TWO - Earnings call transcript Q4 2024 | Two Harbors Investment Corp.

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Operator

Good morning. My name is Maddie, and I will be your conference facilitator. At this time, I would like to welcome everyone to the TWO Fourth Quarter 2024 Earnings Call. [Operator Instructions] I will now like to turn the call over to Maggie Karr.

Margaret Field

Good morning, everyone, and welcome to our call to discuss TWO's fourth quarter 2024 financial results. Interim call Executive are Chief Officer; and Dellal, the President Greenberg, release Investment of filed the and twoinv.com. our on the earnings website William Chief Officer. The website and SEC, Nick our been me this Bill the morning our as on with as available Officer; at press presentation With Financial Chief Letica, well today's are Investor have with SEC's associated call and Relations page our presentation, and non-GAAP release call. earnings have we provided you to our In this today's GAAP of we conjunction financial urge reconciliations with and measures information to review in

Form Except expectations. SEC. turn As does a disclaims Page X with are the will do are and as that law, which subsequent and update described so. I may presentation reminder, any forward-looking statements, our of reports TWO filed uncertainties to Bill. by and and comments from call our may over cause include to These statements to forward-looking not to required results risks will the XX-K on subject obligation our the in today be materially now differ

William Greenberg

welcome Thank quarter call. fourth everyone, you, and to earnings Maggie. morning, Good our

I'd XXXX. a our greatly. Please results, team adviser X. served who our take trusted him to of was Slide and TWO to He member will to in me to of remember a as and turning management October personally Before away and to to our our company's and inception turn this moment Directors of miss Board partner since we a Sanders, Reid Reid member, like passed month. our Board

which, share, was stock quarter book X.X% XX economic represented dividend return at and of value book $XX.XX fourth per per December common common value. quarterly on a $X.XX the Our including share

the economic past rate the the value. Please on market's of book to year over Figure XXXX, total X.X% the return year. of policy for Fed's we turn full interest Slide X evolution a X. the shows generated For expectations

was X Chairman XX inflation expectations delivered the the the Fed from robust December the than jobs by of cuts along the XXXX. Indeed, points shown at for over worth had of quarter, meeting, the blue reconsidered, the line. rate line. Powell beginning quarter, Fed's basis cuts While comments the the by additional more market by of Fed point pricing But purple XXX fourth points quarter, the roughly basis data, in the hawkish only basis seen as at and in end market XX with pricing tempered

finish X-year quarter, by to the Figure the Over in treasury to increased up while X.XX%, went seen points XX XX-year the basis by the as basis XX points, yield at yield points XX basis curve by X. steepening X.XX%,

of help MSR the being will housing the high like rate and the cutting to inflation remain is with to value pauses portfolios slow, which that benefit muted reemerges or Fed keep remains correlate may or decline While short-term rates are mortgage XXXX, so-called data-dependent. a the At likely rates to rates Further, level, rates. Rather, mortgage does a short-term to the very in yet treasury should risk effect a biggest likely incidentally above decline cycle. not also future ours. Interest the the term. decline lock-in is intermediate in that necessarily X% our the in longer-term activity in reverses it's rates volatility and Fed foreseeable that prepayments for rate remain expectation

$XX.X clients. Slide year-end, for billion are X. which serviced to that our favorable continue At interest of generate strategy XX,XXX and turn fluctuations billion XXX,XXX UPB to funding UPB in low will any independent of rate believe of exposure we Fed-driven third-party serviced rates. Please our MSR-centric We loans, $XXX keep MSR returns short-term across or

in costs improved largely gone the MSR streams to increased integration economics out we concludes that company from back, XXXX. In revenue and particular, say estimated the pleased lower August the TWO due own I'm reaping from laid that and to portfolio. our mortgage of already are that servicing we operating of Looking and according to the loans has plan XXXX year owning full RoundPoint our we first into

have loan new this from the economies benefited our additional and through hedge of to underlying primarily of flows interest speeds the platform benefited rates and as we prepayment previously precipitously. which of servicing effort scale being protect cash asset, borrower the MSR the we maintaining a our direct-to-consumer moves refinances Specifically, our into increased loans assets portfolio our origination portfolio servicing current mortgage of when with or recapture sub-servicers product. We faster-than-expected serves from the us. In should drop to XXXX, not a had a intent launched from think also that

