BIMINI CAPITAL MANAGEMENT, INC. - Quarter Report: 2008 September (Form 10-Q)

bmnm10q09302008.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2008

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to ___________

Commission File Number: 001-32171

Bimini Capital Management, Inc.

(Exact name of registrant as specified in its charter)


Maryland		72-1571637
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3305 Flamingo Drive, Vero Beach, Florida 32963

(Address of principal executive offices) (Zip Code)

(772) 231-1400

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES þ NO ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨ Accelerated filer ý Non-accelerated filer ¨ Smaller Reporting Company ý

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ¨ NO þ

As of November 6, 2008, the number of shares outstanding of the registrant’s Class A Common Stock, $0.001 par value, was 25,534,816; the number of shares outstanding of the registrant’s Class B Common Stock, $0.001 par value, was 319,388; and the number of shares outstanding of the registrant’s Class C Common Stock, $0.001 par value, was 319,388.

BIMINI CAPITAL MANAGEMENT, INC.

INDEX

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.	3
Consolidated Balance Sheets as of September 30, 2008 (unaudited) and December 31, 2007	3
Consolidated Statements of Operations for the nine and three months ended September 30, 2008 and 2007 (unaudited)	4
Consolidated Statement of Stockholders’ Equity (Deficit) for the nine months ended September 30, 2008 (unaudited)	5
Consolidated Statements of Cash Flows for the nine months ended September 30, 2008 and 2007 (unaudited)	6
Notes to Consolidated Financial Statements (unaudited)	7
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.	27
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.	40
ITEM 4. CONTROLS AND PROCEDURES.	41
ITEM 4T. CONTROLS AND PROCEDURES.	41

PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.	41
ITEM 1A. RISK FACTORS.	41
ITEM 6. EXHIBITS.	42

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

BIMINI CAPITAL MANAGEMENT, INC.
CONSOLIDATED BALANCE SHEETS

	(Unaudited)
	September 30, 2008			December 31, 2007
ASSETS:
Mortgage-backed securities:
Available-for-sale, pledged to counterparties, at LOCOM	$	-		$	293,729,451
Held for trading, pledged to counterparties, at fair value		208,921,118			396,175,157
Unpledged, at fair value		17,646,698			674,326
Total mortgage-backed securities		226,567,816			690,578,934
Cash and cash equivalents		12,376,528			27,284,760
Restricted cash		250,000			8,800,000
Principal payments receivable		59,443			99,089
Accrued interest receivable		1,084,148			3,637,302
Property and equipment, net		4,086,364			4,181,813
Prepaids and other assets		4,910,876			5,315,835
Assets held for sale		42,583,586			96,619,615
Total Assets	$	291,918,761		$	836,517,348

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

LIABILITIES:
Repurchase agreements	$	200,707,819		$	678,177,771
Junior subordinated notes due to Bimini Capital Trust I & II		103,097,000			103,097,000
Accrued interest payable		1,399,624			3,872,101
Accounts payable, accrued expenses and other		1,051,300			644,858
Liabilities related to assets held for sale		14,352,687			27,842,174
Total Liabilities		320,608,430			813,633,904

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, $0.001 par value; 10,000,000 shares authorized; designated, 1,800,000 shares as Class A Redeemable and 2,000,000 shares as Class B Redeemable; no shares issued and outstanding as of September 30, 2008 and December 31, 2007		-			-

Class A Common Stock, $0.001 par value; 98,000,000 shares designated: 25,534,816 shares issued and outstanding as of September 30, 2008 and 24,861,404 shares issued and outstanding as of December 31, 2007		25,535			24,861

Class B Common Stock, $0.001 par value; 1,000,000 shares designated, 319,388 shares issued and outstanding as of September 30, 2008 and December 31, 2007		319			319

Class C Common Stock, $0.001 par value; 1,000,000 shares designated, 319,388 shares issued and outstanding as of September 30, 2008 and December 31, 2007		319			319

Additional paid-in capital		339,008,659			338,241,582
Accumulated deficit		(367,724,501	)		(315,383,637	)
Total Stockholders’ Equity (Deficit)		(28,689,669	)		22,883,444
Total Liabilities and Stockholders’ Equity (Deficit)	$	291,918,761		$	836,517,348
See Notes to Consolidated Financial Statements

Bimini Capital Management, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
	Nine Months Ended						Three Months Ended
	September 30, 2008			September 30, 2007			September 30, 2008			September 30, 2007

Interest income, net of amortization of premium and discount	$	23,046,363		$	90,793,422		$	6,148,667		$	24,634,854
Interest expense		(17,278,745	)		(92,286,037	)		(4,192,838	)		(21,143,461	)
Net interest income(expense), before interest on junior subordinated notes		5,767,618			(1,492,615	)		1,955,829			3,491,393
Interest expense on junior subordinated notes		(6,271,295	)		(6,271,296	)		(2,090,432	)		(2,090,432	)
Net interest income(expense)		(503,677	)		(7,763,911	)		(134,603	)		1,400,961
Fair value adjustment- available-for-sale securities		-			(1,707,840	)		-			(1,707,840	)
Fair value adjustment - held for trading securities		(1,166,408	)		282,089			(1,031,577	)		282,089
Other-than-temporary loss on mortgage-backed securities		-			(55,250,278	)		-			-
Gain/(loss) on sale of mortgage-backed securities, net		755,135			(20,492,779	)		46,815			(1,104,402	)
Deficiency of revenues, net		(914,950	)		(84,932,719	)		(1,119,365	)		(1,129,192	)

Direct REIT operating expenses		538,944			632,709			165,331			181,007

General and administrative expenses:
Compensation and related benefits		2,256,582			3,562,711			583,239			1,218,881
Directors' fees and liability insurance		514,724			581,608			145,982			197,634
Audit, legal and other professional fees		562,821			1,004,987			107,351			323,761
Other administrative		974,029			507,811			215,303			174,634
Total general and administrative expenses		4,308,156			5,657,117			1,051,875			1,914,910

Total expenses		4,847,100			6,289,826			1,217,206			2,095,917
Loss from continuing operations before minority interest		(5,762,050	)		(91,222,545	)		(2,336,571	)		(3,225,109	)
Minority interest in consolidated subsidiary		-			770,563			-			-
Loss from continuing operations		(5,762,050	)		(90,451,982	)		(2,336,571	)		(3,225,109	)
Gain/(loss) on sale and disposal of assets of discontinued operations, net of tax		-			(6,357,596	)		-			4,111,607
Loss from discontinued operations, net of tax		(48,292,910	)		(148,451,063	)		(12,053,964	)		(5,609,698	)
Total loss from discontinued operations, net of tax		(48,292,910	)		(154,808,659	)		(12,053,964	)		(1,498,091	)

Net loss	$	(54,054,960	)	$	(245,260,641	)	$	(14,390,535	)	$	(4,723,200	)

Basic And Diluted Net Loss Per Share Of:
CLASS A COMMON STOCK
Continuing operations	$	(0.23	)	$	(3.63	)	$	(0.09	)	$	(0.13	)
Discontinued operations		(1.89	)		(6.21	)		(0.47	)		(0.06	)
Total basic and diluted net loss per Class A share	$	(2.12	)	$	(9.84	)	$	(0.56	)	$	(0.19	)
CLASS B COMMON STOCK
Continuing operations	$	(0.22	)	$	(3.61	)	$	(0.09	)	$	(0.13	)
Discontinued operations		(1.87	)		(6.18	)		(0.47	)		(0.06	)
Total basic and diluted net loss per Class B share	$	(2.09	)	$	(9.79	)	$	(0.56	)	$	(0.19	)
Average Shares Outstanding
CLASS A COMMON STOCK		25,147,824			24,600,795			25,392,962			24,690,089
CLASS B COMMON STOCK		319,388			319,388			319,388			319,388
Cash dividends declared per share of:
CLASS A COMMON STOCK	$	-		$	0.05		$	-		$	-
CLASS B COMMON STOCK	$	-		$	0.05		$	-		$	-

See Notes to Consolidated Financial Statements

BIMINI CAPITAL MANAGEMENT, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)
(Unaudited)
Nine Months Ended September 30, 2008

	Common Stock, Amounts at par value									Additional Paid-in				Accumulated
	Class A			Class B			Class C			Capital				Deficit				Total
Balances, December 31, 2007		$	24,861		$	319		$	319		$	338,241,582			$	(315,383,637	)		$	22,883,444
Cumulative effect adjustment upon adoption of SFAS No. 159			-			-			-			-				1,714,096				1,714,096
Net loss			-			-			-			-				(54,054,960	)			(54,054,960	)
Issuance of Class A common shares for board compensation and equity plan share exercises, net			674			-			-			185,467				-				186,141
Amortization of equity plan compensation			-			-			-			583,352				-				583,352
Equity plan shares withheld for statutory minimum withholding taxes			-			-			-			(799	)			-				(799	)
Stock issuance costs, and other adjustments			-			-			-			(943	)			-				(943	)
Balances, September 30, 2008		$	25,535		$	319		$	319		$	339,008,659			$	(367,724,501	)		$	(28,689,669	)

