Two Harbors (NYSE:TWO) Investment Corp. (NYSE:TWO), a real estate investment trust, announced executive changes today, including the appointment of an interim Chief Financial Officer (CFO) and an acting Chief Accounting Officer (CAO).
Mary Riskey, who served as Vice President and CFO, has resigned from her position, effective today, following her previously disclosed retirement plans. To fill the vacancy, the Board of Directors appointed William Dellal as Vice President and Interim CFO. Dellal, 74, brings a wealth of experience to the role, having recently worked at Pagaya (NASDAQ:PGY) Technologies Ltd. and previously held executive positions at Caliber Home Loans, Inc., and CitiMortgage, Inc.
Dellal's appointment comes with an annual base salary of $500,000 and a guaranteed annual cash incentive award of $213,115 for the 2024 performance year, to be paid in the first quarter of 2025. If Dellal is removed from his position, other than for cause, before his first employment anniversary, he is entitled to an additional payment of $286,885, payable in the first quarter of 2026. Additionally, he will receive restricted stock units (RSUs) valued at $500,000 in the first quarter of 2025, with terms consistent with other executive officers. However, due to the interim nature of his role, Dellal is not eligible for the Company's Severance Benefits Plan and does not have an employment agreement with the Company.
Alongside Dellal's appointment, Blake Johnson has been named the Acting CAO, effective immediately. Johnson, 40, has been with Two Harbors since 2012, previously serving as Controller since 2018. His prior experience includes positions at Wells Fargo Bank, N.A., Deloitte, LLP, Opus Corporation, and Ernst & Young, LLP. Johnson's educational background includes a B.A. in Business Administration, a M.S. in Accountancy, a M.B.T., and a MSc in Finance from prestigious institutions.
There were no changes to Johnson's compensatory arrangements in connection with his appointment as Acting CAO, and he does not have an employment agreement with the Company.
The company stated that there are no familial relationships between Dellal or Johnson and any directors or executive officers, and no transactions involving them that would require disclosure under SEC regulations.
In other recent news, Two Harbors Investment Corp . reported its financial results for the second quarter of 2024, revealing a stable economic return alongside executive shifts. The company announced the retirement of CFO Mary Riskey and the appointment of William Dellal as interim CFO. Amidst these changes, Two Harbors maintained a hedged investment strategy, ending the quarter with a book value of $15.19 per share and a total economic return of 0%.
The company's portfolio was valued at $16 billion with a leverage of 6.8 times, influenced by market volatility and rising interest rates. Two Harbors' Mortgage Servicing Rights (MSR) portfolio performed well due to strong bids and limited supply, with unused MSR asset financing capacity of $630 million and $91 million for servicing advances.
Two Harbors anticipates a decline in market volatility and a potential tightening of spreads in a lower interest rate environment, remaining optimistic about the return potential of its investments. Despite increased market volatility and rising interest rates, the company actively managed its exposure, adjusting positions between specified pools and TBAs.
InvestingPro Insights
As Two Harbors Investment Corp. (NYSE:TWO) navigates through its executive transitions, investors and stakeholders may find value in the latest financial data and insights. According to InvestingPro data, Two Harbors has a market capitalization of $1.38 billion and a P/E ratio of 15.57, indicating a relatively moderate valuation of its earnings. The company's revenue growth over the last twelve months, as of Q2 2024, stands at an impressive 50.67%, showcasing significant top-line expansion. However, it's important to note the quarterly revenue growth for Q2 2024 shows a contraction of 42.83%, which may reflect seasonal fluctuations or specific market challenges.
In terms of shareholder returns, Two Harbors has a high dividend yield of 13.36%, reflecting its commitment to returning value to its investors. This is further supported by one of the InvestingPro Tips which highlights that the company has maintained dividend payments for 16 consecutive years, underscoring its financial stability and reliability as an income-generating investment. Moreover, the company's fair value, as assessed by analysts, is listed at $14.5, suggesting potential upside from its previous close price of $13.47.
For those considering an investment in Two Harbors or seeking to understand the company's financial health in light of its executive changes, additional InvestingPro Tips are available, which include a perfect Piotroski Score of 9, indicating strong financial positioning, and expectations of net income growth this year. Investors can explore further tips and detailed analysis on InvestingPro, where a total of 7 tips are listed to aid in making informed decisions.
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