ARMOUR Residential REIT, Inc.

Overview

ARMOUR Residential REIT, Inc. is an externally managed Maryland corporation that raises private capital to invest in mortgage-backed securities (MBS) and related assets. The company focuses on fixed-rate MBS backed by residential loans and holds MBS guaranteed by government-sponsored entities (Fannie Mae, Freddie Mac), Ginnie Mae, and U.S. Treasuries.

Investment strategy

• Primary investments: fixed-rate residential MBS.
• Additional investments: MBS backed by fixed-rate, hybrid adjustable-rate, and adjustable-rate home loans; unsecured notes and bonds issued by GSEs; U.S. Treasury securities.
• Asset mix is intended to balance prepayment risk, duration, and liquidity.

Portfolio and risk management

• Uses repurchase agreements (repo borrowings) to finance a portfolio several times stockholders’ equity.
• Employs derivatives (interest-rate swaps, basis swaps, swaptions, futures, caps/floors, options) to manage interest-rate risk; all derivatives’ fair values flow through current earnings.
• Repurchase borrowings are secured with collateral and typically range from about 6x to 10x stockholders’ equity.

REIT status and regulatory framework

• Operates as a Real Estate Investment Trust (REIT) under the Internal Revenue Code and distributes at least 90% of REIT taxable income to stockholders to maintain REIT status.
• Excluded from the Investment Company Act of 1940 under Section 3(c)(5)(C) and subject to specific 55%/80% asset tests for qualifying and real estate-related assets.

Governance and ESG

• Investment manager: ARMOUR Capital Management LP (ACM) handles day-to-day operations, asset selection, hedging, and financing decisions.
• The board oversees governance and ESG initiatives; the Nominating and Corporate Governance Committee supervises ESG efforts.

Ownership, management, and structure

• ARMOUR is externally managed by ACM under a management agreement through December 31, 2029, with automatic five-year renewals unless non-renewed.
• ACM is paid a monthly management fee calculated on gross equity raised rather than on performance.
• ARMOUR has no employees; ACM personnel provide all services. ACM reported 20 employees providing services to ARMOUR as of February 17, 2026.
• Potential conflicts of interest exist between ARMOUR and ACM or ACM’s affiliates; allocation of investment opportunities is governed by ACM’s allocation policy.

Fees and management commitments (as of December 31, 2025)

• Effective management fee (before waivers) based on gross equity raised: 0.89%; after ACM waived fees: 0.77%.
• Gross equity raised (base for fee calculation): $5,366,343 thousand.
• Annualized management fee: $47,747 thousand (2.11% of stockholders’ equity of $2,261,053 thousand).
• Contractual management fee commitments for 2026–2029: $47,748 thousand per year (total $190,992 thousand).
• ACM waived management fees in 2025 totaling $6,600; the voluntary waiver ended effective February 1, 2026.

Funding, counterparties, and related entities

• BUCKLER Securities LLC: ARMOUR owns 10.8% of BUCKLER. BUCKLER provided $250 million in additional regulatory capital and was the primary placement agent for ARMOUR’s ATM program.
• BUCKLER accounted for approximately 47.0% of ARMOUR’s repurchase financing at December 31, 2025; BUCKLER’s “amount at risk” represented about 7.1% of ARMOUR’s stockholders’ equity.
• BUCKLER relies on FINRA/FICC funding; ARMOUR maintains funding relationships with 21 other counterparties (22 total including BUCKLER) to diversify funding sources.
• On-demand subordinated loans to BUCKLER: up to $200,000 thousand (extended to 3/20/2027) and an additional $50,000 thousand (through 2/28/2028), secured by ARMOUR assets and pledged collateral.

Financial and capital highlights (end of 2025)

• Stockholders’ equity: $2,261,053 thousand.
• Gross equity raised: $5,366,343 thousand.
• Repurchase borrowing generally 6–10 times stockholders’ equity; borrowings are secured with collateral subject to haircuts.
• Common stock authorized: 63,085 thousand shares.
• Preferred stock authorized: 42,952 thousand shares.
• Repurchase program availability: 866 thousand common shares and 2,000 thousand Series C preferred shares available for repurchase.

Dividend policy and capital programs

• Distributions are tied to taxable income and determined at the board’s discretion; there is no guaranteed minimum dividend.
• The company discusses return of capital components and tax reporting implications.
• ARMOUR has used an ATM program since 2020; in 2025, 62% of common shares issued through the ATM were placed by BUCKLER.

Operations and office

• Principal office: 3001 Ocean Drive, Suite 201, Vero Beach, FL 32963.
• ARMOUR does not employ staff directly and relies on ACM for operational offices and services.

Summary

ARMOUR Residential REIT, Inc. is an externally managed REIT that invests primarily in fixed-rate residential MBS guaranteed by GSEs or backed by U.S. Treasuries. The portfolio is financed with leveraged repurchase borrowings and hedged with derivatives. ACM manages investment and operational decisions under a fee structure tied to gross equity raised. As of year-end 2025, ARMOUR reported stockholders’ equity of $2.26 billion and gross equity raised of $5.37 billion, with notable financing involvement from BUCKLER and relationships with multiple funding counterparties.