ARMOUR Residential REIT Inc (NYSE:ARR) Q2 2019 Earnings Conference Call - Final Transcript

Jul 25, 2019 • 08:00 am ET


ARMOUR Residential REIT Inc (NYSE:ARR) Q2 2019 Earnings Conference Call - Final Transcript


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James Robert Mountain

of the issued and outstanding shares of our 8.25% Series A Cumulative Redeemable Preferred Stock. That redemption is effective tomorrow July 26, 2019. It will be redeemed at $25 per share or an aggregate of $54.5 million.

Holders of record on July 15, 2019 of the Series A Preferred Stock will be entitled to receive their full monthly dividend for July, which will be the final dividend for this series, it will be paid with the -- in the regular course of business on July 29, 2019. Through July 12, 2019, we've issued 338,152 shares of our 7 and 78 [Phonetic] Series B Cumulative Redeemable Preferred Stock under our Preferred B ATM Sales program. We also established a 2019 Series B Preferred Stock Dividend Reinvestment and Stock Purchase Plan or DRIP as we call it. The DRIP plan allows current and new shareholders to invest directly in our Series B Preferred Stock including direct investments and reinvestments of dividend. For more information, or to enroll in the Series B DRIP, please visit our website.

ARMOUR's quarter end agency portfolio consisted of over $13.6 billion of mortgage-backed securities. In Q2, we sold all of our TBA position interest-only securities and U.S. Treasury. Quarter end book value was $20.50 per common share, down 3.7% for the quarter. That reflects our loss on our interest rate contracts, partially offset by gains on our agency securities, net of hedging and the excess of core income over dividends paid.

As of July 23, 2019, we estimate our GAAP book value to be $20.71 per common share outstanding. Remember that we include recent book value estimates in our update presentation available on our website or EDGAR, usually around the middle of the following month. We paid dividends of $0.19 per common share during each month of the second quarter of 2019, for a total of $34.2 million, or $0.57 per common share.

Yesterday we announced monthly common dividends at the rate of $0.17 per share for August 2019 and previously announced July dividend, which will be paid at that same rate next Monday, the 29th.

Now let me turn the call over to Co-Chief Executive Officer, Scott Ulm to discuss ARMOUR's portfolio position and our current credit. Scott?

Scott J. Ulm

Thanks, Jim. Good morning. Series of a global recession reverberated throughout the world in the second quarter of 2019, a sharp declines in global trade volumes and manufactured data further dim the economic outlook. May 2019 produced a risk off month for stocks and spread products, something by sharp rally in treasury yields.

A potential market meltdown similar to the fourth quarter of last year force the Fed to abandon its on hold position and favorable more flexible monetary policy combat plunging inflation expectations and shaky real growth.

The Fed's verbal commitment to the global risk markets, however, the spread between 3-month LIBOR and the 10-year treasury yield remain firmly in negative territory, signifying that actions speak louder than words. Therefore we anticipate the Federal Reserve Bank will