What factors drove the changes in Two Harbors's revenue and profit?

What is Two Harbors's gross profit margin?

What is the market's earnings forecast for Two Harbors next quarter?

Did Two Harbors beat or miss consensus estimates last quarter?

What is the revenue and EPS growth rate for Two Harbors year over year?

What were the key takeaways from Two Harbors’s earnings call?

What guidance did Two Harbors's management provide for the next earnings period?

What is Two Harbors's latest dividend and current dividend yield?

- **Litigation Settlement**: $375M payment resolved with no impact on liquidity; $770M cash post-settlement.
- **Portfolio Restructuring**: Sold $30B low-WAC MSR, growing sub-servicing to $40B UPB.
- **Origination Growth**: DTC platform funded $49M Q3, pipeline +$52M; recapture rates exceed expectations.
- **Financial Performance**: Adjusted EBITDA $101.5M; MSR static return 11%, common equity 9.5%-15.2%.
- **Risk Management**: Spread risk reduced 4.2% to 2.3% book value; MSR WAC 3.60%, 3% refinanceable.

**【CEO Summary Section】**
- Settled litigation with former external manager for $375M, maintaining liquidity and portfolio risk metrics.
- Sold $19.1B UPB MSR and $10.9B RMBS, transitioning to servicing-retained model for sub-servicing growth.
- Direct-to-consumer origination platform recorded $49M UPB funded in Q3, with $52M pipeline, driving recapture rates above expectations.
- MSR portfolio static return estimate 11%, securities 15%-19%, common equity 9.5%-15.2%.

**【CFO Financial Commentary】**
- Q3 net loss $80.2M ($0.77/share) including $1.68/share litigation expense; adjusted EBITDA $101.5M.
- MSR borrowings $1.7B, $939M unused capacity; RMBS repo spreads stable at 20bps.
- Cash balance $770.5M post-settlement, plans to redeem $262M convertible notes in Q1 2026.

**【CIO Portfolio Insights】**
- Agency RMBS excess return +82bps, outperforming 2023; MSR CPR +0.1%QoQ, 60+ day delinquencies <1%.
- Sub-servicing UPB $40B, targeting Ginnie Mae servicing expansion.
- MSR portfolio WAC 3.60%, 3% refinanceable; TVA/Spec pools rotated down 1.8B to 5.5s.

**【Q&A Highlights】**
- EAD up due to lower financing rates, not expected to trend; book value +1%QoQ.
- Sub-servicing growth via MSR sales and tech investments; DTC origination recapture rates exceed models.
- MSR valuations stable at 5.8x, high WAC MSR trading 4.5-5x; origination platform scales with rates.
- Leverage 7.2x, spread risk reduced 4.2% to 2.3% of book value.


TWO

TWO fundamentals

You can ask Aime