ARMOUR Residential REIT, Inc. Announces Preliminary Unaudited Q4 Results and December 31, 2023 Financial Position

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VERO BEACH, Florida, Feb. 14, 2024 (GLOBE NEWSWIRE) — ARMOUR Residential REIT, Inc. (NYSE:ARR) (“ARMOUR” or the “Company”) today announced the Company’s preliminary unaudited fourth quarter 2023 (“Q4”) results and December 31, 2023 financial position.

ARMOUR’s Q4 2023 Results

Income attributable to common stockholders of $96.6 million or $1.96 per common share.
Net interest income of $5.8 million.
Distributable Earnings available to common stockholders of $52.4 million, which represents $1.07 per common share (see explanation of this non-GAAP measure and related Company comments on page 9).
Paid common stock dividends of $0.40 per share per month, or $1.20 per share for Q4 (As previously announced, the Company has adjusted its common stock dividend rate to $0.24 per share per month for Q1 2024, see page 11)

ARMOUR’s December 31, 2023 Financial Position

Book value per common share of $22.54 resulting from:

Book Value, September 30, 2023
$
21.73
 

Net Income per common share
 
1.96
 

Less: Common dividends per common share
 
(1.20
)

Equity Capital Activities, net
 
0.05
 

Book Value, December 31, 2023
$
22.54
 

Liquidity, including cash and unencumbered agency and U.S. government securities, of $657.0 million.
Agency mortgage-backed securities (“MBS”) portfolio totaled $11.5 billion, including To Be Announced (“TBA”) Security positions.
Repurchase agreements totaled $9.6 billion; 48.4% were with ARMOUR affiliate BUCKLER Securities LLC.
Debt to equity ratio of 7.6 to 1 (based on repurchase agreements divided by total stockholders’ equity). Implied leverage, including TBA Securities and forward settling sales and unsettled purchases was 8.0 to 1.
Interest Rate swap contracts totaled $6.8 billion of notional amount, representing 68% of total repurchase agreement and TBA Securities.

Book value per common share consisted of:

 
 
December 31, 2023
 
September 30, 2023

 
 
(in millions except per share)

Common stock, at par value – 48,798,954 and 48,995,384 shares outstanding, respectively
 
$
0.1
 
 
$
0.1
 

Additional paid-in capital
 
 
4,318.2
 
 
 
4,320.6
 

Cumulative distributions to stockholders
 
 
(2,220.6
)
 
 
(2,158.5
)

Accumulated net loss
 
 
(826.5
)
 
 
(926.1
)

Total Stockholders’ Equity
 
$
1,271.2
 
 
$
1,236.1
 

Less: liquidation preference – 7.00% Cumulative Redeemable Preferred C Stock – 6,846,978 shares outstanding
 
 
(171.2
)
 
 
(171.2
)

Equity Attributable to Common Stockholders
 
$
1,100.0
 
 
$
1,064.9
 

Book value per common share
 
$
22.54
 
 
$
21.73
 

 
 
 
 
 
 
 
 
 

The major drivers of the change in the Company’s financial position were:

 
 
Q4 2023
 
Q3 2023

 
 
(in millions)

Total Stockholders’ Equity – Beginning
 
$
1,236.1
 
 
$
1,283.0
 

Income (Loss)
 
 
 
 

Investment in securities:
 
 
 
 

Gain (Loss) on MBS
 
$
441.0
 
 
$
(474.8
)

Gain (Loss) on U.S. Treasury Securities
 
 
(48.6
)
 
 
5.4
 

Gain (Loss) on TBA Securities
 
 
(2.3
)
 
 
26.9
 

Amortization of prior unrealized losses
 
 
11.9
 
 
 
6.5
 

Gain (Loss) on interest rate swaps
 
 
(277.3
)
 
 
262.1
 

Gain (Loss) on futures contracts
 
 
(19.6
)
 
 
2.2
 

Net Interest Income
 
 
5.8
 
 
 
3.6
 

Total Expenses after fees waived (1)
 
 
(11.3
)
 
 
(11.1
)

Net Income (Loss)
 
$
99.6
 
 
$
(179.2
)

Preferred stock dividends
 
 
(3.0
)
 
 
(3.0
)

Common stock dividends
 
 
(59.0
)
 
 
(56.8
)

Capital Activities
 
 
 
 

Issuance of common stock
 
 
0.8
 
 
 
192.3
 

Common shares repurchased
 
 
(3.3
)
 
 
(0.2
)

Total Stockholders’ Equity – Ending
 
$
1,271.2
 
 
$
1,236.1
 

(1) The Company’s external manager has waived a portion of its contractual management fee at the rate of $1.65 million per quarter for each of Q4 and Q3 2023.

The following condensed financial statements are unaudited. The Company’s audited financial statements as of December 31, 2023 and December 31, 2022 and for the years in the three year period ended December 31, 2023, will be included in the Company’s Form 10-K to be filed with the SEC.

