Two Harbors Funding Corp. Studies Second Quarter 2022 Monetary Outcomes

NEW YORK–(BUSINESS WIRE)–Two Harbors Funding Corp. (NYSE: TWO), an Company + MSR mortgage actual property funding belief (REIT), at the moment introduced its monetary outcomes for the quarter ended June 30, 2022.

Quarterly Abstract

• Reported ebook worth of $5.10 per widespread share, representing a (4.7)% quarterly return on ebook worth⁽¹⁾

• Generated Complete Lack of $90.4 million, representing an annualized return on common widespread fairness of (19.1)%

• Reported Earnings Obtainable for Distribution (EAD) of $75.3 million, or $0.22 per weighted common fundamental widespread share⁽²⁾

• Declared a second quarter widespread inventory dividend of $0.17 per share

• Grew RMBS portfolio, together with TBA, by $3.4 billion, rising financial debt-to-equity from 5.3x to six.4x, as spreads widened out to enticing ranges⁽³⁾

Quarterly Abstract

• Matrix Monetary Providers Company, an entirely owned subsidiary of Two Harbors, agreed to accumulate all fairness pursuits in RoundPoint Mortgage Servicing Company

“Our efficiency demonstrated the advantages of the paired Company + MSR technique throughout one other quarter marked by elevated market volatility and an general risk-off sentiment. As mortgage spreads continued to widen to traditionally enticing ranges, we deployed capital into RMBS and took benefit of relative worth alternatives throughout the stack,” acknowledged Invoice Greenberg, Two Harbors’ President, Chief Government Officer and Chief Funding Officer. “We’re additionally very excited for our acquisition of RoundPoint Mortgage Servicing Company, which we introduced at the moment, and the chance it affords us to reinforce our MSR technique.”

Working Efficiency

The next desk summarizes the corporate’s GAAP and non-GAAP earnings measurements and key metrics for the second quarter of 2022 and first quarter of 2022:

Portfolio Abstract

As of June 30, 2022, the corporate’s portfolio was comprised of $12.0 billion of Company residential mortgage-backed securities (RMBS), Company Derivatives and MSR in addition to their related notional debt hedges. Moreover, the corporate held $6.4 billion bond equal worth of web lengthy to-be-announced securities (TBAs).

The next tables summarize the corporate’s funding portfolio as of June 30, 2022 and March 31, 2022:

Financing Abstract

The next tables summarize the corporate’s financing metrics and excellent repurchase agreements, revolving credit score amenities, time period notes and convertible senior notes as of June 30, 2022 and March 31, 2022:

Convention Name

Two Harbors Funding Corp. will host a convention name on August 4, 2022 at 9:00 a.m. ET to debate second quarter 2022 monetary outcomes and associated info. The convention name might be webcast stay and accessible within the Traders part of the corporate’s web site at www.twoharborsinvestment.com/traders. To take part within the teleconference, please name toll-free (877) 502-7185, roughly 10 minutes previous to the above begin time. For these unable to attend, a phone playback might be obtainable starting at 12:00 p.m. ET on August 4, 2022, by way of 12:00 p.m. ET on August 18, 2022. The playback will be accessed by calling (877) 660-6853, convention code 13730385. The decision can even be archived on the corporate’s web site within the Information & Occasions part.

Two Harbors Funding Corp.

Two Harbors Funding Corp., a Maryland company, is an internally managed actual property funding belief that invests in residential mortgage-backed securities, mortgage servicing rights and different monetary belongings. Two Harbors is headquartered in St. Louis Park, MN. Extra info is out there at www.twoharborsinvestment.com.

