ARR

MKT CAP $1.8BP/E 3.2DIV YIELD 22.70%FCF YIELD —REV TTM —NET INCOME $430.9MNET CASH —52W 12.28 – 19.12NEXT EARNINGS Oct 28 EST.SEC XBRL · TTM TO Invalid Date

How ARR rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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New in FY2025

The portion of the dividends on our common and preferred stock which represented non-taxable return of capital was 19.6% in 2025, 14.8% in 2024 and 47.5% in 2023.
At December 31, 2025, we had approximately $(313,284) in tax deductible expense relating to previously terminated interest rate swap, treasury futures contracts and treasury shorts amortizing through the year 2040.
Business Compliance with NYSE Corporate Governance Standards We comply with the corporate governance standards of the NYSE.
In acquiring MBS, we compete with numerous mortgage REITs, mortgage finance and specialty finance companies, savings and loan associations, banks, mortgage bankers, insurance companies, mutual funds, institutional investors, investment banking firms, other lenders, governmental bodies and other entities.
As of February 17, 2026, ACM had 20 employees that provide services to us.
Risk Factors You should consider carefully all of the risks described below together with the other information contained in this Annual Report on Form 10-K, before making a decision to invest in our securities.
U.S. dollar and share amounts are presented in thousands, except per share amounts or as otherwise noted.
Risk Factors Page Risk Factor Summary ARMOUR’s MBS investments rely heavily on financial leverage, magnifying our interest rate and spread risks 8 ARMOUR actively issues new shares and may redeem outstanding shares of its common and preferred stock 8 ARMOUR is externally managed by ACM 8 We and equity analysts consider Distributable Earnings as a measure of ARMOUR’s investment performance 9 Our affiliate BUCKLER is our largest financing counterparty and placement agent under our at-the-market ("ATM") offering program 9 General risks common to ARMOUR and our peer mortgage REITs 9 ARMOUR Residential REIT, Inc.
Risk Factors Risk Factor Summary ARMOUR’s MBS investments rely heavily on financial leverage, magnifying our interest rate and spread risks: • Changes in interest rates impact our level of net interest income, total comprehensive income (loss) and stockholders' equity and we cannot always successfully mitigate such interest rate risks; • Volatility in the relationships between the market prices and yields for our securities and certain benchmark prices and interest rates periodically will adversely affect our net income, earnings per share and stockholders' equity; • Fed monetary policy significantly influences interest rates and short-term financing availability; • U.S.
Should GSEs lose that status or go fully private it could cause extreme market volatility and depressed prices on Agency Securities; • The use of derivative instruments may fail to protect or could adversely affect us; • During stressful market conditions, we have sold and may in the future be forced to sell MBS at distressed prices, thereby potentially incurring permanent equity losses; and • We have credit exposure to our financing and derivative counterparties for the value of our collateral they hold in excess of our current liabilities.
ARMOUR actively issues new shares and may redeem outstanding shares of its common and preferred stock : • We have issued and may in the future issue shares of our common stock in “at the market” offerings or underwritten “block” offerings, which may adversely impact the market price of our stock and result in dilution to existing stockholders; • We may issue stock when investment opportunities are relatively less attractive; and • We may repurchase our common and preferred stock at prices below book value, to the potential disadvantage of selling stockholders.
As a result, ACM's annualized contractual management fee rate as of December 31, 2025 equaled 2.11% of stockholders' equity; • The termination of the management agreement may be difficult and costly; • The management agreement with ACM will automatically renew for an additional 5-year term unless ARMOUR gives 180-day written notice of non-renewal; and • The management agreement was not negotiated on an arm’s-length basis and the terms, including fees payable, may not be as favorable to us as if they were negotiated with an unaffiliated third-party.
Risk Factors We and equity analysts consider Distributable Earnings as a measure of ARMOUR’s investment performance : • Distributable Earnings is a non-GAAP measure which excludes gains and losses, and therefore is an imperfect measure of our overall financial performance, and is not a standardized metric; and • Distributable Earnings may not provide sufficient incentive to ACM to maximize risk adjusted returns on our investment portfolio.
