Core Insights - ORG Wealth Partners, LLC initiated a new position in ARMOUR Residential REIT, acquiring 315,000 shares valued at $4.71 million during Q3 2025, representing 1.0% of the fund's total reportable assets of $470.31 million [1][2][3] Company Overview - ARMOUR Residential REIT primarily invests in residential mortgage-backed securities (MBS) issued or guaranteed by U.S. government agencies and government-sponsored entities, operating as a mortgage real estate investment trust (REIT) [5][6] - The company reported a trailing twelve months (TTM) revenue of $116.8 million and a net income of $52.54 million, with a dividend yield of 17.57% as of October 23, 2025 [4] Recent Performance - As of October 23, 2025, ARR shares were priced at $15.94, reflecting an 18.6% decline over the past year and underperforming the S&P 500 by 19.02 percentage points during the same period [3] Investment Strategy - The investment in ARMOUR Residential REIT by ORG Wealth Partners may indicate a strategy to diversify its portfolio, which is heavily weighted towards technology stocks, by adding a high dividend yield asset [9]

Group 1 - The article discusses the author's investment journey, starting in high school in 2011, focusing on REITs, preferred stocks, and high-yield bonds, indicating a long-standing interest in markets and the economy [1] - The author has recently adopted a strategy that combines long stock positions with covered calls and cash secured puts, emphasizing a fundamental long-term investment approach [1] - The author primarily covers REITs and financials on Seeking Alpha, with occasional articles on ETFs and other stocks influenced by macro trade ideas [1]

Financial Data and Key Metrics Changes - ARMOUR's Q3 GAAP net income available to common stockholders was $156.3 million, or $1.49 per common share, with net interest income of $38.5 million [3] - Distributed earnings available to common stockholders was $75.3 million, or $0.72 per common share, reflecting a total economic return of 7.75% for the quarter [3][4] - Quarter-end book value increased to $17.49 per common share, up 3.5% from June 30th and 2.8% from August 8th [3] Business Line Data and Key Metrics Changes - ARMOUR raised approximately $99.5 million of capital by issuing about 6 million shares of common stock through an at-the-market offering program [4] - The company repurchased 700,000 shares of common stock through its repurchase program during Q3 [5] Market Data and Key Metrics Changes - The Federal Reserve resumed its easing cycle with a 25 basis point cut in September, leading to a decline in Treasury yields and tightening of agency MBS spreads by roughly 20 basis points [7][8] - Aggregate portfolio prepayment rates rose to 9.6 CPR in October, a 19% increase from the Q3 average of 8.1 CPR [11] Company Strategy and Development Direction - ARMOUR's strategy focuses on growing and deploying capital thoughtfully during spread dislocations while maintaining robust liquidity and dynamically adjusting hedges for disciplined risk management [15] - The company aims to pay an attractive and stable dividend over the medium term, with a current monthly dividend of $0.24 per share [5][6] Management's Comments on Operating Environment and Future Outlook - Management noted that the macroeconomic environment has become more uncertain due to the federal government shutdown, but they expect continued easing bias from the Fed to redirect liquidity into agency MBS [8][9] - The company anticipates structural demand for agency mortgage-backed securities to strengthen, supported by regulatory clarity around banking reform [13] Other Important Information - ARMOUR's portfolio is entirely invested in agency mortgage-backed securities, agency commercial MBS, and U.S. Treasuries, with a net duration of 0.2 years and applied leverage of 8.1 times [10] - The company executed a $300 million overnight underwritten bought deal in August, contributing to an increase in book value [14] Q&A Session Summary Question: Current returns on incremental investments and hedge choices - Management expects hedged ROEs in the 16%-18% range, slightly lower than previous quarters due to tight mortgage spreads [18] Question: Outlook for swap spreads and mortgage spreads on an OIS basis - Swap spreads are expected to normalize, providing a tailwind for the portfolio as a more effective hedge for MBS [20][21] Question: GSE deregulation and its implementation - Management indicated that various levers could be pulled to reduce borrower rates, but balancing GSE attractiveness as an investment is also a priority [24][25] Question: Interest rate volatility and potential hedging strategies - Management discussed using swaptions and asset selection to manage volatility, with a focus on low optionality assets [31][32] Question: Economic net interest margin outlook - Future trends depend on the portfolio and Fed rate cuts, with a current focus on maintaining a strong portfolio [36][37] Question: MBS spreads and Fed rate cuts - Management believes that a pause in the easing cycle could lead to volatility, but actual cuts may unlock bank demand for MBS [41][43] Question: Stock buyback valuation - The stock buybacks occurred at around $14.40 per share, with management committed to being active on both sides of the equity account [45]

