BIMINI CAPITAL MANAGEMENT, INC. - Quarter Report: 2010 May (Form 10-Q)

bmnm10q03312010.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 March 31, 2010

¨ 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 has submitted electronically and posted to its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES ¨ 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 ¨ 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 May 7, 2010, the number of shares outstanding of the registrant’s Class A Common Stock, $0.001 par value, was 10,035,654; the number of shares outstanding of the registrant’s Class B Common Stock, $0.001 par value, was 31,938; and the number of shares outstanding of the registrant’s Class C Common Stock, $0.001 par value, was 31,938.

BIMINI CAPITAL MANAGEMENT, INC.

INDEX

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.	3
Consolidated Balance Sheets as of March 31, 2010 (unaudited) and December 31, 2009	3
Consolidated Statements of Operations (unaudited) for the three months ended March 31, 2010 and 2009	4
Consolidated Statement of Stockholders’ Equity (Deficit) (unaudited) for the three months ended March 31, 2010	5
Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2010 and 2009	6
Notes to Consolidated Financial Statements (unaudited)	7
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.	25
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.	36
ITEM 4T. CONTROLS AND PROCEDURES.	36

PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.	37
ITEM 1A. RISK FACTORS.	38
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	38
ITEM 6. EXHIBITS.	39

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

BIMINI CAPITAL MANAGEMENT, INC.
CONSOLIDATED BALANCE SHEETS
	(Unaudited)
	March 31, 2010			December 31, 2009
ASSETS:
Mortgage-backed securities – held for trading
Pledged to counterparty, at fair value	$	79,762,923		$	104,875,798
Unpledged, at fair value		22,396,713			14,792,697
Total mortgage-backed securities		102,159,636			119,668,495
Cash and cash equivalents		5,158,810			6,400,065
Restricted cash		950,000			2,530,000
Principal payments receivable		35,736			93,029
Accrued interest receivable		1,037,619			1,075,052
Property and equipment, net		3,957,228			3,976,546
Prepaids and other assets		1,202,641			1,266,278
Assets held for sale		12,775,070			14,331,850
Total Assets	$	127,276,740		$	149,341,315

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

LIABILITIES:
Repurchase agreements	$	76,719,432		$	100,271,206
Junior subordinated notes due to Bimini Capital Trust II		26,804,440			26,804,440
Unsettled security transactions		4,357,594			-
Accrued interest payable		105,090			131,595
Dividends payable in cash		-			1,877,944
Dividends payable in Class A common stock		-			16,862,469
Accounts payable, accrued expenses and other		1,064,808			926,678
Liabilities related to assets held for sale		7,687,183			7,621,984
Total Liabilities		116,738,547			154,496,316

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 March 31, 2010 and December 31, 2009		-			-
Class A Common Stock, $0.001 par value; 98,000,000 shares designated: 10,035,654 shares issued and outstanding as of March 31, 2010 and 2,763,779 shares issued and outstanding as of December 31, 2009		10,036			2,764
Class B Common Stock, $0.001 par value; 1,000,000 shares designated, 31,938 shares issued and outstanding as of March 31, 2010 and 31,939 shares issued and outstanding as of December 31, 2009		32			32
Class C Common Stock, $0.001 par value; 1,000,000 shares designated, 31,938 shares issued and outstanding as of March 31, 2010 and 31,939 shares issued and outstanding as of December 31, 2009		32			32
Additional paid-in capital		335,886,391			319,191,227
Accumulated deficit		(325,358,298	)		(324,349,056	)
Total Stockholders’ Equity (Deficit)		10,538,193			(5,155,001	)
Total Liabilities and Stockholders’ Equity (Deficit)	$	127,276,740		$	149,341,315
See Notes to Consolidated Financial Statements

BIMINI CAPITAL MANAGEMENT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
	Three Months Ended March 31,
	2010			2009
Interest income	$	1,898,094		$	3,674,403
Interest expense		(68,487	)		(253,952	)
Net interest income before interest on junior subordinated notes		1,829,607			3,420,451
Interest expense on junior subordinated notes		(549,981	)		(2,090,432	)
Net interest income		1,279,626			1,330,019
(Losses) gains on trading securities		(1,902,802	)		1,693,609
Net portfolio (loss) income		(623,176	)		3,023,628

Direct REIT operating expenses		147,187			153,304

General and administrative expenses:
Compensation and related benefits		418,170			320,247
Directors' fees and liability insurance		128,260			111,592
Audit, legal and other professional fees		559,468			394,262
Other administrative		142,954			122,385
Total general and administrative expenses		1,248,852			948,486

Total expenses		1,396,039			1,101,790

(Loss) income from continuing operations		(2,019,215	)		1,921,838

Discontinued operations, net of income taxes		1,009,973			235,547

Net (loss) income	$	(1,009,242	)	$	2,157,385

Basic and Diluted Net (Loss) Income Per Share of Class A Common Stock:
Continuing operations	$	(0.24	)	$	0.72
Discontinued operations		0.12			0.09
Total basic net (loss) income per Class A share	$	(0.12	)	$	0.81
Basic and Diluted Net (Loss) Income Per Share of Class B Common Stock
Continuing operations	$	(0.24	)	$	0.72
Discontinued operations		0.12			0.09
Total basic and diluted net (loss) income per Class B share	$	(0.12	)	$	0.81
Average Shares Outstanding
CLASS A COMMON STOCK - Basic		8,481,870			2,633,163
CLASS A COMMON STOCK - Diluted		8,481,870			2,640,865
CLASS B COMMON STOCK – Basic and diluted		31,938			31,939
See Notes to Consolidated Financial Statements

BIMINI CAPITAL MANAGEMENT, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)
(Unaudited)
Three Months Ended March 31, 2010

	Common Stock, Amounts at par value									Additional Paid-in Capital			Accumulated Deficit
	Class A			Class B			Class C			Additional Paid-in Capital			Accumulated Deficit				Total
Balances, January 1, 2010		$	2,764		$	32		$	32		$	319,191,227		$	(324,349,056	)		$	(5,155,001	)
Net loss			-			-			-			-			(1,009,242	)			(1,009,242	)
Dividends paid in shares of Class A Common Stock			7,241			-			-			16,647,596			-				16,654,837
Issuance of Class A common shares for board compensation and equity plan share exercises, net			31			-			-			39,488			-				39,519
Amortization of equity plan compensation			-			-			-			8,080			-				8,080
Balances, March 31, 2010		$	10,036		$	32		$	32		$	335,886,391		$	(325,358,298	)		$	10,538,193
See Notes to Consolidated Financial Statements

