Bimini Capital Management, Inc. (BMNM) Q2 2026 Earnings Call Transcript

Yeah, that would be great for BIMI to get a big windfall, maybe go out and deploy those proceeds into some other income-generating assets. But who really runs the business? And would Orkid be content to have us continue to do that? And that's not as clear an answer to me. I think that's going to be a conflict of interest.

It might seem that potentially with Richard's business, if that's a new line of business that you guys are interested in pursuing – You know, sort of the environment for that, you know, M&A in that environment is pretty strong. You might, if you had a giant cash pile, you might have people approaching you saying, we'd like to merge into you. And that problem might obviate itself. And, you know, you guys and BIMD shareholders could make an awful lot of money potentially in that kind of transaction.

You could, and it would be a short-term gain. you would probably use up more of the NOL in the near term. But I think the business is worth more on a going concern basis. Okay, granted, maybe we don't use quite as much of the NOL. But looking down the road, we're not that far from, as I said, utilizing all these, maybe not as much, becoming a taxpaying entity. But also, we generate a lot of cash flow even as to where we are. and to the extent we continue to grow Orchid, with the small share count that we have, there's a lot of earnings leverage there. And we're not that far from that. And, again, it allows us to continue to run the company. I'm not really willing to just walk away as a large shareholder, too. So, I mean, it's kind of how we look.

I mean, the company's $30 million, $26 million, as we sit here today in market cap. I mean, you know, there are things that you could do that could get that to $100 million, potentially. And, you know, you guys own half of that, so maybe we could talk about that more offline. But I guess in light of some of the hidden value in terms of, like, the value of that management agreement and, you know, a few other things, and maybe the earnings power becoming a bit more obvious. Have you thought about being a little bit more aggressive in terms of trying to tender for shares or maybe do some kind of forward-reverse split where you cash some people out and you get a little bit of a buyback that way, but you also get a stock price where people are actually allowed to buy it. There's a lot of people that can't buy stocks that are less than like five bucks.

I mean, I thought that I'd have an answer for that question today. I saw that. You asked me that yesterday. Something would take under advisement, but in other – and we may. I'm not ruling that out at all. And we have, as far as share buybacks, yes, we have in the press release.

You did a little in the quarter. That was good.

Yeah, and we will continue to do so. The problem is is that there's just not a lot of sellers out there. You know, if you were to call, we've done two tenders. The first one went extremely well. It was fully subscribed. The second one wasn't even close. And while we are able to sell or buy back some shares, there's just not a lot of sellers out there. We could do the split, as you alluded to. That might get some people out. A lot of the small shareholders are remnants of the former mortgage company. I don't know how many employees were affected. They all got like 100 shares at the time. So there's several hundred of those. Other than that, I suspect, and I don't know, because everybody tends to hold their position under the 5% reporting threshold, but I suspect there's really only about 10 or 12 shareholders who own close to that. And it's really hard, and people see what's going on. Another thing I would say, most people that hold it are kind of like yourself. They've known the stock, they've followed it for years, they know what's going on, and they know what's on the horizon. So it's hard to get them to sell. You know, it's been viewed as basically a private equity investment for 10-plus years. And so if they think they're getting close to cashing in, they don't necessarily want to sell out. So we could try those things. But, you know, the other thing is, and I don't want to – I've got to be careful what I say, but, you know, it's not here today. We're not there yet. But in the not-too-distant future, a lot of things can change. If, you know, we're here five years from now and the NOL has been used to the extent possible and we started to transition the balance sheet, it opens the door to a lot of different things that can transform the company, but you kind of get to get through this next step first. And I think there's tremendous upside in the business then, but you've got to chop this wood first. yeah I know a fair enough I know a couple people that are just below the water line we're not really close to the water line but we're pushing two percent like I said I can't I'm not going to name names but we feel questions and have for years and I know there's you know there's several people that are like that you know and we speak to them semi-regularly and you know they get you know they're all they understand what the what the strategy is and you know you can try to buy them out, but $2 or $3 probably isn't going to get it done.

Yeah, that's not super exciting for them. Richard, it's nice to meet you. I just have a quick question on your guys' business. Are you guys, as you look at your AUM growth, how much of it is market versus just organic flow?

I would say that on the direct business, we have more control of that, and I think that will continue to grow on both sides of it. on the platforms. We're really relying on what the consultants want to do in terms of asset allocation. I think our performance creates stability and also potential asset growth, but we're, you know, the consultants are really determining how much do they want to have in fixed income and equities. And so we kind of got to rely on that and just make sure we have products that meet their standards in the categories that we are in. Makes sense.

I think I saw you guys on the Schwab Model Marketplace. Will you guys be at Impact this year?

Yeah, I don't know that. I'd have to ask one of my staff members on that. You know, I definitely know we're in the InvestNet. We go to those conferences and the LPLs. Got it. But I don't know about the Impact, and I apologize for that. We have been there in the past.

Okay. Well, thank you guys for all the good work that you're doing. It seems like, you know, after a long period of kind of trying to get the head above water, it's starting to really happen. So that's good. Thanks, guys.

Well, Gary, before you go, Gary, you mentioned in your email the tax. Let me just, for the benefit of everybody, so we have this NOL with an associated deferred tax asset and generally under a gap we have to evaluate that every year basically just kind of update our utilization estimate unless something material happens in which case you have to do it in the quarter that that occurs so that's what happened here so we did this acquisition that seemed to be a material material enough event that we have to reevaluate but we're doing it as of June 30th so the last time we did it was as of the end of 2025, we had an estimate of what our utilization rate would be. When we do it again at the end of June, we're updating our utilization estimates going forward, but we also have to recognize what we've used year to date. So the large tax accrual that you saw for the six-month period, $1.1 million of that is driven by a combination of the estimated utilization rate going forward and, more importantly, what we use here to So that's why you have the outsized tax. And, of course, it's all non-cash. But that's really why it's supposed to be on.

So if I look at that, then, you know, that's probably about $0.11 a share. You guys had about another $90,000, $900,000 of acquisition-related costs or something. So that's about $0.20 of drag to the headline number. So is it fair to think on a normalized basis it's about $0.25?

I'm glad you said that. I don't want to be the one that said that, but I don't disagree with anything you said. The fact to me is if you look at the six months year-to-date, you had about a million and a half of transaction costs and you had several hundred thousand dollars of mark to market and that doesn't go away because we still own shares of Orchid and we still own a small portfolio but they're much smaller they're roughly a third as I said so if you kind of normalize what's left that gives you a pretty decent picture of what we're looking at yeah that's kind of my working number okay cool thanks guys you guys keep up the good work Thank you.

Thank you. Ladies and gentlemen, as a reminder to ask the question, please press star 1-1. I am showing no further questions in the queue. I would now like to turn the call back over to Robert for closing remarks.

Thank you, operator, and thank you, everybody, for taking the time to listen in. To the extent you did not listen in and you do so, if you listen to the repeat and you have a question, or if you just didn't have a question today, feel free to call in. We'd be glad to take your calls. The number here is 772-231-1400. Otherwise, we look forward to speaking with you at the end of the next quarter.

Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.