8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_____________

FORM 8-K

______________

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) December 13, 2019

ARMOUR Residential REIT, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Maryland	001-34766	26-1908763
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

3001 Ocean Drive, Suite 201
Vero Beach,	Florida	32963
(Address of Principal Executive Offices)		(Zip Code)

(772) 617-4340

(Registrant’s Telephone Number, Including Area Code)

n/a

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading symbols	Name of Exchange on which registered
Preferred Stock, 7.875% Series B Cumulative Redeemable	ARR-PB	New York Stock Exchange
Common Stock, $0.001 par value	ARR	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).        

Emerging growth company ☐

If an emerging growth company, indicate by a check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Item 7.01.    Regulation FD Disclosure.

On December 13, 2019, ARMOUR Residential REIT, Inc. (“ARMOUR”) produced for distribution a slide deck presentation, which contains updates on ARMOUR's financial position, business and operations. Attached as Exhibit 99.1 to this report is the slide deck presentation produced by ARMOUR.

The slide deck presentation attached to this report as Exhibit 99.1 is furnished pursuant to this Item 7.01 and shall not be deemed filed in this or any other filing of ARMOUR under the Securities Exchange Act of 1934, as amended, unless expressly incorporated by specific reference in any such filing.

Item 9.01.    Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
99.1	Slide Deck Presentation dated December 13, 2019
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: December 13, 2019

ARMOUR RESIDENTIAL REIT, INC.

By: /s/ Mark Gruber 

Name: Mark Gruber

Title: Chief Operating Officer

EX-99.1

ARMOUR RESIDENTIAL REIT, Inc. Company Update 12/13/19 ARMOUR seeks to create shareholder value through thoughtful investment and risk management that produces current yield and superior risk adjusted returns over the long term.  Our focus on residential real estate finance supports home ownership for a broad and diverse spectrum of Americans by bringing private capital into the mortgage markets.

PLEASE READ: Important Regulatory and Yield Estimate Risk Disclosures 2 • 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 ARMOUR’s 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 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 or financial instruments. The statements, information and estimates contained herein are based on information that the company believes to be reliable as of today's date unless otherwise indicated, 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 certainty. Estimated yields do not reflect any of the costs of operation of ARMOUR. • THE INFORMATION PRESENTED HEREIN IS UNAUDITED AND UNREVIEWED.

ARMOUR Overview 3 ARMOUR invests in and manages a leveraged portfolio of mortgage-related assets and U.S. government securities. 1 Capitalization • Total capitalization of $1,372.8 million composed of: ◦ Estimated book value of common stock of $1,184.8 million. ◦ Preferred stock par value of $187.9 million. 2 Dividend Policy • ARMOUR pays dividends monthly. • Since inception, ARR has paid out $1.6 billion in dividends.(1) 3 Shareholder Alignment • Returned $390 million through share repurchases and return of capital since May 2013, including $16.9 million in 2019. • Senior management has made open market purchases of $4.4 million of stock since 2016, including $1.8 million in 2019. 4 Transparency and Governance • Updated portfolio and liability details can be found monthly at www.armourreit.com. • Agency premium amortization is expensed monthly as it occurs.(2) • Hedge positions are marked-to-market daily (GAAP/Tax differences). • Non-Executive Board Chairman and separate Lead Independent Director. 5 ARMOUR REIT Manager • ARMOUR REIT is externally managed by ARMOUR Capital Management LP. (1) Includes both common and preferred stock dividends through November 2019. (2) Due to the prepayment lockout feature of our Agency multifamily securities, premium is amortized using a level yield methodology. Information as of 11/30/19

ARMOUR Key Metrics 4 Market Date 8/31/19 9/30/19 10/31/19 11/30/19 Common Stock Price $16.42 $16.75 $16.73 $17.26 Estimated Book Value $20.68 $20.43 $20.26 $20.11 Common Shares Outstanding 58,983,750 58,889,758 58,889,758 58,917,218 Preferred B Shares Outstanding 7,047,950 7,201,971 7,286,668 7,517,502 Portfolio Size (millions) $13,807 $12,752 $12,405 $12,211 Interest Rate Swap Notional (millions) $6,675 $7,075 $7,225 $7,825 Repurchase Agreements (millions) $12,488 $11,679 $10,790 $10,961 Net TBA Positions (millions) 286 (32) 69 (442) Debt-to-Equity 9.0x 8.5x 7.8x 8.0X Implied Leverage including TBAs 9.1x 8.4x 7.9X 7.7X (1) Rates DV01 $166,000 $619,000 $890,000 $667,000 Spread DV01(2) $5,755,000 $5,859,000 $5,937,000 $6,047,000 Net Balance Sheet Duration 0.12 0.49 0.72 0.55 Liquidity(3) (millions) $557 $598 $624 $630 FNCL 3.0 Price $102.00 $101.56 $101.63 $101.42 FNCL 3.5 Price $102.80 $102.64 $102.69 $102.67 2 Year Treasury Yield 1.51% 1.62% 1.53% 1.61% 5 Year Treasury Yield 1.39% 1.55% 1.52% 1.63% 10 Year Treasury Yield 1.50% 1.67% 1.69% 1.78% 2 Year OIS Swap Rate 1.23% 1.36% 1.29% 1.36% 5 Year OIS Swap Rate 1.05% 1.25% 1.24% 1.36% 10 Year OIS Swap Rate 1.12% 1.33% 1.36% 1.47% 1. Rates DV01 is the dollar value change for a parallel shift of 1 basis point change in interest rates. 2. Spreads DV01 is the dollar value change for a 1 basis point change in option adjusted spreads. 3. Liquidity positions include cash and unlevered securities.

ARMOUR Net Interest Margin 5 Net Interest Margin Analysis 4 3 Asset Yield Cost of Funds NIM Q1 2017 2.93% 1.32% 1.61% t Q2 2017 3.11% 1.39% 1.72% n e c Q3 2017 3.06% 1.42% 1.64% r 2 e P Q4 2017 3.02% 1.47% 1.55% Q1 2018 3.05% 1.53% 1.52% 1 Q2 2018 3.13% 1.57% 1.56% Q3 2018 3.46% 1.82% 1.64% Q4 2018 3.59% 1.92% 1.67% Q1 2019 3.65% 2.03% 1.62% 0 2 2 2 2 2 2 2 2 2 2 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 Q2 2019 3.70% 2.30% 1.40% 0 1 2 3 4 5 6 7 8 9 Q3 2019 3.56% 2.25% 1.31% Asset Yield Cost of Funds Net Interest Margin

ARMOUR Portfolio 6 Estimated % of Current Value Weighted Average Weighted Average Weighted Average Effective Securities Portfolio (millions) Book Price Market Price Net/Gross Coupon Duration Agency ARMs & Hybrids 0.3% $38.3 104.8% 103.4% 3.84/4.45 0.90 Agency Multifamily Ballooning in 120 Months or Less 23.2% $2,830.2 101.8% 107.9% 3.45/4.51 6.34 Agency Fixed Rates Maturing Between 0 and 180 Months 9.2% $1,122.4 102.7% 106.3% 4.00/4.60 3.15 Agency Fixed Rates Maturing Between 181 and 240 Months 0.0% $2.9 107.9% 107.1% 4.25/5.20 3.59 Agency Fixed Rates Maturing Between 241 and 360 Months 63.9% $7,797.2 102.4% 104.8% 3.85/4.48 2.11 Agency Portfolio 96.6% $11,791.0 102.3% 105.6% 3.77/4.50 3.22 Agency 30Y TBA Long Positions 4.9% $596.3 99.2% 99.4% 2.59/ N/A 4.44 Agency 30Y TBA Short Positions (8.5)% $(1,038.0) 103.7% 103.8% 4.00/ N/A -1.11 Net TBA Positions (3.6)% $(441.7) Legacy Non-Agency Assets 0.5% $64.7 74.3% 82.2% 5.56/4.77 2.13 New Issue Prime Fixed Non-Agency 0.1% $16.0 94.9% 100.9% 3.68/3.96 4.22 Credit Risk Transfer 6.4% $781.2 99.6% 106.4% 5.89/4.09 -2.07 Credit Risk & Non-Agency Portfolio 7.1% $862.0 97.1% 104.0% 5.82/4.14 -1.63 Total Portfolio 100.0% $12,211.3 101.7% 105.4% 3.84/4.40 3.12 • Approximately 90% of ARMOUR's Agency portfolio (excluding TBA positions) benefits from favorable prepayment characteristics, including: ◦ 24% have prepayment penalties (DUS). ◦ 49% have loan balances less than or equal to 225k. ◦ 17% have loan-to-value ratios greater than 95%, FICO scores of less than 700 or seasoning of greater than 24 months. Information as of 11/30/2019. Portfolio value is based on independent third-party pricing. Information includes estimates of the effect of forward settling trades. Some totals may not foot due to rounding.