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

	Three Months Ended March 31,
	2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(1,009,242	)	$	2,157,385
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Net income from discontinued operations		(1,009,973	)		(235,547	)
Stock compensation, and equity plan amortization		47,599			40,663
Depreciation and amortization		61,552			182,088
Losses (gains) on trading securities		1,902,802			(1,693,609	)
Changes in operating assets and liabilities:
Accrued interest receivable		37,433			203,935
Prepaids and other assets		24,392			(813	)
Accrued interest payable		(26,522	)		(185,043	)
Accounts payable, accrued expenses and other		(69,503	)		(201,959	)
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES		(41,462	)		267,100
CASH FLOWS FROM INVESTING ACTIVITIES:
From mortgage-backed securities investments:
Purchases		(44,610,199	)		(30,106,576	)
Sales		57,784,680			105,476,558
Principal repayments		6,846,463			7,175,739
Decrease in restricted cash		1,580,000			-
Purchases of property and equipment, and other		(2,989	)		(9,205	)
NET CASH PROVIDED BY INVESTING ACTIVITIES		21,597,955			82,536,516
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from repurchase agreements		120,839,955			926,057,181
Principal payments on repurchase agreements		(144,391,729	)		(1,000,016,476	)
Dividends paid in cash		(1,877,927	)		-
NET CASH USED IN FINANCING ACTIVITIES		(25,429,701	)		(73,959,295	)
CASH FLOWS FROM DISCONTINUED OPERATIONS:
Net cash provided by operating activities		2,631,953			5,600,146
NET CASH PROVIDED BY DISCONTINUED OPERATIONS		2,631,953			5,600,146

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(1,241,255	)		14,444,467
CASH AND CASH EQUIVALENTS, beginning of the period		6,400,065			7,668,581
CASH AND CASH EQUIVALENTS, end of the period	$	5,158,810		$	22,113,048

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	605,747	$	2,529,427
Income taxes	$	130,000	$	-

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Securities acquisitions settled in later period	$	4,357,594	$	-
Dividends paid in shares of Class A Common Stock	$	16,861,973	$	-

See Notes to Consolidated Financial Statements

BIMINI CAPITAL MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

March 31, 2010

NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Bimini Capital Management, Inc., a Maryland corporation (“Bimini Capital”), was originally formed in September 2003 for the purpose of creating and managing a leveraged investment portfolio consisting of residential mortgage-backed securities (“MBS”).

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. In addition, a REIT must meet other provisions of the Code to retain its special tax status. Bimini Capital operates in a single business segment.

Bimini Capital’s website is located at http://www.biminicapital.com.

Liquidity

The financing market utilized by the Company to fund its MBS portfolio, as well as the market for MBS securities, have stabilized after undergoing unprecedented turmoil in 2008 and early 2009. However, conditions in the market, while stable, are far from the condition that existed prior to the crisis. The Company has taken significant steps to reduce the leverage in its balance sheet and reduce its debt service costs, and it was able to generate earnings over the course of 2009. The Company has also expanded its access to repurchase agreement funding. However, market conditions are still constrained, especially in light of the significant actions of the Federal Government with respect to their explicit support of the Government Sponsored Entities (“GSE’s”) and the actions of the Federal Reserve with their direct involvement in the agency MBS securities market – the primary market in which the Company invests. Accordingly, the Company has expanded on the steps taken in 2008 to augment its existing leveraged MBS portfolio with its alternative investment strategy. The Company’s alternative investment strategy that utilizes derivative MBS has been elevated to a core element of its investment strategy and liquidity management. However, the Company’s ability to utilize this element of our investment strategy is limited because such investments do not satisfy the asset criteria to meet REIT qualifications. Further, 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.

Basis of Presentation and Use of Estimates

The accompanying consolidated financial statements are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of financial statements in conformity with GAAP 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. Actual results could differ from those estimates. Significant estimates affecting the accompanying financial statements include the fair values of MBS, the prepayment speeds used to calculate amortization and accretion of premiums and discounts on MBS, and certain discontinued operations related items including asset valuation allowances and fair values of retained interests.

Discontinued Operations

On November 3, 2005, Bimini Capital acquired Opteum Financial Services, LLC. Upon closing of the transaction, Opteum 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 (“OITRS”) effective July 3, 2007. Hereinafter, any historical mention, discussion or references to Opteum Financial Services, LLC or to OFS now means OITRS.

During the second quarter of 2007, the Company closed OITRS’ wholesale and conduit mortgage loan origination channels and, during the second and third quarters of 2007, sold substantially all of the operating assets of OITRS. Therefore, all of OITRS’s assets were considered as held for sale, and OITRS was then reported as a discontinued operation for all periods presented following applicable accounting standards. At March 31, 2010, the remaining assets and liabilities are considered to be contingent and continue to be recorded by OITRS pursuant to the terms of the disposal of the operations, with the exception of retained interests, the disposal of which has been delayed as a result of the turmoil in the financial markets and a significant lack of investor interest in such securities. However, while the market for such retained interests is temporarily inactive as a result of continued deterioration in the underlying collateral, the Company has made every effort to market such securities to known market participants who have been active in the past. Accordingly, all current and prior financial information related to OITRS and the mortgage banking business is presented as discontinued operations in the accompanying consolidated financial statements. Refer to Note 11 - Discontinued Operations.

Terminology

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).

Consolidation

The accompanying consolidated financial statements include the accounts of Bimini Capital and its wholly-owned subsidiary, OITRS, as well as the wholly-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 historically had a common share investment in a trust used in connection with the issuance of Bimini Capital’s junior subordinated notes. Pursuant to the applicable accounting guidance for variable interest entities, Bimini Capital’s common share investment in the trust has not been consolidated in the financial statements of Bimini Capital, and accordingly, this investment has been accounted for on the equity method.

Statement of Comprehensive Income (Loss)

In accordance with FASB ASC 220, Comprehensive Income, a statement of comprehensive income has not been included as the Company has no items of other comprehensive income. Comprehensive income (loss) is the same as net income (loss) for all periods presented.

Cash and Cash Equivalents

Cash and cash equivalents include cash on deposit with financial institutions and highly liquid investments with original maturities of three months or less. Restricted cash represents cash held on deposit as collateral with the repurchase agreement counterparty. Such amount may be used to make principal and interest payments on the related repurchase agreements.

The Company and its subsidiaries maintain cash balances at two banks. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $250,000. At March 31, 2010, uninsured deposits were approximately $4.7 million.

