Armour Residential REIT, Inc.

Previous wording

The Middle East conflict that began in late February 2026 significantly increased U.S. interest rate volatility, primarily through its impact on energy markets. As oil prices rose sharply amid concerns about potential supply disruptions, particularly through the Strait of Hormuz, market participants reassessed the inflation outlook and likely path of monetary policy. Expectations regarding futures pricing shifted from at least two 25 basis point Federal Reserve cuts by year-end 2026 immediately before the conflict to at least one 25 basis point hike, contributing to a pronounced bear flattening of the U.S. Treasury curve and a more challenging technical backdrop for Agency MBS. Although the April ceasefire and mid-June memorandum of understanding between the U.S. and Iran partially reversed the most severe moves in rates, volatility, and mortgage spreads, ARMOUR expects a return of bouts of volatility until the conflict is more definitively resolved and, accordingly, intends to continue prioritizing risk management during this period of heightened uncertainty.

Current wording

The Middle East conflict that began in late February 2026 significantly increased U.S. interest rate volatility, primarily through its impact on energy markets. As oil prices rose sharply amid concerns over potential supply disruptions, particularly through the Strait of Hormuz, market participants reassessed the inflation outlook and expected path of monetary policy. Immediately before the conflict, futures markets were expecting at least two 25 basis point Federal Reserve rate cuts by year-end 2026; since then, expectations have shifted dramatically, with the Fed raising rates by 25 basis points on September 16, 2026 and markets expecting another 25 basis point hike by year-end. This repricing contributed to a pronounced rise in Treasury yields across the curve and a more challenging technical backdrop for Agency MBS. Although the April ceasefire and mid-June memorandum of understanding between the U.S. and Iran partially reversed the most severe moves in rates, volatility, and mortgage spreads, these measures deteriorated again in the third quarter, in some cases exceeding earlier extremes. ARMOUR expects bouts of elevated volatility to persist until the conflict is more definitively resolved and, accordingly, intends to continue prioritizing risk management during this period of heightened uncertainty.

Previous wording

In 2025, the U.S. administration imposed tariffs on imports from a broad range of trading partners, including Canada, Mexico, member states of the European Union, Japan, and China. In response, several trading partners imposed, and others may yet impose, retaliatory tariffs. In February 2026, the U.S. Supreme Court held that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs, invalidating the broad-based tariffs the administration had imposed under that statute. The administration subsequently shifted to alternative authorities, including a temporary surcharge under Section 122 of the Trade Act of 1974, while also signaling its intent to preserve a broader tariff regime through other trade statutes and legal mechanisms. The Section 122 tariffs are set to expire on July 24, 2026 unless extended by Congress and have since faced legal challenges, adding further uncertainty to the tariff outlook. These U.S. tariffs, together with actual and potential retaliatory measures, contributed to increased volatility in financial markets and interest rates and could continue to do so. Accordingly, ARMOUR expects to continue prioritizing liquidity considering the potential for renewed market volatility and related financial risks.

Current wording

In 2025, the U.S. administration imposed tariffs on imports from a broad range of trading partners, including Canada, Mexico, member states of the European Union, Japan, and China. In response, several trading partners imposed retaliatory tariffs. In February 2026, the U.S. Supreme Court held that the International Emergency Economic Powers Act (IEEPA) did not authorize the President to impose the administration’s broad-based tariffs under that statute. The administration subsequently shifted to alternative trade authorities, including a temporary surcharge under Section 122 of the Trade Act of 1974, which expired on July 24, 2026, and more durable measures under Sections 301 and 232 of the Trade Act of 1974. Most notably, the administration imposed new Section 301 tariffs of 10% to 12.5% on imports from 60 economies beginning in late July, while continuing to pursue additional sector- and country-specific tariffs under other statutory authorities. These measures, together with actual and potential retaliatory actions by U.S. trading partners, have contributed to increased uncertainty and volatility in financial markets and interest rates and could continue to do so. Accordingly, ARMOUR expects to continue prioritizing liquidity given the potential for more market volatility and related financial risks.