Financial Data and Key Metrics Changes - ARMOUR's Q3 GAAP net income available to common stockholders was $156.3 million, or $1.49 per common share, with net interest income at $38.5 million [3] - Distributed earnings available to common stockholders was $75.3 million, or $0.72 per common share, reflecting a total economic return of 7.75% for the quarter [3][4] - Quarter-end book value increased to $17.49 per common share, up 3.5% from June 30th and 2.8% from August 8th [3] Business Line Data and Key Metrics Changes - ARMOUR raised approximately $99.5 million of capital by issuing about 6 million shares through an at-the-market offering program [4] - The company repurchased 700,000 shares of common stock through its repurchase program during Q3 [5] Market Data and Key Metrics Changes - The Federal Reserve implemented a 25 basis point cut in September, with expectations for two additional cuts by year-end, creating a favorable environment for agency MBS [7][8] - Treasury yields declined, agency MBS spreads tightened by roughly 20 basis points, and volatility fell to its lowest level since 2022 [7] Company Strategy and Development Direction - ARMOUR's strategy focuses on growing and deploying capital thoughtfully during spread dislocations while maintaining robust liquidity and dynamically adjusting hedges for disciplined risk management [15] - The company aims to pay an attractive and stable dividend, with a current monthly dividend of $0.24 per share [5][6] Management's Comments on Operating Environment and Future Outlook - Management noted that the macroeconomic environment has become more uncertain due to the federal government shutdown, but they expect continued structural demand for agency mortgage-backed securities [8][13] - The company anticipates that regulatory clarity around banking reform and a resumed easing cycle will serve as catalysts for high-quality liquid assets like mortgage-backed securities [13] Other Important Information - ARMOUR's portfolio is entirely invested in agency mortgage-backed securities, agency commercial MBS, and U.S. Treasuries, with a net duration of 0.2 years and applied leverage of 8.1 times [10] - The aggregate portfolio prepayment rates rose to 9.6 CPR in October, a 19% increase from the third-quarter average of 8.1 CPR [11] Q&A Session Summary Question: Current returns on incremental investments and hedge choices - Management expects hedged ROEs in the 16% to 18% range, slightly lower than previous quarters due to tight mortgage spreads [18] Question: Outlook for swap spreads and mortgage spreads on an OIS basis - Swap spreads are expected to normalize, providing a tailwind for the portfolio as a more effective hedge for MBS [20][21] Question: GSE deregulation and its impact on borrower rates - Management indicated that various levers could be pulled to reduce borrower rates, but there is a balance to maintain GSE attractiveness [24][25] Question: Interest rate volatility and its future evolution - Management believes that while short-term volatility may occur, medium-term volatility is expected to decline as the Fed continues normalization [32] Question: Economic net interest margin outlook - The future of the economic net interest margin will depend on the portfolio and the pace of Fed rate cuts [36][37] Question: MBS spreads and Fed rate cuts - Management noted that a pause in the easing cycle could lead to volatility, but actual cuts may unlock bank demand for MBS [42][43] Question: Stock valuation during capital raising and buyback transactions - The stock buybacks occurred at around $14.40 per share, and management is committed to being active on both sides of the equity account [45]