Mortgage-Backed Securities

The Company invests primarily in mortgage pass-through certificates, collateralized mortgage obligations, and interest only securities or inverse interest only securities representing interest in or obligations backed by pools of mortgage loans (collectively, MBS). MBS transactions are recorded on the trade date.

In accordance with FASB ASC 320, Investments - Debt and Equity Securities, the Company classifies its investments in MBS into one of three categories: trading, available-for-sale or held-to-maturity. All MBS securities held by Bimini Capital are reflected in the Company's financial statements at their estimated fair value.

The fair value of the Company’s investments in MBS is governed by FASB ASC 820, Fair Value Measurements and Disclosures. The definition of fair value in FASB ASC 820 focuses on the price that would be received to sell the asset or paid to transfer the liability in an orderly transaction between market participants at the measurement date. The fair value measurement assumes that the transaction to sell the asset or transfer the liability either occurs in the principal market for the asset or liability, or in the absence of a principal market, occurs in the most advantageous market for the asset or liability. Estimated fair values for MBS are based on the average of third-party broker quotes received and/or independent pricing sources when available.

Income on MBS pass-through securities is based on the stated interest rate of the security. Premiums or discounts present at the date of purchase are not amortized. For interest only securities, the income is accrued based on the carrying value and the effective yield. Cash received 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 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. Changes in fair value of MBS during the period are recorded in earnings and reported as (losses) gains on trading securities in the accompanying consolidated statements of operations.

Financial Instruments

FASB ASC 825, Financial Instruments, requires disclosure of the fair value of financial instruments for which it is practicable to estimate that value, either in the body of the financial statements or in the accompanying notes. MBS are accounted for at fair value in the consolidated balance sheets. The methods and assumptions used to estimate fair value for these instruments are presented in Note 10 of the financial statements.

The estimated fair value of cash and cash equivalents, restricted cash, principal payments receivable, accrued interest receivable, repurchase agreements, accrued interest payable and accounts payable and other liabilities generally approximates their carrying value as of March 31, 2010 and December 31, 2009, due to the short-term nature of these financial instruments.

It is impracticable to estimate the fair value of the Company’s junior subordinated notes. Currently, there is a limited market for these types of instruments and it is unclear what interest rates would be available to the Company for similar financial instruments. Information regarding carrying amounts, effective interest rates and maturity dates for these instruments is presented in the Note 5 to the financial statements.

Property and Equipment, net

Property and equipment, net, consists of computer equipment with a depreciable life of 3 years, office furniture and equipment with depreciable lives of 8 to 20 years, land which has no depreciable life, and buildings and improvements with depreciable lives of 30 years. Property and equipment 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 March 31, 2010 and December 31, 2009, is presented net of accumulated depreciation of approximately $627,000 and $604,000, respectively. Depreciation expense was approximately $22,000 and $25,000 for the three months ended March 31, 2010 and 2009, respectively.

Repurchase Agreements

The Company finances the acquisition of the majority of its MBS through the use of repurchase agreements. Repurchase agreements are treated as collateralized financing transactions and are carried at their contractual amounts, including accrued interest, as specified in the respective agreements. Although structured as a sale and repurchase obligation, a repurchase agreement operates as a financing under which securities are pledged as collateral to secure a short-term loan equal in value to a specified percentage (generally between 93 and 95 percent) of the market value of the pledged collateral. While used as collateral, the borrower retains beneficial ownership of the pledged collateral, including the right to distributions. At the maturity of a repurchase agreement, the borrower is required to repay the loan and concurrently receive the pledged collateral from the lender or, with the consent of the lender, renew such agreement at the then prevailing financing rate. Margin calls, whereby a lender requires that the Company pledge additional securities or cash as collateral to secure borrowings under its repurchase agreements with such a lender, are routinely experienced by the Company when the value of the MBS pledged as collateral declines or as a result of principal amortization or due to changes in market interest rates, spreads or other market conditions.

The Company’s repurchase agreements typically have terms ranging from one month to six months at inception, with some having longer terms. 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 the obligation. If, during the term of a repurchase agreement, a lender should file for bankruptcy, the Company might experience difficulty recovering its pledged assets which could result in an unsecured claim against the lender for the difference between the amount loaned to the Company plus interest due to the counterparty and the fair value of the collateral pledged to such lender. At March 31, 2010, the Company had outstanding balances under repurchase agreements with one lender with a maximum amount at risk (the difference between the amount loaned to the Company, including interest payable, and the fair value of securities pledged by the Company as collateral, including accrued interest on such securities, of $2.8 million; see Note 4.

Share-Based Compensation

The Company follows the provisions of FASB ASC 718, Compensation – Stock Compensation, to account for stock and stock-based awards. For stock and stock-based awards issued to employees, a compensation charge is recorded against earnings over the vesting period based on the fair value of the award. Payments pursuant to dividend equivalent rights, which are granted along with certain equity based awards, are charged to stockholders’ equity when declared. The Company applies a zero forfeiture rate for its equity based awards, as such awards have been granted to a limited number of employees and historical forfeitures have been minimal. Forfeitures, or an indication that forfeitures may occur, would result in a revised forfeiture rate and are accounted for prospectively as a change in an estimate. 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.

Reverse Stock Split

On March 12, 2010, the Company executed a one-for-ten reverse stock split of its Class A, Class B and Class C common stock. Prior to effecting the reverse split, at December 31, 2009 the Company had 27,637,789 shares of Class A common stock outstanding and 319,388 shares each of its Class B and Class C common stock outstanding. Further, in connection with the dividend paid on January 19, 2010, the Company issued an additional 72,414,462 shares of Class A common stock which brought the total shares outstanding of Class A common stock to 100,052,251 at January 19, 2010. Upon consummation of the reverse split, as of March 12, 2010 issued and outstanding shares of Class A, Class B and Class C common stock were 10,052,225, 31,938 and 31,938, respectively. All references in the accompanying financial statements to the number of common shares and per-share amounts for all periods have been restated to reflect the reverse stock split.

Earnings Per Share

The Company follows the provisions of FASB ASC 260, 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.

Outstanding 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, as and when authorized and declared by the Board of Directors. Accordingly, shares of the Class B Common Stock are included in the computation of basic EPS using the two-class method and, consequently, are presented separately from Class A Common Stock.

The shares of Class C Common Stock are not included in the basic EPS computation as these shares do not have participation rights. The outstanding shares of Class B and Class C Common Stock are not included in the computation of diluted EPS for the Class A Common Stock as the conditions for conversion into shares of Class A Common Stock were not met.

