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ARR, ARMOUR Residential REIT Inc.
ARMOUR Residential REIT Inc. market and Interest Rate Trends and the Effect on our Securities Portfolio 2025 Trends In 2025, the U.S. administration introduced tariffs on imports from a broad set of countries in the first half of the year, including Canada, Mexico, European Union member states, Japan and China.
Federal Reserve Actions At the Federal Reserve Open Market Committee meeting on October 29, 2025, the Fed lowered the target range for the Federal Funds Rate by 0.25% to 3.75% from 4.00%.
Financial markets will likely be highly sensitive to the Fed's interest rate decisions, its bond purchasing and balance sheet holding decisions, as well as its communication.
The business
What it sells, where the money comes from, the kind of company it is.
The business in brief
read the 10-K →What this business is and what moves its needle, from its own SEC filings.
- What moves the needle
- Net interest margin, loan losses, and book value. A lender is read on the quality of its balance sheet, not an earnings multiple, and the worst year of credit losses matters more than the best. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
Every line is arithmetic on the company's filings, shown in full in the sections below.
The record
Ten years of arithmetic, read across the cycle.
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
Is it a good business?
- Return on equity 14%StrongNet income $323M ÷ equity $2.3BIndustry peers: median 9%
What this means
The bank's north star, what it earns on shareholders' capital. Cost of equity is roughly 10%, so a return durably above that builds value and below it destroys it. One year is noisy; the durability across a full credit cycle is what counts.
- SolidNet income ÷ (equity − goodwill $0 − intangibles $0)Industry peers: median 9%
What this means
The cleaner return, stripping out the goodwill paid for past acquisitions. This is the number a buyer of the whole bank actually earns on the hard capital.
- Not enough data
What this means
Noninterest expense or revenue missing.
Is it sound?
- Capital (equity / assets) 10.8%Well capitalizedEquity $2.3B ÷ assets $21.0B
What this means
A plain-English leverage read: how much of the balance sheet is the owners' own money. This is a rough proxy; the regulatory figure is the CET1 ratio, which is risk-weighted and reported in the filing. The point is the same, how much loss the bank can absorb before depositors are at risk.
- Borrowed against bookAssets $21.0B ÷ equity $2.3B
What this means
A mortgage REIT finances a pool of mortgages with borrowed money — mostly short-term repo, which sits in liabilities rather than as tagged debt — so its true leverage is the whole balance sheet against the owners' equity, not just labeled debt. That leverage magnifies both the spread it earns and the loss when rates or credit move against it; read it beside the book value, the question being whether the spread compensated for the leverage through a cycle.
- Credit cost —Not enough data
What this means
Provision or net interest income missing.
Does AI threaten the moat?
Low contestabilityThe moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.
The filing raises AI among its risks, but in other terms (security, regulation, energy or the like), not as a competitor to its product.
AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat.
Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.
All figures as filed; the source filing is linked above.
Management, ownership & pay
read the proxy →From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.
| Fiscal year | Chief executive | Pay, as filed | “Actually paid” | Net income |
|---|---|---|---|---|
| 2021 | Jeffrey J. Zimmer | $2.0M | $1.8M | — |
| 2021 | Scott J. Ulm | $2.0M | $1.8M | — |
| 2023 | Jeffrey J. Zimmer | $1.7M | $706k | — |
| 2023 | Scott J. Ulm | $1.7M | $706k | — |
Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Net income is the whole business's, as filed, for the same fiscal years.
- Insider ownership<1%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
Peers, REITs — Specialty & Diversified
The same industry, side by side on the bank lens. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.
| Company | Revenue | ROE | ROTCE | Efficiency | NII / assets |
|---|---|---|---|---|---|
| TRTXTPG RE Finance Trust Inc. | $146M | 6% | 6% | — | 2.4% |
| KREFKKR Real Estate Finance Trust Inc. | $113M | 0% | 0% | — | 2.4% |
| ARRARMOUR Residential REIT Inc. | $158M | 14% | 14% | — | 0.8% |
| RWTRedwood Trust Inc. | $155M | -7% | -7% | — | 0.3% |
| ADAMAdamas Trust Inc. | $149M | 10% | 11% | — | 1.2% |
| DXDynex Capital Inc. | $114M | 13% | 13% | — | 0.7% |
| ORCOrchid Island Capital Inc. | $108M | 12% | 12% | — | 0.9% |
| CIMChimera Investment Corporation | $266M | 9% | 9% | — | 1.7% |
| Group median | — | 10% | 10% | — | 1.1% |
The price
What a price has to assume.
What the price implies
reverse-DCFA reit / real estate isn't read on an owner-earnings DCF; its economics live on the balance sheet (book value, the return earned on it, and the cash the assets throw off).
Manual order: ← ARQT its page in the Manual ARRY →
Industry order: ← ARI the REITs — Specialty & Diversified chapter AVB →