Bimini Capital Management, Inc. · OTC:BMNM
Bimini Capital Management — Bimini Mortgage Management — NYSSA REIT Industry Conference 2005
29 slides from Bimini Capital Management's conference presentation, Apr 11, 2005
Slide 1: Bimini Mortgage Management – NYSSA REIT Industry Conference
NBIMINI MORTGAGE MANAGEMENT NYSSA REIT Industry Conference April 12, 2005
Slide 2: Safe Harbor Statement
Safe Harbor Stateme These materials contain forward-looking statements made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. The reader is cautioned that such forward-looking statements are based on information available at the time and on management'
Slide 3: History of the RMBS REIT Business Model
Dividend Yield, Return on Equity, & Annualized Total Rate of Return History of the RMBS REIT Business Model The Residential Mortgage Backed Security REIT Business Model has a History Dating back to 1993 with the First IPO in 1994 = IPOs 1994: Thomburg 1995: Redwood 1997: Annaly, FBR Asset, Laser and
Slide 4: Dividend Yields Based on Average Stock Price
Dividend Yields Based on Average Stock Price Comparison of the Quarterly Dividend Yield based on the Average Stock Price during the Applicable Quarter \ oe 25m fo annaly 12.8% —anwarth 13.5% _ MFA 126% ~ Luminent 13.5% —Bimini 138% 9% fo som 4 (vider Vie based on Average Stok Price) eo 1997 1998 199
Slide 5: Dividend Yields Based on Average Book Value
Dividend Yields Based on Average Book Value Comparison of the Quarterly Return on Equity Based on the Average Quarterly Book Value (ie: Beginning & End of the Quarter) 20m feo 200% te 150% fo soos tf Average 14.2% Return Egy baad on erage Gute Bock Wauns (8) Anna 15.79 gmespos —Anworth 12.7% |... MF
Slide 6: Quarterly Book Values
Quarterly Book Values js, Comparison of Quarterly Book Values (at end of each Quarter) Through December 31st 2004 0 Percentage Change 5 Since IPO Annual ook Value atthe end af each Quote) Analy 15.2% 2.1% —Arwarth 31.6% 6.1% MFA 70% = 11% ~ Lurrinent -12.6% — -12.8% Bimini 1.2% NA o vem NBIMINI
Slide 7: Annualized Total Return
Annualized Total Return fo! erG Calculated from the Last Day of the IPO Month through 12/31/2004 Annaly 21.71% October 1997 IPO Anworth 16.97% April 1998 IPO MFA 12.01% April 1998 IPO Luminent (2.84%) December 2003 IPO Bimini 23.57% September 2004 IPO cna provid Room rg Randi ire
Slide 8: Studying Best Practices
Studying the Business Model = “Best Practices” - Two Years Researching the Sector » Identify “Best Practices” » Clarify “Not-So Best Practices” = Strength and Weakness in the Business Model » Biggest Strength + Permanent Equity to Invest in Fixed Income Instruments * Stock price can ga down but that
Slide 9: How does Bimini Effectively Address Weaknesses?
How does Bimini Effectively Address Weaknesses in the Business Model & Make the Business Model Better? = Clearly Defined Investment Objectives » Book Value Preservation + Grow Book Value » Stable Returns Over Time = Avoid Event Risk » Event Risk Scenarios Manifest Themselves through Margin Calls + M
Slide 10: Book Value Preservation
How does Bimini Effectively Address Weaknesses in the Business Model & Make the Business Model Better? = Book Value Preservation Bimini Outperforms Peer Group During a Very Challenging Period The Merrill Lynch Master Treasury Index had the Worst Return in 20 Years during @2 2004 Book Value Per Share
Slide 11: Making The Business Model Better
How does Bimini Effectively Address Weaknesses in the Business Model & Make the Business Model Better? = Making The Business Model Better 1. Cash Management and Committed Funding Agreements 2. True Quantitative Risk Management 3. Diversification: Portfolio is Diversified across Five Classes of Short
Slide 12: Cash Management and Committed Funding Agreements
Making the Business Model Better = Cash Management and Committed Funding Agreements » 40% (or more) of Book Equity Cash on Hand Current Portfolio Generates Approximately $75 to $90 Million a Month in Cash Flow >» Substantial Borrowing Lines (Approximately $13 billion) Committed Borrowing Lines + $1.
