BMNM - Earnings call transcript Q1 2018 | Bimini Capital Management, Inc.

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Operator

Good morning, and welcome to the First Quarter 2018 Earnings Conference Call for Bimini Capital Management. This call is recorded today, May 8, 2018. At this time, the company would like to remind the listeners that statements made during today's conference call relating to the matters are not historical facts are forward-looking statements subject to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Listeners are cautioned that such forward-looking statements are based on information currently available on the management's good faith, belief with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in such forward-looking statements. Important factors that could cause such differences are described in the company's filings with the Securities and Exchange Commission included in the company's most recent annual report on Form 10-K. obligation changes such in in affecting statements. no reflect statements other assumes forward-looking results, actual assumptions company to forward-looking update to factors The or changes

the to Robert Mr. Sir, please conference Now Executive Cauley. turn head. would and Chief like over I to company's go Chairman Officer, the

Robert Cauley

we The quarter portfolio revenues slowed the experienced first at and both you, operator. recently segment RMBS Thank our XXXX. the of significant growth in advisory services during

advisory year, from takes During is financial services it the the of growth Island segment precluded that each up subdued is revenue goes the quarter. first raising Orchid as typically year-end of reporting process usually in quarter most while through Capital the capital

stocks are trading discounts Federal thus capital book substantial Reserve precluding generally value the to the an in REIT interest raising. of at With cycle, midst rate tightening

result, fourth the services generated that generate tax losses generated redeployed like going was largest As registered ever. Nonetheless, fourth X% segment the revenue the quarter to quarter net portfolio at flows revenue, capital quarter. during of quarter services consume investment lower base our a to Bimini grew developments and the Palm fact of simply be Also, taxable to advisory at performance $X.X Orchid portfolio million continue reflecting the the before only investment over into advisor, into that this Advisors, operating can our at advisory entering approximately Royal XXXX, we MBS point, MBS I'd available cash the of Royal income At our Palm. Capital. review the macroeconomic

The to the pricing within Treasury The market inflation the budget rate expectations years Starting participants the by their first market deficit the the and a time at legislation X% few six caught in surprise data pressures hikes Treasury of finally XXXX. coupled of the U.S. led reacted rose rates environment forcefully, interest points over XX-year weeks XXXX As appeared, the the January, few changed. materially for market of first that market specter Washington came the curve in out future with by the and quarter. economic Reserve. Federal next evidence basis got early of steepened for the quickly REITs over reconsidered and underway, since

For the their officials consistent Fed continued rate very support hikes. part, for were gradual in

was was While different Treasury outlook close the of by to end one and the was rate last only market Labor the hike much by February XXXX. Day, X% more expecting the XX-year XXXX, of

futures, of hike in from stabilized. The hikes the April Trump with March order essentially X.XX% steel two prospect turn These even U.S. trading case latter were reversed was addition in more counter the and spooked rates in early and as off Funding have interest trade fears to The primary markets rate less emerged more and equity XXXX. index, and markets rates than at counter of May a the the pressures market diminished to the threats. meaningful markets in short-term the sold reflected war LIBOR the rallied. in in expects moved market XX, potential into met by Fed on administration funding and the and more LIBOR, This tariffs from threats from The aluminum. short partners three-month followed announced fund rate administration. all the threats imported in XXXX XXXX by the early As X.X% approximately late of in in floating March. February, end the as in selloff March in

in least remains markets economic Fear again markets markets market officials by at strong XXXX. market earnings The both way Fed With the strong. markets been the data. has these up since in treasuries. have first pronouncement potentially flare rates market. agency equity The supports the significant data more generally the the of in have fears performed expectations and Volatility throughout a once down the market. focused hikes rate quite was that and recovered the in spiked Syria, in from end rates worse and case suffered short-lived, come reduced the of mid-quarter, than comparable mortgage quarter substantial Equity far back very and the and on public quarter have receded in mortgages announcements but has most two duration

other the quarter for and fourth first basis the assets a was XXXX trend rich reversed of benefited, XXXX. of While as in quarter risk quite appeared agency quarter great relative mortgages a MBS, on this

