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Related Party Transactions
 12 Months Ended
Dec. 31, 2015
Related Party Transactions [Abstract]  
Related Party Transactions

Management Agreement

Upon completion of its initial public offering, Orchid became externally managed and advised by Bimini Advisors pursuant to the terms of a management agreement. As Manager, Bimini Advisors is responsible for administering Orchid’s business activities and day-to-day operations. Pursuant to the terms of the management agreement, Bimini Advisors provides Orchid with its management team, including its officers, along with appropriate support personnel. Bimini Advisors is at all times subject to the supervision and oversight of Orchid’s board of directors and has only such functions and authority as delegated to it. Bimini Advisors receives a monthly management fee in the amount of:

  • One-twelfth of 1.5% of the first $250 million of the Orchid’s equity, as defined in the management agreement,
  • One-twelfth of 1.25% of the Orchid’s equity that is greater than $250 million and less than or equal to $500 million, and
  • One-twelfth of 1.00% of the Orchid’s equity that is greater than $500 million.

Orchid is obligated to reimburse the Company for any direct expenses incurred on its behalf. In addition, the Company began allocating to Orchid its pro rata portion of certain overhead costs set forth in the management agreement commencing with the calendar quarter beginning July 1, 2014. Should the Orchid terminate the management agreement without cause, it shall pay to Bimini Advisors a termination fee equal to three times the average annual management fee, as defined in the management agreement, before or on the last day of the initial term or automatic renewal term.

The following table summarizes the advisory services revenue from Orchid for the year ended December 31, 2015.

(in thousands)
Management fee$3,978
Allocated overhead1,064
Total$5,042

During the year ended December 31, 2014, the activities of Orchid were consolidated with the activities of the Company as more fully discussed in Note 17. Amounts received under the management agreement for the year ended December 31, 2014 were eliminated in the consolidation. At December 31, 2015 and December 31, 2014, the net amount due from Orchid was approximately $1.1 million and $0.3 million, respectively, and is included in “other assets” in the consolidated balance sheets.

During the years ended December 31, 2015 and 2014, Orchid accrued cash and equity compensation payable to officers and employees of Bimini of $0.6 million and $0.5, respectively. The compensation for the year ended December 31, 2014 is included in “compensation and related benefits” in the consolidated statements of operations. The compensation for the year ended December 31, 2015 is not included in the consolidated statements of operations as Orchid is no longer part of the consolidation.

Other Relationships with Orchid

At December 31, 2015 and 2014, the Company owned 1,395,036 and 981,665 shares, respectively of Orchid common stock representing approximately 6.4% and 5.9%, respectively, of the outstanding shares. During the year ended December 31, 2015, the Company received dividends on this common stock investment of approximately $1.9 million. Dividends received during the year ended December 31, 2014 were eliminated in the consolidation.

Robert Cauley, our Chief Executive Officer and Chairman of our Board of Directors, also serves as Chief Executive Officer and Chairman of the Board of Directors of Orchid and owns shares of common stock of Orchid. Also, Hunter Haas, our Chief Financial Officer, Chief Investment Officer and Treasurer, also serves as Chief Financial Officer, Chief Investment Officer and Secretary of Orchid, is a member of Orchid’s Board of Directors and owns shares of common stock of Orchid.