Company: TWO-PC
Filing Date: 2025-07-29
Form Type: 10-Q
Source: 0001465740-25-000140
Chunk: 196

Company: TWO HARBORS INVESTMENT CORP.
Filing Date: 2025-07-29
Form: 10-Q
Item: Item 8
Chunk 196
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 a result of a fair value option election. The following table presents the carrying value of Company’s mortgage loans held-for-sale as of June 30, 2025 and December 31, 2024:(in thousands)June 30,2025December 31,2024Unpaid principal balance$9,660 $2,297 Mark-to-market adjustments228 37 Total mortgage loans held-for-sale$9,888 $2,334 

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

The following table presents a reconciliation of the Company’s mortgage loans held-for-sale for the three and six months ended June 30, 2025 and 2024:Three Months EndedSix Months EndedJune 30,June 30,(in thousands)2025202420252024Balance at beginning of period$8,406 $279 $2,334 $332 Originations and purchases of mortgage loans48,669 50 77,539 51 Sales and principal collections(47,260)(51)(70,175)(101)Unrealized gains (losses) on mortgage loans73 — 190 (4)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