Financial Data and Key Metrics Changes - ARMOUR's Q3 GAAP net income available to common stockholders was $156.3 million, or $1.49 per common share, with net interest income at $38.5 million [3] - Distributed earnings available to common stockholders was $75.3 million, or $0.72 per common share, reflecting a total economic return of 7.75% for the quarter [3][4] - Quarter-end book value increased to $17.49 per common share, up 3.5% from June 30 and 2.8% from August 8 [3] Business Line Data and Key Metrics Changes - ARMOUR raised approximately $99.5 million by issuing about 6 million shares through an at-the-market offering program and completed the sale of 18.5 million shares for approximately $298.6 million [4] - The company repurchased 700,000 shares through its common stock repurchase program [4] Market Data and Key Metrics Changes - The Federal Reserve resumed its easing cycle with a 25 basis point cut in September, leading to a decline in Treasury yields and a tightening of agency MBS spreads by roughly 20 basis points [7][8] - MBS spreads are now near the tightest levels of the year, with expectations of further easing likely to redirect liquidity into agency MBS [8] Company Strategy and Development Direction - ARMOUR's strategy focuses on growing and deploying capital thoughtfully during spread dislocations while maintaining robust liquidity and dynamically adjusting hedges for disciplined risk management [15][16] - The company aims to pay an attractive and stable dividend over the medium term, with a current monthly dividend of $0.24 per share [4][5] Management's Comments on Operating Environment and Future Outlook - Management noted that the macroeconomic environment is shifting, with a softer U.S. labor market and expectations of further Fed rate cuts, which could create a constructive environment for agency MBS [6][7] - The company anticipates that structural demand for agency mortgage-backed securities will continue to strengthen, supported by regulatory clarity and a resumed easing cycle [14] Other Important Information - ARMOUR's portfolio is entirely invested in agency mortgage-backed securities, agency commercial MBS, and U.S. Treasuries, with a net duration of 0.2 years and applied leverage of 8.1 times [10] - The average gross haircuts stand near 2.75%, with repo market liquidity remaining healthy [13] Q&A Session Summary Question: Current returns on incremental investments and hedge choices - Management expects hedged ROEs in the 16% to 18% range, slightly lower than previous quarters due to tight mortgage spreads [18][19] Question: Outlook for swap spreads and mortgage spreads on an OIS basis - Swap spreads are expected to normalize, providing a tailwind for the portfolio, with 87% of notional allocated to SOFR and OIS swaps [20][21] Question: GSE deregulation and its impact on borrower rates - Management indicated that various levers could be pulled to reduce borrower rates, but balancing GSE attractiveness as an investment is also a priority [23][24] Question: Interest rate volatility and potential hedging strategies - Management discussed using swaptions and asset selection to manage volatility, noting that about 40% of the portfolio consists of low optionality assets [27][29] Question: Economic net interest margin outlook - Future trends depend on the portfolio and Fed rate cuts, with management confident in the constructed portfolio [33][34] Question: MBS spreads and Fed rate cuts - Management acknowledged that a pause in the easing cycle could introduce volatility, but actual cuts could unlock bank demand for MBS [38][39]

Financial Data and Key Metrics Changes - ARMOUR's Q3 GAAP net income available to common stockholders was $156.3 million or $1.49 per common share, with net interest income at $38.5 million and distributable earnings at $75.3 million or $0.72 per common share [4] - Total economic return for the quarter was 7.75%, with quarter-end book value at $17.49 per common share, reflecting a 3.5% increase from June 30 and a 2.8% increase from August 8 [4][5] - The most recent estimate of book value as of October 21 was $17.5 per common share, including the accrual of the October common dividend of $0.24 per share [5] Business Line Data and Key Metrics Changes - ARMOUR raised approximately $99.5 million by issuing about 6 million shares of common stock through an after-market offering program during Q3 [5] - The company paid monthly common stock dividends of $0.24 per share for a total of $0.72 for the quarter [5][6] Market Data and Key Metrics Changes - The Federal Reserve resumed its easing cycle with a 25 basis point cut in September, leading to a constructive environment for agency MBS as financing conditions improved [8] - Treasury yields declined, and agency MBS spreads tightened by roughly 20 basis points, with volatility falling to its lowest level since 2022 [8] Company Strategy and Development Direction - ARMOUR's strategy focuses on growing and deploying capital thoughtfully during spread dislocations while maintaining robust liquidity and dynamically adjusting hedges for disciplined risk management [20] - The company is positioned to benefit from potential GSE reforms, which could transform the current headwinds into tailwinds for MBS investors [11] Management's Comments on Operating Environment and Future Outlook - Management noted that macro and political visibility has become more clouded due to the federal government shutdown, which delayed key data releases and introduced uncertainty to growth forecasts [9] - Despite the uncertainty, the market expects an easing bias through year-end, likely redirecting liquidity into agency MBS [10] Other Important Information - ARMOUR's portfolio is entirely invested in Agency CMBS and U.S. Treasuries, with a net duration of 0.2 years and implied leverage of 8.1x [12] - The aggregate portfolio prepayment rates rose to 9.6 CPR in October, a 19% increase from the Q3 average of 8.1 CPR, with expectations of a similar uptick in November [14] Q&A Session Summary Question: Current returns on incremental investments and hedge choices - Management indicated expected ROEs in the 16% to 18% range, slightly lower than previous quarters due to tight mortgage spreads [23][24] Question: Outlook for swap spreads and mortgage spreads on an OAS basis - Management expects swap spreads to continue normalizing, which would be a tailwind for the portfolio [26] Question: Thoughts on GSE deregulation and its implementation - Management acknowledged various levers the administration could pull to reduce borrower rates, indicating a balance between making GSEs attractive and lowering mortgage rates [31] Question: Hedge ratio changes and confidence in easing activity - Management explained that the hedge ratio is adjusted based on duration targets across the curve, reflecting a balanced view with a bias towards Fed easing [33][35] Question: Impact of interest rate volatility on MBS - Management noted that while volatility has decreased, they expect it to continue declining in the medium term, which could affect the valuation of options [41][43]

