Company: TWO-PC
Filing Date: 2025-10-28
Form Type: 10-Q
Source: 0001465740-25-000152
Chunk: 258

Company: TWO HARBORS INVESTMENT CORP.
Filing Date: 2025-10-28
Form: 10-Q
Item: Item 8
Chunk 258
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Interest Expense

Interest expense decreased to $117.1 million and $385.5 million for the three and nine months ended September 30, 2025, respectively, from $154.9 million and $469.1 million for the same periods in 2024, primarily due to decreases in average borrowings outstanding on the lower Agency RMBS and MSR portfolios as well as the lower overall interest rate environment.

Net Interest Income

The following tables present the components of interest income and average net asset yield earned by asset type, the components of interest expense and average cost of funds on borrowings incurred by collateral type, and net interest income and average net interest spread for the three and nine months ended September 30, 2025 and 2024: 

Three Months Ended September 30, 2025Nine Months Ended September 30, 2025(dollars in thousands)Average Balance (1)Interest Income/ExpenseNet Yield/Cost of FundsAverage Balance (1)Interest Income/ExpenseNet Yield/Cost of FundsInterest-earning assets:Available-for-sale securities$6,751,460 $83,763 5.0 %$7,902,482 $293,023 4.9 %Mortgage loans held-for-sale7,280 125 6.9 %6,203 323 6.9 %Reverse repurchase agreements233,987 2,560 4.4 %234,699 7,668 4.4 %Other7,167 21,065 Total interest income/net asset yield$6,992,727 $93,615 5.4 %$8,143,384 $322,079 5.3 %Interest-bearing liabilities:Borrowings collateralized by:Available-for-sale securities$6,451,062 $73,310 4.5 %$7,532,310 $258,146 4.6 %Agency Derivatives (2)87,905 1,084 4.9 %39,969 1,475 4.9 %Mortgage servicing rights and advances (3)1,752,926 34,625 7.9 %1,818,745 107,233 7.9 %Mortgage loans held-for-sale7,218 125 6.9 %6,005 309 6.9 %Unsecured borrow