ARMOUR Residential REIT, Inc. (NYSE:ARR) Q3 2022 Earnings Conference Call October 27, 2022 8:00 AM ET

Company Participants

Jim Mountain – Chief Financial Officer

Scott Ulm – Co-Chief Executive Officer

Jeff Zimmer – Co-Chief Executive Officer

Mark Gruber – Chief Investment Officer

Conference Call Participants

Doug Harter – Credit Suisse

Trevor Cranston – JMP Securities

Jason Stewart – JonesTrading

Christopher Nolan – Ladenburg Thalmann

Matthew Howlett – B. Riley

Operator

Good morning, and welcome to the ARMOUR Residential REIT’s Third Quarter 2022 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Jim Mountain, Chief Financial Officer. Please go ahead.

Jim Mountain

Thank you, Drew, and thank you all for joining our call to discuss ARMOUR Residential REIT’s third quarter 2022 results. This morning I’m joined by ARMOUR’s Co-CEOs, Scott Ulm and Jeff Zimmer and by Mark Gruber, our CIO. By now, everyone has access to ARMOUR’s earnings release, which can be found on ARMOUR’s website, www.armourreit.com.

This conference call includes forward-looking statements, which are intended to be subject to the Safe Harbor protections provided by the Private Securities Litigation Reform Act of 1995. The Risk Factors section of ARMOUR’s periodic reports filed with the Securities and Exchange Commission describe certain factors beyond ARMOUR’s control that could cause actual results to differ materially from those expressed or implied in these forward-looking statements.

Those periodic filings can be found on the SEC’s website at www.sec.gov. All of today’s forward-looking statements are subject to change without notice. We disclaim any obligation to update them unless required by law. Also, today’s discussion refers to certain non-GAAP measures. These measures are reconciled with comparable GAAP measures in our earnings release. An online replay of this conference call will be available on ARMOUR’s website shortly and will continue for one year.

Net interest margin for the quarter was 2.21%, the decrease of 1 basis point compared to Q2 2022. ARMOUR’s Q3 comprehensive loss related to common shareholders was $155.7 million, which includes $144.3 million of GAAP net loss. Distributable earnings available to common shareholders was $38.8 million or $0.32 per common share.

This non-GAAP measure is based on historical cost and excludes gains or losses from security sales and early terminations of derivatives, as well as market value adjustments. It does include TBA Drop Income. ARMOUR paid monthly common dividends of $0.10 per common share during the quarter and has announced dividends at that rate for October and November 2022.