ARMOUR Residential REIT(US:ARR)2025-02-12 21:20Financial Performance - Net interest income for the year ended December 31, 2024, was $26,800,000, a decrease from $27,109,000 in 2023[312] - Total other income for 2024 was $12,456,000, compared to a loss of $51,481,000 in 2023[312] - The net loss for the year ended December 31, 2024, was $14,394,000, significantly improved from a net loss of $67,923,000 in 2023[312] - The company reported a comprehensive loss of $14,394,000 for 2024, compared to a comprehensive loss of $56,396,000 in 2023[312] - Total expenses after fees waived increased to $53,650,000 in 2024 from $43,551,000 in 2023[312] - The company reported a net loss per share related to common stockholders of $(0.51) in 2024, an improvement from $(1.86) in 2023[463] - The total comprehensive loss for 2024 was $14,394 thousand, a decrease from $67,923 thousand in 2023 and $348,430 thousand in 2022[469] Income and Expenses - Total interest income for 2024 was $550,946, slightly down from $552,903 in 2023, with an average yield of 4.90%[316] - Total interest expense decreased to $524,146 in 2024 from $525,794 in 2023, resulting in a net interest spread of (0.43)%[316] - Management fees increased to $39,734 in 2024 from $38,188 in 2023, while total expenses rose to $60,250 from $50,151[326] - The effective management fee rate was 0.92% for 2024, down from 0.93% in 2023, after waiving management fees of $6,600 in both years[329] - Total management fee expense for 2024 was $33.126 million, up 5.1% from $31.521 million in 2023[384] Investments and Securities - ARMOUR's investments primarily consist of Agency Securities, which are subject to risks from prepayments and changing mortgage spreads[291][287] - The company purchased $7,271,101 in trading securities during the year ending December 31, 2024, while proceeds from sales were $4,589,515[351] - Total investments in securities as of December 31, 2024, amounted to $12,957,039, with an amortized cost of $12,806,504 and an unrealized loss of $367,090[343] - The company reported a realized loss on Agency Securities trading of $(348,646) for 2024, compared to a loss of $(52,665) in 2023[322] - The company experienced a gain of $37,602 from trading securities during the year ending December 31, 2024[351] Liquidity and Capital Resources - The company had liquidity totaling $608,026 as of December 31, 2024, consisting of $67,970 in cash and cash equivalents and $540,056 in unencumbered Agency Securities and U.S. government securities[370] - The company has sufficient liquidity and capital resources for acquiring additional investments and meeting financing obligations[387] - The company recognized net gains related to derivatives of $323,500 for the year ended December 31, 2024, compared to $51,748 for the year ended December 31, 2023[362] Market and Interest Rate Risks - Interest rate risk is the primary market risk for ARMOUR, affecting net interest income and the value of mortgage-backed securities (MBS)[416] - Changes in interest rates could lead to a mismatch between the interest rates on mortgage assets and funding sources, impacting net interest income and dividend yield[418] - As of December 31, 2024, a 1.00% increase in interest rates is projected to decrease net interest income by 4.92%, portfolio value by 0.98%, and stockholders' equity by 9.16%[425] - The primary liquidity risk arises from financing long-maturity MBS with short-term debt, which may lead to increased borrowing costs in a rising interest rate environment[433] Company Structure and Compliance - ARMOUR is organized as a real estate investment trust (REIT) and aims to meet the requirements for qualification under the Internal Revenue Code[475] - The company primarily invests in mortgage-backed securities (MBS) issued or guaranteed by U.S. Government-sponsored entities[476] - The company maintains effective internal control over financial reporting as of December 31, 2024, based on PCAOB standards[452] Shareholder Information - Dividends declared per common share decreased to $2.88 in 2024 from $5.00 in 2023, a reduction of 42.4%[463] - The total common stock increased to 62,412 thousand shares by December 31, 2024, up from 48,799 thousand shares in 2023 and 32,582 thousand shares in 2022[466]