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

Jul 25, 2019 • 08:00 am ET

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

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Q & A
Executive
Jeffrey J. Zimmer

good.

So, really happy with redeeming those, you may have noted in Jim's comments in the press release as well, that we have sold on our ATM program, a modest amount of the Series B, which has a 7 and 7-8's [Phonetic] coupon. And we've also noted that we spent that believe $11 million plus, maybe $13 million buying back some shares as well, which reduces our need to reinvest. So, I hope that answers your question there perhaps a little more lengthy that you anticipated.

Analyst
Douglas Harter

I guess just to drill down on the comment that the dividend reflects kind of what you expect to earn. So, I guess if we were to look at kind of 3Q relative to 2Q. I mean, I guess do you expect more margin compression from speed increases? More funding pressures? I guess just trying to understand kind of this, what else is kind of the sequential pressures on earnings also kind of given the capital actions that you highlighted, which do seem positive?

Executive
Jeffrey J. Zimmer

Yeah, Doug precisely on the amount of amortization expense. We expect repayments to go up again for the month that will be revealed out of first week in August and we expect them to be slightly up again for September. However, we expected to receive from there due to seasonal reasonings and the fact that you've gone through a recycle, a refinance cycle, that you're going to see a little bit of burn out on.

So, we put the $0.17 there, why to be stable with that based on the amortization expense that we see for the next couple of months? I just can't see repayment rates going up in November and December and January from where we're going to see in September, which should be towards the height of the cycle.

Analyst
Douglas Harter

Great. Thank you.

Executive
Jeffrey J. Zimmer

Thank you.

Operator
Operator

The next question comes from the line of Trevor Cranston with JMP Securities. Please proceed.

Analyst
Trevor Cranston

All right, thanks. Good morning. One quick follow-up on the question of prepayments in the rate of amortization for 3Q. So, obviously we can see were prepaid estimated for July. Can you give some numbers around, where you're thinking, what they're likely to come in for the August and September reports?

Executive
Jeffrey J. Zimmer

Yeah, good morning. Trevor, it's Jeff. Hey Mark, you want to discuss our estimates for the next couple of months relative to where that we've just had.

Executive
Mark Richard Gruber

Sure. So, we expect in the next month here up 25% or so. And then, in September, you know, up maybe, from flat to up maybe 10% or so. And that's what we're using in our estimates based on what we see in our portfolio characteristics. And like Jeff said from there, we think things will moderate, but again it all is going to depend on what the curve look like and what the Fed does.

Analyst
Trevor Cranston

Got you. Okay.

Executive
Jeffrey J. Zimmer

Trevor one thing I would notice, our exposure to adjustable rate arms is de minimis. So as a result, when you