Company: TWO-PC
Filing Date: 2025-04-29
Form Type: 10-Q
Source: 0001465740-25-000104
Chunk: 189

Company: TWO HARBORS INVESTMENT CORP.
Filing Date: 2025-04-29
Form: 10-Q
Item: Item 8
Chunk 189
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 ended March 31, 2025 and 2024:

Three Months EndedMarch 31,(dollars in thousands)20252024Compensation and benefits:Non-cash equity compensation expenses$6,523$6,083All other compensation and benefits20,06620,446Total compensation and benefits$26,589$26,529Other operating expenses:Certain operating expenses (1)$106$1,198All other operating expenses20,39919,854Total other operating expenses$20,505$21,052Annualized operating expense ratio8.7 %8.5 %Annualized operating expense ratio, excluding non-cash equity compensation and certain operating expenses (1)7.5 %7.2 %

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(1)Certain operating expenses predominantly consists of expenses incurred in connection with the Company’s ongoing litigation with PRCM Advisers, as discussed within Note 17 to the consolidated financial statements, included under Item 1 of this Quarterly Report on Form 10-Q. 

The decrease in total operating expenses during the three months ended March 31, 2025, as compared to the same period in 2024, was driven by lower expenses incurred in connection with the Company’s ongoing litigation with PRCM Advisers, partially offset by slightly higher operating expenses. 

Income Taxes

During the three months ended March 31, 2025, we recognized a provision for income taxes of $0.4 million, 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 months ended March 31, 2024, we recognized a provision from income taxes of $12.0 million, which was primarily due to net income from MSR servicing activity and net gains recognized on MSR, partially offset by operating expenses incurred on our TRSs.

Other Comprehensive Income (Loss)

The following table provides a summary of the components of other comprehensive income (loss) during the three months ended March 31, 2025 and 2024:

Three Months EndedMarch 31,(in thousands)20252024Unrealized gains (losses) on available-for-sale securities$110,220 $(109,658)Realized losses on sales of available-for-sale securities reclassified to loss on investment securities46,952 6,580 Other comprehensive income (loss)$157,172 $(103,078)

With our accounting treatment for AFS