ARR — ARMOUR Residential REIT, Inc.

ARMOUR Residential REIT Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics:

• Total Economic Return: 10.63% for Q4 2025.
• GAAP Net Income: $208.7 million, or $1.86 per share.
• Net Interest Income: $50.4 million.
• Distributable Earnings: $79.8 million, or $0.71 per common share.
• Book Value: Increased to $18.63 per share, up 6.5% from Q3 2025. Current estimate as of February 17, 2026, is $18.37 per share.
• Dividends: Monthly dividends of $0.24 per share, totaling $0.72 for the quarter.

2. Strategic Updates and Business Highlights:

• ARMOUR raised approximately $3.8 million from preferred stock and $138 million from common stock through at-the-market offerings, indicating active capital management.
• The portfolio grew over 10% from Q3 2025, with a focus on Agency MBS as a high-conviction investment due to favorable market conditions.
• The company maintains a strong liquidity position, with approximately 54% of total shareholders' equity.
• ARMOUR's mortgage assets now exceed $20 billion, with a focus on maintaining moderate leverage and a balanced portfolio.

3. Forward Guidance and Outlook:

• The management expects continued favorable conditions for MBS in 2026, driven by declining rate volatility and easing funding costs.
• Anticipation of further spread tightening and a steeper yield curve, which could enhance returns.
• The company aims to maintain a consistent dividend strategy while being cautious about capital deployment based on market conditions.

4. Bad News, Challenges, or Points of Concern:

• The risk of increased prepayment speeds due to lower mortgage rates, which could impact returns on the portfolio.
• The potential for government actions to lower mortgage rates may introduce complexities and affect profitability for GSEs, which could lead to wider spreads.
• The market's expectation of Fed rate cuts could create volatility, and the company is mindful of the sensitivity of refinancing activity to marginal declines in mortgage rates.

5. Notable Q&A Insights:

• Management indicated that future capital raising will depend on market conditions and investment opportunities.
• Incremental returns on new investments are projected to be around 15-16%, with potential for improvement if spreads tighten further.
• The administration's push for affordability measures may slow down, with the low-hanging fruit already addressed, potentially complicating future GSE actions.
• The company is strategically positioned to mitigate prepayment risks, with a significant portion of the portfolio in prepayment-protected assets.

Overall, ARMOUR Residential REIT reported a strong Q4 2025, with solid financial performance and a positive outlook for 2026, despite challenges related to prepayment risks and potential market volatility.