Our affiliate BUCKLER is our largest financing counterparty and placement agent under our ATM offering program : • A material portion of our aggregate repurchase financing is facilitated through BUCKLER; • We hold a 10.8% equity ownership interest in BUCKLER and additionally, provided BUCKLER with $250 million in additional regulatory capital; • BUCKLER relies primarily on bilateral and triparty repurchase agreement funding through the FICC; • BUCKLER is the primary placement agent for ARMOUR's common share ATM Program; • BUCKLER may pursue business opportunities with third parties; and • There are potential conflicts of interest in our relationship with ACM and its affiliates, including BUCKLER, which could result in decisions that are not in the best interests of our stockholders.
Risk Factors ARMOUR’s MBS investments rely heavily on financial leverage, magnifying our interest rate and spread risks: Changes in interest rates impact our level of net interest income, total comprehensive income (loss) and stockholders' equity and we cannot always successfully mitigate such interest rate risks.
Our MBS have maturities ranging from 5 to 30 years (although average lives are much shorter due to amortization and prepayments).
Congress, or changes in the credit rating of the U.S. government, the United Kingdom, or one or more Eurozone nations; however, increased uncertainty or changes in the economic outlook for, or rating of, the creditworthiness of the U.S. government, the United Kingdom, or Eurozone and Asian nations may have adverse impacts on, among other things, the U.S. economy, financial markets, the cost of borrowing, the financial strength of counterparties we transact business with, and the value of assets we hold.
Volatility in the relationships between the market prices and yields for our securities and certain benchmark prices and interest rates periodically will adversely affect our net income, earnings per share and stockholders' equity.
This variation in the “spread” relationship among the market yields, and therefore prices, of different instruments can result in our hedging positions being not as effective as normally ARMOUR Residential REIT, Inc.
Risk Factors would be expected, exposing us to the risk of unexpected volatility in our net income, earnings per share, and total stockholders’ equity.
Management's Discussion and Analysis, "Federal Reserve Actions" for further discussion.
Market volatility and concerns about recession have raised concerns that the GSEs may need additional capital to meet their obligations as guarantors.
The actual or anticipated action or inaction on U.S. fiscal policy matters, including the U.S. debt ceiling, could result in a ARMOUR Residential REIT, Inc.
Risk Factors wide range of negative economic effects, including increased financial market and interest rate volatility and wider market spreads between mortgage assets and benchmark interest rates.
Tariff actions by the U.S and other countries may adversely affect our business, financial condition and results of operations.
The current U.S. administration has implemented tariffs on imports from a broad set of countries, including Canada, Mexico, European Union member states, Japan and China.
In response to these tariffs, global trading partners have or are likely to impose their own tariffs.
Such U.S. tariffs and responsive tariffs have resulted in significant financial market volatility, and their impact on the global economy has been significant.
Further effects of these tariffs cannot be predicted with certainty.
Continued uncertainty surrounding trade policies and the potential for further tariff increases or the imposition of new tariffs may lead to a continuation or worsening of the impact of the tariffs on the financial markets, including the MBS, repurchase and equity markets.
In addition, many economists and certain financial data have indicated an increased likelihood of U.S. and global recessions as a result of the disruptions to international trade.
These trade actions and the widespread uncertainty and international tensions resulting therefrom may have a material adverse effect on our business, results of operations, ability to access capital, and financial condition and on the market price of our common stock.
The use of derivative instruments may fail to protect or could adversely affect us.
The availability of derivatives may not correspond directly with the interest rate risk for which protection is sought (e.g., the difference in interest rate movements for long-term U.S.
Treasury Securities compared to Agency Securities) and the duration of the derivatives may not match the duration of the related liability.
Counterparties to a derivative agreement may default on their obligation to pay or not perform under the terms of the agreement and the collateral posted may not be sufficient to protect against any consequent loss.
We may lose collateral we have pledged to secure our obligations under a derivative agreement if the associated counterparty becomes insolvent or files for bankruptcy.
We may also experience a termination event under one or more of our derivative agreements related to our REIT status, equity levels and performance, which could result in a payout to the associated counterparty and a taxable loss to us.
Although we attempt to structure our derivatives to offset the changes in asset prices, the complexity of the actual and expected prepayment characteristics of the underlying mortgages as well as the volatility in mortgage interest rates relative to U.S.