See Notes to Consolidated Financial Statements

BIMINI CAPITAL MANAGEMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Nine Months Ended
	September 30, 2008			September 30, 2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(54,054,960	)	$	(245,260,641	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Net loss from discontinued operations		48,292,910			154,808,659
Other-than-temporary loss on mortgage backed securities		-			55,250,278
Amortization of premium and discount on mortgage-backed securities, net		135,370			8,759,452
Stock compensation		769,493			2,076,036
Depreciation and amortization		107,601			627,044
(Gain) loss on sale of mortgage-backed securities, net		(755,135	)		20,492,779
Fair value adjustment - held for trading securities		1,166,408			(282,089	)
Fair value adjustment – available-for-sale securities		-			1,707,840
From trading securities:
Purchases		(150,129,824	)		-
Sales		529,615,670			-
Principal repayments		85,732,371			-
Changes in operating assets and liabilities:
Decrease in accrued interest receivable		2,553,154			6,654,984
Decrease in prepaids and other assets		404,960			371,367
Decrease in accrued interest payable		(2,472,477	)		(9,993,867	)
Increase (decrease) in accounts payable, accrued expenses and other		405,643			(122,961	)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		461,771,184			(4,911,119	)
CASH FLOWS FROM INVESTING ACTIVITIES:
From available-for-sale securities:
Purchases		-			(1,140,585,456	)
Sales		-			1,896,831,041
Principal repayments		-			835,792,555
Purchases of property and equipment, and other		(12,152	)		(3,937	)
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES		(12,152	)		1,592,034,203
CASH FLOWS FROM FINANCING ACTIVITIES:
(Increase)/decrease in restricted cash		8,550,000			(35,300,000	)
Proceeds from repurchase agreements		3,505,827,617			13,167,044,670
Principal payments on repurchase agreements		(3,983,297,569	)		(14,697,237,320	)
Stock issuance costs, and other adjustments		(943	)		-
Cash dividends paid		-			(2,534,582	)
NET CASH USED IN FINANCING ACTIVITIES		(468,920,895	)		(1,568,027,232	)
CASH FLOWS FROM DISCONTINUED OPERATIONS:
Net cash provided by operating activities		10,253,631			734,846,245
Net cash provided by investing activities		-			1,195,582
Net cash used in financing activities		(18,000,000	)		(813,015,954	)
NET CASH USED IN DISCONTINUED OPERATIONS		(7,746,369	)		(76,974,127	)

NET DECREASE IN CASH AND CASH EQUIVALENTS		(14,908,232	)		(57,878,275	)
CASH AND CASH EQUIVALENTS, Beginning of the period		27,284,760			82,751,795
CASH AND CASH EQUIVALENTS, End of the period	$	12,376,528		$	24,873,520

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest	$	27,289,202		$	108,551,200

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITIES:
Securities transferred from available-for-sale to trading (at fair value)	$	1,714,096		$	-
See Notes to Consolidated Financial Statements

BIMINI CAPITAL MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

September 30, 2008

NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Organization and Business Description

Bimini Capital Management, Inc., a Maryland corporation (“Bimini Capital”), was originally formed in September 2003 as Bimini Mortgage Management, Inc. (“Bimini Mortgage”) for the purpose of creating and managing a leveraged investment portfolio consisting of residential mortgage-backed securities (“MBS”). Bimini Capital’s website is located at http://www.biminicapital.com. On February 10, 2006, Bimini Mortgage changed its name to Opteum Inc. (“Opteum”). On September 28, 2007, Opteum changed its name to Bimini Capital Management, Inc.

On November 3, 2005, Bimini Capital acquired Opteum Financial Services, LLC, and it became a wholly-owned taxable REIT subsidiary of Bimini Capital. This entity, which was previously referred to as “OFS,” was renamed Orchid Island TRS, LLC effective July 3, 2007. Hereinafter, any historical mention, discussion or references to Opteum Financial Services, LLC or to OFS (such as in previously filed documents or Exhibits) now means Orchid Island TRS, LLC or “OITRS.”

On December 21, 2006, Bimini Capital sold to Citigroup Global Markets Realty Corp. (“Citigroup Realty”) a Class B non-voting limited liability company membership interest in OITRS, representing 7.5% of all of OITRS’s outstanding limited liability company membership interests, for $4.1 million. On May 27, 2008, Bimini Capital repurchased Citigroup Realty’s interest in OITRS for $0.05 million.

On April 18, 2007, the Board of Managers of OITRS, at the recommendation of the Board of Directors of Bimini Capital, approved the closure of OITRS’s wholesale and conduit mortgage loan origination channels in the second quarter of 2007. Also, during the second and third quarters of 2007, substantially all of the other operating assets of OITRS were sold. Therefore, all of OITRS’s assets are considered held for sale, and OITRS is reported as a discontinued operation for all periods presented following applicable accounting standards (see Note 11). For financial statement presentation purposes, Bimini Capital is now operating in a single business segment.

Bimini Capital has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). As a REIT, Bimini Capital is generally not subject to federal income tax on its REIT taxable income provided that it distributes to its stockholders at least 90% of its REIT taxable income on an annual basis. OITRS has elected to be treated as a taxable REIT subsidiary and, as such, is subject to federal, state and local income taxation. In addition, the ability of OITRS to deduct interest paid or accrued to Bimini Capital for federal, state and local tax purposes is subject to certain limitations.

As used in this document, discussions related to Bimini Capital, the parent company, the registrant, and to REIT qualifying activities or the general management of Bimini Capital’s portfolio of MBS refer to Bimini Capital Management, Inc. Further, discussions related to Bimini Capital’s taxable REIT subsidiary or non-REIT eligible assets refer to OITRS and its consolidated subsidiaries. Discussions relating to the “Company” refer to the consolidated entity (the combination of Bimini Capital and OITRS). The assets and activities that are not REIT eligible, such as mortgage origination, acquisition and servicing activities, were formerly conducted by OITRS and are now reported as discontinued operations.

Liquidity

The financing market utilized by the Company to fund its MBS portfolio, as well as the market for MBS securities, have deteriorated materially since June 30, 2008. Moreover, the turmoil that originated in the MBS market has now spread into many other financial markets as well as the global real economy. The disruptions in the market have prompted unprecedented intervention on the part of most of the world’s central banks, the Congress of the United States, the US Treasury and the Federal Reserve in an effort to restore stability. In spite of these efforts market conditions are extremely volatile, credit is very tight and it is unknown at this time when and to what extent market conditions will stabilize and return to normal. These conditions have impacted the Company and are expected to continue to impact the Company.

At September 30, 2008 the Company had outstanding $200.7 million of obligations under repurchase agreements with maturities through December 2008. On October 27, 2008, $29.3 million of these repurchase agreement obligations matured and could not be extended. The Company was forced to sell the associated MBS assets pledged to satisfy the obligation. Should the Company be unable to extend the maturity of the remaining repurchase obligations, it may be forced to sell additional assets, which may result in losses upon such sales. Accordingly, the Company has taken steps to augment its existing leveraged MBS portfolio with an alternative investment strategy since sufficient repurchase agreement funding is not available. The Company is currently employing an investment strategy that utilizes derivative mortgage backed securities collateralized by MBS with comparable borrower and prepayment characteristics to the securities currently in the portfolio. Such securities are not funded in the repurchase market but instead are owned free and clear. However, if cash resources are, at any time, insufficient to satisfy the Company’s liquidity requirements, such as when cash flow from operations are materially negative, the Company may be required to pledge additional assets to meet margin calls, liquidate assets, sell additional debt or equity securities or pursue other financing alternatives. The Company presently believes that its junior subordinated debt capital, combined with the cash flow from operations and the utilization of borrowings, will be sufficient to enable the Company to meet its anticipated liquidity requirements. Nonetheless, no assurances can be made regarding the Company's ability to satisfy its liquidity and working capital requirements going forward.

Basis of Presentation and Use of Estimates

The accompanying interim financial statements reflect all adjustments, consisting of normal recurring items that, in the opinion of management, are necessary for a fair presentation of the Company’s financial position, results of operations, statement of stockholders’ equity (deficit) and cash flows for the periods presented. These interim financial statements have been prepared in accordance with disclosure requirements for interim financial information and accordingly, they do not include all of the information and footnotes required by United States generally accepted accounting principles (“GAAP”) for annual financial statements. The operating results for the interim period ended September 30, 2008 are not necessarily indicative of results that can be expected for the year ended December 31, 2008. The consolidated balance sheet as of December 31, 2007 was derived from audited financial statements included in the Company’s 2007 Annual Report on Form 10-K but does not include all disclosures required by GAAP. The financial statements included as part of this Form 10-Q should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007.

The preparation of interim financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates affecting the accompanying financial statements include the fair values of MBS, and certain discontinued operations related items including the deferred tax asset valuation allowance, the valuation allowance on mortgage loans held for sale, the valuation of retained interests, trading and the valuation of mortgage servicing rights.

Consolidation

The accompanying consolidated financial statements include the accounts of Bimini Capital and its wholly-owned subsidiary, OITRS, as well as the wholly-owned and majority-owned subsidiaries of OITRS. OITRS is reported as a discontinued operation for all periods presented. All inter-company accounts and transactions have been eliminated from the consolidated financial statements.

