Company: TWO-PC
Filing Date: 2025-07-29
Form Type: 10-Q
Source: 0001465740-25-000140
Chunk: 127

Company: TWO HARBORS INVESTMENT CORP.
Filing Date: 2025-07-29
Form: 10-Q
Item: Item 1
Chunk 127
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 for the three and six months ended June 30, 2025 and 2024:

Three Months EndedSix Months EndedJune 30,June 30,2025202420252024Gross yield/stated coupon5.3 %4.9 %5.1 %4.9 %Net (premium amortization) discount accretion(0.3)%(0.1)%(0.2)%(0.2)%Net yield5.0 %4.8 %4.9 %4.7 %

Net Servicing Income

The following table presents the components of net servicing income for the three and six months ended June 30, 2025 and 2024:

Three Months EndedSix Months EndedJune 30,June 30,(in thousands)2025202420252024Servicing fee income$124,409 $139,361 $250,580 $273,681 Ancillary and other fee income5,201 4,435 10,295 8,292 Float income28,744 32,219 54,338 60,375 Total servicing income158,354 176,015 315,213 342,348 Total servicing costs2,386 4,475 5,583 11,594 Net servicing income$155,968 $171,540 $309,630 $330,754 

The decrease in total servicing income for the three and six months ended June 30, 2025, as compared to the same periods 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 the lower interest rate environment, partially offset by higher ancillary and other fee income from subservicing.

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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 (loss) income. 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 (loss) income. The decrease in servicing