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 (MSRs) and other financial assets, today announced its financial results for the quarter ended September 30, 2013.
- Book value was $10.35 per diluted common share, representing a 1.5% (1) return on book value, after accounting for a dividend of $0.28 per share.
- Delivered Comprehensive Income of $54.0 million, or $0.15 per diluted weighted average common share. Comprehensive Income for the nine months ended September 30, 2013 of $155.9 million, a return on average equity of 5.4%, or $0.45 per diluted weighted average common share.
- Reported Core Earnings of $67.7 million, or $0.19 per diluted weighted average common share.
- Generated an aggregate yield of 4.0% in the RMBS portfolio. Yields driven primarily by non-Agency performance of 9.0%.
- The company made progress towards allocating capital to mortgage servicing rights (MSRs) through a two-year flow sale agreement with PHH Mortgage Corporation to acquire MSRs on newly originated residential mortgage loans and advanced negotiations with other MSR sellers that may result in additional investments in the near-term.
- Completed Agate Bay Mortgage Trust 2013-1, a $434 million securitization of residential mortgage loans.
- Repurchased 1.45 million shares of stock at an average price of $9.23 per share, which was accretive to book value.
“For the first nine months of the year, we have generated $156 million in comprehensive income, representing a return on average equity of 5.4% and demonstrating the ongoing alpha generation of our portfolio,” stated Thomas Siering, Two Harbors’ President and Chief Executive Officer. “We are pleased to have entered into a partnership with PHH Mortgage Corporation for a flow sale MSR arrangement and are also on-track to make other substantial investments in MSR in the near-term.”