As further described in Note 5, Bimini Capital has a common share investment in two trusts used in connection with the issuance of Bimini Capital’s junior subordinated notes. Pursuant to the accounting guidance provided in Financial Accounting Standards Board (“FASB”) Interpretation (“FIN”) No. 46, Consolidation of Variable Interest Entities, Bimini Capital’s common share investments in the trusts are not consolidated in the financial statements of Bimini Capital, and accordingly, these investments are accounted for on the equity method.

Discontinued Operations

During the second quarter of 2007, the Company closed OITRS’s wholesale and conduit mortgage loan origination channels and sold substantially all of the operating assets of OITRS. Accordingly, all current and prior financial information related to OITRS and the mortgage banking business has been presented as discontinued operations in the accompanying consolidated financial statements. Refer to Note 11 - Discontinued Operations.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and highly liquid investments with original maturities of three months or less. The carrying amount of cash equivalents approximates its fair value as of September 30, 2008 and December 31, 2007. Restricted cash represents cash held on deposit as collateral with certain repurchase agreement counterparties (i.e. lenders). Such amounts may be used to make principal and interest payments on the related repurchase agreements.

Valuation of Mortgage-Backed Securities

At September 30, 2008, the valuation of the Company’s investments in MBS is governed by Statement of Financial Accounting Standards (“SFAS”) No. 157, Fair Value Measurements. The definition of fair value in SFAS No. 157 focuses on the price that would be received to sell the asset or paid to transfer the liability (i.e., an exit price), rather than the price that would be paid to acquire the asset or received to assume the liability (i.e., an entry price). All MBS securities held by Bimini Capital are reflected in the Company's financial statements at their estimated fair value at September 30, 2008. Estimated fair values for MBS are based on the average of third-party broker quotes received and/or independent pricing sources when available.

In accordance with SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities, the Company classified its investments in MBS as either trading, available-for-sale or held-to-maturity. Management determined the appropriate classification of the securities at the time they were acquired and evaluates the appropriateness of such classifications at each balance sheet date. The Company classifies all of its securities acquired prior to June 30, 2007 as available-for-sale. All securities acquired after June 30, 2007 were classified as trading. On January 1, 2008, in connection with the adoption of SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities-Including an amendment of FASB Statement 115, the Company transferred its remaining available-for-sale securities to trading and accordingly, recognized a $1.7 million fair value adjustment.

The Company’s investments in mortgage-related derivatives are carried at fair value on the balance sheet and are included with mortgage-backed securities.

Property and Equipment, net

Property and equipment, net, consisting primarily of computer equipment with a depreciable life of 3 years, office furniture and equipment with a depreciable life of 8 to 20 years, leasehold improvements with a depreciable life of 15 years, land which has no depreciable life and building with a depreciable life of 30 years, is recorded at acquisition cost and depreciated using the straight-line method over the estimated useful lives of the assets.

Bimini Capital’s property and equipment as of September 30, 2008 and December 31, 2007, is net of accumulated depreciation of $0.5 million and $0.4 million, respectively. Depreciation expense for the nine and three months ended September 30, 2008 was $0.1 million and $0.02 million, respectively.

Repurchase Agreements

The Company finances the acquisition of the majority of its MBS through the use of repurchase agreements. Under these repurchase agreements, the Company sells securities to a repurchase counterparty and agrees to repurchase the same securities in the future for a price that is higher than the original sales price. The difference between the sales price that the Company receives and the repurchase price that the Company pays represents interest paid to the repurchase counterparty. Although structured as a sale and repurchase obligation, a repurchase agreement is accounted for as a financing under which the Company pledges its securities as collateral to secure a loan which is equal in value to a specified percentage of the estimated fair value of the pledged collateral. The Company retains beneficial ownership of the pledged collateral. At the maturity of a repurchase agreement, the Company is required to repurchase the underlying MBS and concurrently receives back its pledged collateral from the repurchase counterparty or, with the consent of the repurchase counterparty, the Company may renew such agreement at the then prevailing rate. These repurchase agreements may require the Company to pledge additional assets to the repurchase counterparty in the event the estimated fair value of the existing pledged collateral has declined. For the nine months ended September 30, 2008 and for the year ended December 31, 2007, the Company did not have any margin calls on its repurchase agreements that it was not able to satisfy with either cash or additional pledged collateral.

Original terms to maturity of the Company's repurchase agreements generally, but not always, range from one month to twelve months; however, the Company is not precluded from entering into repurchase agreements with shorter or longer maturities. Repurchase agreement transactions are reflected in the financial statements at their cost. Should a counterparty decide not to renew a repurchase agreement at maturity, the Company must either refinance elsewhere or be in a position to satisfy this obligation. If, during the term of a repurchase agreement, a counterparty files for bankruptcy, the Company could experience difficulty recovering its pledged assets and may have an unsecured claim against the counterparty's assets for the difference between the amount received by the Company and the estimated fair value of the collateral pledged to such counterparty.

Interest Income Recognition on MBS

All securities in the MBS portfolio as of September 30, 2008 are classified as held for trading securities. All securities are either MBS pass through securities, interest only securities or inverse interest only securities. Income on MBS pass through securities classified as held for trading is based on the stated interest rate of the security. Premium or discount present at the date of purchase is not amortized. For interest only securities classified as held for trading, the income is accrued based on the carrying value and the effective yield. As cash is received it is first applied to accrued interest and then to reduce the carrying value. At each reporting date, the effective yield is adjusted prospectively from the reporting period based on the new estimate of prepayments. The new effective yield is calculated based on the carrying value at the end of the previous reporting period, the new prepayment estimates and the contractual terms of the security. For inverse interest only securities effective yield and income recognition calculations also take into account the index value applicable to the security. Owing to the fact realized cash flows for inverse interest only securities are driven by both prepayments and the index value, yield calculations have to take into account the impact of the index value on future cash flows. In accordance with Emerging Issues Task Force 99-20 (“EITF 99-20”), effective yield is derived from projected future cash flows. Changes in fair value during the period are recorded in earnings and reported as fair value adjustment-held for trading securities in the accompanying consolidated statement of operations.

MBS are recorded at cost on the date the MBS are purchased or sold, which is generally the trade date. Realized gains or losses from MBS transactions are determined based on the specific identified carrying value of the MBS. Prior to January 1, 2008, with respect to securities classified as available-for-sale, premiums and discounts associated with the purchase of the MBS were amortized or accreted into interest income over the estimated lives of the MBS adjusted for estimated prepayments using the effective interest method. Adjustments were made using the retrospective method to the effective interest computation each reporting period. The adjustment was based on the actual prepayment experiences to date and the present expectation of future prepayments of the underlying mortgages and/or the current value of the indices underlying adjustable rate mortgage securities versus index values in effect at the time of purchase or the last adjustment period.

Comprehensive Loss

In accordance with SFAS No. 130, Reporting Comprehensive Income, the Company is required to separately report its comprehensive income (loss) each reporting period. Other comprehensive income refers to revenue, expenses, gains and losses that, under GAAP, are included in comprehensive income but are excluded from net income, as these amounts are recorded directly as an adjustment to stockholders' equity. Other comprehensive income for the period ended September 30, 2007 arose from unrealized gains from changes in market values of securities classified as available-for-sale. Comprehensive loss is as follows:

(in thousands)

	(Unaudited)
	Nine Months Ended September 30,						Three Months Ended September 30,
	2008			2007			2008			2007
Net loss	$	(54,054	)	$	(245,261	)	$	(14,391	)	$	(4,723	)
Reclassify net realized loss on MBS		-			19,389			-			-
Reclassify other-than-temporary loss on MBS		-			55,250			-			-
Unrealized gain on available-for-sale securities, net		-			2,135			-			-
Comprehensive loss	$	(54,054	)	$	(168,487	)	$	(14,391	)	$	(4,723	)

Stock-Based Compensation

The Company utilizes SFAS No. 123(R), Share-Based Payment, to account for stock-based compensation using the fair value based method prescribed by SFAS No. 123, Accounting for Stock-Based Compensation. For stock and stock-based awards issued to employees, a compensation charge is recorded against earnings based on the fair value of the award. For transactions with non-employees in which services are performed in exchange for the Company's common stock or other equity instruments, the transactions are recorded on the basis of the fair value of the service received or the fair value of the equity instruments issued, whichever is more readily measurable at the date of issuance. Stock-based compensation was approximately $0.8 million and $0.2 million for the nine and three months ended September 30, 2008 and $2.3 million and $0.8 million for the nine and three months ended September 30, 2007, respectively.

Earnings Per Share

The Company follows the provisions of SFAS No. 128, Earnings per Share, and the guidance provided in the FASB's Emerging Issues Task Force (“EITF”) Issue No. 03-6, Participating Securities and the Two-Class Method under FASB Statement No. 128, Earnings Per Share, which requires companies with complex capital structures, common stock equivalents or two (or more) classes of securities that participate in the declared dividends to present both basic and diluted earnings per share (“EPS”) on the face of the consolidated statement of operations. Basic EPS is calculated as income available to common stockholders divided by the weighted average number of common shares outstanding during the period. Diluted EPS is calculated using the “if converted” method for common stock equivalents. However, the common stock equivalents are not included in computing diluted EPS if the result is anti-dilutive.