than of brand-new looking we risks minimis legacy the in loans proof With incremental mortgage small de In far. in currently all and is rates many to platform shareholders. MSR success and X%, challenge bring platform year, for roughly that are our portfolio, of our to UPB affects and the to benefit from to rates in would ways from originations, X%, a servicing another With XXXX while giving weighted of bring mortgage the average X and benefits with servicing, of concepts in rates. up entirely $XX TWO's UPB and to $XX the platform these the our in for success of with directly north the currently first less rate pipeline. We X.XX% background, equity funded we and ultra-low of note value customers no refinance. The cost. small MSR our a term mortgage value progress scale. Despite number contribution the portfolio the a stood re-financeable but only thus up this returns revenue we of a million mortgages around of scratch and Taken opportunity pleased quarter, a fully million which X.X% are their to of extract portfolio from back our numbers, utilizing recognize of circles we MSR approximately customers are rate that very are together, as there's positive not which portfolio. With the to

efficiencies to half We we latter the UPB both year, the originating lien our brand of to in customers in applications. dedicated a as strong the the we borrowers. focus to combination in to to so their expected for our intend all and our especially will offer remain the on in are From RoundPoint open-ended above experience own loans equity million and closed-end through at to acted $XX expand to we loans. a began our rates cost and include use home on servicing, perspective, likely additional And a of X% effort, AI turn of creating generating technology customer is quarter, broker In in second a mortgage this mortgage for platform needs. which name. With and loans XXXX,

core Our with implied generate cash of interest that of X/X the MSR. of to volatility. results in reflective of capital forward, With on should the levels rates. RMBS almost basis, continued on regardless is stable MSR asset spreads our our of XXXX going its short-term roughly path flows of of XXX focus elevated rate that relatively wide interest a remain out demonstrated hedged points portfolio money, the benefits allocated basis nominal

like offerings to While more us return and attractive, is risks we a hand XXXX are portfolio financial way regarding at securities the RMBS of in product proud we RoundPoint RMBS still to results. going. With where have our tremendously that tighten, I'd to but year to in cannot. I'm outlook what make accomplished and XXXX are the to I'm owning process only that, efforts and we have of our saw shape very the improvements past a in profile about the over William spreads call continue allow balanced. The excited discuss for meaningfully made

William Dellal

turn to Thank Bill. X. you, Please Slide

$XX.XX to already the share $X.XX flat return, Bill $XX.XX on compared XX stock at mentioned. economic value per common this Including September resulted December as quarterly has in book Our was dividend, a XX.

fourth $X.X return the share turn by of interest to to we X.X%. Please For borrowing the of the in incurred balances quarter company sales result due quarter. million in million fourth generated was $XX $X.X economic The average or loss weighted per Slide X. RMBS a lower common million expense a an comprehensive $X.XX of RMBS. Net year, as lower of of

MSR portion spreads. the higher minus is on offset income partially average overall rates This due lower was average, our servicing from $XXX average by This quarter to higher the rates. and rate lower earned Additionally, of by slightly offset given servicing and collections from decline financing lower borrowing higher MSR balances million, repurchase third slightly lower $X we down in earned. MSR-related floating resulting to was servicing the was on outstanding fee subservicing-related float income The float agreements, nonoperating facilities carry credit which, a VFN income from shifted million of balances. Net costs. balances lower short-term

a expected, yields, million in securities in swung quarter. As OCI gain the due $XXX million a higher and $XXX to in third to quarter the gains of fourth loss investment changes of from

net loss million as a in in and to other showed of realized MSR decline Additionally, valuation fourth swap in values from change opposed $XX after slightly resulting changes quarter. resulted TBAs by our lower to hedges loss compared maturity the to million repurchase spread RMBS for throughout Higher lower $XX.X with agreements runoff in derivative rather in third together million quarter movements were turn the in quarter, in compared assets to The RMBS spreads was in due a of $XX.X of at historical anticipated swaps the days swap XX quarter of $XXX.X million to fourth third in Slide in result quarter. Runoff the reverted remained $XXX million in RMBS plus X. at Agency and rates a of the derivative spreads of in quarter. Please uncertainty a quarter for of third are lower is quarter. to normal assets ranges $XX.X decline other that well third of of quarter basis to into gains Fed to was and negative in change the XX and positive MSR year-end fourth uneventful dissipated million and futures, the are more swap XX XXXX $XXX net markets in third million funding prepayment markets about early pressures a and and $XX sum than points. In and SOFR year-end in the quarter, the and retrospect, gain and losses basis sale a third Concerns portfolio quarter in and context. At a offset $XX.X to market the indications normalizing declined weighted end our to securities look gains hedge change the at the million days plus XX repo gains the changes as in market the million a OCI, funding gain quarter average fourth rates. It SOFR asset QX. loss $XXX.X have from to in stable as the shows and compared The XX isolation. prepayments end, our the UPB the movement in rates actions points. the for available around in in in have investment the a tighter around servicing million back projected interest days was servicing income. The important in of net funding

