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Bimini Capital Management (market cap: $10.04M) reported its Q4 2024 financial results, highlighting a significant increase in net income before taxes compared to the previous quarter. The company posted a net income of 5.6 million dollars, with shareholders’ equity rising to 668.5 million dollars. However, the quarter concluded with a net loss of 1.5 million dollars after accounting for a tax provision of 2.1 million dollars. According to InvestingPro data, the stock has shown significant momentum with a 17.65% return over the past week, though it currently trades at $1, aligning with its Fair Value estimate.
Key Takeaways
- Net income before taxes improved significantly to 500,000 dollars from a loss of 800,000 dollars in Q3.
- Shareholders’ equity increased by 12.5 million dollars, reflecting positive financial momentum.
- MDS portfolio saw substantial growth, adding 4 million dollars in Q4 and 29.5 million dollars for the full year.
- Economic conditions are mixed, with falling inflation and a cooling labor market.
Company Performance
Bimini Capital demonstrated resilience in Q4 2024 by improving its net income before taxes from a loss in the previous quarter. The company’s strategic focus on investment portfolio management contributed to the growth of its MDS portfolio. While InvestingPro analysis reveals the company is not profitable over the last twelve months, with a concerning current ratio of 0.07, the increase in shareholders’ equity suggests potential for improvement. The company’s performance is noteworthy in the context of a challenging economic environment characterized by falling inflation and a cooling labor market. Revenue growth remains positive at 6.89% year-over-year.
Financial Highlights
- Net Income: 5.6 million dollars
- Shareholders’ Equity: 668.5 million dollars, up from 656 million dollars
- Advisory Service Revenue: 3.4 million dollars, up from 3.3 million dollars in Q3
- Net Income Before Taxes: 500,000 dollars, compared to a loss of 800,000 dollars in Q3
- MDS Portfolio Growth: 4 million dollars in Q4, 29.5 million dollars for the full year
Outlook & Guidance
The company remains cautious about the uncertain economic outlook, with potential impacts from new administration policies. Bimini Capital continues to monitor interest rate levels, Federal Reserve monetary policy, and MBS market conditions. The current favorable market conditions for its Orchid and Royal Palm portfolios are expected to support future performance.
Executive Commentary
CEO Robert Cawley noted, "Growth appears to be slowing, inflation not so much, consumer confidence measures have plummeted." He emphasized the fluid nature of the current economic period and the uncertainty surrounding the impact of interest rate levels and Federal Reserve policies.
Risks and Challenges
- Economic Uncertainty: Potential impacts from new administration policies.
- Interest Rate Fluctuations: Changes in Federal Reserve policy could affect investment returns.
- MBS Market Conditions: Volatility in the mortgage-backed securities market may impact portfolio performance.
Bimini Capital’s Q4 2024 results reflect a company navigating a complex economic landscape with strategic focus and adaptability. The firm continues to leverage its flexible investment strategy to manage risks and capitalize on opportunities.
Full transcript - Bimini Capital Management Inc (BMNM) Q4 2024:
Conference Call Operator: Good morning, and welcome to the Fourth Quarter twenty twenty four Earnings Conference Call for Bimini Capital Management. This call is being recorded today, 03/07/2025. 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 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 call over to the company’s Chairman and Chief Executive Officer, Mr. Robert Cawley. Please go ahead, sir.
Robert Cawley, Chairman and Chief Executive Officer, Bimini Capital Management: Thank you, operator, and good morning. The outlook for the market continues to pivot. As the third quarter came to an end, inflation was falling towards the Fed’s two percent target, the labor market was cooling as hiring levels moderated and the unemployment rate was slowly creeping higher, and the Fed had finally lowered the Fed funds rate by 50 basis points. At the time, the market expected the Fed to lower the rate by over 200 basis points over the next eighteen months. As we know now, beginning early in the fourth quarter, the incoming data turned.
However, even as the economic outlook shifted, the Fed did lower the Fed funds rate two more times during the fourth quarter of twenty twenty four by 25 basis points in each case. With the Fed funds rate lowered by 100 basis points over the course of the quarter, the persistently strong economic outlook led to a disinversion of the yield curve. However, market expectations for additional reductions in the Fed funds rate continue to decline over the course of the fourth quarter and into 2025. Now as we move further into 2025 and the Trump administration begins to implement its policy objectives, namely tariffs, a crackdown on immigration, an effort to end the war in Ukraine, among others, the outlook has once again shifted. Current market expectations are much less optimistic.
Growth appears to be slowing, inflation not so much, consumer confidence measures have plummeted and interest rates have declined as rate volatility has increased. Now the expectations for additional Fed easing are rising as opposed to the end of the second or the end of twenty twenty four. Now I will turn to our results for the quarter and the outlook going forward. Wilkin Island Capital reported fourth quarter twenty twenty four net income of $5,600,000 and its shareholders’ equity increased slightly over the third quarter from $656,000,000 to $668,500,000 As a result, Bimini’s advisory service revenue also increased slightly to $3,400,000 compared to $3,300,000 for the third quarter. Further, as late in late February, Orchid reported yet another increase in its shareholders’ equity base, which should lead to another increase in advisory service revenue for the first quarter of twenty twenty five.
As you know, owing to our net operating losses, we have the ability to retain earnings and deploy them into our investment portfolio. The investment portfolio at Royal Palm generated net interest income of $300,000 Dividends on our Orchid stock were 200,000 In addition, mark to market gains and losses on our MDS portfolio, hedge positions and shares of Orchid netted to income of $100,000 The MDS portfolio increased by $4,000,000 during the fourth quarter of twenty twenty five and increased by 29,500,000 for the year. Bimini has positive cash flows from operations for the fourth quarter and the full year ended 12/31/2024, which has allowed us to grow the MBS portfolio throughout the year. As the portfolio has grown over the last two years, our gross interest income has grown from $600,000 for the first quarter of twenty twenty three to $1,700,000 for the fourth quarter of twenty twenty four. Over the same period, our repurchase agreement related interest expense increased from 500,000 for the first quarter of twenty twenty three to $1,400,000 for the fourth quarter.
As a result, our net interest income from the portfolio has increased, benefiting from reductions in short term rates initiated by the Federal Reserve. Obviously, to the extent we remain cash flow positive, this trend can continue. The company, inclusive of both the Advisory Services segment and the Investment Portfolio segment, recorded net income before taxes for the twenty twenty four fourth quarter of $500,000 versus a net loss before taxes of $800,000 for the third quarter. We updated our projected utilization of our deferred tax assets and increased the valuation allowance resulting in a net tax provision of $2,100,000 and a net loss for the fourth quarter of twenty twenty four of $1,500,000 Looking forward, the economic outlook continues to change frequently and we are living them through a very fluid period. The ultimate impact of interest rate on interest rate levels, Federal Reserve monetary policy or the MBS market remains to be seen.
However, quarter to date market conditions have generally been favorable for both the Orchid and Royal Palm investment portfolios. We look forward to discussing our results at the end of the quarter. Operator, that concludes my prepared remarks. We can open up the call to questions.
Conference Call Operator: I’m showing no questions in queue at this time. I’d like to turn the call back to Mr. Colley for closing remarks.
Robert Cawley, Chairman and Chief Executive Officer, Bimini Capital Management: Thank you, operator. And again, thank you everybody for listening in. To the extent you did not get a chance to ask a question because you missed the call and listened to the replay or you just had another question that came up, please feel free to reach out to us at the office. The number is (772) 231-1400. Otherwise, we look forward to talking to you at the end of the first quarter.
Thank you.
Conference Call Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.
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