Income Taxes

Bimini Capital has elected to be taxed as a REIT under the Code. As further described in Note 11, OITRS is a taxpaying entity for income tax purposes and is taxed separately from Bimini Capital. Bimini Capital will generally not be subject to federal income tax on its REIT taxable income to the extent that Bimini Capital distributes its REIT taxable income to its stockholders and satisfies the ongoing REIT requirements, including meeting certain asset, income and stock ownership tests. A REIT must generally distribute at least 90% of its REIT taxable income to its stockholders, of which 85% generally must be distributed within the taxable year, in order to avoid the imposition of an excise tax. The remaining balance may be distributed up to the end of the following taxable year, provided the REIT elects to treat such amount as a prior year distribution and meets certain other requirements.

Recent Accounting Pronouncements

In June 2008, the FASB issued FSP EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities. The FSP addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the earnings allocation in computing earnings per share (EPS) under the two-class method. The FASB Emerging Issues Task Force (EITF) in Issue No. 03-6, Participating Securities and the Two-Class Method under FASB Statement No. 128, previously reached a consensus that, share-based payment awards containing a right to receive dividends declared on common stock represent participating securities if such awards are fully vested. Issue No. 03-6 does not, however, provide guidance on share-based payment awards that are not fully vested (i.e., the requisite service for vesting has not yet been rendered). The FSP has been issued to clarify that unvested instruments granted in share-based payment transactions containing non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) represent participating securities that should be included in the computation of EPS according to the two-class method. This FSP shall be effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those years. Early application is not permitted. The Company has not issued share-based awards containing non-forfeitable rights to dividends or dividend equivalents; therefore, the adoption of FSP EITF 03-6-1 is not expected to have any impact.

In March 2008, the FASB issued statement No. 161, Disclosures about Derivative Instruments and Hedging Activities - An Amendment of FASB Statement No. 133 (“SFAS 161”). This statement revises the requirements for the disclosure of derivative instruments and hedging activities that include the reasons a company uses derivative instruments, how derivative instruments and related hedged items are accounted under SFAS 133 and how derivative instruments and related hedged items affect a company's financial position, financial performance and cash flows. SFAS 161 will be effective in the fourth quarter of fiscal 2009. The Company is currently evaluating the impact of adopting SFAS 161 and does not anticipate a material effect.

In February 2008, the FASB issued FSP FAS 140-3, Accounting for Transfers of Financial Assets and Repurchase Financing Transactions. The FSP addresses whether there are circumstances that would permit a transferor and a transferee to evaluate the accounting for the transfer of a financial asset separately from a repurchase financing when the counterparties to the two transactions are the same. The FSP presumes that the initial transfer of a financial asset and a repurchase financing are considered part of the same arrangement (a linked transaction) under FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities (Statement 140). However, if certain criteria specified in the FSP are met, the initial transfer and repurchase financing may be evaluated separately under Statement 140. The FSP is effective for fiscal years beginning after November 15, 2008, and interim periods within those fiscal years. Earlier application is not permitted. The Company is currently evaluating FSP FAS 140-3 but does not expect its application to have a significant impact on its financial reporting.

In December 2007, the FASB issued statement No. 160, Noncontrolling Interests in Consolidated Financial Statements (“SFAS 160”), amendment to ARB No. 51. This standard establishes accounting and reporting standards that require: (1) the ownership interests in subsidiaries held by parties other than the parent be clearly identified, labeled, and presented in the consolidated statement of financial position within equity, but separate from the parent’s equity; (2) the amount of consolidated net income attributable to the parent and to the noncontrolling interest be clearly identified and presented on the face of the consolidated statement of income; (3) changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary be accounted for consistently; (4) when a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary be initially measured at fair value; and (5) entities provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS 160 is effective as of the beginning of the fiscal year that begins on or after December 15, 2008. Management is currently evaluating the effects, if any, that SFAS 160 will have upon adoption of this standard.

In June 2007, the FASB ratified the consensus reached in EITF 06-11, Accounting for Income Tax Benefits of Dividends on Share-Based Payment Awards. EITF 06-11 applies to entities that have share-based payment arrangements that entitle employees to receive dividends or dividend equivalents on equity-classified nonvested shares when those dividends or dividend equivalents are charged to retained earnings and result in an income tax deduction. Entities that have share-based payment arrangements that fall within the scope of EITF 06-11 will be required to increase capital surplus for any realized income tax benefit associated with dividends or dividend equivalents paid to employees for equity classified nonvested equity awards. Any increase recorded to capital surplus is required to be included in an entity’s pool of excess tax benefits that are available to absorb potential future tax deficiencies on share-based payment awards. The Company adopted EITF 06-11 on January 1, 2008 for dividends declared on share-based payment awards subsequent to this date. The adoption did not have a material impact.

In February 2007, the FASB issued statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of FASB Statement No. 115 (“SFAS 159”). This standard permits an entity to measure financial instruments and certain other items at estimated fair value. Most of the provisions of SFAS No. 159 are elective; however, the amendment to SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities, applies to all entities that own trading and available-for-sale securities. The fair value option created by SFAS 159 permits an entity to measure eligible items at fair value as of specified election dates. The fair value option is generally applied instrument by instrument, is irrevocable unless a new election date occurs, and must be applied to the entire instrument and not to only a portion of the instrument. SFAS 159 is effective as of the beginning of the first fiscal year that begins after November 15, 2007. On January 1, 2008, the Company elected the fair value option for its available-for-sale portfolio of mortgage-backed securities. Previously, these securities were considered to be other than temporarily impaired and carried at lower-of-cost or market. As of the adoption date, the carrying value of the existing mortgage-backed securities classified as available-for-sale were adjusted to fair value through a cumulative-effect adjustment to the beginning balance of retained earnings. This adjustment represented an increase in the carrying value of the securities of approximately $1.7 million.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, to eliminate the diversity in practice that exists due to the different definitions of fair value that are dispersed among the many accounting pronouncements that require fair value measurements, and the limited guidance for applying those definitions. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company adopted SFAS 157 on January 1, 2008, and the adoption did not have a material impact on financial condition or results of operations.

NOTE 2. MORTGAGE-BACKED SECURITIES

As of December 31, 2007, all of Bimini Capital's MBS were classified as either trading or available-for-sale. On January 1, 2008, the entire available-for-sale securities portfolio was transferred to trading in conjunction with the Company’s comprehensive review of its balance sheet management strategies and adoption of SFAS No. 159. Accordingly, fluctuations in the portfolio’s fair value are recorded directly to income effective January 1, 2008.

The following are the carrying values of Bimini Capital's MBS portfolio as of September 30, 2008 and December 31, 2007:

(in thousands)

	September 30, 2008		December 31, 2007
Hybrid Arms	$	62,915	$	398,982
Adjustable Rate Mortgages		84,387		177,608
Fixed Rate Mortgages		65,244		113,989
MBS Derivatives		14,022		-
Total	$	226,568	$	690,579

The following table presents the components of the carrying value of Bimini Capital’s MBS portfolio as of September 30, 2008 and December 31, 2007:

(in thousands)

	September 30, 2008			December 31, 2007
Available-for-Sale Securities
Principal balance	$	-		$	291,579
Unamortized premium		-			3,134
Unaccreted discount		-			(309	)
Held for Trading Securities
Principal balance		210,374			385,849
Premium		2,440			10,326
Discount		(268	)		-
Trading Securities – MBS Derivatives		14,022			-
Carrying value/estimated fair value	$	226,568		$	690,579

As of September 30, 2008, all of Bimini Capital's MBS investments have contractual maturities greater than 36 months. Actual maturities of MBS investments are generally shorter than stated contractual maturities. Actual maturities of Bimini Capital's MBS investments are affected by the contractual lives of the underlying mortgages, periodic payments of principal, and prepayments of principal.

NOTE 3. EARNINGS PER SHARE

The Company follows the provisions of SFAS No. 128, Earnings per Share, and the guidance provided in the FASB's Emerging Issues Task Force (“EITF”) Issue No. 03-6, Participating Securities and the two-class method under FASB Statement No. 128, Earnings Per Share, which requires companies with complex capital structures, common stock equivalents, or two classes of participating securities to present both basic and diluted EPS on the face of the statement of operations. Basic EPS is calculated as income available to common stockholders divided by the weighted average number of common shares outstanding during the period. Diluted EPS is calculated using the “if converted” method for common stock equivalents.

Shares of Class B Common Stock, participating and convertible into Class A Common Stock, are entitled to receive dividends in an amount equal to the dividends declared on each share of Class A Common Stock if, and when authorized and declared by the Board of Directors. Following the provisions of EITF 03-6, the Class B Common Stock is included in the computation of basic EPS using the two-class method, and consequently is presented separately from Class A Common Stock. Class B common shares are not included in the computation of diluted Class A EPS as the conditions for conversion to Class A shares were not met.

The Class C common shares are not included in the basic EPS computation as these shares do not have participation rights. The Class C common shares totaling 319,388 are not included in the computation of diluted Class A EPS as the conditions for conversion to Class A shares were not met.