All basic and diluted weighted average share and per-share amounts in these financial statements have been adjusted for all periods presented to reflect the March 12, 2010 reverse stock split.

Income Taxes

Bimini Capital has elected to be taxed as a REIT under the Code. 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. At March 31, 2010, management believes that the Company has complied with Code requirements and Bimini Capital continues to qualify as a REIT. As further described in Note 11, Discontinued Operations, OITRS is a taxpaying entity for income tax purposes and is taxed separately from Bimini Capital. The Company files federal and state tax returns for both the REIT and the taxable REIT subsidiary. Generally, returns for all periods after 2005 remain open for examination.

Recent Accounting Pronouncements

In February 2010, the FASB issued Accounting Standards Update (“ASU”) No. 2010-09, Amendments to Certain Recognition and Disclosure Requirements, (“ASU 2010-09”) which amends ASC 855, Subsequent Events, to address certain implementation issues related to an entity’s requirement to perform and disclose subsequent-events procedures. ASU 2010-09 requires SEC filers to evaluate subsequent events through the date the financial statements are issued and exempts SEC filers from disclosing the date through which subsequent events have been evaluated. The ASU was effective immediately upon issuance. The implementation of this new accounting guidance did not have a material impact on the Company’s financial statements.

In January 2010, the FASB issued ASU No. 2010-06, Improving Disclosures about Fair Value Measurements, which requires additional disclosures related to the transfers in and out of the fair value hierarchy and the activity of Level 3 financial instruments. This ASU also provides clarification for the classification of financial instruments and the discussion of inputs and valuation techniques. The new disclosures and clarification are effective for interim and annual reporting periods after December 15, 2009, except for the disclosures related to the activity of Level 3 financial instruments. Those disclosures are effective for periods beginning after December 15, 2010 and for interim periods within those years. The implementation of this new accounting guidance did not have any impact on the Company’s financial statements.

In January 2010, the FASB issued ASU No. 2010-01, Accounting for Distributions to Shareholders with Components of Stock and Cash, a Consensus of the FASB Emerging Issues Task Force. The purpose of this ASU was to eliminate diversity in practice by requiring classification of the stock portion of a dividend payment as a share issuance if there is a limit on the cash portion of the dividend payment. The Company applied this new accounting guidance as of December 31, 2009 for its dividend declared in November 2009 and paid in January 2010.

In June 2009, the FASB issued Statement of Financial Accounting No. 167 (“FAS 167), Amendments to FASB Interpretation No. 46(R), Consolidation of Variable Interest Entities, which was subsequently incorporated into ASC 810, Consolidation. FAS 167 changes how a company determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. The determination of whether a company is required to consolidate an entity is based on, among other things, an entity’s purpose and design and a company’s ability to direct the activities of the entity that most significantly impact the entity’s economic performance. FAS 167 is effective for periods beginning after November 15, 2009. The implementation of this new accounting guidance did not have any impact on the Company’s financial statements.

In June 2009, the FASB issued Statement of Financial Accounting No. 166 (“FAS 166”), Accounting for Transfers of Financial Assets, which was subsequently incorporated into ASC 860, Transfers and Servicing, FAS 166 is a revision of FAS 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, and will require disclosure of more information about transfers of financial assets, including securitization transactions, and where companies have continuing exposure to the risks related to transferred financial assets. FAS 166 also eliminates the concept of a “qualifying special-purpose entity,” changes the requirements for derecognizing financial assets and requires additional disclosures. FAS 166 is effective for periods beginning after November 15, 2009. Earlier application was prohibited. The Company adopted FAS 166 on January 1, 2010. The implementation of this new accounting guidance did not have any impact on the Company’s financial statements.

NOTE 2. MORTGAGE-BACKED SECURITIES

The following are the carrying values of the Company’s MBS:

(in thousands)

	March 31, 2010		December 31, 2009
Pass-Through Certificates:
Hybrid Arms	$	36,272	$	67,036
Adjustable-rate Mortgages		13,865		32,598
Fixed-rate Mortgages		33,973		5,242
Total Pass-Through Certificates		84,110		104,876
Mortgage Derivative Certificates:
MBS Derivatives		18,050		14,793
Totals	$	102,160	$	119,669

As of March 31, 2010, investments with a carrying value of approximately $336,000 have contractual maturities less than 24 months. All of the remainder of Bimini Capital's MBS investments have contractual maturities greater than 24 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

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 FASB ASC 260, 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 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 three months ended March 31, 2010 and 2009. For the three months ended March 31, 2009, a weighted average of 531 of these unvested incentive plan shares are included in the basic and diluted per share computations, as they have dividend participation rights. The stock incentive plan shares have no contractual obligation to share in losses. Since there is no such obligation, the incentive plan shares are not included in the three months ended March 31, 2010 basic and diluted EPS computations, even though they are participating securities.

The Company has also issued stock incentive plan shares that are not dividend eligible. At March 31, 2009, 6,709 of such plan shares were outstanding and are included in the diluted per share computations. There were none of these shares outstanding during the three months ended March 31, 2010.

As discussed in Note 6, on November 9, 2009, the Company’s Board of Directors declared a special dividend giving stockholders the option to make an election to receive payment of the dividend in cash or in shares of its Class A Common Stock, subject to an aggregate cash limitation. These shares were not included in the calculation of basic earnings per share until January 19, 2010 because they were not yet issued. They were not included in the diluted per share calculation prior to issuance because their inclusion prior to this date would have been anti-dilutive.

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

(in thousands, except per-share information)

	Three Months Ended March31,
	2010			2009
Basic and diluted EPS per Class A common share:
Income (loss) available to Class A common shares:
Continuing operations	$	(2,012	)	$	1,899
Discontinued operations		1,006			233
	$	(1,006	)	$	2,132
Weighted average common shares:
Class A common shares outstanding at the balance sheet date		10,036			2,695
Unvested dividend-eligible stock incentive plan shares outstanding at the balance sheet date		-			1
Effect of weighting		(1,554	)		(63	)
Weighted average shares-basic		8,482			2,633
Effect of dilutive stock incentive plan shares		-			8
Weighted average shares-diluted		8,482			2,641

Earnings (loss) per Class A common share – basic and diluted:
Continuing operations	$	(0.24	)	$	0.72
Discontinued operations		0.12			0.09
	$	(0.12	)	$	0.81

