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Executive

Robert Cauley - Chairman of the Board, Chief Executive Officer

Chris Clifton - Senior Vice President, Senior Counsel

Analysts

David Brooks - MidFirst Bank

John Delaney – KBW

John Wiscamp - Black Rock Bank

Bimini Capital Management, Inc. (OTCQB:BMNM) Business Update Call January 8, 2009 10:00 AM ET

Chris Clifton

Good morning and welcome to the Bimini Capital Management Inc. conference call for registered noteholders of Preferred Term Securities XX and Preferred Term Securities XXI. This call is being recorded.

At this time, the company will like to remind the listeners that statements made during today’s conference call relating to matters that are not historical facts are forward-looking statements subject to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

The listeners are cautioned that such forward-looking statements are based on information currently available and on management’s good faith belief with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in such forward-looking statements.

Important factors that could cause such differences are described in the company’s filings with the Securities and Exchange Commission, including the company’s most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q. The company assumes no obligation to update such forward-looking statements to reflect actual results, changes and assumptions or changes in other factors affecting forward-looking statements.

Now I would like to turn this call over to the company’s Chairman and Chief Executive Officer Mr. Robert Cauley.

Robert Cauley

Thanks Chris. Once again everybody welcome. I appreciate everybody taking the time in joining us today. I realize there is a lot going on, so I’ll try to be as quick and expeditious as I can.

First off, I’d like to discuss a brief outline of what I’d like to say first. I’ll just give you a very brief update of the company; since it’s only been a few weeks there’s now much to say and then I will resume the discussion we had. On the last call, we talked about setting up some means of a forum to allow the holders of the Preferred Securities to participate and a proposed restructuring of our trust preferred debt. Then finally, I’ll have a brief Q&A session, where everybody will have a chance to ask any questions. So, I will just kick right and start right in here.

As far as an update, we actually have not closed the books for ’08 yet. We are very close to doing so, but they are not quite done, so I really don’t have any preliminary numbers to discuss. We anticipate filing our K sometime in late February, early March and we may or may not have preliminary results out before that.

Otherwise with respect to the portfolio and the funding, as you may recall, the last time we spoke, we had mentioned that because of the negative net worth of the company that we had limited access to funding. Our funding levels and portfolio slides us down very slightly from where they where than. We continue to have only one counter party and I would say that generally speaking, the availability of funding in the market is still very, very limited.

With respect to the funding level we do have in place, our haircuts are now all uniformly at 7%; they were at 5% previously. Although, the actual interest rates are now very, very low, south of 1% which implies that the NIM on the portfolio even though it’s very small, the NIM is quite large.

Now, I’m just going to jump right into the true purpose of this call, which is to discuss how we would like to facilitate the involvement of PreTSL holders and a proposed restructuring of our trust preferred debt. As you may recall, in the last call I’d mentioned that we had issued two, twice in 2005. In the case of the other issuer, there is an asset manager who can act on behalf of the holders and so they can negotiate directly with us. On the case of the PreTSL deals, because there is no asset manager, we have pursue this route.

The way that I would like to proceed is using something by the name of Interlinks. I’m not sure if any of you have had any prior experience with it. It is used quite extensively in the syndicated loan market and in the M&A market. It is a very, very nice product. It’s been available now for about two or three years and it is basically a virtual workspace on the web. It has tremendous capabilities to facilitate something like this.

Basically, the way it works is that individuals wishing to participate are granted access; documents are put into the workspace; any comments, questions, suggestions that any participants have can funnel those into me and then we can just post them out there for review and comment by others.

So, the way it will work, we will use Interlinks to virtual workspace to post an initial draft of a term sheet and any other supporting documents necessary. All users are granted access and that will be limited to registered holders and I’ll speak about that more in a movement, registered holders of PreTSL Securities. We will then have the option to use a Q&A feature on Interlinks that will allow them to respond back to the company with comments and suggestions. I will have the ability to funnel those comments out to the rest of the participants or just to respond directly to them.

To the extent holders wish to convene meanings, discussions amongst themselves; we mentioned on the last call that we had two holders, David Brooks and Terry Whelin that would act as a kind of pseudo working committee to facilitate that processed. On the last call they gave their telephone numbers and e-mail addresses and so they will facilitate communication amongst the holders and Interlinks will be used to facilitate communication between the company and holders.