Previous wording

At its April 29, 2026 and June 17, 2026 meetings, the Federal Open Market Committee maintained the target range for the Federal Funds Rate at 3.50% to 3.75%. In its June 17, 2026 statement, the Committee noted that economic activity is expanding at a solid pace despite elevated uncertainty, in part due to the conflict in the Middle East, and that productivity growth and capital investment are strong. The Committee also stated that job gains have kept pace with the workforce, the unemployment rate has changed little, and inflation remains elevated relative to its 2% goal, partly reflecting supply shocks that have driven price increases in certain sectors, including energy. The Committee emphasized that it will deliver price stability.

Current wording

At its September 16, 2026 meeting, the Federal Open Market Committee (FOMC) raised the target range for the federal funds rate by 25 basis point to 3.75% to 4.00%, its first rate hike since July 2023. In its statement, the Committee said economic activity continued to expand at a solid pace despite elevated uncertainty, in part related to geopolitical developments. It highlighted strong productivity growth and capital investment, resilient domestic spending, and job gains that have kept pace with the workforce, while the unemployment rate has changed little. The Committee also noted that inflation remains elevated and said their policy action would support a timelier return of inflation to its 2% objective.

Previous wording

At the June 17, 2026 meeting, the Committee also reaffirmed its policy of maintaining ample reserves in the banking system. Consistent with the conclusion of the reduction in its aggregate securities holdings effective December 1, 2025, the Committee directed the Open Market Desk to roll over at auction all principal payments from the Federal Reserve’s Treasury securities holdings and to reinvest all principal payments from its agency debt and agency mortgage-backed securities holdings into Treasury bills. Additionally, the FOMC's reserve management purchase (RMP) program, launched in 2025 with approximately $40 billion per month in short-dated Treasury securities, has since stepped down to $10 billion per month, where it remains through at least mid-July 2026. The Federal Reserve has also indicated that future RMP amounts will remain data-dependent, set on a month-to-month basis. Despite the reduction in RMP, repurchase funding conditions remained liquid and orderly, particularly relative to prior years. ARMOUR continues to monitor these developments closely, as further changes to RMP pace or repo market conditions could affect the Company's borrowing environment; at present, we do not view this as a material near-term risk, yet prudent portfolio management warrants ongoing attention to this program.

Current wording

At its September 16, 2026 meeting, the Committee also reaffirmed its policy of maintaining ample reserves in the banking system. Consistent with the conclusion of the reduction in its aggregate securities holdings effective December 1, 2025, the Committee directed the Open Market Desk to roll over at auction all principal payments from the Federal Reserve’s Treasury securities holdings and to reinvest all principal payments from its agency debt and agency mortgage-backed securities holdings into Treasury bills. Additionally, the FOMC's reserve management purchase (RMP) program, launched in 2025 with approximately $40 billion per month in short-dated Treasury securities, was reduced to zero in the third quarter of 2026 as reserve levels remained ample and repo markets continued to function smoothly. Looking ahead into the fourth quarter of 2026, a meaningful increase in net bill supply is expected to resume, which could place some pressure on reserves and money-market funding conditions. The New York Fed has indicated that it stands ready to adjust RMPs as needed to maintain ample reserves. A resumption of purchases is expected to help absorb some of the liquidity impact from increased bill issuance and support continued orderly and liquid repo markets. ARMOUR continues to monitor these developments closely, as further changes to the RMP pace or repo market conditions could affect the Company's borrowing environment.

Previous wording

Financial markets will likely be highly sensitive to the Fed’s interest rate decisions, its bond purchasing and balance sheet holding decisions, as well as its communication. We intend to continue to mitigate risk and maximize liquidity within the scope of our business plan. The agency mortgage-backed securities market remains highly dependent on the future course and timing of the Fed's actions on interest rates as well as its purchases and holdings of our target assets.

Current wording

Financial markets will likely be highly sensitive to the Fed’s interest rate decisions, its bond purchasing and balance sheet holding decisions, its liquidity operations, as well as its communication. We intend to continue to mitigate risk and maximize liquidity within the scope of our business plan. The agency mortgage-backed securities market remains highly dependent on the future course and timing of the Fed's actions on interest rates and liquidity operations, as well as its purchases and holdings of our target assets.

