We Are A Leading Residential Mortgage REIT

• Announced that we agreed to acquire RoundPoint Mortgage Servicing Corporation, a residential mortgage loan servicer, which is expected to close in Q3 2023 and result in several benefits to the company, including:
  • incremental annual pre-tax earnings of approximately $20 million, following the transfer of the company's MSR portfolio to RoundPoint, through additional revenue streams and cost savings as a result of vertically integrating the servicing of our own portfolio
  • long-term opportunities to expand upon and leverage RoundPoint's existing servicing platform and capabilities to pursue additional business opportunities
• Executed on actions to optimize our liability and capital structure:
  • Repurchased 2.9 million shares of our preferred stock at a significant discount to par, contributing approximately $22 million, or $0.26 per share⁽¹⁾, to our common book value
  • Retired the remaining $143.8 million of our 6.25% convertible senior notes due 2022
• Delivered value to stockholders through total dividends of $2.64 per common share in 2022, equivalent to an average dividend yield of 13.8%⁽²⁾
• Reported book value of $17.72 at December 31, 2022, compared to $23.47 at December 31, 2021. When including $2.64 per common share of dividends paid, our total economic return on book value of (13.3%) demonstrates the value in our strategy of pairing Agency RMBS with MSR at protecting from further book value erosion that was experienced by many of our peers

^{(1) On November 1, 2022, we effected a one-for-four reverse stock split of our outstanding shares of common stock. All per share amounts for all periods presented herein have been adjusted on a retroactive basis to reflect the reverse stock split.
(2) Average dividend yield is calculated based on the dividends declared in the given period, divided by the average daily closing share price during the given period.}

• In anticipation of the Federal Reserve’s taper of RMBS purchases, we reduced our leverage during the year. At year-end, our portfolio totaled $13.6 billion.
• We grew our MSR portfolio to $194 billion unpaid principal balance (UPB) through bulk and flow acquisitions.
• We enhanced our liability and capital structure:
  • Issued $288 million of convertible debt due in 2026 and retired $144 million of convertible debt due in 2022
  • Redeemed $75 million Series D and $200 million Series E preferred shares
  • Issued 70 million common shares for net proceeds of approximately $450 million
• We delivered total dividends of $0.68 per common share, equivalent to an average dividend yield of 10%.
• We relocated our Minnesota headquarters to newly-constructed LEED Certified offices, furthering our goals of reducing our environmental impact and promoting the health and well-being of our employees.

• We navigated through the unprecedented market volatility and dislocation induced by the COVID-19 pandemic.
• Our portfolio totaled $21.8 billion reflecting actions taken to de-risk the balance sheet as well as to amass liquidity in response to the market volatility.
• We honed our investment strategy to focus on Agency + MSR.
• We completed our transition from external management to internal management.
• Our MSR investments grew through both bulk and flow-sale acquisitions to $178 billion unpaid principal balance (UPB).
• We diversified and broadened access to MSR financing sources as well as closed a $200 million financing facility for servicing advances.

• We celebrated the tenth anniversary of Two Harbors and had:
  • A $41.0 billion portfolio
  • $5 billion in total stockholders’ equity
  • A 256% total stockholders’ return since inception
  • A 10.4% book value growth since inception, compared to the peer average of -28.3%
• Our MSR investments grew through both bulk and flow-sale acquisitions. We had a portfolio fair market value of $1.9 billion as of December 31, 2019.
• We diversified financing for our MSR assets through a $400 million securitization of five-year term notes.

• We acquired CYS Investments, Inc. (NYSE: CYS), growing our market capitalization and equity base; the transaction had many benefits, including increasing the liquidity of our stock and lowering our expense ratio.
• We added $75.9 billion UPB of MSR through bulk and flow-sale acquisitions, growing our portfolio by 60% year-over-year.

• We formed a new publicly traded REIT, Granite Point Mortgage Trust, Inc. (NYSE: GPMT) to continue and expand the commercial real estate (CRE) lending business we launched in 2014.
• We contributed our CRE lending portfolio to Granite Point in connection with its IPO in exchange for approximately 33.1 million shares of Granite Point common stock, which we subsequently distributed to Two Harbors’ common stockholders with a value of approximately $3.67 per common share.
• We enhanced our balance sheet and capital structure through the issuance of one convertible debt and three preferred stock offerings.

• We completed a strategic review of the company and, as a result, we made the decision to discontinue our mortgage loan conduit in order to reduce our costs and complexity.
• We continued to increase the capital allocated to our CRE lending strategy. Our aggregate CRE debt portfolio carried a value of $1.4 billion on December 31, 2016.
• We added $32.0 billion in UPB of MSR through bulk and flow-sale acquisitions. Our portfolio’s fair market value was $693.8 million on December 31, 2016.

• We sponsored seven securitizations backed by prime jumbo residential mortgage loans.
• We advanced our CRE lending strategy, adding senior and mezzanine CRE debt assets.
• We continued to acquire MSR through several bulk acquisitions and meaningfully expanded the number of relationships in our MSR flow-sale program.

• We celebrated our 5th anniversary and had:
  • A $16 billion portfolio
  • $4.1 billion of total stockholders’ equity
  • A total stockholder return of 125% since inception.
• We expanded our operational businesses, completed three securitizations backed by prime jumbo residential whole loans and continued to build our MSR flow seller network.
• We launched a CRE lending initiative with an initial capital commitment of $500 million of equity capital.

• We distributed 17.8 million shares of Silver Bay common stock to Two Harbors’ stockholders, with a value of approximately $1.88 per share.
• We closed on the purchase of Matrix Financial Services Corporation, a residential mortgage loan servicer with approvals to hold and manage MSR.
• We completed our first bulk acquisition of MSR and initiated our first flow-sale arrangement.
• We announced our membership in the Federal Home Loan Bank (FHLB) of Des Moines, providing a diversified funding source for our mortgage-related assets.

• We participated in the formation of a publicly-traded REIT, Silver Bay Realty Trust Corp. (Silver Bay). We contributed our portfolio of single-family residential homes to Silver Bay in conjunction with its initial public offering in December 2012 in exchange for common stock of Silver Bay.
• We acquired mortgage loans held for sale with a carrying value of approximately $60 million, with the future intention to securitize these loans and/or exit through a whole loan sale.

• We transferred our common stock listing to the New York Stock Exchange (NYSE) from the NYSE Amex.
• We announced our plan to establish a mortgage whole loan securitization program focused on prime jumbo residential loans.
• We identified an opportunity to begin investing in single-family residential properties, holding the properties for investment and renting them for income.

• We steadily grew our market capitalization and raised $235 million through two common stock offerings.

• Two Harbors was founded on October 29, 2009, with an initial market capitalization of $124 million.
• We began with a differentiated hybrid approach of investing in both Agency and non-Agency RMBS as well as sophisticated hedging and risk management.