Bimini Capital Management, Inc.

Robert Cauley – Chairman and Chief Executive Officer

Thank you, operator. From the data, the Orchid Island Capital IPO in February of 2013 until December 31, 2014 Bimini consolidated the operations of Orchid.

Generally speaking consolidation of Orchid was required because of Bimini’s large share ownership with Orchid, and the fact that Bimini with the external manager of Orchid. Bimini key consolidated Orchid as of December 31, 2014 and as a standalone entity retained its own MBS portfolio and manages the portfolio of Orchid Island to a taxable REIT subsidiaries.

Going forward we intend to discuss the results of operations of Bimini, as if that were two distinct segments: the MBS portfolio and the asset management operations. However market conditions can indeed do influence the results of both operations.

So I would like to spend some time discussing market developments for the second quarter. Before doing so, note that Orchid.

The Orchid portfolio is managed in much the same way as the Bimini portfolio, while portfolios were position with the same market exposure ending the quarter and then results were similar. As we entered into second quarter the Bimini portfolio had a significant allocation to prepayment sensitive securities.

In the case of our pass-through portfolio this made high coupon fixed rate securities. With our capital allocation to structured securities, this made interest only and inverse interest only securities.

In sum we were positioned for a continuation of some good prepayment speeds as we had been since early 2014. Given the rally end rates that peaked in late January and early February.

We expected an uptick in prepayments early in the second quarter. This is in fact, what occurred in the prepayment speeds of the portfolio for March reported in early April, jump substantially.

We had already absorbed a spike in the Mortgage Bankers’ refinance index in January, but the index value had quickly retreated below the 2000 level six weeks later. We expected April speeds released in early May, when it’s still be elevated, but we expect it speeds in subsequent months to retrace just as the refi index has.

This has not been the case. April speeds were essentially equal to March speeds and the May and June speeds have remained elevated.

Given the construction of our portfolio, the impact of faster speeds is installed in many ways. Bimini amortization increased substantially and the performance of our structured securities portfolio composed of all IO and inverse IO securities and therefore, very sensitive to prepayment speeds muted their ability to offset the negative price pressure on our pass-through securities as rates rose.

This was especially due to the curve steepened during the quarter and longer-term rates increased the most. These rates have the greatest impact on the price of our pass-through securities.

Fast speeds were not the only problem we faced during the second quarter, Agency pass-throughs widened in spread to comparable duration treasuries or swaps in June. The widening between 5 and 12 basis points depending on the benchmark exacerbated the performance of mortgages versus hedges.

And finally, the market continue to price in even more dovish Federal Reserve for the balance of 2015. Fed funds futures to a December move from 39 basis points at March 31, 2015 to 29.5 basis points on June 30, 2015.

In sum it was a charging quarter to be a levered MBS investor. The mortgage widening we experienced in June is continued in July.

Turning now to the performance for the current quarter, Bimini generated net loss of approximately $1.5 million, while the consolidated operations of Orchid and Bimini generated net income of $12.9 million for the three month period ended June 30, 2014. Excluding the results attributable to non-controlling interests, Bimini generated net income of $3.3 million for the three month period ended June 30, 2014.

For the six month period ended June 30, 2015, Bimini generated net loss of approximately $2.9 million while the consolidated operations of Orchid and Bimini generated net income of $18.2 million for the six month period ended June 30, 2014. Excluding results attributable to non-controlling interest, Bimini generated net income of $5.7 million for the six month period ended June 30, 2014.

The balance of our non-asset management results consist primarily the retained interest of our former mortgage origination company. For the three month period ended June 30, 2015 retained interest were marked up by approximately $1.1 million versus a positive mark of $2.3 million for the three month period ended June 30, 2014.

For the six month period ended June 30, 2015, the market deposit $2.5 million and for the same six month period ended June 30, 2014, the market deposit $2.4 million since Bimini no longer consolidated to Orchid. Bimini recorded a $2.0 million mark-to-market loss on its shares of Orchid, $0.5 million of dividends on the same shares and $1.0 million of management fees for the three month period ended June 30, 2015.

For the six month period ended June 30, 2015, Bimini recorded $1.8 million mark-to-market loss on its shares of Orchid, $1.1 million of dividends on the same shares and $1.9 million of management fees for the three and six month period ended June 30, 2014 these items were eliminated in consolidation. With respect to the portfolio of Bimini the average size contracted slightly from $115.6 million in March 31, 2015 to $107.8 million at June 30, 2015.

