Two Harbors Investment third-quarter earnings impacted by wider mortgage spreads (NYSE:TWO)

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Two Harbors Investment (New York Stock Exchange:2) Tuesday’s third-quarter earnings were below average Wall Street consensus and down from a year ago as widening mortgage spreads negatively impacted mortgage REIT book values.

Still, TWO shares Obtained 1.2% with extended trading.

Two Harbors Chief Investment Officer Nick Letica said: “We can benefit from slowing down with a portfolio of low-coupon MSRs and high-coupon RMBS.”

Third Quarter Earnings Distributable $0.64, which missed the $0.79 consensus, fell from $0.87 in the second quarter, which ended June 30.

A book value of $16.42 per common share represents an economic gain of -16.2% over book value. That’s a -4.7% economic profit to book value compared to $20.41 in the second quarter.

The total portfolio was $16.56 billion as of September 30 and $18.44 billion as of June 30.

Average portfolio yield was 4.61%, up from 4.39% in Q2, average cost of funding was 2.84% versus 1.69% in Q2, and net spread in Q3 was 2.70% in Q2 to 1.77%.

Gross interest income was $94.39 million, up from $36.04 million in Q3 2021.

meeting phone November 9th at 9:00 AM ET.

Previously, Two Harbors Investment Non-GAAP EPS of $0.64 was a $0.15 miss. $11.04 million net interest income.

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