Earnings call transcript: Bimini Capital Q2 2025: Resilient Amid Market Turmoil

Bimini Capital Management, a small-cap financial services company with a market capitalization of $10.14 million, reported its Q2 2025 earnings, highlighting a net income of approximately $43,000. Despite challenging market conditions due to reciprocal tariffs, the company’s advisory service revenues saw a significant increase of 20% from the previous year, contributing to an impressive overall revenue growth of 23.34% over the last twelve months. However, the RMBS segment faced difficulties, reporting a $1.3 million loss. The company’s stock remained stable, closing at $1.01, with no change in pre-market trading. According to InvestingPro analysis, the company currently shows a FAIR financial health score.

Key Takeaways

• Bimini Capital’s net income for Q2 2025 was $43,000.
• Advisory service revenues increased by 20% year-over-year.
• The RMBS segment reported a $1.3 million loss amid market turmoil.
• Shareholders’ equity rose to $912.5 million from $855.9 million.
• The stock price remained unchanged at $1.01.

Company Performance

Bimini Capital Management demonstrated resilience in Q2 2025, despite significant market challenges. The company managed to increase its advisory service revenues by 20%, reflecting strong demand in this segment. However, the RMBS portfolio faced headwinds, resulting in a $1.3 million loss. The company’s strategic decision to sell $9.8 million of RMBS early in the quarter helped mitigate further losses.

Financial Highlights

• Net income for Q2 2025: $43,000
• Six-month net income: $600,000 ($0.06 per share)
• Advisory service revenues: $3.8 million (20% increase from 2024)
• Net interest revenues: 23% increase compared to 2024
• Expenses for Q2: $2.8 million (1% increase from 2024)
• Shareholders’ equity: increased from $855.9 million to $912.5 million

Outlook & Guidance

Looking ahead, Bimini Capital is optimistic about potential economic stimulus from the "One Big Beautiful Bill Act" and favorable market conditions for RMBS. The company is closely monitoring Federal Reserve interest rate policies and hopes for low interest rate volatility and no new tariff developments.

Executive Commentary

CEO Robert Cauley noted, "Markets were in turmoil as a result of the extensive reciprocal tariffs," highlighting the challenges faced during the quarter. He also expressed optimism, stating, "Market conditions generally are quite favorable for RMBS," and emphasized the economy’s resilience.

Risks and Challenges

• Continued market volatility due to geopolitical tensions and tariffs.
• Potential interest rate changes by the Federal Reserve.
• Dependence on stable interest rate environments for RMBS growth.
• Competitive pressures in the mortgage REIT sector.
• Economic uncertainties that could impact advisory service revenues.

Bimini Capital’s Q2 2025 earnings reflect a company navigating through challenging market conditions while maintaining strategic focus on revenue growth and shareholder equity.

Full transcript - Bimini Capital Management Inc (BMNM) Q2 2025:

Conference Call Operator: Good morning, and welcome to the Second Quarter twenty twenty five Earnings Conference Call for Bimini Capital Management. This call is being recorded 08/01/2025. At this time, the company would like to remind 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 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 ks.

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’d like to turn the conference over to the company’s Chairman and Chief Executive Officer, Mr. Robert Cauley. Please go ahead, sir.

Robert Cauley, Chairman and Chief Executive Officer, Bimini Capital Management: Thank you, operator, and good morning. The 2025 had a very rough start. Markets were in turmoil as a result of the extensive reciprocal tariffs announced by the Trump administration on April 2. A week after these reciprocal tariffs were announced, the administration announced a ninety day pause to their implementation. As a result, the tariffs actually in place during the second quarter were much less than initially feared.

And to date, there has been not been significant pass through of tariffs in the inflation data, although it remains to be seen that this will continue to be the case given yesterday’s announcement regarding the revised tariff levels. Notably, the administration’s efforts to negotiate trade deals to date has resulted in reciprocal tariffs far below the levels initially announced. So the market seems far less concerned with their potential impacts for now. As the distressed market conditions abated gradually over the course of the quarter, financial markets and most risk assets fully recovered, although the Agency RMBS sector was an exception. All the mortgage REIT sector companies that have reported earnings to date reported a loss for the quarter.

Our RMBS segment reported a loss of $1,300,000 as well, but our advisory services segment generated earnings of $1,900,000 and Bimini as a whole generated modest net income of approximately $43,000 For the six months ended 06/30/2025, Bimini recorded net income of $600,000 or $06 per share, representing return on shareholders’ equity of 8.7% unannualized. Orchid was able to raise additional capital during the second quarter, enhancing the company’s advisory services revenue going forward. Orchid raised $139,400,000 during the quarter and its shareholders’ equity increased from $855,900,000 at 03/31/2025 to $912,500,000 at 06/30/2025. As a result, Bimini’s advisory service revenues of approximately $3,800,000 representing 20% increase over the 2024 and a 6% increase over the 2025. Further, our advisory service revenues for the six months ended on 06/30/2025 increased by 21% over the same period of 2024.

With respect to our RMBS portfolio operations, we sold $9,800,000 of RMBS early in the second quarter in response to the adverse market conditions mentioned above. However, our net our interest revenues still increased 23% over the 2024 and by 24% for the six month period and at June 30 of the year earlier period as well. As our cash positions have increased over the past few months, we anticipate resuming growth of the RMBS portfolio in the near term. We report net mark to market gains and losses in our RMBS assets, associated hedges and our shares of Orchid Island stock on our consolidated statement of operations as other income. For the 2025, other income as a result of the distressed market conditions described above resulting in a $1,000,000 loss versus a loss of $300,000 for the 2024.

For the six month period ended 06/30/2025, we reported a loss of 1,030,000 versus income of $650,000 for the 2024 period. Expenses for the quarter of $2,800,000 were up 1% over the twenty twenty four quarter and expenses for the 2025 of $5,740,000 were down 1% versus the 2024 period, so relatively stable. As the third quarter unfolds, markets are considerably calmer than when the second quarter started. The administration also passed what became known as the One Big Beautiful Bill Act on July 4. This legislation appears to have the potential to be quite stimulative for the economy and market, particularly risk assets, which have responded positively.

As mentioned, Agency RMBS did not fully recover from the turmoil in early April and are still trading at attractive levels. In fact, market conditions generally are quite favorable for RMBS, a positive development for Bimini and OrthoAvid as well. As long as we have no new adverse developments with respect to reciprocal tariffs and interest rate volatility remains low, the sector should perform well. With respect to the macroeconomic backdrop, the economy has remained surprisingly resilient until this morning apparently. But in the event conditions deteriorate, the Federal Reserve appears likely to act and reduce overnight rates, which should buttress the economy.

Operator, that concludes my prepared remarks. We can now open up the call for questions. Thank you.

Conference Call Operator: And I’m not showing any questions on the phone lines.

Robert Cauley, Chairman and Chief Executive Officer, Bimini Capital Management: Thank you, operator. And thank you once again. To the extent somebody has a question either because they listened to the replay and weren’t able to listen live and have a question or if something comes up after the call, please feel free to call us at the office. The number is (772) 231-1400. Otherwise, we’re looking forward to speaking with you at the end of the next quarter.

Thank you, and have a good day.

Conference Call Operator: Ladies and gentlemen, this does conclude today’s presentation. You may now disconnect and have a wonderful day.

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