quarter under disruption to across in borrowings $XXX servicing MSR to that $XX maturity avoid outstanding asset occur. We the with unused total capacity XX December for and the now intentionally our with financing sometimes activities can quarter billion any lower to bilateral funding are Nick. advances. I turn past X $X.X million at in third roll year-end lenders days the facilities. as Our MSR million capacity typically a call We ended finance over unused we in of repos in of will

Nicholas Letica

Thank you, William.

Before and quarter, mortgage mortgage detail, of interesting usual I was playbook. as exactly in the and performance the level. This quarter recent mortgage quarter particularly spreads slides most risk the let's at our quarter with a X.Xs launch bit a little up. performance didn't total, follow started exposure with we spread In less into than any for provide talk fourth about high more the an

we to let increase, our performance. our As and spreads rates spread rose positively which contributed widened, exposure

was our rates speeds, October, in prepayment which aided MSR re-hedging performance. rise Our impacted by though the triggered slower-than-expected a quick fair MSR in of amount

terms rates As the of discussed duration earnings as in last of both our varies quarter's coupon we and in call, exposure. MSR move, risk

RMBS and presidential and exposure rates sell increased In in have coupons. interest rates many election, to rates volatility and it duration of which means rates of mortgage in Higher for spreads. into month typically wider book spiked performance ahead the our trouble at practice, spelled having negatively declines As mortgage prices that a REIT the did and higher October due as again values. to affected increase, lower shifts like some at October higher

decisive index investors have leading prior plus compared from basis yet quarterly the mortgage to the excess points, curve minus Over reaction X pushed based aggressively turned However, following December the muted election basis by time in to that market, XX yet rates. the XX-year XX to the spreads in the would rates was higher the hawkish net return by and points, not in November, positive comments of the XX and yield a notable. Fed basis the return increased returned spreads in treasury the results, to points. Though in drove again move index excess periods a to flattened period, that of predicted X-month X-year slope recovery on been treasury basis points XX-year

weighted and turning form, positive the in across to into the index varied widely. Higher heavily performance. Jumping especially turn coupons performance lower Slide outperformed, hedged stack a X. the course, deck, in please coupons, is pool Of return to

at billion, including and was XX $X.X portfolio TBAs. positions Our $XX.X December in in $XX.X billion billion settled

to as spreads Figure our X, debt mortgage to spread slightly more attractive more quarter. decreased see range you as economic into increased became can X.Xx, a in Our normal in though exposure the equity

by in said overall one have we manage be and is can't leverage we of itself As risks risk. the taken exposure past, it our assess to but many

curve We rates across manage continue our to to exposure the closely.

see You XX. risk appendix on Slide our on turn more XX. Please to Slide can detail exposures

of spread the on rates while at shift XXX to spread averages. mortgage Figure volatility X-year increased on XX spread level option-adjusted middle spreads an declined than X, Implied curve, wider finished rate profile. The the plus points at XXXX. has longer-term averages, the from the volatility annualized basis, Xs between of at option-adjusted current The basis nominal gauge, basis from nominal of preferred the options X.Xs spreads volatility parts return widening risk-adjusted some As implied and longer-term for interest XXX the cycle, coupons wider remained finished to XX. higher current XX-year of spread you points on can from this close right while improving points the basis materially of earlier TBA are end. by XX of basis X reflects start to X% in quarter a Note points its in quarter see something range and that our coupon in the about treasury

spread spread can As flattened around compared shows curve portfolio. end. see turn in this picking pools to with of Agency RMBS higher the the risk to peak diminished. Please Figure the at steepened with to Figure X% we spreads our nominal you X, prepayment quarter Slide up review coupon TBAs specified curve The as X performance own OAS quarter. coupons the throughout XX

by the underperformed Figure least and at rate bear by that given ticked earlier, interest pools steepened hedges TBAs specified mentioned as rate I coupon volatility point. X.X and point outperforming curve see were lower As up, coupons the implied in can about X, best coupons. Higher higher you performer, X.XX

coupon activity, of in pools terms with specified shifted exposure TBA replaced and we In some TBAs. up

