What ARMOUR Residential REIT, Inc. told the SEC could break it.

ARMOUR is an Agency mortgage REIT whose assets are policy-dependent. Substantially all of its Agency Securities are issued or guaranteed by the GSEs (treated as the functional equivalent of U.S. government full-faith-and-credit), and the payments it receives depend on borrowers paying the underlying mortgages and on the GSEs fulfilling their guarantees — with no assurance that U.S. government support of Fannie Mae and Freddie Mac will remain adequate or that the GSEs' longer-term viability (e.g., a conservatorship exit/privatization) is assured. Its results are further driven by Federal Reserve rate/balance-sheet policy and by tariff-driven financial-market volatility, which the company flags as adversely affecting financing availability/terms, market liquidity, and mortgage origination. A concentrated, policy-driven exposure to the Agency-MBS framework rather than a physical supply chain.

“The payments we receive on the Agency Securities in which we invest depend upon a steady stream of payments by borrowers on the underlying mortgages and the fulfillment of guarantees by GSEs.”

As a leveraged Agency mortgage REIT, ARMOUR funds its portfolio almost entirely through short-term repurchase agreements, making repo counterparties its critical upstream funding 'supply.' At December 31, 2025, two repo counterparties individually accounted for over 5% of aggregate borrowings, together ~12.1% of repo borrowings outstanding (three counterparties = 19.9% a year earlier). A hard repo market, counterparty withdrawal, or margin/haircut increases could force the company to pledge additional collateral or liquidate assets to reduce borrowing levels — a forced-deleveraging dynamic that can crystallize losses. This repo-funding dependence is the mortgage REIT's key supply-shock-relevant exposure; counterparties are unnamed, so it registers as a funding-counterparty concentration risk.

“at December 31, 2025, we had 2 repurchase agreement counterparties that individually accounted for over 5 % of our aggregate borrowings. In total, these counterparties accounted for approximately 12.1 % of our repurchase agreement borrowings outstanding at December 31, 2025.”