Two Harbors Investment Corp · NYSE:TWO
Two Harbors Investment — Investor Presentation (August 2010)
17 slides from Two Harbors Investment's investor presentation, Aug 23, 2010
Slide 1: Two Harbors Investment Corp. Investor Presentation
Two Harbors Investment Corp. Investor Presentation
Slide 2: Safe Harbor Statement
Safe Harbor Statement Forward-Looking Statements This presentation includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Actual results of Two Harbors Investment Corp. (“Two Harbors” or the “Compa
Slide 3: Two Harbors Business Summary
‘Two Harbors Business Summary = Launched as a residential mortgage REIT in October 2009 with $124 million in cash. = Completed secondary offering raising net proceeds of $107 million in April 2010. Achieved 16% annualized return on average equity on an Adjusted GAAP Earnings basis for the first two
Slide 4: Overview of Pine River Capital Management
Overview of Pine River Capital Management Global multi-strategy asset management firm providing comprehensive portfolio management, transparency and liquidity to institutional and high net worth investors. | Founded June 2002 with offices in New York, London, Hong Kong, San Francisco and Minnesota.
Slide 5: Two Harbors Team with Deep Securities Experience
Two Harbors Team with Deep Securities Experience Investment Team Co-Chief Investment Officers " 14-member RMBS Team Steven Kuhn William Roth Traders and Analysts — Also serves as Partner - Head of Fixed — Also serves as Fixed Income Portfolio — ‘Trading team of four traders and Income Trading of Pin
Slide 6: Investment Style: Balanced Risk Approach
Investment Style: Balanced Risk Approach Interest Rate Risk Prepayment Risk = Low interest rate = Portfolio focused on Mortgage Credit Risk = Conservative stance on once exposure prepayment stability and mortgage credit y upside = Interest-Only Bonds used | m@ Agency bonds and = Focus on lower price
Slide 7: Current Market Considerations
Current Market Considerations Prepayment Risk Conditions Low rates Benign speeds due to tight credit conditions Mortgage prices high Many homeowners delinquent and/or underwater Credit and housing have stabilized No pickup in economy/ housing market imminent Considerations Faster prepays ~ Loosening
Slide 8: Investment Approach: Security Selection
Investment Approach: Security Selection Experienced, 14-member MBS investment team focused on cross-sector, relative-value approach Real time tisk analysis and [Dynamic capital allocation investment committee into the most attractive oversight i sub-sectors of the market Bond selection based on Supe
Slide 9: Well-balanced and Attractive Portfolio
Well-balanced and Attractive Portfolio Portfolio Insigh Post 2006 12 @ Interest Rate Risk ee = Maintains relatively low interest rate exposure Pxpayment = Interest-Only bonds (IOs) benefit from higher protected interest rates Lowloun us ; Pi it Risk ti © Prepayment Ris Dh Pee 2002 12% = 88% of Agenc
Slide 10: Portfolio Summary
Portfolio Summary Investment Portfolio @ Portfolio Summary Gnmiond Mezzanine $47 Hybrid Senior ARMs $179 $290 Interest- az, Only Bonds $13 Fixed Rate $373 Total portfolio: $902 WAgency bonds Ml Non-Agency bonds © Moderate leverage allows for high liquidity and ability to take advantage of market opp
Slide 11: Liquidity Management and Financing
Liquidity Management and Financing Liquidi = Laddered maturity schedule enhances liquidity profile = Thirteen financing counterparties allow for diversified funding sources © m= One year credit facility with Wells Fargo to provide financing on non-Agency bonds = Repo Manager with 20 years of experie
Slide 12: Achieving Attractive Returns With Lower Risk
Achieving Attractive Returns With Lower Risk Superior asset selection and risk management generate market returns while taking on much less risk Attractive & Comparable Dividend Yield... With Lower Leverage @) 2n0% 6.08 san 16.0% 15.8% 130% 4.0% 25. 100% ~ : L | 2.2010 ge-2010 2.2010 2.2010 10 Pest
Slide 13: TWO: Positioned to Deliver Value to Shareholders
TWO: Positioned to Deliver Value to Shareholders Investment objective of achieving attractive returns with balanced risks. = Experienced RMBS team with a proven track record and a relative value focus. a Proprietary technology platform allows for robust screening/ portfolio construction. a Intense f
Slide 14: Appendix
Appendix
Slide 15: Executive Team
Executive Team ‘Thoma: Siering, Chief Executive & Disector. Mz Sicting also serves as Partner—Head of Fundamental Steatagies of Pine River, Peiot to joining Pine River as 4 Partner in 2006, Tom was head of the V due Investment Group at EEF & Associates in Minnetonka, Minnesota, He joined EBF in 1989
Slide 16: Executive Team Continued...
Executive Team Continued... Brad Farrell, Controller. Prior to joining Pine Riverin September 2009, Brad was Vice President, Disectos, External Reporting for GMAC ResC ap, sesponsible for external potting initistives within the corporate Function of GMAC Ras Cap from 2007 to 2009. From 2002 to 2007
Slide 17: Contact Information
Contact Information For further information, please contact: Anh Huynh Investor Relations Two Harbors Investment Corp. 212,634, 3221
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