ARMOUR Residential REIT, Inc. Announces That Equity Proceeds Are Fully Invested

Jan 27, 2010, 13:55 ET from ARMOUR Residential REIT, Inc.

VERO BEACH, Fla., Jan. 27 /PRNewswire-FirstCall/ --

  • ARMOUR is 100% invested as of January 26, 2010.
  • ARMOUR has an Agency mortgage portfolio of $183.65 million
  • Gross asset duration is currently estimated at 2.09
  • Net balance sheet duration is currently estimated at 1.34
  • REPO borrowings total $169.64 million
  • Debt to equity ratio = 8.08x
  • Eurodollar Bundles to replicate swaps total $52.0 million
  • Cash on hand is approximately $5.2 million

ARMOUR Residential REIT, Inc. (NYSE Amex: ARR; ARR.WS) (the "Company") yesterday announced that it had completed investing the equity proceeds from its merger with Enterprise Acquisition Corporation. Co-Chief Executive Officer, Scott J. Ulm, commented, "The Agency mortgage market has presented our investment team with opportunities to invest at attractive yields for our shareholders. Substantially all of our investments have settled now and our repurchase agreements central to funding our portfolio are in place. We are pleased to be in a position to earn dividends for our shareholders and we expect to announce our first dividend during the first quarter of 2010."

Separately, ARMOUR announced they have moved into new office space at:

ARMOUR Residential REIT, Inc.

956 Beachland Boulevard Suite #11

Vero Beach, FL 32963

Main Phone Number; 772-617-4340

ARMOUR Residential REIT, Inc.

ARMOUR is a Maryland corporation focused on investing in residential mortgage-backed securities.  ARMOUR is externally managed and advised by ARMOUR RESIDENTIAL MANAGEMENT LLC ("ARRM").  ARMOUR intends to elect and qualify to be taxed as a real estate investment trust ("REIT") for U.S. federal income tax purposes, commencing with ARMOUR's taxable year ending December 31, 2009.

Safe Harbor

This press release includes "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995.  Actual results may differ from expectations, estimates and projections and, consequently, you should not rely on these forward looking statements as predictions of future events.  Words such as "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "believes," "predicts," "potential," "continue," and similar expressions are intended to identify such forward-looking statements.  These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results.

Additional information concerning these and other risk factors is contained in the Company's most recent filings with the Securities and Exchange Commission ("SEC").  All subsequent written and oral forward-looking statements concerning the Company is expressly qualified in their entirety by the cautionary statements above.  The Company cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made.  The Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in their expectations or any change in events, conditions or circumstances on which any such statement is based.

Additional Information and Where to Find It

Investors, security holders and other interested persons may find additional information regarding the company at the SEC's Internet site at http://www.sec.gov/,  www.armourreit.com or by directing requests to: ARMOUR Residential REIT, Inc., 956 Beachland Blvd., Suite #11, Vero Beach, Florida 32963, Attention: Investor Relations.

Investor Contact:

Jeffrey Zimmer

Co-Chief Executive Officer, President and Vice Chairman

ARMOUR Residential REIT, Inc.

(772) 617-4340

ARMOUR RESIDENTIAL REIT, Inc.

Portfolio Update

January 26, 2010

PLEASE READ: Important Regulatory and Yield Estimate Risk Disclosures

Certain statements made in this presentation regarding ARMOUR Residential REIT, Inc. (“ARMOUR” or the “Company”), and any other statements regarding ARMOUR’s future expectations, beliefs, goals or prospects constitute forward-looking statements made within the meaning of Section 21E of the Securities Exchange Act of 1934. Any statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “anticipates,” “expects,” “estimates” and similar expressions) should also be considered forward-looking statements. Forward-looking statements include but are not limited to statements regarding the projections for the ARMOUR business, and plans for future growth and operational improvements. A number of important factors could cause actual results or events to differ materially from those indicated by such forward-looking statements ARMOUR assumes no obligation to update the information looking statements. in this communication, except as otherwise required by law. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

This material is for information purposes only and does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation for any securities, financial instruments, or common or privately issued stock. The statements, information and estimates contained herein are based on information that the presenter believes to be reliable as of today's date, but cannot be represented that such statements, information or estimates are complete or accurate.

Actual realized yields, durations and net durations described herein will depend on a number of factors that cannot be predicted with certainly. Estimated yields do not reflect any of the costs of operation of ARMOUR.

