Company: TWO-PC
Filing Date: 2025-02-18
Form Type: 10-K
Source: 0001465740-25-000083
Chunk: 86

Company: TWO HARBORS INVESTMENT CORP.
Filing Date: 2025-02-18
Form: 10-K
Item: Item 7
Chunk 86
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 ended December 31, 2024, as compared to the same period in 2023, was primarily due to declining interest rates, as well as a greater portion of our MSR financing from repurchase agreements versus revolving credit facilities. Our repurchase agreements, on average, carry lower floating rate spreads than our revolving credit facilities. The increase in cost of funds associated with the financing of MSR assets and related servicing advance obligations for the year ended December 31, 2024, as compared to the same period in 2023, was the result of rising interest rates throughout the first half of 2024. We have one revolving credit facility in place to finance our servicing advance obligations, which are included in other assets on our consolidated balance sheets.

Late in the second quarter of 2024, RoundPoint began operating its in-house, direct-to-consumer originations platform. Prior to the launch of originations, our mortgage loans held-for-sale consisted of a small number of loans purchased from the collateral underlying our MSR, which were not pledged for any form of financing.

The cost of funds associated with our convertible senior notes for the three and twelve months ended December 31, 2024, as compared to the same periods in 2023, was consistent.

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The following table presents the components of the yield earned on our AFS securities portfolio as a percentage of our average amortized cost of securities for the three and twelve months ended December 31, 2024 and 2023:

Three Months EndedYear EndedDecember 31,December 31,(in thousands)2024202320242023Gross yield/stated coupon5.0 %4.8 %5.0 %4.9 %Net (premium amortization) discount accretion(0.3)%(0.1)%(0.2)%(0.3)%Net yield4.7 %4.7 %4.8 %4.6 %

Net Servicing Income

The following table presents the components of net servicing income for the three and twelve months ended December 31, 2024 and 2023:

Three Months EndedYear EndedDecember 31,December 31,(in thousands)2024202320242023Servicing fee income$127,928 $139,798 $528,206 $555,221 Ancillary and other fee income4,498 2,913 16,718 5,149 Float income35,142 35,