Financial Performance - Generated comprehensive income of $64.9 million, or $0.62 per weighted average basic common share, compared to a loss of $1.6 million in the previous quarter[5] - The company reported a net loss attributable to common stockholders of $(92,241) thousand in Q1 2025, a decline from net income of $192,448 thousand in Q1 2024[31] - Comprehensive income attributable to common stockholders was $64,931 thousand in Q1 2025, down from $89,370 thousand in Q1 2024[31] - Basic loss per share was $(0.89) in Q1 2025, compared to earnings of $1.85 per share in Q1 2024[31] - Net interest income decreased to $(20,332) thousand in Q1 2025 from $(42,217) thousand in Q1 2024, reflecting a significant improvement[31] - Total interest income fell to $111,382 thousand in Q1 2025, down 5.9% from $117,783 thousand in Q1 2024[33] - Net servicing income decreased slightly to $153,662 thousand in Q1 2025 compared to $159,214 thousand in Q1 2024[31] - The unrealized loss on available-for-sale securities was $(157,172) thousand in Q1 2025, compared to an unrealized gain of $(103,078) thousand in Q1 2024[36] - Earnings available for distribution to common stockholders increased to $25,092 thousand in Q1 2025 from $21,181 thousand in Q4 2024[36] - The company’s total expenses remained relatively stable at $47,094 thousand in Q1 2025, compared to $47,581 thousand in Q1 2024[31] Balance Sheet and Assets - Reported book value of $14.66 per common share, with a declared dividend of $0.45 per share, resulting in a 4.4% quarterly economic return on book value[4] - The company's total portfolio was valued at $14.59 billion, with $11.6 billion in Agency RMBS, MSR, and other investment securities[8] - The Agency RMBS portfolio comprised $8.63 billion, representing 74.4% of the total portfolio, with a weighted average coupon rate of 6.1%[9] - Available-for-sale securities at fair value increased to $8,606,870 thousand as of March 31, 2025, compared to $7,371,711 thousand as of December 31, 2024, a growth of 16.7%[30] - Total assets grew to $13,683,313 thousand as of March 31, 2025, from $12,204,319 thousand as of December 31, 2024, reflecting an increase of 12.1%[30] - Total liabilities increased to $11,536,524 thousand as of March 31, 2025, from $10,081,810 thousand as of December 31, 2024, a rise of 14.4%[30] - The company reported a cumulative earnings of $1,569,730 thousand as of March 31, 2025, down from $1,648,785 thousand as of December 31, 2024[30] - The cash and cash equivalents increased to $573,882 thousand as of March 31, 2025, compared to $504,613 thousand as of December 31, 2024, an increase of 13.7%[30] Borrowings and Leverage - Total borrowings increased to $10.94 billion, with a weighted average borrowing rate of 4.73%[15] - Total borrowings increased to $10,942,563 thousand as of March 31, 2025, from $9,087,489 thousand as of December 31, 2024, representing an increase of 20.4%[16] - The debt-to-equity ratio at period-end rose to 5.1:1.0 from 4.3:1.0, indicating increased leverage[16] - The annualized cost of financing decreased to 5.27% for the three months ended March 31, 2025, down from 5.79% for the previous quarter[16] Mortgage Servicing Rights (MSR) - Settled $174.9 million in unpaid principal balance (UPB) of mortgage servicing rights (MSR) and committed to purchase $1.7 billion UPB of MSR through two bulk acquisitions post quarter-end[4] - As of March 31, 2025, the MSR portfolio had a weighted average gross coupon rate of 3.46% and a 60+ day delinquency rate of 0.85%, up from 0.69% as of December 31, 2024[4] - The company reported a net servicing fee of 25.3 basis points for the MSR portfolio, with 60+ day delinquencies at 0.8%[12] Company Overview and Future Plans - The company is a real estate investment trust focused on mortgage servicing rights and residential mortgage-backed securities[23] - The company plans to host a conference call on April 29, 2025, to discuss its first quarter 2025 financial results[22] - The company maintained high levels of excess liquidity while keeping risk exposures low amid a volatile macroeconomic environment[3]
Two Harbors Investment (TWO) - 2025 Q1 - Quarterly Results