996		1,999		15,437		20,476
Payable for unsettled security purchased		6,829		-		-		-		6,829
Litigation settlement												2,500		500		500		-		3,500
Totals	$	862,414	$	1,970	$	1,967	$	42,198	$	908,549	$	104,818	$	2,496	$	2,499	$	41,437	$	151,250

(1)	Interest expense on repurchase agreements and junior subordinated notes are based on current interest rates as of June 30, ~~2014~~2015 and the remaining term of liabilities existing at that date.

(2)	The Company holds a common equity interest in Bimini Capital Trust II. The amount presented represents the net cash outlay of the Company.

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Outlook

Bimini Capital

Prior to 2008, MortCo incurred significant losses in the operation of a mortgage loan origination business. Bimini Capital materially downsized its investment portfolio to raise cash to fund the MortCo operations, leaving Bimini Capital with a significantly smaller capital base. This smaller capital base ~~makes~~made it difficult to generate sufficient net interest income to cover expenses. Since MortCo terminated its operations in 2007, Bimini Capital has taken several significant steps designed to increase its probability of generating profits going forward, including a re-structuring of the portfolio, reducing expenses, retiring debt, and settling various litigation matters. In general, Bimini Capital still needed to increase its capital base, and/or create alternative sources of revenues, to ensure the generation of profits over the long-term. However, primarily because of litigation arising out of MortCo’s prior mortgage business, raising capital directly into Bimini Capital was not possible. Therefore, Orchid was formed as a new entity into which capital could be raised.

Orchid Island Capital Inc.

On October 22, 2012, Orchid filed a Form S-11 Registration Statement with the Securities and Exchange Commission related to a proposed IPO of its common equity. The Registration Statement was declared effective on February 14, 2013 and Orchid closed on its IPO of common stock on February 20, 2013. Bimini Capital and Bimini Advisors acted as the sponsor of the offering by paying for the underwriting, legal and other costs associated with the offering. During the year ended December 31, 2013, the Company incurred costs related to this offering of approximately $3.0 million. On an economic basis, Bimini Capital and Bimini Advisors incurred these costs in anticipation of receiving fees from Orchid for acting as its manager as well as the ability to share certain overhead expenses. The economic benefit of the management fees and the expense reduction will be recorded to the extent they are realized over time. Bimini Capital believes it will ultimately recover the expenses associated with the Orchid public offering; however, the time frame for this recovery will extend into future periods. To the extent Orchid is able to increase its capital base over time, Bimini Capital will benefit via increased management fees. Bimini Advisors will receive a monthly management fee in the amount of:

• One-twelfth of 1.5% of the first $250 million of Orchid’s equity, as defined in the management agreement,

• One-twelfth of 1.25% of Orchid’s equity that is greater than $250 million and less than or equal to $500 million, and

• One-twelfth of 1.00% of Orchid’s equity that is greater than $500 million.

During the ~~six months~~year ended ~~June 30,~~December 31, 2014, Orchid completed ~~several~~ additional offerings of its common stock. As of March 31, 2014, Orchid reached $100 million of stockholders equity for the first time. As a result, pursuant to the management agreement between Bimini Advisors and Orchid, commencing on July 1, 2014 Bimini Advisors ~~will begin~~began to allocate certain overhead costs to Orchid on a pro rata ~~basis commencing on July 1, 2014.~~basis. As a stockholder of Orchid, Bimini will also continue to share in distributions, if any, paid by Orchid to its stockholders.

The independent Board of Directors of Orchid has the ability to terminate the management agreement and thus end the ability of the Bimini Advisors and Bimini Capital to collect management fees and share overhead costs. ~~However, if~~Should Orchid ~~were to~~ terminate the management agreement without cause, ~~Orchid would be required~~it shall pay to ~~pay~~Bimini Advisors a termination fee equal to ~~Bimini Advisors.~~three times the average annual management fee, as defined in the management agreement, before or on the last day of the initial term or automatic renewal term.

Tax Matters

For the year ended December 31, ~~2013,~~2014, Bimini Capital generated a REIT taxable loss. As more fully described in footnote 11 to the accompanying consolidated financial statements, REIT taxable income or loss generated by qualifying REIT activities is computed in accordance with the Internal Revenue Code, which is different from the Company’s financial statement income or loss as computed in accordance with GAAP. ~~In addition,~~ Bimini Capital had REIT tax NOL carryforwards of approximately ~~$17.9~~$17.3 million as of December 31, ~~2013~~2014 which are immediately available to offset future REIT taxable income.