Treasury and interest rate swap contract rates makes achieving high levels of offset difficult.

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Gone since FY2024

The portion of the dividends on our common and preferred stock which represented non-taxable return of capital was 14.8% in 2024, 47.5% in 2023 and 100.0% in 2022.
At December 31, 2024, we had approximately $(189,450) in tax deductible expense relating to previously terminated interest rate swap, treasury futures contracts and treasury shorts amortizing through the year 2034.
Compliance with NYSE Corporate Governance Standards We comply with the corporate governance standards of the NYSE.
In acquiring MBS, we compete with numerous mortgage REITs, mortgage finance and specialty ARMOUR Residential REIT, Inc.
Business (continued) finance companies, savings and loan associations, banks, mortgage bankers, insurance companies, mutual funds, institutional investors, investment banking firms, other lenders, governmental bodies and other entities.
As of February 11, 2025, ACM had 20 employees that provide services to us.
Risk Factors ARMOUR Residential REIT, Inc.
You should consider carefully all of the risks described below together with the other information contained in this Annual Report on Form 10-K, before making a decision to invest in our securities.
U.S. dollar amounts are presented in thousands, except per share amounts or as otherwise noted.
Risk Factors Page Risk Factor Summary 8 ARMOUR’s MBS investments rely heavily on financial leverage, magnifying our interest rate and spread risks 8 ARMOUR actively issues new shares and may redeem outstanding shares of its common and preferred stock 8 ARMOUR is externally managed by ACM 8 We and equity analysts consider Distributable Earnings as a measure of ARMOUR’s investment performance 9 Our affiliate BUCKLER is our largest financing counterparty and placement agent under our at-the-market ("ATM") offering program 9 General risks common to ARMOUR and our peer mortgage REITs 9 ARMOUR Residential REIT, Inc.
Risk Factors (continued) Risk Factor Summary ARMOUR’s MBS investments rely heavily on financial leverage, magnifying our interest rate and spread risks: • Changes in interest rates impact our level of net interest income, total comprehensive income (loss) and stockholders' equity and we cannot always successfully mitigate such interest rate risks; • Volatility in the relationships between the market prices and yields for our securities and certain benchmark prices and interest rates periodically will adversely affect our net income, earnings per share and stockholders' equity • Fed monetary policy significantly influences interest rates and short-term financing availability; • U.S.
Should GSEs lose that status or go fully private it could cause extreme market volatility and depressed prices on Agency Securities; • The fair value of our interest rate swaps represents forecasted future net swap coupon amounts.
The fair value of these positions has already been included in total comprehensive income (loss) and total stockholders’ equity.
It has been received by us in cash through variation margin payments made by our counterparties, which we recognize as a liability.
Both the asset and liability will ultimately go to zero.
This exact path of this eventual decline is uncertain and will depend on future changes in interest rates and other factors; • During stressful market conditions, we have sold and may in the future be forced to sell MBS at distressed prices, thereby potentially incurring permanent equity losses; and • We have credit exposure to our financing and derivative counterparties for the value of our collateral they hold in excess of our current liabilities.
ARMOUR actively issues new shares and may redeem outstanding shares of its common and preferred stock : • We have issued and may in the future issue shares of our common stock in “at the market” offerings or underwritten “block” offerings, which may adversely impact the market price of our stock and result in dilution to existing stockholders; • We may issue stock when investment opportunities are relatively less attractive; • We may repurchase our common and preferred stock at prices below book value, to the potential disadvantage of selling stockholders; and • Significant changes in the number of shares outstanding over time complicate the understanding of periodic per share calculations.
Gross equity raised substantially exceeds total stockholders' equity determined in accordance with GAAP and ARMOUR Residential REIT, Inc.
Risk Factors (continued) management fee expenses do not decline with reductions in our total stockholders' equity.
As a result, ACM's annualized contractual management fee rate as of December 31, 2024 equaled 3.03% of stockholders' equity. • ACM has voluntarily waived a portion of its contractual management fee.