ARMOUR Hedge & Financing Composition 7 Interest Rate Swaps Remaining Term (Months) 0-12 13-24 25-36 37-48 49-60 61-72 73-84 85-96 97-108 109-120 Total Weighted Average Remaining Term (Months) 5 14 33 39 53 61 76 84 — 119 50 Notional Amount (millions) $975 $1,000 $1,000 $1,025 $1,600 $175 $50 $1,000 — $1,000 $7,825 • Approximately 84% of ARMOUR's Interest Rate Swap Positions are pay fixed and receive Fed Funds with a weighted average remaining term of 52 months. • Approximately 13% of ARMOUR's Interest Rate Swap Positions are pay fixed and receive 3-Month Libor with a weighted average remaining term of 39 months. • Approximately 3% of ARMOUR's Interest Rate Swap Positions are pay fixed and receive SOFR with a weighted average remaining term of 60 months. Repurchase Agreements Principal Weighted Weighted Average Longest Borrowed % of Repo Positions Average Original Remaining Term in Remaining Repo Counterparty (millions) with ARMOUR Term in Days Days Term in Days BUCKLER Securities LLC (1) $5,070.4 46.3% 49 21 66 All Other Counterparties (2) $5,890.1 53.7% 68 38 66 Total or Weighted Average Repo Positions $10,960.5 100% 59 30 Agency Repo Principal $10,361.1 Non-Agency Repo Principal $599.4 Weighted Average Repo Rate 2.02% Weighted Average Haircut 5.1% (1) Affiliated with ARMOUR. (2) ARMOUR has signed MRAs with 49 counterparties and is currently active with 25 of them. Information as of 11/30/2019. Some totals may not foot due to rounding.

ARMOUR Portfolio Constant Prepayment Rates ("CPR") 8 Trailing Twelve Month Portfolio CPR* 25 20 15 10 5 0 8 9 9 9 9 9 9 9 9 9 9 9 9 1 1 1 1 1 1 1 1 1 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2 2 2 r y y h il y e ly st r r r r e ar ar rc r a n u u e e e e b u u a p M u J g b b b b m n r A J u m to m m ce a b M A te c ve ce e J Fe p O o e D Se N D Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 CPR 4.2 3.9 3.7 4.1 5.5 7.7 8.8 8.4 14.5 17.0 18.6 18.5 14.3 *On 12/5/19 the most recent prepayment data was released. Constant Prepayment Rate ("CPR") is the annualized equivalent of single monthly mortality ("SMM"). CPR attempts to predict the percentage of principal that will prepay over the next twelve months based on historical principal pay downs. CPR is reported on the 4th business day of the month for the previous month's prepayment activity.

ARMOUR Residential REIT, Inc. 3001 Ocean Drive Suite 201 Vero Beach, FL 32963 armourreit.com 772-617-4340

XML

Cover Document	Dec. 13, 2019
Document Information [Line Items]
Document Type	8-K
Document Period End Date	Dec. 13, 2019
Entity Registrant Name	ARMOUR Residential REIT, Inc.
Entity Incorporation, State or Country Code	MD
Entity File Number	001-34766
Entity Tax Identification Number	26-1908763
Entity Address, Address Line One	3001 Ocean Drive, Suite 201
Entity Address, City or Town	Vero Beach,
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	32963
City Area Code	772
Local Phone Number	617-4340
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0001428205
Amendment Flag	false
Series B Preferred Stock
Document Information [Line Items]
Title of 12(b) Security	Preferred Stock, 7.875% Series B Cumulative Redeemable
Trading Symbol	ARR-PB
Security Exchange Name	NYSE
Common Stock
Document Information [Line Items]
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	ARR
Security Exchange Name	NYSE