Two Harbors Investment (TWO) to Discontinue Mortgage Loan Conduit and Securitization Business
Get Alerts TWO Hot Sheet
Join SI Premium – FREE
Two Harbors Investment Corp. (NYSE: TWO) announced that its Board of Directors has approved a plan to discontinue the Company’s mortgage loan conduit and securitization business. This decision was made due to the challenging market environment facing the business, combined with the intent to reduce operating complexity and costs, and will allow for the reallocation of capital to more attractive and efficient target assets. The wind down process is expected to be substantially completed by the end of 2016.
“I am extremely proud of the efforts of our team since embarking on this initiative in 2011, as the company was able to build out a best-in-class infrastructure, develop a high quality network of mortgage loan originators and establish Agate Bay Mortgage Trust as a well-respected securitization platform,” stated Thomas Siering, Two Harbors’ President and Chief Executive Officer. “However, we believe that current and expected mortgage market conditions and competitive pressures will prevent us from growing this business to a scale that meets our long-term goals and financial expectations. While the decision to exit this business was difficult, we believe it is in the best interest of our shareholders.”
The company’s plan to discontinue the loan and securitization business will result in a reduction in force impacting certain positions that provide services to the company under its external management agreement with PRCM Advisers LLC. The company expects to incur one-time charges of approximately $3 million in the second half of 2016 in connection with the closure. The company also expects that the cessation of its conduit and securitization activities will reduce ongoing operating expenses by approximately $10 to $11 million on an annual basis.
“I would like to thank all personnel impacted by this decision for their dedication and service to the company over the past several years,” stated Mr. Siering. “To our shareholders, we continue to be optimistic about the current and future state of our company, and we are encouraged about our recent results and trends in our business, all of which we will share during our upcoming second quarter earnings release and conference call. We believe that the initiatives we are taking position us to become a more focused and efficient company, maximizing risk-adjusted returns to our shareholders and reinforcing our leadership position in the industry.”
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- IBM tumbles on soft Q1 revenue; announces HashiCorp $6.4bn acquisition
- STMicroelectronics cuts outlook as slower demand causes Q1 miss
- Meta Platforms Inc. (META) PT Lowered to $500 at Goldman Sachs, 'Management Track Record of Execution Leaves Us Long-Term Constructive'
Create E-mail Alert Related Categories
Corporate News, Hot Corp. News, Management CommentsRelated Entities
Pine River Capital Management, EarningsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!