Two Harbors Investment Q4 earnings, book value decline in volatile market (NYSE:TWO)
MCCAIG
Two Harbors Investment (NYSE:TWO) reported on Monday Q4 adjusted earnings that were hurt by market-driven value changes in volatile markets against a high interest rate backdrop. Its book value declined during the quarter but still eked out an economic return.
Q4 EPS available for distribution of -$0.11 compared with -$0.01 in Q3. Excluding market-driven value changes, earnings were $0.39 in the most recent quarter, missing the average analyst estimate of $0.46 and down from $0.51 in the prior quarter.
Book value of $15.21 per common share at Dec. 31, 2023, fell from $15.36 at Sept. 30. That represents a 2.0% quarterly economic return on book value vs. -3.5% in Q3.
Two Harbors (TWO) stock dipped 1.8% in after-hours trading.
Interest income of $122.4M slipped from $123.6M in the prior quarter and increased from $115.6M a year ago. Net interest income of -$45.7M vs. -$49.5M in Q3 and -$16.3M in Q4 2022.
Net servicing income of $166.6M vs. $135.7M in Q4 2022.
Total expenses of $45.3M vs. $54.5M in the previous quarter and $23.0M in Q4 2022.
quarterly economic return on book value vs. -3.5% in Q3.
“We navigated extreme interest rate and spread volatility by actively managing our portfolio and increasing our allocation to MSR (mortgage servicing rights),” said President and CEO Bill Greenburg. “We also strategically managed our capital structure through the issuance of common stock and repurchases of preferred stock.”
Two Harbor’s (TWO) total portfolio rose to $14.6B at Dec. 31, 2023 from $14.2B at Sept. 30.
During the quarter, the mortgage REIT issued 7.0M shares of common stock through its at-the-market offering for total proceeds of $97.8M. It repurchased 221,806 shares of preferred stock.
Conference call on Jan. 30 at 9:00 AM ET.
Earlier, Two Harbors Investment GAAP EPS of -$4.56 misses by $4.99