ARMOUR Portfolio and Balance Sheet Highlights and Dividend and Earnings Update

  • Portfolio and Balance Sheet Highlights
  • ARMOUR is 100% invested as of January 26, 2010.
  • ARMOUR has an Agency mortgage portfolio of $183.65 million (1).
  • Gross asset duration is currently estimated at 2.09.
  • Net balance sheet duration is currently estimated at 1.34.
  • REPO borrowings total $169.64 million.
  • Debt to equity ratio (2) = 8.08x.
  • Eurodollar Bundles to replicate swaps total $52.0 million.
  • Cash on hand is approximately $5.2 million.
  • Dividend and Earnings Update
  • ARMOUR expects to declare a dividend prior to the end of the first quarter of 2010 payable within 30 days of that declaration.
  • ARMOUR will file its Form 10K for 2009 with the SEC in March 2010.

(1) Based on Agency asset purchase price and including those assets which have settled.

(2) Estimated book value per share at the time of the closing of the merger with Enterprise Acquisition Corporation, on 11/6/2009.

ARMOUR Portfolio Composition

    
    
                                         Investment
          Agency Asset Class          Amount Including     Percentage of
                                         Premium         Total Portfolio
    
    True ARMs (0-18 Months to Reset)   $21,502,395            11.7%
    Hybrids (< 19 Months to Reset)    $126,687,757            69.0%
    Seasoned 15 & 20 Year 
     Pass-Throughs                     $18,542,613            10.1%
    Low Loan Balance 15 Year 
     Pass-Throughs                     $16,919,018             9.2%
                      Total           $183,651,783           100.0%
    
    February Forward Settlement 
     Trades                            $15,242,364
    
                                        Investment
                                     Amount Including     Percentage of
               Agency Type               Premium         Total Portfolio    
    
    Freddie Mac                        $86,379,902            47.0%
    Fannie Mae                         $88,620,619            48.3%
    Ginnie Mae                          $8,651,262             4.7%
                    Total             $183,651,783           100.0%

ARMOUR Asset Class Composition

    
    
                         Weighted Average     Estimated      Estimated
       Agency Asset Class     Coupon            Yield    Effective Duration
    
    True ARMs (0-18 Months 
     to Reset)                 4.76%            2.00%         0.25
    Hybrids (19+ Months to 
     Reset; Ave = 59)          4.69%            3.00%         2.20
    Seasoned 15 & 20 Year 
     Pass-Throughs             4.92%            3.50%         2.60
    Low Loan Balance 15 Year 
     Pass-Throughs             4.97%            3.20%         3.06
                   Totals      4.74%            2.95%         2.09
    
    Yield and Duration estimates are derived from functions available from 
    Bloomberg Finance L.P.
    
    Yield and Duration estimates are derived using the asset purchase price.
    
    Actual realized yields, durations and net durations described herein will 
    depend on a number of factors that cannot be predicted with certainly. 
    Estimated yields do not reflect any of the costs of operation of ARMOUR.

ARMOUR Hybrid Composition and True ARM Composition

    
    
                             Investment
          Hybrid Index    Amount Including    Percentage of
                              Premium       Hybrid Portfolio
    
    1 Year CMT              $26,986,363           21.3%
    12 Month Libor          $93,019,933           73.4%
    6 Month Libor            $4,378,681            3.5%
    10 Yr CMT                $2,302,779            1.8%
                    Total  $126,687,756          100.0%
    
    Weighted Average Months to Reset                57
    
                             Investment
         True ARM Type    Amount Including    Percentage of
                              Premium       True ARM Portfolio
    
    MTA                      $4,861,322           22.6%
    6 Month CMT              $1,515,419            7.0%
    1 Year CMT               $3,438,959           16.0%
    6 Month Libor            $1,143,760            5.3%
    12 Month Libor          $10,158,539           47.2%
    COFI                       $384,396            1.8%
                   Total    $21,502,395          100.0%
    
    Weighted Average Months to Reset                 8

Eurodollar Composition (used to replicate swaps) and REPO Composition

    
    
                            
                                 Weighted Average               Weighted
    Eurodollar Bundles to           Swap Rate       Estimated   Average
      Replicate Swaps      Amount   Equivalent      Duration    Maturity
    
    Total, Weighted 
     Average            $52,000,000   1.83%           2.67     35.8 Months
    
                                                             Longest Maturity
                                                                 48 Months
    
                                                                  Weighted
                       Principal  Weighted Average                Average
          REPO         Borrowed       REPO Rate       Haircut     Maturity
    
    Total, Weighted 
     Average         $169,643,760     0.250%           5.15%      61 Days
    
                                                             Longest Maturity
                                                                 104 Days

SOURCE ARMOUR Residential REIT, Inc.



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http://www.armourreit.com