forward, benign help should resulting by the supply the and fears of Going the are Reserve. offset reduced purchases mortgages in drop-off prepayment very new Federal

the progressively leverage was consistent by with as to for the The generally. market returns mortgage old are funding to of mortgage flatten, remain portfolio in Royal driven higher we the weak. rates agency curve likely However, in Palm performance the market mortgage observed investors, continues what

negative allocation of combined underperformed portfolio XX.X% for pass-throughs XX% to coupled the The generated that pass-throughs, pass-through balances, XX.X% a negative but approximately capital from hedges on led was in acquisitions generated of return, and the our fixed-rate downs return pay that need we of positive to to securities needed portfolio coupon limited XX% portfolio. maintain the the fact Because activity X.X% the higher margin replace to investment and Our a our developments adequate return. structured a the resulting with quarter. of MBS our these call returns on structured and received to cash favor new

million we to cash is mart hope The XXXX. second resume to in XX, adjustments, declined and quarter – portfolio approximately a of stabilized result as the in soon portfolio the $XXX net flow of market growing the has so $XXX XX, far company positive. approximately market negative value March from December As as at the mark-to-market XXXX, million otherwise

well simply Interest X.XX% cost, fourth as during quarter expense for rose the quarter and the average quarter. contraction to XXXX, spread fourth per first of quarter-over-quarter the XX% investors XXX fixed by and quarter. of first the well X.XX% market the was the in its summarize, we approximately quarter for indefinitely, as during XXX MBS We as in of resulted Island points the To cycle for will rates Orchid in the we tightening XXXX. and income basis investment X.XX% XXXX were felt conditions quarter Orchid last $X.XX quarter on points the dividend from rose leading current versus XXXX reduced interest the persist the income XXXX quarter income quarter to does per of first for higher the current sequentially to Developments like had portfolio stand in to basis Fed's portfolio pat mean not managers to dividend Bimini. and market from eventually interest yield do month our anticipate always not in for end. X% the With more it of versus end, was $X.XX in MBS attractive a reduction these This fourth challenging quarter a month wait hedging reflecting the XXXX. This and quarter will X.XX% versus to of a environment.

are enabling our utilize portfolio flow taxable our operating to MBS to losses. to income, us grow We will continue our positive continue taxable and net thus cash and

and with which substantially. and between content six though not portfolio has performance even the last $X for Bimini services MBS $X of languished are have our quarters we importantly, grown price revenue More of stock, advisory

flow trading and market are to the the more Bimini we acknowledge the we book stock small, modest, of volumes reflective fundamental or for be even basis. on expect that stock multiple of a value daily While price is Bimini value

price goal $X.XX on value per book As to was XX, a increase stock, share providing offer a of would but we a in the chose result announced over inactivity a stock repurchase pre-tender to share. and levels. share with followed prolonged XXXX, in possible regular because period option the be of the onetime the price Bimini's feared tender program in a March the bid decline late March, basis. of the by tender we We a In repurchase of stock

depress share We net that and for to while buyback forward. call indefinitely repurchase enhancing certain questions. investors' the and taxable a after out be maximize and several may now intrinsic ended Thank will bid languish will the harvesting volume recognize stock thus constraints, to take going a in volumes. to we trading will stocks, program, stock or price option provide of tender trading years of and to there strategy the and losses of stock in the share the also hopefully value. subject the the our price below you, us the daily feel the operating We would periods feared best to further the supporting volumes The stock. open allow inhibited might in trading and light We volume trading process ability move regulatory tender stock is

Operator

Please line question first Management. Our Instructions] from ahead. go Jack [ph] your [Operator from you. open. Sir, Wealth Moreno Thank comes Colorado is

Unidentified Analyst

the Robert, price purchases Hi, Island policy in of since executives of requiring ratio began open open market if NLY favorably a similar for Annaly wonder Bimini market. perform then. of Orchid buy has quite to The to seemed a considered I policy to Capital? book shares