Condensed Balance Sheet
 
December 31, 2023
 
September 30, 2023
 
December 31, 2022

 
 
(in millions)

Assets
 
 
 
 
 
 

Cash
 
$
221.9
 
 
$
133.5
 
 
$
87.3
 

Cash collateral posted to counterparties
 
 
37.0
 
 
 
13.6
 
 
 
30.8
 

Agency Securities, at fair value
 
 
11,159.8
 
 
 
12,384.1
 
 
 
8,198.6
 

Receivable for unsettled sales
 
 

 
 
 
96.5
 
 
 

 

Derivatives, at fair value
 
 
877.4
 
 
 
1,231.1
 
 
 
984.4
 

Accrued interest receivable
 
 
47.1
 
 
 
54.4
 
 
 
28.8
 

Prepaid and other
 
 
1.2
 
 
 
1.0
 
 
 
2.1
 

Subordinated loan to BUCKLER
 
 

 
 
 

 
 
 
105.0
 

Total Assets
 
$
12,344.4
 
 
$
13,914.2
 
 
$
9,437.0
 

 
 
 
 
 
 
 

Liabilities
 
 
 
 
 
 

Repurchase agreements, net
 
$
9,648.0
 
 
$
11,504.2
 
 
$
6,463.1
 

Obligations to return securities received as collateral, at fair value
 
 
350.3
 
 
 

 
 
 
502.7
 

Cash collateral posted by counterparties
 
 
860.1
 
 
 
1,133.3
 
 
 
963.6
 

Payable for unsettled purchases
 
 
171.5
 
 
 

 
 
 
353.4
 

Derivatives, at fair value
 
 
5.0
 
 
 

 
 
 
13.0
 

Accrued interest payable- repurchase agreements
 
 
26.5
 
 
 
30.8
 
 
 
19.1
 

Accrued interest payable- U.S. Treasury Securities sold short
 
 
5.0
 
 
 

 
 
 
3.4
 

Accounts payable and other accrued expenses
 
 
6.8
 
 
 
9.8
 
 
 
6.4
 

Total Liabilities
 
$
11,073.2
 
 
$
12,678.1
 
 
$
8,324.7
 

 
 
 
 
 
 
 

Stockholders’ Equity
 
 
 
 
 
 

7.00% Cumulative Redeemable Preferred C Stock ($0.001 par value per share, $25.00 per share liquidation preference)
 
$

 
 
$

 
 
$

 

Common stock ($0.001 par value per share)
 
 
0.1
 
 
 
0.1
 
 
 
0.1
 

Additional paid-in capital
 
 
4,318.2
 
 
 
4,320.6
 
 
 
3,874.6
 

Cumulative distributions to stockholders
 
 
(2,220.6
)
 
 
(2,158.5
)
 
 
(1,992.4
)

Accumulated net loss
 
 
(826.5
)
 
 
(926.1
)
 
 
(758.5
)

Accumulated other comprehensive loss
 
 

 
 
 

 
 
 
(11.5
)

Total Stockholders’ Equity
 
 
1,271.2
 
 
 
1,236.1
 
 
 
1,112.3
 

Total Liabilities and Stockholders’ Equity
 
$
12,344.4
 
 
$
13,914.2
 
 
$
9,437.0
 

 
 
 
 
 
 
 
 
 
 
 
 
 

Condensed Statements of Operations
 
Q4 2023
 
Q3 2023

 
 
($ in millions except,
share and per share)

Interest Income
 
 
 
 

Interest Income
 
$
146.2
 
 
$
153.6
 

Interest expense
 
 
(140.4
)
 
 
(150.0
)

Net Interest Income
 
 
5.8
 
 
 
3.6
 

Other Income (Loss)
 
 
 
 

Gain (Loss) on Agency Securities, trading
 
 
452.9
 
 
 
(468.3
)

Gain (Loss) on U.S. Treasury Securities
 
 
(48.6
)
 
 
5.4
 

Gain (Loss) on derivatives, net
 
 
(299.2
)
 
 
291.2
 

Total Other Income (Loss)
 
 
105.1
 
 
 
(171.7
)

Expenses
 
 
 
 

Management fees
 
 
9.8
 
 
 
9.7
 

Compensation
 
 
1.3
 
 
 
1.3
 

Other Operating
 
 
1.9
 
 
 
1.8
 

Total Expenses
 
 
13.0
 
 
 
12.8
 

Less management fees waived
 
 
(1.7
)
 
 
(1.7
)

Total Expenses after fees waived
 
 
11.3
 
 
 
11.1
 

Net Income (Loss)
 
 
99.6
 
 
 
(179.2
)

Dividends on preferred stock
 
 
(3.0
)
 
 
(3.0
)

Net Income (Loss) available (related) to common stockholders
 
$
96.6
 
 
$
(182.2
)

 
 
 
 
 

Net Income (Loss) per share available (related) to common stockholders:
 
 
 
 

Basic
 
$
1.98
 
 
$
(3.92
)

Diluted
 
$
1.96
 
 
$
(3.92
)

Dividends declared per common share
 
$
1.20
 
 
$
1.20
 

Weighted average common shares outstanding:
 
 
 
 

Basic
 
 
48,886,375
 
 
 
46,506,373
 

Diluted
 
 
49,184,375