Two Harbors Investment Corp. Files 2023 Annual Report (10-K)

TL;DR

<b>Two Harbors Investment Corp. reported $8.5 million in net income and $103.4 million in total assets for FY2023.</b>

AI Summary

TWO HARBORS INVESTMENT CORP. (TWOD) filed a Annual Report (10-K) with the SEC on February 20, 2024. Total assets reported at $103,427,329 for the fiscal year ended December 31, 2023. Net income for the fiscal year ended December 31, 2023, was $8,509,383. Earnings per share (EPS) for the fiscal year ended December 31, 2023, was $0.0338752. Total debt reported at $103,206,457 for the fiscal year ended December 31, 2023. The company's operating margin was 4.7% for the fiscal year ended December 31, 2023.

Why It Matters

For investors and stakeholders tracking TWO HARBORS INVESTMENT CORP., this filing contains several important signals. The filing provides a comprehensive overview of the company's financial performance and position for the fiscal year 2023, including detailed financial statements and risk factors. Investors can use this 10-K filing to assess the company's profitability, asset management, debt levels, and overall financial health, which are crucial for investment decisions in the real estate investment trust sector.

Risk Assessment

Risk Level: medium — TWO HARBORS INVESTMENT CORP. shows moderate risk based on this filing. The company operates in the real estate investment trust sector, which is sensitive to interest rate fluctuations and economic downturns, as indicated by the various financial metrics and risk factors detailed in the filing.

Analyst Insight

Review the detailed financial statements and risk factors in the 10-K to understand the company's performance and potential challenges in the current economic climate.

Financial Highlights

revenue

103,427,329

operating Margin

4.7

total Assets

103,427,329

total Debt

103,206,457

net Income

8,509,383

eps

0.0338752

gross Margin

6.1

Key Numbers

• 103,427,329 — Total Assets (As of December 31, 2023)
• 8,509,383 — Net Income (For the fiscal year ended December 31, 2023)
• 0.0338752 — EPS (For the fiscal year ended December 31, 2023)
• 103,206,457 — Total Debt (As of December 31, 2023)
• 4.7 — Operating Margin (For the fiscal year ended December 31, 2023)
• 6.1 — Gross Margin (For the fiscal year ended December 31, 2023)

Key Players & Entities

• TWO HARBORS INVESTMENT CORP. (company) — Filer name
• MD (company) — State of incorporation
• ST. LOUIS PARK (company) — Business address city
• MN (company) — Business address state
• 612.453.4100 (dollar_amount) — Business phone number

FAQ

Risk Factors

• Interest Rate Sensitivity [high — financial]: The company's financial performance is significantly impacted by changes in interest rates, which affect borrowing costs and the value of its investments.
• Real Estate Market Conditions [medium — market]: Deterioration in real estate market conditions could adversely affect the company's ability to generate revenue and maintain property values.
• Operational Risks [medium — operational]: The company faces operational risks related to its investment strategies, property management, and compliance with regulations.

Key Dates

• 2023-12-31: Fiscal Year End — End of the reporting period for the 10-K filing.

Key Financial Figures

• $0.01 — ch Registered: Common Stock, par value $0.01 per share TWO New York Stock Exchange
• $8.0 billion — erparties. At December 31, 2023, we had $8.0 billion of outstanding balances under repurchas
• $67.2 m — on such assets) to any single lender of $67.2 million, or 3.1% of stockholders' equity.

Filing Documents

• two-20231231.htm (10-K) — 3886KB
• twoexh1231202343.htm (EX-4.3) — 166KB
• twoexh12312023211.htm (EX-21.1) — 18KB
• twoexh12312023231.htm (EX-23.1) — 5KB
• twoexh12312023311.htm (EX-31.1) — 11KB
• twoexh12312023312.htm (EX-31.2) — 10KB
• twoexh12312023321.htm (EX-32.1) — 6KB
• twoexh12312023322.htm (EX-32.2) — 6KB
• two-20231231_g1.jpg (GRAPHIC) — 140KB
• 0001465740-24-000076.txt (&nbsp;) — 18082KB
• two-20231231.xsd (EX-101.SCH) — 99KB
• two-20231231_cal.xml (EX-101.CAL) — 109KB
• two-20231231_def.xml (EX-101.DEF) — 498KB
• two-20231231_lab.xml (EX-101.LAB) — 1167KB
• two-20231231_pre.xml (EX-101.PRE) — 849KB
• two-20231231_htm.xml (XML) — 3419KB

Business

Business 1 Item 1A.

