Bimini Capital Management, Inc. (BMNM) Q3 FY2025 Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Bimini Capital Third Quarter 2025 Earnings Call. [Operator Instructions] Please be advised today's conference is being recorded. I would now like to turn the conference over to your speaker today, Melissa Alfonso. Please go ahead.

Thanks, Kevin. Good morning, and welcome to the Third Quarter 2025 Earnings Conference Call for Bimini Capital Management. This call is being recorded today, November 7, 2025. At this time, the company would like to remind the listeners that statements made during today's conference call relating to matters that 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, including the company's most recent annual report on Form 10-K. The company assumes no obligation to update such forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking statements. Now I would like to turn the conference over to the company's Chairman and Chief Executive Officer, Mr. Robert Cauley. Please go ahead, sir.

Thanks, Melissa, and good morning, everyone. The path of economic performance, the level of interest rates and the performance of Agency RMBS appear to have to be at crossroads. During the third quarter, economic conditions appear to shift towards slower growth, lower rates and generally solid performance for Agency RMBS. The labor market, in particular, appears to have weakened significantly over the past 2 quarters and the Federal Reserve interviewed to lower the Fed funds rate by 25 basis points at each of their September and October meetings, although there are hints that it may not continue to do so at subsequent meetings unless conditions warrant. However, other measures of economic performance indicate the economy may not be so weak. Growth as measured by GDP remains well above 0. Retail sales and corporate earnings remain strong. Developments with artificial intelligence have the potential to materially lift productivity and output and the current administration is a profoundly pro-growth agenda, all of which suggests that current softness may be temporary. The outcome will likely emerge over the next quarter or two. While it remains to be seen just which path the economy takes going forward, the third quarter was conducive to solid performance for Agency RMBS -- Agency RMBS market and the company. The sector generated positive absolute and excess returns and the company and Orchid generated positive total returns for the quarter as well. Also, Orchid continued to grow its capital through the issuance of shares of common stock through its [indiscernible] market program, increasing the base on which the company's advisory service revenue is generated. While Agency RMBS generated positive returns for the third quarter of 2025, returns available in the sector remain above historical averages. To the extent such favorable market conditions persist, we expect that Orchid will be able to deploy new capital with the prospects for above-average returns. Like the second quarter of 2025, our advisory service revenues for the 9 and 3 months ended September 30, 2025, continue to expand, increasing by 26% and 35%, respectively, over the comparable 2024 periods. Advisory service revenues increased by 17% over the second quarter of 2025. Likewise, interest revenue for the 9 and 3 months ended September 30, 2025, increased by 17% and 3%, respectively, over the comparable 2024 periods. Interest revenues decreased by 3% from the second quarter of 2025. Our Advisory Services segment generated net income of $2.4 million, and our investment portfolio generated net income of $0.3 million for the third quarter of 2025. On a consolidated basis, Bimini generated net income of $1.8 million or $0.18 per share for this year's third quarter. For the 9 months ended September 30, 2025, Bimini recorded net income of $2.4 million or $0.24 per share. Book value per share as of September 30, 2025, was $0.92 versus $0.68 per share at December 31, 2024. As the fourth quarter unfolds, the market remains generally conducive for both agency mortgage REIT performance and capital raising. Without most economic data available due to the government shutdown, markets are unable to clearly discern the evolving performance of the economy and the Federal Reserve may withhold further monetary policy steps until there is more clarity on the economic outlook. In the interim, the company should continue to benefit from the favorable market conditions. Finally, I would like to take this opportunity to acknowledge the contributions that Frank Jaumot has made to Bimini over the years. Frank has been an associate with the company since our initial capital raise in late 2003 and has served as a director since 2009. Frank has been a trusted adviser since we first met and his contributions will not be forgotten. Frank resigned this past Wednesday. At the same time, I would like to welcome Ashley Griffith to the Board of Bimini. Ashley joined the Board yesterday. He brings a wealth of knowledge and expertise in the financial services industry and the securities markets, and we look forward to his contributions to Bimini as we go forward. Operator, that concludes my prepared remarks. We can now open the call up to questions.

[Operator Instructions] And I'm not showing any questions at this time. I'd like to turn the call back over to Robert.

Thank you, operator, and thank you, everybody, for listening in. To the extent that you have a question that comes up later or you listen to the replay and have a question, please feel free to call us at the office. The number is (772) 231-1400. Otherwise, we look forward to speaking with you at the end of the fourth quarter. Thank you.

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.