Executives: Robert Cauley – Chairman and CEO G. Hunter Haas – President, CIO, CFO, and Treasurer

Analysts:

Operator: Good morning, and welcome to the First Quarter 2017 Earnings Conference Call for Bimini Capital Management. This call is being recorded today, May 9, 2017. 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.

Robert Cauley: Thanks operator and good morning. As the year 2017 unfolded risk markets and particularly upcoming markets were buoyed by optimism stemming from developments in Washington generated by the incoming Trump administration. The President elect made every effort to let the world and markets know that a Trump administration was going to be very pro-business and pursue an aggressive legislative agenda that encompassed healthcare reform, tax reform, infrastructure projects, and a regulatory relief. As various Cabinet nominations were announced most of which were from the business world and the new President continuously met with leaders of most major industries, the equity and risk markets continued to rally setting a new all time highs in the case of the Dow Industrial and S&P 500 in early March. Optimism was so high that when the Federal Reserve raised the Fed's fund rate by 25 basis points at their March meeting, the markets reacted calmly. By quarter end the Treasury curve in the U.S. was close to unchanged from year end 2016. Levels. The 10 year point of the curve was less than 5 basis points lower in yield and short rates were slightly higher approximately 6.5 basis points in the case of the two year note and just over 30 basis points in the case of the one month bill. Various members of the Federal Open Market Committee and Fed Governors have increasingly discussed the reduction of the Fed's balance sheet as the next phase of the removal of monetary accommodation in addition to increasing the Fed funds rate. Members of the Fed have indicated that this reduction in the Fed balance sheet would be accomplished by tapering reinvestment of paid downs it receives on its MBS holdings and maturities of the treasury agency debt holdings. The market particularly the MBS market is keenly focused on the timing and extent of a reduction in Fed purchases. The prospect of the largest source of demand for agency MBS reducing its purchases has caused agency MBS assets to cheapen to comparable duration treasuries. Further the flattening of the U.S. yield curve described above also negatively impacted MBS asset valuations as the prospects for net interest income from owning the assets diminished. Prepayment speeds moderated during the quarter with the combination of the typical seasonal slowdown coupled with substantially higher mortgage rates versus levels prior to the election. Prepayment speeds appears to have hit their trough and rep in February based on the report released in March before picking up again slightly in March and again in April based on the reports released in April and May respectively. Now I will focus on developments at Bimini during the first quarter of 2017 given its macro economic backdrop. Before I get into developments with our advisory services in the portfolio at Royal Palm Capital I would like to provide an update on the value of our respective tax NOLs as of the year-end now that Bimini is no longer a REIT, the tax NOLs are essential to our two pronged strategy. First, we will manage the portfolio and operations and work around capital and collect management fees and overhead sharing payments through our subsidiary Bimini Advisors. As Bimini Advisors is consolidated by Bimini for federal income tax purposes we expect these operations will generate tax win count and can be used to absorb Bimini's net operating losses of approximately 19.1 million as of December 31, 2016. Secondly we will manage the portfolio of Royal Palm in an effort to generate taxable income to absorb up to the approximately 257 million of net operating losses as of December 31, 2016 at Royal Palm. As you all know we also have retained interest or residuals at Royal Palm and these generated a modest cash flow stream overtime. Because of the tax net operating losses all revenues in excess of our cost from the advisory services, the MBS portfolio at Royal Palm, dividends received on Orchid shares and the residuals are available to be deployed in the MBS portfolio at Royal Palm until these NOLs either expire or are consumed. This in turn allows us to grow this portfolio and potentially increase net revenues in the future. From time to time adverse market moves may result in margin calls that reduce cash balances otherwise available to be deployed into the portfolio. Of course our funding hedges typically result in margin calls as well when market interest rates move. During the first quarter of 2017, the net of the margin collectivity rate to our portfolio and funding hedges was slightly negative reducing the amount of cash available to deploy. We chose to take advantage of a dip in the price of the shares of Orchid Island capital and netted 125,000 shares versus growing the MBS portfolio. Going forward absent such outsized market moves as we experienced in the fourth quarter of 2016 and or meaningful dips in the share price of Orchid Island Capital we expect to continue to be able to grow the MBS portfolio. Now off to our operations for the quarter. Advisory Services revenue benefited from modest growth at Orchid Island during the first quarter. Revenues for the management at Orchid Island Capital grew from 1.56 million for the fourth quarter of 2016 to 1.67 million in the first quarter of 2017. The comparable figures for the first quarter of 2016 was 1.27 million. Dividends from our holdings of Orchid shares increased modestly with additional shares added during the quarter and totaled approximately 0.6 million. The developments in the rates of MBS markets discussed above cost both our pass-through MBS and structural MBS to incur modest mark-to-market losses for the quarter. Inclusive of these mark-to-market losses, returns for the various sub portals for the quarter were 7.6% for the pass-through sub-portfolio and negative 0.7% for the structured sub-portfolio not annualized. There were no significant acquisitions in EBIT portfolio this quarter. We sold one large inverse IO position which in conjunction with pay downs caused the capital allocation to shift away from structured MBS during the first quarter. The allocation of the structured securities portfolio declined from 43.3% at December 31, 2016 to 29.9% at March 31, 2017. Note the allocation to the structured portfolio was 19.6% as of this September 30, 2016 before we made $3 million of purchases in the structure portfolio. These swings in our capital allocation are not intended to represent a strategic shift in our strategy as the changes in structured securities portfolio are only temporary. The purchases and sales we make can be rather lumpy as we seek to own -- positions, so the positions are rather large in proportion to the total capital in the portfolio of approximately $13 million. During the first quarter of 2017 the total portfolio shrank modestly from 130.3 million at December 31, 2016 to 125.9 million at March 31, 2017. Prepayment speeds on our pass-through securities decreased from 5.5 CPR for the fourth quarter of 2016 to 4.8 CPR for the first quarter of 2017. The structured securities portfolio decreased as well from 27.3 CPR during the fourth quarter to 18.8 CPR in the first quarter of 2017. Combined the portfolio decreased from 11.1 CPR in the fourth quarter of 2016 to 8.8 CPR in the first quarter of 2017. Royal Palms portfolio experienced similar speeds in April based on a report issued late last week. Finally absent the changes to the structured portfolio mentioned above, the construction and positioning of the portfolio particularly the pass-through portfolio has not changed. The portfolio is positioned for an upgrade scenario with a high coupon fixed rate concentration with various forms of call protected securities. The early days of the second quarter of 2017 have been quite volatile. The ten year note rallied approximately 40 basis points from March 13, 2017 around the time of the Fed rate hike through April 18, 2017 that has since reversed most of this movement heavy yield to approximately 2.4% as of this morning. The rally was caused by a combination of geopolitical events, soft economic data in March in Q1 generally, and a lack of progress by the Trump administration on its legislative agenda. The turnaround was driven by the same factors reversing course and or abating in the case of geopolitical events. In fact last week the Fed concluded that main meeting and the statement issued strongly hinted at another hike in June. The market reaction was again muted implying the markets and economy are strong enough to withstand additional removal of accommodation to the extent that Trump administration has any success with its legislative agenda. Such legislation will likely be even more supportive of a very healthy economy. That concludes my prepared remarks. Operator we can now turn the call over to questions.

Operator:

Robert Cauley: Thank you operator and again thank you to everybody for your time to the extension if you do have any questions either something that is in your mind now or something that comes up later or after listening to the replay please feel free to call us at the office, the number is 772-231-1400 otherwise we look forward to talking to you next quarter, thank you.

Operator: Ladies and gentlemen thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone have a great day.