Previous wording

Net Income for the three and six months ended June 30, 2026 compared to Net Loss for the three and six months ended June 30, 2025 reflected increased interest income from a larger average securities portfolio and gains on derivatives partially offset by interest expense on a larger average balance of repurchase agreements and unrealized losses on our trading securities, net, due to market movements.

Current wording

Net Loss for the three and nine months ended September 30, 2026 compared to Net Income for the three and nine months ended September 30, 2025 reflected unrealized losses on our trading securities, partially offset by derivative gains, due to increased interest rate spreads and volatility in the later portion of September 2026. The increase in net interest income reflected income from a larger average securities portfolio and interest expense on a larger average repurchase agreements balance.

Previous wording

The following tables detail the factors impacting our net interest income for three and six months ended June 30, 2026 and June 30, 2025.

Current wording

The following tables detail the factors impacting our net interest income for the three and nine months ended September 30, 2026 and September 30, 2025.

Previous wording

Three Months Ended June 30, 2026 vs. Three Months Ended June 30, 2025

Current wording

Three and Nine Months Ended September 30, 2026 vs. Three and Nine Months Ended September 30, 2025

Previous wording

◦The change in fair value of the securities was $(40,015) and $(231,949) for the three and six months ended June 30, 2026 compared to $28,680 and $240,110 for the three and six months ended June 30, 2025.

Current wording

◦The change in fair value of the securities was $(1,126,630) and $(1,358,579) for the three and nine months ended September 30, 2026 compared to $174,573 and $414,683 for the three and nine months ended September 30, 2025.

Previous wording

◦Sales of our Agency Securities, trading resulted in realized gains (losses) of $(2,609) and $6,730 and $(12,135) and $(15,308) for the three and six months ended June 30, 2026 and June 30, 2025, respectively.

Current wording

◦Sales of our Agency Securities, trading resulted in realized gains (losses) of $(38,555) and $(31,825) and $2,535 and $(12,773) for the three and nine months ended September 30, 2026 and September 30, 2025, respectively.

Previous wording

◦During the three and six months ended June 30, 2026, and June 30, 2025, we sold $865,173 and $1,756,297 (inclusive of $344,372 of unsettled sales) and $992,009 and $1,226,213, respectively, of Agency Securities, trading.

Current wording

◦During the three and nine months ended September 30, 2026, and September 30, 2025, we sold $406,672 and $2,162,969 (inclusive of $67,401 of unsettled sales) and $412,008 and $1,638,221 (inclusive of $296,523 of unsettled sales), respectively, of Agency Securities, trading.

Previous wording

•Loss on U.S. Treasury Securities, net resulted from the change in fair value of the securities as well as the gain (loss) on sales.

Current wording

•Gain (Loss) on U.S. Treasury Securities, net resulted from the change in fair value of the securities as well as the gain (loss) on sales.

Previous wording

◦During the three and six months ended June 30, 2026, we sold $391,734 and $491,402 of U.S. Treasury Securities, resulting in a realized loss of $(9,323) and $(9,781), respectively.

Current wording

◦During the three and nine months ended September 30, 2026, we sold $95,188 and $586,590 of U.S. Treasury Securities, resulting in a realized loss of $(5,337) and $(15,118), respectively.

Previous wording

◦Interest rate swap contracts' aggregate notional balance was $15,889,000 at June 30, 2026 and $12,327,000 at December 31, 2025.

Current wording

◦Interest rate swap contracts' aggregate notional balance was $16,954,000 at September 30, 2026 and $12,327,000 at December 31, 2025.

Previous wording

◦Our TBA Agency Securities aggregate notional balance was $600,000 at June 30, 2026.

Current wording

◦Our TBA Agency Securities aggregate notional balance was $830,000 at September 30, 2026.

