Company: TWO-PC
Filing Date: 2025-04-29
Form Type: 10-Q
Source: 0001465740-25-000104
Chunk: 251

Company: TWO HARBORS INVESTMENT CORP.
Filing Date: 2025-04-29
Form: 10-Q
Item: Item 2
Chunk 251
---
 (loss) on mortgage loans held-for-sale$669 $(3)

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.

52

Expenses

The following table presents the components of expenses for the three months ended March 31, 2025 and 2024:

Three Months EndedMarch 31,(dollars in thousands)20252024Compensation and benefits:Non-cash equity compensation expenses$6,523$6,083All other compensation and benefits20,06620,446Total compensation and benefits$26,589$26,529Other operating expenses:Certain operating expenses (1)$106$1,198All other operating expenses20,39919,854Total other operating expenses$20,505$21,052Annualized operating expense ratio8.7 %8.5 %Annualized operating expense ratio, excluding non-cash equity compensation and certain operating expenses (1)7.5 %7.2 %

____________________

(1)Certain operating expenses predominantly consists of expenses incurred in connection with the Company’s ongoing litigation with PRCM Advisers, as discussed within Note 17 to the consolidated financial statements, included under Item 1 of this Quarterly Report on Form 10-Q. 

The decrease in total operating expenses during the three months ended March 31, 2025, as compared to the same period in 2024, was driven by lower expenses incurred in connection with the Company’s ongoing litigation with PRCM Advisers, partially offset by slightly higher operating expenses. 

Income Taxes

During the three months ended March 31, 2025, we recognized a provision for income taxes of $0.4 million, which was primarily due to net income from MSR servicing and mortgage loan origination activities, partially offset by net losses recognized on MSR and operating expenses incurred in our TRSs. During the three months ended March 31, 2024, we recognized a provision from income taxes of $12.0 million, which was primarily due to net income from MSR servicing activity and net gains recognized on MSR, partially offset by operating expenses incurred on our TRSs.

Other Comprehensive Income (Loss)

The following table provides a summary of the components of other comprehensive income (loss) during the three months ended March 31, 2025 and