Ahead-Wanting Statements

This presentation consists of “forward-looking statements” throughout the that means of the protected harbor provisions of the US Non-public Securities Litigation Reform Act of 1995. Precise outcomes might differ from expectations, estimates and projections and, consequently, readers shouldn’t depend on these forward-looking statements as predictions of future occasions. Phrases reminiscent of “count on,” “goal,” “assume,” “estimate,” “undertaking,” “finances,” “forecast,” “anticipate,” “intend,” “plan,” “might,” “will,” “may,” “ought to,” “imagine,” “predicts,” “potential,” “proceed,” and related expressions are meant to establish such forward-looking statements. These forward-looking statements contain vital dangers and uncertainties that might trigger precise outcomes to vary materially from anticipated outcomes, together with, amongst different issues, these described in our Annual Report on Type 10-Ok for the 12 months ended December 31, 2021, and any subsequent Quarterly Studies on Type 10-Q, underneath the caption “Threat Elements.” Elements that might trigger precise outcomes to vary embody, however will not be restricted to: the state of credit score markets and normal financial circumstances; the continued impression of the COVID-19 pandemic, and the actions taken by federal and state governmental authorities and GSEs in response, on the U.S. financial system, monetary markets and our goal belongings; adjustments in rates of interest and the market worth of our belongings; adjustments in prepayment charges of mortgages underlying our goal belongings; the charges of default or decreased restoration on the mortgages underlying our goal belongings; declines in residence costs; our capacity to determine, modify and preserve acceptable hedges for the dangers in our portfolio; the provision and value of our goal belongings; the provision and value of financing; adjustments within the aggressive panorama inside our trade; our capacity to successfully execute and to understand the advantages of strategic transactions and initiatives we now have pursued or might sooner or later pursue; our determination to terminate our administration settlement with PRCM Advisers LLC and the continued litigation associated to such termination; our capacity to handle numerous operational dangers and prices related to our enterprise; interruptions in or impairments to our communications and data expertise techniques; our capacity to accumulate MSR and efficiently function our seller-servicer subsidiary and oversee our subservicers; the impression of any deficiencies within the servicing or foreclosures practices of third events and associated delays within the foreclosures course of; our publicity to authorized and regulatory claims; legislative and regulatory actions affecting our enterprise; the impression of recent or modified authorities mortgage refinance or principal discount packages; our capacity to take care of our REIT qualification; and limitations imposed on our enterprise resulting from our REIT standing and our exempt standing underneath the Funding Firm Act of 1940.

Readers are cautioned to not place undue reliance upon any forward-looking statements, which converse solely as of the date made. Two Harbors doesn’t undertake or settle for any obligation to launch publicly any updates or revisions to any forward-looking assertion to replicate any change in its expectations or any change in occasions, circumstances or circumstances on which any such assertion relies. Extra info regarding these and different danger elements is contained in Two Harbors’ most up-to-date filings with the Securities and Trade Fee (SEC). All subsequent written and oral forward-looking statements regarding Two Harbors or issues attributable to Two Harbors or any individual appearing on its behalf are expressly certified of their entirety by the cautionary statements above.

Non-GAAP Monetary Measures

Along with disclosing monetary outcomes calculated in accordance with United States typically accepted accounting ideas (GAAP), this press launch and the accompanying investor presentation current non-GAAP monetary measures, reminiscent of earnings obtainable for distribution and earnings obtainable for distribution per fundamental widespread share that exclude sure objects. The non-GAAP monetary measures offered by the corporate present supplemental info to help traders in analyzing the corporate’s outcomes of operations and assist facilitate comparisons to trade friends. Nevertheless, as a result of these measures will not be calculated in accordance with GAAP, they shouldn’t be thought of an alternative to, or superior to, the monetary measures calculated in accordance with GAAP. The corporate’s GAAP monetary outcomes and the reconciliations from these outcomes needs to be rigorously evaluated. See the GAAP to non-GAAP reconciliation desk on web page 11 of this launch.

Extra Info

Stockholders of Two Harbors and different individuals might discover extra info concerning the corporate on the SEC’s Web web site at www.sec.gov or by directing requests to: Two Harbors Funding Corp., Attn: Investor Relations, 1601 Utica Avenue South, Suite 900, St. Louis Park, MN, 55416, phone (612) 453-4100.