- Delivered Comprehensive Income of $185.4 million, or $0.63 per diluted weighted average common share.
- Increased Book Value to $11.54 per diluted common share at December 31, 2012.
- Contributed portfolio of single-family residential homes to Silver Bay Realty Trust Corp. ("Silver Bay") in conjunction with its initial public offering in December 2012. In exchange, Two Harbors received approximately 17.8 million shares of Silver Bay common stock.
- Declared a dividend of $0.55 per common share. The quarterly dividend reflects the performance of Two Harbors' residential mortgage-backed securities (RMBS) portfolio, realized gains and taxable income derived from the company's contribution of its single-family residential portfolio to Silver Bay.
- Generated an aggregate yield of 4.0% in the RMBS portfolio, which was driven by non-Agency portfolio performance of 9.5% as well as a three-month average Constant Prepayment Rate (CPR) of 6.6% in the Agency portfolio.
|Two Harbors Operating Performance|
|(dollars in thousands, except per share data)||Q4-2012||Full Year 2012|
|Earnings||Earnings||Per dilutedweightedshare||Annualizedreturn onaverage equity||Earnings||Per dilutedweightedshare||Annualizedreturn onaverage equity|
|Core Earnings 1||$||83,974||$||0.28||9.8||%||$||311,085||$||1.28||12.1||%|
|GAAP Net Income||$||189,300||$||0.64||22.1||%||$||291,906||$||1.20||11.3||%|
|Dividend per common share||$||0.55|
|Book value per diluted share at period end||$||11.54|
|Other operating expenses as a percentage of average equity||0.7||%|
|(1) Core Earnings is a non-GAAP measure that the company defines as GAAP net income, excluding impairment losses, gains or losses on sales of securities and termination of interest rate swaps, unrealized gains or losses on trading securities, interest rate swaps and swaptions, certain gains or losses on derivative instruments, and certain non-recurring gains and losses related to discontinued operations. As defined, Core Earnings includes interest income associated with the company's inverse interest-only securities ("Agency Derivatives") and premium income or loss on credit default swaps.|