Previous wording

The Company is managed by ACM, pursuant to a management agreement. The management fees are determined based on gross equity raised. Therefore, management fees increase when we raise capital and decline when we repurchase previously issued stock and make liquidation distributions as approved and so designated by a majority of the Board. However, because the management fee rate decreases to 0.75% per annum for gross equity raised in excess of $1.0 billion pursuant to the management agreement, the effective management fee rate declines as equity is raised. The cost of repurchased stock and any dividends specifically designated by the Board as liquidation distributions will reduce the amount of gross equity raised used to calculate the monthly management fee. Realized and unrealized gains and losses do not affect the amount of gross equity raised. At June 30, 2026 and June 30, 2025, the effective management fee was 0.88% and 0.90% (prior to management fees waived) based on gross equity raised of $5,812,714 and $4,969,351, respectively. During the three and six months ended June 30, 2025 ACM voluntarily waived management fees of $1,650 and $3,300, respectively, (see Note 13 - Related Party Transactions).

Current wording

The Company is managed by ACM, pursuant to a management agreement. The management fees are determined based on gross equity raised. Therefore, management fees increase when we raise capital and decline when we repurchase previously issued stock and make liquidation distributions as approved and so designated by a majority of the Board. However, because the management fee rate decreases to 0.75% per annum for gross equity raised in excess of $1.0 billion pursuant to the management agreement, the effective management fee rate declines as equity is raised. The cost of repurchased stock and any dividends specifically designated by the Board as liquidation distributions will reduce the amount of gross equity raised used to calculate the monthly management fee. Realized and unrealized gains and losses do not affect the amount of gross equity raised. At September 30, 2026 and September 30, 2025, the effective management fee was 0.87% and 0.89% (prior to management fees waived) based on gross equity raised of $6,017,634 and $5,362,440, respectively. During the three and nine months ended September 30, 2025 ACM voluntarily waived management fees of $1,650 and $4,950, respectively, (see Note 13 - Related Party Transactions).

Previous wording

Realized gains and losses on interest rate contracts and treasury futures terminated before their maturity are deferred and amortized over the remainder of the original term of the contract for REIT taxable income. At June 30, 2026 and December 31, 2025, we had approximately $(190,650) and $(313,284), respectively, of net deductible expense relating to previously terminated interest rate swap and treasury futures/shorts contracts amortizing through the year 2040. At June 30, 2026, we had $257,341 of net operating loss carryforwards available for use indefinitely.

Current wording

Realized gains and losses on interest rate contracts and treasury futures terminated before their maturity are deferred and amortized over the remainder of the original term of the contract for REIT taxable income. At September 30, 2026 and December 31, 2025, we had approximately $(139,301) and $(313,284), respectively, of net deductible expense relating to previously terminated interest rate swap and treasury futures/shorts contracts amortizing through the year 2040. At September 30, 2026, we had $257,341 of net operating loss carryforwards available for use indefinitely.

Previous wording

(2)Our TBA Agency Securities were recorded as derivative instruments in our accompanying consolidated financial statements. Our TBA Agency Securities were reported at a net carrying value of $1,791, at June 30, 2026 and were reported in Derivatives, at fair value on our consolidated balance sheets (see Note 7 to the consolidated financial statements).

Current wording

(2)Our TBA Agency Securities were recorded as derivative instruments in our accompanying consolidated financial statements. Our TBA Agency Securities were reported at a net carrying value of $(24,401), at September 30, 2026 and were reported in Derivatives, at fair value on our consolidated balance sheets (see Note 7 to the consolidated financial statements).

Previous wording

We have entered into repurchase agreements to finance the majority of our MBS. Our repurchase agreements are secured by our MBS and bear interest at rates that have moved in close relationship to the Federal Funds Rate and SOFR. We have established borrowing relationships with numerous investment banking firms and other lenders, 25 and 22 of which had open repurchase agreements with us at June 30, 2026 and December 31, 2025, respectively. We had outstanding balances under our repurchase agreements, net at June 30, 2026 and December 31, 2025 of $19,441,457 and $17,941,796, respectively. At June 30, 2026 and December 31, 2025, BUCKLER accounted for 46.8% and 47.0% of our aggregate borrowings and had an amount at risk of 6.8% and 7.1%, respectively, of our total stockholders' equity with a weighted average maturity of 27 days and 13 days, respectively, on repurchase agreements (see Note 6 to the consolidated financial statements).

