Two Harbors Investment Corp. reported a comprehensive income of $107.6 million for the fiscal year ending December 31, 2024, compared to a comprehensive loss of $49.7 million in the previous year. The company's net income attributable to common stockholders was $264.9 million, translating to earnings per share of $2.54, a significant recovery from a loss of $4.56 per share in 2023. The total assets of the company decreased to $12.2 billion from $13.1 billion in the prior year, primarily due to a reduction in available-for-sale securities, which fell from $8.3 billion to $7.4 billion.
The company experienced a decline in net interest income, which decreased to $103.8 million in Q4 2024 from $122.4 million in Q4 2023, attributed to a smaller Agency RMBS portfolio and lower average cash balances. Interest expense also decreased, reflecting lower borrowing balances, resulting in a net interest expense of $34.9 million for the fourth quarter. The servicing income for the year was $681.6 million, slightly down from $685.8 million in 2023, with net servicing income of $661.6 million, up from $590.3 million the previous year.
Strategically, Two Harbors completed the acquisition of RoundPoint Mortgage Servicing LLC in September 2023, which is expected to enhance operational efficiencies and control over its mortgage servicing rights (MSR) portfolio. The acquisition has allowed the company to bring servicing in-house, which management believes will lead to cost savings and improved cash flow management. As of December 31, 2024, the company held $3.0 billion in MSR, down from $3.1 billion in 2023, with a total of 803,091 loans underlying the MSR portfolio.
Operationally, the company reported a debt-to-equity ratio of 4.3:1.0, a decrease from 4.5:1.0 in the previous year, indicating a reduction in leverage. The company had $504.6 million in cash and cash equivalents as of year-end, providing a solid liquidity position. Looking ahead, Two Harbors anticipates a slowdown in prepayment rates due to rising mortgage rates, with expectations of prepayment rates below 4% in Q1 2025. The company remains focused on leveraging its MSR and Agency RMBS portfolio to navigate market volatility and generate stable returns for shareholders.
About TWO HARBORS INVESTMENT CORP.
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