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The Company has used the term “REIT taxable income” throughout this document as being the amount available for distribution to its stockholders before any NOLs are applied, and before any distributions. In arriving at income that could be subjected to taxation at the REIT entity level for a given year, dividends paid in the current year and any NOLs carried-over from prior periods are deducted (in that order) from current period income first. NOLs expire 20 years from the year they are incurred. Since Bimini Capital currently has NOLs from prior periods, which begin to expire in 2028, and are available to offset income in ~~2014~~2015 and in future periods, Bimini Capital has the option, but not the obligation, to apply such NOLs against REIT taxable income. As a result, Bimini Capital could have income in ~~2014~~2015 and in future years, but not make distributions to stockholders. This would occur if Bimini Capital had sufficient NOLs available to entirely offset the REIT income earned in a given year and chose to apply such NOLs. Bimini Capital could also apply available NOLs against a portion of future period earnings and reduce the distributions to stockholders. Bimini Capital is unlikely to declare and pay dividends to stockholders until existing NOLs have been consumed.

~~Regulatory Developments with Respect to Fannie Mae and Freddie Mac and the Dodd-Frank Act~~

In response to the credit market disruption and the deteriorating financial conditions of Fannie Mae and Freddie Mac, Congress and the U.S. Treasury undertook a series of actions that culminated with putting Fannie Mae and Freddie Mac in conservatorship in September 2008. The Federal Housing Finance Agency (“FHFA”) now operates Fannie Mae and Freddie Mac as conservator, in an effort to stabilize the entities. The FHFA also noted that during the conservatorship period, it would work to enact new regulations for minimum capital standards, prudent safety and soundness standards and portfolio limits of Fannie Mae and Freddie Mac.

Although the U.S. Government has committed significant resources to Fannie Mae and Freddie Mac, Agency MBS guaranteed by either Fannie Mae or Freddie Mac are not backed by the full faith and credit of the United States. Moreover, the Secretary of the U.S. Treasury noted that the guarantee structure of Fannie Mae and Freddie Mac requires examination and that changes in the structures of the entities were necessary to reduce risk to the financial system. Such changes may involve an explicit U.S. Government backing of Fannie Mae and Freddie Mac Agency MBS or the express elimination of any implied U.S. Government guarantee and, therefore, creation of credit risk with respect to Fannie Mae and Freddie Mac Agency MBS. Additionally, on February 11, 2011, the U.S. Treasury issued a White Paper titled “Reforming America’s Housing Finance Market” that lays out, among other things, proposals to limit or potentially wind down the role that Fannie Mae and Freddie Mac play in the mortgage market.

~~On October 4, 2012, the FHFA released a white paper entitled~~ ~~Building a New Infrastructure for the Secondary Mortgage Market~~ ~~(the “FHFA White Paper”). This release follows up on the FHFA’s February 21, 2012~~ ~~Strategic Plan for Enterprise Conservatorships~~, which set forth three goals for the next phase of the Fannie Mae and Freddie Mac conservatorships. These three goals are to (i) build a new infrastructure for the secondary mortgage market, (ii) gradually contract Fannie Mae and Freddie Mac’s presence in the marketplace while simplifying and shrinking their operations, and (iii) maintain foreclosure prevention activities and credit availability for new and refinanced mortgages. The FHFA White Paper proposes a new infrastructure for Fannie Mae and Freddie Mac that has two basic goals.

The first such goal is to replace the current, outdated infrastructures of Fannie Mae and Freddie Mac with a common, more efficient infrastructure that aligns the standards and practices of the two entities, beginning with core functions performed by both entities such as issuance, master servicing, bond administration, collateral management and data integration. The second goal is to establish an operating framework for Fannie Mae and Freddie Mac that is consistent with the progress of housing finance reform and encourages and accommodates the increased participation of private capital in assuming credit risk associated with the secondary mortgage market. The FHFA recognizes that there are a number of impediments to their goals which may or may not be surmountable, such as the absence of any significant secondary mortgage market mechanisms beyond Fannie Mae, Freddie Mac and Ginnie Mae, and that their proposals are in the formative stages. As a result, it is unclear if the proposals will be enacted. If such proposals are enacted, it is unclear how closely the enactment would resemble the proposals from the FHFA White Paper or what the effects of the enactment will be. As the economy has recovered, home prices have increased off the low levels seen in the aftermath of the financial crisis and a significant portion of the shadow inventory of homes that resulted from foreclosures has been worked off. The combination of recovering home prices, attractive financing levels and decreased liquidations of homes via foreclosures have resulted in an acceleration in refinancing activity.

On June 25, 2013, Senators Bob Corker (R-TN) and Mark Warner (D-VA), with Senators Mike Johanns (R-NE), Jon Tester (D-MT), Dean Heller (R-NV), Heidi Heitkamp (D-ND), Jerry Moran (R-KS) and Kay Hagan (D-NC), formally introduced the Housing Finance Reform and Taxpayer Protection Act of 2013 (the “Corker-Warner Bill”) into the U.S. Senate. While the current draft of the Corker-Warner Bill will likely undergo significant changes as it is debated, it is expected to serve as a basis of discussion for congressional efforts to reform Fannie Mae and Freddie Mac.

