ARMOUR Residential REIT, Inc. (ARR) Earnings Call Transcript & Summary

Good morning. We're happy to welcome you to this virtual-only Annual Meeting of Stockholders of ARMOUR Residential REIT. We look forward to resume in-person annual meetings with our stockholders beginning in 2022. My name is Scott Ulm, and I'm the Co-Chief Executive Officer, Co-Vice Chairman and Chief Risk Officer of ARMOUR Residential REIT. I would also like to introduce Jeff Zimmer, the Co-Chief Executive Officer, Co-Vice Chairman and President of ARMOUR; James Mountain, the Chief Financial Officer and Secretary of ARMOUR; Mark Gruber, the Chief Investment Officer of ARMOUR; and Gordon Harper, the Vice President of Finance, Controller and Treasurer of ARMOUR. In addition, Beth Goldstein of Deloitte & Touche, ARMOUR's independent certified public accountants, is participating and will be available to answer appropriate questions you may have later in the meeting. Upon entering the meeting, each of you was presented with rules of procedure for the meeting. To conduct an orderly meeting, we ask that participants to abide by these rules. Should you desire to ask a question or make a statement, please submit your question or statement via the submit a question box. As stated in the rules of procedure, we ask that you restrict your questions and remarks to those relevant to the company or the proposals being considered. The meeting will now officially come to order. We will proceed with the formal business of the meeting as set forth in your notice of the annual meeting and accompanying proxy statement. At this time, I would like to appoint James Mountain to serve as Secretary at this meeting. Mr. Mountain, please report at this time with respect to the mailing of the notice of the meeting and the stockholders' list.

Thank you. I have at this meeting a complete list of the stockholders of record of ARMOUR's common stock as of the close of business on March 19, 2021. That's the record date for this meeting. I also have an affidavit dated April 29, 2021 of Robert Zubrycki, Vice President of Continental Stock Transfer & Trust Company, certifying the mailing of the 2021 annual meeting proxy materials via the United States Mail to all registered stockholders of record at the close of business on March 19, 2021. I also have an affidavit dated May 6, 2021 that Joanne Vogel, Manager of Corporate Client Services of Broadridge Financial Solutions, Inc., certifying the mailing via the United States Mail of the 2021 annual meeting proxy materials to all beneficial stockholders of record at the close of business on March 19, 2021.

At this time, I'd like to appoint James Mountain to act as the Inspector of Election at this meeting. Mr. Mountain has taken and subscribed the customary oath of office to execute his duties with strict impartiality. We will file this oath with the records of the meeting. This function is decided upon the qualifications of voters, accept their votes, and when submission of votes on all matters is completed, to tally the final votes. Mr. Mountain, please report at this time with respect to the existence of a quorum.

Proxies have been received for approximately 49,654,000 shares of the 67,296,322 shares of common stock outstanding at the close of business on the record date, which represents approximately 73.8% of the total number of outstanding shares. This constitutes a quorum for the meeting today, and we may now carry out the official business of the meeting. If there are any additional proxies to be submitted to the inspector of elections, please do so via the voting link in the virtual meeting website by entering your control number to vote. Stockholders who have sent in proxies do not need to take any further action at this time.

We'll now proceed with the formal business of this meeting. There are 4 proposals to be considered by the stockholders at this meeting. Mr. Mountain, may we open the polls?

Yes, we may. The time is now 8:04 a.m. on May 13, 2021, and the polls are now open for voting on all matters to be presented. Voting at this annual meeting will be conducted exclusively by means of the virtual meeting website. The polls will be closed to voting after we go through the matters to be voted on.

The first item of business is to consider and vote upon a proposal to reelect 10 directors to the ARMOUR Board of Directors as listed in the proxy statement to serve until ARMOUR's next annual meeting. Is there any discussion regarding the proposal regarding the election of directors? If yes, please submit your question or comment using the submit a question box.

We see no questions.

The second item of business is to consider and vote upon the proposal to ratify the appointment of Deloitte & Touche as ARMOUR's independent registered certified public accountants for fiscal year 2021. Is there any discussion regarding the proposal to ratify the appointment of Deloitte & Touche? If yes, please submit your question or comment using the submit a question box.

We see no questions.

The third item of business is to consider and vote upon a proposal to approve by nonbinding advisory vote the 2020 compensation of ARMOUR's named executive officers. Is there any discussion regarding the nonbinding advisory vote on ARMOUR's 2020 executive compensation? If yes, please submit your question or comment using the submit a question box.

We see no questions.

The fourth item of business is to consider and vote upon a proposal to approve an amendment to ARMOUR's second amended and restated 2009 Stock Incentive Plan to increase the maximum number of shares that may be made subject to awards thereunder by 2,120 -- by 2,125,000 shares. Is there any discussion regarding the vote to approve an amendment to ARMOUR's second amended and restated 2009 Stock Incentive Plan? If yes, please submit your question or comment using the submit a question box.

We see no questions. Let's conclude the voting. Voting is by proxy through the Internet site provided on the proxy card or voting instruction form by telephone or through the virtual meeting website. Each share of common stock is entitled to 1 vote. You do not need to vote at this meeting if you've already sent in your signed proxy or previously voted online or by telephone. If there's anyone participating, whether or not you've already previously voted online or by the telephone or submitted a proxy who now wants to vote using the virtual meeting website, they should please go to the voting link on the virtual meeting website and enter the control number in order to vote. If there's anyone still trying to submit votes, please complete your voting process orderly or indicate in the submit a question box that you have -- are having problems. [Voting]

The time is now 8:07 and the polls are closed for voting. May we have the results of the voting?

Yes. The report of the inspector of elections covering the proposals presented at this meeting is all -- is as follows: the proposal to reelect the 10 nominees for directors as listed in the proxy statement have received the affirmative votes of a majority of the votes cast by stockholders participating in or represented by proxy at this meeting. All 10 of those directors have been reelected. The proposal to approve the ratification of the appointment of Deloitte & Touche LLP as ARMOUR's independent registered certified public accountants for fiscal year 2021 has received the affirmative vote of a majority of the votes cast by stockholders participating in or represented by proxy at this meeting, and it is carried. The proposal to approve by advisory nonbinding vote of ARMOUR's 2020 compensation of its named executive officers has received the affirmative vote of majority of the votes cast by stockholders participating in or represented by proxy at this meeting. It is also carried. Finally, the proposal to approve an amendment to ARMOUR's second amended and restated 2009 Stock Incentive Plan to increase the maximum number of shares that may be made subject to awards thereunder by 2,125,000 shares has received the affirmative votes of a majority of the votes cast by stockholders participating in or represented by proxy at this meeting. It is carried. A full tally of the votes will be published in the current report on Form 8-K, which will be filed with the Securities and Exchange Commission in due course.

Thank you, Jim. I declare the 10 nominees for Director elected, the ratification of the appointment of Deloitte & Touche approved, the 2020 compensation of named executive officers approved by advisory nonbinding vote and the amendment to ARMOUR's second amended and restated 2009 Stock Incentive Plan approved. We'll now entertain questions and comments from stockholders. Stockholders are limited to no more than 3 questions or comments each. Questions and comments should be written clearly and be brief in length. Please submit any questions or comments using the submit a question box on the virtual meeting website. Questions and comments should be relevant to matters of concern to stockholders generally. Are there any questions or comments?

We have no questions or comments from stockholders at this time.

Thank you, Jim. I want to thank all of you for participating in today's virtual-only annual meeting and for the interest you've shown in ARMOUR. As we've completed the business of this meeting and there is nothing further to come before the meeting, we stand adjourned. Thank you.