and with the on pool X.X some XXXX. Figure RMBS X.Xs, bids. Incorporating percentage lagged specified rates points quarter, double-digit triggered the We with as notional right increased our On to coupon the wave Xs increased led investing basis the coupon. market X prepayment in bottom to X.Xs. Please Borrowers coupon remains similar primary over effect in our of improve as aggregate, about by carry XX Slide CPR mortgage speeds reflected discuss by higher market The third an rates in the borrower also rates higher speeds by on receiving well increase QX. exposure, in lower incentive points as consistently from dollar MSR. the our our X.X% stable X.X% by the weakened. XX-year a shows competitive the Agency for in propensity mini-refi responded we position in by in rose supported MSR the pools behavior overall refinance speeds net to deals fall quarter, turn from speeds for that rates quarter. Though to in to prepayment to with September effect mortgage bulk a increased MSR by about has and $X.X the billion X.X% XX bought rolls

Figure large-scale lifted same in the number Some approximately opportunities transfers UPB, bids billion dropped see amount $XXX QX XXXX, as acquisitions X. XXXX and by though XX% can the bulk about bid to in in you year-over-year, of

December discuss and Figure add strong both attractive While spreads. Please in XXXX portfolios, demand and portfolio. be in found increased be for bank UPB we there on reflecting X.Xx was at to our MSR portfolio where XX, to The end, of expect billion can from Slide the our an overview the flow of and details multiple $X.X at to is of quarter, increasing to portfolio at will recapture. With settlement and from quarter XX-plus X%. remained MSR the we to UPB at continues slightly ample appendix Slide $XXX which our MSR billion turn X.Xx XX. bulk be rates the of under portfolio nonbank price X opportunities delinquencies MSR mortgage XX, day through channels low

of mortgage CPRs in facilitate slower with MSR prepayment that portfolio experienced compared across so rates our QX into resemble a compares of down portfolio larger gross implied Our Figure those our rate they to comparison in security with X.X% points RMBS. in. In map X.XX% coupons cohorts X.X MSR a TBAs. universe, seasonal by percentage X of we as versus mortgage kicked MSR factors CPR QX, a our order to portfolio rate low

X.Xs with increasing. portfolio that You the of above low for and see prepays and remain our majority can steady slightly

stock, we a Slide outstanding The range allocated preferred XX.X% the in in our return shown expenses, share assets After capital our of structure giving XX.X% estimate we in quarterly return this is prepayments on and of our of table to like XX% our that the return returns the $X.XX. We MSR portfolio. we or are and on platform pick to at of made are static the allocated static if that allocation available will stockholders. our capital is strong to notes our and between of slide. with The XX%. With to on servicing leverage returns half estimate and per with to applying equity the the of top focused outlook the half X.X% static to progress our is XX% XX.X% for XX% XX%. we any capital to significant believe please potential for return falls a remaining prepayments have We common positive effect static portfolio. But Slow show estimate meant after that serve portfolio. before about convertible to our projection servicing what that top potential securities believe in to tailwind the of Finally, believe allocation to capital $X.XX as believe to to is prospective our a even current is turn portfolio portfolio. result our hedge direct-to-consumer static RoundPoint return a for portfolio table it our MSR XX, a will originations on up, return

especially generating on MSR. additional at and efficiencies Additionally, in technology our RoundPoint will contribute through value positively improvements of focus the to cost process servicing,

spreads. RMBS additional and that from will attractive extract manage aim MSR in hedged our might current to happy any nominal XXXX generate now we you to portfolio beyond. Thank levered complement We and actively will have. our wide take very to questions be our returns believe coupon And unique joining today. strategy us for much to you MSR-centric continue continue We returns positioning to historically

Operator

Harter UBS. our [Operator Instructions] Doug from question will with take We first

Marissa Lobo

an on I It's you performed us how in on was update Marissa hoping for could Lobo book has quarter. so far Doug. give the

William Greenberg

is but early the be X% month, only total question. quarter. and It's night. in our return it's It's Thanks as although quarter, to quiet X.X% a estimated reasonably for between last been of about up been of stress I'll that X course, the

Marissa Lobo

earnings on earnings lower the impact be? Got level your And how range view for second, And what it. power? does would the leverage normalized

Nicholas Letica

Nick. you for This the Thank question. is

central mentioned but see, is earnings and As overall our terms we our of power. return that as my remarks, And measure you prepared in ratio from debt-to-economic can at I potential our our the of range really of the one return potential look quarters. and in in of of much prior and the slide supportive our what in is that it our tendency dividend our overall, very returns range was returns still

the components to itself into you as risk as leverage of that's capital mortgage overall such MSR is debt at spread and over how more was normal components they stable remarks, how -- have, reflective risk, of predictable our returns of of is that said of range. And equity. of quarter-over-quarter, XX% beyond But my the and the of our now. we amount right really So in spreads a opinion look look it feel in if the -- assets other increased determines of I that, the And for our really again, some mix prepared of where we our having in future supportive periods. about very that

William Greenberg

might to is as the the less I way portfolio, current risk we of that And MSR risk thing rates coupon that the rates the also hedge hedging more. hedge we need coupon and go as need One rise, current we're MBS right? we that Marissa, add, our down,

we're that so unchanged, that we risk the stresses And that is and leverage unchanged component a move, why our leverage, just of keeping when the an the that on has which measure. impact. impact risk rates has everything And Nick one is as direct manage overall

Marissa Lobo

And -- cost reflect power this that outlook, the volatility? does of your finally, does earnings

William Greenberg

No.

those said, static spreads. As I are

Operator

with We Mikhail will question JMP. next take our from Goberman Citizens

Mikhail Goberman

MBS spreads the throughout see MBS this you year? versus to MSRs And Agency how expand allocation on outlook maybe for the bit guys you also, your Could do a year? for evolving

Nicholas Letica

since of the much would we a other cut But there the I I slightly than more and I would quarter-to-quarter. There's a this that when about in It's being of still a have in is spreads. parts response earlier into there path -- Fed. of the first and notably about and there predictable it Fed mortgage amount think we say, that's lot election say been supply to a and are much cycle. declined the the more good there made is mortgages be we've in the -- What this risk the the the note risk really overall of balance. reflection out question. things seems the still very spread controlled I really was of and has when before seen the -- mortgage think got is are for a are spread that -- reasons pretty has factored still that world. that Thanks that through data-dependent equation -- had of positive fact and November there be Fed presidential net there supply/demand year. there to than I mean

been from think bit uptake We of end uptake they've mortgages by is net general And other good. in, to they than been spread looks reasonably right demand in mortgages. something been quite zone they consistent which that banks. rates, better year, they've managers flows supply the into of a the a RV towards the and funds good consensus were a come little The generally relative the now absorbed -- low assuming, buy spiked I by have the but of amount banks is like last assets world. Funding -- money back market the been was by into in $XXX which of more has what market. There's kind of there's the the billion, amount has

usually the mostly course, and year, buy cut mortgage this go Fed out constructive the because curve is further yield on banks Of to if for more curve encourages the spreads institutions, mortgages. does steeper it

things are So all those points. of good

kind we to feeling to we're spreads from need and not We spreads So are a down quarter, that is this really say we it's perspective. And here, but right need get don't true. every return do now, fairway of where and constructive tighten should is keeping really in performance. it be mortgages us for overall to our the continue spreads

the I have amount can think and it has tremendous come is volatility the that is what that that -- down. be part of you really of -- when difficult a kind of

spreads. are we say as were that I'd this mortgage the volatility that we overall, given there that. our always us has something So on But is -- know can market positive from that we change

of However, really we does to you of lot strategy, look at is of provide stability our returns over last bode of can book of core parts many you good future. for had a the if will our we the and quarters, we've us our overemphasize our key and the foreseeable value the return one a MSR. that stability returns well see economic That think of profile. And really lot which can't

Mikhail Goberman

Great.

So I'm given X? recent it's MBS MSR the what of go, you allocation steady guessing be kind been to versus in is that as to similar that, going the quarter or

Nicholas Letica

Correct.

MSR at to don't move Sorry, we our allocation a we material material see flows as I didn't to -- get our looking always mean can the change new to we -- that expect capital. we change allocation to in don't our in allocation see But cash asset MSR. We're a or invest -- the in not allocation. answer that do question. Yes, to we asset

Mikhail Goberman

And reform Any thoughts this new Great. one in more. on FA person the to and I can it? lead potential GSE squeeze of if nomination

William Dellal

look itself X This to have is or I don't carry to is And William. we and actually. guarantee we And the reform, questions and I X information what securities to we into have more market through about about into happen privatization? is think the of can is the guarantee? breaks those can the they going don't X really going GSE current break guarantee guarantee is that question -- going the the to sub-questions. What happen reform but plans, What potential we whether we we existing the not? Once don't to than what's status of have will GSE the prospective But on. have implications more speculate think more of what status any about securities questions. -- will that has lens the information the at detail regarding at what want