~~As currently drafted, the Corker-Warner Bill has three key provisions:~~

~~i. the establishment of the Federal Mortgage Insurance Corporation (the “FMIC”);~~

~~ii. the creation of a Mortgage Insurance Fund (the “Fund”); and~~

~~iii. the wind-down of Fannie Mae and Freddie Mac.~~

The FMIC would be a government guarantor modeled after the Federal Deposit Insurance Corporation (the “FDIC”) in that it would collect insurance premiums and maintain a deposit fund on all outstanding obligations. Every mortgage-backed security issued through the FMIC would have a private investor bearing the first risk of loss and holding at least $0.10 in equity capital for every dollar of risk. This private capital buffer would serve to protect taxpayers from the risk of default on the mortgages underlying securities issued by the FMIC. Thus, the ultimate purpose of the FMIC would be to bring in credit investors to bear the risk of default while providing liquidity, transparency and access to mortgage credit for the housing finance system.

The FHFA would be abolished after the establishment of the FMIC, and all current responsibilities of the FHFA, as well as its resources, would be transferred to the FMIC. In particular, the Corker-Warner Bill specifies that the FMIC would maintain a database of uniform loan-level information on eligible mortgages, develop standard uniform securitization agreements and oversee the common securitization platform currently being developed by the FHFA.

In the event losses due to default on underlying mortgages exceed the first position losses of private credit investors in securities issued by the FMIC, the FMIC would cover such losses out of the Fund. The Corker-Warner Bill specifies that the FMIC would endeavor to attain a reserve balance of 1.25% of the aggregate outstanding principal balance of covered securities within five years of the establishment of the FMIC and 2.50% of such amount within ten years of the establishment of the FMIC. The Fund would be paid with insurance premiums, akin to user fees, paid by private investors with various reporting and transparency requirements.

As currently proposed, the Corker-Warner Bill would revoke the charters of Fannie Mae and Freddie Mac upon the establishment of the FMIC. Fannie Mae and Freddie Mac would wind down as expeditiously as possible while maximizing returns to taxpayers as their assets are sold off.

On July 11, 2013, members of the U.S. House of Representatives introduced the Protecting American Taxpayers and Homeowners Act (“PATH”), a broad financing reform bill that serves as a counterpart to the Corker-Warner Bill. PATH would also revoke the charters of Fannie Mae and Freddie Mac and remove barriers to private investment. However, PATH would maintain the FHFA and give it oversight over a new non-government, not-for-profit National Mortgage Market Utility whose mission would be to develop best practices standards for the private origination, servicing, pooling and securitizing of mortgages and operate a publicly accessible securitization outlet to match loan originators with investors. Additional provisions of PATH include the reduction in size and scope of the Federal Housing Administration (“FHA”), targeting its mission specifically to first-time borrowers and low- and moderate- income borrowers except in periods of significant credit contraction.

Fannie Mae and Freddie Mac reform regained momentum in the first quarter of 2014 when Senators Tim Johnson (D-SD) and Mike Crapo (R-ID), the two most senior members of the Senate Banking Committee, released a proposed bill (the “Johnson-Crapo Bill”), which is generally based on the Corker-Warner Bill. However, this momentum was lost in the second quarter of 2014 when the Johnson-Crapo Bill was approved by the Senate Banking Committee, but failed to secure enough support to be considered by Congress. The final outcome of the Johnson-Crapo Bill remains uncertain, as reports indicate that the House Republican leadership continues to favor a very different approach. As the FHFA and both houses of Congress are each working on separate measures intended to dramatically restructure the U.S. housing finance system and the operations of Fannie Mae and Freddie Mac, we expect debate and discussion on the topic to continue throughout 2014. It is unclear which, if any, of these measures will be enacted, and, if any are enacted, what the effects would be.

The effect of the actions taken and to be taken by the U.S. Treasury, Congress or FHFA remains uncertain. New and recently enacted laws, regulations and programs related to Fannie Mae and Freddie Mac may adversely affect the pricing, supply, liquidity and value of Agency MBS and otherwise materially harm our business and operations.

The Dodd-Frank Act provides for new regulations on financial institutions and creates new supervisory and advisory bodies, including the new Consumer Financial Protection Bureau. The Dodd-Frank Act tasks many agencies with issuing a variety of new regulations, including rules related to mortgage origination and servicing, securitization and derivatives. Because a significant number of regulations under the Dodd-Frank Act have either not yet been proposed or not yet been adopted in final form, it is not possible for us to predict how the Dodd-Frank Act will impact our business.

Interest Rates

Volatility in global interest rates continued in the second quarter of 2015. Interest rates rose across all sectors in the global bond markets, thereby depressing bond prices across sectors. Spreads on U.S. Treasuries of the same durations as Agency MBS incrementally widened during the second quarter, putting downward pressure on book value for many mortgage REITs. Both U.S. Treasuries and Agency MBS yields ended the second quarter higher than the close of the first quarter 2015. The rise in rates was led by growing sentiment that the European economies are recovering and the need for continued aggressive monetary stimulus by the European Central Bank (the "ECB") would diminish somewhat over the next few quarters. However, European markets decreased during the second quarter primarily due to fears stoked by uncertainty over Greek sovereign finances and its future as an ECB member and a member of the Eurozone.

