ARMOUR Residential REIT : ARR Company Update

ARMOUR RESIDENTIAL REIT, Inc. Company Update

1/13/2023

ARMOUR seeks to create shareholder value through thoughtful investment and risk management that produces current yield and superior risk adjusted returns over the long term.

Our focus on residential real estate finance supports home ownership for a broad and diverse spectrum of Americans by bringing private capital into the mortgage markets.

PLEASE READ: Important Note Regarding Forward Looking Statements and Estimates	2

• 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-looking statements" made within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "believes," "predicts," "potential," "continue," and similar expressions) should also be considered forward-looking statements. Forward-looking statements include but are not limited to statements regarding the projections and future plans for ARMOUR's business, growth and operational improvements. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of ARMOUR's control. A number of important factors could cause actual results or events to differ materially from those indicated by such forward-looking statements. Additional information concerning these factors and risks are contained in the Company's most recent annual and quarterly reports and other reports filed with the Securities and Exchange Commission. ARMOUR assumes no obligation to update the information in this communication, except as otherwise required by law. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.
• This material is for information purposes only and does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation for any securities or financial instruments. The statements, information and estimates contained herein are based on information that the Company believes to be reliable as of today's date unless otherwise indicated. ARMOUR cannot guarantee future results, levels of activity, performance or achievements.
• Pricing and duration information are estimates provided by independent third-party providers based on models that require inputs and assumptions. Actual realized prices and durations will depend on a number of factors that cannot be predicted with certainty and may be materially different from estimates.
• Estimates do not reflect any costs of operation of ARMOUR.
• THE INFORMATION PRESENTED HEREIN IS UNAUDITED AND NOT REVIEWED BY OUR INDEPENDENT PUBLIC ACCOUNTANTS.

ARMOUR Overview	3

ARMOUR manages an investment portfolio consisting of mortgage-backed securities issued or guaranteed by U.S. Government-sponsored enterprises ("GSEs"), Treasury securities, and cash; a financing position consisting primarily of repurchase agreements and preferred equity and a hedge book consisting primarily of interest rate swaps, Treasury futures and Treasury shorts.

• Stockholders' Equity and Liquidity
• • ARMOUR estimates that book value per common share as of December 31, 2022 was in the range of $5.76 to $5.80.
  • December 31, 2022 liquidity was approximately $689 million, consisting of $87 million cash & $602 million unlevered Agency and US Treasury securities.

• Dividend Policy
• • ARMOUR pays dividends monthly.
  • The Company previously announced the January common stock dividend of $0.10 per share payable on January 30, 2023 to holders of record on January 17, 2023.
  • Since inception in November 2009, ARMOUR has paid out $1.9 billion in dividends.(1)

• Shareholder Alignment
• • Returned $276 million to common shareholders through share repurchases since 2013.
  • Senior management maintains common stock ownership basis in excess of $5.75 million aggregate target.
  • Managed preferred shares through repurchases, calls, and refinancing to maximize value in capital structure.

• Transparency and Governance
• • Updated portfolio and liability details can be found monthly at www.armourreit.com.
  • Non-ExecutiveBoard Chairman and separate Lead Independent Director.

• ARMOUR REIT Manager
• • ARMOUR REIT is externally managed by ARMOUR Capital Management LP.
  • ARMOUR Capital Management LP is the majority owner of BUCKLER Securities, a FINRA registered broker-dealer.

1. Includes both common and preferred stock dividends through December 2022. Information as of 12/31/2022.

ARMOUR Portfolio and Financing Composition	4

ARMOUR Portfolio(1)

						Estimated
	% of	Current Value	Weighted Average	Weighted Average	Weighted Average	Effective
Securities	Portfolio	(millions)	Book Price	Market Price	Net/Gross Coupon	Duration
Agency Fixed Rates Maturing Between 0 and 360 Months	91.3%	$8,199	100.5%	94.1%	4.14/4.91	5.31
Agency 30Y TBA Long Positions	8.7%	$778	98.7%	97.2%	4.69/ N/A	4.70
Total Portfolio	100.0%	$8,976

ARMOUR Repurchase Agreements(2)

				Wtd. Avg.	Longest
	Principal Borrowed	% of Repo	Wtd. Avg.	Remaining	Remaining
Repo Counterparty	(millions)	Positions	Original Term	Days	Term in Days
BUCKLER Securities LLC (3)	$3,248	50.2%	42	15	18
All Other Counterparties	$3,216	49.8%	39	18	34
Total or Wtd. Avg.	$6,463	100.0%	41	16

1. As of 12/30/2022, ARMOUR has approximately $348 million in forward settling, low pay-up FNCL spec pools. These pools will likely go on repo upon settlement.
2. The repurchase agreement table includes $500 million of overnight reverse repo for ARMOUR's Treasury Short position and $200 million of overnight reverse repo for Agency MBS, which reduces our repo notional outstanding. ARMOUR's notional repo outstanding on mortgage-backed securities as of 12/30/2022 was $7.2 billion.
3. BUCKLER Securities LLC is a FINRA registered broker-dealer affiliated with ARMOUR REIT.

Information as of 12/31/2022. Portfolio value is based on independent third-party pricing. Information includes estimates of the effect of forward settling trades. Some totals may not foot due to rounding.

ARMOUR Hedging Composition

Interest Rate Swap Breakdown by Months to Maturity

	2,000																		Total Swap Notional is $6.4B with a
millions)(in																			weighted average maturity of 73
1,000
																											months.
Notional
			0
						s					s				hs				s					s					s					s			hs				ths			s
							h					h								h					h					h					h								h
						t					t					t					t					t			nt				t			nt							t
					n				n				n				n			on					n						n			n
				o					o					o					o						o				o				o					o			o
		1	M			2	M			3	M			4	M			6	M				M				M			9	M					M				M
																					72				84							08					20
	-	2		-	4			-	6			-	8			-	0			-				-				-	6		1					1
	0				3					5					7					9					1				3				5				-					-
				1					2					3					4					6				7				8				7					9
																																											9					0
																																															1
											ARMOUR is currently active with seven swap counterparties.

5

Total Hedge Breakdown by Type

Treasury Shorts 6.5%

Treasury Futures 10.5%

IRS: SOFR 10.5%

IRS: OIS 72.5%

6

Information as of 12/31/2022. Some totals may not foot due to rounding.