Company: TWO-PC
Filing Date: 2025-07-29
Form Type: 10-Q
Source: 0001465740-25-000140
Chunk: 60

Company: TWO HARBORS INVESTMENT CORP.
Filing Date: 2025-07-29
Form: 10-Q
Item: Item 1
Chunk 60
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)Balance at end of period$9,888 $278 $9,888 $278 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 utilizes repurchase agreements and warehouse lines of credit to finance its mortgage loans held-for-sale. At June 30, 2025 and December 31, 2024, the Company had pledged mortgage loans held-for-sale with a carrying value of $9.5 million and $2.1 million, respectively, 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 June 30, 2025 and December 31, 2024:(in thousands)June 30,2025December 31,2024Restricted cash balances held by trading counterparties:For securities trading activity$600 $950 For derivatives trading activity37,080 43,398 For servicing activities58,165 49,900 As restricted collateral for borrowings44,569 218,715 Total restricted cash balances held by trading counterparties140,414 312,963 Restricted cash balance pursuant to letter of credit on office lease67 65 Total$140,481 $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 June 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)June 30,2025December 31,2024Cash and cash equivalents$657,816 $504,613 Restricted cash140,481 313,028 Total cash, cash equivalents and restricted cash$798,297 $817,641