VERO BEACH, Florida, April 25, 2024 (GLOBE NEWSWIRE) -- ARMOUR Residential REIT, Inc. (NYSE:ARR) ("ARMOUR" or the "Company") today announced the Company's unaudited Q1 results and March 31, 2024 financial position.
ARMOUR's Q1 2024 Results
- GAAP net income available to common stockholders of $11.5 million or $0.24 per common share.
- Net interest income of $5.3 million.
- Expenses included $9.0 million of non-recurring professional fees related to the Special Committee internal investigation, disclosed in our most recent Annual Report on Form 10-K.
- Distributable Earnings available to common stockholders of $40.4 million, which represents $0.82 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 5.36%.
- Economic interest income was 4.83% less economic interest expense of 3.02% for an economic net interest spread of 1.81% (see explanation of this non-GAAP measure on page 6).
- Paid common stock dividends of $0.24 per share per month, or $0.72 per share for Q1.
ARMOUR's March 31, 2024 Financial Position
- Book value per common share of $22.07 resulting from:
Book Value, December 31, 2023 | $ | 22.54 | |
Net Income per common share | 0.24 | ||
Less: Common dividends per common share | (0.72 | ) | |
Equity Capital Activities, net | 0.01 | ||
Book Value, March 31, 2024 | $ | 22.07 |
- Liquidity, including cash and unencumbered agency and U.S. government securities, of $659.3 million.
- Agency mortgage-backed securities ("MBS") portfolio totaled $10.9 billion.
- Repurchase agreements, net totaled $8.7 billion; 56.2% were with ARMOUR affiliate BUCKLER Securities LLC.
- Debt to equity ratio of 6.94:1 (based on repurchase agreements divided by total stockholders' equity). Implied leverage, including TBA Securities and forward settling sales and unsettled purchases was 7.07:1.
- Interest Rate swap contracts totaled $7.2 billion of notional amount, representing 83% of total repurchase agreement and TBA Securities.
Book value per common share consisted of:
March 31, 2024 | December 31, 2023 | ||||||
(in millions except per share) | |||||||
Common stock, at par value - 48,751,806 and 48,798,954 shares outstanding, respectively | $ | 0.1 | $ | 0.1 | |||
Additional paid-in capital | 4,317.9 | 4,318.2 | |||||
Cumulative distributions to stockholders | (2,258.9 | ) | (2,220.6 | ) | |||
Accumulated net loss | (812.0 | ) | (826.5 | ) | |||
Total Stockholders' Equity | $ | 1,247.1 | 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 | $ | 1,075.9 | $ | 1,100.0 | |||
Book value per common share | $ | 22.07 | $ | 22.54 |
The major drivers of the change in the Company's financial position were:
Q1 2024 | Q4 2023 | ||||||
(in millions) | |||||||
Total Stockholders' Equity – Beginning | $ | 1,271.2 | $ | 1,236.1 | |||
Income (Loss) | |||||||
Investment in securities: | |||||||
Gain (Loss) on MBS | $ | (137.7 | ) | $ | 452.9 | ||
Gain (Loss) on U.S. Treasury Securities | 10.9 | (48.6 | ) | ||||
Loss on TBA Securities | (4.3 | ) | (2.3 | ) | |||
Gain (Loss) on interest rate swaps | 160.7 | (277.3 | ) | ||||
Loss on futures contracts | — | (19.6 | ) | ||||
Net Interest Income | 5.3 | 5.8 | |||||
Total Expenses after fees waived (1) | (20.4 | ) | (11.3 | ) | |||
Net Income | $ | 14.5 | $ | 99.6 | |||
Preferred stock dividends | (3.0 | ) | (3.0 | ) | |||
Common stock dividends | (35.3 | ) | (59.0 | ) | |||
Capital Activities | |||||||
Issuance of common stock | 1.0 | 0.8 | |||||
Common shares repurchased | (1.3 | ) | (3.3 | ) | |||
Total Stockholders' Equity – Ending | $ | 1,247.1 | $ | 1,271.2 |
(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 Q1 2024 and Q4 2023.
Condensed Balance Sheet (unaudited) | March 31, 2024 | December 31, 2023 | |||||
(in millions) | |||||||
Assets | |||||||
Cash | $ | 221.3 | $ | 221.9 | |||
Cash collateral posted to counterparties | 38.2 | 37.0 | |||||
Agency Securities, at fair value | 10,905.9 | 11,159.8 | |||||
Receivable for unsettled sales | 36.0 | — | |||||
Derivatives, at fair value | 959.7 | 877.4 | |||||
Accrued interest receivable | 46.2 | 47.1 | |||||
Prepaid and other | 1.0 | 1.2 | |||||
Total Assets | $ | 12,208.3 | $ | 12,344.4 | |||
Liabilities | |||||||
Repurchase agreements, net | $ | 8,654.1 | $ | 9,648.0 | |||
Obligations to return securities received as collateral, at fair value | 1,101.6 | 350.3 | |||||
Cash collateral posted by counterparties |