ARMOUR Residential REIT, Inc. Announces Q3 Results and September 30, 2024 Financial Position
VERO BEACH, Florida, Oct. 23, 2024 (GLOBE NEWSWIRE) -- ARMOUR Residential REIT, Inc. (NYSE:ARR) ("ARMOUR" or the "Company") today announced the Company's unaudited Q3 results and September 30, 2024 financial position.
ARMOUR's Q3 2024 Results
GAAP net income available to common stockholders of $62.9 million or $1.21 per common share.
Net interest income of $1.8 million.
Distributable Earnings available to common stockholders of $52.0 million, which represents $1.00 per common share (see explanation of this non-GAAP measure on page 4).
Average interest income on interest earning assets of 4.89% and interest cost on average interest bearing liabilities of 5.51%.
Economic interest income was 4.44% less economic interest expense of 2.44% for an economic net interest spread of 2.00% (see explanation of this non-GAAP measure on page 6).
Raised $129.4 million of capital by issuing 6,413,735 shares of common stock through an at the market offering program.
Paid common stock dividends of $0.24 per share per month, or $0.72 per share for Q3.
ARMOUR's September 30, 2024 Financial Position
Book value per common share of $20.76. See the table below for a reconciliation since June 30, 2024.
Book Value, June 30, 2024
$
20.30
Net Income per common share
1.21
Less: Common dividends per common share
(0.72
)
Equity Capital Activities, net
(0.03
)
Book Value, September 30, 2024
$
20.76
Total economic return, which is change in book value for the period plus common dividends paid for the quarter, was 5.81% for Q3 2024 up from (4.76)% for Q2 2024.
Liquidity, including cash and unencumbered agency and U.S. government securities, of $667.4 million.
Agency mortgage-backed securities ("MBS") portfolio totaled $12.4 billion.
Repurchase agreements, net totaled $10.2 billion; 41.4% were with ARMOUR affiliate BUCKLER Securities LLC.
Debt to equity ratio of 7.74:1 (based on repurchase agreements divided by total stockholders' equity). Implied leverage, including forward settling sales and unsettled purchases was 8.18:1.
Interest Rate swap contracts totaled $6.7 billion of notional amount.
Company Update
At the close of business on October 21, 2024:
Common stock outstanding of 55,760,266 shares.
7.00% Cumulative Redeemable Preferred C Stock ("Series C Preferred Stock") with liquidation preference totaling approximately $171.2 million.
Liquidity, including cash and unencumbered securities, exceeded $489 million. MBS principal and interest receivable due October 25, 2024 totaled $141.9 million.
Securities portfolio included approximately $12.1 billion of Agency MBS (including TBA Securities).
Through October 15, 2024 raised $11.1 million of capital by issuing 567,720 shares of common stock through an at the market offering program.
Debt to equity ratio (based on repurchase agreements divided by total stockholders' equity) and Implied leverage, including TBA Agency Securities and forward settling sales were both 8.6 to 1.
Book value per common share consisted of:
September 30, 2024
December 31, 2023
(in millions except per share)
Common stock, at par value - 55,192,546 and 48,798,954 shares outstanding, respectively
$
0.1
$
0.1
Additional paid-in capital
4,448.8
4,318.2
Cumulative distributions to stockholders
(2,337.6
)
(2,220.6
)
Accumulated net loss
(794.4
)
(826.5
)
Total Stockholders' Equity
$
1,316.9
$
1,271.2
Less: liquidation preference - 7.00% Cumulative Redeemable Preferred C Stock - 6,846,978 shares outstanding
(171.2
)
(171.2
)
Equity Attributable to Common Stockholders
$
1,145.7
$
1,100.0
Book value per common share
$
20.76
$
22.54
The major drivers of the change in the Company's financial position were:
Q32024
Q2 2024
(in millions)
Total Stockholders' Equity, Beginning
$
1,161.3
$
1,247.1
Income (Loss)
Investment in securities:
Gain (Loss) on MBS
$
306.1
$
(112.9
)
Gain (Loss) on U.S. Treasury Securities
(21.7
)
19.2
Gain on TBA Securities
39.1
23.2
Gain (Loss) on interest rate swaps
(232.6
)
30.1
Loss on futures contracts
(16.4
)
(3.6
)
Net Interest Income
1.8
7.0
Total Expenses after fees waived(1)
(10.4
)
(11.3
)
Net Income (Loss)
$
65.9
$
(48.3
)
Preferred stock dividends
(3.0
)
(3.0
)
Common stock dividends
(37.5
)
(35.3
)
Capital Activities
Issuance of common stock
130.2
0.8
Total Stockholders' Equity, Ending
$
1,316.9
$
1,161.3
(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 Q3 2024 and Q2 2024.
Condensed Balance Sheet (unaudited)
September 30, 2024
December 31, 2023
(in millions)
Assets
Cash
$
63.9
$
221.9
Cash collateral posted to counterparties
134.2
37.0
Agency Securities, at fair value
12,422.8
11,159.8
Derivatives, at fair value
731.8
877.4
Accrued interest receivable
49.0
47.1
Prepaid and other
2.8
1.2
Total Assets
$
13,404.5
$
12,344.4
Liabilities
Repurchase agreements, net
$
10,186.4
$
9,648.0
Obligations to return securities received as collateral, at fair value
522.7