The Company has dividend eligible stock incentive plan shares that were outstanding during the nine and three months ended September 30, 2008 and 2007. These stock incentive plan shares have dividend participation rights, but no contractual obligation to share in losses. Since there is no such obligation, these incentive plan shares are not included, pursuant to EITF 03-6, in the nine and three months ended September 30, 2008 and 2007, basic EPS computations for the Class A Common Stock, even though they are participating securities. For the computation of diluted EPS for the Class A Common Stock for the periods ended September 30, 2008 and 2007, 21,658 and 259,016 phantom shares, respectively, are excluded as their inclusion would be anti-dilutive.

The table below reconciles the numerators and denominators of the basic and diluted EPS.

(in thousands, except per share data)

	(Unaudited)						(Unaudited)
	Nine Months Ended September 30,						Three Months Ended September 30,
	2008			2007			2008			2007
Basic and diluted net loss per Class A common share:
Numerator: net loss allocated to the Class A common shares	$	(53,387	)	$	(242,138	)	$	(14,213	)	$	(4,663	)
Denominator: basic and diluted:
Class A common shares outstanding at the balance sheet date		25,535			24,765			25,535			24,765
Effect of weighting		(387	)		(164	)		(142	)		(75	)
Weighted average shares-basic and diluted		25,148			24,601			25,393			24,690
Basic and diluted net loss per Class A common share	$	(2.12	)	$	(9.84	)	$	(0.56	)	$	(0.19	)
Basic and diluted net loss per Class B common share:
Numerator: net loss allocated to Class B common shares	$	(668	)	$	(3,123	)	$	(178	)	$	(60	)
Denominator: basic and diluted:
Class B common shares outstanding at the balance sheet date		319			319			319			319
Effect of weighting		-			-			-			-
Weighted average shares-basic and diluted		319			319			319			319
Basic and diluted net loss per Class B common share	$	(2.09	)	$	(9.79	)	$	(0.56	)	$	(0.19	)

NOTE 4. REPURCHASE AGREEMENTS

Bimini Capital has entered into repurchase agreements to finance most of its MBS purchases. The repurchase agreements are short-term borrowings that bear interest at rates that have historically moved in close relationship to London Interbank Offered Rates (“LIBOR”). As of September 30, 2008, Bimini Capital had outstanding repurchase obligations of $200.7 million with a net weighted average borrowing rate of 2.99% and these obligations were collateralized by MBS with a fair value of $208.9 million. As of December 31, 2007, Bimini Capital had outstanding repurchase obligations of $678.2 million with a net weighted average borrowing rate of 5.07%. These obligations were collateralized by MBS with a fair value of $683.9 million.

As of September 30, 2008 and December 31, 2007, Bimini Capital’s repurchase agreements and the collateral agreements thereon had remaining maturities as summarized below:

(in thousands)

	OVERNIGHT (1 DAY OR LESS)		BETWEEN 2 AND 30 DAYS			BETWEEN 31 AND 90 DAYS			GREATER THAN 90 DAYS			TOTAL
September 30, 2008
Agency-Backed Mortgage-Backed Securities:
Amortized cost of securities sold, including accrued interest receivable	$	-	$	89,128		$	119,871		$	-		$	208,999
Fair market value of securities sold, including accrued interest receivable	$	-	$	89,128		$	119,871		$	-		$	208,999
Repurchase agreement liabilities associated with these securities	$	-	$	85,532		$	115,176		$	-		$	200,708
Net weighted average borrowing rate		-		3.46	%		2.65	%		-			2.99	%
December 31, 2007
Agency-Backed Mortgage-Backed Securities:
Amortized cost of securities sold, including accrued interest receivable	$	-	$	249,124		$	37,559		$	397,260		$	683,943
Fair market value of securities sold, including accrued interest receivable	$	-	$	249,124		$	37,559		$	397,260		$	683,943
Repurchase agreement liabilities associated with these securities	$	-	$	244,379		$	37,577		$	396,222		$	678,178
Net weighted average borrowing rate		-		5.21	%		5.34	%		4.96	%		5.07	%

The following summarizes information regarding the Company’s amounts at risk with individual counterparties greater than 10% of the Company’s equity as of September 30, 2008 and December 31, 2007.

(in thousands)

Repurchase Agreement Counterparties	Amount at Risk(1)		Weighted Average Maturity of Repurchase Agreements in Days
September 30, 2008
MF Global Inc.	$	6,461		47
RBS Greenwich Capital		1,998		27
December 31, 2007
Deutsche Bank Securities, Inc.	$	8,823		193
Goldman Sachs		2,931		19

(1)	Equal to the fair value of securities sold, plus accrued interest income, minus the sum of repurchase agreement liabilities, plus accrued interest expense.

NOTE 5. TRUST PREFERRED SECURITIES

At September 30, 2008, Bimini Capital sponsored two statutory trusts, of which 100% of the common equity is owned by the Company, formed for the purpose of issuing trust preferred capital securities to third-party investors and investing the proceeds from the sale of such capital securities solely in junior subordinated debt securities of the Company. The debt securities held by each trust are the sole assets of that trust. Obligations related to these statutory trusts are presented below.

(in thousands)

	September 30, 2008		December 31, 2007
Junior subordinated notes owed to Bimini Capital Trust I (BCTI)	$	51,550	$	51,550
Junior subordinated notes owed to Bimini Capital Trust II (BCTII)	$	51,547	$	51,547

The BCTI trust preferred securities and Bimini Capital's BCTI Junior Subordinated Notes have a fixed rate of interest until March 30, 2010, in the case of Series A Preferred Securities, and until April 30, 2010, in the case of Series B Preferred Securities, of 7.61% and thereafter, through maturity in 2035, the rate will float at a spread of 3.30% over the prevailing three-month LIBOR rate. The BCTI trust preferred securities and Bimini Capital's BCTI Junior Subordinated Notes require quarterly interest distributions and are redeemable at Bimini Capital's option, in whole or in part and without penalty, beginning March 30, 2010, in the case of Series A Preferred Securities, and beginning April 30, 2010, in the case of Series B Preferred Securities and at any date thereafter. Bimini Capital's BCTI Junior Subordinated Notes are subordinate and junior in right of payment of all present and future senior indebtedness.

The BCTII trust preferred securities and Bimini Capital's BCTII Junior Subordinated Notes have a fixed rate of interest until December 15, 2010, of 7.8575% and thereafter, through maturity in 2035, the rate will float at a spread of 3.50% over the prevailing three-month LIBOR rate. The BCTII trust preferred securities and Bimini Capital's BCTII Junior Subordinated Notes require quarterly interest distributions and are redeemable at Bimini Capital's option, in whole or in part and without penalty, beginning December 15, 2010, and at any date thereafter. Bimini Capital's BCTII Junior Subordinated Notes are subordinate and junior in right of payment of all present and future senior indebtedness.

Each trust is a variable interest entity pursuant to FIN No. 46 because the holders of the equity investment at risk do not have adequate decision making ability over the trust's activities. Since Bimini Capital's investment in each trust's common equity securities was financed directly by the applicable trust as a result of its loan of the proceeds to Bimini Capital, that investment is not considered to be an equity investment at risk pursuant to FIN No. 46. Since Bimini Capital's common share investments in BCTI and BCTII are not a variable interest, Bimini Capital is not the primary beneficiary of the trusts. Therefore, Bimini Capital has not consolidated the financial statements of BCTI and BCTII into its financial statements. Based on the aforementioned accounting guidance, the accompanying consolidated financial statements present Bimini Capital's BCTI and BCTII Junior Subordinated Notes issued to the trusts as liabilities and Bimini Capital's investments in the common equity securities of BCTI and BCTII as assets. For financial statement purposes, Bimini Capital records payments of interest on the Junior Subordinated Notes issued to BCTI and BCTII as interest expense.

NOTE 6. CAPITAL STOCK

During the nine and three months ended September 30, 2008, the Company issued a total of 568,565 and 141,950 shares of Class A Common Stock to its independent directors for the payment of director fees for services rendered.

During the nine and three months ended September 30, 2008, the Company issued 104,847 and 42,666 shares of its Class A Common Stock to employees pursuant to the terms of the stock incentive plan phantom share grants (see Note 7).

NOTE 7. STOCK INCENTIVE PLANS

On December 1, 2003, Bimini Capital adopted the 2003 Long Term Incentive Compensation Plan (the “2003 Plan”) to provide Bimini Capital with the flexibility to use stock options and other awards as part of an overall compensation package to provide a means of performance-based compensation to attract and retain qualified personnel. The 2003 Plan was amended and restated in March 2004. Key employees, directors and consultants are eligible to be granted stock options, restricted stock, phantom shares, dividend equivalent rights and other stock-based awards under the 2003 Plan. Subject to adjustment upon certain corporate transactions or events, a maximum of 4,000,000 shares of the Class A Common Stock (but not more than 10% of the Class A Common Stock outstanding on the date of grant) may be subject to stock options, shares of restricted stock, phantom shares and dividend equivalent rights under the 2003 Plan.

Phantom share awards represent a right to receive a share of Bimini's Class A Common Stock. These awards do not have an exercise price and are valued at the fair value of Bimini Capital’s Class A Common Stock at the date of the grant. The grant date value is being amortized to compensation expense on a straight-line basis over the vesting period of the respective award. The phantom shares vest, based on the employees’ continuing employment, following a schedule as provided in the grant agreements, for periods through December 31, 2010. The Company recognizes compensation expense over the vesting period. Compensation expense recognized for phantom shares during the nine and three months ended September 30, 2008 and 2007 totaled approximately, $0.6 and $0.2 million and $2.2 and $0.8 million, respectively. Phantom share awards may or may not include dividend equivalent rights. Dividends paid on unsettled phantom shares are charged to retained earnings when declared.

