This article first appeared on GuruFocus .
Release Date: August 07, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Bimini Capital Management Inc ( BMNM ) successfully closed the acquisition of Tom Johnson Investment Management, diversifying its asset management business beyond agency RMBS and enhancing earnings consistency.
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Advisory service revenues increased significantly to $6.8 million in Q2 2026, up from $3.8 million in Q2 2025, driven by the TJIM acquisition.
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The company funded the TJIM acquisition without incurring debt, using available cash and portfolio proceeds, and retained a portion of its investment portfolio.
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Bimini Capital Management Inc ( BMNM ) remains profitable and cash flow positive year-to-date, with expectations of continued profitability.
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Orchid Island Capital reported a strong economic return of 6.2% for the quarter, leading to a 3.4% increase in management fee revenue for Bimini.
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The company is proactively planning for the expiration of its NOLs by considering debt paydown and balance sheet transition, positioning for long-term sustainability.
Negative Points
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Market conditions for agency RMBS and risk assets were uneven, with volatility driven by geopolitical events (war with Iran) and Federal Reserve policy uncertainty.
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The investment portfolio market value declined significantly to $37.9 million as of June 30, 2026, from $120.8 million a year earlier, reducing income-generating assets.
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The company faces the imminent expiration of its NOLs, with most expected to be used or expired by end of 2028, leading to future tax liabilities.
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The acquisition of TJIM resulted in material non-cash tax accruals and transaction costs, which negatively impacted reported earnings for the quarter.
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Management acknowledged limited liquidity in the stock, with few sellers and a shareholder base that is reluctant to sell, making share buybacks and tender offers less effective.
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The company's reliance on Orchid Island Capital for a significant portion of its revenue creates concentration risk, and monetizing that management agreement is complicated by management conflicts.
Q & A Highlights
Q: As you look towards the NOL expiring in 2028, to what extent do you think about the advisory agreement with Orchid Island Capital (ORC)? It seems that asset management agreements have a much higher potential value than the termination fee, and maybe monetizing that ahead of expiration could be a value-maximizing move. A: Robert Colley, Chairman and CEO, explained that this is troublesome because with ORC, Bimini is not just an asset manager but the actual management team running day-to-day operations. Selling the management fee would likely result in him and Hunter becoming employees of Orchid, which would make it difficult to continue running Bimini. He noted that while it could provide a short-term windfall, he believes the business is worth more on a going-concern basis, and they are not far from utilizing the NOLs and becoming a taxpaying entity with significant earnings leverage.
Q: Have you thought about being more aggressive in terms of tendering for shares or doing a forward-reverse split to cash some people out and get a stock price that more investors can buy, given the hidden value in the management agreement and earnings power? A: Robert Colley, Chairman and CEO, stated that they have taken the suggestion under advisement but are not rolling it out. He noted that share buybacks are difficult because there are not many sellers, as evidenced by their two previous tender offersthe first was fully subscribed, but the second was not even close. He added that most shareholders have held the stock for years, view it as a private equity investment, and are unwilling to sell at $2 or $3, especially as they near the point of cashing in on the NOL strategy.
Q: Regarding the large tax accrual in the six-month period, is it fair to think that on a normalized basis, earnings are about $0.25 per share, considering the $0.11 tax drag and $0.09 of acquisition-related costs? A: Robert Colley, Chairman and CEO, agreed with the assessment, noting that the large tax accrual of $1.1 million is driven by a combination of the estimated utilization rate going forward and what was used year-to-date, all of which is non-cash. He added that when you normalize for the $1.5 million in transaction costs and mark-to-market adjustments, the remaining picture gives a pretty decent representation of the company's ongoing earnings power.
Q: As you look at your AUM growth at Tom Johnson Investment Management, how much of it is market versus organic flow? A: Richard Perry ( Trades , Portfolio ), President and CIO of TJIM, stated that on the direct business side, they have more control and expect that to continue growing. On the platform side, growth relies on what consultants want to do in terms of asset allocation. He noted that their performance creates stability and potential asset growth, but they must ensure their products meet the consultants' standards in the categories they operate in.
Q: Given the NOL expiration timeline, could a large cash pile from monetizing the ORC agreement facilitate M&A in the asset management space, potentially transforming the company? A: Robert Colley, Chairman and CEO, acknowledged that while a short-term gain could use up more of the NOL, he believes the business is worth more on a going-concern basis. He emphasized that they generate a lot of cash flow, and with the small share count, there is significant earnings leverage as they continue to grow Orchid. He also noted that in the not-too-distant future, after the NOLs are utilized and the balance sheet transitions, it opens the door to many different transformative opportunities, but they need to get through the current phase first.
Q: Can you provide an overview of Tom Johnson Investment Management's business, including its history, products, and current positioning? A: Richard Perry ( Trades , Portfolio ), President and CIO of TJIM, provided an overview, noting the firm was founded in 1983 and now manages approximately $1.7 billion in assets. The firm offers two equity portfolios and four fixed income portfolios, with about 38% of the business from direct clients and 62% through platforms. Currently, about 33% of assets are in equities and 67% in fixed income. He described the firm as very conservative, with equity valuations around 14 times earnings versus the market's 20-plus times, and a fixed income structure slightly less than benchmarks in duration, currently focused more on treasuries relative to corporates.
Q: Will you be attending the Impact conference this year, given your presence on the Schwab model marketplace? A: Richard Perry ( Trades , Portfolio ), President and CIO of TJIM, was unsure about Impact specifically but confirmed they are in the InvestNet and attend LPL conferences. He noted they have been to Impact in the past but would need to check with staff on this year's attendance.
Q: Given the potential for increasing funding costs if the Fed raises rates, what is your strategy regarding the trust preferred debt? A: Robert Colley, Chairman and CEO, stated that given the market outlook and the possibility of rising funding costs, they may start to pay down their trust preferred debt with available cash. This process would operate like growing an income-producing asset base, but by decreasing interest expense rather than increasing interest income. It will also facilitate the transition of their balance sheet, especially since the trust preferred debt matures in 2035.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
