Two Harbors Investment Corp. (NYSE: TWO), a real estate investment trust that invests in residential mortgage-backed securities (RMBS), residential mortgage loans, mortgage servicing rights (MSR) and other financial assets, today announced its financial results for the quarter ended March 31, 2014.
- Book value was $10.71 per diluted common share, representing a 3.9% (1) return on book value, after accounting for a dividend of $0.26 per share.
- Delivered Comprehensive Income of $152.6 million, a return on average equity of 15.7%, or $0.42 per diluted weighted average common share.
- Reported Core Earnings of $88.2 million, or $0.24 per diluted weighted average common share.
- Generated an aggregate portfolio yield of 4.6% for the quarter ended March 31, 2014, compared to an aggregate yield of 4.3% for the quarter ended December 31, 2013.
“We delivered strong first quarter results, demonstrating our ability to generate alpha in a variety of interest rate environments,” stated Thomas Siering, Two Harbors’ President and Chief Executive Officer. “Two Harbors generated comprehensive income of $152.6 million for the period, representing a 15.7% return on average equity.”
(1) Return on book value for the quarter ended March 31, 2014 is defined as the increase in book value per diluted share, from December 31, 2013 to March 31, 2014 of $0.15, plus the dividend declared of $0.26 per share, divided by December 31, 2013 diluted book value of $10.56 per share.Operating Performance The following table summarizes the company’s GAAP and non-GAAP earnings measurements and key metrics for the first quarter of 2014:
|Two Harbors Operating Performance|
|(dollars in thousands, except per share data)||Q1-2014|
|Per diluted||return on|
|Core Earnings (1)||$||88,203||$||0.24||9.1||
|GAAP Net Loss||$||(29,145||)||$||(0.08||)||(3.0||)%|
|Dividend per common share||$0.26|
|Book value per diluted share at period end||$10.71|
|Other operating expenses as a percentage of average equity||1.5||%|