VERO BEACH, Florida, Oct. 26, 2022 (GLOBE NEWSWIRE) — ARMOUR Residential REIT, Inc. (NYSE: ARR and ARR PRC) (“ARMOUR” or the “Company”) at present introduced the Company’s Q3 outcomes and September 30, 2022 monetary place.
ARMOUR’s Q3 2022 Results
- Comprehensive loss associated to widespread stockholders of $(155.7) million or $(1.26) per widespread share.
- Distributable Earnings obtainable to widespread stockholders of $38.8 million, which represents $0.32 per widespread share (see clarification of this non-GAAP measure on web page 3).
- Paid widespread inventory dividends of $0.10 per share per 30 days.
- Raised $167.2 million of capital by issuing 22,733,043 shares of widespread inventory at $7.36 web proceeds per share, after charges and bills, by on the market providing program.
- Repurchased 780,000 shares of widespread inventory, at a median value of $4.96 per share, pursuant to current authorization.
- Net curiosity earnings of $25.1 million and web curiosity margin of two.21%, down 1 foundation factors from the prior quarter.
ARMOUR’s September 30, 2022 Financial Position
- Book worth per widespread share of $5.83.
- Liquidity, together with money and unencumbered company and U.S. authorities securities, of $469.3 million.
- Portfolio composition was 96.3% Agency mortgage-backed securities (“MBS”), web of To Be Announced (“TBA”) Security quick positions and 3.7% U.S. Treasury Securities.
- Debt to fairness ratio of 8.7 to 1 (based mostly on repurchase agreements divided by whole stockholders’ fairness). Leverage, web of TBA Security quick positions, was 7.8 to 1. Implied leverage, adjusted for ahead settling gross sales and unsettled purchases, was 7.3 to 1.
- Interest Rate swap contracts totaled $6.5 billion of notional quantity, representing 90% of whole repurchase settlement and TBA Securities liabilities.
| Book Value, June 30, 2022 | $ | 7.25 | ||
| Comprehensive loss per widespread share | (1.26 | ) | ||
| Less: Common dividends per widespread share | (0.30 | ) | ||
| Capital Raising Activities, web | 0.14 | |||
| Book Value, September 30, 2022 | $ | 5.83 |
Book worth per widespread share consisted of:
| September 30, 2022 | ||||
| (in hundreds of thousands besides per share) | ||||
| Common inventory – 132,589,725 shares excellent | $ | 0.1 | ||
| Additional paid-in capital | 3,701.9 | |||
| Cumulative distributions to stockholders | (1,945.4 | ) | ||
| Accumulated web loss | (797.9 | ) | ||
| Accumulated different complete loss | (14.6 | ) | ||
| Total Stockholders’ Equity | $ | 944.1 | ||
| Less: liquidation choice – 7.00% Cumulative Redeemable Preferred C Stock – 6,846,978 shares excellent | (171.2 | ) | ||
| Equity Attributable to Common Stockholders | $ | 772.9 | ||
| Book worth per widespread share | $ | 5.83 | ||
The main drivers of the change within the Company’s monetary place throughout Q3 have been:
| Q3 2022 | ||||
| (in hundreds of thousands) | ||||
| Total Stockholders’ Equity – Beginning | $ | 972.7 | ||
| Comprehensive Income (Loss) | ||||
| Investment in securities (1) | ||||
| Loss on MBS | $ | (536.0 | ) | |
| Loss on U.S. Treasury Securities | (16.2 | ) | ||
| Loss on TBA Securities | (11.5 | ) | ||
| Amortization of prior unrealized losses | 9.2 | |||
| Interest fee swaps | ||||
| Net curiosity earnings | 23.6 | |||
| Gains | 314.5 | |||
| Amortization of prior unrealized good points | (33.3 | ) | ||
| Futures contracts (1) | 81.5 | |||
| Net Interest Income | 25.1 | |||
| Total Expenses after charges waived (2) | (9.6 | ) | ||
| Total Comprehensive Loss | $ | (152.7 | ) | |
| Capital Activities | ||||
| Issuance of widespread inventory | 168.2 | |||
| Common inventory repurchases | (3.9 | ) | ||
| Dividends | (40.2 | ) | ||
| Total Stockholders’ Equity – Ending | $ | 944.1 | ||
(1) Includes each realized and unrealized good points and losses.
(2) The Company’s exterior supervisor has waived a portion of its contractual administration charge on the fee of $0.65 million per 30 days till additional discover.
| Condensed steadiness sheet info: | September 30, 2022 | |||
| (in hundreds of thousands) | ||||
| Assets | ||||
| Cash | $ | 290.8 | ||
| Cash collateral posted to counterparties | 17.0 | |||
| Investments in securities, at truthful worth: | ||||
| Agency Securities | 8,014.1 | |||
| U.S. Treasury Securities | 274.2 | |||
| Receivable for unsettled gross sales | 1,091.9 | |||
| Derivatives, at truthful worth | 1,087.5 | |||
| Accrued curiosity receivable | 31.7 | |||
| Prepaid and different | 3.0 | |||
| Subordinated mortgage to BUCKLER | 105.0 | |||
| Total Assets | $ | 10,915.2 | ||
| Liabilities: | ||||
| Repurchase agreements | $ | 8,250.1 | ||
| Cash collateral posted by counterparties | 1,000.4 | |||
| Payable for unsettled purchases | 682.6 | |||
| Derivatives, at truthful worth | 7.1 | |||
| Accrued curiosity payable- repurchase agreements | 20.2 | |||
| Accounts payable and different accrued bills | 10.7 | |||
| Total Liabilities | 9,971.1 | |||
| Stockholders’ Equity: | ||||
| 7.00% Cumulative Redeemable Preferred C Stock ($0.001 par worth per share, $25.00 per share liquidation choice) – 6,846,978 shares excellent | $ | — | ||
| Common inventory ($0.001 par worth per share) – 132,589,725 shares excellent: | 0.1 | |||
| Additional paid-in capital | 3,701.9 | |||
| Cumulative distributions to stockholders | (1,945.4 | ) | ||
| Accumulated web loss | (797.9 | ) | ||
| Accumulated different complete loss | (14.6 | ) | ||
| Total Stockholders’ Equity | 944.1 | |||
| Total Liabilities and Stockholders’ Equity | $ | 10,915.2 | ||
Distributable Earnings, Including TBA Drop Income
Distributable Earnings (outlined in additional element beneath) is a non-GAAP measure outlined as web curiosity earnings plus TBA Drop Income minus hedging prices and web working bills. Distributable Earnings differs from GAAP whole complete loss, which embrace good points and losses and market worth changes as described beneath. For a portion of its Agency Securities the Company might enter into TBA ahead contracts for the acquisition or sale of Agency Securities at a predetermined worth, face quantity, issuer, coupon and said maturity on an agreed-upon future date, however the explicit Agency Securities to be delivered aren’t recognized till shortly earlier than the TBA settlement date. The Company accounts for TBA Agency Securities as spinoff devices whether it is fairly potential that it’ll not take or make bodily supply of the Agency Securities upon settlement of the contract. The Company might select, previous to settlement, to maneuver the settlement of those securities out to a later date by getting into into an offsetting quick or lengthy place (known as a “pair off”), web settling the paired off positions for money, and concurrently buying or promoting an analogous TBA Agency Security for a later settlement date. This transaction is usually known as a “dollar roll.” The Company accounts for TBA greenback roll transactions as a sequence of spinoff transactions.
Forward settling TBA contracts usually commerce at a reduction, or “Drop,” to the common settled TBA contract to replicate the anticipated curiosity earnings on the underlying deliverable Agency Securities, web of an implied financing value, which might have been earned by the customer if the contract settled on the following common settlement date. When the Company enters into TBA contracts to purchase Agency Securities for ahead settlement, it earns this “TBA Drop Income,” as a result of the TBA contract is actually a leveraged funding within the underlying Agency Securities. The quantity of TBA Drop Income is calculated because the distinction between the spot worth of comparable TBA contracts for normal settlement and the ahead settlement worth on the commerce date. The Company typically accounts for TBA contracts as derivatives and TBA Drop Income is included as a part of the periodic modifications in truthful worth of the TBA contracts that the Company acknowledges at the moment within the Other Income (Loss) part of its Consolidated Statement of Operations.
Regulation G Reconciliation
Distributable Earnings, together with TBA Drop earnings, excludes good points or losses from securities gross sales and early termination of derivatives, market worth changes (together with impairments) and sure non-recurring bills. The Company believes that Distributable Earnings and Distributable Earnings per widespread share are helpful to traders as a result of our Board of Directors considers Distributable Earnings and Distributable Earnings per widespread share when figuring out the extent of dividends on our widespread inventory. Distributable Earnings and Distributable Earnings per widespread share are usually extra steady over time and this follow is designed to extend the soundness of our widespread inventory dividend from month to month. However, as a result of Distributable Earnings is an incomplete measure of the Company’s monetary efficiency and entails variations from whole complete earnings (loss) computed in accordance with GAAP, Distributable Earnings needs to be thought-about as supplementary to, and not as an alternative to, the Company’s whole complete earnings (loss) computed in accordance with GAAP as a measure of the Company’s monetary efficiency.