There are a lot of very nice features on Interlinks that allow us to track participation and to respond to comments and suggestion. Then also in terms of by timing it is setup. I intend to have the initial documents out there early next week and that will be the means by which we proceed to the negotiating process on the economic terms of our restructuring.

I also will have the ability to the Interlinks to the extent there was anything new out there, to contact everybody via e-mail, there is an alerts feature that will allow me to communicate with everybody and tell them that there is something out there to go see and then to the extent we ever get to the point where there is a vote, I can post warnings or such things and then post results and so forth. At the end of the day, if there is a vote, it will come through the Consortium Banks distributing proxies, to the registered holders only. So, there is basically no way to circum-date the system only; there is no one other than a holder that can.

Now, the way I envisioned this working, as I mentioned we have another holder of trust preferred debt that does have an asset manager, so I intend to initiate the process with them. As we proceed down through the process, we will post updates and information to the extent, the holders of the PreTSL Securities will want to offer counter proposals or additional terms. They will be able to do so through the Interlinks process and then as I said also to the extent they want to communicate just amongst themselves and not with the company Terry Will and David Brooks, have volunteered to perform that function.

Now, it’s important that only holders of the PreTSL Securities participate in this process and so the way we will control that is the following: Anybody that holds the securities that has a desire to participate will contact the company Bimini, you can contact me. Our phone number is available publicly; I’ll give it to you now, its 772-231-1400.

There is a process, by which I will go through to verify that you are a holder and to the extent that you are, I will give you direction in terms of how to get into the website. You’ll be given a username and password and then there are tutorials available that will show you how it works to the extent you haven’t used it. They’re very, very user-friendly, very easy to do, I can send you those via e-mail and then you just quickly listen to them and you should be up to speed fairly quickly.

I’ll have the e-mail’s of all those who have been allowed into the virtual workspace, that way whenever there is anything new, I can just send that alerts and let everybody know that there is something to go to the website and see and that’s basically how the process will work. I’m anxious to get started and I am hopeful that we’ll get as many holders involved. This is as open and formal as we can and I think that has a lot of nice features about it, including the ability to limit access just to holders of the PreTSL Securities and that’s basically it.

At this point, I’d like to open it up to questions and I’ll try to answer everyone I can, operator?

Question-and-Answer Session

Operator

(Operator Instructions) Your first question is from David Brooks - MidFirst Bank

David Brooks - MidFirst Bank

I just want a couple of things. First, there may be some concerns by participants that they participated on the Interlink about disclosure, maybe identifying themselves. Is there a way to, if they post comments that they can either choose to have their, identifying feature be posted along with it or not?

Robert Cauley

When you say disclose, disclose of who?

David Brooks - MidFirst Bank

Well like, if someone posted a comment out on the Interlinks, is there a way that they can choose whether their name appears along with that?

Robert Cauley

Yes, there is. I can mask that. I think there is a lot of capability with the software to control the identity. Even my own; I can post things out there without having anybody knowing who it is. So, yes there is a lot of capability with respect to protecting the identity of someone who has posted the information.

David Brooks - MidFirst Bank

Okay and the other thing is I just would encourage everybody to participate. I think it’s in everyone’s best interest and it includes also Bimini in that, but also the PreTSL holders were all the way down to capital structure in kind of trying to prevent more hazards and setting up PreTSL for future deals. If there is something else to come along, at least we can draw on some, because as everybody knows in the PreTSL, there is no acting clever manager and it maybe that PreTSL holders are required to have this situation come up again and it would be nice to only test some type of framework or structure to fall back on to expedite these things.

I think it allows the members to understand what’s going on in the process and kind of the valuations or how things were arrived at as opposed to just receiving notifications from Bimini that there is an offer. That allows them to have a bit more say in what it is, the situation that can be come to some kind of conclusion. You’re probably going to get a lot more response and a better success rate. So, I would just encourage everybody to participate whether you want this deal to succeed or not and let other members know that.

Operator

(Operator Instructions) Your next question comes from [John Wiscamp – Black Rock Bank].