Current wording

We have entered into repurchase agreements to finance the majority of our MBS. Our repurchase agreements are secured by our MBS and bear interest at rates that have moved in close relationship to the Federal Funds Rate and SOFR. We have established borrowing relationships with numerous investment banking firms and other lenders, 25 and 22 of which had open repurchase agreements with us at September 30, 2026 and December 31, 2025, respectively. We had outstanding balances under our repurchase agreements, net at September 30, 2026 and December 31, 2025 of $19,379,128 and $17,941,796, respectively. At September 30, 2026 and December 31, 2025, BUCKLER accounted for 49.8% and 47.0% of our aggregate borrowings and had an amount at risk of 8.0% and 7.1%, respectively, of our total stockholders' equity with a weighted average maturity of 9 days and 13 days, respectively, on repurchase agreements (see Note 6 to the consolidated financial statements).

Previous wording

Our repurchase agreements require excess collateral, known as a “haircut.” At June 30, 2026, the average haircut percentage was 2.51% compared to 2.63% at December 31, 2025.

Current wording

Our repurchase agreements require excess collateral, known as a “haircut.” At September 30, 2026, the average haircut percentage was 2.48% compared to 2.63% at December 31, 2025.

Previous wording

We use various contracts to manage our interest rate risk as we deem prudent in light of market conditions and the associated costs with counterparties that have a high-quality credit rating and with futures exchanges. We generally pay a fixed rate and receive a floating rate with the objective of fixing a portion of our borrowing costs and hedging the change in our book value to some degree. The floating rate we receive is generally the Federal Funds Rate or SOFR. We had contractual commitments under derivatives at June 30, 2026 and December 31, 2025. At June 30, 2026 and December 31, 2025, we had derivatives with a net fair value of $592,888 and $592,241, respectively (see Note 7 to the consolidated financial statements).

Current wording

We use various contracts to manage our interest rate risk as we deem prudent in light of market conditions and the associated costs with counterparties that have a high-quality credit rating and with futures exchanges. We generally pay a fixed rate and receive a floating rate with the objective of fixing a portion of our borrowing costs and hedging the change in our book value to some degree. The floating rate we receive is generally the Federal Funds Rate or SOFR. We had contractual commitments under derivatives at September 30, 2026 and December 31, 2025. At September 30, 2026 and December 31, 2025, we had derivatives with a net fair value of $1,335,805 and $592,241, respectively (see Note 7 to the consolidated financial statements).

Previous wording

At June 30, 2026, we had interest rate swap contracts with an aggregate notional balance of $15,889,000, a weighted average swap rate of 2.78% and a weighted average term of 52 months. At December 31, 2025, we had interest rate swap contracts with an aggregate notional balance of $12,327,000, a weighted average swap rate of 2.44% and a weighted average term of 51 months. We also had TBA Agency Securities with an aggregate notional balance of $600,000 at June 30, 2026. We did not have TBA Agency Securities at December 31, 2025 (see Note 7 to the consolidated financial statements).

Current wording

At September 30, 2026, we had interest rate swap contracts with an aggregate notional balance of $16,954,000, a weighted average swap rate of 2.93% and a weighted average term of 56 months. At December 31, 2025, we had interest rate swap contracts with an aggregate notional balance of $12,327,000, a weighted average swap rate of 2.44% and a weighted average term of 51 months. We also had TBA Agency Securities with an aggregate notional balance of $830,000 at

Previous wording

The following table details the changes in the fair value of our interest rate swap contracts for the six months ended June 30, 2026 and for the year ended December 31, 2025.

Current wording

The following table details the changes in the fair value of our interest rate swap contracts for the nine months ended September 30, 2026 and for the year ended December 31, 2025.

Previous wording

Although we attempt to structure our derivatives to offset the changes in asset prices, the complexity of the actual and expected prepayment characteristics of the underlying mortgages as well as the volatility in mortgage interest rates relative to U.S. Treasury and interest rate swap contract rates makes achieving high levels of offset difficult. We recognized net (losses) gains related to our derivatives of $108,235 and $191,260 and $(108,022) and $(299,240), for the three and six months ended June 30, 2026 and June 30, 2025, respectively.