ACM has reduced, and may further reduce, the amount of or discontinue entirely its voluntary fee waiver without our consent. • The termination of the management agreement may be difficult and costly. • The management agreement with ACM will automatically renew for an additional 5-year term unless ARMOUR gives 180-day written notice of non-renewal. • The management agreement was not negotiated on an arm’s-length basis and the terms, including fees payable, may not be as favorable to us as if they were negotiated with an unaffiliated third-party.
We and equity analysts consider Distributable Earnings as a measure of ARMOUR’s investment performance : • Distributable Earnings is a non-GAAP measure which excludes gains and losses, and therefore is an imperfect measure of our overall financial performance, and is not a standardized metric; and • Distributable Earnings may not provide sufficient incentive to ACM to maximize risk adjusted returns on our investment portfolio.
Our affiliate BUCKLER is our largest financing counterparty and placement agent under our ATM offering program : • A material portion of our aggregate repurchase financing is facilitated through BUCKLER; • We hold a 10.8% equity ownership interest in BUCKLER and additionally, provided BUCKLER with $200 million in additional regulatory capital; • BUCKLER relies primarily on bilateral and triparty repurchase agreement funding through the FICC; • BUCKLER is the primary placement agent for ARMOUR's common share ATM Program; • BUCKLER may pursue business opportunities with third parties; and • There are potential conflicts of interest in our relationship with ACM and its affiliates, including BUCKLER, which could result in decisions that are not in the best interests of our stockholders.
Risk Factors (continued) ARMOUR’s MBS investments rely heavily on financial leverage, magnifying our interest rate and spread risks: Changes in interest rates impact our level of net interest income, total comprehensive income (loss) and stockholders' equity and we cannot always successfully mitigate such interest rate risks.
Our MBS have maturities ranging from 10 to 30 years (although average lives are much shorter due to amortization and prepayments).
Congress, or changes in the credit rating of the U.S. government, the United Kingdom, or one or more Eurozone nations; however, increased uncertainty or changes in the economic outlook for, or rating of, the creditworthiness of the U.S. government, the United Kingdom, or Eurozone nations may have adverse impacts on, among other things, the U.S. economy, financial markets, the cost of borrowing, the financial strength of counterparties we transact business with, and the value of assets we hold.
Risk Factors (continued) Volatility in the relationships between the market prices and yields for our securities and certain benchmark prices and interest rates periodically will adversely affect our net income, earnings per share and stockholders' equity.
This variation in the “spread” relationship among the market yields, and therefore prices, of different instruments can result in our hedging positions being not as effective as normally would be expected, exposing us to the risk of unexpected volatility in our net income, earnings per share, and total stockholders’ equity.
After the Fed increased the Federal Funds Rate to a target range of 5.25% to 5.50% in July 2023 to tame rising inflation, it kept the target range at this level until September 2024, stating in 2024 FOMC meetings that the risks to achieving its employment and inflation goals continue to move into better balance.
In September 2024, the Fed started reducing its target range, decreasing it by 0.50% to 4.75% to 5.00%, and stating that the risks to achieving its employment and inflation goals were then roughly in balance.
The Fed subsequently reduced the target range by 0.25% each in November and December 2024, bringing the target range down to 4.25% to 4.50%.
While short-term interest rates fell as the Fed reduced its target range by 100 basis points from September to December, long term interest rates were volatile throughout the year and rose by 69 basis points, negatively impacting the market value of our investments.
There were many factors that contributed to the rise in long term rates, including the Fed’s quantitative tightening policies that remained throughout 2024.
These policies included reducing the Fed’s holdings of agency mortgage-backed securities and U.S.
Treasuries, creating net supply in the market.
Market volatility and concerns about recession have raised ARMOUR Residential REIT, Inc.
Risk Factors (continued) concerns that the GSEs may need additional capital to meet their obligations as guarantors.
The actual or anticipated action or inaction on U.S. fiscal policy matters, including the U.S. debt ceiling, could result in a wide range of negative economic effects, including increased financial market and interest rate volatility and wider market spreads between mortgage assets and benchmark interest rates.
The fair value of our interest rate swaps represents forecasted future net swap coupon amounts.
This exact path of this eventual decline is uncertain and will depend on future changes in interest rates and other factors.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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