A summary of phantom share activity during the nine month periods ended September 30, 2008 and 2007 is presented below:

	Nine Months Ended September 30,
	2008					2007
	Shares			Weighted-Average Grant-Date Fair Value		Shares			Weighted-Average Grant-Date Fair Value
Nonvested, at January 1		127,373		$	11.36		339,862		$	12.60
Granted		250,000			0.26		25,607			7.61
Vested		(106,958	)		6.00		(164,729	)		13.08
Forfeited		(106,256	)		5.82		(16,550	)		8.78
Nonvested, at September 30		164,159		$	1.54		184,190		$	11.82

There were a total of 0 and 75,326 phantom shares that were vested and unissued as of September 30, 2008 and 2007, respectively. The total number of outstanding (vested and nonvested) phantom share awards that include dividend equivalent rights as of September 30, 2008 and 2007 were 21,658 and 259,016, respectively. As of September 30, 2008, there was approximately $165,000 of total unrecognized compensation cost related to nonvested phantom share awards. The cost is expected to be recognized over a weighted-average period of 11.3 months.

Bimini Capital also has adopted the 2004 Performance Bonus Plan (the “Performance Bonus Plan”). The Performance Bonus Plan is an annual bonus plan that permits the issuance of the Company’s Class A Common Stock in payment of stock-based awards made under the plan. No stock-based awards have been made under and no shares of the Company’s stock have been issued under the Performance Bonus Plan.

NOTE 8. COMMITMENTS AND CONTINGENCIES

Litigation Contingencies. The Company is involved in various lawsuits and claims, both actual and potential, including some that it has asserted against others, in which monetary damages and other relief is sought. The resolution of such lawsuits and claims is inherently unpredictable. In accordance with GAAP, it is the Company’s policy to accrue for loss contingencies only when it is both probable that a loss has actually been incurred and an amount of such loss is reasonably estimable. Except as described below, the lawsuits and claims involving the Company relate primarily to contractual disputes arising out of the ordinary course of the Company’s current and past business activities. See also Note 11(g).

On September 17, 2007, a complaint was filed in the U.S. District Court for the Southern District of Florida by William Kornfeld against the Company, certain of the Company’s current and former officers and directors, Flagstone Securities, LLC and BB&T Capital Markets alleging various violations of the federal securities laws and seeking class action certification. On October 9, 2007, a complaint was filed in the U.S. District Court for the Southern District of Florida by Richard and Linda Coy against the Company, certain of the Company’s current and former officers and directors, Flagstone Securities, LLC and BB&T Capital Markets alleging various violations of the federal securities laws and seeking class action certification. On September 29, 2008, the Kornfeld and Coy cases were consolidated as In re Opteum Inc. Securities Litigation and the Court appointed a lead plaintiff and lead counsel. On October 29, 2008, a consolidated amended complaint was filed in this action. The Company believes it has meritorious defenses in this action.

Guarantees. Bimini Capital has guaranteed the performance of OITRS with respect to certain contractual obligations arising in connection with the sale of mortgage servicing rights by OITRS. See also Note 11(g).

NOTE 9. INCOME TAXES

REIT taxable income (loss), as generated by Bimini Capital’s qualifying REIT activities, is computed differently from Bimini Capital’s financial statement net income (loss) as computed in accordance with GAAP. Depending on the number and size of the various items or transactions being accounted for differently, the differences between Bimini Capital’s REIT taxable income (loss) and Bimini Capital’s financial statement net income (loss) can be substantial and each item can affect several years.

As of September 30, 2008, the REIT has approximately $68.7 million of tax capital loss carryforwards available to offset future tax capital gains. As of September 30, 2008 the REIT has a tax net operating loss carryforward of approximately $13.5 million that is immediately available to offset future REIT taxable income.

NOTE 10. FAIR VALUE

In connection with the adoption of SFAS No. 159, Bimini Capital elected to transfer its available-for-sale portfolio of MBS to trading. The securities transferred have similar characteristics to the Company’s existing trading portfolio, including issuer, credit quality, yield, duration and remaining term.

The securities transferred were previously considered to be other than temporarily impaired and carried at lower-of-cost-or-market. As such, decreases in fair value were charged directly to earnings, while increases in fair value were not recorded. As a result of electing to record these securities at fair value pursuant to the provisions of SFAS No. 159, the Company recorded the following to opening retained earnings:

(in thousands)

Balance at January 1, 2008 (after adoption)	$	296,118
Balance at December 31, 2007 (prior to adoption)		(294,404	)
Cumulative effect of adopting the fair value option	$	1,714

The Company measures or monitors all of its MBS on a fair value basis. Fair value is the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for its mortgage-backed securities, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset. When possible, the Company looks to active and observable markets to price identical assets. When identical assets are not traded in active markets, the Company looks to market observable data for similar assets. Nevertheless, certain assets are not actively traded in observable markets and the Company must use alternative valuation techniques to derive a fair value measurement.

All of the fair value adjustments included in losses from continuing operations resulted from Level 2 fair value methodologies; that is, the Company is able to value the assets based on observable market data for similar instruments. The securities in the Company’s trading portfolio are priced via independent providers, whether those are pricing services or quotations from market-makers in the specific instruments. In obtaining such valuation information from third parties, the Company has evaluated the valuation methodologies used to develop the fair values in order to determine whether such valuations are representative of an exit price in the Company’s principal markets.

Fair value is used to measure the trading portfolio on a recurring basis. The fair value as of September 30, 2008 is determined as follows:

(in thousands)

Fair Value Measurements as of September 30, 2008, Using
Quoted Prices in Active Markets for Identical Assets (Level 1)	$	-
Significant Other Observable Inputs (Level 2)		226,568
Significant Unobservable Inputs (Level 3)		-
Total Fair Value Measurements	$	226,568

NOTE 11. DISCONTINUED OPERATIONS

OITRS

The results of discontinued operations of OITRS included in the accompanying consolidated statements of operations for the nine and three months ended September 30, 2008 and 2007 were as follows:

(in thousands)

	Nine Months Ended September 30,						Three Months Ended September 30,
	2008			2007			2008			2007
Revenues
Interest income	$	3		$	22,543		$	-		$	515
Interest expense		(20	)		(17,521	)		(5	)		(472	)
Net interest income (deficiency)		(17	)		5,022			(5	)		43
Loss on discontinued mortgage banking activities
Fair value adjustment on retained interest, trading		(43,085	)		(28,126	)		(8,255	)		(634	)
Other discontinued mortgage banking activities		(126	)		(40,794	)		(79	)		(6,471	)
Other income and expenses, net of non-recurring items		1,885			(15,412	)		47			4,364
Net servicing loss		(1,364	)		(13,868	)		(2,328	)		(1,241	)
Other interest income (expense) and loss reserves		(2,001	)		(23,617	)		(759	)		1,077
Deficiency of revenues		(44,708	)		(116,795	)		(11,379	)		(2,862	)
Expenses
General and administrative expenses		(3,585	)		(30,833	)		(675	)		(2,918	)
Loss before provision for income taxes		(48,293	)		(147,628	)		(12,054	)		(5,780	)
Provision for income taxes and valuation allowance		-			(7,181	)		-			4,282
Loss from discontinued operations, net of taxes	$	(48,293	)	$	(154,809	)	$	(12,054	)	$	(1,498	)

During the nine months ended September 30, 2008, OITRS’s 51% membership interest in Interactive Mortgage Advisors, LLC, a Delaware limited liability company (“IMA”), was sold for $500,000 as evidenced by a promissory note. The note, which is secured by the assets of IMA and guaranteed by certain affiliates of IMA, bears interest at a rate of 8% per annum and is payable in full on December 31, 2008. The sale of OITRS’ membership interest resulted in a loss of approximately $285,000. This loss is included in the table above under “Other income and expenses, net of non-recurring items.”

