Company: TWO-PC
Filing Date: 2025-07-29
Form Type: 10-Q
Source: 0001465740-25-000140
Chunk: 121

Company: TWO HARBORS INVESTMENT CORP.
Filing Date: 2025-07-29
Form: 10-Q
Item: Item 1
Chunk 121
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 as well as delays in the timing in which funding is provided, insufficient collateral or the inability to meet lenders’ eligibility requirements for specific types of asset classes. 

We also monitor exposure to our MSR counterparties. We may be required to make representations and warranties to investors in the loans underlying the MSR we own; however, some of our MSR were purchased on a bifurcated basis, meaning the representation and warranty obligations remain with the seller. If the representations and warranties we make prove to be inaccurate, we may be obligated to repurchase certain mortgage loans, which may impact the profitability of our portfolio. Although we obtain similar representations and warranties from the counterparty from which we acquired the relevant asset, if those representations and warranties do not directly mirror those we make to the investor, or if we are unable to enforce the representations and warranties against the counterparty for a variety of reasons, including the financial condition or insolvency of the counterparty, we may not be able to seek indemnification from our counterparties for any losses attributable to the breach.

52

Summary of Results of Operations and Financial Condition

Our book value per common share for U.S. GAAP purposes was $12.14 at June 30, 2025, a decrease from $14.66 per common share at March 31, 2025, and a decrease from $14.47 per common share at December 31, 2024. The decline in book value for both the three and six months ended June 30, 2025 was primarily driven by the loss contingency accrual of $199.9 million that was recorded in connection with our ongoing litigation with PRCM Advisers, net mark-to-market losses on MSR and derivative instruments and dividends declared, partially offset by net interest and servicing income and net mark-to-market gains recognized on investment securities. For further details regarding the loss contingency accrual recognized, refer to Note 14 - Commitments and Contingencies to the consolidated financial statements, included in this Quarterly Report on Form 10-Q. Our comprehensive loss attributable to common stockholders was $221.8 million and $156.9 million for the three and six months ended June 30, 2025, respectively, as compared to comprehensive income attributable to common stockholders of $0.5 million and $89.8 million for the three and six months ended June 30, 2024, respectively.

53

The following table presents the components of our comprehensive (loss) income for the three and six months ended June