Seeking Alpha

Armour beats estimates; reports sizable decline in book value

  • Armour Residential (ARR) Q4 core EPS of $0.15 beats by $0.02.
  • End of year book value per share of $4.75 falls 9.7% from $5.26 at the end of Q3. Today's closing price of $4.34 is an 8.6% discount to Dec. 31 book.
  • Average net interest margin of 1.6% is up 36 basis points from Q3 as CPR falls to 4.8% from 8.8%.
  • Leverage of 6.92:1 is about unchanged from Q3. $4B of agency paper sold during Q4 leaving portfolio size of $14.6B vs. $16.7B in Q3. Company continues to shorten duration in 2014, selling $5.5B of 25-year and 30-year fixed rate mortgages thus far this year, leaving $1.3B of 30-years left to be sold. $3.7B of 15-year mortgages have been purchased.
  • 13.375M shares repurchased during quarter at an average price of $3.89 each.
  • Press release
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