Note 17 -Subsequent Events

Acquisition of JAVELIN Mortgage Investment Corp.

On April 6, 2016 we completed our acquisition of all of the outstanding common stock of JAVELIN pursuant the Transactions, for cash consideration of $85.2 million. Subsequently JAVELIN became a wholly-owned subsidiary of ARMOUR. The acquisition expands and diversifies our investment portfolio. JAVELIN's complementary assets provide us with investment opportunities in Non-Agency MBS.

We recognized JAVELIN’s assets and liabilities (including JAVELIN’s liability under JAVELIN’s management agreement with ACM) at their fair values on the date of the Merger. None of the bargain purchase price is expected to be included in income for income tax purposes.

The following table summarizes the consideration paid for JAVELIN and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date, as well as the fair value at the acquisition date. The following amounts are preliminary and subject to change (amounts in millions):



Consideration:
Cash	$	85.2
Fair value of consideration transferred	$	85.2
Acquisition related costs (included in professional fees for the quarter ended March 31, 2016)	$	1.5
Recognized amounts of identifiable assets acquired and liabilities assumed
Cash and cash collateral	$	36.6
Agency Securities	440.7
Non-Agency Securities	223.2
Accrued interest receivable	1.4
Prepaid and other assets	5.4
Repurchase agreements	(589.6		)
Derivatives	(17.5		)
Accrued interest payable	(0.9		)
Accounts payable and other accrued expenses	(7.6		)
Total identifiable net assets	$	91.7
Goodwill/(Bargain purchase price)	(6.5		)
Total	$	85.2

Included in accounts payable and other accrued expenses is a liability of $3.4 million which has been recognized as the fair value of the Second Amended and Restated Management Agreement between JAVELIN and ACM.

We expect to recognize a gain of $6.5 million as a result of the Transactions which will be included in other income in our condensed consolidated income statement for the period ending June 30, 2016.

Dividends

On April 27, 2016, a cash dividend of $0.17 per outstanding share of Series A Preferred Stock, or $375 in the aggregate, and $0.16 per outstanding share of Series B Preferred Stock, or $927 in the aggregate, was paid to holders of record on April 15, 2016. We have also declared cash dividends of $0.17 and $0.16 per outstanding share of Series A Preferred Stock and Series B Preferred Stock, respectively, payable May 27, 2016 to holders of record on May 15, 2016 and payable June 27, 2016 to holders of record on June 15, 2016.

On April 27, 2016, a cash dividend of $0.27 per outstanding common share, or $9,907 in the aggregate, was paid to holders of record on April 15, 2016. We have also declared cash dividends of $0.22 per outstanding common share payable May 27, 2016 to holders of record on May 16, 2016 and payable June 29, 2016 to holders of record on June 15, 2016.