We believe that the U.S. economy appears to be on a trajectory of slow, sustainable growth. The consensus forecast for 2015 economic growth in the U.S. remains at approximately 2.7%, accompanied by moderate growth in payrolls and inflation within the Federal Reserve's target range. The Federal Reserve ~~has taken a number~~continues to guide capital markets to anticipate the possibility of ~~steps over the last few years to lower both short and long-term~~an interest ~~rates. In August 2011, the~~rate hike in September or December 2015. Federal Reserve ~~announced~~Chair Yellen, in her June 17, 2015 remarks following the June Federal Reserve Open Market Committee ("FOMC") policy meeting, stated that ~~it expected to maintain~~she anticipates a long period of continued accommodative monetary policy following an initial rise in the Federal Funds Rate atlater this year. These statements, which Chair Yellen reiterated in Congressional testimony on July 15 and 16, 2015, generally are in line with market participants' expectations for the balance of 2015. As of June 30, 2015, the bond market appears to have priced in an increase in the federal funds rate in September 2015 and a ~~low level at least through mid-2013, and on January 25, 2012 it extended that outlook through late 2014. Additionally, on September 21, 2011,~~slow rise over the next few years. With the Federal Reserve ~~announced~~ostensibly tying the ~~extension~~start of interest rate increases to evidence of further improvement in the ~~maturities~~economy, data releases remain materially influential events. We believe that data dependency and analysis of its U.S. Treasury securities portfolio by selling approximately $400 billion in short-term U.S. Treasury securities and purchasing an equivalent amount of longer-term U.S. Treasury securities. This program, known as “Operation Twist,” lasted through December 2012. The goal of Operation Twist was to lower the yields on longer-term U.S. Treasury securities, which the Federal Reserve ~~believed would lower~~will continue to drive the direction and volatility of U.S. rates, with the uncertainty that this dynamic creates further volatility in the interest ~~rates tied to such yields, such as mortgage rates~~rate and ~~interest rates on commercial loans.~~fixed income markets.

Recent Regulatory Developments

In ~~September 2012, the Federal Reserve announced an open-ended program to expand its holdings~~March 2015, housing and mortgage financial reform legislation, H.R. 1491, was proposed by congressmen John Delaney (D-MD), John Camey (D-DE) and James A. Himes (D-CT), each of long-term securities by purchasing an additional $40 billion of Agency MBS per month until key economic indicators, such as the unemployment rate, showed signs of improvement. This program, known as “QE3”, when combined with other programs to extend the average maturitywhom is a member of the ~~Federal Reserve’s holdings~~House Financial Services Committee. The bill is called The Partnership to Strengthen Homeownership Act, and is similar to a bill introduced by the same congressmen in the last Congress (H.R. 5055), which never made it out of committee. Under this proposed legislation, all government guaranteed single-family and multi-family mortgage backed securities will be supported by a minimum of 5% private sector capital, which will stand in a first loss position. The remaining 95% of the risk will be shared between Ginnie Mae and ~~reinvest principal payments from~~a private reinsurer on a pari passu basis. Fees paid to Ginnie Mae for providing these securities will be allocated to affordable housing programs. Under the ~~Federal Reserve’s holdings of agency debt~~bill, Freddie Mac and ~~Agency MBS into Agency MBS, was expected~~Fannie Mae would be wound down over a five-year period, and their multifamily businesses will be spun out as separate entities. Ginnie Mae would be required to ~~increase~~create and implement a workable multifamily guarantee that utilizes private sector pricing consistent with the ~~Federal Reserve’s holdings of long-term securities~~single family model. The GSEs' current multifamily businesses would continue to function within the new multifamily housing market as purely private organizations with an explicit government guarantee provided by ~~$85 billion each month. The Federal Reserve also announced that it would keep the target range for the Federal Funds Rate between zero~~Ginnie Mae and ~~0.25% through at least mid-2015, which was six months longer than previously expected.~~a private sector reinsurer.

The Federal Reserve provided further guidance to the market in December 2012 by stating that it intended to keep the Federal Funds Rate close to zero while the unemployment rate is above 6.5% and as long as inflation does not rise above 2.5%. In December 2012, the Federal Reserve also announced that it would initially begin buying $45 billion of long-term Treasury bonds each month and noted that such amount may increase in the future. This bond purchase program replaced Operation Twist.