The assets and liabilities of OITRS included in the consolidated balance sheets as of September 30, 2008 and December 31, 2007 were as follows:

(in thousands)

	September 30, 2008		December 31, 2007
Assets
Cash and cash equivalents	$	73	$	705
Mortgage loans held for sale		456		983
Retained interests, trading		14,384		69,301
Securities held for sale		15		173
Originated mortgage servicing rights		-		3,073
Receivables		23,923		17,868
Property and equipment, net		-		285
Prepaids and other assets		3,733		4,232
Assets held for sale	$	42,584	$	96,620
Liabilities
Secured borrowings	$	-	$	18,000
Accounts payable, accrued expenses and other		14,353		9,842
Liabilities related to assets held for sale	$	14,353	$	27,842

(a) - Mortgage Loans Held for Sale

Prior to ceasing operations, upon the closing of a residential mortgage loan or shortly thereafter, OITRS would sell or securitize the majority of its mortgage loan originations. OITRS also sold mortgage loans insured or guaranteed by various government-sponsored entities and private insurance agencies. The insurance or guaranty was provided primarily on a nonrecourse basis to OITRS, except where limited by the Federal Housing Administration and Veterans Administration and their respective loan programs. Mortgage loans held for sale consist of the following as of September 30, 2008 and December 31, 2007:

	September 30, 2008			December 31, 2007
Mortgage loans held for sale, and other, net	$	3,637		$	4,780
Valuation allowance		(3,181	)		(3,797	)
Total	$	456		$	983

Series	Issue Date	September 30, 2008		December 31, 2007
HMAC 2004-1	March 4, 2004	$	1,744	$	2,460
HMAC 2004-2	May 10, 2004		1,424		1,408
HMAC 2004-3	June 30, 2004		386		880
HMAC 2004-4	August 16, 2004		1,023		1,506
HMAC 2004-5	September 28, 2004		1,874		3,043
HMAC 2004-6	November 17, 2004		1,534		5,181
OMAC 2005-1	January 31, 2005		2,182		6,948
OMAC 2005-2	April 5, 2005		631		7,046
OMAC 2005-3	June 17, 2005		2,428		10,736
OMAC 2005-4	August 25, 2005		470		9,752
OMAC 2005-5	November 23, 2005		180		7,717
OMAC 2006-1	March 23, 2006		508		10,835
OMAC 2006-2	June 26, 2006		-		1,789
Total		$	14,384	$	69,301

	September 30, 2008			December 31, 2007
Balance sheet carrying value of retained interests – fair value	$	14,384		$	69,301
Weighted average life (in years)		3.99			4.09
Prepayment assumption (annual rate)		19.93	%		26.37	%
Impact on fair value of 10% adverse change	$	(1,388	)	$	(6,908	)
Impact on fair value of 20% adverse change	$	(2,042	)	$	(12,577	)
Expected credit losses (% of original unpaid principal balance)		3.40	%		1.22	%
Impact on fair value of 10% adverse change	$	(2,577	)	$	(6,409	)
Impact on fair value of 20% adverse change	$	(4,200	)	$	(13,633	)
Residual cash-flow discount rate		27.50	%		20.00	%
Impact on fair value of 10% adverse change	$	(1,396	)	$	(4,138	)
Impact on fair value of 20% adverse change	$	(2,600	)	$	(7,907	)
Interest rates on variable and adjustable loans and bonds	Forward LIBOR Yield Curve			Forward LIBOR Yield Curve
Impact on fair value of 10% adverse change	$	(4,876	)	$	(14,906	)
Impact on fair value of 20% adverse change	$	(7,294	)	$	(28,225	)

Series	Issue Date	Original Unpaid Principal Balance		Actual Losses Through September 30, 2008			Projected Future Credit Losses as of September 30, 2008			Projected Total Credit Losses as of September 30, 2008
HMAC 2004-1	March 4, 2004	$	309,710		0.57	%		0.36	%		0.93	%
HMAC 2004-2	May 10, 2004		388,737		0.78	%		0.46	%		1.24	%
HMAC 2004-3	June 30, 2004		417,055		0.59	%		0.66	%		1.25	%
HMAC 2004-4	August 16, 2004		410,123		0.54	%		0.55	%		1.09	%
HMAC 2004-5	September 28, 2004		413,875		0.67	%		0.80	%		1.47	%
HMAC 2004-6	November 17, 2004		761,027		0.91	%		1.15	%		2.06	%
OMAC 2005-1	January 31, 2005		802,625		0.84	%		1.44	%		2.28	%
OMAC 2005-2	April 5, 2005		883,987		0.95	%		1.62	%		2.57	%
OMAC 2005-3	June 17, 2005		937,117		0.78	%		1.88	%		2.66	%
OMAC 2005-4	August 25, 2005		1,321,739		1.02	%		2.75	%		3.77	%
OMAC 2005-5	November 23, 2005		986,277		1.11	%		3.87	%		4.98	%
OMAC 2006-1	March 23, 2006		934,441		0.95	%		4.60	%		5.55	%
OMAC 2006-2	June 26, 2006		491,572		1.81	%		8.69	%		10.50	%
Total		$	9,058,285		0.93	%		2.47	%		3.40	%

	September 30, 2008		September 30, 2007
Servicing fees received	$	1,055	$	11,375
Servicing advances and repayments		92		5,110
Cash flows received on retained interests		11,831		4,479

As of Date	Total Principal Amount of Loans		Principal Amount of Loans 60 Days or more delinquent		Net Credit Losses
September 30, 2008	$	4,068,088	$	701,639	$	83,895
December 31, 2007		4,528,481		457,872		23,639

	September 30, 2008			September 30, 2007
Balance at beginning of period	$	3,073		$	98,859
Additions		-			7,727
Sales, net of reserve for prepayment protection		(1,344	)		(87,603	)
Changes in fair value:
Due to changes in market conditions and run-off		614			(13,785	)
Due to change in valuation assumptions		-			(2,558	)
Mortgage servicing rights surrendered		(2,028	)		-
Valuation Allowance		(315	)		-
Balance at end of period	$	-		$	2,640

	September 30, 2008		December 31, 2007
Servicing advances (principal and interest)	$	11,385	$	5,636
Servicing advances (taxes and insurance)		8,185		7,495
Servicing sale receivable		3,899		4,681
Other receivables		454		56
Totals	$	23,923	$	17,868

	For the Nine Months Ended
	September 30, 2008			September 30, 2007
Balance—Beginning of period	$	5,260		$	7,136
Reclassification from other liabilities		1,700			-
Provision		1,759			16,159
Charge-Offs		(1,416	)		(14,013	)
Balance—End of period	$	7,303		$	9,282

			Fair Value Measurements at September 30, 2008, Using
	Fair Value Measurements September 30, 2008		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Mortgage loans held for sale	$	456	$	-	$	-	$	456
Retained interests, trading		14,384		-		-		14,384
Securities held for sale		15		-		-		15
Originated mortgage servicing rights		-		-		-		-

Asset Category		Market Value	Percentage of Entire Portfolio	Weighted Average Coupon	Weighted Average Maturity in Months	Longest Maturity	Weighted Average Coupon Reset in Months	Weighted Average Lifetime Cap	Weighted Average Periodic Cap
September 30, 2008
Adjustable-Rate MBS	$	84,387	37.24%	5.17%	279	1-Jan-36	6.48	10.49%	8.82%
Fixed-Rate MBS		65,244	28.80%	6.62%	336	1-Jul-38	n/a	n/a	n/a
Hybrid Adjustable-Rate MBS		62,915	27.77%	5.03%	338	1-Apr-38	52.69	10.03%	2.00%
Total Mortgage Backed Pass Through		212,546	93.81%	5.57%	314	1-Jul-38	26.21	10.29%	3.49%
Inverse IO MBS		14,022	6.19%	3.91%	351	25-Jan-38	0.31	n/a	n/a
Total Mortgage Assets	$	226,568	100.00%	5.47%	316	1-Jul-38	23.96	n/a	3.49%
December 31, 2007
Adjustable-Rate MBS	$	177,608	25.72%	6.58%	294	1-Apr-44	5.49	10.61%	2.47%
Fixed-Rate MBS		110,297	15.97%	6.98%	335	1-Oct-37	n/a	n/a	n/a
Hybrid Adjustable-Rate MBS		398,982	57.78%	6.11%	344	1-Sep-37	39.62	11.92%	3.62%
Fixed-Rate CMO		3,692	0.53%	7.00%	233	18-May-27	n/a	n/a	n/a
Total Portfolio	$	690,579	100.00%	6.37%	329	1-Apr-44	29.11	11.52%	3.41%

	September 30, 2008					December 31, 2007
Agency	Market Value		Percentage of Entire Portfolio			Market Value		Percentage of Entire Portfolio
Fannie Mae	$	217,707		96.09	%	$	638,763		92.50	%
Freddie Mac		7,684		3.39	%		46,318		6.70	%
Ginnie Mae		1,177		0.52	%		5,498		0.80	%
Total Portfolio	$	226,568		100.00	%	$	690,579		100.00	%

Entire Portfolio	September 30, 2008		December 31, 2007
Weighted Average Pass Through Purchase Price	$	102.83	$	102.32
Weighted Average Derivative Purchase Price		6.86		-
Weighted Average Pass Through Current Price	$	101.03	$	101.94
Weighted Average Derivative Current Price	$	7.04	$	-
Effective Duration (1)		2.789		1.267