	Three Months Ended March31,
	2010			2009
Basic and diluted EPS per Class B common share:
Income (loss) available to Class B common shares:
Continuing operations	$	(7	)	$	23
Discontinued operations		4			2
	$	(3	)	$	25
Weighted average common shares:
Class B common shares outstanding at the balance sheet date		32			32
Effect of weighting		-			-
Weighted average shares- basic and diluted		32			32

Earnings (loss) per Class B common share – basic and diluted:
Continuing operations	$	(0.24	)	$	0.72
Discontinued operations		0.12			0.09
	$	(0.12	)	$	0.81

NOTE 4. REPURCHASE AGREEMENTS

As of March 31, 2010, Bimini Capital had outstanding repurchase obligations of approximately $76.7 million with a net weighted average borrowing rate of 0.26%. These agreements were collateralized by MBS with a fair value, including accrued interest, of approximately $80.0 million. As of December 31, 2009, Bimini Capital had outstanding repurchase obligations of approximately $100.3 million with a net weighted average borrowing rate of 0.30%. These agreements were collateralized by MBS with a fair value of approximately $105.2 million.

As of March 31, 2010 and December 31, 2009, Bimini Capital's repurchase agreements 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
March 31, 2010
Agency-Backed Mortgage--Backed Securities:
Fair market value of securities sold, including accrued interest receivable	$	-	$	18,643		$	61,389		$	-	$	80,032
Repurchase agreement liabilities associated with these securities	$	-	$	18,622		$	58,097		$	-	$	76,719
Net weighted average borrowing rate		-		0.27	%		0.26	%		-		0.26	%
December 31, 2009
Agency-Backed Mortgage--Backed Securities:
Fair market value of securities sold, including accrued interest receivable	$	-	$	67,599		$	37,644		$	-	$	105,243
Repurchase agreement liabilities associated with these securities	$	-	$	65,120		$	35,151		$	-	$	100,271
Net weighted average borrowing rate		-		0.31	%		0.29	%		-		0.30	%

Summary information regarding the Company’s amounts at risk with individual counterparties greater than 10% of the Company’s equity at March 31, 2010 and December 31, 2009 is as follows:

(in thousands)

Repurchase Agreement Counterparties	Amount at Risk(1)		Weighted Average Maturity of Repurchase Agreements in Days
March 31, 2010
MF Global, Inc.	$	2,758		59
December 31, 2009
MF Global, Inc.	$	4,929		38

(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

As of March 31, 2010 and December 31, 2009, Bimini Capital sponsored one statutory trust, known as Bimini Capital Trust II (“BCTII”) of which 100% of the common equity is owned by the Bimini Capital, 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 Bimini Capital. The debt securities held the trust are the sole assets of that trust.

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. Bimini Capital's BCTII Junior Subordinated Notes are subordinate and junior in right of payment of all present and future senior indebtedness. As of March 31, 2010 and December 31, 2009, the outstanding principal balance on the junior subordinated debt securities owed to BCTII is $26.8 million.

The trust is a variable interest entity pursuant to FASB ASC 810 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 the 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. Since Bimini Capital's common share investments in 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 BCTII into its financial statements. The accompanying consolidated financial statements present Bimini Capital's BCTII Junior Subordinated Notes issued to the trust as a liability and Bimini Capital's investment in the common equity securities of BCTII as an asset. For financial statement purposes, Bimini Capital records payments of interest on the Junior Subordinated Notes issued to BCTII as interest expense.

NOTE 6. CAPITAL STOCK

Reverse Stock Split

On March 12, 2010, the Company executed a one-for-ten reverse stock split Class A, Class B and Class C common stock. All references in the accompanying financial statements to the number of common shares and per-share amounts for all periods presented have been adjusted to reflect the reverse stock split.

Issuances of Common Stock

During the three months ended March 31, 2010, the Company issued a total of 30,874 shares of its Class A Common Stock to its independent directors for the payment of director fees.

On January 19, 2010, the Company issued 7,241,446 shares of its Class A common stock in connection with a special dividend described more fully below.

There were no issuances of the Company's Class B Common Stock and Class C Common Stock.

Dividends

On November 9, 2009, the Company’s Board of Directors declared a $6.50 per share special dividend to the holders of its dividend eligible securities on the record date of December 9, 2009. Subject to an aggregate cash limitation of approximately $1.9 million, stockholders had the option to make an election to receive payment of the dividend in cash or in shares of its Class A Common Stock. Stockholders that elected to receive the dividend entirely in shares received approximately 2.8 shares for each share held. Stockholders that elected to receive at least a portion of the dividend in cash received approximately $0.69 in cash and 2.5 shares for each share held. The distribution totaling approximately $1.9 million in cash and 7,241,446 in shares was paid on January 19, 2009.

A liability of $18.7 million was recorded as of December 31, 2009 related to the special dividend mentioned above. This liability consisted of both the cash portion of the dividend declared and the fair value of the shares of stock to be issued. The liability was settled in January 2010 for $1.9 million in cash and an increase in stockholders’ equity of $16.8 million, representing the fair value of the shares issued.

On April 1, 2010, the Company's Board of Directors declared a $0.03 per share cash dividend to the holders of its dividend eligible securities on the record date of April 15, 2010. The distribution totaling approximately $314,000 was paid on April 30, 2010.

NOTE 7. STOCK INCENTIVE PLANS

On December 18, 2003, Bimini Capital adopted the 2003 Long Term Incentive Compensation Plan (the “2003 Plan”) to provide Bimini 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 400,000 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 1, 2014. The Company recognizes compensation expense over the vesting period. Compensation expense recognized for phantom shares during the three months ended March 31, 2010 and 2009 was approximately, $8,000 and $12,000, respectively. Dividends paid on unsettled awards are charged to retained earnings when declared.

A summary of phantom share activity during the three month periods ended March 31, 2010 and 2009 is presented below:

	Three Months Ended March 31,
	2010				2009
	Shares		Weighted-Average Grant-Date Fair Value		Shares			Weighted-Average Grant-Date Fair Value
Nonvested, at January 1		102,000	$	1.58		13,237		$	5.79
Granted		-		-		-			-
Vested		-		-		(958	)		2.60
Forfeited		-		-		(5,040	)		3.24
Nonvested, at March 31		102,000	$	1.58		7,239		$	7.99

As of March 31, 2010, there was approximately $137,000 of unrecognized compensation cost related to nonvested phantom share awards. This cost is expected to be recognized over a remaining weighted-average period of 50.9 months. All of the remaining unvested awards at March 31, 2010 were granted dividend participation rights.

