The following is a summary of the Two Harbors Investment Corp. (TWO) Q1 2024 Earnings Call Transcript:
Financial Performance:
Two Harbors' book value increased to $15.64 per share, indicating a 5.8% total economic return for the first quarter.
Comprehensive income for Q1 was $89.4 million or $0.85 per weighted average common share.
An overall net servicing income of $159 million was reported for the quarter.
The company repurchased approximately 485,000 shares of preferred stock in Q1, decreasing the ratio of preferred stock to the total equity.
By the end of March, the company's Mortgage Servicing Rights (MSR) portfolio had an unpaid percentage balance of $215 billion.
Other financial outlays included $4.6 million for convertible senior notes and $100.6 million for RMBS interest expense. An additional interest income of $17 million was also made.
Business Progress:
Successful transfer of servicing to RoundPoint's platform with a final transfer of around 52,000 loans expected in June.
End of Q1 resulted in a total of $602 million of unused MSR financing capacity and $135 million of unused capacity for servicing advances.
Strong expertise as an MSR investor is expected to service MSR for new capital, with anticipation of continued strong demand.
The company remains consistent in their approach to hedging with a focus on maintaining low interest rate exposures.
Notwithstanding the potential near-term market volatility associated with the Federal Reserve's MBS selling, Two Harbors is confident in its long-term market exposure strategy.
Two Harbors has been making disciplined purchases and actively bidding in the market to achieve desirable returns despite an increasingly competitive field.
More details: Two Harbors Investment IR
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