Current wording

Although we attempt to structure our derivatives to offset the changes in asset prices, the complexity of the actual and expected prepayment characteristics of the underlying mortgages as well as the volatility in mortgage interest rates relative to U.S. Treasury and interest rate swap contract rates makes achieving high levels of offset difficult. We recognized net (losses) gains related to our derivatives of $792,440 and $983,700 and $(49,287) and $(348,527), for the three and nine months ended September 30, 2026 and September 30, 2025, respectively.

Previous wording

As required by the Dodd-Frank Act, the Commodity Futures Trading Commission has adopted rules requiring certain interest rate swap contracts to be cleared through a derivatives clearing organization. We are required to clear certain new interest rate swap contracts. Centrally-cleared interest rate swaps may have higher margin requirements than bilateral interest rate swaps. We have established an account with a futures commission merchant for this purpose. At June 30, 2026 and December 31, 2025, we had $10,808,000 and $7,193,000, respectively, of notional amount of centrally-cleared interest rate swap contracts.

Current wording

As required by the Dodd-Frank Act, the Commodity Futures Trading Commission has adopted rules requiring certain interest rate swap contracts to be cleared through a derivatives clearing organization. We are required to clear certain new interest rate swap contracts. Centrally-cleared interest rate swaps may have higher margin requirements than bilateral interest rate swaps. We have established an account with a futures commission merchant for this purpose. At September 30, 2026 and December 31, 2025, we had $11,873,000 and $7,193,000, respectively, of notional amount of centrally-cleared interest rate swap contracts.

Previous wording

At June 30, 2026, our liquidity totaled $1,222,244, consisting of $83,679 of cash and cash equivalents plus $1,138,565 of unencumbered Agency Securities and U.S. Treasury Securities (including securities received as reverse margin collateral). Our primary sources of funds are borrowings under repurchase arrangements, monthly principal and interest payments on our MBS and cash generated from our operating results.

Current wording

At September 30, 2026, our liquidity totaled $1,019,337, consisting of $99,666 of cash and cash equivalents plus $919,671 of unencumbered Agency Securities and U.S. Treasury Securities (including securities received as reverse margin collateral). Our primary sources of funds are borrowings under repurchase arrangements, monthly principal and interest payments on our MBS and cash generated from our operating results.

Previous wording

Our primary uses of cash are to purchase MBS, pay interest and principal on our borrowings, fund our operations and pay dividends. From time to time, we purchase or sell assets for forward settlement up to 90 days in the future to lock in purchase prices or sales proceeds. At June 30, 2026 and December 31, 2025, we financed our securities portfolio with $19,441,457 and $17,941,796 of borrowings under repurchase agreements, respectively.

Current wording

Our primary uses of cash are to purchase MBS, pay interest and principal on our borrowings, fund our operations and pay dividends. From time to time, we purchase or sell assets for forward settlement up to 90 days in the future to lock in purchase prices or sales proceeds. At September 30, 2026 and December 31, 2025, we financed our securities portfolio with $19,379,128 and $17,941,796 of borrowings under repurchase agreements, respectively.

Previous wording

We generally seek to borrow (on a recourse basis) between six and ten times the amount of our total stockholders’ equity. Our debt to equity ratios at June 30, 2026 and December 31, 2025, were 7.54:1 and 7.94:1, respectively. Our leverage ratios, including our TBA Agency Securities, were 7.77:1 and 7.94:1 at June 30, 2026 and December 31, 2025, respectively. Implied leverage, including TBA Securities and forward settling sales and unsettled purchases was 7.73:1 and 8.07:1 at June 30, 2026 and December 31, 2025, respectively.

Current wording

We generally seek to borrow (on a recourse basis) between six and ten times the amount of our total stockholders’ equity. Our debt to equity ratios at September 30, 2026 and December 31, 2025, were 8.24:1 and 7.94:1, respectively. Our leverage ratios, including our TBA Agency Securities, were 8.59:1 and 7.94:1 at September 30, 2026 and December 31, 2025, respectively. Implied leverage, including TBA Securities and forward settling sales and unsettled purchases was 8.41:1 and 8.07:1 at September 30, 2026 and December 31, 2025, respectively.