The change in the portfolio strives was all attributable to runoff as no securities were purchased or sold. The capital allocation between the two sub-portfolios changed this quarter from 57.4% pass-throughs and 42.6% structured at March 31, 2015 to 59.4% pass-throughs and 40.6% structured at June 30, 2015.

The slight change in the capital allocation does not represent a change in our investment strategy. As disclosed in our 8-K filing on May 19, 2015, we entered into a settlement agreement related to a litigation matter under the terms of that settlement we made a significant cash payment in early July.

We therefore allow the portfolio runoff to generate the needed cash since we achieved our cash position as allocated to the pass-through strategy it appears as though we shifted capital to that strategy. This was not the case and we expect the allocation to structured securities when rebalanced over the near-term.

With regard to the litigation matter I just mentioned the company will make additional payments over time. Once completed the total of all payments will be $3.5 million.

Given the considerable time and resources committed to the matter close to-date and expected in the future management [indiscernible] was the best course of action. Pass-through portfolio generated 11.0% loss for the quarter not annualized the loss consisted of $0.9 million of net interest income.

$1.8 million of unrealized losses to minimize hedged – mark-to-market gains. Our structured securities generated 14.1% return not annualized consisting an interest income of $0.04 million and $0.8 million of mark-to-market gains.

The two portfolios combined generated negative return on invested capital of 0.3% for the quarter, again, not annualized. And with that, now I would like to discuss the results on the asset management side of our operations.

Orchid Island raised $67.1 million of additional capital during the three month period ended June 30, 2015. The shares of Orchid are currently trading as substantial discount to book value and we do not believe the go-to-market will attempt to issue additional shares in the near future.

In fact, Orchid announced a 2.0 million share repurchase program last week, so its capital based is likely to strength over the near term. In any case, Bimini received slightly over $1.0 million in management fees for the current period and based on the mortgage current size even with the share repurchases the level of management fees going forward should remain at or near this level.

Through the overhead shares of Orchid Bimini also receives approximately $0.2 million to $0.3 million per quarter. Revenue was recorded at our TRS Bimini advisors which is a tax paying entity.

Bimini advisors has net operating loss showing in the calendar year 2015 although these NOLs maybe consume this year, in this case Bimini advisors may incur a tax obligations. Going forward and assuming these NOLs are in fact consumed to 2015.

We anticipate on an after tax basis Bimini advisors will continue to make a significant contribution to the results of operations with Bimini. Accordingly we will continue to address its results on a standalone basis.

Enormously on shares and Orchid will continue to marketing shares to market as well, and the impact maybe significant as it was this quarter. However, we do not consider such unrealized gains or losses that integral to the results of Bimini advisors and will address such gains and losses in our discussion of Bimini’s portfolio management operations.

Similar to the way we treat mark-to-market gains on the retained interest of our former mortgage origination company. We will treat dividends received on our Orchid shares in the same matter, Bimini is held 981,665 shares of Orchid since the IPO in February of 2013 collecting $4.7 million of dividends through June 30, 2015.

Orchid recently reduced its dividend from $0.18 per month to $0.14 per month. At the current level Bimini will receive approximately $0.4 million dividend per quarter.

Looking ahead we continue to anticipate the Federal Reserve will begin the process of policy normalization, which will entail, among other measures, increases to the Fed Funds target range. Recent events continue support a strong dollar while commodity prices generally in the price of oil in particular are quite weak.

While we still believe the Fed is anxious to get off the zero-bound in interest rates, we believe the path of Fed Funds target rate over the next few years will be shallow and reach a lower terminal rate than it historically has for a Fed tightening cycle. In any event, increases in the Fed Funds target range are likely to result increases in LIBOR rates, which are tied to the company’s funding costs.

The company utilizes Eurodollar futures to hedge its funding costs, although it does not imply hedge accounting for GAAP purposes. For GAAP, our funding cost will rise as short-term rates rise and there will be no hedge offset.

However, to the extent the corresponding hedges increase in value as LIBOR increases, then we expect to experience positive fair value adjustments associated with the funding hedges. That concludes my prepared remarks, operator we can turn it over to questions.

Thank you, operator. If anybody does in fact have any questions that come up over the course of the balance of the day or the week, please feel free to call us at the office.

Otherwise we look forward to hear from you next quarter. Thank you.