Robert Cauley

if for policy, not bonus portions under typically stock, have XX%. then am sale few just of it's material We done an now I'm registered What we do we our take We securities, even mandatory have last years. of we in do although them. personally have in currently which is a to bought paid cash. buy close the

acknowledge Both share also stock. same the had very and particular simply over the we're issues competing think as certainly the have prevent us for Hunter certainly The are it Annaly where among I with easy but we some then shareholders is stock of and very kind – shares, as place, from value of in company public larger doing Annaly. in it's the the time. the it I do interest any exact REITs, liquid as plans. and largest, just our or to plan not of strong that's trade, with of so of buyback So we circumstances there as fashion kind large accumulate shares types a vested the those in not

doing thing. we're conceptually, same the think I Although

Unidentified Analyst

That's Okay. great.

considered for substantially place ORC MBS, Has say of the expanding when has been MBS agency quite ORC than Your in at few XX%? over trades discounts years. portfolio last Bimini greater buying

Robert Cauley

fact have represented was said. a did considered in and that two done to think, just three the it substantial ago. Orchid substantial as trading year occasions, we – and was better shares. The discount, took stock, we allocation portfolio Yes, we've last time, a We a about that own of and at portion advantage bought return Orchid When substantial so. or we on of agency so a one than I

Unidentified Analyst

How exposure All last end on be we Bimini's And at of at one currently to one. as portfolio looking should the then opposed the right. duration QX?

Robert Cauley

underperformance the Certainly mortgages. the and extended of in with sell-off QX

and was pass-throughs then to will of the course the type to through taken of address own. have hedges probably would just get the that We or within of we and and quarter, a assets undone in but We're all trying both it mortgage between for allocation of investors. the quarter by process, rough steps that, types end halfway the structured

our we'd at down in how look basis a the I and Barclays be years of the first then a think – you our just fact, how to sense basis. used I – modeled now Bloomberg XX if the in worst In shocks on – would to Lehman up respect the in perform quarter known rate profile XX Index, and to we Mortgage point hone to quarter. give the the as right like what With a as instantaneous now, had looks

lower duration tends empirical the to model little bit Our a duration. be than

So beginning much it although gain lot the similar it, or first quarter. second That in down looks to and mortgages is wasn't in where $X.X in us more of on in X/XX, less a bleed problem shock, quarter up call off $X.X XX It million XX a in performed it of so have would we roughly an million. we duration shock, was for general a the like the better.

the mortgages really the was we tend the concerns of we're and among Palm that But really attributed way second to at keeping been types flow It and hedges of with better, the net the a quarter the type certainly underperforming, to portfolio, sector number reasons, products. long. rate widening fact the just Royal more to the a hedges mortgages in place Although, things, where underperformance interest other little put of same much not have the phenomenon have just a bit ability has duration cash of for we manage in pace first so quarter to was were much were across the just it hedge the level.

Unidentified Analyst

All the great. guys. right, for Thanks color,

Robert Cauley

Thank you.

Operator

from JPL from And our Nikolic Lazar question Advisors. Thank you. next comes

Your open. ahead. line go Please is

Lazar Nikolic

Hello?

Robert Cauley

morning. Good

Lazar Nikolic

I'm call. I would talk trading given alternatives, it the just whatever more you revenue do somebody stock or else It's his company own these and manager low. why the not thing $X outright all, and from you I and ORC it And very at about about my the price strategic thinking guys not mean, public, I perplexed you market a love some quite I an some this to shareholder Hi, do am where it being be Bimini allow see, thanks for Are a stock, I revenues. value, to taking being so? there but outright, can in collect would private? have share if not, want. at to given steady and I taking to is as as book trading to isn't external the frustrating, own

Robert Cauley

interested own a share. At substantial am selling not. to out personally least, position, not somebody I taking not at do we're are very We it and $X insiders although a in private, considering

I the understand to the and portfolio what the strategy component in pay redeploying don't those that advisory think for revenues a access of strategy because to to services the public cash is we big is take and on but it merit, ability rationale want portfolio levered I and itself revenues funding, While to saying, our grow we're it, keep going that a flows a company the we you're idea do into to have from mind that predicated holds so. being taxes, requires

in firms We lot that Wall to us and we're very lenders. costly leverage. public, even the cost A pretty of with of there high no offsetting and money Street there's is be number that dollars, into hurdles. a fact company lend would though it's continue fact a what have hedge, benefit, We appears swaptions have explicit to that run funding. enter doing so access or swaps in to interest held have only to so pose you to rates also very substantial you as and euro Not you small have that, is a but benefit, privately

