ARMOUR Residential REIT, Inc. Reports Financial Results for The Quarter Ended September 30, 2016

VERO BEACH, Florida, Nov. 02, 2016 (GLOBE NEWSWIRE) -- ARMOUR Residential REIT, Inc. (NYSE: ARR, ARR PrA, and ARR PrB) ("ARMOUR" or the "Company") today announced financial results for the quarter ended September 30, 2016.

Q3 2016 Highlights and Financial Information
  • Q3 2016 key results:
    • $118.7 million ($3.13 per Common share) net income under Generally Accepted Accounting Principles ("GAAP")
    • $28.9 million ($0.68 per Common share) Core Income including "drop income" (as defined below), which represents an annualized return of 10.2% based on stockholders' equity at the beginning of the quarter
    • 8.57% increase in book value per common share
    • $0.66 per share Common dividends for Q3 at the rate of $0.22 per month
    • 2.69% average yield on assets and 1.44% average net interest margin
    • 10.93% annualized average principal repayment rate ("CPR")
    • 36,746,000 (approximately) weighted average diluted Common shares outstanding
  • At September 30, 2016:
    • $1.22 billion stockholders' equity
    • $27.87 stockholders' equity per Common share
    • $8.1 billion portfolio of mortgage securities, including $1.0 billion of Non-Agency Securities
    • $2.7 billion notional amount of ("to-be-announced") TBA Agency Securities
    • $4.9 billion notional amount of interest rate swaps
    • 6.03 to 1 "leverage" (debt to stockholders' equity)
      • 8.28 to 1 "implied leverage," reflecting TBA Agency Securities purchased forward and excluding debt related to forward settling sales
    • $625.9 million of liquidity in cash and unpledged securities (51.29% of stockholders' equity)
    • Stock outstanding:
      • 36,713,354 shares of Common Stock
      • 2,180,572 shares of Series A Cumulative Redeemable Preferred
      • 5,650,000 shares of Series B Cumulative Redeemable Preferred

Updated Information
  • Common dividends per share - $0.22 paid on October 27, 2016, and $0.22 declared by the Company's board of directors for November, as discussed below
  • Book value at October 31, 2016, was estimated to be $27.71 per Common share
  • Additional updated information on the Company's investment, financing and hedge positions can be found in ARMOUR Residential REIT, Inc.'s most recent "Company Update." ARMOUR posts unaudited and unreviewed Company Updates each month on

GAAP Net IncomeFor the purposes of computing GAAP net income (loss), the change in fair value of the Company's derivatives is reflected in current period net income, while the change in fair value of its Agency Securities is reflected in its statement of comprehensive income (loss). GAAP net income for Q3 2016 was approximately $118.7 million, including mark-to-market gains on derivatives and Non-Agency Securities of $25.8 million and $40 million, respectively, and $19.8 million of realized gains on derivatives

Core Income, Including Drop IncomeCore Income, including drop income, for the quarter ended September 30, 2016, was approximately $28.9 million, exceeding total dividends paid in the quarter. "Core Income" represents a non-GAAP measure and is defined as net income excluding impairment losses, gains or losses on sales of securities and early termination of derivatives, unrealized gains or losses on derivatives and certain non-recurring expenses, plus drop income (as defined below). Core Income may differ from GAAP net income, which includes the unrealized gains or losses of the Company's derivative instruments and the gains or losses on Agency, Non-Agency and Interest-only Securities.

The Company may enter into to-be-announced ("TBA") dollar roll transactions that generate "drop income." Drop income is defined as the difference in price between two TBA contracts with the same terms but different settlement dates. Drop income is the economic equivalent of the assumed net interest spread (yield less financing costs) and is calculated as the difference between the spot price for regular settlement and the forward settlement price on the trade date.

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