Financial Performance - For the three months ended September 30, 2025, net income was $159,259,000, compared to $65,880,000 for the same period in 2024, reflecting gains on trading securities and interest income from a larger average securities portfolio[167]. - Net interest income for the nine months ended September 30, 2025, was $107,963,000, significantly up from $14,139,000 in the same period of 2024[167]. - Interest income for the three months ended September 30, 2025, was $210,182,000, compared to $127,060,000 in 2024, while interest expense increased to $171,665,000 from $125,221,000[169]. - Total other income for the three months ended September 30, 2025, was $134,018, compared to $74,487 in 2024, driven by a gain on agency securities trading of $177,108[176]. - The company reported a gain on agency securities trading of $401,910 for the nine months ended September 30, 2025, compared to $55,522 in 2024[176]. - The total management fee expense for the nine months ended September 30, 2025, was $28,582, up from $24,580 in 2024, reflecting an increase of about 16.3%[230]. Investment Portfolio - ARMOUR's investments primarily consist of fixed-rate loans, with a focus on Agency Securities, which are guaranteed by government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac[141]. - As of September 30, 2025, total investments in securities amounted to $18,180,843, with Agency Securities representing 97.9% of the total portfolio[194]. - The company experienced a gross unrealized gain of $47,594 on total Agency Securities valued at $17,805,194 as of September 30, 2025[194]. - The total principal amount of Agency Fixed Rates ≥ 181 months was $17,898,690, with a weighted average CPR of 7.5%[194]. Interest Rate Management - The Federal Reserve maintained the target range for the Federal Funds Rate at 4.25% to 4.50% as of July 30, 2025, and subsequently lowered it to 4.00% to 4.25% on September 17, 2025[153]. - ARMOUR's strategy includes managing interest rate risks effectively while maintaining REIT status, as changes in interest rates significantly influence net interest income[146]. - The primary market risk for ARMOUR Residential REIT, Inc. is interest rate risk, which can significantly affect net interest income and the value of mortgage-backed securities (MBS) due to fluctuations in interest rates[262]. - In a rising interest rate environment, the cost of funds may increase more rapidly than earnings from assets, potentially leading to a net loss and negatively impacting liquidity and net income[263]. - The sensitivity analysis indicates that a 1.00% increase in interest rates could decrease net interest income by 10.06% and shareholder's equity by 10.27% as of September 30, 2025[269]. Liquidity and Financing - The company has prioritized liquidity in response to increased market volatility due to tariffs and Federal Reserve actions, ensuring timely fulfillment of obligations to repurchase agreement counterparties[152]. - The liquidity totaled $1,141,390, consisting of $44,238 in cash and cash equivalents and $1,097,152 in unencumbered Agency Securities and U.S. Treasury Securities as of September 30, 2025[218]. - The company financed its securities portfolio with $16,557,426 in borrowings under repurchase agreements as of September 30, 2025, compared to $10,713,830 at the end of 2024, reflecting a 54.5% increase[221]. - The debt to equity ratio was 7.78:1 as of September 30, 2025, slightly down from 7.87:1 at the end of 2024, indicating a marginal improvement in leverage[222]. Risk Management - The company actively manages risks associated with its leveraged and diversified portfolio of MBS to create stockholder value[261]. - The company faces various risks including changes in interest rates, economic downturns, and regulatory changes that could materially affect its business[252]. - ARMOUR Residential REIT, Inc. faces liquidity risk from financing long-maturity MBS with short-term debt, which can lead to increased borrowing costs during rising interest rates[276]. - Operational risk is a concern due to potential cybersecurity threats, with the company implementing measures to mitigate these risks through an Information Technology Steering Committee[278]. Derivatives and Fair Value - The aggregate notional balance of interest rate swap contracts was $10,402,000 at September 30, 2025, compared to $7,232,000 at December 31, 2024[182]. - The company had contractual commitments under derivatives with a net fair value of $539,362 at September 30, 2025, down from $906,778 at December 31, 2024[203]. - The company had approximately $(281,360) of net deductible expense relating to previously terminated interest rate swap and treasury futures contracts amortizing through the years 2040 and 2034[185]. - Fair value estimates are updated daily to reflect current market dynamics, especially during periods of high volatility[248].

