Company: TWO-PC
Filing Date: 2025-04-29
Form Type: 10-Q
Source: 0001465740-25-000104
Chunk: 65

Company: TWO HARBORS INVESTMENT CORP.
Filing Date: 2025-04-29
Form: 10-Q
Item: Item 1
Chunk 65
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 expected to be recognized over a weighted average period of 2.3 years.

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

Note 20. Interest Income and Interest Expense

The following table presents the components of the Company’s interest income and interest expense for the three months ended March 31, 2025 and 2024:Three Months EndedMarch 31,20252024Interest income:Available-for-sale securities$100,418 $100,605 Mortgage loans held-for-sale53 1 Other10,911 17,177 Total interest income111,382 117,783 Interest expense:Repurchase agreements107,078 118,716 Revolving credit facilities20,126 30,247 Warehouse facilities55 — Term notes payable— 6,418 Convertible senior notes4,455 4,619 Total interest expense131,714 160,000 Net interest expense$(20,332)$(42,217)

Note 21. Income Taxes

For the three months ended March 31, 2025 and 2024, the Company qualified to be taxed as a REIT under the Internal Revenue Code for U.S. federal income tax purposes. As long as the Company qualifies as a REIT, the Company generally will not be subject to U.S. federal income taxes on its taxable income to the extent it annually distributes its net taxable income to stockholders, and does not engage in prohibited transactions. The Company intends to distribute 100% of its REIT taxable income and comply with all requirements to continue to qualify as a REIT. The majority of states also recognize the Company’s REIT status. The Company’s TRSs file separate tax returns and are fully taxed as standalone U.S. C corporations. It is assumed that the Company will retain its REIT status and will incur no REIT level taxation as it intends to comply with the REIT regulations and annual distribution requirements.During the three months ended March 31, 2025, the Company 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 the Company’s TRSs. During the three months ended March 31, 2024, the Company recognized a provision for income taxes of $12.0 million, which