In fact, to could get own up if your do you put you might be collateral. to having assets, personal that, as somebody

we So are you're hedge the markets but instruments. those public entails if they're substantial it on good income surface critical it fixed and maybe doesn't look a costs, running portfolio is benefits and recognize there and because access pretty that so requires levered funding especially to

Island by believe publicly-traded we which deal client, me and our The lends external were signed just for, Let Capital asset also nationally that important the speak, known as credibility so that up company they manager. to add it firm. audited most was is a Orchid to a we're we

as own And to to asset expectation so manager audit has the scrutiny while the Orchid was that – also have was its well. undergo going audit, they

Lazar Nikolic

a stays – it documents, Bimini the expectation in But public? That there that is was was the requirement? that

Robert Cauley

– it's Yes, but in did we anticipated. fact not when was requirement, a it

the most frankly Orchid, significant and was viability did we underwriters, Orchid in of In the the of the the of manager. eyes fact, and when the IPO risks one investors Island, of in sustainability

perception, not being important maintaining is very component – that that public but just status. maintaining of So

I would even step take In one further. fact, it

stand-alone across asset look not manager There the REIT the balance with of few are company REITs are are viability aligned LLC, they a is is. itself. you manager space, and closely of the space, the are that of for If Bimini REITs. REIT They managed externally-managed more the size but as an by the critical other a

Lazar Nikolic

And the view, and going – that Right. levered of doing up shareholders, is shareholders. from is the you're the of steadily you my there valuing – situation I current some. a the stock saying not need the it in thing the insiders, because mean, alternative volume no the at nothing, of like this salaries status any strategic are any I all MBS for and strategy then it's valuations, don't of current mean, non-insider for kind market good seems some trading, just is is point zero oh, prices for are because that at because frustrating ripe in

Robert Cauley

NOLs, realized, income differ. relatively frustrating, what's net the five generate mid-to-late that they the of how $XXX a be value the and be on all the it's Even consume that million, have have who stock, play. beg in that knowledgeable the with outside we languished, recognize next this realize of will with million quite to I basis, and we're the with, frequent by those the and realize At lot of decade. a to at day, which the large but $X.X NOLs. in fact the would done XX and value of holdings, investors insider stock a to homework the We been it's of stake of of realizing touch will investors Well, gleaned has fact to taxable services revenue long-term advisory end expire company are

going strategy not to it's play years, is of months, lots this out So in years.

that And fact. so lot shareholders understand that of that recognize

the instant trades to new to see are is stock at Some the gratification, book the $X.XX. and they value $X.XX but story, more want

book, but share, value that's or if multiples $X that, higher of So book share discount than going meaningful a comes $X that. going fruition, to be it's this strategy the a to to be a to isn't substantially

viewed And so of a investment. equity it's kind private as

a for that's So this quite a may if going is to get play return, short-term you're something take some, I to while think but out. more you looking

years of NOLs. that, size equity, of If and $X to still the all use the you tripled would took Orchid would generate billion many to fees management to the of that it billion $X.X require

pop done it's conceptually long is be we considered and And track. would doing away that you the because a it's and nice and of you you great did a said, as tenders. has I the realizing you're still that stock, tender, still think market tenders and as the to over upside I profit. get liquidity I those while think upside, a first get runway or this one think, so have discount make the said, would have much think be a book. to out event, people still It's have on return impact that a it would would I but at tender premium offers, a maybe diminishing we consider two, suggest a price successive but rapidly book, there I that whatever – much, be from it's did are I idea in get – there the those you nice So long done would And a and current I participation, at you you term. long a suspect if years would

stock So as progressively second, a got closer get try make the forget successive to about NOLs we as say as the less result, it but to I tenders value. book to these value book then drive higher, progressively participation, stock the have maybe suspect price realizing the price to that would up for and to sense and the might

harvest certainly any $X capital to maybe a the kind interested first, a or share. consider of in not at raise capital raise but NOLs So be and we accelerate growth a $X we the are able to

