Company: TWO-PC
Filing Date: 2025-10-28
Form Type: 10-Q
Source: 0001465740-25-000152
Chunk: 94

Company: TWO HARBORS INVESTMENT CORP.
Filing Date: 2025-10-28
Form: 10-Q
Item: Item 1
Chunk 94
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.3 million, respectively, 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 our TRSs. During the three and nine months ended September 30, 2024, we recognized a benefit from income taxes of $10.5 million and a provision for income taxes of $15.7 million, respectively. The benefit recognized for the three months ended September 30, 2024 was primarily due to net losses recognized on MSR and operating expenses incurred, offset by net income from MSR servicing and mortgage loan origination activities in our TRSs. The provision recognized during the nine months ended September 30, 2024 was primarily due to net income from MSR servicing and mortgage loan origination activities, offset by net losses recognized on MSR and operating expenses incurred in our TRSs.

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Other Comprehensive Income

The following table provides a summary of the components of other comprehensive income during the three and nine months ended September 30, 2025 and 2024:

Three Months EndedNine Months EndedSeptember 30,September 30,(in thousands)2025202420252024Unrealized gains on available-for-sale securities$53,786 $267,864 $197,119 $104,740 Realized losses on sales of available-for-sale securities reclassified to (loss) gain on investment securities7,252 1,757 71,564 17,730 Other comprehensive income$61,038 $269,621 $268,683 $122,470 

With our accounting treatment for AFS securities, unrealized fluctuations in the market values of AFS securities, excluding certain AFS securities for which we have elected the fair value option and securities with an allowance for credit losses, are recorded directly to stockholders’ equity through other comprehensive income. Additionally, we reclassify unrealized gains and losses on AFS securities in accumulated other comprehensive loss to net (loss) income upon the recognition of any realized gains and losses on sales as individual securities are sold. Fluctuations in other comprehensive income are driven by changes in fair value assumptions and the reclassification of unrealized gains and losses to realized gains and losses upon sale.

Financial Condition

The following table presents significant components of our balance sheet as of September 30, 2025 and December 31, 2024:

(in thousands)September 30,2025December 31,2024Balance Sheet Data: