Financial snapshot: 2026-08-31. Research reviewed 2026-10-17. The annual earnings comparison is from 2026-10-17. The business and balance-sheet figures below relate to the reporting period shown.
The income-producing business
ARMOUR selects mortgage securities, finances them with short-term borrowing and uses hedges to manage part of the risk. These decisions work together because its return depends on the investment yield left after financing and other costs, including the effects of hedging.
A larger portfolio can collect more interest without producing more income for each common share. Growth becomes more useful for dividend support when the additional investments earn an attractive spread after costs, rather than simply making the balance sheet bigger.
ARMOUR Residential REIT, Inc.: financial statements and portfolio disclosures
The funding behind the assets
Most of ARMOUR's mortgage securities are financed through repurchase agreements, which are loans secured against those investments. ARMOUR keeps their economic ownership, but when a loan matures it must repay the lender or obtain agreement to renew at the rates then available.
This borrowing lets ARMOUR hold more income-producing assets than shareholders' capital alone would fund, while making refinancing a regular part of the business. The borrowed money expands the portfolio; the income left after its costs is what matters for the dividend.
ARMOUR Residential REIT, Inc.: financial statements and portfolio disclosures
Do earnings cover the dividend?
Annual earnings of $2.96 per share compare with $2.88 in annual dividends. Coverage is 102.78%. Earnings cover the payment in this update. Keep watching whether that support holds up.
We like the earnings support here. A steady or growing cushion would make the income case more comfortable.
Fly High update 2026-10-17
Interest-rate and yield-curve risk
ARMOUR's mortgage assets generally last longer than its borrowings, so rising rates can reduce both net interest income and asset values. Falling rates can create a different challenge by speeding up mortgage repayments and leaving the company to reinvest the proceeds at lower yields.
Lower rates are therefore not an automatic win for the dividend. Hedging is intended to soften some of these effects, but it does not remove every exposure, so a stronger income outlook would show the investment spread holding up as borrowing costs and repayment patterns change.
ARMOUR Residential REIT, Inc.: financial statements and portfolio disclosures
Financing and leverage risk
ARMOUR may have to provide more collateral when the mortgage securities securing its loans lose value. Renewing those loans also requires the lender's agreement, with the borrowing cost set by the rates available at renewal.
A fall in mortgage-security prices can therefore create a practical demand for collateral, not just a lower valuation on paper. Those demands and recurring loan renewals are reasons to assess liquidity separately from whether earnings cover the dividend.
ARMOUR Residential REIT, Inc.: financial statements and portfolio disclosures
Where the portfolio is invested
At August 31, 2026, the $22.665 billion portfolio comprised 87.4% fixed-rate agency pools, 6.5% agency CMBS, 3.5% net TBA positions and 2.6% Treasury longs.
Agency support addresses mortgage credit exposure. Leverage, financing costs, prepayments and changes in rates still affect income and capital.
ARMOUR September 2026 portfolio update, filed with SEC
The current agency-backed portfolio
The August 31, 2026 portfolio update lists $22.665 billion of portfolio exposure: 93.9% Agency securities, 3.5% net TBA positions and 2.6% U.S. Treasury long positions. The Agency total includes 87.4% fixed-rate pools and 6.5% Agency commercial mortgage securities.
Fly High assessment: This dated asset mix does not identify a new material direct mortgage-credit problem. Agency backing does not protect common shareholders against mortgage-price changes, leverage or financing costs.
ARMOUR September 2026 portfolio update, filed with SEC
Liquidity and short-term funding
At August 31, 2026, ARMOUR reported $1.334 billion of liquidity, equal to 50% of total capital, 7.5 times debt to equity and 7.9 times implied leverage. Repurchase financing had a weighted average remaining term of 22 days; affiliated BUCKLER Securities supplied 50.0% of that financing.
Fly High assessment: Liquidity is substantial, but frequent refinancing and the concentration with an affiliated counterparty require monitoring. The liquidity measure includes cash and unencumbered Agency and U.S. government securities; it is not all cash.
ARMOUR September 2026 portfolio update, filed with SEC
Common book value and share growth
Using the June 30, 2026 balance sheet, common book value was approximately $17.53 per share, compared with $18.63 at December 31, 2025. This calculation subtracts the reported Series C liquidation preference from total stockholders equity and divides by issued and outstanding common shares. Common shares increased from 111.915 million to 136.371 million.
Fly High assessment: Total capital increased, but calculated common capital per share declined. Watch the economics of new share issuance and future book value per share. These are calculations from the dated financial statements, not replacements for the published Fly High figures.
ARMOUR Residential REIT, Inc.: financial statements and portfolio disclosures
What would change the earnings picture?
Mortgage repayments deserve close attention because they influence both the yield ARMOUR earns and where it has to reinvest. If repayments accelerate and replacement securities offer lower yields, the spread supporting the dividend could narrow, leaving less room within the already thin earnings cushion.