On April 1, 2010, the Board of Directors granted 302,000 of phantom shares with a grant date fair value of $0.97 and vesting periods of one to five years.

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 and no shares of the Company’s stock have been issued under the Performance Bonus Plan. The Performance Bonus Plan was terminated by the Board of Directors on April 1, 2010.

NOTE 8. COMMITMENTS AND CONTINGENCIES

Outstanding Litigation

The Company is involved in various lawsuits and claims, both actual and potential, including some that it has asserted against others, in which monetary and other damages are sought. These lawsuits and claims relate primarily to contractual disputes arising out of the ordinary course of the Company’s business. The outcome of such lawsuits and claims is inherently unpredictable. However, management believes that, in the aggregate, the outcome of all lawsuits and claims involving the Company will not have a material effect on the Company’s consolidated financial position or liquidity; however, any such outcome may be material to the results of operations of any particular period in which costs, if any, are recognized.

On September 17, 2007, a complaint was filed in the U.S. District Court for the Southern District of Florida by William Kornfeld against Bimini Capital, certain of its 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 its 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. The cases have been consolidated, class certification has been granted, and lead plaintiffs’ counsel has been appointed. The Company filed a motion to dismiss the case on December 22, 2008, and plaintiffs have filed a response in opposition. On September 30, 2009, the court granted a partial motion to dismiss and gave plaintiffs until October 12, 2009 to file an amended complaint. The partial dismissal released defendants Flagstone Securities, LLC, BB&T Capital Markets, Bimini Capital’s former outside directors and certain officers, as well as certain charges contained in the original complaint. Plaintiffs filed an amended complaint on October 12, 2009 and on October 23, 2009 Bimini Capital filed an answer and affirmative defenses to the amended complaint. At a mediation held on February 12, 2010, the parties reached a tentative settlement of this matter for $2.35 million. As of December 31, 2009, the Company had accrued approximately $0.5 million related to the settlement. This amount represented the remainder of the $1.0 million retention that the Company was required to pay under the terms of its Directors and Officers insurance policy. As of April 30, 2010, approximately $0.4 million of the accrual remains. The remainder of the settlement and legal fees and costs associated with finalizing the settlement in excess of the $0.4 million accrual will be paid by the insurance carrier. The settlement is contingent upon the parties' executing a written stipulation of settlement, presenting the settlement to the Court for preliminary approval, providing notice to the Class and an opportunity to opt out of the settlement, and receiving final approval from the Court at a final fairness hearing. This process is expected to be completed during the current year. Bimini Capital made no admission of liability in connection with the settlement. If the settlement is not finalized, the class action would continue. While Bimini Capital expects that this settlement will be finalized and approved by the Court, there is no guarantee that the settlement will be finalized. The failure to finalize the settlement could have a material adverse impact on the Bimini Capital.

A complaint was filed on December 23, 2009 in the Southern District of New York against Bimini Capital, the Bank of New York Mellon ("BNYM"), and Hexagon Securities, LLC ("Hexagon"). It alleges that plaintiff, a note-holder in Preferred Term Securities XX ("PreTSL XX"), suffered losses as a result of Bimini Capital’s repurchase of all outstanding fixed/floating rate capital securities of Bimini Capital Trust II for less than par value from PreTSL XX in December 2009. Plaintiff alleged breach of the indenture and breach of fiduciary duties by BNYM, and tortuous interference with contract and aiding and abetting breach of fiduciary duty by Bimini Capital and Hexagon. Plaintiff also purported to allege derivative claims brought on behalf of Nominal Defendant PreTSL XX. On February 22, 2010, plaintiff filed an amended complaint, adding derivative claims on behalf of BNYM as trustee, in addition to the prior derivative claims asserted on behalf of PreTSL XX. Plaintiff has also added a claim for "unjust enrichment" against Bimini Capital and Hexagon. On March 26, 2010, all Defendants moved to dismiss each count of Plaintiff's amended complaint. Bimini Capital denies that the repurchase was improper and intends to defend the suit vigorously.

NOTE 9. INCOME TAXES

REIT taxable income (loss), as generated by Bimini Capital’s qualifying REIT activities, is computed in accordance with the Code, which is different from the Company’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 the Company’s REIT taxable income (loss) and the Company’s financial statement net income (loss) can be substantial and each item can affect several years. Bimini Capital’s REIT taxable loss for the three-months ended March 31, 2010 is estimated to be $0.5 million. During the three months ended March 31, 2010, a GAAP financial statement loss on MBS sales of approximately $13,000 was realized; for tax purposes, realized capital gains for this period was approximately $0.05 million. Since there are tax capital losses available to offset the tax capital gains, the tax gains did not increase REIT taxable income for the period ended March 31, 2010.

During the three months ended March 31, 2010, fair value adjustments on the MBS portfolio of approximately $(1.9) million were recorded on the GAAP financial statements; for tax purposes, these fair value adjustments will not be taken into account until the underlying security is sold. Other differences between GAAP financial statement results and REIT taxable income (loss) include the results of the discontinued operations (which does not impact REIT taxable income), the different tax and book accounting methods used for calculating interest income, and depreciation and amortization.

As of March 31, 2010, the Bimini Capital has approximately $56.8 million of remaining capital loss carryforwards available to offset future capital gains. As of March 31, 2010, Bimini Capital has a REIT tax net operating loss carryforward of approximately $1.2 million that is immediately available to offset future REIT taxable income. The capital loss carryforwards begin to expire in 2012, and the net operating loss carryforwards begin to expire in 2028.

Bimini Capital’s REIT taxable loss for the three months ended March 31, 2009 was estimated to be $1.4 million. During the three months ended March 31, 2009, GAAP financial statement gains of approximately $1.1 million on MBS on the sale of MBS were realized; for tax purposes, the realized gains were approximately $2.7 million. Since there are tax capital losses available to offset these gains, the tax gains did not increase REIT taxable income for the period ended March 31, 2009.

NOTE 10. FAIR VALUE

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.