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In May 2015, Senate Banking Committee Chairman Richard Shelby (R-AL) released a draft bill entitled The ~~Federal Reserve Open Market Committee~~Regulatory Relief Bill of 2015 (the ~~“FOMC”~~"Regulatory Relief Bill"). If enacted, this bill would increase the threshold for a financial institution to be deemed a Systemically Important Financial Institution ("SIFI") ~~meeting minutes released on April 10, 2013 revealed that~~from $50 billion to $500 billion while giving the ~~FOMC had begun considering when~~Financial Stability Oversight Council discretion to designate banks with greater than $50 billion in assets as SIFIs, give non-banks an opportunity to file a remedial plan addressing regulators' concerns before being designated as SIFIs, require an affirmative vote every five years to renew the ~~Federal Reserve should begin tapering~~SIFI designation of non-banks, provide regulatory relief for community banks and broaden the pace of Agency MBS purchases set in September 2012. The FOMC meeting minutes released on May 22, 2013 announced that the Federal Reserve was considering beginning to taper such purchase as early as June 2013. In minutes released on June 25, 2013, the FOMC stated that the Federal Reserve would begin to scale back Agency MBS purchases later in 2013 and that such purchases would cease entirely when the unemployment rate reached 7%. On October 30, 2013, the FOMC announced that it would continue reinvesting principal payments from its holdings of agency debt and Agency MBS into Agency MBS and U.S. Treasury securities at the current pace indefinitely. The October 30, 2013 announcement provided no additional guidance as to when tapering might begin.Consumer Financial Protection Bureau Qualified Mortgage rule.

~~At its December 18, 2013 meeting,~~We expect debate and discussion on residential housing and mortgage reform to continue in 2015. However, we cannot be certain if H.R. 1491, the FOMC indicated that it saw improvement in economic activity and labor market conditions. As a result, the FOMC announced that, beginning in January 2014, it would reduce its monthly purchases of Agency MBS from $40 billion to $35 billion and U.S. Treasury securities from $45 billion to $40 billion. The FOMC further stated that it would continue reinvesting principal payments from its holdings of these securities in Agency MBS and rolling over maturing Treasury bonds at auction. Subsequently, the FOMC has announced additional $5 billion reductions to its monthly purchases of both Agency MBS and Treasury bonds. Beginning in August 2014, the FOMC’s purchasesRegulatory Relief Bill or any other housing- and/or mortgage-related bill will be ~~reduced to a pace of $10 billion per month of Agency RMBS~~approved by Congress, and ~~$15 billion of U.S. Treasury securities. The FOMC has indicated that it~~if so, what the effect will end its bond buying program in October 2014. The FOMC expects even the lower level of purchases to maintain downward pressure on longer-term interest rates, support mortgage markets and make broader financial conditions more accommodative, which it believes should promote economic recovery and control inflation.

Although historically correlated with movements in the Federal Funds Rate, European inter-bank lending rates, specifically LIBOR, are independently affected by the fiscal and budgetary problems of the member countries of the European Union. In recent years, the European Central Bank, International Monetary Fund and member countries have provided emergency funding mechanisms to support members facing the inability to raise new debt at acceptable levels (such as Greece, Ireland, Portugal and Spain). To the extent this crisis persists or worsens, LIBOR may increase substantially.

Although long-term interest rates are currently at historically low levels, they are still high relative to short-term interest rates. We believe that the relationship between long and short-term interest rates will remain relatively unchanged so long as the U.S. economic recovery and inflation rates remain tepid. The FOMC also recently reiterated its continued long-term goals of reaching maximum employment and inflation at 2% before adjusting the target Federal Funds Rate. If the economic recovery were to strengthen or inflation rates increase, the Federal Reserve may decide to abandon its current low-interest rate policies and/or increase interest rates. Although an increase in the Federal Funds Rate would most likely result in an increase in LIBOR, other European-specific factors, such as a credit disruption in the European inter-bank credit market, could cause an increase in LIBOR independent of movements in the Federal Funds Rate.

~~Prepayment Rates, Refinancings and Loan Modification Programs~~

As a result of the Federal Reserve’s interest rate policy and global economic conditions, prevailing interest rates, especially mortgage interest rates, are at historically low levels. Generally, lower mortgage interest rates leads to increased refinancings and, consequently, prepayments on mortgages and MBS. In addition to the proposed reforms and/or changes of Fannie Mae and Freddie Mac suggested by the U.S. Treasury and the FHFA, Congress has to date introduced three legislative proposals that seek to provide changes to the current housing finance infrastructure. However, refinancing activity has yet to react to prevailing interest rate incentives available to borrowers as market participants expected.

To further stimulate the level of refinancing activity, the Obama administration has instituted programs to assist borrowers struggling with their mortgage payments or unable to refinance. For example, the government has expanded the HARP program, which is a program whereby eligible borrowers who owe more money on their mortgage loans than the value of their homes (commonly known as being “underwater” on a mortgage loan) can receive assistance refinancing their mortgage loans by loosening the eligibility requirements for refinancing. On April 11, 2013, the FHFA extended the HARP program by two years to December 31, 2015. In response to the expanded HARP program, Fannie Mae and Freddie Mac have announced guidelines for compliance with the expanded program.

~~Current programs such as the Home Affordable Modification Program and the Principal Reduction Alternative are designed to assist borrowers in modifying their mortgage loans.~~be.

Effect on Us

Regulatory developments, movements in interest rates and prepayment rates as well as loan modification programs affect us in many ways, including the following:

Effects on our Assets

A change in or elimination of the guarantee structure of Agency MBS may increase our costs (if, for example, guarantee fees increase) or require us to change our investment strategy altogether. For example, the elimination of the guarantee structure of Agency MBS may cause us to change our investment strategy to focus on non-Agency MBS, which in turn would require us to significantly increase our monitoring of the credit risks of our investments in addition to interest rate and prepayment risks.

Lower long-term interest rates can affect the value of our Agency MBS in a number of ways. If prepayment rates are relatively low (due, in part, to the refinancing problems described above), lower long-term interest rates can increase the value of higher-coupon Agency MBS. This is because investors typically place a premium on assets with yields that are higher than market yields. Although lower long-term interest rates may increase asset values in our portfolio, we may not be able to invest new funds in similarly-yielding assets.

If prepayment levels increase, the value of our Agency MBS affected by such prepayments may decline. This is because a principal prepayment accelerates the effective term of an Agency MBS, which would shorten the period during which an investor would receive above-market returns (assuming the yield on the prepaid asset is higher than market yields). Also, prepayment proceeds may not be able to be reinvested in similar-yielding assets. Agency MBS backed by mortgages with high interest rates are more susceptible to prepayment risk because holders of those mortgages are most likely to refinance to a lower rate. IOs and IIOs, however, may be the types of Agency MBS most sensitive to increased prepayment rates. Because the holder of an IO or IIO receives no principal payments, the values of IOs and IIOs are entirely dependent on the existence of a principal balance on the underlying mortgages. If the principal balance is eliminated due to prepayment, IOs and IIOs essentially become worthless. Although increased prepayment rates can negatively affect the value of our IOs and IIOs, they have the opposite effect on POs. Because POs act like zero-coupon bonds, meaning they are purchased at a discount to their par value and have an effective interest rate based on the discount and the term of the underlying loan, an increase in prepayment rates would reduce the effective term of our POs and accelerate the yields earned on those assets, which would increase our net income.

Because we base our investment decisions on risk management principles rather than anticipated movements in interest rates, in a volatile interest rate environment we may allocate more capital to structured Agency MBS with shorter durations, such as short-term fixed and floating rate CMOs. We believe these securities have a lower sensitivity to changes in long-term interest rates than other asset classes. We may attempt to mitigate our exposure to changes in long-term interest rates by investing in IOs and IIOs, which typically have different sensitivities to changes in long-term interest rates than pass-through Agency MBS, particularly pass-through Agency MBS backed by fixed-rate mortgages.

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We do not believe our investment portfolio will be materially affected by loan modification programs because Agency MBS backed by loans that would qualify for such programs (e.g., seriously delinquent loans) will be purchased by Fannie Mae and Freddie Mac at their par value prior to the implementation of such programs. However, if Fannie Mae and Freddie Mac were to modify or end their repurchase programs or if the U.S. Government modified its loan modification programs to modify non-delinquent mortgage loans, our investment portfolio could be negatively impacted.

Effects on our borrowing costs

We leverage our pass-through Agency MBS portfolio and a portion of our structured Agency MBS with principal balances through the use of short-term repurchase agreement transactions. The interest rates on our debt are determined by market levels of both the Federal Funds Rate and LIBOR. An increase in the U.S. Federal Funds Rate or LIBOR would increase our borrowing costs, which could affect our interest rate spread if there is no corresponding increase in the interest we earn on our assets. This would be most prevalent with respect to our Agency MBS backed by fixed rate mortgage loans because the interest rate on a fixed-rate mortgage loan does not change even though market rates may change.

In order to protect our net interest margin against increases in short-term interest rates, we may enter into interest rate swaps, which effectively convert our floating-rate repurchase agreement debt to fixed-rate debt, or utilize other hedging instruments such as Eurodollar futures contracts ofor interest rate swaptions.

Summary

~~The~~Over the past several quarters there has been a relatively large spread between short and long-term interest rates has positively affected our net interest margin. However, ~~changes in~~if prepayment rates remain elevated or accelerate further they could continue to negatively affect our net interest margin and the value of our assets. Furthermore, increases in the Federal Funds Rate and LIBOR could significantly increase our financing costs, which could lower our net interest margin.

Critical Accounting Policies

Management’s discussion and analysis of financial condition and results of operations is based on the amounts reported in our consolidated financial statements. These consolidated financial statements are prepared in accordance with GAAP. The Company’s significant accounting policies are described in Note 1 to the Company’s accompanying ~~Consolidated Financial Statements.~~consolidated financial statements.

GAAP requires the Company’s management to make complex and subjective decisions and assessments. The Company’s most critical accounting policies involve decisions and assessments which could significantly affect reported assets and liabilities, as well as reported revenues and expenses. The Company believes that all of the decisions and assessments upon which its financial statements are based were reasonable at the time made based upon information available to it at that time. There have been no changes to our critical accounting policies as discussed in our annual report on Form 10-K for the year ended December 31, ~~2013.~~2014.

Capital Expenditures

At June 30, ~~2014,~~2015, we had no material commitments for capital expenditures.

Off-Balance Sheet Arrangements

At June 30, ~~2014,~~2015, we did not have any off-balance sheet arrangements.

53-51-

Inflation

Virtually all of our assets and liabilities are interest rate sensitive in nature. As a result, interest rates and other factors influence our performance far more so than does inflation. Changes in interest rates do not necessarily correlate with inflation rates or changes in inflation rates. Our financial statements are prepared in accordance with GAAP and our distributions will be determined by our Board of Directors consistent with our obligation to distribute to our stockholders at least 90% of our REIT taxable income on an annual basis in order to maintain our REIT qualification; in each case, our activities and balance sheet are measured with reference to historical cost and/or fair market value without considering inflation.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report (the “evaluation date”), we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (the “CEO”) and Chief Financial Officer (the “CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”). Based on this evaluation, the CEO and CFO concluded our disclosure controls and procedures, as designed and implemented, were effective as of the evaluation date (1) in ensuring that information regarding the Company and its subsidiaries is accumulated and communicated to our management, including our CEO and CFO, by our employees, as appropriate to allow timely decisions regarding required disclosure and (2) in providing reasonable assurance that information we must disclose in its periodic reports under the Exchange Act is recorded, processed, summarized and reported within the time periods prescribed by the SEC’s rules and forms.

Changes in Internal Controls over Financial Reporting

There were no significant changes in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

54-52-

PART II. OTHER INFORMATION

ITEM 1. LEGAL ~~PROCEEDINGS.~~PROCEEDINGS

On May 15, 2015, Hildene and ~~are currently briefing summary judgment motions. A trial date for the action has not yet been scheduled.~~ Bimini Capital ~~denies that~~reached an agreement to settle the ~~repurchase~~case, and on July 10, 2015, a Stipulation of Discontinuance was ~~improper~~filed dismissing all claims and ~~intends to continue to defend the suit vigorously.~~

~~On March 2, 2011, Orchid Island TRS, LLC, formerly known as Opteum Financial Services, LLC~~counterclaims between and ~~presently known as MortCo, LLC (“Opteum Financial”)~~among Hildene and Opteum Mortgage Acceptance Corporation (“Opteum Acceptance”) (collectively referred to herein as “MortCo”) received a cover letter dated March 1, 2011 from Massachusetts Mutual Life Insurance Company (“Mass Mutual”) enclosing a draft complaint against MortCo.Bimini Capital. In summary, Mass Mutual alleges that it purchased residential mortgage-backed securities offered by MortCo in August 2005 and the first quarter of 2006 and that MortCo made false representations and warranties in connection with the ~~sale~~settlement and in accordance with GAAP, a loss of $3.5 million has been charged to operations for the securities in violation of Mass Gen. Laws Ch. 110A § 410(a)(2) (the “Massachusetts Blue Sky Law”). In its cover letter, Mass Mutual claims it is entitled to damages in excess of $25 million. However, no monetary demand is contained within the draft complaint and the actual damages Mass Mutual claims to have incurred is uncertain.six months ended June 30, 2015.

Mass Mutual has not filed the complaint or initiated litigation. Pursuant to its request, on March 14, 2011 Mass Mutual and MortCo entered into a Tolling Agreement through June 1, 2011 so that Mass Mutual could address its allegations against MortCo without incurring litigation costs. Mass Mutual never contacted MortCo to schedule such discussions. On August 22, 2011, the parties extended the Tolling Agreement through June 1, 2013, and on May 31, 2013, the parties extended the Tolling Agreement through December 2, 2013. To date, MortCo is aware of no action taken by Mass Mutual, and the Tolling Agreement appears to have expired by its own terms. MortCo denies Opteum Financial or Opteum Acceptance, individually or collectively, made false representations and warranties in connection with the sale of securities to Mass Mutual. Mass Mutual has taken no action to prosecute its claim against MortCo, and the range of loss or potential loss, if any, cannot reasonably be estimated. Should Mass Mutual initiate litigation, MortCo will defend such litigation vigorously.

ITEM 1A. RISK FACTORS.

~~There~~Except as set forth below, there have been no material changes from the risk factors disclosed in the “Risk Factors” section of our Annual Report on Form 10-K filed with the SEC on March ~~12, 2014.~~16, 2015.

Risks Related to Our Business

Payments to be made in the settlement of a legal action could have an adverse effect on our liquidity, financial condition and results of operations.