Lazar Nikolic

overhead? grows, going the revenues to I capped a revenue expenses, increasing this thing the shareholders. willing will to some up or and How Are for up? there's value one kind it of left as up, a commit be is G&A corporate keep the the goes level is happy but to salaries overhead risks The the keep this where about of will salaries, nothing you're go you the here the the comp, mean, trap,

Robert Cauley

and accounting most out legal accounting work, of Well, our those. our portfolios they grow because and them size I back you staff – portfolios, our typically we and our than I work, staff. staff the we needed probably far trading overhead but do outsource have the asset the the managers. outsource don't hope two We we work And tax and grow complexity, do, staff outsource the requires outsource grow, other our to more We our mean certain our we fact outsource work. lot line. we – what more, we are substantially think a salaries of the than outsource assets, to it in the and grow repo, you outsource office. We of complexity, still as it's

We tight. legal work, have work portfolio Xx becomes the pretty, pretty but I operating if – the bigger, tons And of portfolio or leverage, Xx mean we're and don't going structure a there's just, it's if granted, and cost it's to – out for think line the manager, I our have a think I don't typical need all. at more asset of of we're staff that audit

first any on our net G&A. first from in the increased by outpaced certainly XXXX revenues basis, to XXXX revenues uptick net Our a and XX% dollar quarter quarter

I the appreciate company we're but you So even of late. fact in saying, it's seeing of the in off tapered what are spite growth that the

ISS some point of of also can I this and topic kind because the hot services, them. it's other and proxy issues one a So to shareholder with the of is the that

that that we from is management Island. proxy. Orchid of not in that case the required, received compensation the percentage levels we not to directly and Our but fee that's suggest as the fee tied management often have show they so the a or and the I number, comp it's me That's would look at with managers. number other have of if the in trend, I don't across quote of you think at asset look what but out you think that I can't line alarming you see don't and I that front

Lazar Nikolic

taking for my questions. thanks Okay,

Robert Cauley

Thank you.

Operator

comes Our Thank Ribe you. [Operator Gary question next from Consulting. Instructions] MACRO from

Your open. ahead. line Please is go

Gary Ribe

Bob, you? Hi, are how

Robert Cauley

morning. Good

Gary Ribe

taking – and appreciate the have an and significant your your company I questions ownership you taking is asset, Good, you calls private change. I about don't NOL stuff, I know guess because and most can't

repurchase. So focus to like, I'm I of going the of not that understand and on questioning, on would don't I to line that, focus kind but share like whole

at it in couple here price mark-to-markets in guys Orchid you of it makes got rate, little misunderstanding in guys and harder and makes share the and like income got core feel XX,XXX the tax you've of got you question maximize place maybe that woo-hoo. going Xx if is, really the I and a find which taxes that? buyback for you've earnings. provisioning accelerate blocks? people my first Can shares I this I the are to weeks, and to $X.XX earning puts you statement, can to you are the really run go value What think guys close this get a you for Because you're do I've guess are on per-share did messy which on your the sense you and Am it portfolio, the financials sense to Your you try even with with a company, understand wondering be loss, are be. and to to kind you can is that just or about aggressive down thinking – I as that. as of what realistically I'm what

Robert Cauley

– – No, things not the the you're income. way the one income of works. just the address of A consumption simple just basically thing. That's provisioning to showing GAAP I for misunderstanding. NOLs that's extent to The you tax have don't couple the just the

change that but problem float, can't float you a have it's with NOLs we if how payment, – is control. traded so be mentioned doesn't. the small telling it there regularly no really, cash shares trading a So there's if of caller. income of the provision it's a as XXX,XXX to is it And stock you to just would every It have basically part because for back just problem think volume. The can't be great this last though tax materially I And even things is little increased there it's XX,XXX the much of it. very gets day, the is that used a the

if The we even issuing probably they know filers, all that right is so, don't address XX own, recognize every owned lots value, $X.XX to and So or of out the I are will we what stock, I lot I X% they long can't private insiders, probably the entities know not selling think, equity at Form don't issue. time. the for it's don't calls they there just though Bloomberg. five a be there I probably fairly it know six will there own five in stock file, that share. what over like hard months don't that plate. reflects hold, or so realized, the people but of a they're but realized, trading, float time. they interested – of because a the get start a fact This on What it listed It's that of below period I if and they've level. has is know upside, it to long

in So of stock you the if regs, buyback, not share the trade familiar the average know you're interim? volume with we opted traction than XX% get trade more open, the volume how much. then do be We'd at a is percent and that can't we in – for can't you the trading and

trading happens, investor the considered financials is us get last onetime some our I start value to activity, kind look and and next I just hard. and it's the number the years, and to great if value, probably And ability of a up see just you to tender, fact, behavior you you it's what's around yes, said, it activity. book ever wait price and then at least just We even the few over give is think Who not $X. think great, does stock book a want like bid. the at the Then languishes a I after but that thing. are last if a at regarding you the to X, valuation the they be get condition the the the goes the market allowance NOLs say bigger okay, than So and of tender, to can't up, then value? buy We to to but book above a tender price, deferred it always in the asset it's $X.XX, and a less tax lot but have that's say completely consumed certainly

Gary Ribe

guess, don't X.X – that? remember I authorization you're problem is, like million Something could you I what shares? I buyback what do, it I'm saying, wondering is, overtly a The with is agree don't what the

Robert Cauley

Yes.

Gary Ribe

against and the looked a sell I for why was can it surprised to your enough volume, a to $X.XX then other look do for I you like to model like, go you could whatever was the make well... I the I your and dent is be back anyway Because balance XXX valuation you going not $X.XX do I the it what, mean $X.XX, to able someone have company, in is. $X.XX? have sheet, mean, way willing or was, tender I – you're activity allowance is If the out when be I out that didn't market at generate the at at to so not you I bid a NOL in meaningful When at they and both.

Robert Cauley

Well, we do.

Gary Ribe

I pretty accounting upon take are know rules you can that how stringent the off.

like, at see let model whole and we I and well So get any do darn thing. there, was get and getting if by the how you there, shocked Orchid, issuance myself meaningful out through I me you

to like value to the on front seems maximize it per makes be just, end. So it of to the me company, share the sense aggressive

Robert Cauley

retention mean, grow valuation of do. deferred to earnings. do have I I'm I the whole allowance organically portfolio through we a it's, follow I the tax sure asset, And Well, we is mean against that. not absolutely idea

slows the be of So deployed NOL. preponderance XXXX. is back the the gain the essence use NOLs how lie, these could or case utilizing much to go away long-term of in NOLs which And the a short-term Palm, because at stock is of it's time now Royal to XXXX buy where share? portfolio you the start in The capital of that's $X.XX would that the down goal

the they and of get of amount still but – we Act use indefinite our all still an and grandfathered where to with them, have under time, Tax the away. Jobs don't were do go time keep NOLs You Cuts we

time not always grows, revenues faster, grow but essence. the growing. the may of So If Orchid is Orchid be

We are tightening in Fed We without a a the midst could go or growth. cycle. meaningful of year two

it's to So want getting versus to achieving you as upside. to use stock a short-term to all flow that's the of growing in can best more up way longer-term to the getting three NOLs much greater there To most important we focus that which the the get us cash goal, to or get has where go. portfolio months. to like price and me, Like in seems much next fast myopic as me, the $X.XX in

Gary Ribe

longer-term per-share is... the value that maximize and the should the goal of But be to company,

Robert Cauley

And stock you far back, the you you in more so our in greater that and NOLs. minds. realize capital in get to less long deploy by get the harvesting up timing, done is question the up which now, of is term, the short the term, the more buy the price a There's the

Gary Ribe

perspective my like trading Okay. X.Xx as earning. I mean, that your at on

is So earnings a ridiculously your on yield good. buyback

the NOL maximizing the value the same that so be those my point And not and the company, per-share the value of sometimes of may is thing.