The components of ARMOUR’s Distributable Earnings and Distributable Earnings per widespread share and a reconciliation of these quantities to the Company’s Total Comprehensive Loss and Comprehensive loss per widespread share seem beneath:
| Q3 2022 (unaudited) |
||||
| (in hundreds of thousands) | ||||
| Net Interest Income | $ | 25.1 | ||
| TBA Drop Income | 2.7 | |||
| Net curiosity earnings on rate of interest swaps | 23.6 | |||
| Total Expenses after charges waived | (9.6 | ) | ||
| Distributable Earnings | $ | 41.8 | ||
| Dividends on Preferred Stock | (3.0 | ) | ||
| Distributable Earnings obtainable to widespread stockholders | $ | 38.8 | ||
| Distributable Earnings per widespread share | $ | 0.32 | ||
| Distributable Earnings | $ | 41.8 | ||
| Loss on MBS | (536.0 | ) | ||
| Loss on U.S. Treasury Securities | (16.2 | ) | ||
| Loss on TBA Securities, much less TBA Drop Income | (14.2 | ) | ||
| Amortization of prior unrealized web good points | (24.1 | ) | ||
| Unrealized acquire on rate of interest swaps | 314.5 | |||
| Futures contracts | 81.5 | |||
| Total Comprehensive Loss | $ | (152.7 | ) | |
| Dividends on Preferred Stock | (3.0 | ) | ||
| Comprehensive loss associated to widespread stockholders | $ | (155.7 | ) | |
| Comprehensive loss per widespread share | $ | (1.26 | ) | |
| Weighted common widespread shares excellent – 123,250,643 | ||||
Dividends
ARMOUR paid month-to-month money dividends of $0.10 per share of the Company’s widespread inventory for every month in Q3 2022. ARMOUR pays widespread inventory dividends of $0.10 per share on October 28, 2022 to holders of document on October 17, 2022. ARMOUR beforehand introduced the November widespread inventory dividends of $0.10 per share to be paid on November 28, 2022 to holders of document on November 15, 2022. ARMOUR’s Board of Directors will decide future widespread dividend charges based mostly on an analysis of the Company’s outcomes, monetary place, actual property funding belief (“REIT”) tax necessities, and general market situations because the quarter progresses. In order to take care of ARMOUR’s tax standing as a REIT, the Company is required to well timed distribute considerably all of its extraordinary REIT taxable earnings for the tax 12 months.
ARMOUR paid month-to-month money dividends of $0.14583 per share of the Company’s Series C Preferred Stock for every month in Q3 2022. ARMOUR pays Series C Preferred Stock dividends of $0.14583 per share on October 27, 2022 to holders of document on October 15, 2022. ARMOUR beforehand introduced the November and December Series C Preferred Stock dividends of $0.14583 per share to be paid on November 28, 2022 and December 27, 2022 to holders of document on November 15, 2022 and December 15, 2022, respectively.
The Company expects that for 2022, all widespread inventory dividends and Series C Preferred Stock dividends will likely be handled for federal earnings tax functions as a return of capital and not at the moment taxable. For 2023, the Company forecasts that Series C Preferred Stock dividends for 2023 will probably be handled as absolutely taxable extraordinary earnings. Common dividends for 2023 will probably be handled, not less than partially, as taxable extraordinary earnings.
Conference Call
As beforehand introduced, the Company will present a web based, real-time webcast of its convention name with fairness analysts masking Q3 2022 working outcomes on Thursday, October 27, 2022, at 8:00 a.m. (Eastern Time). The reside broadcast will likely be obtainable on-line and could be accessed at https://event.choruscall.com/mediaframe/webcast.html?webcastid=LLz3tYEG. To monitor the reside webcast, please go to the web site not less than quarter-hour previous to the beginning of the decision to register, obtain, and set up any essential audio software program. An on-line replay of the occasion will likely be obtainable on the Company’s web site at www.armourreit.com and proceed for one 12 months.
ARMOUR Residential REIT, Inc.
ARMOUR invests primarily in mounted fee residential, adjustable fee and hybrid adjustable fee residential mortgage-backed securities issued or assured by U.S. Government-sponsored enterprises or assured by the Government National Mortgage Association. ARMOUR is externally managed and suggested by ARMOUR Capital Management LP, an funding advisor registered with the Securities and Exchange Commission (“SEC”).
Safe Harbor
This press launch contains “forward-looking statements” throughout the which means of the protected harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Actual outcomes might differ from expectations, estimates and projections and, consequently, you shouldn’t depend on these forward-looking statements as predictions of future occasions. Words equivalent to “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and related expressions are meant to establish such forward-looking statements. These forward-looking statements contain important dangers and uncertainties that would trigger the precise outcomes to vary materially from the anticipated outcomes. Additional info regarding these, the influence of the COVID-19 pandemic on the Company’s operational and monetary efficiency and different threat elements are contained within the Company’s most up-to-date filings with the SEC. All subsequent written and oral forward-looking statements regarding the Company are expressly certified of their entirety by the cautionary statements above. The Company cautions readers to not place undue reliance upon any forward-looking statements, which communicate solely as of the date made. The Company doesn’t undertake or settle for any obligation or endeavor to launch publicly any updates or revisions to any forward-looking statements to replicate any change in its expectations or any change in occasions, situations or circumstances on which any such assertion is predicated, besides as required by legislation.
Additional Information and Where to Find It
Investors, safety holders and different individuals might discover ARMOUR’s most up-to-date Company Update and further info concerning the Company on the SEC’s web website at www.sec.gov, or the Company web site at www.armourreit.com or by directing requests to: ARMOUR Residential REIT, Inc., 3001 Ocean Drive, Suite 201, Vero Beach, Florida 32963, Attention: Investor Relations.