Quarter Ended	Average Investment Securities Held		Total Interest Income		Quarterly Retrospective Adj.			Premium Lost due to Paydowns		Yield on Average Interest Earning Assets (1)			Average Balance of Repurchase Agreements Outstanding		Interest Expense (2)		Average Cost of Funds (2)			Net Interest Income			Net Interest Spread			Trust Preferred Interest Expense
September 30, 2008	$	375,239		6,149		-			568,213		5.95	%	$	326,577		4,193		5.14	%	$	1,956			0.81	%	$	1,933
June 30, 2008		519,614		6,787		-			415		4.91	%		471,732		5,448		4.62	%		1,339			0.29	%		1,933
March 31, 2008		602,948		10,112		-			652		6.28	%		584,597		7,590		5.19	%		2,522			1.08	%		1,933
December 31, 2007		972,236		11,364		(345	)		-		4.68	%		944,832		10,531		4.46	%		833			0.22	%		1,933
September 30, 2007		1,536,265		24,634		(404	)		-		6.41	%		1,497,409		20,998		5.61	%		3,636			0.81	%		1,933
June 30, 2007		2,375,216		26,970		(6,182	)		-		4.54	%		2,322,727		33,444		5.76	%		(6,475	)		(1.22	%)		1,933
March 31, 2007		2,870,265		38,634		1,794			-		5.38	%		2,801,901		37,405		5.34	%		1,229			0.04	%		1,933
December 31, 2006		2,944,397		31,841		(4,013	)		-		4.33	%		2,869,210		39,448		5.50	%		(7,607	)		(1.17	%)		1,933
September 30, 2006		3,243,674		43,051		3,523			-		5.31	%		3,151,813		42,683		5.42	%		368			(0.11	%)		1,933
June 30, 2006		3,472,921		54,811		13,395			-		6.31	%		3,360,421		41,674		4.96	%		13,137			1.35	%		1,933
March 31, 2006		3,516,292		40,512		1,917			-		4.61	%		3,375,777		36,566		4.33	%		3,946			0.28	%		1,933
December 31, 2005		3,676,175		43,140		3,249			-		4.69	%		3,533,486		35,337		4.00	%		7,803			0.69	%		1,858
September 30, 2005		3,867,263		43,574		4,348			-		4.51	%		3,723,603		32,345		3.48	%		11,230			1.03	%		973
June 30, 2005		3,587,629		36,749		2,413			-		4.10	%		3,449,744		26,080		3.02	%		10,668			1.07	%		454
March 31, 2005		3,136,142		31,070		1,013			-		3.96	%		2,976,409		19,731		2.65	%		11,339			1.31	%		-
December 31, 2004		2,305,748		20,463		1,250			-		3.55	%		2,159,891		10,796		2.00	%		9,667			1.55	%		-
September 30, 2004		1,573,343		11,017		-			-		2.80	%		1,504,919		4,253		1.13	%		6,764			1.67	%		-
June 30, 2004		1,512,481		10,959		-			-		2.90	%		1,452,004		4,344		1.20	%		6,615			1.70	%		-
March 31, 2004		871,140		7,194		-			-		3.30	%		815,815		2,736		1.34	%		4,458			1.96	%		-

			Interest Rates Fall 100 BPS			Interest Rates Rise 100 BPS			Interest Rates Rise 200 BPS
Adjustable Rate MBS
Fair Value	$	84,387
Change in Fair Value			$	816		$	(816	)	$	(1,632	)
Change as a % of Fair Value				0.97	%		(0.97	%)		(1.93	%)
Fixed Rate MBS
Fair Value	$	65,244
Change in Fair Value			$	1,781		$	(1,781	)	$	(3,562	)
Change as a % of Fair Value				2.73	%		(2.73	%)		(5.46	%)
Hybrid Adjustable Rate MBS
Fair Value	$	62,915
Change in Fair Value			$	1,833		$	(1,833	)	$	(3,666	)
Change as a % of Fair Value				2.91	%		(2.91	%)		(5.83	%)
Derivatives
Fair Value	$	14,022
Change in Fair Value			$	1,889		$	(1,889	)	$	(3,778	)
Change as a % of Fair Value				13.47	%		(13.47	%)		(26.94	%)
Cash
Fair Value	$	12,377
Portfolio Total
Fair Value	$	226,568
Change in fair Value			$	6,319		$	(6,319	)	$	(12,638	)
Change as a % of Fair Value				2.79	%		(2.79	%)		(5.58	%)

	Nine Months Ended September 30, 2008		Three Months Ended September 30, 2008
Servicing fees received	$	1,055	$	210
Servicing advances and repayments		92		(694	)
Cash flows received on retained interests		11,831		1,160

3.1	Articles of Amendment and Restatement, incorporated by reference to Exhibit 3.1 to the Company’s Form S-11/A, filed with the SEC on April 29, 2004
3.2	Articles Supplementary, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, dated November 3, 2005, filed with the SEC on November 8, 2005
3.3	Articles of Amendment, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, dated February 10, 2006, filed with the SEC on February 15, 2006
3.4	Articles of Amendment, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, dated September 24, 2007, filed with the SEC on September 24, 2007
3.5	Certificate of Notice, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, dated January 28, 2008, filed with the SEC on February 1, 2008
3.6	Articles of Amendment, incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, dated May 27, 2008, filed with the SEC on May 29, 2008
3.7	Amended and Restated Bylaws, incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K, dated September 24, 2007, filed with the SEC on September 24, 2007
†10.1	Bimini Capital Management, Inc. 2003 Long Term Incentive Compensation Plan, as amended September 28, 2007, incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2007, filed with the SEC on November 8, 2007
†10.2	Bimini Capital Management, Inc. 2004 Performance Bonus Plan, as amended September 28, 2007, incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2007, filed with the SEC on November 8, 2007
†10.3	Form of Phantom Share Award Agreement incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2007, filed with the SEC on November 8, 2007
†10.4	Form of Restricted Stock Award Agreement incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2007, filed with the SEC on November 8, 2007
†10.5	Separation Agreement and General Release, dated as of June 29, 2007, by and among Opteum Inc., Opteum Financial Services, LLC and Peter R. Norden, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, dated June 30, 2007, filed with the SEC on July 5, 2007
†10.6	Separation Agreement and General Release by and between Bimini Capital Management, Inc. and Jeffrey J. Zimmer, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated April 14, 2008, filed with the SEC on April 16, 2008
†10.7	Retention and Severance Agreement between Bimini Capital Management, Inc. and G. Hunter Haas, IV, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated April 18, 2008, filed with the SEC on April 18, 2008
†10.8	Retention and Severance Agreement between Bimini Capital Management, Inc. and J. Christopher Clifton, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, dated April 18, 2008, filed with the SEC on April 18, 2008
†10.9	Employment Agreement dated as of April 27, 2006, by and between Opteum Inc. and J. Christopher Clifton, incorporated by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q, dated August 11, 2008, filed with the SEC on August 11, 2008
10.10	Voting Agreement, among certain stockholders of Bimini Mortgage Management, Inc., Jeffrey J. Zimmer, Robert E. Cauley, Amber K. Luedke, George H. Haas, IV, Kevin L. Bespolka, Maureen A. Hendricks, W. Christopher Mortenson, Buford H. Ortale, Peter Norden, certain of Mr. Norden’s affiliates, Jason Kaplan, certain of Mr. Kaplan’s affiliates and other former owners of Opteum Financial Services, LLC, incorporated by reference to Exhibit 99(D) to the Schedule 13D, dated November 3, 2005, filed with the SEC on November 14, 2005
10.11	Membership Interest Purchase, Option and Investor Rights Agreement among Opteum Inc., Opteum Financial Services, LLC and Citigroup Global Markets Realty Corp. dated as of December 21, 2006, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated December 21, 2006, filed with the SEC on December 21, 2006
10.12	Seventh Amended and Restated Limited Liability Company Agreement of Orchid Island TRS, LLC, dated as of July 20, 2007, made and entered into by Opteum Inc. and Citigroup Global Markets Realty Corp., incorporated by reference to Exhibit 10.12 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2007, filed with the SEC on August 14, 2007
10.13	Asset Purchase Agreement, dated May 7, 2007, by and among Opteum Financial Services, LLC, Opteum Inc. and Prospect Mortgage Company, LLC, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated May 7, 2007, filed with the SEC on May 7, 2007
10.14	First Amendment to Purchase Agreement, dated June 30, 2007, by and among Metrocities Mortgage, LLC – Opteum Division, Opteum Financial Services, LLC and Opteum Inc., incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated June 30, 2007, filed with the SEC on July 5, 2007
10.15	Membership Interest Purchase Agreement, dated May 27, 2008, by and among Bimini Capital Management, Inc., Orchid Island TRS, LLC and Citigroup Global Markets Realty Corp., incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated May 27, 2008, filed with the SEC on May 29, 2008
10.16	Eighth Amended and Restated Limited Liability Company of Orchid Island TRS, LLC, dated as of May 27, 2008, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, dated May 27, 2008, filed with the SEC on May 29, 2008
*10.17	Amended and Restated Junior Subordinated Indenture, dated as of September 26, 2005, between the Company and JPMorgan Chase Bank, National Association, as trustee.
*10.18	Second Amended and Restated Trust Agreement, dated as of September 26, 2005, among the Company, as depositor, JPMorgan Chase Bank, National Association, as property trustee, Chase Bank USA, National Association, as Delaware trustee and the Administrative Trustees named therein.
*10.19	Indenture, dated as of October 5, 2005, between the Company and Wilmington Trust Company, as debenture trustee.
*10.20	Amended and Restated Declaration of Trust, dated as of October 5, 2005, by and among Wilmington Trust Company, as Delaware trustee, Wilmington Trust Company, as institutional trustee, the Company, as sponsor, and Jeffrey J. Zimmer, Robert E. Cauley and Amber K. Luedke, as administrators.
*31.1	Certification of the Principal Executive Officer, pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*31.2	Certification of the Principal Financial Officer, pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*32.1	Certification of the Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
*32.2	Certification of the Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	* Filed herewith. † Management compensatory plan or arrangement required to be filed by Item 601 of Regulation S-K.