Previous wording

The following tables present our equity transactions for the six months ended June 30, 2026 and for the year ended December 31, 2025 (see Note 10 and Note 13 to the consolidated financial statements).

Current wording

The following tables present our equity transactions for the nine months ended September 30, 2026 and for the year ended December 31, 2025 (see Note 10 and Note 13 to the consolidated financial statements).

Previous wording

The following table reconciles the fees incurred in accordance with the management agreement for the three and six months ended June 30, 2026 and June 30, 2025 (see Note 8 to the consolidated financial statements).

Current wording

The following table reconciles the fees incurred in accordance with the management agreement for the three and nine months ended September 30, 2026 and September 30, 2025 (see Note 8 to the consolidated financial statements).

Previous wording

At June 30, 2026, there was approximately $16,724 of unvested stock based compensation related to the Awards (based on a weighted grant date price of $18.71 per share), which we expect to recognize as an expense as follows: for the remainder of 2026 an expense of $2,182, in 2027 an expense of $3,699, and thereafter an expense of $10,843. Our policy is to account for forfeitures as they occur. We also pay each of our non-executive Board members quarterly fees, which are payable in cash, common stock, RSUs or a combination of common stock, RSUs and cash at the option of the director. Compensation to be paid to our non-executive Board in the form of cash and common equity is $1,219 annually (see Note 9 to the consolidated financial statements).

Current wording

At September 30, 2026, there was approximately $15,565 of unvested stock based compensation related to the Awards (based on a weighted grant date price of $18.53 per share), which we expect to recognize as an expense as follows: for the remainder of 2026 an expense of $1,006, in 2027 an expense of $3,699, and thereafter an expense of $10,860. Our policy is to account for forfeitures as they occur. We also pay each of our non-executive Board members quarterly fees, which are payable in cash, common stock, RSUs or a combination of common stock, RSUs and cash at the option of the director. Compensation to be paid to our non-executive Board in the form of cash and common equity is $1,219 annually (see Note 9 to the consolidated financial statements).

Previous wording

We may increase our capital resources by obtaining long-term credit facilities or making public or private offerings of equity or debt securities, including classes of preferred stock, common stock and senior or subordinated notes to meet our liquidity requirements. As of the date hereof, we have "at-the-market" offering programs with 2,443 shares of 7.00% Series C Cumulative Redeemable Preferred Stock available under the Preferred C ATM Sales Agreement and 544 shares of common stock available under the 2023 Common stock ATM Sales Agreement. In accordance with the terms of these agreements, we may offer and sell shares of stock over a period of time and from time to time, with BUCKLER and other agents as sales agents (see Note 10 to the consolidated financial statements). These liquidity requirements include maturing repurchase agreements, settling TBA Agency Security positions and potentially making net payments on our interest rate swap contracts, and in each case, continuing to meet ongoing margin requirements. Such financing will depend on market conditions for capital raises and for the investment of any proceeds and there can be no assurances that we will successfully obtain any such financing.

Current wording

We may increase our capital resources by obtaining long-term credit facilities or making public or private offerings of equity or debt securities, including classes of preferred stock, common stock and senior or subordinated notes to meet our liquidity requirements. As of the date hereof, we have "at-the-market" offering programs with 2,324 shares of 7.00% Series C Cumulative Redeemable Preferred Stock available under the Preferred C ATM Sales Agreement and 18,360 shares of common stock available under the 2023 Common stock ATM Sales Agreement. In accordance with the terms of these agreements, we may offer and sell shares of stock over a period of time and from time to time, with BUCKLER and other agents as sales agents (see Note 10 to the consolidated financial statements). These liquidity requirements include maturing repurchase agreements, settling TBA Agency Security positions and potentially making net payments on our interest rate swap contracts, and in each case, continuing to meet ongoing margin requirements. Such financing will depend on market conditions for capital raises and for the investment of any proceeds and there can be no assurances that we will successfully obtain any such financing.