Company: TWO-PC
Filing Date: 2025-04-29
Form Type: 10-Q
Source: 0001465740-25-000104
Chunk: 26

Company: TWO HARBORS INVESTMENT CORP.
Filing Date: 2025-04-29
Form: 10-Q
Item: Item 1
Chunk 26
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Unpaid principal balance$8,252 $2,297 Mark-to-market adjustments154 37 Total mortgage loans held-for-sale$8,406 $2,334 The following table presents a reconciliation of the Company’s mortgage loans held-for-sale for the three months ended March 31, 2025 and 2024:Three Months EndedMarch 31,(in thousands)20252024Balance at beginning of period$2,334 $332 Originations and purchases of mortgage loans28,870 1 Sales and principal collections(22,915)(50)Unrealized gains (losses) on mortgage loans117 (4)Balance at end of period$8,406 $279 The Company is subject to credit risk associated with its originated mortgage loans during the period of time prior to the sale of these loans. The Company considers credit risk associated with these loans to be minimal as it holds the loans for a short period of time and the market for these loans continues to be highly liquid.The Company has one warehouse facility to finance its mortgage loans held-for-sale. At March 31, 2025 and December 31, 2024, the Company had pledged mortgage loans held-for-sale with a carrying value of $8.1 million and $2.1 million, respectively, as collateral for this warehouse facility. See Note 15 - Warehouse Facilities.

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Table of ContentsTWO HARBORS INVESTMENT CORP.Notes to the Consolidated Financial Statements (unaudited)

Note 8. Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents include cash held in bank accounts and cash held in money market funds on an overnight basis.The Company is required to maintain certain cash balances with counterparties for securities and derivatives trading activity, servicing activities and collateral for the Company’s borrowings in restricted accounts. The Company has also placed cash in a restricted account pursuant to a letter of credit on an office space lease.The following table presents the Company’s restricted cash balances as of March 31, 2025 and December 31, 2024:(in thousands)March 31,2025December 31, 2024Restricted cash balances held by trading counterparties:For securities trading activity$700 $950 For derivatives trading activity302 43,398 For servicing activities64,286 49,900 As restricted collateral for borrowings58,489 218,715 Total restricted cash balances held by trading counterparties123