All of the fair value adjustments included in the results 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 values as of March 31, 2010 and December 31, 2009 are determined as follows:

(in thousands)

	March 31, 2010		December 31, 2009
Quoted Prices in Active Markets for Identical Assets (Level 1)	$	-	$	-
Significant Other Observable Inputs (Level 2)		102,160		119,668
Significant Unobservable Inputs (Level 3)		-		-
Total Fair Value Measurements	$	102,160	$	119,668

NOTE 11. DISCONTINUED OPERATIONS

OITRS

The results of the discontinued operations of OITRS included in the accompanying consolidated statements of operations for the three months ended March 31, 2010 and 2009 were as follows:

(in thousands)

	Three Months Ended March 31,
	2010			2009
Net interest income (expense)	$	(7	)	$	63
Gain on discontinued mortgage banking activities:
Fair value adjustment on retained interests		1,384			1,274
Other discontinued mortgage banking activities		(15	)		491
Other income, net of non-recurring items		99			75
Net servicing loss		(2	)		(204	)
Other interest expense and loss reserves		(47	)		(468	)
Revenues, net		1,412			1,231
General and administrative expenses		(402	)		(995	)
Total income from discontinued operations, net of taxes	$	1,010		$	236

The assets and liabilities of OITRS included in the consolidated balance sheets as of March 31, 2010 and December 31, 2009 were as follows:

(in thousands)

	March 31, 2010		December 31, 2009
Assets
Cash and cash equivalents	$	42	$	70
Mortgage loans held for sale (a)		205		207
Retained interests, trading (b)		5,591		5,934
Receivables (c)		4,893		6,046
Prepaids and other assets		2,044		2,075
Assets held for sale	$	12,775	$	14,332
Liabilities
Accounts payable, accrued expenses and other (d and e)		7,687		7,622
Liabilities related to assets held for sale	$	7,687	$	7,622

(a) - Mortgage Loans Held for Sale

Mortgage loans held for sale consist of the following as of March 31, 2010 and December 31, 2009:

	March 31, 2010			December 31, 2009
Mortgage loans held for sale,	$	2,149		$	2,149
Valuation allowance		(1,944	)		(1,942	)
Total	$	205		$	207

Series	Issue Date	March 31, 2010		December 31, 2009
HMAC 2004-1	March 4, 2004	$	991	$	757
HMAC 2004-2	May 10, 2004		1,237		1,340
HMAC 2004-3	June 30, 2004		1,297		1,541
HMAC 2004-4	August 16, 2004		963		1,280
HMAC 2004-5	September 28, 2004		771		1,016
HMAC 2004-6	November 17, 2004		332		-
OMAC 2005-1	January 31, 2005		-		-
OMAC 2005-2	April 5, 2005		-		-
OMAC 2005-3	June 17, 2005		-		-
OMAC 2005-4	August 25, 2005		-		-
OMAC 2005-5	November 23, 2005		-		-
OMAC 2006-1	March 23, 2006		-		-
OMAC 2006-2	June 26, 2006		-		-
Total		$	5,591	$	5,934

	March 31, 2010			December 31, 2009
Balance sheet carrying value of retained interests – fair value	$	5,591		$	5,934
Weighted average life (in years)		9.27			0.22
Prepayment assumption (annual rate)		16.58	%		12.65	%
Impact on fair value of 10% adverse change	$	(193	)	$	(37	)
Impact on fair value of 20% adverse change	$	(104	)	$	(51	)
Expected credit losses (% of original unpaid principal balance)		9.57	%		9.08	%
Impact on fair value of 10% adverse change	$	(431	)	$	(242	)
Impact on fair value of 20% adverse change	$	(903	)	$	(439	)
Residual cash-flow discount rate		27.50	%		27.50	%
Impact on fair value of 10% adverse change	$	(128	)	$	(42	)
Impact on fair value of 20% adverse change	$	(236	)	$	(83	)
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	$	(371	)	$	(113	)
Impact on fair value of 20% adverse change	$	(507	)	$	(214	)

Series	Issue Date	Original Unpaid Principal Balance	As of March 31, 2010
Series	Issue Date	Original Unpaid Principal Balance	Actual Losses	Projected Future Credit Losses	Projected Total Credit Losses
HMAC 2004-1	March 4, 2004	$ 309,710	0.91%	0.88%	1.79%
HMAC 2004-2	May 10, 2004	388,737	1.32%	1.63%	2.95%
HMAC 2004-3	June 30, 2004	417,055	1.33%	1.26%	2.59%
HMAC 2004-4	August 16, 2004	410,123	1.15%	1.09%	2.24%
HMAC 2004-5	September 28, 2004	413,875	1.66%	1.97%	3.62%
HMAC 2004-6	November 17, 2004	761,027	2.26%	1.98%	4.24%
OMAC 2005-1	January 31, 2005	802,625	2.97%	2.43%	5.40%
OMAC 2005-2	April 5, 2005	883,987	3.16%	2.86%	6.02%
OMAC 2005-3	June 17, 2005	937,117	3.87%	4.00%	7.87%
OMAC 2005-4	August 25, 2005	1,321,739	5.60%	5.50%	11.10%
OMAC 2005-5	November 23, 2005	986,277	7.71%	6.76%	14.47%
OMAC 2006-1	March 23, 2006	934,441	8.95%	8.91%	17.86%
OMAC 2006-2	June 26, 2006	491,572	16.54%	15.26%	31.80%
Total		$9,058,285	4.92%	4.66%	9.57%

As of Date	Total Principal Amount of Loans		Principal Amount of Loans 60 Days or more delinquent		Net Credit Losses
March 31, 2010	$	3,129,902	$	746,748	$	445,266
December 31, 2009		3,250,632		797,883		400,920

	March 31, 2010		December 31, 2009
Servicing advances, net of allowance for doubtful accounts of $256,000	$	3,561	$	4,957
Servicing sales		936		936
Others		396		153
	$	4,893	$	6,046

			Fair Value Measurements at March 31, 2010, Using
	Fair Value Measurements		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	$	205	$	-	$	-	$	205
Retained interests, trading		5,591		-		-		5,591

	Mortgage Loans Held for Sale			Retained Interests, Trading
Beginning balance	$	207		$	5,934
Gain (loss) included in earnings		(16	)		1,384
Collections, losses and settlements		14			(1,727	)
Ending Balance	$	205		$	5,591