John Wiscamp - Black Rock Bank

Is there somewhere, can we get an asset listing of the firm incurring the year end pricing and the sort of second question is, I think the last call you said you wanted to get up to grow the asset to still make sense of your capital base and other things to keep them as an ongoing concern with the Federal Government buying mortgage-backed product now.

You’re entering the market and distorting things, has that changed your thought? Is the number still going to make sense if yields are significantly lower in the mortgage-backed space because of that and have prices significantly changed on the assets you owned? Is it better off maybe to sell those things now, if you primarily own Fannie and Freddie and agency and Ginnie Mae debt?

Chris Clifton

All the fund of the portfolio information was made available in the 10-K. Just as you did mention, it is all agency; we do have some derivatives in there, there are Inverse IO, there’s two of those. When we published to KO, there is not prices per say, we’ve got a fund like a mutual fund, but there is a mark-to-market gain or loss on the portfolio that will be part of our income statement.

As far as the viability of a company, the problem right now is that it doesn’t have a positive network and that kind of really impairs our ability to access the funding market. We do have enough liquidity to run a portfolio of sufficient size to cover the cost of the company, assuming that the debt burden was reduced and at least for some short-term period the coupon was reduced. The idea would be that if that were the case, we would be profitable and I’ll be glad to share with you our pro forma numbers with you on that and then we would seek to raise additional capital. To the extent we can do that we can grow the company.

Now there are some assets that are remained from the mortgage company. The mortgage company always has so many operations, but they do have a couple of assets that will be slowly monetized over time. Those funds can then be used to rebuild the portfolio as well.

In terms of yields, while our yields are very, very low, in historical terms in relation to funding they are very, very light. The coupons on the securities we owned, mortgage-backed security coupons and the yield that you earn from those are a function of prepayments which are quite slow now. So, if you’re buying securities that have coupons between say 4% and 6%, prepayments are relatively the 9% and you’re funding under 1%. There is a lot of earnings potential there and so the company can be profitable to the extent we get this restructuring done and very much a viable ongoing concern.

So, I think it’s in everybody’s best interest to go ahead with this, because absent that, it’s basically a slow bleed. The company can’t cover its cost absent this restructuring and basically you guys would essentially own an IO and you would receive eight or 10 years, whatever the case maybe of interest and then that basically will be yet.

There’s certainly not enough assets in the company, its current size to payoff the $100 million of debt that we have in trust preferred and the two issues that we did are parent decisions, so neither were senior to the others. So that’s the total $100 million.

So, the quick answer to your question is, yes very much so. The investment opportunities are very attractive and to the extent that this restructuring goes forward, the potential outcome to the holders of the PreTSL Securities and the other issuer I think are greatly enhanced.

Operator

Your next question comes from John Delaney – KBW.

John Delaney – KBW

I was just wondering if you could give the contact information for David Brooks and Terry Whelin?

Robert Cauley

I don’t have it in front of me. I bet if I have David answer the next question he can provide that. I do not have it in front of me I apologize.

David Brooks - MidFirst Bank

Okay, my contact information is david.brooks@midfirst.com. The best way to reach me is by email obviously. My telephone number is 405-767-7653 and Terry Whelin, his number is 617-664-3297. He can be reached at twhelin@statestreet.com.

Operator

(Operator Instructions) There are no further questions in the queue. I would like to turn it back to management for any closing remarks.

Robert Cauley

Okay, thank you very much. Again, I appreciate everybody’s time and as I said we’re interested to get going, so Interlinks should be up and running shortly. If you contact me here, then our number is 772-231-1400. We will go through the process to grant you access to the extent we can verify you’re a registered holder and we will move forward. Hopefully this process will prove to be fruitful and I really will appreciate everybody’s contribution. Thank you.

Operator

Thank you. Ladies and gentlemen this does conclude our conference for today. If you would like to listen to a reply of today’s conference, please dial 303-590-3000 or you can dial 1800-405-2236 and enter access code 11123469#. It will be available for reply after 12:00 pm Eastern Standard Time today, until Saturday January 10, 2009 at 11:59 pm Easter Standard Time.

We thank you for your participation. You may now disconnect.

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