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Did Armour Residential Reit beat or miss consensus estimates last quarter?

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- **Strong Financial Performance**: Q3 net income $156.3M, book value +3.5% to $17.49/share. 
- **Stable Dividend Policy**: $0.24/month dividend maintained, next payment Oct 30. 
- **Portfolio Resilience**: 16-18% ROE on new investments, 92% in prepayment-protected pools. 
- **Fed Policy Tailwind**: SOFR swap spreads +10bps vs. Q3, 2025 rate cuts priced in. 
- **GSE Reform Opportunity**: Potential for lower mortgage rates via regulatory changes.

**【Management Opening Remarks】**
- Q3 2025 GAAP net income: $156.3 million ($1.49 per share), distributable earnings: $75.3 million ($0.72 per share). 
- Book value increased 3.5% to $17.49 per share, with $17.50 as of October 21 (including October dividend). 
- Capital activity: $99.5 million raised via ATM, $298.6 million from 18.5M share sale, 700K shares repurchased. 
- Dividend policy: $0.24/month stable, next payment on October 30.

**【CFO Financial Commentary】**
- Net interest income: $38.5 million. TBA drop income: $15.3 million. 
- Operating expenses: $13.5 million (down 5% YoY). 
- Total economic return: 7.75% (vs. 6.25% Q2). 
- Liquidity: 55% of capital in cash and repo lines.

**【CEO & Investment Team Strategy】**
- Portfolio positioning: 8.1x leverage, 0.2 years duration. 87% hedges in SOFR/OIS swaps. 
- Asset focus: 92% specified pools, 40% in prepayment-protected Agency CMBS. 
- ROE expectations: 16-18% for production coupons, 19%+ for premium pools. 
- Prepayment trends: 9.6 CPR in October (vs. 8.1 Q3 avg), stable by year-end. 
- Repo market: 2.75% haircuts, SOFR spreads +10bps vs. Q3.

**【Q&A Highlights】**
1. **Return on Capital**: 16-18% hedged ROE for new investments, 19%+ for premium pools. 
2. **Swap Spreads**: SOFR/OIS swaps now 44bps (vs. -60bps Q2), tailwind for hedges. 
3. **GSE Deregulation**: Potential for lower mortgage rates via GSE reforms, but balance needed with GSE profitability. 
4. **Hedge Ratio**: 0.2 years duration (front-end bias), dynamic adjustments based on Fed policy. 
5. **Volatility**: Expect medium-term decline (2019-like levels), using low-optionality assets vs. swaptions. 
6. **Capital Transactions**: Buybacks at $14.40/share, ATM issuance at $16.50+.


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