Slide 13: True Quantitative Risk Management
Making the Business Model Better "True Quantitative Risk Management » Risk Based Capital Allocation Model + Patterned after Risk-Based Capital Guidelines Established by Basel Accords + Risk Profile of the Portfolio Drives Leverage Ratio + Asset Allocation Model used to Construct Target Portfolio + T
Slide 14: Loan Level Detail Analysis
Making the Business Model Better = Loan Level Detail Analysis > CPR & CDR Technologies + Providers of ongoing loan level detail >» Inelastic Borrowers + Prepay within a tighter range of expectations + Pay higher rates (higher coupon income for Bimini) » Top of the “Pear Tree” — pick the borrower who
Slide 15: Full Transparency
Making the Business Model Better «Full Transparency > BMM Releases its Portfolio and Liabil + 8K (See Appendix) + Credit officers always know what Bimini owns + Lenders take great comfort in knowing Bimini's financial condition + Investors take comfort in knowing Bimini is willing to show all that t
Slide 16: Repo and Settlement Outsourcing
Making the Business Model Better Repo and Settlement Outsourcing > AVM, LP and Ill Associates in house (Bimini) Liability Management with Outsourcing Execution Improves Repo Pricing Maximizes Settiement Efficiency and Reliability = Low Fail Rates All Counter-Party Relationships in Bimini’s name Effi
Slide 17: Diversified Repurchase Counter Parties
Making the Business Model Better = Diversified Repurchase Counter Parties Bank of America Securities, LLC JP Morgan Securities, Inc. Bear Stearns and Co. Inc. Lehman Brothers Cantor Fitzgerald Merrill Lynch Citibank Morgan Stanley Countrywide Securities, Inc. Nomura Securities International Daiwa RE
Slide 18: Low General and Administrative Expense Ratio
Making the Business Model Better = Low General and Administrative Expense Ratio + Low cost producers in most industries have the best chance of longevity > 18 bp’s of Assets up to $500 Million (Equity) > 15 bp’s of Assets over $1 Billion (Equity) " Application of Best Practices » Dividend Payments 1
Slide 19: Application of Best Practices: When do you get your Dividend?
Application of Best Practices: When do you get your Dividend? i mAveraue Dalayin Payment Date Ater Quarter Era Annualized Delay InDays Data provided by Reembarg ‘analy anserty oo Luminent sin Financial Savices 2004 Q1 Dividend 2 Dividend 3 Dividend 4 Dividend RMBSREIT Pay Date Pay Date Pay Date Pay
Slide 20: Portfolio Highlights
Portfolio Highlights ini owns Agency Mortgage Related Securities — Little Credit Risk = Diversification Across Five Short-Duration Asset Classes > Short-Duration Assets have Historically Exhibited Low Price Volatility > Diversification Limits Potential Volatility from Overexposure to any One Asset C
Slide 21: The Value of ARMs In A Diversified Portfolio
The Value of ARMs In A Diversified Portfolio UNtUITED OHTA, Coupon Reset Schedule as a Percentage a lof Biminis Total Outstanding Current Face| as of April 2005 (Assumes No Paydowns) a6 # ‘ect Total ertotio(Ourart Outstanding Face) 2 # om 4, %, 4, %, Ye, ye, i i i i i ee 0, Hy
Slide 22: Value of Fixed-Rate MBS in a Diversified Portfolio
Value of Fixed-Rate MBS in iversified Portfolio = Bim i’s Fixed Rate Assets are Generally Niche “Specified” Assets » Low Loan Balances » Expanded Approval — Level 3 » ALT-A ® Investor Properties » Geographic Preferences » Seasoning Preferences » Usually High Coupons are Preferable
Slide 23: High Coupon, Specialty Fixed Rate Assets
High Coupon, Specialty Fixed Rate Assets can perform in Both Rising and Falling Rate Environments = High / Rising Rate Environment >» Yields Rise as Prepayments Slow for Premium Priced Assets > Premium Fixed Rate Mortgages still Generate Significant Cash Flow to reinvest at higher yields > Premium M
Slide 24: Visit our website at www.biminireit.com
www.biminireit.com Visit our website at www.biminireit.com where you will find more information about Bimini Mortgage Management, Inc.
Slide 25: Appendix
Appendix Appendix
Slide 26: Portfolio & Liability Information (8K)
Portfolio & Liability Information (8K)
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Slide 28: 8K Continued (Liabilities)
8K Continued (Liabilities) ‘aust Rang irfemdion so S109] egutcbace, Dolacimanct Weidtedmesoe — Lange Cocerties Booming: = Mabini Nera 3 #62700 ‘80 2.06005 wPhbrgn Seawiies $$ © © -@3800,00, a BeAgo5 Dunsheork $a 80 ra aeons Bex Seams Sr281300 © ‘a-sep0s Goliren Sacks § ABDI ST 2 .sep05 Caurregris =
Slide 29: Searchable text section of graphics
Searchable text section of graphics shown above [ LOG O] NYSSA REIT Industry Conference April 12, 2005 Saf e Harbor Statement These materials contain forward-looking statements made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. The reader is cautio
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