Operator

with George KBW. We will from take our next Bose question

Francesco Labetti

actually is Frankie for This Bose. Labetti on

between start, XX? return to on discuss EAD the range the and differences can static Slide main you provide you Just the

Nicholas Letica

Thank portfolio we mark-to-market everything for quarter XX and is valued get potential return our question. portfolio contemporaneously at in is you, marked -- at the I'll a that Sure. basis Frank, actual it's uses end. that show the on projected started. that it where the date is out, at date. Slide Yes, It

opinion, and portfolio you is when a that where it are our curve a about entire or that potential I asynchronous. it's assessment the potential. EAD use generate take day marked static of good the yields -- the So or on our a is in yield return mean, return to word the same we it's the forward

that if our -- mortgage EAD business the EAD time, like contemporaneous. other something purchase our and or that our the funding, more that the are our you bought structure, such price return have ago pools, as the So reflects of long is at we components repo our are assets where overall whereas many of

on on you have basis a can basis, to and timing to makes portfolio between a can the what it day-to-day to create we So how see sense day-to-day real manage a in that distortions you. -- it things difference those and if

William Greenberg

day, like XX. and it, every about EAD -- is more to were Slide something have The would sell way the Bose, to portfolio you think we buy would that like you look if I on what the

Francesco Labetti

last to Great. to XX% XX% That's MSR to that on fell the return of your quarter. to very just XX% stay helpful. XX% And like from slide, then

the rate lower is in mark-to-market of higher driver quarter? this increase MSR the the on environment, Given the return the the

Nicholas Letica

slice hedge I of things. that our our coupon good through securities, its comments, manage day, biggest the up, MSR a add rates is When hedge this portfolio very to paired securities MSR And our my we mentioned that of it's a -- RMBS and It also that return. the it's the amount as MBS to current return the MBS need strategy, MSR the But typically, portfolio right? It's time. question. strategy MBS time. declines. of is and thing of which and again, is go a component add of The our is, and plus of a a we in that it It's this in is return is combination one that is hedge

of as it if less equal, are the about go hedge part else Consequently, MSR. the of are potential, part of the leverage to smaller goes down overall that There's right? will tend becomes you down, overall, that return way, portfolio being the there So that -- a to attached the securities all pair. that think

Operator

We next our Eric will BTIG. take Hagen question from with

Jake Katsikas

is to Jake any seeing portfolio? guys you new MSR of for on counterparties Are support Eric. or This sources leverage the financing Katsikas

William Greenberg

William. ahead, Go

William Dellal

seen a MSR requests, lenders. in that inbound working calls people been are expand are We've financing. to market. traditional traction trying to new the want with few We've There some into who from gain the entrants

William Greenberg

Yes. general, In to William there. said I add what would just just

to and market that financing continues expand. think depth MSR the I the grow for of

more William said, time. there's market the As counterparties the entering all

product for now. healthy a And right very so it's that market

Jake Katsikas

also bps Great. just And that then can you cuts seen? XXX first rate in the costs changed share the much response of have how to we've

William Greenberg

Which costs are thinking of you specifically?

Jake Katsikas

MSR the in -- portfolio. The

William Greenberg

About... your question. understood not sure I'm I

Nicholas Letica

costs? financing you about talking our Are

Jake Katsikas

it costs back in to shaped how just of can response that saw? general, I up cuts in bps the to XXX kind they've of maybe we Yes, just

William Greenberg

Right.

our... So

Jake Katsikas

that? like cost, things Financing

William Greenberg

rates, understanding our rates costs that. funding some has and would another So SOFR float our of the entire assets, we So funding rates the as MSR income the on our right? in part -- generally say right? and In of changes can or at, the also we offsets I by like rates one costs we maybe have follow well, down, to general, curve, and you're our help But curve very which effect have gone have they a later. in right? Just floating have that hedge yield more have fully of that getting up that as RMBS the small hope I the the side answers what asset on generated so impact so fully our on portfolio, Fed short-term not we your portfolio. I'm cut in financing right? And indexed of SOFR, Lower our MSR some rates that questions. the

Jake Katsikas

does it definitely. Yes,

Operator

for do I to We like questions. closing turn the remarks. any Bill not have would call to further Greenberg back

William Greenberg

like your and thank Two all us joining interest I'd thank for everyone Harbors. to just today in you for

Operator

your call. concludes for participation. you today's This Thank

now may You disconnect.

Two Harbors Investment (TWO) 30 Jan 252024 Q4 Earnings call transcript