ARMOUR Residential REIT Q4 Earnings Call Highlights

Core Viewpoint - ARMOUR Residential REIT reported a strong performance in Q4 2025, with significant economic returns driven by favorable market conditions in mortgage-backed securities [4][7]. Financial Performance - The quarter-end book value was $18.63 per common share, reflecting a 6.5% increase from September 30, with a current estimate of $18.37 per share as of February 17 [1][7]. - Distributable earnings available to common stockholders were $79.8 million, equating to $0.71 per common share, defined as net interest income plus TBA drop income, adjusted for interest-related expenses [2]. - GAAP net income available to common stockholders was reported at $208.7 million, or $1.86 per share, with net interest income of $50.4 million [3][7]. Market Conditions and Portfolio Management - The company experienced a total economic return of 10.63% for the quarter, attributed to tightening mortgage-backed securities spreads and a lower interest-rate environment [3][4]. - The portfolio grew over 10% from Q3, totaling over $20 billion in mortgage assets, with nearly 100% in agency MBS/CMBS/DUS and an implied leverage of 7.9x [6][10]. - Management characterized agency MBS as a "high conviction opportunity," supported by Federal Reserve easing and the FHFA's $200 billion MBS purchase mandate [6][11]. Capital and Funding Activities - ARMOUR raised approximately $138 million in common equity through an ATM program, described as "mildly dilutive," and improved repo funding conditions to roughly SOFR+15bp [5][8]. - The company issued $4.8 million of preferred stock under its preferred ATM program, contributing to its capital liquidity position of about 54% of total shareholders' equity [8][10]. Dividend Policy - ARMOUR maintained a monthly common dividend of $0.24 per share, totaling $0.72 for the quarter, with plans to continue paying an attractive and stable dividend [9][7]. Future Outlook - The management expressed a favorable outlook for 2026, citing supportive market dynamics and a focus on lowering mortgage spreads, with expectations of continued positive momentum [11][12]. - The company aims to be selective in capital-raising and investment opportunities, indicating a cautious approach to balance-sheet growth [19].