ARMOUR Residential REIT, Inc. reported its fourth‑quarter 2025 earnings, posting a total economic return of 10.63% for the quarter and 12.79% for the full year. The company’s earnings per share were $0.71, falling short of the $0.77 consensus estimate by 7.8%, while revenue totaled $101.7 million, a 31.5% miss against the $148.38 million expected by analysts.
The quarter’s results were driven by a 60% growth in the investment portfolio, fueled by $878 million of capital raised during 2025 that was deployed to acquire agency mortgage‑backed securities. Management noted that the company benefited from tightening MBS spreads, lower volatility, and a lower interest‑rate environment, all of which helped support the strong economic return.
Management emphasized a disciplined, liquidity‑first strategy. CEO Scott Ulm said, "2025 was a good year for ARMOUR with total economic return of 12.79% and our Q4 2025 total economic return was 10.63%. In 2025 we grew our investment portfolio by approximately 60%, as we deployed $878 million of capital raised during the year by acquiring MBS. In 2025 and Q4 we benefited from MBS spreads tightening, lower MBS volatility and a lower interest rate environment. Our approach remains to grow and deploy capital thoughtfully when we see opportunities, maintain robust liquidity, and dynamically adjust hedges for disciplined risk management. We are confident in our positioning, strategy, and ability to deliver value for shareholders."
The company’s portfolio is heavily weighted toward agency MBS, accounting for 97% of holdings, with a small allocation to U.S. Treasury securities. A management fee waiver of $1.65 million per quarter was applied, improving net income. Despite the portfolio expansion, the revenue miss indicates challenges in translating asset growth into expected earnings, while the EPS miss reflects the combined impact of lower revenue and higher operating costs.
ARMOUR maintained its monthly common dividend of $0.24 per share, though analysts have noted concerns about long‑term sustainability if market conditions deteriorate. The firm’s leverage remains high, with a debt‑to‑equity ratio of 7.94:1 and an implied leverage of 8.07:1, typical for mortgage REITs but indicative of potential risk exposure.
Market reaction to the earnings was modestly positive, with a slight pre‑market uptick driven by an 6.5% increase in book value per share to $18.63, the strong economic return, significant portfolio growth, and robust liquidity of $1.2 billion. These fundamentals helped offset the earnings and revenue misses, suggesting investors are focusing on the company’s asset performance and strategic positioning rather than short‑term profitability fluctuations.
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