Two Harbors Investment Corp. (NYSE: TWO; NYSE MKT: TWO.WS), a real estate investment trust that invests in residential mortgage-backed securities (RMBS), residential mortgage loans, mortgage servicing rights and other financial assets, today announced its financial results for the quarter ended June 30, 2013.
- Book value was $10.47 per diluted common share, representing a (3.7%) (1) return on book value, after accounting for a cash dividend of $0.31 per share.
- Incurred Comprehensive Loss of $146.1 million, or $0.40 per diluted weighted average common share. Year-to-date Comprehensive Income of $101.9 million, a return on average equity of 5.2%, or $0.30 per diluted weighted average common share.
- Reported Core Earnings of $78.1 million, or $0.21 per diluted weighted average common share.
- Generated an aggregate yield of 3.7% in the RMBS portfolio. Yields were driven by non-Agency performance of 9.1%.
- Closed on the purchase of Matrix Financial Services, a small servicing company that has seller-servicer approvals from the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Government National Mortgage Association (Ginnie Mae) to hold and manage mortgage servicing rights (MSRs).
- Repurchased one million shares of stock at an average price of $10.50 per share, which was accretive to book value at the time of the repurchase.
“The second quarter was quite challenging with respect to rising interest rates and other factors within the mortgage market,” stated Thomas Siering, Two Harbors' President and Chief Executive Officer. “We are pleased with the portfolio repositioning that we completed in an effort to protect our book value. For the first six months of 2013, we have generated $102 million in comprehensive income, a return on average equity of 5.2%, which we believe is remarkable given conditions in the sector.”