Company: TWO-PC
Filing Date: 2025-10-28
Form Type: 10-Q
Source: 0001465740-25-000152
Chunk: 23

Company: TWO HARBORS INVESTMENT CORP.
Filing Date: 2025-10-28
Form: 10-Q
Item: Item 1
Chunk 23
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-for-sale with a carrying value of $12.4 million as collateral for its repurchase agreements and warehouse line of credit. At December 31, 2024, the Company had pledged mortgage loans held-for-sale with a carrying value of $2.1 million as collateral for its warehouse line of credit. See Note 13 - Financing.

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 September 30, 2025 and December 31, 2024:(in thousands)September 30,2025December 31,2024Restricted cash balances held by trading counterparties:For securities trading activity$350 $950 For derivatives trading activity50,827 43,398 For servicing activities46,730 49,900 As restricted collateral for borrowings18,414 218,715 Total restricted cash balances held by trading counterparties116,321 312,963 Restricted cash balance pursuant to letter of credit on office lease67 65 Total$116,388 $313,028 The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported on the Company’s consolidated balance sheets as of September 30, 2025 and December 31, 2024 that sum to the total of the same such amounts shown in the consolidated statements of cash flows:(in thousands)September 30,2025December 31,2024Cash and cash equivalents$770,533 $504,613 Restricted cash116,388 313,028 Total cash, cash equivalents and restricted cash$886,921 $817,641 

Note 9. Derivative Instruments and Hedging Activities

The Company enters into a variety of derivative and non-derivative instruments in connection with its risk management activities. The primary objective for executing these derivative and non-derivative instruments is to mitigate the Company’s economic exposure to future events that are outside its control, principally cash flow volatility associated with interest rate risk (including associated prepayment risk). Specifically, the Company enters into derivative and non-derivative