In This Article:
-
Book Value: $14.47 per share at December 31, down from $14.93 on September 30.
-
Economic Return: 7.0% for the year.
-
Comprehensive Loss: $1.6 million or $0.03 per weighted average common share in Q4.
-
Net Interest Expense: $35 million in Q4, a decrease of $7.4 million from the previous quarter.
-
Net Servicing Income: $168 million minus $5 million of non-operating MSR related servicing costs.
-
Investment Securities Gains/Losses: Swung from a gain of $270 million in Q3 to a loss of $267 million in Q4.
-
Net Swap and Other Derivative Gains: $145 million in Q4 compared to losses of $205 million in Q3.
-
Servicing Asset Gain: $82.5 million in Q4, after a loss of $133.4 million in Q3.
-
MSR Valuation Change: Positive $139.4 million in Q4, compared to a negative $93.8 million in Q3.
-
Economic Debt to Equity: Decreased slightly to 6.5 times.
-
Portfolio Size: $14.8 billion at December 31, including $10.4 billion in settled positions and $4.4 billion in TBAS.
-
MSR Portfolio: $202 billion UPD at December 31, with a price multiple increase to 5.9 times from 5.6 times.
-
Static Return Estimate: 9.8% to 12.1% before leverage, 10.8% to 14.4% after leverage.
Release Date: January 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Two Harbors Investment Corp (NYSE:TWO) has developed a new platform from scratch with minimal costs, aiming to scale it in 2025.
-
The company is expanding its offerings by providing second lien loans, acting as a broker for $33 million in loans.
-
Two Harbors Investment Corp (NYSE:TWO) demonstrated a 7.0% economic return for the year 2024.
-
The company has shifted a portion of its MSR financing to VFN repurchase agreements, which carry lower floating rate spreads.
-
The MSR portfolio showed a gain of $82.5 million in the fourth quarter, with a positive change in valuation due to higher rates and lower projected prepayments.
Negative Points
-
Two Harbors Investment Corp (NYSE:TWO) experienced a comprehensive loss of $1.6 million in the fourth quarter.
-
The company's book value per share decreased from $14.93 to $14.47 by the end of the year.
-
Net interest expense was $35 million in the fourth quarter, reflecting a decrease due to lower RMBS borrowing balances.
-
Investment securities gains and changes in OCI swung from a gain of $270 million in the third quarter to a loss of $267 million in the fourth quarter.
-
The decline in realized prepayment rates and lower UPB due to the sale of MSR contributed to a decrease in Rolph from $62 million to $57 million.