Armour Residential Reit Inc (ARR) Q3 2021 Earnings Call Transcript

Armour Residential Reit Inc (NYSE:ARR)
Q3 2021 Earnings Call
Oct 29, 2021, 8:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Hello, and welcome to the ARMOUR Residential REIT’s Third Quarter 2021 Earnings Conference Call. [Operator Instructions]

I’d now like to turn the conference over to your host today, Jim Mountain. Mr. Mountain, please go ahead.

James R. Mountain — Chief Financial Officer and Secretary

Thank you, Keith, and thanks to all of you for joining us this morning to discuss ARMOUR’s third quarter 2021 results. Today, I’m joined by ARMOUR’s co-CEOs, Scott Ulm and Jeff Zimmer; and our CIO, Mark Gruber. By now, everyone has access to ARMOUR’s earnings release, which can be found on ARMOUR’s website, www.armourreit.com. This conference call may contain statements that are not recitations of historical fact and, therefore, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All such forward-looking statements are intended to be subject to the safe harbor protections provided by the Reform Act.

Actual outcomes and results could differ materially from the outcomes and results expressed or implied by these forward-looking statements due to the impact of many factors beyond the control of ARMOUR. Certain factors that could cause actual results to differ materially from those contained in forward-looking statements are included in the Risk Factors section of ARMOUR’s periodic reports, which are filed with the Securities and Exchange Commission. Copies are available on the SEC’s website at www.sec.gov. All forward-looking statements made in this conference call are made as of today’s date only. They are subject to change without notice. We disclaim any obligation to update our forward-looking statements unless we’re required to do so by law. Also, our discussion today may include references to certain non-GAAP measures. A reconciliation of these measures to our most comparable GAAP measures are included in our earnings release, which can be found on ARMOUR’s website. An online replay of today’s conference call will be available on ARMOUR’s website shortly and will continue for one year.

ARMOUR continues to concentrate its portfolio activity in agency MBS for the foreseeable future. Quarter-end book value was $11.09 per common share, down $0.19 from the end of Q2 2021. This quarter-over-quarter decrease reflects spread widening across our MBS portfolio, which is likely the result of concerns over the increasingly imminent Fed taper and the ultimate direction of several stimulus and debt ceiling bills that continue to consume most of the Congressional calendar. While spread widening negatively impacts the current market value of our existing MBS portfolio, it also often represents improving opportunities for new MBS investments.

At September 30, ARMOUR’s…