In May 2015, Bimini Capital reached an agreement to settle a legal action as more fully described in Note 10 to the financial statements. Although payments under the settlement agreement will reduce the Company’s liquidity, management believes that the Company will be able to generate sufficient cash from its operations to meet the payment obligations as they come due. If the Company is unable to generate sufficient cash, it may be required to liquidate a portion of its MBS portfolio, which could have an adverse effect of the Company’s ability to generate interest income, its results of operations, and its financial condition.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~None.~~

During the three months ended June 30, 2015, the Company issued 9,822 and 4,048 shares of Class A Common Stock to Robert J. Dwyer and Frank E. Jaumot, respectively, in consideration for their service on the Company’s Board of Directors and on certain committees of the Board of Directors. The shares were issued pursuant to the exemption from registration under the Securities Act of 1933, as amended, contained in Section 4(a)(2) thereof.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not Applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

Exhibit No

3.1		Articles of Amendment and Restatement, incorporated by reference to Exhibit 3.1 to the Company’s Form S-11/A, filed with the SEC on April 29, 2004
3.2		Articles Supplementary, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, dated November 3, 2005, filed with the SEC on November 8, 2005
3.3		Articles of Amendment, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, dated February 10, 2006, filed with the SEC on February 15, 2006
3.4		Articles of Amendment, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, dated September 24, 2007, filed with the SEC on September 24, 2007
3.5		Amended and Restated Bylaws, incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K, dated September 24, 2007, filed with the SEC on September 24, 2007
10.1		Settlement Agreement and Release by and among Bimini Capital Management, Inc. Preferred Term Securities XX, Ltd., Hildene Capital Management, LLC and Hildene Opportunities Master Fund, Ltd. Dated May 15, 2015.*
31.1		Certification of the Principal Executive Officer, pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the ~~Sarbanes-Oxley~~Sarbanes Oxley Act of 2002*
31.2		Certification of the Principal Financial Officer, pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the ~~Sarbanes-Oxley~~Sarbanes Oxley Act of 2002*
32.1		Certification of the Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the ~~Sarbanes-Oxley~~Sarbanes Oxley Act of 2002**
32.2		Certification of the Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the ~~Sarbanes-Oxley~~Sarbanes Oxley Act of 2002**

101.INS			Instance Document***
101.SCH			Taxonomy Extension Schema Document***
101.CAL			Taxonomy Extension Calculation Linkbase Document***
101.DEF			Additional Taxonomy Extension Definition Linkbase Document***
101.LAB			Taxonomy Extension Label Linkbase Document***
101.PRE			Taxonomy Extension Presentation Linkbase Document***

Filed herewith.

Furnished herewith

***

Submitted electronically herewith. Users of this data are advised that, pursuant to Rule 406T of Regulation S-T, this interactive data file is deemed not filed as part of a registration statement or prospectus for purposes of sections 11 and 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities and Exchange Act of 1934 and otherwise is not subject to liability under these sections

56-55-

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BIMINI CAPITAL MANAGEMENT, INC.

Date: August ~~8, 2014~~5, 2015		By:	/s/ Robert E. Cauley
			Robert E. Cauley Chairman and Chief Executive Officer

Date: August ~~8, 2014~~5, 2015		By:	/s/ G. Hunter Haas, IV
			G. Hunter Haas, IV President, Chief Financial Officer, Chief Investment Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer)

(in thousands)
Derivative Instruments and Related Accounts	Balance Sheet Location	June 30, 2014			December 31, 2013
Assets
Eurodollar futures - Margin posted to counterparty	Restricted cash	$	3,992		$	2,557
Payer swaption	Derivative assets, at fair value		1,200			-
		$	5,192		$	2,557
Liability
Payer swaption - Margin posted by counterparty	Other liabilities	$	(1,266	)	$	-

($ in thousands)
Eurodollar Futures Positions (Consolidated)
As of December 31, 2013
	Repurchase Agreement Funding Hedges								Junior Subordinated Debt Funding Hedges
	Weighted			Average					Weighted			Average
	Average			Contract					Average			Contract
	LIBOR			Notional		Open			LIBOR			Notional		Open
Expiration Year	Rate			Amount		Equity(1)			Rate			Amount		Equity(1)
2014		0.40	%	$	262,500	$	(189	)		0.35	%	$	26,000	$	(428	)
2015		0.80	%		275,000		(146	)		0.80	%		26,000		(176	)
2016		1.90	%		250,000		1,367			1.74	%		26,000		9
2017		3.03	%		250,000		2,291			-			-		-
2018		3.77	%		250,000		1,575			-			-		-
Total / Weighted Average		2.02	%	$	257,353	$	4,898			0.89	%	$	26,000	$	(595	)

($ in thousands)
	Option			Underlying Swap
					Fixed	Receive
		Fair	Months to	Notional	Pay	Rate	Term
Expiration	Cost	Value	Expiration	Amount	Rate	(LIBOR)	(Years)
≤ 1 year	$1,520	$1,200	11.5	$100,000	2.38%	3 Month	5

(in thousands)
Offsetting of Assets
										Gross Amount Not Offset
										in the Balance Sheet
							Net Amount			Financial
	Gross Amount			Gross Amount			of Assets			Instruments			Cash
	of Recognized			Offset in the			Presented in the			Received as			Received as				Net
	Assets			Balance Sheet			Balance Sheet			Collateral			Collateral				Amount
June 30, 2014
Derivative asset - Payer swaption		$	1,200		$	-		$	1,200		$	-		$	(1,200	)		$	-
December 31, 2013
Derivative asset		$	-		$	-		$	-		$	-		$	-			$	-