Company: TWO-PC
Filing Date: 2025-04-29
Form Type: 10-Q
Source: 0001465740-25-000104
Chunk: 86

Company: TWO HARBORS INVESTMENT CORP.
Filing Date: 2025-04-29
Form: 10-Q
Item: Item 1
Chunk 86
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The cost of funds associated with our convertible senior notes for the three months ended March 31, 2025, as compared to the same period in 2024, was consistent.

The following table presents the components of the yield earned on our AFS securities portfolio as a percentage of our average amortized cost of securities for the three months ended March 31, 2025 and 2024:

Three Months EndedMarch 31,20252024Gross yield/stated coupon5.0 %4.9 %Net (premium amortization) discount accretion(0.2)%(0.2)%Net yield4.8 %4.7 %

Net Servicing Income

The following table presents the components of net servicing income for the three months ended March 31, 2025 and 2024:

Three Months EndedMarch 31,(in thousands)20252024Servicing fee income$126,171 $134,320 Ancillary and other fee income5,094 3,857 Float income25,594 28,156 Total servicing income156,859 166,333 Total servicing costs3,197 7,119 Net servicing income$153,662 $159,214 

The decrease in total servicing income for the three months ended March 31, 2025, as compared to the same period in 2024, was primarily due to lower servicing fee income on a smaller MSR portfolio as a result of run-off and sales as well as lower float income due to declining interest rates, partially offset by higher ancillary and other fee income from subservicing.

As previously discussed, RoundPoint handles substantially all servicing functions for the mortgage loans underlying our MSR. For the remaining portion of our serviced mortgage assets, we contract with appropriately licensed third-party subservicers to handle the servicing functions in the name of the subservicer. All third-party subservicing costs and other servicing expenses directly related to our MSR portfolio are included within the servicing costs line item on our consolidated statements of comprehensive income (loss). All servicing-related general and administrative expenses incurred by RoundPoint are included within the compensation and benefits and other operating expenses line items on our consolidated statements of comprehensive income (loss). The decrease in servicing costs during the three months ended March 31, 2025, as compared to the same period in 2024, was the result of lower third-party subservicing fees incurred.

Loss On Investment Securities 

The following table presents the components of