Armour Residential Reit, Inc. · NYSE:ARR

Armour Residential Reit — JMP Securities Financial Services and Real Estate Conference 2011

14 slides from Armour Residential Reit's conference presentation, Sep 22, 2011

  1. Slide 1: ARMOUR Residential REIT, Inc. - JMP Securities Conference

    ARMOUR RESIDENTIAL REIT ARMOUR RESIDENTIAL REIT, Inc. JMP Securities Financial Services and Real Estate Conference September 26, 2011

  2. Slide 2: Important Regulatory and Yield Estimate Risk Disclosures

    PLEASE READ: Important Regulatory and Yield Estimate Risk Disclosures Certain statements made in this presentation regarding ARMOUR Residential REIT, Inc. (‘ARMOUR” or the “Company”, and any other statements regarding ARMOUR's future expectations, beliefs, goals or prospects constitute forward-looki

  3. Slide 3: ARMOUR Capitalization and Dividend Policy

    idend Pol ARMOUR Capitalization and Di y + Market Capitalization and Ad — Closing price per share $7.02. — 84,754,121 shares of common stock outstanding (NYSE: “ARR”)(, — Market capitalization of $595.0 million. = Additional paid-in capital” estimate: $7.16 per share or $606.5 million. + Dividend ot

  4. Slide 4: Targets, Strategy and Governance

    ARMOUR ‘gets, Strategy and Governance Re’ + ASSETS * ARMOUR invests in Agency mortgage securities. * DURATION + Net balance sheet weighted average duration target of 1.5 or less. Balance Sheet Baiada Targets + Hedge asset and funding rate risk on a minimum of 40% of non-ARM assets. + LIQUIDITY + Hol

  5. Slide 5: Balance Sheet Highlights

    ARMOUR Balance Sheet Highlights Agency Mortgage Portfolio (billions) Net REPO Borrowings (billions) Interest Rate Hedges (billions) Gross Asset Duration Net Balance Sheet Duration Liquidity Total (millions) ‘True Cash Unlevered Securities Short term Agency P&I receivables") $5.52 $5.29 $2.90 1.64 -0

  6. Slide 6: Investment Methodology

    ARMOUR Investment Methodology Management has a focused and disciplined approach to evaluating assets for inclusion in the ARMOUR portfolio. ARMOUR employs a ‘buy and hold’ strategy rather than a ‘trading’ strategy. + Agency Securities — ARMOUR invests in Agency Securities. * Low Duration Assets — Ta

  7. Slide 7: Agency Asset Class Composition

    ARMOUR Agency Asset Class Composition ; Current ARMs ‘Agency Asset Class Value 2.4% (illions) ‘ARMS (0:38 Months to Reset) $109 Hybrids 9 Monts and Longer o Reset) 3 24383 10 Year & 15 Year Pass-Throughs $ 2s874 Total $ 55176 10Yesr & 15 Year Pass- Hybrids Throughs 45.1% 52.5% CCurrentValue Percenta

  8. Slide 8: ARM and Hybrid Security Composition

    ARMOUR ARM and Hybrid Security Composition o-18MTR 85-120 MTR 5.1% 19-36MTR 11.2% 55% ‘Months to Reset 37-48 MTR 19.8% one 1936 3748 4960 or8e 49-60 MTR 25.120 15.4% ‘Total 61-84MTR 43.0% = Percentages are based on the total market value of both ARMsand Hybrids. Information asof9/21/2011. current Va

  9. Slide 9: Portfolio and Interest Rate Hedges Duration Detail

    ARMOUR Portfolio and Interest Rate Hedges Duration Detail Weighted Weighted Estimated effective Current Value Weighted Ave ‘Agency Asset Class may Average Average Current Nev/erocs coupon Duration Using Purchase Price Market Price wupon Current Values [ARMS (0-18 Months to Reset) $1308 104.7% 105.3%

  10. Slide 10: Interest Rate Swap and Eurodollar Futures Detail

    ARMOUR Interest Rate Swap and Eurodollar Futures Detail Weighted Average Notional mans cet Pater ce) SRO (Months) (millions) er Iierettatesvop ——odzMonhe =f InerettateSvop«SbaiMorthe = 35 «§ 388 Interest Rate Swap 25-36 Months 238 $ 290.0 1.09 Imerecinatesuap — aranwene at $a? InretRteSvop G2aoMorth

  11. Slide 11: Portfolio Constant Prepayment Rates

    ARMOUR Portfo Constant Prepayment Rates (“CPR”) Monthly Portfolio September 2011, Constant Prepayment Rate Agency Asset Class CPR Peer : pigii ho ; bidi eR oa + ARMOUR expenses premium amortization monthly asit occurs. + Constant Prepayment Rate (‘CPR’) isthe annualized equivalent of single monthly

  12. Slide 12: REPO Composition

    ARMOUR REPO Composition 1 BNP Paras Secures Co. sae 80% 6 s 2MF Gobatne. 3 Bs 68% 2 = 5 Gusgerbeim Secures Lc 3 M9 6BK ss * 4 Golaman Secs Co. 5 m9 62K a a 5 UBS Secrtiestic S RR 62% 5 ° 6 Misubish UF) Secures USA), ne 3 B69 58% 3 a 7 South Sreet Securities UC S m0 55% 6 %6 BMerriitych Pierce, Ferme

  13. Slide 13: 6/30/2011 Financial Highlights

    ARMOUR 6/30/2011 Financial Highlights Balance sheet Netinterest Margin Total Assets $5,530,026, 383 “Asset Yield 3.25% Total Liabilities $4,995,996,126 Cost of Funds 0.99% Stockholders’ Equity $ $34,030,257 Net interest Margin 2.36% Interest Expense on Repurchase Agreements 0.28% GAAP income stateme

  14. Slide 14: ARMOUR Residential REIT contact details

    ARMOUR RESIDENTIAL REIT www.armourreit.com ARMOUR Residential REIT, Inc. 3001 Ocean Drive Suite 201 Vero Beach, FL 32963 772-617-4340

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