Company: TWO-PC
Filing Date: 2025-04-02
Form Type: DEF 14A
Source: 0001465740-25-000090
Chunk: 24

Company: TWO HARBORS INVESTMENT CORP.
Filing Date: 2025-04-02
Form: DEF 14A
Chunk 24
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 focused on creating sustainable stockholder value over the long-term.

As a REIT, we are required by the Internal Revenue Code to distribute at least 90% of our REIT taxable income annually to our stockholders in the form of dividend payments. This REIT requirement means that we are limited in our ability to grow our book value and our equity capital base through the reinvestment of retained earnings from our business operations. We produce earnings through income we generate on our investments in MSR and Agency RMBS, net of the interest we pay to finance our assets and the other expenses we incur to operate our business, and through contractual servicing fees and interest income in our mortgage loan servicing operations. The nature of our business model and our transition in 2020 to being an internally managed company are key factors the Committee considers in administering our executive compensation program and determining appropriate metrics and setting targets and goals for performance-based compensation.

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#### 2024 Performance Year Summary
The following is a summary of the company’s key accomplishments and financial performance for 2024.

| 2024 Performance Year Summary                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Since the pandemic in 2020, the investment landscape has been extremely challenging and volatile for interest rate and mortgage spread sensitive assets. Amidst this environment, we have actively managed our Agency RMBS coupon positioning across the coupon stack to extract relative value opportunities. We have also strategically increased our capital allocation to MSR, which in this environment has the characteristics of low prepayment and convexity risks, a positive cash flow, and an attractive yield.                                   |
| Interest rates and mortgage spread volatility remained elevated through 2024, driven by persistent inflationary pressures, ongoing geopolitical instability, and shifting market expectations around the Federal Reserve’s policy trajectory. In 2024, we delivered the following financial results:                                                                                                                                                                                                                                                         |
| •Reported book value of $14.47 at December 31, 2024, compared to $15.21 at December 31, 2023. Including the $1.80 per common share of dividends declared, our total economic return on book value for 2024 was 7.0%.(1)                                                                                                                                                                                                                                                                                                                                      |
| •Delivered value to our stockholders through total dividends of $1.80 per common share, equivalent to an average dividend yield of 14%.(2)                                                                                                                                                                                                                                                                                                                                                                                                                   |
| During 2024, we also accomplished several important objectives that we believe will position our company for long-term success and fulfill our