Financial Performance - GAAP net income available to common stockholders was $156.3 million, or $1.49 per common share[5] - Distributable Earnings available to common stockholders totaled $75.3 million, representing $0.72 per common share[5] - Total economic return for Q3 2025 was 7.75%[5] Equity and Assets - Total stockholders' equity increased to $2.1288 billion, up from $1.6599 billion in Q2 2025[7] - The portfolio totaled $18.2 billion, primarily consisting of 97.9% Agency mortgage-backed securities[5] - Liquidity, including cash and unencumbered securities, was $1.1 billion[5] - Book value per common share rose to $17.49, a 3.5% increase from $16.90 at June 30, 2025[5] Income and Expenses - Economic interest income for Q3 2025 was $210.9 million, an increase from $182.2 million in Q2 2025, reflecting a growth of 15.0%[16] - Total interest income for average interest-earning assets increased to $210.2 million in Q3 2025, up from $180.9 million in Q2 2025, representing a 16.1% increase[16] - Economic net interest income for Q3 2025 was $91.5 million, with a net interest spread of 1.83%, compared to $82.2 million and 1.82% in Q2 2025[16] - The company reported an economic interest expense of $119.4 million in Q3 2025, compared to $100.0 million in Q2 2025, indicating an increase of 19.4%[16] Dividends - ARMOUR paid monthly cash dividends of $0.24 per share for common stock in Q3 2025, with future dividends subject to evaluation based on financial performance and market conditions[18] Leverage and Ratios - Debt to equity ratio was 7.78:1, indicating significant leverage in the company's capital structure[5] - ARMOUR's average interest rate on agency securities was 5.08% in Q3 2025, slightly up from 5.01% in Q2 2025[16] Asset Management - The average balance of interest-bearing assets increased to $16,662.9 million in Q3 2025 from $14,767.1 million in Q2 2025, a growth of 12.8%[16] - The company’s net interest income on interest rate swaps was $50.6 million in Q3 2025, compared to $46.3 million in Q2 2025, reflecting an increase of 5.0%[16] - ARMOUR's economic net yield on interest-earning assets was 2.17% in Q3 2025, slightly up from 2.16% in Q2 2025[16] Management - ARMOUR is externally managed by ARMOUR Capital Management LP, which is registered with the SEC[20]

Core Viewpoint - ARMOUR Residential REIT, Inc. reported strong Q3 2025 results, highlighting significant net income and an increase in book value per common share, alongside strategic capital activities and a robust portfolio composition [1][6][22]. Q3 2025 Results - GAAP net income available to common stockholders was $156.3 million, or $1.49 per common share [6]. - Net interest income reached $38.5 million, with distributable earnings available to common stockholders at $75.3 million, translating to $0.72 per common share [6][17]. - Total economic return for Q3 2025 was 7.75%, with a book value per common share of $17.49, reflecting a 3.5% increase from the previous quarter [6][8]. September 30, 2025 Financial Position - Total stockholders' equity increased to $2.1288 billion, up from $1.3614 billion at the end of 2024 [7][11]. - The company's portfolio totaled $18.2 billion, primarily composed of 97.9% Agency mortgage-backed securities [6][9]. - Liquidity, including cash and unencumbered securities, was reported at $1.1 billion [6]. Capital Activities - In August, ARMOUR completed the sale of 18,500,000 shares of common stock for approximately $298.6 million [6]. - The company raised an additional $99.5 million by issuing 5,994,201 shares of common stock through an at-the-market offering program [6]. - A stock repurchase program resulted in the repurchase of 684,102 shares of common stock [6]. Dividends - ARMOUR paid monthly cash dividends of $0.24 per share for Q3 2025, with future dividends declared for October and November 2025 [22][23].

Core Insights - Dividend yields are a primary focus for many investors, particularly retirees who rely on dividend income to cover living expenses [1] Group 1 - Many investors prioritize dividend yields as a crucial aspect of their investment strategy [1] - Retirees and individuals dependent on dividend income are particularly affected by changes in dividend yields [1]