Asset Category		Fair 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
March 31, 2010
Adjustable-Rate MBS	$	13,865	13.6%	2.57%	203	1-Jan-32	2.12	11.66%	27.38%
Fixed-Rate MBS		33,973	33.3%	5.21%	198	1-Oct-37	n/a	n/a	n/a
Hybrid Adjustable-Rate MBS		36,272	35.4%	3.85%	355	1-Dec-39	55.03	8.85%	2.00%
Total Mortgage-backed Pass-through		84,110	82.3%	4.19%	263	1-Dec-39	40.40	9.63%	6.86%
Derivative MBS		18,050	17.7%	5.65%	247	15-Aug-38	n/a	n/a	n/a
Total Mortgage Assets	$	102,160	100.0%	4.45%	263	1-Dec-39	40.40	n/a	6.86%
December 31, 2009
Adjustable-Rate MBS	$	32,598	27.2%	3.75%	261	1-Oct-35	4.87	11.16%	10.34%
Fixed-Rate MBS		5,242	4.4%	6.50%	333	1-Oct-37	n/a	n/a	n/a
Hybrid Adjustable-Rate MBS		67,036	56.0%	4.45%	338	1-Dec-39	40.27	9.45%	2.00%
Total Mortgage-backed Pass-through		104,876	87.6%	4.33%	305	1-Dec-39	28.69	10.01%	4.40%
Derivative MBS		14,793	12.4%	5.59%	240	25-Jan-39	n/a	n/a	n/a
Total Mortgage Assets	$	119,669	100.0%	4.49%	305	1-Dec-39	28.69	n/a	4.40%

	March 31, 2010					December 31, 2009
Agency	Fair Value		Percentage of Entire Portfolio			Fair Value		Percentage of Entire Portfolio
Fannie Mae	$	87,037		85.20	%	$	108,775		90.9	%
Freddie Mac		15,123		14.80	%		10,894		9.1	%
Total Portfolio	$	102,160		100.00	%	$	119,669		100.0	%

	Three Months Ended March 31,
	2010			2009
Balance—Beginning of period	$	5,149		$	7,303
Provision		50			468
Settlements		(2	)		(2,622	)
Balance—End of period	$	5,197		$	5,149

Entire Portfolio	March 31, 2010		December 31, 2009
Weighted Average Pass Through Purchase Price	$	103.66	$	103.13
Weighted Average Derivative Purchase Price		5.11		4.66
Weighted Average Pass Through Current Price	$	104.28	$	103.79
Weighted Average Derivative Current Price	$	5.16	$	4.93
Effective Duration (1)		2.643		1.593

			Interest Rates Fall 100 BPS			Interest Rates Rise 100 BPS			Interest Rates Rise 200 BPS
Adjustable Rate MBS
Fair Value	$	13,865
Change in Fair Value			$	112		$	(112	)	$	(224	)
Change as a % of Fair Value				0.81	%		(0.81	)%		(1.62	)%
Fixed Rate MBS
Fair Value	$	33,973
Change in Fair Value			$	1,199		$	(1,199	)	$	(2,398	)
Change as a % of Fair Value				3.53	%		(3.53	)%		(7.06	)%
Hybrid Adjustable Rate MBS
Fair Value	$	36,272
Change in Fair Value			$	1,118		$	(1,118	)	$	(2,237	)
Change as a % of Fair Value				3.08	%		(3.08	)%		(6.17	)%
Derivative MBS
Fair Value	$	18,050
Change in Fair Value			$	271		$	(271	)	$	(541	)
Change as a % of Fair Value				1.50	%		(1.50	)%		(3.00	)%
Portfolio Total
Fair Value	$	102,160
Change in fair Value			$	2,700		$	(2,700	)	$	(5,400	)
Change as a % of Fair Value				2.64	%		(2.64	)%		(5.29	)%
Cash
Fair Value	$	5,159

			Interest Rates Fall 100 BPS			Interest Rates Rise 100 BPS			Interest Rates Rise 200 BPS
Adjustable Rate MBS
Fair Value	$	13,865
Change in Fair Value			$	78		$	(133	)	$	(319	)
Change as a % of Fair Value				0.56	%		(0.97	)%		(2.30	)%
Fixed Rate MBS
Fair Value	$	33,973
Change in Fair Value			$	934		$	(1,335	)	$	(2,777	)
Change as a % of Fair Value				2.75	%		(3.93	)%		(8.18	)%
Hybrid Adjustable Rate MBS
Fair Value	$	36,272
Change in Fair Value			$	503		$	(1,405	)	$	(3,093	)
Change as a % of Fair Value				1.39	%		(3.87	)%		(8.53	)%
Derivative MBS
Fair Value	$	18,050
Change in Fair Value			$	(2,155	)	$	928		$	64
Change as a % of Fair Value				(11.94	)%		5.14	%		0.35	%
Portfolio Total
Fair Value	$	102,160
Change in fair Value			$	(641	)	$	(1,946	)	$	(6,126	)
Change as a % of Fair Value				(0.63	)%		(1.91	)%		(6.00	)%
Cash
Fair Value	$	5,159

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
March 31, 2010	$	110,914		1,898		-			23		6.76	%	$	88,495		68		0.31	%	$	1,830			6.45	%	$	550
December 31, 2009		112,973		1,784		-			1,554		0.82	%		80,904		59		0.29	%		1,725			0.52	%		617
September 30, 2009		100,386		2,882		-			1,787		4.37	%		65,712		69		0.42	%		2,813			3.95	%		982
June 30, 2009		92,949		2,683		-			627		8.85	%		72,312		105		0.58	%		2,578			8.27	%		1,204
March 31, 2009		131,756		3,674		-			277		10.31	%		111,715		254		0.91	%		3,420			9.41	%		1,933
December 31, 2008		199,338		3,093		-			458		5.29	%		174,701		1,114		2.55	%		1,979			2.74	%		1,933
September 30, 2008		375,239		6,149		-			568		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	%		-

Calendar Month	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Amount That May Yet Be Purchased Under the Plans or Programs
January 2010		90,059	$	2.30		-		-
February 2010		-		-		-		-
March 2010		-		-		-		-
Total		90,059	$	2.30		-		-

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	Agreement dated as of June 30, 2009, by and between Bimini Capital Management, Inc. and Robert E. Cauley, incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K, dated June 30, 2009, filed with the SEC on July 2, 2009
†10.11	Agreement dated as of June 30, 2009, by and between Bimini Capital Management, Inc. and G. Hunter Haas, incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K, dated June 30, 2009, filed with the SEC on July 2, 2009
10.12	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
10.13	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
10.14	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
10.15	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
10.16	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
10.17	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
10.18	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
10.19	Amended and Restated Junior Subordinated Indenture, dated as of September 26, 2005, between the Company and JPMorgan Chase Bank, National Association, as trustee.
10.20	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.
10.21	Indenture, dated as of October 5, 2005, between the Company and Wilmington Trust Company, as debenture trustee.
10.22	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.

Date: May 7, 2010		By:	/s/ Robert E. Cauley
			Robert E. Cauley Chairman and Chief Executive Officer

Date: May 7, 2010		By:	/s/ G. Hunter Haas
			G. Hunter Haas IV President, Chief Financial Officer, Chief Investment Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer)