Company: TWO-PC
Filing Date: 2025-04-29
Form Type: 10-Q
Source: 0001465740-25-000104
Chunk: 67

Company: TWO HARBORS INVESTMENT CORP.
Filing Date: 2025-04-29
Form: 10-Q
Item: Item 1
Chunk 67
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 of diluted earnings per share was the effect of adding undistributed earnings reallocated to 690,043 weighted average participating RSUs as their inclusion would have been antidilutive under the two-class method. For the three months ended March 31, 2024, participating RSUs were included in the calculations of basic and diluted earnings per share under the two-class method, as it was more dilutive than the alternative treasury stock method.For the three months ended March 31, 2025, excluded from the calculation of diluted earnings per share was the effect of adding 623,727 weighted average common share equivalents related to the assumed vesting of outstanding PSUs, as their inclusion would have been antidilutive under the two-class method. For the three months ended March 31, 2024, the assumed vesting of outstanding PSUs was included in the calculation of diluted earnings per share under the two-class method, as it was more dilutive than the alternative treasury stock method. For the three months ended March 31, 2025, excluded from the calculation of diluted earnings per share was the effect of adding back $4.5 million of interest expense and 8,871,339 weighted average common share equivalents related to the assumed conversion of the Company’s convertible senior notes, as their inclusion would have been antidilutive under the two-class method. For the three months ended March 31, 2024, the assumed conversion of the Company’s convertible senior notes (under the if-converted method) was included in the calculation of diluted earnings per share under the two-class method.

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

Note 23. Segment Reporting

The Company generally derives its revenues from its investment portfolio of MSR and Agency RMBS, which includes servicing fee income, float income, ancillary and other fee income, and interest income, net of premium amortization and discount accretion, and mortgage loan origination activities established primarily to benefit the MSR portfolio through the retention or recapture of existing borrowers. The Company’s investment portfolio is subject to market risks, primarily interest rate risk, basis risk and prepayment risk. Through its investment in MSR and interest-only Agency RMBS, management seeks to offset a portion of its Agency pool market value exposure. The Company’s strategy of pairing MSR and Agency RMBS, with a focus on managing various associated risks, including interest rate, basis, prepayment, and credit and financing risk,