Two Harbors Investment Corp. reported a significant decline in its financial performance for the third quarter of 2025, with a net loss attributable to common stockholders of $141.2 million, or $1.36 per share, compared to a loss of $250.3 million, or $2.42 per share, in the same period of 2024. The company's total revenue for the quarter was $93.6 million, down from $112.6 million year-over-year, primarily due to a decrease in interest income and servicing income. The company’s total assets decreased to $10.87 billion as of September 30, 2025, from $12.20 billion at the end of 2024, largely driven by a reduction in available-for-sale securities and mortgage servicing rights.
The company experienced a notable increase in litigation settlement expenses, which amounted to $175.1 million for the quarter and $375 million for the nine months ended September 30, 2025. This expense was related to a settlement with PRCM Advisers LLC, which significantly impacted the company's overall financial results. Additionally, the company reported a comprehensive loss of $80.2 million for the quarter, compared to a comprehensive income of $19.4 million in the prior year, reflecting the adverse effects of the litigation settlement and market conditions.
In terms of operational developments, Two Harbors completed the acquisition of RoundPoint Mortgage Servicing LLC in September 2023, which has since been consolidated into its financial results. This acquisition is expected to enhance the company's control over its mortgage servicing rights and associated cash flows. As of September 30, 2025, the company managed a mortgage servicing rights portfolio valued at $2.63 billion, down from $2.99 billion at the end of 2024, with a total of 720,038 loans serviced.
The company’s financial leverage remained high, with a debt-to-equity ratio of 4.8:1.0 as of September 30, 2025, reflecting a decrease from 5.4:1.0 in the previous quarter. The company held $770.5 million in cash and cash equivalents, providing a buffer against market volatility. Looking ahead, Two Harbors anticipates that the ongoing stability in interest rates and the potential for further Federal Reserve rate cuts will positively influence its operational performance and market conditions for its assets. The company remains focused on leveraging its investment strategy to generate stable returns while managing risks associated with interest rates and prepayment speeds.
About TWO HARBORS INVESTMENT CORP.
Two Harbors Investment Corp. is a Maryland-based REIT specializing in investing in, financing, and managing mortgage servicing rights (MSR) and Agency residential mortgage-backed securities (RMBS). It operates as a mortgage owner, servicer, and originator, leveraging expertise in interest rate and prepayment risk to generate stable, long-term shareholder value through diversified assets, risk management, and strategic capital allocation within a highly regulated industry.
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