Risk Factors

Risk Factors 8 Item 1B. Unresolved Staff Comments 22 Item 1C. Cybersecurity 22 Item 2.

Properties

Properties 23 Item 3.

Legal Proceedings

Legal Proceedings 24 Item 4. Mine Safety Disclosures 24 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 25 Item 6. [Reserved] 27 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 27 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 49 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 54 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 110 Item 9A.

Controls and Procedures

Controls and Procedures 110 Item 9B. Other Information 113 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 113 PART III Item 10. Directors, Executive Officers and Corporate Governance 114 Item 11.

Executive Compensation

Executive Compensation 114 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 114 Item 13. Certain Relationships and Related Transactions, and Director Independence 114 Item 14. Principal Accounting Fees and Services 114 PART IV Item 15. Exhibits, Financial Statement Schedules 115 Item 16. Form 10-K Summary 115

Signatures

Signatures 118 i CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS This Annual Report on Form 10-K contains, or incorporates by reference, not only historical information, but also forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, or the Exchange Act, and that are subject to the safe harbors created by such sections. Forward-looking statements involve numerous risks and uncertainties. Our actual results may differ from our beliefs, expectations, estimates, and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Forward-looking statements are not historical in nature and can be identified by words such as "anticipate," "estimate," "will," "should," "expect," "target," "believe," "intend," "seek," "plan," "goals," "future," "likely," "may," and similar expressions or their negative forms, or by references to strategy, plans, or intentions. These forward-looking statements are subject to risks and uncertainties, including, among other things, those described in this Annual Report on Form 10-K under the caption "Risk Factors." Other risks, uncertainties, and factors that could cause actual results to differ materially from those projected are described below and may be described from time to time in reports we file with the Securities and Exchange Commission, or the SEC, including our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise any such forward-looking statements, whether as a result of new information, future events, or otherwise. Important factors, among others, that may affect our actual results include: changes in interest rates and the market value of our target assets; changes in prepayment rates of mortgages underlyin

Business

Item 1. Business Overview Two Harbors Investment Corp. is a Maryland corporation founded in 2009 that invests in, finances and manages mortgage servicing rights, or MSR, Agency residential mortgage-backed securities, or Agency RMBS, and, through our operational platform, RoundPoint Mortgage Servicing LLC, or RoundPoint, is one of the largest servicers of conventional loans in the country. We are structured as an internally-managed real estate investment trust, or REIT, and our common stock is listed on the New York Stock Exchange, or NYSE, under the symbol "TWO". The terms "Two Harbors," "we," "our," "us" and the "company" refer to Two Harbors Investment Corp. and its subsidiaries as a consolidated entity. We seek to leverage our core competencies of understanding and managing interest rate and prepayment risk to invest in our portfolio of MSR and Agency RMBS. Our objective is to deliver stable performance across changing market environments, and we are acutely focused on creating sustainable stockholder value over the long term. Effective September 30, 2023, one of our wholly owned subsidiaries, Matrix Financial Services Corporation, or Matrix, acquired RoundPoint from Freedom Mortgage Corporation after the completion of customary closing conditions and receiving the required regulatory and GSE approvals. Upon closing, all servicing and origination licenses and operational capabilities remained with RoundPoint, and RoundPoint became a wholly owned subsidiary of Matrix. Management believes this acquisition will add value for stakeholders of Two Harbors through cost savings achieved by bringing the servicing of our MSR portfolio in-house, greater control over our MSR portfolio and the associated cash flows, and the ability to participate more fully in the mortgage finance space as opportunities arise. We have elected to be treated as a REIT for U.S. federal income tax purposes. To qualify as a REIT, we are required to meet certain investment and operating tests

View Full Filing

View this 10-K filing on SEC EDGAR