Robert Cauley

know. Okay. I don't

Okay. I don't but if know with to we can that, I but... disagree, agree agree

Gary Ribe

it's you end. earnings the share an yield I and that buying, back are mean, it's the on value per

some maybe for, maximizing there's end. very with like people point for if the So it's a it's are – not would my price, on the that quick it's value understand is that. I give-and-take per-share hit I are, company NOL that say cheap of you the people trading back the looking part. a but are

Robert Cauley

Okay.

Gary Ribe

million NOL, is share, that X probably price. shrank the of of XXX% the if to the trading current years, $X next you're float Because you own you over earning shares you a which model XX more the out,

Robert Cauley

Okay.

Gary Ribe

you right, guys will All Thanks. I alone. leave

Robert Cauley

All right, thank you.

Operator

Thank you.

Jack question from Our Colorado Moreno Management. next [ph] comes from Wealth

Unidentified Analyst

or stock. there's warrants, the follow-up of so viable entity effectively allow external run also and management, ownership that of NOLs. more the is capture to or through I'm Is they NOLs. there profitable convertible through that Is could on acquire any bonds asset guys. transfer deferred profits of sorry those convertible concept that the another regarding another way Bimini in would anything shares the acquire to limitations meaning manager? I to a the there of Hi, know

Robert Cauley

That's a good and idea of. we've certainly something thought that

Our is form wherewithal to acquire even asset stock. another or some with the somewhat manager warrants of limited,

is of the you the the the to do if up an just to company something through time think horizon. the I exercise just large warrant would given to I it, the get that relative through that now the is on inordinately hopefully company. done. cost give But growth, have piece to of that's know size don't that of

George Haas

come that to about to whatever. revenue Certainly, talked grow, the in the and going on our or more the contribute will of something able being amount that up upside really it's all in last that's just precipice are streams an two costing past. and we've of without show we years, exorbitant cheaper to like really money, wants and gotten where think the point of to the run something shareholders we someone I become effectively the the that do capital we've over giving ultimately it to the definitely

Unidentified Analyst

premium to When more That's oftentimes many than Orchid smaller then get From insight. a mortgage the REITs efficient is that you guys having some this trade true one other and Okay. value Orchid able to of space. is in to have peers? the considered stronger material a it Orchid relative peers, And of less book the doesn't presentation, great Orchid premium question. relative acquire at

Robert Cauley

the two that where a got bigger lot the rapidly us. doubled And be like than Orchid. just a thing are that of table that smaller to pretty beginning much any on there's are to again, go There's of It's extent there and in could period. We've certainly to grow years, unfortunately, That that nobody period, on couple we the ones. could that There's the something the position we table, that's last position smaller. size. other are two-year was case, that really did the that Orchid has acquire is in try someone during the

just such in types did they Two weeks is as just you two Annaly activities last this, MTGE. another view acquired challenge, we a way as entity. a like see. capital or grow acquire that it's as the in Cypress saw that entities acquired typically the The capital just a to raise, You – the those that Harbors opposed and and period We so raising of issue chose are to where capital a us,

is cost The or capital I It ATM an think than $X. using on It's X.X% an $X.XX close XXX% less capital. examples, most was the cheap to ATM very a recent as or the acquisition X%. two actually through that of was cost the the capital. was of transactions capital very expensive

Unidentified Analyst

Thanks Okay, guys. that makes sense.

Operator

I'm showing questions gentleman. this further time, at no

Robert Cauley

someone We us you. next these extent number we for certainly to to you To is appreciate don't Bimini. live had to The the the and to things calls any to talking shareholders. missed or to look the Otherwise, everybody's replay Thank have listen questions. call question, calls that. you, wants time. consideration Thank the feel an – in many and call in We've operator. you interest with have Thank forward we We then XXX-XXX-XXXX. free and – like opportunity has discuss where to a our office. your

Operator

gentlemen, and you event. thank concludes Ladies today's program. for the in This participating

may day. You all wonderful disconnect. Have a

Bimini Capital Management (BMNM) 11 May 182018 Q1 Earnings call transcript